PetMed Express (PETS) 8-K Announces Record Financial Results for Fiscal 2010

Exhibit 99.1

PETMED EXPRESS, INC. D/B/A 1-800-PETMEDS

ANNOUNCES RECORD FINANCIAL RESULTS FOR FISCAL 2010

Fiscal 2010 Earnings Increase 17% to $1.14 Diluted Per Share

Fiscal 2010 Net Sales Increase 9% to $238.3 Million

Pompano Beach, Florida, May 10, 2010 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the fiscal year ended March 31, 2010.  Net income was $26.0 million, or $1.14 diluted per share, for the year ended March 31, 2010, compared to net income of $23.0 million, or $0.98 diluted per share, for the year ended March 31, 2009, an increase to earnings per share of 17%.  Net sales for the year ended March 31, 2010 were $238.3 million, compared to $219.4 million for the year ended March 31, 2009, an increase of 9%.  Net income for the quarter ended March 31, 2010 was $6.1 million, or $0.27 diluted per share, compared to net income of $5.6 million, or $0.25 diluted per share, for the same quarter the prior year, an increase to earnings per share of 9%.  For the quarter ended March 31, 2010, net sales were $50.3 million, compared to $48.1 million for the quarter ended March 31, 2009, an increase of 5%.  Reorder sales for the year ended March 31, 2010 were $177.8 million, compared to $156.9 million for the year ended March 31, 2009, an increase of 13%.  Reorder sales for the quarter ended March 31, 2010 were $40.4 million, compared to $37.2 million for the quarter ended March 31, 2009, an increase of 9%.  The Company acquired approximately 815,000 new customers during fiscal 2010 compared to 802,000 during fiscal 2009.  

Mendo Akdag, CEO and President, commented: “We are pleased with our financial performance for the year, which was highlighted by the growth of our internet sales and net income.  The results can be attributed to our reorder growth and our success in leveraging our operating expenses.  Our internet sales increased by 14% to $162.8 million for the year, compared to $143.3 million for the prior year, with approximately 68% of our orders being generated from our website during the year, compared to 65% in the prior year.  For the fiscal year, the Company leveraged its operating expenses as a percent of sales by 176 basis points as compared to the same period in the prior year.  In August 2009, the Company announced its first ever quarterly dividend, and has paid approximately $6.8 million in the last three quarters, illustrating our commitment to returning capital to our shareholders.  Our focus in fiscal 201 1 is conversion optimization, and the expansion of our product offerings into pet supplies.”

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 (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 A.M. on May 10, 2010 until May 24, 2010 at 11:59 P.M.  To access the replay, call (866) 517-3736 (toll free) or (203) 369-2047 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

CONSOLIDATED BALANCE SHEETS

		March 31,		March 31,
		2010		2009
ASSETS
Current assets:
Cash and cash equivalents	$	53,143,450		30,126,041
Accounts receivable, less allowance for doubtful
accounts of $5,236 and $58,525, respectively		2,097,057		2,881,085
Inventories - finished goods		29,063,640		26,778,096
Prepaid expenses and other current assets		610,067		753,602
Deferred tax assets		1,255,282		724,561
Prepaid income taxes		329,388		361,743
Total current assets		86,498,884		61,625,128
Long term investments		12,392,125		14,430,250
Property and equipment, net		4,428,849		5,057,561
Intangible asset		850,000		850,000
Total assets	$	104,169,858		81,962,939
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	4,775,665		4,817,097
Accrued expenses and other current liabilities		2,311,589		2,177,838
Total current liabilities		7,087,254		6,994,935
Deferred tax liabilities		225,391		-
Total liabilities:		7,312,645		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;
22,989,618 and 22,686,836 shares issued and outstanding, respectively		22,990		22,687
Additional paid-in capital		2,627,807		-
Retained earnings		94,305,393		75,156,169
Accumulated other comprehensive loss		(107,875	)	(219,750	)
Total shareholders' equity		96,857,213		74,968,004
Total liabilities and shareholders' equity	$	104,169,858		81,962,939

Exhibit 99.1 Page 2 of 4

PETMED EXPRESS, INC. AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF INCOME

		Three Months Ended March 31,					Year Ended March 31,
		2010		2009			2010		2009
		(UNAUDITED)
Sales	$	50,296,567	$	48,070,577		$	238,265,933	$	219,412,247
Cost of sales		30,232,304		28,708,877			146,405,294		134,084,680
Gross profit		20,064,263		19,361,700			91,860,639		85,327,567
Operating expenses:
General and administrative		5,141,680		5,156,223			22,341,123		21,604,654
Advertising		4,855,755		5,087,784			27,656,350		28,707,386
Depreciation and amortization		339,707		311,265			1,321,354		814,542
Total operating expenses		10,337,142		10,555,272			51,318,827		51,126,582
Income from operations		9,727,121		8,806,428			40,541,812		34,200,985
Other income:
Interest income, net		32,013		97,342			196,691		1,056,077
Other, net		327		106,314			4,156		408,149
Loss on disposal of property and equipment		-		(8,565	)		-		(8,565	)
Total other income		32,340		195,091			200,847		1,455,661
Income before provision for income taxes		9,759,461		9,001,519			40,742,659		35,656,646
Provision for income taxes		3,686,925		3,352,182			14,740,192		12,680,235
Net income		6,072,536		5,649,337			26,002,467		22,976,411
Net income per common share:
Basic	$	0.27	$	0.25		$	1.15	$	0.99
Diluted	$	0.27	$	0.25		$	1.14	$	0.98
Weighted average number of common shares outstanding:
Basic		22,679,672		22,874,087			22,616,785		23,305,726
Diluted		22,759,144		23,006,722			22,746,433		23,482,177
Cash dividends declared per common share		0.10		-			0.30		-

Exhibit 99.1 Page 3 of 4

PETMED EXPRESS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

		Year Ended March 31,
		2010			2009			2008
Cash flows from operating activities:
Net income	$	26,002,467		$	22,976,411		$	20,022,231
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization		1,321,354			814,542			589,990
Share based compensation		1,594,082			1,464,225			1,679,600
Deferred income taxes		(305,330	)		497,292			(327,313	)
Loss on disposal of property and equipment		-			8,565			-
Bad debt expense		17,545			73,981			40,823
(Increase) decrease in operating assets
and increase (decrease) in liabilities:
Accounts receivable		766,483			(1,379,803	)		(246,565	)
Inventories - finished goods		(2,285,544	)		(8,868,547	)		(1,823,342	)
Prepaid income taxes		32,355			(361,743	)		-
Prepaid expenses and other current assets		143,535			(61,743	)		379,312
Accounts payable		312,775			(313,436	)		(1,500,982	)
Income taxes payable		-			(185,243	)		(44,078	)
Accrued expenses and other current liabilities		85,843			301,183			610,818
Net cash provided by operating activities		27,685,565			14,965,684			19,380,494
									&n bsp;
Cash flows from investing activities:
Net change in investments		2,150,000			14,870,000			9,605,000
Purchases of property and equipment		(1,046,849	)		(3,207,615	)		(502,706	)
Purchase of intangible asset		-			(485,000	)		-
Net proceeds from the sale of property and equipment		-			2,000			-
Net cash provided by investing activities		1,103,151			11,179,385			9,102,294
Cash flows from financing activities:
Dividends paid		(6,805,335	)		-			-
Purchases of treasury stock		-			(18,447,539	)		(11,600,721	)
Proceeds from the exercise of stock options		734,746			1,892,847			2,784,987
Tax benefit related to stock options exercised		299,282			267,835			284,305
Net cash used in financing activities		(5,771,307	)		(16,286,857	)		(8,531,429	)
									&n bsp;
Net increase in cash and cash equivalents		23,017,409			9,858,212			19,951,359
Cash and cash equivalents, at beginning of the year		30,126,041			20,267,829			316,470
Cash and cash equivalents, at end of the year	$	53,143,450		$	30,126,041		$	20,267,829
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	14,719,000		$	16,462,095		$	10,331,000
Retirement of treasury stock	$	-		$	18,481,816		$	11,566,444
Property and equipment purchases in accounts payable	$	417,552		$	771,759		$	-
Dividends payable in accrued expenses	$	47,908		$	-		$	-

Exhibit 99.1 Page 4 of 4