20% Increase in 1st Quarter Sales
47% Increase in 1st Quarter Diluted Earnings per Share
29% Increase in 1st Quarter New Order Sales
DELRAY BEACH, Fla., July 20, 2020 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for its first quarter ended June 30, 2020. Net sales for the quarter ended June 30, 2020 were $96.2 million, compared to $80.0 million for the quarter ended June 30, 2019, an increase of 20%. Net income for the quarter ended June 30, 2020 was $7.8 million, or $0.39 diluted per share, compared to net income of $5.3 million, or $0.26 diluted per share, for the same quarter the prior year, an increase to diluted earnings per share of 47%. Reorder sales for the three months ended June 30, 2020 were $80.4 million, compared to $67.7 million for the three months ended June 30, 2019, an increase of 19%. New order sales for the three months ended June 30, 2020 were $15.8 million, compared to $12.2 million for the three months ended June 30, 2019, an increase of 29%. The Company acquired approximately 186,000 new customers in the quarter ended June 30, 2020, compared to 140,000 new customers in the same period the prior year. The average order size for the quarter ended June 30, 2020 was $89, compared to $86 for the quarter ended June 30, 2019.
Menderes Akdag, President and CEO, commented: “During the June quarter demand in the ecommerce channel continued to be strong, with consumers shifting their purchases to online, which positively impacted both our top and bottom line. In addition to sales growth, our operating income margins improved by 210 basis points, which positively impacted our earnings in the quarter. We were more efficient with our advertising in the quarter reducing our customer acquisition cost from $62 in the quarter ended June 30, 2019 to $48 in the current quarter, while increasing advertising expenses by approximately 5%. As an essential business, we have been open during our normal business hours without any material disruptions in our operations. We are dedicated to making every effort to ensure pets get the medications they need in these challenging times. We have also taken extra precautions to ensure the health and safety of our employees. Also, so far, we have not seen any material disruptions in our supply chain, but as a precaution we have temporarily increased our inventory during the quarter. In fiscal 2021, we are focusing on redesigning our website 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 August 7, 2020, to shareholders of record at the close of business on July 31, 2020. 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. Please call in fifteen minutes prior to the scheduled start time. 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 July 20, 2020 until August 3, 2020 at 11:59 P.M. Eastern Time. To access the replay, call (866) 430-5848 (toll free) or (203) 369-0934 and enter passcode 5500.
Founded in 1996, PetMed Express is America’s Largest and 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.petmeds.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 amounts) | |||||
| June 30, | March 31, | ||||
| 2020 | 2020 | ||||
| ASSETS | (UNAUDITED) | ||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 86,821 | $ | 103,762 | |
| Accounts receivable, less allowance for doubtful | |||||
| accounts of $41 and $59, respectively | 2,710 | 3,843 | |||
| Inventories - finished goods | 43,071 | 17,884 | |||
| Prepaid expenses and other current assets | 3,277 | 3,529 | |||
| Total current assets | 135,879 | 129,018 | |||
| Noncurrent assets: | |||||
| Property and equipment, net | 26,016 | 25,445 | |||
| Intangible assets | 860 | 860 | |||
| Total noncurrent assets | 26,876 | 26,305 | |||
| Total assets | $ | 162,755 | $ | 155,323 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | $ | 20,975 | $ | 19,658 | |
| Accrued expenses and other current liabilities | 5,169 | 4,214 | |||
| Income taxes payable | 3,025 | 471 | |||
| Total current liabilities | 29,169 | 24,343 | |||
| Deferred tax liabilities | 715 | 970 | |||
| Total liabilities | 29,884 | 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; | |||||
| 20,166 and 20,166 shares issued and outstanding, respectively | 20 | 20 | |||
| Additional paid-in capital | 4,544 | 3,804 | |||
| Retained earnings | 128,298 | 126,177 | |||
| Total shareholders' equity | 132,871 | 130,010 | |||
| Total liabilities and shareholders' equity | $ | 162,755 | $ | 155,323 | |
| PETMED EXPRESS, INC. AND SUBSIDIARIES | |||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||
| (In thousands, except for per share amounts) (Unaudited) | |||||
| Three Months Ended | |||||
| June 30, | |||||
| 2020 | 2019 | ||||
| Sales | $ | 96,204 | $ | 79,988 | |
| Cost of sales | 69,419 | 58,127 | |||
| Gross profit | 26,785 | 21,861 | |||
| Operating expenses: | |||||
| General and administrative | 7,754 | 6,508 | |||
| Advertising | 9,033 | 8,624 | |||
| Depreciation | 562 | 568 | |||
| Total operating expenses | 17,349 | 15,700 | |||
| Income from operations | 9,436 | 6,161 | |||
| Other income: | |||||
| Interest income, net | 90 | 567 | |||
| Other, net | 255 | 257 | |||
| Total other income | 345 | 824 | |||
| Income before provision for income taxes | 9,781 | 6,985 | |||
| Provision for income taxes | 2,013 | 1,642 | |||
| Net income | $ | 7,768 | $ | 5,343 | |
| Net income per common share: | |||||
| Basic | $ | 0.39 | $ | 0.26 | |
| Diluted | $ | 0.39 | $ | 0.26 | |
| Weighted average number of common shares outstanding: | |||||
| Basic | 19,984 | 20,235 | |||
| Diluted | 20,042 | 20,245 | |||
| Cash dividends declared per common share | $ | 0.28 | $ | 0.27 | |
| PETMED EXPRESS, INC. AND SUBSIDIARIES | ||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
| (In thousands) (Unaudited) | ||||||
| Three Months Ended | ||||||
| June 30, | ||||||
| 2020 | 2019 | |||||
| Cash flows from operating activities: | ||||||
| Net income | $ | 7,768 | $ | 5,343 | ||
| Adjustments to reconcile net income to net cash | ||||||
| provided by operating activities: | ||||||
| Depreciation | 562 | 568 | ||||
| Share based compensation | 740 | 635 | ||||
| Deferred income taxes | (255 | ) | (182 | ) | ||
| Bad debt expense | 33 | 25 | ||||
| (Increase) decrease in operating assets | ||||||
| and increase (decrease) in liabilities: | ||||||
| Accounts receivable | 1,100 | 372 | ||||
| Inventories - finished goods | (25,187 | ) | (8,798 | ) | ||
| Prepaid income taxes | - | 582 | ||||
| Prepaid expenses and other current assets | (737 | ) | (98 | ) | ||
| Accounts payable | 1,317 | (586 | ) | |||
| Accrued expenses and other current liabilities | 903 | 934 | ||||
| Income taxes payable | 2,554 | 1,241 | ||||
| Net cash (used in) provided by operating activities | (11,202 | ) | 36 | |||
| Cash flows from investing activities: | ||||||
| Purchases of property and equipment | (145 | ) | (192 | ) | ||
| Net cash used in investing activities | (145 | ) | (192 | ) | ||
| Cash flows from financing activities: | ||||||
| Repurchase and retirement of common stock | - | (11,496 | ) | |||
| Dividends paid | (5,594 | ) | (5,479 | ) | ||
| Net cash used in financing activities | (5,594 | ) | (16,975 | ) | ||
| Net decrease in cash and cash equivalents | (16,941 | ) | (17,131 | ) | ||
| Cash and cash equivalents, at beginning of year | 103,762 | 100,529 | ||||
| Cash and cash equivalents, at end of year | $ | 86,821 | $ | 83,398 | ||
| Supplemental disclosure of cash flow information: | ||||||
| Dividends payable in accrued expenses | $ | 297 | $ | 243 | ||