PHILADELPHIA--(BUSINESS WIRE)--Rite Aid Corporation (NYSE: RAD) today reported operating results for its second fiscal quarter ended August 27, 2022.
"We've made good progress on key initiatives during the quarter: driving prescription growth and market share, improving operating margins at Elixir and achieving reductions in SG&A expenses across our business," said Heyward Donigan, president and CEO. "As we look to the second half of the year, we expect continued pressure on consumer spending and supply chain challenges. At the same time, we are ready to meet a high demand for immunizations, while driving continued strong performance at Elixir and further SG&A expense reductions."
Consolidated Second Quarter Summary
(dollars in thousands) | Thirteen Week Period Ended | Twenty-six Week Period Ended | ||||||||||
|
| August 27, 2022 |
| August 28, 2021 |
| August 27, 2022 |
| August 28, 2021 | ||||
Revenues | $ | 5,901,069 | $ | 6,113,000 | $ | 11,915,652 | $ | 12,273,985 | ||||
Net loss |
| (331,290) |
| (100,301) |
| (441,481) |
| (113,358) | ||||
Adjusted EBITDA |
| 78,549 |
| 106,160 |
| 178,679 |
| 245,037 | ||||
For the second quarter, the Company reported a net loss of $331.3 million, or $6.07 loss per share, Adjusted net loss of $34.4 million, or $0.63 loss per share, and Adjusted EBITDA of $78.5 million, or 1.3 percent of revenues.
Revenues for the quarter were $5.90 billion compared to revenues of $6.11 billion in the prior year's quarter, largely due to a reduction in revenue from COVID vaccines and testing, store closures and a planned loss of covered lives at Elixir.
Second quarter net loss was $331.3 million, or $6.07 per share, compared to last year's second quarter net loss of $100.3 million, or $1.86 per share. The increase in net loss is due primarily to a current quarter charge of $252.2 million, or $4.62 per share, for the impairment of goodwill related to the Pharmacy Services Segment. Net loss was also impacted by higher facility exit and impairment charges driven by the Company's previously announced store closures. These items are partially offset by a gain on our repurchase of certain bonds at a discount, a gain on sale of assets resulting from sale leasebacks of two distribution centers and script file sales resulting from the store closures.
Retail Pharmacy Segment
(dollars in thousands) | Thirteen Week Period Ended | Twenty-six Week Period Ended | ||||||||||
|
| August 27, 2022 |
| August 28, 2021 |
| August 27, 2022 |
| August 28, 2021 | ||||
Revenues | $ | 4,231,791 | $ | 4,277,218 | $ | 8,577,147 | $ | 8,628,900 | ||||
Adjusted EBITDA |
| 31,484 |
| 69,369 |
| 105,166 |
| 164,283 | ||||
Retail Pharmacy Segment revenues decreased 1.1 percent over the prior year quarter, driven by a reduction in COVID vaccine and testing revenue as well as store closures, partially offset by an increase in both acute and maintenance prescriptions. Same store sales for the second quarter increased 5.6 percent over the prior year period, consisting of an 8.0 percent increase in pharmacy sales, partially offset by a 0.3 percent decrease in front-end sales. Front-end same store sales, excluding cigarettes and tobacco products, increased 0.2 percent. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, increased 3.1 percent over the prior year period. Total same store prescriptions, excluding COVID immunizations, increased 2.1 percent, with same store maintenance prescriptions increasing 1.2 percent and other same store acute prescriptions increasing 5.3 percent. Prescription sales accounted for 70.7 percent of total drugstore sales. Total store count at the end of the second quarter was 2,352.
Retail Pharmacy Segment Adjusted EBITDA was $31.5 million, or 0.7 percent of revenues, for the second quarter compared to last year's second quarter Adjusted EBITDA of $69.4 million, or 1.6 percent of revenues. The decline in Adjusted EBITDA was due to decreased gross profit, partially offset by a decrease in selling, general and administrative (SG&A) expenses of $45.0 million. Gross profit was negatively impacted by the decline in COVID vaccinations and testing, partially offset by the increase in prescriptions filled. SG&A expenses benefited from lower payroll, occupancy, and other operating costs due to store closures and cost control initiatives.
Pharmacy Services Segment
(dollars in thousands) | Thirteen Week Period Ended | Twenty-six Week Period Ended | ||||||||||
|
| August 27, 2022 |
| August 28, 2021 |
| August 27, 2022 |
| August 28, 2021 | ||||
Revenues | $ | 1,727,241 | $ | 1,898,213 | $ | 3,453,098 | $ | 3,770,495 | ||||
Adjusted EBITDA |
| 47,065 |
| 36,791 |
| 73,513 |
| 80,754 | ||||
Pharmacy Services Segment revenues were $1.7 billion for the quarter, a decrease of 9.0 percent compared to the prior year quarter. The decrease in revenues was primarily the result of a planned decrease in Elixir Insurance membership and a previously announced client loss due to industry consolidation, partially offset by increased utilization of higher cost drugs.
Pharmacy Services Segment Adjusted EBITDA was $47.1 million, or 2.7 percent of revenues, for the second quarter compared to last year's second quarter Adjusted EBITDA of $36.8 million, or 1.9 percent of revenues. The current quarter benefitted from increased gross profit resulting from improved network performance, increases in rebates, and reductions in SG&A expense, partially offset by the decline in revenues associated with lost clients, as mentioned above.
Outlook for Fiscal 2023
Rite Aid Corporation is maintaining its outlook for Fiscal 2023 revenues and lowering its outlook for net loss and Adjusted EBITDA.
Total revenues are expected to be between $23.6 billion and $24.0 billion in fiscal 2023. Retail Pharmacy Segment revenue is expected to be between $17.35 billion and $17.65 billion and Pharmacy Services Segment revenue is expected to be between $6.25 billion and $6.35 billion (net of any intercompany revenues to the Retail Pharmacy Segment).
Net loss is expected to be between $520.3 million and $477.3 million. Our estimates for net loss have increased primarily due to goodwill impairment charges in the Pharmacy Services Segment and increased impairment charges for closed stores.
Adjusted EBITDA is expected to be between $450 million and $490 million versus prior guidance of between $460 million and $500 million, due to expectations of cautious consumer demand and continued supply chain challenges in our front end retail business, partially offset by improved margins at Elixir. Retail Pharmacy Segment Adjusted EBITDA is expected to be between $305 million and $335 million and Pharmacy Services Segment Adjusted EBITDA is expected to be between $145 million and $155 million.
Adjusted net loss per share is expected to be between $1.52 and $0.97.
Capital expenditures are expected to be approximately $225 million, with a focus on investments in digital capabilities, technology, prescription file purchases and distribution center automation.
We expect to generate positive free cash flow in Fiscal 2023.
Conference Call Broadcast
Rite Aid will hold an analyst call at 8:30 a.m. Eastern Time today with remarks by Rite Aid's management team. The call will be broadcast via the Internet at https://investors.riteaid.com. The telephone replay will be available beginning at 12:00 p.m. Eastern Time on Thursday, Sept. 29, 2022 and ending at 11:59 p.m. Eastern Time on Oct. 31 2022. To access the replay of the call, telephone (800) 770-2030 or (647) 362-9199 and enter the seven-digit reservation number 9029129. The webcast replay of the call will also be available at https://investors.riteaid.com starting at 12 p.m. Eastern Time today. The playback will be available until the company's next conference call.
About Rite Aid Corporation
Rite Aid Corporation is on the front lines of delivering healthcare services and retail products to Americans 365 days a year. Our pharmacists are uniquely positioned to engage with customers and improve their health outcomes. We provide an array of whole being health products and services for the entire family through over 2,300 retail pharmacy locations across 17 states. Through Elixir, we provide pharmacy benefits and services to millions of members nationwide. For more information, www.riteaid.com.
Cautionary Statement Regarding Forward-Looking Statements
Statements in this release that are not historical, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements regarding Rite Aid's outlook and guidance for fiscal 2023, including our expectation to generate positive free cash flow in fiscal 2023; the continued impact of the global coronavirus (COVID-19) pandemic on Rite Aid's business; the timing and roll out of the Company's new loyalty program; our key growth initiatives, including our plans to improve adherence; the timing of the opening of four new small format stores in underserved markets; and any assumptions underlying any of the foregoing. Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," and "will" and variations of such words and similar expressions are intended to identify such forward-looking statements.
These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to: risks related to the prolonged impact of the COVID-19 global pandemic and the emerging new variants, including the government responses thereto; the impact of COVID-19 on our workforce, operations, stores, expenses, and supply chain, and the operations or behaviors of our customers, suppliers and business partners; our ability to successfully implement our store closure program and other strategies; the impact of our high level of indebtedness, the ability to refinance such indebtedness on acceptable terms (including the impact of rising interest rates, market volatility, and continuing actions by the United States Federal Reserve) and our ability to satisfy our obligations and the other covenants contained in our debt agreements; outcome of pending or new litigation, including related to Opioids, "usual and customary" pricing or other matters; our ability to monetize (and on reasonably available terms) the CMS receivable created in our Part D business; general competitive, economic, industry, market, political (including healthcare reform) and regulatory conditions (including changes to laws or regulations relating to labor or wages), and regulatory conditions, including continued impacts of inflation or other pricing environment factors on our costs, liquidity and our ability to pass on price increases to our customers, including as a result of inflationary and deflationary pressures, a decline in consumer financial position, whether due to inflation or other factors, as well as other factors specific to the markets in which we operate; the impact of private and public third-party payers continued reduction in prescription drug reimbursements and efforts to encourage mail order; our ability to manage expenses and our investments in working capital; our ability to achieve the benefits of our efforts to reduce the costs of our generic and other drugs; our ability to achieve cost savings and other benefits of our restructuring efforts within our anticipated timeframe, if at all; the outcome of our continuing efforts to monitor and comply with applicable laws, regulations, policies and procedures; and our ability to partner and have relationships with health plans and health systems.
These and other risks, assumptions and uncertainties are more fully described in Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K and in other documents that we file or furnish with the Securities and Exchange Commission (the "SEC"), which you are encouraged to read. To the extent that COVID-19 adversely affects our business and financial results, it may also have the effect of heightening many of such risk factors.
Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to rely on these forward-looking statements, which speak only as of the date they are made.
The degree to which COVID-19 may adversely affect Rite Aid's results and operations, including its ability to achieve its outlook for fiscal 2023 guidance, will depend on numerous evolving factors and future developments, which are highly uncertain, including, but not limited to, federal, state and local governmental policies and initiatives designed to reduce the transmission of COVID-19 and emerging new variants and how quickly and to what extent normal economic and operating conditions can resume. As a result, the impact on Rite Aid's financial and operating results cannot be reasonably estimated with specificity at this time, but the impact could be material. Rite Aid expressly disclaims any current intention, and assumes no duty, to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise.
All references to "Company" and "Rite Aid" as used throughout this release refer to Rite Aid Corporation and its affiliates.
Reconciliation of Non-GAAP Financial Measures
Rite Aid separately reports financial results on the basis of Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share, Adjusted EBITDA, Adjusted EBITDA Gross Profit and Adjusted EBITDA SG&A, which are non-GAAP financial measures. See the attached tables for a reconciliation of Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Adjusted EBITDA to net income (loss), and net income (loss) per diluted share, which are the most directly comparable GAAP financial measures. Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share exclude amortization expense, merger and acquisition-related costs, non-recurring litigation and other contractual settlements, gains or losses on debt modifications and retirements, LIFO adjustments, goodwill and intangible asset impairment charges, restructuring-related costs, the gain or loss on Bartell acquisition, and the change in estimate related to manufacturer rebate receivables. Rite Aid believes Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share serve as appropriate measures to be used in evaluating the performance of its business and help its investors better compare its operating performance over multiple periods.
Adjusted EBITDA is defined as net income (loss) excluding the impact of income taxes, interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility exit and impairment, goodwill and intangible asset impairment charges, inventory write-downs related to store closings, gains or losses on debt modifications and retirements, and other items (including stock-based compensation expense, merger and acquisition-related costs, non-recurring litigation and other contractual settlements, severance, restructuring-related costs, costs related to facility closures, gain or loss on sale of assets, the gain or loss on Bartell acquisition, and the change in estimate related to manufacturer rebate receivables). The add back of LIFO (credit) charge when calculating Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share removes the entire impact of LIFO (credits) charges, and effectively reflects Rite Aid's results as if the company was on a FIFO inventory basis. Rite Aid believes Adjusted EBITDA serves as an appropriate measure in evaluating the performance of its business and helps its investors better compare its operating performance with its competitors.
Adjusted EBITDA Gross Profit includes LIFO adjustments, depreciation and amortization (COGS portion only) and other items. See the attached tables for a reconciliation of Adjusted EBITDA Gross Profit to Revenue, which is the most directly comparable GAAP financial measure. Adjusted EBITDA SG&A excludes depreciation and amortization (SG&A portion only), stock-based compensation expense, merger and acquisition-related costs, non-recurring litigation and other contractual settlements, and other items. See the attached tables for a reconciliation of Adjusted EBITDA SG&A to Revenue, which is the most directly comparable GAAP financial measure. The Company believes Adjusted EBITDA Gross Profit and Adjusted EBITDA SG&A serve as appropriate measures in evaluating the performance of its business and helps its investors better compare its operating performance with its competitors.
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||
| (Dollars in thousands) | |||||||||
| (unaudited) | |||||||||
| August 27, 2022 | February 26, 2022 | ||||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 46,808 |
| $ | 39,721 |
| |||
| Accounts receivable, net |
| 1,564,388 |
|
| 1,343,496 |
| |||
| Inventories, net of LIFO reserve of $497,294 and $487,173 |
| 2,026,216 |
|
| 1,959,389 |
| |||
| Prepaid expenses and other current assets |
| 103,452 |
|
| 106,749 |
| |||
| Total current assets |
| 3,740,864 |
|
| 3,449,355 |
| |||
| Property, plant and equipment, net |
| 950,962 |
|
| 989,167 |
| |||
| Operating lease right-of-use assets |
| 2,679,500 |
|
| 2,813,535 |
| |||
| Goodwill |
| 626,936 |
|
| 879,136 |
| |||
| Other intangibles, net |
| 268,040 |
|
| 291,196 |
| |||
| Deferred tax assets |
| 13,938 |
|
| 20,071 |
| |||
| Other assets |
| 86,885 |
|
| 86,543 |
| |||
| Total assets | $ | 8,367,125 |
| $ | 8,529,003 |
| |||
| LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | |||||||||
| Current liabilities: | |||||||||
| Current maturities of long-term debt and lease financing obligations | $ | 5,581 |
| $ | 5,544 |
| |||
| Accounts payable |
| 1,511,673 |
|
| 1,571,261 |
| |||
| Accrued salaries, wages and other current liabilities |
| 729,561 |
|
| 780,632 |
| |||
| Current portion of operating lease liabilities |
| 571,952 |
|
| 575,651 |
| |||
| Total current liabilities |
| 2,818,767 |
|
| 2,933,088 |
| |||
| Long-term debt, less current maturities |
| 3,222,655 |
|
| 2,732,986 |
| |||
| Long-term operating lease liabilities |
| 2,496,476 |
|
| 2,597,090 |
| |||
| Lease financing obligations, less current maturities |
| 14,009 |
|
| 14,830 |
| |||
| Other noncurrent liabilities |
| 151,616 |
|
| 151,976 |
| |||
| Total liabilities |
| 8,703,523 |
|
| 8,429,970 |
| |||
| Commitments and contingencies |
| - |
|
| - |
| |||
| Stockholders' (deficit) equity: | |||||||||
| Common stock |
| 56,580 |
|
| 55,752 |
| |||
| Additional paid-in capital |
| 5,915,521 |
|
| 5,910,299 |
| |||
| Accumulated deficit |
| (6,293,062 | ) |
| (5,851,581 | ) | |||
| Accumulated other comprehensive loss |
| (15,437 | ) |
| (15,437 | ) | |||
| Total stockholders' (deficit) equity |
| (336,398 | ) |
| 99,033 |
| |||
| Total liabilities and stockholders' (deficit) equity | $ | 8,367,125 |
| $ | 8,529,003 |
| |||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
| (Dollars in thousands, except per share amounts) | |||||||||
| (unaudited) | |||||||||
| Thirteen weeks ended August 27, 2022 | Thirteen weeks ended August 28, 2021 | ||||||||
| Revenues | $ | 5,901,069 |
| $ | 6,113,000 |
| |||
| Costs and expenses: | |||||||||
| Cost of revenues |
| 4,746,574 |
|
| 4,867,076 |
| |||
| Selling, general and administrative expenses |
| 1,193,553 |
|
| 1,267,753 |
| |||
| Facility exit and impairment charges |
| 45,845 |
|
| 11,353 |
| |||
| Goodwill and intangible asset impairment charges |
| 252,200 |
|
| - |
| |||
| Interest expense |
| 52,533 |
|
| 48,592 |
| |||
| (Gain) loss on debt modifications and retirements, net |
| (41,312 | ) |
| 2,839 |
| |||
| (Gain) loss on sale of assets, net |
| (29,001 | ) |
| 12,378 |
| |||
| 6,220,392 |
|
| 6,209,991 |
| ||||
| Loss before income taxes |
| (319,323 | ) |
| (96,991 | ) | |||
| Income tax expense |
| 11,967 |
|
| 3,310 |
| |||
| Net loss | $ | (331,290 | ) | $ | (100,301 | ) | |||
| Basic and diluted loss per share: | |||||||||
| Numerator for loss per share: | |||||||||
| Net loss attributable to common stockholders - basic and diluted | $ | (331,290 | ) | $ | (100,301 | ) | |||
| Denominator: | |||||||||
| Basic and diluted weighted average shares |
| 54,548 |
|
| 53,989 |
| |||
| Basic and diluted loss per share | $ | (6.07 | ) | $ | (1.86 | ) | |||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
| (Dollars in thousands, except per share amounts) | |||||||||
| (unaudited) | |||||||||
| Twenty-six weeks ended August 27, 2022 | Twenty-six weeks ended August 28, 2021 | ||||||||
| Revenues | $ | 11,915,652 |
| $ | 12,273,985 |
| |||
| Costs and expenses: | |||||||||
| Cost of revenues |
| 9,564,428 |
|
| 9,743,186 |
| |||
| Selling, general and administrative expenses |
| 2,411,482 |
|
| 2,513,115 |
| |||
| Facility exit and impairment charges |
| 112,416 |
|
| 20,184 |
| |||
| Goodwill and intangible asset impairment charges |
| 252,200 |
|
| - |
| |||
| Interest expense |
| 100,652 |
|
| 97,713 |
| |||
| (Gain) loss on debt modifications and retirements, net |
| (41,312 | ) |
| 3,235 |
| |||
| (Gain) loss on sale of assets, net |
| (58,197 | ) |
| 5,820 |
| |||
| 12,341,669 |
|
| 12,383,253 |
| ||||
| Loss before income taxes |
| (426,017 | ) |
| (109,268 | ) | |||
| Income tax expense |
| 15,464 |
|
| 4,090 |
| |||
| Net loss | $ | (441,481 | ) | $ | (113,358 | ) | |||
| Basic and diluted loss per share: | |||||||||
| Numerator for loss per share: | |||||||||
| Net loss attributable to common stockholders - basic and diluted | $ | (441,481 | ) | $ | (113,358 | ) | |||
| Denominator: | |||||||||
| Basic and diluted weighted average shares |
| 54,453 |
|
| 53,920 |
| |||
| Basic and diluted loss per share | $ | (8.11 | ) | $ | (2.10 | ) | |||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Thirteen weeks ended August 27, 2022 | Thirteen weeks ended August 28, 2021 | ||||||||||||||||
| OPERATING ACTIVITIES: | |||||||||||||||||
| Net loss | $ | (331,290 | ) | $ | (100,301 | ) | |||||||||||
| Adjustments to reconcile to net cash (used in) provided by operating activities: | |||||||||||||||||
| Depreciation and amortization |
| 68,564 |
|
| 73,859 |
| |||||||||||
| Facility exit and impairment charges |
| 45,845 |
|
| 11,353 |
| |||||||||||
| Goodwill and intangible asset impairment charges |
| 252,200 |
|
| - |
| |||||||||||
| LIFO charge (credit) |
| 10,121 |
|
| (3,993 | ) | |||||||||||
| Change in allowances for uncollectible accounts receivable |
| (5,434 | ) |
| - |
| |||||||||||
| (Gain) loss on sale of assets, net |
| (29,001 | ) |
| 12,378 |
| |||||||||||
| Stock-based compensation expense |
| 4,735 |
|
| 5,792 |
| |||||||||||
| (Gain) loss on debt modifications and retirements, net |
| (41,312 | ) |
| 2,839 |
| |||||||||||
| Changes in deferred taxes |
| 6,133 |
|
| - |
| |||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts receivable |
| (107,215 | ) |
| (63,368 | ) | |||||||||||
| Inventories |
| (61,578 | ) |
| (31,014 | ) | |||||||||||
| Accounts payable |
| 94,229 |
|
| 40,797 |
| |||||||||||
| Operating lease right-of-use assets and operating lease liabilities |
| (16,901 | ) |
| (6,400 | ) | |||||||||||
| Other assets |
| (11,621 | ) |
| 17,207 |
| |||||||||||
| Other liabilities |
| (76,699 | ) |
| 66,574 |
| |||||||||||
| Net cash (used in) provided by operating activities |
| (199,224 | ) |
| 25,723 |
| |||||||||||
| INVESTING ACTIVITIES: | |||||||||||||||||
| Payments for property, plant and equipment |
| (49,067 | ) |
| (46,192 | ) | |||||||||||
| Intangible assets acquired |
| (3,108 | ) |
| (9,043 | ) | |||||||||||
| Proceeds from insured loss |
| - |
|
| 10,436 |
| |||||||||||
| Proceeds from dispositions of assets and investments |
| 10,164 |
|
| 2,228 |
| |||||||||||
| Proceeds from sale-leaseback transactions |
| 45,986 |
|
| 6,729 |
| |||||||||||
| Net cash provided by (used in) investing activities |
| 3,975 |
|
| (35,842 | ) | |||||||||||
| FINANCING ACTIVITIES: | |||||||||||||||||
| Proceeds from issuance of long-term debt |
| - |
|
| 350,000 |
| |||||||||||
| Net proceeds from revolver |
| 386,000 |
|
| 211,000 |
| |||||||||||
| Principal payments on long-term debt |
| (151,034 | ) |
| (451,047 | ) | |||||||||||
| Change in zero balance cash accounts |
| (46,622 | ) |
| (52,801 | ) | |||||||||||
| Financing fees paid for early debt redemption |
| (881 | ) |
| (831 | ) | |||||||||||
| Payments for taxes related to net share settlement of equity awards |
| (1,466 | ) |
| (2,186 | ) | |||||||||||
| Deferred financing costs paid |
| - |
|
| (15,932 | ) | |||||||||||
| Net cash provided by financing activities |
| 185,997 |
|
| 38,203 |
| |||||||||||
| (Decrease) increase in cash and cash equivalents |
| (9,252 | ) |
| 28,084 |
| |||||||||||
| Cash and cash equivalents, beginning of period |
| 56,060 |
|
| 118,480 |
| |||||||||||
| Cash and cash equivalents, end of period | $ | 46,808 |
| $ | 146,564 |
| |||||||||||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Twenty-six weeks ended August 27, 2022 | Twenty-six weeks ended August 28, 2021 | ||||||||||||||||
| OPERATING ACTIVITIES: | |||||||||||||||||
| Net loss | $ | (441,481 | ) | $ | (113,358 | ) | |||||||||||
| Adjustments to reconcile to net cash (used in) provided by operating activities: | |||||||||||||||||
| Depreciation and amortization |
| 138,637 |
|
| 149,718 |
| |||||||||||
| Facility exit and impairment charges |
| 112,416 |
|
| 20,184 |
| |||||||||||
| Goodwill and intangible asset impairment charges |
| 252,200 |
|
| - |
| |||||||||||
| LIFO charge (credit) |
| 10,121 |
|
| (7,986 | ) | |||||||||||
| Change in allowances for uncollectible accounts receivable |
| (1,671 | ) |
| - |
| |||||||||||
| (Gain) loss on sale of assets, net |
| (58,197 | ) |
| 5,820 |
| |||||||||||
| Stock-based compensation expense |
| 8,069 |
|
| 8,603 |
| |||||||||||
| (Gain) loss on debt modifications and retirements, net |
| (41,312 | ) |
| 3,235 |
| |||||||||||
| Changes in deferred taxes |
| 6,133 |
|
| - |
| |||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts receivable |
| (211,673 | ) |
| (212,855 | ) | |||||||||||
| Inventories |
| (77,405 | ) |
| (19,096 | ) | |||||||||||
| Accounts payable |
| (43,343 | ) |
| 91,324 |
| |||||||||||
| Operating lease right-of-use assets and operating lease liabilities |
| (31,713 | ) |
| (12,309 | ) | |||||||||||
| Other assets |
| (10,870 | ) |
| 25,185 |
| |||||||||||
| Other liabilities |
| (61,372 | ) |
| 101,133 |
| |||||||||||
| Net cash (used in) provided by operating activities |
| (451,461 | ) |
| 39,598 |
| |||||||||||
| INVESTING ACTIVITIES: | |||||||||||||||||
| Payments for property, plant and equipment |
| (122,243 | ) |
| (105,356 | ) | |||||||||||
| Intangible assets acquired |
| (15,356 | ) |
| (14,479 | ) | |||||||||||
| Proceeds from insured loss |
| - |
|
| 10,436 |
| |||||||||||
| Proceeds from dispositions of assets and investments |
| 41,003 |
|
| 4,676 |
| |||||||||||
| Proceeds from sale-leaseback transactions |
| 45,986 |
|
| 14,185 |
| |||||||||||
| Net cash used in investing activities |
| (50,610 | ) |
| (90,538 | ) | |||||||||||
| FINANCING ACTIVITIES: | |||||||||||||||||
| Proceeds from issuance of long-term debt |
| - |
|
| 350,000 |
| |||||||||||
| Net proceeds from revolver |
| 677,000 |
|
| 250,000 |
| |||||||||||
| Principal payments on long-term debt |
| (152,011 | ) |
| (542,988 | ) | |||||||||||
| Change in zero balance cash accounts |
| (12,931 | ) |
| (844 | ) | |||||||||||
| Financing fees paid for early debt redemption |
| (881 | ) |
| (833 | ) | |||||||||||
| Payments for taxes related to net share settlement of equity awards |
| (2,019 | ) |
| (2,221 | ) | |||||||||||
| Deferred financing costs paid |
| - |
|
| (16,512 | ) | |||||||||||
| Net cash provided by financing activities |
| 509,158 |
|
| 36,602 |
| |||||||||||
| Increase (decrease) in cash and cash equivalents |
| 7,087 |
|
| (14,338 | ) | |||||||||||
| Cash and cash equivalents, beginning of period |
| 39,721 |
|
| 160,902 |
| |||||||||||
| Cash and cash equivalents, end of period | $ | 46,808 |
| $ | 146,564 |
| |||||||||||
| RITE AID CORPORATION AND SUBSIDIARIES | ||||||||||
| SUPPLEMENTAL SEGMENT OPERATING INFORMATION | ||||||||||
| (Dollars in thousands) | ||||||||||
| (unaudited) | ||||||||||
| Thirteen weeks ended August 27, 2022 | Thirteen weeks ended August 28, 2021 | |||||||||
| Retail Pharmacy Segment | ||||||||||
| Revenues (a) | $ | 4,231,791 |
| $ | 4,277,218 |
| ||||
| Cost of revenues (a) |
| 3,188,755 |
|
| 3,136,856 |
| ||||
| Gross profit |
| 1,043,036 |
|
| 1,140,362 |
| ||||
| LIFO charge (credit) |
| 10,121 |
|
| (3,993 | ) | ||||
| FIFO gross profit |
| 1,053,157 |
|
| 1,136,369 |
| ||||
| Adjusted EBITDA gross profit |
| 1,056,055 |
|
| 1,138,913 |
| ||||
| Gross profit as a percentage of revenues |
| 24.65 | % |
| 26.66 | % | ||||
| LIFO charge (credit) as a percentage of revenues |
| 0.24 | % |
| -0.09 | % | ||||
| FIFO gross profit as a percentage of revenues |
| 24.89 | % |
| 26.57 | % | ||||
| Adjusted EBITDA gross profit as a percentage of revenues |
| 24.96 | % |
| 26.63 | % | ||||
| Selling, general and administrative expenses |
| 1,100,775 |
|
| 1,163,352 |
| ||||
| Adjusted EBITDA selling, general and administrative expenses |
| 1,024,571 |
|
| 1,069,544 |
| ||||
| Selling, general and administrative expenses as a percentage of revenues |
| 26.01 | % |
| 27.20 | % | ||||
| Adjusted EBITDA selling, general and administrative expenses as a percentage of revenues |
| 24.21 | % |
| 25.01 | % | ||||
| Cash interest expense |
| 49,619 |
|
| 45,599 |
| ||||
| Non-cash interest expense |
| 2,914 |
|
| 2,993 |
| ||||
| Total interest expense |
| 52,533 |
|
| 48,592 |
| ||||
| Adjusted EBITDA |
| 31,484 |
|
| 69,369 |
| ||||
| Adjusted EBITDA as a percentage of revenues |
| 0.74 | % |
| 1.62 | % | ||||
| Pharmacy Services Segment | ||||||||||
| Revenues (a) | $ | 1,727,241 |
| $ | 1,898,213 |
| ||||
| Cost of revenues (a) |
| 1,615,782 |
|
| 1,792,651 |
| ||||
| Gross profit |
| 111,459 |
|
| 105,562 |
| ||||
| Gross profit as a percentage of revenues |
| 6.45 | % |
| 5.56 | % | ||||
| Adjusted EBITDA |
| 47,065 |
|
| 36,791 |
| ||||
| Adjusted EBITDA as a percentage of revenues |
| 2.72 | % |
| 1.94 | % | ||||
| (a) - | Revenues and cost of revenues include $57,963 and $62,431 of inter-segment activity for the thirteen weeks ended August 27, 2022 and August 28, 2021, respectively, that is eliminated in consolidation. | ||||
| RITE AID CORPORATION AND SUBSIDIARIES | ||||||||||
| SUPPLEMENTAL SEGMENT OPERATING INFORMATION | ||||||||||
| (Dollars in thousands) | ||||||||||
| (unaudited) | ||||||||||
| Twenty-six weeks ended August 27, 2022 | Twenty-six weeks ended August 28, 2021 | |||||||||
| Retail Pharmacy Segment | ||||||||||
| Revenues (a) | $ | 8,577,147 |
| $ | 8,628,900 |
| ||||
| Cost of revenues (a) |
| 6,436,754 |
|
| 6,318,604 |
| ||||
| Gross profit |
| 2,140,393 |
|
| 2,310,296 |
| ||||
| LIFO charge (credit) |
| 10,121 |
|
| (7,986 | ) | ||||
| FIFO gross profit |
| 2,150,514 |
|
| 2,302,310 |
| ||||
| Adjusted EBITDA gross profit |
| 2,162,707 |
|
| 2,307,251 |
| ||||
| Gross profit as a percentage of revenues |
| 24.95 | % |
| 26.77 | % | ||||
| LIFO charge (credit) as a percentage of revenues |
| 0.12 | % |
| -0.09 | % | ||||
| FIFO gross profit as a percentage of revenues |
| 25.07 | % |
| 26.68 | % | ||||
| Adjusted EBITDA gross profit as a percentage of revenues |
| 25.21 | % |
| 26.74 | % | ||||
| Selling, general and administrative expenses |
| 2,217,989 |
|
| 2,319,391 |
| ||||
| Adjusted EBITDA selling, general and administrative expenses |
| 2,057,541 |
|
| 2,142,968 |
| ||||
| Selling, general and administrative expenses as a percentage of revenues |
| 25.86 | % |
| 26.88 | % | ||||
| Adjusted EBITDA selling, general and administrative expenses as a percentage of revenues |
| 23.99 | % |
| 24.83 | % | ||||
| Cash interest expense |
| 94,863 |
|
| 91,623 |
| ||||
| Non-cash interest expense |
| 5,789 |
|
| 6,090 |
| ||||
| Total interest expense |
| 100,652 |
|
| 97,713 |
| ||||
| Adjusted EBITDA |
| 105,166 |
|
| 164,283 |
| ||||
| Adjusted EBITDA as a percentage of revenues |
| 1.23 | % |
| 1.90 | % | ||||
| Pharmacy Services Segment | ||||||||||
| Revenues (a) | $ | 3,453,098 |
| $ | 3,770,495 |
| ||||
| Cost of revenues (a) |
| 3,242,267 |
|
| 3,549,992 |
| ||||
| Gross profit |
| 210,831 |
|
| 220,503 |
| ||||
| Gross profit as a percentage of revenues |
| 6.11 | % |
| 5.85 | % | ||||
| Adjusted EBITDA |
| 73,513 |
|
| 80,754 |
| ||||
| Adjusted EBITDA as a percentage of revenues |
| 2.13 | % |
| 2.14 | % | ||||
| (a) - | Revenues and cost of revenues include $114,593 and $125,410 of inter-segment activity for the twenty-six weeks ended August 27, 2022 and August 28, 2021, respectively, that is eliminated in consolidation. | ||||
RITE AID CORPORATION AND SUBSIDIARIES | ||||||||||||
| SUPPLEMENTAL INFORMATION | ||||||||||||
| RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA | ||||||||||||
| (In thousands) | ||||||||||||
| (unaudited) | ||||||||||||
| Thirteen weeks ended August 27, 2022 | Thirteen weeks ended August 28, 2021 | |||||||||||
| Reconciliation of net loss to adjusted EBITDA: | ||||||||||||
| Net loss | $ | (331,290 | ) | $ | (100,301 | ) | ||||||
| Adjustments: | ||||||||||||
| Interest expense |
| 52,533 |
|
| 48,592 |
| ||||||
| Income tax expense |
| 11,967 |
|
| 3,310 |
| ||||||
| Depreciation and amortization |
| 68,564 |
|
| 73,859 |
| ||||||
| LIFO charge (credit) |
| 10,121 |
|
| (3,993 | ) | ||||||
| Facility exit and impairment charges |
| 45,845 |
|
| 11,353 |
| ||||||
| Goodwill and intangible asset impairment charges |
| 252,200 |
|
| - |
| ||||||
| (Gain) loss on debt modifications and retirements, net |
| (41,312 | ) |
| 2,839 |
| ||||||
| Merger and Acquisition-related costs |
| - |
|
| 4,591 |
| ||||||
| Stock-based compensation expense |
| 4,735 |
|
| 5,792 |
| ||||||
| Restructuring-related costs |
| 12,805 |
|
| 9,584 |
| ||||||
| Inventory write-downs related to store closings |
| 1,094 |
|
| 798 |
| ||||||
| Litigation and other contractual settlements |
| 20,093 |
|
| 34,212 |
| ||||||
| (Gain) loss on sale of assets, net |
| (29,001 | ) |
| 12,378 |
| ||||||
| Other |
| 195 |
|
| 3,146 |
| ||||||
| Adjusted EBITDA | $ | 78,549 |
| $ | 106,160 |
| ||||||
| Percent of revenues |
| 1.33 | % |
| 1.74 | % | ||||||
| RITE AID CORPORATION AND SUBSIDIARIES | ||||||||||||
| SUPPLEMENTAL INFORMATION | ||||||||||||
| RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA | ||||||||||||
| (In thousands) | ||||||||||||
| (unaudited) | ||||||||||||
| Twenty-six weeks ended August 27, 2022 | Twenty-six weeks ended August 28, 2021 | |||||||||||
| Reconciliation of net loss to adjusted EBITDA: | ||||||||||||
| Net loss | $ | (441,481 | ) | $ | (113,358 | ) | ||||||
| Adjustments: | ||||||||||||
| Interest expense |
| 100,652 |
|
| 97,713 |
| ||||||
| Income tax expense |
| 15,464 |
|
| 4,090 |
| ||||||
| Depreciation and amortization |
| 138,637 |
|
| 149,718 |
| ||||||
| LIFO charge (credit) |
| 10,121 |
|
| (7,986 | ) | ||||||
| Facility exit and impairment charges |
| 112,416 |
|
| 20,184 |
| ||||||
| Goodwill and intangible asset impairment charges |
| 252,200 |
|
| - |
| ||||||
| (Gain) loss on debt modifications and retirements, net |
| (41,312 | ) |
| 3,235 |
| ||||||
| Merger and Acquisition-related costs |
| - |
|
| 8,477 |
| ||||||
| Stock-based compensation expense |
| 8,069 |
|
| 8,603 |
| ||||||
| Restructuring-related costs |
| 35,451 |
|
| 15,516 |
| ||||||
| Inventory write-downs related to store closings |
| 9,049 |
|
| 1,270 |
| ||||||
| Litigation and other contractual settlements |
| 38,364 |
|
| 48,212 |
| ||||||
| (Gain) loss on sale of assets, net |
| (58,197 | ) |
| 5,820 |
| ||||||
| Other |
| (754 | ) |
| 3,543 |
| ||||||
| Adjusted EBITDA | $ | 178,679 |
| $ | 245,037 |
| ||||||
| Percent of revenues |
| 1.50 | % |
| 2.00 | % | ||||||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||||
| SUPPLEMENTAL INFORMATION | |||||||||||
| ADJUSTED NET LOSS | |||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||
| (unaudited) | |||||||||||
| Thirteen weeks ended August 27, 2022 | Thirteen weeks ended August 28, 2021 | ||||||||||
| Net loss | $ | (331,290 | ) | $ | (100,301 | ) | |||||
| Add back - Income tax expense |
| 11,967 |
|
| 3,310 |
| |||||
| Loss before income taxes |
| (319,323 | ) |
| (96,991 | ) | |||||
| Adjustments: | |||||||||||
| Amortization expense |
| 18,420 |
|
| 19,953 |
| |||||
| LIFO charge (credit) |
| 10,121 |
|
| (3,993 | ) | |||||
| Goodwill and intangible asset impairment charges |
| 252,200 |
|
| - |
| |||||
| (Gain) loss on debt modifications and retirements, net |
| (41,312 | ) |
| 2,839 |
| |||||
| Merger and Acquisition-related costs |
| - |
|
| 4,591 |
| |||||
| Restructuring-related costs |
| 12,805 |
|
| 9,584 |
| |||||
| Litigation and other contractual settlements |
| 20,093 |
|
| 34,212 |
| |||||
| Adjusted loss before income taxes |
| (46,996 | ) |
| (29,805 | ) | |||||
| Adjusted income tax benefit (a) |
| (12,576 | ) |
| (7,839 | ) | |||||
| Adjusted net loss | $ | (34,420 | ) | $ | (21,966 | ) | |||||
| Adjusted net loss per diluted share: | |||||||||||
| Numerator for adjusted net loss per diluted share: | |||||||||||
| Adjusted net loss | $ | (34,420 | ) | $ | (21,966 | ) | |||||
| Denominator: | |||||||||||
| Basic and diluted weighted average shares |
| 54,548 |
|
| 53,989 |
| |||||
| Net loss per diluted share | $ | (6.07 | ) | $ | (1.86 | ) | |||||
| Adjusted net loss per diluted share | $ | (0.63 | ) | $ | (0.41 | ) | |||||
| (a) | The fiscal year 2023 and 2022 annual effective tax rates, calculated using a federal rate plus a net state rate that excluded the impact of state NOL's, state credits and valuation allowance, was used for the thirteen weeks ended August 27, 2022 and August 28, 2021, respectively. | ||||||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||||
| SUPPLEMENTAL INFORMATION | |||||||||||
| ADJUSTED NET LOSS | |||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||
| (unaudited) | |||||||||||
| Twenty-six weeks ended August 27, 2022 | Twenty-six weeks ended August 28, 2021 | ||||||||||
| Net loss | $ | (441,481 | ) | $ | (113,358 | ) | |||||
| Add back - Income tax expense |
| 15,464 |
|
| 4,090 |
| |||||
| Loss before income taxes |
| (426,017 | ) |
| (109,268 | ) | |||||
| Adjustments: | |||||||||||
| Amortization expense |
| 39,046 |
|
| 40,413 |
| |||||
| LIFO charge (credit) |
| 10,121 |
|
| (7,986 | ) | |||||
| Goodwill and intangible asset impairment charges |
| 252,200 |
|
| - |
| |||||
| (Gain) loss on debt modifications and retirements, net |
| (41,312 | ) |
| 3,235 |
| |||||
| Merger and Acquisition-related costs |
| - |
|
| 8,477 |
| |||||
| Restructuring-related costs |
| 35,451 |
|
| 15,516 |
| |||||
| Litigation and other contractual settlements |
| 38,364 |
|
| 48,212 |
| |||||
| Adjusted loss before income taxes |
| (92,147 | ) |
| (1,401 | ) | |||||
| Adjusted income tax benefit (a) |
| (24,659 | ) |
| (368 | ) | |||||
| Adjusted net loss | $ | (67,488 | ) | $ | (1,033 | ) | |||||
| Adjusted net loss per diluted share: | |||||||||||
| Numerator for adjusted net loss per diluted share: | |||||||||||
| Adjusted net loss | $ | (67,488 | ) | $ | (1,033 | ) | |||||
| Denominator: | |||||||||||
| Basic and diluted weighted average shares |
| 54,453 |
|
| 53,920 |
| |||||
| Net loss per diluted share | $ | (8.11 | ) | $ | (2.10 | ) | |||||
| Adjusted net loss per diluted share | $ | (1.24 | ) | $ | (0.02 | ) | |||||
| (a) | The fiscal year 2023 and 2022 annual effective tax rates, calculated using a federal rate plus a net state rate that excluded the impact of state NOL's, state credits and valuation allowance, was used for the twenty-six weeks ended August 27, 2022 and August 28, 2021, respectively. | ||||||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||||||
| SUPPLEMENTAL INFORMATION | |||||||||||||
| RECONCILIATION OF ADJUSTED EBITDA GROSS PROFIT AND RECONCILIATION OF ADJUSTED EBITDA SELLING, | |||||||||||||
| GENERAL AND ADMINISTRATIVE EXPENSES- RETAIL PHARMACY SEGMENT | |||||||||||||
| (In thousands) | |||||||||||||
| (unaudited) | |||||||||||||
| Thirteen weeks ended August 27, 2022 | Thirteen weeks ended August 28, 2021 | ||||||||||||
| Reconciliation of adjusted EBITDA gross profit: | |||||||||||||
| Revenues | $ | 4,231,791 |
| $ | 4,277,218 |
| |||||||
| Gross Profit |
| 1,043,036 |
|
| 1,140,362 |
| |||||||
| Addback: | |||||||||||||
| LIFO charge (credit) |
| 10,121 |
|
| (3,993 | ) | |||||||
| Depreciation and amortization (cost of goods sold portion only) |
| 2,075 |
|
| 1,950 |
| |||||||
| Other |
| 823 |
|
| 594 |
| |||||||
| Adjusted EBITDA gross profit | $ | 1,056,055 |
| $ | 1,138,913 |
| |||||||
| Percent of revenues |
| 24.96 | % |
| 26.63 | % | |||||||
| Reconciliation of adjusted EBITDA selling, general and administrative expenses: | |||||||||||||
| Revenues | $ | 4,231,791 |
| $ | 4,277,218 |
| |||||||
| Selling, general and administrative expenses |
| 1,100,775 |
|
| 1,163,352 |
| |||||||
| Less: | |||||||||||||
| Depreciation and amortization (SG&A portion only) |
| 54,604 |
|
| 59,081 |
| |||||||
| Stock-based compensation expense |
| 4,496 |
|
| 5,695 |
| |||||||
| Merger and Acquisition-related costs |
| - |
|
| 4,591 |
| |||||||
| Restructuring-related costs |
| 8,442 |
|
| 2,584 |
| |||||||
| Litigation and other contractual settlements |
| 8,170 |
|
| 18,448 |
| |||||||
| Other |
| 492 |
|
| 3,409 |
| |||||||
| Adjusted EBITDA selling, general and administrative | |||||||||||||
| expenses | $ | 1,024,571 |
| $ | 1,069,544 |
| |||||||
| Percent of revenues |
| 24.21 | % |
| 25.01 | % | |||||||
| Adjusted EBITDA | $ | 31,484 |
| $ | 69,369 |
| |||||||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||||||
| SUPPLEMENTAL INFORMATION | |||||||||||||
| RECONCILIATION OF ADJUSTED EBITDA GROSS PROFIT AND RECONCILIATION OF ADJUSTED EBITDA SELLING, | |||||||||||||
| GENERAL AND ADMINISTRATIVE EXPENSES- RETAIL PHARMACY SEGMENT | |||||||||||||
| (In thousands) | |||||||||||||
| (unaudited) | |||||||||||||
| Twenty-six weeks ended August 27, 2022 | Twenty-six weeks ended August 28, 2021 | ||||||||||||
| Reconciliation of adjusted EBITDA gross profit: | |||||||||||||
| Revenues | $ | 8,577,147 |
| $ | 8,628,900 |
| |||||||
| Gross Profit |
| 2,140,393 |
|
| 2,310,296 |
| |||||||
| Addback: | |||||||||||||
| LIFO charge (credit) |
| 10,121 |
|
| (7,986 | ) | |||||||
| Depreciation and amortization (cost of goods sold portion only) |
| 4,968 |
|
| 4,047 |
| |||||||
| Other |
| 7,225 |
|
| 894 |
| |||||||
| Adjusted EBITDA gross profit | $ | 2,162,707 |
| $ | 2,307,251 |
| |||||||
| Percent of revenues |
| 25.21 | % |
| 26.74 | % | |||||||
| Reconciliation of adjusted EBITDA selling, general and administrative expenses: | |||||||||||||
| Revenues | $ | 8,577,147 |
| $ | 8,628,900 |
| |||||||
| Selling, general and administrative expenses |
| 2,217,989 |
|
| 2,319,391 |
| |||||||
| Less: | |||||||||||||
| Depreciation and amortization (SG&A portion only) |
| 107,819 |
|
| 118,849 |
| |||||||
| Stock-based compensation expense |
| 7,598 |
|
| 8,466 |
| |||||||
| Merger and Acquisition-related costs |
| - |
|
| 8,477 |
| |||||||
| Restructuring-related costs |
| 25,813 |
|
| 4,205 |
| |||||||
| Litigation and other contractual settlements |
| 18,122 |
|
| 32,448 |
| |||||||
| Other |
| 1,096 |
|
| 3,978 |
| |||||||
| Adjusted EBITDA selling, general and administrative | |||||||||||||
| expenses | $ | 2,057,541 |
| $ | 2,142,968 |
| |||||||
| Percent of revenues |
| 23.99 | % |
| 24.83 | % | |||||||
| Adjusted EBITDA | $ | 105,166 |
| $ | 164,283 |
| |||||||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||||||
| SUPPLEMENTAL INFORMATION | |||||||||||||
| RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED EBITDA GUIDANCE | |||||||||||||
| YEAR ENDING MARCH 4, 2023 | |||||||||||||
| (In thousands) | |||||||||||||
| (unaudited) | |||||||||||||
| Guidance Range | |||||||||||||
| Low | High | ||||||||||||
| Total Revenues | $ | 23,600,000 |
| $ | 24,000,000 |
| |||||||
| Pharmacy Services Segment Revenues | $ | 6,250,000 |
| $ | 6,350,000 |
| |||||||
| Gross Capital Expenditures | $ | 225,000 |
| $ | 225,000 |
| |||||||
| Reconciliation of net loss to adjusted EBITDA: | |||||||||||||
| Net loss | $ | (520,300 | ) | $ | (477,300 | ) | |||||||
| Adjustments: | |||||||||||||
| Interest expense |
| 216,000 |
|
| 216,000 |
| |||||||
| Income tax benefit |
| (7,000 | ) |
| (10,000 | ) | |||||||
| Depreciation and amortization |
| 280,000 |
|
| 280,000 |
| |||||||
| LIFO charge |
| 20,000 |
|
| 20,000 |
| |||||||
| Facility exit and impairment charges |
| 175,000 |
|
| 175,000 |
| |||||||
| Goodwill and intangible asset impairment charges |
| 252,200 |
|
| 252,200 |
| |||||||
| Gain on debt modifications and retirements, net |
| (41,300 | ) |
| (41,300 | ) | |||||||
| Restructuring-related costs |
| 72,000 |
|
| 72,000 |
| |||||||
| Litigation and other contractual settlements |
| 38,400 |
|
| 38,400 |
| |||||||
| Gain on sale of assets, net |
| (60,000 | ) |
| (60,000 | ) | |||||||
| Other |
| 25,000 |
|
| 25,000 |
| |||||||
| Adjusted EBITDA | $ | 450,000 |
| $ | 490,000 |
| |||||||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||||
| SUPPLEMENTAL INFORMATION | |||||||||||
| RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED NET LOSS GUIDANCE | |||||||||||
| YEAR ENDING MARCH 4, 2023 | |||||||||||
| (In thousands) | |||||||||||
| (unaudited) | |||||||||||
| Guidance Range | |||||||||||
| Low | High | ||||||||||
| Net loss | $ | (520,300 | ) | $ | (477,300 | ) | |||||
| Add back - income tax benefit |
| (7,000 | ) |
| (10,000 | ) | |||||
| Loss before income taxes |
| (527,300 | ) |
| (487,300 | ) | |||||
| Adjustments: | |||||||||||
| Amortization expense |
| 73,000 |
|
| 73,000 |
| |||||
| LIFO charge |
| 20,000 |
|
| 20,000 |
| |||||
| Goodwill and intangible asset impairment charges |
| 252,200 |
|
| 252,200 |
| |||||
| Gain on debt modifications and retirements, net |
| (41,300 | ) |
| (41,300 | ) | |||||
| Restructuring-related costs |
| 72,000 |
|
| 72,000 |
| |||||
| Litigation and other contractual settlements |
| 38,400 |
|
| 38,400 |
| |||||
| Adjusted loss before adjusted income taxes |
| (113,000 | ) |
| (73,000 | ) | |||||
| Adjusted income tax benefit |
| (30,000 | ) |
| (20,000 | ) | |||||
| Adjusted net loss | $ | (83,000 | ) | $ | (53,000 | ) | |||||
| Diluted adjusted net loss per share | $ | (1.52 | ) | $ | (0.97 | ) | |||||
Contacts
INVESTORS:
Byron Purcell
(717) 975-3710
investor@riteaid.com
MEDIA:
Joy Errico Seusing
(203) 970-5559
press@riteaid.com
