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PetMed Express D/B/A 1-800-PetMeds Announces Its Second Quarter Financial Results

POMPANO BEACH, Fla., Oct. 21, 2013 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (Nasdaq:PETS) today announced its financial results for the quarter ended September 30, 2013. Net sales for the quarter ended September 30, 2013 were $60.5 million, compared to $58.1 million for the quarter ended September 30, 2012, an increase of 4.0%. Net sales for the six months ended September 30, 2013 were $134.7 million, compared to $127.1 million for the quarter ended September 30, 2012, an increase of 6.0%. Net income was $4.2 million, or $0.21 diluted per share, for the quarter ended September 30, 2013, compared to net income of $4.0 million, or $0.20 diluted per share, for the quarter ended September 30, 2012, a 3.0% increase to EPS. Net income was $8.9 million, or $0.44 diluted per share, for the six months ended September 30, 2013, compared to net income of $8.0 million, or $0.40 diluted per share, for the six months ended September 30, 2012, a 12.2% increase to EPS. Reorder sales increased by 5.3%, from $46.4 million to $48.9 million for the quarters ended September 30, 2012 and 2013, respectively. Additionally, the Company's online sales increased by 7.3% to $47.9 million for the quarter ended September 30, 2013, compared to $44.6 million for the same quarter the prior year, with approximately 79% of all orders being generated from its website during the quarter compared to 77% for the same quarter the prior year.

Menderes Akdag, CEO and President, commented: "We are pleased with the strong reorder sales for the quarter. Our sales increase for the quarter was also highlighted by an increased average order size - $73 for the quarter ended September 30, 2013 compared to $72 for the same quarter in the prior year. For the quarter ended September 30, 2013 our operating expenses decreased by 140 basis points, mainly due to a reduction in advertising expenses. Cash flow from operations increased by 55%, from $15.7 million to $24.4 million for the quarters ended September 30, 2012 and 2013, respectively. For the remainder of Fiscal 2014 we are focusing on improving our gross profit margins and continuing to expand our product offerings."

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, 2013 until November 4, 2013 at 11:59 P.M. To access the replay, call (800) 454-0163 (toll free) or (203) 369-3803, 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, 2013. 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,
2013
March 31,
2013
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 35,913 $ 18,155
Short term investments - available for sale 15,486 15,490
Accounts receivable, less allowance for doubtful accounts of $5 and $5, respectively 1,384 1,439
Inventories - finished goods 17,341 31,601
Prepaid expenses and other current assets 3,616 2,520
Deferred tax assets 771 982
Prepaid income taxes 779 --
Total current assets 75,290 70,187
Property and equipment, net 1,685 2,132
Intangible asset 860 860
Total assets $ 77,835 $ 73,179
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,319 $ 6,454
Accrued expenses and other current liabilities 2,208 2,381
Income taxes payable -- 162
Total current liabilities 10,527 8,997
Deferred tax liabilities 150 168
Total liabilities 10,677 9,165
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; 20,190 and 20,109 shares issued and outstanding, respectively 20 20
Additional paid-in capital 732 --
Retained earnings 66,445 63,987
Accumulated other comprehensive loss (48) (2)
Total shareholders' equity 67,158 64,014
Total liabilities and shareholders' equity $ 77,835 $ 73,179
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except for per share amounts) (Unaudited)
Three Months Ended
September 30,
Six Months Ended
September 30,
2013 2012 2013 2012
Sales $ 60,479 $ 58,145 $ 134,673 $ 127,100
Cost of sales 41,227 38,775 91,408 85,426
Gross profit 19,252 19,370 43,265 41,674
Operating expenses:
General and administrative 5,505 5,371 11,378 11,293
Advertising 6,985 7,424 17,380 17,274
Depreciation 230 249 478 577
Total operating expenses 12,720 13,044 29,236 29,144
Income from operations 6,532 6,326 14,029 12,530
Other income:
Interest income, net 48 64 95 123
Other, net 1 -- (1) --
Total other income 49 64 94 123
Income before provision for income taxes 6,581 6,390 14,123 12,653
Provision for income taxes 2,431 2,356 5,218 4,667
Net income $ 4,150 $ 4,034 $ 8,905 $ 7,986
Net change in unrealized gain (loss) on short term investments -- 16 (46) 25
Comprehensive income $ 4,150 $ 4,050 $ 8,859 $ 8,011
Net income per common share:
Basic $ 0.21 $ 0.20 $ 0.45 $ 0.40
Diluted $ 0.21 $ 0.20 $ 0.44 $ 0.40
Weighted average number of common shares outstanding:
Basic 19,902 19,962 19,875 20,040
Diluted 20,044 20,062 20,024 20,154
Cash dividends declared per common share $ 0.17 $ 0.15 $ 0.32 $ 0.30
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
Six Months Ended
September 30,
2013 2012
Cash flows from operating activities:
Net income $ 8,905 $ 7,986
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 478 577
Share based compensation 732 1,039
Deferred income taxes 193 113
Bad debt expense 49 27
(Increase) decrease in operating assets and increase (decrease) in liabilities:
Accounts receivable 6 (343)
Inventories - finished goods 14,260 6,627
Prepaid income taxes (779) (150)
Prepaid expenses and other current assets (1,096) 194
Accounts payable 1,865 337
Income taxes payable (162) --
Accrued expenses and other current liabilities (93) (673)
Net cash provided by operating activities 24,358 15,734
Cash flows from investing activities:
Net change in investments (41) (5,053)
Purchases of property and equipment (31) (291)
Net cash used in investing activities (72) (5,344)
Cash flows from financing activities:
Dividends paid (6,528) (6,117)
Purchases of treasury stock -- (3,865)
Tax adjustment related to restricted stock -- (168)
Net cash used in financing activities (6,528) (10,150)
Net increase in cash and cash equivalents 17,758 240
Cash and cash equivalents, at beginning of period 18,155 46,801
Cash and cash equivalents, at end of period $ 35,913 $ 47,041
Supplemental disclosure of cash flow information:
Cash paid for income taxes $ 5,688 $ 4,872
Dividends payable in accrued expenses $ 196 $ 136

CONTACT: PetMed Express, Inc. Bruce S. Rosenbloom, CFO 954-979-5995Source:PetMed Express, Inc.