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


Third Quarter New Order Sales Increased 6.8%
Third Quarter Sales Increased 3.3%

POMPANO BEACH, Fla., Jan. 25, 2016 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (NASDAQ:PETS) today announced its financial results for the quarter ended December 31, 2015.  Net sales for the quarter ended December 31, 2015 were $50.9 million, compared to $49.3 million for the quarter ended December 31, 2014, an increase of 3.3%.  Net sales for the nine months ended December 31, 2015 were $179.3 million, compared to $179.4 million for the nine months ended December 31, 2014.  The increase in sales for the quarter ended December 31, 2015 can be attributed to increased new order sales, which increased 6.8%, and reorders sales, which increased 2.8%.  Net income for the quarter ended December 31, 2015 was $4.9 million, or $0.24 diluted per share, compared to net income of $4.8 million, or $0.24 diluted per share, for the quarter ended December 31, 2014, a 1.9% increase to net income.  Excluding a one-time charge for an IT-related discontinued project in the nine months ended December 31, 2014, net income for the nine months ended December 31, 2015 was $15.1 million, or $0.75 diluted per share, compared to net income of $13.6 million, or $0.67 diluted per share, for the nine months ended December 31, 2014, a 12% 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.  Online sales for the quarter ended December 31, 2015 increased 5.4% to $41.5 million from $39.3 million for the same period the prior year. The Company’s online sales for the quarter ended December 31, 2015 were approximately 81% of all sales, compared to 80% for the same quarter the prior year. 

Menderes Akdag, CEO and President, commented: “Helped in part by the unseasonably warm weather in the December quarter we saw increases in both new order and reorder sales.  Our average order size increased to $78 for the quarter ended December 31, 2015, compared to $76 for the same quarter in the prior year.  We were also encouraged with our advertising efficiency, as our new customer acquisition costs were reduced to $41 for the quarter ended December 31, 2015 compared to $45 for the same quarter in the prior year.  We are pleased to announce that on January 19, 2016 we completed the purchase of property located in Delray Beach, FL.  The property is approximately 14.6 acres consisting of two buildings totaling approximately 185,000 sqft.  We intend to occupy approximately 97,000 sqft for our corporate headquarters and distribution center later this year.”

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 February 19, 2016, to shareholders of record at the close of business on February 8, 2016.  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 25, 2016 until February 8, 2016 at 11:59 P.M.  To access the replay, call (866) 403-7099 (toll free) or (203) 369-0571 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)
     
  December 31, March 31,
   2015   2015 
  (Unaudited)  
ASSETS    
     
Current assets:    
Cash and cash equivalents$   47,129 $   35,613 
Short term investments - available for sale    15,608     15,591 
Accounts receivable, less allowance for doubtful    
accounts of $10 and $8, respectively    1,365     1,931 
Inventories - finished goods    18,861     25,068 
Prepaid expenses and other current assets    2,275     1,380 
Deferred tax assets    848     817 
Prepaid income taxes    334   - 
Total current assets    86,420     80,400 
     
Noncurrent assets:    
Property and equipment, net    1,202     1,569 
Intangible assets    860     860 
Deferred tax assets    101     23 
     
Total assets$   88,583 $   82,852 
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
Current liabilities:    
Accounts payable$   5,365 $   5,153 
Accrued expenses and other current liabilities    2,343     2,214 
Income taxes payable  -     50 
     
Total liabilities    7,708     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;    
20,327 and 20,262 shares issued and outstanding, respectively    20     20 
Additional paid-in capital    4,398     3,117 
Retained earnings    76,535     72,343 
Accumulated other comprehensive loss    (87)    (54)
     
  Total shareholders' equity    80,875     75,435 
     
Total liabilities and shareholders' equity$   88,583 $   82,852 
     


 

 

 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, 
   2015   2014   2015   2014 
         
Sales $    50,933  $    49,284  $    179,292  $    179,401 
Cost of sales    34,179     32,184     120,659     120,070 
         
Gross profit    16,754     17,100     58,633     59,331 
         
Operating expenses:        
General and administrative    4,977     4,946     16,164     16,202 
Advertising    3,988     4,323     18,122     21,134 
Discontinued project costs  -   -   -     1,714 
Depreciation    167     165     544     487 
Total operating expenses    9,132     9,434     34,830     39,537 
         
Income from operations    7,622     7,666     23,803     19,794 
         
Other income:        
Interest income, net    55     50     160     138 
Other, net    (4)    (4)    (12)    3 
Total other income    51     46     148     141 
         
Income before provision for income taxes    7,673     7,712     23,951     19,935 
         
Provision for income taxes    2,783     2,915     8,802     7,433 
         
Net income $    4,890  $    4,797  $    15,149  $    12,502 
         
Net change in unrealized loss on short        
term investments    (14)    (20)    (33)    (13)
         
Comprehensive income $    4,876  $    4,777  $    15,116  $    12,489 
         
Net income per common share:        
Basic $    0.24  $    0.24  $    0.75  $    0.62 
Diluted $    0.24  $    0.24  $    0.75  $    0.62 
         
Weighted average number of common shares outstanding:      
Basic    20,145     20,038     20,115     20,005 
Diluted    20,251     20,162     20,232     20,133 
         
Cash dividends declared per common share $    0.18  $    0.17  $    0.54  $    0.51 
         



 

PETMED EXPRESS, INC. AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
 (In thousands) (Unaudited)  
  
   Nine Months Ended  
   December 31,  
   2015   2014  
Cash flows from operating activities:     
Net income $    15,149  $    12,502  
Adjustments to reconcile net income to net cash     
provided by operating activities:     
Depreciation    544     487  
Share based compensation    1,189     1,118  
Discontinued project costs  -     1,714  
Deferred income taxes    (109)    129  
Bad debt expense    243     66  
(Increase) decrease in operating assets     
and increase (decrease) in liabilities:     
Accounts receivable    323     343  
Inventories - finished goods    6,207     14,114  
Prepaid income taxes    (334)    54  
Prepaid expenses and other current assets    (895)    763  
Accounts payable    212     (1,892) 
Income taxes payable    (50)    283  
Accrued expenses and other current liabilities    156     (153) 
Net cash provided by operating activities    22,635     29,528  
      
Cash flows from investing activities:     
Net change in investments    (50)    (53) 
Purchases of property and equipment    (177)    (398) 
Net cash used in investing activities    (227)    (451) 
      
Cash flows from financing activities:     
Dividends paid    (10,984)    (10,353) 
Tax adjustment related to restricted stock    92     39  
Net cash used in financing activities    (10,892)    (10,314) 
      
Net increase in cash and cash equivalents    11,516     18,763  
Cash and cash equivalents, at beginning of period    35,613     18,305  
      
Cash and cash equivalents, at end of period $    47,129  $    37,068  
      
Supplemental disclosure of cash flow information:     
      
Cash paid for income taxes $    9,203  $    6,929  
      
Dividends payable in accrued expenses $    185  $    225  
      



            

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