RAD Rite Aid Corp

• Revenues of $8.0 Billion for the Second Quarter, Up 4.8 Percent Year-Over-Year
• Second Quarter Net Income of $14.8 Million or $0.01 Per Share, Compared to the Prior Year’s Second Quarter Net Income of $21.5 Million or $0.02 Per Share
• Second Quarter Adjusted Net Income Per Diluted Share of $0.03, Compared to the Prior Year Second Quarter Adjusted Net Income Per Diluted Share of $0.06
• Adjusted EBITDA of $312.7 Million for the Second Quarter, Compared to the Prior Year’s Adjusted EBITDA of $346.8 Million

Rite Aid Corporation (NYSE:RAD) today reported operating results for its second fiscal quarter ended August 27, 2016.

For the second quarter, the company reported revenues of $8.0 billion, net income of $14.8 million, or $0.01 per diluted share, Adjusted net income of $35.5 million, or $0.03 per diluted share and Adjusted EBITDA of $312.7 million, or 3.9 percent of revenues.

“In the second quarter, we continued to drive positive results in our Pharmacy Services Segment, which includes our EnvisionRx PBM, and had strong performance in our front-end business,” said Chairman and CEO John Standley. “We also saw improvements in prescription drug costs, but these improvements were more than offset by the challenging reimbursement rate environment, which we expect to continue through the remainder of the fiscal year. Heading forward, we will remain focused on operating our business as efficiently as possible while pursuing key growth opportunities such as our flu immunization campaign and converting additional stores to the Wellness format, which continue to perform well and now represent nearly half of our chain.”

Second Quarter Summary

Revenues for the quarter were $8.0 billion compared to revenues of $7.7 billion in the prior year’s second quarter, an increase of $365.0 million or 4.8 percent. Retail Pharmacy Segment revenues were $6.5 billion and decreased 2.4 percent compared to the prior year period primarily as a result of a decrease in same store sales. Revenues in the company’s Pharmacy Services Segment, which was acquired on June 24, 2015, were $1.6 billion.

Same store sales for the quarter decreased 2.5 percent over the prior year, consisting of a 3.6 percent decrease in pharmacy sales, partially offset by a 0.1 percent increase in front-end sales. Pharmacy sales included an approximate 101 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores decreased 1.8 percent over the prior year period. Prescription sales accounted for 68.5 percent of total drugstore sales, and third party prescription revenue was 98.1 percent of pharmacy sales.

Net income was $14.8 million or $0.01 per diluted share compared to last year’s second quarter net income of $21.5 million or $0.02 per diluted share. The decline in operating results is due primarily to a higher LIFO charge, and a decline in Adjusted net income, partially offset by a $33.2 million loss on debt retirement in the prior year related to the redemption of the company’s 8.00% senior secured notes.

Adjusted net income and Adjusted net income per diluted share (which is reconciled to net income on the attached table) was $35.5 million or $0.03 per diluted share compared to last year’s second quarter Adjusted net income of $58.7 million or $0.06 per diluted share. The decline in Adjusted net income and Adjusted net income per share is due to a decrease in Adjusted EBITDA, partially offset by lower income tax and interest expenses.

Adjusted EBITDA (which is reconciled to net income on the attached table) was $312.7 million or 3.9 percent of revenues for the second quarter compared to $346.8 million or 4.5 percent of revenues for the same period last year. The decline in Adjusted EBITDA is due to a decrease of $51.0 million in the Retail Pharmacy Segment, resulting from lower gross profit and higher SG&A expense. Gross profit declined due to lower pharmacy gross profit partially offset by an increase in front end gross profit. Pharmacy gross profit decreased because of lower reimbursement rates and script count, partially offset by improvements in prescription drug costs. SG&A expense increased due to a shift in the timing of Memorial Day holiday pay and increased benefit costs. The decline in Retail Pharmacy Segment Adjusted EBITDA was partially offset by an increase of $16.8 million of Pharmacy Services Segment Adjusted EBITDA. This increase was due to strong operating results in the current year and the fact that prior year’s Pharmacy Services Segment results do not reflect a full quarter’s ownership of Envision Rx.

In the second quarter, the company opened 3 stores, relocated 6 stores, and remodeled 85 stores, bringing the total number of wellness stores chainwide to 2,214. The company also acquired 1 store and closed 14 stores, resulting in a total store count of 4,550 at the end of the second quarter. The company also opened 10 clinics in the second quarter, bringing the total to 90.

As previously announced on October 27, 2015, Rite Aid and Walgreens Boots Alliance, Inc. (“WBA”) entered into a definitive agreement under which WBA will acquire all outstanding shares of Rite Aid for $9.00 per share in cash. The board of directors of both companies and Rite Aid’s shareholders have approved the transaction, which is subject to certain conditions, including, among others, the receipt of approval under applicable antitrust laws and other customary closing conditions. The company continues to believe that the transaction will close in the second half of calendar year 2016.

Rite Aid is one of the nation’s leading drugstore chains with 4,550 stores in 31 states and the District of Columbia. Information about Rite Aid, including corporate background and press releases, is available through Rite Aid’s website at www.riteaid.com.

Cautionary Statement Regarding Forward Looking Statements

Statements in this release that are not historical and statements regarding the expected timing of the closing of the proposed merger with WBA and the ability of the parties to complete such transaction considering the various closing conditions and any assumptions underlying any of the foregoing, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” and “will” and variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to, our high level of indebtedness and our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our debt agreements, general economic, market and competitive conditions, our ability to improve the operating performance of our stores in accordance with our long term strategy, the impact of private and public third-party payers continued reduction in prescription drug reimbursements and efforts to encourage mail order, our ability to manage expenses and our investments in working capital, outcomes of legal and regulatory matters, changes in legislation or regulations, including healthcare reform, our ability to achieve the benefits of our efforts to reduce the costs of our generic and other drugs and risks related to the proposed merger. These and other risks, assumptions and uncertainties are more fully described in Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K, in the definitive proxy statement that we filed with the Securities and Exchange Commission on December 21, 2015 in connection with the proposed merger, and in other documents that we file or furnish with the Securities and Exchange Commission, which you are encouraged to read. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Additionally, there can be no assurance that the proposed merger will be completed, or if it is completed, that it will close within the anticipated time period or that the expected benefits of the proposed merger will be realized. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Rite Aid expressly disclaims any current intention to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise.

Reconciliation of Non-GAAP Financial Measures

The company separately reports financial results on the basis of Adjusted Net Income, Adjusted Net Income per diluted share, and Adjusted EBITDA, which are non-GAAP financial measures. See the attached tables for a reconciliation of Adjusted Net Income, Adjusted Net Income per diluted share and Adjusted EBITDA to net income, and net income per diluted share, which are the most directly comparable GAAP financial measures. Adjusted Net Income and Adjusted Net Income per diluted share exclude amortization of EnvisionRx intangible assets, merger and acquisition-related costs, loss on debt retirements and LIFO adjustments. Adjusted EBITDA is defined as net income excluding the impact of income taxes, interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, inventory write-downs related to store closings, debt retirements and other items (including stock-based compensation expense, merger and acquisition-related costs, severance and costs related to distribution center closures, gain or loss on sale of assets and revenue deferrals related to our customer loyalty program).

  RITE AID CORPORATION AND SUBSIDIARIES     CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (unaudited)       August 27, 2016 February 27, 2016 ASSETS Current assets: Cash and cash equivalents $ 136,093 $ 124,471 Accounts receivable, net 1,828,641 1,601,008 Inventories, net of LIFO reserve of $1,033,907 and $1,006,396 2,827,018 2,697,104 Prepaid expenses and other current assets   146,764     128,144   Total current assets 4,938,516 4,550,727 Property, plant and equipment, net 2,281,392 2,255,398 Goodwill 1,715,479 1,713,475 Other intangibles, net 921,348 1,004,379 Deferred tax assets 1,538,604 1,539,141 Other assets   215,630     213,890   Total assets $ 11,610,969   $ 11,277,010     LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt and lease financing obligations $ 24,399 $ 26,848 Accounts payable 1,695,840 1,542,797 Accrued salaries, wages and other current liabilities   1,331,707     1,427,250   Total current liabilities 3,051,946 2,996,895 Long-term debt, less current maturities 7,173,656 6,914,393 Lease financing obligations, less current maturities 46,641 52,895 Other noncurrent liabilities   722,057     731,399   Total liabilities 10,994,300 10,695,582   Commitments and contingencies - - Stockholders' equity: Common stock 1,052,125 1,047,754 Additional paid-in capital 4,841,988 4,822,665 Accumulated deficit (5,231,025 ) (5,241,210 ) Accumulated other comprehensive loss   (46,419 )   (47,781 ) Total stockholders' equity   616,669     581,428   Total liabilities and stockholders' equity $ 11,610,969   $ 11,277,010       RITE AID CORPORATION AND SUBSIDIARIES     CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (unaudited)      

Thirteen weeks endedAugust 27, 2016

Thirteen weeks endedAugust 29, 2015

Revenues $ 8,029,806 $ 7,664,776 Costs and expenses: Cost of revenues 6,113,063 5,742,485 Selling, general and administrative expenses 1,778,247 1,725,826 Lease termination and impairment charges 7,233 9,637 Interest expense 105,388 115,410 Loss on debt retirements, net - 33,205 Loss on sale of assets, net   174   281     8,004,105   7,626,844   Income before income taxes 25,701 37,932 Income tax expense   10,928   16,463 Net income $ 14,773 $ 21,469   Basic and diluted earnings per share:   Numerator for earnings per share: Income attributable to common stockholders - basic and diluted $ 14,773 $ 21,469       Denominator: Basic weighted average shares 1,044,198 1,029,793 Outstanding options and restricted shares, net   17,251   19,341   Diluted weighted average shares   1,061,449   1,049,134   Basic and diluted income per share $ 0.01 $ 0.02     RITE AID CORPORATION AND SUBSIDIARIES     CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (unaudited)      

Twenty-six weeks endedAugust 27, 2016

Twenty-six weeks endedAugust 29, 2015

Revenues $ 16,213,987 $ 14,312,337 Costs and expenses:

Cost of revenues

12,402,944 10,530,516 Selling, general and administrative expenses 3,571,494 3,425,411 Lease termination and impairment charges 13,014 14,659 Interest expense 210,501 239,017 Loss on debt retirements, net - 33,205 Loss on sale of assets, net   1,230   320     16,199,183   14,243,128   Income before income taxes 14,804 69,209 Income tax expense   4,619   28,904 Net income $ 10,185 $ 40,305   Basic and diluted earnings per share:   Numerator for earnings per share: Income attributable to common stockholders - basic and diluted $ 10,185 $ 40,305       Denominator: Basic weighted average shares 1,043,317 1,008,242 Outstanding options and restricted shares, net   17,210   18,959   Diluted weighted average shares   1,060,527   1,027,201   Basic and diluted income per share $ 0.01 $ 0.04     RITE AID CORPORATION AND SUBSIDIARIES     CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (unaudited)      

Thirteen weeks endedAugust 27, 2016

Thirteen weeks endedAugust 29, 2015

Net income $ 14,773 $ 21,469 Other comprehensive income: Defined benefit pension plans:

Amortization of prior service cost, net transition obligation and net actuarial losses included in net periodic pension cost, net of $451 and $398 tax expense

  681   598 Total other comprehensive income   681   598 Comprehensive income $ 15,454 $ 22,067     RITE AID CORPORATION AND SUBSIDIARIES     CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (unaudited)      

Twenty-six weeks endedAugust 27, 2016

Twenty-six weeks endedAugust 29, 2015

Net income $ 10,185 $ 40,305 Other comprehensive income: Defined benefit pension plans: Amortization of prior service cost, net transition obligation and net actuarial losses included in net periodic pension cost, net of $902 and $796 tax expense   1,362   1,195 Total other comprehensive income   1,362   1,195 Comprehensive income $ 11,547 $ 41,500     RITE AID CORPORATION AND SUBSIDIARIES     SUPPLEMENTAL SEGMENT OPERATING INFORMATION (Dollars in thousands) (unaudited)    

Thirteen weeks endedAugust 27, 2016

Thirteen weeks endedAugust 29, 2015

  Retail Pharmacy Segment Revenues (a) $ 6,485,482 $ 6,647,243 Cost of revenues (a)   4,666,133   4,786,730 Gross profit 1,819,349 1,860,513 LIFO charge   13,760   5,986 FIFO gross profit 1,833,109 1,866,499   Gross profit as a percentage of revenues 28.05% 27.99% LIFO charge as a percentage of revenues 0.21% 0.09% FIFO gross profit as a percentage of revenues 28.26% 28.08%   Selling, general and administrative expenses 1,708,633 1,678,909 Selling, general and administrative expenses as a percentage of revenues 26.35% 25.26%   Cash interest expense 100,105 109,796 Non-cash interest expense   5,273   5,608 Total interest expense 105,378 115,404   Adjusted EBITDA 262,643 313,602 Adjusted EBITDA as a percentage of revenues 4.05% 4.72%     Pharmacy Services Segment Revenues (a) $ 1,634,876 $ 1,071,889 Cost of revenues (a)   1,537,482   1,010,111 Gross profit 97,394 61,778   Gross profit as a percentage of revenues 5.96% 5.76%   Adjusted EBITDA 50,010 33,222 Adjusted EBITDA as a percentage of revenues 3.06% 3.10%  

(a) -

 

Revenues and cost of revenues include $90,552 and $54,356 of inter-segment activity for the thirteen weeks ended August 27, 2016 and August 29, 2015, respectively, that is eliminated in consolidation.

 

  RITE AID CORPORATION AND SUBSIDIARIES     SUPPLEMENTAL SEGMENT OPERATING INFORMATION (Dollars in thousands) (unaudited)    

Twenty-six weeks endedAugust 27, 2016

Twenty-six weeks endedAugust 29, 2015

  Retail Pharmacy Segment Revenues (a) $ 13,161,030 $ 13,294,804 Cost of revenues (a)   9,536,314   9,574,761 Gross profit 3,624,716 3,720,043 LIFO charge   27,511   11,973 FIFO gross profit 3,652,227 3,732,016   Gross profit as a percentage of revenues 27.54% 27.98% LIFO charge as a percentage of revenues 0.21% 0.09% FIFO gross profit as a percentage of revenues 27.75% 28.07%   Selling, general and administrative expenses 3,432,536 3,378,494 Selling, general and administrative expenses as a percentage of revenues 26.08% 25.41%   Cash interest expense 199,787 212,558 Non-cash interest expense   10,702   26,453 Total interest expense 210,489 239,011   Adjusted EBITDA 507,470 612,865 Adjusted EBITDA as a percentage of revenues 3.86% 4.61%     Pharmacy Services Segment Revenues (a) $ 3,237,235 $ 1,071,889 Cost of revenues (a)   3,050,908   1,010,111 Gross profit 186,327 61,778   Gross profit as a percentage of revenues 5.76% 5.76%   Adjusted EBITDA 91,185 33,222 Adjusted EBITDA as a percentage of revenues 2.82% 3.10%  

(a) -

 

Revenues and cost of revenues include $184,278 and $54,356 of inter-segment activity for the twenty-six weeks ended August 27, 2016 and August 29, 2015, respectively, that is eliminated in consolidation.

 

  RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (In thousands) (unaudited)        

Thirteen weeks endedAugust 27, 2016

Thirteen weeks endedAugust 29, 2015

    Reconciliation of net income to adjusted EBITDA: Net income $ 14,773 $ 21,469 Adjustments: Interest expense 105,388 115,410 Income tax expense 10,928 16,463 Depreciation and amortization 142,051 127,699 LIFO charge 13,760 5,986 Lease termination and impairment charges 7,233 9,637 Loss on debt retirements, net - 33,205 Other   18,520   16,955 Adjusted EBITDA $ 312,653 $ 346,824 Percent of revenues 3.89% 4.52%     RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (In thousands) (unaudited)        

Twenty-six weeks endedAugust 27, 2016

Twenty-six weeks endedAugust 29, 2015

    Reconciliation of net income to adjusted EBITDA: Net income $ 10,185 $ 40,305 Adjustments: Interest expense 210,501 239,017 Income tax expense 4,619 28,904 Depreciation and amortization 280,839 237,348 LIFO charge 27,511 11,973 Lease termination and impairment charges 13,014 14,659 Loss on debt retirements, net - 33,205 Other   51,986   40,676 Adjusted EBITDA $ 598,655 $ 646,087 Percent of revenues 3.69% 4.51%     RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION ADJUSTED NET INCOME (Dollars in thousands, except per share amounts) (unaudited)      

Thirteen weeks endedAugust 27, 2016

Thirteen weeks endedAugust 29, 2015

  Net income $ 14,773 $ 21,469 Add back - Income tax expense   10,928   16,463

Income before income taxes

25,701 37,932   Adjustments: Amortization of EnvisionRx intangible assets 20,853 17,040 LIFO charge 13,760 5,986 Loss on debt retirements, net - 33,205 Merger and Acquisition-related costs   1,402   9,617   Adjusted income before income taxes 61,716 103,780   Adjusted income tax expense   26,229   45,041 Adjusted net income $ 35,487 $ 58,739   Adjusted net income per diluted share:   Numerator for adjusted net income per diluted share: Adjusted net income $ 35,487 $ 58,739       Denominator: Basic weighted average shares 1,044,198 1,029,793 Outstanding options and restricted shares, net   17,251   19,341   Diluted weighted average shares   1,061,449   1,049,134   Net income per diluted share $ 0.01 $ 0.02   Adjusted net income per diluted share $ 0.03 $ 0.06     RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION ADJUSTED NET INCOME (Dollars in thousands, except per share amounts) (unaudited)      

Twenty-six weeks endedAugust 27, 2016

Twenty-six weeks endedAugust 29, 2015

  Net income $ 10,185 $ 40,305 Add back - Income tax expense   4,619   28,904 Income before income taxes 14,804 69,209   Adjustments: Amortization of EnvisionRx intangible assets 41,168 17,040 LIFO charge 27,511 11,973 Loss on debt retirements, net - 33,205 Merger and Acquisition-related costs   4,158   11,701   Adjusted income before income taxes 87,641 143,128   Adjusted income tax expense   27,344   59,828 Adjusted net income $ 60,297 $ 83,300   Adjusted net income per diluted share:   Numerator for adjusted net income per diluted share: Adjusted net income $ 60,297 $ 83,300       Denominator: Basic weighted average shares 1,043,317 1,008,242 Outstanding options and restricted shares, net   17,210   18,959   Diluted weighted average shares   1,060,527   1,027,201   Net income per diluted share $ 0.01 $ 0.04   Adjusted net income per diluted share $ 0.06 $ 0.08     RITE AID CORPORATION AND SUBSIDIARIES     CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (unaudited)      

Thirteen weeks endedAugust 27, 2016

Thirteen weeks endedAugust 29, 2015

    OPERATING ACTIVITIES: Net income $ 14,773 $ 21,469 Adjustments to reconcile to net cash used in operating activities: Depreciation and amortization 142,051 127,699 Lease termination and impairment charges 7,233 9,637 LIFO charge 13,760 5,986 Loss on sale of assets, net 174 281 Stock-based compensation expense 12,552 8,831 Loss on debt retirements, net - 33,205 Changes in deferred taxes 7,747 (7,966 ) Excess tax benefit on stock options and restricted stock (2,365 ) (18,049 ) Changes in operating assets and liabilities: Accounts receivable (152,725 ) (2,908 ) Inventories (216,911 ) (80,673 ) Accounts payable 34,693 (47,806 ) Other assets and liabilities, net   (8,060 )   (75,969 ) Net cash used in operating activities (147,078 ) (26,263 ) INVESTING ACTIVITIES: Payments for property, plant and equipment (119,641 ) (130,646 ) Intangible assets acquired (12,488 ) (29,169 ) Acquisition of businesses, net of cash acquired - (1,779,571 ) Proceeds from dispositions of assets and investments   3,745     3,243   Net cash used in investing activities (128,384 ) (1,936,143 ) FINANCING ACTIVITIES: Net proceeds from revolver 270,000 869,000 Principal payments on long-term debt (5,509 ) (655,640 ) Change in zero balance cash accounts (1,728 ) (17,034 ) Net proceeds from the issuance of common stock 1,587 4,727 Financing fees paid for early debt redemption - (26,003 ) Excess tax benefit on stock options and restricted stock 2,365 18,049 Deferred financing costs paid   -     (175 ) Net cash provided by financing activities   266,715     192,924   Decrease in cash and cash equivalents (8,747 ) (1,769,482 ) Cash and cash equivalents, beginning of period   144,840     1,922,129   Cash and cash equivalents, end of period $ 136,093   $ 152,647       SUPPLEMENTAL CASH FLOW INFORMATION   Payments for property, plant and equipment $ 119,641 $ 130,646 Intangible assets acquired   12,488     29,169   Total cash capital expenditures 132,129 159,815 Equipment received for noncash consideration 114 1,466 Equipment financed under capital leases   1,307     471   Gross capital expenditures $ 133,550   $ 161,752       RITE AID CORPORATION AND SUBSIDIARIES     CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (unaudited)      

Twenty-six weeks endedAugust 27, 2016

Twenty-six weeks endedAugust 29, 2015

    OPERATING ACTIVITIES: Net income $ 10,185 $ 40,305 Adjustments to reconcile to net cash provided by operating activities: Depreciation and amortization 280,839 237,348 Lease termination and impairment charges 13,014 14,659 LIFO charge 27,511 11,973 Loss on sale of assets, net 1,230 320 Stock-based compensation expense 23,696 16,201 Loss on debt retirements, net - 33,205 Changes in deferred taxes 1,998 1,574 Excess tax benefit on stock options and restricted stock (3,248 ) (20,869 ) Changes in operating assets and liabilities: Accounts receivable (227,255 ) 8,119 Inventories (157,471 ) (24,469 ) Accounts payable 150,339 31,909 Other assets and liabilities, net   (107,972 )   (8,703 ) Net cash provided by operating activities 12,866 341,572 INVESTING ACTIVITIES: Payments for property, plant and equipment (225,718 ) (271,683 ) Intangible assets acquired (28,869 ) (43,462 ) Acquisition of businesses, net of cash acquired - (1,779,571 ) Proceeds from dispositions of assets and investments   6,833     6,081   Net cash used in investing activities (247,754 ) (2,088,635 ) FINANCING ACTIVITIES: Proceeds from issuance of long-term debt - 1,800,000 Net proceeds from revolver 250,000 728,000 Principal payments on long-term debt (11,230 ) (661,217 ) Change in zero balance cash accounts 534 (51,309 ) Net proceeds from the issuance of common stock 3,958 8,105 Financing fees paid for early debt redemption - (26,003 ) Excess tax benefit on stock options and restricted stock 3,248 20,869 Deferred financing costs paid   -     (34,634 ) Net cash provided by financing activities   246,510     1,783,811   Increase in cash and cash equivalents 11,622 36,748 Cash and cash equivalents, beginning of period   124,471     115,899   Cash and cash equivalents, end of period $ 136,093   $ 152,647       SUPPLEMENTAL CASH FLOW INFORMATION   Payments for property, plant and equipment $ 225,718 $ 271,683 Intangible assets acquired   28,869     43,462   Total cash capital expenditures 254,587 315,145 Equipment received for noncash consideration 746 2,011 Equipment financed under capital leases   2,860     1,271   Gross capital expenditures $ 258,193   $ 318,427    

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Rite Aid CorporationINVESTORS:Matt Schroeder, 717-214-8867investor@riteaid.comorMEDIA:Susan Henderson, 717-730-7766