EX-99.1 2 pets101810fm8k_ex99z1.htm EXHIBIT 99 Exhibit 99


Exhibit 99.1

PETMED EXPRESS D/B/A 1-800-PETMEDS

ANNOUNCES ITS SECOND QUARTER FINANCIAL RESULTS

Pompano Beach, Florida, October 18, 2010 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended September 30, 2010.  Net sales for the quarter ended September 30, 2010 were $61.2 million, compared to $62.4 million for the quarter ended September 30, 2009, a decrease of 1.9%.  Net sales for the six months ended September 30, 2010 were $135.6 million, compared to $139.6 million for the quarter ended September 30, 2009, a decrease of 2.9%.  Net income was $5.0 million, or $0.22 diluted per share, for the quarter ended September 30, 2010, compared to net income of $6.3 million, or $0.28 diluted per share, for the quarter ended September 30, 2009, a 20% decrease to EPS.  Net income was $12.2 million, or $0.54 diluted per share, for the six months ended September 30, 2010, compared to net income of $14.3 million, or $0.63 diluted per share, for the six months ended September 30, 2009, a 15% decrease to EPS.  Reorder sales increased by 4.6%, from $45.8 million to $47.9 million for the quarters ended September 30, 2009 and 2010, respectively.  Reorder sales for the six months ended September 30, 2010 were $105.5 million, compared to $99.8 million for the six months ended September 30, 2009, an increase of 5.7%.


Menderes Akdag, President and CEO, commented: “It has been another challenging quarter due to our having to pay more to advertise, combined with consumers giving greater consideration to price and reducing their usage of the product categories we offer.  Our online sales continued to increase, by 4.1% to $43.9 million for the quarter compared to $42.2 million for the prior quarter, with approximately 72% of our orders being generated from our website during the quarter compared to 67% in the prior quarter.  During the quarter we bought back approximately 222,000 shares of our own common shares for $3.5 million, and increased our quarterly dividend, from $0.10 per share to $0.125 per share, an increase of 25%.  Our focus in fiscal 2011 continues to be conversion optimization, and the expansion of our product offerings into pet supplies.”


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. on October 18, 2010 until November 1, 2010 at 11:59 P.M.  To access the replay, call (800) 839-2280 (toll free) or (203) 369-3641, 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.


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Exhibit 99.1 Page 1 of 4




PETMED EXPRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)


 

 

September 30,

 

March 31,

 

 

2010

 

2010

 

 

(Unaudited)

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

   Cash and cash equivalents

$

60,506 

$

53,143 

   Short term investments - available for sale

 

10,097 

 

- 

   Accounts receivable, less allowance for doubtful

 

 

 

 

      accounts of $4 and $5, respectively

 

1,452 

 

2,097 

   Inventories - finished goods

 

14,735 

 

29,064 

   Prepaid expenses and other current assets

 

1,659 

 

610 

   Deferred tax assets

 

1,279 

 

1,255 

   Prepaid income taxes

 

1,721 

 

330 

          Total current assets

 

91,449 

 

86,499 

 

 

 

 

 

   Long term investments

 

12,381 

 

12,392 

   Property and equipment, net

 

3,909 

 

4,429 

   Intangible asset

 

850 

 

850 

 

 

 

 

 

Total assets

$

108,589 

$

104,170 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

   Accounts payable

$

4,331 

$

4,776 

   Accrued expenses and other current liabilities

 

2,363 

 

2,312 

          Total current liabilities

 

6,694 

 

7,088 

 

 

 

 

 

Deferred tax liabilities

 

760 

 

225 

 

 

 

 

 

Total liabilities:

 

7,454 

 

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;

 

 

 

 

      22,850 and 22,990 shares issued and outstanding, respectively

 

23 

 

23 

   Additional paid-in capital

 

- 

 

2,628 

   Retained earnings

 

101,180 

 

94,305 

   Accumulated other comprehensive loss

 

(77)

 

(108)

 

 

 

 

 

          Total shareholders' equity

 

101,135 

 

96,857 

 

 

 

 

 

Total liabilities and shareholders' equity

$

108,589 

$

104,170 




Exhibit 99.1 Page 2 of 4




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,

 

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 Sales

$

61,245

$

62,447

$

135,614

$

139,616

 Cost of sales

 

38,915

 

38,765

 

86,058

 

86,648

 

 

 

 

 

 

 

 

 

 Gross profit

 

22,330

 

23,682

 

49,556

 

52,968

 

 

 

 

 

 

 

 

 

 Operating expenses:

 

 

 

 

 

 

 

 

      General and administrative

 

5,713

 

5,777

 

11,921

 

12,270

      Advertising

 

8,575

 

7,752

 

17,415

 

17,624

      Depreciation and amortization

 

315

 

323

 

665

 

645

 Total operating expenses

 

14,603

 

13,852

 

30,001

 

30,539

 

 

 

 

 

 

 

 

 

 Income from operations

 

7,727

 

9,830

 

19,555

 

22,429

 

 

 

 

 

 

 

 

 

 Other income:

 

 

 

 

 

 

 

 

      Interest income, net

 

101

 

58

 

167

 

119

      Other, net

 

30

 

1

 

33

 

3

 Total other income

 

131

 

59

 

200

 

122

 

 

 

 

 

 

 

 

 

 Income before provision for income taxes

 

7,858

 

9,889

 

19,755

 

22,551

 

 

 

 

 

 

 

 

 

 Provision for income taxes

 

2,881

 

3,624

 

7,552

 

8,211

 

 

 

 

 

 

 

 

 

 Net income

$

4,977

$

6,265

$

12,203

$

14,340

 

 

 

 

 

 

 

 

 

 Net income per common share:

 

 

 

 

 

 

 

 

       Basic

$

0.22

$

0.28

$

0.54

$

0.64

       Diluted

$

0.22

$

0.28

$

0.54

$

0.63

 

 

 

 

 

 

 

 

 

 Weighted average number of common shares outstanding:

 

 

 

 

 

 

       Basic

 

22,616

 

22,614

 

22,668

 

22,569

       Diluted

 

22,741

 

22,755

 

22,804

 

22,718

 

 

 

 

 

 

 

 

 

 Cash dividends declared per common share

$

0.125

$

0.100

$

0.225

$

0.100




Exhibit 99.1 Page 3 of 4





PETMED EXPRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)


 

 

Six Months Ended

 

 

September 30,

 

 

2010

 

2009

 Cash flows from operating activities:

 

 

 

 

    Net income

$

12,203 

$

14,340 

    Adjustments to reconcile net income to net cash

 

 

 

 

     provided by operating activities:

 

 

 

 

        Depreciation and amortization

 

665 

 

645 

        Share based compensation

 

1,044 

 

722 

        Deferred income taxes

 

511 

 

206 

        Bad debt expense

 

20 

 

47 

        (Increase) decrease in operating assets

 

 

 

 

           and increase (decrease) in liabilities:

 

 

 

 

             Accounts receivable

 

625 

 

87 

             Inventories - finished goods

 

14,328 

 

10,832 

             Prepaid income taxes

 

(1,391)

 

(1,527)

             Prepaid expenses and other current assets

 

(1,049)

 

(205)

             Accounts payable

 

(287)

 

849 

             Accrued expenses and other current liabilities

 

9 

 

109 

 Net cash provided by operating activities

 

26,678 

 

26,105 

 

 

 

 

 

 Cash flows from investing activities:

 

 

 

 

    Net change in investments

 

(10,054)

 

2,150 

    Purchases of property and equipment

 

(303)

 

(583)

 Net cash (used in) provided by investing activities

 

(10,357)

 

1,567 

 

 

 

 

 

 Cash flows from financing activities:

 

 

 

 

    Dividends paid

 

(5,121)

 

(2,264)

    Purchases of treasury stock

 

(4,213)

 

- 

    Proceeds from the exercise of stock options

 

252 

 

476 

    Tax benefit related to stock options exercised

 

124 

 

178 

 Net cash used in financing activities

 

(8,958)

 

(1,610)

 

 

 

 

 

 Net increase in cash and cash equivalents

 

7,363 

 

26,062 

 Cash and cash equivalents, at beginning of period

 

53,143 

 

30,126 

 

 

 

 

 

 Cash and cash equivalents, at end of period

$

60,506 

$

56,188 

 

 

 

 

 

 Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

 

    Cash paid for income taxes

$

8,308 

$

9,355 

 

 

 

 

 

    Property and equipment purchases in accounts payable

$

158 

$

528 

 

 

 

 

 

    Dividends payable in accrued expenses

$

90 

$

19 




Exhibit 99.1 Page 4 of 4