Paragon Pharmacies Limited

Paragon Pharmacies Limited

November 30, 2008 22:49 ET

Paragon Pharmacies Announces 12 Month Revenue of $83.718 Million- an Increase of 26.6 Per Cent

KELOWNA, BRITISH COLUMBIA--(Marketwire - Nov. 30, 2008) -

Paragon Pharmacies Limited ("Paragon" or the "Corporation") (TSX VENTURE:PGN) today reported its financial results for the fiscal year ended August 31, 2008.

Revenue was $83.718 million in 2008, an increase of 26.6 per cent or $17.572 million over 2007. The increase was a result of growth in same store revenue and new revenue from the acquisition of one retail pharmacy and three central fill pharmacies during the year.

Total same store revenue was up six per cent (excluding two home healthcare stores), of which pharmacy was up eleven per cent and front store (all non-pharmacy revenue) was flat for the year. During the year, store operations generated $5.878 million in operating income compared to $4.787 million in 2007.

As a public company, Paragon incurred significant costs in fiscal 2008 associated with professional fees, advisory expenses and consulting expenses, including work on internal controls over financial reporting. In addition, the Corporation continued to pursue acquisition targets and incurred various related costs. The net loss for the year was $10.125 million compared to a net loss of $3.575 million in 2007. Of the $10.125 million, $7.527 million is attributable to financing costs related to the convertible debenture issued in May 2007.

During the fourth quarter, the Company experienced a loss of $4.029 million compared to a loss of $2.527 million in the same period in 2007. This was primarily a result of increases over last year in corporate costs, interest and accretion expense related to the convertible debenture, and amortization reflecting the increased capital and intangible assets acquired during the 2008 fiscal year.

"Overall, we considerably strengthened our balance sheet with the execution of the note conversion and share subscription agreement with Canterbury Park," said Lorraine McGrath, President of Paragon. "This transaction has significantly simplified our accounting and provides the necessary capital resources to execute our business plan and position the Company for future growth."

McGrath noted that substantial growth occurred in 2008, including the expansion into the long-term care business with the acquisition of the two central fill operations in British Columbia, the Alentex central fill pharmacy in Winnipeg, Manitoba and the acquisition of an independent retail pharmacy in Teulon, Manitoba. Subsequent to the year end the Company opened its new flagship store - Centuria - and adjacent medical clinic in Kelowna, British Columbia.

McGrath, who became Paragon President earlier this month, said the management team remains committed to building on the legacy of Paragon's founders. "The priority of the new leadership team will be to complete the integration of the new acquisitions, standardize operational processes and finalize the re-branding of acquisitions in order to expand the Paragon Community Pharmacy brand. The company will focus on gross margin improvement through the streamlining of operations, the expansion of its own private label product lines and the further development of its service value proposition for its customers. This renewed focus will allow the company to continue to re-invest in new opportunities and acquisitions, enhancing shareholder value", she said.

The Company's audited consolidated financial statements and Management Discussion and Analysis for the year ended August 31, 2008 are available at the Investor Relations section of the Company's website at, or under the Company's profile on SEDAR at

Paragon is headquartered in Kelowna, British Columbia and currently employs over 500 full and part time staff in its stores and offices. The Corporation owns and operates 18.5 retail pharmacies, 3 central fill locations and 2 home healthcare operations in BC, Alberta, and Manitoba.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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