The Jean Coutu Group (PJC) Inc.
TSX : PJC.A

The Jean Coutu Group (PJC) Inc.

April 29, 2008 07:00 ET

The Jean Coutu Group: Third Quarter and Fiscal Year Results

- Reports Third Quarter Earnings Before Specific Items and Share of Rite Aid's Loss of $0.12 per share - Reports Fiscal 2008 Earnings Before Specific Items and Share of Rite Aid's Loss of $0.41 per share

LONGUEUIL, QUEBEC--(Marketwire - April 29, 2008) - The Jean Coutu Group (PJC) Inc. (TSX:PJC.A) (the "Company" or the "Jean Coutu Group") today reported its financial results for the third quarter and fiscal year ended March 1, 2008.



SUMMARY OF RESULTS
(Unaudited, in millions of Canadian dollars except per share amounts)

----------------------------------------------------------------------
13 weeks & 14 weeks & 39 weeks & 40 weeks
Q3-2008 Q3-2007 Fiscal 2008 2007
----------------------------------------------------------------------

Revenues
Canada 553.0 571.0 1,676.3 1,597.3
United States - 3,125.5 - 8,410.8
----------------------------------------------------------------------
553.0 3,696.5 1,676.3 10,008.1
----------------------------------------------------------------------
----------------------------------------------------------------------

Operating income
before amortization
("OIBA")
Canada 56.5 58.5 169.6 161.2
United States - 119.1 - 265.1
----------------------------------------------------------------------
56.5 177.6 169.6 426.3
----------------------------------------------------------------------
----------------------------------------------------------------------

Share of loss of Rite
Aid Corporation 332.1 - 393.3 -

Net earnings (loss) (269.2) 232.1 (251.4) 168.9
Per share (1.08) 0.89 (0.98) 0.65

Earnings before specific
items and share of
Rite Aid's loss 32.3 46.0 107.0 100.5
Per share 0.12 0.18 0.41 0.39
----------------------------------------------------------------------


HIGHLIGHTS

- Canadian network sales and operating performance continued to perform well during the 13-week third quarter ended March 1, 2008. Revenues, which amounted to $553.0 million, increased by 4.3% over the like 13-week period last year. OIBA amounting to $56.5 million increased by 4.1% over the same 13-week period.

- The Company recorded its share of Rite Aid's results during the third quarter of fiscal 2008, which amounted to a loss of $332.1 million ($1.19 after-tax per Jean Coutu Group share). Earnings before specific items and share of Rite Aid's loss amounted to $0.12 per share in the third quarter of fiscal 2008.

- During the third quarter of fiscal 2008, the Company purchased 2,758,100 Class A subordinate voting shares at an average price of $11.13 per share for a total amount of $30.7 million under a Normal Course Issuer Bid.

Financial results

"We are satisfied with our third quarter Canadian network revenue and operating performance. Pharmacy sales showed robust growth while front end sales were affected by a milder flu season, which impacted sales of non-prescription drugs," said Francois J. Coutu, President and Chief Executive Officer. "Rite Aid made good progress on the integration of its acquired Brooks Eckerd drugstore network and these stores showed improving trends. They expect to complete the integration by the fall of calendar 2008. We look forward to continuing to build upon The Jean Coutu Group's position as a leader in pharmacy as we implement our strategic plan."

Net earnings

For the third quarter of fiscal 2008, the net loss amounted to $269.2 million ($1.08 per share) compared with net earnings of $232.1 million ($0.89 per share) for the third quarter of fiscal 2007.

Canadian network sales and operating performance improved year-over-year. Canadian operations operating income amounted to $51.5 million compared with $53.5 million. The decrease in operating income is due to the additional week in the third quarter of fiscal 2007; this measure increased by 3.6% over the like 13-week period. Operating income for the former US operations was $119.1 million in the third quarter of fiscal 2007.

The Company recorded its share of Rite Aid's results during the third quarter of fiscal 2008. The share of Rite Aid's loss in the Company's third quarter fiscal 2008 earnings amounted to $332.1 million ($1.19 after-tax per Jean Coutu Group share) including the share of Rite Aid's non-cash income tax charge of US$920.4 million from the recording of a valuation allowance against deferred income tax assets.

Earnings before specific items and the share of Rite Aid's loss amounted to $32.3 million ($0.12 per share) during the third quarter of fiscal 2008 compared with $46.0 million ($0.18 per share) for the third quarter of the previous fiscal year.

For the fiscal year ended March 1, 2008, the net loss amounted to $251.4 million ($0.98 per share) compared with net earnings of $168.9 million ($0.65 per share) for the fiscal period ended March 3, 2007. Earnings before specific items and the share of Rite Aid's loss amounted to $107.0 million ($0.41 per share) during fiscal 2008 compared with $100.5 million ($0.39 per share) for the fiscal period ended March 3, 2007.

Canadian Operations

Retail sales

Retail sales growth percentages quoted herein are based on comparable periods.

During the third quarter, the Company's Canadian franchise network retail sales were up 4.1%, pharmacy sales gained 7.3% and front-end sales declined 1.2% year-over-year in terms of comparable stores. The network showed a 5.0% increase in total retail sales for the quarter compared with last year. Front-end sales growth figures were negatively impacted by substantial declines in the sales of allergy and cough, cold and flu medications due to a milder season. During the third quarter of fiscal 2008, sales of non-prescription drugs increased 0.6% compared to an increase of 9.4% during the same period in fiscal 2007. Retail sales for the period were $844.5 million.

For the 39-week period, on a same-store basis, total PJC network retail sales advanced 5.7%, pharmaceutical sales gained 8.6% and front-end sales picked up 0.8% year-over-year.



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RETAIL SALES GROWTH Q3-2008 Q3-2007 Fiscal Fiscal
(Unaudited) 2008 2007
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CANADA (1)
Same store sales growth
Total 4.1% 7.8% 5.7% 6.8%
Pharmacy 7.3% 8.6% 8.6% 8.4%
Front-end -1.2% 6.9% 0.8% 4.7%
Total sales growth
Total 5.0% 8.5% 6.3% 7.5%
Pharmacy 7.9% 9.1% 9.0% 8.9%
Front-end 0.0% 7.9% 1.8% 5.6%

(1) Franchised outlets' retail sales are not included in the Company's
consolidated financial statements.

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Distribution center sales

Canadian operations distribution center sales amounted to $494.9 million in the third quarter of fiscal 2008 compared with $512.6 million for the fiscal quarter ended March 3, 2007. This measure increased by 4.0% over the like 13-week period.

OIBA

OIBA for Canadian operations amounted to $56.5 million in the third quarter of fiscal 2008 compared with $58.5 million for the third quarter of fiscal 2007. The decrease in OIBA is due to the additional week in the third quarter of fiscal 2007; OIBA increased by 4.1% over the like 13-week period.

OIBA as a percentage of revenues for Canadian operations ended the fiscal quarter at 10.2%, the same level as the third quarter of fiscal 2007.

Store network development

During the third quarter of fiscal 2008, there were 2 store openings which were relocations. On March 1, 2008, there were 331 stores in the PJC Jean Coutu drugstore network.

Rite Aid investment

The Company held a 30.4% equity interest in Rite Aid as of March 1, 2008 and this investment is accounted for under the equity method. Rite Aid reported a net loss for the quarter ended March 1, 2008 of US$952.2 million (US$1.20 per Rite Aid share) compared with net income of US$15.1 million (US$0.01 per Rite Aid share) for the same period last year. Included in Rite Aid's fiscal 2008 loss is a non-cash income tax charge of US$920.4 million from the recording of a valuation allowance against deferred tax assets.

The share of Rite Aid's loss in The Jean Coutu Group's third quarter 2008 earnings amounted to $332.1 million ($1.19 after-tax per Jean Coutu Group share) and $393.3 million ($1.36 after-tax per Jean Coutu Group share) in fiscal 2008.

Normal Course Issuer Bid

On June 29, 2007, the Company announced its intention to purchase for cancellation up to 13,672,800 of its outstanding Class A subordinate voting shares, representing approximately 10% of the current public float of such shares, over a 12-month period ending no later than July 3, 2008. During the third quarter of fiscal 2008, the Company purchased 2,758,100 Class A subordinate voting shares at an average price of $11.13 per share for a total amount of $30.7 million. The Company completed 100% of its planned fiscal 2008 program in the amount of $177.0 million and all shares purchased were cancelled prior to March 1, 2008.

Third party asset-backed commercial paper

On March 1, 2008, the Company held investments in the amount of $35.6 million which were invested in Canadian third party asset-backed commercial paper ("ABCP"). For the fiscal quarter and year ended March 1, 2008, the Company considered the quality of the underlying assets and determined the fair value of these investments using a discounted cash flow analysis. The principal assumptions in the calculation pertain to the expected coupons and maturity of the floating rate notes to be received in exchange of the ABCP as well as an appropriate discount rate based on the expected ratings of the notes, where applicable, taking into account risks of future losses. The estimated discount rate was determined based on observable market inputs for comparable securities. For ABCP supported by ineligible assets, observable market inputs for comparable securities from independent pricing sources were used to assess the fair value of each class of assets in the trust.

As a result of the valuation during the fiscal quarter, the Company recognized a further $3.4 million ($2.9 million after-tax) provision for losses with respect to its ABCP holdings reflecting the Company's estimated change in fair value of these investments as at March 1, 2008, including a provision for its estimated share of costs associated with the restructuring ($7.1 million and $5.9 million after-tax provision for losses in fiscal 2008).

The Company has sufficient credit facilities to satisfy its financial obligations as they come due and does not expect there will be a materially adverse impact on its business as a result of the ABCP liquidity issue. The Company is assessing its alternatives and recourses to recover the full value of these ABCP.

Dividend

The Board declared a quarterly dividend of $0.04 per share payable on May 30, 2008 to all holders of Class A subordinate voting shares and holders of Class B shares listed in the Company's shareholder ledger as at May 16, 2008.

Outlook

With operations in Canada, financial flexibility and a significant interest in a United States' drugstore leader, the Company is well positioned to capitalize on the growth in the North American drugstore retailing industry. Demographic trends in Canada and the United States are expected to contribute to growth in the consumption of prescription drugs, and to the increased use of pharmaceuticals as the primary intervention in individual healthcare. Management believes that these trends will continue and that the Company will grow its revenues through differentiation and quality of offering and service levels in its Canadian drugstore network, which it operates with a focus on sales growth, its real estate program and operating efficiency. In fiscal 2009, the Company plans to allocate approximately $60 million to capital expenditures and incentives to franchisees and another $55 million is expected to be invested by franchisees in Canada. The Company plans to open or relocate 24 stores, complete 46 store renovation and expansion projects and open more than 15 Boutiques Passion Beaute.

The Company's 30.4% equity interest in Rite Aid allows shareholders to participate in the economic benefits of their expected synergies and is expected to create shareholder value over the long-term.

Conference call

Financial analysts are invited to attend the fourth quarter results conference call to be held on April 29, 2008, at 9:00 AM (ET). The toll free call-in number is 1-866-696-5910 - access code 3258203 followed by pound sign (#). Media and other interested individuals are invited to listen to the live or deferred broadcast on The Jean Coutu Group corporate website at www.jeancoutu.com. A full replay will also be available by dialing 1-800-408-3053 - access code 3258203 followed by pound sign (#) until May 30, 2008.

Supporting documentation (additional information and investor presentation) is available at www.jeancoutu.com using the investors' link. Readers may also access additional information and filings related to the Company using the following link to the www.sedar.com website.

About The Jean Coutu Group

The Jean Coutu Group (PJC) Inc. operates a network of 331 franchised drugstores in Canada located in the provinces of Quebec, New Brunswick and Ontario (under the banners of PJC Jean Coutu, PJC Clinique and PJC Sante Beaute) and employs more than 16,000 people. The Jean Coutu Group is one of the most trusted names in Canadian pharmacy retailing. The Company holds a significant interest in Rite Aid Corporation, one of the United States' leading drugstore chains with more than 5,000 drugstores in 31 states and the District of Columbia.

This press release contains forward-looking statements, that involve risks and uncertainties, and which are based on the Company's current expectations, estimates, projections and assumptions and were made by The Jean Coutu Group in light of its experience and its perception of historical trends. All statements that address expectations or projections about the future, including statements about the Company's strategy for growth, costs, operating or financial results, are forward-looking statements. All statements other than statements of historical facts included in this press release, including, statements regarding the prospects of the Company's industry and the Company's prospects, plans, financial position and business strategy, may constitute forward-looking statements within the meaning of the Canadian securities legislation and regulations. Some of the forward-looking statements may be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "estimate," "project", "could", "anticipate," "plan," "foresee," "believe" or "continue" or the negatives of these terms or variations of them or similar terminology. Although The Jean Coutu Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. These statements do not reflect the potential impact of any non-recurring items or of any mergers, acquisitions, dispositions, asset write-downs or other transactions or charges that may be announced or that may occur after the date hereof. While the below list of cautionary statements is not exhaustive, some important factors that could affect our future operating results, financial position and cash flows and could cause our actual results to differ materially from those expressed in these forward-looking statements are the investment in Rite Aid, general economic, financial or market conditions, the investment in ABCP, the cyclical and seasonal variations in the industry in which we operate, the changes in the regulatory environment as it relates to the sale of prescription drug, the ability to attract and retain pharmacists, the intensity of competitive activity in the industry in which we operate, certain property and casualty risks, risks in connection with third party service providers, technological changes that affect demand for our products and services, labour disruptions, including possibly strikes and labour protests, changes in laws and regulations, or in their interpretations, changes in tax regulations and accounting pronouncements, the success of the Company's business model, the supplier and brand reputations and the accuracy of management's assumptions and other factors that are beyond our control.

These and other factors could cause our actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. Investors and others are cautioned that undue reliance should not be placed on any forward-looking statements. For more information on the risks, uncertainties and assumptions that would cause the Company's actual results to differ from current expectations, please also refer to the Company's public filings available at www.sedar.com and www.jeancoutu.com. In particular, further details and descriptions of these and other factors are disclosed in the Company's Annual Information Form under "Risk Factors" and in the "Risks and Uncertainties" section of the Management's Discussion & Analysis. We expressly disclaim any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by the applicable securities laws.

This press release also contains certain non-GAAP financial measures. Such information is reconciled to the most directly comparable financial measures, as set forth in the "additional information" section, which is attached to the Company's financial statements.



THE JEAN COUTU GROUP (PJC) INC.

Consolidated statements
of earnings

Periods ended March 1, 13 weeks 14 weeks 39 weeks 40 weeks
2008 and March 3, 2007 2008 2007 2008 2007
------------------------------------------------------------------------
------------------------------------------------------------------------
(unaudited, in millions
of Canadian dollars,
unless otherwise noted) $ $ $ $


Sales 494.9 3,632.7 1,507.6 9,833.7
Other revenues 58.1 63.8 168.7 174.4
------------------------------------------------------------------------
553.0 3,696.5 1,676.3 10,008.1
Operating expenses
Cost of goods sold 449.3 2,795.4 1,370.0 7,584.2
General and operating
expenses 48.2 715.2 139.6 1,968.6
Restructuring charges - 9.5 - 32.3
Amortization 4.0 3.8 11.7 71.5
------------------------------------------------------------------------
501.5 3,523.9 1,521.3 9,656.6
------------------------------------------------------------------------
Operating income 51.5 172.6 155.0 351.5
Financing expenses 4.5 60.6 5.1 168.1
Impairment loss (reversal)
on assets held for sale - (143.9) - -
Adjustment to gain on sale
of the retail sales segment 0.5 - 4.2 -
------------------------------------------------------------------------
Earnings before the
following items 46.5 255.9 145.7 183.4
Share of loss from
investments subject to
significant influence 332.1 - 393.3 -
Income taxes (recovery) (16.4) 23.8 3.8 14.5
------------------------------------------------------------------------
Net earnings (loss) (269.2) 232.1 (251.4) 168.9
------------------------------------------------------------------------
------------------------------------------------------------------------

Earnings (loss) per
share, in dollars
Basic (1.08) 0.89 (0.98) 0.65
Diluted (1.08) 0.89 (0.98) 0.64
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------------------------------------------------------------------------


Consolidated statements
of comprehensive income

Periods ended March 1, 13 weeks 14 weeks 39 weeks 40 weeks
2008 and March 3, 2007 2008 2007 2008 2007
------------------------------------------------------------------------
------------------------------------------------------------------------
(unaudited, in millions of
Canadian dollars) $ $ $ $

Net earnings (loss) (269.2) 232.1 (251.4) 168.9
Other comprehensive income
(loss)
Foreign currency
translation adjustments (13.8) (102.8) (97.9) 67.8
Income taxes on the above
item 1.2 - 15.7 -
------------------------------------------------------------------------
(12.6) (102.8) (82.2) 67.8
------------------------------------------------------------------------
Comprehensive income (loss) (281.8) 129.3 (333.6) 236.7
------------------------------------------------------------------------
------------------------------------------------------------------------



Consolidated statements of changes in shareholders' equity

Periods ended March 1, 13 weeks 14 weeks 39 weeks 40 weeks
2008 and March 3, 2007 2008 2007 2008 2007
------------------------------------------------------------------------
------------------------------------------------------------------------
(unaudited, in millions of
Canadian dollars) $ $ $ $

Capital stock, beginning
of period 730.5 787.5 789.6 787.5
Redemption of stock (15.1) - (74.7) -
Options exercised - 2.0 0.5 2.0
------------------------------------------------------------------------
Capital stock, end of
period 715.4 789.5 715.4 789.5
------------------------------------------------------------------------
------------------------------------------------------------------------

Contributed surplus,
beginning of period 15.3 3.7 4.8 2.9
Stock-based compensation
cost 0.3 0.8 2.2 1.6
Stock-based compensation
from investment subject to
significant influence -
Rite Aid 1.1 - 9.7 -
------------------------------------------------------------------------
Contributed surplus, end
of period 16.7 4.5 16.7 4.5
------------------------------------------------------------------------
------------------------------------------------------------------------

Retained earnings,
beginning of period 1,225.6 1,109.7 1,319.7 1,188.6
Impact of the adoption of
new accounting standards - - (4.5) -
Net earnings (loss) (269.2) 232.1 (251.4) 168.9
------------------------------------------------------------------------
956.4 1,341.8 1,063.8 1,357.5
Dividends (10.0) (7.9) (30.7) (23.6)
Excess of purchase price
over carrying value of
Class A subordinate voting
shares acquired (15.6) - (102.3) -
------------------------------------------------------------------------
Retained earnings, end of
period 930.8 1,333.9 930.8 1,333.9
------------------------------------------------------------------------
------------------------------------------------------------------------

Accumulated other
comprehensive income (loss),
beginning of period (166.2) (74.9) (96.6) (245.5)
Foreign currency
translation adjustments,
net of income taxes (12.6) (102.8) (82.2) 67.8
------------------------------------------------------------------------
Accumulated other
comprehensive income
(loss), end of period (178.8) (177.7) (178.8) (177.7)
------------------------------------------------------------------------
------------------------------------------------------------------------

Total shareholders' equity 1,484.1 1,950.2 1,484.1 1,950.2
------------------------------------------------------------------------
------------------------------------------------------------------------



Consolidated balance sheets As at As at
March 1, June 4,
2008 2007
------------------------------------------------------------------------
------------------------------------------------------------------------
(in millions of Canadian dollars) $ $
(unaudited) (audited)

Assets
Current assets
Cash and cash equivalents - 40.7
Accounts receivable 167.5 162.6
Income taxes receivable 0.4 0.4
Inventories 154.7 138.0
Prepaid expenses 5.2 7.6
------------------------------------------------------------------------
327.8 349.3
Investments 1,143.2 1,597.8
Capital assets 329.3 319.4
Goodwill 35.3 20.0
Other long-term assets 113.7 50.2
------------------------------------------------------------------------
1,949.3 2,336.7
------------------------------------------------------------------------
------------------------------------------------------------------------

Liabilities
Current liabilities
Accounts payable and accrued liabilities 201.7 259.1
Income taxes payable 62.9 22.8
Current portion of long-term debt 2.0 0.6
------------------------------------------------------------------------
266.6 282.5
Long-term debt 169.5 7.4
Other long-term liabilities 29.1 29.3
------------------------------------------------------------------------
465.2 319.2
------------------------------------------------------------------------

Shareholders' equity
Capital stock 715.4 789.6
Contributed surplus 16.7 4.8

Retained earnings 930.8 1,319.7
Accumulated other comprehensive income (loss) (178.8) (96.6)
------------------------------------------------------------------------
752.0 1,223.1
------------------------------------------------------------------------
1,484.1 2,017.5
------------------------------------------------------------------------
1,949.3 2,336.7
------------------------------------------------------------------------
------------------------------------------------------------------------



Consolidated statements
of cash flows

Periods ended March 1, 13 weeks 14 weeks 39 weeks 40 weeks
2008 and March 3, 2007 2008 2007 2008 2007
------------------------------------------------------------------------
------------------------------------------------------------------------
(unaudited, in millions of
Canadian dollars) $ $ $ $

Operating activities
Net earnings (loss) (269.2) 232.1 (251.4) 168.9
Items not affecting cash
Amortization 5.0 8.9 14.6 86.1
Adjustment to gain on sale
of the retail sales segment 0.5 - 4.2 -
Impairment loss (reversal)
on assets held for sale - (143.9) - -
Change in fair value of
third party asset-backed
commercial paper 3.4 - 7.1 -
Share of loss from
investments subject to
significant influence 332.1 - 393.3 -
Future income taxes (27.5) 10.3 (29.2) (2.3)
Other (0.3) (5.5) (3.1) (13.6)
------------------------------------------------------------------------
44.0 101.9 135.5 239.1
Net changes in non-cash
asset and liability items 29.7 65.3 10.9 (19.5)
------------------------------------------------------------------------
Cash flow provided by
operating activities 73.7 167.2 146.4 219.6
------------------------------------------------------------------------
Investing activities
Adjustment to proceeds
of disposal of the
retail sales segment - - (46.1) -
Investments and business
acquisition (25.0) (1.7) (65.8) (2.0)
Purchase of capital assets (10.1) (33.0) (23.0) (134.3)
Proceeds from disposal
of capital assets - 3.1 1.3 3.9
Purchase of intangible
assets - - - (2.3)
Proceeds from disposal of
intangible assets - 0.6 - 1.2
Other long-term assets (7.4) (0.2) (9.5) (2.0)
------------------------------------------------------------------------
Cash flow used in investing
activities (42.5) (31.2) (143.1) (135.5)
------------------------------------------------------------------------
Financing activities
Issuance of long-term debt,
net of expenses 9.8 2.4 163.9 5.3
Repayment of long-term debt (0.3) (125.3) (0.6) (160.5)
Issuance of capital stock - 1.9 0.5 1.9
Redemption of capital stock (30.7) - (177.0) -
Dividends (10.0) (7.9) (30.7) (23.6)
------------------------------------------------------------------------
Cash flow used in financing
activities (31.2) (128.9) (43.9) (176.9)
------------------------------------------------------------------------
Effect of foreign exchange
rate changes on cash and
cash equivalents - 48.3 (0.1) 78.2
------------------------------------------------------------------------
Increase (decrease) in cash
and cash equivalents - 55.4 (40.7) (14.6)
Cash and cash equivalents,
beginning of period - 80.4 40.7 150.4
------------------------------------------------------------------------
Cash and cash equivalents,
end of period - 135.8 - 135.8
------------------------------------------------------------------------
------------------------------------------------------------------------



Consolidated segmented information

Periods ended March 1, 2008 and March 3, 2007
(unaudited, in millions of Canadian dollars)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

The Company has two reportable segments: franchising and retail sales.
Within the franchising segment, the Company carries on the franchising
activity under the "PJC Jean Coutu" banner, operates two distribution
centres and coordinates several other services for the benefit of its
franchisees. During fiscal year 2007, the Company also operated in the
retail sales segment through outlets selling pharmaceutical and other
products under the "Brooks" and "Eckerd" banners. On June 4, 2007, the
Company sold its interest in the "Brooks" and "Eckerd" outlets for cash
and an equity interest in Rite Aid Corporation ("Rite Aid"). As a result,
the Company's retail sales segment is represented by the investment in
Rite Aid.

The Company analyzes the performance of its operating segments based on
their operating income before amortization, which is not a measure of
performance under Canadian generally accepted accounting principles
("GAAP"). However, management uses this performance measure for assessing
the operating performance of its reportable segments.



Segmented information is 13 weeks 14 weeks 39 weeks 40 weeks
summarized as follows: 2008 2007 2008 2007
-------------------------------------------------------------------------
$ $ $ $

Revenues (1)
Franchising 553.0 571.0 1,676.3 1,597.3
Retail sales - 3,125.5 - 8,410.8
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553.0 3,696.5 1,676.3 10,008.1
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Operating income
before amortization
Franchising 56.5 58.5 169.6 161.2
Retail sales - 119.1 - 265.1
-------------------------------------------------------------------------
56.5 177.6 169.6 426.3
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Amortization
Franchising (2) 5.0 5.0 14.6 14.1
Retail sales - 66.9 - 183.8
Reversal of amortization of
the retail sales segment
upon consolidation (3) - (66.9) - (123.1)
-------------------------------------------------------------------------
5.0 5.0 14.6 74.8
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Operating income
Franchising 51.5 53.5 155.0 147.1
Retail sales - 52.2 - 81.3
Reversal of amortization
of the retail sales segment
upon consolidation (3) - 66.9 - 123.1
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51.5 172.6 155.0 351.5
-------------------------------------------------------------------------
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(1) Revenues include sales and other revenues.
(2) Including amortization of incentives paid to franchisees.
(3) From August 23, 2006 to June 4, 2007, the Company ceased amortizing
the assets related to its US operations since they were classified as
assets held for sale.



13 weeks 14 weeks 39 weeks 40 weeks
2008 2007 2008 2007
-------------------------------------------------------------------------
$ $ $ $

Share of loss from
investments subject to
significant influence
Retail sales (1) 332.1 - 393.3 -
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332.1 - 393.3 -
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-------------------------------------------------------------------------

Acquisition of capital
assets and intangible
assets (2)
Franchising 10.1 11.4 23.0 30.9
Retail sales - 21.6 - 105.7
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10.1 33.0 23.0 136.6
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As at As at
March 1, June 4,
2008 2007
-------------------------------------------------------------------------
$ $

Capital assets and goodwill
Franchising 364.6 339.4
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364.6 339.4
-------------------------------------------------------------------------
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Total assets
Franchising 860.0 775.9
Retail sales (1) 1,089.3 1,560.8
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1,949.3 2,336.7
-------------------------------------------------------------------------
-------------------------------------------------------------------------

The Company's revenues, capital assets and goodwill as well as total assets
for the geographic areas of Canada and the United States correspond to the
franchising and retail sales segments respectively.

(1) Represents the Company's equity investment in Rite Aid.
(2) Excluding business acquisition.



Unaudited additional information
Periods ended March 1, 2008 and March 3, 2007
(In millions of Canadian dollars except for margins)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

13 weeks 14 weeks 39 weeks 40 weeks
2008 2007 2008 2007
-------------------------------------------------------------------------
$ $ $ $
Canada
Sales 494.9 512.6 1,507.6 1,434.3
Cost of goods sold 449.3 467.5 1,370.0 1,308.8
-------------------------------------------------------------------------
Gross profit 45.6 45.1 137.6 125.5
As a % of sales 9.2% 8.8% 9.1% 8.7%

Other revenues (1) 59.1 59.6 171.6 166.3

General and operating expenses 48.2 46.2 139.6 130.6
-------------------------------------------------------------------------
Operating income before
amortization 56.5 58.5 169.6 161.2
Amortization (1) 5.0 5.0 14.6 14.1
-------------------------------------------------------------------------
Operating income 51.5 53.5 155.0 147.1
-------------------------------------------------------------------------
-------------------------------------------------------------------------

(1) Amortization of incentives paid to franchisees is presented in
amortization instead of being applied against other revenues as in the
consolidated financial statements.


Non-GAAP measures - Operating income before amortization ("OIBA")

OIBA is not a measure of performance under Canadian generally accepted accounting principles ("GAAP"). However, management uses this performance measure in assessing the operating and financial performance of its reportable segments. Besides, we believe that OIBA is an additional measure used by investors to evaluate operating performance and capacity of a company to meet its financial obligations. However, OIBA is not and must not be used as an alternative to net earnings or cash flow generated by operating activities as defined by GAAP. OIBA is not necessarily an indication that cash flow will be sufficient to meet our financial obligations. Furthermore, our definitions of OIBA may not be necessarily comparative to similar measures reported by other companies.

Net earnings (loss), a performance measure defined by GAAP, is reconciled
hereunder with OIBA.



13 weeks 14 weeks 39 weeks 40 weeks
2008 2007 2008 2007
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$ $ $ $

Net earnings (loss) (269.2) 232.1 (251.4) 168.9
Financing expenses 4.5 60.6 5.1 168.1
Impairment loss (reversal)
on assets held for sale - (143.9) - -
Adjustment to gain (gain)
on sale of the retail sales
segment 0.5 - 4.2 -
Share of loss from investments
subject to significant influence 332.1 - 393.3 -
Income taxes (recovery) (16.4) 23.8 3.8 14.5
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Operating income 51.5 172.6 155.0 351.5
Amortization per financial
statements 4.0 3.8 11.7 71.5
Amortization of incentives
paid to franchisees (1) 1.0 1.2 2.9 3.3
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Operating income before
amortization ("OIBA") 56.5 177.6 169.6 426.3
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(1) Amortization of incentives paid to franchisees is applied against
other revenues in the consolidated financial statements.


Non-GAAP measures - Earnings (loss) before specific items or earnings (loss) per share before specific items

Earnings (loss) before specific items and earnings (loss) per share before specific items are non-GAAP measures. The Company believes that it is useful for investors to be aware of significant items of an unusual or non-recurring nature that have adversely or positively affected its GAAP measures and that the above-mentioned non-GAAP measures provide investors with a measure of performance with which to compare its results between periods without regard to these items. The Company's measures excluding certain items have no standardized meaning prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies and therefore should not be considered in isolation.

Net earnings (loss) and earnings (loss) per share are reconciled hereunder to earnings (loss) before specific items and earnings (loss) per share before specific items. All amounts are net of income taxes when applicable.



13 weeks 14 weeks 39 weeks 40 weeks
2008 2007 2008 2007
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$ $ $ $

Net earnings (loss) (269.2) 232.1 (251.4) 168.9
Restructuring charges - 5.7 - 19.4
Reversal of amortization of
the retail sales segment upon
consolidation - (40.3) - (74.1)
Unrealized foreign exchange
gains on monetary items - (7.9) (0.1) (10.6)
Unrealized gains on derivative
financial instruments - 0.3 - (3.1)
Impairment loss (reversal) on
assets held for sale - (143.9) - -
Adjustment to gain on sale of
the retail sales segment 0.4 - 3.5 -
Change in fair value of third
party asset-backed commercial
paper 2.9 - 5.9 -
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Earnings (loss) before specific
items (265.9) 46.0 (242.1) 100.5
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Earnings (loss) per share (1.08) 0.89 (0.98) 0.65
Restructuring charges - 0.02 - 0.07
Reversal of amortization of
the retail sales segment upon
consolidation - (0.15) - (0.28)
Unrealized foreign exchange
gains on monetary items - (0.03) - (0.04)
Unrealized gains on derivative
financial instruments - - - (0.01)
Impairment loss (reversal) on
assets held for sale - (0.55) - -
Adjustment to gain on sale of
the retail sales segment - - 0.01 -
Change in fair value of third
party asset-backed commercial
paper 0.01 - 0.02 -
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Earnings (loss) per share
before specific items (1.07) 0.18 (0.95) 0.39
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Contact Information

  • Source: The Jean Coutu Group (PJC) Inc.
    Andre Belzile
    Senior Vice-President, Finance and Corporate Affairs
    450-646-9760
    or
    Information:
    Michael Murray
    Director, Investor Relations
    450-646-9611, Ext. 1068
    or
    Helene Bisson
    Director, Public Relations
    450-646-9611, Ext. 1165