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fred’s PHARMACY REPORTS FIRST QUARTER 2017 RESULTS

Executing the Fred’s Pharmacy transformation; Total Pharmacy sales comp increased 3.3%, driven by a record sales quarter in Specialty Pharmacy

Retail Pharmacy script comps increased 30 basis points

Generic Dispensing Rate increased 100 basis points year-over-year to 89.6%

Working collaboratively with Walgreens, Rite Aid and the FTC to obtain approval for acquisition of Rite Aid stores, which would make Fred’s Pharmacy the third largest drugstore chain in the nation

MEMPHIS, Tenn. – June 6, 2017—Fred’s Inc. (NASDAQ: FRED) today reported financial results for the first quarter ended April 29, 2017.

Commenting on today’s results, Michael K. Bloom, Chief Executive Officer, said, “In the first quarter of fiscal year 2017, we continued executing the Fred’s Pharmacy healthcare transformation, a clear point of differentiation in our markets, which resulted in positive script comps in Retail Pharmacy and record sales and year-over-year growth in Specialty Pharmacy. Our strong performance in Total Pharmacy was the primary driver for sequential improvement in our operating performance excluding non-operating items. With the right leadership team in place, we continue to enhance our talent, invest in technology, expand the Specialty salesforce and diversify the Specialty portfolio. We also continue to improve the pharmacist-patient relationship, which is reflected in our positive script comps in the Retail Pharmacy. Both our Retail and Specialty Pharmacy businesses are rapidly improving and driving momentum. In the Front Store, our remodel program, which will be accelerated in the back half of 2017, is already improving the customer experience and driving sales. Notably, the comp sales of our remodeled stores with our new prototype are performing approximately 4.0% better than the chain average through April.”

Mr. Bloom continued, “Looking ahead, we are focused on executing our key objectives for 2017, including diversifying and optimizing our assets to improve performance and cash flow. In large part we are on track with the Fred’s 2017 plan, and doing exactly what we said we would do to optimize Fred’s Pharmacy’s business model and enhance value for our shareholders. We anticipate continued sequential operational improvement excluding non-operating items throughout 2017 as the initiatives underway continue to take hold, and we expect to be profitable on an operational basis by the end of 2017.”

For the first quarter ended April 29, 2017, Fred’s recorded a net loss of approximately $36.5 million or $0.98 per share, which included the following charges totaling $45.0 million, or $0.92 per share after tax:

• $14.6 million or $0.39 per share after tax for a valuation allowance against the Company’s deferred tax asset resulting from the pretax loss created primarily by the following charges in the first quarter;
• $16.9 million or $0.29 per share after tax for professional and legal advisory fees incurred in connection with the proposed acquisition of Rite Aid stores, the development and implementation of the Company’s growth strategy and other professional and legal advisory fees; and
• $13.5 million or $0.24 per share after tax for lease liability impairments and other expenses pertaining to the closing of 39 underperforming stores.

Fred’s first quarter loss compares to net income of $1.3 million or $0.03 per share for the first quarter of 2016.

Net sales for the first quarter were $532.3 million, down 3.1% from $549.5 million in the same period last year. Comparable store sales for the first quarter declined 1.2% versus an increase of 1.0% in the first quarter last year. Comparable store sales in the first quarter of 2017 included a negative 1.4% impact as a result of the sale of low productive discontinued inventory versus the first quarter of 2016.

Gross profit for the first quarter of 2017 decreased to $132.9 million from $141.3 million in the prior-year period, primarily explained by a decrease in sales resulting from the closure of 39 underperforming stores. Gross profit margin for the quarter decreased 70 basis points to 25.0% from 25.7% in the same quarter last year. Gross margin rate decrease was driven by markdowns recorded during going out of business sales for underperforming stores closed in 2017.

Fred’s recorded LIFO reductions of $1.0 million in the first quarter of 2017 compared with increases of $0.9 million in the same quarter last year.

Selling, general and administrative expenses for the quarter, including depreciation and amortization, increased to 31.4% of sales from 25.3% of sales in the prior-year quarter. Much of the increase in expenses was attributable to professional and legal advisory fees incurred in connection with the proposed acquisition of Rite Aid stores and the development and implementation of the Company’s growth strategy.

For the first quarter of 2017, operating income, which is equivalent to earnings before interest and taxes, or EBIT, a non-GAAP financial measure, decreased to a loss of $34.2 million or 6.4% of sales compared with operating income of $2.4 million in the same quarter last year.

In the first quarter of 2017, EBITDA, a non-GAAP financial measure that further excludes depreciation and amortization from EBIT, declined to a loss of $22.6 million. First quarter EBITDA included charges totaling $30.4 million, including:

• $16.9 million for professional and legal advisory fees incurred in connection with the proposed acquisition of Rite Aid stores, the development and implementation of the Company’s growth strategy and other professional and legal advisory fees; and
• $13.5 million for lease liability impairments and other expenses pertaining to the closing of 39 underperforming stores.

Webcast Information

A public, listen-only simulcast and replay of Fred’s first quarter 2017 conference call may be accessed at the Company’s web site. The simulcast will begin at 8:00 a.m. Eastern Time today; a replay of the call will be available beginning two hours after the conclusion of the live call and will remain available through July 6, 2017.

Non-GAAP Financial Measures

The Company’s management believes that the disclosure of operating income (EBIT) and EBITDA provides useful information to investors because the measures present an alternative and more relevant method for measuring the Company’s results of operations and financial condition, and, when viewed together with the Company’s GAAP results and the accompanying reconciliations, provides a more complete understanding of the factors and trends affecting the Company than the GAAP results alone. Additionally, EBITDA is a common alternative measure of financial performance used by investors, financial analysts, and rating agencies. These groups use EBITDA, along with other measures, to estimate the value of a company and to compare the operating performance of a company to others in its industry. A reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measure appears in the financial tables attached to this news release.

Forward Looking Statements

Comments in this news release that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. A reader can identify forward-looking statements because they are not limited to historical facts or they use such words as “outlook,” “guidance,” “may,” “should,” “could,” “believe,” “anticipate,” “plan,” “expect,” “estimate,” “forecast,” “goal,” “intend,” “committed,” “continue,” or “will likely result” and similar expressions that concern the Company’s strategy, plans, intentions or beliefs about future occurrences or results. These risks and uncertainties include, but are not limited to, those associated with the Company’s announced strategic plan, the success of announced acquisition activities and future growth trends in businesses acquired; general economic trends; risks related to the possibility that the transactions may not close, including because one or more closing conditions to the transactions, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transactions, or may require conditions, limitations or restrictions in connection with such approvals; the risk that the businesses and acquired stores, as applicable, will not be integrated successfully; the risk of litigation and/or regulatory actions related to the proposed transaction; changes in consumer demand or purchase patterns; delays or interruptions in the flow of merchandise between the Company’s distribution centers and its stores or between the Company’s suppliers and same; a disruption in the Company’s data processing services; cyber-security threats; costs and delays in acquiring or developing new store sites; and the factors listed under “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and any subsequent quarterly filings on Form 10-Q filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date made. The Company undertakes no obligation to release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.

About Fred’s Pharmacy

Tracing its history back to an original store in Coldwater, Mississippi, opened in 1947, today Fred’s Pharmacy is headquartered in Memphis, Tennessee, and operates 601 pharmacy and general merchandise stores, including 14 franchised Fred’s Pharmacy locations, and three specialty pharmacy-only locations. With a unique store format and strategy that combines the best elements of a healthcare-focused drug store with a value-focused retailer, Fred’s Pharmacy stores offer more than 12,000 frequently purchased items that address the healthcare and everyday needs of its customers and patients. This includes nationally recognized brands, proprietary Fred’s Pharmacy label products, and a full range of value-priced selections. The company has two distribution centers, one in Memphis, Tennessee, and Dublin, Georgia.

On December 20, 2016, the Company announced that it signed an agreement with Walgreens Boots Alliance, Inc. and Rite Aid to purchase 865 stores for $950 million in cash. Fred’s Pharmacy is working collaboratively with Walgreens Boots Alliance, Rite Aid and the Federal Trade Commission (“FTC”) to help obtain the FTC’s approval of Walgreen Boots Alliance’s pending acquisition of Rite Aid and the divestiture of certain Rite Aid assets to Fred’s Pharmacy. Fred’s Pharmacy remains committed to purchasing additional assets, including up to 1,200 Rite Aid stores, to the extent necessary to obtain the FTC’s approval of the transaction. Completion of the transaction is subject to approval by the FTC, as well as other customary regulatory approvals and closing conditions.

The proposed acquisition of the stores, which are based in highly attractive markets, is a transformative event that will add substantial scale to the Company and transform Fred’s Pharmacy, the largest regional pharmacy player, into an even stronger competitor and the third-largest drugstore chain in the nation. The transaction will accelerate the Company’s healthcare growth strategy, generating considerable benefits for our customers, patients, payors, supplier partners, team members and shareholders.

For more information about the Company, visit Fred’s website at www.fredsinc.com.

Contacts
Fred’s Pharmacy
Rick Hans, 901-238-2232
Executive Vice President, Chief Financial Officer and Secretary
or
Joele Frank, Wilkinson Brimmer Katcher
Ed Trissel / Steve Frankel / Dan Moore
212-355-4449

chart read more

fred’s Pharmacy Reports May Sales

Fred’s Pharmacy Reports May Sales
Executing our transformation strategy
Comparable store sales increased 0.8%

MEMPHIS, Tenn. (June 1, 2017) – Fred’s, Inc. (“Fred’s Pharmacy” or the “Company”) (NASDAQ:FRED) today reported sales for the four-week fiscal month of May, which ended May 27, 2017.

Fred’s total sales for the month decreased 3.1% year-over-year to $160.1 million from $165.2 million in May 2016. The decrease in sales is related to the closure of 39 underperforming stores in the first quarter. Total comparable store sales for the month increased 0.8% compared with a 0.4% decrease in comparable sales in the prior year period. Comparable store sales for May included a negative 1.0% impact as a result of the sale of low productive discontinued inventory versus May of last year.

Commenting on the announcement, Michael K. Bloom, Chief Executive Officer, said, “This month we continued to deliver on our 2017 goals and execute our healthcare transformation. We are pleased with our performance in the month, with total comparable store sales for May increasing 0.8% compared with the prior year. We are seeing substantial momentum in our Retail and Specialty pharmacy businesses, creating opportunities for growth throughout the Company. In Retail Pharmacy, adjusted script comps are continuing to trend positively, while in the Specialty Pharmacy business we are consistently experiencing significant sales growth. We are confident in the ability of our leadership team and the entire Fred’s Pharmacy team to drive further operational improvement as we continue to build on the foundation we’ve laid for future growth and success.”

About Fred’s Pharmacy
Tracing its history back to an original store in Coldwater, Mississippi, opened in 1947, today Fred’s Pharmacy is headquartered in Memphis, Tennessee, and operates 601 pharmacy and general merchandise stores, including 14 franchised Fred’s Pharmacy locations, and three specialty pharmacy-only locations. With a unique store format and strategy that combines the best elements of a healthcare-focused drug store with a value-focused retailer, Fred’s Pharmacy stores offer more than 12,000 frequently purchased items that address the healthcare and everyday needs of its customers and patients. This includes nationally recognized brands, proprietary Fred’s Pharmacy label products, and a full range of value-priced selections. The Company has two distribution centers, one in Memphis, Tennessee, and Dublin, Georgia.

On December 20, 2016, the Company announced that it signed an agreement with Walgreens Boots Alliance, Inc. and Rite Aid to purchase 865 stores for $950 million in cash. Fred’s Pharmacy is working collaboratively with Walgreens Boots Alliance, Rite Aid and the Federal Trade Commission (“FTC”) to help obtain the FTC’s approval of Walgreens Boots Alliance’s pending acquisition of Rite Aid and the divestiture of certain Rite Aid assets to Fred’s Pharmacy. Fred’s Pharmacy remains committed to purchasing additional assets, including up to 1,200 Rite Aid stores, to the extent necessary to obtain the FTC’s approval of the transaction. Completion of the transaction is subject to approval by the FTC, as well as other customary regulatory approvals and closing conditions.

The proposed acquisition of the stores, which are based in highly attractive markets, is a transformative event that will add substantial scale to the Company and transform Fred’s Pharmacy, the largest regional pharmacy player, into an even stronger competitor and the third-largest drugstore chain in the nation. The transaction will accelerate the Company’s healthcare growth strategy, generating considerable benefits for our customers, patients, payors, supplier partners, team members and shareholders.

For more information about the Company, visit Fred’s website at www.fredsinc.com.

Forward-Looking Statements
Comments in this news release that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. The words “outlook”, “guidance”, “may”, “should”, “could”, “believe”,
“anticipate”, “project”, “plan”, “expect”, “estimate”, “objective”, “forecast”, “goal”, “intend”, “will likely result”, or “will continue” and similar expressions generally identify forward-looking statements. All forward-looking statements are inherently uncertain, and concern matters that involve risks and other factors that may cause the actual performance of the Company to differ materially from the performance expressed or implied by these statements. Therefore, forward-looking statements should be evaluated in the context of these uncertainties and risks, including but not limited to the competitive nature of the industries in which we operate; the implementation of our strategic plan, and its impact on our sales, costs and operations; utilizing our existing and new stores and increasing our pharmacy department presence in new and existing stores; our reliance on a single supplier of pharmaceutical products; our pharmaceutical drug pricing; reimbursement rates and the terms of our agreements with pharmacy benefit management companies; our private brands; the seasonality of our business and the impact of adverse weather conditions; operational difficulties; merchandise supply and pricing; consumer demand and product mix; delayed openings and operating new stores and distribution facilities; our employees; risks relating to payment processing; our computer system, and the processes supported by our information technology infrastructure; our ability to protect the person information of our customers and employees; cyber-attacks; changes in governmental regulations; the outcome of legal proceedings, including claims of product liability; insurance costs; tax assessments and unclaimed property audits; current economic conditions; changes in third-party reimbursements; the terms of our existing and future indebtedness; our acquisitions and the ability to effectively integrate businesses that we acquire, including risks related to the possibility that transactions may not close, including because one or more closing conditions to such transactions, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of such transactions, or may require conditions, limitations or restrictions in connection with such approvals; the risk that the businesses and acquired stores, as applicable, will not be integrated successfully; the risk of litigation and/or regulatory actions related to such proposed transaction; our ability to pay dividends; and the factors listed under “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and any subsequent filings with the Securities and Exchange Commission.

Forward-looking statements speak only as of the date made. Consequently, all forward-looking statements are qualified by this cautionary statement. Readers should not place undue reliance on any forward-looking statements. Fred’s undertakes no obligation to release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.

Contacts
Fred’s Pharmacy
Rick Hans, 901-238-2232
Executive Vice President, Chief Financial Officer and Secretary
or
Joele Frank , Wilkinson Brimmer Katcher
Ed Trissel / Steve Frankel / Dan Moore, 212-355-4449  read more

fred’s Pharmacy Declares Quarterly Cash Dividend of $0.06 Per Share

Fred’s Pharmacy Declares Quarterly Cash Dividend of $0.06 Per Share

MEMPHIS, Tenn.– Fred’s, Inc. (NASDAQ:FRED) today announced that its Board of Directors has declared a quarterly cash dividend of $0.06 per share. The dividend is payable on June 15, 2017, to shareholders of record as of June 1, 2017.

About Fred’s Pharmacy

Tracing its history back to an original store in Coldwater, Mississippi, opened in 1947, today Fred’s Pharmacy is headquartered in Memphis, Tennessee, and operates 601 pharmacy and general merchandise stores and three specialty pharmacy-only locations, including 14 franchised Fred’s Pharmacy locations. With a unique store format and strategy that combines the best elements of a healthcare-focused drug store with a value-focused retailer, Fred’s Pharmacy stores offer more than 12,000 frequently purchased items that address the healthcare and everyday needs of its customers and patients. This includes nationally recognized brands, proprietary Fred’s Pharmacy label products, and a full range of value-priced selections. The company has two distribution centers, one in Memphis, Tennessee, and Dublin, Georgia.

On December 20, 2016, Fred’s Pharmacy announced that it signed an agreement with Walgreens Boots Alliance, Inc. (NASDAQ:WBA) and Rite Aid Corporation (NYSE:RAD) to purchase 865 stores and certain assets related to store operations located across the eastern and western United States for $950 million in cash. Closing of the transaction is conditioned on the completion of Walgreens Boots Alliance’s proposed acquisition of Rite Aid, approval by the Federal Trade Commission, as well as customary regulatory approvals and closing conditions.

For more information about the Company, visit Fred’s website at www.fredsinc.com.

CONTACT:

Fred’s, Inc.
Rick Hans, 901-238-2232
Executive Vice President,
Chief Financial Officer and Secretary  read more

fred’s PHARMACY SCHEDULES FIRST QUARTER 2017 EARNINGS ANNOUNCEMENT AND CONFERENCE CALL WEBCAST FOR JUNE 6, 2017

FRED’S PHARMACY SCHEDULES FIRST QUARTER 2017 EARNINGS ANNOUNCEMENT AND CONFERENCE CALL WEBCAST FOR JUNE 6, 2017

MEMPHIS, Tenn. – May 19, 2017 – Fred’s Inc. (NASDAQ: FRED) today announced that its first quarter 2017 results will be issued on the morning of Tuesday, June 6, 2017.

Fred’s Pharmacy will host a conference call/webcast at 8:00 a.m. Eastern Time on Tuesday, June 6, 2017, to discuss the Company’s first quarter 2017 results. The webcast will be available live and as an archived replay through the Company’s website at www.fredsinc.com. The archived replay will be available beginning two hours after the conclusion of the live call and will remain available through August 6, 2017.

About Fred’s Pharmacy

Tracing its history back to an original store in Coldwater, Mississippi, opened in 1947, today Fred’s Pharmacy is headquartered in Memphis, Tennessee, and operates 601 pharmacy and general merchandise stores and three specialty pharmacy-only locations, including 14 franchised Fred’s Pharmacy locations. With a unique store format and strategy that combines the best elements of a healthcare-focused drug store with a value-focused retailer, Fred’s Pharmacy stores offer more than 12,000 frequently purchased items that address the healthcare and everyday needs of its customers and patients. This includes nationally recognized brands, proprietary Fred’s Pharmacy label products, and a full range of value-priced selections. The company has two distribution centers, one in Memphis, Tennessee, and Dublin, Georgia.

On December 20, 2016, Fred’s Pharmacy announced that it signed an agreement with Walgreens Boots Alliance, Inc. (NASDAQ: WBA) and Rite Aid Corporation (NYSE: RAD) to purchase 865 stores and certain assets related to store operations located across the eastern and western United States for $950 million in cash. Closing of the transaction is conditioned on the completion of Walgreens Boots Alliance’s proposed acquisition of Rite Aid, approval by the Federal Trade Commission, as well as customary regulatory approvals and closing conditions.

Contact: Rick Hans
Executive Vice President,
Chief Financial Officer and Secretary
(901) 238-2232

For more information about the Company, visit Fred’s website at www.fredsinc.com. read more

fred’s Pharmacy Reports April Sales

Fred’s Pharmacy Reports April Sales

April Comparable Store Sales Increased 1.2%

Healthcare Transformation on Track

MEMPHIS, Tenn.–(BUSINESS WIRE)–Fred’s, Inc. (“Fred’s Pharmacy” or the “Company”) (NASDAQ:FRED) today reported sales for the four-week fiscal month of April and the first quarter of fiscal 2017, which ended April 29, 2017.

Fred’s total sales for the month decreased 3.0% year-over-year to $159.1 million from $163.9 million in April 2016. Total comparable store sales for the month increased 1.2% compared with a 0.3% increase in comparable sales in the prior year period. Comparable store sales for April included a negative 1.0% impact as a result of the sale of low productive discontinued inventory versus April of last year. The April 2017 comparable store sales reflected double digit growth for Easter seasonal categories, which was the result of the shift of the Easter holiday from March 27 last year to April 16 this year.

Fred’s total sales for the first quarter of fiscal 2017 decreased 3.0% to $532.9 million compared with $549.5 million for the same period last year. The Company closed 39 underperforming stores in the quarter. On a comparable store basis, year-to-date sales decreased 1.2% versus an increase of 1.0% for the year-earlier period. Comparable store sales for the quarter included a negative 1.4% impact as a result of the sale of low productive discontinued inventory versus the same quarter last year.

Commenting on the announcement, Michael K. Bloom, Chief Executive Officer, said, “The Fred’s Pharmacy healthcare transformation is well under way as we continue to experience sequential sales improvement. The initiatives we began implementing in 2016 and early 2017 are taking hold and laying the foundation for continued success. We have created substantial momentum in our Pharmacy businesses as we make the strategic shift to focus on healthcare, with Specialty Pharmacy sales growing double digits and driving our consolidated pharmacy comparable sales. In Retail Pharmacy, we are seeing sequential growth in adjusted script comps, while our generic dispensing rate has increased as we continue our focus on more profitable scripts. We remain confident in the Fred’s Pharmacy plan to improve our performance, and are already realizing the benefits of our comprehensive strategy and talented management team.”

About Fred’s Pharmacy

Tracing its history back to an original store in Coldwater, Mississippi, opened in 1947, today Fred’s Pharmacy is headquartered in Memphis, Tennessee, and operates 601 pharmacy and general merchandise stores and three specialty pharmacy-only locations, including 14 franchised Fred’s Pharmacy locations. With a unique store format and strategy that combines the best elements of a healthcare-focused drug store with a value-focused retailer, Fred’s Pharmacy stores offer more than 12,000 frequently purchased items that address the healthcare and everyday needs of its customers and patients. This includes nationally recognized brands, proprietary Fred’s Pharmacy label products, and a full range of value-priced selections. The company has two distribution centers, one in Memphis, Tennessee, and Dublin, Georgia.

On December 20, 2016, Fred’s Pharmacy announced that it signed an agreement with Walgreens Boots Alliance, Inc. (NASDAQ: WBA) and Rite Aid Corporation (NYSE: RAD) to purchase 865 stores and certain assets related to store operations located across the eastern and western United States for $950 million in cash. Closing of the transaction is conditioned on the completion of Walgreens Boots Alliance’s proposed acquisition of Rite Aid, approval by the Federal Trade Commission, as well as customary regulatory approvals and closing conditions.

For more information about the Company, visit Fred’s website at www.fredsinc.com.

Forward-Looking Statements

Comments in this news release that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. The words “outlook”, “guidance”, “may”, “should”, “could”, “believe”, “anticipate”, “project”, “plan”, “expect”, “estimate”, “objective”, “forecast”, “goal”, “intend”, “will likely result”, or “will continue” and similar expressions generally identify forward-looking statements. All forward-looking statements are inherently uncertain, and concern matters that involve risks and other factors that may cause the actual performance of the Company to differ materially from the performance expressed or implied by these statements. Therefore, forward-looking statements should be evaluated in the context of these uncertainties and risks, including but not limited to the competitive nature of the industries in which we operate; the implementation of our strategic plan, and its impact on our sales, costs and operations; utilizing our existing and new stores and increasing our pharmacy department presence in new and existing stores; our reliance on a single supplier of pharmaceutical products; our pharmaceutical drug pricing; reimbursement rates and the terms of our agreements with pharmacy benefit management companies; our private brands; the seasonality of our business and the impact of adverse weather conditions; operational difficulties; merchandise supply and pricing; consumer demand and product mix; delayed openings and operating new stores and distribution facilities; our employees; risks relating to payment processing; our computer system, and the processes supported by our information technology infrastructure; our ability to protect the person information of our customers and employees; cyber-attacks; changes in governmental regulations; the outcome of legal proceedings, including claims of product liability; insurance costs; tax assessments and unclaimed property audits; current economic conditions; changes in third-party reimbursements; the terms of our existing and future indebtedness; our acquisitions and the ability to effectively integrate businesses that we acquire, including risks related to the possibility that transactions may not close, including because one or more closing conditions to such transactions, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of such transactions, or may require conditions, limitations or restrictions in connection with such approvals; the risk that the businesses and acquired stores, as applicable, will not be integrated successfully; the risk of litigation and/or regulatory actions related to such proposed transaction; our ability to pay dividends; and the factors listed under “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and any subsequent filings with the Securities and Exchange Commission.

Forward-looking statements speak only as of the date made. Consequently, all forward-looking statements are qualified by this cautionary statement. Readers should not place undue reliance on any forward-looking statements. Fred’s undertakes no obligation to release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.

Contacts

Fred’s Pharmacy
Rick Hans, 901-238-2232
Executive Vice President, Chief Financial Officer and Secretary
or
Joele Frank , Wilkinson Brimmer Katcher
Ed Trissel / Steve Frankel / Dan Moore, 212-355-4449 read more

fred’s Pharmacy Appoints Two New Independent Directors

Fred’s Pharmacy Appoints Two New Independent Directors

Announces Cooperation Agreement with Alden Global Capital, Fred’s Largest Shareholder

Fred’s Leadership Team Is Poised to Continue Transforming Company and Maximizing Free Cash Flow Per Share

MEMPHIS, Tenn.—April 24, 2017–Fred’s, Inc. (“Fred’s Pharmacy” or the “Company”) (NASDAQ:FRED) today announced that it has appointed Steven B. Rossi, Chief Executive Officer of Digital First Media, and Timothy A. Barton, former CEO of Freightquote.com, which he founded in 1998, to its Board of Directors, effective immediately.

Today’s announcement follows the recent additions of Linda Longo-Kazanova, Christopher W. Bodine, Peter J. Bocian and Michael K. Bloom, Chief Executive Officer, to the Fred’s Pharmacy Board. As a result of these announcements, following the conclusion of the 2017 Annual Meeting of Shareholders the newly reconstituted Board will be comprised of 9 directors, 8 of whom are independent and all of whom have track records of delivering shareholder value.

Mr. Rossi and Mr. Barton have been added to the Fred’s Pharmacy Board in connection with a Cooperation Agreement between Alden Global Capital LLC (“Alden”), the Company’s largest shareholder, and Fred’s Pharmacy. The Cooperation Agreement contains terms regarding the parties working together for the long-term success of Fred’s Pharmacy.

“We are excited to welcome Steve and Tim to the Fred’s Pharmacy Board of Directors,” said Thomas H. Tashjian, Chairman of the Board. “They add strong business, financial and operational expertise, and their perspectives will be instrumental as we continue the transformation of Fred’s Pharmacy. This includes moving expeditiously to complete the transaction with Walgreens and Rite Aid, pending approval by the Federal Trade Commission, which would make Fred’s Pharmacy the third largest drugstore chain in the nation. We look forward to continuing to work constructively with Alden and all of our shareholders as we focus on executing our strategic plan and delivering value for all Fred’s Pharmacy stakeholders.”

Mr. Bloom said, “I am thrilled to work with Steve, Tim, Alden and the entire Fred’s Pharmacy Board to capture the numerous value-creating opportunities that lie ahead for the Company. I am confident we have the right team in place to advance our new healthcare-focused strategy and drive returns for our shareholders while delivering on our mission to improve the lives of our patients and customers.”

Heath Freeman, President of Alden, commented, “I am pleased with today’s announcement and expect that Tim and Steve will immediately impact and contribute to the Fred’s Board. I, and the rest of the Alden team, look forward to working with Fred’s as we all continue to support and strengthen Fred’s business. Over the past few months, our team has spent considerable time with the Fred’s Pharmacy team. Having seen first-hand the progress that Mike Bloom and his team have made on the execution of the Company’s healthcare strategy, I have great confidence in the future of the business. With the right focus, Fred’s can generate significant free cash flow per share at the existing business; the pending Rite Aid transaction will provide extraordinary growth to Fred’s business and free cash flow.”

“Fred’s Pharmacy is executing on a transformation plan that is gaining momentum,” said Mr. Rossi. “I look forward to helping Fred’s Pharmacy with its compelling opportunities ahead.”

“I am honored to join the talented individuals on the Fred’s Pharmacy Board,” said Mr. Barton. “With its focused mission and first-class management team, I am confident the Company has a bright future.”

Under the terms of the Cooperation Agreement, Alden is subject to certain customary standstill and other provisions. The complete agreement between Fred’s Pharmacy and Alden will be included as an exhibit to a Current Report on Form 8-K, which will be filed with the Securities and Exchange Commission.

Evercore is serving as financial advisor to Fred’s. Vinson & Elkins LLP and Baker Donelson Bearman Caldwell & Berkowitz P.C. are serving as legal advisors to Fred’s. Olshan Frome Wolosky LLP is serving as Alden’s legal advisor.

Steven B. Rossi
Steve Rossi brings to the Fred’s Pharmacy Board extensive financial and operations experience. Mr. Rossi is the Chief Executive Officer of Digital First Media, which has more than 300 print and digital products serving over 45 million Americans each month. He previously served as the company’s Chief Operating Officer. Prior to joining the company, Mr. Rossi held several successive management positions over 19 years with Knight Ridder Inc., including Chief Financial Officer, Senior Vice President of Operations and President of the Newspaper Division.

Timothy A. Barton
Tim Barton joins the Board with a substantial business and technology background and with experience in growing successful companies. Mr. Barton founded Freightquote in 1998, growing it into the largest online freight shipping provider in the United States with $600 million in annual revenue. Mr. Barton served as Chairman and CEO until the company’s sale to C.H. Robinson Worldwide in 2015. Prior to founding Freightquote.com, Mr. Barton was the Co-Founder and President of UWI Association Programs, which grew into Network Long Distance before being acquired by IXC Communications/Broadwing in 1998.

About Alden Global Capital LLC
Alden is a New York based investment firm focused on deep value, catalyst driven investing.

About Fred’s Pharmacy
Tracing its history back to an original store in Coldwater, Mississippi, opened in 1947, today Fred’s Pharmacy is headquartered in Memphis, Tennessee, and operates 601 pharmacy and general merchandise stores and three specialty pharmacy-only locations, including 14 franchised Fred’s Pharmacy locations. With a unique store format and strategy that combines the best elements of a healthcare-focused drug store with a value-focused retailer, Fred’s Pharmacy stores offer more than 12,000 frequently purchased items that address the healthcare and everyday needs of its customers and patients. This includes nationally recognized brands, proprietary Fred’s Pharmacy label products, and a full range of value-priced selections. The company has two distribution centers, one in Memphis, Tennessee, and Dublin, Georgia.

As previously announced, on December 20, 2016, Fred’s Pharmacy announced that it signed an agreement with Walgreens Boots Alliance, Inc. (NASDAQ: WBA) and Rite Aid Corporation (NYSE: RAD) to purchase 865 stores and certain assets related to store operations located across the eastern and western United States for $950 million in cash. Closing of the transaction is conditioned on the completion of Walgreens Boots Alliance’s proposed acquisition of Rite Aid, approval by the Federal Trade Commission, as well as customary regulatory approvals and closing conditions.

For more information about the Company, visit Fred’s website at www.fredsinc.com.

Forward Looking Statements
Comments in this news release that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. A reader can identify forward-looking statements because they are not limited to historical facts or they use such words as “outlook,” “guidance,” “may,” “should,” “could,” “believe,” “anticipate,” “plan,” “expect,” “estimate,” “forecast,” “goal,” “intend,” “committed,” “continue,” or “will likely result” and similar expressions that concern the Company’s strategy, plans, intentions or beliefs about future occurrences or results. These risks and uncertainties include, but are not limited to, those associated with the Company’s announced strategic plan, the success of announced acquisition activities and future growth trends in businesses acquired; general economic trends; risks related to the possibility that the transactions may not close, including because one or more closing conditions to the transactions, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transactions, or may require conditions, limitations or restrictions in connection with such approvals; the risk that the businesses and acquired stores, as applicable, will not be integrated successfully; the risk of litigation and/or regulatory actions related to the proposed transaction; changes in consumer demand or purchase patterns; delays or interruptions in the flow of merchandise between the Company’s distribution centers and its stores or between the Company’s suppliers and same; a disruption in the Company’s data processing services; cyber-security threats; costs and delays in acquiring or developing new store sites; and the factors listed under “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and any subsequent quarterly filings on Form 10-Q filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date made. The Company undertakes no obligation to release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.

Fred’s Pharmacy
Rick Hans, 901-362-3733, Ext. 2232
Executive Vice President, Chief Financial Officer and Secretary
or
Joele Frank , Wilkinson Brimmer Katcher
Ed Trissel / Steve Frankel / Dan Moore
212-355-4449  read more

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