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Executive Summary

Scherer's fourth quarter earnings dropped 55.4% to $916,000 as the firm continues to be "affected by lower sales and the additional costs associated with closing and relocating the company's facilities in the United Kingdom," Scherer reported May 11. Noting Scherer's "disappointing year," Scherer President Peter Fink commented: "The company's principal challenges are centered in the domestic market for both soft elastic gelatin (SEG) and two-piece hardshell capsules, where combined sales fell by 25% last year. In the domestic SEG market, aggressive price leadership by the company, softness in the business of some of its health and nutritional customers, and additional competitive SEG capacity all acted in concert to lower the company's sales." The 55.4% earnings decline was Scherer's fourth straight quarter with a net income decline of more than 40%. For the year, the company's earnings fell 50.2% to $4.04 mil. Scherer's sales for the fourth quarter were off 7.5% to $45.1 mil. For the year, the company's volume inched ahead 1.2% to $171.7 mil. Fay's fared best among the chain drug stores reporting financial results with first quarter earnings ahead 63.5% to $1.33 mil. on sales of $82.6 mil., up 20.5%. Fay's Chairman Henry Panasci noted: "Our Rx departments continue to benefit from the AccuFays computerized pharmacy system . . . Pharmacy sales increased 24% in the first quarter." Adams Drug's first quarter earnings advanced a slight .4% to $570,000, while sales were ahead 5.8% for the period to $74.8 mil. Chart omitted.

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