CVS Corporation Reports First Quarter 2004 Results; Net Earnings Increased 25%, While Diluted EPS Jumped 23% to 59 Cents.Business Editors WOONSOCKET Woonsocket (w  nsŏk`ĭt, w n–), city (1990 pop. 43,877), Providence co., N R.I. , R.I.--(BUSINESS WIRE)--May 5, 2004
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. Corporation (NYSE NYSE See: New York Stock Exchange : CVS), today announced sales and earnings for the first quarter ended April 3, 2004. 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 first quarter ended April 3, 2004 increased 8.0% to $6.82 billion, up from $6.31 billion during the first quarter of 2003. 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 (sales from stores open more than one year) for the quarter rose 6.4%, 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 rose 8.3% and front-end front-end adj. 1. Of or relating to the initial phase of a project: a front-end investment. 2. Of or relating to the forward parts of a vehicle: a front-end alignment. same store sales increased 2.0%. Total pharmacy sales represented 70.3% of total company sales for the quarter. Third party prescription sales were 93.6% of pharmacy sales for the quarter. Net earnings for the first quarter increased 24.6% to $244.6 million or $0.59 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, compared with net earnings of $196.3 million or $0.48 per diluted share in the first quarter of 2003. "I am very pleased with our first quarter results, which reflect healthy sales growth in both our pharmacy and front-end businesses, and significant gross margin improvement," stated Tom Ryan
Tom Ryan (born August 3 1986), who plays under the pseudonym Ogre 2, is a professional gamer from Pickerington, Ohio, USA. , Chairman, President, and Chief Executive Officer of CVS Corporation. "The improvement in our gross margin was driven by an increase in generic drug generic drug, a drug sold or prescribed under the nonproprietary name of its active ingredients or under a generally descriptive name rather than under a brand or trade name. sales, a continued decrease in inventory losses, and a more profitable promotional product mix. By any financial measure, this was a terrific quarter," concluded Mr. Ryan Ryan may refer to: Places
For the first quarter, CVS opened 29 new stores, closed 21 and 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. 17 others. As of April 3, 2004, CVS operated 4,187 retail and specialty pharmacy stores in 32 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). . On April 5, 2004, the Company announced that it had entered into a definitive agreement under which it will acquire 1,260 Eckerd Eckerd may refer to:
Often used in risk arbitrage. Antitrust act administered by U.S. Department of Justice and the FTC that requires an investor to file a form with the government before he acquires an economic interest in the lesser amount of $15 million or 15% of the , as well as other customary closing conditions, and is expected to close in June June: see month. of 2004. The Company will be holding a conference call today for the investment community at 8:30am (EST EST electroshock therapy. EST abbr. electroshock therapy ) to discuss the quarterly results. The call will be simulcast Simulcast is a portmanteau of "simultaneous broadcast", and refers to programs or events broadcast across more than one medium, or more than one service on the same medium, at the same time. on the Company's web site for all interested parties. To access the webcast, visit the Company's web site at http://investor.CVS.com on the Investor Relations Investor relations The process by which the corporation communicates with its investors. page to hear the call live, or to listen to an archive (1) A file that contains one or more compressed files. Most archive formats are also capable of storing folders in order to reconstruct the file/folder relationship when decompressed. See archive formats. of the call, which will be available for a one-week period following the call. With more than 40 years of dynamic growth in the retail pharmacy industry, CVS is committed to being the easiest pharmacy retailer for customers to use. CVS has created innovative approaches to serve the healthcare needs of all customers through its over 4,100 CVS/pharmacy CVS/pharmacy (also CVS) is a pharmacy and convenience store chain in the United States. CVS is also the largest pharmacy chain in the United States, based on the number of stores. (R) stores, its online pharmacy  This article or section may deal primarily with the U.S. and may not present a worldwide view. ; CVS.com(R) and its pharmacy benefit
management and specialty pharmacy subsidiary, PharmaCare Management
Services. General information about CVS is available through the
Investor Relations portion of the Company's website, at
http://investor.cvs.com.
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 that could cause actual results to differ materially. For these statements, the Company claims the protection of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for forward-looking statements contained in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The Company strongly recommends that you become familiar with the specific risks and uncertainties outlined under the caption "Cautionary Statement Concerning Forward-Looking Statements" in its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended January January: see month. 3, 2004.
CVS CORPORATION
Consolidated Statements of Operations
(Unaudited)
13 Weeks Ended
April 3, March 29,
In millions, except per share amounts 2004 2003
----------------------------------------------------------------------
Net sales $6,818.6 $6,312.8
Cost of goods sold, buying and warehousing
costs 5,046.9 4,707.3
----------------------------------------------------------------------
Gross margin 1,771.7 1,605.5
Selling, general and administrative expenses 1,272.7 1,191.6
Depreciation and amortization 93.4 82.6
----------------------------------------------------------------------
Total operating expenses 1,366.1 1,274.2
----------------------------------------------------------------------
Operating profit 405.6 331.3
Interest expense, net 7.8 12.6
----------------------------------------------------------------------
Earnings before income tax provision 397.8 318.7
Income tax provision 153.2 122.4
----------------------------------------------------------------------
Net earnings 244.6 196.3
Preference dividends, net of income tax
benefit 3.6 3.6
----------------------------------------------------------------------
Net earnings available to common
shareholders $241.0 $192.7
======================================================================
Basic earnings per common share:
Net earnings $0.61 $0.49
----------------------------------------------------------------------
Weighted average basic common shares
outstanding 396.3 393.4
======================================================================
Diluted earnings per common share:(1)
Net earnings $0.59 $0.48
----------------------------------------------------------------------
Weighted average diluted common shares
outstanding 412.2 405.7
======================================================================
Dividends declared per common share $0.06625 $0.05750
======================================================================
(1) Diluted earnings per common share is computed by dividing (i) net
earnings, after accounting for the difference between the
dividends on the ESOP preference stock and common stock and after
making adjustments for the incentive compensation plans by (ii)
Basic shares plus the additional shares that would be issued
assuming that all dilutive stock options are exercised and the
ESOP preference stock is converted into common stock. The dilutive
earnings adjustment was $1.4 million and $1.6 million for the
thirteen weeks ended April 3, 2004 and March 29, 2003,
respectively.
CVS CORPORATION
Consolidated Balance Sheets
(Unaudited)
April 3, January 3,
In millions, except share and per share 2004 2004
amounts
----------------------------------------------------------------------
Assets:
Cash and cash equivalents $651.5 $843.2
Accounts receivable, net 1,287.9 1,349.6
Inventories 3,923.4 4,016.5
Deferred income taxes 278.2 252.1
Other current assets 65.2 35.1
----------------------------------------------------------------------
Total current assets 6,206.2 6,496.5
Property and equipment, net 2,659.6 2,542.1
Goodwill 889.0 889.0
Intangible assets, net 400.9 403.7
Other assets 209.1 211.8
----------------------------------------------------------------------
Total assets $10,364.8 $10,543.1
======================================================================
Liabilities:
Accounts payable $1,635.1 $1,666.4
Accrued expenses 1,397.3 1,499.6
Short-term debt - -
Current portion of long-term debt 23.2 323.2
----------------------------------------------------------------------
Total current liabilities 3,055.6 3,489.2
Long-term debt 752.8 753.1
Deferred income taxes 41.6 41.6
Other long-term liabilities 234.1 237.4
Shareholders' equity:
Preference stock, series one ESOP
convertible, par value $1.00:
authorized 50,000,000 shares;
issued and outstanding
4,426,000 shares at April 3, 2004 and
4,541,000 shares at January 3, 2004 236.6 242.7
Common stock, par value $0.01: authorized
1,000,000,000 shares;
issued 411,005,000 shares at April 3, 2004 and
410,187,000 shares at January 3, 2004 4.1 4.1
Treasury stock, at cost: 14,061,000 shares
at April 3, 2004
and 14,803,000 shares at January 3, 2004 (407.3) (428.6)
Guaranteed ESOP obligation (163.2) (163.2)
Capital surplus 1,582.6 1,557.2
Retained earnings 5,064.8 4,846.5
Accumulated other comprehensive loss (36.9) (36.9)
----------------------------------------------------------------------
Total shareholders' equity 6,280.7 6,021.8
----------------------------------------------------------------------
Total liabilities and shareholders' equity $10,364.8 $10,543.1
======================================================================
CVS CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
13 Weeks Ended
April 3, March 29,
In millions 2004 2003
----------------------------------------------------------------------
Cash flows from operating activities:
Net earnings $244.6 $196.3
Adjustments required to reconcile net
earnings to net cash
provided by operating activities:
Depreciation and amortization 93.4 82.6
Deferred income taxes and other noncash
items (22.1) 5.1
Change in operating assets and liabilities,
providing/(requiring)
cash, net of effects from acquisitions:
Accounts receivable, net 61.7 (67.8)
Inventories 93.0 146.2
Other current assets (30.1) (2.3)
Other assets 7.2 2.0
Accounts payable (31.4) (89.1)
Accrued expenses (91.5) (88.7)
Other long-term liabilities (2.5) (0.7)
----------------------------------------------------------------------
Net cash provided by operating activities 322.3 183.6
======================================================================
Cash flows from investing activities:
Additions to property and equipment (195.7) (176.0)
Proceeds from sale-leaseback transactions 1.7 -
Acquisitions (net of cash acquired) and
investments (21.9) (52.1)
Proceeds from sale or disposal of assets 4.6 7.5
----------------------------------------------------------------------
Net cash used in investing activities (211.3) (220.6)
======================================================================
Cash flow from financing activities:
Reductions in short-term borrowings - (4.8)
Dividends paid (26.2) (22.6)
Reductions in long-term debt (300.2) (0.1)
Proceeds from exercise of stock options 23.7 12.2
----------------------------------------------------------------------
Net cash used in financing activities (302.7) (15.3)
======================================================================
Net decrease in cash and cash equivalents (191.7) (52.3)
Cash and cash equivalents at beginning of
period 843.2 700.4
----------------------------------------------------------------------
Cash and cash equivalents at end of period $651.5 $648.1
======================================================================
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