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

order were $75 for the quarter and year. Average

net sales per order increased to $59 for OTC, grew 10% to $102 for

vision, and were $107 for local pick-up pharmacy and $165 for

mail-order pharmacy. For the year, average net sales per order

increased to $57 for OTC, grew 10% to $99 for vision, and were $106 for

local pick-up pharmacy and $159 for mail-order pharmacy.

-- Net sales from repeat customers [2] represented 80% of net sales for

the quarter and 82% of net sales for the year.

Key Customer Milestones:

-- New customers grew to 398,000.

-- We have now served nearly 10 million customers since inception.

-- The number of active customers [3] was 2.5 million.

1. Core OTC net sales is a non-GAAP financial measure that excludes from

OTC net sales the company's Custom Nutrition Services ("CNS") net

sales. CNS sales are generated by sales of customized vitamins through

the company's CNS subsidiary. Prior to December 31, 2005, all CNS

sales were recognized on a gross basis, net of promotional discounts,

cancellations, rebates and returns allowances. Under the terms of the

company's December 31, 2005 fulfillment agreement with Weil Lifestyle,

LLC (Weil), the company recognizes on a net basis the revenue

associated with the fulfillment of customized vitamins sold through its

fulfillment agreement with Weil. A reconciliation of OTC net sales to

core OTC net sales is included in the financial data accompanying this

press release.

2. Net sales from repeat customers exclude Weil-related CNS net sales and

reflect only the activity of customers making purchases through the Web

sites of drugstore.com and its subsidiaries.

3. Active customer base reflects those customers who have purchased at

least once within the last 12 months. Both the active cu
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SOURCE drugstore.com, inc.
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