drugstore.com inc. Reports Results for the First Quart...( - Company Delivers Record Quarterly ...),Health

- Company Delivers Record Quarterly Net Revenues and Strong Gross Margins

of 24%, Up 150 Basis Points Year-Over-Year

- Key Internal Promotions, New Senior Director of Operations and

Resignation of There du Pont Announced

BELLEVUE, Wash., May 5 /PRNewswire-FirstCall/ -- drugstore.com, inc. (Nasdaq: DSCM), a leading online provider of health, beauty, vision, and pharmacy products, today announced its financial results for the first quarter ended March 30, 2008. The company reported record quarterly net sales of $120.6 million, up 10% year-over-year and driven by over-the-counter (OTC) order growth, and a net loss of $2.7 million, or $0.03 per share. The company achieved strong gross margins of 24.0% and positive adjusted EBITDA of $2.0 million, an improvement of approximately $900,000 from the first quarter of 2007. Adjusted EBITDA is a non-GAAP financial measure defined as earnings before interest, taxes, depreciation, and amortization of intangible assets and non-cash marketing expense, adjusted to exclude the impact of stock-based compensation expense.

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"The first quarter of 2008 demonstrates that we are executing on our strategy -- delivering core OTC (1) sales growth of 15.5%, growing Beauty.com 38% year-over-year while expanding overall gross margins by 150 basis points year-over-year," said Dawn Lepore, chief executive officer and chairman of the board of drugstore.com, inc. "We believe our revenue growth was ahead of current ecommerce trends in OTC and prestige beauty, offering evidence that we can drive growth even in a to
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