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

The Jean Coutu Group (PJC) Inc.

April 17, 2007 07:00 ET

The Jean Coutu Group-Third Quarter Results Canadian & US Network Sales Continue to Be Driven by Pharmacy Sales Growth

LONGUEUIL, QUEBEC--(CCNMatthews - April 17, 2007) - The Jean Coutu Group (PJC) Inc. (TSX:PJC.A) (the "Company" or the "Jean Coutu Group") today reported its financial results for the third quarter and the 40-week period ended March 3, 2007.



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

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14 weeks 13 weeks 13 weeks 40 weeks 39 weeks
Q3/2007 Q2/2007 Q3/2006 2007 2006
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Revenues 3,174.2 2,833.4 2,875.5 8,793.8 8,267.9
Operating income
before
amortization
("OIBA") 152.8 121.3 137.2 374.3 366.7
OIBA before
restructuring
charges 161.0 131.0 137.2 402.8 366.7
Net earnings 184.0 72.5 31.6 147.7 73.5
Per share $0.70 $0.28 $0.12 $0.56 $0.28
Earnings before
specific items 39.8 30.8 31.9 88.4 73.2
Per share $0.15 $0.11 $0.12 $0.34 $0.28
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HIGHLIGHTS

- Canadian network sales performance was strong, with an 8.5% increase, while US sales increased 1.1% during the 14-week period ended March 3, 2007 over the like 14-week period last year.

- The Company reversed the $108.0 million impairment loss on its US assets previously recognized as a result of the appreciation of the Rite Aid shares, and recorded further restructuring charges of $8.2 million ($4.9 million after-tax).

- The Company no longer amortizes the assets related to its US operations since they are classified as assets held for sale.

- The company expects to close the sale of its US operations before the end of the fourth quarter of its 2007 fiscal year.

"The Jean Coutu Group's third quarter results were positively impacted by improved sales performance in the Canadian network," said Jean Coutu, President and Chief Executive Officer. "We are seeing the results of our focus on sales growth in the Canadian network. In the meantime, US network sales continue to improve, despite challenges as the transaction closing approaches. We now expect the Rite Aid-Jean Coutu Group transaction to close before the end of the fourth quarter of fiscal 2007."

The Company's reporting calendar is based on the US National Retail Federation 4-5-4 merchandising calendar. Accordingly, the Company's fiscal year is usually 52 weeks in duration but includes a 53rd week every 5 to 6 years. The year ended June 2, 2007 will contain 53 weeks while the year ended May 27, 2006 contained 52 weeks. The fiscal quarter ended March 3, 2007 contains 14 weeks compared with 13 weeks for the fiscal quarter ended February 25, 2006.

Net earnings

For the third quarter of fiscal 2007, net earnings were $184.0 million ($0.70 per share) compared with $31.6 million ($0.12 per share) for the third quarter of the previous fiscal year.

Canadian and US network sales performance continues to be driven by pharmacy sales growth. US network front-end sales showed improvement, despite challenges as the Rite Aid transaction closing approaches.

On August 23, 2006, the Company entered into a definitive agreement with Rite Aid whereby the Company would dispose of its network in the United States. As provided under GAAP, the Company performed an impairment test and recognized a loss on assets held for sale following the announcement of the transaction. However, since the announcement date, the factors affecting the impairment test fluctuated favorably. As at March 3, 2007, the fair value of the investment in the US Operations, net of estimated transaction costs, had increased significantly and resulted in a potential gain of approximately $130.0 million net of income taxes. Under GAAP, the gain can not be recognized before the closing of the transaction and consequently, during the third quarter the company reversed the $108.0 million impairment loss previously recognized and deferred the recognition of the potential gain until closing. The Company expects to close this transaction, subject to certain usual conditions, before the end of the fourth quarter of fiscal 2007. The final gain or loss is subject to various factors until the transaction closes, such as the variation in the market price of Rite Aid shares and in the Canadian and US dollar exchange rate. In addition, the Company expects to record charges of approximately $113.5 million net of income taxes in relation with debt repayments that are expected to occur at closing.

As a result of the transaction, the Company no longer amortizes the assets related to its US operations since they are classified as assets held for sale, with amortization charges amounting to $57.5 million reversed in consolidation during the third quarter of fiscal 2007 ($107.4 million for the 40-week period of fiscal 2007).

Earnings before specific items were $39.8 million ($0.15 per share) compared with $31.9 million ($0.12 per share) for the third quarter of the previous fiscal year.

Net earnings for the 40-week period ended March 3, 2007 were $147.7 million ($0.56 per share) compared with net earnings of $73.5 million ($0.28 per share) for the 39-week period last year. Earnings before specific items for the 40-week period of fiscal 2007 were $88.4 million ($0.34 per share) compared with $73.2 million ($0.28 per share) for the 39-week period last fiscal year.

The specific items are as follows:



SPECIFIC ITEMS
(Unaudited, in millions of US dollars except
per share amounts, net of income taxes)

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14 weeks 13 weeks 13 weeks 40 weeks 39 weeks
Q3/2007 Q2/2007 Q3/2006 2007 2006
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Reversal of
impairment loss
on assets held
for sale (108.0) (12.0) - - -
Reversal of
amortization of
the retail sales
segment in
consolidation (34.7) (30.0) - (64.7) -
Restructuring
charges 4.9 5.8 - 17.1 -
Unrealized (gains)
losses on monetary
items and
derivative
financial
instruments (6.4) (5.5) 0.3 (11.7) (0.3)
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Specific items
- Total (144.2) (41.7) 0.3 (59.3) (0.3)
Per share $(0.55) $(0.17) - $(0.22) -
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Revenues

Total revenues of the Company's Canadian operations for the 14-week period ended March 3, 2007 reached $490.2 million compared with $413.4 million for the 13-week period ended February 25, 2006, an increase of $76.8 million or 18.6%. Third quarter Canadian revenues increased by 19.4% year-over-year, excluding the impact of currency exchange rate fluctuations. Canadian revenues for the 40-week period reached $1.404 billion, an increase of $212.6 million or 17.8% year-over-year or 13.1% in local currency.

The Company's US operations generated total revenues of $2.684 billion, up 9.0% from the 13-week period ended February 25, 2006, due principally to the additional week in fiscal 2007 and improving pharmacy and front-end sales. Pharmacy sales were impacted by a reduction of 4.8% due to the conversion of branded drugs to generics, which have a lower selling price, but higher gross margins for the drugstore retailer. US revenues for the 40-week period increased to $7.390 billion, up $313.3 million or 4.4% from the 39-week period last fiscal year.

Total revenues for the 14-week period ended March 3, 2007 increased by $298.7 million or 10.4% to $3.174 billion, from $2.876 billion for the 13-week period ended February 25, 2006. Year-to-date revenues increased by $525.9 million or 6.4% to $8.794 billion for the 40-week period ended March 3, 2007 compared with $8.268 billion for the 39-week period ended February 25, 2006.

Retail sales

Retail sales growth percentages quoted herein are calculated in local currency in order to exclude the impact of currency rate fluctuations and are based on comparable periods.

During the third quarter, the Company's Canadian franchise network retail sales were up 7.8% over the like 14-week period last year, pharmacy sales gained 8.6% and front-end sales increased 6.9% in terms of comparable stores. The network showed an 8.5% increase in retail sales for the 14-week period compared with the like 14-week period last year. Retail sales for the period were $747.0 million.

The US corporate pharmacy network retail sales increased 1.1% over the like 14-week period last year, pharmacy sales increased 1.4% and front-end sales increased 0.4% in terms of comparable stores. The impact of generic drugs replacing branded drugs on pharmacy sales growth was 4,8% for the period. Front-end sales growth was negatively impacted by the continued decline in the photo category which was partially offset by a 65% increase in the digital print business. Front-end sales growth was also negatively impacted by the severe winter weather during the Valentine's selling period as well as the declining availability of certain private label and other products as a result of the pending Rite Aid transaction. The network posted a 1.1% increase in retail sales for the 14-week period compared with the like 14-week period last year. Retail sales for the period were $2.679 billion.



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RETAIL SALES GROWTH
(Unaudited) 14 weeks ended 13 weeks ended
March 3, 2007 February 25, 2006
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CANADA(1)
Same store sales growth
Total 7.8% 3.3%
Pharmacy 8.6% 7.3%
Front-end 6.9% (1.6)%
Total sales growth
Total 8.5% 3.4%
Pharmacy 9.1% 7.4%
Front-end 7.9% (1.6)%

UNITED STATES
Same store sales growth
Total 1.1% 1.5%
Pharmacy 1.4% 2.2%
Front-end 0.4% (0.1)%
Total sales growth
Total 1.1% 0.2%
Pharmacy 1.3% 1.0%
Front-end 0.5% (1.6)%

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

OIBA increased in the 14-week period ended March 3, 2007 to $152.8 million from $137.2 million in the 13-week period ended February 25, 2006, principally due to the additional week in the third quarter of fiscal 2007. OIBA as a percentage of revenues ended the quarter at 4.8%, the same level as the third quarter of fiscal 2006.

Fiscal 2007 third quarter OIBA was impacted by certain restructuring charges principally related to the transition pay program associated with the announced transaction. OIBA before restructuring charges amounted to $161.0 million during the third quarter of fiscal 2007 and ended the third quarter at 5.1% compared with 4.8% for the third quarter of fiscal 2006.

OIBA as a percentage of revenues for the 40-week period ended March 3, 2007 was 4.3% compared with 4.4% for the 39-week period in fiscal 2006. OIBA before restructuring charges as a percentage of revenues ended the 40-week period of fiscal 2007 at 4.6% compared with 4.4% for the 39-week period of fiscal 2006.

Store network development

During the third quarter of fiscal 2007, 4 drugstores were opened, of which 3 stores were relocations and 5 were closed. On March 3, 2007, there were 2,182 stores in the system, comprised of 326 Canadian PJC stores, and 1,856 Brooks and Eckerd drugstores in the United States.

Outlook

With the announcement of the Rite Aid-Jean Coutu Group transaction, the Company will be 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 achieve sales growth through differentiation and quality of offering and service levels in its drugstore networks.

The Company operates its Canadian and US networks with a focus on sales growth, its real estate program and operating efficiency. Management expects that the announced transaction with Rite Aid, which is expected to close before the end of the fourth quarter of fiscal 2007, will help create shareholder value. The Jean Coutu Group will optimize its US presence by transforming its investment in a regional drugstore chain into the leading ownership position of a major national chain with enhanced scale to better compete in the US drugstore industry. The Company's 32.0% equity interest in the expanded Rite Aid will allow shareholders to participate in the economic benefits of expected synergies. The cash proceeds from the transaction will be used to retire debt, enhancing financial flexibility.


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 May 17, 2007 to all holders of Class A subordinate voting shares and holders of Class B shares listed in the Company's shareholder ledger as of May 3, 2007.

Conference call

Financial analysts are invited to attend the third quarter results conference call to be held on April 17, 2007, at 9:00 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 3219428 (pound sign) until May 18, 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 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 2,182 corporate and franchised drugstores (under the banners of Brooks and Eckerd Pharmacy, PJC Jean Coutu, PJC Clinique and PJC Sante Beaute) employ more than 61,000 people.

The Jean Coutu Group's US operations employ 46,000 people and comprise 1,856 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 15,000 people and comprise 326 PJC Jean Coutu franchised stores in Quebec, New Brunswick and Ontario.

Certain statements in this press release are forward-looking statements within the meaning of the federal securities laws, which involve risks and uncertainties. The words "looking forward," "looking ahead," "believe(s)," "should," "may," "expect(s)," "anticipate(s)," "likely," "opportunity," "will", "seeks", "approximately", "intends", "plans", "estimates" or "projects" and similar expressions, among others, identify forward-looking statements. Such statements are not guarantees of the future performance of the Company or its segments, and involve known and unknown risks and uncertainties that may cause the outlook, the actual results or performance of the Company or of its reportable segments to be materially different from any future results or performance expressed or implied by such statements depending on, among others, such factors as changes in the regulatory environment as it relates to the sale of prescription drugs, competition, exposure to interest rate fluctuations, foreign currency risks, certain property and casualty risks, the ability to attract and retain pharmacists, risks in connection with third party service providers, seasonality risks, changes in federal, provincial and state laws, rules and regulations relating to the Company's business and environmental matters, changes in tax regulations and accounting pronouncements, the success of the Company's business model, supplier and brand reputations, and the accuracy of management's assumptions. While the Company believes that its assumptions are reasonable, it is very difficult to predict the impact of known factors, and, of course, it is impossible to anticipate all factors that could affect the Company's actual results.

In addition, some of the important factors related to the Rite-Aid-Jean Coutu Group transaction that could cause results to differ materially from the Company's expectations include, but are not limited to, the following: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the stock purchase agreement; (2) the inability to complete the transaction due to the failure to satisfy any conditions to consummation of the transaction; (3) the failure of the transaction to close for any other reason; (4) the outcome of any legal proceedings that have been or may be instituted against or by the Company and others relating to the transaction; (5) risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the transaction; (6) the effect of the announcement of the transaction on our customer relationships, operating results and business generally; (7) the ability to recognize the intended benefits of the transaction; and (8) the amount of the costs, fees, expenses and charges related to the transaction.

This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. For further information, readers are referred to the section on Risks and uncertainties contained in the Company's MD&A as well as in other filings. The Company disclaims any intention or obligation to update or revise any forward-looking information contained in its communications, whether as a result of new information, future events or otherwise.

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 14 weeks 13 weeks 40 weeks 39 weeks
Periods ended
March 3, 2007 and
February 25, 2006 2007 2006 2007 2006
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(unaudited, in millions
of US dollars, unless
otherwise noted) $ $ $ $

Sales 3,119.5 2,826.7 8,640.6 8,127.8
Other revenues
(Note 2) 54.7 48.8 153.2 140.1
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3,174.2 2,875.5 8,793.8 8,267.9
Operating expenses
Cost of goods sold 2,400.4 2,170.3 6,664.2 6,229.3
General and operating
expenses 613.8 569.1 1,729.7 1,674.8
Restructuring
charges (Note 3) 8.2 - 28.5 -
Amortization (Note 4) 3.3 61.2 63.7 183.2
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3,025.7 2,800.6 8,486.1 8,087.3
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Operating income 148.5 74.9 307.7 180.6
Financing expenses
(Note 5) 52.1 52.8 147.9 152.2
Reversal of impairment
loss on assets held
for sale (Note 3) (108.0) - - -
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Earnings before
income taxes 204.4 22.1 159.8 28.4
Income taxes (recovery) 20.4 (9.5) 12.1 (45.1)
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Net earnings 184.0 31.6 147.7 73.5
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Earnings per share,
in dollars (Note 6)
Basic 0.70 0.12 0.56 0.28
Diluted 0.70 0.12 0.56 0.28
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Consolidated statement
of retained earnings 14 weeks 13 weeks 40 weeks 39 weeks
Periods ended
March 3, 2007 and
February 25, 2006 2007 2006 2007 2006
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(unaudited, in millions
of US dollars) $ $ $ $

Balance, beginning
of period 814.2 816.4 864.4 787.6
Net earnings 184.0 31.6 147.7 73.5
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998.2 848.0 1,012.1 861.1
Dividends 6.7 6.9 20.6 20.0
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Balance, end of period 991.5 841.1 991.5 841.1
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The segmented information and the accompanying notes are an integral
part of these unaudited interim consolidated financial statements.



THE JEAN COUTU GROUP (PJC) INC.

As at As at
March 3, May 27,
Consolidated balance sheets 2007 2006
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(in millions of US dollars) $ $
(unaudited) (audited)

Assets
Current assets
Cash and cash equivalents 37.2 135.8
Accounts receivable 122.3 555.5
Income taxes receivable 8.9 16.5
Inventories 105.2 1,744.9
Prepaid expenses and other 11.7 47.3
Current assets held for sale (Note 3) 2,221.0 -
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2,506.3 2,500.0
Investments 25.8 25.4
Capital assets 269.3 1,385.8
Intangible assets - 689.4
Goodwill 17.1 876.8
Other long-term assets 94.1 113.6
Long-term assets held for sale (Note 3) 2,718.6 -
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5,631.2 5,591.0
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Liabilities
Current liabilities
Accounts payable and accrued liabilities 160.2 1,079.6
Future income taxes - 147.8
Current portion of long-term debt 67.3 78.8
Current liabilities related to assets held
for sale (Note 3) 1,165.9 -
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1,393.4 1,306.2
Long-term debt 2,182.9 2,312.0
Other long-term liabilities (Note 7) 23.9 407.1
Long-term liabilities related to assets held
for sale (Note 3) 373.3 -
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3,973.5 4,025.3
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Shareholders' equity
Capital stock 579.5 577.9
Contributed surplus 3.8 2.4
Retained earnings 991.5 864.4
Foreign currency translation adjustments 82.9 121.0
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1,657.7 1,565.7
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5,631.2 5,591.0
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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 14 weeks 13 weeks 40 weeks 39 weeks
Periods ended
March 3, 2007 and
February 25, 2006 2007 2006 2007 2006
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(unaudited, in millions
of US dollars) $ $ $ $

Operating activities
Net earnings 184.0 31.6 147.7 73.5
Items not affecting
cash
Amortization 7.6 65.3 76.5 195.1
Reversal of
impairment loss on
assets held for
sale (108.0) - - -
Future income taxes 8.8 9.7 (2.4) (29.3)
Other (4.6) (0.3) (11.8) (7.0)
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87.8 106.3 210.0 232.3
Net changes in non-cash
asset and liability
items 95.6 (48.3) 48.0 (224.1)
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Cash flow provided by
operating activities 183.4 58.0 258.0 8.2
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Investing activities
Investments and
temporary investments (1.4) (1.4) (1.7) 78.2
Purchase of capital
assets (28.2) (37.0) (118.5) (113.9)
Proceeds from the
disposal of capital
assets 2.6 3.1 3.3 97.9
Purchase of intangible
assets - (2.3) (2.1) (9.8)
Proceeds from the
disposal of intangible
assets 0.4 0.9 1.0 8.7
Other long-term assets (0.2) - (1.7) -
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Cash flow provided by
(used in) investing
activities (26.8) (36.7) (119.7) 61.1
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Financing activities
Issuance of long-term
debt, net of expenses 2.0 - 4.6 (0.4)
Repayment of long-term
debt (107.1) (13.2) (138.9) (82.8)
Issuance of capital
stock 1.6 - 1.6 0.4
Dividends (6.7) (6.9) (20.6) (20.0)
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Cash flow used in
financing activities (110.2) (20.1) (153.3) (102.8)
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Effect of foreign
exchange rate changes
on cash and cash
equivalents (1.8) 2.7 (5.4) 16.1
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Increase (decrease) in
cash and cash
equivalents 44.6 3.9 (20.4) (17.4)
Cash and cash
equivalents, beginning
of period 70.8 110.9 135.8 132.2
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Cash and cash
equivalents, end of
period (1) 115.4 114.8 115.4 114.8
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(1) Includes $78.2 million of cash and cash equivalents grouped
with current assets held for sale as of March 3, 2007.

The segmented information and the accompanying notes are an integral
part of these unaudited interim consolidated financial statements.
See complementary cash flow information in Note 11.



THE JEAN COUTU GROUP (PJC) INC.
Consolidated segmented information
Periods ended March 3, 2007 and February 25, 2006
(unaudited, in millions of US 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 centers 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 accounting
principles ("GAAP"); however, management uses this performance
measure for assessing the operating performance of its reportable
segments.

Segmented information is summarized as follows:

14 weeks 13 weeks 40 weeks 39 weeks
2007 2006 2007 2006
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$ $ $ $

Revenues (1)
Franchising 490.2 413.4 1,404.1 1,191.5
Retail sales 2,684.0 2,462.1 7,389.7 7,076.4
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3,174.2 2,875.5 8,793.8 8,267.9
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Operating income before
amortization
Franchising 50.1 42.3 141.6 123.2
Retail sales 102.7 94.9 232.7 243.5
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152.8 137.2 374.3 366.7
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Amortization
Franchising (2) 4.3 4.0 12.4 11.7
Retail sales 57.5 58.3 161.6 174.4
Reversal of
amortization of the
retail sales segment
in consolidation (3) (57.5) - (107.4) -
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4.3 62.3 66.6 186.1
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Operating income
Franchising 45.8 38.3 129.2 111.5
Retail sales 45.2 36.6 71.1 69.1
Reversal of
amortization of the
retail sales segment
in consolidation (3) 57.5 - 107.4 -
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148.5 74.9 307.7 180.6
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(1) Revenues include sales and other revenues.
(2) Including amortization of incentives paid to franchisees.
(3) Since August 23, 2006, the Company no longer amortizes the assets
related to its US operations since they are classified as assets
held for sale.


14 weeks 13 weeks 40 weeks 39 weeks
2007 2006 2007 2006
---------------------------------------------------------------------
$ $ $ $

Acquisition of capital
assets and intangible
assets
Franchising 9.7 13.8 27.2 33.2
Retail sales 18.5 25.5 93.4 90.5
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28.2 39.3 120.6 123.7
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As at As at
March 3, May 27,
2007 2006
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$ $

Capital assets, intangible assets and goodwill
Franchising 286.4 286.9
Retail sales 2,712.6 2,665.1
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2,999.0 2,952.0
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Total assets
Franchising 691.6 729.5
Retail sales 4,939.6 4,861.5
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5,631.2 5,591.0
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The Company's revenues, capital assets, intangible assets and
goodwill as well as total assets for the geographic areas of Canada
and the United States correspond respectively, to the franchising and
retail sales segments.



THE JEAN COUTU GROUP (PJC) INC.
Unaudited additional information
Periods ended March 3, 2007 and February 25, 2006
(In millions of US dollars except for margins)
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14 weeks 13 weeks 40 weeks 39 weeks
2007 2006 2007 2006
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$ $ $ $
Canada
Sales 440.1 367.4 1,260.9 1,060.1
Cost of goods sold 401.4 332.5 1,150.6 961.9
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Gross profit 38.7 34.9 110.3 98.2
As a % of sales 8.8% 9.5% 8.7% 9.3%

Other revenues (1) 51.1 47.1 146.1 134.3

General and operating
expenses 39.7 39.7 114.8 109.3
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Operating income before
amortization 50.1 42.3 141.6 123.2
Amortization (1) 4.3 4.0 12.4 11.7
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Operating income 45.8 38.3 129.2 111.5
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United States
Sales 2,679.4 2,459.3 7,379.7 7,067.7
Cost of goods sold 1,999.0 1,837.8 5,513.6 5,267.4
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Gross profit 680.4 621.5 1,866.1 1,800.3
As a % of sales 25.4% 25.3% 25.3% 25.5%

Other revenues 4.6 2.8 10.0 8.7

General and
operating
expenses 574.1 529.4 1,614.9 1,565.5
Restructuring charges 8.2 - 28.5 -
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Operating income
before amortization 102.7 94.9 232.7 243.5
Amortization - 58.3 54.2 174.4
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Operating income 102.7 36.6 178.5 69.1
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Consolidated
Sales 3,119.5 2,826.7 8,640.6 8,127.8
Cost of goods sold 2,400.4 2,170.3 6,664.2 6,229.3
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Gross profit 719.1 656.4 1,976.4 1,898.5
As a % of sales 23.1% 23.2% 22.9% 23.4%

Other revenues (1) 55.7 49.9 156.1 143.0

General and operating
expenses 613.8 569.1 1,729.7 1,674.8
Restructuring charges 8.2 - 28.5 -
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Operating income
before amortization 152.8 137.2 374.3 366.7
Amortization (1) 4.3 62.3 66.6 186.1
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Operating income 148.5 74.9 307.7 180.6
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(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
Periods ended March 3, 2007 and February 25, 2006
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14 weeks 13 weeks 40 weeks 39 weeks
2007 2006 2007 2006
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Number of outlets
Beginning of period 2,186 2,175 2,185 2,243
Openings 4 10 15 35
Acquisitions - - 4 1
Relocations (3) (7) (8) (18)
Closings (5) (5) (14) (88)
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End of period 2,182 2,173 2,182 2,173
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Network performance
- Retail sales
(In millions of
US dollars)
Canada (1) 747.0 635.7 2,073.5 1,794.0
United States 2,679.4 2,459.3 7,379.7 7,067.7
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3,426.4 3,095.0 9,453.2 8,861.7
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Network performance
- Retail sales
Canada (1)
Pharmacy 59% 58% 60% 59%
Front-end 41% 42% 40% 41%

United States
Pharmacy 72% 72% 73% 73%
Front-end 28% 28% 27% 27%

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



THE JEAN COUTU GROUP (PJC) INC.
Unaudited additional information
Periods ended March 3, 2007 and February 25, 2006
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14 weeks 13 weeks 40 weeks 39 weeks
2007 2006 2007 2006
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Retail sales growth (1)
Canada (2)
Total 8.5% 3.4% 7.7% 4.0%
Pharmacy 9.1% 7.4% 9.0% 6.7%
Front-end 7.9% (1.6)% 6.0% 0.3%

United States
Total 1.1% 0.2% 1.7% 21.8%
Pharmacy 1.3% 1.0% 2.1% 23.2%
Front-end 0.5% (1.6)% 0.5% 18.0%

Retail sales growth
- same store (1)
Canada (2)
Total 7.8% 3.3% 7.0% 3.9%
Pharmacy 8.6% 7.3% 8.5% 6.6%
Front-end 6.9% (1.6)% 5.0% 0.3%

United States (3)
Total 1.1% 1.5% 2.0% 0.5%
Pharmacy 1.4% 2.2% 2.5% 1.3%
Front-end 0.4% (0.1)% 0.7% (1.5)%

(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 includes same-store sales for the acquired Eckerd
corporate outlets as of August 1, 2005.



THE JEAN COUTU GROUP (PJC) INC.
Unaudited additional information
Periods ended March 3, 2007 and February 25, 2006
(In millions of US dollars)
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Non GAAP measures - Operating income before amortization ("OIBA") and
OIBA before restructuring charges

OIBA and OIBA before restructuring charges are not measures of
performance under Canadian generally accepted accounting principles
("GAAP"); however management uses those performance measures in
assessing the operating and financial performance of its reportable
segments. Besides, we believe that OIBA and OIBA before restructuring
charges are additional measures used by investors to evaluate
operating performance and capacity of a company to meet its financial
obligations.

However, OIBA and OIBA before restructuring charges are not and must
not be used as alternatives to net earnings or cash flow generated by
operating activities as defined by Canadian GAAP. OIBA and OIBA
before restructuring charges are not necessarily indications that
cash flow will be sufficient to meet our financial obligations.
Furthermore, our definitions of OIBA and OIBA before restructuring
charges may not be necessarily comparative to similar measures
reported by other companies.

Net earnings, which is a performance measure defined by Canadian
GAAP, is reconciled below with OIBA and OIBA before restructuring
charges.

14 weeks 13 weeks 40 weeks 39 weeks
2007 2006 2007 2006
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$ $ $ $

Net earnings 184.0 31.6 147.7 73.5
Financing expenses 52.1 52.8 147.9 152.2
Reversal of impairment
loss on assets held for
sale (108.0) - - -
Income taxes (recovery) 20.4 (9.5) 12.1 (45.1)
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Operating income 148.5 74.9 307.7 180.6
Amortization per
financial statements 3.3 61.2 63.7 183.2
Amortization of
incentives paid to
franchisees (1) 1.0 1.1 2.9 2.9
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Operating income before
amortization ("OIBA") 152.8 137.2 374.3 366.7
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Restructuring charges 8.2 - 28.5 -
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OIBA before
restructuring charges 161.0 137.2 402.8 366.7
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(1) Amortization of incentives paid to franchisees is grouped with
other revenues in the financial statements.



THE JEAN COUTU GROUP (PJC) INC.
Unaudited additional information
Periods ended March 3, 2007 and February 25, 2006
(Tabular amounts are in millions of US dollars except per share
amounts)
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Non GAAP measures - Earnings 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 and earnings 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.

14 weeks 13 weeks 40 weeks 39 weeks
2007 2006 2007 2006
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$ $ $ $

Net earnings 184.0 31.6 147.7 73.5
Restructuring charges 4.9 - 17.1 -
Reversal of amortization
of the retail sales
segment in consolidation (34.7) - (64.7) -
Unrealized foreign
exchange losses (gains)
on monetary items (6.7) 0.3 (9.0) (0.3)
Unrealized losses (gains)
on derivative financial
instruments 0.3 - (2.7) -
Reversal of impairment
loss on assets held
for sale (108.0) - - -
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Earnings before specific
items 39.8 31.9 88.4 73.2
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Earnings per share 0.70 0.12 0.56 0.28
Restructuring charges 0.02 - 0.07 -
Reversal of amortization
of the retail sales
segment in consolidation (0.13) - (0.25) -
Unrealized foreign
exchange losses (gains)
on monetary items (0.03) - (0.03) -
Unrealized losses
(gains) on derivative
financial instruments - - (0.01) -
Reversal of impairment
loss on assets held
for sale (0.41) - - -
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Earnings per share
before specific items 0.15 0.12 0.34 0.28
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Contact Information

  • Source:
    The Jean Coutu Group (PJC) Inc.
    or
    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
    Toll free: 1-866-878-5206