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Executive Summary

ROBINS WILL REPORT TO AHP CORPORATE VP JOSEPH CARR, who succeeded Chairman E. Claiborne Robins and President and CEO E. Claiborne Robins, Jr. in the afternoon of Dec. 15, following consummation of the A. H. Robins acquisition by American Home Products. Carr, whose experience has been in the upper ranks of finance, administration and operations management in the Wyeth-Ayerst subsidiary, is identified as the primary AHP exec designated to prepare for the acquisition of the Richmond, VA-based drug and consumer products firm. Carr's current AHP corporate position indicates that Robins will be reporting directly to the parent company and not to either of the subsidiaries, Ayerst-Wyeth or Whitehall. Reporting to Carr will be the longtime Robins non-family senior management, headed by Exec VPs Charles Hart and Robert Watts. Both remaining execs have been with the firm for roughly 30 years. No other change of control or executive switches are expected. AHP reiterates that Robins will retain a "significant presence" in Richmond. In a Dec. 15 letter to employees announcing the relinquishing of their posts, Robins pere and fils alluded to the corporate purgatory of the Dalkon Shield litigations. "Through the years, we have shared times both difficult and rewarding," the letter states. "We have been tested, and the results achieved in spite of those difficult times are witness to what good people can accomplish . . . the progress we have enjoyed can continue as A. H. Robins hopefully becomes a leader among the various" AHP companies. The 123-year-old firm has undergone quite an ordeal in the last four years. Nonetheless, at the core, Robins appears substantially unchanged (see chart), anchored by the esteemed Robitussin, Dimetapp and Chap Stick consumer brands, Elkins-Sinn in the generics business and a persistent sales ability in prescription products. In 1988, ethical pharmaceutical sales were $ 482.2 mil. and consumer product sales volume totaled $ 307.7 mil. Cough/cold products have accounted for nearly a quarter of total sales in the last three years. In Robins most recent financial statement for the period ended Sept. 30, the company reported slight increases in quarterly and nine-month sales and sharp drops in earnings because of taxes. Third quarter sales rose 3% to $ 264.3 mil. Nine months sales volume was $ 678.4 mil., up 2%. Robins said the increased revenues resulted "primarily from consumer products which more than offset the adverse impact of foreign exchange rates" that lopped $ 2.2 mil. off sales. Earnings dropped 50% in the quarter to $ 12 mil. and have declined 34% to $ 31.1 mil. year-to-date. Under terms of the previously-announced acquisition agreement, reached in March 1988, AHP has paid $ 2.3 bil. into two trusts for Dalkon Shield claimants. Robins shareholders are entitled to receive approximately 8.5 mil. shares of AHP stock. Because of tax breaks associated with the purchase of a Chapter 11 company, AHP will actually end up paying around $ 2.2 bil., rather than $ 3.2 bil. for Robins. Chart omitted.

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