Third Quarter New Order Sales Increased 6.8% Third Quarter Sales Increased 3.3%

POMPANO BEACH, Fla., Jan. 25, 2016 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (NASDAQ:PETS) today announced its financial results for the quarter ended December 31, 2015.  Net sales for the quarter ended December 31, 2015 were $50.9 million, compared to $49.3 million for the quarter ended December 31, 2014, an increase of 3.3%.  Net sales for the nine months ended December 31, 2015 were $179.3 million, compared to $179.4 million for the nine months ended December 31, 2014.  The increase in sales for the quarter ended December 31, 2015 can be attributed to increased new order sales, which increased 6.8%, and reorders sales, which increased 2.8%.  Net income for the quarter ended December 31, 2015 was $4.9 million, or $0.24 diluted per share, compared to net income of $4.8 million, or $0.24 diluted per share, for the quarter ended December 31, 2014, a 1.9% increase to net income.  Excluding a one-time charge for an IT-related discontinued project in the nine months ended December 31, 2014, net income for the nine months ended December 31, 2015 was $15.1 million, or $0.75 diluted per share, compared to net income of $13.6 million, or $0.67 diluted per share, for the nine months ended December 31, 2014, a 12% increase to net income.  This one-time IT-related discontinued project cost of $1.7 million was expensed in the quarter ended September 30, 2014.  The after tax net impact of this charge was $1.1 million, or $0.05 diluted per share.  Online sales for the quarter ended December 31, 2015 increased 5.4% to $41.5 million from $39.3 million for the same period the prior year. The Company's online sales for the quarter ended December 31, 2015 were approximately 81% of all sales, compared to 80% for the same quarter the prior year. 

Menderes Akdag, CEO and President, commented: "Helped in part by the unseasonably warm weather in the December quarter we saw increases in both new order and reorder sales.  Our average order size increased to $78 for the quarter ended December 31, 2015, compared to $76 for the same quarter in the prior year.  We were also encouraged with our advertising efficiency, as our new customer acquisition costs were reduced to $41 for the quarter ended December 31, 2015 compared to $45 for the same quarter in the prior year.  We are pleased to announce that on January 19, 2016 we completed the purchase of property located in Delray Beach, FL.  The property is approximately 14.6 acres consisting of two buildings totaling approximately 185,000 sqft.  We intend to occupy approximately 97,000 sqft for our corporate headquarters and distribution center later this year."

The Board of Directors declared a quarterly dividend of $0.18 per share on the Company's common stock.  The dividend will be payable on February 19, 2016, to shareholders of record at the close of business on February 8, 2016.  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 January 25, 2016 until February 8, 2016 at 11:59 P.M.  To access the replay, call (866) 403-7099 (toll free) or (203) 369-0571 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, 2015.  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
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
         
    December 31,   March 31,
      2015       2015  
    (Unaudited)    
ASSETS        
         
Current assets:        
Cash and cash equivalents $     47,129   $     35,613  
Short term investments - available for sale       15,608         15,591  
Accounts receivable, less allowance for doubtful        
accounts of $10 and $8, respectively       1,365         1,931  
Inventories - finished goods       18,861         25,068  
Prepaid expenses and other current assets       2,275         1,380  
Deferred tax assets       848         817  
Prepaid income taxes       334       -  
Total current assets       86,420         80,400  
         
Noncurrent assets:        
Property and equipment, net       1,202         1,569  
Intangible assets       860         860  
Deferred tax assets       101         23  
         
Total assets $     88,583   $     82,852  
         
LIABILITIES AND SHAREHOLDERS' EQUITY        
         
Current liabilities:        
Accounts payable $     5,365   $     5,153  
Accrued expenses and other current liabilities       2,343         2,214  
Income taxes payable     -         50  
         
Total liabilities       7,708         7,417  
         
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;        
20,327 and 20,262 shares issued and outstanding, respectively       20         20  
Additional paid-in capital       4,398         3,117  
Retained earnings       76,535         72,343  
Accumulated other comprehensive loss       (87 )       (54 )
         
  Total shareholders' equity       80,875         75,435  
         
Total liabilities and shareholders' equity $     88,583   $     82,852  
         

 

 

  PETMED EXPRESS, INC. AND SUBSIDIARIES  
  CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  
  (In thousands, except for per share amounts) (Unaudited)  
                 
      Three Months Ended       Nine Months Ended  
      December 31,       December 31,  
      2015       2014       2015       2014  
                 
Sales  $      50,933    $      49,284    $      179,292    $      179,401  
Cost of sales       34,179         32,184         120,659         120,070  
                 
Gross profit       16,754         17,100         58,633         59,331  
                 
Operating expenses:                
General and administrative       4,977         4,946         16,164         16,202  
Advertising       3,988         4,323         18,122         21,134  
Discontinued project costs     -       -       -         1,714  
Depreciation       167         165         544         487  
Total operating expenses       9,132         9,434         34,830         39,537  
                 
Income from operations       7,622         7,666         23,803         19,794  
                 
Other income:                
Interest income, net       55         50         160         138  
Other, net       (4 )       (4 )       (12 )       3  
Total other income       51         46         148         141  
                 
Income before provision for income taxes       7,673         7,712         23,951         19,935  
                 
Provision for income taxes       2,783         2,915         8,802         7,433  
                 
Net income  $      4,890    $      4,797    $      15,149    $      12,502  
                 
Net change in unrealized loss on short                
term investments       (14 )       (20 )       (33 )       (13 )
                 
Comprehensive income  $      4,876    $      4,777    $      15,116    $      12,489  
                 
Net income per common share:                
Basic  $      0.24    $      0.24    $      0.75    $      0.62  
Diluted  $      0.24    $      0.24    $      0.75    $      0.62  
                 
Weighted average number of common shares outstanding:            
Basic       20,145         20,038         20,115         20,005  
Diluted       20,251         20,162         20,232         20,133  
                 
Cash dividends declared per common share  $      0.18    $      0.17    $      0.54    $      0.51  
                 

 
PETMED EXPRESS, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
  (In thousands) (Unaudited)    
   
      Nine Months Ended    
      December 31,    
      2015       2014    
Cash flows from operating activities:          
Net income  $      15,149    $      12,502    
Adjustments to reconcile net income to net cash          
provided by operating activities:          
Depreciation       544         487    
Share based compensation       1,189         1,118    
Discontinued project costs     -         1,714    
Deferred income taxes       (109 )       129    
Bad debt expense       243         66    
(Increase) decrease in operating assets          
and increase (decrease) in liabilities:          
Accounts receivable       323         343    
Inventories - finished goods       6,207         14,114    
Prepaid income taxes       (334 )       54    
Prepaid expenses and other current assets       (895 )       763    
Accounts payable       212         (1,892 )  
Income taxes payable       (50 )       283    
Accrued expenses and other current liabilities       156         (153 )  
Net cash provided by operating activities       22,635         29,528    
           
Cash flows from investing activities:          
Net change in investments       (50 )       (53 )  
Purchases of property and equipment       (177 )       (398 )  
Net cash used in investing activities       (227 )       (451 )  
           
Cash flows from financing activities:          
Dividends paid       (10,984 )       (10,353 )  
Tax adjustment related to restricted stock       92         39    
Net cash used in financing activities       (10,892 )       (10,314 )  
           
Net increase in cash and cash equivalents       11,516         18,763    
Cash and cash equivalents, at beginning of period       35,613         18,305    
           
Cash and cash equivalents, at end of period  $      47,129    $      37,068    
           
Supplemental disclosure of cash flow information:          
           
Cash paid for income taxes  $      9,203    $      6,929    
           
Dividends payable in accrued expenses  $      185    $      225    
           

For investment relations contact PetMed Express, Inc., Bruce S. Rosenbloom, CFO, 954-979-5995.