SEC Comment Letter 0000000000-23-001731 to RITE AID CORP (CIK 0000084129)
RITE AID CORP (CIK 0000084129)
Date: Feb. 21, 2023 · CIK: 0000084129 · Accession: 0000000000-23-001731
AI Filing Summary & Sentiment
File numbers found in text: 001-05742
Letter
United States securities and exchange commission logo February 21, 2023 Steven Bixler Chief Accounting Officer Rite Aid Corporation PO Box 3165 Harrisburg, Pennsylvania 17105 Re:Rite Aid Corporation Form 10-K for Fiscal Year Ended February 26, 2022 Filed April 25, 2022 File No. 001-05742 Dear Steven Bixler: We have reviewed your filing and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response. After reviewing your response to these comments, we may have additional comments. Form 10-K for Fiscal Year Ended February 26, 2022 Management's Discussion and Analysis of Financial Condition and Results of Continuing Operations Pharmacy Service Segment Results of Operations, Revenues , page 58 1.We note “[t]he decrease in the fiscal 2022 revenues was primarily the result of a planned decrease in Elixir Insurance membership and a previously announced client loss due to industry consolidation.” We were not able to obtain an understanding of these events or their impact on your results from your disclosure. Please provide more robust disclosure surrounding these events or indicate where these events are previously disclosed within your document. Reference is made to Item 303 of Regulation S-K.
FirstName LastNameSteven Bixler Comapany NameRite Aid Corporation February 21, 2023 Page 2 FirstName LastName Steven Bixler Rite Aid Corporation February 21, 2023 Page 2 Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Other Non-GAAP Measures, page 70 2.We note in calculating Adjusted EBITDA you excluded facility exit charges. The adjustment appears to remove a normal, recurring, operating expense. Additionally, we note you exclude the change in estimate related to manufacturer rebate receivable which appears to result in an individually tailored recognition and measurement method. Please tell us how these adjustments are appropriate or revise your presentation to omit these adjustments. Refer to Questions 100.01 and 100.04 of the Staff's Compliance and Disclosure Interpretations on Non-GAAP Financial Measures. Our comment also applies to Adjusted Net Income (Loss). 3.In calculating Adjusted net (loss) income you recorded a non-GAAP tax impact that resulted in an effective tax benefit of 27% as compared to a GAAP tax benefit of less than 1%. It is unclear how you calculated the tax impact of the non-GAAP adjustments. Please explain to us how you calculated the tax impact of non-GAAP adjustments and address how your methodology complies with Question 102.11 of the Staff's Compliance and Disclosure Interpretations on Non-GAAP Financial Measures. Notes to Consolidated Financial Statements 21. Segment Reporting, page 147 4.In the Form 8-K filed December 21, 2022, Exhibit 99.1, we note your inclusion of the non-GAAP measures EBITDA Gross Profit and Adjusted EBITDA SG&A at the segment level. In reconciling these measures we note you provide depreciation and amortization and significant noncash items. The guidance in ASC 280-10-50-22 requires disclosure of certain specified amounts if the specified amounts are included in the measure of segment profit or loss reviewed by the chief operating decision maker or are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss. Please explain your consideration of providing this disclosure in your audited financial statements. We remind you that the company and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or absence of action by the staff. You may contact Scott Stringer at 202-551-3272 or Lyn Shenk at 202-551-3380 with any questions. Sincerely, Division of Corporation Finance Office of Trade & Services
Show Raw Text
United States securities and exchange commission logo
February 21, 2023
Steven Bixler
Chief Accounting Officer
Rite Aid Corporation
PO Box 3165
Harrisburg, Pennsylvania 17105
Re:Rite Aid Corporation
Form 10-K for Fiscal Year Ended February 26, 2022
Filed April 25, 2022
File No. 001-05742
Dear Steven Bixler:
We have reviewed your filing and have the following comments. In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.
Please respond to these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
After reviewing your response to these comments, we may have additional comments.
Form 10-K for Fiscal Year Ended February 26, 2022
Management's Discussion and Analysis of Financial Condition and Results of Continuing
Operations
Pharmacy Service Segment Results of Operations, Revenues , page 58
1.We note “[t]he decrease in the fiscal 2022 revenues was primarily the result of a planned
decrease in Elixir Insurance membership and a previously announced client loss due to
industry consolidation.” We were not able to obtain an understanding of these events or
their impact on your results from your disclosure. Please provide more robust disclosure
surrounding these events or indicate where these events are previously disclosed within
your document. Reference is made to Item 303 of Regulation S-K.
FirstName LastNameSteven Bixler
Comapany NameRite Aid Corporation
February 21, 2023 Page 2
FirstName LastName
Steven Bixler
Rite Aid Corporation
February 21, 2023
Page 2
Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share
and Other Non-GAAP Measures, page 70
2.We note in calculating Adjusted EBITDA you excluded facility exit charges. The
adjustment appears to remove a normal, recurring, operating expense. Additionally, we
note you exclude the change in estimate related to manufacturer rebate receivable which
appears to result in an individually tailored recognition and measurement method. Please
tell us how these adjustments are appropriate or revise your presentation to omit these
adjustments. Refer to Questions 100.01 and 100.04 of the Staff's Compliance and
Disclosure Interpretations on Non-GAAP Financial Measures. Our comment also applies
to Adjusted Net Income (Loss).
3.In calculating Adjusted net (loss) income you recorded a non-GAAP tax impact that
resulted in an effective tax benefit of 27% as compared to a GAAP tax benefit of less than
1%. It is unclear how you calculated the tax impact of the non-GAAP adjustments.
Please explain to us how you calculated the tax impact of non-GAAP adjustments and
address how your methodology complies with Question 102.11 of the Staff's Compliance
and Disclosure Interpretations on Non-GAAP Financial Measures.
Notes to Consolidated Financial Statements
21. Segment Reporting, page 147
4.In the Form 8-K filed December 21, 2022, Exhibit 99.1, we note your inclusion of the
non-GAAP measures EBITDA Gross Profit and Adjusted EBITDA SG&A at the segment
level. In reconciling these measures we note you provide depreciation and amortization
and significant noncash items. The guidance in ASC 280-10-50-22 requires disclosure of
certain specified amounts if the specified amounts are included in the measure of segment
profit or loss reviewed by the chief operating decision maker or are otherwise regularly
provided to the chief operating decision maker, even if not included in that measure of
segment profit or loss. Please explain your consideration of providing this disclosure in
your audited financial statements.
We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
You may contact Scott Stringer at 202-551-3272 or Lyn Shenk at 202-551-3380 with any
questions.
Sincerely,
Division of Corporation Finance
Office of Trade & Services