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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
March 12, 1999
March 17, 1999
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(Date of earliest event reported)
(Date of Report)
RITE AID CORPORATION
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(Exact name of Registrant as specified in its charter)
Delaware 1-5742 23-1614034
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(State of (Commission File No.) (IRS Employer
Incorporation) Indentification No.)
30 Hunter Lane, Camp Hill, Pennsylvania 17011
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(Address of principal executives offices, including zip code)
(717) 761-2633
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
The Registrant issued the following press release on March 12,
1999:
[RITE AID LOGO] MAILING ADDRESS
P.O. Box 3165
PRESS RELEASE Harrisburg, PA 17105
For Further Information Contact:
GENERAL OFFICE
30 Hunter Lane
Camp Hill, PA 17011
Investors: Media:
Frank Bergonzi Amy Johnson
(717) 975-5750 (717) 730-7732
RITE AID ANNOUNCES PRELIMINARY FOURTH QUARTER EARNINGS ESTIMATES
Camp Hill, PA (March 12, 1999)--Rite Aid Corporation (RAD--NYSE, PSE)
announced today that the company's preliminary estimates are that earnings for
the fourth quarter will be approximately $.30 to $.32 per share on a fully
diluted basis as compared to First Call analysts' consensus estimates of $.52
per share. The company will announce results for the fourth quarter on March
29, 1999.
During the year, the company opened 578 new and relocated stores.
Thirty five percent of these units, or 206 stores, were opened in the last 45
days of the fourth quarter. The costs and expenses associated with the opening
or relocation of those 206 stores accounted for approximately $.07 of the
shortfall, which includes $.02 in greater than anticipated grand opening
advertising expenses. In addition, the fourth quarter loss on the liquidation
of inventory in the 208 stores closed during the third and fourth quarters
exceeded expectations by approximately $.04.
Rite Aid's new 875,000 square-foot, state-of-the-art distribution
center in Perryman, Maryland, became fully operational this week, supplying 760
stores in the mid-Atlantic region. Start-up software problems at Perryman
delayed the closing of the older Shiremanstown, Pennsylvania, distribution
center for 11 weeks. The incremental costs incurred in running both facilities
for that time period were approximately $.03 per share.
The acquisition of PCS Health Systems on January 22, 1999, five weeks
earlier than anticipated, did not allow sufficient time for the company to
realize any fourth quarter benefits from synergies. This was responsible for
approximately $.02 of the shortfall.
Rite Aid also implemented a revised merchandising strategy during the
quarter to reduce the selection in certain seasonal categories primarily in the
eastern and southern stores. The markdowns associated with this strategy were
responsible for approximately $.02 of the shortfall. Certain unanticipated
costs and settlements were responsible for the balance of the shortfall.
-more-
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RITE AID ANNOUNCES PRELIMINARY FOURTH QUARTER EARNINGS--PAGE 2
Martin L. Grass, Rite Aid's Chairman and Chief Executive Officer, stated:
"While we are obviously disappointed with the results, we anticipate that in
the current fiscal year we will begin to reap the benefits of our large and
successful effort to upgrade and expand our store base. We remain committed to
repositioning our store base to larger, free-standing units. We have concluded
that for the current year, a program of 300 new and relocated stores should
produce enhanced results. In addition, we are encouraged by the previously
announced continued improvement in both our East and West Coast same-store
pharmacy and front end sales, and by the approximately $200 million reduction
in our inventory during the year."
This press release contains forward-looking statements which are subject
to certain risks and uncertainties that could cause actual results to differ
materially from those expressed or implied in the forward-looking statements.
Among these statements are the company's preliminary estimates of earnings.
Factors that could cause actual results to differ materially from those
expressed or implied in such forward-looking statements include final audit
adjustments, as well as the other factors that typically could cause the
company's results to differ from those expressed or implied in forward-looking
statements. Additional factors could include competitive pricing pressures,
third party prescription reimbursement levels, continued consolidation of the
drugstore industry, consumer preferences, regulatory changes governing pharmacy
practices, general economic conditions, inflation, merchandise supply
constraints, interest rate movements, access to capital, availability of real
estate, construction and start-up of drugstore and distribution center
facilities, and the effects of technological difficulties including
remediation of year 2000 compliance issues. Consequently, all of the
forward-looking statements made in this press release are qualified by these
and other factors, risks and uncertainties. Readers are also directed to
consider other risks and uncertainties discussed in documents filed by the
company with the Securities and Exchange Commission.
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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.
March 17, 1999
RITE AID CORPORTAION
By: /s/ Elliot S. Gerson
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Elliot S. Gerson
Executive Vice President
& General Counsel
