PetMed Express d/b/a 1-800-PetMeds Announces Its Second Fiscal Quarter Financial Results and Its Quarterly Dividend of $0.28 per Share

Diluted EPS $0.42 vs $0.33 per share 
Quarterly Reorder Sales Increased 9.6%
Gross Margins Improved Sequentially from 27.8% to 30.5%

DELRAY BEACH, Fla., Oct. 26, 2020 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended September 30, 2020. Net sales for the quarter ended September 30, 2020 were $75.4 million, compared to $69.9 million for the quarter ended September 30, 2019, an increase of 7.9%. Net sales for the six months ended September 30, 2020 were $171.6 million, compared to $149.9 million for the six months ended September 30, 2019, an increase of 14.5%. Net income was $8.4 million, or $0.42 diluted per share, for the quarter ended September 30, 2020, compared to net income of $6.7 million, or $0.33 diluted per share, for the quarter ended September 30, 2019, a 26.2% increase to net income. Net income was $16.2 million, or $0.81 diluted per share, for the six months ended September 30, 2020, compared to net income of $12.0 million, or $0.60 diluted per share, for the six months ended September 30, 2019, a 34.7% increase to net income. Reorder sales increased 9.6%, to $67.8 million for the quarter ended September 30, 2020, compared to $61.9 million for the same quarter in the prior year. Reorder sales increased 14.4%, to $148.2 million for the six months ended September 30, 2020, compared to $129.6 million for the same period in the prior year.

Menderes Akdag, CEO and President, commented: “We were encouraged with the strength of our reorder sales and gross and operating margins during the quarter. Gross margins improved by 270 basis points from 27.8% in the June quarter to 30.5% in the September quarter, and operating margins improved by 400 basis points from 9.8% in the June quarter to 13.9% in the September quarter. The sequential gross margin increase can be attributed to a change in our product mix, with a shift to higher margin prescription medications. The gross margin increase for the three and six months ended September 30, 2020 was also due to the benefit of having direct relationships with all major manufacturers and the enforcement of their minimum advertised price policies. Our average order size increased from $85 to $87 for the quarters ended September 30, 2019 and 2020, respectively. In fiscal 2021, we are focusing on redesigning our website and mobile app to optimize our customers’ digital experience.”

The Board of Directors declared a quarterly dividend of $0.28 per share on the Company’s common stock. The dividend will be payable on November 20, 2020, to shareholders of record at the close of business on November 9, 2020. 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, 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 (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 October 26, 2020 until November 9, 2020 at 11:59 P.M Eastern Time. To access the replay, call (800) 337-8653 (toll free) or (402) 220-9669, and enter passcode 5500.

Founded in 1996, PetMed Express is America’s Largest and 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.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, 2020. 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.


PETMED EXPRESS, INC. AND SUBSIDIARIES    
CONDENSED CONSOLIDATED BALANCE SHEETS 
(In thousands, except for per share data)    
      
  September 30,
 March 31, 
  2020 2020 
        
ASSETS (Unaudited)
   
        
Current assets:       
Cash and cash equivalents$106,344  $103,762 
Accounts receivable, less allowance for doubtful       
accounts of $34 and $59, respectively 2,212   3,843 
Inventories - finished goods 21,451   17,884 
Prepaid expenses and other current assets 2,613   3,529 
Total current assets 132,620   129,018 
        
Noncurrent assets:       
Property and equipment, net 25,469   25,445 
Intangible assets 860   860 
Total noncurrent assets 26,329   26,305 
        
Total assets$158,949  $155,323 
        
LIABILITIES AND SHAREHOLDERS' EQUITY       
        
Current liabilities:       
Accounts payable$16,058  $19,658 
Accrued expenses and other current liabilities 4,486   4,214 
Income taxes payable 618   471 
Total current liabilities 21,162   24,343 
        
Deferred tax liabilities 1,378   970 
        
Total liabilities 22,540   25,313 
        
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;       
20,272 and 20,166 shares issued and outstanding, respectively 20   20 
Additional paid-in capital 5,317   3,804 
Retained earnings 131,063   126,177 
        
Total shareholders' equity 136,409   130,010 
        
Total liabilities and shareholders' equity$158,949  $155,323 




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,
   2020  2019  2020  2019 
              
Sales $75,436 $69,936 $171,640 $149,924 
Cost of sales  52,418  49,934  121,837  108,061 
              
Gross profit  23,018  20,002  49,803  41,863 
              
Operating expenses:             
General and administrative  6,809  6,303  14,563  12,811 
Advertising  5,131  4,756  14,164  13,380 
Depreciation  607  572  1,169  1,140 
Total operating expenses  12,547  11,631  29,896  27,331 
              
Income from operations  10,471  8,371  19,907  14,532 
              
Other income:             
Interest income, net  66  459  156  1,026 
Other, net  338  304  593  561 
Total other income  404  763  749  1,587 
              
Income before provision for income taxes  10,875  9,134  20,656  16,119 
              
Provision for income taxes  2,463  2,469  4,476  4,111 
              
Net income $8,412 $6,665 $16,180 $12,008 
              
Net income per common share:             
Basic $0.42 $0.33 $0.81 $0.60 
Diluted $0.42 $0.33 $0.81 $0.60 
              
Weighted average number of common shares outstanding:             
Basic  20,063  19,963  20,024  20,098 
Diluted  20,154  19,973  20,098  20,109 
              
Cash dividends declared per common share $0.28 $0.27 $0.56 $0.54 




PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
      
   Six Months Ended
   September 30,
  2020   2019 
Cash flows from operating activities:     
Net income$16,180  $12,008 
Adjustments to reconcile net income to net cash      
provided by operating activities:     
Depreciation 1,169   1,140 
Share based compensation 1,513   1,365 
Deferred income taxes 408   274 
Bad debt expense 61   64 
(Increase) decrease in operating assets     
and increase (decrease) in liabilities:     
Accounts receivable 1,570   1,012 
Inventories - finished goods (3,567)  2,309 
Prepaid income taxes -   582 
Prepaid expenses and other current assets 916   (1,433)
Accounts payable (3,600)  (1,120)
Accrued expenses and other current liabilities 391   568 
Income taxes payable 147   525 
Net cash provided by operating activities 15,188   17,294 
      
Cash flows from investing activities:     
Purchases of property and equipment (1,193)  (416)
Net cash used in investing activities (1,193)  (416)
      
Cash flows from financing activities:     
Repurchase and retirement of common stock -   (11,496)
Dividends paid (11,413)  (11,014)
Net cash used in financing activities (11,413)  (22,510)
      
Net increase (decrease) in cash and cash equivalents 2,582   (5,632)
Cash and cash equivalents, at beginning of period 103,762   100,529 
      
Cash and cash equivalents, at end of period$106,344  $94,897 
      
Supplemental disclosure of cash flow information:      
      
Cash paid for income taxes$4,206  $2,730 
      
Dividends payable in accrued expenses$126  $155 

 

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