|
Rite Aid backs off forecasts
|
 |
November 10, 1999: 4:06 p.m. ET
Drug retailer asks investors to ignore last month's profitability, cash flow comments
|
NEW YORK (CNNfn) - Rite Aid Corp. advised investors Wednesday to ignore profitability and cash flow forecasts it made last month, adding to the uncertainty already surrounding its troubled balance sheet.
The beleaguered drug store chain also confirmed that federal regulators have requested information concerning the company's plans to wipe out $500 million in earnings from the last three years.
In a shortly-worded statement released Wednesday afternoon, the Camp Hill, Pa.-based company said it had canceled a teleconference with industry analysts and investors scheduled for 5 p.m. EST Wednesday.
Separately, Rite Aid also asked investors "not to rely" on forward-looking profitability and cash flow statements it made during a similar call with analysts last month. Company officials declined to elaborate on that advisory.
Rite Aid officials were due to discuss the company's financial status, which came under intense scrutiny last month when the company warned it would not only fall short of its third-quarter earnings estimates, but would erase $500 million in profits recorded during the last three years.
The restatement was related to what company officials said was a change in accounting practices related to stores it had closed. Martin Grass, Rite Aid's chairman and chief executive officer, resigned a week later.
SEC requesting information
Company officials confirmed Wednesday that the enforcement arm of the U.S. Securities and Exchange Commission has requested information related to that restatement, but as of this point, no official investigation has been launched against the company.
"At the moment, we're not aware of [an investigation], but with the size of the restatement, it would not surprise us," said Karen Rugen, a Rite Aid spokeswoman.
Rugen said the SEC inquiries, first reported by the Baltimore Sun last week, were "not related" to the decision to cancel Wednesday's conference call with investors.
Instead, Rugen said company officials needed additional time to work through the company's first-quarter earnings results, which were reported last week.
"We don't believe those numbers will change materially," she said. "We just didn't have enough color behind those numbers. We needed to look at the company's components some more."
Still, investors remained uneasy. Rite Aid shares fell 2-9/16 to 5-3/8 in late day trading.
|
|
|
|
|
|
Rite Aid Corp.
SEC
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
