- Revenues of $8.1 Billion for the
Third Quarter, Down 0.8 Percent Year-Over-Year
- Third Quarter Net Income of $15.0
Million or $0.01 Per Share, Compared to the Prior Year’s Third
Quarter Net Income of $59.5 Million or $0.06 Per Share
- Third Quarter Adjusted Net Income
Per Diluted Share of $0.02, Compared to the Prior Year Third
Quarter Adjusted Net Income Per Diluted Share of $0.08
- Adjusted EBITDA of $274.1 Million
for the Third Quarter, Compared to the Prior Year’s Adjusted EBITDA
of $373.2 Million
Rite Aid Corporation (NYSE:RAD) today reported operating results
for its third fiscal quarter ended November 26, 2016.
For the third quarter, the company reported revenues of $8.1
billion, net income of $15.0 million, or $0.01 per diluted share,
Adjusted net income of $23.3 million, or $0.02 per diluted share
and Adjusted EBITDA of $274.1 million, or 3.4 percent of
revenues.
“Despite the difficult operating environment created by the
extended duration of the merger process with WBA, our third quarter
results show solid performance in our front-end business, good cost
control and continued strong growth at our pharmacy benefit
manager, EnvisionRx,” said Chairman and CEO John Standley.
“Reimbursement rates remain our largest challenge and we expect
that to continue for the remainder of the fiscal year. Moving
forward, we will remain focused on improving the health of our
patients through clinical services like immunizations and
medication adherence, converting additional stores to our highly
successful Wellness format and working as a team to deliver a
consistently outstanding experience to our customers.”
Third Quarter Summary
Revenues for the quarter were $8.1 billion compared to revenues
of $8.2 billion in the prior year’s third quarter, a decrease of
$64.5 million or 0.8 percent. Retail Pharmacy Segment revenues were
$6.5 billion and decreased 3.1 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 were $1.6
billion and increased 9.7 percent compared to the prior year
period.
Same store sales for the quarter decreased 3.4 percent over the
prior year, consisting of a 4.7 percent decrease in pharmacy sales
and a 0.4 percent decrease 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 decreased 2.4 percent over the prior year period.
Prescription sales accounted for 68.9 percent of total drugstore
sales, and third party prescription revenue was 98.2 percent of
pharmacy sales.
Net income was $15.0 million or $0.01 per diluted share compared
to last year’s third quarter net income of $59.5 million or $0.06
per diluted share. The decline in operating results is due
primarily to a decline in Adjusted EBITDA, partially offset by
lower income tax expense.
Adjusted EBITDA (which is reconciled to net income on the
attached table) was $274.1 million or 3.4 percent of revenues for
the third quarter compared to $373.2 million or 4.6 percent of
revenues for the same period last year. The decline in Adjusted
EBITDA is due to a decrease of $117.5 million in the Retail
Pharmacy Segment, resulting from 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. The decline in Retail Pharmacy Segment Adjusted
EBITDA was partially offset by an increase of $18.5 million of
Pharmacy Services Segment Adjusted EBITDA. This was due to an
increase in revenues and strong operating results in the current
year.
In the third quarter, the company opened 3 stores, relocated 9
stores, and remodeled 95 stores, bringing the total number of
wellness stores chainwide to 2,322. The company also acquired 1
store and closed 7 stores, resulting in a total store count of
4,547 at the end of the third quarter. The company also opened 2
clinics in the third quarter, bringing the total to 92.
Rite Aid Merger with Walgreens Boots Alliance
As announced on Dec. 20, 2016, Walgreens Boots Alliance, Inc.
(“WBA”) and Rite Aid have entered into an agreement to sell 865
Rite Aid stores and certain assets related to store operations to
Fred’s, Inc. (“Fred’s”) for $950 million in an all-cash
transaction. The transaction is subject to Federal Trade Commission
(“FTC”) approval of the sale of the stores to Fred’s, FTC approval
and completion of the pending acquisition of Rite Aid by WBA and
other customary closing conditions.
The agreement was entered into to respond to concerns identified
by the FTC in its review of the proposed acquisition of Rite Aid by
WBA which was announced in October 2015. While WBA 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, 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.
Rite Aid is one of the nation’s leading drugstore chains with
4,547 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. 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, as well as the ability of the parties to complete
the transactions considering the various closing conditions. 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; 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; significant transaction costs; unknown
liabilities; the risk of litigation and/or regulatory actions
related to the proposed transactions; 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 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
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 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.
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).
RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEETS (Dollars in thousands) (unaudited)
November 26, 2016 February 27, 2016 ASSETS Current
assets: Cash and cash equivalents $ 220,028 $ 124,471 Accounts
receivable, net 1,707,648 1,601,008 Inventories, net of LIFO
reserve of $1,047,657 and $1,006,396 2,947,358 2,697,104 Prepaid
expenses and other current assets 142,134
128,144 Total current assets 5,017,168 4,550,727 Property,
plant and equipment, net 2,291,459 2,255,398 Goodwill 1,715,479
1,713,475 Other intangibles, net 885,220 1,004,379 Deferred tax
assets 1,534,437 1,539,141 Other assets 215,163
213,890 Total assets $ 11,658,926 $ 11,277,010
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Current maturities of long-term debt and lease
financing obligations $ 22,681 $ 26,848 Accounts payable 1,792,574
1,542,797 Accrued salaries, wages and other current liabilities
1,256,283 1,427,250 Total current
liabilities 3,071,538 2,996,895 Long-term debt, less current
maturities 7,208,286 6,914,393 Lease financing obligations, less
current maturities 43,943 52,895 Other noncurrent liabilities
689,032 731,399 Total liabilities
11,012,799 10,695,582 Commitments and contingencies - -
Stockholders' equity: Common stock 1,052,268 1,047,754 Additional
paid-in capital 4,855,612 4,822,665 Accumulated deficit (5,216,015
) (5,241,210 ) Accumulated other comprehensive loss (45,738
) (47,781 ) Total stockholders' equity 646,127
581,428 Total liabilities and stockholders' equity $
11,658,926 $ 11,277,010 RITE AID
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS (Dollars in thousands, except per share amounts)
(unaudited) Thirteen weeks ended
Thirteen weeks ended November 26, 2016 November 28, 2015 Revenues $
8,089,726 $ 8,154,184 Costs and expenses: Cost of revenues
6,194,866 6,151,305 Selling, general and administrative expenses
1,773,862 1,777,647 Lease termination and impairment charges 7,265
7,011 Interest expense 106,309 106,879 Loss on sale of assets, net
501 3,331 8,082,803
8,046,173 Income before income taxes 6,923 108,011
Income tax (benefit) expense (8,087 ) 48,468 Net
income $ 15,010 $ 59,543 Basic and diluted earnings
per share: Numerator for earnings per share: Income
attributable to common stockholders - basic and diluted $ 15,010
$ 59,543 Denominator: Basic weighted
average shares 1,045,028 1,039,867 Outstanding options and
restricted shares, net 15,735 17,411
Diluted weighted average shares 1,060,763
1,057,278 Basic and diluted income per share $ 0.01 $ 0.06
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except
per share amounts) (unaudited)
Thirty-nine weeks ended Thirty-nine weeks ended November 26,
2016 November 28, 2015 Revenues $ 24,303,712 $ 22,466,521 Costs and
expenses: Cost of revenues 18,597,809 16,681,822 Selling, general
and administrative expenses 5,345,356 5,203,058 Lease termination
and impairment charges 20,279 21,670 Interest expense 316,810
345,895 Loss on debt retirements, net - 33,205 Loss on sale of
assets, net 1,731 3,651
24,281,985 22,289,301 Income before income
taxes 21,727 177,220 Income tax (benefit) expense (3,468 )
77,372 Net income $ 25,195 $ 99,848 Basic and
diluted earnings per share: Numerator for earnings per
share: Income attributable to common stockholders - basic and
diluted $ 25,195 $ 99,848 Denominator:
Basic weighted average shares 1,043,887 1,018,783 Outstanding
options and restricted shares, net 17,117
18,765 Diluted weighted average shares 1,061,004
1,037,548 Basic and diluted income per share $
0.02 $ 0.10 RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In
thousands) (unaudited) Thirteen weeks
ended Thirteen weeks ended November 26, 2016 November 28,
2015 Net income $ 15,010 $ 59,543 Other comprehensive income:
Defined benefit pension plans: Amortization of prior service cost,
net transition obligation and net actuarial losses included in net
periodic pension cost, net of $451 and $398 tax expense 681
597 Total other comprehensive income 681 597
Comprehensive income $ 15,691 $ 60,140 RITE AID
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (In thousands) (unaudited)
Thirty-nine weeks ended Thirty-nine weeks
ended November 26, 2016 November 28, 2015 Net income $ 25,195 $
99,848 Other comprehensive income: Defined benefit pension plans:
Amortization of prior service cost, net transition obligation and
net actuarial losses included in net periodic pension cost, net of
$1,353 and $1,194 tax expense 2,043 1,792 Total other
comprehensive income 2,043 1,792 Comprehensive income
$ 27,238 $ 101,640 RITE AID CORPORATION AND
SUBSIDIARIES SUPPLEMENTAL SEGMENT OPERATING INFORMATION
(Dollars in thousands) (unaudited) Thirteen
weeks ended Thirteen weeks ended November 26, 2016 November
28, 2015
Retail Pharmacy Segment Revenues (a) $
6,535,274 $ 6,744,143 Cost of revenues (a) 4,743,471
4,822,257 Gross profit 1,791,803 1,921,886 LIFO
charge 13,750 5,986 FIFO gross profit
1,805,553 1,927,872 Gross profit as a percentage of revenues
27.42 % 28.50 % LIFO charge as a percentage of revenues 0.21 % 0.09
% FIFO gross profit as a percentage of revenues 27.63 % 28.59 %
Selling, general and administrative expenses 1,700,625
1,708,445 Selling, general and administrative expenses as a
percentage of revenues 26.02 % 25.33 % Cash interest expense
101,015 101,494 Non-cash interest expense 5,271
5,375 Total interest expense 106,286 106,869
Adjusted EBITDA 221,716 339,255 Adjusted EBITDA as a percentage of
revenues 3.39 % 5.03 %
Pharmacy Services
Segment Revenues (a) $ 1,645,835 $ 1,500,895 Cost of revenues
(a) 1,542,778 1,419,902 Gross profit
103,057 80,993 Gross profit as a percentage of revenues 6.26
% 5.40 % Adjusted EBITDA 52,431 33,911 Adjusted EBITDA as a
percentage of revenues 3.19 % 2.26 %
(a) -
Revenues and cost of revenues include
$91,383 and $90,854 of inter-segment activity for the thirteen
weeks ended November 26, 2016 and November 28, 2015, respectively,
that is eliminated in consolidation.
RITE AID CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL SEGMENT OPERATING INFORMATION (Dollars in thousands)
(unaudited)
Thirty-nine weeks endedNovember 26,
2016
Thirty-nine weeks endedNovember 28,
2015
Retail Pharmacy Segment Revenues (a) $ 19,696,304 $
20,038,947 Cost of revenues (a) 14,279,785
14,397,018 Gross profit 5,416,519 5,641,929 LIFO charge
41,261 17,959 FIFO gross profit
5,457,780 5,659,888 Gross profit as a percentage of revenues
27.50 % 28.15 % LIFO charge as a percentage of revenues 0.21 % 0.09
% FIFO gross profit as a percentage of revenues 27.71 % 28.24 %
Selling, general and administrative expenses 5,133,161
5,086,939 Selling, general and administrative expenses as a
percentage of revenues 26.06 % 25.39 % Cash interest expense
300,802 314,052 Non-cash interest expense 15,973
31,828 Total interest expense 316,775 345,880
Adjusted EBITDA 729,186 952,120 Adjusted EBITDA as a percentage of
revenues 3.70 % 4.75 %
Pharmacy Services
Segment Revenues (a) $ 4,883,070 $ 2,572,784 Cost of revenues
(a) 4,593,686 2,430,014 Gross profit
289,384 142,770 Gross profit as a percentage of revenues
5.93 % 5.55 % Adjusted EBITDA 143,616 67,133 Adjusted EBITDA
as a percentage of revenues 2.94 % 2.61 %
(a) -
Revenues and cost of revenues include
$275,662 and $145,210 of inter-segment activity for the thirty-nine
weeks ended November 26, 2016 and November 28, 2015, respectively,
that is eliminated in consolidation.
RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL
INFORMATION RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (In
thousands) (unaudited)
Thirteen weeks endedNovember 26, 2016
Thirteen weeks endedNovember 28, 2015
Reconciliation of net income to adjusted EBITDA: Net
income $ 15,010 $ 59,543 Adjustments: Interest expense 106,309
106,879 Income tax (benefit) expense (8,087 ) 48,468 Depreciation
and amortization 143,245 136,434 LIFO charge 13,750 5,986 Lease
termination and impairment charges 7,265 7,011 Other (3,345
) 8,845 Adjusted EBITDA $ 274,147 $ 373,166
Percent of revenues 3.39 % 4.58 % RITE AID
CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (In thousands)
(unaudited)
Thirty-nine weeks endedNovember 26,
2016
Thirty-nine weeks endedNovember 28,
2015
Reconciliation of net income to adjusted EBITDA: Net
income $ 25,195 $ 99,848 Adjustments: Interest expense 316,810
345,895 Income tax (benefit) expense (3,468 ) 77,372 Depreciation
and amortization 424,084 373,782 LIFO charge 41,261 17,959 Lease
termination and impairment charges 20,279 21,670 Loss on debt
retirements, net - 33,205 Other 48,641 49,522
Adjusted EBITDA $ 872,802 $ 1,019,253 Percent
of revenues 3.59 % 4.54 % RITE AID CORPORATION AND
SUBSIDIARIES SUPPLEMENTAL INFORMATION ADJUSTED NET INCOME (Dollars
in thousands, except per share amounts) (unaudited)
Thirteen weeks endedNovember 26, 2016
Thirteen weeks endedNovember 28, 2015
Net income $ 15,010 $ 59,543 Add back - Income tax (benefit)
expense (8,087 ) 48,468 Income before income taxes
6,923 108,011 Adjustments: Amortization of EnvisionRx
intangible assets 21,049 21,177 LIFO charge 13,750 5,986 Merger and
Acquisition-related costs 1,964 10,078
Adjusted income before income taxes 43,686 145,252 Adjusted
income tax expense (a) 20,401 58,101 Adjusted
net income $ 23,285 $ 87,151 Adjusted net income per
diluted share: Numerator for adjusted net income per diluted
share: Adjusted net income $ 23,285 $ 87,151
Denominator: Basic weighted average shares 1,045,028
1,039,867 Outstanding options and restricted shares, net
15,735 17,411 Diluted weighted average shares
1,060,763 1,057,278 Net income per
diluted share $ 0.01 $ 0.06 Adjusted net income per diluted
share $ 0.02 $ 0.08 (a)
The fiscal year 2017 and 2016 annual
effective tax rates, adjusted to exclude amortization of EnvisionRx
intangible assets, LIFO charges and Merger and Acquisition-related
costs from projected book income, are used for the thirteen weeks
ended November 26, 2016 and November 28, 2015, respectively.
RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL
INFORMATION ADJUSTED NET INCOME (Dollars in thousands, except per
share amounts) (unaudited) Thirty-nine weeks
ended Thirty-nine weeks ended November 26, 2016 November 28, 2015
Net income $ 25,195 $ 99,848 Add back - Income tax (benefit)
expense (3,468 ) 77,372 Income before income taxes
21,727 177,220 Adjustments: Amortization of EnvisionRx
intangible assets 62,217 38,217 LIFO charge 41,261 17,959 Loss on
debt retirements, net - 33,205 Merger and Acquisition-related costs
6,122 21,796 Adjusted income before
income taxes 131,327 288,397 Adjusted income tax expense (a)
61,330 115,359 Adjusted net income $ 69,997
$ 173,038 Adjusted net income per diluted share:
Numerator for adjusted net income per diluted share:
Adjusted net income $ 69,997 $ 173,038
Denominator: Basic weighted average shares 1,043,887 1,018,783
Outstanding options and restricted shares, net 17,117
18,765 Diluted weighted average shares
1,061,004 1,037,548 Net income per diluted
share $ 0.02 $ 0.10 Adjusted net income per diluted share $
0.07 $ 0.17
(a)
The fiscal year 2017 and 2016 annual
effective tax rates, adjusted to exclude amortization of EnvisionRx
intangible assets, LIFO charges and Merger and Acquisition-related
costs from projected book income, are used for the thirty-nine
weeks ended November 26, 2016 and November 28, 2015,
respectively.
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands)
(unaudited) Thirteen weeks ended Thirteen
weeks ended November 26, 2016 November 28, 2015
OPERATING ACTIVITIES: Net income $ 15,010 $ 59,543 Adjustments to
reconcile to net cash provided by operating activities:
Depreciation and amortization 143,245 136,434 Lease termination and
impairment charges 7,265 7,011 LIFO charge 13,750 5,986 Loss on
sale of assets, net 501 3,331 Stock-based compensation expense
13,070 10,328 Changes in deferred taxes 4,167 44,079 Excess tax
benefit on stock options and restricted stock (561 ) (567 ) Changes
in operating assets and liabilities: Accounts receivable 116,387
307,779 Inventories (134,103 ) 24,808 Accounts payable 74,939
57,721 Other assets and liabilities, net (101,083 )
(328,488 ) Net cash provided by operating activities 152,587
327,965 INVESTING ACTIVITIES: Payments for property, plant and
equipment (108,070 ) (142,655 ) Intangible assets acquired (19,936
) (54,150 ) Acquisition of businesses, net of cash acquired - 1,194
Proceeds from dispositions of assets and investments 3,384
2,616 Net cash used in investing activities
(124,622 ) (192,995 ) FINANCING ACTIVITIES: Net proceeds from
(payments to) revolver 30,000 (73,000 ) Principal payments on
long-term debt (5,196 ) (5,750 ) Change in zero balance cash
accounts 30,151 16,298 Net proceeds from the issuance of common
stock 454 520 Excess tax benefit on stock options and restricted
stock 561 567 Net cash provided by
(used in) financing activities 55,970 (61,365
) Increase in cash and cash equivalents 83,935 73,605 Cash and cash
equivalents, beginning of period 136,093
152,647 Cash and cash equivalents, end of period $ 220,028
$ 226,252
SUPPLEMENTAL CASH FLOW
INFORMATION Payments for property, plant and equipment $
108,070 $ 142,655 Intangible assets acquired 19,936
54,150 Total cash capital expenditures 128,006
196,805 Equipment received for noncash consideration - - Equipment
financed under capital leases 1,021 2,228
Gross capital expenditures $ 129,027 $ 199,033
RITE AID CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands)
(unaudited) Thirty-nine weeks ended
Thirty-nine weeks ended November 26, 2016 November 28, 2015
OPERATING ACTIVITIES: Net income $ 25,195 $ 99,848
Adjustments to reconcile to net cash provided by operating
activities: Depreciation and amortization 424,084 373,782 Lease
termination and impairment charges 20,279 21,670 LIFO charge 41,261
17,959 Loss on sale of assets, net 1,731 3,651 Stock-based
compensation expense 36,766 26,529 Loss on debt retirements, net -
33,205 Changes in deferred taxes 6,165 50,696 Excess tax benefit on
stock options and restricted stock (3,809 ) (21,436 ) Changes in
operating assets and liabilities: Accounts receivable (110,868 )
315,898 Inventories (291,574 ) 339 Accounts payable 225,278 89,630
Other assets and liabilities, net (209,055 ) (342,234
) Net cash provided by operating activities 165,453 669,537
INVESTING ACTIVITIES: Payments for property, plant and equipment
(333,788 ) (414,338 ) Intangible assets acquired (48,805 ) (97,612
) Acquisition of businesses, net of cash acquired - (1,778,377 )
Proceeds from dispositions of assets and investments 10,217
8,697 Net cash used in investing activities
(372,376 ) (2,281,630 ) FINANCING ACTIVITIES: Proceeds from
issuance of long-term debt - 1,800,000 Net proceeds from revolver
280,000 655,000 Principal payments on long-term debt (16,426 )
(666,967 ) Change in zero balance cash accounts 30,685 (35,011 )
Net proceeds from the issuance of common stock 4,412 8,625
Financing fees paid for early debt redemption - (26,003 ) Excess
tax benefit on stock options and restricted stock 3,809 21,436
Deferred financing costs paid - (34,634 ) Net
cash provided by financing activities 302,480
1,722,446 Increase in cash and cash equivalents 95,557
110,353 Cash and cash equivalents, beginning of period
124,471 115,899 Cash and cash equivalents, end
of period $ 220,028 $ 226,252
SUPPLEMENTAL CASH FLOW INFORMATION Payments for
property, plant and equipment $ 333,788 $ 414,338 Intangible assets
acquired 48,805 97,612 Total cash
capital expenditures 382,593 511,950 Equipment received for noncash
consideration 746 2,011 Equipment financed under capital leases
3,881 3,499 Gross capital expenditures
$ 387,220 $ 517,460
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161222005318/en/
Rite Aid CorporationINVESTORS:Matt Schroeder,
717-214-8867investor@riteaid.comorMEDIA:Susan Henderson,
717-730-7766
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