Bindley Western Reports Record Results; 3rd Quarter Earnings Increase 24%.

Business Editors, Health & Medical Writers

INDIANAPOLIS--(BW HealthWire)--Oct. 25, 2000

Bindley Western Industries, Inc. (NYSE:BDY) announced today record results for the quarter and nine month period ending September 30, 2000. In the 2000 quarter, the Company recorded a $5 million gain (net of tax) from the final settlement of the previously announced matter with the government. The Company had previously recorded a $25.8 million provision in the first quarter and the final settlement amount was $20.8 million (net of tax). In the 1999 third quarter, the Company recorded special charges (net of tax) of $1.4 million relating to the acquisition of Central Pharmacy Services. Net earnings, including the unusual items increased 104% to $17.4 million, or $.46 per diluted share for the quarter and decreased 44% to $15.7 million or $.42 per diluted share for the nine month period.

Reference to earnings in the following text excludes unusual items. Net earnings for the quarter increased 24% to $12.4 million, operating earnings increased 24% to $27.7 million and diluted earnings per share increased 22% to $.33. Total sales increased 7% to $2.31 billion, while from stock sales increased 20% to $1.53 billion and represented 66% of total sales. This is the 14th consecutive quarter in which earnings have increased by 22% or more over the prior year's quarter.

For the nine month period, net earnings increased 24% to $36.4 million, operating earnings increased 28% to $83.6 million and diluted earnings per share increased 23% to $.98. Total sales increased 17% to $7.23 billion while from stock sales increased 28% to $4.76 billion and represented 66% of total sales.

"Again we experienced another outstanding quarter, meeting both our internal expectations as well as the consensus of the analysts in the financial community who follow us," commented Chairman and CEO Bill Bindley. "We are particularly pleased with the results since we were comparing against an unusually strong 1999 quarter which was favorably impacted by the timing of manufacturers' pricing decisions relating to Y2K. We again were successful in deriving benefit from strong gains in our generic programs, which drive higher margins but on a lower proportional increase in sales. Also, our Central Pharmacy Services subsidiary had an outstanding quarter, producing a 59% gain in operating earnings on a 51% revenue increase."

"Despite the comparison to the unusual 1999 quarter, our financial ratios continued to improve. For the quarter, as a percent of from stock sales, gross margin increased 8 basis points to 4.44%, operating earnings increased 5 basis points to 1.81%, net earnings increased 3 basis points to 0.81% and SG&A expense increased 2 basis points to 2.44%. As a percent of total sales, gross margin increased 35 basis points to 2.94%, operating earnings increased 16 basis points to 1.20%, net earnings increased 8 basis points to 0.54% and SG&A expense increased 18 basis points to 1.62%. Annualized return on shareholder equity increased 190 basis points to 12.54%."

Keith Burks, President of the drug wholesaling business stated, "Once again we achieved our business plan and finished the quarter with a great deal of momentum. During the quarter, we announced agreements that will result in over $4 billion of total direct-store delivery (DSD) revenue over the life of the contracts, of which, nearly $2 billion is new business. More importantly, most of these contracts will utilize our Generic Advantage Program (GAP). As we have indicated, our forward plan is to continue building the from stock or direct-store-delivery portion of our business. Recently the no-margin dock-to-dock business with Eckerd Drug was replaced with over 500 new Eckerd DSD accounts. The dock-to-dock change began in late September and the DSD implementation should be complete by November 1st."

"We are very excited with the mid-October announcement and introduction of "WACminus.com", the industry's first Internet-based price advantaged pharmaceutical purchasing system that is available to the nation's 22,000+ independent and small chain pharmacies. The program offers real-time online purchases of certain brand and generic pharmaceuticals which have been discounted from the industry's standard wholesale acquisition cost (WAC). Early response has been very encouraging." Mr. Burks concluded, "Last year our managed care group brought in a tremendous amount of new business. This year, our retail group has performed equally as well. We are optimistic that we will be able to build upon this momentum with both groups continuing to produce record results through year-end and throughout 2001.

Fred Burke, President of Central Pharmacy Services, continued, "CPSI experienced another outstanding quarter. Robust growth in overall demand for radiopharmaceuticals, new account gains from our GPO marketing partnerships, and the incorporation of our second-quarter acquisition of Premier Pharmacy Services in Indianapolis allowed us to post another quarter of excellent results. Our revenues increased 51% over the 1999 quarter to $17.1 million. Operating earnings increased by 59% to $2.5 million and represented 15% of sales, the highest operating margin CPSI has ever achieved. CPSI's record revenue and earnings growth is well ahead of our industry and its contribution to Bindley Western's overall results continues to expand. Finally, CPSI will continue to execute its business plan on an accelerated basis, which includes strategic opportunities such as opening new greenfield startups and the acquisition of independent nuclear pharmacies. We will also continue to evaluate opportunities to maximize our value to Bindley Western and its shareholders, including the consideration of an initial public offering."

Mr. Bindley concluded, "As we have said all along, we are convinced the fundamentals in our industry are strong and those companies in a position to proactively identify and capitalize on new opportunities while maintaining a disciplined execution strategy will continue to deliver excellent returns to their shareholders."

Bindley Western will host a conference call today, October 25, 2000, at 1:00pm (Eastern Time) to discuss the quarterly results. The call will be broadcast both live and for a two-week period over the Internet. Participants will be able to access the live call as well as the replay at the "Investor Info" page on Bindley Western's site at http://www.bindley.com.

Certain information in this earnings press release may contain forward-looking statements as defined in Section 27A of the Securities Act and 21E of the Exchange Act. Certain factors could cause actual results to differ materially from those in the forward-looking statements. The most significant of such uncertainties are described in the company's Forms 10-K, 10-Q and 8-K and in exhibits to those reports.

Indianapolis-based Bindley Western, with annualized revenues of $10 billion, is a Fortune 500 company that provides a synergistic array of cost effective pharmaceutical and supply channel management products and services from 17 distribution facilities located in 14 states and from 32 specialty pharmacies located in 15 states. Customers include independent drug stores, chain drug stores, supermarkets and mass retailers with their own pharmacies, hospitals, clinics, HMOs, and managed care organizations, all of which are dedicated to lowering the cost of healthcare and improving the quality of patient care. Information on Bindley Western is available on-line at www.bindley.com. Information on Central Pharmacy Services is available on-line at www.centralpharmacy.com.

                  CONSOLIDATED STATEMENT OF EARNINGS
                   (000s omitted, except share data)

                     For the nine month         For the three month
                         period ended               period ended
                         September 30,              September 30,
                     ---------------------   -------------------------
                     2000          1999         2000             1999
                     ---------  ----------   ------------  -----------

Net sales from
  stock            $4,760,588  $3,716,173    $ 1,527,680  $ 1,272,768

Net brokerage
  sales             2,466,242   2,470,677        777,630      873,077

Other income            1,448       1,234            465          334
                    ----------  ----------    -----------  -----------
                    7,228,278   6,188,084      2,305,775    2,146,179
                    ----------  ----------    -----------  -----------

Cost of products
  sold              7,025,961   6,025,905      2,237,462    2,090,363

Selling, general
  and
  administrative      109,030      89,442         37,258       30,826

Interest
expense                23,359      16,466          7,206        5,822

Depreciation
  and amortization      9,710       7,346          3,377        2,639
                    ----------  ----------    -----------  -----------
                    7,168,060   6,139,159      2,285,303    2,129,650
                    ----------  ----------    -----------  -----------
Earnings before
  income taxes and
  unusual and
  extraordinary
  item                 60,218      48,925         20,472       16,529

Provision for
  income taxes         23,770      19,444          8,086        6,565
                    ----------  ----------    -----------  -----------
Earnings before
  unusual and
  extraordinary
  item                 36,448      29,481         12,386        9,964

Unusual and
  extraordinary
  item, net of
  tax(1)               20,790       1,436         (5,000)       1,436
                    ----------  ----------    -----------  -----------
Net
  earnings          $  15,658   $  28,045      $  17,386    $   8,528
                    ==========  ==========    ===========  ===========

Earnings per share:
  Basic:
  Earnings before
  unusual and
  extraordinary
  item               $   1.06    $   0.88       $   0.35     $   0.30
  Net earnings       $   0.45    $   0.84       $   0.50     $   0.25


  Diluted:
  Earnings
  before unusual
  and extraordinary
  item               $   0.98    $   0.80       $   0.33     $   0.27
  Net earnings       $   0.42    $   0.76       $   0.46     $   0.23

Average shares
  outstanding:
  Basic            34,529,602  33,370,816     35,014,326   33,633,394
  Diluted          37,263,026  36,663,425     37,968,255   37,016,272

(1) Unusual and extraordinary item consisted of government settlement

and merger related expenses in 2000 and 1999, respectively.