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New Deals, More Sales at drugstore.com

Reporting what it called "a solid fourth quarter performance" and announcing some new business partnerships, Internet retailer drugstore.com said sales will come in at about $55 million for the period, up more than 26 percent from a year ago.

Presenting at the Morgan Stanley Internet, Software and Networking Conference in Scottsdale, Ariz., Bellevue, Wash.-based drugstore.com said it believes that its fourth quarter gross margin will be in line with prior guidance of 20 percent to 20.5 percent.

The company also said that it will end the year with more than $60 million in cash and cash equivalents, which management "continues to believe will be sufficient to reach EBITDA break even."

Still, analysts are expecting a loss of about 8 cents a share for the period and the company's stock price has been bouncing around in the $1 to $3 range for the past six months. Formal results will come Jan. 21. Third-quarter loss was 10 cents a share on net sales of $47.4 million.

The company also announced new partnerships with contact lens company AC Lens Inc., floral services outfit FTD, 1-800-Wheelchair.com, and Comerxia Inc.

The Comerxia deal will allow consumers in 28 countries worldwide to purchase non-prescription health, beauty, and wellness products through the drugstore.com online store. Under the terms of the deal (financial arrangements were not disclosed), Comerxia will handle the logistics regarding international shipments and will provide in-country marketing support and customer service. The company is backed by UPS and Mail Boxes Etc.

International customers shopping at drugstore.com will be directed to download a shopping assistant application hosted by Comerxi, which specializes in letting residents of other counttries shop in U.S. online stores in their native language.. The shopping assistant interacts with the drugstore.com online store to determine if a product is suitable for overseas shipment, and then calculates duties, taxes, and shipping charges.

drugstore.com, which opened for business in February 1999, has a 290,000-square-foot distribution center in Swedesboro, N.J., and says that as of May 2002, it had 358 full-time employees. Amazon.com is the largest shareholder and is also a sales partner, and Jeff Bezos, Amazon.com's chairman and chief executive officer, is a member of the drugstore.com board of directors.