CORE-MARK HOLDING COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
June 30, December 31,
2009 2008
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Assets
Current assets:
Cash and cash equivalents $ 14.1 $ 15.7
Restricted cash 14.1 11.4
Accounts receivable, net of allowance for
doubtful accounts of $9.4 and $8.8,
respectively 174.4 146.9
Other receivables, net 37.7 34.1
Inventories, net 249.8 238.4
Deposits and prepayments 39.0 26.5
Deferred income taxes 12.2 12.2
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Total current assets 541.3 485.2
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Property and equipment, net 76.4 74.2
Deferred income taxes 12.2 12.1
Goodwill 3.7 3.7
Other non-current assets, net 34.5 37.4
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Total assets $ 668.1 $ 612.6
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 79.3 $ 66.0
Book overdrafts 18.2 17.8
Cigarette and tobacco taxes payable 113.3 103.2
Accrued liabilities 68.5 58.1
Deferred income taxes 1.6 1.6
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Total current liabilities 280.9 246.7
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Long-term debt, net 25.9 30.8
Other long-term liabilities 8.3 11.1
Claims liabilities, net of current portion 31.8 31.3
Pension liabilities 19.4 19.1
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Total liabilities 366.3 339.0
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Stockholders' equity:
Common stock; $0.01 par value (50,000,000
shares authorized; 10,888,457 and 10,746,416
shares issued; 10,393,095 and 10,349,700
shares outstanding at June 30, 2009 and
December 31, 2008, respectively) 0.1 0.1
Additional paid-in capital 212.2 209.3
Treasury stock at cost, 495,362 and 396,716
shares of common stock at June 30, 2009 and
December 31, 2008, respectively (13.2) (11.0)
Retained earnings 109.8 82.3
Accumulated other comprehensive loss (7.1) (7.1)
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Total stockholders' equity 301.8 273.6
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Total liabilities and stockholders'
equity $ 668.1 $ 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 Six Months Ended
June 30, June 30,
2009 2008 2009 2008
--------- --------- --------- ---------
Net sales $ 1,711.8 $ 1,534.6 $ 3,103.6 $ 2,880.0
Cost of goods sold 1,624.3 1,443.5 2,898.0 2,707.7
--------- --------- --------- ---------
Gross profit 87.5 91.1 205.6 172.3
--------- --------- --------- ---------
Warehousing and distribution
expenses 50.2 51.0 95.2 96.9
Selling, general and
administrative expenses 32.1 30.9 69.1 65.0
Amortization of intangible
assets 0.5 0.5 1.1 1.0
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Total operating expenses 82.8 82.4 165.4 162.9
--------- --------- --------- ---------
Income from operations 4.7 8.7 40.2 9.4
Interest expense 0.4 0.4 0.9 0.9
Interest income (0.1) (0.4) (0.2) (0.7)
Foreign currency transaction
(gains) losses, net (2.4) 0.1 (1.6) 1.1
--------- --------- --------- ---------
Income before income taxes 6.8 8.6 41.1 8.1
Provision for income taxes 2.6 2.9 13.6 2.9
--------- --------- --------- ---------
Net income $ 4.2 $ 5.7 $ 27.5 $ 5.2
========= ========= ========= =========
Basic income per common share $ 0.40 $ 0.54 $ 2.62 $ 0.49
========= ========= ========= =========
Diluted income per common share $ 0.39 $ 0.51 $ 2.58 $ 0.47
========= ========= ========= =========
Basic weighted average shares 10.5 10.5 10.5 10.6
Diluted weighted average shares 10.8 11.0 10.6 11.1
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)
Six Months Ended
June 30,
2009 2008
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Cash flows from operating activities:
Net income $ 27.5 $ 5.2
Adjustments to reconcile net income to net cash
provided by operating activities:
LIFO and inventory provisions 5.1 6.2
Amortization of debt issuance costs 0.3 0.2
Amortization of stock-based compensation
expense 2.5 1.9
Bad debt expense, net 1.1 0.4
Depreciation and amortization 9.1 8.4
Foreign currency transaction (gains) losses,
net (1.6) 1.1
Deferred income taxes - (0.1)
Changes in operating assets and liabilities:
Accounts receivable (27.9) (17.5)
Other receivables (3.0) (3.8)
Inventories (14.5) (0.9)
Deposits, prepayments and other non-current
assets (12.0) (13.8)
Accounts payable 12.6 22.3
Cigarette and tobacco taxes payable 8.1 3.7
Pension, claims and other accrued liabilities 7.7 (1.5)
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Net cash provided by operating activities 15.0 11.8
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Cash flows from investing activities:
Restricted cash (2.1) (1.8)
Acquisition of business, net of cash acquired - (26.4)
Additions to property and equipment, net (8.3) (7.9)
Capitalization of software (0.3) (0.4)
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Net cash used in investing activities (10.7) (36.5)
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Cash flows from financing activities:
(Repayments) borrowings under revolving credit
facility, net (4.9) 34.2
Repurchases of common stock shares (treasury
stock) (2.2) (6.9)
Proceeds from exercise of common stock options 0.6 0.9
Excess tax deductions associated with
stock-based compensation 0.1 0.2
Increase (decrease) in book overdrafts 0.3 (2.8)
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Net cash (used in) provided by financing
activities (6.1) 25.6
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Effects of changes in foreign exchange rates 0.2 (0.3)
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(Decrease) increase in cash and cash equivalents (1.6) 0.6
Cash and cash equivalents, beginning of period 15.7 21.3
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Cash and cash equivalents, end of period $ 14.1 $ 21.9
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Supplemental disclosures:
Cash paid during the period for:
Income taxes, net of refunds $ 12.2 $ 5.8
Interest $ 0.6 $ 0.7
CORE-MARK HOLDING COMPANY, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP DILUTED EPS
(Unaudited)
Three Months Ended June 30 Six Months Ended June 30
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% %
Increase/ Increase/
2009(a) 2008(a) (Decrease) 2009(a) 2008(a) (Decrease)
------- ------- --------- ------- ------- ---------
Net Income 4.2 5.7 (26.3%) 27.5 5.2 428.8%
======= ======= ========= ======= ======= =========
Diluted shares 10.8 11.0 (1.8%) 10.6 11.1 (4.5%)
------- ------- --------- ------- ------- ---------
GAAP Diluted EPS $ 0.39 $ 0.51 $ 2.58 $ 0.47
LIFO expense 0.12 0.17 0.29 0.26
Cigarette
inventory
holding
profits(1) (0.02) (0.07) (2.02) (0.08)
Federal floor
stock tax (2) 0.65 - 0.66 -
Foreign
exchange
loss/(gain) (0.13) 0.01 (0.09) 0.06
Tax items(3) - (0.05) (0.26) (0.04)
Non-GAAP Diluted
EPS (4) $ 1.01 $ 0.57 77.2% $ 1.16 $ 0.67 73.1%
------- ------- --------- ------- ------- ---------
(1) Cigarette inventory holding profits
Cigarette holding profits for the three months ended June 30, 2009 were
$0.4 million compared to $1.3 million for the same period in 2008. For the
six months ended June 30, 2009 cigarette holding profits were $35.2 million
compared to $1.4 million for the same period in 2008. The increase in
cigarette inventory holding profits for the six months ended June 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) Federal floor stock tax
The net Federal floor stock tax which was imposed as part of the SCHIP
legislation for the three and six months ended June 30, 2009 was $11.5
million.
(3) Tax items
Included in the provision for income taxes for the six months ended June
30, 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. The provision for income taxes for the three and six
months ended June 30, 2008 includes a $0.5 million benefit related
primarily to the expiration of the statute of limitations for uncertain tax
positions and $0.1 million of after tax interest expense.
(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