Core-Mark Announces First Quarter Diluted EPS of $2.20

Market Wire, May, 2009

Core-Mark Holding Company, Inc. (NASDAQ: CORE), one of the leading wholesale distributors to the convenience retail industry in North America, announced financial results for the first quarter ended March 31, 2009.

First Quarter

Net sales were $1.39 billion for the first quarter of 2009 compared to $1.35 billion for the same period in 2008, a 3.5% increase. The increase was due primarily to cigarette price increases totaling approximately $36 million and sales from our New England division. On a constant currency basis, net sales increased 6.8% during the first quarter compared to the same quarter in the prior year. In addition, this quarter had 63 working days compared to 64 in first quarter of 2008.

Gross profit for the first quarter of 2009 was $118.1 million compared to $81.2 million for the same period last year. Cigarette holding profits were $34.9 million this quarter but nominal in the first quarter of last year. Gross profit, excluding cigarette holding profits and LIFO expense, grew to $86.2 million this quarter from $82.8 million in the first quarter of 2008, a 4.1% increase. This improvement was driven primarily by an increase in cigarette gross profit margins. Second quarter gross profit will be negatively impacted by approximately $10.8 million of federal excise tax liability levied on inventories held for sale on April 1, 2009, net of expected manufacturer reimbursements.

The Company's operating expenses for the first quarter of 2009 increased 2.6% to $82.6 million compared to $80.5 million in the first quarter of 2008. As a percent to sales, total operating expenses decreased by 5 basis points; warehousing and distribution expenses decreased 18 basis points. Selling, general and administrative costs increased by 12 basis points due primarily to increases in healthcare costs and additional bad debt provisions.

Net income for the first quarter of 2009 was $23.3 million, or $2.20 per diluted share compared to a net loss of $0.5 million, or $0.05 per diluted share for the same period in 2008. The cigarette holding profits contributed significantly to the improvement in net income. In addition, diluted earnings per share were also impacted by several other items, which are reconciled in the attached table. Excluding these items, diluted earnings per share on a non-GAAP basis would have been $0.21 compared to $0.16 in the first quarter of 2008.

"I am very proud of this organization's strategic execution in managing the effects of the new State Children's Health Insurance Program (SCHIP) legislation, which was the catalyst to the cigarette manufacturer's price increase. For the Company, we were able to generate sufficient cigarette holding profits to almost equal the funding required for the increases in working capital that resulted from this legislation," said Michael Walsh, President and Chief Executive Officer of Core-Mark. "We will still need to pay almost $11 million in federal excise tax. For our customers, we set as an objective and then delivered reliable service and supply continuity before, during, and after this seismic event. I am extremely pleased with this organization's demonstrated ability to manage such challenges for the benefit of both our shareholders and customers."

Guidance for 2009

The Company increased its annual guidance from $6.3 billion to $6.4 billion of net sales for 2009. This guidance contemplates an 8% to 10% decline in carton sales and soft sales in the other categories. Management has lowered its expected capital expenditures from $27 million to $24 million for 2009.

Annual Meeting

Core-Mark has scheduled its annual meeting for June 2, 2009 at 2:00 p.m. in Burlingame, California at the Hyatt Regency located at 1333 Bayshore Highway. Stockholders of record as of April 6, 2009 will be entitled to vote at the Annual Meeting.

Investors Conference Call

Core-Mark will host an earnings call on Monday, May 11, 2009 at 9:00 a.m. Pacific time during which management will review the results of the first quarter ended March 31, 2009. The call may be accessed by dialing 1-800-471-6718 using the code 24429476. The call may also be listened to on the Company's internet website www.core-mark.com .

An audio replay will be available for two weeks following the call by dialing 888-843-8996 using the same code. The replay will also be available via webcast at www.core-mark.com for approximately 90 days following the call.

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 provides distribution and logistics services as well as marketing programs to over 24,000 retail locations in 50 states and five Canadian provinces through 26 distribution centers, two of which Core-Mark operates as third party logistics providers. Core-Mark services traditional convenience retailers, grocers, drug, liquor and specialty stores, and other stores that carry consumer packaged goods. For more information, please visit www.core-mark.com .