Albertsons Companies and Rite Aid Corporation announce merger agreement

  • Combination Will Create Strong Local Networks in Attractive Geographies
  • Integrated Platform Will Provide Customers Greater Choice, Convenience, and Access,
    and Accelerate Omni-Channel Strategy to Reach More Customers and Drive Profitable Growth
  • John Standley to Serve as Chief Executive Officer and Bob Miller to Serve as Chairman
    of Combined Company
  • Transaction Expected to Generate Run Rate Cost Synergies of $375 Million and Create
    Incremental Revenue Opportunities of Over $3.6 Billion
  • Combined Company Expected to Generate Pro Forma 2018[1] Revenues of $83 Billion and Adjusted
    Pro Forma EBITDA of $3.7 Billion (Including Run Rate Cost Synergies)

BOISE, Idaho and CAMP HILL, Pa., 2018-Feb-21 — /EPR Retail News/ — Albertsons Companies, one of the nation’s largest grocery retailers, and Rite Aid Corporation (NYSE:RAD), one of the nation’s leading drugstore chains, announced a definitive merger agreement under which privately held Albertsons Companies will merge with publicly traded Rite Aid.

Under the terms of the agreement, in exchange for every 10 shares of Rite Aid common stock, Rite Aid shareholders will have the right to elect to receive either (i) one share of Albertsons Companies common stock plus approximately $1.83 in cash or (ii) 1.079 shares of Albertsons Companies stock. Depending upon the results of cash elections, upon closing of the merger, shareholders of Rite Aid will own a 28.0 percent to 29.6 percent stake in the combined company, and current Albertsons Companies shareholders will own a 70.4 percent to 72.0 percent stake in the combined company on a fully diluted basis. Immediately following completion of the merger and assuming that all Rite Aid shareholders elect to receive shares plus cash, Albertsons Companies will have approximately 392.9 million shares outstanding on a pro forma and fully diluted basis. Following the close of the transaction and the share exchange, Albertsons Companies’ shares are expected to trade on the New York Stock Exchange.

Albertsons Companies is backed by an investment consortium led by Cerberus Capital Management, L.P. (“Cerberus”), which also includes Kimco Realty Corporation (NYSE: KIM), Klaff Realty LP, Lubert-Adler Partners LP, and Schottenstein Stores Corporation.

Current Rite Aid Chairman and Chief Executive Officer John Standley will become Chief Executive Officer of the combined company, with current Albertsons Companies Chairman and Chief Executive Officer Bob Miller serving as Chairman. The combined company is expected to be comprised of leadership from both companies and will be dual headquartered in Boise, Idaho, and Camp Hill, Pennsylvania. The name of the combined company will be determined by transaction close.

The integrated company will operate approximately 4,900 locations, 4,350 pharmacy counters, and 320 clinics across 38 states and Washington, D.C., serving 40+ million customers per week. Most Albertsons Companies pharmacies will be rebranded as Rite Aid, and the company will continue to operate Rite Aid stand-alone pharmacies.

The combination will provide customers with flexible and convenient access to a full range of food, health, and wellness offerings and will deliver significant value to customers, employees, and shareholders by:

• Enhancing Geographic Footprint and Creating Local Networks in Attractive Geographies. The new company will have an expanded footprint and be ranked first or second in 66 percent of the top metropolitan areas in the United States and will be ranked first or second in 70 percent of pharmacy locations[2]. It will establish the leading integrated food, health, and wellness retailer on the West Coast and will have a strong brand position in the Northeast.

• Leveraging Strong Pharmacy Network and Rite Aid’s Pharmacy Benefit Management Company, EnvisionRxOptions, to Drive Customer Growth. The combined company will be positioned to drive incremental growth by deepening existing relationships and expanding reach across higher-value pharmacy customers. This will be achieved through a full suite of health and wellness capabilities, including specialty pharmacy offerings and in-store RediClinics in larger Albertsons Companies stores and stand-alone Rite Aid stores. In addition, investing in preferred relationships with EnvisionRxOptions, other PBMs, and regional payors is expected to drive prescription growth.

• Utilizing Data Analytics and Integrated Loyalty Programs to Drive Growth and Target New Customers. The new company will capitalize on enhanced data and analytics to unlock profitable growth through new customer acquisition, new merchandising programs, and demand forecasting. It will also create cross-branded opportunities for its loyalty programs, improving connections across a combined current base of 25 million active loyalty program participants.

• Combining Strong Own Brand Portfolios with Extensive Manufacturing and Distribution Network to Drive Revenue Growth and Operating Efficiencies. The combination of Albertsons Companies’ billion dollar own brands, including O Organics and Lucerne, and its manufacturing and operating capabilities, with Rite Aid’s own brands in health and wellness, including B4Y and Daylogic, and its pharmacy expertise will allow the combined company to drive growth opportunities and efficiencies across its purchasing, marketing, manufacturing, and merchandising functions.

• Serving Customers When, Where, and How They Want to Shop. The combined company’s expanding omni-channel platform will provide customers with convenience, choice, and flexibility through multiple in-store formats, digital channels, and same-day food and prescription delivery options from stores and via Drive Up & Go.

“This powerful combination enables us to become a truly differentiated leader in delivering value, choice, and flexibility to meet customers’ evolving food, health, and wellness needs,” said Rite Aid Chairman and Chief Executive Officer John Standley. “The combined platform positions Rite Aid to capitalize on our pharmacy expertise and expand and enhance our pharmacy footprint. We are confident that delivering improved customer experiences and value will drive growth and profitability while creating compelling  long-term value for shareholders.”

“The hallmark of Albertsons Companies’ business has been to become the favorite local supermarket of our customers,” said Bob Miller, Albertsons Companies Chairman and Chief Executive Officer. “We have always put our customers first, and our combination with Rite Aid will enable us to even better serve the valuable pharmacy customer by providing a fully integrated one-stop-shop for our customers’ food, health, and wellness needs. I have long known the excellent management team at Rite Aid, and we share a singular focus on superior customer service and a clear vision and strategy to become the favorite local supermarket and pharmacy to shoppers in every neighborhood we serve.”

Lenard Tessler, Vice Chairman and Senior Managing Director at Cerberus, commented, “As a long-term partner to Albertsons Companies’ world-class management team, this transaction highlights Cerberus’s confidence in this team and our conviction in the underlying customer focus driving this combination. As significant shareholders, we are very optimistic about the future of the combined company.”

Financial Details

The combined business will benefit from an enhanced financial profile and solid capital structure, which will support growth and expansion. On a pro forma basis, the combined company is expected to generate year one revenues of approximately $83 billion (excluding potential revenue opportunities) and year one Adjusted Pro Forma EBITDA of approximately $3.7 billion (including run rate cost synergies). The combined company’s pro forma net leverage ratio is expected to be 3.8x at transaction close (including run rate cost synergies).

The combined company expects to deliver annual run-rate cost synergies of $375 million in approximately three years and access potential annual revenue opportunities of $3.6 billion. Over 60 percent of the cost synergies are expected to be realized within the first two years post-close. Identified revenue opportunities primarily include partnering with payors, including Rite Aid’s PBM, EnvisionRx, through preferred networks to drive additional high-value customers, connecting Rite Aid’s reliable pharmacy customer base to Albertsons Companies through loyalty programs and targeted marketing, leveraging Albertsons Companies’ grocery capabilities and Rite Aid’s pharmacy expertise to enhance the customer offering, and driving traffic through the omni-channel experience. Cost synergies will be achieved primarily through procurement savings, leveraging efficiencies realized by a combined supply chain, combined distribution and fulfillment channels, and leveraging manufacturing capabilities.

Governance

The board of directors will be comprised of nine directors, four of whom will be named by Albertsons Companies (including Bob Miller and Lenard Tessler), four of whom will be named by Rite Aid (including John Standley), and one of whom will be a jointly selected director. A majority of the Board will be independent. Lenard Tessler will serve as Lead Director.

Approvals and Timing

The transaction has been approved unanimously by the boards of directors of both companies. The merger is expected to close early in the second half of calendar year 2018, subject to the approval of Rite Aid’s shareholders, regulatory approvals, and other customary closing conditions.

Advisors

Credit Suisse and Goldman Sachs & Co. LLC served as lead financial advisors to Albertsons Companies and Schulte Roth & Zabel LLP acted as legal advisor. Bank of America Merrill Lynch also served as financial advisor to Albertsons Companies and is providing committed financing for the proposed transaction together with Credit Suisse and Goldman Sachs.

Citi served as exclusive financial advisor to Rite Aid, and Skadden, Arps, Slate, Meagher and Flom LLP acted as legal advisor.

Investor Call

An analyst call will be conducted at 8:30 a.m. Eastern Time today with remarks by both management teams. The call will be simulcast via the internet and can be accessed in the Investor Relations sections of www.riteaid.com and www.albertsonscompanies.com, along with an accompanying investor presentation. You may participate in the call by dialing (877) 654-4425 within the U.S. and Canada or (706) 679-0005 outside of the U.S. and Canada. The reservation number is: 9687728.

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 March 6, 2018. 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 reservation number 9687728.

About Albertsons Companies

Albertsons Companies is one of the largest food and drug retailers in the United States, with both a strong local presence and national scale. We operate stores across 35 states and the District of Columbia under 20 well-known banners including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen and Carrs, as well as meal kit company Plated based in New York City. Albertsons Companies is committed to helping people across the country live better lives by making a meaningful difference, neighborhood by neighborhood. In 2016 alone, along with the Albertsons Companies Foundation, the company gave nearly $300 million in food and financial support. These efforts helped millions of people in the areas of hunger relief, education, cancer research and treatment, programs for people with disabilities and veterans outreach.

About Rite Aid Corporation

Rite Aid Corporation (NYSE: RAD) is one of the nation’s leading drugstore chains with fiscal 2017 annual revenues of $32.8 billion. The Company also owns EnvisionRxOptions, a multi-faceted healthcare and pharmacy benefit management (PBM) company supporting a membership base of more than 22 million members; RediClinic, a convenient care clinic operator with locations in Delaware, New Jersey, Pennsylvania, Texas and Washington; and Health Dialog, a leading provider of population health management solutions including analytics, a multi-channel coaching platform and shared decision-making tools. Information about Rite Aid, including corporate background and press releases, is available through the company’s website at www.riteaid.com.

About Cerberus Capital Management, L.P.

Established in 1992, Cerberus Capital Management, L.P. is a global leader in alternative investing with more than US $34 billion under management across complementary credit, private equity, and real estate strategies. From its headquarters in New York City and network of affiliate and advisory offices in the United States, Europe, and Asia, Cerberus has the on-the-ground presence to invest in multiple asset classes globally.

Important Notice Regarding Forward-Looking Statements and Non-GAAP Measures

This press release contains certain “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, both as amended by the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the pending merger between Albertsons Companies Inc. (“Albertsons Companies”) and Rite Aid Corporation (“Rite Aid”) and the transactions contemplated thereby, and the parties perspectives and expectations, are forward looking statements. Such statements include, but are not limited to, statements regarding the benefits of the proposed merger, integration plans, expected synergies and revenue opportunities, anticipated future financial and operating performance and results, including estimates for growth, the expected management and governance of the combined company, and the expected timing of the transactions contemplated by the merger agreement. The words “expect,” “believe,” “estimate,” “intend,” “plan” and similar expressions indicate forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to various risks and uncertainties, assumptions (including assumptions about general economic, market, industry and operational factors), known or unknown, which could cause the actual results to vary materially from those indicated or anticipated. Such risks and uncertainties include, but are not limited to, risks related to the expected timing and likelihood of completion of the pending merger, including the risk that the transaction may not close due to one or more closing conditions to the transaction not being satisfied or waived, such as regulatory approvals not being obtained, on a timely basis or otherwise, or that a governmental entity prohibited, delayed or refused to grant approval for the consummation of the transaction or required certain conditions, limitations or restrictions in connection with such approvals, or that the required approval of the merger agreement by the stockholders of Rite Aid was not obtained; risks related to the ability of Albertsons Companies and Rite Aid to successfully integrate the businesses; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement (including circumstances requiring a party to pay the other party a termination fee pursuant to the merger agreement); the risk that there may be a material adverse change of Rite Aid or Albertsons Companies; risks related to disruption of management time from ongoing business operations due to the proposed transaction; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of Rite Aid’s common stock, and the risk that the proposed transaction and its announcement could have an adverse effect on the ability of Albertsons Companies and Rite Aid to retain customers and retain and hire key personnel and maintain relationships with their suppliers and customers and on their operating results and businesses generally; risks related to successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected; the risk that the combined company may be unable to achieve cost-cutting synergies or it may take longer than expected to achieve those synergies; and risks associated with the financing of the proposed transaction. A further list and description of risks and uncertainties can be found in Rite Aid’s Annual Report on Form 10-K for the fiscal year ending March 4, 2017 filed with the Securities and Exchange Commission (“SEC”), in Albertsons Companies, LLC’s Form S-4 registration statement filed with the SEC on June 28, 2017, in Albertsons Companies, LLC’s quarterly reports on Form 10-Q filed with the SEC on August 1, 2017, October 23, 2017 and January 1, 2018 and in the Form S-4 that will be filed with the SEC by Albertsons Companies in connection with the proposed merger, and other documents that the parties may file or furnish with the SEC, 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. Forward-looking statements relate only to the date they were made, and Albertsons Companies, Rite Aid, and their subsidiaries undertake no obligation to update forward-looking statements to reflect events or circumstances after the date they were made except as required by law or applicable regulation.

Adjusted EBITDA (the “Non-GAAP Measure”) is a performance measure that provides supplemental information that Albertsons Companies and Rite Aid believe is useful to analysts and investors to evaluate ongoing results of operations, when considered alongside other GAAP measures such as net income, operating income and gross profit. This Non-GAAP Measure excludes the financial impact of items management does not consider in assessing the ongoing operating performance of Albertsons Companies, Rite Aid, or the combined company, and thereby facilitates review of its operating performance on a period-to-period basis. Other companies may have different capital structures or different lease terms, and comparability to the results of operations of Albertsons Companies, Rite Aid, or the combined company may be impacted by the effects of acquisition accounting on its depreciation and amortization. As a result of the effects of these factors and factors specific to other companies, Albertsons Companies and Rite Aid believe Adjusted EBITDA provides helpful information to analysts and investors to facilitate a comparison of their operating performance to that of other companies. The presentation of the Non-GAAP Measure in this press release should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items. A reconciliation of the Non-GAAP Measure has not been provided because such reconciliation could not be produced without unreasonable effort.

Additional Information and Where to Find It

In connection with the proposed strategic combination involving Rite Aid and Albertsons Companies Inc., Rite Aid and Albertsons Companies Inc. intend to file relevant materials with the SEC, including that Albertsons Companies Inc. will file a registration statement on Form S-4 that will include a proxy statement/prospectus to be distributed to Rite Aid stockholders. Rite Aid will mail the proxy statement/prospectus and a proxy card to each stockholder entitled to vote at the special meeting relating to the proposed merger. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. RITE AID’S EXISTING PUBLIC FILINGS WITH THE SEC SHOULD ALSO BE READ, INCLUDING THE RISK FACTORS CONTAINED THEREIN.

Investors and security holders may obtain copies of the Form S-4, including the proxy statement/prospectus, as well as other filings containing information about Rite Aid, free of charge, from the SEC’s Web site (www.sec.gov). Investors and security holders may also obtain Rite Aid’s SEC filings in connection with the transaction, free of charge, from Rite Aid’s Web site (www.RiteAid.com) under the link “Investor Relations” and then under the tab “SEC Filings,” or by directing a request to Rite Aid, Byron Purcell, Attention: Senior Director, Treasury Services & Investor Relations. Copies of documents filed with the SEC by Albertsons Companies Inc. will be made available, free of charge, on Albertsons Companies’ website atwww.albertsonscompanies.com.

Participants in Solicitation

Rite Aid, Albertsons Companies Inc. and their respective directors, executive officers and employees and other persons may be deemed to be participants in the solicitation of proxies from the holders of Rite Aid common stock in respect of the proposed transaction. Information regarding Rite Aid’s directors and executive officers is available in its definitive proxy statement for Rite Aid’s 2017 annual meeting of stockholders filed with the SEC on June 7, 2017, as modified or supplemented by any Form 3 or Form 4 filed with the SEC since the date of such definitive proxy statement. Information about the directors and executive officers of Albertsons Companies will be set forth in the Form S-4. Other information regarding the interests of the participants in the proxy solicitation will be included in the proxy statement/prospectus when it becomes available. These documents can be obtained free of charge from the sources indicated above.

This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Media and Investor Contacts:

For Albertsons Companies
INVESTORS:                                     MEDIA:
Melissa Plaisance                               Christine Wilcox
(925) 226-5115                                 (208) 395-4163
melissa.plaisance@albertsons.com      christine.wilcox@albertsons.com

For Rite Aid
INVESTORS:                                     MEDIA:
Byron Purcell                                     Ashley Flower
(717) 975-5809                                 (717) 975-5718
investor@riteaid.com                         aflower@riteaid.com

For Cerberus Capital Management L.P.

MEDIA:
Andrew Johnson
(646) 495-2700
ajohnson@gpg.com

Contact:

Investors: 
Byron Purcell
717-975-5809
investor@riteaid.com

Media: 
Ashley Flower
717-975-5718

Source: RiteAid

Rite Aid updates on the progress of its plans to sell stores to Walgreens Boots Alliance

CAMP HILL, Pa., 2018-Feb-13 — /EPR Retail News/ — Rite Aid Corporation (NYSE: RAD) today (Feb. 8, 2018) provided an update on the progress of its plans to sell stores to Walgreens Boots Alliance, Inc. (Nasdaq: WBA) pursuant to the previously disclosed Amended and Restated Asset Purchase Agreement, dated as of September 18, 2017 (the “Asset Purchase Agreement”). As of February 8, 2018, Rite Aid has transferred 1,114 stores and related assets to WBA, and has received cash proceeds of $2,424 million, which the Company continues to use to reduce debt. Under the Asset Purchase Agreement, WBA will purchase a total of 1,932 stores, three distribution centers and related inventory from Rite Aid for an all-cash purchase price of $4,375 million on a cash-free, debt-free basis.

“We have now completed more than half of the planned store transfers and remain on track to finish the process in the spring of this year,” said Rite Aid Chairman and CEO John Standley. “As we work to complete this process, we remain focused on opportunities to build our business while delivering a great experience to our customers and patients and driving value for our shareholders.”

The majority of the closing conditions have been satisfied, and the subsequent transfers of Rite Aid stores and related assets remain subject to minimal customary closing conditions applicable only to the stores being transferred at such subsequent closing, as specified in the Asset Purchase Agreement. Additional details regarding today’s announcement have been filed with the Securities and Exchange Commission on Form 8-K.

Rite Aid is one of the nation’s leading drugstore chains with fiscal 2017 annual revenues of $32.8 billion. Information about Rite Aid, including corporate background and press releases, is available through the company’s website at 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 the expected timing of subsequent closings of the sale of Rite Aid stores and assets to WBA; the ability of the parties to complete each of the subsequent closings for sale and related subsequent transactions considering the various closing conditions applicable to the stores, related assets and/or distribution centers being transferred at such subsequent closing; the outcome of legal and regulatory matters in connection with the sale of stores and assets of Rite Aid to WBA; the expected benefits of the transactions such as improved operations, growth potential, market profile and financial strength; the competitive ability and position of Rite Aid following completion of the proposed transactions; the ability of Rite Aid to implement new business strategies following the completion of the proposed transactions; the ability of Rite Aid to repay its debt using the proceeds from the proposed transactions 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, 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, industry, market, competitive, regulatory and political conditions; our ability to improve the operating performance of our stores in accordance with our long term strategy; 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; outcomes of legal and regulatory matters; changes in legislation or regulations, including healthcare reform; our ability to achieve the benefits of our efforts to reduce the costs of our generic and other drugs; risks related to the proposed transactions, including the possibility that the subsequent transactions may not close, including because a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transactions, or may require conditions, limitations or restrictions in connection with such approvals, the risk that there may be a material adverse change of Rite Aid, or the business of Rite Aid may suffer as a result of uncertainty surrounding the proposed transactions; risks related to the ability to realize the anticipated benefits of the proposed transactions; risks associated with the financing of the proposed transaction; disruption from the proposed transaction making it more difficult to maintain business and operational relationships; the effect of the pending sale on Rite Aid’s business relationships (including, without limitation, customers and suppliers), operating results and business generally; risks related to diverting management’s or employees’ attention from ongoing business operations; the risk that Rite Aid’s stock price may decline significantly if the proposed transaction is not completed; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the proposed transactions; potential changes to our strategy in the event the remaining proposed transactions do not close, which may include delaying or reducing capital or other expenditures, selling assets or other operations, attempting to restructure or refinance our debt, or seeking additional capital, and other business effects. 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, 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.

Contact:

Investors: 

Byron Purcell
717-975-5809
investor@riteaid.com

Media:
Susan Henderson
717-730-7766

Source: Rite Aid Corporation

Rite Aid updates on the progress of its plans to sell stores to Walgreens Boots Alliance, Inc.

CAMP HILL, Pa., 2018-Jan-23 — /EPR Retail News/ — Rite Aid Corporation (NYSE: RAD) today (Jan. 22, 2018) provided an update on the progress of its plans to sell stores to Walgreens Boots Alliance, Inc. (Nasdaq: WBA) pursuant to the previously disclosed Amended and Restated Asset Purchase Agreement, dated as of September 18, 2017 (the “Asset Purchase Agreement”). As of January 22, 2018, Rite Aid has transferred 625 stores and related assets to WBA, and has received cash proceeds of $1,309.8 million, which it is using to repay all of its $970 million of outstanding secured loans while maintaining a strong liquidity position. Under the Asset Purchase Agreement, WBA will purchase a total of 1,932 stores, three distribution centers and related inventory from Rite Aid for an all-cash purchase price of $4,375 million on a cash-free, debt-free basis.

“Our teams continue to make tremendous progress in transferring stores to WBA and I want to thank them for their ongoing commitment and dedication,” said Rite Aid Chairman and CEO John Standley. “We are on track to complete the transfer of stores in the spring of this year. Going forward, we remain focused on the continued smooth execution of that process and capitalizing on our most significant business-building opportunities as we work together to deliver a great experience to our customers and patients, and drive value for our shareholders.”

The majority of the closing conditions have been satisfied, and the subsequent transfers of Rite Aid stores and related assets remain subject to minimal customary closing conditions applicable only to the stores being transferred at such subsequent closing, as specified in the Asset Purchase Agreement. Additional details regarding today’s announcement have been filed with the Securities and Exchange Commission on Form 8-K.

Rite Aid is one of the nation’s leading drugstore chains with fiscal 2017 annual revenues of $32.8 billion. Information about Rite Aid, including corporate background and press releases, is available through the company’s website at 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 the expected timing of subsequent closings of the sale of Rite Aid stores and assets to WBA; the ability of the parties to complete each of the subsequent closings for sale and related subsequent transactions considering the various closing conditions applicable to the stores, related assets and/or distribution centers being transferred at such subsequent closing; the outcome of legal and regulatory matters in connection with the sale of stores and assets of Rite Aid to WBA; the expected benefits of the transactions such as improved operations, growth potential, market profile and financial strength; the competitive ability and position of Rite Aid following completion of the proposed transactions; the ability of Rite Aid to implement new business strategies following the completion of the proposed transactions; the ability of Rite Aid to repay its debt using the proceeds from the proposed transactions 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, 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, industry, market, competitive, regulatory and political conditions; our ability to improve the operating performance of our stores in accordance with our long term strategy; 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; outcomes of legal and regulatory matters; changes in legislation or regulations, including healthcare reform; our ability to achieve the benefits of our efforts to reduce the costs of our generic and other drugs; risks related to the proposed transactions, including the possibility that the subsequent transactions may not close, including because a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transactions, or may require conditions, limitations or restrictions in connection with such approvals, the risk that there may be a material adverse change of Rite Aid, or the business of Rite Aid may suffer as a result of uncertainty surrounding the proposed transactions; risks related to the ability to realize the anticipated benefits of the proposed transactions; risks associated with the financing of the proposed transaction; disruption from the proposed transaction making it more difficult to maintain business and operational relationships; the effect of the pending sale on Rite Aid’s business relationships (including, without limitation, customers and suppliers), operating results and business generally; risks related to diverting management’s or employees’ attention from ongoing business operations; the risk that Rite Aid’s stock price may decline significantly if the proposed transaction is not completed; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the proposed transactions; potential changes to our strategy in the event the remaining proposed transactions do not close, which may include delaying or reducing capital or other expenditures, selling assets or other operations, attempting to restructure or refinance our debt, or seeking additional capital, and other business effects. 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, 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.

Contact:

Investors:

Byron Purcell
717-975-5809
investor@riteaid.com

Media: 

Susan Henderson
717-730-7766

Source: Rite Aid Corporation

Rite Aid Releases Results for Full Year and Fiscal 2017 Fourth Quarter

  • Fourth Quarter Net Loss Per Diluted Share of $0.02, Compared to the Prior Year Net Income Per Diluted Share of $0.06; Full Year
  • Net Income Per Diluted Share of $0.00, Compared to the Prior Year of $0.16
  • Fourth Quarter Adjusted Net Loss Per Diluted Share of $0.00, Compared to the Prior Year Adjusted Net Income Per Diluted Share of $0.07;
  • Full Year Adjusted Net Income Per Diluted Share of $0.06, Compared to the Prior Year of $0.24
  • Adjusted EBITDA of $264.3 Million for the Fourth Quarter, Compared to the Prior Year Adjusted EBITDA of $383.0 Million;
  • Full Year Adjusted EBITDA of $1,137.1 Million, Compared to the Prior Year of $1,402.3 Million

CAMP HILL, Pa, 2017-Apr-29 — /EPR Retail News/ — Rite Aid Corporation (NYSE: RAD) today (Apr. 25, 2017) reported operating results for its fourteen week fourth quarter and fifty-three week fiscal year ended March 4, 2017.

For the fourth quarter, the company reported revenues of $8.5 billion, net loss of $21.1 million, or $0.02 per diluted share, Adjusted net loss of $3.2 million, or $0.00 per diluted share and Adjusted EBITDA of $264.3 million, or 3.1 percent of revenues. For the full year, the company reported revenues of $32.8 billion, net income of $4.1 million, or $0.00 per diluted share, Adjusted net income of $66.8 million or $0.06 per diluted share and Adjusted EBITDA of $1,137.1 million, or 3.5 percent of revenues. The fiscal 2017 fourth quarter and full year results benefited from the extra week in fiscal 2017.

Commenting on Rite Aid’s fourth-quarter and full-year results, Chairman and CEO John Standley said: “We remain confident that the completion of our proposed merger with Walgreens Boots Alliance is in the best interest of Rite Aid shareholders, customers and associates. However, despite our team’s continued focus on growing our business, the extended duration of the merger process is having a negative impact on our results. In addition, we continue to face reimbursement rate challenges that we have been unable to offset with drug cost reductions. As we remain actively engaged in discussions with the Federal Trade Commission to gain regulatory approval for the merger, we are also taking steps to review our ongoing strategy, reduce costs and make necessary changes to our business to improve our performance going forward.”

Fourth Quarter Summary

Revenues for the quarter were $8.5 billion compared to revenues of $8.3 billion in the prior year’s fourth quarter, an increase of $271.2 million or 3.3 percent. Retail Pharmacy Segment revenues were $7.1 billion and increased 4.3 percent compared to the prior year period primarily as a result of the extra week in the fourth quarter, partially offset by a decrease in same store sales. Revenues in the company’s Pharmacy Services Segment were $1.5 billion and decreased 1.3 percent compared to the prior year period.

Same store sales for the quarter decreased 3.0 percent over the prior year, consisting of a 4.3 percent decrease in pharmacy sales and a 0.3 percent decrease in front-end sales. Pharmacy sales included an approximate 246 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, decreased 0.3 percent over the prior year period. Prescription sales accounted for 67.1 percent of total drugstore sales, and third party prescription revenue was 98.4 percent of pharmacy sales.

Net loss was $21.1 million or $0.02 per diluted share compared to last year’s fourth quarter net income of $65.6 million or $0.06 per diluted share. The decline in operating results is due primarily to a decline in Adjusted EBITDA, partially offset by a higher LIFO credit.

Adjusted EBITDA (which is reconciled to net income in the attached tables) was $264.3 million or 3.1 percent of revenues for the fourth quarter compared to $383.0 million or 4.6 percent of revenues for the same period last year. The decline in Adjusted EBITDA is due to a decrease of $129.1 million in the Retail Pharmacy Segment, resulting primarily from lower pharmacy gross profit, which decreased because of lower reimbursement rates and script count, partially offset by good cost control and the benefit from the extra week in the quarter. The decline in Retail Pharmacy Segment Adjusted EBITDA was partially offset by an increase of $10.4 million of Pharmacy Services Segment Adjusted EBITDA, as a result of higher gross profit in the segment.

In the fourth quarter, the company opened 2 stores, relocated 5 stores, remodeled 89 stores and expanded 2 stores, bringing the total number of wellness stores chainwide to 2,418. The company closed 13 stores, resulting in a total store count of 4,536 at the end of the fourth quarter. The company also opened 7 clinics in the fourth quarter, bringing the total to 99.

Full Year Results

For the fiscal year ended March 4, 2017, Rite Aid had revenues of $32.8 billion compared to revenues of $30.7 billion in the prior year, an increase of $2.1 billion or 6.9 percent. Retail Pharmacy Segment revenues were $26.8 billion which were flat compared to the prior year primarily as a result of the extra week this year, offset by a decrease in same store sales. Revenues in the company’s Pharmacy Services Segment, which was acquired on June 24, 2015, were $6.4 billion.

Same store sales for the year decreased 2.2 percent consisting of a 3.2 percent decrease in pharmacy sales and a 0.2 percent increase in front end sales. Pharmacy sales included an approximate 182 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, increased 0.1 percent over the prior year period. Prescription sales accounted for 68.3 percent of total drugstore sales, and third party prescription revenue was 98.2 percent of pharmacy sales.

Net income for fiscal 2017 was $4.1 million or $0.00 per diluted share compared to last year’s net income of $165.5 million or $0.16 per diluted share. The decline in operating results is due primarily to a decline in Adjusted EBITDA and an increase in Pharmacy Services Segment amortization expense, partially offset by lower income tax expense, a $33.2 million loss on debt retirement in the prior year and lower interest expense.

Adjusted EBITDA was $1,137.1 million or 3.5 percent of revenues for the year compared to $1,402.3 million or 4.6 percent of revenues for last year. The decline in Adjusted EBITDA is due to a decrease of $352.1 million in the Retail Pharmacy Segment, resulting from lower pharmacy gross profit due to lower reimbursement rates and script count. The decline in Retail Pharmacy Segment Adjusted EBITDA was partially offset by an increase of $86.9 million of Pharmacy Services Segment Adjusted EBITDA. This increase was due to strong operating results in the current year and the fact that the prior year’s Pharmacy Services Segment results do not reflect a full year’s ownership of EnvisionRx.

For the year, the company relocated 24 stores, acquired 3 stores, remodeled 348 stores, expanded 2 stores, opened 12 stores, and closed 40 stores. The company also opened 21 clinics during the fiscal year.

Rite Aid Merger with Walgreens Boots Alliance

As announced on January 30, 2017, Walgreens Boots Alliance, Inc. (“WBA”) and Rite Aid entered into an amendment to the original merger agreement dated as of October 27, 2015. Under the terms of the amendment, WBA and Rite Aid agreed to reduce the price for each share of Rite Aid common stock to be paid by WBA. In addition, WBA will be required to divest up to 1,200 Rite Aid stores and certain additional related assets if required to obtain regulatory approval. The exact per share merger consideration will be determined based on the number of retail stores that WBA agrees to divest in connection with the parties’ efforts to obtain the required regulatory approvals for the merger, with the price set at $7.00 per share if 1,000 retail stores or fewer retail stores are required to be divested and at $6.50 per share if 1,200 retail stores are required to be divested (or more, if WBA agrees to sell more).

Additionally, WBA and Rite Aid agreed to extend the end date to July 31, 2017. While WBA and Rite Aid continue to be actively engaged in discussions with the Federal Trade Commission regarding the transaction and are working toward a close of the merger by July 31, 2017, there can be no assurance that the requisite regulatory approvals will be obtained, or that the merger will be completed within the time period contemplated by the merger agreement on the current terms, if at all. The transaction is subject to approval by the holders of Rite Aid’s common stock, the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions.

Rite Aid is one of the nation’s leading drugstore chains with 4,536 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.

Cautionary Statement Regarding Forward Looking Statements

Statements in this release that are not historical and statements regarding the expected timing of the closing of the proposed merger with WBA, the closing of the proposed sale of stores and assets to Fred’s and the ability of the parties to complete such transactions considering the various closing conditions and any assumptions underlying any of the foregoing, 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 the expected timing of the closing of the merger with WBA and sale of stores and assets to Fred’s; the ability of the parties to complete the transactions considering the various closing conditions; the outcome of legal and regulatory matters, including with respect to the outcome of discussions with the Federal Trade Commission and otherwise in connection with the pending acquisition of Rite Aid by WBA; the number of stores divested in connection with such pending acquisition and the terms, timing and likelihood of consummation of such transactions; the expected benefits of the transaction such as improved operations, enhanced revenues and cash flow, growth potential, market profile and financial strength; the competitive ability and position of WBA following completion of the proposed transaction; 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, 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, industry, market, competitive, regulatory and political conditions; our ability to improve the operating performance of our stores in accordance with our long term strategy; 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; outcomes of legal and regulatory matters; changes in legislation or regulations, including healthcare reform; our ability to achieve the benefits of our efforts to reduce the costs of our generic and other drugs; risks related to the proposed transactions, including the possibility that the transactions may not close, including because one or more closing conditions to the transactions, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transactions, or may require conditions, limitations or restrictions in connection with such approvals, including the risk that the Federal Trade Commission may not approve the transaction despite the changes the  parties to the merger agreement, as amended, and the asset purchase agreement, are willing to make, or that the required approval of the amended merger agreement by the stockholders of Rite Aid may not be obtained; the risk that stockholders may receive the bottom of the price range for the per share merger consideration;  the risk that the merger agreement may be terminated in certain circumstances that require Rite Aid to pay WBA a termination fee of $325 million; the risk that the parties to the asset purchase agreement, dated as of December 19, 2016, by and among Rite Aid, WBA, Fred’s, Inc. and AFAE, LLC may not receive regulatory approval or be able to complete the transactions contemplated thereby considering the various closing conditions; the risk that there may be a material adverse change of Rite Aid or the stores proposed to be sold to Fred’s, or the business of Rite Aid or the stores proposed to be sold to Fred’s may suffer as a result of uncertainty surrounding the transactions; risks related to the ability to realize the anticipated benefits of the proposed transactions; risks associated with the financing of the proposed transactions; disruption from the proposed transactions making it more difficult to maintain business and operational relationships; the continuing effect of the merger, including the effect of the announcement of the merger agreement amendment, on Rite Aid’s business relationships (including, without limitation, customers and suppliers), operating results and business generally; risks related to diverting management’s or employees’ attention from ongoing business operations; the risk that Rite Aid’s stock price may decline significantly if the merger is not completed; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the proposed transactions; potential changes to our strategy in the event the proposed transactions do not close, which may include delaying or reducing capital or other expenditures, selling assets or other operations, attempting to restructure or refinance our debt, or seeking additional capital, and other business effects. 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, in the preliminary proxy statement, as it may be amended, that we filed with the Securities and Exchange Commission on March 3, 2017 in connection with the proposed merger, 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. Additionally, there can be no assurance that the requisite regulatory approvals for the proposed merger and proposed sale of stores and assets to Fred’s will be obtained, or that the proposed transactions will be completed within the required time period or at all, or that the expected benefits of the proposed transactions will be realized. 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.

Additional Information and Where to Find It

In connection with the proposed strategic combination with WBA, as amended, Rite Aid prepared a preliminary proxy statement on Schedule 14A that has been filed with the SEC on March 3, 2017. The preliminary proxy statement is not yet final and will be amended. Following the filing of the definitive proxy statement with the SEC, Rite Aid will mail the definitive proxy statement and a proxy card to each stockholder entitled to vote at the special meeting relating to the proposed merger. INVESTORS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors may obtain the proxy statement, as well as other filings containing information about Rite Aid, free of charge, from the SEC’s Web site (www.sec.gov). Investors may also obtain Rite Aid’s SEC filings in connection with the transaction, free of charge, from Rite Aid’s Web site (www.RiteAid.com) under the link “Investor Relations” and then under the tab “SEC Filings,” or by directing a request to Rite Aid, Byron Purcell, Attention: Senior Director, Treasury Services & Investor Relations.

Participants in the Merger Solicitation

The directors, executive officers and employees of Rite Aid and other persons may be deemed to be participants in the solicitation of proxies in respect of the transaction. Information regarding Rite Aid’s directors and executive officers is available in its definitive proxy statement for its 2016 annual meeting of stockholders filed with the SEC on May 13, 2016. This document can be obtained free of charge from the sources indicated above. Other information regarding the interests of the participants in the proxy solicitation is set forth in the preliminary proxy statement, as it may be amended, that has been filed with the SEC on March 3, 2017. This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Reconciliation of Non-GAAP Financial Measures

The company separately reports financial results on the basis of Adjusted Net Income, Adjusted Net Income per diluted share, and Adjusted EBITDA, which are non-GAAP financial measures. See the attached tables for a reconciliation of Adjusted Net Income, Adjusted Net Income per diluted share and Adjusted EBITDA to net income, and net income per diluted share, which are the most directly comparable GAAP financial measures. Adjusted Net Income and Adjusted Net Income per diluted share exclude amortization of EnvisionRx intangible assets, merger and acquisition-related costs, loss on debt retirements and LIFO adjustments. Adjusted EBITDA is defined as net income 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, debt retirements and other items (including stock-based compensation expense, merger and acquisition-related costs, severance and costs related to distribution center closures, gain or loss on sale of assets and revenue deferrals related to our customer loyalty program).

Contact:
Investors:
Matt Schroeder
717-214-8867
investor@riteaid.com

Media:
Susan Henderson
717-730-7766

Source: Rite Aid

Rite Aid Corporation appoints Ken Black SVP and chief human resources officer

CAMP HILL, Pa., 2017-Jan-25 — /EPR Retail News/ — Rite Aid Corporation (NYSE: RAD) today (Jan. 23, 2017) announced that Ken Black, Rite Aid’s current group vice president of compensation, benefits and shared services, has been named senior vice president and chief human resources officer, effective immediately. He is succeeding Dedra N. Castle, who is leaving the company for personal health reasons.

“On behalf of the entire Rite Aid team, I thank Dedra for her many significant contributions to our company,” said Rite Aid Chairman and CEO John Standley. “Since joining our team, Dedra has been a passionate leader who was always focused on making Rite Aid a better place to work and a better place to shop. She has played a key role in launching initiatives that support an outstanding associate and customer experience while also providing new ways for our associates to recognize each other.”

“Ken is a strong, experienced Rite Aid leader and a valuable asset to our team,” said Standley. “Our company will continue to benefit from his extensive knowledge and expertise as he takes on this new role within our organization.”

In this position, Black will report to Standley and be responsible for all aspects of human resources, including training, recruitment, talent management, compensation and benefits, labor relations, leadership development and diversity.

Black joined Rite Aid in 2003 as the company’s vice president of tax. He held various positions within the finance department throughout his career at Rite Aid before being named group vice president of compensation and benefits in 2010. In 2014, he earned a master’s degree in human resources development from Villanova University in Villanova, Pa.

Prior to joining Rite Aid, Black was a senior tax manager for Deloitte. He also held various corporate tax positions for Union Pacific Corporation and NBC.

Black, a certified public accountant, earned a bachelor’s degree in accounting from Bloomsburg University in Bloomsburg, Pa.

Rite Aid Corporation is one of the nation’s leading drugstore chains with nearly 4,600 stores in 31 states and the District of Columbia and fiscal 2016 annual revenues of $30.7 billion. Information about Rite Aid, including corporate background and press releases, is available through the company’s website at www.riteaid.com.

Contact:
Investors:
Matt Schroeder
717-214-8867
investor@riteaid.com

Media:
Susan Henderson
717-730-7766

Source: Rite Aid Corporation

Walgreens Boots Alliance to sell 865 Rite Aid stores to Fred’s, Inc. for $950 million

Deerfield, Ill., and Camp Hill, Pa., 2016-Dec-21 — /EPR Retail News/ — Walgreens Boots Alliance, Inc. (Nasdaq: WBA) and Rite Aid Corporation (NYSE: RAD) announced today (20 December 2016 ) they have entered into an agreement to sell 865 Rite Aid stores and certain assets related to store operations to Fred’s, Inc. (Nasdaq: FRED) for $950 million in an all-cash transaction. The transaction is subject to Federal Trade Commission (FTC) approval, the approval and completion of the pending acquisition of Rite Aid by Walgreens Boots Alliance, and other customary closing conditions.

The agreement is being entered into to respond to concerns identified by the FTC in its review of the proposed acquisition of Rite Aid by Walgreens Boots Alliance, which was announced in October 2015. Walgreens Boots Alliance is actively engaged in discussions with the FTC regarding the transaction and is working toward a close of the Rite Aid acquisition in early calendar 2017.

The proposed divestiture transaction, if approved, would establish Fred’s Pharmacy as one of the largest drugstore chains in the United States with significant presence in areas such as the South and on the East and West Coasts. Specific locations of the stores to be divested will be announced upon FTC approval of the Walgreens Boots Alliance and Rite Aid merger.

Under the terms of the purchase agreement, Fred’s Pharmacy would acquire 865 Rite Aid stores and certain assets related to store operations, and expects to continue to employ all store associates and certain field and regional associates related to the operations of the acquired stores upon completion of the divestiture. Fred’s Pharmacy would continue to operate the acquired stores under the Rite Aid banner during a transition period. If the FTC requires divestiture of more than the 865 Rite Aid stores currently contemplated by the purchase agreement and Walgreens Boots Alliance agrees to sell such stores, the purchase agreement requires Fred’s to purchase such additional stores.

Walgreens Boots Alliance continues to expect that it will realize synergies from the acquisition of Rite Aid in excess of $1 billion, to be fully realized within three to four years of closing of the merger. These synergies, as previously disclosed, are expected to be derived primarily from procurement, cost savings and other operational matters.

“We are pleased to have found an experienced pharmacy operator for these stores,” said Walgreens Boots Alliance Executive Vice Chairman and CEO Stefano Pessina. “With this agreement, we are moving ahead with important work necessary to obtain approval of our acquisition of Rite Aid. We look forward to continuing to provide our customers and patients with the highest level of care and attention.”

“We greatly appreciate the dedication of our Rite Aid associates who are taking great care of our customers and patients during this period,” said Rite Aid Chairman and CEO John Standley. “We look forward to working closely with Fred’s to ensure a smooth, successful transition for our customers, patients and associates in the divested stores.”

BofA Merrill Lynch acted as Walgreens Boots Alliance’s financial adviser, with Sidley Austin LLP acting as its legal counsel on transaction legal matters and Weil, Gotshal & Manges LLP acting as its legal counsel on antitrust regulatory matters.

Citi acted as Rite Aid’s exclusive financial adviser, with Skadden, Arps, Slate, Meagher & Flom LLP acting as Rite Aid Corporation’s legal counsel on transaction legal matters and Jones Day acting as its legal counsel on antitrust regulatory matters.

Notes to Editors:

About Walgreens Boots Alliance

Walgreens Boots Alliance (Nasdaq: WBA) is the first global pharmacy-led, health and wellbeing enterprise.

The company was created through the combination of Walgreens and Alliance Boots in December 2014, bringing together two leading companies with iconic brands, complementary geographic footprints, shared values and a heritage of trusted health care services through pharmaceutical wholesaling and community pharmacy care, dating back more than 100 years.

Walgreens Boots Alliance is the largest retail pharmacy, health and daily living destination across the USA and Europe. Walgreens Boots Alliance and the companies in which it has equity method investments together have a presence in more than 25* countries and employ more than 400,000* people. The company is a global leader in pharmacy-led, health and wellbeing retail and, together with the companies in which it has equity method investments, has over 13,200* stores in 11* countries as well as one of the largest global pharmaceutical wholesale and distribution networks, with over 390* distribution centers delivering to more than 230,000** pharmacies, doctors, health centers and hospitals each year in more than 20* countries. In addition, Walgreens Boots Alliance is one of the world’s largest purchasers of prescription drugs and many other health and wellbeing products.

The company’s portfolio of retail and business brands includes Walgreens, Duane Reade, Boots and Alliance Healthcare, as well as increasingly global health and beauty product brands, such as No7, Botanics, Liz Earle and Soap & Glory. More company information is available at www.walgreensbootsalliance.com.

* As of 31 August 2016, using publicly available information for AmerisourceBergen.
** For 12 months ending 31 August 2016, using publicly available information for AmerisourceBergen.

About Rite Aid

Rite Aid Corporation (NYSE: RAD) is one of the nation’s leading drugstore chains with nearly 4,600 stores in 31 states and the District of Columbia and fiscal 2016 annual revenues of $30.7 billion. Information about Rite Aid, including corporate background and press releases, is available through the company’s website at www.riteaid.com.

Cautionary Note Regarding Forward Looking Statements

Certain statements in this press release may constitute “forward-looking statements” within the meaning 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.

All statements, other than historical facts, including statements regarding the expected timing of the closing of the transactions; the ability of the parties to complete the transactions considering the various closing conditions; the expected benefits of the transactions such as improved operations, enhanced revenues and cash flow, growth potential, market profile and financial strength; the competitive ability and position of the companies following completion of the proposed transactions; and any assumptions underlying any of the foregoing, are forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. These forward-looking statements are based upon current plans, estimates and expectations, are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to, risks related to the possibility that the transactions may not close, including because one or more closing conditions to the transactions, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transactions, or may require conditions, limitations or restrictions in connection with such approvals; the risk that there may be a material adverse change of Rite Aid or the acquired stores, or the business of Rite Aid or the acquired stores may suffer as a result of uncertainty surrounding the transactions; risks related to the ability to realize the anticipated benefits of the proposed transactions, including the possibility that the expected synergies from the proposed transactions will not be realized or will not be realized within the expected time period; the risk that the businesses and acquired stores, as applicable, will not be integrated successfully; risks associated with the financing of the proposed transactions; disruption from the proposed transactions making it more difficult to maintain business and operational relationships; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the proposed transactions; other business effects, including the effects of industry, market, economic, political or regulatory conditions or changes in federal or state laws or regulations; future exchange or interest rates or credit ratings; changes in tax laws, regulations, rates and policies; competitive developments; and risks and uncertainties discussed in the reports that Walgreens Boots Alliance and Rite Aid have filed with the U.S. Securities and Exchange Commission. 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. Walgreens Boots Alliance and Rite Aid expressly disclaim 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. A further list and description of risks and uncertainties can be found in Walgreens Boots Alliance’s Annual Report on Form 10-K for the fiscal year ended August 31, 2016 and its subsequent filings, and in Rite Aid’s Annual Report on Form 10-K for the fiscal year ended February 27, 2016 and its subsequent filings. There can be no assurance that the requisite regulatory approvals will be obtained, or that the transactions will be completed within the required time period. This release does not constitute an offer of any securities for sale.

Investors Contact:
Matt Schroeder
717-214-8867
investor@riteaid.com


Media contact:

Ashley Flower
717-975-5718

Source: Rite Aid

American Pharmacist Month: Vote for your favorite Rite Aid pharmacy team member

CAMP HILL, Pa., 2016-Oct-04 — /EPR Retail News/ — To celebrate American Pharmacist Month, Rite Aid is asking customers nationwide to recognize their favorite pharmacy team member through its thirteenth annual Vote for Your Favorite Pharmacy Team Member Contest. By submitting a nomination for their favorite Rite Aid pharmacy team member, customers have a chance to win $2,500 in Rite Aid gift cards. The contest was designed to recognize Rite Aid pharmacy associates including pharmacists, pharmacy technicians, pharmacy managers, pharmacy cashiers and Wellness Ambassadors, for their commitment to providing excellent customer service.

“American Pharmacist Month is a great time to acknowledge the dedication of our pharmacy teams as they continue to help our customers and their families lead healthy lives every day,” said Tammy Royer, Rite Aid senior vice president of pharmacy operations. “Our pharmacists, pharmacy technicians, wellness ambassadors and pharmacy cashiers are committed and dedicated to making a difference year-round in the lives of those in the communities we serve by providing unique services such as medication consultations or helping patients find solutions to improve medication adherence.”

From now through Oct. 31, customers can vote for their favorite pharmacy team member by completing a mail-in nomination form available at any Rite Aid pharmacy or online at www.riteaid.com/vote. Customers who vote will automatically be entered into a random drawing to win $2,500 in Rite Aid gift cards. Through a random drawing, one nominated pharmacy team member also will win $2,500 in Rite Aid gift cards. For complete details and official rules, go to any Rite Aid store or visit www.riteaid.com/vote.

All nominated Rite Aid pharmacy team members will be recognized by Rite Aid with a Favorite Pharmacy Team Member lapel pin and a letter of commendation from Rite Aid’s Chairman and CEO John Standley and Executive Vice President of Pharmacy Jocelyn Konrad.

Rite Aid Corporation (NYSE: RAD) is one of the nation’s leading drugstore chains with nearly 4,600 stores in 31 states and the District of Columbia and fiscal 2016 annual revenues of $30.7 billion. Information about Rite Aid, including corporate background and press releases, is available through the company’s website at www.riteaid.com.

Media Contact:

Kristin Kellum
717-975-5713

Source: Rite Aid Corporation

Rite Aid Corporation announces operating results for its second fiscal quarter ended August 27, 2016

CAMP HILL, Pa., 2016-Sep-23 — /EPR Retail News/ — For the second quarter, the company reported revenues of $8.0 billion, net income of $14.8 million, or $0.01 per diluted share, Adjusted net income of $35.5 million, or $0.03 per diluted share and Adjusted EBITDA of $312.7 million, or 3.9 percent of revenues.

“In the second quarter, we continued to drive positive results in our Pharmacy Services Segment, which includes our EnvisionRx PBM, and had strong performance in our front-end business,” said Chairman and CEO John Standley. “We also saw improvements in prescription drug costs, but these improvements were more than offset by the challenging reimbursement rate environment, which we expect to continue through the remainder of the fiscal year. Heading forward, we will remain focused on operating our business as efficiently as possible while pursuing key growth opportunities such as our flu immunization campaign and converting additional stores to the Wellness format, which continue to perform well and now represent nearly half of our chain.”

Second Quarter Summary

Revenues for the quarter were $8.0 billion compared to revenues of $7.7 billion in the prior year’s second quarter, an increase of $365.0 million or 4.8 percent. Retail Pharmacy Segment revenues were $6.5 billion and decreased  2.4 percent compared to the prior year period primarily as a result of a decrease in same store sales. Revenues in the company’s Pharmacy Services Segment, which was acquired on June 24, 2015, were $1.6 billion.

Same store sales for the quarter decreased 2.5 percent over the prior year, consisting of a 3.6 percent decrease in pharmacy sales, partially offset by a 0.1 percent increase in front-end sales. Pharmacy sales included an approximate 101 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores decreased 1.8 percent over the prior year period. Prescription sales accounted for 68.5 percent of total drugstore sales, and third party prescription revenue was 98.1 percent of pharmacy sales.

Net income was $14.8 million or $0.01 per diluted share compared to last year’s second quarter net income of $21.5 million or $0.02 per diluted share. The decline in operating results is due primarily to a higher LIFO charge, and a decline in Adjusted net income, partially offset by a $33.2 million loss on debt retirement in the prior year related to the redemption of the company’s 8.00% senior secured notes.

Adjusted net income and Adjusted net income per diluted share (which is reconciled to net income on the attached table) was $35.5 million or $0.03 per diluted share compared to last year’s second quarter Adjusted net income of $58.7 million or $0.06 per diluted share. The decline in Adjusted net income and Adjusted net income per share is due to a decrease in Adjusted EBITDA, partially offset by lower income tax and interest expenses.

Adjusted EBITDA (which is reconciled to net income on the attached table) was $312.7 million or 3.9 percent of revenues for the second quarter compared to $346.8 million or 4.5 percent of revenues for the same period last year. The decline in Adjusted EBITDA is due to a decrease of $51.0 million in the Retail Pharmacy Segment, resulting from lower gross profit and higher SG&A expense. Gross profit declined due to lower pharmacy gross profit partially offset by an increase in front end gross profit. Pharmacy gross profit decreased because of lower reimbursement rates and script count, partially offset by improvements in prescription drug costs. SG&A expense increased due to a shift in the timing of Memorial Day holiday pay and increased benefit costs. The decline in Retail Pharmacy Segment Adjusted EBITDA was partially offset by an increase of $16.8 million of Pharmacy Services Segment Adjusted EBITDA. This increase was due to strong operating results in the current year and the fact that prior year’s Pharmacy Services Segment results do not reflect a full quarter’s ownership of Envision Rx.

In the second quarter, the company opened 3 stores, relocated 6 stores, and remodeled 85 stores, bringing the total number of wellness stores chainwide to 2,214. The company also acquired 1 store and closed 14 stores, resulting in a total store count of 4,550 at the end of the second quarter. The company also opened 10 clinics in the second quarter, bringing the total to 90.

As previously announced on October 27, 2015, Rite Aid and Walgreens Boots Alliance, Inc. (“WBA”) entered into a definitive agreement under which WBA will acquire all outstanding shares of Rite Aid for $9.00 per share in cash. The board of directors of both companies and Rite Aid’s shareholders have approved the transaction, which is subject to certain conditions, including, among others, the receipt of approval under applicable antitrust laws and other customary closing conditions. The company continues to believe that the transaction will close in the second half of calendar year 2016.

Rite Aid is one of the nation’s leading drugstore chains with 4,550 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.

Cautionary Statement Regarding Forward Looking Statements

Statements in this release that are not historical and statements regarding the expected timing of the closing of the proposed merger with WBA and the ability of the parties to complete such transaction considering the various closing conditions and any assumptions underlying any of the foregoing, 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 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, outcomes of legal and regulatory matters, changes in legislation or regulations, including healthcare reform, our ability to achieve the benefits of our efforts to reduce the costs of our generic and other drugs and risks related to the proposed merger. 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, in the definitive proxy statement that we filed with the Securities and Exchange Commission on December 21, 2015 in connection with the proposed merger, 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. Additionally, there can be no assurance that the proposed merger will be completed, or if it is completed, that it will close within the anticipated time period or that the expected benefits of the proposed merger will be realized. 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.

Reconciliation of Non-GAAP Financial Measures

The company separately reports financial results on the basis of Adjusted Net Income, Adjusted Net Income per diluted share, and Adjusted EBITDA, which are non-GAAP financial measures. See the attached tables for a reconciliation of Adjusted Net Income, Adjusted Net Income per diluted share and Adjusted EBITDA to net income, and net income per diluted share, which are the most directly comparable GAAP financial measures. Adjusted Net Income and Adjusted Net Income per diluted share exclude amortization of EnvisionRx intangible assets, merger and acquisition-related costs, loss on debt retirements and LIFO adjustments. Adjusted EBITDA is defined as net income 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, debt retirements and other items (including stock-based compensation expense, merger and acquisition-related costs, severance and costs related to distribution center closures, gain or loss on sale of assets and revenue deferrals related to our customer loyalty program).

Contact:

Investors:
Matt Schroeder
717-214-8867
investor@riteaid.com

Media:
Susan Henderson
717-730-7766

Source:  Rite Aid Corporation

Rite Aid Corporation announces operating results for its fourth quarter and fiscal year ended February 27, 2016

  • Revenues of $8.3 Billion for the Fourth Quarter, Up 20.8 Percent Year-Over-Year and $30.7 Billion for the Full Year, Up 15.9 Percent Year-Over-Year 
  • Fourth Quarter Adjusted Net Income Per Diluted Share of $0.07, Compared to the Prior Yearof $0.06; Full Year Adjusted Net Income Per Diluted Share of $0.23, Compared to the Prior Year  of $0.27 
  • Fourth Quarter Net Income Per Diluted Share of $0.06, Compared to the Prior Year of $1.79; Full Year Net Income Per Diluted Share of $0.16, Compared to the Prior Year of $2.08
  • Prior Year’s Fourth Quarter and Full Year Net Income Benefited from a Deferred Tax Valuation Allowance Adjustment of $1.841 Billion, or Approximately $1.80 Per Diluted Share 
  • Adjusted EBITDA of $383.0 Million for the Fourth Quarter, Up 11.6 Percent Year-Over-Year  and $1,402.3 Million for the Full Year, Up 6.0 Percent Year-Over-Year

CAMP HILL, Pa., 2016-Apr-09 — /EPR Retail News/ — Rite Aid Corporation (NYSE: RAD) today reported operating results for its fourth quarter and fiscal year ended February 27, 2016.

For the fourth quarter, the company reported revenues of $8.3 billion, net income of $65.6 million, or $0.06 per diluted share, Adjusted net income of $76.1 million, or $0.07 per diluted share and Adjusted EBITDA of

$383.0 million, or 4.6 percent of revenues. For the full year, the company reported revenues of $30.7 billion, net income of $165.5 million, or $0.16 per diluted share, Adjusted net income of $241.0 million or $0.23 per diluted share and Adjusted EBITDA of $1,402.3 million, or 4.6 percent of revenues.

“Our positive fourth-quarter results helped us deliver a successful fiscal year that reflects the tremendous progress we’re making to expand our retail healthcare offering,” said Rite Aid Chairman and CEO John Standley. “In the fourth quarter, we generated nearly $40 million of growth in Adjusted EBITDA, including an increase in our Retail Pharmacy Segment and strong results from our new Pharmacy Services Segment. This was one of many key highlights of fiscal 2016, which was a transformational year that saw us acquire EnvisionRx, launch the ground-breaking wellness+ with Plenti program, complete our 2,000th Wellness store and exceed $30 billion in revenues for the first time.”

“We look forward to building upon this success and to continue delivering a higher level of care in the communities we serve. We thank our dedicated Rite Aid associates for their hard work in executing our strategy and providing an even better retail healthcare experience for our customers. We’re also excited about our opportunity to join forces with Walgreens Boots Alliance to further expand consumer access to health care as part of the first global, pharmacy-led health and wellbeing enterprise.”

Fourth Quarter Summary
Revenues for the quarter were $8.3 billion compared to revenues of $6.8 billion in the prior year’s fourth quarter, an increase of $1.4 billion or 20.8 percent. Retail Pharmacy Segment revenues were $6.8 billion and decreased 0.3 percent compared to the prior year period primarily as a result of a decrease in same store sales. Pharmacy Services Segment revenues were $1.5 billion.

Same store sales for the quarter decreased 0.6 percent over the prior year, consisting of a 0.8 percent decrease in pharmacy sales and a 0.4 percent decrease in front-end sales. Pharmacy sales included an approximate 241 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores increased 0.1 percent over the prior year period. Prescription sales accounted for 68.1 percent of total drugstore sales, and third party prescription revenue was 97.9 percent of pharmacy sales.

Adjusted net income (which is reconciled to net income in the attached tables) was $76.1 million or $0.07 per diluted share compared to last year’s fourth quarter adjusted net income of $65.2 million or $0.06 per diluted share.

Adjusted EBITDA (which is reconciled to net income in the attached tables) was $383.0 million or 4.6 percent of revenues for the fourth quarter compared to $343.3 million or 5.0 percent of revenues for the same period last year. Adjusted EBITDA improved due to $34.2 million of Pharmacy Services Segment Adjusted EBITDA and an increase of $5.5 million in Retail Pharmacy Segment Adjusted EBITDA. The increase in Retail Pharmacy Segment Adjusted EBITDA was driven by an increase in front-end gross profit, partially offset by a decrease in pharmacy gross profit and an increase in selling, general and administrative expenses.

In the fourth quarter, the company opened 3 stores, relocated 10 stores, remodeled 89 stores and expanded 1 store, bringing the total number of wellness stores chainwide to 2,042. The company also acquired 2 stores and closed 4 stores, resulting in a total store count of 4,561 at the end of the fourth quarter. The company also opened 3 clinics in the fourth quarter, bringing the total to 78.

Full Year Results
For the fiscal year ended February 27, 2016, Rite Aid had revenues of $30.7 billion compared to revenues of  $26.5 billion in the prior year, an increase of $4.2 billion or 15.9 percent. Retail Pharmacy Segment revenues were $26.9 billion and increased 1.3 percent compared to the prior year primarily as a result of an increase in same store sales. Pharmacy Services Segment revenues were $4.1 billion from the date of the acquisition of EnvisionRx, which was June 24, 2015, through the end of the fiscal year.

Same store sales for the year increased 1.3 percent consisting of a 1.8 percent increase in pharmacy sales and a  0.2 percent increase in front end sales. Pharmacy sales included an approximate 221 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores increased 0.5 percent over the prior year period. Prescription sales accounted for 69.1 percent of total drugstore sales, and third party prescription revenue was 97.8 percent of pharmacy sales.

Adjusted net income for fiscal 2016 was $241.0 million or $0.23 per diluted share compared to last year’s adjusted net income of $273.0 million or $0.27 per diluted share. The decline in adjusted net income resulted primarily from increased interest expense incurred in connection with the company’s acquisition of EnvisionRx and higher depreciation expense related to an increase in capital spending, partially offset by an increase in Adjusted EBITDA.

Adjusted EBITDA was $1,402.3 million or 4.6 percent of revenues for the year compared to $1,322.8 million or  5.0 percent of revenues for last year. Adjusted EBITDA improved due to $101.4 million of Pharmacy Services Segment Adjusted EBITDA, partially offset by a decrease of $21.9 million in Retail Pharmacy Segment Adjusted EBITDA. The decrease in Retail Pharmacy Segment Adjusted EBITDA was due to an increase in selling, general and administrative expenses related to our higher level of sales and a decrease in pharmacy gross profit, partially offset by an increase in front-end gross profit.

Operating cash flow for fiscal 2016 was approximately $1.0 billion, due to strong Adjusted EBITDA results and contributions from working capital management. Working capital primarily benefited from a reduction in store level pharmacy inventory. The company used this operating cash flow to fund capital expenditures and to reduce borrowings following the acquisition of EnvisionRx.

For the year, the company relocated 20 stores, acquired 6 stores, remodeled 412 stores, expanded 2 stores, opened  5 stores, and closed 20 stores. The company also opened 23 clinics during the fiscal year.

As previously announced on October 27, 2015, Rite Aid and Walgreens Boots Alliance, Inc. (“WBA”) entered into a definitive agreement under which WBA will acquire all outstanding shares of Rite Aid for $9.00 per share in cash, for a total enterprise value of approximately $17.2 billion, including acquired net debt. The board of directors of both companies and Rite Aid’s shareholders have approved the transaction, which is subject to certain conditions, including, among others, the receipt of approval under applicable antitrust laws and other customary closing conditions. The transaction is expected to close in the second half of calendar 2016.

Given the agreement with WBA described above, and as is customary for transactions of this type, Rite Aid does not intend to provide earnings guidance for fiscal 2017.

Rite Aid is one of the nation’s leading drugstore chains with 4,561 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.

Cautionary Statement Regarding Forward Looking Statements 

Statements in this release that are not historical and statements regarding the expected timing of the closing of the proposed merger and the ability of the parties to complete such transaction considering the various closing conditions and any assumptions underlying any of the foregoing, 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 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, outcomes of legal and regulatory matters, changes in legislation or regulations, including healthcare reform, and risks related to the proposed merger. 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, in the definitive proxy statement that we filed with the Securities and Exchange Commission on December 21, 2015 in connection with the proposed merger, 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. Additionally, there can be no assurance that the proposed merger will be completed, or if it is completed, that it will close within the anticipated time period or that the expected benefits of the proposed merger will be realized. 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. 

Reconciliation of Non-GAAP Financial Measures

The company separately reports financial results on the basis of Adjusted Net Income, Adjusted Net Income per diluted share, and Adjusted EBITDA, which are non-GAAP financial measures. See the attached tables for a reconciliation of Adjusted Net Income, Adjusted Net Income per diluted share and Adjusted EBITDA to net income, which is a comparable GAAP financial measure. Adjusted Net Income and Adjusted Net Income per diluted share excludes amortization of EnvisionRx intangible assets, acquisition-related costs, loss on debt retirements and LIFO adjustments. Adjusted EBITDA is defined as net income excluding the impact of income taxes (and any corresponding adjustments to tax indemnification asset), interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, inventory write-downs related to store closings, debt retirements and other items (including stock-based compensation expense, sale of assets and investments and revenue deferrals related to our customer loyalty program). 

###   

Click Here for 4th Quarter Results Detail

Contact:

Investors: Matt Schroeder 717-214-8867 or investor@riteaid.com

Media: Susan Henderson 717-730-7766

Rite Aid brings back its Vote for Your Favorite Pharmacy Team Member Contest to celebrate American Pharmacist Month

CAMP HILL, Pa., 2015-10-3 — /EPR Retail News/ — Rite Aid is once again bringing back its nationwide annual Vote for Your Favorite Pharmacy Team Member Contest to celebrate American Pharmacist Month. Through the contest, Rite Aid customers have a chance to win $2,500 in Rite Aid gift cards by nominating a favorite member of their Rite Aid pharmacy team. Now in its twelfth year, the contest was designed to recognize Rite Aid pharmacy associates including pharmacists, pharmacy technicians, pharmacy managers, pharmacy cashiers and Wellness Ambassadors, for their commitment to providing excellent customer service.

“American Pharmacist Month is the perfect time to celebrate the year-round efforts of our pharmacy teams as they continue to delivery excellent customer service and help our patients lead healthier lives,” said Tammy Royer, Rite Aid senior vice president of pharmacy operations. “We are so proud of our pharmacy team, and this program is a great way for Rite Aid and our patients to honor and recognize those who are making a difference in the communities we serve every day.”

From now through Oct. 31, customers can vote for their favorite pharmacy team member by completing a mail-in nomination form available at any Rite Aid pharmacy or online at www.riteaid.com/vote. Customers who vote will automatically be entered into a random drawing to win $2,500 in Rite Aid gift cards. One nominated pharmacy team member also will win $2,500 in Rite Aid gift cards through a random drawing. For complete details and official rules, go to any Rite Aid store or visit www.riteaid.com/vote.

All nominated Rite Aid pharmacy team members will be recognized by Rite Aid with a Favorite Pharmacy Team Member lapel pin and a letter of commendation from Rite Aid’s Chairman and CEO John Standley and Executive Vice President of Pharmacy Jocelyn Konrad.

Rite Aid Corporation (NYSE: RAD) is one of the nation’s leading drugstore chains with nearly 4,600 stores in 31 states and the District of Columbia and fiscal 2015 annual revenues of $26.5 billion. Information about Rite Aid, including corporate background and press releases, is available through the company’s website at www.riteaid.com.

# # #

Contact:

Media: Kristin Kellum 717-975-5713

Rite Aid 2Q Fiscal 2016: Net Income $21.5m; Adjusted EBITDA $346.8m

  • Second Quarter Net Income of $21.5 Million and Net Income per Diluted Share of $0.02, Compared to Prior Year’s Second Quarter Net Income of $127.8 Million and Net Income  per Diluted Share of $0.13
  • Second Quarter Adjusted EBITDA of $346.8 Million Compared to Adjusted EBITDA of $364.2 Million in Prior Year’s Second Quarter
  • Completes Previously Announced Acquisition of EnvisionRx
  • Rite Aid Updates Outlook for Fiscal 2016

 

CAMP HILL, Pa., 2015-9-21 — /EPR Retail News/ — Rite Aid Corporation (NYSE: RAD) today reported operating results for its fiscal second quarter ended August 29, 2015. The company reported revenues of $7.7 billion, net income of $21.5 million or $0.02 per diluted share, and Adjusted EBITDA of $346.8 million, or 4.5 percent of revenues.

“The second quarter was pivotal for Rite Aid as we completed the acquisition of EnvisionRx and worked as a team to accelerate our transformation into a retail healthcare company,” said Rite Aid Chairman and CEO John Standley. “EnvisionRx made positive contributions to our performance as our Pharmacy Services Segment* delivered results that were in line with our expectations. We will continue to focus on key initiatives like wellness+ with Plenti, flu immunizations and Wellness store remodels to drive performance in our retail segment as we also leverage EnvisionRx’s suite of services to create unique and integrated offerings in the healthcare marketplace.”

Second Quarter Summary 

Revenues for the quarter were $7.7 billion versus revenues of $6.5 billion in the prior year’s second quarter, an increase of $1.2 billion or 17.5 percent. Retail Pharmacy Segment revenues were $6.6 billion and increased    1.9 percent primarily as a result of an increase in same store sales. Pharmacy Services Segment revenues were $1.1 billion from the date of the acquisition of EnvisionRx, which was June 24, 2015 through the end of the quarter.

*Pharmacy Services Segment consists of results from EnvisionRx  

Same store drugstore sales for the Retail Pharmacy Segment increased 2.1 percent over the prior year, consisting of a 0.3 percent increase in front-end sales and a 2.8 percent increase in pharmacy sales. Pharmacy sales included an approximate 223 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores increased 0.2 percent over the prior year period. Prescription sales accounted for 69.3 percent of total drugstore sales, and third party prescription revenue was 97.8 percent of pharmacy sales.

Net income was $21.5 million or $0.02 per diluted share compared to last year’s second quarter net income of $127.8 million or $0.13 per diluted share. The decline in net income resulted primarily from a $33.2 million loss on debt retirement related to the redemption of the company’s 8.00% senior secured notes, higher depreciation and amortization expense related to EnvisionRx and an increase in capital spending, higher interest and transaction costs incurred in connection with the company’s acquisition of EnvisionRx, and the cycling of a prior year benefit of approximately $40 million related to the Company’s transition to its new drug purchasing and delivery arrangement with McKesson.

Adjusted EBITDA (which is reconciled to net income on the attached table) was $346.8 million or 4.5 percent of revenues for the second quarter compared to $364.2 million or 5.6 percent of revenues for the like period last year. After taking into effect the prior year benefit of $40 million related to the Company’s transition to its new drug purchasing and delivery arrangement, Adjusted EBITDA increased by $22.6 million. This increase was due to $33.2 million of Pharmacy Services Segment Adjusted EBITDA, partially offset by a decline in Retail Pharmacy Segment gross margin, which was due to lower pharmacy reimbursement, partially offset by lower drug purchasing costs.

In the second quarter, the company relocated 3 stores and remodeled 119 stores, bringing the total number of wellness stores chainwide to 1,859. The company also opened 2 new stores, acquired 2 stores, and closed 9 stores, resulting in a total store count of 4,561 at the end of the second quarter. The Company also opened 5 clinics in the second quarter, bringing the total to 70.

Rite Aid Updates Fiscal 2016 Guidance  

Rite Aid has updated its fiscal 2016 guidance to reflect more recent sales trends and additional expected amortization expense from EnvisionRx. The midpoint of Adjusted EBITDA guidance remains unchanged. Total revenues are expected to be between $30.8 billion and $31.1 billion. Retail drugstore sales are expected to be between $26.7 billion and $27.0 billion and same store sales to range from an increase of 1.5 percent to an increase of 2.5 percent over fiscal 2015. Adjusted EBITDA (which is reconciled to net income on the attached table) guidance is expected to be between $1.360 billion and $1.440 billion and net income is expected to be between $125 million and $195 million or income per diluted share of $0.12 to $0.19. Capital expenditures are expected to be approximately $665 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. 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 Sept. 19, 2015. 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 34603858.

Rite Aid is one of the nation’s leading drugstore chains with 4,561 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 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, 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, the most comparable GAAP financial measure. We define Adjusted EBITDA as net income excluding the impact of income taxes (and any corresponding adjustments to tax indemnification asset), interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, inventory write-downs related to store closings, debt retirements and other items (including stock-based compensation expense, sale of assets and investments and revenue deferrals related to our customer loyalty program).  

###

Click Here for 2nd Quarter Results Detail

Contact:

Investors: Matt Schroeder 717-214-8867 or investor@riteaid.com

Media: Susan Henderson 717-730-7766

Rite Aid completes acquisition of Envision Pharmaceutical Services

CAMP HILL, Pa., 2015-6-25 — /EPR Retail News/ — Rite Aid (NYSE: RAD) has completed its previously announced acquisition of Envision Pharmaceutical Services (“EnvisionRx”) from leading global private investment firm TPG and other shareholders in a transaction valued at approximately $2 billion, including approximately $1.8 billion in cash and approximately 27.9 million Rite Aid shares.

“The completion of this acquisition is an important step in our strategy to expand Rite Aid’s retail healthcare platform and enhance our health and wellness offerings,” said Rite Aid Chairman and CEO John Standley.  “EnvisionRx’s talented management team and valued associates are a tremendous addition to our Rite Aid family. The combination of EnvisionRx’s broad suite of PBM and pharmacy-related businesses with Rite Aid’s retail platform will provide our customers and patients with an integrated offering across retail, specialty and mail-order channels.”

EnvisionRx CEO Frank Sheehy added, “As part of Rite Aid, we are well positioned to deliver a truly integrated healthcare offering which will provide tremendous benefits to both plan sponsors and patients. Our work is already well underway and we look forward to accelerating our efforts now that the transaction is complete.”

Sharad Mansukani, a senior advisor to TPG and the former chairman of EnvisionRx, said, “TPG is proud to have partnered with EnvisionRx’s founders and excellent management team in building a business that is truly set apart from other PBMs. We are confident EnvisionRx will enjoy many years of success as part of Rite Aid.”

EnvisionRx will operate as a wholly owned subsidiary of Rite Aid led by Frank Sheehy and current management. EnvisionRx’s headquarters will remain in Twinsburg, Ohio.
The transaction, which was announced in February 2015, is expected to be accretive to Rite Aid’s earnings per share in Rite Aid’s fiscal year 2017.

Citigroup Global Markets Inc. served as financial advisor to Rite Aid and Skadden, Arps, Slate, Meagher & Flom LLP was the company’s legal advisor. J.P. Morgan served as exclusive financial advisor to EnvisionRx, and Cleary Gottlieb Steen & Hamilton LLP acted as its M&A legal counsel and Baker & Hostetler LLP acted as its regulatory legal counsel.

About Rite Aid
Rite Aid Corporation is one of the nation’s leading drugstore chains with nearly 4,600 stores in 31 states and the District of Columbia and fiscal 2015 annual revenues of $26.5 billion. Information about Rite Aid, including corporate background and press releases, is available through the company’s website at www.riteaid.com.

About EnvisionRx
Established in 2001, EnvisionRx is a national, full-service pharmacy benefit management (PBM) company with consolidated revenues in excess of $4 billion. The company provides both transparent and traditional PBM options through its EnvisionRx and MedTrak PBMs, respectively, as well as pharmacy-related services to clients across the nation. EnvisionRx also offers fully integrated mail-order and specialty pharmacy services through Orchard Pharmaceutical Services; access to the nation’s largest cash pay infertility discount drug program via Design Rx; an innovative claims adjudication software platform in Laker Software; and a national Medicare Part D prescription drug plan through Envision Insurance Company’s EnvisionRx Plus product offering. Information about EnvisionRx, which is a wholly owned subsidiary of Rite Aid Corporation, is available through the company’s website at envisionrx.com.

About TPG
TPG is a leading global private investment firm founded in 1992 with over $74 billion of assets under management and offices in San Francisco, Fort Worth, Austin, Dallas, Houston, New York, Beijing, Hong Kong, London, Luxembourg, Melbourne, Moscow, Mumbai, Sao Paulo, Shanghai, Singapore and Tokyo. TPG has extensive experience with global public and private investments executed through leveraged buyouts, recapitalizations, spinouts, growth investments, joint ventures and restructurings. The firm has a well-known history of healthcare investing and its well-known investments include Adare Pharmaceuticals, Aptalis, EnvisionRx, Fenwal, Healthscope, IASIS Healthcare, Immucor, IMS Health, Par Pharmaceutical, Quintiles Transnational and Surgical Care Affiliates, among others. For more information visit www.tpg.com.

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. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties that 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.

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Contact Information
Rite Aid Media Contact:
Susan Henderson
717-730-7766
skhenderson@riteaid.com

Rite Aid Investor Contact:
Matt Schroeder 717-214-8867
investor@riteaid.com

TPG Media Contact:
Luke Barrett
212-601-4752
lbarrett@tpg.com

 

 

Contact:

Investors: Matt Schroeder 717-214-8867 or investor@riteaid.com

Media: Susan Henderson 717-730-7766

Rite Aid Corporation reports its operating results for its fourth quarter and fiscal year ended February 28, 2015

•   Fourth Quarter Net Income of $1.835 Billion and Net Income per Diluted Share of $1.79, Compared to the Prior Year’s Fourth Quarter Net Income of $55.4 Million and Net Income per Diluted Share of $0.06

•   Full Year Net Income of $2.109 Billion and Net Income per Diluted Share of $2.08, Compared to the Prior Year Net Income of $249.4 Million and Net Income per Diluted Share of $0.23

•   Current Year Fourth Quarter and Full Year Results Includes an Income Tax Benefit of $1.716 Billion and $1.682 Billion, Respectively, Primarily as a Result of a Reduction of Deferred Tax Asset Valuation Allowance

•   Fourth Quarter Adjusted EBITDA of $343.3 Million Compared to Adjusted EBITDA of $356.3 Million   in the Prior Year’s Fourth Quarter

•   Full Year Adjusted EBITDA of $1,322.8 Million Compared to Adjusted EBITDA of $1,325.0 Million in the Prior Year

•   Rite Aid Provides Outlook for Fiscal 2016

CAMP HILL, Pa., 2015-4-9 — /EPR Retail News/ — Rite Aid Corporation (NYSE: RAD) today reported operating results for its fourth quarter and fiscal year ended February 28, 2015.

For the fourth quarter, the company reported revenues of $6.8 billion and net income of $1.835 billion, or $1.79 per diluted share. For the full year, the company reported revenues of $26.5 billion and net income of $2.109 billion, or $2.08 per diluted share. Current year results for both the fourth quarter and the full year were favorably impacted by a reduction of the deferred tax asset valuation allowance and a full year provision of income tax expense at a statutory tax rate, the net effect of which resulted in an income tax benefit of $1.716 billion, or $1.67 per diluted share and $1.682 billion, or $1.65 per diluted share in the fourth quarter and full year, respectively. The company reported Adjusted EBITDA of $343.3 million or 5.0 percent of revenues in the fourth quarter and $1,322.8 million or 5.0 percent of revenues for the full year.

The reduction of the tax valuation allowance represents a non-cash benefit to earnings in fiscal 2015. While the company will record charges for income taxes in future periods, it does not expect to pay significant cash taxes for the foreseeable future.

“In the fourth quarter, our strong growth in same-store sales and prescription count as well as strong cost control helped drive continued profitability,” said Rite Aid Chairman and CEO John Standley.

“These positive results contributed to a successful year in which we took significant steps to further position Rite Aid as a retail healthcare company,” added Standley. “We look forward to building upon our success by leveraging our recent strategic investments to grow our business. We will also continue to implement our initiatives that deliver value to our customers and help us provide greater access to convenient, affordable and high quality healthcare. I thank our dedicated team of nearly 90,000 Rite Aid associates for the great work they did throughout the year to continue our recent momentum.”

Fourth Quarter Summary

Revenues for the quarter were $6.8 billion versus revenues of $6.6 billion in the prior year’s fourth quarter. Revenues increased 3.8 percent primarily as a result of an increase in same store sales.

Same store sales for the quarter increased 4.5 percent over the prior year, consisting of a 5.7 percent increase in pharmacy sales and a 2.0 percent increase in front-end sales. Pharmacy sales included a negative impact of approximately 128 basis points from new generic introductions. The number of prescriptions filled in same stores increased 3.5 percent over the prior year period. Prescription sales accounted for 68.1 percent of total drugstore sales, and third party prescription revenue was 97.5 percent of pharmacy sales.

Net income was $1.835 billion or $1.79 per diluted share compared to last year’s fourth quarter net income of $55.4 million or $0.06 per diluted share. Current year net income included the favorable impact of a reduction of a deferred tax asset valuation allowance of $1.841 billion and income tax expense of $125.3 million compared to last year’s income tax benefit of $6.0 million.

Pre-tax income for the fourth quarter was $119.1 million or $0.12 per diluted share versus $49.4 million or $0.05 per diluted share in the prior year’s fourth quarter. Pre-tax income was favorably impacted by a LIFO credit in the current year of $23.5 million compared to last year’s LIFO charge of $44.1 million.

Adjusted EBITDA (which is reconciled to net income on the attached table) was $343.3 million or 5.0 percent of revenues for the fourth quarter compared to $356.3 million or 5.4 percent of revenues for the same period last year. Adjusted EBITDA in last year’s fourth quarter was favorably impacted by a $28 million reimbursement rate adjustment related to Medi-Cal.

In the fourth quarter, the company relocated 3 stores, remodeled 115 stores and expanded 2 stores, bringing the total number of wellness stores chainwide to 1,634. The company also opened 1 store, acquired 2 stores and closed 5 stores, resulting in a total store count of 4,570 at the end of the fourth quarter.

Full Year Results

For the fiscal year ended February 28, 2015, Rite Aid had revenues of $26.5 billion compared to $25.5 billion for the prior year. Revenues increased 3.9 percent primarily as a result of an increase in same store sales.

Same store sales for the year increased 4.3 percent consisting of a 5.8 percent increase in pharmacy sales and a    1.2 percent increase in front end sales. Pharmacy sales included a negative impact of approximately175 basis points from new generic introductions. The number of prescriptions filled in same stores increased 3.5 percent over the prior year period. Prescription sales accounted for 68.8 percent of total drugstore sales, and third party prescription revenue was 97.5 percent of pharmacy sales.

Net income for fiscal 2015 was $2.109 billion or $2.08 per diluted share compared to last year’s net income of $249.4 million or $0.23 per diluted share. Current year results were favorably impacted by the reduction of a deferred tax asset valuation allowance of $1.841 billion, partially offset by income tax expense of $159.0 million compared to $0.8 million in the prior year.

Pre-tax income was $426.8 million or $0.42 per diluted share in fiscal 2015 compared to $250.2 million or $0.23 per diluted share in fiscal 2014. Current year results were favorably impacted by a LIFO credit of $18.9 million in the current year compared to a LIFO charge of $104.1 million in the prior year, a loss on debt retirement of $18.5 million compared to $62.4 million in the prior year, and lower interest expense.

Adjusted EBITDA was $1,322.8 million or 5.0 percent of revenues for the year compared to $1,325.0 million or 5.2 percent of revenues for last year.

For the year, the company relocated 14 stores, acquired 9 stores, remodeled 440 stores, expanded 5 stores, opened two stores, and closed 28 stores.

Outlook for Fiscal 2016

The company’s outlook for fiscal 2016 is based on the anticipated benefits of its wellness remodels, a full year of benefits from the pharmacy sourcing arrangement with McKesson and other initiatives to grow sales and drive operational efficiencies. The company’s outlook also considers planned wage and benefit increases, the introduction of certain new generics and a reimbursement rate environment that is expected to continue to be challenging. The outlook does not consider the impact of the EnvisionRx acquisition due to the uncertainty as to when the transaction will close. The company’s outlook also reflects an increase in income tax expense compared to fiscal 2015, which included an income tax benefit from the reduction of the deferred tax asset valuation allowance. The company expects cash tax payments to remain in a range of $10 million to $20 million for fiscal 2016 as it will continue to be able to utilize its tax net operating loss carryforward.

Rite Aid said it expects sales to be between $26.9 billion and $27.4 billion in fiscal 2016 with same store sales expected to range from an increase of 2.5 percent to an increase of 4.5 percent over fiscal 2015.

Adjusted EBITDA (which is reconciled to net income on the attached table) is expected to be between $1.250 billion and $1.350 billion.

Net income for fiscal 2016 is expected to be between $190 million and $275 million or income per diluted share of $0.19 to $0.27. This guidance is net of estimated income tax expense of between $130 million and $180 million, or $0.13 to $0.18 per diluted share, respectively.

Capital expenditures are expected to be approximately $650 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. 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 Apr. 10, 2015. 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 11217760.

Rite Aid is one of the nation’s leading drugstore chains with 4,570 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 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, 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, the most comparable GAAP financial measure. We define Adjusted EBITDA as net income excluding the impact of income taxes (and any corresponding adjustments to tax indemnification asset), interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, inventory write-downs related to store closings, debt retirements and other items (including stock-based compensation expense, sale of assets and investments and revenue deferrals related to our customer loyalty program).

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Click Here for 4th Quarter Results Detail

Contact:

Investors: Matt Schroeder 717-214-8867 or investor@riteaid.com

Media: Susan Henderson 717-730-7766

Rite Aid Corporation opens its first net-new store built from the ground up since 2010 in Harrisburg, Pa.

  • New Store is the Company’s First Net-New Store Built from the Ground Up Since 2010
  • Congressman Lou Barletta, Rite Aid Chairman and Chief Executive Officer John Standley and Rite Aid President and Chief Operating Officer Ken Martindale to Host Ribbon-Cutting Today at 10:30 a.m.
  • Rite Aid Foundation to Donate $5,000 to the Foundation for the Central Dauphin Schools

Camp Hill, Pa., 2015-3-12 — /EPR Retail News/ — Rite Aid Corporation (NYSE:RAD) announced today the grand opening of a new store in Harrisburg, Pa. Located at 4999 Jonestown Road, this is the first net-new store built by the Company since 2010. U.S. Congressman Lou Barletta (PA-11) will join John Standley, Rite Aid chairman and CEO and Ken Martindale, Rite Aid president and chief operating officer and president of The Rite Aid Foundation, for a ribbon-cutting ceremony at the store, today at 10:30 a.m.

“Today is truly a day of celebration for Rite Aid as we celebrate the grand opening of our first net-new store to be built since 2010, right here in Harrisburg, just miles from our corporate headquarters,” said Standley. “As we begin to build up our development pipeline through new and relocated stores, we are laying the foundation for future growth and continuing our transformation into a retail healthcare company, bringing our unique brand of health and wellness services to even more customers in both existing and new markets.”

Added Barletta, “For years, Rite Aid has provided critical healthcare services to people across Harrisburg, and through this new store, they will be able to continue do so,” said Barletta. “I thank Rite Aid for their commitment to the community and wish them continued success in the midstate and beyond.”

The new store, which is more than 14,500 sq. ft., features the Company’s highly popular wellness store format, of which there are currently more than 1,500 of nationwide. Rite Aid’s wellness store format, which first debuted in spring of 2011, is part of the company’s continued commitment to providing services, products and resources to help its customers and their families live healthy lives.

Upon entering the store, there is a direct wooden path leading to the pharmacy department, the core of Rite Aid’s business. Wellness Stores have pharmacists with special training in diabetes care, medication management and the ability to immunize against about a dozen diseases including flu, pneumonia, shingles and whooping cough. Also available to customers as a resource, a Wellness Ambassador, which serves as a bridge between the front end of the store and the pharmacy. Wellness Ambassadors work closely with Rite Aid pharmacists to provide customers with access to information on over-the-counter medications, vitamins and supplements and Rite Aid programs and services.

Other key design features include overhead departmental rings designating each section of the store such as beauty, food, home care and seasonal; a relaxing, warm color palette with soothing wood tones and softer lighting; hundreds of new health and wellness products including organic and gluten-free foods; a specially designed GNC vitamin department, including an interactive kiosk that helps customers make informed purchasing decisions. The store also features multiple drive-through pharmacy lanes and a private pharmacist consultation room adjacent to the pharmacy where Rite Aid pharmacists can have conversations with patients, administer immunizations and offer other clinical pharmacy services.

In honor of the grand opening, The Rite Aid Foundation will present a $5,000 donation to the Foundation for the Central Dauphin Schools. Serving over 10,000 students at 19 schools across Dauphin County, the Foundation’s mission is to enhance the academic, cultural, athletic and activity programs of the Central Dauphin School District by offering and supporting experiences that enrich the lives of its students.  The donation will support the organization’s PowerPack Program, which provides direct food distribution for elementary school students located in the Central Dauphin School District.

Rite Aid Corporation is one of the nation’s leading drugstore chains with nearly 4,600 stores in 31 states and the District of Columbia and fiscal 2014 annual revenues of $25.5 billion. Information about Rite Aid, including corporate background and press releases, is available through the company’s website at www.riteaid.com.

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Contact:

Media: Kristin Kellum 717-975-5713

Rite Aid to acquire EnvisionRx for $2 billion

Provides a Full Suite of Pharmacy Benefit Management Capabilities to Enhance Rite Aid’s Healthcare Offering and Drive Growth Across its Retail Healthcare Platform

CAMP HILL, Pa. and TWINSBURG, Ohio, 2015-2-13 — /EPR Retail News/ — Rite Aid (NYSE: RAD) and Envision Pharmaceutical Services (“EnvisionRx”) today announced that they have entered into a definitive agreement under which Rite Aid will acquire EnvisionRx, a portfolio company of leading global private investment firm TPG, in a transaction valued at approximately $2 billion, which includes the value of an expected future tax benefit of $275 million. Under the terms of the agreement, which has been unanimously approved by the Boards of Directors of both companies, Rite Aid will pay approximately $1.8 billion in cash and $200 million in Rite Aid stock, or approximately 27.9 million shares.

EnvisionRx is a national, full-service pharmacy benefit management (PBM) company with projected 2015 calendar year revenues of approximately $5 billion and projected 2015 calendar year EBITDA in a range of $150 to $160 million. The company provides both transparent and traditional PBM options through its EnvisionRx and MedTrak PBMs, respectively, as well as pharmacy-related services to clients across the nation. EnvisionRx also offers fully integrated mail-order and specialty pharmacy services through Orchard Pharmaceutical Services; access to the nation’s largest cash pay infertility discount drug program via Design Rx; an innovative claims adjudication software platform in Laker Software; and a national Medicare Part D prescription drug plan through Envision Insurance Company’s EnvisionRx Plus product offering.

“The acquisition of EnvisionRx meaningfully expands our health and wellness offerings, enhancing our ability to provide a higher level of care to the patients and communities we serve,” said Rite Aid Chairman and CEO John Standley. “With the addition of EnvisionRx, we will create a compelling pharmacy offering across retail, specialty and mail-order channels, enabling us to deliver cost-effective solutions to employers and health plans while driving growth and creating long-term value for our shareholders. We also look forward to welcoming EnvisionRx’s proven management team and talented associates to Rite Aid.”

“Combining our comprehensive suite of pharmacy benefit management services with Rite Aid’s established retail healthcare platform is a natural fit that is increasingly preferred by plan sponsors,” said EnvisionRx CEO Frank Sheehy. “Together, we see tremendous opportunities to provide new and existing customers with an integrated healthcare offering that will build upon the company’s strong existing platform.”

“EnvisionRx’s innovative business model has always set it apart from other PBMs, and as part of a recognized pharmacy leader, will now be well positioned for further success,” said Sharad Mansukani, chairman of EnvisionRx and senior advisor for TPG. “TPG believes EnvisionRx has built a best-in-class company with tremendous potential, and as a ground-breaking PBM, it has a great future as part of Rite Aid.”

The transaction is expected to be accretive to Rite Aid’s earnings per share in the first full year following the closing of the transaction. The transaction is expected to close by September, 2015, subject to regulatory approvals and other customary closing conditions.

Following the closing, EnvisionRx will operate as a wholly owned subsidiary of Rite Aid led by Frank Sheehy and current management. EnvisionRx’s headquarters will remain in Twinsburg, Ohio.

In connection with the pending transaction, Rite Aid has obtained committed financing from Citigroup Global Markets Inc., and BofA Merrill Lynch, Wells Fargo Securities, LLC and Credit Suisse AG. Subject to market conditions, Rite Aid expects to finance the $1.8 billion cash portion of the consideration through proceeds from the issuance of unsecured notes prior to the closing of the acquisition.

Citigroup Global Markets Inc. served as financial advisor to Rite Aid and Skadden, Arps, Slate, Meagher & Flom LLP was the company’s legal advisor. J.P. Morgan served as exclusive financial advisor to EnvisionRx, and Cleary Gottlieb Steen & Hamilton LLP acted as its legal counsel.

Conference Call Broadcast

Rite Aid will hold an analyst call at 8:30 a.m. Eastern Time today. The call will be simulcast via the internet and can be accessed through the websiteshttps://www.riteaid.com in the conference call section of investor information andwww.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 Feb. 14, 2015. 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 84894888.

About Rite Aid
Rite Aid is one of the nation’s leading drugstore chains with 4,569 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 atwww.riteaid.com.

About EnvisionRx
Established in 2001, EnvisionRx is a national, full-service pharmacy benefit management (PBM) company. EnvisionRx is part of a group of healthcare management companies owned and operated by Envision Pharmaceutical Holdings, LLC (EPH). EPH is a portfolio company of TPG.  In addition to EnvisionRx, EPH subsidiaries also include Envision Insurance Company, a fully insured provider of Medicare Part D Plans nationally, Envision Medical Solutions, LLC, an administrator of prescription savings plans and prescription savings cards, Orchard Pharmaceutical Services, LLC, a full-service mail-order and specialty drug pharmacy, Design Rx, LLC, the market leader in cash-pay pharmacy services for infertility and fertility products, MedTrak, a traditional spread-based PBM managing pharmacy benefits for small to mid-d self-insured employers and Laker Software, LLC, an innovative, market-leading provider of claims processing systems and support services for prescription drug benefit programs. EnvisionRx, which was founded on a commitment to provide full disclosure in the PBM marketplace, promotes a transparent, pass-through business model in which 100% of earned rebates, discounts, and incentives are instantly credited at the point of sale to customers, and for which EnvisionRx charges a low, flat monthly management fee for most services. This translates into significant savings for the company’s covered individuals. The Company has been awarded the Utilization Review Accreditation Commission (URAC) accreditations for PBM and Drug Therapy Management annually since 2007. EnvisionRx is headquartered in Twinsburg, OH, with offices in Fort Lauderdale, FL; Tampa, FL; Canton, OH; Ogden, UT; Minneapolis, MN and El Dorado Hills, CA. For more information about EnvisionRx visitwww.envisionrx.com.  EnvisionRx is a registered trademark of Envision Pharmaceutical Services, LLC.

About TPG
TPG is a leading global private investment firm founded in 1992 with $65 billion of assets under management and offices in San Francisco, Fort Worth, Austin, Dallas, Houston, New York, Beijing, Hong Kong, London, Luxembourg, Melbourne, Moscow, Mumbai, São Paulo, Shanghai, Singapore and Tokyo. TPG has extensive experience with global public and private investments executed through leveraged buyouts, recapitalizations, spinouts, growth investments, joint ventures and restructurings. For more information visit www.tpg.com.

FORWARD-LOOKING STATEMENTS
Statements, including those regarding the impact of the transaction contemplated hereby on Rite Aid’s future financial performance, 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, Rite Aid’s ability to consummate the acquisition of EnvisionRx and realize the benefits of the transaction, EnvisionRx’s ability to meet its projected 2015 revenue and EBITDA targets, our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our debt agreements, general economic, market, industry and competitive conditions, the risk that EnvisionRx’s business will not be successfully integrated with Rite Aid’s business, costs associated with the merger, delays and other matters arising in connection with the parties’ efforts to comply with and satisfy applicable regulatory approvals and closing conditions relating to the transaction, risks associated with the financing of the transaction, other events that could adversely impact the completion of the transaction and other risks, assumptions and uncertainties as 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.

Included in this release is a non-GAAP financial measure for EnvisionRx, EBITDA, which is defined as net income excluding the impact of income taxes, interest expense, depreciation and amortization.

This release does not constitute an offer of any securities for sale.

Rite Aid Media Contacts:

Susan Henderson
717-730-7766
skhenderson@riteaid.com

Rite Aid Investor Contacts:

EnvisionRx / TPG  Media Contacts:

Owen Blicksilver Public Relations, Inc.
lisa@blicksilverpr.com
jennifer@blicksilverpr.com

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Contact:

Investors: Matt Schroeder 717-214-8867 or investor@riteaid.com

Media: Susan Henderson 717-730-7766

Rite Aid Corporation to build 900,000 square foot distribution center in Spartanburg, S.C.

  • Rite Aid’s First New Facility in 15 Years Set to Open in 2016
  • Conveniently Located Near I-85 Corridor, Center Will Create Nearly 600 Jobs and Service Approx. 1,000 Rite Aid Stores Across Southeast

CAMP HILL, Pa., 2015-1-29 — /EPR Retail News/ — Rite Aid Corporation announced today plans to build a 900,000 square foot distribution center in Spartanburg, S.C. The new distribution center will employ nearly 600 people after it becomes fully operational and will support the inventory and fulfillment needs of approximately 1,000 Rite Aid stores in the southeastern United States. The Spartanburg distribution center, a $90 million project, will be Rite Aid’s first new distribution facility in 15 years.

“Rite Aid’s decision to build a new distribution center in Spartanburg County is a tremendous reason to celebrate,” said South Carolina Governor Nikki Haley. “This $90 million investment that will create hundreds of jobs in the Upstate will make a real difference in the local community. We welcome Rite Aid to the South Carolina family and look forward to watching them succeed here for many years to come.”

“Spartanburg is an ideal location for our new distribution center,” said John Standley, Rite Aid chairman and CEO. “We thank the state of South Carolina for their cooperation and support during our site selection process and we look forward to breaking ground on our new facility which will help us to further optimize our supply chain and better serve our stores and customers across the Southeast.”

In April 2014, after a comprehensive review of its supply chain and logistics network, Rite Aid announced its plan to consolidate three of its existing distribution centers, located in Tuscaloosa, Ala.; Charlotte, N.C.; and Poca W.Va., into one new facility, as part of its ongoing efforts to improve operating efficiency across the company.

Added South Carolina Secretary of Commerce Bobby Hitt, “Having such a successful, nationally recognized company, like Rite Aid, select South Carolina for a major distribution operation is a testament to the business-friendly reputation our state has earned. Congratulations to Rite Aid and Spartanburg County on this exciting news.”

The Coordinating Council for Economic Development approved job development credits related to the project. Additionally, the South Carolina Power Team, in conjunction with Broad River Electric Cooperative, committed a $520,000 grant for infrastructure in support of the project.

Rite Aid is working with Johnson Development Associates, a leading real estate development firm based in Spartanburg, on the project.

Information on employment opportunities at Rite Aid’s new facility in Spartanburg will be made available in the second half of 2015. Currently, Rite Aid employs nearly 1,400 and operates 95 stores in South Carolina.

Rite Aid Corporation (NYSE: RAD) is one of the nation’s leading drugstore chains with nearly 4,600 stores in 31 states and the District of Columbia and fiscal 2014 annual revenues of $25.5 billion. Information about Rite Aid, including corporate background and press releases, is available through the company’s website at www.riteaid.com.

As South Carolina’s leading economic development agency, the Department of Commerce works to recruit new businesses and help existing businesses grow. Commerce has recruited world-class companies to South Carolina such as Boeing, Bridgestone, Continental, Monster.com, ZF Group, BMW and Google Inc. and also supports small and existing business, rural development initiatives and community development. Commerce partners with the S.C. Technical College System via readySC to support workforce training and recruiting, and with the S.C. Department of Employment and Workforce, which provides worker training and employment opportunities within the state. South Carolina ranked first in the nation for attracting jobs through foreign investment, according to IBM-Plant Location International reports in both 2012 and 2013. The state won the Gold Shovel Award and the Project of Year Award from Area Development magazine in 2012. For more information, visit www.SCcommerce.com.

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Contact:

Investors: Matt Schroeder 717-214-8867 or investor@riteaid.com

Media: Ashley Flower 717-975-5718

John Standley, Darren Karst and Matt Schroeder of Rite Aid will address the 33rd Annual J.P. Morgan Healthcare Conference on Wednesday, January 14, in San Francisco

Camp Hill, Pa., 2015-1-8 — /EPR Retail News/ — Rite Aid Corporation (NYSE: RAD) announced today that John Standley, chairman, and chief executive officer; Darren Karst, executive vice president and chief financial officer and Matt Schroeder, group vice president, strategy, investor relations and treasurer, will address the 33rd Annual J.P. Morgan Healthcare Conference on Wednesday, January 14, in San Francisco. Rite Aid’s presentation is scheduled for 11:00 a.m. PT.

A link to the live webcast of the presentation will be available at: http://jpmorgan.metameetings.com/confbook/healthcare15/directlink?p=17081 for all interested parties. Slides from the broadcast will also be available in the Investor Information section of the Rite Aid website at:http://www.riteaid.com/company/investors/presentations.jsf.

Rite Aid Corporation is one of the nation’s leading drugstore chains with nearly 4,600 stores in 31 states and the District of Columbia and fiscal 2014 annual revenues of $25.5 billion. Information about Rite Aid, including corporate background and press releases, is available through the company’s website at www.riteaid.com.

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Contact:

Investors: Matt Schroeder 717-214-8867 or investor@riteaid.com

Media: Susan Henderson 717-730-7766

Rite Aid Corporation reported $6.7 billion revenues for its fiscal third quarter ended November 29, 2014

• Third Quarter Net Income of $104.8 Million and Net Income per Diluted Share of $0.10, Compared to Prior Year’s Third Quarter Net Income of $71.5 Million and Net Income per Diluted Share of $0.04

• Third Quarter Adjusted EBITDA of $332.8 Million Compared to Adjusted EBITDA of $282.3 Million in Prior Third Quarter

• Rite Aid Raises Fiscal 2015 Outlook

CAMP HILL, Pa., 2014-12-18 — /EPR Retail News/ — Rite Aid Corporation (NYSE: RAD) today reported operating results for its fiscal third quarter ended November 29, 2014. The company reported revenues of $6.7 billion, net income of $104.8 million or $0.10 per diluted share, and Adjusted EBITDA of $332.8 million, or 5.0 percent of revenues.

“We are pleased with our results for the third quarter, said Rite Aid Chairman and CEO John Standley.  “Our focus on expanding our health and wellness offering and delivering a higher level of care to the communities we serve drove our strong same-store sales, prescription count and gross profit. Based upon our strong third-quarter results, we have raised our guidance for the year.”

Third Quarter Summary

Revenues for the quarter were $6.7 billion versus revenues of $6.4 billion in the prior year’s third quarter. Revenues increased 5.3 percent primarily as a result of an increase in same store sales.

Same store sales for the quarter increased 5.4 percent over the prior year, consisting of a 1.6 percent increase in front-end sales and a 7.2 percent increase in pharmacy sales. Pharmacy sales included an approximate 228 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores increased 4.5 percent over the prior year period. Prescription sales accounted for 69.8 percent of total drugstore sales, and third party prescription revenue was 97.6 percent of pharmacy sales.

Net income was $104.8 million or $0.10 per diluted share compared to last year’s third quarter net income of $71.5 million or $0.04 per diluted share. The improvement in net income resulted primarily from an increase in Adjusted EBITDA and a lower LIFO charge, partially offset by a higher loss on debt retirement related to the redemption of the company’s 10.25% senior secured notes.

Adjusted EBITDA (which is reconciled to net income on the attached table) was $332.8 million or 5.0 percent of revenues for the third quarter compared to $282.3 million or 4.4 percent of revenues for the like period last year. Adjusted EBITDA improved due to an increase in front-end and pharmacy gross profit, partially offset by an increase in selling, general and administrative expenses related to our higher level of sales.   The improved pharmacy gross profit was driven by the increase in pharmacy prescription revenues and a reduction in generic drug costs, driven by the company’s transition to its new drug purchasing and delivery arrangement with McKesson, partially offset by lower reimbursement rates.

In the third quarter, the company relocated 3 stores, remodeled 103 stores and expanded 1 store, bringing the total number of wellness stores chainwide to 1,529. The company also acquired 6 stores and closed 6 stores, resulting in a total store count of 4,572 at the end of the third quarter.

Rite Aid Raises Fiscal 2015 Guidance

Based upon third quarter results, the company is raising its guidance. Adjusted EBITDA (which is reconciled to net income on the attached table) is expected to be between $1.275 billion and $1.305 billion. Net income is expected to be between $315.0 million and $370.0 million and income per diluted share between $0.31 and $0.37. Sales are expected to be between $26.25 billion and $26.4 billion and same store sales to range from an increase of 3.75 percent to an increase of 4.25 percent over Fiscal 2014. Capital expenditures are expected to be approximately $525 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. 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 Dec. 20, 2014. 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 38826492.

Rite Aid is one of the nation’s leading drugstore chains with 4,572 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 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, 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, the most comparable GAAP financial measure. We define Adjusted EBITDA as net income excluding the impact of income taxes (and any corresponding adjustments to tax indemnification asset), interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, inventory write-downs related to store closings, debt retirements and other items (including stock-based compensation expense, sale of assets and investments and revenue deferrals related to our customer loyalty program).

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                                                                       Click Here for 3rd Quarter Results Detail

 

Contact:

Investors: Matt Schroeder 717-214-8867 or investor@riteaid.com

Media: Susan Henderson 717-730-7766

Rite Aid kicks off American Pharmacists Month with Vote for Your Favorite Pharmacy Team Member Contest with new video voting feature

CAMP HILL, Pa., 2014-10-2— /EPR Retail News/ —  To kick off American Pharmacists Month, Rite Aid is bringing back its nationwide Vote for Your Favorite Pharmacy Team Member Contestwith a new video voting feature. Through the contest, Rite Aid customers have a chance to win $2,500 in Rite Aid gift cards by nominating a favorite member of their Rite Aid pharmacy team. The contest, now in its eleventh year, was designed to recognize Rite Aid pharmacy associates including pharmacists, pharmacy technicians, pharmacy cashiers and Wellness Ambassadors, for their commitment to providing excellent customer service.

“American Pharmacist Month is the perfect time to honor the Rite Aid pharmacy teams for their year-round commitment to providing excellent patient care,” said Dan Miller, Rite Aid senior vice president of pharmacy operations. “Every day, they are making a difference in the lives of their customers and the communities we serve. This program is just one small way we can thank them for their hard work and dedication towards improving the health and wellbeing of our customers.”

From now through Oct. 31, in addition to uploading a video nomination at www.riteaid.com/vote, customers can vote for their favorite pharmacy team member by completing a mail-in nomination form available at any Rite Aid pharmacy or online at www.riteaid.com/vote. Customers who vote will automatically be entered into a random drawing to win $2,500 in Rite Aid gift cards. One nominated pharmacy team member also will win $2,500 in Rite Aid gift cards through a random drawing. For complete details and official rules, go to any Rite Aid store or visit www.riteaid.com/vote.

All “favorite” Rite Aid pharmacy team members will be recognized by Rite Aid with a Favorite Pharmacy Team Member lapel pin and a letter of commendation from Rite Aid’s Chairman and CEO John Standley.

Rite Aid Corporation is one of the nation’s leading drugstore chains with nearly 4,600 stores in 31 states and the District of Columbia and fiscal 2014 annual revenues of $25.5 billion. Information about Rite Aid, including corporate background and press releases, is available through the company’s website at www.riteaid.com.

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Contact:

Media: Kristin Kellum 717-975-5713

Rite Aid Corporation reports operating results for its fiscal second quarter ended August 30, 2014

  • Second Quarter Net Income of $127.8 Million and Net Income per Diluted Share of $0.13, Compared to Prior Year’s Second Quarter Net Income of $32.8 Million and   Net Income per Diluted Share of $0.03
  • Second Quarter Adjusted EBITDA of $364.2 Million Compared to Adjusted EBITDA of $341.6 Million in Prior Second Quarter
  • Rite Aid Lowers Guidance for Fiscal 2015

CAMP HILL, Pa., 2014-9-19— /EPR Retail News/ — Rite Aid Corporation (NYSE: RAD) today reported operating results for its fiscal second quarter ended August 30, 2014. The company reported revenues of $6.5 billion, net income of $127.8 million or $0.13 per diluted share, and Adjusted EBITDA of $364.2 million, or 5.6 percent of revenues.

“In the second quarter, our team of dedicated Rite Aid associates worked together to execute our strategy and deliver results that reflect growth in net income and Adjusted EBITDA and significant increases in same-store sales and prescription count,” said Rite Aid Chairman and CEO John Standley. “Heading forward, while we believe that our key initiatives will continue to drive top-line growth, we are revising our guidance based on lower than anticipated pharmacy margin in the second half of Fiscal 2015. As we navigate these headwinds, we will remain focused on growing our business, generating continued operational efficiencies and positioning our associates to deliver a consistently outstanding experience for our customers.”

Second Quarter Summary

Revenues for the quarter were $6.5 billion versus revenues of $6.3 billion in the prior year’s second quarter. Revenues increased 3.9 percent primarily as a result of an increase in pharmacy same store sales.

Same store sales for the quarter increased 4.1 percent over the prior year, consisting of a 1.1 percent increase in front-end sales and a 5.6 percent increase in pharmacy sales. Pharmacy sales included an approximate 199 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores increased 3.7 percent over the prior year period. Prescription sales accounted for 68.8 percent of total drugstore sales, and third party prescription revenue was 97.5 percent of pharmacy sales.

Net income was $127.8 million or $0.13 per diluted share compared to last year’s second quarter net income of $32.8 million or $0.03 per diluted share. The improvement in net income resulted primarily from an increase in Adjusted EBITDA, a lower LIFO charge due to pharmacy inventory reductions and a $62.2 million loss on debt retirement in the prior year, partially offset by higher income tax expense.

Adjusted EBITDA (which is reconciled to net income on the attached table) was $364.2 million or 5.6 percent of revenues for the second quarter compared to $341.6 million or 5.4 percent of revenues for the like period last year. Adjusted EBITDA improved due to an increase in front-end and pharmacy gross profit, partially offset by an increase in selling, general and administrative expenses related to our higher level of sales.   The improved pharmacy gross profit was driven by the increase in pharmacy revenues and the impact on inventory valuation related to the company’s transition to its new drug purchasing and delivery arrangement with McKesson, partially offset by lower reimbursement rates. The net effect on inventory valuation resulting from the transition to the outsourced McKesson arrangement is not expected to be material to Fiscal 2015 results, but did increase gross profit, Adjusted EBITDA and pre-tax income by approximately $40 million in the second quarter.

In the second quarter, the company relocated 5 stores, remodeled 117 stores and expanded 1 store, bringing the total number of wellness stores chainwide to 1,433. The company also opened 1 store and closed 10 stores, resulting in a total store count of 4,572 at the end of the second quarter.

Rite Aid Lowers Fiscal 2015 Guidance

Based upon current estimates for reimbursement rates and anticipated lower profitability from new generics and generic drugs that recently lost exclusivity, the company is expecting decreases in pharmacy margin in the second half of Fiscal 2015 as compared to its prior estimates and therefore is lowering its guidance for Adjusted EBITDA, net income and net income per diluted share. Adjusted EBITDA (which is reconciled to net income on the attached table) is expected to be between $1.200 billion and $1.275 billion. Net income is expected to be between $223.0 million and $333.0 million and income per diluted share between $0.22 and $0.33. The company is also narrowing guidance for sales and same store sales. Sales are expected to be between $26.0 billion and $26.3 billion and same store sales to range from an increase of 3.00 percent to an increase of 4.00 percent over Fiscal 2014. Capital expenditures are expected to be approximately $525 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. 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 Sept. 20, 2014. 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 96416227.

Rite Aid is one of the nation’s leading drugstore chains with 4,572 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 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, 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, the most comparable GAAP financial measure. We define Adjusted EBITDA as net income excluding the impact of income taxes (and any corresponding adjustments to tax indemnification asset), interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, inventory write-downs related to store closings, debt retirements and other items (including stock-based compensation expense, sale of assets and investments and revenue deferrals related to our customer loyalty program).

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 Click Here for 2nd Quarter Results Detail

Contact:

Investors: Matt Schroeder 717-214-8867 or investor@riteaid.com

Media: Susan Henderson 717-730-7766