Fourth Quarter New Order Sales Increased 24% Fourth Quarter Sales Increased 11% Fourth Quarter Net Income Increased 9.4%

POMPANO BEACH, Fla., May 09, 2016 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (NASDAQ:PETS) today announced its financial results for the fiscal year ended March 31, 2016.  Net sales for the quarter ended March 31, 2016 were $55.4 million, compared to $50.0 million for the quarter ended March 31, 2015, an increase of 11%.  For the fiscal year ended March 31, 2016 net sales were $234.7 million, compared to $229.4 million for the fiscal year ended March 31, 2015, an increase of 2.3%.  The increase in sales for the quarter ended March 31, 2016 can be attributed to a 24% increase in new order sales, and an 8.4% increase in reorder sales.  Net income for the quarter ended March 31, 2016 was $5.4 million, or $0.27 diluted per share, compared to net income of $5.0 million, or $0.25 diluted per share, for the same quarter the prior year, an increase to net income of 9.4%.  Excluding a one-time charge for an IT-related discontinued project in the quarter ended September 30, 2014, net income for the fiscal year ended March 31, 2016 was $20.6 million, or $1.02 diluted per share, compared to net income of $18.5 million, or $0.92 diluted per share, for the fiscal year ended March 31, 2015, an increase to net income of 11%.  The one-time IT-related discontinued project cost of $1.7 million was expensed in fiscal 2015, and the after tax net impact of this charge was $1.1 million, or $0.05 diluted per share.  The Company's online sales for the quarter ended March 31, 2016 were approximately 82% of all sales, compared to 81% for the same quarter the prior year.

Menderes Akdag, President and CEO, commented: "We saw sharp increases in both new order and reorder sales, helped in part by the unseasonably warmer weather in the March quarter.  We were encouraged with our advertising efficiency in the quarter, as our new customer acquisition costs were reduced to $32 for the quarter ended March 31, 2016 compared to $42 for the same quarter the prior year. During the March quarter we acquired approximately 116,000 new customers, compared to 97,000 new customers acquired in the same quarter the prior year.  Average order value was $83 for the March quarter compared to $81 for the same quarter the prior year. For the quarter ended March 31, 2016 our operating expenses decreased by about 185 basis points, which can be attributed to a reduction in advertising spending and the leveraging of our general and administrative expenses.  In fiscal 2017, we will be preparing to move into our new corporate headquarters and distribution facility, which is expected to occur in our third fiscal quarter."

The Board of Directors declared an increased quarterly dividend of $0.19 per share on its common stock.  The dividend will be payable on May 27, 2016, to shareholders of record at the close of business on May 20, 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 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 9, 2016 until May 23, 2016 at 11:59 P.M.  To access the replay, call (800) 879-6405 (toll free) or (402) 220-4745 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. 

For investment relations contact PetMed Express, Inc., Bruce S. Rosenbloom, CFO, 954-979-5995.
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
 
      March 31,     March 31,  
      2016     2015  
               
ASSETS              
               
Current assets:              
Cash and cash equivalents   $ 37,639   $ 35,613  
Short term investments - available for sale     -     15,591  
Accounts receivable, less allowance for doubtful            
accounts of $13 and $8, respectively     1,724     1,931  
Inventories - finished goods     25,586     25,068  
Prepaid expenses and other current assets     2,435     1,380  
Prepaid income taxes     243     -  
Total current assets     67,627     79,583  
             
Noncurrent assets:            
Property and equipment, net     20,929     1,569  
Intangible assets     860     860  
Deferred tax assets     863     840  
Total noncurrent assets     22,652     3,269  
               
Total assets   $ 90,279   $ 82,852  
               
LIABILITIES AND SHAREHOLDERS' EQUITY            
             
Current liabilities:            
Accounts payable   $ 5,004   $ 5,153  
Accrued expenses and other current liabilities     2,080     2,214  
Income taxes payable     -     50  
               
Total liabilities     7,084     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;            
20,447 and 20,262 shares issued and outstanding, respectively     20     20  
Additional paid-in capital     4,871     3,117  
Retained earnings     78,295     72,343  
Accumulated other comprehensive loss     -     (54 )
               
Total shareholders' equity     83,195     75,435  
               
Total liabilities and shareholders' equity   $ 90,279   $ 82,852  
               

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,
      2016         2015       2016         2015  
                             
    (UNAUDITED)          
Sales $   55,392     $   49,994   $   234,684     $   229,395  
Cost of sales     37,729         33,055       158,388         153,125  
                     
Gross profit     17,663         16,939       76,296         76,270  
                     
Operating expenses:                    
General and administrative     5,137         4,899       21,301         21,101  
Advertising     3,715         4,048       21,837         25,182  
Discontinued project costs     -         -       -         1,714  
Depreciation     226         173       770         660  
Total operating expenses     9,078         9,120       43,908         48,657  
                     
Income from operations     8,585         7,819       32,388         27,613  
                     
Other income (expense):                    
Interest income, net     30         46       190         184  
Realized loss on sale of short term investments   (74 )       -       (74 )       -  
Other, net     75         (2 )     63         1  
Total other income     31         44       179         185  
                     
Income before provision for income taxes     8,616         7,863       32,567         27,798  
                     
Provision for income taxes     3,198         2,912       12,000         10,345  
                     
Net income $   5,418     $   4,951       20,567     $   17,453  
                     
Net change in unrealized gain (loss)                    
on short and long term investments     87         (4 )     54         (17 )
                     
Comprehensive income $   5,505     $   4,947   $   20,621     $   17,436  
                     
Net income per common share:                    
Basic $   0.27     $   0.25   $   1.02     $   0.87  
Diluted $   0.27     $   0.25   $   1.02     $   0.87  
                     
Weighted average number of common shares outstanding:                
Basic     20,152         20,044       20,124         20,015  
Diluted     20,322         20,146       20,254         20,136  
                     
Cash dividends declared per common share $   0.18     $   0.17   $   0.72     $   0.68  
                     

PETMED EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
       
       Year Ended 
       March 31, 
      2016      2015 
Cash flows from operating activities:            
Net income   $ 20,567     $ 17,453  
Adjustments to reconcile net income to net cash            
provided by operating activities:            
Depreciation     770       660  
Share based compensation     1,612       1,481  
Discontinued project costs     -       1,714  
Deferred income taxes     (23 )     157  
Bad debt expense     260       94  
(Increase) decrease in operating assets            
and increase (decrease) in liabilities:            
Accounts receivable     (53 )     (264 )
Inventories - finished goods     (518 )     10,659  
Prepaid income taxes     (243 )     54  
Prepaid expenses and other current assets     (1,055 )     662  
Accounts payable     (149 )     (616 )
Accrued expenses and other current liabilities     (65 )     (61 )
Income taxes payable     (50 )     50  
Net cash provided by operating activities     21,053       32,043  
                 
Cash flows from investing activities:            
Proceeds from the sale of short term investments     15,591       -  
Net change in investments     54       (68 )
Purchases of property and equipment     (20,130 )     (918 )
Net cash used in investing activities     (4,485 )     (986 )
                 
Cash flows from financing activities:            
Dividends paid     (14,684 )     (13,807 )
Tax adjustment related to stock compensation     142       58  
Net cash used in financing activities     (14,542 )     (13,749 )
                 
Net increase in cash and cash equivalents     2,026       17,308  
Cash and cash equivalents, at beginning of year     35,613       18,305  
                 
Cash and cash equivalents, at end of year   $ 37,639     $ 35,613  
                 
Supplemental disclosure of cash flow information:                
                 
Cash paid for income taxes   $ 12,173     $ 10,026  
                 
Dividends payable in accrued expenses   $ 143     $ 212