Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Nov. 26, 2022 | Dec. 20, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Nov. 26, 2022 | |
Current Fiscal Year End Date | --03-04 | |
Entity File Number | 1-5742 | |
Entity Registrant Name | RITE AID CORP | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 23-1614034 | |
Entity Address, Address Line One | PO Box 3165 | |
Entity Address, City or Town | Harrisburg | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 17105 | |
City Area Code | 717 | |
Local Phone Number | 761-2633 | |
Title of 12(b) Security | Common Stock, $1.00 par value | |
Trading Symbol | RAD | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 56,523,354 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000084129 | |
Amendment Flag | false | |
Former Address | ||
Document Information [Line Items] | ||
Entity Address, Address Line One | 1200 Intrepid Avenue, 2nd Floor | |
Entity Address, City or Town | Philadelphia | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19112 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Nov. 26, 2022 | Feb. 26, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 103,054 | $ 39,721 |
Accounts receivable, net | 1,473,997 | 1,343,496 |
Inventories, net of LIFO reserve of $512,540 and $487,173 | 1,981,335 | 1,959,389 |
Prepaid expenses and other current assets | 119,836 | 106,749 |
Total current assets | 3,678,222 | 3,449,355 |
Property, plant and equipment, net | 939,648 | 989,167 |
Operating lease right-of-use assets | 2,622,969 | 2,813,535 |
Goodwill | 626,936 | 879,136 |
Other intangibles, net | 259,954 | 291,196 |
Deferred tax assets | 13,938 | 20,071 |
Other assets | 68,107 | 86,543 |
Total assets | 8,209,774 | 8,529,003 |
Current liabilities: | ||
Current maturities of long-term debt and lease financing obligations | 6,107 | 5,544 |
Accounts payable | 1,454,988 | 1,571,261 |
Accrued salaries, wages and other current liabilities | 799,555 | 780,632 |
Current portion of operating lease liabilities | 563,490 | 575,651 |
Total current liabilities | 2,824,140 | 2,933,088 |
Long-term debt, less current maturities | 3,189,013 | 2,732,986 |
Long-term operating lease liabilities | 2,427,836 | 2,597,090 |
Lease financing obligations, less current maturities | 12,970 | 14,830 |
Other noncurrent liabilities | 159,549 | 151,976 |
Total liabilities | 8,613,508 | 8,429,970 |
Commitments and contingencies | ||
Total stockholders' (deficit) equity: | ||
Common stock, par value $1 per share; 75,000 shares authorized; shares issued and outstanding 56,526 and 55,752 | 56,526 | 55,752 |
Additional paid-in capital | 5,915,383 | 5,910,299 |
Accumulated deficit | (6,360,206) | (5,851,581) |
Accumulated other comprehensive loss | (15,437) | (15,437) |
Total stockholders' (deficit) equity | (403,734) | 99,033 |
Total liabilities and stockholders' (deficit) equity | $ 8,209,774 | $ 8,529,003 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Nov. 26, 2022 | Feb. 26, 2022 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Inventories, net of LIFO reserve | $ 512,540 | $ 487,173 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 75,000 | 75,000 |
Common stock, shares issued | 56,526 | 55,752 |
Common stock, shares outstanding | 56,526 | 55,752 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 26, 2022 | Nov. 27, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenues | $ 6,083,346 | $ 6,228,880 | $ 17,998,997 | $ 18,502,865 |
Costs and expenses: | ||||
Cost of revenues | 4,879,594 | 4,894,497 | 14,444,021 | 14,637,683 |
Selling, general and administrative expenses | 1,194,546 | 1,276,920 | 3,606,028 | 3,790,035 |
Facility exit and impairment charges | 22,539 | 47,455 | 134,955 | 67,639 |
Goodwill and intangible asset impairment charges | 252,200 | |||
Interest expense | 57,416 | 47,794 | 158,068 | 145,507 |
(Gain) loss on debt modifications and retirements, net | (41,312) | 3,235 | ||
Gain on sale of assets, net | (3,095) | (5,899) | (61,292) | (79) |
Loss on Bartell acquisition | 5,346 | 5,346 | ||
Total costs and expenses | 6,151,000 | 6,266,113 | 18,492,668 | 18,649,366 |
Loss before income taxes | (67,654) | (37,233) | (493,671) | (146,501) |
Income tax benefit | (510) | (1,175) | 14,954 | 2,915 |
Net loss | (67,144) | (36,058) | (508,625) | (149,416) |
Computation of loss attributable to common stockholders: | ||||
Net loss attributable to common stockholders - basic | (67,144) | (36,058) | (508,625) | (149,416) |
Net loss attributable to common stockholders - diluted | $ (67,144) | $ (36,058) | $ (508,625) | $ (149,416) |
Basic loss per share: | ||||
Basic loss per share | $ (1.23) | $ (0.67) | $ (9.32) | $ (2.77) |
Diluted loss per share: | ||||
Diluted loss per share | $ (1.23) | $ (0.67) | $ (9.32) | $ (2.77) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 26, 2022 | Nov. 27, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Net loss | $ (67,144) | $ (36,058) | $ (508,625) | $ (149,416) |
Defined benefit pension plans: | ||||
Amortization of net actuarial losses included in net periodic pension cost, net of $0 and $0 income tax expense | 123 | 369 | ||
Change in fair value of interest rate cap | 27 | |||
Total other comprehensive income | 123 | 396 | ||
Comprehensive loss | $ (67,144) | $ (35,935) | $ (508,625) | $ (149,020) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Nov. 26, 2022 | Nov. 27, 2021 | Aug. 28, 2021 | May 29, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||||
Amortization of net actuarial losses included in net periodic pension cost, net of income tax expense | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
BALANCE - beginning of period at Feb. 27, 2021 | $ 55,143 | $ 5,897,168 | $ (5,313,103) | $ (24,054) | $ 615,154 |
BALANCE (in shares) at Feb. 27, 2021 | 55,143 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Net loss | (13,057) | (13,057) | |||
Other comprehensive loss: | |||||
Changes in defined benefit plans, tax expense | 123 | 123 | |||
Change in fair value of interest rate cap | 27 | 27 | |||
Comprehensive loss | (12,907) | ||||
Exchange of restricted shares for taxes | $ (2) | (33) | (35) | ||
Exchange of restricted shares for taxes (in shares) | (2) | ||||
Cancellation of restricted stock | $ (48) | 48 | |||
Cancellation of restricted stock (in shares) | (48) | ||||
Amortization of restricted stock balance | 1,618 | 1,618 | |||
Stock-based compensation expense | 150 | 150 | |||
BALANCE - end of period at May. 29, 2021 | $ 55,093 | 5,898,951 | (5,326,160) | (23,904) | 603,980 |
BALANCE (in shares) at May. 29, 2021 | 55,093 | ||||
BALANCE - beginning of period at Feb. 27, 2021 | $ 55,143 | 5,897,168 | (5,313,103) | (24,054) | 615,154 |
BALANCE (in shares) at Feb. 27, 2021 | 55,143 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Net loss | (149,416) | ||||
Other comprehensive loss: | |||||
Changes in defined benefit plans, tax expense | 369 | ||||
Change in fair value of interest rate cap | 27 | ||||
Comprehensive loss | (149,020) | ||||
BALANCE - end of period at Nov. 27, 2021 | $ 55,761 | 5,902,445 | (5,462,519) | (23,658) | 472,029 |
BALANCE (in shares) at Nov. 27, 2021 | 55,761 | ||||
BALANCE - beginning of period at May. 29, 2021 | $ 55,093 | 5,898,951 | (5,326,160) | (23,904) | 603,980 |
BALANCE (in shares) at May. 29, 2021 | 55,093 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Net loss | (100,301) | (100,301) | |||
Other comprehensive loss: | |||||
Changes in defined benefit plans, tax expense | 123 | 123 | |||
Comprehensive loss | (100,178) | ||||
Issuance of restricted stock | $ 823 | (823) | |||
Issuance of restricted stock (in shares) | 823 | ||||
Exchange of restricted shares for taxes | $ (146) | (2,040) | (2,186) | ||
Exchange of restricted shares for taxes (in shares) | (146) | ||||
Cancellation of restricted stock | $ (38) | 38 | |||
Cancellation of restricted stock (in shares) | (38) | ||||
Amortization of restricted stock balance | 3,519 | 3,519 | |||
Stock-based compensation expense | 150 | 150 | |||
BALANCE - end of period at Aug. 28, 2021 | $ 55,732 | 5,899,795 | (5,426,461) | (23,781) | 505,285 |
BALANCE (in shares) at Aug. 28, 2021 | 55,732 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Net loss | (36,058) | (36,058) | |||
Other comprehensive loss: | |||||
Changes in defined benefit plans, tax expense | 123 | 123 | |||
Comprehensive loss | (35,935) | ||||
Issuance of restricted stock | $ 81 | (81) | |||
Issuance of restricted stock (in shares) | 81 | ||||
Exchange of restricted shares for taxes | $ (10) | (121) | (131) | ||
Exchange of restricted shares for taxes (in shares) | (10) | ||||
Cancellation of restricted stock | $ (42) | 42 | |||
Cancellation of restricted stock (in shares) | (42) | ||||
Amortization of restricted stock balance | 2,660 | 2,660 | |||
Stock-based compensation expense | 150 | 150 | |||
BALANCE - end of period at Nov. 27, 2021 | $ 55,761 | 5,902,445 | (5,462,519) | (23,658) | 472,029 |
BALANCE (in shares) at Nov. 27, 2021 | 55,761 | ||||
BALANCE - beginning of period at Feb. 26, 2022 | $ 55,752 | 5,910,299 | (5,851,581) | (15,437) | 99,033 |
BALANCE (in shares) at Feb. 26, 2022 | 55,752 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Net loss | (110,191) | (110,191) | |||
Other comprehensive loss: | |||||
Comprehensive loss | (110,191) | ||||
Issuance of restricted stock | $ 61 | (61) | |||
Issuance of restricted stock (in shares) | 61 | ||||
Exchange of restricted shares for taxes | $ (63) | (490) | (553) | ||
Exchange of restricted shares for taxes (in shares) | (63) | ||||
Cancellation of restricted stock | $ (127) | 127 | |||
Cancellation of restricted stock (in shares) | (127) | ||||
Amortization of restricted stock balance | 3,324 | 3,324 | |||
Stock-based compensation expense | 201 | 201 | |||
Amortization of performance-based incentive plans | (190) | (190) | |||
BALANCE - end of period at May. 28, 2022 | $ 55,623 | 5,913,210 | (5,961,772) | (15,437) | (8,376) |
BALANCE (in shares) at May. 28, 2022 | 55,623 | ||||
BALANCE - beginning of period at Feb. 26, 2022 | $ 55,752 | 5,910,299 | (5,851,581) | (15,437) | 99,033 |
BALANCE (in shares) at Feb. 26, 2022 | 55,752 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Net loss | (508,625) | ||||
Other comprehensive loss: | |||||
Changes in defined benefit plans, tax expense | |||||
Change in fair value of interest rate cap | |||||
Comprehensive loss | (508,625) | ||||
BALANCE - end of period at Nov. 26, 2022 | $ 56,526 | 5,915,383 | (6,360,206) | (15,437) | (403,734) |
BALANCE (in shares) at Nov. 26, 2022 | 56,526 | ||||
BALANCE - beginning of period at May. 28, 2022 | $ 55,623 | 5,913,210 | (5,961,772) | (15,437) | (8,376) |
BALANCE (in shares) at May. 28, 2022 | 55,623 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Net loss | (331,290) | (331,290) | |||
Other comprehensive loss: | |||||
Comprehensive loss | (331,290) | ||||
Issuance of restricted stock | $ 1,141 | (1,141) | |||
Issuance of restricted stock (in shares) | 1,141 | ||||
Exchange of restricted shares for taxes | $ (182) | (1,284) | (1,466) | ||
Exchange of restricted shares for taxes (in shares) | (182) | ||||
Cancellation of restricted stock | $ (2) | 2 | |||
Cancellation of restricted stock (in shares) | (2) | ||||
Amortization of restricted stock balance | 3,323 | 3,323 | |||
Stock-based compensation expense | 111 | 111 | |||
Amortization of performance-based incentive plans | 1,300 | 1,300 | |||
BALANCE - end of period at Aug. 27, 2022 | $ 56,580 | 5,915,521 | (6,293,062) | (15,437) | (336,398) |
BALANCE (in shares) at Aug. 27, 2022 | 56,580 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Net loss | (67,144) | (67,144) | |||
Other comprehensive loss: | |||||
Changes in defined benefit plans, tax expense | |||||
Comprehensive loss | (67,144) | ||||
Exchange of restricted shares for taxes | $ (12) | (75) | (87) | ||
Exchange of restricted shares for taxes (in shares) | (12) | ||||
Cancellation of restricted stock | $ (42) | 42 | |||
Cancellation of restricted stock (in shares) | (42) | ||||
Amortization of restricted stock balance | 2,335 | 2,335 | |||
Stock-based compensation expense | 111 | 111 | |||
Amortization of performance-based incentive plans | (2,551) | (2,551) | |||
BALANCE - end of period at Nov. 26, 2022 | $ 56,526 | $ 5,915,383 | $ (6,360,206) | $ (15,437) | $ (403,734) |
BALANCE (in shares) at Nov. 26, 2022 | 56,526 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Nov. 26, 2022 | Nov. 27, 2021 | Aug. 28, 2021 | May 29, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||||||
Changes in defined benefit plans, tax expense | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 26, 2022 | Nov. 27, 2021 | |
Operating activities: | ||
Net loss | $ (508,625) | $ (149,416) |
Adjustments to reconcile to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 208,133 | 222,691 |
Facility exit and impairment charges | 134,955 | 67,639 |
Goodwill and intangible asset impairment charges | 252,200 | |
LIFO charge | 25,367 | 900 |
Gain on sale of assets, net | (61,292) | (79) |
Change in allowances for uncollectible accounts receivable | 7,411 | |
Loss on Bartell acquisition | 5,346 | |
Stock-based compensation expense | 8,635 | 8,820 |
(Gain) loss on debt modifications and retirements, net | (41,312) | 3,235 |
Changes in deferred taxes | 6,133 | (1,602) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (149,632) | (398,079) |
Inventories | (47,771) | (87,150) |
Accounts payable | (99,105) | 129,436 |
Operating lease right-of-use assets and operating lease liabilities | (54,551) | (19,517) |
Other assets | (8,935) | 34,946 |
Other liabilities | 9,537 | 219,390 |
Net cash (used in) provided by operating activities | (318,852) | 36,560 |
Investing activities: | ||
Payments for property, plant and equipment | (172,563) | (145,001) |
Intangible assets acquired | (24,937) | (24,289) |
Proceeds from insured loss | 10,436 | |
Proceeds from dispositions of assets and investments | 51,030 | 7,821 |
Proceeds from sale-leaseback transactions | 55,894 | 39,790 |
Net cash used in investing activities | (90,576) | (111,243) |
Financing activities: | ||
Proceeds from issuance of long-term debt | 350,000 | |
Net proceeds from revolver | 641,000 | 300,000 |
Principal payments on long-term debt | (153,068) | (544,020) |
Change in zero balance cash accounts | (12,184) | (15,087) |
Financing fees paid for early debt redemption | (881) | (833) |
Payments for taxes related to net share settlement of equity awards | (2,106) | (2,352) |
Deferred financing costs paid | (18,638) | |
Net cash provided by financing activities | 472,761 | 69,070 |
Increase (decrease) in cash and cash equivalents | 63,333 | (5,613) |
Cash and cash equivalents, beginning of period | 39,721 | 160,902 |
Cash and cash equivalents, end of period | $ 103,054 | $ 155,289 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Nov. 26, 2022 | |
Basis of Presentation and Significant Accounting Policies | |
Basis of Presentation and Significant Accounting Policies | 1. Basis of Presentation and Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X, and therefore do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete annual financial statements. The accompanying financial information reflects all adjustments which are of a recurring nature and, in the opinion of management, are necessary for a fair presentation of the results for the interim periods. The results of operations for the thirteen and thirty-nine week periods ended November 26, 2022 are not necessarily indicative of the results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Rite Aid Corporation (“Rite Aid”) and Subsidiaries (together with Rite Aid, the “Company”) Fiscal 2022 10-K. Revenue Recognition The following table disaggregates the Company’s revenue by major source in each segment for the thirteen and thirty-nine week periods ended November 26, 2022 and November 27, 2021: November 26, November 27, November 26, November 27, 2022 2021 2022 2021 In thousands (13 weeks) (13 weeks) (39 weeks) (39 weeks) Retail Pharmacy segment: Pharmacy sales $ 3,155,646 $ 3,132,821 $ 9,180,331 $ 9,069,520 Front-end sales 1,229,547 1,272,342 3,722,343 3,901,285 Other revenue 27,039 27,345 86,705 90,603 Total Retail Pharmacy segment 4,412,232 4,432,508 12,989,379 13,061,408 Pharmacy Services segment 1,726,933 1,858,830 5,180,031 5,629,325 Intersegment elimination (55,819) (62,458) (170,413) (187,868) Total revenue $ 6,083,346 $ 6,228,880 $ 17,998,997 $ 18,502,865 The Retail Pharmacy segment offered a chain-wide loyalty card program titled wellness+. Individual customers were able to become members of the wellness+ program. Members participating in the wellness+ loyalty card program earned points on a calendar year basis for eligible front-end merchandise purchases and qualifying prescription purchases. The wellness+ program was terminated as of July 1, 2020, with benefits earned as of that date available to be used through the end of calendar year 2020. Beginning in December 2020, the Company granted temporary extensions of benefits to certain previous members that were eligible for a discount as of the end of each previous six month period such that those prior members were eligible to continue to receive that discount on purchases made through the subsequent six months with no additional purchase requirement. New and existing customers who were not already eligible for program benefits also had the opportunity to earn additional discounts on purchases made through each six month period. A final extension was granted on December 31, 2021 through February 26, 2022 at which point all discounts were terminated. A new loyalty program, Rite Aid Rewards, was initiated on February 27, 2022. Customers that enroll in the new program earn points for each dollar spent on front of store purchases as well as for eligible pharmacy prescriptions. Points can then be converted into a “Rite Aid Rewards” coupon that can be tendered as payment in a future purchase. Each point is worth $0.002. Customers must accumulate 1,000 points and create an online account in order to convert earned points to a “Rite Aid Rewards” coupon. Unused/unconverted points expire after 90 days. Unredeemed “Rite Aid Rewards” coupons expire 30 days after conversion from points earned. Points earned pursuant to the Rite Aid Rewards program represent a performance obligation. The value of unredeemed Rite Aid Rewards points is deferred as a contract liability (included in other current liabilities). As members redeem points in the form of a Rite Aid Rewards coupon or when points or unredeemed Rite Aid Rewards coupons expire, the Retail Pharmacy segment recognizes the redeemed/expired portion of the deferred contract liability into revenue. The Retail Pharmacy segment had accrued contract liabilities of $1,157 and $0 as of November 26, 2022 and February 26, 2022, respectively. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) |
Acquisition
Acquisition | 9 Months Ended |
Nov. 26, 2022 | |
Acquisition | |
Acquisition | 2. Acquisition On December 18, 2020, pursuant to that certain stock purchase agreement, dated as of October 7, 2020, by and between the Company and Bartell Drug Company (“Bartell”), the Company acquired Bartell (the “Acquisition”), a Washington corporation, for approximately $89,724 in cash, subject to certain customary post-closing working capital adjustments. The Company financed the Acquisition with borrowings under its Senior Secured Revolving Credit Facility together with cash on hand. Bartell operated 67 retail drug stores and one distribution center in the greater Seattle, Washington area. Bartell operates as a 100 percent owned subsidiary of the Company within its Retail Pharmacy segment. The Company’s condensed consolidated financial statements for the thirteen and thirty-nine week periods ended November 26, 2022 and November 27, 2021 include Bartell’s results of operations. The Company’s condensed consolidated financial statements reflect the final purchase accounting adjustments in accordance with ASC 805 “Business Combinations”, whereby the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values on the Acquisition date. The following allocation of the purchase price and the estimated transaction costs is final: Final purchase price Cash consideration $ 89,724 Total 89,724 Final purchase price allocation Cash and cash equivalents $ 3,494 Accounts receivable 23,860 Inventories 67,745 Prepaid expenses and other current assets 1,857 Total current assets 96,956 Property and equipment 28,229 Operating lease right-of-use assets 143,651 Intangible assets (1) 68,700 Other assets 1,805 Total assets acquired 339,341 Accounts payable 24,166 Accrued salaries, wages and other current liabilities 20,335 Current portion of operating lease liabilities 24,617 Total current liabilities 69,118 Long-term operating lease liabilities 124,023 Other long-term liabilities 166 Total liabilities assumed 193,307 Deferred tax liabilities recorded on purchase 13,951 Net assets acquired 132,083 Bargain purchase gain (42,359) Total purchase price $ 89,724 (1) Intangible assets are recorded at estimated fair value, as determined by management based on available information which includes a final valuation prepared by an independent third party. The fair values assigned to identifiable intangible assets were determined through the use of the income approach, specifically the relief from royalty and the multi-period excess earnings methods. The major assumptions used in arriving at the estimated identifiable intangible asset values included management’s final estimates of future cash flows, discounted at an appropriate rate of return which are based on the weighted average cost of capital for both the Company and other market participants, projected customer attrition rates, as well as applicable royalty rates for comparable assets. The useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows. The estimated fair value of intangible assets and related useful lives as included in the final purchase price allocation include: Estimated Fair Value Estimated Useful Life (In Years) Prescription files $ 54,300 10 Tradename 14,400 Indefinite Total $ 68,700 During the thirteen week period ended February 27, 2021, the Company recorded a gain on Bartell acquisition of $47,705 primarily due to fair value adjustments related to prescription files and the tradename compared to book values. During the thirteen week period ended November 27, 2021, in connection with determining its final purchase price allocation, the Company recorded a loss on Bartell acquisition of $5,346 primarily due to contract termination charges, inventory valuation adjustments and changes in deferred income taxes, resulting in a net bargain purchase gain of $42,359. The Company believes that the bargain purchase gain was primarily the result of the decision by the Bartell stockholders to sell their interests as Bartell had been experiencing increasing borrowings under its credit agreements to meet its operating needs and increasing net losses. The agreed upon purchase price reflected the fact the seller would have needed to incur further significant debt to cover the operating costs of Bartell, which would have required amendments to its credit arrangements. With the Company’s existing infrastructure, scale and expertise, the Company believes that it has access to the necessary synergies to allow necessary operational improvements to be implemented more efficiently than the seller. During the thirteen week periods ended November 26, 2022 and November 27, 2021, acquisition costs of $0 and $3,642 were expensed as incurred. During the thirty-nine week periods ended November 26, 2022 and November 27, 2021, acquisition costs of $0 and $12,119 were expensed as incurred. |
Restructuring
Restructuring | 9 Months Ended |
Nov. 26, 2022 | |
Restructuring | |
Restructuring | 3. Restructuring Beginning in fiscal 2019, the Company initiated a series of restructuring plans designed to reorganize its executive management team, reduce managerial layers, and consolidate roles. In March 2020, the Company announced the details of its RxEvolution strategy, which includes building tools to work with regional health plans to improve patient health outcomes, rationalizing SKU’s in its front-end offering to free up working capital and update its merchandise assortment, assessing its pricing and promotional strategy, rebranding its retail pharmacy and pharmacy services business, launching its Store of the Future format and further reducing SG&A and headcount, including integrating certain back office functions in the Pharmacy Services segment both within the segment and across the enterprise. Other strategic initiatives include the expansion of the Company’s digital business, replacing and updating the Company’s financial systems to improve efficiency, and movement to a common client platform at Elixir. In April 2022, the Company announced further strategic initiatives to reduce costs through the closure of unprofitable stores, reduce corporate administration expenses, improve efficiencies in worked payroll and other store labor costs, engage in a comprehensive review of purchasing and other business processes in both the Retail Pharmacy and Pharmacy Services segments in order to identify areas of opportunity, as well as expense reductions at the Pharmacy Services segment. These and future restructuring activities are expected to provide future growth and expense efficiency benefits. There can be no assurance that the Company’s current and future restructuring charges will achieve the cost savings and remerchandising benefits in the amounts or time anticipated. For the thirteen week period ended November 26, 2022, the Company incurred total restructuring-related costs of $26,500, which are included as a component of SG&A. These costs are as follows: Retail Pharmacy Pharmacy segment Services segment Total Restructuring-related costs Severance and related costs associated with ongoing reorganization efforts (a) $ 3,242 $ 1,558 $ 4,800 Professional and other fees relating to restructuring activities (b) 16,634 5,066 21,700 Total restructuring-related costs $ 19,876 $ 6,624 $ 26,500 For the thirteen week period ended November 27, 2021, the Company incurred total restructuring-related costs of $9,657, which are included as a component of SG&A. These costs are as follows: Retail Pharmacy Pharmacy segment Services segment Total Restructuring-related costs Severance and related costs associated with ongoing reorganization efforts (a) $ — $ 97 $ 97 Professional and other fees relating to restructuring activities (b) 3,746 5,814 9,560 Total restructuring-related costs $ 3,746 $ 5,911 $ 9,657 For the thirty-nine week period ended November 26, 2022, the Company incurred total restructuring-related costs of $61,951, which are included as a component of SG&A. These costs are as follows: Retail Pharmacy Pharmacy segment Services segment Total Restructuring-related costs Severance and related costs associated with ongoing reorganization efforts (a) $ 15,443 $ 2,174 $ 17,617 Professional and other fees relating to restructuring activities (b) 30,246 14,088 44,334 Total restructuring-related costs $ 45,689 $ 16,262 $ 61,951 For the thirty-nine week period ended November 27, 2021, the Company incurred total restructuring-related costs of $25,173, which are included as a component of SG&A. These costs are as follows: Retail Pharmacy Pharmacy segment Services segment Total Restructuring-related costs Severance and related costs associated with ongoing reorganization efforts (a) $ — $ 1,098 $ 1,098 Professional and other fees relating to restructuring activities (b) 7,951 16,124 24,075 Total restructuring-related costs $ 7,951 $ 17,222 $ 25,173 A summary of restructuring-related liabilities associated with the programs noted above, which are included in accrued salaries, wages and other current liabilities, is as follows: Severance and related Professional and costs (a) other fees (b) Total Balance at February 26, 2022 $ 4,257 $ 4,463 $ 8,720 Additions charged to expense 11,904 10,742 22,646 Cash payments (5,231) (11,727) (16,958) Balance at May 28, 2022 $ 10,930 $ 3,478 $ 14,408 Additions charged to expense 913 11,892 12,805 Cash payments (2,782) (10,066) (12,848) Balance at August 27, 2022 $ 9,061 $ 5,304 $ 14,365 Additions charged to expense 4,800 21,700 26,500 Cash payments (4,452) (18,297) (22,749) Balance at November 26, 2022 $ 9,409 $ 8,707 $ 18,116 (a) – Severance and related costs reflect severance accruals, executive search fees, outplacement services and other similar charges associated with ongoing reorganization efforts. (b) – Professional and other fees include costs incurred in connection with the identification and implementation of initiatives associated with restructuring activities. The Company anticipates incurring approximately $72,000 during fiscal 2023 in connection with its continued restructuring activities. |
Loss Per Share
Loss Per Share | 9 Months Ended |
Nov. 26, 2022 | |
Loss Per Share | |
Loss Per Share | 4. Loss Per Share Basic loss per share is computed by dividing loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the Company, subject to anti-dilution limitations. Thirteen Week Period Ended Thirty-Nine Week Period Ended November 26, November 27, November 26, November 27, 2022 2021 2022 2021 Basic and diluted loss per share: Numerator: Net loss attributable to common stockholders — basic and diluted $ (67,144) $ (36,058) $ (508,625) $ (149,416) Denominator: Basic and diluted weighted average shares 54,792 54,168 54,567 54,004 Basic and diluted loss per share $ (1.23) $ (0.67) $ (9.32) $ (2.77) Due to their antidilutive effect, 537 and 719 potential shares related to stock options have been excluded from the computation of diluted loss per share for the thirteen and thirty-nine week periods ended November 26, 2022 and November 27, 2021, respectively. Also, excluded from the computation of diluted loss per share for the thirteen and thirty-nine week periods ended November 26, 2022 and November 27, 2021 are restricted shares of 1,724 and 1,583, respectively, which are included in shares outstanding. |
Facility Exit and Impairment Ch
Facility Exit and Impairment Charges | 9 Months Ended |
Nov. 26, 2022 | |
Facility Exit and Impairment Charges | |
Facility Exit and Impairment Charges | 5. Facility Exit and Impairment Charges Facility exit and impairment charges consist of amounts as follows: Thirteen Week Period Thirty-Nine Week Period Ended Ended November 26, November 27, November 26, November 27, 2022 2021 2022 2021 Impairment charges $ 7,728 $ 40,323 $ 77,502 $ 51,372 Facility exit charges 14,811 7,132 57,453 16,267 $ 22,539 $ 47,455 $ 134,955 $ 67,639 Impairment Charges These amounts include the write-down of long-lived assets at locations that were assessed for impairment because of management’s intention to relocate or close the location or because of changes in circumstances that indicated the carrying value of an asset may not be recoverable. The Company utilizes the three-level valuation hierarchy for the recognition and disclosure of fair value measurements. The categorization of assets and liabilities within this hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy consist of the following: ● Level 1—Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. ● Level 2—Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument. ● Level 3—Inputs to the valuation methodology are unobservable inputs based upon management’s best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions about risk. Non-Financial Assets Measured on a Non-Recurring Basis Long-lived non-financial assets are measured at fair value on a nonrecurring basis for purposes of calculating impairment using Level 2 and Level 3 inputs as defined in the fair value hierarchy. The fair value of long-lived assets using Level 2 inputs is determined by evaluating the current economic conditions in the geographic area for similar use assets. The fair value of long-lived assets using Level 3 inputs is determined by estimating the amount and timing of net future cash flows (which are unobservable inputs) and discounting them using a risk-adjusted rate of interest (which is Level 1). The Company estimates future cash flows based on its experience and knowledge of the market in which the store is located. Significant increases or decreases in actual cash flows may result in valuation changes. During the thirty-nine week period ended November 26, 2022, long-lived assets with a carrying value of $94,713, primarily right-of-use assets in connection with stores or leased office spaces, were written down to their fair value of $17,211, resulting in an impairment charge of $77,502 of which $7,728 relates to the thirteen week period ended November 26, 2022. During the thirty-nine week period ended November 27, 2021, long-lived assets with a carrying value of $74,270, primarily right-of-use assets in connection with stores or leased office spaces, were written down to their fair value of $22,898, resulting in an impairment charge of $51,372 of which $40,323 related to the thirteen week period ended November 27, 2021. If our actual future cash flows differ from our projections materially, certain stores that are either not impaired or partially impaired in the current period may be further impaired in future periods. The following table presents fair values for those assets measured at fair value on a non-recurring basis at November 26, 2022 and November 27, 2021: Fair Values Total as of Charges Level 1 Level 2 Level 3 Impairment Date November 26, 2022 Long-lived assets held for use $ — $ 12,096 $ — $ 12,096 $ (72,670) Long-lived assets held for sale $ — $ 5,115 $ — $ 5,115 $ (4,832) Total $ — $ 17,211 $ — $ 17,211 $ (77,502) Fair Values Total as of Charges Level 1 Level 2 Level 3 Impairment Date November 27, 2021 Long-lived assets held for use $ — $ — $ 22,898 $ 22,898 $ (51,372) Long-lived assets held for sale $ — $ — $ — $ — $ — Total $ — $ — $ 22,898 $ 22,898 $ (51,372) The above assets reflected in the caption ‘Long-lived assets held for sale’ have not been reclassified to assets held for sale due to their immateriality. Facility Exit Charges As part of the Company's ongoing business activities, the Company assesses stores and distribution centers for potential closure or relocation. Decisions to close or relocate stores or distribution centers in future periods would result in facility exit charges and inventory liquidation charges, as well as impairment of assets at these locations. When a store or distribution center is closed, the Company records an expense for unrecoverable costs and accrues a liability equal to the present value at current credit adjusted risk-free interest rates of any anticipated executory costs which are not included within the store or distribution center's respective lease liability under Topic 842. Other store or distribution center closing and liquidation costs are expensed when incurred. The following table reflects changes in the Company’s closed store liability relating to closed store and distribution center charges for new closures, changes in assumptions and interest accretion: Thirteen Week Period Thirty-Nine Week Period Ended Ended November 26, November 27, November 26, November 27, 2022 2021 2022 2021 Balance—beginning of period $ 41,946 $ 5,611 $ 18,688 $ 3,443 Provision for present value of executory costs for leases exited 10,477 3,620 39,792 5,328 Changes in assumptions and other adjustments (3,259) 1,387 (3,886) 2,880 Interest accretion 258 4 593 20 Cash payments (3,818) (3,941) (9,583) (4,990) Balance—end of period $ 45,604 $ 6,681 $ 45,604 $ 6,681 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Nov. 26, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | 6. Fair Value Measurements The Company utilizes the three-level valuation hierarchy as described in Note 5, Facility Exit and Impairment Charges, Financial instruments other than long-term indebtedness include cash and cash equivalents, accounts receivable and accounts payable. These instruments are recorded at book value, which we believe approximate their fair values due to their short term nature. In addition, as of November 26, 2022, the Company has $7,696 of investments carried at amortized cost as these investments are being held to maturity, which are included as a component of prepaid expenses and other current assets. As of February 26, 2022, the Company has $7,406 of investments carried at amortized cost as these investments are being held to maturity, which are included as a component of other assets. The Company believes the carrying value of these investments approximates their fair value. The fair value for LIBOR-based borrowings under the Company’s senior secured credit facility is estimated based on the quoted market price of the financial instrument which is considered Level 1 of the fair value hierarchy. The fair values of substantially all of the Company’s other long-term indebtedness are estimated based on quoted market prices of the financial instruments which are considered Level 1 of the fair value hierarchy. The carrying amount and estimated fair value of the Company’s total long-term indebtedness was $3,189,013 and $2,686,945 respectively, as of November 26, 2022. The carrying amount and estimated fair value of the Company's total long-term indebtedness was $2,732,986 and $2,661,122, respectively, as of February 26, 2022. |
Income Taxes
Income Taxes | 9 Months Ended |
Nov. 26, 2022 | |
Income Taxes | |
Income Taxes | 7. Income Taxes The Company recorded an income tax benefit of $510 and $1,175 for the thirteen week periods ended November 26, 2022 and November 27, 2021, respectively. The Company recorded income tax expense of $14,954 and $2,915 for the thirty-nine week periods ended November 26, 2022 and November 27, 2021, respectively. The effective tax rate for the thirteen week periods ended November 26, 2022 and November 27, 2021 was 0.8% and 3.2%, respectively. The effective tax rate for the thirty-nine week periods ended November 26, 2022 and November 27, 2021 was (3.0)% and (2.0)%, respectively. The effective tax rate for the thirteen and thirty-nine week periods ended November 26, 2022 was net of an adjustment of (19.5)% and 46.5%, respectively, to adjust the valuation allowance against deferred tax assets. The effective tax rate for the thirty-nine week period ended November 26, 2022 was primarily impacted by a Pennsylvania law change that reduced the statutory corporate net income tax rate, causing a reduction to the valuation allowance of $380,509. The effective tax rate for the thirteen and thirty-nine week periods ended November 27, 2021 was net of an adjustment of (18.5)% and (21.4)%, respectively, to adjust the valuation allowance against deferred tax assets. The Company recognizes tax liabilities in accordance with the guidance for uncertain tax positions and management adjusts these liabilities with changes in judgment as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities. The Company believes that it is reasonably possible that a decrease of up to $25,130 in unrecognized tax benefits related to state exposures may be necessary in the next twelve months; however, management does not expect the change to have a material impact on the results of operations or the financial position of the Company. The Company regularly evaluates valuation allowances established for deferred tax assets for which future realization is uncertain. Management will continue to monitor all available evidence related to the net deferred tax assets that may change the most recent assessment, including events that have occurred or are anticipated to occur. The Company continues to maintain a valuation allowance against net deferred tax assets of $1,593,207 and $1,822,710, which relates to federal and state deferred tax assets that may not be realized based on the Company's future projections of taxable income at November 26, 2022 and February 26, 2022, respectively. On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022, which, among other things, implemented a 15% minimum tax on book income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy. Based on the Company’s current analysis of the provisions, it does not believe that this legislation will have a material impact on the financial statements. |
Medicare Part D
Medicare Part D | 9 Months Ended |
Nov. 26, 2022 | |
Medicare Part D | |
Medicare Part D | 8. Medicare Part D The Company offers Medicare Part D benefits through Elixir Insurance (“EI”), which has contracted with CMS to be a Prescription Drug Plan (“PDP”) and, pursuant to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, must be a risk-bearing entity regulated under state insurance laws or similar statutes. EI is a licensed domestic insurance company under the applicable laws and regulations. Pursuant to these laws and regulations, EI must file quarterly and annual reports with the National Association of Insurance Commissioners (“NAIC”) and certain state regulators, must maintain certain minimum amounts of capital and surplus under formulas established by certain states and must, in certain circumstances, request and receive the approval of certain state regulators before making dividend payments or other capital distributions to the Company. The Company does not believe these limitations on dividends and distributions materially impact its financial position. EI is subject to minimum capital and surplus requirements in certain states. The minimum amount of capital and surplus required to satisfy regulatory requirements in these states is $11,383 as of September 30, 2022. EI was in excess of the minimum required amounts in these states as of November 26, 2022. The Company has recorded estimates of various assets and liabilities arising from its participation in the Medicare Part D program based on information in its claims management and enrollment systems. Significant estimates arising from its participation in this program include: (i) estimates of low-income cost subsidies, reinsurance amounts, and coverage gap discount amounts ultimately payable to or receivable from CMS based on a detailed claims reconciliation that will occur in the following year; (ii) an estimate of amounts receivable from CMS under a risk-sharing feature of the Medicare Part D program design, referred to as the risk corridor; and (iii) estimates for claims that have been reported and are in the process of being paid or contested and for our estimate of claims that have been incurred but have not yet been reported. On August 12, 2021, the Company entered into a receivable purchase agreement (the “August 2021 Receivable Purchase Agreement”) with Bank of America, N.A. (the “Purchaser”). Pursuant to the terms and conditions set forth in the August 2021 Receivable Purchase Agreement, the Company sold $271,829, a portion of its calendar year 2021 CMS receivable, for $258,116, of which $239,360 was received on August 12, 2021. The remaining $18,756, which is included in accounts receivable, net as of November 26, 2022, is payable to the Company, subject to final CMS claim reconciliation adjustments, upon receipt of the final remittance from CMS. In connection therewith, the Company recognized a loss of $13,713, which is included as a component of loss (gain) on sale of assets, net during the thirteen week period ended August 28, 2021. On August 12, 2021, concurrent with the August 2021 Receivable Purchase Agreement, the Company entered into an indemnity agreement (the “August 2021 Indemnity Agreement”), whereby the Company has agreed to indemnify, reimburse, and hold Purchaser harmless from certain liabilities and expenses actually suffered or incurred by the Purchaser resulting from the occurrence of certain events as specified in the August 2021 Indemnity Agreement. Based on its evaluation of the August 2021 Indemnity Agreement, the Company has determined that it is highly unlikely that the events covered under the August 2021 Indemnity Agreement would occur, and consequently, the Company has not recorded any indemnification liability associated with the August 2021 Indemnity Agreement. On January 24, 2022, the Company entered into a receivable purchase agreement (the “January 2022 Receivable Purchase Agreement”) with Purchaser. Pursuant to the terms and conditions set forth in the January 2022 Receivable Purchase Agreement, the Company sold $400,680, a portion of its calendar 2021 CMS receivable, for $387,035, of which $359,388 was received on January 24, 2022. The remaining $27,647, which is included in accounts receivable, net as of November 26, 2022, is payable to the Company, subject to final CMS claim reconciliation adjustments, upon receipt of the final remittance from CMS. In connection therewith, the Company recognized a loss of $13,645, which is included as a component of loss (gain) on sale of assets, net during the thirteen week period ended February 26, 2022. On January 24, 2022, concurrent with the January 2022 Receivable Purchase Agreement, the Company entered into an indemnity agreement (the “January 2022 Indemnity Agreement”), whereby the Company has agreed to indemnify, reimburse, and hold Purchaser harmless from certain liabilities and expenses actually suffered or incurred by the Purchaser resulting from the occurrence of certain events as specified in the January 2022 Indemnity Agreement. Based on its evaluation of the January 2022 Indemnity Agreement, the Company has determined that it is highly unlikely that the events covered under the January 2022 Indemnity Agreement would occur, and consequently, the Company has not recorded any indemnification liability associated with the January 2022 Indemnity Agreement. On October 13, 2022, the Company entered into a receivable purchase agreement (the “October 2022 Receivable Purchase Agreement”) with Purchaser. Pursuant to the terms and conditions set forth in the October 2022 Receivable Purchase Agreement, the Company sold $195,487, a portion of its calendar 2022 CMS receivable, for $180,405, of which $166,917 was received on October 13, 2022. The remaining $13,488, which is included in accounts receivable, net as of November 26, 2022, is payable to the Company, subject to final CMS claim reconciliation adjustments, upon receipt of the final remittance from CMS. In connection therewith, the Company recognized a loss of $15,082, which is included as a component of gain on sale of assets, net during the thirteen week period ended November 26, 2022. On October 13, 2022, concurrent with the October 2022 Receivable Purchase Agreement, the Company entered into an indemnity agreement (the “October 2022 Indemnity Agreement”), whereby the Company has agreed to indemnify, reimburse, and hold Purchaser harmless from certain liabilities and expenses actually suffered or incurred by the Purchaser resulting from the occurrence of certain events as specified in the October 2022 Indemnity Agreement. Based on its evaluation of the October 2022 Indemnity Agreement, the Company has determined that it is highly unlikely that the events covered under the October 2022 Indemnity Agreement would occur, and consequently, the Company has not recorded any indemnification liability associated with the October 2022 Indemnity Agreement. During the thirteen week period ended November 26, 2022, the company incurred additional fees of $1,937, which are included as a component of gain on sale of assets, net related to the sale of the 2021 CMS receivable to Bank of America. The additional fees were incurred due to a CMS delay in settling the 2021 receivable. As of November 26, 2022 and February 26, 2022 accounts receivable, net included $59,052 and $34,898 due from the Purchaser, subject to final CMS claim reconciliation adjustments, upon receipt of the final remittance for the respective calendar years from CMS. As of November 26, 2022, and February 26, 2022, accounts receivable, net included $221,684 and $63,203 due from CMS. The Inflation Reduction Act of 2022 contains several provisions affecting Medicare, which will take effect over various periods of time from 2023 to 2029. Based on the Company’s current analysis of the provisions, it does not believe that this legislation will have a material impact on the financial statements. |
Manufacturer Rebates Receivable
Manufacturer Rebates Receivables | 9 Months Ended |
Nov. 26, 2022 | |
Manufacturer Rebates Receivables | |
Manufacturer Rebates Receivables | 9. Manufacturer Rebates Receivables The Pharmacy Services Segment has manufacturer rebates receivables due directly from manufacturers and from our rebate aggregator of $520,652 and $535,620 included in accounts receivable, net of an allowance for uncollectible rebates of $8,474 and $18,796, as of November 26, 2022 and February 26, 2022, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Nov. 26, 2022 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 10. Goodwill and Other Intangible Assets The goodwill related to the Pharmacy Services segment is at risk of future impairment if the fair value of this segment, and its associated assets, decrease in value due to further declines in its operating results or an inability to execute management’s business strategies. Future cash flow estimates are, by their nature, subjective, and actual results may differ materially from the Company's estimates. If the Company's ongoing cash flow projections are not met or if market factors utilized in the impairment test deteriorate, including an unfavorable change in the terminal growth rate or the weighted-average cost of capital, the Company may have to record impairment charges in future periods. During the thirteen week period ended August 27, 2022, the Company recorded a goodwill impairment charge of $252,200. As of November 26, 2022 and February 26, 2022, accumulated impairment losses for the Pharmacy Services segment was $1,055,912 and $803,712, respectively. Below is a summary of the changes in the carrying amount of goodwill by segment for the thirty-nine week period ended November 26, 2022: Retail Pharmacy Pharmacy Services Total Balance, February 26, 2022 43,492 835,644 879,136 Goodwill impairment — (252,200) (252,200) Balance, November 26, 2022 $ 43,492 $ 583,444 $ 626,936 The Company’s intangible assets are primarily finite-lived and amortized over their useful lives. The following is a summary of the Company’s finite-lived and indefinite-lived intangible assets as of November 26, 2022 and February 26, 2022. November 26, 2022 February 26, 2022 Remaining Remaining Weighted Weighted Gross Average Gross Average Carrying Accumulated Amortization Carrying Accumulated Amortization Amount Amortization Net Period Amount Amortization Net Period Non-compete agreements and other (a) $ 201,669 $ (182,641) $ 19,028 3 years $ 197,651 $ (178,958) $ 18,693 3 years Prescription files 1,030,170 (926,017) 104,153 5 years 1,030,169 (918,773) 111,396 6 years Customer relationships (a) 388,000 (301,436) 86,564 9 years 388,000 (286,090) 101,910 10 years CMS license 57,500 (21,691) 35,809 4 years 57,500 (15,372) 42,128 5 years Claims adjudication and other developed software 58,985 (58,985) — 0 years 58,985 (56,316) 2,669 1 years Backlog 11,500 (11,500) — 0 years 11,500 (11,500) — 0 years Total finite $ 1,747,824 $ (1,502,270) 245,554 $ 1,743,805 $ (1,467,009) $ 276,796 Trademarks 14,400 — 14,400 Indefinite 14,400 — 14,400 Indefinite Total $ 1,762,224 $ (1,502,270) $ 259,954 $ 1,758,205 $ (1,467,009) $ 291,196 (a) Amortized on an accelerated basis which is determined based on the remaining useful economic lives of the customer relationships that are expected to contribute directly or indirectly to future cash flows. The Company is continuing to reposition its approach to the Elixir Insurance Part D business including an expectation of a purposeful shrinkage of the business. As a result, at the end of fiscal 2022, the Company adjusted the remaining amortization period of the CMS License to five years. Prior to such adjustment, the remaining life was nineteen years. Amortization expense for these intangible assets and liabilities was $17,622 and $56,668 for the thirteen and thirty-nine week periods ended November 26, 2022, respectively. Amortization expense for these intangible assets and liabilities was $18,780 and $59,193 for the thirteen and thirty-nine week periods ended November 27, 2021, respectively. The anticipated annual amortization expense for these intangible assets and liabilities is 2023—$72,374; 2024—$60,009; 2025—$48,764; 2026—$38,301 and 2027—$31,309. |
Indebtedness and Credit Agreeme
Indebtedness and Credit Agreement | 9 Months Ended |
Nov. 26, 2022 | |
Indebtedness and Credit Agreement | |
Indebtedness and Credit Agreement | 11. Indebtedness and Credit Agreement Following is a summary of indebtedness and lease financing obligations at November 26, 2022 and February 26, 2022: November 26, February 26, 2022 2022 Secured Debt: Senior secured revolving credit facility due August 2026 ($1,350,000 and $709,000 face value less unamortized debt issuance costs of $14,956 and $18,010) 1,335,044 690,990 FILO Term Loan due August 2026 ($350,000 face value less unamortized debt issuance costs of $1,946 and $2,344) 348,054 347,656 1,683,098 1,038,646 Second Lien Secured Debt: 7.5% senior secured notes due July 2025 ($485,058 and $600,000 face value less unamortized debt issuance costs of $4,278 and $6,824) 480,780 593,176 8.0% senior secured notes due November 2026 ($849,918 face value less unamortized debt issuance costs of $12,088 and $14,397) 837,830 835,521 1,318,610 1,428,697 Unguaranteed Unsecured Debt: 7.7% notes due February 2027 ($185,691 and $237,386 face value less unamortized debt issuance costs of $426 and $642) 185,265 236,744 6.875% fixed-rate senior notes due December 2028 ($2,046 and $29,001 face value less unamortized debt issuance costs of $6 and $102) 2,040 28,899 187,305 265,643 Lease financing obligations 19,077 20,374 Total debt 3,208,090 2,753,360 Current maturities of long-term debt and lease financing obligations (6,107) (5,544) Long-term debt and lease financing obligations, less current maturities $ 3,201,983 $ 2,747,816 Credit Facility On December 20, 2018, the Company entered into a senior secured credit agreement (as amended by the First Amendment to Credit Agreement, dated as of January 6, 2020, the “Credit Agreement”; and the Credit Agreement, as further amended by the Second Amendment (as defined below), the “Amended Credit Agreement”), which Credit Agreement provided for facilities consisting of a $2,700,000 senior secured asset-based revolving credit facility (“Initial Senior Secured Revolving Credit Facility”) and a $450,000 “first-in, last-out” senior secured term loan facility (“Initial Senior Secured Term Loan,” and together with the Initial Senior Secured Revolving Credit Facility, collectively, the “Initial Facilities”). In December 2018, the Company used proceeds from the Initial Facilities to refinance its prior $2,700,000 existing credit agreement. On August 20, 2021, the Company entered into the Second Amendment to Credit Agreement (the “Second Amendment”), which, among other things, amended the Credit Agreement to provide for a $2,800,000 senior secured asset-based revolving credit facility (“Senior Secured Revolving Credit Facility” or “revolver”) and a $350,000 “first-in, last-out” senior secured term loan facility (“Senior Secured Term Loan” or “Term Loan” and together with the Senior Secured Revolving Credit Facility, collectively, the “Amended Facilities”) and incorporate customary “hardwired” LIBOR transition provisions. The Amended Facilities extended the Company’s debt maturity profile and provided additional liquidity. Borrowings under the Senior Secured Revolving Credit Facility bore interest at a rate per annum equal to, at the Company’s option, a base rate (determined in a customary manner) plus a margin of between 0.25% to 0.75% or (y) an adjusted LIBOR rate (determined in a customary manner) plus a margin of between 1.25% and 1.75%, in each case based upon the Average ABL Availability (as defined in the Amended Credit Agreement). Borrowings under the Senior Secured Term Loan bore interest at a rate per annum equal to, at the Company’s option, (x) a base rate (determined in a customary manner) plus a margin of 1.75% or (y) an adjusted LIBOR rate (determined in a customary manner) plus a margin of 2.75%. The Company is required to pay fees between 0.250% and 0.375% per annum on the daily unused amount of the commitments under the Senior Secured Revolving Credit Facility, depending on Average ABL Availability (as defined in the Amended Credit Agreement). The Amended Facilities were scheduled to mature on August 20, 2026 (subject to a springing maturity if certain of the Company’s existing secured notes are not refinanced or repaid prior to the date that is 91 days prior to the stated maturity thereof). The Company’s borrowing capacity under the Senior Secured Revolving Credit Facility was based upon a specified borrowing base consisting of accounts receivable, inventory and prescription files. At November 26, 2022, the Company had $1,700,000 of borrowings outstanding under the Amended Facilities and had letters of credit outstanding under the Senior Secured Revolving Credit Facility in a face amount of $175,911, which resulted in remaining borrowing capacity under the Senior Secured Revolving Credit Facility of $1,274,089. If at any time the total credit exposure outstanding under the Senior Secured Revolving Credit Facility exceeded the borrowing base, the Company would be required to repay amounts outstanding to eliminate such shortfall. The Amended Credit Agreement restricted the Company and all of its subsidiaries that guaranteed its obligations under the Amended Facilities, the secured guaranteed notes and unsecured guaranteed notes (collectively, the “Subsidiary Guarantors”) from accumulating cash on hand in excess of $200,000 at any time when revolving loans were outstanding (not including cash located in store and lockbox deposit accounts and cash necessary to cover current liabilities). The Amended Credit Agreement also stated that if at any time (other than following the exercise of remedies or acceleration of any senior obligations or second priority debt and receipt of a triggering notice by the senior collateral agent from a representative of the senior obligations or the second priority debt) either (i) an event of default existed under the Amended Facilities or (ii) the sum of the Company’s borrowing capacity under the Senior Secured Revolving Credit Facility and certain amounts held on deposit with the senior collateral agent in a concentration account was less than or equal to $275,000 for three consecutive business days or less than or equal to $200,000 on any day (a “cash sweep period”), the funds in the Company’s deposit accounts would be swept to a concentration account with the senior collateral agent and would be applied first to repay outstanding revolving loans under the Amended Facilities, and then held as collateral for the senior obligations until such cash sweep period was rescinded pursuant to the terms of the Amended Facilities. With the exception of EI, substantially all of the Company’s 100% owned subsidiaries guaranteed the obligations under the Amended Facilities, the secured guaranteed notes and unsecured guaranteed notes. The Company’s obligations under the Amended Facilities and the Subsidiary Guarantors’ obligations under the related guarantees were secured by (i) a first-priority lien on all of the Subsidiary Guarantors’ cash and cash equivalents, accounts receivable, inventory, prescription files (including eligible script lists), intellectual property (prior to the repayment of the Senior Secured Term Loan) and certain other assets arising therefrom or related thereto (including substantially all of their deposit accounts, collectively, the “ABL priority collateral”) and (ii) a second-priority lien on all of the Subsidiary Guarantors’ equipment, fixtures, investment property (other than equity interests in subsidiaries), intellectual property (following the repayment of the Senior Secured Term Loan) and all other assets that did not constitute ABL priority collateral, in each case, subject to customary exceptions and limitations. The subsidiary guarantees related to the Company’s Amended Facilities, the secured guaranteed notes and, on an unsecured basis, the unsecured guaranteed notes, were full and unconditional and joint and several. The Company had no independent assets or operations. Other than EI, the subsidiaries, including joint ventures, that did not guarantee the Amended Facilities and applicable notes, were minor. The Amended Credit Agreement allowed the Company to have outstanding, at any time, up to an aggregate principal amount of $1,500,000 in secured second priority debt, split-priority debt, unsecured debt and disqualified preferred stock in addition to borrowings under the Amended Facilities and existing indebtedness, provided that not in excess of $750,000 of such secured second priority debt, split-priority debt, unsecured debt and disqualified preferred stock matured or required scheduled payments of principal prior to 90 days after the latest maturity date of any Term Loan or Other Revolving Commitment (each as defined in the Amended Credit Agreement) (excluding bridge facilities allowing extensions on customary terms to at least the date that was 90 days after such date). Subject to the limitations described in the immediately preceding sentence, the Amended Credit Agreement additionally allowed the Company to issue or incur an unlimited amount of unsecured debt and disqualified preferred stock so long as a Financial Covenant Effectiveness Period (as defined in the Amended Credit Agreement) was not in effect; provided, however, that certain of the Company’s other outstanding indebtedness limited the amount of unsecured debt that could be incurred if certain interest coverage levels were not met at the time of incurrence or other exemptions are not available. The Amended Credit Agreement also contained certain restrictions on the amount of secured first priority debt the Company was able to incur. The Amended Credit Agreement also allowed for the voluntary repurchase of any debt or other convertible debt, so long as the Amended Facilities were not in default and the Company maintained availability under its revolver of more than $365,000. The Amended Credit Agreement had a financial covenant that required the Company to maintain a minimum fixed charge coverage ratio of 1.00 to 1.00 (i) on any date on which availability under the Senior Secured Revolving Credit Facility was less than $200,000 or (ii) on the third consecutive business day on which availability under the Senior Secured Revolving Credit Facility was less than $250,000 and, in each case, ending on and excluding the first day thereafter, if any, which was the 30th consecutive calendar day on which availability under the revolver was equal to or greater than $250,000. As of November 26, 2022, the availability under the Senior Secured Revolving Credit Facility was at a level that did not trigger the Amended Credit Agreement’s financial covenant. The Amended Credit Agreement also contained covenants which placed restrictions on the incurrence of debt, the payments of dividends, the making of investments, sale of assets, mergers and acquisitions and the granting of liens. The Amended Credit Agreement provided for customary events of default including nonpayment, misrepresentation, breach of covenants and bankruptcy. It would also be an event of default if the Company failed to make any required payment on debt having a principal amount in excess of $50,000 or any event occurred that enabled, or which with the giving of notice or the lapse of time would enable, the holder of such debt to accelerate the maturity or require the repayment, repurchase, redemption or defeasance of such debt. On December 1, 2022, the Company entered into the Third Amendment to Credit Agreement (the “Third Amendment”), which, among other things, amended the Amended Credit Agreement (the Amended Credit Agreement, as modified by the Third Amendment, the “Currently Effective Credit Agreement”) to provide for a $2,850,000 senior secured asset-based revolving credit facility (the “Currently Effective Senior Secured Revolving Credit Facility”) and a $400,000 “first-in, last-out” senior secured term loan facility (the “Currently Effective Senior Secured Term Loan” and, together with the Currently Effective Senior Secured Revolving Credit Facility, collectively, the “Currently Effective Facilities”), replaced the LIBOR rate with a Term SOFR-based rate as the applicable benchmark for the Currently Effective Facilities, include COVID-19 vaccines in the borrowing base under the Currently Effective Senior Secured Revolving Credit Facility, subject to limitations and conditions as specified in the Currently Effective Credit Agreement, and increased the interest rate applicable to loans under the Currently Effective Senior Secured Term Loan to (x) a base rate (determined in a customary manner) plus a margin of 2.00% or (y) an adjusted Term SOFR-based rate (determined in a customary manner) plus a margin of 3.00%. The Company is required to pay fees between 0.250% and 0.375% per annum on the daily unused amount of the commitments under the Currently Effective Senior Secured Revolving Credit Facility, depending on Average ABL Availability (as defined in the Currently Effective Credit Agreement). The Currently Effective Facilities are scheduled to mature on August 20, 2026 (subject to a springing maturity if certain of the Company’s existing secured notes are not refinanced or repaid prior to the date that is 91 days prior to the stated maturity thereof). The Company’s borrowing capacity under the Currently Effective Senior Secured Revolving Credit Facility is based upon a specified borrowing base consisting of accounts receivable, inventory and prescription files. If at any time the total credit exposure outstanding under the Currently Effective Senior Secured Revolving Credit Facility exceeds the borrowing base, the Company will be required to repay amounts outstanding to eliminate such shortfall. The Currently Effective Credit Agreement restricts the Company and all of its subsidiaries that guarantee its obligations under the Currently Effective Facilities, the secured guaranteed notes and unsecured guaranteed notes (collectively, the “Subsidiary Guarantors”) from accumulating cash on hand in excess of $200,000 at any time when revolving loans are outstanding (not including cash located in store and lockbox deposit accounts and cash necessary to cover current liabilities). The Currently Effective Credit Agreement also states that if at any time (other than following the exercise of remedies or acceleration of any senior obligations or second priority debt and receipt of a triggering notice by the senior collateral agent from a representative of the senior obligations or the second priority debt) either (i) an event of default exists under the Currently Effective Facilities or (ii) the sum of the Company’s borrowing capacity under the Currently Effective Senior Secured Revolving Credit Facility and certain amounts held on deposit with the senior collateral agent in a concentration account is less than or equal to $283,250 for three consecutive business days or less than or equal to $206,000 on any day (a “cash sweep period”), the funds in the Company’s deposit accounts will be swept to a concentration account with the senior collateral agent and will be applied first to repay outstanding revolving loans under the Currently Effective Facilities, and then held as collateral for the senior obligations until such cash sweep period is rescinded pursuant to the terms of the Currently Effective Facilities. With the exception of EI, substantially all of the Company’s 100% owned subsidiaries guarantee the obligations under the Currently Effective Facilities, the secured guaranteed notes and unsecured guaranteed notes. The Company’s obligations under the Currently Effective Facilities and the Subsidiary Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on all of the Subsidiary Guarantors’ cash and cash equivalents, accounts receivable, inventory, prescription files (including eligible script lists), intellectual property (prior to the repayment of the Currently Effective Senior Secured Term Loan) and certain other assets arising therefrom or related thereto (including substantially all of their deposit accounts, collectively, the “ABL priority collateral”) and (ii) a second-priority lien on all of the Subsidiary Guarantors’ equipment, fixtures, investment property (other than equity interests in subsidiaries), intellectual property (following the repayment of the Currently Effective Senior Secured Term Loan) and all other assets that do not constitute ABL priority collateral, in each case, subject to customary exceptions and limitations. The subsidiary guarantees related to the Company’s Currently Effective Facilities, the secured guaranteed notes and, on an unsecured basis, the unsecured guaranteed notes, are full and unconditional and joint and several. The Company has no independent assets or operations. Other than EI, the subsidiaries, including joint ventures, that do not guarantee the Currently Effective Facilities and applicable notes, are minor. The Currently Effective Credit Agreement allows the Company to have outstanding, at any time, up to an aggregate principal amount of $1,500,000 in secured second priority debt, split-priority debt, unsecured debt and disqualified preferred stock in addition to borrowings under the Currently Effective Facilities and existing indebtedness, provided that not in excess of $750,000 of such secured second priority debt, split-priority debt, unsecured debt and disqualified preferred stock shall mature or require scheduled payments of principal prior to 90 days The Currently Effective Credit Agreement has a financial covenant that requires the Company to maintain a minimum fixed charge coverage ratio of 1.00 to 1.00 (i) on any date on which availability under the Currently Effective Senior Secured Revolving Credit Facility is less than $206,000 or (ii) on the third consecutive business day on which availability under the Currently Effective Senior Secured Revolving Credit Facility is less than $257,500 and, in each case, ending on and excluding the first day thereafter, if any, which is the 30th consecutive calendar day on which availability under the revolver is equal to or greater than $257,500. The Currently Effective Credit Agreement also contains covenants which place restrictions on the incurrence of debt, the payments of dividends, the making of investments, sale of assets, mergers and acquisitions and the granting of liens. The Currently Effective Credit Agreement provides for customary events of default including nonpayment, misrepresentation, breach of covenants and bankruptcy. It is also an event of default if the Company fails to make any required payment on debt having a principal amount in excess of $50,000 or any event occurs that enables, or which with the giving of notice or the lapse of time would enable, the holder of such debt to accelerate the maturity or require the repayment, repurchase, redemption or defeasance of such debt. Fiscal 2022 and 2023 Transactions On April 28, 2021, the Company issued a notice of redemption for all of the 6.125% Notes that were outstanding on May 28, 2021, pursuant to the terms of the indenture of the 6.125% Notes. On May 28, 2021, the Company redeemed 100% of the remaining outstanding 6.125% Notes at par. In connection therewith, the Company recorded a loss on debt retirement of $396 which included unamortized debt issuance costs. The debt repayment and related loss on debt retirement is included in the results of operations and cash flows. On August 20, 2021, the Company entered into the Second Amendment in order to, among other things, increase the aggregate principal amount of commitments under the Senior Secured Revolving Credit Facility from $2,700,000 to $2,800,000 and decrease the aggregate principal amount of loans outstanding under the Senior Secured Term Loan from $450,000 to $350,000. In connection therewith, the Company recorded a loss on debt modification and retirement of $2,839 which included unamortized debt issuance costs. The debt repayment and related loss on debt modification and retirement is included in the results of operations and cash flows. On June 13, 2022, the Company commenced a series of cash tender offers to purchase up to $150,000 aggregate principal amount of the Company’s 7.50% Senior Secured Notes due 2025 (the “2025 Notes”), 8.0% Senior Secured Notes due 2026, 7.70% Notes due 2027 (the “2027 Notes”) and 6.875% Notes due 2028 (the “2028 Notes”), subject to prioritized acceptance levels, a subcap of $100,000 with respect to the 2025 Notes and proration. On June 29, 2022, pursuant to an early settlement, the Company purchased an aggregate principal amount of $114,942 of its 2025 Notes, $51,695 aggregate principal amount of its 2027 Notes and $26,955 aggregate principal amount of its 2028 Notes. In connection therewith, the Company recorded a gain on debt retirement of $41,312, which included unamortized debt issuance costs. The debt repayment and related gain on debt retirement is included in the results of operations and cash flows. On November 3, 2022, the Company announced the commencement of a cash tender offer to purchase up to $200,000 aggregate purchase price (not including any accrued and unpaid interest) of the Company’s 2025 Notes, subject to proration. On November 30, 2022, pursuant to an early settlement, the Company purchased an aggregate principal amount of $ 160,497 and on December 9, 2022, the Company purchased an additional aggregate principal amount of $4,559 of its 2025 Notes. On December 1, 2022, the Company entered into the Third Amendment in order to, among other things, increase the aggregate principal amount of commitments under the Senior Secured Revolving Credit Facility from $2,800,000 to $2,850,000 and increase the aggregate principal amount of loans outstanding under the Senior Secured Term Loan from $350,000 to $400,000. As a result of the Third Amendment, the Company has increased its liquidity by $100,000. In connection therewith, the Company anticipates a loss on debt modification and retirement of less than $1,000, which includes unamortized debt issuance costs. The related loss on debt modification and retirement will be included in the results of operations and cash flows during the fourth quarter of fiscal 2023. Maturities The aggregate annual principal payments of long-term debt for the remainder of fiscal 2023 and thereafter are as follows: 2023—$0; 2024—$0; 2025—$0; 2026—$485,058; 2027—$2,735,609 and $2,046 thereafter. |
Leases
Leases | 9 Months Ended |
Nov. 26, 2022 | |
Leases | |
Leases | 12. Leases The Company leases most of its retail stores and certain distribution facilities under noncancelable operating The following table is a summary of the Company’s components of net lease cost for the thirteen and thirty-nine week periods Thirteen Week Period Ended Thirty-Nine Week Period Ended November 26, 2022 November 27, 2021 November 26, 2022 November 27, 2021 Operating lease cost $ 156,779 $ 167,224 $ 474,580 $ 505,192 Financing lease cost: Amortization of right-of-use asset 894 876 2,566 2,807 Interest on long-term finance lease liabilities 477 533 1,481 1,652 Total finance lease costs $ 1,371 $ 1,409 $ 4,047 $ 4,459 Short-term lease costs 1,218 516 2,260 2,611 Variable lease costs 43,761 44,417 130,058 134,603 Less: sublease income (3,098) (3,404) (9,714) (10,174) Net lease cost $ 200,031 $ 210,162 $ 601,231 $ 636,691 Supplemental cash flow information related to leases for the thirty-nine week periods ended November 26, 2022 and November 27, 2021: Thirty-Nine Week Period Ended November 26, 2022 November 27, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows paid for operating leases $ 524,417 $ 528,035 Operating cash flows paid for interest portion of finance leases 1,481 1,652 Financing cash flows paid for principal portion of finance leases 2,968 3,146 Right-of-use assets obtained in exchange for lease obligations: Operating leases 217,515 262,937 Finance leases — — Supplemental balance sheet information related to leases as of November 26, 2022 and February 26, 2022 (in thousands, except lease term and discount rate): November 26, February 26, 2022 2022 Operating leases: Operating lease right-of-use asset $ 2,622,969 $ 2,813,535 Short-term operating lease liabilities $ 563,490 $ 575,651 Long-term operating lease liabilities 2,427,836 2,597,090 Total operating lease liabilities $ 2,991,326 $ 3,172,741 Finance leases: Property, plant and equipment, net $ 13,560 $ 13,950 Current maturities of long-term debt and lease financing obligations $ 6,107 $ 5,544 Lease financing obligations, less current maturities 12,970 14,830 Total finance lease liabilities $ 19,077 $ 20,374 Weighted average remaining lease term Operating leases 7.5 7.7 Finance leases 8.3 8.7 Weighted average discount rate Operating leases 6.3 % 6.0 % Finance leases 9.1 % 10.0 % The following table summarizes the maturity of lease liabilities under finance and operating leases as of November 26, 2022: November 26, 2022 Finance Operating Fiscal year Leases Leases (1) Total 2023 (remaining fourteen weeks) $ 4,343 $ 230,437 $ 234,780 2024 6,394 668,106 674,500 2025 2,672 582,738 585,410 2026 1,680 494,887 496,567 2027 1,500 413,327 414,827 Thereafter 11,297 1,449,088 1,460,385 Total lease payments 27,886 3,838,583 3,866,469 Less: imputed interest (8,809) (847,257) (856,066) Total lease liabilities $ 19,077 $ 2,991,326 $ 3,010,403 (1) – Future operating lease payments have not been reduced by minimum sublease rentals of $26 million due in the future under noncancelable leases. During the thirteen week the Company During the thirty-nine week the Company During the thirteen and thirty-nine week Company sold nine and thirteen owned and operated stores to independent third parties. Net proceeds from the sales were $25,605 and $39,790 for the thirteen and thirty-nine week periods ended November 27, 2021, respectively. Concurrent with these sales, the Company entered into agreements to lease the properties back from the purchasers over a minimum lease term of 15 years . The Company accounted for these leases as operating lease right-of-use assets and corresponding operating lease liabilities in accordance with the Lease Standard. The transactions resulted in gains of $4,884 and $5,794 which is included in the gain on sale of assets, net for the thirteen and thirty-nine week periods ended November 27, 2021, respectively. The Company has additional capacity under its outstanding debt agreements to enter into additional sale-leaseback transactions. |
Stock Options and Stock Awards
Stock Options and Stock Awards | 9 Months Ended |
Nov. 26, 2022 | |
Stock Options and Stock Awards | |
Stock Options and Stock Awards | 13. Stock Options and Stock Awards The Company recognizes stock-based compensation expense over the requisite service period of the award, net of an estimate for the impact of forfeitures. Operating results for the thirty-nine week periods ended November 26, 2022 and November 27, 2021 include $8,635 and $8,820 , respectively, of compensation costs related to the Company’s stock-based compensation arrangements. The total number and type of newly awarded grants and the related weighted average fair value for the thirty-nine week periods ended November 26, 2022 and November 27, 2021 are as follows: November 26, 2022 November 27, 2021 Shares Weighted Average Fair Value Shares Weighted Average Fair Value Stock options granted — $ N/A — $ N/A Restricted stock awards granted 1,202 $ 7.74 904 $ 15.15 Total awards 1,202 904 Typically, stock options vest, and are subsequently exercisable in equal annual installments over a four- year period for employees. Restricted stock awards typically vest in equal annual installments over a three-year period. The Company calculates the fair value of stock options using the Black-Scholes-Merton option pricing model. The Company also provides certain of its associates with performance based incentive awards under its equity incentive plans, pursuant to which the associates will receive a certain number of shares of the Company’s common stock based on the Company meeting certain financial and performance goals. If such goals are not met, no stock-based compensation expense is recognized and any recognized stock-based compensation expense is reversed. During the thirty-nine week periods ended November 26, 2022 and November 27, 2021, the Company recorded a benefit of $771 and expense of $573 , respectively, related to these performance based incentive awards under the Company’s equity incentive plans, which is recorded as a component of stock-based compensation expense. As of November 26, 2022, the total unrecognized pre-tax compensation costs related to unvested stock options, restricted stock and performance shares granted, net of forfeitures, and the weighted average period of cost amortization are as follows: November 26, 2022 Unvested Unvested Unvested stock restricted performance options stock shares Unrecognized pre-tax costs $ 297 $ 14,664 $ 6,732 Weighted average amortization period 0.7 years 2.0 years 1.9 years |
Retirement Plans
Retirement Plans | 9 Months Ended |
Nov. 26, 2022 | |
Retirement Plans | |
Retirement Plans | 14. Retirement Plans Net periodic pension expense (income) for the thirteen and thirty-nine November 27, 2021 Defined Benefit Defined Benefit Pension Plan Pension Plan Thirteen Week Period Ended Thirty-Nine Week Period Ended November 26, November 27, November 26, November 27, 2022 2021 2022 2021 Service cost $ 141 $ 128 $ 355 $ 384 Interest cost 2,028 1,232 4,555 3,696 Expected return on plan assets (2,113) (1,313) (4,917) (3,939) Amortization of unrecognized net loss — 123 — 369 Net periodic pension expense (income) $ 56 $ 170 $ (7) $ 510 The Company is not required to make any contributions to its company-sponsored pension plans in fiscal 2023 but may make contributions to the extent such contributions are beneficial to the Company. The Company did not make any contributions to its company-sponsored pension plans in the first three quarters of fiscal 2023. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Nov. 26, 2022 | |
Segment Reporting | |
Segment Reporting | 15. Segment Reporting The Company has two reportable segments, its retail drug stores (“Retail Pharmacy”), and its pharmacy services (“Pharmacy Services”) segments. The Retail Pharmacy segment’s primary business is the sale of prescription drugs and related consultation to its customers. Additionally, the Retail Pharmacy segment sells a full selection of health and beauty aids and personal care products, seasonal merchandise and a large private brand product line. The Pharmacy Services segment offers a full range of pharmacy benefit management services including plan design and administration, formulary management and claims processing. Additionally, the Pharmacy Services segment offers specialty and mail order services, and drug benefits to eligible beneficiaries under the federal government’s Medicare Part D program. The Company’s chief operating decision makers are its Chief Executive Officer, Chief Financial Officer and several other members of the Executive Leadership Team, (collectively the “CODM”). The CODM has ultimate responsibility for enterprise decisions. The CODM determines, in particular, resource allocation for, and monitors performance of, the consolidated enterprise, the Retail Pharmacy segment and the Pharmacy Services segment. The Retail Pharmacy and Pharmacy Services segment managers have responsibility for operating decisions, allocating resources and assessing performance within their respective segments. The CODM relies on internal management reporting that analyzes enterprise results on certain key performance indicators, namely, revenues, gross profit, and Adjusted EBITDA. The following is balance sheet information for the Company’s reportable segments: Retail Pharmacy Pharmacy Services Eliminations (1) Consolidated November 26, 2022: Total Assets $ 5,962,934 $ 2,261,550 $ (14,710) $ 8,209,774 Goodwill 43,492 583,444 — 626,936 February 26, 2022: Total Assets $ 6,068,594 $ 2,482,232 $ (21,823) $ 8,529,003 Goodwill 43,492 835,644 — 879,136 (1) As of November 26, 2022 and February 26, 2022, intersegment eliminations include intersegment accounts receivable of $14,710 and $21,823 , respectively, that represents amounts owed from the Pharmacy Services segment to the Retail Pharmacy segment that are created when Pharmacy Services segment customers use Retail Pharmacy segment stores to purchase covered products. The following table is a reconciliation of the Company’s business segments to the consolidated financial statements for the thirteen and thirty-nine week periods ended November 26, 2022 and November 27, 2021 Retail Pharmacy Intersegment Pharmacy Services Eliminations (1) Consolidated Thirteen Week Period Ended November 26, 2022: Revenues $ 4,412,232 $ 1,726,933 $ (55,819) $ 6,083,346 Gross Profit 1,099,279 104,473 — 1,203,752 Adjusted EBITDA (2) 81,683 40,233 — 121,916 Additions to property and equipment and intangible assets 54,448 5,453 — 59,901 November 27, 2021: Revenues $ 4,432,508 $ 1,858,830 $ (62,458) $ 6,228,880 Gross Profit 1,233,237 101,146 — 1,334,383 Adjusted EBITDA (2) 125,931 28,862 — 154,793 Additions to property and equipment and intangible assets 44,501 4,954 — 49,455 Thirty-Nine Week Period Ended November 26, 2022: Revenues $ 12,989,379 $ 5,180,031 $ (170,413) $ 17,998,997 Gross Profit 3,239,672 315,304 — 3,554,976 Adjusted EBITDA (2) 186,849 113,746 — 300,595 Additions to property and equipment and intangible assets 179,342 18,158 — 197,500 November 27, 2021: Revenues $ 13,061,408 $ 5,629,325 $ (187,868) $ 18,502,865 Gross Profit 3,543,533 321,649 — 3,865,182 Adjusted EBITDA (2) 290,214 109,616 — 399,830 Additions to property and equipment and intangible assets 155,942 13,348 — 169,290 (1) Intersegment eliminations include intersegment revenues and corresponding cost of revenues that occur when Pharmacy Services segment customers use Retail Pharmacy segment stores to purchase covered products. When this occurs, both the Retail Pharmacy and Pharmacy Services segments record the revenue on a stand-alone basis. (2) See “Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Other Non-GAAP Measures” in Management’s Discussion and Analysis of Financial Condition and Results for additional details. The following is a reconciliation of net loss to Adjusted EBITDA for the thirteen and thirty-nine November 27, 2021 November 26, November 27, November 26, November 27, 2022 2021 2022 2021 (13 weeks) (13 weeks) (39 weeks) (39 weeks) Net loss $ (67,144) $ (36,058) $ (508,625) $ (149,416) Interest expense 57,416 47,794 158,068 145,507 Income tax (benefit) expense (510) (1,175) 14,954 2,915 Depreciation and amortization 69,496 72,973 208,133 222,691 LIFO charge 15,246 8,886 25,367 900 Facility exit and impairment charges 22,539 47,455 134,955 67,639 Goodwill and intangible asset impairment charges — — 252,200 — (Gain) loss on debt modifications and retirements, net — — (41,312) 3,235 Merger and Acquisition-related costs — 3,642 — 12,119 Stock-based compensation expense 566 217 8,635 8,820 Restructuring-related costs 26,500 9,657 61,951 25,173 Inventory write-downs related to store closings 3,085 86 12,134 1,356 Litigation and other contractual settlements (2,541) 2,000 35,823 50,212 Gain on sale of assets, net (3,095) (5,899) (61,292) (79) Loss on Bartell acquisition — 5,346 — 5,346 Other 358 (131) (396) 3,412 Adjusted EBITDA $ 121,916 $ 154,793 $ 300,595 $ 399,830 |
Commitments, Contingencies and
Commitments, Contingencies and Guarantees | 9 Months Ended |
Nov. 26, 2022 | |
Commitments, Contingencies and Guarantees | |
Commitments, Contingencies and Guarantees | 16. Commitments, Contingencies and Guarantees Legal Matters and Regulatory Proceedings The Company is regularly involved in a variety of legal matters including arbitration, litigation (and related settlement discussions), audits by counter parties under our contracts, and other claims, and is subject to regulatory proceedings including audits, inspections, inquiries, investigations, and similar actions by health care, insurance, pharmacy, tax and other governmental authorities arising in the ordinary course of its business, including, without limitation, the matters described below. Substantial damages are sought from the Company in virtually all of these matters. The Company records accruals for outstanding legal matters and applicable regulatory proceedings when it believes it is probable that a loss has been incurred, and the amount can be reasonably estimated. The Company evaluates on a quarterly basis, developments in legal matters and regulatory proceedings that could affect the amount of any existing accrual or that warrant an accrual. If a loss contingency is not both probable and estimable, the Company typically does not establish an accrued liability. With respect to the litigation and other legal proceedings described below, the Company is unable to estimate the amount or range of reasonably possible loss due to the inherent difficulty of predicting the outcome of and uncertainties regarding such litigation and legal proceedings. None of the Company’s accruals for outstanding legal matters or regulatory proceedings are currently material, individually or in the aggregate, to the Company’s consolidated financial position. However, during the course of any proceeding, developments may result in the creation or an increase of an accrual that could be material. Additionally, unfavorable or unexpected outcomes in outstanding legal matters or regulatory proceedings could exceed any accrual and impact the Company’s financial position. Further, even if the Company is successful in its legal proceedings, the Company may incur significant costs and expenses defending itself or others that it is required to indemnify, and such costs and expenses may not be subject to or may exceed reimbursement pursuant to any applicable insurance. The Company’s contingencies are subject to significant uncertainties, many of which are beyond the Company’s control, including, among other factors: (i) the stage of any proceeding and delays in scheduling; (ii) whether class or collective action status is sought and the likelihood of a class being certified; (iii) the outcome of pending or potential appeals, motions and settlement discussions; (iv) the range and magnitude of potential damages, fines or penalties, which are often unspecified or indeterminate; (v) the impact of discovery on the matter; (vi) whether novel or unsettled legal theories are at issue or advanced; (vii) whether there are significant factual issues to be resolved including findings made by juries; (viii) the exercise of discretion in enforcement actions including in the case of certain government agency investigations, whether a qui tam Employment Litigation. The Company is currently a defendant in several lawsuits filed in courts in California that contain allegations regarding violations of the California Business and Professions Code, various California employment laws and regulations, industry wage orders, wage-and-hour laws, rules and regulations pertaining primarily to failure to pay overtime, failure to pay premiums for missed meals and rest periods, failure to provide accurate wage statements, and failure to reimburse business expenses (the “California Cases”). Some of the California Cases purport or may be determined to be class actions or representative actions under the California Private Attorneys General Act and seek substantial damages and penalties. In June 2021, the Company agreed to settle two of the California Cases in which the plaintiffs brought class-based claims alleging that they and all other similarly situated associates were not paid for time waiting for their bags to be checked. One set of cases involving store associates was settled for $9 million, the other involving distribution center associates was settled for $1.75 million, and both have concluded. On October 1, 2021, the Company agreed to settle for $12 million allegations made by a purported class of California store associates that it required such associates to purchase uniforms, and the matter has concluded. In August 2022, the Company agreed to settle a putative class action regarding reimbursement for cell phone and mileage expenses for shift supervisors and managers/assistant managers for $1.29 million, and a putative wage and hour class action brought on behalf of drivers and other ice cream plant associates for $0.8 million. The Company has also reached an agreement in principle to resolve a putative employment collective and class action filed in federal court in New York, which raises similar allegations in addition to others about the payment frequency for certain employees (the “New York Case”). In December 2022, the parties reached an agreement in principle to resolve the individual plaintiff’s claims as well as those of the class, resulting in the federal court issuing an order of judgment and a new matter filed in New York state court, which the parties have agreed to resolve for The Company has aggressively defended itself and challenged the merits of the lawsuits and, where applicable, allegations that the lawsuits should be certified as class or representative actions. Usual and Customary Litigation. The Company is named as a defendant in a number of lawsuits, including the cases below, that allege that the Company’s retail stores overcharged for prescription drugs by not submitting the price available to members of the Rite Aid’s Rx Savings Program as the pharmacy’s usual and customary price, and related theories. The Company has aggressively defended against the allegations of these matters and continues to challenge their merit. The Company is a defendant in a putative consumer class action lawsuit in the United States District Court for the Southern District of California captioned Byron Stafford v. Rite Aid Corp Robert Josten v. Rite Aid Corp On February 6, 2019, Humana, Inc., filed a claim pursuant to a binding arbitration provision of the parties’ agreement alleging that the Company improperly submitted various usual and customary overcharges by failing to report its Rx Savings Program prices as its usual and customary prices to Humana. An arbitration hearing was held in this matter in November 2021. On April 22, 2022, the arbitrator issued an Opinion and Final Award against the Company for breach of contract awarding Humana $122.6 million, which includes $40.7 million in prejudgment interest (the “Arbitration Award”). The Company believes that the Arbitration Award contains a number of significant factual and legal errors. On June 20, 2022, the Company both opposed Humana’s effort to confirm the Arbitration Award and petitioned the United States District Court for Western District of Kentucky for vacatur of the Arbitration Award, as is its right under the Federal Arbitration Act (“FAA”). As such, the Company has determined that it is not probable that a loss has occurred. The FAA, as interpreted and applied by federal courts, permits vacatur when, among other things, an arbitrator’s decision: (1) is irreconcilable with the terms of a contract between the parties; (2) rests on a plain legal error that manifests disregard for the law; or (3) incorporates a refusal to consider pertinent, material evidence. Similarly, the FAA, as interpreted and applied by federal courts, permits modification of an arbitrator’s decision to correct an evident material miscalculation of figures. Although the Company cannot make any assurances of success in its efforts, it is the Company’s view that the errors in the Arbitration Award support both vacatur and modification under the FAA, the effect of either of which could be to set aside the Arbitration Award or reduce or eliminate the damages provided for in the Arbitration Award. Humana filed a petition in the District Court for the Western District of Kentucky to confirm the Arbitration Award and Rite Aid filed a motion for vacatur of the Arbitration Award on June 20, 2022. Briefing was completed on these matters on August 19, 2022. Rite Aid has requested a hearing on the matter. The Company is a defendant in two consolidated lawsuits pending in the United States District Court for the District of Minnesota filed in 2020 by various Blue Cross/Blue Shield plans that operate in eight different states (North Carolina, North Dakota, Alabama, Utah, Minnesota, Oregon, Washington and New Jersey) alleging that the Company improperly submitted various usual and customary overcharges by failing to report its Rx Savings Program pricing to several Pharmacy Benefit Managers with which Rite Aid and the insurers had independent contracts. The Company is also defending a lawsuit filed in Delaware state court in 2019 by multiple Centene entities alleging that the Company overcharged for prescriptions by improperly reporting usual and customary prices that did not include Rx Savings Program pricing. The Company is defending a similar lawsuit filed in 2022 by WellCare in Florida state court. Drug Utilization Review and Code 1 Litigation In June 2012, qui tam On September 5, 2018, the court issued an order denying the motion to dismiss. Substantial damages are sought from the Company in this matter. The Company has aggressively defended against the allegations of the lawsuit and continues to challenge their merit. No trial date has been set and as discovery continues, the parties have participated in and are expected to continue to participate in a mediation process. Controlled Substances Litigation, Audits and Investigations The Company, along with various other defendants, is named in multiple opioid-related lawsuits filed by counties, cities, municipalities, Native American tribes, hospitals, third-party payers, and others across the United States. In December 2017, the U.S. Judicial Panel on Multidistrict Litigation (“JPML”) consolidated and transferred more than a thousand federal opioid-related lawsuits that name the Company as a defendant to the multi-district litigation (“MDL”) pending in the United States District Court for the Northern District of Ohio under In re National Prescription Opiate Litigation The Company also has received warrants, subpoenas, CIDs, and other requests for documents and information from, and is being investigated by, the federal and state governments regarding opioids and other controlled substances. The Company has been cooperating with and responding to these investigatory inquiries. On December 13, 2022, a qui tam complaint filed by three former Rite Aid pharmacy personnel (Andrew White, Mark Rosenberg, and Ann Wegelin) (“ qui tam qui tam qui tam Relators in January 2020 and further amended under seal in January 2021. The Complaint alleges violations of federal and state false claims acts related to the dispensing of controlled substances, namely opioids, and that Rite Aid failed to implement effective controls to prevent the filling or inappropriate prescriptions of opioids, or to otherwise detect diversion and abuse of controlled substances. The Complaint seeks injunctive relief ordering Rite Aid to cease and desist from the complained-of practices, and further seeks both damages and civil penalties under federal and state statues for each allegedly false claim arising in relation to Medicaid, Medicare, Federal employee plans and Tricare, among other government programs. In April 2019, the Company initiated a coverage action styled Rite Aid Corporation et al. v. ACE American Ins. Co. et al suits set for trial based on the specific allegations at issue in those cases. The matter has been remanded to the lower court for further proceedings. Miscellaneous Litigation and Investigations. In March 2022, the Company became aware that the U.S. Securities and Exchange Commission (“SEC”) had concluded its investigation of trading in the Company’s securities that occurred in or around January 2017. The Company cooperated in the investigation and was not alleged to have violated the federal securities laws or otherwise engaged in wrongdoing. The Company has received a CID and requests for information from the Federal Trade Commission with respect to consumer protection laws and CIDs from the Department of Justice related to the Medicare Part D plan sponsored by a subsidiary of the Company. The Company is also aggressively defending a lawsuit asserting numerous claims based on allegations, the merits of which the Company challenges, surrounding the Company’s use of a certain font including in the Company’s rebranded logo. The Company is defending a putative shareholder class action currently captioned Page v. Rite Aid Corporation et al. . The matter names Rite Aid Corporation and certain executives individually as defendants and raises claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 related to alleged misstatements and omissions concerning the growth of |
Supplementary Cash Flow Data
Supplementary Cash Flow Data | 9 Months Ended |
Nov. 26, 2022 | |
Supplementary Cash Flow Data | |
Supplementary Cash Flow Data | 17. Supplementary Cash Flow Data Thirty-Nine Week Period Ended November 26, 2022 November 27, 2021 Cash paid for interest $ 118,842 $ 102,633 Cash (refunds) payments for income taxes, net $ (6,805) $ 3,521 Equipment financed under capital leases $ 2,383 $ 1,698 Gross borrowings from revolver $ 2,597,000 $ 4,191,000 Gross repayments to revolver $ 1,956,000 $ 3,891,000 Significant components of cash provided by Other Liabilities of $9,537 for the thirty-nine |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Nov. 26, 2022 | |
Basis of Presentation and Significant Accounting Policies | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X, and therefore do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete annual financial statements. The accompanying financial information reflects all adjustments which are of a recurring nature and, in the opinion of management, are necessary for a fair presentation of the results for the interim periods. The results of operations for the thirteen and thirty-nine week periods ended November 26, 2022 are not necessarily indicative of the results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Rite Aid Corporation (“Rite Aid”) and Subsidiaries (together with Rite Aid, the “Company”) Fiscal 2022 10-K. |
Revenue Recognition | Revenue Recognition The following table disaggregates the Company’s revenue by major source in each segment for the thirteen and thirty-nine week periods ended November 26, 2022 and November 27, 2021: November 26, November 27, November 26, November 27, 2022 2021 2022 2021 In thousands (13 weeks) (13 weeks) (39 weeks) (39 weeks) Retail Pharmacy segment: Pharmacy sales $ 3,155,646 $ 3,132,821 $ 9,180,331 $ 9,069,520 Front-end sales 1,229,547 1,272,342 3,722,343 3,901,285 Other revenue 27,039 27,345 86,705 90,603 Total Retail Pharmacy segment 4,412,232 4,432,508 12,989,379 13,061,408 Pharmacy Services segment 1,726,933 1,858,830 5,180,031 5,629,325 Intersegment elimination (55,819) (62,458) (170,413) (187,868) Total revenue $ 6,083,346 $ 6,228,880 $ 17,998,997 $ 18,502,865 The Retail Pharmacy segment offered a chain-wide loyalty card program titled wellness+. Individual customers were able to become members of the wellness+ program. Members participating in the wellness+ loyalty card program earned points on a calendar year basis for eligible front-end merchandise purchases and qualifying prescription purchases. The wellness+ program was terminated as of July 1, 2020, with benefits earned as of that date available to be used through the end of calendar year 2020. Beginning in December 2020, the Company granted temporary extensions of benefits to certain previous members that were eligible for a discount as of the end of each previous six month period such that those prior members were eligible to continue to receive that discount on purchases made through the subsequent six months with no additional purchase requirement. New and existing customers who were not already eligible for program benefits also had the opportunity to earn additional discounts on purchases made through each six month period. A final extension was granted on December 31, 2021 through February 26, 2022 at which point all discounts were terminated. A new loyalty program, Rite Aid Rewards, was initiated on February 27, 2022. Customers that enroll in the new program earn points for each dollar spent on front of store purchases as well as for eligible pharmacy prescriptions. Points can then be converted into a “Rite Aid Rewards” coupon that can be tendered as payment in a future purchase. Each point is worth $0.002. Customers must accumulate 1,000 points and create an online account in order to convert earned points to a “Rite Aid Rewards” coupon. Unused/unconverted points expire after 90 days. Unredeemed “Rite Aid Rewards” coupons expire 30 days after conversion from points earned. Points earned pursuant to the Rite Aid Rewards program represent a performance obligation. The value of unredeemed Rite Aid Rewards points is deferred as a contract liability (included in other current liabilities). As members redeem points in the form of a Rite Aid Rewards coupon or when points or unredeemed Rite Aid Rewards coupons expire, the Retail Pharmacy segment recognizes the redeemed/expired portion of the deferred contract liability into revenue. The Retail Pharmacy segment had accrued contract liabilities of $1,157 and $0 as of November 26, 2022 and February 26, 2022, respectively. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 9 Months Ended |
Nov. 26, 2022 | |
Basis of Presentation and Significant Accounting Policies | |
Schedule of revenues | November 26, November 27, November 26, November 27, 2022 2021 2022 2021 In thousands (13 weeks) (13 weeks) (39 weeks) (39 weeks) Retail Pharmacy segment: Pharmacy sales $ 3,155,646 $ 3,132,821 $ 9,180,331 $ 9,069,520 Front-end sales 1,229,547 1,272,342 3,722,343 3,901,285 Other revenue 27,039 27,345 86,705 90,603 Total Retail Pharmacy segment 4,412,232 4,432,508 12,989,379 13,061,408 Pharmacy Services segment 1,726,933 1,858,830 5,180,031 5,629,325 Intersegment elimination (55,819) (62,458) (170,413) (187,868) Total revenue $ 6,083,346 $ 6,228,880 $ 17,998,997 $ 18,502,865 |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Nov. 26, 2022 | |
Acquisition | |
Schedule of purchase price allocation | Final purchase price Cash consideration $ 89,724 Total 89,724 Final purchase price allocation Cash and cash equivalents $ 3,494 Accounts receivable 23,860 Inventories 67,745 Prepaid expenses and other current assets 1,857 Total current assets 96,956 Property and equipment 28,229 Operating lease right-of-use assets 143,651 Intangible assets (1) 68,700 Other assets 1,805 Total assets acquired 339,341 Accounts payable 24,166 Accrued salaries, wages and other current liabilities 20,335 Current portion of operating lease liabilities 24,617 Total current liabilities 69,118 Long-term operating lease liabilities 124,023 Other long-term liabilities 166 Total liabilities assumed 193,307 Deferred tax liabilities recorded on purchase 13,951 Net assets acquired 132,083 Bargain purchase gain (42,359) Total purchase price $ 89,724 (1) Intangible assets are recorded at estimated fair value, as determined by management based on available information which includes a final valuation prepared by an independent third party. The fair values assigned to identifiable intangible assets were determined through the use of the income approach, specifically the relief from royalty and the multi-period excess earnings methods. The major assumptions used in arriving at the estimated identifiable intangible asset values included management’s final estimates of future cash flows, discounted at an appropriate rate of return which are based on the weighted average cost of capital for both the Company and other market participants, projected customer attrition rates, as well as applicable royalty rates for comparable assets. The useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows. The estimated fair value of intangible assets and related useful lives as included in the final purchase price allocation include: |
Schedule of estimated fair value of intangible assets and related useful lives as included in the final purchase price allocation | Estimated Fair Value Estimated Useful Life (In Years) Prescription files $ 54,300 10 Tradename 14,400 Indefinite Total $ 68,700 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Nov. 26, 2022 | |
Restructuring | |
Schedule of restructuring-related costs | Retail Pharmacy Pharmacy segment Services segment Total Restructuring-related costs Severance and related costs associated with ongoing reorganization efforts (a) $ 3,242 $ 1,558 $ 4,800 Professional and other fees relating to restructuring activities (b) 16,634 5,066 21,700 Total restructuring-related costs $ 19,876 $ 6,624 $ 26,500 Retail Pharmacy Pharmacy segment Services segment Total Restructuring-related costs Severance and related costs associated with ongoing reorganization efforts (a) $ — $ 97 $ 97 Professional and other fees relating to restructuring activities (b) 3,746 5,814 9,560 Total restructuring-related costs $ 3,746 $ 5,911 $ 9,657 Retail Pharmacy Pharmacy segment Services segment Total Restructuring-related costs Severance and related costs associated with ongoing reorganization efforts (a) $ 15,443 $ 2,174 $ 17,617 Professional and other fees relating to restructuring activities (b) 30,246 14,088 44,334 Total restructuring-related costs $ 45,689 $ 16,262 $ 61,951 Retail Pharmacy Pharmacy segment Services segment Total Restructuring-related costs Severance and related costs associated with ongoing reorganization efforts (a) $ — $ 1,098 $ 1,098 Professional and other fees relating to restructuring activities (b) 7,951 16,124 24,075 Total restructuring-related costs $ 7,951 $ 17,222 $ 25,173 |
Schedule of restructuring-related liabilities | Severance and related Professional and costs (a) other fees (b) Total Balance at February 26, 2022 $ 4,257 $ 4,463 $ 8,720 Additions charged to expense 11,904 10,742 22,646 Cash payments (5,231) (11,727) (16,958) Balance at May 28, 2022 $ 10,930 $ 3,478 $ 14,408 Additions charged to expense 913 11,892 12,805 Cash payments (2,782) (10,066) (12,848) Balance at August 27, 2022 $ 9,061 $ 5,304 $ 14,365 Additions charged to expense 4,800 21,700 26,500 Cash payments (4,452) (18,297) (22,749) Balance at November 26, 2022 $ 9,409 $ 8,707 $ 18,116 (a) – Severance and related costs reflect severance accruals, executive search fees, outplacement services and other similar charges associated with ongoing reorganization efforts. (b) – Professional and other fees include costs incurred in connection with the identification and implementation of initiatives associated with restructuring activities. |
Loss Per Share (Tables)
Loss Per Share (Tables) | 9 Months Ended |
Nov. 26, 2022 | |
Loss Per Share | |
Schedule of calculation of basic and diluted income (loss) per share | Thirteen Week Period Ended Thirty-Nine Week Period Ended November 26, November 27, November 26, November 27, 2022 2021 2022 2021 Basic and diluted loss per share: Numerator: Net loss attributable to common stockholders — basic and diluted $ (67,144) $ (36,058) $ (508,625) $ (149,416) Denominator: Basic and diluted weighted average shares 54,792 54,168 54,567 54,004 Basic and diluted loss per share $ (1.23) $ (0.67) $ (9.32) $ (2.77) |
Facility Exit and Impairment _2
Facility Exit and Impairment Charges (Tables) | 9 Months Ended |
Nov. 26, 2022 | |
Facility Exit and Impairment Charges | |
Schedule of amounts relating to facility exit and impairment charges | Thirteen Week Period Thirty-Nine Week Period Ended Ended November 26, November 27, November 26, November 27, 2022 2021 2022 2021 Impairment charges $ 7,728 $ 40,323 $ 77,502 $ 51,372 Facility exit charges 14,811 7,132 57,453 16,267 $ 22,539 $ 47,455 $ 134,955 $ 67,639 |
Schedule of fair value of long-lived assets measured on non-recurring basis | Fair Values Total as of Charges Level 1 Level 2 Level 3 Impairment Date November 26, 2022 Long-lived assets held for use $ — $ 12,096 $ — $ 12,096 $ (72,670) Long-lived assets held for sale $ — $ 5,115 $ — $ 5,115 $ (4,832) Total $ — $ 17,211 $ — $ 17,211 $ (77,502) Fair Values Total as of Charges Level 1 Level 2 Level 3 Impairment Date November 27, 2021 Long-lived assets held for use $ — $ — $ 22,898 $ 22,898 $ (51,372) Long-lived assets held for sale $ — $ — $ — $ — $ — Total $ — $ — $ 22,898 $ 22,898 $ (51,372) |
Schedule of closed store and distribution center charges related to new closures, changes in assumptions and interest accretion | Thirteen Week Period Thirty-Nine Week Period Ended Ended November 26, November 27, November 26, November 27, 2022 2021 2022 2021 Balance—beginning of period $ 41,946 $ 5,611 $ 18,688 $ 3,443 Provision for present value of executory costs for leases exited 10,477 3,620 39,792 5,328 Changes in assumptions and other adjustments (3,259) 1,387 (3,886) 2,880 Interest accretion 258 4 593 20 Cash payments (3,818) (3,941) (9,583) (4,990) Balance—end of period $ 45,604 $ 6,681 $ 45,604 $ 6,681 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Nov. 26, 2022 | |
Goodwill and Other Intangible Assets | |
Summary of the changes in the carrying amount of goodwill | Retail Pharmacy Pharmacy Services Total Balance, February 26, 2022 43,492 835,644 879,136 Goodwill impairment — (252,200) (252,200) Balance, November 26, 2022 $ 43,492 $ 583,444 $ 626,936 |
Schedule of indefinite-lived intangible assets | November 26, 2022 February 26, 2022 Remaining Remaining Weighted Weighted Gross Average Gross Average Carrying Accumulated Amortization Carrying Accumulated Amortization Amount Amortization Net Period Amount Amortization Net Period Non-compete agreements and other (a) $ 201,669 $ (182,641) $ 19,028 3 years $ 197,651 $ (178,958) $ 18,693 3 years Prescription files 1,030,170 (926,017) 104,153 5 years 1,030,169 (918,773) 111,396 6 years Customer relationships (a) 388,000 (301,436) 86,564 9 years 388,000 (286,090) 101,910 10 years CMS license 57,500 (21,691) 35,809 4 years 57,500 (15,372) 42,128 5 years Claims adjudication and other developed software 58,985 (58,985) — 0 years 58,985 (56,316) 2,669 1 years Backlog 11,500 (11,500) — 0 years 11,500 (11,500) — 0 years Total finite $ 1,747,824 $ (1,502,270) 245,554 $ 1,743,805 $ (1,467,009) $ 276,796 Trademarks 14,400 — 14,400 Indefinite 14,400 — 14,400 Indefinite Total $ 1,762,224 $ (1,502,270) $ 259,954 $ 1,758,205 $ (1,467,009) $ 291,196 (a) Amortized on an accelerated basis which is determined based on the remaining useful economic lives of the customer relationships that are expected to contribute directly or indirectly to future cash flows. |
Schedule of finite-lived intangible Assets | November 26, 2022 February 26, 2022 Remaining Remaining Weighted Weighted Gross Average Gross Average Carrying Accumulated Amortization Carrying Accumulated Amortization Amount Amortization Net Period Amount Amortization Net Period Non-compete agreements and other (a) $ 201,669 $ (182,641) $ 19,028 3 years $ 197,651 $ (178,958) $ 18,693 3 years Prescription files 1,030,170 (926,017) 104,153 5 years 1,030,169 (918,773) 111,396 6 years Customer relationships (a) 388,000 (301,436) 86,564 9 years 388,000 (286,090) 101,910 10 years CMS license 57,500 (21,691) 35,809 4 years 57,500 (15,372) 42,128 5 years Claims adjudication and other developed software 58,985 (58,985) — 0 years 58,985 (56,316) 2,669 1 years Backlog 11,500 (11,500) — 0 years 11,500 (11,500) — 0 years Total finite $ 1,747,824 $ (1,502,270) 245,554 $ 1,743,805 $ (1,467,009) $ 276,796 Trademarks 14,400 — 14,400 Indefinite 14,400 — 14,400 Indefinite Total $ 1,762,224 $ (1,502,270) $ 259,954 $ 1,758,205 $ (1,467,009) $ 291,196 (a) Amortized on an accelerated basis which is determined based on the remaining useful economic lives of the customer relationships that are expected to contribute directly or indirectly to future cash flows. |
Indebtedness and Credit Agree_2
Indebtedness and Credit Agreement (Tables) | 9 Months Ended |
Nov. 26, 2022 | |
Indebtedness and Credit Agreement | |
Summary of indebtedness and lease financing obligations | November 26, February 26, 2022 2022 Secured Debt: Senior secured revolving credit facility due August 2026 ($1,350,000 and $709,000 face value less unamortized debt issuance costs of $14,956 and $18,010) 1,335,044 690,990 FILO Term Loan due August 2026 ($350,000 face value less unamortized debt issuance costs of $1,946 and $2,344) 348,054 347,656 1,683,098 1,038,646 Second Lien Secured Debt: 7.5% senior secured notes due July 2025 ($485,058 and $600,000 face value less unamortized debt issuance costs of $4,278 and $6,824) 480,780 593,176 8.0% senior secured notes due November 2026 ($849,918 face value less unamortized debt issuance costs of $12,088 and $14,397) 837,830 835,521 1,318,610 1,428,697 Unguaranteed Unsecured Debt: 7.7% notes due February 2027 ($185,691 and $237,386 face value less unamortized debt issuance costs of $426 and $642) 185,265 236,744 6.875% fixed-rate senior notes due December 2028 ($2,046 and $29,001 face value less unamortized debt issuance costs of $6 and $102) 2,040 28,899 187,305 265,643 Lease financing obligations 19,077 20,374 Total debt 3,208,090 2,753,360 Current maturities of long-term debt and lease financing obligations (6,107) (5,544) Long-term debt and lease financing obligations, less current maturities $ 3,201,983 $ 2,747,816 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Nov. 26, 2022 | |
Leases | |
Schedule of components of net lease cost | Thirteen Week Period Ended Thirty-Nine Week Period Ended November 26, 2022 November 27, 2021 November 26, 2022 November 27, 2021 Operating lease cost $ 156,779 $ 167,224 $ 474,580 $ 505,192 Financing lease cost: Amortization of right-of-use asset 894 876 2,566 2,807 Interest on long-term finance lease liabilities 477 533 1,481 1,652 Total finance lease costs $ 1,371 $ 1,409 $ 4,047 $ 4,459 Short-term lease costs 1,218 516 2,260 2,611 Variable lease costs 43,761 44,417 130,058 134,603 Less: sublease income (3,098) (3,404) (9,714) (10,174) Net lease cost $ 200,031 $ 210,162 $ 601,231 $ 636,691 |
Schedule of supplemental cash flow information related to leases | Thirty-Nine Week Period Ended November 26, 2022 November 27, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows paid for operating leases $ 524,417 $ 528,035 Operating cash flows paid for interest portion of finance leases 1,481 1,652 Financing cash flows paid for principal portion of finance leases 2,968 3,146 Right-of-use assets obtained in exchange for lease obligations: Operating leases 217,515 262,937 Finance leases — — |
Schedule of supplemental balance sheet information related to leases | November 26, February 26, 2022 2022 Operating leases: Operating lease right-of-use asset $ 2,622,969 $ 2,813,535 Short-term operating lease liabilities $ 563,490 $ 575,651 Long-term operating lease liabilities 2,427,836 2,597,090 Total operating lease liabilities $ 2,991,326 $ 3,172,741 Finance leases: Property, plant and equipment, net $ 13,560 $ 13,950 Current maturities of long-term debt and lease financing obligations $ 6,107 $ 5,544 Lease financing obligations, less current maturities 12,970 14,830 Total finance lease liabilities $ 19,077 $ 20,374 Weighted average remaining lease term Operating leases 7.5 7.7 Finance leases 8.3 8.7 Weighted average discount rate Operating leases 6.3 % 6.0 % Finance leases 9.1 % 10.0 % |
Schedule of minimum lease payments, financing leases | November 26, 2022 Finance Operating Fiscal year Leases Leases (1) Total 2023 (remaining fourteen weeks) $ 4,343 $ 230,437 $ 234,780 2024 6,394 668,106 674,500 2025 2,672 582,738 585,410 2026 1,680 494,887 496,567 2027 1,500 413,327 414,827 Thereafter 11,297 1,449,088 1,460,385 Total lease payments 27,886 3,838,583 3,866,469 Less: imputed interest (8,809) (847,257) (856,066) Total lease liabilities $ 19,077 $ 2,991,326 $ 3,010,403 (1) – Future operating lease payments have not been reduced by minimum sublease rentals of $26 million due in the future under noncancelable leases. |
Schedule of minimum lease payments, operating leases | November 26, 2022 Finance Operating Fiscal year Leases Leases (1) Total 2023 (remaining fourteen weeks) $ 4,343 $ 230,437 $ 234,780 2024 6,394 668,106 674,500 2025 2,672 582,738 585,410 2026 1,680 494,887 496,567 2027 1,500 413,327 414,827 Thereafter 11,297 1,449,088 1,460,385 Total lease payments 27,886 3,838,583 3,866,469 Less: imputed interest (8,809) (847,257) (856,066) Total lease liabilities $ 19,077 $ 2,991,326 $ 3,010,403 (1) – Future operating lease payments have not been reduced by minimum sublease rentals of $26 million due in the future under noncancelable leases. |
Stock Options and Stock Awards
Stock Options and Stock Awards (Tables) | 9 Months Ended |
Nov. 26, 2022 | |
Stock Options and Stock Awards | |
Schedule of total number and type of newly awarded grants and the related weighted average fair value | November 26, 2022 November 27, 2021 Shares Weighted Average Fair Value Shares Weighted Average Fair Value Stock options granted — $ N/A — $ N/A Restricted stock awards granted 1,202 $ 7.74 904 $ 15.15 Total awards 1,202 904 |
Schedule of unrecognized pre-tax compensation costs, net of estimated forfeitures and the weighted average period of cost amortization | November 26, 2022 Unvested Unvested Unvested stock restricted performance options stock shares Unrecognized pre-tax costs $ 297 $ 14,664 $ 6,732 Weighted average amortization period 0.7 years 2.0 years 1.9 years |
Retirement Plans (Tables)
Retirement Plans (Tables) | 9 Months Ended |
Nov. 26, 2022 | |
Retirement Plans | |
Summary of net periodic pension expense for the defined benefit plans | Defined Benefit Defined Benefit Pension Plan Pension Plan Thirteen Week Period Ended Thirty-Nine Week Period Ended November 26, November 27, November 26, November 27, 2022 2021 2022 2021 Service cost $ 141 $ 128 $ 355 $ 384 Interest cost 2,028 1,232 4,555 3,696 Expected return on plan assets (2,113) (1,313) (4,917) (3,939) Amortization of unrecognized net loss — 123 — 369 Net periodic pension expense (income) $ 56 $ 170 $ (7) $ 510 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Nov. 26, 2022 | |
Segment Reporting | |
Schedule of balance sheet information for the Company's reportable segments | Retail Pharmacy Pharmacy Services Eliminations (1) Consolidated November 26, 2022: Total Assets $ 5,962,934 $ 2,261,550 $ (14,710) $ 8,209,774 Goodwill 43,492 583,444 — 626,936 February 26, 2022: Total Assets $ 6,068,594 $ 2,482,232 $ (21,823) $ 8,529,003 Goodwill 43,492 835,644 — 879,136 (1) As of November 26, 2022 and February 26, 2022, intersegment eliminations include intersegment accounts receivable of $14,710 and $21,823 , respectively, that represents amounts owed from the Pharmacy Services segment to the Retail Pharmacy segment that are created when Pharmacy Services segment customers use Retail Pharmacy segment stores to purchase covered products. |
Schedule of reconciliation of the Company's business segments to the condensed consolidated financial statements | Retail Pharmacy Intersegment Pharmacy Services Eliminations (1) Consolidated Thirteen Week Period Ended November 26, 2022: Revenues $ 4,412,232 $ 1,726,933 $ (55,819) $ 6,083,346 Gross Profit 1,099,279 104,473 — 1,203,752 Adjusted EBITDA (2) 81,683 40,233 — 121,916 Additions to property and equipment and intangible assets 54,448 5,453 — 59,901 November 27, 2021: Revenues $ 4,432,508 $ 1,858,830 $ (62,458) $ 6,228,880 Gross Profit 1,233,237 101,146 — 1,334,383 Adjusted EBITDA (2) 125,931 28,862 — 154,793 Additions to property and equipment and intangible assets 44,501 4,954 — 49,455 Thirty-Nine Week Period Ended November 26, 2022: Revenues $ 12,989,379 $ 5,180,031 $ (170,413) $ 17,998,997 Gross Profit 3,239,672 315,304 — 3,554,976 Adjusted EBITDA (2) 186,849 113,746 — 300,595 Additions to property and equipment and intangible assets 179,342 18,158 — 197,500 November 27, 2021: Revenues $ 13,061,408 $ 5,629,325 $ (187,868) $ 18,502,865 Gross Profit 3,543,533 321,649 — 3,865,182 Adjusted EBITDA (2) 290,214 109,616 — 399,830 Additions to property and equipment and intangible assets 155,942 13,348 — 169,290 (1) Intersegment eliminations include intersegment revenues and corresponding cost of revenues that occur when Pharmacy Services segment customers use Retail Pharmacy segment stores to purchase covered products. When this occurs, both the Retail Pharmacy and Pharmacy Services segments record the revenue on a stand-alone basis. (2) See “Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Other Non-GAAP Measures” in Management’s Discussion and Analysis of Financial Condition and Results for additional details. |
Schedule of reconciliation of net (loss) income to Adjusted EBITDA | November 26, November 27, November 26, November 27, 2022 2021 2022 2021 (13 weeks) (13 weeks) (39 weeks) (39 weeks) Net loss $ (67,144) $ (36,058) $ (508,625) $ (149,416) Interest expense 57,416 47,794 158,068 145,507 Income tax (benefit) expense (510) (1,175) 14,954 2,915 Depreciation and amortization 69,496 72,973 208,133 222,691 LIFO charge 15,246 8,886 25,367 900 Facility exit and impairment charges 22,539 47,455 134,955 67,639 Goodwill and intangible asset impairment charges — — 252,200 — (Gain) loss on debt modifications and retirements, net — — (41,312) 3,235 Merger and Acquisition-related costs — 3,642 — 12,119 Stock-based compensation expense 566 217 8,635 8,820 Restructuring-related costs 26,500 9,657 61,951 25,173 Inventory write-downs related to store closings 3,085 86 12,134 1,356 Litigation and other contractual settlements (2,541) 2,000 35,823 50,212 Gain on sale of assets, net (3,095) (5,899) (61,292) (79) Loss on Bartell acquisition — 5,346 — 5,346 Other 358 (131) (396) 3,412 Adjusted EBITDA $ 121,916 $ 154,793 $ 300,595 $ 399,830 |
Supplementary Cash Flow Data (T
Supplementary Cash Flow Data (Tables) | 9 Months Ended |
Nov. 26, 2022 | |
Supplementary Cash Flow Data | |
Schedule of supplementary cash flow data | Thirty-Nine Week Period Ended November 26, 2022 November 27, 2021 Cash paid for interest $ 118,842 $ 102,633 Cash (refunds) payments for income taxes, net $ (6,805) $ 3,521 Equipment financed under capital leases $ 2,383 $ 1,698 Gross borrowings from revolver $ 2,597,000 $ 4,191,000 Gross repayments to revolver $ 1,956,000 $ 3,891,000 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Sales (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 26, 2022 | Nov. 27, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
Product Class | ||||
Total revenue | $ 6,083,346 | $ 6,228,880 | $ 17,998,997 | $ 18,502,865 |
Intersegment eliminations | ||||
Product Class | ||||
Total revenue | (55,819) | (62,458) | (170,413) | (187,868) |
Retail Pharmacy | ||||
Product Class | ||||
Other revenue | 27,039 | 27,345 | 86,705 | 90,603 |
Total revenue | 4,412,232 | 4,432,508 | 12,989,379 | 13,061,408 |
Retail Pharmacy | Pharmacy sales | ||||
Product Class | ||||
Revenues | 3,155,646 | 3,132,821 | 9,180,331 | 9,069,520 |
Retail Pharmacy | Front end sales | ||||
Product Class | ||||
Revenues | 1,229,547 | 1,272,342 | 3,722,343 | 3,901,285 |
Pharmacy Services | ||||
Product Class | ||||
Revenues | $ 1,726,933 | $ 1,858,830 | $ 5,180,031 | $ 5,629,325 |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - FY thru Revenue (Details) | Feb. 27, 2022 USD ($) Point | Dec. 20, 2020 | Nov. 26, 2022 USD ($) | Feb. 26, 2022 USD ($) |
Wellness plus program | ||||
Revenue Recognition | ||||
Loyalty discount eligibility period | 6 months | |||
Rite aid rewards program | Retail Pharmacy | ||||
Revenue Recognition | ||||
Value of each reward point earned | $ 0.002 | |||
Minimum points required for conversion into rewards | Point | 1,000 | |||
Threshold period for expiry of unconverted points | 90 days | |||
Threshold period for expiry of unredeemed rewards | 30 days | |||
Accrued contract liabilities | $ 1,157,000 | $ 0 |
Acquisition (Details)
Acquisition (Details) - Bartell Drug Company $ in Thousands | Dec. 18, 2020 USD ($) item |
Business Acquisition [Line Items] | |
Cash consideration | $ | $ 89,724 |
Number of stores | 67 |
Number of distribution centers | 1 |
Percentage of ownership in subsidiary | 100% |
Acquisition - Purchase price al
Acquisition - Purchase price allocation (Details) - Bartell Drug Company - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 18, 2020 | Nov. 27, 2021 | Feb. 27, 2021 | |
Final purchase price | |||
Cash consideration | $ 89,724 | ||
Total purchase price | 89,724 | ||
Final purchase price allocation | |||
Cash and cash equivalents | 3,494 | ||
Accounts receivable | 23,860 | ||
Inventories | 67,745 | ||
Prepaid expenses and other current assets | 1,857 | ||
Total current assets | 96,956 | ||
Property and equipment | 28,229 | ||
Operating lease right-of-use assets | 143,651 | ||
Intangible assets | 68,700 | ||
Other assets | 1,805 | ||
Total assets acquired | 339,341 | ||
Accounts payable | 24,166 | ||
Accrued salaries, wages and other current liabilities | 20,335 | ||
Current portion of operating lease liabilities | 24,617 | ||
Total current liabilities | 69,118 | ||
Long-term operating lease liabilities | 124,023 | ||
Other long-term liabilities | 166 | ||
Total liabilities assumed | 193,307 | ||
Deferred tax liabilities recorded on purchase | 13,951 | ||
Net assets acquired | 132,083 | ||
Bargain purchase gain | (42,359) | $ (42,359) | $ (47,705) |
Total purchase price | $ 89,724 |
Acquisition - Intangible assets
Acquisition - Intangible assets acquired (Details) - Bartell Drug Company $ in Thousands | Dec. 18, 2020 USD ($) |
Business Acquisition [Line Items] | |
Intangible assets acquired | $ 68,700 |
Tradename | |
Business Acquisition [Line Items] | |
Intangible assets acquired | 14,400 |
Prescription files | |
Business Acquisition [Line Items] | |
Intangible assets acquired | $ 54,300 |
Estimated Useful Life | 10 years |
Acquisition - Acquisition costs
Acquisition - Acquisition costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Dec. 18, 2020 | Nov. 26, 2022 | Nov. 27, 2021 | Feb. 27, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
Business Acquisition [Line Items] | ||||||
Acquisition costs | $ 3,642 | $ 12,119 | ||||
Bartell Drug Company | ||||||
Business Acquisition [Line Items] | ||||||
Bargain purchase gain | $ 42,359 | 42,359 | $ 47,705 | |||
Loss on Bartell acquisition | 5,346 | |||||
Acquisition costs | $ 0 | $ 3,642 | $ 0 | $ 12,119 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Nov. 26, 2022 | Aug. 27, 2022 | May 28, 2022 | Nov. 27, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
Restructuring related costs | ||||||
Total restructuring-related costs | $ 26,500 | $ 9,657 | $ 61,951 | $ 25,173 | ||
Anticipated restructuring-related costs during fiscal 2023 | 72,000 | 72,000 | ||||
Total restructuring-related costs | Selling, general and administrative expenses | ||||||
Restructuring related costs | ||||||
Balance-beginning of period | 14,365 | $ 14,408 | $ 8,720 | 8,720 | ||
Additions charged to expense | 26,500 | 12,805 | 22,646 | |||
Cash payments | (22,749) | (12,848) | (16,958) | |||
Balance-end of period | 18,116 | 14,365 | 14,408 | 18,116 | ||
Total restructuring-related costs | 26,500 | 9,657 | 61,951 | 25,173 | ||
Severance and related costs | Selling, general and administrative expenses | ||||||
Restructuring related costs | ||||||
Balance-beginning of period | 9,061 | 10,930 | 4,257 | 4,257 | ||
Additions charged to expense | 4,800 | 913 | 11,904 | |||
Cash payments | (4,452) | (2,782) | (5,231) | |||
Balance-end of period | 9,409 | 9,061 | 10,930 | 9,409 | ||
Total restructuring-related costs | 4,800 | 97 | 17,617 | 1,098 | ||
Professional and other fees | Selling, general and administrative expenses | ||||||
Restructuring related costs | ||||||
Balance-beginning of period | 5,304 | 3,478 | 4,463 | 4,463 | ||
Additions charged to expense | 21,700 | 11,892 | 10,742 | |||
Cash payments | (18,297) | (10,066) | (11,727) | |||
Balance-end of period | 8,707 | $ 5,304 | $ 3,478 | 8,707 | ||
Total restructuring-related costs | 21,700 | 9,560 | 44,334 | 24,075 | ||
Retail Pharmacy | Total restructuring-related costs | Selling, general and administrative expenses | ||||||
Restructuring related costs | ||||||
Total restructuring-related costs | 19,876 | 3,746 | 45,689 | 7,951 | ||
Retail Pharmacy | Severance and related costs | Selling, general and administrative expenses | ||||||
Restructuring related costs | ||||||
Total restructuring-related costs | 3,242 | 15,443 | ||||
Retail Pharmacy | Professional and other fees | Selling, general and administrative expenses | ||||||
Restructuring related costs | ||||||
Total restructuring-related costs | 16,634 | 3,746 | 30,246 | 7,951 | ||
Pharmacy Services | Total restructuring-related costs | Selling, general and administrative expenses | ||||||
Restructuring related costs | ||||||
Total restructuring-related costs | 6,624 | 5,911 | 16,262 | 17,222 | ||
Pharmacy Services | Severance and related costs | Selling, general and administrative expenses | ||||||
Restructuring related costs | ||||||
Total restructuring-related costs | 1,558 | 97 | 2,174 | 1,098 | ||
Pharmacy Services | Professional and other fees | Selling, general and administrative expenses | ||||||
Restructuring related costs | ||||||
Total restructuring-related costs | $ 5,066 | $ 5,814 | $ 14,088 | $ 16,124 |
Loss Per Share (Details)
Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 26, 2022 | Nov. 27, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
Numerator: | ||||
Net loss attributable to common stockholders - basic | $ (67,144) | $ (36,058) | $ (508,625) | $ (149,416) |
Net loss attributable to common stockholders - diluted | $ (67,144) | $ (36,058) | $ (508,625) | $ (149,416) |
Denominator: | ||||
Basic weighted average shares | 54,792 | 54,168 | 54,567 | 54,004 |
Diluted weighted average shares | 54,792 | 54,168 | 54,567 | 54,004 |
Basic loss per share | $ (1.23) | $ (0.67) | $ (9.32) | $ (2.77) |
Diluted loss per share | $ (1.23) | $ (0.67) | $ (9.32) | $ (2.77) |
Unvested Stock options | ||||
Antidilutive securities excluded from computation of income per share | ||||
Shares excluded from the computation of diluted income (loss) per share | 537 | 719 | 537 | 719 |
Unvested Restricted stock | ||||
Antidilutive securities excluded from computation of income per share | ||||
Shares excluded from the computation of diluted income (loss) per share | 1,724 | 1,583 | 1,724 | 1,583 |
Facility Exit and Impairment _3
Facility Exit and Impairment Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 26, 2022 | Nov. 27, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
Lease termination and impairment charges | ||||
Facility exit and impairment charges | $ 22,539 | $ 47,455 | $ 134,955 | $ 67,639 |
Impairment charges | ||||
Lease termination and impairment charges | ||||
Facility exit and impairment charges | 7,728 | 40,323 | 77,502 | 51,372 |
Facility exit charges | ||||
Lease termination and impairment charges | ||||
Facility exit and impairment charges | $ 14,811 | $ 7,132 | $ 57,453 | $ 16,267 |
Facility Exit and Impairment _4
Facility Exit and Impairment Charges - Fair value (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 26, 2022 | Nov. 27, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
Non Financial Assets Measured on a Non Recurring Basis | ||||
Carrying value of long-lived assets | $ 94,713 | $ 74,270 | $ 94,713 | $ 74,270 |
Nonrecurring basis | ||||
Non Financial Assets Measured on a Non Recurring Basis | ||||
Fair value of Long-lived assets held for use | 12,096 | 22,898 | 12,096 | 22,898 |
Fair value of Long-lived assets held for sale | 5,115 | 5,115 | ||
Total | 17,211 | 22,898 | 17,211 | 22,898 |
Long-lived assets held, impairment charges | (72,670) | (51,372) | ||
Long-lived assets held for sale, impairment charges | (4,832) | |||
Total | (7,728) | (40,323) | (77,502) | (51,372) |
Nonrecurring basis | Level 1 | ||||
Non Financial Assets Measured on a Non Recurring Basis | ||||
Fair value of Long-lived assets held for use | ||||
Fair value of Long-lived assets held for sale | ||||
Total | ||||
Nonrecurring basis | Level 2 | ||||
Non Financial Assets Measured on a Non Recurring Basis | ||||
Fair value of Long-lived assets held for use | 12,096 | 12,096 | ||
Fair value of Long-lived assets held for sale | 5,115 | 5,115 | ||
Total | 17,211 | 17,211 | ||
Nonrecurring basis | Level 3 | ||||
Non Financial Assets Measured on a Non Recurring Basis | ||||
Fair value of Long-lived assets held for use | 22,898 | 22,898 | ||
Fair value of Long-lived assets held for sale | ||||
Total | 22,898 | 22,898 | ||
Fair Value as of Impairment Date | Nonrecurring basis | ||||
Non Financial Assets Measured on a Non Recurring Basis | ||||
Total | $ 17,211 | $ 22,898 | $ 17,211 | $ 22,898 |
Facility Exit and Impairment _5
Facility Exit and Impairment Charges - Closed Store Liability rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 26, 2022 | Nov. 27, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
Closed store liability | ||||
Provision for present value of executory costs for leases exited | $ 26,500 | $ 9,657 | $ 61,951 | $ 25,173 |
Facility exit charges | ||||
Closed store liability | ||||
Balance-beginning of period | 41,946 | 5,611 | 18,688 | 3,443 |
Provision for present value of executory costs for leases exited | 10,477 | 3,620 | 39,792 | 5,328 |
Changes in assumptions and other adjustments | (3,259) | 1,387 | (3,886) | 2,880 |
Interest accretion | 258 | 4 | 593 | 20 |
Cash payments | (3,818) | (3,941) | (9,583) | (4,990) |
Balance-end of period | $ 45,604 | $ 6,681 | $ 45,604 | $ 6,681 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Nov. 26, 2022 | Feb. 26, 2022 |
Other Financial Instruments | ||
Held to maturity investments | $ 7,696 | $ 7,406 |
Level 1 | ||
Other Financial Instruments | ||
Carrying value of total long-term indebtedness | 3,189,013 | 2,732,986 |
Estimated fair value of total long-term indebtedness | $ 2,686,945 | $ 2,661,122 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Nov. 26, 2022 | Nov. 27, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | Feb. 26, 2022 | |
Income Taxes | |||||
Income tax (benefit) expense | $ (510) | $ (1,175) | $ 14,954 | $ 2,915 | |
Effective tax rate (as a percent) | 0.80% | 3.20% | (3.00%) | (2.00%) | |
Valuation allowance to offset the current year deferred state tax benefits (as a percent) | (19.50%) | (18.50%) | 46.50% | (21.40%) | |
Adjustments to valuation allowance | $ 380,509 | ||||
Decrease in unrecognized tax benefits related to state exposures | $ 25,130 | 25,130 | |||
Valuation allowance against net deferred tax assets | $ 1,593,207 | $ 1,593,207 | $ 1,822,710 |
Medicare Part D (Details)
Medicare Part D (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Oct. 13, 2022 | Jan. 24, 2022 | Aug. 12, 2021 | Nov. 26, 2022 | Feb. 26, 2022 | Nov. 27, 2021 | Aug. 28, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | Sep. 30, 2022 | |
Statutory Accounting Practices [Line Items] | ||||||||||
Minimum amount of capital and surplus required by regulatory requirements | $ 11,383 | |||||||||
Accounts receivable, net | $ 1,473,997 | $ 1,343,496 | $ 1,473,997 | |||||||
Medicare Part D | ||||||||||
Loss (gain) on sale of assets, net | (3,095) | $ (5,899) | (61,292) | $ (79) | ||||||
Receivable Purchase Agreements | ||||||||||
Statutory Accounting Practices [Line Items] | ||||||||||
Accounts receivable, net | 59,052 | 34,898 | 59,052 | |||||||
January 2022 Receivable Purchase Agreement | ||||||||||
Statutory Accounting Practices [Line Items] | ||||||||||
Accounts receivable, net | 27,647 | 27,647 | ||||||||
Medicare Part D | ||||||||||
Amount of receivables sold under Receivable Purchase Agreement | $ 400,680 | |||||||||
Sale price for receivables sold | 387,035 | |||||||||
Receipts from sale of receivables | $ 359,388 | |||||||||
Loss on sale of receivable | 13,645 | |||||||||
August 2021 Receivable Purchase Agreement | ||||||||||
Statutory Accounting Practices [Line Items] | ||||||||||
Accounts receivable, net | 18,756 | 18,756 | ||||||||
Medicare Part D | ||||||||||
Amount of receivables sold under Receivable Purchase Agreement | $ 271,829 | |||||||||
Sale price for receivables sold | 258,116 | |||||||||
Receipts from sale of receivables | $ 239,360 | |||||||||
Loss on sale of receivable | $ 13,713 | |||||||||
October 2022 Receivable Purchase Agreement | ||||||||||
Statutory Accounting Practices [Line Items] | ||||||||||
Accounts receivable, net | 13,488 | 13,488 | ||||||||
Medicare Part D | ||||||||||
Amount of receivables sold under Receivable Purchase Agreement | $ 195,487 | |||||||||
Sale price for receivables sold | 180,405 | |||||||||
Receipts from sale of receivables | $ 166,917 | |||||||||
Loss on sale of receivable | 1,937 | |||||||||
Loss (gain) on sale of assets, net | 15,082 | |||||||||
EI (Elixir Insurance) | ||||||||||
Statutory Accounting Practices [Line Items] | ||||||||||
Accounts receivable, net | $ 221,684 | $ 63,203 | $ 221,684 |
Manufacturer Rebates Receivab_2
Manufacturer Rebates Receivables (Details) - Pharmacy Services - USD ($) $ in Thousands | Nov. 26, 2022 | Feb. 26, 2022 |
Manufacturer Rebates Receivables | ||
Manufacturer rebates receivables | $ 520,652 | $ 535,620 |
Manufacturers Rebates Receivables | ||
Manufacturer Rebates Receivables | ||
Allowance for uncollectible rebates | $ 8,474 | $ 18,796 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Aug. 27, 2022 | Nov. 26, 2022 | Feb. 26, 2022 | |
Goodwill, impairment charges | $ 252,200 | $ 252,200 | |
Pharmacy Services | |||
Goodwill, impairment charges | 252,200 | ||
Accumulated impairment losses | $ 1,055,912 | $ 803,712 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Aug. 27, 2022 | Nov. 26, 2022 | |
Carrying amount of goodwill | ||
Beginning Balance | $ 879,136 | |
Goodwill impairment | $ (252,200) | (252,200) |
Ending Balance | 626,936 | |
Retail Pharmacy | ||
Carrying amount of goodwill | ||
Beginning Balance | 43,492 | |
Ending Balance | 43,492 | |
Pharmacy Services | ||
Carrying amount of goodwill | ||
Beginning Balance | 835,644 | |
Goodwill impairment | (252,200) | |
Ending Balance | $ 583,444 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Intangibles (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Feb. 25, 2022 | Nov. 26, 2022 | Feb. 26, 2022 | |
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount, Finite | $ 1,747,824 | $ 1,743,805 | |
Total Accumulated Amortization, Finite | (1,502,270) | (1,467,009) | |
Total Net, finite | 245,554 | 276,796 | |
Gross Carrying Amount, Total | 1,762,224 | 1,758,205 | |
Net, Total | 259,954 | 291,196 | |
Trademarks | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Total Accumulated Amortization, Indefinite Lived | |||
Net Carrying Amount, Indefinite Lived | 14,400 | 14,400 | |
Gross Carrying Amount, Indefinite Lived | 14,400 | 14,400 | |
Noncompete agreements and other | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount, Finite | 201,669 | 197,651 | |
Total Accumulated Amortization, Finite | (182,641) | (178,958) | |
Total Net, finite | $ 19,028 | $ 18,693 | |
Remaining Weighted Average Amortization Period | 3 years | 3 years | |
Prescription files | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount, Finite | $ 1,030,170 | $ 1,030,169 | |
Total Accumulated Amortization, Finite | (926,017) | (918,773) | |
Total Net, finite | $ 104,153 | $ 111,396 | |
Remaining Weighted Average Amortization Period | 5 years | 6 years | |
Customer relationships | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount, Finite | $ 388,000 | $ 388,000 | |
Total Accumulated Amortization, Finite | (301,436) | (286,090) | |
Total Net, finite | $ 86,564 | $ 101,910 | |
Remaining Weighted Average Amortization Period | 9 years | 10 years | |
CMS license | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount, Finite | $ 57,500 | $ 57,500 | |
Total Accumulated Amortization, Finite | (21,691) | (15,372) | |
Total Net, finite | $ 35,809 | $ 42,128 | |
Remaining Weighted Average Amortization Period | 4 years | 5 years | |
Claims adjudication and other developed software | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount, Finite | $ 58,985 | $ 58,985 | |
Total Accumulated Amortization, Finite | $ (58,985) | (56,316) | |
Total Net, finite | $ 2,669 | ||
Remaining Weighted Average Amortization Period | 0 years | 1 year | |
Backlog | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount, Finite | $ 11,500 | $ 11,500 | |
Total Accumulated Amortization, Finite | (11,500) | (11,500) | |
Total Net, finite | |||
Remaining Weighted Average Amortization Period | 0 years | 0 years | |
EI (Elixir Insurance) | CMS license | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Remaining Weighted Average Amortization Period | 19 years | 5 years |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Unfavorable lease intangibles and amortization expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 26, 2022 | Nov. 27, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
Goodwill and Other Intangible Assets | ||||
Amortization expense for intangible assets and liabilities | $ 17,622 | $ 18,780 | $ 56,668 | $ 59,193 |
Anticipated annual amortization expense for intangible assets and liabilities | ||||
2023 | 72,374 | 72,374 | ||
2024 | 60,009 | 60,009 | ||
2025 | 48,764 | 48,764 | ||
2026 | 38,301 | 38,301 | ||
2027 | $ 31,309 | $ 31,309 |
Indebtedness and Credit Agree_3
Indebtedness and Credit Agreement - Indebtedness and lease financing obligations (Details) - USD ($) $ in Thousands | Nov. 26, 2022 | Jun. 13, 2022 | Feb. 26, 2022 |
Indebtedness and credit agreements | |||
Lease financing obligations | $ 19,077 | $ 20,374 | |
Total Debt | 3,208,090 | 2,753,360 | |
Current maturities of long-term debt and lease financing obligations | (6,107) | (5,544) | |
Long-term debt and lease financing obligations, less current maturities | 3,201,983 | 2,747,816 | |
Senior Secured Debt | |||
Indebtedness and credit agreements | |||
Long-term debt | 1,683,098 | 1,038,646 | |
FILO term loan due August 2026 | |||
Indebtedness and credit agreements | |||
Long-term debt | 348,054 | 347,656 | |
Principal amount of debt | 350,000 | 350,000 | |
Unamortized debt issuance costs | 1,946 | 2,344 | |
Senior secured revolving credit facility due August 2026 | |||
Indebtedness and credit agreements | |||
Long-term debt | 1,335,044 | 690,990 | |
Principal amount of debt | 1,350,000 | 709,000 | |
Unamortized debt issuance costs | 14,956 | 18,010 | |
Second Lien Secured Debt | |||
Indebtedness and credit agreements | |||
Long-term debt | 1,318,610 | 1,428,697 | |
7.5% senior notes due July 2025 | |||
Indebtedness and credit agreements | |||
Long-term debt | $ 480,780 | $ 593,176 | |
Debt instrument, stated interest rate (as a percent) | 7.50% | 7.50% | 7.50% |
Principal amount of debt | $ 485,058 | $ 600,000 | |
Unamortized debt issuance costs | 4,278 | 6,824 | |
8.0% senior secured notes due November 2026 | |||
Indebtedness and credit agreements | |||
Long-term debt | $ 837,830 | $ 835,521 | |
Debt instrument, stated interest rate (as a percent) | 8% | 8% | |
Principal amount of debt | $ 849,918 | $ 849,918 | |
Unamortized debt issuance costs | 12,088 | 14,397 | |
Unguaranteed Unsecured Debt | |||
Indebtedness and credit agreements | |||
Long-term debt | 187,305 | 265,643 | |
7.7% notes due February 2027 | |||
Indebtedness and credit agreements | |||
Long-term debt | $ 185,265 | $ 236,744 | |
Debt instrument, stated interest rate (as a percent) | 7.70% | 7.70% | |
Principal amount of debt | $ 185,691 | $ 237,386 | |
Unamortized debt issuance costs | 426 | 642 | |
6.875% fixed-rate senior notes due December 2028 | |||
Indebtedness and credit agreements | |||
Long-term debt | $ 2,040 | $ 28,899 | |
Debt instrument, stated interest rate (as a percent) | 6.875% | 6.875% | |
Principal amount of debt | $ 2,046 | $ 29,001 | |
Unamortized debt issuance costs | $ 6 | $ 102 |
Indebtedness and Credit Agree_4
Indebtedness and Credit Agreement - Credit Facility (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||||
Dec. 01, 2022 | Aug. 20, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | Feb. 26, 2022 | May 28, 2021 | Dec. 20, 2018 | |
Credit facility | |||||||
(Gain) loss on debt modifications and retirements, net | $ 41,312 | $ (3,235) | |||||
Rite Aid Lease Management Company | |||||||
Credit facility | |||||||
Ownership interest (as a percent) | 100% | ||||||
Rite Aid Lease Management Company | Subsequent Events | |||||||
Credit facility | |||||||
Ownership interest (as a percent) | 100% | ||||||
Senior secured credit facility | Subsequent Events | |||||||
Credit facility | |||||||
(Gain) loss on debt modifications and retirements, net | $ 1,000 | ||||||
Senior secured revolving credit facility due December 2023 | |||||||
Credit facility | |||||||
Maximum borrowing capacity | $ 2,700,000 | $ 2,700,000 | |||||
Senior secured revolving credit facility due December 2023 | Subsequent Events | |||||||
Credit facility | |||||||
Maximum borrowing capacity | 2,800,000 | ||||||
FILO term loan due December 2023 | |||||||
Credit facility | |||||||
Maximum borrowing capacity | 450,000 | ||||||
Principal amount of debt | 450,000 | ||||||
FILO term loan due December 2023 | Subsequent Events | |||||||
Credit facility | |||||||
Maximum borrowing capacity | 350,000 | ||||||
FILO term loan due August 2026 | |||||||
Credit facility | |||||||
Maximum borrowing capacity | $ 350,000 | ||||||
Principal amount of debt | $ 350,000 | $ 350,000 | |||||
FILO term loan due August 2026 | Subsequent Events | |||||||
Credit facility | |||||||
Maximum borrowing capacity | $ 400,000 | ||||||
FILO term loan due August 2026 | LIBOR | |||||||
Credit facility | |||||||
Percentage points added to the reference rate | 2.75% | ||||||
FILO term loan due August 2026 | Citibank's base rate | |||||||
Credit facility | |||||||
Percentage points added to the reference rate | 1.75% | ||||||
FILO term loan due August 2026 | Citibank's base rate | Subsequent Events | |||||||
Credit facility | |||||||
Percentage points added to the reference rate | 2% | ||||||
FILO term loan due August 2026 | SOFR | Subsequent Events | |||||||
Credit facility | |||||||
Percentage points added to the reference rate | 3% | ||||||
Senior secured revolving credit facility due August 2026 | |||||||
Credit facility | |||||||
Maximum borrowing capacity | $ 2,800,000 | ||||||
Principal amount of debt | 1,350,000 | $ 709,000 | |||||
Period triggering springing maturity | 91 days | ||||||
Outstanding borrowings | 1,700,000 | ||||||
Letters of credit outstanding | 175,911 | ||||||
Additional borrowing capacity | 1,274,089 | ||||||
Maximum amount of accumulated cash on hand | 200,000 | ||||||
Amount of debt allowed to be outstanding | 1,500,000 | ||||||
Cash sweep, 3-day minimum threshold | 275,000 | ||||||
Cash sweep, 1-day minimum threshold | 200,000 | ||||||
Threshold amount of debt | $ 750,000 | ||||||
Number of days relating to debt threshold | 90 days | ||||||
Minimum principal balance for which non-payment causes default | $ 50,000 | ||||||
Senior secured revolving credit facility due August 2026 | Subsequent Events | |||||||
Credit facility | |||||||
Maximum borrowing capacity | $ 2,850,000 | ||||||
Period triggering springing maturity | 91 days | ||||||
Maximum amount of accumulated cash on hand | $ 200,000 | ||||||
Amount of debt allowed to be outstanding | 1,500,000 | ||||||
Cash sweep, 3-day minimum threshold | 283,250 | ||||||
Cash sweep, 1-day minimum threshold | 206,000 | ||||||
Threshold amount of debt | $ 750,000 | ||||||
Number of days relating to debt threshold | 90 days | ||||||
Minimum principal balance for which non-payment causes default | $ 50,000 | ||||||
Senior secured revolving credit facility due August 2026 | Minimum | |||||||
Credit facility | |||||||
Credit facility commitment fee (as a percent) | 0.25% | ||||||
Additional borrowing capacity | $ 365,000 | ||||||
Fixed charge coverage ratio | 1 | ||||||
Threshold availability on thirtieth consecutive day | $ 250,000 | ||||||
Senior secured revolving credit facility due August 2026 | Minimum | Subsequent Events | |||||||
Credit facility | |||||||
Credit facility commitment fee (as a percent) | 0.25% | ||||||
Additional borrowing capacity | $ 375,950 | ||||||
Fixed charge coverage ratio | 1 | ||||||
Threshold availability on thirtieth consecutive day | $ 257,500 | ||||||
Senior secured revolving credit facility due August 2026 | Maximum | |||||||
Credit facility | |||||||
Credit facility commitment fee (as a percent) | 0.375% | ||||||
Threshold availability on revolving credit facility to trigger fixed charge coverage requirements | 200,000 | ||||||
Threshold availability on the third consecutive business day | $ 250,000 | ||||||
Senior secured revolving credit facility due August 2026 | Maximum | Subsequent Events | |||||||
Credit facility | |||||||
Credit facility commitment fee (as a percent) | 0.375% | ||||||
Threshold availability on revolving credit facility to trigger fixed charge coverage requirements | $ 206,000 | ||||||
Threshold availability on the third consecutive business day | $ 257,500 | ||||||
Senior secured revolving credit facility due August 2026 | LIBOR | Minimum | |||||||
Credit facility | |||||||
Percentage points added to the reference rate | 1.25% | ||||||
Senior secured revolving credit facility due August 2026 | LIBOR | Maximum | |||||||
Credit facility | |||||||
Percentage points added to the reference rate | 1.75% | ||||||
Senior secured revolving credit facility due August 2026 | Citibank's base rate | Minimum | |||||||
Credit facility | |||||||
Percentage points added to the reference rate | 0.25% | ||||||
Senior secured revolving credit facility due August 2026 | Citibank's base rate | Maximum | |||||||
Credit facility | |||||||
Percentage points added to the reference rate | 0.75% | ||||||
Senior secured revolving credit facility due January 2020 | |||||||
Credit facility | |||||||
Maximum borrowing capacity | $ 2,700,000 | ||||||
6.125% senior notes due April 2023 | |||||||
Credit facility | |||||||
Debt instrument, stated interest rate (as a percent) | 6.125% |
Indebtedness and Credit Agree_5
Indebtedness and Credit Agreement - Transactions and Maturity (Details) - USD ($) | 9 Months Ended | |||||||||||
Dec. 09, 2022 | Dec. 01, 2022 | Jun. 13, 2022 | Aug. 20, 2021 | May 28, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | Nov. 30, 2022 | Nov. 03, 2022 | Jun. 29, 2022 | Feb. 26, 2022 | Dec. 20, 2018 | |
Indebtedness and credit agreements | ||||||||||||
(Gain) loss on debt modifications and retirements, net | $ 41,312,000 | $ (3,235,000) | ||||||||||
Maturities | ||||||||||||
2023 | 0 | |||||||||||
2024 | 0 | |||||||||||
2025 | 0 | |||||||||||
2026 | 485,058 | |||||||||||
2027 | 2,735,609 | |||||||||||
thereafter | $ 2,046 | |||||||||||
6.125% senior notes due April 2023 | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Debt instrument, stated interest rate (as a percent) | 6.125% | |||||||||||
(Gain) loss on debt retirements, net | $ 396,000 | |||||||||||
Percentage of outstanding principal amount redeemed | 100% | |||||||||||
6.875% fixed-rate senior notes due December 2028 | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Debt instrument, stated interest rate (as a percent) | 6.875% | 6.875% | ||||||||||
Face amount of debt repurchased | $ 26,955,000 | |||||||||||
Principal amount of debt | $ 2,046,000 | $ 29,001,000 | ||||||||||
7.7% notes due February 2027 | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Debt instrument, stated interest rate (as a percent) | 7.70% | 7.70% | ||||||||||
Face amount of debt repurchased | 51,695,000 | |||||||||||
Principal amount of debt | $ 185,691,000 | $ 237,386,000 | ||||||||||
7.5% senior notes due July 2025 | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Debt instrument, stated interest rate (as a percent) | 7.50% | 7.50% | 7.50% | |||||||||
Debt Instrument, Sun Cap Amount | $ 100,000,000 | |||||||||||
Face amount of debt repurchased | $ 150,000,000 | $ 200,000,000 | $ 114,942,000 | |||||||||
Principal amount of debt | $ 485,058,000 | $ 600,000,000 | ||||||||||
7.5% senior notes due July 2025 | Subsequent Events | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
(Gain) loss on debt modifications and retirements, net | $ 40,000,000 | |||||||||||
Face amount of debt repurchased | 4,559,000 | $ 160,497,000 | ||||||||||
Outstanding amount of Note | $ 320,002,000 | |||||||||||
7.70% senior secured notes due 2027 | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Debt instrument, stated interest rate (as a percent) | 7.70% | |||||||||||
6.875% senior secured notes due 2028 | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Debt instrument, stated interest rate (as a percent) | 6.875% | |||||||||||
8.0% senior secured notes due November 2026 | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Debt instrument, stated interest rate (as a percent) | 8% | 8% | ||||||||||
Principal amount of debt | $ 849,918,000 | $ 849,918,000 | ||||||||||
8.0% senior secured notes due 2026, | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Debt instrument, stated interest rate (as a percent) | 8% | |||||||||||
Senior secured credit facility | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
(Gain) loss on debt retirements, net | $ 2,839,000 | |||||||||||
Senior secured credit facility | Subsequent Events | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
(Gain) loss on debt modifications and retirements, net | $ 1,000,000 | |||||||||||
Senior secured revolving credit facility due December 2023 | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Maximum borrowing capacity | 2,700,000,000 | $ 2,700,000,000 | ||||||||||
Senior secured revolving credit facility due December 2023 | Subsequent Events | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Maximum borrowing capacity | 2,800,000,000 | |||||||||||
Liquidity | 100,000,000 | |||||||||||
FILO term loan due August 2026 | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Principal amount of debt | 350,000,000 | 350,000,000 | ||||||||||
Maximum borrowing capacity | 350,000,000 | |||||||||||
FILO term loan due August 2026 | Subsequent Events | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Maximum borrowing capacity | 400,000,000 | |||||||||||
Senior secured revolving credit facility due January 2020 | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Maximum borrowing capacity | 2,700,000,000 | |||||||||||
Senior secured revolving credit facility due August 2026 | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Principal amount of debt | $ 1,350,000,000 | $ 709,000,000 | ||||||||||
Maximum borrowing capacity | 2,800,000,000 | |||||||||||
Senior secured revolving credit facility due August 2026 | Subsequent Events | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Maximum borrowing capacity | 2,850,000,000 | |||||||||||
FILO term loan due December 2023 | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Principal amount of debt | $ 450,000,000 | |||||||||||
Maximum borrowing capacity | $ 450,000,000 | |||||||||||
FILO term loan due December 2023 | Subsequent Events | ||||||||||||
Indebtedness and credit agreements | ||||||||||||
Maximum borrowing capacity | $ 350,000,000 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 26, 2022 | Nov. 27, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
Property, Plant and Equipment | ||||
Operating lease cost | $ 156,779 | $ 167,224 | $ 474,580 | $ 505,192 |
Financing lease cost: | ||||
Amortization of right-of-use asset | 894 | 876 | 2,566 | 2,807 |
Interest on long-term finance lease liabilities | 477 | 533 | 1,481 | 1,652 |
Total finance lease costs | 1,371 | 1,409 | 4,047 | 4,459 |
Short-term lease costs | 1,218 | 516 | 2,260 | 2,611 |
Variable lease costs | 43,761 | 44,417 | 130,058 | 134,603 |
Less: sublease income | (3,098) | (3,404) | (9,714) | (10,174) |
Net lease cost | $ 200,031 | $ 210,162 | $ 601,231 | $ 636,691 |
Buildings | Minimum | ||||
Property, Plant and Equipment | ||||
Initial terms of noncancellable operating leases | 5 years | 5 years | ||
Initial terms of noncancellable finance leases | 5 years | 5 years | ||
Buildings | Maximum | ||||
Property, Plant and Equipment | ||||
Initial terms of noncancellable operating leases | 22 years | 22 years | ||
Initial terms of noncancellable finance leases | 22 years | 22 years | ||
Equipment | Minimum | ||||
Property, Plant and Equipment | ||||
Initial terms of noncancellable operating leases | 3 years | 3 years | ||
Equipment | Maximum | ||||
Property, Plant and Equipment | ||||
Initial terms of noncancellable operating leases | 10 years | 10 years |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information related to leases (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 26, 2022 | Nov. 27, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows paid for operating leases | $ 524,417 | $ 528,035 |
Operating cash flows paid for interest portion of finance leases | 1,481 | 1,652 |
Financing cash flows paid for principal portion of finance leases | 2,968 | 3,146 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | 217,515 | 262,937 |
Finance leases |
Leases - Supplemental BS Inform
Leases - Supplemental BS Information (Details) - USD ($) $ in Thousands | Nov. 26, 2022 | Feb. 26, 2022 |
Operating leases: | ||
Operating lease right-of-use assets | $ 2,622,969 | $ 2,813,535 |
Short-term operating lease liabilities | 563,490 | 575,651 |
Long-term operating lease liabilities | 2,427,836 | 2,597,090 |
Total operating lease liabilities | 2,991,326 | 3,172,741 |
Finance leases: | ||
Property, plant and equipment, net | 939,648 | 989,167 |
Current maturities of long-term debt and lease financing obligations | $ 6,107 | $ 5,544 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Long-term Debt and Capital Lease Obligations, Current | Long-term Debt and Capital Lease Obligations, Current |
Lease financing obligations, less current maturities | $ 12,970 | $ 14,830 |
Total finance lease liabilities | $ 19,077 | $ 20,374 |
Weighted average remaining lease term | ||
Operating leases (in years) | 7 years 6 months | 7 years 8 months 12 days |
Finance leases (in years) | 8 years 3 months 18 days | 8 years 8 months 12 days |
Weighted average discount rate | ||
Operating leases (as a percent) | 6.30% | 6% |
Finance leases (as a percent) | 9.10% | 10% |
Finance Leased Assets | ||
Finance leases: | ||
Property, plant and equipment, net | $ 13,560 | $ 13,950 |
Leases - Maturity of lease liab
Leases - Maturity of lease liabilities under finance and operating leases (Details) - USD ($) $ in Thousands | Nov. 26, 2022 | Feb. 26, 2022 |
Finance Leases, ASC842 | ||
2023 (remaining fourteen weeks) | $ 4,343 | |
2024 | 6,394 | |
2025 | 2,672 | |
2026 | 1,680 | |
2027 | 1,500 | |
Thereafter | 11,297 | |
Total lease payments | 27,886 | |
Less: imputed interest | (8,809) | |
Total finance lease liabilities | 19,077 | $ 20,374 |
Operating Leases, ASC842 | ||
2023 (remaining fourteen weeks) | 230,437 | |
2024 | 668,106 | |
2025 | 582,738 | |
2026 | 494,887 | |
2027 | 413,327 | |
Thereafter | 1,449,088 | |
Total lease payments | 3,838,583 | |
Less: imputed interest | (847,257) | |
Total operating lease liabilities | 2,991,326 | $ 3,172,741 |
Minimum sublease rentals | 26,000 | |
Operating and finance leases, ASC842 | ||
2023 (remaining fourteen weeks) | 234,780 | |
2024 | 674,500 | |
2025 | 585,410 | |
2026 | 496,567 | |
2027 | 414,827 | |
Thereafter | 1,460,385 | |
Total lease payments | 3,866,469 | |
Less: imputed interest | (856,066) | |
Total lease liabilities | $ 3,010,403 |
Leases - Sale Leaseback (Detail
Leases - Sale Leaseback (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 26, 2022 USD ($) facility store | Nov. 27, 2021 USD ($) facility | Nov. 26, 2022 USD ($) facility store | Nov. 27, 2021 USD ($) facility | |
Sale Leaseback Transaction | ||||
Number of facilities in sale/leaseback | facility | 4 | 9 | 7 | 13 |
Number of stores sold | store | 5 | 5 | ||
Sale/leaseback proceeds | $ 9,908 | $ 25,605 | $ 55,894 | $ 39,790 |
Leaseback term | 15 years | 15 years | ||
Gain on sale-leaseback transactions | $ 6,616 | $ 4,884 | $ 29,929 | $ 5,794 |
Retail Store | ||||
Sale Leaseback Transaction | ||||
Leaseback term | 15 years | 15 years | ||
Distribution Center | ||||
Sale Leaseback Transaction | ||||
Leaseback term | 3 years | 3 years |
Stock Options and Stock Award_2
Stock Options and Stock Awards (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 26, 2022 | Nov. 27, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
Stock Options and Stock Awards | ||||
Stock-based compensation costs | $ 566 | $ 217 | $ 8,635 | $ 8,820 |
Performance based awards | ||||
Stock Options and Stock Awards | ||||
Stock-based compensation costs | $ (771) | $ 573 |
Stock Options and Stock Award_3
Stock Options and Stock Awards - Awarded grants and related weighted average fair value (Details) - $ / shares shares in Thousands | 9 Months Ended | |
Nov. 26, 2022 | Nov. 27, 2021 | |
Restricted stock, Weighted Average Fair Value | ||
Total awards (in shares) | 1,202 | 904 |
Unvested Stock options | ||
Options, Shares | ||
Granted (in shares) | ||
Additional General Disclosures | ||
Vesting period | 4 years | |
Unvested Restricted stock | ||
Restricted stock, Shares | ||
Granted (in shares) | 1,202 | 904 |
Restricted stock, Weighted Average Fair Value | ||
Granted (in dollars per share) | $ 7.74 | $ 15.15 |
Additional General Disclosures | ||
Vesting period | 3 years |
Stock Options and Stock Award_4
Stock Options and Stock Awards - Unrecognized pre-tax compensation and weighted average period (Details) $ in Thousands | 9 Months Ended |
Nov. 26, 2022 USD ($) | |
Unvested Stock options | |
Unrecognized pre-tax compensation costs related to unvested stock options, restricted stock grants and performance shares | |
Unrecognized pre-tax costs | $ 297 |
Weighted average amortization period | 8 months 12 days |
Unvested Restricted stock | |
Unrecognized pre-tax compensation costs related to unvested stock options, restricted stock grants and performance shares | |
Unrecognized pre-tax costs | $ 14,664 |
Weighted average amortization period | 2 years |
Unvested Performance shares | |
Unrecognized pre-tax compensation costs related to unvested stock options, restricted stock grants and performance shares | |
Unrecognized pre-tax costs | $ 6,732 |
Weighted average amortization period | 1 year 10 months 24 days |
Retirement Plans - Benefit obli
Retirement Plans - Benefit obligation and funded status (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 26, 2022 | Nov. 27, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
Change in benefit obligations: | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, General and Administrative Expense | Selling, General and Administrative Expense | Selling, General and Administrative Expense | Selling, General and Administrative Expense |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Expected Return (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, General and Administrative Expense | Selling, General and Administrative Expense | Selling, General and Administrative Expense | Selling, General and Administrative Expense |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, General and Administrative Expense | Selling, General and Administrative Expense | Selling, General and Administrative Expense | Selling, General and Administrative Expense |
Defined Benefit Pension Plan | ||||
Change in benefit obligations: | ||||
Service cost | $ 141 | $ 128 | $ 355 | $ 384 |
Interest cost | 2,028 | 1,232 | 4,555 | 3,696 |
Expected return on plan assets | (2,113) | (1,313) | (4,917) | (3,939) |
Amortization of unrecognized net loss | 123 | 369 | ||
Net periodic pension expense (income) | $ 56 | $ 170 | $ (7) | $ 510 |
Segment Reporting - Balance She
Segment Reporting - Balance Sheet information (Details) $ in Thousands | 9 Months Ended | |
Nov. 26, 2022 USD ($) segment | Feb. 26, 2022 USD ($) | |
Segment Reporting | ||
Number of reportable segments | segment | 2 | |
Total assets | $ 8,209,774 | $ 8,529,003 |
Goodwill | 626,936 | 879,136 |
Accounts receivable | 1,473,997 | 1,343,496 |
Retail Pharmacy | ||
Segment Reporting | ||
Goodwill | 43,492 | 43,492 |
Pharmacy Services | ||
Segment Reporting | ||
Goodwill | 583,444 | 835,644 |
Operating segments | Retail Pharmacy | ||
Segment Reporting | ||
Total assets | 5,962,934 | 6,068,594 |
Goodwill | 43,492 | 43,492 |
Operating segments | Pharmacy Services | ||
Segment Reporting | ||
Total assets | 2,261,550 | 2,482,232 |
Goodwill | 583,444 | 835,644 |
Intersegment eliminations | ||
Segment Reporting | ||
Total assets | (14,710) | (21,823) |
Goodwill | ||
Intersegment eliminations | Pharmacy Services | ||
Segment Reporting | ||
Accounts receivable | $ 14,710 | $ 21,823 |
Segment Reporting - Revenues (D
Segment Reporting - Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 26, 2022 | Nov. 27, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
Segment Reporting | ||||
Revenues | $ 6,083,346 | $ 6,228,880 | $ 17,998,997 | $ 18,502,865 |
Gross Profit | 1,203,752 | 1,334,383 | 3,554,976 | 3,865,182 |
Adjusted EBITDA | 121,916 | 154,793 | 300,595 | 399,830 |
Additions to property and equipment and intangible assets | 59,901 | 49,455 | 197,500 | 169,290 |
Retail Pharmacy | ||||
Segment Reporting | ||||
Revenues | 4,412,232 | 4,432,508 | 12,989,379 | 13,061,408 |
Operating segments | Retail Pharmacy | ||||
Segment Reporting | ||||
Revenues | 4,412,232 | 4,432,508 | 12,989,379 | 13,061,408 |
Gross Profit | 1,099,279 | 1,233,237 | 3,239,672 | 3,543,533 |
Adjusted EBITDA | 81,683 | 125,931 | 186,849 | 290,214 |
Additions to property and equipment and intangible assets | 54,448 | 44,501 | 179,342 | 155,942 |
Operating segments | Pharmacy Services | ||||
Segment Reporting | ||||
Revenues | 1,726,933 | 1,858,830 | 5,180,031 | 5,629,325 |
Gross Profit | 104,473 | 101,146 | 315,304 | 321,649 |
Adjusted EBITDA | 40,233 | 28,862 | 113,746 | 109,616 |
Additions to property and equipment and intangible assets | 5,453 | 4,954 | 18,158 | 13,348 |
Intersegment eliminations | ||||
Segment Reporting | ||||
Revenues | (55,819) | (62,458) | (170,413) | (187,868) |
Gross Profit | ||||
Adjusted EBITDA | ||||
Additions to property and equipment and intangible assets |
Segment Reporting - Adjusted EB
Segment Reporting - Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Nov. 26, 2022 | Aug. 27, 2022 | May 28, 2022 | Nov. 27, 2021 | Aug. 28, 2021 | May 29, 2021 | Nov. 26, 2022 | Nov. 27, 2021 | |
Segment Reporting | ||||||||
Net loss | $ (67,144) | $ (331,290) | $ (110,191) | $ (36,058) | $ (100,301) | $ (13,057) | $ (508,625) | $ (149,416) |
Interest expense | 57,416 | 47,794 | 158,068 | 145,507 | ||||
Income tax (benefit) expense | (510) | (1,175) | 14,954 | 2,915 | ||||
Depreciation and amortization | 69,496 | 72,973 | 208,133 | 222,691 | ||||
LIFO charge | 15,246 | 8,886 | 25,367 | 900 | ||||
Facility exit and impairment charges | 22,539 | 47,455 | 134,955 | 67,639 | ||||
Goodwill and intangible asset impairment charges | 252,200 | |||||||
(Gain) loss on debt modifications and retirements, net | (41,312) | 3,235 | ||||||
Merger and Acquisition-related costs | 3,642 | 12,119 | ||||||
Stock-based compensation expense | 566 | 217 | 8,635 | 8,820 | ||||
Restructuring-related costs | 26,500 | 9,657 | 61,951 | 25,173 | ||||
Inventory write-downs related to store closings | 3,085 | 86 | 12,134 | 1,356 | ||||
Litigation and other contractual settlements | (2,541) | 2,000 | 35,823 | 50,212 | ||||
Gain on sale of assets, net | (3,095) | (5,899) | (61,292) | (79) | ||||
Loss on Bartell acquisition | 5,346 | 5,346 | ||||||
Other | 358 | (131) | (396) | 3,412 | ||||
Adjusted EBITDA | $ 121,916 | $ 154,793 | $ 300,595 | $ 399,830 |
Commitments, Contingencies an_2
Commitments, Contingencies and Guarantees (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Apr. 22, 2022 USD ($) | Oct. 01, 2021 USD ($) | Dec. 31, 2022 USD ($) | Aug. 31, 2022 USD ($) | Jun. 30, 2021 USD ($) lawsuit | Dec. 31, 2020 lawsuit state | |
Commitments, Contingencies and Guarantees | ||||||
Number of claims settled | lawsuit | 2 | |||||
California Employment Litigation, Claims Related To Store Associates | ||||||
Commitments, Contingencies and Guarantees | ||||||
Amount awarded to other party | $ 9,000 | |||||
Number of claims settled | lawsuit | 1 | |||||
California Employment Litigation, Claims Related To Distribution Center Associates | ||||||
Commitments, Contingencies and Guarantees | ||||||
Amount awarded to other party | $ 1,750 | |||||
California Employment Litigation, Claims Related to Uniforms | ||||||
Commitments, Contingencies and Guarantees | ||||||
Amount awarded to other party | $ 12,000 | |||||
California Employment Litigation Claims Related To Reimbursement For Cell phone and Mileage Expenses | ||||||
Commitments, Contingencies and Guarantees | ||||||
Amount awarded to other party | $ 1,290 | |||||
California Employment Litigation Claims Related To Wages And Hour Class Action | ||||||
Commitments, Contingencies and Guarantees | ||||||
Amount awarded to other party | $ 800 | |||||
New York Employment Litigation Claims Related To Wages And Hour Class Action | ||||||
Commitments, Contingencies and Guarantees | ||||||
Amount awarded to other party | $ 6,450 | |||||
Blue Cross Blue Shield Litigation | ||||||
Commitments, Contingencies and Guarantees | ||||||
Number of claims | lawsuit | 2 | |||||
Number of states in which operated | state | 8 | |||||
Humana Litigation | ||||||
Commitments, Contingencies and Guarantees | ||||||
Amount awarded to other party | $ 122,600 | |||||
Prejudgment interest awarded | $ 40,700 |
Supplementary Cash Flow Data (D
Supplementary Cash Flow Data (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 26, 2022 | Nov. 27, 2021 | |
Supplementary Cash Flow Data | ||
Cash paid for interest | $ 118,842 | $ 102,633 |
Cash (refunds) payments for income taxes, net | (6,805) | 3,521 |
Equipment financed under capital leases | 2,383 | 1,698 |
Gross borrowings from revolver | 2,597,000 | 4,191,000 |
Gross repayments to revolver | 1,956,000 | 3,891,000 |
Significant components of cash provided by Other Liabilities | ||
Other liabilities | $ 9,537 | $ 219,390 |