PetMed Express D/B/A 1-800-PetMeds Announces Record First Quarter Financial Results
July 24 2017 - 8:00AM
First Quarter Net Income Increased
41%First Quarter New Order Sales Increased
14%First Quarter Online Sales Increased
12%
PetMed Express, Inc. (NASDAQ:PETS) today announced its financial
results for the quarter ended June 30, 2017. Net income was
$9.3 million, or $0.45 diluted per share, for the quarter ended
June 30, 2017, compared to net income of $6.6 million, or $0.32
diluted per share, for the quarter ended June 30, 2016, a 41%
increase to net income. Net sales for the quarter ended June
30, 2017 were $79.7 million, compared to $72.5 million for the
quarter ended June 30, 2016, an increase of 10%. New order
sales increased 14%, to $15.2 million for the quarter ended June
30, 2017, compared to $13.3 million for the same quarter in the
prior year. The Company’s online sales for the quarter ended
June 30, 2017 were approximately 84% of all sales compared to 82%
for the same quarter the prior year, with online sales increasing
12%.
Menderes Akdag, CEO and President, commented:
“We were encouraged with increases in both new order and reorder
sales during the quarter, along with an accelerated increase to net
income for the second consecutive quarter. This increase to
net income can be attributed to increased revenue with a shift in
sales to higher margin items. Gross profit as a percentage of
sales increased to 34.5% for the quarter ended June 30, 2017,
compared to 31.0% for the quarter ended June 30, 2016. During
the quarter ended June 30, 2017, we acquired approximately 169,000
new customers, compared to 158,000 new customers acquired in the
same quarter the prior year. Average order value increased to
$87 for the quarter compared to $82 for the same quarter the prior
year. For the remainder of fiscal 2018 we will continue to
focus on increasing sales and improving our service levels.”
The Board of Directors declared a quarterly
dividend of $0.20 per share on the Company’s common stock.
The dividend will be payable on August 18, 2017, to shareholders of
record at the close of business on August 7, 2017. 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 July 24, 2017 until August
7, 2017 at 11:59 P.M. To access the replay, call (866)
431-7851 (toll free) or (203) 369-0968, 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, 2017. 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) |
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
|
|
March 31, |
|
|
2017 |
|
|
|
|
2017 |
ASSETS |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
68,525 |
|
|
|
$ |
58,730 |
Accounts
receivable, less allowance for doubtful |
|
|
|
|
|
|
|
accounts
of $31 and $27, respectively |
|
2,059 |
|
|
|
|
1,808 |
Inventories - finished goods |
|
23,032 |
|
|
|
|
20,228 |
Prepaid
expenses and other current assets |
|
1,513 |
|
|
|
|
1,019 |
Total
current assets |
|
95,129 |
|
|
|
|
81,785 |
|
|
|
|
|
|
|
|
Noncurrent assets: |
|
|
|
|
|
|
|
Property
and equipment, net |
|
29,676 |
|
|
|
|
30,164 |
Intangible assets |
|
860 |
|
|
|
|
860 |
Total
noncurrent assets |
|
30,536 |
|
|
|
|
31,024 |
|
|
|
|
|
|
|
|
Total
assets |
$ |
125,665 |
|
|
|
$ |
112,809 |
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts
payable |
$ |
16,205 |
|
|
|
$ |
15,221 |
Accrued
expenses and other current liabilities |
|
3,217 |
|
|
|
$ |
2,475 |
Income
taxes payable |
|
6,227 |
|
|
|
|
659 |
Total
current liabilities |
|
25,649 |
|
|
|
|
18,355 |
|
|
|
|
|
|
|
|
Deferred
tax liabilities |
|
985 |
|
|
|
|
1,088 |
|
|
|
|
|
|
|
|
Total
liabilities |
|
26,634 |
|
|
|
|
19,443 |
|
|
|
|
|
|
|
|
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; |
|
|
|
|
|
|
|
20,525
and 20,526 shares issued and outstanding, respectively |
|
21 |
|
|
|
|
21 |
Additional paid-in capital |
|
7,300 |
|
|
|
|
6,806 |
Retained
earnings |
|
91,701 |
|
|
|
|
86,530 |
|
|
|
|
|
|
|
|
Total
shareholders' equity |
|
99,031 |
|
|
|
|
93,366 |
|
|
|
|
|
|
|
|
Total
liabilities and shareholders' equity |
$ |
125,665 |
|
|
|
$ |
112,809 |
|
|
|
|
|
|
|
|
PETMED EXPRESS, INC. AND
SUBSIDIARIES |
|
CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE
INCOME |
|
(In thousands, except
for per share amounts)
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
June
30, |
|
|
|
2017 |
|
2016 |
|
|
|
|
|
|
|
Sales |
$ |
79,657 |
$ |
72,487 |
|
Cost of sales |
|
52,192 |
|
50,035 |
|
|
|
|
|
|
|
Gross profit |
|
27,465 |
|
22,452 |
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
General and administrative |
|
6,226 |
|
6,098 |
|
Advertising |
|
6,292 |
|
5,760 |
|
Depreciation |
|
531 |
|
194 |
|
Total operating expenses |
|
13,049 |
|
12,052 |
|
|
|
|
|
|
|
Income from operations |
|
14,416 |
|
10,400 |
|
|
|
|
|
|
|
Other income: |
|
|
|
|
|
Interest income, net |
|
83 |
|
28 |
|
Other, net |
|
241 |
|
53 |
|
Total other income |
|
324 |
|
81 |
|
|
|
|
|
|
|
Income before provision for income taxes |
|
14,740 |
|
10,481 |
|
|
|
|
|
|
|
Provision for income taxes |
|
5,464 |
|
3,887 |
|
|
|
|
|
|
|
Net
income |
$ |
9,276 |
$ |
6,594 |
|
|
|
|
|
|
|
Comprehensive income |
$ |
9,276 |
$ |
6,594 |
|
|
|
|
|
|
|
Net
income per common share: |
|
|
|
|
|
Basic |
$ |
0.46 |
$ |
0.33 |
|
Diluted |
$ |
0.45 |
$ |
0.32 |
|
|
|
|
|
|
|
Weighted average number of common shares
outstanding: |
|
|
|
|
|
Basic |
|
20,293 |
|
20,181 |
|
Diluted |
|
20,448 |
|
20,333 |
|
|
|
|
|
|
|
Cash dividends declared per common share |
$ |
0.20 |
$ |
0.19 |
|
|
|
|
|
|
|
PETMED EXPRESS, INC. AND
SUBSIDIARIES |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
(In thousands)
(Unaudited) |
|
|
|
|
|
Three Months
Ended |
|
|
|
June
30, |
|
|
|
2017 |
|
|
2016 |
|
|
Cash flows from operating activities: |
|
|
|
|
|
Net income |
$ |
9,276 |
|
$ |
6,594 |
|
|
Adjustments to reconcile net income to net cash |
|
|
|
|
|
provided by operating activities: |
|
|
|
|
|
Depreciation |
|
531 |
|
|
194 |
|
|
Share based compensation |
|
494 |
|
|
463 |
|
|
Deferred income taxes |
|
(104 |
) |
|
(44 |
) |
|
Bad debt expense |
|
28 |
|
|
233 |
|
|
(Increase) decrease in operating assets |
|
|
|
|
|
and increase in liabilities: |
|
|
|
|
|
Accounts receivable |
|
(279 |
) |
|
(584 |
) |
|
Inventories - finished goods |
|
(2,804 |
) |
|
(1,440 |
) |
|
Prepaid income taxes |
|
(494 |
) |
|
243 |
|
|
Prepaid expenses and other current assets |
|
- |
|
|
1,143 |
|
|
Accounts payable |
|
984 |
|
|
2,277 |
|
|
Income taxes payable |
|
5,568 |
|
|
3,655 |
|
|
Accrued expenses and other current liabilities |
|
696 |
|
|
372 |
|
|
Net
cash provided by operating activities |
|
13,896 |
|
|
13,106 |
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
Purchases of property and equipment |
|
(43 |
) |
|
(2,604 |
) |
|
Net
cash used in investing activities |
|
(43 |
) |
|
(2,604 |
) |
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
Dividends paid |
|
(4,058 |
) |
|
(3,834 |
) |
|
Net
cash used in financing activities |
|
(4,058 |
) |
|
(3,834 |
) |
|
|
|
|
|
|
|
Net
increase in cash and cash equivalents |
|
9,795 |
|
|
6,668 |
|
|
Cash and cash equivalents, at beginning of period |
|
58,730 |
|
|
37,639 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, at end of period |
$ |
68,525 |
|
$ |
44,307 |
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
Cash paid for income taxes |
$ |
- |
|
$ |
55 |
|
|
|
|
|
|
|
|
Property and equipment in current assets |
$ |
- |
|
$ |
2,573 |
|
|
|
|
|
|
|
|
Dividends payable in accrued expenses |
$ |
263 |
|
$ |
194 |
|
|
|
|
|
|
|
|
For investment relations contact PetMed Express, Inc., Bruce S. Rosenbloom, CFO, 561-526-4444.
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