Paragon Pharmacies Limited
TSX VENTURE : PGN

Paragon Pharmacies Limited

April 21, 2011 17:23 ET

Paragon Pharmacies Limited Reports Continued Improved Operating Income

KELOWNA, BRITISH COLUMBIA--(Marketwire - April 21, 2011) - Paragon Pharmacies Limited (TSX VENTURE:PGN)("Paragon" or "the Company") today reported its financial results for the second quarter ended February 28, 2011.

R. Gordon Gooding, Chief Executive Officer, said "The second quarter saw a continued improvement in store operating income and increased gross margin rates. To improve future sales trends, the Company has strengthened its senior leadership team, and is initiating a restructuring of front store strategy and execution. Improving performance combined with initiatives such as construction of a new 5,500 sq. ft. medical clinic in Alberta, and the ongoing discussions with potential acquisition targets provides the foundation for future growth."

Operating income, as defined, was $2.229 million in the second quarter compared to $2.008 million in the same period last year, an increase of 11.0%. This increase is a result of improved gross margin and cost containment initiatives.

Revenue for the three-month period was $20.034million compared to $20.865millionin the same period last year. This4.0% decrease was the result of a decline in comparable front store and pharmacy revenue. Pharmacy revenue was impacted by reductions in generic prescription reimbursement rates, primarily due to regulatory reform implemented in British Columbia in the first quarter of 2011, combined with increased generic prescription utilization rates.

EBITDA, as defined, was $0.813 million in the second quarter compared to $0.976 million in the same period last year, a decrease of $0.163 million or 16.7%. The decrease inEBITDAwas due to increased corporate overheadincurred as the Company assembles the resources required to position the Company for future growth.

The net loss for the second quarter was $0.640 million compared to a netloss of $0.464 million in the same period last year, an increase in net loss of $0.176 million or 37.9%. This change is primarily due to the reasons noted in EBITDA above along with an increase in amortization.

The Company's unaudited consolidated financial statements and Management's Discussion and Analysis for the three and six month periods ended February 28, 2011 are available at the Investor Relations section of Paragon's website at www.helloparagon.com or under the Company's profile on SEDAR at www.sedar.com.

Paragon Pharmacies Limited is building a pharmacy with our customers in mind. Headquartered in Kelowna, BC and employing over 400 staff, Paragon currently owns and operates 19 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 ability 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.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Paragon Pharmacies Limited
    R. Gordon Gooding, CA
    Chief Executive Officer
    (250) 868-8400
    (250) 868-8402
    www.helloparagon.com