Bergen to Be Sole Supplier of Products to Longs Stores

Bergen Brunswig Corp., said Thursday that it has won a seven-year contract valued at $6.3 billion to be the sole supplier of drugs, health and beauty aids, and over-the-counter medical products to Longs Drug Stores Corp., the sixth largest drug store operator in the United States.

The contract is currently split between Bergen and No. 1 U.S. wholesaler McKesson HBOC Inc. Bergen said about 50% of the $900 million annual revenue will be new business.

Orange-based Bergen, the third largest U.S. drug wholesaler, also said its first-quarter profit rose 31% on a 25% increase in revenue.

The company earned $27.9 million, or 27 cents a share, up from $21.3 million, or 21 cents a share, a year earlier. Analysts had estimated earnings of 26 cents a share, according to a survey by First Call Corp. Revenue rose to $4 billion from $3.2 billion a year earlier.

Bergen said it added more than 100 new customers during the quarter, which ended Dec. 31, and improved the operation of its medical supply unit. Drug wholesalers have benefited from the explosion of new drug treatments for the aging U.S. population.

“They are adding new customers, more than I anticipated,” said Kristi Thiese, a Raymond James analyst with a “buy” rating on Bergen.

Bergen said Longs Drug Stores Corp. operates 380 stores in California, Hawaii, Nevada, Colorado, Washington and Oregon.

Bergen’s stock closed Thursday at $29.13, down 31 cents a share.