KELOWNA, BRITISH COLUMBIA--(Marketwire - July 26, 2012) - Paragon Pharmacies Limited ("Paragon" or "the Company") (TSX VENTURE:PGN) today reported its financial results for the third quarter ended May 31, 2012.
"The commitment and focus from the entire Paragon team has continued to bring a significant improvement in the operating results for the Company. Prior to transaction costs, EBITDA for the first nine months of the fiscal year was up 56.0% from the previous year. We anticipate that the strong EBITDA performance prior to transaction costs will continue through to the completion of the sale of the Company's assets to Shoppers Drug Mart." said R. Gordon Gooding, Chief Executive Officer.
Revenue for the three month period was $19.261 million compared to $18.835 million in the same period last year. Comparable store pharmacy revenue was impacted 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. These impacts were slightly offset by the second consecutive quarter of positive trends in prescription growth over the same period last year. Front store revenue, excluding post office and other revenue, increased by 5.3% with a continued focus on strengthening the Company's merchandising and promotional offerings.
Gross profit for the three month period was $8.060 million compared to $7.379 million in the same period last year, an increase of $0.681 million or 9.2%. Pharmacy margins as a percentage of revenue increased 4.2% 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 1.3% in the third quarter compared to the same period last year as a result of changes in product mix.
EBITDA before transaction costs was $1.169 million for the three months ended May 31, 2012 compared to $0.428 million in the same period last year, an increase of $0.741 million or 173.1%. The increase in EBITDA is due to higher pharmacy gross profit and the execution of operating cost containment initiatives.
The net loss for the third quarter, before transaction costs was $0.156 million compared to $1.140 million in the same period last year, a decrease in the net loss of $0.984 million or 86.3%.
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 third quarter ended May 31, 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 nine month periods ended May 31, 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.