Rite Aid Reports Fiscal 2018 Fourth Quarter and Full Year Results

Fourth Quarter Net Loss from Continuing Operations of $483.7 Million or $0.46 Per Diluted Share, Compared to the Prior Year Fourth Quarter Net Loss of $25.1 Million or $0.02 Per Diluted Share
Fourth Quarter Net Loss includes $325 million of income tax expense relating to the revaluation of the company’s deferred tax assets in connection with the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”) and a goodwill impairment charge of $191 million, net of tax
Fourth Quarter Adjusted Net Loss from Continuing Operations Per Diluted Share of $0.01, Compared to the Prior Year Fourth Quarter Adjusted Net Income Per Diluted Share of $0.02
Fourth Quarter Adjusted EBITDA from Continuing Operations of $157.4 Million, Compared to the Prior Year Fourth Quarter Adjusted EBITDA of $167.6 Million;
Fourth Quarter Pro-forma Adjusted EBITDA from Continuing Operations of $173.2 Million, Compared to Prior Year Fourth Quarter Pro-forma Adjusted EBITDA from Continuing Operations of $180.8 Million
Prior Year Included Benefit of 53rd Week
HSR Waiting Period for Albertsons Companies, Inc. (“Albertsons”) Merger Expired on March 28, 2018
Sale of Stores to Walgreens Boots Alliance, Inc. (“WBA”) Completed on March 27, 2018

Rite Aid Corporation (NYSE: RAD) today reported operating results for its fourth quarter and fiscal year ended March 3, 2018.

For the fourth quarter, the company reported net loss from continuing operations of $483.7 million, or $0.46 per diluted share, Adjusted net loss from continuing operations of $10.3 million, or $0.01 per diluted share, Adjusted EBITDA from continuing operations of $157.4 million, or 2.9 percent of revenues and pro-forma Adjusted EBITDA from continuing operations of $173.2 million.

For the fourth quarter of fiscal 2018 the company reported net income of $767.1 million, or $0.73 per diluted share. For the full year, the company reported net income of $943.5 million, or $0.90 per diluted share. Net income for the fourth quarter and the full year of fiscal 2018 includes an after-tax gain of approximately $1.2 billion and $1.3 billion, respectively, relating to the 1,554 and 1,651 stores and related assets sold to WBA. As of March 27, 2018, Rite Aid has completed the sale of all 1,932 stores and related assets to WBA. The transfer of the three distribution centers and related inventory is expected to begin after September 1, 2018. As a result of the proceeds received from the store sales, Rite Aid’s debt related to continuing operations, net of cash, was $2.9 billion as of March 3, 2018.

“During the fourth quarter, we made significant progress in a number of areas: our Retail Pharmacy Segment delivered strong results with an increase in Adjusted EBITDA over the prior year; our Pharmacy Services Segment is off to a strong start in the new commercial selling season; shortly after the quarter ended, we completed the asset sale of 1,932 stores to WBA; and we entered into a definitive merger agreement with Albertsons Companies to transform Rite Aid into a truly differentiated leader in food, health and wellness,” said Rite Aid Chairman and CEO John Standley.

Rite Aid President and Chief Operating Officer Kermit Crawford added: “We are pleased that we’ve been able to drive improved operational performance through a stabilization of reimbursement rates, improvements in drug purchasing costs and a record number of immunizations which helped us deliver a higher pharmacy margin for the quarter. These areas of our business will continue to be key priorities as we begin our new fiscal year and work together to continue building momentum.”

Fourth Quarter Summary
Revenues from continuing operations for the quarter were $5.4 billion compared to revenues from continuing operations of $5.9 billion in the prior year’s fourth quarter, a decrease of $509.1 million or 8.6 percent. Retail Pharmacy Segment revenues were $4.0 billion and decreased 10.1 percent compared to the prior year period primarily as a result of the extra week in the prior year’s fourth quarter and a decline in same store sales. Revenues in the Pharmacy Services Segment were $1.4 billion, a decrease of 4.3 percent compared to the prior year period, which was due to a decline in commercial business and changes in its composition of Medicare Part D membership.

Same store sales from Retail Pharmacy continuing operations for the quarter decreased 1.7 percent over the prior year, consisting of a 2.3 percent decrease in pharmacy sales and a 0.6 percent decrease in front-end sales. Pharmacy sales included an approximate 138 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, decreased 1.8 percent over the prior year period due in part to exclusion from certain pharmacy networks that Rite Aid participated in the prior year. Prescription sales from continuing operations accounted for 64.9 percent of total drugstore sales.

Net loss from continuing operations was $483.7 million or $0.46 per diluted share compared to last year’s fourth quarter net loss from continuing operations of $25.1 million or $0.02 per diluted share. The decline in operating results was due primarily to $325 million of income tax expense relating to the revaluation of the company’s deferred tax assets as a result of the 2017 Tax Act and a charge of $191 million, net of tax, for the impairment of goodwill related to our Pharmacy Services Segment. The effect of the goodwill impairment charge is to adjust the book value of our Pharmacy Services Segment to $2.1 billion, which was our basis in the segment at the date of acquisition. Also impacting results was a decline in Adjusted EBITDA, higher WBA deal related costs, and higher lease termination and impairment charges, partially offset by a higher LIFO credit.
more detail at:  https://www.riteaid.com/corporate/news?p_p_id=riteaidpressreleases_WAR_riteaidpressreleasesportlet&p_p_lifecycle=0&p_p_state=normal&p_p_mode=view&p_p_col_id=column-3&p_p_col_pos=2&p_p_col_count=3&_riteaidpressreleases_WAR_riteaidpressreleasesportlet_action=getNewsRoomDetail&itemNumber=2106

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