POMPANO BEACH, Fla., Oct. 20, 2014 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (Nasdaq:PETS) today announced its financial results for the quarter ended September 30, 2014. Net sales for the quarter ended September 30, 2014 were $57.6 million, compared to $60.5 million for the quarter ended September 30, 2013, a decrease of 4.8%. Net sales for the six months ended September 30, 2014 were $130.1 million, compared to $134.7 million for the quarter ended September 30, 2013, a decrease of 3.4%. Excluding a one-time charge for an IT-related discontinued project, net income was $3.8 million, or $0.19 diluted per share, for the quarter ended September 30, 2014, compared to net income of $4.2 million, or $0.21 diluted per share, for the quarter ended September 30, 2013, and net income was $8.8 million, or $0.44 diluted per share, for the six months ended September 30, 2014, compared to net income of $8.9 million, or $0.44 diluted per share, for the six months ended September 30, 2013. The one-time IT-related discontinued project cost of $1.7 million was expensed in the September quarter. The after tax net impact of this charge was $1.1 million, or $0.05 diluted per share. There was no impact to the Company's cash flow and no further charges are expected in the future related to this discontinued project. The Company's online sales for the quarter ended September 30, 2014 were approximately 80% of all sales, compared to 79% for the same quarter the prior year.

Menderes Akdag, CEO and President, commented: "While navigating through a shortened flea and tick season, we were able to maintain increased gross profit margins and an increased average order size. For the quarter ended September 30, 2014 our gross profit increased 23 basis points, which can be attributed to a shift in sales to higher margin items. Our average order size increased to $75 for the quarter ended September 30, 2014, compared to $73 for the same quarter in the prior year. Cash from operations was $23.6 million for the quarter ended September 30, 2014, compared to $24.4 million for the quarter ended September 30, 2013. For the remainder of Fiscal 2015 we are focusing on improving our marketing efforts to increase sales."

The Board of Directors declared a quarterly dividend of $0.17 per share on the Company's common stock. The dividend will be payable on November 14, 2014, to shareholders of record at the close of business on November 3, 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 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 October 20, 2014 until November 3, 2014 at 11:59 P.M. To access the replay, call (866) 420-4828 (toll free) or (203) 369-0790 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, 2014. 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)    
     
  September 30, March 31,
  2014 2014
ASSETS (Unaudited)  
     
Current assets:    
Cash and cash equivalents $ 34,579 $ 18,305
Short term investments - available for sale 15,583 15,539
Accounts receivable, less allowance for doubtful accounts of $8 and $7, respectively 1,957 1,761
Inventories - finished goods 20,535 35,727
Prepaid expenses and other current assets 1,924 1,761
Deferred tax assets 716 1,062
Prepaid income taxes 1,870 54
Total current assets 77,164 74,209
     
Noncurrent assets:    
Prepaid expenses -- 1,996
Property and equipment, net 1,361 1,310
Intangible assets 860 860
Deferred tax assets 44 --
     
Total assets $ 79,429 $ 78,375
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
Current liabilities:    
Accounts payable $ 5,248 $ 5,768
Accrued expenses and other current liabilities 2,334 2,325
Total current liabilities 7,582 8,093
     
Deferred tax liabilities -- 65
     
Total liabilities 7,582 8,158
     
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; 20,268 and 20,190 shares issued and outstanding, respectively 20 20
Additional paid-in capital 2,370 1,578
Retained earnings 69,478 68,647
Accumulated other comprehensive loss (30) (37)
     
Total shareholders' equity 71,847 70,217
     
Total liabilities and shareholders' equity $ 79,429 $ 78,375
 
 PETMED EXPRESS, INC. AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
 (In thousands, except for per share amounts) (Unaudited) 
         
   Three Months Ended   Six Months Ended 
   September 30,   September 30, 
  2014 2013 2014 2013
         
 Sales   $ 57,576  $ 60,479  $ 130,117  $ 134,673
 Cost of sales   39,117  41,227  87,886  91,408
         
 Gross profit   18,459  19,252  42,231  43,265
         
 Operating expenses:         
 General and administrative   5,381  5,505  11,256  11,378
 Advertising   6,915  6,985  16,811  17,380
 Discontinued project costs   1,714  --  1,714  --
 Depreciation   159  230  322  478
 Total operating expenses   14,169  12,720  30,103  29,236
         
 Income from operations   4,290  6,532  12,128  14,029
         
 Other income:         
 Interest income, net   44  48  88  95
 Other, net   (2)  1  7  (1)
 Total other income   42  49  95  94
         
 Income before provision for income taxes   4,332  6,581  12,223  14,123
         
 Provision for income taxes   1,600  2,431  4,518  5,218
         
 Net income   $ 2,732  $ 4,150  $ 7,705  $ 8,905
         
 Net change in unrealized gain (loss) on short  term investments   (1)  --  7  (46)
         
 Comprehensive income   $ 2,731  $ 4,150  $ 7,712  $ 8,859
         
 Net income per common share:         
 Basic   $ 0.14  $ 0.21  $ 0.39  $ 0.45
 Diluted   $ 0.14  $ 0.21  $ 0.38  $ 0.44
         
 Weighted average number of common shares outstanding:       
 Basic   20,016  19,902  19,988  19,875
 Diluted   20,146  20,044  20,119  20,024
         
 Cash dividends declared per common share   $ 0.17  $ 0.17  $ 0.34  $ 0.32
 
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands) (Unaudited) 
 
   Six Months Ended 
   September 30, 
  2014 2013
 Cash flows from operating activities:     
 Net income   $ 7,705  $ 8,905
 Adjustments to reconcile net income to net cash provided by operating activities:     
 Depreciation   322  478
 Share based compensation   753  732
 Discontinued project costs   1,714  --
 Deferred income taxes   237  193
 Bad debt expense   40  49
 (Increase) decrease in operating assets and increase (decrease) in liabilities:     
 Accounts receivable   (235)  6
 Inventories - finished goods   15,192  14,260
 Prepaid income taxes   (1,816)  (779)
 Prepaid expenses and other current assets   119  (1,096)
 Accounts payable   (521)  1,865
 Income taxes payable   --  (162)
 Accrued expenses and other current liabilities   80  (93)
 Net cash provided by operating activities   23,590  24,358
     
 Cash flows from investing activities:     
 Net change in investments   (37)  (41)
 Purchases of property and equipment   (372)  (31)
 Net cash used in investing activities   (409)  (72)
     
 Cash flows from financing activities:     
 Dividends paid   (6,946)  (6,528)
 Tax adjustment related to restricted stock   39  --
 Net cash used in financing activities   (6,907)  (6,528)
     
 Net increase in cash and cash equivalents   16,274  17,758
 Cash and cash equivalents, at beginning of period   18,305  18,155
     
 Cash and cash equivalents, at end of period   $ 34,579  $ 35,913
     
 Supplemental disclosure of cash flow information:     
     
 Cash paid for income taxes   $ 6,058  $ 5,688
     
 Dividends payable in accrued expenses   $ 191  $ 196