Rite Aid poised for growth after refinancing debt, improving liquidity

By Jennifer Lanning Drey

Portland, Ore., Dec. 17 - Rite Aid Corp. is better positioned for long-term growth after refinancing its debt that was previously scheduled to mature in 2010 and ending the third quarter of fiscal 2010 with $903 million of liquidity, Mary Sammons, chief executive officer of Rite Aid, said Thursday during the company's earnings conference call for the third quarter of fiscal 2010.

"With strong liquidity and no major debt coming due until late 2012, we can not only weather the current economic storm but improve our results long term with the growth and profit strategies we have identified," Sammons said.

Lowering overall leverage and improving its credit maturity profile continue to be priorities for the company, Frank Vitrano, chief financial officer of Rite Aid, said during the call.

Rite Aid's overall debt leverage decreased to 6.5 times at the end of the third quarter of fiscal 2010 on Nov. 28 from 7.0 times at the end of the same period in fiscal 2009, Vitrano said.

The company's available liquidity at the end of the quarter included $882 million available under its credit facility and $21 million of invested cash.

"We expect our liquidity to remain strong through the rest of the fiscal year and that we will finish fiscal 2010 cash flow positive and having reduced our debt," Sammons said.

Rite Aid posted fiscal third-quarter adjusted EBITDA of $254.2 million, compared with adjusted EBITDA of $259.6 million in the prior-year fiscal third quarter. Revenues were $6.35 billion for the fiscal third quarter, down from $6.47 billion in the same period of fiscal 2009.

Sammons said the economy, unemployment and an increasingly competitive environment continued to hurt front-end sales during the period as customers searched for bargains and cut back on discretionary items.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.