Rite Aid Reports Net Income of $18.8 Million and Adjusted EBITDA of $299.3 Million for First Quarter Fiscal 2016
Source: Business Wire
First Quarter Net Income of $18.8 Million and Net Income per Diluted Share of $0.02, Which Includes $0.02 of EnvisionRx Acquisition Related Expenses, Compared to Prior Year’s First Quarter Net Income of $41.4 Million and Net Income per Diluted Share of $0.04
First Quarter Adjusted EBITDA of $299.3 Million Compared to Adjusted EBITDA of $282.6 Million in Prior First Quarter
Rite Aid Updates Outlook for Fiscal 2016 to Include the Expected Results of EnvisionRx
Rite Aid Corporation (NYSE:RAD) today reported operating results for its fiscal first quarter ended May 30, 2015. The company reported revenues of $6.6 billion, net income of $18.8 million or $0.02 per diluted share, and Adjusted EBITDA of $299.3 million, or 4.5 percent of revenues.
“Our first-quarter results reflect the continued progress we’re making in positioning Rite Aid for growth, including increases in same-store sales, same-store prescription count and Adjusted EBITDA,” said Rite Aid Chairman and CEO John Standley. “We generated these positive results while also making significant strategic investments to continue our transformation into a retail healthcare company. Through initiatives like adding RediClinics to Rite Aid stores, launching the ground-breaking wellness+ with Plenti program and our pending acquisition of EnvisionRx, we remain highly focused on delivering a differentiated experience to our customers and a higher level of care to the communities we serve.”
First Quarter Summary
Revenues for the quarter were $6.6 billion versus revenues of $6.5 billion in the prior year’s first quarter. Revenues increased 2.8 percent primarily as a result of an increase in same store sales.
Same store sales for the quarter increased 2.9 percent over the prior year, consisting of a 0.6 percent increase in front-end sales and a 3.9 percent increase in pharmacy sales. Pharmacy sales included an approximate 165 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores increased 1.6 percent over the prior year period. Prescription sales accounted for 69.1 percent of total drugstore sales, and third party prescription revenue was 97.7 percent of pharmacy sales.
Net income was $18.8 million or $0.02 per diluted share compared to last year’s first quarter net income of $41.4 million or $0.04 per diluted share. The decline in net income resulted primarily from interest and other incremental pre-tax costs of $36.0 million, or $0.02 per share on an after-tax basis, incurred in connection with the company’s pending acquisition of EnvisionRx. These incremental costs were partially offset by an increase in Adjusted EBITDA.
Adjusted EBITDA (which is reconciled to net income on the attached table) was $299.3 million or 4.5 percent of revenues for the first quarter compared to $282.6 million or 4.4 percent of revenues for the like period last year. Adjusted EBITDA improved due to an increase in front-end and pharmacy gross profit, partially offset by an increase in selling, general and administrative expenses related to our higher level of sales, clinic expansion and the roll-out of the Plenti program.
In the first quarter, the company relocated 2 stores, remodeled 108 stores and expanded 1 store, bringing the total number of wellness stores chainwide to 1,741. The company also closed 4 stores, resulting in a total store count of 4,566 at the end of the first quarter.
Rite Aid Updates Fiscal 2016 Guidance to Include the Expected Results of EnvisionRx
Rite Aid has updated its fiscal 2016 guidance to reflect the expected results of EnvisionRx for the period subsequent to the transaction close, which is expected to occur by the beginning of July. Rite Aid has also updated its guidance to reflect the cost to refinance its 8% First Lien Notes due 2020. Revenues, which includes PBM revenues are expected to be between $30.7 billion and $31.2 billion. Drugstore sales are expected to be between $26.9 billion and $27.4 billion and same store sales to range from an increase of 2.50 percent to an increase of 4.50 percent over fiscal 2015. Adjusted EBITDA (which is reconciled to net income on the attached table) guidance is expected to be between $1.350 billion and $1.450 billion and net income is expected to be between $150.0 million and $230.0 million or income per diluted share of $0.14 to $0.22. Capital expenditures are expected to be approximately $665 million.
Conference Call Broadcast
Rite Aid will hold an analyst call at 8:30 a.m. Eastern Time today with remarks by Rite Aid's management team. The call will be simulcast via the internet and can be accessed through the websites www.riteaid.com in the conference call section of investor information and www.StreetEvents.com. Slides related to materials discussed on the call will be available on both sites. A playback of the call will be available on both sites starting at 12 p.m. Eastern Time today. A playback of the call will also be available by telephone beginning at 12 p.m. Eastern Time today until 11:59 p.m. Eastern Time on June 20, 2015. The playback number is 1-855-859-2056 from within the U.S. and Canada or 1-404-537-3406 from outside the U.S. and Canada with the eight-digit reservation number 59491036.
