CORE-MARK HOLDING COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
September 30, December 31,
2009 2008
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Assets
Current assets:
Cash and cash equivalents $ 21.3 $ 15.7
Restricted cash 14.4 11.4
Accounts receivable, net of allowance for
doubtful accounts of $9.3 and $8.8
million, respectively 165.0 146.9
Other receivables, net 41.7 34.1
Inventories, net 221.4 238.4
Deposits and prepayments 32.2 26.5
Deferred income taxes 10.5 12.2
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Total current assets 506.5 485.2
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Property and equipment, net 80.1 74.2
Deferred income taxes 9.0 12.1
Goodwill 3.7 3.7
Other non-current assets, net 34.3 37.4
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Total assets $ 633.6 $ 612.6
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 72.6 $ 66.0
Book overdrafts 13.9 17.8
Cigarette and tobacco taxes payable 104.7 103.2
Accrued liabilities 64.1 58.1
Income taxes payable 0.3 -
Deferred income taxes 1.8 1.6
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Total current liabilities 257.4 246.7
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Long-term debt, net 0.8 30.8
Other long-term liabilities 7.8 11.1
Claims liabilities, net of current portion 32.1 31.3
Pension liabilities 19.5 19.1
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Total liabilities 317.6 339.0
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Stockholders' equity:
Common stock; $0.01 par value (50,000,000
shares authorized; 10,923,871 and
10,746,416 shares issued; and 10,428,509
and 10,349,700 shares outstanding at
September 30, 2009 and December 31, 2008,
respectively) 0.1 0.1
Additional paid-in capital 213.7 209.3
Treasury stock at cost, 495,362 and 396,716
shares of common stock at September 30,
2009 and December 31, 2008, respectively (13.2) (11.0)
Retained earnings 121.1 82.3
Accumulated other comprehensive loss (5.7) (7.1)
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Total stockholders' equity 316.0 273.6
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Total liabilities and stockholders'
equity $ 633.6 $ 612.6
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CORE-MARK HOLDING COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
--------- --------- --------- ---------
Net sales $ 1,776.1 $ 1,672.7 $ 4,879.7 $ 4,552.7
Cost of goods sold 1,674.2 1,578.8 4,572.2 4,286.5
--------- --------- --------- ---------
Gross profit 101.9 93.9 307.5 266.2
--------- --------- --------- ---------
Warehousing and distribution
expenses 51.1 54.3 146.3 151.2
Selling, general and
administrative expenses 34.2 30.5 103.3 95.5
Amortization of intangible
assets 0.5 0.5 1.6 1.5
--------- --------- --------- ---------
Total operating expenses 85.8 85.3 251.2 248.2
--------- --------- --------- ---------
Income from operations 16.1 8.6 56.3 18.0
Interest expense 0.4 0.7 1.3 1.6
Interest income - (0.2) (0.2) (0.9)
Foreign currency transaction
(gains) losses, net (0.4) 1.5 (2.0) 2.6
--------- --------- --------- ---------
Income before income taxes 16.1 6.6 57.2 14.7
Provision for income taxes 4.8 1.3 18.4 4.2
--------- --------- --------- ---------
Net income $ 11.3 $ 5.3 $ 38.8 $ 10.5
========= ========= ========= =========
Basic income per common share $ 1.08 $ 0.51 $ 3.71 $ 1.00
========= ========= ========= =========
Diluted income per common share $ 1.02 $ 0.49 $ 3.59 $ 0.95
========= ========= ========= =========
Basic weighted average shares 10.5 10.4 10.5 10.5
Diluted weighted average shares 11.0 10.9 10.8 11.0
Note (1): Basic and diluted earnings per share are calculated based on
unrounded actual amounts.
CORE-MARK HOLDING COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Nine Months
Ended
September 30,
2009 2008
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Cash flows from operating activities:
Net income $ 38.8 $ 10.5
Adjustments to reconcile net income to net cash
provided by operating activities:
LIFO and inventory provisions 5.3 10.8
Amortization of debt issuance costs 0.4 0.4
Amortization of stock-based compensation expense 3.8 2.8
Bad debt expense, net 1.4 1.1
Depreciation and amortization 13.6 12.9
Foreign currency transaction (gains) losses, net (2.0) 2.6
Deferred income taxes 4.9 -
Changes in operating assets and liabilities:
Accounts receivable (17.8) (16.4)
Other receivables (6.7) (2.6)
Inventories 16.6 (28.5)
Deposits, prepayments and other non-current assets (6.1) (5.9)
Accounts payable 5.2 24.4
Cigarette and tobacco taxes payable (3.3) 7.8
Pension, claims and other accrued liabilities 1.8 3.2
Income taxes payable 0.1 0.1
Net cash provided by operating activities 56.0 23.2
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Cash flows from investing activities:
Restricted cash (1.5) (1.6)
Acquisition of business, net of cash acquired - (26.4)
Additions to property and equipment, net (13.5) (13.9)
Capitalization of software (0.3) (0.7)
Net cash used in investing activities (15.3) (42.6)
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Cash flows from financing activities:
(Repayments) borrowings under revolving credit
facility, net (30.0) 27.8
Repurchases of common stock shares (treasury stock) (2.2) (11.0)
Proceeds from exercise of common stock options 1.0 2.5
Tax withholdings related to net share settlements of
restricted stock units (0.3) -
Excess tax deductions associated with stock-based
compensation 0.2 0.6
Decrease in book overdrafts (4.0) (6.8)
Net cash (used in) provided by financing
activities (35.3) 13.1
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Effects of changes in foreign exchange rates 0.2 (1.1)
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Increase (decrease) in cash and cash equivalents 5.6 (7.4)
Cash and cash equivalents, beginning of period 15.7 21.3
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Cash and cash equivalents, end of period $ 21.3 $ 13.9
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Supplemental disclosures:
Cash paid during the period for:
Income taxes, net of refunds $ 11.5 $ 5.8
Interest $ 0.8 $ 1.1
CORE-MARK HOLDING COMPANY, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP DILUTED EPS
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
------------------------- -------------------------
% %
Increase/ Increase/
2009(a) 2008(a) (Decrease) 2009(a) 2008(a) (Decrease)
------- ------- ------- ------- ------- -------
Net Income 11.3 5.3 113.2% 38.8 10.5 269.5%
======= ======= ======= ======= ======= =======
Diluted shares 11.0 10.9 10.8 11.0
------- ------- ------- ------- ------- -------
GAAP Diluted EPS $ 1.02 $ 0.49 $ 3.59 $ 0.95
LIFO expense 0.01 0.33 0.30 0.59
Cigarette
inventory holding
losses (profits)(1) 0.01 (0.01) (1.97) (0.08)
Net federal floor
stock tax(2) - - 0.65 -
Foreign exchange
(gains) losses (0.02) 0.08 (0.11) 0.14
Tax items(3) (0.13) (0.13) (0.39) (0.16)
Non-GAAP Diluted
EPS(4) $ 0.89 $ 0.76 17.7% $ 2.07 $ 1.44 43.8%
------- ------- ------- ------- ------- -------
(1) Cigarette inventory holding losses/profits
Cigarette holding losses/profits for the three months ended
September 30, 2009 were a loss of $0.1 million compared to a profit of
$0.2 million for the same period in 2008. For the nine months ended
September 30, 2009 cigarette holding profits were $35.1 million compared to
$1.5 million for the same period in 2008. The increase in cigarette
inventory holding profits for the nine months ended September 30, 2009 is
due primarily to increases in cigarette prices by manufacturers in response
to the increase in federal excise taxes mandated by the State Children's
Health Insurance Program (SCHIP) legislation.
(2) Net federal floor stock tax
The net Federal floor stock tax which was imposed as part of the SCHIP
legislation for the nine months ended September 30, 2009 was $11.5 million.
(3) Tax items
Included in the provision for income taxes for the three months ended
September 30, 2009 is a net benefit of $1.4 million compared to a net
benefit of $1.3 million for the three months ended September 30, 2008. The
net benefits relate primarily to the expiration of the statute of
limitations for uncertain tax positions, adjustments of prior year's
estimates and state tax credits claimed for prior years.
Included in the provision for income taxes for the nine months ended
September 30, 2009 is a net benefit of $4.1 million, inclusive of a net
interest recovery of $1.2 million related to unrecognized tax benefits,
compared to a net benefit of $1.7 million, inclusive of net interest
expense of $0.1 million, for the nine months ended September 30, 2008.
The net benefits relate primarily to the expiration of the statute of
limitations for uncertain tax positions, adjustments of prior year's
estimates and state tax credits claimed for prior years.
(4) Non-GAAP Diluted EPS
The diluted earnings per share impacts of the above items were calculated
using a tax rate of approximately 39.30% for 2009 and 39.32% for 2008,
except for the tax items(3).
(a) Amounts and percentages have been rounded for presentation purposes and
might differ from unrounded results.
Contact Information: Contact: Ms. Milton Gray Draper Director of Investor Relations 650-589-9445 x 3027 mdraper@core-mark.com