On June 28, drugstore chain Rite Aid (NYSE:RAD) released first-quarter 2008 earnings for the period ended June 2.
- Revenue growth of 2.8% is barely enough to keep up with inflation, but Rite Aid did turn that modest improvement into serious profit gains. The difference is $8.5 million less in store-closing charges and $3.4 million extra juice from asset sales.
- That preferred stock is pretty sweet, with its high-priority dividend payments and 18 votes per share. Too bad you pretty much have to be a company executive to own any of it.
- The new debt is financing for Rite Aid's recent acquisition of the Brooks Eckerd chain of pharmacy and convenience outlets from Canadian pharmacy giant Jean Coutu (Pink Sheets: JCOUF.PK). That deal cost $2.55 billion in a cash-and-stock combination, but closed after the end of the just-reported quarter.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q1 2008 |
Q1 2007 |
Change | |
|---|---|---|---|
|
Sales |
$4,458 |
$4,337 |
2.8% |
|
Net Profit* |
$19.5 |
$3.2 |
516.6% |
|
EPS |
$0.04 |
$0.01 |
300.0% |
|
Diluted Shares |
550.3 |
533.3 |
3.2% |
Get back to basics with the income statement.
Margin Checkup
|
Q1 2008 |
Q1 2007 |
Change* | |
|---|---|---|---|
|
Gross Margin |
27.4% |
27.3% |
0.1 |
|
Operating Margin |
2.1% |
2.3% |
(0.2) |
|
Net Margin |
0.4% |
0.1% |
0.3 |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q1 2008 |
Q1 2007 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$112 |
$111 |
0.5% |
|
Accounts Rec. |
$377 |
$387 |
(2.4%) |
|
Inventory |
$2,317 |
$2,293 |
1.1% |
|
Liabilities |
Q1 2008 |
Q1 2007 |
Change |
|---|---|---|---|
|
Accounts Payable |
$947 |
$842 |
12.5% |
|
Long-Term Debt |
$4,072 |
$2,275 |
79.0% |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q1 2008 |
Q1 2007 |
Change | |
|---|---|---|---|
|
Cash From Ops. |
$186 |
$122 |
52.9% |
|
Capital Expenditures |
$118 |
$71 |
66.6% |
|
Free Cash Flow |
$69 |
$51 |
34.1% |
|
($15) |
$11 |
N/A |
Free cash flow is a Fool's best friend.
Related Foolishness:
Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.
At the time of publication, Anders Bylund had no position in any company mentioned. Fool rules are here.
