We are a healthcare company with a retail presence, providing our customers and communities with a high level of care and service through various programs that we offer in our two reportable lines of business, our Retail pharmacy segment and our Pharmacy Services segment. We achieve our goal of providing comprehensive care to our customers through our retail pharmacies and our PBM, Elixir. We also offer fully integrated mail order and specialty pharmacy services through Elixir Pharmacy. In addition, through Elixir Insurance (“EI”), Elixir also serves one of the fastest growing demographic groups in healthcare: Seniors enrolled in Medicare Part D. When combined with our retail platform, this suite complements service enables us to deliver value and choice to clients, patients and payers and enables us to compete in the ever-changing healthcare marketplace.
Retail Pharmacy Segment
Our Retail pharmacy The segment sells branded and generic prescription drugs and various other pharmaceutical services, as well as an assortment of commodities including health and beauty products, personal care products, seasonal merchandise and a wide range. of private label products. Our Retail pharmacy The segment generates the majority of its revenue through the sale of prescription drugs and basic products through our more than 2,500 retail pharmacies in 17 states. We re-stock our retail stores through a combination of direct-to-store pharmaceutical delivery facilitated by our pharmaceutical purchase and delivery agreement with McKesson, and the majority of our front-end products through our distribution center network.
Pharmacy Services Segment
Our Pharmacy Services segment provides a fully integrated suite of PBM offerings, including technology solutions, mail delivery services, specialty pharmacies, network and discount administration, claims processing and pharmacy discount programs. . Elixir also offers prescription rebate programs and Medicare Part D insurance offerings for individuals and groups. Elixir provides services to a variety of clients across its various lines of business, including major healthcare plans, commercial employers, worker groups, and state and local governments, accounting for approximately 3.2 million lives covered, of which approximately 1 million lives covered by our Medicare Part D insurance offerings. Elixir continues to focus its efforts and offerings on its target market of small and medium employers, unions and regional health plans, including managed health plans by providers and government sponsored Medicaid and Medicare plans.
Starting in fiscal 2019, we launched a series of restructuring plans aimed at reorganizing our management team, reducing management levels and consolidating roles. In March 2020, we announced the details of our RxEvolution strategy, which includes creating tools to work with regional health plans to improve patient health outcomes, streamlining SKUs in our front-end offering to free up funds from rolling and updating our merchandise assortment, evaluating our pricing and promotions strategy, rebranding our retail pharmacy and pharmacy services business, launching our Store of the Future format and reducing overhead and headcount , including the integration of certain back-office functions in the pharmacy services segment both within the segment and through Rite Help. Other strategic initiatives include expanding our digital business, moving to a common customer platform at Elixir, and investing in sales and underwriting talent at Elixir.
These and future restructuring activities are expected to yield future benefits in terms of growth and expenditure efficiency. There can be no assurance that our current and future restructuring charges will result in the cost savings and remarketing benefits in the amounts or on time anticipated.
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Asset Sale to WBA
At September 18, 2017, we entered into the Amended and Restated Asset Purchase Agreement with Walgreens Boots Alliance, Inc. (“WBA”) and Walgreen Co., a
Illinois company and wholly-owned subsidiary of WBA (“Buyer”), in which Buyer purchased from Rite Help 1,932 stores, three distribution centers, related inventory and other specified assets and liabilities for a total purchase price of $ 4,375,000, on a cashless and debt free basis.
During the first quarter of fiscal 2021, we completed the sale of the final distribution center and related assets to WBA for proceeds of $ 94,289. The impact of the sale of the distribution center and related assets resulted in a pre-tax gain of $ 12,690, which was included in operating results and cash flows from discontinued operations during the thirteen week period ended May 30, 2020. The transfer of the final distribution center and related assets constitutes the final closing under the Amended and Restated Asset Purchase Agreement.
As part of the asset sale, we have agreed to provide transition services to the buyer. Pursuant to the Transition Services Agreement (“TSA”), we have provided various services on behalf of WBA, including, but not limited to, the purchase and distribution of inventory and substantially all sales activities, general and administrative. As part of these services, we purchased the related inventory and incurred cash payments for sales, general and administrative activities, which we billed on a cash neutral basis to WBA in accordance with the terms described in the TSA. Total billing for these items during the completed thirteen week periods May 29, 2021 and May 30, 2020 have been $ 0 and $ 31,005, respectively, of which $ 0 and $ 4,398 is included in accounts receivable, net. We have recorded a WBA TSA fee of $ 0 and $ 1,080 during the completed thirteen week periods
May 29, 2021 and May 30, 2020, respectively, which are reflected as a reduction in selling, general and administrative expenses. In conjunction with the transfer of the final distribution center during the closed quarter May 30, 2020, we have practically fulfilled our obligations under the TSA.
Given its scale and the fact that we have withdrawn from certain markets, the sale represented a significant strategic shift which had a significant impact on our operations and financial results. Therefore, we have applied the treatment of discontinued operations as required by GAAP.
Overview of the financial results of continuing operations
Our net loss from continuing operations for the thirteen-week period ended May 29, 2021 has been $ 13.1 million or $ 0.24 per basic and diluted share compared to a net loss of $ 72.7 million or $ 1.36 per basic and diluted share for the thirteen-week period ended May 30, 2020. The improvement in net loss for the thirteen week period ended May 29, 2021 mainly due to improved operating results Retail pharmacy sector, higher intangible asset impairment charges in the first quarter of last year and lower restructuring costs due to last year’s rebranding initiatives. These benefits were partially offset by litigation settlements in the current quarter, lower LIFO credit and increased tax expense.
Our Adjusted EBITDA from continuing operations for the thirteen-week period ended May 29, 2021 has been $ 138.9 million or 2.3% of turnover, against $ 107.4 million or 1.8% of earnings, for the thirteen week period ended May 30, 2020. Improved adjusted EBITDA for the thirteen-week period ended May 29, 2021 is explained by an increase in EBITDA adjusted to Retail pharmacy segment. Adjusted EBITDA up $ 31.9 million in the Retail pharmacy mainly due to an increase in gross margin resulting from higher same store sales in drugstores, partially offset by pressures on pharmacy reimbursement rates which were not fully offset by reductions in drug costs generics and a drop in initial gross margin as we cycled the impact of the previous surge in COVID-19 purchases of the year. Pharmacy Services adjusted EBITDA remained stable compared to the previous year. Please see the sections entitled “Segment Analysis” and “Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Other Non-GAAP Measures below for more details.
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