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

The Jean Coutu Group (PJC) Inc.

January 10, 2008 07:00 ET

The Jean Coutu Group: Second Quarter Results

LONGUEUIL, QUEBEC--(Marketwire - Jan. 10, 2008) - The Jean Coutu Group (PJC) Inc. (TSX:PJC.A)(the "Company" or the "Jean Coutu Group") today reported its financial results for the second quarter and six months ended December 1, 2007.



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

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Year-to- Year-to-
Q2-2008 Q2-2007 date 2008 date 2007
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Revenues
Canada 583.0 538.5 1,123.3 1,026.3
United States - 2,650.5 - 5,285.3
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583.0 3,189.0 1,123.3 6,311.6
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Operating income before
amortization ("OIBA")
Canada 59.0 52.7 113.1 102.7
United States - 83.8 - 146.0
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59.0 136.5 113.1 248.7
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Share of loss of Rite Aid
Corporation 31.6 - 61.2 -

Net earnings (loss) 9.5 79.3 17.8 (63.2)
Per share 0.04 0.30 0.07 (0.24)

Earnings before specific
items 15.4 34.8 23.8 54.5
Per share 0.06 0.13 0.09 0.21
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HIGHLIGHTS

- Canadian network sales and operating performance continued to perform very well during the second quarter ended December 1, 2007. Revenues increased to $583.0 million compared with $538.5 million for the second quarter of fiscal 2007, an 8.3% increase. OIBA reached $59.0 million compared with $52.7 million, a 12.0% increase.

- The Company recorded its share of Rite Aid's results during the second quarter of fiscal 2008, which amounted to a loss of $31.6 million ($26.1 million after-tax or $0.10 per Jean Coutu Group share).

- During the second quarter of fiscal 2008, the Company purchased 10,864,600 Class A subordinate voting shares at an average price of $13.38 per share for a total amount of $145.6 million under a Normal Course Issuer Bid. These shares were cancelled as of December 1, 2007.

- The Company recorded a provision of $3.7 million ($3.0 million after-tax) related to the write-down of third party asset-backed commercial paper.

Financial results

"We are very satisfied with our second quarter Canadian network revenue and operating performance, with operating income showing double digit growth year-over-year," said Francois J. Coutu, President and Chief Executive Officer. "Rite Aid continued the integration of its acquired Brooks Eckerd drugstore network and continues to expect all of the acquired stores to be integrated into Rite Aid by the fall of calendar 2008. Finally, we look forward to building on The Jean Coutu Group's solid Canadian business as we implement our strategic plan."

Net earnings

For the second quarter of fiscal 2008, net earnings were $9.5 million ($0.04 per share) compared with $79.3 million ($0.30 per share) for the second 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 $54.2 million in the second quarter of fiscal 2008 compared with $48.1 million in the second quarter of fiscal 2007. Operating income for the former US operations was $83.8 million in the second quarter of fiscal 2007.

The Company recorded its share of Rite Aid's results during the second quarter of fiscal 2008. The share of the loss in The Jean Coutu Group's second quarter 2008 earnings amounted to $31.6 million ($26.1 million after-tax or $0.10 per Jean Coutu Group share).

During the first quarter of fiscal 2007, the Company entered into a definitive agreement with Rite Aid whereby the Company disposed of its network in the United States and recognized a $155.0 million impairment loss on assets held for sale following the announcement of the transaction. During the second quarter of fiscal 2007, the factors affecting the impairment test fluctuated favourably and the Company reversed an $11.1 million portion of the original loss due to an increase in the value of consideration. During the second quarter of fiscal 2007, the Company also recognized restructuring charges in the amount of $10.9 million and ceased amortizing the assets related to its US operations since they were classified as assets held for sale, reversing charges amounting to $56.2 million upon consolidation.

Earnings before specific items were $15.4 million ($0.06 per share) during the second quarter of fiscal 2008 compared with $34.8 million ($0.13 per share) for the second quarter of the previous fiscal year.

The first six months net earnings were $17.8 million ($0.07 per share) compared with a net loss of $63.2 million ($0.24 per share) for the corresponding period last year. The first six months earnings before specific items were $23.8 million ($0.09 per share) compared with $54.5 million ($0.21 per share) for the corresponding period last year.

Canadian Operations

Retail sales

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

During the second quarter, the Company's Canadian franchise network retail sales were up 6.1%, pharmacy sales gained 9.5% and front-end sales did not grow year-over-year in terms of comparable stores. The network showed a 6.8% increase in total retail sales for the quarter compared with last year. Front-end sales growth figures were negatively impacted by substantial declines in the sales of allergy and cough, cold and flu medications due to a milder season. During the second quarter of fiscal 2008, sales of non-prescription drugs declined 0.5% compared to an increase of 5.0% during the same period in fiscal 2007. Retail sales for the period were $809.4 million.

For the 26-week period, on a same-store basis, total PJC network retail sales advanced 6.6%, pharmaceutical sales gained 9.3% and front-end sales picked up 1.9% year-over-year.



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RETAIL SALES GROWTH Q2/2008 Q2-2007 Year-to-date Year-to-date
(Unaudited) 2008 2007
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CANADA (1)
Same store sales
growth
Total 6.1% 6.9% 6.6% 6.5%
Pharmacy 9.5% 8.3% 9.3% 8.5%
Front-end 0.0% 5.4% 1.9% 4.0%
Total sales growth
Total 6.8% 7.5% 7.1% 7.2%
Pharmacy 9.8% 8.9% 9.5% 9.0%
Front-end 1.1% 6.3% 2.8% 4.9%

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

Canadian operations distribution center sales showed strong growth during the second quarter of fiscal 2008, reaching $526.6 million, an increase of $41.2 million or 8.5% over sales for the fiscal quarter ended November 25, 2006.

OIBA

OIBA for Canadian operations increased to $59.0 million in the second quarter of fiscal 2008 compared with $52.7 million in the second quarter of fiscal 2007, an increase of 12.0%, due mainly to strong top line growth combined with the increase in the wholesaler margin for pharmacy distribution center sales. OIBA as a percentage of revenues amounted to 10.1% in the second quarter of fiscal 2008 compared with 9.8% in the second quarter of fiscal 2007.

OIBA as a percentage of revenues for Canadian operations ended the 26-week period at 10.1% compared with 10.0% for the same period in fiscal 2007.

Store network development

During the second quarter of fiscal 2008, 5 drugstores were opened, of which 3 stores were relocations. On December 1, 2007, there were 331 stores in the PJC Jean Coutu drugstore network.

Rite Aid investment

The Company held a 31.7% equity interest in Rite Aid as of December 1, 2007 and this investment is accounted for under the equity method. Rite Aid reported a net loss for the quarter ended December 1, 2007 of US$84.8 million (US$0.12 per Rite Aid share) compared with net income of US$1.1 million (US$0.01 loss per Rite Aid share) for the same period last year.

The share of Rite Aid's loss in The Jean Coutu Group's second quarter 2008 earnings amounted to $31.6 million ($26.1 million after-tax or $0.10 per Jean Coutu Group share) and $61.2 million ($50.9 million after-tax or $0.19 per Jean Coutu Group share) on a year-to-date basis in fiscal 2008.

Pro Doc Ltee Acquisition

On December 20, 2007, the Company announced that it had acquired Pro Doc Ltee ("Pro Doc"), a Quebec-based generic drug manufacturer. Financial terms were not disclosed. This acquisition fits with the Company's Canadian development strategy and is an interesting expansion of its core business. Pro Doc has an excellent reputation and represents a significant growth opportunity.

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. During the second quarter of fiscal 2008, the Company purchased 10,864,600 Class A subordinate voting shares at an average price of $13.38 per share for a total amount of $145.6 million. During the first six months of fiscal 2008, the Company purchased 10,914,700 Class A subordinate voting shares at an average price of $13.38 per share for a total amount of $146.3 million. These shares were cancelled as of December 1, 2007.

Third party asset-backed commercial paper

On December 1, 2007, the Company held investments in the amount of $35.5 million which were invested in Canadian third party sponsored asset-backed commercial paper ("Third Party ABCP"). There is currently uncertainty of the outcome of the restructuring plan being considered for these securities and in estimating the amount and timing of cash flows in any restructuring. As a result, the Company used its best judgement to assess the market conditions at December 1, 2007 and following a probability weighted approach has estimated the fair value of these securities and classified these Third Party ABCP as long-term investments.

As a result of the valuation, the Company has recognized a $3.7 million ($3.0 million after-tax) provision for losses in respect of Third Party ABCP holdings reflecting the Company's estimated reduction in the fair value of these investments as at December 1, 2007, including a provision for its estimated share of restructuring costs associated with the restructuring plan.

The Company is assessing its alternatives and recourses to recover the full value of these Third Party ABCP. 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 the Third Party ABCP liquidity issue.

Dividend

The Board declared a quarterly dividend of $0.04 per share payable on February 8, 2008 to all holders of Class A subordinate voting shares and holders of Class B shares listed in the Company's shareholder ledger as at January 25, 2008.

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 31.7% 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 January 10, 2008, at 9:00 AM (ET). The toll free call-in number is 1-866-696-5910 - access code 3245653 followed by pound sign (#). 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 - access code 3245653 followed by pound sign (#) until February 11, 2008.

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 331 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 Second Quarter Report to Shareholders.



THE JEAN COUTU GROUP (PJC) INC.

Consolidated statements
of earnings 13 weeks 26 weeks

Periods ended December 1,
2007 and November 25, 2006 2007 2006 2007 2006
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(unaudited, in millions of
Canadian dollars, unless
otherwise noted) $ $ $ $

Sales 526.6 3,132.6 1,012.7 6,201.0
Other revenues 56.4 56.4 110.6 110.6
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583.0 3,189.0 1,123.3 6,311.6

Operating expenses
Cost of goods sold 477.7 2,412.5 920.7 4,788.8
General and operating expenses 47.2 641.1 91.4 1,276.2
Amortization 3.9 3.5 7.7 67.7
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528.8 3,057.1 1,019.8 6,132.7
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Operating income 54.2 131.9 103.5 178.9
Financing expenses 0.3 50.5 0.6 107.5
Impairment loss (reversal) on
assets held for sale - (11.1) - 143.9
Adjustment to gain on sale of the
retail sales segment 3.5 - 3.7 -
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Earnings (loss) before the
following items 50.4 92.5 99.2 (72.5)
Share of loss from investments
subject to significant influence 31.6 - 61.2 -
Income taxes (recovery) 9.3 13.2 20.2 (9.3)
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Net earnings (loss) 9.5 79.3 17.8 (63.2)
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Earnings (loss) per share,
in dollars
Basic 0.04 0.30 0.07 (0.24)
Diluted 0.04 0.30 0.07 (0.24)
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Consolidated statements of
comprehensive income 13 weeks 26 weeks

Periods ended December 1, 2007
and November 25, 2006 2007 2006 2007 2006
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(unaudited, in millions of Canadian
dollars) $ $ $ $

Net earnings (loss) 9.5 79.3 17.8 (63.2)
Other comprehensive income (loss)
Foreign currency translation
adjustments (80.9) 13.1 (84.1) 170.6
Income taxes on the above item 14.1 - 14.5 -
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Comprehensive income (loss) (57.3) 92.4 (51.8) 107.4
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The segmented information and the accompanying notes are an integral part
of these unaudited interim consolidated financial statements.



Consolidated statements of changes
in shareholders' equity 13 weeks 26 weeks

Periods ended December 1, 2007
and November 25, 2006 2007 2006 2007 2006
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(unaudited, in millions of Canadian
dollars) $ $ $ $

Capital stock, beginning of period 789.6 787.5 789.6 787.5
Redemption of stock (59.4) - (59.6) -
Options exercised 0.3 - 0.5 -
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Capital stock, end of period 730.5 787.5 730.5 787.5
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Contributed surplus, beginning
of period 6.7 3.3 4.8 2.9
Stock-based compensation cost - 0.4 1.9 0.8
Contributed surplus from
investments subject to significant
influence 8.6 - 8.6 -
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Contributed surplus, end of period 15.3 3.7 15.3 3.7
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Retained earnings, beginning of
period 1,312.6 1,038.3 1,319.7 1,188.6
Impact of the adoption of new
accounting standards - - (4.5) -
Net earnings (loss) 9.5 79.3 17.8 (63.2)
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1,322.1 1,117.6 1,333.0 1,125.4
Dividends (10.3) (7.9) (20.7) (15.7)
Excess of purchase price over
carrying value of Class A
subordinate voting shares
acquired (86.2) - (86.7) -
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Retained earnings, end of period 1,225.6 1,109.7 1,225.6 1,109.7
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Accumulated other comprehensive
income (loss), beginning of period (99.4) (88.0) (96.6) (245.5)
Foreign currency translation
adjustments, net of income taxes (66.8) 13.1 (69.6) 170.6
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Accumulated other comprehensive
income (loss), end of period (166.2) (74.9) (166.2) (74.9)
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Total shareholders' equity 1,805.2 1,826.0 1,805.2 1,826.0
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The segmented information and the accompanying notes are an integral part
of these unaudited interim consolidated financial statements.



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

Assets
Current assets
Cash and cash equivalents - 40.7
Accounts receivable 196.0 162.6
Income taxes receivable 4.1 0.4
Inventories 158.8 138.0
Prepaid expenses 4.3 7.6
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363.2 349.3
Investments 1,492.5 1,597.8
Capital assets 322.9 319.4
Goodwill 20.0 20.0
Other long-term assets 69.2 50.2
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2,267.8 2,336.7
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Liabilities
Current liabilities
Accounts payable and accrued liabilities 219.3 259.1
Income taxes payable 51.9 22.8
Current portion of long-term debt 0.5 0.6
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271.7 282.5
Long-term debt 161.8 7.4
Other long-term liabilities 29.1 29.3
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462.6 319.2
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Shareholders' equity
Capital stock 730.5 789.6
Contributed surplus 15.3 4.8

Retained earnings 1,225.6 1,319.7
Accumulated other comprehensive income (loss) (166.2) (96.6)
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1,059.4 1,223.1
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1,805.2 2,017.5
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2,267.8 2,336.7
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The segmented information and the accompanying notes are an integral part
of these unaudited interim consolidated financial statements.



Consolidated statements of
cash flows 13 weeks 26 weeks

Periods ended December 1, 2007
and November 25, 2006 2007 2006 2007 2006
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(unaudited, in millions of
Canadian dollars) $ $ $ $

Operating activities
Net earnings (loss) 9.5 79.3 17.8 (63.2)
Items not affecting cash
Amortization 4.8 8.3 9.6 77.2
Adjustment to gain on sale of
the retail sales segment 3.5 - 3.7 -
Impairment loss (reversal) on
assets held for sale - (11.1) - 143.9
Share of loss from investments
subject to significant influence 31.6 - 61.2 -
Future income taxes (0.2) 11.5 (1.7) (12.6)
Other 0.5 (7.6) 0.9 (8.1)
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49.7 80.4 91.5 137.2

Net changes in non-cash asset and
liability items 4.9 (36.8) (18.8) (84.8)
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Cash flow provided by operating
activities 54.6 43.6 72.7 52.4
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Investing activities
Adjustment to proceeds of
disposal of the retail sales
segment (46.1) - (46.1) -
Investments (5.6) (1.4) (40.8) (0.3)
Purchase of capital assets (7.1) (53.9) (12.9) (101.3)
Proceeds from disposal of
capital assets - 0.6 1.3 0.8
Purchase of intangible assets - (0.4) - (2.3)
Proceeds from disposal of
intangible assets - 0.5 - 0.6
Other long-term assets (2.1) (0.9) (2.1) (1.8)
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Cash flow used in investing
activities (60.9) (55.5) (100.6) (104.3)
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Financing activities
Issuance of long-term debt, net
of expenses 154.2 - 154.1 2.9
Repayment of long-term debt (0.1) (21.0) (0.3) (35.2)
Issuance of capital stock 0.3 - 0.5 -
Redemption of capital stock (146.3) - (146.3) -
Dividends (10.3) (15.7) (20.7) (15.7)
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Cash flow used in financing
activities (2.2) (36.7) (12.7) (48.0)
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Effect of foreign exchange rate
changes on cash and cash
equivalents (0.1) 27.2 (0.1) 29.9
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Decrease in cash and cash
equivalents (8.6) (21.4) (40.7) (70.0)
Cash and cash equivalents,
beginning of period 8.6 101.8 40.7 150.4
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Cash and cash equivalents, end of
period - 80.4 - 80.4
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The segmented information and the accompanying notes are an integral part
of these unaudited interim consolidated financial statements.



Consolidated segmented information
Periods ended December 1, 2007 and November 25, 2006
(unaudited, in millions of Canadian dollars)
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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 26 weeks
2007 2006 2007 2006
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$ $ $ $

Revenues (1)
Franchising 583.0 538.5 1,123.3 1,026.3
Retail sales - 2,650.5 - 5,285.3
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583.0 3,189.0 1,123.3 6,311.6
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Operating income before
amortization
Franchising 59.0 52.7 113.1 102.7
Retail sales - 83.8 - 146.0
-------------------------------------------------------------------------
59.0 136.5 113.1 248.7
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Amortization
Franchising (2) 4.8 4.6 9.6 9.1
Retail sales - 56.2 - 116.9
Reversal of amortization of the
retail sales segment upon
consolidation (3) - (56.2) - (56.2)
-------------------------------------------------------------------------
4.8 4.6 9.6 69.8
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Operating income
Franchising 54.2 48.1 103.5 93.6
Retail sales - 27.6 - 29.1
Reversal of amortization of the
retail sales segment upon
consolidation (3) - 56.2 - 56.2
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54.2 131.9 103.5 178.9
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(1) Revenues include sales and other revenues.
(2) Including amortization of incentives paid to franchisees.
(3) For the period from August 23, 2006 to June 4, 2007, the Company ceased
amortizing the assets related to its US operations since they were
classified as assets held for sale.



13 weeks 26 weeks
2007 2006 2007 2006
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$ $ $ $

Share of loss from investments
subject to significant influence
Retail sales (1) 31.6 - 61.2 -
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31.6 - 61.2 -
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Acquisition of capital assets and
intangible assets
Franchising 7.1 12.1 12.9 19.5
Retail sales - 42.2 - 84.1
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7.1 54.3 12.9 103.6
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As at As at
December 1, June 4,
2007 2007
-------------------------------------------------------------------------
$ $

Capital assets and goodwill
Franchising 342.9 339.4
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342.9 339.4
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Total assets
Franchising 833.9 775.9
Retail sales (1) 1,433.9 1,560.8
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2,267.8 2,336.7
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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.



THE JEAN COUTU GROUP (PJC) INC.
Unaudited additional information
Periods ended December 1, 2007 and November 25, 2006
(In millions of Canadian dollars except for margins)

13 weeks 26 weeks
2007 2006 2007 2006
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$ $ $ $

Canada
Sales 526.6 485.4 1,012.7 921.7
Cost of goods sold 477.7 443.7 920.7 841.3
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Gross profit 48.9 41.7 92.0 80.4
As a % of sales 9.3% 8.6% 9.1% 8.7%

Other revenues (1) 57.3 54.2 112.5 106.7

General and operating expenses 47.2 43.2 91.4 84.4
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Operating income before
amortization 59.0 52.7 113.1 102.7
Amortization (1) 4.8 4.6 9.6 9.1
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Operating income 54.2 48.1 103.5 93.6
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(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 December 1, 2007 and November 25, 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 26 weeks
2007 2006 2007 2006
-------------------------------------------------------------------------
$ $ $ $

Net earnings (loss) 9.5 79.3 17.8 (63.2)
Financing expenses 0.3 50.5 0.6 107.5
Impairment loss (reversal) on assets
held for sale - (11.1) - 143.9
Adjustment to gain on sale of the
retail sales segment 3.5 - 3.7 -
Share of loss from investments
subject to significant influence 31.6 - 61.2 -
Income taxes (recovery) 9.3 13.2 20.2 (9.3)
-------------------------------------------------------------------------
Operating income 54.2 131.9 103.5 178.9
Amortization per financial statements 3.9 3.5 7.7 67.7
Amortization of incentives paid to
franchisees (1) 0.9 1.1 1.9 2.1
-------------------------------------------------------------------------
Operating income before amortization
("OIBA") 59.0 136.5 113.1 248.7
-------------------------------------------------------------------------
-------------------------------------------------------------------------

(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 December 1, 2007 and November 25, 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 26 weeks
2007 2006 2007 2006
-------------------------------------------------------------------------
$ $ $ $

Net earnings (loss) 9.5 79.3 17.8 (63.2)
Restructuring charges - 6.6 - 13.7
Reversal of amortization of the
retail sales segment upon
consolidation - (33.8) - (33.8)
Unrealized foreign exchange
gains on monetary items - (2.8) (0.1) (2.7)
Unrealized gains on derivative
financial instruments - (3.4) - (3.4)
Impairment loss (reversal) on
assets held for sale - (11.1) - 143.9
Adjustment to gain on sale of the
retail sales segment 2.9 - 3.1 -
Write-down of third party asset-
backed commercial paper 3.0 - 3.0 -
-------------------------------------------------------------------------
Earnings before specific items 15.4 34.8 23.8 54.5
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Earnings (loss) per share 0.04 0.30 0.07 (0.24)
Restructuring charges - 0.02 - 0.05
Reversal of amortization of the
retail sales segment upon
consolidation - (0.13) - (0.13)
Unrealized foreign exchange gains
on monetary items - (0.01) - (0.01)
Unrealized gains on derivative
financial instruments - (0.01) - (0.01)
Impairment loss (reversal) on
assets held for sale - (0.04) - 0.55
Adjustment to gain on sale of the
retail sales segment 0.01 - 0.01 -
Write-down of third party asset-
backed commercial paper 0.01 - 0.01 -
-------------------------------------------------------------------------
Earnings per share before
specific items 0.06 0.13 0.09 0.21
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Contact Information

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