Item 7.01. Regulation FD Disclosure
Rite Aid Corporation
(the “Company”) is scheduled to make presentations to current and prospective investors on July 27, 2020 and July 30,
2020. A copy of the Company’s presentation is being furnished as Exhibit 99.1 to this Form 8-K.
The presentation includes
the non-GAAP financial measure, “Adjusted EBITDA.” The Company uses this non-GAAP measure in assessing its performance
in addition to net income, the most directly comparable GAAP financial measure. A reconciliation of Adjusted EBITDA, the most directly
comparable GAAP financial measure, is included in the presentation, which is furnished as Exhibit 99.1 hereto.
The Company believes
Adjusted EBITDA serves as an appropriate measure in evaluating the performance of its business and helps its investors better compare
the Company’s operating performance with its competitors. The Company defines Adjusted EBITDA as net income (loss) excluding
the impact of income taxes, interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility
closing and impairment, goodwill and intangible asset impairment charges, inventory write-downs related to store closings, gains
or losses on debt retirements, the Walgreens Boot Alliance, Inc. (“WBA”) merger termination fee, and other items (including
stock-based compensation expense, merger and acquisition-related costs, a non-recurring litigation settlement, severance, restructuring
related costs and costs related to facility closures and gain or loss on sale of assets). The current calculation of Adjusted EBITDA
reflects a modification made in the second quarter of fiscal 2019 to eliminate the add back of revenue deferrals related to our
customer loyalty program and to present amounts previously included within other as separate reconciling items. The Company references
this non-GAAP financial measure frequently in its decision-making because it provides supplemental information that facilitates
internal comparisons to historical periods and external comparisons to competitors. In addition, incentive compensation is based
in part on Adjusted EBITDA and the Company bases certain of its forward-looking estimates and budgets on Adjusted EBITDA. Adjusted
EBITDA should not be considered in isolation from, and is not intended to represent alternative measures of, operating results
or of cash flows from operating activities, as determined in accordance with GAAP. The Company’s definitions of Adjusted
EBITDA may not be comparable to similarly titled measurements reported by other companies or similar terms in the Company’s
debt facilities.
This Current Report
on Form 8-K and the documents included as exhibits hereto are for informational purposes only and shall not constitute, or form
a part of, an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities.
The information (including
Exhibit 99.1) being furnished pursuant to this “Item 7.01. Regulation FD Disclosure” shall not be deemed to be “filed”
for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to
the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act
of 1933, as amended, or the Securities Act, or the Exchange Act regardless of any general incorporation language in such filing.
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements made herein (including
Exhibit 99.1) 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 Company’s
ability to generate positive free cash flows in fiscal 2021; the expectations for the second quarter of fiscal 2021; the plan to
further reduce corporate expenses; the impact of the recent global coronavirus (“COVID-19”) pandemic on the Company’s
business; and any assumptions underlying any of the foregoing. 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: the impact of COVID-19 on the Company’s workforce, operations, stores, expenses and supply chain, and the operations
of the Company’s customers, suppliers and business partners; the Company’s ability to successfully implement its new
business strategy (including any delays and adjustments as a result of COVID-19) and improve the operating performance of its stores;
the Company’s high level of indebtedness and its ability to satisfy its obligations and the other covenants contained in
the Company’s debt agreements; general competitive, economic, industry, market, political (including healthcare reform),
and regulatory conditions, as well as factors specific to the markets in which the Company operates; the impact of private and
public third-party payers continued reduction in prescription drug reimbursements and efforts to encourage mail order; the Company’s
ability to manage expenses and its investments in working capital; the Company’s ability to achieve the benefits of the Company’s
efforts to reduce the costs of its generic and other drugs; outcomes of legal and regulatory matters; the Company’s ability
to partner and have relationships with health plans and health systems; and the continued integration of the Company’s new
senior management team and its ability to realize the benefits from its organizational restructuring. These and other risks, assumptions
and uncertainties are more fully described in Item 1A (Risk Factors) of the Company’s (i) most recent Annual Report on Form
10-K and (ii) the Quarterly Report on Form 10-Q for the quarter ended May 30, 2020, and in other documents that it files or furnishes
with the Securities and Exchange Commission,, which you are encouraged to read. To the extent that COVID-19 adversely affects the
Company’s business and financial results, it may also have the effect of heightening many of such risk factors.
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. Accordingly, you are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date they are made. The degree to which COVID-19 may affect the
Company’s results and operations will depend on future developments, which are highly uncertain, including, but not limited
to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact (including travel
bans and restrictions, quarantines, shelter-in-place orders and shutdowns), and how quickly and to what extent normal economic
and operating conditions can resume. As a result, the impact on the Company’s financial and operating results cannot be reasonably
estimated with specificity at this time, but the impact could be material. The Company undertakes no obligation to update such
statements to reflect events or circumstances arising after such date, and cautions investors not to place undue reliance on any
such forward-looking statements. These forward-looking statements should not be relied upon as representing the Company’s
assessments as of any date subsequent to the date of this communication.