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 September 30, 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 October 31, 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;
increases in federal and state taxes on tobacco products that have the effect of
increasing the prices of such 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
PART I - FINANCIAL INFORMATION
<S>                                                                         <C>

Item 1: Financial Statements

     Condensed Consolidated Balance Sheets as of December 31, 1998 and
     September 30, 1999.....................................................   3
     Condensed Consolidated Statements of Income for the three and nine months
     ended September 30, 1998 and 1999......................................   4
     Condensed Consolidated Statements of Cash Flows for the nine months ended
     September 30, 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................................................................  13

PART II - OTHER INFORMATION

     Item 1:  Legal Proceedings.............................................  14
     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,        September 30,
                                                                                        1998                1999
                                                                                   -------------        -------------
                                                                                                         (Unaudited)
<S>                                                                                     <C>                   <C>

Assets
Current assets:
     Cash ......................................................................    $  24,586             $  12,773
     Receivables:
         Trade accounts, less allowance for doubtful accounts of $2,761 and
              $2,360, respectively..............................................      103,412               113,721
         Other .................................................................       12,578                10,411
     Inventories, net of LIFO allowance of $34,332 and $40,086, respectively....      112,481                71,003
     Prepaid expenses and other.................................................        6,576                 6,029
                                                                                     --------              --------
         Total current assets ..................................................      259,633               213,937

Property and equipment .........................................................       61,332                64,533
     Less accumulated depreciation .............................................      (33,283)              (36,922)
                                                                                     --------              --------
     Net property and equipment ................................................       28,049                27,611

Other assets  ..................................................................        7,227                 6,109
Goodwill, net of accumulated amortization of $19,375 and $20,937,
     respectively ..............................................................       64,481                62,919
                                                                                     --------              --------
                                                                                     $359,390              $310,576
                                                                                     ========              ========
Liabilities and Shareholders' Equity
Current liabilities:
     Trade accounts payable.....................................................    $  48,867             $  52,260
     Cigarette and tobacco taxes payable........................................       45,073                52,984
     Income taxes payable.......................................................        2,698                 2,874
     Deferred income taxes......................................................        6,992                 6,809
     Other accrued liabilities..................................................       34,514                31,011
                                                                                     --------              --------
         Total current liabilities..............................................      138,144               145,938

Long-term debt..................................................................      208,124               137,649
Other accrued liabilities and deferred income taxes.............................        9,260                10,928
                                                                                     --------              --------
     Total liabilities..........................................................      355,528               294,515

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)               (3,889)
     Accumulated other comprehensive loss:
         Foreign currency translation adjustments...............................       (4,225)               (3,214)
         Minimum pension liability adjustment...................................       (3,012)               (3,012)
                                                                                     --------              --------
         Total shareholders' equity.............................................        3,862                16,061
                                                                                     --------              --------
                                                                                     $359,390              $310,576
                                                                                     ========              ========
</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                      Nine Months
                                                                Ended September 30,              Ended September 30,
                                                           -----------------------------    -----------------------------
                                                                 1998         1999                1998           1999
                                                               --------     --------            --------       --------
<S>                                                               <C>          <C>                <C>            <C>

Net sales............................................          $657,893     $760,909          $1,830,164     $2,097,767
Cost of goods sold...................................           610,325      711,623           1,697,485      1,952,239
                                                               --------     --------            --------       --------
    Gross profit.....................................            47,568       49,286             132,679        145,528
Operating and administrative expenses................            38,830       38,722             111,880        115,694
                                                               --------     --------            --------       --------
    Operating income.................................             8,738       10,564              20,799         29,834

Interest expense, net................................             3,678        3,094              11,666          9,589
Debt refinancing costs...............................               311          318               1,884            955
                                                               --------     --------            --------       --------
    Income before income taxes.......................             4,749        7,152               7,249         19,290

Income tax expense...................................             2,183        3,004               3,332          8,102
                                                               --------     --------            --------       --------
    Net income.......................................          $  2,566     $  4,148          $    3,917     $   11,188
                                                               ========     ========            ========       ========
</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>

                                                                                                  Nine Months
                                                                                              Ended September 30,
                                                                                   ----------------------------------------
                                                                                           1998                  1999
                                                                                         --------              --------
<S>                                                                                         <C>                    <C>

CASH PROVIDED BY OPERATING ACTIVITIES:

Net income .....................................................................       $    3,917           $    11,188

     Adjustments to  reconcile  net  income to net cash  provided  by  operating
         activities:
     LIFO expense...............................................................            5,481                 5,754
     Depreciation and amortization..............................................            4,686                 4,804
     Amortization of goodwill...................................................            1,561                 1,562
     Amortization of debt refinancing fees......................................            1,884                   955
     Deferred income taxes......................................................             (245)                1,499
     Changes in operating assets and liabilities................................            3,502                35,877
                                                                                         --------              --------
Net cash provided by operating activities ......................................           20,786                61,639
                                                                                         --------              --------
INVESTING ACTIVITIES:

     Additions to property and equipment .......................................           (3,932)               (3,988)
                                                                                         --------              --------
Net cash used in investing activities ..........................................           (3,932)               (3,988)
                                                                                         --------              --------
FINANCING ACTIVITIES:

     Net payments under revolving credit agreement..............................          (88,530)              (56,475)
     Net proceeds (payments) under securitization of accounts receivable........           72,000               (14,000)
     Debt refinancing fees......................................................           (1,541)                   --
                                                                                         --------              --------
Net cash used in financing activities ..........................................          (18,071)              (70,475)
                                                                                         --------              --------

Effects of changes in foreign exchange rates....................................           (1,176)                1,011
                                                                                         --------              --------
Decrease in cash ...............................................................           (2,393)              (11,813)
Cash, beginning of period ......................................................           15,281                24,586
                                                                                         --------              --------
CASH, END OF PERIOD.............................................................       $   12,888           $    12,773
                                                                                         ========              ========

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash payments during the period for:
     Interest ..................................................................       $   13,588           $    11,591
     Income taxes ..............................................................            2,019                 6,399

</TABLE>


            See Notes to Condensed Consolidated Financial Statements.

                                      -5-
<PAGE>


              Notes to Condensed Consolidated Financial Statements
                      Nine Months Ended September 30, 1999
                                   (Unaudited)


1.  Basis of Presentation

     The condensed  consolidated  balance  sheet as of September  30, 1999,  the
condensed  consolidated  statements of income for the three-month and nine-month
periods  ended  September  30,  1998 and 1999,  and the  condensed  consolidated
statements of cash flows for the nine-month periods ended September 30, 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 September 30, 1999 with respect to the interim financial statements,  and the
results of its operations and cash flows for the interim periods ended September
30, 1998 and 1999, 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 $1.4  million  and  $5.5  million  for the  three  months  ended
September 30, 1998 and 1999, respectively, and $5.5 million and $5.8 million for
the nine months ended  September 30, 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 on cigarettes  included in the Company's
net sales and cost of goods sold were $123.4  million and $155.0 million for the
three months ended September 30, 1998 and 1999,  respectively and $352.0 million
and $430.1  million  for the nine  months  ended  September  30,  1998 and 1999,
respectively.

4.  Comprehensive Income

     The Company's total comprehensive  income was $1.7 million and $4.1 million
for the three months ended September 30, 1998 and 1999,  respectively,  and $2.7
million and $12.2 million for the nine months ended September 30, 1998 and 1999,
respectively,  which  reflects  net  income  and  foreign  currency  translation
adjustments.

                                      -6-
<PAGE>


Notes to Condensed Consolidated Financial Statements (cont.)


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  and nine-month  periods
ended September 30, and segment assets as of December 31, 1998 and September 30,
1999 are set forth below (dollars in thousands):

<TABLE>
<CAPTION>


                                                                                Three Months              Nine Months
                                                                             Ended September 30,       Ended September 30,
                                                                             ------------------        ------------------

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

         Net sales from external customers.............................     $657,893     $760,909   $1,830,164  $2,097,767

         Segment pretax operating income  (1)..........................     $  5,979     $  7,886   $   12,949  $   21,848
         Less: Goodwill and other unallocated amortization ............          659          569        1,971       1,695
               Interest expense: unallocated and other.................          260         (153)       1,845        (92)
               Amortization of debt refinancing costs .................          311          318        1,884         955
                                                                            --------     --------     --------    --------
         Consolidated income before income taxes.......................     $  4,749     $  7,152   $    7,249  $   19,290
                                                                            ========     ========     ========    ========
</TABLE>

<TABLE>
<CAPTION>

         Assets                                                            December 31, September 30,
                                                                              1998         1999
                                                                            --------     --------
<S>                                                                            <C>          <C>

         Segment assets................................................     $341,583     $301,550
         Add: Corporate and other......................................       17,807        9,026
                                                                            --------     --------
         Consolidated assets...........................................     $359,390     $310,576
                                                                            ========     ========
</TABLE>

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

                                      -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. For the nine months ended September 30, 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
face 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 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
to 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.  Briefing on the case has been  completed,
and oral argument before the Supreme Court has been set for December 1, 1999.

     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 an adults-only facility; distribute or sell cigarettes in pack sizes
of less than 20; or lobby state legislatures on certain anti-tobacco initiatives
(such as  limitations  on  youth  access  to  vending  machines).  Many of these
provisions  took effect in November  1998 and most of the  remaining  provisions
took 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 not have
a material adverse effect on the Company's business and financial position.

     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 manufacturers 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.

     On September 22, 1999,  the U.S.  Department of Justice filed "an action to
recover health care costs paid for and furnished...by the federal government for
lung cancer, heart disease, emphysema and other tobacco-related illnesses caused
by the fraudulent and tortious  conduct of..." the major tobacco  manufacturers.
The defendant companies announced that they would fight the litigation. Congress
did not include  funding for the $20 million  that the  President  requested  to
pursue this litigation,  and the President  included this funding omission among
the  reasons  for his  veto of the  Justice  Department  appropriations  bill on
October 26, 1999. If the Justice  Department  prevails in the litigation,  or if
the litigation is settled,  there can be no assurance  that the litigation  will
not result in  increased  cigarette  prices  and/or a material  reduction of the
consumption of tobacco  products in the United States,  and thus will not have a
material adverse affect on the Company's business and financial position.

     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 38% of carton sales during the nine
months ended September 30, 1999.

     The major  U.S.  cigarette  manufacturers  raised  the  wholesale  price of
cigarettes by $1.80 per carton, effective August 30, 1999.

     The Company believes that price and tax increases of the magnitude recently
experienced,  as well as increases  which occur in the future (see  "--Impact of
Tobacco Taxes"),  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.

     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  September  30, 1999  Compared to Three  Months  Ended
September 30, 1998

     NET SALES.  Net sales for the three  months ended  September  30, 1999 were
$760.9  million,  an increase of $103.0 million or 15.7% 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  September 30, 1999 were
$530.6  million,  an increase of $93.6  million or 21.4% 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
September 30, 1999 were 21.0 million cartons,  a decrease of 2.0 million cartons
or 8.9% from the same period of 1998. The decrease in the Company's carton sales

                                      -9-
<PAGE>

occurred  primarily in California,  and was due to a number of factors.  In both
1998, and in 1999, the competition from 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.  However,  in October 1999,  the
California  legislature  passed and the governor signed,  bill SB702, which will
make it illegal to affix state tax stamps to grey market cigarettes. If enforced
by the state of  California,  this bill could result in an  improvement  in the
Company's  California cigarette volume. For the three months ended September 30,
1999, cigarette carton sales in the United States,  outside of California,  were
substantially the same as in the comparable period of 1998.

     Net  sales  of food  and  non-food  products  for the  three  months  ended
September 30, 1999 were $230.3 million, an increase of $9.4 million or 4.3% over
the same period in 1998.

     GROSS  PROFIT.  Gross profit for the three months ended  September 30, 1999
was $49.3  million,  an increase of $1.7 million or 3.6% over the same period in
1998.  The increase was  primarily  due to the higher level of sales in both the
cigarette  and food and non-food  categories.  The gross  profit  margin for the
three months ended September 30, 1999 decreased to 6.5% of net sales as compared
to 7.2% of net sales for the comparable period in 1998. However,  the decline in
overall  gross  profit  margin was  primarily  due to the sharp  increase in the
wholesale cost of cigarettes over the past year. Gross margins on cigarettes are
significantly lower then the margins on food and non-food products, and the much
faster growth in cigarette revenues caused the reduction in margins.  During the
period, while cigarette gross profit margins declined slightly, gross profit per
carton  increased,  and the gross profit  margins on food and non-food  products
remained virtually unchanged.

     OPERATING  AND  ADMINISTRATIVE   EXPENSES.   Operating  and  administrative
expenses for the three months ended  September  30, 1999 were $38.7  million,  a
decrease of $0.1  million or 0.3% over the same period in 1998.  As a percent of
net sales,  expenses for the three months ended  September 30, 1999 decreased to
5.1% of net sales as  compared to 5.9% of net sales for the same period in 1998.
The decline in operating  expenses as a percent of net sales is primarily due to
the  higher  level  of  cigarette  net  sales  resulting  from  cigarette  price
increases, and a slight decline in warehouse and distribution costs.

     OPERATING  INCOME. As a result of the foregoing  factors,  operating income
for the three months ended September 30, 1999 was $10.6 million,  an increase of
$1.8 million or 20.9%  compared to the same period in 1998.  As a percentage  of
net sales,  operating  income for the three months ended  September 30, 1999 was
1.4%, as compared to 1.3% for the same period in 1998.

     NET  INTEREST  EXPENSE.  Net  interest  expense for the three  months ended
September  30,  1999 was $3.1  million,  a  decrease  of $0.6  million  or 15.9%
compared to 1998.  The net decrease  resulted  from a decrease in the  Company's
average debt levels.

     DEBT REFINANCING  COSTS.  Debt refinancing costs for the three months ended
September 30, 1999 were $0.3 million, and remained constant compared to the same
period in 1998.


Nine Months Ended September 30, 1999 Compared to Nine Months
Ended September 30, 1998

     NET SALES.  Net sales for the nine  months  ended  September  30, 1999 were
$2,097.8  million,  an increase of $267.6  million or 14.6% over the  comparable
period in 1998. The increase in net sales was due to an increase in net sales of
cigarettes and food and non-food products in 1999 compared to 1998.

     Net sales of cigarettes  for the nine months ended  September 30, 1999 were
$1,455.5  million,  an increase of $235.2  million or 19.3% over the prior year.
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 along to the Company's  customers.  The  Company's  total
cigarette  unit sales for the nine  months  ended  September  30, 1999 were 58.6
million cartons,  a decrease of 7.3 million cartons or 11.1% from the comparable
period in 1998. The decrease in the Company's carton sales occurred primarily in
California,  and was due to a number of factors.  In both 1998, and in 1999, the
competition from grey market  cigarettes  continued to be intense in California.
However,  in October 1999,  the California  legislature  passed and the governor
signed, bill SB702, which will make it illegal to affix state tax stamps to grey
market  cigarettes.  If  enforced by the state of  California,  this bill could

                                      -10-
<PAGE>

result in an improvement in the Company's  California  cigarette volume. For the
nine months  ended  September  30,  1999,  cigarette  carton sales in the United
States, outside of California,  were substantially the same as in the comparable
period of 1998.

     Net sales of food and non-food products for the nine months ended September
30, 1999 were  $642.3  million,  an  increase of $32.4  million or 5.3% over the
comparable period in 1998.

     GROSS PROFIT. Gross profit for the nine months ended September 30, 1999 was
$145.5 million,  an increase of $12.8 million or 9.7% from the comparable period
in 1998. The increase was primarily due to sales  increases in the cigarette and
food and non-food categories.  The gross profit margin for the nine months ended
September 30, 1999  decreased  slightly to 6.9% of net sales as compared to 7.3%
of net sales for the first nine months of 1998. However,  the decline in overall
gross profit  margin was  primarily  due to the sharp  increase in the wholesale
cost of  cigarettes  over  the  past  year.  Gross  margins  on  cigarettes  are
significantly lower then the margins on food and non-food products, and the much
faster growth in cigarette revenues caused the reduction in margins.  During the
period,  both  cigarette  gross  profit  margins,  and gross  profit  per carton
increased, while the gross profit margins on food and non-food products remained
virtually unchanged.

     OPERATING  AND  ADMINISTRATIVE   EXPENSES.   Operating  and  administrative
expenses for the nine months ended  September 30, 1999 were $115.7  million,  an
increase of $3.8 million or 3.4% over the  comparable  period in 1998.  However,
such expenses for the nine months ended  September 30, 1999 decreased to 5.5% of
net sales as compared to 6.1% for the comparable  period in 1998. The decline in
operating  expenses  as a percent  of net sales is  primarily  due to the higher
level of cigarette net sales resulting from cigarette price increases.

     OPERATING  INCOME. As a result of the foregoing  factors,  operating income
for the nine months ended  September 30, 1999 was $29.8 million,  an increase of
$9.0 million or 43.4% compared to the comparable period in 1998. As a percentage
of net sales,  operating income for the nine months ended September 30, 1999 was
1.4%, as compared to 1.1% for the comparable period in 1998.

     NET  INTEREST  EXPENSE.  Net  interest  expense for the nine  months  ended
September  30,  1999 was $9.6  million,  a  decrease  of $2.1  million  or 17.8%
compared to 1998.  The net decrease  resulted  from a decrease in the  Company's
average debt levels and a decline in the average  borrowing rates primarily as a
result of the accounts receivable  securitization  program,  which was effective
April 1, 1998.

     DEBT REFINANCING  COSTS.  Debt refinancing  costs for the nine months ended
September 30, 1999 were $1.0  million,  a decrease of $0.9 million or 49.3% over
the  comparable  period in 1998.  The decrease is a result of the write-off of a
portion of  unamortized  costs  relating to the  modification  of the  revolving
credit facility, which occurred in April 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.

     The Company's  debt  obligations  totaled  $137.6  million at September 30,
1999, a decrease of $70.5  million or 33.9% 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 which resulted
from the increase in net cash provided from operating activities  experienced in
1999.  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
higher at interim periods than at the end of any fiscal year.

     The Company made capital  expenditures  of $4.0 million for the nine months
ended  September 30, 1999. For the remainder of 1999,  the Company  estimates it
will spend approximately $2 to $3 million for capital requirements,  principally
consisting of warehouse and other equipment.

                                      -11-

<PAGE>

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. For the nine months ended September 30, 1999, such taxes
on cigarettes  represented  approximately 26% of cigarette net sales in the U.S.
and 45% 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 and also  increased  taxes on cigars and other
tobacco products.

     Under  current  law,  almost all state and  Canadian  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.

     In 1999,  the  Clinton  Administration  proposed  as part of its budget for
Fiscal Year 2000 that the excise tax on  cigarettes be increased by 55 cents per
pack (in addition to the  increases  already  scheduled  for 2000 and 2002),  in
order to avoid using the social security trust fund surplus to finance unrelated
federal spending. On October 19, 1999, the House of Representatives defeated tax
legislation  that  included  this  increase.  While the  Company  is  unaware of
additional  legislation  that might further  increase the federal  excise tax on
cigarettes,  there  can be no  assurance  that  similar  proposals  will  not be
considered in the future.


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 or state of
completion  of each  phase  and the  expected  date or  state of  completion  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 are  required  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 Company has
completed  the  assessment,  modification  or  conversion  and  testing  of  the
Company's  systems for year 2000  compliance.  The systems  that were  assessed,
modified or converted for year 2000 compliance  included the Company's  computer
programs, certain building infrastructure components (including elevators, alarm
systems and certain HVAC systems),  and certain data collection and transmission
devices.  Additionally, 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 were assessed for year 2000 compliance. The third party
assessment  process has also been completed.  Procedures have been undertaken by
third parties to remediate their non-compliant systems,  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.
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,  possible monetary losses from canceled
future  business and lawsuits for breach of contract with these  customers.  The

                                      -12-
<PAGE>

Company has developed contingency plans for various business disruptions,  which
include  procedures to mitigate the effect of year 2000  non-compliance  issues.
The  contingency  plans 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.

     The Company utilized  internal  resources to assess,  modify or convert and
test for year 2000 compliance.  The total cost for the assessment,  modification
or  conversion  and  testing of the  Company's  systems was  approximately  $1.1
million,  all of which have been incurred.  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
funded  through  operating  cash  flows.  The  costs  associated  with year 2000
compliance  are  based on  management's  estimates,  which  were  derived  using
numerous assumptions of resources, and other factors.

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
2001. 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.


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.

                                      -13-

<PAGE>

                           PART II - OTHER INFORMATION


Item 1:  Legal Proceedings

         None


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 November 12, 1999.


                          CORE-MARK INTERNATIONAL, INC.



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

                                      -15-