Penn Octane Corp. Announces Results for the Quarter Ended March 31, 2006
Monday May 22, 7:12 pm ET
Company Reports Net Loss of 2 Cents Per Share
PALM DESERT, Calif.--(BUSINESS WIRE)--May 22, 2006--Penn Octane Corp. (the "Company") (NASDAQ:POCC - News), a provider of liquefied petroleum gas ("LPG") for distribution to northeastern Mexico and a reseller of gasoline and diesel fuel ("Fuel Sales Business"), announced today its financial results for the quarter ended March 31, 2006. The Company reported a net loss of ($283,078) or ($0.02) per share. During the quarter ended March 31, 2005, the Company reported net income of $196,412 or $0.01 per share. Excluding earnings (losses) allocable to minority interest in earnings (loss) of Rio Vista Energy Partners L.P. ("Rio Vista") for the quarter ended March 31, 2006, and March 31, 2005, net loss was ($529,406) and net income was $365,457, respectively. The following summarizes the gross profit among the Company's LPG and Fuel Sales Business for the three months ended March 31, 2005 and 2006. All amounts are in thousands.
For the three months ended March 31, 2005
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LPG Fuel Sales Total
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Revenues $30,970 $28,757 $59,727
Cost of goods sold 29,381 27,957 57,338
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Gross profit (loss) $1,589 $800 $2,389
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For the three months ended March 31, 2006
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LPG Fuel Sales Total
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Revenues $39,237 $30,091 $69,328
Cost of goods sold 38,495 29,565 68,060
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Gross profit $742 $526 $1,268
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The following discussion of revenues compares the results of operations for the quarter ended March 31, 2006, to the quarter ended March 31, 2005.
Revenues for the three months ended March 31, 2006, were $69.3 million compared with $59.7 million for the three months ended March 31, 2005, an increase of $9.6 million or 16.1%. Of this increase, $4.7 million was attributable to increases in average sales prices of LPG sold to PMI during the three months ended March 31, 2006, $6.1 million was attributable to increased volumes of LPG sold to PMI during the three months ended March 31, 2006, and $8.4 million was attributable to increases in average sales prices of Fuel Products sold during the three months ended March 31, 2006, partially offset by $2.6 million attributable to decreased volumes of LPG sold to customers other than PMI during the three months ended March 31, 2006, and $7.1 million attributable to decreased volumes of Fuel Products sold during the three months ended March 31, 2006.
The following table shows the Company's volume sold in gallons and average sales price for LPG for the three months ended March 31, 2005 and 2006:
Three months Three months
ended March 31, ended March 31,
2005 2006
---------------- ----------------
Volume Sold
LPG (millions of gallons) - PMI 32.3 38.3
LPG (millions of gallons) - Other 3.6 -
---------------- ----------------
35.9 38.3
Average sales price
LPG (per gallon) - PMI $0.88 $1.02
LPG (per gallon) - Other 0.72 -
The following table shows the Company's volume sold and delivered in gallons and average sales price for Fuel Products for the three months ended March 31, 2005 and 2006:
Three months Three months
ended March 31, ended March 31,
2005 2006
---------------- ----------------
Volume Sold
Fuel Products (millions of gallons) 18.8 15.2
Average sales price
Fuel Products (per gallon) $1.53 $1.98
About Penn Octane Corp.
Until the transfer of its physical assets to Rio Vista in September 2004, Penn Octane was a supplier of liquefied petroleum gas (LPG) to northeastern Mexico. Since September 2004, Penn Octane has supplied Rio Vista with all of the LPG which Rio Vista supplies to northeastern Mexico. Unless the proposed sale of LPG assets to TransMontaigne is completed as proposed, Penn Octane intends to continue to lease the 132-mile, six-inch Seadrift pipeline which connects a gas plant in Kleberg County, Texas, to Rio Vista's terminal facility in Brownsville, Texas, and intends to continue to supply Rio Vista with LPG. Penn Octane began operations of its gasoline and diesel fuel reseller business in June 2004. By allocating portions of certain pipeline and terminal space located in California, Arizona, Nevada and Texas to Penn Octane, Penn Octane is able to sell gasoline and diesel fuel at rack loading terminals and through bulk and transactional exchanges.
Forward-Looking Statements
Certain of the statements in this news release are forward-looking statements, including statements regarding the completion of the proposed sale of LPG assets to TransMontaigne and prospects for the LPG business and gasoline and diesel fuel reseller business. Although these statements reflect Penn Octane's beliefs, they are subject to uncertainties and risks that could cause actual results to differ materially from expectations. The proposed LPG asset sale may not be completed, or may be completed on different terms, if any of the conditions to closing (including satisfactory completion of TransMontaigne's due diligence review) are not satisfied or if various governmental and third-party approvals are not obtained. If Penn Octane is not able to obtain adequate financing or to continue to generate sales of its products at profitable levels, Penn Octane would suffer material adverse consequences to its LPG and/or fuel reseller business. Additional information regarding risks affecting Penn Octane's business may be found in Penn Octane's most recent reports on Form 8-K, Form 10-Q and Form 10-K and Rio Vista's most recent reports on Form 8-K, Form 10-Q, Form 10-K and Form 10 filed with the Securities and Exchange Commission.
Contact:
Penn Octane Corp.
Charles C. Handly or Ian T. Bothwell, 760-772-9080
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Source: Penn Octane Corp.
AI
