Rite Aid expects to pay down revolver debt at end of fiscal year

By Sara Rosenberg

New York, Sept. 25 - Rite Aid Corp. plans on using free cash flow to reduce the outstanding balance on its revolving credit facility at the end of fiscal 2009, company officials said in a conference call Thursday.

During the second quarter, the company generated positive cash flow of $96.1 million from operations.

The company said that it will undertake a series of actions to further reduce costs and improve cash flows in the second half of its fiscal year, including reducing operating expenses through improved efficiency, cutting capital expenditures by about $50 million and pursuing additional sale and leaseback transactions.

"We have no significant required maturities in the foreseeable future. Our required maturities currently are less than $25 million for the next 24 months," officials said in the call.

"In September 2010, the revolver and the $145 million term loan mature. When the time comes we expect to be able to refinance them with some combination of revolver, term loan or secured notes," officials added in the call.

Rite Aid is a Camp Hill, Pa.-based drugstore chain.

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