Pink Sheet is part of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call +44 (0) 20 3377 3183

Printed By



Executive Summary

Bergen Brunswig added $342 mil. in sales in fiscal 1986 with the acquisition of Berry Wholesale Drug ($45 mil.), Southwestern Drug ($140 mil.) and Los Angeles Drug ($157 mil.), according to the company's just-released annual report for 1986. The combined sales represent over 14% of Bergen's $2.4 bil. previous year sales, keeping the wholesaler on track for its announced volume growth target. At an October 1985 presentation, Chairman Emil Martini, Jr. told securities analysis: "Bergen Brunswig's general objective is growth of 25% annually. Through internal improvement and market expansion we aim for 15%, the remaining 10% to be achieved through acquisition." For the year ended Aug. 31, the company reported total sales of $3.1 bil., a 26% increase over the previous year. Net earnings, however, were off 11%, declining from $23.3 mil. to $20.7 mil. Bergen said its share of the pharmaceutical distribution has increased from 6% to almost 14% over the last ten years. "A series of events caused the decline in earnings beginning with the expense of consolidating facilities and integrating computer systems," the wholesaler explained, noting that consolidation of the acquisitions should be completed by the second half of fiscal 1987. "Higher interest and inventory costs resulted from selective forward buying in anticipation of price increases that did not fully materialize, a general inventory buildup from acquisitions and a higher LIFO inventory reserve addition." The company also noted that its gross margin was adversely affected by competitive pressure, "in part related to the company's decision to purchase only from the manufacturer and eliminate secondary source buying of pharmaceuticals." On Oct. 29, Bergen Brunswig announced that a class-action suit against the company had been filed in Los Angeles Federal Court alleging violations of federal securities laws in connection with information issued during fiscal 1986. According to Bergen, the suit argues that the wholesaler overstated 1986 earnings by understating inventory. The company switched from the FIFO method of valuing inventory to LIFO in fiscal 1986. "The company denies the material allegations of the complaint and expects to defend the action vigorously," Bergen emphasized. The company "believes it has always made full, fair and timely disclosure of all material facts and developments concerning its business and operations, and is of the opinion that the allegations contained in the suit are speculative and without merit."

You may also be interested in...

Part D Discount Liability Coming Into Focus: CMS Releases Drug Cost Data

Newly released Medicare Part D data sheds light on the sales hit that branded pharmaceutical manufacturers will face when the coverage gap discount program gets under way in 2011

FDA Skin Infections Guidance Spurs Debate On Endpoint Relevance

FDA appears headed for a showdown with clinicians and the pharmaceutical industry over the proposed new clinical trial endpoints for acute bacterial skin and skin structure infections, the guidance's approach for justifying a non-inferiority margin and proposed changes in the types of patients that should be enrolled in trials

Shire Hopes To Sow Future Deals With $50M Venture Fund

Specialty drug maker Shire has quietly begun scouting deals with a brand-new $50 million venture fund, the latest of several in-house investment arms to launch with their parent company's pipelines, not profits, as the measure of their worth




Ask The Analyst

Ask the Analyst is free for subscribers.  Submit your question and one of our analysts will be in touch.

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts