Full Press Release Details
PETMED EXPRESS D/B/A 1-800-PETMEDS
ANNOUNCES THIRD QUARTER FINANCIAL RESULTS
New Order Sales Increase 25%
Net Sales Increase 16% to $43.4 Million
Earnings Increase 15% to $0.21 Diluted Per Share
Pompano Beach, Florida, January 20, 2009 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended December 31, 2008. Net sales for this quarter were $43.4 million compared to $37.3 million for the quarter ended December 31, 2007, an increase of 16%. Net sales for the nine months ended December 31, 2008 were $171.3 million compared to $147.9 million for the nine months ended December 31, 2007, also an increase of 16%. Net income was $4.9 million or $0.21 diluted per share for the quarter ended December 31, 2008, compared to net income of $4.4 million or $0.18 diluted per share for the quarter ended December 31, 2007, an increase to earnings per share of 15%. For the nine months ended December 31, 2008, net income was $17.3 million or $0.73 diluted per share compared to net income of $15.1 million or $0.62 diluted per share for the nine months ended December 31, 2007, an increase to earnings per share of 18%.
Menderes Akdag, President and CEO, commented: We are pleased to report that new order sales increased by 25% to $11.2 million for the quarter ended December 31, 2008, compared to $9.0 million for the same quarter the prior year. We acquired approximately 154,000 new customers in the quarter ended December 31, 2008, compared to 127,000 new customers for the same quarter the prior year. We are also pleased to report that our net cash from operations increased by 60% to $15.8 million for the nine months ended December 31, 2008 from $9.9 million for the same period the prior year. Our continuing focus will be on capturing additional market share, and improving reorders and our customer service levels in fiscal 2009. Additionally, the Company repurchased approximately 336,000 shares of its outstanding common stock for approximately $4.6 million during the third quarter of fiscal 2009.
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, dial (888) 455-1758 (toll free) or (210) 234-0009. 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 A.M. on January 20, 2009 until February 3, 2009 at 11:59 P.M. To access the replay, call (866) 507-3618 (toll free) or (203) 369-1892, 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, 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, 2008. 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, 954-979-5995.
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, | March 31, | ||||||
| 2008 | 2008 | ||||||
| (UNAUDITED) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 27,190,543 | $ | 20,267,829 | |||
| Temporary investments | 16,490,000 | 4,780,000 | |||||
| Accounts receivable, less allowance for doubtful | |||||||
| accounts of $42,297 and $32,040, respectively | 2,075,862 | 1,575,263 | |||||
| Inventories - finished goods | 19,654,770 | 17,909,549 | |||||
| Prepaid expenses and other current assets | 661,576 | 691,859 | |||||
| Prepaid income taxes | 4,000,000 | ||||||
| Total current assets | 70,072,751 | 45,224,500 | |||||
| Long term investments | 14,650,000 | 24,740,000 | |||||
| Property and equipment, net | 4,948,932 | 1,903,294 | |||||
| Deferred income taxes | 908,759 | 1,221,853 | |||||
| Intangible assets | 850,000 | 365,000 | |||||
| Total assets | $ | 91,430,442 | $ | 73,454,647 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 6,279,299 | $ | 4,358,774 | |||
| Accrued expenses and other current liabilities | 2,022,664 | 1,876,655 | |||||
| Income taxes payable | 2,686,014 | 185,243 | |||||
| Total liabilities | 10,987,977 | 6,420,672 | |||||
| Commitments and contingencies | |||||||
| Shareholders' equity: | |||||||
| Preferred stock, $.001 par value, 5,000,000 shares authorized; | |||||||
| 2,500 convertible shares issued and outstanding with a | |||||||
| liquidation preference of $4 per share | 8,898 | 8,898 | |||||
| Common stock, $.001 par value, 40,000,000 shares authorized; | |||||||
| 23,476,046 and 23,734,067 shares issued, respectively | 23,476 | 23,734 | |||||
| Additional paid-in capital | 4,443,674 | 8,396,277 | |||||
| Retained earnings | 75,966,417 | 58,639,343 | |||||
| Less treasury stock, at cost; 0 and 3,100 shares, respectively | (34,277 | ) | |||||
| Total shareholders' equity | 80,442,465 | 67,033,975 | |||||
| Total liabilities and shareholders' equity | $ | 91,430,442 | $ | 73,454,647 |
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
| Three Months Ended | Nine Months Ended | ||||||||||||
| December 31, | December 31, | ||||||||||||
| 2008 | 2007 | 2008 | 2007 | ||||||||||
| Sales | $ | 43,405,846 | $ | 37,348,867 | $ | 171,341,670 | $ | 147,913,299 | |||||
| Cost of sales | 26,088,572 | 22,175,847 | 105,375,803 | 90,390,635 | |||||||||
| Gross profit | 17,317,274 | 15,173,020 | 65,965,867 | 57,522,664 | |||||||||
| Operating expenses: | |||||||||||||
| General and administrative | 5,019,183 | 4,542,522 | 16,448,431 | 15,502,308 | |||||||||
| Advertising | 4,899,893 | 4,170,113 | 23,619,602 | 20,725,021 | |||||||||
| Depreciation and amortization | 185,649 | 155,385 | 503,277 | 435,034 | |||||||||
| Total operating expenses | 10,104,725 | 8,868,020 | 40,571,310 | 36,662,363 | |||||||||
| Income from operations | 7,212,549 | 6,305,000 | 25,394,557 | 20,860,301 | |||||||||
| Other income: | |||||||||||||
| Interest income, net | 297,017 | 454,438 | 958,735 | 1,327,691 | |||||||||
| Other, net | (27,616 | ) | 110,416 | 301,835 | 535,346 | ||||||||
| Total other income | 269,401 | 564,854 | 1,260,570 | 1,863,037 | |||||||||
| Income before provision for income taxes | 7,481,950 | 6,869,854 | 26,655,127 | 22,723,338 | |||||||||
| Provision for income taxes | 2,597,182 | 2,459,872 | 9,328,053 | 7,604,546 | |||||||||
| Net income | $ | 4,884,768 | $ | 4,409,982 | $ | 17,327,074 | $ | 15,118,792 | |||||
| Net income per common share: | |||||||||||||
| Basic | $ | 0.21 | $ | 0.18 | $ | 0.74 | $ | 0.63 | |||||
| Diluted | $ | 0.21 | $ | 0.18 | $ | 0.73 | $ | 0.62 | |||||
| Weighted average number of common shares outstanding: | |||||||||||||
| Basic | 23,333,025 | 24,162,552 | 23,446,990 | 24,175,567 | |||||||||
| Diluted | 23,542,120 | 24,386,821 | 23,627,969 | 24,396,653 |
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Nine Months Ended | |||||||
| December 31, | |||||||
| 2008 | 2007 | ||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 17,327,074 | $ | 15,118,792 | |||
| Adjustments to reconcile net income to net cash | |||||||
| provided by operating activities: | |||||||
| Depreciation and amortization | 503,277 | 435,034 | |||||
| Share based compensation | 1,089,889 | 1,237,893 | |||||
| Deferred income taxes | 313,094 | (536,014 | ) | ||||
| Bad debt expense | 48,656 | 16,508 | |||||
| (Increase) decrease in operating assets | |||||||
| and increase (decrease) in liabilities: | |||||||
| Accounts receivable | (549,255 | ) | 564,267 | ||||
| Inventories - finished goods | (1,745,221 | ) | (4,025,946 | ) | |||
| Prepaid income taxes | (4,000,000 | ) | (213,750 | ) | |||
| Prepaid expenses and other current assets | 30,283 | 168,905 | |||||
| Accounts payable | 119,499 | (3,199,167 | ) | ||||
| Income taxes payable | 2,500,771 | (229,321 | ) | ||||
| Accrued expenses and other current liabilities | 146,009 | 525,795 | |||||
| Net cash provided by operating activities | 15,784,076 | 9,862,996 | |||||
| Cash flows from investing activities: | |||||||
| Net change in investments | (1,620,000 | ) | (5,735,000 | ) | |||
| Purchases of property and equipment | (1,747,889 | ) | (352,036 | ) | |||
| Purchase of intangible asset | (485,000 | ) | |||||
| Net cash used in investing activities | (3,852,889 | ) | (6,087,036 | ) | |||
| Cash flows from financing activities: | |||||||
| Purchases of treasury stock | (6,776,696 | ) | (4,868,492 | ) | |||
| Proceeds from the exercise of stock options | 1,535,035 | 2,648,703 | |||||
| Tax benefit related to stock options exercised | 233,188 | 267,631 | |||||
| Net cash used in financing activities | (5,008,473 | ) | (1,952,158 | ) | |||
| Net increase in cash and cash equivalents | 6,922,714 | 1,823,802 | |||||
| Cash and cash equivalents, at beginning of period | 20,267,829 | 316,470 | |||||
| Cash and cash equivalents, at end of period | $ | 27,190,543 | $ | 2,140,272 | |||
| Supplemental disclosure of cash flow information: | |||||||
| Cash paid for income taxes | $ | 10,281,000 | $ | 8,316,000 | |||
| Retirement of treasury stock | $ | 6,810,973 | $ | 4,689,140 | |||
| Property and equipment purchases in accounts payable | $ | 1,801,026 | $ |