Full Press Release Details
PETMED EXPRESS, INC. D/B/A 1-800-PETMEDS
ANNOUNCES RECORD FINANCIAL RESULTS FOR FISCAL 2010
Fiscal 2010 Earnings Increase 17% to $1.14 Diluted Per Share
Fiscal 2010 Net Sales Increase 9% to $238.3 Million
Pompano Beach, Florida, May 10, 2010 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the fiscal year ended March 31, 2010. Net income was $26.0 million, or $1.14 diluted per share, for the year ended March 31, 2010, compared to net income of $23.0 million, or $0.98 diluted per share, for the year ended March 31, 2009, an increase to earnings per share of 17%. Net sales for the year ended March 31, 2010 were $238.3 million, compared to $219.4 million for the year ended March 31, 2009, an increase of 9%. Net income for the quarter ended March 31, 2010 was $6.1 million, or $0.27 diluted per share, compared to net income of $5.6 million, or $0.25 diluted per share, for the same quarter the prior year, an increase to earnings per share of 9%. For the quarter ended March 31, 2010, net sales were $50.3 million, compared to $48.1 million for the quarter ended March 31, 2009, an increase of 5%. Reorder sales for the year ended March 31, 2010 were $177.8 million, compared to $156.9 million for the year ended March 31, 2009, an increase of 13%. Reorder sales for the quarter ended March 31, 2010 were $40.4 million, compared to $37.2 million for the quarter ended March 31, 2009, an increase of 9%. The Company acquired approximately 815,000 new customers during fiscal 2010 compared to 802,000 during fiscal 2009.
Mendo Akdag, CEO and President, commented: We are pleased with our financial performance for the year, which was highlighted by the growth of our internet sales and net income. The results can be attributed to our reorder growth and our success in leveraging our operating expenses. Our internet sales increased by 14% to $162.8 million for the year, compared to $143.3 million for the prior year, with approximately 68% of our orders being generated from our website during the year, compared to 65% in the prior year. For the fiscal year, the Company leveraged its operating expenses as a percent of sales by 176 basis points as compared to the same period in the prior year. In August 2009, the Company announced its first ever quarterly dividend, and has paid approximately $6.8 million in the last three quarters, illustrating our commitment to returning capital to our shareholders. Our focus in fiscal 2011 is conversion optimization, and the expansion of our product offerings into pet supplies.
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 (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 May 10, 2010 until May 24, 2010 at 11:59 P.M. To access the replay, call (866) 517-3736 (toll free) or (203) 369-2047 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, 2009. 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
CONSOLIDATED BALANCE SHEETS
| March 31, | March 31, | ||||
| 2010 | 2009 | ||||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 53,143,450 | 30,126,041 | ||
| Accounts receivable, less allowance for doubtful | |||||
| accounts of $5,236 and $58,525, respectively | 2,097,057 | 2,881,085 | |||
| Inventories - finished goods | 29,063,640 | 26,778,096 | |||
| Prepaid expenses and other current assets | 610,067 | 753,602 | |||
| Deferred tax assets | 1,255,282 | 724,561 | |||
| Prepaid income taxes | 329,388 | 361,743 | |||
| Total current assets | 86,498,884 | 61,625,128 | |||
| Long term investments | 12,392,125 | 14,430,250 | |||
| Property and equipment, net | 4,428,849 | 5,057,561 | |||
| Intangible asset | 850,000 | 850,000 | |||
| Total assets | $ | 104,169,858 | 81,962,939 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | $ | 4,775,665 | 4,817,097 | ||
| Accrued expenses and other current liabilities | 2,311,589 | 2,177,838 | |||
| Total current liabilities | 7,087,254 | 6,994,935 | |||
| Deferred tax liabilities | 225,391 | - | |||
| Total liabilities: | 7,312,645 | 6,994,935 | |||
| 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; | |||||
| 22,989,618 and 22,686,836 shares issued and outstanding, respectively | 22,990 | 22,687 | |||
| Additional paid-in capital | 2,627,807 | - | |||
| Retained earnings | 94,305,393 | 75,156,169 | |||
| Accumulated other comprehensive loss | (107,875 | ) | (219,750 | ) | |
| Total shareholders' equity | 96,857,213 | 74,968,004 | |||
| Total liabilities and shareholders' equity | $ | 104,169,858 | 81,962,939 |
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
| Three Months Ended March 31, | Year Ended March 31, | |||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||
| (UNAUDITED) | ||||||||||||
| Sales | $ | 50,296,567 | $ | 48,070,577 | $ | 238,265,933 | $ | 219,412,247 | ||||
| Cost of sales | 30,232,304 | 28,708,877 | 146,405,294 | 134,084,680 | ||||||||
| Gross profit | 20,064,263 | 19,361,700 | 91,860,639 | 85,327,567 | ||||||||
| Operating expenses: | ||||||||||||
| General and administrative | 5,141,680 | 5,156,223 | 22,341,123 | 21,604,654 | ||||||||
| Advertising | 4,855,755 | 5,087,784 | 27,656,350 | 28,707,386 | ||||||||
| Depreciation and amortization | 339,707 | 311,265 | 1,321,354 | 814,542 | ||||||||
| Total operating expenses | 10,337,142 | 10,555,272 | 51,318,827 | 51,126,582 | ||||||||
| Income from operations | 9,727,121 | 8,806,428 | 40,541,812 | 34,200,985 | ||||||||
| Other income: | ||||||||||||
| Interest income, net | 32,013 | 97,342 | 196,691 | 1,056,077 | ||||||||
| Other, net | 327 | 106,314 | 4,156 | 408,149 | ||||||||
| Loss on disposal of property and equipment | - | (8,565 | ) | - | (8,565 | ) | ||||||
| Total other income | 32,340 | 195,091 | 200,847 | 1,455,661 | ||||||||
| Income before provision for income taxes | 9,759,461 | 9,001,519 | 40,742,659 | 35,656,646 | ||||||||
| Provision for income taxes | 3,686,925 | 3,352,182 | 14,740,192 | 12,680,235 | ||||||||
| Net income | 6,072,536 | 5,649,337 | 26,002,467 | 22,976,411 | ||||||||
| Net income per common share: | ||||||||||||
| Basic | $ | 0.27 | $ | 0.25 | $ | 1.15 | $ | 0.99 | ||||
| Diluted | $ | 0.27 | $ | 0.25 | $ | 1.14 | $ | 0.98 | ||||
| Weighted average number of common shares outstanding: | ||||||||||||
| Basic | 22,679,672 | 22,874,087 | 22,616,785 | 23,305,726 | ||||||||
| Diluted | 22,759,144 | 23,006,722 | 22,746,433 | 23,482,177 | ||||||||
| Cash dividends declared per common share | 0.10 | - | 0.30 | - |
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended March 31, | |||||||||
| 2010 | 2009 | 2008 | |||||||
| Cash flows from operating activities: | |||||||||
| Net income | $ | 26,002,467 | $ | 22,976,411 | $ | 20,022,231 | |||
| Adjustments to reconcile net income to net cash | |||||||||
| provided by operating activities: | |||||||||
| Depreciation and amortization | 1,321,354 | 814,542 | 589,990 | ||||||
| Share based compensation | 1,594,082 | 1,464,225 | 1,679,600 | ||||||
| Deferred income taxes | (305,330 | ) | 497,292 | (327,313 | ) | ||||
| Loss on disposal of property and equipment | - | 8,565 | - | ||||||
| Bad debt expense | 17,545 | 73,981 | 40,823 | ||||||
| (Increase) decrease in operating assets | |||||||||
| and increase (decrease) in liabilities: | |||||||||
| Accounts receivable | 766,483 | (1,379,803 | ) | (246,565 | ) | ||||
| Inventories - finished goods | (2,285,544 | ) | (8,868,547 | ) | (1,823,342 | ) | |||
| Prepaid income taxes | 32,355 | (361,743 | ) | - | |||||
| Prepaid expenses and other current assets | 143,535 | (61,743 | ) | 379,312 | |||||
| Accounts payable | 312,775 | (313,436 | ) | (1,500,982 | ) | ||||
| Income taxes payable | - | (185,243 | ) | (44,078 | ) | ||||
| Accrued expenses and other current liabilities | 85,843 | 301,183 | 610,818 | ||||||
| Net cash provided by operating activities | 27,685,565 | 14,965,684 | 19,380,494 | ||||||
| Cash flows from investing activities: | |||||||||
| Net change in investments | 2,150,000 | 14,870,000 | 9,605,000 | ||||||
| Purchases of property and equipment | (1,046,849 | ) | (3,207,615 | ) | (502,706 | ) | |||
| Purchase of intangible asset | - | (485,000 | ) | - | |||||
| Net proceeds from the sale of property and equipment | - | 2,000 | - | ||||||
| Net cash provided by investing activities | 1,103,151 | 11,179,385 | 9,102,294 | ||||||
| Cash flows from financing activities: | |||||||||
| Dividends paid | (6,805,335 | ) | - | - | |||||
| Purchases of treasury stock | - | (18,447,539 | ) | (11,600,721 | ) | ||||
| Proceeds from the exercise of stock options | 734,746 | 1,892,847 | 2,784,987 | ||||||
| Tax benefit related to stock options exercised | 299,282 | 267,835 | 284,305 | ||||||
| Net cash used in financing activities | (5,771,307 | ) | (16,286,857 | ) | (8,531,429 | ) | |||
| Net increase in cash and cash equivalents | 23,017,409 | 9,858,212 | 19,951,359 | ||||||
| Cash and cash equivalents, at beginning of the year | 30,126,041 | 20,267,829 | 316,470 | ||||||
| Cash and cash equivalents, at end of the year | $ | 53,143,450 | $ | 30,126,041 | $ | 20,267,829 | |||
| Supplemental disclosure of cash flow information: | |||||||||
| Cash paid for income taxes | $ | 14,719,000 | $ | 16,462,095 | $ | 10,331,000 | |||
| Retirement of treasury stock | $ | - | $ | 18,481,816 | $ | 11,566,444 | |||
| Property and equipment purchases in accounts payable | $ | 417,552 | $ | 771,759 | $ | - | |||
| Dividends payable in accrued expenses | $ | 47,908 | $ | - | $ | - |