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    Giant Industries Posts Record First-Quarter Earnings

    Profits up $2.9 million from same time last year.

    SCOTTSDALE, Ariz. -- Giant Industries Inc.'s net earnings for the first quarter ended March 31 were $4.5 million, compared to net earnings for the first quarter of 2003 of $1.6 million.

    Only two months ago, Giant told Virginia state legislators that it might be forced to shut its Yorktown, Va., refinery if the House of Delegates' tax-reform plan ended sales-tax exemptions.

    "Refining margins at our Four Corners refineries and Yorktown refinery were quite strong for the quarter and have improved so far in the second quarter in spite of continuing high crude oil prices," said Fred Holliger, Giant's CEO. "Our retail operations continued to perform well as same-store fuel volumes and merchandise sales increased in excess of 7 percent over last year's first-quarter levels."

    Holliger added that Giant's retail operations were positively impacted by higher fuel margins while these improvements were partially offset by lower merchandise margins in the first quarter of 2004.

    "In the first quarter of 2004, net cash flow from operations was approximately $52 million. This level was a significant improvement vs. the $33 million of net cash flow from operations in the first quarter of 2003.
    Additionally, our cash position at quarter-end was $70.3 million, up from $27.3 million at year-end 2003," Holliger said.

    Holliger added that as the summer driving season ensues, gasoline demand remains more than 3 percent above last year and inventories are low in comparison to historical levels. He believes these factors should contribute to continued strength in refining margins.

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