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PetMed Express D/B/A 1-800-PetMeds Announces Its Third Quarter Financial Results and Declares Its $0.27 Per Share Dividend

DELRAY BEACH, Fla., Jan. 22, 2019 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (PETS) today announced its financial results for the quarter ended December 31, 2018.  Net sales were $60.1 million for both the quarters ended December 31, 2018 and 2017.  Reorder sales for the quarter ended December 31, 2018 were $53.3 million, compared to $50.9 million for the quarter ended December 31, 2017, an increase of 4.6%.  Net sales for the nine months ended December 31, 2018 were $218.9 million, compared to $206.5 million for the nine months ended December 31, 2017, an increase of 6.0%.  Reorder sales for the nine months ended December 31, 2018 were $185.9 million, compared to $170.5 million for the nine months ended December 31, 2017, an increase of 9.0%.  Net income for the quarter ended December 31, 2018 was $7.8 million, or $0.38 diluted per share, compared to net income of $9.1 million, or $0.44 diluted per share, for the quarter ended December 31, 2017, a 14% decrease to net income.  Net income for the nine months ended December 31, 2018 was $31.1 million, or $1.52 diluted per share, compared to net income of $27.1 million, or $1.33 diluted per share, for the nine months ended December 31, 2017, a 15% increase to net income.  Average order size decreased to $84 for the quarter ended December 31, 2018, compared to $86 for the same quarter in the prior year. For the nine months ended December 31, 2018, online sales increased 7.0% to $185.3 million from $173.2 million for the same period the prior year, and were approximately 85% of all sales. 

Menderes Akdag, CEO and President, commented: “The market was much more competitive during the quarter, and as a result we gave additional discounts to our customers to stimulate sales, which had a negative effect on our gross margins.  We will continue to be aggressive with pricing and promotions, and increase advertising to address this more competitive online market.” 

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 February 15, 2019, to shareholders of record at the close of business on February 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 January 22, 2019 until February 5, 2019 at 11:59 P.M.  To access the replay, call (866) 457-5505 (toll free) or (203) 369-1279 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, 2018.  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.

PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for per share data)
           
    December 31,     March 31,
    2018     2018
ASSETS   (Unaudited)      
           
Current assets:          
Cash and cash equivalents $   93,166   $   77,936
Accounts receivable, less allowance for doubtful accounts of $19 and $35, respectively     1,269       2,292
Inventories - finished goods     32,247       23,337
Prepaid expenses and other current assets     1,266       882
Prepaid income taxes     525       788
Total current assets     128,473       105,235
           
Noncurrent assets:          
Property and equipment, net     27,584       28,741
Intangible assets     860       860
Total noncurrent assets     28,444       29,601
           
Total assets $   156,917   $   134,836
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
           
Current liabilities:          
Accounts payable $   20,283   $   15,274
Accrued expenses and other current liabilities     2,769       2,835
Total current liabilities     23,052       18,109
           
Deferred tax liabilities     1,007       996
           
Total liabilities     24,059       19,105
           
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; 20,674 and 20,601 shares issued and outstanding, respectively     21       21
Additional paid-in capital     11,693       9,381
Retained earnings     121,135       106,320
           
Total shareholders' equity     132,858       115,731
           
Total liabilities and shareholders' equity $   156,917   $   134,836
           

 

 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, 
    2018     2017     2018     2017
                       
Sales  $    60,068    $    60,110    $    218,854    $    206,478
Cost of sales     40,687       38,166       144,264       133,590
                       
Gross profit     19,381       21,944       74,590       72,888
                       
Operating expenses:                      
General and administrative     5,793       5,818       18,927       18,222
Advertising     3,619       4,126       15,626       14,944
Depreciation     556       532       1,664       1,590
Total operating expenses     9,968       10,476       36,217       34,756
                       
Income from operations     9,413       11,468       38,373       38,132
                       
Other income:                      
Interest income, net     508       191       1,315       417
Other, net     255       265       827       755
Total other income     763       456       2,142       1,172
                       
Income before provision for income taxes     10,176       11,924       40,515       39,304
                       
Provision for income taxes     2,389       2,860       9,394       12,204
                       
Net income  $    7,787    $    9,064    $    31,121    $    27,100
                       
Comprehensive income  $    7,787    $    9,064    $    31,121    $    27,100
                       
Net income per common share:                      
Basic  $    0.38    $    0.45    $    1.52    $    1.33
Diluted  $    0.38    $    0.44    $    1.52    $    1.33
                       
Weighted average number of common shares outstanding:                      
Basic     20,483       20,368       20,452       20,337
Diluted     20,493       20,425       20,487       20,437
                       
Cash dividends declared per common share  $    0.27    $    0.20    $    0.79    $    0.60
                       

 

PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands) (Unaudited) 
 
     Nine Months Ended 
     December 31, 
    2018      2017 
Cash flows from operating activities:          
Net income  $    31,121      $    27,100  
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation     1,664         1,590  
Share based compensation     2,312         1,858  
Deferred income taxes     11         (412 )
Bad debt expense     49         72  
(Increase) decrease in operating assets and increase (decrease) in liabilities:          
Accounts receivable     974         21  
Inventories - finished goods     (8,910 )       (1,679 )
Prepaid income taxes     263         -   
Prepaid expenses and other current assets     (384 )       45  
Accounts payable     5,009         (2,795 )
Income taxes payable     -          8,815  
Accrued expenses and other current liabilities     (84 )       530  
Net cash provided by operating activities     32,025         35,145  
           
Cash flows from investing activities:          
Purchases of property and equipment     (507 )       (564 )
Net cash used in investing activities     (507 )       (564 )
           
Cash flows from financing activities:          
Dividends paid     (16,288 )       (12,314 )
Net cash used in financing activities     (16,288 )       (12,314 )
           
Net increase in cash and cash equivalents     15,230         22,267  
Cash and cash equivalents, at beginning of period     77,936         58,730  
           
Cash and cash equivalents, at end of period  $    93,166      $    80,997  
           
Supplemental disclosure of cash flow information:          
           
Cash paid for income taxes  $    9,120      $    3,801  
           
Dividends payable in accrued expenses  $    258      $    246