Paragon Pharmacies Limited

Paragon Pharmacies Limited

November 18, 2011 13:26 ET

Paragon Pharmacies Limited Reports Fiscal 2011 Financial Results

KELOWNA, BRITISH COLUMBIA--(Marketwire - Nov. 18, 2011) - Paragon Pharmacies Limited (TSX VENTURE:PGN) ("Paragon" or "the Company") today reported its financial results for the fiscal year ended August 31, 2011.

Fiscal 2011 showed steady improvement of store performance through-out the year as a result of continued redevelopment of our retail programs. Additional focus was also spent improving compliance controls, and information systems to improve management's ability to monitor the Company's progress. More favorable supply agreements and enhanced operational cost controls have improved operating income and we believe we are now well positioned to increase EBITDA in 2012," said R. Gordon Gooding, Chief Executive Officer.

Revenue for the year ended August 31, 2011 was $76.688 million compared to $82.217 million in the prior year. Pharmacy revenue was impacted by reductions in generic drug prices, primarily due to regulatory reform implemented in British Columbia, combined with increased generic prescription utilization rates. Front store revenue continued to be impacted by competitive pressures in fiscal 2011, although the Company saw strengthening comparable store trends in the fourth quarter.

Operating income, as defined, was $8.336 million compared to $8.278 million in the prior year, an increase of $0.058 million or 0.7%. This increase was a result of continued operating cost containment initiatives and stronger gross margins as a percentage of revenue for both pharmacy and front store operations, which was offset by the revenue impacts noted above.

EBITDA, as defined, was $2.861 million for fiscal 2011 compared to $3.559 million in the prior year, a decrease of $0.698 million or 19.6%. In addition to the downward pressure on revenue which was offset by strengthening gross margin, the Company incurred increased corporate costs.

The net loss for the fiscal year ending August 31, 2011 was $3.238 million, compared to $2.594 million in the prior year. This increased net loss of 0.644 million or 24.8% is primarily due to the reasons noted in EBITDA above along with an increase in amortization.

The pharmacy industry continues to face ongoing regulatory change which will alter the way generic drugs are priced. The Company's assessment of these changes is more fully described in Management's Discussion & Analysis for the fiscal year ended August 31, 2011 in the section entitled Regulatory
Changes That Impact the Company's Industry

The Company's audited consolidated financial statements and Management's Discussion and Analysis for the fiscal year ended August 31, 2011 are available at the Investor Relations section of Paragon's website at or under the Company's profile on SEDAR at

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.


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 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 (FAX)