Full Press Release Details
PETMED EXPRESS D/B/A 1-800-PETMEDS
ANNOUNCES ITS SECOND QUARTER FINANCIAL RESULTS
Pompano Beach, Florida, October 18, 2010 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended September 30, 2010. Net sales for the quarter ended September 30, 2010 were $61.2 million, compared to $62.4 million for the quarter ended September 30, 2009, a decrease of 1.9%. Net sales for the six months ended September 30, 2010 were $135.6 million, compared to $139.6 million for the quarter ended September 30, 2009, a decrease of 2.9%. Net income was $5.0 million, or $0.22 diluted per share, for the quarter ended September 30, 2010, compared to net income of $6.3 million, or $0.28 diluted per share, for the quarter ended September 30, 2009, a 20% decrease to EPS. Net income was $12.2 million, or $0.54 diluted per share, for the six months ended September 30, 2010, compared to net income of $14.3 million, or $0.63 diluted per share, for the six months ended September 30, 2009, a 15% decrease to EPS. Reorder sales increased by 4.6%, from $45.8 million to $47.9 million for the quarters ended September 30, 2009 and 2010, respectively. Reorder sales for the six months ended September 30, 2010 were $105.5 million, compared to $99.8 million for the six months ended September 30, 2009, an increase of 5.7%.
Menderes Akdag, President and CEO, commented: It has been another challenging quarter due to our having to pay more to advertise, combined with consumers giving greater consideration to price and reducing their usage of the product categories we offer. Our online sales continued to increase, by 4.1% to $43.9 million for the quarter compared to $42.2 million for the prior quarter, with approximately 72% of our orders being generated from our website during the quarter compared to 67% in the prior quarter. During the quarter we bought back approximately 222,000 shares of our own common shares for $3.5 million, and increased our quarterly dividend, from $0.10 per share to $0.125 per share, an increase of 25%. Our focus in fiscal 2011 continues to be 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 quarter s financial results. To access the call, which is open to the public, please 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 10:00 A.M. on October 18, 2010 until November 1, 2010 at 11:59 P.M. To access the replay, call (800) 839-2280 (toll free) or (203) 369-3641, 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, 2010. 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
| September 30, | March 31, | |||
| 2010 | 2010 | |||
| (Unaudited) | ||||
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 60,506 | $ | 53,143 |
| Short term investments - available for sale | 10,097 | - | ||
| Accounts receivable, less allowance for doubtful | ||||
| accounts of $4 and $5, respectively | 1,452 | 2,097 | ||
| Inventories - finished goods | 14,735 | 29,064 | ||
| Prepaid expenses and other current assets | 1,659 | 610 | ||
| Deferred tax assets | 1,279 | 1,255 | ||
| Prepaid income taxes | 1,721 | 330 | ||
| Total current assets | 91,449 | 86,499 | ||
| Long term investments | 12,381 | 12,392 | ||
| Property and equipment, net | 3,909 | 4,429 | ||
| Intangible asset | 850 | 850 | ||
| Total assets | $ | 108,589 | $ | 104,170 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 4,331 | $ | 4,776 |
| Accrued expenses and other current liabilities | 2,363 | 2,312 | ||
| Total current liabilities | 6,694 | 7,088 | ||
| Deferred tax liabilities | 760 | 225 | ||
| Total liabilities: | 7,454 | 7,313 | ||
| 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; | ||||
| 22,850 and 22,990 shares issued and outstanding, respectively | 23 | 23 | ||
| Additional paid-in capital | - | 2,628 | ||
| Retained earnings | 101,180 | 94,305 | ||
| Accumulated other comprehensive loss | (77) | (108) | ||
| Total shareholders' equity | 101,135 | 96,857 | ||
| Total liabilities and shareholders' equity | $ | 108,589 | $ | 104,170 |
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per share amounts) (Unaudited)
| Three Months Ended | Six Months Ended | |||||||
| September 30, | September 30, | |||||||
| 2010 | 2009 | 2010 | 2009 | |||||
| Sales | $ | 61,245 | $ | 62,447 | $ | 135,614 | $ | 139,616 |
| Cost of sales | 38,915 | 38,765 | 86,058 | 86,648 | ||||
| Gross profit | 22,330 | 23,682 | 49,556 | 52,968 | ||||
| Operating expenses: | ||||||||
| General and administrative | 5,713 | 5,777 | 11,921 | 12,270 | ||||
| Advertising | 8,575 | 7,752 | 17,415 | 17,624 | ||||
| Depreciation and amortization | 315 | 323 | 665 | 645 | ||||
| Total operating expenses | 14,603 | 13,852 | 30,001 | 30,539 | ||||
| Income from operations | 7,727 | 9,830 | 19,555 | 22,429 | ||||
| Other income: | ||||||||
| Interest income, net | 101 | 58 | 167 | 119 | ||||
| Other, net | 30 | 1 | 33 | 3 | ||||
| Total other income | 131 | 59 | 200 | 122 | ||||
| Income before provision for income taxes | 7,858 | 9,889 | 19,755 | 22,551 | ||||
| Provision for income taxes | 2,881 | 3,624 | 7,552 | 8,211 | ||||
| Net income | $ | 4,977 | $ | 6,265 | $ | 12,203 | $ | 14,340 |
| Net income per common share: | ||||||||
| Basic | $ | 0.22 | $ | 0.28 | $ | 0.54 | $ | 0.64 |
| Diluted | $ | 0.22 | $ | 0.28 | $ | 0.54 | $ | 0.63 |
| Weighted average number of common shares outstanding: | ||||||||
| Basic | 22,616 | 22,614 | 22,668 | 22,569 | ||||
| Diluted | 22,741 | 22,755 | 22,804 | 22,718 | ||||
| Cash dividends declared per common share | $ | 0.125 | $ | 0.100 | $ | 0.225 | $ | 0.100 |
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
| Six Months Ended | ||||
| September 30, | ||||
| 2010 | 2009 | |||
| Cash flows from operating activities: | ||||
| Net income | $ | 12,203 | $ | 14,340 |
| Adjustments to reconcile net income to net cash | ||||
| provided by operating activities: | ||||
| Depreciation and amortization | 665 | 645 | ||
| Share based compensation | 1,044 | 722 | ||
| Deferred income taxes | 511 | 206 | ||
| Bad debt expense | 20 | 47 | ||
| (Increase) decrease in operating assets | ||||
| and increase (decrease) in liabilities: | ||||
| Accounts receivable | 625 | 87 | ||
| Inventories - finished goods | 14,328 | 10,832 | ||
| Prepaid income taxes | (1,391) | (1,527) | ||
| Prepaid expenses and other current assets | (1,049) | (205) | ||
| Accounts payable | (287) | 849 | ||
| Accrued expenses and other current liabilities | 9 | 109 | ||
| Net cash provided by operating activities | 26,678 | 26,105 | ||
| Cash flows from investing activities: | ||||
| Net change in investments | (10,054) | 2,150 | ||
| Purchases of property and equipment | (303) | (583) | ||
| Net cash (used in) provided by investing activities | (10,357) | 1,567 | ||
| Cash flows from financing activities: | ||||
| Dividends paid | (5,121) | (2,264) | ||
| Purchases of treasury stock | (4,213) | - | ||
| Proceeds from the exercise of stock options | 252 | 476 | ||
| Tax benefit related to stock options exercised | 124 | 178 | ||
| Net cash used in financing activities | (8,958) | (1,610) | ||
| Net increase in cash and cash equivalents | 7,363 | 26,062 | ||
| Cash and cash equivalents, at beginning of period | 53,143 | 30,126 | ||
| Cash and cash equivalents, at end of period | $ | 60,506 | $ | 56,188 |
| Supplemental disclosure of cash flow information: | ||||
| Cash paid for income taxes | $ | 8,308 | $ | 9,355 |
| Property and equipment purchases in accounts payable | $ | 158 | $ | 528 |
| Dividends payable in accrued expenses | $ | 90 | $ | 19 |