PetMed Express (PETS) 8-K Announces Record First Quarter Financial Results

Exhibit 99.1

PETMED EXPRESS D/B/A 1-800-PETMEDS

ANNOUNCES RECORD FIRST QUARTER FINANCIAL RESULTS

Earnings Increase 27% to $0.36 per share

Net Sales Increase 13% to $77.2 Million

Reorder Sales Increase 17%

Pompano Beach, Florida, July 20, 2009 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended June 30, 2009. Net income was $8.1 million, or $0.36 diluted per share, for the quarter ended June 30, 2009, compared to net income of $6.6 million, or $0.28 diluted per share, for the quarter ended June 30, 2008, a 27% increase to EPS. Net sales for the quarter ended June 30, 2009 were $77.2 million, compared to $68.4 million for the quarter ended June 30, 2008, an increase of 13%. Reorder sales increased by 17%, from $46.2 million to $54.0 million for the quarters ended June 30, 2008 and 2009, respectively. Our online sales increased 18% from $43.7 million to $51.8 million for the quarters ended June 30, 2008 and 2009, respectively.    

Menderes Akdag, CEO and President, commented: “We are pleased to report a 29% increase to our income from operations for the quarter, and a 17% increase in our reorder sales, compared to a 16% increase in reorder sales for the same quarter in the prior year. We acquired approximately 297,000 new customers in our first fiscal quarter compared to 267,000 for the same quarter in the prior year. Our costs to acquire a new customer decreased by 12% to $33 for the quarter ended June 30, 2009, compared to $38 for the same quarter in the prior year. We are also pleased to report that our operating expenses as a percent of sales improved 180 basis points for the quarter, compared to the same quarter in the prior year. Our continuing focus will be on capturing additional market share, increasing reorders with personalized communication and health education content, and improving our customer service levels in fiscal 2010.”

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 (210) 234-0009. 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 20, 2009 until August 3, 2009 at 11:59 P.M. To access the replay, call (800) 388-9075 (toll free) or (203) 369-3665, 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, cats, and horses at competitive prices direct to the consumer through its 1-800-PetMeds toll free number and on the Internet through its website atwww.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, 2009. 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.

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Exhibit 99.1 Page 1 of 4

PETMED EXPRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

		June 30,		March 31,
		2009		2009
		(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents	$	59,503,377	$	30,126,041
Accounts receivable, less allowance for doubtful
accounts of $67,327 and $58,525, respectively		3,313,213		2,881,085
Inventories - finished goods		16,133,770		26,778,096
Prepaid expenses and other current assets		924,580		753,602
Deferred tax assets		1,084,237		724,561
Prepaid income taxes		-		361,743
Total current assets		80,959,177		61,625,128
Long term investments		14,430,250		14,430,250
Property and equipment, net		4,889,479		5,057,561
Intangible assets		850,000		850,000
Total assets	$	101,128,906	$	81,962,939
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	10,123,659	$	4,817,097
Accrued expenses and other current liabilities		2,720,893		2,177,838
Income taxes payable		4,019,300		-
Total current liabilities		16,863,852		6,994,935
Deferred tax liabilities		456,404		-
Total liabilities		17,320,256		6,994,935
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.001 par value, 5,000,000 shares authorized;
2,500 convertible shares issued and outstanding with a
liquidation preference of $4 per share		8,898		8,898
Common stock, $.001 par value, 40,000,000 shares authorized;
22,728,470 and 22,686,836 shares issued and outstanding, respectively		22,728		22,687
Additional paid-in capital		765,829		-
Retained earnings		83,230,945		75,156,169
Accumulated other comprehensive loss		(219,750)		(219,750)
Total shareholders' equity		83,808,650		74,968,004
Total liabilities and shareholders' equity	$	101,128,906	$	81,962,939

Exhibit 99.1 Page 2 of 4

PETMED EXPRESS, INC. AND SUBSIDIARIES

 CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 (UNAUDITED)

		Three Months Ended
		June 30,
		2009		2008
Sales	$	77,168,582	$	68,366,683
Cost of sales		47,882,455		42,576,381
Gross profit		29,286,127		25,790,302
Operating expenses:
General and administrative		6,493,360		5,812,214
Advertising		9,871,809		10,060,123
Depreciation and amortization		322,335		155,552
Total operating expenses		16,687,504		16,027,889
Income from operations		12,598,623		9,762,413
Other income:
Interest income, net		61,420		309,315
Other, net		1,585		160,383
Total other income		63,005		469,698
Income before provision for income taxes		12,661,628		10,232,111
Provision for income taxes		4,586,852		3,610,902
Net income	$	8,074,776	$	6,621,209
Net income per common share:
Basic	$	0.36	$	0.28
Diluted	$	0.36	$	0.28
Weighted average number of common shares outstanding:
Basic		22,523,962		23,523,297
Diluted		22,681,612		23,671,933

Exhibit 99.1 Page 3 of 4

PETMED EXPRESS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

		Three Months Ended
		June 30,
		2009		2008
Cash flows from operating activities:
Net income	$	8,074,776	$	6,621,209
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization		322,335		155,552
Share based compensation		337,027		304,041
Deferred income taxes		96,728		(47,174)
Bad debt expense		23,378		43,986
(Increase) decrease in operating assets
and increase (decrease) in liabilities:
Accounts receivable		(455,506)		(1,514,539)
Inventories - finished goods		10,644,326		(6,843,761)
Prepaid income taxes		361,743		-
Prepaid expenses and other current assets		(170,978)		(295,807)
Accounts payable		5,460,799		4,427,291
Income taxes payable		4,019,300		3,400,392
Accrued expenses and other current liabilities		543,055		373,387
Net cash provided by operating activities		29,256,983		6,624,577
Cash flows from investing activities:
Net change in investments		-		12,620,000
Purchases of property and equipment		(308,492)		(212,690)
Net cash (used in) provided by investing activities		(308,492)		12,407,310
Cash flows from financing activities:
Purchases of treasury stock		-		(1,086,816)
Proceeds from the exercise of stock options		319,763		348,200
Tax benefit related to stock options exercised		109,082		31,684
Net cash provided by (used in) financing activities		428,845		(706,932)
Net increase in cash and cash equivalents		29,377,336		18,324,955
Cash and cash equivalents, at beginning of period		30,126,041		20,267,829
Cash and cash equivalents, at end of period	$	59,503,377	$	38,592,784
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	-	$	226,000
Retirement of treasury stock	$	-	$	562,658
Property and equipment purchases in accounts payable	$	617,522	$	-

Exhibit 99.1 Page 4 of 4