Rite Aid — Q2 FY2022 Earnings Presentation
24 slides from Rite Aid's earnings presentation, Sep 23, 2021
Slide 1: Second Quarter Fiscal 2022 Earnings Conference Call
SECOND QUARTER FISCAL 2022 Earnings conference call Heyward Donigan Chief Executive Officer Jim Peters Chief Operating Officer Matt Schroeder Chief Financial Officer 9/23/21
Slide 2: Cautionary Statement Regarding Forward Looking Statements
Cautionary Statement Regarding Forward Looking Statements Statements in this presentation that are not historical, 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, s
Slide 3: Non-GAAP Financial Measures
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 EBITDA Gross Profit and Adjusted EBITDA SG&A, which are non - GAAP financial measures . See the atta
Slide 4: Q2 FY2022 Financial Review
Q2 FY2022 FINANCIAL REVIEW
Slide 5: Q2 FY2022 at a Glance
Q2 FY2022 at a Glance • 2.2% Increase in total revenues • $106M Adjusted EBITDA* • 6.5% Increase in retail segment revenues • 7.1% Increase in number of prescriptions filled (adjusted to 30 day equivalents) • 26% Increase in Elixir Adjusted EBITDA* • Administered approximately 2.5 million COVID - 19
Slide 6: Key Second Quarter FY2022 Highlights
Key Second Quarter FY2022 Highlights Retail Pharmacy: • 6.5% total growth in retail revenues • Same store sales increased 2.6% • Administered over 700K COVID - 19 tests • Acute prescription count increased 1.5%, excluding benefit from COVID - 19 vaccines • Maintenance prescription count increased 2.
Slide 7: Continued Progress On Our Key Strategic Pillars
Continued Progress On Our Key Strategic Pillars • Appointed Lance Neil as Chief Operator Officer • Selecting a single rebate aggregation partner for health plan and PBM business to improve pricing • Integration between Rite Aid and Elixir back office functions nearly complete • Putting anchored limi
Slide 8: New York State Back to School COVID-Testing Program
8 New York State “Back to School” COVID - 19 Testing Program • No Cost testing for New York students K - 12 • Partnered with US Department of Health and Human Services (HHS) and BioReference Laboratories, Inc. • COVID - 19 testing at one of the 115 Rite Aid drive - thru NY locations • Support for te
Slide 9: COVID Update
9 COVID - 19 Update • Approximately 2.5M COVID - 19 Vaccines Administered in Second Quarter • 8M vaccinations total since we began administering late last year • Vaccinated nearly 3.5M individual customers and starting to see some of the new customers utilize Rite Aid pharmacy for prescriptions • CO
Slide 10: FY 2022 Guidance at a Glance
FY 2022 Guidance at a Glance • $25.1B - $25.5B Total revenues • ($ 221M ) – ($ 197M ) Net loss • $ 460M - $ 500M Adjusted EBITDA • ($ 0.90) – ($ 0.53) Adjusted net loss • $300M Capital expenditures 10
Slide 11: Appendix
11 11 APPENDIX
Slide 12: Q2 Fiscal 2022 Summary
12 Q2 Fiscal 2022 Summary ($ in millions, except per share amounts) 13 Weeks Ended August 28, 2021 13 Weeks Ended August 29 , 2020 Revenues $ 6,113.0 $ 5,982.0 Net loss $ (100.3) $ (13.2) Net loss per Diluted Share $ (1.86) $ (0.25) Adjusted Net (Loss) Income per Diluted Share $ ( 0 .41) $ 0 .25 Adj
Slide 13: Q2 Fiscal 2022 Reconciliation of Net Loss to Adjusted EBITDA
13 13 Weeks Ended August 28, 2021 13 Weeks Ended August 29, 2020 Net loss $ (100,301) $ (13,197) Adjustments: • Interest expense 48,592 50,007 • Income tax expense 3,310 47 • Depreciation and amortization 73,859 87,117 • LIFO credit (3,993) (8,750) • Facility exit and impairment charges 11,353 11,52
Slide 14: Q2 Fiscal 2022 Reconciliation of Net Loss to Adjusted Net Loss
14 13 Weeks Ended August 28, 2021 13 Weeks Ended August 29, 2020 Net loss $ (100,301) $ (13 ,197) Add back - Income tax expense 3,310 47 Loss before income taxes $ (96,991) $ (13,150) Adjustments: Amortization expense 19,953 22,695 LIFO credit (3,993) (8,750) Loss (gain) on debt modifications and re
Slide 15: Q2 Fiscal 2022 Summary – Retail Pharmacy Segment
15 Revenues $ 4,277.2 $ 4,017.9 Adjusted EBITDA Gross Profit (1) $ 1,138.9 26.63% $ 1,056.2 26.29% Adjusted EBITDA SG&A (1) $ 1,069 .5 25.01% $ 933.9 23.24% Adjusted EBITDA $ 69.4 1.62% $ 122.3 3.04% Q2 - Fiscal 2022 Summary – Retail Pharmacy Segment ($ in millions) (1) Refer to slides 16 and 17 for
Slide 16: Reconciliation of Adj. EBITDA Gross Profit – Retail Pharmacy Segment
16 Reconciliation of Adj. EBITDA Gross Profit – Retail Pharmacy Segment ($ in millions) 13 Weeks Ended August 28, 2021 13 Weeks Ended August 29, 2020 Revenues $ 4,277.2 $ 4,017.9 Gross Profit 1,140.4 1,061.9 Addback: LIFO credit (4.0) (8.8) Depreciation and amortization (COGS portion only) 2.0 2.2 O
Slide 17: Reconciliation of Adj. EBITDA SG&A – Retail Pharmacy Segment
17 Reconciliation of Adj. EBITDA SG&A - Retail Pharmacy Segment ($ in millions) 13 Weeks Ended August 28, 2021 13 Weeks Ended August 29 , 2020 Revenues $ 4,277.2 $ 4,017.9 Selling, general and administrative expenses 1,163.4 1,030.1 Less: Depreciation and amortization (SG&A portion only) 59.1 70.9 S
Slide 18: Pharmacy Services Segment Results
Revenues $ 1,898.2 $ 2,038.4 Cost of Revenues 1,792.6 1,940.0 Gross Profit 105 .6 98.4 Selling, General and Administrative Expenses (104.4) (86.1) Loss on sale of assets, net (13.7) - Addback: Depreciation and Amortization 12.8 14.1 Loss on sale of assets, net 13.7 - Restructuring - related costs 7.
Slide 19: Comparable Store Sales Growth
19 Comparable Store Sales Growth 2.6% 3.1% - 0.9% 11.2% 7.1% Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 SCRIPT COUNT (1) Q2 2021 Q3 2021 Q4 2021 2.3% 6.1% 2.0% 8.2% 5.0% Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 RX SALES 4.6% - 0.7% - 5.6% - 12% - 2.8% 6.1% 0.3% - 5.0% - 11.5% - 2.4% Q1 2022 FY2021 FY202
Slide 20: Capitalization Table
Capitalization Table 20 ($ in thousands) August 28, 2021 February 27, 2021 Secured Debt: Senior secured revolving credit facility due December 2023 -$ 835,897$ FILO Term Loan due December 2023 - 447,770 Senior secured revolving credit facility due August 2026 1,075,260 - FILO Term Loan due August 20
Slide 21: Leverage Ratio
21 Leverage Ratio ($ in thousands) Total Debt: $ 3,136,800 Less: Cash and cash equivalents ( 146,564) Net Debt $ 2,990,236 LTM Adjusted EBITDA: Retail Pharmacy Segment 258,857 Pharmacy Services Segment 164,850 LTM Adjusted EBITDA $ 423,707 Leverage Ratio 7.06 August 28, 2021
Slide 22: FY 2022 Guidance
22 FY 2022 Guidance ($ in thousands) Total Revenues $ 25,100,000 $ 25,500,000 PBM Revenues $ 7,700,000 $ 7,800,000 Gross Capital Expenditures $ 300,000 $ 300,000 Reconciliation of net loss to adjusted EBITDA: Net loss $ (221,000 ) $ (197,000 ) Adjustments: Interest expense 198,000 198,000 Income tax
Slide 23: FY 2022 Guidance (cont.)
23 FY 2022 Guidance (cont.) ($ in thousands) Guidance Range Low High Net loss $ (221,000 ) $ (197,000 ) Add back - income tax expense - 3,000 Loss before income taxes (221,000 ) (194,000 ) Adjustments: Amortization expense 79,000 79,000 LIFO credit (16,000 ) (16,000 ) Loss on debt modifications and
Slide 24: Crafted Rx Solutions
——"-S CRAFTED Rx SOLUTIONS