Paragon Pharmacies Limited
TSX VENTURE : PGN

Paragon Pharmacies Limited

April 29, 2009 15:42 ET

Paragon Pharmacies Limited Announces Second Quarter Results

KELOWNA, BRITISH COLUMBIA--(Marketwire - April 29, 2009) - Paragon Pharmacies Limited ("Paragon" or "the Corporation") (TSX VENTURE:PGN) today reported its financial results for the second quarter ending February 28, 2009.

Revenue was $22.204 million compared to $21.589 million in the same period last year, an increase of 2.8 per cent. Second quarter Gross margin was $7.846 million or 35.3 per cent, an increase of 0.7 per cent over last year.

Operating income was $2.147 million, compared to $1.927 million in the same period last year, an increase of 11.4 per cent. This was a result of the acquisitions completed in the second quarter of 2008. The net loss for the quarter was $0.411 million compared to a net loss of $1.797 million in the same period last year. The decrease is principally attributed to the decreased interest and accretion expense on the convertible debenture.

In the second quarter, the Corporation focused on, among other things, creating resilience to economic volatility as well working towards implementing a program to align key metrics with industry best practices. This internal focus has set the stage for the Corporation to concentrate on preparing Paragon for growth in both the top and bottom line.

Paragon also initiated the consolidation of its front store purchasing practices through a central buying group based in Calgary. This inventory management plan will be complemented by the standardization of purchasing and pricing models. In addition, the Corporation initiated a review of its brand and visual identity in preparation for rebranding its Alberta stores. Finally, during the quarter, the Corporation began the redevelopment of its Airdrie, Alberta store. The new location is expected to open in June 2009.

"Paragon continues to build on its strong fundamentals to manage the current economic challenges and embrace opportunities for development," said Lorraine McGrath, President. "While the financial results are encouraging, our efforts must continue as we further expand the Corporation's strong customer service mandate and community commitment, all the while providing enduring value for shareholders."

The Corporation's unaudited consolidated financial statements and Management's Discussion and Analysis for the three month period ended February 28, 2009 are available at the Investor Relations section of Paragon's website at www.paragonpharmacies.com or under the Corporation's profile on SEDAR at www.sedar.com.

Paragon is headquartered in Kelowna, British Columbia and currently employs over 450 full and part time staff in its stores and offices. The Corporation owns and operates 18.5 retail pharmacies, three central fill pharmacies and one home healthcare operation in British Columbia, Alberta and Manitoba. Paragon prides itself in providing a friendly neighbourhood pharmacy experience of comprehensive health care solutions.

FORWARD LOOKING STATEMENTS

This press release contains forward-looking statements regarding, among other things, the Company's beliefs, plans, objectives, strategies, estimates, intentions and expectations, including as they relate to its operating and financial results, capital expenditures and the ability to execute on its operating, investing and financing strategies. Consequently, actual results and events may differ materially from those included in, contemplated or implied by such forward looking statements for a variety of reasons. Forward-looking statements are subject to inherent risks and uncertainties including, but not limited to, market and general economic conditions, certain property and casualty risks, the availability to attract and retain pharmacists, the availability and terms of financing, changes in the Company's relationship with its key suppliers, competitive factors, changes in regulatory environments affecting the Company's business, and the accuracy in management's assumptions (see "RISKS AND RISK MANAGEMENT" as noted in the Company's Management's Discussion & Analysis posted on SEDAR at www.sedar.com). This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. Investors and others should carefully consider these and other factors and not place undue reliance on these forward-looking statements. In addition, these forward-looking statements relate to the date on which they were made and the Company disclaims and has no intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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