Drugstore.com Reports Record Fourth Quarter And Full Year 2010 Revenues

BELLEVUE, Wash., Feb. 8, 2011 (GLOBE NEWSWIRE) -- drugstore.com, inc. (Nasdaq:DSCM), a leading online retailer of health, beauty, clinical skincare, and vision products, today announced its financial results for the fourth quarter and fiscal year ended January 2, 2011.

In the fourth quarter of 2010, drugstore.com's quarterly net sales increased to $123.6 million, up 23% ¹ on an adjusted growth rate from $108.6 million in the prior year period. The Company reported a net loss of $663,000 and a net loss per share of $0.01. This is an improvement from a net loss of $1.6 million and a net loss per share of $0.02 reported in the same period of the prior year.

The Company reported $5.0 million of adjusted EBITDA and $4.2 million of ongoing adjusted EBITDA in the fourth quarter of 2010, as compared to $3.5 million of adjusted EBITDA and $4.2 million of ongoing adjusted EBITDA for the same period of the prior year. Adjusted EBITDA is a non-GAAP financial measure defined as earnings before interest, taxes, depreciation, and amortization of intangible assets, adjusted to exclude the impact of stock-based compensation expense. Ongoing adjusted EBITDA, also a non-GAAP financial measure, is defined as adjusted EBITDA excluding the impact of expenses or income from discontinued operations, certain legal actions, settlements and related costs outside our normal course of business, restructuring and severance costs, impairment charges, and certain other one-time charges and credits each of which is specifically identified.

For the fiscal year 2010, the Company reported net sales of $456.5 million, up 24% ¹ on an adjusted basis over fiscal year 2009. The Company reported a net loss of $3.6 million in 2010, adjusted EBITDA of $20.0 million, and ongoing adjusted EBITDA of $16.3 million for 2010. Additionally, the Company reported free cash flow of $4.4 million for 2010 compared to $1.4 million for 2009.

"We are pleased with our revenue growth in the fourth quarter in a highly competitive environment, as our holiday sales outpaced eCommerce growth for the quarter," said Dawn Lepore, chief executive officer and chairman of the board of drugstore.com, inc. "While gross margins were impacted by product mix and holiday promotions, total orders excluding partnerships increased over 17% ¹ from the prior year period. For the quarter, we reported OTC sales up 24% ¹, as adjusted, including a strong performance from SkinStore.com, which contributed to total beauty growth of 56% ¹, as adjusted. Additionally, this quarter, we accelerated the growth of our vision business, up 14% ¹ on a comparable basis over the prior year period, and recently launched two branded sites, PearleVision Contacts and LensCraftersContacts, for Luxottica."

"During 2010, we made important strategic progress, achieving our targets for OTC and total beauty growth, and, even more importantly, laying the groundwork to deliver significant growth to both our top and bottom lines. Through the sale of our pharmacy assets to BioScrip Pharmacy Services and the acquisition of SkinStore.com, we have refocused the business on our faster growing OTC and vision segments and have a clear plan of how to succeed in these markets. I am confident that the improvements we have made to our site, the extensive testing we conducted on new product offerings, and the important investments we made this year position us for a strong 2011," concluded Ms. Lepore.

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