<PAGE> 1
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
October 11, 1999
-------------------------------------
(Date of earliest event reported)
(Date of Report)
RITE AID CORPORATION
-------------------------------------
(exact name of Registrant as specified in its charter)
Delaware 1-5742 23-1614034
----------------------------------------------------------------------------
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
30 Hunter Lane, Camp Hill, Pennsylvania 17011
------------------------------------------------------------
(Address of principal executive offices, including zip code)
(717) 761-2633
------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 5. OTHER EVENTS
The company issued a press release on October 11, 1999, disclosing
its preliminary second quarter sales and loss and its planned restatement of
historical financial information. The press release set forth as Exhibit 99 is
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press release dated October 11, 1999
<PAGE> 3
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.
October 12, 1999
RITE AID CORPORATION
By: /s/ Joseph S. Speaker
----------------------------
Name: Joseph S. Speaker
Title: Senior Vice President and
Chief Accounting Officer
<PAGE> 4
EXHIBIT INDEX
Exhibit No. Exhibit
- ----------- -------
99.1 Press release dated October 11, 1999
<PAGE> 1
[RITE AID LOGO] MAILING ADDRESS
P.O. Box 3165
Harrisburg, PA 17105
PRESS RELEASE GENERAL OFFICE
For Further Information Contact: 20 Hunter Lane
Camp Hill, PA 17011
Media: Investors:
Sarah Datz Doug Wilburne
(717) 975-5718 (717) 214-8835
RITE AID ANNOUNCES PRELIMINARY SECOND QUARTER SALES AND LOSS
CAMP HILL, PA (October 11, 1999) - Rite Aid Corporation (RAD-NYSE, PSE), today
announced preliminary, unaudited financial results for the second quarter ended
August 28, 1999.
Revenues for the 13-week quarter were $3,511.3 million, up 16.6 percent
compared to $3,011.0 a year ago. For the quarter, the Company anticipates a
loss of approximately $67.9 million or $0.26 per fully diluted share.
The anticipated loss for the quarter reflects pre-tax charges of approximately
$34 million accrued for costs associated with 106 stores closed or relocated
during the quarter. Also affecting anticipated results for the quarter was an
increase of $49 million in interest costs, primarily attributable to the costs
of financing the acquisition of PCS (acquired in January 1999) and higher
working capital needs.
Front-end sales during the quarter were 3.5 percent lower than those of the
second quarter of last year, with a 2.0 percent increase in East Coast
front-end sales partially offsetting a 6.2 percent decline in West Coast
front-end sales. As previously disclosed, the Company is in discussions to sell
its larger West Coast stores where year-over-year sales are the weakest.
Comparative earnings data and historic financial information are not provided
because the Company is planning to restate its financial statements for prior
years and interim periods to account for, among other things, adjustments
required to reflect a change in the accrual for non-cancelable lease
obligations relating to closed stores and to reflect non-cash charges related
to a change in the Company's method of accounting for impaired assets.
Same-store sales increased 8.0 percent during the second quarter as compared to
the year-ago period, reflecting comparable prescription sales growth of 17.5
percent and a 3.2 percent decline in front-end same-store sales. Prescription
revenue accounted for 58.8 percent of drugstore sales, and third party
prescription sales represented 87.6 percent of total pharmacy sales. In last
year's second quarter, prescription revenue accounted for 53.4 percent of
drugstore sales, and third party prescription revenue represented 85.0 percent
of pharmacy sales. Included in total sales for the period were $299.1 million
in revenue attributable to PCS Health Systems, Inc., Rite Aid's wholly owned
pharmacy benefits management subsidiary.
-more-
<PAGE> 2
RITE AID 2ND QUARTER EARNINGS-PAGE 2
Martin Grass, chairman and chief executive officer of Rite Aid said, "We are
disappointed with second quarter results, but we believe we are taking the
steps necessary to deliver better operating results and to restore the
financial health of the business. The fundamentals of the business are intact.
We expect that the improving trend with same-store front-end sales begun in
September will continue and we believe that corporate transactions, which have
been under discussion, will significantly improve our balance sheet."
During the quarter, the Company added or acquired 52 new drugstores, relocated
or expanded 58 units and closed 48 smaller units. Stores in operation at the
end of the quarter totaled 3,857. The Company has revised its planned
new/relocated store program for fiscal 2000 to about 250.
This press release may contain 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.
Factors that could cause actual results to differ materially from those
expressed or implied in such forward-looking statements include the preparation
of restated historic financial statements, final audit adjustments, the impact
of possible asset sales or other corporate transactions which the Company is
currently considering but the consummation of which is not assured, and whether
amendments to and an extension of the Company's financing arrangements can be
obtained from the lenders under the Company's outstanding $2.3 billion credit
facilities, $1.3 billion of which matures on October 29, 1999, the terms of any
amendments to those financing arrangements 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, the development of the internet market for pharmaceuticals,
availability of real estate, construction and start-up of drugstore and
distribution center facilities, 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.
Rite Aid is one of the nation's leading drugstore chains with annual revenues
of nearly $13 billion and approximately 3,800 stores in 30 states and the
District of Columbia. Rite Aid owns PCS Health Systems, Inc., which provides
pharmacy benefit management programs and services that can help improve patient
health and reduce health care costs. Rite Aid also owns approximately 22
percent of drugstore.com, a leading online source for health, beauty and
pharmacy products. Information about Rite Aid, including corporate background
and press releases, can be found at the company's Web site at www.RITEAID.com.
####
