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

Core OTC cost of sales $45,342 $40,484 $164,235 $139,562

Gross profit 20,492 15,569 69,813 58,290

CNS 414 476 1,647 2,264

Core OTC gross profit $20,078 $15,093 $68,166 $56,026

Gross margin 31.1% 27.8% 29.8% 29.4%

CNS 92.0% 91.2% 87.6% 95.3%

Core OTC gross margin 30.7% 27.2% 29.3% 28.6%

Variable order costs $6,479 $5,456 $22,259 $18,650

CNS 144 161 607 711

Core OTC variable

order costs $6,335 $5,295 $21,652 $17,939

Contribution margin 14,013 10,113 47,554 39,640

CNS 270 315 1,040 1,553

Core OTC contribution

margin $13,743 $9,798 $46,514 $38,087

NOTE 3: Supplemental information related to the company's Core OTC net

sales, cost of sales, gross profit, gross margin, variable order

costs and contribution margin for the three and twelve months

ended December 30, 2007 and December 31, 2006 is presented for

informational purposes only and is not prepared in accordance with

generally accepted accounting principles. On December 31, 2005,

we entered into a fulfillment agreement with Weil Lifestyles, LLC,

resulting in Weil-related CNS net sales (which make up the

substantial majority of CNS net sales) being recorded on a net

basis after that date. All CNS sales were previously recorded on a

gross basis.

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SOURCE drugstore.com, inc.
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