CAMP HILL, Pa. — Rite Aid Corp. has changed its corporate governance and recast its board. The company separated the chairman and chief executive officer functions, with director Bruce Bodaken becoming chairman and John Standley remaining CEO. That move, along with the naming of three new independent board members, followed the chain’s failed merger with Albertsons Cos.
“These changes will significantly strengthen and enhance the board’s governance oversight and reflect our commitment to aligning Rite Aid’s interests with those of stockholders,” said Bodaken. “Since terminating the transaction with Albertsons, we have engaged directly with many of our largest stockholders. Based on the valuable insight and input we have received, we are accelerating our effort to refresh the board.”
The three new independent directors — Robert Knowling Jr., Louis Miramontes and Arun Nayar — will be up for election at the 2018 annual shareholders meeting, scheduled for October 30. Knowling, Miramontes and Nayar will replace current directors David Jessick, Myrtle Potter and Frank Savage, who will not be on the ballot.
“We are pleased to welcome Bob, Lou and Arun, and believe their fresh perspectives will be significant assets as we continue to oversee the development and implementation of our strategy to best position Rite Aid to create long-term value for stockholders,” said Bodaken. “These changes are the first steps in reinvigorating our corporate governance practices and policies. Over the coming year, the board will continue to seek stockholder input as we identify new candidates to further refresh the board and consider other corporate governance enhancements.”
Rite Aid announced the management changes along with its release of second quarter earnings. The chain posted earnings for the quarter ended September 1 that were in line with Wall Street’s expectations.
Rite Aid’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) from continuing operations for the quarter was $148.6 million, or 2.7% of revenues. The chain had a net loss from continuing operations of $352.3 million, or 33 cents per share. The adjusted net loss was $7.9 million, or 1 cent per share. Revenues from continuing operations were $5.4 billion, up from $5.3 billion in the year-ago period and slightly surpassing Wall Street’s expectations.
“During the quarter, we have been hard at work accelerating our stand-alone strategy to capitalize on key opportunities to grow our business,” said Standley. “These efforts helped us drive significant improvement in front-end and pharmacy comparable stores sales and exceed our plans for script count growth. With our trusted brand of health and wellness, highly popular customer loyalty program, innovative Wellness format and expanding offering of health and wellness services, we have a strong foundation for growth.
“While we have important work ahead of us, we also have full confidence in our strategy, our team and our company to succeed in building significant momentum for the future as we continue to work to meet the evolving needs of our customers and create value for our shareholders.”