Petmed Express D/B/A 1-800-PetMeds Announces Its Third Quarter Financial Results and Its $0.17 Per Share Quarterly Dividend

GlobeNewswire

Net Income Increased 5.6%

Gross Margins Increased 98 basis points

POMPANO BEACH, Fla., Jan. 20, 2015 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (PETS) today announced its financial results for the quarter ended December 31, 2014. Net income was $4.8 million, or $0.24 diluted per share, for the quarter ended December 31, 2014, compared to net income of $4.5 million, or $0.23 diluted per share, for the quarter ended December 31, 2013, an increase to net income of 5.6%. Excluding a one-time charge for an IT-related discontinued project in the quarter ended September 30, 2014, net income for the nine months ended December 31, 2014 was $13.6 million, or $0.67 diluted per share, compared to net income of $13.4 million, or $0.67 diluted per share, for the nine months ended December 31, 2013, an increase to net income of 1.0%. The one-time IT-related discontinued project cost of $1.7 million was expensed in the September quarter. The after tax net impact of this charge was $1.1 million, or $0.05 diluted per share. There are no further charges expected in the future related to this discontinued project.

Net sales for the quarter ended December 31, 2014 were $49.3 million, compared to $50.1 million for the quarter ended December 31, 2013, a decrease of 1.6%. Net sales for the nine months ended December 31, 2014 were $179.4 million, compared to $184.8 million for the quarter ended December 31, 2013, a decrease of 2.9%. The Company's online sales for the quarter ended December 31, 2014 were approximately 80% of all sales, compared to 79% for the same quarter the prior year.

Menderes Akdag, President and CEO, commented: "During the quarter we were able to increase gross profit margins and average order size. For the quarter ended December 31, 2014 our gross margins increased 98 basis points, which can be attributed to a shift in sales to higher margin items. Our average order size increased to $76 for the December quarter, compared to $72 for the same period in the prior year. For the quarter ended December 31, 2014, our operational expenses decreased by 51 basis points, mainly due to a reduction in advertising spending. Cash flow from operations was $29.5 million for the quarter ended December 31, 2014, compared to $17.7 million for the quarter ended December 31, 2013. For the remainder of Fiscal 2015 we are focusing on improving our marketing efforts to increase sales."

The Board of Directors declared a quarterly dividend of $0.17 per share on the Company's common stock. The dividend will be payable on February 13, 2015, to shareholders of record at the close of business on February 3, 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 January 20, 2015 until February 3, 2015 at 11:59 P.M. To access the replay, call (866) 430-8791 (toll free) or (203) 369-0938 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, 2014. 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, March 31,

2014 2014
ASSETS (Unaudited)



Current assets:

Cash and cash equivalents $ 37,068 $ 18,305
Short term investments - available for sale 15,579 15,539
Accounts receivable, less allowance for doubtful accounts of $5 and $7, respectively 1,352 1,761
Inventories - finished goods 21,613 35,727
Prepaid expenses and other current assets 1,280 1,761
Deferred tax assets 863 1,062
Prepaid income taxes -- 54
Total current assets 77,755 74,209



Noncurrent assets:

Prepaid expenses -- 1,996
Property and equipment, net 1,222 1,310
Intangible assets 860 860
Deferred tax assets 5 --



Total assets $ 79,842 $ 78,375



LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:

Accounts payable $ 3,876 $ 5,768
Accrued expenses and other current liabilities 2,136 2,325
Income taxes payable 283 --
Total current liabilities 6,295 8,093



Deferred tax liabilities -- 65



Total liabilities 6,295 8,158



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; 20,263 and 20,190 shares issued and outstanding, respectively 20 20
Additional paid-in capital 2,735 1,578
Retained earnings 70,833 68,647
Accumulated other comprehensive loss (50) (37)



Total shareholders' equity 73,547 70,217



Total liabilities and shareholders' equity $ 79,842 $ 78,375

PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except for per share amounts) (Unaudited)






Three Months Ended Nine Months Ended

December 31, December 31,

2014 2013 2014 2013





Sales $ 49,284 $ 50,086 $ 179,401 $ 184,759
Cost of sales 32,184 33,197 120,070 124,605





Gross profit 17,100 16,889 59,331 60,154





Operating expenses:



General and administrative 4,946 5,106 16,202 16,484
Advertising 4,323 4,517 21,134 21,896
Discontinued project costs -- -- 1,714 --
Depreciation 165 219 487 697
Total operating expenses 9,434 9,842 39,537 39,077





Income from operations 7,666 7,047 19,794 21,077





Other income:



Interest income, net 50 46 138 141
Other, net (4) (3) 3 (5)
Total other income 46 43 141 136





Income before provision for income taxes 7,712 7,090 19,935 21,213





Provision for income taxes 2,915 2,549 7,433 7,767





Net income $ 4,797 $ 4,541 $ 12,502 $ 13,446





Net change in unrealized gain (loss) on short term investments (20) 9 (13) (36)





Comprehensive income $ 4,777 $ 4,550 $ 12,489 $ 13,410





Net income per common share:



Basic $ 0.24 $ 0.23 $ 0.62 $ 0.68
Diluted $ 0.24 $ 0.23 $ 0.62 $ 0.67





Weighted average number of common shares outstanding:


Basic 20,038 19,925 20,005 19,892
Diluted 20,162 20,079 20,133 20,042





Cash dividends declared per common share $ 0.17 $ 0.17 $ 0.51 $ 0.49

PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)


Nine Months Ended

December 31,

2014 2013
Cash flows from operating activities:

Net income $ 12,502 $ 13,446
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation 487 697
Share based compensation 1,118 1,105
Discontinued project costs 1,714 --
Deferred income taxes 129 (84)
Bad debt expense 66 75
(Increase) decrease in operating assets and increase (decrease) in liabilities:

Accounts receivable 343 (286)
Inventories - finished goods 14,114 7,060
Prepaid income taxes 54 (165)
Prepaid expenses and other current assets 763 (1,449)
Accounts payable (1,892) (2,411)
Income taxes payable 283 (162)
Accrued expenses and other current liabilities (153) (152)
Net cash provided by operating activities 29,528 17,674



Cash flows from investing activities:

Net change in investments (53) (62)
Purchases of property and equipment (398) (39)
Net cash used in investing activities (451) (101)



Cash flows from financing activities:

Dividends paid (10,353) (9,914)
Tax adjustment related to restricted stock 39 123
Net cash used in financing activities (10,314) (9,791)



Net increase in cash and cash equivalents 18,763 7,782
Cash and cash equivalents, at beginning of period 18,305 18,155



Cash and cash equivalents, at end of period $ 37,068 $ 25,937



Supplemental disclosure of cash flow information:




Cash paid for income taxes $ 6,929 $ 7,776



Dividends payable in accrued expenses $ 225 $ 241

View photo

.

Contact:

                
View Comments (1)