8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): January 24, 2022

PetMed Express, Inc.
 (Exact name of registrant as specified in its charter)

Florida	000-28827	65-0680967
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

420 South Congress Avenue, Delray Beach, FL 33445

(Address of principal executive offices) (Zip Code)

(561) 526-4444

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.001 per share	PETS	NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02   Results of Operations and Financial Condition.

On January 24, 2022, PetMed Express, Inc. (the “Company”) issued a press release announcing its December 31, 2021 third quarter-end financial results and other financial information, and that management would review these results in a conference call at 4:30 pm Eastern time on January 24, 2022.  A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The information in this Item 2.02 and the information contained in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference in any Company filing under the Securities Act of 1933, as amended (“Securities Act”), or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except as shall be expressly set forth by specific reference in such filing.

The Company is making reference to non-GAAP financial information in both the press release and the conference call. A reconciliation of these non-GAAP financial measures to the nearest comparable GAAP financial measures is contained in the attached press release.

Item 7.01 Regulation FD Disclosure.

Additionally, the Company announced in the press release that its Board of Directors declared a quarterly dividend of $0.30 per share on its common stock.  The dividend will be payable on February 18, 2022, to shareholders of record at the close of business on February 7, 2022.  The Company intends to continue to pay regular quarterly dividends; however, the declaration and payment of future dividends is discretionary and will be subject to a determination by the Board of Directors each quarter following its review of the Company’s financial performance. 

The information in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference in any Company filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except as shall be expressly set forth by specific reference in such filing.

Item 9.01   Financial Statements and Exhibits.

(d)	Exhibits.
	99.1 – Press release dated January 24, 2022.
	104 – Cover Page Interactive Data File (formatted as Inline XBRL).

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release dated January 24, 2022
104	Cover Page Interactive Data File (formatted as Inline XBRL)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: January 25, 2022

PETMED EXPRESS, INC.
By:	/s/ Bruce S. Rosenbloom
Name:	Bruce S. Rosenbloom
Title:	Chief Financial Officer

2

EX-99.1

Exhibit 99.1

PetMeds® Announces Its Third Fiscal Quarter Financial Results and Its Quarterly

Dividend of $0.30 Per Share

Delray Beach, Florida, January 24, 2022, PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended December 31, 2021. Net sales for the quarter ended December 31, 2021, were $60.7 million, compared to $65.9 million for the quarter ended December 31, 2020, a decrease of 7.9%. Net sales for the nine months ended December 31, 2021, were $207.4 million, compared to $237.5 million for the nine months ended December 31, 2020, a decrease of 12.7%. Net income was $4.3 million, or $0.21 diluted per share, for the quarter ended December 31, 2021, compared to net income of $7.6 million, or $0.38 diluted per share, for the quarter ended December 31, 2020, a 44% decrease to net income. Net income was $15.0 million, or $0.74 diluted per share, for the nine months ended December 31, 2021, compared to net income of $23.8 million, or $1.18 diluted per share, for the nine months ended December 31, 2020, a 37% decrease to net income. Adjusted EBITDA (1) was $7.6 million, or $0.37 diluted per share, for the quarter ended December 31, 2021, compared to adjusted EBITDA of $11.0 million, or $0.55 diluted per share, for the quarter ended December 31, 2020, a 31% decrease to adjusted EBITDA. Adjusted EBITDA was $24.5 million, or $1.20 diluted per share, for the nine months ended December 31, 2021, compared to adjusted EBITDA of $34.2 million, or $1.70 diluted per share, for the nine months ended December 31, 2020, a 28% decrease to adjusted EBITDA. Our average order size increased from $88 to $89 for the quarters ended December 31, 2020 and 2021, respectively.

“We are executing rapidly against our business transformation of PetMeds across people, process, and product,” said Matt Hulett, CEO and President. “The future of PetMeds is much broader than just a prescription eCommerce company and we expect to show progress in the coming quarters as we develop into a broader expert health and wellness offering.”  

The Board of Directors declared a quarterly dividend of $0.30 per share on the Company’s common stock. The dividend will be payable on February 18, 2022, to shareholders of record at the close of business on February 7, 2022. The Company intends to continue to pay regular quarterly dividends; however, the declaration and payment of future dividends is discretionary and will be subject to a determination by the Board of Directors each quarter following its review of the Company’s financial performance.

This afternoon at 4:30 P.M. Eastern Time, the Company will host a conference call to review the quarter’s financial results. To access the call, which is open to the public, please dial (877) 407-0789 (toll free) or (201) 689-8562. We will also provide a link at https://www.1800petmeds.com/investor.html for those who wish to stream the call via webcast. For those unable to participate in the live event, the call will be available for replay from 7:30 P.M. Eastern Time on January 24, 2022, until February 7, 2022, at 11:59 P.M Eastern Time. To access the replay, call (844) 512-2921 (toll free) or (412) 317-6671 and enter passcode 13726200.

Founded in 1996, PetMed Express is America’s Most Trusted 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.petmeds.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, 2021. 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, 561-526-4444, investor@petmeds.com.

For media relations contact Butin PR, Mary Eva Tredway, maryeva@Butinpr.com.

(1) Adjusted EBITDA and adjusted EBITDA per share are non-GAAP financial measures. See “Non-GAAP Financial Measures” for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures

###

Exhibit 99.1 Page 1 of 6

PETMED EXPRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for per share data)

	December 31,		March 31,
	2021		2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	108,911	$	118,718
Accounts receivable, less allowance for doubtful accounts of $19 and $39, respectively		1,267		2,587
Inventories - finished goods		27,640		34,420
Prepaid expenses and other current assets		3,216		4,503
Prepaid income taxes		1,870		959
Total current assets		142,904		161,187
Noncurrent assets:
Property and equipment, net		24,665		25,450
Intangible assets		860		860
Total noncurrent assets		25,525		26,310
Total assets	$	168,429	$	187,497
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	21,935	$	39,548
Accrued expenses and other current liabilities		4,330		5,387
Total current liabilities		26,265		44,935
Deferred tax liabilities		1,262		1,281
Total liabilities		27,527		46,216
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; 20,957 and 20,269 shares issued and outstanding, respectively		21		20
Additional paid-in capital		10,151		7,111
Retained earnings		130,721		134,141
Total shareholders' equity		140,902		141,281
Total liabilities and shareholders' equity	$	168,429	$	187,497

Exhibit 99.1 Page 2 of 6

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,
	2021		2020		2021		2020
Sales	$	60,717	$	65,896	$	207,415	$	237,536
Cost of sales		42,992		46,273		148,736		168,110
Gross profit		17,725		19,623		58,679		69,426
Operating expenses:
General and administrative		7,541		6,487		22,540		21,050
Advertising		4,327		3,221		15,435		17,385
Depreciation		710		622		2,051		1,791
Total operating expenses		12,578		10,330		40,026		40,226
Income from operations		5,147		9,293		18,653		29,200
Other income:
Interest income, net		84		73		243		229
Other, net		287		345		741		938
Total other income		371		418		984		1,167
Income before provision for income taxes		5,518		9,711		19,637		30,367
Provision for income taxes		1,261		2,100		4,603		6,576
Net income	$	4,257	$	7,611	$	15,034	$	23,791
Net income per common share:
Basic	$	0.21	$	0.38	$	0.75	$	1.19
Diluted	$	0.21	$	0.38	$	0.74	$	1.18
Weighted average number of common shares outstanding:
Basic		20,208		20,094		20,165		20,047
Diluted		20,329		20,104		20,365		20,100
Cash dividends declared per common share	$	0.30	$	0.28	$	0.90	$	0.84

Exhibit 99.1 Page 3 of 6

PETMED EXPRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (In thousands) (Unaudited)

	Nine Months Ended
	December 31,
	2021			2020
Cash flows from operating activities:
Net income	$	15,034		$	23,791
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		2,051			1,791
Share based compensation		3,040			2,294
Deferred income taxes		(19	)		353
Bad debt expense		104			84
(Increase) decrease in operating assets and increase (decrease) in liabilities:
Accounts receivable		1,216			1,928
Inventories - finished goods		6,780			(10,281	)
Prepaid income taxes		(911	)		-
Prepaid expenses and other current assets		1,287			(983	)
Accounts payable		(17,613	)		2,211
Accrued expenses and other current liabilities		(1,188	)		286
Income taxes payable		-			152
Net cash provided by operating activities		9,781			21,626
Cash flows from investing activities:
Purchases of property and equipment		(1,266	)		(1,848	)
Net cash used in investing activities		(1,266	)		(1,848	)
Cash flows from financing activities:
Dividends paid		(18,322	)		(17,039	)
Net cash used in financing activities		(18,322	)		(17,039	)
Net (decrease) increase in cash and cash equivalents		(9,807	)		2,739
Cash and cash equivalents, at beginning of period		118,718			103,762
Cash and cash equivalents, at end of period	$	108,911		$	106,501
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	5,580		$	6,356
Dividends payable in accrued expenses	$	329		$	174

Exhibit 99.1 Page 4 of 6

Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, we have disclosed here and elsewhere in this earnings release adjusted EBITDA and adjusted EBITDA per share, non-GAAP financial measures that we calculate as net income excluding; share-based compensation expense; depreciation and amortization; income tax provision; and interest income (expense). We have provided reconciliations below of adjusted EBITDA to net income and adjusted EBITDA per share to diluted earnings per share, the most directly comparable GAAP financial measures.

We have included adjusted EBITDA and adjusted EBITDA per share in this earnings release because they are key measures used by our management and board of directors to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, the exclusion of certain expenses in calculating adjusted EBITDA facilitates operating performance comparability across reporting periods by removing the effect of non-cash expenses. Accordingly, we believe that adjusted EBITDA and adjusted EBITDA per share provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

We believe it is useful to exclude non-cash charges, such as, share-based compensation expense and depreciation and amortization from our adjusted EBITDA and adjusted EBITDA per share because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations. We believe it is useful to exclude income tax provision; interest income (expense) which are not components of our core business operations. Adjusted EBITDA and adjusted EBITDA per share has limitations as financial measures, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

● Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future and adjusted EBITDA and adjusted EBITDA per share does not reflect capital expenditure requirements for such replacements or for new capital expenditures;

● Adjusted EBITDA and adjusted EBITDA per share does not reflect share-based compensation. Share-based compensation has been, and will continue to be for the foreseeable future, a material recurring expense in our business and an important part of our compensation strategy;

● Adjusted EBITDA and adjusted EBITDA per share does not reflect interest income (expense), net; or changes in, or cash requirements for, our working capital; and

● Other companies, including companies in our industry, may calculate adjusted EBITDA and adjusted EBITDA per share differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider adjusted EBITDA and adjusted EBITDA per share alongside other financial performance measures, including various cash flow metrics, net income, net margin, and our other GAAP results. The following table presents a reconciliation of net income to adjusted EBITDA and adjusted EBITDA per share for each of the periods indicated:

Reconciliation of Non-GAAP Measures

PetMed Express, Inc.

(Unaudited)

	Three Months Ended												Nine Months Ended
($ in thousands, except percentages)	December 31, 2021			December 31, 2020			$ Change			% Change			December 31, 2021			December 31, 2020			$ Change			% Change
Consolidated Reconciliation of GAAP Net Income to Adjusted EBITDA:
Net income	$	4,257		$	7,611		$	(3,354	)		-44	%	$	15,034		$	23,791		$	(8,757	)		-37	%
Add (subtract):
Share-based compensation	$	1,440		$	782		$	658			84	%	$	3,040		$	2,294		$	746			33	%
Income Taxes	$	1,261		$	2,100		$	(839	)		-40	%	$	4,603		$	6,576		$	(1,973	)		-30	%
Depreciation	$	710		$	622		$	88			14	%	$	2,051		$	1,791		$	260			15	%
Interest Income/Expense	$	(84	)	$	(73	)	$	(11	)		15	%	$	(243	)	$	(229	)	$	(14	)		6	%
Adjusted EBITDA	$	7,584		$	11,042		$	(3,458	)		-31	%	$	24,485		$	34,223		$	(9,738	)		-28	%

Exhibit 99.1 Page 5 of 6

	Three Months Ended												Nine Months Ended
($ in thousands, except percentages and per share amounts)	December 31, 2021			December 31, 2020			$ Change			% Change			December 31, 2021			December 31, 2020			$ Change			% Change
Consolidated Reconciliation of GAAP Net Income Per Share to Adjusted EBITDA per share:
Net income per share, diluted	$	0.21		$	0.38		$	(0.17	)		-45	%	$	0.74		$	1.18		$	(0.45	)		-38	%
Add (subtract):
Share-based compensation	$	0.07		$	0.04		$	0.03			82	%	$	0.15		$	0.11		$	0.04			31	%
Income Taxes	$	0.06		$	0.10		$	(0.04	)		-41	%	$	0.22		$	0.33		$	(0.10	)		-31	%
Depreciation	$	0.03		$	0.03		$	0.00			13	%	$	0.10		$	0.09		$	0.01			13	%
Interest Income/Expense	$	(0.00	)	$	(0.00	)	$	(0.00	)		14	%	$	(0.01	)	$	(0.01	)	$	0.00			5	%
Adjusted EBITDA Per Share	$	0.37		$	0.55		$	(0.18	)		-32	%	$	1.20		$	1.70		$	(0.50	)		-29	%

Exhibit 99.1 Page 6 of 6

XML

Document And Entity Information	Jan. 24, 2022
Document Information [Line Items]
Entity, Registrant Name	PetMed Express, Inc.
Document, Type	8-K
Document, Period End Date	Jan. 24, 2022
Entity, Incorporation, State or Country Code	FL
Entity, File Number	000-28827
Entity, Tax Identification Number	65-0680967
Entity, Address, Address Line One	420 South Congress Avenue
Entity, Address, City or Town	Delray Beach
Entity, Address, State or Province	FL
Entity, Address, Postal Zip Code	33445
City Area Code	561
Local Phone Number	526-4444
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	PETS
Security Exchange Name	NASDAQ
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0001040130