PetMed Express, Inc. D/B/A 1-800-PetMeds Announces Its Financial Results For Fiscal 2013

POMPANO BEACH, Fla., May 6, 2013 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (Nasdaq:PETS) today announced its financial results for the fiscal year ended March 31, 2013. Net income for the quarter ended March 31, 2013 was $4.6 million, or $0.23 diluted per share, compared to net income of $4.0 million, or $0.20 diluted per share, for the same quarter the prior year, an increase to earnings per share of 16.5%. Net income was $17.2 million, or $0.86 diluted per share, for the year ended March 31, 2013, compared to net income of $16.7 million, or $0.80 diluted per share, for the year ended March 31, 2012, an increase to earnings per share of 6.4%. Net sales for the quarter ended March 31, 2013 were $51.1 million, compared to $55.9 million for the quarter ended March 31, 2012, a decrease of 8.6%. For the year ended March 31, 2013 net sales were $227.8 million, compared to $238.3 million for the year ended March 31, 2012, a decrease of 4.4%. Online sales for the year ended March 31, 2013 were approximately 77% of all sales, compared to 75% for the prior year.

Menderes Akdag, President and CEO, commented: "We were able to increase our gross margins and decrease our operational expenses to improve our bottom line results for the quarter and fiscal year. For the quarter ended March 31, 2013 our gross profit increased 175 basis points, which can be attributed to a change in our product mix to higher margin items, including generics. For the quarter ended March 31, 2013 our operating expenses decreased by 124 basis points, mainly due to a reduction in advertising spending. Sales were negatively impacted during the quarter due to the colder than normal weather. The unavailability of Novartis brands, due to the manufacturer's suspended production, negatively impacted our sales for fiscal 2013; however recently this suspension was lifted for certain brands. Average order value was $73 for the fiscal year compared to $76 for the prior fiscal year, which was due to a change in product mix to lower priced items including generics and additional discounts given to customers. During the fiscal year, we maintained our quarterly dividend at $0.15 per share, while also paying a one-time special dividend of $1.00 in December 2012. In accordance with our share repurchase program, we repurchased approximately 397,000 shares paying approximately $3.9 million in fiscal 2013, with $10.2 million remaining as of March 31, 2013. For fiscal 2014 we are focusing on increasing our advertising spending to improve new order sales, shifting sales to higher margin items while continuing to expand our product offerings."

This morning at 8:30 A.M. Eastern Time, Mr. Akdag will host a conference call to review the year-end financial results. To access the call which is open to the public, dial (888) 455-1758 (toll free) or (203) 827-7025. Callers will be required to supply PETMEDS as the passcode. For those unable to participate in the live event, the call will be available for replay from 10:00 A.M. on May 06, 2013 until May 20, 2013 at 11:59 P.M. To access the replay, call (866) 431-7950 (toll free) or (203) 369-0981 and enter passcode 5500.

Founded in 1996, PetMed Express is America's Largest Pet Pharmacy, delivering prescription and non-prescription pet medications and other health products for dogs and cats at competitive prices direct to the consumer through its 1-800-PetMeds toll free number and on the Internet through its website at www.1800petmeds.com .

This press release may contain "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995 or by the Securities and Exchange Commission, that involve a number of risks and uncertainties, including the Company's ability to meet the objectives included in its business plan. Important factors that could cause results to differ materially from those indicated by such "forward-looking" statements are set forth in Management's Discussion and Analysis of Financial Condition and Results of Operations in the PetMed Express Annual Report on Form 10-K for the year ended March 31, 2012. The Company's future results may also be impacted by other risk factors listed from time to time in its SEC filings, including, but not limited to, the Company's Form 10-Q and its Annual Report on Form 10-K.

For investment relations contact PetMed Express, Inc., Bruce S. Rosenbloom, CFO, 954-979-5995.
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
     
  March 31, 2013 March 31, 2012
     
ASSETS    
     
Current assets:    
Cash and cash equivalents  $ 18,155  $ 46,801
Short term investments - available for sale  15,490  10,347
Accounts receivable, less allowance for doubtful accounts of $5 and $5, respectively  1,439  1,572
Inventories - finished goods  31,601  26,217
Prepaid expenses and other current assets  2,520  1,241
Deferred tax assets  982  1,230
Prepaid income taxes  --   199
Total current assets  70,187  87,607
     
Property and equipment, net  2,132  2,597
Intangible asset  860  860
     
Total assets  $ 73,179  $ 91,064
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
Current liabilities:    
Accounts payable  $ 6,454  $ 6,619
Accrued expenses and other current liabilities  2,381  2,772
Income taxes payables  162  -- 
Total current liabilities  8,997  9,391
     
Deferred tax liabilities  168  492
     
Total liabilities:  9,165  9,883
     
Commitments and contingencies    
     
Shareholders' equity:    
Preferred stock, $.001 par value, 5,000 shares authorized; 3 convertible shares issued and outstanding with a liquidation preference of $4 per share  9  9
Common stock, $.001 par value, 40,000 shares authorized; 20,109 and 20,338 shares issued and outstanding, respectively  20  20
Retained earnings  63,987  81,108
Accumulated other comprehensive gain (loss)  (2)  44
     
Total shareholders' equity  64,014  81,181
     
Total liabilities and shareholders' equity  $ 73,179  $ 91,064
 
 PETMED EXPRESS, INC. AND SUBSIDIARIES 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
 (In thousands, except for per share amount) 
         
   Three Months Ended March 31,   Year Ended  March 31,
  2013 2012 2013 2012
   (UNAUDITED)     
Sales   $ 51,120  $ 55,924  $ 227,829  $ 238,250
Cost of sales   32,885  36,957  150,708  158,085
         
Gross profit   18,235  18,967  77,121  80,165
         
Operating expenses:         
General and administrative   5,152  5,411  21,592  22,363
Advertising   5,557  6,916  27,433  30,369
Depreciation   260  365  1,091  1,411
Total operating expenses   10,969  12,692  50,116  54,143
         
Income from operations   7,266  6,275  27,005  26,022
         
Other income (expense):         
Interest income, net   42  60  306  288
Other, net   (2)  (1)  (5)  61
Total other income   40  59  301  349
         
Income before provision for income taxes   7,306  6,334  27,306  26,371
         
Provision for income taxes   2,704  2,341  10,141  9,712
         
Net income   $ 4,602  $ 3,993  $ 17,165  $ 16,659
         
Net change in unrealized gain (loss) on short and long term investments   12  35  (46)  185
         
Comprehensive income   $ 4,614  $ 4,028  $ 17,119  $ 16,844
         
Net income per common share:         
Basic   $ 0.23  $ 0.20  $ 0.86  $ 0.81
Diluted   $ 0.23  $ 0.20  $ 0.86  $ 0.80
         
Weighted average number of common shares outstanding:       
Basic   19,815  20,086  19,926  20,613
Diluted   19,968  20,176  20,049  20,708
         
Cash dividends declared per common share   $ 0.150  $ 0.150  $ 1.600  $ 0.525
 
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
     
   Year Ended March 31, 
  2013 2012
Cash flows from operating activities:     
Net income   $ 17,165  $ 16,659
Adjustments to reconcile net income to net cash provided by operating activities: 
Depreciation   1,091  1,411
Share based compensation   1,943  2,246
Deferred income taxes   (76)  (56)
Bad debt expense   56  47
(Increase) decrease in operating assets and increase (decrease) in liabilities: 
Accounts receivable   77  366
Inventories - finished goods   (5,384)  (1,077)
Prepaid income taxes   199  465
Prepaid expenses and other current assets   (1,279)  (205)
Accounts payable   (165)  297
Accrued expenses and other current liabilities   (499)  238
Income taxes payable   162  -- 
Net cash provided by operating activities   13,290  20,391
     
Cash flows from investing activities:     
Net change in investments   (5,189)  12,344
Purchases of property and equipment   (626)  (705)
Net cash provided by (used in) investing activities   (5,815)  11,639
     
Cash flows from financing activities:     
Dividends paid   (31,972)  (10,964)
Purchases of treasury stock   (3,865)  (23,685)
Tax adjustment related to stock compensation   (284)  (240)
Net cash used in financing activities   (36,121)  (34,889)
     
Net decrease in cash and cash equivalents   (28,646)  (2,859)
Cash and cash equivalents, at beginning of year   46,801  49,660
     
Cash and cash equivalents, at end of year   $ 18,155  $ 46,801
     
Supplemental disclosure of cash flow information:     
     
Cash paid for income taxes   $ 10,140  $ 9,543
     
Retirement of treasury stock   $ 3,865  $ 23,685
     
Dividends payable in accrued expenses   $ 276  $ 168
CONTACT: PetMed Express, Inc.         Bruce S. Rosenbloom, CFO         954-979-5995

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