-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L4msXxzyNrKOQN4NNBCcIlC1hC+7ZazBU4903M0rnNGkiUpPu4NrJuBe7f1me5ii zRfIsKrffxBA1ReXMEUndw== 0000950103-99-000993.txt : 19991117 0000950103-99-000993.hdr.sgml : 19991117 ACCESSION NUMBER: 0000950103-99-000993 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991115 ITEM INFORMATION: FILED AS OF DATE: 19991115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CVS CORP CENTRAL INDEX KEY: 0000064803 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DRUG STORES AND PROPRIETARY STORES [5912] IRS NUMBER: 050494040 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-01011 FILM NUMBER: 99756161 BUSINESS ADDRESS: STREET 1: ONE CVS DR. CITY: WOONSOCKET STATE: RI ZIP: 02895- BUSINESS PHONE: 4017651500 MAIL ADDRESS: STREET 1: ONE CVS DR. CITY: WOONSOCKET STATE: RI ZIP: 02895- FORMER COMPANY: FORMER CONFORMED NAME: MELVILLE CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: MELVILLE SHOE CORP DATE OF NAME CHANGE: 19760630 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported): November 15, 1999 CVS CORPORATION (Exact name of registrant as specified in its charter) Delaware 1-1011 05-0494040 (State of incorporation) (Commission (IRS Employer File no.) Identification No.) One CVS Drive Woonsocket, Rhode Island 02895 (Address of principal executive offices including zip code) Registrant's telephone number, including area code: (401) 765-1500 NOT APPLICABLE (Former name or former address, if changed since last report) Item 7. Financial Statements and Exhibits Exhibit No. Description 99.1 Press release issued November 15, 1999 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CVS CORPORATION Date: November 15, 1999 By: /s/ David B. Rickard ---------------------------------- Name: David B. Rickard Title: Executive Vice President and Chief Financial Officer EX-99.1 2 PRESS RELEASE Investor Contact: Nancy Christal Media Contact: Todd Andrews Vice President Director Investor Relations Corporate Communications (914) 722-4704 (401) 770-5717 FOR IMMEDIATE RELEASE CVS CORPORATION ANNOUNCES STATUS OF EXCHANGE OFFER FOR ITS 5 1/2% NOTES; AGREES TO ADJUST TIMING OF CERTAIN MERGER-RELATED CHARGES WOONSOCKET, RHODE ISLAND, November 15, 1999 - CVS Corporation (NYSE: CVS) today announced that it has resolved all substantive matters relating to the Securities and Exchange Commission's review of the registration statement for its offer to exchange all of its existing 5 1/2% Notes due February 15, 2004 for new 5 1/2% Exchange Notes due February 15, 2004, and expects shortly to launch the exchange offer. The Exchange Notes will be identical in all material respects to the existing Notes, except that the Exchange Notes will be registered with the SEC and will not be subject to the transfer restrictions and registration rights that applied to the existing Notes. CVS sold the existing Notes in February 1999 to institutional investors in a private placement that was exempt from registration under the Securities Act of 1933. In connection with that sale, CVS agreed to file a registration statement with the Securities and Exchange Commission with respect to the exchange offer. As part of the review process for that registration statement, the SEC has conducted a full review of the periodic reports that CVS previously filed with the SEC, including its most recent Annual Report on Form 10-K, its most recent Quarterly Reports on Form 10-Q and its historical consolidated financial statements. In connection with concluding that review, CVS has agreed with the SEC to restate its consolidated financial statements for 1997 and 1998 to adjust the timing of certain merger-related charges. As a result of these adjustments, earnings from continuing operations, including merger, restructuring and other non-recurring charges, increased by $11.9 million (or $0.03 per diluted common share) in 1997 and decreased by $11.9 million (or $0.03 per diluted common share) in 1998. Earnings from continuing operations before the impact of merger, restructuring and other non-recurring charges was not affected in any fiscal quarter or year. "The modest adjustments simply move merger-related charges between quarters in 1997 and 1998, with no change in the total amount of the charges or the results for the two years when viewed together. Certainly, they have no effect on 1999 or future period results. I would not expect any investors or analysts to change their company models as a result of this announcement," stated Dave Rickard, Executive Vice President and Chief Financial Officer. Specifically, the adjustments include the following: o In connection with the merger of CVS and Revco, CVS recorded a $39.6 million pre-tax ($23.4 million after-tax) charge in the second quarter of 1997, which represented the estimated non-recurring costs that would be incurred in connection with eliminating the duplicate Revco information technology systems. As reflected in the attached tables, CVS agreed to restate 1997 to record a charge for these non-recurring costs in the fiscal quarters in which the costs were incurred. o Also in connection with the merger of CVS and Revco, CVS recorded a $35.0 million pre-tax ($20.5 million after-tax) charge, which represented the estimated non-recurring costs that would be incurred in connection with removing non-compatible merchandise fixtures from approximately 2,200 Revco stores. As reflected in the attached tables, CVS agreed to restate 1997 and 1998 to record a charge for these non-recurring costs in the fiscal quarters in which the costs were incurred. o In connection with the merger of CVS and Arbor, CVS recorded an $11 million pre-tax ($6.5 million after-tax) charge in the second quarter of 1998, which represented the estimated non-recurring costs that would be incurred in connection with eliminating the duplicate Arbor information technology systems. As reflected in the attached tables, CVS agreed to restate 1998 to record a charge for these non-recurring costs in the fiscal quarters in which the costs were incurred. A registration statement relating to the Exchange Notes has been filed with the SEC but has not yet become effective. The Exchange Notes may not be sold nor may offers to buy be accepted prior to the time the registration statement is declared effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Exchange Notes in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. This press release is not an offer to exchange existing Notes for Exchange Notes, which we will be making only through a prospectus. Copies of the prospectus and related documents will be obtainable from The Bank of New York, as exchange agent, 101 Barclay Street, New York, New York 10286, attention: Jennifer Pedi. CVS is the largest retail provider of prescriptions in the nation. The Company is the No. 1 drugstore chain in the U.S. with stores in the Northeast, Mid-Atlantic, Southeast and Midwest regions of the country. General information about CVS, including corporate background and press releases, is available through CVS' website at http://www.CVS.com. -Attachments Follow- Attachment 1 CVS Corporation Consolidated Statements of Operations ------------------------------------------------------------------------------------------------------------------------------- Years Ended December 31, 1998 1997 ------------------------------ ------------------------------ As As Previously As As Previously In millions, except per share amounts Restated Reported Restated Reported - -------------------------------------------------------------------------------------------------------------------------------- Net sales $ 15,273.6 $ 15,273.6 $ 13,749.6 $ 13,749.6 Cost of goods sold, buying and warehousing costs 11,144.4 11,144.4 10,031.3 10,031.3 - -------------------------------------------------------------------------------------------------------------------------------- Gross margin 4,129.2 4,129.2 3,718.3 3,718.3 Selling, general and administrative expenses 2,949.0 2,949.0 2,776.0 2,776.0 Depreciation and amortization 249.7 249.7 238.2 238.2 Merger, restructuring and other non-recurring charges 178.6 158.3 422.4 442.7 - -------------------------------------------------------------------------------------------------------------------------------- Total operating expenses 3,377.3 3,357.0 3,436.6 3,456.9 - -------------------------------------------------------------------------------------------------------------------------------- Operating profit 751.9 772.2 281.7 261.4 Interest expense, net 60.9 60.9 44.1 44.1 - -------------------------------------------------------------------------------------------------------------------------------- Earnings from continuing operations before income taxes and extraordinary item 691.0 711.3 237.6 217.3 Income tax provision (306.5) (314.9) (149.2) (140.8) - -------------------------------------------------------------------------------------------------------------------------------- Earnings from continuing operations before extraordinary item 384.5 396.4 88.4 76.5 Discontinued operations, net of tax provision of $12.4 -- -- 17.5 17.5 - -------------------------------------------------------------------------------------------------------------------------------- Earnings before extraordinary item -- -- 105.9 94.0 Extraordinary item, loss related to early retirement of debt, net of tax benefit of $11.4 -- -- (17.1) (17.1) - -------------------------------------------------------------------------------------------------------------------------------- Net earnings $ 384.5 $ 396.4 $ 88.8 $ 76.9 Preference dividends, net of income tax benefit (13.6) (13.6) (13.7) (13.7) - -------------------------------------------------------------------------------------------------------------------------------- Net earnings available to common shareholders $ 370.9 $ 382.8 $ 75.1 $ 63.2 - -------------------------------------------------------------------------------------------------------------------------------- Basic earnings per common share: Earnings from continuing operations before extraordinary item $ 0.96 $ 0.99 $ 0.20 $ 0.17 Earnings from discontinued operations -- -- 0.05 0.05 Extraordinary loss, net of tax benefit -- -- (0.05) (0.05) - -------------------------------------------------------------------------------------------------------------------------------- Net earnings $ 0.96 $ 0.99 $ 0.20 $ 0.17 - -------------------------------------------------------------------------------------------------------------------------------- Weighted average basic common shares outstanding 387.1 387.1 377.2 377.2 - -------------------------------------------------------------------------------------------------------------------------------- Diluted earnings per common share: Earnings from continuing operations before extraordinary item $ 0.95 $ 0.98 $ 0.19 $ 0.16 Earnings from discontinued operations -- -- 0.05 0.05 Extraordinary loss, net of tax benefit -- -- (0.05) (0.05) - -------------------------------------------------------------------------------------------------------------------------------- Net earnings $ 0.95 $ 0.98 $ 0.19 0.16 - -------------------------------------------------------------------------------------------------------------------------------- Weighted average diluted common shares outstanding 405.2 405.2 385.1 385.1 - -------------------------------------------------------------------------------------------------------------------------------- Dividends per common share $ 0.225 $ 0.225 $ 0.220 $ 0.220 - -------------------------------------------------------------------------------------------------------------------------------- Attachment 2 (Page 1 of 2) CVS Corporation Consolidated Statements of Operations --------------------------------------------------------------------------------------------------------------------------------- 1998 ---------------------------------------------------------------------------------------------- First Quarter Second Quarter Third Quarter Fourth Quarter ----------------------- ----------------------- ---------------------- ---------------------- As As As As In millions, except per share As Previously As Previously As Previously As Previously amounts Restated Reported Restated Reported Restated Reported Restated Reported --------------------------------------------------------------------------------------------------------------------------------- Net sales $3,601.5 $3,601.5 $3,755.9 $3,755.9 $3,725.1 $3,725.1 $4,191.1 $4,191.1 Gross margin 1,006.9 1,006.9 1,020.5 1,020.5 $ 995.3 $ 995.3 $1,106.5 $1,106.5 Selling, general & administrative 704.2 704.2 726.4 726.4 742.9 742.9 775.5 775.5 Depreciation and amortization 63.8 63.8 61.2 61.2 60.7 60.7 64.0 64.0 Merger, restructuring and other non-recurring charges 5.1 -- 161.0 158.3 10.6 -- 1.9 -- --------------------------------------------------------------------------------------------------------------------------------- Total operating expenses 773.1 768.0 948.6 945.9 814.2 803.6 841.4 839.5 --------------------------------------------------------------------------------------------------------------------------------- Operating profit 233.8 238.9 71.9 74.6 181.1 191.7 265.1 267.0 Interest expense, net 11.2 11.2 18.9 18.9 15.1 15.1 15.7 15.7 --------------------------------------------------------------------------------------------------------------------------------- Earnings before income taxes 222.6 227.7 53.0 55.7 166.0 176.6 249.4 251.3 Income tax provision 93.6 95.7 38.4 39.5 69.8 74.2 104.7 105.5 --------------------------------------------------------------------------------------------------------------------------------- Net earnings $ 129.0 $ 132.0 $ 14.6 $ 16.2 $ 96.2 $ 102.4 $ 144.7 $ 145.8 Preference dividends, net of income tax benefit (3.4) (3.4) (3.4) (3.4) (3.4) (3.4) (3.4) (3.4) --------------------------------------------------------------------------------------------------------------------------------- Net earnings available to common shareholders $ 125.6 $ 128.6 $ 11.2 $ 12.8 $ 92.8 $ 99.0 $ 141.3 $ 142.4 --------------------------------------------------------------------------------------------------------------------------------- Basic earnings per common share: Net earnings $ 0.33 $ 0.34 $ 0.03 $ 0.03 $ 0.24 $ 0.25 $ 0.36 $ 0.37 --------------------------------------------------------------------------------------------------------------------------------- Weighted average basic common shares outstanding 382.9 382.9 385.8 385.8 389.5 389.5 390.1 390.1 --------------------------------------------------------------------------------------------------------------------------------- Diluted earnings per common share: Net earnings $ 0.32 $ 0.33 $ 0.03 $ 0.03 $ 0.23 $ 0.25 $ 0.36 $ 0.36 --------------------------------------------------------------------------------------------------------------------------------- Weighted average diluted common shares outstanding 400.9 400.9 394.6 394.6 396.1 396.1 407.5 407.5 --------------------------------------------------------------------------------------------------------------------------------- Dividends per common share $ 0.0550 $ 0.0550 $ 0.0550 $ 0.0550 $ 0.0575 $ 0.0575 $ 0.0575 $ 0.0575 --------------------------------------------------------------------------------------------------------------------------------- Attachment 2 (Page 2 of 2) CVS Corporation Consolidated Statements of Operations --------------------------------------------------------------------------------------------------------------------------------- 1997 -------------------------------------------------------------------------------------------- First Quarter Second Quarter Third Quarter Fourth Quarter ---------------------- ---------------------- ---------------------- ---------------------- As As As As In millions, except per share As Previously As Previously As Previously As Previously amounts Restated Reported Restated Reported Restated Reported Restated Reported --------------------------------------------------------------------------------------------------------------------------------- Net sales $3,397.8 $3,397.8 $3,406.8 $3,406.8 $3,328.7 $3,328.7 $3,616.3 $3,616.3 Gross margin 967.9 967.9 873.0 873.0 $ 905.6 $ 905.6 $ 971.8 $ 971.8 Selling, general & administrative 703.3 703.3 693.7 693.7 688.6 688.6 690.4 690.4 Depreciation and amortization 57.7 57.7 58.7 58.7 63.5 63.5 58.3 58.3 Merger, restructuring and other non-recurring charges 31.0 31.0 350.3 411.7 15.1 -- 26.0 -- --------------------------------------------------------------------------------------------------------------------------------- Total operating expenses 792.0 792.0 1,102.7 1,164.1 767.2 752.1 774.7 748.7 --------------------------------------------------------------------------------------------------------------------------------- Operating profit (loss) 175.9 175.9 (229.7) (291.1) 138.4 153.5 197.1 223.1 Interest expense, net 12.9 12.9 16.2 16.2 9.2 9.2 5.8 5.8 --------------------------------------------------------------------------------------------------------------------------------- Earnings (loss) from continuing operations before income taxes and extraordinary item 163.0 163.0 (245.9) (307.3) 129.2 144.3 191.3 217.3 Income tax provision (benefit) 70.9 70.9 (60.5) (85.9) 55.9 62.1 82.9 93.7 --------------------------------------------------------------------------------------------------------------------------------- Earnings (loss) from continuing operations before extraordinary item 92.1 92.1 (185.4) (221.4) 73.3 82.2 108.4 123.6 Discontinued operations, net of tax provision 0.1 0.1 17.4 17.4 -- -- -- -- --------------------------------------------------------------------------------------------------------------------------------- Earnings before extraordinary item 92.2 92.2 (168.0) (204.0) 73.3 82.2 108.4 123.6 Extraordinary loss, net of tax benefit -- -- (17.1) (17.1) -- -- -- -- --------------------------------------------------------------------------------------------------------------------------------- Net earnings (loss) $ 92.2 $ 92.2 $ (185.1) $ (221.1) $ 73.3 $ 82.2 $ 108.4 $ 123.6 Preference dividends, net of income tax benefit (3.5) (3.5) (3.4) (3.4) (3.4) (3.4) (3.4) (3.4) --------------------------------------------------------------------------------------------------------------------------------- Net earnings (loss) available to common shareholders $ 88.7 $ 88.7 $ (188.5) $ (224.5) $ 69.9 $ 78.8 $ 105.0 $ 120.2 --------------------------------------------------------------------------------------------------------------------------------- Basic earnings per common share: Earnings (loss) from continuing operations before extraordinary item $ 0.24 $ 0.24 $ (0.51) $ (0.60) $ 0.18 $ 0.21 $ 0.27 $ 0.31 Earnings from discontinued operations -- -- 0.05 0.05 -- -- -- -- Extraordinary loss, net of tax benefit -- -- (0.05) (0.05) -- -- -- -- --------------------------------------------------------------------------------------------------------------------------------- Net earnings (loss) $ 0.24 $ 0.24 $ (0.51) $ (0.60) $ 0.18 $ 0.21 $ 0.27 $ 0.31 --------------------------------------------------------------------------------------------------------------------------------- Weighted average basic common shares outstanding 370.6 370.6 373.9 373.9 381.7 381.7 382.3 382.3 --------------------------------------------------------------------------------------------------------------------------------- Diluted earnings per common share: Earnings (loss) from continuing operations before extraordinary item $ 0.23 $ 0.23 $ (0.51) $ (0.60) $ 0.18 $ 0.20 $ 0.27 $ 0.31 Earnings from discontinued operations -- -- 0.05 0.05 -- -- -- -- Extraordinary loss, net of tax benefit -- -- (0.05) (0.05) -- -- -- -- --------------------------------------------------------------------------------------------------------------------------------- Net earnings (loss) $ 0.23 $ 0.23 $ (0.51) $ (0.60) $ 0.18 $ 0.20 $ 0.27 $ 0.31 --------------------------------------------------------------------------------------------------------------------------------- Weighted average diluted common shares outstanding 377.4 377.4 373.9 373.9 388.0 388.0 399.6 399.6 --------------------------------------------------------------------------------------------------------------------------------- Dividends per common share $ 0.0550 $ 0.0550 $ 0.0550 $ 0.0550 $ 0.0550 $ 0.0550 $ 0.0550 $ 0.0550 --------------------------------------------------------------------------------------------------------------------------------- Attachment 3 Following is a summary of the effect of the restatement adjustments discussed in the attached press release on CVS' previously reported diluted earnings per common share from continuing operations for 1997 and 1998. - ---------------------------------------------------------------------------------------------------------------------- First Second Third Fourth Full Quarter Quarter Quarter Quarter Year - ---------------------------------------------------------------------------------------------------------------------- 1997: Diluted earnings per common share, as previously reported $ 0.23 $ (0.60) $ 0.20 $ 0.31 $ 0.16 Restatement adjustments: Duplicate Revco information technology systems elimination costs -- 0.04 (0.01) (0.03) -- Non-compatible Revco store merchandise fixture removal costs -- 0.05 (0.01) (0.01) 0.03 - ---------------------------------------------------------------------------------------------------------------------- Diluted earnings per common share, as restated $ 0.23 $ (0.51) $ 0.18 $ 0.27 $ 0.19 - ---------------------------------------------------------------------------------------------------------------------- 1998: Diluted earnings per common share, as previously reported $ 0.33 $ 0.03 $ 0.25 $ 0.36 $ 0.98 Restatement adjustments: Duplicate Arbor information technology systems elimination costs -- 0.01 (0.01) -- -- Non-compatible Revco store merchandise fixture removal costs (0.01) (0.01) (0.01) -- (0.03) - ---------------------------------------------------------------------------------------------------------------------- Diluted earnings per common share, as restated $ 0.32 $ 0.03 $ 0.23 $ 0.36 $ 0.95 - ----------------------------------------------------------------------------------------------------------------------
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