PetMed Express (PETS) 8-K Petmed Express D/b/a 1-800-PETMEDS Announces Its First Quarter Financial Results

Exhibit 99.1

PETMED EXPRESS D/B/A 1-800-PETMEDS ANNOUNCES ITS FIRST QUARTER FINANCIAL RESULTS

Pompano Beach, Florida, July 23, 2012 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended June 30, 2012.  Net sales for the quarter ended June 30, 2012 were $69.0 million, compared to $73.6 million for the quarter ended June 30, 2011, a decrease of 6%.  Net income was $4.0 million, or $0.20 diluted per share, for the quarter ended June 30, 2012, compared to net income of $4.8 million, or $0.22 diluted per share, for the quarter ended June 30, 2011, a 12% decrease to EPS.  Reorder sales decreased by 3%, from $56.6 million to $55.1 million for the quarters ended June 30, 2011 and 2012, respectively.  The Company acquired approximately 197,000 new customers for the quarter ended June 30, 2012, compared to 226,000 new customers for the quarter ended June 30, 2011.  Additionally, our online sales decreased by 3% to $52.8 million for the quarter, compared to $54.1 million for the quarter the prior year, with approximately 77% of our orders being generated from our website during the quarter compared to 73% for the quarter the prior year.  

Menderes Akdag, CEO and President, commented: “Although our sales were down due to a decline in average order size, we did see an increase in total orders.  During the quarter ended June 30, 2012 our average order size was $73, compared to $80 for the quarter ended June 30, 2011.  This reduction can be attributed to customers purchasing smaller quantities, for example a 3-month supply instead of 6 months, additional discounts given, and a change in product mix to lower priced items.  In addition, the decrease in sales for the quarter can be attributed to the unavailability of Novartis brands during the quarter, due to the manufacturer’s suspended production.  The sales in the June quarter might also have been negatively affected by the peak season starting earlier this year due to the warmer weather, which shifted sales to the March quarter.  Cash flow from operations increased by 62%, from $8.5 million to $13.8 million for the quarters ended June 30, 2011 and 2012, respectively.  To address the decrease in sales for the quarter, we are focusing on advertising efficiency and shifting sales to higher margin items, while continuing to expand our product offerings.”

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 23, 2012 until August 6, 2012 at 11:59 P.M.  To access the replay, call (888) 673-3565 (toll free) or (402) 220-6428, 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 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, 2012.  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

(In thousands)

	June 30,		March 31,
	2012		2012
ASSETS
Current assets:
Cash and cash equivalents	$	57,351	$	46,801
Short term investments - available for sale		10,382		10,347
Accounts receivable, less allowance for doubtful
accounts of $7 and $5, respectively		2,392		1,572
Inventories - finished goods		18,314		26,217
Prepaid expenses and other current assets		1,658		1,241
Deferred tax assets		1,110		1,230
Prepaid income taxes		-		199
Total current assets		91,207		87,607
Property and equipment, net		2,476		2,597
Intangible asset		860		860
Total assets	$	94,543	$	91,064
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	7,252	$	6,619
Accrued expenses and other current liabilities		2,162		2,772
Income taxes payable		2,214		-
Total current liabilities		11,628		9,391
Deferred tax liabilities		270		492
Total liabilities:		11,898		9,883
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;
20,335 and 20,338 shares issued and outstanding, respectively		20		20
Additional paid-in capital		554		-
Retained earnings		82,009		81,108
Accumulated other comprehensive gain		53		44
Total shareholders' equity		82,645		81,181
Total liabilities and shareholders' equity	$	94,543	$	91,064

Exhibit 99.1 Page 2 of 4

PETMED EXPRESS, INC. AND SUBSIDIARIES

 CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

 (In thousands, except for per share amounts) (Unaudited)

	Three Months Ended
	June 30,
	2012		2011
Sales	$	68,955	$	73,578
Cost of sales		46,651		49,468
Gross profit		22,304		24,110
Operating expenses:
General and administrative		5,922		6,104
Advertising		9,850		10,100
Depreciation		328		341
Total operating expenses		16,100		16,545
Income from operations		6,204		7,565
Other income (expense):
Interest income, net		59		86
Other, net		-		(1	)
Total other income		59		85
Income before provision for income taxes		6,263		7,650
Provision for income taxes		2,311		2,813
Net income	$	3,952	$	4,837
Net income per common share:
Basic	$	0.20	$	0.22
Diluted	$	0.20	$	0.22
Weighted average number of common shares outstanding:
Basic		20,119		21,648
Diluted		20,245		21,767
Comprehensive income	$	3,961	$	4,930
Cash dividends declared per common share	$	0.150	$	0.125

Exhibit 99.1 Page 3 of 4

PETMED EXPRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (In thousands) (Unaudited)

	Three Months Ended
	June 30,
	2012			2011
Cash flows from operating activities:
Net income	$	3,952		$	4,837
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation		328			341
Share based compensation		554			565
Deferred income taxes		(101	)		(155	)
Bad debt expense		11			19
(Increase) decrease in operating assets
and increase (decrease) in liabilities:
Accounts receivable		(831	)		(338	)
Inventories - finished goods		7,903			(934	)
Prepaid income taxes		199			664
Prepaid expenses and other current assets		(417	)		(398	)
Accounts payable		633			1,700
Income taxes payable		2,213			2,303
Accrued expenses and other current liabilities		(643	)		(60	)
Net cash provided by operating activities		13,801			8,544
Cash flows from investing activities:
Net change in investments		(26	)		7,619
Purchases of property and equipment		(207	)		(82	)
Net cash (used in) provided by investing activities		(233	)		7,537
Cash flows from financing activities:
Dividends paid		(3,018	)		(2,751	)
Purchases of treasury stock		-			(13,577	)
Net cash (used in) financing activities		(3,018	)		(16,328	)
Net increase (decrease) in cash and cash equivalents		10,550			(247	)
Cash and cash equivalents, at beginning of period		46,801			49,660
Cash and cash equivalents, at end of period	$	57,351		$	49,413
Supplemental disclosure of cash flow information:
Dividends payable in accrued expenses	$	200		$	174

Exhibit 99.1 Page 4 of 4