-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Cnu3lEAPQE9dp1khFgwU7jFL1HSCaL7mlVmpPorZBW9DSjRlcpUM1jP515a4jtER 0NYxCb479PeOkED7nT1p7g== 0000905718-99-000384.txt : 19990714 0000905718-99-000384.hdr.sgml : 19990714 ACCESSION NUMBER: 0000905718-99-000384 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990707 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990713 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERGEN BRUNSWIG CORP CENTRAL INDEX KEY: 0000011454 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-DRUGS PROPRIETARIES & DRUGGISTS' SUNDRIES [5122] IRS NUMBER: 221444512 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-05110 FILM NUMBER: 99663701 BUSINESS ADDRESS: STREET 1: 4000 METROPOLITAN DR CITY: ORANGE STATE: CA ZIP: 92668 BUSINESS PHONE: 7143854000 MAIL ADDRESS: STREET 1: 4000 METROPOLITAN DRIVE CITY: ORANGE STATE: CA ZIP: 92668 FORMER COMPANY: FORMER CONFORMED NAME: BERGEN DRUG CO INC DATE OF NAME CHANGE: 19690409 8-K 1 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 7, 1999 BERGEN BRUNSWIG CORPORATION (Exact Name of Registrant as Specified in Charter) New Jersey 1-5110 22-1444512 (State or Other (Commission (IRS Employer Jurisdiction of File Number) Identification No.) Incorporation) 4000 Metropolitan Drive, Orange, California 92868 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (714) 385-4000 Item 5. Other Events. On July 7, 1999, Bergen Brunswig Corporation issued the press release attached to this Current Report on Form 8-K as Exhibit 99.1. Item 7. Financial Statements and Exhibits. (c) Exhibits 99.1 Press release dated July 7, 1999. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BERGEN BRUNSWIG CORPORATION By: /s/ Milan A. Sawdei _____________________________ Milan A. Sawdei Executive Vice President Date: July 13, 1999 EX-99 2 PRESS RELEASE Exhibit 99.1 BERGEN BRUNSWIG REPORTS PRELIMINARY THIRD QUARTER RESULTS Orange, CA - July 7, 1999 -- Bergen Brunswig Corporation (NYSE: BBC) today announced that based upon a review of its recent operating results the Company expects to report earnings per diluted share of $.25 to $.27 for the third quarter ended June 30, 1999 and $1.10 to $1.15 per diluted share for the fiscal year ended September 30, 1999. These estimates compare with First Call consensus analysts' estimates of $.31 for the quarter and $1.24 for the year. Final results for the quarter will be reported on July 28, 1999. The full year estimates are based upon the information the Company has to date and could be subject to adjustment if the results for the fourth quarter are different than the Company's current expectations. The unanticipated earnings weakness is believed to be primarily a result of negative industry trends being experienced at the Company's specialty long-term care subsidiary (PharMerica). The industry trends impacting earnings are the direct result of Medicare's revised reimbursement under the Prospective Payment System (PPS) and include among other things: (1) Lower than anticipated occupancy by Medicare-funded patients at the skilled nursing facilities PharMerica serves; (2) A significantly diminished acuity level among residents of these facilities, which is impacting overall utilization of drugs; and (3) Pricing pressure which has affected gross profit and had a greater than expected effect on bed loss resulting from the financial difficulty of nursing home customers. "When we completed the acquisition of PharMerica, this business had performed on target with our expectations for the March quarter and exceeded consensus estimates for the December 1998 quarter," explained Donald R. Roden, president and CEO of Bergen Brunswig Corporation. "We considered the impact of PPS in our evaluation of PharMerica and made what we thought were very significant downward revisions to revenue and profit growth in our internal models to account for these concerns. The impact of PPS has been greater than we or the industry had expected. While we expected fewer high-acuity Medicare patients to be treated by our nursing home customers, we did not anticipate that a dramatically lower percentage of Medicare residents would only be receiving oral medications. "Although the impact of PPS is significant in the short term and while we are hopeful it will soon be addressed through the legislative process, we are not waiting for this cure. "We have developed, for immediate implementation, an aggressive plan for improving earnings at PharMerica by reducing costs by more than $20 million," Roden continued. "First, we will utilize the Generic Purchasing Program (GPP) for PharMerica that has been so successful in our drug company and roll out our purchasing alliance efficiencies attainable through our agreement announced earlier this year with NCS Healthcare (Nasdaq: NCSS) and Tenet Healthcare (NYSE: THC). Both of these initiatives are expected to commence by July 30. Secondly, we intend to reduce operating expenses through the commencement of a centralized packaging operation, billing center consolidations, and the completion of an already initiated AS400 conversion project. Third, we will convert to a perpetual inventory and pricing system for half of our pharmacies by end of calendar 1999, with the rest completed by the end of calendar 2000. Longer term, we will be making maximum use of our highly efficient 32 drug distribution centers to streamline the delivery of product to our long term care customers while expanding our reach through our retail networks. "As we have publicly observed in recent months, the impact of PPS and other regulatory initiatives, as well as the difficulties inherent in the integration of newly acquired businesses, present challenges for our Company. We remain optimistic in our ability to meet these challenges as we strive to meet our goals of reducing costs and improving services within the healthcare industry and providing value to our shareowners." "In short," Roden concluded, "I am disappointed in the timing of these events, but I have confidence in the positive demographic trends for both our core business and in the long term care sector. The American population will continue to age, cost-conscious payers will increasingly turn to alternate sites for care, and pharmaceuticals will play an ever more significant role as the most viable and cost-effective means of treating the elderly. We believe the institutional pharmacy business will grow and that we can continue to leverage our core competencies in order to capture the opportunities inherent in this market sector." The results also reflect a reduction in anticipated earnings from Stadtlander Drug Company. Bergen is in disagreement with the seller and its independent auditors regarding the valuation of the net assets of Stadtlander. Additional reserve requirements that Bergen deems necessary will be recognized as a result of the post-closing audit by Bergen's independent auditors. If Bergen is unable to settle this matter with the seller, it will be arbitrated by an independent party. Bergen Brunswig Corporation, a Fortune 200 Company with annualized revenues of $17 billion (excludes bulk shipments to customers' warehouses), is one of the nation's leading supply channel management companies, providing pharmaceuticals, medical-surgical and specialty products as well as information management solutions and outsourcing services designed to improve cost-effectiveness and increase value for customers, patients and manufacturers across the entire healthcare spectrum. Additionally, through its wholly owned subsidiary, PharMerica, Bergen serves approximately 500,000 patients in long-term care and alternate site settings. Bergen also develops disease-specific treatment protocols and pharmacoeconomic initiatives to assist in the reduction of overall healthcare costs while improving disease management and outcomes. Certain of the information set forth in this press release (such as estimates of earnings for future periods; the reduction in operating expenses and the future operating results of PharMerica; the strategy for future periods; potential regulatory and legislative developments; the potential impact of PPS; industry, business and demographic trends; the ability of the Company to leverage its core competencies; and the savings to be achieved through the Company's plans) may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks, uncertainties and other factors which could cause actual results to differ materially from those projected or implied. Such statements may be identified by the use of forward-looking language such as "may," "will," "should," "expect," "anticipate," "estimate" or "continue" or the negatives or other variations thereof or other similar terminology. Such risks and uncertainties include uncertainties relating to general economic conditions, the unanticipated loss of customer or supplier relationships, difficulties associated with the integration of the Company's newly acquired businesses, the impact of government regulation, competition and the other risks described in exhibit 99 to the Company's Quarterly Report on Form 10Q for the quarter ended March 31, 1999 and in other reports and exhibits filed with the Securities and Exchange Commission. -----END PRIVACY-ENHANCED MESSAGE-----