CVS Corporation Reports Second Quarter Diluted EPS of 49 Cents, Up 14%.Business Editors WOONSOCKET Woonsocket (w  nsŏk`ĭt, w n–), city (1990 pop. 43,877), Providence co., N R.I. , R.I.--(BUSINESS WIRE)--July 30, 2003
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 second quarter ended June June: see month. 28, 2003. 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 28, 2003 increased 7.6% to a record $6.44 billion, up from $5.99 billion during the second quarter of 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 quarter rose 5.5%, 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 7.5% 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 1.4%. The Company estimates the 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 shift had a positive impact of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 200 basis points on front-end same store sales for the thirteen-week period. Pharmacy same store sales were negatively impacted by approximately 200 basis points for the quarter by recent 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. introductions, which are being substituted for higher priced brand name drugs. Total pharmacy sales represented 68.9% of total company sales for the quarter. Third party prescription sales were 92.6% of pharmacy sales for the quarter. Net earnings for the second quarter increased 13.3% to $199.8 million or $0.49 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 $176.4 million or $0.43 per diluted share in the second quarter of 2002. The Company's second quarter results were driven by the growth in sales, and a significant improvement in gross margin, which primarily reflects the increased usage of generic Generic Describes the characteristics and/or experience of the total universe of a coupon of MBS sector type; that is, in contrast to a specific pool or collateral group, as in a specific CMO issue. pharmaceuticals and improvements in inventory losses. "This was an outstanding quarter that is clearly reflected in the sales growth and 14% increase in CVS' diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of . Pharmacy sales momentum continued to pick up throughout the quarter, while gross margin increased solidly," 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. "We also made excellent progress on the rollout of our Pharmacy Service Initiative as well as our AIM inventory initiative for pharmacy in-stock positions. Both are helping us gain market share," 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. growth." For the second quarter, CVS opened 26 new stores, closed 12 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. 24 others. As of June 28, 2003, CVS operated 4,113 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 (ET) 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 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.
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 December: see month. 28, 2002 and in its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 29, 2003.
CVS CORPORATION
Consolidated Condensed Statements of Operations
(Unaudited)
13 Weeks Ended 26 Weeks Ended
June 28, June 29, June 28, June 29,
In millions, except per share 2003 2002 2003 2002
amounts
--------- --------- ---------- ----------
Net sales $6,444.9 $5,989.5 $12,757.7 $11,960.2
Cost of goods sold, buying
and warehousing costs 4,811.1 4,508.4 9,518.4 8,985.4
--------- --------- ---------- ----------
Gross margin 1,633.8 1,481.1 3,239.3 2,974.8
Selling, general and
administrative expenses 1,211.4 1,104.0 2,403.0 2,226.2
Depreciation and amortization 85.4 78.8 168.0 153.8
--------- --------- ---------- ----------
Total operating expenses 1,296.8 1,182.8 2,571.0 2,380.0
--------- --------- ---------- ----------
Operating profit 337.0 298.3 668.3 594.8
Interest expense, net 12.7 13.8 25.3 26.9
--------- --------- ---------- ----------
Earnings before income tax
provision 324.3 284.5 643.0 567.9
Income tax provision 124.5 108.1 246.9 215.8
--------- --------- ---------- ----------
Net earnings 199.8 176.4 396.1 352.1
Preference dividends, net of
income tax benefit 3.7 3.7 7.3 7.4
--------- --------- ---------- ----------
Net earnings available to
common shareholders $196.1 $172.7 $388.8 $344.7
--------- --------- ---------- ----------
Basic earnings per common
share:
Net earnings $0.50 $0.44 $0.99 $0.88
--------- --------- ---------- ----------
Weighted average basic
common shares outstanding 394.0 392.0 393.7 391.8
--------- --------- ---------- ----------
Diluted earnings per common
share:(1)
Net earnings $0.49 $0.43 $0.97 $0.86
--------- --------- ---------- ----------
Weighted average diluted
common shares outstanding 406.6 406.1 406.2 405.3
--------- --------- ---------- ----------
Dividends declared per common
share $0.0575 $0.0575 $0.1150 $0.1150
--------- --------- ---------- ----------
(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 thirteen weeks ended June 28,
2003 and June 29, 2002 respectively. The dilutive earnings adjustment
was $3.2 million and $3.4 million for the twenty-six weeks ended June
28, 2003 and June 29, 2002 respectively.
CVS CORPORATION
Consolidated Condensed Balance Sheets
(Unaudited)
June 28, Dec. 28,
In millions, except share and per share amounts 2003 2002
-------- --------
Assets:
Cash and cash equivalents $566.8 $700.4
Accounts receivable, net 1,088.6 1,019.3
Inventories 3,800.7 4,013.9
Deferred income taxes 208.8 216.4
Other current assets 31.2 32.1
------- --------
Total current assets 5,696.1 5,982.1
Property and equipment, net 2,448.1 2,215.8
Goodwill 889.0 878.9
Intangible assets, net 365.0 351.4
Deferred income taxes 6.6 6.6
Other assets 215.9 210.5
------- --------
Total assets $9,620.7 $9,645.3
------- --------
Liabilities:
Accounts payable $1,463.6 $1,707.9
Accrued expenses 1,226.9 1,361.2
Short-term borrowings - 4.8
Current portion of long-term debt 332.1 32.0
------- --------
Total current liabilities 3,022.6 3,105.9
Long-term debt 775.9 1,076.3
Other long-term liabilities 258.2 266.1
Shareholders' equity:
Preference stock, series one ESOP convertible, par
value $1.00:
authorized 50,000,000 shares; issued and
outstanding 4,587,000 shares at June 28, 2003
and 4,685,000 shares at December 28, 2002 245.2 250.4
Common stock, par value $0.01: authorized
1,000,000,000 shares;
issued 409,591,000 shares at June 28, 2003 and
409,286,000 shares at December 28, 2002 4.1 4.1
Treasury stock, at cost: 15,440,000 shares at June
28, 2003 and 16,215,000 shares at December 28, 2002 (447.1) (469.5)
Guaranteed ESOP obligation (194.4) (194.4)
Capital surplus 1,545.6 1,546.6
Accumulated other comprehensive loss (44.6) (44.6)
Retained earnings 4,455.2 4,104.4
------- --------
Total shareholders' equity 5,564.0 5,197.0
------- --------
Total liabilities and shareholders' equity $9,620.7 $9,645.3
------- --------
CVS CORPORATION
Consolidated Condensed Statements of Cash Flows
(Unaudited)
26 Weeks Ended
June June
In millions 28, 29,
2003 2002
------ -------
Cash flows from operating activities:
Net earnings $396.1 $352.1
Adjustments required to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 168.0 153.8
Deferred income taxes and other noncash items 9.9 49.8
Change in operating assets and liabilities,
providing/(requiring) cash, net of effects from
acquisitions:
Accounts receivable, net (50.1) (37.9)
Inventories 217.8 42.6
Other current assets 8.1 4.3
Other assets (1.9) (8.7)
Accounts payable (244.2) (200.6)
Accrued expenses (154.3) (4.1)
Other long-term liabilities (4.4) (3.0)
------- -------
Net cash provided by operating activities 345.0 348.3
------- -------
Cash flows from investing activities:
Additions to property and equipment (406.7) (590.3)
Proceeds from sale-leaseback transactions 28.1 135.5
Acquisitions (net of cash) (68.0) (32.5)
Proceeds from sale or disposal of assets 3.8 13.4
------- -------
Net cash used in investing activities (442.8) (473.9)
------- -------
Cash flow from financing activities:
(Reductions in) additions to short-term borrowings (4.8) 252.6
Dividends paid (45.3) (45.0)
Reductions in long-term debt (0.3) (2.7)
Proceeds from exercise of stock options 14.6 17.7
------- -------
Net cash (used in) provided by financing activities (35.8) 222.6
------- -------
Net (decrease) increase in cash and cash equivalents (133.6) 97.0
Cash and cash equivalents at beginning of period 700.4 236.3
------- -------
Cash and cash equivalents at end of period $566.8 $333.3
------- -------
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