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PetMed Express d/b/a 1-800-PetMeds Announces Its Third Fiscal Quarter Financial Results and Its Quarterly Dividend of $0.28 Per Share

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PetMed Express, Inc.
·8 min read
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Quarterly Sales Increased 10%
Diluted EPS increased from $0.34 to $0.38 per share
Quarterly Average Order Size increased to $88

DELRAY BEACH, Fla., Jan. 19, 2021 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended December 31, 2020. Net sales for the quarter ended December 31, 2020 were $65.9 million, compared to $59.9 million for the quarter ended December 31, 2019, an increase of 10.0%. Net sales for the nine months ended December 31, 2020 were $237.5 million, compared to $209.8 million for the nine months ended December 31, 2019, an increase of 13.2%. Net income was $7.6 million, or $0.38 diluted per share, for the quarter ended December 31, 2020, compared to net income of $6.8 million, or $0.34 diluted per share, for the quarter ended December 31, 2019, an 11.3% increase to net income. Net income was $23.8 million, or $1.18 diluted per share, for the nine months ended December 31, 2020, compared to net income of $18.8 million, or $0.94 diluted per share, for the nine months ended December 31, 2019, a 26.0% increase to net income. Reorder sales increased 11.9%, to $60.2 million for the quarter ended December 31, 2020, compared to $53.8 million for the same quarter in the prior year. Reorder sales increased 13.6%, to $208.4 million for the nine months ended December 31, 2020, compared to $183.4 million for the same period in the prior year.

Menderes Akdag, CEO and President, commented: “We were pleased with the Company’s performance during the quarter and throughout 2020, where we have seen both double digit top and bottom line growth. Strong reorder sales and increasing gross and operating margins during the quarter contributed to our success. Our reorder growth for the three and nine months ended on December 31, 2020 was likely energized by the increased use of loyalty credits by our customers through our Loyalty Program, which was launched in September 2019, and by our Easy Refill Program. Our average order size increased from $85 to $88 for the quarters ended December 31, 2019 and 2020, respectively. In the beginning of 2021 we unveiled a new logo to commemorate the Company’s 25th anniversary. The inspiration for this new logo and brand identity came mostly from consumer feedback. We embraced the opportunity to refresh our logo and brand to best represent both pet health and wellness on our new website platform. In the next fiscal year, we will be exploring alternative ways of acquiring new customers and adding value-added services, and we will continue investing in our e-commerce platform and mobile app to optimize our customers’ digital experience.”

The Board of Directors declared a quarterly dividend of $0.28 per share on the Company’s common stock. The dividend will be payable on February 12, 2021, to shareholders of record at the close of business on February 1, 2021. 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, the Company 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 19, 2021 until February 2, 2021 at 11:59 P.M. Eastern Time. To access the replay, call (888) 676-2680 (toll free) or (402) 220-6446, and enter passcode 5500.

Founded in 1996, PetMed Express is America’s Most Trusted Pet Pharmacy, delivering prescription and non-prescription pet medications and other health products for dogs, cats, and horses 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, 2020. 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,

2020

2020

ASSETS

(Unaudited)

Current assets:

Cash and cash equivalents

$

106,501

$

103,762

Accounts receivable, less allowance for doubtful

accounts of $28 and $59, respectively

1,831

3,843

Inventories - finished goods

28,165

17,884

Prepaid expenses and other current assets

4,512

3,529

Total current assets

141,009

129,018

Noncurrent assets:

Property and equipment, net

25,502

25,445

Intangible assets

860

860

Total noncurrent assets

26,362

26,305

Total assets

$

167,371

$

155,323

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

21,869

$

19,658

Accrued expenses and other current liabilities

4,429

4,214

Income taxes payable

623

471

Total current liabilities

26,921

24,343

Deferred tax liabilities

1,323

970

Total liabilities

28,244

25,313

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;

20,271 and 20,166 shares issued and outstanding, respectively

20

20

Additional paid-in capital

6,098

3,804

Retained earnings

133,000

126,177

Total shareholders' equity

139,127

130,010

Total liabilities and shareholders' equity

$

167,371

$

155,323



PETMED EXPRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except for per share amounts) (Unaudited)

Three Months Ended

Nine Months Ended

December 31,

December 31,

2020

2019

2020

2019

Sales

$

65,896

$

59,915

$

237,536

$

209,839

Cost of sales

46,273

42,218

168,110

150,279

Gross profit

19,623

17,697

69,426

59,560

Operating expenses:

General and administrative

6,487

6,040

21,050

18,851

Advertising

3,221

3,163

17,385

16,543

Depreciation

622

562

1,791

1,702

Total operating expenses

10,330

9,765

40,226

37,096

Income from operations

9,293

7,932

29,200

22,464

Other income:

Interest income, net

73

421

229

1,447

Other, net

345

301

938

862

Total other income

418

722

1,167

2,309

Income before provision for income taxes

9,711

8,654

30,367

24,773

Provision for income taxes

2,100

1,814

6,576

5,925

Net income

$

7,611

$

6,840

$

23,791

$

18,848

Net income per common share:

Basic

$

0.38

$

0.34

$

1.19

$

0.94

Diluted

$

0.38

$

0.34

$

1.18

$

0.94

Weighted average number of common shares outstanding:

Basic

20,094

19,984

20,047

20,060

Diluted

20,104

19,994

20,100

20,071

Cash dividends declared per common share

$

0.28

$

0.27

$

0.84

$

0.81



PETMED EXPRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

Nine Months Ended

December 31,

2020

2019

Cash flows from operating activities:

Net income

$

23,791

$

18,848

Adjustments to reconcile net income to net cash

provided by operating activities:

Depreciation

1,791

1,702

Share based compensation

2,294

2,081

Deferred income taxes

353

(12

)

Bad debt expense

84

102

(Increase) decrease in operating assets

and increase (decrease) in liabilities:

Accounts receivable

1,928

388

Inventories - finished goods

(10,281

)

(2,795

)

Prepaid income taxes

-

582

Prepaid expenses and other current assets

(983

)

(1,424

)

Accounts payable

2,211

360

Accrued expenses and other current liabilities

286

851

Income taxes payable

152

895

Net cash provided by operating activities

21,626

21,578

Cash flows from investing activities:

Purchases of property and equipment

(1,848

)

(1,827

)

Net cash used in investing activities

(1,848

)

(1,827

)

Cash flows from financing activities:

Repurchase and retirement of common stock

-

(11,496

)

Dividends paid

(17,039

)

(16,410

)

Net cash used in financing activities

(17,039

)

(27,906

)

Net increase (decrease) in cash and cash equivalents

2,739

(8,155

)

Cash and cash equivalents, at beginning of period

103,762

100,529

Cash and cash equivalents, at end of period

$

106,501

$

92,374

Supplemental disclosure of cash flow information:

Cash paid for income taxes

$

6,356

$

4,460

Property and equipment in current assets

$

-

$

1,344

Dividends payable in accrued expenses

$

174

$

196