Core-Mark Announces First Quarter Diluted EPS of $2.20
Market Wire, May, 2009
CORE-MARK HOLDING COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
March December
31, 31,
2009 2008
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 12.9 $ 15.7
Restricted cash 9.2 11.4
Accounts receivable, net of allowance for doubtful
accounts of $9.3 and $8.8, respectively 135.9 146.9
Other receivables, net 39.3 34.1
Inventories, net 214.4 238.4
Deposits and prepayments 45.4 26.5
Deferred income taxes 12.2 12.2
-------- --------
Total current assets 469.3 485.2
-------- --------
Property and equipment, net 75.4 74.2
Deferred income taxes 12.2 12.1
Goodwill 3.7 3.7
Other non-current assets, net 35.6 37.4
-------- --------
Total assets $ 596.2 $ 612.6
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 59.7 $ 66.0
Book overdrafts 8.4 17.8
Cigarette and tobacco taxes payable 88.6 103.2
Accrued liabilities 71.9 58.1
Income taxes payable 8.6 -
Deferred income taxes 1.5 1.6
-------- --------
Total current liabilities 238.7 246.7
-------- --------
Long-term debt, net 0.8 30.8
Other long-term liabilities 8.1 11.1
Claims liabilities, net of current portion 31.6 31.3
Pension liabilities 19.1 19.1
-------- --------
Total liabilities 298.3 339.0
-------- --------
Stockholders' equity:
Common stock; $0.01 par value (50,000,000 shares
authorized; 10,829,646 and 10,746,416 shares
issued and outstanding at March 31, 2009 and
December 31, 2008, respectively) 0.1 0.1
Additional paid-in capital 210.3 209.3
Treasury stock at cost, 396,716 shares of common
stock (11.0) (11.0)
Retained earnings 105.6 82.3
Accumulated other comprehensive loss (7.1) (7.1)
-------- --------
Total stockholders' equity 297.9 273.6
-------- --------
Total liabilities and stockholders' equity $ 596.2 $ 612.6
======== ========
CORE-MARK HOLDING COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three Months Ended
March 31,
2009 2008
--------- ---------
Net sales $ 1,391.8 $ 1,345.4
Cost of goods sold 1,273.7 1,264.2
--------- ---------
Gross profit 118.1 81.2
--------- ---------
Warehousing and distribution expenses 45.0 45.9
Selling, general and administrative expenses 37.0 34.1
Amortization of intangible assets 0.6 0.5
--------- ---------
Total operating expenses 82.6 80.5
--------- ---------
Income from operations 35.5 0.7
Interest expense 0.5 0.5
Interest income (0.1) (0.3)
Foreign currency transaction losses, net 0.8 1.0
--------- ---------
Income (loss) before income taxes 34.3 (0.5)
Provision for income taxes 11.0 -
--------- ---------
--------- ---------
Net income (loss) $ 23.3 ($ 0.5)
========= =========
Basic income (loss) per common share (1) $ 2.22 ($ 0.05)
========= =========
Diluted income (loss) per common share (1) $ 2.20 ($ 0.05)
========= =========
Basic weighted average shares 10.5 10.6
Diluted weighted average shares 10.6 10.6
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)
Three Months Ended
March 31,
2009 2008
-------- --------
Cash flows from operating activities:
Net income (loss) $ 23.3 $ (0.5)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
LIFO and inventory provisions 3.0 2.3
Amortization of debt issuance costs 0.1 0.1
Amortization of stock-based compensation expense 1.2 1.0
Bad debt expense, net 0.8 0.3
Depreciation and amortization 4.5 4.4
Foreign currency transaction losses, net 0.8 1.0
Changes in operating assets and liabilities:
Accounts receivable 10.0 1.0
Other receivables (5.5) 0.1
Inventories 19.8 10.4
Deposits, prepayments and other non-current
assets (18.5) 0.5
Accounts payable (6.1) 9.0
Cigarette and tobacco taxes payable (13.6) (1.8)
Pension, claims and other accrued liabilities 11.2 1.3
Income taxes payable 8.7 -
-------- --------
Net cash provided by operating activities 39.7 29.1
-------- --------
Cash flows from investing activities:
Restricted cash 1.9 (1.5)
Additions to property and equipment, net (4.8) (6.0)
Capitalization of software (0.1) (0.2)
-------- --------
Net cash used in investing activities (3.0) (7.7)
-------- --------
Cash flows from financing activities:
Repayments under revolving credit facility, net (30.0) (20.9)
Repurchases of common stock shares (treasury stock) - (2.1)
Proceeds from exercise of common stock options - 0.1
Excess tax deductions associated with stock-based
compensation - 0.1
Decrease in book overdrafts (9.4) -
-------- --------
Net cash used in financing activities (39.4) (22.8)
-------- --------
Effects of changes in foreign exchange rates (0.1) (0.3)
-------- --------
Decrease in cash and cash equivalents (2.8) (1.7)
Cash and cash equivalents, beginning of period 15.7 21.3
-------- --------
Cash and cash equivalents, end of period $ 12.9 $ 19.6
======== ========
Supplemental disclosures:
Cash (refunded) paid during the period for:
Income taxes, includes interest paid, net of
refunds $ 0.1 $ (3.5)
Interest $ 0.3 $ 0.4
CORE-MARK HOLDING COMPANY, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP DILUTED EPS
(Unaudited)
Three Months Ended March 31
---------------------------
%
Increase/
2009(a) 2008(a) (Decrease)
------- ------- ---------
GAAP Diluted EPS $ 2.20 ($ 0.05)
LIFO expense 0.17 0.10
Cigarette inventory holding profits(1) (2.00) (0.01)
New England conversion costs(2) 0.05 -
Start up costs for Toronto division - 0.04
Foreign exchange loss 0.05 0.06
Tax items(3) (0.26) 0.02
------- ------- ---------
Non-GAAP Diluted EPS(4) $ 0.21 $ 0.16 31.3%
------- ------- ---------
(1) Cigarette inventory holding profits
Cigarette holding profits for the three months ended March 31, 2009
were $34.9 million compared to $0.1 million for the same period in 2008.
The increase in cigarette inventory holding profits for three months
ended March 31, 2009 is due primarily to increases in cigarette prices by
manufacturers in response to the increase in federal excise taxes mandated
by the SCHIP legislation.
(2) New England conversion costs
We incurred $0.8 million of costs related
to the integration of our New England division onto our information
technology platform.
(3) Tax items
Included in the provision for income taxes for the three
months ended March 31, 2009 was a $1.8 million benefit related primarily to
the expiration of the statute of limitations for uncertain tax positions
and related interest of $1.0 million. Included in the provision for Income
Taxes for the three months ended March 31, 2008 was $.2 million of after
tax interest expense related to our uncertain tax positions.
(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) which are based on their applicable tax rate.
(a) Amounts and percentages have been rounded for presentation purposes and
might differ from unrounded results.
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