Core-Mark Announces Fourth Quarter and Full Year 2012 Financial Results

Core-Mark Announces Fourth Quarter and Full Year 2012 Financial Results 
Record Annual Sales of $8.9 Billion; Record Adjusted EBITDA in 2012 &
a 30% Increase in Diluted EPS for the Year; Record Fourth Quarter
Diluted EPS of $0.83; Expect Sales of $9.8-$10 Billion & Adjusted
EBITDA of $112-$115 Million in 2013 
SOUTH SAN FRANCISCO, CA -- (Marketwire) -- 03/14/13 --  Core-Mark
Holding Company, Inc. (NASDAQ: CORE), one of the largest marketers of
fresh and broad-line supply solutions to the convenience retail
industry in North America, announced financial results for the fourth
quarter and year ended December 31, 2012. 
"We posted record sales and profits in 2012, ending the year on a
high note with the acquisition of J.T. Davenport and Sons. Mark
Davenport and his excellent company are a great addition to the
Core-Mark family and strengthen our presence in the Southeast," said
Thomas B. Perkins, President and Chief Executive Officer. "I am
excited to have the responsibility to lead this great company in our
125th year of existence. Our core strategies are intact and will
continue to fuel growth in the coming years."  
Fourth Quarter 
Net sales increased 2.9% to $2.2 billion for the fourth quarter of
2012 compared to $2.1 billion for the same period in 2011.
Non-cigarettes sales grew 6.2% driven by increases in same store
sales and execution of the Company's key marketing strategies. Sales
growth overall was impacted by one less selling day this quarter and
by lower cigarette carton sales in Canada.  
Gross profit for the fourth quarter of 2012 was $121.9 million
compared to $109.8 million in the fourth quarter of 2011. Remaining
gross profit increased 6.4% to $119.9 million. Non-cigarette
remaining gross profit grew $6.3 million or 24 basis points compared
to the same quarter last year. Cigarette remaining gross profit per
carton increased 3.1%. The following table reconciles the components
of gross profit. 


 
                                                                            
          RECONCILIATION OF GROSS PROFIT TO REMAINING GROSS PROFIT          
                       (Unaudited and $ in millions)                        
                                                                            
                            
             For the Three Months               
                                          Ended December 31,                
                                       ------------------------  ---------- 
                                           2012         2011      % Change  
                                       -----------  -----------  ---------- 
                                                                            
Gross profit                           $     121.9  $     109.8        11.0%
Cigarette inventory holding gains             (3.3)        (2.9)            
LIFO expense                                   1.3          5.8             
                                       -----------  -----------             
Remaining gross profit                 $     119.9  $     112.7         6.4%
                                       ===========  ===========             

 
The Company's operating expenses for the fourth quarter of 2012 were
$105.6 million compared to $101.1 million in the same quarter of
2011. Operating expenses as a percentage of sales increased seven
basis points driven by an increase in health and welfare costs. 
Net income for the fourth quarter of 2012 was $9.7 million compared
to $5.2 million for the same period in 2011. Adjusted EBITDA
increased from $22.2 million in the fourth quarter of 2011 to $25.6
million in the fourth quarter of 2012. The components of adjusted
EBITDA are provided in the table below. 


 
                                                                            
              RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA               
                       (Unaudited and $ in millions)                        
                                                                            
                                          For the Three Months              
                                           Ended December 31,               
                                        -----------------------  ---------- 
                                            2012        2011      % Change  
                                        ----------- -----------  ---------- 
                                                                            
Net income                              $       9.7 $       5.2        86.5%
Interest expense, net (1)                       0.5         0.6             
Income tax provision                            6.0         3.0             
Depreciation & amortization                     6.3         6.3             
LIFO expense                                    1.3         5.8             
Stock-based compensation expense                1.7         1.4             
Foreign currency transaction losses                                         
 (gains), net                                   0.1        (0.1)            
                                        ----------- -----------             
Adjusted EBITDA                         $      25.6 $      22.2        15.3%
                                        =========== ===========             
                                                                            
Note (1): Interest expense, net, is reported net of interest income.        

 
Diluted earnings per share were $0.83 for the fourth quarter this year
compared to $0.45 in the fourth quarter of last year. Excluding LIFO
expenses, diluted earnings per share were $0.90 per diluted share in
this quarter compared to $0.75 for the fourth quarter in 2011 -- a
20.0% increase. In addition, per share results were impacted by
several other items, which are reconciled in the attached diluted EPS
table following the financial schedules. 
2012 Results 
Net sales were $8.9 billion for 2012 compared to $8.1 billion for
2011, a 9.6% increase. Cigarette Sales increased 7.5% and
non-cigarette sales increased 14.5% over prior year. The increase in
net sales was driven primarily by the expansion in the Southeastern
U.S. and the acquisition of Forrest City Grocery Company in May 2011.
Excluding these two events, non-cigarette sales grew an additional
6.4% driven by the Company's sales and marketing initiatives. 
Gross profit for 2012 was $476.8 million compared to $434.1 million
for last year. Remaining gross profit was $481.3 million in 2012
compared to $437.5 million in 2011, a 10.0% increase. Non-cigarette
remaining gross profit grew 10.8% despite a $3.6 million decline in
inventory holding gains. The following table reconciles the
components of gross profit. 


 
                                                                            
          RECONCILIATION OF GROSS PROFIT TO REMAINING GROSS PROFIT          
                       (Unaudited and $ in millions)                        
                                                                            
                                         For the Twelve Months              
                                          Ended December 31,                
                                       ------------------------  ---------- 
                                           2012   
      2011      % Change  
                                       -----------  -----------  ---------- 
                                                                            
Gross profit                           $     476.8  $     434.1         9.8%
Cigarette inventory holding gains             (7.8)        (8.2)            
Net Candy inventory holding gains                -         (5.9)            
Other Tobacco Products (OTP) tax items           -         (0.8)            
LIFO expense                                  12.3         18.3             
                                       -----------  -----------             
Remaining gross profit                 $     481.3  $     437.5        10.0%
                                       ===========  ===========             

 
The Company's operating expenses for 2012 increased to $419.4 million
compared to $388.4 million for 2011. Operating expenses as a
percentage to sales were essentially flat excluding start-up costs in
both years and the reduction in legacy insurance costs this year. 
Net income in 2012 was $33.9 million compared to $26.2 million for
the same period in 2011, a 29% increase. Strong revenue growth and
improved sales mix to higher margin categories were the primary
drivers to the improvement in net income. In addition, adjusted
EBITDA increased 9.7% from $91.9 million in 2011 to $100.8 million
this year, components of which are provided in the table below.
Excluding the start-up costs associated with the J. T. Davenport
acquisition, Adjusted EBITDA was $102.1 million in 2012.  


 
                                                                            
              RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA               
                       (Unaudited and $ in millions)                        
                                                                            
                                          For the Twelve Months             
                                            Ended December 31,              
                                         ----------------------- ---------- 
                                             2012        2011     % Change  
                                         ----------- ----------- ---------- 
                                                                            
Net income                               $      33.9 $      26.2       29.4%
Interest expense, net (1)                        1.8         2.0            
Income tax provision                            21.5        17.0            
Depreciation & amortization                     25.3        22.4            
LIFO expense                                    12.3        18.3            
Stock-based compensation expense                 5.8         5.5            
Foreign currency transaction losses, net         0.2         0.5            
                                         ----------- -----------            
Adjusted EBITDA (2)                      $     100.8 $      91.9        9.7%
                                         =========== ===========            
                                                                            
Note (1): Interest expense, net, is reported net of interest income.        
     (2): Excluding acquisition and start-up costs, adjusted EBITDA was     
          $102.1 in 2012 and $96.4 in 2011.                                 

 
Diluted earnings per share were $2.91 for 2012 compared to $2.23 last
year, an increase of 30.5%. Excluding LIFO expenses, diluted earnings
per share were $3.55 in 2012 compared to $3.17 in 2011 -- a 12%
increase. These per share results were impacted by several other
items, which are reconciled in the attached diluted EPS table
following the financial schedules.  
Guidance for 2013 
The Company expects annual net sales in 2013 to be between $9.8
billion to $10.0 billion, a 10% to 12% increase. This expected growth
over 2012 is driven by incremental sales from our recent acquisition
of J.T. Davenport, market share gains and additional penetration into
existing stores, leveraging our vendor consolidation and focused
marketing initiatives.  
Adjusted EBITDA for 2013 is expected to be between $112 million to
$115 million, an 11% to 14% increase which includes some start-up and
conversion costs associated with the recent acquisition. Diluted
earnings per share for the full year are expected to be between $3.10
and $3.25, which includes a $3.7 million increase in LIFO expense to
$16 million which decreases EPS by $0.19. In addition, EPS assumes a
40% tax rate and 11.8 million fully diluted shares outstanding,
compared to 11.6 million in 2012.  
"We will approach $10 billion in annual net sales in 2013 as we
continue to gain traction with our key strategic initiatives," said
Thomas B. Perkins, President and CEO. "We do not expect robust sales
growth in the first quarter of 2013 because we are seeing softer
sales as consumers react to increasing payroll taxes and fuel costs,
but we expect purchasing patterns to return to normal levels as the
summer approaches. I am excited about our opportunities to drive
non-cigarette sales growth in 2013 and achieve the goals we have set
for ourselves."  
Capital expenditures for 2013 are expected to approach $30 million,
which will be utilized for expansion projects and maintenance
investments. 
Conference Call and Webcast Information 
Core-Mark will host an earnings call on Thursday, March 14, 2013 at
9:00 a.m. Pacific time during which management will review the
results of the fourth quarter and full year. The call may be accessed
by dialing 1-800-588-4973 using the code 34078663. The call may also
be listened to on the Company's website www.core-mark.com. 
An audio replay will be available for two weeks following the call by
dialing 888-843-7419 using the same code provided above. The replay
will also be available via webcast at www.core-mark.com for
approximately 90 days following the call.  
About Non-GAAP Financial Measures 
This press release includes non-GAAP financial measures including
adjusted diluted earnings per share, diluted earnings per share
excluding LIFO expense, adjusted EBITDA, and remaining gross profit.
We believe these non-GAAP financial measures provide meaningful
supplemental information for investors regarding the performance of
our business and facilitates a meaningful period to period
evaluation. Management uses these non-GAAP financial measures in
order to have comparable financial results to analyze changes in our
underlying business. These non-GAAP measures should be considered a
supplement to, and not as a substitute for, or superior to, financial
measures calculated in accordance with GAAP. The tables in this press
release contain more details on the GAAP financial measures that are
most directly comparable to non-GAAP financial measures and the
related reconciliations between these financial measures. 
Forward-Looking Statements 
Statements in this press release that are not statements of
historical fact are forward-looking statements. These statements
include statements regarding our guidance for 2013 net sales,
adjusted EBITDA, diluted earnings per share, ca
pital expenditures and
related disclosures. Forward-looking statements in some cases can be
identified by the use of words such as "may," "will," "should,"
"potential," "intend," "expect," "seek," "anticipate," "estimate,"
"believe," "could," "would," "project," "predict," "continue,"
"plan," "propose" or other similar words or expressions.
Forward-looking statements are made only as of the date of this press
release and are based on our current intent, beliefs, plans and
expectations. They involve risks and uncertainties that could cause
actual future results, performance or developments to differ
materially from those described in or implied by such forward-looking
statements.  
Factors that might cause or contribute to such differences include,
but are not limited to, challenging economic conditions; our
dependence on the convenience retail industry for our revenues;
competition in our distribution markets; the dependence of some of
our distribution centers on a few relatively large customers;
gasoline and other price increases; the low-margin nature of
cigarette and consumable goods distribution; our reliance on
manufacturer discount and incentive programs and cigarette excise
stamping allowances; our dependence on relatively few suppliers;
risks and costs associated with efforts to grow our business through
acquisitions; product liability claims and manufacturer recalls of
products; unexpected outcomes in legal proceedings; our ability to
achieve the expected benefits of implementation of marketing
initiatives; failure or disruptions of our information technology
systems; our dependence on our senior management; shortages of
qualified labor; attempts by unions to organize our employees;
declining cigarette sales volumes; legislation and other matters
negatively affecting the cigarette and tobacco industry; increases in
excise taxes or reduction in credit terms by taxing jurisdictions;
potential liabilities associated with sales of cigarettes and other
tobacco products; competition from sales of illicit and other low
priced sales of cigarettes; changes in the funding of our pension
plans; reduction in the payment of dividends; currency exchange rate
fluctuations; our ability to borrow additional capital; changes to
accounting rules or regulations; compliance with governmental
regulations; and earthquake and natural disaster damage. Refer to the
"Risk Factors" section of our Annual Report on Form 10-K for the year
ended December 31, 2012 filed with the SEC on March 14, 2013 and Part
II, Item 1A, "Risk Factors" of any quarterly report on Form 10-Q
subsequently filed by us for a more comprehensive discussion of these
and other risk factors. Except as required by law, we undertake no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.  
Core-Mark  
Core-Mark is one of the largest marketers of fresh and broad-line
supply solutions to the convenience retail industry in North America.
Founded in 1888, Core-Mark offers a full range of products, marketing
programs and technology solutions to over 29,000 customer locations
in the U.S. and Canada through 28 distribution centers (excluding two
distribution facilities the Company operates as a third party
logistics provider). Core-Mark services traditional convenience
retailers, grocers, drug, liquor and specialty stores, and other
stores that carry convenience products. For more information, please
visit www.core-mark.com. 


 
                                                                            
              CORE-MARK HOLDING COMPANY, INC. AND SUBSIDIARIES              
                        CONSOLIDATED BALANCE SHEETS                         
                      (In millions, except share data)                      
                                (Unaudited)                                 
                                                                            
                                                 December 31,  December 31, 
                                                     2012          2011     
                                                 ------------  ------------ 
                     Assets                                                 
Current assets:                                                             
  Cash and cash equivalents                      $       19.1  $       15.2 
  Restricted cash                                        10.9          12.6 
  Accounts receivable, net of allowance for                                 
   doubtful accounts of $10.9 and $9.6 at                                   
   December 31, 2012 and December 31, 2011,                                 
   respectively                                         228.1         215.7 
  Other receivables, net                                 53.8          42.0 
  Inventories, net                                      366.4         362.3 
  Deposits and prepayments                               40.3   
       48.2 
  Deferred income taxes                                   8.2           6.2 
                                                 ------------  ------------ 
    Total current assets                                726.8         702.2 
                                                 ------------  ------------ 
                                                                            
Property and equipment, net                             114.7          99.5 
Goodwill                                                 22.8          16.2 
Other intangible assets, net                             21.4          21.3 
Other non-current assets, net                            33.5          31.0 
                                                 ------------  ------------ 
    Total assets                                 $      919.2  $      870.2 
                                                 ============  ============ 
                                                                            
      Liabilities and Stockholders' Equity                                  
Current liabilities:                                                        
  Accounts payable                               $       94.4  $       91.5 
  Book overdrafts                                        24.7          27.1 
  Cigarette and tobacco taxes payable                   165.6         173.4 
  Accrued liabilities                                    79.5          78.6 
  Deferred income taxes                                   3.4           0.3 
                                                 ------------  ------------ 
    Total current liabilities                           367.6         370.9 
                                                 ------------  ------------ 
                                                                            
Long-term debt                                           84.7          63.1 
Deferred income taxes                                    11.7           9.8 
Other long-term liabilities                              12.1           9.5 
Claims liabilities, net                                  28.1          27.8 
Pension liabilities                                      14.8          13.6 
                                                 ------------  ------------ 
    Total liabilities                                   519.0         494.7 
                                                 ------------  ------------ 
                                                                            
Commitments and contingencies                                               
                                                                            
Stockholders' equity:                                                       
  Common stock; $0.01 par value (50,000,000                                 
   shares authorized, 12,602,806 and 12,382,724                             
   shares issued; 11,446,229 and 11,344,947                                 
   shares outstanding at December 31, 2012 and                              
   December 31, 2011, respectively)                       0.1           0.1 
  Additional paid-in capital                            249.2         240.1 
  Treasury stock at cost (1,156,577 and                                     
   1,037,777 shares of common stock at December                             
   31, 2012 and 2011, respectively)                     (37.4)        (32.2)
  Retained earnings                                     194.9         171.6 
  Accumulated other comprehensive loss                   (6.6)         (4.1)
                                                 ------------  ------------ 
    Total stockholders' equity                          400.2         375.5 
                                                 ------------  ------------ 
    Total liabilities and stockholders' equity   $      919.2  $      870.2 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
              CORE-MARK HOLDING COMPANY, INC. AND SUBSIDIARIES              
                   CONSOLIDATED STATEMENTS OF OPERATIONS                    
                    (In millions, except per share data)                    
                                (Unaudited)                                 
                                                                            
                                  Three Months Ended        Year Ended      
                                     December 31,          December 31,     
                                 --------------------  -------------------- 
                                    2012       2011       2012       2011   
                                 ---------  ---------  ---------  --------- 
Net sales                        $ 2,189.5  $ 2,127.5  $ 8,892.4  $ 8,114.9 
Cost of goods sold                 2,067.6    2,017.7    8,415.6    7,680.8 
                                 ---------  ---------  ---------  --------- 
  Gross profit                       121.9      109.8      476.8      434.1 
                                 ---------  ---------  ---------  --------- 
                                                                            
Warehousing and distribution                                                
 expenses                             64.7       61.2      262.7      234.6 
Selling, general and                                                        
 administrative expenses              40.3       39.0      153.7      150.8 
Amortization of intangible                                                  
 assets                                0.6        0.9        3.0        3.0 
                                 ---------  ---------  ---------  --------- 
  Total operating expenses           105.6      101.1      419.4      388.4 
                                 ---------  ---------  ---------  --------- 
    Income from operations            16.3        8.7       57.4       45.7 
                                                                            
Interest expense                      (0.6)      (0.6)      (2.2)      (2.4)
Interest income                        0.1          -        0.4        0.4 
Foreign currency transaction                                                
 (losses) gains, net                  (0.1)       0.1       (0.2)      (0.5)
                                 ---------  ---------  ---------  --------- 
                                                                            
    Income before income taxes        15.7        8.2       55.4       43.2 
                                                                            
Provision for income taxes            (6.0)      (3.0)     (21.5)     (17.0)
                                 ---------  ---------  ---------  --------- 
                                                                            
    Net income                   $     9.7  $     5.2  $    33.9  $    26.2 
                                 =========  =========  =========  ========= 
                                                                            
Basic net income per common                                                 
 share (1)                       $    0.84  $    0.46  $    2.96  $    2.30 
Diluted net income per common                                               
 share (1)                       $    0.83  $    0.45  $    2.91  $    2.23 
                                                                            
Basic weighted-average shares         11.5       11.4       11.5       11.4 
Diluted weighted-average shares       11.7       11.5       11.6       11.7 
                                                                            
Dividends declared and paid per                                             
 common share                    $    0.38  $    0.17  $    0.89  $    0.17 
                                                                            
Note (1): Basic and diluted earnings per share are calculated based on      
 unrounded actual amounts.                                                  
                                                                            
                                                                            
                                                                            
              CORE-MARK HOLDING COMPANY, INC. AND SUBSIDIARIES              
                   CONSOLIDATED STATEMENTS OF CASH FLOWS                    
                               (In millions)                                
                                (Unaudited)                                 
                                                                            
                                                            Year Ended      
 
                                                           December 31,     
                                                       -------------------- 
                                                          2012       2011   
                                                       ---------  --------- 
Cash flows from operating activities:                                       
  Net income                                           $    33.9  $    26.2 
  Adjustments to reconcile net income to net cash                           
   provided by operating activities:                                        
    LIFO and inventory provisions                           12.1       18.2 
    Amortization of debt issuance costs                      0.4        0.5 
    Stock-based compensation expense                         5.8        5.5 
    Bad debt expense, net                                    2.0        2.0 
    Loss on disposals                                          -        0.2 
    Depreciation and amortization                           25.3       22.4 
    Foreign currency transaction losses, net                 0.2        0.5 
    Deferred income taxes                                    0.9       (2.0)
  Changes in operating assets and liabilities:                              
    Accounts receivable, net                                 7.1      (20.0)
    Other receivables, net                                 (10.6)       1.9 
    Inventories, net                                         5.3      (78.0)
    Deposits, prepayments and other non-current assets       3.9      (12.4)
    Accounts payable                                         0.6       30.0 
    Cigarette and tobacco taxes payable                    (10.3)       7.5 
    Pension, claims, accrued and other long-term                            
     liabilities                                            (5.4)      10.3 
    Income taxes payable                                       -       (1.5)
                  
                                     ---------  --------- 
      Net cash provided by operating activities             71.2       11.3 
                                                       ---------  --------- 
Cash flows from investing activities:                                       
  Acquisition of business, net of cash acquired            (34.0)     (50.8)
  Change in restricted cash                                  2.0       (0.1)
  Additions to property and equipment, net                 (28.6)     (24.1)
  Capitalization of software                                (0.2)      (0.2)
  Proceeds from sale of fixed assets                         0.2        0.1 
                                                       ---------  --------- 
      Net cash used in investing activities                (60.6)     (75.1)
                                                       ---------  --------- 
Cash flows from financing activities:                                       
  Borrowings under revolving credit facility, net           11.3       62.0 
  Dividends paid                                           (10.3)      (1.9)
  Payments of financing costs                                  -       (0.7)
  Repurchases of common stock                               (5.2)     (19.0)
  Proceeds from exercise of common stock options and                        
   warrants                                                  3.8        5.4 
  Tax withholdings related to net share settlements of                      
   restricted stock units                                   (2.0)      (1.7)
  Excess tax deductions associated with stock-based                         
   compensation                                              1.1        1.7 
  (Decrease) increase in book overdrafts                    (4.8)      17.1 
                                                       ---------  --------- 
      Net cash (used in) provided by financing                              
       activities                                           (6.1)      62.9 
                                                       ---------  --------- 
Effects of changes in foreign exchange rates                (0.6)         - 
                                                       ---------  --------- 
Increase (decrease) in cash and cash equivalents             3.9       (0.9)
Cash and cash equivalents, beginning of period              15.2       16.1 
                                                       ---------  --------- 
Cash and cash equivalents, end of period               $    19.1  $    15.2 
                                                       =========  ========= 
Supplemental disclosures:                                                   
  Cash paid during the period for:                                          
    Income taxes paid, net of refunds                  $    11.7  $    11.8 
    Interest paid                                            1.6        2.0 
  Non-cash capital lease obligations incurred          $    11.4  $     0.4 
  Non-cash indemnification holdback                    $     4.0  $       - 
  Contingent consideration related to acquisition of                        
   business                                            $     0.6  $       - 
                                                                            
                                                                            
                                                                            
----------------------------------------------------------------------------
                                                                            
              CORE-MARK HOLDING COMPANY, INC. AND SUBSIDIARIES              
           RECONCILIATION OF DILUTED EPS TO ADJUSTED DILUTED EPS            
                    (In millions, except per share data)                    
                                (Unaudited)                                 
                                                                            
                        ----------------------------------------------------
                            Three Months Ended                              
                               December 31,         Year Ended December 31, 
                        ----------------------------------------------------
                          2012    2011       %      2012    2011       %    
                           (a)     (a)   Increase    (a)     (a)   Increase 
                        ----------------------------------------------------
                                                                            
Net Income               $  9.7  $  5.2      86.5% $ 33.9  $ 26.2      29.4%
                        ----------------------------------------------------
                                                                            
Diluted shares             11.7    11.5              11.6    11.7           
                                                                            
                        ----------------------------------------------------
Diluted EPS              $ 0.83  $ 0.45      84.4% $ 2.91  $ 2.23      30.5%
   LIFO expense            0.07    0.30              0.64    0.94           
                        ----------------------------------------------------
Diluted EPS excluding                                                       
 LIFO expense              0.90    0.75      20.0%   3.55    3.17      12.0%
   Cigarette inventory                                                      
    holding gains (1)     (0.17)  (0.15)            (0.41)  (0.42)          
   Net Candy holding                                                        
    gain (2)                  -       -                 -   (0.30)          
   Legacy insurance                                                         
    claims (3)                -       -             (0.09)      -           
   Acquisition and                                                          
    start-up costs (4)     0.09    0.06              0.09    0.26           
   Tax items (5)              -       -             (0.04)  (0.04)          
   Foreign exchange loss                                                    
    / (gain)               0.01   (0.01)             0.01    0.03           
                        ----------------------------------------------------
Adjusted diluted EPS (6) $ 0.83  $ 0.65      27.7% $ 3.11  $ 2.70      15.2%
----------------------------------------------------------------------------
(1)  Cigarette inventory holding gains                                      
     Cigarette inventory holding gains were $3.3 million and $2.9 million   
     for the three months ended December 31, 2012 and 2011, respectively.   
     For the years ended December 31, 2012 and 2011, cigarette inventory    
     holding gains were $7.8 million and $8.2 million, respectively.        
----------------------------------------------------------------------------
                                                                            
(2)  Net Candy holding gain                                                 
     For the year ended December 31, 2011, we recognized net candy          
     inventory holding gains of $5.9 million, resulting from manufacturer   
     price increases during the second quarter.                             
----------------------------------------------------------------------------
                                                                            
(3)  Legacy insurance claims                                                
     For the year ended December 31, 2012, we recorded a $1.8 million       
     reduction in expenses resulting from the favorable resolution of       
     legacy workers' compensation and insurance claims.                     
----------------------------------------------------------------------------
                                                                            
(4)  Acquisition and start-up costs                                         
     For the three months and year ended December 2012, we incurred $1.3    
     million, or $0.09 per diluted share, of costs related to the           
     acquisition of J.T. Davenport and Sons, Inc. (Davenport).              
                                                                            
     For the three months and year ended December 31, 2011, we incurred     
     $1.2 million and $4.5 million, or $0.06 and $0.26 per diluted share,   
     respectively, of costs related to the acquisition of Forrest City      
     Grocery Company (FCGC) and start-up costs associated with the new      
     Customer Agreement.                                                    
----------------------------------------------------------------------------
                                                                            
(5)  Tax items                                                              
     For the years ended December 31, 2012 and 2011, the provision for      
     income taxes included a net benefit of $0.5 million related primarily  
     to the expiration of the statute of limitations for uncertain tax      
     positions and adjustments of prior year's estimates.                   
----------------------------------------------------------------------------
                                                                            
(6)  Adjusted diluted EPS                                                   
     The adjusted diluted earnings per share impacts of the above items     
     were calculated using a tax rate of approximately 39.37% and 39.66%    
     for the three months and years ended December 31, 2012 and 2011,       
     respectively, except for the tax items for all periods presented and   
     $0.6 million and $1.0 million of non-deductible acquisition costs      
     related to Davenport and FCGC for the years ended December 31, 2012    
     and 2011, respectively.                                                
                                                                            
     In addition to the items above, for the three months and year ended    
     December 31, 2012, we recorded $0.6 million and $3.6 million less in   
     non-cigarette inventory holding gains from manufacturer price          
     increases, respectively, compared to the same periods in 2011.         
----------------------------------------------------------------------------
                                                                            
(a)  Amounts and percentages have been rounded for presentation purposes    
     and might differ from unrounded results.                               
                                                                            
----------------------------------------------------------------------------

  
Contact: 
Ms. Milton Gray Draper
Director of Investor Relations 
650-589-9445 x 3027 
mdraper@core-mark.com 
 
 
Press spacebar to pause and continue. Press esc to stop.