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

The Jean Coutu Group (PJC) Inc.

April 12, 2005 00:00 ET

The Jean Coutu Group - Third quarter Results - Eckerd Integration Progressing Well While Gross Margins Improve

LONGUEUIL, April 12 /CCNMatthews/ - The Jean Coutu Group (PJC) Inc. (the
"Company" or the "Jean Coutu Group") reported its third quarter 2004-2005
financial results today. Quarterly revenues are up by 258% year-over-year, 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)


39-Weeks 9-Months
Q3/2005 Q2/2005 Q3/2004 2005 2004
------------------------------------------------------------------------
-------------------------------------------------------------------------

Revenues 2,815,401 2,696,877 786,335 6,848,945 2,261,826
Operating income
before
amortization
("OIBA") 125,365 117,059 66,681 304,352 187,432
Net earnings
(loss) 39,854 (3,994) 36,035 58,162 100,079
Net earnings
(loss)
per share $0.15 $(0.02) $0.16 $0.23 $0.44
Earnings per
share before
unrealized
losses (gains)
on financing
activities $0.10 $0.06 $0.16 $0.26 $0.44


HIGHLIGHTS

- Gross margins improved to 23.1% during the third quarter ended February
26, 2005 from 22.6% in the second quarter.
- General and operating expenses stood at 19.9% of revenue in the third
quarter compared with 19.5% in the second quarter, reflecting the cost
of running several head office infrastructures for most of the latest
quarter. The Eckerd integration is on schedule with key milestones
completed during the quarter.
- Third quarter earnings before unrealized losses (gains) on financing
activities were $27.4 million ($0.10 per share) compared with $14.8
million ($0.06 per share) in the second quarter. During the current
quarter, there was a $11.9 million ($0.05 per share) unrealized foreign
exchange gain on monetary items related to the Eckerd acquisition. The
Company has reviewed these arrangements and their documentation in
order to ensure that all significant monetary items are properly hedged
against future foreign exchange risk.


"The Jean Coutu Group made considerable progress this quarter. We are
pleased with our performance while we complete the integration of Eckerd and
Brooks drugstores," said François J. Coutu, President and Chief Executive
Officer. "The American network contributed to revenue growth during the
quarter while we continued the focused execution of our plan. This quarter's
operating results were negatively affected by the costs of running several
head office infrastructures. We have made substantial progress at Eckerd and
Brooks and are on track to begin to capture the integration cost savings while
we continue to improve our US drugstore network performance. At the same time
we will continue to build on the strong base of our Canadian network."

Net earnings

For the third quarter, net earnings were $39.9 million ($0.15 per share)
compared with $36.0 million ($0.16 per share) for the third quarter of the
previous fiscal year and a net loss of $4.0 million ($0.02 per share) in the
second quarter of the current year. There was an unrealized foreign exchange
gain on monetary items of $11.9 million ($0.05 per share) recorded during the
current quarter. The Company has reviewed these arrangements and their
documentation in order to ensure that all significant monetary items are
properly hedged against future foreign exchange risk. Earnings before
unrealized gains on financing activities were $27.4 million ($0.10 per share)
in the third quarter compared with $14.8 million ($0.06 per share) in the
second quarter. The acquired Eckerd drugstores contributed to the substantial
increases in revenues, cost of goods sold and operating expenses year over
year.
Year-to-date earnings before unrealized losses on financing activities
were $66.4 million ($0.26 per share) compared to $100.1 million ($0.44 per
share) for the corresponding period last year. The unrealized foreign exchange
loss on monetary items for the first three quarters of fiscal 2005 was
$8.2 million ($0.03 per share), reflecting the loss until such arrangements
and documentation became effective.

Revenues

The revenues of the Company's Canadian operations for the third quarter
reached $359.4 million compared with $317.9 million for the third quarter of
the 2003-2004 fiscal year, an increase of $41.5 million or 13.0%. The third
quarter revenues decreased slightly from the second quarter revenues of
$365.7 million. Third quarter Canadian revenues increased by 6.0% year-over-
year excluding the impact of currency exchange rate fluctuations.
Our American operations generated revenues of $2.456 billion, an increase
of $1.988 billion or 424.3% over the third quarter of the previous fiscal
year. Third quarter revenues increased $125 million or 5.4% over the second
quarter 2005 revenues of $2.331 billion. The acquired Eckerd drugstores
contributed to the substantial increase in year-over-year revenues.
Year-to-date revenues increased by $4.587 billion or 202.8% to
$6.849 billion from $2.262 billion a year ago.

Retail sales

Retail sales figures quoted herein are denominated in local currency in
order to exclude the impact of currency rate fluctuations. In the third
quarter, the Company's Canadian franchise network showed a 5.7% increase in
sales compared with the same period last year. Third quarter network sales
increased by 5.3% compared with the second quarter. The American corporate
pharmacy network posted a 424.8% increase in sales when compared with the same
quarter of the 2003-2004 fiscal year and a 5.4% increase compared with the
second quarter.
In terms of comparable stores, the Canadian network's retail sales were
up 5.5% and in the United States, retail sales rose by 3.4% 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.
The Jean Coutu Group's Canadian franchise network recorded a 6.4%
increase in year-to-date sales. The American corporate pharmacy network posted
a 331.4% increase in retail sales when compared with the year-to-date figures
of the 2003-2004 fiscal year.

OIBA

In the third quarter, Operating income before amortization ("OIBA")
amounted to $125.4 million against $66.7 million for the corresponding quarter
last year. Third quarter OIBA increased by $8.3 million or 7.1% over the
second quarter figure of $117.1 million.
OIBA for the 39-weeks ended February 26, 2005 improved to $304.4 million
against $187.4 million for the corresponding period last year.

Store network development

During the third quarter, 28 drugstores were opened, of which 15 were
relocations. Also, 7 drugstores were closed. At quarter-end, there were 2,231
stores in the system, comprised of 321 Canadian PJC stores, and 1,910 Eckerd
and Brooks drugstores in the United States.

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

Like several retail companies, we have begun the 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. Even though
we expect that this review will not have a significant impact on our results
or shareholders' equity, there is a possibility that it will result in
adjustments to our financial statements for the current and prior years. We
expect to complete this review by the end of the 2005 fiscal year. This review
will not have an effect on our cash flows.

Outlook

The Company operates its Canadian and US networks with a focus on sales
growth, network renovation, relocation and expansion projects and operating
efficiency. The Company has completed many aspects of the 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 1,130 positions. As a
result, accountability and productivity has been enhanced with the
streamlining of operations. The Company will continue to move toward
the right sized support structure as it reduces dual infrastructures.
To date, key financial systems have been converted and integrated,
with operating and other systems to come. At the same time, efforts
are being made to optimize logistics and supply chain efficiency. The
Company closed a distribution warehouse and renewed an expanded
pharmaceutical supply agreement with McKesson Corporation.

- Operational improvements
The Company continues to implement plans, processes and deploy people
to reduce inventory shrink and reallocate store labour hours to
better serve customer needs.

- Growth initiatives
Customer focused initiatives have been taken and will continue to be
implemented to enhance merchandising mix, simplify advertising and
initiate new marketing programs, extend store hours, improve pharmacy
service, expand the sales of health & beauty categories and private
label while continuing to refine its pricing strategy. The goal is to
increase sales based on quality of offering and customer service
levels.

The Eckerd and Brooks drugstore network is operational and making good
progress. The Company can now begin to capture the integration cost savings
while it continues to improve the performance of its US drugstore network. At
the same time it will continue to build on the strong base of its Canadian
network.

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 12, 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 April 28, 2005.

Conference call

Financial analysts are invited to attend the Third Quarter Results
conference call to be held on Tuesday, April 12, 2005 at 9:00 AM Eastern Time.
The toll free call-in number is 1-888-345-1250. 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 3146569 (pound sign) until
May 13, 2005.
Supporting documentation (financial statements, management's discussion
and analysis, 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 2,231 corporate and franchised
drugstores (under the banners of Eckerd and Brooks 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 over 46,000
persons and comprise 1,910 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.
Unaudited consolidated statements of earnings
(in thousands of US dollars except for per share amounts)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

13 weeks 3 months 39 weeks 9 months
ended ended ended ended
February February February February
26, 29, 26, 29,
2005 2004 2005 2004
------------------------------------------------------
$ $ $ $
(restated) (restated)

Sales 2,771,230 747,103 6,722,777 2,148,156
Other revenues 44,171 39,232 126,168 113,670
-------------------------------------------------------------------------
2,815,401 786,335 6,848,945 2,261,826
-------------------------------------------------------------------------
Operating expenses
Cost of goods sold 2,129,709 604,001 5,211,765 1,740,664
General and operating
expenses 561,247 116,488 1,335,474 336,184
Amortization 57,412 9,627 138,298 28,038
-------------------------------------------------------------------------
2,748,368 730,116 6,685,537 2,104,886
-------------------------------------------------------------------------
Operating income 67,033 56,219 163,408 156,940
-------------------------------------------------------------------------
Financing expenses
Interest on
long-term debt 46,873 2,874 106,722 8,929
Unrealized foreign
exchange loss (gain) on
monetary items (11,879) - 8,221 -
Other financing expenses, net (2,149) 881 (345) 2,255
-------------------------------------------------------------------------
32,845 3,755 114,598 11,184
-------------------------------------------------------------------------
Earnings before income taxes 34,188 52,464 48,810 145,756
Income taxes (5,666) 16,429 (9,352) 45,677
-------------------------------------------------------------------------
Net earnings 39,854 36,035 58,162 100,079
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net earnings per share(Note 3)
Basic 0.15 0.16 0.23 0.44
Diluted 0.15 0.16 0.23 0.44
-------------------------------------------------------------------------
-------------------------------------------------------------------------


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


THE JEAN COUTU GROUP (PJC) INC.
Unaudited consolidated statements of retained earnings
(in thousands of US dollars)
-------------------------------------------------------------------------
-------------------------------------------------------------------------


13 weeks 3 months 39 weeks 9 months
ended ended ended ended
February February February February
26, 29, 26, 29,
2005 2004 2005 2004
------------------------------------------------------
$ $ $ $
(restated) (restated)

Balance,
beginning of period
As previously reported 714,316 656,776 709,419 602,093
accounting policies
(Note 2)
accounting policies
(Note 2 a & c) - (6,629) (867) (5,945)
-------------------------------------------------------------------------
Restated balance 714,316 650,147 708,552 596,148
Net earnings 39,854 36,035 58,162 100,079
-------------------------------------------------------------------------
754,170 686,182 766,714 696,227
Dividends 6,427 5,187 18,971 15,232
-------------------------------------------------------------------------
Balance, end of period 747,743 680,995 747,743 680,995
-------------------------------------------------------------------------
-------------------------------------------------------------------------


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


THE JEAN COUTU GROUP (PJC) INC.
Consolidated balance sheets
(in thousands of US dollars)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

As at As at
February May
26, 31,
2005 2004
-------------------------------------------------------------------------
$ $

(unaudited) (audited)
(restated)

Assets
Current assets
Cash 195,976 14,554
Accounts receivable 465,943 199,516
Inventories 1,697,389 391,916
Prepaid expenses 57,699 12,235
Income taxes receivable 30,667 -
Future income taxes 19 10,220
-------------------------------------------------------------------------
2,447,693 628,441
Investments 19,953 21,298
Capital assets 1,565,303 544,174
Intangible assets 745,209 19,277
Goodwill 698,432 95,330
Other long-term assets 109,284 35,234
-------------------------------------------------------------------------
5,585,874 1,343,754
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities
Current liabilities
Bank loans 15,000 15,000
Accounts payable and accrued liabilities 1,039,180 231,306
Income taxes payable - 42,004
Future income taxes 93,432 -
Current portion of long term debt 52,234 22,566
-------------------------------------------------------------------------
1,199,846 310,876
Long-term debt 2,522,585 169,609
Other long-term liabilities(Note 4) 484,815 9,826
-------------------------------------------------------------------------
4,207,246 490,311
-------------------------------------------------------------------------
Guarantees and commitments(Notes 7 and 9)

Shareholders' equity
Capital stock(Note 5) 576,045 144,996
Contributed surplus 617 188
Retained earnings 747,743 708,552
Foreign currency translation adjustments 54,223 (293)
1,378,628 853,443
-------------------------------------------------------------------------
5,585,874 1,343,754
-------------------------------------------------------------------------
-------------------------------------------------------------------------

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

THE JEAN COUTU GROUP (PJC) INC.
Unaudited consolidated statements of cash flows
(in thousands of US dollars)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

13 weeks 3 months 39 weeks 9 months
ended ended ended ended
February February February February
26, 29, 26, 29,
2005 2004 2005 2004
------------------------------------------------------
$ $ $ $
(restated) (restated)
Operating activities
Net earnings 39,854 36,035 58,162 100,079
Items not affecting cash
Amortization 57,412 9,627 138,298 28,038
Amortization of
incentives paid to
franchisees 920 835 2,646 2,454
Amortization of deferred
financing fees 2,683 286 7,114 857
Unrealized foreign
exchange loss (gain) on
monetary items (11,879) - 8,221 -
Future income taxes 3,952 (4,262) 7,554 (11,933)
Other (342) (5) 834 77
-------------------------------------------------------------------------
92,600 42,516 222,829 119,572
Net changes in non-cash
asset and liability items (14,713) (19,590) (92,207) (918)
-------------------------------------------------------------------------
Net cash provided by
operating activities 77,887 22,926 130,622 118,654
-------------------------------------------------------------------------
Investing activities
Business acquisitions
(Note 9) (955) - (2,514,650) (3,910)
Investments 5,155 (2,969) 6,616 (7,517)
Purchase of
capital assets (58,504) (17,988) (132,598) (56,303)
Proceeds from the
disposal of
capital assets 4,203 936 8,607 1,500
Intangible assets (2,005) (16) (3,034) (222)
Other long-term assets (1,668) (617) (82,102) (3,926)
-------------------------------------------------------------------------
Net cash used in
investing activities (53,774) (20,654) (2,717,161) (70,378)
-------------------------------------------------------------------------
Financing activities
Changes in bank loans 15,000 19,632 - (2,765)
Changes in
long-term debt (10,852) (5,219) 2,349,660 (16,088)
Issuance of
capital stock 927 72 425,037 2,040
Dividends (6,427) (5,187) (18,971) (15,232)
-------------------------------------------------------------------------
Net cash provided by
(used in) financing
activities (1,352) 9,298 2,755,726 (32,045)
-------------------------------------------------------------------------
Foreign currency
translation adjustments (4,942) (2,596) 12,235 1,349
-------------------------------------------------------------------------
Increase in cash 17,819 8,974 181,422 17,580
Cash (bank overdraft),
beginning of period 178,157 333 14,554 (8,273)
-------------------------------------------------------------------------
Cash, end of period 195,976 9,307 195,976 9,307
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Additional cash
flow information
Interest paid 69,207 3,398 87,039 10,711
Income taxes paid 1,319 10,717 47,088 28,784


The segmented information and the accompanying notes are an integral part
of these unaudited interim


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

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 centre 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.

13 weeks 3 months 39 weeks 9 months
ended ended ended ended
February February February February
26, 29, 26, 29,
2005 2004 2005 2004
------------------------------------------------------
$ $ $ $
Segmented information is
is summarized as follows: (restated) (restated)
Revenues(1)
Franchising 359,371 317,904 1,037,619 910,928
Retail sales 2,456,030 468,431 5,811,326 1,350,898
-------------------------------------------------------------------------
2,815,401 786,335 6,848,945 2,261,826
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Operating income
before amortization
Franchising 37,053 35,467 106,450 101,430
Retail sales 88,312 31,214 197,902 86,002
-------------------------------------------------------------------------
125,365 66,681 304,352 187,432
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Amortization
Franchising(2) 3,630 2,573 10,287 7,437
Retail sales 54,702 7,889 130,657 23,055
-------------------------------------------------------------------------
58,332 10,462 140,944 30,492
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Operating income
Franchising 33,423 32,894 96,163 93,993
Retail sales 33,610 23,325 67,245 62,947
-------------------------------------------------------------------------
67,033 56,219 163,408 156,940
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Acquisition of capital assets
and intangible assets (3)
Franchising 5,582 11,249 16,051 22,229
Retail sales 54,927 6,755 119,581 34,361
-------------------------------------------------------------------------
60,509 18,004 135,632 56,590
-------------------------------------------------------------------------
-------------------------------------------------------------------------

As at
February As at
26, May 31,
2005 2004
-----------------------
$ $
Total assets (restated)
Franchising 722,346 464,758
Retail sales 4,863,528 878,996
-------------------------------------------------------------------------
5,585,874 1,343,754
-------------------------------------------------------------------------
-------------------------------------------------------------------------

(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 network
performance, margins and sales growth)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

As at
February As at
26, May 31,
2005 2004
-----------------------
$ $

Capital assets, intangible assets and goodwill
Canada 292,282 254,661
United States 2,716,662 404,120
-------------------------------------------------------------------------
3,008,944 658,781
-------------------------------------------------------------------------
-------------------------------------------------------------------------


13 weeks 3 months 39 weeks 9 months
ended ended ended ended
February February February February
26, 29, 26, 29,
2005 2004 2005 2004
------------------------------------------------------
$ $ $ $

Revenues(1)
Canada 359,371 317,904 1,037,619 910,928
United States 2,456,030 468,431 5,811,326 1,350,898
-------------------------------------------------------------------------
2,815,401 786,335 6,848,945 2,261,826
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Gross profit(2)
Canada 29,975 26,861 85,970 76,717
United States 611,546 116,241 1,425,042 330,775
-------------------------------------------------------------------------
641,521 143,102 1,511,012 407,492
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Gross margin as a % of sales
Canada 9.4% 9.6% 9.3% 9.6%
United States 24.9% 24.9% 24.6% 24.6%
Number of outlets
Beginning of period 2,225 651 655 643
Openings 28 3 84 15
Acquisitions - - 1,549 -
Relocations (15) (1) (45) (5)
Closings (7) (1) (12) (1)
-------------------------------------------------------------------------
End of period 2,231 652 2,231 652
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Network performance -
Retail sales
Canada(3) 583,142 515,048 1,608,115 1,443,651
United States 2,453,058 467,392 5,802,827 1,345,223
-------------------------------------------------------------------------
3,036,200 982,440 7,410,942 2,788,874
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Network performance -
Retail sales
Pharmacy
Canada(3) 56% 55% 57% 56%
United States 71% 67% 72% 68%
Front-end
Canada(3) 44% 45% 43% 44%
United States 29% 33% 28% 32%
Retail sales growth(4)
Total
Canada(3) 5.7% 9.6% 6.4% 8.0%
United States 424.8% 4.2% 331.4% 4.5%
Front-end
Canada(3) 3.3% 6.8% 2.3% 3.6%
United States 356.9% 1.8% 278.4% 3.1%
Pharmacy
Canada(3) 7.5% 11.4% 9.3% 11.4%
United States 458.2% 5.4% 355.9% 5.2%
Retail sales growth -
same store(4)
Total
Canada(3) 5.5% 8.3% 5.9% 7.1%
United States(5) 3.4% 4.0% 3.0% 4.3%
Front-end
Canada(3) 3.2% 5.0% 1.9% 2.7%
United States (5) 2.2% 1.2% 0.5% 2.7%
Pharmacy
Canada(3) 7.3% 10.5% 8.8% 10.6%
United States(5) 4.0% 5.4% 4.2% 5.1%

(1) Revenues include sales and other revenues
(2) Gross profit is sales less cost of goods sold
(3) Franchised's outlet retail sales are not included in the Company's
consolidated financial statements
(4) Growth is calculated in local currency and is based on comparable
periods.
(5) 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 )
-------------------------------------------------------------------------
-------------------------------------------------------------------------

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

Operating income before amortization 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
operating income before amortization is an additional measurement used by
investors to evaluate operating performance and capacity of a company to meet
its financial obligations. However, operating income before amortization is
not and must not be used as alternative to net earnings or cash flow generated
by operating activities as defined by Canadian GAAP. Operating income before
amortization is not necessarily an indication that cash flow will be
sufficient to meet our financial obligations. Further, our definition of
operating income before amortization 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 operating income before amortization.


13 weeks 3 months 39 weeks 9 months
ended ended ended ended
February February February February
26, 29, 26, 29,
2005 2004 2005 2004
------------------------------------------------------
$ $ $ $

Net earnings 39,854 36,035 58,162 100,079
Interest on long-term debt 46,873 2,874 106,722 8,929
Unrealized foreign exchange
loss (gain) on
monetary items (11,879) - 8,221 -
Other financing
expenses, net (2,149) 881 (345) 2,255
Income taxes (5,666) 16,429 (9,352) 45,677
-------------------------------------------------------------------------
Operating income 67,033 56,219 163,408 156,940
Amortization 57,412 9,627 138,298 28,038
Amortization of
incentives paid
to franchisees 920 835 2,646 2,454
-------------------------------------------------------------------------
Operating income before
amortization 125,365 66,681 304,352 187,432
-------------------------------------------------------------------------
-------------------------------------------------------------------------


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. All
amounts are net of income taxes when applicable.


13 weeks 3 months 39 weeks 9 months
ended ended ended ended
February February February February
26, 29, 26, 29,
2005 2004 2005 2004
------------------------------------------------------
$ $ $ $

Net earnings 39,854 36,035 58,162 100,079
Unrealized gain
on derivative financial
instruments (610) - - -
Unrealized foreign
exchange loss (gain) on
monetary items (11,879) - 8,221 -
-------------------------------------------------------------------------
Earnings before
unrealized losses
(gains) on financing
activities 27,365 36,035 66,383 100,079
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Net earnings per share 0.15 0.16 0.23 0.44
Unrealized losses
(gains) on financing
activities (0.05) - 0.03 -
Earnings per share
before unrealized
losses (gains) on
financing activities 0.10 0.16 0.26 0.44
-------------------------------------------------------------------------
-------------------------------------------------------------------------
>>

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 measured 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. Monetary
assets and liabilities are translated at the exchange rate in effect at the
balance sheet date, and non-monetary assets and liabilities at historical
rates. All exchange gains and losses on monetary items are current in nature
and are included in the statement of earnings.
The weakening of the Canadian dollar against the US dollar, from $0.8493
as at November 27, 2004 to $0.8060 as at February 26, 2005, resulted in the
Company recording an unrealized foreign exchange gain on monetary items of
$11.9 million during the third quarter of fiscal 2005. This gain is
attributable to US dollar net monetary assets held by the parent company for
the benefit of its US subsidiaries. In order to avoid the impact of these
foreign currency fluctuations in the future, the Company's has reviewed these
arrangements and their documentation in order to ensure that all significant
monetary items are properly hedged against future foreign exchange risk. The
year-to-date unrealized foreign exchange loss on monetary items amounted to
$8.2 million, reflecting the loss until such arrangements and documentation
became effective.



For further information: Michael Murray, Director, Investor Relations,
The Jean Coutu Group (PJC), Inc., (450) 646-9760; Hélène Bisson, Media and
Public Relations, (514) 842-8860, ext. 343; Source: André Belzile, Senior
Vice-President Finance and Corporate Affairs, The Jean Coutu Group (PJC),
Inc., (450) 646-9760