<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 November 26, 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)
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)
(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.
Outstanding at
Class of Common Stock November 26, 1994
--------------------- -------------------
$1.00 par value 84,291,367 shares
<PAGE> 2
RITE AID CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheet November 26, 1994
and February 26, 1994 . . . . . . . . . . . . . . . . . . . 2
Condensed Consolidated Statement of Income Thirty-Nine
Weeks Ended November 26, 1994 and November 27, 1993 . . . . 4
Condensed Consolidated Statement of Income Thirteen
Weeks Ended November 26, 1994 and November 27, 1993 . . . . 5
Condensed Consolidated Statement of Cash Flows
Thirty-Nine Weeks Ended November 26, 1994 and
November 27, 1993 . . . . . . . . . . . . . . . . . . . . . 6
Notes to Condensed Consolidated Financial Statements . . . . 7
Independent Auditors' Report . . . . . . . . . . . . . . . . 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . .10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 13
-1-
<PAGE> 3
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED NOVEMBER 26, 1994
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
RITE AID CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
<TABLE>
<CAPTION>
ASSETS NOVEMBER 26, 1994 FEBRUARY 26, 1994
- - ------ ----------------- -----------------
(UNAUDITED)
<S> <C> <C>
Current Assets
Cash $ 15,140 $ 17,403
Accounts and Notes Receivable 191,756 185,857
Inventories 972,772 844,074
Prepaid Expenses and Other Current Assets 19,722 19,231
Net Current Assets of Discontinued
Operations 15,436 58,860
---------- ----------
Total Current Assets 1,214,826 1,125,425
---------- ----------
Property, Plant and Equipment 1,301,759 1,197,261
Less: Accumulated Depreciation and
Amortization 605,302 558,567
---------- ----------
696,457 638,694
---------- ----------
Intangible Assets
Excess of Cost Over Underlying Equity in
Subsidiaries 26,574 27,149
Lease Acquisition Costs 107,971 98,893
---------- ----------
134,545 126,042
---------- ----------
Other Assets 19,025 21,125
---------- ----------
Net Noncurrent Assets of Discontinued
Operations 58,493 77,784
---------- ----------
$2,123,346 $1,989,070
========== ==========
</TABLE>
See accompanying independent auditors' report and notes to condensed
consolidated financial statements.
-2-
<PAGE> 4
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED NOVEMBER 26, 1994
Item 1. Financial Statements: (Continued)
RITE AID CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
<TABLE>
<CAPTION>
LIABILITIES NOVEMBER 26, 1994 FEBRUARY 26, 1994
- - ----------- ----------------- -----------------
(UNAUDITED)
<S> <C> <C>
Current Liabilities
Short-Term Debt and
Current Maturities of Long-Term Debt $ 31,708 $ 30,912
Accounts Payable 244,762 173,825
Income Taxes 16,665 5,016
Sales and Other Taxes Payable 9,058 10,569
Accrued Expenses 54,831 40,587
Reserve for Restructuring and Other Charges 61,892 101,300
---------- ----------
Total Current Liabilities 418,916 362,209
---------- ----------
Long-Term Debt, Less Current Maturities 663,598 613,418
---------- ----------
Deferred Income Taxes 68,957 58,729
---------- ----------
Stockholders' Equity
Common Stock 90,290 90,288
Additional Paid-In Capital 60,425 59,423
Retained Earnings 916,169 866,134
Cumulative Pension Liability Adjustments (2,014) (1,916)
Treasury Stock, At Cost (92,995) (59,215)
---------- ----------
971,875 954,714
---------- ----------
$2,123,346 $1,989,070
========== ==========
</TABLE>
See accompanying independent auditors' report and notes to condensed
consolidated financial statements.
-3-
<PAGE> 5
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED NOVEMBER 26, 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>
THIRTY-NINE THIRTY-NINE
WEEKS ENDED WEEKS ENDED
NOVEMBER 26, 1994 NOVEMBER 27, 1993
----------------- -----------------
<S> <C> <C>
NET SALES $3,180,085 $2,981,273
COSTS AND EXPENSES
Cost of Goods Sold Including
Occupancy Costs 2,334,994 2,185,580
Selling, General and
Administrative Expenses 671,823 651,977
Interest Expense 28,956 20,252
---------- ----------
3,035,773 2,857,809
---------- ----------
Income from Continuing Operations
Before Taxes 144,312 123,464
Income Taxes 56,280 49,584
---------- ----------
Income from Continuing Operations 88,032 73,880
Income from Discontinued Operations - 6,824
---------- ----------
NET INCOME $ 88,032 $ 80,704
========== ==========
EARNINGS PER SHARE
Continuing Operations $1.04 $.84
Discontinued Operations - .08
----- ----
Net Income $1.04 $.92
===== ====
CASH DIVIDENDS PER COMMON SHARE $ .45 $.45
===== ====
AVERAGE SHARES OUTSTANDING 84,977,000 88,079,000
</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 NOVEMBER 26, 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
NOVEMBER 26, 1994 NOVEMBER 27, 1993
----------------- -----------------
<S> <C> <C>
NET SALES $1,093,811 $1,008,586
COSTS AND EXPENSES
Cost of Goods Sold Including
Occupancy Costs 805,412 740,921
Selling, General and
Administrative Expenses 233,779 225,835
Interest Expense 10,478 8,043
---------- ----------
1,049,669 974,799
---------- ----------
Income from Continuing Operations
Before Taxes 44,142 33,787
Income Taxes 17,214 13,120
---------- ----------
Income from Continuing Operations 26,928 20,667
Income from Discontinued Operations - 2,294
---------- ----------
NET INCOME $ 26,928 $ 22,961
========== ==========
EARNINGS PER SHARE
Continuing Operations $.32 $.23
Discontinued Operations - .03
---- ----
Net Income $.32 $.26
==== ====
CASH DIVIDENDS PER COMMON SHARE $.15 $.15
==== ====
AVERAGE SHARES OUTSTANDING 84,291,000 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 NOVEMBER 26, 1994
Item 1. Financial Statements: (Continued)
RITE AID CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
THIRTY-NINE THIRTY-NINE
WEEKS ENDED WEEKS ENDED
NOVEMBER 26, 1994 NOVEMBER 27, 1993
----------------- -----------------
<S> <C> <C>
Operating Activities
Income from Continuing Operations
Before Income Taxes $ 144,312 $ 123,464
Depreciation and Amortization 71,282 68,336
Accreted Interest on Zero Coupon Notes 8,947 8,591
Restructuring and Other Charges (23,118) -
Changes in Operating Assets and Liabilities,
Net of Effects from Acquisitions (24,629) (17,980)
--------- ---------
176,794 182,411
Discontinued Operations
Income from Operations Before Income Taxes 7,388 11,405
Depreciation and Amortization 7,196 6,574
Changes in Net Operating Assets (7,806) (7,543)
--------- ---------
6,778 10,436
Income Taxes Paid (52,549) (57,803)
--------- ---------
Net Cash Provided by Operations 131,023 135,044
--------- ---------
Investing Activities
Purchase of Property, Plant and Equipment (120,167) (122,835)
Purchase of Businesses, Net of Cash Acquired (51,205) (9,885)
Intangible Assets Acquired (8,968) (7,336)
Investing Activities of Discontinued Operations (12,206) (10,985)
Proceeds from Sale of Discontinued Operations 86,289 -
Other 1,715 (2,123)
--------- ---------
Net Cash Provided (Used) by Investing
Activities (104,542) (153,164)
--------- ---------
Financing Activities
Proceeds from Sale of Long-Term Debt Securities - 197,690
Proceeds (Payments) of Short-Term
and Other Long-Term Debt 42,029 (140,022)
Cash Dividends Paid (37,997) (39,620)
Acquisition of Stock for Treasury (33,780) -
Proceeds from the Sale of Stock 1,004 782
--------- ---------
Net Cash Provided (Used) by Financing
Activities (28,744) 18,830
--------- ---------
Increase (Decrease) in Cash $ (2,263) $ 710
========= =========
</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 NOVEMBER 26, 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 thirty-nine and thirteen weeks
ended November 26, 1994 and November 27, 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 thirty-nine weeks ended
November 26, 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.
In October 1994, Sera-Tec Biologicals was sold in a cash transaction
to a group of investors including Alex Grass, Chairman and
Chief Executive Officer of Rite Aid Corporation. The net after-tax
proceeds were approximately $56 million.
-7-
<PAGE> 9
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED NOVEMBER 26, 1994
Item 1. Financial Statements: (Continued)
RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3- DISCONTINUED OPERATIONS (Continued)
The sale of Encore Books was completed in November 1994 to Lauriat's
Inc., which operates a chain of bookstores primarily in the New England
market. The after-tax proceeds from this transaction will be
approximately $15.6 million.
A previously announced contract for the sale of ADAP, Inc. to GL
Capital, Inc. has been terminated. In late October, the president and
senior vice president of Operations of ADAP resigned. GL Capital
considered the loss of the top two operating managers a material
adverse change in the business and elected to terminate its purchase.
Alex Grass is a prinipal of GL Capital. Rite Aid intends to continue
the process of seeking a buyer for ADAP in accordance with the planned
disposal of all non-drugstore related businesses. Management
believes that the reserve established for the loss on disposition of
the discontinued operations remains adequate.
-8-
<PAGE> 10
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED NOVEMBER 26, 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 November 26, 1994 and the related condensed
consolidated statements of income for the thirteen and thirty-nine weeks ended
November 26, 1994 and November 27, 1993, and the condensed consolidated
statements of cash flows for the thirty-nine weeks ended November 26, 1994 and
November 27, 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
December 21, 1994
-9-
<PAGE> 11
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED NOVEMBER 26, 1994
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations:
Net sales for the third quarter ended November 26, 1994 were $1,093,811,000 or
8.4% higher than the sales reported for the same thirteen-week period a year
ago. Sales year to date were up 6.7% over last year to $3,180,085,000. The
net sales increases reflect same-store sales gains of 8.1% and 6.5 % for the
thirteen and thirty-nine weeks periods, respectively. Not included in the
sales amounts for the current periods were revenues from the 200
underperforming stores closed during Fiscal 1995 in accordance with the
restructuring plan. As of November 26, 1994, the company operated 2,600
drugstores. The store count includes acquisitions, after anticipated closing,
of 64 Laverdiere's drugstores and 11 Hook/Revco locations.
Cost of goods sold including occupancy costs, as a percentage of sales, was
73.6% and 73.4% for the current quarter and year-to-date periods versus 73.5%
and 73.3% for the respective year-earlier periods. The growth of third party
prescription sales, which usually have lower margins than other pharmacy sales,
continued to pressure gross profits. Third party prescription sales accounted
for 58.9% of pharmacy revenues for the thirteen weeks and 58.3% for the
thirty-nine weeks ended November 26, 1994. For the comparable periods last
year, third party to pharmacy sales were 54.4% and 53.7%, respectively.
Selling, general and administrative expenses were 21.4% of sales for the
thirteen weeks and 21.1% for the thirty-nine weeks ended November 26, 1994.
Last year, the operating expense to sales ratios were 22.4% for the quarter and
21.9% year to date. The higher same-store sales increases of 8.1% for the
current quarter compared to 2.8% a year earlier and 6.5% for the thirty-nine
weeks from 3.1%, enhanced the company's ability to leverage operating expenses.
In addition, fiscal 1995 benefitted from the closing of the 200 underperforming
drugstores which had historically higher operating expense to sales
percentages.
Interest expense amounted to $10,478,000 for the third quarter compared to
$8,043,000 a year ago. For the thirty-nine weeks, interest expense totaled
$28,956,000 from $20,252,000 last year. The higher interest expense can be
attributed to increases in outstanding indebtedness and rising short-term
interest rates. Additional debt was incurred to purchase the Laverdiere's and
Hook/Revco drugstores and to finance a stock buyback strategy. Beginning in
February 1994, the Company has purchased 3,799,000 shares of its common stock
at a cost of $72,209,000. The company has remaining authorization to acquire
3,278,000 more shares under its stock repurchase program. The weighted average
interest rate on the Company's commercial paper went from 3.1% for both the
third quarter and year- to-date periods last year to 5.0% and 4.5% for the
current thirteen and thirty- nine week periods, respectively. Contributing to
the higher year-to-date interest cost was the replacement of $ 200,000,000 of
lower rate commercial paper in August 1993 with 20-year, 6 7/8% senior
debentures. These 20-year debentures fix a large portion of interest expense
on a long-term basis at a favorable rate.
-10-
<PAGE> 12
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED NOVEMBER 26, 1994
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations: (Continued)
The effective income tax rate for both periods of fiscal 1995 was 39.0% versus
38.8% for the quarter and 40.2% for the year-to-date periods a year earlier.
The prior year's effective rate for the thirty-nine weeks reflects the August
1993 increase in the federal statutory rate from 34% to 35% legislated by the
Omnibus Budget Reconciliation Act of 1993. Accordingly, 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 balances as of February
27, 1993.
Income from continuing operations amounted to $ 26,928,000 and $88,032,000 for
the thirteen and thirty-nine weeks ended November 26, 1994, respectively,
compared to $20,667,000 and $73,880,000 for the same periods a year ago.
Included in the prior year earnings were net operating losses of $3,561,000 for
the quarter and $9,734,000 year to date attributable to the 200 underperforming
drugstores. For the current thirteen and thirty-nine week periods, pre-tax
charges of $6,161,000 and $21,365,000 associated with the 200 stores 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 November 27, 1993 was $22,961,000 and included $2,294,000
of income from discontinued operations. For the nine-month period last year,
net income was $80,704,000 and included $6,824,000 from discontinued
operations.
In October 1994, Sera-Tec Biologicals was sold in a cash transaction to a group
of investors. The sale of Encore Books was completed in November 1994 to
Lauriat's Inc., which operates a chain of bookstores primarily in the New
England market. Net after-tax proceeds from both transactions totaling
approximately $71,600,000 were used for general corporate purposes, including
the repayment of outstanding commercial paper of the Company.
A previously announced contract for the sale of ADAP, Inc. to GL Capital, Inc.
has been terminated. In late October, the president and senior vice president
of Operations of ADAP resigned. GL Capital considered the loss of the top two
operating managers a material adverse change in the business and elected to
terminate its purchase. Rite Aid intends to continue the process of seeking a
buyer for ADAP in accordance with the planned disposal of all non-drugstore
related businesses. Management believes that the reserve established for the
loss on disposition of the discontinued operations remains adequate.
-11-
<PAGE> 13
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED NOVEMBER 26, 1994
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations: (Continued)
Working capital was $795,910,000 at November 26, 1994, compared to $763,216,000
at February 26, 1994, and the current ratios were 2.9:1 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 near term that relate to lease settlement costs of the 200
closed drugstores and the stock repurchase program. These additional cash
needs will be provided by the net proceeds received from the sale of the two
remaining 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 allows the
Company to focus entirely on the retail drug business, positioning itself for
future growth.
-12-
<PAGE> 14
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED NOVEMBER 26, 1994
PART II
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
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the thirteen weeks ended
November 26, 1994.
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.
RITE AID CORPORATION
(Registrant)
Date: December 21, 1994 /s/ Frank Bergonzi
------------------------- ------------------------------
Frank Bergonzi
Senior Vice President,
Finance
-13-
<PAGE> 1
EXHIBIT 11
----------
RITE AID CORPORATION AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
THIRTY-NINE WEEKS ENDED NOVEMBER 26, 1994 AND NOVEMBER 27, 1993
(In Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Earnings Per Common Share-Assuming No Dilution
- - ----------------------------------------------
Earnings
Income from continuing operations $ 88,032 $ 73,880
Income from discontinued operations - 6,824
-------- --------
Net Income $ 88,032 $ 80,704
======== ========
Weighted average number of common shares outstanding 84,977 88,079
======== ========
Primary earnings per common share
Continuing operations $1.04 $.84
Discontinued operations - .08
----- ----
Net Income $1.04 $.92
===== ====
Earnings Per Common Share-Assuming Full Dilution
- - ------------------------------------------------
Earnings
Income from continuing operations $ 88,032 $ 73,880
Add after tax interest expense applicable to 6 3/4%
convertible notes (a) 5,458 5,141
-------- --------
Income from continuing operations as adjusted 93,490 79,021
Income from discontinued operations - 6,824
-------- --------
Net income as adjusted $ 93,490 $ 85,845
======== ========
Shares
Weighted average number of common shares outstanding 84,977 88,079
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 741 275
-------- --------
Weighted average number of common shares outstanding
as adjusted 92,113 94,751
======== ========
Earnings per common share assuming full dilution
Continuing operations $1.01 $.84
Discontinued operations - .07
----- ----
Net Income $1.01(b) $.91(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 NOVEMBER 26, 1994 AND NOVEMBER 27, 1993
(In Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Earnings Per Common Share-Assuming No Dilution
- - ----------------------------------------------
Earnings
Income from continuing operations $ 26,928 $ 20,667
Income from discontinued operations - 2,294
-------- --------
Net Income $ 26,928 $ 22,961
======== ========
Weighted average number of common shares outstanding 84,291 88,082
======== ========
Primary earnings per common share
Continuing operations $.32 $.23
Discontinued operations - .03
---- ----
Net Income $.32 $.26
==== ====
Earnings Per Common Share-Assuming Full Dilution
- - ------------------------------------------------
Earnings
Income from continuing operations $ 26,928 $ 20,667
Add after tax interest expense applicable to 6 3/4%
convertible notes (a) 1,879 1,771
-------- --------
Income from continuing operations as adjusted 28,807 22,438
Income from discontinued operations - 2,294
-------- --------
Net income as adjusted $ 28,807 $ 24,732
======== ========
Shares
Weighted average number of common shares outstanding 84,291 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 741 275
-------- --------
Weighted average number of common shares outstanding
as adjusted 91,427 94,754
======== ========
Earnings per common share assuming full dilution
Continuing operations $.32 $.24
Discontinued operations - .02
---- ----
Net Income $.32(b) $.26(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
December 21, 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
December 21, 1994
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
RITE AID CORPORATION AND SUBSIDIARIES EXHIBIT 27
ARTICLE 5 FINANCIAL DATA SCHEDULES
FORM 10-Q
THIRD QUARTER ENDED NOVEMBER 26, 1994
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> QTR-3
<FISCAL-YEAR-END> MAR-04-1995
<PERIOD-END> NOV-26-1994
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<ALLOWANCES> 522
<INVENTORY> 972,772
<CURRENT-ASSETS> 1,214,826
<PP&E> 1,301,759
<DEPRECIATION> 605,302
<TOTAL-ASSETS> 2,123,346
<CURRENT-LIABILITIES> 418,916
<BONDS> 663,598
<COMMON> 90,290
0
0
<OTHER-SE> 881,585
<TOTAL-LIABILITY-AND-EQUITY> 2,123,346
<SALES> 3,180,085
<TOTAL-REVENUES> 3,180,085
<CGS> 2,334,994
<TOTAL-COSTS> 2,334,994
<OTHER-EXPENSES> 671,643
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<NET-INCOME> 88,032
<EPS-PRIMARY> 1.04
<EPS-DILUTED> 1.01
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