<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 September 2, 1995
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>
<S> <C>
Outstanding at
Class of Common Stock September 2, 1995
--------------------- --------------------
$1.00 par value 83,758,467 shares
</TABLE>
<PAGE> 2
RITE AID CORPORATION
INDEX
<TABLE>
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheet as of September 2, 1995
and March 4, 1995 . . . . . . . . . . . . . . . . . . . . . . . 2
Condensed Consolidated Statement of Income Twenty-Six
Weeks Ended September 2, 1995 and August 27, 1994 . . . . . . . 4
Condensed Consolidated Statement of Income Thirteen
Weeks Ended September 2, 1995 and August 27, 1994 . . . . . . . 5
Condensed Consolidated Statement of Cash Flows
Twenty-Six Weeks Ended September 2, 1995 and
August 27, 1994 . . . . . . . . . . . . . . . . . . . . . . . . 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 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 11
</TABLE>
-1-
<PAGE> 3
- -------------------------------------------------------------------------------
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED September 2, 1995
- -------------------------------------------------------------------------------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
RITE AID CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
<TABLE>
<CAPTION>
ASSETS September 2, 1995 March 4, 1995
- ------ ----------------- ---------------
(UNAUDITED)
<S> <C> <C>
Current Assets
Cash $ 13,346 $ 7,148
Accounts Receivable, Net 243,678 239,859
Inventories 1,085,188 1,070,346
Prepaid Expenses and Other Current Assets 31,614 28,716
Net Current Assets of Discontinued
Operations - 27,151
---------- ----------
Total Current Assets 1,373,826 1,373,220
---------- ----------
Property, Plant and Equipment 1,496,720 1,427,091
Less: Accumulated Depreciation and
Amortization 655,574 648,612
---------- ----------
841,146 778,479
---------- ----------
Intangible Assets
Excess of Cost Over Underlying Equity in
Subsidiaries (less accumulated amortiza-
tion of $9,065 and $8,023) 132,974 99,653
Lease Acquisition Costs and Other
Intangible Assets (less accumulated
amortization of $108,489 and $106,592) 190,387 154,359
---------- ----------
323,361 254,012
---------- ----------
Other Assets 28,535 26,153
---------- ----------
Net Noncurrent Assets of Discontinued
Operations - 40,743
---------- ----------
$2,566,868 $2,472,607
========== ==========
</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 SEPTEMBER 2, 1995
- -------------------------------------------------------------------------------
Item 1. Financial Statements: (Continued)
RITE AID CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
<TABLE>
<CAPTION>
LIABILITIES September 2, 1995 March 4, 1995
- ----------- ----------------- ---------------
(UNAUDITED)
<S> <C> <C>
Current Liabilities
Short-Term Debt and
Current Maturities of Long-
Term Debt $ 57,197 $ 137,553
Accounts Payable 259,538 273,128
Income Taxes 41,235 38,241
Sales and Other Taxes Payable 13,485 13,796
Accrued Expenses 81,168 79,263
Reserve for Restructuring and
Other Charges 22,908 35,244
---------- ----------
Total Current Liabilities 475,531 577,225
---------- ----------
Long-Term Debt, Less Current Maturities 967,808 805,984
---------- ----------
Deferred Income Taxes 77,415 77,586
---------- ----------
Stockholders' Equity
Common Stock 90,291 90,290
Additional Paid-In Capital 61,124 60,655
Retained Earnings 995,910 955,111
Net Unrealized Gain on Marketable
Securities 4,839 2,847
Cumulative Pension Liability Adjustments (1,304) (1,314)
Treasury Stock, At Cost (104,746) (95,777)
---------- ----------
1,046,114 1,011,812
---------- ----------
$2,566,868 $2,472,607
========== ==========
</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 SEPTEMBER 2, 1995
- -------------------------------------------------------------------------------
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
SEPETEMBER 2, 1995 AUGUST 27, 1994
------------------- -----------------
<S> <C> <C>
NET SALES $2,683,240 $2,086,274
COSTS AND EXPENSES
Cost of Goods Sold Including
Occupancy Costs 1,975,544 1,529,582
Selling, General and
Administrative Expenses 561,255 438,044
Interest Expense 33,031 18,478
---------- ----------
2,569,830 1,986,104
---------- ----------
Income Before Income Taxes 113,410 100,170
Income Taxes 44,117 39,066
---------- ----------
NET INCOME $ 69,293 $ 61,104
========== ==========
EARNINGS PER SHARE $.83 $.72
==== ====
CASH DIVIDENDS PER COMMON SHARE $.34 $.30
==== ====
AVERAGE SHARES OUTSTANDING 83,844,000 85,320,000
</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 SEPTEMBER 2, 1995
- -------------------------------------------------------------------------------
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
SEPTEMBER 2, 1995 AUGUST 27, 1994
----------------- -----------------
<S> <C> <C>
NET SALES $1,328,399 $1,035,132
COSTS AND EXPENSES
Cost of Goods Sold Including
Occupancy Costs 979,333 759,616
Selling, General and
Administrative Expenses 281,804 221,329
Interest Expense 16,775 9,720
---------- ----------
1,277,912 990,665
---------- ----------
Income Before Income Taxes 50,487 44,467
Income Taxes 19,577 17,343
---------- ----------
NET INCOME $ 30,910 $ 27,124
========== ==========
EARNINGS PER SHARE $.37 $.32
==== ====
CASH DIVIDENDS PER COMMON SHARE $.17 $.15
==== ====
AVERAGE SHARES OUTSTANDING 83,758,000 84,901,000
</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 SEPTEMBER 2, 1995
- -------------------------------------------------------------------------------
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
SEPTEMBER 2, 1995 AUGUST 27, 1994
----------------- ----------------
<S> <C> <C>
Operating Activities
Income from Continuing Operations
Before Income Taxes $ 113,410 $ 100,170
Depreciation and Amortization 56,876 46,437
Accreted Interest on Zero Coupon Notes 6,368 5,867
Changes in Operating Assets and Liabilities,
Net of Effects from Acquisitions (86,072) (45,256)
--------- ---------
90,582 107,218
Discontinued Operations
Income from Operations Before Income Taxes 190 8,301
Depreciation and Amortization 700 4,775
Changes in Net Operating Assets - (6,196)
--------- ---------
890 6,880
Income Taxes Paid (29,322) (42,831)
--------- ---------
Net Cash Provided by Operations 62,150 71,267
--------- ---------
Investing Activities
Purchase of Property, Plant and Equipment (123,766) (73,230)
Purchase of Businesses, Net of Cash Acquired (84,385) -
Intangible Assets Acquired (16,330) (6,125)
Investing Activities of Discontinued Operations - (11,407)
Proceeds from Dispositions 136,357 14,500
Other (3,637) (1,084)
--------- ---------
Net Cash Provided (Used) by Investing
Activities (91,761) (77,346)
--------- ---------
Financing Activities
Proceeds from Sale of Senior Notes 197,702 -
Proceeds (Payments) of Commercial Paper (79,920) 59,549
(Payments) of Sinking Fund Debentures (44,980) (2,130)
Cash Dividends Paid (28,494) (25,749)
Acquisition of Stock for Treasury (8,969) (33,623)
Proceeds from the Sale of Stock 470 549
--------- ---------
Net Cash Provided (Used) by Financing
Activities 35,809 (1,404)
--------- ---------
Increase (Decrease) in Cash $ 6,198 $ (7,483)
========= =========
</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 SEPTEMBER 2, 1995
- -------------------------------------------------------------------------------
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 information 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 weeks and thirteen weeks
ended September 2, 1995 and August 27, 1994 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
On May 12, 1995, ADAP Inc. was sold to an investment group led by
Falcon Capital, Inc. Aggregate consideration for the transaction was
approximately $66,000,000, subject to certain adjustments primarily
based on the results of physical inventories. The management of Rite
Aid believes that the reserve amount for loss on disposal of ADAP is
adequate.
NOTE 4- COMMITMENTS AND CONTINGENCIES
The company had standby letters of credit of $30,740,000 and
$31,390,000 at September 2, 1995 and March 4, 1995, respectively.
The company is the defendant in claims and lawsuits arising in the
ordinary course of business. In the opinion of management, these
matters are covered adequately by insurance, or if not so covered, are
of such nature or involve such amounts as would not have a material
effect on the financial statements of the company if decided adversely.
-7-
<PAGE> 9
- -------------------------------------------------------------------------------
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED SEPTEMBER 2, 1995
- -------------------------------------------------------------------------------
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 September 2, 1995, and the related condensed
consolidated statements of income for the twenty-six and thirteen week periods
ended September 2, 1995 and August 27, 1994, and the condensed consolidated
statements of cash flows for the twenty-six week periods ended September 2,
1995 and August 27, 1994. 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 March 4, 1995, 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 21, 1995, 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 March 4, 1995, is fairly stated, in all material aspects,
in relation to the consolidated balance sheet from which it has been derived.
The company changed its method of accounting for investments in the fourth
quarter of fiscal year 1995 to conform with Statement of Financial Accounting
Standards No. 115.
KPMG PEAT MARWICK LLP
Harrisburg, Pennsylvania
October 4, 1995
-8-
<PAGE> 10
- -------------------------------------------------------------------------------
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED SEPTEMBER 2, 1995
- -------------------------------------------------------------------------------
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations:
Net sales for the thirteen-week and twenty-six week periods ended September 2,
1995 were $1,328,399,000 and $2,683,240,000, respectively, representing
increases of 28.3% and 28.6% over the same periods in the prior year. A
large portion of the sales gains can be attributed to the 224 Perry drugstores
acquired on January 27, 1995. Excluding the revenues from the Perry stores,
the sales increases were 10.4% for the quarter and 10.6% year to date.
Same-store sales increased 6.8% for the thirteen weeks and 7.1% for the
twenty-six weeks compared to 6.8% and 5.8% for the like periods last year.
During the quarter, the Company added 51 drugstores, including 30 locations
acquired from Pathmark in the New York metro area. Rite Aid also closed or
sold 183 stores primarily in the Florida, Massachusetts and Rhode Island
markets. These closings reflect the Company's continuing efforts to focus on
markets which present opportunity for greater market share. This activity
brought the total number of drugstores in operation to 2,704 as of September 2,
1995.
Cost of goods sold including occupancy costs, as a percentage of sales, was
73.7% and 73.6% for the current quarter and year-to-date period, respectively,
compared to 73.4% and 73.3% for similar periods last year. Third party
prescription sales continued to trend upward for the quarter, increasing to
62.3% of pharmacy sales from 58.4% a year earlier. These sales paid for by
third-party plans typically provide a lower gross margin than other pharmacy
sales.
Selling, general and administrative expenses amounted to 21.2% of sales for the
quarter and 20.9% for the twenty-six weeks. Last year, the operating expenses
to sales ratios were 21.4% and 21.0%, respectively. Despite the additional
costs associated with the integration of the Perry acquisition, the current
periods benefited from strong same-store sales gains and an aggressive expense
control program.
Interest expense rose during the current fiscal year to $16,775,000 for the
thirteen weeks and $33,031,000 year to date from $9,720,000 and $18,478,000 for
the year-earlier periods. The higher expense resulted from increased
borrowings by the Company used to finance the purchase of the Perry drugstores
and other acquisitions. Contributing to the increased expense was the general
rise in short term interest rates. The weighted average rate on the company's
commercial paper was 6.0% and 6.1% for the quarter and twenty-six week period,
respectively, compared to 4.5% and 4.2% for the same periods last year. In
July 1995, the Company moved to reduce the amount of outstanding debt by
redeeming its 9 5/8% sinking fund debentures totaling $44,980,000, with
proceeds received from the sale of ADAP.
During the quarter, Rite Aid sold 37 drugstores and the assets of 72 other
stores located in Florida to the Eckerd Corporation. In conjunction with the
sale, the Company closed its Florida distribution center. Additionally, Rite
Aid sold 33 stores and the assets of 21 other stores located in Massachusetts
and Rhode Island to Brooks Pharmacy and CVS. The company also completed the
sale of its nursing home pharmacy business. As a result of these transactions,
the Company received approximately $85,300,000 in cash proceeds. The gain from
these transactions will be used to offset the future obligations of the 72
leases in Florida not acquired by Eckerd, the remaining lease obligations of
the Massachusetts and Rhode Island stores, and the costs associated with
closing the Florida distribution center.
-9-
<PAGE> 11
- -------------------------------------------------------------------------------
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED SEPTEMBER 2, 1995
- -------------------------------------------------------------------------------
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations: (CONTINUED)
The reserve for restructuring and other charges remains adequate to cover the
unsettled leases of the 200 drugstores closed during fiscal 1995. The company
continues to negotiate with landlords of the closed stores to terminate their
leases. Where favorable terms cannot be agreed upon, the Company will endeavor
to sublet the locations until the leases expire.
Working capital was $898,295,000 at September 2, 1995 compared to $795,995,000
at March 4, 1995, and the current ratios were 2.9:1 and 2.4:1, respectively.
Cash provided by operations continues to be adequate to support operations,
contribute to investing activities and fund dividend distributions to our
shareholders. For the quarter and year-to-date period ended September 2, 1995,
dividends rose 13.3% to $.17 and $.34, respectively, when compared to
distributions of $.15 and $.30 in the previous year. Rite Aid's cash position
was enhanced during the period by the proceeds received from the sale of the
drugstores in Florida, Massachusetts and Rhode Island. These proceeds were
utilized to purchase the New York Pathmark Stores.
The company maintains a $600,000,000 revolving credit commitment to provide
additional borrowing capacity and support its commercial paper program. In
July 1995, Rite Aid filed a Form S-3 Shelf Registration Statement for
$375,000,000. Including $25,000,000 remaining on a previously filed shelf
registration, the Company now has the ability to issue $400,000,000 in
registered debt securities.
-10-
<PAGE> 12
- -------------------------------------------------------------------------------
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED SEPTEMBER 2, 1995
- -------------------------------------------------------------------------------
PART II
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
Item 11. - Statement regarding computation of per share
earnings
Item 15. - Copy of letter from independent accountants'
regarding unaudited interim financial information
Item 27. - Financial Data Schedule (EDGAR Filing Only)
-11-
<PAGE> 13
- -------------------------------------------------------------------------------
RITE AID CORPORATION
FORM 10-Q
FOR THE THIRTEEN WEEKS ENDED SEPTEMBER 2, 1995
- -------------------------------------------------------------------------------
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: October 4, 1995 /S/ Frank Bergonzi
-------------------------- ---------------------------
Frank Bergonzi
Executive Vice President,
Chief Financial Officer
-12-
<PAGE> 1
EXHIBIT 11
RITE AID CORPORATION AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
TWENTY-SIX WEEKS ENDED SEPTEMBER 2, 1995 AND AUGUST 27, 1994
(In Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Earnings Per Common Share-Assuming No Dilution
- ----------------------------------------------
Net Income $ 69,293 $ 61,104
======== ========
Weighted average number of common shares outstanding 83,844 85,320
======== ========
Primary earnings per common share $.83 $.72
==== ====
Earnings Per Common Share-Assuming Full Dilution
- ------------------------------------------------
Earnings
Net Income $ 69,293 $ 61,104
Add after tax interest expense applicable to 6 3/4%
convertible notes (a) 3,891 3,579
-------- --------
Net income as adjusted $ 73,184 $ 64,683
======== ========
Shares
Weighted average number of common shares outstanding 83,844 85,320
Assuming conversion of 6 3/4% convertible notes 6,395 6,395
Assuming exercise of options reduced by the number
of shares which could have been purchased with the
proceeds from exercise of such options 758 557
-------- --------
Weighted average number of common shares outstanding
as adjusted 90,997 92,272
======== ========
Earnings per common share assuming full dilution $.80(b) $.70(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 SEPTEMBER 2, 1995 AND AUGUST 27, 1994
(In Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Earnings Per Common Share-Assuming No Dilution
- ----------------------------------------------
Net Income $ 30,910 $ 27,124
======== ========
Weighted average number of common shares outstanding 83,758 84,901
======== ========
Primary earnings per common share $.37 $.32
==== ====
Earnings Per Common Share-Assuming Full Dilution
- ------------------------------------------------
Earnings
Net Income $ 30,910 $ 27,124
Add after tax interest expense applicable to 6 3/4%
convertible notes (a) 1,951 1,812
-------- --------
Net income as adjusted $ 32,861 $ 28,936
======== ========
Shares
Weighted average number of common shares outstanding 83,758 84,901
Assuming conversion of 6 3/4% convertible notes 6,395 6,395
Assuming exercise of options reduced by the number
of shares which could have been purchased with the
proceeds from exercise of such options 758 557
-------- --------
Weighted average number of common shares outstanding
as adjusted 90,911 91,853
======== ========
Earnings per common share assuming full dilution $.36(b) $.32(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
Exhibit 15
(KPMG PEAT MARWICK LLP LETTERHEAD)
Rite Aid Corporation
Camp Hill, Pennsylvania
Gentlemen:
Re: Registration Statement No. 2-87981; and No. 33-61185
With respect to the subject registration statements, we acknowledge our
awareness of the incorporation by reference therein of our report dated October
4, 1995 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
October 4, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
RITE AID CORPORATION AND SUBSIDIARIES EXHIBIT 27
ARTICLE 5 FINANCIAL DATA SCHEDULES
FORM 10-Q
SECOND QUARTER ENDED SEPTEMBER 2, 1995
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-02-1996
<PERIOD-END> SEP-02-1995
<CASH> 13,346
<SECURITIES> 0
<RECEIVABLES> 247,967
<ALLOWANCES> 4,289
<INVENTORY> 1,085,188
<CURRENT-ASSETS> 1,373,826
<PP&E> 1,496,720
<DEPRECIATION> 655,574
<TOTAL-ASSETS> 2,566,868
<CURRENT-LIABILITIES> 475,531
<BONDS> 967,808
<COMMON> 90,291
0
0
<OTHER-SE> 955,823
<TOTAL-LIABILITY-AND-EQUITY> 2,566,868
<SALES> 2,683,240
<TOTAL-REVENUES> 2,683,240
<CGS> 1,975,544
<TOTAL-COSTS> 1,975,544
<OTHER-EXPENSES> 561,255
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 33,031
<INCOME-PRETAX> 113,410
<INCOME-TAX> 44,117
<INCOME-CONTINUING> 69,293
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 69,293
<EPS-PRIMARY> .83
<EPS-DILUTED> .80
</TABLE>
