Posted on: Tuesday, May 21, 2002

Longs loses $13.7 million for quarter

By Shade Elam
Bloomberg News Service

Walnut Creek, Calif. — Longs Drug Stores Corp., an operator of drugstores in the western United States, had a first-quarter loss of $13.7 million because of a decline in the value of some acquisitions.

The loss of 36 cents a share compared with net income of $11.6 million, or 31 cents, a year earlier, Longs said in a release distributed by PR Newswire. Sales in the quarter ended May 2 rose 5.6 percent to $1.09 billion.

Companies must regularly evaluate the goodwill on their books to see whether that value has declined, under an accounting change from last year. Excluding costs for writing down goodwill related to store acquisitions in the Pacific Northwest and California, Longs would have had profit of $11 million, or 29 cents a share, the company said.

Longs Drug said it expects to have profit of 27 to 31 cents in the second quarter, and $1.25 to $1.35 this year, excluding certain expenses.

Goodwill represents the portion of an acquisition price that exceeds the book value of the business purchased. Companies previously expensed goodwill quarterly.

Shares of Longs rose 9 cents to $32.09. They have risen 30 percent in the past year. The announcement was made after the close of U.S. trading.