PetMed Express, Inc. D/B/A 1-800-PetMeds Announces Its Financial Results For Fiscal 2014 And Its $0.17 Per Share Quarterly Dividend

POMPANO BEACH, Fla., May 5, 2014 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (Nasdaq:PETS) today announced its financial results for the fiscal year ended March 31, 2014. Net income was $18.0 million, or $0.90 diluted per share, for the year ended March 31, 2014, compared to net income of $17.2 million, or $0.86 diluted per share, for the year ended March 31, 2013, an increase to earnings per share of 4.7%. Net income for the quarter ended March 31, 2014 was relatively flat at $4.5 million, or $0.23 diluted per share, compared to net income of $4.6 million, or $0.23 diluted per share, for the same quarter the prior year. For the year ended March 31, 2014 net sales were $233.4 million, compared to $227.8 million for the year ended March 31, 2013, an increase of 2.4%. Net sales for the quarter ended March 31, 2014 were $48.6 million, compared to $51.1 million for the quarter ended March 31, 2013, a decrease of 4.9%. Online sales for the year ended March 31, 2014 were approximately 79% of all sales, compared to 77% for the prior year.

Menderes Akdag, President and CEO, commented: "We were able to increase our gross margins for the quarter and decrease our operational expenses to improve our bottom line results for the fiscal year. For the quarter ended March 31, 2014 our gross profit increased 24 basis points, which can be attributed to a cost reduction in certain brands. For the fiscal year ended March 31, 2014 our operating expenses decreased by 83 basis points, mainly due to a reduction in advertising spending and the leveraging of our general and administrative expenses. Sales were negatively impacted during the quarter due to the colder-than-normal weather. Average order value was $75 for the fiscal year compared to $73 for the prior fiscal year, which was due mainly to a change in product mix to higher priced items. For fiscal 2015 we are focusing on improving our new order sales."

The Board of Directors declared a quarterly dividend of $0.17 per share on its common stock. The dividend will be payable on May 23, 2014, to shareholders of record at the close of business on May 16, 2014. The Company intends to continue to pay regular quarterly dividends; however the declaration and payment of future dividends is discretionary and will be subject to a determination by the Board of Directors each quarter following its review of the Company's financial performance.

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 5, 2014 until May 19, 2014 at 11:59 P.M. To access the replay, call (866) 448-5648 (toll free) or (203) 369-1190 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.
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
  March 31, March 31,
  2014 2013
     
ASSETS    
     
Current assets:    
Cash and cash equivalents  $ 18,305  $ 18,155
Short term investments - available for sale  15,539  15,490
Accounts receivable, less allowance for doubtful accounts of $7 and $5, respectively  1,761  1,439
Inventories - finished goods  35,727  31,601
Prepaid expenses and other current assets  1,761  1,090
Deferred tax assets  1,062  982
Prepaid income taxes  54  --
Total current assets  74,209  68,757
     
Noncurrent assets:    
Prepaid expenses  1,996  1,430
Property and equipment, net  1,310  2,132
Intangible asset  860  860
Total noncurrent assets  4,166  4,422
     
Total assets  $ 78,375  $ 73,179
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
Current liabilities:    
Accounts payable  $ 5,768  $ 6,454
Accrued expenses and other current liabilities  2,325  2,381
Income taxes payable  --  162
Total current liabilities  8,093  8,997
     
Deferred tax liabilities  65  168
     
Total liabilities  8,158  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  1,578  --
Retained earnings  68,647  63,987
Accumulated other comprehensive loss  (37)  (2)
     
Total shareholders' equity  70,217  64,014
     
Total liabilities and shareholders' equity  $ 78,375  $ 73,179
 
 PETMED EXPRESS, INC. AND SUBSIDIARIES 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
 (In thousands, except for per share amount) 
         
   Three Months Ended   Year Ended 
   March 31,   March 31, 
  2014 2013 2014 2013
   (UNAUDITED)     
 Sales   $ 48,632  $ 51,120  $ 233,391  $ 227,829
 Cost of sales   31,169  32,885  155,774  150,708
         
 Gross profit   17,463  18,235  77,617  77,121
         
 Operating expenses:         
 General and administrative   4,868  5,152  21,352  21,592
 Advertising   5,283  5,557  27,180  27,433
 Depreciation   170  260  867  1,091
 Total operating expenses   10,321  10,969  49,399  50,116
         
 Income from operations   7,142  7,266  28,218  27,005
         
 Other income (expense):         
 Interest income, net   44  42  185  306
 Other, net   --  (2)  (4)  (5)
 Total other income   44  40  181  301
         
 Income before provision for income taxes   7,186  7,306  28,399  27,306
         
 Provision for income taxes   2,660  2,704  10,427  10,141
         
 Net income   $ 4,526  $ 4,602  $ 17,972  $ 17,165
         
 Net change in unrealized gain (loss)  on short and long term investments   1  12  (35)  (46)
         
 Comprehensive income   $ 4,527  $ 4,614  $ 17,937  $ 17,119
         
 Net income per common share:         
 Basic   $ 0.23  $ 0.23  $ 0.90  $ 0.86
 Diluted   $ 0.23  $ 0.23  $ 0.90  $ 0.86
         
 Weighted average number of common shares outstanding:       
 Basic   19,931  19,815  19,901  19,926
 Diluted   20,046  19,968  20,043  20,049
         
 Cash dividends declared per common share   $ 0.17  $ 0.15  $ 0.66  $ 1.60
 
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
   Year Ended 
   March 31, 
  2014 2013
Cash flows from operating activities:     
Net income   $ 17,972  $ 17,165
Adjustments to reconcile net income to net cash  provided by operating activities:     
Depreciation   867  1,091
Share based compensation   1,479  1,943
Deferred income taxes   (183)  (76)
Bad debt expense   95  56
(Increase) decrease in operating assets and increase (decrease) in liabilities:     
Accounts receivable   (417)  77
Inventories - finished goods   (4,126)  (5,384)
Prepaid income taxes   (54)  199
Prepaid expenses and other current assets   (1,237)  (1,279)
Accounts payable   (686)  (165)
Accrued expenses and other current liabilities   (42)  (499)
Income taxes payable   (162)  162
Net cash provided by operating activities   13,506  13,290
     
Cash flows from investing activities:     
Net change in investments   (84)  (5,189)
Purchases of property and equipment   (45)  (626)
Net cash provided by (used in) investing activities   (129)  (5,815)
     
Cash flows from financing activities:     
Dividends paid   (13,326)  (31,972)
Purchases of treasury stock   --  (3,865)
Tax adjustment related to stock compensation   99  (284)
Net cash used in financing activities   (13,227)  (36,121)
     
Net increase (decrease) in cash and cash equivalents   150  (28,646)
Cash and cash equivalents, at beginning of year   18,155  46,801
     
Cash and cash equivalents, at end of year   $ 18,305  $ 18,155
     
Supplemental disclosure of cash flow information:     
     
Cash paid for income taxes   $ 10,727  $ 10,140
     
Retirement of treasury stock   $ --  $ 3,865
     
 Dividends payable in accrued expenses   $ 262  $ 276
CONTACT: For investment relations contact PetMed Express, Inc., Bruce S. Rosenbloom, CFO, 954-979-5995

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