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 25, 2016

Exhibit No.

Description

99.1

Press release dated January 25, 2016

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 $0.18 PER SHARE QUARTERLY DIVIDEND

Third Quarter New Order Sales Increased 6.8%

Third Quarter Sales Increased 3.3%

Pompano Beach, Florida, January 25, 2016 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended December 31, 2015. Net sales for the quarter ended December 31, 2015 were $50.9 million, compared to $49.3 million for the quarter ended December 31, 2014, an increase of 3.3%. Net sales for the nine months ended December 31, 2015 were $179.3 million, compared to $179.4 million for the nine months ended December 31, 2014. The increase in sales for the quarter ended December 31, 2015 can be attributed to increased new order sales, which increased 6.8%, and reorders sales, which increased 2.8%. Net income for the quarter ended December 31, 2015 was $4.9 million, or $0.24 diluted per share, compared to net income of $4.8 million, or $0.24 diluted per share, for the quarter ended December 31, 2014, a 1.9% increase to net income. Excluding a one-time charge for an IT-related discontinued project in the nine months ended December 31, 2014, net income for the nine months ended December 31, 2015 was $15.1 million, or $0.75 diluted per share, compared to net income of $13.6 million, or $0.67 diluted per share, for the nine months ended December 31, 2014, a 12% increase to net income. This one-time IT-related discontinued project cost of $1.7 million was expensed in the quarter ended September 30, 2014. The after tax net impact of this charge was $1.1 million, or $0.05 diluted per share. Online sales for the quarter ended December 31, 2015 increased 5.4% to $41.5 million from $39.3 million for the same period the prior year. The Company’s online sales for the quarter ended December 31, 2015 were approximately 81% of all sales, compared to 80% for the same quarter the prior year.

Menderes Akdag, CEO and President, commented: “Helped in part by the unseasonably warm weather in the December quarter we saw increases in both new order and reorder sales. Our average order size increased to $78 for the quarter ended December 31, 2015, compared to $76 for the same quarter in the prior year. We were also encouraged with our advertising efficiency, as our new customer acquisition costs were reduced to $41 for the quarter ended December 31, 2015 compared to $45 for the same quarter in the prior year. We are pleased to announce that on January 19, 2016 we completed the purchase of property located in Delray Beach, FL. The property is approximately 14.6 acres consisting of two buildings totaling approximately 185,000 sqft. We intend to occupy approximately 97,000 sqft for our corporate headquarters and distribution center later this year.”

The Board of Directors declared a quarterly dividend of $0.18 per share on the Company’s common stock. The dividend will be payable on February 19, 2016, to shareholders of record at the close of business on February 8, 2016. 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 25, 2016 until February 8, 2016 at 11:59 P.M. To access the replay, call (866) 403-7099 (toll free) or (203) 369-0571 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, 2015. 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,

2015

2015

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

47,129

$

35,613

Short term investments - available for sale

15,608

15,591

Accounts receivable, less allowance for doubtful accounts of $10 and $8, respectively

1,365

1,931

Inventories - finished goods

18,861

25,068

Prepaid expenses and other current assets

2,275

1,380

Deferred tax assets

848

817

Prepaid income taxes

334

-

Total current assets

86,420

80,400

Noncurrent assets:

Property and equipment, net

1,202

1,569

Intangible assets

860

860

Deferred tax assets

101

23

Total assets

$

88,583

$

82,852

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

5,365

$

5,153

Accrued expenses and other current liabilities

2,343

2,214

Income taxes payable

-

50

Total liabilities

7,708

7,417

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; 20,327 and 20,262 shares issued and outstanding, respectively

20

20

Additional paid-in capital

4,398

3,117

Retained earnings

76,535

72,343

Accumulated other comprehensive loss

(87

)

(54

)

Total shareholders' equity

80,875

75,435

Total liabilities and shareholders’ equity

$

88,583

$

82,852

Three Months Ended

Nine Months Ended

December 31,

December 31,

2015

2014

2015

2014

Sales

$

50,933

$

49,284

$

179,292

$

179,401

Cost of sales

34,179

32,184

120,659

120,070

Gross profit

16,754

17,100

58,633

59,331

Operating expenses:

General and administrative

4,977

4,946

16,164

16,202

Advertising

3,988

4,323

18,122

21,134

Discontinued project costs

-

-

-

1,714

Depreciation

167

165

544

487

Total operating expenses

9,132

9,434

34,830

39,537

Income from operations

7,622

7,666

23,803

19,794

Other income:

Interest income, net

55

50

160

138

Other, net

(4

)

(4

)

(12

)

3

Total other income

51

46

148

141

Income before provision for income taxes

7,673

7,712

23,951

19,935

Provision for income taxes

2,783

2,915

8,802

7,433

Net income

$

4,890

$

4,797

$

15,149

$

12,502

Net change in unrealized loss on short term investments

(14

)

(20

)

(33

)

(13

)

Comprehensive income

$

4,876

$

4,777

$

15,116

$

12,489

Net income per common share:

Basic

$

0.24

$

0.24

$

0.75

$

0.62

Diluted

$

0.24

$

0.24

$

0.75

$

0.62

Weighted average number of common shares outstanding:

Basic

20,145

20,038

20,115

20,005

Diluted

20,251

20,162

20,232

20,133

Cash dividends declared per common share

$

0.18

$

0.17

$

0.54

$

0.51

Nine Months Ended

December 31,

2015

2014

Cash flows from operating activities:

Net income

$

15,149

$

12,502

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

Depreciation

544

487

Share based compensation

1,189

1,118

Discontinued project costs

-

1,714

Deferred income taxes

(109

)

129

Bad debt expense

243

66

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

Accounts receivable

323

343

Inventories - finished goods

6,207

14,114

Prepaid income taxes

(334

)

54

Prepaid expenses and other current assets

(895

)

763

Accounts payable

212

(1,892

)

Income taxes payable

(50

)

283

Accrued expenses and other current liabilities

156

(153

)

Net cash provided by operating activities

22,635

29,528

Cash flows from investing activities:

Net change in investments

(50

)

(53

)

Purchases of property and equipment

(177

)

(398

)

Net cash used in investing activities

(227

)

(451

)

Cash flows from financing activities:

Dividends paid

(10,984

)

(10,353

)

Tax adjustment related to restricted stock

92

39

Net cash used in financing activities

(10,892

)

(10,314

)

Net increase in cash and cash equivalents

11,516

18,763

Cash and cash equivalents, at beginning of period

35,613

18,305

Cash and cash equivalents, at end of period

$

47,129

$

37,068

Supplemental disclosure of cash flow information:

Cash paid for income taxes

$

9,203

$

6,929

Dividends payable in accrued expenses

$

185

$

225