CVS Corporation Third Quarter Diluted EPS Increased 20% to $0.30; Strong Sales Growth Fueled Investments for Long-term Growth; Company Generated Significant Free Cash Flow.WOONSOCKET, R.I.--(BUSINESS WIRE)--Oct. 27, 1999-- 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 record sales and earnings for the third quarter ended September 25, 1999. 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 1999 increased 15.8% to $4.3 billion from $3.7 billion during the prior year period. For the first nine months of 1999, net sales increased 16.5% to $12.9 billion, up from $11.1 billion during the prior year period. 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 rose 12.2% for the quarter and 12.4% for the year-to-date 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 increased 17.9% for the quarter and 19.3% for the year-to-date period. Pharmacy sales were 59% of total sales for both the quarter and the year-to-date period. Third party prescription sales were 87% of pharmacy sales for the quarter and 86% for the year-to-date period. Net earnings for the third quarter of 1999 increased 18.8% to $121.6 million, or $0.30 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, from $102.4 million, or $0.25 per diluted share, during the prior year period. Excluding the impact of the 1998 Non-Recurring Charges discussed below, year-to-date comparable net earnings increased 23.2% to $448.8 million, or $1.10 per diluted share, from $364.3 million, or $0.90 per diluted share, during the prior year period. "We are pleased with our third quarter results, which met expectations, despite our continued investments in new stores and relocations, in technology initiatives to improve customer service and productivity, and in two significant new businesses, CVS ProCare and CVS.com," 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 and Chief Executive Officer. "Our robust sales growth enabled us to accelerate certain of these investments, which we believe will be important drivers of our future growth. Also, as expected, we are beginning to see significant improvement in free cash flow resulting from improved working capital performance." During the third quarter of 1999, CVS opened 27 new stores 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. 82 others. "Year-to-date, we have opened 321 new or relocated stores putting us on track to meet our goal of opening approximately 440 new or relocated stores by year-end," continued Mr. Ryan. As of September 25, 1999, CVS operated 4,089 stores in 24 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). . During the second quarter of 1998, the Company recorded a $10.0 million charge to cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold for markdowns on non-compatible Arbor arbor Garden shelter providing privacy and partial protection from the weather, most commonly a lightweight, latticed framework (trellis) of wood or metal with interlaced branches of vines or climbing shrubs trained over it. merchandise and a $158.3 million charge to 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. for direct and other merger-related costs pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to the CVS/Arbor merger transaction and certain 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). activities. Collectively, the above charges are referred to as the "1998 Non-Recurring Charges." CVS is the largest retail provider of prescriptions in the nation. The Company is the No. 1 drugstore chain in the U.S. with stores in the Northeast, Mid-Atlantic, Southeast and Midwest regions of the country. General information about CVS, including corporate background and press releases, is available through CVS' web site at http://www.CVS.com. The Company will be holding a conference call today for the investment community at 9:30am (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ) to discuss the quarterly results and the Company's latest view on earnings expectations. The call will be simulcast on the Company's web site for all interested parties. You may visit the Company's web site at http://www.CVS.com to hear the call live, or to listen to an archive of the call as well as access general information about CVS, including corporate background and press releases. 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. The potential risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company's Securities and Exchange Commission filings. -0-
CVS Corporation
Consolidated Statements of Operations
(Unaudited)
In millions, except per
common share amounts
Three Months Ended Nine Months Ended
Sept. 25, Sept. 26, Sept. 25, Sept. 26,
1999 1998 1999 1998
--------- --------- --------- ---------
Net sales $ 4,311.8 $ 3,725.1 $12,914.7 $11,082.5
Cost of goods sold, buying
and warehousing costs 3,170.7 2,729.8 9,413.7 8,059.8
--------- --------- --------- ---------
Gross margin 1,141.1 995.3 3,501.0 3,022.7
Selling, general and
administrative expenses 851.3 742.9 2,491.1 2,173.5
Depreciation and amortization 70.1 60.7 206.8 185.8
Merger and restructuring
charge -- -- -- 158.3
--------- --------- --------- ---------
Total operating expenses 921.4 803.6 2,697.9 2,517.6
--------- --------- --------- ---------
Operating profit 219.7 191.7 803.1 505.1
Interest expense, net 13.7 15.1 42.5 45.2
--------- --------- --------- ---------
Earnings before income taxes 206.0 176.6 760.6 459.9
Income tax provision 84.4 74.2 311.8 209.3
--------- --------- --------- ---------
Net earnings 121.6 102.4 448.8 250.6
Preference dividends, net of
income tax benefit 3.6 3.4 10.8 10.2
--------- --------- --------- ---------
Net earnings available to
common shareholders $ 118.0 $ 99.0 $ 438.0 $ 240.4
--------- --------- --------- ---------
Basic earnings per common
share:
Net earnings $ 0.30 $ 0.25 $ 1.12 $ 0.62
--------- --------- --------- ---------
Weighted average basic
common shares outstanding 391.8 389.5 391.1 386.1
--------- --------- --------- ---------
Diluted earnings per common
share:
Net earnings $ 0.30 $ 0.25 $ 1.10 $ 0.61
--------- --------- --------- ---------
Weighted average diluted
common shares outstanding 398.1 396.1 408.5 393.9
--------- --------- --------- ---------
Dividends declared per common
share $ 0.0575 $ 0.0575 $ 0.1725 $ 0.1675
--------- --------- --------- ---------
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