EX-99.1 2 pets0719108k_ex99z1.htm EXHIBIT 99.1 Exhibit 99.1


Exhibit 99.1

PETMED EXPRESS D/B/A 1-800-PETMEDS

ANNOUNCES ITS FIRST QUARTER FINANCIAL RESULTS

Pompano Beach, Florida, July 19, 2010 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended June 30, 2010.  Net sales for the quarter ended June 30, 2010 were $74.4 million, compared to $77.2 million for the quarter ended June 30, 2009, a decrease of 3.6%.  Net income was $7.2 million, or $0.32 diluted per share, for the quarter ended June 30, 2010, compared to net income of $8.1 million, or $0.36 diluted per share, for the quarter ended June 30, 2009, an 11% decrease to EPS.  Reorder sales increased by 7%, from $54.0 million to $57.6 million for the quarters ended June 30, 2009 and 2010, respectively.


Menderes Akdag, CEO and President, commented: “It has been a challenging quarter due to a reduction in our advertising exposure, which is attributed to the lack of availability of television remnant space at affordable prices, combined with consumers giving greater consideration to price and reducing their usage.  Our online sales increased by 1% to $52.3 million for the quarter, compared to $51.8 million for the prior quarter, with approximately 70% of our orders being generated from our website during the quarter compared to 67% in the prior quarter.  We continued leveraging our operating expenses, which as a percent of sales improved 91 basis points compared to the same quarter in the prior year.  Our focus in fiscal 2011 is conversion optimization, and the expansion of our product offerings into pet supplies.”


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 (210) 234-0009.  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 July 19, 2010 until August 2, 2010 at 11:59 P.M.  To access the replay, call (866) 421-3831 (toll free) or (203) 369-0808, 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, cats, and horses 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, 2010.  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.



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Exhibit 99.1 Page 1 of 4




PETMED EXPRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

June 30,

 

March 31,

 

 

2010

 

2010

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

   Cash and cash equivalents

$

66,886,745 

$

53,143,450 

   Short term investments - available for sale

 

10,025,067 

 

- 

   Accounts receivable, less allowance for doubtful

 

 

 

 

      accounts of $6,667 and $5,236, respectively

 

2,670,883 

 

2,097,057 

   Inventories - finished goods

 

15,784,538 

 

29,063,640 

   Prepaid expenses and other current assets

 

882,714 

 

610,067 

   Deferred tax assets

 

1,457,400 

 

1,255,282 

   Prepaid income taxes

 

- 

 

329,388 

          Total current assets

 

97,707,347 

 

86,498,884 

 

 

 

 

 

   Long term investments

 

12,392,125 

 

12,392,125 

   Property and equipment, net

 

4,209,054 

 

4,428,849 

   Intangible asset

 

850,000 

 

850,000 

 

 

 

 

 

Total assets

$

115,158,526 

$

104,169,858 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

   Accounts payable

$

6,019,543 

$

4,775,665 

   Income taxes payable

 

3,841,651 

 

- 

   Accrued expenses and other current liabilities

 

2,474,552 

 

2,311,589 

          Total current liabilities

 

12,335,746 

 

7,087,254 

 

 

 

 

 

Deferred tax liabilities

 

803,556 

 

225,391 

 

 

 

 

 

Total liabilities:

 

13,139,302 

 

7,312,645 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

   Preferred stock, $.001 par value, 5,000,000 shares authorized;

 

 

 

 

      2,500 convertible shares issued and outstanding with a

 

 

 

 

      liquidation preference of $4 per share

 

8,898 

 

8,898 

   Common stock, $.001 par value, 40,000,000 shares authorized;

 

 

 

 

      22,980,907 and 22,989,618 shares issued and outstanding, respectively

22,981 

 

22,990 

   Additional paid-in capital

 

2,859,265 

 

2,627,807 

   Retained earnings

 

99,231,244 

 

94,305,393 

   Less: treasury stock, at cost; 195 and 0 shares, respectively

 

(3,375)

 

- 

   Accumulated other comprehensive loss

 

(99,789)

 

(107,875)

 

 

 

 

 

          Total shareholders' equity

 

102,019,224 

 

96,857,213 

 

 

 

 

 

Total liabilities and shareholders' equity

$

115,158,526 

$

104,169,858 




Exhibit 99.1 Page 2 of 4




PETMED EXPRESS, INC. AND SUBSIDIARIES

 CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 (UNAUDITED)

 

 

 

 

 

 

 

 Three Months Ended

 

 

 June 30,

 

 

2010

 

2009

 

 

 

 

 

 Sales

$

74,368,903

$

77,168,582

 Cost of sales

 

47,143,032

 

47,882,455

 

 

 

 

 

 Gross profit

 

27,225,871

 

29,286,127

 

 

 

 

 

 Operating expenses:

 

 

 

 

      General and administrative

 

6,207,998

 

6,493,360

      Advertising

 

8,840,272

 

9,871,809

      Depreciation and amortization

 

350,363

 

322,335

 Total operating expenses

 

15,398,633

 

16,687,504

 

 

 

 

 

 Income from operations

 

11,827,238

 

12,598,623

 

 

 

 

 

 Other income:

 

 

 

 

      Interest income, net

 

66,027

 

61,420

      Other, net

 

2,622

 

1,585

 Total other income

 

68,649

 

63,005

 

 

 

 

 

 Income before provision for income taxes

 

11,895,887

 

12,661,628

 

 

 

 

 

 Provision for income taxes

 

4,671,291

 

4,586,852

 

 

 

 

 

 Net income

$

7,224,596

$

8,074,776

 

 

 

 

 

 Net income per common share:

 

 

 

 

       Basic

$

0.32

$

0.36

       Diluted

$

0.32

$

0.36

 

 

 

 

 

 Weighted average number of common shares outstanding:

 

 

 

 

       Basic

 

22,721,949

 

22,523,962

       Diluted

 

22,867,663

 

22,681,612

 

 

 

 

 

 Cash dividends declared per common share

$

0.10

$

-




Exhibit 99.1 Page 3 of 4




PETMED EXPRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 Three Months Ended

 

 

 June 30,

 

 

2010

 

2009

 Cash flows from operating activities:

 

 

 

 

    Net income

$

7,224,596 

$

8,074,776 

    Adjustments to reconcile net income to net cash

 

 

 

 

     provided by operating activities:

 

 

 

 

        Depreciation and amortization

 

350,363 

 

322,335 

        Share based compensation

 

522,502 

 

337,027 

        Deferred income taxes

 

376,047 

 

96,728 

        Bad debt expense

 

7,893 

 

23,378 

        (Increase) decrease in operating assets

 

 

 

 

           and increase (decrease) in liabilities:

 

 

 

 

             Accounts receivable

 

(581,719)

 

(455,506)

             Inventories - finished goods

 

13,279,102 

 

10,644,326 

             Prepaid income taxes

 

329,388 

 

361,743 

             Prepaid expenses and other current assets

 

(272,647)

 

(170,978)

             Accounts payable

 

1,243,878 

 

5,460,799 

             Income taxes payable

 

3,841,651 

 

4,019,300 

             Accrued expenses and other current liabilities

 

142,946 

 

543,055 

 Net cash provided by operating activities

 

26,464,000 

 

29,256,983 

 

 

 

 

 

 Cash flows from investing activities:

 

 

 

 

    Net change in investments

 

(10,016,981)

 

- 

    Purchases of property and equipment

 

(130,568)

 

(308,492)

 Net cash used in investing activities

 

(10,147,549)

 

(308,492)

 

 

 

 

 

 Cash flows from financing activities:

 

 

 

 

    Dividends paid

 

(2,278,728)

 

- 

    Purchases of treasury stock

 

(670,989)

 

- 

    Proceeds from the exercise of stock options

 

252,356 

 

319,763 

    Tax benefit related to stock options exercised

 

124,205 

 

109,082 

 Net cash (used in) provided by financing activities

 

(2,573,156)

 

428,845 

 

 

 

 

 

 Net increase in cash and cash equivalents

 

13,743,295 

 

29,377,336 

 Cash and cash equivalents, at beginning of period

 

53,143,450 

 

30,126,041 

 

 

 

 

 

 Cash and cash equivalents, at end of period

$

66,886,745 

$

59,503,377 

 

 

 

 

 

 Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

 

    Property and equipment purchases in accounts payable

$

- 

$

617,522 

 

 

 

 

 

    Dividends payable in accrued expenses

$

20,017 

$

- 




Exhibit 99.1 Page 4 of 4