CVS Corporation Reports Results for Second Quarter.Business Editors WOONSOCKET Woonsocket (w  nsŏk`ĭt, w n–), city (1990 pop. 43,877), Providence co., N R.I. , R.I.--(BUSINESS WIRE)--July 31, 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 second quarter ended June June: see month. 29, 2002. Net earnings for the second quarter decreased 10.9% to $176.4 million, or $0.43 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 $198.0 million, or $0.48 per diluted share, during the second quarter of 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 second quarter ended June 29, 2002 increased 9.0% to a record $6.0 billion, up from $5.5 billion during the second quarter of 2001. 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 8.6%, while pharmacy same store sales rose 12.3% 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 1.7%. Quarterly sales were negatively impacted by an early Easter Easter [A.S. Eastre, name of a spring goddess], chief Christian feast, commemorating the resurrection of Jesus after his crucifixion. In the West, Easter is celebrated on the Sunday following the full moon next after the vernal equinox (see calendar); thus, it (March 31st this year versus April 15th last year), which shifted holiday sales from the second quarter to the first quarter. Adjusting for the Easter impact, second quarter same store sales would have increased 9.4%, while front-end same store sales would have increased 4.1%. Pharmacy sales were 67.9% of total sales for the quarter. 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 92.0% of pharmacy sales for the quarter. "Our second quarter results were driven by strong revenue growth and solid expense control," 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. "Our sales performance reflects sequential One after the other in some consecutive order such as by name or number. quarterly improvement in our pharmacy business, and healthy growth across all front-end categories as we continue to gain market share. I am very pleased with the momentum in our business." Selling, general and administrative expenses for the quarter were 19.8% of net sales, an improvement of 57 basis points compared to 20.3% of net sales in the second quarter of 2001. "We continue to reduce costs through improved operational efficiencies, particularly at the store level, while at the same time remaining focused on enhancing customer service," added Mr. Ryan Ryan may refer to: Places
During the second quarter, CVS opened 27 new stores, closed 16 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. 26 others. As of June 29, 2002, CVS operated 4,002 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). . 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://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 (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. 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 approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 4,000 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. stores; CVS ProCare ProCare is a service offered by the Apple Store that provides additional services from the Genius Bar. ProCare is an annual membership costing US$99 that provides the customer with various services to expedite the Genius Bar experience in addition to features such as backup consultation , 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 may contain 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 December: see month. 29, 2001.
CVS CORPORATION
Consolidated Statements of Operations
(Unaudited)
13 Weeks Ended 26 Weeks Ended
In millions, except June 29, June 30, June 29, June 30,
per share amounts 2002 2001 2002 2001
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Net sales $ 5,989.5 $ 5,494.2 $ 11,960.2 $ 10,880.1
Cost of goods sold,
buying and
warehousing costs 4,508.4 4,035.8 8,985.4 7,968.3
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Gross margin 1,481.1 1,458.4 2,974.8 2,911.8
Selling, general and
administrative
expenses 1,104.0 1,036.2 2,226.2 2,029.6
Depreciation and
amortization 78.8 80.2 153.8 158.8
----------------------------------------------------------------------
Total operating
expenses 1,182.8 1,116.4 2,380.0 2,188.4
----------------------------------------------------------------------
Operating profit 298.3 342.0 594.8 723.4
Interest expense, net 13.8 15.1 26.9 30.8
----------------------------------------------------------------------
Earnings before
income tax provision 284.5 326.9 567.9 692.6
Income tax provision 108.1 128.9 215.8 272.9
----------------------------------------------------------------------
Net earnings 176.4 198.0 352.1 419.7
Preference dividends,
net of income tax
benefit 3.7 3.7 7.4 7.4
----------------------------------------------------------------------
Net earnings
available to common
shareholders $ 172.7 $ 194.3 $ 344.7 $ 412.3
----------------------------------------------------------------------
Basic earnings
per common share:
Net earnings $ 0.44 $ 0.49 $ 0.88 $ 1.05
----------------------------------------------------------------------
Weighted average
basic common
shares outstanding 392.0 393.5 391.8 393.2
----------------------------------------------------------------------
Diluted earnings
per common share:
Net earnings $ 0.43 $ 0.48 $ 0.86 $ 1.02
----------------------------------------------------------------------
Weighted average
diluted common
shares outstanding 406.1 411.1 405.3 411.2
----------------------------------------------------------------------
Dividends declared
per common share $ 0.0575 $ 0.0575 $ 0.1150 $ 0.1150
----------------------------------------------------------------------
Effective in fiscal 2002, CVS adopted Statement of Financial
Accounting Standard No. 142, "Goodwill and Other Intangible Assets."
As a result of the adoption, goodwill and other indefinite-lived
intangible assets are no longer being amortized. Amortization of these
assets for the thirteen and twenty-six weeks ended June 30, 2001
amounted to $8.0 million and $15.6 million, respectively. Removing
this amortization expense and its related tax effect would have
resulted in net earnings of $205.4 million, or $0.50 per diluted
share, for the thirteen weeks ended June 30, 2001 and $433.8 million
or $1.05 per share for the twenty six weeks ended June 30, 2001.
CVS CORPORATION
Consolidated Balance Sheets
(Unaudited)
In millions, except share June 29, Dec. 29,
and per share amounts 2002 2001
----------------------------------------------------------------------
Assets:
Cash and cash equivalents $ 333.3 $ 236.3
Accounts receivable, net 1,004.1 966.2
Inventories 3,876.0 3,918.6
Deferred income taxes 204.5 242.6
Other current assets 43.6 46.2
----------------------------------------------------------------------
Total current assets 5,461.5 5,409.9
Property and equipment, net 2,152.2 1,847.3
Goodwill, net 878.1 874.9
Intangible assets, net 319.5 318.0
Other assets 184.2 178.1
----------------------------------------------------------------------
Total assets $ 8,995.5 $ 8,628.2
----------------------------------------------------------------------
Liabilities:
Accounts payable $ 1,335.2 $ 1,535.8
Accrued expenses 1,263.0 1,267.9
Short-term borrowings 488.4 235.8
Current portion of long-term debt 26.3 26.4
----------------------------------------------------------------------
Total current liabilities 3,112.9 3,065.9
Long-term debt 807.9 810.4
Deferred income taxes 35.3 35.3
Other long-term liabilities 146.7 149.7
Shareholders' equity:
Preference stock, series one ESOP
convertible, par value $1.00: authorized
50,000,000 shares; issued and outstanding
4,745,000 shares at June 29, 2002 and
4,887,000 shares at December 29, 2001 253.6 261.2
Common stock, par value $0.01: authorized
1,000,000,000 shares; issued 408,901,000
shares at June 29, 2002 and 408,532,000
shares at December 29, 2001 4.1 4.1
Treasury stock, at cost: 16,826,000 shares
at June 29, 2002 and 17,645,000 shares at
December 29, 2001 (487.2) (510.8)
Guaranteed ESOP obligation (219.9) (219.9)
Capital surplus 1,542.4 1,539.6
Retained earnings 3,799.7 3,492.7
----------------------------------------------------------------------
Total shareholders' equity 4,892.7 4,566.9
----------------------------------------------------------------------
Total liabilities and shareholders' equity $ 8,995.5 $ 8,628.2
----------------------------------------------------------------------
CVS CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
26 Weeks Ended
June 29, June 30,
In millions 2002 2001
----------------------------------------------------------------------
Cash flows from operating activities:
Net earnings $ 352.1 $ 419.7
Adjustments required to reconcile net
earnings to net cash provided by operating
activities:
Depreciation and amortization 153.8 158.8
Deferred income taxes and other
noncash items 49.8 2.5
Change in operating assets and liabilities,
providing/(requiring) cash, net of effects
from acquisitions:
Accounts receivable, net (37.9) (109.6)
Inventories 42.6 (362.4)
Other current assets 4.3 (4.3)
Other assets (8.7) (3.8)
Accounts payable (200.6) 72.2
Accrued expenses (4.1) (47.4)
Other long-term liabilities (3.0) 1.3
----------------------------------------------------------------------
Net cash provided by operating activities 348.3 127.0
----------------------------------------------------------------------
Cash flows from investing activities:
Additions to property and equipment (590.3) (275.8)
Proceeds from sale-leaseback transactions 135.5 --
Acquisitions (net of cash acquired) and
investments (32.5) (99.0)
Proceeds from sale or disposal of assets 13.4 11.3
----------------------------------------------------------------------
Net cash used in investing activities (473.9) (363.5)
----------------------------------------------------------------------
Cash flow from financing activities:
Additions to (reductions in) short-term
borrowings 252.6 (110.1)
Dividends paid (45.0) (45.2)
(Reductions in) additions to
long-term debt (2.7) 296.4
Proceeds from exercise of stock options 17.7 31.9
----------------------------------------------------------------------
Net cash provided by financing activities 222.6 173.0
----------------------------------------------------------------------
Net increase (decrease) in cash and
cash equivalents 97.0 (63.5)
Cash and cash equivalents at beginning
of period 236.3 337.3
----------------------------------------------------------------------
Cash and cash equivalents at end of period $ 333.3 $ 273.8
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