This excerpt taken from the CVS 8-K filed Nov 1, 2006.
NET EARNINGS INCREASED 12.5%, WHILE DILUTED EPS ROSE TO $0.33
WOONSOCKET, RHODE ISLAND, November 1, 2006 - CVS Corporation (NYSE: CVS), today announced earnings for the quarter ended September 30, 2006.
Net earnings for the quarter increased 12.5% to $284.2 million or $0.33 per diluted share, compared with net earnings of $252.7 million or $0.30 per diluted share in the third quarter of 2005. The Company estimates that the acquisition of 701 standalone Sav-on and Osco drugstores on June 2, 2006, had a negative impact of approximately $0.05 per diluted share in the third quarter of 2006. The Companys third quarter results compared to last year were driven by significant sales growth, continued improvement in gross margins and solid expense control in the core business.
Our solid third quarter results reflect the continued strength of our business across our markets. We delivered strong sales results and improved gross margin in both the pharmacy and front-end businesses, stated Tom Ryan, Chairman, President and Chief Executive Officer of CVS Corporation. We also made significant progress on the integration of the stores we purchased from Albertsons on June 2nd. We completed the systems integration and began remodeling the Sav-on and Osco stores to look and feel like CVS/pharmacies. The early feedback from customers has been highly positive, and we are optimistic about the benefits we will achieve once the stores are re-introduced to customers.
Mr. Ryan continued, Additionally, we completed the purchase of MinuteClinic, the pioneer and largest provider of retail-based health clinics in the U.S., and we expect to roll out this valued service to our customers nationwide, at a pace of expansion that is appropriate to the business opportunity.
CVS previously reported that net sales for the third quarter increased 24.9% to $11.2 billion, up from $9.0 billion during the third quarter of 2005. Same store sales (sales from stores open more than one year) for the quarter rose 9.1%, while pharmacy same store sales rose 10.2% and front-end same store sales increased 6.4%. Same store sales do not include the sales results of the drugstores acquired on June 2, 2006. These acquired stores will be included in same store sales following the one-year anniversary of the acquisition, beginning in fiscal July 2007. Total pharmacy sales represented 70.3% of total company sales for the quarter. Third party prescription sales were 94.5% of pharmacy sales for the quarter.
For the third quarter, CVS opened 32 new stores, closed 80 stores and relocated 25 others. As of September 30, 2006, CVS operated 6,157 retail and specialty pharmacy stores in 43 states and the District of Columbia.
The Company will be holding a prerecorded conference call tomorrow for the investment community at 8:30 a.m. (ET) to discuss the quarterly results. An audio webcast of the conference call will be broadcast simultaneously through the Investor Relations portion of the CVS website for all interested parties. To access the webcast, visit http://investor.CVS.com. This webcast will be archived and available on the web site for a one-month period following the conference call.
CVS is Americas largest retail pharmacy, operating approximately 6,200 retail and specialty pharmacy stores in 43 states and the District of Columbia. With more than 40 years of dynamic growth in the retail pharmacy industry, CVS is committed to being the easiest pharmacy retailer for customers to use. CVS innovatively serves the healthcare needs of all customers through its CVS/pharmacy stores; its online pharmacy, CVS.com; its retail-based health clinic subsidiary, MinuteClinic; and its pharmacy benefit management, mail order and specialty pharmacy subsidiary, PharmaCare. General information about CVS is available through the Investor Relations portion of the Companys website, at http://investor.CVS.com as well as through the pressroom portion of the Companys website, at www.cvs.com/pressroom.
This press release contains certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company strongly recommends that you become familiar with the specific risks and uncertainties outlined under the caption Managements Discussion and Analysis of Financial Condition and Results of Operations ~ Cautionary Statement Concerning Forward-Looking Statements in its Quarterly Report on Form 10-Q for the period ended July 1, 2006.