EX-99.1 2 ex_160668.htm EXHIBIT 99.1 ex_160668.htm

    

Exhibit 99.1

 

PETMED EXPRESS D/B/A 1-800-PETMEDS ANNOUNCES ITS SECOND FISCAL QUARTER FINANCIAL RESULTS AND ITS QUARTERLY DIVIDEND OF $0.27 PER SHARE

 

Quarterly Reorder Sales Increased 1.4%

 

Gross Margins Improved Sequentially from 27.3% to 28.6%

 

Operating Margins Increased 430 Basis Points Sequentially

 

Delray Beach, Florida, October 21, 2019 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended September 30, 2019. Net sales for the quarter ended September 30, 2019 were $69.9 million, compared to $71.4 million for the quarter ended September 30, 2018, a decrease of 2.0%. Net income was $6.7 million, or $0.33 diluted per share, for the quarter ended September 30, 2019, compared to net income of $10.8 million, or $0.52 diluted per share, for the quarter ended September 30, 2018, a 36% decrease in diluted earnings per share. Reorder sales increased 1.4%, to $61.9 million for the quarter ended September 30, 2019, compared to $61.0 million for the same quarter in the prior year.

 

Menderes Akdag, CEO and President, commented: “We were encouraged with improvements to our reorder sales and gross and operating margins during the quarter. Gross margins improved by 130 basis points from 27.3% in the June quarter to 28.6% in the September quarter, and operating margins improved by 430 basis points from 7.7% in the June quarter to 12.0% in the September quarter. The gross margin increase can be attributed to our success in obtaining direct purchasing relationships with the major manufacturers, and the implementation of the minimum advertised price (MAP) policy by some of the major manufacturers. We anticipate MAP pricing to stabilize pet medication prices throughout the online channel. We made further progress in October, and we now have direct relationships with all of the major manufacturers, which may help further improve our gross margins in the future. We are also pleased to announce that on September 1st we launched our new PetMeds® Rewards Program. This customer loyalty program allows our customers to accrue points to receive additional discounts on future orders. This program will increase our engagement with our customer base and should help promote future reorder sales. Net cash from operations for the six months ended September 30, 2019 was $17.3 million, compared to $20.4 million for the same period last year.   In fiscal 2020, we will continue to be price competitive and will focus on optimizing our marketing in this more competitive environment and being more efficient with our advertising spending. In addition, we will be investing in our e-commerce platform to better service our customers. This platform will enable us to improve upon our already strong net promoter score of 83.5%. We believe this customer satisfaction measure reflects the strong bond we have with our customers and will assist the Company with future customer retention.”

 

The Board of Directors declared a quarterly dividend of $0.27 per share on the Company’s common stock. The dividend will be payable on November 15, 2019, to shareholders of record at the close of business on November 4, 2019. 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 21, 2019 until November 4, 2019 at 10:59 P.M Eastern Time. To access the replay, call (800) 839-2310 (toll free) or (203) 369-3635, 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, 2019. 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, 561-526-4444.

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Exhibit 99.1 Page 1 of 4
 

 

PETMED EXPRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

   

September 30,

    

March 31,

  
   

2019

    

2019

  
ASSETS   (Unaudited)          
                 

Current assets:

                

Cash and cash equivalents

   $ 94,897     $ 100,529  

Accounts receivable, less allowance for doubtful accounts of $22 and $39, respectively

     1,466       2,542  

Inventories - finished goods

     19,061       21,370  

Prepaid expenses and other current assets

     2,841       1,408  

Prepaid income taxes

     -       582  

Total current assets

     118,265       126,431  
                 

Noncurrent assets:

                

Property and equipment, net

     26,412       27,136  

Intangible assets

     860       860  

Total noncurrent assets

     27,272       27,996  
                 

Total assets

   $ 145,537     $ 154,427  
                 

LIABILITIES AND SHAREHOLDERS' EQUITY

                
                 

Current liabilities:

                

Accounts payable

   $ 15,155     $ 16,275  

Accrued expenses and other current liabilities

     2,871       2,351  

Income taxes payable

     525       -  

Total current liabilities

     18,551       18,626  
                 

Deferred tax liabilities

     1,395       1,121  
                 

Total liabilities

     19,946       19,747  
                 

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; 20,175 and 20,674 shares issued and outstanding, respectively

     20       21  

Additional paid-in capital

     2,347       12,478  

Retained earnings

     123,215       122,172  
                 

Total shareholders' equity

     125,591       134,680  
                 

Total liabilities and shareholders' equity

   $ 145,537     $ 154,427  

 

Exhibit 99.1 Page 2 of 4
 

 

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,

 
   

2019

    

2018

    

2019

    

2018

  
                                 

Sales

   $ 69,936     $ 71,396     $ 149,924     $ 158,786  

Cost of sales

     49,934       46,141       108,061       103,577  
                                 

Gross profit

     20,002       25,255       41,863       55,209  
                                 

Operating expenses:

                                

General and administrative

     6,303       6,200       12,811       13,134  

Advertising

     4,756       5,300       13,380       12,007  

Depreciation

     572       552       1,140       1,108  

Total operating expenses

     11,631       12,052       27,331       26,249  
                                 

Income from operations

     8,371       13,203       14,532       28,960  
                                 

Other income:

                                

Interest income, net

     459       428       1,026       807  

Other, net

     304       255       561       572  

Total other income

     763       683       1,587       1,379  
                                 

Income before provision for income taxes

     9,134       13,886       16,119       30,339  
                                 

Provision for income taxes

     2,469       3,134       4,111       7,005  
                                 

Net income

   $ 6,665     $ 10,752     $ 12,008     $ 23,334  
                                 

Comprehensive income

   $ 6,665     $ 10,752     $ 12,008     $ 23,334  
                                 
Net income per common share:                                

Basic

   $ 0.33     $ 0.53     $ 0.60     $ 1.14  

Diluted

   $ 0.33     $ 0.52     $ 0.60     $ 1.14  
                                 
Weighted average number of common shares outstanding:                                

Basic

     19,963       20,463       20,098       20,436  

Diluted

     19,973       20,520       20,109       20,485  
                                 

Cash dividends declared per common share

   $ 0.27     $ 0.27     $ 0.54     $ 0.52  

 

Exhibit 99.1 Page 3 of 4
 

 

PETMED EXPRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

 

   

Six Months Ended

 
   

September 30,

 
   

2019

    

2018

  
Cash flows from operating activities:                

Net income

   $ 12,008     $ 23,334  

Adjustments to reconcile net income to net cash provided by operating activities:

                

Depreciation

     1,140       1,108  

Share based compensation

     1,365       1,500  

Deferred income taxes

     274       189  

Bad debt expense

     64       49  
(Increase) decrease in operating assets and increase (decrease) in liabilities:                

Accounts receivable

     1,012       457  

Inventories - finished goods

     2,309       (5,279 )

Prepaid income taxes

     582       170  

Prepaid expenses and other current assets

     (1,433 )     (94 )

Accounts payable

     (1,120 )     (996 )

Accrued expenses and other current liabilities

     568       (36 )

Income taxes payable

     525       -  

Net cash provided by operating activities

     17,294       20,402  
                 
Cash flows from investing activities:                

Purchases of property and equipment

     (416 )     (450 )

Net cash used in investing activities

     (416 )     (450 )
                 
Cash flows from financing activities:                

Repurchase and retirement of common stock

     (11,496 )     -  

Dividends paid

     (11,014 )     (10,756 )

Net cash used in financing activities

     (22,510 )     (10,756 )
                 

Net (decrease) increase in cash and cash equivalents

     (5,632 )     9,196  

Cash and cash equivalents, at beginning of period

     100,529       77,936  
                 

Cash and cash equivalents, at end of period

   $ 94,897     $ 87,132  
                 
Supplemental disclosure of cash flow information:                
                 

Cash paid for income taxes

   $ 2,730     $ 6,645  
                 

Dividends payable in accrued expenses

   $ 155     $ 207  

 

Exhibit 99.1 Page 4 of 4