John Standley to Step Down as Chief Executive
Officer Upon Appointment of Successor
Bryan Everett and Matt Schroeder Named COO and
CFO, Respectively
Kermit Crawford, President and COO, and Darren
Karst, CFO and CAO, Leaving the Company
Company Expects to Generate Annual Cost Savings
of $55 Million through Organizational Restructuring
Rite Aid Corporation (NYSE: RAD) announced today a leadership
transition plan and an organizational restructuring to better align
its structure with the Company’s operations and to reduce
costs.
As part of the leadership transition, John Standley will step
down as chief executive officer. The Board will promptly commence a
search process for a new CEO, and Standley will remain CEO until
the appointment of his successor.
Rite Aid also announced additional management changes, each of
which is effective immediately. Bryan Everett, chief operating
officer of Rite Aid Stores has been promoted to chief operating
officer of the Company, succeeding Kermit Crawford who is leaving
the Company. Matt Schroeder, chief accounting officer and
treasurer, has been promoted to chief financial officer. Schroeder
is succeeding Darren Karst who is leaving the Company this spring
after supporting a brief transition. Brian Hoover, group vice
president and controller, has been promoted to chief accounting
officer. Jocelyn Konrad, executive vice president, pharmacy, has
been promoted to executive vice president, pharmacy and retail
operations. Derek Griffith, executive vice president, store
operations is leaving the Company. Rite Aid also will consolidate
additional senior leadership roles resulting in the elimination of
certain positions.
In addition, the Company announced actions that will reduce
managerial layers and consolidate roles across the organization,
resulting in the elimination of approximately 400 full-time
positions, or more than 20% of the corporate positions located at
the Company’s headquarters and across the field organization.
Approximately two-thirds of the reductions will take place
immediately with the balance by the end of fiscal 2020. As a result
of the restructuring, Rite Aid expects to achieve annual cost
savings of approximately $55 million, of which approximately $42
million will be realized within fiscal year 2020. These cost
savings will serve to offset an expected reduction in income
associated with its diminishing obligations under the Transition
Services Agreement with Walgreen Co., which related to the prior
sale of stores. Rite Aid expects to incur a one-time restructuring
charge of approximately $38 million to achieve the targeted
cost savings.
"Rite Aid’s Board of Directors is committed to more closely
aligning the structure and leadership of the Company with our
present scale and today's announcement is an important step in
positioning Rite Aid for future success,” said Bruce Bodaken,
chairman of Rite Aid’s Board of Directors. “These are difficult
decisions and we recognize the implications they have for
individuals across our organization. However, it is imperative we
take action to reduce the cost of current operations and become a
more efficient and profitable company.”
“The Board believes that now is the right time to undertake a
leadership transition,” Bodaken continued. “We will be focused on
recruiting a leader that will best position Rite Aid to create
long-term value for shareholders. As we conduct the search process,
John has agreed to stay until we appoint his successor. We thank
John for his outstanding leadership in guiding the Company over the
past several years. His leadership and expertise has been critical
to ensuring the Company’s stability and success through an
extremely challenging environment. In addition, we are confident
that Bryan, Matt and our senior leadership team have the
capabilities and experience necessary to effectively guide Rite Aid
forward. On behalf of the Board, I want to thank Kermit, Darren,
and all the other departing associates for their service and
contributions to the Company.”
Bryan Everett Biography
Everett joined Rite Aid in August 2015 as executive vice
president of store operations and was promoted to chief operating
officer of Rite Aid Stores in 2017. Prior to joining Rite Aid, he
held multiple senior leadership positions at Target Corporation,
ultimately serving as senior vice president of store operations. In
this role, he focused on talent management, strategy development,
operational efficiency and integrated technology solutions. He also
led new format, new store and remodel programs while also
overseeing pharmacy and clinic operations. Before joining Target,
Everett also held store operations management positions at Fleming
Wholesale and ALDI Inc. Everett also serves as a member of The Rite
Aid Foundation Board of Directors.
Matt Schroeder Biography
Schroeder joined Rite Aid in 2000 as vice president of financial
accounting and was promoted to group vice president of strategy,
investor relations and treasurer, in 2010. In 2017, Schroeder was
promoted to senior vice president, chief accounting officer and
treasurer. Prior to joining the company, Schroeder worked for
Arthur Andersen, LLP, where he held several positions of increasing
responsibility, including audit senior and audit manager. He also
currently serves as treasurer of The Rite Aid Foundation, as well
as a member of its Board of Directors.
About Rite Aid Corporation
Rite Aid Corporation is one of the nation's leading drugstore
chains with fiscal 2018 annual revenues of $21.5 billion.
Information about Rite Aid, including corporate background and
press releases, is available through the company's website at
www.riteaid.com.
Forward-looking Statements
This press release contains certain forward-looking statements
within the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934, both as amended by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements may
generally be identified by the use of the words “anticipates,”
“expects,” “intends,” “plans,” “should,” “could,” “would,” “may,”
“will,” “believes,” “estimates,” “potential,” “target,” or
“continue” and variations or similar expressions. These statements
are based upon the current expectations and beliefs and are subject
to certain risks and uncertainties that could cause actual results
to differ materially from those described in the forward-looking
statements. These risks and uncertainties may include, but are not
limited to, our ability to successfully execute and achieve
benefits from our leadership transition plan and organizational
restructuring, including our chief executive officer search
process, and to manage the transition to a new chief executive
officer and other management; the potential for operational
disruptions due to, among other things, concerns of management,
employees, current and potential customers, other third parties
with whom we do business and shareholders; the success of any
changes to our business strategy that may be implemented under our
new chief executive officer and other management; our ability to
achieve cost savings through the organizational restructurings
within the anticipated timeframe, if at all; possible changes in
the size and components of the expected costs and charges
associated with the organizational restructuring plan; and the
outlook for and future growth of the Company. A detailed discussion
of assumptions and uncertainties are more fully described in Item
1A (Risk Factors) of our most recent Annual Report on
Form 10-K and in other documents that we file or furnish with
the Securities and Exchange Commission (the “SEC”), which you are
encouraged to read. Readers are cautioned not to place undue
reliance on any of these forward-looking statements. These
forward-looking statements speak only as of the date hereof. Rite
Aid undertakes no obligation to update any of these forward-looking
statements to reflect events or circumstances after the date of
this press release or to reflect actual outcomes, unless required
by law.
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INVESTORS:Byron Purcell(717) 975-5809
MEDIA:Chris Savarese(717) 975-5718
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