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ARBOR DRUGS, INC. REPORTS YEAR-END RESULTS AND ANNOUNCES SETTLEMENT WITH BLUE CROSS OF MICHIGAN

 TROY, Mich., Oct. 21 /PRNewswire/ -- Arbor Drugs, Inc. (NASDAQ-NMS: ARBR), which currently operates 141 drugstores in Michigan, today announced earnings and sales for the year ended July 31, 1993. Excluding one-time charges incurred during fiscal 1993, net income would have been up 14.0 percent. Net sales for the year increased 12.2 percent.
 The one-time charges are attributable to a $15 million settlement of a reimbursement claim with Blue Cross of Michigan, and related expenses, recorded in the fourth quarter of fiscal 1993, and the disposition of a lease dispute in the second quarter of the year. This resulted in respective pre-tax charges to income of $16 million (after-tax $10,400,000 or $.64 per share) and $1,025,000 (after-tax $677,000 or $.04 per share).
 The company also announced that Blue Cross of Michigan has invited Arbor to participate in its proposed new pharmacy plans, tentatively scheduled to become effective early in calendar year 1994.
 Arbor's fiscal 1993 net income was $6,909,000, or $.43 per share, down from $15,774,000, or $.98 per share, in fiscal 1992. Excluding one-time charges, net income would have increased 14.0 percent to $17,986,000, or $1.11 per share. Net sales for the year were $534,966,000, vs. $476,848,000 last year. Comparable store sales increased 7.0 percent for the year.
 A net loss of $6,012,000 was incurred in the fourth quarter of fiscal 1993, compared to last year's net income of $4,031,000. Excluding the one-time fourth-quarter charge, earnings per share for he three months would have increased to $.27 from $.25 in fiscal 1992. Sales for the quarter ended July 31, 1993, were $136,733,000, up 10.6 percent from $123,682,000 in the prior year. Comparable store sales were up 5.0 percent for the three-month period.
 Commenting on the results, Arbor Chairman, President and Chief Executive Officer Eugene Applebaum said: "Looking beyond the impact of the one-time charges, fiscal 1993 was another year of distinction, as sales exceeded the one-half billion dollar level for the first time in our company's history. Although we believe that our charges to Blue Cross were consistent with the terms of our agreements, we feel that the settlement of the dispute is in the company's overall best interests. I am pleased to add that Arbor will be participating in Blue Cross' pharmacy plans, continuing a working relationship that extends back over 25 years."
 Applebaum also noted: "In addition to being a drugstore industry leader in comparable store sales increases, we are very pleased with the excellent performance of the 15 new stores opened during fiscal 1993. Arbor's aggressive growth reflects our confidence in the drugstore industry's future and in our ability to deliver greater value for our customers and shareholders. For the fiscal year ending July 31, 1994, we anticipate opening or acquiring 20 to 25 additional stores, including the planned acquisition of M & R Drugs, a 10-store chain which operates in our primary market area of southeastern Michigan."
 Applebaum continued: "Despite the sluggish economy, the drugstore segment of the retail industry continues to be fairly recession- resistant, as customers depend on the conventional drugstore for everyday items and health care needs."
 Founded in 1963, Arbor Drugs is the nation's 20th-largest drugstore chain in terms of annual sales.
 ARBOR DRUGS, INC.
 FINANCIAL HIGHLIGHTS
 (Dollars and number of shares in 000's)
 Three Months Ended July 31,
 Percent
 1993 1992 Change
 Net sales $136,733 $123,682 10.6
 Cost of sales 99,788 90,030 10.8
 Selling, gen & admin exp 29,861 27,275 9.5
 Provision for third party
 settlement and expenses 16,000 --- ---
 Income (loss) from operations (8,916) 6,377 ---
 Income (loss) before income tax (9,045) 6,076 ---
 Income tax provision (benefit) (3,033) 2,045 ---
 Net income (loss) (6,012) 4,031 ---
 Earnings (loss) per common share ($.37) $.25 ---
 Weighted average number of common shares 16,240 16,177 0.4
 Year Ended July 31,
 Percent
 1993(A) 1992 Change
 Net sales $534,966 $476,848 12.2
 Cost of sales 390,896 346,140 12.9
 Selling, gen & admin exp 117,337 105,783 10.9
 Provision for third party
 settlement and expenses 16,000 --- ---
 Income from operations 10,733 24,925 (56.9)
 Income before income tax 9,956 23,561 (57.7)
 Income tax provision 3,047 7,787 (60.9)
 Net income 6,909 15,774 (56.2)
 Earnings per common share $.43 $.98 (56.1)
 Weighted average number of common shares 16,217 16,138 0.5
 Number of stores (end of period) 138 123 12.2
 (A) 1993 results also include a $1.025 million pre-tax charge to earnings (after-tax $677,000 or $.04 per share), resulting from the disposition of a lease dispute. Pro forma results, excluding this charge and the charge for the third party settlement and related expenses, would have been as follows:
 Three Months Ended July 31,
 Percent
 1993 1992 Change
 Income from operations $7,084 $6,377 11.1
 Net income 4,388 4,031 8.9
 Earnings per common share $.27 $.25 8.0
 12 Months Ended July 31,
 Percent
 1993 1992 Change
 Selling, gen & admin exp $116,312 $105,783 10.0
 Income from operations 27,758 24,925 11.4
 Net income 17,986 15,774 14.0
 Earnings per common share $1.11 $.98 13.3
 -0- 10/21/93
 /CONTACT: Gilbert C. Gerhard, chief financial officer of Arbor Drugs, 313-643-9420/
 (ARBR)


CO: Arbor Drugs, Inc. ST: Michigan IN: REA SU: ERN

ML-SM -- DE006 -- 4984 10/21/93 08:50 EDT
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Date:Oct 21, 1993
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