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Executive Summary

Sales by Robins worldwide increased 8% to approximately $856 mil., the company recently reported. While operating earnings were off slightly, $169 mil. compared to $170 mil. in 1986, the company booked a net loss of $1.6 bil. for the 12 months, the result of fourth-quarter Dalkon Shield and Chapter 11 charges. "The net loss stemmed from an accrual of $1.752 bil. for Dalkon Shiled claims and related expenses and a charge of $44.2 mil. for Chapter 11 costs, litigation expenses and settlements," Robins explained. "The $1.752 bil. accrual represents the difference between the $2.3 bil. provided in the company's fifth amended plan of reorganization and the $548 mil. which remained from the reserve for Dalkon Shield claims established by the company in 1984." Accepted by the Robins board on Jan. 19, the American Home bid's provision for an upfront payment to Dalkon Shield claimants was instrumental in winning Robins away from two other suitors, Rorer and Sanofi. On March 16, Robins received permission from Richmond Federal Court Judge Robert Merhige to sign a definitive merger agreement with AHP and terminate an earlier merger agreement with Rorer. Robins said that on March 24, the court will meet again to decide whether the financial disclosure is adequate for shareholders and claimants to be able vote on the amended Chapter 11 plan. The company anticipates sending the plan out for a vote sometime in May. For the last three months of 1987, Robins reported an 11% increase in sales over the fourth quarter of 1986 to $235 mil. Operating earnings declined 19% to $46 mil., however. The company attributed the lower operating earnings to lower gross margins, particularly at the firm's Elkins-Sinn generic injectables subsidiary. Robins' net loss for the three months was $1.7 bil. compared to net income of about $26 mil. the previous year. Glaxo reported "outstanding" growth of its U.S. drug business, which increased 34% during the six months ended Dec. 31 to $583 mil. "Glaxo's U.S. subsidiary, Glaxo Inc., is ranked in the top 10 of the U.S. pharmaceutical industry and contributed about 33% of total group sales in sterling terms," parent Glaxo Holdings said. Overall, Glaxo's corporate volume grew 12% during the first half of fiscal 1988 to $1.7 bil., from $1.3 bil. in the comparable fiscal 1987 period. However, in terms of British pounds, Glaxo's sales were up only 6%, from (BRITISH POUND)873 mil. to (BRITISH POUND)924 mil. because of exchange rates -- $1.88 to (BRITISH POUND)1 in the most recent period compared to $1.48 to (BRITISH POUND)1 the previous year. The company's net earnings were up 12% in British currency to (BRITISH POUND)270 mil. In terms of U.S. dollars, profits increased 42% to $508 mil. "These results reflect the factors to which I drew attention in my last annual statement," said Sir Paul Girolamo, Glaxo's chairman. These included "the inevitable slowing dow from our past exceptional rate of growth, the large adverse movement in exchange rates and the increasing expenditure on both research into new products and the development of several promising compounds which we hope to bring to market in the next two to three years." American Stores said that sales of "like" stores in the Osco drug chain increased nearly 5% during the 12 months ended Jan. 30 to about $3 bil., making drugstore operations the top-gaining business segment. Overall, Osco accounted for about 21% of American's $14.3 bil. fiscal 1988 volume, which was up 2.3% over the previous 12 months. Net earnings were up almost 7% to $154 mil. Chart omitted.

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