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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K

(Mark One)
     [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996

                                       OR

     [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934


          FOR THE TRANSITION PERIOD FROM_________TO_________

                        COMMISSION FILE NUMBER: 0-11355

                        BINDLEY WESTERN INDUSTRIES, INC.
                        --------------------------------
             (Exact name of registrant as specified in its charter)


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      INDIANA                                                       84-0601662
(State or other jurisdiction of                                     (I.R.S. Employer
incorporation or organization)                                      Identification No.)

10333 North Meridian Street, Suite 300, Indianapolis, Indiana       46290
(Address of principal executive offices)                            (Zip Code)
</TABLE>


Registrant's telephone number, including area code:         (317) 298-9900

          Securities registered pursuant to Section 12(b) of the Act:


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<S>                                     <C>
Common Stock ($.01 par value)                  New York Stock Exchange
     (Title of class)                   (Name of exchange on which registered)
</TABLE>


          Securities registered pursuant to section 12(g) of the Act:

                   6-1/2% Convertible Subordinated Debentures
                                (Title of class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports),  and (2) has been subject to
such filing requirements for the past 90 days.  Yes  x  No
                                                    ---    ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
                                  $156,895,110

Aggregate market value of the voting stock held by nonaffiliates of the
registrant based on the last sale price for such stock at March 14, 1997
(assuming solely for the purposes of this calculation that all Directors and
Officers of the Registrant are "affiliates")

                                   11,628,557

       Number of shares of Common Stock outstanding as of March 14, 1997

                      DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following document have been incorporated by reference into
this annual report on Form 10-K:

<TABLE>
<S>                                           <C>
IDENTITY OF DOCUMENT                          PARTS ON FORM 10-K INTO WHICH
                                              DOCUMENT IS INCORPORATED

Proxy Statement to be filed for the
1997 Annual Meeting of Common
Shareholders of Registrant
</TABLE>


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                             BINDLEY WESTERN INDUSTRIES, INC.
                             Indianapolis, Indiana

              Annual Report to Securities and Exchange Commission
                               December 31, 1996


                                     Part I

Item 1. BUSINESS.

General
     Bindley Western Industries, Inc., an Indiana corporation, together with
its subsidiaries (the "Company"), is the country's fifth largest (in terms of
annual sales) wholesale distributor of pharmaceuticals and related health care
products.  Its product lines include ethical pharmaceuticals (prescription
drugs), dialysis supplies, health and beauty care products and home health care
merchandise.  The Company's wholesale drug customer base includes chain drug
companies which operate their own warehouses, individual drug stores, both
chain and independent, hospitals, clinics, HMOs, state and federal government
agencies and other health care providers.  The Company's drug wholesaling
operations service customers in approximately 37 states plus Puerto Rico from
its 10 distribution centers located in Austell, GA; Dallas, TX; Houston, TX;
Indianapolis, IN; Middletown, PA; Orange, CT; Orlando, FL; Portland, ME; San
Dimas, CA; and Shelby, NC.  By using the Company as a primary source of
pharmaceuticals, these customers can centralize purchasing functions, exercise
better inventory control, maintain better security and reduce handling costs.

     The Company has historically specialized in the distribution of ethical
pharmaceuticals to chain drug companies which maintain their own warehouses.
Currently, the Company services five of the top 10 chain drug companies, based
on sales and number of stores, in the United States.  The Company believes that
its technological innovation and superior customer service has enabled it to
better serve these customers.

     Since 1987, the Company has focused its marketing efforts on direct store
delivery customers.  The Company has increased sales to these customers from
$171 million in 1987 to $1,859 million in 1996.  To further this growth, the
Company purchased J.E. Goold in 1992 and Kendall Drug in 1994 to strengthen the
Company's position in the northeastern and southeastern United States,
respectively.

     In 1994, the Company created Priority Healthcare Corporation as a
wholly-owned subsidiary to focus on the higher margin alternate care/alternate
site services market.  These services are provided by facilities outside of the
hospital environment. Priority Healthcare's distribution businesses, located in
Altamonte Springs, FL and Santa Ana, CA, cater to doctors and clinics serving
patients in need of renal care, oncology, and infectious disease therapy while
its provider businesses, located in Altamonte Springs, FL and Indianapolis, IN,
deal directly with patients suffering from various chronic diseases.  Priority
Healthcare's customers are located in 50 states and Puerto Rico.

     The Company's sales of $5.32 billion for 1996 represented the 28th
consecutive year of record sales, equating to a compound growth rate of 20%
since its inception in 1968.  This

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growth is the result of market share gains in existing markets, expansion into
new markets and overall growth in the health care delivery industry.

Suppliers
 
     During  each of the last five fiscal years, more than 90% (based on
dollar volume) of the Company's  purchases  were  ethical  pharmaceutical
products.  Of the thousands  of  ethical  pharmaceutical products  carried  in
inventory, a comparatively small number account for a disproportionately large
share of the total dollar volume of products sold. The Company's largest
supplier, Pfizer, Inc. , accounted for 14% and the five largest suppliers,
Pfizer, Inc., Eli Lilly and Company, Bristol-Myers Squibb Company, SmithKline
Beecham and Astra Merck,  accounted for approximately 39% of its net sales
during fiscal 1996. The Company maintains many competing products in inventory
and is not dependent upon any single supplier, although the loss of a major
supplier could adversely affect the business of the Company if alternate
sources of supply were unavailable.  The Company's arrangements with its
suppliers typically may be canceled by either party, without cause, on one
month's notice,  although many of these arrangements are not governed by formal
agreements.   The Company believes its relationships with its suppliers are
generally good.   See, also, Industry Overview -- Manufacturer Pricing and
Distribution Policies in Part I, Item 1.

Customers and Markets

Direct Store Delivery Market.

     The Company provides direct store delivery service to customers from each
of its ten distribution centers.  Independent drug stores, non-warehouse chain
drug stores, hospitals, clinics, HMOs, state and federal agencies and other
health care providers comprise the primary types of customers.  Purchases by
these customers generally consist of less than full-case lots which are
generated on a daily basis when a customer needs a particular item. While
smaller in quantity, these sales typically generate higher margins than sales
to warehouse customers.  Shipments to direct store customers are delivered on a
daily basis by the Company's vehicles or by a for-hire carrier.

     While much less concentrated than chain warehouse sales, the direct store
delivery business has experienced significant growth as the Company has
successfully expanded its business scope.  Since 1987,  direct store sales have
increased from $171 million to $1,859 million, demonstrating a compound annual
growth rate of 30%.  During 1996, direct store delivery sales were comprised of
approximately 37% to chain drug stores, 31% to independent pharmacies and 32%
to managed care institutions.  Direct store delivery sales have increased from
approximately 16% of net sales in 1987 to approximately 35% in 1996.  During
1996, no single direct store delivery customer exceeded 10% of the Company's
total net sales and the loss of any one of these customers should not  have  a
material adverse effect on the Company's operations.

     As part of the Company's goal of providing value-added solutions to its
customers' business needs, the Company implemented the "Profit Partners" and
the "1st Choice for Value" programs in 1993 and 1994.  These competitive,
PC-based, marketing support and merchandising programs include a generic
pharmaceutical source program, a home health care program, a private label over
the counter program and the Rx LINX and MASTER LINX purchasing and inventory
management systems.  Designed to enhance the competitiveness of

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retail, small chain and managed care pharmacies, these programs reflect the
Company's commitment to adding value to the services provided to its customers.
The Company believes that it would not be feasible for these customers to
independently develop and maintain these services on their own.

     The Company believes that the opportunities for growth for this market of
the business should continue through expansion into new geographical areas and
increasing market share in existing markets.  The Company is focused on the
development of new services and programs through interaction and cooperation
with both customers and suppliers. These programs are designed to enhance
profitability, provide added value to the customer, and strengthen the
Company's role in the distribution channel.  These programs include
computerized ordering systems, inventory management programs, generic
pharmaceutical source programs, repack programs, innovative advertising and
marketing campaigns and merchandising programs, including private label product
lines.

Chain Warehouse Market.

     Chain warehouse customers purchase in full-case lots for redistribution to
individual retail outlets.  Approximately 65% of the Company's 1996 net sales
are attributable to chain drug warehouse customers.  The Company's largest
chain drug customers and the approximate period of time they have done business
with the Company are:  Eckerd Corporation (24 years); Peyton (7 years);
Thrifty-Payless Corporation (14 years); Revco D.S., Inc. (19 years); CVS (27
years); and Rite Aid Corporation (24 years). The following chain drug warehouse
customers each accounted for over 10% of the Company's net sales during the
years shown:   Eckerd Corporation (17%), Rite Aid Corporation (14%) and Revco
D.S., Inc. (12%) in 1996; Eckerd Corporation (19%), Rite Aid Corporation (15%)
and Revco D.S., Inc. (10%) in 1995; and Eckerd Corporation (22%) and Rite Aid
Corporation (11%) in 1994.  Net sales to these customers aggregated 43%, 44%
and 33% of net sales for the past three years, respectively.

     By using the Company as a primary source of pharmaceuticals, the Company
believes that a chain drug customer can centralize purchasing functions,
exercise better inventory control, maintain better security and reduce handling
costs.  Inventory control and security are particularly important to these
customers because of the relatively high dollar value of pharmaceuticals in
relation to their physical size.  In addition, the Company has developed
systems and procedures which the Company believes facilitate customer
compliance with the recordkeeping and physical security requirements of the
Controlled Substances Act of 1970 and the Prescription Drug Marketing Act of
1987.  For example, shipments of controlled substances are billed on separate
invoices and special security procedures are followed to reduce the possibility
of theft during the distribution process.  Additionally, the Company offers
these customers software to permit direct communication with the ordering
computers, thus avoiding the need to change the customers' existing software.

     The Company, from time to time, has entered into written understandings
with certain of its major chain warehouse customers setting forth various terms
and conditions of sale.  The Company, however, does not have any long-term
contracts with its major customers and all relationships with such customers
are terminable at will by either party.  The loss of any one of the Company's
chain warehouse customers could have a material adverse effect on the Company's
operations.  Although the Company believes that the effect could be minimized
through increasing sales to existing customers, securing additional customers
within current

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distribution areas and by expanding into new markets, there can be no assurance
thereof.  See, also, Note 11 - Major Customers in the Company's financial
statements, which is incorporated herein by reference.

Alternate Care/Alternate Site Market.

     In 1993, the Company purchased Charise Charles, a wholesale distributor of
oncology and renal care pharmaceuticals and biotech drugs.  PRN Medical, also
acquired in 1993, was a wholesale distributor of renal care supplies and
dialysis equipment.  PRN's market, which included Central and South America,
complimented Charise Charles and the two companies were combined in 1994 as
part of Priority Healthcare Corporation, a wholly-owned subsidiary created by
the Company to provide a greater management focus and an enhanced ability to
meet the needs of the higher margin alternate care/alternate site markets.  3C
Medical, located in Santa Ana, CA, also joined the corporate family in 1994.
It distributes acute dialysis products to its West Coast customers.  Sales in
this specialized division are aided by exclusive distribution agreements with
major vendors.  Charise Charles, PRN Medical and 3C Medical are now called
Priority Distribution.  Priority Distribution currently services over 2,000
customers in 50 states and Puerto Rico.

     The IV One Companies, acquired by Priority Healthcare Corporation
effective January 1,1995, are comprised of IV-1, Inc. (IV-1), a national
infusion pharmacy and nursing service company; National Pharmacy Providers,
Inc. (NPP), a nationwide clinical pharmacy; and IV-One Services, Inc., a
specialty wholesale distributor.  These three companies are located in
Altamonte Springs, FL  in facilities that adjoin those of Priority
Distribution.  IV-1, the principal company, provides innovative, nationwide
pharmacy services and ambulatory infusion therapy.  Its emphasis is on high
acuity specialty pharmacy and nursing services in addition to providing
comprehensive disease state management.  In early 1995, it received
Accreditation with Commendation for its pharmacy and nursing services from the
Joint Commission on Accreditation of Healthcare Organizations.  NPP is
available to patients and physicians who require pharmacy products and services
but do not require extensive clinical monitoring.  Both IV-1 and NPP have
registered nurses and pharmacists available 24 hours a day, seven days a week
for patients and referring physician offices.  IV-1 operates a clinical
pharmacy in Altamonte Springs, and NPP operates clinical pharmacies in
Altamonte Springs, FL and Indianapolis, IN.

     The IV One Companies' vision is to provide affordable, patient-centered
services to patients outside the acute care setting and to provide high quality
clinical pharmacy and nursing services.  Though their original market focused
on biotech drugs  that are available for self administration via subcutaneous
injection and disease management, therapies have now expanded to include a
variety of infusion services such as total parenteral nutrition, antibiotic
therapy, hydration therapy and chemotherapy.  The IV One Companies provide
these services in both the home setting and in their in-house infusion suites.

     National Infusion Services, Inc. was incorporated in January 1996 to
purchase the infusion services business of a group medical practice located in
Indianapolis, IN.  The corporate name was changed to Priority Healthcare
Services Corporation (PHS) in February 1997 to remove the impression in the
marketplace that the company only provided infusion related services.  In
conjunction with the IV One Companies, PHS intends to expand its business as a
physician managed provider of quality care to patients in a variety of
settings, including the home, extended care facilities and PHS' outpatient
center in Indianapolis.


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     Through its Priority Healthcare Corporation subsidiary, the Company has
strategically positioned itself as a national provider in these important
markets  and is moving towards being a one-stop-shop for physicians, patients
and other customers for alternate care/alternate site health care needs.

Internal Systems Development

     The Company has developed and  continues to improve its specialized
internal operating and management systems.  Inventories and accounts receivable
are controlled through the use of Company developed data processing and
management information systems.  These assets are monitored by distribution
center management using on-site data processing equipment.  At present, many
operational functions, including accounting, cash management, accounts
receivable and inventory control are conducted through data processing
operations at the Altamonte Springs, Indianapolis, Shelby and Portland
facilities.  Data is transmitted to and from on-site data processing equipment
at the distribution centers.


Expansion/Acquisitions

     The Company continues to seek opportunities to expand its operations
geographically through the development of new distribution centers or the
acquisition of existing wholesale drug distributors or alternate care/alternate
site distributors or providers.  Presented below is a brief discussion of
acquisitions by the Company since 1992.   All of the acquisitions have been
accounted for under the purchase method and, accordingly, the results of
operations of the acquired companies have been included in the Company's
financial statements from the effective date of acquisition. The purchase price
has been allocated based on a determination of the fair value of the assets
acquired and liabilities assumed.  The goodwill associated with these
acquisitions is being amortized on a straight line basis not exceeding 40
years.  See, also, Note 12 - Statement of Cash Flows in the Company's financial
statements, which is incorporated herein by  reference.

J.E. Goold.

     On March 25, 1992, the Company effected a merger with J.E. Goold, a
full-line, full-service distributor of pharmaceutical, health and beauty care
and home health care products based in Portland, ME.

Charise Charles and PRN Medical.

     On February 28, 1993 and October 6, 1993, the Company acquired Charise
Charles Ltd., Inc., a wholesale distributor of oncology and dialysis products
based in Altamonte Springs, FL and PRN Medical, Inc., a wholesale distributor
of renal and dialysis supplies and equipment based in Orlando, FL,
respectively.  These companies are currently doing business as Priority
Healthcare Distribution.

Kendall Drug Company.


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     Effective July 1, 1994, the Company acquired the net assets of Kendall
Drug Company, a wholesale distributor of pharmaceutical products and health and
beauty care products based in Shelby, NC.

3C Medical.

     On October 31, 1994, the Company, through its Priority Healthcare
Corporation subsidiary, acquired  in a merger all of the outstanding stock of
3C Medical, Inc., a Santa Ana, CA based distributor of hemodialysis products.
This division specializes in the acute dialysis market in Southern California
through exclusive distribution agreements with major vendors. This company is
currently doing business as Priority Healthcare Distribution.


IV One Companies.

     Effective January 1, 1995, the Company, through its Priority Healthcare
Corporation subsidiary, acquired all of the outstanding stock of the IV One
Companies in a cash transaction.  The IV One Companies are comprised of IV-1,
Inc., IV-One Services, Inc., and National Pharmacy Providers, Inc.  These
companies focus on high acuity specialty pharmacy services for patients
requiring home and ambulatory infusion therapy and are operated as subsidiaries
of Priority Healthcare Corporation from Altamonte Springs, FL. These companies
are currently doing business as Priority Pharmacy Services.

National Infusion Services, Inc.

     On February 7, 1996, the Company through its Priority Healthcare
Corporation subsidiary, acquired all of the assets of the infusion services
division of Infectious Disease of Indiana, P.S.C.  Through February 7, 1997,
this business was operated as National Infusion Services, Inc. (NIS), a
physician managed provider of infusion services programs to patients in a
variety of settings, including the home, extended care facilities and its
outpatient center in Indianapolis, IN. On that date, the corporate name was
changed to Priority Healthcare Services Corporation.  The acquisition was not a
significant acquisition in relation to the Company  and was accounted for as a
purchase and, accordingly, the 1996 financial statements will include the
results of operations of NIS from the date of acquisition. The Company expended
approximately $9.0 million and incurred a long-term obligation of approximately
$1.5 million, resulting in approximately $9.8 million in intangible assets.
Although the acquisition was not significant to the Company as a whole, it
provides further opportunities for the Company's growth in the alternate
care/alternate site market.

Employees

     As of February 28, 1997, the Company employed 909 persons, of which
approximately 4% are covered by a single collective bargaining agreement.  The
Company believes that  its  relationship  with  its employees is good.

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Competition

     The markets in which the Company competes are highly competitive.  Not
only does the Company compete with national and regional full-line,
full-service wholesale drug distributors, some of which are larger and have
substantially greater financial resources, but additional competition is
provided by direct selling manufacturers and specialty distributors. While
competition is primarily price oriented, it can also be affected by delivery
requirements, credit terms, depth of product line and other customer service
requirements.    There can be no assurance that the Company will not encounter
increased competition in the future that could adversely affect the Company's
business.  In recent years there has been a trend toward consolidation in the
wholesale drug industry, as evidenced by the purchase of a number of
distributors by national wholesalers.  The Company estimates that there are
currently 50 wholesale drug distributors in the United States.

     The alternate care/alternate site markets in which Priority Healthcare
operates are also highly competitive.  Principal competitors include:  regional
or national multi-market specialty distributors; national full-line,
full-service wholesale drug distributors which operate their own specialty
distribution businesses; mail order distributors which distribute medical
supplies on a regional or national basis; certain manufacturers which sell
their products both to distributors and directly to users, including clinics
and physician's offices; and local, regional or national home health care
businesses.  While competition is primarily price and service oriented, it can
also be affected by depth of product line, technical support, specific patient
requirements and reputation.  There can be no assurance that Priority
Healthcare will not encounter increased competition in the future that could
adversely affect its business.

Regulation

     The Company, including Priority Healthcare Corporation, is subject to
regulation by federal, state  and  local  government agencies. As a result,
the Company is required to register for permits and/or licenses with, and
comply with certain operating and security standards, of the United States Drug
Enforcement Administration, the Food and Drug Administration, and appropriate
state agencies.  Each of the Company's existing distribution centers is
licensed to distribute ethical pharmaceutical products and  certain controlled
substances in accordance with the requirements of the Controlled Substances Act
of 1970 and the Prescription Drug Marketing Act of 1987.   Similarly, the
health care provider businesses of Priority Healthcare Corporation are licensed
by the appropriate state board of pharmacy, department of health, home health
agency or related governmental agency.  In addition, certain of Priority
Healthcare Corporation's customers are subject to significant federal and state
regulations, including the so called fraud and abuse laws.  The fraud and abuse
laws impose criminal and civil sanctions on (a) persons who solicit, offer,
receive or pay any remuneration in return for inducing the referral of a
patient for treatment or the ordering or purchasing of items or services that
are in any way paid for by Medicare, Medicaid or similar state programs and (b)
physicians who make referrals for clinical laboratory or certain designated
health services to entities with which the physician has a financial
relationship.  The fraud and abuse laws and regulations are broad in scope, are
subject to frequent modification and varied interpretation and have recently
been expanded by the Health Insurance Portability and Accountability Act of
1996.


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     Failure to comply with these laws and regulations could subject the
Company to significant civil sanctions, especially under the strict liability
standards imposed by the Controlled Substances Act and the broad scope of
coverage imposed by the fraud and abuse laws.  During the past year, the
Company has hired a full-time Regulatory Compliance Manager, conducted
compliance reviews at all of its locations by outside advisors and implemented
a company wide ethics and corporate compliance program.  As a result, the
Company believes it complies in all material respects with applicable laws and
regulations.  Because the health care industry will continue to be subject to
substantial regulations, however, the Company can give no assurance that its
activities will not be reviewed or challenged by regulatory agencies in the
future.

Industry Overview

     The wholesale drug industry in the United States continues to experience
significant growth.  As reported by the National Wholesale Druggists'
Association, industry sales have grown from $25 billion in 1989 to
approximately  $58 billion in 1995, a compound annual growth rate of 15%.
Today, industry analysts estimate approximately 80% of pharmaceutical
manufacturers distribute through wholesalers compared to less than 47% in 1970.
Order processing, inventory management and product delivery by wholesale
distributors allow manufacturers to better allocate their resources to research
and development, manufacturing and marketing their products.  Customers benefit
from wholesale distribution by having access to a single supply source for a
full line of pharmaceutical and health care products from hundreds of
individual manufacturers.  Further, inventory costs are lower, delivery is more
timely and efficient, and purchasing and inventory information improved.
Customers additionally benefit from the range of value added programs developed
by wholesale drug distributors that are targeted to their specific needs which,
in turn, reduce their costs and increase their operating efficiencies.

     The alternate care/alternate site industry is comprised of health care
distributors and providers serving health care facilities outside the hospital
environment, including physicians' offices, clinics and patients' homes.  The
shift from the hospital has occurred primarily as a result of cost containment
pressures exerted by payers and the improvement in the treatment of various
types of diseases in alternate care/alternate site facilities. These facilities
administer pharmaceutical drugs and related medical supplies to patients who
generally require dialysis therapy for treatment of kidney failure,
chemotherapy for treatment of cancer or infusion therapy for treatment of a
number of conditions, including infectious diseases such as HIV and hepatitis.
The combined market for alternate care/alternate site distributors and
providers serving dialysis, cancer and infusion therapy facilities is much
smaller than the market being served by the wholesale drug industry.  These
three markets are expected to continue to grow, however, as more health care
services are shifted from the hospital to the alternate care/alternate site
facility.  At the same time, the consolidation exhibited within each market the
past few years is also expected to continue.  See, also, Competition in Part I,
Item 1, which is incorporated herein by reference.

     The Company believes the pharmaceutical industry, including drug
wholesalers and related health care distributors and providers, will continue
to grow as a result of the following trends:

<PAGE>   10



Aging Population.

     The number of individuals over 65 in the United States has grown 23% from
approximately 26 million in 1980 to approximately 32 million in 1990 and is
projected to increase an additional 9% to more than 35 million by the year
2000.  This age group suffers from a greater incidence of chronic illnesses and
disabilities than the rest of the population and is estimated to account for
approximately two-thirds of total health care expenditures by the end of the
decade.

Introduction of New Pharmaceuticals.

     Traditional research and development as well as the advent of new research
and production methods, such as biotechnology, continue to generate new
compounds that are more effective in treating diseases.  These compounds have
been responsible for significant increases in pharmaceutical sales.  The
Company believes that ongoing research and development expenditures by the
leading pharmaceutical manufacturers will contribute to the continued growth of
the industry.  While national attention has recently been focused on the
overall increase in aggregate health care costs, drug therapy has had a
beneficial impact on such costs by reducing expensive surgeries and prolonged
hospital stays.  Pharmaceuticals currently account for less than 9% of overall
health care costs, and manufacturers' emphasis on research and development is
expected to continue the introduction of cost effective drug therapies.
Industry observers expect the overall sales of pharmaceuticals to continue
double-digit increases through the year 2000, as was the case from 1989 to
1995.

Managed Care.

     To remain competitive, pharmaceutical manufacturers are required to sell
their products to the managed care market, wherein employers negotiate
discounts from health care providers by committing to long-term contracts
involving thousands of patients.  Health care costs are linked more tightly to
the provision of managed health care services, especially with hospitals and
doctors, than under traditional medical insurance plans.  Managed care
organizations generally provide full coverage for prescription drugs to lower
health care costs by improving access to medical treatment rather than delaying
treatment until more expensive services are required.  The costs associated
with the prescription drug benefit are monitored by the managed care
organization primarily through the establishment of tightly controlled
formularies of approved prescription drugs, including generic substitutes, and
by drug utilization review procedures wherein physicians' prescribing practices
and patients' usage are closely scrutinized.

Increased Use of Generic Drugs.

     The growth of managed care's influence on pharmacy along with the
introduction of generic equivalent products for many top selling brand name
drugs has caused the generic market to grow substantially.  In the next five
years, the size of the market is expected to nearly double from $3.8 billion to
$6.5 billion.

<PAGE>   11



Pharmaceutical Price Increases.

     As a result of competitive market-driven cost containment measures
implemented by both the private and public sectors during the past four years,
pharmaceutical price increases are significantly less than in prior years.
Nevertheless, the Company believes that price increases by pharmaceutical
manufacturers will continue to equal or exceed the overall Consumer Price Index
which is due in large part to relatively inelastic demand in the face of higher
prices charged for patented drugs as manufacturers have attempted to recoup
costs associated with the research and development, clinical testing and FDA
approval of new products.

Continued Industry Consolidation.

     In response to cost containment pressure from private and governmental
payers and the recent focus on health care reform in the United States, there
has been significant consolidation within the industry during the past two
years at the manufacturer, wholesaler and customer levels.  Pharmaceutical
manufacturers have consolidated to reduce operating expenses, gain access to
new drugs in the pipeline and enhance marketing efforts in a managed care
environment.  Likewise, chain drug stores are continuing to purchase
independent drug stores and, in some cases, other drug chains as demonstrated
by consolidations during the past year involving Revco, Eckerd, Thrifty
Payless, Thrift, Medicine Shoppe, and Big B.  Independent drug stores are also
consolidating into regional and national affiliations.  At the same time that
sales through the wholesale drug industry have increased, the number of
pharmaceutical wholesalers in the United States has decreased from 139 in 1980
to approximately 50 at the end of 1996.  During 1996, it is estimated that the
five national wholesalers distributed approximately 80% of the prescription
drugs in the United States.

Manufacturers' Pricing and Distribution Policies.

     Some manufacturers distribute their products solely through franchised
wholesalers, while others also sell directly to retailers.  Functional price
discounts to wholesalers are offered by many manufacturers.  A limited number
of manufacturers have a one-price system of distribution and sell directly to
wholesalers and retailers at the same price.  The Company does not transact as
much business with direct selling manufacturers that have adopted a one-price
system.  In recent years, certain manufacturers have adopted wholesaler only
policies, while certain other manufacturers have adopted one-price systems for
wholesalers and retailers.  Although pharmaceutical manufacturers may adopt
one-price systems in the future, or may be required to pursuant to federal or
state legislation, such developments have not had a material adverse effect on
the Company's business in the past.  See, also,  Note 13 - Legal Proceedings in
the Company's financial statements, which is incorporated herein by reference.

     In response to the above trends, the Company has focused its efforts on
higher margin direct store delivery sales, alternate care/alternate site sales,
managed care sales, better asset and cash flow management, and containment of
selling, general and administrative expenses through improved technology,
consolidation of distribution centers and increased sales through market
expansion and acquisitions.

<PAGE>   12


Item 2. PROPERTIES.

     The Company currently has 10 operating divisions, nine wholly-owned
subsidiaries,  and 12 distribution centers that have  warehouse and delivery
facilities.  Each center has been constructed or adapted to the Company's
specifications for climate control, alarm systems and segregated security areas
for controlled substances.  The Company utilizes modern warehousing techniques
and equipment designed to accommodate both the wholesale drug and alternate
care/alternate site customers.  At each location, a manager supervises
warehouse, delivery and local sales functions.  The Company utilizes owned vans
and trucks, contract carriers, common carriers and couriers to deliver its
products.  The Company believes that its properties are adequate to serve the
Company's current and anticipated needs without making capital expenditures
materially higher than historical levels.  See, also, Note 9 - Commitments in
the Company's financial statements, which is incorporated herein by reference.

     These distribution centers are listed below:


<TABLE>
<CAPTION>

                                    SQUARE              OWNED OR
      LOCATION                     FOOTAGE               LEASED
---------------------              -------              --------
<S>                                <C>                   <C>
Altamonte Springs, FL               33,000                Leased
Austell, GA                         56,160                Leased
Dallas, TX                          44,000                 Owned
Houston, TX                         15,000                Leased
Indianapolis, IN                    57,200                 Owned
Middletown, PA                      40,650                Leased
Orange, CT                         185,000                 Owned
Orlando, FL                         94,600                 Owned
Portland, ME                        60,000                 Owned
San Dimas, CA                       65,400                Leased
Santa Ana, CA                       11,941                Leased
Shelby, NC                         103,500                 Owned
</TABLE>

     The Company  closed the Brockton, MA distribution center in the third
quarter of 1996. The customers of this distribution center are serviced from
other existing facilities.  The owned 60,000 square foot facility in Brockton,
MA  is currently listed to be sold or leased.  Based on a review of the
anticipated cash flows,  the carrying value of the building is considered
recoverable in all material respects.  The Company has purchased a distribution
center in Houston, TX, started construction on a new facility in Middletown, PA
and leased a distribution center in Portland, OR.  The new facilities in
Houston, TX and Middletown, PA will replace the existing leased facilities and
should be occupied in late 1997.  The Portland, OR facility should be occupied
during the second quarter of 1997.

<PAGE>   13



     In addition, in 1995 the Company purchased its corporate offices in
Indianapolis, IN from a partnership controlled by the Company's principal
shareholder at its fair market value.  Prior to the purchase, the Company
leased the building under a capital lease.  This building provides 32,000
square feet of office space for the  accounting, contracts, credit, human
resources, information systems and purchasing departments.  The Company also
leases 8,000 square feet of office space located in Indianapolis, IN.  This
office currently houses certain of the Company's executive officers and related
staff.    The Priority Healthcare Services Corporation subsidiary leases 4,810
square feet of office and medical building space in Indianapolis, IN.

Item 3. LEGAL PROCEEDINGS.

     The Company is subject to ordinary and routine litigation incidental to
its business, none of which is material to the Company's results of operations
or financial condition. See, also, Note 13 - Legal Proceedings in the Company's
financial statements, which is incorporated herein by reference.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     No matters were submitted during the fourth quarter of 1996 to a vote of
security holders of the registrant, through the solicitation of proxies or
otherwise.

Executive Officers of the Company.

     The following is a list  of the Company's executive officers, their ages
and their positions held by the named individuals.  These positions may exclude
other positions held with subsidiaries of the Company.  These executive
officers serve at the discretion of the Board.  There is no family relationship
between any of the executive officers of the Company.


<TABLE>
<CAPTION>

   NAME               AGE          POSITION
--------------------  ---  ---------------------------------
<S>                   <C>  <C>
William E. Bindley    56   Chairman of the Board, Chief
                           Executive Officer, and President
Keith W. Burks        39   Executive Vice President
Michael D. McCormick  49   Executive Vice President, General
                           Counsel, and Secretary
Thomas J. Salentine   57   Executive Vice President, Chief
                           Financial Officer
Gregory S. Beyerl     39   Vice President and Controller
Michael L. Shinn      42   Treasurer
</TABLE>


     Gregory S. Beyerl, who is a certified public accountant, joined the
Company's Bindley Western Drug Company Division in 1986 as Assistant Controller
and was promoted to division Controller in 1987, division Vice President in
1990, and corporate Vice President and Controller in 1992.  He was previously
with the accounting firm of Price Waterhouse.  Mr. Beyerl also holds an MBA
degree.


<PAGE>   14


     Michael L. Shinn joined the Company as Treasurer in May 1992.  Mr. Shinn
is a certified public accountant and was previously the Director of Corporate
Taxation for the Indianapolis office of the accounting firm of Price
Waterhouse.  His duties include responsibility for the Company's entire tax
function, including those of its subsidiaries and divisions.


     (Pursuant to General Instruction (G)(3) of Form 10-K, the foregoing
information pertaining to executive officers who are not standing for election
as members of the Board of Directors is included as an un-numbered Item in Part
I of this Annual Report in lieu of being included in the Company's Proxy
Statement for its 1997 Annual Meeting of Shareholders.)


<PAGE>   15









  

                                    PART II

Item 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS.

     The Company's common stock, $.01 par value, is traded on the New York
Stock Exchange under the symbol "BDY".   Prior to listing on the New York Stock
Exchange, the common stock was quoted on the NASDAQ National Market System
under the symbol "BIND". The following table reflects the range of the reported
high and low prices for the Company's common stock as reported on the New York
Stock Exchange from August 2, 1995 through December 31, 1996 and on the NASDAQ
National Market prior thereto.



<TABLE>
<CAPTION>
                             1996             HIGH     LOW
                    <S>                      <C>     <C>         
                    January 1 - March 31     $21.00  $15.63
                    April 1 - June 30        $17.63  $15.00
                    July 1 - September 30    $18.25  $15.38
                    October 1 - December 31  $19.75  $16.50
         
                             1995             HIGH     LOW
                    January 1 - March 31     $16.13  $13.75
                    April 1 - June 30        $16.13  $14.50
                    July 1 - September 30    $19.00  $15.25
                    October 1 - December 31  $18.38  $14.75
</TABLE>



     At March 14, 1997 there were outstanding 11,628,557 shares of the
Company's common stock, which were held by approximately 1,000 holders of
record.

     The Company has paid cash dividends on its common stock of 1-1/2 cents per
share on twelve different quarterly dates for the period beginning September 5,
1990 and ending June 30, 1993. This dividend was increased to 2 cents per share
for cash dividends paid on 15 different quarterly dates for the period
beginning September 7, 1993 and ending March 25, 1997.  Prior to September 5,
1990, the Company had not declared a cash dividend on its common stock.  Future
dividends will be paid in accordance with declarations by the Board of
Directors in its sole discretion.  The Company's primary bank line of credit
agreement requires the Company to maintain specified levels of working capital
and net worth, which may limit the Company's ability to pay dividends in the
future.

     During the third quarter of 1994, the Company established an Automatic
Dividend Reinvestment Plan for its shareholders.  This voluntary plan provides
for periodic investment of shareholder dividends in shares of the Company's
common stock plus the opportunity to make voluntary cash payments up to $5,000
per quarter to purchase additional shares without incurring any service charges
or brokerage fees.

     No unregistered equity securities were sold by the Company during 1996.


<PAGE>   16
Item 6.                    Selected Financial Data

   The selected financial data set forth below should be read in conjunction 
with the Company's financial and related notes included elsewhere in this 
report.

            FIVE YEAR FINANCIAL REVIEW AND SELECTED FINANCIAL DATA
                       BINDLEY WESTERN INDUSTRIES, INC.

<TABLE>
<CAPTION>
(in thousands, except share data)
--------------------------------------------------------------------------------------------------------
                                                    1996        1995        1994        1993        1992
--------------------------------------------------------------------------------------------------------
<S>                                           <C>         <C>         <C>         <C>         <C>
Net sales                                     $5,317,526  $4,670,153  $4,034,107  $3,426,097  $2,911,741
Other income                                       1,407       2,322       3,317       4,363       3,578
Cost of products sold                          5,197,008   4,565,750   3,945,172   3,350,119   2,844,880
Selling, general and administrative               70,531      62,555      50,279      43,322      36,707
Other expenses                                    20,523      16,406      16,998      20,601      17,761

Earnings before income taxes
 and cumulative effect of 
 change in accounting principle                   30,871      27,764      24,975      16,418      15,971
Provision for income taxes                        12,865      11,383      10,240       6,854       5,590
Net earnings before
 cumulative effect of change
 in accounting principle                          18,006      16,381      14,735       9,564      10,381
Cumulative effect of change
 in accounting principle                                                                           2,510
Net Earnings                                      18,006      16,381      14,735       9,564      12,891

Earnings per share:
 Before cumulative effect of change
 in accounting principle
  Primary                                     $     1.52  $     1.42  $     1.34  $     0.88  $     1.02
  Fully diluted                                     1.35        1.27        1.20        0.86        1.00
Net earnings
  Primary                                           1.52        1.42        1.34        0.88        1.27
  Fully diluted                                     1.35        1.27        1.20        0.86        1.21

Cash dividends declared per Common Share      $     0.08  $     0.08  $     0.08  $     0.07  $     0.06

Other financial data:
Current assets                                $  850,965  $  777,366  $  736,687  $  665,412  $  555,429
Total assets                                     941,206     848,708     803,447     732,204     629,759
Current liabilities                              616,322     573,369     547,131     489,904     395,353
Long-term debt                                    99,766      69,473      69,461      69,733      69,246
Total liabilities                                719,119     647,948     623,196     566,486     473,072
Shareholders equity                              222,087     200,760     180,251     165,718     156,687
Book value per share                               19.27       17.90       16.64       15.38       14.59

</TABLE>
<PAGE>   17




      
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS.


     The discussion and analysis that follows should be read in conjunction
with the Consolidated Financial Statements and related notes included elsewhere
in this report.

RESULTS OF OPERATIONS.

     The Company has made several acquisitions which affect the comparison of
the results of operations on a year to year basis.  All acquisitions have been
accounted for under the purchase method and, accordingly, the results of
operations of the acquired entities are included in the Company's financial
statements from the respective dates of acquisition.

     On June 23, 1994 the Company formed a new wholly owned subsidiary,
Priority Healthcare Corporation (PHC), to provide a greater management focus
and an enhanced ability to meet the needs of the higher margin alternate
care/alternate site business.  The new company, based in Altamonte Springs, FL,
was  initially comprised of the Charise Charles and PRN divisions of the
Company.

     PHC continued to expand through the acquisitions of 3C Medical, the IV One
Companies (IV One) and the infusion services division of Infectious  Disease of
Indiana, P.S.C. The acquisition of 3C Medical, a distributor of hemodialysis
products, was effective October 31, 1994.  IV One is comprised of IV-1, Inc.,
IV-One Services, Inc. and National Pharmacy Providers, Inc.  These companies
focus on high acuity specialty pharmacy services for patients requiring home
and ambulatory infusion therapy.  PHC acquired all of the outstanding stock of
IV One in a cash transaction effective January 1, 1995.  In January 1996, PHC
formed a new subsidiary, National Infusion Services, Inc.(NIS).  Effective
February 8, 1996, PHC through its NIS subsidiary purchased the assets of the
infusion services division of Infectious  Disease of Indiana P.S.C.  NIS is a
provider of quality care to patients in a variety of settings.  In February of
1997, the corporate name was changed from NIS to Priority Healthcare Services
Corporation (PHS).

     The Company also acquired Kendall Drug Company (Kendall), a wholesale
pharmaceutical distributor, effective July 1, 1994.

     Net sales of $5,318 million for 1996 represented a 14% increase over 1995.
Net sales of $4,670 million for 1995 were an increase of 16% over 1994.
Substantially all of the 1996 increase was generated from internal growth.  In
1995, the sales increases resulted from internal growth of 12%, with the
remaining 4% attributable to the aforementioned acquisitions of Kendall, 3C and
IV One.  This  internal growth in both periods reflected increased sales to
existing customers, the addition of new customers and price increases. The
commitment to the direct store delivery portion of the business continued
through 1996 and accounted for 35% and 32% of total sales in 1996 and 1995,
respectively.  This represented a 25% increase of 1996 direct store sales over
1995 and also for 1995 over 1994.

     Gross margin of $121 million in 1996 represented an increase of 15% over
1995 while  the increase  for 1995 over 1994 was 17%. The primary reason for
these increases was the increase in net sales.  Gross margin as a percent of
net sales had a slight increase in 1996 to 2.27% from 2.24% in 1995,  which had
increased slightly from 2.20% in 1994. In both 1996

<PAGE>   18

and 1995 the margins were enhanced by the infusion of higher margins from the
alternate care/alternate site businesses of PHC and the commitment to growth of
the direct store delivery portion of the business.  This growth included a
greater emphasis on providing new value added information systems programs, new
marketing programs with manufacturers and increased sales of higher margin
products such as generics, home health care and private label.  In all years,
the pressure on sell side margins continued while the purchasing gains remained
relatively constant.

     Other income decreased in 1996 and 1995 as a result of reduced gains on
the sale of marketable securities and a decrease in service fee income on
certain customer receivable balances.

     Selling, general and administrative (SGA) expenses increased from $50.3
million in 1994 to $62.6 million in 1995 and to $70.5 million in 1996.  For
1996, the increase associated with acquisitions was immaterial, whereas, in
1995, the increase attributable to acquired companies was $6 million.  The
remainder of the increases for both periods resulted from normal inflationary
increases and costs to support the growing direct store delivery business of
Bindley Western Drug Company and the alternate care/alternate site business of
PHC.  The cost increases related to the direct store delivery and alternate
care/alternate site business include, among others, delivery expense, warehouse
expense, and labor costs, which are variable with the level of sales volume.
In 1996 and  1995, SGA expense also included sales and development costs
associated with the new information systems and marketing programs and
incremental costs associated with the consolidation of  divisions. SGA expenses
will continue to increase as direct store delivery and alternate care/alternate
site sales increase.  However, management remains focused on controlling this
increase through improved technology, better asset management and opportunities
to consolidate distribution centers.

     Depreciation and amortization increased from $5.8 million in 1994 to $6.3
million in 1995 and to $6.7 million in 1996.  These increases were the result
of the inclusion of acquired entities and the depreciation and amortization on
new facilities and equipment, particularly in management information systems
and systems to support customer needs.

     Interest expense for 1994, 1995 and 1996 was $11.2 million, $10.1 million
and $13.0 million, respectively. The average short-term borrowings outstanding
were $142 million, $104 million and $119 million at an average short-term
interest rate of 5.9%, 7.1% and 6.4% for 1994, 1995 and 1996, respectively.  In
1994 and 1995, the Company  provided extended  receivable terms on identifiable
receivables of certain chain warehouse customers and charged interest on these
balances.  To the extent this interest offset borrowing costs incurred to
support these receivables, it was  treated  as a reduction of interest expense.
The interest received from chain warehouse customers as a result of extended
receivable terms was immaterial in relation to total interest expense, and
therefore, presented on a net basis. On December 27, 1996, the Company
completed a private placement of $30 million Senior Notes due December 27, 1999
at an interest rate of 7.25%.

     The provision for income taxes represented 41.7%,  41.0% and 41.0% of
earnings before taxes in 1996, 1995 and 1994, respectively.

<PAGE>   19



     On January 11, 1996, the Company was informed by the U.S. Attorney's
office in Indianapolis that the Drug Enforcement Administration ("DEA") was
alleging multiple violations of the recordkeeping and reporting regulations of
the Controlled Substances Act ("Act") resulting from a routine inspection of
the Company's Indianapolis Distribution Center during January and February
1994.  On November 7, 1996, the Company entered into a Civil Consent Decree
with the United States and the DEA resolving all issues relating to its
Indianapolis Distribution Center's alleged failure to comply with the Act. In
exchange for the settlement of all civil and administrative issues, the Company
paid $700,000, and agreed to pay an additional $300,000 if the Company does not
substantially comply with the terms of the Civil Consent Decree over the next
two years.  The Company does not believe the amount of the settlement will
exceed the charge recognized by the Company in 1996, which included estimated
related professional fees of $112,000.

     On October 7, 1996, the Company and its indirect subsidiary, National
Infusion Services, ("NIS"), were named as defendants in an action filed by
Thomas G. Slama, M.D. in the Superior Court of Hamilton County, Indiana which
is now pending in that Court as Cause No. 29D03-9702-CP-81.  Dr. Slama is a
director of the Company and formerly was Chief Executive Officer and President
of NIS.  The complaint alleges breach of contract and defamation arising  from
the termination of Dr. Slama's employment with NIS in October 1996, and  seeks
damages in excess of $3.4 million, punitive damages, attorneys fees and costs.
The Company and NIS believe Dr. Slama terminated his employment without "cause"
(as defined in his employment agreement), and alternatively, that NIS had
grounds to terminate Dr. Slama for "cause" under his employment agreement.  The
Company and NIS have answered the complaint, denying the merits of Dr. Slama's
claims, and have also filed a counterclaim against Dr. Slama seeking, among
other things, declaratory relief, compensatory and (in some instances) treble
damages, punitive damages, attorneys' fees, interest and costs.  The Company
and NIS are contesting Dr. Slama's complaint and pursuing their counterclaim
vigorously.  Although the outcome of any litigation is uncertain, the Company
believes after consultation with  its counsel that the attendant liability of
the Company, if any, should not have a material adverse effect on the Company's
financial condition or liquidity.  An adverse decision, although not
anticipated, could have a material effect on the Company's results of
operations.

     The Company is still considering a pro rata distribution to its
shareholders of the stock of PHC.  The possible  spin-off would separate the
Company's wholesale drug business from the wholesale drug and alternate
care/alternate site business of PHC.  The contemplated spin-off would be
subject to compliance with applicable securities and governmental regulations
and other business considerations.

LIQUIDITY-CAPITAL RESOURCES.

     The Company's operations provided $44 million in cash for the year ended
December 31, 1996.  The source of funds was primarily a result of a reduction
in accounts receivable and  an increase in accounts payable. These sources were
partially offset by an increase in merchandise inventory. The reduction of
accounts receivable resulted from the Company not providing extended receivable
terms to certain chain warehouse customers at the end of 1996 as it had at the
end of 1995. The increase in accounts payable was attributed to the timing of
payment terms and the build up of inventories at the end of the year. The
increase in merchandise inventory is due to the procurement of inventory for
the increased

<PAGE>   20

customer base and the Company's decision to build inventories  to reduce the
possibility of shortages due to potential reduction in shipments by certain
vendors during the fourth quarter.  Management continues to control inventory
levels to minimize carrying costs and maximize purchasing opportunities.


     Capital expenditures, predominantly for the purchase of transportation
equipment, the  expansion and automation of existing warehouses, the investment
in additional management information systems and systems to support customer
needs were $15.6 million during 1996.

     On December 27, 1996, the Company completed a private placement of $30
million Senior Notes due December 27, 1999 at an interest rate of 7.25 %.  In
addition,  the Company acquired the assets of NIS for approximately $9 million
in cash.  The Company also incurred a long-term obligation of approximately
$1.5 million related to the purchase of NIS.


     Net decrease in borrowings under the bank credit agreement was $22.5
million during 1996.  At December 31, 1996, the Company had borrowed $52
million under the bank credit agreement and had a remaining availability of
$218 million.

     The Company believes that its cash on hand, cash equivalents, bank line of
credit and working capital management efforts are sufficient to meet future
working capital requirements.  As of December 31, 1996, the Company's
short-term bank line of credit was $270,000,000.


     The Company's principal working capital needs are for inventory and
accounts receivable.  The Company sells inventory to its chain drug warehouse
and other customers on various payment terms.  This requires significant
working capital to finance inventory purchases and entails accounts receivable
exposure in the event any of its chain warehouse or other major customers
encounter financial difficulties.  Although the Company monitors closely the
creditworthiness of its major customers and, when feasible, obtains security
interests in the inventory sold, there can be no assurance that the Company
will not incur some collection loss on chain drug or other major customer
accounts receivable in the future.

INFLATION.

     The Company's financial statements are prepared on the basis of historical
costs and are not intended to reflect changes in the relative purchasing power
of the dollar.  Because of its ability to take advantage of forward purchasing
opportunities, the Company believes that its gross profits generally increase
as a result of manufacturers price increases in the products it distributes.
Gross profits may decline if the rate of price increases by manufacturers
declines.

     Generally, price increases are passed through to customers as they are
received by the Company and therefore reduce the negative effect of inflation.
Other non-inventory cost increases, such as payroll, supplies and services,
have been partially offset during the past three years by increased volume and
productivity.

<PAGE>   21



FORWARD LOOKING STATEMENTS.

     Certain statements included in this annual report which are not historical
facts are forward looking statements.  Such forward looking statements are made
pursuant to the safe harbor provisions of the Private/Securities Litigation
Reform act of 1995.  These forward looking statements involve certain risks and
uncertainties including, but not limited to, changes in interest rates,
competitive pressures, changes in customer mix, financial stability of major
customers, investment procurement opportunities and changes in government
regulations or the interpretation thereof, which could cause actual results to
differ from those in the forward looking statements.

Item 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     The financial data required to be included under this item is submitted in
a separate section of this report and incorporated herein by reference.



<PAGE>   22


Item 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE.

            Not applicable.


<PAGE>   23


                                    PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     The information required by this Item concerning the Directors and
nominees for Directors of the Company and concerning disclosure of delinquent
filers is incorporated herein by reference to the Company's definitive Proxy
Statement for its 1997 annual meeting of common shareholders, to be filed with
the Commission pursuant to Regulation 14A within 120 days after the end of the
Company's last fiscal year.  Information concerning the executive officers of
the Company is also included under "Executive Officers of the Company" at the
end of Part I of this Annual Report.  Such information is incorporated herein
by reference, in accordance with General Instruction G(3) to Form 10-K and
Instruction 3 to Item 401(b) of Regulation S-K.

Item 11. EXECUTIVE COMPENSATION.

     The information required by this Item concerning remuneration of the
Company's officers and Directors and information concerning material
transactions involving such officers and Directors is incorporated herein by
reference to the Company's definitive Proxy Statement for its annual meeting of
common shareholders to be filed with the Commission pursuant to Regulation 14A
within 120 days after the end of the Company's last fiscal year.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The information required by this Item concerning the stock ownership of
management and five percent beneficial owners is incorporated herein by
reference to the Company's definitive Proxy Statement for its annual meeting of
common shareholders to be filed with the Commission pursuant to Regulation 14A
within 120 days after the end of the Company's last fiscal year.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The information required by this Item concerning certain relationships and
related transactions is incorporated herein by reference to the Company's
definitive Proxy Statement for its annual meeting of common shareholders to be
filed with the Commission pursuant to Regulation 14A within 120 days after the
end of the Company's last fiscal year.

<PAGE>   24


                                    PART IV

Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

          The documents listed below are filed as a part of this report except 
          as otherwise indicated:


          (a)  1.  FINANCIAL STATEMENTS.  The following described financial
statements, required to be filed by Item 8 and incorporated therein by
reference are set forth on pages F-1 through F-16.



          Report of Independent Accountants                     25
          Statements of Earnings for each of the three years
           in the period ended December 31, 1996                26
          Balance Sheets as of December 31, 1996 and 1995       27
          Statements of Cash Flows for each of the three years
           in the period ended December 31, 1996                28
          Statements of Shareholders' Equity for each of the
           three years in the period ended December 31, 1996    29
          Notes to Consolidated Financial Statements            30 to 43


          (a)  2.  FINANCIAL STATEMENT SCHEDULES. No financial statement 
schedules are included as the information required by Rule 5-04 is not 
applicable, or is not material.

          (a)  3.  EXHIBITS.  The list of exhibits filed as part of this report
is incorporated herein by reference to the Index to Exhibits at Page 45.

          (b)  4.  No reports on Form 8-K were filed by the Registrant during 
the last quarter covered by this report.

<PAGE>   25


                       REPORT OF INDEPENDENT ACCOUNTANTS



To the Board of Directors and Shareholders of
     Bindley Western Industries, Inc.



In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a) 1 on page 24  present fairly, in all material
respects, the financial position of Bindley Western Industries, Inc. and its
subsidiaries at December 31, 1996 and 1995, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1996, in conformity with generally accepted accounting principles.  These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits.  We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis for the
opinion expressed above.






Price Waterhouse LLP
Indianapolis, Indiana
February 28, 1997


<PAGE>   26

                     CONSOLIDATED STATEMENTS OF EARNINGS
              BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>                                      
FOR THE YEARS ENDED DECEMBER 31,                             1996              1995               1994
(In thousands, except share data)
<S>                                                 <C>              <C>                <C>
Revenues:
  Net sales                                            $5,317,526        $4,670,153         $4,034,107
  Other income                                              1,407             2,322              3,317
                                                       ----------        ----------         ----------
                                                        5,318,933         4,672,475          4,037,424

Cost and expenses:
  Cost of products sold                                 5,197,008         4,565,750          3,945,172
  Selling, general and administrative                      70,531            62,555             50,279
  Depreciation and amortization                             6,719             6,279              5,813
  Interest                                                 12,992            10,127             11,185
  Settlement of 1994 DEA inspection matter                    812
                                                       ----------        ----------         ---------- 
                                                        5,288,062         4,644,711          4,012,449

Earnings before income taxes                               30,871            27,764             24,975
                                                       ----------        ----------         ----------
Provision for income taxes:
  Current                                                  14,896            13,944             11,800
  Deferred                                                 (2,031)           (2,561)            (1,560)
                                                       ----------        ----------         ----------
                                                           12,865            11,383             10,240

                                                       ----------        ----------         ----------
Net earnings                                           $   18,006        $   16,381         $   14,735
                                                       ==========        ==========         ==========
Earnings per share:
  Primary                                              $     1.52        $     1.42         $     1.34
  Fully diluted                                              1.35              1.27               1.20

Average shares outstanding:
   Primary                                             11,872,926        11,529,092         11,035,912
   Fully diluted                                       15,372,519        15,042,597         14,539,770

</TABLE>

         (See accompanying notes to consolidated financial statements)

<PAGE>   27
                         CONSOLIDATED BALANCE SHEETS
              BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES
                                      
<TABLE>
<CAPTION>

DECEMBER 31,                                                     1996           1995
(In thousands, except share data)
<S>                                                          <C>            <C>
ASSETS
Current assets:
  Cash                                                       $ 63,658       $ 34,819
  Accounts receivable, less allowance for doubtful
    accounts of $2,664 for 1996 and $3,057 for 1995           346,802        397,924
  Finished goods inventory                                    431,816        332,054
  Deferred income taxes                                         4,560          4,605
  Other current assets                                          4,129          7,964
                                                             --------       --------
                                                              850,965        777,366
                                                             --------       --------
  Other assets                                                  1,160          1,220
                                                             --------       --------
  Fixed assets, at cost                                        71,915         59,468
   Less: accumulated depreciation                             (19,935)       (18,736)
                                                             --------       --------
                                                               51,980         40,732
                                                             --------       --------
  Intangibles                                                  37,101         29,390
                                                             --------       --------

    TOTAL ASSETS                                             $941,206       $848,708
                                                             ========       ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Short-term borrowings                                      $ 52,000       $ 74,500
  Accounts payable                                            555,034        491,844
  Other current liabilities                                     9,288          7,025
                                                             --------       --------
                                                              616,322        573,369
                                                             --------       --------
Long-term debt                                                 99,766         69,473
                                                             --------       --------
Deferred income taxes                                           3,030          5,106
                                                             --------       --------

Shareholders' equity:
  Common stock. $.01 par value-authorized 30,000,000 shares;
    issued 11,871,042 and 11,562,388 shares, respectively       3,316          3,313
  Special shares, $.01 par value-authorized 1,000,000 shares
  Additional paid in capital                                   91,964         87,707
  Retained earnings                                           129,958        112,890
                                                             --------       --------
                                                              225,238        203,910
                                                             --------       --------
  Less: 348,291 shares in treasury-at cost                     (3,150)        (3,150)
                                                             --------       --------
  Total shareholders' equity                                  222,088        200,760
 Commitments and contingencies                               --------       --------
                                                             --------       --------
   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                $941,206       $848,708
                                                             ========       ========

</TABLE>


         (See accompanying notes to consolidated financial statements)

<PAGE>   28

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
               BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>

For years ended December 31,                                 1996           1995           1994
(In thousands)
<S>                                                   <C>           <C>             <C>
Cash flow from operating activities:
   Net income                                         $    18,006   $     16,381    $    14,735

  Adjustments to reconcile net income to
   net cash provided (used) by operating activities:
    Depreciation and amortization                           6,719          6,279          5,813
    Deferred income taxes                                  (2,031)        (2,561)        (1,560)
    Writedown of accounts receivable
    Gain on sale of marketable securities                                    (96)          (183)
    Gain on sale of fixed assets                              (58)           (27)           (57)

 Change in assets and liabilities,
   net of acquisitions:
    Accounts receivable                                    51,826        (78,183)         6,327
    Finished goods inventory                              (99,713)        42,953        (46,987)
    Accounts payable                                       63,106         85,781          6,876
    Other current assets and liabilities                    6,097         (7,537)         2,849
     Net cash provided (used) by operating            -----------    -----------    -----------
       activities                                          43,952         62,990        (12,187)
                                                      -----------    -----------    -----------
Cash flow from investing activities:
     Purchase of fixed assets and other assets            (15,581)        (7,922)        (3,575)
     Proceeds from sale of fixed assets                        59            597            491
     Proceeds from sale of investment securities                           1,299          3,793
     Acquisition of businesses                             (9,064)        (4,125)       (10,361)
                                                      -----------    -----------    -----------
      Net cash used by investing activities               (24,586)       (10,151)        (9,652)
                                                      -----------    -----------    -----------
Cash flow from financing activities:
     Proceeds from sale of stock                            4,260          5,058            717
     Addition (reduction) of long-term debt, net           28,651             12           (272)
     Proceeds under line of credit agreement            1,064,000      1,049,000      1,184,500
     Payments under line of credit agreement           (1,086,500)    (1,111,000)    (1,156,000)
     Dividends                                               (938)          (930)          (919)
      Net cash provided (used) by financing           -----------   ------------    -----------
        activities                                          9,473        (57,860)        28,026
                                                      -----------   ------------    -----------
Net increase (decrease) in cash                            28,839         (5,021)         6,187
Cash at beginning of year                                  34,819         39,840         33,653
                                                      -----------   ------------    -----------
Cash at end of year                                   $    63,658   $     34,819    $    39,840
                                                      ===========   ============    ===========

</TABLE>


         (See accompanying notes to consolidated financial statements)

<PAGE>   29
               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
              BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                   COMMON STOCK          TREASURY STOCK
                                   ----------------------------------------  ADDITIONAL
                                        SHARES              SHARES           PAID IN  RETAINED SHAREHOLDERS'
                                   OUTSTANDING   AMOUNT  OUTSTANDING AMOUNT  CAPITAL  EARNINGS      EQUITY
===========================================================================================================
(In thousands, except share data)
<S>                                 <C>          <C>      <C>       <C>      <C>       <C>        <C>
Balances at December 31, 1993       11,120,934   $3,309    348,291  ($3,150) $81,936   $83,623    $165,718

Net earnings                                                                            14,735      14,735
Dividends                                                                                 (919)       (919)
Shares issued upon exercise of
  stock options                         44,060        1                          521                   522
Shares issued upon acquisition 
  of business                           15,000                                   195                   195
                                    ----------  -------    -------   ------  -------   -------    --------
Balances at December 31, 1994       11,179,994    3,310    348,291   (3,150)  82,652    97,439     180,251

Net earnings                                                                            16,381      16,381
Dividends                                                                                 (930)       (930)
Shares issued upon exercise of     
  stock options                        382,394        3                        5,055                 5,058
                                    ----------  -------    -------   ------  -------   -------     -------
Balances at December 31, 1995       11,562,388    3,313    348,291   (3,150)  87,707   112,890     200,760

Net earnings                                                                            18,006      18,006
Dividends                                                                                 (938)       (938)
Shares issued upon exercise of
  stock options                        308,654        3                        4,257                 4,260
                                    ----------   ------    -------  -------  -------  --------    --------
Balances at December 31, 1996       11,871,042   $3,316    348,291  ($3,150) $91,964  $129,958    $222,088
                                    ==========   ======    =======  =======  =======  ========    ========


</TABLE>



(See accompanying notes to consolidated financial statements)

<PAGE>   30


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

     PRINCIPLES OF CONSOLIDATION.  The consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries.  All
significant intercompany accounts and transactions have been eliminated.

     MARKETABLE SECURITIES. The Company substantially liquidated its
investments in debt and equity securities in 1995.  At December 31, 1994, all
securities owned by the Company were categorized as available for sale.

     INVENTORIES.  Inventories are stated on the basis of lower of cost or
market using the first-in, first-out (FIFO) method.

     FIXED ASSETS.  Depreciation is computed on the straight-line method for
financial reporting purposes.  Accelerated methods are primarily used for
income tax purposes. Assets, valued at cost, are generally being depreciated
over their estimated useful lives as follows:

<TABLE>
<CAPTION>
                                                   Estimated useful life (years)
<S>                                                               <C>
Buildings and furnishings                                         5-35
Leasehold improvements                                            3-20
Transportation and other equipment                                3-20
</TABLE>

     In the event facts and circumstances indicate an asset could be impaired,
an evaluation of the undiscounted estimated future cash flows is compared to
the asset's carrying amount to determine if a write-down is required.

     DEBT ISSUE COSTS.  Debt issue costs are amortized on a straight-line
basis over the life of the Convertible Subordinated Debentures (Debentures) and
the Senior Notes.

     INTANGIBLES. The Company continually monitors its cost in excess of net
assets acquired (goodwill) and its other intangibles (customer lists and
covenants not to compete) to determine whether any impairment of these assets
has occurred.  In making such determination, the Company evaluates the
performance, on an undiscounted basis, of the underlying businesses which gave
rise to such amounts.  Goodwill is being amortized on the straight-line method
over periods not exceeding 40 years.  Other intangibles are being amortized on
the straight-line method over six to 15 years.

     EARNINGS PER SHARE.   Primary earnings per share are computed based on the
average number of shares of common stock and equivalents outstanding during the
year.  Common stock equivalents included in the computation represent shares
issuable upon assumed exercise of stock options which would have a dilutive
effect.  Fully diluted earnings per share are computed based on the average
number of shares of common stock assumed to be outstanding during the year, as
if the Debentures had been converted into common stock and after giving effect
to the elimination of interest expense, net of tax benefit, applicable to the
Debentures.


<PAGE>   31


     INCOME TAXES.  In accordance with the provisions of Statement of
Accounting Standards No. 109 "Accounting for Income Taxes," the Company
accounts for income taxes using the asset and liability method.  The asset and
liability method requires the recognition of deferred tax assets and
liabilities for expected future tax consequences of temporary differences that
currently exist between the tax bases and financial reporting bases of the
Company's assets and liabilities.

     USE OF ESTIMATES.  The preparation of financial statements in accordance
with generally accepted accounting principles requires the use of estimates
made by management.  Actual results could differ from those estimates.

     FAIR VALUE OF FINANCIAL INSTRUMENTS.  The carrying values of cash,
accounts receivable, other current assets, short-term borrowings, accounts
payable and other current liabilities approximate their fair market values due
to the short-term maturity of these instruments.  The fair market value of long
term debt was determined based on market quoted rates or was estimated using
rates currently available to the Company for debt with similar terms and
maturities.

     NEW ACCOUNTING STANDARDS.  In June 1995, the FASB issued Statement of
Financial Accounting Standards No. 121, Accounting for the Impairment of
Long-lived Assets and for Long-lived Assets to Be Disposed of (SFAS 121), which
requires companies to review long-lived assets and certain identifiable 
intangibles to be held, used or disposed of, for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. The Company adopted SFAS 121 in 1996, which did not have a 
significant effect on its financial statements.

     In October 1995, the FASB issued Statement of Financial Accounting
Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123), which
was effective for transactions entered into in fiscal years beginning after
December 15, 1995. The Company adopted SFAS 123 in 1996 and elected to continue
to measure stock based compensation using the intrinsic value based method of
accounting prescribed by APB Opinion 25, Accounting for Stock Issued to
Employees and accordingly, the Company did not recognize compensation cost in
the consolidated financial statements for options granted. The Company has
disclosed pro forma financial information valuing stock-based compensation
granted in 1995 and 1996 using the fair value based method of accounting. See
Note 9 - Capital Stock.

NOTE 2 - SHORT-TERM BORROWINGS

     The Company's short-term bank line of credit was $270,000,000 as of
December 31,1996. The line was available, as necessary, for general corporate
purposes at rates based upon prevailing money market rates.  At December 31,
1996, 1995 and 1994, the Company had borrowed  on its short term line of credit
$52,000,000 at a rate of 6.4%, $74,500,000  at a rate of 6.9%  and
$136,500,000 at a rate of 6.9%, respectively.

<PAGE>   32



     No compensating balance is required on the line. Certain conditions
relating to the maintenance of working capital, net worth and corporate
existence have been imposed by the lenders.

     A summary of 1996, 1995 and 1994 borrowings follows:


<TABLE>
<CAPTION>
                Maximum short-term     Average        Average
Year                    borrowings  borrowings  interest rate
=============================================================
(in thousands)
<S>                       <C>         <C>                <C>
1996                      $192,000    $118,655           6.4%
1995                      $189,500    $104,465           7.1%
1994                      $240,000    $142,275           5.9%
</TABLE>

NOTE 3 - MARKETABLE SECURITIES AND INVESTMENT INCOME

The Company substantially liquidated its investments in debt and equity
securities in 1995.  At December 31, 1994, all securities owned by the Company
were categorized as available for sale and had a maturity of five to ten years.
The proceeds on sales of securities of $1,047,000 in 1995 and $2,524,000 in
1994, approximated their amortized cost.

Other Income for 1996 was substantially all interest income.  For 1995 and
1994, the balance consisted of interest income of $2,194,000 and $3,076,000,
dividends of $32,000 and $1,000 and Realized gains of $96,000 and $240,000,
respectively.

NOTE 4- FIXED ASSETS


<TABLE>
<CAPTION>
DECEMBER 31,                         1996            1995
-----------------------------------------------------------
(in thousands)
<S>                             <C>             <C>
Land                            $   2,919        $  2,919
Buildings and furnishings          24,356          22,864
Leasehold improvements              2,307           2,556
Transportation and
  other equipment                  42,333          31,129
                                   71,915          59,468
                          ---------------------------------
Less: Accumulated
  depreciation                    (19,935)        (18,736)

                                $  51,980        $ 40,732
                          =================================
</TABLE>


<PAGE>   33



NOTE 5- INTANGIBLES


<TABLE>
<CAPTION>
DECEMBER 31,                       1996           1995
------------------------------------------------------
(in thousands)
<S>                           <C>            <C>
Goodwill                       $ 35,009        $28,673
Accumulated amortization         (4,875)        (3,931)
                           ---------------------------
Goodwill, net                    30,134         24,742
                              
Other                            13,664         10,136
Accumulated amortization         (6,697)        (5,488)
                           ---------------------------
Other, net                        6,967          4,648
                           ---------------------------
Intangibles, net               $ 37,101        $29,390
                           ===========================  
</TABLE>

NOTE 6- INCOME TAXES

     The provision for income taxes includes state income taxes of $2,113,000,
$1,925,000, and $1,850,000 in 1996, 1995 and 1994, respectively.

     The following table indicates the significant elements contributing to the
difference between the U.S. federal statutory tax rate and the effective tax
rate:


<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,                               1996                1995            1994
----------------------------------------------------------------------------------------------
Percentage of earnings before taxes:
<S>                                                   <C>                 <C>            <C>          
U.S. federal statutory rate                           35.0%               35.0%           35.0%
State and local taxes on income, net of
  federal income tax benefit                           4.4%                4.5%            4.8%
Other                                                  2.3%                1.5%            1.2%
                                                      ----------------------------------------
Effective rate                                        41.7%               41.0%           41.0%
                                                      ========================================
</TABLE>


<PAGE>   34



     Presented below are the significant elements of the net deferred tax
balance sheet accounts at December 31, 1996 and 1995:


<TABLE>
<CAPTION>
Deferred tax assets:                           1996      1995
                                               ----      ----
<S>                                         <C>       <C>
 Current:
  Accounts receivable                        $4,857    $4,893
  Inventories                                   902       677
  Deferred compensation                         428       234
  Other, net                                    769     1,197
                                         --------------------
Subtotal                                      6,956     7,001

 Long-term:
  Acquired net operating loss benefits          482       539
  Other, net                                  1,127     1,300
                                         --------------------
Subtotal                                      1,609     1,839
                                         --------------------
Total deferred tax assets                    $8,565    $8,840
                                         ====================
Deferred tax liabilities:
 Current:
  Change in tax method for inventories       $2,396    $2,396
                                         --------------------
Subtotal                                      2,396     2,396

 Long-term:
  Fixed assets                               $3,557     3,486
  Change in tax method for inventories                  2,396
  Other, net                                  1,082     1,063
                                         --------------------
Subtotal                                      4,639     6,945
                                         --------------------
Total deferred tax liabilities               $7,035    $9,341
                                          ===================
</TABLE>

     During 1992, the Company adopted the FIFO method of valuing inventories
for tax purposes.  Prior to 1992, the Company used the LIFO method of valuing
inventories for tax purposes.  The transition rules allow for the Company to
implement this change in accounting for tax purposes on a pro-rata basis over
the years 1992 through 1997.

     In connection with the acquisition of Goold, the Company acquired federal
net operating loss carryforwards of $2,318,468.  Due to certain tax law
limitations, annual utilization of the carryforward is limited to $162,945.
The remaining tax loss carryforward at December 31, 1996 is $1,541,243.  The
carryover period expires in 2006.

<PAGE>   35


NOTE 7 - LONG-TERM DEBT

     The primary components of long-term debt at December 31, 1996 are
$67,350,000 of Debentures and $30,000,000 of Senior Notes.  The remaining
$2,416,000 is comprised of mortgage obligations, and certain other debt related
to the purchase of the IV One Companies and NIS.

     On September 24, 1992 and October 20, 1992, the Company concluded a public
offering of $65,000,000 and $2,350,000, respectively, of Convertible
Subordinated Debentures, Due 2002, for approximately $65,565,000, net of
underwriting and other costs.  The 6.50% Debentures are convertible at any time
prior to maturity into the Company's common stock at $19.825 per share.  The
Company may redeem the Debentures at a decreasing premium after October 1,
1996.

     The market value of the 6.50% Debentures, based upon the publicly quoted
rate, was $71,391,000 and $70,212,375  as of December 31, 1996 and December 31,
1995, respectively.

     On December 27, 1996, the Company completed a private placement of $30
million Senior Notes due December 27, 1999 at an interest rate of 7.25%.  The
Company estimates the fair market value at December 31, 1996 approximates the
principle amount based on the proximity of the issuance date to the fiscal year
end.

     In 1995, the Company purchased its corporate offices from a partnership
controlled by the Company's principal shareholder at its fair market value of
$1,450,000.  Prior to the purchase, the Company leased the building under a
capitalized lease with a minimum annual rental of $111,000 at an implicit rate
of 10.5%.

NOTE 8 - PROFIT SHARING PLAN

     The Company and its subsidiaries maintain a  qualified Profit Sharing Plan
("Profit Sharing Plan") for eligible employees.  All employees are generally
eligible to participate in the Profit Sharing Plan as of the first January 1,
April 1, July 1 or October 1 after having completed at least one year of
service (as defined in the Profit Sharing Plan) and  having reached  age  21
("Participant"). The  annual contribution of the Company and its subsidiaries
to the Profit Sharing Plan is at the discretion of the Board and is generally
8% of the Participant's compensation  for the year.  The employer contribution
for a year is allocated among the Participants employed on the last day of the
year in proportion to their relative compensation for the year. The Company's
contributions to the plan for the years ended December 31, 1995 and 1994  were
$1,165,550 and  $933,600, respectively, and are estimated to be $1,334,572
for the year ended December 31, 1996.

     Subject to limitations imposed by the Internal Revenue Code, a Participant
may have a whole percentage (ranging from 1% to 13%) of his or her compensation
withheld from pay and contributed to the Profit Sharing Plan and make
"rollover" contributions to the Profit Sharing Plan of qualifying distributions
from other employers' qualified plans.

     A Participant's interest in amounts withheld from his or her pay and
contributed to the Profit Sharing Plan or in rollover contributions and in the
earnings on those amounts are fully

<PAGE>   36

vested at all times.  A Participant's interest in employer contributions made
on his or her behalf and the earnings on those contributions become 20% vested
after three years of service and an additional 20% vested during each of the
next four years.  A Participant's interest in employer contributions made on
his or her behalf and the earnings on those contributions will also become
fully vested when the employee retires at age 65 or older, dies or becomes
totally disabled.

     All contributions to the Profit Sharing Plan are paid in cash to an
Indianapolis bank, as trustee, and are invested by the trustee until
distributed to Participants or their beneficiaries.  Participants are permitted
to direct the trustee as to the investment of their accounts by choosing among
several investment funds that are offered under the Profit Sharing Plan,
including one fund consisting of common stock of the Company.  Participants may
elect to invest in one fund or a combination of the available funds according
to their investment goals.  If a Participant does not make an investment
election, his or her Profit Sharing Plan accounts will be invested in a fund
designated by the Company.

     Except in certain cases of financial hardship, a Participant (or his or
her beneficiary) receives distributions from the Profit Sharing Plan only at
death, retirement or termination of employment.  At that time, the value of a
Participant's interest in the Profit Sharing Plan is distributed to him or her.

     Effective January 1, 1994, the Company adopted the PRISM Prototype
Retirement Plan and Trust, which differs from the prior plan document in the
following respects: (a)  the Company's contribution is discretionary instead of
mandatory; (b)  Participants' forfeitures are used to reduce the Company's
contribution instead of being allocated prorata among the remaining
Participants; (c)  the type and number of investment alternatives available for
Participants; and (d)  the entry dates for new Participants now include April 1
and October 1.  Generally, the new plan is considered an improvement in terms
of administration, cost and Participant access.

NOTE 9 - CAPITAL STOCK

     The Company's capitalization presently consists of 30,000,000 authorized
shares of Common Stock and 1,000,000 authorized shares of Special Stock.  Both
the Common Stock and Special Stock have a $.01 par value per share.

     Prior to May 20, 1993, the Company had a 1983 Incentive Stock Option Plan,
a 1983 Nonqualified Option Plan, and a 1987 Stock Option and Incentive Plan.
The number of shares available for issuance pursuant to such plans aggregated
2,500,000 shares.  Incentive stock options, granted at a minimum of 100% of
fair market value, and nonqualified stock options, granted at a minimum of 85%
of fair market value, both exercisable for up to 10 years from the date of
grant, were authorized under such plans.

<PAGE>   37


     On May 20, 1993, the Company's shareholders approved the 1993 Stock Option
and Incentive Plan authorizing 1,000,000 shares of the Company's common stock
for sale or award to officers and key employees (including any such officer or
employee who holds at least 10% of the Company's common stock) as stock options
or restricted stock. No further awards will be made from the shares of common
stock that remained available for grants under prior stock option plans.

     On May 19, 1994, the Company's shareholders approved amendments to the
Company's 1983 Incentive Stock Option Plan, the 1983 Nonqualified Stock Option
Plan, the 1987 Stock Option and Incentive Plan and the 1993 Stock Option and
Incentive Plan to permit the Company's Compensation and Stock Option Committee
of the Board of Directors ("Committee") to allow participants under these
plans, including the holders of outstanding options, to exercise an option
during its term following cessation of employment by reason of death,
disability or retirement.  Such amendments also permitted the Committee, in its
sole discretion, to change the exercise and termination terms of options
granted if such changes are otherwise consistent with applicable federal and
state laws.  In addition, the 1993 plan was amended to (i) increase from
1,000,000 to 1,500,000 the number of shares authorized for issuance pursuant to
awards made under the 1993 plan; (ii) limit to 100,000 shares the number of
shares that any one participant may receive under the 1993 plan during any
calendar year; and (iii) provide that the Board of Directors may amend the 1993
plan in any respect without shareholder approval, unless such approval is
required to comply with Rule 16b-3 under the Securities Exchange Act of 1934 or
Section 422 of the Internal Revenue Code of 1986.  On May 16 1996, the
Company's shareholders approved an amendment to the 1993 Stock Option and
Incentive Plan to increase by 1,500,000 the number of shares authorized for
issuance pursuant to awards made under the 1993 plan.

     In accordance with the provisions of Financial Accounting Standards No.
123, Accounting for Stock-Based Compensation (SFAS 123), the Company has
elected to continue following Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees (APB 25) and related Interpretations
in accounting for its stock option plans, and accordingly, generally does not
recognize compensation expense related to these options.  If the Company had
elected to recognize compensation expense based on the fair value of the
options at the grant date as prescribed by SFAS 123, pro forma net income and
earnings would have been:


<TABLE>
<CAPTION>
                                     1996            1995
---------------------------------------------------------
(In thousands, except share data) 
<S>                               <C>             <C>
Net earnings - as reported        $18,006         $16,381
Net earnings - pro forma          $16,019         $16,135
Earnings per share         
 Primary - as reported               1.52            1.42
 Primary - pro forma                 1.35            1.40
 Fully diluted - as
  reported                           1.35            1.27
 Fully diluted - pro forma           1.21            1.25
</TABLE>

     The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option pricing model with the following
weighted-average assumptions for the years ended,

<PAGE>   38




<TABLE>
<CAPTION>
                                                1996                     1995
-----------------------------------------------------------------------------
<S>                                           <C>                      <C>
Risk free interest rates                        6.05%                    5.69%
Expected dividend yields                         .41%                     .41%
Expected life of options                        4.60                     4.58
Volatility of stock price                      29.43%                   32.26%
Weighted average fair
value of options                              $ 6.20                   $ 6.09
</TABLE>

     Compensation expense based on the fair value of options granted prior to
January 1, 1995 were not included in the preceding pro forma calculations.
Therefore,  the resulting pro forma compensation cost may not be representative
of that to be expected in future years.

Changes in stock options under all plans are shown below:


<TABLE>
<CAPTION>
                            NUMBER OF        WEIGHTED AVERAGE
                             SHARES           EXERCISE PRICE
-------------------------------------------------------------
<S>                      <C>                          <C>
Options outstanding
  at December 31, 1993     2,016,204                  $ 11.91
Forfeited during 1994        (51,200)                 $ 12.42
Granted during 1994          708,417                  $ 13.21
Exercised during 1994        (43,950)                 $ 11.26
                         -------------
Options outstanding
  at December 31, 1994     2,629,471                  $ 12.26
Forfeited during 1995       (102,598)                 $ 13.12
Granted during 1995          647,300                  $ 17.17
Exercised during 1995       (382,394)                 $ 11.34
                         -------------
Options outstanding
  at December 31, 1995     2,791,779                  $ 13.50
Forfeited during 1996        (56,600)                 $ 17.55
Granted during 1996          848,775                  $ 18.01
Exercised during 1996       (308,654)                 $ 11.51

Options outstanding
  at December 31, 1996     3,275,300                  $ 14.78
                         =============
Exercisable
  at December 31, 1996     1,908,718
                         =============
Available for grant
 at December 31, 1996        344,106
                         =============
</TABLE>

     In certain cases, the exercise of stock options results in state and
federal income tax deductions to the Company on the difference between the
market price at the date of exercise

<PAGE>   39

and the option price.  The tax benefits obtained from these deductions are
included in additional paid in capital.

     Additional information regarding options outstanding at December 31, 1996
are shown below:


<TABLE>
<CAPTION>
                                              Exercise Price Range
----------------------------------------------------------------------------------------
                                 $5.42-$9.99   $10.25-$16.75    $17.00-$20.08    Total
----------------------------------------------------------------------------------------
<S>                                  <C>           <C>              <C>        <C>
Number of options
  outstanding                        321,850       1,419,975        1,533,475  3,275,300
Weighted average
  exercise price                       $8.70          $12.87           $17.83     $14.78
Remaining contractual life              3.24            7.33             8.85       7.64
Number of shares
  exercisable                        321,850       1,044,642          542,226  1,908,718
Weighted average
  exercisable price                    $8.70          $12.66           $17.38     $13.33
</TABLE>

NOTE 10 - COMMITMENTS

     The Company leases warehouse and office space under noncancelable
operating leases expiring at various dates through 2001, with options to renew
for various periods.  Minimum commitments under leases aggregate  $1,675,000
for 1997, $927,000 for 1998 and $394,000 for 1999, $383,000 for 2000 and 19,000
for 2001.


     The consolidated rent expense for the years ended December 31, 1996, 1995
and 1994 was $1,519,919, $1,708,691 and $1,500,082  respectively, of which
approximately $208,728 in 1996,  $76,875 in 1995 and $45,000 in 1994  pertained
to leases with terms of one year or less.

NOTE 11 -  MAJOR CUSTOMERS

     The Company services customers in 50 states and  Puerto Rico from its 12
distribution centers located in nine states.  Its principal customers are chain
drug companies that operate their own warehouses.  Other customers include
independent drug stores, chain drug stores, hospitals, clinics, HMOs, state and
federal government agencies and other health care providers.  The following
chain drug warehouse customers each accounted for over 10% of the Company's net
sales during the years shown: Eckerd Corporation (17%), Rite Aid Corporation
(14%) and Revco D.S., Inc. (12%) in 1996; Eckerd Corporation (19%), Rite Aid
Corporation (15%) and Revco D.S., Inc. (10%) in 1995; and Eckerd Corporation
(22%) and Rite Aid Corporation (11%) in 1994. Sales to these customers
aggregated 43%, 44% and 33% of net sales in 1996, 1995 and 1994  respectively.
The Company sells inventory to its chain drug warehouse and other customers on
various payment terms.  This entails accounts receivable exposure, especially
if any of its chain warehouse customers encounter financial difficulties.
Although the Company monitors closely the creditworthiness of its major
customers and, when feasible, obtains security interests in the inventory sold,
there can be no

<PAGE>   40

assurance that the Company will not incur the write-off or writedown of chain
drug accounts receivable in the future.


NOTE 12 - STATEMENT OF CASH FLOWS

     Cash paid for interest expense and income taxes was as follows:


<TABLE>
<Caption
DECEMBER 31,         1996       1995       1994
(in thousands)
<S>             <C>        <C>        <C>
Interest          $13,126    $13,395    $13,679
Income taxes      $13,640    $16,469    $ 8,003
</TABLE>

     Presented below is a brief discussion of recent acquisitions by the
Company.  The purchase price has been allocated based on a determination of the
fair value of the assets acquired and liabilities assumed.  The goodwill
associated with these acquisitions is being amortized on a straight line basis
not exceeding 40 years.  All acquisitions were treated as purchases and the
financial statements include the results of operations from the respective
effective date of acquisition.  Results of operations of the acquired companies
from January 1 of the year of acquisition to the effective dates of the
transactions are not material to the consolidated results of operations of the
Company for the respective years.


     Effective July 1, 1994 and October 31, 1994, the Company purchased Kendall
Drug Co. (Kendall), a wholesale pharmaceutical distributor based in Shelby, NC
and 3C Medical, Inc. (3C), a distributor of hemodialysis products  based in
Santa Ana, CA, respectively.  The Company expended approximately $8.1 million
for the acquisition of Kendall which approximated the fair value of the net
assets acquired. The Company exchanged 15,000 shares of its common stock
(market value $195,000) and approximately $1.2 million in cash for 3C which
exceeded the fair value of the net assets acquired and resulted in
approximately $1.1 million of intangible assets.

     Effective January 1, 1995, the Company purchased the IV One Companies (IV
One).   IV One is comprised of IV-1, Inc., IV-One Services, Inc. and National
Pharmacy Providers, Inc.  These companies focus on high acuity specialty
pharmacy services for patients requiring home and ambulatory infusion therapy.
The consideration exchanged for IV One was approximately $2.9 million which
exceeded the fair value of net assets  acquired and resulted in approximately
$2.1 million of intangible assets.

<PAGE>   41



     In January, 1996, the Company formed a new subsidiary, National Infusion
Services, Inc.(NIS).  Effective February 8, 1996, the Company through its NIS
subsidiary purchased the assets of the infusion services division of Infectious
Disease of Indiana P.S.C.  NIS is a provider of quality care to patients in a
variety of settings.  In February of 1997, the corporate name was changed from
NIS to Priority Healthcare Services Corporation (PHS). The Company acquired the
assets of NIS for approximately $9 million in cash and incurred a long-term
obligation of approximately $1.5 million, resulting in approximately $9.8
million in intangible assets.

NOTE 13 - LEGAL PROCEEDINGS

     The Company is a defendant in a consolidated class action filed in the
United States District Court for the Northern District of Illinois in 1993
which names the Company, five other pharmaceutical wholesalers and 26
pharmaceutical manufacturers as defendants.  Plaintiffs allege that
pharmaceutical manufacturers and wholesalers conspired to fix prices of
brand-name prescription drugs sold to retail pharmacies at artificially high
levels in violation of the federal antitrust laws.  The plaintiffs seek
injunctive relief, unspecified treble damages, costs, interest and attorney's
fees.  The Company has denied the complaint allegations.

     In April, 1996, the Court granted the wholesalers motion for summary
judgment and dismissed the wholesaler defendants, including the Company, from
the action finding that there was no evidence in the record that the wholesaler
defendants had conspired with the pharmaceutical manufacturer defendants.  The
class action plaintiffs have appealed this decision to the U.S. Court of
Appeals for the Seventh Circuit.  The appellate court has not issued a briefing
or hearing schedule as of this time.  The trial court on January 30, 1997
denied the plaintiffs motion under Fed. R. Civ. P. 60(b) to reopen the summary
judgment issues involving the wholesaler defendants.

     A majority of the manufacturer defendants and the class plaintiffs have
reached a settlement agreement, which was approved by the Court.  The decision
approving the settlement agreement has also been appealed to the Seventh
Circuit.

     On July 1, 1996, the Company and several other wholesalers were joined as
the defendants in a seventh amended and restated complaint filed in the Circuit
Court of Greene County, Alabama,  Durrett v. The Upjohn Company, civil action
no. 94-029.  The case was first filed in 1994.  The plaintiffs claim the prices
of prescription drugs they purchase in interstate commerce are artificially
high because of alleged illegal activities of the defendant pharmaceutical
manufacturers and wholesalers.  The plaintiffs seek monetary damages,
injunctive relief and punitive damages.  The Company has denied the allegations
of the complaint.

     Defendants filed motions to dismiss and for judgment on the pleadings
arguing that the Alabama Antitrust Statute applies only to intrastate commerce.
The trial court denied defendants' motion and defendants have appealed the
issue to the Alabama Supreme Court, which accepted the appeal on February 7,
1997.  In addition, plaintiffs' motion for class certification is pending
before trial court.

     On October 21, 1994, the Company entered into an agreement in these cases
with five

<PAGE>   42

other wholesalers and 26 pharmaceutical manufacturers.  Among other things, the
agreement provides: (a) if a judgment is entered into against both the
manufacturer and wholesaler defendants, the total exposure for joint and
several liability of the Company is limited to $1,000,000; (b) if a settlement
is entered into by, between and among the manufacturer and wholesaler
defendants, the Company has no monetary exposure for such settlement amount;
(c) the six wholesaler defendants will be reimbursed by the 26 manufacturer
defendants for related legal fees and expenses up to $9,000,000 total (the
Company's initial portion of this amount is $1,000,000); and (d) the Company is
to release certain claims which it might have had against the manufacturer
defendants for the claims presented by the plaintiffs in these cases.  The
agreement covers the federal court litigation as well as cases which have been
filed in various state courts.

     The Company is unable to form a reasonably reliable conclusion regarding
the likelihood of a favorable or unfavorable outcome of these cases.  As
confirmed by the Federal Court's decision, the Company believes the allegations
of liability are without merit with regard to the wholesaler defendants and
that the attendant liability of the Company, if any, would not have a material
adverse effect on the Company's financial condition or liquidity.  Adverse
decisions, although not anticipated, could have an adverse material effect on
the Company's results of operations.

     On October 7, 1996, the Company and its indirect subsidiary, National
Infusion Services, ("NIS"), were named as defendants in an action filed by
Thomas G. Slama, M.D. in the Superior Court of Hamilton County, Indiana which
is now pending in that Court as Cause No. 29D03-9702-CP-81.  Dr. Slama is a
director of the Company and formerly was Chief Executive Officer and President
of NIS.  The complaint alleges breach of contract and defamation arising  from
the termination of Dr. Slama's employment with NIS in October 1996, and  seeks
damages in excess of $3.4 million, punitive damages, attorneys fees and costs.
The Company and NIS believe Dr. Slama terminated his employment without "cause"
(as defined in his employment agreement), and alternatively, that NIS had
grounds to terminate Dr. Slama for "cause" under his employment agreement.  The
Company and NIS have answered the complaint, denying the merits of Dr. Slama's
claims, and have also filed a counterclaim against Dr. Slama seeking, among
other things, declaratory relief, compensatory and (in some instances) treble
damages, punitive damages, attorneys' fees, interest and costs.  The Company
and NIS are contesting Dr. Slama's complaint and pursuing their counterclaim
vigorously.  Although the outcome of any litigation is uncertain, the Company
believes after consultation with  its counsel that the attendant liability of
the Company, if any, should not have a material adverse effect on the Company's
financial condition or liquidity.  An adverse decision, although not
anticipated, could have a material effect on the Company's results of
operations.

<PAGE>   43



NOTE 14 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

The following table presents the quarterly financial data for 1996 and 1995.


<TABLE>
<CAPTION>
                             FIRST             SECOND            THIRD             FOURTH
                            QUARTER           QUARTER           QUARTER           QUARTER
-------------------------------------------------------------------------------------------   
(in thousands, except per share data)
<S>                        <C>               <C>               <C>               <C>
1996
 Net sales                 $1,188,988        $1,217,896        $1,336,265        $1,574,377
 Gross margin                  29,426            30,008            29,649            31,435
 Net earnings                   4,604             4,060             4,213             5,129
 Earnings per share:        
   Primary                 $      .39        $      .34        $      .35        $      .43
   Fully Diluted                  .35               .31               .32               .37
1995                        
 Net sales                 $1,113,717        $1,126,260        $1,121,533        $1,308,643
 Gross margin                  27,008            26,020            24,041            27,335
 Net earnings                   4,196             4,201             3,547             4,436
 Earnings per share:        
   Primary                 $      .37        $      .37        $      .31        $      .38
   Fully Diluted                  .33               .33               .28               .34
</TABLE>


<PAGE>   44



                                   SIGNATURES

     Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                        BINDLEY WESTERN INDUSTRIES, INC.

                                        By /s/ William E. Bindley
                                        --------------------------------------
     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.


<TABLE>
<Caption

        SIGNATURE                         TITLE                      DATE
<S>                         <C>                                 <C>
                                                                
/s/ William E. Bindley      Chairman of the Board and           March 27, 1997
----------------------      President (Principal Executive                    
William E. Bindley          Officer); Director                                

/s/ William F. Bindley, II  Director                            March 27, 1997
--------------------------                                                    
William F. Bindley, II                                               

/s/ Keith W. Burks          Executive Vice President;           March 27, 1997
------------------          Director                               
Keith W. Burks                                                                

/s/ Seth B. Harris          Director                            March 27, 1997
------------------                                                            
Seth B. Harris                                                                

/s/ Robert L. Koch, II      Director                            March 27, 1997
----------------------                                                        
Robert L. Koch, II                                                            

/s/ Michael D. McCormick    Executive Vice President, General   March 27, 1997
------------------------    Counsel and Secretary; Director                   
Michael D. McCormick                                                          

/s/ J. Timothy McGinley     Director                            March 27, 1997
-----------------------                                                       
J. Timothy McGinley                                                  

/s/ James K. Risk, III      Director                            March 27, 1997
----------------------                                                        
James K. Risk, III          
                                                                              
/s/ Thomas J. Salentine     Executive Vice President and        March 27, 1997
-----------------------     Chief Financial Officer                           
Thomas J. Salentine         (Principal Accounting and                         
                            Financial Officer); Director                      

                            Director                                          
--------------------------                                                    
Thomas G. Slama, M.D.                                                         

/s/ K. Clay Smith           Director                            March 27, 1997
-----------------                                                             
K. Clay Smith               
</TABLE>                                                        

<PAGE>   45


                               INDEX TO EXHIBITS


<TABLE>
<CAPTION>
                                                                                                       Page No.
 Exhibit                                                                                                 This
   No.                                               Description                                        Filing
__________                           ___________________________________________                      __________

   <S>      <C>  <C>                                                                                          
   3-A      (1)  (i) Amended and Restated Articles of Incorporation of
                 Registrant.......................................................................

            (2)  (ii) Amendment to Restated Articles of Incorporation increasing number of
                 authorized shares................................................................

            (3)  (iii) Amendment to Restated Articles of Incorporation establishing terms of Class A
                 Preferred Stock..................................................................

   3-B      (12) Restated By-Laws of Registrant, as Amended to date...............................

   4-A      (4)  Trust Indenture dated as of September 15, 1992 between Registrant and Bank One,
                 Indianapolis, NA.................................................................

   4-B           (i) Eighth Amendment to Amended and Restated Credit Agreement dated as of May 15,
                 1996 among Registrant and Bank One Indianapolis, NA, Keybank National Association,
                 Nationsbank of Texas, N.A., Suntrust Bank, Central Florida, N.A., The Bank of
                 Tokyo-Mitsubishi Ltd., The First National Bank of Chicago, The Boatmen's National
                 Bank of St. Louis, Bank One, Milwaukee, NA, The Industrial Bank of Japan, Limited,
                 and Bank One, Indianapolis, NA, as agent (this exhibit has not been included in
                 this filing but will be provided upon written request to the Registrant's Chief
                 Financial Officer)...............................................................
              
   4-C           Note Purchase Agreement dated as of December 15, 1996 by and among Registrant and
                 Nationwide Life Insurance Company and Employers life Insurance Company of Wausau
                 for $30,000,000 aggregate principal amount of Registrant's 7.25% Senior Notes due
                 December 27, 1999  (this exhibit has not been included in this filing but will be
                 provided upon written request to the Registrant's Chief Financial Officer).......

 </TABLE>




<PAGE>   46





<TABLE>
<CAPTION>
                                                                                                          Page No.
 Exhibit                                                                                                    This
   No.                                             Description                                             Filing
__________      __________________________________________________________________________________       __________
<S>             <C>   <C>                                                                                 <C>     
     10-A*       (6)  (iii) Employee Benefit Trust Agreement of Registrant dated November 30, 1990
                 (5)  (v) Split Dollar Insurance Agreement dated December 11, 1992 between
                      Registrant and William F. Bindley, II and K. Clay Smith as trustees of the
                      William E. Bindley Irrevocable Trust........................................
                 (5)  (vi) The William E. Bindley Trust Agreement dated December 11, 1992 between
                      William E. Bindley, grantor, and William F. Bindley, II and K. Clay Smith,
                      trustees....................................................................
     10-B*       (7)  (i) Nonqualified Stock Option Plan of Registrant............................
                (10)  (ii) Amendment to the Nonqualified Stock Option Plan of Registrant..........
     10-C*       (7)  (i) Incentive Stock Option Plan of Registrant...............................
                (10)  (ii) Amendment to the Incentive Stock Option Plan of Registrant.............
     10-D*       (8)  (i) 1987 Stock Option and Incentive Plan of Registrant......................
                 (9)  (ii) Amendment to 1987 Stock Option and Incentive Plan......................
                 (9)  (iii) Outside Directors Stock Option Plan of Registrant.....................
                (10)  (iv) Amendment to the 1987 Stock Option and Incentive Plan of Registrant....
     10-E*       (5)  (i) 1993 Stock Option and Incentive Plan of Registrant......................
                (10)  (ii) First Amendment to the 1993 Stock Option and Incentive Plan of
                      Registrant..................................................................
                      (iii) Second Amendment to the 1993 Stock Option and Incentive Plan of
                      Registrant .................................................................       50     
                                                                                                     ----------
</TABLE>




<PAGE>   47




<TABLE>
<CAPTION>
                                                                                  Page No.
 Exhibit                                                                            This
   No.                                Description                                  Filing
__________   ______________________________________________________________      __________
  <S>        <C>   <C>                                                     
  10-J*      (13)  (i) Form of Termination Benefits Agreement, dated April  
                   1, 1996, between Registrant and Messrs. Bindley,        
                   Burks, McCormick, and Salentine.........................
                                                                           
             (12)  (ii) Termination Benefits Agreement, dated as of         
                   February 8, 1996, between Registrant and Thomas G.      
                   Slama...................................................
                                                                           
  10-U       (10)  Assistance Agreement dated August 11, 1993 between the  
                   State of Connecticut and Registrant.....................
                                                                           
  10-X*      (10)  (i) Consulting Agreement, dated January 20, 1994,        
                   between George E. Maloof and Registrant.................
                                                                           
             (12)  (ii) Severance Agreement and Release, dated August 31,   
                   1995, between Registrant and Michael R. Visnich.........
                                                                           
             (12)  (iii) Employment Agreement, dated February 8, 1996,      
                   between Registrant and Thomas G. Slama..................
                                                                           
             (12)  (iv) Noncompetition Agreement, dated February 7, 1996,   
                   between Registrant and Thomas G. Slama..................
                                                                           
  10-Y       (12)  Collective Bargaining Agreement dated October 21, 1994  
                   between J.E. Goold & Co. and Truck Drivers,             
                   Warehousemen and Helpers Union Local No. 340............
                                                                           
  10-Z*      (10)  (i) 401(k) Profit Sharing Plan (Nonstandardized)         
                   Adoption Agreement of Registrant, effective January     
                   1, 1994.................................................
                                                                           
             (11)  (ii) Amendment to page 4 of the 401(k) Profit Sharing    
                   Plan (Nonstandardized) Adoption Agreement of            
                   Registrant, effective January 1, 1994...................
                                                                           
             (12)  (iii) 401(k) Profit Sharing Plan (Nonstandardized)       
                   Adoption Agreement of Registrant, effective January 1,  
                   1996....................................................
</TABLE>




<PAGE>   48




<TABLE>
<CAPTION>
                                                                                                                 Page No.
 Exhibit                                                                                                           This
   No.                                                  Description                                               Filing
__________       _______________________________________________________________________________________      ______________
  <S>            <C>    <C>                                                                                     <C>
                 (12)   (iv) Amendment to page 6 of the 401(k) Profit Sharing Plan (Nonstandardized)
                        Adoption Agreement of Registrant, effective January 1, 1996.....................

  10-AA*         (11)   (i) Form of Profit Sharing Excess Plan and related Trust between Registrant and
                        each of William E. Bindley, Keith W. Burks, Michael D. McCormick, and Thomas J.
                        Salentine.......................................................................

                 (11)   (ii) Form of 401(k) Excess Plan and Related Trust between Registrant and each of
                        William E. Bindley, Keith W. Burks, Michael D. McCormick, and Thomas J.
                        Salentine.......................................................................

                 (12)   (iii) First Amendment to 401(k) Excess Plan.....................................

    21                  List of subsidiaries of Registrant..............................................            51    
                                                                                                              --------------
    23                  Written Consent of Price Waterhouse LLP.........................................            52     
                                                                                                              --------------
    27                  Financial Data Schedule.........................................................            53 
                                                                                                              --------------
</TABLE>
----------------------
*The indicated exhibit is a management contract, compensating plan, or
arrangement required to be filed by Item 601 of Regulation S-K.



<PAGE>   49
(1)  The copy of this exhibit filed as the same exhibit number to the
     Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1987
     is incorporated by reference.

(2)  The copy of this exhibit filed as Exhibit 4(a)(ii) to the Company's
     Registration Statement on Form S-3 (Registration No. 33-45965) is 
     incorporated by reference.

(3)  The copy of this exhibit filed as exhibit number 1 to the Company's
     Quarterly Report on Form 10-Q for the quarter ended June 30, 1992 is
     incorporated by reference.

(4)  The copy of this exhibit filed as Exhibit 4-D to the Company's
     Registration Statement on Form S-3 (Registration No. 33-50982) is 
     incorporated by reference.

(5)  The copy of this exhibit filed as the same exhibit number to the
     Company's Annual Report on Form 10-K for the year ended December 31, 1992 
     is incorporated by reference.

(6)  The copy of this exhibit filed as the same exhibit number to the
     Company's Annual Report on Form 10-K for the year ended December 31, 1990 
     is incorporated by reference.

(7)  The copy of this exhibit filed as the same exhibit number to the
     Company's Registration Statement on Form S-1 (Registration No. 2-84862) is
     incorporated by reference.

(8)  The copy of this exhibit filed as the same exhibit number to the
     Company's Annual Report on Form 10-K for the year ended December 31, 1986 
     is incorporated by reference.

(9)  The copy of this exhibit filed as the same exhibit number to the
     Company's Annual Report on Form 10-K for the year ended December 31, 1991 
     is incorporated by reference.

(10) The copy of this exhibit filed as the same exhibit number to the
     Company's Annual Report on Form 10-K for the year ended December 31, 1993 
     is incorporated by reference.

(11) The copy of this exhibit filed as the same exhibit number to the
     Company's Annual Report on Form 10-K for the year ended December 31, 1994 
     is incorporated by reference.

(12) The copy of this exhibit filed as the same exhibit number to the
     Company's Annual Report on Form 10-K for the year ended December 31, 1995 
     is incorporated by reference.

(13) The copy of this exhibit filed as Exhibit 10-CC to the Company's
     Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 is
     incorporated by reference.