HOUSTON, Oct. 30 /PRNewswire/ -- Pennzoil-Quaker State Company (NYSE: PZL)
today announced third quarter recurring net income of $15.4 million, a
166 percent improvement versus a year ago. On a per share basis, recurring
earnings were 20 cents for the quarter, versus 7 cents a year ago. The
increase in net income reflects improvement from all operating business
segments, partially offset by higher interest expense. Including nonrecurring
charges related to one-time merger and restructuring costs, reported net
income was $6.8 million or 9 cents per share. Revenue in the quarter
increased 5.1 percent versus a year ago, to $798.7 million.
For the first nine months of 2000, recurring net income was $40.7 million,
or 52 cents per share versus 41 cents per share for the same period last year.
Including nonrecurring charges, reported net income for the first nine months
of 2000 was $1.5 million or 2 cents per share. Year-to-date, revenue
increased 9.7 percent to $2.4 billion.
"Pennzoil-Quaker State Company has maintained strong operational
fundamentals despite an unprecedented rise in the cost of basic raw materials
and related adverse market conditions," said Jim Postl, president and chief
executive officer. "We have taken several steps in response to these
conditions, including implementing the appropriate price increases and
accelerating key cost cutting initiatives as well as efforts to reduce working
capital. Additionally, we remain optimistic that we will achieve the
divestiture of non-strategic assets and confident in our ability to execute
our strategic plan."
Lubricants and Consumer Products: Recurring operating income for this
segment increased 2.5 percent to $54.8 million in the third quarter versus
$53.5 million last year. Third quarter revenue increased 8.4 percent to
$507.4 million, driven by a 14.2 percent increase from consumer products and a
23.3 percent increase from international. Lubricants' revenue increased
5.7 percent versus a year ago.
For the first nine months of 2000, revenue and recurring operating income
increased 5.1 percent and 3.5 percent, respectively, from a year ago.
Pennzoil(R) motor oil is America's number one selling motor oil with an
average 12-month market share of 22.3 percent compared to 21.8 percent for the
same period last year. Quaker State(R) motor oil is the number two selling
motor oil in the United States with an average market share of 14.3 percent,
0.2 percent ahead of the number three competitor.
Jiffy Lube International: Recurring operating income for Jiffy Lube in the
third quarter was $7.9 million, a 34 percent increase from $5.9 million last
year. Comparable store sales were up 5.8 percent systemwide in the quarter.
Revenues were $87.3 million, a 15.3 percent decrease from the third quarter a
year ago due to the sale of company-owned stores to franchisees after the
merger. The year-over-year improvement in operating income highlights the
continued turnaround begun late in 1999 at the nation's number one fast lube
operation.
For the first nine months of 2000, comparable store sales were up
5.6 percent and recurring operating income increased 57.8 percent from a year
ago. Year-to-date revenues decreased 22.7 percent due to the sale of
company-owned stores.
Excel: Excel Paralubes is being reported as a separate segment for the
first time in the third quarter of 2000. This segment includes
Pennzoil-Quaker State's investment in a 50/50 partnership with Conoco. The
partnership operates a facility that produces approximately 20,000 barrels per
day of high-quality base oils. Recurring operating income for this segment
was $11.9 million in the third quarter compared to $4.4 million in 1999.
Total revenues before intersegment sales eliminations were $57.6 million, a
62.7 percent increase from $35.4 million for the third quarter of 1999.
For the first nine months of 2000, revenues increased 87 percent while
recurring operating income increased $21.0 million from a year ago to
$31.0 million, primarily due to higher base oil margins.
Base Oil & Specialty Products: Recurring operating loss for this segment
was $5.8 million in the third quarter compared to a recurring operating loss
of $11.6 million in 1999, reflecting improved margins and lower expenses.
Total revenue was $259.1 million, a 5.7 percent increase from $245.2 million
for the third quarter of 1999.
For the first nine months of 2000, revenue increased 39.3 percent while
recurring operating income improved $5.2 million from a year ago to a loss of
$15.2 million.
Note: The company's third quarter conference call with the financial
community will be broadcast live on the internet beginning at 9:00 a.m. CST on
Monday, October 30th. The audio recording will be available for one week
following the live call. To listen to the call, please visit the company's
website at http://www.pennzoil-quakerstate.com/.
Pennzoil-Quaker State Company is a leading worldwide automotive consumer
products company, marketing over 1,300 products with 20 leading brands in more
than 50 countries. The company markets Pennzoil(R) and Quaker State(R) brand
motor oils, the number one and number two selling motor oils in the United
States. Jiffy Lube, a wholly owned subsidiary of Pennzoil-Quaker State
Company, is the world's largest fast lube operator and franchiser. For more
information about Pennzoil-Quaker State Company, visit its web site at
http://www.pennzoil-quakerstate.com/.
The following are the unaudited results of operations for the quarter and
nine months ended September 30, 2000 compared to the same periods in 1999.
Three Months Ended Nine Months Ended
September 30 September 30
2000 1999 2000 1999
(Expressed in thousands except per share amounts)
REVENUES
Lubricants and
Consumer Products $507,429 $468,306 $1,528,266 $1,454,435
Base Oil and
Specialty Products 259,144 245,190 826,868 593,947
Jiffy Lube 87,317 103,072 258,323 334,278
Excel 57,588 35,372 161,796 86,368
Other 4,044 (1,534) 5,192 (3,108)
Intersegment sales (116,821) (90,066) (343,099) (244,004)
Total revenues $798,701 $760,340 $2,437,346 $2,221,916
OPERATING INCOME
Lubricants and
Consumer Products $51,286 $45,051 $154,211 $138,697
Base Oil and
Specialty Products (5,800) (13,485) (29,019) (28,710)
Jiffy Lube 7,921 (330) 18,797 (1,196)
Excel 11,859 4,382 30,997 10,001
Other 3,582 (5,622) (916) 5,158
Total operating income 68,848 29,996 174,070 123,950
Corporate administrative
expenses 16,539 17,489 85,680 58,029
Interest charges, net 24,334 20,143 69,576 58,965
Income (loss) before
income tax 27,975 (7,636) 18,814 6,956
Income tax provision
(benefit) 21,106 (892) 17,272 9,617
NET INCOME (LOSS) $6,869 $(6,744) $1,542 $(2,661)
BASIC AND DILUTED
EARNINGS (LOSS) PER SHARE $0.09 $(0.09) $0.02 $(0.03)
AVERAGE SHARES OUTSTANDING
BASIC 78,573 77,874 78,395 77,760
DILUTED 79,910 77,874 79,254 77,760
END OF PERIOD
SHARES OUTSTANDING 78,663 77,926 78,663 77,926
The following reconciles unaudited results of operations with recurring
results for the three months ended September 30, 2000.
Three Months Ended
September 30, 2000
Nonrecurring
Reported Items Recurring
(Expressed in millions
except per share amounts)
OPERATING INCOME
Lubricants and Consumer Products $51.2 $3.6 [1] $54.8
Base Oil and Specialty Products (5.8) --- (5.8)
Jiffy Lube 7.9 --- 7.9
Excel 11.9 --- 11.9
Other 3.6 --- 3.6
Total operating income 68.8 3.6 72.4
Corporate administrative expenses 16.5 (1.2)[2] 15.3
Interest charges, net 24.4 --- 24.4
Income before income tax 27.9 4.8 32.7
Income tax provision (benefit) 21.1 (3.8) 17.3
NET INCOME $6.8 $8.6 $15.4
BASIC AND DILUTED
EARNINGS PER SHARE $0.09 $0.11 $0.20
Explanation of Nonrecurring Items
[1] Lubricants and Consumer Products
One-time merger costs 3.6
[2] Corporate and administrative
One-time merger costs 1.0
G&A cost reduction project 0.2
1.2
The following reconciles unaudited results of operations with recurring
results for the nine months ended September 30, 2000.
Nine Months Ended
September 30, 2000
Nonrecurring
Reported Items Recurring
(Expressed in millions
except per share amounts)
OPERATING INCOME
Lubricants and Consumer Products $154.1 $7.6 [1] $161.7
Base Oil and Specialty Products (29.0) 13.8 [2] (15.2)
Jiffy Lube 18.8 1.4 [3] 20.2
Excel 31.0 --- 31.0
Other (0.9) --- (0.9)
Total operating income 174.0 22.8 196.8
Corporate administrative expenses 85.7 (38.0)[4] 47.7
Interest charges, net 69.6 --- 69.6
Income before income tax 18.7 60.8 79.5
Income tax provision 17.2 21.6 38.8
NET INCOME $1.5 $39.2 $40.7
BASIC AND DILUTED
EARNINGS PER SHARE $0.02 $0.50 $0.52
Explanation of Nonrecurring Items
[1] Lubricants and Consumer Products
One-time merger costs 7.6
[2] Base Oil and Specialty Products
Restructuring costs 0.8
Costs associated with
Shreveport fire 13.0
13.8
[3] Jiffy Lube
One-time merger costs 1.4
[4] Corporate and administrative
G&A cost reduction project 34.6
One-time merger costs 3.4
38.0
PENNZOIL - QUAKER STATE COMPANY
OPERATING HIGHLIGHTS
(UNAUDITED)
Three Months Ended % Nine Months Ended %
September 30 Change September 30 Change
2000 1999 2000 1999
LUBRICANTS AND
CONSUMER PRODUCTS
Total recurring
revenues
(in thousands):
Lubricants $362,460 $342,990 5.7% $1,084,778 $1,054,040 2.9%
Consumer
Products 81,722 71,560 14.2% 265,874 238,779 11.3%
International 66,189 53,672 23.3% 189,391 161,691 17.1%
Eliminations
& Other (2,943) 89 N/A (11,778) (66) N/A
Total
recurring
revenues $507,428 $468,311 8.4% $1,528,265 $1,454,444 5.1%
Recurring
operating
income
(in thousands):
Lubricants $46,611 $41,083 13.5% $122,413 $115,064 6.4%
Consumer
Products 5,983 8,552 -30.0% 27,880 30,756 -9.4%
International 2,254 3,853 -41.5% 11,430 10,362 10.3%
Total
recurring
operating
income $54,848 $53,488 2.5% $161,723 $156,182 3.5%
JIFFY LUBE
Domestic
systemwide
sales (in
thousands) $307,394 $279,818 9.9% $888,605 $809,386 9.8%
Same center
sales Jiffy
Lube (in
thousands) $288,146 $272,246 5.8% $827,277 $783,377 5.6%
Systemwide
Centers open 2,172 2,117 2.6% 2,172 2,117 2.6%
BASE OIL AND
SPECIALTY
PRODUCTS
Shreveport raw
materials
processed
(bbls per
day) 46,553 50,025 -6.9% 40,547 47,191 -14.1%
Shreveport
average
refiner's
margin
($ per bbl) $2.87 $2.75 4.4% $2.79 $3.38 -17.5%
WTI Crude Oil $31.58 $21.72 45.4% $29.64 $17.47 69.7%
EXCEL
Base oil
production
(bbls per day) 9,763 10,010 -2.5% 10,024 8,790 14.0%
Average base
oil margin
($ per bbl) $21.49 $14.09 52.5% $19.60 $16.41 19.4%
SOURCE Pennzoil-Quaker State Company
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http://www.prnewswire.com/comp/684550.html or fax,
800-758-5804, ext. 684550
CONTACT:
media, Ray Scippa, 713-546-8942, or
investors, Jay Roueche, 713-546-4961, both of Pennzoil-Quaker
State Company
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