Category: Pharmaceuticals

PetMed Express, Inc. D/B/A 1-800-PETMEDS Announces Its Financial Results for Fiscal 2017 and Its Quarterly Dividend Raised to $0.20 Per Share

Fourth Quarter Net Income Increased 38% 
Fourth Quarter New Order Sales Increased 17%
Fourth Quarter Net Sales Increased 14%
 
DELRAY BEACH, Fla., May 08, 2017 -- PetMed Express, Inc. (NASDAQ:PETS) today announced its financial results for the fiscal year ended March 31, 2017.  Net sales for the quarter ended March 31, 2017 were $63.0 million, compared to $55.4 million for the quarter ended March 31, 2016, an increase of 14%.  For the fiscal year ended March 31, 2017 net sales were $249.2 million, compared to $234.7 million for the fiscal year ended March 31, 2016, an increase of 6.2%.  The increase in sales for the quarter ended March 31, 2017 can be attributed to a 17% increase in new order sales, and a 13% increase in reorder sales. 
 Net income for the quarter ended March 31, 2017 was $7.5 million, or $0.37 diluted per share, compared to net income of $5.4 million, or $0.27 diluted per share, for the same quarter the prior year, an increase to net income of 38%.  Net income for the fiscal year ended March 31, 2017 was $23.8 million, or $1.17 diluted per share, compared to net income of $20.6 million, or $1.02 diluted per share, for the fiscal year ended March 31, 2016, an increase to net income of 16%.  The Company’s online sales for the quarter ended March 31, 2017 were approximately 83% of all sales, compared to 82% for the same quarter the prior year.
 
Menderes Akdag, President and CEO, commented: “We were encouraged with increases in both new order and reorder sales during the quarter, along with an accelerated increase to net income.  This increase to net income can be attributed to increased gross profit margins in the March quarter.  Gross profit as a percentage of sales increased to 35.1% for the quarter ended March 31, 2017, compared to 31.9% for the quarter ended March 31, 2016.  The increase to gross profit margin can be attributed to a product mix shift to higher margin items.  During the March quarter we acquired approximately 126,000 new customers, compared to 116,000 new customers acquired in the same quarter the prior year.  Average order value was $86 for the March quarter compared to $83 for the same quarter the prior year.  Cash flow from operations was $47.2 million for the fiscal year ended March 31, 2017, compared to $21.1 million for the fiscal year ended March 31, 2016, with the majority of the increase due to an increase in accounts payable balance and a reduction in inventory, in addition to an increase in net income.  In fiscal 2018, we will look to build on past successes by focusing on continuing to increase sales and improve our service levels.”
 
The Board of Directors declared an increased quarterly dividend of $0.20 per share on its common stock.  The dividend will be payable on May 26, 2017, to shareholders of record at the close of business on May 19, 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 year-end financial results.  To access the call which is open to the public, 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 May 8, 2017 until May 22, 2017 at 11:59 P.M.  To access the replay, call (800) 793-2386 (toll free) or (402) 280-1611 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, 2016.  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
CONSOLIDATED BALANCE SHEETS
(In thousands)
           
    March 31,   March 31,
     2017    2016
         
ASSETS        
         
Current assets:        
Cash and cash equivalents   $   58,730   $   37,639
Accounts receivable, less allowance for doubtful accounts of $27 and $13, respectively     1,808       1,724
Inventories - finished goods       20,228       25,586
Prepaid expenses and other current assets       1,019       2,435
Prepaid income taxes       -        243
Total current assets       81,785       67,627
         
Noncurrent assets:        
Property and equipment, net       30,164       20,929
Intangible assets       860       860
Deferred tax assets       -        863
Total noncurrent assets       31,024       22,652
         
Total assets   $  112,809   $   90,279
         
LIABILITIES AND SHAREHOLDERS' EQUITY        
         
Current liabilities:        
Accounts payable   $   15,221   $   5,004
Accrued expenses and other current liabilities       2,475       2,080
Income taxes payable       659       - 
         
Total current liabilities       18,355       7,084
         
Deferred tax liabilities       1,088       - 
         
Total liabilities       19,443       7,084
         
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; 20,526 and 20,447 shares issued and outstanding, respectively     21       20
Additional paid-in capital       6,806       4,871
Retained earnings       86,530       78,295
         
Total shareholders' equity       93,366       83,195
         
Total liabilities and shareholders' equity   $  112,809   $   90,279

 

 PETMED EXPRESS, INC. AND SUBSIDIARIES 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
 (In thousands, except for per share amount) 
                 
     Three Months Ended     Year Ended 
     March 31,     March 31, 
     2017    2016    2017    2016  
     (UNAUDITED)         
Sales   $   63,032   $   55,392     $  249,176   $  234,684  
Cost of sales       40,877       37,729         169,862       158,388  
                 
Gross profit       22,155       17,663         79,314       76,296  
                 
Operating expenses:                
General and administrative       5,593       5,137         22,799       21,301  
Advertising       4,351       3,715         17,663       21,837  
Depreciation       514       226         1,369       770  
Total operating expenses       10,458       9,078         41,831       43,908  
                 
Income from operations       11,697       8,585         37,483       32,388  
                 
Other income (expense):                
Interest income, net       45       30         141       190  
Realized loss on sale of short term investments       -        (74 )       -        (74 )
Other, net       94       75         300       63  
Total other income       139       31         441       179  
                 
Income before provision for income taxes       11,836       8,616         37,924       32,567  
                 
Provision for income taxes       4,333       3,198         14,105       12,000  
                 
Net income   $   7,503   $   5,418     $   23,819   $   20,567  
                 
                 
Net change in unrealized gain on short and long term investments     -        87         -        54  
                           
Comprehensive income   $   7,503   $   5,505     $   23,819   $   20,621  
                 
Net income per common share:                
Basic   $   0.37   $   0.27     $   1.18   $   1.02  
Diluted   $   0.37   $   0.27     $   1.17   $   1.02  
                 
Weighted average number of common shares outstanding:                
Basic       20,260       20,152         20,232       20,124  
Diluted       20,392       20,322         20,378       20,254  
                 
Cash dividends declared per common share   $   0.19   $   0.18     $   0.76   $   0.72  

 

PETMED EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
     Year Ended 
     March 31, 
    2017   2016
Cash flows from operating activities:        
Net income   $   23,819     $   20,567  
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation       1,369         770  
Share based compensation       1,935         1,612  
Deferred income taxes       1,951         (23 )
Bad debt expense       421         260  
(Increase) decrease in operating assets and increase (decrease) in liabilities:        
Accounts receivable       (505 )       (53 )
Inventories - finished goods       5,358         (518 )
Prepaid income taxes       243         (243 )
Prepaid expenses and other current assets       1,416         (1,055 )
Accounts payable       10,217         (149 )
Accrued expenses and other current liabilities       321         (65 )
Income taxes payable       659         (50 )
Net cash provided by operating activities       47,204         21,053  
         
Cash flows from investing activities:        
Proceeds from the sale of short term investments       -          15,591  
Net change in investments       -          54  
Purchases of property and equipment       (10,604 )       (20,130 )
Net cash used in investing activities       (10,604 )       (4,485 )
         
Cash flows from financing activities:        
Dividends paid       (15,509 )       (14,684 )
Excess tax benefit related to stock compensation       -          142  
Net cash used in financing activities       (15,509 )       (14,542 )
         
Net increase in cash and cash equivalents       21,091         2,026  
Cash and cash equivalents, at beginning of year       37,639         35,613  
         
Cash and cash equivalents, at end of year   $   58,730     $   37,639  
         
Supplemental disclosure of cash flow information:        
         
Cash paid for income taxes   $   11,373     $   12,173  
                 
Dividends payable in accrued expenses   $   217     $  143  
                 

  

For investment relations contact PetMed Express, Inc., Bruce S. Rosenbloom, CFO, 561-526-4444
 

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