CVS Caremark Announces Record First Quarter Results

Business Wire,  May 1, 2008  

Tags: Caremark Inc., CVS Corp.

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DILUTED EPS GROWTH AT HIGH END OF COMPANY EXPECTATIONS

First Quarter Year-Over-Year Highlights:

* Adjusted EPS of $0.55, which excludes $0.04 in amortization of intangible assets, up 18.3%

* GAAP diluted EPS of $0.51, up 17.4%

* Net revenues of $21.3 billion, up 61.7%

WOONSOCKET, R.I. -- CVS Caremark Corporation (NYSE: CVS), today announced record first quarter revenue and earnings for the quarter ended March 29, 2008.

Net revenues for the thirteen-week period ended March 29, 2008, increased $8.1 billion to $21.3 billion, up from $13.2 billion during the thirteen-week period ended March 31, 2007. Same store sales (sales from stores open more than one year) in the Company's CVS/pharmacy division for the first quarter rose 3.9% over the prior year period. Pharmacy same store sales rose 3.7% and were negatively impacted by approximately 450 basis points due to recent generic introductions, while front-end same store sales increased 4.3%. Same store sales for the first quarter benefited from an earlier Easter (March 23rd this year versus April 8th last year), which shifted more holiday sales into March. The Company estimates the Easter shift had a positive impact of approximately 115 basis points on front-end same store sales for the quarter ended March 29, 2008.

Net earnings for the first quarter ended March 29, 2008, increased 83.1% to $748.5 million or $0.51 per diluted share on a GAAP basis, compared with net earnings of $408.9 million or $0.43 per diluted share in the comparable 2007 period. Adjusted earnings per share, which excludes $0.04 in amortization of intangible assets primarily related to acquisition activity, for the first quarter were $0.55, compared with $0.46 per share in the comparable 2007 period.

Tom Ryan, Chairman, President and Chief Executive Officer of CVS Caremark, stated, "I'm very pleased with our results for the quarter. We delivered strong revenue and margin growth across our businesses that led to earnings at the high end of our expectations. I'm most excited about the substantial progress we have made on our new integrated PBM/retail model, which is resonating strongly in the marketplace."

For the quarter, CVS Caremark opened 41 new retail pharmacy stores; closed 19 retail pharmacy stores, 2 mail order pharmacies and 1 specialty mail order pharmacy. In addition, the Company relocated 53 retail pharmacy stores and 1 specialty pharmacy store. As of March 29, 2008 the Company operated 6,267 retail pharmacy stores, 56 specialty pharmacy stores, 19 specialty mail order pharmacies and 7 mail order pharmacies in 44 states and the District of Columbia.

The Company will be holding a conference call today for the investment community at 8:30 am (EDT) to discuss its 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 Caremark is the largest provider of prescriptions in the nation. The Company fills or manages more than 1 billion prescriptions annually. Through its unmatched breadth of service offerings, CVS Caremark is transforming the delivery of healthcare services in the U.S. The Company is uniquely positioned to effectively manage costs and improve healthcare outcomes through its approximately 6,300 CVS/pharmacy stores; its pharmacy benefit management, mail order and specialty pharmacy division, Caremark Pharmacy Services; its retail-based health clinic subsidiary, MinuteClinic; and its online pharmacy, CVS.com. General information about CVS Caremark is available through the Investor Relations portion of the Company's website, at http://investor.CVS.com, as well as through the press room portion of the Company's 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 "Cautionary Statement Concerning Forward-Looking Statements" in its Annual on Form 10-K for the fiscal year ended December 29, 2007.

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(1) On March 22, 2007, pursuant to the Agreement and Plan of Merger dated as of November 1, 2006 as amended (the "Merger Agreement"), Caremark Rx, Inc. ("Caremark") was merged with and into a newly formed subsidiary of CVS Corporation, with the CVS subsidiary continuing as the surviving entity. Under the terms of the Merger Agreement, Caremark shareholders received 1.67 shares of common stock, par value $0.01 per share of the Company for each share of common stock of Caremark, par value $0.001 per share, issued and outstanding immediately prior to the effective time of the merger. Further, the results of operations for the thirteen weeks ended March 31, 2007 include 10 days of results of the operations of Caremark.