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PetMed Express D/B/A 1-800-PetMeds Announces Its Second Quarter Financial Results and Its $0.18 Per Share Quarterly Dividend

Globe Newswire

POMPANO BEACH, Fla., Oct. 19, 2015 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (NASDAQ:PETS) today announced its financial results for the quarter ended September 30, 2015. Excluding a one-time charge for an IT-related discontinued project in the quarter and six months ended September 30, 2014, net income for the quarter ended September 30, 2015 was $4.5 million, or $0.22 diluted per share, compared to net income of $3.8 million, or $0.19 diluted per share, for the quarter ended September 30, 2014, an 18% increase to net income, and net income for the six months ended September 30, 2015 was $10.3 million, or $0.51 diluted per share, compared to net income of $8.8 million, or $0.44 diluted per share, for the six months ended September 30, 2014, a 17% increase to net income. This one-time IT-related discontinued project cost of $1.7 million was expensed in the quarter ended September 30, 2014. The after tax net impact of this charge was $1.1 million, or $0.05 diluted per share. Net sales for the quarter ended September 30, 2015 were $56.7 million, compared to $57.6 million for the quarter ended September 30, 2014, a decrease of 1.5%. Net sales for the six months ended September 30, 2015 were $128.4 million, compared to $130.1 million for the six months ended September 30, 2014, a decrease of 1.4%. The Company’s online sales for the quarter ended September 30, 2015 were approximately 81% of all sales, compared to 80% for the same quarter the prior year.

Menderes Akdag, CEO and President, commented: “Despite sales being down slightly we were able to increase both gross profit margins and average order size during the quarter. For the quarter ended September 30, 2015 our gross profit increased 128 basis points, which can be attributed to a shift in sales to higher margin items. Our average order size increased to $80 for the quarter ended September 30, 2015, compared to $75 for the same quarter in the prior year. Excluding the one-time charge in the quarter ended September 30, 2014, for the quarter ended September 30, 2015 our operating expenses decreased by about 79 basis points, which can be attributed to a reduction in advertising spending. For the remainder of Fiscal 2016 we are focusing on improving our marketing efforts to increase sales and profitability.”

The Board of Directors declared a quarterly dividend of $0.18 per share on the Company’s common stock. The dividend will be payable on November 13, 2015, to shareholders of record at the close of business on November 2, 2015. 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 19, 2015 until November 3, 2015 at 11:59 P.M. To access the replay, call (800) 688-2794 (toll free) or (203) 369-3685 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.

PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
     
  September 30, March 31,
   2015   2015 
  (Unaudited)  
ASSETS    
     
Current assets:    
Cash and cash equivalents$ 42,180 $ 35,613 
Short term investments - available for sale  15,604   15,591 
Accounts receivable, less allowance for doubtful accounts of $12 and $8, respectively  1,624   1,931 
Inventories - finished goods  24,404   25,068 
Prepaid expenses and other current assets  1,466   1,380 
Deferred tax assets  761   817 
Prepaid income taxes  60   - 
Total current assets  86,099   80,400 
     
Noncurrent assets:    
Property and equipment, net  1,367   1,569 
Intangible assets  860   860 
Deferred tax assets  74   23 
     
Total assets$ 88,400 $ 82,852 
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
Current liabilities:    
Accounts payable$ 7,277 $ 5,153 
Accrued expenses and other current liabilities  1,879   2,214 
Income taxes payable  -   50 
     
Total liabilities  9,156   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; 20,331 and 20,262 shares issued and outstanding, respectively  20   20 
Additional paid-in capital  3,987   3,117 
Retained earnings  75,301   72,343 
Accumulated other comprehensive loss  (73)  (54)
     
Total shareholders' equity  79,244   75,435 
     
Total liabilities and shareholders' equity$ 88,400 $ 82,852 

 

 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, 
   2015   2014   2015  2014
         
Sales $   56,725  $   57,576  $   128,359  $  130,117
Cost of sales     37,812     39,117     86,480    87,886
         
Gross profit     18,913     18,459     41,879    42,231
         
Operating expenses:         
General and administrative     5,388     5,381     11,187    11,256
Advertising     6,249     6,915     14,134    16,811
Discontinued project costs     -      1,714     -     1,714
Depreciation     186     159     377    322
Total operating expenses     11,823     14,169     25,698    30,103
         
Income from operations     7,090     4,290     16,181    12,128
         
Other income:         
Interest income, net     55     44     105    88
Other, net     (4)    (2)    (8)   7
Total other income     51     42     97    95
         
Income before provision for income taxes     7,141     4,332     16,278    12,223
         
Provision for income taxes     2,639     1,600     6,019    4,518
         
Net income $   4,502  $   2,732  $   10,259  $  7,705
         
Net change in unrealized gain (loss) on short  term investments     16     (1)    (19)   7
         
Comprehensive income $   4,518  $   2,731  $   10,240  $  7,712
         
Net income per common share:         
Basic $   0.22  $   0.14  $   0.51  $  0.39
Diluted $   0.22  $   0.14  $   0.51  $  0.38
         
Weighted average number of common shares outstanding:       
Basic     20,126     20,016     20,100    19,988
Diluted     20,246     20,146     20,222    20,119
         
Cash dividends declared per common share  $   0.18  $   0.17  $   0.36  $  0.34


PETMED EXPRESS, INC. AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
 (In thousands) (Unaudited)  
  
   Six Months Ended  
   September 30,  
   2015   2014  
Cash flows from operating activities:      
Net income  $   10,259  $   7,705  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation     377     322  
Share based compensation     777     753  
Discontinued project costs     -      1,714  
Deferred income taxes     4     237  
Bad debt expense     227     40  
(Increase) decrease in operating assets and increase (decrease) in liabilities:      
Accounts receivable     81     (235) 
Inventories - finished goods     664     15,192  
Prepaid income taxes     (60)    (1,816) 
Prepaid expenses and other current assets     (86)    119  
Accounts payable     2,125     (521) 
Income taxes payable     (50)    -   
Accrued expenses and other current liabilities     (277)    80  
Net cash provided by operating activities     14,041     23,590  
      
Cash flows from investing activities:      
Net change in investments     (33)    (37) 
Purchases of property and equipment     (175)    (372) 
Net cash used in investing activities     (208)    (409) 
      
Cash flows from financing activities:      
Dividends paid     (7,358)    (6,946) 
Tax adjustment related to restricted stock     92     39  
Net cash used in financing activities     (7,266)    (6,907) 
      
Net increase in cash and cash equivalents     6,567     16,274  
Cash and cash equivalents, at beginning of period     35,613     18,305  
      
Cash and cash equivalents, at end of period  $   42,180  $   34,579  
      
Supplemental disclosure of cash flow information:      
      
Cash paid for income taxes  $   6,033  $   6,058  
      
Dividends payable in accrued expenses  $   154  $   191  

 

 

For investment relations contact PetMed Express, Inc., Bruce S. Rosenbloom, CFO, 954-979-5995.

Source:PetMed Express, Inc.