CVS Corporation Reports Results for Fourth Quarter and 2001.Business Editors WOONSOCKET Woonsocket (w  nsŏk`ĭt, w n–), city (1990 pop. 43,877), Providence co., N R.I. , R.I.--(BUSINESS WIRE)--Feb. 5, 2002
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), America's #1 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. , today announced sales and earnings for the fourth quarter and the year ended December December: see month. 29, 2001. 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 fourth quarter ended December 29, 2001 increased 8.4% to $6.0 billion, up from $5.5 billion during the fourth quarter of 2000. 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 for the quarter rose 7.5%, while pharmacy same store sales rose 10.1% 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 3.1%. For the year, net sales increased 10.7% to $22.2 billion, compared to $20.1 billion during 2000. Same store sales for the year rose 8.6%, while pharmacy same store sales rose 13.0% and front-end same store sales increased 1.2%. Pharmacy sales were 65% of total sales for the quarter and 66% for the year. Third party prescription sales were 91% of pharmacy sales for both the quarter and the year. Excluding the Nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. Items discussed below, comparable net earnings for the fourth quarter decreased 53.1% to $98.2 million, or $0.24 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 to net earnings of $209.5 million, or $0.51 per diluted share, during the fourth quarter of 2000. Comparable net earnings for the year decreased 12.7% to $641.6 million, or $1.56 per diluted share, compared to net earnings of $734.5 million, or $1.80 per diluted share last year. "While 2001 was a challenging year, our fourth quarter sales trends marked the beginning of improved momentum, particularly in the front end of our business. We had an excellent holiday selling season," 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. During the fourth quarter of 2001, the Company recorded a $352.5 million ($230.5 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. ) nonrecurring charge Nonrecurring Charge An expense occurring only once on a company's financial statement. Notes: An extraordinary item is an example of a nonrecurring charge. Also known as "nonrecurring item". for 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). and asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. costs associated with a comprehensive plan designed to streamline operations and enhance operating efficiencies. The major components of the plan are as follows: -- Closing 229 stores; -- Closing ProCare's Columbus, Ohio mail order facility; -- Closing the Henderson, North Carolina distribution center; -- Closing two satellite office facilities; and -- Staff reductions related to these closings and other streamlining initiatives. During 2001, the Company received $50.3 million of settlement proceeds from various lawsuits, of which the Company elected to contribute $46.8 million to the CVS Charitable Trust The arrangement by which real or Personal Property given by one person is held by another to be used for the benefit of a class of persons or the general public. , Inc. to fund future charitable giving. The net effect of these items was a $2.1 million increase in net earnings in 2001. The third quarter of 2000 benefited from a $19.2 million ($11.5 million after-tax) nonrecurring gain from settlement proceeds received from a class action lawsuit class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax against certain manufacturers of brand name prescription drugs prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, . The litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. proceeds received in 2000 and the litigation proceeds received and charitable contribution charitable contribution n. in taxation, a contribution to an organization which is officially created for charitable, religious, educational, scientific, artistic, literary, or other good works. made in 2001 combined with the restructuring and asset impairment charge discussed above make up the "Nonrecurring Items". Including the impact of the Nonrecurring Items, the Company incurred a net loss for the fourth quarter of 2001 of $130.2 million, or $0.34 per diluted share, compared to $290.5 million, or $0.51 per diluted share in the fourth quarter of 2000. For the year, net earnings were $413.2 million, or $1.00 per diluted share, compared to $746.0 million, or $1.83 per diluted share, in 2000. Mr. Ryan Ryan may refer to: Places
Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. prospects. While 2002 will be a transition year as the benefits of our actions take hold, our plan is designed to generate sustainable earnings growth of 12-15% longer term." During the fourth quarter, CVS opened 67 new stores, closed 11 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. 40 others. For the year, CVS opened 126 new stores, closed 68 and relocated 122 others. "We opened 43 stores in new markets in 2001 and plan to increase this amount to approximately 75 in 2002. These stores are in some of the fastest growing drugstore markets including Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. ; Tampa Tampa (tăm`pə), city (1990 pop. 280,015), seat of Hillsborough co., W Fla., a port of entry with an impressive harbor on Tampa Bay; inc. 1855. and Orlando, Florida The city of Orlando is a major city in central Florida and is the county seat of Orange County, Florida. According to the 2000 census, the city population was 185,951. A 2006 U.S. ; Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. and Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the and Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. . Early results from these markets have exceeded expectations and strengthened our view that there is significant opportunity for growth in these and other new markets," Ryan said. As reported in a separate press release today, January sales increased 9.6% to $1.78 billion, compared to $1.62 billion in the prior year period. January same store sales rose 7.9%, while pharmacy same store sales increased 10.3% and front-end same store sales increased 3.3%. 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 and yearly results. The call will be simulcast on the Company's web site for all interested parties. To access the webcast, visit the Company's web site at http://www.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 of the call which will be available for a one-week period following the call. CVS is America's #1 pharmacy dispensing dispensing provision of drugs or medicines as set out properly on a lawful prescription. A prescription can only be filled, the drugs supplied, by a registered pharmacist, veterinarian, dentist or member of the medical profession. prescriptions in more stores than any other retailer. With annual revenues exceeding $22 billion, CVS has created innovative approaches to serve the healthcare needs of all of our customers through its more than 4,100 CVS/pharmacy stores; CVS ProCare, its specialty pharmacy business; CVS.com, its online pharmacy  This article or section may deal primarily with the U.S. and may not present a worldwide view. ; and PharmaCare, 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. company.
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 30, 2000 and in its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended September 29, 2001.
CVS CORPORATION
Consolidated Statements of Operations
(Unaudited)
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13 Weeks Ended 52 Weeks Ended
December December December December
In millions, except per 29, 30, 29, 30,
share amounts 2001 2000 2001 2000
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Net sales $5,950.5 $5,488.8 $22,241.4 $20,087.5
Cost of goods sold, buying
and warehousing costs 4,543.1 4,060.3 16,550.4 14,725.8
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Gross margin 1,407.4 1,428.5 5,691.0 5,361.7
Selling, general and
administrative
expenses(2)(3) 1,499.1 982.9 4,599.6 3,742.4
Depreciation and
amortization 81.3 76.4 320.8 296.6
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Total operating expenses 1,580.4 1,059.3 4,920.4 4,039.0
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Operating (loss) profit (173.0) 369.2 770.6 1,322.7
Interest expense, net 14.1 20.1 61.0 79.3
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(Loss) earnings before
income tax (benefit)
provision (187.1) 349.1 709.6 1,243.4
Income tax (benefit)
provision (56.9) 139.6 296.4 497.4
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Net (loss) earnings (130.2) 209.5 413.2 746.0
Preference dividends, net of
income tax benefit 3.6 3.3 14.7 14.6
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Net (loss) earnings
available to common
shareholders $ (133.8) $ 206.2 $ 398.5 $ 731.4
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Basic earnings per common
share:
Net (loss) earnings $ (0.34) $ 0.53 $ 1.02 $ 1.87
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Weighted average basic
common shares
outstanding 390.8 391.6 392.2 391.0
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Diluted earnings per common
share(1)(2)
Net (loss) earnings $ (0.34) $ 0.51 $ 1.00 $ 1.83
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Weighted average diluted
common shares
outstanding 390.8 409.8 408.3 408.0
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Dividends declared per
common share $ 0.0575 $ 0.0575 $ 0.2300 $ 0.2300
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(1) In accordance with Statement of Financial Accounting Standards
No. 128, "Earnings per Share", the assumed conversion of ESOP
preference stock and outstanding stock options were excluded
from the diluted earnings per common share calculation in the
fourth quarter of 2001 since their effect would be
antidilutive. This results in diluted earnings per common
share equal to basic earnings per common share for the fourth
quarter of 2001.
(2) During the fourth quarter of 2001, the Company recorded a
$352.5 million ($230.5 million after-tax) charge for
restructuring and asset impairment costs. The charge is
comprised of $5.7 million recorded in cost of goods sold and
$346.8 million recorded in total operating expenses. Due to
antidilution in the fourth quarter of 2001 (discussed in
footnote 1 above), the charge has a $0.58 impact on the fourth
quarter and a $0.56 impact on the year. During 2001, the
Company received $50.3 million of additional settlement
proceeds from various lawsuits, of which the Company elected
to contribute $46.8 million to the CVS Charitable Trust, Inc.
to fund future charitable giving. The net effect of these
items was a $2.1 million increase in net earnings in 2001.
Excluding these nonrecurring items, comparable diluted
earnings per common share was $0.24 for the fourth quarter of
2001 and $1.56 for the year.
(3) The 52 weeks ended December 30, 2000 include a $19.2 million
($11.5 million after-tax), or $0.03 per diluted share,
nonrecurring gain in total operating expenses representing
partial payment of the Company's share of the settlement
proceeds from a class action lawsuit against manufactures of
brand name prescription drugs.
CVS CORPORATION
Consolidated Balance Sheets
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(Unaudited)
December 29, December 30,
In millions, except share and per share amounts 2001 2000
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Assets:
Cash and cash equivalents $ 236.3 $ 337.3
Accounts receivable, net 966.2 824.5
Inventories 3,918.6 3,557.6
Deferred income taxes 242.6 124.9
Other current assets 90.4 92.3
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Total current assets 5,454.1 4,936.6
Property and equipment, net 1,847.3 1,742.1
Goodwill, net 827.0 818.5
Other assets 499.8 452.3
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Total assets $ 8,628.2 $ 7,949.5
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Liabilities:
Accounts payable $ 1,535.8 $ 1,351.5
Accrued expenses 1,267.9 1,001.4
Short-term borrowings 235.8 589.6
Current portion of long-term debt 26.4 21.6
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Total current liabilities 3,065.9 2,964.1
Long-term debt 810.4 536.8
Deferred income taxes 35.3 28.0
Other long-term liabilities 149.7 116.0
Shareholders' equity:
Preference stock, series one ESOP convertible,
par value $1.00: authorized 50,000,000
shares; issued and outstanding 4,887,000
shares at December 29, 2001 and 5,006,000
shares at December 30, 2000 261.2 267.5
Common stock, par value $0.01: authorized
1,000,000,000 shares; issued 408,532,000
shares at December 29, 2001 and 407,395,000
shares at December 30, 2000 4.1 4.1
Treasury stock, at cost: 17,645,000 shares
at December 29, 2001 and 15,073,000 shares
at December 30, 2000 (510.8) (404.9)
Guaranteed ESOP obligation (219.9) (240.6)
Capital surplus 1,539.6 1,493.8
Retained earnings 3,492.7 3,184.7
---------------------------------------------------------------------
Total shareholders' equity 4,566.9 4,304.6
---------------------------------------------------------------------
Total liabilities and shareholders' equity $ 8,628.2 $ 7,949.5
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CVS CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
---------------------------------------------------------------------
52 Weeks Ended
December 29, December 30,
In millions 2001 2000
---------------------------------------------------------------------
Cash flows from operating activities:
Net earnings $ 413.2 $ 746.0
Adjustments required to reconcile net
earnings to net cash provided by operating
activities:
Restructuring charge 352.5 --
Depreciation and amortization 320.8 296.6
Deferred income taxes and other noncash
items (83.5) 43.8
Change in operating assets and liabilities,
providing/(requiring) cash, net of
effects from acquisitions:
Accounts receivable, net (141.7) (86.7)
Inventories (366.8) (98.1)
Other current assets 4.1 7.0
Other assets (13.9) (50.1)
Accounts payable 184.4 (133.6)
Accrued expenses 11.6 59.6
Other long-term liabilities (0.1) (4.3)
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Net cash provided by operating activities 680.6 780.2
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Cash flows from investing activities:
Additions to property and equipment (713.6) (695.3)
Proceeds from sale-leaseback transactions 323.3 299.3
Acquisitions (net of cash acquired) and
investments (159.1) (263.3)
Proceeds from sale or disposal of assets 12.6 18.8
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Net cash used in investing activities (536.8) (640.5)
---------------------------------------------------------------------
Cash flow from financing activities:
Additions to (reductions in) long-term debt 295.9 (0.9)
Proceeds from exercise of stock options 47.3 97.8
(Reductions in) additions to short-term
borrowings (353.8) 138.7
Dividends paid (105.2) (104.8)
Purchase of treasury shares (129.0) (163.2)
---------------------------------------------------------------------
Net cash used in financing activities (244.8) (32.4)
---------------------------------------------------------------------
Net (decrease) increase in cash and cash
equivalents (101.0) 107.3
Cash and cash equivalents at beginning of
period 337.3 230.0
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Cash and cash equivalents at end of period $ 236.3 $ 337.3
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