UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-11355
BINDLEY WESTERN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Indiana 84-0601662
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10333 North Meridian Street, Suite 300
Indianapolis, Indiana 46290
(Address of principal executive offices)
(Zip Code)
(317) 298-9900
(Registrant's telephone number,
including area code)
No Change
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No _________
The number of shares of Common Stock outstanding as of September 30, 1997 was
15,515,612.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(000's omitted except share data)
(unaudited)
<TABLE>
<S> <C> <C> <C> <C>
Nine-month period ended Three-month period ended
September 30, September 30,
1997 1996 1997 1996
Revenues:
Net sales from stock $ 1,967,973 $ 1,527,790 $ 694,472 $ 548,191
Net brokerage sales 3,290,186 2,215,359 1,117,996 788,074
Total net sales 5,258,159 3,743,149 1,812,468 1,336,265
Other income 1,095 953 470 314
5,259,254 3,744,102 1,812,938 1,336,579
Cost and expenses:
Cost of products sold 5,155,554 3,654,068 1,776,691 1,306,616
Selling, general and administrative 57,818 52,205 20,527 17,688
Depreciation and amortization 5,595 5,012 1,872 1,674
Interest 12,296 9,927 4,534 3,460
Settlement of 1994 DEA inspection matter 812
5,231,263 3,722,024 1,803,624 1,329,408
Earnings before income taxes 27,991 22,078 9,314 7,171
Provision for income taxes 11,393 9,201 3,791 2,958
Net earnings $ 16,598 $ 12,877 $ 5,523 $ 4,213
Earnings per share:
Primary $ 1.28 $ 1.09 $ 0.41 $ 0.35
Fully diluted $ 1.13 $ 0.97 $ 0.37 $ 0.32
Average shares outstanding:
Primary 12,960,639 11,846,653 13,608,969 11,886,532
Fully diluted 16,322,829 15,328,806 16,506,828 15,368,685
</TABLE>
(See accompanying notes to consolidated financial statements)
BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(000's omitted except share data)
(unaudited)
<TABLE>
<S> <C> <C>
September 30, December 31,
1997 1996
ASSETS
Current assets:
Cash $ 15,505 $ 63,658
Accounts receivable, less allowance for doubtful
accounts of $3,887 for 1997 and $2,664 for 1996 506,010 346,802
Finished goods inventory 396,955 431,816
Deferred income taxes 4,560 4,560
Other current assets 6,213 4,129
--------- ---------
929,243 850,965
--------- ---------
Other assets 86 1,160
--------- ---------
Fixed assets, at cost 84,111 71,915
Less: accumulated depreciation (22,353) (19,935)
--------- ---------
61,758 51,980
--------- ---------
Intangibles 35,566 37,101
--------- ---------
TOTAL ASSETS $ 1,026,653 $ 941,206
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 166,000 $ 52,000
Accounts payable 503,276 555,034
Other current liabilities 10,335 9,288
--------- ---------
679,611 616,322
--------- ---------
Long-term debt 32,179 99,766
--------- ---------
Deferred income taxes 1,230 3,030
--------- ---------
Shareholders' equity:
Common stock, $.01 par value authorized 30,000,000 shares;
issued 15,896,554 and 11,871,042 shares, respectively 3,357 3,316
Special shares, $.01 par value-authorized 1,000,000 shares
Additional paid in capital 168,419 91,964
Retained earnings 145,784 129,958
--------- ---------
317,560 225,238
Less: shares in treasury-at cost
380,942 and 348,291, respectively (3,927) (3,150)
--------- ---------
Total shareholders' equity 313,633 222,088
--------- ---------
Commitments and contingencies
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,026,653 $ 941,206
========= =========
</TABLE>
(See accompanying notes to consolidated financial statements)
BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's omitted except share data)
(unaudited)
<TABLE>
Nine-month period ended
September 30,
<S> <C> <C>
1997 1996
Cash flow from operating activities:
Net income $ 16,598 $ 12,877
Adjustments to reconcile net income
to net cash provided (used) by operating
activities:
Depreciation and amortization 5,595 5,012
Deferred income taxes (1,800) (1,800)
Gain on sale of fixed assets (76) (44)
Change in assets and liabilities,
net of acquisition:
Accounts receivable (129,338) 15,517
Finished goods inventory 60,129 15,797
Accounts payable (78,978) (105,086)
Other current assets and liabilities (1,453) 6,085
Net cash used by operating activities (129,323) (51,642)
Cash flow from investing activities:
Purchase of fixed assets and other assets (15,521) (14,551)
Proceeds from sale of fixed assets 2,044 42
Acquisition of business (27,636) (9,064)
Net cash used by investing activities (41,113) (23,573)
Cash flow from financing activities:
Proceeds from sale of stock 10,070 2,151
Payments on long term debt (239) (439)
Proceeds under line of credit agreement 1,081,000 804,500
Payments under line of credit agreement (967,000) (728,500)
Purchase of shares for treasury (777)
Dividends (772) (710)
Net cash provided by financing activities 122,283 77,002
Net increase (decrease) in cash (48,153) 1,787
Cash at beginning of period 63,658 34,819
Cash at end of period $ 15,505 $ 36,606
</TABLE>
(See accompanying notes to consolidated financial statements)
BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying consolidated financial statements have been prepared by
the Company without audit. Certain information and footnote disclosures,
including significant accounting policies, normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The Company believes that
the financial statements for the three and nine month periods ended
September 30, 1997 and 1996 include all necessary adjustments for fair
presentation. Results for any interim period may not be indicative of
the results of the entire year.
2. On October 24, 1997, the Company completed an initial public offering
of 2,000,000 shares of Class B common stock of its Priority Healthcare
Corporation subsidiary ("PHC"). Following the offering, the Company,
through its ownership of all the outstanding shares of PHC Class A
common stock will own 83.6% of PHC's outstanding common stock and
will have 93.9% of the voting power of the PHC common stock, assuming
in each case that the underwriters over-allotment option of 300,000
shares of Class B common stock is not exercised. The Class A and
Class B common stock are entitled to three votes per share and one
vote per share, respectively, and generally vote together as a single
class on all matters submitted to a vote of shareholders of PHC. PHC
sales for the nine month period ended September 30, 1997 increased 56%
to $169 million, while net earnings increased 54% to $4.5 million.
For the third quarter, sales increased 40% to $61 million and net
earnings increased 16% to $1.5 million.
3. Effective July 31, 1997, the Company purchased substantially all of
the operating assets and assumed most of the liabilities and
contractual obligations of Tennessee Wholesale Drug Company, Inc.
("TWD"). TWD is a full-line, full-service wholesale drug company with
distribution facilities in Nashville, TN, Baltimore, MD and Tampa, FL.
TWD had net sales for the fiscal year ended March 31, 1997 of $308
million. Effective August 7, 1997, PHC acquired substantially all of
the operating assets and assumed most of the liabilities of Groveway
Pharmacy, Inc., a specialty distributor of vaccines and injectables
located in Castro Valley, CA. The acquisition was not considered
material and the amount expended approximated the fair value of the
net assets acquired. Both acquisitions were treated as purchases and
the financial statements include the results of operations from the
respective effective dates of acquisition.
4. The Company is a defendant in a consolidated class action filed in the
United States District Court for the Northern District of Illinois in
1993 which names the Company, five other pharmaceutical wholesalers
and 26 pharmaceutical manufacturers as defendants, In re Brand Name
Prescription Drugs Litigation, MDL 997. Plaintiffs allege that
pharmaceutical manufacturers and wholesalers conspired to fix prices
of brand-name prescription drugs sold to retail pharmacies at
artificially high levels in violation of the federal antitrust laws.
The plaintiffs seek injunctive relief, unspecified treble damages,
costs, interest and attorneys' fees. The Company has denied the
complaint allegations.
In April 1996, the district court granted the wholesalers' motion for
summary judgment and dismissed the wholesaler defendants, including
the Company. The class action plaintiffs appealed this decision to
the U.S. Court of Appeals for the Seventh Circuit, which reversed the
district court and reinstated the case against the wholesalers. A
September 1998 trial date has been tentatively set.
A majority of the manufacturer defendants and the class plaintiffs
have reached a settlement agreement, which was approved by the Court.
The approval was affirmed by the Seventh Circuit. In addition,
Foxmeyer Drug Company, one of the wholesaler defendants, has filed for
bankruptcy and the case has been stayed against it.
On October 2, 1997, certain plaintiffs representing, among others,
retail pharmacy chains, filed a motion to add the wholesalers as
defendants on their Sherman Act claims in dozens of individual actions
that are not consolidated for trial with the class action. The
defendants have opposed the individual plaintiffs' motion. The
district court has not yet decided the motion which, if granted, would
complicate the litigation against the Company.
On July 1, 1996, the Company and several other wholesalers were joined as
the defendants in a seventh amended and restated complaint filed in the
Circuit Court of Greene County, Alabama, Durrett v. The Upjohn Company,
Civil Action No. 94-029. The case was first filed in 1994.
The plaintiffs claim the prices of prescription drugs they purchase in
interstate commerce are artificially high because of alleged illegal
activities of the defendant pharmaceutical manufacturers and
wholesalers. The plaintiffs seek monetary damages, injunctive relief
and punitive damages. The Company has denied the allegations of the
complaint.
The manufacturer defendants filed motions to dismiss and for judgment
on the pleadings arguing that the Alabama Antitrust Statute applies
only to intrastate commerce. The trial court denied the defendants'
motions and the defendants have appealed the issue to the Alabama
Supreme Court, which accepted the appeal on February 7, 1997. The
defendants submitted their appeal briefs on May 12, 1997. The Court
has stated that it will not hear oral argument. In addition,
plaintiffs' motion for class certification is pending before the trial
court.
On March 7, 1997, the manufacturer defendants filed a motion for a
continuance of the trial in the Alabama action pending the Alabama
Supreme Court's decision and pending a decision by the Seventh Circuit
Court of Appeals in the federal multidistrict litigation. The
plaintiffs moved for a complete stay of discovery for the same
reasons. The trial court granted the manufacturer defendants' motion
to continue the trial from October 1997 to Spring 1998. The case has
not otherwise been stayed pending the appeal.
On October 21, 1994, the Company entered into an agreement in these
cases with five other wholesalers and 26 pharmaceutical manufacturers.
Among other things, the agreement provides: (a) if a judgment is
entered into against both the manufacturer and wholesaler defendants,
the total exposure for joint and several liability of the Company is
limited to $1,000,000; (b) if a settlement is entered into by, between
and among the manufacturer and wholesaler defendants, the Company has
no monetary exposure for such settlement amount; (c) the six
wholesaler defendants will be reimbursed by the 26 manufacturer
defendants for related legal fees and expenses up to $9,000,000 total
(the Company's initial portion of this amount is $1,000,000); and (d)
the Company is to release certain claims which it might have had
against the manufacturer defendants for the claims presented by the
plaintiffs in these cases. The agreement covers the federal court
class action and the individual actions, as well as cases which have
been filed in various state courts.
The Company is unable to form a reasonably reliable conclusion
regarding the likelihood of a favorable or unfavorable outcome of
these cases. The Company believes the allegations of liability are
without merit with regard to the wholesaler defendants and that the
attendant liability of the Company, if any, would not have a material
adverse effect on the Company's financial condition or liquidity.
Adverse decisions, although not anticipated, could have an adverse
material effect on the Company's results of operations.
5. On October 7, 1996, the Company and its subsidiary, National Infusion
Services, ("NIS"), were named as defendants in an action filed by
Thomas G. Slama, M.D. in the Superior Court of Hamilton County,
Indiana which is now pending in that court as Cause No. 29D03-9702-CP-
81. Dr. Slama was formerly a director of the Company and Chief
Executive Officer and President of NIS. The complaint alleges breach
of contract and defamation arising from the termination of Dr. Slama's
employment with NIS in October 1996, and seeks damages in excess of
$3.4 million, punitive damages, attorneys fees and costs. The Company
and NIS believe Dr. Slama terminated his employment without "cause"
(as defined in his employment agreement), and alternatively, that NIS
had grounds to terminate Dr. Slama for "cause" under his employment
agreement. The Company and NIS have answered the complaint, denying
the merits of Dr. Slama's claims, and have also filed a counterclaim
against Dr. Slama seeking, among other things, declaratory relief,
compensatory and (in some instances) treble damages, punitive damages,
attorneys' fees, interest and costs. Dr. Slama moved to dismiss
portions of the counterclaim, which motion, after briefing and oral
argument was denied by the court on July 14, 1997. The Company and
NIS are contesting Dr. Slama's complaint and pursuing their
counterclaim vigorously. Discovery is proceeding and the court has set
the matter for a pre-trial conference on January 23, 1998. Although
the outcome of any litigation is uncertain, the Company believes after
consultation with its counsel that the attendant liability of the
Company, if any, should not have a material adverse effect on the
Company's financial condition or liquidity. An adverse decision,
although not anticipated, could have a material effect on the
Company's results of operations.
6. In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 ("SFAS 128")
"Earnings per share". SFAS 128 requires the dual presentation of
basic earnings per share and diluted earnings per share. The Company
will adopt the provisions of SFAS 128 in the last quarter of 1997.
Pro forma basic earnings per share, which was calculated by dividing
income available to common stockholders by the weighted average number
of common shares outstanding, would have been $1.39 and $.44 per share
for the nine month and three month periods ended September 30, 1997,
respectively.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations.
Effective February 8, 1996, a newly formed subsidiary of the Company, NIS,
acquired the assets of the infusion services division of Infectious Disease of
Indiana, P.S.C. The acquisition was accounted for as a purchase and,
accordingly, the 1996 financial statements include the results of operations of
NIS from the date of acquisition.
Effective July 31, 1997, the Company purchased substantially all of the
operating assets and assumed most of the liabilities and contractual obligations
of Tennessee Wholesale Drug Company, Inc. ("TWD"). TWD is a full-line, full-
service wholesale drug company with distribution facilities in Nashville, TN,
Baltimore, MD and Tampa, FL. Effective August 7, 1997, PHC acquired
substantially all of the operating assets and assumed most of the liabilities of
Groveway Pharmacy, Inc., a specialty distributor of vaccines and injectables
located in Castro Valley, CA. The 1997 financial statements include the results
of operations from the respective effective dates of acquisition.
Net sales of $5,258 million for the nine-month period and $1,812 million
for the third quarter represented 40.5% and 35.6% increases over the same
periods of 1996, respectively. For the third quarter, TWD sales of $51 million
represented 10.7% of the increase. The remainder was generated by internal
growth. This growth resulted from both brokerage type sales (brokerage sales)
and sales from the Company's inventory (from stock sales). Consolidations
within both the wholesale and chain drug industries provided substantial growth
in brokerage sales. These sales generate very little gross margin, however they
provide for increased working capital and support the Company's programs to
attract more direct store delivery business from chain customers. Brokerage
sales for the nine months and the third quarter increased 48.5% and 41.9%, over
1996, respectively. From stock sales for the nine month period increased 28.8%
while third quarter sales increased 26.7% (17.3% excluding TWD), over 1996,
respectively. While overall price changes accounted for approximately 4% of the
growth in from stock sales, increased sales to existing and new customers were
the primary components of the increase. Sales for PHC for the nine-month period
ended September 30, 1997 increased 56% to $169 million while sales for the third
quarter increased 40% to $61 million. This growth was essentially generated
internally and reflected primarily the addition of new customers, new product
introductions, additional sales to existing customers and, to a lesser extent,
inflationary price increases.
Gross margin of $102.6 million for the nine months and $35.8 million for
the third quarter represented increases of 15.1% and 20.7% over 1996,
respectively. For the third quarter, TWD gross margin represented 29.2% of the
increase with internal growth accounting for the remainder. The increases
resulting from internal growth were the result of the overall increase in net
sales, and increased sales to the higher margin alternate care/alternate site
and direct store delivery markets. The significant increase in the lower margin
brokerage sales resulted in a reduction of gross margin as a percent of net
sales for the nine months from 2.38% in 1996 to 1.95% in 1997. For the third
quarter, gross margin as a percent of net sales decreased from 2.22% in 1996 to
1.97% in 1997. The pressure on sell side margins continued to be a significant
factor in 1997 and the purchasing gains associated with pharmaceutical price
inflation remained relatively constant. Gross margins for PHC of $17.0 for the
nine months and $5.9 million for the third quarter represented increases of
40.9% and 25.5% over 1996, respectively. Gross margin as a percent of net sales
for the nine months and third quarter were 10.1% and 9.6% for 1997, as compared
to 11.1% and 10.8% for 1996, respectively. The reduction is attributed to
increased competition and a change in sales mix towards the lower margin
wholesale distribution business.
Other income remained relatively constant and represented finance charges
on certain customer receivable balances.
Selling, general and administrative ("SGA") expenses for the nine-month
period increased from $52.2 million in 1996 to $57.8 million in 1997. For the
third quarter, SGA increased from $17.7 million in 1996 to $20.5 million in
1997. The third quarter includes incremental SGA of $1.1 million related to TWD.
The remainder resulted from normal inflationary increases and costs to support
the growing direct store delivery program of Bindley Western Drug Company and
the alternate care/alternate site business of PHC. The cost increases related to
the direct store delivery and the alternate care/alternate site programs
include, among others, delivery expenses, warehouse expense and labor costs,
which are variable with the level of sales volume. SGA expenses will continue to
increase as direct store delivery and alternate care/alternate site sales
increase. However, total SGA expense as a percent of from stock sales for the
year decreased from 3.4% in 1996 to 2.9% in 1997. Total SGA expense as a percent
of from stock sales for the third quarter decreased from 3.2% in 1996 to 3.0% in
1997. Management remains focused on controlling SGA through improved technology,
better asset management and opportunities to consolidate distribution centers.
In 1997, SGA includes non-recurring expenses of approximately $275,000 related
to start up or moving distribution centers in Houston, TX, Harrisburg, PA,
Portland, OR and Sacramento, CA. In 1996, SGA includes expenses related to NIS
and non-recurring expenses of approximately $200,000 associated with the closing
and consolidation of the Brockton, Massachusetts and the Charlotte, North
Carolina distribution centers.
Depreciation and amortization on new facilities, expansion and automation
of existing facilities and investments in management information systems
resulted in increases in depreciation and amortization expense. For the nine-
month period the expense increased from $5.01 million in 1996 to $5.60 million
in 1997. The third quarter expense increased from $1.67 million in 1996 to
$1.87 million in 1997.
Interest expense for the nine month period increased from $9.93 million in
1996 to $12.30 million in 1997. The average short-term borrowings outstanding in
1997 were $142 million at an average short term interest rate of 6.4%, as
compared to $124 million at an average short-term interest rate of 6.4% in
1996. In the third quarter, interest expense increased from $3.43 million in
1996 to $4.53 million in 1997. Average short-term borrowings outstanding
increased from $118 million to $181 million, while the average short-term
interest rate decreased from 6.7% to 6.4% . On December 27, 1996, the Company
completed a private placement of $30 million Senior Notes due December 27, 1999
at an interest rate of 7.25%. Interest expense associated with these Notes for
the nine month and three month periods ended September 30, 1997 was
approximately $1.7 million and $500,000, respectively.
On January 11, 1996, the Company was informed by the U.S. Attorney's office
in Indianapolis that the Drug Enforcement Administration ("DEA") was alleging
multiple violations of the recordkeeping and reporting regulations of the
Controlled Substances Act ("Act") resulting from a routine inspection of the
Company's Indianapolis Distribution Center during January and February 1994. On
November 7, 1996, the Company entered into a Civil Consent Decree with the
United States and the DEA resolving all issues relating to its Indianapolis
Distribution Center's alleged failure to comply with the Act. In exchange for
the settlement of all civil and administrative issues, the Company paid
$700,000, and agreed to pay an additional $300,000 if the Company does not
substantially comply with the terms of the Civil Consent Decree over the next
two years. The Company does not believe the amount of the settlement will
exceed the charge recognized by the Company in 1996, which included estimated
related professional fees of $112,000.
The provision for income taxes for the nine month period and third quarter
of 1997 represented 40.70% of earnings before taxes for both periods. The
provision for income taxes for the nine month period and third quarter of 1996
represented 41.67% and 41.25%, respectively, of earnings before taxes.
The Company is still considering a pro rata distribution to its
shareholders of all of the Class A common stock of PHC. The proposed spin-off
would separate the Company's wholesale drug business from the wholesale drug and
alternate care/alternate site business of PHC. The contemplated spin-off would
be subject to, among other business considerations, obtaining a favorable tax
ruling and compliance with applicable securities and other governmental
regulations and other business considerations.
LIQUIDITY-CAPITAL RESOURCES.
For the nine month period ended September 30, 1997, the Company's
operations consumed $129.3 million in cash. The use of funds resulted from an
increase in accounts receivable and a decrease in accounts payable. The
increase in accounts receivable resulted from the significant increase in both
brokerage and from stock sales while the decrease in accounts payable is
attributed to the timing of payment terms. This use of funds was partially
offset by a decrease in merchandise inventories. The Company is beginning to
build safety stocks to reduce the possibility of shortages due to certain
vendors reducing shipments during the fourth quarter. The Company continues to
closely monitor working capital in relation to economic and competitive
conditions. However, the emphasis on direct-store delivery and alternate care
business will continue to require both net working capital and cash.
Capital expenditures, predominantly for the purchase of warehouse
facilities, the expansion and automation of existing warehouses and the
investment in additional management information systems were $15.5 million
during the period.
Effective July 31, 1997, the Company purchased substantially all of the
operating assets and assumed most of the liabilities and contractual obligations
of TWD. The Company expended approximately $27 million for the acquisition of
TWD, which approximated the fair value of net assets acquired.
Effective August 7, 1997, the Priority Healthcare subsidiary of the Company
acquired substantially all of the operating assets and assumed most of the
liabilities of Groveway Pharmacy, Inc., a specialty distributor of vaccines and
injectables located in Castro Valley, CA. The acquisition was not considered
material and the amount expended approximated the fair value of the net assets
acquired.
The net increase in borrowings under the bank credit agreement was $114
million during the period. At September 30, 1997 the Company had borrowed $166
million under the bank credit agreement and had a remaining availability of $104
million.
The Company believes that its cash on hand, cash equivalents, line of
credit and working capital management efforts are sufficient to meet future
working capital requirements.
The Company's principal working capital needs are for inventory and
accounts receivable. The Company sells inventory to its chain drug warehouse
and other customers on various payment terms. This requires significant working
capital to finance inventory purchases and entails accounts receivable exposure
in the event any of its chain warehouse or other significant customers encounter
financial difficulties. Although the Company monitors closely the
creditworthiness of its major customers and, when feasible, obtains security
interests in the inventory sold, there can be no assurance that the Company will
not incur the write off or write down of chain warehouse or other significant
accounts receivable in the future.
On August 27, 1997 the Company called for redemption on September 12, 1997
all of its outstanding 61/2% Convertible Subordinated Debentures Due 2002 at a
redemption price of $1,039 per $1,000 principal amount of Debentures plus
accrued interest through the redemption date. Debenture holders could elect to
convert their debentures into shares of common stock of the Company through
September 12, 1997, which was the redemption date. Holders of all but $119,000
principal amount of the $67,350,000 outstanding Debentures elected to convert
their Debentures into common stock at the rate of 50.4 shares of common stock
for each $1,000 principal amount of Debentures. The redemption reduced the
Company's long-term debt by $67,350,000 and increased by 3.4 million the number
of issued shares of the Company's common stock.
FORWARD LOOKING STATEMENTS.
Certain statements included in this quarterly report, which are not
historical facts, are forward looking statements. Such forward looking
statements are made pursuant to the safe harbor provisions of the
Private/Securities Litigation Reform Act of 1995. These forward looking
statements involve certain risks and uncertainties including, but not limited
to, changes in interest rates, competitive pressures, changes in customer mix,
financial stability of major customers, investment procurement opportunities and
changes in government regulations or the interpretation thereof, which could
cause actual results to differ from those in the forward looking statements.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Selected Financial Data Schedule per Item
601 (c) (1) (ii) of Regulation S-B and S-K
(b) Reports on Form 8-K
None
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 thereunto duly authorized.
November 14, 1997 BINDLEY WESTERN INDUSTRIES, INC.
BY /s/ Thomas J. Salentine
Thomas J. Salentine
Executive Vice President
(Principal Financial Officer)
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