The Jean Coutu Group (PJC) Inc.
TSX : PJC.A

The Jean Coutu Group (PJC) Inc.

October 16, 2007 07:00 ET

The Jean Coutu Group: First Quarter Results

Francois J. Coutu to be appointed President and Chief Executive Officer at the Annual General Meeting of Shareholders Announcement of the outcome of Management's Strategic Review

LONGUEUIL, QUEBEC--(Marketwire - Oct. 16, 2007) - The Jean Coutu Group (PJC) Inc. (TSX:PJC.A) (the "Company" or the "Jean Coutu Group") today reported its financial results for the first quarter ended September 1, 2007.



SUMMARY OF RESULTS
(Unaudited, in millions of Canadian dollars except per share amounts)

--------------------------------------------------------------------------
Q1/2008 Q1/2007
--------------------------------------------------------------------------
Revenues
Canada 540.3 487.8
United States - 2,634.8
--------------------------------------------------------------------------
540.3 3,122.6
--------------------------------------------------------------------------

Operating income before amortization ("OIBA")
Canada 54.1 50.0
United States - 62.2
--------------------------------------------------------------------------
54.1 112.2
--------------------------------------------------------------------------

Share of loss of Rite Aid Corporation 29.6 -

Net earnings (loss) 8.3 (142.5)
Per share $0.03 $(0.54)
Earnings before specific items 8.2 19.7
Per share $0.03 $0.08
--------------------------------------------------------------------------


HIGHLIGHTS

- Canadian network sales and operating performance continued to perform very well during the first quarter ended September 1, 2007. Operating income before amortization reached $54.1 million compared with $50.0 million for the first quarter of fiscal 2007, an 8.2% increase.

- The Company's began recording its share of Rite Aid's results during the first quarter of fiscal 2008. The share of the loss in The Jean Coutu Group's first quarter 2008 earnings amounted to $29.6 million ($24.8 million after-tax or $0.09 per Jean Coutu Group share).

- Francois J. Coutu will be appointed President and Chief Executive Officer of the Company, to take effect at today's Annual General Meeting of Shareholders. Mr. Jean Coutu will continue in the role of Chairman of the Board.

- The Company announced its priorities and strategic plan to achieve its vision for the growth of Canadian operations.

Financial results

"We are satisfied with our first quarter results," said Jean Coutu, President and Chief Executive Officer. "We continued to improve sales growth and operating performance in our Canadian network while Rite Aid began the integration of the acquired Brooks Eckerd stores. As expected, this integration will require a lot of effort and resources initially, but will result in even stronger synergies than anticipated when the transaction was closed."

Executive appointment

Mr. Jean Coutu will be replaced in the role of President and Chief Executive Officer by Mr. Francois J. Coutu. This appointment will take effect following the Annual General Meeting of shareholders today. Following this appointment, Mr. Jean Coutu will continue in the role of Chairman of the Board of the Company.

2008-2010 Strategic Plan

Mr. Francois J. Coutu will discuss highlights of the Company's 2008-2010 Strategic Plan at the Annual General Meeting of shareholders today at 9:30 AM (ET). Investors, media and other interested individuals are invited to listen to the live or deferred broadcast on The Jean Coutu Group corporate website at www.jeancoutu.com. The highlights of Strategic Plan are as follows:

The Jean Coutu Group's strategy has been developed from its mission statement: The Company is a Canadian retail pharmacy leader, with the best performance in Eastern Canada. It is the leader in Quebec and ranks amongst the North American leaders in its sector.

The Jean Coutu Group will focus on sales growth to optimize its franchisor model through network capital investments, a compelling customer offer and a Number 1 health positioning; it will continue to optimize profitability through the use of leading edge technology and will continue its geographic expansion through continued growth of its store network footprint. The Quebec market remains the best investment opportunity for The Jean Coutu Group. At this time, the Company will develop a retail pharmacy concept for the rest of Canada as well as pursue opportunistic acquisitions of regional drugstore chains and independent pharmacies.

Rite Aid Corporation is a strategic investment for the Company, which is expected to create value based on anticipated synergies. The Company also believes that Rite Aid will benefit from increased US government investment in the health care system in the future.

Presentation of financial statements

Following the disposal of its US operations on June 4, 2007, the Company changed its reporting currency to Canadian dollars considering the Company's current predominant operations in Canada. Comparative financial information previously expressed in US dollars is now presented in Canadian dollars for all periods shown.

Net earnings

For the first quarter of fiscal 2008, net earnings were $8.3 million ($0.03 per share) compared with a net loss of $142.5 million ($0.54 per share) for the first quarter of the previous fiscal year.

Canadian network sales and operating performance improved over fiscal 2007. Operating income for the Company's Canadian operations increased to $49.3 million in the first quarter of fiscal 2008 compared with $45.5 million in the first quarter of fiscal 2007. Operating income for the former US operations was $1.5 million in the first quarter of fiscal 2007.

Although Canadian network sales and operating performance improved over fiscal 2007, the Company's began recording its share of Rite Aid's results during the first quarter of fiscal 2008. The share of the loss in The Jean Coutu Group's first quarter 2008 earnings amounted to $29.6 million ($24.8 million after-tax or $0.09 per Jean Coutu Group share).

Earnings before specific items were $8.2 million ($0.03 per share) during the first quarter of fiscal 2008 compared with $19.7 million ($0.08 per share) for the first quarter of the previous fiscal year.

During the first quarter of fiscal 2007, the Company entered into a definitive agreement with Rite Aid whereby the Company would dispose of its network in the United States and recognized a $155.0 million or $0.59 per share impairment loss on assets held for sale following the announcement of the transaction. Prior to the transaction closing date of June 4, 2007, the factors affecting this impairment test fluctuated favourably and this impairment loss was reversed. The Company also recognized restructuring charges in the amount of $11.9 million ($7.1 million after-tax) or $0.03 per share during the first quarter of fiscal 2007.

Canadian Operations

Retail sales

Retail sales growth percentages quoted herein are based on comparable periods.

During the first quarter, the Company's Canadian franchise network retail sales were up 7.0%, pharmacy sales gained 9.1% and front-end sales increased 3.7% in terms of comparable stores. The network showed a 7.4% increase in total retail sales for the quarter compared with last year. Retail sales for the period were $785.4 million.



----------------------------------------------------------------------
RETAIL SALES GROWTH Q1/2008 Q1/2007
(Unaudited)
----------------------------------------------------------------------

CANADA(1)
Same store sales growth
Total 7.0% 6.2%
Pharmacy 9.1% 8.6%
Front-end 3.7% 2.6%
Total sales growth
Total 7.4% 6.8%
Pharmacy 9.3% 9.1%
Front-end 4.5% 3.5%

(1) Franchised outlets' retail sales are not included in the Company's
consolidated financial statements.
----------------------------------------------------------------------


Distribution center sales

Canadian operations distribution center sales showed double digit growth during the first quarter of fiscal 2008, reaching $486.1 million, an increase of $49.8 million or 11.4% over sales for the fiscal quarter ended August 26, 2006.

OIBA

OIBA for Canadian operations increased to $54.1 million in the first quarter of fiscal 2008 compared with $50.0 million in the first quarter of fiscal 2007, an increase of 8.2%, due mainly to strong top line growth. OIBA as a percentage of revenues amounted to 10.0% in the first quarter of fiscal 2008 compared with 10.3% in the first quarter of fiscal 2007.

Store network development

During the first quarter of fiscal 2008, 2 drugstores were opened, of which 1 store was a relocation and 5 stores were significantly renovated or expanded. On September 1, 2007, there were 329 stores in the PJC Jean Coutu drugstore network.

Rite Aid investment

The Company held a 31.4% equity interest in Rite Aid as of September 1, 2007 and this investment is accounted for under the equity method. Rite Aid reported a net loss for the quarter ended September 1, 2007 of US$69.6 million (US$0.10 per Rite Aid share) compared with US$0.3 million (US$0.02 per Rite Aid share) for the same period last year. The share of Rite Aid's loss in The Jean Coutu Group's first quarter 2008 earnings amounted to $29.6 million ($24.8 million after-tax or $0.09 per Jean Coutu Group share).

Rite Aid grew their business during their fiscal quarter as a result of the closing of the Jean Coutu Group - Rite Aid transaction and through organic growth. They improved the gross margin rate and controlled expenses. The integration of the acquired Brooks Eckerd stores has begun and Rite Aid is expecting more cost-saving synergies than they originally anticipated. They are proceeding with the conversion of the acquired stores to the Rite Aid banner while continuing their organic store growth program.

Temporary investments

On September 1, 2007, the Company held temporary investments in the amount of $35.7 million which were invested, during the first quarter of fiscal 2008, in Canadian third party asset-backed commercial paper ("Third Party ABCP"). These Third Party ABCP, rated by the Dominion Bond Rating Service ("DBRS") as R1-High, are securities that met the criteria of the Company's investment policy. An R1-High rating, per the DBRS, is of the highest credit quality and indicates an entity possessing unquestionable ability to repay current liabilities as they come due.

DBRS placed several Third Party ABCP issuers "Under Review with Developing Implications" following an announcement on August 16, 2007 that a consortium representing banks, asset providers and major investors had agreed in principle to a long-term proposal and interim agreement regarding Third Party ABCP ("the Montreal Proposal"). Under this proposal, the affected Third Party ABCP would be converted into term floating rate notes maturing no earlier than the scheduled termination dates of the underlying assets. The Montreal Proposal called for investors to continue to roll their Third Party ABCP during the standstill period. On September 6, 2007, a Pan Canadian Committee ("the Committee") was formed to oversee the proposed restructuring process of the Third Party ABCP. In late September 2007, the Committee stated that it was pursuing an extension of the original standstill period of mid-October 2007. The Company is assessing its alternatives and recourses to recover the full value of these Third Party ABCP.

The Company has classified these Third Party ABCP as temporary investments since Management believes that these assets will be realized within a 365-day period. The fair value of the assets underlying Third Party ABCP and the outcome of any restructuring proposal could give rise to a charge to the Company's earnings. However, considering the measurement uncertainty related to this matter, the Company has not recorded any write-down related to its Third Party ABCP temporary investments in the first quarter of fiscal 2008. The Company has sufficient credit facilities to satisfy its financial obligations as they come due and does not expect there will be a material adverse impact on its business as a result of this current Third Party ABCP liquidity issue.

Normal Course Issuer Bid

On June 29, 2007, the Company announced its intention to purchase for cancellation up to 13,672,800 of its outstanding Class A subordinate voting shares, representing approximately 10% of the current public float of such shares, over a 12-month period ending no later than July 3, 2008. The Company purchased 50,100 shares at an average price of $15.27 per share for a total amount of $0.8 million for the period from June 29 to September 1, 2007.

Dividend

The Board declared a quarterly dividend of $0.04 per share payable on November 15, 2007 to all holders of Class A subordinate voting shares and holders of Class B shares listed in the Company's shareholder ledger as at November 1, 2007.

Outlook

With operations in Canada and a significant interest in a United States' drugstore leader, the Company is well positioned to capitalize on the growth in the North American drugstore retailing industry. Demographic trends in Canada and the United States are expected to contribute to growth in the consumption of prescription drugs, and to the increased use of pharmaceuticals as the primary intervention in individual healthcare. Management believes that these trends will continue and that the Company will grow its revenues through differentiation and quality of offering and service levels in its Canadian drugstore network, which it operates with a focus on sales growth, its real estate program and operating efficiency.

The Company is able to better participate in the growing U.S. drugstore industry following The Jean Coutu Group - Rite Aid transaction and has a virtually debt-free balance sheet with enhanced financial flexibility. The Company's 31.4% equity interest in the expanded Rite Aid allows shareholders to participate in the economic benefits of expected synergies, creating shareholder value.

Conference call

Financial analysts are invited to attend the fourth quarter results conference call to be held on October 16, 2007, at 8:30 AM (ET). The toll free call-in number is 1-866-696-5895. Media and other interested individuals are invited to listen to the live or deferred broadcast on The Jean Coutu Group corporate website at www.jeancoutu.com. A full replay will also be available by dialing 1-800-408-3053 code 3237885 (pound sign) until November 16, 2007.

Supporting documentation (additional information and investor presentation) is available at www.jeancoutu.com using the investors link. Readers may also access additional information and filings related to the Company using the following link to the www.sedar.com website.

About The Jean Coutu Group

The Jean Coutu Group (PJC) Inc. operates a network of 329 franchised drugstores in Canada located in the provinces of Quebec, New Brunswick and Ontario (under the banners of PJC Jean Coutu, PJC Clinique and PJC Sante Beaute) and employs more than 15,500 people. The Jean Coutu Group is one of the most trusted names in Canadian pharmacy retailing. The Company holds a significant interest in Rite Aid Corporation, one of the United States' leading drugstore chains with approximately 5,100 drugstores in 31 states and the District of Columbia.

This press release contains "forward-looking statements", that involve risks and uncertainties, and which are based on the Company's current expectations, estimates, projections and assumptions and were made by The Jean Coutu Group in light of its experience and its perception of historical trends. All statements that address expectations or projections about the future, including statements about the Company's strategy for growth, costs, operating or financial results, are forward-looking statements. All statements other than statements of historical facts included in this press release, including, statements regarding the prospects of the Company's industry and the Company's prospects, plans, financial position and business strategy, may constitute forward-looking statements within the meaning of the Canadian securities legislation and regulations. Some of the forward-looking statements may be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "estimate," "project", "could", "anticipate," "plan," "foresee," "believe" or "continue" or the negatives of these terms or variations of them or similar terminology. Although The Jean Coutu Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. These statements do not reflect the potential impact of any non-recurring items or of any mergers, acquisitions, dispositions, asset write-downs or other transactions or charges that may be announced or that may occur after the date hereof. While the below list of cautionary statements is not exhaustive, some important factors that could affect our future operating results, financial position and cash flows and could cause our actual results to differ materially from those expressed in these forward-looking statements are the general economic, financial or market conditions, the cyclical and seasonal variations in the industry in which we operate, the changes in the regulatory environment as it relates to the sale of prescription drug, the ability to attract and retain pharmacists, the intensity of competitive activity in the industry in which we operate, certain property and casualty risks, risks in connection with third party service providers, technological changes that affect demand for our products and services, labour disruptions, including possibly strikes and labour protests, changes in laws and regulations, or in their interpretations, changes in tax regulations and accounting pronouncements, the success of the Company's business model, the supplier and brand reputations and the accuracy of management's assumptions and other factors that are beyond our control.

These and other factors could cause our actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. Investors and others are cautioned that undue reliance should not be placed on any forward-looking statements. For more information on the risks, uncertainties and assumptions that would cause the Company's actual results to differ from current expectations, please also refer to the Company's public filings available at www.sedar.com and www.jeancoutu.com. In particular, further details and descriptions of these and other factors are disclosed in the Company's Annual Information Form under "Risk Factors" and in the "Risks and Uncertainties" section of the Management's Discussion & Analysis. We expressly disclaim any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by the applicable securities laws.

This press release also contains certain non-GAAP financial measures. Such information is reconciled to the most directly comparable financial measures, as set forth in the Management's Discussion & Analysis, included in the Company's First Quarter Report to Shareholders.

THE JEAN COUTU GROUP (PJC) INC.

Unaudited interim consolidated financial statements

September 1, 2007 and August 26, 2006



THE JEAN COUTU GROUP (PJC) INC.

Consolidated statements of earnings 13 weeks
Periods ended September 1, 2007 and August 26, 2006 2007 2006
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(unaudited, in millions of Canadian dollars,
unless otherwise noted) $ $

Sales 486.1 3,068.4
Other revenues 54.2 54.2
--------------------------------------------------------------------------
540.3 3,122.6
Operating expenses
Cost of goods sold 443.0 2,376.3
General and operating expenses 44.2 635.1
Amortization 3.8 64.2
--------------------------------------------------------------------------
491.0 3,075.6
--------------------------------------------------------------------------
Operating income 49.3 47.0
Financing expenses 0.5 57.0
Impairment loss on assets held for sale - 155.0
--------------------------------------------------------------------------
Earnings (loss) before the following items 48.8 (165.0)
Share of loss from investments subject to significant
influence 29.6 -
Income taxes (recovery) 10.9 (22.5)
--------------------------------------------------------------------------
Net earnings (loss) 8.3 (142.5)
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Earnings (loss) per share, in dollars
Basic 0.03 (0.54)
Diluted 0.03 (0.54)
--------------------------------------------------------------------------
--------------------------------------------------------------------------


Consolidated statements of comprehensive income 13 weeks
Periods ended September 1, 2007 and August 26, 2006 2007 2006
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(unaudited, in millions of Canadian dollars) $ $

Net earnings (loss) 8.3 (142.5)
Other comprehensive income (loss)
Foreign currency translation adjustments (3.2) 157.5
Income taxes on the above item 0.4 -
--------------------------------------------------------------------------
Comprehensive income 5.5 15.0
--------------------------------------------------------------------------
--------------------------------------------------------------------------

The segmented information and the accompanying notes are an integral part
of these unaudited interim consolidated financial statements.



THE JEAN COUTU GROUP (PJC) INC.

Consolidated statements of changes in shareholders' equity 13 weeks
Periods ended September 1, 2007 and August 26, 2006 2007 2006
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(unaudited, in millions of Canadian dollars) $ $


Capital stock, beginning of period 789.6 787.5
Redemption of stock (0.2) -
Options exercised 0.2 -
--------------------------------------------------------------------------
Capital stock, end of period 789.6 787.5
--------------------------------------------------------------------------

Contributed surplus, beginning of period 4.8 2.9
Stock-based compensation cost 1.9 0.4
--------------------------------------------------------------------------
Contributed surplus, end of period 6.7 3.3
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Retained earnings, beginning of period 1,319.7 1,188.6
Impact of the adoption of new accounting standards (4.5) -
Net earnings (loss) 8.3 (142.5)
--------------------------------------------------------------------------
1,323.5 1,046.1
Dividends (10.4) (7.8)
Excess of purchase price over carrying value of
Class A subordinate voting shares acquired (0.5) -
--------------------------------------------------------------------------
Retained earnings, end of period 1,312.6 1,038.3
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Accumulated other comprehensive income (loss),
beginning of period (96.6) (245.5)
Foreign currency translation adjustments, net of
income taxes (2.8) 157.5
--------------------------------------------------------------------------
Accumulated other comprehensive income (loss),
end of period (99.4) (88.0)
--------------------------------------------------------------------------
--------------------------------------------------------------------------

--------------------------------------------------------------------------
Total shareholders' equity 2,009.5 1,741.1
--------------------------------------------------------------------------
--------------------------------------------------------------------------

The segmented information and the accompanying notes are an integral part
of these unaudited interim consolidated financial statements.



THE JEAN COUTU GROUP (PJC) INC.

Consolidated balance sheets As at As at
September 1, June 4,
2007 2007
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(in millions of Canadian dollars) $ $
(unaudited) (audited)


Assets
Current assets
Cash and cash equivalents 8.6 40.7
Temporary investments 35.7 -
Accounts receivable 171.5 162.6
Income taxes receivable 4.1 0.4
Inventories 144.7 138.0
Prepaid expenses 4.1 7.6
--------------------------------------------------------------------------
368.7 349.3
Investments 1,559.6 1,597.8
Capital assets 313.6 319.4
Goodwill 20.0 20.0
Other long-term assets 53.5 50.2
--------------------------------------------------------------------------
2,315.4 2,336.7
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Liabilities
Current liabilities
Accounts payable and accrued liabilities 226.5 259.1
Income taxes payable 42.6 22.8
Current portion of long-term debt 0.5 0.6
--------------------------------------------------------------------------
269.6 282.5
Long-term debt 7.3 7.4
Other long-term liabilities 29.0 29.3
--------------------------------------------------------------------------
305.9 319.2
--------------------------------------------------------------------------

Shareholders' equity
Capital stock 789.6 789.6
Contributed surplus 6.7 4.8

Retained earnings 1,312.6 1,319.7
Accumulated other comprehensive income (loss) (99.4) (96.6)
--------------------------------------------------------------------------
1,213.2 1,223.1
--------------------------------------------------------------------------
2,009.5 2,017.5
--------------------------------------------------------------------------
2,315.4 2,336.7
--------------------------------------------------------------------------
--------------------------------------------------------------------------

The segmented information and the accompanying notes are an integral part
of these unaudited interim consolidated financial statements.



THE JEAN COUTU GROUP (PJC) INC.

Consolidated statements of cash flows 13 weeks
Periods ended September 1, 2007 and August 26, 2006 2007 2006
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(unaudited, in millions of Canadian dollars) $ $


Operating activities
Net earnings (loss) 8.3 (142.5)
Items not affecting cash
Amortization 4.8 68.9
Impairment loss on assets held for sale - 155.0
Share of loss from investments subject to significant
influence 29.6 -
Future income taxes (1.5) (24.1)
Other 0.4 (0.5)
--------------------------------------------------------------------------
41.6 56.8
Net changes in non-cash asset and liability items (23.5) (48.0)
--------------------------------------------------------------------------
Cash flow provided by operating activities 18.1 8.8
--------------------------------------------------------------------------
Investing activities
Investments and temporary investments (35.2) 1.1
Purchase of capital assets (5.8) (47.4)
Proceeds from disposal of capital assets 1.3 0.2
Purchase of intangible assets - (1.9)
Proceeds from disposal of intangible assets - 0.1
Other long-term assets - (0.9)
--------------------------------------------------------------------------
Cash flow used in investing activities (39.7) (48.8)
--------------------------------------------------------------------------
Financing activities
Issuance of long-term debt, net of expenses (0.1) 2.9
Repayment of long-term debt (0.2) (14.2)
Issuance of capital stock 0.2 -
Dividends (10.4) -
--------------------------------------------------------------------------
Cash flow used in financing activities (10.5) (11.3)
--------------------------------------------------------------------------
Effect of foreign exchange rate changes on cash and
cash equivalents - 2.7
--------------------------------------------------------------------------
Decrease in cash and cash equivalents (32.1) (48.6)
Cash and cash equivalents, beginning of period 40.7 150.4
--------------------------------------------------------------------------
Cash and cash equivalents, end of period 8.6 101.8
--------------------------------------------------------------------------
--------------------------------------------------------------------------

The segmented information and the accompanying notes are an integral part
of these unaudited interim consolidated financial statements.



THE JEAN COUTU GROUP (PJC) INC.
Consolidated segmented information
Periods ended September 1, 2007 and August 26, 2006
(unaudited, in millions of Canadian dollars)
--------------------------------------------------------------------------
--------------------------------------------------------------------------


The Company has two reportable segments: franchising and retail sales. Within the franchising segment, the Company carries on the franchising activity of the "PJC Jean Coutu" banner, operates two distribution centres and coordinates several other services for the benefit of its franchisees. During the fiscal year 2007, the Company also operated in the retail sales segment through outlets selling pharmaceutical and other products under the "Brooks" and "Eckerd" banners. On June 4, 2007, the Company sold its interest in the "Brooks" and "Eckerd" outlets for cash and an equity interest in Rite Aid Corporation ("Rite Aid"). As a result, the Company's retail sales segment is represented by the investment in Rite Aid.

The Company analyzes the performance of its operating segments based on their operating income before amortization, which is not a measure of performance under Canadian generally accepted accounting principles ("GAAP"); however, management uses this performance measure for assessing the operating performance of its reportable segments.



Segmented information is summarized as follows: 13 weeks
2007 2006
--------------------------------------------------------------------------
$ $


Revenues (1)
Franchising 540.3 487.8
Retail sales - 2,634.8
--------------------------------------------------------------------------
540.3 3,122.6
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Operating income before amortization
Franchising 54.1 50.0
Retail sales - 62.2
--------------------------------------------------------------------------
54.1 112.2
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Amortization
Franchising (2) 4.8 4.5
Retail sales - 60.7
--------------------------------------------------------------------------
4.8 65.2
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Operating income
Franchising 49.3 45.5
Retail sales - 1.5
--------------------------------------------------------------------------
49.3 47.0
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(1) Revenues include sales and other revenues.

(2) Including amortization of incentives paid to franchisees.







13 weeks
2007 2006
--------------------------------------------------------------------------
$ $


Share of loss from investments subject to significant
influence
Retail sales (1) 29.6 -
--------------------------------------------------------------------------
29.6 -
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Acquisition of capital assets and intangible assets
Franchising 5.8 7.4
Retail sales - 41.9
--------------------------------------------------------------------------
5.8 49.3
--------------------------------------------------------------------------
--------------------------------------------------------------------------


As at As at
September 1, June 4,
2007 2007
--------------------------------------------------------------------------
$ $


Capital assets and goodwill
Franchising 333.6 339.4
--------------------------------------------------------------------------
333.6 339.4
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Total assets
Franchising 785.7 775.9
Retail sales (1) 1,529.7 1,560.8
--------------------------------------------------------------------------
2,315.4 2,336.7
--------------------------------------------------------------------------
--------------------------------------------------------------------------

The Company's revenues, capital assets and goodwill as well as total assets
for the geographic areas of Canada and the United States correspond to the
franchising and retail sales segments respectively.

(1) Represents the equity investment in Rite Aid since June 4, 2007.



THE JEAN COUTU GROUP (PJC) INC.
Unaudited additional information
Periods ended September 1, 2007 and August 26, 2006
(In millions of Canadian dollars except for margins)
--------------------------------------------------------------------------
--------------------------------------------------------------------------

13 weeks
2007 2006
--------------------------------------------------------------------------
$ $
Canada
Sales 486.1 436.3
Cost of goods sold 443.0 397.6
--------------------------------------------------------------------------
Gross profit 43.1 38.7
As a % of sales 8.9% 8.9%

Other revenues (1) 55.2 52.5

General and operating expenses 44.2 41.2
--------------------------------------------------------------------------
Operating income before amortization 54.1 50.0
Amortization (1) 4.8 4.5
--------------------------------------------------------------------------
Operating income 49.3 45.5
--------------------------------------------------------------------------
--------------------------------------------------------------------------

(1) Amortization of incentives paid to franchisees is presented in
amortization instead of being applied against other revenues as in the
consolidated financial statements.



THE JEAN COUTU GROUP (PJC) INC.
Unaudited additional information
Periods ended September 1, 2007 and August 26, 2006
(In millions of Canadian dollars)
--------------------------------------------------------------------------
--------------------------------------------------------------------------


Non-GAAP measures - Operating income before amortization ("OIBA")

OIBA is not a measure of performance under Canadian generally accepted accounting principles ("GAAP"); however, management uses this performance measure in assessing the operating and financial performance of its reportable segments. Besides, we believe that OIBA is an additional measure used by investors to evaluate operating performance and capacity of a company to meet its financial obligations. However, OIBA is not and must not be used as an alternative to net earnings or cash flow generated by operating activities as defined by GAAP. OIBA is not necessarily an indication that cash flow will be sufficient to meet our financial obligations. Furthermore, our definitions of OIBA may not be necessarily comparative to similar measures reported by other companies.

Net earnings (loss), which is a performance measure defined by GAAP, is reconciled hereunder with OIBA.



13 weeks
2007 2006
--------------------------------------------------------------------------
$ $

Net earnings (loss) 8.3 (142.5)
Financing expenses 0.5 57.0
Impairment loss on assets held for sale - 155.0
Share of loss from investments subject to significant
influence 29.6 -
Income taxes (recovery) 10.9 (22.5)
--------------------------------------------------------------------------
Operating income 49.3 47.0
Amortization per financial statements 3.8 64.2
Amortization of incentives paid to franchisees (1) 1.0 1.0
--------------------------------------------------------------------------
Operating income before amortization ("OIBA") 54.1 112.2
--------------------------------------------------------------------------
--------------------------------------------------------------------------

(1) Amortization of incentives paid to franchisees is applied against other
revenues in the consolidated financial statements.



THE JEAN COUTU GROUP (PJC) INC.
Unaudited additional information
Periods ended September 1, 2007 and August 26, 2006
(In millions of Canadian dollars except per share amounts)
--------------------------------------------------------------------------
--------------------------------------------------------------------------


Non-GAAP measures - Earnings (or earnings per share) before specific items

Earnings before specific items and earnings per share before specific items are non-GAAP measures. The Company believes that it is useful for investors to be aware of significant items of an unusual or non-recurring nature that have adversely or positively affected its GAAP measures, and that the above mentioned non-GAAP measures provide investors with a measure of performance with which to compare its results between periods without regard to these items. The Company's measures excluding certain items have no standardized meaning prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies and therefore should not be considered in isolation.

Net earnings (loss) and earnings (loss) per share are reconciled hereunder to earnings before specific items and earnings per share before specific items. All amounts are net of income taxes when applicable.



13 weeks
2007 2006
--------------------------------------------------------------------------
$ $

Net earnings (loss) 8.3 (142.5)
Restructuring charges - 7.1
Impairment loss on assets held for sale - 155.0
Unrealized foreign exchange losses (gains) on monetary
items (0.1) 0.1
--------------------------------------------------------------------------
Earnings before specific items 8.2 19.7
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Earnings (loss) per share 0.03 (0.54)
Restructuring charges - 0.03
Impairment loss on assets held for sale - 0.59
Unrealized foreign exchange losses (gains) on monetary
items - -
--------------------------------------------------------------------------
Earnings per share before specific items 0.03 0.08
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Contact Information

  • Source: The Jean Coutu Group (PJC) Inc.
    Andre Belzile
    Senior Vice-President, Finance and Corporate Affairs
    450-646-9760
    or
    Information:
    Michael Murray
    Director, Investor Relations
    450-646-9611, Ext. 1068
    or
    Helene Bisson
    Director, Public Relations
    450-646-9611, Ext. 1165