FOXMEYER SALES GROW 16% TO $667 MIL. IN FIRST QUARTER WITH OPERATING EARNINGS AHEAD 40% TO $10 MIL.; PHAR-MOR AGREEMENT WILL HELP FUEL FUTURE GROWTH

Executive Summary

National Intergroup's FoxMeyer wholesale drug subsidiary posted a 16% sales gain to $667 mil. in the first quarter of fiscal 1991. For the three months ended June 30, National Intergroup reported that FoxMeyer generated operating earnings (before goodwill) of $10 mil., up 39% from the same period last year. "The results of the quarter reflect strong independent and institutional sales, along with significant increases in chain store sales from existing and newly added accounts," FoxMeyer President and CEO Robert King said. "At the same time progress continues to be made in reducing costs while maintaining and improving customer service levels." A five-year, $2.8 bil. supply agreement with the drug chain Phar-Mor was announced by National Intergroup management at the company's annual shareholders meeting July 25. The company also said it has picked up additional business from K-mart, which is consolidating its wholesale accounts. FoxMeyer is currently the subject of a tug-of-war between National Intergroup management, which plans to divest all of the diversified companies holdings except FoxMeyer, and a dissident shareholder group, Centaur Partners, which wants to liquidate the entire company, including the wholesale drug business.