Full Press Release Details
PETMED EXPRESS D/B/A 1-800-PETMEDS ANNOUNCES ITS FINANCIAL RESULTS FOR FISCAL 2011
Pompano Beach, Florida, May 9, 2011 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the fiscal year ended March 31, 2011. Net sales for the year ended March 31, 2011 were $231.6 million, compared to $238.3 million for the year ended March 31, 2010, a decrease of 2.8%. For the quarter ended March 31, 2011, net sales were $50.9 million, compared to $50.3 million for the quarter ended March 31, 2010, an increase of 1.2%. Net income was $20.9 million, or $0.92 diluted per share, for the year ended March 31, 2011, compared to net income of $26.0 million, or $1.14 diluted per share, for the year ended March 31, 2010, a decrease to earnings per share of 19%. Net income for the quarter ended March 31, 2011 was $4.1 million, or $0.19 diluted per share, compared to net income of $6.1 million, or $0.27 diluted per share, for the same quarter the prior year, a decrease to earnings per share of 30%. Reorder sales for the year ended March 31, 2011 were $184.3 million, compared to $177.8 million for the year ended March 31, 2010, an increase of 3.7%. Reorder sales for the quarter ended March 31, 2011 were $41.5 million, compared to $40.4 million for the quarter ended March 31, 2010, an increase of 2.7%. The Company acquired approximately 645,000 new customers during fiscal 2011 compared to 815,000 during fiscal 2010, and for the quarter ended March 31, 2011, the Company acquired approximately 130,000 customers compared to 134,000 for the quarter ended March 31, 2010.
Menderes Akdag, President and CEO, commented: It has been a challenging year, which can be attributed to increased customer acquisition costs and decreased new order sales due to increased competition, along with consumers giving greater consideration to price and a softer demand for some of the product categories we offer. To address the decline in sales we implemented a more aggressive pricing strategy combined with increased advertising, while continuing to expand our product offerings into pet supplies. Our cash flows from operations increased to $30.1 million for the year ended March 31, 2011 from $27.7 million for the prior fiscal year. During the quarter we bought back approximately 465,000 shares of our common stock for $7.0 million, and for the fiscal year we bought back approximately 791,000 shares of our common stock for $12.2 million. During the fiscal year, we increased our quarterly dividends to $0.125 per share, an increase of 25% from the prior year.
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 09, 2011 until May 23, 2011 at 11:59 P.M. To access the replay, call (866) 459-3511 (toll free) or (203) 369-1325 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
CONSOLIDATED BALANCE SHEETS
| March 31, | March 31, | |||
| 2011 | 2010 | |||
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 49,660 | $ | 53,143 |
| Short term investments - available for sale | 10,116 | - | ||
| Accounts receivable, less allowance for doubtful | ||||
| accounts of $6 and $5, respectively | 1,985 | 2,097 | ||
| Inventories - finished goods | 25,140 | 29,064 | ||
| Prepaid expenses and other current assets | 1,036 | 610 | ||
| Deferred tax assets | 1,003 | 1,255 | ||
| Prepaid income taxes | 664 | 330 | ||
| Total current assets | 89,604 | 86,499 | ||
| Long term investments | 12,390 | 12,392 | ||
| Property and equipment, net | 3,433 | 4,429 | ||
| Intangible asset | 860 | 850 | ||
| Total assets | $ | 106,287 | $ | 104,170 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 6,452 | $ | 4,776 |
| Accrued expenses and other current liabilities | 2,509 | 2,312 | ||
| Total current liabilities | 8,961 | 7,088 | ||
| Deferred tax liabilities | 321 | 225 | ||
| Total liabilities: | 9,282 | 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; | ||||
| 22,331 and 22,990 shares issued and outstanding, respectively | 22 | 23 | ||
| Additional paid-in capital | - | 2,628 | ||
| Retained earnings | 97,115 | 94,305 | ||
| Accumulated other comprehensive loss | (141) | (108) | ||
| Total shareholders' equity | 97,005 | 96,857 | ||
| Total liabilities and shareholders' equity | $ | 106,287 | $ | 104,170 |
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per share amount)
| Three Months Ended | Year Ended | |||||||
| March 31, | March 31, | |||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| (UNAUDITED) | ||||||||
| Sales | $ | 50,910 | $ | 50,296 | $ | 231,642 | $ | 238,266 |
| Cost of sales | 33,435 | 30,231 | 147,686 | 146,405 | ||||
| Gross profit | 17,475 | 20,065 | 83,956 | 91,861 | ||||
| Operating expenses: | ||||||||
| General and administrative | 5,183 | 5,143 | 22,200 | 22,341 | ||||
| Advertising | 5,497 | 4,856 | 27,357 | 27,657 | ||||
| Depreciation and amortization | 352 | 339 | 1,375 | 1,321 | ||||
| Total operating expenses | 11,032 | 10,338 | 50,932 | 51,319 | ||||
| Income from operations | 6,443 | 9,727 | 33,024 | 40,542 | ||||
| Other income (expense): | ||||||||
| Interest income, net | 116 | 32 | 381 | 196 | ||||
| Other, net | (17) | - | (128) | 4 | ||||
| Loss on disposal of property and equipment | - | - | - | - | ||||
| Total other income (expense) | 99 | 32 | 253 | 200 | ||||
| Income before provision for income taxes | 6,542 | 9,759 | 33,277 | 40,742 | ||||
| Provision for income taxes | 2,395 | 3,687 | 12,406 | 14,740 | ||||
| Net income | $ | 4,147 | $ | 6,072 | 20,871 | $ | 26,002 | |
| Net income per common share: | ||||||||
| Basic | $ | 0.19 | $ | 0.27 | $ | 0.93 | $ | 1.15 |
| Diluted | $ | 0.19 | $ | 0.27 | $ | 0.92 | $ | 1.14 |
| Weighted average number of common shares outstanding: | ||||||||
| Basic | 22,208 | 22,680 | 22,514 | 22,617 | ||||
| Diluted | 22,309 | 22,759 | 22,643 | 22,746 | ||||
| Cash dividends declared per common share | $ | 0.125 | $ | 0.100 | 0.475 | $ | 0.300 |
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended March 31, | ||||||
| 2011 | 2010 | 2009 | ||||
| Cash flows from operating activities: | ||||||
| Net income | $ | 20,871 | $ | 26,002 | $ | 22,976 |
| Adjustments to reconcile net income to net cash | ||||||
| provided by operating activities: | ||||||
| Depreciation and amortization | 1,375 | 1,321 | 815 | |||
| Share based compensation | 2,171 | 1,594 | 1,464 | |||
| Deferred income taxes | 348 | (305) | 497 | |||
| Loss on disposal of property and equipment | - | - | 9 | |||
| Bad debt expense | 48 | 18 | 74 | |||
| (Increase) decrease in operating assets | ||||||
| and increase (decrease) in liabilities: | ||||||
| Accounts receivable | 64 | 766 | (1,380) | |||
| Inventories - finished goods | 3,924 | (2,286) | (8,868) | |||
| Prepaid income taxes | (335) | 32 | (362) | |||
| Prepaid expenses and other current assets | (426) | 144 | (62) | |||
| Accounts payable | 1,964 | 313 | (313) | |||
| Income taxes payable | - | - | (185) | |||
| Accrued expenses and other current liabilities | 102 | 86 | 301 | |||
| Net cash provided by operating activities | 30,106 | 27,685 | 14,966 | |||
| Cash flows from investing activities: | ||||||
| Net change in investments | (10,146) | 2,150 | 14,870 | |||
| Purchases of property and equipment | (667) | (1,047) | (3,208) | |||
| Purchases of intangible asset | (10) | - | (485) | |||
| Net proceeds from the sale of property and equipment | - | - | 2 | |||
| Net cash (used in) provided by investing activities | (10,823) | 1,103 | 11,179 | |||
| Cash flows from financing activities: | ||||||
| Dividends paid | (10,727) | (6,805) | - | |||
| Purchases of treasury stock | (12,247) | - | (18,448) | |||
| Proceeds from the exercise of stock options | 340 | 735 | 1,893 | |||
| Tax benefit related to stock options exercised | - | 299 | 268 | |||
| Tax adjustment related to stock compensation | (132) | - | - | |||
| Net cash used in financing activities | (22,766) | (5,771) | (16,287) | |||
| Net increase (decrease) in cash and cash equivalents | (3,483) | 23,017 | 9,858 | |||
| Cash and cash equivalents, at beginning of year | 53,143 | 30,126 | 20,268 | |||
| Cash and cash equivalents, at end of year | $ | 49,660 | $ | 53,143 | $ | 30,126 |
| Supplemental disclosure of cash flow information: | ||||||
| Cash paid for income taxes | $ | 12,578 | $ | 14,719 | $ | 16,462 |