Crown petroleum reports profit for April and May

After string of quarters with earnings losses, company nets $8 million

Oil industry

June 23, 2000|By Kristine Henry | Kristine Henry,SUN STAFF

After six quarters in a row of losses, Crown Central Petroleum Corp. netted $8 million in April and May alone, according to documents filed with the Securities and Exchange Commission yesterday.

The filing came as Crown gears up for a meeting where shareholders will likely vote on whether Crown should be acquired by Rosemore Inc., a holding company owned by the same family that runs Crown and owns a majority of its shares. A meeting date has not been set.

"The (earnings) information was put out to provide stockholders with full access to current information," said Crown spokesman J. Steven Wise.

"This is information they would not have had until the end of the quarter normally," he said.

The pending Rosemore deal has already brought Crown one shareholder lawsuit, which was subsequently dropped, and failing to disclose the change in fortunes may have left it more vulnerable to additional lawsuits.

Crown lost $3.6 million in the first three months of the year on revenue of $421.5 million. For the first five months of the year it had a net income of $4.4 million; for the first five months of 1999, Crown lost $16 million.

Crown, whose two refineries are located in Texas, benefited from an improvement in the Gulf Coast crack spread - the difference between what oil costs and what the refined product brings in. The spread went from $2.25 a barrel for the first five months of 1999 to $4.79 a barrel for the same period this year. Wise said low gasoline inventories largely drove the increase.

Crown's board accepted a $9.50-per-share takeover offer from Rosemore in April. But before shareholders could vote on the deal, St. Louis-based Apex Oil Co. Inc., which had for months tried to acquire Crown, offered $10 per share.

Wise said Crown's independent directors "believe the merger is still in the best interests of shareholders and recommend approving the merger with Rosemore."

Nevertheless, he said, Crown's board is still considering the Apex offer.

According to another SEC filing submitted yesterday, representatives of Apex will meet with officials at Credit Suisse First Boston, which has been retained by Crown, on July 14.

Crown's chairman, chief executive and president, Henry A. Rosenberg Jr., is chairman of Rosemore. His son, Edward Rosenberg, is Rosemore's chief executive.

Rosemore owns 11 percent of Crown's Class B stock and 49 percent of the Class A stock, which has 10 times the voting power of the Class B shares. Apex holds about 15 percent of Crown's Class A shares and 3.5 percent of the B shares.

Crown's B shares closed up 12.5 cents yesterday at $9.25.

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