-----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, N9K/A8sWFiNoBlxqETJojBzJGY8jwa9uyZBoqS9bFIp0uy+/xeB83WOi7v9G32ni dgLqZDGC+/9wmhDnD3PSuQ== 0000950123-97-005933.txt : 19970718 0000950123-97-005933.hdr.sgml : 19970718 ACCESSION NUMBER: 0000950123-97-005933 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970717 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970717 SROS: NYSE 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: 1934 Act SEC FILE NUMBER: 001-01011 FILM NUMBER: 97641706 BUSINESS ADDRESS: STREET 1: ONE CVS DR CITY: WOONSOCKET STATE: RI ZIP: 02895 BUSINESS PHONE: 9149254000 MAIL ADDRESS: STREET 1: ONE THEALL ROAD CITY: RYE STATE: NY ZIP: 10580 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 FORM 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): July 17, 1997 CVS CORPORATION (Exact Name of Registrant as Specified in its Charter) DELAWARE 1-1011 05-0494040 (State or Other Jurisdiction of (Commission File Number) (IRS Employer Identification No.) Incorporation)
1 CVS DRIVE 02895 WOONSOCKET, RHODE ISLAND (Zip Code) (Address of Principal Executive Offices) (401) 765-1500 (Registrant's telephone number, including area code) (Former Name or Former Address, if Changed Since Last Report) 2 ITEM 5. OTHER EVENTS. On July 17, 1997, CVS Corporation ("CVS") issued a press release announcing financial results for the second quarter ended June 28, 1997. All reported financial results reflect the treatment of CVS' acquisition of Revco D.S., Inc. on May 29, 1997 as a pooling of interests. A copy of CVS' press release dated July 17, 1997 described above is attached hereto as Exhibit 99.1, and by this reference made a part hereof. ITEM 7. FINANCIAL STATEMENTS, PRO-FORMA FINANCIAL INFORMATION AND EXHIBITS Exhibit 99.1 Press Release Dated July 17, 1997 2 3 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 hereunto duly authorized. CVS CORPORATION Dated: July 17, 1997 By: /s/ Charles Conaway Name: Charles Conaway Title: Chief Financial Officer 3 4 INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION Exhibit 99.1 Press Release dated July 17, 1997 4 EX-99.1 2 PRESS RELEASE 1 Investor Contact: Nancy Christal Media Contact: Wendi Kopsick Vice President Jim Fingeroth Investor Relations Kekst and Company (914) 722-4704 (212) 521-4800 FOR IMMEDIATE RELEASE CVS REPORTS 1997 SECOND QUARTER EPS OF $.52 PER SHARE, BEFORE ONE-TIME CHARGES, FOR COMBINED CVS/REVCO - AN INCREASE OF 18.2% WOONSOCKET, RHODE ISLAND, July 17, 1997 - CVS Corporation (NYSE:CVS) today reported strong financial results for the second quarter ended June 28, 1997. All reported financial results reflect the treatment of the Company's recent acquisition of Revco D.S., Inc. as a pooling of interests. All comparisons to prior years reflect the inclusion of Revco's results. SECOND QUARTER Net sales for the second quarter of 1997 increased 18.2% to $3.2 billion from sales of $2.7 billion for the second quarter last year. Same store sales, including CVS' and Revco's results, rose 9.0%. Pharmacy same store sales rose 16.8% for the combined company. Pharmacy sales represented 54% of total sales for the quarter. Same store sales for CVS alone, rose 8.6% in the second quarter, while Revco same store sales rose 9.5%. Operating profit, before consideration of the 1997 Second Quarter One-Time Charge, increased 17.2% to $180.7 million from $154.2 million in the comparable period last year, which excludes the 1996 One-Time Charge. Earnings from continuing operations, excluding the 1997 Second Quarter One-Time Charge, increased 20.5% to $92.8 million, or $.52 per share, from $77.0 million, or $.44 per share, during the comparable period in 1996 excluding the 1996 One-Time Charge and the TJX Gain. After consideration of the after-tax impact of the 1997 Second Quarter One-Time Charge, the net loss from continuing operations was $230.8 million, or $1.37 per share. During the second quarter of 1997, the Company recorded one-time merger related charges for the following: 1) $411.7 million pre-tax, $278.6 million after-tax, or $1.63 per share, for merger fees, employee severance associated with the closing of Revco's headquarters and exit costs associated with certain store closings and the Revco headquarters; and 2) $75.0 million pre-tax, $45.0 million after-tax, or $0.26 per share, for inventory markdowns on non-compatible Revco merchandise. These charges totaling $486.7 million pre-tax, $323.6 million after-tax, or $1.89 per share, are collectively referred to as the "1997 Second Quarter One-Time Charge". In addition, the Company recorded an after-tax charge of $17.1 million, or $.10 per share, related to the early extinguishment of certain Revco debt assumed as a result of the merger (the "Extraordinary 2 Item"). This charge has been classified as an extraordinary item on the Company's Consolidated Condensed Statement of Operations. CVS' total net loss for the second quarter of 1997, including continuing and discontinued operations, the Extraordinary Item and the after-tax impact of the 1997 Second Quarter One-Time Charge, was $230.5 million, or $1.37 per share, compared to a net loss of $39.3 million, or $.26 per share, in the second quarter of 1996 inclusive of the 1996 One-Time Charge, the TJX Gain and the 1996 Restructuring. SIX MONTHS For the first six months of 1997, net sales increased 20.8% to $6.3 billion from sales of $5.2 billion for the same period last year. Same store sales for the first half of 1997 rose 11.0%, while pharmacy same store sales grew 17.5%. Pharmacy sales were approximately 52% of total sales for the first six months. Same store sales increased 11.9% for CVS alone in the first half of 1997 and 10.1% for Revco. Operating profit, before consideration of the 1997 One-Time Charge, reached $372.8 million, an increase of 24.6% from $299.3 million for the comparable period in 1996, which excludes the 1996 One-Time Charge. Earnings from continuing operations, excluding the 1997 One-Time Charge, increased 30.2% for the first half of 1997 to $194.0 million, or $1.09 per share, from $148.9 million, or $.86 per share for the first six months of 1996, excluding the 1996 One-Time Charge and the TJX Gain. After consideration of the after-tax impact of the 1997 One-Time Charge, the net loss from continuing operations for the first six months of 1997 was $148.1 million, or $.91 per share. CVS' total net loss for the first six months of 1997, including continuing and discontinued operations, the Extraordinary Item and the 1997 One-Time Charge, was $147.7 million, or $.91 per share, compared to net earnings of $6.8 million in the first half of 1996, which included the 1996 One-Time Charge, the TJX Gain and the 1996 Restructuring. CVS Corporation is the nation's largest chain drug store company based on store count and second based on sales volume. The Company operates approximately 3,900 stores in 24 states and the District of Columbia, in the Northeast, Mid-Atlantic, Southeast and Midwest. - Tables Follow - 3 CVS CORPORATION Consolidated Condensed Statements of Operations (Unaudited)
Three Months Ended Six Months Ended - ---------------------------------------------------------------------------------------- June 28, June 29, June 28, June 29, In millions, except per share amounts 1997 1996 1997 1996 - ---------------------------------------------------------------------------------------- Net sales $3,160.6 $2,674.7 $6,321.5 $5,232.9 Cost of goods sold, buying and warehousing costs 2,354.2 1,919.7 4,615.0 3,742.0 - ---------------------------------------------------------------------------------------- Gross margin 806.4 755.0 1,706.5 1,490.9 Selling, general and administrative expenses 645.9 553.6 1,300.4 1,098.0 Depreciation and amortization 54.8 47.2 108.3 93.7 Non-recurring charge 411.7 12.8 442.7 12.8 - ---------------------------------------------------------------------------------------- Total operating expenses 1,112.4 613.6 1,851.4 1,204.5 - ---------------------------------------------------------------------------------------- Operating (loss) profit (306.0) 141.4 (144.9) 286.4 Gain on sale of securities -- (76.6) -- (76.6) Dividend income -- (2.7) -- (5.5) Interest expense, net 16.5 24.7 29.3 44.3 - ---------------------------------------------------------------------------------------- Other expense (income), net 16.5 (54.6) 29.3 (37.8) (Loss) earnings from continuing operations before income taxes and extraordinary item (322.5) 196.0 (174.2) 324.2 Income tax (benefit) provision (91.7) 81.8 (26.1) 137.7 - ---------------------------------------------------------------------------------------- (Loss) earnings from continuing operations before extraordinary item (230.8) 114.2 (148.1) 186.5 Discontinued operations: Loss from operations, net of income tax -- (28.8) -- (54.8) benefits of $13.5 and $17.5 in 1996 Estimated income (loss) on disposal, net of income tax provisions of $12.4 in 1997 and $69.9 and $70.5 in 1996 17.4 (124.7) 17.5 (124.9) - ---------------------------------------------------------------------------------------- Earnings (loss) from discontinued operations 17.4 (153.5) 17.5 (179.7) - ---------------------------------------------------------------------------------------- Net (loss) earnings before extraordinary (213.4) (39.3) (130.6) 6.8 item Extraordinary item, loss related to early (17.1) -- (17.1) -- retirement of debt, net of tax benefit of $11.4 Net (loss) earnings (230.5) (39.3) (147.7) 6.8 Preferred dividends, net (3.4) (3.6) (6.8) (7.2) Net (loss) earnings available to common $(233.9) $ (42.9) $(154.5) $ (.4) shareholders - ---------------------------------------------------------------------------------------- PER COMMON SHARE: (Loss) earnings from continuing operations $ (1.37) $ .66 $ (.91) $ 1.08 Earnings (loss) from discontinued operations .10 (.92) .10 (1.08) Extraordinary item, net of tax (.10) -- (.10) -- - ---------------------------------------------------------------------------------------- Net (loss) earnings $ (1.37) $ (.26) $ (.91) $ -- - ---------------------------------------------------------------------------------------- Weighted average common shares outstanding 167.9 166.2 167.3 164.9 - ---------------------------------------------------------------------------------------- Dividends declared per common share $ .11 $ .11 $ .22 $ .22 - ----------------------------------------------------------------------------------------
See accompanying notes to consolidated condensed financial statements. 4 CVS CORPORATION Notes to Consolidated Condensed Statements of Operations (Unaudited) Note (1) Revco's cost of sales and inventories have been restated from the last-in, first-out ("LIFO") method to the first-in, first-out ("FIFO") method in order to conform the accounting method for the combined inventories. Note (2) During the second quarter of 1997, the Company recorded one-time merger related charges for the following: 1) $411.7 million pre-tax, $278.6 million after-tax, or $1.63 per share, for merger fees, employee severance associated with the closing of Revco's headquarters and exit costs associated with certain store closings and the Revco headquarters; and 2) $75.0 million pre-tax, $45.0 million after-tax, or $0.26 per share, for inventory markdowns on non-compatible Revco merchandise. These charges totaling $486.7 million pre-tax, $323.6 million after-tax, or $1.89 per share, are collectively referred to as the "1997 Second Quarter One-Time Charge". In addition, the Company recorded an after-tax charge of $17.1 million, or $.10 per share, related to the early extinguishment of certain Revco debt assumed as a result of the merger (the "Extraordinary Item"). This charge has been classified as an extraordinary item on the Company's Consolidated Condensed Statements of Operations. Note (3) During the second quarter of 1996, the Company recorded the following one-time items: 1) a one-time $12.8 million charge pre-tax, $6.5 million after-tax, or $.04 per share, resulting from the failed acquisition of Revco by Rite Aid (the "1996 One-Time Charge"); 2) a one-time restructuring charge of $235.0 million pre-tax, $148.0 million after-tax, or $.89 per share, pertaining to discontinued operations (the "1996 Restructuring"); and 3) a $44.1 million, or $.27 per share, after-tax gain from the sale of 1.15 million shares of TJX Companies, Inc. Series E preferred stock (the "TJX Gain"). Note (4) In addition to the 1997 Second Quarter One-Time Charge, the Company recorded, in the first quarter of 1997, a $31.0 million pre-tax, $18.6 million after-tax, or $.11 per share, one-time charge relating to the restructuring of Big B, which was acquired by Revco in November, 1996. The 1997 Second Quarter One-Time Charge and the one-time charge relating to the restructuring of Big B are collectively referred to as the "1997 One-Time Charge". -----END PRIVACY-ENHANCED MESSAGE-----