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Rite Aid Reports Net Income of $71.5 Million and Adjusted EBITDA of $282.3 Million for Third Quarter Fiscal 2014



  Rite Aid Reports Net Income of $71.5 Million and Adjusted EBITDA of $282.3
  Million for Third Quarter Fiscal 2014

  * Third Quarter Net Income of $71.5 million, Compared to Prior Year’s Third
    Quarter Net Income of $61.9 million

  * Third Quarter Net Income of $0.04 per Diluted Share, Compared to Prior
    Year’s Third Quarter Net Income of $0.07 per Diluted Share
  * Current Quarter Net Income per Share Negatively Impacted by $0.03 per
    Share Due to the Redemption of the Company’s Series G and H Convertible
    Preferred Stock
  * Third Quarter Adjusted EBITDA of $282.3 Million Compared to Adjusted
    EBITDA of $295.3 Million in Prior Year’s Third Quarter;

  * Prior Year’s Third Quarter Adjusted EBITDA Includes an $18.1 Million
    Benefit Related to the Settlement of Interchange Fee Litigation.
  * Rite Aid Updates Fiscal 2014 Outlook

Business Wire

CAMP HILL, Pa. -- December 19, 2013

Rite Aid Corporation (NYSE:RAD) today reported operating results for its
fiscal third quarter ended Nov. 30, 2013. The company reported revenues of
$6.4 billion, net income of $71.5 million or $0.04 per diluted share, and
Adjusted EBITDA of $282.3 million, or 4.4 percent of revenues. Prior year’s
results included an $18.1 million or $0.02 per diluted share benefit from the
settlement of interchange fee litigation. Current year earnings per diluted
share were negatively impacted by $0.03 per share due to the redemption of the
Company’s Series G and Series H Convertible Preferred stock on Sept. 30, 2013.

“Our solid third quarter results were driven by the continued success of our
key wellness initiatives, specifically the strong start to our flu
immunization campaign, and the completion of additional Wellness stores, which
now represent nearly a quarter of all Rite Aid stores,” said Rite Aid Chairman
and CEO John Standley.

“Our team of dedicated Rite Aid associates worked together to execute our
strategy and deliver growth in same-store prescription counts, increased
same-store sales and net income of more than $71 million,” he added. “These
results reflect our continued progress in building our unique brand of health,
wellness and customer engagement.”

Third Quarter Summary

Revenues for the 13-week quarter were $6.4 billion versus revenues of $6.2
billion in the prior year’s third quarter. Revenues increased 1.9 percent
primarily as a result of an increase in pharmacy same store sales.

Same store sales for the quarter increased 2.3 percent over the prior year’s
13-week period, consisting of a 3.5 percent increase in pharmacy sales,
partially offset by a 0.2 percent decrease in front end sales. Pharmacy sales
included an approximate 88 basis point negative impact from new generic
introductions. The number of prescriptions filled in same stores increased 0.7
percent over the prior year period. Prescription sales accounted for 68.6
percent of total drugstore sales, and third party prescription revenue was
97.1 percent of pharmacy sales.

Net income was $71.5 million or $0.04 per diluted share compared to last
year’s third quarter net income of $61.9 million or $0.07 per diluted share.
The improvement in net income resulted primarily from decreases in interest
expense and lease termination and impairment charges, partially offset by a
higher LIFO charge and an $18.1 million benefit from the settlement of
interchange fee litigation in the prior year third quarter. Diluted earnings
per share were negatively impacted by $0.03 due to the redemption of the
Company’s Series G and Series H Convertible Preferred Stock on Sept. 30, 2013,
as previously announced.

Adjusted EBITDA (which is reconciled to net income on the attached table) was
$282.3 million or 4.4 percent of revenues for the third quarter compared to
$295.3 million or 4.7 percent of revenues for the like period last year. Prior
year Adjusted EBITDA included an $18.1 million benefit from the settlement of
interchange fee litigation. The current quarter’s Adjusted EBITDA benefited
from an increase in pharmacy gross profit, driven by script count growth, and
strong SG&A expense control, offset by a decrease in front-end gross profit.

In the third quarter, the company relocated four stores and remodeled 94
stores, bringing the total number of wellness stores chainwide to 1,117. The
company closed nine stores, resulting in a total store count of 4,595 at the
end of the third quarter.

Rite Aid Updates Fiscal 2014 Guidance

Rite Aid has updated its fiscal 2014 guidance with sales expected to be
between $25.3 billion and $25.425 billion and same store sales to range from
an increase of 0.35 percent to 0.85 percent compared to fiscal 2013. Adjusted
EBITDA (which is reconciled to net income on the attached table) guidance is
now expected to be between $1.250 billion and $1.280 billion and net income is
now expected to be between $204.0 million or $0.17 per diluted share and
$259.0 million or $0.23 per diluted share. Capital expenditures are expected
to be $415.0 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 simulcast via the
internet and can be accessed through the websites www.riteaid.com in the
conference call section of investor information and www.StreetEvents.com.
Slides related to materials discussed on the call will be available on both
sites. A playback of the call will be available on both sites starting at 12
p.m. Eastern Time today. A playback of the call will also be available by
telephone beginning at 12 p.m. Eastern Time today until 11:59 p.m. Eastern
Time on Dec. 21, 2013. The playback number is 1-855-859-2056 from within the
U.S. and Canada or 1-404-537-3406 from outside the U.S. and Canada with the
eight-digit reservation number 18263517.

Rite Aid is one of the nation’s leading drugstore chains with 4,595 stores in
31 states and the District of Columbia. Information about Rite Aid, including
corporate background and press releases, is available through Rite Aid’s
website at www.riteaid.com.

Statements, including guidance, 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. 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,
our high level of indebtedness and our ability to make interest and principal
payments on our debt and satisfy the other covenants contained in our debt
agreements, general economic, market and competitive conditions, our ability
to improve the operating performance of our stores in accordance with our long
term strategy, 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,
outcomes of legal and regulatory matters and changes in legislation or
regulations, including healthcare reform. These and other risks, assumptions
and uncertainties are 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, which you are encouraged to read.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially
from those indicated or anticipated by such forward-looking statements.
Accordingly, you are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date they are made.
Rite Aid expressly disclaims any current intention to update publicly any
forward-looking statement after the distribution of this release, whether as a
result of new information, future events, changes in assumptions or otherwise.

See the attached table for a reconciliation of a non-GAAP financial measure,
Adjusted EBITDA to net income (loss), the most comparable GAAP financial
measure. We define Adjusted EBITDA as net income (loss) excluding the impact
of income taxes (and any corresponding adjustments to tax indemnification
asset), interest expense, depreciation and amortization, LIFO adjustments,
charges or credits for facility closing and impairment, inventory write-downs
related to store closings, stock-based compensation expense, debt retirements,
sale of assets and investments, revenue deferrals related to our customer
loyalty program and other items.

 
RITE AID CORPORATION AND SUBSIDIARIES
                                                               
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(unaudited)
                                                                              
                                                                              
                                          November 30, 2013     March 2, 2013
ASSETS
Current assets:
Cash and cash equivalents                 $  183,212            $ 129,452
Accounts receivable, net                     850,249              929,476
Inventories, net of LIFO reserve of          3,301,103            3,154,742
$975,241 and $915,241
Prepaid expenses and other current           111,689              195,377     
assets
Total current assets                         4,446,253            4,409,047
Property, plant and equipment, net           1,957,584            1,895,650
Other intangibles, net                       438,281              464,404
Other assets                                 296,049              309,618     
Total assets                              $  7,138,167          $ 7,078,719   
                                                                              
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current maturities of long-term debt      $  47,753             $ 37,311
and lease financing obligations
Accounts payable                             1,397,093            1,384,644
Accrued salaries, wages and other            1,120,238            1,156,315   
current liabilities
Total current liabilities                    2,565,084            2,578,270
Long-term debt, less current                 5,825,816            5,904,370
maturities
Lease financing obligations, less            78,857               91,850
current maturities
Other noncurrent liabilities                 897,235              963,663     
Total liabilities                            9,366,992            9,538,153
                                                                              
Commitments and contingencies                -                    -
Stockholders' deficit:
Preferred stock - Series G                   -                    1
Preferred stock - Series H                   -                    182,097
Common stock                                 965,411              904,268
Additional paid-in capital                   4,434,570            4,280,831
Accumulated deficit                          (7,571,225  )        (7,765,262 )
Accumulated other comprehensive loss         (57,581     )        (61,369    )
Total stockholders' deficit                  (2,228,825  )        (2,459,434 )
Total liabilities and stockholders'       $  7,138,167          $ 7,078,719   
deficit
                                                                              

                                                                            
RITE AID CORPORATION AND SUBSIDIARIES
                                                         
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)
                                                                            
                                                                            
                                 Thirteen weeks ended     Thirteen weeks ended

                                 November 30, 2013        December 1, 2012
Revenues                         $    6,357,732           $    6,237,847
Costs and expenses:
Cost of goods sold                    4,557,066                4,426,526
Selling, general and                  1,632,299                1,612,198
administrative expenses
Lease termination and                 1,672                    14,366
impairment charges
Interest expense                      102,819                  128,371
Loss on debt retirements,             271                      -
net
Gain on sale of assets, net           (9,331      )            (6,262      )
                                                                            
                                      6,284,796                6,175,199    
                                                                            
Income before income taxes            72,936                   62,648
Income tax expense                    1,388                    777          
Net income                       $    71,548              $    61,871       
                                                                            
Basic and diluted earnings
per share:
                                                                            
Numerator for earnings per
share:
Net income                       $    71,548              $    61,871
Accretion of redeemable               (26         )            (26         )
preferred stock
Cumulative preferred stock            (2,814      )            (2,651      )
dividends
Conversion of Series G and H          (25,603     )            -            
preferred stock
Income attributable to                43,105                   59,194
common stockholders - basic
Add back - Interest on                -                        1,334        
convertible notes
Income attributable to
common stockholders -            $    43,105              $    60,528       
diluted
                                                                            
                                                                            
                                                                            
Denominator:
Basic weighted average                938,994                  891,031
shares
Outstanding options and               48,843                   1,977
restricted shares, net
Convertible notes                     -                        24,800       
                                                                            
Diluted weighted average              987,837                  917,808      
shares
                                                                            
Basic income per share           $    0.05                $    0.07
Diluted income per share         $    0.04                $    0.07
                                                                            

 
RITE AID CORPORATION AND SUBSIDIARIES
                                                            
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)
                                                                             
                                                                             
                                 Thirty-nine weeks ended     Thirty-nine weeks
                                                             ended
                                 November 30, 2013
                                                             December 1, 2012
Revenues                         $    18,928,954             $  18,937,018
Costs and expenses:
Cost of goods sold                    13,490,936                13,666,505
Selling, general and                  4,844,491                 4,918,433
administrative expenses
Lease termination and                 24,034                    34,292
impairment charges
Interest expense                      322,599                   388,013
Loss on debt retirements,             62,443                    17,842
net
Gain on sale of assets, net           (16,396       )           (19,267     )
                                                                             
                                      18,728,107                19,005,818   
                                                                             
Income (loss) before income           200,847                   (68,800     )
taxes
Income tax expense (benefit)          6,810                     (63,818     )
Net income (loss)                $    194,037                $  (4,982      )
                                                                             
Basic and diluted earnings
(loss) per share:
                                                                             
Numerator for earnings
(loss) per share:
Net income (loss)                $    194,037                $  (4,982      )
Accretion of redeemable               (77           )           (77         )
preferred stock
Cumulative preferred stock            (8,318        )           (7,837      )
dividends
Conversion of Series G and H          (25,603       )           -            
preferred stock
Income (loss) attributable
to common stockholders -         $    160,039                $  (12,896     )
basic and diluted
                                                                             
                                                                             
                                                                             
Denominator:
Basic weighted average                911,608                   889,187
shares
Outstanding options and               41,227                    -            
restricted shares, net
                                                                             
Diluted weighted average              952,835                   889,187      
shares
                                                                             
Basic income (loss) per          $    0.18                   $  (0.01       )
share
Diluted income (loss) per        $    0.17                   $  (0.01       )
share
                                                                             

 
RITE AID CORPORATION AND SUBSIDIARIES
                                                             
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(unaudited)
                                                                     
                                                                     
                                     Thirteen weeks ended     Thirteen weeks
                                                              ended
                                     November 30, 2013
                                                              December 1, 2012
Net income                           $       71,548           $     61,871
Other comprehensive income:
Defined benefit pension plans:
Amortization of prior service
cost, net transition obligation
and net actuarial losses                     1,263                  1,020
included in net periodic pension
cost
Total other comprehensive income             1,263                  1,020
Comprehensive income                 $       72,811           $     62,891
                                                                     

 
RITE AID CORPORATION AND SUBSIDIARIES
                                                      
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(unaudited)
                                                                          
                                                                          
                                 Thirty-nine weeks     Thirty-nine weeks ended
                                 ended
                                                       December 1, 2012
                                 November 30, 2013
Net income (loss)                $     194,037         $      (4,982     )
Other comprehensive income:
Defined benefit pension
plans:
Amortization of prior
service cost, net transition
obligation and net actuarial           3,788                  3,059       
losses included in net
periodic pension cost
Total other comprehensive              3,788                  3,059       
income
Comprehensive income (loss)      $     197,825         $      (1,923     )
                                                                          

 
RITE AID CORPORATION AND SUBSIDIARIES
                                                         
SUPPLEMENTAL OPERATING AND CASH FLOW INFORMATION
(Dollars in thousands, except per share amounts)
(unaudited)
                                                                            
                                                                            
                                 Thirteen weeks ended     Thirteen weeks ended

                                 November 30, 2013        December 1, 2012
                                                                            
SUPPLEMENTAL OPERATING
INFORMATION
                                                                            
Revenues                         $    6,357,732           $    6,237,847
Cost of goods sold                    4,557,066                4,426,526    
Gross profit                          1,800,666                1,811,321
LIFO charge                           25,000                   -            
FIFO gross profit                     1,825,666                1,811,321
                                                                            
Gross profit as a percentage          28.32       %            29.04       %
of revenues
LIFO charge as a percentage           0.39        %            0.00        %
of revenues
FIFO gross profit as a                28.72       %            29.04       %
percentage of revenues
                                                                            
Selling, general and                  1,632,299                1,612,198
administrative expenses
Selling, general and
administrative expenses as a          25.67       %            25.85       %
percentage of revenues
                                                                            
Cash interest expense                 98,838                   120,719
Non-cash interest expense             3,981                    7,652        
Total interest expense                102,819                  128,371
                                                                            
                                                                            
Adjusted EBITDA                       282,262                  295,284
Adjusted EBITDA as a                  4.44        %            4.73        %
percentage of revenues
                                                                            
Net income                            71,548                   61,871
Net income as a percentage            1.13        %            0.99        %
of revenues
                                                                            
Total debt                            5,952,426                6,152,411
Invested cash                         11,323                   167,241      
Total debt net of invested            5,941,103                5,985,170
cash
                                                                            
                                                                            
SUPPLEMENTAL CASH FLOW
INFORMATION
                                                                            
Payments for property, plant          84,419                   84,984
and equipment
Intangible assets acquired            28,954                   25,692       
Total cash capital                    113,373                  110,676
expenditures
Equipment received for                1,588                    504
noncash consideration
Equipment financed under              1,906                    2,017        
capital leases
Gross capital expenditures       $    116,867             $    113,197      
                                                                            

 
RITE AID CORPORATION AND SUBSIDIARIES
                                                            
SUPPLEMENTAL OPERATING AND CASH FLOW INFORMATION
(Dollars in thousands, except per share amounts)
(unaudited)
                                                                             
                                                                             
                                 Thirty-nine weeks ended     Thirty-nine weeks
                                                             ended
                                 November 30, 2013
                                                             December 1, 2012
                                                                             
SUPPLEMENTAL OPERATING
INFORMATION
                                                                             
Revenues                         $    18,928,954             $  18,937,018
Cost of goods sold                    13,490,936                13,666,505   
Gross profit                          5,438,018                 5,270,513
LIFO charge                           60,000                    27,502       
FIFO gross profit                     5,498,018                 5,298,015
                                                                             
Gross profit as a percentage          28.73         %           27.83       %
of revenues
LIFO charge as a percentage           0.32          %           0.15        %
of revenues
FIFO gross profit as a                29.05         %           27.98       %
percentage of revenues
                                                                             
Selling, general and                  4,844,491                 4,918,433
administrative expenses
Selling, general and
administrative expenses as a          25.59         %           25.97       %
percentage of revenues
                                                                             
Cash interest expense                 309,942                   364,929
Non-cash interest expense             12,657                    23,084       
Total interest expense                322,599                   388,013
                                                                             
                                                                             
Adjusted EBITDA                       968,629                   788,102
Adjusted EBITDA as a                  5.12          %           4.16        %
percentage of revenues
                                                                             
Net income (loss)                     194,037                   (4,982      )
Net income (loss) as a                1.03          %           -0.03       %
percentage of revenues
                                                                             
Total debt                            5,952,426                 6,152,411
Invested cash                         11,323                    167,241      
Total debt net of invested            5,941,103                 5,985,170
cash
                                                                             
                                                                             
SUPPLEMENTAL CASH FLOW
INFORMATION
                                                                             
Payments for property, plant          255,269                   233,195
and equipment
Intangible assets acquired            64,605                    45,659       
Total cash capital                    319,874                   278,854
expenditures
Equipment received for                1,588                     2,636
noncash consideration
Equipment financed under              15,023                    7,251        
capital leases
Gross capital expenditures       $    336,485                $  288,741      
                                                                             

 
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(In thousands)
                                                         
                                                                           
                                 Thirteen weeks ended     Thirteen weeks ended

                                 November 30, 2013        December 1, 2012
                                                                           
                                                                           
Reconciliation of net income
to adjusted EBITDA:
Net income                       $    71,548              $    61,871
Adjustments:
Interest expense                      102,819                  128,371
Income tax expense                    1,388                    777
Adjustments to tax                    (613       )             -
indemnification asset
Depreciation and                      101,188                  102,790
amortization
LIFO charge                           25,000                   -
Lease termination and                 1,672                    14,366
impairment charges
Stock-based compensation              4,117                    4,219
expense
Gain on sale of assets, net           (9,331     )             (6,262     )
Loss on debt retirements,             271                      -
net
Closed facility liquidation           1,058                    1,396
expense
Customer loyalty card                 (16,950    )             (11,746    )
program revenue deferral
Other                                 95                       (498       )
Adjusted EBITDA                  $    282,262             $    295,284     
Percent of revenues                   4.44       %             4.73       %
                                                                           

 
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(In thousands)
                                                            
                                                                            
                                       Thirty-nine weeks     Thirty-nine weeks
                                       ended                 ended

                                       November 30, 2013     December 1, 2012
                                                                            
                                                                            
Reconciliation of net income
(loss) to adjusted EBITDA:
Net income (loss)                      $   194,037           $   (4,982    )
Adjustments:
Interest expense                           322,599               388,013
Income tax expense (benefit)               6,810                 (63,818   )
Adjustments to tax indemnification         (1,840    )           60,237
asset
Depreciation and amortization              301,681               311,160
LIFO charge                                60,000                27,502
Lease termination and impairment           24,034                34,292
charges
Stock-based compensation expense           12,194                12,872
Gain on sale of assets, net                (16,396   )           (19,267   )
Loss on debt retirements, net              62,443                17,842
Closed facility liquidation                2,848                 4,263
expense
Severance costs                            -                     (72       )
Customer loyalty card program              (822      )           16,247
revenue deferral
Other                                      1,041                 3,813      
Adjusted EBITDA                        $   968,629           $   788,102    
Percent of revenues                        5.12      %           4.16      %
                                                                            

 
RITE AID CORPORATION AND SUBSIDIARIES
                                                         
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
                                                                           
                                                                           
                                 Thirteen weeks ended     Thirteen weeks ended

                                 November 30, 2013        December 1, 2012
                                                                           
                                                                           
OPERATING ACTIVITIES:
Net income                       $    71,548              $    61,871
Adjustments to reconcile to
net cash provided by
operating activities:
Depreciation and                      101,188                  102,790
amortization
Lease termination and                 1,672                    14,366
impairment charges
Gain from lease termination           (8,750      )            -
LIFO charge                           25,000                   -
Gain on sale of assets, net           (9,331      )            (6,262     )
Stock-based compensation              4,117                    4,219
expense
Loss on debt retirements,             271                      -
net
Changes in operating assets
and liabilities:
Accounts receivable                   76,532                   9,343
Inventories                           (110,482    )            (74,724    )
Accounts payable                      (11,040     )            172,614
Other assets and                      106,661                  (15,697    )
liabilities, net
Net cash provided by                  247,386                  268,520
operating activities
INVESTING ACTIVITIES:
Payments for property, plant          (84,419     )            (84,984    )
and equipment
Intangible assets acquired            (28,954     )            (25,692    )
Proceeds from sale-leaseback          -                        2,405
transactions
Proceeds from dispositions            4,459                    11,844
of assets and investments
Proceeds from lease                   8,750                    -
termination
Proceeds from insured loss            2,758                    -           
Net cash used in investing            (97,406     )            (96,427    )
activities
FINANCING ACTIVITIES:
Net payments to revolver              (87,000     )            -
Principal payments on                 (10,557     )            (7,824     )
long-term debt
Change in zero balance cash           (4,842      )            4,974
accounts
Net proceeds from the                 12,618                   99
issuance of common stock
Payments for the repurchase           (21,034     )            -
of preferred stock
Deferred financing costs              (120        )            (26        )
paid
Net cash used in financing            (110,935    )            (2,777     )
activities
Increase in cash and cash             39,045                   169,316
equivalents
Cash and cash equivalents,            144,167                  94,325      
beginning of period
Cash and cash equivalents,       $    183,212             $    263,641     
end of period
                                                                           

 
RITE AID CORPORATION AND SUBSIDIARIES
                                                            
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
                                                                             
                                                                             
                                 Thirty-nine weeks ended     Thirty-nine weeks
                                                             ended
                                 November 30, 2013
                                                             December 1, 2012
                                                                             
                                                                             
OPERATING ACTIVITIES:
Net income (loss)                $    194,037                $   (4,982     )
Adjustments to reconcile to
net cash provided by
operating activities:
Depreciation and                      301,681                    311,160
amortization
Lease termination and                 24,034                     34,292
impairment charges
Gain from lease termination           (8,750        )            -
LIFO charge                           60,000                     27,502
Gain on sale of assets, net           (16,396       )            (19,267    )
Stock-based compensation              12,194                     12,872
expense
Loss on debt retirements,             62,443                     17,842
net
Changes in operating assets
and liabilities:
Accounts receivable                   79,895                     95,732
Inventories                           (206,408      )            13,055
Accounts payable                      25,160                     55,498
Other assets and                      (19,972       )            55,533      
liabilities, net
Net cash provided by                  507,918                    599,237
operating activities
INVESTING ACTIVITIES:
Payments for property, plant          (255,269      )            (233,195   )
and equipment
Intangible assets acquired            (64,605       )            (45,659    )
Proceeds from sale-leaseback          3,989                      6,355
transactions
Proceeds from dispositions            14,157                     27,744
of assets and investments
Proceeds from lease                   8,750                      -
termination
Proceeds from insured loss            6,138                      -           
Net cash used in investing            (286,840      )            (244,755   )
activities
FINANCING ACTIVITIES:
Proceeds from issuance of             1,310,000                  426,263
long-term debt
Net payments to revolver              (75,000       )            (136,000   )
Principal payments on                 (1,332,528    )            (479,147   )
long-term debt
Change in zero balance cash           (10,161       )            (43,507    )
accounts
Net proceeds from the                 24,881                     1,103
issuance of common stock
Payments for the repurchase           (21,034       )            -
of preferred stock
Financing fees paid for               (45,636       )            (11,069    )
early debt redemption
Deferred financing costs              (17,840       )            (10,769    )
paid
Net cash used in financing            (167,318      )            (253,126   )
activities
Increase in cash and cash             53,760                     101,356
equivalents
Cash and cash equivalents,            129,452                    162,285     
beginning of period
Cash and cash equivalents,       $    183,212                $   263,641     
end of period
                                                                             

 
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET INCOME GUIDANCE TO ADJUSTED EBITDA GUIDANCE
YEAR ENDING MARCH 1, 2014
(In thousands, except per share amounts)
                                                               
                                                                              
                                             Guidance Range
                                             Low                High
                                                                              
Sales                                        $ 25,300,000       $ 25,425,000
                                                                              
Same store sales                               0.35       %       0.85       %
                                                                              
Gross capital expenditures                   $ 415,000          $ 415,000
                                                                              
Reconciliation of net income to adjusted
EBITDA:
Net income                                   $ 204,000          $ 259,000
Adjustments:
Interest expense                               427,000            427,000
Income tax benefit                             (25,000    )       (25,000    )
Adjustments to tax indemnification asset       30,000             30,000
Depreciation and amortization                  405,000            405,000
LIFO charge                                    90,000             70,000
Store closing and impairment charges           50,000             45,000
Stock-based compensation expense               16,000             16,000
Loss on debt retirement                        62,000             62,000
Customer loyalty card program revenue          3,000              3,000
deferral
Other                                          (12,000    )       (12,000    )
Adjusted EBITDA                              $ 1,250,000        $ 1,280,000   
                                                                              
                                                                              
Diluted income per share                     $ 0.17             $ 0.23
                                                                              

Contact:

Rite Aid Corporation
INVESTORS:
Matt Schroeder, 717-214-8867
investor@riteaid.com
or
MEDIA:
Susan Henderson, 717-730-7766
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