Attached files
| file | filename |
|---|---|
| 8-K - 8-K - RITE AID CORP | a13-20848_18k.htm |
Exhibit 99.1
Press Release
For Further Information Contact:
|
INVESTORS: |
MEDIA: |
|
Matt Schroeder |
Susan Henderson |
|
(717) 214-8867 |
(717) 730-7766 |
|
orinvestor@riteaid.com |
|
FOR IMMEDIATE RELEASE
RITE AID REPORTS NET INCOME OF $32.8 MILLION
AND ADJUSTED EBITDA OF $341.6 MILLION FOR SECOND QUARTER FISCAL 2014
· Second Quarter Net Income of $0.03 per Diluted Share, Compared to Prior Second Quarter Net Loss of $0.05 per Diluted Share
· Second Quarter Adjusted EBITDA of $341.6 Million Compared to Adjusted EBITDA of $218.7 Million in Prior Second Quarter
· Rite Aid Raises Fiscal 2014 Outlook
CAMP HILL, Pa. (Sept. 19, 2013) - Rite Aid Corporation (NYSE: RAD) today reported operating results for its fiscal second quarter ended Aug. 31, 2013. The company reported revenues of $6.3 billion, net income of $32.8 million or $0.03 per diluted share, and Adjusted EBITDA of $341.6 million, or 5.4 percent of revenues.
“We posted excellent results in the second quarter, highlighted by another quarter of net income and an all-time company record for second-quarter Adjusted EBITDA,” said Rite Aid Chairman and CEO John Standley. “As we continue to improve our operational and financial performance, we are also making tremendous progress in transforming our more than 4,600 stores into true neighborhood destinations for health and wellness, as indicated by our successful launch of the wellness 65+ loyalty program for seniors, a strong start to our flu immunization campaign and the completion of our 1,000th wellness store remodel.”
Second Quarter Summary
Revenues for the 13-week quarter were $6.3 billion versus revenues of $6.2 billion in the prior year second quarter. Revenues increased 0.8 percent primarily as a result of an increase in same store sales, which were partially offset by store closings.
Same store sales for the quarter increased 1.0 percent over the prior year 13-week period, consisting of a 1.7 percent increase in pharmacy sales, partially offset by a 0.3 percent decrease in front end sales. Pharmacy sales included an approximate 249 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores was flat over the prior year period. Prescription sales accounted for 67.9 percent of total drugstore sales, and third party prescription revenue was 97.0 percent of pharmacy sales.
-More-
Net income was $32.8 million or $0.03 per diluted share compared to last year’s second quarter net loss of $38.8 million or $0.05 per diluted share. Included in net income was a $62.2 million or $0.07 per diluted share charge from a loss on debt retirement on the previously announced refinancings that were completed during the quarter, partially offset by a recovery of $23.5 million or $0.02 per diluted share related to the settlement of a prescription drug antitrust case. The improvement in net income resulted primarily from an increase in Adjusted EBITDA and a decrease in interest expense, partially offset by the loss on debt retirement.
Adjusted EBITDA (which is reconciled to net income/loss on the attached table) was $341.6 million or 5.4 percent of revenues for the second quarter compared to $218.7 million or 3.5 percent of revenues for the like period last year. The improvement in Adjusted EBITDA was largely driven by the continued benefit of new generic introductions on pharmacy gross margin as well as improved front-end gross margin, strong expense control and the settlement of the prescription drug antitrust case referenced above.
In the second quarter, the company relocated five stores and remodeled 109 stores, bringing the total number of wellness stores chain wide to 1,019. The company closed twelve stores and acquired one store, resulting in a total store count of 4,604 at the end of the second quarter.
Rite Aid Raises Earnings and Adjusted EBITDA Guidance
Rite Aid has raised its fiscal 2014 guidance for Adjusted EBITDA, net income and net income per share. Revised guidance for the fiscal year reflects the stronger-than-anticipated performance in the first half of the year and an expected stronger second half of the year versus the company’s previous guidance, although the company still expects lower second-half performance as compared to the prior year. The company expects its second-half performance will be negatively impacted by continued reimbursement rate pressure, pharmaceutical cost increases and a significantly lower benefit from new generics as the vast majority of the new generic wave is included in the company’s run rate.
Adjusted EBITDA (which is reconciled to net income/loss on the attached table) guidance is now expected to be between $1.240 billion and $1.300 billion and net income is now expected to be between $182.0 million or $0.18 per diluted share and $268.0 million or $0.27 per diluted share. Sales are expected to be between $25.1 billion and $25.3 billion and same store sales to range from a decrease of 0.50 percent to an increase of 0.50 percent compared to fiscal 2013. Capital expenditures are expected to be $400 million.
Conference Call Broadcast
Rite Aid will hold an analyst call at 8:30 a.m. EDT 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. EDT today. A playback of the call will also be available by telephone beginning at 12 p.m. EDT today until 11:59 p.m. EDT on Sept. 21, 2013. The playback number is 1-855-859-2056 from within the U.S. and Canada or 1-404-537-3406 from outside the U.S. and Canada with the eight-digit reservation number 44791730.
Rite Aid is one of the nation’s leading drugstore chains with 4,604 stores in 31 states and the District of Columbia. Information about Rite Aid, including corporate background and press releases, is available through Rite Aid’s website at www.riteaid.com.
Statements, including guidance, 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. 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, our high level of indebtedness and our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our debt agreements, general economic, market and competitive conditions, our ability to improve the operating performance of our stores in accordance with our long term strategy, 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, outcomes of legal and regulatory matters and changes in legislation or regulations, including healthcare reform. These and other risks, assumptions and uncertainties are 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, which you are encouraged to read. 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 place undue reliance on these forward-looking statements, which speak only as of the date they are made. Rite Aid expressly disclaims any current intention 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.
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) excluding the impact of income taxes (and any corresponding adjustments to tax indemnification asset), interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, inventory write-downs related to store closings, stock-based compensation expense, debt retirements, sale of assets and investments, revenue deferrals related to our customer loyalty program and other items.
###
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(unaudited)
|
|
|
August 31, 2013 |
|
March 2, 2013 |
| ||
|
ASSETS |
|
|
|
|
| ||
|
Current assets: |
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
144,167 |
|
$ |
129,452 |
|
|
Accounts receivable, net |
|
922,648 |
|
929,476 |
| ||
|
Inventories, net of LIFO reserve of $950,241 and $915,241 |
|
3,215,611 |
|
3,154,742 |
| ||
|
Prepaid expenses and other current assets |
|
208,607 |
|
195,377 |
| ||
|
Total current assets |
|
4,491,033 |
|
4,409,047 |
| ||
|
Property, plant and equipment, net |
|
1,936,577 |
|
1,895,650 |
| ||
|
Other intangibles, net |
|
438,776 |
|
464,404 |
| ||
|
Other assets |
|
302,604 |
|
309,618 |
| ||
|
Total assets |
|
$ |
7,168,990 |
|
$ |
7,078,719 |
|
|
|
|
|
|
|
| ||
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
|
|
|
| ||
|
Current liabilities: |
|
|
|
|
| ||
|
Current maturities of long-term debt and lease financing obligations |
|
$ |
47,213 |
|
$ |
37,311 |
|
|
Accounts payable |
|
1,415,880 |
|
1,384,644 |
| ||
|
Accrued salaries, wages and other current liabilities |
|
1,084,312 |
|
1,156,315 |
| ||
|
Total current liabilities |
|
2,547,405 |
|
2,578,270 |
| ||
|
Long-term debt, less current maturities |
|
5,915,836 |
|
5,904,370 |
| ||
|
Lease financing obligations, less current maturities |
|
88,510 |
|
91,850 |
| ||
|
Other noncurrent liabilities |
|
935,105 |
|
963,663 |
| ||
|
Total liabilities |
|
9,486,856 |
|
9,538,153 |
| ||
|
|
|
|
|
|
| ||
|
Commitments and contingencies |
|
— |
|
— |
| ||
|
Stockholders’ deficit: |
|
|
|
|
| ||
|
Preferred stock - Series G |
|
1 |
|
1 |
| ||
|
Preferred stock - Series H |
|
187,601 |
|
182,097 |
| ||
|
Common stock |
|
916,081 |
|
904,268 |
| ||
|
Additional paid-in capital |
|
4,280,068 |
|
4,280,831 |
| ||
|
Accumulated deficit |
|
(7,642,773 |
) |
(7,765,262 |
) | ||
|
Accumulated other comprehensive loss |
|
(58,844 |
) |
(61,369 |
) | ||
|
Total stockholders’ deficit |
|
(2,317,866 |
) |
(2,459,434 |
) | ||
|
Total liabilities and stockholders’ deficit |
|
$ |
7,168,990 |
|
$ |
7,078,719 |
|
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)
|
|
|
Thirteen weeks ended |
|
Thirteen weeks ended |
| ||
|
Revenues |
|
$ |
6,278,165 |
|
$ |
6,230,884 |
|
|
Costs and expenses: |
|
|
|
|
| ||
|
Cost of goods sold |
|
4,461,804 |
|
4,520,463 |
| ||
|
Selling, general and administrative expenses |
|
1,602,931 |
|
1,618,169 |
| ||
|
Lease termination and impairment charges |
|
11,390 |
|
7,783 |
| ||
|
Interest expense |
|
106,716 |
|
129,054 |
| ||
|
Loss on debt retirements, net |
|
62,172 |
|
— |
| ||
|
Gain on sale of assets, net |
|
(1,885 |
) |
(2,954 |
) | ||
|
|
|
|
|
|
| ||
|
|
|
6,243,128 |
|
6,272,515 |
| ||
|
|
|
|
|
|
| ||
|
Income (loss) before income taxes |
|
35,037 |
|
(41,631 |
) | ||
|
Income tax expense (benefit) |
|
2,210 |
|
(2,866 |
) | ||
|
Net income (loss) |
|
$ |
32,827 |
|
$ |
(38,765 |
) |
|
|
|
|
|
|
| ||
|
Basic and diluted earnings (loss) per share: |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Numerator for earnings (loss) per share: |
|
|
|
|
| ||
|
Net income (loss) |
|
$ |
32,827 |
|
$ |
(38,765 |
) |
|
Accretion of redeemable preferred stock |
|
(26 |
) |
(26 |
) | ||
|
Cumulative preferred stock dividends |
|
(2,772 |
) |
(2,612 |
) | ||
|
Income (loss) attributable to common stockholders - basic and diluted |
|
$ |
30,029 |
|
$ |
(41,403 |
) |
|
|
|
|
|
|
| ||
|
Denominator: |
|
|
|
|
| ||
|
Basic weighted average shares |
|
901,992 |
|
889,645 |
| ||
|
Outstanding options and restricted shares |
|
44,726 |
|
— |
| ||
|
|
|
|
|
|
| ||
|
Diluted weighted average shares |
|
946,718 |
|
889,645 |
| ||
|
|
|
|
|
|
| ||
|
Basic and diluted income (loss) per share |
|
$ |
0.03 |
|
$ |
(0.05 |
) |
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)
|
|
|
Twenty-six weeks ended |
|
Twenty-six weeks ended |
| ||
|
Revenues |
|
$ |
12,571,222 |
|
$ |
12,699,171 |
|
|
Costs and expenses: |
|
|
|
|
| ||
|
Cost of goods sold |
|
8,933,870 |
|
9,239,979 |
| ||
|
Selling, general and administrative expenses |
|
3,212,192 |
|
3,306,235 |
| ||
|
Lease termination and impairment charges |
|
22,362 |
|
19,926 |
| ||
|
Interest expense |
|
219,780 |
|
259,642 |
| ||
|
Loss on debt retirements, net |
|
62,172 |
|
17,842 |
| ||
|
Gain on sale of assets, net |
|
(7,065 |
) |
(13,005 |
) | ||
|
|
|
|
|
|
| ||
|
|
|
12,443,311 |
|
12,830,619 |
| ||
|
|
|
|
|
|
| ||
|
Income (loss) before income taxes |
|
127,911 |
|
(131,448 |
) | ||
|
Income tax expense (benefit) |
|
5,422 |
|
(64,595 |
) | ||
|
Net income (loss) |
|
$ |
122,489 |
|
$ |
(66,853 |
) |
|
|
|
|
|
|
| ||
|
Basic and diluted earnings (loss) per share: |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Numerator for earnings (loss) per share: |
|
|
|
|
| ||
|
Net income (loss) |
|
$ |
122,489 |
|
$ |
(66,853 |
) |
|
Accretion of redeemable preferred stock |
|
(51 |
) |
(51 |
) | ||
|
Cumulative preferred stock dividends |
|
(5,504 |
) |
(5,186 |
) | ||
|
Income (loss) attributable to common stockholders - basic |
|
116,934 |
|
(72,090 |
) | ||
|
Add back - Interest on convertible notes |
|
2,728 |
|
— |
| ||
|
Income (loss) attributable to common stockholders - diluted |
|
$ |
119,662 |
|
$ |
(72,090 |
) |
|
|
|
|
|
|
| ||
|
Denominator: |
|
|
|
|
| ||
|
Basic weighted average shares |
|
897,993 |
|
888,573 |
| ||
|
Outstanding options and restricted shares |
|
40,143 |
|
— |
| ||
|
Convertible notes |
|
24,800 |
|
— |
| ||
|
|
|
|
|
|
| ||
|
Diluted weighted average shares |
|
962,936 |
|
888,573 |
| ||
|
|
|
|
|
|
| ||
|
Basic income (loss) per share |
|
$ |
0.13 |
|
$ |
(0.08 |
) |
|
Diluted income (loss) per share |
|
$ |
0.12 |
|
$ |
(0.08 |
) |
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(unaudited)
|
|
|
Thirteen weeks ended |
|
Thirteen weeks ended |
| ||
|
Net income (loss) |
|
$ |
32,827 |
|
$ |
(38,765 |
) |
|
Other comprehensive income: |
|
|
|
|
| ||
|
Defined benefit pension plans: |
|
|
|
|
| ||
|
Amortization of prior service cost, net transition obligation and net actuarial losses included in net periodic pension cost |
|
1,262 |
|
1,019 |
| ||
|
Total other comprehensive income |
|
1,262 |
|
1,019 |
| ||
|
Comprehensive income (loss) |
|
$ |
34,089 |
|
$ |
(37,746 |
) |
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(unaudited)
|
|
|
Twenty-six weeks ended |
|
Twenty-six weeks ended |
| ||
|
Net income (loss) |
|
$ |
122,489 |
|
$ |
(66,853 |
) |
|
Other comprehensive income: |
|
|
|
|
| ||
|
Defined benefit pension plans: |
|
|
|
|
| ||
|
Amortization of prior service cost, net transition obligation and net actuarial losses included in net periodic pension cost |
|
2,525 |
|
2,039 |
| ||
|
Total other comprehensive income |
|
2,525 |
|
2,039 |
| ||
|
Comprehensive income (loss) |
|
$ |
125,014 |
|
$ |
(64,814 |
) |
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL OPERATING AND CASH FLOW INFORMATION
(Dollars in thousands, except per share amounts)
(unaudited)
|
|
|
Thirteen weeks ended |
|
Thirteen weeks ended |
| ||
|
|
|
|
|
|
| ||
|
SUPPLEMENTAL OPERATING INFORMATION |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Revenues |
|
$ |
6,278,165 |
|
$ |
6,230,884 |
|
|
Cost of goods sold |
|
4,461,804 |
|
4,520,463 |
| ||
|
Gross profit |
|
1,816,361 |
|
1,710,421 |
| ||
|
LIFO charge |
|
23,000 |
|
8,752 |
| ||
|
FIFO gross profit |
|
1,839,361 |
|
1,719,173 |
| ||
|
|
|
|
|
|
| ||
|
Gross profit as a percentage of revenues |
|
28.93 |
% |
27.45 |
% | ||
|
LIFO charge as a percentage of revenues |
|
0.37 |
% |
0.14 |
% | ||
|
FIFO gross profit as a percentage of revenues |
|
29.30 |
% |
27.59 |
% | ||
|
|
|
|
|
|
| ||
|
Selling, general and administrative expenses |
|
1,602,931 |
|
1,618,169 |
| ||
|
Selling, general and administrative expenses as a percentage of revenues |
|
25.53 |
% |
25.97 |
% | ||
|
|
|
|
|
|
| ||
|
Cash interest expense |
|
102,556 |
|
121,383 |
| ||
|
Non-cash interest expense |
|
4,160 |
|
7,671 |
| ||
|
Total interest expense |
|
106,716 |
|
129,054 |
| ||
|
|
|
|
|
|
| ||
|
Adjusted EBITDA |
|
341,589 |
|
218,653 |
| ||
|
Adjusted EBITDA as a percentage of revenues |
|
5.44 |
% |
3.51 |
% | ||
|
|
|
|
|
|
| ||
|
Net income (loss) |
|
32,827 |
|
(38,765 |
) | ||
|
Net income (loss) as a percentage of revenues |
|
0.52 |
% |
-0.62 |
% | ||
|
|
|
|
|
|
| ||
|
Total debt |
|
6,051,559 |
|
6,158,911 |
| ||
|
Invested cash |
|
1,629 |
|
831 |
| ||
|
Total debt net of invested cash |
|
6,049,930 |
|
6,158,080 |
| ||
|
|
|
|
|
|
| ||
|
SUPPLEMENTAL CASH FLOW INFORMATION |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Payments for property, plant and equipment |
|
89,944 |
|
70,211 |
| ||
|
Intangible assets acquired |
|
23,865 |
|
11,009 |
| ||
|
Total cash capital expenditures |
|
113,809 |
|
81,220 |
| ||
|
Equipment received for noncash consideration |
|
— |
|
2,132 |
| ||
|
Equipment financed under capital leases |
|
7,744 |
|
1,369 |
| ||
|
Gross capital expenditures |
|
$ |
121,553 |
|
$ |
84,721 |
|
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL OPERATING AND CASH FLOW INFORMATION
(Dollars in thousands, except per share amounts)
(unaudited)
|
|
|
Twenty-six weeks ended |
|
Twenty-six weeks ended |
| ||
|
|
|
|
|
|
| ||
|
SUPPLEMENTAL OPERATING INFORMATION |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Revenues |
|
$ |
12,571,222 |
|
$ |
12,699,171 |
|
|
Cost of goods sold |
|
8,933,870 |
|
9,239,979 |
| ||
|
Gross profit |
|
3,637,352 |
|
3,459,192 |
| ||
|
LIFO charge |
|
35,000 |
|
27,502 |
| ||
|
FIFO gross profit |
|
3,672,352 |
|
3,486,694 |
| ||
|
|
|
|
|
|
| ||
|
Gross profit as a percentage of revenues |
|
28.93 |
% |
27.24 |
% | ||
|
LIFO charge as a percentage of revenues |
|
0.28 |
% |
0.22 |
% | ||
|
FIFO gross profit as a percentage of revenues |
|
29.21 |
% |
27.46 |
% | ||
|
|
|
|
|
|
| ||
|
Selling, general and administrative expenses |
|
3,212,192 |
|
3,306,235 |
| ||
|
Selling, general and administrative expenses as a percentage of revenues |
|
25.55 |
% |
26.04 |
% | ||
|
|
|
|
|
|
| ||
|
Cash interest expense |
|
211,104 |
|
244,210 |
| ||
|
Non-cash interest expense |
|
8,676 |
|
15,432 |
| ||
|
Total interest expense |
|
219,780 |
|
259,642 |
| ||
|
|
|
|
|
|
| ||
|
Adjusted EBITDA |
|
686,367 |
|
492,818 |
| ||
|
Adjusted EBITDA as a percentage of revenues |
|
5.46 |
% |
3.88 |
% | ||
|
|
|
|
|
|
| ||
|
Net income (loss) |
|
122,489 |
|
(66,853 |
) | ||
|
Net income (loss) as a percentage of revenues |
|
0.97 |
% |
-0.53 |
% | ||
|
|
|
|
|
|
| ||
|
Total debt |
|
6,051,559 |
|
6,158,911 |
| ||
|
Invested cash |
|
1,629 |
|
831 |
| ||
|
Total debt net of invested cash |
|
6,049,930 |
|
6,158,080 |
| ||
|
|
|
|
|
|
| ||
|
SUPPLEMENTAL CASH FLOW INFORMATION |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
Payments for property, plant and equipment |
|
170,850 |
|
148,211 |
| ||
|
Intangible assets acquired |
|
35,651 |
|
19,967 |
| ||
|
Total cash capital expenditures |
|
206,501 |
|
168,178 |
| ||
|
Equipment received for noncash consideration |
|
— |
|
2,132 |
| ||
|
Equipment financed under capital leases |
|
13,117 |
|
5,234 |
| ||
|
Gross capital expenditures |
|
$ |
219,618 |
|
$ |
175,544 |
|
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(In thousands)
|
|
|
Thirteen weeks ended |
|
Thirteen weeks ended |
| ||
|
|
|
|
|
|
| ||
|
Reconciliation of net income (loss) to adjusted EBITDA: |
|
|
|
|
| ||
|
Net income (loss) |
|
$ |
32,827 |
|
$ |
(38,765 |
) |
|
Adjustments: |
|
|
|
|
| ||
|
Interest expense |
|
106,716 |
|
129,054 |
| ||
|
Income tax expense (benefit) |
|
2,210 |
|
(2,866 |
) | ||
|
Adjustments to tax indemnification asset |
|
(614 |
) |
— |
| ||
|
Depreciation and amortization |
|
99,247 |
|
101,999 |
| ||
|
LIFO charge |
|
23,000 |
|
8,752 |
| ||
|
Lease termination and impairment charges |
|
11,390 |
|
7,783 |
| ||
|
Stock-based compensation expense |
|
3,837 |
|
4,695 |
| ||
|
Gain on sale of assets, net |
|
(1,885 |
) |
(2,954 |
) | ||
|
Loss on debt retirements, net |
|
62,172 |
|
— |
| ||
|
Closed facility liquidation expense |
|
851 |
|
1,411 |
| ||
|
Severance costs |
|
— |
|
(72 |
) | ||
|
Customer loyalty card program revenue deferral |
|
1,526 |
|
4,813 |
| ||
|
Other |
|
312 |
|
4,803 |
| ||
|
Adjusted EBITDA |
|
$ |
341,589 |
|
$ |
218,653 |
|
|
Percent of revenues |
|
5.44 |
% |
3.51 |
% | ||
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(In thousands)
|
|
|
Twenty-six weeks ended |
|
Twenty-six weeks ended |
| ||
|
|
|
|
|
|
| ||
|
Reconciliation of net income (loss) to adjusted EBITDA: |
|
|
|
|
| ||
|
Net income (loss) |
|
$ |
122,489 |
|
$ |
(66,853 |
) |
|
Adjustments: |
|
|
|
|
| ||
|
Interest expense |
|
219,780 |
|
259,642 |
| ||
|
Income tax expense (benefit) |
|
5,422 |
|
(64,595 |
) | ||
|
Adjustments to tax indemnification asset |
|
(1,227 |
) |
60,237 |
| ||
|
Depreciation and amortization |
|
200,493 |
|
208,370 |
| ||
|
LIFO charge |
|
35,000 |
|
27,502 |
| ||
|
Lease termination and impairment charges |
|
22,362 |
|
19,926 |
| ||
|
Stock-based compensation expense |
|
8,077 |
|
8,653 |
| ||
|
Gain on sale of assets, net |
|
(7,065 |
) |
(13,005 |
) | ||
|
Loss on debt retirements, net |
|
62,172 |
|
17,842 |
| ||
|
Closed facility liquidation expense |
|
1,790 |
|
2,867 |
| ||
|
Severance costs |
|
— |
|
(72 |
) | ||
|
Customer loyalty card program revenue deferral |
|
16,128 |
|
27,993 |
| ||
|
Other |
|
946 |
|
4,311 |
| ||
|
Adjusted EBITDA |
|
$ |
686,367 |
|
$ |
492,818 |
|
|
Percent of revenues |
|
5.46 |
% |
3.88 |
% | ||
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
|
|
|
Thirteen weeks ended |
|
Thirteen weeks ended |
| ||
|
|
|
|
|
|
| ||
|
OPERATING ACTIVITIES: |
|
|
|
|
| ||
|
Net income (loss) |
|
$ |
32,827 |
|
$ |
(38,765 |
) |
|
Adjustments to reconcile to net cash provided by (used in) operating activities: |
|
|
|
|
| ||
|
Depreciation and amortization |
|
99,247 |
|
101,999 |
| ||
|
Lease termination and impairment charges |
|
11,390 |
|
7,783 |
| ||
|
LIFO charge |
|
23,000 |
|
8,752 |
| ||
|
Gain on sale of assets, net |
|
(1,885 |
) |
(2,954 |
) | ||
|
Stock-based compensation expense |
|
3,837 |
|
4,695 |
| ||
|
Loss on debt retirements, net |
|
62,172 |
|
— |
| ||
|
Changes in operating assets and liabilities: |
|
|
|
|
| ||
|
Accounts receivable |
|
(41,054 |
) |
(9,996 |
) | ||
|
Inventories |
|
(102,861 |
) |
(10,214 |
) | ||
|
Accounts payable |
|
51,747 |
|
(78,413 |
) | ||
|
Other assets and liabilities, net |
|
(58,955 |
) |
(15,773 |
) | ||
|
Net cash provided by (used in) operating activities |
|
79,465 |
|
(32,886 |
) | ||
|
INVESTING ACTIVITIES: |
|
|
|
|
| ||
|
Payments for property, plant and equipment |
|
(89,944 |
) |
(70,211 |
) | ||
|
Intangible assets acquired |
|
(23,865 |
) |
(11,009 |
) | ||
|
Proceeds from sale-leaseback transactions |
|
— |
|
3,950 |
| ||
|
Proceeds from dispositions of assets and investments |
|
3,088 |
|
4,617 |
| ||
|
Net cash used in investing activities |
|
(110,721 |
) |
(72,653 |
) | ||
|
FINANCING ACTIVITIES: |
|
|
|
|
| ||
|
Proceeds from issuance of long-term debt |
|
1,310,000 |
|
— |
| ||
|
Net proceeds from revolver |
|
135,000 |
|
— |
| ||
|
Principal payments on long-term debt |
|
(1,317,593 |
) |
(7,686 |
) | ||
|
Change in zero balance cash accounts |
|
(4,452 |
) |
(6,580 |
) | ||
|
Net proceeds from the issuance of common stock |
|
5,519 |
|
470 |
| ||
|
Financing fees paid for early debt redemption |
|
(45,636 |
) |
— |
| ||
|
Deferred financing costs paid |
|
(16,317 |
) |
(1,114 |
) | ||
|
Net cash provided by (used in) financing activities |
|
66,521 |
|
(14,910 |
) | ||
|
Increase (decrease) in cash and cash equivalents |
|
35,265 |
|
(120,449 |
) | ||
|
Cash and cash equivalents, beginning of period |
|
108,902 |
|
214,774 |
| ||
|
Cash and cash equivalents, end of period |
|
$ |
144,167 |
|
$ |
94,325 |
|
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
|
|
|
Twenty-six weeks ended |
|
Twenty-six weeks ended |
| ||
|
|
|
|
|
|
| ||
|
OPERATING ACTIVITIES: |
|
|
|
|
| ||
|
Net income (loss) |
|
$ |
122,489 |
|
$ |
(66,853 |
) |
|
Adjustments to reconcile to net cash provided by operating activities: |
|
|
|
|
| ||
|
Depreciation and amortization |
|
200,493 |
|
208,370 |
| ||
|
Lease termination and impairment charges |
|
22,362 |
|
19,926 |
| ||
|
LIFO charge |
|
35,000 |
|
27,502 |
| ||
|
Gain on sale of assets, net |
|
(7,065 |
) |
(13,005 |
) | ||
|
Stock-based compensation expense |
|
8,077 |
|
8,653 |
| ||
|
Loss on debt retirements, net |
|
62,172 |
|
17,842 |
| ||
|
Changes in operating assets and liabilities: |
|
|
|
|
| ||
|
Accounts receivable |
|
6,743 |
|
86,389 |
| ||
|
Inventories |
|
(95,926 |
) |
87,779 |
| ||
|
Accounts payable |
|
36,200 |
|
(117,116 |
) | ||
|
Other assets and liabilities, net |
|
(126,633 |
) |
71,230 |
| ||
|
Net cash provided by operating activities |
|
263,912 |
|
330,717 |
| ||
|
INVESTING ACTIVITIES: |
|
|
|
|
| ||
|
Payments for property, plant and equipment |
|
(170,850 |
) |
(148,211 |
) | ||
|
Intangible assets acquired |
|
(35,651 |
) |
(19,967 |
) | ||
|
Proceeds from sale-leaseback transactions |
|
3,989 |
|
3,950 |
| ||
|
Proceeds from dispositions of assets and investments |
|
9,698 |
|
15,900 |
| ||
|
Net cash used in investing activities |
|
(192,814 |
) |
(148,328 |
) | ||
|
FINANCING ACTIVITIES: |
|
|
|
|
| ||
|
Proceeds from issuance of long-term debt |
|
1,310,000 |
|
426,263 |
| ||
|
Net proceeds from (payments to) revolver |
|
12,000 |
|
(136,000 |
) | ||
|
Principal payments on long-term debt |
|
(1,321,971 |
) |
(471,323 |
) | ||
|
Change in zero balance cash accounts |
|
(5,319 |
) |
(48,481 |
) | ||
|
Net proceeds from the issuance of common stock |
|
12,263 |
|
1,004 |
| ||
|
Financing fees paid for early debt redemption |
|
(45,636 |
) |
(11,069 |
) | ||
|
Deferred financing costs paid |
|
(17,720 |
) |
(10,743 |
) | ||
|
Net cash used in financing activities |
|
(56,383 |
) |
(250,349 |
) | ||
|
Increase (decrease) in cash and cash equivalents |
|
14,715 |
|
(67,960 |
) | ||
|
Cash and cash equivalents, beginning of period |
|
129,452 |
|
162,285 |
| ||
|
Cash and cash equivalents, end of period |
|
$ |
144,167 |
|
$ |
94,325 |
|
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET INCOME GUIDANCE TO ADJUSTED EBITDA GUIDANCE
YEAR ENDING MARCH 1, 2014
(In thousands, except per share amounts)
|
|
|
Guidance Range |
| ||||
|
|
|
Low |
|
High |
| ||
|
|
|
|
|
|
| ||
|
Sales |
|
$ |
25,100,000 |
|
$ |
25,300,000 |
|
|
|
|
|
|
|
| ||
|
Same store sales (a) |
|
-0.50 |
% |
0.50 |
% | ||
|
|
|
|
|
|
| ||
|
Gross capital expenditures |
|
$ |
400,000 |
|
$ |
400,000 |
|
|
|
|
|
|
|
| ||
|
Reconciliation of net income to adjusted EBITDA: |
|
|
|
|
| ||
|
Net income |
|
$ |
182,000 |
|
$ |
268,000 |
|
|
Adjustments: |
|
|
|
|
| ||
|
Interest expense |
|
430,000 |
|
430,000 |
| ||
|
Income tax benefit |
|
(26,000 |
) |
(26,000 |
) | ||
|
Adjustments to tax indemnification asset |
|
30,000 |
|
30,000 |
| ||
|
Depreciation and amortization |
|
402,000 |
|
402,000 |
| ||
|
LIFO charge |
|
80,000 |
|
60,000 |
| ||
|
Store closing and impairment charges |
|
68,000 |
|
62,000 |
| ||
|
Stock-based compensation expense |
|
16,000 |
|
16,000 |
| ||
|
Loss on debt retirement |
|
62,000 |
|
62,000 |
| ||
|
Customer loyalty card program revenue deferral |
|
6,000 |
|
6,000 |
| ||
|
Other |
|
(10,000 |
) |
(10,000 |
) | ||
|
Adjusted EBITDA |
|
$ |
1,240,000 |
|
$ |
1,300,000 |
|
|
|
|
|
|
|
| ||
|
Diluted income per share |
|
$ |
0.18 |
|
$ |
0.27 |
|
(a) Reflects approximately 240 basis points reduction in pharmacy same store sales from new generic introductions.