drugstore.com Reports Highest Net Revenues in Compa...(ttractive partner and distribution chann...),Health

"During the quarter, we experienced strong repeat orders, predominantly of beauty and everyday replenishment items, and drove new customer growth of 15% year-over-year. Margins have remained solid at 28.2% as our profitability initiatives have offset most of the impact of the increased customer utilization on promotional offers. We believe that we have the customer base, product assortment and partnerships to position the company to emerge post-recession even stronger," concluded Ms. Lepore.

Net income for the first quarter of 2009 was $1.3 million, or $0.01 per share, compared to a net loss of $2.7 million, or $0.03 per share, for the first quarter of 2008. The first quarter of 2009 net income includes $1.0 million in non-cash stock-based compensation expense and a $1.2 million benefit from the resolution reached on April 27, 2009, between the company and the State of New Jersey, regarding sales and use taxes owed by the company for the period January 1, 2000 through February 22, 2008.

Outlook for Second Quarter of 2009

For the second quarter of 2009, the company is targeting net sales in the range of $93.0 million to $97.0 million, net income in the range of $250,000 to a net loss of $1.75 million, and adjusted EBITDA in the range of $3.0 million to $5.0 million.

Financial and Operational Highlights for the First Quarter of 2009 (All comparisons are made to the first quarter of 2008 and reflect the reporting of the local pick-up business as discontinued operations)

Key Financial Highlights:

• Gross margins increased 80 basis points to 28.2%.
• Total contribution margin dollars increased by approximately 12% to $19.9 million.
• Total orders grew by 10.6% to 1.5 million, while contribution margin do
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