Core-Mark's Southeast Footprint Boosts Q3 Results
SAN FRANCISCO -- Core-Mark Holding Co. saw its third-quarter earnings rise as it captured more of the Southeast market. The company is looking to ride the momentum to hit a record year in 2012.
Net sales increased 11.6 percent to $2.23 billion for the third quarter of 2011 compared to $1.99 billion for the same period in 2010. On a constant currency basis, net sales increased 10.6 percent.
The company's acquisition of Forrest City Grocery Co. (FCGC) in May 2011 was the key driver of the growth, according to a company release. In addition, net sales increased due to cigarette price increases, business generated from a new Alimentation Couche-Tard contract and the acquisition of Finkle Distributors, Inc. (FDI) in August 2010. As a result of the FCGC acquisition and the new Couche-Tard business, the company has two new divisions in the Southeast, which are expected to increase sales significantly.
Gross profit for the third quarter of 2011 was $122.2 million compared to $106.1 million for the same period last year. Remaining gross profit increased 11.1 percent to $121.1 million this quarter from $109 million in the third quarter of 2010. Non-cigarette remaining gross profit increased 9.4 percent or $6.9 million. Cigarette remaining gross profit per carton increased six cents.
Core-Mark's operating expenses for the third quarter of 2011 were $101.1 million compared to $92.5 million in the same quarter in 2010. As a percentage of net sales, total operating expenses decreased nine basis points.
Net income for the third quarter of 2011 was $12.0 million, or $1.03 per diluted share, compared to $8.7 million, or $0.78 per diluted share, for the same period in 2010. Excluding these items, diluted earnings per share on an adjusted basis would have been $1.14 for the third quarter in 2011 compared to $0.91 for the same quarter last year.
"We are pleased with our earnings growth and with the momentum we have created over the last year. We expect to have a good year and an even better one in 2012," said Michael Walsh, president and CEO of Core-Mark.