drugstore.com inc. Achieves GAAP Profitability in the Fourth Quart...(year-over-yeargross margins up over 300 ...),Health

"Throughout 2008, we expect to accelerate our full year top line revenue growth by: increasing sales in each one of our business segments, driving OTC sales by 20% year-over-year and increasing prestige beauty sales more than 40% year-over-year. In the first quarter of 2008, we are making targeted investments in a number of our profitability initiatives including pricing and sourcing to further expand margins. We will start to see the benefits of these investments in the second quarter and we expect to double full year adjusted EBITDA and to exit the year with gross margins above 26% and adjusted EBITDA margins between 5-6%," concluded Ms. Lepore.

GAAP net income for the fourth quarter of 2007 was $156,000, or $0.00 per share, compared to a net loss of $2.9 million, or $0.03 per share, for the fourth quarter of 2006. The fourth quarter in both 2007 and 2006 included $1.7 million in non-cash stock-based compensation expense. GAAP net loss for the fiscal year of 2007 was $9.0 million or $0.09 per share, compared to a net loss of $13.0 million, or $0.14 per share, for the fiscal year of 2006. The fiscal year losses include $8.8 million and $6.7 million, in non-cash stock- based compensation expense for 2007 and 2006, respectively.

Outlook for First Quarter and Fiscal Year 2008

For fiscal year 2008, the company is targeting net sales in the range of $498.0 million to $512.0 million, net income in the range of $(1.0) million to $3.0 million, and adjusted EBITDA in the range of $18.0 million to $22.0 million.

For the first quarter of 2008, the company is targeting net sales in the range of $118.0 million to $122.0 million, net loss in th
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