- Revenues from Continuing Operations Increased 2.2 Percent to
$6.11 Billion Compared to Prior Year Second Quarter Revenues from
Continuing Operations of $5.98 Billion
- Second Quarter Net Loss from Continuing Operations of $100.3
Million or $1.86 Per Share, Compared to the Prior Year Second
Quarter Net Loss of $13.2 Million or $0.25 Per Share
- Second Quarter Adjusted Net Loss from Continuing Operations
of $22.0 Million or $0.41 Per Share, Compared to the Prior Year
Second Quarter Adjusted Net Income of $13.5 Million or $0.25 Per
Share
- Second Quarter Adjusted EBITDA from Continuing Operations of
$106.2 Million, Compared to the Prior Year Second Quarter Adjusted
EBITDA of $151.6 Million
- Company Entered into an Amendment to its Senior Secured
Credit Agreement, which Extends the Company’s Debt Maturity Profile
and Provides Improved Pricing on its “First-In, Last Out” Senior
Secured Term Loan
Rite Aid Corporation (NYSE: RAD) today reported operating
results for its second fiscal quarter ended August 28, 2021.
For the second quarter, the company reported net loss from
continuing operations of $100.3 million, or $1.86 loss per share,
Adjusted net loss from continuing operations of $22.0 million, or
$0.41 loss per share, and Adjusted EBITDA from continuing
operations of $106.2 million, or 1.7 percent of revenues.
“We are pleased with our second quarter results, which show
continued improvement in our underlying business as we delivered
another quarter of revenue growth and Adjusted EBITDA that exceeded
expectations,” said Heyward Donigan, president and chief executive
officer, Rite Aid. “We also amended and extended our revolving
credit facility, successfully extending the maturity out to August
2026 as we continue to enhance our financial flexibility to deliver
on our RxEvolution strategy.
“Our results were driven by the continued strong execution of
our COVID-19 vaccine administration, improved profitability at
Elixir and benefits from our work to revitalize our retail and
digital experiences. Since launching our strategy last March, our
organization is executing a clear plan to build top-line momentum
with an intense focus on improving our profitability. We have
transformed our business to be more relevant to our target growth
consumer and more efficient in how we operate, while making
investments necessary to drive the long-term health of our
business. The progress on our RxEvolution strategy validates our
belief that, as the trusted everyday care connector, Rite Aid will
drive lower healthcare costs through better coordination, stronger
engagement, and personalized services that help our customers
achieve whole health for life.”
Consolidated Second Quarter Summary
(dollars in thousands)
Thirteen
Week Period Ended
Twenty-six
Week Period Ended
August 28,
2021
August 29,
2020
August 28,
2021
August 29,
2020
Revenues from continuing operations
$
6,113,000
$
5,981,970
$
12,273,985
$
12,009,346
Net loss from continuing operations
(100,301)
(13,197)
(113,358)
(85,899)
Adjusted EBITDA from continuing
operations
106,160
151,603
245,037
258,995
Revenues from continuing operations for the quarter were $6.11
billion compared to revenues from continuing operations of $5.98
billion in the prior year’s quarter. The 2.2 percent increase in
revenues was driven by growth at the Retail Pharmacy Segment,
partially offset by a decline at the Pharmacy Services Segment.
Net loss from continuing operations was $100.3 million, or $1.86
per share, compared to last year’s second quarter net loss from
continuing operations of $13.2 million, or $0.25 per share. The
increase in net loss is due primarily to a decrease in Adjusted
EBITDA, higher litigation settlements, a higher loss on sale of
assets resulting from the accelerated sale of our CMS receivable in
the current year which provided increased liquidity, and a loss on
debt modifications and retirements compared to a gain on debt
modifications and retirements in the prior year second quarter.
These items were partially offset by lower restructuring-related
costs.
Retail Pharmacy Segment
(dollars in thousands)
Thirteen
Week Period Ended
Twenty-six
Week Period Ended
August 28,
2021
August 29,
2020
August 28,
2021
August 29,
2020
Revenues from continuing operations
$
4,277,218
$
4,017,912
$
8,628,900
$
8,141,183
Adjusted EBITDA from continuing
operations
69,369
122,340
164,283
185,322
Retail Pharmacy Segment revenues from continuing operations
increased 6.5 percent over the prior year quarter, driven by an
increase in same store sales and the inclusion of Bartell’s results
this quarter. Same store sales from continuing operations for the
second quarter increased 2.6 percent over the prior year period,
consisting of a 5.0 percent increase in pharmacy sales and a 2.8
percent decrease in front-end sales. Front-end same store sales,
excluding cigarettes and tobacco products, decreased 2.4 percent.
On a 2-year stack basis, front-end same store sales, excluding
cigarettes and tobacco products, increased 3.0 percent driven by
increases in vitamins, color cosmetics and baby care resulting from
the Company’s work to enhance the assortment in these categories.
The number of prescriptions filled in same stores, adjusted to
30-day equivalents, increased 7.1 percent over the prior year
period. In addition to the benefit from COVID-19 vaccinations,
other acute prescriptions increased 1.5 percent and maintenance
prescriptions increased 2.4 percent on a same store basis.
Prescription sales from continuing operations accounted for 69.2
percent of total drugstore sales. Total store count at the end of
the second quarter was 2,501.
Retail Pharmacy Segment Adjusted EBITDA from continuing
operations was $69.4 million, or 1.6 percent of revenues, for the
second quarter compared to last year’s second quarter Adjusted
EBITDA from continuing operations of $122.3 million, or 3.0 percent
of revenues. The decline in Adjusted EBITDA was due to an increase
in SG&A expenses, partially offset by increased gross profit.
SG&A expenses were negatively impacted by cycling the benefit
from the prior year change to modernize our associate PTO plans,
incremental costs from recently acquired Bartell stores and
incremental payroll and marketing costs incurred to drive COVID-19
vaccines. Gross profit benefited from higher pharmacy same store
sales, partially offset by pharmacy reimbursement rate pressures
that were not fully offset by generic drug cost reductions and a
decline in front end gross profit as we cycled the impact of the
prior year’s COVID-19 buying surge.
Pharmacy Services Segment
(dollars in thousands)
Thirteen
Week Period Ended
Twenty-six
Week Period Ended
August 28,
2021
August 29,
2020
August 28,
2021
August 29,
2020
Revenues from continuing operations
$
1,898,213
$
2,038,378
$
3,770,495
$
4,015,624
Adjusted EBITDA from continuing
operations
36,791
29,263
80,754
73,673
Pharmacy Services Segment revenues were $1.9 billion for the
quarter, a decrease of 6.9 percent compared to the prior year
quarter. The decrease in revenues was primarily the result of a
decrease in membership in the PBM business and a decrease in Elixir
Insurance membership.
Pharmacy Services Segment Adjusted EBITDA from continuing
operations was $36.8 million, or 1.9 percent of revenues, for the
second quarter compared to last year’s second quarter Adjusted
EBITDA from continuing operations of $29.3 million, or 1.4 percent
of revenues. Current year’s performance benefitted from increased
gross profit resulting from improvements in the Company’s discount
card business and good network management, partially offset by the
impact from the loss in lives and cost pressures in the Elixir
Insurance business. Prior year’s Adjusted EBITDA was negatively
impacted by a reduction in gross profit related to a change in
rebate aggregator at our MedTrak subsidiary.
Outlook for Fiscal 2022
As a result of the momentum in the second quarter, and an
anticipated increase in demand for COVID-19 vaccines and testing
versus prior expectations, Rite Aid Corporation is raising its
fiscal 2022 Adjusted EBITDA guidance.
Total revenues are expected to be between $25.1 billion and
$25.5 billion in fiscal 2022. Pharmacy Services Segment revenue is
expected to be between $7.7 billion and $7.8 billion (net of any
intercompany revenues to the Retail Pharmacy Segment).
Net loss is expected to be between $221 million and $197
million.
Adjusted EBITDA is expected to be between $460 million and $500
million.
Adjusted net loss per share is expected to be between $0.90 and
$0.53.
Capital expenditures are expected to be approximately $300
million.
Conference Call Broadcast
Rite Aid will hold an analyst call at 8:30 a.m. Eastern Time
today with remarks by Rite Aid's management team. The call will be
broadcast via the Internet at https://investors.riteaid.com. The
telephone replay will be available beginning at 12:00 p.m. Eastern
Time on Thursday, Sept. 23, 2021 and ending at 11:59 p.m. Eastern
Time on Oct. 24, 2021. To access the replay of the call, telephone
(800) 585-8367 or (416) 621-4642 and enter the seven-digit
reservation number 5387890. The webcast replay of the call will
also be available at https://investors.riteaid.com starting at 12
p.m. Eastern Time today. The playback will be available until the
company’s next conference call.
About Rite Aid Corporation
Rite Aid Corporation is on the front lines of delivering
healthcare services and retail products to Americans 365 days a
year. Our pharmacists are uniquely positioned to engage with
customers and improve their health outcomes. We provide an array of
whole being health products and services for the entire family
through over 2,500 retail pharmacy locations across 17 states.
Through Elixir, we provide pharmacy benefits and services to
millions of members nationwide. For more information,
www.riteaid.com.
Cautionary Statement Regarding Forward-Looking
Statements
Statements in this release that are not historical, are
forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Such statements include, but are not limited to, statements
regarding Rite Aid's outlook and guidance for fiscal 2022; the
continued impact of the global coronavirus (COVID-19) pandemic on
Rite Aid’s business; and any assumptions underlying any of the
foregoing. Words such as "anticipate," "believe," "continue,"
"could," "estimate," "expect," "intend," "may," "plan," "predict,"
"project," "should," and "will" and variations of such words and
similar expressions are intended to identify such forward-looking
statements.
These forward-looking statements are not guarantees of future
performance and involve risks, assumptions and uncertainties,
including, but not limited to: risks related to the impact of the
COVID-19 global pandemic, such as the scope and duration of the
outbreak, and government responses thereto; the impact of COVID-19
on our workforce, operations, stores, expenses, and supply chain,
and the operations or behaviors of our customers, suppliers and
business partners; our ability to successfully implement our
RxEvolution and other strategies; the impact of our high level of
indebtedness, the ability to refinance such indebtedness on
acceptable terms and our ability to satisfy our obligations and the
other covenants contained in our debt agreements; outcome of
pending or new litigation, including related to Opioids, “usual and
customary” pricing or other matters; our ability to monetize the
CMS receivable created in our Part D business; general competitive,
economic, industry, market, political (including healthcare reform)
and regulatory conditions (including changes to laws or regulations
relating to labor or wages), civil unrest (including any resulting
store closures, damage, or loss of inventory), as well as other
factors that impact the markets in which we operate; the impact of
private and public third-party payers continued reduction in
prescription drug reimbursements and efforts to encourage mail
order; our ability to manage expenses and our investments in
working capital; our ability to achieve the benefits of our efforts
to reduce the costs of our generic and other drugs; our ability to
achieve cost savings and other benefits of our restructuring
efforts within our anticipated timeframe, if at all; the outcome of
our continuing efforts to monitor and comply with applicable laws,
regulations, policies and procedures; and our ability to partner
and have relationships with health plans and health systems.
These and other risks, assumptions and uncertainties are more
fully described in Item 1A (Risk Factors) of our most recent Annual
Report on Form 10-K and in other documents that we file or furnish
with the Securities and Exchange Commission (the “SEC”), which you
are encouraged to read. To the extent that COVID-19 adversely
affects our business and financial results, it may also have the
effect of heightening many of such risk factors.
Should one or more of these risks or uncertainties materialize,
or should underlying assumptions prove incorrect, actual results
may vary materially from those indicated or anticipated by such
forward-looking statements. Accordingly, you are cautioned not to
rely on these forward-looking statements, which speak only as of
the date they are made.
The degree to which COVID-19 may adversely affect Rite Aid’s
results and operations, including its ability to achieve its
outlook for fiscal 2022 guidance, will depend on numerous evolving
factors and future developments, which are highly uncertain,
including, but not limited to, the duration and spread of the
COVID-19 outbreak, the actions to contain the virus or treat its
impact, and how quickly and to what extent normal economic and
operating conditions can resume. As a result, the impact on Rite
Aid’s financial and operating results cannot be reasonably
estimated with specificity at this time, but the impact could be
material. Rite Aid expressly disclaims any current intention, and
assumes no duty, to update publicly any forward-looking statement
after the distribution of this release, whether as a result of new
information, future events, changes in assumptions or
otherwise.
All references to “Company” and “Rite Aid” as used throughout
this release refer to Rite Aid Corporation and its affiliates.
Reconciliation of Non-GAAP Financial Measures
Rite Aid separately reports financial results on the basis of
Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted
Share, Adjusted EBITDA, Adjusted EBITDA Gross Profit and Adjusted
EBITDA SG&A, which are non-GAAP financial measures. See the
attached tables for a reconciliation of Adjusted Net Income (Loss),
Adjusted Net Income (Loss) per Diluted Share and Adjusted EBITDA to
net income (loss), and net income (loss) per diluted share, which
are the most directly comparable GAAP financial measures. Adjusted
Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share
exclude amortization expense, merger and acquisition-related costs,
non-recurring litigation settlements, gains or losses on debt
modifications and retirements, LIFO adjustments, goodwill and
intangible asset impairment charges, and restructuring-related
costs. Rite Aid believes Adjusted Net Income (Loss) and Adjusted
Net Income (Loss) per Diluted Share serve as appropriate measures
to be used in evaluating the performance of its business and help
its investors better compare its operating performance over
multiple periods.
Adjusted EBITDA is defined as net income (loss) excluding the
impact of income taxes, interest expense, depreciation and
amortization, LIFO adjustments, charges or credits for facility
closing and impairment, goodwill and intangible asset impairment
charges, inventory write-downs related to store closings, gains or
losses on debt modifications and retirements, and other items
(including stock-based compensation expense, merger and
acquisition-related costs, non-recurring litigation settlements,
severance, restructuring-related costs, costs related to facility
closures, and gain or loss on sale of assets). The add back of LIFO
(credit) charge when calculating Adjusted EBITDA, Adjusted Net
Income (Loss) and Adjusted Net Income (Loss) per Diluted Share
removes the entire impact of LIFO (credits) charges, and
effectively reflects Rite Aid's results as if the company was on a
FIFO inventory basis. Rite Aid believes Adjusted EBITDA serves as
an appropriate measure in evaluating the performance of its
business and helps its investors better compare its operating
performance with its competitors.
Adjusted EBITDA Gross Profit includes LIFO adjustments,
depreciation and amortization (COGS portion only) and other items.
See the attached tables for a reconciliation of Adjusted EBITDA
Gross Profit to Revenue, which is the most directly comparable GAAP
financial measure. Adjusted EBITDA SG&A excludes depreciation
and amortization (SG&A portion only), stock-based compensation
expense, merger and acquisition-related costs, litigation
settlements and other items. See the attached tables for a
reconciliation of Adjusted EBITDA SG&A to Revenue, which is the
most directly comparable GAAP financial measure. The Company
believes Adjusted EBITDA Gross Profit and Adjusted EBITDA SG&A
serve as appropriate measures in evaluating the performance of its
business and helps its investors better compare its operating
performance with its competitors.
RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS (Dollars in thousands) (unaudited)
August 28, 2021 February 27, 2021 ASSETS Current assets: Cash and
cash equivalents
$
146,564
$
160,902
Accounts receivable, net
1,662,445
1,462,441
Inventories, net of LIFO reserve of $477,873 and $485,859
1,891,975
1,864,890
Prepaid expenses and other current assets
107,504
106,941
Current assets held for sale
24,294
-
Total current assets
3,832,782
3,595,174
Property, plant and equipment, net
1,024,091
1,080,499
Operating lease right-of-use assets
2,974,846
3,064,077
Goodwill
1,108,136
1,108,136
Other intangibles, net
315,833
340,519
Deferred tax assets
14,964
14,964
Other assets
92,938
132,035
Total assets
$
9,363,590
$
9,335,404
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Current maturities of long-term debt and lease financing
obligations
$
6,726
$
6,409
Accounts payable
1,523,582
1,437,421
Accrued salaries, wages and other current liabilities
741,436
642,364
Current portion of operating lease liabilities
519,402
516,752
Total current liabilities
2,791,146
2,602,946
Long-term debt, less current maturities
3,114,351
3,063,087
Long-term operating lease liabilities
2,728,390
2,829,293
Lease financing obligations, less current maturities
15,723
16,711
Other noncurrent liabilities
208,695
208,213
Total liabilities
8,858,305
8,720,250
Commitments and contingencies
-
-
Stockholders' equity: Common stock
55,732
55,143
Additional paid-in capital
5,899,795
5,897,168
Accumulated deficit
(5,426,461
)
(5,313,103
)
Accumulated other comprehensive loss
(23,781
)
(24,054
)
Total stockholders' equity
505,285
615,154
Total liabilities and stockholders' equity
$
9,363,590
$
9,335,404
RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF OPERATIONS (Dollars in thousands, except per share
amounts) (unaudited)
Thirteen weeks ended
August 28, 2021
Thirteen weeks ended
August 29, 2020
Revenues
$
6,113,000
$
5,981,970
Costs and expenses: Cost of revenues
4,867,076
4,821,625
Selling, general and administrative expenses
1,267,753
1,116,142
Facility exit and impairment charges
11,353
11,528
Interest expense
48,592
50,007
Loss (gain) on debt modifications and retirements, net
2,839
(5,274
)
Loss on sale of assets, net
12,378
1,092
6,209,991
5,995,120
Loss from continuing operations before income taxes
(96,991
)
(13,150
)
Income tax expense
3,310
47
Net loss from continuing operations
(100,301
)
(13,197
)
Net income from discontinued operations, net of tax
-
-
Net loss
$
(100,301
)
$
(13,197
)
Basic and diluted loss per share:
Numerator for loss per share: Net loss from continuing operations
attributable to common stockholders - basic and diluted
$
(100,301
)
$
(13,197
)
Net income from discontinued operations attributable to common
stockholders - basic and diluted
-
-
Loss attributable to common stockholders - basic and diluted
$
(100,301
)
$
(13,197
)
Denominator: Basic and diluted weighted
average shares
53,989
53,573
Basic and diluted loss per share Continuing operations
$
(1.86
)
$
(0.25
)
Discontinued operations
$
-
$
-
Net basic and diluted loss per share
$
(1.86
)
$
(0.25
)
RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF OPERATIONS (Dollars in thousands, except per share
amounts) (unaudited) Twenty-six weeks
endedAugust 28, 2021 Twenty-six weeks endedAugust 29, 2020 Revenues
$
12,273,985
$
12,009,346
Costs and expenses: Cost of revenues
9,743,186
9,650,682
Selling, general and administrative expenses
2,513,115
2,313,289
Facility exit and impairment charges
20,184
15,281
Intangible asset impairment charges
-
29,852
Interest expense
97,713
100,554
Loss (gain) on debt modifications and retirements, net
3,235
(5,274
)
Loss (gain) on sale of assets, net
5,820
(1,168
)
12,383,253
12,103,216
Loss from continuing operations before income taxes
(109,268
)
(93,870
)
Income tax expense (benefit)
4,090
(7,971
)
Net loss from continuing operations
(113,358
)
(85,899
)
Net income from discontinued operations, net of tax
-
9,161
Net loss
$
(113,358
)
$
(76,738
)
Basic and diluted loss per share:
Numerator for loss per share: Net loss from continuing operations
attributable to common stockholders - basic and diluted
$
(113,358
)
$
(85,899
)
Net income from discontinued operations attributable to common
stockholders - basic and diluted
-
9,161
Loss attributable to common stockholders - basic and diluted
$
(113,358
)
$
(76,738
)
Denominator: Basic and diluted weighted
average shares
53,920
53,528
Basic and diluted loss per share Continuing operations
$
(2.10
)
$
(1.60
)
Discontinued operations
$
-
$
0.17
Net basic and diluted loss per share
$
(2.10
)
$
(1.43
)
RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
CASH FLOWS (Dollars in thousands) (unaudited)
Thirteen weeks ended August 28,
2021
Thirteen weeks ended August 29,
2020
OPERATING ACTIVITIES: Net loss
$
(100,301
)
$
(13,197
)
Net income from discontinued operations, net of tax
-
-
Net loss from continuing operations
$
(100,301
)
$
(13,197
)
Adjustments to reconcile to net cash provided by (used in)
operating activities of continuing operations: Depreciation and
amortization
73,859
87,117
Facility exit and impairment charges
11,353
11,528
LIFO credit
(3,993
)
(8,750
)
Loss on sale of assets, net
12,378
1,092
Stock-based compensation expense
5,792
3,936
Loss (gain) on debt modifications and retirements, net
2,839
(5,274
)
Changes in operating assets and liabilities: Accounts receivable
(63,368
)
(327,919
)
Inventories
(31,014
)
(39,174
)
Accounts payable
40,797
(11,372
)
Operating lease right-of-use assets and operating lease liabilities
(6,400
)
(11,898
)
Other assets
17,207
(19,664
)
Other liabilities
66,574
(24,747
)
Net cash provided by (used in) operating activities of continuing
operations
25,723
(358,322
)
INVESTING ACTIVITIES: Payments for property, plant and equipment
(46,192
)
(34,626
)
Intangible assets acquired
(9,043
)
(11,857
)
Proceeds from insured loss
10,436
12,500
Proceeds from dispositions of assets and investments
2,228
3,155
Proceeds from sale-leaseback transactions
6,729
8,461
Net cash used in investing activities of continuing operations
(35,842
)
(22,367
)
FINANCING ACTIVITIES: Proceeds from issuance of long-term debt
350,000
849,918
Net proceeds from revolver
211,000
408,000
Principal payments on long-term debt
(451,047
)
(1,054,884
)
Change in zero balance cash accounts
(52,801
)
(262
)
Financing fees paid for early debt redemption
(831
)
(2,399
)
Payments for taxes related to net share settlement of equity awards
(2,186
)
(2,002
)
Deferred financing costs paid
(15,932
)
(13,268
)
Net cash provided by financing activities of continuing operations
38,203
185,103
Cash flows from discontinued operations: Operating activities of
discontinued operations
-
-
Investing activities of discontinued operations
-
-
Net cash provided by discontinued operations
-
-
Increase (decrease) in cash and cash equivalents
28,084
(195,586
)
Cash and cash equivalents, beginning of period
118,480
288,316
Cash and cash equivalents, end of period
$
146,564
$
92,730
RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF CASH FLOWS (Dollars in thousands) (unaudited)
Twenty-six weeks endedAugust 28, 2021 Twenty-six
weeks endedAugust 29, 2020 OPERATING ACTIVITIES: Net
loss
$
(113,358
)
$
(76,738
)
Net income from discontinued operations, net of tax
-
9,161
Net loss from continuing operations
$
(113,358
)
$
(85,899
)
Adjustments to reconcile to net cash provided by (used in)
operating activities of continuing operations: Depreciation and
amortization
149,718
166,220
Facility exit and impairment charges
20,184
15,281
Intangible asset impairment charges
-
29,852
LIFO credit
(7,986
)
(20,816
)
Loss (gain) on sale of assets, net
5,820
(1,168
)
Stock-based compensation expense
8,603
5,810
Loss (gain) on debt modifications and retirements, net
3,235
(5,274
)
Changes in operating assets and liabilities: Accounts receivable
(212,855
)
(636,555
)
Inventories
(19,096
)
4,473
Accounts payable
91,324
1,948
Operating lease right-of-use assets and operating lease liabilities
(12,309
)
(18,493
)
Other assets
25,185
79,513
Other liabilities
101,133
(11,484
)
Net cash provided by (used in) operating activities of continuing
operations
39,598
(476,592
)
INVESTING ACTIVITIES: Payments for property, plant and equipment
(105,356
)
(63,085
)
Intangible assets acquired
(14,479
)
(22,572
)
Proceeds from insured loss
10,436
12,500
Proceeds from dispositions of assets and investments
4,676
5,910
Proceeds from sale-leaseback transactions
14,185
8,461
Net cash used in investing activities of continuing operations
(90,538
)
(58,786
)
FINANCING ACTIVITIES: Proceeds from issuance of long-term debt
350,000
849,918
Net proceeds from revolver
250,000
650,000
Principal payments on long-term debt
(542,988
)
(1,056,182
)
Change in zero balance cash accounts
(844
)
(26,829
)
Financing fees paid for early debt redemption
(833
)
(2,399
)
Payments for taxes related to net share settlement of equity awards
(2,221
)
(2,101
)
Deferred financing costs paid
(16,512
)
(14,600
)
Net cash provided by financing activities of continuing operations
36,602
397,807
Cash flows from discontinued operations: Operating activities of
discontinued operations
-
(82,189
)
Investing activities of discontinued operations
-
94,310
Net cash provided by discontinued operations
-
12,121
Decrease in cash and cash equivalents
(14,338
)
(125,450
)
Cash and cash equivalents, beginning of period
160,902
218,180
Cash and cash equivalents, end of period
$
146,564
$
92,730
RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL SEGMENT
OPERATING INFORMATION (Dollars in thousands) (unaudited)
Thirteen weeks endedAugust 28, 2021 Thirteen weeks
endedAugust 29, 2020
Retail Pharmacy Segment Revenues
from continuing operations (a)
$
4,277,218
$
4,017,912
Cost of revenues from continuing operations (a)
3,136,856
2,955,999
Gross profit from continuing operations
1,140,362
1,061,913
LIFO credit from continuing operations
(3,993
)
(8,750
)
FIFO gross profit from continuing operations
1,136,369
1,053,163
Adjusted EBITDA gross profit from continuing operations
1,138,913
1,056,222
Gross profit as a percentage of revenues - continuing
operations
26.66
%
26.43
%
LIFO credit as a percentage of revenues - continuing operations
-0.09
%
-0.22
%
FIFO gross profit as a percentage of revenues - continuing
operations
26.57
%
26.21
%
Adjusted EBITDA gross profit as a percentage of revenues -
continuing operations
26.63
%
26.29
%
Selling, general and administrative expenses from continuing
operations
1,163,352
1,030,075
Adjusted EBITDA selling, general and administrative expenses from
continuing operations
1,069,544
933,882
Selling, general and administrative expenses as a percentage of
revenues - continuing operations
27.20
%
25.64
%
Adjusted EBITDA selling, general and administrative expenses as a
percentage of revenues - continuing operations
25.01
%
23.24
%
Cash interest expense
45,599
46,767
Non-cash interest expense
2,993
3,240
Total interest expense
48,592
50,007
Interest expense - continuing operations
48,592
50,007
Interest expense - discontinued operations
-
-
Adjusted EBITDA - continuing operations
69,369
122,340
Adjusted EBITDA as a percentage of revenues - continuing operations
1.62
%
3.04
%
Pharmacy Services Segment Revenues (a)
$
1,898,213
$
2,038,378
Cost of revenues (a)
1,792,651
1,939,946
Gross profit
105,562
98,432
Gross profit as a percentage of revenues
5.56
%
4.83
%
Adjusted EBITDA
36,791
29,263
Adjusted EBITDA as a percentage of revenues
1.94
%
1.44
%
(a) - Revenues and cost of revenues include $62,431 and $74,320 of
inter-segment activity for the thirteen weeks ended August 28, 2021
and August 29, 2020, respectively, that is eliminated in
consolidation. RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL SEGMENT OPERATING INFORMATION (Dollars in thousands)
(unaudited) Twenty-six weeks endedAugust 28, 2021
Twenty-six weeks endedAugust 29, 2020
Retail Pharmacy
Segment Revenues from continuing operations (a)
$
8,628,900
$
8,141,183
Cost of revenues from continuing operations (a)
6,318,604
5,997,734
Gross profit from continuing operations
2,310,296
2,143,449
LIFO credit from continuing operations
(7,986
)
(20,816
)
FIFO gross profit from continuing operations
2,302,310
2,122,633
Adjusted EBITDA gross profit from continuing operations
2,307,251
2,154,649
Gross profit as a percentage of revenues - continuing
operations
26.77
%
26.33
%
LIFO credit as a percentage of revenues - continuing operations
-0.09
%
-0.26
%
FIFO gross profit as a percentage of revenues - continuing
operations
26.68
%
26.07
%
Adjusted EBITDA gross profit as a percentage of revenues -
continuing operations
26.74
%
26.47
%
Selling, general and administrative expenses from continuing
operations
2,319,391
2,139,051
Adjusted EBITDA selling, general and administrative expenses from
continuing operations
2,142,968
1,969,327
Selling, general and administrative expenses as a percentage of
revenues - continuing operations
26.88
%
26.27
%
Adjusted EBITDA selling, general and administrative expenses as a
percentage of revenues - continuing operations
24.83
%
24.19
%
Cash interest expense
91,623
94,135
Non-cash interest expense
6,090
6,419
Total interest expense
97,713
100,554
Interest expense - continuing operations
97,713
100,554
Interest expense - discontinued operations
-
-
Adjusted EBITDA - continuing operations
164,283
185,322
Adjusted EBITDA as a percentage of revenues - continuing operations
1.90
%
2.28
%
Pharmacy Services Segment Revenues (a)
$
3,770,495
$
4,015,624
Cost of revenues (a)
3,549,992
3,800,409
Gross profit
220,503
215,215
Gross profit as a percentage of revenues
5.85
%
5.36
%
Adjusted EBITDA
80,754
73,673
Adjusted EBITDA as a percentage of revenues
2.14
%
1.83
%
(a) - Revenues and cost of revenues include $125,410 and $147,461
of inter-segment activity for the twenty-six weeks ended August 28,
2021 and August 29, 2020, respectively, that is eliminated in
consolidation. RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL
INFORMATION RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (In
thousands) (unaudited) Thirteen weeks
endedAugust 28, 2021 Thirteen weeks endedAugust 29, 2020
Reconciliation of net loss to adjusted EBITDA: Net loss -
continuing operations
$
(100,301
)
$
(13,197
)
Adjustments: Interest expense
48,592
50,007
Income tax expense
3,310
47
Depreciation and amortization
73,859
87,117
LIFO credit
(3,993
)
(8,750
)
Facility exit and impairment charges
11,353
11,528
Loss (gain) on debt modifications and retirements, net
2,839
(5,274
)
Merger and Acquisition-related costs
4,591
-
Stock-based compensation expense
5,792
3,936
Restructuring-related costs
9,584
23,186
Inventory write-downs related to store closings
798
1,058
Litigation settlements
34,212
-
Loss on sale of assets, net
12,378
1,092
Other
3,146
853
Adjusted EBITDA - continuing operations
$
106,160
$
151,603
Percent of revenues - continuing operations
1.74
%
2.53
%
RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (In thousands)
(unaudited) Twenty-six weeks endedAugust 28,
2021 Twenty-six weeks endedAugust 29, 2020
Reconciliation of net loss to adjusted EBITDA: Net loss -
continuing operations
$
(113,358
)
$
(85,899
)
Adjustments: Interest expense
97,713
100,554
Income tax expense (benefit)
4,090
(7,971
)
Depreciation and amortization
149,718
166,220
LIFO credit
(7,986
)
(20,816
)
Facility exit and impairment charges
20,184
15,281
Intangible asset impairment charges
-
29,852
Loss (gain) on debt modifications and retirements, net
3,235
(5,274
)
Merger and Acquisition-related costs
8,477
-
Stock-based compensation expense
8,603
5,810
Restructuring-related costs
15,516
58,921
Inventory write-downs related to store closings
1,270
1,892
Litigation settlements
48,212
-
Loss (gain) on sale of assets, net
5,820
(1,168
)
Other
3,543
1,593
Adjusted EBITDA - continuing operations
$
245,037
$
258,995
Percent of revenues - continuing operations
2.00
%
2.16
%
RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION
ADJUSTED NET (LOSS) INCOME (Dollars in thousands, except per share
amounts) (unaudited) Thirteen weeks endedAugust 28,
2021 Thirteen weeks endedAugust 29, 2020 Net loss from
continuing operations
$
(100,301
)
$
(13,197
)
Add back - Income tax expense
3,310
47
Loss before income taxes - continuing operations
(96,991
)
(13,150
)
Adjustments: Amortization expense
19,953
22,695
LIFO credit
(3,993
)
(8,750
)
Loss (gain) on debt modifications and retirements, net
2,839
(5,274
)
Merger and Acquisition-related costs
4,591
-
Restructuring-related costs
9,584
23,186
Litigation settlements
34,212
-
Adjusted (loss) income before income taxes - continuing
operations
(29,805
)
18,707
Adjusted income tax (benefit) expense (a)
(7,839
)
5,171
Adjusted net (loss) income from continuing operations
$
(21,966
)
$
13,536
Adjusted net (loss) income per diluted share - continuing
operations: Numerator for adjusted net (loss) income per
diluted share: Adjusted net (loss) income from continuing
operations
$
(21,966
)
$
13,536
Denominator: Basic weighted average shares
53,989
53,573
Outstanding options and restricted shares, net
-
842
Diluted weighted average shares
53,989
54,415
Net loss from continuing operations per diluted share -
continuing operations
$
(1.86
)
$
(0.25
)
Adjusted net (loss) income per diluted share -
continuing operations
$
(0.41
)
$
0.25
(a) The fiscal year 2022 and 2021 annual effective tax rates,
calculated using a federal rate plus a net state rate that excluded
the impact of state NOL's, state credits and valuation allowance,
was used for the thirteen weeks ended August 28, 2021 and August
29, 2020, respectively. RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION ADJUSTED NET (LOSS) INCOME (Dollars in
thousands, except per share amounts) (unaudited)
Twenty-six weeks endedAugust 28, 2021 Twenty-six weeks endedAugust
29, 2020 Net loss from continuing operations
$
(113,358
)
$
(85,899
)
Add back - Income tax expense (benefit)
4,090
(7,971
)
Loss before income taxes - continuing operations
(109,268
)
(93,870
)
Adjustments: Amortization expense
40,413
47,115
LIFO credit
(7,986
)
(20,816
)
Intangible asset impairment charges
-
29,852
Loss (gain) on debt modifications and retirements, net
3,235
(5,274
)
Merger and Acquisition-related costs
8,477
-
Restructuring-related costs
15,516
58,921
Litigation settlements
48,212
-
Adjusted (loss) income before income taxes - continuing
operations
(1,401
)
15,928
Adjusted income tax (benefit) expense (a)
(368
)
4,402
Adjusted net (loss) income from continuing operations
$
(1,033
)
$
11,526
Adjusted net (loss) income per diluted share - continuing
operations: Numerator for adjusted net (loss) income per
diluted share: Adjusted net (loss) income from continuing
operations
$
(1,033
)
$
11,526
Denominator: Basic weighted average shares
53,920
53,528
Outstanding options and restricted shares, net
-
775
Diluted weighted average shares
53,920
54,303
Net loss from continuing operations per diluted share -
continuing operations
$
(2.10
)
$
(1.60
)
Adjusted net (loss) income per diluted share -
continuing operations
$
(0.02
)
$
0.21
(a) The fiscal year 2022 and 2021 annual effective tax rates,
calculated using a federal rate plus a net state rate that excluded
the impact of state NOL's, state credits and valuation allowance,
was used for the twenty-six weeks ended August 28, 2021 and August
29, 2020, respectively. RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION RECONCILIATION OF ADJUSTED EBITDA GROSS
PROFIT AND RECONCILIATION OF ADJUSTED EBITDA SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES- RETAIL PHARMACY SEGMENT (In thousands)
(unaudited) Thirteen weeks endedAugust 28,
2021 Thirteen weeks endedAugust 29, 2020
Reconciliation of adjusted EBITDA gross profit: Revenues
$
4,277,218
$
4,017,912
Gross Profit
1,140,362
1,061,913
Addback: LIFO credit
(3,993
)
(8,750
)
Depreciation and amortization (cost of goods sold portion only)
1,950
2,167
Other
594
892
Adjusted EBITDA gross profit - continuing operations
$
1,138,913
$
1,056,222
Percent of revenues - continuing operations
26.63
%
26.29
%
Reconciliation of adjusted EBITDA selling,
general and administrative expenses: Revenues
$
4,277,218
$
4,017,912
Selling, general and administrative expenses
1,163,352
1,030,075
Less: Depreciation and amortization (SG&A portion only)
59,081
70,884
Stock-based compensation expense
5,695
3,631
Merger and Acquisition-related costs
4,591
-
Restructuring-related costs
2,584
20,441
Litigation settlements
18,448
-
Other
3,409
1,237
Adjusted EBITDA selling, general and administrative expenses -
continuing operations
$
1,069,544
$
933,882
Percent of revenues - continuing operations
25.01
%
23.24
%
Adjusted EBITDA - continuing operations
$
69,369
$
122,340
RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION
RECONCILIATION OF ADJUSTED EBITDA GROSS PROFIT AND RECONCILIATION
OF ADJUSTED EBITDA SELLING, GENERAL AND ADMINISTRATIVE EXPENSES-
RETAIL PHARMACY SEGMENT (In thousands) (unaudited)
Twenty-six weeks endedAugust 28, 2021 Twenty-six weeks
endedAugust 29, 2020 Reconciliation of adjusted
EBITDA gross profit: Revenues
$ 8,628,900
$ 8,141,183
Gross Profit
2,310,296
2,143,449
Addback: LIFO credit
(7,986)
(20,816)
Depreciation and amortization (cost of goods sold portion only)
4,047
4,830
Restructuring-related costs - SKU optimization charges
-
25,763
Other
894
1,423
Adjusted EBITDA gross profit - continuing operations
$ 2,307,251
$ 2,154,649
Percent of revenues - continuing operations
26.74%
26.47%
Reconciliation of adjusted EBITDA selling,
general and administrative expenses: Revenues
$ 8,628,900
$ 8,141,183
Selling, general and administrative expenses
2,319,391
2,139,051
Less: Depreciation and amortization (SG&A portion only)
118,849
131,793
Stock-based compensation expense
8,466
5,356
Merger and Acquisition-related costs
8,477
-
Restructuring-related costs
4,205
30,387
Litigation settlements
32,448
-
Other
3,978
2,188
Adjusted EBITDA selling, general and administrative expenses -
continuing operations
$ 2,142,968
$ 1,969,327
Percent of revenues - continuing operations
24.83%
24.19%
Adjusted EBITDA - continuing operations
$ 164,283
$ 185,322
RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED EBITDA GUIDANCE
YEAR ENDING FEBRUARY 26, 2022 (In thousands) (unaudited)
Guidance Range Low High Total
Revenues
$
25,100,000
$
25,500,000
PBM Revenues
$
7,700,000
$
7,800,000
Gross Capital Expenditures
$
300,000
$
300,000
Reconciliation of net loss to adjusted EBITDA: Net
loss
$
(221,000
)
$
(197,000
)
Adjustments: Interest expense
198,000
198,000
Income tax expense
-
3,000
Depreciation and amortization
300,000
300,000
LIFO credit
(16,000
)
(16,000
)
Facility exit and impairment charges
87,700
97,700
Loss on debt modifications and retirements, net
3,200
3,200
Merger and Acquisition-related costs
11,000
11,000
Restructuring-related costs
30,000
30,000
Litigation settlements
48,200
48,200
Gain on sale of assets, net
(6,100
)
(3,100
)
Other
25,000
25,000
Adjusted EBITDA
$
460,000
$
500,000
RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED NET LOSS GUIDANCE
YEAR ENDING FEBRUARY 26, 2022 (In thousands) (unaudited)
Guidance Range Low High
Net loss
$
(221,000
)
$
(197,000
)
Add back - income tax expense
-
3,000
Loss before income taxes
(221,000
)
(194,000
)
Adjustments: Amortization expense
79,000
79,000
LIFO credit
(16,000
)
(16,000
)
Loss on debt modifications and retirements, net
3,200
3,200
Merger and Acquisition-related costs
11,000
11,000
Restructuring-related costs
30,000
30,000
Litigation settlements
48,200
48,200
Adjusted loss before adjusted income taxes
(65,600
)
(38,600
)
Adjusted income tax benefit
(17,000
)
(10,000
)
Adjusted net loss
$
(48,600
)
$
(28,600
)
Diluted adjusted net loss per share
$
(0.90
)
$
(0.53
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210923005485/en/
INVESTORS: Trent Kruse (717) 975-3710 investor@riteaid.com
MEDIA: Bradley Ducey (717) 975-5718
Bradley.Ducey@riteaid.com
Rite Aid (NYSE:RAD)
Historical Stock Chart
From Aug 2024 to Sep 2024
Rite Aid (NYSE:RAD)
Historical Stock Chart
From Sep 2023 to Sep 2024