PHILADELPHIA--(BUSINESS WIRE)--Rite Aid Corporation (NYSE: RAD) today reported operating results for its fourth quarter and fiscal year ended February 26, 2022.
“We exceeded our 2022 plan amid continuing challenges of the COVID-19 pandemic. As we look forward to the year ahead, we are ready and energized to compete in a new post-pandemic normal,” said Heyward Donigan, president and chief executive officer. “We demonstrated the important role that pharmacists play in the everyday health of our customers and are well positioned to grow in a trillion-dollar pharmacy market through our continued leadership as a full-service pharmacy company.”
Consolidated Fourth Quarter and Full Year Summary
(dollars in thousands) |
Thirteen Week Period Ended |
Fifty-two Week Period Ended |
||||||||||
|
|
February 26, 2022 |
|
February 27, 2021 |
|
February 26, 2022 |
|
February 27, 2021 |
||||
Revenues from continuing operations |
$ |
6,065,390 |
$ |
5,916,856 |
$ |
24,568,255 |
$ |
24,043,240 |
||||
Net loss from continuing operations |
|
(389,062) |
|
(18,495) |
|
(538,478) |
|
(100,070) |
||||
Adjusted EBITDA from continuing operations |
|
106,075 |
|
41,265 |
|
505,905 |
|
437,665 |
||||
For the fourth quarter, the company reported net loss from continuing operations of $389.1 million, or $7.18 loss per share, Adjusted Net Loss from continuing operations of $88.6 million, or $1.63 loss per share, and Adjusted EBITDA from continuing operations of $106.1 million, or 1.8 percent of revenues.
Revenues from continuing operations increased 2.5 percent and 2.2 percent for the thirteen and fifty-two week periods ended February 26, 2022, respectively, compared to the prior year driven by growth at the Retail Pharmacy Segment, partially offset by a decline at the Pharmacy Services Segment.
Fourth quarter net loss from continuing operations was $389.1 million, or $7.18 per share, compared to last year’s fourth quarter net loss from continuing operations of $18.5 million, or $0.34 per share. The increase in net loss is due primarily to a current year charge of $229.0 million for the impairment of goodwill related to the Pharmacy Services Segment. Other variance drivers include higher facility exit and impairment charges driven by the Company’s store closure decisions, a gain on sale of assets in the prior year fourth quarter resulting from the sale leasebacks of stores and distribution centers, a gain on the acquisition of Bartell Drugs in the prior year fourth quarter, and a LIFO charge in the current quarter compared to a LIFO credit in the prior year fourth quarter. These items were partially offset by an increase in Adjusted EBITDA.
Net loss from continuing operations for the fiscal year ended February 26, 2022, was $538.5 million, or $9.96 loss per share, compared to last year’s net loss of $100.1 million, or $1.87 loss per share. The increase in net loss is due primarily to goodwill impairment related to the Pharmacy Services Segment, higher facility exit and impairment charges, a LIFO charge in the current year compared to a LIFO credit in the prior year, higher litigation settlements, and a gain on the acquisition of Bartell Drugs in the prior year. These items were partially offset by an increase in Adjusted EBITDA and lower restructuring-related costs.
Retail Pharmacy Segment
(dollars in thousands) |
Thirteen Week Period Ended |
Fifty-two Week Period Ended |
||||||||||
|
|
February 26, 2022 |
|
February 27, 2021 |
|
February 26, 2022 |
|
February 27, 2021 |
||||
Revenues from continuing operations |
$ |
4,433,408 |
$ |
4,114,485 |
$ |
17,494,816 |
$ |
16,365,260 |
||||
Adjusted EBITDA from continuing operations |
|
102,419 |
|
6,017 |
|
392,633 |
|
279,896 |
||||
Retail Pharmacy Segment revenues from continuing operations increased 7.8 percent over the prior year quarter, driven by an increase in same store sales. Same store sales from continuing operations for the fourth quarter increased 8.3 percent over the prior year period, consisting of a 10.7 percent increase in pharmacy sales and a 2.7 percent increase in front-end sales. Front-end same store sales, excluding cigarettes and tobacco products, increased 3.2 percent. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, increased 8.7 percent over the prior year period. In addition to the benefit from 3.3 million COVID-19 vaccinations, maintenance prescriptions increased 1.0 percent while other acute prescriptions increased 9.0 percent on a same store basis when excluding COVID-19 vaccinations. Prescription sales from continuing operations accounted for 70.1 percent of total drugstore sales. Total store count at the end of the fourth quarter was 2,450.
For the fiscal year ended February 26, 2022, Retail Pharmacy Segment revenues from continuing operations increased 6.9 percent over the prior year, driven by an increase in same store sales and the inclusion of Bartell’s results. Same store sales from continuing operations for the year increased 4.5 percent over the prior year, consisting of a 7.9 percent increase in pharmacy sales, partially offset by a 3.3 percent decrease in front-end sales. Front-end same store sales, excluding cigarettes and tobacco products, decreased 2.8 percent. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, increased 8.7 percent over the prior year period. In addition to the benefit from over 14 million COVID-19 vaccinations, maintenance prescriptions increased 1.8 percent while other acute prescriptions increased 2.3 percent on a same store basis when excluding COVID-19 vaccinations. Prescription sales from continuing operations accounted for 70.0 percent of total drugstore sales.
Retail Pharmacy Segment Adjusted EBITDA from continuing operations was $102.4 million, or 2.3 percent of revenues, for the fourth quarter compared to last year’s fourth quarter Adjusted EBITDA from continuing operations of $6.0 million, or 0.2 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 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 and field, increases in workers compensation costs and cycling the benefit from the prior year change to modernize our associate PTO plans.
For the fiscal year ended February 26, 2022, Retail Pharmacy Segment Adjusted EBITDA from continuing operations was $392.6 million, or 2.2 percent of revenues, compared to $279.9 million, or 1.7 percent of revenues, for the prior year. 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, and incremental gross profit from our Bartell acquisition. These increases were partially offset by pharmacy reimbursement rate pressures. SG&A expenses were negatively impacted by cycling the benefit from the prior year change to modernize our associate PTO plans, incremental costs from our Bartell stores, and costs incurred to support our COVID-19 vaccination program, partially offset by labor savings due to the cycling of the prior year’s Hero Pay and Hero Bonus programs and the COVID-19 buying surge.
Pharmacy Services Segment
(dollars in thousands) |
Thirteen Week Period Ended |
Fifty-two Week Period Ended |
||||||||||
|
|
February 26, 2022 |
|
February 27, 2021 |
|
February 26, 2022 |
|
February 27, 2021 |
||||
Revenues from continuing operations |
$ |
1,693,800 |
$ |
1,870,111 |
$ |
7,323,125 |
$ |
7,970,137 |
||||
Adjusted EBITDA from continuing operations |
|
3,656 |
|
35,248 |
|
113,272 |
|
157,769 |
||||
Pharmacy Services Segment revenues were $1.7 billion for the quarter, a decrease of 9.4 percent compared to the prior year quarter. For the fiscal year ended February 26, 2022, Pharmacy Services Segment revenues were $7.3 billion, a decrease of 8.1 percent compared to the prior year. The decrease in revenues was primarily the result of a planned decrease in Elixir Insurance membership and a previously announced client loss due to industry consolidation.
Pharmacy Services Segment Adjusted EBITDA from continuing operations was $3.7 million, or 0.2 percent of revenues, for the fourth quarter compared to last year’s fourth quarter Adjusted EBITDA from continuing operations of $35.2 million, or 1.9 percent of revenues. The reduction in Adjusted EBITDA resulted, in part, from the decline in revenues associated with lost PBM business discussed above, partially offset by higher retained rebates in the last two months of the quarter. Also contributing to the reduction to Adjusted EBITDA in the current quarter was an increase in the medical loss ratio at Elixir insurance, as the costs for calendar 2021 were in excess of what we had estimated. In addition, we recorded a reduction in accounts receivable related to a decision to exit our rebate aggregation business. As reflected in our Fiscal 2023 outlook for Elixir, these items will not be part of Elixir’s run rate Adjusted EBITDA going forward.
For the fiscal year ended February 26, 2022, Pharmacy Services Segment Adjusted EBITDA from continuing operations was $113.3 million, or 1.6 percent of revenues, compared to prior year Adjusted EBITDA from continuing operations of $157.8 million, or 2.0 percent of revenues. Gross profit dollars were negatively impacted from the decline in revenues, a reduction in rebates, an increase in the medical loss ratio at Elixir Insurance and the decision to exit the rebate aggregation business.
Outlook for Fiscal 2023
The Company’s outlook for Fiscal 2023 takes into account an expected reduction in benefit from COVID vaccinations and a reduction in revenues at Elixir, offset by anticipated benefit from initiatives to increase retail sales and non-COVID related prescriptions. The outlook also assumes improvements in front end margin driven by changes in our loyalty program, greater owned brand penetration and expected expansion in gross margin at Elixir due to our new rebate arrangement, offset by continuing reimbursement rate pressure. We will significantly reduce costs through our closure of a total of 145 unprofitable stores (which includes the 63 announced last quarter), a reduction in corporate administrative expenses and improved efficiencies in worked payroll and other store labor costs. We have also reduced expenses at Elixir associated with our reduction in membership. We expect these cost initiatives to drive savings of $170 million in Fiscal 2023.
In addition, the following Fiscal 2023 outlook is forward-looking subject to a range of assumptions and uncertainties described below and in documents that we file or furnish with the Securities and Exchange Commission the (“SEC”).
Total revenues are expected to be between $23.1 billion and $23.5 billion in fiscal 2023. Retail Pharmacy Segment revenue is expected to be between $17.7 billion and $18.0 billion and Pharmacy Services Segment revenue is expected to be between $5.4 billion and $5.5 billion (net of any intercompany revenues to the Retail Pharmacy Segment).
Net loss is expected to be between $167 million and $210 million.
Adjusted EBITDA is expected to be between $460 million and $500 million. Retail Pharmacy Segment Adjusted EBITDA is expected to be between $320 million and $350 million and Pharmacy Services Segment Adjusted EBITDA is expected to be between $140 million and $150 million.
Adjusted net loss per share is expected to be between $(0.53) and $(1.06).
Capital expenditures are expected to be approximately $250 million, with a focus on investments in digital capabilities, technology, prescription file purchases, distribution center automation and store remodels. We expect to generate positive free cash flow in Fiscal 2023.
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 April 14, 2022, and ending at 11:59 p.m. Eastern Time on May 14, 2022. To access the replay of the call, telephone (800) 770-2030 or (647) 362-9199 and enter the seven-digit reservation number 9029129. 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, visit 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 2023; 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 2023 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, the gain or loss on Bartell acquisition, and the change in estimate related to manufacturer rebate receivables. 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 exit 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, the gain or loss on Bartell acquisition, and the change in estimate related to manufacturer rebate receivables). 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) | |||||||
| February 26, 2022 | February 27, 2021 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ |
39,721 |
|
$ |
160,902 |
|
|
| Accounts receivable, net |
|
1,343,496 |
|
|
1,462,441 |
|
|
| Inventories, net of LIFO reserve of $487,173 and $485,859 |
|
1,959,389 |
|
|
1,864,890 |
|
|
| Prepaid expenses and other current assets |
|
106,749 |
|
|
106,941 |
|
|
| Total current assets |
|
3,449,355 |
|
|
3,595,174 |
|
|
| Property, plant and equipment, net |
|
989,167 |
|
|
1,080,499 |
|
|
| Operating lease right-of-use assets |
|
2,813,535 |
|
|
3,064,077 |
|
|
| Goodwill |
|
879,136 |
|
|
1,108,136 |
|
|
| Other intangibles, net |
|
291,196 |
|
|
340,519 |
|
|
| Deferred tax assets |
|
20,071 |
|
|
14,964 |
|
|
| Other assets |
|
86,543 |
|
|
132,035 |
|
|
| Total assets | $ |
8,529,003 |
|
$ |
9,335,404 |
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Current maturities of long-term debt and lease financing obligations | $ |
5,544 |
|
$ |
6,409 |
|
|
| Accounts payable |
|
1,571,261 |
|
|
1,437,421 |
|
|
| Accrued salaries, wages and other current liabilities |
|
780,632 |
|
|
642,364 |
|
|
| Current portion of operating lease liabilities |
|
575,651 |
|
|
516,752 |
|
|
| Total current liabilities |
|
2,933,088 |
|
|
2,602,946 |
|
|
| Long-term debt, less current maturities |
|
2,732,986 |
|
|
3,063,087 |
|
|
| Long-term operating lease liabilities |
|
2,597,090 |
|
|
2,829,293 |
|
|
| Lease financing obligations, less current maturities |
|
14,830 |
|
|
16,711 |
|
|
| Other noncurrent liabilities |
|
151,976 |
|
|
208,213 |
|
|
| Total liabilities |
|
8,429,970 |
|
|
8,720,250 |
|
|
| Commitments and contingencies |
|
- |
|
|
- |
|
|
| Stockholders' equity: | |||||||
| Common stock |
|
55,752 |
|
|
55,143 |
|
|
| Additional paid-in capital |
|
5,910,299 |
|
|
5,897,168 |
|
|
| Accumulated deficit |
|
(5,851,581 |
) |
|
(5,313,103 |
) |
|
| Accumulated other comprehensive loss |
|
(15,437 |
) |
|
(24,054 |
) |
|
| Total stockholders' equity |
|
99,033 |
|
|
615,154 |
|
|
| Total liabilities and stockholders' equity | $ |
8,529,003 |
|
$ |
9,335,404 |
|
|
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
| (Dollars in thousands, except per share amounts) | |||||||
| (unaudited) | |||||||
Thirteen weeks ended February 26, 2022 |
Thirteen weeks ended February 27, 2021 |
||||||
| Revenues | $ |
6,065,390 |
|
$ |
5,916,856 |
|
|
| Costs and expenses: | |||||||
| Cost of revenues |
|
4,824,077 |
|
|
4,774,297 |
|
|
| Selling, general and administrative expenses |
|
1,243,841 |
|
|
1,187,541 |
|
|
| Facility exit and impairment charges |
|
112,551 |
|
|
35,669 |
|
|
| Goodwill and intangible asset impairment charges |
|
229,000 |
|
|
- |
|
|
| Interest expense |
|
46,094 |
|
|
49,999 |
|
|
| Loss (gain) on sale of assets, net |
|
5,584 |
|
|
(51,827 |
) |
|
| Gain on Bartell acquisition |
|
- |
|
|
(47,705 |
) |
|
|
6,461,147 |
|
|
5,947,974 |
|
||
| Loss from continuing operations before income taxes |
|
(395,757 |
) |
|
(31,118 |
) |
|
| Income tax benefit |
|
(6,695 |
) |
|
(12,623 |
) |
|
| Net loss from continuing operations |
|
(389,062 |
) |
|
(18,495 |
) |
|
| Net income from discontinued operations, net of tax |
|
- |
|
|
- |
|
|
| Net loss | $ |
(389,062 |
) |
$ |
(18,495 |
) |
|
| Basic and diluted loss per share: | |||||||
| Numerator for loss per share: | |||||||
| Net loss from continuing operations attributable to common stockholders - basic and diluted | $ |
(389,062 |
) |
$ |
(18,495 |
) |
|
| Net income from discontinued operations attributable to common stockholders - basic and diluted |
|
- |
|
|
- |
|
|
| Loss attributable to common stockholders - basic and diluted | $ |
(389,062 |
) |
$ |
(18,495 |
) |
|
| Denominator: | |||||||
| Basic and diluted weighted average shares |
|
54,208 |
|
|
53,812 |
|
|
| Basic and diluted loss per share | |||||||
| Continuing operations | $ |
(7.18 |
) |
$ |
(0.34 |
) |
|
| Discontinued operations | $ |
- |
|
$ |
- |
|
|
| Net basic and diluted loss per share | $ |
(7.18 |
) |
$ |
(0.34 |
) |
|
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
| (Dollars in thousands, except per share amounts) | |||||||
| (unaudited) | |||||||
Fifty-two weeks ended February 26, 2022 |
Fifty-two weeks ended February 27, 2021 |
||||||
| Revenues | $ |
24,568,255 |
|
$ |
24,043,240 |
|
|
| Costs and expenses: | |||||||
| Cost of revenues |
|
19,461,760 |
|
|
19,338,918 |
|
|
| Selling, general and administrative expenses |
|
5,033,876 |
|
|
4,657,185 |
|
|
| Facility exit and impairment charges |
|
180,190 |
|
|
58,403 |
|
|
| Goodwill and intangible asset impairment charges |
|
229,000 |
|
|
29,852 |
|
|
| Interest expense |
|
191,601 |
|
|
201,388 |
|
|
| Loss (gain) on debt modifications and retirements, net |
|
3,235 |
|
|
(5,274 |
) |
|
| Loss (gain) on sale of assets, net |
|
5,505 |
|
|
(69,300 |
) |
|
| Loss (gain) on Bartell acquisition |
|
5,346 |
|
|
(47,705 |
) |
|
|
25,110,513 |
|
|
24,163,467 |
|
||
| Loss from continuing operations before income taxes |
|
(542,258 |
) |
|
(120,227 |
) |
|
| Income tax benefit |
|
(3,780 |
) |
|
(20,157 |
) |
|
| Net loss from continuing operations |
|
(538,478 |
) |
|
(100,070 |
) |
|
| Net income from discontinued operations, net of tax |
|
- |
|
|
9,161 |
|
|
| Net loss | $ |
(538,478 |
) |
$ |
(90,909 |
) |
|
| Basic and diluted loss per share: | |||||||
| Numerator for loss per share: | |||||||
| Net loss from continuing operations attributable to common stockholders - basic and diluted | $ |
(538,478 |
) |
$ |
(100,070 |
) |
|
| Net income from discontinued operations attributable to common stockholders - basic and diluted |
|
- |
|
|
9,161 |
|
|
| Loss attributable to common stockholders - basic and diluted | $ |
(538,478 |
) |
$ |
(90,909 |
) |
|
| Denominator: | |||||||
| Basic and diluted weighted average shares |
|
54,055 |
|
|
53,653 |
|
|
| Basic and diluted loss per share | |||||||
| Continuing operations | $ |
(9.96 |
) |
$ |
(1.87 |
) |
|
| Discontinued operations | $ |
- |
|
$ |
0.18 |
|
|
| Net basic and diluted loss per share | $ |
(9.96 |
) |
$ |
(1.69 |
) |
|
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (Dollars in thousands) | |||||||
| (unaudited) | |||||||
Thirteen weeks ended February 26, 2022 |
Thirteen weeks ended February 27, 2021 |
||||||
| OPERATING ACTIVITIES: | |||||||
| Net loss | $ |
(389,062 |
) |
$ |
(18,495 |
) |
|
| Net income from discontinued operations, net of tax |
|
- |
|
|
- |
|
|
| Net loss from continuing operations | $ |
(389,062 |
) |
$ |
(18,495 |
) |
|
| Adjustments to reconcile to net cash provided by operating activities of continuing operations: | |||||||
| Depreciation and amortization |
|
72,995 |
|
|
77,568 |
|
|
| Facility exit and impairment charges |
|
112,551 |
|
|
35,669 |
|
|
| Goodwill and intangible asset impairment charges |
|
229,000 |
|
|
- |
|
|
| LIFO charge (credit) |
|
414 |
|
|
(21,389 |
) |
|
| Loss (gain) on sale of assets, net |
|
5,584 |
|
|
(51,827 |
) |
|
| Change in allowances for uncollectible accounts receivable |
|
1,019 |
|
|
- |
|
|
| Gain on Bartell acquisition |
|
- |
|
|
(47,705 |
) |
|
| Stock-based compensation expense |
|
4,230 |
|
|
4,326 |
|
|
| Changes in deferred taxes |
|
(5,107 |
) |
|
(10,633 |
) |
|
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable |
|
473,157 |
|
|
325,374 |
|
|
| Inventories |
|
(9,962 |
) |
|
196,795 |
|
|
| Accounts payable |
|
9,792 |
|
|
(36,832 |
) |
|
| Operating lease right-of-use assets and operating lease liabilities |
|
(9,858 |
) |
|
(2,725 |
) |
|
| Other assets |
|
(1,209 |
) |
|
5,710 |
|
|
| Other liabilities |
|
(150,832 |
) |
|
(96,814 |
) |
|
| Net cash provided by operating activities of continuing operations |
|
342,712 |
|
|
359,022 |
|
|
| INVESTING ACTIVITIES: | |||||||
| Payments for property, plant and equipment |
|
(49,089 |
) |
|
(67,752 |
) |
|
| Intangible assets acquired |
|
(2,334 |
) |
|
(1,097 |
) |
|
| Acquisition of business, net of cash acquired |
|
- |
|
|
(86,230 |
) |
|
| Proceeds from dispositions of assets and investments |
|
10,885 |
|
|
2,358 |
|
|
| Proceeds from sale-leaseback transactions |
|
17,708 |
|
|
88,880 |
|
|
| Net cash used in investing activities of continuing operations |
|
(22,830 |
) |
|
(63,841 |
) |
|
| FINANCING ACTIVITIES: | |||||||
| Net payments to revolver |
|
(441,000 |
) |
|
(141,000 |
) |
|
| Principal payments on long-term debt |
|
(1,016 |
) |
|
(1,161 |
) |
|
| Change in zero balance cash accounts |
|
6,802 |
|
|
(42,008 |
) |
|
| Net proceeds from the issuance of common stock |
|
- |
|
|
53 |
|
|
| Payments for taxes related to net share settlement of equity awards |
|
(236 |
) |
|
(921 |
) |
|
| Deferred financing costs paid |
|
- |
|
|
(55 |
) |
|
| Net cash used in financing activities of continuing operations |
|
(435,450 |
) |
|
(185,092 |
) |
|
| (Decrease) increase in cash and cash equivalents |
|
(115,568 |
) |
|
110,089 |
|
|
| Cash and cash equivalents, beginning of period |
|
155,289 |
|
|
50,813 |
|
|
| Cash and cash equivalents, end of period | $ |
39,721 |
|
$ |
160,902 |
|
|
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (Dollars in thousands) | |||||||
| (unaudited) | |||||||
Fifty-two weeks ended
|
Fifty-two weeks ended
|
||||||
| OPERATING ACTIVITIES: | |||||||
| Net loss | $ |
(538,478 |
) |
$ |
(90,909 |
) |
|
| Net income from discontinued operations, net of tax |
|
- |
|
|
9,161 |
|
|
| Net loss from continuing operations | $ |
(538,478 |
) |
$ |
(100,070 |
) |
|
| Adjustments to reconcile to net cash provided by operating activities of continuing operations: | |||||||
| Depreciation and amortization |
|
295,686 |
|
|
327,124 |
|
|
| Facility exit and impairment charges |
|
180,190 |
|
|
58,403 |
|
|
| Goodwill and intangible asset impairment charges |
|
229,000 |
|
|
29,852 |
|
|
| LIFO charge (credit) |
|
1,314 |
|
|
(51,692 |
) |
|
| Loss (gain) on sale of assets, net |
|
5,505 |
|
|
(69,300 |
) |
|
| Change in allowances for uncollectible accounts receivable |
|
22,011 |
|
|
- |
|
|
| Loss (gain) on Bartell acquisition |
|
5,346 |
|
|
(47,705 |
) |
|
| Stock-based compensation expense |
|
13,050 |
|
|
13,003 |
|
|
| Loss (gain) on debt modifications and retirements, net |
|
3,235 |
|
|
(5,274 |
) |
|
| Changes in deferred taxes |
|
(6,709 |
) |
|
(10,633 |
) |
|
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable |
|
54,086 |
|
|
(182,404 |
) |
|
| Inventories |
|
(97,112 |
) |
|
177,263 |
|
|
| Accounts payable |
|
139,228 |
|
|
(35,372 |
) |
|
| Operating lease right-of-use assets and operating lease liabilities |
|
(29,375 |
) |
|
(28,044 |
) |
|
| Other assets |
|
33,737 |
|
|
80,975 |
|
|
| Other liabilities |
|
68,558 |
|
|
(50,947 |
) |
|
| Net cash provided by operating activities of continuing operations |
|
379,272 |
|
|
105,179 |
|
|
| INVESTING ACTIVITIES: | |||||||
| Payments for property, plant and equipment |
|
(194,090 |
) |
|
(195,141 |
) |
|
| Intangible assets acquired |
|
(26,623 |
) |
|
(29,800 |
) |
|
| Acquisition of business, net of cash acquired |
|
- |
|
|
(86,230 |
) |
|
| Proceeds from insured loss |
|
10,436 |
|
|
12,500 |
|
|
| Proceeds from dispositions of assets and investments |
|
18,706 |
|
|
11,444 |
|
|
| Proceeds from sale-leaseback transactions |
|
57,498 |
|
|
177,892 |
|
|
| Net cash used in investing activities of continuing operations |
|
(134,073 |
) |
|
(109,335 |
) |
|
| FINANCING ACTIVITIES: | |||||||
| Proceeds from issuance of long-term debt |
|
350,000 |
|
|
849,918 |
|
|
| Net (payments to) proceeds from revolver |
|
(141,000 |
) |
|
200,000 |
|
|
| Principal payments on long-term debt |
|
(545,036 |
) |
|
(1,058,537 |
) |
|
| Change in zero balance cash accounts |
|
(8,285 |
) |
|
(36,463 |
) |
|
| Net proceeds from the issuance of common stock |
|
- |
|
|
53 |
|
|
| Financing fees paid for early debt redemption |
|
(833 |
) |
|
(2,399 |
) |
|
| Payments for taxes related to net share settlement of equity awards |
|
(2,588 |
) |
|
(3,086 |
) |
|
| Deferred financing costs paid |
|
(18,638 |
) |
|
(14,729 |
) |
|
| Net cash used in financing activities of continuing operations |
|
(366,380 |
) |
|
(65,243 |
) |
|
| 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 |
|
(121,181 |
) |
|
(57,278 |
) |
|
| Cash and cash equivalents, beginning of period |
|
160,902 |
|
|
218,180 |
|
|
| Cash and cash equivalents, end of period | $ |
39,721 |
|
$ |
160,902 |
|
|
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||
| SUPPLEMENTAL SEGMENT OPERATING INFORMATION | |||||||
| (Dollars in thousands) | |||||||
| (unaudited) | |||||||
Thirteen weeks ended February 26, 2022 |
Thirteen weeks ended February 27, 2021 |
||||||
| Retail Pharmacy Segment | |||||||
| Revenues from continuing operations (a) | $ |
4,433,408 |
|
$ |
4,114,485 |
|
|
| Cost of revenues from continuing operations (a) |
|
3,254,866 |
|
|
3,081,851 |
|
|
| Gross profit from continuing operations |
|
1,178,542 |
|
|
1,032,634 |
|
|
| LIFO charge (credit) from continuing operations |
|
414 |
|
|
(21,389 |
) |
|
| FIFO gross profit from continuing operations |
|
1,178,956 |
|
|
1,011,245 |
|
|
| Adjusted EBITDA gross profit from continuing operations |
|
1,185,144 |
|
|
1,009,004 |
|
|
| Gross profit as a percentage of revenues - continuing operations |
|
26.58 |
% |
|
25.10 |
% |
|
| LIFO charge (credit) as a percentage of revenues - continuing operations |
|
0.01 |
% |
|
-0.52 |
% |
|
| FIFO gross profit as a percentage of revenues - continuing operations |
|
26.59 |
% |
|
24.58 |
% |
|
| Adjusted EBITDA gross profit as a percentage of revenues - continuing operations |
|
26.73 |
% |
|
24.52 |
% |
|
| Selling, general and administrative expenses from continuing operations |
|
1,151,411 |
|
|
1,093,074 |
|
|
| Adjusted EBITDA selling, general and administrative expenses from continuing operations |
|
1,082,725 |
|
|
1,002,987 |
|
|
| Selling, general and administrative expenses as a percentage of revenues - continuing operations |
|
25.97 |
% |
|
26.57 |
% |
|
| Adjusted EBITDA selling, general and administrative expenses as a percentage of revenues - continuing operations |
|
24.42 |
% |
|
24.38 |
% |
|
| Cash interest expense |
|
43,721 |
|
|
46,671 |
|
|
| Non-cash interest expense |
|
2,373 |
|
|
3,328 |
|
|
| Total interest expense |
|
46,094 |
|
|
49,999 |
|
|
| Interest expense - continuing operations |
|
46,094 |
|
|
49,999 |
|
|
| Interest expense - discontinued operations |
|
- |
|
|
- |
|
|
| Adjusted EBITDA - continuing operations |
|
102,419 |
|
|
6,017 |
|
|
| Adjusted EBITDA as a percentage of revenues - continuing operations |
|
2.31 |
% |
|
0.15 |
% |
|
| Pharmacy Services Segment | |||||||
| Revenues (a) | $ |
1,693,800 |
|
$ |
1,870,111 |
|
|
| Cost of revenues (a) |
|
1,631,029 |
|
|
1,760,186 |
|
|
| Gross profit |
|
62,771 |
|
|
109,925 |
|
|
| Gross profit as a percentage of revenues |
|
3.71 |
% |
|
5.88 |
% |
|
| Adjusted EBITDA |
|
3,656 |
|
|
35,248 |
|
|
| Adjusted EBITDA as a percentage of revenues |
|
0.22 |
% |
|
1.88 |
% |
|
| (a) - | Revenues and cost of revenues include $61,818 and $67,740 of inter-segment activity for the thirteen weeks ended |
| February 26, 2022 and February 27, 2021, respectively, that is eliminated in consolidation. |
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||
| SUPPLEMENTAL SEGMENT OPERATING INFORMATION | |||||||
| (Dollars in thousands) | |||||||
| (unaudited) | |||||||
| Fifty-two weeks ended February 26, 2022 |
Fifty-two weeks ended February 27, 2021 |
||||||
| Retail Pharmacy Segment | |||||||
| Revenues from continuing operations (a) | $ |
17,494,816 |
|
$ |
16,365,260 |
|
|
| Cost of revenues from continuing operations (a) |
|
12,772,741 |
|
|
12,109,469 |
|
|
| Gross profit from continuing operations |
|
4,722,075 |
|
|
4,255,791 |
|
|
| LIFO charge (credit) from continuing operations |
|
1,314 |
|
|
(51,692 |
) |
|
| FIFO gross profit from continuing operations |
|
4,723,389 |
|
|
4,204,099 |
|
|
| Adjusted EBITDA gross profit from continuing operations |
|
4,737,032 |
|
|
4,236,200 |
|
|
| Gross profit as a percentage of revenues - continuing operations |
|
26.99 |
% |
|
26.01 |
% |
|
| LIFO charge (credit) as a percentage of revenues - continuing operations |
|
0.01 |
% |
|
-0.32 |
% |
|
| FIFO gross profit as a percentage of revenues - continuing operations |
|
27.00 |
% |
|
25.69 |
% |
|
| Adjusted EBITDA gross profit as a percentage of revenues - continuing operations |
|
27.08 |
% |
|
25.89 |
% |
|
| Selling, general and administrative expenses from continuing operations |
|
4,656,776 |
|
|
4,299,152 |
|
|
| Adjusted EBITDA selling, general and administrative expenses from continuing operations |
|
4,344,399 |
|
|
3,956,304 |
|
|
| Selling, general and administrative expenses as a percentage of revenues - continuing operations |
|
26.62 |
% |
|
26.27 |
% |
|
| Adjusted EBITDA selling, general and administrative expenses as a percentage of revenues - continuing operations |
|
24.83 |
% |
|
24.18 |
% |
|
| Cash interest expense |
|
180,197 |
|
|
188,306 |
|
|
| Non-cash interest expense |
|
11,404 |
|
|
13,082 |
|
|
| Total interest expense |
|
191,601 |
|
|
201,388 |
|
|
| Interest expense - continuing operations |
|
191,601 |
|
|
201,388 |
|
|
| Interest expense - discontinued operations |
|
- |
|
|
- |
|
|
| Adjusted EBITDA - continuing operations |
|
392,633 |
|
|
279,896 |
|
|
| Adjusted EBITDA as a percentage of revenues - continuing operations |
|
2.24 |
% |
|
1.71 |
% |
|
| Pharmacy Services Segment | |||||||
| Revenues (a) | $ |
7,323,125 |
|
$ |
7,970,137 |
|
|
| Cost of revenues (a) |
|
6,938,705 |
|
|
7,521,606 |
|
|
| Gross profit |
|
384,420 |
|
|
448,531 |
|
|
| Gross profit as a percentage of revenues |
|
5.25 |
% |
|
5.63 |
% |
|
| Adjusted EBITDA |
|
113,272 |
|
|
157,769 |
|
|
| Adjusted EBITDA as a percentage of revenues |
|
1.55 |
% |
|
1.98 |
% |
|
| (a) - | Revenues and cost of revenues include $249,686 and $292,157 of inter-segment activity for the fifty-two weeks ended |
| February 26, 2022 and February 27, 2021, respectively, that is eliminated in consolidation. |
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||
| SUPPLEMENTAL INFORMATION | |||||||
| RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA | |||||||
| (In thousands) | |||||||
| (unaudited) | |||||||
Thirteen weeks ended February 26, 2022 |
Thirteen weeks ended February 27, 2021 |
||||||
| Reconciliation of net loss to adjusted EBITDA: | |||||||
| Net loss - continuing operations | $ |
(389,062 |
) |
$ |
(18,495 |
) |
|
| Adjustments: | |||||||
| Interest expense |
|
46,094 |
|
|
49,999 |
|
|
| Income tax benefit |
|
(6,695 |
) |
|
(12,623 |
) |
|
| Depreciation and amortization |
|
72,995 |
|
|
77,568 |
|
|
| LIFO charge (credit) |
|
414 |
|
|
(21,389 |
) |
|
| Facility exit and impairment charges |
|
112,551 |
|
|
35,669 |
|
|
| Goodwill and intangible asset impairment charges |
|
229,000 |
|
|
- |
|
|
| Merger and Acquisition-related costs |
|
678 |
|
|
9,413 |
|
|
| Stock-based compensation expense |
|
4,230 |
|
|
4,326 |
|
|
| Restructuring-related costs |
|
9,948 |
|
|
13,456 |
|
|
| Inventory write-downs related to store closings |
|
3,942 |
|
|
1,113 |
|
|
| Loss (gain) on sale of assets, net |
|
5,584 |
|
|
(51,827 |
) |
|
| Gain on Bartell acquisition |
|
- |
|
|
(47,705 |
) |
|
| Change in estimate related to manufacturer rebate receivables |
|
15,068 |
|
|
- |
|
|
| Other |
|
1,328 |
|
|
1,760 |
|
|
| Adjusted EBITDA - continuing operations | $ |
106,075 |
|
$ |
41,265 |
|
|
| Percent of revenues - continuing operations |
|
1.75 |
% |
|
0.70 |
% |
|
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||
| SUPPLEMENTAL INFORMATION | |||||||
| RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA | |||||||
| (In thousands) | |||||||
| (unaudited) | |||||||
| Fifty-two weeks ended February 26, 2022 |
Fifty-two weeks ended February 27, 2021 |
||||||
| Reconciliation of net loss to adjusted EBITDA: | |||||||
| Net loss - continuing operations | $ |
(538,478 |
) |
$ |
(100,070 |
) |
|
| Adjustments: | |||||||
| Interest expense |
|
191,601 |
|
|
201,388 |
|
|
| Income tax benefit |
|
(3,780 |
) |
|
(20,157 |
) |
|
| Depreciation and amortization |
|
295,686 |
|
|
327,124 |
|
|
| LIFO charge (credit) |
|
1,314 |
|
|
(51,692 |
) |
|
| Facility exit and impairment charges |
|
180,190 |
|
|
58,403 |
|
|
| Goodwill and intangible asset impairment charges |
|
229,000 |
|
|
29,852 |
|
|
| Loss (gain) on debt modifications and retirements, net |
|
3,235 |
|
|
(5,274 |
) |
|
| Merger and Acquisition-related costs |
|
12,797 |
|
|
10,549 |
|
|
| Stock-based compensation expense |
|
13,050 |
|
|
13,003 |
|
|
| Restructuring-related costs |
|
35,121 |
|
|
84,552 |
|
|
| Inventory write-downs related to store closings |
|
5,298 |
|
|
3,709 |
|
|
| Litigation settlements |
|
50,212 |
|
|
- |
|
|
| Loss (gain) on sale of assets, net |
|
5,505 |
|
|
(69,300 |
) |
|
| Loss (gain) on Bartell acquisition |
|
5,346 |
|
|
(47,705 |
) |
|
| Change in estimate related to manufacturer rebate receivables |
|
15,068 |
|
|
- |
|
|
| Other |
|
4,740 |
|
|
3,283 |
|
|
| Adjusted EBITDA - continuing operations | $ |
505,905 |
|
$ |
437,665 |
|
|
| Percent of revenues - continuing operations |
|
2.06 |
% |
|
1.82 |
% |
|
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||
| SUPPLEMENTAL INFORMATION | |||||||
| ADJUSTED NET LOSS | |||||||
| (Dollars in thousands, except per share amounts) | |||||||
| (unaudited) | |||||||
Thirteen weeks ended February 26, 2022 |
Thirteen weeks ended February 27, 2021 |
||||||
| Net loss from continuing operations | $ |
(389,062 |
) |
$ |
(18,495 |
) |
|
| Add back - Income tax benefit |
|
(6,695 |
) |
|
(12,623 |
) |
|
| Loss before income taxes - continuing operations |
|
(395,757 |
) |
|
(31,118 |
) |
|
| Adjustments: | |||||||
| Amortization expense |
|
18,854 |
|
|
20,669 |
|
|
| LIFO charge (credit) |
|
414 |
|
|
(21,389 |
) |
|
| Goodwill and intangible asset impairment charges |
|
229,000 |
|
|
- |
|
|
| Merger and Acquisition-related costs |
|
678 |
|
|
9,413 |
|
|
| Restructuring-related costs |
|
9,948 |
|
|
13,456 |
|
|
| Gain on Bartell acquisition |
|
- |
|
|
(47,705 |
) |
|
| Change in estimate related to manufacturer rebate receivables |
|
15,068 |
|
|
- |
|
|
| Adjusted loss before income taxes - continuing operations |
|
(121,795 |
) |
|
(56,674 |
) |
|
| Adjusted income tax benefit (a) |
|
(33,238 |
) |
|
(14,905 |
) |
|
| Adjusted net loss from continuing operations | $ |
(88,557 |
) |
$ |
(41,769 |
) |
|
| Adjusted net loss per diluted share - continuing operations: | |||||||
| Numerator for adjusted net loss per diluted share: | |||||||
| Adjusted net loss from continuing operations | $ |
(88,557 |
) |
$ |
(41,769 |
) |
|
| Denominator: | |||||||
| Basic and diluted weighted average shares |
|
54,208 |
|
|
53,812 |
|
|
| Net loss from continuing operations per diluted share - continuing operations | $ |
(7.18 |
) |
$ |
(0.34 |
) |
|
| Adjusted net loss per diluted share - continuing operations | $ |
(1.63 |
) |
$ |
(0.78 |
) |
|
(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 February 26, 2022 and February 27, 2021, respectively. |
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||
| SUPPLEMENTAL INFORMATION | |||||||
| ADJUSTED NET LOSS | |||||||
| (Dollars in thousands, except per share amounts) | |||||||
| (unaudited) | |||||||
| Fifty-two weeks ended February 26, 2022 |
Fifty-two weeks ended February 27, 2021 |
||||||
| Net loss from continuing operations | $ |
(538,478 |
) |
$ |
(100,070 |
) |
|
| Add back - Income tax benefit |
|
(3,780 |
) |
|
(20,157 |
) |
|
| Loss before income taxes - continuing operations |
|
(542,258 |
) |
|
(120,227 |
) |
|
| Adjustments: | |||||||
| Amortization expense |
|
78,047 |
|
|
89,020 |
|
|
| LIFO charge (credit) |
|
1,314 |
|
|
(51,692 |
) |
|
| Goodwill and intangible asset impairment charges |
|
229,000 |
|
|
29,852 |
|
|
| Loss (gain) on debt modifications and retirements, net |
|
3,235 |
|
|
(5,274 |
) |
|
| Merger and Acquisition-related costs |
|
12,797 |
|
|
10,549 |
|
|
| Restructuring-related costs |
|
35,121 |
|
|
84,552 |
|
|
| Loss (gain) on Bartell acquisition |
|
5,346 |
|
|
(47,705 |
) |
|
| Change in estimate related to manufacturer rebate receivables |
|
15,068 |
|
|
- |
|
|
| Litigation settlements |
|
50,212 |
|
|
- |
|
|
| Adjusted loss before income taxes - continuing operations |
|
(112,118 |
) |
|
(10,925 |
) |
|
| Adjusted income tax benefit (a) |
|
(30,597 |
) |
|
(2,873 |
) |
|
| Adjusted net loss from continuing operations | $ |
(81,521 |
) |
$ |
(8,052 |
) |
|
| Adjusted net loss per diluted share - continuing operations: | |||||||
| Numerator for adjusted net loss per diluted share: | |||||||
| Adjusted net loss from continuing operations | $ |
(81,521 |
) |
$ |
(8,052 |
) |
|
| Denominator: | |||||||
| Basic and diluted weighted average shares |
|
54,055 |
|
|
53,653 |
|
|
| Net loss from continuing operations per diluted share - continuing operations | $ |
(9.96 |
) |
$ |
(1.87 |
) |
|
| Adjusted net loss per diluted share - continuing operations | $ |
(1.51 |
) |
$ |
(0.15 |
) |
|
(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 fifty-two weeks ended February 26, 2022 and February 27, 2021, 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 February 26, 2022 |
Thirteen weeks ended February 27, 2021 |
||||||
| Reconciliation of adjusted EBITDA gross profit: | |||||||
| Revenues | $ |
4,433,408 |
|
$ |
4,114,485 |
|
|
| Gross Profit |
|
1,178,542 |
|
|
1,032,634 |
|
|
| Addback: | |||||||
| LIFO charge (credit) |
|
414 |
|
|
(21,389 |
) |
|
| Depreciation and amortization (cost of goods sold portion only) |
|
3,339 |
|
|
1,915 |
|
|
| Restructuring-related costs - SKU optimization charges |
|
- |
|
|
(4,824 |
) |
|
| Other |
|
2,849 |
|
|
668 |
|
|
| Adjusted EBITDA gross profit - continuing operations | $ |
1,185,144 |
|
$ |
1,009,004 |
|
|
| Percent of revenues - continuing operations |
|
26.73 |
% |
|
24.52 |
% |
|
| Reconciliation of adjusted EBITDA selling, general and administrative expenses: | |||||||
| Revenues | $ |
4,433,408 |
|
$ |
4,114,485 |
|
|
| Selling, general and administrative expenses |
|
1,151,411 |
|
|
1,093,074 |
|
|
| Less: | |||||||
| Depreciation and amortization (SG&A portion only) |
|
57,311 |
|
|
61,861 |
|
|
| Stock-based compensation expense |
|
3,990 |
|
|
3,809 |
|
|
| Merger and Acquisition-related costs |
|
678 |
|
|
9,413 |
|
|
| Restructuring-related costs |
|
4,286 |
|
|
12,641 |
|
|
| Other |
|
2,421 |
|
|
2,363 |
|
|
| Adjusted EBITDA selling, general and administrative expenses - continuing operations | $ |
1,082,725 |
|
$ |
1,002,987 |
|
|
| Percent of revenues - continuing operations |
|
24.42 |
% |
|
24.38 |
% |
|
| Adjusted EBITDA - continuing operations | $ |
102,419 |
|
$ |
6,017 |
|
|
| 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) | |||||||
| Fifty-two weeks ended February 26, 2022 |
Fifty-two weeks ended February 27, 2021 |
||||||
| Reconciliation of adjusted EBITDA gross profit: | |||||||
| Revenues | $ |
17,494,816 |
|
$ |
16,365,260 |
|
|
| Gross Profit |
|
4,722,075 |
|
|
4,255,791 |
|
|
| Addback: | |||||||
| LIFO charge (credit) |
|
1,314 |
|
|
(51,692 |
) |
|
| Depreciation and amortization (cost of goods sold portion only) |
|
9,875 |
|
|
8,690 |
|
|
| Restructuring-related costs - SKU optimization charges |
|
- |
|
|
20,939 |
|
|
| Other |
|
3,768 |
|
|
2,472 |
|
|
| Adjusted EBITDA gross profit - continuing operations | $ |
4,737,032 |
|
$ |
4,236,200 |
|
|
| Percent of revenues - continuing operations |
|
27.08 |
% |
|
25.89 |
% |
|
| Reconciliation of adjusted EBITDA selling, general and administrative expenses: | |||||||
| Revenues | $ |
17,494,816 |
|
$ |
16,365,260 |
|
|
| Selling, general and administrative expenses |
|
4,656,776 |
|
|
4,299,152 |
|
|
| Less: | |||||||
| Depreciation and amortization (SG&A portion only) |
|
234,247 |
|
|
261,295 |
|
|
| Stock-based compensation expense |
|
12,282 |
|
|
11,594 |
|
|
| Merger and Acquisition-related costs |
|
12,797 |
|
|
10,549 |
|
|
| Restructuring-related costs |
|
12,237 |
|
|
54,633 |
|
|
| Litigation settlements |
|
34,448 |
|
|
- |
|
|
| Other |
|
6,366 |
|
|
4,777 |
|
|
| Adjusted EBITDA selling, general and administrative expenses - continuing operations | $ |
4,344,399 |
|
$ |
3,956,304 |
|
|
| Percent of revenues - continuing operations |
|
24.83 |
% |
|
24.18 |
% |
|
| Adjusted EBITDA - continuing operations | $ |
392,633 |
|
$ |
279,896 |
|
|
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||
| SUPPLEMENTAL INFORMATION | |||||||
| RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED EBITDA GUIDANCE | |||||||
| YEAR ENDING MARCH 4, 2023 | |||||||
| (In thousands) | |||||||
| (unaudited) | |||||||
| Guidance Range | |||||||
| Low | High | ||||||
| Total Revenues | $ |
23,100,000 |
|
$ |
23,500,000 |
|
|
| Pharmacy Services Segment Revenues | $ |
5,450,000 |
|
$ |
5,550,000 |
|
|
| Gross Capital Expenditures | $ |
250,000 |
|
$ |
250,000 |
|
|
| Reconciliation of net loss to adjusted EBITDA: | |||||||
| Net loss | $ |
(210,000 |
) |
$ |
(167,000 |
) |
|
| Adjustments: | |||||||
| Interest expense |
|
200,000 |
|
|
200,000 |
|
|
| Income tax benefit |
|
(15,000 |
) |
|
(18,000 |
) |
|
| Depreciation and amortization |
|
300,000 |
|
|
300,000 |
|
|
| LIFO charge |
|
15,000 |
|
|
15,000 |
|
|
| Facility exit and impairment charges |
|
98,000 |
|
|
98,000 |
|
|
| Restructuring-related costs |
|
59,000 |
|
|
59,000 |
|
|
| Gain on sale of assets, net |
|
(15,000 |
) |
|
(15,000 |
) |
|
| Other |
|
28,000 |
|
|
28,000 |
|
|
| Adjusted EBITDA | $ |
460,000 |
|
$ |
500,000 |
|
|
| RITE AID CORPORATION AND SUBSIDIARIES | |||||||
| SUPPLEMENTAL INFORMATION | |||||||
| RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED NET LOSS GUIDANCE | |||||||
| YEAR ENDING MARCH 4, 2023 | |||||||
| (In thousands) | |||||||
| (unaudited) | |||||||
| Guidance Range | |||||||
| Low | High | ||||||
| Net loss | $ |
(210,000 |
) |
$ |
(167,000 |
) |
|
| Add back - income tax benefit |
|
(15,000 |
) |
|
(18,000 |
) |
|
| Loss before income taxes |
|
(225,000 |
) |
|
(185,000 |
) |
|
| Adjustments: | |||||||
| Amortization expense |
|
71,000 |
|
|
71,000 |
|
|
| LIFO charge |
|
15,000 |
|
|
15,000 |
|
|
| Restructuring-related costs |
|
59,000 |
|
|
59,000 |
|
|
| Adjusted loss before adjusted income taxes |
|
(80,000 |
) |
|
(40,000 |
) |
|
| Adjusted income tax benefit |
|
(22,000 |
) |
|
(11,000 |
) |
|
| Adjusted net loss | $ |
(58,000 |
) |
$ |
(29,000 |
) |
|
| Diluted adjusted net loss per share | $ |
(1.06 |
) |
$ |
(0.53 |
) |
|
