Exhibit 99.1
Press Release
For Further Information Contact:
INVESTORS: | MEDIA: |
Matt Schroeder | Susan Henderson |
(717) 214-8867 | (717) 730-7766 |
or investor@riteaid.com | |
FOR IMMEDIATE RELEASE
RITE AID REPORTS IMPROVED FOURTH QUARTER AND FULL YEAR FISCAL 2012 RESULTS
· Fourth Quarter Net Loss of $0.18 per Diluted Share, including a $0.14 per Diluted Share LIFO Charge, Compared to Prior Fourth Quarter Net Loss of $0.24 per Diluted Share
· Full Year Net loss of $0.43 per Diluted Share Compared to Prior Year Net Loss of $0.64 per Diluted Share
· Fourth Quarter Adjusted EBITDA of $274.3 Million Compared to Adjusted EBITDA of $215.4 Million in Prior Fourth Quarter
· Full Year Adjusted EBITDA of $942.9 Million Compared to Adjusted EBITDA of $859.0 Million in Prior Year
· Fifth Consecutive Quarter of Same Store Sales and Adjusted EBITDA Increases
· Provides Outlook for Fiscal 2013
CAMP HILL, Pa. (April 12, 2012)—Rite Aid Corporation (NYSE: RAD) today reported improved financial results for the fourth quarter and fiscal year ended March 3, 2012.
For the fourth quarter, the company reported revenues of $7.1 billion, a net loss of $161.3 million or $0.18 per diluted share and Adjusted EBITDA of $274.3 million or 3.8 percent of revenues. Revenues improved by $690.3 million; net loss decreased by $44.4 million, or $0.06 per diluted share; and Adjusted EBITDA improved by $58.9 million over the prior year fourth quarter. These results benefited primarily from continued growth in same store sales and an extra week in the quarter.
For the full year, Rite Aid reported revenues of $26.1 billion, a net loss of $368.6 million or $0.43 per diluted share and Adjusted EBITDA of $942.9 million or 3.6 percent of revenues. Revenues improved by $906.3 million; net loss decreased by $186.9 million, or $0.21 per diluted share; and Adjusted EBITDA improved by $83.9 million over the prior year.
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Rite Aid FY12 Q4 Press Release – page 2
“We made strong progress in fiscal year 2012 and feel positive about our improved business results, highlighted by same store sales and Adjusted EBITDA increases for the fifth consecutive quarter,” said Rite Aid President and CEO John Standley.
“Thanks to the hard work and dedication of the entire Rite Aid team throughout the year, we achieved these outstanding results by more than doubling the number of flu shots we administered last year; completing 274 wellness remodels; significantly growing our Rite Aid brand program; and achieving continued success with our award-winning wellness+ customer loyalty program. While there is still hard work ahead, I am pleased we are beginning our new fiscal year with positive momentum,” Standley added.
Fourth Quarter Summary
Revenues for the fourteen-week fourth quarter were $7.1 billion compared to revenues of $6.5 billion in the prior year thirteen-week fourth quarter. Revenues increased 10.7 percent primarily as a result of the additional week in fiscal 2012 and an increase in same store sales, partially offset by store closings.
Same store sales for the quarter increased 3.0 percent over the prior-year period, consisting of a 1.6 percent increase in the front end and a 3.8 percent increase in the pharmacy. Pharmacy sales included an approximate 216 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores increased 2.4 percent over the prior year period, which includes the benefit of a decrease in the number of pharmacies in the Express Scripts pharmacy benefit management network. Prescription sales accounted for 67.4 percent of total drugstore sales and third party prescription revenue was 96.6 percent of pharmacy sales.
Fourth quarter net loss was $161.3 million or $0.18 per diluted share compared to last year’s fourth quarter net loss of $205.7 million or $0.24 per diluted share. An increase in Adjusted EBITDA, decreases in depreciation and amortization and lease termination and impairment charges, and an income tax benefit compared to an income tax expense last year all contributed to the decrease in net loss. Partially offsetting these improvements were a significantly higher LIFO charge, a loss on debt modification charge, and a lower gain on sale of assets compared to last year’s fourth quarter.
Adjusted EBITDA (which is reconciled to net loss on the attached table) was $274.3 million or 3.8 percent of revenues compared to $215.4 million or 3.3 percent of revenues for the like period last year. The increase in Adjusted EBITDA was driven by an increase in same store sales, improvements in FIFO gross margin and the extra week in fiscal 2012.
In the fourth quarter, the company relocated two stores, remodeled 121 stores and closed 12 stores. Stores in operation at the end of the fourth quarter totaled 4,667. The Company had 280 wellness stores at year end.
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Rite Aid FY12 Q4 Press Release – page 3
Full Year Results
For the 53-week fiscal year ended March 3, 2012, Rite Aid had revenues of $26.1 billion compared to $25.2 billion for the 52-week prior year. Revenues increased by 3.6 percent, primarily driven by an increase in same store sales and the additional week in fiscal 2012.
Same store sales for the year increased 2.0 percent over the prior year period. This increase consisted of a 1.1 percent front-end same store sales increase and a 2.4 percent increase in pharmacy same store sales. Pharmacy sales included an approximate 169 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores increased 0.9 percent. Prescription sales accounted for 68.1 percent of total drugstore sales, and third party prescription revenue was 96.5 percent of pharmacy sales.
Net loss for fiscal 2012 was $368.6 million or $0.43 per diluted share compared to last year’s net loss of $555.4 million or $0.64 per diluted share. Contributing to the decrease in net loss were an increase in Adjusted EBITDA , decreases in depreciation and amortization, lease termination and impairment charges, interest expense and loss on debt modification, and an income tax benefit compared to an income tax expense last year. Partially offsetting these improvements was a significantly higher LIFO charge, and a lower gain on sale of assets compared to last year.
As computed on the attached table, Adjusted EBITDA was $942.9 million or 3.6 percent of revenues for the year compared to $859.0 million or 3.4 percent of revenues for last year.
For the year, the company relocated 15 stores, remodeled 278 stores and closed 47 stores. Stores in operation at the end of the year totaled 4,667.
Outlook for Fiscal 2013
The company’s outlook for fiscal 2013 is based on current same store front end sales and prescription count trends, adjusted for an anticipated reduction in pharmacy sales due to new generic introductions; the anticipated benefit of a decrease in the number of pharmacies in the Express Scripts pharmacy benefit management network; a challenging reimbursement rate environment; and the impact of continued investments Rite Aid plans to make in its wellness remodels, customer loyalty program and other initiatives to grow sales.
Rite Aid said it expects sales to be between $25.4 billion and $25.8 billion in fiscal 2013 with same stores sales expected to range from flat to an increase of 1.5 percent over fiscal 2012.
Adjusted EBITDA (which is reconciled to net loss on the attached table) is expected to be between $925 million and $1.025 billion.
Net loss for fiscal 2013 is expected to be between $103 million and $267 million or a loss per diluted share of $0.13 to $0.31.
Capital expenditures are expected to be approximately $300 million, which includes increasing the number of wellness store remodels and prescription file buys.
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Rite Aid FY12 Q4 Press Release – page 4
Conference Call Broadcast
Rite Aid will hold an analyst call at 8:30 a.m. Eastern Time today with remarks by Rite Aid’s management team. The call will be simulcast via the internet and can be accessed through the websites www.riteaid.com in the conference call section of investor information and www.StreetEvents.com. Slides related to materials discussed on the call will be available on both sites. A playback of the call will be available on both sites starting at 12 p.m. Eastern Time today. A playback of the call will also be available by telephone beginning at 12 p.m. Eastern Time today until 11:59 p.m. Eastern Time on April 14, 2012. The playback number is 1-855-859-2056 from within the U.S. and Canada or 1-404-537-3406 from outside the U.S. and Canada with the eight-digit reservation number 67031245.
Rite Aid is one of the nation’s leading drugstore chains with approximately 4,700 stores in 31 states and the District of Columbia. Information about Rite Aid, including corporate background and press releases, is available through Rite Aid’s website at www.riteaid.com.
Statements, including guidance, in this release that are not historical are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” and “will” and variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to, our high level of indebtedness and our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our debt agreements, general economic, market and competitive conditions, our ability to improve the operating performance of our stores in accordance with our long term strategy, the efforts of private and public third-party payers to reduce prescription drug reimbursements and encourage mail order, the ability to realize anticipated results from capital expenditures and cost reduction initiatives, outcomes of legal and regulatory matters and changes in legislation or regulations, including healthcare reform. These and other risks, assumptions and uncertainties are described in Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K and in other documents that we file or furnish with the Securities and Exchange Commission, which you are encouraged to read. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Rite Aid expressly disclaims any current intention to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise.
See the attached table for a reconciliation of a non-GAAP financial measure, Adjusted EBITDA to net income (loss), the most comparable GAAP financial measure. We define Adjusted EBITDA as net income (loss) excluding the impact of income taxes, interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, inventory write-downs related to store closings, stock-based compensation expense, debt modifications and retirements, sale of assets and investments, revenue deferrals related to customer loyalty program and other items.
###
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(unaudited)
| | March 3, 2012 | | February 26, 2011 | |
ASSETS | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 162,285 | | $ | 91,116 | |
Accounts receivable, net | | 1,013,233 | | 966,457 | |
Inventories, net of LIFO reserve of $1,063,123 and $875,012 | | 3,138,455 | | 3,158,145 | |
Prepaid expenses and other current assets | | 190,613 | | 195,647 | |
Total current assets | | 4,504,586 | | 4,411,365 | |
Property, plant and equipment, net | | 1,902,021 | | 2,039,383 | |
Other intangibles, net | | 528,775 | | 646,177 | |
Other assets | | 428,909 | | 458,925 | |
Total assets | | $ | 7,364,291 | | $ | 7,555,850 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | |
Current liabilities: | | | | | |
Current maturities of long-term debt and lease financing obligations | | $ | 79,421 | | $ | 63,045 | |
Accounts payable | | 1,426,391 | | 1,307,872 | |
Accrued salaries, wages and other current liabilities | | 1,064,507 | | 1,049,406 | |
Total current liabilities | | 2,570,319 | | 2,420,323 | |
Long-term debt, less current maturities | | 6,141,773 | | 6,034,525 | |
Lease financing obligations, less current maturities | | 107,007 | | 122,295 | |
Other noncurrent liabilities | | 1,131,948 | | 1,190,074 | |
Total liabilities | | 9,951,047 | | 9,767,217 | |
| | | | | |
Commitments and contingencies | | — | | — | |
Stockholders’ deficit: | | | | | |
Preferred stock - Series G | | 1 | | 1 | |
Preferred stock - Series H | | 171,569 | | 161,650 | |
Common stock | | 898,687 | | 890,297 | |
Additional paid-in capital | | 4,278,988 | | 4,281,623 | |
Accumulated deficit | | (7,883,367 | ) | (7,514,796 | ) |
Accumulated other comprehensive loss | | (52,634 | ) | (30,142 | ) |
Total stockholders’ deficit | | (2,586,756 | ) | (2,211,367 | ) |
Total liabilities and stockholders’ deficit | | $ | 7,364,291 | | $ | 7,555,850 | |
Chart 1
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)
| | Fourteen weeks
ended March 3, 2012 | | Thirteen weeks ended
February 26, 2011 | |
Revenues | | $ | 7,146,754 | | $ | 6,456,466 | |
Costs and expenses: | | | | | |
Cost of goods sold | | 5,364,679 | | 4,755,479 | |
Selling, general and administrative expenses | | 1,758,325 | | 1,630,053 | |
Lease termination and impairment charges | | 56,305 | | 154,073 | |
Interest expense | | 137,739 | | 132,504 | |
Loss on debt modifications and retirements, net | | 16,066 | | — | |
Gain on sale of assets, net | | (891 | ) | (11,438 | ) |
| | | | | |
| | 7,332,223 | | 6,660,671 | |
| | | | | |
Loss before income taxes | | (185,469 | ) | (204,205 | ) |
Income tax (benefit) expense | | (24,219 | ) | 1,488 | |
Net loss | | $ | (161,250 | ) | $ | (205,693 | ) |
| | | | | |
Basic and diluted loss per share: | | | | | |
| | | | | |
Numerator for loss per share: | | | | | |
Net loss | | $ | (161,250 | ) | $ | (205,693 | ) |
Accretion of redeemable preferred stock | | (25 | ) | (25 | ) |
Cumulative preferred stock dividends | | (2,535 | ) | (2,389 | ) |
Loss attributable to common stockholders - basic and diluted | | $ | (163,810 | ) | $ | (208,107 | ) |
| | | | | |
Basic and diluted weighted average shares | | 887,020 | | 883,784 | |
| | | | | |
Basic and diluted loss per share | | $ | (0.18 | ) | $ | (0.24 | ) |
Chart 2
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)
| | Fifty-three weeks
ended March 3, 2012 | | Fifty-two weeks ended
February 26, 2011 | |
Revenues | | $ | 26,121,222 | | $ | 25,214,907 | |
Costs and expenses: | | | | | |
Cost of goods sold | | 19,327,887 | | 18,522,403 | |
Selling, general and administrative expenses | | 6,531,411 | | 6,457,833 | |
Lease termination and impairment charges | | 100,053 | | 210,893 | |
Interest expense | | 529,255 | | 547,581 | |
Loss on debt modifications and retirements, net | | 33,576 | | 44,003 | |
Gain on sale of assets, net | | (8,703 | ) | (22,224 | ) |
| | | | | |
| | 26,513,479 | | 25,760,489 | |
| | | | | |
Loss before income taxes | | (392,257 | ) | (545,582 | ) |
Income tax (benefit) expense | | (23,686 | ) | 9,842 | |
Net loss | | $ | (368,571 | ) | $ | (555,424 | ) |
| | | | | |
Basic and diluted loss per share: | | | | | |
| | | | | |
Numerator for loss per share: | | | | | |
Net loss | | $ | (368,571 | ) | $ | (555,424 | ) |
Accretion of redeemable preferred stock | | (102 | ) | (102 | ) |
Cumulative preferred stock dividends | | (9,919 | ) | (9,346 | ) |
Loss attributable to common stockholders - basic and diluted | | $ | (378,592 | ) | $ | (564,872 | ) |
| | | | | |
Basic and diluted weighted average shares | | 885,819 | | 882,947 | |
| | | | | |
Basic and diluted loss per share | | $ | (0.43 | ) | $ | (0.64 | ) |
Chart 3
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL OPERATING AND CASH FLOW INFORMATION
(Dollars in thousands, except per share amounts)
(unaudited)
| | Fourteen weeks
ended March 3, 2012 | | Thirteen weeks ended
February 26, 2011 | |
| | | | | |
SUPPLEMENTAL OPERATING INFORMATION | | | | | |
| | | | | |
Revenues | | $ | 7,146,754 | | $ | 6,456,466 | |
Cost of goods sold | | 5,364,679 | | 4,755,479 | |
Gross profit | | 1,782,075 | | 1,700,987 | |
LIFO charge | | 121,219 | | 825 | |
FIFO gross profit | | 1,903,294 | | 1,701,812 | |
| | | | | |
Gross profit as a percentage of revenues | | 24.94 | % | 26.35 | % |
LIFO charge as a percentage of revenues | | 1.70 | % | 0.01 | % |
FIFO gross profit as a percentage of revenues | | 26.63 | % | 26.36 | % |
| | | | | |
Selling, general and administrative expenses | | 1,758,325 | | 1,630,053 | |
Selling, general and administrative expenses as a percentage of revenues | | 24.60 | % | 25.25 | % |
| | | | | |
Cash interest expense | | 128,742 | | 123,310 | |
Non-cash interest expense | | 8,997 | | 9,194 | |
Total interest expense | | 137,739 | | 132,504 | |
| | | | | |
Adjusted EBITDA | | 274,332 | | 215,429 | |
Adjusted EBITDA as a percentage of revenues | | 3.84 | % | 3.34 | % |
| | | | | |
Net loss | | (161,250 | ) | (205,693 | ) |
Net loss as a percentage of revenues | | -2.26 | % | -3.19 | % |
| | | | | |
Total debt | | 6,328,201 | | 6,219,865 | |
Invested cash | | 58,753 | | 1,653 | |
Total debt net of invested cash | | 6,269,448 | | 6,218,212 | |
| | | | | |
SUPPLEMENTAL CASH FLOW INFORMATION | | | | | |
| | | | | |
Payments for property, plant and equipment | | 68,866 | | 57,904 | |
Intangible assets acquired | | 7,043 | | 8,162 | |
Total cash capital expenditures | | 75,909 | | 66,066 | |
Equipment received for noncash consideration | | 524 | | 1,048 | |
Equipment financed under capital leases | | 576 | | 1,786 | |
Gross capital expenditures | | $ | 77,009 | | $ | 68,900 | |
Chart 4
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL OPERATING AND CASH FLOW INFORMATION
(Dollars in thousands, except per share amounts)
(unaudited)
| | Fifty-three weeks
ended March 3, 2012 | | Fifty-two weeks ended
February 26, 2011 | |
| | | | | |
SUPPLEMENTAL OPERATING INFORMATION | | | | | |
| | | | | |
Revenues | | $ | 26,121,222 | | $ | 25,214,907 | |
Cost of goods sold | | 19,327,887 | | 18,522,403 | |
Gross profit | | 6,793,335 | | 6,692,504 | |
LIFO charge | | 188,722 | | 44,905 | |
FIFO gross profit | | 6,982,057 | | 6,737,409 | |
| | | | | |
Gross profit as a percentage of revenues | | 26.01 | % | 26.54 | % |
LIFO charge as a percentage of revenues | | 0.72 | % | 0.18 | % |
FIFO gross profit as a percentage of revenues | | 26.73 | % | 26.72 | % |
| | | | | |
Selling, general and administrative expenses | | 6,531,411 | | 6,457,833 | |
Selling, general and administrative expenses as a percentage of revenues | | 25.00 | % | 25.61 | % |
| | | | | |
Cash interest expense | | 494,486 | | 504,752 | |
Non-cash interest expense | | 34,769 | | 42,829 | |
Total interest expense | | 529,255 | | 547,581 | |
| | | | | |
Adjusted EBITDA | | 942,902 | | 858,962 | |
Adjusted EBITDA as a percentage of revenues | | 3.61 | % | 3.41 | % |
| | | | | |
Net loss | | (368,571 | ) | (555,424 | ) |
Net loss as a percentage of revenues | | -1.41 | % | -2.20 | % |
| | | | | |
Total debt | | 6,328,201 | | 6,219,865 | |
Invested cash | | 58,753 | | 1,653 | |
Total debt net of invested cash | | 6,269,448 | | 6,218,212 | |
| | | | | |
SUPPLEMENTAL CASH FLOW INFORMATION | | | | | |
| | | | | |
Payments for property, plant and equipment | | 215,004 | | 162,287 | |
Intangible assets acquired | | 35,133 | | 24,233 | |
Total cash capital expenditures | | 250,137 | | 186,520 | |
Equipment received for noncash consideration | | 3,616 | | 3,476 | |
Equipment financed under capital leases | | 7,052 | | 4,622 | |
Gross capital expenditures | | $ | 260,805 | | $ | 194,618 | |
Chart 5
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(In thousands)
| | Fourteen weeks
ended March 3, 2012 | | Thirteen weeks ended
February 26, 2011 | |
| | | | | |
Reconciliation of net loss to adjusted EBITDA: | | | | | |
Net loss | | $ | (161,250 | ) | $ | (205,693 | ) |
Adjustments: | | | | | |
Interest expense | | 137,739 | | 132,504 | |
Income tax (benefit) expense | | (24,219 | ) | 1,488 | |
Depreciation and amortization | | 107,201 | | 126,548 | |
LIFO charges | | 121,219 | | 825 | |
Lease termination and impairment charges | | 56,305 | | 154,073 | |
Stock-based compensation expense | | 4,249 | | 3,434 | |
Gain on sale of assets, net | | (891 | ) | (11,438 | ) |
Loss on debt modifications and retirements, net | | 16,066 | | — | |
Closed facility liquidation expense | | 1,346 | | 3,262 | |
Severance costs | | — | | 2,854 | |
Customer loyalty card program revenue deferral (a) | | 7,951 | | 7,431 | |
Other | | 8,616 | | 141 | |
Adjusted EBITDA | | $ | 274,332 | | $ | 215,429 | |
Percent of revenues | | 3.84 | % | 3.34 | % |
Notes:
(a) Relates to deferral of revenues for our customer loyalty program.
Chart 6
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(In thousands)
| | Fifty-three weeks
ended March 3, 2012 | | Fifty-two weeks ended
February 26, 2011 | |
| | | | | |
Reconciliation of net loss to adjusted EBITDA: | | | | | |
Net loss | | $ | (368,571 | ) | $ | (555,424 | ) |
Adjustments: | | | | | |
Interest expense | | 529,255 | | 547,581 | |
Income tax (benefit) expense | | (23,686 | ) | 9,842 | |
Depreciation and amortization | | 440,582 | | 505,546 | |
LIFO charges | | 188,722 | | 44,905 | |
Lease termination and impairment charges | | 100,053 | | 210,893 | |
Stock-based compensation expense | | 15,861 | | 17,336 | |
Gain on sale of assets, net | | (8,703 | ) | (22,224 | ) |
Loss on debt modifications and retirements, net | | 33,576 | | 44,003 | |
Closed facility liquidation expense | | 6,505 | | 9,881 | |
Severance costs | | 256 | | 4,883 | |
Customer loyalty card program revenue deferral (a) | | 30,856 | | 41,669 | |
Other | | (1,804 | ) | 71 | |
Adjusted EBITDA | | $ | 942,902 | | $ | 858,962 | |
Percent of revenues | | 3.61 | % | 3.41 | % |
Notes:
(a) Relates to deferral of revenues for our customer loyalty program.
Chart 7
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
| | Fourteen weeks
ended March 3, 2012 | | Thirteen weeks ended
February 26, 2011 | |
| | | | | |
OPERATING ACTIVITIES: | | | | | |
Net loss | | $ | (161,250 | ) | $ | (205,693 | ) |
Adjustments to reconcile to net cash provided by (used in) operating activities: | | | | | |
Depreciation and amortization | | 107,201 | | 126,548 | |
Lease termination and impairment charges | | 56,305 | | 154,073 | |
LIFO charges | | 121,219 | | 825 | |
Gain on sale of assets, net | | (891 | ) | (11,438 | ) |
Stock-based compensation expense | | 4,249 | | 3,434 | |
Loss on debt modifications and retirements, net | | 16,066 | | — | |
Changes in operating assets and liabilities: | | | | | |
Accounts receivable | | (41,145 | ) | 8,015 | |
Inventories | | 129,001 | | 171,607 | |
Accounts payable | | (33,623 | ) | (116,614 | ) |
Other assets and liabilities, net | | (186,636 | ) | (202,310 | ) |
Net cash provided by (used in) operating activities | | 10,496 | | (71,553 | ) |
INVESTING ACTIVITIES: | | | | | |
Payments for property, plant and equipment | | (68,866 | ) | (57,904 | ) |
Intangible assets acquired | | (7,043 | ) | (8,162 | ) |
Proceeds from sale-leaseback transactions | | 3,610 | | — | |
Proceeds from dispositions of assets and investments | | 5,975 | | 12,577 | |
Net cash used in investing activities | | (66,324 | ) | (53,489 | ) |
FINANCING ACTIVITIES: | | | | | |
Proceeds from issuance of long-term debt | | 481,000 | | — | |
Net repayments to revolver | | (55,000 | ) | (30,000 | ) |
Principal payments on long-term debt | | (408,820 | ) | (4,470 | ) |
Change in zero balance cash accounts | | 73,509 | | 129,036 | |
Net proceeds from the issuance of common stock | | 348 | | 125 | |
Financing fees paid for early debt redemption | | (11,778 | ) | — | |
Deferred financing costs paid | | (9,620 | ) | (575 | ) |
Net cash provided by financing activities | | 69,639 | | 94,116 | |
Increase (decrease) in cash and cash equivalents | | 13,811 | | (30,926 | ) |
Cash and cash equivalents, beginning of period | | 148,474 | | 122,042 | |
Cash and cash equivalents, end of period | | $ | 162,285 | | $ | 91,116 | |
Chart 8
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
| | Fifty-three weeks
ended March 3, 2012 | | Fifty-two weeks ended
February 26, 2011 | |
| | | | | |
OPERATING ACTIVITIES: | | | | | |
Net loss | | $ | (368,571 | ) | $ | (555,424 | ) |
Adjustments to reconcile to net cash provided by operating activities: | | | | | |
Depreciation and amortization | | 440,582 | | 505,546 | |
Lease termination and impairment charges | | 100,053 | | 210,893 | |
LIFO charges | | 188,722 | | 44,905 | |
Gain on sale of assets, net | | (8,703 | ) | (22,224 | ) |
Stock-based compensation expense | | 15,861 | | 17,336 | |
Loss on debt modifications and retirements, net | | 33,576 | | 44,003 | |
Changes in operating assets and liabilities: | | | | | |
Accounts receivable | | (48,781 | ) | (10,955 | ) |
Inventories | | (169,935 | ) | 35,111 | |
Accounts payable | | 146,302 | | 156,116 | |
Other assets and liabilities, net | | (62,569 | ) | (29,458 | ) |
Net cash provided by operating activities | | 266,537 | | 395,849 | |
INVESTING ACTIVITIES: | | | | | |
Payments for property, plant and equipment | | (215,004 | ) | (162,287 | ) |
Intangible assets acquired | | (35,133 | ) | (24,233 | ) |
Proceeds from sale-leaseback transactions | | 6,038 | | — | |
Proceeds from dispositions of assets and investments | | 22,930 | | 29,843 | |
Net cash used in investing activities | | (221,169 | ) | (156,677 | ) |
FINANCING ACTIVITIES: | | | | | |
Proceeds from issuance of long-term debt | | 822,285 | | 650,000 | |
Net proceeds from (repayments to) revolver | | 108,000 | | (52,000 | ) |
Principal payments on long-term debt | | (848,373 | ) | (779,706 | ) |
Change in zero balance cash accounts | | (32,838 | ) | (15,657 | ) |
Net proceeds from the issuance of common stock | | 914 | | 226 | |
Financing fees paid for early debt redemption | | (11,778 | ) | (19,666 | ) |
Deferred financing costs paid | | (12,409 | ) | (34,847 | ) |
Net cash provided by (used in) financing activities | | 25,801 | | (251,650 | ) |
Increase (decrease) in cash and cash equivalents | | 71,169 | | (12,478 | ) |
Cash and cash equivalents, beginning of period | | 91,116 | | 103,594 | |
Cash and cash equivalents, end of period | | $ | 162,285 | | $ | 91,116 | |
Chart 9
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED EBITDA GUIDANCE
YEAR ENDING MARCH 2, 2013
(In thousands, except per share amounts)
| | Guidance Range | |
| | Low | | High | |
| | | | | |
Sales | | $ | 25,400,000 | | $ | 25,800,000 | |
| | | | | |
Same store sales | | 0.0 | % | 1.5 | % |
| | | | | |
Gross capital expenditures | | $ | 300,000 | | $ | 300,000 | |
| | | | | |
Sale and leaseback proceeds | | $ | — | | $ | — | |
| | | | | |
Reconciliation of net loss to adjusted EBITDA: | | | | | |
Net loss | | $ | (267,000 | ) | $ | (103,000 | ) |
Adjustments: | | | | | |
Interest expense | | 530,000 | | 525,000 | |
Income tax expense | | 5,000 | | — | |
Depreciation and amortization | | 415,000 | | 410,000 | |
LIFO charge | | 90,000 | | 60,000 | |
Store closing and impairment charges | | 110,000 | | 100,000 | |
Stock-based compensation expense | | 18,000 | | 16,000 | |
Customer loyalty card program revenue deferral (a) | | 22,000 | | 18,000 | |
Loss on debt modification | | — | | — | |
Other | | 2,000 | | (1,000 | ) |
Adjusted EBITDA | | $ | 925,000 | | $ | 1,025,000 | |
| | | | | |
Diluted loss per share | | $ | (0.31 | ) | $ | (0.13 | ) |
(a) Relates to deferral of revenues for our customer loyalty program.
Chart 10
