Core-Mark Announces Third Quarter 2015 Financial Results
(firmenpresse) - SOUTH SAN FRANCISCO, CA -- (Marketwired) -- 11/05/15 -- Core-Mark Holding Company, Inc. (NASDAQ: CORE)
Core-Mark Holding Company, Inc. (NASDAQ: CORE) ("the Company"), 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 third quarter ended September 30, 2015.
"Core-Mark is having a very good year driven by significant market share gains and continued success in our core strategies. We remain focused on infrastructure investments to support our growth and integration efforts to prepare for Murphy USA and other customer account wins. We are excited about our future and continue to focus on additional market share gains, the execution of our core strategies and operational excellence," said Thomas B. Perkins, President and Chief Executive Officer.
Net sales increased 8.9% to $3.0 billion for the third quarter of 2015 compared to $2.7 billion for the same period in 2014. Excluding the impact of foreign currency fluctuations, net sales increased 11.3%. Non-cigarette sales increased 5.9% led by Food category sales, which increased 8.6%, driven primarily by the Company's core strategies. Cigarette sales increased 10.3% driven primarily by an increase in cigarette carton sales due mostly to market share gains.
Gross profit increased 13.3% to $171.6 million for the third quarter of 2015 compared to $151.4 million for the same period in 2014 driven primarily by increases in sales volume and margins, an $8.3 million cigarette tax stamp inventory holding gain and a $3.2 million reduction in LIFO expense. Gross profit in the third quarter of 2014 included $5.2 million of candy inventory holding gains and $2.3 million of other tobacco products ("OTP") tax refunds. Remaining gross profit increased 10.5% to $166.0 million driven primarily by higher sales and margins in the non-cigarette categories. Non-cigarette remaining gross profit margins increased 41 basis points to 12.57% driven in part by sales growth in the Food category and a sales shift towards other higher margin items. The following table reconciles the components of gross profit.
The Company's operating expenses for the third quarter of 2015 were $146.2 million compared to $131.2 million for the same period in 2014. Operating expenses as a percentage of net sales were 4.9% for the third quarter of 2015 compared to 4.8% for the third quarter of 2014. The increase in operating expenses in the third quarter of 2015 includes approximately $4.5 million of incremental expenses from the Company's new Ohio division and the addition of Karrys Bros. acquired earlier in 2015. In addition, operating expenses in the third quarter this year were impacted by increases in the amount of cubic feet of product handled, incremental customer deliveries, investment spending to support our growth and $0.9 million related to the lump sum settlement of pension liabilities.
Net income for the third quarter of 2015 was $15.1 million compared to $13.7 million for the same period in 2014. Adjusted EBITDA increased 13.2% to $41.3 million in the third quarter of 2015 compared to $36.5 million in the third quarter of 2014. The increases in net income and Adjusted EBITDA for the third quarter of 2015 were driven primarily by an increase in gross profit. The components of Adjusted EBITDA are provided in the table below.
Diluted earnings per-share ("EPS") were $0.65 for the third quarter of 2015 compared to $0.59 for the third quarter of 2014. Excluding LIFO expenses, diluted EPS were $0.73 for the third quarter of 2015 compared to $0.76 for the third quarter of 2014. EPS compared to prior year was impacted by foreign currency transaction losses and a $1.2 million reduction in tax benefits that increased our effective tax rate. In addition, per-share results were impacted by several other items, which are provided in the attached diluted EPS table following the financial schedules.
Net sales increased 7.6% to $8.3 billion for the first nine months of 2015 compared to $7.7 billion for the same period in 2014. Excluding the impact of foreign currency fluctuations, net sales increased 9.5%. This growth was driven primarily by an increase in cigarette carton sales, including market share gains, an increase in cigarette prices and an increase in non-cigarette sales. Non-cigarette sales grew 6.7% while cigarette sales increased 8.0%.
Gross profit increased 11.6% to $467.8 million for the first nine months of 2015 compared to $419.1 million for the same period in 2014. Remaining gross profit increased 9.6% to $461.5 million driven by a 10.0% increase in non-cigarette remaining gross profit compared to the same period last year and an 8.3% increase in cigarette remaining gross profit. Non-cigarette remaining gross profit margin increased 39 basis points to 12.57% driven primarily by sales growth in the Food category and a sales shift towards higher margin items. The following table reconciles the components of gross profit.
The Company's operating expenses for the first nine months of 2015 were $410.3 million compared to $373.8 million for the same period of 2014. Operating expenses as a percentage of net sales were 5.0% for the first nine months of 2015 and 4.9% for the first nine months of 2014. The increase in operating expenses this year compared to last year, included $13.6 million of incremental expenses from the Company's new Ohio division and the addition of Karrys Bros. acquired earlier in 2015. In addition, increases in the amount of cubic feet of product handled, incremental customer deliveries and investment spending to support our growth contributed to higher operating costs for the first nine months of 2015.
Net income for the first nine months of 2015 was $33.8 million compared to $28.1 million for the same period in 2014. Adjusted EBITDA increased 17.4% to $101.7 million in the first nine months of 2015 compared to $86.6 million in the first nine months of 2014. The increase in net income for the first nine months of 2015 was driven primarily by an increase in gross profit. The components of Adjusted EBITDA are provided in the table below.
Diluted EPS were $1.45 for the first nine months of 2015 compared to $1.21 for the same period in 2014. Excluding LIFO expenses, diluted EPS were $1.69 for the first nine months of 2015 compared to $1.57 for the same period in 2014, a 7.6% increase. Per-share results were impacted by several other items, which are provided in the attached diluted EPS table following the financial schedules.
Core-Mark also announced today its Board of Directors has approved a $0.16 cash dividend per common share for the fourth quarter, or $0.64 annually, an increase of $0.03 per quarter from the prior dividend. The dividend for the three months ended September 30, 2015 is payable on December 15, 2015 to stockholders of record as of the close of business on November 20, 2015.
The Company has reiterated its net sales and Adjusted EBITDA guidance for the full year of 2015. Net sales are expected to be between $11.0 billion and $11.2 billion and Adjusted EBITDA is expected to be between $133.0 million and $136.0 million.
The Company has adjusted its diluted EPS guidance for the full year due to higher than expected foreign currency transaction losses, additional expansion costs related to onboarding its large customer wins, offset by a reduction in LIFO expense. Reflecting the aforementioned items, diluted EPS is now expected to be between $2.08 and $2.15, previously $2.03 to $2.10 and diluted EPS, excluding LIFO expense, are now expected to be between $2.40 and $2.47, previously $2.45 to $2.52. Management still anticipates a tax rate of approximately 38%. Diluted shares outstanding are now expected to be 23.3 million, previously 23.4 million and LIFO expense is estimated to be approximately $12 million, previously $16 million.
The Company reaffirmed capital expenditure estimates for 2015 of approximately $35 million, which will be utilized for expansion projects and maintenance investments.
Core-Mark will host an earnings call on Thursday, November 5, 2015 at 9:00 a.m. Pacific time during which management will review the results of the third quarter of 2015. The call may be accessed by dialing 1-800-588-4973 using the code 40899613. The call may also be listened to on the Company's website .
An audio replay will be available for approximately one month following the call by dialing 1-888-843-7419 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 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 facilitate 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 2015 net sales, Adjusted EBITDA, diluted earnings per share, diluted earnings per share excluding LIFO expense, 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, 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; manufacturers or retail customers adopting direct distribution channels; fuel and other transportation costs; 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 and counterfeit product claims and manufacturer recalls of products; our ability to achieve the expected benefits of implementation of marketing initiatives; failing to maintain our brand and reputation; failure or disruptions of our information technology systems; unexpected outcomes in legal proceedings; our dependence on qualified labor, our senior management and other key personnel; attempts by unions to organize our employees; increasing expenses related to employee health benefits; failure to comply with governmental regulations or substantial changes to governmental regulations; earthquake and natural disaster damage; increases in the number or severity of insurance and claims expenses; 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; changes to federal, state or provincial income tax legislation; changes in the funding of our pension plans; reduction in the payment of dividends; currency exchange rate fluctuations; our ability to borrow additional capital; restrictive covenants in our Credit Facility; changes to accounting rules or regulations; and compliance with governmental regulations. Refer to the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on March 2, 2015 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. 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 37,500 customer locations in the U.S. and Canada through 29 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: 05.11.2015 - 13:30 Uhr
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