Paragon Pharmacies Limited
TSX VENTURE : PGN

Paragon Pharmacies Limited

July 23, 2009 17:46 ET

Paragon Pharmacies Limited Announces Third Quarter Earnings

KELOWNA, BRITISH COLUMBIA--(Marketwire - July 23, 2009) - Paragon Pharmacies Limited ("Paragon" or "the Corporation") (TSX VENTURE:PGN) today reported its financial results for the third quarter ending May 31, 2009.

Revenue was $21.615 million compared to $22.357 million in the same period last year, a decrease of 3.3 per cent. Third quarter gross margin was $8.276 million or 38.3 per cent, an increase of 1.5 per cent over last year.

Operating income was $2.608 million, compared to $1.790 million in the same period last year, an increase of 45.7 per cent. The increase was primarily the result of a reduction in operating expenses. The net earnings for the quarter was $0.071 million compared to a net loss of ($2.406) million in the same period last year. This improvement was principally due to the conversion of the debenture in the first quarter.

In the third quarter, the Corporation began re-signing, repainting and refreshing the nine stores in Alberta. The redevelopment of the Airdrie, AB location progressed, with the planned opening date in the new location to be late July. These achievements, in conjunction with the re-branding marketing initiatives, will reinforce the Paragon brand in the Alberta marketplace.

Store improvements together with a focus on refining processes and streamlining costs as well as ongoing investment into store renovations and information technology, will enable Paragon Pharmacies to pursue its business strategy to grow into one of Canada's premier mid-market pharmacy chains.

Lorraine McGrath, President, said, "We are building a pharmacy chain with our customers in mind. An integral part of Paragon's success is our people who are the heart and soul of our brand, who serve our customers with care and compassion and who are key to Paragon achieving its goal of growing and developing the Company."

The Corporation's unaudited consolidated financial statements and Management's Discussion and Analysis for the three month period ended May 31, 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 Pharmacies is building a pharmacy with our customers in mind. Headquartered in Kelowna, BC and currently employing over 400 staff, Paragon currently owns and operates 18 retail pharmacies and three central fill pharmacies throughout British Columbia, Alberta and Manitoba. Paragon is a leading mid-market pharmacy, providing premier pharmacy services in a friendly, community-focused environment.

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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