PetMed Express D/B/A 1-800-PetMeds Announces its Second Quarter Financial Results
October 22 2018 - 8:00AM
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
PetMed Express, Inc. (NASDAQ: 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 |
|
|
|
|
|
|
|
|
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