Press Release
| << Back | ||||||||||||||||||||||||||
| CVS Corporation Reports Record Third Quarter Sales and Earnings; Comparable Diluted EPS Increased 20% to $0.36; Company Generated $269 Million in Free Cash Flow | ||||||||||||||||||||||||||
WOONSOCKET, R.I.--(BUSINESS WIRE)--Oct. 30, 2000--CVS Corporation (NYSE:CVS), America's #1 pharmacy, today announced record sales and earnings for the third quarter ended September 30, 2000. Net earnings for the third quarter increased 30.5% to $158.7 million, or $0.39 per diluted share, from $121.6 million, or $0.30 per diluted share during the prior year period. Third quarter results include a $19.2 million, or $0.03 per diluted share, nonrecurring gain representing partial payment of the Company's share of the settlement proceeds from a class action lawsuit against certain manufacturers of brand name prescription drugs. Excluding the gain, net earnings for the third quarter rose 21.1% to $147.2 million, or $0.36 per diluted share. Year-to-date, net earnings increased 19.5% to $536.5 million, or $1.32 per diluted share, from $448.8 million, or $1.10 per diluted share during the prior year period. Excluding the gain noted above, year-to-date net earnings rose 17.0% to $525.0 million, or $1.29 per diluted share. Net sales increased 14.0% to $4.9 billion during the third quarter, up from $4.3 billion during the third quarter of 1999. Year-to-date, net sales increased 13.0% to $14.6 billion up from $12.9 billion during the prior year period. Same store sales rose 12.2% for the quarter and 11.1% for the year-to-date period while pharmacy same store sales rose 18.7% for the quarter and 17.5% for the year-to-date period. Pharmacy sales were 63% of total sales for the quarter and 62% for year-to-date period. Third party prescription sales were 89% of pharmacy sales for both the quarter and year-to-date period. "This was a terrific quarter in which all key performance metrics moved in the right direction. We were able to translate our strong sales growth into earnings per share that were higher than we originally anticipated," stated Tom Ryan, Chairman, President and Chief Executive Officer. "Our gross margin experienced the smallest decline since 1996 and we continued to achieve excellent expense control, which enabled us to deliver healthy operating margin expansion. We are well on our way to completing another year of record performance". During the third quarter, CVS opened 45 new stores and relocated 53 others. As of September 30, 2000, CVS operated 4,106 retail and specialty pharmacy stores in 29 states and the District of Columbia. On September 18, the Company completed its acquisition of Stadtlander Pharmacy. Mr. Ryan continued, "The integration of Stadtlander with CVS ProCare is well underway. This acquisition makes CVS ProCare the largest specialty pharmacy company in the nation and solidifies our leadership position as the most complete retail pharmacy company in America, providing total healthcare solutions for our customers." The Company will be holding a conference call today for the investment community at 10:30am (EST) to discuss the quarterly results. 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 may contain certain forward-looking statements 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.
CVS Corporation
Consolidated Condensed Statements of Operations
(Unaudited)
13 weeks ended 39 weeks ended
In millions, except Sept. 30, Sept. 25, Sept. 30, Sept. 25,
per share amounts 2000 1999 2000 1999
----------------------------------------------------------------------
Net sales $ 4,916.4 $ 4,311.8 $ 14,598.7 $ 12,914.7
Cost of goods sold,
buying and
warehousing costs 3,619.0 3,170.7 10,665.5 9,413.7
----------------------------------------------------------------------
Gross margin 1,297.4 1,141.1 3,933.2 3,501.0
Selling, general and
administrative expenses 937.7 851.3 2,759.5 2,491.1
Depreciation and
amortization 75.0 70.1 220.2 206.8
----------------------------------------------------------------------
Total operating
expenses 1,012.7 921.4 2,979.7 2,697.9
----------------------------------------------------------------------
Operating profit 284.7 219.7 953.5 803.1
Interest expense, net 20.1 13.7 59.2 42.5
----------------------------------------------------------------------
Earnings before income
tax provision 264.6 206.0 894.3 760.6
Income tax provision 105.9 84.4 357.8 311.8
----------------------------------------------------------------------
Net earnings(1) 158.7 121.6 536.5 448.8
Preference dividends,
net of income
tax benefit 3.8 3.6 11.3 10.8
----------------------------------------------------------------------
Net earnings available
to common shareholders $ 154.9 $ 118.0 $ 525.2 $ 438.0
----------------------------------------------------------------------
Basic earnings per
common share:
Net earnings(1) $ 0.40 $ 0.30 $ 1.34 $ 1.12
----------------------------------------------------------------------
Weighted average basic
common shares
outstanding 391.0 391.8 390.8 391.1
----------------------------------------------------------------------
Diluted earnings per
common share:
Net earnings(1) $ 0.39 $ 0.30 $ 1.32 $ 1.10
----------------------------------------------------------------------
Weighted average diluted
common shares
outstanding 407.5 398.1 407.3 408.5
----------------------------------------------------------------------
Dividends declared per
common share $ 0.0575 $ 0.0575 $ 0.1725 $ 0.1725
----------------------------------------------------------------------
(1) The 13 weeks ended September 30, 2000 include a $19.2 million
($11.5 million after-tax), or $0.03 per basic and diluted share,
nonrecurring gain representing partial payment of the Company's share
of the settlement proceeds from a class action lawsuit against certain
manufacturers of brand name prescription drugs. Excluding the gain,
net earnings for the third quarter rose 21.1% to $147.2 million, or
$0.36 per diluted share and 17.0% to $525.0 million, or $1.29 per
diluted share, for the 39 weeks ended September 30, 2000.
CVS Corporation
Consolidated Condensed Balance Sheets
In millions, except
share and per share (Unaudited)
amounts September 30, 2000 January 1, 2000
----------------------------------------------------------------------
Assets:
Cash and cash equivalents $ 214.9 $ 230.0
Accounts receivable, net 795.2 699.3
Inventories 3,778.7 3,445.5
Deferred income taxes 149.4 139.4
Other current assets 134.0 93.8
----------------------------------------------------------------------
Total current assets 5,072.2 4,608.0
Property and equipment, net 1,786.9 1,601.0
Goodwill, net 805.8 706.9
Other assets 456.7 359.5
----------------------------------------------------------------------
Total assets $ 8,121.6 $ 7,275.4
----------------------------------------------------------------------
Liabilities:
Accounts payable $ 1,450.4 $ 1,454.2
Accrued expenses 982.4 967.4
Short-term borrowings 902.3 451.0
Current portion of long-term debt 17.3 17.3
----------------------------------------------------------------------
Total current liabilities 3,352.4 2,889.9
Long-term debt 557.8 558.5
Deferred income taxes 27.2 27.2
Other long-term liabilities 104.3 120.1
Shareholders' equity:
Preference stock, series one ESOP
convertible, par value $1.00:
authorized 50,000,000 shares;
issued and outstanding 5,033,000
shares at September 30, 2000 and
5,164,000 shares at
January 1, 2000 269.0 276.0
Common stock, par value $0.01:
authorized 1,000,000,000 shares;
issued 406,270,000 shares at
September 30, 2000 and 403,047,000
shares at January 1, 2000 4.1 4.0
Treasury stock, at cost: 15,084,000
shares at September 30, 2000 and
11,051,000 shares at
January 1, 2000 (405.1) (258.5)
Guaranteed ESOP obligation (257.0) (257.0)
Capital surplus 1,456.5 1,371.7
Retained earnings 3,012.4 2,543.5
----------------------------------------------------------------------
Total shareholders' equity 4,079.9 3,679.7
----------------------------------------------------------------------
Total liabilities and
shareholders' equity $ 8,121.6 $ 7,275.4
----------------------------------------------------------------------
CVS Corporation
Consolidated Condensed Statements of Cash Flows
(Unaudited)
39 Weeks Ended
September 30, September 25,
In millions 2000 1999
----------------------------------------------------------------------
Cash flows from operating activities:
Net earnings $ 536.5 $ 448.8
Adjustments required to
reconcile net earnings
to net cash provided by
operating activities:
Depreciation and amortization 220.2 206.8
Deferred income taxes and
other non-cash items 11.6 8.8
Change in assets and liabilities,
excluding acquisitions and
dispositions:
(Increase) in accounts
receivable, net (56.0) (120.1)
(Increase) in inventories (318.5) (182.9)
(Increase) in other current assets (20.6) (24.6)
(Increase) in other assets (55.5) (87.3)
(Decrease) increase in accounts
payable (34.7) 136.3
Increase (decrease) in accrued
expenses 35.0 (27.8)
(Decrease) in other long-term
liabilities (15.8) (42.4)
----------------------------------------------------------------------
Net cash provided by
operating activities 302.2 315.6
----------------------------------------------------------------------
Cash flows from investing activities:
Additions to property and equipment (496.6) (484.8)
Proceeds from sale-leaseback
transactions 140.9 86.3
Acquisitions, net of cash (244.9) (21.1)
Proceeds from sale or disposal
of assets 9.2 26.5
----------------------------------------------------------------------
Net cash used in investing activities (591.4) (393.1)
----------------------------------------------------------------------
Cash flows from financing activities:
Additions to (reductions in)
short-term borrowings 451.4 (182.2)
Proceeds from exercise of stock
options 54.1 17.9
(Reductions in) additions to
long-term debt (0.7) 298.3
Dividends paid (67.5) (67.4)
Purchase of treasury shares (163.2) --
----------------------------------------------------------------------
Net cash provided by
financing activities 274.1 66.6
----------------------------------------------------------------------
Net (decrease) in cash and
cash equivalents (15.1) (10.9)
Cash and cash equivalents at
beginning of period 230.0 180.8
----------------------------------------------------------------------
Cash and cash equivalents at
end of period $ 214.9 $ 169.9
----------------------------------------------------------------------
|
Share This
