-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RenNXSxT1Pt5m5FW2g4FhI51UvJU/Ce3O8gyZDj29G/ipzXMOjejzTbctHbFlT70 VghYn1ACuvLgNEweaOetYA== 0000950172-04-001539.txt : 20040624 0000950172-04-001539.hdr.sgml : 20040624 20040624100809 ACCESSION NUMBER: 0000950172-04-001539 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040624 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040624 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RITE AID CORP CENTRAL INDEX KEY: 0000084129 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DRUG STORES AND PROPRIETARY STORES [5912] IRS NUMBER: 231614034 STATE OF INCORPORATION: DE FISCAL YEAR END: 0302 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05742 FILM NUMBER: 04878495 BUSINESS ADDRESS: STREET 1: 30 HUNTER LANE CITY: CAMP HILL OWN STATE: PA ZIP: 17011 BUSINESS PHONE: 7177612633 MAIL ADDRESS: STREET 1: PO BOX 3165 CITY: HARRISBURG STATE: PA ZIP: 17105 FORMER COMPANY: FORMER CONFORMED NAME: RACK RITE DISTRIBUTORS DATE OF NAME CHANGE: 19680510 FORMER COMPANY: FORMER CONFORMED NAME: LEHRMAN LOUIS & CO DATE OF NAME CHANGE: 19680510 8-K 1 s875581.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) June 24, 2004 (May 29, 2004) RITE AID CORPORATION ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 1-5742 23-1614034 - ------------------------------------------------------------------------------ (State or Other Jurisdiction (Commission (IRS Employer of Incorporation File Number) Identification No.) 30 Hunter Lane, Camp Hill, Pennsylvania 17011 - ------------------------------------------------------------------------------ (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (717) 761-2633 ----------------------- None ------------------------------------------------------------------------------ (Former Name or Former Address, if Changed Since Last Report) Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits. 99.1 Registrant's Press Release, dated June 24, 2004. Item 12. Results of Operations and Financial Condition. On June 24, 2004, we announced our financial position and results of operations as of and for our first quarter, ended May 29, 2004. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The announcement includes a non-GAAP financial measure, "Adjusted EBITDA." Adjusted EBITDA represents net income (loss) from operations excluding the impact of income taxes, interest expense, depreciation and amortization, LIFO adjustments, charges or credits for store closing and impairment, inventory write-downs related to closed stores, stock-based compensation expense, debt modifications and retirements, litigation proceeds, litigation expense, expense of the defense against litigation related to prior managements' business practices, the defense of prior management and transaction consultation, sales of assets and investments, and non-recurring items. We reference this non-GAAP financial measure frequently in our decision-making because it provides supplemental information that facilitates internal comparisons to historical operating performance of prior periods and external comparisons to competitors' historical operating performance. In addition, incentive compensation is based on Adjusted EBITDA and we base our forward-looking estimates on Adjusted EBITDA to facilitate quantification of planned business activities and enhance subsequent follow-up with comparisons of actual to planned Adjusted EBITDA. We include this non-GAAP financial measure in our earnings announcement in order to provide transparency to investors and enable investors to compare our operating performance with the operating performance of our competitors. The information furnished pursuant to this Current Report on Form 8-K (including the exhibit hereto) shall not be considered "filed" under the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into future filings by the Company under the Securities Act of 1933, as amended or under the Securities Exchange Act of 1934, as amended, unless the Company expressly sets forth in such future filing that such information is to be considered "filed" or incorporated by reference therein. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. RITE AID CORPORATION Dated: June 24, 2004 By: /s/Robert B. Sari ________________________________ Name: Robert B. Sari Title: Senior Vice President, General Counsel and Secretary EXHIBIT INDEX Exhibit No. Description 99.1 Registrant's Press Release dated June 24, 2004. EX-99 2 q1fy05.txt EXHIBIT 99.1 INVESTORS: MEDIA: John Standley Karen Rugen 717-214-8857 717-730-7766 Kevin Twomey 717-731-6540 or investor@riteaid.com FOR IMMEDIATE RELEASE RITE AID ANNOUNCES FIRST QUARTER RESULTS REPORTS FIRST QUARTER NET INCOME OF $.10 PER DILUTED SHARE COMPARED TO A LOSS OF $.08 PER DILUTED SHARE IN PRIOR YEAR ACHIEVES FIRST QUARTER ADJUSTED EBITDA OF $223.7 MILLION Increases Fiscal 2005 Net Income Guidance CAMP HILL, PA, June 24, 2004--Rite Aid Corporation (NYSE, PCX: RAD) today announced financial results for its first quarter, ended May 29, 2004. Revenues for the 13-week first quarter were $4.2 billion versus revenues of $4.0 billion in the prior year first quarter. Revenues increased 4.9 percent. Same store sales increased 5.3 percent during the first quarter as compared to the year-ago like period, consisting of a 5.4 percent pharmacy same store sales increase and a 5.2 percent increase in front-end same store sales. Prescription sales accounted for 64.6 percent of total sales, and third party prescription sales represented 93.7 percent of pharmacy sales. Net income for the first quarter increased to $63.3 million or $.10 per diluted share compared to last year's first quarter net loss of $38.8 million or an $.08 loss per diluted share. The improvement was due primarily to a $48.6 million or 27.8 percent increase in adjusted EBITDA (which is reconciled to net income on the attached table), no charge related to debt modifications and retirements compared to a $33.4 million charge in the prior year quarter and a $4.6 million store closing and impairment credit which compared to a $6.4 million charge in the prior year quarter. -MORE- Rite Aid FY05 Q1 Press Release - page 2 Adjusted EBITDA amounted to $223.7 million or 5.3 percent of revenues. This compares to $175.1 million or 4.3 percent of revenues for the like period last year. "The first quarter was another great quarter for Rite Aid as once again we substantially improved our operating and financial performance. We reported the highest adjusted EBITDA in terms of dollars and as a percent of sales since we began to rebuild our company four years ago. Adjusted EBITDA increased 27.8 percent over the comparable period and contributed to another profitable quarter," said Mary Sammons, Rite Aid president and CEO. "Our team did an excellent job of leveraging sales increases, improving gross margin and containing costs." In the first quarter, the company acquired one store, remodeled 48 stores, relocated three stores and closed nine stores. Stores in operation at the end of the quarter totaled 3,374. Company Updates Guidance for Fiscal 2005 - ---------------------------------------- Based on current trends, Rite Aid said that it is revising its fiscal 2005 guidance for net income, sales and capital expenditures and confirming guidance for adjusted EBITDA. Net income for fiscal 2005 is expected to be between $121 million and $167 million as compared to previous guidance of net income between $112 million and $157 million. The company said it expects sales to be between $17.2 billion and $17.4 billion, with same stores sales improving 4.5 percent to 5.5 percent as compared to previous guidance of $17.4 billion and $17.6 billion, with same store sales improving 5.5 percent to 6.5 percent. Capital expenditures guidance is changed to $275 million to $325 million from $300 million to $350 million. Adjusted EBITDA guidance remains unchanged at between $800 million and $850 million. Conference Call Broadcast - ------------------------- Rite Aid will hold an analyst call at 10:30 a.m. Eastern Time today with remarks by Rite Aid's management team. The call will be simulcast via the internet and can be accessed through the websites www.riteaid.com in the conference call section of investor information and www.StreetEvents.com. A playback of the call will be available on both sites starting at 2 p.m. Eastern Time today. A playback of the call will also be available by telephone for 48 hours beginning at 2 p.m. Eastern Time today until 2 p.m. Eastern Time on June 26. The playback number is 1-800-642-1687 from within the U.S. and Canada or 1-706-645-9291 from outside the U.S. and Canada with the seven-digit reservation number 8131317. Rite Aid Corporation is one of the nation's leading drugstore chains with annual revenues of $16.6 billion and approximately 3,400 stores in 28 states and the District of Columbia. Information about Rite Aid, including corporate background and press releases, is available through the company's website at www.riteaid.com. This press release may contain forward-looking statements, which are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements include our high level of indebtedness, our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our senior secured credit facility and other debt agreements, -MORE- Rite Aid FY05 Q1 Press Release - page 3 our ability to improve the operating performance of our existing stores in accordance with our management's long term strategy, our ability to hire and retain pharmacists and other store personnel, the outcomes of pending lawsuits and governmental investigations, competitive pricing pressures, continued consolidation of the drugstore industry, the efforts of third-party payors to reduce prescription drug reimbursements, changes in state or federal legislation or regulations, the success of planned advertising and merchandising strategies, general economic conditions and inflation, interest rate movements, access to capital and our relationship with our suppliers. Consequently, all of the forward-looking statements made in this press release are qualified by these and other factors, risks and uncertainties. Readers are also directed to consider other risks and uncertainties discussed in documents filed by the Company with the Securities and Exchange Commission. Forward-looking statements can be identified through the use of words such as "may", "will", "intend", "plan", "project", "expect", "anticipate", "could", "should", "would", "believe", "estimate", "contemplate", and "possible". See the 8-K furnished to the Securities and Exchange Commission on June 24, 2004 for definition, purpose and reconciliation of non-GAAP financial measures referred to herein. ###
RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (unaudited) May 29, 2004 February 28, 2004 ------------------ ------------------- ASSETS Current assets: Cash and cash equivalents $ 500,151 $ 334,755 Accounts receivable, net 649,492 670,004 Inventories, net 2,250,627 2,223,171 Prepaid expenses and other current assets 100,774 150,067 ------------------ ------------------- Total current assets 3,501,044 3,377,997 Property, plant and equipment, net 1,862,584 1,883,808 Goodwill 684,535 684,535 Other intangibles, net 177,058 176,672 Other assets 134,929 123,667 ------------------ ------------------- Total assets $ 6,360,150 $ 6,246,679 ================== =================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt and lease financing obligations $ 220,781 $ 23,976 Accounts payable 828,524 758,290 Accrued salaries, wages and other current liabilities 700,297 701,484 ------------------ ------------------- Total current liabilities: 1,749,602 1,483,750 Convertible notes 246,375 246,000 Long-term debt, less current maturities 3,250,799 3,451,352 Lease financing obligations, less current maturities 171,610 170,338 Other noncurrent liabilities 863,266 885,975 ------------------ ------------------- Total liabilities 6,281,652 6,237,415 Commitments and contingencies - - Stockholders' equity: Preferred stock 426,159 417,803 Common stock 517,297 516,496 Additional paid-in capital 3,130,021 3,133,277 Accumulated deficit (3,972,100) (4,035,433) Accumulated other comprehensive loss (22,879) (22,879) ------------------ ------------------- Total stockholders' equity 78,498 9,264 ------------------ ------------------- Total liabilities and stockholders' equity $ 6,360,150 $ 6,246,679 ================== ===================
RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (unaudited) Thirteen Weeks ended Thirteen Weeks May 29, 2004 ended May 31, 2003 --------------------- --------------------- Revenues $ 4,244,357 $ 4,046,168 Costs and expenses: Costs of goods sold, including occupancy costs 3,191,834 3,068,175 Selling, general and administrative expenses 908,863 889,733 Stock-based compensation expense 3,982 9,835 Store closing and impairment (credits) charges (4,587) 6,366 Interest expense 77,801 78,958 Loss on debt modifications and retirements, net - 33,427 Gain on sale of assets and investments, net (1,918) (1,504) --------------------- --------------------- 4,175,975 4,084,990 --------------------- --------------------- Income (loss) before income taxes 68,382 (38,822) Income tax expense 5,049 - --------------------- --------------------- Net income (loss) $ 63,333 $ (38,822) ===================== ===================== Basic and diluted income (loss) per share: Numerator for income (loss) per share: Net income (loss) $ 63,333 $ (38,822) Accretion of redeemable preferred stock (26) (26) Cumulative preferred stock dividends (8,356) - --------------------- --------------------- Net income (loss) attributable to common stockholders - basic 54,951 (38,848) Interest on convertible debt 2,968 - --------------------- --------------------- Net income (loss) attributable to common stockholders - diluted $ 57,919 $ (38,848) ===================== ===================== Denominator: Basic weighted average shares 516,837 515,198 Outstanding options 18,792 - Convertible debt 38,462 - --------------------- --------------------- Diluted weighted average shares 574,091 515,198 ===================== ===================== Basic income (loss) per share $ 0.11 $ (0.08) Diluted income (loss) per share $ 0.10 $ (0.08)
RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (unaudited) Thirteen Weeks Ended Thirteen Weeks Ended May 29, 2004 May 31, 2003 ----------------------- ----------------------- Operating activities: Net income (loss) $ 63,333 $ (38,822) Adjustments to reconcile to net cash provided by operations: Depreciation and amortization 63,118 65,575 Store closings and impairment (credits) charges (4,587) 6,366 Stock-based compensation expense 3,982 9,835 Loss on debt modifications and retirements, net - 33,427 Gain on sale of assets and investments, net (1,918) (1,504) Changes in income tax receivables and payables 41,279 - Changes in operating assets and liabilities 51,352 (25,077) ----------------------- ----------------------- Net cash provided by operating activities 216,559 49,800 Investing activities: Expenditures for property, plant and equipment (35,088) (128,760) Intangible assets acquired (6,730) (4,895) Proceeds from dispositions 3,483 8,523 ----------------------- ----------------------- Net cash used in investing activities (38,335) (125,132) Financing activities: Principal payments on long-term debt (6,162) (185,464) Principal payments on bank credit facilities - (1,372,500) Proceeds from issuance of new bank credit facility - 1,150,000 Change in zero balance cash accounts (8,586) (14,971) Proceeds from issuance of bonds - 502,950 Deferred financing costs paid - (28,110) Proceeds from the issuance of stock 1,920 848 ----------------------- ----------------------- Net cash (used in) provided by financing activities (12,828) 52,753 ----------------------- ----------------------- Increase (decrease) in cash and cash equivalents 165,396 (22,579) Cash and cash equivalents, beginning of period 334,755 365,321 ----------------------- ----------------------- Cash and cash equivalents, end of period $ 500,151 $ 342,742 ======================= =======================
RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET INCOME(LOSS) TO ADJUSTED EBITDA (In thousands) Thirteen weeks Thirteen Weeks ended May 29, 2004 ended May 31, 2003 -------------------------------------- Reconciliation of net income (loss) to adjusted EBITDA: Net income (loss) $ 63,333 $ (38,822) Adjustments: Interest expense 77,801 78,958 Recurring income tax expense 5,049 - Depreciation and amortization 63,118 65,575 LIFO charges (a) 10,689 15,030 Store closing and impairment (credits) charges (4,587) 6,366 Stock-based compensation expense 3,982 9,835 Gain on sale of assets and investments, net (1,918) (1,504) Loss on debt modifications and retirements, net (b) - 33,427 Litigation settlements, net (c) 460 (750) Legal and accounting expenses (d) 4,023 5,988 Closed store liquidation expense (e) 1,686 983 Other 72 20 ------------------ ------------------ Adjusted EBITDA $ 223,708 $ 175,106 ================== ================== Percent of revenues 5.27% 4.33% Notes: (a) Represents non-cash charges to value our inventories under the last-in first-out ("LIFO") method. (b) Represents loss related to debt modifications and retirements, net. (c) Represents net impact of non-recurring litigation. (d) Charges consist primarily of fees paid for legal services related to defending against litigation related to prior management's business practices, to defend prior management, and for transaction consultation. (e) Represents costs to liquidate inventory at stores that are in the process of closing.
RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET INCOME GUIDANCE TO ADJUSTED EBITDA GUIDANCE (In thousands) Guidance Range ------------------------------- Low High --------------- --------------- Year Ending Year Ending February 26, February 26, 2005 2005 --------------- --------------- Reconciliation of net income to adjusted EBITDA: Net income $ 121,000 $ 167,000 Adjustments: Interest expense 315,000 315,000 Income tax expense, net 11,000 15,000 Depreciation and amortization 250,000 250,000 LIFO charge 40,000 40,000 Store closing, liquidation, and impairment charges 40,000 40,000 Stock-based compensation expense 18,000 18,000 Legal and accounting expenses and litigation settlements, net 5,000 5,000 --------------- --------------- Adjusted EBITDA $ 800,000 $ 850,000 =============== ===============
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