CORE - Earnings call transcript Q2 2019

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Operator

Good morning, and welcome to the Core-Mark, 2019 Second Quarter Investor Call. My name is Brandon and I'll be your operator for today. [Operator Instructions] Please note, this conference is being recorded.

And I will now turn it over to David Lawrence. David, you may begin.

David Lawrence

you. Thank be and McPherson, Financial Chris will Chief President Officer. by Officer; Executive Miller, led call our Scott and Today's our Chief

out in provisions of Before I Private morning. Securities take over call Act the release of that as we Reform point this noted advantage harbor turning to earnings Core-Mark safe to the Litigation intends the the will Scott, filed

differ comments are and that our today from may subject actual risks remember forward-looking statements. which may or Please statements indicated uncertainties to and results such implied materially those include by

in these company's Report of risks company duty Some are XX-K. statements. described such Form filings, Annual does in detail our update undertake any to the including not The SEC on forward-looking

measures during this Additionally, will we call. financial refer to non-GAAP certain

You measures financial discussion reconciliation in to directly related can the most and non-GAAP these GAAP a our information, on release including our of consider to useful these comparable we Quarterly measures measure Report other and Form investors, XX-Q. earnings why a of find

turn now Scott. over the to call I'll

Scott McPherson

everyone our quarter start will on will color Chris I an quarter, financial XXXX by our and key the let's joining performance so get for around started. providing for call. and out us overview add second then metrics, some Thanks highlights today

continued XX%. of Following benefit EBITDA adjusted progress strength the sales, pleased leverage improved in a of gross in non-cigarette margin I'm in expense good and continued growth our first with that the non-cigarette growth our quarter performance, including second quarter, operating profit drove remaining

in I'm work which of sales strong success, has profitable family, industry, catalyst than and delivering cost solutions, this strategic quarter three To from far Core-Mark this lead providing grow and proud performance key growth. and management the continued our drive reflect leverage our faster the hard so on category been to results in the commitment Our the industry executing margins priorities: year.

by the growth nearly resulting sales, decline of the in offset non-cigarettes, quarter, in growth we an in for partially the Breaking delivered overall carton revenues X% down X.X%.

last customer same-store sales new growth, Our and sales benefits discussed growth independent includes of gains cigarette store impact of wins offset quarter, helping the to declines. the strong

Cigarette share and a on partially price market cartons net X.X% same-store offset by gains. inflation cigarette declined by basis,

delivered growth. non-cigarette the about of and food, growth we nicotine side, nicotine drove the by same-store categories. X.X%, sales overall On fresh led Alternative sales same-store half alternative sales our

saw in moist including also tobacco an sales We to quarter. it's products. nicotine believe alternative and moist that sales, grew cigars total note X% same-store growth alternative by about in of tobacco, acceleration I and nicotine nicotine Core-Mark's the strong oral important cigarettes,

We also From continue is to prior the led be remaining state gross distribution profit restrictions category perspective, promise. non-cigarette growth and in the growth of expansion limited by in XX% sales Despite and selection our a year the this encouraged profit margins. increased by CBD. over product showing

Our reflect improved driving the solutions, category strategic and pricing our margin improvements continued success the management were sales focus from we our initiatives. seeing on mix

pricing structure customers focus growth our with non-cigarette categories with pricing better to the consumer beneficial Our and evolving to higher-margin basket. in our drive working market initiatives on closely align mutually

quarter of we expenses, improved to Turning another delivered leverage.

benefit We to to continue technology our leverage solutions and costs. from efforts

of experience handhelds, manner process initiatives by our at our to this credits front, on technology of is processes are a SG&A by gains; track to meet an the our efficiency in centralizing And point ahead well providing are schedule. XX% goal. improved initiatives also driver our of leveraging transactional focused XXXX on leveraging customer One labor and SAP for we on delivery frictionless of the customer

focus the on through priorities. quarter, profitable a driving with business in am our pleased this I strategic overall our execution growth

returns. opportunity for XXXX conviction that sustained Our shareholder there of reinforces and to encouraging half through significant is progress the is my deliver first Core-Mark

of balance our top the growth of XXXX, unchanged. remain line drivers For

We there's a performance believe what to strong tremendous results. in are our market. We drive same-store opportunity accelerating share very on fragmented sales continued in our the market long-term remains a expect and sales growth focused growth over

addition ensuring candidates. expand our we to in customers, integrating engaged but independent it to remain and about are volume focused are our am potential chain with store we adding count, relationships evaluating opportunities our efficiently. and grow actively customers new efforts In opportunities, optimistic existing profitable to I acquisition these on that

May for address in in joined Marketing. profits. opportunity thrilled as the and driving we was evolving Murray there demands, Chris Core-Mark On opportunity, announce a the front, category to sales consumer is mutual I to management believe To convenience of growth that significant retailers that solidify SVP

product Chris leading loyalty marketing offerings. also brings and along his commissary company's solutions a the behind role, was and digital its retail with platform, innovative bakery around through media initiatives. sales on convenience vision social recent of Chris the the and innovation design of growing food for In future fresh innovation led and focused most the Chris retail. tremendous progressive chain, a convenience

who Category Under on better I'm the our gain deliver profitable management sales Core-Mark ever drive rollout take leadership, management the same-store Core-Mark's priorities. capabilities the positioned to excited critical next our to of strategic share, Together growth. Chris' the our is quarters than non-cigarette a the our has team about factor in to of Stein, category consecutive with SVP been Excellence. level, efforts of of Growth, market ability to Bill leads Center including XX Enterprise to opportunity

financial to now our provide Chris to will on call hand the details I more results. over

Christopher Miller

details on the Thank remainder wrap good quarter the of with and our you an update morning the then financial some strong outlook for insights off To year. for kick results Scott up I'll profitability on our everyone. and our review additional provide things metrics, and

EBITDA $X.XX or million year. to LIFO compared our to results increased $X.XX the last increased $X.XX quarter, per of and million first with income excluding expense reflect LIFO Earnings with in QX profit last operating margins of $XX.X to compared last million. gross or a favorable net share million higher Net same shift was product per for $X.XX the to increased share adjusted mix income leverage. $X.XX per Consistent per $X.X or $X.XX to benefit share with the expense year, expense, due $XX.X and quarter year. XX% share compared $XX

Total in X.X% In sales, the of by and food X.X% category driven saw food and second for increased growth increases we customers. slight new an sales year-over-year sales the sales. by by increase and in addition non-food driven cigarette the both a offset in same-store quarter, categories, decrease overall non-food strong

stronger which with approximately each health, The categories XX% X% year-over-year led included this category in a increase, nicotine by general Our food, growth category. year-over-year. and quarter, category increasing alternative beauty and beverage products, exhibited are this with driven fresh

tobacco quarter grew cigar by significant was other product X% which The category by for shortages manufacturers. the impacted

for X.X% overall increased XX%. and non-food Excluding the cigars, quarter over food OTP sales increased and sales

Scott to as points, gross profit margins XX the mix category. food profit gross remaining As of and gross as mentioned, X.X%, period higher-margin the and non-food basis increased food favorable compared well last Remaining year. margin non-food and products, the the reflecting in profit shift in towards same quarter XX% expanded overall as the benefit higher

the OTP expansion beverages that in higher-margin and of the margins growth strong category. pleased in nicotine with margin quarter and benefits were alternative products the year-over-year included food, We for our a fresh,

remaining continue alternative the the rest comparison a of year expect growth we face in to to year products. more given we strong margins profit the year-over-year half we half in of XXXX, drive higher the the to experienced last difficult second higher-margin While sales gross of second in nicotine

year. operating million $XXX.X to $XXX.X last million expenses Total increased compared to

profit XX.X% decreased of to As remaining to gross profit, compared gross remaining and the expenses year, last warehouse a operating percentage SG&A leverage to and in due primarily increase in expenses. XX.X%

with delivery costs. driven by million SG&A expenses as basis or expenses and of warehousing in million headquarters our costs relocation. second percentage in included of profit remaining XXX approximately Warehouse which increased improved to a X.X% leverage the points XX.X%, $X.X quarter, primarily gross $X.X associated

million incurred to XXX to remaining expenses not we the percentage move, relocation costs forward. what we going gross the related a is points the profit basis For which year below we XX.X%. do of expected, related to as improved any significant $X.X to and SG&A expect approximately

I on to and impact for of the price year. the want also cigarette increases briefly touch candy

of in in of significant quarter. of in $X.X announced in of holding our a the the million price gain to cigarette holding increase in that quarter was carton second inventory On This per front, resulting an second cigarette that most was impacted $X.XX million XXXX. brands, full cigarette $X.X mid-June cigarette compares of the XXXX recognized gains second

total September $X.XX the year. total we've For increase in Through that seen cigarette resulted and carton brands second cigarette additional increase $X.XX June per occurred most brought price increase per late major increase per carton. in a $X on to carton last of year, XXXX, context to this a price

below price is on likely year carton manufacturers the accelerated, seems of the that increases price year-to-date Given of and increase increase brands per the end price has announce will prior level cigarette third the the year. a before the it major timing

We there to our holding this gain another in are event taking is the maximize steps year. increase

However, timing of a potential the amounts or third certain the increase. we cannot be of price

increases Wrigley and gain Regarding $X these price announced in our third products. will increases in a approximately range impacting X%, holding Hershey that price variety of in million their candy, July, Mars, from the estimate We of be the quarter. of

in capital, the of a and in receivable large quarter million, to on regard normal increased working a inventory The a not million, build for change build expectations seasonal purchases. by $XXX.X an The certain $XXX sheet, our accounts to of year potential and receivable. approximately our increase, basis full increase capital timing we working seasonality accounts million our flow normal with on drawn outlook revolver cigarette our our payment is most do $XXX fluctuations no price notably our in inventory increase assuming year-end an sequential cash balance the amount free to reflecting and on due significant in accounts. the seasonal other Turning to as increase

the earnings morning, reaffirming release our As on guidance are we we for in this full March outlined our which year, X. we announced financial

first the expectations. are We ahead of half slightly results our year, the pleased with are the which of for

from While of the market perspective, the and share to we drive we've had continue grow need third sales will a to balance good year. through quarter strong sales start to same-store a the

earnings earnings range. our guidance ability deliver within confident the to we our On front, remain in

of the with are strong and we to the the year. are back through we pleased half summarize, on start focused continued To execution year our

we and management leader are and category cost our optimistic structure. faster and future, being industry, We more very remain on fixed leveraging the highly properly our focused than about in the growing

the open now for can you. you questions. Operator, Thank line

Operator

from And Stephens Ben Instructions] [Operator Inc., Bienvenu. have we

Ben Bienvenu

thanks. to for the ask this guidance year. Good morning about I Yeah, guys. wanted

half year, XQ. and both You putting good first are of guys, as numbers quarters solid, up pretty XQ through in said you the the seen

into yet benefit the sounds incorporated It holding there's increase a candy cigarette your got like higher but XQ. anticipated. pricing if now guidance, it of being in You've gains of than not might possibility previously gain holding be

Just of that curious versus it confident there guidance maintain should to Is the of trend reflection to the anything measured or enough? more halfway around year increased into a the just half the guidance approach guidance is a perspective the decision for year from full through second be year. a we

Scott McPherson

Sure Ben.

let's take first. think side EBITDA the I

think considerations I there. the you key of out a called couple

increase. key a increase. the is, but the that's of that our a One certainty have price be there's that, there's from anticipating the final going definitely We're been that's so benefit, element to to thinking. cadence there's price getting a We're still but kind so a of them that, manufacturers, cigarette did cigarette in on break tabulation definitely we going of no a candy be

was then to going third but side. really profit quarter into feel about last us revenue quarter quarter. of I the on for just our EBITDA It's the the the and revisit is good prudent And positioning, biggest We at it end the year. thing we're think the of third

decline. saying, stuff and may Altria QX, acceleration come On about that continue grow some share the of really we're how seen you quarter, an second to and know has same-store they out coming but we recent the of and our in in revenue sales with going side, to traction feel you see know in some the QX We've carton performance to in light strong have in.

well we're You revenue know really have see perform We the on to going half to in have get second there, but going a a side. to perform. we're path to to

Ben Bienvenu

you with Okay, capital would associated to the balance expectation and leverage would holding gains. And the some your if talked which Chris the implied cigarette that associated increases, looking be about is you the thanks. at sheet, debt with helpful. of year-end potential that maximize revisit working balance around the then just But

Christopher Miller

of a the the say think I more end we'll buying at year the inventory X.Xx feel pretty year, standpoint. leverage of but be end from that we'll level a Sure. I of the be, assumes good Again, let's kind the range. X.Xx by normal of that in

Ben Bienvenu

fresh a be last for independents on could category, and would Can to was and XQ Okay, revenue nice you detail improvement that, chains? strong there great. question XQ. then the by what improvement food about sequential and talk really me provide the larger from contributed Any or results and you driven disproportionately to

Scott McPherson

Sure.

You a to so work really it's had of pretty really maybe really we've worked I'd on chains the of understanding couple programs, with slanted and sizable chains. hard customer know food Ben, the business. the a food I towards in think complexities We've say fresh our being fairly balanced. little base embrace

I with from they consumer, millennial for you think snackers. us it's They just is which convenience really food outlets on consider think strategies, Z optimal Gen location very what working encouraging we're seeing our to I category frequent our are executing and and an convenience, at look as the snacking. if customers, But management

the starting is think that I to I industry as think well. benefited that's and us on capitalize

Ben Bienvenu

Okay, going forward. luck thanks. Good

Scott McPherson

Ben. Thanks

Operator

From Please BMO go have Capital Kelly we Bania. ahead.

Kelly Bania

my taking for Thanks questions. morning. good Hi,

the price guidance you a impact there know just in last wanted increase? then performance to the shift margin maybe just of a for and half in the how on little outlook? just third of respect what bit the second you also just that quarters, also, the isolate alternative the much impacts guidance the margin cigarette nicotine margins, to relative on dive maybe first is the Can what half. your And I couple to embedded and with mix implies

Scott McPherson

one me easiest So, first, last Kelly. the the take let that's because

year-to-date I We in think XX.X%. and have price cigarette at $XX in million guidance increase we're our

know definitely be be our cadence So income. that to the on and increase you higher to see to third still on and amount, anticipated a close so the anticipating certainly level, much price they've guidance changed range one we cigarette to but

is I've called know a the points of quarters. to obviously but number points think front, On growth. good strong for had really I times, range at think a long from standpoint, XX We XX basis as margin the in of out we to about basis and you two were range you our XX XX

something at bucket and Now break in that, a of the to we've if another now made I we've progress then strategic well. be stronger a is and XX we're and obviously buckets alternative we're worked buckets pricing really going for third of getting year, strong you traction mix as into know, nicotine our got would also months, run into half in big gains, that least there the definitely those you've and and much comps on is about that's then second some

year. that So if a think XX about range, being I bit end the XX definitely of to in not us higher exceeding this little

Kelly Bania

And you mean XX full to XX year? for the

Scott McPherson

or the for XX that I higher range XX higher the slightly full like at points of year. be end basis that. we'll said, to Yes, And than

Kelly Bania

just accelerating. helpful. and declines with Altria's may respect cigarette And guess you the that's comments that to be mentioned I Okay,

you Are that or you curious on Do have you Just what that a nicotine just in comes positive of plays growth that that? the with view think be expense that? seeing that? agree Do alternative out? you at guys as and for negative if how could a you

Scott McPherson

so market, sales strong on seeing. as our is know the mean outperformed is what basis not decline quite I a you now have the right market we Sure. same-store as

make have that to hard, mix I combustibles sure but satisfy right a the the our just consumer. alternative not think in we worked of lot is customers on nicotine, really to product

using shift are combustible and Altria certainly is just leaving alternative a I an as for That there from users recently, even know vape primarily combustible users sat there's vape, Juul. shift and where said, certainly, a you with I combustibles completely

good. far but us, and it's standpoint, total so as actually For called standpoint, up been nicotine for headwind, it's a us definitely revenue quality a earnings was out of from I profit

you some think to this is neutral off which a is revenue headwind, nicotine, So but from is trade know there combustible point. I generally profit alternative definitely at

Kelly Bania

think for me, know help chunky any what for wins you Okay, you that's may of growth And was this us excluding one can just organic customer be quarter, sales or losses? last just then helpful. about kind

Scott McPherson

Yes, first in historic losses lapped we our the quarter. had of most

know with we look times. you Rite-Aid – with had if bit exception little So called number had a at little QX, the a you out bit of which we of of a departure

about growth and I we're was a give and that outside clean. stores for down But sales a to combination of same-store the XXX. think the share pretty year Rite-Aid I the and we say take X,XXX of would quarter market started that with growth was or

Kelly Bania

Okay, and bidding maybe anything last how competitively, specifically cycle. McLane, really Are and you competitive cycle trending seeing are things on I on one. RFP from curious sorry, the then guess just

Scott McPherson

we're the Yes, process we're up couple of and next and now. have we working coming a – couple year year right after on in a the

I think rational McLane's recently. rational been think been very has the in competitor very also as we've the that I I part we market and are, believe a bids of a

Kelly Bania

Thank you.

Operator

And Griffin. Please Bobby go from have we ahead. Raymond James

Bobby Griffin

you questions; ones Thank taking just my for me. two morning. Good quick for

First growth, there, some volume-driven or year-over-year much and running growth? was on that is impressive also there benefiting the food through pretty that price beverage all

Scott McPherson

just growth? margin growth talking or revenue you Are about

Bobby Griffin

sorry. growth, Revenue

Scott McPherson

beverage Yes, sales some just is of growth. share little most it pricing gain. bit, would have same-store did revenues market is you have that gain specifically most of initiatives We know share around but a helped and that

Bobby Griffin

that? any about a million XX-Q or appreciate modeling question. in quarter. called in other Should out Okay, XQ, $X assume on there just million was this the $X quickly anything it. we I And expense then left Is relocation

Scott McPherson

much is called in we're the material anything behind pretty us. out Chris Yes, that script

Christopher Miller

Yes.

Bobby Griffin

I appreciate perfect. that's Okay, it.

Christopher Miller

it. the of That's bulk

Bobby Griffin

forward. of the going best time. luck for Thanks well Alright,

Scott McPherson

Bobby Thanks

Operator

ahead. go Mandeville. From Jefferies we have Christopher Please

Christopher Mandeville

on we on quarter Hey, cadence with monthly in good to maybe that's I'm the beauty profit if then dollars. In that gross and been Scott, performing start considerable quarter-to-date, just vaping health had up has the the be offer non-cigs just and off itself guess quarter-to-date can you'd some I contribution color. health morning. both curious to and of particular, kind given the willing

Scott McPherson

So the in month-by-month you monthly when quarter? about cadence, say are this talking you

Christopher Mandeville

Correct.

Scott McPherson

I'd general strong of and even a had probably and balance with June a But vape about really in you're we the sales par real like at other, so QX in each really think the was say and and to good particular, same-store quarter. ramp-up pretty we from from I of thinking through a from were general and kind April Yes, growth a non-cigarette I merchandise half QX growth mentioned, the There year, QX. significant jump merchandise back when QX. think in significant was last May a

like good you accounts. That this there's so The to continuing know And continuing a runway we still strong really we've grow you Juul. frankly is penetrate Canadian to growth with market We're in get said, know store. seen going Juul new didn't there. feel until pretty year, same

QX So I not half saw quite there's as of QX, as of a think definitely year. even first maybe the but the and into momentum, in much we lot

Christopher Mandeville

to just or price clear, include candy? be increase that the then the now does and Okay, does guidance not or being maintained reiterated, for

Scott McPherson

said we think does. gotten as price it cigarette we called which we got increase, haven't out $X now that We million, I similar but amount. second now, a is Right I a earlier, right also

at our this point. which and that adjustments we biggest why to the make didn't guidance that's is QX, and headed we're into reason main quarter So any

Christopher Mandeville

changed the QX. necessarily to that’s incorporate candy. just for into It's in nothing going driving conservative guidance season there's to your summer so Okay,

Scott McPherson

conservatism. it can You call

making and price sure we a and quarter. I think increase seeing we – being we're third have prudent next then that strong get just

Christopher Mandeville

back then in for and last queue. me and the one hop Okay, the I'll

showing progress distribution Just are really on guys and great there. warehousing you

look or X%. like call I never it year-to-date. back shown I at growth really so historicals, think its you've running, If generally speaking X% below

below expecting if just So to in a on a that? should just remind and there's kind expense the we be be you us new to as acceleration we back maybe control of an half look surrounding or mindset if the growth ability little why year, the can bit or of

Scott McPherson

good increase expense generally an I'm first would the cubes at know by of but the – think it have the labor, I'm the kind had through I continue warehouse. on we load, really we really year. control year Transportation, Well, look per and did quarter, I in driven of you the expect I very in primarily if always offset leverage of and in focused half but to and balance was that QX, it leverage was

the I a next warehousing think we're from leverage standpoint two well positioned you trends. and for quarters know

Christopher Mandeville

thanks. Great,

Operator

[Operator Loop ahead. Capital we have Instructions] go Please Markets And Wolf. Andrew from

Andrew Wolf

Thanks, good morning.

still as did the want Were or last did expecting, on you quarter quarter guidance that candy the you clarify. surprise? contemplate when I this you to set – or come guidance So you when a

Scott McPherson

when get get is maybe the anticipate the of other one million clarify balance on Yes, we The other as those candy we one the will thing year. in range, all it we everybody kind happens of I increases is that that – that price to came a surprise. be but supersedes that through thing the of it increase of kind would the $X candy

So we anticipated at definitely year the time, about of when for we year but us it candy definitely one it all think guidance. upside this income the kind for some be will we and course got of over

Andrew Wolf

see. Oh, I

a be we think would out? Is since it? that, big less should a than it's but that it net the you about So little call how number

Scott McPherson

Yes, right sir. exactly

Andrew Wolf

not Okay. something shown enough just but just quantifying it. Alright, you or $X to if comfortable so gross you I'm to that would feel call like big and in be be margin would million out? then – don't usually trying don't

Scott McPherson

No, in range. I $X million of we million would between and candy normally in $X somewhere inflation say categories overall, that get

Christopher Miller

the Over the course of year.

Scott McPherson

is off. So far your thinking not

Andrew Wolf

like asking, just maybe well. I apologize, I the listening on Chris and not then was cigarette Okay, got it. And was

think be you guidance or… comes price in. that sorry. the would in expected haven't you second said also million a got if $X around was So Is increase, and it which I that

Scott McPherson

by some all that primarily and manufacturer price Canada, to but increases. this expecting price that generated year fair were we U.S. includes increases driven $XX that's No, be million, two Yes. in increases

increases. So than had earlier they and They get price far historically. than we came two did gotten historically, we earlier both had this expected than we seen year or were less

why there's probability that's in that done have Altria's will delta a price that everything third So you there's on and based income, believe year, in activity we they price increase. and the that increase strong they've a know investments a this

Andrew Wolf

Okay, and guidance as that is the well?

Scott McPherson

$XX the this only in so is year Well, million we've at... been and the guidance, far

Christopher Miller

$XX million or million. $XX

Scott McPherson

$XX million.

So the $XX income million in price cigarette definitely is of there.

Andrew Wolf

then new out of first and Okay, them making new just cost then about sort customers. Could profit some is the and how could the you a you just – of you money quarter you called onboarding cycle cycle in into like income – customers is like you much there statement? talk new customer start money, wins with it or

Scott McPherson

Sure. think low that incremental larger cost. think independent the Andy, start-up I customer, Yes, I – very about very about when larger costs. I The the think customers, the start-up

called out In year, we’ve the this called customers. that cases, different know three we've you out customers the

know ranged XXX in you had them of it fairly low I’d that All or would say a couple start-up stores costs. were them – I range. say of

fairly because incurred don't start-up smoothly. in went transitions have say lot a quarter. but is going of and cost those this forward all start-up divisions, them all of fairly significant a was behind us anything One I the really cost We standpoint, would from it

Andrew Wolf

year last with now facing Okay, last back to comparison? of or so just quickly challenging those that a that quarter products, type you're what year, in Juul ramp caused third

Scott McPherson

had of nicotine – I'd I phenomenon. Juul for user-friendly, easily, kind hit – big quick. jump the with popular call nobody but a social on. magic I nicotine said, mean, that that's continued very I had think had at delivered QX, Well, formula very of kind Juul media and a and around while, did. it Like I it levels was to a became very been QX was it we alternative and came it became out device from and a think

done standpoint I think and the you out what's social from Juul data making have combustible that viable this And Altria job about of away from I that are quickly. users a users. see this is others under place taken to know alternative responsibility turn there a they think moving the great good starting in cigarette age and fairly for a thing and

So so for positive think positive for far been that's the industry has and us. I

Andrew Wolf

what's – Okay, and the I pretty and you and board on, for at determined to going Core-Mark years looking product to level term so outlook. and convenience at to specifically What is but longer question just the one last the obviously sort on where on is there? what federal type mean you are CBD for happen it's two of be the stores? five see that could and

Scott McPherson

very Andy, that would a we're selling very been and of high. mix number I states, today in has product acceptance select the select few manufacturers a select very and customer say

years. be category over the I five the a CBD think that to going all numbers I around see next point to it's – multibillion-dollar

to extremely doing moves game. Recently and to really the partners. that I primary them is channel good well think positions distribution Cronos Altria we've for positioned with convenience in that CBD some be be think picked I that, the made

runway So CBD I think there's space. convenience in the for a long

Andrew Wolf

compliant, sure is you – it minors or making there Okay, Is are it convenience? or it don't other get and do why think reasons?

Scott McPherson

mind other that high and responsibility Yes. No my and think alcohol convenience age in the and standpoint, cigarettes and level accuracy. from I selling number exists they've I a that products Andy, doing a at of one verification proven is think in it today channel retail social

or else, that that think I'd go if channel FDA that's the the were in. that want anybody that, pretty would be clear to I I to – it's it me

Andrew Wolf

I Alright, appreciate thank it. you.

Scott McPherson

You got it.

Operator

closing No remarks. further questions at Lawrence this time. We'll David now back turn to it for

David Lawrence

our morning. Core-Mark. this call for greatly all appreciate interest you We joining in Thank your

contact is release we so can me any filed morning, well on you as questions much. our have you available If in earnings My information website. Thanks the this as directly. contact

Operator

Thank for and Ladies you gentlemen, you. joining. concludes Thank today's conference. this

may now You disconnect.

Core-Mark Hldg (CORE) 11 Aug 192019 Q2 Earnings call transcript