CVS Corporation Reports Third Quarter Diluted EPS of 40 Cents; EPS Up 30% Excluding Net Nonrecurring Gain.Business Editors WOONSOCKET Woonsocket (w  nsŏk`ĭt, w n–), city (1990 pop. 43,877), Providence co., N R.I. , R.I.--(BUSINESS WIRE)--Oct. 30, 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 record net earnings of $164.4 million or $0.40 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 for the third quarter ended September September: see month. 28, 2002, an increase of 33% compared with net earnings of $123.7 million or $0.30 per diluted share in the third quarter of 2001. Net earnings for the third quarter included a $4.4 million ($0.01 per diluted share) net gain from nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. 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. items recorded during the quarter. Excluding the effect of this nonrecurring net litigation gain, earnings per share increased 30% to $0.39 per diluted share. 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 third quarter of 2002 increased 8.6% to $5.9 billion, up from $5.4 billion during the third 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 8.4%, while pharmacy same store sales rose 12.0% 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 1.3%. Pharmacy same store sales were negatively impacted by approximately 190 basis points due to recent generic introductions, which are being substituted for higher priced brand name drugs. Pharmacy sales were 68.4% of total sales, while third party prescription sales were 92.1% of pharmacy sales for the quarter. "We are very pleased with our third quarter performance, which exceeded expectations," 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 results were driven by healthy sales growth, and a significant sequential improvement in our gross margin trend, which reflects the increasing usage of generic pharmaceuticals and improvements in inventory shrinkage Shrinkage The amount by which inventory on hand is shorter than the amount of inventory recorded. Notes: The missing inventory could be due to theft, damage, or book keeping errors. . In addition, our year-over-year improvement in total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. as a percentage of sales was the best we have experienced since 1999, despite increased advertising costs," stated Ryan Ryan may refer to: Places
Excluding the $7.0 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta ($4.4 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. ) net gain from nonrecurring litigation items, total operating expenses were 20.6% of net sales for the third quarter of 2002, an improvement of approximately 70 basis points compared to 21.3% of net sales in the third quarter of 2001. The improvement primarily resulted from the continued benefits being realized from the 2001 strategic 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). , the efficiencies gained from the EPIC pharmacy system rolled out last year, and the termination of goodwill amortization as a result of the adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 142. For the fourth quarter 2002, the Company expects earnings per share to be in the range of 46 to 48 cents per diluted share. For the year, this would result in growth in 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 of 10% to 12%. During the third quarter of 2002, CVS opened 34 new stores, closed 9 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. 16 others. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , CVS opened 108 new stores, closed 272 stores (224 of which related to the strategic restructuring) and relocated 71. As of September 28, 2002, CVS operated 4,027 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 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 over 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 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 29, 2001.
CVS CORPORATION
Consolidated Statements of Operations
(Unaudited)
----------------------------------------------------------------------
13 Weeks Ended 39 Weeks Ended
Sept. Sept. Sept. Sept.
In millions, except per share 28, 29, 28, 29,
amounts 2002 2001 2002 2001
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Net sales $5,876.4 $5,410.8 $17,836.7 $16,290.9
Cost of goods sold, buying and
warehousing costs 4,395.1 4,039.0 13,380.6 12,007.2
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Gross margin 1,481.3 1,371.8 4,456.1 4,283.7
Selling, general and
administrative expenses 1,127.7 1,070.9 3,353.9 3,100.6
Depreciation and amortization 77.1 80.7 230.9 239.5
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Total operating expenses 1,204.8 1,151.6 3,584.8 3,340.1
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Operating profit 276.5 220.2 871.3 943.6
Interest expense, net 11.4 16.1 38.3 46.9
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Earnings before income tax
provision 265.1 204.1 833.0 896.7
Income tax provision 100.7 80.4 316.5 353.2
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Net earnings 164.4 123.7 516.5 543.5
Preference dividends, net of
income tax benefit 3.7 3.7 11.1 11.1
----------------------------------------------------------------------
Net earnings available to common
shareholders $ 160.7 $ 120.0 $ 505.4 $ 532.4
----------------------------------------------------------------------
Basic earnings per common share:
Net earnings $ 0.41 $ 0.31 $ 1.29 $ 1.36
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Weighted average basic common
shares outstanding 392.7 391.5 392.1 392.6
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Diluted earnings per common
share:
Net earnings $ 0.40 $ 0.30 $ 1.26 $ 1.32
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Weighted average diluted common
shares outstanding 405.4 406.0 405.4 409.7
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Dividends declared per common
share $ 0.0575 $ 0.0575 $ 0.1725 $ 0.1725
----------------------------------------------------------------------
During the third quarter ended September 28, 2002, the Company
recorded a $7.0 million pre-tax ($4.4 million after-tax), or $0.01 per
basic and diluted share nonrecurring net litigation gain representing
the Company's share of settlement proceeds from certain anti-trust
lawsuits in which the Company was either a co-plaintiff or class
action member, offset by the costs associated with the Company's
settlement of certain lawsuits in which the Company was the defendant.
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 thirty-nine weeks ended September 29, 2001
amounted to $8.8 million and $24.4 million, respectively. Removing
this amortization expense and its related tax effect would have
resulted in net earnings of $131.7 million, or $0.32 per diluted
share, for the thirteen weeks ended September 29, 2001 and $565.5
million or $1.37 per share for the thirty-nine weeks ended September
29, 2001.
CVS CORPORATION
Consolidated Balance Sheets
----------------------------------------------------------------------
(Unaudited)
September December
28, 29,
In millions, except share and per share amounts 2002 2001
----------------------------------------------------------------------
Assets:
Cash and cash equivalents $ 217.3 $ 236.3
Accounts receivable, net 986.3 966.2
Inventories 3,983.0 3,918.6
Deferred income taxes 200.0 242.6
Other current assets 45.1 46.2
----------------------------------------------------------------------
Total current assets 5,431.7 5,409.9
Property and equipment, net 2,201.1 1,847.3
Goodwill, net 877.7 874.9
Intangible assets, net 342.3 318.0
Other assets 201.0 178.1
----------------------------------------------------------------------
Total assets $ 9,053.8 $ 8,628.2
----------------------------------------------------------------------
Liabilities:
Accounts payable $ 1,560.8 $ 1,535.8
Accrued expenses 1,270.1 1,267.9
Short-term borrowings 158.2 235.8
Current portion of long-term debt 26.3 26.4
----------------------------------------------------------------------
Total current liabilities 3,015.4 3,065.9
Long-term debt 807.7 810.4
Deferred income taxes 35.3 35.3
Other long-term liabilities 144.5 149.7
Shareholders' equity:
Preference stock, series one ESOP convertible,
par value $1.00: authorized 50,000,000
shares; issued and outstanding 4,716,000
shares at September 28, 2002 and 4,887,000
shares at December 29, 2001 252.0 261.2
Common stock, par value $0.01: authorized
1,000,000,000 shares; issued 409,112,000
shares at September 28, 2002 and 408,532,000
shares at December 29, 2001 4.1 4.1
Treasury stock, at cost: 16,285,000 shares at
September 28, 2002 and 17,645,000 shares at
December 29, 2001 (471.6) (510.8)
Guaranteed ESOP obligation (219.9) (219.9)
Capital surplus 1,544.8 1,539.6
Retained earnings 3,941.5 3,492.7
----------------------------------------------------------------------
Total shareholders' equity 5,050.9 4,566.9
----------------------------------------------------------------------
Total liabilities and shareholders' equity $ 9,053.8 $ 8,628.2
----------------------------------------------------------------------
CVS CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
----------------------------------------------------------------------
39 Weeks Ended
Sept. Sept.
28, 29,
In millions 2002 2001
----------------------------------------------------------------------
Cash flows from operating activities:
Net earnings $ 516.5 $ 543.5
Adjustments required to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 230.9 239.5
Deferred income taxes and other noncash items 54.9 11.5
Change in operating assets and liabilities,
providing/(requiring) cash, net of effects from
acquisitions:
Accounts receivable, net (20.1) (132.0)
Inventories (64.4) (510.5)
Other current assets 1.8 (7.8)
Other assets (25.8) (2.7)
Accounts payable 24.9 199.2
Accrued expenses 9.4 58.9
Other long-term liabilities (5.2) 2.0
----------------------------------------------------------------------
Net cash provided by operating activities 722.9 401.6
----------------------------------------------------------------------
Cash flows from investing activities:
Additions to property and equipment (804.7) (473.0)
Proceeds from sale-leaseback transactions 228.8 94.0
Acquisitions (net of cash acquired) and investments (68.5) (123.2)
Proceeds from sale or disposal of assets 17.6 11.6
----------------------------------------------------------------------
Net cash used in investing activities (626.8) (490.6)
----------------------------------------------------------------------
Cash flow from financing activities:
(Reductions in) additions to short-term borrowings (77.6) 13.8
Dividends paid (67.6) (67.8)
(Reductions in) additions to long-term debt (2.8) 296.2
Purchase of treasury shares -- (129.0)
Proceeds from exercise of stock options 32.9 45.1
----------------------------------------------------------------------
Net cash (used in) provided by financing activities (115.1) 158.3
----------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents (19.0) 69.3
Cash and cash equivalents at beginning of period 236.3 337.3
----------------------------------------------------------------------
Cash and cash equivalents at end of period $ 217.3 $ 406.6
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