Heyward Donigan Departs from the Company as
President and CEO
Company Reaffirms Fiscal 2023 Financial
Guidance
Rite Aid Corporation (NYSE: RAD) (“Rite Aid” or the “Company”)
announced today that its Board of Directors has appointed Elizabeth
(“Busy”) Burr, a member of the Company’s Board, as interim CEO,
effective immediately. Burr’s appointment follows Heyward Donigan’s
departure from the Company as President and CEO, and as a member of
the Board. Rite Aid has initiated a search to identify a permanent
CEO and has retained a leading executive search firm.
Burr has extensive experience in the health industry, and proven
expertise in innovation, business strategy, retail and brand
management. She previously served as Vice President, Head of Health
Ventures and Chief Innovation Officer at Humana, a $70 billion
for-profit U.S. health insurance company. Most recently, at Carrot
Inc., named a “Most Innovative Company” by Fast Company magazine in
2020, Burr served as President and Chief Commercial Officer,
leading the team focused on bringing the company’s digital health
solutions to market. Burr previously served as Managing Director of
Citi Ventures and Global Head of Business Incubation of Citigroup
Inc. as well as Entrepreneur-in-Residence at eBay Inc. She has also
held various senior leadership roles at Credit Suisse Group AG
(formerly Credit Suisse First Boston) and Gap Inc., where she
served as Vice President of Global Brand Management.
Bruce Bodaken, Rite Aid Chairman, stated, “As the Company
continues its efforts to enhance its competitive position in this
dynamic environment, the Board determined and Heyward agreed that
now is the right time to identify the next leader of the business.
With a deep understanding of the industry and our strategy, the
Board was unanimous in its belief that Busy is highly qualified to
serve as interim CEO while the Board conducts a search for a
permanent successor. We are fortunate to have someone of her
caliber to step into the role and are confident in Busy’s ability
to lead the Company forward during this transition period.”
Burr said, “Having served as a Director since 2019, I have great
respect for the important role Rite Aid plays as a full-service
pharmacy improving health outcomes for millions of Americans. I
will work with the Board and management team to realize our vast
potential while supporting our thousands of pharmacists and team
members who are focused every day on meeting the needs of our
communities and customers. With Rite Aid’s well-established brand
and its committed and talented team, I look forward to delivering
on our business strategy and driving value for all our
stakeholders.”
Bodaken continued, “On behalf of the entire Board, I want to
thank Heyward for her contributions and service to Rite Aid,
particularly her efforts in helping to lead Rite Aid throughout the
Covid-19 pandemic. We wish her all the best in her future
endeavors.”
Donigan said, “It has been a privilege to lead Rite Aid and its
exceptional team. I am proud of all that we have achieved together,
and I believe that the Company is well positioned for the
future.”
Rite Aid reaffirms its fiscal year 2023 guidance for total
revenues between $23.7 billion and $24.0 billion, net loss between
$584 million and $551 million, Adjusted EBITDA between $410 million
and $440 million and capital expenditures of approximately $225
million.
The Company continues to expect to generate positive free cash
flow in Fiscal 2023 and will provide additional detail on its
financials and operational progress when it reports its full fourth
quarter and fiscal year 2023 results.
About Elizabeth “Busy” Burr
Busy Burr is the former President and Chief Commercial Officer
at Carrot Inc., a digital health care company with solutions that
combine behavioral science, clinical expertise, and proprietary
technology, from 2019 through 2021. Prior to that, Burr served as
the Chief Innovation Officer and Vice President of Healthcare Trend
and Innovation at Humana where she was responsible for driving the
design, build and adoption of new product platforms in digital
health, provider experience, and telemedicine, to improve health
outcomes, create superior member experiences, and improve health
care costs. She also founded Humana’s strategic investing practice,
Humana Health Ventures. Prior to joining Humana in 2015, Burr was
managing director of Citi Ventures and led large-scale business
transformation efforts as the global head of Citi’s Business
Incubation Function-DesignWorks. Prior to this, she served as CMO
and Global Head of Communications of the Global Technology Group at
Credit Suisse First Boston. Earlier in her career, Burr spent seven
years in investment banking at Morgan Stanley and previously served
as Vice President of Global Brand Management at Gap Inc. Burr holds
an MBA from Stanford University and a bachelor’s degree in
Economics from Smith College. Burr serves on the Boards of Mr.
Cooper Group, Satellite Healthcare and SVB Financial Group.
About Rite Aid
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 2,300 retail pharmacy locations across 17 states.
Through Elixir, we provide pharmacy benefits and services to
millions of members nationwide.
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 2023,
including our expectation to generate positive free cash flow in
fiscal 2023; the transition of Rite Aid executive leadership,
including the expected benefits thereof; and Rite Aid’s competitive
positioning and other plans, objectives, goals and strategies.
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 associated with changes and
transitions in management personnel; 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 (including the impact of rising interest rates,
market volatility, and continuing actions by the United States
Federal Reserve) and our ability to satisfy our obligations and the
other covenants contained in our debt agreements; outcome of
pending or new litigation and government investigations, including
related to Opioids, “usual and customary” pricing, government payer
programs or other matters; our ability to monetize (and on
reasonably available terms) 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), including continued impacts of inflation or other pricing
environment factors on our costs, liquidity and our ability to pass
on price increases to our customers, including as a result of
inflationary and deflationary pressures, a decline in consumer
financial position, whether due to inflation or other factors, as
well as other factors specific to the markets in which we operate;
the impact of private and public third-party payers continued
reduction in prescription drug reimbursements, new or disruptive
business models or practices, 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,
orders, 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 2023 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
In addition to net income (loss) determined in accordance with
GAAP, we use certain non-GAAP measures, such as “Adjusted EBITDA”,
in assessing our operating performance. We believe the non-GAAP
measures serve as an appropriate measure in evaluating the
performance of our business. We define Adjusted EBITDA as net
income (loss) excluding the impact of income taxes, interest
expense, depreciation and amortization, LIFO adjustments (which
removes the entire impact of LIFO, and effectively reflects the
results as if we were on a FIFO inventory basis), 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 and other contractual settlements, severance,
restructuring-related costs and costs related to facility closures,
gain or loss on sale of assets and the loss on Bartell
acquisition). We reference this particular non-GAAP financial
measure frequently in our decision-making because it provides
supplemental information that facilitates internal comparisons to
the historical periods and external comparisons to competitors. In
addition, incentive compensation is primarily based on Adjusted
EBITDA and we base certain of our forward-looking estimates on
Adjusted EBITDA to facilitate quantification of planned business
activities and enhance subsequent follow-up with comparisons of
actual to planned Adjusted EBITDA. See the attached table for a
reconciliation of Adjusted EBITDA to net income (loss), and net
income (loss) per diluted share, which are the most directly
comparable GAAP financial measures.
RITE AID CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET LOSS GUIDANCE TO ADJUSTED EBITDA GUIDANCE
YEAR ENDING MARCH 4, 2023 (In thousands) (unaudited)
Guidance Range
Low
High
Total Revenues
$
23,700,000
$
24,000,000
Pharmacy Services Segment Revenues
$
6,300,000
$
6,400,000
Gross Capital Expenditures
$
225,000
$
225,000
Reconciliation of net loss to adjusted EBITDA: Net
loss
$
(584,000
)
$
(551,000
)
Adjustments: Interest expense
220,000
220,000
Income tax benefit
(7,000
)
(10,000
)
Depreciation and amortization
280,000
280,000
LIFO charge
35,000
35,000
Facility exit and impairment charges
182,000
182,000
Goodwill and intangible asset impairment charges
252,000
252,000
Gain on debt modifications and retirements, net
(41,000
)
(41,000
)
Restructuring-related costs
72,000
72,000
Litigation and other contractual settlements
36,000
36,000
Gain on sale of assets, net
(60,000
)
(60,000
)
Other
25,000
25,000
Adjusted EBITDA
$
410,000
$
440,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230109005268/en/
INVESTORS: Byron Purcell (717) 975-3710 investor@riteaid.com
MEDIA: Joy Errico Seusing (203) 970-5559 press@riteaid.com
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