- Fourth Quarter Net Income of $55.4
Million and Net Income per Diluted Share of $0.06, Compared to
Prior Year’s Fourth Quarter Net Income of $123.1 Million and Net
Income per Diluted Share of $0.13
- Excluding LIFO and Losses on Debt
Retirement in Both Periods, Net Income was $99.5 Million or $0.10
Per Diluted Share This Year Compared to $70.4 Million or $0.07 Per
Diluted Share Last Year
- Full Year Net Income of $249.4
Million and Net Income per Diluted Share of $0.23, Compared to
Prior Year Net Income of $118.1 Million and Net Income per Diluted
Share of $0.12
- Record Fourth Quarter Adjusted
EBITDA of $356.3 Million Compared to Adjusted EBITDA of $340.3
Million in Prior Year’s Fourth Quarter
- Record Full Year Adjusted EBITDA of
$1,325.0 Million Compared to Adjusted EBITDA of $1,128.4 Million in
Prior Year, a 17.4 percent increase
- Rite Aid Provides Outlook for Fiscal
2015
Rite Aid Corporation (NYSE:RAD) today reported operating results
for its fourth quarter and fiscal year ended March 1, 2014.
For the fourth quarter, the company reported revenues of $6.6
billion, net income of $55.4 million or $0.06 per diluted share,
and Adjusted EBITDA of $356.3 million, or 5.4 percent of
revenues.
For the full year, the company reported revenues of $25.5
billion, net income of $249.4 million or $0.23 per diluted share,
and Adjusted EBITDA of $1,325.0 million, or 5.2 percent of
revenues.
“Thanks to the strong teamwork of our dedicated Rite Aid
associates, we delivered strong fourth-quarter and fiscal 2014
results, including new company records for fourth-quarter and
full-year Adjusted EBITDA,” said Rite Aid Chairman and CEO John
Standley. “These accomplishments reflect the significant progress
we’re making in executing key initiatives and delivering on our
promise to actively work with our customers to keep them well.”
“Our recent acquisitions of Health Dialog and RediClinic, our
expanded partnership with McKesson and our continued commitment to
investing in our store base have positioned us to transition our
strategy from turnaround to growth as we more aggressively pursue
opportunities to become a growing retail healthcare company.”
Fourth Quarter Summary
Revenues for the quarter were $6.6 billion versus revenues of
$6.5 billion in the prior year’s fourth quarter. Revenues increased
2.2 percent primarily as a result of an increase in pharmacy same
store sales.
Same store sales for the quarter increased 2.1 percent over the
prior year, consisting of a 3.5 percent increase in pharmacy sales,
partially offset by a 0.7 percent decrease in front end sales.
Pharmacy sales included an approximate 123 basis point negative
impact from new generic introductions. The number of prescriptions
filled in same stores decreased 1.8 percent over the prior year
period, with 1.3 percent of this decrease being driven by a
decrease in flu-related prescriptions and flu shots. Prescription
sales accounted for 67.5 percent of total drugstore sales, and
third party prescription revenue was 97.1 percent of pharmacy
sales.
Net income was $55.4 million or $0.06 per diluted share compared
to last year’s fourth quarter net income of $123.1 million or $0.13
per diluted share. Current year net income included a LIFO charge
of $44.1 million due to pharmacy inflation while prior year net
income included a LIFO credit of $175.4 million resulting from
significant generic deflation. The increase in LIFO expense was
partially offset by an increase in Adjusted EBITDA, no loss on debt
retirement in the current year compared to a $122.7 million loss on
debt retirement in the prior year and decreases in interest expense
and lease termination and impairment charges. Excluding the LIFO
charge, current year net income was $99.5 million or $.10 per
diluted share. Excluding the LIFO credit and loss on debt
retirement, prior year net income was $70.4 million or $.07 per
diluted share.
Adjusted EBITDA (which is reconciled to net income on the
attached table) was $356.3 million or 5.4 percent of revenues for
the fourth quarter compared to $340.3 million or 5.3 percent of
revenues for the like period last year. Adjusted EBITDA improved
due to an increase in pharmacy gross profit, driven by improvements
in pharmacy revenues and purchasing efficiencies, offset partially
by an increase in selling general and administrative expenses.
In the fourth quarter, the company relocated 2 stores, remodeled
94 stores and expanded 3 stores, bringing the total number of
wellness stores chainwide to 1,215. The company also closed 8
stores, resulting in a total store count of 4,587 at the end of the
fourth quarter.
Full Year Results
For the fiscal year ended March 1, 2014, Rite Aid had revenues
of $25.5 billion compared to $25.4 billion for the prior year.
Revenues increased 0.5 percent primarily as a result of an increase
in same store sales.
Same store sales for the year increased 0.7 percent consisting
of a 1.2 percent increase in pharmacy sales, partially offset by a
0.2 percent decrease in front end sales. Pharmacy sales included an
approximate 232 basis point negative impact from new generic
introductions. The number of prescriptions filled in same stores
decreased 0.3 percent 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.
Net income for fiscal 2014 was $249.4 million or $0.23 per
diluted share compared to last year’s net income of $118.1 million
or $0.12 per diluted share. Contributing to the increase in net
income was an increase in Adjusted EBITDA and lower interest
expense, a loss on debt retirement of $62.4 million versus $140.5
million in the prior year, and lower lease termination and
impairment charges. Partially offsetting these improvements was a
LIFO charge of $104.1 million in the current year compared to a
LIFO credit of $147.9 million in the prior year.
As computed on the attached table, Adjusted EBITDA was $1,325.0
million or 5.2 percent of revenues for the year compared to
$1,128.4 million or 4.4 percent of revenues for last year. The
increase in Adjusted EBITDA was driven by increased pharmacy gross
profit due to the continued benefit of generic introductions on
pharmacy gross margin in the first half of the fiscal year,
purchasing efficiencies on generic drugs and strong cost
control.
For the year, the company relocated 11 stores, acquired 1 store,
remodeled 405 stores, expanded 4 stores, and closed 37 stores.
Outlook for Fiscal 2015
The company’s outlook for fiscal 2015 is based on the
anticipated benefits of its wellness remodels, customer loyalty
program, new pharmacy sourcing arrangement with McKesson and other
initiatives to grow sales and drive operational efficiencies. The
company’s outlook also considers planned wage and benefit
increases, the introduction of new generics in the second half of
Fiscal 2015, generic drug price increases and a challenging
reimbursement rate environment.
Rite Aid said it expects sales to be between $26.0 billion and
$26.5 billion in fiscal 2015 with same store sales expected to
range from an increase of 2.50 percent to an increase of 4.50
percent over fiscal 2014.
Adjusted EBITDA (which is reconciled to net income on the
attached table) is expected to be between $1.325 billion and $1.4
billion.
Net income for fiscal 2015 is expected to be between $313.0
million and $423.0 million or income per diluted share of $0.31 to
$0.42.
Capital expenditures are expected to be approximately $525
million. This number does not include the purchases of Health
Dialog or RediClinic.
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 Daylight Time today. A playback of the call will also be
available by telephone beginning at 12 p.m. Eastern Daylight Time
today until 11:59 p.m. Eastern Time on April 12, 2014. 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 17821795.
Rite Aid is one of the nation’s leading drugstore chains with
nearly 4,600 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)
March 1, 2014 March 2, 2013 ASSETS Current assets: Cash and
cash equivalents $ 146,406 $ 129,452 Accounts receivable, net
949,062 929,476 Inventories, net of LIFO reserve of $1,018,581 and
$915,241 2,993,948
3,154,742
Prepaid expenses and other current assets 195,709
195,377 Total current assets 4,285,125 4,409,047
Property, plant and equipment, net 1,957,329 1,895,650 Other
intangibles, net 431,227 464,404 Other assets 271,190
309,618 Total assets $ 6,944,871 $ 7,078,719
LIABILITIES AND STOCKHOLDERS' DEFICIT Current
liabilities: Current maturities of long-term debt and lease
financing obligations $
49,174
$ 37,311 Accounts payable 1,292,419 1,384,644 Accrued salaries,
wages and other current liabilities 1,165,859
1,156,315 Total current liabilities 2,507,452 2,578,270
Long-term debt, less current maturities 5,632,798 5,904,370 Lease
financing obligations, less current maturities
75,171
91,850 Other noncurrent liabilities 843,152
963,663 Total liabilities 9,058,573 9,538,153
Commitments and contingencies - - Stockholders' deficit: Preferred
stock - Series G - 1 Preferred stock - Series H - 182,097 Common
stock 971,331 904,268 Additional paid-in capital 4,468,149
4,280,831 Accumulated deficit (7,515,848 ) (7,765,262 ) Accumulated
other comprehensive loss (37,334 ) (61,369 ) Total
stockholders' deficit (2,113,702 ) (2,459,434 ) Total
liabilities and stockholders' deficit $ 6,944,871 $
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 March 1, 2014 March 2,
2013 Revenues $ 6,597,459 $ 6,455,245 Costs and expenses: Cost of
goods sold 4,711,743 4,407,482 Selling, general and administrative
expenses 1,716,671 1,682,332 Lease termination and impairment
charges 17,270 36,567 Interest expense 101,992 127,408 Loss on debt
retirements, net - 122,660 Loss on sale of assets, net 412
2,491 6,548,088
6,378,940 Income before income taxes 49,371 76,305
Income tax benefit (6,006 ) (46,782 ) Net income $
55,377 $ 123,087 Basic and diluted earnings
per share: Numerator for earnings per share: Net income $
55,377 $ 123,087 Accretion of redeemable preferred stock - (25 )
Cumulative preferred stock dividends - (2,691
) Income attributable to common stockholders - basic 55,377 120,371
Add back - Interest on convertible notes 1,364 1,364 Add back -
Cumulative preferred stock dividends - 2,691
Income attributable to common stockholders - diluted $
56,741 $ 124,426 Denominator:
Basic weighted average shares 956,925 891,303 Outstanding options
and restricted shares, net 35,304 19,608 Convertible preferred
stock - 33,109 Convertible notes 24,800 24,800
Diluted weighted average shares 1,017,029
968,820 Basic income per share $ 0.06 $
0.14 Diluted income per share $ 0.06 $ 0.13 RITE AID
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF OPERATIONS (Dollars in thousands, except per share amounts)
(unaudited) Fifty-two weeks ended Fifty-two weeks
ended March 1, 2014 March 2, 2013 Revenues $ 25,526,413 $
25,392,263 Costs and expenses: Cost of goods sold 18,202,679
18,073,987 Selling, general and administrative expenses 6,561,162
6,600,765 Lease termination and impairment charges 41,304 70,859
Interest expense 424,591 515,421 Loss on debt retirements, net
62,443 140,502 Gain on sale of assets, net (15,984 )
(16,776 ) 25,276,195 25,384,758
Income before income taxes 250,218 7,505 Income tax expense
(benefit) 804 (110,600 ) Net income $ 249,414
$ 118,105 Basic and diluted earnings per
share: Numerator for earnings per share: Net income $
249,414 $ 118,105 Accretion of redeemable preferred stock (77 )
(102 ) Cumulative preferred stock dividends (8,318 ) (10,528 )
Conversion of Series G and H preferred stock (25,603 )
- Income attributable to common stockholders - basic
215,416 107,475 Add back - Interest on convertible notes
5,456 - Income attributable to common
stockholders - diluted $ 220,872 $ 107,475
Denominator: Basic weighted average shares 922,199
889,562 Outstanding options and restricted shares, net 32,093
17,697 Convertible notes 24,800 -
Diluted weighted average shares 979,092
907,259 Basic income per share $ 0.23 $ 0.12 Diluted
income per share $ 0.23 $ 0.12 RITE AID CORPORATION AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME (In thousands) (unaudited) Thirteen weeks
ended Thirteen weeks ended March 1, 2014 March 2, 2013 Net income $
55,377 $ 123,087 Other comprehensive income (loss): Defined benefit
pension plans: Amortization of prior service cost, net transition
obligation and net actuarial losses included in net periodic
pension cost 20,247 (11,794 ) Total other
comprehensive income (loss) 20,247 (11,794 )
Comprehensive income $ 75,624 $ 111,293 RITE
AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (In thousands) (unaudited)
Fifty-two weeks ended Fifty-two weeks ended March 1, 2014 March 2,
2013 Net income $ 249,414 $ 118,105 Other comprehensive income
(loss): Defined benefit pension plans:
Amortization of prior service cost, net
transition obligation and net actuarial losses included in net
periodic pension cost
24,035 (8,735 ) Total other comprehensive income
(loss) 24,035 (8,735 ) Comprehensive income $ 273,449
$ 109,370 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 March 1, 2014
March 2, 2013
SUPPLEMENTAL OPERATING INFORMATION
Revenues $ 6,597,459 $ 6,455,245 Cost of goods sold
4,711,743 4,407,482 Gross profit 1,885,716
2,047,763 LIFO charge (credit) 44,142 (175,384
) FIFO gross profit 1,929,858 1,872,379 Gross profit as a
percentage of revenues 28.58 % 31.72 % LIFO charge (credit) as a
percentage of revenues 0.67 % -2.72 % FIFO gross profit as a
percentage of revenues 29.25 % 29.01 % Selling, general and
administrative expenses 1,716,671 1,682,332 Selling, general and
administrative expenses as a percentage of revenues 26.02 % 26.06 %
Cash interest expense 98,015 119,497 Non-cash interest
expense 3,977 7,911 Total interest
expense 101,992 127,408 Adjusted EBITDA 356,330
340,277 Adjusted EBITDA as a percentage of revenues 5.40 % 5.27 %
Net income 55,377 123,087 Net income as a percentage of
revenues 0.84 % 1.91 % Total debt 5,757,143 6,033,531
Invested cash 2,484 16,127 Total debt
net of invested cash 5,754,659 6,017,404
SUPPLEMENTAL CASH FLOW INFORMATION Payments for
property, plant and equipment 78,601 82,651 Intangible assets
acquired 22,748 21,475 Total cash
capital expenditures 101,349 104,126 Equipment received for noncash
consideration 1,237 649 Equipment financed under capital leases
3,042 655 Gross capital expenditures $
105,628 $ 105,430 RITE AID CORPORATION AND
SUBSIDIARIES SUPPLEMENTAL OPERATING AND CASH FLOW
INFORMATION (Dollars in thousands, except per share amounts)
(unaudited) Fifty-two weeks ended Fifty-two weeks
ended March 1, 2014 March 2, 2013
SUPPLEMENTAL OPERATING
INFORMATION Revenues $ 25,526,413 $ 25,392,263 Cost of
goods sold 18,202,679 18,073,987 Gross
profit 7,323,734 7,318,276 LIFO charge (credit) 104,142
(147,882 ) FIFO gross profit 7,427,876 7,170,394
Gross profit as a percentage of revenues 28.69 % 28.82 %
LIFO charge (credit) as a percentage of revenues 0.41 % -0.58 %
FIFO gross profit as a percentage of revenues 29.10 % 28.24 %
Selling, general and administrative expenses 6,561,162
6,600,765 Selling, general and administrative expenses as a
percentage of revenues 25.70 % 26.00 % Cash interest expense
407,957 484,426 Non-cash interest expense 16,634
30,995 Total interest expense 424,591 515,421
Adjusted EBITDA 1,324,959 1,128,379 Adjusted EBITDA as a
percentage of revenues 5.19 % 4.44 % Net income 249,414
118,105 Net income as a percentage of revenues 0.98 % 0.47 %
Total debt 5,757,143 6,033,531 Invested cash 2,484
16,127 Total debt net of invested cash 5,754,659
6,017,404
SUPPLEMENTAL CASH FLOW INFORMATION
Payments for property, plant and equipment 333,870 315,846
Intangible assets acquired 87,353 67,134
Total cash capital expenditures 421,223 382,980 Equipment
received for noncash consideration 2,825 3,285 Equipment financed
under capital leases 18,065 7,906 Gross
capital expenditures $ 442,113 $ 394,171 RITE
AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (In thousands)
Thirteen weeks ended Thirteen weeks ended
March 1, 2014 March 2, 2013 Reconciliation of net
income to adjusted EBITDA: Net income $ 55,377 $ 123,087
Adjustments: Interest expense 101,992 127,408 Income tax benefit
(6,006 ) (46,782 )
Adjustments to tax indemnification
asset
32,356 31,077 Depreciation and amortization 102,060 102,951 LIFO
charge (credit) 44,142 (175,384 ) Lease termination and impairment
charges 17,270 36,567 Stock-based compensation expense 4,000 4,845
Loss on sale of assets, net 412 2,491 Loss on debt retirements, net
- 122,660 Closed facility liquidation expense 1,001 1,009 Customer
loyalty card program revenue deferral 3,501 10,317 Other 225
31 Adjusted EBITDA $ 356,330 $ 340,277
Percent of revenues 5.40 % 5.27 % RITE AID
CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (In thousands)
Fifty-two weeks ended Fifty-two weeks ended
March 1, 2014 March 2, 2013 Reconciliation of net
income to adjusted EBITDA: Net income $ 249,414 $ 118,105
Adjustments: Interest expense 424,591 515,421 Income tax expense
(benefit) 804 (110,600 )
Adjustments to tax indemnification
asset
30,516 91,314 Depreciation and amortization 403,741 414,111 LIFO
charge (credit) 104,142 (147,882 ) Lease termination and impairment
charges 41,304 70,859 Stock-based compensation expense 16,194
17,717 Gain on sale of assets, net (15,984 ) (16,776 ) Loss on debt
retirements, net 62,443 140,502 Closed facility liquidation expense
3,849 5,272 Severance costs - (72 ) Customer loyalty card program
revenue deferral 2,679 26,564 Other 1,266
3,844 Adjusted EBITDA $ 1,324,959 $ 1,128,379
Percent of revenues 5.19 % 4.44 % RITE AID CORPORATION AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands) (unaudited) Thirteen
weeks ended Thirteen weeks ended March 1, 2014 March 2, 2013
OPERATING ACTIVITIES: Net income $ 55,377 $ 123,087
Adjustments to reconcile to net cash provided by operating
activities: Depreciation and amortization 102,060 102,951 Lease
termination and impairment charges 17,270 36,567 LIFO charge
(credit) 44,142 (175,384 ) Loss on sale of assets, net 412 2,491
Stock-based compensation expense 4,000 4,845 Loss on debt
retirements, net - 122,660 Excess tax benefit on stock options
(26,665 ) - Changes in operating assets and liabilities: Accounts
receivable (107,946 ) (13,011 ) Inventories 262,965 117,045
Accounts payable (125,934 ) (55,566 ) Other assets and liabilities,
net (31,553 ) (45,334 )
Net cash provided by operating
activities
194,128 220,351 INVESTING ACTIVITIES: Payments for property, plant
and equipment (78,601 ) (82,651 ) Intangible assets acquired
(22,748 ) (21,475 ) Proceeds from dispositions of assets and
investments 14,259 2,576 Proceeds from insured loss 9,006
- Net cash used in investing activities
(78,084 ) (101,550 ) FINANCING ACTIVITIES: Proceeds from issuance
of long-term debt - 1,631,000 Net (payments to) proceeds from
revolver (190,000 ) 665,000 Principal payments on long-term debt
(7,907 ) (2,441,062 ) Change in zero balance cash accounts 10,066
(152 ) Net proceeds from the issuance of common stock 8,336 543
Financing fees paid for early debt redemption - (64,305 ) Excess
tax benefit on stock options 26,665 - Deferred financing costs paid
(10 ) (44,014 ) Net cash used in financing activities
(152,850 ) (252,990 ) Decrease in cash and cash
equivalents (36,806 ) (134,189 ) Cash and cash equivalents,
beginning of period 183,212 263,641
Cash and cash equivalents, end of period $ 146,406 $ 129,452
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands)
(unaudited) Fifty-two weeks ended Fifty-two
weeks ended March 1, 2014 March 2, 2013 OPERATING
ACTIVITIES: Net income $ 249,414 $ 118,105 Adjustments to reconcile
to net cash provided by operating activities: Depreciation and
amortization 403,741 414,111 Lease termination and impairment
charges 41,304 70,859 Gain from lease termination (8,750 ) - LIFO
charge (credit) 104,142 (147,882 ) Gain on sale of assets, net
(15,984 ) (16,776 ) Stock-based compensation expense 16,194 17,717
Loss on debt retirements, net 62,443 140,502 Excess tax benefit on
stock options (26,665 ) - Changes in operating assets and
liabilities: Accounts receivable (28,051 ) 82,721 Inventories
56,557 130,100 Accounts payable (100,774 ) (68 ) Other assets and
liabilities, net (51,525 ) 10,199 Net cash
provided by operating activities 702,046 819,588 INVESTING
ACTIVITIES: Payments for property, plant and equipment (333,870 )
(315,846 ) Intangible assets acquired (87,353 ) (67,134 ) Proceeds
from sale-leaseback transactions 3,989 6,355 Proceeds from
dispositions of assets and investments 28,416 30,320 Proceeds from
lease termination 8,750 - Proceeds from insured loss 15,144
- Net cash used in investing activities
(364,924 ) (346,305 ) FINANCING ACTIVITIES: Proceeds from issuance
of long-term debt 1,310,000 2,057,263 Net (payments to) proceeds
from revolver (265,000 ) 529,000 Principal payments on long-term
debt (1,340,435 ) (2,920,209 ) Change in zero balance cash accounts
(95 ) (43,659 ) Net proceeds from the issuance of common stock
33,217 1,646 Payments for the repurchase of preferred stock (21,034
) - Financing fees paid for early debt redemption (45,636 ) (75,374
) Excess tax benefit on stock options 26,665 - Deferred financing
costs paid (17,850 ) (54,783 ) Net cash used in
financing activities (320,168 ) (506,116 ) Increase
(decrease) in cash and cash equivalents 16,954 (32,833 ) Cash and
cash equivalents, beginning of period 129,452
162,285 Cash and cash equivalents, end of period $ 146,406
$ 129,452 RITE AID CORPORATION AND
SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET INCOME
GUIDANCE TO ADJUSTED EBITDA GUIDANCE YEAR ENDING FEBRUARY 28, 2015
(In thousands, except per share amounts)
Guidance Range Low High Sales $
26,000,000 $ 26,500,000 Same store sales 2.50 % 4.50 %
Gross capital expenditures $ 525,000 $ 525,000
Reconciliation of net income to adjusted EBITDA: Net income $
313,000 $ 423,000 Adjustments: Interest expense 390,000
390,000 Income tax expense 70,000 60,000 Depreciation and
amortization 411,000 409,000 LIFO charge 50,000 35,000 Store
closing and impairment charges 55,000 50,000 Loss on debt
retirement 17,000 17,000 Other 19,000 16,000
Adjusted EBITDA $ 1,325,000 $ 1,400,000
Diluted income per share $ 0.31 $ 0.42
Rite Aid CorporationInvestors:Matt Schroeder,
717-214-8867investor@riteaid.comorMedia:Susan Henderson,
717-730-7766
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