OREANDA-NEWS. PetMed Express, Inc. (NASDAQ:PETS) today announced its financial results for the quarter ended June 30, 2016.  Net income was $6.6 million, or $0.32 diluted per share, for the quarter ended June 30, 2016, compared to net income of $5.8 million, or $0.29 diluted per share, for the quarter ended June 30, 2015, a 15% increase to net income.  Net sales for the quarter ended June 30, 2016 were $72.5 million, compared to $71.6 million for the quarter ended June 30, 2015, an increase of 1.2%.  New order sales increased 10%, to $13.3 million for the quarter ended June 30, 2016, compared to $12.1 million for the same quarter in the prior year.  The Company’s online sales for the quarter ended June 30, 2016 were approximately 82% of all sales compared to 81% for the same quarter the prior year, an increase of 2.9%. 

Menderes Akdag, CEO and President, commented: “During the June quarter we saw increases in our new order sales, acquiring approximately 158,000 new customers, compared to 148,000 new customers acquired in the same quarter the prior year.  We were further encouraged by our continued advertising efficiency in the quarter, as our new customer acquisition costs were reduced to $37 for the quarter ended June 30, 2016 compared to $53 for the same quarter the prior year.  We were able to decrease our operating expenses to improve our bottom line results for the quarter ended June 30, 2016.  Our operating expenses decreased by about 274 basis points for the quarter compared to the same quarter last year, which can be attributed to a reduction in advertising spending.  For the remainder of Fiscal 2017 we will be preparing to move into our new corporate headquarters and distribution facility, which is expected to occur in our third fiscal quarter.”

The Board of Directors declared a quarterly dividend of $0.19 per share on the Company’s common stock.  The dividend will be payable on August 19, 2016, to shareholders of record at the close of business on August 8, 2016.  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 25, 2016 until August 8, 2016 at 11:59 P.M.  To access the replay, call (866) 425-0192 (toll free) or (203) 369-0875, and enter passcode 5500.

 
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
             
      June 30,     March 31,
      2016     2016
ASSETS     (Unaudited)      
             
Current assets:            
Cash and cash equivalents   $ 44,307   $ 37,639
Accounts receivable, less allowance for doubtful            
accounts of $16 and $13, respectively     2,075     1,724
Inventories - finished goods     27,026     25,586
Prepaid expenses and other current assets     3,865     2,435
Prepaid income taxes     -     243
Total current assets     77,273     67,627
             
Noncurrent assets:            
Property and equipment, net     20,766     20,929
Intangible assets     860     860
Deferred tax assets     907     863
Total noncurrent assets     22,533     22,652
             
Total assets   $ 99,806   $ 90,279
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
             
Current liabilities:            
Accounts payable   $ 7,281   $ 5,004
Accrued expenses and other current liabilities     2,503     2,080
Income taxes payable     3,655     -
             
Total liabilities     13,439     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;            
20,447 and 20,447 shares issued and outstanding, respectively     20     20
Additional paid-in capital     5,334     4,871
Retained earnings     81,004     78,295
             
Total shareholders' equity     86,367     83,195
             
Total liabilities and shareholders' equity   $ 99,806   $ 90,279
             
 PETMED EXPRESS, INC. AND SUBSIDIARIES   
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME   
 (In thousands, except for per share amounts) (Unaudited)   
               
       Three Months Ended   
       June 30,   
      2016       2015    
               
Sales   $ 72,487   $   71,634    
Cost of sales     50,035       48,668    
               
Gross profit     22,452       22,966    
               
Operating expenses:              
General and administrative     6,098       5,799    
Advertising     5,760       7,885    
Depreciation     194       191    
Total operating expenses     12,052       13,875    
               
Income from operations     10,400       9,091    
               
Other income:              
Interest income, net     28       50    
Other, net     53       (4 )  
Total other income     81       46    
               
Income before provision for income taxes     10,481       9,137    
               
Provision for income taxes     3,887       3,380    
               
Net income   $ 6,594   $   5,757    
               
Net change in unrealized gain (loss) on short              
term investments     -       (35 )  
               
Comprehensive income   $ 6,594   $   5,722    
               
Net income per common share:              
Basic   $ 0.33   $   0.29    
Diluted   $ 0.32   $   0.29    
               
Weighted average number of common shares outstanding:              
Basic     20,181       20,074    
Diluted     20,333       20,198    
               
Cash dividends declared per common share   $ 0.19   $   0.18    
               
PETMED EXPRESS, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
 (In thousands) (Unaudited)   
   
       Three Months Ended   
       June 30,   
        2016         2015    
Cash flows from operating activities:              
Net income   $   6,594     $   5,757    
Adjustments to reconcile net income to net cash              
provided by operating activities:              
Depreciation       194         191    
Share based compensation       463         371    
Deferred income taxes       (44 )       (148 )  
Bad debt expense       233         168    
(Increase) decrease in operating assets              
and increase (decrease) in liabilities:              
Accounts receivable       (584 )       (1,326 )  
Inventories - finished goods       (1,440 )       (2,152 )  
Prepaid income taxes       243         -    
Prepaid expenses and other current assets       1,143         (161 )  
Accounts payable       2,277         4,827    
Income taxes payable       3,655         3,302    
Accrued expenses and other current liabilities       372         (18 )  
Net cash provided by operating activities       13,106         10,811    
               
Cash flows from investing activities:              
Net change in investments       -         (16 )  
Purchases of property and equipment       (2,604 )       (110 )  
Net cash used in investing activities       (2,604 )       (126 )  
               
Cash flows from financing activities:              
Dividends paid       (3,834 )       (3,613 )  
Net cash used in financing activities       (3,834 )       (3,613 )  
               
Net increase in cash and cash equivalents       6,668         7,072    
Cash and cash equivalents, at beginning of period       37,639         35,613    
               
Cash and cash equivalents, at end of period   $   44,307     $   42,685    
               
Supplemental disclosure of cash flow information:              
               
Cash paid for income taxes   $   55     $   226    
               
Property and equipment in current assets   $   2,573     $   -    
               
Dividends payable in accrued expenses   $   194     $   245