PGN Pgnx Capital Corporation

Paragon Pharmacies Limited ("Paragon" or "the Company") (TSX VENTURE:PGN) today
reported its financial results for the second quarter ended February 29, 2012. 


"The continued commitment and focus from the entire Paragon team has brought
about a significant improvement in the results for the first half of the fiscal
year and in particular the 2nd quarter. The increase in first half of the fiscal
year's EBITDA by 19.5% over the previous year was highlighted by an increase in
EBITDA in the second quarter of 39.4%. We anticipate that EBITDA performance
will continue to strengthen compared to the previous year over the rest of the
fiscal year." said R. Gordon Gooding, Chief Executive Officer. 


Revenue for the three month period was $19.680 million compared to $19.725
million in the same period last year. Comparable store pharmacy revenue was down
1.4% impacted mainly by reductions in generic drug prices due to regulatory
reform in British Columbia and the shift of additional molecules from brand to
the lower priced generic alternatives. Front store revenue, excluding post
office and other revenue, increased by 4.1% with a continued focus on
strengthening the Company's merchandising and promotional offerings.


Gross profit for the three month period was $8.253 million compared to $7.868
million in the same period last year, an increase of $0.385 million or 4.9%.
Pharmacy margins as a percentage of revenue increased 3.5% over the same quarter
last year as a result of new supply and purchase agreements with certain
suppliers. Front store margins as a percentage of revenue decreased 2.2% in the
second quarter compared to the same period last year as a result of increased
seasonal promotional offerings.


EBITDA was $1.295 million for the three months ended February 29, 2012 compared
to $0.929 million in the same period last year, an increase of $0.366 million or
39.4%. The improved EBITDA trend was primarily the result of higher pharmacy
gross profit and the execution of continued operating cost containment
initiatives. 


The net loss for the second quarter was $0.047 million, compared to $0.638
million in the same period last year, a decrease in the net loss of $0.591
million or 92.6%. This decrease in the net loss is primarily due to stronger
EBITDA results and a reduction in depreciation and amortization.


The pharmacy industry continues to face ongoing regulatory change which will
alter the way generic drugs are priced. The Company's assessment of these
changes is more fully described in Management's Discussion & Analysis for the
second quarter ended February 29, 2012 in the section entitled Regulatory
Changes That Impact the Company's Industry. 


The Company's unaudited condensed consolidated financial statements and
Management's Discussion and Analysis for the three and six month periods ended
February 29, 2012 are available at the Investor Relations section of Paragon's
website at www.helloparagon.com or under the Company's profile on SEDAR at
www.sedar.com.


Paragon Pharmacies Limited is building a pharmacy with our customers in mind.
Headquartered in Kelowna, BC and employing over 400 staff, Paragon currently
owns and operates 19 retail pharmacies and three central fill pharmacies
throughout British Columbia, Alberta and Manitoba. Paragon is a leading
mid-market pharmacy, providing premier pharmacy services in a friendly,
community-focused environment.


FORWARD LOOKING STATEMENTS

This press release contains forward-looking statements regarding, among other
things, the Company's beliefs, plans, objectives, strategies, estimates,
intentions and expectations, including as they relate to its operating and
financial results, capital expenditures and the ability to execute on its
operating, investing and financing strategies. Consequently, actual results and
events may differ materially from those included in, contemplated or implied by
such forward looking statements for a variety of reasons. Forward-looking
statements are subject to inherent risks and uncertainties including, but not
limited to, market and general economic conditions, certain property and
casualty risks, the ability to attract and retain pharmacists, the availability
and terms of financing, changes in the Company's relationship with its key
suppliers, competitive factors, changes in regulatory environments affecting the
Company's business, and the accuracy in management's assumptions (see "RISKS AND
RISK MANAGEMENT" as noted in the Company's Management's Discussion & Analysis
posted on SEDAR at www.sedar.com). This list is not exhaustive of the factors
that may affect any of the Company's forward-looking statements. Investors and
others should carefully consider these and other factors and not place undue
reliance on these forward-looking statements. In addition, these forward-looking
statements relate to the date on which they were made and the Company disclaims
and has no intention or obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.

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