Exhibit 99.1
| INVESTORS: | MEDIA: |
| Kevin Twomey | Karen Rugen |
| 717-731-6540 | 717-730-7766 |
| or investor@riteaid.com |
FOR IMMEDIATE RELEASE
RITE AID ANNOUNCES FOURTH QUARTER AND FULL YEAR RESULTS
| · | Reports Fourth Quarter Net Loss, Including Non-Cash Tax Charge, of $1.20 Per Diluted Share Compared to Net Income of $ .01 Per Diluted Share in Prior Year Fourth Quarter |
| · | Reports Fiscal 2008 Net Loss, Including Non-Cash Tax Charge, of $1.54 Per Diluted Share Compared to $.01 Per Diluted Share in Fiscal 2007 |
| · | Reports Fourth Quarter Adjusted EBITDA of $276.3 Million Compared to Adjusted EBITDA of $201.0 Million in Prior Year Fourth Quarter |
| · | Reports Fiscal 2008 Adjusted EBITDA of $962.8 Million Compared to $696.9 Million in Fiscal 2007 |
| · | Provides Fiscal 2009 Guidance |
CAMP HILL, PA (April 10, 2008)—Rite Aid Corporation (NYSE: RAD) today announced financial results for its fourth quarter and year ended March 1, 2008. Other than same-store comparisons, results for the fourth quarter and year reflect the acquisition of the Brooks Eckerd stores and distribution centers acquired June 4, 2007.
Revenues for the 13-week fourth quarter were $6.82 billion versus revenues of $4.53 billion in the prior year fourth quarter. Revenues increased 50.5 percent.
Same store sales for the 13-week fourth quarter increased 1.3 percent over the prior year 13-week period, consisting of a 1.4 percent pharmacy same store sales increase and a 1.0 percent increase in front-end same store sales. The number of prescriptions filled in same stores increased 0.7 percent. The acquired Brooks Eckerd stores are excluded from the same store sales and prescription growth amounts. Prescription sales accounted for 66.0 percent of total sales, and third party prescription sales represented 96.0 percent of pharmacy sales.
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Rite Aid Press Release – page 2
Net loss for the fourth quarter was $952.2 million or $1.20 per diluted share compared to last year’s fourth quarter net income of $15.1 million or $.01 per diluted share. Included in this quarter’s loss is a previously announced non-cash income tax charge from the recording of a valuation allowance against deferred tax assets that accounted for $894.9 million or $1.12 per diluted share and resulted in the loss of an expected non-cash tax benefit for this year’s fourth quarter. Also contributing to the change were increases in expenses resulting from the Brooks Eckerd acquisition including an increase in depreciation and amortization expense of $65.5 million, additional interest expense of $57.8 million and integration expense of $37.7 million. Offsetting these negative factors were an increase in adjusted EBITDA of $75.2 million and a LIFO inventory credit of $25.3 million compared to last year’s LIFO inventory charge of $16.2 million.
Adjusted EBITDA (which is reconciled to net loss or net income on the attached table) of $276.3 million or 4.0 percent of revenues for the fourth quarter compared to $201.0 million or 4.4 percent of revenues for the like period last year. The $75.2 million increase is primarily due to the addition of revenues from the acquired Brooks Eckerd stores, along with an improvement in gross margin rates. Expenses as a percent of revenues were higher, primarily due to occupancy expenses related to the company’s new and relocated store program.
"During the quarter we increased pharmacy sales, filled more prescriptions, improved front end sales and grew gross margin rates, and we did it as worries about a recession increased and retail sales softened in general," said Mary Sammons, Rite Aid chairman, president and CEO. "Our team also continued to do a good job of controlling expenses without negatively impacting the shopping experience in our stores. We also made good progress on the Brooks Eckerd integration with the acquired stores showing improving sales and margin trends."
In the fourth quarter, the company opened 18 stores, relocated 29 stores, remodeled 14 stores and closed or sold 48 stores which were primarily related to combining acquired stores in close proximity to existing stores and the previously announced exit from the Las Vegas market. Stores in operation at the end of the fourth quarter totaled 5,059.
Year-End Results
For the 52-week fiscal year ended March 1, 2008, Rite Aid had revenues of $24.3 billion as compared to revenues of $17.4 billion for the 52-week prior year. Revenues increased 39.8%.
Same store sales for the 52-week year increased 1.3 percent over the prior 52-week comparable period. This increase consisted of a 1.7 percent pharmacy same store sales increase and a 0.7 percent increase in front-end same store sales. The number of prescriptions filled in same stores increased 0.5 percent. Prescription sales accounted for 66.7 percent of total sales, and third party prescription sales were 95.9 percent of pharmacy sales.
Net loss for the year was $1.1 billion or $1.54 per diluted share compared to last year’s net income of $26.8 million but a loss of $.01 per diluted share because of the negative impact of preferred stock dividends. Included in this year’s loss is a previously announced non-cash income tax charge from the recording of a valuation allowance against deferred tax assets that accounted for $802.7 million or $1.11 per diluted share and resulted in the loss of an expected non-cash tax benefit for this year’s fourth quarter. Also contributing to the change were increases in expenses resulting from the Brooks Eckerd acquisition including an increase in depreciation and amortization expense of $202.2 million, additional interest expense of $174.4 million, integration expense of $154.2 million and an increase in store closing and impairment charge of $36.8 million. Offsetting these negative factors was an increase in adjusted EBITDA of $265.9 million.
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Rite Aid Press Release – page 3
As computed on the attached table, adjusted EBITDA of $962.8 million or 4.0 percent of revenues for the year compared to $696.9 million or 4.0 percent of revenues for last year. The $265.9 million increase is primarily due to the addition of nine months of revenues from the acquired Brooks Eckerd stores along with an improvement in gross margin rate. Excluding occupancy expenses related to the company’s new and relocated store program, expenses as a percent of revenues were lower.
"This was a defining year for Rite Aid because we completed an acquisition that gives us significantly increased scale and greater strength in our key existing markets to better compete in the very competitive drugstore sector. And although we faced a challenging economic environment in the latter part of the year, we continued to build Rite Aid’s core business by increasing same-store sales, filling more prescriptions, growing gross margin rate and controlling expenses. Without the impact of the tax charge, and the resulting loss of a tax benefit in the fourth quarter, we would have reported a net loss that was within our guided range.
"We also improved customer satisfaction, opened 120 stores as part of our new and relocated store program and added to the depth of our management team. Although our results were not as strong as we had planned at the start of fiscal 2008, we made good progress nine months into our 16-month Brooks Eckerd integration plan and continued to set the stage for Rite Aid’s future long-term growth."
For the year, the company opened 47 new stores, relocated 65 stores, remodeled 145 stores, acquired 1,854 Brooks Eckerd stores, acquired eight other stores and sold or closed 183 stores. The sold or closed stores included the 25 stores required to be sold for the Brooks Eckerd acquisition, the combination of 92 stores related to the Brooks Eckerd acquisition that were in close proximity to one another and 34 stores from exiting Nevada markets. Stores in operation at the end of the year totaled 5,059.
Company Announces Guidance for Fiscal 2009
Based on current trends, continued integration activities and an expectation that the challenging economic environment will continue, Rite Aid said it expects sales to be between $26.7 billion and $27.2 billion in fiscal 2009 with same store sales (which will include nine months of sales from the Brooks Eckerd stores) improving 2.0 percent to 4.0 percent over fiscal 2008. Adjusted EBITDA (which is reconciled to net loss on the attached table) is expected to be between $1.0 billion and $1.1 billion. Net loss for fiscal 2009 is expected to be between $260 million and $375 million or a loss per diluted share of $.34 to $.48. Capital expenditures, excluding proceeds from sale and leaseback transactions, are expected to be approximately $600 million. Proceeds from sale and leaseback transaction are expected to be approximately $150 million.
Conference Call Broadcast
Rite Aid will hold an analyst call at 8:30 a.m. Eastern Time today with remarks by Rite Aid's management team. The call will be simulcast via the internet and can be accessed through the websites www.riteaid.com in the conference call section of investor information and www.StreetEvents.com. A playback of the call will be available on both sites starting at 2 p.m. Eastern Time today. A playback of the call will also be available by telephone for 48 hours beginning at 12 p.m. Eastern Time today until 12 p.m. Eastern Time on April 12. The playback number is 1-800-642-1687 from within the U.S. and Canada or 1-706-645-9291 from outside the U.S. and Canada with the eight-digit reservation number 39996452.
Rite Aid Corporation is one of the nation’s leading drugstore chains with more than 5,000 stores in 31 states and the District of Columbia. Information about Rite Aid, including corporate background and press releases, is available through the company’s website at http://www.riteaid.com .
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Rite Aid Press Release – page 4
This press release may contain forward-looking statements, which are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements include our high level of indebtedness, our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our senior secured credit facility and other debt agreements, our ability to improve the operating performance of our stores in accordance with our long term strategy, our ability to realize the benefits of the Brooks Eckerd acquisition, our ability to hire and retain pharmacists and other store personnel, the efforts of private and public third-party payors to reduce prescription drug reimbursements and encourage mail order, competitive pricing pressures, continued consolidation of the drugstore industry, changes in state or federal legislation or regulations, the outcome of lawsuits and governmental investigations, general economic conditions and inflation, interest rate movements and access to capital. Consequently, all of the forward-looking statements made in this press release are qualified by these and other factors, risks and uncertainties. Readers are also directed to consider other risks and uncertainties discussed in documents filed by the Company with the Securities and Exchange Commission. Forward-looking statements can be identified through the use of words such as "may", "will", "intend", "plan", "project", "expect", "anticipate", "could", "should", "would", "believe", "estimate", "contemplate", and "possible".
See the attached table for a reconciliation of a non-GAAP financial measure, Adjusted EBITDA to net income, the most comparable GAAP financial measure. We define Adjusted EBITDA as net income (loss) from operations excluding the impact of income taxes, interest expense, depreciation and amortization, LIFO adjustments, charges or credits for store closing and impairment, inventory write-downs related to closed stores, stock-based compensation expense, debt modifications and retirements, sale of assets and investments and other non-recurring items. We reference this non-GAAP financial measure frequently in our decision-making because it provides supplemental information that facilitates internal comparisons to the historical operating performance of prior periods and external comparisons to competitors’ historical operating performance. In addition, incentive compensation is based on Adjusted EBITDA and we base our forward-looking estimates on Adjusted EBITDA to facilitate quantification of planned business activities and enhance subsequent follow-up with comparisons of actual to planned Adjusted EBITDA. We include this non-GAAP financial measure in our earnings announcement in order to provide transparency to our investors and enable investors to better compare our operating performance with the operating performance of our competitors.
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RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(unaudited)
| March 1, 2008 | March 3, 2007 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 155,762 | $ | 106,148 | ||||
| Accounts receivable, net | 665,971 | 374,493 | ||||||
| Inventories, net of LIFO reserve of $562,729 and $546,614 | 3,936,827 | 2,335,679 | ||||||
| Prepaid expenses and other current assets | 163,334 | 136,668 | ||||||
| Total current assets | 4,921,894 | 2,952,988 | ||||||
| Property, plant and equipment, net | 2,873,009 | 1,743,104 | ||||||
| Goodwill | 1,783,372 | 656,037 | ||||||
| Other intangibles, net | 1,187,327 | 178,220 | ||||||
| Deferred tax assets | 384,163 | 1,380,942 | ||||||
| Other assets | 338,258 | 179,733 | ||||||
| Total assets | $ | 11,488,023 | $ | 7,091,024 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current maturities of long-term debt and lease financing obligations | $ | 185,609 | $ | 16,184 | ||||
| Accounts payable | 1,425,768 | 902,807 | ||||||
| Accrued salaries, wages and other current liabilities | 1,110,288 | 670,934 | ||||||
| Deferred tax liabilities | 76,374 | - | ||||||
| Total current liabilities | 2,798,039 | 1,589,925 | ||||||
| Long-term debt, less current maturities | 5,610,489 | 2,909,983 | ||||||
| Lease financing obligations, less current maturities | 189,426 | 174,121 | ||||||
| Other noncurrent liabilities | 1,178,884 | 754,149 | ||||||
| Total liabilities | 9,776,838 | 5,428,178 | ||||||
| Commitments and contingencies | - | - | ||||||
| Stockholders' equity: | ||||||||
| Preferred stock - Series E | - | 120,000 | ||||||
| Preferred stock - Series G | 139,253 | 129,917 | ||||||
| Preferred stock - Series H | 135,202 | 127,385 | ||||||
| Preferred stock - Series I | 116,415 | 116,415 | ||||||
| Common stock | 830,209 | 536,686 | ||||||
| Additional paid-in capital | 4,047,499 | 3,118,299 | ||||||
| Accumulated deficit | (3,537,276 | ) | (2,462,197 | ) | ||||
| Accumulated other comprehensive loss | (20,117 | ) | (23,659 | ) | ||||
| Total stockholders' equity | 1,711,185 | 1,662,846 | ||||||
| Total liabilities and stockholders' equity | $ | 11,488,023 | $ | 7,091,024 | ||||
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)
| Thirteen Weeks ended March 1, 2008 | Thirteen Weeks ended March 3, 2007 | |||||||
| Revenues | $ | 6,824,822 | $ | 4,533,502 | ||||
| Costs and expenses: | ||||||||
| Cost of goods sold | 4,936,493 | 3,313,737 | ||||||
| Selling, general and administrative expenses | 1,774,296 | 1,114,878 | ||||||
| Store closing and impairment charges | 43,713 | 25,164 | ||||||
| Interest expense | 127,315 | 69,516 | ||||||
| Loss on debt modifications and retirements, net | - | 18,662 | ||||||
| Loss (gain) on sale of assets and investments, net | 958 | (9,736 | ) | |||||
| 6,882,775 | 4,532,221 | |||||||
| (Loss) income from continuing operations before income taxes | (57,953 | ) | 1,281 | |||||
| Income tax expense (benefit) | 894,910 | (14,541 | ) | |||||
| Net (loss) income from continuing operations | (952,863 | ) | 15,822 | |||||
| Income (loss) from discontinued operations, net of gain on disposal and | 683 | (725 | ) | |||||
| income tax expense/benefit | ||||||||
| Net (loss) income | $ | (952,180 | ) | $ | 15,097 | |||
| Basic and diluted (loss) income per share: | ||||||||
| Numerator for (loss) income per share: | ||||||||
| Net (loss) income | $ | (952,180 | ) | $ | 15,097 | |||
| Accretion of redeemable preferred stock | (25 | ) | (25 | ) | ||||
| Cumulative preferred stock dividends | (8,238 | ) | (7,961 | ) | ||||
| (Loss) income attributable to common stockholders - basic and diluted | $ | (960,443 | ) | $ | 7,111 | |||
| Denominator: | ||||||||
| Basic weighted average shares | 797,335 | 527,427 | ||||||
| Outstanding options and restricted shares | - | 19,867 | ||||||
| Diluted weighted average shares | 797,335 | 547,294 | ||||||
| Basic and diluted (loss) income per share | $ | (1.20 | ) | $ | 0.01 | |||
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)
| Fifty-two Weeks ended March 1, 2008 | Fifty-two Weeks ended March 3, 2007 | |||||||
| Revenues | $ | 24,326,846 | $ | 17,399,383 | ||||
| Costs and expenses: | ||||||||
| Cost of goods sold | 17,689,272 | 12,710,609 | ||||||
| Selling, general and administrative expenses | 6,366,137 | 4,338,462 | ||||||
| Store closing and impairment charges | 86,166 | 49,317 | ||||||
| Interest expense | 449,596 | 275,219 | ||||||
| Acquisition related financing commitment charge | 12,900 | - | ||||||
| Loss on debt modifications and retirements, net | - | 18,662 | ||||||
| Gain on sale of assets and investments, net | (3,726 | ) | (11,139 | ) | ||||
| 24,600,345 | 17,381,130 | |||||||
| (Loss) income before income taxes | (273,499 | ) | 18,253 | |||||
| Income tax expense (benefit) | 802,701 | (11,609 | ) | |||||
| Net (loss) income from continuing operations | (1,076,200 | ) | 29,862 | |||||
| Loss from discontinued operations, net of gain on disposal and income tax benefit | (2,790 | ) | (3,036 | ) | ||||
| Net (loss) income | $ | (1,078,990 | ) | $ | 26,826 | |||
| Basic and diluted loss per share: | ||||||||
| Numerator for loss per share: | ||||||||
| Net (loss) income | $ | (1,078,990 | ) | $ | 26,826 | |||
| Accretion of redeemable preferred stock | (102 | ) | (102 | ) | ||||
| Cumulative preferred stock dividends | (32,533 | ) | (31,455 | ) | ||||
| Preferred stock beneficial conversion | (556 | ) | - | |||||
| Loss attributable to common stockholders - basic and diluted | $ | (1,112,181 | ) | $ | (4,731 | ) | ||
| Denominator: | ||||||||
| Basic and diluted weighted average shares | 723,923 | 524,460 | ||||||
| Basic and diluted loss per share | $ | (1.54 | ) | $ | (0.01 | ) | ||
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA
(In thousands)
| Thirteen Weeks ended March 1, 2008 | Thirteen Weeks ended March 3, 2007 | |||||||
| Reconciliation of net (loss) income to adjusted EBITDA: | ||||||||
| Net (loss) income | $ | (952,180 | ) | $ | 15,097 | |||
| Adjustments: | ||||||||
| Interest expense | 127,315 | 69,516 | ||||||
| Income tax expense (benefit) (a) | 895,278 | (14,932 | ) | |||||
| Depreciation and amortization | 134,532 | 69,079 | ||||||
| LIFO (credits) charges (b) | (25,259 | ) | 16,168 | |||||
| Store closing and impairment charges | 43,713 | 25,164 | ||||||
| Stock-based compensation expense | 12,820 | 6,480 | ||||||
| Gain on sale of assets and investments, net (c) | (7,142 | ) | (9,736 | ) | ||||
| Loss on debt modifications and retirements, net (d) | - | 18,662 | ||||||
| Incremental acquisition costs (e) | 37,658 | 2,824 | ||||||
| Closed store liquidation expense (f) | 7,100 | 1,457 | ||||||
| Other | 2,427 | 1,254 | ||||||
| Adjusted EBITDA | $ | 276,262 | $ | 201,033 | ||||
| Percent of revenues | 4.05 | % | 4.43 | % | ||||
| Results of discontinued operations (g) | 4,325 | 820 | ||||||
| Adjusted EBITDA from continuing operations | $ | 280,587 | $ | 201,853 | ||||
| Notes: | ||||||||
| (a) | Includes tax impact of the disposal of our Las Vegas market, which is included as a component of results from discontinued operations on the statement of operations | |
| (b) | Represents non-cash (credits) charges to value our inventories under the last-in first-out ("LIFO") method. | |
| (c) | Includes gain on disposal of our Las Vegas market, which is included as a component of results from discontinuedoperations on the statement of operations | |
| (d) | Represents loss related to debt modifications and retirements, net | |
| (e) | Represents incremental costs related to the acquisition of Jean Coutu, USA. | |
| (f) | Represents costs to liquidate inventory at stores that are in the process of closing. | |
| (g) | Represents losses from our recently disposed Las Vegas market that are included in Adjusted EBITDA. |
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA
(In thousands)
| Fifty-two Weeks ended March 1, 2008 | Fifty-two Weeks ended March 3, 2007 | |||||||
| Reconciliation of net (loss) income to adjusted EBITDA: | ||||||||
| Net (loss) income | $ | (1,078,990 | ) | $ | 26,826 | |||
| Adjustments: | ||||||||
| Interest expense | 449,596 | 275,219 | ||||||
| Income tax expense (benefit) (a) | 801,198 | (13,244 | ) | |||||
| Depreciation and amortization | 472,473 | 270,307 | ||||||
| LIFO charges (b) | 16,114 | 43,006 | ||||||
| Store closing and impairment charges | 86,166 | 49,317 | ||||||
| Stock-based compensation expense | 40,438 | 22,331 | ||||||
| Gain on sale of assets and investments, net (c) | (11,826 | ) | (11,139 | ) | ||||
| Loss on debt modifications and retirements, net (d) | - | 18,662 | ||||||
| Acquisition related financing commitment charge (e) | 12,900 | - | ||||||
| Incremental acquisition costs (f) | 154,222 | 3,566 | ||||||
| Closed store liquidation expense (g) | 14,396 | 8,628 | ||||||
| Other | 6,142 | 3,431 | ||||||
| Adjusted EBITDA | $ | 962,829 | $ | 696,910 | ||||
| Percent of revenues | 3.96 | % | 4.01 | % | ||||
| Results of discontinued operations (h) | 8,890 | 3,595 | ||||||
| Adjusted EBITDA from continuing operations | $ | 971,719 | $ | 700,505 | ||||
| Notes: | ||||||||
| (a) | Includes tax impact of the disposal of our Las Vegas market, which is included as a component of results from discontinued operations on the statement of operations | |
| (b) | Represents non-cash charges to value our inventories under the last-in first-out ("LIFO") method. | |
| (c) | Includes gain on disposal of our Las Vegas market, which is included as a component of results from discontinued operations on the statement of operations | |
| (d) | Represents loss related to debt modifications and retirements, net | |
| (e) | Represents a charge for financing commitments related to the acquisition of Jean Coutu, USA. | |
| (f) | Represents incremental costs related to the acquisition of Jean Coutu, USA. | |
| (g) | Represents costs to liquidate inventory at stores that are in the process of closing. | |
| (h) | Represents losses from our recently disposed Las Vegas market that are included in Adjusted EBITDA. |
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
| Thirteen Weeks ended March 1, 2008 | Thirteen Weeks ended March 3, 2007 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net (loss) income | $ | (952,180 | ) | $ | 15,097 | |||
| Adjustments to reconcile to net cash (used in) provided by operating activities: | ||||||||
| Depreciation and amortization | 134,532 | 69,079 | ||||||
| Store closing and impairment charges | 43,713 | 25,164 | ||||||
| LIFO (credits) charges | (25,259 | ) | 16,168 | |||||
| Gain on sale of assets and investments, net | (7,142 | ) | (9,736 | ) | ||||
| Stock-based compensation expense | 12,820 | 6,480 | ||||||
| Loss on debt modifications and retirements, net | - | 18,662 | ||||||
| Changes in deferred taxes | 895,076 | (18,664 | ) | |||||
| Proceeds from sale of inventory | 8,655 | - | ||||||
| Proceeds from insured loss | - | 593 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Net proceeds from (payments on) accounts receivable securitization | 35,000 | (20,000 | ) | |||||
| Accounts receivable | 28,776 | (32,672 | ) | |||||
| Inventories | 254,784 | 116,575 | ||||||
| Accounts payable | (75,787 | ) | (40,124 | ) | ||||
| Other assets and liabilities, net | (43,545 | ) | (20,222 | ) | ||||
| Net cash provided by operating activities | 309,443 | 126,400 | ||||||
| INVESTING ACTIVITIES: | ||||||||
| Payments for property, plant and equipment | (209,098 | ) | (110,477 | ) | ||||
| Intangible assets acquired | (12,109 | ) | (5,430 | ) | ||||
| Expenditures for business acquisition | (220 | ) | (18,369 | ) | ||||
| Proceeds from sale-leaseback transactions | 28,228 | 23,881 | ||||||
| Proceeds from dispositions of assets and investments | 34,904 | 1,634 | ||||||
| Proceeds from insured loss | - | 4,406 | ||||||
| Net cash used in investing activities | (158,295 | ) | (104,355 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of long-term debt | 1,862 | 1,000,000 | ||||||
| Net payments to revolver | (159,000 | ) | (575,000 | ) | ||||
| Principal payments on long-term debt | (5,020 | ) | (501,412 | ) | ||||
| Proceeds from financing secured by owned property | 44,267 | 15,455 | ||||||
| Change in zero balance cash accounts | (41,453 | ) | 6,020 | |||||
| Net proceeds from the issuance of common stock | 43 | 16,085 | ||||||
| Payments for preferred stock dividends | (3,845 | ) | (3,845 | ) | ||||
| Excess tax deduction on stock options | (5,882 | ) | 1,153 | |||||
| Financing costs paid | - | (22,750 | ) | |||||
| Net cash used in financing activities | (169,028 | ) | (64,294 | ) | ||||
| Decrease in cash and cash equivalents | (17,880 | ) | (42,249 | ) | ||||
| Cash and cash equivalents, beginning of period | 173,642 | 148,397 | ||||||
| Cash and cash equivalents, end of period | $ | 155,762 | $ | 106,148 | ||||
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
| Fifty-two Weeks ended March 1, 2008 | Fifty-two Weeks ended March 3, 2007 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net (loss) income | $ | (1,078,990 | ) | $ | 26,826 | |||
| Adjustments to reconcile to net cash (used in) provided by operating activities: | ||||||||
| Depreciation and amortization | 472,473 | 270,307 | ||||||
| Store closing and impairment charges | 86,166 | 49,317 | ||||||
| LIFO charges | 16,114 | 43,006 | ||||||
| Gain on sale of assets and investments, net | (11,826 | ) | (11,139 | ) | ||||
| Stock-based compensation expense | 40,438 | 22,331 | ||||||
| Acquisition related financing commitment charge | 12,900 | - | ||||||
| Loss on debt modifications and retirements, net | - | 18,662 | ||||||
| Changes in deferred taxes | 805,204 | (13,362 | ) | |||||
| Proceeds from sale of inventory | 16,811 | - | ||||||
| Proceeds from insured loss | 8,550 | 593 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Net proceeds from accounts receivable securitization | 85,000 | 20,000 | ||||||
| Accounts receivable | 36,820 | (39,543 | ) | |||||
| Inventories | (306,360 | ) | (37,275 | ) | ||||
| Accounts payable | (115,624 | ) | 14,219 | |||||
| Other assets and liabilities, net | 11,692 | (54,797 | ) | |||||
| Net cash provided by operating activities | 79,368 | 309,145 | ||||||
| INVESTING ACTIVITIES: | ||||||||
| Payments for property, plant and equipment | (687,529 | ) | (334,485 | ) | ||||
| Intangible assets acquired | (52,846 | ) | (29,243 | ) | ||||
| Acquisition of Jean Coutu, USA, net of cash acquired | (2,306,774 | ) | (18,369 | ) | ||||
| Proceeds from sale-leaseback transactions | 48,985 | 55,563 | ||||||
| Proceeds from dispositions of assets and investments | 58,470 | 9,348 | ||||||
| Proceeds from insured loss | 5,950 | 4,406 | ||||||
| Net cash used in investing activities | (2,933,744 | ) | (312,780 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of long-term debt | 2,307,867 | 1,145,000 | ||||||
| Net proceeds from (payments to) revolver | 549,000 | (234,000 | ) | |||||
| Proceeds from financing secured by owned property | 44,267 | 26,527 | ||||||
| Principal payments on long-term debt | (15,939 | ) | (901,297 | ) | ||||
| Change in zero balance cash accounts | 79,605 | 15,662 | ||||||
| Net proceeds from the issuance of common stock | 12,765 | 20,386 | ||||||
| Payments for preferred stock dividends | (15,380 | ) | (15,380 | ) | ||||
| Excess tax deduction on stock options | - | 1,587 | ||||||
| Financing costs paid | (58,195 | ) | (24,769 | ) | ||||
| Net cash provided by financing activities | 2,903,990 | 33,716 | ||||||
| Increase in cash and cash equivalents | 49,614 | 30,081 | ||||||
| Cash and cash equivalents, beginning of period | 106,148 | 76,067 | ||||||
| Cash and cash equivalents, end of period | $ | 155,762 | $ | 106,148 | ||||
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED EBITDA GUIDANCE
YEAR ENDING FEBRUARY 28, 2009
(In thousands, except per share amounts)
| Guidance Range | ||||||||
| Low | High | |||||||
| Reconciliation of net loss to adjusted EBITDA: | ||||||||
| Net loss | $ | (375,000 | ) | $ | (260,000 | ) | ||
| Adjustments: | ||||||||
| Interest expense | 490,000 | 485,000 | ||||||
| Income tax expense, net | 12,000 | 7,000 | ||||||
| Depreciation and amortization | 560,000 | 555,000 | ||||||
| LIFO charge | 60,000 | 60,000 | ||||||
| Store closing, liquidation, and impairment charges | 95,000 | 95,000 | ||||||
| Non recurring Brooks-Eckerd integration expenses | 110,000 | 110,000 | ||||||
| Stock-based compensation expense | 38,000 | 38,000 | ||||||
| Other | 10,000 | 10,000 | ||||||
| Adjusted EBITDA | $ | 1,000,000 | $ | 1,100,000 | ||||
| Diluted loss per share | $ | (0.48 | ) | $ | (0.34 | ) | ||