Welcome to the 2014 Second Quarter Investor Call. My name is Jeanette, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Ms. Milton Draper. Ms. Draper, you may begin.

Thank you, Jeanette, and welcome, everyone. I would now like to read the statements about the use of forward-looking statements and non-GAAP financial measures during this call. Statements made in the course of this call that state the company's or management's hopes, beliefs, expectations or predictions of the future are forward-looking statements. Actual results may differ materially from those projections. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in our SEC filings, including our Form 10-K, our 10-Qs and our press releases. We undertake no obligation to update these forward-looking statements. We are holding this call to review our second quarter results and to answer any questions you might have. If you have additional follow-up questions after the call, please call me, Milton Draper, at (650) 589-9445. Joining me today is the Chief Executive Officer of Core-Mark, Thomas Perkins; and the Chief Financial Officer, Stacy Loretz-Congdon. Also in the room is Chris Miller, our Chief Accounting Officer; and Greg Antholzner, our Vice President of Finance and Treasurer. Our lineup for the call today is as follows. Tom will discuss the state of our business and our strategy going forward, followed by Stacy, who will review the financial results for the second quarter. We will then open up the call for your questions. Now I would like to turn the call over to our CEO, Tom Perkins.

Good morning, everyone. I would like to begin with a discussion on our partnership Rite Aid in our newest division in Ohio and then touch on our second quarter results and finish up by updating you on our core strategies. As many of you know, we have signed a 3-year contract with Rite Aid and have been delivering to about 800 stores since the spring. The successful rollout of this large customer will mark another milestone for this organization. We are scheduled to start delivering additional Rite Aid stores from many of our divisions, including our new Ohio division. If all goes as planned, we will be expanding the number of stores we service significantly by the end of 2014. Currently, we are delivering frozen, fresh and refrigerated products. These include such items as home meal replacement, deli meats, cheeses, yogurt spreads and perishable beverages. In addition, we are delivering an extensive list of bakery items. As you might imagine, this rollout is progressing and moving forward on an almost daily basis. This win provides a significant growth opportunity for us long-term. However, our immediate focus is on executing a successful implementation with these initial categories. I am sure most of you saw our press release, announcing our strategic geographic expansion into the Midwest. Our new division will be located in Glenwillow, Ohio. We plan to open this division in October. We will begin servicing approximately 1,000 new stores and transferring about 1,000 existing customers to this distribution center when we can service them more efficiently and economically. We estimate all of these new and existing customers will be serviced by our Ohio division by the end of the first quarter in 2015. With the transfer of the existing customers, we estimate the transportation synergies will save about $2 million…

Thanks, Tom, and good morning, everyone. I'd like to begin with a brief discussion on EPS and guidance before moving into the numbers for the quarter. Diluted earnings per share were $0.52 compared to $0.51 last year. Excluding LIFO expense, this translates to $0.63 for the second quarter compared to $0.61 last year, including cigarette holding gains that were approximately $0.01 less than the prior year. We are now expecting EPS, excluding LIFO expense, of $2.12 to $2.20 for the year compared to our split-adjusted prior guidance of $2.07 to $2.15, a $0.05 increase. Including LIFO expense, adjusted guidance is now $1.73 to $1.81 for the year compared to split-adjusted prior guidance of $1.75 to $1.82. Excluding LIFO expense, the $0.05 increase consists of approximately $4 million to $5 billion in candy holding gains, partially offset by about $2 million in startup costs for our new division and new customer integration cost. In addition, we have increased depreciation and amortization estimates between $0.6 million and $0.8 million related to our expansion activities and market share gains. The net impact of these items is an increase to pretax profit of approximately $1.4 million on the low end or approximately $2.2 million on the high end. Share count was also adjusted to reflect current forecasts, which added about $0.01, and all items have been adjusted for rounding. We did increase LIFO expense from $13 million to $15 million, and we'll continue to monitor the Producer Price Index for further increases. At $15 million, this equates to a little over $0.39 per share, which you can subtract from FIFO EPS to arrive at LIFO EPS. Other key assumptions include 23.3 million diluted shares outstanding, about $7 million of cigarette inventory holding gains and a 39% tax rate. We are also decreasing our free…

[Operator Instructions] And we have a question from Andrew Wolf of BB&T Capital Markets. Andrew P. Wolf - BB&T Capital Markets, Research Division: Can you talk about the traffic at the C-Stores? And it's funny, because it's not weather, I don't think. And C-Stores are not a place that's affected by an increase in Internet-based shopping. So are they seeing less traffic in the stores related to travel or anything like that? Or is it really just a part of the store, the center of the store, seeing all the weakness?

I think... Andrew P. Wolf - BB&T Capital Markets, Research Division: The customer counts are where they would expect them is just sales are down because people aren't buying the center?

I think, it still goes back to the economic recovery because I still think that there are still a lot of people that at the lower spectrum of the economic ladder that are still struggling, which, of course, we know are our Convenience Store customers. So I think: One, there is less foot traffic; two, we did see some spike in fuel prices, sort of as we entered into the May and June time frame and into July. Now we are seeing those come back, and that, as we know, always impacts our business and impacts people going to the -- filling up as normal. But the second thing too is that there is -- and a lot of that -- yes, the foot traffic is the same but what we are seeing our customers are gravitating towards the outside areas of the store, where the new Fresh products are, the good-for-you products are, versus the center store where you have the chips, the candy and the grocery items. So I think it's a mixed bag for what's driving those sales. Andrew P. Wolf - BB&T Capital Markets, Research Division: And just to switch to some of the expense items. It doesn't -- could you just update us on the -- I mean, you've talked about it, but maybe go into more depth on the driver -- truck driver situation? I mean, are you experiencing actual shortages? I know historically up in parts of Canada you have had and, I guess, with the U.S. doing a lot more frac-ing, some of these people who could have been driving trucks making more money doing something else in the energy business. Just how widespread it is? Is it a true shortage? Or is it just sort of something -- the wage rates are going up? I know that truckers are -- independent truckers are charging more.

Yes. No, it's actually -- and I think from all the reports that I've seen, it's they're estimating a -- the demand for drivers far exceed what the supply is, and it's going to continue to be that going forward into the future. I think what we see is, you're right, there are certain geographies that we have issues with because of the economic conditions going on, for instance, in Texas, where you have the frac-ing in the oilfields going nuts and maybe up in the Midwest, where we're seeing a lot of people travel up there where they can make a lot of money in a short period of time. But we also are seeing tightening in other areas, not just in those areas. And again, I think with -- as the economy increases, you have more trucks on the road, you have more demand to get product to different industries. And so that in of itself is causing the strain on the labor pool. And I don't envision that really going away. And we, as a company, have to control our own destiny. And that's why we're putting in place short and long-term plans to address that. Andrew P. Wolf - BB&T Capital Markets, Research Division: Okay. And just lastly, in relation to the $2 million in transportation savings from Ohio, is that -- that's mainly in 2015. That's really not baked into the guidance here, right?

Yes. That's correct. Andy, really, what -- and if you think about it, so we service those areas today in those states. But we're coming -- we will set up depots close to those areas and we'll have stem miles to get the product up to those areas and we have resident drivers. But with this new center, we won't have those stem miles, right? So we're a lot closer to those customers and we've reduced the amount of miles that we drive to service those customers. So -- and it's similar to what -- as we acquired, let's say, the J.T. Davenport in Carolina, the same thing, where we can reallocate customers out of one division and moving them into the Carolina division, which are closer to customers and reduces the miles that we travel.

And our next question comes from Chris McGinnis of Sidoti & Company. Christopher McGinnis - Sidoti & Company, LLC: Could you maybe just talk a little bit about, I guess, the cadence for the remainder of the year on Rite Aid? And how many stores do you think -- or maybe a percentage of how many stores, I think, you'll service by the end of the year?

I believe that we probably will end up servicing close to 90% of their stores by the end of the year. And again, they'll be rolling out at different parts of the year. And that's sort of the plans right now. But again, as we know, plans always change. But that's the intent right now. Christopher McGinnis - Sidoti & Company, LLC: And is that going to affect or impact the back half of the year for the call structure? Will that change at all significantly, to support that?

It will with onetime costs, right? Because as we add customers into -- and as we've talked about in the past, when we add a large account win to any division or to our company, we normally have start-up costs associated with those, which includes the hiring and training of new employees, the additional equipment we need to service the customers, et cetera. So we'll see that in -- definitely in 2014 and then -- but those costs go away in 2015. Christopher McGinnis - Sidoti & Company, LLC: Great. Could you give maybe a level of revenue, do you think, coming from that?

No, I can't. But let me -- so here's -- again, this is a new partnership for us and for Rite Aid. And it's a -- Rite Aid -- everything you read about Rite Aid is they're making their stores into wellness centers, right? And as doing that, they want to be able to offer good-for-you products, right? And so this is in its infancy. And I think I like to look at it as we're going to crawl and then we're going to walk and then we're going to run. And it's a long-term partnership, a long-term strategy. So I envision the drops as we go forward will get larger and larger. Christopher McGinnis - Sidoti & Company, LLC: All right. Great. And is there opportunity to increase from the products that you have now? And then a second question, sorry, but, could you just maybe talk about in the trials maybe the experience you saw from a store ramp and how positive that was, obviously, if they signed a 3-year contract?

They -- a couple of things is: One, I can't really talk about what they saw. We definitely have seen an expansion of categories we service from when we first started the trial run. And the intent is that we would -- and both of us through this partnership is we want to continue to grow the categories and the items that we sell to the stores because that just makes economic sense for both of us. I don't know what they're -- if it's probably too early to tell from what they are -- from their own inside store sales. But again, what they're looking for is to attract more customers and to increase the market basket, but I'll let them report that. But definitely we are adding -- we have added more categories than what we first started with on the trial stores.

And our next question comes from John Lawrence of Stephens.

Would you comment just a little bit on the prior question about as you move 90% -- I assume it's sort of -- it looks like it's coming from the West Coast eastward. What would any other sections of the country need more of this capacity as you move? Or you're pretty well set capacity wise?

I think we're pretty well set capacity wise. The -- definitely, the opportunity with the Ohio division in and of itself was a great opportunity. But with incremental new stores, it just made it the right decision to make for the area. The other thing too is we know is that area has a great amount of Convenience Stores. And so, we know when we're closer to the stores, we can definitely execute and leverage our core strategies at a much faster pace. So -- but that really is the only one. The other one is just normal infrastructure with -- either maybe we expand a cooler or we add tractors and trailers to service the stores.

So trying to get there in a different way. I mean, if you get 90% penetration by the end of the year, then it'll be a rollout process again through '15 to get these increased drops across the country?

Yes, I think that's what it is. I think we are focused, as well as with -- I think, with Rite Aid is to execute the initial categories. Let's get their store managers comfortable with the process. And then as we move forward, we're going to be working with them to focus on other categories we could add to that delivery, because that's the whole idea. They're a great believer in vendor consolidation, right? And so that's -- we got our truck in the parking lot. Let's load it up with more stuff that we can deliver to their stores.

Yes. And then last question is, update on the CNG process or the engines coming through to move that forward?

Yes, we have, I think, approximately 90 tractors on the road, I believe. We'll have 200 by the end of the year. We have 3 stations. We have 2 that we own and another 1 we partnered with a company called Gain [ph], who built the station and we're the anchor tenant. We have 3 other stations in certain -- in process at certain steps in that process. So the intent still by the end of 2014, we'll have over 200 tractors on the road with about 6 to 7 stations that we're buying, whether we own or we're anchor tenants with this company called Gain [ph]. One of the things -- and we as well as other people who are utilizing the CNG tractors, one, is definitely the engines are more expensive, because the demand hasn't been as fast as we wanted. And we're still working on getting the miles per gallon up to the level we had anticipated. But there still definitely is a overall reduction in fuel costs with driving CNG, and so it's the right thing to do. And I think we'll see those savings this year as well as going into 2015.

[Operator Instructions] And you have a question from Chris McGinnis of Sidoti & Company. Christopher McGinnis - Sidoti & Company, LLC: Just a quick follow-up. Can you maybe talk about the -- you may have said it, maybe I missed it, maybe the e-cigarette trends?

Yes, it's interesting. We have seen a leveling off of the demand on e-cigs versus last year. But we did get a -- an uplift as Altria entered with their Mark 10 e-cigs. So they definitely had a -- as a -- delivered -- we delivered their product to the stores. And we'll probably get another uplift when Reynolds rolls out their VUSE e-cigarettes to a larger part of the country. But it's still -- it still -- there is a definitely a lull in the e-cigarette growth right now.

And I'm showing no further questions at this time. I will now turn the call back over to Ms. Draper for closing remarks.

Thank you for your participation in our conference call and for your interest in Core-Mark. We had a solid quarter and are pleased with the results. Our long-term growth prospects continue to look favorable and our core strategies continued to provide us a competitive advantage. If you have any follow-up questions after the call, please feel free to give me a call, Milton Draper, at (650) 589-9445. Thanks.