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Rite Aid Corporation Reports Fiscal 2023 First Quarter Results

June 23, 2022
  • Retail Comparable Store Prescriptions Increased 0.9 Percent – Comparable Store Non-COVID Acute Prescriptions Increased 11.9 Percent
  • Revenues of $6.01 billion, Compared to Prior Year Revenues of $6.16 billion
  • Net Loss per Share of $2.03, Compared to Prior Year Net Loss per Share of $0.24
  • Adjusted Net Loss per Share of $0.60, Compared to Prior Year Adjusted Net Income per Share of $0.38, Driven by Non-Cash Impairment Charges and Cycling Prior Year COVID Vaccination Benefit
  • Adjusted EBITDA of $100.1 million, Compared to the Prior Year Adjusted EBITDA of $138.9 million
  • Increases Fiscal 2023 Revenue and Maintains Fiscal 2023 Adjusted EBITDA Guidance

Rite Aid Corporation (NYSE: RAD) today reported operating results for its first fiscal quarter ended May 28, 2022.

“We continue to make strides on our journey to transform Rite Aid and define the modern pharmacy. In the first quarter we increased our non-COVID prescriptions, reduced SG&A, built momentum at Elixir and delivered solid results across the business. The entire Rite Aid team looks forward to advancing our pharmacists’ role in improving health outcomes,” said Heyward Donigan, president and CEO.

Consolidated First Quarter Summary

(dollars in thousands)

 

Thirteen Week Period Ended

 

 

 

May 28, 2022

 

 

May 29, 2021

Revenues

 

$

6,014,583

 

$

6,160,985

Net loss

 

 

(110,191)

 

 

(13,057)

Adjusted EBITDA

 

 

100,130

 

 

138,877

For the first quarter the company reported a net loss of $110.2 million, or $2.03 loss per share, Adjusted Net Loss of $32.8 million, or $0.60 loss per share, and Adjusted EBITDA of $100.1 million, or 1.7 percent of revenues.

Revenues for the quarter were $6.01 billion compared to revenues of $6.16 billion in the prior year’s quarter.

First quarter net loss was $110.2 million, or $2.03 per share, compared to last year’s first quarter net loss of $13.1 million, or $0.24 per share. First quarter adjusted net loss was $32.8 million, or $0.60 per share, compared to last year’s first quarter adjusted net income of $20.9 million or $0.38 per share. The increase in adjusted net loss is due primarily to higher facility exit and impairment charges driven by the Company’s previously announced store closure decisions and a decrease in Adjusted EBITDA. These items were partially offset by an increase in gain on sale of assets resulting from script file sales of certain of the store closures.

Retail Pharmacy Segment

(dollars in thousands)

 

Thirteen Week Period Ended

 

 

 

May 28, 2022

 

 

May 29, 2021

Revenues

 

$

4,345,356

 

$

4,351,682

Adjusted EBITDA

 

 

73,682

 

 

94,914

Retail Pharmacy Segment revenues decreased 0.1 percent over the prior year quarter, driven by a reduction in COVID vaccine and testing revenue as well as store closures, offset by an increase in non-COVID prescriptions. Same store sales for the first quarter increased 4.6 percent over the prior year period, consisting of a 6.6 percent increase in pharmacy sales, partially offset by a 0.5 percent decrease in front-end sales. Front-end same store sales, excluding cigarettes and tobacco products, were flat. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, increased 0.9 percent over the prior year period. Total non-COVID same store prescriptions increased 3.7 percent, with same store maintenance prescriptions increasing 1.4 percent and other same store acute prescriptions increasing 11.9 percent. Prescription sales accounted for 70.8 percent of total drugstore sales. Total store count at the end of the first quarter was 2,361.

Retail Pharmacy Segment Adjusted EBITDA was $73.7 million, or 1.7 percent of revenues, for the first quarter compared to last year’s first quarter Adjusted EBITDA of $94.9 million, or 2.2 percent of revenues. The decline in Adjusted EBITDA was due to decreased gross profit, partially offset by a decrease in Adjusted EBITDA selling, general and administrative (SG&A) expenses of $40.5 million. Gross profit was negatively impacted by the decline in COVID-19 vaccinations and testing. The gross profit headwind from reduced COVID related services was partially offset by an increase in prescriptions filled and improved front end gross margin. SG&A expenses benefited from lower payroll, occupancy and other operating costs due to store closures and cost control initiatives.

Pharmacy Services Segment

(dollars in thousands)

 

Thirteen Week Period Ended

 

 

 

May 28, 2022

 

 

May 29, 2021

Revenues

 

$

1,725,857

 

$

1,872,282

Adjusted EBITDA

 

 

26,448

 

 

43,963

Pharmacy Services Segment revenues were $1.7 billion for the quarter, a decrease of 7.8 percent compared to the prior year quarter. The decrease in revenues was primarily the result of a planned decrease in Elixir Insurance membership and a previously announced client loss due to industry consolidation, offset by higher retained rebates from our new rebate aggregation arrangement and increased utilization of higher cost drugs.

Pharmacy Services Segment Adjusted EBITDA was $26.4 million, or 1.5 percent of revenues, for the first quarter compared to last year’s first quarter Adjusted EBITDA of $44.0 million, or 2.4 percent of revenues. The reduction in Adjusted EBITDA resulted from the decline in revenues associated with lost clients, as discussed above, and an increase in the medical loss ratio at Elixir insurance, partially offset by higher retained rebates from our new rebate aggregation arrangement.

Outlook for Fiscal 2023

The Company has increased its outlook for Fiscal 2023 revenues, due to increased utilization of higher cost drugs at Elixir and is maintaining its guidance for Adjusted EBITDA.

Total revenues are expected to be between $23.6 billion and $24.0 billion in fiscal 2023. Retail Pharmacy Segment revenue is expected to be between $17.35 billion and $17.65 billion and Pharmacy Services Segment revenue is expected to be between $6.25 billion and $6.35 billion (net of any intercompany revenues to the Retail Pharmacy Segment).

Net loss is expected to be between $246.3 million and $203.3 million. Our estimates for net loss have increased due to increased impairment charges for closed stores and an increase in interest expense due to recent and anticipated interest rate increases throughout the year.

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 $(1.19) and $(0.66).

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 June 23, 2022 and ending at 11:59 p.m. Eastern Time on July 24, 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 2,300 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 and other contractual 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 and other contractual 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, non-recurring litigation and other contractual 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)
 
 
 
May 28, 2022 February 26, 2022
ASSETS
Current assets:
Cash and cash equivalents

$

56,060

 

$

39,721

 

Accounts receivable, net

 

1,449,745

 

 

1,343,496

 

Inventories, net of LIFO reserve of $487,173 and $487,173

 

1,974,759

 

 

1,959,389

 

Prepaid expenses and other current assets

 

88,860

 

 

106,749

 

Total current assets

 

3,569,424

 

 

3,449,355

 

Property, plant and equipment, net

 

985,121

 

 

989,167

 

Operating lease right-of-use assets

 

2,723,405

 

 

2,813,535

 

Goodwill

 

879,136

 

 

879,136

 

Other intangibles, net

 

282,950

 

 

291,196

 

Deferred tax assets

 

20,071

 

 

20,071

 

Other assets

 

89,666

 

 

86,543

 

Total assets

$

8,549,773

 

$

8,529,003

 

 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt and lease financing obligations

$

5,016

 

$

5,544

 

Accounts payable

 

1,461,238

 

 

1,571,261

 

Accrued salaries, wages and other current liabilities

 

787,591

 

 

780,632

 

Current portion of operating lease liabilities

 

574,392

 

 

575,651

 

Total current liabilities

 

2,828,237

 

 

2,933,088

 

Long-term debt, less current maturities

 

3,026,456

 

 

2,732,986

 

Long-term operating lease liabilities

 

2,526,607

 

 

2,597,090

 

Lease financing obligations, less current maturities

 

14,392

 

 

14,830

 

Other noncurrent liabilities

 

162,457

 

 

151,976

 

Total liabilities

 

8,558,149

 

 

8,429,970

 

 
Commitments and contingencies

 

-

 

 

-

 

Stockholders' equity:
Common stock

 

55,623

 

 

55,752

 

Additional paid-in capital

 

5,913,210

 

 

5,910,299

 

Accumulated deficit

 

(5,961,772

)

 

(5,851,581

)

Accumulated other comprehensive loss

 

(15,437

)

 

(15,437

)

Total stockholders' equity

 

(8,376

)

 

99,033

 

Total liabilities and stockholders' equity

$

8,549,773

 

$

8,529,003

 

 
RITE AID CORPORATION AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)
 
 
 
Thirteen weeks ended
May 28, 2022
Thirteen weeks ended
May 29, 2021
Revenues

$

6,014,583

 

$

6,160,985

 

Costs and expenses:
Cost of revenues

 

4,817,854

 

 

4,876,110

 

Selling, general and administrative expenses

 

1,217,929

 

 

1,245,362

 

Facility exit and impairment charges

 

66,571

 

 

8,831

 

Interest expense

 

48,119

 

 

49,121

 

Loss on debt retirements, net

 

-

 

 

396

 

Gain on sale of assets, net

 

(29,196

)

 

(6,558

)

 

 

6,121,277

 

 

6,173,262

 

 
Loss before income taxes

 

(106,694

)

 

(12,277

)

Income tax expense

 

3,497

 

 

780

 

Net loss

$

(110,191

)

$

(13,057

)

 
 
 
Basic and diluted loss per share:
 
Numerator for loss per share:
Net loss attributable to common stockholders - basic and diluted

$

(110,191

)

$

(13,057

)

 
 
 
Denominator:
Basic and diluted weighted average shares

 

54,348

 

 

53,852

 

 
 
Basic and diluted loss per share

$

(2.03

)

$

(0.24

)

RITE AID CORPORATION AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
 
 
 
Thirteen weeks ended
May 28, 2022
Thirteen weeks ended
May 29, 2021
 
 
OPERATING ACTIVITIES:
Net loss

$

(110,191

)

$

(13,057

)

Adjustments to reconcile to net cash (used in) provided by operating activities:
Depreciation and amortization

 

70,073

 

 

75,859

 

Facility exit and impairment charges

 

66,571

 

 

8,831

 

LIFO credit

 

-

 

 

(3,993

)

Change in allowances for uncollectible accounts receivable

 

3,763

 

 

-

 

Gain on sale of assets, net

 

(29,196

)

 

(6,558

)

Stock-based compensation expense

 

3,334

 

 

2,811

 

Loss on debt retirements, net

 

-

 

 

396

 

Changes in operating assets and liabilities:
Accounts receivable

 

(104,458

)

 

(149,487

)

Inventories

 

(15,827

)

 

11,918

 

Accounts payable

 

(137,572

)

 

50,527

 

Operating lease right-of-use assets and operating lease liabilities

 

(14,812

)

 

(5,909

)

Other assets

 

751

 

 

7,978

 

Other liabilities

 

15,327

 

 

34,559

 

Net cash (used in) provided by operating activities

 

(252,237

)

 

13,875

 

INVESTING ACTIVITIES:
Payments for property, plant and equipment

 

(73,176

)

 

(59,164

)

Intangible assets acquired

 

(12,248

)

 

(5,436

)

Proceeds from dispositions of assets and investments

 

30,839

 

 

2,448

 

Proceeds from sale-leaseback transactions

 

-

 

 

7,456

 

Net cash used in investing activities

 

(54,585

)

 

(54,696

)

FINANCING ACTIVITIES:
Net proceeds from revolver

 

291,000

 

 

39,000

 

Principal payments on long-term debt

 

(977

)

 

(91,941

)

Change in zero balance cash accounts

 

33,691

 

 

51,957

 

Financing fees paid for early debt redemption

 

-

 

 

(2

)

Payments for taxes related to net share settlement of equity awards

 

(553

)

 

(35

)

Deferred financing costs paid

 

-

 

 

(580

)

Net cash provided by (used in) financing activities

 

323,161

 

 

(1,601

)

Increase (decrease) in cash and cash equivalents

 

16,339

 

 

(42,422

)

Cash and cash equivalents, beginning of period

 

39,721

 

 

160,902

 

Cash and cash equivalents, end of period

$

56,060

 

$

118,480

 

 
RITE AID CORPORATION AND SUBSIDIARIES
 
SUPPLEMENTAL SEGMENT OPERATING INFORMATION
(Dollars in thousands)
(unaudited)
 
 
Thirteen weeks ended
May 28, 2022
Thirteen weeks ended
May 29, 2021
 
Retail Pharmacy Segment
Revenues (a)

$

4,345,356

 

$

4,351,682

 

Cost of revenues (a)

 

3,247,999

 

 

3,181,748

 

Gross profit

 

1,097,357

 

 

1,169,934

 

LIFO credit

 

-

 

 

(3,993

)

FIFO gross profit

 

1,097,357

 

 

1,165,941

 

Adjusted EBITDA gross profit

 

1,106,652

 

 

1,168,338

 

 
Gross profit as a percentage of revenues

 

25.25

%

 

26.88

%

LIFO credit as a percentage of revenues

 

0.00

%

 

-0.09

%

FIFO gross profit as a percentage of revenues

 

25.25

%

 

26.79

%

Adjusted EBITDA gross profit as a percentage of revenues

 

25.47

%

 

26.85

%

 
Selling, general and administrative expenses

 

1,117,214

 

 

1,156,039

 

Adjusted EBITDA selling, general and administrative expenses

 

1,032,970

 

 

1,073,424

 

Selling, general and administrative expenses as a percentage of revenues

 

25.71

%

 

26.57

%

Adjusted EBITDA selling, general and administrative expenses as a percentage of revenues

 

23.77

%

 

24.67

%

 
Cash interest expense

 

45,244

 

 

46,024

 

Non-cash interest expense

 

2,875

 

 

3,097

 

Total interest expense

 

48,119

 

 

49,121

 

 
Adjusted EBITDA

 

73,682

 

 

94,914

 

Adjusted EBITDA as a percentage of revenues

 

1.70

%

 

2.18

%

 
 
Pharmacy Services Segment
Revenues (a)

$

1,725,857

 

$

1,872,282

 

Cost of revenues (a)

 

1,626,485

 

 

1,757,341

 

Gross profit

 

99,372

 

 

114,941

 

 
Gross profit as a percentage of revenues

 

5.76

%

 

6.14

%

 
Adjusted EBITDA

 

26,448

 

 

43,963

 

Adjusted EBITDA as a percentage of revenues

 

1.53

%

 

2.35

%

 

(a) -

Revenues and cost of revenues include $56,630 and $62,979 of inter-segment activity for the thirteen weeks ended May 28, 2022 and May 29, 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
May 28, 2022
Thirteen weeks ended
May 29, 2021
 
 
Reconciliation of net loss to adjusted EBITDA:
Net loss

$

(110,191

)

$

(13,057

)

Adjustments:
Interest expense

 

48,119

 

 

49,121

 

Income tax expense

 

3,497

 

 

780

 

Depreciation and amortization

 

70,073

 

 

75,859

 

LIFO credit

 

-

 

 

(3,993

)

Facility exit and impairment charges

 

66,571

 

 

8,831

 

Loss on debt retirements, net

 

-

 

 

396

 

Merger and Acquisition-related costs

 

-

 

 

3,886

 

Stock-based compensation expense

 

3,334

 

 

2,811

 

Restructuring-related costs

 

22,646

 

 

5,932

 

Inventory write-downs related to store closings

 

7,955

 

 

472

 

Litigation and other contractual settlements

 

18,271

 

 

14,000

 

Gain on sale of assets, net

 

(29,196

)

 

(6,558

)

Other

 

(949

)

 

397

 

Adjusted EBITDA

$

100,130

 

$

138,877

 

Percent of revenues

 

1.66

%

 

2.25

%

 
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
ADJUSTED NET (LOSS) INCOME
(Dollars in thousands, except per share amounts)
(unaudited)
 
 
Thirteen weeks ended
May 28, 2022
Thirteen weeks ended
May 29, 2021
 
Net loss

$

(110,191

)

$

(13,057

)

Add back - Income tax expense

 

3,497

 

 

780

 

Loss before income taxes

 

(106,694

)

 

(12,277

)

 
Adjustments:
Amortization expense

 

20,626

 

 

20,460

 

LIFO credit

 

-

 

 

(3,993

)

Loss on debt retirements, net

 

-

 

 

396

 

Merger and Acquisition-related costs

 

-

 

 

3,886

 

Restructuring-related costs

 

22,646

 

 

5,932

 

Litigation and other contractual settlements

 

18,271

 

 

14,000

 

 
Adjusted (loss) income before income taxes

 

(45,151

)

 

28,404

 

 
Adjusted income tax (benefit) expense (a)

 

(12,322

)

 

7,470

 

Adjusted net (loss) income

$

(32,829

)

$

20,934

 

 
Adjusted net (loss) income per diluted share:
 
Numerator for adjusted net (loss) income per diluted share:
Adjusted net (loss) income

$

(32,829

)

$

20,934

 

 
 
 
Denominator:
Basic weighted average shares

 

54,348

 

 

53,852

 

Outstanding options and restricted shares, net

 

-

 

 

971

 

Diluted weighted average shares

 

54,348

 

 

54,823

 

 
Net loss per diluted share

$

(2.03

)

$

(0.24

)

 
Adjusted net (loss) income per diluted share

$

(0.60

)

$

0.38

 

 

(a)

The fiscal year 2023 and 2022 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 May 28, 2022 and May 29, 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
May 28, 2022
Thirteen weeks ended
May 29, 2021
 
 
Reconciliation of adjusted EBITDA gross profit:
Revenues

$

4,345,356

 

$

4,351,682

 

Gross Profit

 

1,097,357

 

 

1,169,934

 

Addback:
LIFO credit

 

-

 

 

(3,993

)

Depreciation and amortization (cost of goods sold portion only)

 

2,893

 

 

2,097

 

Other

 

6,402

 

 

300

 

Adjusted EBITDA gross profit

$

1,106,652

 

$

1,168,338

 

Percent of revenues

 

25.47

%

 

26.85

%

 
 
 
Reconciliation of adjusted EBITDA selling, general and administrative expenses:
Revenues

$

4,345,356

 

$

4,351,682

 

Selling, general and administrative expenses

 

1,117,214

 

 

1,156,039

 

Less:
Depreciation and amortization (SG&A portion only)

 

53,215

 

 

59,768

 

Stock-based compensation expense

 

3,102

 

 

2,771

 

Merger and Acquisition-related costs

 

-

 

 

3,886

 

Restructuring-related costs

 

17,371

 

 

1,621

 

Litigation and other contractual settlements

 

9,952

 

 

14,000

 

Other

 

604

 

 

569

 

Adjusted EBITDA selling, general and administrative
expenses

$

1,032,970

 

$

1,073,424

 

Percent of revenues

 

23.77

%

 

24.67

%

 
 
 
Adjusted EBITDA

$

73,682

 

$

94,914

 

 
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

$

23,600,000

 

$

24,000,000

 

 
Pharmacy Services Segment Revenues

$

6,250,000

 

$

6,350,000

 

 
Gross Capital Expenditures

$

250,000

 

$

250,000

 

 
 
Reconciliation of net loss to adjusted EBITDA:
Net loss

$

(246,300

)

$

(203,300

)

Adjustments:
Interest expense

 

210,000

 

 

210,000

 

Income tax benefit

 

(15,000

)

 

(18,000

)

Depreciation and amortization

 

290,000

 

 

290,000

 

LIFO charge

 

15,000

 

 

15,000

 

Facility exit and impairment charges

 

130,000

 

 

130,000

 

Restructuring-related costs

 

60,000

 

 

60,000

 

Litigation and other contractual settlements

 

18,300

 

 

18,300

 

Gain on sale of assets, net

 

(35,000

)

 

(35,000

)

Other

 

33,000

 

 

33,000

 

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

$

(246,300

)

$

(203,300

)

Add back - income tax benefit

 

(15,000

)

 

(18,000

)

Loss before income taxes

 

(261,300

)

 

(221,300

)

 
Adjustments:
Amortization expense

 

79,000

 

 

79,000

 

LIFO charge

 

15,000

 

 

15,000

 

Restructuring-related costs

 

60,000

 

 

60,000

 

Litigation and other contractual settlements

 

18,300

 

 

18,300

 

 
Adjusted loss before adjusted income taxes

 

(89,000

)

 

(49,000

)

 
Adjusted income tax benefit

 

(24,000

)

 

(13,000

)

Adjusted net loss

$

(65,000

)

$

(36,000

)

 
 
Diluted adjusted net loss per share

$

(1.19

)

$

(0.66

)

 

 

INVESTORS:
Byron Purcell
(717) 975-3710
investor@riteaid.com

MEDIA:
Joy Errico Seusing
(203) 970-5559
press@riteaid.com

Source: Rite Aid Corporation

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