EX-99.1 2 ex99-1.htm EXHIBIT 99.1 - PRESS RELEASE ex99-1.htm
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Press Release
For Further Information Contact:

INVESTORS:
MEDIA:
Chris Hall
Karen Rugen
(717) 214-8834
(717) 730-7766
or investor@riteaid.com

FOR IMMEDIATE RELEASE

           RITE AID REPORTS THIRD QUARTER FISCAL 2010 RESULTS

●          
Third Quarter Net Loss of $.10 per Diluted Share Compared to Net Loss of $.30 per Diluted Share in Prior Third Quarter
   
●          
Adjusted EBITDA of $254.2 Million Compared to Adjusted EBITDA of $259.6 Million in Prior Year Third Quarter
   
 ● Continued Strong Liquidity of $903.2 Million at Quarter End
   
 ● Continued Significant Reduction in SG&A Year Over Year
   
 ● Rite Aid Narrows Fiscal 2010 Outlook
   
 ● Rite Aid Extends Term of Pharmaceutical Supply Agreement with McKesson Corp.
 
 
CAMP HILL, PA (December 17, 2009) – Rite Aid Corporation (NYSE: RAD) today reported revenues of $6.4 billion and a net loss of $83.9 million or $.10 per diluted share for its fiscal quarter ended November 28, 2009.  Adjusted EBITDA was $254.2 million or 4.0 percent of revenues.

Third Quarter Highlights

●
Both pharmacy same store sales and the number of prescriptions filled continued to increase by  0.4 percent and 1.5 percent, respectively.  A 227 basis point increase in generic dispensing year over year negatively impacted sales.
   
●
Significant reduction in selling, general and administrative expenses as a percent of sales continued with SG&A 119 basis points lower than last year’s third quarter.
   
●
FIFO inventory was $268.8 million lower year over year.
   
●
Liquidity remained strong with a total of $903.2 million of availability from the company's credit facility and invested cash.
 

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Rite Aid FY 2010 Q3 Press Release – page 2

“Our results demonstrate the significant progress we’ve made to strengthen our company since last year’s third quarter.  Liquidity at the end of the quarter more than doubled, and we’ve refinanced all of our 2010 debt maturities to give more time for our growth initiatives to work,” said Mary Sammons, Rite Aid chairman and CEO.  “Congratulations to our team for the great job they did once again growing prescriptions, reducing expenses and controlling inventory, which helped offset difficult front end sales in this tough retail economy and continued pressure on pharmacy margins.”

Third Quarter Summary

Revenues for the 13-week quarter were $6.35 billion versus revenues of $6.47 billion in the prior-year third quarter.  Revenues declined 1.8 percent, primarily as a result of store closings and a decline in front-end same store sales.

Same store sales for the quarter decreased 0.5 percent over the prior 13-week third quarter consisting of a 2.5 per cent decrease on the front end and a 0.4 percent increase in pharmacy.  The number of prescriptions filled increased 1.5 percent.  Prescription sales accounted for 68.6 percent of total drugstore sales, and third party prescription revenue was 96.2 percent of pharmacy sales.

Net loss for the quarter was $83.9 million or $.10 per diluted share compared to last year’s third quarter net loss of $243.1 million or $.30 per diluted share.  Lower charges related to store closings and impairment, lower LIFO expense and the absence of a tax valuation allowance in this year’s third quarter contributed to the decrease in net loss.

Adjusted EBITDA was $254.2 million or 4.0 percent of revenues compared to $259.6 million or 4.0 percent of revenues for the like period last year.  Improvement in SG&A offset most of the decrease in gross profit caused by the decline in sales and gross margin rate.  As previously disclosed, adjusted EBITDA for the prior year third quarter reflects a $7.6 million reclassification of accounts receivable securitization fees as interest expense to make it comparable to the current period.

In the third quarter, the company opened 3 stores, relocated 13 stores, remodeled 3 stores and closed 14 stores. Stores in operation at the end of the third quarter totaled 4,801.

Other Events During the Quarter

As previously announced, in October Rite Aid refinanced its first and second lien accounts receivable securitization facilities due September 2010, completing the refinancing of all of its September 2010 debt maturities.  The company now has no major debt maturities until September 2012.

Subsequent Events

On December 10, 2009 Rite Aid entered into an extension of its pharmaceutical supply agreement with McKesson Corporation.  McKesson will continue to supply Rite Aid with primarily all of its branded drugs, some of its generic drugs and specialty pharmaceuticals until April 1, 2013.

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Rite Aid FY 2010 Q3 Press Release - page 3

Rite Aid Narrows Fiscal 2010 Outlook

With only the fourth quarter of fiscal 2010 left to report, we have narrowed our fiscal 2010 guidance for total sales, same store sales, adjusted EBITDA and net loss and reduced our guidance for capital expenditures.  We continue to expect total sales to be between $25.6 billion and $25.9 billion.  Same stores sales are expected to range from a decrease of 1.0 percent to an increase of 0.5 percent over fiscal 2009.  Adjusted EBITDA (which is reconciled to net loss on the attached table) is expected to be between $925 million and $975 million.  Net loss is now expected to be between $413 million and $542 million or a loss per diluted share of $.50 to $.66.  Capital expenditures are expected to be $220 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 for 48 hours beginning at 12 p.m. Eastern Time today until 11:59 p.m. Eastern Time on December 19.  The playback number is 1-800-642-1687 from within the U.S. and Canada or 1-706-645-9291 from outside the U.S. and Canada with the eight-digit reservation number 44144544.

Rite Aid Corporation is one of the nation’s leading drugstore chains with more than 4,800 stores in 31 states and the District of Columbia and fiscal 2009 annual revenues of more than $26.3 billion.  Information about Rite Aid, including corporate background and press releases, is available through the company’s website at www.riteaid.com.

This press release contains forward-looking statements, including guidance, which are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements include our high level of indebtedness, our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our senior secured credit facility and other debt agreements; general economic conditions, inflation and interest rate movements; our ability to improve the operating performance of our stores in accordance with our long term strategy, our ability to realize same store sales growth; our ability to hire and retain pharmacists and other store personnel; the efforts of private and public third-party payors to reduce prescription drug reimbursements and encourage mail order; competitive pricing pressures, including aggressive promotional activity from our competitors; decisions to close additional stores and distribution centers, which could result in further charges to our operating statement; our ability to manage expenses; our ability to realize the benefits from actions to further reduce costs and investment in working capital; continued consolidation of the drugstore industry; changes in state or federal legislation or regulations and the outcome of lawsuits and governmental investigations. Consequently, all of the forward-looking statements made in this press release, including our guidance, 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".

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Rite Aid FY 2010 Q3 Press Release – page 4

See the attached table for a reconciliation of a non-GAAP financial measure, Adjusted EBITDA to net income (loss), the most comparable GAAP financial measure. We define Adjusted EBITDA as net income (loss) from operations excluding the impact of income taxes, interest expense and securitization costs, depreciation and amortization, LIFO adjustments, charges or credits for store closing and impairment, inventory write-downs related to closed stores, stock-based compensation expense, debt modifications and retirements, sale of assets and investments, and other non-recurring items. We reference this non-GAAP financial measure frequently in our decision-making because it provides supplemental information that facilitates internal comparisons to the historical operating performance of prior periods and external comparisons to competitors’ historical operating performance. In addition, incentive compensation is based on Adjusted EBITDA and we base our forward-looking estimates on Adjusted EBITDA to facilitate quantification of planned business activities and enhance subsequent follow-up with comparisons of actual to planned Adjusted EBITDA. We include this non-GAAP financial measure in our earnings announcement in order to provide transparency to our investors and enable investors to better compare our operating performance with the operating performance of our competitors.

###
 
 
 
RITE AID CORPORATION AND SUBSIDIARIES
  
   
CONSOLIDATED BALANCE SHEETS
  
(Dollars in thousands)
  
(unaudited)
  
             
    November 28, 2009     February 28, 2009  
ASSETS
            
Current assets:
            
Cash and cash equivalents
   $ 156,629     $ 152,035  
Accounts receivable, net
     1,082,188       526,742  
Inventories, net of LIFO reserve of $790,777 and $746,467
     3,575,767       3,509,494  
Prepaid expenses and other current assets
     100,991       176,661  
Total current assets
     4,915,575       4,364,932  
Property, plant and equipment, net
     2,390,051       2,587,356  
Other intangibles, net
     872,428       1,017,011  
Other assets
     419,878       357,241  
Total assets
   $ 8,597,932     $ 8,326,540  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
                
Current liabilities:
                
Current maturities of long-term debt and lease financing obligations
   $ 51,148     $ 40,683  
Accounts payable
     1,341,955       1,256,982  
Accrued salaries, wages and other current liabilities
     1,085,394       1,004,762  
Total current liabilities
     2,478,497       2,302,427  
Long-term debt, less current maturities
     6,232,129       5,801,230  
Lease financing obligations, less current maturities
     138,366       169,796  
Other noncurrent liabilities
     1,227,091       1,252,739  
Total liabilities
     10,076,083       9,526,192  
                 
Commitments and contingencies
     -       -  
Stockholders' deficit:
                
Preferred stock - Series G
     1       1  
Preferred stock - Series H
     150,053       143,498  
Common stock
     887,777       886,113  
Additional paid-in capital
     4,273,878       4,265,211  
Accumulated deficit
     (6,751,005 )     (6,452,696 )
Accumulated other comprehensive loss
     (38,855 )     (41,779 )
Total stockholders' deficit
     (1,478,151 )     (1,199,652 )
Total liabilities and stockholders' deficit
     8,597,932     $ 8,326,540  
 
 
RITE AID CORPORATION AND SUBSIDIARIES
  
   
CONSOLIDATED STATEMENTS OF OPERATIONS
  
(Dollars in thousands, except per share amounts)
  
(unaudited)
  
   
   
   
Thirteen weeks ended November 28, 2009
    
Thirteen weeks ended November 29, 2008
  
Revenues
   $ 6,352,283     $ 6,468,601  
Costs and expenses:
                
Cost of goods sold
     4,665,871       4,743,089  
Selling, general and administrative expenses
     1,605,213       1,711,873  
Lease termination and impairment charges
     35,072       101,635  
Interest expense
     135,770       126,615  
Gain on sale of assets, net
     (1,459 )     (1,008 )
                 
      6,440,467       6,682,204  
                 
Loss before income taxes
     (88,184 )     (213,603 )
Income tax (benefit) expense
     (4,322 )     29,522  
Net loss
   $ (83,862 )   $ (243,125 )
                 
Basic and diluted loss per share:
                
                 
Numerator for loss per share:
                
Net loss
   $ (83,862 )   $ (243,125 )
Accretion of redeemable preferred stock
     (26 )     (26 )
Cumulative preferred stock dividends
     (2,218 )     (5,591 )
Loss attributable to common stockholders - basic and diluted
   $ (86,106 )   $ (248,742 )
                 
                 
                 
Basic and diluted weighted average shares
     881,371       840,554  
                 
Basic and diluted loss per share
   $ (0.10 )   $ (0.30 )
 
 
RITE AID CORPORATION AND SUBSIDIARIES
  
   
CONSOLIDATED STATEMENTS OF OPERATIONS
  
(Dollars in thousands, except per share amounts)
  
(unaudited)
  
   
   
   
Thirty-nine weeks ended November 28, 2009
    
Thirty-nine weeks ended November 29, 2008
  
Revenues
   $ 19,205,331     $ 19,581,701  
Costs and expenses:
                
Cost of goods sold
     14,056,578       14,269,769  
Selling, general and administrative expenses
     4,961,798       5,285,478  
Lease termination and impairment charges
     130,810       189,722  
Interest expense
     374,076       363,420  
Loss on debt modifications and retirements, net
     993       39,905  
(Gain) loss on sale of assets, net
     (25,598 )     11,939  
                 
      19,498,657       20,160,233  
                 
Loss from continuing operations before income taxes
     (293,326 )     (578,532 )
Income tax expense
     4,994       39,861  
                 
Net loss from continuing operations
     (298,320 )     (618,393 )
                 
Loss from discontinued operations
     -       (3,369 )
                 
Net loss
   $ (298,320 )   $ (621,762 )
                 
Basic and diluted loss per share:
                
                 
Numerator for loss per share:
                
Net loss
   $ (298,320 )   $ (621,762 )
Accretion of redeemable preferred stock
     (77 )     (77 )
Cumulative preferred stock dividends
     (6,556 )     (17,081 )
Loss attributable to common stockholders - basic and diluted
   $ (304,953 )   $ (638,920 )
                 
                 
                 
Basic and diluted weighted average shares
     880,577       833,855  
                 
Basic and diluted loss per share
   $ (0.35 )   $ (0.77 )
 
 
RITE AID CORPORATION AND SUBSIDIARIES
  
   
SUPPLEMENTAL OPERATING AND CASH FLOW INFORMATION
  
(Dollars in thousands, except per share amounts)
  
(unaudited)
  
   
   
   
Thirteen weeks ended November 28, 2009
    
Thirteen weeks ended November 29, 2008
  
             
SUPPLEMENTAL OPERATING INFORMATION
            
             
Revenues
   $ 6,352,283     $ 6,468,601  
Cost of goods sold
     4,665,871       4,743,089  
Gross profit
     1,686,412       1,725,512  
LIFO charge
     14,770       59,812  
FIFO gross profit
     1,701,182       1,785,324  
                 
Gross profit as a percentage of revenues
     26.55 %     26.68 %
LIFO charge as a percentage of revenues
     0.23 %     0.92 %
FIFO gross profit as a percentage of revenues
     26.78 %     27.60 %
                 
Selling, general and administrative expenses
     1,605,213       1,711,873  
Selling, general and administrative expenses as a percentage of revenues
     25.27 %     26.46 %
                 
Cash interest expense
     124,495       118,838  
Non-cash interest expense
     11,275       7,777  
Total interest expense
     135,770       126,615  
Securitization costs (included in SG&A)
     8,362       7,613  
Total interest expense and securitization costs
     144,132       134,228  
                 
                 
Adjusted EBITDA
     254,192       259,635  
Adjusted EBITDA as a percentage of revenues
     4.00 %     4.01 %
                 
Net loss
     (83,862 )     (243,125 )
Net loss as a percentage of revenues
     -1.32 %     -3.76 %
                 
Total debt
     6,421,643       6,347,653  
Accounts receivable securitization facility
     -       545,000  
Total debt including accounts receivable facility
     6,421,643       6,892,653  
                 
                 
SUPPLEMENTAL CASH FLOW INFORMATION
                
                 
Payments for property, plant and equipment
     43,342       98,505  
Intangible assets acquired
     2,214       13,990  
Total cash capital expenditures
     45,556       112,495  
Equipment received for noncash consideration
     1,612       1,646  
Equipment financed under capital leases
     -       3,477  
Gross capital expenditures
   $ 47,168     $ 117,618  
 
 
RITE AID CORPORATION AND SUBSIDIARIES
  
   
SUPPLEMENTAL OPERATING AND CASH FLOW INFORMATION
  
(Dollars in thousands, except per share amounts)
  
(unaudited)
  
   
   
   
Thirty-nine weeks ended November 28, 2009
    
Thirty-nine weeks ended November 29, 2008
  
             
SUPPLEMENTAL OPERATING INFORMATION
            
             
Revenues
   $ 19,205,331     $ 19,581,701  
Cost of goods sold
     14,056,578       14,269,769  
Gross profit
     5,148,753       5,311,932  
LIFO charge
     44,310       90,000  
FIFO gross profit
     5,193,063       5,401,932  
                 
Gross profit as a percentage of revenues
     26.81 %     27.13 %
LIFO charge as a percentage of revenues
     0.23 %     0.46 %
FIFO gross profit as a percentage of revenues
     27.04 %     27.59 %
                 
Selling, general and administrative expenses
     4,961,798       5,285,478  
Selling, general and administrative expenses as a percentage of revenues
     25.84 %     26.99 %
                 
Cash interest expense
     345,079       344,651  
Non-cash interest expense
     28,997       18,769  
Total interest expense
     374,076       363,420  
Securitization costs (included in SG&A)
     36,862       16,922  
Total interest expense and securitization costs
     410,938       380,342  
                 
                 
Adjusted EBITDA
     719,923       720,624  
Adjusted EBITDA as a percentage of revenues
     3.75 %     3.68 %
                 
Net loss
     (298,320 )     (621,762 )
Net loss as a percentage of revenues
     -1.55 %     -3.18 %
                 
Total debt
     6,421,643       6,347,653  
Accounts receivable securitization facility
     -       545,000  
Total debt including accounts receivable facility
     6,421,643       6,892,653  
                 
                 
SUPPLEMENTAL CASH FLOW INFORMATION
                
                 
Payments for property, plant and equipment
     124,541       401,460  
Intangible assets acquired
     5,661       75,454  
Total cash capital expenditures
     130,202       476,914  
Equipment received for noncash consideration
     9,450       23,878  
Equipment financed under capital leases
     185       7,813  
Gross capital expenditures
   $ 139,837     $ 508,605  
 
 
 
SUPPLEMENTAL INFORMATION
  
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
  
(In thousands)
  
   
   
   
Thirteen weeks ended November 28, 2009
    
Thirteen weeks ended November 29, 2008
  
             
             
Reconciliation of net loss to adjusted EBITDA:
            
Net loss
   $ (83,862 )   $ (243,125 )
Adjustments:
                
Interest expense and securitization costs (a)
     144,132       134,228  
Income tax (benefit) expense
     (4,322 )     29,522  
Depreciation and amortization
     132,547       145,407  
LIFO charges (b)
     14,770       59,812  
Lease termination and impairment charges
     35,072       101,635  
Stock-based compensation expense
     5,826       9,718  
Gain on sale of assets, net
     (1,459 )     (1,008 )
Incremental acquisition costs (c)
     -       8,551  
Closed store liquidation expense (d)
     1,608       3,775  
Severance costs
     135       10,507  
Other (e)
     9,745       613  
Adjusted EBITDA (a)
   $ 254,192     $ 259,635  
Percent of revenues
     4.00 %     4.01 %
 
 
 
   
Notes:
         
     
(a)
Securitization costs of $7,613 for the thirteen weeks ended November 29, 2008 have been excluded from Adjusted EBITDA
         
     
(b)
Represents non-cash charges to value our inventories under the last-in first-out ("LIFO") method.
         
     
(c)
Represents incremental costs related to the acquisition of Jean Coutu, USA.
         
     
(d)
Represents costs to liquidate inventory at stores that are in the process of closing.
         
     
(e)
Includes charges of $6,136 for the thirteen weeks ended November 28, 2009 related to the refinancing of accounts receivable securitization facilities
 
 
 
SUPPLEMENTAL INFORMATION
  
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
  
(In thousands)
  
   
   
   
Thirty-nine weeks ended November 28, 2009
    
Thirty-nine weeks ended November 29, 2008
  
             
             
Reconciliation of net loss to adjusted EBITDA:
            
Net loss
   $ (298,320 )   $ (621,762 )
Adjustments:
                
Interest expense and securitization costs (a)
     410,938       380,342  
Income tax expense
     4,994       39,861  
Depreciation and amortization
     404,307       441,349  
LIFO charges (b)
     44,310       90,000  
Lease termination and impairment charges
     130,810       189,722  
Stock-based compensation expense
     18,335       25,921  
(Gain) loss on sale of assets, net
     (25,598 )     11,987  
Loss on debt modifications and retirements, net
     993       39,905  
Incremental acquisition costs (c)
     -       85,427  
Closed store liquidation expense (d)
     9,477       14,310  
Severance costs
     6,184       12,590  
Other (e)
     13,493       10,972  
Adjusted EBITDA (a)
   $ 719,923     $ 720,624  
Percent of revenues
     3.75 %     3.68 %
                 
                 
Results of discontinued operations (f)
     -       1,882  
Adjusted EBITDA from continuing operations
   $ 719,923     $ 722,506  
 
 
 
   
Notes:
       
     
(a)
Securitization costs of $16,922 for the thirty-nine weeks ended November 29, 2008 have been excluded from Adjusted EBITDA
         
     
(b)
Represents non-cash charges to value our inventories under the last-in first-out ("LIFO") method.
         
     
(c)
Represents incremental costs related to the acquisition of Jean Coutu, USA.
         
     
(d)
Represents costs to liquidate inventory at stores that are in the process of closing.
         
     
(e)
Includes charges of $6,136 for the thirty-nine weeks ended November 28, 2009 related to the refinancing of accounts receivable securitization facilities
         
     
(f)
Represents losses from our disposed Las Vegas market that are included in prior year's Adjusted EBITDA.
 
 
RITE AID CORPORATION AND SUBSIDIARIES
  
   
CONSOLIDATED STATEMENTS OF CASH FLOWS
  
(Dollars in thousands)
  
(unaudited)
  
   
   
   
   
Thirteen weeks ended November 28, 2009
    
Thirteen weeks ended November 29, 2008
  
             
             
OPERATING ACTIVITIES:
            
Net loss
   $ (83,862 )   $ (243,125 )
Adjustments to reconcile to net cash (used in) provided by operating activities:
                
Depreciation and amortization
     132,547       145,407  
Lease termination and impairment charges
     35,072       101,635  
LIFO charges
     14,770       59,812  
Gain on sale of assets, net
     (1,459 )     (1,008 )
Stock-based compensation expense
     5,826       9,718  
Changes in deferred taxes
     -       27,055  
Changes in operating assets and liabilities:
                
Net (repayments to) proceeds from accounts receivable securitization
     (400,000 )     45,000  
Accounts receivable
     (65,332 )     (44,661 )
Inventories
     (166,340 )     (86,844 )
Accounts payable
     91,643       (69,235 )
Other assets and liabilities, net
     2,084       100,587  
Net cash (used in) provided by operating activities
     (435,051 )     44,341  
INVESTING ACTIVITIES:
                
Payments for property, plant and equipment
     (43,342 )     (98,505 )
Intangible assets acquired
     (2,214 )     (13,990 )
Proceeds from dispositions of assets and investments
     3,510       4,275  
Net cash used in investing activities
     (42,046 )     (108,220 )
FINANCING ACTIVITIES:
                
Proceeds from issuance of long-term debt
     396,703       1,865  
Net proceeds from revolver
     124,000       133,000  
Principal payments on long-term debt
     (7,284 )     (6,972 )
Change in zero balance cash accounts
     13,448       (84,436 )
Net proceeds from the issuance of common stock
     30       -  
Payments for preferred stock dividends
     -       (978 )
Financing costs paid
     (14,178 )     -  
Net cash provided by financing activities
     512,719       42,479  
Increase (decrease) in cash and cash equivalents
     35,622       (21,400 )
Cash and cash equivalents, beginning of period
     121,007       170,260  
Cash and cash equivalents, end of period
   $ 156,629     $ 148,860  
 
 

RITE AID CORPORATION AND SUBSIDIARIES
  
   
CONSOLIDATED STATEMENTS OF CASH FLOWS
  
(Dollars in thousands)
  
(unaudited)
  
   
   
   
Thirty-nine weeks ended November 28, 2009
    
Thirty-nine weeks ended November 29, 2008
  
   
   
 OPERATING ACTIVITIES:
            
 Net loss
   $ (298,320 )   $ (621,762 )
 Adjustments to reconcile to net cash (used in) provided by operating activities:
                
 Depreciation and amortization
     404,307       441,349  
 Lease termination and impairment charges
     130,810       189,722  
 LIFO charges
     44,310       90,000  
 (Gain) loss on sale of assets, net
     (25,598 )     11,987  
 Stock-based compensation expense
     18,335       25,921  
 Loss on debt modifications and retirements, net
     993       39,905  
 Proceeds from insured loss
     1,380       -  
 Changes in deferred taxes
     -       27,055  
 Changes in operating assets and liabilities:
                
 Net (repayments to) proceeds from accounts receivable securitization
     (555,000 )     110,000  
 Accounts receivable
     (8,446 )     (36,916 )
 Inventories
     (111,301 )     (182,038 )
 Accounts payable
     128,646       (52,264 )
 Other assets and liabilities, net
     45,575       (7,827 )
 Net cash (used in) provided by operating activities
     (224,309 )     35,132  
 INVESTING ACTIVITIES:
                
 Payments for property, plant and equipment
     (124,541 )     (401,460 )
 Intangible assets acquired
     (5,661 )     (75,454 )
 Expenditures for business acquisition
     -       (112 )
 Proceeds from sale-leaseback transactions
     6,532       161,553  
 Proceeds from dispositions of assets and investments
     39,208       22,904  
 Net cash used in investing activities
     (84,462 )     (292,569 )
 FINANCING ACTIVITIES:
                
 Proceeds from issuance of long-term debt
     1,303,307       900,629  
 Net (payments to) proceeds from revolver
     (714,000 )     297,000  
 Principal payments on long-term debt
     (167,174 )     (862,162 )
 Proceeds from financing secured by owned property
     -       31,266  
 Change in zero balance cash accounts
     (49,475 )     (64,376 )
 Net proceeds from the issuance of common stock
     30       1,117  
 Payments for preferred stock dividends
     -       (3,466 )
 Financing costs paid
     (59,323 )     (49,473 )
 Net cash provided by financing activities
     313,365       250,535  
 Increase (decrease) in cash and cash equivalents
     4,594       (6,902 )
 Cash and cash equivalents, beginning of period
     152,035       155,762  
 Cash and cash equivalents, end of period
   $ 156,629     $ 148,860  
 
 
RITE AID CORPORATION AND SUBSIDIARIES
  
SUPPLEMENTAL INFORMATION
  
RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED EBITDA GUIDANCE
  
YEAR ENDING FEBRUARY 27, 2010
  
(In thousands, except per share amounts)
  
   
   
   
Guidance Range
  
   
Low
    
High
  
             
Sales
   $ 25,600,000     $ 25,900,000  
                 
Same store sales
     -1.00 %     0.50 %
                 
Gross capital expenditures
   $ 220,000     $ 220,000  
                 
Reconciliation of net loss to adjusted EBITDA:
                
Net loss
   $ (542,000 )   $ (413,000 )
Adjustments:
                
Interest expense and securitization costs
     560,000       555,000  
Income tax expense
     17,000       10,000  
Depreciation and amortization
     545,000       535,000  
LIFO charge
     70,000       50,000  
Store closing, liquidation, and impairment charges
     250,000       230,000  
Stock-based compensation expense
     25,000       20,000  
Other
     0       (12,000 )
Adjusted EBITDA
   $ 925,000     $ 975,000  
                 
Diluted loss per share
   $ (0.66 )   $ (0.50 )