Rite Aid — Q2 2021 Earnings Presentation
27 slides from Rite Aid's earnings presentation, Sep 24, 2020
Slide 1: Second Quarter Fiscal 2021 Earnings Conference Call
RITE Z Rie slixir SECOND QUARTER FISCAL 2021 EARNINGS CONFERENCE CALL September 24, 2020 Heyward Donigan Chief Executive Officer Jim Peters Chief Operating Officer Dan Robson President Elixir Matt Schroeder Chief Financial Officer
Slide 2: Cautionary Statement Regarding Forward Looking Statements
2 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,
Slide 3: Non-GAAP Financial Measures
3 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 . The Company defines Adjusted EBITDA as net income (loss) excluding the impact of
Slide 4: Q2 FY21 Financial Highlights
Q2 FY21 FINANCIAL
Slide 5: Q2 FY2021 at a Glance
$151.6 Adjusted EBITDA* 5 Q2 FY2021 at a Glance 2.6% Script count growth 6.1% Increase in FE same store sales (excluding tobacco ) 29% Increase in revenues at Elixir 11.5% Increase in revenues 130 Basis point increase in front - end dollar market share *Adjusted EBITDA reconciliation located in the
Slide 6: Key Second Quarter FY2021 Highlights
6 Key Second Quarter FY2021 Highlights Revenue increased 11.5% and Adjusted EBITDA increased $17.4 million to $151.6 million Retail Pharmacy: x Front end comparable sales increased 6.1% (excluding tobacco related products) x Pharmacy comparable sales increased 2.3% x Same store 30 - day equivalent p
Slide 7: Continued progress on our key strategic pillars
7 Continued progress on our key strategic pillars Becoming the dominant mid - market PBM Unlocking the value of our pharmacists Renewing our retail and digital experience
Slide 8: Becoming the dominant mid-market PBM
8 Becoming the dominant mid - market PBM • Launched new Elixir brand - expect to complete rebranding by year end • G rew Medicare Part D membership and drove SG&A expense savings through cost reduction initiatives and integration • Driving enhancements to all member - facing functions – call center,
Slide 9: Unlocking the value of our pharmacists
9 • Positioning pharmacists to deliver comprehensive care by fusing traditional medicine and alternative remedies • 6,300 pharmacists in training for immunity, holistic care & new customer engagement tools • Empowering pharmacists to make informed product recommendations • Currently operating 300 CO
Slide 10: Renewing our retail and digital experience
10 • Using research to overhaul assortment for whole health needs of target consumers AND those they care for • Soft launched new brand on RiteAid.com & mobile app, with user experience enhancements that modernize the digital shopping experience • Well underway with new logo refresh inside & exterio
Slide 11: FY21 Guidance
FY¥21 GUIDANCE
Slide 12: FY 2021 Guidance
12 Total Revenues $23.5B – $24.0B Same Store Sales 3.0% - 4.0% Adjusted EBITDA $475M - $525M Net Loss $190M - $140M Adjusted net (loss)/income per share $(0.67) - $0.09 FY 2021 Guidance
Slide 13: FY 2021 Guidance: Net Loss to Adjusted EBITDA
($ in thousands) FY 2021 Guidance 13 Guidance Range Low High Total Revenues $ 23,500,000 $ 24,000,000 PBM Revenues $ 7,550,000 $ 7,650,000 Same store sales 3.00% 4.00% Gross Capital Expenditures $ 275,000 $ 275,000 Reconciliation of net loss to adjusted EBITDA: Net loss $ (190,000) $ (140,000) Adjus
Slide 14: FY 2021 Guidance (cont.)
($ in thousands, except per share amounts) FY 2021 Guidance (cont.) 14 Guidance Range Low High Net loss $ (190,000) $ (140,000) Add back - income tax benefit (12,000) (7,000) Loss before income taxes (202,000) (147,000) Adjustments: Amortization expense 92,000 92,000 LIFO credit (38,000) (38,000) In
Slide 15: FY 2021 Guidance (cont.): Free Cash Flow
($ in thousands) FY 2021 Guidance (cont.) 15 Guidance Range Low High Adjusted EBITDA $ 475,000 $ 525,000 Cash interest expense (189,000) (189,000) Restructuring - related costs (75,000) (75,000) Closed store rent (26,000) (26,000) Working capital benefit 200,000 200,000 Cash flow from operations 385
Slide 16: Appendix
APPENDIX
Slide 17: Q2 Fiscal 2021 Summary
($ in millions, except per share amounts) Q2 Fiscal 2021 Summary 17 Revenues $ 5,982.0 $ 5,366.3 Net Loss $ (13.2) $ (78.7) Net Loss per Diluted Share $ (0.25) $ (1.48) Adjusted Net Income per Diluted Share $ 0.25 $ 0.12 Adjusted EBITDA $ 151.6 2.53% $ 134.2 2.50% Note: Data on this slide and throug
Slide 18: Reconciliation of Net Loss to Adjusted EBITDA
($ in thousands) Q 2 - Fiscal 2021 Reconciliation of Net Loss to Adjusted EBITDA 18 Net Loss $ (13,197) $ (78,705) Adjustments: • Interest expense 50,007 60,102 • Income tax expense 47 27,628 • Depreciation and amortization 87,117 83,044 • LIFO (credit) charge (8,750) 7,504 • Lease termination and i
Slide 19: Reconciliation of Net Loss to Adjusted Net Income
($ in thousands, except per share amounts) Q2 - Fiscal 2021 Reconciliation of Net Loss to Adjusted Net Income 19 Net Loss $ (13,197) $ (78,705) Add back - Income tax expense 47 27,628 Loss before income taxes $ (13,150) $ (51,077) Adjustments: Amortization expense 22,695 26,596 LIFO (credit) charge
Slide 20: Q2 Fiscal 2021 Summary – Retail Pharmacy Segment
Q2 - Fiscal 2021 Summary – Retail Pharmacy Segment 20 (1) Refer to slides 22 and 23 for the reconciliations of these non - GAAP measures to their applicable GAAP measures. ($ in millions) Revenues $ 4,017.9 $ 3,848.1 Adjusted EBITDA Gross Profit (1) $ 1,056.2 26.29% $ 1,045.3 27.16% Adjusted EBITDA
Slide 21: Reconciliation of Adj. EBITDA Gross Profit – Retail Pharmacy Segment
($ in millions) Reconciliation of Adj. EBITDA Gross Profit – Retail Pharmacy Segment 21 Revenues $ 4,017.9 $ 3,848.1 Gross Profit 1,061.9 1,032.4 Addback: LIFO (credit) charge (8.8) 7.5 Depreciation and amortization (COGS portion only) 2.2 2.2 Other 0.9 3.2 Adjusted EBITDA Gross Profit $ 1,056.2 $ 1
Slide 22: Reconciliation of Adj. EBITDA SG&A – Retail Pharmacy Segment
($ in millions) Reconciliation of Adj. EBITDA SG&A - Retail Pharmacy Segment 22 Revenues $ 4,017.9 $ 3,848.1 Selling, general and administrative expenses 1,030.1 1,044.8 Less: Depreciation and amortization (SG&A portion only) 70.9 65.0 Stock - based compensation expense 3.6 4.4 Merger and Acquisitio
Slide 23: Pharmacy Services Segment Results
($ in millions) Pharmacy Services Segment Results 23 Revenues $ 2,038.4 $ 1,579.1 Cost of Revenues 1,940.0 1,467.1 Gross Profit 98.4 112.0 Selling, General and Administrative Expenses (86.1) (90.7) Addback: Depreciation and Amortization 14.1 15.9 Restructuring - related costs 2.7 4.1 Other 0.2 0.2 A
Slide 24: Comparable Store Sales Growth
Comparable Store Sales Growth 24 FRONT END SALES - 1.5% - 1.9% - 0.3% - 1.8% - 0.5% 0.1% 14.2% 4.6% 0.3% - 0.6% 1.0% 1.5% 16.0% 6.1% 3.1% 2.1% 2.3% 1.5% 0.1% 1.6% 2.2% 2.3% 2.4% 0.8% 3.7% 2.7% 2.8% 5.0% 0.4% 2.6% Excluding cigarette and tobacco products (1) Script count growth shown on a 30 - day eq
Slide 25: Capitalization Table
($ in thousands) Capitalization Table 25 August 29, 2020 February 29, 2020 Secured Debt: Senior secured revolving credit facility due December 2023 1,283,365$ 630,833$ FILO Term Loan due December 2023 447,362 446,954 1,730,727 1,077,787 Second Lien Secured Debt: 7.5% senior secured notes due July 20
Slide 26: Leverage Ratio
($ in thousands) Leverage Ratio 26 August 29, 2020 Total Debt: $ 3,531,545 Less: Cash and cash equivalents (92,730) Net Debt $ 3,438,815 LTM Adjusted EBITDA: Retail Pharmacy Segment 379,076 Pharmacy Services Segment 173,593 LTM Adjusted EBITDA $ 552,669 Leverage Ratio 6.22
Slide 27: Crafted Rx Solutions
CRAFTED Rx SOLUTIONS