Full Press Release Details
PETMED EXPRESS D/B/A 1-800-PETMEDS ANNOUNCES ITS THIRD QUARTER FINANCIAL RESULTS
Net Sales Increased 12% to $50.5 Million
New Order Sales Increased 29% to $10.1 Million
Online Sales Increased 19% to $38.7 Million
Pompano Beach, Florida, January 23, 2012 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended December 31, 2011. Net sales for the quarter ended December 31, 2011 were $50.5 million, compared to $45.1 million for the quarter ended December 31, 2010, an increase of 12%. Net sales for the nine months ended December 31, 2011 were $182.3 million, compared to $180.7 million for the nine months ended December 31, 2010, an increase of 1%. Net income was $3.9 million or $0.19 diluted per share for the quarter ended December 31, 2011, compared to net income of $4.5 million or $0.20 diluted per share for the quarter ended December 31, 2010, a 3% decrease to EPS. For the nine months ended December 31, 2011, net income was $12.7 million or $0.61 diluted per share, compared to net income of $16.7 million or $0.74 diluted per share for the nine months ended December 31, 2010, a decrease to earnings per share of 17%. New order sales increased by 29%, from $7.8 million to $10.1 million for the quarters ended December 31, 2010 and 2011, respectively. New order sales for the nine months ended December 31, 2011 were $39.8 million, compared to $37.9 million for the nine months ended December 31, 2010, an increase of 5%.
Menderes Akdag, President and CEO, commented: We are pleased to report that we acquired 150,000 new customers in the quarter ended December 31, 2011, compared to 111,000 new customers acquired for the same period in the prior year, a 35% increase. Our advertising cost to acquire a new customer decreased by 11% to $36 for the quarter ended December 31, 2011, compared to $40 for the same period in the prior year. We are also pleased to report that our online sales increased by 19% to $38.7 million for the quarter, compared to $32.4 million for the same quarter the prior year, with approximately 77% of our orders being generated from our website during the quarter, compared to 72% in the same quarter in the prior year. Our reorder sales increased by 8% to $40.5 million for the quarter compared to $37.3 million for the same quarter the prior year. During the quarter, the Company leveraged its operating expenses as a percent of sales, by 92 basis points as compared to the same quarter in the prior year. Going forward, we will continue to advertise aggressively while expanding our product offerings, which include generic pet medications.
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 January 23, 2012 until February 6, 2012 at 10:59 P.M. Eastern Time. To access the replay, call (888) 562-3875 (toll free) or (203) 369-3173, 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
| December 31, | March 31, | |||
| 2011 | 2011 | |||
| (Unaudited) | ||||
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 41,965 | $ | 49,660 |
| Short term investments - available for sale | 10,300 | 10,116 | ||
| Accounts receivable, less allowance for doubtful | ||||
| accounts of $5 and $6, respectively | 1,639 | 1,985 | ||
| Inventories - finished goods | 25,946 | 25,140 | ||
| Prepaid expenses and other current assets | 2,013 | 1,036 | ||
| Deferred tax assets | 1,216 | 1,003 | ||
| Prepaid income taxes | 102 | 664 | ||
| Total current assets | 83,181 | 89,604 | ||
| Long term investments | 1,480 | 12,390 | ||
| Property and equipment, net | 2,882 | 3,433 | ||
| Intangible asset | 860 | 860 | ||
| Total assets | $ | 88,403 | $ | 106,287 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 6,141 | $ | 6,452 |
| Accrued expenses and other current liabilities | 2,090 | 2,509 | ||
| Total current liabilities | 8,231 | 8,961 | ||
| Deferred tax liabilities | 359 | 321 | ||
| Total liabilities | 8,590 | 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; | ||||
| 20,338 and 22,331 shares issued and outstanding, respectively | 20 | 22 | ||
| Retained earnings | 79,774 | 97,115 | ||
| Accumulated other comprehensive gain (loss) | 10 | (141) | ||
| Total shareholders' equity | 79,813 | 97,005 | ||
| Total liabilities and shareholders' equity | $ | 88,403 | $ | 106,287 |
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per share amounts) (Unaudited)
| Three Months Ended | Nine Months Ended | |||||||
| December 31, | December 31, | |||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| Sales | $ | 50,523 | $ | 45,118 | $ | 182,326 | $ | 180,732 |
| Cost of sales | 33,369 | 28,193 | 121,128 | 114,251 | ||||
| Gross profit | 17,154 | 16,925 | 61,198 | 66,481 | ||||
| Operating expenses: | ||||||||
| General and administrative | 5,244 | 5,096 | 16,952 | 17,017 | ||||
| Advertising | 5,449 | 4,444 | 23,453 | 21,859 | ||||
| Depreciation | 359 | 358 | 1,046 | 1,023 | ||||
| Total operating expenses | 11,052 | 9,898 | 41,451 | 39,899 | ||||
| Income from operations | 6,102 | 7,027 | 19,747 | 26,582 | ||||
| Other income (expense): | ||||||||
| Interest income, net | 70 | 98 | 228 | 265 | ||||
| Other, net | (1) | (144) | 62 | (111) | ||||
| Total other income (expense) | 69 | (46) | 290 | 154 | ||||
| Income before provision for income taxes | 6,171 | 6,981 | 20,037 | 26,736 | ||||
| Provision for income taxes | 2,273 | 2,459 | 7,372 | 10,011 | ||||
| Net income | $ | 3,898 | $ | 4,522 | $ | 12,665 | $ | 16,725 |
| Net income per common share: | ||||||||
| Basic | $ | 0.19 | $ | 0.20 | $ | 0.61 | $ | 0.74 |
| Diluted | $ | 0.19 | $ | 0.20 | $ | 0.61 | $ | 0.74 |
| Weighted average number of common shares outstanding: | ||||||||
| Basic | 20,082 | 22,506 | 20,788 | 22,614 | ||||
| Diluted | 20,180 | 22,655 | 20,886 | 22,755 | ||||
| Cash dividends declared per common share | $ | 0.125 | $ | 0.125 | $ | 0.375 | $ | 0.350 |
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
| Nine Months Ended | ||||
| December 31, | ||||
| 2011 | 2010 | |||
| Cash flows from operating activities: | ||||
| Net income | $ | 12,665 | $ | 16,725 |
| Adjustments to reconcile net income to net cash | ||||
| provided by operating activities: | ||||
| Depreciation | 1,046 | 1,023 | ||
| Share based compensation | 1,686 | 1,606 | ||
| Deferred income taxes | (175) | 202 | ||
| Bad debt expense | 40 | 30 | ||
| (Increase) decrease in operating assets | ||||
| and increase (decrease) in liabilities: | ||||
| Accounts receivable | 306 | 1,265 | ||
| Inventories - finished goods | (806) | 14,179 | ||
| Prepaid income taxes | 562 | (541) | ||
| Prepaid expenses and other current assets | (977) | (1,238) | ||
| Accounts payable | (182) | (1,532) | ||
| Accrued expenses and other current liabilities | (443) | (246) | ||
| Net cash provided by operating activities | 13,722 | 31,473 | ||
| Cash flows from investing activities: | ||||
| Net change in investments | 10,877 | (10,104) | ||
| Purchases of property and equipment | (624) | (491) | ||
| Purchases of intangible asset | - | (10) | ||
| Net cash provided by (used in) investing activities | 10,253 | (10,605) | ||
| Cash flows from financing activities: | ||||
| Dividends paid | (7,914) | (7,933) | ||
| Purchases of treasury stock | (23,685) | (5,225) | ||
| Tax adjustment related to restricted stock | (71) | 25 | ||
| Proceeds from the exercise of stock options | - | 252 | ||
| Tax benefit related to stock options exercised | - | 124 | ||
| Net cash used in financing activities | (31,670) | (12,757) | ||
| Net (decrease) increase in cash and cash equivalents | (7,695) | 8,111 | ||
| Cash and cash equivalents, at beginning of period | 49,660 | 53,143 | ||
| Cash and cash equivalents, at end of period | $ | 41,965 | $ | 61,254 |
| Supplemental disclosure of cash flow information: | ||||
| Cash paid for income taxes | $ | 7,056 | $ | 10,254 |
| Property and equipment purchases in accounts payable | $ | - | $ | 259 |
| Dividends payable in accrued expenses | $ | 167 | $ | 126 |