ORANGE — Bergen Brunswig Corp. on Monday reported record revenue and higher profit for its latest fiscal year.
The Orange-based drug distributor said its revenue for the 12 months ended Sept. 30 rose to a record $7.5 billion. That was up 10% from revenue of $6.8 billion for the previous year.
The company reported profit of $56.1 million, or $1.52 a share, an increase from earnings of $26 million, or 72 cents a share, a year earlier.
The healthy gains caught Wall Street by surprise and kicked the company's stock price up nearly 86 cents to close at $16.50 a share in Monday's New York Stock Exchange trading.
"They have performed better than anyone expected," said Kevin Silverman, an analyst with the brokerage Kemper Securities in Chicago. "For the first time in four years, they have had an improvement in gross margins and have changed from consistently lower margins to a slight increase."
For the past year, Bergen Brunswig has worked to boost its profitability by containing costs. Chief Financial Officer Neil Dimick said Monday that the restructuring saved the company about $18 million for the latest year.
The company has closed nine of its 35 distribution centers in the past 12 months and consolidated them into larger, more efficient regional centers. It has also laid off about 500 employees, or one-eighth of its work force.
Bergen Brunswig also changed its product mix to focus on the production of drugs such as generics, which have higher profit margins, and has focused on more profitable businesses, such as distributing pharmaceuticals to nursing homes and oncology centers.
The company's president hinted Monday that an acquisition may be likely now that Bergen Brunswig has improved its bottom line.
"We are now better positioned to take advantage of acquisition opportunities, especially in the higher-margin medical surgical supply markets," said Robert E. Martini, chairman and chief executive officer.
Analysts said such a move by Bergen Brunswig seems reasonable.
"The company has solid cash flow and continued good results are likely to bolster the stock, making that better currency for continued growth through acquisition," said Don Hultgren, an analyst with the brokerage Raymond, James in St. Petersburg, Fla.
For the fourth quarter, Bergen Brunswig said its revenue grew to a record $1.9 billion, compared to $1.8 billion for the same period a year earlier. Profit was $16.2 million, or 43 cents a share. That contrasted with a loss of $13.1 million, or 36 cents a share, for the same period a year earlier.
Bergen Brunswig's Bottom Line
Bergen Brunswig Corp. announced record revenue and increased earnings for its fiscal year ended Sept. 30. For the fourth quarter, revenue grew to a record $1.9 billion. The company supplies pharmaceuticals to hospitals, managed-care facilities and pharmacies. Figures in thousands of dollars except data per share:
4th qtr. 4th qtr. 12 months 12 months 1993 1994 1993 1994 Revenue $1,756,409 $1,924,868 $6,823,552 $7,483,801 Net income (loss) (13,128) 16,233 26,037 56,120 Per share (loss) (0.36) 0.43 0.72 1.52
Source: Bergen Brunswig Corp.