Core-Mark Q2 sales rise on non-cigarette volume; shareholder advocate probes PFG acquisition

Core-Mark Holding Co. Inc. (Nasdaq: CORE), a broad-line supplier to convenience stores, announced improved financial results for the second quarter, ended June 30, 2021.

Core-Mark's said net sales increased 5.4% in the second quarter to $4.5 billion, compared wit $4.26 billion for the same period in 2020, driven primarily by growth in non-cigarette sales to existing customers; cigarette price inflation offset by a decline in cigarette carton sale

“Our top-line growth and margin expansion have benefited from increases in our independent store count, and the continued recovery of our non-cigarette sales which finished the quarter 16% above 2020 and 6% above 2019," said Scott E. McPherson, Core-Mark president and chief executive.

KEY POINTS

• Net sales increased 5.4% to $4.5 billion, non-cigarette sales increased by 16.4% to $1.6 billion.
• Gross profit increased 14.4% to $243.7 million.
• Diluted EPS of $0.34 per share, net income of $15.5 million.
• Adjusted EBITDA increased 9% to $57.3 million.
• Announced merger agreement with Performance Food Group Co.
• Announced $0.13 dividend payable Sep. 24, 2021.

Commentary on PFG transaction

As announced on May 18, Performance Food Group Co. intends to acquire Core-Mark in a stock and cash transaction. Due to the pending acquisition,

Core-Mark will hold a special meeting of its stockholders in connection with the merger agreement in virtual form only at virtualshareholdermeeting.com/CORE2021SM on Aug. 25 at 9 a.m. CT.

At the special meeting, Core-Mark stockholders will be asked to consider and vote on items including the proposal to adopt the merger agreement.

In related news, Halper Sadeh LLP, an investor rights law firm, said it is investigating Core-Mark concerning potential violations of the federal securities laws and/or breaches of fiduciary duties relating to its sale to PFG.

Under terms of the merger, Core-Mark shareholders will receive $23.875 a share in cash and 0.44 PFG shares for each Core-Mark share. Upon closing, Core-Mark shareholders will own approximately 13% of the combined company.

Halper Sadeh said it may seek increased consideration and additional disclosures concerning the proposed transaction, among other relief and benefits on behalf of shareholders.