Quarterly Financial Data (Unaudited)

The tables below provide the Company’s unaudited consolidated results of operations for each of the four quarters in 2016 and 2015:



	Three Months Ended
	(in millions, except per share data)
	December 31,			September 30,			June 30,			March 31,
	2016			2016			2016			2016
Net sales — Cigarettes ⁽¹⁾	$	2,734.7		$	2,855.3		$	2,631.1		$	2,114.6
Net sales — Food/non-food ⁽¹⁾	1,102.1			1,138.6			1,056.3			896.7
Net sales ⁽¹⁾	3,836.8			3,993.9			3,687.4			3,011.3
Cost of goods sold ⁽¹⁾	3,637.8			3,795.0			3,499.5			2,860.2
Gross profit	199.0			198.9			187.9			151.1
Warehousing and distribution expenses ⁽²⁾	116.2			117.4			106.0			91.6
Selling, general and administrative expenses ⁽³⁾	50.3			57.6			53.0			49.4
Amortization of intangible assets	1.5			1.7			1.2			0.9
Total operating expenses	168.0			176.7			160.2			141.9
Income from operations	31.0			22.2			27.7			9.2
Interest expense	(2.0		)	(1.5		)	(1.0		)	(0.8		)
Interest income	0.1			—			—			0.1
Foreign currency gains (losses), net	0.6			(0.5		)	(0.3		)	0.7
Income before income taxes	29.7			20.2			26.4			9.2
Income tax provision	(11.0		)	(6.7		)	(10.1		)	(3.5		)
Net income	18.7			13.5			16.3			5.7
Basic net income per common share ⁽⁴⁾	$	0.41		$	0.29		$	0.35		$	0.12
Diluted net income per common share ⁽⁴⁾	$	0.41		$	0.29		$	0.35		$	0.12
Shares used to compute basic net income
per common share	46.2			46.3			46.3			46.4
Shares used to compute diluted net income
per common share	46.4			46.5			46.5			46.6

Excise taxes ⁽¹⁾	$	815.4		$	879.1		$	729.5		$	598.0
Cigarette inventory holding gains ⁽⁵⁾	6.9			0.4			7.0			1.0
LIFO expense	3.2			3.7			2.9			3.4
Depreciation and amortization	11.7			11.4			10.2			9.6
Stock-based compensation	0.6			1.9			1.7			1.9
Capital expenditures	9.8			21.7			14.0			8.8

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(1)	Excise taxes are included as a component of net sales and cost of goods sold.


(2)	Warehousing and distribution expenses are not included as a component of the Company’s cost of goods sold. This presentation may differ from that of other registrants.

(3)

Selling, general and administrative (“SG&A”) expenses include acquisition related expenses and transaction costs of $2.2 million, related primarily to the addition of Pine State consisting of $0.3 million in Q4, $0.5 million in Q3, $0.8 million in Q2, and $0.6 million in Q1. SG&A expenses also include $1.3 million related to pension settlements, consisting of $0.1 million in Q4 and $1.2 million in Q3 and a $2.0 million gain, net of legal costs, related to the settlement of a legacy legal proceeding with Sonitrol Corporation in Q1.


(4)	Totals may not agree with full year amounts due to rounding.


(5)	Cigarette inventory holding gains represent income related to cigarette inventories on hand at the time cigarette manufacturers increase their prices. Such increases are reflected in customer pricing for all subsequent sales, including sales of inventory on hand at the time of the increase.



	Three Months Ended
	(in millions, except per share data)
	December 31,			September 30,			June 30,			March 31,
	2015			2015			2015			2015
Net sales — Cigarettes ⁽¹⁾	$	1,934.5		$	2,049.6		$	1,899.1		$	1,645.3
Net sales — Food/non-food ⁽¹⁾	880.6			942.0			911.3			807.0
Net sales ⁽¹⁾	2,815.1			2,991.6			2,810.4			2,452.3
Cost of goods sold ⁽¹⁾	2,645.0			2,820.0			2,651.5			2,315.0
Gross profit ⁽²⁾	170.1			171.6			158.9			137.3
Warehousing and distribution expenses ⁽³⁾	91.7			92.8			88.6			79.5
Selling, general and administrative expenses ⁽⁴⁾	48.4			52.8			47.5			47.3
Amortization of intangible assets	0.8			0.6			0.6			0.6
Total operating expenses	140.9			146.2			136.7			127.4
Income from operations	29.2			25.4			22.2			9.9
Interest expense	(0.6		)	(0.6		)	(0.7		)	(0.6		)
Interest income	0.1			0.1			0.1			0.2
Foreign currency gains (losses), net	(0.5		)	(0.7		)	(0.2		)	(0.4		)
Income before income taxes	28.2			24.2			21.4			9.1
Income tax provision	(10.5		)	(9.1		)	(8.2		)	(3.6		)
Net income	17.7			15.1			13.2			5.5
Basic net income per common share ⁽⁵⁾	$	0.39		$	0.33		$	0.29		$	0.12
Diluted net income per common share ⁽⁵⁾	$	0.38		$	0.33		$	0.29		$	0.12
Shares used to compute basic net income
per common share	46.4			46.2			46.2			46.4
Shares used to compute diluted net income
per common share	46.8			46.6			46.6			46.6

Excise taxes ⁽¹⁾	$	566.7		$	607.1		$	554.2		$	483.7
Cigarette inventory holding gains ⁽⁶⁾	4.7			0.6			3.8			1.0
Cigarette tax stamp inventory holding gains ⁽⁷⁾	0.7			8.3			—			—
LIFO expense ⁽⁸⁾	(7.3		)	3.3			3.5			2.4
Depreciation and amortization	9.6			9.9			9.7			8.7
Stock-based compensation	2.0			2.7			2.1			1.9
Capital expenditures	5.6			10.3			11.7			2.7

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(1)	Excise taxes are included as a component of net sales and cost of goods sold.


(2)	Includes OTP tax refunds, net of tax assessments, of $0.8 million in Q2 and $0.9 million in Q1 2015.


(3)	Warehousing and distribution expenses are not included as a component of the Company’s cost of goods sold. This presentation may differ from that of other registrants.


(4)	Selling, general and administrative ("SG&A") expenses include acquisition and integration expenses of $1.8 million related primarily to the addition of Karrys Bros., consisting of $0.3 million in Q4, $0.4 million in Q3, $0.8 million in Q2, and $0.3 million in Q1. SG&A expenses also include $1.6 million related to pension settlements, consisting of $0.7 million in Q4 and $0.9 million in Q3.


(5)	Totals may not agree with full year amounts due to rounding.


(6)	Cigarette inventory holding gains represent income related to cigarette inventories on hand at the time cigarette manufacturers increase their prices. Such increases are reflected in customer pricing for all subsequent sales, including sales of inventory on hand at the time of the increase.


(7)	Cigarette tax stamp inventory holding gains relate to income earned on cigarette tax stamp inventory quantities on hand at the time taxing jurisdictions increase their excise taxes.


(8)	LIFO expense decrease in 2015 was due primarily to a decrease in the PPI for certain product categories we use to measure food/non-food LIFO expense as published by the Bureau of Labor Statistics.