Fourth Quarter Net Income Increased 36%
Fourth Quarter EPS $0.50 per share vs $0.37 per share
DELRAY BEACH, Fla., May 07, 2018 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (NASDAQ:PETS) today announced its financial results for the fiscal year ended March 31, 2018. Net sales for the quarter ended March 31, 2018 were $67.3 million, compared to $63.0 million for the quarter ended March 31, 2017, an increase of 6.8%. For the fiscal year ended March 31, 2018 net sales were $273.8 million, compared to $249.2 million for the fiscal year ended March 31, 2017, an increase of 9.9%. The increase in sales for the quarter ended March 31, 2018 can be attributed to a 9.4% increase in reorder sales. Net income for the quarter ended March 31, 2018 was $10.2 million, or $0.50 diluted per share, compared to net income of $7.5 million, or $0.37 diluted per share, for the same quarter the prior year, an increase to net income of 36%. Net income for the fiscal year ended March 31, 2018 was $37.3 million, or $1.82 diluted per share, compared to net income of $23.8 million, or $1.17 diluted per share, for the fiscal year ended March 31, 2017, an increase to net income of 57%. The Company’s online sales for the quarter ended March 31, 2018 were approximately 85% of all sales, compared to 83% for the same quarter the prior year.
Menderes Akdag, President and CEO, commented: “We were pleased with increases in sales during the fiscal year, along with an accelerated increase to net income. Gross profit as a percentage of sales increased to 37.0% for the quarter ended March 31, 2018 compared to 35.1% for the quarter ended March 31, 2017. The increase to gross profit margin can be attributed to a continued product mix shift to higher margin items. In addition, our net income growth was also boosted by the Tax Reform Act of 2017, where we saw a decline in our federal tax rate from 35% to a fiscal year 2018 blended rate of 31.5%. We expect a further reduction to our effective tax rate in fiscal 2019, to approximately 24%. Average order value was $89 for the March quarter compared to $86 for the same quarter the prior year. In fiscal 2019, we will look to build on past successes by focusing on sales growth and further improving our customer service levels.”
The Board of Directors declared a quarterly dividend of $0.25 per share on its common stock. The dividend will be payable on May 25, 2018, to shareholders of record at the close of business on May 18, 2018. 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 7, 2018 until May 21, 2018 at 11:59 P.M. To access the replay, call (866) 423-4837 (toll free) or (203) 369-0849 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, 2017. 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, | |||
| 2018 | 2017 | |||
| ASSETS | (UNAUDITED) | |||
| Current assets: | ||||
| Cash and cash equivalents | $ | 77,936 | $ | 58,730 |
| Accounts receivable, less allowance for doubtful | ||||
| accounts of $35 and $27, respectively | 2,292 | 1,808 | ||
| Inventories - finished goods | 23,337 | 20,228 | ||
| Prepaid expenses and other current assets | 882 | 1,019 | ||
| Prepaid income taxes | 788 | - | ||
| Total current assets | 105,235 | 81,785 | ||
| Noncurrent assets: | ||||
| Property and equipment, net | 28,741 | 30,164 | ||
| Intangible assets | 860 | 860 | ||
| Total noncurrent assets | 29,601 | 31,024 | ||
| Total assets | $ | 134,836 | $ | 112,809 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 15,274 | $ | 15,221 |
| Accrued expenses and other current liabilities | 2,835 | 2,475 | ||
| Income taxes payable | - | 659 | ||
| Total current liabilities | 18,109 | 18,355 | ||
| Deferred tax liabilities | 996 | 1,088 | ||
| Total liabilities | 19,105 | 19,443 | ||
| 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; | ||||
| 20,601 and 20,526 shares issued and outstanding, respectively | 21 | 21 | ||
| Additional paid-in capital | 9,381 | 6,806 | ||
| Retained earnings | 106,320 | 86,530 | ||
| Total shareholders' equity | 115,731 | 93,366 | ||
| Total liabilities and shareholders' equity | $ | 134,836 | $ | 112,809 |
| 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, | |||||||
| 2018 | 2017 | 2018 | 2017 | |||||
| (UNAUDITED) | (UNAUDITED) | |||||||
| Sales | $ | 67,322 | $ | 63,032 | $ | 273,800 | $ | 249,176 |
| Cost of sales | 42,403 | 40,877 | 175,993 | 169,862 | ||||
| Gross profit | 24,919 | 22,155 | 97,807 | 79,314 | ||||
| Operating expenses: | ||||||||
| General and administrative | 6,068 | 5,593 | 24,290 | 22,799 | ||||
| Advertising | 4,311 | 4,351 | 19,255 | 17,663 | ||||
| Depreciation | 536 | 514 | 2,126 | 1,369 | ||||
| Total operating expenses | 10,915 | 10,458 | 45,671 | 41,831 | ||||
| Income from operations | 14,004 | 11,697 | 52,136 | 37,483 | ||||
| Other income: | ||||||||
| Interest income, net | 241 | 45 | 658 | 141 | ||||
| Other, net | 240 | 94 | 995 | 300 | ||||
| Total other income | 481 | 139 | 1,653 | 441 | ||||
| Income before provision for income taxes | 14,485 | 11,836 | 53,789 | 37,924 | ||||
| Provision for income taxes | 4,302 | 4,333 | 16,506 | 14,105 | ||||
| Net income | $ | 10,183 | $ | 7,503 | $ | 37,283 | $ | 23,819 |
| Comprehensive income | $ | 10,183 | $ | 7,503 | $ | 37,283 | $ | 23,819 |
| Net income per common share: | ||||||||
| Basic | $ | 0.50 | $ | 0.37 | $ | 1.83 | $ | 1.18 |
| Diluted | $ | 0.50 | $ | 0.37 | $ | 1.82 | $ | 1.17 |
| Weighted average number of common shares outstanding: | ||||||||
| Basic | 20,375 | 20,260 | 20,346 | 20,232 | ||||
| Diluted | 20,422 | 20,392 | 20,433 | 20,378 | ||||
| Cash dividends declared per common share | $ | 0.25 | $ | 0.19 | $ | 0.85 | $ | 0.76 |
| PETMED EXPRESS, INC. AND SUBSIDIARIES | ||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
| (In thousands) | ||||||
| Year Ended | ||||||
| March 31, | ||||||
| 2018 | 2017 | |||||
| (UNAUDITED) | ||||||
| Cash flows from operating activities: | ||||||
| Net income | $ | 37,283 | $ | 23,819 | ||
| Adjustments to reconcile net income to net cash | ||||||
| provided by operating activities: | ||||||
| Depreciation | 2,126 | 1,369 | ||||
| Share based compensation | 2,575 | 1,935 | ||||
| Deferred income taxes | (92 | ) | 1,951 | |||
| Bad debt expense | 112 | 421 | ||||
| (Increase) decrease in operating assets | ||||||
| and increase (decrease) in liabilities: | ||||||
| Accounts receivable | (596 | ) | (505 | ) | ||
| Inventories - finished goods | (3,109 | ) | 5,358 | |||
| Prepaid income taxes | (788 | ) | 243 | |||
| Prepaid expenses and other current assets | 137 | 1,416 | ||||
| Accounts payable | 53 | 10,217 | ||||
| Accrued expenses and other current liabilities | 337 | 321 | ||||
| Income taxes payable | (659 | ) | 659 | |||
| Net cash provided by operating activities | 37,379 | 47,204 | ||||
| Cash flows from investing activities: | ||||||
| Purchases of property and equipment | (703 | ) | (10,604 | ) | ||
| Net cash used in investing activities | (703 | ) | (10,604 | ) | ||
| Cash flows from financing activities: | ||||||
| Dividends paid | (17,470 | ) | (15,509 | ) | ||
| Net cash used in financing activities | (17,470 | ) | (15,509 | ) | ||
| Net increase in cash and cash equivalents | 19,206 | 21,091 | ||||
| Cash and cash equivalents, at beginning of year | 58,730 | 37,639 | ||||
| Cash and cash equivalents, at end of year | $ | 77,936 | $ | 58,730 | ||
| Supplemental disclosure of cash flow information: | ||||||
| Cash paid for income taxes | $ | 18,046 | $ | 11,373 | ||
| Dividends payable in accrued expenses | $ | 240 | $ | 217 | ||