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WALGREENS ANNOUNCES RECORD FOURTH QUARTER AND 19TH CONSECUTIVE YEAR OF RECORD SALES, EARNINGS

 DEERFIELD, Ill., Oct. 4 /PRNewswire/ -- Walgreen Co. (NYSE: WAG) today announced record sales and earnings for the fourth quarter and fiscal year 1993. It is Walgreens' 19th consecutive year of record sales and earnings.
 Net sales for the fourth quarter ended Aug. 31 rose 10.6 percent to $2.037 billion, and for the full year increased 11.0 percent to $8.3 billion.
 Net earnings for the quarter, excluding the effects of the new tax bill and accounting changes, rose 21.5 percent to $62,526,000 or 50 cents per share, compared to $51,459,000 or 41 cents per share last year.
 The effect of the new accounting standards for post-retirement benefits and income taxes, and the new tax bill, was to reduce quarterly net earnings to $58,313,000 or 47 cents per share, an increase of 14.6 percent per share from the same quarter last year.
 Net earnings for the fiscal year, excluding the effects of the new tax bill and accounting changes, rose 13.9 percent to $251,392,000 or $2.03 per share. Net earnings excluding the cumulative effect of the accounting changes rose 11.2 percent to $245,289,000 or $1.98 per share.
 The one-time charge for the cumulative effect of the new accounting standards reduced yearly earnings for fiscal 1993 to $221,666,000 or $1.79 per share, compared with $220,628,000 or $1.78 per share last year.
 "We opened a record 149 new drugstores in fiscal 1993, and despite lower inflation our prescription sales rose a healthy 15.7 percent to top $3 billion," said Chairman Charles R. Walgreen III.
 "Since 1988 the number of prescriptions filled at Walgreens has risen 55 percent, which is significantly higher than our industry's increase. That means Walgreens share of the prescription market is growing," said Walgreen. "Pharmacy is 40 percent of our total sales today." Pharmacy sales in comparable stores (those open at least a year) were up 11.3 percent for the year.
 While the new national healthcare legislation is still being debated, "the final outcome should be favorable to drugstores, especially if prescription coverage is extended to the 37 million uninsured people in this country," said Walgreen. "Some industry experts feel this will increase prescription usage in the U.S. by 10 to 25 percent."
 "The 149 new stores we opened during the year were 19 more than projected and included stores in two new markets for us -- Indianapolis, where we opened 10 full-sized stores, and Spokane, Wash., where we opened three RxPress (pharmacy-only) stores," said President L. Daniel Jorndt. "We plan to add 175 new drugstores in fiscal 1994 and to be opening 200 stores per year by 1996."
 At fiscal year-end Walgreens operated 1,836 drugstores in 30 states and Puerto Rico. The company expects to operate 3,000 drugstores around the country by the year 2000.
 Over the past five years, Walgreens has invested more than $840 million in new and remodeled stores, advanced systems and distribution centers. Capital spending is expected to reach a record level of more than $300 million for fiscal 1994, up from $185 million in 1993.
 This investment is targeted toward new store openings, major technology improvements, a new pharmacy mail service facility in Phoenix and a new distribution center near Sacramento, Calif.
 "This major investment level reflects the confidence we have in our business and in the future," said Walgreen. "I anticipate another excellent year for Walgreens in 1994."
 WALGREEN CO.
 COMPARATIVE CONDENSED STATEMENTS OF EARNINGS
 (Unaudited: in thousands, except per share data)
 QUARTER ENDED AUG. 31
 Percent
 1993 1992 Change
 Net sales $2,037,034 $1,842,246 10.6
 Net earnings $ 58,313 $ 51,459 13.3
 Net earnings
 per share (B) $ .47 $ .41 14.6
 Dividends declared
 per share $ .15 $ .13 15.4
 YEAR ENDED AUG. 31
 Percent
 1993 1992 Change
 Net sales $8,294,840 $7,474,961 11.0
 Earnings $ 245,289 $ 220,628 11.2
 Cumulative effect
 of accounting
 changes (A) $ (23,623) --- ---
 Net earnings $ 221,666 $ 220,628 0.5
 Earnings
 per share (B) $ 1.98 $ 1.78 11.2
 Cumulative effect
 of accounting
 changes (A,B) $ (0.19) --- ---
 Net earnings
 per share (B) $ 1.79 $ 1.78 0.6
 Dividends declared
 per share $ .60 $ .52 15.4
 (A) -- In the fourth quarter of fiscal 1993, the company elected the early adoption of two Financial Accounting Standards Board (FAS) pronouncements. The adoption of FAS 106 "Employers' Accounting for Post- Retirement Benefits Other Than Pensions" resulted in a pretax charge of $59.1 million ($36.8 million after tax; $0.30 per share). This statement requires accrual of the present value of the expected cost of retiree medical benefits during the employees' service period. Previously, the cost was recognized on a cash basis. The adoption of FAS 109, "Accounting for Income Taxes," increased net earnings $13.2 million ($0.11 per share). This statement requires the adjustment of deferred and current income tax assets and liabilities to reflect current tax rates rather than tax rates in effect at the time the assets and liabilities arose. The effective date of adoption of both standards was Sept. 1, 1992.
 (B) -- The weighted average number of common shares and equivalents used for calculating primary net earnings per share was 123,770,000 and 123,671,000 for the years ended Aug. 31, 1993 and 1992, respectively. Fully diluted net earnings per share are the same as primary net earnings per share.
 -0- 10/4/93
 /CONTACT: Thomas L. Mammoser of Walgreen Co., 708-940-2920/
 (WAG)


CO: Walgreen Co. ST: Illinois IN: REA SU: ERN

AR -- CL015 -- 8215 10/04/93 09:37 EDT
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Date:Oct 4, 1993
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