HOUSTON, May 6 /PRNewswire-FirstCall/ -- Frontier Oil Corporation
(NYSE: FTO) announced a net loss of ($3.7) million, or ($0.14) per share, for
the first quarter ended March 31, 2004, the same results as the first quarter
of 2003. The 2004 first quarter results benefited from strong gasoline
margins and crude oil differentials. Gasoline crack spreads were $7.49 per
barrel in the first quarter 2004 compared to $5.85 per barrel in the first
quarter of 2003. Offsetting these positive factors, the 2004 first quarter
was negatively impacted by a fire in the coker furnaces and planned turnaround
activity at the Cheyenne Refinery and continued high legal expenses. The
timing of the planned Cheyenne maintenance was accelerated to allow the
Company to maximize crude charge rates for the remainder of the year as well
as to capture higher gasoline margins prior to the peak driving season. The
2003 first quarter results were negatively impacted by a crude unit turnaround
at the El Dorado Refinery.
(Logo: http://www.newscom.com/cgi-bin/prnh/20010411/FTOLOGO )
Total crude charge for the first quarter 2004 averaged approximately
152,000 barrels per day compared to 144,800 barrels per day in the first
quarter 2003. The crude charge rate in 2004 was higher than in 2003 despite
the fire at the Cheyenne Refinery and planned and unplanned maintenance at
both refineries largely because of the crude unit turnaround at El Dorado in
2003. The maintenance at both refineries led to a reduction in crude charge
and an increase in inventories of intermediates. Operating expenses for the
first quarter 2004 increased $4.0 million from the first quarter 2003 due
primarily to higher natural gas costs and increased maintenance expenses.
Legal expenses for the quarter totaled approximately $4.8 million related
primarily to the ongoing Holly Corp. lawsuit and the Beverly Hills litigation.
Frontier expects a ruling on the Holly litigation from the Delaware Chancery
Court this summer.
Frontier's Chairman, President and CEO, James Gibbs, commented, "Although
we are disappointed by the impact of the fire at Cheyenne and our first
quarter results, we are extremely encouraged by the outlook for the remainder
of the year. The second quarter is off to a terrific start as gasoline and
distillate crack spreads in our principal markets and the WTI/WTS and
light/heavy crude spreads are well above last year and five-year averages. We
completed planned and unplanned maintenance at both refineries in the first
quarter and we expect to run at capacity for the remainder of the year. In
fact, notwithstanding the fire at Cheyenne, we expect to exceed our original
crude running plan for the year."
Frontier's balance sheet remains healthy with a cash balance of
$62.6 million as of March 31, 2004. Total inventory increased from
$124.0 million at December 31, 2003 to $161.7 million at March 31, 2004 due to
the continued rise in price of crude oil and finished products and the
unplanned downtime described above. Total debt outstanding at the end of the
first quarter 2004 was $248.7 million, comprised of $80.0 million borrowed
under the Company's revolving credit facility and $168.7 million in long-term
debt.
The first quarter results include an after-tax inventory gain of
approximately $9.0 million, or $0.34 per share, compared to a gain of
$5.2 million, or $0.20 per share, for the same period of 2003.
Conference Call
A conference call is scheduled for today, May 6, 2004, at 11:00 a.m.
eastern time, to discuss the financial results. To access the call, please
dial (800) 915-4836. For those outside the U.S., please call (973) 317-5319.
A replay may be heard through May 18, 2004 by dialing (800) 428-6051 and
entering the passcode 352038. To access the call or the replay via the
Internet, go to http://www.frontieroil.com and register on the Investor Relations
page.
Frontier operates a 110,000 barrel-per-day refinery located in El Dorado,
Kansas, and a 46,000 barrel-per-day refinery located in Cheyenne, Wyoming, and
markets its refined products principally along the eastern slope of the Rocky
Mountains and in other neighboring plains states. Information about the
Company may be found on its web site http://www.frontieroil.com .
This press release includes "forward-looking statements" as defined by the
Securities and Exchange Commission. Such statements are those concerning
strategic plans, expectations and objectives for future operations. All
statements, other than statements of historical facts, included in this press
release that address activities, events or developments that the Company
expects, believes or anticipates will or may occur in the future are forward-
looking statements. These statements are based on certain assumptions made by
the Company based on its experience and perception of historical trends,
current conditions, expected future developments and other factors it believes
are appropriate in the circumstances. Such statements are subject to a number
of assumptions, risks and uncertainties, many of which are beyond the control
of the Company. Investors are cautioned that any such statements are not
guarantees of future performance and that actual results or developments may
differ materially from those projected in the forward-looking statements.
FRONTIER OIL CORPORATION
Three Months Ended
March 31,
2004 2003
INCOME STATEMENT DATA ($000's except per share)
Revenues $537,332 $499,384
Raw material, freight and other costs 464,583 435,304
Refinery operating expenses, excluding
depreciation 55,290 51,311
Selling and general expenses, excluding
depreciation 6,675 4,678
Merger termination legal costs 3,287 0
Operating income before depreciation
(EBITDA) (A) 7,497 8,091
Depreciation 7,819 6,960
Operating (loss) income (322) 1,131
Interest expense and other financing costs 5,856 7,426
Interest income (201) (373)
Benefit for income taxes (2,241) (2,222)
Net loss $(3,736) $(3,700)
Net loss per share $(0.14) $(0.14)
Average shares outstanding (000's) 26,300 25,864
OTHER FINANCIAL DATA ($000's)
Cash flow before changes in working capital $4,570 $2,658
Working capital changes (21,828) (21,997)
Net cash used by operating activities (17,258) (19,339)
Net cash used by investing activities (16,581) (6,607)
Net cash provided by financing activities 31,953 27,513
OPERATIONS
Consolidated
Operations (bpd)
Total charges 152,015 144,824
Gasoline yields 74,468 74,614
Diesel yields 47,459 42,760
Total sales 148,642 144,921
Refinery operating margin information
($ per sales bbl)
Refined products revenue $39.97 $38.16
Raw material, freight and other costs 34.35 33.38
Refinery operating expenses, excluding
depreciation 4.09 3.93
Refinery depreciation 0.56 0.54
Light/Heavy crude spread ($ per bbl) (B) $8.17 $7.37
WTI/WTS Differential ($ per bbl) 2.88 2.38
At March 31, At December 31,
BALANCE SHEET DATA ($000's) 2004 2003
Cash, including cash equivalents $62,634 $64,520
Working capital 21,390 38,621
Short-term and current debt 80,000 45,750
Total long-term debt 168,742 168,689
Shareholders' equity 165,592 169,277
(A) EBITDA represents income before interest expense, interest income,
income tax, and depreciation and amortization. EBITDA is not a
calculation based upon generally accepted accounting principles;
however, the amounts included in the EBITDA calculation are derived
from amounts included in the consolidated financial statements of
the Company. EBITDA should not be considered as an alternative to
net income (loss) or operating income (loss), as an indication of
operating performance of the Company or as an alternative to
operating cash flow as a measure of liquidity. EBITDA is not
necessarily comparable to similarly titled measures of other
companies. EBITDA is presented here because it enhances an
investor's understanding of Frontier's ability to satisfy principal
and interest obligations with respect to Frontier's indebtedness and
to use cash for other purposes, including capital expenditures.
EBITDA is also used for internal analysis and as a basis for
financial covenants. Frontier's EBITDA for the three months ended
March 31, 2004 and 2003 is reconciled to net loss as follows:
Three Months Ended
March 31,
2004 2003
Net loss $(3,736) $(3,700)
Subtract benefit for income taxes (2,241) (2,222)
Add interest expense and other financing costs 5,856 7,426
Subtract interest income (201) (373)
Add depreciation 7,819 6,960
EBITDA $7,497 $8,091
(B) Average light/heavy crude oil spread is the differential between the
benchmark average West Texas Intermediate (WTI) crude priced at
Cushing, Oklahoma and the heavy crude oil priced delivered to the
Cheyenne Refinery. The light/heavy spread has been restated in
prior periods using WTI as the light crude oil in order to be
comparable with the WTI/WTS spread reported for the El Dorado
Refinery.
SOURCE Frontier Oil Corporation
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Related links:
http://www.frontieroil.com
Photo Notes:
NewsCom:
http://www.newscom.com/cgi-bin/prnh/20010411/FTOLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
Company News On-Call:
http://www.prnewswire.com/comp/118801.html
CONTACT:
Doug Aron of Frontier Oil Corporation,
+1-713-688-9600, ext. 145
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