Rite Aid Corporation reported operating results for its fiscal first quarter ended May 30, 2015. Revenues were $6.6 billion.
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Net income was $18.8 million or $0.02 per diluted share, and Adjusted EBITDA $299.3 million, or 4.5 percent of revenues.
Revenues for the quarter were $6.6 billion versus revenues of $6.5 billion in the prior year's first quarter. Revenues increased 2.8 percent primarily as a result of an increase in same store sales.
The number of prescriptions filled in same stores increased 1.6 percent over the prior year period. Prescription sales accounted for 69.1 percent of total drugstore sales, and third party prescription revenue was 97.7 percent of pharmacy sales.
Net income was $18.8 million or $0.02 per diluted share compared to last year's first quarter net income of $41.4 million or $0.04 per diluted share.
The decline in net income resulted primarily from interest and other incremental pre-tax costs of $36 million, or $0.02 per share on an after-tax basis, incurred in connection with the company's pending acquisition of EnvisionRx. These incremental costs were partially offset by an increase in Adjusted EBITDA.
Adjusted EBITDA (which is reconciled to net income on the attached table) was $299.3 million or 4.5 percent of revenues for the first quarter compared to $282.6 million or 4.4 percent of revenues for the like period last year.
Adjusted EBITDA improved due to an increase in front-end and pharmacy gross profit, partially offset by an increase in selling, general and administrative expenses related to our higher level of sales, clinic expansion and the roll-out of the Plenti program.
In the first quarter, the company relocated 2 stores, remodeled 108 stores and expanded 1 store, bringing the total number of wellness stores chainwide to 1,741. The company also closed 4 stores, resulting in a total store count of 4,566 at the end of the first quarter.
Rite Aid has updated its fiscal 2016 guidance to reflect the expected results of EnvisionRx for the period subsequent to the transaction close, which is expected to occur by the beginning of July. Rite Aid has also updated its guidance to reflect the cost to refinance its 8% First Lien Notes due 2020.
Revenues, which includes PBM revenues are expected to be between $30.7 billion and $31.2 billion. Drugstore sales are expected to be between $26.9 billion and $27.4 billion and same store sales to range from an increase of 2.50 percent to an increase of 4.50 percent over fiscal 2015.
Adjusted EBITDA (which is reconciled to net income on the attached table) guidance is expected to be between $1.350 billion and $1.450 billion and net income is expected to be between $150 million and $230 million or income per diluted share of $0.14 to $0.22. Capital expenditures are expected to be approximately $665 million. ■