New Rite Aid (RADCQ) 8-K Rite Aid Reports Third Quarter Fiscal 2011 Results

Exhibit 99.1

Press Release

For Further Information Contact:

INVESTORS:	MEDIA:
Matt Schroeder	Karen Rugen
(717) 214-8867	(717) 730-7766

or investor@riteaid.com

FOR IMMEDIATE RELEASE

RITE AID REPORTS THIRD QUARTER FISCAL 2011 RESULTS

· Third Quarter Net Loss of $0.09 per Diluted Share Compared to Prior Third Quarter Net Loss of $0.10 per Diluted Share

· Third Quarter Adjusted EBITDA of $212.5 Million Compared to Prior Third Quarter Adjusted EBITDA of $254.2 Million

· Weaker Flu Season Negatively Impacted Pharmacy Sales by $50 Million

· Continued Strong Liquidity of $966 Million at Quarter End

· Rite Aid Lowers Fiscal 2011 Outlook

Camp Hill, PA (December 16, 2010)—Rite Aid Corporation (NYSE: RAD) today reported financial results for its third fiscal quarter ended November 27, 2010.

The company reported revenues of $6.2 billion, a net loss of $79.1 million or $0.09 per diluted share and Adjusted EBITDA of $212.5 million or 3.4 percent of revenues.  Negatively impacting results were a slower start to the cough, cold and flu season coupled with an increase in workers’ compensation and general liability self insurance expense.

“The quarter was below our expectations. While the lack of cough, cold and flu had a significant impact on our results, the good news is that our front end sales began to turn around during the quarter and our team continued to do a good job of controlling costs. We are pleased to see that our loyalty program wellness + continues to gain traction with customers and patients,” said John Standley, Rite Aid president and CEO.

“Based on our third quarter results and our current view that same stores sales in the fourth quarter will be softer than we had expected, we have lowered our guidance for the full year,” Standley said.

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Rite Aid FY11 Q3 Press Release – page 2

Third Quarter Summary

Revenues for the 13-week quarter were $6.2 billion versus revenues of $6.4 billion in last year’s like period.  Revenues decreased 2.4 percent primarily as a result of a decline in pharmacy same store sales and store closings.

Same store sales for the quarter decreased 1.3 percent over the prior 13-week period, with flat front end sales and a 1.9 percent decrease in the pharmacy.  Pharmacy sales included an approximate 242 basis point negative impact from new generic introductions.  The number of prescriptions filled in comparable stores decreased 1.7 percent over the prior-year period, negatively impacted 1.3 percent by the lower incidence of cough, cold and flu.   Prescription sales accounted for 68.3 percent of total drugstore sales, and third party prescription revenue was 96.2 percent of pharmacy sales.

Net loss was $79.1 million or $0.09 per diluted share compared to last year’s third quarter net loss of $83.9 million or $0.10 per diluted share.  Lower lease termination and impairment charges, lower LIFO expense, lower interest and securitization expense and a reduction in depreciation and amortization helped offset the impact of the decline in Adjusted EBITDA on net loss.

Adjusted EBITDA (which is reconciled to net loss on the attached table) was $212.5 million or 3.4 percent of revenues for the third quarter compared to $254.2 million or 4.0 percent of revenues for the like period last year.  Adjusted EBITDA was negatively impacted by $12.0 million due to fewer cough, cold and flu prescriptions filled year over year and a $29.5 million increase in workers’ compensation and general liability self insurance expense.   The increase in self insurance expense is due to a reduction of reserves recorded in last year’s third quarter because of favorable claims experience.

In the third quarter, the company opened 1 new store, relocated 11 stores, remodeled 15 stores and closed 17 stores.  Stores in operation at the end of the quarter totaled 4,731.

Other Events During the Quarter

As previously announced, during the quarter Rite Aid added the Save-A-Lot discount, limited grocery assortment concept to 10 of its existing stores in the Greenville SC market after entering into a licensing agreement with Save-A-Lot, a SUPERVALU company. The stores are co-branded Save-A-Lot Food Stores/Rite Aid Pharmacy and are owned and operated by Rite Aid.

Rite Aid Lowers Fiscal 2011 Guidance

Based on its third quarter results and its lower expectation for same store sales in the fourth quarter, Rite Aid lowered its fiscal 2011 guidance for sales and Adjusted EBITDA and increased fiscal 2011 guidance for net loss.  Sales are now expected to be between $25.0 billion and $25.2 billion with same store sales expected to range from a decrease of 1.5 percent to a decrease of 0.9 percent. Adjusted EBITDA is expected to be between $815 million and $855 million. Net loss is expected to be between $655 million or $0.74 per diluted share and $525 million or $0.60 per diluted share.  Based upon current spending trends and expectations for the remainder of the year, the guidance for capital expenditures has been reduced to $215 million.

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Rite Aid FY11 Q3 Press Release – page 3

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 December 18, 2010.  T he 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 29105610.

Rite Aid is one of the nation’s leading drugstore chains with more than 4,700 stores in 31 states and the District of Columbia with fiscal 2010 annual revenues of $25.7 billion.  Information about Rite Aid, including corporate background and press releases, is available through Rite Aid’s website at www.riteaid.com.

This press release contains forward-looking statements, including guidance, 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; general economic conditions, including the impact of continued high unemployment and changing consumer behavior; inflation and interest rate movements; our ability to improve the operating performance of our stores in accordance with o ur long term strategy; our ability to realize same store sales growth; our ability to hire and retain qualified personnel; the efforts of private and public third-party payors to reduce prescription drug reimbursements and encourage mail order; competitive pricing pressures, including aggressive promotional activity from our competitors; decisions to close additional stores and distribution centers, which could result in further charges to our operating statement; our ability to manage expenses; our ability to realize the benefits from actions to further reduce costs and investment in working capital; continued consolidation of the drugstore industry; changes in state or federal legislation or regulations;  the outcome of lawsuits and governmental investigations and healthcare reform; and our ability to maintain the listing of our common stock on the New York Stock Exchange and the resulting impact to our indebtedness and financial condition.   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 (loss), the most comparable GAAP financial measure. We define Adjusted EBITDA as net income (loss) from operations excluding the impact of income taxes, interest expense and securitization costs, 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, revenue deferrals related to customer loyalty programs and other items.

# # #

RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(unaudited)
	November 27, 2010			February 27, 2010
ASSETS
Current assets:
Cash and cash equivalents	$	122,042		$	103,594
Accounts receivable, net		974,472			955,502
Inventories, net of LIFO reserve of $875,193 and $831,113		3,330,805			3,238,644
Prepaid expenses and other current assets		100,037			210,928
Total current assets		4,527,356			4,508,668
Property, plant and equipment, net		2,138,540			2,293,153
Other intangibles, net		701,497			823,088
Other assets		448,575			425,002
Total assets	$	7,815,968		$	8,049,911
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current maturities of long-term debt and lease financing obligations	$	34,248		$	51,502
Accounts payable		1,292,350			1,159,069
Accrued salaries, wages and other current liabilities		1,107,235			965,121
Total current liabilities		2,433,833			2,175,692
Long-term debt, less current maturities		6,089,772			6,185,633
Lease financing obligations, less current maturities		125,074			133,764
Other noncurrent liabilities		1,175,505			1,228,373
Total liabilities		9,824,184			9,723,462
Commitments and contingencies		-			-
Stockholders' deficit:
Preferred stock - Series G		1			1
Preferred stock - Series H		159,261			152,304
Common stock		890,322			887,636
Additional paid-in capital		4,280,455			4,277,200
Accumulated deficit		(7,309,103	)		(6,959,372	)
Accumulated other comprehensive loss		(29,152	)		(31,320	)
Total stockholders' deficit		(2,008,216	)		(1,673,551	)
Total liabilities and stockholders' deficit	$	7,815,968		$	8,049,911

Chart 1

RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)
	Thirteen weeks ended November 27, 2010			Thirteen weeks ended November 28, 2009
Revenues	$	6,202,353		$	6,352,283
Costs and expenses:
Cost of goods sold		4,561,200			4,665,871
Selling, general and administrative expenses		1,578,142			1,605,213
Lease termination and impairment charges		17,003			35,072
Interest expense		133,742			135,770
Gain on sale of assets, net		(7,050	)		(1,459	)
		6,283,037			6,440,467
Loss before income taxes		(80,684	)		(88,184	)
Income tax benefit		(1,613	)		(4,322	)
Net loss	$	(79,071	)	$	(83,862	)
Basic and diluted loss per share:
Numerator for loss per share:
Net loss	$	(79,071	)	$	(83,862	)
Accretion of redeemable preferred stock		(26	)		(26	)
Cumulative preferred stock dividends		(2,354	)		(2,218	)
Loss attributable to common stockholders - basic and diluted	$	(81,451	)	$	(86,106	)
Basic and diluted weighted average shares		883,515			881,371
Basic and diluted loss per share	$	(0.09	)	$	(0.10	)

Chart 2

RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)
	Thirty-nine weeks ended November 27, 2010			Thirty-nine weeks ended November 28, 2009
Revenues	$	18,758,441		$	19,205,331
Costs and expenses:
Cost of goods sold		13,766,924			14,056,578
Selling, general and administrative expenses		4,827,780			4,961,798
Lease termination and impairment charges		56,820			130,810
Interest expense		415,077			374,076
Loss on debt modifications and retirements, net		44,003			993
Gain on sale of assets, net		(10,786	)		(25,598	)
		19,099,818			19,498,657
Loss before income taxes		(341,377	)		(293,326	)
Income tax expense		8,354			4,994
Net loss	$	(349,731	)	$	(298,320	)
Basic and diluted loss per share:
Numerator for loss per share:
Net loss	$	(349,731	)	$	(298,320	)
Accretion of redeemable preferred stock		(77	)		(77	)
Cumulative preferred stock dividends		(6,957	)		(6,556	)
Loss attributable to common stockholders - basic and diluted	$	(356,765	)	$	(304,953	)
Basic and diluted weighted average shares		882,668			880,577
Basic and diluted loss per share	$	(0.40	)	$	(0.35	)

Chart 3

RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL OPERATING AND CASH FLOW INFORMATION
(Dollars in thousands, except per share amounts)
(unaudited)
	Thirteen weeks ended November 27, 2010			Thirteen weeks ended November 28, 2009
SUPPLEMENTAL OPERATING INFORMATION
Revenues	$	6,202,353		$	6,352,283
Cost of goods sold		4,561,200			4,665,871
Gross profit		1,641,153			1,686,412
LIFO charge		3,024			14,770
FIFO gross profit		1,644,177			1,701,182
Gross profit as a percentage of revenues		26.46%			26.55%
LIFO charge as a percentage of revenues		0.05%			0.23%
FIFO gross profit as a percentage of revenues		26.51%			26.78%
Selling, general and administrative expenses		1,578,142			1,605,213
Selling, general and administrative expenses as a percentage of revenues		25.44%			25.27%
Cash interest expense		123,489			124,495
Non-cash interest expense		10,253			11,275
Total interest expense		133,742			135,770
Securitization costs (included in SG&A)		-			8,362
Total interest expense and securitization costs		133,742			144,132
Adjusted EBITDA		212,499			254,192
Adjusted EBITDA as a percentage of revenues		3.43%			4.00%
Net loss		(79,071	)		(83,862	)
Net loss as a percentage of revenues		-1.27%			-1.32%
Total debt		6,249,094			6,421,643
Invested cash		1,371			21,209
Total debt net of invested cash		6,247,723			6,400,434
SUPPLEMENTAL CASH FLOW INFORMATION
Payments for property, plant and equipment		31,864			43,342
Intangible assets acquired		5,849			2,214
Total cash capital expenditures		37,713			45,556
Equipment received for noncash consideration		222			1,612
Equipment financed under capital leases		772			-
Gross capital expenditures	$	38,707		$	47,168

Chart 4

RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL OPERATING AND CASH FLOW INFORMATION
(Dollars in thousands, except per share amounts)
(unaudited)
	Thirty-nine weeks ended November 27, 2010			Thirty-nine weeks ended November 28, 2009
SUPPLEMENTAL OPERATING INFORMATION
Revenues	$	18,758,441		$	19,205,331
Cost of goods sold		13,766,924			14,056,578
Gross profit		4,991,517			5,148,753
LIFO charge		44,080			44,310
FIFO gross profit		5,035,597			5,193,063
Gross profit as a percentage of revenues		26.61%			26.81%
LIFO charge as a percentage of revenues		0.23%			0.23%
FIFO gross profit as a percentage of revenues		26.84%			27.04%
Selling, general and administrative expenses		4,827,780			4,961,798
Selling, general and administrative expenses as a percentage of revenues		25.74%			25.84%
Cash interest expense		381,442			345,079
Non-cash interest expense		33,635			28,997
Total interest expense		415,077			374,076
Securitization costs (included in SG&A)		-			36,862
Total interest expense and securitization costs		415,077			410,938
Adjusted EBITDA		643,533			719,923
Adjusted EBITDA as a percentage of revenues		3.43%			3.75%
Net loss		(349,731	)		(298,320	)
Net loss as a percentage of revenues		-1.86%			-1.55%
Total debt		6,249,094			6,421,643
Invested cash		1,371			21,209
Total debt net of invested cash		6,247,723			6,400,434
SUPPLEMENTAL CASH FLOW INFORMATION
Payments for property, plant and equipment		104,383			124,541
Intangible assets acquired		16,071			5,661
Total cash capital expenditures		120,454			130,202
Equipment received for noncash consideration		2,428			9,450
Equipment financed under capital leases		2,836			185
Gross capital expenditures	$	125,718		$	139,837

Chart 5

RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(In thousands)
	Thirteen weeks ended November 27, 2010			Thirteen weeks ended November 28, 2009
Reconciliation of net loss to adjusted EBITDA:
Net loss	$	(79,071	)	$	(83,862	)
Adjustments:
Interest expense and securitization costs		133,742			144,132
Income tax benefit		(1,613	)		(4,322	)
Depreciation and amortization		124,985			132,547
LIFO charges		3,024			14,770
Lease termination and impairment charges		17,003			35,072
Stock-based compensation expense		4,167			5,826
Gain on sale of assets, net		(7,050	)		(1,459	)
Closed facility liquidation expense		2,386			4,445
Severance costs		2,019			135
Customer loyalty card programs revenue deferral (a)		13,807			-
Other		(900	)		6,908
Adjusted EBITDA	$	212,499		$	254,192
Percent of revenues		3.43%			4.00%

Notes:

(a)  Relates to deferral of revenues for our customer loyalty programs.

Chart 6

RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(In thousands)
	Thirty-nine weeks ended November 27, 2010			Thirty-nine weeks ended November 28, 2009
Reconciliation of net loss to adjusted EBITDA:
Net loss	$	(349,731	)	$	(298,320	)
Adjustments:
Interest expense and securitization costs		415,077			410,938
Income tax expense		8,354			4,994
Depreciation and amortization		378,998			404,307
LIFO charges		44,080			44,310
Lease termination and impairment charges		56,820			130,810
Stock-based compensation expense		13,902			18,335
Gain on sale of assets, net		(10,786	)		(25,598	)
Loss on debt modifications and retirements, net		44,003			993
Closed facility liquidation expense		6,619			13,253
Severance costs		2,029			6,184
Customer loyalty card programs revenue deferral (a)		34,238			-
Other		(70	)		9,717
Adjusted EBITDA	$	643,533		$	719,923
Percent of revenues		3.43%			3.75%

Notes:

(a)  Relates to deferral of revenues for our customer loyalty programs.

Chart 7

RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
	Thirteen weeks ended November 27, 2010			Thirteen weeks ended November 28, 2009
OPERATING ACTIVITIES:
Net loss	$	(79,071	)	$	(83,862	)
Adjustments to reconcile to net cash used in operating activities:
Depreciation and amortization		124,985			132,547
Lease termination and impairment charges		17,003			35,072
LIFO charges		3,024			14,770
Gain on sale of assets, net		(7,050	)		(1,459	)
Stock-based compensation expense		4,167			5,826
Changes in operating assets and liabilities:
Net repayments to accounts receivable securitization		-			(400,000	)
Accounts receivable		(27,633	)		(65,332	)
Inventories		(76,330	)		(166,340	)
Accounts payable		(38,648	)		91,643
Other assets and liabilities, net		33,146			2,084
Net cash used in operating activities		(46,407	)		(435,051	)
INVESTING ACTIVITIES:
Payments for property, plant and equipment		(31,864	)		(43,342	)
Intangible assets acquired		(5,849	)		(2,214	)
Proceeds from dispositions of assets and investments		8,345			3,510
Net cash used in investing activities		(29,368	)		(42,046	)
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt		-			396,703
Net proceeds from revolver		58,000			124,000
Principal payments on long-term debt		(6,147	)		(7,284	)
Change in zero balance cash accounts		13,789			13,448
Net proceeds from the issuance of common stock		7			30
Deferred financing costs paid		(244	)		(14,178	)
Net cash provided by financing activities		65,405			512,719
(Decrease) increase in cash and cash equivalents		(10,370	)		35,622
Cash and cash equivalents, beginning of period		132,412			121,007
Cash and cash equivalents, end of period	$	122,042		$	156,629

Chart 8

RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
	Thirty-nine weeks ended November 27, 2010			Thirty-nine weeks ended November 28, 2009
OPERATING ACTIVITIES:
Net loss	$	(349,731	)	$	(298,320	)
Adjustments to reconcile to net cash provided by (used in) operating activities:
Depreciation and amortization		378,998			404,307
Lease termination and impairment charges		56,820			130,810
LIFO charges		44,080			44,310
Gain on sale of assets, net		(10,786	)		(25,598	)
Stock-based compensation expense		13,902			18,335
Loss on debt modification and retirements, net		44,003			993
Proceeds from insured loss		-			1,380
Changes in operating assets and liabilities:
Net repayments to accounts receivable securitization		-			(555,000	)
Accounts receivable		(18,970	)		(8,446	)
Inventories		(136,496	)		(111,301	)
Accounts payable		272,730			128,646
Other assets and liabilities, net		172,852			45,575
Net cash provided by (used in) operating activities		467,402			(224,309	)
INVESTING ACTIVITIES:
Payments for property, plant and equipment		(104,383	)		(124,541	)
Intangible assets acquired		(16,071	)		(5,661	)
Proceeds from sale-leaseback transactions		-			6,532
Proceeds from dispositions of assets and investments		17,266			39,208
Net cash used in investing activities		(103,188	)		(84,462	)
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt		650,000			1,303,307
Net repayments to revolver		(22,000	)		(714,000	)
Principal payments on long-term debt		(775,236	)		(167,174	)
Change in zero balance cash accounts		(144,693	)		(49,475	)
Net proceeds from the issuance of common stock		101			30
Financing fees paid for early debt redemption		(19,666	)		-
Deferred financing costs paid		(34,272	)		(59,323	)
Net cash (used in) provided by financing activities		(345,766	)		313,365
Increase in cash and cash equivalents		18,448			4,594
Cash and cash equivalents, beginning of period		103,594			152,035
Cash and cash equivalents, end of period	$	122,042		$	156,629

Chart 9

RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED EBITDA GUIDANCE
YEAR ENDING FEBRUARY 26, 2011
(In thousands, except per share amounts)
	Guidance Range
	Low			High
Sales	$	25,000,000		$	25,150,000
Same store sales		-1.50%			-0.90%
Gross capital expenditures	$	215,000		$	215,000
Reconciliation of net loss to adjusted EBITDA:
Net loss	$	(655,000	)	$	(525,000	)
Adjustments:
Interest expense		560,000			550,000
Income tax expense		20,000			15,000
Depreciation and amortization		505,000			495,000
LIFO charge		70,000			60,000
Store closing, liquidation, and impairment charges		200,000			160,000
Stock-based compensation expense		20,000			15,000
Customer loyalty card programs revenue deferral (a)		50,000			40,000
Loss on debt modification		45,000			45,000
Other		-			-
Adjusted EBITDA	$	815,000		$	855,000
Diluted loss per share	$	(0.74	)	$	(0.60	)

(a) Relates to deferral of revenues for our customer loyalty programs.

Chart 10