HOUSTON, Nov. 1 /PRNewswire/ -- Pennzoil-Quaker State Company (NYSE: PZL)
today announced third quarter recurring income from continuing operations of
$16.7 million, a 5.0 percent increase versus a year ago. On a per share
basis, recurring earnings were 21 cents for the quarter versus 20 cents a year
ago. Including $12.1 million of nonrecurring after-tax charges related
primarily to restructuring costs in the Lubricant and Consumer Products
segments, income from continuing operations was $4.6 million or 6 cents per
share. Revenue in the quarter decreased 3.5 percent versus a year ago to
$596.1 million due to the sale of non-strategic assets. Adjusting for the
$32.4 million of revenues associated with these sold assets, revenues on a
comparable basis increased 1.8 percent.
For the first nine months of 2001, recurring income from continuing
operations was $37.6 million, or 47 cents per share versus 68 cents per share
for the same period last year. Including nonrecurring charges, income from
continuing operations for the first nine months of 2001 was $10.6 million or
13 cents per share. Year-to-date, revenue decreased 4.1 percent to
$1.8 billion, reflecting approximately $100 million of revenues associated
with assets sold.
"Our third quarter results reflect improving performance trends and the
restructuring actions we announced in late June," said Jim Postl, president
and chief executive officer. "Although the tragic events of September 11
added a new level of uncertainty to the economic environment, our operational
redesign should give us the flexibility we need to continue to grow and
prosper."
Lubricants: Recurring operating income for this segment was $38.0 million
in the third quarter versus $42.2 million last year, primarily due to
increased cost of goods sold and lower volumes as a result of soft market
conditions. Third quarter revenue decreased 10.3 percent to $327.3 million,
driven by the sale of non-strategic assets, which accounted for $32.4 million
of revenue in the prior year.
For the first nine months of 2001, revenue and recurring operating income
decreased 10.3 percent and 21.1 percent, respectively, from a year ago, also
reflecting the soft market conditions mentioned above.
Pennzoil(R) and Quaker State(R) are America's number one and number two
selling motor oils with a combined market share of 35.8 percent, which is down
one tenth of a percent below prior year.
Consumer Products: Recurring operating income for the company's Consumer
Products segment improved 15.2 percent to $6.6 million versus $5.8 million in
the third quarter last year. The year-over-year improvement reflects lower
costs in the Automotive Chemicals Division. In June 2001, the Consumer
Products segment announced a consolidation of the current four strategic
business units into one centralized consumer products organization. This
consolidation will result in lower costs and improved effectiveness. Third
quarter revenue increased 7.0 percent year-over-year to $85.0 million. As a
result of a weak first quarter, year-to-date revenues increased only
5.1 percent and recurring operating income decreased 21.1 percent,
respectively, from the same period results a year ago.
International: Pennzoil-Quaker State Company's International segment had
recurring operating income of $5.1 million, compared to $2.3 million earned in
the third quarter of 2000. In 2001, each successive quarter has represented a
meaningful improvement over the preceding quarter. Third quarter revenue
decreased 4.2 percent year-over-year to $63.4 million, primarily due to weaker
volumes in Europe.
For the first nine months of 2001, revenue increased 1.8 percent and
recurring operating income decreased 9.7 percent, respectively, from a year
ago.
Jiffy Lube International: Recurring operating income for Jiffy Lube in
the third quarter was $6.4 million versus $7.9 million last year. The
decrease was primarily due to increased costs, including motor oil costs,
partially offset by improved performance in company stores. Comparable store
sales were up 4.7 percent systemwide in the quarter. Revenues were
$88.2 million, a 1.0 percent increase from the third quarter a year ago.
For the first nine months of 2001, comparable store sales were up
5.8 percent and recurring operating income decreased 5.4 percent from a year
ago. Year-to-date revenues increased 1.3 percent due to higher systemwide
sales.
Supply Chain Investments: Operating income for the Supply Chain
Investments segment, which includes Pennzoil-Quaker State Company's equity
partnership investment in the Excel Paralubes base oil processing facility,
was $15.6 million in the third quarter compared to $11.9 million in 2000.
Total revenue was $92.4 million, a 10.1 percent increase from $83.9 million
for the third quarter of 2000. The increase in operating income and revenue
is due primarily to higher base oil margins and prices, respectively.
For the first nine months of 2001, revenue increased 1.7 percent and
recurring operating income increased 12.7 percent, respectively, from a year
ago.
Pennzoil-Quaker State Company is a leading worldwide automotive consumer
products company, marketing over 1,300 products with 20 leading brands in more
than 90 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.
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
Thursday, November 1. The audio recording will be available for one week
following the live call. To listen to the call or for more information,
please visit the company's website at http://www.pennzoil-quakerstate.com/ .
The following are the unaudited results of operations for the quarter and
nine months ended September 30, 2001 compared with the same periods in 2000.
Three Months Ended Nine Months Ended
September 30 September 30
2001 2000 2001 2000
(Expressed in thousands except per share amounts)
REVENUES
Lubricants $327,296 $365,079 $982,130 $1,094,338
Consumer Products 84,966 79,393 272,318 259,021
International 63,421 66,189 192,832 189,391
Jiffy Lube 88,210 87,317 260,432 257,127
Supply Chain Investments 92,426 83,930 245,147 241,153
Other (1,605) 4,044 (5,209) 5,192
Intersegment sales (58,664) (68,147) (178,564) (202,193)
Total revenues $596,050 $617,805 $1,769,086 $1,844,029
OPERATING INCOME (LOSS)
Lubricants $31,982 $39,722 $95,989 $124,670
Consumer Products 6,086 4,736 9,478 24,757
International 5,144 2,254 (6,667) 11,105
Jiffy Lube 6,416 7,921 15,920 18,797
Supply Chain
Investments (A) 15,588 11,859 34,939 30,996
Other (1,223) 3,582 (1,634) (916)
Total operating income 63,993 70,074 148,025 209,409
Corporate administrative
expenses 16,025 16,707 43,963 80,784
Interest charges, net 22,659 24,334 71,536 69,576
INCOME FROM CONTINUING
OPERATIONS
BEFORE INCOME TAX 25,309 29,033 32,526 59,049
Income tax provision 20,691 21,525 21,949 33,164
INCOME FROM CONTINUING
OPERATIONS 4,618 7,508 10,577 25,885
Loss from Discontinued
Operations (3,782) (1,457) (6,247) (10,728)
NET INCOME $836 $6,051 $4,330 $15,157
BASIC AND DILUTED EARNINGS
(LOSS) PER SHARE
Continuing Operations $0.06 $0.10 $0.13 $0.33
Discontinued Operations (0.05) (0.02) (0.08) (0.13)
TOTAL $0.01 $0.08 $0.05 $0.20
AVERAGE SHARES OUTSTANDING
BASIC 79,365 78,573 79,100 78,395
DILUTED 81,175 79,910 80,184 79,254
END OF PERIOD SHARES
OUTSTANDING 79,449 78,663 79,449 78,663
(A) Operating income for Supply Chain Investments includes partnership
income accounted for using the equity method.
The following reconciles unaudited results of operations to recurring
results for the three months ended September 30, 2001.
Three Months Ended
September 30, 2001
Nonrecurring
Reported Items Recurring
(Expressed in millions except per share amounts)
OPERATING INCOME (LOSS)
Lubricants $32.0 $6.0(A) $38.0
Consumer Products 6.1 0.5(B) 6.6
International 5.1 --- 5.1
Jiffy Lube 6.4 --- 6.4
Supply Chain Investments 15.6 --- 15.6
Other (1.2) --- (1.2)
Total operating income 64.0 6.5 70.5
Corporate administrative expenses 16.1 (0.3)(C) 15.8
Interest charges, net 22.6 --- 22.6
Income from continuing operations
before income tax 25.3 6.8 32.1
Income tax provision (benefit) 20.7 (5.3) 15.4
INCOME FROM CONTINUING OPERATIONS 4.6 12.1 16.7
Loss from Discontinued Operations (3.8) --- (3.8)
NET INCOME $0.8 $12.1 $12.9
BASIC AND DILUTED EARNINGS (LOSS)
PER SHARE
Continuing Operations $0.06 $0.15 $0.21
Discontinued Operations (0.05) --- (0.05)
$0.01 $0.15 $0.16
Explanation of Nonrecurring Items
(A) Lubricants
Restructuring Charges 6.0
(B) Consumer Products
Restructuring Charges 0.5
(C) Corporate
2001 Flood Expenses 0.3
The following reconciles unaudited results of operations to recurring
results for the nine months ended September 30, 2001.
Nine Months Ended
September 30, 2001
Nonrecurring
Reported Items Recurring
(Expressed in millions except per share amounts)
OPERATING INCOME (LOSS)
Lubricants $96.0 $6.0 (A) $102.0
Consumer Products 9.5 12.3 (B) 21.8
International (6.7) 16.7 (C) 10.0
Jiffy Lube 15.9 3.2 (D) 19.1
Supply Chain Investments 34.9 --- 34.9
Other (1.6) --- (1.6)
Total operating income 148.0 38.2 186.2
Corporate administrative expenses 44.0 (0.3)(E) 43.7
Interest charges, net 71.5 --- 71.5
Income from continuing operations
before income tax 32.5 38.5 71.0
Income tax provision 21.9 11.5 33.4
INCOME FROM CONTINUING OPERATIONS 10.6 27.0 37.6
Loss from Discontinued
Operations (6.3) --- (6.3)
NET INCOME $4.3 $27.0 $31.3
BASIC AND DILUTED EARNINGS (LOSS)
PER SHARE
Continuing Operations $0.13 $0.34 $0.47
Discontinued Operations (0.08) --- (0.08)
$0.05 $0.34 $0.39
Explanation of Nonrecurring Items
(A) Lubricants
Restructuring Charges 6.0
(B) Consumer Products
Restructuring Charges 12.3
(C) International
Restructuring Charges 16.7
(D) Jiffy Lube
Impairment 3.2
(E) Corporate
2001 Flood Expenses 0.3
PENNZOIL - QUAKER STATE COMPANY
OPERATING HIGHLIGHTS
(UNAUDITED)
Three Months Ended % Nine Months Ended %
September 30 Change September 30 Change
2001 2000 2001 2000
LUBRICANTS
Recurring revenues
(in thousands) $327,296 $365,079 -10.3% $982,130 $1,094,338 -10.3%
Recurring operating
income
(in thousands) $ 37,949 $ 42,219 -10.1% $101,956 $ 129,284 -21.1%
CONSUMER PRODUCTS
Recurring revenues
(in thousands) $ 84,966 $ 79,393 7.0% $272,318 $ 259,021 5.1%
Recurring operating
income (in
thousands) $ 6,679 $ 5,800 15.2% $ 21,822 $ 27,654 -21.1%
INTERNATIONAL
Recurring revenues
(in thousands) $ 63,421 $ 66,189 -4.2% $192,832 $ 189,391 1.8%
Recurring operating
income (in
thousands) $ 5,130 $ 2,254 127.6% $ 10,030 $ 11,105 -9.7%
JIFFY LUBE
Domestic systemwide
sales (in
thousands) $324,001 $307,393 5.4% $947,000 $ 888,605 6.6%
Same center sales
Jiffy Lube (in
thousands) $317,310 $303,170 4.7% $924,257 $ 873,886 5.8%
Systemwide centers
open 2,147 2,172 -1.2% 2,147 2,172 -1.2%
SUPPLY CHAIN INVESTMENTS
Base oil production
(bbls per day) 10,186 9,763 4.3% 8,880 10,028 -11.4%
Average base oil
margin ($ per bbl) $25.20 $21.42 17.6% $25.22 $19.53 29.1%
SOURCE Pennzoil-Quaker State Company
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http://www.pennzoil-quakerstate.com
Company News On-Call:
http://www.prnewswire.com/comp/684550.html
CONTACT:
media, Ray Scippa, +1-713-546-8942, or
investors, Jay Roueche, +1-713-546-4961, both of Pennzoil-Quaker
State Company
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