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To: Jeff Jordan who wrote (23277)	10/12/1999 10:46:00 AM
From: AlienTech	Read Replies (2) \| Respond to of 43080

what the hell happen to RAD? it was at like 13 yesterday. *DJ Goldman Cuts Rite-Aid To Mkt Perform From Recommend List (END) DOW JONES NEWS 10-12-99 10:05 AM =DJ Rite Aid Reports 2Q Loss On Charge, Interest Costs By Philana Patterson This story was originally published late Monday. NEW YORK (Dow Jones)--Rite Aid Corp. (RAD) reported a fiscal second quarter loss resulting from charges related to closed and relocated stores, increased interest costs associated with the cost of financing its acquisition of PCS Health Systems, higher working capital needs as well as weak sales in its larger West Coast stores. The company said the results were preliminary and unaudited. After the market closed Monday, Rite Aid reported a loss of 26 cents a share for the second quarter. Rite Aid didn't provide year-ago figures, saying it would soon restate results from prior periods. First Call/Thomson Financial had put Rite Aid's second quarter earnings at 24 cents a share. In the second quarter of 1998, Rite Aid reported a loss of 31 cents a diluted share. Excluding an extraordinary item of 62 cents a share related to the reserve for closing 320 stores and other charges, the company would have reported earnings of 31 cents a share in the period. In June, results from the second quarter of 1998 were adjusted upward by 2 cents a share for an accounting change. Prior to the report Monday, Rite Aid shares took a beating. The stock fell 2 1/2, or 20%, to 10 on volume of 1.4 million, compared with 3.9 million average daily volume. The stock fell past its previous 52-week low of 11 set Sept. 24. Rite Aid blamed its poor results in the most recent second quarter on a charge of $34 million associated with the closure or relocation of 106 stores in the quarter and an increase of $49 million in interest costs related to financing of the acquisition of pharmacy benefits manager PCS, and higher working capital needs. Poor sales in the company's larger West Coast stores also contributed to the shortfall. Sales of non-pharmacy goods fell 3.5% from a year earlier with a 2% increase from East Coast stores and a 6.2% decline from West Coast stores. Rite Aid has already sold 38 of the West Coast stores and hopes to sell more than 200 additional locations. In addition to selling the stores, Rite Aid is considering the sale of all, or a portion, of PCS, to reduce its debt. Rite Aid is currently in negotiations with lenders to extend to April a $1.3 billion credit revolver which is scheduled to mature on Oct. 29. During an earnings conference call Rite Aid Chairman and Chief Executive Martin Grass said the company expects to have a deal to extend the revolver complete within eight to nine days. By April, the company said it hopes to have its asset sales complete to pay off the revolver. If PCS is sold outright, Grass said the company still expects to get more than the $1.5 billion it paid for it. In fiscal 2000 the unit is expected to have revenue of $985 million, compared with $723 million a year earlier. Rite Aid expects earnings before interest, taxes, depreciation and amortization to rise to $132 million from $119 million a year earlier. In addition to recent staff cuts to reduce costs, Rite Aid is consolidating distribution centers. On the East Coast these efforts are expected to save $12.5 million and $28 million on the West Coast in fiscal 2001. The company also said it would slow its store opening program to about 250 this year and 150 a year in the following two years. Rite Aid has had a number of bumps this year including earnings misses and a lawsuit by the Florida Attorney General which alleges the company overcharged some cash paying customers for prescriptions. Grass reiterated his belief the suit is without merit. Grass said the company could not provide further earnings guidance until its restatement is settled. -By Philana Patterson; 201-938-5360 (END) DOW JONES NEWS 10-12-99 08:15 AM