CVS Corp. Reports Record Third Quarter Sales and Earnings; Comparable Diluted EPS Increased 25% to $0.25; Also Announces Accelerated New Store Program.WOONSOCKET Woonsocket (w  nsŏk`ĭt, w n–), city (1990 pop. 43,877), Providence co., N R.I. , R.I.--(BUSINESS WIRE)--Oct. 28, 1998--CVS Corporation
(NYSE NYSESee: New York Stock Exchange : CVS (1) (Concurrent Versions System) A version control system for Unix that was initially developed as a series of shell scripts in the mid-1980s. CVS maintains the changes between one source code version and another and stores all the changes in one file. ) today announced record sales and earnings for the third quarter ended September September: see month. 26, 1998 and an accelerated new store development program. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the third quarter of 1998 increased 11.9% to $3.7 billion from $3.3 billion during the prior year period. For the first nine months of 1998, net sales increased 9.4% to $11.1 billion from $10.1 billion during the prior year period. Same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of rose 10.8% for the quarter and 10.0% for the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. period, while pharmacy pharmacy, art of compounding and dispensing drugs and medication. The term is also applied to an establishment used for such purposes. Until modern times medication was prepared and dispensed by the physician himself. In the 18th cent. same store sales increased 17.3% for the quarter and 15.8% for the year-to-date period. Pharmacy sales were 59% of total sales for the quarter and 58% for the year-to-date period. Third party prescription prescription In property law, the effect of the lapse of time in creating and destroying rights. Acquisitive prescription allows an individual, after unequivocal possession for a specific period, to acquire an interest in real property, such as an easement, but not the sales were 83% of pharmacy sales for the quarter and the year-to-date period. Earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the and net earnings for the third quarter of 1998 increased 24.6% to $102.4 million, or $0.25 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, from $82.2 million, or $0.20 per diluted share, during the prior year period. Year-to-date, comparable earnings from continuing operations, excluding the impact of the Non-Recurring Charges defined below, increased 23.2% to $364.3 million, or $0.90 per diluted share, from $295.6 million, or $0.74 per diluted share, during the prior year period. "Our sales and earnings for the quarter represent the best third quarter performance in CVS' history. These results were led by exceptionally strong comparable sales in both the front end of our stores and the pharmacy, as well as by a significant decline in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. ," stated Tom Ryan
Tom Ryan (born August 3 1986), who plays under the pseudonym Ogre 2, is a professional gamer from Pickerington, Ohio, USA. , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Our results also continue to benefit from our successful conversion of Revco
Revco Discount Drug Stores (known simply as Revco or Revco, D.S.), once based in Twinsburg, Ohio, was a major drug store chain operating through the Ohio Valley, the Mid-Atlantic states, and the stores to CVS. In fact, in September, Revco's comparable store sales outperformed CVS' very healthy 11% same store sales gain. We are excited about these results and see continued opportunities for growth from the Revco stores. "Given our strong financial performance, our real estate pipeline and the positive results we are seeing from our relocations, especially at Revco, we have decided to take advantage of the significant opportunities around relocations," continued Mr. Ryan Ryan may refer to: Places
Toward that end, the Company announced that its new plans call for the opening of 375 new or relocated re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. stores in 1998, up from its original plan of 320. Further, the Company announced that, while it is still evaluating its real estate plans for 1999, it would expect to open between 400 and 425 new or relocated stores, up from its original goal of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 375. Year-to-date, CVS opened 142 new stores, relocated 132 and closed 141 others. As of September 26, 1998, CVS operated 4,095 stores in 24 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . By year end 1998, the Company expects to operate approximately 4,125 stores. During the second quarter of 1998, the Company recorded a $10.0 million charge to cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold for markdowns on non-compatible Arbor arbor Garden shelter providing privacy and partial protection from the weather, most commonly a lightweight, latticed framework (trellis) of wood or metal with interlaced branches of vines or climbing shrubs trained over it. merchandise MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain and a $158.3 million charge to operating expenses for direct and other merger-related costs pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to the CVS/Arbor merger transaction and certain restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). activities. During the second quarter of 1997, the Company recorded a $75.0 million charge to cost of goods sold for markdowns on non-compatible Revco merchandise and a $411.7 million charge to operating expenses for direct and other merger-related costs pertaining to the CVS/Revco merger transaction and certain restructuring activities. During the first quarter of 1997, the Company also recorded a $31.0 million charge to operating expenses for certain non-capitalizable costs associated with the restructuring of Big B. Inc. Collectively, the above charges are referred to as the "Non-Recurring Charges". Year-to-date, net earnings, including the Non-Recurring Charges, discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. and the extraordinary item related to the early retirement of certain Revco debt recorded during the second quarter of 1997, increased to $250.6 million, or $0.61 per diluted share, from a net loss of $46.7 million, or $0.15 per diluted share. CVS is the leading drugstore chain in the Northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. , Mid-Atlantic Adj. 1. mid-Atlantic - of a region of the United States generally including Delaware; Maryland; Virginia; and usually New York; Pennsylvania; New Jersey; "mid-Atlantic states" middle Atlantic , Southeast Southeast or south east is the ordinal direction halfway between south and east. It the opposite of northwest. Southeast or South East can refer to: This press release contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to risks and uncertainties. The potential risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company's Securities and Exchange Commission filings. -0-
CVS Corporation
Consolidated Condensed Statements of Operations
(Unaudited)
Three Months Ended
September 26, September 27,
In millions, except per
common share amounts 1998 1997
------------------------------------ ---------------- ----------------
Net sales $ 3,725.1 $ 3,328.7
Cost of goods sold,
buying and
warehousing costs 2,729.8 2,423.1
------------------------------------ ------------ -----------
Gross margin 995.3 905.6
Selling, general and
administrative expenses 742.9 688.6
Depreciation and
amortization 60.7 63.5
Merger and restructuring
charges -- --
------------------------------------ ----------- -----------
Total operating expenses 803.6 752.1
------------------------------------ ----------- -----------
Operating profit 191.7 153.5
Interest expense, net 15.1 9.2
------------------------------------ ----------- -----------
Earnings from continuing operations
before income
taxes and extraordinary item 176.6 144.3
Income tax provision 74.2 62.1
------------------------------------ ----------- -----------
Earnings (loss) from continuing
operations before
extraordinary item 102.4 82.2
Discontinued operations:
Gain on disposal, net of
income tax provision of $12.4 -- --
------------------------------------ ----------- -----------
Earnings from discontinued
operations -- --
------------------------------------ ----------- -----------
Net earnings (loss)
before extraordinary item 102.4 82.2
Extraordinary item, loss
related to early retirement
of debt, net of income tax
benefit of $11.4 -- --
------------------------------------ ----------- -----------
Net earnings (loss) 102.4 82.2
Preference dividends,
net of income tax benefit 3.4 3.4
------------------------------------ ----------- -----------
Net earnings (loss) available
to common shareholders $ 99.0 $ 78.8
------------------------------------ ----------- -----------
Basic earnings per common share:
Earnings (loss) from
continuing operations
before extraordinary item $ 0.25 $ 0.21
Earnings from discontinued
operations -- --
Extraordinary item, net
of income tax benefit -- --
------------------------------------ ----------- -----------
Net earnings (loss) $ 0.25 $ 0.21
------------------------------------ ----------- -----------
Weighted average basic
common shares outstanding 389.5 381.7
------------------------------------ ----------- -----------
Diluted earnings per common share:
Earnings (loss) from
continuing operations
before extraordinary item $ 0.25 $ 0.20
Earnings from discontinued
operations -- --
Extraordinary item, net
of income tax benefit -- --
------------------------------------ ----------- -----------
Net earnings (loss) $ 0.25 $ 0.20
------------------------------------ ----------- -----------
Weighted average diluted
common shares outstanding 396.1 388.0
------------------------------------ ----------- -----------
Dividends declared per common share $ 0.05 $ 0.0550
------------------------------------ ----------- -----------
Nine Months Ended
September 26, September 27,
1998 1997
---------------- ---------------
Net sales $ 11,082.5 $ 10,133.3
Cost of goods sold,
buying and
warehousing costs 8,059.8 7,386.8
------------------------------------ ------------ ------------
Gross margin 3,022.7 2,746.5
Selling, general and
administrative expenses 2,173.5 2,085.5
Depreciation and
amortization 185.8 179.9
Merger and restructuring
charges 158.3 442.7
------------------------------------ ------------ ------------
Total operating expenses 2,517.6 2,708.1
------------------------------------ ------------ ------------
Operating profit 505.1 38.4
Interest expense, net 45.2 38.3
------------------------------------ ------------ ------------
Earnings from continuing operations
before income
taxes and extraordinary item 459.9 0.1
Income tax provision 209.3 47.2
------------------------------------ ------------ ------------
Earnings (loss) from continuing
operations before
extraordinary item 250.6 (47.1)
Discontinued operations:
Gain on disposal, net of
income tax provision of $12.4 -- 17.5
------------------------------------ ------------ ------------
Earnings from discontinued
operations -- 17.5
------------------------------------ ------------ ------------
Net earnings (loss)
before extraordinary item 250.6 (29.6)
Extraordinary item, loss
related to early retirement
of debt, net of income tax
benefit of $11.4 -- (17.1)
------------------------------------ ------------ ------------
Net earnings (loss) 250.6 (46.7)
Preference dividends,
net of income tax benefit 10.2 10.3
------------------------------------ ------------ ------------
Net earnings (loss) available
to common shareholders $ 240.4 $ (57.0)
------------------------------------ ------------ ------------
Basic earnings per common share:
Earnings (loss) from
continuing operations
before extraordinary item $ 0.62 $ (0.15)
Earnings from discontinued
operations -- 0.05
Extraordinary item, net
of income tax benefit -- (0.05)
------------------------------------ ------------ ------------
Net earnings (loss) $ 0.62 $ (0.15)
------------------------------------ ------------ ------------
Weighted average basic
common shares outstanding 386.1 375.4
------------------------------------ ------------ ------------
Diluted earnings per common share:
Earnings (loss) from
continuing operations
before extraordinary item $ 0.61 $ (0.15)
Earnings from discontinued
operations -- 0.05
Extraordinary item, net
of income tax benefit -- (0.05)
------------------------------------ ------------ ------------
Net earnings (loss) $ 0.61 $ (0.15)
------------------------------------ ------------ ------------
Weighted average diluted
common shares outstanding 393.9 375.4
------------------------------------ ------------ ------------
Dividends declared per common share $ 0.17 $ 0.1650
------------------------------------ ------------ ------------
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