Rite Aid Corp. (RAD) announced it has commenced a debt refinancing transaction that would extend the maturity of a portion of the company's outstanding indebtedness and lower interest expense. The refinancing transaction consists of a cash tender offer for any and all of Rite Aid's $500 million aggregate principal amount of 7.5% Senior Secured Notes due 2017 with the proceeds from a new $500 million second lien term loan, together with available cash and/or borrowings under Rite Aid's revolving credit facility. The tender offer will expire on July 5.
In connection with the refinancing transaction, Rite Aid provided estimates of its financial results for the first quarter of fiscal 2014. Rite Aid estimates first-quarter net income to be between $75 million and $90 million, and estimates profit per share between $0.08 and $0.09. The company said the improvement in results over prior-year period was largely driven by the continued benefit of new generic introductions on pharmacy gross margin.
Analysts polled by Thomson Reuters expect the company to report first-quarter profit per share of $0.04. Analysts' estimates typically exclude special items.
Based on the estimated results of first quarter of fiscal 2014, the company has updated its fiscal year outlook. Rite Aid has adjusted fiscal 2014 net income guidance to be between $49 million and $189 million, or $0.04 to $0.19 per share. Guidance for sales, same store sales and capital expenditures is unchanged. Analysts expect the company to report fiscal 2014 profit per share of $0.14.
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