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PETMED EXPRESS, INC.

QUARTER ENDED DECEMBER 31, 2006

CONFERENCE CALL TRANSCRIPT

JANUARY 22, 2007 AT 8:30 A.M. ET

Coordinator: Welcome to the PetMed Express, Inc. doing

business as 1-800-PetMeds Conference Call to

review the financial results for the third

fiscal quarter ended on December 31, 2006. At

the request of this company, this conference

call is being recorded. Founded in 1996, 1-800-

PetMeds is America's largest pet pharmacy

delivering prescription and non-prescription

pet medications and other health products for

dogs, cats and horses direct to the consumer.

1-800-PetMeds markets its products through

national television, on-line and direct mail

advertising campaigns which direct consumers to

order by phone or on the Internet, and aim to

increase their recognition of the "1-800-

PetMeds" brand name. 1-800-PetMeds provides an

attractive alternative for obtaining pet

medications in terms of convenience, price,

ease of ordering and rapid home delivery. At

this time I would like to turn the call over to

the company's Chief Financial Officer, Mr.

Bruce Rosenbloom. Sir, you may go ahead please.

Bruce Rosenbloom: Thank you. I would like to welcome everyone

here today. I'd like to remind everyone that

the first portion of this conference call will

be listen-only, until the question and answer

session, which will be later in the call.

Also, certain information that will be included

in this press conference may include forward-

looking statements within the meaning of the

Private Securities Litigation Reform Act of

1995 or the Securities and Exchange Commission

that may involve a number of risks and

uncertainties. These statements are based on

our beliefs as well as assumptions we have used

based upon information currently available to

us. Because these statements reflect our

current views concerning future events, these

statements involve risks, uncertainties and

assumptions. Actual future results may vary

significantly based on a number of factors that

may cause the actual results or events to be

materially different from future results,

performance or achievements expressed or

implied by these statements. We have

identified various risk factors associated with

our operations in our most recent annual report

and other filings with the Securities and

Exchange Commission.

Welcome and thank you for joining us, today.

We will review the highlights of our financial

results and we will compare our third quarter

and nine months ended on December 31, 2006 to

last year's quarter and nine months ended on

For the third fiscal quarter ended on December

31, 2006, sales were $31.4 million compared to

sales of $25.9 million for the same period the

prior year, an increase of 21%. For the nine

months ended on December 31, 2006, sales were

$125.8 million compared to sales of $108.2

million for the nine months the prior year, an

increase of 16%. The increase was primarily

due to increased retail reorders and new orders

offset by decreased wholesale sales. For the

third quarter, net income was $2.8 million, or

$0.11 diluted per share compared to $2.7

million, or $0.11 diluted per share for the

same quarter the prior year, an increase to net

income of 3%. For the nine months, net income

was $10.8 million, or

$0.44 diluted per share compared to $8.9

million, or $0.37 cents diluted per share a

year ago, an increase to net income of 21%.

Retail reorder sales increased by 22% to $22.1

million for the quarter compared to reorder

sales of $18.1 million for the same quarter the

prior year. For the nine months, the reorder

sales increased by 26% to $84.1 million

compared to $66.7 million for the same period a

year ago. Retail new order sales increased by

27% or $9.2 million for the quarter compared to

$7.3 million for the same period the prior

year. For the nine months, the new order sales

increased by 7% or $41.2 million compared to

$38.4 million for the same period last year.

Wholesale sales were approximately $70,000 for

the quarter compared to $500,000 for the same

quarter the prior year. For the nine months,

wholesale sales were approximately $500,000

compared to $3.1 million for the same period a

year ago. The decrease was due to our decision

to limit wholesale sales to focus on our retail

We acquired approximately 130,000 new customers

in the third quarter, compared to 105,000 for

the same period the prior year, and we acquired