POMPANO BEACH, Fla., Jan. 22, 2013 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (Nasdaq:PETS) today announced its financial results for the quarter ended December 31, 2012. Net income was $4.6 million, or $0.23 diluted per share, for the quarter ended December 31, 2012, compared to net income of $3.9 million, or $0.19 diluted per share, for the quarter ended December 31, 2011, a 19% increase to EPS. Net income was $12.6 million, or $0.63 diluted per share, for the nine months ended December 31, 2012, compared to net income of $12.7 million, or $0.61 diluted per share, for the nine months ended December 31, 2011, a 3.2% increase to EPS. Net sales for the quarter ended December 31, 2012 were $49.6 million, compared to $50.5 million for the quarter ended December 31, 2011, a decrease of 1.8%. Net sales for the nine months ended December 31, 2012 were $176.7 million, compared to $182.3 million for the nine months ended December 31, 2011, a decrease of 3.1%. Online sales increased slightly for the quarter ended December 31, 2012, with approximately 78% of all sales being generated via the Internet, compared to 77% for the same period the prior year.
Menderes Akdag, President & CEO, commented: "We were able to increase our gross margins and decrease our operating expenses to improve our bottom line results this quarter. For the quarter ending December 31, 2012 our gross profit increased by 75 basis points, this increase can be attributed to a change in our product mix to higher margin items, including generics. For the quarter ending December 31, 2012 our operating expenses decreased by 170 basis points, mainly due to a reduction in advertising spending. The advertising costs of acquiring a new customer were reduced to $35 for the quarter ended December 31, 2012, compared to $36 for the same quarter the prior year. Cash from operation for the nine months ended December 31, 2012 increased 59% to $21.8 million, compared to $13.7 million for the same period the prior year. Although sales were slightly down during the quarter ended December 31, 2012, reorder sales increased by 1.2%. The unavailability of Novartis brands, due to the manufacturer's suspended production, continued to negatively impact our sales. Looking to the future, we will continue to focus on advertising efficiency to improve new order sales and shift sales to higher margin items, including generics, while continuing to expand our product offerings."
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. Eastern Time on January 22, 2013 until February 5, 2013 at 11:59 P.M. Eastern Time. To access the replay, call (800) 839-1163 (toll free) or (402) 998-1073, 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, 2012. 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.
| PETMED EXPRESS, INC. AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (In thousands) | ||
| December 31, | March 31, | |
| 2012 | 2012 | |
| (Unaudited) | ||
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 30,018 | $ 46,801 |
| Short term investments - available for sale | 15,455 | 10,347 |
| Accounts receivable, less allowance for doubtful accounts of $2 and $5, respectively | 744 | 1,572 |
| Inventories - finished goods | 18,719 | 26,217 |
| Prepaid expenses and other current assets | 1,578 | 1,241 |
| Deferred tax assets | 1,062 | 1,230 |
| Prepaid income taxes | -- | 199 |
| Total current assets | 67,576 | 87,607 |
| Property and equipment, net | 2,295 | 2,597 |
| Intangible asset | 860 | 860 |
| Total assets | $ 70,731 | $ 91,064 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 5,974 | $ 6,619 |
| Accrued expenses and other current liabilities | 2,194 | 2,772 |
| Income taxes payable | 246 | -- |
| Total current liabilities | 8,414 | 9,391 |
| Deferred tax liabilities | 247 | 492 |
| Total liabilities | 8,661 | 9,883 |
| 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; 20,001 and 20,338 shares issued and outstanding, respectively | 20 | 20 |
| Retained earnings | 62,055 | 81,108 |
| Accumulated other comprehensive (loss) gain | (14) | 44 |
| Total shareholders' equity | 62,070 | 81,181 |
| Total liabilities and shareholders' equity | $ 70,731 | $ 91,064 |
| PETMED EXPRESS, INC. AND SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | ||||
| (In thousands, except for per share amounts) (Unaudited) | ||||
| Three Months Ended | Nine Months Ended | |||
| December 31, | December 31, | |||
| 2012 | 2011 | 2012 | 2011 | |
| Sales | $ 49,609 | $ 50,523 | $ 176,709 | $ 182,326 |
| Cost of sales | 32,397 | 33,369 | 117,823 | 121,128 |
| Gross profit | 17,212 | 17,154 | 58,886 | 61,198 |
| Operating expenses: | ||||
| General and administrative | 5,147 | 5,244 | 16,440 | 16,952 |
| Advertising | 4,602 | 5,449 | 21,876 | 23,453 |
| Depreciation | 254 | 359 | 831 | 1,046 |
| Total operating expenses | 10,003 | 11,052 | 39,147 | 41,451 |
| Income from operations | 7,209 | 6,102 | 19,739 | 19,747 |
| Other income: | ||||
| Interest income, net | 141 | 70 | 264 | 228 |
| Other, net | (3) | (1) | (3) | 62 |
| Total other income | 138 | 69 | 261 | 290 |
| Income before provision for income taxes | 7,347 | 6,171 | 20,000 | 20,037 |
| Provision for income taxes | 2,770 | 2,273 | 7,437 | 7,372 |
| Net income | $ 4,577 | $ 3,898 | $ 12,563 | $ 12,665 |
| Net income per common share: | ||||
| Basic | $ 0.23 | $ 0.19 | $ 0.63 | $ 0.61 |
| Diluted | $ 0.23 | $ 0.19 | $ 0.63 | $ 0.61 |
| Weighted average number of common shares outstanding: | ||||
| Basic | 19,808 | 20,082 | 19,963 | 20,788 |
| Diluted | 19,923 | 20,180 | 20,077 | 20,886 |
| Comprehensive income | $ 4,494 | $ 3,907 | $ 12,505 | $ 12,816 |
| Cash dividends declared per common share | $ 1.150 | $ 0.125 | $ 1.450 | $ 0.375 |
| PETMED EXPRESS, INC. AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (In thousands) (Unaudited) | ||
| Nine Months Ended | ||
| December 31, | ||
| 2012 | 2011 | |
| Cash flows from operating activities: | ||
| Net income | $ 12,563 | $ 12,665 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation | 831 | 1,046 |
| Share based compensation | 1,496 | 1,686 |
| Deferred income taxes | (77) | (175) |
| Bad debt expense | 37 | 40 |
| (Increase) decrease in operating assets and increase (decrease) in liabilities: | ||
| Accounts receivable | 791 | 306 |
| Inventories - finished goods | 7,498 | (806) |
| Prepaid income taxes | 199 | 562 |
| Prepaid expenses and other current assets | (337) | (977) |
| Accounts payable | (645) | (182) |
| Accrued expenses and other current liabilities | (761) | (443) |
| Income taxes payable | 246 | -- |
| Net cash provided by operating activities | 21,841 | 13,722 |
| Cash flows from investing activities: | ||
| Net change in investments | (5,166) | 10,877 |
| Purchases of property and equipment | (529) | (624) |
| Net cash (used in) provided by investing activities | (5,695) | 10,253 |
| Cash flows from financing activities: | ||
| Dividends paid | (28,896) | (7,914) |
| Purchases of treasury stock | (3,865) | (23,685) |
| Tax adjustment related to restricted stock | (168) | (71) |
| Net cash used in financing activities | (32,929) | (31,670) |
| Net decrease in cash and cash equivalents | (16,783) | (7,695) |
| Cash and cash equivalents, at beginning of period | 46,801 | 49,660 |
| Cash and cash equivalents, at end of period | $ 30,018 | $ 41,965 |
| Supplemental disclosure of cash flow information: | ||
| Cash paid for income taxes | $ 7,237 | $ 7,056 |
| Dividends payable in accrued expenses | $ 351 | $ 167 |