FORM 10-Q


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



           [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                  For the quarterly period ended March 31, 1999



                                       OR


         [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934

   For the transition period from ____________________to_____________________

                        Commission file number 333-14217

                                  ============
                          Core-Mark International, Inc.

             (Exact name of registrant as specified in its charter)

         Delaware                                                     91-1295550
         (State or other jurisdiction of                       (I.R.S. Employer
           incorporation or organization)                    Identification No.)

         395 Oyster Point Boulevard, Suite 415
         South San Francisco, CA                                           94080
         (Address of principal executive offices)                     (Zip Code)

       Registrant's telephone number, including area code: (650) 589-9445

                                  ============

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                  _x_ Yes ___ No

                  At April 30, 1999, Registrant had outstanding
                        5,500,000 shares of Common Stock.

                 ===============================================


<PAGE>


                 Core-Mark International, Inc. and Subsidiaries

                    FORWARD-LOOKING STATEMENTS OR INFORMATION

     Certain  statements  contained in this quarterly  report on Form 10-Q under
the caption  "Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations," and elsewhere  herein and in the documents  incorporated
herein by reference are not statements of historical fact but are future-looking
or forward-looking statements that may constitute  "forward-looking  statements"
within the meaning of Section 21E of the  Securities  Exchange  Act of 1934,  as
amended.  Certain, but not necessarily all, of such  forward-looking  statements
can be identified by the use of such  forward-looking  terminology  as the words
"believes,"  "expects,"  "may,"  "will,"  "should,"  or  "anticipates"  (or  the
negative of such terms) or other variations  thereon or comparable  terminology,
or because they involve  discussions  of  Core-Mark  International,  Inc.'s (the
"Company's") strategy.  Such forward-looking  statements are based upon a number
of assumptions  concerning  future  conditions  that may ultimately  prove to be
inaccurate.  The ability of the Company to achieve  the results  anticipated  in
such statements is subject to various risks and  uncertainties and other factors
which  may  cause  the  actual  results,  level  of  activity,   performance  or
achievements  of  the  Company  or the  industry  in  which  it  operates  to be
materially different from any future results, level of activity,  performance or
achievements  expressed  or implied  by such  forward-looking  statements.  Such
factors  include,  among  others,  the general state of the economy and business
conditions  in the  United  States  and  Canada;  adverse  changes  in  consumer
spending;  the  ability  of the  Company to  implement  its  business  strategy,
including  the  ability  to  integrate  recently  acquired  businesses  into the
Company; the ability of the Company to obtain financing;  competition; the level
of retail sales of cigarettes and other tobacco  products;  possible  effects of
legal proceedings against  manufacturers and sellers of tobacco products and the
effect of government  regulations  affecting such  products.  As a result of the
foregoing  and  other  factors  affecting  the  Company's  business  beyond  the
Company's  control,  no assurance can be given as to future  results,  levels of
activity,  performance  or  achievements  and  neither the Company nor any other
person  assumes  responsibility  for the  accuracy  and  completeness  of  these
statements.


<TABLE>
<CAPTION>
                                                                            Page
<S>                                                                         <C> 

PART I - FINANCIAL INFORMATION

Item 1: Financial Statements


        Condensed  Consolidated  Balance  Sheets as of  December  31, 1998
        and March  31, 1999........................... .....................   3
        Condensed   Consolidated Statements  of  Income  for the  three  
        months  ended March 31, 1998 and 1999............. .................   4
        Condensed Consolidated Statements of Cash Flows for the
        three months ended March 31, 1998 and 1999..........................   5
        Notes to Condensed Consolidated Financial Statements................   6

Item 2: Management's Discussion and Analysis of Financial Condition and Results
        of Operations............... .......................................   8

Item 3: Quantitative and Qualitative Disclosures About Market
        Risk................................................................  12

PART II - OTHER INFORMATION

Item 1: Legal  Proceedings..................................................  13
Item 2: Changes in Securities and Use of  Proceeds..........................  14
Item 3: Defaults Upon Senior  Securities....................................  14
Item 4: Submission of Matters to a Vote of Security  Holders................  14
Item 5: Other  Information..................................................  14
Item 6: Exhibits and Reports on Form 8-K....................................  14

Signature     ..............................................................  15

</TABLE>

                                       -2-
<PAGE>                                 



                 CORE-MARK INTERNATIONAL, INC. AND SUBSIDIARIES
                      Condensed Consolidated Balance Sheets
                            (In Thousands of Dollars)
<TABLE>
<CAPTION>

                                                                                December 31,  March 31,

                                                                                    1998        1999
                                                                                 ---------    ---------
Assets                                                                                      (Unaudited)
<S>                                                                                <C>          <C>    

Current assets:
     Cash ..................................................................   $  24,586    $  18,843
     Receivables:
         Trade accounts, less allowance for doubtful accounts of $2,761 and
              $2,670, respectively .........................................     103,412      100,082
         Other .............................................................      12,578        8,161
     Inventories, net of LIFO allowance of $34,332 and $34,432, respectively     112,481       82,046
     Prepaid expenses and other ............................................       6,576        5,864
                                                                               ---------    ---------
         Total current assets ..............................................     259,633      214,996

Property and equipment .....................................................      61,332       61,375
     Less accumulated depreciation .........................................     (33,283)     (33,857)
                                                                               ---------    ---------
     Net property and equipment ............................................      28,049       27,518

Other assets ...............................................................       7,227        6,747
Goodwill, net of accumulated amortization of $19,375 and $19,896,
     respectively ..........................................................      64,481       63,960
                                                                               ---------    ---------
                                                                               $ 359,390    $ 313,221
                                                                               =========    =========
Liabilities and Shareholders' Equity 
Current liabilities:
     Trade accounts payable ................................................   $  48,867    $  49,814
     Cigarette and tobacco taxes payable ...................................      45,073       53,515
     Income taxes payable ..................................................       2,698        3,984
     Deferred income taxes .................................................       6,992        6,941
     Other accrued liabilities .............................................      34,514       30,880
                                                                               ---------    ---------
         Total current liabilities .........................................     138,144      145,134

Long-term debt .............................................................     208,124      151,999
Other accrued liabilities and deferred income taxes ........................       9,260        9,557
                                                                               ---------    ---------
     Total liabilities .....................................................     355,528      306,690

Commitments and contingencies:
Shareholders' equity:
     Common stock; $.01 par value; 10,000,000 shares authorized;
         5,500,000 shares issued and outstanding ...........................          55           55
     Additional paid-in capital ............................................      26,121       26,121
     Accumulated deficit ...................................................     (15,077)     (12,765)
     Accumulated other comprehensive loss:
         Foreign currency translation adjustments ..........................      (4,225)      (3,868)
         Minimum pension liability adjustment ..............................      (3,012)      (3,012)
                                                                               ---------    ---------
         Total shareholders' equity ........................................       3,862        6,531
                                                                               ---------    ---------
                                                                                $359,390     $313,221
                                                                                ========     ========
</TABLE>

           See Notes to Condensed Consolidated Financial Statements.

                                       -3-
<PAGE>


                 CORE-MARK INTERNATIONAL, INC. AND SUBSIDIARIES
                   Condensed Consolidated Statements of Income
                            (In Thousands of Dollars)
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                       Three Months
                                                      Ended March 31,
                                              ------------------------------
                                                      1998         1999
                                                  -----------  ----------- 
<S>                                                   <C>           <C>    

Net sales .....................................   $ 563,220    $ 629,452
Cost of goods sold ............................     522,533      583,882
                                                  ---------    ---------
     Gross profit .............................      40,687       45,570
Operating and administrative expenses .........      36,037       37,871
                                                  ---------    ---------
     Operating income .........................       4,650        7,699

Interest expense, net .........................       4,296        3,395
Amortization of debt refinancing costs ........         374          318
                                                  ---------    ---------
     Income (loss)  before income taxes .......         (20)       3,986

Income tax expense (benefit) ..................          (9)       1,674
                                                  ---------    ---------
     Net income (loss) ........................   $     (11)   $   2,312
                                                  =========    =========

</TABLE>



























            See Notes to Condensed Consolidated Financial Statements.

                                       -4-
<PAGE>


                 CORE-MARK INTERNATIONAL, INC. AND SUBSIDIARIES
                 Condensed Consolidated Statements of Cash Flows
                            (In Thousands of Dollars)
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                                                                 Three Months
                                                                                                Ended March 31,
                                                                                   ----------------------------------------
                                                                                           1998                  1999
                                                                                    -------------         -------------
CASH PROVIDED BY OPERATING ACTIVITIES:
<S>                                                                                       <C>                   <C>    

Net income (loss)...................................................................$         (11)          $     2,312

     Adjustments  to  reconcile  net  income  (loss)  to net  cash  provided  by
         operating activities:
     LIFO expense...................................................................          800                   100
     Amortization of goodwill.......................................................          520                   521
     Depreciation and amortization..................................................        1,573                 1,550
     Amortization of debt refinancing fees..........................................          374                   318
     Deferred income taxes..........................................................           13                   317
     Other adjustments for non-cash and non-operating activities....................         (125)                   53

     Changes in operating assets and liabilities ...................................       28,532                45,929
                                                                                    -------------         -------------
Net cash provided by operating activities ..........................................       31,676                51,100
                                                                                    -------------         -------------
INVESTING ACTIVITIES:


     Additions to property and equipment ...........................................       (1,402)                (971)
                                                                                    -------------         -------------
Net cash used in investing activities ..............................................       (1,402)                (971)
                                                                                    -------------         -------------
FINANCING ACTIVITIES:

     Net borrowings under accounts receivable securitization .......................            -                 3,000
     Net payments under revolving credit agreement .................................      (32,194)             (59,125)
                                                                                    -------------         -------------
Net cash used in financing activities ..............................................      (32,194)             (56,125)
                                                                                    -------------         -------------

Effects of changes in foreign exchange rates........................................          403                   253
                                                                                    -------------         -------------
Decrease in cash ...................................................................       (1,517)              (5,743)
Cash, beginning of period ..........................................................       15,281                24,586
                                                                                    -------------         -------------
CASH, END OF PERIOD.................................................................  $    13,764              $ 18,843
                                                                                         ========              ========

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash payments (refunds) during the period for:
     Interest ......................................................................       $6,243                $5,534
     Income taxes ..................................................................       (1,712)                   63


</TABLE>

            See Notes to Condensed Consolidated Financial Statements.

                                       -5-

<PAGE>


              Notes to Condensed Consolidated Financial Statements
                        Three Months Ended March 31, 1999
                                   (Unaudited)


1.  Basis of Presentation

     The  condensed  consolidated  balance  sheet as of March  31,  1999 and the
condensed  consolidated   statements  of  income  and  of  cash  flows  for  the
three-month  periods  ended  March 31,  1998 and 1999,  have  been  prepared  by
Core-Mark International, Inc. (the "Company"). In the opinion of management, all
adjustments,  consisting  only of normal  recurring  adjustments,  necessary  to
present  fairly the  financial  position  of the  Company at March 31, 1999 with
respect  to  the  interim  financial  statements,  and  of  the  results  of its
operations  and cash  flows  for the  interim  periods  then  ended,  have  been
included.  The results of operations for the interim periods are not necessarily
indicative of the operating results for the full year.

     The  condensed  consolidated  balance  sheet as of December  31,  1998,  is
derived  from  the  audited  financial  statements  but  does  not  include  all
disclosures  required by generally  accepted  accounting  principles.  The notes
accompanying  the consolidated  financial  statements of the Company included in
the Company's  Annual  Report on Form 10-K for the year ended  December 31, 1998
("1998 Form 10-K") include a description of the Company's significant accounting
policies and additional  information  pertinent to an  understanding of both the
December 31, 1998 balance sheet and the interim  financial  statements  included
herein.

2.  Inventories

     The condensed  consolidated  financial  statements have been prepared using
the LIFO  method  of  accounting  for  inventories.  The use of the LIFO  method
resulted in an increase  in cost of goods sold and a  corresponding  decrease in
inventories  of $800,000  and $100,000 for the three months ended March 31, 1998
and 1999,  respectively.  Interim LIFO  calculations  are based on  management's
estimates of year-end inventory levels and inflation rates for the year.

3.  Excise Taxes

     State and  provincial  excise taxes paid by the Company on cigarettes  were
$112.2  million and $128.8 million for the three months ended March 31, 1998 and
1999,  respectively.  These  amounts are included in net sales and cost of goods
sold for the periods indicated.


4.  Comprehensive Income

     The Company's  total  comprehensive  income was $463,000 and $2,669,000 for
the three  months  ended March 31, 1998 and 1999  respectively,  which  included
other comprehensive income related to foreign currency translation adjustments.

5. Segment Information

     Management has determined that the only  reportable  segment of the Company
is its wholesale  distribution  segment,  based on the level at which  executive
management  reviews  the  results  of  operations  in  order  to make  decisions
regarding  performance  assessment  and resource  allocation.  There has been no
change in the segment  reported or the basis of measurement of segment profit or
loss from that which was  reported in the  Company's  1998 Form 10-K.  Wholesale
distribution  segment  information for the three-month periods ended March 31 is
set forth below (dollars in thousands):

<TABLE>
<CAPTION>

                                                                                           1998         1999
                                                                                           ----         ----
<S>                                                                                         <C>          <C>    

         Net sales from external customers.............................                  $563,220     $629,452

         Segment pre-tax operating income (1)..........................                     2,053        4,884
</TABLE>


         -----------------
         (1)  Represents   operating  income,   including   allocated  interest
              expense,   but  excluding   amortization  of  goodwill  and  debt
              refinancing costs, and income taxes.

                                       -6-
<PAGE>


5. Segment Information (Cont.)

     Segment  assets as of  December  31,1998  and March 31,  1999 are set forth
below (dollars in thousands):
<TABLE>
<CAPTION>
                                                                                           1998         1999
                                                                                           ----         ----
<S>                                                                                         <C>         <C>

          Segment Assets ..........................................................      $341,583     $302,401

     A  reconciliation  of  the  segment  information   reported  above  to  the
consolidated financial statements is as follows (dollars in thousands):


</TABLE>


          INCOME (LOSS) BEFORE INCOME TAXES


<TABLE>
<CAPTION>
                                                                                           1998          1999
                                                                                           ----          ----
<S>                                                                                         <C>          <C>

         Segment information ..........................................                   $ 2,053      $ 4,884
         Less: Goodwill and other unallocated amortization ............                       654          562
                 Interest expense: unallocated and other...............                     1,045           18
                 Amortization of debt refinancing costs ...............                       374          318
                                                                                           -------     -------
         Consolidated total............................................                     $ (20)     $ 3,986
                                                                                           =======     =======


         INTEREST EXPENSE
                                                                                           1998          1999
                                                                                           ----          ----

         Segment information...........................................                   $ 3,251      $ 3,377
         Add: Unallocated and other....................................                     1,045           18
                                                                                          -------      -------
         Consolidated total............................................                   $ 4,296      $ 3,395
                                                                                          =======      =======


         ASSETS
                                                                                           1998          1999
                                                                                           ----          ----

         Segment Information ..........................................                  $341,583     $302,401
         Add: Corporate and other .....................................                    17,807       10,820
                                                                                          -------      -------
         Consolidated total ...........................................                  $359,390     $313,221
                                                                                          =======      =======
</TABLE>

                                       -7-

<PAGE>





     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS


     The following  discussion  should be read in conjunction with  Management's
Discussion and Analysis and the discussion under the heading "Legal Proceeding -
Regulatory and Legislative Matters" included in the Company's 1998 Form 10-K.


General

     The  Company  is one  of the  largest  broad-line,  full-service  wholesale
distributors of packaged consumer products to the convenience retail industry in
western  North  America.   The  products  distributed  by  the  Company  include
cigarettes,  food  products  such as candy,  fast food,  snacks,  groceries  and
non-alcoholic beverages, and non-food products such as film, batteries and other
sundries,  health and beauty  care  products  and  tobacco  products  other than
cigarettes.  In the quarter ended March 31, 1999, approximately 69%, 21% and 10%
of the  Company's  net sales were derived  from  cigarettes,  food  products and
non-food products, respectively.


Tobacco Industry Business Environment

     Manufacturers and distributors of cigarettes and other tobacco products are
currently  facing a number  of  significant  issues  that  affect  the  business
environment in which they operate  including  proposed  additional  governmental
regulation;  actual and proposed  excise tax  increases  (see "Impact of Tobacco
Taxes"  below);  increased  litigation  involving  health  and other  effects of
cigarette  smoking and other uses of tobacco;  and  potential  litigation by the
U.S. Department of Justice to recover federal Medicare costs allegedly connected
to smoking.

     In August 1996, the United States Food and Drug  Administration (the "FDA")
determined  that it had  jurisdiction  over  cigarettes  and  smokeless  tobacco
products  and  issued  regulations   restricting  the  sale,   distribution  and
advertising of cigarette and smokeless tobacco  products,  especially to minors.
The FDA regulations are  significant  not only because of their  substance,  but
also because the FDA has determined that it has jurisdiction over cigarettes and
smokeless  tobacco  as  "combination  products  having  both a  drug  component,
including  nicotine,  and device  components."  The  regulations  regulate  such
products  as  "devices".  In April 1997 the U.S.  District  Court for the Middle
District of North Carolina held that the FDA could impose restrictions on access
and  labeling of tobacco  products,  but did not have  authority to restrict the
promotion and advertisement of such products. The court stayed implementation of
the FDA  regulations  except for those  establishing a federal minimum age of 18
for the sale of tobacco products and requiring proof of age for anyone under the
age of 27. On August 14, 1998,  however,  the United States Court of Appeals for
the Fourth Circuit reversed the decision of the District Court, finding that the
FDA lacked  statutory  authority to regulate tobacco  products  altogether.  The
FDA's  petitions for rehearing and rehearing en banc by the Fourth  Circuit were
denied,  but, on April 26, 1999 the Supreme Court  granted  certiorari to review
the decision of the Court of Appeals.  A date for  arguments on the case has not
yet been set.

     In June 1997, a so called "national settlement" of many of these issues was
proposed following  negotiations among major U.S. tobacco  manufacturers,  state
attorneys general,  representatives of the public health community and attorneys
representing  plaintiffs in certain smoking and health litigation.  The national
settlement required  implementation by federal  legislation,  however,  and such
legislation  was  considered  but not passed by the  Congress  in 1998.  Similar
federal legislation has not been introduced to date in 1999.

     In light of failure of the  national  settlement  legislation,  in November
1998 the four largest U.S. cigarette  manufacturers and the attorneys general of
46 states, five territories, and the District of Columbia agreed to a settlement
of approximately $400 billion for public  health-care costs allegedly  connected
to smoking.  The  settlement - which takes effect in each settling  jurisdiction
when the courts in each such  jurisdiction  enter a final consent decree and any
appeals  of such  decree  are  disposed  of or become  time-barred  - allows for
payment of the agreed sum by the cigarette  manufacturers over 25 years, settles
the state and  territory  health-care  claims  against the tobacco  industry and
imposes a number of new marketing,  advertising, sales and other restrictions on
tobacco  products.  As a direct result of this  settlement,  the major cigarette
manufacturers  raised the  wholesale  price of  cigarettes  by $4.50 per carton,
effective November 24, 1998, bringing the total per-carton price increase in the
United States in 1998 to $6.35.

     Included  in the  terms  of the  settlement  are  conditions  that  tobacco
companies  participating  in  the  settlement  may  not:  target  youth  in  the
advertising, promotion or marketing of tobacco products; use tobacco brand names
to sponsor  concerts,  athletics  events or other events in which a  significant

                                      -8-

<PAGE>

percentage  of the  audience  is under 18 years of age;  advertise  products  in
conspicuous  places  outdoors  (such  as  billboards)  or on  transit  vehicles;
merchandise a tobacco brand name through the marketing,  distribution or sale of
apparel or other  merchandise;  provide free samples of tobacco  products in any
area except on adults-only facility; distribute or sell cigarettes in pack sizes
of less than 20; or lobby state legislatures on certain anti-tobacco  initatives
(such as  limitations  on  youth  access  to  vending  machines).  Many of these
provisions took effect in November 1998;  most of the remaining  provisions will
take effect by April 23, 1999.  The Company is unable to assess the effects that
this agreement will have on the sale of the Company's products;  there can be no
assurance that these new restrictions will not result in a material reduction of
the consumption of tobacco  products in the United States and thus will have not
a material adverse effect on the Company's business and financial position.

     In early 1999, the President of the United States  requested the Department
of Justice to review whether the United States can recover various  expenditures
for  medical  costs  incurred  by smokers or former  smokers  which were paid or
reimbursed by the federal  government.  To date, the Justice  Department has not
taken any  action  to do so,  but there  can be no  assurance  that the  federal
government will not commence litigation against the tobacco  manufacturers or as
to the outcome of any such litigation.  

     Effective  January 1, 1999,  the State of  California  increased  the state
excise  tax on  cigarettes  by $5.00 per  carton.  California  is the  Company's
largest market,  representing approximately 37% of carton sales during the three
months ended March 31, 1999.

     The Company believes that price and tax increases of the magnitude recently
experienced  will have a negative impact on overall industry unit sales and will
negatively affect the Company's sales of tobacco products.  The Company does not
believe that it is able to quantify the impact of these higher  prices and taxes
on future sales of cigarettes  and other tobacco  products.  Manufacturer  price
increases will also increase the Company's debt and interest expense levels. The
Company  believes that it has adequate  financing  arrangements  in place at the
present time to finance the additional working capital  requirements of the most
recent  manufacturer price increases.  However,  depending upon future levels of
manufacturer price increases, or if the terms or amounts of state and provincial
excise  taxes were  adversely  changed,  the  Company  may be  required  to seek
additional   financing  in  order  to  meet  future   higher   working   capital
requirements.

     Over the past  decade,  various  state and local  governments  have imposed
significant regulatory restrictions on tobacco products,  including sampling and
advertising  bans or  restrictions,  packaging  regulations and  prohibitions on
smoking in  restaurants,  office  buildings  and public  places.  With a limited
number of exceptions,  the state Medicaid  litigation  settlement  prohibits the
participating  tobacco  manufactureres from challenging any restriction relating
to tobacco  control  enacted prior to June 1, 1998.  Additional  state and local
legislative  and  regulatory  actions are being  considered and are likely to be
promulgated  in the future.  The Company is unable to assess the future  effects
that these various proposals may have on the sale of the Company's products.

     The Company's  business  strategy has  included,  and continues to include,
increasing  sales of higher margin,  non-tobacco  products,  a strategy which is
intended  to lessen the impact of  potential  future  declines in unit sales and
profitability of its tobacco distribution business.

THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998

     NET SALES.  Net sales for the three months ended March 31, 1999 were $629.5
million, an increase of $66.2 million or 11.8% over the same period in 1998. The
increase  in net  sales  was  primarily  due to an  increase  in  net  sales  of
cigarettes,  as well as increased  sales of food and  non-food  products in 1999
compared to 1998.

     Net sales of  cigarettes  for the three  months  ended  March 31, 1999 were
$435.3  million,  an increase of $60.2  million or 16.0% over the same period in
1998. The increase in net sales of cigarettes was  principally  due to increases
in  manufacturers'  list  prices  as well as the $5.00 per  carton  increase  in
California  state excise taxes which became  effective  January 1, 1999,  all of
which  have been  passed  on to the  Company's  customers  in the form of higher
prices.  The  Company's  total  cigarette  unit sales for the three months ended
March 31, 1999 were 17.8 million  cartons,  a decrease of 3.3 million cartons or
15.6% from the same period of 1998.  Cigarette carton sales in the U.S. declined
by 3.2  million  cartons  or 17.9%  compared  to the same  period  in 1998.  The
decrease in the Company's carton sales occurred primarily in California, and was
due to a number of factors.  Consumers in California  purchased large quantities
of cigarettes in December 1998, in advance of the increase in state excise taxes
which  became  effective  January  1,  1999.  This hurt the  Company's  sales of
cigarettes in the first three months of 1999. Additionally, the competition from
so called "grey market" cigarettes  continued to be intense in California.  Grey
market cigarettes are cigarettes  produced by the major tobacco  companies,  and
intended for export only, but which are reintroduced into the domestic market by
unauthorized   distributors   at  prices   substantially   lower  then  domestic
cigarettes. For the three months ended March 31, 1999, cigarette carton sales in
the United States, outside of California, were substantially the same in 1999 as
in the comparable period of 1998.

                                       -9-

<PAGE>

     Net sales of food and  non-food  products  for the three months ended March
31, 1999 were $194.1 million,  an increase of $6.0 million or 3.2% over the same
period  in 1998.  

     GROSS  PROFIT.  Gross  profit for the three months ended March 31, 1999 was
$45.6  million,  an  increase  of $4.9  million or 12.0% over the same period in
1998.  The increase was primarily  due to sales  increases in both the cigarette
and food and non-food  categories.  The gross profit margin for the three months
ended  March 31,  1999  increased  slightly to 7.24% of net sales as compared to
7.22% of net sales for the  comparable  period in 1998.  Both cigarette and food
and non-food categories experienced slight increases in gross profit margin. For
the three months ended March 31, 1999,  the Company  recognized  LIFO expense of
$0.1  million  compared  to $0.8  million  for  comparable  period in 1998.  The
decrease  in LIFO  expense  for the  three  months  ended  March 31,  1999,  was
primarily the result of a cigarette  price  increase  that  occurred  during the
three months ended March 31, 1998, whereas no such increase occurred in 1999.

     OPERATING  AND  ADMINISTRATIVE   EXPENSES.   Operating  and  administrative
expenses  for the three  months  ended  March 31,  1999 were $37.9  million,  an
increase  of $1.8  million or 5.1% over the same period in 1998.  However,  such
expenses  for the three  months  ended March 31, 1999  decreased  to 6.0% of net
sales as compared to 6.4% for the same period in 1998.  The decline in operating
expenses as a percent of net sales is primarily  due to the  increased net sales
resulting from cigarette price  increases  which occurred  primarily in the last
quarter  of 1998.  

     OPERATING  INCOME. As a result of the foregoing  factors,  operating income
for the three months ended March 31, 1999 was $7.7 million,  an increase of $3.0
million or 65.6%  compared to the same period in 1998.  As a  percentage  of net
sales,  operating  income for the three months ended March 31, 1999 was 1.2%, as
compared to 0.8% for the same period in 1998.

     NET INTEREST EXPENSE. Net interest expense for the three months ended March
31, 1999 was $3.4 million, a decrease of $0.9 million or 21.0% compared to 1998.
The net decrease  resulted from a decrease in the Company's  average debt levels
and a decline in the average borrowing rate as a result of the implementation of
the accounts  receivable  securitization  program,  which was effective April 1,
1998.


Liquidity and Capital Resources

     The Company's  liquidity  requirements  arise primarily from the funding of
its  working  capital  needs,  capital  expenditure  programs  and debt  service
requirements with respect to its credit facilities. The Company has no mandatory
reductions  of  principal  on  its  Revolving  Credit  Facility,   its  Accounts
Receivable  Facility or its $75 million Senior Subordinated Notes prior to their
final maturities in 2003. The Company has  historically  financed its operations
through internally generated funds and borrowings under its credit facilities.

     In November 1998,  the four largest U.S.  cigarette  manufacturers  and the
state attorneys general of 46 states agreed to a multi-billion dollar settlement
over public health costs  connected to smoking (see "Tobacco  Industry  Business
Environment").   As  a  direct   result  of  this   settlement,   the  cigarette
manufacturers  raised the  wholesale  price of  cigarettes  by $4.50 per carton,
effective  November 24, 1998, in order to cover initial costs of the settlement.
This  manufacturer  price increase  resulted in an increase in  inventories  and
trade accounts receivable for the Company,  and correspondingly  higher debt and
interest levels. The Company believes that it will be able to adequately finance
the  corresponding  increase  in working  capital  requirements  relating to its
existing  business  under its current  credit  facilities.  At current levels of
business  activity,  the Company has substantial excess borrowing capacity under
its current credit  facilities.  However,  if manufacturers'  price increases or
federal  excise  tax  increases  (over and above  currently  enacted  increases)
continued  to sharply  escalate,  or if payment  terms for state and  provincial
taxes were adversely  changed,  the Company might be required to seek additional
financing in order to meet such higher working capital requirements.

     The Company's debt obligations  totaled $152.0 million at March 31, 1999, a
decrease of $56.1 million or 27.0% from $208.1 million at December 31, 1998. The
net decrease in outstanding debt is primarily due to decreased borrowings needed
to finance working capital funding requirements. Debt requirements are generally
the  highest at  December  31,  when the  Company  historically  carries  higher
inventory.

     The  Company's  principal  sources of  liquidity  are net cash  provided by
operating  activities  and  its  credit  facilities.  At year  end  the  Company
typically  carries  higher  inventories  which  are then  liquidated  in  future
periods. Therefore, net cash provided by operating activities is typically lower
at the end of any fiscal year compared to interim periods.

                                      -10-

<PAGE>

     The Company made capital  expenditures of $1.0 million in the first quarter
of 1999.  For the  remainder  of  1999,  the  Company  estimates  it will  spend
approximately $6 to $7 million for capital requirements,  principally consisting
of warehouse and other equipment.


Impact of Tobacco Taxes

     State and Canadian provincial tobacco taxes represent a significant portion
of the Company's net sales and cost of goods sold attributable to cigarettes and
other tobacco  products.  In the first quarter of 1999, such taxes on cigarettes
represented  approximately  26% of  cigarette  net sales in the U.S.  and 46% in
Canada.  In  general,  such  taxes  have been  increasing,  and many  states and
Canadian  provinces are currently  weighing proposals for higher excise taxes on
cigarettes and other tobacco products.

     Effective  January 1, 1999, the State of California  increased excise taxes
on cigarettes by $5.00 per carton as well as increased taxes on cigars and other
tobacco  products. 

     Under  current law,  almost all state and  Canandian  provincial  taxes are
payable by the Company  under  credit terms  which,  on the average,  exceed the
credit  terms the Company has  approved  for its  customers  to pay for products
which include such taxes.  This practice has benefited the Company's  cash flow.
If the Company were required to pay such taxes at the time such  obligation  was
incurred  without  the  benefit  of credit  terms,  the  Company  would  incur a
substantial  permanent increase in its working capital requirements and might be
required  to seek  additional  financing  in order to meet such  higher  working
capital  requirements.  Consistent  with  industry  practices,  the  Company has
secured a bond to guarantee  its tax  obligations  to those states and provinces
requiring such a surety (a majority of states in the Company's operating areas).

     The U.S.  federal excise tax on cigarettes is currently $2.40 per carton of
cigarettes.  The federal excise tax is scheduled to increase by $1.00 per carton
of cigarettes  starting in the year 2000 and by an additional $.50 per carton of
cigarettes in 2002.  Unlike the state and provincial taxes described above, U.S.
federal excise taxes on cigarettes are paid by the cigarette  manufacturers  and
passed  through to the Company as a component  of the cost of  cigarettes.  Such
increases in U.S.  federal  taxes will increase the  Company's  working  capital
requirements  by  increasing  the  balances  of  its  inventories  and  accounts
receivable.  The President as well as various members of Congress have suggested
additional excise taxes on cigarette and tobacco products, either as part of the
proposed  legislative  resolution of various issues  affecting the U.S.  tobacco
industry discussed above or to finance unrelated federal spending.


Impact of Year 2000 Compliance Issues

     In accordance with the safe harbor provisions of the Private Securities Act
of 1995,  the Company notes that certain  statements  contained in the following
discussion  concerning year 2000 compliance issues are forward-looking in nature
and  are  subject  to  many  risks  and  uncertainties.   These  forward-looking
statements  include such matters as the Company's  projected state of readiness,
the Company's projected cost of remediation,  the expected date of completion of
each  phase  and  the  expected  completion  date  of  contingency  plans.  Such
statements also constitute "year 2000 readiness  disclosure"  within the meaning
of the year 2000 Information and Readiness Disclosure Act.

     The Company relies upon various information  technology and non-information
technology systems that the Company is currently in the process of assessing and
modifying  or  converting  to be  year  2000  compliant.  Year  2000  compliance
indicates that computer software,  hardware and embedded  processors are able to
correctly  process the year 2000 date parameter.  The systems being assessed for
year 2000 compliance include the Company's  computer programs,  certain building
infrastructure  components (including elevators,  alarm systems and certain HVAC
systems),  certain data collection and  transmission  devices and the systems of
customers,  vendors and other  constituents  with whom the Company has  material
relationships   that  could  have  an  impact  on  the   Company's   operations.
Non-compliance could result in a disruption of the business,  which could have a
material  impact on the  Company's  results of  operations,  financial  position
and/or cash flows.

     The most  reasonable  and  likely  result  of  non-compliance  would be the
Company's   inability  to  utilize  its  computer   systems  to  process   daily
transactions,  which  could  result in  increased  operating  costs and  delayed
shipments  to  customers,  and as a result,  the possible  monetary  losses from
canceled  future  business  and  lawsuits  for  breach of  contract  with  these
customers.  The Company is  currently in the process of  developing  contingency
plans for  various  business  disruptions,  which  will  include  procedures  to
mitigate the effect of year 2000  non-compliance  issues.  The contingency plans
will include  procedures for alternate  processing of daily  transactions in the
event  of an  inability  to use  the  Company's  computer  systems,  as  well as
procedures  for   transmitting  and  receiving  data  from  third  parties  with
non-compliant systems.

                                      -11-

<PAGE>

     The assessment phase of the Company's  systems was complete as of March 31,
1999.  The Company  has  completed  modification  or  conversion  and testing of
approximately  95% of the  Company's  systems as of March 31, 1999.  The Company
presently  believes that the modification or conversion of existing systems will
be completed in the second quarter of 1999.

     The Company has initiated formal communications with customers, vendors and
other  constituents  with  whom  the  Company  has  material  relationships,  to
determine the extent to which the Company is vulnerable to those third  parties'
failure to become year 2000 compliant.  The Company presently  believes that the
third  party  assessment  process  will be  completed  by June 30,  1999 and was
approximately  95%  complete  as of March  31,  1999.  However,  there can be no
assurance  that the systems of other  companies will be modified or converted on
time, which could have an adverse effect on the Company's operations.


     The Company has utilized and will continue to utilize internal resources to
modify or convert and test for year 2000  compliance.  The estimated  total cost
for the  assessment,  modification  or  converting  and testing of the Company's
systems is approximately $1.1 million.  These costs represent  approximately 44%
of the fiscal 1999 information  technology  department budgeted expenses and are
comprised  of  $0.1  million  for  assessment  and  $1.0  million  for  software
modification or conversion.  As a result of the year 2000 compliance effort, the
Company believes that no information technology projects have been deferred that
will  have a  material  impact  on the  Company's  operations.  All of the costs
related to year 2000  compliance  have been expensed as incurred,  and have been
and are expected to be, funded  through  operating  cash flows.  The Company has
incurred  approximately  $1.1  million of costs as of March 31,  1999 which were
comprised  of  $1  million  for   assessment   and  $1.0  million  for  software
modification or conversion.

     The costs  associated  with year 2000  compliance are based on management's
estimates,  which were derived  using  numerous  assumptions  of future  events,
including the cost and continued  availability of certain  resources,  and other
factors.  However,  there  can be no  assurance  that  these  estimates  will be
achieved and actual results could differ materially from those anticipated.


New Accounting Standards

     In 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting  Standards No. 133, "Accounting for Derivative  Instruments
and Hedging  Activities,"  which  standardizes  the accounting for  derivatives,
requiring  recognition  as either assets or liabilities on the balance sheet and
measurement at fair value.  The Company plans to adopt this statement for fiscal
1999. The Company has not yet  determined the effect  adoption of this statement
will  have  on  the  Company's  consolidated  financial  position,   results  of
operations or cash flows.

     In March 1998,  the  American  Institute of  Certified  Public  Accountants
issued Statement of Opinion ("SOP") 98-1,  "Accounting for the Costs of Computer
Software  Developed or Obtained for Internal Use." This SOP provides guidance on
accounting for the costs of computer software developed or obtained for internal
use. This SOP requires that entities  capitalize certain  internal-use  software
costs once certain criteria are met.  Currently,  the Company generally expenses
the costs of  developing  or obtaining  internal-use  software as incurred.  The
Company  is  currently  evaluating  SOP 98-1,  but does not  expect it to have a
material impact on its consolidated financial statements.  This SOP is effective
for the Company's  financial  statements  for the year ended  December 31, 1999.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


     The Company  believes there has been no material  change in its exposure to
market risk from that  discussed in the Company's  1998  Consolidated  Financial
Statements.

                                      -12-

<PAGE>


PART II - OTHER INFORMATION


ITEM 1.   Legal Proceedings



     As  previously  reported,  in October 1996, a subsidiary of the Company was
named as a  defendant  in a class  action  lawsuit  filed in state  court in New
Mexico. The other defendants include the principal U.S. tobacco  manufactures as
well as other distributors. The case is brought on behalf of a putative class of
smokers who reside in New Mexico,  each of whom is allegedly nicotine dependent.
The suit seeks, on behalf of the class,  compensatory damages,  punitive damages
and equitable  relief,  including medical  monitoring of the class members.  The
Company was dismissed from this suit on January 6, 1999.

     As  previously  reported,  in January  1998,  the Company was served with a
summons and First Amended Complaint in an action brought by Operating  Engineers
Local 12 Health and Welfare Trust (on behalf of itself and all others  similarly
situated),  now part of a coordinated  proceeding  pending in the Superior Court
for San Diego County, against the principal tobacco  manufacturers,  the Company
and other  distributors and retailers of tobacco products.  The compliant seeks,
inter alia, compensatory and punitive damages,  restition for monies expended by
the Trust for health  care of its members who have used  tobacco  products,  and
forms of injuctive relief.  

     From April 1998 through the date of this filing, the Company was named as a
defendant in 24 additional  similar  actions brought by various union health and
welfare trusts, coordinated into a single proceeding now pending in the Superior
Court for San Diego County, against major tobacco manufacturers as well as other
distributors.  The  complaints  seek,  inter  alia,  compensatory  and  punitive
damages,  restitution  for monies  expended by the trusts for health care of its
members who have used tobacco products, and forms of injunctive relief.

     As previously  reported,  in November  1998,  the Company was served with a
summons  and  complaint  in an action  brought by the  Pechanga  Band of Luiseno
Mission Indians,  which is now part of the coordinated  proceedings  involved in
the union health and welfare trust cases noted above. In May 1999 this complaint
was ammended and the name of the case is now U Tu Utu Gwaitu Paiute  Tribe,  et.
al..  The  complaint  seeks,  inter alia,  compensatory  and  punitive  damages,
restitution  for monies expended by the tribe for health care of its members who
have used tobacco products, and forms of injunctive relief.

     The  Company  does not  believe  that  these  actions  will have a material
adverse  effect on the  Company's  financial  condition.  The  Company  has been
indemnified with respect to certain claims alleged in each of the above actions.

     In  addition,  the  Company is a party to other  lawsuits  incurred  in the
ordinary course of its business.  The Company believes it is adequately  insured
with respect to such  lawsuits or that such  lawsuits  will not result in losses
material to its consolidated financial position or results of operations.


                                      -13-

<PAGE>


Item 2:  Changes in Securities and Use of Proceeds

         Not applicable


Item 3: Defaults Upon Senior Securities

         Not applicable


Item 4:  Submission of Matters to a Vote of Security Holders

         Not applicable


Item 5: Other Information

         Not applicable


Item 6: Exhibits and Reports on Form 8-K

(a)      Exhibits


         27       Financial Data Schedule


(b)      Reports on Form 8-K:

                  None.

                                      -14-

<PAGE>


 SIGNATURE



         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned,  thereunto  duly  authorized  in the City of South  San  Francisco,
California, on May 12, 1999.


                                     CORE-MARK INTERNATIONAL, INC.



                                     By  /s/  Leo F. Korman
                                        -----------------------------------
                                        Leo F. Korman, Senior Vice President and
                                                 Chief Financial Officer





































                                      -15-