Bindley Western Reports Record Results -- 2nd Quarter Earnings Increase 22%.

Business & Health/Medical Editors

INDIANAPOLIS--(BW HealthWire)--July 26, 2000

Bindley Western Industries, Inc. (NYSE:BDY) announced today a continuation of record earnings for the quarter and six-month period ending June 30, 2000.

For the quarter and six-month period, the 1999 results have been restated to include Central Pharmacy Services (CPSI), which was acquired on August 31, 1999. Unless otherwise noted, reference to earnings is before unusual and extraordinary items.

Net earnings for the quarter increased 22% to $12.0 million, operating earnings increased 29% to $27.6 million and diluted earnings per share increased 22% to $.33. Total sales increased 19% to $2.44 billion, while from-stock sales increased 30% to $1.59 billion and represented 65% of total sales. This was the 13th consecutive quarter in which earnings have increased by 22% or more over the prior-year's quarter.

For the six-month period, net earnings increased 23% to $24.1 million, operating earnings increased 30% to $55.9 million and diluted earnings per share increased 23% to $.65. Total sales increased 22% to $4.92 billion while from-stock sales increased 32% to $3.23 billion, representing 66% of total sales.

"Our performance for the quarter and first half of 2000 was outstanding," commented Chairman and CEO Bill Bindley. "As was the case in the first quarter, earnings were driven by strong from-stock sales and excellent results from our Central Pharmacy Services subsidiary. By continuing to focus on programs and customers that drive higher contributions to earnings, we were again able to improve our operating ratios. As a percent of total sales for the quarter, gross profit margin increased 14 basis points to 2.75%, operating earnings increased by 9 basis points to 1.13% and net earnings increased 1 basis point to 0.49%. While SG&A expense increased by 22% over the 1999 quarter, as a percent of total sales it only increased 3 basis points to 1.50% and as a percent of from-stock sales it dropped 16 basis points to 2.32%.

Commenting on the performance of drug wholesaling, President Keith Burks stated, "Management continues to be pleased with the execution of our business plan and the corresponding results. With from-stock sales again increasing by over 30%, as we continue to layer in new business, and our new distribution centers in Colorado, Kansas and Wisconsin operating at a profit, we began focusing on programs to improve our working capital management. Positive results were achieved in inventory turnover and receivables control and we expect to continue the reduction of our net borrowing requirements in future quarters. For the six months ended June 30, 2000, operations provided approximately $167 million of cash. As a result, borrowings under our bank line were $280 million at June 30, 2000, down from $395 million and $482 million at December 31, 1999 and March 31, 2000, respectively. We intend to increase the use of internally generated funds as we concentrate on developing the higher-contribution components of the business. We continue to market strategic business initiatives and are optimistic that our efforts will be successful over the next few months. Encouraged by new business opportunities, we feel comfortable that certain new customer relationships will be announced in the near future."

Fred Burke, President of Central Pharmacy Services, continued, "As was the case with the drug wholesale business, CPSI had an outstanding quarter. Highlighted by the April 19, 2000 purchase of Premier Pharmacy Services, an Indianapolis-based centralized nuclear pharmacy, our revenues increased 52% over the 1999 quarter to $16.1 million. Operating earnings increased by 64% to $2.3 million and represented 14% of sales, a full-percentage-point improvement. CPSI's contribution to the Company's overall results is especially encouraging to our management team. During the quarter, we opened one new "greenfield" pharmacy and are reviewing other new locations, consistent with our business plan, which projects we will continue to grow at a pace well in front of the industry on both an internal and external basis. To help finance that growth, CPSI is currently considering a partial initial public offering of up to 20% of the common shares of CPSI."

Mr. Bindley concluded, "We continue to be excited with the opportunities to reward our shareholders with industry-leading results. The financial community appears to appreciate the growth opportunities in our industry by significantly increasing the valuation models. The foundations are sound in both drug wholesaling and nuclear pharmacy and we intend to explore various alternatives for accelerating the return to our shareholders by maximizing the value of our assets.

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 chain drug stores, independent 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.

Certain information in this press release contains 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.

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

                             For the six month   For the three month
                               period ended         period ended
                                 June 30,             June 30,
                            ------------------- ---------------------
                              2000       1999       2000       1999
                            --------   --------   --------   --------

Net sales from stock       $3,232,908 $2,443,406 $1,585,415 $1,216,626
Net brokerage sales         1,688,613  1,597,600    857,996    839,215
Other income                      983        899        440        416
                           ---------- ---------- ---------- ----------
                            4,922,504  4,041,905  2,443,851  2,056,257
                           ---------- ---------- ---------- ----------

Cost of products sold       4,788,499  3,935,541  2,376,220  2,002,117
Selling, general and
 administrative                71,772     58,616     36,723     30,191
Interest expense               16,153     10,645      7,851      5,095
Depreciation and
 amortization                   6,333      4,707      3,275      2,560
                           ---------- ---------- ---------- ----------
                            4,882,757  4,009,509  2,424,069  2,039,963
                           ---------- ---------- ---------- ----------

Earnings before income
 taxes and unusual and
 extraordinary item            39,747     32,396     19,782     16,294
Provision for income taxes     15,684     12,879      7,802      6,483
                           ---------- ---------- ---------- ----------
Earnings before unusual
 and extraordinary item        24,063     19,517     11,980      9,811
Unusual and extraordinary
 item, net of tax              25,790
                           ---------- ---------- ---------- ----------
Net earnings (loss)        $   (1,727)$   19,517 $   11,980 $    9,811
                           ---------- ---------- ---------- ----------
                           ---------- ---------- ---------- ----------

Earnings per share:
 Basic:
 Earnings before unusual
  and extraordinary item       $ 0.70     $ 0.59     $ 0.35     $ 0.29
Net earnings (loss)            $(0.05)    $ 0.59     $ 0.35     $ 0.29

Diluted:
 Earnings before unusual
  and extraordinary item       $ 0.65     $ 0.53     $ 0.33     $ 0.27
Net earnings (loss)            $(0.05)(A) $ 0.53     $ 0.33     $ 0.27

Average shares outstanding:
 Basic                     34,284,576 33,237,351 34,460,951 33,406,619
 Diluted                   36,907,748 36,484,825 36,754,482 36,781,537

(A) Common share equivalents would have been anti-dilutive and were
excluded from calculation.