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June 7, 2006

Take two aspirin and ....

Posted by Mark Watanabe at 1:29 PM

From Business Editor Becky Bisbee:

Drugstore.com leader Dawn Lepore reassured shareholders at the company's annual meeting this morning in Bellevue that her management team is focused on making money one day. In 2005, the company lost $21 million on net sales of $400 million, a loss of 23 cents a share, which was narrower than a net loss of $47.7 million, or 62 cents a share, the year before.

Lepore said the online retailer ended partnerships, such as one with Amazon.com, that didn't perform well and stopped an expensive ad campaign to conserve resources. Over-the-counter health and beauty products are its biggest sellers and contributors to its bottom line.

She reiterated her plan to be EBITDA profitable in the second half of this year, then work on free cash flow and finally be GAAP profitable -- at the $400 million sales level.

Certainly welcome news to investors in the company, which lost $5.3 million in the first quarter on $104 million in sales. The stock has been trading between $4.48 and $2.50 a share and is selling at $2.90 a share today. Two of its biggest investors are Amazon (14 percent) and Melinda French Gates (4.6 percent).

The Web site launched in February 1999 and has never made money.

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