Core-Mark Announces Fourth Quarter and Full Year 2012 Financial Results
Record Annual Sales of $8.9 Billion; Record Adjusted EBITDA in 2012 & a 30% Increase in Diluted EPS for the Year; Record Fourth Quarter Diluted EPS of $0.83; Expect Sales of $9.8-$10 Billion & Adjusted EBITDA of $112-$115 Million in 2013
(firmenpresse) - SOUTH SAN FRANCISCO, CA -- (Marketwire) -- 03/14/13 -- Core-Mark Holding Company, Inc. (NASDAQ: CORE), one of the largest marketers of fresh and broad-line supply solutions to the convenience retail industry in North America, announced financial results for the fourth quarter and year ended December 31, 2012.
"We posted record sales and profits in 2012, ending the year on a high note with the acquisition of J.T. Davenport and Sons. Mark Davenport and his excellent company are a great addition to the Core-Mark family and strengthen our presence in the Southeast," said Thomas B. Perkins, President and Chief Executive Officer. "I am excited to have the responsibility to lead this great company in our 125th year of existence. Our core strategies are intact and will continue to fuel growth in the coming years."
Net sales increased 2.9% to $2.2 billion for the fourth quarter of 2012 compared to $2.1 billion for the same period in 2011. Non-cigarettes sales grew 6.2% driven by increases in same store sales and execution of the Company's key marketing strategies. Sales growth overall was impacted by one less selling day this quarter and by lower cigarette carton sales in Canada.
Gross profit for the fourth quarter of 2012 was $121.9 million compared to $109.8 million in the fourth quarter of 2011. Remaining gross profit increased 6.4% to $119.9 million. Non-cigarette remaining gross profit grew $6.3 million or 24 basis points compared to the same quarter last year. Cigarette remaining gross profit per carton increased 3.1%. The following table reconciles the components of gross profit.
The Company's operating expenses for the fourth quarter of 2012 were $105.6 million compared to $101.1 million in the same quarter of 2011. Operating expenses as a percentage of sales increased seven basis points driven by an increase in health and welfare costs.
Net income for the fourth quarter of 2012 was $9.7 million compared to $5.2 million for the same period in 2011. Adjusted EBITDA increased from $22.2 million in the fourth quarter of 2011 to $25.6 million in the fourth quarter of 2012. The components of adjusted EBITDA are provided in the table below.
Diluted earnings per share were $0.83 for the fourth quarter this year compared to $0.45 in the fourth quarter of last year. Excluding LIFO expenses, diluted earnings per share were $0.90 per diluted share in this quarter compared to $0.75 for the fourth quarter in 2011 -- a 20.0% increase. In addition, per share results were impacted by several other items, which are reconciled in the attached diluted EPS table following the financial schedules.
Net sales were $8.9 billion for 2012 compared to $8.1 billion for 2011, a 9.6% increase. Cigarette Sales increased 7.5% and non-cigarette sales increased 14.5% over prior year. The increase in net sales was driven primarily by the expansion in the Southeastern U.S. and the acquisition of Forrest City Grocery Company in May 2011. Excluding these two events, non-cigarette sales grew an additional 6.4% driven by the Company's sales and marketing initiatives.
Gross profit for 2012 was $476.8 million compared to $434.1 million for last year. Remaining gross profit was $481.3 million in 2012 compared to $437.5 million in 2011, a 10.0% increase. Non-cigarette remaining gross profit grew 10.8% despite a $3.6 million decline in inventory holding gains. The following table reconciles the components of gross profit.
The Company's operating expenses for 2012 increased to $419.4 million compared to $388.4 million for 2011. Operating expenses as a percentage to sales were essentially flat excluding start-up costs in both years and the reduction in legacy insurance costs this year.
Net income in 2012 was $33.9 million compared to $26.2 million for the same period in 2011, a 29% increase. Strong revenue growth and improved sales mix to higher margin categories were the primary drivers to the improvement in net income. In addition, adjusted EBITDA increased 9.7% from $91.9 million in 2011 to $100.8 million this year, components of which are provided in the table below. Excluding the start-up costs associated with the J. T. Davenport acquisition, Adjusted EBITDA was $102.1 million in 2012.
Diluted earnings per share were $2.91 for 2012 compared to $2.23 last year, an increase of 30.5%. Excluding LIFO expenses, diluted earnings per share were $3.55 in 2012 compared to $3.17 in 2011 -- a 12% increase. These per share results were impacted by several other items, which are reconciled in the attached diluted EPS table following the financial schedules.
The Company expects annual net sales in 2013 to be between $9.8 billion to $10.0 billion, a 10% to 12% increase. This expected growth over 2012 is driven by incremental sales from our recent acquisition of J.T. Davenport, market share gains and additional penetration into existing stores, leveraging our vendor consolidation and focused marketing initiatives.
Adjusted EBITDA for 2013 is expected to be between $112 million to $115 million, an 11% to 14% increase which includes some start-up and conversion costs associated with the recent acquisition. Diluted earnings per share for the full year are expected to be between $3.10 and $3.25, which includes a $3.7 million increase in LIFO expense to $16 million which decreases EPS by $0.19. In addition, EPS assumes a 40% tax rate and 11.8 million fully diluted shares outstanding, compared to 11.6 million in 2012.
"We will approach $10 billion in annual net sales in 2013 as we continue to gain traction with our key strategic initiatives," said Thomas B. Perkins, President and CEO. "We do not expect robust sales growth in the first quarter of 2013 because we are seeing softer sales as consumers react to increasing payroll taxes and fuel costs, but we expect purchasing patterns to return to normal levels as the summer approaches. I am excited about our opportunities to drive non-cigarette sales growth in 2013 and achieve the goals we have set for ourselves."
Capital expenditures for 2013 are expected to approach $30 million, which will be utilized for expansion projects and maintenance investments.
Core-Mark will host an earnings call on Thursday, March 14, 2013 at 9:00 a.m. Pacific time during which management will review the results of the fourth quarter and full year. The call may be accessed by dialing 1-800-588-4973 using the code 34078663. The call may also be listened to on the Company's website .
An audio replay will be available for two weeks following the call by dialing 888-843-7419 using the same code provided above. The replay will also be available via webcast at for approximately 90 days following the call.
This press release includes non-GAAP financial measures including adjusted diluted earnings per share, diluted earnings per share excluding LIFO expense, adjusted EBITDA, and remaining gross profit. We believe these non-GAAP financial measures provide meaningful supplemental information for investors regarding the performance of our business and facilitates a meaningful period to period evaluation. Management uses these non-GAAP financial measures in order to have comparable financial results to analyze changes in our underlying business. These non-GAAP measures should be considered a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The tables in this press release contain more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.
Statements in this press release that are not statements of historical fact are forward-looking statements. These statements include statements regarding our guidance for 2013 net sales, adjusted EBITDA, diluted earnings per share, capital expenditures and related disclosures. Forward-looking statements in some cases can be identified by the use of words such as "may," "will," "should," "potential," "intend," "expect," "seek," "anticipate," "estimate," "believe," "could," "would," "project," "predict," "continue," "plan," "propose" or other similar words or expressions. Forward-looking statements are made only as of the date of this press release and are based on our current intent, beliefs, plans and expectations. They involve risks and uncertainties that could cause actual future results, performance or developments to differ materially from those described in or implied by such forward-looking statements.
Factors that might cause or contribute to such differences include, but are not limited to, challenging economic conditions; our dependence on the convenience retail industry for our revenues; competition in our distribution markets; the dependence of some of our distribution centers on a few relatively large customers; gasoline and other price increases; the low-margin nature of cigarette and consumable goods distribution; our reliance on manufacturer discount and incentive programs and cigarette excise stamping allowances; our dependence on relatively few suppliers; risks and costs associated with efforts to grow our business through acquisitions; product liability claims and manufacturer recalls of products; unexpected outcomes in legal proceedings; our ability to achieve the expected benefits of implementation of marketing initiatives; failure or disruptions of our information technology systems; our dependence on our senior management; shortages of qualified labor; attempts by unions to organize our employees; declining cigarette sales volumes; legislation and other matters negatively affecting the cigarette and tobacco industry; increases in excise taxes or reduction in credit terms by taxing jurisdictions; potential liabilities associated with sales of cigarettes and other tobacco products; competition from sales of illicit and other low priced sales of cigarettes; changes in the funding of our pension plans; reduction in the payment of dividends; currency exchange rate fluctuations; our ability to borrow additional capital; changes to accounting rules or regulations; compliance with governmental regulations; and earthquake and natural disaster damage. Refer to the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2012 filed with the SEC on March 14, 2013 and Part II, Item 1A, "Risk Factors" of any quarterly report on Form 10-Q subsequently filed by us for a more comprehensive discussion of these and other risk factors. Except as required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Core-Mark is one of the largest marketers of fresh and broad-line supply solutions to the convenience retail industry in North America. Founded in 1888, Core-Mark offers a full range of products, marketing programs and technology solutions to over 29,000 customer locations in the U.S. and Canada through 28 distribution centers (excluding two distribution facilities the Company operates as a third party logistics provider). Core-Mark services traditional convenience retailers, grocers, drug, liquor and specialty stores, and other stores that carry convenience products. For more information, please visit .
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Datum: 14.03.2013 - 12:30 Uhr
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