Rite Aid — Q2 FY2023 Earnings Presentation
23 slides from Rite Aid's earnings presentation, Sep 29, 2022
Slide 1: Second Quarter Fiscal 2023 Earnings Conference Call
SECOND QUARTER FISCAL 2023 Earnings Conference Call Heyward Donigan Chief Executive Officer Matt Schroeder Chief Financial Officer 9/29/2022
Slide 2: Cautionary Statement Regarding Forward Looking Statements
Cautionary Statement Regarding Forward Looking Statements Deepen Grow by Driven Initiatives in Core Areas Create Leverage Assets to Develop New Offering 2 Statements in this presentation that are not historical, are forward - looking statements made pursuant to the safe harbor provisions of the Priv
Slide 3: Non-GAAP Financial Measures
Deepen Grow by Driven Initiatives in Core Areas Create Leverage Assets to Develop New Offering 3 Non - GAAP Financial Measures The following presentation includes the non - GAAP financial measures Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share, Adjusted EBITDA, Adjusted EBI
Slide 4: Q2FY23 Financial Review
Q2FY23 FINANCIAL REVIEW
Slide 5: Key Second Quarter FY2023 Highlights
Key Second Quarter FY2023 Highlights 5 • $5.9B Total revenues • $ 78.5 M Adjusted EBITDA* • 5.3% Increase in same store a cute scripts (excluding COVID - 19 vaccines) • * Adjusted EBITDA reconciliation located in the Appendix
Slide 6: Key Second Quarter FY2023 Highlights: Retail Pharmacy and Elixir
Key Second Quarter FY2023 Highlights 6 Retail Pharmacy: • $4.23B in retail revenues • $31.5M Adjusted EBITDA* • Same store sales increased 5.6% • Total same store scripts increased 2.1%, excluding benefit from COVID - 19 vaccines • Same store pharmacy sales increased 8.0% • Same store maintenance sc
Slide 7: Key Growth Initiatives
Key Growth Initiatives Deepen Grow by Driven Initiatives in Core Areas • Improve adherence: • 600K new members enrolled in our courtesy refill program this quarter • Added $10M in EBITDA this year • Digital: • Making investments in digital • Demonstrated meaningful digital and omnichannel engagement
Slide 8: On the Rite Path For FY2023
8 8 On the Rite Path For FY2023 • Reduced total company Adjusted EBITDA SG&A expenses by $45M in Q2 • Reduced Elixir Adjusted EBITDA SG&A expenses by $4.4M in Q2 • Reviewing payroll, store expenses and corporate administration expenses to drive additional SG&A efficiencies • $40M debt reduction from
Slide 9: Guidance
GUIDANCE
Slide 10: Updated FY2023 Guidance
Updated FY2023 Guidance • $23.6B - $24.0B Total revenues • $450M – $490M Adjusted EBITDA • Retail Pharmacy $305M - $335M • Elixir $145M - $155M • ($1.52) – ($0.97) Diluted adjusted net loss per share • ~$225M Capital expenditures • Expect to generate positive free cash flow in FY23
Slide 11: Appendix
APPENDIX
Slide 12: Q2 Fiscal 2023 Summary
Q2 Fiscal 2023 Summary Create Leverage Assets to Develop New Offering 13 ($ in millions, except per share amounts) 13 Weeks Ended August 27, 2022 13 Weeks Ended August 28 , 2021 Revenues $ 5,901.1 $ 6,113.0 Net Loss $ (331.3) $ (100.3) Net loss per Diluted Share $ (6.07) $ (1.86) Adjusted net loss p
Slide 13: Q2 Fiscal 2023 Reconciliation of Net Loss to Adjusted EBITDA
Q2 - Fiscal 2023 Reconciliation of Net Loss to Adjusted EBITDA Create Leverage Assets to Develop New Offering 14 ($ in thousands) 13 Weeks Ended August 27, 2022 13 Weeks Ended August 28, 2021 Net loss $ (331,290) $ (100,301) Adjustments: • Interest expense 52,533 48,592 • Income tax expense 11,967 3
Slide 14: Q2 Fiscal 2023 Reconciliation of Net Loss to Adjusted Net Loss
Q2 - Fiscal 2023 Reconciliation of Net Loss to Adjusted Net Loss Create Leverage Assets to Develop New Offering 15 ($ in thousands, except per share amounts) 13 Weeks Ended August 27, 2022 13 Weeks Ended August 28, 2021 Net loss $ (331,290) $ (100 ,301) Add back - Income tax expense 11,967 3,310 Los
Slide 15: Q2 Fiscal 2023 Summary – Retail Pharmacy Segment
Q2 - Fiscal 2023 Summary – Retail Pharmacy Segment Create Leverage Assets to Develop New Offering 16 ($ in millions) Revenues $ 4,231.8 $ 4,277.2 Adjusted EBITDA Gross Profit (1) $ 1,056.1 24.96% $ 1,138.9 26.63% Adjusted EBITDA SG&A (1) $ 1,024.6 24.21% $ 1,069.5 25.01% Adjusted EBITDA $ 31.5 0.74%
Slide 16: Reconciliation of Adj. EBITDA Gross Profit – Retail Pharmacy Segment
Reconciliation of Adj. EBITDA Gross Profit – Retail Pharmacy Segment Create Leverage Assets to Develop New Offering 17 ($ in millions) 13 Weeks Ended August 27, 2022 13 Weeks Ended August 28, 2021 Revenues $ 4,231.8 $ 4,277.2 Gross Profit 1,043.0 1,140.4 Addback: LIFO charge (credit) 10.1 (4.0) Depr
Slide 17: Reconciliation of Adj. EBITDA SG&A – Retail Pharmacy Segment
Reconciliation of Adj. EBITDA SG&A – Retail Pharmacy Segment Create Leverage Assets to Develop New Offering 18 ($ in millions) 13 Weeks Ended August 27, 2022 13 Weeks Ended August 28 , 2021 Revenues $ 4,231.8 $ 4,277.2 Selling, general and administrative expenses 1,100.8 1,163.4 Less: Depreciation a
Slide 18: Pharmacy Services Segment Results
Pharmacy Services Segment Results 19 ($ in millions) Revenues $ 1,727.2 $ 1,898.2 Cost of Revenues 1,615.8 1,792.6 Gross Profit 111 .4 105.6 Selling, General and Administrative Expenses (92.8) (104.4) Addback: Depreciation and Amortization 11.9 12.8 Restructuring - related costs 4.4 7.0 Litigation a
Slide 19: Comparable Store Sales Growth
Comparable Store Sales Growth 10 Create Leverage Assets to Develop New Offering 20 FY2022 FY2023 Excluding cigarette and tobacco products Q2 2022 Q3 2022 Q4 2022 5.0% 5.9% 10.7% 6.6% 8.0% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 RX SALES - 2.8% 0.4% 2.7% - 0.5% - 0.3% - 2.4% 1.0% 3.2% 0.0% 0.2% Q1 20
Slide 20: Capitalization Table
Capitalization Table Create Leverage Assets to Develop New Offering 21 ($ in thousands) August 27, 2022 February 26, 2022 Secured Debt: Senior secured revolving credit facility due August 2026 1,370,026$ 690,990$ FILO Term Loan due August 2026 347,921 347,656 1,717,947 1,038,646 Second Lien Secured
Slide 21: FY 2023 Guidance
Expand Growth in New Markets 23 FY 2023 Guidance ($ in thousands) Total Revenues $ 23,600,000 $ 24,000,000 Pharmacy Services Segment Revenues $ 6,250,000 $ 6,350,000 Gross Capital Expenditures $ 225,000 $ 225,000 Reconciliation of net loss to adjusted EBITDA: Net loss $ (520,300) $ (477,300) Adjustm
Slide 22: FY 2023 Guidance (cont.)
FY 2023 Guidance (cont.) Expand Growth in New Markets 24 FY 2023 Guidance ($ in thousands) Guidance Range Low High Net loss $ (520,300) $ (477,300) Add back - income tax benefit (7,000) (10,000) Loss before income taxes (527,300) (487,300) Adjustments: Amortization expense 73,000 73,000 LIFO charge
Slide 23: Rite Aid
RITE / AID