PETS PetMed Express Inc

PetMed Express, Inc.
(Exact name of registrant as specified in its charter)

Florida

000-28827

65-0680967

(State or other jurisdiction
of incorporation)

(Commission
File Number)

(I.R.S. Employer
Identification No.)

1441 S.W. 29^th Avenue,  Pompano Beach, FL  33069

(Address of principal executive offices) (Zip Code)

(954) 979-5995

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

(d)

Exhibits.

99.1 – Press release dated January 20, 2015

Exhibit No.

Description

99.1

Press release dated January 20, 2015

PETMED EXPRESS, INC.

By:

/s/ Bruce S. Rosenbloom

Name:

Bruce S. Rosenbloom

Title:

Chief Financial Officer

Exhibit 99.1

PETMED EXPRESS D/B/A 1-800-PETMEDS ANNOUNCES ITS THIRD QUARTER

FINANCIAL RESULTS AND ITS $0.17 PER SHARE QUARTERLY DIVIDEND

Net Income Increased 5.6%

Gross Margins Increased 98 basis points

Pompano Beach, Florida, January 20, 2015 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended December 31, 2014. Net income was $4.8 million, or $0.24 diluted per share, for the quarter ended December 31, 2014, compared to net income of $4.5 million, or $0.23 diluted per share, for the quarter ended December 31, 2013, an increase to net income of 5.6%. Excluding a one-time charge for an IT-related discontinued project in the quarter ended September 30, 2014, net income for the nine months ended December 31, 2014 was $13.6 million, or $0.67 diluted per share, compared to net income of $13.4 million, or $0.67 diluted per share, for the nine months ended December 31, 2013, an increase to net income of 1.0%. The one-time IT-related discontinued project cost of $1.7 million was expensed in the September quarter. The after tax net impact of this charge was $1.1 million, or $0.05 diluted per share. There are no further charges expected in the future related to this discontinued project.

Net sales for the quarter ended December 31, 2014 were $49.3 million, compared to $50.1 million for the quarter ended December 31, 2013, a decrease of 1.6%. Net sales for the nine months ended December 31, 2014 were $179.4 million, compared to $184.8 million for the quarter ended December 31, 2013, a decrease of 2.9%. The Company’s online sales for the quarter ended December 31, 2014 were approximately 80% of all sales, compared to 79% for the same quarter the prior year.

Menderes Akdag, President and CEO, commented: “During the quarter we were able to increase gross profit margins and average order size. For the quarter ended December 31, 2014 our gross margins increased 98 basis points, which can be attributed to a shift in sales to higher margin items. Our average order size increased to $76 for the December quarter, compared to $72 for the same period in the prior year. For the quarter ended December 31, 2014, our operational expenses decreased by 51 basis points, mainly due to a reduction in advertising spending. Cash flow from operations was $29.5 million for the quarter ended December 31, 2014, compared to $17.7 million for the quarter ended December 31, 2013. For the remainder of Fiscal 2015 we are focusing on improving our marketing efforts to increase sales.”

The Board of Directors declared a quarterly dividend of $0.17 per share on the Company’s common stock. The dividend will be payable on February 13, 2015, to shareholders of record at the close of business on February 3, 2015. 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 January 20, 2015 until February 3, 2015 at 11:59 P.M. To access the replay, call (866) 430-8791 (toll free) or (203) 369-0938 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, 2014. 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

December 31,

March 31,

2014

2014

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

37,068

$

18,305

Short term investments - available for sale

15,579

15,539

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

1,352

1,761

Inventories - finished goods

21,613

35,727

Prepaid expenses and other current assets

1,280

1,761

Deferred tax assets

863

1,062

Prepaid income taxes

-

54

Total current assets

77,755

74,209

Noncurrent assets:

Prepaid expenses

-

1,996

Property and equipment, net

1,222

1,310

Intangible assets

860

860

Deferred tax assets

5

-

Total assets

$

79,842

$

78,375

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

3,876

$

5,768

Accrued expenses and other current liabilities

2,136

2,325

Income taxes payable

283

-

Total current liabilities

6,295

8,093

Deferred tax liabilities

-

65

Total liabilities

6,295

8,158

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; 20,263 and 20,190 shares issued and outstanding, respectively

20

20

Additional paid-in capital

2,735

1,578

Retained earnings

70,833

68,647

Accumulated other comprehensive loss

(50

)

(37

)

Total shareholders' equity

73,547

70,217

Total liabilities and shareholders' equity

$

79,842

$

78,375

Three Months Ended

Nine Months Ended

December 31,

December 31,

2014

2013

2014

2013

Sales

$

49,284

$

50,086

$

179,401

$

184,759

Cost of sales

32,184

33,197

120,070

124,605

Gross profit

17,100

16,889

59,331

60,154

Operating expenses:

General and administrative

4,946

5,106

16,202

16,484

Advertising

4,323

4,517

21,134

21,896

Discontinued project costs

-

-

1,714

-

Depreciation

165

219

487

697

Total operating expenses

9,434

9,842

39,537

39,077

Income from operations

7,666

7,047

19,794

21,077

Other income:

Interest income, net

50

46

138

141

Other, net

(4

)

(3

)

3

(5

)

Total other income

46

43

141

136

Income before provision for income taxes

7,712

7,090

19,935

21,213

Provision for income taxes

2,915

2,549

7,433

7,767

Net income

$

4,797

$

4,541

$

12,502

$

13,446

Net change in unrealized gain (loss) on short term investments

(20

)

9

(13

)

(36

)

Comprehensive income

$

4,777

$

4,550

$

12,489

$

13,410

Net income per common share:

Basic

$

0.24

$

0.23

$

0.62

$

0.68

Diluted

$

0.24

$

0.23

$

0.62

$

0.67

Weighted average number of common shares outstanding:

Basic

20,038

19,925

20,005

19,892

Diluted

20,162

20,079

20,133

20,042

Cash dividends declared per common share

$

0.17

$

0.17

$

0.51

$

0.49

Nine Months Ended

December 31,

2014

2013

Cash flows from operating activities:

Net income

$

12,502

$

13,446

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

Depreciation

487

697

Share based compensation

1,118

1,105

Discontinued project costs

1,714

-

Deferred income taxes

129

(84

)

Bad debt expense

66

75

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

Accounts receivable

343

(286

)

Inventories - finished goods

14,114

7,060

Prepaid income taxes

54

(165

)

Prepaid expenses and other current assets

763

(1,449

)

Accounts payable

(1,892

)

(2,411

)

Income taxes payable

283

(162

)

Accrued expenses and other current liabilities

(153

)

(152

)

Net cash provided by operating activities

29,528

17,674

Cash flows from investing activities:

Net change in investments

(53

)

(62

)

Purchases of property and equipment

(398

)

(39

)

Net cash used in investing activities

(451

)

(101

)

Cash flows from financing activities:

Dividends paid

(10,353

)

(9,914

)

Tax adjustment related to restricted stock

39

123

Net cash used in financing activities

(10,314

)

(9,791

)

Net increase in cash and cash equivalents

18,763

7,782

Cash and cash equivalents, at beginning of period

18,305

18,155

Cash and cash equivalents, at end of period

$

37,068

$

25,937

Supplemental disclosure of cash flow information:

Cash paid for income taxes

$

6,929

$

7,776

Dividends payable in accrued expenses

$

225

$

241