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Familymeds Announces Strong Preliminary Sales Increase of 11% for Second Quarter 2006; Comparative Sales Increase 9.5% Year-Over-Year

Posted on: Monday, 17 July 2006, 09:00 CDT

FARMINGTON, Conn., July 17 /PRNewswire-FirstCall/ -- Familymeds Group, Inc. , a pharmacy and medical specialty product provider, today announced unaudited preliminary sales results for the second quarter ended July 2, 2006. The Company expects to report revenues of $60.5 million to $61.0 million for the second quarter of 2006. This represents a year-over-year increase of 11.0% compared with sales of $54.7 million for the second quarter of 2005, and a sequential increase of more than 8.0% compared with revenues of $56.0 million for the first quarter of 2006. Additionally the Company expects to report approximately $59.9 million comparative sales for the same stores and medical supply distribution businesses for the second quarter of 2006 compared with $54.7 million for the second quarter of 2005, an increase of 9.5%.

Familymeds expects to report sales for the five-week month of June increased 11.6% to $23.1 million, from June 2005 sales of $20.7 million. Sales from Familymeds' medical supply operations for June 2006 increased more than five-fold to $1.6 million, from June 2005 sales of $0.3 million.

Ed Mercadante, R.Ph., Chairman, President and Chief Executive Officer of Familymeds, stated, "Top line organic growth is one of our primary financial objectives for 2006. Our ability to organically generate this strong level of quarterly sales momentum proves that our growth strategies are making a positive impact. Another primary objective is to further expand our sales channel by doing what we do best -- targeting key strategic locations to open new pharmacies. We plan to open two new pharmacies in leading medical office buildings during the second half of the year, and we are pursuing additional pharmacies in coordination with our existing physician group partners. Based on our successful sales performance in the first half of the year and our current outlook for the next two quarters, we are confident that we will continue to execute on our stated objectives as we continue to grow our core pharmacy operations going forward."

Familymeds expects to report financial results for the second quarter of 2006 in mid-August.

About Familymeds Group, Inc.

Familymeds Group, Inc. is a pharmacy and medical specialty product provider formed by the merger on November 12, 2004 of DrugMax, Inc. and Familymeds Group, Inc. Familymeds works closely with doctors, patients, managed care providers, medical centers and employers to improve patient outcomes while delivering low cost and effective healthcare solutions. The Company is focused on building an integrated specialty drug platform through its pharmacy and specialty pharmaceutical operations. Familymeds operates 85 locations, including 7 franchised locations, in 14 states under the Familymeds Pharmacy and Arrow Pharmacy & Nutrition Center brand names. The Company also operates Worksite Pharmacy(SM), which provides solutions for major employer groups, as well as specialty pharmaceutical distribution directly to physicians and other healthcare providers. The Familymeds platform is designed to provide services for the treatment of acute and complex health diseases including chronic medical conditions such as cancer, diabetes and pain management. The Company often serves defined population groups on an exclusive, closed panel basis to maintain costs and improve patient outcomes. Familymeds offers a comprehensive selection of brand name and generic pharmaceuticals, non-prescription healthcare-related products, and diagnostic supplies to its patients, physicians, clinics, long-term care and assisted living centers. More information can be found at http://www.familymedsgroup.com/. The Company's online product offering can be found at http://www.familymeds.com/.

Safe Harbor Provisions

Certain oral statements made by management from time to time and certain statements contained in press releases and periodic reports issued by Familymeds Group, Inc., including those contained herein, that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Because such statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements are statements regarding the intent, belief or current expectations, estimates or projections of Familymeds, its directors or its officers about Familymeds and the industry in which it operates. Although Familymeds believes that its expectations are based on reasonable assumptions, it can give no assurance that the anticipated results will occur. When used in this report, the words "expects,""anticipates,""intends,""plans,""believes,""seeks,""estimates," and similar expressions are generally intended to identify forward-looking statements. Important factors that could cause the actual results to differ materially from those in the forward- looking statements include, among other items, management's ability to successfully implement its business and growth strategies, including its ability to acquire other businesses, open new Worksite locations, and improve sales and profitability. Further information relating to factors that could cause actual results to differ from those anticipated is included under the heading Risk Factors in the Company's Form 10-K for the year ended December 31, 2005, and its Form 10-Q for the quarter ended April 1, 2006, filed with the U.S. Securities and Exchange Commission. Familymeds disclaims any intention or obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.

For more information, contact: Cindy Berenson Familymeds Group, Inc. 860.676.1222 x138 berenson@familymeds.com Or Brandi Piacente The Piacente Group 212-481-2050 brandi@thepiacentegroup.com

Familymeds Group, Inc.

CONTACT: Cindy Berenson of Familymeds Group, Inc., +1-860-676-1222 ext.138, berenson@familymeds.com; or Brandi Piacente of The Piacente Group,+1-212-481-2050, brandi@thepiacentegroup.com

Web site: http://www.familymeds.com/

Source: PRNewswire-FirstCall

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