Crown lost $6.2 million in 1st quarter But company notes recent improvement

April 24, 1992|By Kim Clark | Kim Clark,Staff Writer

Crown Central Petroleum Corp. has nearly finished its corporate cost-cutting, but the downturn is still causing the company pain, Chairman Henry A. Rosenberg Jr. said yesterday.

The sour economy, repairs to refineries and the lack of severe winter weather all contributed to a $6.2 million loss for the first three months of 1992, the company announced at its annual shareholders meeting.

Company executives said the first three months are typically bad for the oil industry because it is the period in which people travel least. Last year, the company lost $6 million in the same period, even though gasoline sales were up.

Crown sold $322 million worth of petroleum products in 1992's first quarter, more than 13 percent less than in the same period of 1991.

But officials said the company's profit margins have started to improve this spring.

In addition, Mr. Rosenberg said, the company's cost-cutting and restructuring will save $25 million a year.

In the past year, Crown has closed 119 gasoline stations in rural areas and laid off 855 employees. The company also replaced most of its top-level managers and cut its Baltimore-based headquarters staff by about 60 people.

The company now has 298 gasoline stations, mostly in the Southeast, and about 3,900 employees. Mr. Rosenberg said the company probably will shut a few more stations but that the bulk of the closings have been finished.

Mr. Rosenberg noted the financial burdens of federal anti-pollution and worker-safety laws but said there was a financial silver lining for his company.

The expense of repairing underground gasoline tanks and improving refineries to meet the federal Clean Air Act is likely to push some marginal refinery and service station operators out of business, which would reduce the oversupply that is driving prices down, Mr. Rosenberg said.

Mr. Rosenberg said he is excited about the possibility of selling copies of a security system Crown has developed for the 146 all-night convenience stores that are part of its gasoline station network.

Crown has formed a subsidiary, Coronet Security System, to market the program, in which stores are observed through video cameras and someone in a central monitoring facility can watch and talk with each of the stores using speakers hooked to telephone lines.

Company executives seemed to be split, though, over the future of Crown's gasoline stations.

Paul Ebner, vice president for marketing support services, said the company will add a convenience store, a car wash or both to every new station it builds because "margins are so razor-thin we can't make it selling purely gasoline."

Crown often has among the lowest gasoline prices, Mr. Ebner said. This week, the company has 45 stations selling gasoline for less than $1 a gallon, he said.

But Mr. Rosenberg said he doesn't like relying on convenience stores.

"Convenience stores are not the way to proceed," he said. "We've got to do something else to bring people in to buy gasoline."

Crown Central Petroleum

%Three months ended 3/31/92

.. .. .. Revenue.. .. .. .. .. Net.. .. .. .. .. .. .. Share

'92.. .. 322,220,000.. .. .. .. $(6,150,000).. .. .. .. $(0.63)

'91.. .. 372,289,000.. .. .. .. $(5,949,000).. .. .. .. $(0.61)

% change.. .. ..- 13.4.. .. .. .. --.. .. .. .. .. .. --

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