Rite Aid — Q1 FY2018 Earnings Presentation
21 slides from Rite Aid's earnings presentation, Jun 29, 2017
Slide 1: 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, statements regarding the expected timing of the closing of the
Slide 2: WBA / RAD Merger Update
WBA / RAD Merger Update Based on FTC feedback, WBA and Rite Aid believed the merger would not be consummated. Accordingly, WBA and Rite Aid have terminated the merger agreement. The divestiture agreement with Fred’s has also been terminated. WBA has agreed to pay Rite Aid a termination fee of $325 m
Slide 3: WBA / Rite Aid Asset Purchase Agreement
WBA / Rite Aid Asset Purchase Agreement WBA has agreed to acquire 2,186 stores and certain distribution assets and inventory from Rite Aid for $5.175 billon on a cash-free, debt-free basis. Transaction is subject to antitrust clearance and other customary closing conditions. The transaction does not
Slide 4: Current Store Profile
Current Store Profile 5 Rite Aid States & Store Count Rite Aid Distribution Centers As of 6/3/2017 139 14 73 1 577 22 21 274 10 224 116 81 52 25 91 89 224 537 103 79 185 37 68 MA146 RI 43 CT 77 NJ 251 DE 42 D.C. 7 176 599 MD 140
Slide 5: Pro-Forma Store Profile
Pro-Forma Store Profile 6 Rite Aid States & Store Count Rite Aid Distribution Centers As of 6/3/2017 139 9 73 1 577 4 274 217 2 4 4 1 1 8 535 2 1 80 6 62 MA10 RI 1 CT 22 NJ 100 DE 42 2 143 MD 13
Slide 6: Transaction Benefits
Transaction Benefits Allows Rite Aid to significantly reduce leverage and provides flexibility for future strategic investments More diversified business model Reduces exposure to reimbursement rate pressure Higher percentage of Adjusted EBITDA from higher growth PBM business Strong profile of remai
Slide 7: 1st Quarter Fiscal 2018 Supplemental Information
1st QUARTER FISCAL 2018 SUPPLEMENTAL INFORMATION
Slide 8: Non-GAAP financial measures
The company separately reports financial results on the basis of Adjusted Net Income (Loss), Adjusted Net Income (Loss) per diluted share, and Adjusted EBITDA, which are non-GAAP financial measures. Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per diluted share exclude amortization of E
Slide 9: Q1 - Fiscal 2018 Summary
Q1 - Fiscal 2018 Summary 10 ($ in millions, except per share amounts) 13 Weeks Ended June 3, 2017 13 Weeks Ended May 28, 2016 Revenue $ 7,781.5 $ 8,184.2 Net Loss $ (75.3) $ (4.6) Net Loss Per Diluted Share $ (0.07) $ (0.00) Adjusted Net (Loss) / Income $ (52.4) $ 16.3 Adjusted Net (Loss) / Income p
Slide 10: Reconciliation of Net Loss to Adjusted EBITDA
Q1 - Fiscal 2018 Reconciliation of Net Loss to Adjusted EBITDA 11 ($ in thousands) Q2 - Fiscal 2017 Reconciliation of Net Income to Adjusted EBITDA ($ in thousands) 13 Weeks Ended June 3, 2017 13 Weeks Ended May 28, 2016 Net Loss $ (75,349) $ (4,588) Adjustments: Interest expense 109,937 105,113 Inc
Slide 11: Reconciliation of Net Loss to Adjusted Net (Loss) Income
Q1 - Fiscal 2018 Reconciliation of Net Loss to Adjusted Net (Loss) Income 12 ($ in thousands, except per share amounts) ($ in thousands) 13 Weeks Ended June 3, 2017 13 Weeks Ended May 28, 2016 Net Loss $ (75,349) $ (4,588) Add back - Income tax benefit (35,209) (6,309) Loss before income taxes (110,
Slide 12: Q1 - Fiscal 2018 Summary: Retail Pharmacy Segment
00 Q1 - Fiscal 2018 Summary RETAIL PHARMACY SEGMENT 13 ($ in millions) (1) Refer to slides 15 and 16 for the reconciliations of these non-GAAP measures to their applicable GAAP measures. Revenue 6,350.2 $ 6,675.5 $ Adjusted EBITDA Gross Profit (1) 1,693.0 $ 26.66% 1,836.4 $ 27.51% Adjusted EBITDA SG
Slide 13: Q1 - Fiscal 2018 Summary: Retail Pharmacy Segment
Q1 - Fiscal 2018 Summary RETAIL PHARMACY SEGMENT Retail Pharmacy Segment revenue decreased $325.3 million or 4.9%, due to a 1.1% decrease in comparable script growth, a decrease in reimbursement rates and a 1.5% decrease in same store front end sales. Adjusted EBITDA Gross Profit decreased $143.4 mi
Slide 14: Reconciliation of Adjusted EBITDA Gross Profit
Reconciliation of Adjusted EBITDA Gross Profit RETAIL PHARMACY SEGMENT 15 ($ in thousands) Reconciliation of Adjusted EBITDA Gross Profit Retail Pharmacy Segment ($ in thousands) 13 Weeks Ended June 3, 2017 13 Weeks Ended May 28, 2016 Revenues $ 6,350,208 $ 6,675,548 Gross Profit 1,654,062 1,805,367
Slide 15: Pharmacy Services Segment Results
Pharmacy Services Segment Results 17 ($ in millions) Pharmacy Services Segment Results ($ in millions) 13 Weeks Ended June 3, 2017 13 Weeks Ended May 28, 2016 Revenues $ 1,513.2 $ 1,602.4 Cost of Revenues 1,408.2 1,513.4 Gross Profit 105.0 89.0 Selling, General and Administrative Expense (79.0) (69.
Slide 16: Q1 - FY 2018 Summary: Pharmacy Services Segment
Q1 - FY 2018 Summary PHARMACY SERVICES SEGMENT Revenues decreased $89.2 million, due to a decrease in covered lives at Envision Insurance Company EBITDA increased $7.4 million due to an increase in Gross Profit. 18
Slide 17: Comparable Store Sales Growth
FY 18 FY 16 FY 17 Front End Sales Rx Sales Script Count Comparable Store Sales Growth 19 (1) (1) Script count growth shown on a 30-day equivalent basis. 0.6% 0.3% 0.3% - 0.4% 1.2% 0.1% - 0.4% - 0.3% - 1.5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 3.9% 2.8% 1.2% - 0.8% 0.1% - 3.6% - 4.7% - 4.3% - 5.0% 2.2% 1.2% 1.
Slide 18: Capitalization Table & Leverage
Capitalization Table & Leverage 20 ($ in thousands) Note: Debt in the capitalization table is shown net of unamortized debt issuance costs. Capitalization Table & Leverage ($ in thousands) June 3, 2017 March 4, 2017 Secured Debt: Senior secured revolving credit facility due January 2020 $ 2,317,285
Slide 19: Debt Maturity Profile
Debt Maturity Profile Maturity table as of June 3, 2017. Note: Maturities reflect calendar year. ($ in millions) Second Lien ABL Funded ABL Unfunded Commitment Senior Unsecured Notes Senior Unsecured (Guaranteed) Notes Callable at 102.313 21 Callable at 103.375 $2,317 $1,383 $295 $128 $470 $500 $902
Slide 20: Debt Maturity Profile
‘6 2 in millions) $5,500 $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 2016 = =2017 Debt Maturity Profile jecond Lien IMEABL Funded |) ABL Unfunded Commitment I Senior Unsecured Notes 1d (Guaranteed) Notes Senior Unsect Catabe at 102.313 Cac $470 Caftable at STALE < 103.975
Slide 21: With us, it's personal.
PHARMACY With us, its personal.