CVS Corporation Reports Record Fourth Quarter and Annual Results; Fourth Quarter Diluted EPS Increased to $0.64; 2003 Diluted EPS Increased 17.7% to $2.06.Business Editors/Retail Writers WOONSOCKET Woonsocket (w  nsŏk`ĭt, w n–), city (1990 pop. 43,877), Providence co., N R.I. , R.I.--(BUSINESS WIRE)--Feb. 12, 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 fourth quarter and the year ended January January: see month. 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 fourteen-week period ended January 3, 2004 increased 17.5% to a record $7.45 billion, up from $6.34 billion during the thirteen-week period ended December December: see month. 28, 2002. 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 fourteen-week period increased 7.4% over the comparable prior year fourteen-week 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 rose 9.1% 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 3.9%. For the fifty-three week period ended January 3, 2004, net sales increased 10.0% to a record $ 26.59 billion, compared to $24.18 billion during the fifty-two Adj. 1. fifty-two - being two more than fifty 52, lii cardinal - being or denoting a numerical quantity but not order; "cardinal numbers" week period ended December 28, 2002. Same store sales for the fifty-three week period increased 5.8% over the comparable prior year fifty-three week period, while pharmacy same store sales increased 8.1% and front-end same store sales increased 1.2%. Total pharmacy sales represented 67.8% of total company sales for the quarter and 68.8% for the year, while third party prescription sales were 93.3% of pharmacy sales for the quarter and 93.2% for the year. Net earnings for the fourteen-week fourth quarter increased 31.6% to $263.4 million or $0.64 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 $200.1 million or $0.49 per diluted share in the thirteen-week fourth quarter of 2002. The Company's fourth quarter results were driven by strong sales growth and a significant improvement in gross margin, which resulted from a reduction in inventory losses, a strong flu season
See product mix. . Net earnings for the year increased to $847.3 million, or $2.06 per diluted share, up 17.7% from the $1.75 per diluted share reported in 2002. The Company's results for the year were better than anticipated primarily due to the unusual severity of the flu season and the results of the 53rd week, which surpassed original expectations. The Company estimates that the 53rd week added approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.05 per diluted share, or $0.02 per diluted share more than original expectations. "2003 was the best year in our 40-year history, with sales hitting an all-time all-time adj. Exceeding all others up to the present time: an all-time speed skating record. all-time Adjective Informal high of $26.6 billion. Our new store expansion program is having an increasingly positive impact on our total revenues as we continue to add more net new stores," 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 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. of CVS Corporation. "Across the Company, we have established tremendous momentum as we work to make CVS the easiest pharmacy for customers to use." "I am very pleased with our financial performance, which was characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by significant gross margin improvement and solid cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. , despite planned investments to drive future growth," continued Mr. Ryan Ryan may refer to: Places
For the year, CVS opened 150 new stores, closed 58 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. 125 others. As of January 3, 2004, CVS operated 4,179 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). . As reported in a separate press release today, January sales increased 6.9% to $2.04 billion, compared to $1.91 billion in the prior year period. January same store sales rose 5.6% while pharmacy same store sales increased 8.2% and front-end same store sales were nearly flat to last year. The Company will be holding a conference call today for the investment community at 8:30 a.m. (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. Celebrating 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 A Pharmacy Benefit Manager (PBM) is a third party administrator of prescription drug programs. They are primarily responsible for processing and paying prescription drug claims. and specialty pharmacy subsidiary, PharmaCare
Management Services. General information about CVS is available through
the Investor Relations portion of the Company's Web site, 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 December 28, 2002 and its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the third quarter ended September September: see month. 27, 2003.
CVS CORPORATION
Consolidated Statements of Operations
(Unaudited)
Quarter Ended Fiscal Year Ended
Jan. 3, Dec. 28, Jan. 3, Dec. 28,
2004 2002 2004 2002
In millions, except (14 weeks) (13 weeks) (53 weeks) (52 weeks)
per share amounts
----------------------------------------------------------------------
Net sales $ 7,452.2 $ 6,344.9 $26,588.0 $24,181.5
Cost of goods sold,
buying and warehousing
costs 5,487.1 4,732.2 19,725.0 18,112.7
----------------------------------------------------------------------
Gross margin 1,965.1 1,612.7 6,863.0 6,068.8
Selling, general and
administrative
expenses 1,438.6 1,198.4 5,097.7 4,552.3
Depreciation and
amortization 87.9 79.4 341.7 310.3
----------------------------------------------------------------------
Total operating
expenses 1,526.5 1,277.8 5,439.4 4,862.6
----------------------------------------------------------------------
Operating profit 438.6 334.9 1,423.6 1,206.2
Interest expense, net 11.0 12.1 48.1 50.4
----------------------------------------------------------------------
Earnings before income
tax provision 427.6 322.8 1,375.5 1,155.8
Income tax provision 164.2 122.7 528.2 439.2
----------------------------------------------------------------------
Net earnings 263.4 200.1 847.3 716.6
Preference dividends,
net of income tax
benefit 3.6 3.7 14.6 14.8
----------------------------------------------------------------------
Net earnings available
to common shareholders $ 259.8 $ 196.4 $ 832.7 $ 701.8
======================================================================
Basic earnings per
common share:
Net earnings $ 0.66 $ 0.50 $ 2.11 $ 1.79
----------------------------------------------------------------------
Weighted average
basic common shares
outstanding 395.2 392.9 394.4 392.3
======================================================================
Diluted earnings per
common share: (1)
Net earnings $ 0.64 $ 0.49 $ 2.06 $ 1.75
----------------------------------------------------------------------
Weighted average
diluted common
shares outstanding 410.8 405.4 407.7 405.3
======================================================================
Dividends declared per
common share $ 0.0575 $ 0.0575 $ 0.2300 $ 0.2300
======================================================================
(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 $1.6 million and $1.7 million for the
fourteen weeks ended January 3, 2004 and thirteen weeks ended
December 28, 2002 respectively. The dilutive earnings adjustment
was $6.3 million and $6.7 million for the fifty-three weeks ended
January 3, 2004 and the fifty-two weeks ended December 28, 2002,
respectively.
CVS CORPORATION
Consolidated Balance Sheets
(Unaudited)
In millions, except share and per share Jan. 3, Dec. 28,
amounts 2004 2002
----------------------------------------------------------------------
Assets:
Cash and cash equivalents $ 843.2 $ 700.4
Accounts receivable, net 1,349.6 1,019.3
Inventories 4,016.5 4,013.9
Deferred income taxes 252.1 216.4
Other current assets 35.1 32.1
----------------------------------------------------------------------
Total current assets 6,496.5 5,982.1
Property and equipment, net 2,542.1 2,215.8
Goodwill 889.0 878.9
Intangible assets, net 403.7 351.4
Deferred income taxes - 6.6
Other assets 211.8 210.5
----------------------------------------------------------------------
Total assets $ 10,543.1 $ 9,645.3
======================================================================
Liabilities:
Accounts payable $ 1,666.4 $ 1,707.9
Accrued expenses 1,499.6 1,361.2
Short-term borrowings - 4.8
Current portion of long-term debt 323.2 32.0
----------------------------------------------------------------------
Total current liabilities 3,489.2 3,105.9
Long-term debt 753.1 1,076.3
Deferred income taxes 41.6 -
Other long-term liabilities 237.4 266.1
Shareholders' equity:
Preference stock, series one ESOP
convertible, par value $1.00:
authorized 50,000,000 shares; issued
and outstanding 4,541,000 shares at
January 3, 2004 and 4,685,000 shares at
December 28, 2002 242.7 250.4
Common stock, par value $0.01:
authorized 1,000,000,000 shares; issued
410,187,000 shares at January 3, 2004
and 409,286,000 shares at December 28,
2002 4.1 4.1
Treasury stock, at cost: 14,803,000
shares at January 3, 2004 and
16,215,000 shares at December 28, 2002 (428.6) (469.5)
Guaranteed ESOP obligation (163.2) (194.4)
Capital surplus 1,557.2 1,546.6
Accumulated other comprehensive loss (36.9) (44.6)
Retained earnings 4,846.5 4,104.4
----------------------------------------------------------------------
Total shareholders' equity 6,021.8 5,197.0
----------------------------------------------------------------------
Total liabilities and shareholders' equity $ 10,543.1 $ 9,645.3
======================================================================
CVS CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
Fiscal Year Ended
Jan. 3, Dec. 28,
2004 2002
In millions (53 weeks) (52 weeks)
----------------------------------------------------------------------
Cash flows from operating activities:
Net earnings $ 847.3 $ 716.6
Adjustments required to reconcile net
earnings to net cash provided by
operating activities:
Depreciation and amortization 341.7 310.3
Deferred income taxes and other
noncash items 41.1 71.8
Change in operating assets and
liabilities, providing/(requiring)
cash, net of effects from acquisitions:
Accounts receivable, net (311.1) (53.1)
Inventories 2.1 (95.3)
Other current assets (3.0) 12.5
Other assets (0.4) (35.3)
Accounts payable (41.5) 172.0
Accrued expenses 116.5 105.0
Other long-term liabilities (23.8) 0.3
----------------------------------------------------------------------
Net cash provided by operating activities 968.9 1,204.8
======================================================================
Cash flows from investing activities:
Additions to property and equipment (1,121.7) (1,108.8)
Proceeds from sale-leaseback
transactions 487.8 448.8
Acquisitions (net of cash acquired) and
investments (133.1) (93.5)
Proceeds from sale or disposal of assets 13.4 17.7
----------------------------------------------------------------------
Net cash used in investing activities (753.6) (735.8)
======================================================================
Cash flow from financing activities:
Reductions in short-term borrowings (4.8) (230.9)
Dividends paid (105.2) (104.9)
Additions to long-term debt - 300.0
Reductions in long-term debt (0.8) (3.1)
Proceeds from exercise of stock options 38.3 34.0
----------------------------------------------------------------------
Net cash used in financing activities (72.5) (4.9)
======================================================================
Net increase in cash and cash equivalents 142.8 464.1
Cash and cash equivalents at beginning of
period 700.4 236.3
----------------------------------------------------------------------
Cash and cash equivalents at end of period $ 843.2 $ 700.4
======================================================================
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