Paragon Pharmacies Limited
TSX VENTURE : PGN

Paragon Pharmacies Limited

July 21, 2011 17:45 ET

Paragon Pharmacies Limited Reports Third Quarter Results

KELOWNA, BRITISH COLUMBIA--(Marketwire - July 21, 2011) - Paragon Pharmacies Limited (TSX VENTURE:PGN) ("Paragon" or "the Company") today reported its financial results for the third quarter ended May 31, 2011.

R. Gordon Gooding, Chief Executive Officer, said "While the third quarter did not see anticipated results, Paragon continues to move forward with positive initiatives that were introduced in the previous quarters. Construction of a medical and aesthetics clinic adjacent to one of our Calgary locations, which is comprised of six doctors, was completed. The development of a health and wellness focused offering, including health and wellness seminars, is nearing finalization. These, together with potential acquisition targets, a strong focus on improving performance and enhanced in-store execution continue to build customer loyalty and offer the foundation for future growth."

Revenue for the three-month period was $19.096 million compared to $21.025 million in the same period last year. This 9.2% 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, combined with increased generic prescription utilization rates.

Operating income, as defined, was $1.631 million in the third quarter compared to $2.151 million in the same period last year, a 24.2% decrease. This decrease is a result of a decline in contribution from lower sales offset by cost containment initiatives.

EBITDA, as defined, was $0.438 million in the third quarter compared to $0.890 million in the same period last year, a decrease of $0.452 million or 50.8%. The decrease in EBITDA was primarily the result of decreased revenue and the resulting decline in gross margin.

The net loss for the third quarter was $1.148 million compared to a net loss of $0.584 million in the same period last year, an increase in net loss of $0.564 million or 96.6%. 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 nine month periods ended May 31, 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 (FAX)
    www.helloparagon.com