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

POMPANO BEACH, Fla., Jan. 21, 2014 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (Nasdaq:PETS) today announced its financial results for the quarter ended December 31, 2013. Net sales for the quarter ended December 31, 2013 were $50.1 million, compared to $49.6 million for the quarter ended December 31, 2012, an increase of 1.0%. Net sales for the nine months ended December 31, 2013 were $184.8 million, compared to $176.7 million for the nine months ended December 31, 2012, an increase of 4.6%. Net income was $4.5 million, or $0.23 diluted per share, for the quarter ended December 31, 2013, compared to net income of $4.6 million, or the same $0.23 diluted per share, for the quarter ended December 31, 2012. Net income was $13.4 million, or $0.67 diluted per share, for the nine months ended December 31, 2013, compared to net income of $12.6 million, or $0.63 diluted per share, for the nine months ended December 31, 2012, a 7.2% increase to EPS. Reorder sales increased by 3.6%, from $40.9 million to $42.4 million for the quarters ended December 31, 2012 and 2013, respectively. Additionally, the Company's online sales increased by 2.1% to $39.5 million for the quarter ended December 31, 2013, compared to $38.7 million for the same quarter the prior year, with approximately 79% of all orders being generated from its website during the quarter compared to 78% for the same quarter the prior year.

Menderes Akdag, CEO and President, commented: "We are pleased with the increased reorder sales for the quarter. Our sales increase for the quarter was also highlighted by an increased average order size - $72 for the quarter ended December 31, 2013 compared to $71 for the same quarter in the prior year. For the quarter ended December 31, 2013 our operating expenses decreased by 50 basis points. Going forward we are focusing on improving our gross profit margins and new order sales."

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 21, 2014 until February 4, 2014 at 11:59 P.M. To access the replay, call (800) 860-4709 (toll free) or (203) 369-3837, 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)
December 31,
2013
March 31,
2013
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 25,937 $ 18,155
Short term investments - available for sale 15,516 15,490
Accounts receivable, less allowance for doubtful accounts of $6 and $5, respectively 1,650 1,439
Inventories - finished goods 24,541 31,601
Prepaid expenses and other current assets 1,976 1,090
Deferred tax assets 997 982
Prepaid income taxes 165 --
Total current assets 70,782 68,757
Noncurrent assets:
Prepaid expenses 1,993 1,430
Property and equipment, net 1,474 2,132
Intangible assets 860 860
Total noncurrent assets 4,327 4,422
Total assets $ 75,109 $ 73,179
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,043 $ 6,454
Accrued expenses and other current liabilities 2,194 2,381
Income taxes payable -- 162
Total current liabilities 6,237 8,997
Deferred tax liabilities 99 168
Total liabilities 6,336 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 1,228 --
Retained earnings 67,554 63,987
Accumulated other comprehensive loss (38) (2)
Total shareholders' equity 68,773 64,014
Total liabilities and shareholders' equity $ 75,109 $ 73,179
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except for per share amounts) (Unaudited)
Three Months Ended
December 31,
Nine Months Ended
December 31,
2013 2012 2013 2012
Sales $ 50,086 $ 49,609 $ 184,759 $ 176,709
Cost of sales 33,197 32,397 124,605 117,823
Gross profit 16,889 17,212 60,154 58,886
Operating expenses:
General and administrative 5,106 5,147 16,484 16,440
Advertising 4,517 4,602 21,896 21,876
Depreciation 219 254 697 831
Total operating expenses 9,842 10,003 39,077 39,147
Income from operations 7,047 7,209 21,077 19,739
Other income:
Interest income, net 46 141 141 264
Other, net (3) (3) (5) (3)
Total other income 43 138 136 261
Income before provision for income taxes 7,090 7,347 21,213 20,000
Provision for income taxes 2,549 2,770 7,767 7,437
Net income $ 4,541 $ 4,577 $ 13,446 $ 12,563
Net change in unrealized gain (loss) on short term investments 9 (83) (36) (58)
Comprehensive income $ 4,550 $ 4,494 $ 13,410 $ 12,505
Net income per common share:
Basic $ 0.23 $ 0.23 $ 0.68 $ 0.63
Diluted $ 0.23 $ 0.23 $ 0.67 $ 0.63
Weighted average number of common shares outstanding:
Basic 19,925 19,808 19,892 19,963
Diluted 20,079 19,923 20,042 20,077
Cash dividends declared per common share $ 0.17 $ 1.15 $ 0.49 $ 1.45
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
Nine Months Ended
December 31,
2013 2012
Cash flows from operating activities:
Net income $ 13,446 $ 12,563
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 697 831
Share based compensation 1,105 1,496
Deferred income taxes (84) (77)
Bad debt expense 75 37
(Increase) decrease in operating assets and increase (decrease) in liabilities:
Accounts receivable (286) 791
Inventories - finished goods 7,060 7,498
Prepaid income taxes (165) 199
Prepaid expenses and other current assets (1,449) (337)
Accounts payable (2,411) (645)
Income taxes payable (162) 246
Accrued expenses and other current liabilities (152) (761)
Net cash provided by operating activities 17,674 21,841
Cash flows from investing activities:
Net change in investments (62) (5,166)
Purchases of property and equipment (39) (529)
Net cash used in investing activities (101) (5,695)
Cash flows from financing activities:
Dividends paid (9,914) (28,896)
Purchases of treasury stock -- (3,865)
Tax adjustment related to restricted stock 123 (168)
Net cash used in financing activities (9,791) (32,929)
Net increase in cash and cash equivalents 7,782 (16,783)
Cash and cash equivalents, at beginning of period 18,155 46,801
Cash and cash equivalents, at end of period $ 25,937 $ 30,018
Supplemental disclosure of cash flow information:
Cash paid for income taxes $ 7,776 $ 7,237
Dividends payable in accrued expenses $ 241 $ 351

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