Core-Mark Holding (CORE) Tops Q2 EPS by 8c, Revenues Beat; Provides Revised FY20 EPS/Revenue Guidance

Core-Mark Holding (NASDAQ: CORE) reported Q2 EPS of $0.38, $0.08 better than the analyst estimate of $0.30. Revenue for the quarter came in at $4.26 billion versus the consensus estimate of $4.09 billion.

• Second Quarter Net Sales decreased 1.7% to $4.26 Billion
• Reduced operating expenses by 10.8% to $187.7 Million
• Net Income of $16.9 Million, Diluted EPS at $0.38 per share
• Adjusted EBITDA of $52.5 Million(1) versus $53.5 Million Last Year
• Announced $0.12 Dividend Payable September 18, 2020
• Provides Updated Guidance for Full Year 2020

“I want to thank our employees, our customers and our vendors for their continued commitment, cooperation and support in what remains a very dynamic environment,” said Scott E. McPherson, President and Chief Executive Officer. “I am proud of what the Company has accomplished this quarter of largely offsetting the impact of sales and margin declines resulting from COVID-19 through operational efficiency, cost saving initiatives and strategic execution. While the duration of the impact of the pandemic on our sales and margins is uncertain, our results in the second quarter demonstrate our ability to successfully navigate the challenges ahead. We finished the quarter with strong free cash flow, low debt leverage and solid momentum focused on moving the business forward and positioning the Company to thrive as we emerge from the pandemic.

GUIDANCE:

Core-Mark Holding sees FY2020 EPS of $1.42-$1.59, versus the consensus of $1.49. Core-Mark Holding sees FY2020 revenue of $16.5-16.8 billion, versus the consensus of $16.58 billion.

The Company now expects 2020 net sales to be between $16.5 billion and $16.8 billion. Adjusted EBITDA is now expected to be between $173 million and $183 million. The revised guidance range anticipates carton declines in the 2% to 3% range in the second half of 2020, consistent with recent guidance from the major manufacturers, and continued impact from COVID-19 on non-cigarette sales and margins. The revised guidance also assumes one additional price increase from the cigarette manufacturers over the remainder of 2020 resulting in full year inventory holding gains in the range of $24 to $26 million. The guidance ranges above are based on current expectations and do not contemplate significant changes in the impact of COVID-19 or economic conditions on the Company’s business.

Diluted EPS for the full year is now expected to be between $0.90 and $1.06. Diluted EPS, excluding LIFO expense, is expected to be between $1.42 and $1.59. Other key assumptions in the revised guidance include $32 million of LIFO expense, a 26% tax rate and 45.3 million fully diluted shares outstanding. The Company’s revised guidance assumes no new acquisitions or large customer market share gains. In addition, capital expenditures for 2020 are expected to be approximately $35 million, which will be used for recurring maintenance projects, upgrading certain distribution facilities and the relocation of one distribution facility.

For earnings history and earnings-related data on Core-Mark Holding (CORE) click here.

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