EX-99.1 2 pets_ex99z1.htm PRESS RELEASE Press Release


Exhibit 99.1

 

PETMED EXPRESS, INC. D/B/A 1-800-PETMEDS ANNOUNCES ITS FINANCIAL

RESULTS FOR FISCAL 2014 AND ITS $0.17 PER SHARE QUARTERLY DIVIDEND

Pompano Beach, Florida, May 5, 2014 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the fiscal year ended March 31, 2014.  Net income was $18.0 million, or $0.90 diluted per share, for the year ended March 31, 2014, compared to net income of $17.2 million, or $0.86 diluted per share, for the year ended March 31, 2013, an increase to earnings per share of 4.7%.  Net income for the quarter ended March 31, 2014 was relatively flat at $4.5 million, or $0.23 diluted per share, compared to net income of $4.6 million, or $0.23 diluted per share, for the same quarter the prior year.  For the year ended March 31, 2014 net sales were $233.4 million, compared to $227.8 million for the year ended March 31, 2013, an increase of 2.4%. Net sales for the quarter ended March 31, 2014 were $48.6 million, compared to $51.1 million for the quarter ended March 31, 2013, a decrease of 4.9%.  Online sales for the year ended March 31, 2014 were approximately 79% of all sales, compared to 77% for the prior year.


Menderes Akdag, President and CEO, commented: “We were able to increase our gross margins for the quarter and decrease our operational expenses to improve our bottom line results for the fiscal year.   For the quarter ended March 31, 2014 our gross profit increased 24 basis points, which can be attributed to a cost reduction in certain brands.  For the fiscal year ended March 31, 2014 our operating expenses decreased by 83 basis points, mainly due to a reduction in advertising spending and the leveraging of our general and administrative expenses.  Sales were negatively impacted during the quarter due to the colder-than-normal weather.  Average order value was $75 for the fiscal year compared to $73 for the prior fiscal year, which was due mainly to a change in product mix to higher priced items. For fiscal 2015 we are focusing on improving our new order sales.”


The Board of Directors declared a quarterly dividend of $0.17 per share on its common stock.  The dividend will be payable on May 23, 2014, to shareholders of record at the close of business on May 16, 2014.  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 morning at 8:30 A.M. Eastern Time, Mr. Akdag will host a conference call to review the year-end financial results.  To access the call which is open to the public, 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 May 5, 2014 until May 19, 2014 at 11:59 P.M.  To access the replay, call (866) 448-5648 (toll free) or (203) 369-1190 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, 2013.  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

CONSOLIDATED BALANCE SHEETS

(In thousands)


 

 

March 31,

 

 

March 31,

 

  

 

2014

 

 

2013

 

  

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

  

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

18,305

 

 

$

18,155

 

Short term investments - available for sale

 

 

15,539

 

 

 

15,490

 

Accounts receivable, less allowance for doubtful accounts of $7 and $5, respectively

 

 

1,761

 

 

 

1,439

 

Inventories - finished goods

 

 

35,727

 

 

 

31,601

 

Prepaid expenses and other current assets

 

 

1,761

 

 

 

1,090

 

Deferred tax assets

 

 

1,062

 

 

 

982

 

Prepaid income taxes

 

 

54

 

 

 

-

 

Total current assets

 

 

74,209

 

 

 

68,757

 

 

 

 

 

 

 

 

 

 

Noncurrent assets:

 

 

 

 

 

 

 

 

Prepaid expenses

 

 

1,996

 

 

 

1,430

 

Property and equipment, net

 

 

1,310

 

 

 

2,132

 

Intangible asset

 

 

860

 

 

 

860

 

Total noncurrent assets

 

 

4,166

 

 

 

4,422

 

  

 

 

 

 

 

 

 

 

Total assets

 

$

78,375

 

 

$

73,179

 

  

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

5,768

 

 

$

6,454

 

Accrued expenses and other current liabilities

 

 

2,325

 

 

 

2,381

 

Income taxes payable

 

 

-

 

 

 

162

 

Total current liabilities

 

 

8,093

 

 

 

8,997

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

65

 

 

 

168

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

8,158

 

 

 

9,165

 

 

 

 

 

 

 

 

 

 

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; 20,190 and 20,109 shares issued and outstanding, respectively

 

 

20

 

 

 

20

 

Additional paid-in capital

 

 

1,578

 

 

 

-

 

Retained earnings

 

 

68,647

 

 

 

63,987

 

Accumulated other comprehensive loss

 

 

(37

)

 

 

(2

)

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

 

70,217

 

 

 

64,014

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

78,375

 

 

$

73,179

 


Exhibit 99.1 Page 2 of 4




PETMED EXPRESS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except for per share amount)


 

 

Three Months Ended

 

 

Year Ended

 

 

 

March 31,

 

 

March 31,

 

 

 

2014

 

 

2013

 

 

2014

 

 

2013

 

 

 

(UNAUDITED)

 

 

 

 

 

 

 

Sales

 

$

48,632

 

 

$

51,120

 

 

$

233,391

 

 

$

227,829

 

Cost of sales

 

 

31,169

 

 

 

32,885

 

 

 

155,774

 

 

 

150,708

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

17,463

 

 

 

18,235

 

 

 

77,617

 

 

 

77,121

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

4,868

 

 

 

5,152

 

 

 

21,352

 

 

 

21,592

 

Advertising

 

 

5,283

 

 

 

5,557

 

 

 

27,180

 

 

 

27,433

 

Depreciation

 

 

170

 

 

 

260

 

 

 

867

 

 

 

1,091

 

Total operating expenses

 

 

10,321

 

 

 

10,969

 

 

 

49,399

 

 

 

50,116

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

7,142

 

 

 

7,266

 

 

 

28,218

 

 

 

27,005

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

44

 

 

 

42

 

 

 

185

 

 

 

306

 

Other, net

 

 

-

 

 

 

(2

)

 

 

(4

)

 

 

(5

)

Total other income

 

 

44

 

 

 

40

 

 

 

181

 

 

 

301

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

 

7,186

 

 

 

7,306

 

 

 

28,399

 

 

 

27,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

2,660

 

 

 

2,704

 

 

 

10,427

 

 

 

10,141

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

4,526

 

 

$

4,602

 

 

 

17,972

 

 

$

17,165

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in unrealized gain (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

on short and long term investments

 

 

1

 

 

 

12

 

 

 

(35

)

 

 

(46

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

$

4,527

 

 

$

4,614

 

 

$

17,937

 

 

$

17,119

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.23

 

 

$

0.23

 

 

$

0.90

 

 

$

0.86

 

Diluted

 

$

0.23

 

 

$

0.23

 

 

$

0.90

 

 

$

0.86

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

19,931

 

 

 

19,815

 

 

 

19,901

 

 

 

19,926

 

Diluted

 

 

20,046

 

 

 

19,968

 

 

 

20,043

 

 

 

20,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

$

0.17

 

 

$

0.15

 

 

$

0.66

 

 

$

1.60

 


Exhibit 99.1 Page 3 of 4




PETMED EXPRESS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


 

 

Year Ended

 

 

 

March 31,

 

 

 

2014

 

 

2013

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

17,972

 

 

$

17,165

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

867

 

 

 

1,091

 

Share based compensation

 

 

1,479

 

 

 

1,943

 

Deferred income taxes

 

 

(183

)

 

 

(76

)

Bad debt expense

 

 

95

 

 

 

56

 

(Increase) decrease in operating assets and increase (decrease) in liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(417

)

 

 

77

 

Inventories - finished goods

 

 

(4,126

)

 

 

(5,384

)

Prepaid income taxes

 

 

(54

)

 

 

199

 

Prepaid expenses and other current assets

 

 

(1,237

)

 

 

(1,279

)

Accounts payable

 

 

(686

)

 

 

(165

)

Accrued expenses and other current liabilities

 

 

(42

)

 

 

(499

)

Income taxes payable

 

 

(162

)

 

 

162

 

Net cash provided by operating activities

 

 

13,506

 

 

 

13,290

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Net change in investments

 

 

(84

)

 

 

(5,189

)

Purchases of property and equipment

 

 

(45

)

 

 

(626

)

Net cash provided by (used in) investing activities

 

 

(129

)

 

 

(5,815

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Dividends paid

 

 

(13,326

)

 

 

(31,972

)

Purchases of treasury stock

 

 

-

 

 

 

(3,865

)

Tax adjustment related to stock compensation

 

 

99

 

 

 

(284

)

Net cash used in financing activities

 

 

(13,227

)

 

 

(36,121

)

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

150

 

 

 

(28,646

)

Cash and cash equivalents, at beginning of year

 

 

18,155

 

 

 

46,801

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents, at end of year

 

$

18,305

 

 

$

18,155

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

$

10,727

 

 

$

10,140

 

 

 

 

 

 

 

 

 

 

Retirement of treasury stock

 

$

-

 

 

$

3,865

 

 

 

 

 

 

 

 

 

 

Dividends payable in accrued expenses

 

$

262

 

 

$

276

 



Exhibit 99.1 Page 4 of 4