Bergen Brunswig Reports 38.9% Rise in Income for Year : Growth: The Orange-based company attributed the increase in part to strong sales of specialty drugs and a tight rein on operating costs.

Benefiting in part from increased sales of its high-priced specialty drugs and a tight rein on operating costs, Bergen Brunswig Corp. on Monday reported a 38.9% rise in net earnings for its last fiscal year.

The Orange-based firm, a distributor of pharmaceutical products and home video cassettes, posted net income of $66.1 million on sales of $4.44 billion for the year ended Aug. 31, compared with net earnings of $47.6 million on sales of $3.92 billion for the previous year.

In the fourth quarter, the company posted net earnings of $14.5 million, up 35% from $10.7 million for the fourth quarter of fiscal 1989. Fourth quarter sales increased 12.6%, to $1.12 billion from $997.8 million for the same period the year before.

Robert E. Martini, the company’s president and chief executive, attributed the good performance to strong sales in its drug and health care products and its ability to restrain operating costs.

“Although the gross profit margin rate was slightly below the prior year, the contribution from the increase in sales and effective operating expense controls produced a significant improvement in operating earnings,” he said in a statement.

Bergen Brunswig, which is Orange County’s second largest public company in terms of sales, continues to ride on the coattails of its pharmaceutical products, particularly on the sales of its high-priced specialty drugs and biotech products, said John McRae, vice president of Bear Stearns & Co. in New York.

He said the company has gained market share on competitors, including McKesson Corp. of San Francisco and Alco Health Services of Valley Forge, Pa.

“There’s a shift in the availability and introduction of high-priced specialty drugs in that many are administered in the hospital environment,” McRae said. “This helps Bergen (because) 40%-45% of Bergen drugs go to hospitals and are primarily used in cases of critical illnesses and by patients that need constant monitoring. This will go very much in Bergen’s favor.”

The trend toward administering drugs in the hospital environment has just started and will accelerate in the next five years, he said. The company, maintaining a low debt and high cash reserves of about $100 million, is “in a very good position to ride through whatever economic downturn in the coming fiscal year,” McRae said.

Commtron Corp., Bergen’s home video and consumer electronics subsidiary, also posted gains as a result of changes in its distribution method, said George E. Reinhardt Jr., Bergen’s chief financial officer.

The unit’s sales for the year were $554 million, just slightly above last year’s $550 million. But net income was $9.2 million, up 17.6% from $7.9 million last year. In the fourth quarter, Commtron reported net income of $2 million on sales of $119.4 million, compared to earnings of $1.7 million on sales of $128.4 million in the same period in 1989.