Specialty product manufacturing is customer focused and characterized by precise, high-quality product specifications. Each manufacturer has a unique processing configuration as a result of the product markets it serves and the feedstock available to it.

Specialty products can typically be categorized into the major sectors they serve, which are the industrial sector, the consumer sector, and the automotive sector. Demand for specialty products in the industrial sector, which utilizes specialty products such as hydraulic and compressor oils, process oils, waxes, metalworking fluids and solvents, is generally tied to demand for durable and nondurable manufactured goods and services. Demand for specialty products in the consumer sector, which uses specialty products such as candle blends, chewing gum base, fire logs, cosmetics and fragrances is also generally tied to demand for consumer goods. Demand for specialty products in the automotive sector, which utilizes specialty products such as engine oils, transmission fluids and gear oils, is tied directly to demand in the automotive industry.

Refining is primarily a margin-based business where the majority of feedstocks, including crude oil, and finished petroleum products are commodities. Refiners create value by selling finished petroleum products at prices higher than the cost to acquire and convert crude oil into finished petroleum products.

The fundamental drivers of profitability in the refining industry have improved since the late 1990s, which has resulted in a general widening between the prices for finished petroleum products and the costs of crude oil. For a historical perspective demonstrating the improved margins, the 3/2/1 crack spread averaged $3.04 per barrel between 1990 and 1999, $4.61 per barrel between 2000 and 2004, $6.52 in the first quarter of 2005 and $9.10 in the second quarter of 2005. The Energy Information Association, or EIA, projects demand for petroleum products to outpace capacity growth and to grow at an average of 1.5% per year over the next two decades.

The Princeton refinery currently consists of seven major processing units, 650,000 barrels of storage capacity in 200 storage tanks and related loading and unloading facilities and utilities. The Princeton refinery’s processing capabilities consist of atmospheric and vacuum distillation, hydrotreating, asphalt oxidation processing and clay/acid treating facilities.

The Cotton Valley refinery currently consists of three major processing units that include a crude unit, a hydrotreater and a fractionation train, 625,000 barrels of storage capacity in 74 storage tanks and related loading and unloading facilities and utilities. The Cotton Valley refinery also has a utility fractionator for batch processing of specialty tight distillation range solvents. Since the acquisition, the Company has expanded the refinery’s capabilities by installing a hydrotreater with a hydrogen plant that removes aromatics, increased the crude unit processing capability to 12,000 bpd and reconfigured the refinery’s fractionation train to improve product quality, enhance flexibility and lower utility costs. The Cotton Valley refinery ships finished products throughout the country by both railcar and truck service.

The Shreveport refinery, located on a 240-acre site in Shreveport, Louisiana, has aggregate crude oil throughput capacity of 42,000 bpd and is currently processing paraffinic crude oil and associated feedstocks into fuel products, paraffinic lubricating oil products, waxes and residuals, including asphalt and other by-products. The Shreveport refinery currently consists of 15 major processing units, 3.2 million barrels of storage capacity in 140 storage tanks and related loading and unloading facilities and utilities.

The Shreveport refinery currently makes low sulfur diesel and has the capability to make ultra low sulfur diesel fuel and all of its gasoline production currently meets low sulfur standards. It also has the ability to produce low emission diesel fuel for sale in Texas.

The Company owns and operates a terminal in Burnham, Illinois. The Burnham terminal receives specialty products exclusively from each of the Company’s refineries on a daily basis and distributes them by truck to its customers in the Upper Midwest and East Coast regions of the United States and in Canada.

Gross profit increased $29.3 million, or 140.0%, to $50.2 million for the six months ended June 30, 2005 from $20.9 million for the six months ended June 30, 2004.

Selling, general and administrative expenses increased $2.3 million, or 37.1%, to $8.4 million in the six months ended June 30, 2005 from $6.2 million in the six months ended June 30, 2004.

Transportation expenses increased $2.5 million, or 15.4%, to $19.0 million in the six months ended June 30, 2005 from $16.5 million in the six months ended June 30, 2004.

Interest expense increased $4.8 million, or 107.9%, to $9.2 million in the six months ended June 30, 2005 from $4.4 million in the six months ended June 30, 2004.