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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-1489747
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
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395 Oyster Point Boulevard, Suite 415
South San Francisco, CA
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94080
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
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ITEM 1.
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FINANCIAL STATEMENTS
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June 30,
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December 31,
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2013
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2012
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Assets
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Current assets:
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Cash and cash equivalents
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$
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20.1
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$
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19.1
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Restricted cash
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11.0
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10.9
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Accounts receivable, net of allowance for doubtful accounts of $9.8 and $10.9
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at June 30, 2013 and December 31, 2012, respectively
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278.4
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228.1
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Other receivables, net
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55.5
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53.8
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Inventories, net (Note 4)
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314.6
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366.4
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Deposits and prepayments
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72.1
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40.3
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Deferred income taxes
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8.2
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8.2
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Total current assets
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759.9
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726.8
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Property and equipment, net
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111.4
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114.7
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Goodwill
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23.0
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22.8
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Other intangible assets, net
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20.0
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21.4
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Other non-current assets, net
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30.8
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33.5
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Total assets
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$
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945.1
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$
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919.2
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Liabilities and Stockholders’ Equity
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Current liabilities:
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Accounts payable
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$
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136.4
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$
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94.4
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Book overdrafts
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29.1
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24.7
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Cigarette and tobacco taxes payable
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155.2
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165.6
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Accrued liabilities
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87.6
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79.5
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Deferred income taxes
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3.3
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3.4
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Total current liabilities
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411.6
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367.6
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Long-term debt (Note 5)
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58.6
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84.7
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Deferred income taxes
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11.1
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11.7
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Other long-term liabilities
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11.7
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12.1
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Claims liabilities, net
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27.3
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28.1
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Pension liabilities
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13.4
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14.8
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Total liabilities
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533.7
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519.0
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Commitments and contingencies (Note 6)
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Stockholders’ equity:
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Common stock, $0.01 par value (50,000,000 shares authorized;12,758,985 and
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12,602,806 shares issued; 11,524,799 and 11,446,229 shares outstanding at
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June 30, 2013 and December 31, 2012, respectively)
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0.1
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0.1
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Additional paid-in capital
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253.2
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249.2
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Treasury stock at cost (1,234,186 and 1,156,577 shares of common stock at
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June 30, 2013 and December 31, 2012, respectively)
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(41.2
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)
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(37.4
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)
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Retained earnings
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207.0
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194.9
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Accumulated other comprehensive loss
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(7.7
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)
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(6.6
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)
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Total stockholders’ equity
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411.4
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400.2
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Total liabilities and stockholders’ equity
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$
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945.1
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$
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919.2
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Three Months Ended
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Six Months Ended
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||||||||||||
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June 30,
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June 30,
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||||||||||||
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2013
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2012
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2013
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2012
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Net sales
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$
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2,509.9
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$
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2,287.3
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$
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4,655.6
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$
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4,388.0
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Cost of goods sold
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2,372.9
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2,164.7
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4,402.6
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4,155.2
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Gross profit
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137.0
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122.6
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253.0
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232.8
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Warehousing and distribution expenses
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72.8
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66.2
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140.5
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129.6
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Selling, general and administrative expenses
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42.9
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37.8
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85.4
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77.5
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Amortization of intangible assets
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0.7
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0.8
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1.4
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1.7
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Total operating expenses
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116.4
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104.8
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227.3
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208.8
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Income from operations
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20.6
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17.8
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25.7
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24.0
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Interest expense
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(0.8
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(0.6
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(1.5
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(1.2
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Interest income
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0.1
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0.1
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0.2
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0.2
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Foreign currency transaction losses, net
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(0.1
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(0.2
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(0.5
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(0.1
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Income before income taxes
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19.8
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17.1
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23.9
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22.9
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Provision for income taxes (Note 7)
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(8.1
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(7.0
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(9.6
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(9.2
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Net income
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$
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11.7
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$
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10.1
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$
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14.3
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$
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13.7
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Basic net income per common share (Note 9)
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$
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1.02
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$
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0.89
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$
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1.24
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$
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1.20
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Diluted net income per common share (Note 9)
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$
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1.01
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$
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0.87
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$
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1.23
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$
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1.18
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Basic weighted-average shares (Note 9)
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11.5
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11.4
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11.5
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11.4
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Diluted weighted-average shares (Note 9)
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11.6
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11.6
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11.6
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11.6
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Dividends declared and paid per common share (Note 11)
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$
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0.19
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$
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0.17
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$
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0.19
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$
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0.34
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Three Months Ended
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Six Months Ended
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||||||||||||
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June 30,
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June 30,
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||||||||||||
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2013
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2012
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2013
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2012
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Net income
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$
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11.7
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$
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10.1
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$
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14.3
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$
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13.7
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Other comprehensive income (loss), net of tax:
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Minimum pension liability adjustment
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0.1
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—
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0.2
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0.1
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Foreign currency translation adjustment losses
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(0.8
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(0.3
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(1.3
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—
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Total other comprehensive (loss) income, net of tax
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(0.7
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)
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(0.3
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)
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(1.1
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0.1
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Comprehensive income
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$
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11.0
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$
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9.8
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$
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13.2
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$
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13.8
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Six Months Ended
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||||||
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June 30,
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||||||
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2013
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2012
|
||||
Cash flows from operating activities:
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Net income
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$
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14.3
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$
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13.7
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Adjustments to reconcile net income to net cash provided by operating activities:
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LIFO and inventory provisions
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6.6
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7.0
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Amortization of debt issuance costs
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0.2
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0.2
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Stock-based compensation expense
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2.7
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2.7
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Bad debt expense, net
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0.4
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0.6
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Depreciation and amortization
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13.4
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12.7
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Foreign currency transaction losses, net
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0.5
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0.1
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Changes in operating assets and liabilities:
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||||
Accounts receivable, net
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(51.6
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)
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(35.4
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)
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Other receivables, net
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(2.0
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)
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(8.0
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)
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Inventories, net
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42.4
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68.9
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Deposits, prepayments and other non-current assets
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(31.2
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)
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(11.0
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)
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Accounts payable
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42.9
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17.9
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Cigarette and tobacco taxes payable
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(8.2
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)
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(28.1
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)
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Pension, claims, accrued and other long-term liabilities
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5.4
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(3.5
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)
|
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Net cash provided by operating activities
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35.8
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37.8
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Cash flows from investing activities:
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Change in restricted cash
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(0.7
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)
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2.1
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Additions to property and equipment, net
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(6.7
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)
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(13.2
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)
|
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Proceeds from sale of fixed assets
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—
|
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0.2
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Net cash used in investing activities
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(7.4
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)
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(10.9
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)
|
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Cash flows from financing activities:
|
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||||
Repayments under revolving credit facility, net
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(26.3
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)
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(14.3
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)
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Principal payments under capital lease obligations
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(0.5
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)
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(0.2
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)
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Dividends paid
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(2.2
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)
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(3.9
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)
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Payments of financing costs
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(0.3
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)
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—
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Repurchases of common stock
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(3.8
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)
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(0.7
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)
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Proceeds from exercise of common stock options
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2.0
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1.9
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Tax withholdings related to net share settlements of restricted stock units
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(2.1
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)
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(0.9
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)
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Excess tax deductions associated with stock-based compensation
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1.4
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0.5
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Increase (decrease) in book overdrafts
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4.4
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(6.9
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)
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Net cash used in financing activities
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(27.4
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)
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(24.5
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)
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Effects of changes in foreign exchange rates
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—
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(0.2
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)
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Increase in cash and cash equivalents
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1.0
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2.2
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Cash and cash equivalents, beginning of period
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19.1
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15.2
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Cash and cash equivalents, end of period
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$
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20.1
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$
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17.4
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Supplemental disclosures:
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Cash paid during the period for:
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Income taxes paid, net of refunds
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$
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11.8
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$
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4.8
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Interest paid
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$
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0.8
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$
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0.9
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1.
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Summary of Company Information
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2.
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Basis of Presentation and Principles of Consolidation
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December 17, 2012
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Cash
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$
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0.3
|
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Accounts receivable
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21.2
|
|
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Other receivables
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3.8
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Inventory
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20.3
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Prepaid expenses / other assets
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2.6
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Property, plant and equipment
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5.3
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Intangible assets
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2.6
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Goodwill
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6.8
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Net deferred tax liabilities
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(1.3
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)
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Capital lease liability
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(10.9
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)
|
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Other liabilities
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(9.9
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)
|
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Total consideration
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$
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40.8
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|
4.
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Inventories
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June 30,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Inventories at FIFO, net of reserves
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$
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411.5
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$
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456.7
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Less: LIFO reserve
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(96.9
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)
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(90.3
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)
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Total inventories at LIFO, net of reserves
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$
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314.6
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$
|
366.4
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June 30,
|
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December 31,
|
||||
|
2013
|
|
2012
|
||||
Amounts borrowed (Credit Facility)
|
$
|
47.0
|
|
|
$
|
73.3
|
|
Obligations under capital leases
|
11.6
|
|
|
11.4
|
|
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Total long-term debt
|
$
|
58.6
|
|
|
$
|
84.7
|
|
|
June 30,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Amounts borrowed
|
$
|
47.0
|
|
|
$
|
73.3
|
|
Outstanding letters of credit
|
$
|
21.9
|
|
|
$
|
19.8
|
|
Amounts available to borrow
(1)
|
$
|
120.9
|
|
|
$
|
97.7
|
|
(1)
|
Excluding $
100 million
expansion feature.
|
6.
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Contingencies
|
7.
|
Income Taxes
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8.
|
Employee Benefit Plans
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
PENSION BENEFITS
|
|
|
|
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|
||||||||
Interest cost
|
$
|
0.4
|
|
|
$
|
0.4
|
|
|
$
|
0.8
|
|
|
$
|
0.8
|
|
Expected return on plan assets
|
(0.6
|
)
|
|
(0.5
|
)
|
|
(1.2
|
)
|
|
(1.0
|
)
|
||||
Amortization of net actuarial loss
|
0.2
|
|
|
0.1
|
|
|
0.3
|
|
|
0.2
|
|
||||
Net periodic benefit cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
OTHER POST-RETIREMENT BENEFITS
|
|
|
|
|
|
|
|
||||||||
Interest cost
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Amortization of prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
||||
Net periodic other benefit cost
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
9.
|
Earnings Per Share
|
|
Three Months Ended June 30,
|
||||||||||||||||||||
|
2013
|
|
2012
|
||||||||||||||||||
|
Net Income
|
|
Weighted-Average Shares Outstanding
|
|
Net Income Per Common Share
|
|
Net Income
|
|
Weighted-Average Shares Outstanding
|
|
Net Income Per Common Share
|
||||||||||
Basic EPS
|
$
|
11.7
|
|
|
11.5
|
|
|
$
|
1.02
|
|
|
$
|
10.1
|
|
|
11.4
|
|
|
$
|
0.89
|
|
Effect of dilutive
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Restricted stock units
|
|
|
—
|
|
|
—
|
|
|
|
|
0.1
|
|
|
(0.01
|
)
|
||||||
Stock options
|
|
|
0.1
|
|
|
(0.01
|
)
|
|
|
|
0.1
|
|
|
(0.01
|
)
|
||||||
Diluted EPS
|
$
|
11.7
|
|
|
11.6
|
|
|
$
|
1.01
|
|
|
$
|
10.1
|
|
|
11.6
|
|
|
$
|
0.87
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
2013
|
|
2012
|
||||||||||||||||||
|
Net Income
|
|
Weighted-Average Shares Outstanding
|
|
Net Income Per Common Share
|
|
Net Income
|
|
Weighted-Average Shares Outstanding
|
|
Net Income Per Common Share
|
||||||||||
Basic EPS
|
$
|
14.3
|
|
|
11.5
|
|
|
$
|
1.24
|
|
|
$
|
13.7
|
|
|
11.4
|
|
|
$
|
1.20
|
|
Effect of dilutive common share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Restricted stock units
|
|
|
—
|
|
|
—
|
|
|
|
|
0.1
|
|
|
(0.01
|
)
|
||||||
Stock options
|
|
|
0.1
|
|
|
(0.01
|
)
|
|
|
|
0.1
|
|
|
(0.01
|
)
|
||||||
Diluted EPS
|
$
|
14.3
|
|
|
11.6
|
|
|
$
|
1.23
|
|
|
$
|
13.7
|
|
|
11.6
|
|
|
$
|
1.18
|
|
10.
|
Stock-based Compensation Plans
|
11.
|
Stockholders' Equity
|
Declaration Date
|
|
Dividend Per Share
|
|
Record Date
|
|
Total Cash Payment Amount
|
|
Payment Date
|
May 2, 2013
|
|
$0.19
|
|
May 24, 2013
|
|
$2.2
|
|
June 17, 2013
|
August 1, 2013
|
|
$0.19
|
|
August 23, 2013
|
|
NA
(1)
|
|
September 16, 2013
|
(1)
|
Amount will be determined based on common stock outstanding as of record date.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|||||||
Number of shares repurchased
|
5,502
|
|
|
—
|
|
|
77,609
|
|
|
17,800
|
|
|||
Average price per share
|
$
|
57.48
|
|
|
NA
|
|
|
$
|
49.56
|
|
|
$
|
39.50
|
|
Total repurchase costs
|
$
|
0.3
|
|
|
—
|
|
|
$
|
3.8
|
|
|
$
|
0.7
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
2,218.7
|
|
|
$
|
1,984.4
|
|
|
$
|
4,124.3
|
|
|
$
|
3,802.9
|
|
Canada
|
281.3
|
|
|
295.2
|
|
|
513.5
|
|
|
569.8
|
|
||||
Corporate
(1)
|
9.9
|
|
|
7.7
|
|
|
17.8
|
|
|
15.3
|
|
||||
Total
|
$
|
2,509.9
|
|
|
$
|
2,287.3
|
|
|
$
|
4,655.6
|
|
|
$
|
4,388.0
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
18.2
|
|
|
$
|
15.5
|
|
|
$
|
21.9
|
|
|
$
|
19.0
|
|
Canada
|
0.2
|
|
|
0.7
|
|
|
(0.1
|
)
|
|
0.9
|
|
||||
Corporate
(1)
|
1.4
|
|
|
0.9
|
|
|
2.1
|
|
|
3.0
|
|
||||
Total
|
$
|
19.8
|
|
|
$
|
17.1
|
|
|
$
|
23.9
|
|
|
$
|
22.9
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
7.5
|
|
|
$
|
7.0
|
|
|
$
|
14.4
|
|
|
$
|
13.4
|
|
Canada
|
0.1
|
|
|
0.2
|
|
|
0.4
|
|
|
0.4
|
|
||||
Corporate
(1)
|
(6.8
|
)
|
|
(6.6
|
)
|
|
(13.3
|
)
|
|
(12.6
|
)
|
||||
Total
|
$
|
0.8
|
|
|
$
|
0.6
|
|
|
$
|
1.5
|
|
|
$
|
1.2
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
4.9
|
|
|
$
|
4.4
|
|
|
$
|
9.8
|
|
|
$
|
8.7
|
|
Canada
|
0.7
|
|
|
0.8
|
|
|
1.4
|
|
|
1.5
|
|
||||
Corporate
(1)
|
1.2
|
|
|
1.2
|
|
|
2.2
|
|
|
2.5
|
|
||||
Total
|
$
|
6.8
|
|
|
$
|
6.4
|
|
|
$
|
13.4
|
|
|
$
|
12.7
|
|
|
June 30,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Identifiable assets:
|
|
|
|
||||
United States
|
$
|
843.1
|
|
|
$
|
821.7
|
|
Canada
|
102.0
|
|
|
97.5
|
|
||
Total
|
$
|
945.1
|
|
|
$
|
919.2
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
Product Category
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Cigarettes
|
$
|
1,702.9
|
|
|
$
|
1,577.3
|
|
|
$
|
3,166.3
|
|
|
$
|
3,029.7
|
|
Food
|
343.9
|
|
|
304.1
|
|
|
629.9
|
|
|
575.5
|
|
||||
Candy
|
139.3
|
|
|
128.4
|
|
|
263.2
|
|
|
250.2
|
|
||||
Other tobacco products
|
202.0
|
|
|
173.7
|
|
|
375.6
|
|
|
337.1
|
|
||||
Health, beauty & general
|
81.6
|
|
|
67.0
|
|
|
153.6
|
|
|
131.7
|
|
||||
Beverages
|
39.4
|
|
|
36.1
|
|
|
66.2
|
|
|
62.5
|
|
||||
Equipment/other
|
0.8
|
|
|
0.7
|
|
|
0.8
|
|
|
1.3
|
|
||||
Total food/non-food products
|
$
|
807.0
|
|
|
$
|
710.0
|
|
|
$
|
1,489.3
|
|
|
$
|
1,358.3
|
|
Total net sales
|
$
|
2,509.9
|
|
|
$
|
2,287.3
|
|
|
$
|
4,655.6
|
|
|
$
|
4,388.0
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
(1)
|
Remaining gross profit and remaining gross profit margin are non-GAAP financial measures which we provide to segregate the effects of cigarette inventory holding gains, LIFO expense and other items that significantly affect the comparability of gross profit and related margins (see the calculation of remaining gross profit and remaining gross profit margin in “Comparison of Sales and Gross Profit by Product Category” below).
|
(2)
|
Adjusted EBITDA is a non-GAAP financial measure and should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with generally accepted accounting principles in the United States of America (“GAAP”) (see the calculation of Adjusted EBITDA in “Liquidity and Capital Resources” below).
|
•
|
On May 7, 2013, we signed a three year distribution agreement with Turkey Hill, a subsidiary of the Kroger Co. (“Kroger”) and the largest of the Kroger's convenience divisions, to service their 268 convenience stores across Pennsylvania, Ohio and Indiana. In addition to the Turkey Hill stores, we service over 400 Kroger convenience locations.
|
•
|
On
December 17, 2012
, we acquired Davenport, a convenience wholesaler based in North Carolina, which services customers in the
eight
states of North Carolina, South Carolina, Georgia, Maryland, Ohio, Kentucky, West Virginia and Virginia. This acquisition increased Core-Mark's market presence in the Southeastern United States and further supported our ability to cost effectively service national and regional retailers (
see
Note 3 - Acquisition
to our interim consolidated financial statements).
|
•
|
We continue to add breadth to our proprietary “Fresh and Local™”program by offering new fresh item solutions and we anticipate positive sales and margin growth in
2013
for “Fresh” by improving product assortment, in-store marketing efforts and spoils management. As of
June 30, 2013
, there were over 9,400 participating stores.
|
•
|
VCI brings efficiency to the supply chain, lowers our customers' investment in inventories and greatly reduces in-store out of stocks. In 2012, we developed an analytical tool primarily for independent retailers which enables our sales force to individualize the VCI benefits for each potential participant. We believe this will contribute to greater acceptance and participation in our VCI program which enables a multiple deliveries per week platform allowing us to further expand our Fresh initiative.
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||||||||
|
|
|
|
June 30, 2013
|
|
June 30, 2012
|
||||||||||||||||||
|
|
Increase (Decrease)
|
|
Amounts
|
|
% of Net sales
|
|
% of Net sales, less excise taxes
|
|
Amounts
|
|
% of Net sales
|
|
% of Net sales, less excise taxes
|
||||||||||
Net sales
|
|
$
|
222.6
|
|
|
$
|
2,509.9
|
|
|
100.0
|
%
|
|
—
|
%
|
|
$
|
2,287.3
|
|
|
100.0
|
%
|
|
—
|
%
|
Net sales — Cigarettes
|
|
125.6
|
|
|
1,702.9
|
|
|
67.8
|
|
|
62.2
|
|
|
1,577.3
|
|
|
69.0
|
|
|
62.9
|
|
|||
Net sales — Food/non-food
|
|
97.0
|
|
|
807.0
|
|
|
32.2
|
|
|
37.8
|
|
|
710.0
|
|
|
31.0
|
|
|
37.1
|
|
|||
Net sales, less excise taxes
(2)
|
|
210.5
|
|
|
1,986.3
|
|
|
79.1
|
|
|
100.0
|
|
|
1,775.8
|
|
|
77.6
|
|
|
100.0
|
|
|||
Gross profit
(3)
|
|
14.4
|
|
|
137.0
|
|
|
5.5
|
|
|
6.9
|
|
|
122.6
|
|
|
5.4
|
|
|
6.9
|
|
|||
Warehousing and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
distribution expenses
|
|
6.6
|
|
|
72.8
|
|
|
2.9
|
|
|
3.7
|
|
|
66.2
|
|
|
2.9
|
|
|
3.7
|
|
|||
Selling, general and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
administrative expenses
|
|
5.1
|
|
|
42.9
|
|
|
1.7
|
|
|
2.2
|
|
|
37.8
|
|
|
1.7
|
|
|
2.1
|
|
|||
Amortization of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
intangible assets
|
|
(0.1
|
)
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|||
Income from operations
|
|
2.8
|
|
|
20.6
|
|
|
0.8
|
|
|
1.0
|
|
|
17.8
|
|
|
0.8
|
|
|
1.0
|
|
|||
Interest expense
|
|
0.2
|
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|||
Interest income
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|||
Foreign currency transaction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
losses, net
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|||
Income before taxes
|
|
2.7
|
|
|
19.8
|
|
|
0.8
|
|
|
1.0
|
|
|
17.1
|
|
|
0.7
|
|
|
1.0
|
|
|||
Net income
|
|
1.6
|
|
|
11.7
|
|
|
0.5
|
|
|
0.6
|
|
|
10.1
|
|
|
0.4
|
|
|
0.6
|
|
|||
Adjusted EBITDA
(4)
|
|
2.7
|
|
|
32.5
|
|
|
1.3
|
|
|
1.6
|
|
|
29.8
|
|
|
1.3
|
|
|
1.7
|
|
(1)
|
Amounts and percentages have been rounded for presentation purposes and might differ from unrounded results.
|
(2)
|
Net sales, less excise taxes is a non-GAAP financial measure which we provide to separate the increase in sales due to product sales growth and increases in state, local and provincial excise taxes which we are responsible for collecting and remitting. Federal excise taxes are levied on the manufacturers who pass the taxes on to us as part of the product cost and thus are not a component of our excise taxes. Although increases in cigarette excise taxes result in higher net sales, our overall gross profit percentage may be reduced; however we do not expect increases in excise taxes to negatively impact gross profit per carton (
see Comparison of Sales and Gross Profit by Product Category, page
23
).
|
(3)
|
Gross profit may not be comparable to those of other entities because warehousing and distribution expenses are not included as a component of our cost of goods sold.
|
(4)
|
Adjusted EBITDA is a non-GAAP financial measure and should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP (see calculation of Adjusted EBITDA in “Liquidity and Capital Resources”).
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
June 30,
|
|
|
|
|
|||||||||
|
2013
|
|
2012
|
|
Increase / (Decrease)
|
|||||||||
Product Category
|
Net Sales
|
|
Net Sales
|
|
Amounts
|
|
Percentage
|
|||||||
Food
|
$
|
343.9
|
|
|
$
|
304.1
|
|
|
$
|
39.8
|
|
|
13.1
|
%
|
Candy
|
139.3
|
|
|
128.4
|
|
|
10.9
|
|
|
8.5
|
%
|
|||
Other tobacco products
|
202.0
|
|
|
173.7
|
|
|
28.3
|
|
|
16.3
|
%
|
|||
Health, beauty & general
|
81.6
|
|
|
67.0
|
|
|
14.6
|
|
|
21.8
|
%
|
|||
Beverages
|
39.4
|
|
|
36.1
|
|
|
3.3
|
|
|
9.1
|
%
|
|||
Equipment/other
|
0.8
|
|
|
0.7
|
|
|
0.1
|
|
|
14.3
|
%
|
|||
Total Food/Non-food Products
|
$
|
807.0
|
|
|
$
|
710.0
|
|
|
$
|
97.0
|
|
|
13.7
|
%
|
(1)
|
Amounts and percentages have been rounded for presentation purposes and might differ from unrounded results.
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||||||||
|
|
|
June 30, 2013
|
|
June 30, 2012
|
||||||||||||||||||
|
Increase (Decrease)
|
|
Amounts
|
|
% of Net sales
|
|
% of Net sales, less excise taxes
|
|
Amounts
|
|
% of Net sales
|
|
% of Net sales, less excise taxes
|
||||||||||
Net sales
|
$
|
222.6
|
|
|
$
|
2,509.9
|
|
|
100.0
|
%
|
|
—
|
|
|
$
|
2,287.3
|
|
|
100.0
|
%
|
|
—
|
|
Net sales, less excise taxes
(2)
|
210.5
|
|
|
1,986.3
|
|
|
79.1
|
|
|
100.0
|
%
|
|
1,775.8
|
|
|
77.6
|
|
|
100.0
|
%
|
|||
Components of gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cigarette inventory holding gains
(3)
|
$
|
0.7
|
|
|
$
|
3.9
|
|
|
0.16
|
%
|
|
0.20
|
%
|
|
$
|
3.2
|
|
|
0.14
|
%
|
|
0.18
|
%
|
LIFO expense
|
0.6
|
|
|
(3.7
|
)
|
|
(0.15
|
)
|
|
(0.19
|
)
|
|
(4.3
|
)
|
|
(0.19
|
)
|
|
(0.25
|
)
|
|||
Remaining gross profit
(4)
|
13.1
|
|
|
136.8
|
|
|
5.45
|
|
|
6.89
|
|
|
123.7
|
|
|
5.41
|
|
|
6.97
|
|
|||
Gross profit
|
$
|
14.4
|
|
|
$
|
137.0
|
|
|
5.46
|
%
|
|
6.90
|
%
|
|
$
|
122.6
|
|
|
5.36
|
%
|
|
6.90
|
%
|
(1)
|
Amounts and percentages have been rounded for presentation purposes and might differ from unrounded results.
|
(2)
|
Net sales, less excise taxes is a non-GAAP financial measure which we provide to separate the increase in sales due to product sales growth and increases in state, local and provincial excise taxes which we are responsible for collecting and remitting. Federal excise taxes are levied on the manufacturers who pass the tax on to us as part of the product cost and thus are not a component of our excise taxes. Although increases in cigarette excise taxes result in higher net sales, our overall gross profit percentage may be reduced; however we do not expect increases in excise taxes to negatively impact gross profit per carton (
see Comparison of Sales and Gross Profit by Product Category, page
23
).
|
(3)
|
The amount of cigarette inventory holding gains attributable to both the U.S. and Canada were $
3.8 million
and $
0.1 million
, respectively, for the
three months
ended
June 30, 2013
, compared to $
3.1 million
and $
0.1 million
, respectively, for the same period in
2012
.
|
(4)
|
Remaining gross profit is a non-GAAP financial measure which we provide to segregate the effects of LIFO expense, cigarette inventory holding gains and other items that significantly affect the comparability of gross profit.
|
|
|
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
|
|
|
June 30, 2013
|
|
June 30, 2012
|
||||||||||||||||||
|
|
Increase (Decrease)
|
|
Amounts
|
|
% of Net sales
|
|
% of Net sales, less excise taxes
|
|
Amounts
|
|
% of Net sales
|
|
% of Net sales, less excise taxes
|
||||||||||
Net sales
|
|
$
|
267.6
|
|
|
$
|
4,655.6
|
|
|
100.0
|
%
|
|
—
|
|
|
$
|
4,388.0
|
|
|
100.0
|
%
|
|
—
|
%
|
Net sales — Cigarettes
|
|
136.6
|
|
|
3,166.3
|
|
|
68.0
|
|
|
62.4
|
|
|
3,029.7
|
|
|
69.0
|
|
|
63.0
|
|
|||
Net sales — Food/non-food
|
|
131.0
|
|
|
1,489.3
|
|
|
32.0
|
|
|
37.6
|
|
|
1,358.3
|
|
|
31.0
|
|
|
37.0
|
|
|||
Net sales, less excise taxes
(2)
|
|
284.2
|
|
|
3,686.4
|
|
|
79.2
|
|
|
100.0
|
|
|
3,402.2
|
|
|
77.5
|
|
|
100.0
|
|
|||
Gross profit
(3)
|
|
20.2
|
|
|
253.0
|
|
|
5.4
|
|
|
6.9
|
|
|
232.8
|
|
|
5.3
|
|
|
6.8
|
|
|||
Warehousing and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
distribution expenses
|
|
10.9
|
|
|
140.5
|
|
|
3.0
|
|
|
3.8
|
|
|
129.6
|
|
|
3.0
|
|
|
3.8
|
|
|||
Selling, general and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
administrative expenses
|
|
7.9
|
|
|
85.4
|
|
|
1.8
|
|
|
2.3
|
|
|
77.5
|
|
|
1.8
|
|
|
2.3
|
|
|||
Amortization of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
intangible assets
|
|
(0.3
|
)
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|||
Income from operations
|
|
1.7
|
|
|
25.7
|
|
|
0.6
|
|
|
0.7
|
|
|
24.0
|
|
|
0.5
|
|
|
0.7
|
|
|||
Interest expense
|
|
0.3
|
|
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
(1.2
|
)
|
|
—
|
|
|
—
|
|
|||
Interest income
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|||
Foreign currency transaction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
losses, net
|
|
0.4
|
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|||
Income before taxes
|
|
1.0
|
|
|
23.9
|
|
|
0.5
|
|
|
0.6
|
|
|
22.9
|
|
|
0.5
|
|
|
0.7
|
|
|||
Net income
|
|
0.6
|
|
|
14.3
|
|
|
0.3
|
|
|
0.4
|
|
|
13.7
|
|
|
0.3
|
|
|
0.4
|
|
|||
Adjusted EBITDA
(4)
|
|
1.8
|
|
|
48.4
|
|
|
1.0
|
|
|
1.3
|
|
|
46.6
|
|
|
1.1
|
|
|
1.4
|
|
(1)
|
Amounts and percentages have been rounded for presentation purposes and might differ from unrounded results.
|
(2)
|
Net sales, less excise taxes is a non-GAAP financial measure which we provide to separate the increase in sales due to product sales growth and increases in state, local and provincial excise taxes which we are responsible for collecting and remitting. Federal excise taxes are levied on the manufacturers who pass the taxes on to us as part of the product cost and thus are not a component of our excise taxes. Although increases in cigarette excise taxes result in higher net sales, our overall gross profit percentage may be reduced; however we do not expect increases in excise taxes to negatively impact gross profit per carton (
see Comparison of Sales and Gross Profit by Product Category, page
23
).
|
(3)
|
Gross profit may not be comparable to those of other entities because warehousing and distribution expenses are not included as a component of our cost of goods sold.
|
(4)
|
Adjusted EBITDA is a non-GAAP financial measure and should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP (see calculation of Adjusted EBITDA in “Liquidity and Capital Resources”).
|
|
Six Months Ended
|
|
|
|
|
|||||||||
|
June 30,
|
|
|
|
|
|||||||||
|
2013
|
|
2012
|
|
Increase / (Decrease)
|
|||||||||
Product Category
|
Net Sales
|
|
Net Sales
|
|
Amounts
|
|
Percentage
|
|||||||
Food
|
$
|
629.9
|
|
|
$
|
575.5
|
|
|
$
|
54.4
|
|
|
9.5
|
%
|
Candy
|
263.2
|
|
|
250.2
|
|
|
13.0
|
|
|
5.2
|
%
|
|||
Other tobacco products
|
375.6
|
|
|
337.1
|
|
|
38.5
|
|
|
11.4
|
%
|
|||
Health, beauty & general
|
153.6
|
|
|
131.7
|
|
|
21.9
|
|
|
16.6
|
%
|
|||
Beverages
|
66.2
|
|
|
62.5
|
|
|
3.7
|
|
|
5.9
|
%
|
|||
Equipment/other
|
0.8
|
|
|
1.3
|
|
|
(0.5
|
)
|
|
(38.5
|
)%
|
|||
Total Food/Non-food Products
|
$
|
1,489.3
|
|
|
$
|
1,358.3
|
|
|
$
|
131.0
|
|
|
9.6
|
%
|
(1)
|
Amounts and percentages have been rounded for presentation purposes and might differ from unrounded results.
|
|
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
|
|
|
June 30, 2013
|
|
June 30, 2012
|
||||||||||||||||||
|
Increase (Decrease)
|
|
Amounts
|
|
% of Net sales
|
|
% of Net sales, less excise taxes
|
|
Amounts
|
|
% of Net sales
|
|
% of Net sales, less excise taxes
|
||||||||||
Net sales
|
$
|
267.6
|
|
|
$
|
4,655.6
|
|
|
100.0
|
%
|
|
—
|
|
|
$
|
4,388.0
|
|
|
100.0
|
%
|
|
—
|
|
Net sales, less excise taxes
(2)
|
284.2
|
|
|
3,686.4
|
|
|
79.2
|
|
|
100.0
|
%
|
|
3,402.2
|
|
|
77.5
|
|
|
100.0
|
%
|
|||
Components of gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cigarette inventory holding gains
(3)
|
$
|
0.4
|
|
|
$
|
4.7
|
|
|
0.09
|
%
|
|
0.13
|
%
|
|
$
|
4.3
|
|
|
0.10
|
%
|
|
0.13
|
%
|
LIFO expense
|
0.6
|
|
|
(6.6
|
)
|
|
(0.14
|
)
|
|
(0.18
|
)
|
|
(7.2
|
)
|
|
(0.16
|
)
|
|
(0.21
|
)
|
|||
Remaining gross profit
(4)
|
19.2
|
|
|
254.9
|
|
|
5.48
|
|
|
6.91
|
|
|
235.7
|
|
|
5.37
|
|
|
6.92
|
|
|||
Gross profit
|
$
|
20.2
|
|
|
$
|
253.0
|
|
|
5.43
|
%
|
|
6.86
|
%
|
|
$
|
232.8
|
|
|
5.31
|
%
|
|
6.84
|
%
|
(1)
|
Amounts and percentages have been rounded for presentation purposes and might differ from unrounded results.
|
(2)
|
Net sales, less excise taxes is a non-GAAP financial measure which we provide to separate the increase in sales due to product sales growth and increases in state, local and provincial excise taxes which we are responsible for collecting and remitting. Federal excise taxes are levied on the manufacturers who pass the tax on to us as part of the product cost and thus are not a component of our excise taxes. Although increases in cigarette excise taxes result in higher net sales, our overall gross profit percentage may be reduced; however we do not expect increases in excise taxes to negatively impact gross profit per carton (
see Comparison of Sales and Gross Profit by Product Category, page
23
).
|
(3)
|
The amount of cigarette inventory holding gains attributable to both the U.S. and Canada were $
4.2 million
and $
0.5 million
, respectively, for the
six months
ended
June 30, 2013
, compared to $
3.6 million
and $
0.7 million
, respectively, for the same period in
2012
.
|
(4)
|
Remaining gross profit is a non-GAAP financial measure which we provide to segregate the effects of LIFO expense, cigarette inventory holding gains and other items that significantly affect the comparability of gross profit.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Cigarettes
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
1,702.9
|
|
|
$
|
1,577.3
|
|
|
$
|
3,166.3
|
|
|
$
|
3,029.7
|
|
Excise taxes in sales
(2)
|
468.0
|
|
|
459.7
|
|
|
864.8
|
|
|
885.5
|
|
||||
Net sales, less excise taxes
(3)
|
1,234.9
|
|
|
1,117.6
|
|
|
2,301.5
|
|
|
2,144.2
|
|
||||
LIFO expense
|
2.1
|
|
|
2.4
|
|
|
3.3
|
|
|
3.7
|
|
||||
Gross profit
(4)
|
41.7
|
|
|
39.5
|
|
|
76.7
|
|
|
74.6
|
|
||||
Gross profit %
|
2.45
|
%
|
|
2.51
|
%
|
|
2.42
|
%
|
|
2.46
|
%
|
||||
Gross profit % less excise taxes
|
3.38
|
%
|
|
3.53
|
%
|
|
3.33
|
%
|
|
3.48
|
%
|
||||
Remaining gross profit
(6)
|
$
|
39.9
|
|
|
$
|
38.8
|
|
|
$
|
75.3
|
|
|
$
|
74.0
|
|
Remaining gross profit %
|
2.34
|
%
|
|
2.46
|
%
|
|
2.38
|
%
|
|
2.44
|
%
|
||||
Remaining gross profit % less excise taxes
|
3.23
|
%
|
|
3.47
|
%
|
|
3.27
|
%
|
|
3.45
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Food/Non-food Products
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
807.0
|
|
|
$
|
710.0
|
|
|
$
|
1,489.3
|
|
|
$
|
1,358.3
|
|
Excise taxes in sales
(2)
|
55.6
|
|
|
51.8
|
|
|
104.4
|
|
|
100.3
|
|
||||
Net sales, less excise taxes
(3)
|
751.4
|
|
|
658.2
|
|
|
1,384.9
|
|
|
1,258.0
|
|
||||
LIFO expense
|
1.6
|
|
|
1.9
|
|
|
3.3
|
|
|
3.5
|
|
||||
Gross profit
(5)
|
95.3
|
|
|
83.1
|
|
|
176.3
|
|
|
158.2
|
|
||||
Gross profit %
|
11.81
|
%
|
|
11.70
|
%
|
|
11.84
|
%
|
|
11.65
|
%
|
||||
Gross profit % less excise taxes
|
12.68
|
%
|
|
12.63
|
%
|
|
12.73
|
%
|
|
12.58
|
%
|
||||
Remaining gross profit
(6)
|
$
|
96.9
|
|
|
$
|
85.0
|
|
|
$
|
179.6
|
|
|
$
|
161.7
|
|
Remaining gross profit %
|
12.01
|
%
|
|
11.97
|
%
|
|
12.06
|
%
|
|
11.90
|
%
|
||||
Remaining gross profit % less excise taxes
|
12.90
|
%
|
|
12.91
|
%
|
|
12.97
|
%
|
|
12.85
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Totals
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
2,509.9
|
|
|
$
|
2,287.3
|
|
|
$
|
4,655.6
|
|
|
$
|
4,388.0
|
|
Excise taxes in sales
(2)
|
523.6
|
|
|
511.5
|
|
|
969.2
|
|
|
985.8
|
|
||||
Net sales, less excise taxes
(3)
|
1,986.3
|
|
|
1,775.8
|
|
|
3,686.4
|
|
|
3,402.2
|
|
||||
LIFO expense
|
3.7
|
|
|
4.3
|
|
|
6.6
|
|
|
7.2
|
|
||||
Gross profit
(4),(5)
|
137.0
|
|
|
122.6
|
|
|
253.0
|
|
|
232.8
|
|
||||
Gross profit %
|
5.46
|
%
|
|
5.36
|
%
|
|
5.43
|
%
|
|
5.31
|
%
|
||||
Gross profit % less excise taxes
|
6.90
|
%
|
|
6.90
|
%
|
|
6.86
|
%
|
|
6.84
|
%
|
||||
Remaining gross profit
(6)
|
$
|
136.8
|
|
|
$
|
123.7
|
|
|
$
|
254.9
|
|
|
$
|
235.7
|
|
Remaining gross profit %
|
5.45
|
%
|
|
5.41
|
%
|
|
5.48
|
%
|
|
5.37
|
%
|
||||
Remaining gross profit % less excise taxes
|
6.89
|
%
|
|
6.97
|
%
|
|
6.91
|
%
|
|
6.92
|
%
|
(1)
|
Amounts and percentages have been rounded for presentation purposes and might differ from unrounded results.
|
(2)
|
Excise taxes included in our net sales consist of state, local and provincial excise taxes which we are responsible for collecting and remitting. Federal excise taxes are levied on the manufacturers who pass the tax on to us as part of the product cost and thus are not a component of our excise taxes. Although increases in cigarette excise taxes result in higher net sales, our overall gross profit percentage may be reduced since gross profit dollars generally remain the same.
|
(3)
|
Net sales less excise taxes is a non-GAAP financial measure which we provide to separate the increase in sales due to product sales growth and increases in excise taxes.
|
(4)
|
Cigarette gross profit includes (i) cigarette inventory holding gains related to manufacturer price increases, (ii) increases in state, local and provincial excise taxes and (iii) LIFO effects. Cigarette inventory holding gains were $
3.9 million
and $
4.7 million
for the three and six months ended June 30, 2013 compared to $
3.2 million
and $
4.3 million
for the same periods of 2012.
|
(5)
|
Food/non-food gross profit includes (i) inventory holding gains related to manufacturer price increases, (ii) increases in state, local and provincial excise taxes and (iii) LIFO effects.
|
(6)
|
Remaining gross profit is a non-GAAP financial measure which we provide to segregate the effects of LIFO expense, cigarette inventory holding gains and other items that significantly affect the comparability of gross profit.
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
|
June 30,
|
|
|
|
June 30,
|
|
|
||||||||||||||
|
2013
|
|
2012
|
|
% Change
|
|
2013
|
|
2012
|
|
% Change
|
||||||||||
Net income
|
$
|
11.7
|
|
|
$
|
10.1
|
|
|
|
|
$
|
14.3
|
|
|
$
|
13.7
|
|
|
|
||
Interest expense, net
(1)
|
0.7
|
|
|
0.5
|
|
|
|
|
1.3
|
|
|
1.0
|
|
|
|
||||||
Provision for income taxes
|
8.1
|
|
|
7.0
|
|
|
|
|
9.6
|
|
|
9.2
|
|
|
|
||||||
Depreciation and amortization
|
6.8
|
|
|
6.4
|
|
|
|
|
13.4
|
|
|
12.7
|
|
|
|
||||||
LIFO expense
|
3.7
|
|
|
4.3
|
|
|
|
|
6.6
|
|
|
7.2
|
|
|
|
||||||
Stock-based compensation expense
|
1.4
|
|
|
1.3
|
|
|
|
|
2.7
|
|
|
2.7
|
|
|
|
||||||
Foreign currency transaction losses, net
|
0.1
|
|
|
0.2
|
|
|
|
|
0.5
|
|
|
0.1
|
|
|
|
||||||
Adjusted EBITDA
|
$
|
32.5
|
|
|
$
|
29.8
|
|
|
9.1
|
%
|
|
$
|
48.4
|
|
|
$
|
46.6
|
|
|
3.9
|
%
|
|
June 30,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Amounts borrowed
|
$
|
47.0
|
|
|
$
|
73.3
|
|
Outstanding letters of credit
|
$
|
21.9
|
|
|
$
|
19.8
|
|
Amounts available to borrow
(1)
|
$
|
120.9
|
|
|
$
|
97.7
|
|
(1)
|
Excluding $
100 million
expansion feature.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Issuer Purchases of Equity Securities
|
|||||||||||||||
|
|
|
|
|
|
|
|
Approximate
|
|||||||
|
|
|
|
|
|
Total Cost
|
|
Dollar Value
|
|||||||
|
|
|
|
|
|
of Shares
|
|
of Shares that
|
|||||||
|
|
|
|
|
|
Purchased as
|
|
May Yet be
|
|||||||
|
|
Total
|
|
|
|
Part of Publicly
|
|
Purchased Under
|
|||||||
|
|
Number
|
|
Average
|
|
Announced Plans
|
|
the Plans
|
|||||||
Calendar month
|
|
of Shares
|
|
Price Paid
|
|
or Programs
|
|
or Programs
|
|||||||
in which purchases were made:
|
|
Repurchased
(1)
|
|
per Share
(2)
|
|
(in millions)
(1)
|
|
(in millions)
(3)
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
April 1, 2013 to April 30, 2013
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.3
|
|
May 1, 2013 to May 31, 2013
|
|
5,502
|
|
|
57.48
|
|
|
0.3
|
|
|
32.0
|
|
|||
June 1, 2013 to June 30, 2013
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32.0
|
|
|||
Total repurchases for the three months ended June 30, 2013
|
|
5,502
|
|
|
$
|
57.48
|
|
|
$
|
0.3
|
|
|
$
|
32.0
|
|
|
|
|
|
|
|
|
|
|
(1)
|
All purchases were made as part of the share repurchase program announced on May 25, 2011.
|
(2)
|
Includes related transaction fees.
|
(3)
|
On
May 23, 2013
, our Board of Directors authorized a
$30 million
increase to our stock repurchase plan. At the time of increase, we had $2.3 million remaining under our stock repurchase plan that was then in place. The timing and amount of the purchases are based on market conditions, our cash and liquidity requirements, relevant securities laws and other factors. The share repurchase program may be discontinued or amended at any time. The program has no expiration date and expires when the amount authorized has been expended or the Board withdraws its authorization.
|
ITEM 6.
|
EXHIBITS
|
|
|
|
|
|
|
CORE-MARK HOLDING COMPANY, INC.
|
|
|
|
|
|
|
Date: August 7, 2013
|
By:
|
/S/ THOMAS B. PERKINS
|
|
|
Name:
|
Thomas B. Perkins
|
|
|
Title:
|
President and Chief Executive Officer
|
|
|
|
|
|
|
CORE-MARK HOLDING COMPANY, INC.
|
|
|
|
|
|
|
Date: August 7, 2013
|
By:
|
/S/ STACY LORETZ-CONGDON
|
|
|
Name:
|
Stacy Loretz-Congdon
|
|
|
Title:
|
Chief Financial Officer
|
A.
|
Borrowers, Administrative Agent and the Lenders have previously entered into that certain Credit Agreement, dated as of October 12, 2005, as amended or otherwise modified prior to the date hereof by that certain First Amendment to Credit Agreement, dated as of December 4, 2007, that certain Second Amendment to Credit Agreement, dated as of March 12, 2008, that certain letter agreement to Credit Agreement, dated January 31, 2009, that certain Third Amendment to Credit Agreement and First Amendment to Pledge and Security Agreement, dated as of February 2, 2010, that certain Fourth Amendment to Credit Agreement, dated as of May 5, 2011, and that certain letter agreement to Credit Agreement and Security Agreement, dated December 21, 2012 (the “
Existing Credit Agreement
”, and as amended by this Amendment and as the same may be further amended, supplemented, amended and restated or otherwise modified from time to time in accordance with its terms, the “
Credit Agreement
”), pursuant to which the Lenders have made certain loans and financial accommodations available to Borrowers. Terms used herein without definition shall have the meanings ascribed to them in the Existing Credit Agreement.
|
B.
|
Borrowers and Administrative Agent have previously entered into that certain Pledge and Security Agreement, dated as of October 12, 2005, as amended by that certain Third Amendment to Credit Agreement and First Amendment to Pledge and Security Agreement, dated as of February 2, 2010, and that certain letter agreement to Credit Agreement and Security Agreement, dated December 21, 2012 (as the same may be
|
C.
|
Borrowers have requested that Administrative Agent and the Lenders amend the Existing Credit Agreement and the Security Agreement and Administrative Agent and the Lenders are willing to amend the Existing Credit Agreement and the Security Agreement pursuant to the terms and conditions set forth herein.
|
D.
|
Each Borrower is entering into this Amendment with the understanding and agreement that, except as specifically provided herein, none of Administrative Agent’s or any Lender’s rights or remedies as set forth in the Existing Credit Agreement and the other Loan Documents are being waived or modified by the terms of this Amendment.
|
1.
|
Amendments to Existing Credit Agreement
.
|
(a)
|
The following definitions are hereby added to Section 1.01 of the Existing Credit Agreement in the appropriate alphabetical order:
|
(b)
|
The definition of “Applicable Rate” in Section 1.01 of the Existing Credit Agreement is hereby amended and restated to read in its entirety as follows:
|
(c)
|
The definition of “Commitment Fee Rate” in Section 1.01 of the Existing Credit Agreement is hereby amended and restated to read in its entirety as follows:
|
Level
|
Line Usage
|
Commitment Fee Rate
|
I
|
Greater than 30%
|
0.25%
|
II
|
Less than or equal to 30%
|
0.375%
|
(d)
|
The definition of “Interest Period” in Section 1.01 of the Existing Credit Agreement is hereby amended and restated to read in its entirety as follows:
|
(e)
|
The definition of “LIBO Rate” in Section 1.01 of the Existing Credit Agreement is hereby amended and restated to read in its entirety as follows:
|
(f)
|
The definition of “Maturity Date” in Section 1.01 of the Existing Credit Agreement is hereby amended and restated to read in its entirety as follows:
|
(g)
|
Clause (e) of the definition of “Permitted Acquisition” in Section 1.01 of the Existing Credit Agreement is hereby amended and restated in its entirety as follows:
|
(h)
|
Section 5.01(g) of the Existing Credit Agreement is hereby amended and restated to read in its entirety as follows:
|
(i)
|
The proviso after Section 5.01(h)(iv) of the Existing Credit Agreement is hereby amended and restated to read in its entirety as follows:
|
(j)
|
Section 6.08(a)(iv) of the Existing Credit Agreement is hereby amended and restated to read in its entirety as follows:
|
(k)
|
Section 6.08(a)(v) of the Existing Credit Agreement is hereby amended and restated to read in its entirety as follows:
|
(l)
|
Section 6.13 of the Existing Credit Agreement is hereby amended and restated to read in its entirety as follows:
|
(m)
|
The first sentence of Section 10.01 of the Existing Credit Agreement is hereby amended and restated to read in its entirety as follows:
|
(n)
|
Schedule 3.05(a) and Schedule 3.10 to the Existing Credit Agreement are hereby amended and replaced in their entirety with the corresponding schedules attached hereto as Annex A.
|
2.
|
Amendments to Security Agreement
.
|
(a)
|
The lead in to Section 2.1 of the Security Agreement (up to clause (i) thereof) is hereby amended and restated to read in its entirety as follows:
|
(b)
|
Section 7.3(b) of the Security Agreement is hereby amended and restated to read in its entirety as follows:
|
(c)
|
The first sentence of Section 7.3(c) of the Security Agreement is hereby amended and restated to read in its entirety as follows:
|
3.
|
Conditions Precedent to Effectiveness of this Amendment
. This Amendment and the amendments to the Existing Credit Agreement and the Security Agreement contained herein shall become effective, and shall become part of the Credit Agreement and Security Agreement, as applicable, on the date (the “
Fifth Amendment Effective Date
”) when each of the following conditions precedent shall have been satisfied in the sole discretion of Administrative Agent or waived by Administrative Agent:
|
a.
|
Amendment
. Administrative Agent shall have received this Amendment fully executed in a sufficient number of counterparts for distribution to all parties.
|
b.
|
Representations and Warranties
. The representations and warranties set forth herein and in the Existing Credit Agreement (other than any such representations or warranties that, by their terms, are specifically made as of a date other than the date hereof) must be true and correct in all material respects, as updated by the schedules attached hereto as Annex A.
|
c.
|
Amendment Fee Letter
. Administrative Agent shall have received an Amendment Fee Letter, in form and substance satisfactory to Administrative Agent, executed by Borrowers (the “
Amendment Fee Letter
”).
|
d.
|
Payment of Fees
. Administrative Agent shall have received from Borrowers all fees due and payable on or before the effective date of this Amendment, including, without limitation all fees payable in connection with this Amendment pursuant to the Amendment Fee Letter.
|
4.
|
Representations and Warranties
. Each Borrower represents and warrants as follows:
|
a.
|
Authority
. Each Borrower has the requisite corporate power and authority to execute and deliver this Amendment, and to perform its obligations hereunder and under the Loan Documents (as amended or modified hereby) to which it is a party. The execution, delivery, and performance by each Borrower of this Amendment have been duly approved by all necessary corporate action, have received all necessary governmental approval, if any, and do not contravene (i) any law or (ii) any contractual restriction binding on such Borrower, except for contraventions of contractual restrictions which would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. No other corporate proceedings by any Borrower are necessary to consummate such transactions.
|
b.
|
Enforceability
. This Amendment has been duly executed and delivered by each Borrower. This Amendment and each Loan Document (as amended or modified hereby) (i) is the legal, valid, and binding obligation of each Borrower, enforceable against each Borrower in accordance with its terms, subject to applicable bankruptcy,
|
c.
|
Representations and Warranties
. The representations and warranties contained in each Loan Document (other than any such representations or warranties that, by their terms, are specifically made as of a date other than the date hereof) are correct in all material respects on and as of the date hereof as though made on and as of the date hereof, as updated by the schedules attached hereto as Annex A.
|
d.
|
No Default
. No event has occurred and is continuing that constitutes a Default or Event of Default.
|
5.
|
Choice of Law
. The validity of this Amendment, the construction, interpretation and enforcement hereof, and the rights of the parties hereto with respect to all matters arising hereunder or related hereto shall be determined under, governed by, and construed in accordance with the laws of the State of New York.
|
6.
|
Counterparts
. This Amendment may be executed in any number of counterparts and by different parties and separate counterparts, each of which when so executed and delivered, shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by telefacsimile shall be effective as delivery of a manually executed counterpart of the Amendment.
|
7.
|
Reference to and Effect on the Loan Documents
.
|
a.
|
Upon and after the Fifth Amendment Effective Date, each reference in the Existing Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified and amended hereby.
|
b.
|
Upon and after the Fifth Amendment Effective Date, each reference in the Security Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Security Agreement, and each reference in the other Loan Documents to “the Security Agreement”, “thereof” or words of like import referring to the Security Agreement, shall mean and be a reference to the Security Agreement as modified and amended hereby.
|
c.
|
Except as specifically amended in Section 1 and Section 2 of this Amendment, the Existing Credit Agreement, the Security Agreement, and all other Loan Documents, are and shall continue to be in full force and effect and are hereby in all respects ratified, and confirmed and shall constitute the legal, valid, binding, and enforceable obligations of Borrowers to Administrative Agent and the Lenders without defense, offset, claim, or contribution.
|
d.
|
The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power, or remedy of Administrative Agent or any Lender under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.
|
8.
|
Ratification
. Each Borrower hereby restates, ratifies and reaffirms each and every term and condition set forth in the Credit Agreement and Security Agreement, as amended hereby, and the Loan Documents effective as of the date hereof.
|
9.
|
Estoppel
. To induce Administrative Agent and Lenders to enter into this Amendment and to induce Administrative Agent and the Lenders to continue to make advances to Borrowers under the Credit Agreement, each Borrower hereby acknowledges and agrees that, after giving effect to this Amendment, as of the date hereof, there exists no Default or Event of Default and no right of offset, defense, counterclaim, or objection in favor of any Borrower as against Administrative Agent or any Lender with respect to the Obligations.
|
10.
|
Integration
. This Amendment, together with the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject mater hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.
|
11.
|
Severability
. In case any provision in this Amendment shall be invalid, illegal, or unenforceable, such provision shall be severable from the remainder of this Amendment and the validity, legality , and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
|
12.
|
Submission of Amendment
. The submission of this Amendment to the parties or their agents or attorneys for review or signature does not constitute a commitment by Administrative Agent or any Lender to waive any of their respective rights and remedies under the Loan Documents, and this Amendment shall have no binding force or effect until all of the conditions to the effectiveness of this Amendment have been satisfied as set forth herein.
|
By:
|
/S/ Greg Antholzner
|
Name:
|
Greg Antholzner
|
Title:
|
VP Finance & Treasurer
|
By:
|
/S/ Greg Antholzner
|
Name:
|
Greg Antholzner
|
Title:
|
VP Finance & Treasurer
|
By:
|
/S/ Greg Antholzner
|
Name:
|
Greg Antholzner
|
Title:
|
VP Finance & Treasurer
|
By:
|
/S/ Greg Antholzner
|
Name:
|
Greg Antholzner
|
Title:
|
VP Finance & Treasurer
|
By:
|
/S/ Greg Antholzner
|
Name:
|
Greg Antholzner
|
Title:
|
VP Finance & Treasurer
|
By:
|
/S/ Greg Antholzner
|
Name:
|
Greg Antholzner
|
Title:
|
VP Finance & Treasurer
|
By:
|
/S/ Greg Antholzner
|
Name:
|
Greg Antholzner
|
Title:
|
VP Finance & Treasurer
|
By:
|
/S/ Greg Antholzner
|
Name:
|
Greg Antholzner
|
Title:
|
VP Finance & Treasurer
|
By:
|
/S/ Greg Antholzner
|
Name:
|
Greg Antholzner
|
Title:
|
VP Finance & Treasurer
|
By:
|
/S/ Greg Antholzner
|
Name:
|
Greg Antholzner
|
Title:
|
VP Finance & Treasurer
|
By:
|
/S/ James Fallahay
|
Name:
|
James Fallahay
|
Title:
|
Vice President
|
By:
|
/S/ John Freeman
|
Name:
|
John Freeman
|
Title:
|
Senior Vice President
|
By:
|
/S/ Gregory A. Jones
|
Name:
|
Gregory A. Jones
|
Title:
|
Senior Vice President
|
By:
|
/S/ Medina Sales de Andrade
|
Name:
|
Medina Sales de Andrade
|
Title:
|
Vice President
|
By:
|
/S/ David Kluges
|
Name:
|
David Kluges
|
Title:
|
Senior Vice President
|
By:
|
/S/ Domenic Cosentino
|
Name:
|
Domenic Cosentino
|
Title:
|
Vice President
|
By:
|
/S/ Brent Housteau
|
Name:
|
Brent Housteau
|
Title:
|
Senior Vice President
|
By:
|
/S/ Anne Collins
|
Name:
|
Anne Collins
|
Title:
|
Vice President
|
By:
|
/S/ Christopher Usas
|
Name:
|
Christopher Usas
|
Title:
|
Director
|
By:
|
/S/ Craig Thistlethwaite
|
Name:
|
Craig Thistlethwaite
|
Title:
|
Director
|
By:
|
/S/ Sean P. Gallaway
|
Name:
|
Sean P. Gallaway
|
Title:
|
Vice President
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Core-Mark Holding Company, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
|
|
|
|
|
|
|
|
Date: August 7, 2013
|
|
By:
|
/S/ THOMAS B. PERKINS
|
|
|
|
|
|
Thomas B. Perkins
|
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Core-Mark Holding Company, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: August 7, 2013
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By:
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/s/ STACY LORETZ-CONGDON
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Stacy Loretz-Congdon
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Chief Financial Officer
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(1)
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the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.
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Date: August 7, 2013
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By:
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/S/ THOMAS B. PERKINS
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Thomas B. Perkins
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President and Chief Executive Officer
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(1)
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the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.
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Date: August 7, 2013
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By:
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/s/ STACY LORETZ-CONGDON
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Stacy Loretz-Congdon
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Chief Financial Officer
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