PetMed Express D/B/A 1-800-PetMeds Announces Its First Quarter Financial Results

Quarterly Earnings Per Share Increase 22%

Quarterly New Order Sales Increase 10%

Quarterly Online Sales Increase 11%

POMPANO BEACH, Fla., July 22, 2013 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (Nasdaq:PETS) today announced its financial results for the quarter ended June 30, 2013. Net sales for the quarter ended June 30, 2013 were $74.2 million, compared to $69.0 million for the quarter ended June 30, 2012, an increase of 7.6%. Net income was $4.8 million, or $0.24 diluted per share, for the quarter ended June 30, 2013, compared to net income of $4.0 million, or $0.20 diluted per share, for the quarter ended June 30, 2012, a 22% increase to EPS. New order sales increased by 9.6%, from $13.9 million to $15.2 million for the quarters ended June 30, 2012 and 2013, respectively. The Company also acquired approximately 207,000 new customers for the quarter ended June 30, 2013, compared to 197,000 new customers for the quarter ended June 30, 2012. Reorder sales increased by 7.1%, from $55.1 million to $59.0 million for the quarters ended June 30, 2012 and 2013, respectively. Additionally, the Company's online sales increased by 11% to $58.4 million for the quarter ended June 30, 2013, compared to $52.8 million for the same quarter the prior year, with approximately 79% of all orders being generated from its website during the quarter compared to 77% for the same quarter the prior year.

Menderes Akdag, CEO and President, commented: "We are pleased with the strong new order and reorder sales for the quarter. Our sales increase for the quarter was also highlighted by an increased average order size - $77 for the quarter ended June 30, 2013 compared to $73 for the same quarter in the prior year. For the quarter ended June 30, 2013 our operating expenses decreased by 109 basis points, mainly due to the leverage of our general and administrative expenses. Cash flow from operations increased by 44%, from $13.8 million to $19.8 million for the quarters ended June 30, 2012 and 2013, respectively. For the remainder of Fiscal 2014 we are focusing on improving our advertising efficiency and 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 quarter's financial results. To access the call, which is open to the public, please 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 July 22, 2013 until August 5, 2013 at 11:59 P.M. To access the replay, call (888) 562-2791 (toll free) or (402) 998-1448, 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, 2013. 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
     
  June 30, March 31,
  2013 2013
  (Unaudited)  
ASSETS    
     
Current assets:    
Cash and cash equivalents  $ 34,998  $ 18,155
Short term investments - available for sale  15,465  15,490
Accounts receivable, less allowance for doubtful accounts of $9 and $5, respectively  2,527  1,439
Inventories - finished goods  21,576  31,601
Prepaid expenses and other current assets  3,129  2,520
Deferred tax assets  983  982
Total current assets  78,678  70,187
     
Property and equipment, net  1,888  2,132
Intangible assets  860  860
     
Total assets  $ 81,426  $ 73,179
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
Current liabilities:    
Accounts payable  $ 10,272  $ 6,454
Accrued expenses and other current liabilities  2,245  2,381
Income taxes payable  2,636  162
Total current liabilities  15,153  8,997
     
Deferred tax liabilities  204  168
     
Total liabilities  15,357  9,165
     
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 20,109 shares issued and outstanding, respectively  20  20
Additional paid-in capital  362  -- 
Retained earnings  65,726  63,987
Accumulated other comprehensive loss  (48)  (2)
     
Total shareholders' equity  66,069  64,014
     
Total liabilities and shareholders' equity  $ 81,426  $ 73,179
 
 PETMED EXPRESS, INC. AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
 (In thousands, except for per share amounts) (Unaudited) 
     
   Three Months Ended 
   June 30, 
  2013 2012
     
 Sales   $ 74,194  $ 68,955
 Cost of sales   50,181  46,651
     
 Gross profit   24,013  22,304
     
 Operating expenses:     
General and administrative   5,873  5,922
Advertising   10,395  9,850
Depreciation   248  328
 Total operating expenses   16,516  16,100
     
 Income from operations   7,497  6,204
     
 Other income (expense):     
Interest income, net   47  59
Other, net   (2)  -- 
 Total other income   45  59
     
 Income before provision for income taxes   7,542  6,263
     
 Provision for income taxes   2,787  2,311
     
 Net income   $ 4,755  $ 3,952
     
     
 Net change in unrealized gain (loss) on short term investments   (46)  9
     
 Comprehensive income   $ 4,709  $ 3,961
     
 Net income per common share:     
Basic   $ 0.24  $ 0.20
Diluted   $ 0.24  $ 0.20
     
 Weighted average number of common shares outstanding:     
Basic   19,848  20,119
Diluted   20,004  20,245
     
 Cash dividends declared per common share   $ 0.15  $ 0.15
 
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands) (Unaudited) 
     
   Three Months Ended 
   June 30, 
  2013 2012
 Cash flows from operating activities:     
 Net income   $ 4,755  $ 3,952
 Adjustments to reconcile net income to net cash provided by operating activities: 
 Depreciation   248  328
 Share based compensation   362  554
 Deferred income taxes   35  (101)
 Bad debt expense   24  11
 (Increase) decrease in operating assets and increase (decrease) in liabilities: 
 Accounts receivable   (1,112)  (831)
 Inventories - finished goods   10,025  7,903
 Prepaid income taxes   --   199
 Prepaid expenses and other current assets   (609)  (417)
 Accounts payable   3,818  633
 Income taxes payable   2,474  2,213
 Accrued expenses and other current liabilities   (175)  (643)
 Net cash provided by operating activities   19,845  13,801
     
 Cash flows from investing activities:     
 Net change in investments   (21)  (26)
 Purchases of property and equipment   (4)  (207)
 Net cash used in investing activities   (25)  (233)
     
 Cash flows from financing activities:     
 Dividends paid   (2,977)  (3,018)
 Net cash used in financing activities   (2,977)  (3,018)
     
 Net increase in cash and cash equivalents   16,843  10,550
 Cash and cash equivalents, at beginning of period   18,155  46,801
     
 Cash and cash equivalents, at end of period   $ 34,998  $ 57,351
     
 Supplemental disclosure of cash flow information:     
     
 Cash paid for income taxes   $ 279  $ -- 
     
 Dividends payable in accrued expenses   $ 315  $ 200
CONTACT: PetMed Express, Inc.         Bruce S. Rosenbloom, CFO         954-979-5995