Last Winter's bitter cold produced record sales and profits for Pargas, Inc., the Waldorf-based distributor of propane.
Despite a costly fight to thwart a takeover bid, the firm's net income rose by 45 per cent in 1976 to $6.8 million on a 17 per cent increase in revenues, to $128 million. Had Pargas not incurred nearly $865,000 in legal expenses resisting Empire Gas Corporation's attempts to seize control, earnings per share would have been even higher than the $1.95 reported (versus $1.30 in 1975).
The first quarter of 1977 followed the trend, as chairman William C. Hill informed stockholders at yesterday's annual meeting that net income was up 50 per cent, to $3.4 million, over the same period last year, on revenues amounting to $46 million, a gain of 26 per cent. Earnings per share were 95 cents, compared to 63 cents in 1976. A quarterly dividend of 25 cents was declared, payable to stockholders of record May 13.
Anticipating continued demand for more propane, or liquid petroleum gas, Hill said Pargas was currently negotiating with an unidentified Middle Eastern country to buy additional stocks. It is also seeking to acquire a Gulf Coast terminal, he said.
He also said the big change in Pargas, balance sheet has been the turn-around of its coal mining operations from a substantial loser in 1975 to a potential profit maker in 1977. Pargas currently operated two deep mines and four strip mines; one and possibly two new deep mines will be opened this year. Production is at its peak.
The reversal came about as the result of Pargas' purchase last year of a coal "washer" which permits processing of coal meeting Environmental Protection Agency standards, Hill said. Pargas renegotiated its contracts with utilities in Ohio and Georgia to provide coal on a contract basis, rather than at spot market prices which had proved unprofitable in the past. The company also purchased new railroad cars to handle the increased volume, he said.
Pargas, with assets of $125 million, distributes propane in 11 states and the District of Columbia. Its market includes the East and West Coasts plus states in Appalachia and the Midwest.