|CVS Corporation Reports Record Fourth Quarter and Year Results|
WOONSOCKET, R.I.--(BUSINESS WIRE)--Feb. 6, 2001--CVS Corporation (NYSE: CVS) CVS Corporation (NYSE: CVS), America's #1 pharmacy, today announced record sales and earnings for the fourth quarter and the year ended December 30, 2000.
Net earnings for the 52-weeks ended December 30, 2000 increased 17.5% to $746.0 million, or $1.83 per diluted share, from $635.1 million, or $1.55 per diluted share, during the 53-weeks ended January 1, 2000. Fiscal 2000 benefited from a $19.2 million pre-tax ($11.5 million after-tax), 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 nonrecurring gain and the 53rd week in 1999, comparable net earnings for fiscal 2000 rose 17.7% to $734.5 million, or $1.80 per diluted share, from $623.9 million, or $1.52 per diluted share, for the comparable 52-weeks in 1999.
Net sales for the 52-weeks ended December 30, 2000 increased 11.0% to $20.1 billion, up from $18.1 billion during the 53-week period ended January 1, 2000. On a comparable 52-week basis, net sales for the year increased 13.4%. Same store sales for the year, on a comparable 52-week basis, rose 10.9% while pharmacy same store sales rose 17.7%. Pharmacy sales were 63% of total sales for both the quarter and the year. Third party prescription sales were 90% of pharmacy sales for the quarter and 89% for the year.
Net earnings for the 13-week period ended December 30, 2000 increased 12.4% to $209.5 million, or $0.51 per diluted share, from $186.3 million, or $0.46 per diluted share, during the 14-week period ended January 1, 2000. Excluding the extra week in 1999, comparable net earnings for the fourth quarter of 2000 rose 19.6% to $209.5 million, or $0.51 per diluted share, from $175.1 million, or $0.43 per diluted share, in the fourth quarter of 1999.
Net sales for the 13-week period ended December 30, 2000 increased
CVS dispensed nearly 300 million prescriptions in 2000, once again leading the industry in pharmacy sales. The Company continues to gain a growing share of the rapidly-expanding pharmacy market. CVS also registered market share gains in all of its core front-end categories, especially the photo business in which CVS is leading the way with innovative offerings.
"The year 2000 was another successful year for CVS. We once again achieved double-digit same store sales growth, excellent expense control, and produced record earnings," stated Tom Ryan, Chairman, President and Chief Executive Officer.
Other key accomplishments in 2000 include the acquisition of Stadtlander Pharmacy, which propelled CVS ProCare to the #1 position in specialty pharmacy, the fastest-growing segment of the pharmacy industry. CVS ProCare is the only specialty pharmacy company with integrated retail and mail order services, making ProCare uniquely positioned in the highly-fragmented, $14 billion market for patients requiring complex and expensive drug therapies for long-term health conditions. The Company also made significant enhancements to its CVS.com internet pharmacy, which continued its growth and was ranked among the nation's top internet pharmacy sites.
For the year, CVS opened 158 new stores and relocated 230 others. The Company entered three new, high-growth markets in 2000 and prepared to enter additional new markets. There remain 41 of the Top 100 U.S. drugstore markets in which CVS currently has no presence, offering significant opportunity for future growth. As of December 30, 2000, CVS operated 4,133 retail and specialty pharmacy stores in 31 states and the District of Columbia.
"I am very pleased that we have been able to consistently meet or beat our goals, all while we continue to invest in new stores and relocations, as well as in new business channels, which will help accelerate our future growth. I believe we are better positioned than at any other time in the Company's history to capitalize on the significant opportunities in healthcare," Ryan concluded.
As reported in a separate press release today, January sales increased 14.4% to $1.62 billion, compared to $1.42 billion in the prior year period. January same store sales rose 12.0% with pharmacy same store sales rising 18.9%. The timing of the New Year's holiday, which fell into the January reporting period this year versus December last year, had a negative impact on January same store sales of approximately 2% on both pharmacy and total comps.
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. To access the webcast, visit the Company's web site at http://www.CVS.com on the Investor Relations 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 more retail prescriptions in more stores than any other chain. With annual revenues of more than $20 billion, CVS has created innovative approaches to serve the healthcare needs of all of our customers through its more than 4,100 CVS/pharmacy stores; CVS ProCare, its specialty pharmacy business; CVS.com, its online pharmacy; and PharmaCare, its pharmacy benefit management company. General information about CVS is available through the Investor Relations portion of the Company's website, at http://www.CVS.com . 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 Statements of Operations (Unaudited) Quarter Ended Fiscal Year Ended December 30, January 1, December 30, January 1, 2000 2000 2000 2000 In millions, except per share amounts (13 weeks) (14 weeks) (52 weeks) (53 weeks) Net sales $ 5,488.8 $ 5,183.6 $ 20,087.5 $ 18,098.3 Cost of goods sold, buying and warehousing costs 4,060.3 3,823.1 14,725.8 13,236.9 Gross margin 1,428.5 1,360.5 5,361.7 4,861.4 Selling, general and administrative expenses 982.9 957.0 3,742.4 3,448.0 Depreciation and amortization 76.4 71.1 296.6 277.9 Total operating expenses 1,059.3 1,028.1 4,039.0 3,725.9 Operating profit 369.2 332.4 1,322.7 1,135.5 Interest expense, net 20.1 16.6 79.3 59.1 Earnings before income tax provision 349.1 315.8 1,243.4 1,076.4 Income tax provision 139.6 129.5 497.4 441.3 Net earnings(1) 209.5 186.3 746.0 635.1 Preference dividends, net of income tax benefit 3.3 3.9 14.6 14.7 Net earnings available to common shareholders $ 206.2 $ 182.4 $ 731.4 $ 620.4 Basic earnings per common share: Net earnings(1) $ 0.53 $ 0.47 $ 1.87 $ 1.59 Weighted average basic common shares outstanding 391.6 391.9 391.0 391.3 Diluted earnings per common share: Net earnings(1) $ 0.51 $ 0.46 $ 1.83 $ 1.55 Weighted average diluted common shares outstanding 409.8 408.3 408.0 408.9 Dividends declared per common share $ 0.0575 $ 0.0575 $ 0.2300 $ 0.2300 (1) The 52 weeks ended December 30, 2000 include a $19.2 million ($11.5 million after-tax), or $0.03 per basic and diluted share, nonrecurring gain recorded in total operating expenses 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 fiscal year rose 15.7% to $734.5 million, or $1.80 per diluted share. CVS Corporation Consolidated Balance Sheets (Unaudited) In millions, except share December 30, January 1, and per share amounts 2000 2000 Assets: Cash and cash equivalents $ 337.3 $ 230.0 Accounts receivable, net 824.5 699.3 Inventories 3,557.6 3,445.5 Deferred income taxes 124.9 139.4 Other current assets 92.3 93.8 Total current assets 4,936.6 4,608.0 Property and equipment, net 1,742.1 1,601.0 Goodwill, net 818.5 706.9 Other assets 452.3 359.5 Total assets $ 7,949.5 $ 7,275.4 Liabilities: Accounts payable $ 1,351.5 $ 1,454.2 Accrued expenses 1,001.4 967.4 Short-term borrowings 589.6 451.0 Current portion of long-term debt 21.6 17.3 Total current liabilities 2,964.1 2,889.9 Long-term debt 536.8 558.5 Deferred income taxes 28.0 27.2 Other long-term liabilities 116.0 120.1 Shareholders' equity: Preference stock, series one ESOP convertible, par value $1.00: authorized 50,000,000 shares; issued and outstanding 5,006,000 shares at December 30, 2000 and 5,164,000 shares at January 1, 2000 267.5 276.0 Common stock, par value $0.01: authorized 1,000,000,000 shares; issued 407,395,000 shares at December 30, 2000 and 403,047,000 shares at January 1, 2000 4.1 4.0 Treasury stock, at cost: 15,073,000 shares at December 30, 2000 and 11,051,000 shares at January 1, 2000 (404.9) (258.5) Guaranteed ESOP obligation (240.6) (257.0) Capital surplus 1,493.8 1,371.7 Retained earnings 3,184.7 2,543.5 Total shareholders' equity 4,304.6 3,679.7 Total liabilities and shareholders' equity $ 7,949.5 $ 7,275.4 CVS Corporation Consolidated Statements of Cash Flows Fiscal Year Ended (Unaudited) December 30, January 1, 2000 2000 In millions (52 weeks) (53 weeks) Cash flows from operating activities: Net earnings $ 746.0 $ 635.1 Adjustments required to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 296.6 277.9 Deferred income taxes and other non-cash items 43.8 124.8 Change in assets and liabilities, excluding acquisitions and dispositions: (Increase) in accounts receivable, net (86.7) (48.9) (Increase) in inventories (98.1) (255.0) Decrease (increase) in other current assets 7.0 (16.7) (Increase) in other assets (50.1) (97.9) (Decrease) increase in accounts payable (133.6) 166.8 Increase (decrease) in accrued expenses 59.6 (37.7) (Decrease) in other long-term liabilities (4.3) (22.1) Net cash provided by operating activities 780.2 726.3 Cash flows from investing activities: Additions to property and equipment (695.3) (722.7) Proceeds from sale-leaseback transactions 299.3 229.2 Acquisitions, net of cash (263.3) (101.1) Proceeds from sale or disposal of assets 18.8 28.2 Net cash used in investing activities (640.5) (566.4) Cash flows from financing activities: Additions to (reductions in) short-term borrowings 138.7 (324.5) Proceeds from exercise of stock options 97.8 20.4 (Reductions in) additions to long-term debt (0.9) 298.1 Dividends paid (104.8) (104.7) Purchase of treasury shares (163.2) -- Net cash provided by financing activities (32.4) (110.7) Net increase in cash and cash equivalents 107.3 49.2 Cash and cash equivalents at beginning of period 230.0 180.8 Cash and cash equivalents at end of period $ 337.3 $ 230.0