Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - RITE AID CORP | form8k.htm |
Press Release
For Further Information Contact:
|
INVESTORS:
Matt Schroeder
(717) 214-8867
or investor@riteaid.com
|
MEDIA:
Karen Rugen
(717) 730-7766
|
RITE AID REPORTS SECOND QUARTER FISCAL 2011 RESULTS
|
·
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Second Quarter Net Loss of $0.23 per Diluted Share, including $0.05 per Diluted Share due to Refinancing Costs, Compared to Prior Second Quarter Net Loss of $0.14 per Diluted Share
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|
|
|
| ● |
Second Quarter Adjusted EBITDA of $181.2 Million Compared to Adjusted EBITDA of $216.5 Million in Prior Second Quarter
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| ● |
Adjusted EBITDA Negatively Impacted by $26 Million or $0.03 per Diluted Share due to Growth Initiatives, Memorial Day Shift
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| ● |
Continued Strong Liquidity of $1.1 Billion at Quarter End
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|
·
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Rite Aid Further Reduces Debt
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·
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Rite Aid Revises Fiscal 2011 Outlook
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Camp Hill, PA (September 23, 2010) - Rite Aid Corporation (NYSE: RAD) today reported financial results for its fiscal second quarter ended August 28, 2010.
The company reported revenues of $6.2 billion, a net loss of $197.0 million or $0.23 per diluted share and adjusted EBITDA of $181.2 million or 2.9 percent of revenues. Results were impacted by a decrease in revenues, expenses related to the company’s growth initiatives and a charge related to the company’s refinancing activities.
-More-
Rite Aid FY 2011 Q2 Press Release - page 2
“Despite lower sales and the sluggish economy, we started to see some positive trends in our business during the second quarter. Sales in our core drugstore categories have started to strengthen, and our gross margin trends are showing improvement,” said John Standley, Rite Aid president and CEO. “While reimbursement pressures are still challenging, our pharmacy margin rates have begun to stabilize.
“As we said at the start of the year, we made the strategic decision to invest now in initiatives designed to grow our business long term, including our new wellness+ customer loyalty program and the expansion of our immunization capabilities,” Standley said. “While the start up costs of those investments have had a negative impact on our results this quarter, we’re excited about the impact we’re seeing so far. More than 22 million customers and patients have enrolled in wellness+ only five months after the nationwide launch. Our pharmacists have administered more flu shots this year than they did at the same time a year ago. At the same time, we remain focused on reducing costs and operating more efficiently. Our continued strong liquidity and recent refinancing give us even more runway to deliver on our initiatives.”
Second Quarter Summary
Revenues for the 13-week quarter were $6.2 billion versus revenues of $6.3 billion in the prior year second quarter. Revenues decreased 2.5 percent primarily as a result of store closings and a decline in same store sales.
Same store sales for the quarter decreased 1.5 percent over the prior year 13-week period, consisting of a 0.9 percent decrease in the front end and a 1.8 percent decrease in the pharmacy. Pharmacy sales included an approximate 195 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores decreased 2.1 percent over the prior year period. Prescription sales accounted for 68.1 percent of total drugstore sales, and third party prescription revenue was 96.1 percent of pharmacy sales.
Net loss was $197.0 million or $0.23 per diluted share compared to last year’s second quarter net loss of $116.0 million or $0.14 per diluted share. Contributing to the net loss were lower sales and a $44.0 million or $0.05 per diluted share debt modification expense related to the retirement of the company’s $648.0 million Tranche 4 term loan due 2015 under its senior secured credit facility. Retiring the loan was part of the company’s previously announced August refinancing transactions that extended debt maturities and lowered interest expense.
-More-
Rite Aid FY 2011 Q2 Press Release – page 3
Adjusted EBITDA (which is reconciled to net loss on the attached table) was $181.2 million or 2.9 percent of revenues for the second quarter compared to $216.5 million or 3.4 percent of revenues for the like period last year. Negatively impacting Adjusted EBITDA by approximately $26 million or $0.03 per diluted share were advertising expenses related to the company’s wellness+ customer loyalty program, expenses related to the expansion of Rite Aid’s immunization capabilities and the shift of Memorial Day holiday pay from the first quarter last year into the second quarter this year.
In the second quarter, the company opened no new stores, relocated 5 stores, remodeled 1 store and closed 20 stores. Stores in operation at the end of the second quarter totaled 4,747.
Other Events During the Quarter
As previously announced, Rite Aid continued to reduce debt in the second quarter with the repurchase of $93.8 million of its 8.5% convertible notes due 2015. Also as previously announced, the company completed refinancing transactions that extended debt maturities and lowered interest expense. Those transactions included a new $1.175 billion revolving credit facility due 2015 that replaced its $1.175 billion revolving credit facility due 2012 and the issuance of $650 million of 8.00% senior secured notes due 2020 used to repay and retire the company’s $648.0 million Tranche 4 Term Loan due 2015 under its senior secured credit facility.
Rite Aid Lowers Sales, Narrows Adjusted EBITDA and Increases Net Loss Guidance for Fiscal 2011
Based on current trends, Rite Aid revised its fiscal 2011 outlook for sales, Adjusted EBITDA and net loss. Sales are now expected to be between $25.0 billion and $25.4 billion with same store sales expected to range from a decrease of 1.5 percent to flat. Adjusted EBITDA (which is reconciled to net loss on the attached table) is expected to be between $875 million and $950 million.
As a result of narrowing Adjusted EBITDA guidance, a $44.0 million debt modification charge for the company’s recent refinancing and lower interest expense related to the company’s refinancing and debt repurchase activities, net loss is now expected to be between $400 million and $590 million or a loss per diluted share of $0.46 to $0.67. The company confirmed previous guidance for capital expenditures at approximately $250 million.
-More-
Rite Aid FY 2011 Q2 Press Release – page 4
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 simulcast via the internet and can be accessed through the websites www.riteaid.com in the conference call section of investor information and www.StreetEvents.com. Slides related to materials discussed on the call will be available on both sites. A playback of the call will be available on both sites starting at 12 p.m. Eastern Time today. A playback of the call will also be available by telephone beginning at 12 p.m. Eastern Time today until 11:59 p.m. Eastern Time on September 25, 2010. The playback number is 1-800-642-1687 from within the U.S. and Canada or 1-706-645-9291 from outside the U.S. and Canada with the eight-digit reservation number 10670216.
Rite Aid is one of the nation’s leading drugstore chains with more than 4,700 stores in 31 states and the District of Columbia with fiscal 2010 annual revenues of $25.7 billion. Information about Rite Aid, including corporate background and press releases, is available through Rite Aid’s website at www.riteaid.com.
This press release contains forward-looking statements, including guidance, which are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements include our high level of indebtedness; our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our senior secured credit facility and other debt agreements; general economic conditions, including the impact of continued high unemployment and changing consumer behavior; inflation and interest rate movements; our ability to improve the operating performance of our stores in accordance with our long term strategy; our ability to realize same store sales growth; our ability to hire and retain qualified personnel; the efforts of private and public third-party payors to reduce prescription drug reimbursements and encourage mail order; competitive pricing pressures, including aggressive promotional activity from our competitors; decisions to close additional stores and distribution centers, which could result in further charges to our operating statement; our ability to manage expenses; our ability to realize the benefits from actions to further reduce costs and investment in working capital; continued consolidation of the drugstore industry; changes in state or federal legislation or regulations; the outcome of lawsuits and governmental investigations and health care reform; and our ability to maintain the listing of our common stock on the New York Stock Exchange and the resulting impact to our indebtedness and financial condition. Consequently, all of the forward-looking statements made in this press release, are qualified by these and other factors, risks and uncertainties. Readers are also directed to consider other risks and uncertainties discussed in documents filed by the Company with the Securities and Exchange Commission. Forward-looking statements can be identified through the use of words such as "may", "will", "intend", "plan", "project", "expect", "anticipate", "could", "should", "would", "believe", "estimate", "contemplate", and "possible".
-More-
Rite Aid FY 2011 Q2 Press Release – page 5
See the attached table for a reconciliation of a non-GAAP financial measure, Adjusted EBITDA to net income (loss), the most comparable GAAP financial measure. We define Adjusted EBITDA as net income (loss) from operations excluding the impact of income taxes, interest expense and securitization costs, depreciation and amortization, LIFO adjustments, charges or credits for store closing and impairment, inventory write-downs related to closed stores, stock-based compensation expense, debt modifications and retirements, sale of assets and investments, revenue deferrals related to customer loyalty programs and other items.
###
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RITE AID CORPORATION AND SUBSIDIARIES
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| CONSOLIDATED BALANCE SHEETS |
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(Dollars in thousands)
(unaudited)
|
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August 28,
2010 |
February 27,
2010 |
|||||||
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ASSETS
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||||||||
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Current assets:
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||||||||
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Cash and cash equivalents
|
$ | 132,412 | $ | 103,594 | ||||
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Accounts receivable, net
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947,001 | 955,502 | ||||||
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Inventories, net of LIFO reserve of $872,169 and $831,113
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3,257,580 | 3,238,644 | ||||||
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Prepaid expenses and other current assets
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107,673 | 210,928 | ||||||
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Total current assets
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4,444,666 | 4,508,668 | ||||||
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Property, plant and equipment, net
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2,184,607 | 2,293,153 | ||||||
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Other intangibles, net
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740,130 | 823,088 | ||||||
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Other assets
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447,780 | 425,002 | ||||||
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Total assets
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$ | 7,817,183 | $ | 8,049,911 | ||||
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current liabilities:
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||||||||
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Current maturities of long-term debt and lease financing obligations
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$ | 33,610 | $ | 51,502 | ||||
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Accounts payable
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1,310,900 | 1,159,069 | ||||||
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Accrued salaries, wages and other current liabilities
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1,057,601 | 965,121 | ||||||
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Total current liabilities
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2,402,111 | 2,175,692 | ||||||
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Long-term debt, less current maturities
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6,031,759 | 6,185,633 | ||||||
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Lease financing obligations, less current maturities
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128,151 | 133,764 | ||||||
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Other noncurrent liabilities
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1,188,970 | 1,228,373 | ||||||
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Total liabilities
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9,750,991 | 9,723,462 | ||||||
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Commitments and contingencies
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- | - | ||||||
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Stockholders' deficit:
|
||||||||
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Preferred stock - Series G
|
1 | 1 | ||||||
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Preferred stock - Series H
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156,907 | 152,304 | ||||||
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Common stock
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891,345 | 887,636 | ||||||
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Additional paid-in capital
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4,277,846 | 4,277,200 | ||||||
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Accumulated deficit
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(7,230,032 | ) | (6,959,372 | ) | ||||
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Accumulated other comprehensive loss
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(29,875 | ) | (31,320 | ) | ||||
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Total stockholders' deficit
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(1,933,808 | ) | (1,673,551 | ) | ||||
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Total liabilities and stockholders' deficit
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$ | 7,817,183 | $ | 8,049,911 | ||||
Chart 1
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RITE AID CORPORATION AND SUBSIDIARIES
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| CONSOLIDATED STATEMENTS OF OPERATIONS |
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(Dollars in thousands, except per share amounts)
(unaudited)
|
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Thirteen weeks ended August 28, 2010
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Thirteen weeks ended August 29, 2009
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|||||||
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Revenues
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$ |
6,161,752
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$ |
6,321,870
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||||
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Costs and expenses:
|
|
|
||||||
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Cost of goods sold
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4,523,092 | 4,633,595 | ||||||
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Selling, general and administrative expenses
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1,626,704 | 1,645,913 | ||||||
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Lease termination and impairment charges
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26,360 | 28,752 | ||||||
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Interest expense
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139,716 | 128,828 | ||||||
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Loss on debt modifications and retirements, net
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44,003 | 993 | ||||||
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Gain on sale of assets, net
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(3,973 | ) | (4,188 | ) | ||||
| 6,355,902 | 6,433,893 | |||||||
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Loss before income taxes
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(194,150 | ) | (112,023 | ) | ||||
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Income tax expense
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2,826 | 3,989 | ||||||
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Net loss
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$ | (196,976 | ) | $ | (116,012 | ) | ||
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Basic and diluted loss per share:
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||||||||
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Numerator for loss per share:
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||||||||
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Net loss
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$ | (196,976 | ) | $ | (116,012 | ) | ||
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Accretion of redeemable preferred stock
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(26 | ) | (26 | ) | ||||
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Cumulative preferred stock dividends
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(2,318 | ) | (4,338 | ) | ||||
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Loss attributable to common stockholders - basic and diluted
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$ | (199,320 | ) | $ | (120,376 | ) | ||
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Basic and diluted weighted average shares
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882,758 | 880,683 | ||||||
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Basic and diluted loss per share
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$ | (0.23 | ) | $ | (0.14 | ) |
Chart 2
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RITE AID CORPORATION AND SUBSIDIARIES
|
| CONSOLIDATED STATEMENTS OF OPERATIONS |
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(Dollars in thousands, except per share amounts)
(unaudited)
|
|
Twenty-six weeks ended August 28, 2010
|
Twenty-six weeks ended August 29, 2009
|
|||||||
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Revenues
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$ | 12,556,088 | $ | 12,853,048 | ||||
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Costs and expenses:
|
||||||||
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Cost of goods sold
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9,205,724 | 9,390,707 | ||||||
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Selling, general and administrative expenses
|
3,249,638 | 3,356,585 | ||||||
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Lease termination and impairment charges
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39,817 | 95,738 | ||||||
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Interest expense
|
281,335 | 238,306 | ||||||
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Loss on debt modifications and retirements, net
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44,003 | 993 | ||||||
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Gain on sale of assets, net
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(3,736 | ) | (24,139 | ) | ||||
| 12,816,781 | 13,058,190 | |||||||
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Loss before income taxes
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(260,693 | ) | (205,142 | ) | ||||
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Income tax expense
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9,967 | 9,316 | ||||||
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Net loss
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$ | (270,660 | ) | $ | (214,458 | ) | ||
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Basic and diluted loss per share:
|
||||||||
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Numerator for loss per share:
|
||||||||
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Net loss
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$ | (270,660 | ) | $ | (214,458 | ) | ||
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Accretion of redeemable preferred stock
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(51 | ) | (51 | ) | ||||
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Cumulative preferred stock dividends
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(4,603 | ) | (4,338 | ) | ||||
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Loss attributable to common stockholders - basic and diluted
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$ | (275,314 | ) | $ | (218,847 | ) | ||
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Basic and diluted weighted average shares
|
882,245 | 880,179 | ||||||
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Basic and diluted loss per share
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$ | (0.31 | ) | $ | (0.25 | ) | ||
Chart 3
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RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL OPERATING AND CASH FLOW INFORMATION
(Dollars in thousands, except per share amounts)
(unaudited)
|
|
Thirteen weeks ended August 28, 2010
|
Thirteen weeks ended August 29, 2009
|
|||||||
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SUPPLEMENTAL OPERATING INFORMATION
|
||||||||
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Revenues
|
$ | 6,161,752 | $ | 6,321,870 | ||||
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Cost of goods sold
|
4,523,092 | 4,633,595 | ||||||
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Gross profit
|
1,638,660 | 1,688,275 | ||||||
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LIFO charge
|
20,528 | 14,770 | ||||||
|
FIFO gross profit
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1,659,188 | 1,703,045 | ||||||
|
Gross profit as a percentage of revenues
|
26.59 | % | 26.71 | % | ||||
|
LIFO charge as a percentage of revenues
|
0.33 | % | 0.23 | % | ||||
|
FIFO gross profit as a percentage of revenues
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26.93 | % | 26.94 | % | ||||
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Selling, general and administrative expenses
|
1,626,704 | 1,645,913 | ||||||
|
Selling, general and administrative expenses as a percentage of revenues
|
26.40 | % | 26.04 | % | ||||
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Cash interest expense
|
128,030 | 118,761 | ||||||
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Non-cash interest expense
|
11,686 | 10,067 | ||||||
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Total interest expense
|
139,716 | 128,828 | ||||||
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Securitization costs (included in SG&A)
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- | 14,055 | ||||||
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Total interest expense and securitization costs
|
139,716 | 142,883 | ||||||
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Adjusted EBITDA
|
181,244 | 216,535 | ||||||
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Adjusted EBITDA as a percentage of revenues
|
2.94 | % | 3.43 | % | ||||
|
Net loss
|
(196,976 | ) | (116,012 | ) | ||||
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Net loss as a percentage of revenues
|
-3.20 | % | -1.84 | % | ||||
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Total debt
|
6,193,520 | 5,914,641 | ||||||
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Accounts receivable securitization facility
|
- | 395,520 | ||||||
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Total debt including accounts receivable facility
|
6,193,520 | 6,310,161 | ||||||
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Invested cash
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50,583 | 9,690 | ||||||
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Total debt net of invested cash
|
6,142,937 | 6,300,471 | ||||||
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SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||
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Payments for property, plant and equipment
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37,307 | 38,895 | ||||||
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Intangible assets acquired
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4,845 | 1,482 | ||||||
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Total cash capital expenditures
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42,152 | 40,377 | ||||||
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Equipment received for noncash consideration
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178 | 7,019 | ||||||
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Equipment financed under capital leases
|
2,064 | 33 | ||||||
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Gross capital expenditures
|
$ | 44,394 | $ | 47,429 | ||||
Chart 4
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RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL OPERATING AND CASH FLOW INFORMATION
(Dollars in thousands, except per share amounts)
(unaudited)
|
|
Twenty-six weeks ended August 28, 2010
|
Twenty-six weeks ended August 29, 2009
|
|||||||
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SUPPLEMENTAL OPERATING INFORMATION
|
||||||||
|
Revenues
|
$ | 12,556,088 | $ | 12,853,048 | ||||
|
Cost of goods sold
|
9,205,724 | 9,390,707 | ||||||
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Gross profit
|
3,350,364 | 3,462,341 | ||||||
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LIFO charge
|
41,056 | 29,540 | ||||||
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FIFO gross profit
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3,391,420 | 3,491,881 | ||||||
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Gross profit as a percentage of revenues
|
26.68 | % | 26.94 | % | ||||
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LIFO charge as a percentage of revenues
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0.33 | % | 0.23 | % | ||||
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FIFO gross profit as a percentage of revenues
|
27.01 | % | 27.17 | % | ||||
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Selling, general and administrative expenses
|
3,249,638 | 3,356,585 | ||||||
|
Selling, general and administrative expenses as a percentage of revenues
|
25.88 | % | 26.12 | % | ||||
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Cash interest expense
|
257,953 | 220,584 | ||||||
|
Non-cash interest expense
|
23,382 | 17,722 | ||||||
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Total interest expense
|
281,335 | 238,306 | ||||||
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Securitization costs (included in SG&A)
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- | 28,500 | ||||||
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Total interest expense and securitization costs
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281,335 | 266,806 | ||||||
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Adjusted EBITDA
|
431,034 | 465,731 | ||||||
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Adjusted EBITDA as a percentage of revenues
|
3.43 | % | 3.62 | % | ||||
|
Net loss
|
(270,660 | ) | (214,458 | ) | ||||
|
Net loss as a percentage of revenues
|
-2.16 | % | -1.67 | % | ||||
|
Total debt
|
6,193,520 | 5,914,641 | ||||||
|
Accounts receivable securitization facility
|
395,520 | |||||||
|
Total debt including accounts receivable facility
|
6,193,520 | 6,310,161 | ||||||
|
Invested cash
|
50,583 | 9,690 | ||||||
|
Total debt net of invested cash
|
6,142,937 | 6,300,471 | ||||||
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SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||
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Payments for property, plant and equipment
|
72,519 | 81,199 | ||||||
|
Intangible assets acquired
|
10,222 | 3,447 | ||||||
|
Total cash capital expenditures
|
82,741 | 84,646 | ||||||
|
Equipment received for noncash consideration
|
2,206 | 7,838 | ||||||
|
Equipment financed under capital leases
|
2,064 | 185 | ||||||
|
Gross capital expenditures
|
$ | 87,011 | $ | 92,669 | ||||
Chart 5
|
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(In thousands)
|
|
Thirteen weeks ended August 28, 2010
|
Thirteen weeks ended August 29, 2009
|
|||||||
|
Reconciliation of net loss to adjusted EBITDA:
|
||||||||
|
Net loss
|
$ | (196,976 | ) | $ | (116,012 | ) | ||
|
Adjustments:
|
||||||||
|
Interest expense and securitization costs
|
139,716 | 142,883 | ||||||
|
Income tax expense
|
2,826 | 3,989 | ||||||
|
Depreciation and amortization
|
126,513 | 133,522 | ||||||
|
LIFO charges
|
20,528 | 14,770 | ||||||
|
Lease termination and impairment charges
|
26,360 | 28,752 | ||||||
|
Stock-based compensation expense
|
4,250 | 6,092 | ||||||
|
Gain on sale of assets, net
|
(3,973 | ) | (4,188 | ) | ||||
|
Loss on debt modifications and retirements, net
|
44,003 | 993 | ||||||
|
Closed facility liquidation expense
|
1,811 | 2,290 | ||||||
|
Severance costs
|
- | 2,053 | ||||||
|
Customer loyalty card programs revenue deferral (a)
|
15,394 | - | ||||||
|
Other
|
792 | 1,391 | ||||||
|
Adjusted EBITDA
|
$ | 181,244 | $ | 216,535 | ||||
|
Percent of revenues
|
2.94 | % | 3.43 | % | ||||
|
Notes:
|
||
|
(a)
|
Relates to deferral of revenues for our customer loyalty programs.
|
Chart 6
|
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(In thousands)
|
|
Twenty-six weeks ended August 28, 2010
|
Twenty-six weeks ended August 29, 2009
|
|||||||
|
Reconciliation of net loss to adjusted EBITDA:
|
||||||||
|
Net loss
|
$ | (270,660 | ) | $ | (214,458 | ) | ||
|
Adjustments:
|
||||||||
|
Interest expense and securitization costs
|
281,335 | 266,806 | ||||||
|
Income tax expense
|
9,967 | 9,316 | ||||||
|
Depreciation and amortization
|
254,013 | 271,760 | ||||||
|
LIFO charges
|
41,056 | 29,540 | ||||||
|
Lease termination and impairment charges
|
39,817 | 95,738 | ||||||
|
Stock-based compensation expense
|
9,735 | 12,509 | ||||||
|
Gain on sale of assets, net
|
(3,736 | ) | (24,139 | ) | ||||
|
Loss on debt modifications and retirements, net
|
44,003 | 993 | ||||||
|
Closed facility liquidation expense
|
4,233 | 8,808 | ||||||
|
Severance costs
|
10 | 6,049 | ||||||
|
Customer loyalty card programs revenue deferral (a)
|
20,431 | - | ||||||
|
Other
|
830 | 2,809 | ||||||
|
Adjusted EBITDA
|
$ | 431,034 | $ | 465,731 | ||||
|
Percent of revenues
|
3.43 | % | 3.62 | % | ||||
|
Notes:
|
||
|
(a)
|
Relates to deferral of revenues for our customer loyalty programs.
|
Chart 7
|
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
|
|
Thirteen weeks ended August 28, 2010
|
Thirteen weeks ended August 29, 2009
|
|||||||
|
OPERATING ACTIVITIES:
|
||||||||
|
Net loss
|
$ | (196,976 | ) | $ | (116,012 | ) | ||
|
Adjustments to reconcile to net cash used in operating activities:
|
||||||||
|
Depreciation and amortization
|
126,513 | 133,522 | ||||||
|
Lease termination and impairment charges
|
26,360 | 28,752 | ||||||
|
LIFO charges
|
20,528 | 14,770 | ||||||
|
Gain on sale of assets, net
|
(3,973 | ) | (4,188 | ) | ||||
|
Stock-based compensation expense
|
4,250 | 6,092 | ||||||
|
Loss on debt modification and retirements, net
|
44,003 | 993 | ||||||
|
Proceeds from insured loss
|
- | 63 | ||||||
|
Changes in operating assets and liabilities:
|
||||||||
|
Net repayments to accounts receivable securitization
|
- | (125,000 | ) | |||||
|
Accounts receivable
|
65,816 | 111,168 | ||||||
|
Inventories
|
(102,285 | ) | (82,936 | ) | ||||
|
Accounts payable
|
40,205 | (16,163 | ) | |||||
|
Other assets and liabilities, net
|
(30,199 | ) | (97,917 | ) | ||||
|
Net cash used in operating activities
|
(5,758 | ) | (146,856 | ) | ||||
|
INVESTING ACTIVITIES:
|
||||||||
|
Payments for property, plant and equipment
|
(37,307 | ) | (38,895 | ) | ||||
|
Intangible assets acquired
|
(4,845 | ) | (1,482 | ) | ||||
|
Proceeds from sale-leaseback transactions
|
- | 6,532 | ||||||
|
Proceeds from dispositions of assets and investments
|
4,891 | 6,878 | ||||||
|
Net cash used in investing activities
|
(37,261 | ) | (26,967 | ) | ||||
|
FINANCING ACTIVITIES:
|
||||||||
|
Proceeds from issuance of long-term debt
|
650,000 | 906,604 | ||||||
|
Net repayments to revolver
|
- | (535,000 | ) | |||||
|
Principal payments on long-term debt
|
(743,285 | ) | (152,398 | ) | ||||
|
Change in zero balance cash accounts
|
(5,473 | ) | (15,690 | ) | ||||
|
Net proceeds from the issuance of common stock
|
1 | - | ||||||
|
Financing fees paid for early debt retirement
|
(19,666 | ) | - | |||||
|
Deferred financing costs paid
|
(34,028 | ) | (45,145 | ) | ||||
|
Net cash (used in) provided by financing activities
|
(152,451 | ) | 158,371 | |||||
|
Decrease in cash and cash equivalents
|
(195,470 | ) | (15,452 | ) | ||||
|
Cash and cash equivalents, beginning of period
|
327,882 | 136,459 | ||||||
|
Cash and cash equivalents, end of period
|
$ | 132,412 | $ | 121,007 | ||||
Chart 8
|
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
|
|
Twenty-six weeks ended August 28, 2010
|
Twenty-six weeks ended August 29, 2009
|
|||||||
|
OPERATING ACTIVITIES:
|
||||||||
|
Net loss
|
$ | (270,660 | ) | $ | (214,458 | ) | ||
|
Adjustments to reconcile to net cash provided by operating activities:
|
||||||||
|
Depreciation and amortization
|
254,013 | 271,760 | ||||||
|
Lease termination and impairment charges
|
39,817 | 95,738 | ||||||
|
LIFO charges
|
41,056 | 29,540 | ||||||
|
Gain on sale of assets, net
|
(3,736 | ) | (24,139 | ) | ||||
|
Stock-based compensation expense
|
9,735 | 12,509 | ||||||
|
Loss on debt modification and retirements, net
|
44,003 | 993 | ||||||
|
Proceeds from insured loss
|
- | 1,380 | ||||||
|
Changes in operating assets and liabilities:
|
||||||||
|
Net repayments to accounts receivable securitization
|
- | (155,000 | ) | |||||
|
Accounts receivable
|
8,663 | 56,886 | ||||||
|
Inventories
|
(60,166 | ) | 55,039 | |||||
|
Accounts payable
|
311,378 | 37,003 | ||||||
|
Other assets and liabilities, net
|
139,706 | 43,491 | ||||||
|
Net cash provided by operating activities
|
513,809 | 210,742 | ||||||
|
INVESTING ACTIVITIES:
|
||||||||
|
Payments for property, plant and equipment
|
(72,519 | ) | (81,199 | ) | ||||
|
Intangible assets acquired
|
(10,222 | ) | (3,447 | ) | ||||
|
Proceeds from sale-leaseback transactions
|
- | 6,532 | ||||||
|
Proceeds from dispositions of assets and investments
|
8,921 | 35,698 | ||||||
|
Net cash used in investing activities
|
(73,820 | ) | (42,416 | ) | ||||
|
FINANCING ACTIVITIES:
|
||||||||
|
Proceeds from issuance of long-term debt
|
650,000 | 906,604 | ||||||
|
Net repayments to revolver
|
(80,000 | ) | (838,000 | ) | ||||
|
Principal payments on long-term debt
|
(769,089 | ) | (159,890 | ) | ||||
|
Change in zero balance cash accounts
|
(158,482 | ) | (62,923 | ) | ||||
|
Net proceeds from the issuance of common stock
|
94 | - | ||||||
|
Financing fees paid for early debt retirement
|
(19,666 | ) | - | |||||
|
Deferred financing costs paid
|
(34,028 | ) | (45,145 | ) | ||||
|
Net cash used in financing activities
|
(411,171 | ) | (199,354 | ) | ||||
|
Increase (decrease) in cash and cash equivalents
|
28,818 | (31,028 | ) | |||||
|
Cash and cash equivalents, beginning of period
|
103,594 | 152,035 | ||||||
|
Cash and cash equivalents, end of period
|
$ | 132,412 | $ | 121,007 | ||||
Chart 9
|
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED EBITDA GUIDANCE
YEAR ENDING FEBRUARY 26, 2011
(In thousands, except per share amounts)
|
|
Guidance Range
|
||||||||
|
Low
|
High
|
|||||||
|
Sales
|
$ | 25,000,000 | $ | 25,400,000 | ||||
|
Same store sales
|
-1.50 | % | 0.00 | % | ||||
|
Gross capital expenditures
|
$ | 250,000 | $ | 250,000 | ||||
|
Reconciliation of net loss to adjusted EBITDA:
|
||||||||
| Net loss | $ | (590,000 | ) | $ | (400,000 | ) | ||
|
Adjustments:
|
||||||||
|
Interest expense
|
560,000 | 550,000 | ||||||
|
Income tax expense
|
20,000 | 15,000 | ||||||
|
Depreciation and amortization
|
505,000 | 495,000 | ||||||
|
LIFO charge
|
80,000 | 60,000 | ||||||
|
Store closing, liquidation, and impairment charges
|
190,000 | 135,000 | ||||||
|
Stock-based compensation expense
|
20,000 | 15,000 | ||||||
|
Customer loyalty card programs revenue deferral (a)
|
40,000 | 30,000 | ||||||
|
Loss on debt modification
|
45,000 | 45,000 | ||||||
|
Other
|
5,000 | 5,000 | ||||||
|
Adjusted EBITDA
|
$ | 875,000 | $ | 950,000 | ||||
|
Diluted loss per share
|
$ | (0.67 | ) | $ | (0.46 | ) | ||
|
(a) Relates to deferral of revenues for our customer loyalty programs.
|
Chart 10