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

The Jean Coutu Group (PJC) Inc.

August 03, 2005 00:00 ET

The Jean Coutu Group - Fourth quarter and year-end results - Brooks Eckerd integration substantially complete

LONGUEUIL, Aug. 3 /CCNMatthews/ - The Jean Coutu Group (PJC) Inc.
(the "Company" or the "Jean Coutu Group") reported its financial results for
the fourth quarter and fiscal year ended May 28, 2005 today. Quarterly
revenues are up by 254% year-over-year while full year revenues are up 216%,
as a result of the addition of Eckerd drugstore operations.



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Summary of results
(in thousands of US dollars except per share amounts)


Q4/2005 Q3/2005 Q4/2004 52-Weeks Fiscal
2005 year
2004
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Revenues 2,768,418 2,815,401 781,141 9,617,363 3,042,967

Operating income
before
amortization
("OIBA") 148,388 125,365 62,290 452,740 249,722

Net earnings 46,216 39,854 32,604 104,378 132,683

Net earnings
per share $0.18 $0.15 $0.14 $0.41 $0.58

Earnings per
share before
unrealized
losses (gains)
on financing
activities $0.18 $0.10 $0.14 $0.44 $0.58


Highlights

- Eckerd sales trends have improved significantly over the year.
Script count trends have reversed from negative to positive
recently. Front-end trends have improved in core categories, with a
slight decline in overall front-end sales year-over-year.
- The cost of running dual head office infrastructures for the latest
quarter still impacted general and operating expenses. The final
hases of the Brooks Eckerd Information Technology (IT) integration
were substantially completed in July 2005.
- At the end of the fiscal year, the Company elected to proceed with
the closure of 78 non performing Eckerd drugstores, with a total of
45 transfers of script files to the nearest Eckerd drugstore and
33 sales of script files and related inventory.


"We are satisfied with the financial results of The Jean Coutu Group
during this transformational year. During the fourth quarter, we continued to
make good progress and have recently completed the IT integration of Brooks
Eckerd Pharmacy," said François J. Coutu, President and Chief Executive
Officer. "We look forward to capturing integration cost savings since we
eliminated the dual head office infrastructures during the first quarter of
fiscal 2006. Over the coming year, we will strive to profitably grow the sales
of our transformed US network."

Net earnings

For the fourth quarter, net earnings were $46.2 million ($0.18 per share)
compared with $32.6 million ($0.14 per share) for the fourth quarter of the
previous fiscal year and $39.9 million ($0.15 per share) in the third quarter
of the current year. The acquired Eckerd drugstores contributed to the
increases in revenues, cost of goods sold and operating expenses year over
year.
Fiscal 2005 net earnings were $104.4 million ($0.41 per share) compared
with $132.7 million ($0.58 per share) in fiscal 2004. Earnings before
unrealized losses on financing activities were $112.2 million ($0.44 per
share) compared to $132.7 million ($0.58 per share) for the corresponding
fiscal year. There was an unrealized foreign exchange loss on monetary items
of $7.8 million ($0.03 per share) recorded during fiscal 2005. During the
fiscal year, the Company reviewed these arrangements and their documentation
in order to ensure that all significant monetary items are properly hedged
against future foreign exchange risk.

Revenues

Total revenues of the Company's Canadian operations for the fourth
quarter reached $368.5 million compared with $324.8 million for the fourth
quarter of the 2004 fiscal year, an increase of $43.7 million or 13.4%. Fourth
quarter Canadian revenues increased by 3.7% year-over-year excluding the
impact of currency exchange rate fluctuations.
Our American operations generated total revenues of $2.400 billion, an
increase of $1.944 billion or 425.9% over the fourth quarter of the previous
fiscal year.
Fiscal 2005 revenues increased by $6.574 billion or 216.1% to
$9.617 billion from $3.043 billion in fiscal 2004.

Retail sales

Retail sales figures quoted herein are denominated in local currency in
order to exclude the impact of currency rate fluctuations. In the fourth
quarter, the Company's Canadian franchise network showed a 4.4% increase in
sales compared with the same period last year. The American corporate pharmacy
network posted a 424.4% increase in sales when compared with the same quarter
of the 2004 fiscal year.
In terms of comparable stores, the Canadian network's retail sales were
up 4.3%, pharmacy sales gained 5.5% and front-end sales picked up 2.6% year-
over-year. In the United States, retail sales rose by 3.1%, pharmacy sales
gained 3.8% and front-end sales picked up 1.6% compared with the same quarter
last year. This measure does not include same-store sales for the acquired
Eckerd drugstores, which will be included in same-store sales in August 2005,
after one year of ownership by the Company. Eckerd sales trends have improved
significantly in both the pharmacy and front-end. Script count trends have
reversed from negative in early fiscal 2005 to positive recently. Front-end
trends have improved, with strong growth in core health and beauty categories
and private label products, with a slight decline in overall front-end sales
year-over-year.
The Jean Coutu Group's Canadian franchise network recorded a
5.9% increase in fiscal 2005 sales. The American corporate pharmacy network
posted a 354.9% increase in retail sales when compared with the 2004 fiscal
year.

OIBA

In the fourth quarter, operating income before amortization ("OIBA")
amounted to $148.4 million against $62.3 million for the corresponding quarter
last year. Fourth quarter OIBA increased by $23.0 million or 18.3% over the
third quarter figure of $125.4 million.
Fourth quarter results were positively impacted by changes in estimates
for some Eckerd network operating expenses and revenues on the basis of new
information obtained in the quarter. These items are related to the estimate
of workers' compensation and general liability expense, the accrual for
vendors allowances and finally a distribution center inventory adjustment. Of
these favourable changes in estimates, approximately $12 million impacted the
cost of goods sold and $9 million the general and operating expenses. These
changes in estimates were accounted for on a prospective basis.
OIBA for the 52-weeks ended May 28, 2005 improved to $452.7 million
against $249.7 million for fiscal 2004.

Store network development

During the fourth quarter, 40 drugstores were opened, of which 14 were
relocations and 16 were closed. On May 28, 2005, there were 2,243 stores in
the system, comprised of 321 Canadian PJC stores, and 1,922 Brooks and Eckerd
drugstores in the United States.

Other initiatives

As of the end of the fiscal year ended May 28, 2005, the Company elected
to proceed with the closing of 78 non performing Eckerd drugstores. A total of
73 stores have closed to date, with 45 transfers of script files to the
nearest Eckerd store. For the remaining 33 stores, the Company has sold or
plans to sell the script files and related inventories. The net addition to
the provision for store closures and to the write-down of related assets,
which are included in the purchase price equation at May 28, 2005, amounted to
$100.5 million.
In June 2005, the Company received a cash payment of $24.0 million from
J.C. Penney related to the final settlement of the Eckerd purchase price
adjustment for working capital valuation on the closing of the acquisition.

Presentation of financial statements

As previously announced, the Company changed its reporting currency to
US dollars to reflect the fact that most of its activities are conducted in
the United States following the acquisition of Eckerd drugstores. Our
US dollar reporting currency ensures that our financial statements more
accurately reflect the Company's true operating results and financial
position.

Lease accounting

During the fourth quarter of fiscal 2005, we completed a review of our
methods of amortization of leasehold improvements and related lease incentives
following the views expressed by the Office of the Chief Accountant of the
Securities and Exchange Commission (SEC) on certain operating lease matters.
The results of this review had no material impact on the Company's
consolidated financial statements.

Outlook

The Jean Coutu Group is well positioned to capitalize on the growth in
the North American drugstore retailing industry, based on its strong brands, a
focus on excellence in customer service in pharmacy and front-end innovation
with an emphasis on health and beauty. 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 achieve sales growth through quality
of offering and service levels in its drugstore network.
The Company operates its network with a focus on sales growth, network
renovation, relocation and expansion projects and operating efficiency. The
Company has substantially completed the Brooks Eckerd integration which was
focused on three principal areas:

- Reduction of support functions and other initiatives

Head and field office head count reductions are substantially
complete, with net reductions of approximately 1,273 positions. As
a result, accountability and productivity has been enhanced with
the streamlining of operations. We look forward to capturing
integration cost savings since we eliminated the dual head office
infrastructures during the first quarter of fiscal 2006. The
Company will continue to optimize logistics and supply chain
efficiency over the 2006 fiscal year.

- Operational improvements

The Company has recently right sized its Eckerd network and will
continue to open new stores in fiscal 2006, with a focus on growing
network sales profitably. It has also implemented plans, processes
and deployed people to reduce inventory shrink and expects to
record early financial results from this initiative in fiscal 2006.

- Growth initiatives

Customer focused initiatives have been taken and will continue to
be implemented to drive sales growth profitably. The goal is to
differentiate the network through quality of offering and customer
service levels.

Dividend

The Board of Directors of The Jean Coutu Group declared a quarterly
dividend of C$0.03 per share. This dividend is payable on September 1, 2005 to
all holders of Class A Subordinate Voting shares and holders of Class B shares
listed in the Company's shareholder ledger as of August 18, 2005.

Conference call

Financial analysts are invited to attend the fourth quarter and year-end
results conference call to be held on August 3, 2005 at 9:00 AM eastern time.
The toll free call-in number is 1-866-898-9626. Media and other interested
individuals are invited to listen to the live or deferred broadcast on
The Jean Coutu Group corporate web site at www.jeancoutu.com. A full replay
will also be available by dialing 1-800-408-3053 code 3158514 (pound sign)
until September 5, 2005.
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 links to the www.sedar.com (Canada) and
www.sec.gov (United States) websites.


About The Jean Coutu Group

The Jean Coutu Group (PJC) Inc. is the fourth largest drugstore chain in
North America and the second largest in both the eastern United States and
Canada. The Company and its combined network of 2,243 corporate and franchised
drugstores (under the banners of Brooks and Eckerd Pharmacy, PJC Jean Coutu,
PJC Clinique and PJC Santé Beauté) employ more than 60,000 people.
The Jean Coutu Group's United States operations employ 46,000 people and
comprise 1,922 corporate owned stores located in 18 states of the
Northeastern, mid-Atlantic and Southeastern United States. The Jean Coutu
Group's Canadian operations and franchised drugstores in its network employ
over 14,000 people and comprise 321 PJC Jean Coutu franchised stores in
Quebec, New Brunswick and Ontario.
"Safe Harbor" Statement under the U.S. Private Securities Litigation
Reform Act of 1995: Certain statements contained in this press release may
constitute "forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve a number of known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. The
words "looking forward," "looking ahead," "believe(s)," "should," "may,"
"expect(s)," "anticipate(s)," "likely," "opportunity," and similar
expressions, among others, identify forward-looking statements. The Company
undertakes no obligation to update any forward-looking statements contained in
this press release.
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 "additional information" section, which is
attached to the Company's financial statements.


THE JEAN COUTU GROUP (PJC) INC.
Consolidated statements of earnings
(in thousands of US dollars except for per share amounts)
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13 weeks 3 months 52 weeks 12 months
ended ended ended ended
May 28 , May 31, May 28, May 31,
2005 2004 2005 2004
-----------------------------------------------
$ $ $ $
(unaudited) (unaudited) (unaudited) (audited)
(restated) (restated)

Sales 2,725,566 744,932 9,448,343 2,893,088
Other revenues 42,852 36,209 169,020 149,879
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2,768,418 781,141 9,617,363 3,042,967
Operating expenses
Cost of goods sold 2,078,107 603,334 7,289,872 2,343,998
General and operating
expenses 542,822 116,100 1,878,296 452,284
Amortization 57,010 10,358 195,308 38,396
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2,677,939 729,792 9,363,476 2,834,678
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Operating income 90,479 51,349 253,887 208,289
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Financing expenses
Interest on long-term
debt 46,009 2,823 152,731 11,752
Unrealized foreign
exchange loss (gain)
on monetary items (454) - 7,767 -
Other financing expenses,
net 1,939 528 1,594 2,783
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47,494 3,351 162,092 14,535
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Earnings before income
taxes 42,985 47,998 91,795 193,754
Income taxes expenses
(recovery) (3,231) 15,394 (12,583) 61,071
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Net earnings 46,216 32,604 104,378 132,683
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Net earnings per share
Basic 0.18 0.14 0.41 0.58
Diluted 0.18 0.14 0.41 0.58
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THE JEAN COUTU GROUP (PJC) INC.
Consolidated statements of retained earnings
(in thousands of US dollars)
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13 weeks 3 months 52 weeks 12 months
ended ended ended ended
May 28, May 31, May 28, May 31,
2005 2004 2005 2004
-----------------------------------------------
$ $ $ $
(unaudited) (unaudited) (unaudited) (audited)
(restated) (restated)

Balance, beginning of
period
As previously reported 747,743 682,202 709,419 597,601
Restatement related to
a change in accounting
policy - (1,207) (867) (1,453)
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Restated balance 747,743 680,995 708,552 596,148
Net earnings 46,216 32,604 104,378 132,683
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793,959 713,599 812,930 728,831
Dividends 6,320 5,047 25,291 20,279
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Balance, end of period 787,639 708,552 787,639 708,552
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THE JEAN COUTU GROUP (PJC) INC.
Consolidated balance sheets
(in thousands of US dollars)
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As at As at
May 28, May 31,
2005 2004
--------------------------
$ $
(unaudited) (audited)
(restated)
Assets
Current assets
Cash and cash equivalents 132,175 14,554
Temporary investment 78,489 -
Accounts receivable 544,810 199,516
Inventories 1,678,245 391,916
Prepaid expenses 40,981 12,235
Income taxes receivable 6,822 -
Future income taxes - 10,220
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2,481,522 628,441
Investments 18,819 21,298
Capital assets 1,492,499 544,174
Intangible assets 729,639 19,277
Goodwill 866,451 95,330
Other long-term assets 105,996 35,234
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5,694,926 1,343,754
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Liabilities
Current liabilities
Bank loans - 15,000
Accounts payable and accrued liabilities 1,109,902 231,306
Income taxes payable 32,870 42,004
Future income taxes 97,809 -
Current portion of long-term debt 65,631 22,566
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1,306,212 310,876
Long-term debt 2,495,801 169,609
Other long-term liabilities 480,810 9,826
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4,282,823 490,311
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Shareholders' equity
Capital stock 577,463 144,996
Contributed surplus 764 188
Retained earnings 787,639 708,552
Foreign currency translation adjustments 46,237 (293)
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1,412,103 853,443
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5,694,926 1,343,754
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THE JEAN COUTU GROUP (PJC) INC.
Consolidated statements of cash flows
(in thousands of US dollars)
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-------------------------------------------------------------------------

13 weeks 3 months 52 weeks 12 months
ended ended ended ended
May 28, May 31, May 28, May 31,
2005 2004 2005 2004
-----------------------------------------------
$ $ $ $
(unaudited) (unaudited) (unaudited) (audited)
(restated) (restated)

Operating activities
Net earnings 46,216 32,604 104,378 132,683
Items not affecting cash
Amortization 57,010 10,358 195,308 38,396
Amortization of
incentives paid to
franchisees 899 583 3,545 3,037
Amortization of deferred
financing fees 3,210 304 10,324 1,161
Unrealized foreign
exchange loss (gain) on
monetary items (454) - 7,767 -
Future income taxes (61,380) (1,683) (53,826) (13,616)
Other 1,347 108 2,181 185
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46,848 42,274 269,677 161,846
Net changes in non-cash
asset and liability items 44,600 25,014 (47,607) 24,096
-------------------------------------------------------------------------
Cash flow provided by
operating activities 91,448 67,288 222,070 185,942
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Investing activities
Business acquisitions 22,837 - (2,491,813) (3,910)
Investments and temporary
investments (81,716) 1,848 (75,100) (5,669)
Purchase of capital assets (62,680) (17,737) (195,278) (74,040)
Proceeds from the disposal
of capital assets 6,536 151 15,143 1,651
Intangible assets (2,094) (4,013) (5,128) (4,235)
Other long-term assets (348) (1,645) (82,450) (5,571)
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Cash flow used in investing
activities (117,465) (21,396) (2,834,626) (91,774)
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Financing activities
Changes in bank loans (15,000) (29,632) (15,000) (32,397)
Issuance of long-term debt - - 2,550,000 -
Repayment of long-term
debt (16,949) (5,200) (217,289) (21,288)
Issuance of capital stock 1,419 (108) 426,456 1,932
Dividends (6,320) (5,047) (25,291) (20,279)
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Cash flow provided by
(used in) financing
activities (36,850) (39,987) 2,718,876 (72,032)
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Foreign currency
translation adjustments (934) (658) 11,301 691
-------------------------------------------------------------------------
Increase (decrease)
in cash and cash
equivalents (63,801) 5,247 117,621 22,827
Cash and cash equivalents
(bank overdraft),
beginning of period 195,976 9,307 14,554 (8,273)
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Cash and cash equivalents
(bank overdraft), end of
period 132,175 14,554 132,175 14,554
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THE JEAN COUTU GROUP (PJC) INC.
Unaudited consolidated segmented information
(in thousands of US dollars)
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The Company applied on a retroactive basis changes in its reportable
segments determination. The impact of these changes is the aggregation of the
franchising and real estate segments. The Company has now two reportable
segments: franchising and retail sales. Within the segment of franchising,
the Company carries on the franchising activity of the "PJC Jean Coutu"
banner, operates a distribution center and coordinates several other services
for the benefit of its franchisees. The Company operates retail sales outlets
selling pharmaceutical and other products under the "Brooks" and "Eckerd"
banners.
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 principles ("GAAP"); however,
management uses this performance measure for assessing the operating
performance of its reportable segments.

13 weeks 3 months 52 weeks 12 months
ended ended ended ended
May 28, May 31, May 28, May 31,
2005 2004 2005 2004
-----------------------------------------------
$ $ $ $
(unaudited) (unaudited) (unaudited) (audited)
(restated) (restated)
Segmented information is
summarized as follows:
Revenues (1)
Franchising 368,520 324,829 1,406,139 1,235,757
Retail sales 2,399,898 456,312 8,211,224 1,807,210
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2,768,418 781,141 9,617,363 3,042,967
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Operating income before
amortization
Franchising 40,892 33,566 147,342 134,996
Retail sales 107,496 28,724 305,398 114,726
-------------------------------------------------------------------------
148,388 62,290 452,740 249,722
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Amortization
Franchising (2) 3,726 2,592 14,013 10,029
Retail sales 54,183 8,349 184,840 31,404
-------------------------------------------------------------------------
57,909 10,941 198,853 41,433
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Operating income
Franchising 37,166 30,974 133,329 124,967
Retail sales 53,313 20,375 120,558 83,322
-------------------------------------------------------------------------
90,479 51,349 253,887 208,289
-------------------------------------------------------------------------
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(1) Revenues include sales and other revenues
(2) Including amortization of incentives paid to franchisees


THE JEAN COUTU GROUP (PJC) INC.
Unaudited consolidated segmented information
(in thousands of US dollars)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

13 weeks 3 months 52 weeks 12 months
ended ended ended ended
May 28, May 31, May 28, May 31,
2005 2004 2005 2004
-----------------------------------------------
$ $ $ $
(unaudited) (unaudited) (unaudited) (audited)
Acquisition of capital
assets and intangible
assets (3)
Franchising 16,955 8,935 33,006 31,164
Retail sales 47,819 12,750 167,400 47,111
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64,774 21,685 200,406 78,275
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-------------------------------------------------------------------------

As at As at
May 28, May 31,
2005 2004
--------------------------
$ $
(unaudited) (audited)
(restated)
Total assets
Franchising 737,213 464,758
Retail sales 4,957,713 878,996
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5,694,926 1,343,754
-------------------------------------------------------------------------
-------------------------------------------------------------------------


The Company's revenues, capital assets, intangible assets and goodwill
attributed to Canada and the United States are as follows:

13 weeks 3 months 52 weeks 12 months
ended ended ended ended
May 28, May 31, May 28, May 31,
2005 2004 2005 2004
-----------------------------------------------
$ $ $ $
(unaudited) (unaudited) (unaudited) (audited)
Revenues (1) (restated) (restated)
Canada 368,520 324,829 1,406,139 1,235,757
United States 2,399,898 456,312 8,211,224 1,807,210
-------------------------------------------------------------------------
2,768,418 781,141 9,617,363 3,042,967
-------------------------------------------------------------------------
-------------------------------------------------------------------------

As at As at
May 28, May 31,
2005 2004
--------------------------
$ $
(unaudited) (audited)
Capital assets, intangible assets and goodwill
Canada 300,212 254,661
United States 2,788,377 404,120
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3,088,589 658,781
-------------------------------------------------------------------------
-------------------------------------------------------------------------

(1) Revenues include sales and other revenues
(2) Including amortization of incentives paid to franchisees
(3) Excluding business acquisitions


THE JEAN COUTU GROUP (PJC) INC.
Unaudited additional information
(Tabular amounts are in thousands of US dollars except for margins)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

13 weeks 3 months 52 weeks 12 months
ended ended ended ended
May 28, May 31, May 28, May 31,
2005 2004 2005 2004
-----------------------------------------------
$ $ $ $
Canada
Sales 327,948 287,571 1,247,898 1,090,503
Cost of goods sold 296,018 259,217 1,129,999 985,432
-------------------------------------------------------------------------
Gross profit 31,930 28,354 117,899 105,071
As a % of sales 9.7% 9.9% 9.4% 9.6%

Other revenues (1) 41,471 37,841 161,786 148,291

General and operating
expenses 32,509 32,629 132,343 118,366
-------------------------------------------------------------------------
Operating income before
amortization 40,892 33,566 147,342 134,996
Amortization (1) 3,726 2,592 14,013 10,029
-------------------------------------------------------------------------
Operating income 37,166 30,974 133,329 124,967
-------------------------------------------------------------------------
-------------------------------------------------------------------------

United States
Sales 2,397,618 457,361 8,200,445 1,802,585
Cost of goods sold 1,782,089 344,117 6,159,873 1,358,566
-------------------------------------------------------------------------
Gross profit 615,529 113,244 2,040,572 444,019
As a % of sales 25.7% 24.8% 24.9% 24.6%

Other revenues 2,280 (1,049) 10,779 4,625

General and operating
expenses 510,313 83,471 1,745,953 333,918
-------------------------------------------------------------------------
Operating income before
amortization 107,496 28,724 305,398 114,726
Amortization 54,183 8,349 184,840 31,404
-------------------------------------------------------------------------
Operating income 53,313 20,375 120,558 83,322
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Consolidated
Sales 2,725,566 744,932 9,448,343 2,893,088
Cost of goods sold 2,078,107 603,334 7,289,872 2,343,998
-------------------------------------------------------------------------
Gross profit 647,459 141,598 2,158,471 549,090
As a % of sales 23.8% 19.0% 22.8% 19.0%

Other revenues (1) 43,751 36,792 172,565 152,916

General and operating
expenses 542,822 116,100 1,878,296 452,284
-------------------------------------------------------------------------
Operating income before
amortization 148,388 62,290 452,740 249,722

Amortization (1) 57,909 10,941 198,853 41,433
-------------------------------------------------------------------------
Operating income 90,479 51,349 253,887 208,289
-------------------------------------------------------------------------
-------------------------------------------------------------------------

(1) Amortization of incentives paid to franchisees are presented in the
amortization instead of other revenues


THE JEAN COUTU GROUP (PJC) INC.
Unaudited additional information
-------------------------------------------------------------------------
-------------------------------------------------------------------------

13 weeks 3 months 52 weeks 12 months
ended ended ended ended
May 28, May 31, May 28, May 31,
2005 2004 2005 2004
-----------------------------------------------

Number of outlets
Beginning of period 2,231 652 655 643
Openings 40 9 124 24
Acquisitions 2 - 1,551 -
Relocations (14) (5) (59) (10)
Closings (16) (1) (28) (2)
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End of period 2,243 655 2,243 655
-------------------------------------------------------------------------
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Network performance -
Retail sales
(Tabular amounts are in
thousands of US dollars)
Canada (2) 565,313 495,986 2,173,428 1,939,637
United States 2,397,618 457,361 8,200,445 1,802,585
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2,962,931 953,347 10,373,873 3,742,222
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Retail sales per square
foot (1)
Canada (2) - CAN$ 1,246 1,201
United States (3) - US$ 636 613


Network performance -
Retail sales
Pharmacy
Canada (2) 58% 58% 58% 56%
United States 74% 70% 73% 69%

Front-end
Canada (2) 42% 42% 42% 44%
United States 26% 30% 27% 31%


(1) Last 12 month total store sales divided by average square footage
(2) Franchised's outlet retail sales are not included in the Company's
consolidated financial statements
(3) This measure does not include sales for the acquired Eckerd
corporate outlets


THE JEAN COUTU GROUP (PJC) INC.
Unaudited additional information
-------------------------------------------------------------------------
-------------------------------------------------------------------------

13 weeks 3 months 52 weeks 12 months
ended ended ended ended
May 28, May 31, May 28, May 31,
2005 2004 2005 2004
-----------------------------------------------


Retail sales growth (1)
Total
Canada (2) 4.4% 6.8% 5.9% 7.7%
United States 424.4% 4.8% 354.9% 4.6%

Front-end
Canada (2) 2.7% 1.8% 2.4% 3.2%
United States 364.6% 1.5% 299.4% 2.7%

Pharmacy
Canada (2) 5.8% 10.5% 8.4% 11.2%
United States 449.9% 6.2% 380.2% 5.4%


Retail sales growth -
same store (1)
Total
Canada (2) 4.3% 5.8% 5.5% 6.8%
United States (3) 3.1% 4.0% 2.8% 4.3%

Front-end
Canada (2) 2.6% 1.0% 2.1% 2.3%
United States (3) 1.6% 0.4% 0.4% 2.1%

Pharmacy
Canada (2) 5.5% 9.5% 8.0% 10.3%
United States (3) 3.8% 5.6% 3.9% 5.3%


(1) Growth is calculated in local currency and is based on comparable
periods
(2) Franchised's outlet retail sales are not included in the Company's
consolidated financial statements
(3) This measure does not include same-store sales for the acquired
Eckerd corporate outlets, which will be included in
same-store sales beginning in August 2005


THE JEAN COUTU GROUP (PJC) INC.
Unaudited additional information
(Tabular amounts are in thousands of US dollars )
-------------------------------------------------------------------------
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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 for assessing the operating and financial performance of its
reportable segments. Besides, we believe that OIBA is an additional
measurement 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 alternative to net earnings or cash flow generated by operating
activities as defined by Canadian GAAP. OIBA is not necessarily an indication
that cash flow will be sufficient to meet our financial obligations. Further,
our definition of OIBA may not be necessarily comparable to similarly titles
measures reported by other companies.
Net earnings, which is a performance measure defined by Canadian GAAP, is
reconciled below with OIBA.

13 weeks 3 months 52 weeks 12 months
ended ended ended ended
May 28, May 31, May 28, May 31,
2005 2004 2005 2004
-----------------------------------------------
$ $ $ $

Net earnings 46,216 32,604 104,378 132,683
Interest on long-term debt 46,009 2,823 152,731 11,752
Unrealized foreign
exchange loss (gain) on
monetary items (454) - 7,767 -
Other financing expenses,
net 1,939 528 1,594 2,783
Income taxes (3,231) 15,394 (12,583) 61,071
-------------------------------------------------------------------------
Operating income 90,479 51,349 253,887 208,289
Amortization 57,010 10,358 195,308 38,396
Amortization of incentives
paid to franchisees 899 583 3,545 3,037
-------------------------------------------------------------------------
Operating income before
amortization ("OIBA") 148,388 62,290 452,740 249,722
-------------------------------------------------------------------------
-------------------------------------------------------------------------

THE JEAN COUTU GROUP (PJC) INC.
Unaudited additional information
(Tabular amounts are in thousands of US dollars except per share amounts)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Non GAAP measures - Earnings before unrealized losses (gains) on
financing activities

Earnings before unrealized losses (gains) on financing activities and
earnings per share before unrealized losses (gains) on financing activities
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 and net earnings per share are reconciled hereunder to
earnings before unrealized losses (gains) on financing activities and earnings
per share before unrealized losses (gains) on financing activities.


13 weeks 3 months 52 weeks 12 months
ended ended ended ended
May 28, May 31, May 28, May 31,
2005 2004 2005 2004
-----------------------------------------------
$ $ $ $

Net earnings 46,216 32,604 104,378 132,683
Unrealized foreign
exchange loss (gain) on
monetary items (454) - 7,767 -
-------------------------------------------------------------------------
Earnings before unrealized
losses (gains) on
financing activities 45,762 32,604 112,145 132,683
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Net earnings per share 0.18 0.14 0.41 0.58
Unrealized losses (gains)
on financing activities - - 0.03 -
-------------------------------------------------------------------------
Earnings per share before
unrealized losses (gains)
on financing activities 0.18 0.14 0.44 0.58
-------------------------------------------------------------------------
-------------------------------------------------------------------------


THE JEAN COUTU GROUP (PJC) INC.
Unaudited additional information
(Tabular amounts are in thousands of US dollars except per share amounts)
-------------------------------------------------------------------------

Non GAAP measures - Earnings before unrealized losses on financing
activities (continued)

>>

Description of foreign currency balance sheet translation

Even though the Company's reporting currency is US dollars, non-
consolidated financial statements of the parent company and its subsidiaries
are prepared based on their respective functional currencies, which is US
dollars for US operations and Canadian dollars for Canadian operations and
corporate activities.
Assets and liabilities denominated in currencies other than an entity's
functional currency are translated according to the temporal method. Under
this method, monetary assets and liabilities are translated at the exchange
rate in effect at the balance sheet date, and non-monetary assets and
liabilities at their historical rates. All exchange gains and losses on
monetary items are current in nature and are included in the statement of
earnings.
For the purpose of minimizing volatility of earnings resulting from the
translation of its parent company and subsidiaries monetary items denominated
in currencies other than the entity's functional currency, the Company
designates, since February 2005, all its significant monetary items as a
foreign exchange hedge of its net investment in its US subsidiaries.
Accordingly, since the designation date, unrealized foreign exchange gains and
losses generated by the translation of those monetary items are mainly
recorded in foreign currency translation adjustments in shareholders' equity.

Contact Information

  • Michael Murray, Director, Investor Relations,
    The Jean Coutu Group (PJC), Inc., (450) 646-9760;
    Hélène Bisson, Media and Public Relations,
    (514) 393-1180, ext. 343, 1-877-894-8993;
    Source:
    André Belzile, Senior Vice-President Finance and Corporate Affairs,
    The Jean Coutu Group (PJC), Inc., (450) 646-9760