Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Rite Aid Corporation Reports Fiscal 2022 Third Quarter Results By: Rite Aid Corporation via Business Wire December 21, 2021 at 12:38 PM EST Revenues from Continuing Operations Increased 1.8 Percent to $6.23 Billion Compared to Prior Year Third Quarter Revenues from Continuing Operations of $6.12 Billion Third Quarter Net Loss from Continuing Operations of $36.1 Million or $0.67 Per Share, Compared to the Prior Year Third Quarter Net Income of $4.3 Million or $0.08 Per Share Third Quarter Adjusted Net Income from Continuing Operations of $8.2 Million or $0.15 Per Share, Compared to the Prior Year Third Quarter Adjusted Net Income of $21.6 Million or $0.40 Per Share Third Quarter Adjusted EBITDA from Continuing Operations Increased 12.7 Percent to $154.8 Million, Compared to the Prior Year Third Quarter Adjusted EBITDA of $137.4 Million Rite Aid Raises Adjusted EBITDA Guidance for Fiscal 2022 Company Announces Rebate Aggregation Agreement between Elixir and Prime Therapeutics Company Announces Store Closure Plan to Reduce Costs and Improve Profitability Rite Aid Corporation (NYSE: RAD) today reported operating results for its third fiscal quarter ended November 27, 2021. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20211220005684/en/(Photo: Business Wire) For the third quarter, the company reported net loss from continuing operations of $36.1 million, or $0.67 loss per share, Adjusted net income from continuing operations of $8.2 million, or $0.15 income per share, and Adjusted EBITDA from continuing operations of $154.8 million, or 2.5 percent of revenues. “We delivered a solid quarter as we grew Adjusted EBITDA by 12.7 percent versus last year,” said Heyward Donigan, president and chief executive officer, Rite Aid. “Despite challenges in the labor market, our pharmacists and store teams were able to meet the unprecedented volumes for COVID and flu immunizations, COVID testing and other clinical services, which clearly demonstrates our Lean work to free up capacity is paying off.” “We have also taken steps to drive increased value for all of Elixir’s PBM clients by entering into a new rebate aggregation agreement with Prime Therapeutics. In addition to the benefit to clients, this partnership will enable Elixir to be more competitive in the marketplace and improve profit margins.” “Today, we also announced the first phase of a store closure program to reduce costs, drive improved profitability and ensure that we have a healthy foundation to grow from, with the right stores in the right locations, for the communities we serve and for our business. We have identified an initial 63 stores for closure that is expected to provide an annual EBITDA benefit of approximately $25 million.” “We are encouraged by our recent momentum and expect to deliver a significant increase in our fourth quarter Adjusted EBITDA results compared to last year. As a result, we are raising our guidance for Adjusted EBITDA for Fiscal 2022.” “Finally, I want to thank each and every one of our associates for everything they do. It is my greatest privilege to work alongside such a tremendous team, and I am forever grateful for their passion and commitment to our company, our customers and each other.” Consolidated Third Quarter Summary (dollars in thousands) Thirteen Week Period Ended Thirty-nine Week Period Ended November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020 Revenues from continuing operations $ 6,228,880 $ 6,117,038 $ 18,502,865 $ 18,126,384 Net (loss) income from continuing operations (36,058) 4,324 (149,416) (81,575) Adjusted EBITDA from continuing operations 154,793 137,405 399,830 396,400 Revenues from continuing operations for the quarter were $6.23 billion compared to revenues from continuing operations of $6.12 billion in the prior year’s quarter. The 1.8 percent increase in revenues was driven by growth at the Retail Pharmacy Segment, partially offset by a decline at the Pharmacy Services Segment. Net loss from continuing operations was $36.1 million, or $0.67 per share, compared to last year’s third quarter net income from continuing operations of $4.3 million, or $0.08 per share. The increase in net loss is due primarily to higher facility exit and impairment charges driven by the Company’s store closure decisions. Other variance drivers include a LIFO charge in the current quarter compared to a LIFO credit in the prior year third quarter and a lower gain on the sale of assets. These items were partially offset by an increase in Adjusted EBITDA and lower depreciation and amortization expense. Retail Pharmacy Segment (dollars in thousands) Thirteen Week Period Ended Thirty-nine Week Period Ended November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020 Revenues from continuing operations $ 4,432,508 $ 4,109,592 $ 13,061,408 $ 12,250,775 Adjusted EBITDA from continuing operations 125,931 88,557 290,214 273,879 Retail Pharmacy Segment revenues from continuing operations increased 7.9 percent over the prior year quarter, driven by an increase in same store sales and the inclusion of Bartell’s results this quarter. Same store sales from continuing operations for the third quarter increased 4.4 percent over the prior year period, consisting of a 5.9 percent increase in pharmacy sales and a 0.4 percent increase in front-end sales. Front-end same store sales, excluding cigarettes and tobacco products, increased 1.0 percent. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, increased 7.9 percent over the prior year period. In addition to the benefit from 4 million COVID-19 vaccinations, maintenance prescriptions increased 1.7 percent while other acute prescriptions increased 3.9 percent on a same store basis when excluding COVID-19, flu and all other ancillary vaccinations. Prescription sales from continuing operations accounted for 71.1 percent of total drugstore sales. Total store count at the end of the third quarter was 2,488. Retail Pharmacy Segment Adjusted EBITDA from continuing operations was $125.9 million, or 2.8 percent of revenues, for the third quarter compared to last year’s third quarter Adjusted EBITDA from continuing operations of $88.6 million, or 2.2 percent of revenues. The increase in Adjusted EBITDA was due to increased gross profit, partially offset by an increase in selling, general and administrative (SG&A) expenses. Gross profit benefited from higher pharmacy same store sales, including immunizations, partially offset by pharmacy reimbursement rate pressures that were not fully offset by generic drug cost reductions and an increase in front-end gross profit resulting from higher front-end same store sales and a reduction in markdowns. SG&A expenses were negatively impacted by incremental payroll costs to support COVID immunizations, increases in bonus expense for store, field and corporate associates, increases in workers compensation costs and cycling the benefit from the prior year change to modernize our associate PTO plans. Pharmacy Services Segment (dollars in thousands) Thirteen Week Period Ended Thirty-nine Week Period Ended November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020 Revenues from continuing operations $ 1,858,830 $ 2,084,402 $ 5,629,325 $ 6,100,026 Adjusted EBITDA from continuing operations 28,862 48,848 109,616 122,521 Pharmacy Services Segment revenues were $1.9 billion for the quarter, a decrease of 10.8 percent compared to the prior year quarter. The decrease in revenues was primarily the result of a planned decrease in Elixir Insurance membership and a previously announced client loss. Pharmacy Services Segment Adjusted EBITDA from continuing operations was $28.9 million, or 1.6 percent of revenues, for the third quarter compared to last year’s third quarter Adjusted EBITDA from continuing operations of $48.8 million, or 2.3 percent of revenues. Gross profit dollars were negatively impacted from the decline in revenues, a reduction in rebates and an increase in the Medical Loss Ratio at Elixir Insurance. SG&A expenses improved due to reduced payroll and a reduction in broker commissions. Retail Store Base Assessment Rite Aid is conducting a rigorous assessment of its store base and has implemented a store closure program. The program’s primary focus is to reduce costs, drive improved profitability and ensure that Rite Aid has a healthy foundation to grow from, with the right stores in the right locations, for the communities it serves and for its business. As a result of this ongoing review, Rite Aid identified 63 stores for closure that is expected to provide an annual EBITDA benefit of approximately $25 million. The closures began this past November. Associates impacted by these store closures are being offered the opportunity to transfer to another store. The review work will continue, and the Company anticipates the number of closures to increase as it finalizes the review over the next several months. Outlook for Fiscal 2022 As a result of the momentum in the third quarter, and an anticipated increase in demand for COVID-19 vaccines and testing versus prior expectations, Rite Aid Corporation is raising its fiscal 2022 Adjusted EBITDA guidance. Total revenues are expected to be between $24.4 billion and $24.7 billion in fiscal 2022. Pharmacy Services Segment revenue is expected to be between $7.1 billion and $7.2 billion (net of any intercompany revenues to the Retail Pharmacy Segment). Net loss is expected to be between $230 million and $189 million. Adjusted EBITDA is expected to be between $500 million and $520 million. Adjusted net loss per share is expected to be between $0.49 and $0.04. Capital expenditures are expected to be approximately $275 million. Conference Call Broadcast Rite Aid will hold an analyst call at 8:30 a.m. Eastern Time today with remarks by Rite Aid's management team. The call will be broadcast via the Internet at https://investors.riteaid.com. The telephone replay will be available beginning at 12:00 p.m. Eastern Time on Tuesday, Dec. 21, 2021 and ending at 11:59 p.m. Eastern Time on Jan. 21, 2022. To access the replay of the call, telephone (800) 585-8367 or (416) 621-4642 and enter the seven-digit reservation number 1787289. The webcast replay of the call will also be available at https://investors.riteaid.com starting at 12 p.m. Eastern Time today. The playback will be available until the company’s next conference call. About Rite Aid Corporation Rite Aid Corporation is on the front lines of delivering healthcare services and retail products to Americans 365 days a year. Our pharmacists are uniquely positioned to engage with customers and improve their health outcomes. We provide an array of whole being health products and services for the entire family through over 2,400 retail pharmacy locations across 17 states. Through Elixir, we provide pharmacy benefits and services to millions of members nationwide. For more information, www.riteaid.com. Cautionary Statement Regarding Forward-Looking Statements Statements in this release that are not historical, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements regarding Rite Aid's outlook and guidance for fiscal 2022; the continued impact of the global coronavirus (COVID-19) pandemic on Rite Aid’s business; Rite Aid’s store closure program; and any assumptions underlying any of the foregoing. Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," and "will" and variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to: risks related to the prolonged impact of the COVID-19 global pandemic and the emerging new variants, including the government responses thereto; the impact of COVID-19 on our workforce, operations, stores, expenses, and supply chain, and the operations or behaviors of our customers, suppliers and business partners; our ability to successfully implement our store closure program and other strategies; the impact of our high level of indebtedness, the ability to refinance such indebtedness on acceptable terms and our ability to satisfy our obligations and the other covenants contained in our debt agreements; outcome of pending or new litigation, including related to Opioids, “usual and customary” pricing or other matters; our ability to monetize the CMS receivable created in our Part D business; general competitive, economic, industry, market, political (including healthcare reform) and regulatory conditions (including changes to laws or regulations relating to labor or wages), as well as other factors that impact the markets in which we operate; the impact of private and public third-party payers continued reduction in prescription drug reimbursements and efforts to encourage mail order; our ability to manage expenses and our investments in working capital; our ability to achieve the benefits of our efforts to reduce the costs of our generic and other drugs; our ability to achieve cost savings and other benefits of our restructuring efforts within our anticipated timeframe, if at all; the outcome of our continuing efforts to monitor and comply with applicable laws, regulations, policies and procedures; and our ability to partner and have relationships with health plans and health systems. These and other risks, assumptions and uncertainties are more fully described in Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K and in other documents that we file or furnish with the Securities and Exchange Commission (the “SEC”), which you are encouraged to read. To the extent that COVID-19 adversely affects our business and financial results, it may also have the effect of heightening many of such risk factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to rely on these forward-looking statements, which speak only as of the date they are made. The degree to which COVID-19 may adversely affect Rite Aid’s results and operations, including its ability to achieve its outlook for fiscal 2022 guidance, will depend on numerous evolving factors and future developments, which are highly uncertain, including, but not limited to, federal, state and local governmental policies and initiatives designed to reduce the transmission of COVID-19 and emerging new variants and how quickly and to what extent normal economic and operating conditions can resume. As a result, the impact on Rite Aid’s financial and operating results cannot be reasonably estimated with specificity at this time, but the impact could be material. Rite Aid expressly disclaims any current intention, and assumes no duty, to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise. All references to “Company” and “Rite Aid” as used throughout this release refer to Rite Aid Corporation and its affiliates. Reconciliation of Non-GAAP Financial Measures Rite Aid separately reports financial results on the basis of Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share, Adjusted EBITDA, Adjusted EBITDA Gross Profit and Adjusted EBITDA SG&A, which are non-GAAP financial measures. See the attached tables for a reconciliation of Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Adjusted EBITDA to net income (loss), and net income (loss) per diluted share, which are the most directly comparable GAAP financial measures. Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share exclude amortization expense, merger and acquisition-related costs, non-recurring litigation settlements, gains or losses on debt modifications and retirements, LIFO adjustments, goodwill and intangible asset impairment charges, restructuring-related costs, and the loss on Bartell acquisition. Rite Aid believes Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share serve as appropriate measures to be used in evaluating the performance of its business and help its investors better compare its operating performance over multiple periods. Adjusted EBITDA is defined as net income (loss) excluding the impact of income taxes, interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, goodwill and intangible asset impairment charges, inventory write-downs related to store closings, gains or losses on debt modifications and retirements, and other items (including stock-based compensation expense, merger and acquisition-related costs, non-recurring litigation settlements, severance, restructuring-related costs, costs related to facility closures, gain or loss on sale of assets, and the loss on Bartell acquisition). The add back of LIFO (credit) charge when calculating Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share removes the entire impact of LIFO (credits) charges, and effectively reflects Rite Aid's results as if the company was on a FIFO inventory basis. Rite Aid believes Adjusted EBITDA serves as an appropriate measure in evaluating the performance of its business and helps its investors better compare its operating performance with its competitors. Adjusted EBITDA Gross Profit includes LIFO adjustments, depreciation and amortization (COGS portion only) and other items. See the attached tables for a reconciliation of Adjusted EBITDA Gross Profit to Revenue, which is the most directly comparable GAAP financial measure. Adjusted EBITDA SG&A excludes depreciation and amortization (SG&A portion only), stock-based compensation expense, merger and acquisition-related costs, litigation settlements and other items. See the attached tables for a reconciliation of Adjusted EBITDA SG&A to Revenue, which is the most directly comparable GAAP financial measure. The Company believes Adjusted EBITDA Gross Profit and Adjusted EBITDA SG&A serve as appropriate measures in evaluating the performance of its business and helps its investors better compare its operating performance with its competitors. RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (unaudited) November 27, 2021 February 27, 2021 ASSETS Current assets: Cash and cash equivalents $ 155,289 $ 160,902 Accounts receivable, net 1,844,234 1,462,441 Inventories, net of LIFO reserve of $486,759 and $485,859 1,949,841 1,864,890 Prepaid expenses and other current assets 106,666 106,941 Total current assets 4,056,030 3,595,174 Property, plant and equipment, net 1,014,662 1,080,499 Operating lease right-of-use assets 2,915,748 3,064,077 Goodwill 1,108,136 1,108,136 Other intangibles, net 307,345 340,519 Deferred tax assets 14,964 14,964 Other assets 82,239 132,035 Total assets $ 9,499,124 $ 9,335,404 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt and lease financing obligations $ 6,119 $ 6,409 Accounts payable 1,547,770 1,437,421 Accrued salaries, wages and other current liabilities 873,201 642,364 Current portion of operating lease liabilities 522,272 516,752 Total current liabilities 2,949,362 2,602,946 Long-term debt, less current maturities 3,167,060 3,063,087 Long-term operating lease liabilities 2,692,669 2,829,293 Lease financing obligations, less current maturities 15,270 16,711 Other noncurrent liabilities 202,734 208,213 Total liabilities 9,027,095 8,720,250 Commitments and contingencies - - Stockholders' equity: Common stock 55,761 55,143 Additional paid-in capital 5,902,445 5,897,168 Accumulated deficit (5,462,519 ) (5,313,103 ) Accumulated other comprehensive loss (23,658 ) (24,054 ) Total stockholders' equity 472,029 615,154 Total liabilities and stockholders' equity $ 9,499,124 $ 9,335,404 RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 Revenues $ 6,228,880 $ 6,117,038 Costs and expenses: Cost of revenues 4,894,497 4,913,939 Selling, general and administrative expenses 1,276,920 1,156,355 Facility exit and impairment charges 47,455 7,453 Interest expense 47,794 50,835 Gain on sale of assets, net (5,899 ) (16,305 ) Loss on Bartell acquisition 5,346 - 6,266,113 6,112,277 (Loss) income from continuing operations before income taxes (37,233 ) 4,761 Income tax (benefit) expense (1,175 ) 437 Net (loss) income from continuing operations (36,058 ) 4,324 Net income from discontinued operations, net of tax - - Net (loss) income $ (36,058 ) $ 4,324 Basic and diluted (loss) income per share: Numerator for (loss) income per share: Net (loss) income from continuing operations attributable to common stockholders - basic and diluted $ (36,058 ) $ 4,324 Net income from discontinued operations attributable to common stockholders - basic and diluted - - (Loss) income attributable to common stockholders - basic and diluted $ (36,058 ) $ 4,324 Denominator: Basic weighted average shares 54,168 53,744 Outstanding options and restricted shares, net - 335 Diluted weighted average shares 54,168 54,079 Basic and diluted (loss) income per share Continuing operations $ (0.67 ) $ 0.08 Discontinued operations $ - $ - Net basic and diluted (loss) income per share $ (0.67 ) $ 0.08 RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (unaudited) Thirty-nine weeks ended November 27, 2021 Thirty-nine weeks ended November 28, 2020 Revenues $ 18,502,865 $ 18,126,384 Costs and expenses: Cost of revenues 14,637,683 14,564,621 Selling, general and administrative expenses 3,790,035 3,469,644 Facility exit and impairment charges 67,639 22,734 Intangible asset impairment charges - 29,852 Interest expense 145,507 151,389 Loss (gain) on debt modifications and retirements, net 3,235 (5,274 ) Gain on sale of assets, net (79 ) (17,473 ) Loss on Bartell acquisition 5,346 - 18,649,366 18,215,493 Loss from continuing operations before income taxes (146,501 ) (89,109 ) Income tax expense (benefit) 2,915 (7,534 ) Net loss from continuing operations (149,416 ) (81,575 ) Net income from discontinued operations, net of tax - 9,161 Net loss $ (149,416 ) $ (72,414 ) Basic and diluted loss per share: Numerator for loss per share: Net loss from continuing operations attributable to common stockholders - basic and diluted $ (149,416 ) $ (81,575 ) Net income from discontinued operations attributable to common stockholders - basic and diluted - 9,161 Loss attributable to common stockholders - basic and diluted $ (149,416 ) $ (72,414 ) Denominator: Basic and diluted weighted average shares 54,004 53,600 Basic and diluted loss per share Continuing operations $ (2.77 ) $ (1.52 ) Discontinued operations $ - $ 0.17 Net basic and diluted loss per share $ (2.77 ) $ (1.35 ) RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 OPERATING ACTIVITIES: Net (loss) income $ (36,058 ) $ 4,324 Net income from discontinued operations, net of tax - - Net (loss) income from continuing operations $ (36,058 ) $ 4,324 Adjustments to reconcile to net cash (used in) provided by operating activities of continuing operations: Depreciation and amortization 72,973 83,336 Facility exit and impairment charges 47,455 7,453 LIFO charge (credit) 8,886 (9,487 ) Gain on sale of assets, net (5,899 ) (16,305 ) Loss on Bartell acquisition 5,346 - Stock-based compensation expense 217 2,867 Changes in deferred taxes (1,602 ) - Changes in operating assets and liabilities: Accounts receivable (185,224 ) 128,777 Inventories (68,054 ) (24,005 ) Accounts payable 38,112 (488 ) Operating lease right-of-use assets and operating lease liabilities (7,208 ) (6,826 ) Other assets 9,761 (4,248 ) Other liabilities 118,257 57,351 Net cash (used in) provided by operating activities of continuing operations (3,038 ) 222,749 INVESTING ACTIVITIES: Payments for property, plant and equipment (39,645 ) (64,304 ) Intangible assets acquired (9,810 ) (6,131 ) Proceeds from dispositions of assets and investments 3,145 3,176 Proceeds from sale-leaseback transactions 25,605 80,551 Net cash (used in) provided by investing activities of continuing operations (20,705 ) 13,292 FINANCING ACTIVITIES: Net proceeds from (payments to) revolver 50,000 (309,000 ) Principal payments on long-term debt (1,032 ) (1,194 ) Change in zero balance cash accounts (14,243 ) 32,374 Payments for taxes related to net share settlement of equity awards (131 ) (64 ) Deferred financing costs paid (2,126 ) (74 ) Net cash provided by (used in) financing activities of continuing operations 32,468 (277,958 ) Increase (decrease) in cash and cash equivalents 8,725 (41,917 ) Cash and cash equivalents, beginning of period 146,564 92,730 Cash and cash equivalents, end of period $ 155,289 $ 50,813 RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (unaudited) Thirty-nine weeks endedNovember 27, 2021 Thirty-nine weeks endedNovember 28, 2020 OPERATING ACTIVITIES: Net loss $ (149,416 ) $ (72,414 ) Net income from discontinued operations, net of tax - 9,161 Net loss from continuing operations $ (149,416 ) $ (81,575 ) Adjustments to reconcile to net cash provided by (used in) operating activities of continuing operations: Depreciation and amortization 222,691 249,556 Facility exit and impairment charges 67,639 22,734 Intangible asset impairment charges - 29,852 LIFO charge (credit) 900 (30,303 ) Gain on sale of assets, net (79 ) (17,473 ) Loss on Bartell acquisition 5,346 - Stock-based compensation expense 8,820 8,677 Loss (gain) on debt modifications and retirements, net 3,235 (5,274 ) Changes in deferred taxes (1,602 ) - Changes in operating assets and liabilities: Accounts receivable (398,079 ) (507,778 ) Inventories (87,150 ) (19,532 ) Accounts payable 129,436 1,460 Operating lease right-of-use assets and operating lease liabilities (19,517 ) (25,319 ) Other assets 34,946 75,265 Other liabilities 219,390 45,867 Net cash provided by (used in) operating activities of continuing operations 36,560 (253,843 ) INVESTING ACTIVITIES: Payments for property, plant and equipment (145,001 ) (127,389 ) Intangible assets acquired (24,289 ) (28,703 ) Proceeds from insured loss 10,436 12,500 Proceeds from dispositions of assets and investments 7,821 9,086 Proceeds from sale-leaseback transactions 39,790 89,012 Net cash used in investing activities of continuing operations (111,243 ) (45,494 ) FINANCING ACTIVITIES: Proceeds from issuance of long-term debt 350,000 849,918 Net proceeds from revolver 300,000 341,000 Principal payments on long-term debt (544,020 ) (1,057,376 ) Change in zero balance cash accounts (15,087 ) 5,545 Financing fees paid for early debt redemption (833 ) (2,399 ) Payments for taxes related to net share settlement of equity awards (2,352 ) (2,165 ) Deferred financing costs paid (18,638 ) (14,674 ) Net cash provided by financing activities of continuing operations 69,070 119,849 Cash flows from discontinued operations: Operating activities of discontinued operations - (82,189 ) Investing activities of discontinued operations - 94,310 Net cash provided by discontinued operations - 12,121 Decrease in cash and cash equivalents (5,613 ) (167,367 ) Cash and cash equivalents, beginning of period 160,902 218,180 Cash and cash equivalents, end of period $ 155,289 $ 50,813 RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL SEGMENT OPERATING INFORMATION (Dollars in thousands) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 Retail Pharmacy Segment Revenues from continuing operations (a) $ 4,432,508 $ 4,109,592 Cost of revenues from continuing operations (a) 3,199,271 3,029,884 Gross profit from continuing operations 1,233,237 1,079,708 LIFO charge (credit) from continuing operations 8,886 (9,487 ) FIFO gross profit from continuing operations 1,242,123 1,070,221 Adjusted EBITDA gross profit from continuing operations 1,244,637 1,072,547 Gross profit as a percentage of revenues - continuing operations 27.82 % 26.27 % LIFO charge (credit) as a percentage of revenues - continuing operations 0.20 % -0.23 % FIFO gross profit as a percentage of revenues - continuing operations 28.02 % 26.04 % Adjusted EBITDA gross profit as a percentage of revenues - continuing operations 28.08 % 26.10 % Selling, general and administrative expenses from continuing operations 1,185,974 1,067,027 Adjusted EBITDA selling, general and administrative expenses from continuing operations 1,118,706 983,990 Selling, general and administrative expenses as a percentage of revenues - continuing operations 26.76 % 25.96 % Adjusted EBITDA selling, general and administrative expenses as a percentage of revenues - continuing operations 25.24 % 23.94 % Cash interest expense 44,853 47,500 Non-cash interest expense 2,941 3,335 Total interest expense 47,794 50,835 Interest expense - continuing operations 47,794 50,835 Interest expense - discontinued operations - - Adjusted EBITDA - continuing operations 125,931 88,557 Adjusted EBITDA as a percentage of revenues - continuing operations 2.84 % 2.15 % Pharmacy Services Segment Revenues (a) $ 1,858,830 $ 2,084,402 Cost of revenues (a) 1,757,684 1,961,011 Gross profit 101,146 123,391 Gross profit as a percentage of revenues 5.44 % 5.92 % Adjusted EBITDA 28,862 48,848 Adjusted EBITDA as a percentage of revenues 1.55 % 2.34 % (a) - Revenues and cost of revenues include $62,458 and $76,956 of inter-segment activity for the thirteen weeks ended November 27, 2021 and November 28, 2020, respectively, that is eliminated in consolidation. RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL SEGMENT OPERATING INFORMATION (Dollars in thousands) (unaudited) Thirty-nine weeks ended November 27, 2021 Thirty-nine weeks ended November 28, 2020 Retail Pharmacy Segment Revenues from continuing operations (a) $ 13,061,408 $ 12,250,775 Cost of revenues from continuing operations (a) 9,517,875 9,027,618 Gross profit from continuing operations 3,543,533 3,223,157 LIFO charge (credit) from continuing operations 900 (30,303 ) FIFO gross profit from continuing operations 3,544,433 3,192,854 Adjusted EBITDA gross profit from continuing operations 3,551,888 3,227,196 Gross profit as a percentage of revenues - continuing operations 27.13 % 26.31 % LIFO charge (credit) as a percentage of revenues - continuing operations 0.01 % -0.25 % FIFO gross profit as a percentage of revenues - continuing operations 27.14 % 26.06 % Adjusted EBITDA gross profit as a percentage of revenues - continuing operations 27.19 % 26.34 % Selling, general and administrative expenses from continuing operations 3,505,365 3,206,078 Adjusted EBITDA selling, general and administrative expenses from continuing operations 3,261,674 2,953,317 Selling, general and administrative expenses as a percentage of revenues - continuing operations 26.84 % 26.17 % Adjusted EBITDA selling, general and administrative expenses as a percentage of revenues - continuing operations 24.97 % 24.11 % Cash interest expense 136,476 141,635 Non-cash interest expense 9,031 9,754 Total interest expense 145,507 151,389 Interest expense - continuing operations 145,507 151,389 Interest expense - discontinued operations - - Adjusted EBITDA - continuing operations 290,214 273,879 Adjusted EBITDA as a percentage of revenues - continuing operations 2.22 % 2.24 % Pharmacy Services Segment Revenues (a) $ 5,629,325 $ 6,100,026 Cost of revenues (a) 5,307,676 5,761,420 Gross profit 321,649 338,606 Gross profit as a percentage of revenues 5.71 % 5.55 % Adjusted EBITDA 109,616 122,521 Adjusted EBITDA as a percentage of revenues 1.95 % 2.01 % (a) - Revenues and cost of revenues include $187,868 and $224,417 of inter-segment activity for the thirty-nine weeks ended November 27, 2021 and November 28, 2020, respectively, that is eliminated in consolidation. RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA (In thousands) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 Reconciliation of net (loss) income to adjusted EBITDA: Net (loss) income - continuing operations $ (36,058 ) $ 4,324 Adjustments: Interest expense 47,794 50,835 Income tax (benefit) expense (1,175 ) 437 Depreciation and amortization 72,973 83,336 LIFO charge (credit) 8,886 (9,487 ) Facility exit and impairment charges 47,455 7,453 Merger and Acquisition-related costs 3,642 1,136 Stock-based compensation expense 217 2,867 Restructuring-related costs 9,657 12,175 Inventory write-downs related to store closings 86 704 Litigation settlements 2,000 - Gain on sale of assets, net (5,899 ) (16,305 ) Loss on Bartell acquisition 5,346 - Other (131 ) (70 ) Adjusted EBITDA - continuing operations $ 154,793 $ 137,405 Percent of revenues - continuing operations 2.49 % 2.25 % RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (In thousands) (unaudited) Thirty-nine weeks ended November 27, 2021 Thirty-nine weeks ended November 28, 2020 Reconciliation of net loss to adjusted EBITDA: Net loss - continuing operations $ (149,416 ) $ (81,575 ) Adjustments: Interest expense 145,507 151,389 Income tax expense (benefit) 2,915 (7,534 ) Depreciation and amortization 222,691 249,556 LIFO charge (credit) 900 (30,303 ) Facility exit and impairment charges 67,639 22,734 Intangible asset impairment charges - 29,852 Loss (gain) on debt modifications and retirements, net 3,235 (5,274 ) Merger and Acquisition-related costs 12,119 1,136 Stock-based compensation expense 8,820 8,677 Restructuring-related costs 25,173 71,096 Inventory write-downs related to store closings 1,356 2,596 Litigation settlements 50,212 - Gain on sale of assets, net (79 ) (17,473 ) Loss on Bartell acquisition 5,346 - Other 3,412 1,523 Adjusted EBITDA - continuing operations $ 399,830 $ 396,400 Percent of revenues - continuing operations 2.16 % 2.19 % RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION ADJUSTED NET INCOME (Dollars in thousands, except per share amounts) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 Net (loss) income from continuing operations $ (36,058 ) $ 4,324 Add back - Income tax (benefit) expense (1,175 ) 437 (Loss) income before income taxes - continuing operations (37,233 ) 4,761 Adjustments: Amortization expense 18,780 21,236 LIFO charge (credit) 8,886 (9,487 ) Merger and Acquisition-related costs 3,642 1,136 Restructuring-related costs 9,657 12,175 Loss on Bartell acquisition 5,346 - Litigation settlements 2,000 - Adjusted income before income taxes - continuing operations 11,078 29,821 Adjusted income tax expense (a) 2,914 8,243 Adjusted net income from continuing operations $ 8,164 $ 21,578 Adjusted net income per diluted share - continuing operations: Numerator for adjusted net income per diluted share: Adjusted net income from continuing operations $ 8,164 $ 21,578 Denominator: Basic weighted average shares 54,168 53,744 Outstanding options and restricted shares, net 541 335 Diluted weighted average shares 54,709 54,079 Net (loss) income from continuing operations per diluted share - continuing operations $ (0.67 ) $ 0.08 Adjusted net income per diluted share - continuing operations $ 0.15 $ 0.40 (a) The fiscal year 2022 and 2021 annual effective tax rates, calculated using a federal rate plus a net state rate that excluded the impact of state NOL's, state credits and valuation allowance, was used for the thirteen weeks ended November 27, 2021 and November 28, 2020, respectively. RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION ADJUSTED NET INCOME (Dollars in thousands, except per share amounts) (unaudited) Thirty-nine weeks ended November 27, 2021 Thirty-nine weeks ended November 28, 2020 Net loss from continuing operations $ (149,416 ) $ (81,575 ) Add back - Income tax expense (benefit) 2,915 (7,534 ) Loss before income taxes - continuing operations (146,501 ) (89,109 ) Adjustments: Amortization expense 59,193 68,351 LIFO charge (credit) 900 (30,303 ) Intangible asset impairment charges - 29,852 Loss (gain) on debt modifications and retirements, net 3,235 (5,274 ) Merger and Acquisition-related costs 12,119 1,136 Restructuring-related costs 25,173 71,096 Loss on Bartell acquisition 5,346 - Litigation settlements 50,212 - Adjusted income before income taxes - continuing operations 9,677 45,749 Adjusted income tax expense (a) 2,545 12,645 Adjusted net income from continuing operations $ 7,132 $ 33,104 Adjusted net income per diluted share - continuing operations: Numerator for adjusted net income per diluted share: Adjusted net income from continuing operations $ 7,132 $ 33,104 Denominator: Basic weighted average shares 54,004 53,600 Outstanding options and restricted shares, net 998 754 Diluted weighted average shares 55,002 54,354 Net loss from continuing operations per diluted share - continuing operations $ (2.77 ) $ (1.52 ) Adjusted net income per diluted share - continuing operations $ 0.13 $ 0.61 (a) The fiscal year 2022 and 2021 annual effective tax rates, calculated using a federal rate plus a net state rate that excluded the impact of state NOL's, state credits and valuation allowance, was used for the thirty-nine weeks ended November 27, 2021 and November 28, 2020, respectively. RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF ADJUSTED EBITDA GROSS PROFIT AND RECONCILIATION OF ADJUSTED EBITDA SELLING, GENERAL AND ADMINISTRATIVE EXPENSES- RETAIL PHARMACY SEGMENT (In thousands) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 Reconciliation of adjusted EBITDA gross profit: Revenues $ 4,432,508 $ 4,109,592 Gross Profit 1,233,237 1,079,708 Addback: LIFO charge (credit) 8,886 (9,487 ) Depreciation and amortization (cost of goods sold portion only) 2,489 1,945 Other 25 381 Adjusted EBITDA gross profit - continuing operations $ 1,244,637 $ 1,072,547 Percent of revenues - continuing operations 28.08 % 26.10 % Reconciliation of adjusted EBITDA selling, general and administrative expenses: Revenues $ 4,432,508 $ 4,109,592 Selling, general and administrative expenses 1,185,974 1,067,027 Less: Depreciation and amortization (SG&A portion only) 58,087 67,641 Stock-based compensation expense (174 ) 2,429 Merger and Acquisition-related costs 3,642 1,136 Restructuring-related costs 3,746 11,605 Litigation settlements 2,000 - Other (33 ) 226 Adjusted EBITDA selling, general and administrative expenses - continuing operations $ 1,118,706 $ 983,990 Percent of revenues - continuing operations 25.24 % 23.94 % Adjusted EBITDA - continuing operations $ 125,931 $ 88,557 RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF ADJUSTED EBITDA GROSS PROFIT AND RECONCILIATION OF ADJUSTED EBITDA SELLING, GENERAL AND ADMINISTRATIVE EXPENSES- RETAIL PHARMACY SEGMENT (In thousands) (unaudited) Thirty-nine weeks ended November 27, 2021 Thirty-nine weeks ended November 28, 2020 Reconciliation of adjusted EBITDA gross profit: Revenues $ 13,061,408 $ 12,250,775 Gross Profit 3,543,533 3,223,157 Addback: LIFO charge (credit) 900 (30,303 ) Depreciation and amortization (cost of goods sold portion only) 6,536 6,775 Restructuring-related costs - SKU optimization charges - 25,763 Other 919 1,804 Adjusted EBITDA gross profit - continuing operations $ 3,551,888 $ 3,227,196 Percent of revenues - continuing operations 27.19 % 26.34 % Reconciliation of adjusted EBITDA selling, general and administrative expenses: Revenues $ 13,061,408 $ 12,250,775 Selling, general and administrative expenses 3,505,365 3,206,078 Less: Depreciation and amortization (SG&A portion only) 176,936 199,434 Stock-based compensation expense 8,292 7,785 Merger and Acquisition-related costs 12,119 1,136 Restructuring-related costs 7,951 41,992 Litigation settlements 34,448 - Other 3,945 2,414 Adjusted EBITDA selling, general and administrative expenses - continuing operations $ 3,261,674 $ 2,953,317 Percent of revenues - continuing operations 24.97 % 24.11 % Adjusted EBITDA - continuing operations $ 290,214 $ 273,879 RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED EBITDA GUIDANCE YEAR ENDING FEBRUARY 26, 2022 (In thousands) (unaudited) Guidance Range Low High Total Revenues $ 24,400,000 $ 24,700,000 Pharmacy Services Segment Revenues $ 7,100,000 $ 7,200,000 Gross Capital Expenditures $ 275,000 $ 275,000 Reconciliation of net loss to adjusted EBITDA: Net loss $ (229,500 ) $ (188,500 ) Adjustments: Interest expense 195,000 195,000 Income tax expense 3,000 - Depreciation and amortization 302,000 302,000 LIFO charge 5,000 - Facility exit and impairment charges 105,000 95,000 Loss on debt modifications and retirements, net 3,200 3,200 Merger and Acquisition-related costs 13,000 13,000 Restructuring-related costs 35,000 35,000 Litigation settlements 50,000 50,000 Gain on sale of assets, net (7,000 ) (10,000 ) Loss on Bartell acquisition 5,300 5,300 Other 20,000 20,000 Adjusted EBITDA $ 500,000 $ 520,000 RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED NET LOSS GUIDANCE YEAR ENDING FEBRUARY 26, 2022 (In thousands) (unaudited) Guidance Range Low High Net loss $ (229,500 ) $ (188,500 ) Add back - income tax expense 3,000 - Loss before income taxes (226,500 ) (188,500 ) Adjustments: Amortization expense 79,000 79,000 LIFO charge 5,000 - Loss on debt modifications and retirements, net 3,200 3,200 Merger and Acquisition-related costs 13,000 13,000 Restructuring-related costs 35,000 35,000 Loss on Bartell acquisition 5,300 5,300 Litigation settlements 50,000 50,000 Adjusted loss before adjusted income taxes (36,000 ) (3,000 ) Adjusted income tax benefit (9,500 ) (800 ) Adjusted net loss $ (26,500 ) $ (2,200 ) Diluted adjusted net loss per share $ (0.49 ) $ (0.04 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20211220005684/en/Contacts INVESTORS: Trent Kruse (717) 975-3710 investor@riteaid.com MEDIA: Jeffrey Olson 717-975-5718 press@riteaid.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Rite Aid Corporation Reports Fiscal 2022 Third Quarter Results By: Rite Aid Corporation via Business Wire December 21, 2021 at 12:38 PM EST Revenues from Continuing Operations Increased 1.8 Percent to $6.23 Billion Compared to Prior Year Third Quarter Revenues from Continuing Operations of $6.12 Billion Third Quarter Net Loss from Continuing Operations of $36.1 Million or $0.67 Per Share, Compared to the Prior Year Third Quarter Net Income of $4.3 Million or $0.08 Per Share Third Quarter Adjusted Net Income from Continuing Operations of $8.2 Million or $0.15 Per Share, Compared to the Prior Year Third Quarter Adjusted Net Income of $21.6 Million or $0.40 Per Share Third Quarter Adjusted EBITDA from Continuing Operations Increased 12.7 Percent to $154.8 Million, Compared to the Prior Year Third Quarter Adjusted EBITDA of $137.4 Million Rite Aid Raises Adjusted EBITDA Guidance for Fiscal 2022 Company Announces Rebate Aggregation Agreement between Elixir and Prime Therapeutics Company Announces Store Closure Plan to Reduce Costs and Improve Profitability Rite Aid Corporation (NYSE: RAD) today reported operating results for its third fiscal quarter ended November 27, 2021. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20211220005684/en/(Photo: Business Wire) For the third quarter, the company reported net loss from continuing operations of $36.1 million, or $0.67 loss per share, Adjusted net income from continuing operations of $8.2 million, or $0.15 income per share, and Adjusted EBITDA from continuing operations of $154.8 million, or 2.5 percent of revenues. “We delivered a solid quarter as we grew Adjusted EBITDA by 12.7 percent versus last year,” said Heyward Donigan, president and chief executive officer, Rite Aid. “Despite challenges in the labor market, our pharmacists and store teams were able to meet the unprecedented volumes for COVID and flu immunizations, COVID testing and other clinical services, which clearly demonstrates our Lean work to free up capacity is paying off.” “We have also taken steps to drive increased value for all of Elixir’s PBM clients by entering into a new rebate aggregation agreement with Prime Therapeutics. In addition to the benefit to clients, this partnership will enable Elixir to be more competitive in the marketplace and improve profit margins.” “Today, we also announced the first phase of a store closure program to reduce costs, drive improved profitability and ensure that we have a healthy foundation to grow from, with the right stores in the right locations, for the communities we serve and for our business. We have identified an initial 63 stores for closure that is expected to provide an annual EBITDA benefit of approximately $25 million.” “We are encouraged by our recent momentum and expect to deliver a significant increase in our fourth quarter Adjusted EBITDA results compared to last year. As a result, we are raising our guidance for Adjusted EBITDA for Fiscal 2022.” “Finally, I want to thank each and every one of our associates for everything they do. It is my greatest privilege to work alongside such a tremendous team, and I am forever grateful for their passion and commitment to our company, our customers and each other.” Consolidated Third Quarter Summary (dollars in thousands) Thirteen Week Period Ended Thirty-nine Week Period Ended November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020 Revenues from continuing operations $ 6,228,880 $ 6,117,038 $ 18,502,865 $ 18,126,384 Net (loss) income from continuing operations (36,058) 4,324 (149,416) (81,575) Adjusted EBITDA from continuing operations 154,793 137,405 399,830 396,400 Revenues from continuing operations for the quarter were $6.23 billion compared to revenues from continuing operations of $6.12 billion in the prior year’s quarter. The 1.8 percent increase in revenues was driven by growth at the Retail Pharmacy Segment, partially offset by a decline at the Pharmacy Services Segment. Net loss from continuing operations was $36.1 million, or $0.67 per share, compared to last year’s third quarter net income from continuing operations of $4.3 million, or $0.08 per share. The increase in net loss is due primarily to higher facility exit and impairment charges driven by the Company’s store closure decisions. Other variance drivers include a LIFO charge in the current quarter compared to a LIFO credit in the prior year third quarter and a lower gain on the sale of assets. These items were partially offset by an increase in Adjusted EBITDA and lower depreciation and amortization expense. Retail Pharmacy Segment (dollars in thousands) Thirteen Week Period Ended Thirty-nine Week Period Ended November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020 Revenues from continuing operations $ 4,432,508 $ 4,109,592 $ 13,061,408 $ 12,250,775 Adjusted EBITDA from continuing operations 125,931 88,557 290,214 273,879 Retail Pharmacy Segment revenues from continuing operations increased 7.9 percent over the prior year quarter, driven by an increase in same store sales and the inclusion of Bartell’s results this quarter. Same store sales from continuing operations for the third quarter increased 4.4 percent over the prior year period, consisting of a 5.9 percent increase in pharmacy sales and a 0.4 percent increase in front-end sales. Front-end same store sales, excluding cigarettes and tobacco products, increased 1.0 percent. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, increased 7.9 percent over the prior year period. In addition to the benefit from 4 million COVID-19 vaccinations, maintenance prescriptions increased 1.7 percent while other acute prescriptions increased 3.9 percent on a same store basis when excluding COVID-19, flu and all other ancillary vaccinations. Prescription sales from continuing operations accounted for 71.1 percent of total drugstore sales. Total store count at the end of the third quarter was 2,488. Retail Pharmacy Segment Adjusted EBITDA from continuing operations was $125.9 million, or 2.8 percent of revenues, for the third quarter compared to last year’s third quarter Adjusted EBITDA from continuing operations of $88.6 million, or 2.2 percent of revenues. The increase in Adjusted EBITDA was due to increased gross profit, partially offset by an increase in selling, general and administrative (SG&A) expenses. Gross profit benefited from higher pharmacy same store sales, including immunizations, partially offset by pharmacy reimbursement rate pressures that were not fully offset by generic drug cost reductions and an increase in front-end gross profit resulting from higher front-end same store sales and a reduction in markdowns. SG&A expenses were negatively impacted by incremental payroll costs to support COVID immunizations, increases in bonus expense for store, field and corporate associates, increases in workers compensation costs and cycling the benefit from the prior year change to modernize our associate PTO plans. Pharmacy Services Segment (dollars in thousands) Thirteen Week Period Ended Thirty-nine Week Period Ended November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020 Revenues from continuing operations $ 1,858,830 $ 2,084,402 $ 5,629,325 $ 6,100,026 Adjusted EBITDA from continuing operations 28,862 48,848 109,616 122,521 Pharmacy Services Segment revenues were $1.9 billion for the quarter, a decrease of 10.8 percent compared to the prior year quarter. The decrease in revenues was primarily the result of a planned decrease in Elixir Insurance membership and a previously announced client loss. Pharmacy Services Segment Adjusted EBITDA from continuing operations was $28.9 million, or 1.6 percent of revenues, for the third quarter compared to last year’s third quarter Adjusted EBITDA from continuing operations of $48.8 million, or 2.3 percent of revenues. Gross profit dollars were negatively impacted from the decline in revenues, a reduction in rebates and an increase in the Medical Loss Ratio at Elixir Insurance. SG&A expenses improved due to reduced payroll and a reduction in broker commissions. Retail Store Base Assessment Rite Aid is conducting a rigorous assessment of its store base and has implemented a store closure program. The program’s primary focus is to reduce costs, drive improved profitability and ensure that Rite Aid has a healthy foundation to grow from, with the right stores in the right locations, for the communities it serves and for its business. As a result of this ongoing review, Rite Aid identified 63 stores for closure that is expected to provide an annual EBITDA benefit of approximately $25 million. The closures began this past November. Associates impacted by these store closures are being offered the opportunity to transfer to another store. The review work will continue, and the Company anticipates the number of closures to increase as it finalizes the review over the next several months. Outlook for Fiscal 2022 As a result of the momentum in the third quarter, and an anticipated increase in demand for COVID-19 vaccines and testing versus prior expectations, Rite Aid Corporation is raising its fiscal 2022 Adjusted EBITDA guidance. Total revenues are expected to be between $24.4 billion and $24.7 billion in fiscal 2022. Pharmacy Services Segment revenue is expected to be between $7.1 billion and $7.2 billion (net of any intercompany revenues to the Retail Pharmacy Segment). Net loss is expected to be between $230 million and $189 million. Adjusted EBITDA is expected to be between $500 million and $520 million. Adjusted net loss per share is expected to be between $0.49 and $0.04. Capital expenditures are expected to be approximately $275 million. Conference Call Broadcast Rite Aid will hold an analyst call at 8:30 a.m. Eastern Time today with remarks by Rite Aid's management team. The call will be broadcast via the Internet at https://investors.riteaid.com. The telephone replay will be available beginning at 12:00 p.m. Eastern Time on Tuesday, Dec. 21, 2021 and ending at 11:59 p.m. Eastern Time on Jan. 21, 2022. To access the replay of the call, telephone (800) 585-8367 or (416) 621-4642 and enter the seven-digit reservation number 1787289. The webcast replay of the call will also be available at https://investors.riteaid.com starting at 12 p.m. Eastern Time today. The playback will be available until the company’s next conference call. About Rite Aid Corporation Rite Aid Corporation is on the front lines of delivering healthcare services and retail products to Americans 365 days a year. Our pharmacists are uniquely positioned to engage with customers and improve their health outcomes. We provide an array of whole being health products and services for the entire family through over 2,400 retail pharmacy locations across 17 states. Through Elixir, we provide pharmacy benefits and services to millions of members nationwide. For more information, www.riteaid.com. Cautionary Statement Regarding Forward-Looking Statements Statements in this release that are not historical, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements regarding Rite Aid's outlook and guidance for fiscal 2022; the continued impact of the global coronavirus (COVID-19) pandemic on Rite Aid’s business; Rite Aid’s store closure program; and any assumptions underlying any of the foregoing. Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," and "will" and variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to: risks related to the prolonged impact of the COVID-19 global pandemic and the emerging new variants, including the government responses thereto; the impact of COVID-19 on our workforce, operations, stores, expenses, and supply chain, and the operations or behaviors of our customers, suppliers and business partners; our ability to successfully implement our store closure program and other strategies; the impact of our high level of indebtedness, the ability to refinance such indebtedness on acceptable terms and our ability to satisfy our obligations and the other covenants contained in our debt agreements; outcome of pending or new litigation, including related to Opioids, “usual and customary” pricing or other matters; our ability to monetize the CMS receivable created in our Part D business; general competitive, economic, industry, market, political (including healthcare reform) and regulatory conditions (including changes to laws or regulations relating to labor or wages), as well as other factors that impact the markets in which we operate; the impact of private and public third-party payers continued reduction in prescription drug reimbursements and efforts to encourage mail order; our ability to manage expenses and our investments in working capital; our ability to achieve the benefits of our efforts to reduce the costs of our generic and other drugs; our ability to achieve cost savings and other benefits of our restructuring efforts within our anticipated timeframe, if at all; the outcome of our continuing efforts to monitor and comply with applicable laws, regulations, policies and procedures; and our ability to partner and have relationships with health plans and health systems. These and other risks, assumptions and uncertainties are more fully described in Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K and in other documents that we file or furnish with the Securities and Exchange Commission (the “SEC”), which you are encouraged to read. To the extent that COVID-19 adversely affects our business and financial results, it may also have the effect of heightening many of such risk factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to rely on these forward-looking statements, which speak only as of the date they are made. The degree to which COVID-19 may adversely affect Rite Aid’s results and operations, including its ability to achieve its outlook for fiscal 2022 guidance, will depend on numerous evolving factors and future developments, which are highly uncertain, including, but not limited to, federal, state and local governmental policies and initiatives designed to reduce the transmission of COVID-19 and emerging new variants and how quickly and to what extent normal economic and operating conditions can resume. As a result, the impact on Rite Aid’s financial and operating results cannot be reasonably estimated with specificity at this time, but the impact could be material. Rite Aid expressly disclaims any current intention, and assumes no duty, to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise. All references to “Company” and “Rite Aid” as used throughout this release refer to Rite Aid Corporation and its affiliates. Reconciliation of Non-GAAP Financial Measures Rite Aid separately reports financial results on the basis of Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share, Adjusted EBITDA, Adjusted EBITDA Gross Profit and Adjusted EBITDA SG&A, which are non-GAAP financial measures. See the attached tables for a reconciliation of Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Adjusted EBITDA to net income (loss), and net income (loss) per diluted share, which are the most directly comparable GAAP financial measures. Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share exclude amortization expense, merger and acquisition-related costs, non-recurring litigation settlements, gains or losses on debt modifications and retirements, LIFO adjustments, goodwill and intangible asset impairment charges, restructuring-related costs, and the loss on Bartell acquisition. Rite Aid believes Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share serve as appropriate measures to be used in evaluating the performance of its business and help its investors better compare its operating performance over multiple periods. Adjusted EBITDA is defined as net income (loss) excluding the impact of income taxes, interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, goodwill and intangible asset impairment charges, inventory write-downs related to store closings, gains or losses on debt modifications and retirements, and other items (including stock-based compensation expense, merger and acquisition-related costs, non-recurring litigation settlements, severance, restructuring-related costs, costs related to facility closures, gain or loss on sale of assets, and the loss on Bartell acquisition). The add back of LIFO (credit) charge when calculating Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share removes the entire impact of LIFO (credits) charges, and effectively reflects Rite Aid's results as if the company was on a FIFO inventory basis. Rite Aid believes Adjusted EBITDA serves as an appropriate measure in evaluating the performance of its business and helps its investors better compare its operating performance with its competitors. Adjusted EBITDA Gross Profit includes LIFO adjustments, depreciation and amortization (COGS portion only) and other items. See the attached tables for a reconciliation of Adjusted EBITDA Gross Profit to Revenue, which is the most directly comparable GAAP financial measure. Adjusted EBITDA SG&A excludes depreciation and amortization (SG&A portion only), stock-based compensation expense, merger and acquisition-related costs, litigation settlements and other items. See the attached tables for a reconciliation of Adjusted EBITDA SG&A to Revenue, which is the most directly comparable GAAP financial measure. The Company believes Adjusted EBITDA Gross Profit and Adjusted EBITDA SG&A serve as appropriate measures in evaluating the performance of its business and helps its investors better compare its operating performance with its competitors. RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (unaudited) November 27, 2021 February 27, 2021 ASSETS Current assets: Cash and cash equivalents $ 155,289 $ 160,902 Accounts receivable, net 1,844,234 1,462,441 Inventories, net of LIFO reserve of $486,759 and $485,859 1,949,841 1,864,890 Prepaid expenses and other current assets 106,666 106,941 Total current assets 4,056,030 3,595,174 Property, plant and equipment, net 1,014,662 1,080,499 Operating lease right-of-use assets 2,915,748 3,064,077 Goodwill 1,108,136 1,108,136 Other intangibles, net 307,345 340,519 Deferred tax assets 14,964 14,964 Other assets 82,239 132,035 Total assets $ 9,499,124 $ 9,335,404 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt and lease financing obligations $ 6,119 $ 6,409 Accounts payable 1,547,770 1,437,421 Accrued salaries, wages and other current liabilities 873,201 642,364 Current portion of operating lease liabilities 522,272 516,752 Total current liabilities 2,949,362 2,602,946 Long-term debt, less current maturities 3,167,060 3,063,087 Long-term operating lease liabilities 2,692,669 2,829,293 Lease financing obligations, less current maturities 15,270 16,711 Other noncurrent liabilities 202,734 208,213 Total liabilities 9,027,095 8,720,250 Commitments and contingencies - - Stockholders' equity: Common stock 55,761 55,143 Additional paid-in capital 5,902,445 5,897,168 Accumulated deficit (5,462,519 ) (5,313,103 ) Accumulated other comprehensive loss (23,658 ) (24,054 ) Total stockholders' equity 472,029 615,154 Total liabilities and stockholders' equity $ 9,499,124 $ 9,335,404 RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 Revenues $ 6,228,880 $ 6,117,038 Costs and expenses: Cost of revenues 4,894,497 4,913,939 Selling, general and administrative expenses 1,276,920 1,156,355 Facility exit and impairment charges 47,455 7,453 Interest expense 47,794 50,835 Gain on sale of assets, net (5,899 ) (16,305 ) Loss on Bartell acquisition 5,346 - 6,266,113 6,112,277 (Loss) income from continuing operations before income taxes (37,233 ) 4,761 Income tax (benefit) expense (1,175 ) 437 Net (loss) income from continuing operations (36,058 ) 4,324 Net income from discontinued operations, net of tax - - Net (loss) income $ (36,058 ) $ 4,324 Basic and diluted (loss) income per share: Numerator for (loss) income per share: Net (loss) income from continuing operations attributable to common stockholders - basic and diluted $ (36,058 ) $ 4,324 Net income from discontinued operations attributable to common stockholders - basic and diluted - - (Loss) income attributable to common stockholders - basic and diluted $ (36,058 ) $ 4,324 Denominator: Basic weighted average shares 54,168 53,744 Outstanding options and restricted shares, net - 335 Diluted weighted average shares 54,168 54,079 Basic and diluted (loss) income per share Continuing operations $ (0.67 ) $ 0.08 Discontinued operations $ - $ - Net basic and diluted (loss) income per share $ (0.67 ) $ 0.08 RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (unaudited) Thirty-nine weeks ended November 27, 2021 Thirty-nine weeks ended November 28, 2020 Revenues $ 18,502,865 $ 18,126,384 Costs and expenses: Cost of revenues 14,637,683 14,564,621 Selling, general and administrative expenses 3,790,035 3,469,644 Facility exit and impairment charges 67,639 22,734 Intangible asset impairment charges - 29,852 Interest expense 145,507 151,389 Loss (gain) on debt modifications and retirements, net 3,235 (5,274 ) Gain on sale of assets, net (79 ) (17,473 ) Loss on Bartell acquisition 5,346 - 18,649,366 18,215,493 Loss from continuing operations before income taxes (146,501 ) (89,109 ) Income tax expense (benefit) 2,915 (7,534 ) Net loss from continuing operations (149,416 ) (81,575 ) Net income from discontinued operations, net of tax - 9,161 Net loss $ (149,416 ) $ (72,414 ) Basic and diluted loss per share: Numerator for loss per share: Net loss from continuing operations attributable to common stockholders - basic and diluted $ (149,416 ) $ (81,575 ) Net income from discontinued operations attributable to common stockholders - basic and diluted - 9,161 Loss attributable to common stockholders - basic and diluted $ (149,416 ) $ (72,414 ) Denominator: Basic and diluted weighted average shares 54,004 53,600 Basic and diluted loss per share Continuing operations $ (2.77 ) $ (1.52 ) Discontinued operations $ - $ 0.17 Net basic and diluted loss per share $ (2.77 ) $ (1.35 ) RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 OPERATING ACTIVITIES: Net (loss) income $ (36,058 ) $ 4,324 Net income from discontinued operations, net of tax - - Net (loss) income from continuing operations $ (36,058 ) $ 4,324 Adjustments to reconcile to net cash (used in) provided by operating activities of continuing operations: Depreciation and amortization 72,973 83,336 Facility exit and impairment charges 47,455 7,453 LIFO charge (credit) 8,886 (9,487 ) Gain on sale of assets, net (5,899 ) (16,305 ) Loss on Bartell acquisition 5,346 - Stock-based compensation expense 217 2,867 Changes in deferred taxes (1,602 ) - Changes in operating assets and liabilities: Accounts receivable (185,224 ) 128,777 Inventories (68,054 ) (24,005 ) Accounts payable 38,112 (488 ) Operating lease right-of-use assets and operating lease liabilities (7,208 ) (6,826 ) Other assets 9,761 (4,248 ) Other liabilities 118,257 57,351 Net cash (used in) provided by operating activities of continuing operations (3,038 ) 222,749 INVESTING ACTIVITIES: Payments for property, plant and equipment (39,645 ) (64,304 ) Intangible assets acquired (9,810 ) (6,131 ) Proceeds from dispositions of assets and investments 3,145 3,176 Proceeds from sale-leaseback transactions 25,605 80,551 Net cash (used in) provided by investing activities of continuing operations (20,705 ) 13,292 FINANCING ACTIVITIES: Net proceeds from (payments to) revolver 50,000 (309,000 ) Principal payments on long-term debt (1,032 ) (1,194 ) Change in zero balance cash accounts (14,243 ) 32,374 Payments for taxes related to net share settlement of equity awards (131 ) (64 ) Deferred financing costs paid (2,126 ) (74 ) Net cash provided by (used in) financing activities of continuing operations 32,468 (277,958 ) Increase (decrease) in cash and cash equivalents 8,725 (41,917 ) Cash and cash equivalents, beginning of period 146,564 92,730 Cash and cash equivalents, end of period $ 155,289 $ 50,813 RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (unaudited) Thirty-nine weeks endedNovember 27, 2021 Thirty-nine weeks endedNovember 28, 2020 OPERATING ACTIVITIES: Net loss $ (149,416 ) $ (72,414 ) Net income from discontinued operations, net of tax - 9,161 Net loss from continuing operations $ (149,416 ) $ (81,575 ) Adjustments to reconcile to net cash provided by (used in) operating activities of continuing operations: Depreciation and amortization 222,691 249,556 Facility exit and impairment charges 67,639 22,734 Intangible asset impairment charges - 29,852 LIFO charge (credit) 900 (30,303 ) Gain on sale of assets, net (79 ) (17,473 ) Loss on Bartell acquisition 5,346 - Stock-based compensation expense 8,820 8,677 Loss (gain) on debt modifications and retirements, net 3,235 (5,274 ) Changes in deferred taxes (1,602 ) - Changes in operating assets and liabilities: Accounts receivable (398,079 ) (507,778 ) Inventories (87,150 ) (19,532 ) Accounts payable 129,436 1,460 Operating lease right-of-use assets and operating lease liabilities (19,517 ) (25,319 ) Other assets 34,946 75,265 Other liabilities 219,390 45,867 Net cash provided by (used in) operating activities of continuing operations 36,560 (253,843 ) INVESTING ACTIVITIES: Payments for property, plant and equipment (145,001 ) (127,389 ) Intangible assets acquired (24,289 ) (28,703 ) Proceeds from insured loss 10,436 12,500 Proceeds from dispositions of assets and investments 7,821 9,086 Proceeds from sale-leaseback transactions 39,790 89,012 Net cash used in investing activities of continuing operations (111,243 ) (45,494 ) FINANCING ACTIVITIES: Proceeds from issuance of long-term debt 350,000 849,918 Net proceeds from revolver 300,000 341,000 Principal payments on long-term debt (544,020 ) (1,057,376 ) Change in zero balance cash accounts (15,087 ) 5,545 Financing fees paid for early debt redemption (833 ) (2,399 ) Payments for taxes related to net share settlement of equity awards (2,352 ) (2,165 ) Deferred financing costs paid (18,638 ) (14,674 ) Net cash provided by financing activities of continuing operations 69,070 119,849 Cash flows from discontinued operations: Operating activities of discontinued operations - (82,189 ) Investing activities of discontinued operations - 94,310 Net cash provided by discontinued operations - 12,121 Decrease in cash and cash equivalents (5,613 ) (167,367 ) Cash and cash equivalents, beginning of period 160,902 218,180 Cash and cash equivalents, end of period $ 155,289 $ 50,813 RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL SEGMENT OPERATING INFORMATION (Dollars in thousands) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 Retail Pharmacy Segment Revenues from continuing operations (a) $ 4,432,508 $ 4,109,592 Cost of revenues from continuing operations (a) 3,199,271 3,029,884 Gross profit from continuing operations 1,233,237 1,079,708 LIFO charge (credit) from continuing operations 8,886 (9,487 ) FIFO gross profit from continuing operations 1,242,123 1,070,221 Adjusted EBITDA gross profit from continuing operations 1,244,637 1,072,547 Gross profit as a percentage of revenues - continuing operations 27.82 % 26.27 % LIFO charge (credit) as a percentage of revenues - continuing operations 0.20 % -0.23 % FIFO gross profit as a percentage of revenues - continuing operations 28.02 % 26.04 % Adjusted EBITDA gross profit as a percentage of revenues - continuing operations 28.08 % 26.10 % Selling, general and administrative expenses from continuing operations 1,185,974 1,067,027 Adjusted EBITDA selling, general and administrative expenses from continuing operations 1,118,706 983,990 Selling, general and administrative expenses as a percentage of revenues - continuing operations 26.76 % 25.96 % Adjusted EBITDA selling, general and administrative expenses as a percentage of revenues - continuing operations 25.24 % 23.94 % Cash interest expense 44,853 47,500 Non-cash interest expense 2,941 3,335 Total interest expense 47,794 50,835 Interest expense - continuing operations 47,794 50,835 Interest expense - discontinued operations - - Adjusted EBITDA - continuing operations 125,931 88,557 Adjusted EBITDA as a percentage of revenues - continuing operations 2.84 % 2.15 % Pharmacy Services Segment Revenues (a) $ 1,858,830 $ 2,084,402 Cost of revenues (a) 1,757,684 1,961,011 Gross profit 101,146 123,391 Gross profit as a percentage of revenues 5.44 % 5.92 % Adjusted EBITDA 28,862 48,848 Adjusted EBITDA as a percentage of revenues 1.55 % 2.34 % (a) - Revenues and cost of revenues include $62,458 and $76,956 of inter-segment activity for the thirteen weeks ended November 27, 2021 and November 28, 2020, respectively, that is eliminated in consolidation. RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL SEGMENT OPERATING INFORMATION (Dollars in thousands) (unaudited) Thirty-nine weeks ended November 27, 2021 Thirty-nine weeks ended November 28, 2020 Retail Pharmacy Segment Revenues from continuing operations (a) $ 13,061,408 $ 12,250,775 Cost of revenues from continuing operations (a) 9,517,875 9,027,618 Gross profit from continuing operations 3,543,533 3,223,157 LIFO charge (credit) from continuing operations 900 (30,303 ) FIFO gross profit from continuing operations 3,544,433 3,192,854 Adjusted EBITDA gross profit from continuing operations 3,551,888 3,227,196 Gross profit as a percentage of revenues - continuing operations 27.13 % 26.31 % LIFO charge (credit) as a percentage of revenues - continuing operations 0.01 % -0.25 % FIFO gross profit as a percentage of revenues - continuing operations 27.14 % 26.06 % Adjusted EBITDA gross profit as a percentage of revenues - continuing operations 27.19 % 26.34 % Selling, general and administrative expenses from continuing operations 3,505,365 3,206,078 Adjusted EBITDA selling, general and administrative expenses from continuing operations 3,261,674 2,953,317 Selling, general and administrative expenses as a percentage of revenues - continuing operations 26.84 % 26.17 % Adjusted EBITDA selling, general and administrative expenses as a percentage of revenues - continuing operations 24.97 % 24.11 % Cash interest expense 136,476 141,635 Non-cash interest expense 9,031 9,754 Total interest expense 145,507 151,389 Interest expense - continuing operations 145,507 151,389 Interest expense - discontinued operations - - Adjusted EBITDA - continuing operations 290,214 273,879 Adjusted EBITDA as a percentage of revenues - continuing operations 2.22 % 2.24 % Pharmacy Services Segment Revenues (a) $ 5,629,325 $ 6,100,026 Cost of revenues (a) 5,307,676 5,761,420 Gross profit 321,649 338,606 Gross profit as a percentage of revenues 5.71 % 5.55 % Adjusted EBITDA 109,616 122,521 Adjusted EBITDA as a percentage of revenues 1.95 % 2.01 % (a) - Revenues and cost of revenues include $187,868 and $224,417 of inter-segment activity for the thirty-nine weeks ended November 27, 2021 and November 28, 2020, respectively, that is eliminated in consolidation. RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA (In thousands) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 Reconciliation of net (loss) income to adjusted EBITDA: Net (loss) income - continuing operations $ (36,058 ) $ 4,324 Adjustments: Interest expense 47,794 50,835 Income tax (benefit) expense (1,175 ) 437 Depreciation and amortization 72,973 83,336 LIFO charge (credit) 8,886 (9,487 ) Facility exit and impairment charges 47,455 7,453 Merger and Acquisition-related costs 3,642 1,136 Stock-based compensation expense 217 2,867 Restructuring-related costs 9,657 12,175 Inventory write-downs related to store closings 86 704 Litigation settlements 2,000 - Gain on sale of assets, net (5,899 ) (16,305 ) Loss on Bartell acquisition 5,346 - Other (131 ) (70 ) Adjusted EBITDA - continuing operations $ 154,793 $ 137,405 Percent of revenues - continuing operations 2.49 % 2.25 % RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (In thousands) (unaudited) Thirty-nine weeks ended November 27, 2021 Thirty-nine weeks ended November 28, 2020 Reconciliation of net loss to adjusted EBITDA: Net loss - continuing operations $ (149,416 ) $ (81,575 ) Adjustments: Interest expense 145,507 151,389 Income tax expense (benefit) 2,915 (7,534 ) Depreciation and amortization 222,691 249,556 LIFO charge (credit) 900 (30,303 ) Facility exit and impairment charges 67,639 22,734 Intangible asset impairment charges - 29,852 Loss (gain) on debt modifications and retirements, net 3,235 (5,274 ) Merger and Acquisition-related costs 12,119 1,136 Stock-based compensation expense 8,820 8,677 Restructuring-related costs 25,173 71,096 Inventory write-downs related to store closings 1,356 2,596 Litigation settlements 50,212 - Gain on sale of assets, net (79 ) (17,473 ) Loss on Bartell acquisition 5,346 - Other 3,412 1,523 Adjusted EBITDA - continuing operations $ 399,830 $ 396,400 Percent of revenues - continuing operations 2.16 % 2.19 % RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION ADJUSTED NET INCOME (Dollars in thousands, except per share amounts) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 Net (loss) income from continuing operations $ (36,058 ) $ 4,324 Add back - Income tax (benefit) expense (1,175 ) 437 (Loss) income before income taxes - continuing operations (37,233 ) 4,761 Adjustments: Amortization expense 18,780 21,236 LIFO charge (credit) 8,886 (9,487 ) Merger and Acquisition-related costs 3,642 1,136 Restructuring-related costs 9,657 12,175 Loss on Bartell acquisition 5,346 - Litigation settlements 2,000 - Adjusted income before income taxes - continuing operations 11,078 29,821 Adjusted income tax expense (a) 2,914 8,243 Adjusted net income from continuing operations $ 8,164 $ 21,578 Adjusted net income per diluted share - continuing operations: Numerator for adjusted net income per diluted share: Adjusted net income from continuing operations $ 8,164 $ 21,578 Denominator: Basic weighted average shares 54,168 53,744 Outstanding options and restricted shares, net 541 335 Diluted weighted average shares 54,709 54,079 Net (loss) income from continuing operations per diluted share - continuing operations $ (0.67 ) $ 0.08 Adjusted net income per diluted share - continuing operations $ 0.15 $ 0.40 (a) The fiscal year 2022 and 2021 annual effective tax rates, calculated using a federal rate plus a net state rate that excluded the impact of state NOL's, state credits and valuation allowance, was used for the thirteen weeks ended November 27, 2021 and November 28, 2020, respectively. RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION ADJUSTED NET INCOME (Dollars in thousands, except per share amounts) (unaudited) Thirty-nine weeks ended November 27, 2021 Thirty-nine weeks ended November 28, 2020 Net loss from continuing operations $ (149,416 ) $ (81,575 ) Add back - Income tax expense (benefit) 2,915 (7,534 ) Loss before income taxes - continuing operations (146,501 ) (89,109 ) Adjustments: Amortization expense 59,193 68,351 LIFO charge (credit) 900 (30,303 ) Intangible asset impairment charges - 29,852 Loss (gain) on debt modifications and retirements, net 3,235 (5,274 ) Merger and Acquisition-related costs 12,119 1,136 Restructuring-related costs 25,173 71,096 Loss on Bartell acquisition 5,346 - Litigation settlements 50,212 - Adjusted income before income taxes - continuing operations 9,677 45,749 Adjusted income tax expense (a) 2,545 12,645 Adjusted net income from continuing operations $ 7,132 $ 33,104 Adjusted net income per diluted share - continuing operations: Numerator for adjusted net income per diluted share: Adjusted net income from continuing operations $ 7,132 $ 33,104 Denominator: Basic weighted average shares 54,004 53,600 Outstanding options and restricted shares, net 998 754 Diluted weighted average shares 55,002 54,354 Net loss from continuing operations per diluted share - continuing operations $ (2.77 ) $ (1.52 ) Adjusted net income per diluted share - continuing operations $ 0.13 $ 0.61 (a) The fiscal year 2022 and 2021 annual effective tax rates, calculated using a federal rate plus a net state rate that excluded the impact of state NOL's, state credits and valuation allowance, was used for the thirty-nine weeks ended November 27, 2021 and November 28, 2020, respectively. RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF ADJUSTED EBITDA GROSS PROFIT AND RECONCILIATION OF ADJUSTED EBITDA SELLING, GENERAL AND ADMINISTRATIVE EXPENSES- RETAIL PHARMACY SEGMENT (In thousands) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 Reconciliation of adjusted EBITDA gross profit: Revenues $ 4,432,508 $ 4,109,592 Gross Profit 1,233,237 1,079,708 Addback: LIFO charge (credit) 8,886 (9,487 ) Depreciation and amortization (cost of goods sold portion only) 2,489 1,945 Other 25 381 Adjusted EBITDA gross profit - continuing operations $ 1,244,637 $ 1,072,547 Percent of revenues - continuing operations 28.08 % 26.10 % Reconciliation of adjusted EBITDA selling, general and administrative expenses: Revenues $ 4,432,508 $ 4,109,592 Selling, general and administrative expenses 1,185,974 1,067,027 Less: Depreciation and amortization (SG&A portion only) 58,087 67,641 Stock-based compensation expense (174 ) 2,429 Merger and Acquisition-related costs 3,642 1,136 Restructuring-related costs 3,746 11,605 Litigation settlements 2,000 - Other (33 ) 226 Adjusted EBITDA selling, general and administrative expenses - continuing operations $ 1,118,706 $ 983,990 Percent of revenues - continuing operations 25.24 % 23.94 % Adjusted EBITDA - continuing operations $ 125,931 $ 88,557 RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF ADJUSTED EBITDA GROSS PROFIT AND RECONCILIATION OF ADJUSTED EBITDA SELLING, GENERAL AND ADMINISTRATIVE EXPENSES- RETAIL PHARMACY SEGMENT (In thousands) (unaudited) Thirty-nine weeks ended November 27, 2021 Thirty-nine weeks ended November 28, 2020 Reconciliation of adjusted EBITDA gross profit: Revenues $ 13,061,408 $ 12,250,775 Gross Profit 3,543,533 3,223,157 Addback: LIFO charge (credit) 900 (30,303 ) Depreciation and amortization (cost of goods sold portion only) 6,536 6,775 Restructuring-related costs - SKU optimization charges - 25,763 Other 919 1,804 Adjusted EBITDA gross profit - continuing operations $ 3,551,888 $ 3,227,196 Percent of revenues - continuing operations 27.19 % 26.34 % Reconciliation of adjusted EBITDA selling, general and administrative expenses: Revenues $ 13,061,408 $ 12,250,775 Selling, general and administrative expenses 3,505,365 3,206,078 Less: Depreciation and amortization (SG&A portion only) 176,936 199,434 Stock-based compensation expense 8,292 7,785 Merger and Acquisition-related costs 12,119 1,136 Restructuring-related costs 7,951 41,992 Litigation settlements 34,448 - Other 3,945 2,414 Adjusted EBITDA selling, general and administrative expenses - continuing operations $ 3,261,674 $ 2,953,317 Percent of revenues - continuing operations 24.97 % 24.11 % Adjusted EBITDA - continuing operations $ 290,214 $ 273,879 RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED EBITDA GUIDANCE YEAR ENDING FEBRUARY 26, 2022 (In thousands) (unaudited) Guidance Range Low High Total Revenues $ 24,400,000 $ 24,700,000 Pharmacy Services Segment Revenues $ 7,100,000 $ 7,200,000 Gross Capital Expenditures $ 275,000 $ 275,000 Reconciliation of net loss to adjusted EBITDA: Net loss $ (229,500 ) $ (188,500 ) Adjustments: Interest expense 195,000 195,000 Income tax expense 3,000 - Depreciation and amortization 302,000 302,000 LIFO charge 5,000 - Facility exit and impairment charges 105,000 95,000 Loss on debt modifications and retirements, net 3,200 3,200 Merger and Acquisition-related costs 13,000 13,000 Restructuring-related costs 35,000 35,000 Litigation settlements 50,000 50,000 Gain on sale of assets, net (7,000 ) (10,000 ) Loss on Bartell acquisition 5,300 5,300 Other 20,000 20,000 Adjusted EBITDA $ 500,000 $ 520,000 RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED NET LOSS GUIDANCE YEAR ENDING FEBRUARY 26, 2022 (In thousands) (unaudited) Guidance Range Low High Net loss $ (229,500 ) $ (188,500 ) Add back - income tax expense 3,000 - Loss before income taxes (226,500 ) (188,500 ) Adjustments: Amortization expense 79,000 79,000 LIFO charge 5,000 - Loss on debt modifications and retirements, net 3,200 3,200 Merger and Acquisition-related costs 13,000 13,000 Restructuring-related costs 35,000 35,000 Loss on Bartell acquisition 5,300 5,300 Litigation settlements 50,000 50,000 Adjusted loss before adjusted income taxes (36,000 ) (3,000 ) Adjusted income tax benefit (9,500 ) (800 ) Adjusted net loss $ (26,500 ) $ (2,200 ) Diluted adjusted net loss per share $ (0.49 ) $ (0.04 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20211220005684/en/Contacts INVESTORS: Trent Kruse (717) 975-3710 investor@riteaid.com MEDIA: Jeffrey Olson 717-975-5718 press@riteaid.com
Revenues from Continuing Operations Increased 1.8 Percent to $6.23 Billion Compared to Prior Year Third Quarter Revenues from Continuing Operations of $6.12 Billion Third Quarter Net Loss from Continuing Operations of $36.1 Million or $0.67 Per Share, Compared to the Prior Year Third Quarter Net Income of $4.3 Million or $0.08 Per Share Third Quarter Adjusted Net Income from Continuing Operations of $8.2 Million or $0.15 Per Share, Compared to the Prior Year Third Quarter Adjusted Net Income of $21.6 Million or $0.40 Per Share Third Quarter Adjusted EBITDA from Continuing Operations Increased 12.7 Percent to $154.8 Million, Compared to the Prior Year Third Quarter Adjusted EBITDA of $137.4 Million Rite Aid Raises Adjusted EBITDA Guidance for Fiscal 2022 Company Announces Rebate Aggregation Agreement between Elixir and Prime Therapeutics Company Announces Store Closure Plan to Reduce Costs and Improve Profitability
Rite Aid Corporation (NYSE: RAD) today reported operating results for its third fiscal quarter ended November 27, 2021. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20211220005684/en/(Photo: Business Wire) For the third quarter, the company reported net loss from continuing operations of $36.1 million, or $0.67 loss per share, Adjusted net income from continuing operations of $8.2 million, or $0.15 income per share, and Adjusted EBITDA from continuing operations of $154.8 million, or 2.5 percent of revenues. “We delivered a solid quarter as we grew Adjusted EBITDA by 12.7 percent versus last year,” said Heyward Donigan, president and chief executive officer, Rite Aid. “Despite challenges in the labor market, our pharmacists and store teams were able to meet the unprecedented volumes for COVID and flu immunizations, COVID testing and other clinical services, which clearly demonstrates our Lean work to free up capacity is paying off.” “We have also taken steps to drive increased value for all of Elixir’s PBM clients by entering into a new rebate aggregation agreement with Prime Therapeutics. In addition to the benefit to clients, this partnership will enable Elixir to be more competitive in the marketplace and improve profit margins.” “Today, we also announced the first phase of a store closure program to reduce costs, drive improved profitability and ensure that we have a healthy foundation to grow from, with the right stores in the right locations, for the communities we serve and for our business. We have identified an initial 63 stores for closure that is expected to provide an annual EBITDA benefit of approximately $25 million.” “We are encouraged by our recent momentum and expect to deliver a significant increase in our fourth quarter Adjusted EBITDA results compared to last year. As a result, we are raising our guidance for Adjusted EBITDA for Fiscal 2022.” “Finally, I want to thank each and every one of our associates for everything they do. It is my greatest privilege to work alongside such a tremendous team, and I am forever grateful for their passion and commitment to our company, our customers and each other.” Consolidated Third Quarter Summary (dollars in thousands) Thirteen Week Period Ended Thirty-nine Week Period Ended November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020 Revenues from continuing operations $ 6,228,880 $ 6,117,038 $ 18,502,865 $ 18,126,384 Net (loss) income from continuing operations (36,058) 4,324 (149,416) (81,575) Adjusted EBITDA from continuing operations 154,793 137,405 399,830 396,400 Revenues from continuing operations for the quarter were $6.23 billion compared to revenues from continuing operations of $6.12 billion in the prior year’s quarter. The 1.8 percent increase in revenues was driven by growth at the Retail Pharmacy Segment, partially offset by a decline at the Pharmacy Services Segment. Net loss from continuing operations was $36.1 million, or $0.67 per share, compared to last year’s third quarter net income from continuing operations of $4.3 million, or $0.08 per share. The increase in net loss is due primarily to higher facility exit and impairment charges driven by the Company’s store closure decisions. Other variance drivers include a LIFO charge in the current quarter compared to a LIFO credit in the prior year third quarter and a lower gain on the sale of assets. These items were partially offset by an increase in Adjusted EBITDA and lower depreciation and amortization expense. Retail Pharmacy Segment (dollars in thousands) Thirteen Week Period Ended Thirty-nine Week Period Ended November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020 Revenues from continuing operations $ 4,432,508 $ 4,109,592 $ 13,061,408 $ 12,250,775 Adjusted EBITDA from continuing operations 125,931 88,557 290,214 273,879 Retail Pharmacy Segment revenues from continuing operations increased 7.9 percent over the prior year quarter, driven by an increase in same store sales and the inclusion of Bartell’s results this quarter. Same store sales from continuing operations for the third quarter increased 4.4 percent over the prior year period, consisting of a 5.9 percent increase in pharmacy sales and a 0.4 percent increase in front-end sales. Front-end same store sales, excluding cigarettes and tobacco products, increased 1.0 percent. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, increased 7.9 percent over the prior year period. In addition to the benefit from 4 million COVID-19 vaccinations, maintenance prescriptions increased 1.7 percent while other acute prescriptions increased 3.9 percent on a same store basis when excluding COVID-19, flu and all other ancillary vaccinations. Prescription sales from continuing operations accounted for 71.1 percent of total drugstore sales. Total store count at the end of the third quarter was 2,488. Retail Pharmacy Segment Adjusted EBITDA from continuing operations was $125.9 million, or 2.8 percent of revenues, for the third quarter compared to last year’s third quarter Adjusted EBITDA from continuing operations of $88.6 million, or 2.2 percent of revenues. The increase in Adjusted EBITDA was due to increased gross profit, partially offset by an increase in selling, general and administrative (SG&A) expenses. Gross profit benefited from higher pharmacy same store sales, including immunizations, partially offset by pharmacy reimbursement rate pressures that were not fully offset by generic drug cost reductions and an increase in front-end gross profit resulting from higher front-end same store sales and a reduction in markdowns. SG&A expenses were negatively impacted by incremental payroll costs to support COVID immunizations, increases in bonus expense for store, field and corporate associates, increases in workers compensation costs and cycling the benefit from the prior year change to modernize our associate PTO plans. Pharmacy Services Segment (dollars in thousands) Thirteen Week Period Ended Thirty-nine Week Period Ended November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020 Revenues from continuing operations $ 1,858,830 $ 2,084,402 $ 5,629,325 $ 6,100,026 Adjusted EBITDA from continuing operations 28,862 48,848 109,616 122,521 Pharmacy Services Segment revenues were $1.9 billion for the quarter, a decrease of 10.8 percent compared to the prior year quarter. The decrease in revenues was primarily the result of a planned decrease in Elixir Insurance membership and a previously announced client loss. Pharmacy Services Segment Adjusted EBITDA from continuing operations was $28.9 million, or 1.6 percent of revenues, for the third quarter compared to last year’s third quarter Adjusted EBITDA from continuing operations of $48.8 million, or 2.3 percent of revenues. Gross profit dollars were negatively impacted from the decline in revenues, a reduction in rebates and an increase in the Medical Loss Ratio at Elixir Insurance. SG&A expenses improved due to reduced payroll and a reduction in broker commissions. Retail Store Base Assessment Rite Aid is conducting a rigorous assessment of its store base and has implemented a store closure program. The program’s primary focus is to reduce costs, drive improved profitability and ensure that Rite Aid has a healthy foundation to grow from, with the right stores in the right locations, for the communities it serves and for its business. As a result of this ongoing review, Rite Aid identified 63 stores for closure that is expected to provide an annual EBITDA benefit of approximately $25 million. The closures began this past November. Associates impacted by these store closures are being offered the opportunity to transfer to another store. The review work will continue, and the Company anticipates the number of closures to increase as it finalizes the review over the next several months. Outlook for Fiscal 2022 As a result of the momentum in the third quarter, and an anticipated increase in demand for COVID-19 vaccines and testing versus prior expectations, Rite Aid Corporation is raising its fiscal 2022 Adjusted EBITDA guidance. Total revenues are expected to be between $24.4 billion and $24.7 billion in fiscal 2022. Pharmacy Services Segment revenue is expected to be between $7.1 billion and $7.2 billion (net of any intercompany revenues to the Retail Pharmacy Segment). Net loss is expected to be between $230 million and $189 million. Adjusted EBITDA is expected to be between $500 million and $520 million. Adjusted net loss per share is expected to be between $0.49 and $0.04. Capital expenditures are expected to be approximately $275 million. Conference Call Broadcast Rite Aid will hold an analyst call at 8:30 a.m. Eastern Time today with remarks by Rite Aid's management team. The call will be broadcast via the Internet at https://investors.riteaid.com. The telephone replay will be available beginning at 12:00 p.m. Eastern Time on Tuesday, Dec. 21, 2021 and ending at 11:59 p.m. Eastern Time on Jan. 21, 2022. To access the replay of the call, telephone (800) 585-8367 or (416) 621-4642 and enter the seven-digit reservation number 1787289. The webcast replay of the call will also be available at https://investors.riteaid.com starting at 12 p.m. Eastern Time today. The playback will be available until the company’s next conference call. About Rite Aid Corporation Rite Aid Corporation is on the front lines of delivering healthcare services and retail products to Americans 365 days a year. Our pharmacists are uniquely positioned to engage with customers and improve their health outcomes. We provide an array of whole being health products and services for the entire family through over 2,400 retail pharmacy locations across 17 states. Through Elixir, we provide pharmacy benefits and services to millions of members nationwide. For more information, www.riteaid.com. Cautionary Statement Regarding Forward-Looking Statements Statements in this release that are not historical, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements regarding Rite Aid's outlook and guidance for fiscal 2022; the continued impact of the global coronavirus (COVID-19) pandemic on Rite Aid’s business; Rite Aid’s store closure program; and any assumptions underlying any of the foregoing. Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," and "will" and variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to: risks related to the prolonged impact of the COVID-19 global pandemic and the emerging new variants, including the government responses thereto; the impact of COVID-19 on our workforce, operations, stores, expenses, and supply chain, and the operations or behaviors of our customers, suppliers and business partners; our ability to successfully implement our store closure program and other strategies; the impact of our high level of indebtedness, the ability to refinance such indebtedness on acceptable terms and our ability to satisfy our obligations and the other covenants contained in our debt agreements; outcome of pending or new litigation, including related to Opioids, “usual and customary” pricing or other matters; our ability to monetize the CMS receivable created in our Part D business; general competitive, economic, industry, market, political (including healthcare reform) and regulatory conditions (including changes to laws or regulations relating to labor or wages), as well as other factors that impact the markets in which we operate; the impact of private and public third-party payers continued reduction in prescription drug reimbursements and efforts to encourage mail order; our ability to manage expenses and our investments in working capital; our ability to achieve the benefits of our efforts to reduce the costs of our generic and other drugs; our ability to achieve cost savings and other benefits of our restructuring efforts within our anticipated timeframe, if at all; the outcome of our continuing efforts to monitor and comply with applicable laws, regulations, policies and procedures; and our ability to partner and have relationships with health plans and health systems. These and other risks, assumptions and uncertainties are more fully described in Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K and in other documents that we file or furnish with the Securities and Exchange Commission (the “SEC”), which you are encouraged to read. To the extent that COVID-19 adversely affects our business and financial results, it may also have the effect of heightening many of such risk factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to rely on these forward-looking statements, which speak only as of the date they are made. The degree to which COVID-19 may adversely affect Rite Aid’s results and operations, including its ability to achieve its outlook for fiscal 2022 guidance, will depend on numerous evolving factors and future developments, which are highly uncertain, including, but not limited to, federal, state and local governmental policies and initiatives designed to reduce the transmission of COVID-19 and emerging new variants and how quickly and to what extent normal economic and operating conditions can resume. As a result, the impact on Rite Aid’s financial and operating results cannot be reasonably estimated with specificity at this time, but the impact could be material. Rite Aid expressly disclaims any current intention, and assumes no duty, to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise. All references to “Company” and “Rite Aid” as used throughout this release refer to Rite Aid Corporation and its affiliates. Reconciliation of Non-GAAP Financial Measures Rite Aid separately reports financial results on the basis of Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share, Adjusted EBITDA, Adjusted EBITDA Gross Profit and Adjusted EBITDA SG&A, which are non-GAAP financial measures. See the attached tables for a reconciliation of Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Adjusted EBITDA to net income (loss), and net income (loss) per diluted share, which are the most directly comparable GAAP financial measures. Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share exclude amortization expense, merger and acquisition-related costs, non-recurring litigation settlements, gains or losses on debt modifications and retirements, LIFO adjustments, goodwill and intangible asset impairment charges, restructuring-related costs, and the loss on Bartell acquisition. Rite Aid believes Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share serve as appropriate measures to be used in evaluating the performance of its business and help its investors better compare its operating performance over multiple periods. Adjusted EBITDA is defined as net income (loss) excluding the impact of income taxes, interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, goodwill and intangible asset impairment charges, inventory write-downs related to store closings, gains or losses on debt modifications and retirements, and other items (including stock-based compensation expense, merger and acquisition-related costs, non-recurring litigation settlements, severance, restructuring-related costs, costs related to facility closures, gain or loss on sale of assets, and the loss on Bartell acquisition). The add back of LIFO (credit) charge when calculating Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share removes the entire impact of LIFO (credits) charges, and effectively reflects Rite Aid's results as if the company was on a FIFO inventory basis. Rite Aid believes Adjusted EBITDA serves as an appropriate measure in evaluating the performance of its business and helps its investors better compare its operating performance with its competitors. Adjusted EBITDA Gross Profit includes LIFO adjustments, depreciation and amortization (COGS portion only) and other items. See the attached tables for a reconciliation of Adjusted EBITDA Gross Profit to Revenue, which is the most directly comparable GAAP financial measure. Adjusted EBITDA SG&A excludes depreciation and amortization (SG&A portion only), stock-based compensation expense, merger and acquisition-related costs, litigation settlements and other items. See the attached tables for a reconciliation of Adjusted EBITDA SG&A to Revenue, which is the most directly comparable GAAP financial measure. The Company believes Adjusted EBITDA Gross Profit and Adjusted EBITDA SG&A serve as appropriate measures in evaluating the performance of its business and helps its investors better compare its operating performance with its competitors. RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (unaudited) November 27, 2021 February 27, 2021 ASSETS Current assets: Cash and cash equivalents $ 155,289 $ 160,902 Accounts receivable, net 1,844,234 1,462,441 Inventories, net of LIFO reserve of $486,759 and $485,859 1,949,841 1,864,890 Prepaid expenses and other current assets 106,666 106,941 Total current assets 4,056,030 3,595,174 Property, plant and equipment, net 1,014,662 1,080,499 Operating lease right-of-use assets 2,915,748 3,064,077 Goodwill 1,108,136 1,108,136 Other intangibles, net 307,345 340,519 Deferred tax assets 14,964 14,964 Other assets 82,239 132,035 Total assets $ 9,499,124 $ 9,335,404 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt and lease financing obligations $ 6,119 $ 6,409 Accounts payable 1,547,770 1,437,421 Accrued salaries, wages and other current liabilities 873,201 642,364 Current portion of operating lease liabilities 522,272 516,752 Total current liabilities 2,949,362 2,602,946 Long-term debt, less current maturities 3,167,060 3,063,087 Long-term operating lease liabilities 2,692,669 2,829,293 Lease financing obligations, less current maturities 15,270 16,711 Other noncurrent liabilities 202,734 208,213 Total liabilities 9,027,095 8,720,250 Commitments and contingencies - - Stockholders' equity: Common stock 55,761 55,143 Additional paid-in capital 5,902,445 5,897,168 Accumulated deficit (5,462,519 ) (5,313,103 ) Accumulated other comprehensive loss (23,658 ) (24,054 ) Total stockholders' equity 472,029 615,154 Total liabilities and stockholders' equity $ 9,499,124 $ 9,335,404 RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 Revenues $ 6,228,880 $ 6,117,038 Costs and expenses: Cost of revenues 4,894,497 4,913,939 Selling, general and administrative expenses 1,276,920 1,156,355 Facility exit and impairment charges 47,455 7,453 Interest expense 47,794 50,835 Gain on sale of assets, net (5,899 ) (16,305 ) Loss on Bartell acquisition 5,346 - 6,266,113 6,112,277 (Loss) income from continuing operations before income taxes (37,233 ) 4,761 Income tax (benefit) expense (1,175 ) 437 Net (loss) income from continuing operations (36,058 ) 4,324 Net income from discontinued operations, net of tax - - Net (loss) income $ (36,058 ) $ 4,324 Basic and diluted (loss) income per share: Numerator for (loss) income per share: Net (loss) income from continuing operations attributable to common stockholders - basic and diluted $ (36,058 ) $ 4,324 Net income from discontinued operations attributable to common stockholders - basic and diluted - - (Loss) income attributable to common stockholders - basic and diluted $ (36,058 ) $ 4,324 Denominator: Basic weighted average shares 54,168 53,744 Outstanding options and restricted shares, net - 335 Diluted weighted average shares 54,168 54,079 Basic and diluted (loss) income per share Continuing operations $ (0.67 ) $ 0.08 Discontinued operations $ - $ - Net basic and diluted (loss) income per share $ (0.67 ) $ 0.08 RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (unaudited) Thirty-nine weeks ended November 27, 2021 Thirty-nine weeks ended November 28, 2020 Revenues $ 18,502,865 $ 18,126,384 Costs and expenses: Cost of revenues 14,637,683 14,564,621 Selling, general and administrative expenses 3,790,035 3,469,644 Facility exit and impairment charges 67,639 22,734 Intangible asset impairment charges - 29,852 Interest expense 145,507 151,389 Loss (gain) on debt modifications and retirements, net 3,235 (5,274 ) Gain on sale of assets, net (79 ) (17,473 ) Loss on Bartell acquisition 5,346 - 18,649,366 18,215,493 Loss from continuing operations before income taxes (146,501 ) (89,109 ) Income tax expense (benefit) 2,915 (7,534 ) Net loss from continuing operations (149,416 ) (81,575 ) Net income from discontinued operations, net of tax - 9,161 Net loss $ (149,416 ) $ (72,414 ) Basic and diluted loss per share: Numerator for loss per share: Net loss from continuing operations attributable to common stockholders - basic and diluted $ (149,416 ) $ (81,575 ) Net income from discontinued operations attributable to common stockholders - basic and diluted - 9,161 Loss attributable to common stockholders - basic and diluted $ (149,416 ) $ (72,414 ) Denominator: Basic and diluted weighted average shares 54,004 53,600 Basic and diluted loss per share Continuing operations $ (2.77 ) $ (1.52 ) Discontinued operations $ - $ 0.17 Net basic and diluted loss per share $ (2.77 ) $ (1.35 ) RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 OPERATING ACTIVITIES: Net (loss) income $ (36,058 ) $ 4,324 Net income from discontinued operations, net of tax - - Net (loss) income from continuing operations $ (36,058 ) $ 4,324 Adjustments to reconcile to net cash (used in) provided by operating activities of continuing operations: Depreciation and amortization 72,973 83,336 Facility exit and impairment charges 47,455 7,453 LIFO charge (credit) 8,886 (9,487 ) Gain on sale of assets, net (5,899 ) (16,305 ) Loss on Bartell acquisition 5,346 - Stock-based compensation expense 217 2,867 Changes in deferred taxes (1,602 ) - Changes in operating assets and liabilities: Accounts receivable (185,224 ) 128,777 Inventories (68,054 ) (24,005 ) Accounts payable 38,112 (488 ) Operating lease right-of-use assets and operating lease liabilities (7,208 ) (6,826 ) Other assets 9,761 (4,248 ) Other liabilities 118,257 57,351 Net cash (used in) provided by operating activities of continuing operations (3,038 ) 222,749 INVESTING ACTIVITIES: Payments for property, plant and equipment (39,645 ) (64,304 ) Intangible assets acquired (9,810 ) (6,131 ) Proceeds from dispositions of assets and investments 3,145 3,176 Proceeds from sale-leaseback transactions 25,605 80,551 Net cash (used in) provided by investing activities of continuing operations (20,705 ) 13,292 FINANCING ACTIVITIES: Net proceeds from (payments to) revolver 50,000 (309,000 ) Principal payments on long-term debt (1,032 ) (1,194 ) Change in zero balance cash accounts (14,243 ) 32,374 Payments for taxes related to net share settlement of equity awards (131 ) (64 ) Deferred financing costs paid (2,126 ) (74 ) Net cash provided by (used in) financing activities of continuing operations 32,468 (277,958 ) Increase (decrease) in cash and cash equivalents 8,725 (41,917 ) Cash and cash equivalents, beginning of period 146,564 92,730 Cash and cash equivalents, end of period $ 155,289 $ 50,813 RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (unaudited) Thirty-nine weeks endedNovember 27, 2021 Thirty-nine weeks endedNovember 28, 2020 OPERATING ACTIVITIES: Net loss $ (149,416 ) $ (72,414 ) Net income from discontinued operations, net of tax - 9,161 Net loss from continuing operations $ (149,416 ) $ (81,575 ) Adjustments to reconcile to net cash provided by (used in) operating activities of continuing operations: Depreciation and amortization 222,691 249,556 Facility exit and impairment charges 67,639 22,734 Intangible asset impairment charges - 29,852 LIFO charge (credit) 900 (30,303 ) Gain on sale of assets, net (79 ) (17,473 ) Loss on Bartell acquisition 5,346 - Stock-based compensation expense 8,820 8,677 Loss (gain) on debt modifications and retirements, net 3,235 (5,274 ) Changes in deferred taxes (1,602 ) - Changes in operating assets and liabilities: Accounts receivable (398,079 ) (507,778 ) Inventories (87,150 ) (19,532 ) Accounts payable 129,436 1,460 Operating lease right-of-use assets and operating lease liabilities (19,517 ) (25,319 ) Other assets 34,946 75,265 Other liabilities 219,390 45,867 Net cash provided by (used in) operating activities of continuing operations 36,560 (253,843 ) INVESTING ACTIVITIES: Payments for property, plant and equipment (145,001 ) (127,389 ) Intangible assets acquired (24,289 ) (28,703 ) Proceeds from insured loss 10,436 12,500 Proceeds from dispositions of assets and investments 7,821 9,086 Proceeds from sale-leaseback transactions 39,790 89,012 Net cash used in investing activities of continuing operations (111,243 ) (45,494 ) FINANCING ACTIVITIES: Proceeds from issuance of long-term debt 350,000 849,918 Net proceeds from revolver 300,000 341,000 Principal payments on long-term debt (544,020 ) (1,057,376 ) Change in zero balance cash accounts (15,087 ) 5,545 Financing fees paid for early debt redemption (833 ) (2,399 ) Payments for taxes related to net share settlement of equity awards (2,352 ) (2,165 ) Deferred financing costs paid (18,638 ) (14,674 ) Net cash provided by financing activities of continuing operations 69,070 119,849 Cash flows from discontinued operations: Operating activities of discontinued operations - (82,189 ) Investing activities of discontinued operations - 94,310 Net cash provided by discontinued operations - 12,121 Decrease in cash and cash equivalents (5,613 ) (167,367 ) Cash and cash equivalents, beginning of period 160,902 218,180 Cash and cash equivalents, end of period $ 155,289 $ 50,813 RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL SEGMENT OPERATING INFORMATION (Dollars in thousands) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 Retail Pharmacy Segment Revenues from continuing operations (a) $ 4,432,508 $ 4,109,592 Cost of revenues from continuing operations (a) 3,199,271 3,029,884 Gross profit from continuing operations 1,233,237 1,079,708 LIFO charge (credit) from continuing operations 8,886 (9,487 ) FIFO gross profit from continuing operations 1,242,123 1,070,221 Adjusted EBITDA gross profit from continuing operations 1,244,637 1,072,547 Gross profit as a percentage of revenues - continuing operations 27.82 % 26.27 % LIFO charge (credit) as a percentage of revenues - continuing operations 0.20 % -0.23 % FIFO gross profit as a percentage of revenues - continuing operations 28.02 % 26.04 % Adjusted EBITDA gross profit as a percentage of revenues - continuing operations 28.08 % 26.10 % Selling, general and administrative expenses from continuing operations 1,185,974 1,067,027 Adjusted EBITDA selling, general and administrative expenses from continuing operations 1,118,706 983,990 Selling, general and administrative expenses as a percentage of revenues - continuing operations 26.76 % 25.96 % Adjusted EBITDA selling, general and administrative expenses as a percentage of revenues - continuing operations 25.24 % 23.94 % Cash interest expense 44,853 47,500 Non-cash interest expense 2,941 3,335 Total interest expense 47,794 50,835 Interest expense - continuing operations 47,794 50,835 Interest expense - discontinued operations - - Adjusted EBITDA - continuing operations 125,931 88,557 Adjusted EBITDA as a percentage of revenues - continuing operations 2.84 % 2.15 % Pharmacy Services Segment Revenues (a) $ 1,858,830 $ 2,084,402 Cost of revenues (a) 1,757,684 1,961,011 Gross profit 101,146 123,391 Gross profit as a percentage of revenues 5.44 % 5.92 % Adjusted EBITDA 28,862 48,848 Adjusted EBITDA as a percentage of revenues 1.55 % 2.34 % (a) - Revenues and cost of revenues include $62,458 and $76,956 of inter-segment activity for the thirteen weeks ended November 27, 2021 and November 28, 2020, respectively, that is eliminated in consolidation. RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL SEGMENT OPERATING INFORMATION (Dollars in thousands) (unaudited) Thirty-nine weeks ended November 27, 2021 Thirty-nine weeks ended November 28, 2020 Retail Pharmacy Segment Revenues from continuing operations (a) $ 13,061,408 $ 12,250,775 Cost of revenues from continuing operations (a) 9,517,875 9,027,618 Gross profit from continuing operations 3,543,533 3,223,157 LIFO charge (credit) from continuing operations 900 (30,303 ) FIFO gross profit from continuing operations 3,544,433 3,192,854 Adjusted EBITDA gross profit from continuing operations 3,551,888 3,227,196 Gross profit as a percentage of revenues - continuing operations 27.13 % 26.31 % LIFO charge (credit) as a percentage of revenues - continuing operations 0.01 % -0.25 % FIFO gross profit as a percentage of revenues - continuing operations 27.14 % 26.06 % Adjusted EBITDA gross profit as a percentage of revenues - continuing operations 27.19 % 26.34 % Selling, general and administrative expenses from continuing operations 3,505,365 3,206,078 Adjusted EBITDA selling, general and administrative expenses from continuing operations 3,261,674 2,953,317 Selling, general and administrative expenses as a percentage of revenues - continuing operations 26.84 % 26.17 % Adjusted EBITDA selling, general and administrative expenses as a percentage of revenues - continuing operations 24.97 % 24.11 % Cash interest expense 136,476 141,635 Non-cash interest expense 9,031 9,754 Total interest expense 145,507 151,389 Interest expense - continuing operations 145,507 151,389 Interest expense - discontinued operations - - Adjusted EBITDA - continuing operations 290,214 273,879 Adjusted EBITDA as a percentage of revenues - continuing operations 2.22 % 2.24 % Pharmacy Services Segment Revenues (a) $ 5,629,325 $ 6,100,026 Cost of revenues (a) 5,307,676 5,761,420 Gross profit 321,649 338,606 Gross profit as a percentage of revenues 5.71 % 5.55 % Adjusted EBITDA 109,616 122,521 Adjusted EBITDA as a percentage of revenues 1.95 % 2.01 % (a) - Revenues and cost of revenues include $187,868 and $224,417 of inter-segment activity for the thirty-nine weeks ended November 27, 2021 and November 28, 2020, respectively, that is eliminated in consolidation. RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA (In thousands) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 Reconciliation of net (loss) income to adjusted EBITDA: Net (loss) income - continuing operations $ (36,058 ) $ 4,324 Adjustments: Interest expense 47,794 50,835 Income tax (benefit) expense (1,175 ) 437 Depreciation and amortization 72,973 83,336 LIFO charge (credit) 8,886 (9,487 ) Facility exit and impairment charges 47,455 7,453 Merger and Acquisition-related costs 3,642 1,136 Stock-based compensation expense 217 2,867 Restructuring-related costs 9,657 12,175 Inventory write-downs related to store closings 86 704 Litigation settlements 2,000 - Gain on sale of assets, net (5,899 ) (16,305 ) Loss on Bartell acquisition 5,346 - Other (131 ) (70 ) Adjusted EBITDA - continuing operations $ 154,793 $ 137,405 Percent of revenues - continuing operations 2.49 % 2.25 % RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (In thousands) (unaudited) Thirty-nine weeks ended November 27, 2021 Thirty-nine weeks ended November 28, 2020 Reconciliation of net loss to adjusted EBITDA: Net loss - continuing operations $ (149,416 ) $ (81,575 ) Adjustments: Interest expense 145,507 151,389 Income tax expense (benefit) 2,915 (7,534 ) Depreciation and amortization 222,691 249,556 LIFO charge (credit) 900 (30,303 ) Facility exit and impairment charges 67,639 22,734 Intangible asset impairment charges - 29,852 Loss (gain) on debt modifications and retirements, net 3,235 (5,274 ) Merger and Acquisition-related costs 12,119 1,136 Stock-based compensation expense 8,820 8,677 Restructuring-related costs 25,173 71,096 Inventory write-downs related to store closings 1,356 2,596 Litigation settlements 50,212 - Gain on sale of assets, net (79 ) (17,473 ) Loss on Bartell acquisition 5,346 - Other 3,412 1,523 Adjusted EBITDA - continuing operations $ 399,830 $ 396,400 Percent of revenues - continuing operations 2.16 % 2.19 % RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION ADJUSTED NET INCOME (Dollars in thousands, except per share amounts) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 Net (loss) income from continuing operations $ (36,058 ) $ 4,324 Add back - Income tax (benefit) expense (1,175 ) 437 (Loss) income before income taxes - continuing operations (37,233 ) 4,761 Adjustments: Amortization expense 18,780 21,236 LIFO charge (credit) 8,886 (9,487 ) Merger and Acquisition-related costs 3,642 1,136 Restructuring-related costs 9,657 12,175 Loss on Bartell acquisition 5,346 - Litigation settlements 2,000 - Adjusted income before income taxes - continuing operations 11,078 29,821 Adjusted income tax expense (a) 2,914 8,243 Adjusted net income from continuing operations $ 8,164 $ 21,578 Adjusted net income per diluted share - continuing operations: Numerator for adjusted net income per diluted share: Adjusted net income from continuing operations $ 8,164 $ 21,578 Denominator: Basic weighted average shares 54,168 53,744 Outstanding options and restricted shares, net 541 335 Diluted weighted average shares 54,709 54,079 Net (loss) income from continuing operations per diluted share - continuing operations $ (0.67 ) $ 0.08 Adjusted net income per diluted share - continuing operations $ 0.15 $ 0.40 (a) The fiscal year 2022 and 2021 annual effective tax rates, calculated using a federal rate plus a net state rate that excluded the impact of state NOL's, state credits and valuation allowance, was used for the thirteen weeks ended November 27, 2021 and November 28, 2020, respectively. RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION ADJUSTED NET INCOME (Dollars in thousands, except per share amounts) (unaudited) Thirty-nine weeks ended November 27, 2021 Thirty-nine weeks ended November 28, 2020 Net loss from continuing operations $ (149,416 ) $ (81,575 ) Add back - Income tax expense (benefit) 2,915 (7,534 ) Loss before income taxes - continuing operations (146,501 ) (89,109 ) Adjustments: Amortization expense 59,193 68,351 LIFO charge (credit) 900 (30,303 ) Intangible asset impairment charges - 29,852 Loss (gain) on debt modifications and retirements, net 3,235 (5,274 ) Merger and Acquisition-related costs 12,119 1,136 Restructuring-related costs 25,173 71,096 Loss on Bartell acquisition 5,346 - Litigation settlements 50,212 - Adjusted income before income taxes - continuing operations 9,677 45,749 Adjusted income tax expense (a) 2,545 12,645 Adjusted net income from continuing operations $ 7,132 $ 33,104 Adjusted net income per diluted share - continuing operations: Numerator for adjusted net income per diluted share: Adjusted net income from continuing operations $ 7,132 $ 33,104 Denominator: Basic weighted average shares 54,004 53,600 Outstanding options and restricted shares, net 998 754 Diluted weighted average shares 55,002 54,354 Net loss from continuing operations per diluted share - continuing operations $ (2.77 ) $ (1.52 ) Adjusted net income per diluted share - continuing operations $ 0.13 $ 0.61 (a) The fiscal year 2022 and 2021 annual effective tax rates, calculated using a federal rate plus a net state rate that excluded the impact of state NOL's, state credits and valuation allowance, was used for the thirty-nine weeks ended November 27, 2021 and November 28, 2020, respectively. RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF ADJUSTED EBITDA GROSS PROFIT AND RECONCILIATION OF ADJUSTED EBITDA SELLING, GENERAL AND ADMINISTRATIVE EXPENSES- RETAIL PHARMACY SEGMENT (In thousands) (unaudited) Thirteen weeks ended November 27, 2021 Thirteen weeks ended November 28, 2020 Reconciliation of adjusted EBITDA gross profit: Revenues $ 4,432,508 $ 4,109,592 Gross Profit 1,233,237 1,079,708 Addback: LIFO charge (credit) 8,886 (9,487 ) Depreciation and amortization (cost of goods sold portion only) 2,489 1,945 Other 25 381 Adjusted EBITDA gross profit - continuing operations $ 1,244,637 $ 1,072,547 Percent of revenues - continuing operations 28.08 % 26.10 % Reconciliation of adjusted EBITDA selling, general and administrative expenses: Revenues $ 4,432,508 $ 4,109,592 Selling, general and administrative expenses 1,185,974 1,067,027 Less: Depreciation and amortization (SG&A portion only) 58,087 67,641 Stock-based compensation expense (174 ) 2,429 Merger and Acquisition-related costs 3,642 1,136 Restructuring-related costs 3,746 11,605 Litigation settlements 2,000 - Other (33 ) 226 Adjusted EBITDA selling, general and administrative expenses - continuing operations $ 1,118,706 $ 983,990 Percent of revenues - continuing operations 25.24 % 23.94 % Adjusted EBITDA - continuing operations $ 125,931 $ 88,557 RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF ADJUSTED EBITDA GROSS PROFIT AND RECONCILIATION OF ADJUSTED EBITDA SELLING, GENERAL AND ADMINISTRATIVE EXPENSES- RETAIL PHARMACY SEGMENT (In thousands) (unaudited) Thirty-nine weeks ended November 27, 2021 Thirty-nine weeks ended November 28, 2020 Reconciliation of adjusted EBITDA gross profit: Revenues $ 13,061,408 $ 12,250,775 Gross Profit 3,543,533 3,223,157 Addback: LIFO charge (credit) 900 (30,303 ) Depreciation and amortization (cost of goods sold portion only) 6,536 6,775 Restructuring-related costs - SKU optimization charges - 25,763 Other 919 1,804 Adjusted EBITDA gross profit - continuing operations $ 3,551,888 $ 3,227,196 Percent of revenues - continuing operations 27.19 % 26.34 % Reconciliation of adjusted EBITDA selling, general and administrative expenses: Revenues $ 13,061,408 $ 12,250,775 Selling, general and administrative expenses 3,505,365 3,206,078 Less: Depreciation and amortization (SG&A portion only) 176,936 199,434 Stock-based compensation expense 8,292 7,785 Merger and Acquisition-related costs 12,119 1,136 Restructuring-related costs 7,951 41,992 Litigation settlements 34,448 - Other 3,945 2,414 Adjusted EBITDA selling, general and administrative expenses - continuing operations $ 3,261,674 $ 2,953,317 Percent of revenues - continuing operations 24.97 % 24.11 % Adjusted EBITDA - continuing operations $ 290,214 $ 273,879 RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED EBITDA GUIDANCE YEAR ENDING FEBRUARY 26, 2022 (In thousands) (unaudited) Guidance Range Low High Total Revenues $ 24,400,000 $ 24,700,000 Pharmacy Services Segment Revenues $ 7,100,000 $ 7,200,000 Gross Capital Expenditures $ 275,000 $ 275,000 Reconciliation of net loss to adjusted EBITDA: Net loss $ (229,500 ) $ (188,500 ) Adjustments: Interest expense 195,000 195,000 Income tax expense 3,000 - Depreciation and amortization 302,000 302,000 LIFO charge 5,000 - Facility exit and impairment charges 105,000 95,000 Loss on debt modifications and retirements, net 3,200 3,200 Merger and Acquisition-related costs 13,000 13,000 Restructuring-related costs 35,000 35,000 Litigation settlements 50,000 50,000 Gain on sale of assets, net (7,000 ) (10,000 ) Loss on Bartell acquisition 5,300 5,300 Other 20,000 20,000 Adjusted EBITDA $ 500,000 $ 520,000 RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED NET LOSS GUIDANCE YEAR ENDING FEBRUARY 26, 2022 (In thousands) (unaudited) Guidance Range Low High Net loss $ (229,500 ) $ (188,500 ) Add back - income tax expense 3,000 - Loss before income taxes (226,500 ) (188,500 ) Adjustments: Amortization expense 79,000 79,000 LIFO charge 5,000 - Loss on debt modifications and retirements, net 3,200 3,200 Merger and Acquisition-related costs 13,000 13,000 Restructuring-related costs 35,000 35,000 Loss on Bartell acquisition 5,300 5,300 Litigation settlements 50,000 50,000 Adjusted loss before adjusted income taxes (36,000 ) (3,000 ) Adjusted income tax benefit (9,500 ) (800 ) Adjusted net loss $ (26,500 ) $ (2,200 ) Diluted adjusted net loss per share $ (0.49 ) $ (0.04 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20211220005684/en/
INVESTORS: Trent Kruse (717) 975-3710 investor@riteaid.com MEDIA: Jeffrey Olson 717-975-5718 press@riteaid.com