Paragon Pharmacies Limited
TSX VENTURE : PGN

Paragon Pharmacies Limited

January 27, 2010 17:23 ET

Paragon Pharmacies Limited Reports Improved First Quarter Results

KELOWNA, BRITISH COLUMBIA--(Marketwire - Jan. 27, 2010) - Paragon Pharmacies Limited ("Paragon" or "the Company") (TSX VENTURE:PGN) today reported its financial results for the first quarter ended November 30, 2009.

Revenue for the three-month period was $20.926 million compared to $21.783 million in the same period last year. This decrease of 3.9% was a result of the decline in comparable front store revenue. As well, pharmacy revenue, which increased slightly over the same period last year, was impacted by reductions in changes to dispensing fees along with the continuing shift to lower priced generic drugs from brand products.

Operating income, as defined, was $2.012 million compared to $1.479 million in the same period last year, an increase of 36.0%. This increase was a result of cost containment initiatives that were implemented during fiscal 2009 which resulted in reduced labour and product distribution expenses.

EBITDA, as defined, was $1.061 million in the first quarter compared to $.303 million in the same period last year, an increase of $0.758 million or 250.2%. The increase in EBITDA was primarily a result of the reduction in operating labour and distribution expenses as well as a reduction in corporate costs over the same period last year.

The net loss for the first quarter was $0.483 million compared to a net loss of $6.558 million in the same period last year. This improvement relates primarily to an increase in operating income together with a reduction in financing costs relating to the convertible debenture. 

During the three month period ended November 30, 2009, Paragon continued its plan to strengthen and expand the Company's operations. In Kelowna, British Columbia, this was evidenced by the opening of a new 1,000 sq. ft. clinical format pharmacy as well as completing renovations and relocating another of its pharmacies to a new 9,000 sq. ft. site. In Alberta, Paragon began the development of a medical clinic adjacent to its Airdrie, Alberta store, purchased a prescription file of an independent pharmacy in Calgary and opened a new Canada Post outlet in another of its Calgary locations.

Denis Taillieu, Chief Executive Officer, said, "The Company continues to make significant strides in improving its overall operational results. Process automation, enhanced technological capabilities, improved reporting systems and an experienced, results-driven management team will continue to move the Company forward. But most importantly, Paragon understands and meets the needs of its many customers with superior service, knowledge, professionalism, care and compassion as it reaches its goal of being the premier mid-market community-based pharmacy."

Martin Weinberg, Chairman of the Board of Directors, noted that the Company has made considerable progress over the past year and now needs to focus on strengthening its brand positioning, merchandising and marketing to build on what has been recently accomplished. In this regard, the Board of Directors continues to seek out a CEO with strong retail expertise to lead the Company through its next stage of development.

The Company commenced a Normal Course Issuer Bid on October 9, 2009. To date, the Company has purchased 1.799 million shares for cash consideration of $0.572 million.

The Company's unaudited consolidated financial statements and Management's Discussion and Analysis for the three month period ended November 30, 2009 are available at the Investor Relations section of Paragon's website at www.paragonpharmacies.com or under the Company's profile on SEDAR at www.sedar.com.

Paragon Pharmacies Limited is building a pharmacy with our customers in mind. Headquartered in Kelowna, BC and employing over 400 staff, Paragon currently owns and operates 19 retail pharmacies and three central fill pharmacies throughout British Columbia, Alberta and Manitoba. Paragon is a leading mid-market pharmacy, providing premier pharmacy services in a friendly, community-focused environment.

FORWARD LOOKING STATEMENTS

This press release contains forward-looking statements regarding, among other things, the Company's beliefs, plans, objectives, strategies, estimates, intentions and expectations, including as they relate to its operating and financial results, capital expenditures and the ability to execute on its operating, investing and financing strategies. Consequently, actual results and events may differ materially from those included in, contemplated or implied by such forward looking statements for a variety of reasons. Forward-looking statements are subject to inherent risks and uncertainties including, but not limited to, market and general economic conditions, certain property and casualty risks, the ability to attract and retain pharmacists, the availability and terms of financing, changes in the Company's relationship with its key suppliers, competitive factors, changes in regulatory environments affecting the Company's business, and the accuracy in management's assumptions (see "RISKS AND RISK MANAGEMENT" as noted in the Company's Management's Discussion & Analysis posted on SEDAR at www.sedar.com). This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. Investors and others should carefully consider these and other factors and not place undue reliance on these forward-looking statements. In addition, these forward-looking statements relate to the date on which they were made and the Company disclaims and has no intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Paragon Pharmacies Limited
    Denis Taillieu
    Chief Executive Officer
    (250) 868-8400
    (250) 868-8402 (FAX)
    www.paragonpharmacies.com