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PetMed Express D/B/A 1-800-PetMeds Announces Its Third Quarter Financial Results

January 21, 2014

POMPANO BEACH, Fla. , Jan. 21, 2014 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (Nasdaq:PETS) today announced its financial results for the quarter ended December 31, 2013 . Net sales for the quarter ended December 31, 2013 were $50.1 million , compared to $49.6 million for the quarter ended December 31, 2012 , an increase of 1.0%. Net sales for the nine months ended December 31, 2013 were $184.8 million , compared to $176.7 million for the nine months ended December 31, 2012 , an increase of 4.6%. Net income was $4.5 million , or $0.23 diluted per share, for the quarter ended December 31, 2013 , compared to net income of $4.6 million , or the same $0.23 diluted per share, for the quarter ended December 31, 2012 . Net income was $13.4 million , or $0.67 diluted per share, for the nine months ended December 31, 2013 , compared to net income of $12.6 million , or $0.63 diluted per share, for the nine months ended December 31, 2012 , a 7.2% increase to EPS. Reorder sales increased by 3.6%, from $40.9 million to $42.4 million for the quarters ended December 31, 2012 and 2013, respectively. Additionally, the Company's online sales increased by 2.1% to $39.5 million for the quarter ended December 31, 2013 , compared to $38.7 million for the same quarter the prior year, with approximately 79% of all orders being generated from its website during the quarter compared to 78% for the same quarter the prior year. Menderes Akdag , CEO and President, commented: "We are pleased with the increased reorder sales for the quarter. Our sales increase for the quarter was also highlighted by an increased average order size - $72 for the quarter ended December 31, 2013 compared to $71 for the same quarter in the prior year. For the quarter ended December 31, 2013 our operating expenses decreased by 50 basis points. Going forward we are focusing on improving our gross profit margins and new order sales." 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 21, 2014 until February 4, 2014 at 11:59 P.M. To access the replay, call (800) 860-4709 (toll free) or (203) 369-3837, 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 , 2013. 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. PETMED EXPRESS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) December 31 , 2013 March 31 , 2013 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 25,937 $ 18,155 Short term investments - available for sale 15,516 15,490 Accounts receivable, less allowance for doubtful accounts of $6 and $5 , respectively 1,650 1,439 Inventories - finished goods 24,541 31,601 Prepaid expenses and other current assets 1,976 1,090 Deferred tax assets 997 982 Prepaid income taxes 165 -- Total current assets 70,782 68,757 Noncurrent assets: Prepaid expenses 1,993 1,430 Property and equipment, net 1,474 2,132 Intangible assets 860 860 Total noncurrent assets 4,327 4,422 Total assets $ 75,109 $ 73,179 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 4,043 $ 6,454 Accrued expenses and other current liabilities 2,194 2,381 Income taxes payable -- 162 Total current liabilities 6,237 8,997 Deferred tax liabilities 99 168 Total liabilities 6,336 9,165 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; 20,190 and 20,109 shares issued and outstanding, respectively 20 20 Additional paid-in capital 1,228 -- Retained earnings 67,554 63,987 Accumulated other comprehensive loss (38) (2) Total shareholders' equity 68,773 64,014 Total liabilities and shareholders' equity $ 75,109 $ 73,179 PETMED EXPRESS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands, except for per share amounts) (Unaudited) Three Months Ended December 31, Nine Months Ended December 31, 2013 2012 2013 2012 Sales $ 50,086 $ 49,609 $ 184,759 $ 176,709 Cost of sales 33,197 32,397 124,605 117,823 Gross profit 16,889 17,212 60,154 58,886 Operating expenses: General and administrative 5,106 5,147 16,484 16,440 Advertising 4,517 4,602 21,896 21,876 Depreciation 219 254 697 831 Total operating expenses 9,842 10,003 39,077 39,147 Income from operations 7,047 7,209 21,077 19,739 Other income: Interest income, net 46 141 141 264 Other, net (3) (3) (5) (3) Total other income 43 138 136 261 Income before provision for income taxes 7,090 7,347 21,213 20,000 Provision for income taxes 2,549 2,770 7,767 7,437 Net income $ 4,541 $ 4,577 $ 13,446 $ 12,563 Net change in unrealized gain (loss) on short term investments 9 (83) (36) (58) Comprehensive income $ 4,550 $ 4,494 $ 13,410 $ 12,505 Net income per common share: Basic $ 0.23 $ 0.23 $ 0.68 $ 0.63 Diluted $ 0.23 $ 0.23 $ 0.67 $ 0.63 Weighted average number of common shares outstanding: Basic 19,925 19,808 19,892 19,963 Diluted 20,079 19,923 20,042 20,077 Cash dividends declared per common share $ 0.17 $ 1.15 $ 0.49 $ 1.45 PETMED EXPRESS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Nine Months Ended December 31, 2013 2012 Cash flows from operating activities: Net income $ 13,446 $ 12,563 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 697 831 Share based compensation 1,105 1,496 Deferred income taxes (84) (77) Bad debt expense 75 37 (Increase) decrease in operating assets and increase (decrease) in liabilities: Accounts receivable (286) 791 Inventories - finished goods 7,060 7,498 Prepaid income taxes (165) 199 Prepaid expenses and other current assets (1,449) (337) Accounts payable (2,411) (645) Income taxes payable (162) 246 Accrued expenses and other current liabilities (152) (761) Net cash provided by operating activities 17,674 21,841 Cash flows from investing activities: Net change in investments (62) (5,166) Purchases of property and equipment (39) (529) Net cash used in investing activities (101) (5,695) Cash flows from financing activities: Dividends paid (9,914) (28,896) Purchases of treasury stock -- (3,865) Tax adjustment related to restricted stock 123 (168) Net cash used in financing activities (9,791) (32,929) Net increase in cash and cash equivalents 7,782 (16,783) Cash and cash equivalents, at beginning of period 18,155 46,801 Cash and cash equivalents, at end of period $ 25,937 $ 30,018 Supplemental disclosure of cash flow information: Cash paid for income taxes $ 7,776 $ 7,237 Dividends payable in accrued expenses $ 241 $ 351 CONTACT: PetMed Express, Inc. Bruce S. Rosenbloom , CFO 954-979-5995 Source: PetMed Express, Inc.


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