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    Giant Industries Reports Record Quarter

    Dumping poor stores coupled with creative marketing made strong contributions to improved profitability, CEO said.

    SCOTTSDALE, Ariz. -- Giant Industries Inc. reported record net earnings of $7.5 million for the third quarter ended Sept. 30, 2003, compared to a net loss of $4.6 million a year ago.

    Net earnings for the petroleum marketer and c-store operator for the first nine months of 2003 were $9.6 million, compared to a net loss of $8.7 million in 2002.

    "Good performance from each of our strategic business units led to record third-quarter earnings," said Fred Holliger, Giant's chairman and CEO.

    The company's refining operations had a strong quarter, as refining margins at Giant's Four Corners refineries increased from $6.04 in third quarter 2002 to $9.51 this year. Refining margins at its Yorktown refinery increased from $1.71 to $4.61 for the same period.

    Refining operating earnings were $23.8 million in the quarter, vs. a break-even level for the same period last year. "These results were realized even though our operations at our Yorktown refinery were scaled back and subsequently shut down for a period of time as Hurricane Isabel passed through the area," Holliger said, commending the refinery's personnel for their efforts in securing and protecting the refinery, which experienced minimal damage.

    In retail operations, store-operating profit from continuing operations increased to $5.1 million in the quarter, vs. $2.1 million the year before. "While a significant improvement in retail fuel margins was a major factor in the improved profitability, our program to divest of non-strategic, poor-performing stores and continuing creative marketing in our stores also made strong contributions to the improved profitability," the executive said.

    The company's Phoenix Fuel Co. Inc., an Arizona wholesale petroleum distributor, continued to grow in both wholesale and cardlock fuel volumes, he noted.

    Giant has approximately 135 corporate and jobber-operated service stations/c-stores in New Mexico, Colorado and Arizona; one crude-oil refinery in Virginia and two in New Mexico; a crude-oil gathering pipeline system based in Farmington, N.M.; finished-products distribution terminals in Albuquerque, N.M. and Flagstaff, Ariz.; and a fleet of crude-oil and finished-product truck transports.

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