Rite Aid — Q3 FY2021 Earnings Presentation
28 slides from Rite Aid's earnings presentation, Dec 17, 2020
Slide 1: Third Quarter Fiscal 2021 Earnings Conference Call
ine elixir THIRD QUARTER FISCAL 2021 EARNINGS CONFERENCE CALL December 17, 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, Adjusted EBITDA SG&A and Free Cash Flow . The Company defines Adjusted EBITDA as net income (loss) excludi
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Slide 5: Q3 FY2021 at a Glance
$137.4 Adjusted EBITDA* 5 Q3 FY2021 at a Glance 3.1% Script count growth 0 .3% Increase in FE same store sales (excluding tobacco ) 29% Increase in revenues at Elixir 12% Increase in revenues 5.1% Growth in retail pharmacy revenues *Adjusted EBITDA reconciliation located in the Appendix
Slide 6: Key Third Quarter FY2021 Highlights
6 Key Third Quarter FY2021 Highlights Revenue increased 12% and narrowed guidance Retail Pharmacy: x Front end comparable sales increased 0.3% (excluding tobacco related products) x Pharmacy comparable sales increased 6.1 % x Flu immunizations increased by 28% x Same store 30 - day equivalent prescr
Slide 7: Immediate Signals of the New Brand
7 Immediate Signals of the New Brand Refreshed over 700 Store Exteriors Refreshed Store Interiors “Store of the Future” Digital Pylons Added in 700+ stores
Slide 8: Continued progress on our key strategic pillars
8 Continued progress on our key strategic pillars Establishing Elixir as a clearly differentiated market leader Unlocking the value of our pharmacists Renewing our retail and digital experience
Slide 9: Establishing Elixir as a clearly differentiated market leader
9 Establishing Elixir as a clearly differentiated market leader • Continued progress with operational integration and modernization • Consolidating formulary offerings for current employer clients to drive enhanced value • Reorganized and integrated clinical solutions team within Health Dialog for m
Slide 10: Unlocking the value of our pharmacists
10 • Delivered over 1M COVID - 19 tests, and partnering with CDC to administer COVID vaccines • Increased flu immunizations by 28 % • Increased pharmacy market share as measured by IQVIA • Through specialized training and support, our pharmacists delivered higher levels of engagement around the key
Slide 11: Renewing our retail and digital experience
11 • Officially launched our new brand and logo • R emerchandised 75 percent of our categories to our new standards • Opened first 3 Stores of the Future in Etters, PA, Littleton, NH and Moscow, PA with excellent initial customer response • Refreshed more than 700 stores with updated exteriors, sign
Slide 12: FY21 Guidance
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Slide 13: FY 2021 Guidance
13 Total Revenues $ 23.9B – $ 24.2B Same Store Sales 3.5% - 4.5% Adjusted EBITDA $ 490M - $ 520M Net Loss $89M - $114M Adjusted net income per share $0.45 - $ 0.85 Capital Expenditures ~$325M Free Cash Flow $50M - $100M FY 2021 Guidance
Slide 14: FY 2021 Guidance: Net Loss to Adjusted EBITDA
($ in thousands) FY 2021 Guidance 14 Guidance Range Low High Total Revenues $ 23,900,000 $ 24,200,000 PBM Revenues $ 7,850,000 $ 7,950,000 Same store sales 3.50 % 4.50 % Gross Capital Expenditures $ 325,000 $ 325,000 Reconciliation of net loss to adjusted EBITDA: Net loss $ ( 113,800 ) $ (88,800 ) A
Slide 15: FY 2021 Guidance (cont.)
($ in thousands, except per share amounts) FY 2021 Guidance (cont.) 15 Guidance Range Low High Net loss $ ( 113,800 ) $ (88,800 ) Add back - income tax benefit (12,000 ) (7,000) Loss before income taxes (125,800 ) (95,800 ) Adjustments: Amortization expense 92,000 92,000 LIFO credit ( 39,000 ) ( 39,
Slide 16: FY 2021 Guidance (cont.)
($ in thousands) FY 2021 Guidance (cont.) 16 Guidance Range Low High Adjusted EBITDA $ 490,000 $ 520,000 Cash interest expense ( 190,000 ) ( 190,000 ) Restructuring - related costs (80,000 ) (80,000 ) Closed store rent ( 25,000 ) ( 25,000 ) Working capital benefit 180,000 200,000 Cash flow from oper
Slide 17: Appendix
APPENDIX
Slide 18: Q3 Fiscal 2021 Summary
($ in millions, except per share amounts) Q3 Fiscal 2021 Summary 18 Note: Data on this slide and throughout the presentation is on a continuing operations basis. 13 Weeks Ended November 28, 2020 13 Weeks Ended November 30, 2019 Revenues $ 6,117.0 $ 5,462.3 Net income $ 4.3 $ 52 .3 Net income per Dil
Slide 19: Q3 Fiscal 2021 Reconciliation of Net Income to Adjusted EBITDA
($ in thousands) Q 3 - Fiscal 2021 Reconciliation of Net to Adjusted EBITDA 19 13 Weeks Ended November 28, 2020 13 Weeks Ended November 30, 2019 Net income $ 4,324 $ 52,286 Adjustments: • Interest expense 50,835 57,856 • Income tax expense 437 87 6 • Depreciation and amortization 83,336 82,007 • LIF
Slide 20: Q3 Fiscal 2021 Reconciliation of Net Income to Adjusted Net Income
($ in thousands, except per share amounts) Q3 - Fiscal 2021 Reconciliation of Net to Adjusted Net Income 20 13 Weeks Ended November 28, 2020 13 Weeks Ended November 30, 2019 Net income $ 4,324 $ 52,286 Add back - Income tax expense 437 876 Income before income taxes $ 4,761 $ 53,162 Adjustments: Amo
Slide 21: Q3 Fiscal 2021 Summary – Retail Pharmacy Segment
Q3 - Fiscal 2021 Summary – Retail Pharmacy Segment 21 (1) Refer to slides 22 and 23 for the reconciliations of these non - GAAP measures to their applicable GAAP measures. ($ in millions) 13 Weeks Ended November 28, 2020 13 Weeks Ended November 30, 2019 Revenues $ 4,109.6 $ 3,909.9 Adjusted EBITDA G
Slide 22: Reconciliation of Adj. EBITDA Gross Profit – Retail Pharmacy Segment
($ in millions) Reconciliation of Adj. EBITDA Gross Profit – Retail Pharmacy Segment 22 13 Weeks Ended November 28, 2020 13 Weeks Ended November 30, 2019 Revenues $ 4,109.6 $ 3,909.9 Gross Profit 1,079.7 1,070.9 Addback: LIFO credit (9.5) (7.4) Depreciation and amortization (COGS portion only) 1.9 2
Slide 23: Reconciliation of Adj. EBITDA SG&A – Retail Pharmacy Segment
($ in millions) Reconciliation of Adj. EBITDA SG&A - Retail Pharmacy Segment 23 13 Weeks Ended November 28, 2020 13 Weeks Ended November 30, 2019 Revenues $ 4,109.6 $ 3,909.9 Selling, general and administrative expenses 1,067.0 1,044.2 Less: Depreciation and amortization (SG&A portion only) 67.6 65.
Slide 24: Pharmacy Services Segment Results
($ in millions) Pharmacy Services Segment Results 24 13 Weeks Ended November 28, 2020 13 Weeks Ended November 30, 2019 Revenues $ 2,084.4 $ 1,613.1 Cost of Revenues 1,961.0 1,495.0 Gross Profit 123 .4 118.1 Selling, General and Administrative Expenses (89.3) (90.6) Loss on sale of assets, net (19.2)
Slide 25: Comparable Store Sales Growth
Comparable Store Sales Growth 25 FRONT END SALES - 0.3% - 1.8% - 0.5% 0.1% 14.2% 4.6% - 0.7% 0.3% - 0.6% 1.0% 1.5% 16.0% 6.1% 0.3% Q2 Q2 Q1 Q3 Q4 Q3 2.3% 1.5% 0.1% 1.6% 2.2% 2.3% 6.1% 3.7% 2.7% 2.8% 5.0% 0.4% 2.6% 3.1% Excluding cigarette and tobacco products (1) Script count growth shown on a 30 -
Slide 26: Capitalization Table
($ in thousands) Capitalization Table 26 November 28, 2020 February 29, 2020 Secured Debt: Senior secured revolving credit facility due December 2023 975,631$ 630,833$ FILO Term Loan due December 2023 447,566 446,954 1,423,197 1,077,787 Second Lien Secured Debt: 7.5% senior secured notes due July 20
Slide 27: Leverage Ratio
($ in thousands) Leverage Ratio 27 Total Debt: $ 3,224,772 Less: Cash and cash equivalents (50,813) Net Debt $ 3,173,959 LTM Adjusted EBITDA: Retail Pharmacy Segment 359,054 Pharmacy Services Segment 172,930 LTM Adjusted EBITDA $ 531,984 Leverage Ratio 5.97 November 28, 2020
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