EX-99.1 2 ex99-1.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1
PETMED EXPRESS D/B/A 1-800-PETMEDS ANNOUNCES FIRST QUARTER FINANCIAL RESULTS - NET INCOME INCREASES 30% TO RECORD $0.25 EPS
 
Pompano Beach, Florida, July 23, 2007 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended June 30, 2007. Net income was $6.2 million, or $0.25 diluted per share, for the quarter ended June 30, 2007, compared to net income of $4.8 million, or $0.20 diluted per share, for the quarter ended June 30, 2006, an increase to net income of 30.2%. A one-time income tax-related net benefit was recognized in the quarter ended June 30, 2007, resulting in an increase to diluted earnings of one-half of a penny ($0.005) per share. Net sales for the quarter ended June 30, 2007 were $59.0 million, compared to $50.7 million for the quarter ended June 30, 2006, an increase of 16.5%. Reorder sales increased by 18%, from $33.9 million to $40.0 million for the quarters ended June 30, 2006 and 2007, respectively.

Menderes Akdag, CEO and President, commented: “We are pleased to report that our new order sales increased by 15%, from $16.5 million to $19.0 million for the quarters ended June 30, 2006 and 2007, respectively. We were also more efficient with our advertising spending this quarter, with a new customer acquisition cost of $36 for the quarter, compared to $40 for the same quarter in the prior year. We acquired approximately, 236,000 new customers for our first fiscal quarter compared to 207,000 for the same quarter in the prior year. We are also pleased to report that our Internet sales increased by 26%, to $37.9 million for the quarter ended June 30, 2007, compared to $30.1 million for the same quarter in the prior year. Approximately 64% of all sales were placed on the Company’s website for the first fiscal quarter, compared to 59% for the same quarter in the prior year. We will continue to focus on capturing additional market share, and on improving reorders and our customer service levels in fiscal 2008. Additionally, the Company repurchased 117,300 shares of its outstanding common stock for approximately $1,512,000 during the first quarter of fiscal 2008.”

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, dial (888) 889-4951 (toll free) or (210) 839-8505. 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 A.M. on July 23, 2007 until August 7, 2007 at 11:59 P.M. To access the replay, call (888) 568-0812 (toll free) or (402) 998-0239, 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, 2007. 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.
###

Exhibit 99.1 Page 1 of 4

PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
           
   
June 30,
  
March 31,
  
   
2007
  
2007
  
   
(UNAUDITED)
      
ASSETS
          
           
Current assets:
              
Cash and cash equivalents
  
$
2,000,337
  
$
316,470
  
Temporary investments
    
45,425,000
   
39,125,000
 
Accounts receivable, less allowance for doubtful
              
accounts of $43,000 and $28,000, respectively
    
2,106,908
   
1,369,521
 
Inventories - finished goods
    
15,674,851
   
16,086,207
 
Prepaid expenses and other current assets
    
1,211,554
   
1,071,171
 
Total current assets
    
66,418,650
   
57,968,369
 
               
Property and equipment, net
    
2,118,602
   
1,990,578
 
Deferred income taxes
    
1,136,867
   
894,540
 
Intangible asset
    
365,000
   
365,000
 
               
Total assets
  
$
70,039,119
  
$
61,218,487
  
               
LIABILITIES AND SHAREHOLDERS' EQUITY
              
               
Current liabilities:
              
Accounts payable
  
$
5,724,897
  
$
5,859,756
  
Income taxes payable
    
2,870,262
   
229,321
 
Accrued expenses and other current liabilities
    
2,301,279
   
1,265,837
 
               
Total liabilities
    
10,896,438
   
7,354,914
 
               
Commitments and contingencies
              
               
Shareholders' equity:
              
Preferred stock, $.001 par value, 5,000,000 shares authorized;
              
2,500 convertible shares issued and outstanding with a
              
liquidation preference of $4 per share
    
8,898
   
8,898
 
Common stock, $.001 par value, 40,000,000 shares authorized;
              
24,383,181 and 24,309,417 shares issued, respectively
    
24,383
   
24,309
 
Additional paid-in capital
    
15,563,828
   
15,213,254
 
Retained earnings
    
44,800,196
   
38,617,112
 
Less treasury stock, at cost; 97,300 and 0 shares, respectively
    
(1,254,624
)
  
-
 
               
Total shareholders' equity
    
59,142,681
   
53,863,573
 
               
Total liabilities and shareholders' equity
  
$
70,039,119
  
$
61,218,487
  
 
Exhibit 99.1 Page 2 of 4

PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
           
   
Three Months Ended
 
   
June 30,
 
   
2007
 
2006
 
           
Sales
 
$
59,027,235
  
$
50,673,353
  
Cost of sales
   
36,331,851
   
30,549,028
 
               
Gross profit
   
22,695,384
   
20,124,325
 
               
Operating expenses:
             
General and administrative
   
5,615,466
   
4,448,622
 
Advertising
   
8,482,781
   
8,328,718
 
Depreciation and amortization
   
127,934
   
135,301
 
Total operating expenses
   
14,226,181
   
12,912,641
 
               
Income from operations
   
8,469,203
   
7,211,684
 
               
Other income (expense):
             
Interest income
   
392,202
   
251,167
 
Other, net
   
231,656
   
100,402
 
Loss on disposal of property and equipment
    
-
   
(1,250
)
Total other income (expense)
    
623,858
   
350,319
 
               
Income before provision for income taxes
    
9,093,061
   
7,562,003
 
               
Provision for income taxes
    
2,909,977
   
2,811,745
 
               
Net income
  
$
6,183,084
  
$
4,750,258
  
               
Net income per common share:
             
Basic
  
$
0.26
  
$
0.20
  
Dilutive
  
$
0.25
  
$
0.20
  
               
Weighted average number of common shares outstanding:
             
Basic
    
24,149,321
   
24,009,276
 
Dilutive
   
24,336,100
    
24,300,946
  
 
Exhibit 99.1 Page 3 of 4

PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
       
   
Three Months Ended
   
June 30,
   
2007
  
2006
  
Cash flows from operating activities:
             
Net income
 
$
6,183,084
  
$
4,750,258
  
Adjustments to reconcile net income to net cash
             
provided by operating activities:
             
Depreciation and amortization
   
127,934
   
135,301
 
Shared based compensation
   
359,469
   
223,146
 
Deferred income taxes
   
(242,327
)
  
(34,196
)
Loss on disposal of property and equipment
   
-
   
1,250
 
Bad debt expense
   
24,820
   
25,129
 
(Increase) decrease in operating assets
             
and increase (decrease) in liabilities:
             
Accounts receivable
   
(762,207
)
  
(254,963
)
Inventories - finished goods
   
411,356
   
1,259,533
 
Prepaid expenses and other current assets
   
(140,383
)
  
(106,551
)
Accounts payable
   
(134,859
)
  
2,105,911
 
Income taxes payable
   
2,640,941
   
1,657,222
 
Accrued expenses and other current liabilities
   
1,035,442
   
193,702
 
Net cash provided by operating activities
   
9,503,270
   
9,955,742
 
               
Cash flows from investing activities:
             
Net change in temporary investments
   
(6,300,000
)
  
(10,500,000
)
Purchases of property and equipment
   
(255,958
)
  
(204,627
)
Net proceeds from the sale of property and equipment
   
-
   
400
 
Net cash used in investing activities
   
(6,555,958
)
  
(10,704,227
)
               
Cash flows from financing activities:
             
Purchases of treasury stock
   
(1,512,254
)
  
-
 
Proceeds from the exercise of stock options
   
240,444
   
301,859
 
Tax benefit related to stock options exercised
   
8,365
   
79,719
 
Net cash (used in) provided by financing activities
   
(1,263,445
)
  
381,578
 
               
Net increase (decrease) in cash and cash equivalents
   
1,683,867
   
(366,907
)
Cash and cash equivalents, at beginning of period
   
316,470
   
366,907
 
               
Cash and cash equivalents, at end of period
 
$
2,000,337
  
$
-
  
               
Supplemental disclosure of cash flow information:
             
               
Cash paid for income taxes
 
$
503,000
  
$
1,109,000
  
               
Retirement of treasury stock
 
$
257,630
  
$
-
  
 
Exhibit 99.1 Page 4 of 4