Rite Aid — Q2 FY2020 Earnings Presentation
20 slides from Rite Aid's earnings presentation, Sep 26, 2019
Slide 1: 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, stat
Slide 2: Cautionary Note Regarding Pro Forma Information
Cautionary Note Regarding Pro Forma Information The following presentation provides certain pro forma information regarding the impact of Rite Aid’s pending sale of distribution centers and assets to WBA on Rite Aid’s results of operations and capital structure. The pro forma information is for illu
Slide 3: Non-GAAP Financial Measures
The following presentation includes the non-GAAP financial measures, Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share, Adjusted EBITDA Gross Profit and Adjusted EBITDA SG&A. Rite Aid defines Adjusted EBITDA as net income (loss) excluding the impact of income
Slide 4: Key Second Quarter FY 2020 Highlights
Second Quarter Adjusted EBITDA of $134.2 million exceeded our expectations Retail Pharmacy: Same store 30-day equivalent prescription count grew 2.7% Strong expense control Generic drug cost savings EnvisionRx: Medicare Part D membership continues to drive revenues Improved pharmacy network performa
Slide 5: Q2 Fiscal 2020 Summary
Q2 Fiscal 2020 Summary 6 ($ in millions, except per share amounts) Note: Data on this slide and throughout the presentation is on a continuing operations basis. 13 Weeks Ended August 31, 2019 13 Weeks Ended September 1, 2018 Revenue $ 5,366.3 $ 5,421.4 Net Loss $ (78.7) $ (352.3) Net Loss per Dilute
Slide 6: Q2 Fiscal 2020 Reconciliation of Net Loss to Adjusted EBITDA
Q2 - Fiscal 2020 Reconciliation of Net Loss to Adjusted EBITDA 7 ($ in thousands) 13 Weeks Ended August 31, 2019 13 Weeks Ended September 1, 2018 Net Loss $ (78,705) $ (352,348) Adjustments: Interest expense 60,102 56,233 Income tax expense (benefit) 27,628 (106,559) Depreciation and amortization 83
Slide 7: Q2 Fiscal 2020 Reconciliation of Net Loss to Adjusted Net Income (Loss)
Q2 - Fiscal 2020 Reconciliation of Net Loss to Adjusted Net Income (Loss) 8 ($ in thousands, except per share amounts) 13 Weeks Ended August 31, 2019 13 Weeks Ended September 1, 2018 Net Loss $ (78,705) $ (352,348) Add back - Income tax expense (benefit) 27,628 (106,559) Loss before income taxes $ (
Slide 8: Q2 Fiscal 2020 Summary – Retail Pharmacy Segment
Q2 - Fiscal 2020 Summary – Retail Pharmacy Segment 9 ($ in millions) (1) Refer to slides 11 and 12 for the reconciliations of these non-GAAP measures to their applicable GAAP measures. 13 Weeks Ended August 31, 2019 13 Weeks Ended September 1, 2018 Revenue $ 3,848.1 $ 3,911.5 Adjusted EBITDA Gross P
Slide 9: Retail Pharmacy Segment Results Commentary
Retail Pharmacy Segment revenue decreased $63.4 million. Same store sales increased 0.4%, driven primarily by a 2.7% increase in same store prescription count. The script count increase was driven by the success of our clinical initiatives and immunization program. Adjusted EBITDA Gross Profit decre
Slide 10: Reconciliation of Adj. EBITDA Gross Profit – Retail Pharmacy Segment
Reconciliation of Adj. EBITDA Gross Profit – Retail Pharmacy Segment 11 ($ in millions) 13 Weeks Ended August 31, 2019 13 Weeks Ended September 1, 2018 Revenues $ 3,848.1 $ 3,911.5 Gross Profit 1,032.4 1,052.0 Addback: LIFO charge 7.5 3.4 Depreciation and amortization (COGS portion only) 2.2 2.3 Oth
Slide 11: Reconciliation of Adj. EBITDA SG&A - Retail Pharmacy Segment
Reconciliation of Adj. EBITDA SG&A - Retail Pharmacy Segment 12 ($ in millions) 13 Weeks Ended August 31, 2019 13 Weeks Ended September 1, 2018 Revenues $ 3,848.1 $ 3,911.5 Selling, general and administrative expenses 1,044.8 1,068.9 Less: Depreciation and amortization (SG&A portion only) 65.0 68.4
Slide 12: Pharmacy Services Segment Results
Pharmacy Services Segment Results 13 ($ in millions) Pharmacy Services Segment Results ($ in millions) 13 Weeks Ended August 31, 2019 13 Weeks Ended September 1, 2018 Revenues $ 1,579.1 $ 1,561.8 Cost of Revenues 1,467.1 1,452.3 Gross Profit 112.0 109.5 Selling, General and Administrative Expenses (
Slide 13: Q2 FY 2020 Summary – Pharmacy Services Segment
Revenues increased $17.3 million due to an increase in our Medicare Part D revenues. Adjusted EBITDA decreased $3.5 million year-over-year. Pharmacy Services Segment adjusted EBITDA benefited from improvements in pharmacy network performance that were offset by the increases in SG&A expenses as we c
Slide 14: Comparable Store Sales Growth and Script Count
Front End Sales Rx Sales Comparable Store Sales Growth 15 Script Count (1) (1) Script count growth shown on a 30-day equivalent basis. FY 2018 FY 2019 FY 2020 Excluding cigarette and tobacco products - 3.5% - 2.3% - 0.1% 1.6% 3.1% 2.1% 2.3% 1.5% - 0.5% - 0.6% - 1.8% - 0.1% - 1.5% - 1.9% - 0.3% - 1.8
Slide 15: Capitalization Table
Capitalization Table 16 ($ in thousands) Note: Debt in the capitalization table is shown net of unamortized debt issuance costs. August 31, 2019 March 2, 2019 Secured Debt: Senior secured revolving credit facility due December 2023 $ 1,228,294 $ 850,931 FILO term loan due December 2023 446,542 446,0
Slide 16: Pro Forma Leverage Ratio
Pro Forma Leverage Ratio 17 ($ in thousands) August 31, 2019 Total Debt: $ 3,867,849 Less: Cash and cash equivalents (142,181) Less: Distribution center sale proceeds (157,063) Pro Forma Net Debt $ 3,568,605 LTM Adjusted EBITDA: Retail Pharmacy Segment 374,140 Pharmacy Services Segment 147,268 LTM A
Slide 17: FY 2020 Guidance
FY 2020 Guidance 18 ($ in thousands) Guidance Range Low High Total Revenues $ 21,500,000 $ 21,900,000 Same store sales 0.00% 1.00% Gross Capital Expenditures $ 250,000 $ 250,000 Reconciliation of net loss to adjusted EBITDA: Net loss $ (275,000) $ (235,000) Adjustments: Interest expense 240,000 240,
Slide 18: FY 2020 Guidance (cont.)
FY 2020 Guidance (cont.) 19 ($ in thousands, except per share amounts) Guidance Range Low High Net loss $(275,000) $(235,000) Add back - income tax expense 35,000 35,000 Loss before income taxes (240,000) (200,000) Adjustments: Amortization expense 120,000 120,000 LIFO charge 30,000 30,000 Restructu
Slide 19: FY 2020 Guidance Reconciliation
Net loss ‘Add back - income tax expense Loss before income taxes Adjustments: ‘Amortization expense UFO charge Restructuring-related costs ‘Adjusted income before adjusted income taxes ‘Adjusted income tax expense Adjusted net income Diluted adjusted net income per share Guidance Range Low High (275
Slide 20: Rite Aid
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