Paragon Pharmacies Limited
TSX VENTURE : PGN

Paragon Pharmacies Limited

April 19, 2012 18:31 ET

Paragon Pharmacies Limited Reports Second Quarter Financial Results

KELOWNA, BRITISH COLUMBIA--(Marketwire - April 19, 2012) - Paragon Pharmacies Limited ("Paragon" or "the Company") (TSX VENTURE:PGN) today reported its financial results for the second quarter ended February 29, 2012.

"The continued commitment and focus from the entire Paragon team has brought about a significant improvement in the results for the first half of the fiscal year and in particular the 2nd quarter. The increase in first half of the fiscal year's EBITDA by 19.5% over the previous year was highlighted by an increase in EBITDA in the second quarter of 39.4%. We anticipate that EBITDA performance will continue to strengthen compared to the previous year over the rest of the fiscal year." said R. Gordon Gooding, Chief Executive Officer.

Revenue for the three month period was $19.680 million compared to $19.725 million in the same period last year. Comparable store pharmacy revenue was down 1.4% impacted mainly by reductions in generic drug prices due to regulatory reform in British Columbia and the shift of additional molecules from brand to the lower priced generic alternatives. Front store revenue, excluding post office and other revenue, increased by 4.1% with a continued focus on strengthening the Company's merchandising and promotional offerings.

Gross profit for the three month period was $8.253 million compared to $7.868 million in the same period last year, an increase of $0.385 million or 4.9%. Pharmacy margins as a percentage of revenue increased 3.5% over the same quarter last year as a result of new supply and purchase agreements with certain suppliers. Front store margins as a percentage of revenue decreased 2.2% in the second quarter compared to the same period last year as a result of increased seasonal promotional offerings.

EBITDA was $1.295 million for the three months ended February 29, 2012 compared to $0.929 million in the same period last year, an increase of $0.366 million or 39.4%. The improved EBITDA trend was primarily the result of higher pharmacy gross profit and the execution of continued operating cost containment initiatives.

The net loss for the second quarter was $0.047 million, compared to $0.638 million in the same period last year, a decrease in the net loss of $0.591 million or 92.6%. This decrease in the net loss is primarily due to stronger EBITDA results and a reduction in depreciation and 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 second quarter ended February 29, 2012 in the section entitled Regulatory Changes That Impact the Company's Industry.

The Company's unaudited condensed consolidated financial statements and Management's Discussion and Analysis for the three and six month periods ended February 29, 2012 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 (FAX)
    www.helloparagon.com