<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 27, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ----- to ------
Commission file number 1-5742
RITE AID CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 23-1614034
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
30 Hunter Lane 17011
Camp Hill, Pennsylvania (Zip Code)
(Address of principal executive offices)
</TABLE>
(717) 761-2633
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Outstanding at
Class of Common Stock August 27, 1994
--------------------- -----------------
<S> <C>
$1.00 par value 84,291,367 shares
</TABLE>
<PAGE> 2
RITE AID CORPORATION
INDEX
-----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheet August 27, 1994
and February 26, 1994 . . . . . . . . . . . . . . . . . . . 2
Condensed Consolidated Statement of Income Twenty-Six
Weeks Ended August 27, 1994 and August 28, 1993 . . . . . . 4
Condensed Consolidated Statement of Income Thirteen
Weeks Ended August 27, 1994 and August 28, 1993 . . . . . . 5
Condensed Consolidated Statement of Cash Flows
Twenty-Six Weeks Ended August 27, 1994 and
August 28, 1993 . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Condensed Consolidated Financial Statements . . . . 7
Independent Auditors' Report . . . . . . . . . . . . . . . . 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders . . . . 11
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 11
-1-
<PAGE> 3
- - -------------------------------------------------------------------------------
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED AUGUST 27, 1994
- - -------------------------------------------------------------------------------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
RITE AID CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
<TABLE>
<CAPTION>
ASSETS AUGUST 27, 1994 February 26, 1994
- - ------ --------------- -----------------
(UNAUDITED)
<S> <C> <C>
Current Assets
Cash $ 9,920 $ 17,403
Accounts and Notes Receivable 199,731 185,857
Inventories 890,158 844,074
Prepaid Expenses and Other Current Assets 20,735 19,231
Net Current Assets of Discontinued
Operations 48,064 58,860
--------- ----------
Total Current Assets 1,168,608 1,125,425
--------- ----------
Property, Plant and Equipment 1,249,697 1,197,261
Less: Accumulated Depreciation and
Amortization 586,096 558,567
--------- ----------
663,601 638,694
--------- ----------
Intangible Assets
Excess of Cost Over Underlying Equity in
Subsidiaries 26,498 27,149
Lease Acquisition Costs 93,406 98,893
--------- ----------
119,904 126,042
--------- ----------
Other Assets 21,921 21,125
--------- ----------
Net Noncurrent Assets of Discontinued
Operations 84,416 77,784
--------- ----------
$2,058,450 $1,989,070
========== ==========
</TABLE>
See accompanying independent auditors' report and notes to condensed
consolidated financial statements.
-2-
<PAGE> 4
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RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED AUGUST 27, 1994
- - -------------------------------------------------------------------------------
Item 1. Financial Statements: (Continued)
RITE AID CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
<TABLE>
<CAPTION>
LIABILITIES AUGUST 27, 1994 February 26, 1994
- - ----------- --------------- -----------------
(UNAUDITED)
<S> <C> <C>
Current Liabilities
Short-Term Debt and
Current Maturities of Long-Term Debt $ 31,423 $ 30,912
Accounts Payable 202,565 173,825
Income Taxes 4,082 5,016
Sales and Other Taxes Payable 9,936 10,569
Accrued Expenses 46,937 40,587
Reserve for Restructuring and Other Charges 68,710 101,300
---------- ----------
Total Current Liabilities 363,653 362,209
---------- ----------
Long-Term Debt, Less Current Maturities 676,193 613,418
---------- ----------
Deferred Income Taxes 61,707 58,729
---------- ----------
Stockholders' Equity
Common Stock 90,290 90,288
Additional Paid-In Capital 59,970 59,423
Retained Earnings 901,489 866,134
Cumulative Pension Liability Adjustments (2,014) (1,916)
Treasury Stock, At Cost (92,838) (59,215)
---------- ----------
956,897 954,714
---------- ----------
$2,058,450 $1,989,070
========== ==========
</TABLE>
See accompanying independent auditors' report and notes to condensed
consolidated financial statements.
-3-
<PAGE> 5
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RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED AUGUST 27, 1994
- - -------------------------------------------------------------------------------
Item 1. Financial Statements: (Continued)
RITE AID CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Dollars In Thousands Except Per Share Amounts)
(UNAUDITED)
<TABLE>
<CAPTION>
TWENTY-SIX TWENTY-SIX
WEEKS ENDED WEEKS ENDED
AUGUST 27, 1994 AUGUST 28, 1993
----------------- -----------------
<S> <C> <C>
NET SALES $2,086,274 $1,972,687
COSTS AND EXPENSES
Cost of Goods Sold Including
Occupancy Costs 1,529,582 1,444,659
Selling, General and
Administrative Expenses 438,044 426,142
Interest Expense 18,478 12,209
---------- ----------
1,986,104 1,883,010
---------- ----------
Income from Continuing Operations
Before Taxes 100,170 89,677
Income Taxes 39,066 36,464
---------- ----------
Income from Continuing Operations 61,104 53,213
Income from Discontinued Operations - 4,530
---------- ----------
NET INCOME $ 61,104 $ 57,743
========== ==========
EARNINGS PER SHARE
Continuing Operations $.72 $.61
Discontinued Operations - .05
---- ----
Net Income $.72 $.66
==== ====
CASH DIVIDENDS PER COMMON SHARE $.30 $.30
==== ====
AVERAGE SHARES OUTSTANDING 85,320,000 88,078,000
</TABLE>
See accompanying independent auditors' report and notes to condensed
consolidated financial statements.
-4-
<PAGE> 6
- - -------------------------------------------------------------------------------
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED AUGUST 27, 1994
- - -------------------------------------------------------------------------------
Item 1. Financial Statements: (Continued)
RITE AID CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Dollars In Thousands Except Per Share Amounts)
(UNAUDITED)
<TABLE>
<CAPTION>
THIRTEEN THIRTEEN
WEEKS ENDED WEEKS ENDED
AUGUST 27, 1994 AUGUST 28, 1993
----------------- -----------------
<S> <C> <C>
NET SALES $1,035,132 $ 973,147
COSTS AND EXPENSES
Cost of Goods Sold Including
Occupancy Costs 759,616 713,007
Selling, General and
Administrative Expenses 221,329 215,745
Interest Expense 9,720 6,158
---------- ----------
990,665 934,910
---------- ----------
Income from Continuing Operations
Before Taxes 44,467 38,237
Income Taxes 17,343 16,660
---------- ----------
Income from Continuing Operations 27,124 21,577
Income from Discontinued Operations - 2,008
---------- ----------
NET INCOME $ 27,124 $ 23,585
========== ==========
EARNINGS PER SHARE
Continuing Operations $.32 $.25
Discontinued Operations - .02
---- ----
Net Income $.32 $.27
==== ====
CASH DIVIDENDS PER COMMON SHARE $.15 $.15
==== ====
AVERAGE SHARES OUTSTANDING 84,901,000 88,082,000
</TABLE>
See accompanying independent auditors' report and notes to condensed
consolidated financial statements.
-5-
<PAGE> 7
- - -------------------------------------------------------------------------------
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED AUGUST 27, 1994
- - -------------------------------------------------------------------------------
Item 1. Financial Statements: (Continued)
RITE AID CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
TWENTY-SIX TWENTY-SIX
WEEKS ENDED WEEKS ENDED
AUGUST 27, 1994 AUGUST 28, 1993
----------------- -----------------
<S> <C> <C>
Operating Activities
Income from Continuing Operations
Before Income Taxes $ 100,170 $ 89,677
Depreciation and Amortization 46,437 45,171
Accreted Interest on Zero Coupon Notes 5,867 5,695
Restructuring and Other Charges (17,921) -
Changes in Operating Assets and Liabilities,
Net of Effects from Acquisitions (27,335) 11,992
--------- ---------
107,218 152,535
Discontinued Operations
Income from Operations Before Income Taxes 8,301 7,635
Depreciation and Amortization 4,775 4,342
Changes in Net Operating Assets (6,196) (4,812)
--------- ---------
6,880 7,165
Income Taxes Paid (42,831) (42,211)
--------- ---------
Net Cash Provided by Operations 71,267 117,489
--------- ---------
Investing Activities
Purchase of Property, Plant and Equipment (73,230) (73,613)
Purchase of Businesses, Net of Cash Acquired - (9,885)
Intangible Assets Acquired (6,125) (4,172)
Investing Activities of Discontinued Operations (11,407) (6,111)
Deposits Received from Sale of Discontinued
Operations 14,500 -
Other (1,084) (295)
--------- ---------
Net Cash Provided (Used) by Investing
Activities (77,346) (94,076)
--------- ---------
Financing Activities
Proceeds from Sale of Long-Term Debt Securities - 197,690
Proceeds (Payments) of Short-Term and
and Other Long-Term Debt 57,419 (103,933)
Cash Dividends Paid (25,749) (26,414)
Acquisition of Stock for Treasury (33,623) -
Proceeds from the Sale of Stock 549 782
--------- ---------
Net Cash Provided (Used) by Financing
Activities (1,404) 68,125
--------- ---------
Increase (Decrease) in Cash $ (7,483) $ 91,538
========= =========
</TABLE>
See accompanying independent auditors' report and notes to condensed
consolidated financial statements.
-6-
<PAGE> 8
- - -------------------------------------------------------------------------------
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED AUGUST 27, 1994
- - -------------------------------------------------------------------------------
Item 1. Financial Statements: (Continued)
RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1- BASIS OF PRESENTATION
The financial information included herein is unaudited. In
addition, the financial information does not include all
disclosures required under generally accepted accounting
principles because certain note information included in the
Company's annual report has been omitted; however, such infor-
mation reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of management,
necessary to a fair statement of the results for the interim
periods. The report of KPMG Peat Marwick LLP commenting upon
their review accompanies the condensed consolidated financial
statements included in Item 1 of Part I.
The results of operations for the twenty-six and thirteen weeks
ended August 27, 1994 and August 28, 1993 are not necessarily
indicative of the results to be expected for the full year.
NOTE 2- EARNINGS PER SHARE
Earnings per share were computed by dividing net income by the
weighted average number of shares of common stock outstanding
during the periods.
NOTE 3- DISCONTINUED OPERATIONS
In the fourth quarter of fiscal year 1994, the company announced
plans to concentrate corporate resources entirely on the drugstore
segment and sell the non-drugstore related businesses. The
businesses to be sold are ADAP auto parts stores, Encore Books
stores, Concord Custom Cleaners and Sera-Tec Biologicals. The
operating results of these businesses for the twenty-six weeks ended
August 27, 1994 were recorded to the reserve for discontinued opera-
tions which is included in net current assets of discontinuned
operations on the balance sheet. The statements of income and cash
flows for the prior fiscal year have been restated to segregate the
results of the discontinued operations.
The company entered into definitive contracts for the sale of ADAP
and Sera-Tec Biologicals. Both transactions are expected to be
completed in the third quarter and will result in estimated after-tax
proceeds totaling $130 million.
-7-
<PAGE> 9
- - -------------------------------------------------------------------------------
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED AUGUST 27, 1994
- - -------------------------------------------------------------------------------
Item 1. Financial Statements: (Continued)
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Rite Aid Corporation
Camp Hill, Pennsylvania
We have reviewed the condensed consolidated balance sheet of Rite Aid
Corporation and subsidiaries as of August 27, 1994, and the related condensed
consolidated statements of income for the thirteen and twenty-six weeks ended
August 27, 1994 and August 28, 1993, and the condensed consolidated statements
of cash flows for the twenty-six weeks ended August 27, 1994 and August 28,
1993. These financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit in
accordance with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Rite Aid Corporation and
subsidiaries as of February 26, 1994, and the related consolidated statements
of income, stockholders' equity and cash flows for the year then ended (not
presented herein); and in our report dated April 15, 1994, we expressed an
unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed consolidated
balance sheet as of February 26, 1994, is fairly presented, in all material
respects, in relation to the consolidated balance sheet from which it has been
derived.
KPMG PEAT MARWICK LLP
Harrisburg, Pennsylvania
September 28, 1994
-8-
<PAGE> 10
- - -------------------------------------------------------------------------------
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED AUGUST 27, 1994
- - -------------------------------------------------------------------------------
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations:
Net sales for the thirteen and twenty-six weeks ended August 27, 1994 were
$1,035,132,000 and $2,086,274,000, respectively, representing increases of 6.4%
and 5.8% over their year-earlier periods. Same-store sales increased 6.8% for
the quarter and 5.8% year to date. Not included in the net sales amounts for
the current periods were revenues from the 200 underperforming stores closed
under the restructuring plan. As of August 27, 1994, the company operated 2,520
drugstores, 30 of which were opened during fiscal year 1995.
Cost of goods sold including occupancy costs amounted to 73.4% of net sales for
the second quarter compared to 73.3% for the same period last year. Pressure
on margins continued as a greater share of pharmacy sales were paid for by third
party payers. For the current thirteen-week period, 58.4% of prescription
sales were paid for by third party plans versus 53.5% a year ago. Year to
date, the percentage of pharmacy sales reimbursed by third parties was 58.1%
for fiscal 1995, up from 53.3% in the prior year. Typically, third party
prescription sales have lower gross profit margins than other pharmacy sales.
Selling, general and administrative expenses were 21.4% of sales for the
thirteen weeks and 21.0% for the twenty-six weeks ended August 27, 1994.
Last year, the operating expense to sales ratios were 22.2% for the quarter
and 21.6% year to date. The higher same-store sales increases of 6.8% for
the current quarter compared to 2.5% a year earlier and 5.8% for the
twenty-six weeks from 3.2%, enhanced the company's ability to leverage
operating expenses. In addition, fiscal year 1995 benefitted from the
closing of the 200 underperforming drugstores since they historically had
higher operating expense to sales percentages.
Interest expense was $9,720,000 and $6,158,000 for the quarters ended August
27, 1994 and August 28, 1993, respectively. For the twenty-six week periods,
interest expense totaled $18,478,000 this fiscal year and $12,209,000 in
fiscal 1994. The increase resulted from the company's desire to fix interest
costs on a long-term basis at favorable rates by replacing $200,000,000 of
lower rate commercial paper in August 1993 with 20-year, 6 7/8% senior
debentures. The company also incurred additional debt to finance its stock
buyback strategy. In February 1994, approximately 2,077,000 shares were
acquired for $38,429,000 in a cash self-tender offer. Later that month, the
Board of Directors authorized a 5,000,000 share stock repurchase program.
As of August 27, 1994, 1,722,000 shares were purchased as part of this
program at a cost of $33,623,000. Another factor contributing to the higher
interest expense was a rise in the weighted average rate on the company's
commercial paper from 3.1% for both the second quarter and year-to-date
periods of fiscal 1994 to 4.5% and 4.2% for the current thirteen-week and
twenty-six week periods, respectively.
The current effective income tax rate was 39.0% versus 43.6% for the quarter
and 40.7% for the year-to-date periods a year earlier. In August 1993, the
federal statutory rate was increased from 34% to 35% by the Omnibus Budget
Reconciliation Act of 1993. Consequently, additional income taxes of
$1,657,000 were recorded in last year's second quarter as a result of
applying the newly enacted tax rate to the deferred tax balance as of
February 27, 1993.
-9-
<PAGE> 11
- - -------------------------------------------------------------------------------
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED AUGUST 27, 1994
- - -------------------------------------------------------------------------------
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations: (Continued)
Income from continuing operations amounted to $ 27,124,000 and $61,104,000 for
the thirteen and twenty-six weeks ended August 27, 1994, respectively,
compared to $21,577,000 and $53,213,000 for the same periods a year ago.
Included in the prior year earnings were net operating losses of $3,536,000
for the quarter and $6,173,000 year to date attributable to the 200
underperforming drugstores. For the thirteen and twenty-six week periods,
pre-tax charges of $7,774,000 and $15,204,000 associated with the 200
drugstores were recorded to the reserve for restructuring and other charges.
During the fourth quarter of fiscal 1994, the company announced plans to
concentrate corporate resources entirely on the drugstore segment and sell its
non-drugstore related businesses. Historical financial statements have been
restated to segregate the results of these discontinued operations. Net income
for the quarter ended August 28, 1993 was $23,585,000 and included $2,008,000
of income from discontinued operations. For the six-month period last year,
net income was $57,743,000 and included $4,530,000 from discontinued operations.
Rite Aid entered into definitive contracts for the sale of ADAP, Inc. and
Sera-Tec Biologicals. The stock of ADAP, a chain of 96 auto parts stores, is
being sold in a cash transaction for $75,000,000. Sera-Tec Biologicals, which
provides plasma for use in therapeutic and diagnostic products, is being sold
in a cash transaction for $70,000,000. Both transactions are expected to be
completed in the third quarter. Proceeds, estimated to be $130,000,000 after
income taxes and expenses, will be used to reduce corporate debt, fund the
current share repurchase program and for general capital needs.
Working capital was $804,955,000 at August 27, 1994, compared to $763,216,000
at February 26, 1994, and the current ratios were 3.2:1 and 3.1:1, respectively.
Cash provided by operations continues to be adequate to supply working capital,
provide cash for dividend payments and substantially contribute to investing
activities. Additional cash requirements are anticipated for the second half
of the fiscal year 1995 that relate to the 200 drugstore closings, stock buyback
program and 72-unit LaVerdiere's drugstore acquisition consummated in September
1994. These additional cash needs will be provided by the net proceeds
received from the sale of the non-drugstore businesses and external sources.
The company has $600,000,000 in revolving credit commitments in contemplation
of these and other future cash needs. There also remains $225,000,000 of
registered debt securities available on a Form S-3 shelf registration
statement filed in July 1993.
The company remains financially strong and the restructuring plan will allow
the company to focus entirely on the retail drug business, positioning itself
for future growth.
-10-
<PAGE> 12
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RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED AUGUST 27, 1994
- - -------------------------------------------------------------------------------
PART II
Item 4. Submission of Matters to a Vote of Security Holders:
(a) On July 7, 1994, Rite Aid Corporation held its annual meeting of
stockholders.
(b) The following directors were elected as members of the Board by
Proxy at the meeting:
Franklin Brown Preston Robert Tisch
Martin Grass
The following directors' terms of office continued after the meeting:
Alex Grass Leonard Stern
Philip Neivert Henry Taub
Gerald Tsai, Jr.
(c) Approval was given to amend the company's 1990 Omnibus Stock Incentive
Plan to increase the aggregate maximum number of shares for which
awards may be granted under the Omnibus Plan from 3,000,000 (which
number reflects an adjustment for a two-for-one stock split after the
Omnibus Plan was adopted) to 6,000,000. The Omnibus Plan was also
amended to limit the maximum number of shares for which options or
appreciation rights may be granted under the Plan to any employee
during any calendar year to 300,000.
(d) Approval was given to adopt the company's 1994 performance-based bonus
plan.
(e) A stockholder proposal was introduced at the meeting requesting the
Board of Directors to redeem the preferred stock purchase rights
issued in 1989 unless issuance is approved by the stockholders. A
majority of the votes received regarding this proposal voted
affirmatively. However, those affirmative votes were less than a
majority of the outstanding shares.
(f) No other matters were submitted to a vote of security holders at the
annual stockholders' meeting.
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
--------
Item 11. -Statements regarding computation of per share
earnings
Item 15. -Copy of letter from independent accountants'
regarding unaudited interim financial information
Item 27. -Financial Data Schedule
-11-
<PAGE> 13
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RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED AUGUST 27, 1994
- - -------------------------------------------------------------------------------
Item 6. Exhibits and Reports on From 8-K: (Continued)
(b) Reports on Form 8-K
-------------------
A Form 8-K dated August 3, 1994 was filed with Securities and Exchange
Commission announcing the sale of two of the company's discontinued
Operations, ADAP, Inc. and Sera-Tec Biologicals.
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 thereunto duly authorized.
<TABLE>
<S> <C>
RITE AID CORPORATION
(Registrant)
Date: September 28, 1994 /s/ Frank Bergonzi
-------------------------- -------------------------------
Frank Bergonzi
Senior Vice President,
Finance
</TABLE>
-12-
<PAGE> 14
EXHIBIT INDEX
Exhibit Description
- - ------- -----------
11 Statements regarding computation of per share earnings
15 Copy of letter from independent accountants' regarding
unaudited interim financial information
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 11
----------
RITE AID CORPORATION AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
TWENTY-SIX WEEKS ENDED AUGUST 27, 1994 AND AUGUST 28, 1993
(In Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C>
Earnings Per Common Share-Assuming No Dilution
- - ----------------------------------------------
Earnings
Income from continuing operations $ 61,104 $ 53,213
Income from discontinued operations - 4,530
-------- --------
Net Income $ 61,104 $ 57,743
======== ========
Weighted average number of common shares outstanding 85,320 88,078
======== ========
Primary earnings per common share
Continuing operations $.72 $.61
Discontinued operations - .05
---- ----
Net Income $.72 $.66
==== ====
Earnings Per Common Share-Assuming Full Dilution
- - ------------------------------------------------
Earnings
Income from continuing operations $ 61,104 $ 53,213
Add after tax interest expense applicable to 6 3/4%
convertible notes (a) 3,579 3,379
-------- --------
Income from continuing operations as adjusted 64,683 56,592
Income from discontinued operations - 4,530
-------- --------
Net income as adjusted $ 64,683 $ 61,122
======== ========
Shares
Weighted average number of common shares outstanding 85,320 88,078
Assuming conversion of 6 3/4% convertible notes (a) 6,395 6,397
Assuming exercise of options reduced by the number
of shares which could have been purchased with the
proceeds from exercise of such options 557 254
-------- --------
Weighted average number of common shares outstanding
as adjusted 92,272 94,729
======== ========
Earnings per common share assuming full dilution
Continuing operations $.70 $.60
Discontinued operations - .05
---- ----
Net Income $.70(b) $.65(b)
==== ====
</TABLE>
(a) Shown net of income taxes which were calculated at the company's effective
tax rate.
(b) This calculation is submitted in accordance with Regulation S-K item
601 (b)(11) although not required by APB Opinion No. 15 since dilution
is less than 3%.
<PAGE> 2
EXHIBIT 11
----------
RITE AID CORPORATION AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
THIRTEEN WEEKS ENDED AUGUST 27, 1994 AND AUGUST 28, 1993
(In Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C>
Earnings Per Common Share-Assuming No Dilution
- - ----------------------------------------------
Earnings
Income from continuing operations $ 27,124 $ 21,577
Income from discontinued operations - 2,008
-------- --------
Net Income $ 27,124 $ 23,585
======== ========
Weighted average number of common shares outstanding 84,901 88,082
======== ========
Primary earnings per common share
Continuing operations $.32 $.25
Discontinued operations - .02
---- ----
Net Income $.32 $.27
==== ====
Earnings Per Common Share-Assuming Full Dilution
- - ------------------------------------------------
Earnings
Income from continuing operations $ 27,124 $ 21,577
Add after tax interest expense applicable to 6 3/4%
convertible notes (a) 1,812 1,614
-------- --------
Income from continuing operations as adjusted 28,936 23,191
Income from discontinued operations - 2,008
-------- --------
Net income as adjusted $ 28,936 $ 25,199
======== ========
Shares
Weighted average number of common shares outstanding 84,901 88,082
Assuming conversion of 6 3/4% convertible notes (a) 6,395 6,397
Assuming exercise of options reduced by the number
of shares which could have been purchased with the
proceeds from exercise of such options 557 254
-------- --------
Weighted average number of common shares outstanding
as adjusted 91,853 94,733
======== ========
Earnings per common share assuming full dilution
Continuing operations $.32 $.25
Discontinued operations - .02
---- ----
Net Income $.32(b) $.27(b)
==== ====
</TABLE>
(a) Shown net of income taxes which were calculated at the company's effective
tax rate.
(b) This calculation is submitted in accordance with Regulation S-K item
601 (b)(11) although not required by APB Opinion No. 15 since dilution
is less than 3%.
<PAGE> 1
(KPMG PEAT MARWICK LLP LETTERHEAD)
Exhibit 15
----------
Rite Aid Corporation
Camp Hill, Pennsylvania
Gentlemen:
Re: Registration Statement No. 2-87981; No. 2-80136 and No. 33-63794
With respect to the subject registration statements, we acknowledge our
awareness of the incorporation by reference therein of our report dated
September 28, 1994 related to our review of interim financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such report is not
considered a part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the
meaning of Sections 7 and 11 of the Act.
Very truly yours,
KPMG PEAT MARWICK LLP
Harrisburg, Pennsylvania
September 28, 1994
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
RITE AID CORPORATION AND SUBSIDIARIES EXHIBIT 27
ARTICLE 5 FINANCIAL DATA SCHEDULES
FORM 10-Q
SECOND QUARTER ENDED AUGUST 27, 1994
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> QTR-2
<FISCAL-YEAR-END> MAR-04-1995
<PERIOD-END> AUG-27-1994
<CASH> 9,920
<SECURITIES> 0
<RECEIVABLES> 200,193
<ALLOWANCES> 462
<INVENTORY> 890,158
<CURRENT-ASSETS> 1,168,608
<PP&E> 1,249,697
<DEPRECIATION> 586,096
<TOTAL-ASSETS> 2,058,450
<CURRENT-LIABILITIES> 363,653
<BONDS> 676,193
<COMMON> 90,290
0
0
<OTHER-SE> 866,607
<TOTAL-LIABILITY-AND-EQUITY> 2,058,450
<SALES> 0
<TOTAL-REVENUES> 2,086,274
<CGS> 0
<TOTAL-COSTS> 1,529,582
<OTHER-EXPENSES> 437,924
<LOSS-PROVISION> 120
<INTEREST-EXPENSE> 18,478
<INCOME-PRETAX> 100,170
<INCOME-TAX> 39,066
<INCOME-CONTINUING> 61,104
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 61,104
<EPS-PRIMARY> .72
<EPS-DILUTED> .70
</TABLE>
