Rite Aid Corporation (NYSE:RAD) Q3 2019 Earnings Conference Call - Final Transcript
Dec 19, 2018 • 05:00 pm ET
Good afternoon. My name is Mike and I will be your conference operator today. At this time, I would like to welcome everyone to the Rite Aid Fiscal 2019 Third Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. (Operator Instructions)
I will now turn the call over to Matt Schroeder, CAO. You may begin your conference.
Thank you, Mike. Good afternoon, everyone. We welcome you to our third quarter earnings conference call. On the call with me today are John Standley, our CEO; Kermit Crawford, our President and COO; and Darren Karst, our CF and Chief Administrative Officer. On today's call, John and Kermit will provide an update on the business, Darren will provide an update on our third quarter results and then we will take questions.
As we mentioned in our release, we are providing slides related to the material we will be discussing today. These slides are provided on our website, www.riteaid.com, under the IR information tab. We'll not be referring to them in our remarks, but hope you'll find them helpful as they summarize some of the key points made on the call.
(Forward-Looking Cautionary Statements)
Also, we will be using certain non-GAAP measures in our release and in the accompanying slides. The definition of the non-GAAP measures, along with the reconciliation to their related GAAP measure are described in our press release and slides.
I'd now like to turn it over to John.
Thanks, Matt and thanks to everyone for joining us on the call today. Our third quarter results show that we're making critical progress in growing our retail and pharmacy benefits management businesses. Like last quarter, this growth is important because it validates that key elements of our strategy are gaining traction.
Today, we announced an important news that will fully support the growth of our retail pharmacy business. After a careful and comprehensive review of our drug purchasing options, today we announced that we've agreed to key terms of an amendment to our drug purchasing agreement with McKesson, which will continue our relationship for an additional 10 years. Under these terms, McKesson will continue to source all of Rite Aid's branded and generic pharmaceuticals and provide direct-to-store delivery to all of our pharmacies through March of 2029.
Securing the ability to purchase prescription drugs at a competitive price has been an important strategic objective and accordingly we undertook a rigorous review of our options. Based upon this review, we believe that extending our contract with McKesson provides our company with the most favorable terms that we can achieve in the marketplace.
McKesson has been a valued partner of Rite Aid for more 20 years and we're pleased that these new terms will continue our partnership, while helping to ensure we have a competitively priced supplied drugs and industry-leading delivery capabilities to provide the highest levels of service to Rite Aid stores and customers. This extension represents a