UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported): June 27, 2018

 

Rite Aid Corporation

(Exact name of registrant as specified in its charter)

 

Delaware 1-5742 23-1614034

(State or Other Jurisdiction

of Incorporation)

 (Commission File Number)

(IRS Employer

Identification Number)

 

30 Hunter Lane, Camp Hill, Pennsylvania 17011

(Address of principal executive offices, including zip code)

 

(717) 761-2633

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On June 27, 2018, Rite Aid Corporation (the “Company”) reported its financial position and results of operations as of and for the thirteen week period ended June 2, 2018. The press release includes the non-GAAP financial measures, “Adjusted EBITDA,” “Adjusted Net Income (Loss),” “Adjusted Net Income (Loss) per Diluted Share,” “Pro-Forma Adjusted EBITDA,” “Adjusted EBITDA Gross Profit” and “Adjusted EBITDA SG&A.” The Company uses these non-GAAP measures in assessing its performance in addition to net income, gross profit and revenue, the most directly comparable GAAP financial measures. Reconciliations of: (i) Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Pro-Forma Adjusted EBITDA to net income, (ii) Adjusted EBITDA Gross Profit to gross profit, and (iii) Adjusted EBITDA SG&A to revenue, are included in the press release, 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, inventory write-downs related to store closings, debt retirements, the previously received Walgreens Boots Alliance merger termination fee, 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 the Company’s customer loyalty program). 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.

 

The Company defines Adjusted Net Income (Loss) as net income (loss) excluding the impact of amortization of EnvisionRx intangible assets, merger and acquisition-related costs, loss on debt retirements, LIFO adjustments, and the previously received Walgreens Boots Alliance, Inc. (“WBA”) merger termination fee. The Company calculates Adjusted Net Income (Loss) per Diluted Share using the Company’s above-referenced definition of Adjusted Net Income (Loss). The Company believes Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share serve as appropriate measures to be used in evaluating the performance of its business and help its investors better compare the Company’s operating performance over multiple periods.

 

The Company believes that Pro Forma Adjusted EBITDA is beneficial to investors to reflect what the Company’s financial results would have been had it received all of the fees that it would have earned pursuant to the Transition Services Agreement (the “TSA”) with WBA for the relevant period. The Company defines Pro Forma Adjusted EBITDA as Adjusted EBITDA plus the fees that would have been earned under the TSA with WBA for the relevant period, and in order to improve comparability, Pro Forma Adjusted EBITDA further adjusts results so that periods contain the same number of weeks.

 

In addition to Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Pro Forma Adjusted EBITDA, the Company occasionally refers to several other non-GAAP measures, on a less frequent basis, in order to describe certain components of the Company’s business and how the Company utilizes them to describe its results.

 

 

 

 

These measures include Adjusted EBITDA Gross Profit (gross profit excluding non-Adjusted EBITDA items) and Adjusted EBITDA SG&A (SG&A expenses excluding non-Adjusted EBITDA items).

 

Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share, Pro Forma Adjusted EBITDA, Adjusted EBITDA Gross Profit and Adjusted EBITDA SG&A should not be considered in isolation from, and are 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, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share, Pro Forma Adjusted EBITDA, Adjusted EBITDA Gross Profit and Adjusted EBITDA SG&A may not be comparable to similarly titled measurements reported by other companies or similar terms in the Company’s debt facilities.

 

In addition, a copy of the Company’s Earnings Release Supplement for the first quarter of fiscal 2019 is being furnished as Exhibit 99.2 to this Form 8-K.

 

The information (including Exhibits 99.1 and 99.2) being furnished pursuant to this “Item 2.02. Results of Operations and Financial Condition” 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.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

99.1Press Release, dated June 27, 2018.
99.2First Quarter Fiscal 2019 Supplemental Information.

 

 

 

 

 

 

EXHIBIT INDEX

 

Exhibit No. Description
99.1 Press Release, dated June 27, 2018.
99.2 First Quarter Fiscal 2019 Supplemental Information.

 

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

    RITE AID CORPORATION
         
         
Dated: June 27, 2018   By: /s/ James J. Comitale
      Name: James J. Comitale
      Title: Senior Vice President, General Counsel