-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UyMl3bBHNmQITptK90D9Jl0b9C0M2ivesNA2qRsEoCUiq3Yxc5JjSLcZetmwoL1V PxnmGlCT0eUDT+VeuA+huQ== 0000950134-03-009139.txt : 20030612 0000950134-03-009139.hdr.sgml : 20030612 20030612171536 ACCESSION NUMBER: 0000950134-03-009139 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030612 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030612 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOLLY CORP CENTRAL INDEX KEY: 0000048039 STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911] IRS NUMBER: 751056913 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03876 FILM NUMBER: 03742567 BUSINESS ADDRESS: STREET 1: 100 CRESCENT COURT STREET 2: SUITE 1600 CITY: DALLAS STATE: TX ZIP: 75201 BUSINESS PHONE: 2148713555 MAIL ADDRESS: STREET 1: 100 CRESCENT COURT STREET 2: SUITE 1600 CITY: DALLAS STATE: TX ZIP: 75201 FORMER COMPANY: FORMER CONFORMED NAME: GENERAL APPLIANCE CORP DATE OF NAME CHANGE: 19680508 8-K 1 d06758e8vk.txt FORM 8-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JUNE 12, 2003 ---------- HOLLY CORPORATION (Exact name of Registrant as specified in its charter) DELAWARE 001-03876 75-1056913 (State or other (Commission File Number) (I.R.S. Employer jurisdiction of incorporation) Identification Number) 100 CRESCENT COURT, 75201-6927 SUITE 1600 (Zip code) DALLAS, TEXAS (Address of principal executive offices) Registrant's telephone number, including area code: (214) 871-3555 NOT APPLICABLE (Former name or former address, if changed since last report) ================================================================================ ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) EXHIBITS. 99.1 -- Press Release of the Company issued June 12, 2003.* ITEM 9. REGULATION FD DISCLOSURE. The following information is furnished pursuant to Item 9, "Regulation FD Disclosure" and Item 12, "Disclosure of Results of Operations and Financial Condition." On June 12, 2003, Holly Corporation (the "Company") issued a press release announcing the Company's earnings for the third quarter of fiscal year 2003. A copy of the Company's press release is attached hereto as Exhibit 99.1 and incorporated herein in its entirety. - ---------- * Filed herewith. -2- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HOLLY CORPORATION By: /s/ Stephen J. McDonnell --------------------------------------------- Stephen J. McDonnell Vice President and Chief Financial Officer Date: June 12, 2003 -3- EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT TITLE ------- ------------- 99.1 -- Press Release of the Company issued June 12, 2003.
-4- EX-99.1 3 d06758exv99w1.txt PRESS RELEASE EXHIBIT 99.1 HOLLY CORPORATION REPORTS THIRD QUARTER OF FISCAL 2003 RESULTS Dallas, Texas, June 12, 2003 -- Holly Corporation (AMEX-HOC), today reported results for the Company's third quarter and nine months ended April 30, 2003. Net income for the three months ended April 30, 2003 was $26.7 million ($1.67 per diluted share) compared to net income of $6.2 million ($.39 per diluted share) for the three months ended April 30, 2002. For the nine months ended April 30, 2003, net income was $30.4 million ($1.90 per diluted share) compared to $25.9 million ($1.62 per diluted share) for the nine months ended April 30, 2002. During the fiscal 2003 third quarter, the Company's income benefited from a $16.4 million gain ($10.2 million after tax) from the sale of pipeline assets to Plains Marketing, L.P., the $15.2 million ($9.4 million after tax) received from Kinder Morgan Energy Partners, L.P. as payment for reparations ordered by the Federal Energy Regulatory Commission, and strong refining margins that improved substantially from the first six months of the current fiscal year and compared very favorably to margins for the three months ended April 30, 2002. Excluding the pipeline sale and reparations payment, net income for the three and nine months ended April 30, 2003 would have been $7.1 million ($.44 per diluted share) and $10.7 million ($.67 per diluted share), respectively. For the Company's third quarter ended April 30, 2003, refining margins of $8.86 per barrel were significantly higher than the refinery margins of $6.40 per barrel for the quarter ended April 30, 2002. Refining margins rose to high levels during much of the current year's third quarter as refined product prices rose at a greater rate than crude oil costs, but the high margins fell off late in the quarter as refined product prices declined at a greater rate than crude oil costs. For the nine months ended April 30, 2003, refining margins of $6.37 per barrel were less than the refinery margins of $7.13 per barrel for the nine months ended April 30, 2002. The relative strength of the prior year's nine-month margins was principally the result of strong margins in the fiscal 2002 first quarter, when the Company, along with the refining industry as a whole, was still experiencing very favorable refining margins, which fell off significantly after the prior year's first fiscal quarter. As mentioned above, the current year's third quarter had two significant nonrecurring events that contributed substantially to earnings. As previously announced, the Company in March 2003 sold its Iatan crude oil gathering system located in west Texas to Plains Marketing, L.P., resulting in a gain of $16.4 million. Additionally, in April 2003 the Company received from Kinder Morgan Energy Partners, L.P. a payment of $15.2 million for reparations ordered by the Federal Energy Regulatory Commission relating to tariffs on common carrier pipeline shipments of refined products from 1993 to July 2000. The Company's revenues and cost of products sold were higher in the third quarter and nine months of fiscal 2003, as compared to the comparable periods in fiscal 2002, due principally to higher refined product sales prices and higher costs of purchased crude oil. Additionally, refined product sales volumes increased for the three-month and nine-month periods by 5% and 10%, respectively, as compared to the same periods of fiscal 2002. Negatively impacting earnings for the both the three and nine months ended April 30, 2003, as compared to the prior year periods, were increases in operating expenses, due to higher utility costs, higher environmental costs, and increased compensation expense, and losses at our asphalt joint venture, compared to substantial income of the asphalt joint venture for the fiscal 2002 three- and nine-month periods. "The Company experienced a very good third quarter as refining margins rebounded nicely and the pipeline sale and FERC-ordered reparations payment contributed to earnings. Excluding the two non-recurring items, we generated over $20 million of earnings before interest, taxes and depreciation for the fiscal 2003 third quarter," said Matthew P. Clifton, President of Holly. "As recently announced, the acquisition of the Woods Cross refinery near Salt Lake City from ConocoPhillips closed effective June 1, 2003. We are very excited about adding the Woods Cross operations to the Company, which acquisition increased our total current refining capacity by approximately 35%. Additionally, the Company is continuing to work diligently in the construction of a gas oil hydrotreating unit at its Artesia, New Mexico refinery facility which is designed to satisfy future EPA mandated gasoline specifications and to improve the refinery's yields of higher value products. The expansion of our New Mexico facility that will result in a further increase of approximately 15% in Holly's overall refining capacity is expected to be completed along with the hydrotreating unit by the end of calendar 2003. In addition to our on-going steps to move forward and strengthen the Company, we are continuing to plan for the proposed merger with Frontier Oil Corporation, which is expected to be submitted in the next few weeks to the stockholders of both companies for their approval." Holly, headquartered in Dallas, Texas, operates a 60,000 bpd refinery located in Artesia, New Mexico that is being expanded to 75,000 bpd, a 25,000 bpd refinery in Woods Cross, Utah, and a 7,500 bpd refinery in Great Falls, Montana. Holly also has approximately 2,000 miles of crude oil and refined product pipelines in the west Texas and New Mexico region, Permian Basin crude gathering operations and refined product terminals. The following is a "safe harbor" statement under the Private Securities Litigation Reform Act of 1995: The statements in this press release relating to matters that are not historical facts are forward-looking statements based on management's belief and assumptions using currently available information and expectations as of the date hereof, are not guarantees of future performance and involve certain risks and uncertainties. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, the Company cannot give any assurances that these expectations will prove to be correct. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements. Such differences could be caused by a number of factors including, but not limited to, risks and uncertainties with respect to the actions of actual or potential competitive suppliers of refined petroleum products in the Company's markets, the demand for and supply of crude oil and refined products, the spread between market prices for refined products and market prices for crude oil, the possibility of constraints on the transportation of refined products, the possibility of inefficiencies or shutdowns in refinery operations or pipelines, effects of governmental regulations and policies, the availability and cost of financing to the Company, the effectiveness of the Company's capital investments and marketing strategies, the Company's efficiency in carrying out construction projects, the successful integration of the Woods Cross refinery, the completion of the proposed transaction with Frontier Oil Corporation, the possibility of terrorist attacks and the consequences of any such attacks, general economic conditions, and other financial, operational and legal risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission filings. The Company assumes no duty to publicly update or revise such statements, whether as a result of new information, future events or otherwise. Frontier Oil Corporation (NYSE - FTO) and Holly Corporation have filed a preliminary joint proxy statement/prospectus and other documents regarding the proposed Frontier/Holly merger transaction with the Securities and Exchange Commission as part of a Registration Statement on Form S-4 filed by Front Range Himalaya Corporation. Investors and security holders are urged to read the preliminary joint proxy statement/prospectus included in such Registration Statement because it contains important information about Frontier and Holly and the proposed transaction. A definitive joint proxy statement/prospectus is expected to be sent to security holders of Frontier and Holly seeking their approval of the transaction. Investors and security holders may obtain a free copy of the definitive joint proxy statement/prospectus (when available) and other documents filed by Frontier and Holly with the SEC at the SEC's web site at www.sec.gov. The definitive joint proxy statement/prospectus and other relevant documents may also be obtained free of cost by directing a request to Frontier Oil Corporation, attention: Doug Aron, 10000 Memorial Drive, Suite 600, Houston, Texas 77024 or Holly Corp., attention: W. John Glancy, 100 Crescent Court, Suite 1600, Dallas, Texas 75201. Frontier and Holly and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Frontier and Holly in connection with the merger. Information about Frontier and Holly and their respective directors and officers can be found in Proxy Statements, Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filed by Frontier and Holly with the SEC. Additional information regarding the interests of those persons may be obtained by reading the preliminary joint proxy statement/prospectus and the definitive joint proxy statement/prospectus when it becomes available. RESULTS OF OPERATIONS STATEMENT OF INCOME (Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED APRIL 30, APRIL 30, ------------------------------ ------------------------------ 2003 2002 2003 2002 ------------- ------------- ------------- ------------- (In thousands, except per share data) Sales and other revenues ......................... $ 312,180 $ 210,327 $ 858,198 $ 635,028 Operating costs and expenses Cost of products sold .......................... 255,376 165,350 719,764 491,356 Operating expenses ............................. 28,439 23,717 78,768 71,729 Selling, general and administrative expenses ... 7,057 5,452 17,597 16,110 Depreciation, depletion and amortization ....... 8,979 6,884 23,336 20,029 Exploration expenses, including dry holes ...... 233 282 711 824 ------------- ------------- ------------- ------------- Total operating costs and expenses ........... 300,084 201,685 840,176 600,048 ------------- ------------- ------------- ------------- Income from operations ........................... 12,096 8,642 18,022 34,980 Other income (expense) Equity in earnings of joint ventures ........... (690) 1,571 (86) 6,639 Interest expense, net .......................... 37 (405) (575) (1,056) Gain on sale of assets ......................... 16,447 -- 16,447 -- Reparations payment received ................... 15,226 -- 15,226 -- Gain on sale of equity securities .............. -- -- -- 1,522 ------------- ------------- ------------- ------------- 31,020 1,166 31,012 7,105 ------------- ------------- ------------- ------------- Income before income taxes ....................... 43,116 9,808 49,034 42,085 Income tax provision ............................. 16,415 3,609 18,682 16,149 ------------- ------------- ------------- ------------- Net income ....................................... $ 26,701 $ 6,199 $ 30,352 $ 25,936 ============= ============= ============= ============= Net income per common share - basic .............. $ 1.72 $ 0.40 $ 1.96 $ 1.67 Net income per common share - diluted ............ $ 1.67 $ 0.39 $ 1.90 $ 1.62 Average number of common shares outstanding: Basic .......................................... 15,493 15,581 15,509 15,549 Diluted ........................................ 15,986 16,016 15,938 15,981
BALANCE SHEET DATA (Unaudited)
April 30, July 31, 2003 2002 ------------ ------------ (In thousands, except ratio data) Cash and cash equivalents .............................. $ 38,050 $ 71,630 Working capital ........................................ $ 27,460 $ 59,873 Total assets ........................................... $ 541,899 $ 502,306 Total long-term debt, including current maturities ..... $ 25,714 $ 34,285 Stockholders' equity ................................... $ 252,282 $ 228,556 Total debt to capitalization ratio(1) .................. 9.2% 13.0%
1) The total long-term debt to capitalization ratio is calculated by dividing total long-term debt including current maturities by the sum of total long-term debt including current maturities and stockholders' equity. OTHER FINANCIAL DATA (Unaudited)
Three Months Ended Nine Months Ended April 30, April 30, ------------------------------ ------------------------------ 2003 2002 2003 2002 ------------- ------------- ------------- ------------- (In thousands) (In thousands) Sales and other revenues (2) Refining .................................. $ 307,715 $ 205,692 $ 842,926 $ 620,367 Pipeline Transportation ................... 3,742 4,294 13,742 13,395 Corporate and Other ....................... 723 341 1,530 1,266 ------------- ------------- ------------- ------------- Consolidated .............................. $ 312,180 $ 210,327 $ 858,198 $ 635,028 ============= ============= ============= ============= Income (loss) from operations (2) Refining .................................. $ 14,446 $ 8,409 $ 19,933 $ 34,146 Pipeline Transportation ................... 1,470 2,593 7,296 7,579 Corporate and Other ....................... (3,820) (2,360) (9,207) (6,745) ------------- ------------- ------------- ------------- Consolidated .............................. $ 12,096 $ 8,642 $ 18,022 $ 34,980 ============= ============= ============= ============= Cash flow from operating activities ......... $ 18,406 $ 17,677 $ 7,862 $ 11,205 Capital expenditures ........................ $ 19,922 $ 8,133 $ 47,556 $ 20,816 EBITDA (3) .................................. $ 52,058 $ 17,097 $ 72,945 $ 63,170
2) The Refining segment includes the Company's principal refinery in Artesia, New Mexico, which is operated in conjunction with refining facilities in Lovington, New Mexico (collectively, the Navajo Refinery) and the Company's refinery near Great Falls, Montana. Included in the Refining segment are costs relating to pipelines and terminals that operate in conjunction with the Refining segment as part of the supply and distribution networks of the refineries. The Pipeline Transportation segment includes approximately 1,000 miles (approximately 600 miles after the sale of pipelines to Plains Marketing, L.P.) of the Company's pipeline assets in Texas and New Mexico. Revenues of the Pipeline Transportation segment are earned through transactions with unaffiliated parties for pipeline transportation, rental and terminalling operations. 3) Earnings Before Interest, Taxes, Depreciation and Amortization - EBITDA is calculated as net income plus (i) interest expense net of interest income, (ii) income tax provision, and (iii) depreciation, depletion, and amortization. EBITDA is presented, not as an alternative measure of operating results or cash flow from operations as determined in accordance with accounting principles generally accepted in the United States, but because EBITDA is a widely accepted financial indicator of a company's ability to incur and service debt. EBITDA presented above is reconciled to net income as follows:
Three Months Ended Nine Months Ended April 30, April 30, ------------------------------ ------------------------------ 2003 2002 2003 2002 ------------- ------------- ------------- ------------- (In thousands) (In thousands) Net Income ............................. $ 26,701 $ 6,199 $ 30,352 $ 25,936 Add provision for income tax ........ 16,415 3,609 18,682 16,149 Add interest expense ................ 135 622 1,224 2,320 Subtract interest income ............ (172) (217) (649) (1,264) Add depreciation and amortization ... 8,979 6,884 23,336 20,029 ------------- ------------- ------------- ------------- EBITDA ................................. $ 52,058 $ 17,097 $ 72,945 $ 63,170 ============= ============= ============= =============
REFINING SEGMENT OPERATING DATA (Unaudited)
Three Months Ended Nine Months Ended April 30, April 30, ------------------------------ ------------------------------ 2003 2002 2003 2002 ------------- ------------- ------------- ------------- Crude charge (BPD)(4) .................. 60,500 63,000 63,400 58,000 Sales of refined products (BPD)(5) ..... 80,700 76,600 81,700 74,500 Operating margin per produced barrel: Average per produced barrel(6) Average net sales price .............. $ 41.94 $ 30.04 $ 37.25 $ 30.36 Raw material costs ................... 33.08 23.64 30.88 23.23 ------------- ------------- ------------- ------------- Refinery margin ...................... $ 8.86 $ 6.40 $ 6.37 $ 7.13 ============= ============= ============= ============= Sales of produced refined products Gasolines ............................ 58.3% 58.2% 57.6% 56.3% Diesel fuels ......................... 21.9% 21.4% 21.6% 21.2% Jet fuels ............................ 9.3% 10.2% 9.9% 10.5% Asphalt .............................. 6.8% 6.1% 7.3% 8.3% LPG and other ........................ 3.7% 4.1% 3.6% 3.7% ------------- ------------- ------------- ------------- Total .............................. 100.0% 100.0% 100.0% 100.0% ============= ============= ============= =============
4) Barrels per day of crude oil processed. 5) Includes refined products purchased for resale of 14,337 bpd, 6,892 bpd, 12,238 bpd, and 10,032 bpd, respectively. 6) Represents average per barrel amounts for produced refined products sold. FOR FURTHER INFORMATION, Contact: Matthew P. Clifton, President Stephen J. McDonnell, Vice President and Chief Financial Officer Holly Corporation 214/871-3555 -----END PRIVACY-ENHANCED MESSAGE-----