Delaware | 000-51515 | 20-1489747 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
395 Oyster Point Boulevard, Suite 415 South San Francisco, California | 94080 |
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Number | Description | |
99.1 | Press Release of Core-Mark Holding Company, Inc. dated November 5, 2015 with attachments. |
CORE-MARK HOLDING COMPANY, INC. | ||||
Date: | November 5, 2015 | By: | /s/ Stacy Loretz-Congdon | |
Name: | Stacy Loretz-Congdon | |||
Title: | Chief Financial Officer |
Number | Description | |
99.1 | Press Release of Core-Mark Holding Company, Inc. dated November 5, 2015 with attachments. |
• | Sales Increased 8.9% to $3.0 Billion |
• | Net Income was $15.1 Million & EPS was $0.65 per diluted share |
• | Adjusted EBITDA Increased by 13.2% to $41.3 Million |
• | The Company Adjusted its 2015 EPS Guidance for Expansion Activities, LIFO & Foreign Exchange Rates |
• | Dividend Increased $0.03, or 23%, to $0.16 per share quarterly, or $0.64 per share annually. |
RECONCILIATION OF GROSS PROFIT TO REMAINING GROSS PROFIT | ||||||||||
(Unaudited and $ in millions) | ||||||||||
For the Three Months Ended September 30, | ||||||||||
2015 | 2014 | % Change | ||||||||
Gross profit | $ | 171.6 | $ | 151.4 | 13.3 | % | ||||
Cigarette inventory holding gains | (0.6 | ) | (0.2 | ) | ||||||
Candy inventory holding gains | — | (5.2 | ) | |||||||
Cigarette tax stamp inventory holding gains | (8.3 | ) | — | |||||||
OTP tax items | — | (2.3 | ) | |||||||
LIFO expense | 3.3 | 6.5 | ||||||||
Remaining gross profit | $ | 166.0 | $ | 150.2 | 10.5 | % |
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA | ||||||||||
(Unaudited and $ in millions) | ||||||||||
For the Three Months Ended September 30, | ||||||||||
2015 | 2014 | % Change | ||||||||
Net income | $ | 15.1 | $ | 13.7 | 10.2 | % | ||||
Interest expense, net (1) | 0.5 | 0.4 | ||||||||
Provision for income taxes | 9.1 | 6.3 | ||||||||
Depreciation & amortization | 9.9 | 8.3 | ||||||||
LIFO expense | 3.3 | 6.5 | ||||||||
Stock-based compensation expense | 2.7 | 1.5 | ||||||||
Foreign currency transaction losses (gains), net | 0.7 | (0.2 | ) | |||||||
Adjusted EBITDA | $ | 41.3 | $ | 36.5 | 13.2 | % |
RECONCILIATION OF GROSS PROFIT TO REMAINING GROSS PROFIT | ||||||||||
(Unaudited and $ in millions) | ||||||||||
For the Nine Months Ended September 30, | ||||||||||
2015 | 2014 | % Change | ||||||||
Gross profit | $ | 467.8 | $ | 419.1 | 11.6 | % | ||||
Cigarette inventory holding gains | (5.4 | ) | (4.0 | ) | ||||||
Candy inventory holding gains | — | (5.2 | ) | |||||||
Cigarette tax stamp inventory holding gains | (8.3 | ) | — | |||||||
OTP tax items | (1.8 | ) | (2.3 | ) | ||||||
LIFO expense | 9.2 | 13.6 | ||||||||
Remaining gross profit | $ | 461.5 | $ | 421.2 | 9.6 | % |
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA | ||||||||||
(Unaudited and $ in millions) | ||||||||||
For the Nine Months Ended September 30, | ||||||||||
2015 | 2014 | % Change | ||||||||
Net income | $ | 33.8 | $ | 28.1 | 20.3 | % | ||||
Interest expense, net (1) | 1.5 | 1.4 | ||||||||
Provision for income taxes | 20.9 | 15.8 | ||||||||
Depreciation & amortization | 28.3 | 23.4 | ||||||||
LIFO expense | 9.2 | 13.6 | ||||||||
Stock-based compensation expense | 6.7 | 4.3 | ||||||||
Foreign currency transaction losses, net | 1.3 | — | ||||||||
Adjusted EBITDA | $ | 101.7 | $ | 86.6 | 17.4 | % |
CORE-MARK HOLDING COMPANY, INC. AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(In millions, except share and per share data) | |||||||
(Unaudited) | |||||||
September 30, | December 31, | ||||||
2015 | 2014 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 9.4 | $ | 14.4 | |||
Restricted cash | 9.7 | 13.0 | |||||
Accounts receivable, net of allowance for doubtful accounts of $10.9 and $10.8 as of September 30, 2015 and December 31, 2014, respectively | 278.6 | 245.3 | |||||
Other receivables, net | 63.9 | 61.5 | |||||
Inventories, net | 350.1 | 417.8 | |||||
Deposits and prepayments | 58.0 | 43.7 | |||||
Deferred income taxes | 9.1 | 8.4 | |||||
Total current assets | 778.8 | 804.1 | |||||
Property and equipment, net | 157.1 | 148.9 | |||||
Goodwill | 22.9 | 22.9 | |||||
Other intangible assets, net | 28.4 | 22.6 | |||||
Other non-current assets, net | 29.6 | 31.1 | |||||
Total assets | $ | 1,016.8 | $ | 1,029.6 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 148.1 | $ | 128.4 | |||
Book overdrafts | 28.0 | 29.1 | |||||
Cigarette and tobacco taxes payable | 170.9 | 187.3 | |||||
Accrued liabilities | 108.1 | 93.4 | |||||
Deferred income taxes | 0.2 | 0.3 | |||||
Total current liabilities | 455.3 | 438.5 | |||||
Long-term debt | 19.4 | 68.2 | |||||
Deferred income taxes | 16.6 | 16.2 | |||||
Other long-term liabilities | 11.5 | 11.9 | |||||
Claims liabilities | 27.7 | 27.5 | |||||
Pension liabilities | 8.2 | 6.0 | |||||
Total liabilities | 538.7 | 568.3 | |||||
Contingencies | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.01 par value (100,000,000 shares authorized, 25,970,413 and 25,847,269 shares issued; 23,054,835 and 23,080,110 shares outstanding at September 30, 2015 and December 31, 2014, respectively) | 0.3 | 0.3 | |||||
Additional paid-in capital | 269.7 | 263.8 | |||||
Treasury stock at cost (2,915,578 and 2,767,159 shares of common stock at September 30, 2015 and December 31, 2014, respectively) | (61.6 | ) | (52.6 | ) | |||
Retained earnings | 286.1 | 261.4 | |||||
Accumulated other comprehensive loss | (16.4 | ) | (11.6 | ) | |||
Total stockholders’ equity | 478.1 | 461.3 | |||||
Total liabilities and stockholders’ equity | $ | 1,016.8 | $ | 1,029.6 |
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, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net sales | $ | 2,991.6 | $ | 2,747.4 | $ | 8,254.3 | $ | 7,671.5 | |||||||
Cost of goods sold | 2,820.0 | 2,596.0 | 7,786.5 | 7,252.4 | |||||||||||
Gross profit | 171.6 | 151.4 | 467.8 | 419.1 | |||||||||||
Warehousing and distribution expenses | 92.8 | 83.5 | 260.9 | 236.9 | |||||||||||
Selling, general and administrative expenses | 52.8 | 47.0 | 147.6 | 134.9 | |||||||||||
Amortization of intangible assets | 0.6 | 0.7 | 1.8 | 2.0 | |||||||||||
Total operating expenses | 146.2 | 131.2 | 410.3 | 373.8 | |||||||||||
Income from operations | 25.4 | 20.2 | 57.5 | 45.3 | |||||||||||
Interest expense | (0.6 | ) | (0.5 | ) | (1.9 | ) | (1.8 | ) | |||||||
Interest income | 0.1 | 0.1 | 0.4 | 0.4 | |||||||||||
Foreign currency transaction gains (losses), net | (0.7 | ) | 0.2 | (1.3 | ) | — | |||||||||
Income before income taxes | 24.2 | 20.0 | 54.7 | 43.9 | |||||||||||
Provision for income taxes | (9.1 | ) | (6.3 | ) | (20.9 | ) | (15.8 | ) | |||||||
Net income | $ | 15.1 | $ | 13.7 | $ | 33.8 | $ | 28.1 | |||||||
Basic net income per common share (1) | $ | 0.65 | $ | 0.59 | $ | 1.46 | $ | 1.22 | |||||||
Diluted net income per common share (1) | $ | 0.65 | $ | 0.59 | $ | 1.45 | $ | 1.21 | |||||||
Basic weighted-average shares | 23.1 | 23.1 | 23.1 | 23.1 | |||||||||||
Diluted weighted-average shares | 23.3 | 23.3 | 23.3 | 23.2 | |||||||||||
(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, | |||||||
2015 | 2014 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 33.8 | $ | 28.1 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
LIFO and inventory provisions | 9.2 | 13.4 | |||||
Amortization of debt issuance costs | 0.2 | 0.2 | |||||
Stock-based compensation expense | 6.7 | 4.3 | |||||
Bad debt expense, net | 1.1 | 1.3 | |||||
Depreciation and amortization | 28.3 | 23.4 | |||||
Foreign currency transaction losses, net | 1.3 | — | |||||
Deferred income taxes | (0.3 | ) | 1.5 | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable, net | (33.3 | ) | (32.5 | ) | |||
Other receivables, net | (3.3 | ) | (2.5 | ) | |||
Inventories, net | 53.9 | 34.6 | |||||
Deposits, prepayments and other non-current assets | (18.0 | ) | (10.4 | ) | |||
Excess tax deductions associated with stock-based compensation | (2.0 | ) | (2.4 | ) | |||
Accounts payable | 22.3 | 23.6 | |||||
Cigarette and tobacco taxes payable | (10.2 | ) | (18.0 | ) | |||
Pension, claims, accrued and other long-term liabilities | 16.2 | 4.9 | |||||
Net cash provided by operating activities | 105.9 | 69.5 | |||||
Cash flows from investing activities: | |||||||
Acquisition of business, net of cash acquired | (8.0 | ) | — | ||||
Change in restricted cash | 3.3 | 0.4 | |||||
Additions to property and equipment, net | (24.7 | ) | (24.1 | ) | |||
Capitalization of software and related development costs | (7.5 | ) | (3.2 | ) | |||
Proceeds from sale of fixed assets | 0.3 | — | |||||
Net cash used in investing activities | (36.6 | ) | (26.9 | ) | |||
Cash flows from financing activities: | |||||||
Repayments under revolving credit facility, net | (50.6 | ) | (17.7 | ) | |||
Dividends paid | (9.1 | ) | (7.7 | ) | |||
Payments on capital leases | (1.6 | ) | (1.3 | ) | |||
Repurchases of common stock | (9.0 | ) | (5.3 | ) | |||
Proceeds from exercise of common stock options | 0.3 | 1.9 | |||||
Tax withholdings related to net share settlements of restricted stock units | (3.2 | ) | (1.4 | ) | |||
Excess tax deductions associated with stock-based compensation | 2.0 | 2.4 | |||||
Increase (decrease) in book overdrafts | (1.1 | ) | 0.5 | ||||
Net cash used in financing activities | (72.3 | ) | (28.6 | ) | |||
Effects of changes in foreign exchange rates | (2.0 | ) | (0.8 | ) | |||
Change in cash and cash equivalents | (5.0 | ) | 13.2 | ||||
Cash and cash equivalents, beginning of period | 14.4 | 11.0 | |||||
Cash and cash equivalents, end of period | $ | 9.4 | $ | 24.2 | |||
Supplemental disclosures: | |||||||
Cash paid during the period for: | |||||||
Income taxes, net | $ | 21.1 | $ | 15.4 | |||
Interest | $ | 1.0 | $ | 0.7 | |||
Non-cash capital lease obligations incurred | $ | 5.2 | $ | 4.7 | |||
Unpaid property and equipment purchases included in accrued liabilities | $ | 1.5 | $ | 7.8 |
CORE-MARK HOLDING COMPANY, INC. AND SUBSIDIARIES | |||||||||||||||||||||
SUPPLEMENTAL SCHEDULE FOR ITEMS IMPACTING DILUTED EPS | |||||||||||||||||||||
(In millions, except per share data) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2015 (a)(b) | 2014 (a)(b) | % Change | 2015 (a)(b) | 2014 (a)(b) | % Change | ||||||||||||||||
Net income | $ | 15.1 | $ | 13.7 | 10.2 | % | $ | 33.8 | $ | 28.1 | 20.3 | % | |||||||||
Diluted shares | 23.3 | 23.3 | 23.3 | 23.2 | |||||||||||||||||
Diluted EPS | $ | 0.65 | $ | 0.59 | 10.2 | % | $ | 1.45 | $ | 1.21 | 19.8 | % | |||||||||
LIFO expense | 0.08 | 0.17 | 0.24 | 0.36 | |||||||||||||||||
Diluted EPS excluding LIFO expense | $ | 0.73 | $ | 0.76 | (3.9 | )% | $ | 1.69 | $ | 1.57 | 7.6 | % | |||||||||
Additional Items Impacting Diluted EPS: | |||||||||||||||||||||
Cigarette inventory holding gains (1) | $ | 0.02 | $ | 0.01 | $ | 0.13 | $ | 0.10 | |||||||||||||
Candy inventory holding gains (2) | — | 0.14 | — | 0.14 | |||||||||||||||||
Cigarette tax stamp inventory holding gains (3) | 0.21 | — | 0.21 | — | |||||||||||||||||
Net OTP tax items (4) | — | 0.05 | 0.04 | 0.05 | |||||||||||||||||
Business expansion and integration costs (5) | (0.01 | ) | (0.02 | ) | (0.04 | ) | (0.02 | ) | |||||||||||||
Pension liability settlement (6) | (0.02 | ) | — | (0.02 | ) | — | |||||||||||||||
Tax items (7) | 0.02 | 0.07 | 0.01 | 0.07 | |||||||||||||||||
Foreign exchange losses (8) | (0.03 | ) | — | (0.02 | ) | — | |||||||||||||||
(a) Amounts and percentages have been rounded for presentation purposes and might differ from unrounded results. (b) The per share impacts of the above items were calculated using a normal tax rate of approximately 38.8% and 39.3% for the three and nine months ended September 30, 2015 and 2014, respectively. | |||||||||||||||||||||
(1) Cigarette inventory holding gains | |||||||||||||||||||||
Cigarette inventory holding gains were $0.6 million and $5.4 million for the three and nine months ended September 30, 2015, respectively, versus $0.2 million and $4.0 million for the three and nine months ended September 30, 2014, respectively. | |||||||||||||||||||||
(2) Candy inventory holding gains | |||||||||||||||||||||
Candy inventory holding gains were $5.2 million for both the three and nine months ended September 30, 2014. | |||||||||||||||||||||
(3) Cigarette tax stamp inventory holding gains | |||||||||||||||||||||
During both the three and nine months ended September 30, 2015, the Company recorded $8.3 million of inventory holding gains and associated operating costs of approximately $0.4 million, relating to the increase in cigarette excise taxes in certain jurisdictions. | |||||||||||||||||||||
(4) Net OTP tax items | |||||||||||||||||||||
There was no OTP tax refund for the three months ended September 30, 2015. During the nine months ended September 30, 2015 the Company recognized OTP tax refunds of $1.8 million related to prior years’ taxes and associated expenses of $0.1 million. For both the three and nine months ended September 30, 2014, the Company recognized OTP tax refunds of $2.3 million related to prior years’ taxes and associated expenses of $0.3 million. | |||||||||||||||||||||
(5) Business expansion and integration costs | |||||||||||||||||||||
During the three and nine months ended September 30, 2015 the Company incurred approximately $0.4 million and $1.5 million, respectively, in business expansion and integration expenses. During both the three and nine months ended September 30, 2014 we incurred $0.9 million in business expansion and integration expenses. | |||||||||||||||||||||
(6) Pension liability settlement | |||||||||||||||||||||
For the three and nine months ended September 30, 2015 the Company recorded a settlement charge of $0.9 million related to lump sum payments made to plan participants in lieu of future pension benefits. | |||||||||||||||||||||
(7) Tax items | |||||||||||||||||||||
The provision for income taxes for both the three and nine months ended September 30, 2015 included a net benefit of $0.4 million related primarily to adjustments of prior years' estimates. The provision for income taxes for both the three and nine months ended September 30, 2014 included a net benefit of $1.6 million related primarily to adjustments of prior years' estimates and the expiration of the statute of limitations for uncertain tax positions. | |||||||||||||||||||||
(8) Foreign exchange losses | |||||||||||||||||||||
During the three and nine months ended September 30, 2015 the Company recognized foreign exchange transaction losses of $0.7 million and $1.3 million, respectively. The Company recognized a foreign exchange transaction gain of $0.2 million for the three month period ended September 30, 2014. |
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