Full Press Release Details
PETMED EXPRESS D/B/A 1-800-PETMEDS ANNOUNCES ITS FIRST QUARTER FINANCIAL RESULTS
Pompano Beach, Florida, July 23, 2012 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended June 30, 2012. Net sales for the quarter ended June 30, 2012 were $69.0 million, compared to $73.6 million for the quarter ended June 30, 2011, a decrease of 6%. Net income was $4.0 million, or $0.20 diluted per share, for the quarter ended June 30, 2012, compared to net income of $4.8 million, or $0.22 diluted per share, for the quarter ended June 30, 2011, a 12% decrease to EPS. Reorder sales decreased by 3%, from $56.6 million to $55.1 million for the quarters ended June 30, 2011 and 2012, respectively. The Company acquired approximately 197,000 new customers for the quarter ended June 30, 2012, compared to 226,000 new customers for the quarter ended June 30, 2011. Additionally, our online sales decreased by 3% to $52.8 million for the quarter, compared to $54.1 million for the quarter the prior year, with approximately 77% of our orders being generated from our website during the quarter compared to 73% for the quarter the prior year.
Menderes Akdag, CEO and President, commented: Although our sales were down due to a decline in average order size, we did see an increase in total orders. During the quarter ended June 30, 2012 our average order size was $73, compared to $80 for the quarter ended June 30, 2011. This reduction can be attributed to customers purchasing smaller quantities, for example a 3-month supply instead of 6 months, additional discounts given, and a change in product mix to lower priced items. In addition, the decrease in sales for the quarter can be attributed to the unavailability of Novartis brands during the quarter, due to the manufacturer s suspended production. The sales in the June quarter might also have been negatively affected by the peak season starting earlier this year due to the warmer weather, which shifted sales to the March quarter. Cash flow from operations increased by 62%, from $8.5 million to $13.8 million for the quarters ended June 30, 2011 and 2012, respectively. To address the decrease in sales for the quarter, we are focusing on advertising efficiency and shifting sales to higher margin items, while continuing to expand our product offerings.
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 (203) 827-7025. 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 July 23, 2012 until August 6, 2012 at 11:59 P.M. To access the replay, call (888) 673-3565 (toll free) or (402) 220-6428, 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, 2012. 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
| June 30, | March 31, | |||||||
| 2012 | 2012 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 57,351 | $ | 46,801 | ||||
| Short term investments - available for sale | 10,382 | 10,347 | ||||||
| Accounts receivable, less allowance for doubtful | ||||||||
| accounts of $7 and $5, respectively | 2,392 | 1,572 | ||||||
| Inventories - finished goods | 18,314 | 26,217 | ||||||
| Prepaid expenses and other current assets | 1,658 | 1,241 | ||||||
| Deferred tax assets | 1,110 | 1,230 | ||||||
| Prepaid income taxes | - | 199 | ||||||
| Total current assets | 91,207 | 87,607 | ||||||
| Property and equipment, net | 2,476 | 2,597 | ||||||
| Intangible asset | 860 | 860 | ||||||
| Total assets | $ | 94,543 | $ | 91,064 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 7,252 | $ | 6,619 | ||||
| Accrued expenses and other current liabilities | 2,162 | 2,772 | ||||||
| Income taxes payable | 2,214 | - | ||||||
| Total current liabilities | 11,628 | 9,391 | ||||||
| Deferred tax liabilities | 270 | 492 | ||||||
| Total liabilities: | 11,898 | 9,883 | ||||||
| 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; | ||||||||
| 20,335 and 20,338 shares issued and outstanding, respectively | 20 | 20 | ||||||
| Additional paid-in capital | 554 | - | ||||||
| Retained earnings | 82,009 | 81,108 | ||||||
| Accumulated other comprehensive gain | 53 | 44 | ||||||
| Total shareholders' equity | 82,645 | 81,181 | ||||||
| Total liabilities and shareholders' equity | $ | 94,543 | $ | 91,064 |
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In thousands, except for per share amounts) (Unaudited)
| Three Months Ended | ||||||||
| June 30, | ||||||||
| 2012 | 2011 | |||||||
| Sales | $ | 68,955 | $ | 73,578 | ||||
| Cost of sales | 46,651 | 49,468 | ||||||
| Gross profit | 22,304 | 24,110 | ||||||
| Operating expenses: | ||||||||
| General and administrative | 5,922 | 6,104 | ||||||
| Advertising | 9,850 | 10,100 | ||||||
| Depreciation | 328 | 341 | ||||||
| Total operating expenses | 16,100 | 16,545 | ||||||
| Income from operations | 6,204 | 7,565 | ||||||
| Other income (expense): | ||||||||
| Interest income, net | 59 | 86 | ||||||
| Other, net | - | (1 | ) | |||||
| Total other income | 59 | 85 | ||||||
| Income before provision for income taxes | 6,263 | 7,650 | ||||||
| Provision for income taxes | 2,311 | 2,813 | ||||||
| Net income | $ | 3,952 | $ | 4,837 | ||||
| Net income per common share: | ||||||||
| Basic | $ | 0.20 | $ | 0.22 | ||||
| Diluted | $ | 0.20 | $ | 0.22 | ||||
| Weighted average number of common shares outstanding: | ||||||||
| Basic | 20,119 | 21,648 | ||||||
| Diluted | 20,245 | 21,767 | ||||||
| Comprehensive income | $ | 3,961 | $ | 4,930 | ||||
| Cash dividends declared per common share | $ | 0.150 | $ | 0.125 |
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
| Three Months Ended | ||||||||
| June 30, | ||||||||
| 2012 | 2011 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 3,952 | $ | 4,837 | ||||
| Adjustments to reconcile net income to net cash | ||||||||
| provided by operating activities: | ||||||||
| Depreciation | 328 | 341 | ||||||
| Share based compensation | 554 | 565 | ||||||
| Deferred income taxes | (101 | ) | (155 | ) | ||||
| Bad debt expense | 11 | 19 | ||||||
| (Increase) decrease in operating assets | ||||||||
| and increase (decrease) in liabilities: | ||||||||
| Accounts receivable | (831 | ) | (338 | ) | ||||
| Inventories - finished goods | 7,903 | (934 | ) | |||||
| Prepaid income taxes | 199 | 664 | ||||||
| Prepaid expenses and other current assets | (417 | ) | (398 | ) | ||||
| Accounts payable | 633 | 1,700 | ||||||
| Income taxes payable | 2,213 | 2,303 | ||||||
| Accrued expenses and other current liabilities | (643 | ) | (60 | ) | ||||
| Net cash provided by operating activities | 13,801 | 8,544 | ||||||
| Cash flows from investing activities: | ||||||||
| Net change in investments | (26 | ) | 7,619 | |||||
| Purchases of property and equipment | (207 | ) | (82 | ) | ||||
| Net cash (used in) provided by investing activities | (233 | ) | 7,537 | |||||
| Cash flows from financing activities: | ||||||||
| Dividends paid | (3,018 | ) | (2,751 | ) | ||||
| Purchases of treasury stock | - | (13,577 | ) | |||||
| Net cash (used in) financing activities | (3,018 | ) | (16,328 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 10,550 | (247 | ) | |||||
| Cash and cash equivalents, at beginning of period | 46,801 | 49,660 | ||||||
| Cash and cash equivalents, at end of period | $ | 57,351 | $ | 49,413 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Dividends payable in accrued expenses | $ | 200 | $ | 174 |