DELRAY BEACH, Fla., July 22, 2019 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended June 30, 2019.  Net sales for the quarter ended June 30, 2019 were $80.0 million, compared to $87.4 million for the quarter ended June 30, 2018, a decrease of 8.5%.  Net income was $5.3 million, or $0.26 diluted earnings per share, for the quarter ended June 30, 2019, compared to net income of $12.6 million, or $0.62 diluted earnings per share, for the quarter ended June 30, 2018, a 57% decrease in diluted earnings per share.    

Menderes Akdag, President and CEO, commented: “Our sales and gross margins were negatively impacted by increased online competition and aggressive pricing in the market that forced us to reduce our prices.  Our average order value declined from $90 in the quarter ended June 30, 2018 to $86 in the June 30, 2019 quarter. During the quarter we bought back approximately 613,000 shares of our common stock for $11.5 million, with an average price of $18.73 per share.  Cash from operations for the quarter was negatively impacted by an $8.8 million increase in inventory, the result of cost-advantaged inventory buys that we made during the quarter.  We intend to return to normal inventory levels in future quarters.  One of our long-term strategic initiatives and primary goals has always been to have direct purchasing relationships with the major manufacturers.  We made further progress on this initiative in the current quarter, which may help improve our gross margins in the future.  In fiscal 2020, we will continue to be price competitive and will focus on optimizing our marketing in this more competitive environment and being more efficient with our advertising spending.  In addition, we will be investing in our e-commerce platform to better service our customers.  This platform will enable us to improve upon our already strong net promoter score of 83%.  We believe this customer satisfaction measure reflects the strong bond we have with our customers and will assist the Company with future customer retention.”

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 August 9, 2019, to shareholders of record at the close of business on August 2, 2019.  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 22, 2019 until August 5, 2019 at 11:59 P.M.  To access the replay, call (800) 947-6586 (toll free) or (203) 369-3971, 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
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, 2019.  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.

(In thousands, except for per share amounts)
  June 30,  March 31,
  2019  2019
ASSETS (Unaudited)   
Current assets:     
Cash and cash equivalents$  83,398 $ 100,529
Accounts receivable, less allowance for doubtful    
accounts of $33 and $39, respectively   2,145    2,542
Inventories - finished goods   30,168    21,370
Prepaid expenses and other current assets   1,506    1,408
Prepaid income taxes   -     582
Total current assets  117,217   126,431
Noncurrent assets:     
Property and equipment, net   26,760    27,136
Intangible assets   860    860
Total noncurrent assets   27,620    27,996
Total assets$ 144,837 $ 154,427
Current liabilities:     
Accounts payable$  15,689 $  16,275
Accrued expenses and other current liabilities  3,325    2,351
Income taxes payable   1,241    - 
Total current liabilities   20,255    18,626
Deferred tax liabilities   939    1,121
Total liabilities   21,194    19,747
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, $.001 par value, 40,000 shares authorized;    
20,060 and 20,674 shares issued and outstanding, respectively  20    21
Additional paid-in capital   1,617    12,478
Retained earnings  121,997   122,172
Total shareholders' equity  123,643   134,680
Total liabilities and shareholders' equity$ 144,837 $ 154,427

 (In thousands, except for per share amounts) (Unaudited)  
   Three Months Ended  
   June 30,  
  2019 2018 
Sales $ 79,988 $ 87,390 
Cost of sales  58,127  57,436 
Gross profit  21,861  29,954 
Operating expenses:     
General and administrative   6,508   6,934 
Advertising   8,624   6,707 
Depreciation   568   556 
Total operating expenses  15,700  14,197 
Income from operations   6,161  15,757 
Other income:     
Interest income, net   567   379 
Other, net   257   317 
Total other income   824   696 
Income before provision for income taxes  6,985  16,453 
Provision for income taxes   1,642   3,871 
Net income $  5,343 $ 12,582 
Comprehensive income $  5,343 $ 12,582 
Net income per common share:     
Basic $  0.26 $  0.62 
Diluted $  0.26 $  0.62 
Weighted average number of common shares outstanding: 
Basic  20,235  20,408 
Diluted  20,245  20,449 
Cash dividends declared per common share $  0.27 $  0.25 

 (In thousands) (Unaudited)
   Three Months Ended
   June 30,
  2019  2018 
Cash flows from operating activities:    
Net income $  5,343  $  12,582 
Adjustments to reconcile net income to net cash  
  provided by operating activities:    
Depreciation    568    556 
Share based compensation   635    719 
Deferred income taxes   (182)   (165)
Bad debt expense   25    32 
(Increase) decrease in operating assets  
  and increase (decrease) in liabilities:  
Accounts receivable   372    (171)
Inventories - finished goods   (8,798)   (1,709)
Prepaid income taxes   582    788 
Prepaid expenses and other current assets  (98)   (396)
Accounts payable   (586)   5,908 
Accrued expenses and other current liabilities  934    643 
Income taxes payable   1,241    3,247 
Net cash provided by operating activities  36    22,034 
Cash flows from investing activities:    
Purchases of property and equipment  (192)   (306)
 Net cash used in investing activities   (192)   (306)
Cash flows from financing activities:    
Purchased of treasury stock  (11,496)   -  
Dividends paid   (5,479)   (5,103)
 Net cash used in financing activities  (16,975)   (5,103)
Net (decrease) increase in cash and cash equivalents (17,131)   16,625 
Cash and cash equivalents, at beginning of period 100,529    77,936 
Cash and cash equivalents, at end of period $  83,398  $  94,561 
Supplemental disclosure of cash flow information:  
Dividends payable in accrued expenses $  243  $  288