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drugstore.com inc. Achieves GAAP Profitability in the Fourth Quarter of 2007
Date:2/6/2008

1 3 2

Technology and content 1,185 1,064 5,252 4,119

General and administrative 110 107 423 443

$1,761 $1,540 $7,504 $6,040

SUPPLEMENTAL INFORMATION: Gross Profit and Gross Margin Information:

Three Months Ended Twelve Months Ended

December 30, December 31, December 30, December 31,

2007 2006 2007 2006

(In thousands, unless

otherwise indicated)

Net sales $118,223 $108,598 $445,723 $415,777

Cost of sales 89,109 85,190 341,919 326,036

Gross profit $29,114 $23,408 $103,804 $89,741

Gross margin 24.6% 21.6% 23.3% 21.6%

SUPPLEMENTAL INFORMATION: Reconciliation of OTC net sales, cost of sales, gross profit, gross margin, variable order costs, and contribution margin to Core OTC net sales, cost of sales, gross profit, gross margin, variable order costs and contribution margin (See Note 3 below):

Three Months Ended Twelve Months Ended

December 30, December 31, December 30, December 31,

2007 2006 2007 2006

(In thousands)

Over-the-Counter (OTC):

Net sales $65,870 $56,099 $234,282 $197,964

CNS 450 522 1,881 2,376

Core OTC net sales $65,420 $55,577 $232,401 $195,588

Cost of sales $45,378 $40,530 $164,469 $139,674

CNS 36 46 234 112
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SOURCE drugstore.com, inc.
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