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PetMed Express, Inc. D/B/A 1-800-PetMeds Announces Its Fourth Quarter and Fiscal Year End Financial Results and Declares Its $0.27 Per Share Dividend

DELRAY BEACH, Fla., May 06, 2019 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (PETS) today announced its financial results for the fiscal year ended March 31, 2019. Net sales for the quarter ended March 31, 2019 were $64.6 million, compared to $67.3 million for the quarter ended March 31, 2018, a decrease of 4.1%. For the fiscal year ended March 31, 2019 net sales were $283.4 million, compared to $273.8 million for the fiscal year ended March 31, 2018, an increase of 3.5%. Reorder sales for the fiscal year ended March 31, 2019 were $241.8 million, compared to $227.5 million for the year ended March 31, 2018, an increase of 6.3%. Net income for the quarter ended March 31, 2019 was $6.6 million, or $0.32 diluted per share, compared to net income of $10.2 million, or $0.50 diluted per share, for the same quarter the prior year, a decrease to net income of 35%. Net income for the fiscal year ended March 31, 2019 was $37.7 million, or $1.84 diluted per share, compared to net income of $37.3 million, or $1.82 diluted per share, for the fiscal year ended March 31, 2018, an increase to net income of 1.2%. The Company’s online sales for the fiscal year ended March 31, 2019 were approximately 85% of all sales, compared to 84% for the prior year.

Menderes Akdag, President and CEO, commented: “The online pet medication market continued to be more competitive during the quarter, which had a negative effect on our sales and gross margins. Our average order value was $87 for both fiscal 2019 and 2018. Net cash provided by operating activities improved to $45.1 million for fiscal 2019 compared to $37.4 million for fiscal 2018. In fiscal 2020, we will continue to be price competitive, and will increase advertising to promote brand awareness and reinforce brand loyalty to address this more competitive online market. In addition, we will be investing in our e-commerce platform to better service our customers.”

The Board of Directors declared a quarterly dividend of $0.27 per share on its common stock. The dividend will be payable on May 24, 2019, to shareholders of record at the close of business on May 17, 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 year-end financial results. To access the call which is open to the public, 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. Eastern Time on May 6, 2019 until May 20, 2019 at 11:59 P.M. To access the replay, call (866) 465-0340 (toll free) or (203) 369-1417 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

CONSOLIDATED BALANCE SHEETS

(In thousands, except for per share amounts)

March 31,

March 31,

2019

2018

ASSETS

(UNAUDITED)

Current assets:

Cash and cash equivalents

$

100,529

$

77,936

Accounts receivable, less allowance for doubtful
accounts of $39 and $35, respectively

2,542

2,292

Inventories - finished goods

21,370

23,337

Prepaid expenses and other current assets

1,408

882

Prepaid income taxes

582

788

Total current assets

126,431

105,235

Noncurrent assets:

Property and equipment, net

27,136

28,741

Intangible assets

860

860

Total noncurrent assets

27,996

29,601

Total assets

$

154,427

$

134,836

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

16,275

$

15,274

Accrued expenses and other current liabilities

2,351

2,835

Total current liabilities

18,626

18,109

Deferred tax liabilities

1,121

996

Total liabilities

19,747

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

12,478

9,381

Retained earnings

122,172

106,320

Total shareholders' equity

134,680

115,731

Total liabilities and shareholders' equity

$

154,427

$

134,836

PETMED EXPRESS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except for per share amount)

Three Months Ended

Year Ended

March 31,

March 31,

2019

2018

2019

2018

(UNAUDITED)

(UNAUDITED)

Sales

$

64,565

$

67,322

$

283,419

$

273,800

Cost of sales

43,841

42,403

188,105

175,993

Gross profit

20,724

24,919

95,314

97,807

Operating expenses:

General and administrative

5,840

6,068

24,767

24,290

Advertising

6,522

4,311

22,148

19,255

Depreciation

560

536

2,225

2,126

Total operating expenses

12,922

10,915

49,140

45,671

Income from operations

7,802

14,004

46,174

52,136

Other income:

Interest income, net

549

241

1,864

658

Other, net

256

240

1,083

995

Total other income

805

481

2,947

1,653

Income before provision for income taxes

8,607

14,485

49,121

53,789

Provision for income taxes

1,987

4,302

11,381

16,506

Net income

$

6,620

$

10,183

$

37,740

$

37,283

Comprehensive income

$

6,620

$

10,183

$

37,740

$

37,283

Net income per common share:

Basic

$

0.32

$

0.50

$

1.84

$

1.83

Diluted

$

0.32

$

0.50

$

1.84

$

1.82

Weighted average number of common shares outstanding:

Basic

20,491

20,375

20,461

20,346

Diluted

20,501

20,422

20,491

20,433

Cash dividends declared per common share

$

0.27

$

0.25

$

1.06

$

0.85

PETMED EXPRESS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Year Ended

March 31,

2019

2018

(UNAUDITED)

Cash flows from operating activities:

Net income

$

37,740

$

37,283

Adjustments to reconcile net income to net cash
provided by operating activities:

Depreciation

2,225

2,126

Share based compensation

3,097

2,575

Deferred income taxes

125

(92

)

Bad debt expense

85

112

(Increase) decrease in operating assets
and increase (decrease) in liabilities:

Accounts receivable

(335

)

(596

)

Inventories - finished goods

1,967

(3,109

)

Prepaid income taxes

206

(788

)

Prepaid expenses and other current assets

(526

)

137

Accounts payable

1,001

53

Accrued expenses and other current liabilities

(447

)

337

Income taxes payable

-

(659

)

Net cash provided by operating activities

45,138

37,379

Cash flows from investing activities:

Purchases of property and equipment

(620

)

(703

)

Net cash used in investing activities

(620

)

(703

)

Cash flows from financing activities:

Dividends paid

(21,925

)

(17,470

)

Net cash used in financing activities

(21,925

)

(17,470

)

Net increase in cash and cash equivalents

22,593

19,206

Cash and cash equivalents, at beginning of year

77,936

58,730

Cash and cash equivalents, at end of year

$

100,529

$

77,936

Supplemental disclosure of cash flow information:

Cash paid for income taxes

$

11,051

$

18,046

Dividends payable in accrued expenses

$

203

$

240