Rite Aid — Q3 FY2023 Earnings Presentation
23 slides from Rite Aid's earnings presentation, Dec 21, 2022
Slide 1: Third Quarter Fiscal 2023 Earnings Conference Call
THIRD QUARTER FISCAL 2023 Earnings Conference Call Heyward Donigan Chief Executive Officer Matt Schroeder Chief Financial Officer 12/21/2022
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 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 EBITD
Slide 4: Q3FY23 Financial Review
Q3FY23 FINANCIAL REVIEW
Slide 5: Key Third Quarter FY2023 Highlights
Key Third Quarter FY2023 Highlights 5 • $6.1B Total revenues • $ 121.9M Adjusted EBITDA* • 8.0% Increase in same store a cute scripts (excluding COVID - 19 vaccines) * Adjusted EBITDA reconciliation located in the Appendix • $67.1M Net Loss
Slide 6: Key Third Quarter FY2023 Highlights: Retail Pharmacy and Elixir
Key Third Quarter FY2023 Highlights 6 Retail Pharmacy: • $4.4B in retail revenues • $78.7M Net Loss • $82M Adjusted EBITDA* • Same store sales increased 7.5% • Same store FE sales (excluding tobacco) grew 2.7% • Total same store scripts increased 3.6%, excluding benefit from COVID - 19 vaccines • Sa
Slide 7: Key Growth Initiatives
Key Growth Initiatives • Improve adherence: • Courtesy Refills • 1.2M new customers enrolled in program since June • Seeing 1% increase in adherence scores for Med D Big 3 • Further liberating our pharmacists and making them more efficient is a significant value unlock to improving adherence • Digit
Slide 8: On the Rite Path For FY2023
8 8 On the Rite Path For FY2023 • C ompleted the securitization of approximately $170M of our 2022 CMS receivable • Second and final piece of the CMS receivable is expected to be securitized in Q4 • Lower payroll, store expenses and corporate administration expenses to drive additional SG&A efficien
Slide 9: Guidance
GUIDANCE
Slide 10: Updated FY2023 Guidance
Updated FY2023 Guidance • $23.7B - $24.0B Total revenues • $410M – $440M Adjusted EBITDA • Retail Pharmacy $265M - $285M • Elixir $145M - $155M • ($2.18) – ($1.78) Diluted adjusted net loss per share • ~$225M Capital expenditures • Expect to generate positive free cash flow to continue to pay down d
Slide 11: Appendix
APPENDIX
Slide 12: Q3 Fiscal 2023 Summary
Q3 Fiscal 2023 Summary Create Leverage Assets to Develop New Offering ($ in millions, except per share amounts) 13 Weeks Ended November 26, 2022 13 Weeks Ended November 27 , 2021 Revenues $ 6,083.3 $ 6,228.9 Net Loss $ (67.1) $ (36.1) Net loss per Diluted Share $ (1.23) $ (0.67) Adjusted net (loss)
Slide 13: Q3 Fiscal 2023 Reconciliation of Net Loss to Adjusted EBITDA
Q3 - Fiscal 2023 Reconciliation of Net Loss to Adjusted EBITDA 13 ($ in thousands) 13 Weeks Ended November 26, 2022 13 Weeks Ended November 27, 2021 Net loss $ (67,144) $ (36,058) Adjustments: • Interest expense 57,416 47,794 • Income tax benefit (510) (1,175) • Depreciation and amortization 69,496
Slide 14: Q3 Fiscal 2023 Reconciliation of Net Loss to Adjusted Net (Loss) Income
Q3 - Fiscal 2023 Reconciliation of Net Loss to Adjusted Net (Loss) Income Create Leverage Assets to Develop New Offering 14 ($ in thousands, except per share amounts) Net loss $ (67,144) $ (36 ,058) Add back - Income tax benefit (510) (1,175) Loss before income taxes $ (67,654) $ ( 37,233) Adjustmen
Slide 15: Q3 Fiscal 2023 Summary – Retail Pharmacy Segment
Q3 - Fiscal 2023 Summary – Retail Pharmacy Segment Create Leverage Assets to Develop New Offering 15 ($ in millions) Revenues $ 4,412.2 $ 4,432.5 Adjusted EBITDA Gross Profit (1) $ 1,119.2 25.37% $ 1,244.6 28.08% Adjusted EBITDA SG&A (1) $ 1,037.5 23.51% $ 1,118.7 25.24% Adjusted EBITDA $ 81.7 1.85%
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 16 ($ in millions) 13 Weeks Ended November 26, 2022 13 Weeks Ended November 27, 2021 Revenues $ 4,412.2 $ 4,432.5 Gross Profit 1,099.3 1,233.2 Addback: LIFO charge 15.2 8.9 Depreciatio
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 17 ($ in millions) 13 Weeks Ended November 26, 2022 13 Weeks Ended November 27 , 2021 Revenues $ 4,412.2 $ 4,432.5 Selling, general and administrative expenses 1,118.8 1,186.0 Less: Depreciati
Slide 18: Pharmacy Services Segment Results
Pharmacy Services Segment Results 18 ($ in millions) Revenues $ 1,726.9 $ 1,858.8 Cost of Revenues 1,622.5 1,757.7 Gross Profit 104 .4 101.1 Selling, General and Administrative Expenses (75.8) (90.9) Addback: Depreciation and Amortization 10.8 12.4 Restructuring - related costs 6.6 5.9 Litigation an
Slide 19: Comparable Store Sales Growth
Comparable Store Sales Growth 10 Create Leverage Assets to Develop New Offering 19 FY2022 FY2023 Excluding cigarette and tobacco products Q3 2022 Q4 2022 Q1 2023 5.9% 10.7% 6.6% 8.0% 9.5% Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 RX SALES 0.4% 2.7% - 0.5% - 0.3% 2.2% 1.0% 3.2% 0.0% 0.2% 2.7% Q2 2023 F
Slide 20: Capitalization Table
Capitalization Table Create Leverage Assets to Develop New Offering 20 ($ in thousands) November 26, 2022 February 26, 2022 Secured Debt: Senior secured revolving credit facility due August 2026 1,335,044$ 690,990$ FILO Term Loan due August 2026 348,054 347,656 1,683,098 1,038,646 Second Lien Secure
Slide 21: FY 2023 Guidance
Expand Growth in New Markets 21 FY 2023 Guidance ($ in thousands) Total Revenues $ 23,700,000 $ 24,000,000 Pharmacy Services Segment Revenues $ 6,300,000 $ 6,400,000 Gross Capital Expenditures $ 225,000 $ 225,000 Reconciliation of net loss to adjusted EBITDA: Net loss $ (584,000) $ (551,000) Adjustm
Slide 22: FY 2023 Guidance (cont.)
FY 2023 Guidance (cont.) Expand Growth in New Markets 22 FY 2023 Guidance ($ in thousands) Guidance Range Low High Net loss $ (584,000) $ (551,000) Add back - income tax benefit (7,000) (10,000) Loss before income taxes (591,000) (561,000) Adjustments: Amortization expense 75,000 75,000 LIFO charge
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