CAMP HILL, Pa.--(BUSINESS WIRE)--Rite Aid Corporation (NYSE: RAD) today reported operating results for its third fiscal quarter ended November 27, 2021.
For the third quarter, the company reported net loss from continuing operations of $36.1 million, or $0.67 loss per share, Adjusted net income from continuing operations of $8.2 million, or $0.15 income per share, and Adjusted EBITDA from continuing operations of $154.8 million, or 2.5 percent of revenues.
“We delivered a solid quarter as we grew Adjusted EBITDA by 12.7 percent versus last year,” said Heyward Donigan, president and chief executive officer, Rite Aid. “Despite challenges in the labor market, our pharmacists and store teams were able to meet the unprecedented volumes for COVID and flu immunizations, COVID testing and other clinical services, which clearly demonstrates our Lean work to free up capacity is paying off.”
“We have also taken steps to drive increased value for all of Elixir’s PBM clients by entering into a new rebate aggregation agreement with Prime Therapeutics. In addition to the benefit to clients, this partnership will enable Elixir to be more competitive in the marketplace and improve profit margins.”
“Today, we also announced the first phase of a store closure program to reduce costs, drive improved profitability and ensure that we have a healthy foundation to grow from, with the right stores in the right locations, for the communities we serve and for our business. We have identified an initial 63 stores for closure that is expected to provide an annual EBITDA benefit of approximately $25 million.”
“We are encouraged by our recent momentum and expect to deliver a significant increase in our fourth quarter Adjusted EBITDA results compared to last year. As a result, we are raising our guidance for Adjusted EBITDA for Fiscal 2022.”
“Finally, I want to thank each and every one of our associates for everything they do. It is my greatest privilege to work alongside such a tremendous team, and I am forever grateful for their passion and commitment to our company, our customers and each other.”
Consolidated Third Quarter Summary
(dollars in thousands) |
Thirteen Week Period Ended |
Thirty-nine Week Period Ended |
||||||||||
|
|
November 27, 2021 |
|
November 28, 2020 |
|
November 27, 2021 |
|
November 28, 2020 |
||||
Revenues from continuing operations |
$ |
6,228,880 |
$ |
6,117,038 |
$ |
18,502,865 |
$ |
18,126,384 |
||||
Net (loss) income from continuing operations |
|
(36,058) |
|
4,324 |
|
(149,416) |
|
(81,575) |
||||
Adjusted EBITDA from continuing operations |
|
154,793 |
|
137,405 |
|
399,830 |
|
396,400 |
||||
Revenues from continuing operations for the quarter were $6.23 billion compared to revenues from continuing operations of $6.12 billion in the prior year’s quarter. The 1.8 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 $36.1 million, or $0.67 per share, compared to last year’s third quarter net income from continuing operations of $4.3 million, or $0.08 per share. The increase in net loss is due primarily to higher facility exit and impairment charges driven by the Company’s store closure decisions. Other variance drivers include a LIFO charge in the current quarter compared to a LIFO credit in the prior year third quarter and a lower gain on the sale of assets. These items were partially offset by an increase in Adjusted EBITDA and lower depreciation and amortization expense.
Retail Pharmacy Segment
(dollars in thousands) |
Thirteen Week Period Ended |
Thirty-nine Week Period Ended |
||||||||||
|
|
November 27, 2021 |
|
November 28, 2020 |
|
November 27, 2021 |
|
November 28, 2020 |
||||
Revenues from continuing operations |
$ |
4,432,508 |
$ |
4,109,592 |
$ |
13,061,408 |
$ |
12,250,775 |
||||
Adjusted EBITDA from continuing operations |
|
125,931 |
|
88,557 |
|
290,214 |
|
273,879 |
||||
Retail Pharmacy Segment revenues from continuing operations increased 7.9 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 third quarter increased 4.4 percent over the prior year period, consisting of a 5.9 percent increase in pharmacy sales and a 0.4 percent increase in front-end sales. Front-end same store sales, excluding cigarettes and tobacco products, increased 1.0 percent. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, increased 7.9 percent over the prior year period. In addition to the benefit from 4 million COVID-19 vaccinations, maintenance prescriptions increased 1.7 percent while other acute prescriptions increased 3.9 percent on a same store basis when excluding COVID-19, flu and all other ancillary vaccinations. Prescription sales from continuing operations accounted for 71.1 percent of total drugstore sales. Total store count at the end of the third quarter was 2,488.
Retail Pharmacy Segment Adjusted EBITDA from continuing operations was $125.9 million, or 2.8 percent of revenues, for the third quarter compared to last year’s third quarter Adjusted EBITDA from continuing operations of $88.6 million, or 2.2 percent of revenues. The increase in Adjusted EBITDA was due to increased gross profit, partially offset by an increase in selling, general and administrative (SG&A) expenses. Gross profit benefited from higher pharmacy same store sales, including immunizations, partially offset by pharmacy reimbursement rate pressures that were not fully offset by generic drug cost reductions and an increase in front-end gross profit resulting from higher front-end same store sales and a reduction in markdowns. SG&A expenses were negatively impacted by incremental payroll costs to support COVID immunizations, increases in bonus expense for store, field and corporate associates, increases in workers compensation costs and cycling the benefit from the prior year change to modernize our associate PTO plans.
Pharmacy Services Segment
(dollars in thousands) |
Thirteen Week Period Ended |
Thirty-nine Week Period Ended |
||||||||||
|
|
November 27, 2021 |
|
November 28, 2020 |
|
November 27, 2021 |
|
November 28, 2020 |
||||
Revenues from continuing operations |
$ |
1,858,830 |
$ |
2,084,402 |
$ |
5,629,325 |
$ |
6,100,026 |
||||
Adjusted EBITDA from continuing operations |
|
28,862 |
|
48,848 |
|
109,616 |
|
122,521 |
||||
Pharmacy Services Segment revenues were $1.9 billion for the quarter, a decrease of 10.8 percent compared to the prior year quarter. The decrease in revenues was primarily the result of a planned decrease in Elixir Insurance membership and a previously announced client loss.
Pharmacy Services Segment Adjusted EBITDA from continuing operations was $28.9 million, or 1.6 percent of revenues, for the third quarter compared to last year’s third quarter Adjusted EBITDA from continuing operations of $48.8 million, or 2.3 percent of revenues. Gross profit dollars were negatively impacted from the decline in revenues, a reduction in rebates and an increase in the Medical Loss Ratio at Elixir Insurance. SG&A expenses improved due to reduced payroll and a reduction in broker commissions.
Retail Store Base Assessment
Rite Aid is conducting a rigorous assessment of its store base and has implemented a store closure program. The program’s primary focus is to reduce costs, drive improved profitability and ensure that Rite Aid has a healthy foundation to grow from, with the right stores in the right locations, for the communities it serves and for its business.
As a result of this ongoing review, Rite Aid identified 63 stores for closure that is expected to provide an annual EBITDA benefit of approximately $25 million. The closures began this past November. Associates impacted by these store closures are being offered the opportunity to transfer to another store. The review work will continue, and the Company anticipates the number of closures to increase as it finalizes the review over the next several months.
Outlook for Fiscal 2022
As a result of the momentum in the third 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 $24.4 billion and $24.7 billion in fiscal 2022. Pharmacy Services Segment revenue is expected to be between $7.1 billion and $7.2 billion (net of any intercompany revenues to the Retail Pharmacy Segment).
Net loss is expected to be between $230 million and $189 million.
Adjusted EBITDA is expected to be between $500 million and $520 million.
Adjusted net loss per share is expected to be between $0.49 and $0.04.
Capital expenditures are expected to be approximately $275 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 Tuesday, Dec. 21, 2021 and ending at 11:59 p.m. Eastern Time on Jan. 21, 2022. To access the replay of the call, telephone (800) 585-8367 or (416) 621-4642 and enter the seven-digit reservation number 1787289. 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 2,400 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; Rite Aid’s store closure program; 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 prolonged impact of the COVID-19 global pandemic and the emerging new variants, including the 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 store closure program 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), 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, federal, state and local governmental policies and initiatives designed to reduce the transmission of COVID-19 and emerging new variants 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, restructuring-related costs, and the loss on Bartell acquisition. 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, gain or loss on sale of assets, and the loss on Bartell acquisition). 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) | |||||||||
| November 27, 2021 | February 27, 2021 | ||||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ |
155,289 |
|
$ |
160,902 |
|
|||
| Accounts receivable, net |
|
1,844,234 |
|
|
1,462,441 |
|
|||
| Inventories, net of LIFO reserve of $486,759 and $485,859 |
|
1,949,841 |
|
|
1,864,890 |
|
|||
| Prepaid expenses and other current assets |
|
106,666 |
|
|
106,941 |
|
|||
| Total current assets |
|
4,056,030 |
|
|
3,595,174 |
|
|||
| Property, plant and equipment, net |
|
1,014,662 |
|
|
1,080,499 |
|
|||
| Operating lease right-of-use assets |
|
2,915,748 |
|
|
3,064,077 |
|
|||
| Goodwill |
|
1,108,136 |
|
|
1,108,136 |
|
|||
| Other intangibles, net |
|
307,345 |
|
|
340,519 |
|
|||
| Deferred tax assets |
|
14,964 |
|
|
14,964 |
|
|||
| Other assets |
|
82,239 |
|
|
132,035 |
|
|||
| Total assets | $ |
9,499,124 |
|
$ |
9,335,404 |
|
|||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| Current liabilities: | |||||||||
| Current maturities of long-term debt and lease financing obligations | $ |
6,119 |
|
$ |
6,409 |
|
|||
| Accounts payable |
|
1,547,770 |
|
|
1,437,421 |
|
|||
| Accrued salaries, wages and other current liabilities |
|
873,201 |
|
|
642,364 |
|
|||
| Current portion of operating lease liabilities |
|
522,272 |
|
|
516,752 |
|
|||
| Total current liabilities |
|
2,949,362 |
|
|
2,602,946 |
|
|||
| Long-term debt, less current maturities |
|
3,167,060 |
|
|
3,063,087 |
|
|||
| Long-term operating lease liabilities |
|
2,692,669 |
|
|
2,829,293 |
|
|||
| Lease financing obligations, less current maturities |
|
15,270 |
|
|
16,711 |
|
|||
| Other noncurrent liabilities |
|
202,734 |
|
|
208,213 |
|
|||
| Total liabilities |
|
9,027,095 |
|
|
8,720,250 |
|
|||
| Commitments and contingencies |
|
- |
|
|
- |
|
|||
| Stockholders' equity: | |||||||||
| Common stock |
|
55,761 |
|
|
55,143 |
|
|||
| Additional paid-in capital |
|
5,902,445 |
|
|
5,897,168 |
|
|||
| Accumulated deficit |
|
(5,462,519 |
) |
|
(5,313,103 |
) |
|||
| Accumulated other comprehensive loss |
|
(23,658 |
) |
|
(24,054 |
) |
|||
| Total stockholders' equity |
|
472,029 |
|
|
615,154 |
|
|||
| Total liabilities and stockholders' equity | $ |
9,499,124 |
|
$ |
9,335,404 |
|
|||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
| (Dollars in thousands, except per share amounts) | |||||||||
| (unaudited) | |||||||||
Thirteen weeks ended November 27, 2021 |
Thirteen weeks ended November 28, 2020 |
||||||||
| Revenues | $ |
6,228,880 |
|
$ |
6,117,038 |
|
|||
| Costs and expenses: | |||||||||
| Cost of revenues |
|
4,894,497 |
|
|
4,913,939 |
|
|||
| Selling, general and administrative expenses |
|
1,276,920 |
|
|
1,156,355 |
|
|||
| Facility exit and impairment charges |
|
47,455 |
|
|
7,453 |
|
|||
| Interest expense |
|
47,794 |
|
|
50,835 |
|
|||
| Gain on sale of assets, net |
|
(5,899 |
) |
|
(16,305 |
) |
|||
| Loss on Bartell acquisition |
|
5,346 |
|
|
- |
|
|||
|
6,266,113 |
|
|
6,112,277 |
|
||||
| (Loss) income from continuing operations before income taxes |
|
(37,233 |
) |
|
4,761 |
|
|||
| Income tax (benefit) expense |
|
(1,175 |
) |
|
437 |
|
|||
| Net (loss) income from continuing operations |
|
(36,058 |
) |
|
4,324 |
|
|||
| Net income from discontinued operations, net of tax |
|
- |
|
|
- |
|
|||
| Net (loss) income | $ |
(36,058 |
) |
$ |
4,324 |
|
|||
| Basic and diluted (loss) income per share: | |||||||||
| Numerator for (loss) income per share: | |||||||||
| Net (loss) income from continuing operations attributable to common | |||||||||
| stockholders - basic and diluted | $ |
(36,058 |
) |
$ |
4,324 |
|
|||
| Net income from discontinued operations attributable to | |||||||||
| common stockholders - basic and diluted |
|
- |
|
|
- |
|
|||
| (Loss) income attributable to common stockholders - basic and diluted | $ |
(36,058 |
) |
$ |
4,324 |
|
|||
| Denominator: | |||||||||
| Basic weighted average shares |
|
54,168 |
|
|
53,744 |
|
|||
| Outstanding options and restricted shares, net |
|
- |
|
|
335 |
|
|||
| Diluted weighted average shares |
|
54,168 |
|
|
54,079 |
|
|||
| Basic and diluted (loss) income per share | |||||||||
| Continuing operations | $ |
(0.67 |
) |
$ |
0.08 |
|
|||
| Discontinued operations | $ |
- |
|
$ |
- |
|
|||
| Net basic and diluted (loss) income per share | $ |
(0.67 |
) |
$ |
0.08 |
|
|||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
| (Dollars in thousands, except per share amounts) | |||||||||
| (unaudited) | |||||||||
|
|
||||||||
Thirty-nine weeks ended November 27, 2021 |
Thirty-nine weeks ended November 28, 2020 |
||||||||
| Revenues | $ |
18,502,865 |
|
$ |
18,126,384 |
|
|||
| Costs and expenses: | |||||||||
| Cost of revenues |
|
14,637,683 |
|
|
14,564,621 |
|
|||
| Selling, general and administrative expenses |
|
3,790,035 |
|
|
3,469,644 |
|
|||
| Facility exit and impairment charges |
|
67,639 |
|
|
22,734 |
|
|||
| Intangible asset impairment charges |
|
- |
|
|
29,852 |
|
|||
| Interest expense |
|
145,507 |
|
|
151,389 |
|
|||
| Loss (gain) on debt modifications and retirements, net |
|
3,235 |
|
|
(5,274 |
) |
|||
| Gain on sale of assets, net |
|
(79 |
) |
|
(17,473 |
) |
|||
| Loss on Bartell acquisition |
|
5,346 |
|
|
- |
|
|||
|
18,649,366 |
|
|
18,215,493 |
|
||||
| Loss from continuing operations before income taxes |
|
(146,501 |
) |
|
(89,109 |
) |
|||
| Income tax expense (benefit) |
|
2,915 |
|
|
(7,534 |
) |
|||
| Net loss from continuing operations |
|
(149,416 |
) |
|
(81,575 |
) |
|||
| Net income from discontinued operations, net of tax |
|
- |
|
|
9,161 |
|
|||
| Net loss | $ |
(149,416 |
) |
$ |
(72,414 |
) |
|||
| Basic and diluted loss per share: | |||||||||
| Numerator for loss per share: | |||||||||
| Net loss from continuing operations attributable to common | |||||||||
| stockholders - basic and diluted | $ |
(149,416 |
) |
$ |
(81,575 |
) |
|||
| Net income from discontinued operations attributable to | |||||||||
| common stockholders - basic and diluted |
|
- |
|
|
9,161 |
|
|||
| Loss attributable to common stockholders - basic and diluted | $ |
(149,416 |
) |
$ |
(72,414 |
) |
|||
| Denominator: | |||||||||
| Basic and diluted weighted average shares |
|
54,004 |
|
|
53,600 |
|
|||
| Basic and diluted loss per share | |||||||||
| Continuing operations | $ |
(2.77 |
) |
$ |
(1.52 |
) |
|||
| Discontinued operations | $ |
- |
|
$ |
0.17 |
|
|||
| Net basic and diluted loss per share | $ |
(2.77 |
) |
$ |
(1.35 |
) |
|||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
Thirteen weeks ended November 27, 2021 |
Thirteen weeks ended November 28, 2020 |
||||||||||||||||
| OPERATING ACTIVITIES: | |||||||||||||||||
| Net (loss) income | $ |
(36,058 |
) |
$ |
4,324 |
|
|||||||||||
| Net income from discontinued operations, net of tax |
|
- |
|
|
- |
|
|||||||||||
| Net (loss) income from continuing operations | $ |
(36,058 |
) |
$ |
4,324 |
|
|||||||||||
| Adjustments to reconcile to net cash (used in) provided by operating activities of continuing operations: | |||||||||||||||||
| Depreciation and amortization |
|
72,973 |
|
|
83,336 |
|
|||||||||||
| Facility exit and impairment charges |
|
47,455 |
|
|
7,453 |
|
|||||||||||
| LIFO charge (credit) |
|
8,886 |
|
|
(9,487 |
) |
|||||||||||
| Gain on sale of assets, net |
|
(5,899 |
) |
|
(16,305 |
) |
|||||||||||
| Loss on Bartell acquisition |
|
5,346 |
|
|
- |
|
|||||||||||
| Stock-based compensation expense |
|
217 |
|
|
2,867 |
|
|||||||||||
| Changes in deferred taxes |
|
(1,602 |
) |
|
- |
|
|||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts receivable |
|
(185,224 |
) |
|
128,777 |
|
|||||||||||
| Inventories |
|
(68,054 |
) |
|
(24,005 |
) |
|||||||||||
| Accounts payable |
|
38,112 |
|
|
(488 |
) |
|||||||||||
| Operating lease right-of-use assets and operating lease liabilities |
|
(7,208 |
) |
|
(6,826 |
) |
|||||||||||
| Other assets |
|
9,761 |
|
|
(4,248 |
) |
|||||||||||
| Other liabilities |
|
118,257 |
|
|
57,351 |
|
|||||||||||
| Net cash (used in) provided by operating activities of continuing operations |
|
(3,038 |
) |
|
222,749 |
|
|||||||||||
| INVESTING ACTIVITIES: | |||||||||||||||||
| Payments for property, plant and equipment |
|
(39,645 |
) |
|
(64,304 |
) |
|||||||||||
| Intangible assets acquired |
|
(9,810 |
) |
|
(6,131 |
) |
|||||||||||
| Proceeds from dispositions of assets and investments |
|
3,145 |
|
|
3,176 |
|
|||||||||||
| Proceeds from sale-leaseback transactions |
|
25,605 |
|
|
80,551 |
|
|||||||||||
| Net cash (used in) provided by investing activities of continuing operations |
|
(20,705 |
) |
|
13,292 |
|
|||||||||||
| FINANCING ACTIVITIES: | |||||||||||||||||
| Net proceeds from (payments to) revolver |
|
50,000 |
|
|
(309,000 |
) |
|||||||||||
| Principal payments on long-term debt |
|
(1,032 |
) |
|
(1,194 |
) |
|||||||||||
| Change in zero balance cash accounts |
|
(14,243 |
) |
|
32,374 |
|
|||||||||||
| Payments for taxes related to net share settlement of equity awards |
|
(131 |
) |
|
(64 |
) |
|||||||||||
| Deferred financing costs paid |
|
(2,126 |
) |
|
(74 |
) |
|||||||||||
| Net cash provided by (used in) financing activities of continuing operations |
|
32,468 |
|
|
(277,958 |
) |
|||||||||||
| Increase (decrease) in cash and cash equivalents |
|
8,725 |
|
|
(41,917 |
) |
|||||||||||
| Cash and cash equivalents, beginning of period |
|
146,564 |
|
|
92,730 |
|
|||||||||||
| Cash and cash equivalents, end of period | $ |
155,289 |
|
$ |
50,813 |
|
|||||||||||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Thirty-nine weeks ended November 27, 2021 |
Thirty-nine weeks ended November 28, 2020 |
||||||||||||||||
| OPERATING ACTIVITIES: | |||||||||||||||||
| Net loss | $ |
(149,416 |
) |
$ |
(72,414 |
) |
|||||||||||
| Net income from discontinued operations, net of tax |
|
- |
|
|
9,161 |
|
|||||||||||
| Net loss from continuing operations | $ |
(149,416 |
) |
$ |
(81,575 |
) |
|||||||||||
| Adjustments to reconcile to net cash provided by (used in) operating activities of continuing operations: | |||||||||||||||||
| Depreciation and amortization |
|
222,691 |
|
|
249,556 |
|
|||||||||||
| Facility exit and impairment charges |
|
67,639 |
|
|
22,734 |
|
|||||||||||
| Intangible asset impairment charges |
|
- |
|
|
29,852 |
|
|||||||||||
| LIFO charge (credit) |
|
900 |
|
|
(30,303 |
) |
|||||||||||
| Gain on sale of assets, net |
|
(79 |
) |
|
(17,473 |
) |
|||||||||||
| Loss on Bartell acquisition |
|
5,346 |
|
|
- |
|
|||||||||||
| Stock-based compensation expense |
|
8,820 |
|
|
8,677 |
|
|||||||||||
| Loss (gain) on debt modifications and retirements, net |
|
3,235 |
|
|
(5,274 |
) |
|||||||||||
| Changes in deferred taxes |
|
(1,602 |
) |
|
- |
|
|||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts receivable |
|
(398,079 |
) |
|
(507,778 |
) |
|||||||||||
| Inventories |
|
(87,150 |
) |
|
(19,532 |
) |
|||||||||||
| Accounts payable |
|
129,436 |
|
|
1,460 |
|
|||||||||||
| Operating lease right-of-use assets and operating lease liabilities |
|
(19,517 |
) |
|
(25,319 |
) |
|||||||||||
| Other assets |
|
34,946 |
|
|
75,265 |
|
|||||||||||
| Other liabilities |
|
219,390 |
|
|
45,867 |
|
|||||||||||
| Net cash provided by (used in) operating activities of continuing operations |
|
36,560 |
|
|
(253,843 |
) |
|||||||||||
| INVESTING ACTIVITIES: | |||||||||||||||||
| Payments for property, plant and equipment |
|
(145,001 |
) |
|
(127,389 |
) |
|||||||||||
| Intangible assets acquired |
|
(24,289 |
) |
|
(28,703 |
) |
|||||||||||
| Proceeds from insured loss |
|
10,436 |
|
|
12,500 |
|
|||||||||||
| Proceeds from dispositions of assets and investments |
|
7,821 |
|
|
9,086 |
|
|||||||||||
| Proceeds from sale-leaseback transactions |
|
39,790 |
|
|
89,012 |
|
|||||||||||
| Net cash used in investing activities of continuing operations |
|
(111,243 |
) |
|
(45,494 |
) |
|||||||||||
| FINANCING ACTIVITIES: | |||||||||||||||||
| Proceeds from issuance of long-term debt |
|
350,000 |
|
|
849,918 |
|
|||||||||||
| Net proceeds from revolver |
|
300,000 |
|
|
341,000 |
|
|||||||||||
| Principal payments on long-term debt |
|
(544,020 |
) |
|
(1,057,376 |
) |
|||||||||||
| Change in zero balance cash accounts |
|
(15,087 |
) |
|
5,545 |
|
|||||||||||
| Financing fees paid for early debt redemption |
|
(833 |
) |
|
(2,399 |
) |
|||||||||||
| Payments for taxes related to net share settlement of equity awards |
|
(2,352 |
) |
|
(2,165 |
) |
|||||||||||
| Deferred financing costs paid |
|
(18,638 |
) |
|
(14,674 |
) |
|||||||||||
| Net cash provided by financing activities of continuing operations |
|
69,070 |
|
|
119,849 |
|
|||||||||||
| 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 |
|
(5,613 |
) |
|
(167,367 |
) |
|||||||||||
| Cash and cash equivalents, beginning of period |
|
160,902 |
|
|
218,180 |
|
|||||||||||
| Cash and cash equivalents, end of period | $ |
155,289 |
|
$ |
50,813 |
|
|||||||||||
| RITE AID CORPORATION AND SUBSIDIARIES | ||||||||||
| SUPPLEMENTAL SEGMENT OPERATING INFORMATION | ||||||||||
| (Dollars in thousands) | ||||||||||
| (unaudited) | ||||||||||
Thirteen weeks ended November 27, 2021 |
Thirteen weeks ended November 28, 2020 |
|||||||||
| Retail Pharmacy Segment | ||||||||||
| Revenues from continuing operations (a) | $ |
4,432,508 |
|
$ |
4,109,592 |
|
||||
| Cost of revenues from continuing operations (a) |
|
3,199,271 |
|
|
3,029,884 |
|
||||
| Gross profit from continuing operations |
|
1,233,237 |
|
|
1,079,708 |
|
||||
| LIFO charge (credit) from continuing operations |
|
8,886 |
|
|
(9,487 |
) |
||||
| FIFO gross profit from continuing operations |
|
1,242,123 |
|
|
1,070,221 |
|
||||
| Adjusted EBITDA gross profit from continuing operations |
|
1,244,637 |
|
|
1,072,547 |
|
||||
| Gross profit as a percentage of revenues - continuing operations |
|
27.82 |
% |
|
26.27 |
% |
||||
| LIFO charge (credit) as a percentage of revenues - continuing operations |
|
0.20 |
% |
|
-0.23 |
% |
||||
| FIFO gross profit as a percentage of revenues - continuing operations |
|
28.02 |
% |
|
26.04 |
% |
||||
| Adjusted EBITDA gross profit as a percentage of revenues - continuing operations |
|
28.08 |
% |
|
26.10 |
% |
||||
| Selling, general and administrative expenses from continuing operations |
|
1,185,974 |
|
|
1,067,027 |
|
||||
| Adjusted EBITDA selling, general and administrative expenses from continuing operations |
|
1,118,706 |
|
|
983,990 |
|
||||
| Selling, general and administrative expenses as a percentage of | ||||||||||
| revenues - continuing operations |
|
26.76 |
% |
|
25.96 |
% |
||||
| Adjusted EBITDA selling, general and administrative expenses as a percentage of | ||||||||||
| revenues - continuing operations |
|
25.24 |
% |
|
23.94 |
% |
||||
| Cash interest expense |
|
44,853 |
|
|
47,500 |
|
||||
| Non-cash interest expense |
|
2,941 |
|
|
3,335 |
|
||||
| Total interest expense |
|
47,794 |
|
|
50,835 |
|
||||
| Interest expense - continuing operations |
|
47,794 |
|
|
50,835 |
|
||||
| Interest expense - discontinued operations |
|
- |
|
|
- |
|
||||
| Adjusted EBITDA - continuing operations |
|
125,931 |
|
|
88,557 |
|
||||
| Adjusted EBITDA as a percentage of revenues - continuing operations |
|
2.84 |
% |
|
2.15 |
% |
||||
| Pharmacy Services Segment | ||||||||||
| Revenues (a) | $ |
1,858,830 |
|
$ |
2,084,402 |
|
||||
| Cost of revenues (a) |
|
1,757,684 |
|
|
1,961,011 |
|
||||
| Gross profit |
|
101,146 |
|
|
123,391 |
|
||||
| Gross profit as a percentage of revenues |
|
5.44 |
% |
|
5.92 |
% |
||||
| Adjusted EBITDA |
|
28,862 |
|
|
48,848 |
|
||||
| Adjusted EBITDA as a percentage of revenues |
|
1.55 |
% |
|
2.34 |
% |
||||
(a) - |
Revenues and cost of revenues include $62,458 and $76,956 of inter-segment activity for the thirteen weeks ended November 27, 2021 and November 28, 2020, respectively, that is eliminated in consolidation. | ||||
| RITE AID CORPORATION AND SUBSIDIARIES | ||||||||||
| SUPPLEMENTAL SEGMENT OPERATING INFORMATION | ||||||||||
| (Dollars in thousands) | ||||||||||
| (unaudited) | ||||||||||
Thirty-nine weeks ended November 27, 2021 |
Thirty-nine weeks ended November 28, 2020 |
|||||||||
| Retail Pharmacy Segment | ||||||||||
| Revenues from continuing operations (a) | $ |
13,061,408 |
|
$ |
12,250,775 |
|
||||
| Cost of revenues from continuing operations (a) |
|
9,517,875 |
|
|
9,027,618 |
|
||||
| Gross profit from continuing operations |
|
3,543,533 |
|
|
3,223,157 |
|
||||
| LIFO charge (credit) from continuing operations |
|
900 |
|
|
(30,303 |
) |
||||
| FIFO gross profit from continuing operations |
|
3,544,433 |
|
|
3,192,854 |
|
||||
| Adjusted EBITDA gross profit from continuing operations |
|
3,551,888 |
|
|
3,227,196 |
|
||||
| Gross profit as a percentage of revenues - continuing operations |
|
27.13 |
% |
|
26.31 |
% |
||||
| LIFO charge (credit) as a percentage of revenues - continuing operations |
|
0.01 |
% |
|
-0.25 |
% |
||||
| FIFO gross profit as a percentage of revenues - continuing operations |
|
27.14 |
% |
|
26.06 |
% |
||||
| Adjusted EBITDA gross profit as a percentage of revenues - continuing operations |
|
27.19 |
% |
|
26.34 |
% |
||||
| Selling, general and administrative expenses from continuing operations |
|
3,505,365 |
|
|
3,206,078 |
|
||||
| Adjusted EBITDA selling, general and administrative expenses from continuing operations |
|
3,261,674 |
|
|
2,953,317 |
|
||||
| Selling, general and administrative expenses as a percentage of | ||||||||||
| revenues - continuing operations |
|
26.84 |
% |
|
26.17 |
% |
||||
| Adjusted EBITDA selling, general and administrative expenses as a percentage of | ||||||||||
| revenues - continuing operations |
|
24.97 |
% |
|
24.11 |
% |
||||
| Cash interest expense |
|
136,476 |
|
|
141,635 |
|
||||
| Non-cash interest expense |
|
9,031 |
|
|
9,754 |
|
||||
| Total interest expense |
|
145,507 |
|
|
151,389 |
|
||||
| Interest expense - continuing operations |
|
145,507 |
|
|
151,389 |
|
||||
| Interest expense - discontinued operations |
|
- |
|
|
- |
|
||||
| Adjusted EBITDA - continuing operations |
|
290,214 |
|
|
273,879 |
|
||||
| Adjusted EBITDA as a percentage of revenues - continuing operations |
|
2.22 |
% |
|
2.24 |
% |
||||
| Pharmacy Services Segment | ||||||||||
| Revenues (a) | $ |
5,629,325 |
|
$ |
6,100,026 |
|
||||
| Cost of revenues (a) |
|
5,307,676 |
|
|
5,761,420 |
|
||||
| Gross profit |
|
321,649 |
|
|
338,606 |
|
||||
| Gross profit as a percentage of revenues |
|
5.71 |
% |
|
5.55 |
% |
||||
| Adjusted EBITDA |
|
109,616 |
|
|
122,521 |
|
||||
| Adjusted EBITDA as a percentage of revenues |
|
1.95 |
% |
|
2.01 |
% |
||||
(a) - |
Revenues and cost of revenues include $187,868 and $224,417 of inter-segment activity for the thirty-nine weeks ended November 27, 2021 and November 28, 2020, respectively, that is eliminated in consolidation. | ||||
| RITE AID CORPORATION AND SUBSIDIARIES | ||||||||||||
| SUPPLEMENTAL INFORMATION | ||||||||||||
| RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA | ||||||||||||
| (In thousands) | ||||||||||||
| (unaudited) | ||||||||||||
Thirteen weeks ended November 27, 2021 |
Thirteen weeks ended November 28, 2020 |
|||||||||||
| Reconciliation of net (loss) income to adjusted EBITDA: | ||||||||||||
| Net (loss) income - continuing operations | $ |
(36,058 |
) |
$ |
4,324 |
|
||||||
| Adjustments: | ||||||||||||
| Interest expense |
|
47,794 |
|
|
50,835 |
|
||||||
| Income tax (benefit) expense |
|
(1,175 |
) |
|
437 |
|
||||||
| Depreciation and amortization |
|
72,973 |
|
|
83,336 |
|
||||||
| LIFO charge (credit) |
|
8,886 |
|
|
(9,487 |
) |
||||||
| Facility exit and impairment charges |
|
47,455 |
|
|
7,453 |
|
||||||
| Merger and Acquisition-related costs |
|
3,642 |
|
|
1,136 |
|
||||||
| Stock-based compensation expense |
|
217 |
|
|
2,867 |
|
||||||
| Restructuring-related costs |
|
9,657 |
|
|
12,175 |
|
||||||
| Inventory write-downs related to store closings |
|
86 |
|
|
704 |
|
||||||
| Litigation settlements |
|
2,000 |
|
|
- |
|
||||||
| Gain on sale of assets, net |
|
(5,899 |
) |
|
(16,305 |
) |
||||||
| Loss on Bartell acquisition |
|
5,346 |
|
|
- |
|
||||||
| Other |
|
(131 |
) |
|
(70 |
) |
||||||
| Adjusted EBITDA - continuing operations | $ |
154,793 |
|
$ |
137,405 |
|
||||||
| Percent of revenues - continuing operations |
|
2.49 |
% |
|
2.25 |
% |
||||||
| RITE AID CORPORATION AND SUBSIDIARIES | ||||||||||||
| SUPPLEMENTAL INFORMATION | ||||||||||||
| RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA | ||||||||||||
| (In thousands) | ||||||||||||
| (unaudited) | ||||||||||||
Thirty-nine weeks ended November 27, 2021 |
Thirty-nine weeks ended November 28, 2020 |
|||||||||||
| Reconciliation of net loss to adjusted EBITDA: | ||||||||||||
| Net loss - continuing operations | $ |
(149,416 |
) |
$ |
(81,575 |
) |
||||||
| Adjustments: | ||||||||||||
| Interest expense |
|
145,507 |
|
|
151,389 |
|
||||||
| Income tax expense (benefit) |
|
2,915 |
|
|
(7,534 |
) |
||||||
| Depreciation and amortization |
|
222,691 |
|
|
249,556 |
|
||||||
| LIFO charge (credit) |
|
900 |
|
|
(30,303 |
) |
||||||
| Facility exit and impairment charges |
|
67,639 |
|
|
22,734 |
|
||||||
| Intangible asset impairment charges |
|
- |
|
|
29,852 |
|
||||||
| Loss (gain) on debt modifications and retirements, net |
|
3,235 |
|
|
(5,274 |
) |
||||||
| Merger and Acquisition-related costs |
|
12,119 |
|
|
1,136 |
|
||||||
| Stock-based compensation expense |
|
8,820 |
|
|
8,677 |
|
||||||
| Restructuring-related costs |
|
25,173 |
|
|
71,096 |
|
||||||
| Inventory write-downs related to store closings |
|
1,356 |
|
|
2,596 |
|
||||||
| Litigation settlements |
|
50,212 |
|
|
- |
|
||||||
| Gain on sale of assets, net |
|
(79 |
) |
|
(17,473 |
) |
||||||
| Loss on Bartell acquisition |
|
5,346 |
|
|
- |
|
||||||
| Other |
|
3,412 |
|
|
1,523 |
|
||||||
| Adjusted EBITDA - continuing operations | $ |
399,830 |
|
$ |
396,400 |
|
||||||
| Percent of revenues - continuing operations |
|
2.16 |
% |
|
2.19 |
% |
||||||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||||
| SUPPLEMENTAL INFORMATION | |||||||||||
| ADJUSTED NET INCOME | |||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||
| (unaudited) | |||||||||||
Thirteen weeks ended November 27, 2021 |
Thirteen weeks ended November 28, 2020 |
||||||||||
| Net (loss) income from continuing operations | $ |
(36,058 |
) |
$ |
4,324 |
|
|||||
| Add back - Income tax (benefit) expense |
|
(1,175 |
) |
|
437 |
|
|||||
| (Loss) income before income taxes - continuing operations |
|
(37,233 |
) |
|
4,761 |
|
|||||
| Adjustments: | |||||||||||
| Amortization expense |
|
18,780 |
|
|
21,236 |
|
|||||
| LIFO charge (credit) |
|
8,886 |
|
|
(9,487 |
) |
|||||
| Merger and Acquisition-related costs |
|
3,642 |
|
|
1,136 |
|
|||||
| Restructuring-related costs |
|
9,657 |
|
|
12,175 |
|
|||||
| Loss on Bartell acquisition |
|
5,346 |
|
|
- |
|
|||||
| Litigation settlements |
|
2,000 |
|
|
- |
|
|||||
| Adjusted income before income taxes - continuing operations |
|
11,078 |
|
|
29,821 |
|
|||||
| Adjusted income tax expense (a) |
|
2,914 |
|
|
8,243 |
|
|||||
| Adjusted net income from continuing operations | $ |
8,164 |
|
$ |
21,578 |
|
|||||
| Adjusted net income per diluted share - continuing operations: | |||||||||||
| Numerator for adjusted net income per diluted share: | |||||||||||
| Adjusted net income from continuing operations | $ |
8,164 |
|
$ |
21,578 |
|
|||||
| Denominator: | |||||||||||
| Basic weighted average shares |
|
54,168 |
|
|
53,744 |
|
|||||
| Outstanding options and restricted shares, net |
|
541 |
|
|
335 |
|
|||||
| Diluted weighted average shares |
|
54,709 |
|
|
54,079 |
|
|||||
| Net (loss) income from continuing operations per diluted | |||||||||||
| share - continuing operations | $ |
(0.67 |
) |
$ |
0.08 |
|
|||||
| Adjusted net income per diluted share - continuing operations | $ |
0.15 |
|
$ |
0.40 |
|
|||||
(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 November 27, 2021 and November 28, 2020, respectively. | ||||||
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||||||
| SUPPLEMENTAL INFORMATION | |||||||||||
| ADJUSTED NET INCOME | |||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||
| (unaudited) | |||||||||||
Thirty-nine weeks ended November 27, 2021 |
Thirty-nine weeks ended November 28, 2020 |
||||||||||
| Net loss from continuing operations | $ |
(149,416 |
) |
$ |
(81,575 |
) |
|||||
| Add back - Income tax expense (benefit) |
|
2,915 |
|
|
(7,534 |
) |
|||||
| Loss before income taxes - continuing operations |
|
(146,501 |
) |
|
(89,109 |
) |
|||||
| Adjustments: | |||||||||||
| Amortization expense |
|
59,193 |
|
|
68,351 |
|
|||||
| LIFO charge (credit) |
|
900 |
|
|
(30,303 |
) |
|||||
| Intangible asset impairment charges |
|
- |
|
|
29,852 |
|
|||||
| Loss (gain) on debt modifications and retirements, net |
|
3,235 |
|
|
(5,274 |
) |
|||||
| Merger and Acquisition-related costs |
|
12,119 |
|
|
1,136 |
|
|||||
| Restructuring-related costs |
|
25,173 |
|
|
71,096 |
|
|||||
| Loss on Bartell acquisition |
|
5,346 |
|
|
- |
|
|||||
| Litigation settlements |
|
50,212 |
|
|
- |
|
|||||
| Adjusted income before income taxes - continuing operations |
|
9,677 |
|
|
45,749 |
|
|||||
| Adjusted income tax expense (a) |
|
2,545 |
|
|
12,645 |
|
|||||
| Adjusted net income from continuing operations | $ |
7,132 |
|
$ |
33,104 |
|
|||||
| Adjusted net income per diluted share - continuing operations: | |||||||||||
| Numerator for adjusted net income per diluted share: | |||||||||||
| Adjusted net income from continuing operations | $ |
7,132 |
|
$ |
33,104 |
|
|||||
| Denominator: | |||||||||||
| Basic weighted average shares |
|
54,004 |
|
|
53,600 |
|
|||||
| Outstanding options and restricted shares, net |
|
998 |
|
|
754 |
|
|||||
| Diluted weighted average shares |
|
55,002 |
|
|
54,354 |
|
|||||
| Net loss from continuing operations per diluted | |||||||||||
| share - continuing operations | $ |
(2.77 |
) |
$ |
(1.52 |
) |
|||||
| Adjusted net income per diluted share - continuing operations | $ |
0.13 |
|
$ |
0.61 |
|
|||||
(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 thirty-nine weeks ended November 27, 2021 and November 28, 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 ended November 27, 2021 |
Thirteen weeks ended November 28, 2020 |
||||||||||||
| Reconciliation of adjusted EBITDA gross profit: | |||||||||||||
| Revenues | $ |
4,432,508 |
|
$ |
4,109,592 |
|
|||||||
| Gross Profit |
|
1,233,237 |
|
|
1,079,708 |
|
|||||||
| Addback: | |||||||||||||
| LIFO charge (credit) |
|
8,886 |
|
|
(9,487 |
) |
|||||||
| Depreciation and amortization (cost of goods sold portion only) |
|
2,489 |
|
|
1,945 |
|
|||||||
| Other |
|
25 |
|
|
381 |
|
|||||||
| Adjusted EBITDA gross profit - continuing operations | $ |
1,244,637 |
|
$ |
1,072,547 |
|
|||||||
| Percent of revenues - continuing operations |
|
28.08 |
% |
|
26.10 |
% |
|||||||
| Reconciliation of adjusted EBITDA selling, general and administrative expenses: | |||||||||||||
| Revenues | $ |
4,432,508 |
|
$ |
4,109,592 |
|
|||||||
| Selling, general and administrative expenses |
|
1,185,974 |
|
|
1,067,027 |
|
|||||||
| Less: | |||||||||||||
| Depreciation and amortization (SG&A portion only) |
|
58,087 |
|
|
67,641 |
|
|||||||
| Stock-based compensation expense |
|
(174 |
) |
|
2,429 |
|
|||||||
| Merger and Acquisition-related costs |
|
3,642 |
|
|
1,136 |
|
|||||||
| Restructuring-related costs |
|
3,746 |
|
|
11,605 |
|
|||||||
| Litigation settlements |
|
2,000 |
|
|
- |
|
|||||||
| Other |
|
(33 |
) |
|
226 |
|
|||||||
| Adjusted EBITDA selling, general and administrative | |||||||||||||
| expenses - continuing operations | $ |
1,118,706 |
|
$ |
983,990 |
|
|||||||
| Percent of revenues - continuing operations |
|
25.24 |
% |
|
23.94 |
% |
|||||||
| Adjusted EBITDA - continuing operations | $ |
125,931 |
|
$ |
88,557 |
|
|||||||
| 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 27, 2021 |
Thirty-nine weeks ended November 28, 2020 |
||||||||||||
| Reconciliation of adjusted EBITDA gross profit: | |||||||||||||
| Revenues | $ |
13,061,408 |
|
$ |
12,250,775 |
|
|||||||
| Gross Profit |
|
3,543,533 |
|
|
3,223,157 |
|
|||||||
| Addback: | |||||||||||||
| LIFO charge (credit) |
|
900 |
|
|
(30,303 |
) |
|||||||
| Depreciation and amortization (cost of goods sold portion only) |
|
6,536 |
|
|
6,775 |
|
|||||||
| Restructuring-related costs - SKU optimization charges |
|
- |
|
|
25,763 |
|
|||||||
| Other |
|
919 |
|
|
1,804 |
|
|||||||
| Adjusted EBITDA gross profit - continuing operations | $ |
3,551,888 |
|
$ |
3,227,196 |
|
|||||||
| Percent of revenues - continuing operations |
|
27.19 |
% |
|
26.34 |
% |
|||||||
| Reconciliation of adjusted EBITDA selling, general and administrative expenses: | |||||||||||||
| Revenues | $ |
13,061,408 |
|
$ |
12,250,775 |
|
|||||||
| Selling, general and administrative expenses |
|
3,505,365 |
|
|
3,206,078 |
|
|||||||
| Less: | |||||||||||||
| Depreciation and amortization (SG&A portion only) |
|
176,936 |
|
|
199,434 |
|
|||||||
| Stock-based compensation expense |
|
8,292 |
|
|
7,785 |
|
|||||||
| Merger and Acquisition-related costs |
|
12,119 |
|
|
1,136 |
|
|||||||
| Restructuring-related costs |
|
7,951 |
|
|
41,992 |
|
|||||||
| Litigation settlements |
|
34,448 |
|
|
- |
|
|||||||
| Other |
|
3,945 |
|
|
2,414 |
|
|||||||
| Adjusted EBITDA selling, general and administrative | |||||||||||||
| expenses - continuing operations | $ |
3,261,674 |
|
$ |
2,953,317 |
|
|||||||
| Percent of revenues - continuing operations |
|
24.97 |
% |
|
24.11 |
% |
|||||||
| Adjusted EBITDA - continuing operations | $ |
290,214 |
|
$ |
273,879 |
|
|||||||
| 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 | $ |
24,400,000 |
|
$ |
24,700,000 |
|
|||||||
| Pharmacy Services Segment Revenues | $ |
7,100,000 |
|
$ |
7,200,000 |
|
|||||||
| Gross Capital Expenditures | $ |
275,000 |
|
$ |
275,000 |
|
|||||||
| Reconciliation of net loss to adjusted EBITDA: | |||||||||||||
| Net loss | $ |
(229,500 |
) |
$ |
(188,500 |
) |
|||||||
| Adjustments: | |||||||||||||
| Interest expense |
|
195,000 |
|
|
195,000 |
|
|||||||
| Income tax expense |
|
3,000 |
|
|
- |
|
|||||||
| Depreciation and amortization |
|
302,000 |
|
|
302,000 |
|
|||||||
| LIFO charge |
|
5,000 |
|
|
- |
|
|||||||
| Facility exit and impairment charges |
|
105,000 |
|
|
95,000 |
|
|||||||
| Loss on debt modifications and retirements, net |
|
3,200 |
|
|
3,200 |
|
|||||||
| Merger and Acquisition-related costs |
|
13,000 |
|
|
13,000 |
|
|||||||
| Restructuring-related costs |
|
35,000 |
|
|
35,000 |
|
|||||||
| Litigation settlements |
|
50,000 |
|
|
50,000 |
|
|||||||
| Gain on sale of assets, net |
|
(7,000 |
) |
|
(10,000 |
) |
|||||||
| Loss on Bartell acquisition |
|
5,300 |
|
|
5,300 |
|
|||||||
| Other |
|
20,000 |
|
|
20,000 |
|
|||||||
| Adjusted EBITDA | $ |
500,000 |
|
$ |
520,000 |
|
|||||||
| 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 | $ |
(229,500 |
) |
$ |
(188,500 |
) |
|||||
| Add back - income tax expense |
|
3,000 |
|
|
- |
|
|||||
| Loss before income taxes |
|
(226,500 |
) |
|
(188,500 |
) |
|||||
| Adjustments: | |||||||||||
| Amortization expense |
|
79,000 |
|
|
79,000 |
|
|||||
| LIFO charge |
|
5,000 |
|
|
- |
|
|||||
| Loss on debt modifications and retirements, net |
|
3,200 |
|
|
3,200 |
|
|||||
| Merger and Acquisition-related costs |
|
13,000 |
|
|
13,000 |
|
|||||
| Restructuring-related costs |
|
35,000 |
|
|
35,000 |
|
|||||
| Loss on Bartell acquisition |
|
5,300 |
|
|
5,300 |
|
|||||
| Litigation settlements |
|
50,000 |
|
|
50,000 |
|
|||||
| Adjusted loss before adjusted income taxes |
|
(36,000 |
) |
|
(3,000 |
) |
|||||
| Adjusted income tax benefit |
|
(9,500 |
) |
|
(800 |
) |
|||||
| Adjusted net loss | $ |
(26,500 |
) |
$ |
(2,200 |
) |
|||||
| Diluted adjusted net loss per share | $ |
(0.49 |
) |
$ |
(0.04 |
) |
|||||
