CAMP HILL, Pa.--(BUSINESS WIRE)--Rite Aid Corporation (NYSE: RAD) today reported operating results for its third fiscal quarter ended November 28, 2020.
For the third quarter, the company reported net income from continuing operations of $4.3 million, or $0.08 income per share, Adjusted net income from continuing operations of $21.6 million, or $0.40 income per share, and Adjusted EBITDA from continuing operations of $137.4 million, or 2.3 percent of revenues.
“We are pleased with our third quarter performance as we continue to grow our business and achieve major physical and digital milestones through our RxEvolution strategy,” said Heyward Donigan, president and chief executive officer, Rite Aid. “We officially launched our new brand and logo, made substantial progress in evolving our merchandise mix to an assortment that best supports whole health, refreshed over 700 store exteriors, opened the first three new Store of the Future prototypes and began the integration of our two legacy PBMs. On the digital side, we launched a completely modernized Rite Aid online experience and mobile app and are set to launch our new member portal at Elixir.”
“Our teams are working hard to serve our customers during these challenging times. We have administered over one million COVID-19 tests and will be partnering with the CDC to help administer COVID-19 vaccines in our communities. I am so proud of our 50,000 associates and the strategic progress we’re making in our journey to revolutionize our industry and elevate our role as an indispensable healthcare provider. We are accelerating the key initiatives that support our strategy, and we will continue to deliver the operational excellence needed to achieve strong results as we generate cash flow, reduce debt and improve our leverage ratio.”
Consolidated Third Quarter Summary
(dollars in thousands) |
Thirteen Week Period Ended |
Thirty-nine Week Period Ended |
||||||
|
|
November 28,
|
|
November 30,
|
|
November 28,
|
|
November 30,
|
Revenues from continuing operations |
$ |
6,117,038 |
$ |
5,462,298 |
$ |
18,126,384 |
$ |
16,201,151 |
Net income (loss) from continuing operations |
|
4,324 |
|
52,286 |
|
(81,575) |
|
(125,758) |
Adjusted EBITDA from continuing operations |
137,405 |
158,090 |
396,400 |
402,627 |
||||
Revenues from continuing operations for the quarter were $6.12 billion compared to revenues from continuing operations of $5.46 billion in the prior year’s quarter. The increase in revenues was driven by growth at both the Retail Pharmacy and Pharmacy Services segments.
Net income from continuing operations was $4.3 million, or $0.08 per share, compared to last year’s third quarter net income from continuing operations of $52.3 million, or $0.98 per share. The decline in net income was due primarily to a $55.7 million gain on debt retirements in the prior year and a decrease in Adjusted EBITDA, partially offset by lower restructuring-related costs and a higher gain on sale of assets resulting from the sale-leaseback of the company’s Perryman, MD distribution center.
Adjusted EBITDA from continuing operations was $137.4 million, or 2.3 percent of revenues, compared to last year’s third quarter Adjusted EBITDA of $158.1 million, or 2.9 percent of revenues.
Retail Pharmacy Segment
(dollars in thousands) |
Thirteen Week Period Ended |
Thirty-nine Week Period Ended |
||||||
|
|
November 28,
|
|
November 30,
|
|
November 28,
|
|
November 30,
|
Revenues from continuing operations |
$ |
4,109,592 |
$ |
3,909,946 |
$ |
12,250,775 |
$ |
11,622,858 |
Adjusted EBITDA from continuing operations |
88,557 |
108,579 |
273,879 |
285,260 |
||||
Retail Pharmacy Segment revenues from continuing operations increased 5.1 percent over the prior year quarter. Same store sales from continuing operations for the third quarter increased 4.3 percent over the prior year period, consisting of a 6.1 percent increase in pharmacy sales and a 0.7 percent decrease in front-end sales. Front-end same store sales, excluding cigarettes and tobacco products, increased 0.3 percent. Front-end sales benefited from increases in immunity, first aid and paper products, offset by decreases in over-the-counter products related to cough cold and flu and Halloween candy sales. The company increased its retail script share1, and also increased its front-end market share in both dollars and in unit sales2. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, increased 3.1 percent over the prior year period driven by increases in maintenance prescriptions, supported by personalized Medication Therapy Management interventions and home deliveries. Flu immunizations increased by 28 percent over the prior year period, which offset a 19 percent decline in acute scripts related to cough cold and flu. In total, acute prescriptions decreased by 1.9 percent.
Retail Pharmacy Segment Adjusted EBITDA from continuing operations was $88.6 million, or 2.2 percent of revenues, for the third quarter compared to last year’s third quarter Adjusted EBITDA from continuing operations of $108.6 million or 2.8 percent of revenues. Gross profit dollars increased due to increased revenues, but gross margin rate declined due to reimbursement rate pressure and the impact of the reduction in over-the-counter front-end sales. Selling, general and administrative (SG&A) expenses improved as a percentage of sales, but SG&A dollars increased due to incremental costs associated with the COVID-19 pandemic and the absence of Transition Services Agreement income in the current quarter, as services under that agreement have been completed.
1 – Source: IQVIA RxInsight. Share based on 30-day equivalent scripts in Rite Aid operating area. |
2 – Source: IRI. Excludes tobacco, cigarettes, greeting cards and online sales. For drug store channel during Rite Aid’s third fiscal quarter. |
Pharmacy Services Segment
(dollars in thousands) |
Thirteen Week Period Ended |
Thirty-nine Week Period Ended |
||||||
|
|
November 28,
|
|
November 30,
|
|
November 28,
|
|
November 30,
|
Revenues from continuing operations |
$ |
2,084,402 |
$ |
1,613,109 |
$ |
6,100,026 |
$ |
4,758,470 |
Adjusted EBITDA from continuing operations |
|
48,848 |
49,511 |
|
122,521 |
117,367 |
||
Pharmacy Services Segment revenues were $2.1 billion, an increase of 29.2 percent compared to the prior year period. The increase in revenues was primarily the result of an increase of 252,000 Medicare Part D members.
Pharmacy Services Segment Adjusted EBITDA from continuing operations was $48.8 million, or 2.3 percent of revenues, for the third quarter and was flat to last year’s third quarter Adjusted EBITDA from continuing operations of $49.5 million, or 3.1 percent of revenues. The increase in revenues was offset by a decline in Adjusted EBITDA as a percent of revenues. The Pharmacy Services Segment benefited from reductions in payroll and indirect spend overall, but these benefits were offset by increased drug costs within Medicare Part D and SG&A spend related to an increase in Medicare Part D members. The Company expects Medicare Part D membership to decrease in fiscal 2022, but expects these members to be more profitable.
Outlook for Fiscal 2021
Rite Aid Corporation is narrowing its fiscal 2021 guidance. The company’s key guidance assumptions are as follows:
- Benefits from initiatives to drive retail sales growth, offset by the impact of a less severe cough, cold and flu season on front end over-the-counter sales and related prescriptions;
- A reduction in Medicare Part D membership beginning January 1;
- Strong expense control across both the Retail Pharmacy and Pharmacy Services segments, offset by additional retail operating expenses caused by the recent increase in COVID-19 cases across many of our markets; and
- Continued improvements in pharmacy network management at Elixir.
Rite Aid Corporation expects revenues to be between $23.9 billion and $24.2 billion in fiscal 2021 with same store sales expected to range from an increase of 3.5 percent to an increase of 4.5 percent over fiscal 2020.
Net loss is expected to be between $114 million and $89 million.
Adjusted EBITDA is expected to be between $490 million and $520 million.
Adjusted net income per share is expected to be between $0.45 and $0.85.
Capital expenditures are expected to be approximately $325 million, which includes our previously announced acquisition of Bartell Drugs.
Free cash flow is expected to be between $50 million and $100 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://www.riteaid.com/corporate/investor-relations/presentations. The telephone replay will be available beginning at 12 p.m. Eastern Time on Thursday, Dec. 17, 2020 and ending at 11:59 p.m. Eastern Time on Jan. 16, 2021. To access the replay of the call, telephone (800) 585-8367 or (416) 621-4642 and enter the seven-digit reservation number 3338667. The webcast replay of the call will also be available at https://www.riteaid.com/corporate/investor-relations/presentations 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 more than 1.6 million Americans daily. 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 2,400 retail pharmacy locations across 18 states. Through Elixir, we provide pharmacy benefits and services to approximately 4 million 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 2021, the ability to generate positive free cash flows in fiscal 2021; the continued impact of the global coronavirus (COVID-19) pandemic on Rite Aid’s business; the ability to accelerate key initiatives and improve the operating performance of our stores; 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: the impact of COVID-19 on our workforce, operations, stores, expenses, and supply chain, and the operations of our customers, suppliers and business partners; our ability to successfully implement our RxEvolution strategy; our high level of indebtedness and our ability to satisfy our obligations and the other covenants contained in our debt agreements; general competitive, economic, industry, market, political (including healthcare reform) and regulatory conditions, civil unrest (including any resulting store closures, damage, or loss of inventory), as well as other factors specific to 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 organizational restructuring within our anticipated timeframe, if at all; outcomes of legal and regulatory matters; 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, in Item 1A (Risk Factors) of our Quarterly Report on Form 10-Q filed on July 2, 2020 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 place undue reliance 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 2021 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 outbreak, its severity, the actions to contain the virus or treat its impact (such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns), including the reinstitution of more stringent regulations (including mandatory stay at home orders, the availability and rollout of vaccines to treat the virus), 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 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.
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 and Adjusted EBITDA 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 settlement, gains or losses on debt modifications and retirements, LIFO adjustments, goodwill and intangible asset impairment charges, restructuring-related costs and the WBA merger termination fee.
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, the WBA merger termination fee, and other items (including stock-based compensation expense, merger and acquisition-related costs, non-recurring litigation settlement, severance, restructuring-related costs and 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 CORPORATION AND SUBSIDIARIES | |||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||
| (Dollars in thousands) | |||||||||
| (unaudited) | |||||||||
| November 28, 2020 | February 29, 2020 | ||||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ |
50,813 |
|
$ |
218,180 |
|
|||
| Accounts receivable, net |
|
1,770,691 |
|
|
1,286,785 |
|
|||
| Inventories, net of LIFO reserve of $509,337 and $539,640 |
|
1,971,250 |
|
|
1,921,604 |
|
|||
| Prepaid expenses and other current assets |
|
116,463 |
|
|
181,794 |
|
|||
| Current assets held for sale |
|
42,231 |
|
|
92,278 |
|
|||
| Total current assets |
|
3,951,448 |
|
|
3,700,641 |
|
|||
| Property, plant and equipment, net |
|
1,045,682 |
|
|
1,215,838 |
|
|||
| Operating lease right-of-use assets |
|
2,892,445 |
|
|
2,903,256 |
|
|||
| Goodwill |
|
1,108,136 |
|
|
1,108,136 |
|
|||
| Other intangibles, net |
|
291,013 |
|
|
359,491 |
|
|||
| Deferred tax assets |
|
16,680 |
|
|
16,680 |
|
|||
| Other assets |
|
123,999 |
|
|
148,327 |
|
|||
| Total assets | $ |
9,429,403 |
|
$ |
9,452,369 |
|
|||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| Current liabilities: | |||||||||
| Current maturities of long-term debt and lease financing obligations | $ |
7,097 |
|
$ |
8,840 |
|
|||
| Accounts payable |
|
1,482,521 |
|
|
1,484,081 |
|
|||
| Accrued salaries, wages and other current liabilities |
|
676,582 |
|
|
746,318 |
|
|||
| Current portion of operating lease liabilities |
|
489,867 |
|
|
490,161 |
|
|||
| Current liabilities held for sale |
|
- |
|
|
37,063 |
|
|||
| Total current liabilities |
|
2,656,067 |
|
|
2,766,463 |
|
|||
| Long-term debt, less current maturities |
|
3,200,577 |
|
|
3,077,268 |
|
|||
| Long-term operating lease liabilities |
|
2,676,153 |
|
|
2,710,347 |
|
|||
| Lease financing obligations, less current maturities |
|
17,098 |
|
|
19,326 |
|
|||
| Other noncurrent liabilities |
|
268,973 |
|
|
204,438 |
|
|||
| Total liabilities |
|
8,818,868 |
|
|
8,777,842 |
|
|||
| Commitments and contingencies |
|
- |
|
|
- |
|
|||
| Stockholders' equity: | |||||||||
| Common stock |
|
55,251 |
|
|
54,716 |
|
|||
| Additional paid-in capital |
|
5,895,709 |
|
|
5,890,903 |
|
|||
| Accumulated deficit |
|
(5,294,608 |
) |
|
(5,222,194 |
) |
|||
| Accumulated other comprehensive loss |
|
(45,817 |
) |
|
(48,898 |
) |
|||
| Total stockholders' equity |
|
610,535 |
|
|
674,527 |
|
|||
| Total liabilities and stockholders' equity | $ |
9,429,403 |
|
$ |
9,452,369 |
|
|||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
| (Dollars in thousands, except per share amounts) | |||||||||
| (unaudited) | |||||||||
| Thirteen weeks ended November 28, 2020 |
Thirteen weeks ended November 30, 2019 |
||||||||
| Revenues | $ |
6,117,038 |
|
$ |
5,462,298 |
|
|||
| Costs and expenses: | |||||||||
| Cost of revenues |
|
4,913,939 |
|
|
4,273,323 |
|
|||
| Selling, general and administrative expenses |
|
1,156,355 |
|
|
1,134,854 |
|
|||
| Lease termination and impairment charges |
|
7,453 |
|
|
166 |
|
|||
| Interest expense |
|
50,835 |
|
|
57,856 |
|
|||
| Gain on debt retirements, net |
|
- |
|
|
(55,692 |
) |
|||
| Gain on sale of assets, net |
|
(16,305 |
) |
|
(1,371 |
) |
|||
|
6,112,277 |
|
|
5,409,136 |
|
||||
| Income from continuing operations before income taxes |
|
4,761 |
|
|
53,162 |
|
|||
| Income tax expense |
|
437 |
|
|
876 |
|
|||
| Net income from continuing operations |
|
4,324 |
|
|
52,286 |
|
|||
| Net loss from discontinued operations, net of tax |
|
- |
|
|
(801 |
) |
|||
| Net income | $ |
4,324 |
|
$ |
51,485 |
|
|||
| Basic and diluted income per share: | |||||||||
| Numerator for income per share: | |||||||||
| Net income from continuing operations attributable to common | |||||||||
| stockholders - basic and diluted | $ |
4,324 |
|
$ |
52,286 |
|
|||
| Net loss from discontinued operations attributable to | |||||||||
| common stockholders - basic and diluted |
|
- |
|
|
(801 |
) |
|||
| Income attributable to common stockholders - basic and diluted | $ |
4,324 |
|
$ |
51,485 |
|
|||
| Denominator: | |||||||||
| Basic weighted average shares |
|
53,744 |
|
|
53,310 |
|
|||
| Outstanding options and restricted shares, net |
|
335 |
|
|
274 |
|
|||
| Diluted weighted average shares |
|
54,079 |
|
|
53,584 |
|
|||
| Basic income per share | |||||||||
| Continuing operations | $ |
0.08 |
|
$ |
0.98 |
|
|||
| Discontinued operations | $ |
- |
|
$ |
(0.01 |
) |
|||
| Net basic income per share | $ |
0.08 |
|
$ |
0.97 |
|
|||
| Diluted income per share | |||||||||
| Continuing operations | $ |
0.08 |
|
$ |
0.98 |
|
|||
| Discontinued operations | $ |
- |
|
$ |
(0.02 |
) |
|||
| Net diluted income per share | $ |
0.08 |
|
$ |
0.96 |
|
|||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
| (Dollars in thousands, except per share amounts) | |||||||||
| (unaudited) | |||||||||
| Thirty-nine weeks ended November 28, 2020 |
Thirty-nine weeks ended November 30, 2019 |
||||||||
| Revenues | $ |
18,126,384 |
|
$ |
16,201,151 |
|
|||
| Costs and expenses: | |||||||||
| Cost of revenues |
|
14,564,621 |
|
|
12,741,014 |
|
|||
| Selling, general and administrative expenses |
|
3,469,644 |
|
|
3,433,036 |
|
|||
| Lease termination and impairment charges |
|
22,734 |
|
|
2,115 |
|
|||
| Intangible asset impairment charges |
|
29,852 |
|
|
- |
|
|||
| Interest expense |
|
151,389 |
|
|
176,228 |
|
|||
| Gain on debt modifications and retirements, net |
|
(5,274 |
) |
|
(55,692 |
) |
|||
| Gain on sale of assets, net |
|
(17,473 |
) |
|
(5,670 |
) |
|||
|
18,215,493 |
|
|
16,291,031 |
|
||||
| Loss from continuing operations before income taxes |
|
(89,109 |
) |
|
(89,880 |
) |
|||
| Income tax (benefit) expense |
|
(7,534 |
) |
|
35,878 |
|
|||
| Net loss from continuing operations |
|
(81,575 |
) |
|
(125,758 |
) |
|||
| Net income (loss) from discontinued operations, net of tax |
|
9,161 |
|
|
(1,695 |
) |
|||
| Net loss | $ |
(72,414 |
) |
$ |
(127,453 |
) |
|||
| Basic and diluted loss per share: | |||||||||
| Numerator for loss per share: | |||||||||
| Net loss from continuing operations attributable to common | |||||||||
| stockholders - basic and diluted | $ |
(81,575 |
) |
$ |
(125,758 |
) |
|||
| Net income (loss) from discontinued operations attributable to | |||||||||
| common stockholders - basic and diluted |
|
9,161 |
|
|
(1,695 |
) |
|||
| Loss attributable to common stockholders - basic and diluted | $ |
(72,414 |
) |
$ |
(127,453 |
) |
|||
| Denominator: | |||||||||
| Basic and diluted weighted average shares |
|
53,600 |
|
|
53,159 |
|
|||
| Basic and diluted loss per share | |||||||||
| Continuing operations | $ |
(1.52 |
) |
$ |
(2.37 |
) |
|||
| Discontinued operations | $ |
0.17 |
|
$ |
(0.03 |
) |
|||
| Net basic and diluted loss per share | $ |
(1.35 |
) |
$ |
(2.40 |
) |
|||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Thirteen weeks ended November 28, 2020 |
Thirteen weeks ended November 30, 2019 |
||||||||||||||||
| OPERATING ACTIVITIES: | |||||||||||||||||
| Net income | $ |
4,324 |
|
$ |
51,485 |
|
|||||||||||
| Net loss from discontinued operations, net of tax |
|
- |
|
|
(801 |
) |
|||||||||||
| Net income from continuing operations | $ |
4,324 |
|
$ |
52,286 |
|
|||||||||||
| Adjustments to reconcile to net cash provided by operating activities of continuing operations: | |||||||||||||||||
| Depreciation and amortization |
|
83,336 |
|
|
82,007 |
|
|||||||||||
| Lease termination and impairment charges |
|
7,453 |
|
|
166 |
|
|||||||||||
| LIFO credit |
|
(9,487 |
) |
|
(7,440 |
) |
|||||||||||
| Gain on sale of assets, net |
|
(16,305 |
) |
|
(1,371 |
) |
|||||||||||
| Stock-based compensation expense |
|
2,867 |
|
|
3,506 |
|
|||||||||||
| Gain on debt retirements, net |
|
- |
|
|
(55,692 |
) |
|||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts receivable |
|
128,777 |
|
|
252,767 |
|
|||||||||||
| Inventories |
|
(24,005 |
) |
|
19,333 |
|
|||||||||||
| Accounts payable |
|
(488 |
) |
|
47,378 |
|
|||||||||||
| Operating lease right-of-use assets and operating lease liabilities |
|
(6,826 |
) |
|
(12,179 |
) |
|||||||||||
| Other assets |
|
(4,248 |
) |
|
1,959 |
|
|||||||||||
| Other liabilities |
|
57,351 |
|
|
40,993 |
|
|||||||||||
| Net cash provided by operating activities of continuing operations |
|
222,749 |
|
|
423,713 |
|
|||||||||||
| INVESTING ACTIVITIES: | |||||||||||||||||
| Payments for property, plant and equipment |
|
(64,304 |
) |
|
(45,075 |
) |
|||||||||||
| Intangible assets acquired |
|
(6,131 |
) |
|
(17,727 |
) |
|||||||||||
| Proceeds from dispositions of assets and investments |
|
3,176 |
|
|
51,548 |
|
|||||||||||
| Proceeds from sale-leaseback transactions |
|
80,551 |
|
|
- |
|
|||||||||||
| Net cash provided by (used in) investing activities of continuing operations |
|
13,292 |
|
|
(11,254 |
) |
|||||||||||
| FINANCING ACTIVITIES: | |||||||||||||||||
| Net payments to revolver |
|
(309,000 |
) |
|
(115,000 |
) |
|||||||||||
| Principal payments on long-term debt |
|
(1,194 |
) |
|
(101,251 |
) |
|||||||||||
| Change in zero balance cash accounts |
|
32,374 |
|
|
(66,461 |
) |
|||||||||||
| Payments for taxes related to net share settlement of equity awards |
|
(64 |
) |
|
(587 |
) |
|||||||||||
| Financing fees paid for early debt redemption |
|
- |
|
|
(518 |
) |
|||||||||||
| Deferred financing costs paid |
|
(74 |
) |
|
- |
|
|||||||||||
| Net cash used in financing activities of continuing operations |
|
(277,958 |
) |
|
(283,817 |
) |
|||||||||||
| Cash flows from discontinued operations: | |||||||||||||||||
| Operating activities of discontinued operations |
|
- |
|
|
(4,876 |
) |
|||||||||||
| Investing activities of discontinued operations |
|
- |
|
|
23,551 |
|
|||||||||||
| Net cash provided by discontinued operations |
|
- |
|
|
18,675 |
|
|||||||||||
| (Decrease) increase in cash and cash equivalents |
|
(41,917 |
) |
|
147,317 |
|
|||||||||||
| Cash and cash equivalents, beginning of period |
|
92,730 |
|
|
142,181 |
|
|||||||||||
| Cash and cash equivalents, end of period | $ |
50,813 |
|
$ |
289,498 |
|
|||||||||||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Thirty-nine weeks ended November 28, 2020 |
Thirty-nine weeks ended November 30, 2019 |
||||||||||||||||
| OPERATING ACTIVITIES: | |||||||||||||||||
| Net loss | $ |
(72,414 |
) |
$ |
(127,453 |
) |
|||||||||||
| Net income (loss) from discontinued operations, net of tax |
|
9,161 |
|
|
(1,695 |
) |
|||||||||||
| Net loss from continuing operations | $ |
(81,575 |
) |
$ |
(125,758 |
) |
|||||||||||
| Adjustments to reconcile to net cash (used in) provided by operating activities of continuing operations: | |||||||||||||||||
| Depreciation and amortization |
|
249,556 |
|
|
248,977 |
|
|||||||||||
| Lease termination and impairment charges |
|
22,734 |
|
|
2,115 |
|
|||||||||||
| Intangible asset impairment charges |
|
29,852 |
|
|
- |
|
|||||||||||
| LIFO (credit) charge |
|
(30,303 |
) |
|
7,553 |
|
|||||||||||
| Gain on sale of assets, net |
|
(17,473 |
) |
|
(5,670 |
) |
|||||||||||
| Stock-based compensation expense |
|
8,677 |
|
|
13,598 |
|
|||||||||||
| Gain on debt modifications and retirements, net |
|
(5,274 |
) |
|
(55,692 |
) |
|||||||||||
| Changes in deferred taxes |
|
- |
|
|
26,979 |
|
|||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts receivable |
|
(507,778 |
) |
|
99,498 |
|
|||||||||||
| Inventories |
|
(19,532 |
) |
|
(92,657 |
) |
|||||||||||
| Accounts payable |
|
1,460 |
|
|
(38,245 |
) |
|||||||||||
| Operating lease right-of-use assets and operating lease liabilities |
|
(25,319 |
) |
|
22,803 |
|
|||||||||||
| Other assets |
|
75,265 |
|
|
(42,715 |
) |
|||||||||||
| Other liabilities |
|
45,867 |
|
|
32,889 |
|
|||||||||||
| Net cash (used in) provided by operating activities of continuing operations |
|
(253,843 |
) |
|
93,675 |
|
|||||||||||
| INVESTING ACTIVITIES: | |||||||||||||||||
| Payments for property, plant and equipment |
|
(127,389 |
) |
|
(129,135 |
) |
|||||||||||
| Intangible assets acquired |
|
(28,703 |
) |
|
(33,435 |
) |
|||||||||||
| Proceeds from insured loss |
|
12,500 |
|
|
- |
|
|||||||||||
| Proceeds from dispositions of assets and investments |
|
9,086 |
|
|
55,971 |
|
|||||||||||
| Proceeds from sale-leaseback transactions |
|
89,012 |
|
|
- |
|
|||||||||||
| Net cash used in investing activities of continuing operations |
|
(45,494 |
) |
|
(106,599 |
) |
|||||||||||
| FINANCING ACTIVITIES: | |||||||||||||||||
| Proceeds from issuance of long-term debt |
|
849,918 |
|
|
- |
|
|||||||||||
| Net proceeds from revolver |
|
341,000 |
|
|
260,000 |
|
|||||||||||
| Principal payments on long-term debt |
|
(1,057,376 |
) |
|
(104,702 |
) |
|||||||||||
| Change in zero balance cash accounts |
|
5,545 |
|
|
(11,749 |
) |
|||||||||||
| Payments for taxes related to net share settlement of equity awards |
|
(2,165 |
) |
|
(1,573 |
) |
|||||||||||
| Financing fees paid for early debt redemption |
|
(2,399 |
) |
|
(518 |
) |
|||||||||||
| Deferred financing costs paid |
|
(14,674 |
) |
|
(315 |
) |
|||||||||||
| Net cash provided by financing activities of continuing operations |
|
119,849 |
|
|
141,143 |
|
|||||||||||
| Cash flows from discontinued operations: | |||||||||||||||||
| Operating activities of discontinued operations |
|
(82,189 |
) |
|
(7,148 |
) |
|||||||||||
| Investing activities of discontinued operations |
|
94,310 |
|
|
24,074 |
|
|||||||||||
| Net cash provided by discontinued operations |
|
12,121 |
|
|
16,926 |
|
|||||||||||
| (Decrease) increase in cash and cash equivalents |
|
(167,367 |
) |
|
145,145 |
|
|||||||||||
| Cash and cash equivalents, beginning of period |
|
218,180 |
|
|
144,353 |
|
|||||||||||
| Cash and cash equivalents, end of period | $ |
50,813 |
|
$ |
289,498 |
|
|||||||||||
RITE AID CORPORATION AND SUBSIDIARIES |
||||||||||
| SUPPLEMENTAL SEGMENT OPERATING INFORMATION | ||||||||||
| (Dollars in thousands) | ||||||||||
| (unaudited) | ||||||||||
| Thirteen weeks ended November 28, 2020 |
Thirteen weeks ended November 30, 2019 |
|||||||||
| Retail Pharmacy Segment | ||||||||||
| Revenues from continuing operations (a) | $ |
4,109,592 |
|
$ |
3,909,946 |
|
||||
| Cost of revenues from continuing operations (a) |
|
3,029,884 |
|
|
2,839,094 |
|
||||
| Gross profit from continuing operations |
|
1,079,708 |
|
|
1,070,852 |
|
||||
| LIFO credit from continuing operations |
|
(9,487 |
) |
|
(7,440 |
) |
||||
| FIFO gross profit from continuing operations |
|
1,070,221 |
|
|
1,063,412 |
|
||||
| Adjusted EBITDA gross profit from continuing operations |
|
1,072,547 |
|
|
1,065,523 |
|
||||
| Gross profit as a percentage of revenues - continuing operations |
|
26.27 |
% |
|
27.39 |
% |
||||
| LIFO credit as a percentage of revenues - continuing operations |
|
-0.23 |
% |
|
-0.19 |
% |
||||
| FIFO gross profit as a percentage of revenues - continuing operations |
|
26.04 |
% |
|
27.20 |
% |
||||
| Adjusted EBITDA gross profit as a percentage of revenues - continuing operations |
|
26.10 |
% |
|
27.25 |
% |
||||
| Selling, general and administrative expenses from continuing operations |
|
1,067,027 |
|
|
1,044,236 |
|
||||
| Adjusted EBITDA selling, general and administrative expenses from continuing operations |
|
983,990 |
|
|
956,944 |
|
||||
| Selling, general and administrative expenses as a percentage of | ||||||||||
| revenues - continuing operations |
|
25.96 |
% |
|
26.71 |
% |
||||
| Adjusted EBITDA selling, general and administrative expenses as a percentage of | ||||||||||
| revenues - continuing operations |
|
23.94 |
% |
|
24.47 |
% |
||||
| Cash interest expense |
|
47,500 |
|
|
54,068 |
|
||||
| Non-cash interest expense |
|
3,335 |
|
|
3,788 |
|
||||
| Total interest expense |
|
50,835 |
|
|
57,856 |
|
||||
| Interest expense - continuing operations |
|
50,835 |
|
|
57,856 |
|
||||
| Interest expense - discontinued operations |
|
- |
|
|
- |
|
||||
| Adjusted EBITDA - continuing operations |
|
88,557 |
|
|
108,579 |
|
||||
| Adjusted EBITDA as a percentage of revenues - continuing operations |
|
2.15 |
% |
|
2.78 |
% |
||||
| Pharmacy Services Segment | ||||||||||
| Revenues (a) | $ |
2,084,402 |
|
$ |
1,613,109 |
|
||||
| Cost of revenues (a) |
|
1,961,011 |
|
|
1,494,986 |
|
||||
| Gross profit |
|
123,391 |
|
|
118,123 |
|
||||
| Gross profit as a percentage of revenues |
|
5.92 |
% |
|
7.32 |
% |
||||
| Adjusted EBITDA |
|
48,848 |
|
|
49,511 |
|
||||
| Adjusted EBITDA as a percentage of revenues |
|
2.34 |
% |
|
3.07 |
% |
||||
| (a) - | Revenues and cost of revenues include $76,956 and $60,757 of inter-segment activity for the thirteen weeks ended November 28, 2020 and November 30, 2019, respectively, that is eliminated in consolidation. | |||||||
| RITE AID CORPORATION AND SUBSIDIARIES | ||||||||||
| SUPPLEMENTAL SEGMENT OPERATING INFORMATION | ||||||||||
| (Dollars in thousands) | ||||||||||
| (unaudited) | ||||||||||
| Thirty-nine weeks ended November 28, 2020 |
Thirty-nine weeks ended November 30, 2019 |
|||||||||
| Retail Pharmacy Segment | ||||||||||
| Revenues from continuing operations (a) | $ |
12,250,775 |
|
$ |
11,622,858 |
|
||||
| Cost of revenues from continuing operations (a) |
|
9,027,618 |
|
|
8,489,067 |
|
||||
| Gross profit from continuing operations |
|
3,223,157 |
|
|
3,133,791 |
|
||||
| LIFO (credit) charge from continuing operations |
|
(30,303 |
) |
|
7,553 |
|
||||
| FIFO gross profit from continuing operations |
|
3,192,854 |
|
|
3,141,344 |
|
||||
| Adjusted EBITDA gross profit from continuing operations |
|
3,227,196 |
|
|
3,151,043 |
|
||||
| Gross profit as a percentage of revenues - continuing operations |
|
26.31 |
% |
|
26.96 |
% |
||||
| LIFO (credit) charge as a percentage of revenues - continuing operations |
|
-0.25 |
% |
|
0.06 |
% |
||||
| FIFO gross profit as a percentage of revenues - continuing operations |
|
26.06 |
% |
|
27.03 |
% |
||||
| Adjusted EBITDA gross profit as a percentage of revenues - continuing operations |
|
26.34 |
% |
|
27.11 |
% |
||||
| Selling, general and administrative expenses from continuing operations |
|
3,206,078 |
|
|
3,160,379 |
|
||||
| Adjusted EBITDA selling, general and administrative expenses from continuing operations |
|
2,953,317 |
|
|
2,865,783 |
|
||||
| Selling, general and administrative expenses as a percentage of | ||||||||||
| revenues - continuing operations |
|
26.17 |
% |
|
27.19 |
% |
||||
| Adjusted EBITDA selling, general and administrative expenses as a percentage of | ||||||||||
| revenues - continuing operations |
|
24.11 |
% |
|
24.66 |
% |
||||
| Cash interest expense |
|
141,635 |
|
|
164,982 |
|
||||
| Non-cash interest expense |
|
9,754 |
|
|
11,246 |
|
||||
| Total interest expense |
|
151,389 |
|
|
176,228 |
|
||||
| Interest expense - continuing operations |
|
151,389 |
|
|
176,228 |
|
||||
| Interest expense - discontinued operations |
|
- |
|
|
- |
|
||||
| Adjusted EBITDA - continuing operations |
|
273,879 |
|
|
285,260 |
|
||||
| Adjusted EBITDA as a percentage of revenues - continuing operations |
|
2.24 |
% |
|
2.45 |
% |
||||
| Pharmacy Services Segment | ||||||||||
| Revenues (a) | $ |
6,100,026 |
|
$ |
4,758,470 |
|
||||
| Cost of revenues (a) |
|
5,761,420 |
|
|
4,432,124 |
|
||||
| Gross profit |
|
338,606 |
|
|
326,346 |
|
||||
| Gross profit as a percentage of revenues |
|
5.55 |
% |
|
6.86 |
% |
||||
| Adjusted EBITDA |
|
122,521 |
|
|
117,367 |
|
||||
| Adjusted EBITDA as a percentage of revenues |
|
2.01 |
% |
|
2.47 |
% |
||||
| (a) - | Revenues and cost of revenues include $224,417 and $180,177 of inter-segment activity for the thirty-nine weeks ended November 28, 2020 and November 30, 2019, respectively, that is eliminated in consolidation. | |||||
| RITE AID CORPORATION AND SUBSIDIARIES | ||||||||||||
| SUPPLEMENTAL INFORMATION | ||||||||||||
| RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA | ||||||||||||
| (In thousands) | ||||||||||||
| (unaudited) | ||||||||||||
| Thirteen weeks ended November 28, 2020 |
Thirteen weeks ended November 30, 2019 |
|||||||||||
| Reconciliation of net income to adjusted EBITDA: | ||||||||||||
| Net income - continuing operations | $ |
4,324 |
|
$ |
52,286 |
|
||||||
| Adjustments: | ||||||||||||
| Interest expense |
|
50,835 |
|
|
57,856 |
|
||||||
| Income tax expense |
|
437 |
|
|
876 |
|
||||||
| Depreciation and amortization |
|
83,336 |
|
|
82,007 |
|
||||||
| LIFO credit |
|
(9,487 |
) |
|
(7,440 |
) |
||||||
| Lease termination and impairment charges |
|
7,453 |
|
|
166 |
|
||||||
| Gain on debt retirements, net |
|
- |
|
|
(55,692 |
) |
||||||
| Merger and Acquisition-related costs |
|
1,136 |
|
|
- |
|
||||||
| Stock-based compensation expense |
|
2,867 |
|
|
3,506 |
|
||||||
| Restructuring-related costs |
|
12,175 |
|
|
25,275 |
|
||||||
| Inventory write-downs related to store closings |
|
704 |
|
|
93 |
|
||||||
| Gain on sale of assets, net |
|
(16,305 |
) |
|
(1,371 |
) |
||||||
| Other |
|
(70 |
) |
|
528 |
|
||||||
| Adjusted EBITDA - continuing operations | $ |
137,405 |
|
$ |
158,090 |
|
||||||
| Percent of revenues - continuing operations |
|
2.25 |
% |
|
2.89 |
% |
||||||
| RITE AID CORPORATION AND SUBSIDIARIES | ||||||||||||
| SUPPLEMENTAL INFORMATION | ||||||||||||
| RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA | ||||||||||||
| (In thousands) | ||||||||||||
| (unaudited) | ||||||||||||
| Thirty-nine weeks ended November 28, 2020 |
Thirty-nine weeks ended November 30, 2019 |
|||||||||||
| Reconciliation of net loss to adjusted EBITDA: | ||||||||||||
| Net loss - continuing operations | $ |
(81,575 |
) |
$ |
(125,758 |
) |
||||||
| Adjustments: | ||||||||||||
| Interest expense |
|
151,389 |
|
|
176,228 |
|
||||||
| Income tax (benefit) expense |
|
(7,534 |
) |
|
35,878 |
|
||||||
| Depreciation and amortization |
|
249,556 |
|
|
248,977 |
|
||||||
| LIFO (credit) charge |
|
(30,303 |
) |
|
7,553 |
|
||||||
| Lease termination and impairment charges |
|
22,734 |
|
|
2,115 |
|
||||||
| Intangible asset impairment charges |
|
29,852 |
|
|
- |
|
||||||
| Gain on debt modifications and retirements, net |
|
(5,274 |
) |
|
(55,692 |
) |
||||||
| Merger and Acquisition-related costs |
|
1,136 |
|
|
3,599 |
|
||||||
| Stock-based compensation expense |
|
8,677 |
|
|
13,598 |
|
||||||
| Restructuring-related costs |
|
71,096 |
|
|
93,770 |
|
||||||
| Inventory write-downs related to store closings |
|
2,596 |
|
|
4,083 |
|
||||||
| Gain on sale of assets, net |
|
(17,473 |
) |
|
(5,670 |
) |
||||||
| Other |
|
1,523 |
|
|
3,946 |
|
||||||
| Adjusted EBITDA - continuing operations | $ |
396,400 |
|
$ |
402,627 |
|
||||||
| Percent of revenues - continuing operations |
|
2.19 |
% |
|
2.49 |
% |
||||||
| RITE AID CORPORATION AND SUBSIDIARIES | ||||||||||||
| SUPPLEMENTAL INFORMATION | ||||||||||||
| ADJUSTED NET INCOME | ||||||||||||
| (Dollars in thousands, except per share amounts) | ||||||||||||
| (unaudited) | ||||||||||||
| Thirteen weeks ended November 28, 2020 |
Thirteen weeks ended November 30, 2019 |
|||||||||||
| Net income from continuing operations | $ |
4,324 |
|
$ |
52,286 |
|
||||||
| Add back - Income tax expense |
|
437 |
|
|
876 |
|
||||||
| Income before income taxes - continuing operations |
|
4,761 |
|
|
53,162 |
|
||||||
| Adjustments: | ||||||||||||
| Amortization expense |
|
21,236 |
|
|
24,920 |
|
||||||
| LIFO credit |
|
(9,487 |
) |
|
(7,440 |
) |
||||||
| Gain on debt retirements, net |
|
- |
|
|
(55,692 |
) |
||||||
| Merger and Acquisition-related costs |
|
1,136 |
|
|
- |
|
||||||
| Restructuring-related costs |
|
12,175 |
|
|
25,275 |
|
||||||
| Adjusted income before income taxes - continuing operations |
|
29,821 |
|
|
40,225 |
|
||||||
| Adjusted income tax expense (a) |
|
8,243 |
|
|
11,090 |
|
||||||
| Adjusted net income from continuing operations | $ |
21,578 |
|
$ |
29,135 |
|
||||||
| Adjusted net income per diluted share - continuing operations: | ||||||||||||
| Numerator for adjusted net income per diluted share: | ||||||||||||
| Adjusted net income from continuing operations | $ |
21,578 |
|
$ |
29,135 |
|
||||||
| Denominator: | ||||||||||||
| Basic weighted average shares |
|
53,744 |
|
|
53,310 |
|
||||||
| Outstanding options and restricted shares, net |
|
335 |
|
|
274 |
|
||||||
| Diluted weighted average shares |
|
54,079 |
|
|
53,584 |
|
||||||
| Net income from continuing operations per diluted | ||||||||||||
| share - continuing operations | $ |
0.08 |
|
$ |
0.98 |
|
||||||
| Adjusted net income per diluted share - continuing operations | $ |
0.40 |
|
$ |
0.54 |
|
||||||
(a) |
The fiscal year 2021 and 2020 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 November 28, 2020 and November 30, 2019, respectively. |
|||||||||
| RITE AID CORPORATION AND SUBSIDIARIES | ||||||||||||
| SUPPLEMENTAL INFORMATION | ||||||||||||
| ADJUSTED NET INCOME | ||||||||||||
| (Dollars in thousands, except per share amounts) | ||||||||||||
| (unaudited) | ||||||||||||
| Thirty-nine weeks ended November 28, 2020 |
Thirty-nine weeks ended November 30, 2019 |
|||||||||||
| Net loss from continuing operations | $ |
(81,575 |
) |
$ |
(125,758 |
) |
||||||
| Add back - Income tax (benefit) expense |
|
(7,534 |
) |
|
35,878 |
|
||||||
| Loss before income taxes - continuing operations |
|
(89,109 |
) |
|
(89,880 |
) |
||||||
| Adjustments: | ||||||||||||
| Amortization expense |
|
68,351 |
|
|
79,176 |
|
||||||
| LIFO (credit) charge |
|
(30,303 |
) |
|
7,553 |
|
||||||
| Intangible asset impairment charges |
|
29,852 |
|
|
- |
|
||||||
| Gain on debt modifications and retirements, net |
|
(5,274 |
) |
|
(55,692 |
) |
||||||
| Merger and Acquisition-related costs |
|
1,136 |
|
|
3,599 |
|
||||||
| Restructuring-related costs |
|
71,096 |
|
|
93,770 |
|
||||||
| Adjusted income before income taxes - continuing operations |
|
45,749 |
|
|
38,526 |
|
||||||
| Adjusted income tax expense (a) |
|
12,645 |
|
|
10,622 |
|
||||||
| Adjusted net income from continuing operations | $ |
33,104 |
|
$ |
27,904 |
|
||||||
| Adjusted net income per diluted share - continuing operations: | ||||||||||||
| Numerator for adjusted net income per diluted share: | ||||||||||||
| Adjusted net income from continuing operations | $ |
33,104 |
|
$ |
27,904 |
|
||||||
| Denominator: | ||||||||||||
| Basic weighted average shares |
|
53,600 |
|
|
53,159 |
|
||||||
| Outstanding options and restricted shares, net |
|
754 |
|
|
775 |
|
||||||
| Diluted weighted average shares |
|
54,354 |
|
|
53,934 |
|
||||||
| Net loss from continuing operations per diluted | ||||||||||||
| share - continuing operations | $ |
(1.52 |
) |
$ |
(2.37 |
) |
||||||
| Adjusted net income per diluted share - continuing operations | $ |
0.61 |
|
$ |
0.52 |
|
||||||
(a) |
The fiscal year 2021 and 2020 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 thirty-nine weeks ended November 28, 2020 and November 30, 2019, 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 ended November 28, 2020 |
Thirteen weeks ended November 30, 2019 |
||||||||||||
| Reconciliation of adjusted EBITDA gross profit: | |||||||||||||
| Revenues | $ |
4,109,592 |
|
$ |
3,909,946 |
|
|||||||
| Gross Profit |
|
1,079,708 |
|
|
1,070,852 |
|
|||||||
| Addback: | |||||||||||||
| LIFO credit |
|
(9,487 |
) |
|
(7,440 |
) |
|||||||
| Depreciation and amortization (cost of goods sold portion only) |
|
1,945 |
|
|
2,070 |
|
|||||||
| Other |
|
381 |
|
|
41 |
|
|||||||
| Adjusted EBITDA gross profit - continuing operations | $ |
1,072,547 |
|
$ |
1,065,523 |
|
|||||||
| Percent of revenues - continuing operations |
|
26.10 |
% |
|
27.25 |
% |
|||||||
| Reconciliation of adjusted EBITDA selling, general and administrative expenses: | |||||||||||||
| Revenues | $ |
4,109,592 |
|
$ |
3,909,946 |
|
|||||||
| Selling, general and administrative expenses |
|
1,067,027 |
|
|
1,044,236 |
|
|||||||
| Less: | |||||||||||||
| Depreciation and amortization (SG&A portion only) |
|
67,641 |
|
|
65,267 |
|
|||||||
| Stock-based compensation expense |
|
2,429 |
|
|
2,976 |
|
|||||||
| Merger and Acquisition-related costs |
|
1,136 |
|
|
- |
|
|||||||
| Restructuring-related costs |
|
11,605 |
|
|
18,415 |
|
|||||||
| Other |
|
226 |
|
|
634 |
|
|||||||
| Adjusted EBITDA selling, general and administrative | |||||||||||||
| expenses - continuing operations | $ |
983,990 |
|
$ |
956,944 |
|
|||||||
| Percent of revenues - continuing operations |
|
23.94 |
% |
|
24.47 |
% |
|||||||
| Adjusted EBITDA - continuing operations | $ |
88,557 |
|
$ |
108,579 |
|
|||||||
| 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) | |||||||||||||
| Thirty-nine weeks ended November 28, 2020 |
Thirty-nine weeks ended November 30, 2019 |
||||||||||||
| Reconciliation of adjusted EBITDA gross profit: | |||||||||||||
| Revenues | $ |
12,250,775 |
|
$ |
11,622,858 |
|
|||||||
| Gross Profit |
|
3,223,157 |
|
|
3,133,791 |
|
|||||||
| Addback: | |||||||||||||
| LIFO (credit) charge |
|
(30,303 |
) |
|
7,553 |
|
|||||||
| Depreciation and amortization (cost of goods sold portion only) |
|
6,775 |
|
|
6,538 |
|
|||||||
| Restructuring-related costs - SKU optimization charges |
|
25,763 |
|
|
- |
|
|||||||
| Other |
|
1,804 |
|
|
3,161 |
|
|||||||
| Adjusted EBITDA gross profit - continuing operations | $ |
3,227,196 |
|
$ |
3,151,043 |
|
|||||||
| Percent of revenues - continuing operations |
|
26.34 |
% |
|
27.11 |
% |
|||||||
| Reconciliation of adjusted EBITDA selling, general and administrative expenses: | |||||||||||||
| Revenues | $ |
12,250,775 |
|
$ |
11,622,858 |
|
|||||||
| Selling, general and administrative expenses |
|
3,206,078 |
|
|
3,160,379 |
|
|||||||
| Less: | |||||||||||||
| Depreciation and amortization (SG&A portion only) |
|
199,434 |
|
|
195,281 |
|
|||||||
| Stock-based compensation expense |
|
7,785 |
|
|
12,673 |
|
|||||||
| Merger and Acquisition-related costs |
|
1,136 |
|
|
2,828 |
|
|||||||
| Restructuring-related costs |
|
41,992 |
|
|
78,851 |
|
|||||||
| Other |
|
2,414 |
|
|
4,963 |
|
|||||||
| Adjusted EBITDA selling, general and administrative | |||||||||||||
| expenses - continuing operations | $ |
2,953,317 |
|
$ |
2,865,783 |
|
|||||||
| Percent of revenues - continuing operations |
|
24.11 |
% |
|
24.66 |
% |
|||||||
| Adjusted EBITDA - continuing operations | $ |
273,879 |
|
$ |
285,260 |
|
|||||||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||||||
| SUPPLEMENTAL INFORMATION | |||||||||||||
| RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED EBITDA GUIDANCE | |||||||||||||
| YEAR ENDING FEBRUARY 27, 2021 | |||||||||||||
| (In thousands) | |||||||||||||
| (unaudited) | |||||||||||||
| Guidance Range | |||||||||||||
| Low | High | ||||||||||||
| Total Revenues | $ |
23,900,000 |
|
$ |
24,200,000 |
|
|||||||
| PBM Revenues | $ |
7,850,000 |
|
$ |
7,950,000 |
|
|||||||
| Same store sales |
|
3.50 |
% |
|
4.50 |
% |
|||||||
| Gross Capital Expenditures | $ |
325,000 |
|
$ |
325,000 |
|
|||||||
| Reconciliation of net loss to adjusted EBITDA: | |||||||||||||
| Net loss | $ |
(113,800 |
) |
$ |
(88,800 |
) |
|||||||
| Adjustments: | |||||||||||||
| Interest expense |
|
202,000 |
|
|
202,000 |
|
|||||||
| Income tax benefit |
|
(12,000 |
) |
|
(7,000 |
) |
|||||||
| Depreciation and amortization |
|
332,000 |
|
|
332,000 |
|
|||||||
| LIFO credit |
|
(39,000 |
) |
|
(39,000 |
) |
|||||||
| Lease termination and impairment charges |
|
57,000 |
|
|
57,000 |
|
|||||||
| Intangible asset impairment charges |
|
30,000 |
|
|
30,000 |
|
|||||||
| Gain on debt modifications and retirements, net |
|
(5,300 |
) |
|
(5,300 |
) |
|||||||
| Merger and Acquisition-related costs |
|
1,200 |
|
|
1,200 |
|
|||||||
| Restructuring-related costs |
|
80,000 |
|
|
80,000 |
|
|||||||
| Gain on sale of assets, net |
|
(60,100 |
) |
|
(60,100 |
) |
|||||||
| Other |
|
18,000 |
|
|
18,000 |
|
|||||||
| Adjusted EBITDA | $ |
490,000 |
|
$ |
520,000 |
|
|||||||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||||
| SUPPLEMENTAL INFORMATION | |||||||||||
| RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED NET INCOME GUIDANCE | |||||||||||
| YEAR ENDING FEBRUARY 27, 2021 | |||||||||||
| (In thousands) | |||||||||||
| (unaudited) | |||||||||||
| Guidance Range | |||||||||||
| Low | High | ||||||||||
| Net loss | $ |
(113,800 |
) |
$ |
(88,800 |
) |
|||||
| Add back - income tax benefit |
|
(12,000 |
) |
|
(7,000 |
) |
|||||
| Loss before income taxes |
|
(125,800 |
) |
|
(95,800 |
) |
|||||
| Adjustments: | |||||||||||
| Amortization expense |
|
92,000 |
|
|
92,000 |
|
|||||
| LIFO credit |
|
(39,000 |
) |
|
(39,000 |
) |
|||||
| Intangible asset impairment charges |
|
30,000 |
|
|
30,000 |
|
|||||
| Gain on debt modifications and retirements, net |
|
(5,300 |
) |
|
(5,300 |
) |
|||||
| Merger and Acquisition-related costs |
|
1,200 |
|
|
1,200 |
|
|||||
| Restructuring-related costs |
|
80,000 |
|
|
80,000 |
|
|||||
| Adjusted income before adjusted income taxes |
|
33,100 |
|
|
63,100 |
|
|||||
| Adjusted income tax expense |
|
9,000 |
|
|
17,000 |
|
|||||
| Adjusted net income | $ |
24,100 |
|
$ |
46,100 |
|
|||||
| Diluted adjusted net income per share | $ |
0.45 |
|
$ |
0.85 |
|
|||||
| RITE AID CORPORATION AND SUBSIDIARIES | ||||||||||
| SUPPLEMENTAL INFORMATION | ||||||||||
| RECONCILIATION OF ADJUSTED EBITDA GUIDANCE TO FREE CASH FLOW | ||||||||||
| GUIDANCE | ||||||||||
| YEAR ENDING FEBRUARY 27, 2021 | ||||||||||
| (In thousands) | ||||||||||
| (unaudited) | ||||||||||
| Guidance Range | ||||||||||
| Low | High | |||||||||
| Adjusted EBITDA | $ |
490,000 |
|
$ |
520,000 |
|
||||
| Cash interest expense |
|
(190,000 |
) |
|
(190,000 |
) |
||||
| Restructuring-related costs |
|
(80,000 |
) |
|
(80,000 |
) |
||||
| Closed store rent |
|
(25,000 |
) |
|
(25,000 |
) |
||||
| Working capital benefit |
|
180,000 |
|
|
200,000 |
|
||||
| Cash flow from operations |
|
375,000 |
|
|
425,000 |
|
||||
| Gross capital expenditures |
|
(325,000 |
) |
|
(325,000 |
) |
||||
| Free cash flow | $ |
50,000 |
|
$ |
100,000 |
|
||||
