PetMed Express D/B/A 1-800-PetMeds Announces its Second Quarter Financial Results

|GlobeNewswire|About: PETS

Second Quarter Net Income Increased 23%
Second Quarter Reorder Sales Increased 11%
Second Quarter Diluted EPS $0.52 per share vs $0.43 per share

DELRAY BEACH, Fla., Oct. 22, 2018 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (PETS) today announced its financial results for the quarter ended September 30, 2018.  Net sales for the quarter ended September 30, 2018 were $71.4 million, compared to $66.7 million for the quarter ended September 30, 2017, an increase of 7.0%.  Net sales for the six months ended September 30, 2018 were $158.8 million, compared to $146.4 million for the six months ended September 30, 2017, an increase of 8.5%.  Net income was $10.8 million, or $0.52 diluted per share, for the quarter ended September 30, 2018, compared to net income of $8.8 million, or $0.43 diluted per share, for the quarter ended September 30, 2017, a 23% increase to net income.  Net income for the six months ended September 30, 2018 was $23.3 million, or $1.14 diluted per share, compared to net income of $18.0 million, or $0.88 diluted per share, for the six months ended September 30, 2017, a 29% increase to net income. Reorder sales increased 11%, to $61.0 million for the quarter ended September 30, 2018, compared to $55.1 million for the same quarter in the prior year.  The Company’s online sales for the quarter ended September 30, 2018 were approximately 85% of all sales compared to 84% for the same quarter the prior year, with online sales increasing 7.4%. 

Menderes Akdag, CEO and President, commented: “We were pleased with our net income and reorder sales growth for the quarter. The increase to net income for the quarter can be attributed to increased revenues, which increased gross profit by approximately $1.8 million.  In addition, our net income growth was boosted by the Tax Reform Act of 2017, due to a decline in our federal tax rate from 35% to 21%.  We expect our effective tax rate in fiscal 2019 to be approximately 24%.  Average order value increased to $87 for the quarter compared to $85 for the same quarter the prior year.  Net cash from operations for the quarter ended September 30, 2018 was $20.4 million, compared to $18.3 million for the same period last year.   For the remainder of fiscal 2019 we will continue to focus on sales growth and improving our service levels.”

The Board of Directors declared a quarterly dividend of $0.27 per share on the Company’s common stock.  The dividend will be payable on November 16, 2018, to shareholders of record at the close of business on November 5, 2018.  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 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 22, 2018 until November 5, 2018 at 11:59 P.M.  To access the replay, call (886) 457-5505 (toll free) or (203) 369-1279, 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, 2018.  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)
         
    September 30,   March 31,
    2018   2018
ASSETS   (Unaudited)    
         
Current assets:        
Cash and cash equivalents $ 87,132 $ 77,936
Accounts receivable, less allowance for doubtful accounts of $37 and $35, respectively   1,786   2,292
Inventories - finished goods   28,616   23,337
Prepaid expenses and other current assets   976   882
Prepaid income taxes   618   788
Total current assets   119,128   105,235
         
Noncurrent assets:        
Property and equipment, net   28,083   28,741
Intangible assets   860   860
Total noncurrent assets   28,943   29,601
         
Total assets $ 148,071 $ 134,836
         
LIABILITIES AND SHAREHOLDERS' EQUITY        
         
Current liabilities:        
Accounts payable $ 14,278 $ 15,274
Accrued expenses and other current liabilities   2,767   2,835
Total current liabilities   17,045   18,109
         
Deferred tax liabilities   1,185   996
         
Total liabilities   18,230   19,105
         
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;        
20,674 and 20,601 shares issued and outstanding, respectively   21   21
Additional paid-in capital   10,881   9,381
Retained earnings   118,930   106,320
         
Total shareholders' equity   129,841   115,731
         
Total liabilities and shareholders' equity $ 148,071 $ 134,836
         


 
 PETMED EXPRESS, INC. AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
 (In thousands, except for per share amounts) (Unaudited) 
                 
     Three Months Ended     Six Months Ended 
     September 30,     September 30, 
    2018   2017   2018   2017
                 
Sales $ 71,396 $ 66,711 $ 158,786 $ 146,368
Cost of sales   46,141   43,232   103,577   95,424
                 
Gross profit   25,255   23,479   55,209   50,944
                 
Operating expenses:                
General and administrative   6,200   6,178   13,134   12,404
Advertising   5,300   4,526   12,007   10,818
Depreciation   552   527   1,108   1,058
Total operating expenses   12,052   11,231   26,249   24,280
                 
Income from operations   13,203   12,248   28,960   26,664
                 
Other income:                
Interest income, net   428   143   807   226
Other, net   255   249   572   490
Total other income   683   392   1,379   716
                 
Income before provision for income taxes   13,886   12,640   30,339   27,380
                 
Provision for income taxes   3,134   3,880   7,005   9,344
                 
Net income $ 10,752 $ 8,760 $ 23,334 $ 18,036
                 
Comprehensive income $ 10,752 $ 8,760 $ 23,334 $ 18,036
                 
Net income per common share:                
Basic $ 0.53 $ 0.43 $ 1.14 $ 0.89
Diluted $ 0.52 $ 0.43 $ 1.14 $ 0.88
                 
Weighted average number of common shares outstanding:            
Basic   20,463   20,349   20,436   20,321
Diluted   20,520   20,437   20,485   20,442
                 
Cash dividends declared per common share $ 0.27 $ 0.20 $ 0.52 $ 0.40
                 

 

   
PETMED EXPRESS, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
 (In thousands) (Unaudited)   
   
     Six Months Ended   
     September 30,   
    2018     2017    
Cash flows from operating activities:          
Net income $ 23,334   $ 18,036    
Adjustments to reconcile net income to net cash          
provided by operating activities:          
Depreciation   1,108     1,058    
Share based compensation   1,500     1,146    
Deferred income taxes   189     216    
Bad debt expense   49     46    
(Increase) decrease in operating assets          
and increase (decrease) in liabilities:          
Accounts receivable   457     (250 )  
Inventories - finished goods   (5,279 )   (2,777 )  
Prepaid income taxes   170     -    
Prepaid expenses and other current assets   (94 )   (87 )  
Accounts payable   (996 )   (4,845 )  
Income taxes payable   -     5,349    
Accrued expenses and other current liabilities   (36 )   411    
Net cash provided by operating activities   20,402     18,303    
           
Cash flows from investing activities:          
Purchases of property and equipment   (450 )   (350 )  
Net cash used in investing activities   (450 )   (350 )  
           
Cash flows from financing activities:          
Dividends paid   (10,756 )   (8,240 )  
Net cash used in financing activities   (10,756 )   (8,240 )  
           
Net increase in cash and cash equivalents   9,196     9,713    
Cash and cash equivalents, at beginning of period   77,936     58,730    
           
Cash and cash equivalents, at end of period $ 87,132   $ 68,443    
           
Supplemental disclosure of cash flow information:          
           
Cash paid for income taxes $ 6,645   $ 3,780    
           
Dividends payable in accrued expenses $ 207   $ 202    
           

Source: PetMed Express, Inc. 2018 GlobeNewswire, Inc.