Full Press Release Details
PETMED EXPRESS D/B/A 1-800-PETMEDS ANNOUNCES ITS SECOND FISCAL QUARTER FINANCIAL RESULTS
Pompano Beach, Florida, October 24, 2011 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended September 30, 2011. Net sales for the quarter ended September 30, 2011 were $58.2 million, compared to $61.2 million for the quarter ended September 30, 2010, a decrease of 4.9%. Net sales for the six months ended September 30, 2011 were $131.8 million, compared to $135.6 million for the six months ended September 30, 2010, a decrease of 2.8%. Net income was $3.9 million, or $0.19 diluted per share, for the quarter ended September 30, 2011, compared to net income of $5.0 million, or $0.22 diluted per share, for the quarter ended September 30, 2010, a 13% decrease to EPS. Net income was $8.8 million, or $0.41 diluted per share, for the six months ended September 30, 2011, compared to net income of $12.2 million, or $0.54 diluted per share, for the six months ended September 30, 2010, a 23% decrease to EPS. The Company acquired approximately 184,000 new customers for the quarter ended September 30, 2011, compared to 185,000 new customers for the quarter ended September 30, 2010, and for the six months ended September 30, 2011 the company acquired approximately 410,000 new customers, compared to 404,000 new customers for the same period in the prior year.
Menderes Akdag, CEO and President, commented: Our results for the quarter have been impacted by our more aggressive flea & tick product pricing, which reduced our average order size, and our results were further impacted by the introduction of generic Frontline to the market. Due to pending patent litigation unrelated to the Company, against one of the generic Frontline products, we chose not to actively participate in the generic flea and tick market, which negatively impacted our sales. We intend to fully participate in the generic flea and tick market in 2012, which should improve our future results. Mr. Akdag continued, Our new order transactions remained relatively flat despite reduced advertising expenses in the quarter. Additionally, about 74% of our orders were generated from our website during the quarter compared to 72% for the same quarter in the prior year. During the quarter we bought back approximately 894,000 shares of our common stock for $9.1 million, an average price of $10.14 per share.
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. Eastern Time on October 24, 2011 until November 7, 2011 at 9:59 P.M. Eastern Time. To access the replay, call (866) 513-9295 (toll free) or (203) 369-1990, 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 and cats 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, 2011. 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 | ||||
| (In thousands) | ||||
| September 30, | March 31, | |||
| 2011 | 2011 | |||
| (UNAUDITED) | ||||
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 47,138 | $ | 49,660 |
| Short term investments - available for sale | 10,266 | 10,116 | ||
| Accounts receivable, less allowance for doubtful | ||||
| accounts of $4 and $6, respectively | 1,433 | 1,985 | ||
| Inventories - finished goods | 19,114 | 25,140 | ||
| Prepaid expenses and other current assets | 1,959 | 1,036 | ||
| Deferred tax assets | 914 | 1,003 | ||
| Prepaid income taxes | 690 | 664 | ||
| Total current assets | 81,514 | 89,604 | ||
| Long term investments | 2,689 | 12,390 | ||
| Property and equipment, net | 2,910 | 3,433 | ||
| Intangible asset | 860 | 860 | ||
| Total assets | $ | 87,973 | $ | 106,287 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 6,409 | $ | 6,452 |
| Accrued expenses and other current liabilities | 2,286 | 2,509 | ||
| Total current liabilities | 8,695 | 8,961 | ||
| Deferred tax liabilities | 346 | 321 | ||
| Total liabilities | 9,041 | 9,282 | ||
| 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; | ||||
| 20,556 and 22,331 shares issued and outstanding, respectively | 21 | 22 | ||
| Retained earnings | 79,825 | 97,115 | ||
| Less: treasury stock, at cost; 100 and 0 shares, respectively | (924) | - | ||
| Accumulated other comprehensive gain (loss) | 1 | (141) | ||
| Total shareholders' equity | 78,932 | 97,005 | ||
| Total liabilities and shareholders' equity | $ | 87,973 | $ | 106,287 |
| 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, | |||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| Sales | $ | 58,225 | $ | 61,245 | $ | 131,803 | $ | 135,614 |
| Cost of sales | 38,291 | 38,915 | 87,759 | 86,058 | ||||
| Gross profit | 19,934 | 22,330 | 44,044 | 49,556 | ||||
| Operating expenses: | ||||||||
| General and administrative | 5,604 | 5,713 | 11,708 | 11,921 | ||||
| Advertising | 7,904 | 8,575 | 18,004 | 17,415 | ||||
| Depreciation | 346 | 315 | 687 | 665 | ||||
| Total operating expenses | 13,854 | 14,603 | 30,399 | 30,001 | ||||
| Income from operations | 6,080 | 7,727 | 13,645 | 19,555 | ||||
| Other income: | ||||||||
| Interest income, net | 72 | 101 | 158 | 167 | ||||
| Other, net | 64 | 30 | 63 | 33 | ||||
| Total other income | 136 | 131 | 221 | 200 | ||||
| Income before provision for income taxes | 6,216 | 7,858 | 13,866 | 19,755 | ||||
| Provision for income taxes | 2,286 | 2,881 | 5,099 | 7,552 | ||||
| Net income | $ | 3,930 | $ | 4,977 | $ | 8,767 | $ | 12,203 |
| Net income per common share: | ||||||||
| Basic | $ | 0.19 | $ | 0.22 | $ | 0.41 | $ | 0.54 |
| Diluted | $ | 0.19 | $ | 0.22 | $ | 0.41 | $ | 0.54 |
| Weighted average number of common shares outstanding: | ||||||||
| Basic | 20,642 | 22,616 | 21,142 | 22,668 | ||||
| Diluted | 20,710 | 22,741 | 21,238 | 22,804 | ||||
| Cash dividends declared per common share | $ | 0.125 | $ | 0.125 | $ | 0.250 | $ | 0.225 |
| PETMED EXPRESS, INC. AND SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
| (In thousands) (Unaudited) | ||||
| Six Months Ended | ||||
| September 30, | ||||
| 2011 | 2010 | |||
| Cash flows from operating activities: | ||||
| Net income | $ | 8,767 | $ | 12,203 |
| Adjustments to reconcile net income to net cash | ||||
| provided by operating activities: | ||||
| Depreciation | 687 | 665 | ||
| Share based compensation | 1,127 | 1,044 | ||
| Deferred income taxes | 114 | 511 | ||
| Bad debt expense | 25 | 20 | ||
| (Increase) decrease in operating assets | ||||
| and increase (decrease) in liabilities: | ||||
| Accounts receivable | 527 | 625 | ||
| Inventories - finished goods | 6,026 | 14,328 | ||
| Prepaid income taxes | (26) | (1,391) | ||
| Prepaid expenses and other current assets | (923) | (1,049) | ||
| Accounts payable | 86 | (287) | ||
| Accrued expenses and other current liabilities | (215) | 9 | ||
| Net cash provided by operating activities | 16,195 | 26,678 | ||
| Cash flows from investing activities: | ||||
| Net change in investments | 9,693 | (10,054) | ||
| Purchases of property and equipment | (293) | (303) | ||
| Net cash provided by (used in) investing activities | 9,400 | (10,357) | ||
| Cash flows from financing activities: | ||||
| Dividends paid | (5,404) | (5,121) | ||
| Purchases of treasury stock | (22,642) | (4,213) | ||
| Tax adjustment related to restricted stock | (71) | - | ||
| Proceeds from the exercise of stock options | - | 252 | ||
| Tax benefit related to stock options exercised | - | 124 | ||
| Net cash used in financing activities | (28,117) | (8,958) | ||
| Net (decrease) increase in cash and cash equivalents | (2,522) | 7,363 | ||
| Cash and cash equivalents, at beginning of period | 49,660 | 53,143 | ||
| Cash and cash equivalents, at end of period | $ | 47,138 | $ | 60,506 |
| Supplemental disclosure of cash flow information: | ||||
| Cash paid for income taxes | $ | 5,083 | $ | 8,308 |
| Property and equipment purchases in accounts payable | $ | - | $ | 259 |
| Dividends payable in accrued expenses | $ | 135 | $ | 90 |