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

POMPANO BEACH, Fla., Jan. 21, 2014 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (Nasdaq:PETS) today announced its financial results for the quarter ended December 31, 2013. Net sales for the quarter ended December 31, 2013 were $50.1 million, compared to $49.6 million for the quarter ended December 31, 2012, an increase of 1.0%. Net sales for the nine months ended December 31, 2013 were $184.8 million, compared to $176.7 million for the nine months ended December 31, 2012, an increase of 4.6%. Net income was $4.5 million, or $0.23 diluted per share, for the quarter ended December 31, 2013, compared to net income of $4.6 million, or the same $0.23 diluted per share, for the quarter ended December 31, 2012. Net income was $13.4 million, or $0.67 diluted per share, for the nine months ended December 31, 2013, compared to net income of $12.6 million, or $0.63 diluted per share, for the nine months ended December 31, 2012, a 7.2% increase to EPS. Reorder sales increased by 3.6%, from $40.9 million to $42.4 million for the quarters ended December 31, 2012 and 2013, respectively. Additionally, the Company's online sales increased by 2.1% to $39.5 million for the quarter ended December 31, 2013, compared to $38.7 million for the same quarter the prior year, with approximately 79% of all orders being generated from its website during the quarter compared to 78% for the same quarter the prior year. 

Menderes Akdag, CEO and President, commented: "We are pleased with the increased reorder sales for the quarter. Our sales increase for the quarter was also highlighted by an increased average order size - $72 for the quarter ended December 31, 2013 compared to $71 for the same quarter in the prior year. For the quarter ended December 31, 2013 our operating expenses decreased by 50 basis points. Going forward we are focusing on improving our gross profit margins and new order sales."

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 January 21, 2014 until February 4, 2014 at 11:59 P.M. To access the replay, call (800) 860-4709 (toll free) or (203) 369-3837, 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)
     
  December 31, 2013 March 31, 2013
  (Unaudited)  
ASSETS    
     
Current assets:    
Cash and cash equivalents  $ 25,937  $ 18,155
Short term investments - available for sale  15,516  15,490
Accounts receivable, less allowance for doubtful accounts of $6 and $5, respectively  1,650  1,439
Inventories - finished goods  24,541  31,601
Prepaid expenses and other current assets  1,976  1,090
Deferred tax assets  997  982
Prepaid income taxes  165  -- 
Total current assets  70,782  68,757
     
Noncurrent assets:    
Prepaid expenses  1,993  1,430
Property and equipment, net  1,474  2,132
Intangible assets  860  860
Total noncurrent assets  4,327  4,422
     
Total assets  $ 75,109  $ 73,179
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
Current liabilities:    
Accounts payable  $ 4,043  $ 6,454
Accrued expenses and other current liabilities  2,194  2,381
Income taxes payable  --   162
Total current liabilities  6,237  8,997
     
Deferred tax liabilities  99  168
     
Total liabilities  6,336  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; 20,190 and 20,109 shares issued and outstanding, respectively  20  20
Additional paid-in capital  1,228  -- 
Retained earnings  67,554  63,987
Accumulated other comprehensive loss  (38)  (2)
     
Total shareholders' equity  68,773  64,014
     
Total liabilities and shareholders' equity  $ 75,109  $ 73,179
 
 PETMED EXPRESS, INC. AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
 (In thousands, except for per share amounts) (Unaudited) 
         
   Three Months Ended  December 31,   Nine Months Ended December 31, 
  2013 2012 2013 2012
         
Sales   $ 50,086  $ 49,609  $ 184,759  $ 176,709
Cost of sales   33,197  32,397  124,605  117,823
         
Gross profit   16,889  17,212  60,154  58,886
         
Operating expenses:         
General and administrative   5,106  5,147  16,484  16,440
Advertising   4,517  4,602  21,896  21,876
Depreciation   219  254  697  831
Total operating expenses   9,842  10,003  39,077  39,147
         
Income from operations   7,047  7,209  21,077  19,739
         
Other income:         
Interest income, net   46  141  141  264
Other, net   (3)  (3)  (5)  (3)
Total other income   43  138  136  261
         
Income before provision for income taxes   7,090  7,347  21,213  20,000
         
Provision for income taxes   2,549  2,770  7,767  7,437
         
Net income   $ 4,541  $ 4,577  $ 13,446  $ 12,563
         
Net change in unrealized gain (loss) on short term investments   9  (83)  (36)  (58)
         
Comprehensive income   $ 4,550  $ 4,494  $ 13,410  $ 12,505
         
Net income per common share:         
Basic   $ 0.23  $ 0.23  $ 0.68  $ 0.63
Diluted   $ 0.23  $ 0.23  $ 0.67  $ 0.63
         
Weighted average number of common shares outstanding:       
Basic   19,925  19,808  19,892  19,963
Diluted   20,079  19,923  20,042  20,077
         
Cash dividends declared per common share   $ 0.17  $ 1.15  $ 0.49  $ 1.45
 
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands) (Unaudited) 
 
   Nine Months Ended December 31, 
  2013 2012
Cash flows from operating activities:     
Net income   $ 13,446  $ 12,563
Adjustments to reconcile net income to net cash provided by operating activities: 
Depreciation   697  831
Share based compensation   1,105  1,496
Deferred income taxes   (84)  (77)
Bad debt expense   75  37
(Increase) decrease in operating assets and increase (decrease) in liabilities: 
Accounts receivable   (286)  791
Inventories - finished goods   7,060  7,498
Prepaid income taxes   (165)  199
Prepaid expenses and other current assets   (1,449)  (337)
Accounts payable   (2,411)  (645)
Income taxes payable   (162)  246
Accrued expenses and other current liabilities   (152)  (761)
Net cash provided by operating activities   17,674  21,841
     
Cash flows from investing activities:     
Net change in investments   (62)  (5,166)
Purchases of property and equipment   (39)  (529)
Net cash used in investing activities   (101)  (5,695)
     
Cash flows from financing activities:     
Dividends paid   (9,914)  (28,896)
Purchases of treasury stock   --   (3,865)
Tax adjustment related to restricted stock   123  (168)
Net cash used in financing activities   (9,791)  (32,929)
     
Net increase in cash and cash equivalents   7,782  (16,783)
Cash and cash equivalents, at beginning of period   18,155  46,801
     
Cash and cash equivalents, at end of period   $ 25,937  $ 30,018
     
Supplemental disclosure of cash flow information:     
     
Cash paid for income taxes   $ 7,776  $ 7,237
     
Dividends payable in accrued expenses   $ 241  $ 351
CONTACT: PetMed Express, Inc.         Bruce S. Rosenbloom, CFO         954-979-5995

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