Press Release
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| CVS Corporation Reports First Quarter EPS of $0.54 Cents Company Achieves Record Net Earnings of $221.7 Million, Up 15.9% | ||||||||||||||||||
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WOONSOCKET, R.I.--(BUSINESS WIRE)--May 2, 2001--CVS Corporation (NYSE: CVS), America's #1 pharmacy, today announced record net earnings of $221.7 million, or $0.54 per diluted share, for the first quarter of 2001, up 15.9% from $191.3 million, or $0.47 per diluted share, during the first quarter of 2000. Total sales for the 13-weeks ended March 31, 2001 increased 13.6% to $5.4 billion, up from $4.7 billion during the 13-week period ended April 1, 2000. Same store sales for the quarter rose 11.3%, while pharmacy same store sales rose 17.6%. Pharmacy sales were 67% of total sales for the quarter and third party prescription sales were 90% of pharmacy sales. "I am very pleased with our first quarter performance, which reflects solid same store sales growth and excellent expense control, resulting in improved operating margins," stated Tom Ryan, Chairman, President and Chief Executive Officer. "We also continued to make good progress on inventory management, which will be a significant driver of our future returns." During the first quarter of 2001, the Company received additional settlement proceeds from a class action lawsuit against certain manufacturers of brand name prescriptions drugs. The Company elected to contribute an equal amount to the CVS Charitable Trust, Inc. to fund future charitable giving. As a result, the net effect of the two nonrecurring events had no impact on the Company's net earnings for the first quarter of 2001. For the quarter, CVS opened 14 new stores and relocated 24 others. As of March 31, 2001, CVS operated 4,127 retail and specialty pharmacy stores in 31 states and the District of Columbia. The Company will be holding a conference call today for the investment community at 10:30 a.m. (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 a recording 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 sales exceeding $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 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 fillings.
CVS CORPORATION
Consolidated Statements of Operations
(Unaudited)
13 Weeks Ended
March 31, April 1,
In millions, except per share amounts 2001 2000
----------------------
Net sales $ 5,385.9 $ 4,739.5
Cost of goods sold, buying and warehousing
costs 3,932.5 3,439.5
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Gross margin 1,453.4 1,300.0
Selling, general and administrative expenses 993.4 893.3
Depreciation and amortization 78.6 71.8
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Total operating expenses 1,072.0 965.1
--------- ---------
Operating profit 381.4 334.9
Interest expense, net 15.7 16.1
--------- ---------
Earnings before income tax provision 365.7 318.8
Income tax provision 144.0 127.5
--------- ---------
Net earnings 221.7 191.3
Preference dividends, net of income tax
benefit 3.7 3.8
--------- ---------
Net earnings available to common shareholders $ 218.0 $ 187.5
--------- ---------
Basic earnings per common share:
Net earnings $ 0.56 $ 0.48
--------- ---------
Weighted average basic common shares
outstanding 392.8 391.1
--------- ---------
Diluted earnings per common share:
Net earnings $ 0.54 $ 0.47
--------- ---------
Weighted average diluted common shares
outstanding 411.3 407.1
--------- ---------
Dividends declared per common share $ 0.0575 $ 0.0575
--------- ---------
CVS CORPORATION
Consolidated Balance Sheets
In millions, except share and per share (Unaudited)
amounts March 31, December 30,
2001 2000
Assets:
Cash and cash equivalents $ 299.8 $ 337.3
Accounts receivable, net 893.7 824.5
Inventories 3,821.4 3,557.6
Deferred income taxes 126.9 124.9
Other current assets 102.4 92.3
--------- ----------
Total current assets 5,244.2 4,936.6
Property and equipment, net 1,802.3 1,742.1
Goodwill, net 860.1 818.5
Other assets 468.2 452.3
--------- ----------
Total assets $ 8,374.8 $ 7,949.5
--------- ----------
Liabilities:
Accounts payable $ 1,230.8 $ 1,351.5
Accrued expenses 1,052.2 1,001.4
Short-term borrowings 549.6 589.6
Current portion of long-term debt 21.6 21.6
--------- ----------
Total current liabilities 2,854.2 2,964.1
Long-term debt 836.6 536.8
Deferred income taxes 28.0 28.0
Other long-term liabilities 117.8 116.0
Shareholders' equity:
Preference stock, series one ESOP
convertible, par value $1.00: authorized
50,000,000 shares; issued and outstanding
4,963,000 shares at March 31, 2001 and
5,006,000 shares at December 30, 2000 265.3 267.5
Common stock, par value $0.01: authorized
1,000,000,000 shares; issued 407,980,000
shares at March 31, 2001 and 407,395,000
shares at December 30, 2000 4.1 4.1
Treasury stock, at cost: 14,673,000 shares
at March 31, 2001 and 15,073,000 shares
at December 30, 2000 (394.7) (404.9)
Guaranteed ESOP obligation (240.6) (240.6)
Capital surplus 1,520.2 1,493.8
Retained earnings 3,383.9 3,184.7
--------- ----------
Total shareholders' equity 4,538.2 4,304.6
--------- ----------
Total liabilities and shareholders' equity $ 8,374.8 $ 7,949.5
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CVS CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
13 Weeks Ended
March 31, April 1,
In millions 2001 2000
-----------------------
Cash flows from operating activities:
Net earnings $ 221.7 $ 191.3
Adjustments required to reconcile net
earnings to net cash used in operating
activities:
Depreciation and amortization 78.6 71.8
Deferred income taxes and other
noncash items 0.2 5.8
Change in operating assets and
liabilities, providing/(requiring)
cash, net of effects from acquisitions:
Accounts receivable, net (69.2) (3.2)
Inventories (263.8) (212.8)
Other current assets (7.2) (28.5)
Other assets (3.6) (52.6)
Accounts payable (120.7) (170.1)
Accrued expenses 68.8 51.3
Other long-term liabilities 1.9 1.3
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Net cash used in operating activities (93.3) (145.7)
--------- ---------
Cash flows from investing activities:
Additions to property and equipment (126.0) (140.5)
Acquisitions, net of cash acquired (81.5) (55.6)
Proceeds from sale or disposal of assets 6.3 3.1
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Net cash used in investing activities (201.2) (193.0)
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Cash flow from financing activities:
(Reductions in) additions to short-term
borrowings (40.0) 471.8
Dividends paid (22.6) (22.5)
Additions to (reductions in) long-term
debt 296.7 (0.3)
Proceeds from exercise of stock options 22.9 1.1
Purchase of treasury shares -- (104.8)
--------- ---------
Net cash provided by financing activities 257.0 345.3
--------- ---------
Net (decrease) increase in cash and cash
equivalents (37.5) 6.6
Cash and cash equivalents at beginning of
period 337.3 230.0
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Cash and cash equivalents at end of period $ 299.8 $ 236.6
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