Business Wire | Dec 21, 2021 12:38PM EST

Rite Aid Corporation Reports Fiscal 2022 Third Quarter Results

Dec. 21, 2021

CAMP HILL, Pa.--(BUSINESS WIRE)--Dec. 21, 2021--Rite Aid Corporation (NYSE: RAD) today reported operating results for its third fiscal quarter ended November 27, 2021.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20211220005684/en/

(Photo: Business Wire)

For the third quarter, the company reported net loss from continuing operations of $36.1 million, or $0.67 loss per share, Adjusted net income from continuing operations of $8.2 million, or $0.15 income per share, and Adjusted EBITDA from continuing operations of $154.8 million, or 2.5 percent of revenues.

"We delivered a solid quarter as we grew Adjusted EBITDA by 12.7 percent versus last year," said Heyward Donigan, president and chief executive officer, Rite Aid. "Despite challenges in the labor market, our pharmacists and store teams were able to meet the unprecedented volumes for COVID and flu immunizations, COVID testing and other clinical services, which clearly demonstrates our Lean work to free up capacity is paying off."

"We have also taken steps to drive increased value for all of Elixir's PBM clients by entering into a new rebate aggregation agreement with Prime Therapeutics. In addition to the benefit to clients, this partnership will enable Elixir to be more competitive in the marketplace and improve profit margins."

"Today, we also announced the first phase of a store closure program to reduce costs, drive improved profitability and ensure that we have a healthy foundation to grow from, with the right stores in the right locations, for the communities we serve and for our business. We have identified an initial 63 stores for closure that is expected to provide an annual EBITDA benefit of approximately $25 million."

"We are encouraged by our recent momentum and expect to deliver a significant increase in our fourth quarter Adjusted EBITDA results compared to last year. As a result, we are raising our guidance for Adjusted EBITDA for Fiscal 2022."

"Finally, I want to thank each and every one of our associates for everything they do. It is my greatest privilege to work alongside such a tremendous team, and I am forever grateful for their passion and commitment to our company, our customers and each other."

Consolidated Third Quarter Summary

(dollars in Thirteen Week Period Thirty-nine Week Periodthousands) Ended Ended

November November November November 27, 2021 28, 2020 27, 2021 28, 2020

Revenues from $ 6,228,880 $ 6,117,038 $ 18,502,865 $ 18,126,384continuing operations

Net (loss) incomefrom continuing (36,058) 4,324 (149,416) (81,575)operations

Adjusted EBITDA from 154,793 137,405 399,830 396,400continuing operations

Revenues from continuing operations for the quarter were $6.23 billion compared to revenues from continuing operations of $6.12 billion in the prior year's quarter. The 1.8 percent increase in revenues was driven by growth at the Retail Pharmacy Segment, partially offset by a decline at the Pharmacy Services Segment.

Net loss from continuing operations was $36.1 million, or $0.67 per share, compared to last year's third quarter net income from continuing operations of $4.3 million, or $0.08 per share. The increase in net loss is due primarily to higher facility exit and impairment charges driven by the Company's store closure decisions. Other variance drivers include a LIFO charge in the current quarter compared to a LIFO credit in the prior year third quarter and a lower gain on the sale of assets. These items were partially offset by an increase in Adjusted EBITDA and lower depreciation and amortization expense.

Retail Pharmacy Segment

(dollars in thousands) Thirteen Week Period Thirty-nine Week Period Ended Ended

November November November November 27, 2021 28, 2020 27, 2021 28, 2020

Revenues from $ 4,432,508 $ 4,109,592 $ 13,061,408 $ 12,250,775continuing operations

Adjusted EBITDA from 125,931 88,557 290,214 273,879continuing operations

Retail Pharmacy Segment revenues from continuing operations increased 7.9 percent over the prior year quarter, driven by an increase in same store sales and the inclusion of Bartell's results this quarter. Same store sales from continuing operations for the third quarter increased 4.4 percent over the prior year period, consisting of a 5.9 percent increase in pharmacy sales and a 0.4 percent increase in front-end sales. Front-end same store sales, excluding cigarettes and tobacco products, increased 1.0 percent. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, increased 7.9 percent over the prior year period. In addition to the benefit from 4 million COVID-19 vaccinations, maintenance prescriptions increased 1.7 percent while other acute prescriptions increased 3.9 percent on a same store basis when excluding COVID-19, flu and all other ancillary vaccinations. Prescription sales from continuing operations accounted for 71.1 percent of total drugstore sales. Total store count at the end of the third quarter was 2,488.

Retail Pharmacy Segment Adjusted EBITDA from continuing operations was $125.9 million, or 2.8 percent of revenues, for the third quarter compared to last year's third quarter Adjusted EBITDA from continuing operations of $88.6 million, or 2.2 percent of revenues. The increase in Adjusted EBITDA was due to increased gross profit, partially offset by an increase in selling, general and administrative (SG&A) expenses. Gross profit benefited from higher pharmacy same store sales, including immunizations, partially offset by pharmacy reimbursement rate pressures that were not fully offset by generic drug cost reductions and an increase in front-end gross profit resulting from higher front-end same store sales and a reduction in markdowns. SG&A expenses were negatively impacted by incremental payroll costs to support COVID immunizations, increases in bonus expense for store, field and corporate associates, increases in workers compensation costs and cycling the benefit from the prior year change to modernize our associate PTO plans.

Pharmacy Services Segment

(dollars in thousands) Thirteen Week Period Thirty-nine Week Period Ended Ended

November November November November 27, 2021 28, 2020 27, 2021 28, 2020

Revenues from $ 1,858,830 $ 2,084,402 $ 5,629,325 $ 6,100,026continuing operations

Adjusted EBITDA from 28,862 48,848 109,616 122,521continuing operations

Pharmacy Services Segment revenues were $1.9 billion for the quarter, a decrease of 10.8 percent compared to the prior year quarter. The decrease in revenues was primarily the result of a planned decrease in Elixir Insurance membership and a previously announced client loss.

Pharmacy Services Segment Adjusted EBITDA from continuing operations was $28.9 million, or 1.6 percent of revenues, for the third quarter compared to last year's third quarter Adjusted EBITDA from continuing operations of $48.8 million, or 2.3 percent of revenues. Gross profit dollars were negatively impacted from the decline in revenues, a reduction in rebates and an increase in the Medical Loss Ratio at Elixir Insurance. SG&A expenses improved due to reduced payroll and a reduction in broker commissions.

Retail Store Base Assessment

Rite Aid is conducting a rigorous assessment of its store base and has implemented a store closure program. The program's primary focus is to reduce costs, drive improved profitability and ensure that Rite Aid has a healthy foundation to grow from, with the right stores in the right locations, for the communities it serves and for its business.

As a result of this ongoing review, Rite Aid identified 63 stores for closure that is expected to provide an annual EBITDA benefit of approximately $25 million. The closures began this past November. Associates impacted by these store closures are being offered the opportunity to transfer to another store. The review work will continue, and the Company anticipates the number of closures to increase as it finalizes the review over the next several months.

Outlook for Fiscal 2022

As a result of the momentum in the third quarter, and an anticipated increase in demand for COVID-19 vaccines and testing versus prior expectations, Rite Aid Corporation is raising its fiscal 2022 Adjusted EBITDA guidance.

Total revenues are expected to be between $24.4 billion and $24.7 billion in fiscal 2022. Pharmacy Services Segment revenue is expected to be between $7.1 billion and $7.2 billion (net of any intercompany revenues to the Retail Pharmacy Segment).

Net loss is expected to be between $230 million and $189 million.

Adjusted EBITDA is expected to be between $500 million and $520 million.

Adjusted net loss per share is expected to be between $0.49 and $0.04.

Capital expenditures are expected to be approximately $275 million.

Conference Call Broadcast

Rite Aid will hold an analyst call at 8:30 a.m. Eastern Time today with remarks by Rite Aid's management team. The call will be broadcast via the Internet at https://investors.riteaid.com. The telephone replay will be available beginning at 12:00 p.m. Eastern Time on Tuesday, Dec. 21, 2021 and ending at 11:59 p.m. Eastern Time on Jan. 21, 2022. To access the replay of the call, telephone (800) 585-8367 or (416) 621-4642 and enter the seven-digit reservation number 1787289. The webcast replay of the call will also be available at https://investors.riteaid.com starting at 12 p.m. Eastern Time today. The playback will be available until the company's next conference call.

About Rite Aid Corporation

Rite Aid Corporation is on the front lines of delivering healthcare services and retail products to Americans 365 days a year. Our pharmacists are uniquely positioned to engage with customers and improve their health outcomes. We provide an array of whole being health products and services for the entire family through over 2,400 retail pharmacy locations across 17 states. Through Elixir, we provide pharmacy benefits and services to millions of members nationwide. For more information, www.riteaid.com.

Cautionary Statement Regarding Forward-Looking Statements

Statements in this release that are not historical, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements regarding Rite Aid's outlook and guidance for fiscal 2022; the continued impact of the global coronavirus (COVID-19) pandemic on Rite Aid's business; Rite Aid's store closure program; and any assumptions underlying any of the foregoing. Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," and "will" and variations of such words and similar expressions are intended to identify such forward-looking statements.

These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to: risks related to the prolonged impact of the COVID-19 global pandemic and the emerging new variants, including the government responses thereto; the impact of COVID-19 on our workforce, operations, stores, expenses, and supply chain, and the operations or behaviors of our customers, suppliers and business partners; our ability to successfully implement our store closure program and other strategies; the impact of our high level of indebtedness, the ability to refinance such indebtedness on acceptable terms and our ability to satisfy our obligations and the other covenants contained in our debt agreements; outcome of pending or new litigation, including related to Opioids, "usual and customary" pricing or other matters; our ability to monetize the CMS receivable created in our Part D business; general competitive, economic, industry, market, political (including healthcare reform) and regulatory conditions (including changes to laws or regulations relating to labor or wages), as well as other factors that impact the markets in which we operate; the impact of private and public third-party payers continued reduction in prescription drug reimbursements and efforts to encourage mail order; our ability to manage expenses and our investments in working capital; our ability to achieve the benefits of our efforts to reduce the costs of our generic and other drugs; our ability to achieve cost savings and other benefits of our restructuring efforts within our anticipated timeframe, if at all; the outcome of our continuing efforts to monitor and comply with applicable laws, regulations, policies and procedures; and our ability to partner and have relationships with health plans and health systems.

These and other risks, assumptions and uncertainties are more fully described in Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K and in other documents that we file or furnish with the Securities and Exchange Commission (the "SEC"), which you are encouraged to read. To the extent that COVID-19 adversely affects our business and financial results, it may also have the effect of heightening many of such risk factors.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to rely on these forward-looking statements, which speak only as of the date they are made.

The degree to which COVID-19 may adversely affect Rite Aid's results and operations, including its ability to achieve its outlook for fiscal 2022 guidance, will depend on numerous evolving factors and future developments, which are highly uncertain, including, but not limited to, federal, state and local governmental policies and initiatives designed to reduce the transmission of COVID-19 and emerging new variants and how quickly and to what extent normal economic and operating conditions can resume. As a result, the impact on Rite Aid's financial and operating results cannot be reasonably estimated with specificity at this time, but the impact could be material. Rite Aid expressly disclaims any current intention, and assumes no duty, to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise.

All references to "Company" and "Rite Aid" as used throughout this release refer to Rite Aid Corporation and its affiliates.

Reconciliation of Non-GAAP Financial Measures

Rite Aid separately reports financial results on the basis of Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share, Adjusted EBITDA, Adjusted EBITDA Gross Profit and Adjusted EBITDA SG&A, which are non-GAAP financial measures. See the attached tables for a reconciliation of Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Adjusted EBITDA to net income (loss), and net income (loss) per diluted share, which are the most directly comparable GAAP financial measures. Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share exclude amortization expense, merger and acquisition-related costs, non-recurring litigation settlements, gains or losses on debt modifications and retirements, LIFO adjustments, goodwill and intangible asset impairment charges, restructuring-related costs, and the loss on Bartell acquisition. Rite Aid believes Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share serve as appropriate measures to be used in evaluating the performance of its business and help its investors better compare its operating performance over multiple periods.

Adjusted EBITDA is defined as net income (loss) excluding the impact of income taxes, interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, goodwill and intangible asset impairment charges, inventory write-downs related to store closings, gains or losses on debt modifications and retirements, and other items (including stock-based compensation expense, merger and acquisition-related costs, non-recurring litigation settlements, severance, restructuring-related costs, costs related to facility closures, gain or loss on sale of assets, and the loss on Bartell acquisition). The add back of LIFO (credit) charge when calculating Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share removes the entire impact of LIFO (credits) charges, and effectively reflects Rite Aid's results as if the company was on a FIFO inventory basis.Rite Aid believes Adjusted EBITDA serves as an appropriate measure in evaluating the performance of its business and helps its investors better compare its operating performance with its competitors.

Adjusted EBITDA Gross Profit includes LIFO adjustments, depreciation and amortization (COGS portion only) and other items. See the attached tables for a reconciliation of Adjusted EBITDA Gross Profit to Revenue, which is the most directly comparable GAAP financial measure. Adjusted EBITDA SG&A excludes depreciation and amortization (SG&A portion only), stock-based compensation expense, merger and acquisition-related costs, litigation settlements and other items. See the attached tables for a reconciliation of Adjusted EBITDA SG&A to Revenue, which is the most directly comparable GAAP financial measure. The Company believes Adjusted EBITDA Gross Profit and Adjusted EBITDA SG&A serve as appropriate measures in evaluating the performance of its business and helps its investors better compare its operating performance with its competitors.

RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS(Dollars in thousands)(unaudited) November 27, February 27, 2021 2021ASSETSCurrent assets: Cash and cash equivalents $ 155,289 $ 160,902

Accounts receivable, net 1,844,234 1,462,441

Inventories, net of LIFO reserve of $486,759 1,949,841 1,864,890 and $485,859 Prepaid expenses and other current assets 106,666 106,941

Total current assets 4,056,030 3,595,174

Property, plant and equipment, net 1,014,662 1,080,499

Operating lease right-of-use assets 2,915,748 3,064,077

Goodwill 1,108,136 1,108,136

Other intangibles, net 307,345 340,519

Deferred tax assets 14,964 14,964

Other assets 82,239 132,035

Total assets $ 9,499,124 $ 9,335,404

LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities: Current maturities of long-term debt and lease $ 6,119 $ 6,409 financing obligations Accounts payable 1,547,770 1,437,421

Accrued salaries, wages and other current 873,201 642,364 liabilities Current portion of operating lease liabilities 522,272 516,752

Total current liabilities 2,949,362 2,602,946

Long-term debt, less current maturities 3,167,060 3,063,087

Long-term operating lease liabilities 2,692,669 2,829,293

Lease financing obligations, less current 15,270 16,711 maturitiesOther noncurrent liabilities 202,734 208,213

Total liabilities 9,027,095 8,720,250

Commitments and contingencies - -

Stockholders' equity: Common stock 55,761 55,143

Additional paid-in capital 5,902,445 5,897,168

Accumulated deficit (5,462,519 ) (5,313,103 )

Accumulated other comprehensive loss (23,658 ) (24,054 )

Total stockholders' equity 472,029 615,154

Total liabilities and stockholders' $ 9,499,124 $ 9,335,404 equity RITE AID CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in thousands, except per share amounts)(unaudited)Thirteen weeks ended

November 27, 2021

Thirteen weeks ended

November 28, 2020

Revenues$

6,228,880

$

6,117,038

Costs and expenses:Cost of revenues4,894,497

4,913,939

Selling, general and administrative expenses1,276,920

1,156,355

Facility exit and impairment charges47,455

7,453

Interest expense47,794

50,835

Gain on sale of assets, net(5,899

)

(16,305

)

Loss on Bartell acquisition5,346

-

6,266,113

6,112,277

(Loss) income from continuing operations before income taxes(37,233

)

4,761

Income tax (benefit) expense(1,175

)

437

Net (loss) income from continuing operations(36,058

)

4,324

Net income from discontinued operations, net of tax-

-

Net (loss) income$

(36,058

)

$

4,324

Basic and diluted (loss) income per share:Numerator for (loss) income per share:Net (loss) income from continuing operations attributable to commonstockholders - basic and diluted$

(36,058

)

$

4,324

Net income from discontinued operations attributable tocommon stockholders - basic and diluted-

-

(Loss) income attributable to common stockholders - basic and diluted$

(36,058

)

$

4,324

Denominator:Basic weighted average shares54,168

53,744

Outstanding options and restricted shares, net-

335

Diluted weighted average shares54,168

54,079

Basic and diluted (loss) income per shareContinuing operations$

(0.67

)

$

0.08

Discontinued operations$

-

$

-

Net basic and diluted (loss) income per share$

(0.67

)

$

0.08

RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in thousands, except per share amounts)(unaudited) Thirteen weeks Thirteen weeks ended ended

November 27, November 28, 2021 2020

Revenues $ 6,228,880 $ 6,117,038

Costs and expenses: Cost of revenues 4,894,497 4,913,939

Selling, general and administrative expenses 1,276,920 1,156,355

Facility exit and impairment charges 47,455 7,453

Interest expense 47,794 50,835

Gain on sale of assets, net (5,899 ) (16,305 )

Loss on Bartell acquisition 5,346 -

6,266,113 6,112,277

(Loss) income from continuing operations before (37,233 ) 4,761 income taxesIncome tax (benefit) expense (1,175 ) 437

Net (loss) income from continuing operations (36,058 ) 4,324

Net income from discontinued operations, net of - - tax Net (loss) income $ (36,058 ) $ 4,324

Basic and diluted (loss) income per share: Numerator for (loss) income per share: Net (loss) income from continuing operations attributable to common stockholders - basic and diluted $ (36,058 ) $ 4,324

Net income from discontinued operations attributable to common stockholders - basic and diluted - -

(Loss) income attributable to common $ (36,058 ) $ 4,324 stockholders - basic and diluted Denominator: Basic weighted average shares 54,168 53,744

Outstanding options and restricted shares, net - 335

Diluted weighted average shares 54,168 54,079

Basic and diluted (loss) income per share Continuing operations $ (0.67 ) $ 0.08

Discontinued operations $ - $ -

Net basic and diluted (loss) income per share $ (0.67 ) $ 0.08

RITE AID CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in thousands, except per share amounts)(unaudited)Thirty-nine weeks ended

November 27, 2021

Thirty-nine weeks ended

November 28, 2020

Revenues$

18,502,865

$

18,126,384

Costs and expenses:Cost of revenues14,637,683

14,564,621

Selling, general and administrative expenses3,790,035

3,469,644

Facility exit and impairment charges67,639

22,734

Intangible asset impairment charges-

29,852

Interest expense145,507

151,389

Loss (gain) on debt modifications and retirements, net3,235

(5,274

)

Gain on sale of assets, net(79

)

(17,473

)

Loss on Bartell acquisition5,346

-

18,649,366

18,215,493

Loss from continuing operations before income taxes(146,501

)

(89,109

)

Income tax expense (benefit)2,915

(7,534

)

Net loss from continuing operations(149,416

)

(81,575

)

Net income from discontinued operations, net of tax-

9,161

Net loss$

(149,416

)

$

(72,414

)

Basic and diluted loss per share:Numerator for loss per share:Net loss from continuing operations attributable to commonstockholders - basic and diluted$

(149,416

)

$

(81,575

)

Net income from discontinued operations attributable tocommon stockholders - basic and diluted-

9,161

Loss attributable to common stockholders - basic and diluted$

(149,416

)

$

(72,414

)

Denominator:Basic and diluted weighted average shares54,004

53,600

Basic and diluted loss per shareContinuing operations$

(2.77

)

$

(1.52

)

Discontinued operations$

-

$

0.17

Net basic and diluted loss per share$

(2.77

)

$

(1.35

)

RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in thousands, except per share amounts)(unaudited)

Thirty-nine Thirty-nine weeks ended weeks ended

November 27, November 28, 2021 2020

Revenues $ 18,502,865 $ 18,126,384

Costs and expenses: Cost of revenues 14,637,683 14,564,621

Selling, general and administrative 3,790,035 3,469,644 expenses Facility exit and impairment charges 67,639 22,734

Intangible asset impairment charges - 29,852

Interest expense 145,507 151,389

Loss (gain) on debt modifications and 3,235 (5,274 ) retirements, net Gain on sale of assets, net (79 ) (17,473 )

Loss on Bartell acquisition 5,346 -

18,649,366 18,215,493

Loss from continuing operations before (146,501 ) (89,109 )income taxesIncome tax expense (benefit) 2,915 (7,534 )

Net loss from continuing operations (149,416 ) (81,575 )

Net income from discontinued operations, - 9,161 net of tax Net loss $ (149,416 ) $ (72,414 )

Basic and diluted loss per share: Numerator for loss per share: Net loss from continuing operations attributable to common stockholders - basic and diluted $ (149,416 ) $ (81,575 )

Net income from discontinued operations attributable to common stockholders - basic and diluted - 9,161

Loss attributable to common stockholders - $ (149,416 ) $ (72,414 ) basic and diluted Denominator: Basic and diluted weighted average shares 54,004 53,600

Basic and diluted loss per share Continuing operations $ (2.77 ) $ (1.52 )

Discontinued operations $ - $ 0.17

Net basic and diluted loss per share $ (2.77 ) $ (1.35 )

RITE AID CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Dollars in thousands)(unaudited)Thirteen weeks ended

November 27, 2021

Thirteen weeks ended

November 28, 2020

OPERATING ACTIVITIES:Net (loss) income$

(36,058

)

$

4,324

Net income from discontinued operations, net of tax-

-

Net (loss) income from continuing operations$

(36,058

)

$

4,324

Adjustments to reconcile to net cash (used in) provided by operating activities of continuing operations:Depreciation and amortization72,973

83,336

Facility exit and impairment charges47,455

7,453

LIFO charge (credit)8,886

(9,487

)

Gain on sale of assets, net(5,899

)

(16,305

)

Loss on Bartell acquisition5,346

-

Stock-based compensation expense217

2,867

Changes in deferred taxes(1,602

)

-

Changes in operating assets and liabilities:Accounts receivable(185,224

)

128,777

Inventories(68,054

)

(24,005

)

Accounts payable38,112

(488

)

Operating lease right-of-use assets and operating lease liabilities(7,208

)

(6,826

)

Other assets9,761

(4,248

)

Other liabilities118,257

57,351

Net cash (used in) provided by operating activities of continuing operations(3,038

)

222,749

INVESTING ACTIVITIES:Payments for property, plant and equipment(39,645

)

(64,304

)

Intangible assets acquired(9,810

)

(6,131

)

Proceeds from dispositions of assets and investments3,145

3,176

Proceeds from sale-leaseback transactions25,605

80,551

Net cash (used in) provided by investing activities of continuing operations(20,705

)

13,292

FINANCING ACTIVITIES:Net proceeds from (payments to) revolver50,000

(309,000

)

Principal payments on long-term debt(1,032

)

(1,194

)

Change in zero balance cash accounts(14,243

)

32,374

Payments for taxes related to net share settlement of equity awards(131

)

(64

)

Deferred financing costs paid(2,126

)

(74

)

Net cash provided by (used in) financing activities of continuing operations32,468

(277,958

)

Increase (decrease) in cash and cash equivalents8,725

(41,917

)

Cash and cash equivalents, beginning of period146,564

92,730

Cash and cash equivalents, end of period$

155,289

$

50,813

RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS(Dollars in thousands)(unaudited) Thirteen Thirteen weeks ended weeks ended

November 27, 2021 November 28, 2020

OPERATINGACTIVITIES:Net (loss) income $ (36,058 ) $ 4,324

Net income from discontinued - - operations, net of taxNet (loss) income from $ (36,058 ) $ 4,324 continuing operationsAdjustments to reconcile to net cash (used in) provided byoperating activities of continuing operations: Depreciation and 72,973 83,336 amortization Facility exit and 47,455 7,453 impairment charges LIFO charge 8,886 (9,487 ) (credit) Gain on sale of (5,899 ) (16,305 ) assets, net Loss on Bartell 5,346 - acquisition Stock-based 217 2,867 compensation expense Changes in deferred (1,602 ) - taxes Changes in operating assets and liabilities: Accounts (185,224 ) 128,777 receivable Inventories (68,054 ) (24,005 )

Accounts 38,112 (488 ) payable Operating lease right-of-use (7,208 ) (6,826 ) assets and operating lease liabilities Other assets 9,761 (4,248 )

Other 118,257 57,351 liabilities Net cash (used in) provided by (3,038 ) 222,749 operating activities of continuing operationsINVESTINGACTIVITIES: Payments for property, (39,645 ) (64,304 ) plant and equipment Intangible assets (9,810 ) (6,131 ) acquired Proceeds from dispositions 3,145 3,176 of assets and investments Proceeds from 25,605 80,551 sale-leaseback transactions Net cash (used in) provided by (20,705 ) 13,292 investing activities of continuing operationsFINANCINGACTIVITIES: Net proceeds from 50,000 (309,000 ) (payments to) revolver Principal payments on (1,032 ) (1,194 ) long-term debt Change in zero balance (14,243 ) 32,374 cash accounts Payments for taxes related to (131 ) (64 ) net share settlement of equity awards Deferred financing (2,126 ) (74 ) costs paid Net cash provided by (used in) 32,468 (277,958 ) financing activities of continuing operationsIncrease (decrease) in 8,725 (41,917 )cash and cash equivalentsCash and cash equivalents, 146,564 92,730 beginning of periodCash and cash equivalents, $ 155,289 $ 50,813 end of period RITE AID CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Dollars in thousands)(unaudited)Thirty-nine weeks endedNovember 27, 2021Thirty-nine weeks endedNovember 28, 2020OPERATING ACTIVITIES:Net loss$

(149,416

)

$

(72,414

)

Net income from discontinued operations, net of tax-

9,161

Net loss from continuing operations$

(149,416

)

$

(81,575

)

Adjustments to reconcile to net cash provided by (used in) operating activities of continuing operations:Depreciation and amortization222,691

249,556

Facility exit and impairment charges67,639

22,734

Intangible asset impairment charges-

29,852

LIFO charge (credit)900

(30,303

)

Gain on sale of assets, net(79

)

(17,473

)

Loss on Bartell acquisition5,346

-

Stock-based compensation expense8,820

8,677

Loss (gain) on debt modifications and retirements, net3,235

(5,274

)

Changes in deferred taxes(1,602

)

-

Changes in operating assets and liabilities:Accounts receivable(398,079

)

(507,778

)

Inventories(87,150

)

(19,532

)

Accounts payable129,436

1,460

Operating lease right-of-use assets and operating lease liabilities(19,517

)

(25,319

)

Other assets34,946

75,265

Other liabilities219,390

45,867

Net cash provided by (used in) operating activities of continuing operations36,560

(253,843

)

INVESTING ACTIVITIES:Payments for property, plant and equipment(145,001

)

(127,389

)

Intangible assets acquired(24,289

)

(28,703

)

Proceeds from insured loss10,436

12,500

Proceeds from dispositions of assets and investments7,821

9,086

Proceeds from sale-leaseback transactions39,790

89,012

Net cash used in investing activities of continuing operations(111,243

)

(45,494

)

FINANCING ACTIVITIES:Proceeds from issuance of long-term debt350,000

849,918

Net proceeds from revolver300,000

341,000

Principal payments on long-term debt(544,020

)

(1,057,376

)

Change in zero balance cash accounts(15,087

)

5,545

Financing fees paid for early debt redemption(833

)

(2,399

)

Payments for taxes related to net share settlement of equity awards(2,352

)

(2,165

)

Deferred financing costs paid(18,638

)

(14,674

)

Net cash provided by financing activities of continuing operations69,070

119,849

Cash flows from discontinued operations:Operating activities of discontinued operations-

(82,189

)

Investing activities of discontinued operations-

94,310

Net cash provided by discontinued operations-

12,121

Decrease in cash and cash equivalents(5,613

)

(167,367

)

Cash and cash equivalents, beginning of period160,902

218,180

Cash and cash equivalents, end of period$

155,289

$

50,813

RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS(Dollars in thousands)(unaudited) Thirty-nine Thirty-nine weeks ended weeks ended November 27, 2021 November 28, 2020 OPERATINGACTIVITIES:Net loss $ (149,416 ) $ (72,414 )

Net income from discontinued - 9,161 operations, net of taxNet loss from $ (149,416 ) $ (81,575 )continuing operationsAdjustments to reconcile to net cash provided by (used in)operating activities of continuing operations: Depreciation and 222,691 249,556 amortization Facility exit and 67,639 22,734 impairment charges Intangible asset - 29,852 impairment charges LIFO charge 900 (30,303 ) (credit) Gain on sale of (79 ) (17,473 ) assets, net Loss on Bartell 5,346 - acquisition Stock-based 8,820 8,677 compensation expense Loss (gain) on debt 3,235 (5,274 ) modifications and retirements, net Changes in deferred (1,602 ) - taxes Changes in operating assets and liabilities: Accounts (398,079 ) (507,778 ) receivable Inventories (87,150 ) (19,532 )

Accounts 129,436 1,460 payable Operating lease right-of-use (19,517 ) (25,319 ) assets and operating lease liabilities Other assets 34,946 75,265

Other 219,390 45,867 liabilities Net cash provided by (used in) 36,560 (253,843 ) operating activities of continuing operationsINVESTINGACTIVITIES: Payments for property, (145,001 ) (127,389 ) plant and equipment Intangible assets (24,289 ) (28,703 ) acquired Proceeds from 10,436 12,500 insured loss Proceeds from dispositions 7,821 9,086 of assets and investments Proceeds from 39,790 89,012 sale-leaseback transactions Net cash used in investing (111,243 ) (45,494 ) activities of continuing operationsFINANCINGACTIVITIES: Proceeds from issuance 350,000 849,918 of long-term debt Net proceeds from 300,000 341,000 revolver Principal payments on (544,020 ) (1,057,376 ) long-term debt Change in zero balance (15,087 ) 5,545 cash accounts Financing fees paid for (833 ) (2,399 ) early debt redemption Payments for taxes related to (2,352 ) (2,165 ) net share settlement of equity awards Deferred financing (18,638 ) (14,674 ) costs paid Net cash provided by 69,070 119,849 financing activities of continuing operationsCash flows fromdiscontinued operations: Operating activities of - (82,189 ) discontinued operations Investing activities of - 94,310 discontinued operations Net cash provided by - 12,121 discontinued operationsDecrease in cash and cash (5,613 ) (167,367 )equivalentsCash and cash 160,902 218,180 equivalents, beginning ofperiodCash and cash $ 155,289 $ 50,813 equivalents, end ofperiod RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL SEGMENT OPERATING INFORMATION(Dollars in thousands)(unaudited)Thirteen weeks ended

November 27, 2021

Thirteen weeks ended

November 28, 2020

Retail Pharmacy SegmentRevenues from continuing operations (a)$

4,432,508

$

4,109,592

Cost of revenues from continuing operations (a)3,199,271

3,029,884

Gross profit from continuing operations1,233,237

1,079,708

LIFO charge (credit) from continuing operations8,886

(9,487

)

FIFO gross profit from continuing operations1,242,123

1,070,221

Adjusted EBITDA gross profit from continuing operations1,244,637

1,072,547

Gross profit as a percentage of revenues - continuing operations27.82

%

26.27

%

LIFO charge (credit) as a percentage of revenues - continuing operations0.20

%

-0.23

%

FIFO gross profit as a percentage of revenues - continuing operations28.02

%

26.04

%

Adjusted EBITDA gross profit as a percentage of revenues - continuing operations28.08

%

26.10

%

Selling, general and administrative expenses from continuing operations1,185,974

1,067,027

Adjusted EBITDA selling, general and administrative expenses from continuing operations1,118,706

983,990

Selling, general and administrative expenses as a percentage ofrevenues - continuing operations26.76

%

25.96

%

Adjusted EBITDA selling, general and administrative expenses as a percentage ofrevenues - continuing operations25.24

%

23.94

%

Cash interest expense44,853

47,500

Non-cash interest expense2,941

3,335

Total interest expense47,794

50,835

Interest expense - continuing operations47,794

50,835

Interest expense - discontinued operations-

-

Adjusted EBITDA - continuing operations125,931

88,557

Adjusted EBITDA as a percentage of revenues - continuing operations2.84

%

2.15

%

Pharmacy Services SegmentRevenues (a)$

1,858,830

$

2,084,402

Cost of revenues (a)1,757,684

1,961,011

Gross profit101,146

123,391

Gross profit as a percentage of revenues5.44

%

5.92

%

Adjusted EBITDA28,862

48,848

Adjusted EBITDA as a percentage of revenues1.55

%

2.34

%

RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL SEGMENT OPERATING INFORMATION(Dollars in thousands)(unaudited) Thirteen Thirteen weeks ended weeks ended

November 27, November 28, 2021 2020

Retail Pharmacy Segment Revenues from continuing operations (a) $ 4,432,508 $ 4,109,592

Cost of revenues from continuing operations (a) 3,199,271 3,029,884

Gross profit from continuing operations 1,233,237 1,079,708

LIFO charge (credit) from continuing operations 8,886 (9,487 )

FIFO gross profit from continuing operations 1,242,123 1,070,221

Adjusted EBITDA gross profit from continuing 1,244,637 1,072,547 operations Gross profit as a percentage of revenues - 27.82 % 26.27 % continuing operations LIFO charge (credit) as a percentage of revenues - 0.20 % -0.23 % continuing operations FIFO gross profit as a percentage of revenues - 28.02 % 26.04 % continuing operations Adjusted EBITDA gross profit as a percentage of 28.08 % 26.10 % revenues - continuing operations Selling, general and administrative expenses from 1,185,974 1,067,027 continuing operations Adjusted EBITDA selling, general and 1,118,706 983,990 administrative expenses from continuing operations Selling, general and administrative expenses as a percentage of revenues - continuing operations 26.76 % 25.96 %

Adjusted EBITDA selling, general and administrative expenses as a percentage of revenues - continuing operations 25.24 % 23.94 %

Cash interest expense 44,853 47,500

Non-cash interest expense 2,941 3,335

Total interest expense 47,794 50,835

Interest expense - continuing operations 47,794 50,835

Interest expense - discontinued operations - -

Adjusted EBITDA - continuing operations 125,931 88,557

Adjusted EBITDA as a percentage of revenues - 2.84 % 2.15 % continuing operations Pharmacy Services Segment Revenues (a) $ 1,858,830 $ 2,084,402

Cost of revenues (a) 1,757,684 1,961,011

Gross profit 101,146 123,391

Gross profit as a percentage of revenues 5.44 % 5.92 %

Adjusted EBITDA 28,862 48,848

Adjusted EBITDA as a percentage of revenues 1.55 % 2.34 %

(a) -

Revenues and cost of revenues include $62,458 and $76,956 of inter-segment activity for the thirteen weeks ended November 27, 2021 and November 28, 2020, respectively, that is eliminated in consolidation.(a) Revenues and cost of revenues include $62,458 and $76,956 of inter-segment- activity for the thirteen weeks ended November 27, 2021 and November 28, 2020, respectively, that is eliminated in consolidation. RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL SEGMENT OPERATING INFORMATION(Dollars in thousands)(unaudited)Thirty-nine weeks ended

November 27, 2021

Thirty-nine weeks ended

November 28, 2020

Retail Pharmacy SegmentRevenues from continuing operations (a)$

13,061,408

$

12,250,775

Cost of revenues from continuing operations (a)9,517,875

9,027,618

Gross profit from continuing operations3,543,533

3,223,157

LIFO charge (credit) from continuing operations900

(30,303

)

FIFO gross profit from continuing operations3,544,433

3,192,854

Adjusted EBITDA gross profit from continuing operations3,551,888

3,227,196

Gross profit as a percentage of revenues - continuing operations27.13

%

26.31

%

LIFO charge (credit) as a percentage of revenues - continuing operations0.01

%

-0.25

%

FIFO gross profit as a percentage of revenues - continuing operations27.14

%

26.06

%

Adjusted EBITDA gross profit as a percentage of revenues - continuing operations27.19

%

26.34

%

Selling, general and administrative expenses from continuing operations3,505,365

3,206,078

Adjusted EBITDA selling, general and administrative expenses from continuing operations3,261,674

2,953,317

Selling, general and administrative expenses as a percentage ofrevenues - continuing operations26.84

%

26.17

%

Adjusted EBITDA selling, general and administrative expenses as a percentage ofrevenues - continuing operations24.97

%

24.11

%

Cash interest expense136,476

141,635

Non-cash interest expense9,031

9,754

Total interest expense145,507

151,389

Interest expense - continuing operations145,507

151,389

Interest expense - discontinued operations-

-

Adjusted EBITDA - continuing operations290,214

273,879

Adjusted EBITDA as a percentage of revenues - continuing operations2.22

%

2.24

%

Pharmacy Services SegmentRevenues (a)$

5,629,325

$

6,100,026

Cost of revenues (a)5,307,676

5,761,420

Gross profit321,649

338,606

Gross profit as a percentage of revenues5.71

%

5.55

%

Adjusted EBITDA109,616

122,521

Adjusted EBITDA as a percentage of revenues1.95

%

2.01

%

RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL SEGMENT OPERATING INFORMATION(Dollars in thousands)(unaudited) Thirty-nine Thirty-nine weeks ended weeks ended

November 27, November 28, 2021 2020

Retail Pharmacy Segment Revenues from continuing operations (a) $ 13,061,408 $ 12,250,775

Cost of revenues from continuing operations (a) 9,517,875 9,027,618

Gross profit from continuing operations 3,543,533 3,223,157

LIFO charge (credit) from continuing operations 900 (30,303 )

FIFO gross profit from continuing operations 3,544,433 3,192,854

Adjusted EBITDA gross profit from continuing 3,551,888 3,227,196 operations Gross profit as a percentage of revenues - 27.13 % 26.31 % continuing operations LIFO charge (credit) as a percentage of 0.01 % -0.25 % revenues - continuing operations FIFO gross profit as a percentage of revenues - 27.14 % 26.06 % continuing operations Adjusted EBITDA gross profit as a percentage of 27.19 % 26.34 % revenues - continuing operations Selling, general and administrative expenses 3,505,365 3,206,078 from continuing operations Adjusted EBITDA selling, general and 3,261,674 2,953,317 administrative expenses from continuing operations Selling, general and administrative expenses as a percentage of revenues - continuing operations 26.84 % 26.17 %

Adjusted EBITDA selling, general and administrative expenses as a percentage of revenues - continuing operations 24.97 % 24.11 %

Cash interest expense 136,476 141,635

Non-cash interest expense 9,031 9,754

Total interest expense 145,507 151,389

Interest expense - continuing operations 145,507 151,389

Interest expense - discontinued operations - -

Adjusted EBITDA - continuing operations 290,214 273,879

Adjusted EBITDA as a percentage of revenues - 2.22 % 2.24 % continuing operations Pharmacy Services Segment Revenues (a) $ 5,629,325 $ 6,100,026

Cost of revenues (a) 5,307,676 5,761,420

Gross profit 321,649 338,606

Gross profit as a percentage of revenues 5.71 % 5.55 %

Adjusted EBITDA 109,616 122,521

Adjusted EBITDA as a percentage of revenues 1.95 % 2.01 %

(a) -

Revenues and cost of revenues include $187,868 and $224,417 of inter-segment activity for the thirty-nine weeks ended November 27, 2021 and November 28, 2020, respectively, that is eliminated in consolidation.(a) Revenues and cost of revenues include $187,868 and $224,417 of- inter-segment activity for the thirty-nine weeks ended November 27, 2021 and November 28, 2020, respectively, that is eliminated in consolidation. RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL INFORMATIONRECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA(In thousands)(unaudited)Thirteen weeks ended

November 27, 2021

Thirteen weeks ended

November 28, 2020

Reconciliation of net (loss) income to adjusted EBITDA:Net (loss) income - continuing operations$

(36,058

)

$

4,324

Adjustments:Interest expense47,794

50,835

Income tax (benefit) expense(1,175

)

437

Depreciation and amortization72,973

83,336

LIFO charge (credit)8,886

(9,487

)

Facility exit and impairment charges47,455

7,453

Merger and Acquisition-related costs3,642

1,136

Stock-based compensation expense217

2,867

Restructuring-related costs9,657

12,175

Inventory write-downs related to store closings86

704

Litigation settlements2,000

-

Gain on sale of assets, net(5,899

)

(16,305

)

Loss on Bartell acquisition5,346

-

Other(131

)

(70

)

Adjusted EBITDA - continuing operations$

154,793

$

137,405

Percent of revenues - continuing operations2.49

%

2.25

%

RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL INFORMATIONRECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA(In thousands)(unaudited) Thirteen Thirteen weeks ended weeks ended

November 27, November 28, 2021 2020

Reconciliation of net (loss) income to adjustedEBITDA: Net (loss) income - continuing operations $ (36,058 ) $ 4,324

Adjustments: Interest expense 47,794 50,835

Income tax (benefit) expense (1,175 ) 437

Depreciation and amortization 72,973 83,336

LIFO charge (credit) 8,886 (9,487 )

Facility exit and impairment charges 47,455 7,453

Merger and Acquisition-related costs 3,642 1,136

Stock-based compensation expense 217 2,867

Restructuring-related costs 9,657 12,175

Inventory write-downs related to store closings 86 704

Litigation settlements 2,000 -

Gain on sale of assets, net (5,899 ) (16,305 )

Loss on Bartell acquisition 5,346 -

Other (131 ) (70 )

Adjusted EBITDA - continuing $ 154,793 $ 137,405 operations Percent of revenues - continuing 2.49 % 2.25 % operations RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL INFORMATIONRECONCILIATION OF NET LOSS TO ADJUSTED EBITDA(In thousands)(unaudited)Thirty-nine weeks ended

November 27, 2021

Thirty-nine weeks ended

November 28, 2020

Reconciliation of net loss to adjusted EBITDA:Net loss - continuing operations$

(149,416

)

$

(81,575

)

Adjustments:Interest expense145,507

151,389

Income tax expense (benefit)2,915

(7,534

)

Depreciation and amortization222,691

249,556

LIFO charge (credit)900

(30,303

)

Facility exit and impairment charges67,639

22,734

Intangible asset impairment charges-

29,852

Loss (gain) on debt modifications and retirements, net3,235

(5,274

)

Merger and Acquisition-related costs12,119

1,136

Stock-based compensation expense8,820

8,677

Restructuring-related costs25,173

71,096

Inventory write-downs related to store closings1,356

2,596

Litigation settlements50,212

-

Gain on sale of assets, net(79

)

(17,473

)

Loss on Bartell acquisition5,346

-

Other3,412

1,523

Adjusted EBITDA - continuing operations$

399,830

$

396,400

Percent of revenues - continuing operations2.16

%

2.19

%

RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL INFORMATIONRECONCILIATION OF NET LOSS TO ADJUSTED EBITDA(In thousands)(unaudited) Thirty-nine Thirty-nine weeks ended weeks ended

November 27, November 28, 2021 2020

Reconciliation of net loss to adjusted EBITDA: Net loss - continuing operations $ (149,416 ) $ (81,575 )

Adjustments: Interest expense 145,507 151,389

Income tax expense (benefit) 2,915 (7,534 )

Depreciation and amortization 222,691 249,556

LIFO charge (credit) 900 (30,303 )

Facility exit and impairment charges 67,639 22,734

Intangible asset impairment charges - 29,852

Loss (gain) on debt modifications and 3,235 (5,274 ) retirements, net Merger and Acquisition-related costs 12,119 1,136

Stock-based compensation expense 8,820 8,677

Restructuring-related costs 25,173 71,096

Inventory write-downs related to store 1,356 2,596 closings Litigation settlements 50,212 -

Gain on sale of assets, net (79 ) (17,473 )

Loss on Bartell acquisition 5,346 -

Other 3,412 1,523

Adjusted EBITDA - continuing $ 399,830 $ 396,400 operations Percent of revenues - continuing 2.16 % 2.19 % operations RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL INFORMATIONADJUSTED NET INCOME(Dollars in thousands, except per share amounts)(unaudited)Thirteen weeks ended

November 27, 2021

Thirteen weeks ended

November 28, 2020

Net (loss) income from continuing operations$

(36,058

)

$

4,324

Add back - Income tax (benefit) expense(1,175

)

437

(Loss) income before income taxes - continuing operations(37,233

)

4,761

Adjustments:Amortization expense18,780

21,236

LIFO charge (credit)8,886

(9,487

)

Merger and Acquisition-related costs3,642

1,136

Restructuring-related costs9,657

12,175

Loss on Bartell acquisition5,346

-

Litigation settlements2,000

-

Adjusted income before income taxes - continuing operations11,078

29,821

Adjusted income tax expense (a)2,914

8,243

Adjusted net income from continuing operations$

8,164

$

21,578

Adjusted net income per diluted share - continuing operations:Numerator for adjusted net income per diluted share:Adjusted net income from continuing operations$

8,164

$

21,578

Denominator:Basic weighted average shares54,168

53,744

Outstanding options and restricted shares, net541

335

Diluted weighted average shares54,709

54,079

Net (loss) income from continuing operations per dilutedshare - continuing operations$

(0.67

)

$

0.08

Adjusted net income per diluted share - continuing operations$

0.15

$

0.40

RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL INFORMATIONADJUSTED NET INCOME(Dollars in thousands, except per share amounts)(unaudited) Thirteen Thirteen weeks ended weeks ended

November 27, November 28, 2021 2020

Net (loss) income from continuing operations $ (36,058 ) $ 4,324

Add back - Income tax (benefit) expense (1,175 ) 437

(Loss) income before income taxes - continuing (37,233 ) 4,761 operations Adjustments: Amortization expense 18,780 21,236

LIFO charge (credit) 8,886 (9,487 )

Merger and Acquisition-related costs 3,642 1,136

Restructuring-related costs 9,657 12,175

Loss on Bartell acquisition 5,346 -

Litigation settlements 2,000 -

Adjusted income before income taxes - continuing 11,078 29,821 operations Adjusted income tax expense (a) 2,914 8,243

Adjusted net income from continuing operations $ 8,164 $ 21,578

Adjusted net income per diluted share - continuing operations: Numerator for adjusted net income per diluted share: Adjusted net income from continuing operations $ 8,164 $ 21,578

Denominator: Basic weighted average shares 54,168 53,744

Outstanding options and restricted shares, net 541 335

Diluted weighted average shares 54,709 54,079

Net (loss) income from continuing operations per diluted share - continuing operations $ (0.67 ) $ 0.08

Adjusted net income per diluted share - $ 0.15 $ 0.40 continuing operations(a)

The fiscal year 2022 and 2021 annual effective tax rates, calculated using a federal rate plus a net state rate that excluded the impact of state NOL's, state credits and valuation allowance, was used for the thirteen weeks ended November 27, 2021 and November 28, 2020, respectively. The fiscal year 2022 and 2021 annual effective tax rates, calculated using a(a) federal rate plus a net state rate that excluded the impact of state NOL's, state credits and valuation allowance, was used for the thirteen weeks ended November 27, 2021 and November 28, 2020, respectively. RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL INFORMATIONADJUSTED NET INCOME(Dollars in thousands, except per share amounts)(unaudited)Thirty-nine weeks ended

November 27, 2021

Thirty-nine weeks ended

November 28, 2020

Net loss from continuing operations$

(149,416

)

$

(81,575

)

Add back - Income tax expense (benefit)2,915

(7,534

)

Loss before income taxes - continuing operations(146,501

)

(89,109

)

Adjustments:Amortization expense59,193

68,351

LIFO charge (credit)900

(30,303

)

Intangible asset impairment charges-

29,852

Loss (gain) on debt modifications and retirements, net3,235

(5,274

)

Merger and Acquisition-related costs12,119

1,136

Restructuring-related costs25,173

71,096

Loss on Bartell acquisition5,346

-

Litigation settlements50,212

-

Adjusted income before income taxes - continuing operations9,677

45,749

Adjusted income tax expense (a)2,545

12,645

Adjusted net income from continuing operations$

7,132

$

33,104

Adjusted net income per diluted share - continuing operations:Numerator for adjusted net income per diluted share:Adjusted net income from continuing operations$

7,132

$

33,104

Denominator:Basic weighted average shares54,004

53,600

Outstanding options and restricted shares, net998

754

Diluted weighted average shares55,002

54,354

Net loss from continuing operations per dilutedshare - continuing operations$

(2.77

)

$

(1.52

)

Adjusted net income per diluted share - continuing operations$

0.13

$

0.61

RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL INFORMATIONADJUSTED NET INCOME(Dollars in thousands, except per share amounts)(unaudited) Thirty-nine Thirty-nine weeks ended weeks ended

November 27, November 28, 2021 2020

Net loss from continuing operations $ (149,416 ) $ (81,575 )

Add back - Income tax expense (benefit) 2,915 (7,534 )

Loss before income taxes - continuing (146,501 ) (89,109 ) operations Adjustments: Amortization expense 59,193 68,351

LIFO charge (credit) 900 (30,303 )

Intangible asset impairment charges - 29,852

Loss (gain) on debt modifications and 3,235 (5,274 ) retirements, net Merger and Acquisition-related costs 12,119 1,136

Restructuring-related costs 25,173 71,096

Loss on Bartell acquisition 5,346 -

Litigation settlements 50,212 -

Adjusted income before income taxes - 9,677 45,749 continuing operations Adjusted income tax expense (a) 2,545 12,645

Adjusted net income from continuing operations $ 7,132 $ 33,104

Adjusted net income per diluted share - continuing operations: Numerator for adjusted net income per diluted share: Adjusted net income from continuing operations $ 7,132 $ 33,104

Denominator: Basic weighted average shares 54,004 53,600

Outstanding options and restricted shares, net 998 754

Diluted weighted average shares 55,002 54,354

Net loss from continuing operations per diluted share - continuing operations $ (2.77 ) $ (1.52 )

Adjusted net income per diluted share - $ 0.13 $ 0.61 continuing operations(a)

The fiscal year 2022 and 2021 annual effective tax rates, calculated using a federal rate plus a net state rate that excluded the impact of state NOL's, state credits and valuation allowance, was used for the thirty-nine weeks ended November 27, 2021 and November 28, 2020, respectively. The fiscal year 2022 and 2021 annual effective tax rates, calculated using a(a) federal rate plus a net state rate that excluded the impact of state NOL's, state credits and valuation allowance, was used for the thirty-nine weeks ended November 27, 2021 and November 28, 2020, respectively. RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL INFORMATIONRECONCILIATION OF ADJUSTED EBITDA GROSS PROFIT AND RECONCILIATION OF ADJUSTED EBITDA SELLING,GENERAL AND ADMINISTRATIVE EXPENSES- RETAIL PHARMACY SEGMENT(In thousands)(unaudited)Thirteen weeks ended

November 27, 2021

Thirteen weeks ended

November 28, 2020

Reconciliation of adjusted EBITDA gross profit:Revenues$

4,432,508

$

4,109,592

Gross Profit1,233,237

1,079,708

Addback:LIFO charge (credit)8,886

(9,487

)

Depreciation and amortization (cost of goods sold portion only)2,489

1,945

Other25

381

Adjusted EBITDA gross profit - continuing operations$

1,244,637

$

1,072,547

Percent of revenues - continuing operations28.08

%

26.10

%

Reconciliation of adjusted EBITDA selling, general and administrative expenses:Revenues$

4,432,508

$

4,109,592

Selling, general and administrative expenses1,185,974

1,067,027

Less:Depreciation and amortization (SG&A portion only)58,087

67,641

Stock-based compensation expense(174

)

2,429

Merger and Acquisition-related costs3,642

1,136

Restructuring-related costs3,746

11,605

Litigation settlements2,000

-

Other(33

)

226

Adjusted EBITDA selling, general and administrativeexpenses - continuing operations$

1,118,706

$

983,990

Percent of revenues - continuing operations25.24

%

23.94

%

Adjusted EBITDA - continuing operations$

125,931

$

88,557

RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL INFORMATIONRECONCILIATION OF ADJUSTED EBITDA GROSS PROFIT AND RECONCILIATION OF ADJUSTEDEBITDA SELLING,GENERAL AND ADMINISTRATIVE EXPENSES- RETAIL PHARMACY SEGMENT(In thousands)(unaudited) Thirteen Thirteen weeks ended weeks ended

November 27, November 28, 2021 2020

Reconciliation of adjusted EBITDA gross profit: Revenues $ 4,432,508 $ 4,109,592

Gross 1,233,237 1,079,708 Profit Addback: LIFO charge (credit) 8,886 (9,487 )

Depreciation and amortization (cost of goods 2,489 1,945 sold portion only) Other 25 381

Adjusted EBITDA gross profit - $ 1,244,637 $ 1,072,547 continuing operations Percent of revenues - continuing 28.08 % 26.10 % operations Reconciliation of adjusted EBITDA selling, generaland administrative expenses: Revenues $ 4,432,508 $ 4,109,592

Selling, general and administrative expenses 1,185,974 1,067,027

Less: Depreciation and amortization (SG&A portion 58,087 67,641 only) Stock-based compensation expense (174 ) 2,429

Merger and Acquisition-related costs 3,642 1,136

Restructuring-related costs 3,746 11,605

Litigation settlements 2,000 -

Other (33 ) 226

Adjusted EBITDA selling, general and administrative expenses - continuing operations $ 1,118,706 $ 983,990

Percent of revenues - continuing 25.24 % 23.94 % operations Adjusted EBITDA - continuing $ 125,931 $ 88,557 operations RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL INFORMATIONRECONCILIATION OF ADJUSTED EBITDA GROSS PROFIT AND RECONCILIATION OF ADJUSTED EBITDA SELLING,GENERAL AND ADMINISTRATIVE EXPENSES- RETAIL PHARMACY SEGMENT(In thousands)(unaudited)Thirty-nine weeks ended

November 27, 2021

Thirty-nine weeks ended

November 28, 2020

Reconciliation of adjusted EBITDA gross profit:Revenues$

13,061,408

$

12,250,775

Gross Profit3,543,533

3,223,157

Addback:LIFO charge (credit)900

(30,303

)

Depreciation and amortization (cost of goods sold portion only)6,536

6,775

Restructuring-related costs - SKU optimization charges-

25,763

Other919

1,804

Adjusted EBITDA gross profit - continuing operations$

3,551,888

$

3,227,196

Percent of revenues - continuing operations27.19

%

26.34

%

Reconciliation of adjusted EBITDA selling, general and administrative expenses:Revenues$

13,061,408

$

12,250,775

Selling, general and administrative expenses3,505,365

3,206,078

Less:Depreciation and amortization (SG&A portion only)176,936

199,434

Stock-based compensation expense8,292

7,785

Merger and Acquisition-related costs12,119

1,136

Restructuring-related costs7,951

41,992

Litigation settlements34,448

-

Other3,945

2,414

Adjusted EBITDA selling, general and administrativeexpenses - continuing operations$

3,261,674

$

2,953,317

Percent of revenues - continuing operations24.97

%

24.11

%

Adjusted EBITDA - continuing operations$

290,214

$

273,879

RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL INFORMATIONRECONCILIATION OF ADJUSTED EBITDA GROSS PROFIT AND RECONCILIATION OF ADJUSTEDEBITDA SELLING,GENERAL AND ADMINISTRATIVE EXPENSES- RETAIL PHARMACY SEGMENT(In thousands)(unaudited) Thirty-nine Thirty-nine weeks ended weeks ended

November 27, November 28, 2021 2020

Reconciliation of adjusted EBITDA gross profit: Revenues $ 13,061,408 $ 12,250,775

Gross 3,543,533 3,223,157 Profit Addback: LIFO charge (credit) 900 (30,303 )

Depreciation and amortization (cost of goods 6,536 6,775 sold portion only) Restructuring-related costs - SKU - 25,763 optimization charges Other 919 1,804

Adjusted EBITDA gross profit - $ 3,551,888 $ 3,227,196 continuing operations Percent of revenues - continuing 27.19 % 26.34 % operations Reconciliation of adjusted EBITDA selling,general and administrative expenses: Revenues $ 13,061,408 $ 12,250,775

Selling, general and administrative expenses 3,505,365 3,206,078

Less: Depreciation and amortization (SG&A portion 176,936 199,434 only) Stock-based compensation expense 8,292 7,785

Merger and Acquisition-related costs 12,119 1,136

Restructuring-related costs 7,951 41,992

Litigation settlements 34,448 -

Other 3,945 2,414

Adjusted EBITDA selling, general and administrative expenses - continuing operations $ 3,261,674 $ 2,953,317

Percent of revenues - continuing 24.97 % 24.11 % operations Adjusted EBITDA - continuing $ 290,214 $ 273,879 operations RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL INFORMATIONRECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED EBITDA GUIDANCEYEAR ENDING FEBRUARY 26, 2022(In thousands)(unaudited)Guidance RangeLowHighTotal Revenues$

24,400,000

$

24,700,000

Pharmacy Services Segment Revenues$

7,100,000

$

7,200,000

Gross Capital Expenditures$

275,000

$

275,000

Reconciliation of net loss to adjusted EBITDA:Net loss$

(229,500

)

$

(188,500

)

Adjustments:Interest expense195,000

195,000

Income tax expense3,000

-

Depreciation and amortization302,000

302,000

LIFO charge5,000

-

Facility exit and impairment charges105,000

95,000

Loss on debt modifications and retirements, net3,200

3,200

Merger and Acquisition-related costs13,000

13,000

Restructuring-related costs35,000

35,000

Litigation settlements50,000

50,000

Gain on sale of assets, net(7,000

)

(10,000

)

Loss on Bartell acquisition5,300

5,300

Other20,000

20,000

Adjusted EBITDA$

500,000

$

520,000

RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL INFORMATIONRECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED EBITDA GUIDANCEYEAR ENDING FEBRUARY 26, 2022(In thousands)(unaudited) Guidance Range Low High Total Revenues $ 24,400,000 $ 24,700,000

Pharmacy Services Segment Revenues $ 7,100,000 $ 7,200,000

Gross Capital Expenditures $ 275,000 $ 275,000

Reconciliation of net loss to adjustedEBITDA: Net loss $ (229,500 ) $ (188,500 )

Adjustments: Interest expense 195,000 195,000

Income tax expense 3,000 -

Depreciation and amortization 302,000 302,000

LIFO charge 5,000 -

Facility exit and impairment 105,000 95,000 charges Loss on debt modifications and 3,200 3,200 retirements, net Merger and Acquisition-related 13,000 13,000 costs Restructuring-related costs 35,000 35,000

Litigation settlements 50,000 50,000

Gain on sale of assets, net (7,000 ) (10,000 )

Loss on Bartell acquisition 5,300 5,300

Other 20,000 20,000

Adjusted EBITDA $ 500,000 $ 520,000

RITE AID CORPORATION AND SUBSIDIARIESSUPPLEMENTAL INFORMATIONRECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED NET LOSS GUIDANCEYEAR ENDING FEBRUARY 26, 2022(In thousands)(unaudited)Guidance RangeLowHighNet loss$

(229,500

)

$

(188,500

)

Add back - income tax expense3,000

-

Loss before income taxes(226,500

)

(188,500

)

Adjustments:Amortization expense79,000

79,000

LIFO charge5,000

-

Loss on debt modifications and retirements, net3,200

3,200

Merger and Acquisition-related costs13,000

13,000

Restructuring-related costs35,000

35,000

Loss on Bartell acquisition5,300

5,300

Litigation settlements50,000

50,000

Adjusted loss before adjusted income taxes(36,000

)

(3,000

)

Adjusted income tax benefit(9,500

)

(800

)

Adjusted net loss$

(26,500

)

$

(2,200

)

Diluted adjusted net loss per share$

(0.49

)

$

(0.04

)

View source version on businesswire.com: https://www.businesswire.com/news/home/20211220005684/en/

CONTACT: INVESTORS: Trent Kruse (717) 975-3710 investor@riteaid.com MEDIA: Jeffrey Olson 717-975-5718 press@riteaid.com