CVS 1999 Annual Report Download - page 5

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annual earnings growth rate from continuing operations of nearly 28%. At year-end, we operated
We plan to jointly create an integrated, full-service Internet healthcare offering
and make CVS.com the most comprehensive, online destination for healthcare
information and pharmacy needs. We will partner to develop new healthcare
services and programs to benefit consumers, such as a method for electronically
generating, transmitting and billing prescriptions.
CVS also entered a broad-based strategic alliance with Merck-Medco Managed
Care to collaborate on enhanced Internet, retail and specialty pharmacy services for
Merck-Medco’s 51 million health plan members. The Merck-Medco agreement
makes CVS.com the exclusive provider of over-the-counter and general health
products to Merck-Medco’s Internet customers.
We announced another exciting new business in 1999, CVS ProCare,
our specialty pharmacy business that has already established a
significant position in this $14 billion, fast-growing segment of the
pharmacy market. CVS ProCare services individuals with HIV/AIDS,
organ transplants, infertility and those requiring biotechnology-
based injectable products for conditions such as multiple
sclerosis or growth hormone deficiency. By leveraging our
core capabilities and experience with managed care, CVS
ProCare is uniquely positioned to support our managed
care clients in effectively servicing this customer segment.
We have truly created a new business model in
specialty pharmacy with CVS ProCare. Services are
provided through a dedicated specialty pharmacy
mail order facility located in Ohio and through retail
apothecary stores to be located across the nation that
are distinct from our core CVS stores. We expect CVS
ProCare to be a $1 billion business in the next three to
four years.
The key to maximizing the potential of all of our
offerings is to weave them seamlessly together so customers
can make purchases any time, anywhere and any way they
find most convenient. We also will remain committed to pursuing
alliances with leaders in healthcare that leverage the CVS brand and our
significant market leadership position so we can provide end-to-end solutions
as the delivery of healthcare services evolves. We already are experiencing new
growth and market penetration with this strategy, and we have continued to deliver
strong financial performance, including another year of record sales and earnings.
Sales for the 53-week period ended January 1, 2000, increased 18.5 percent to
$18.1 billion compared with the 52-week period ended December 26, 1998, fueled
by a 12.5 percent increase in same-store sales over the prior year. Pharmacy
same-store sales grew a robust 19.4 percent in 1999, driven by the vibrant
dynamics of our industry as well as our success in operating in a managed care
environment, our outstanding customer service and the trust customers have in
our pharmacists. To give perspective to our outstanding growth record, consider
Thomas M. Ryan
Chairman of the Board and
Chief Executive Officer (left)
Charles C. Conaway
President and
Chief Operating Officer (right)