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Rite Aid Reports Net Income Of $32.8 Million And Adjusted EBITDA Of $341.6 Million For Second Quarter Fiscal 2014

Stocks in this article: RAD

Rite Aid Corporation (NYSE:RAD) today reported operating results for its fiscal second quarter ended Aug. 31, 2013. The company reported revenues of $6.3 billion, net income of $32.8 million or $0.03 per diluted share, and Adjusted EBITDA of $341.6 million, or 5.4 percent of revenues.

“We posted excellent results in the second quarter, highlighted by another quarter of net income and an all-time company record for second-quarter Adjusted EBITDA,” said Rite Aid Chairman and CEO John Standley. “As we continue to improve our operational and financial performance, we are also making tremendous progress in transforming our more than 4,600 stores into true neighborhood destinations for health and wellness, as indicated by our successful launch of the wellness65+ loyalty program for seniors, a strong start to our flu immunization campaign and the completion of our 1,000 th wellness store remodel.”

Second Quarter Summary

Revenues for the 13-week quarter were $6.3 billion versus revenues of $6.2 billion in the prior year second quarter. Revenues increased 0.8 percent primarily as a result of an increase in same store sales, which were partially offset by store closings.

Same store sales for the quarter increased 1.0 percent over the prior year 13-week period, consisting of a 1.7 percent increase in pharmacy sales, partially offset by a 0.3 percent decrease in front end sales. Pharmacy sales included an approximate 249 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores was flat over the prior year period. Prescription sales accounted for 67.9 percent of total drugstore sales, and third party prescription revenue was 97.0 percent of pharmacy sales.

Net income was $32.8 million or $0.03 per diluted share compared to last year’s second quarter net loss of $38.8 million or $0.05 per diluted share. Included in net income was a $62.2 million or $0.07 per diluted share charge from a loss on debt retirement on the previously announced refinancings that were completed during the quarter, partially offset by a recovery of $23.5 million or $0.02 per diluted share related to the settlement of a prescription drug antitrust case. The improvement in net income resulted primarily from an increase in Adjusted EBITDA and a decrease in interest expense, partially offset by the loss on debt retirement.

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