Cover
Cover - shares | 6 Months Ended | |
Sep. 30, 2022 | Nov. 08, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 000-28827 | |
Entity Registrant Name | PETMED EXPRESS, INC. | |
Entity Incorporation, State or Country Code | FL | |
Entity Tax Identification Number | 65-0680967 | |
Entity Address, Address Line One | 420 South Congress Avenue | |
Entity Address, City or Town | Delray Beach | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33445 | |
City Area Code | 561 | |
Local Phone Number | 526-4444 | |
Title of 12(b) Security | Common Stock, par value $.001 per share | |
Trading Symbol | PETS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 21,075,677 | |
Entity Central Index Key | 0001040130 | |
Current Fiscal Year End Date | --03-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Mar. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 96,546 | $ 111,080 |
Accounts receivable, less allowance for doubtful accounts of $32 and $39, respectively | 1,590 | 1,913 |
Inventories - finished goods | 34,022 | 32,455 |
Prepaid expenses and other current assets | 5,463 | 4,866 |
Prepaid income taxes | 595 | 681 |
Total current assets | 138,216 | 150,995 |
Noncurrent assets: | ||
Property and equipment, net | 25,189 | 24,464 |
Intangible and other assets | 5,860 | 860 |
Total noncurrent assets | 31,049 | 25,324 |
Total assets | 169,265 | 176,319 |
Current liabilities: | ||
Accounts payable | 23,980 | 27,500 |
Accrued expenses and other current liabilities | 6,585 | 5,697 |
Total current liabilities | 30,565 | 33,197 |
Deferred tax liabilities | 547 | 936 |
Commitments and contingencies | ||
Total liabilities | 31,112 | 34,133 |
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; 21,077 and 20,979 shares issued and outstanding, respectively | 21 | 21 |
Additional paid-in capital | 14,877 | 11,660 |
Retained earnings | 123,246 | 130,496 |
Total shareholders' equity | 138,153 | 142,186 |
Total liabilities and shareholders' equity | $ 169,265 | $ 176,319 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2022 | Mar. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 32 | $ 39 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000 | 5,000 |
Preferred stock, shares issued (in shares) | 3 | 3 |
Preferred stock, shares outstanding (in shares) | 3 | 3 |
Preferred stock, liquidation preference (in dollars per share) | $ 4 | $ 4 |
Common stock, par or value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 40,000 | 40,000 |
Common stock, shares issued (in shares) | 21,077 | 20,979 |
Common stock, shares outstanding (in shares) | 21,077 | 20,979 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Sales | $ 65,394 | $ 67,386 | $ 135,581 | $ 146,698 |
Cost of sales | 46,943 | 48,212 | 97,187 | 105,744 |
Gross profit | 18,451 | 19,174 | 38,394 | 40,954 |
Operating expenses: | ||||
General and administrative | 10,753 | 6,958 | 20,104 | 14,999 |
Advertising | 3,879 | 3,435 | 10,228 | 11,108 |
Depreciation | 858 | 694 | 1,611 | 1,341 |
Total operating expenses | 15,490 | 11,087 | 31,943 | 27,448 |
Income from operations | 2,961 | 8,087 | 6,451 | 13,506 |
Other income: | ||||
Interest income, net | 388 | 74 | 505 | 159 |
Other, net | 261 | 170 | 459 | 454 |
Total other income | 649 | 244 | 964 | 613 |
Income before provision for income taxes | 3,610 | 8,331 | 7,415 | 14,119 |
Provision for income taxes | 1,031 | 1,982 | 2,061 | 3,342 |
Net income | $ 2,579 | $ 6,349 | $ 5,354 | $ 10,777 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 0.13 | $ 0.31 | $ 0.26 | $ 0.53 |
Diluted (in dollars per share) | $ 0.13 | $ 0.31 | $ 0.26 | $ 0.53 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 20,261 | 20,178 | 20,235 | 20,144 |
Diluted (in shares) | 20,344 | 20,568 | 20,318 | 20,384 |
Cash dividends declared per common share (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.60 | $ 0.60 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 5,354 | $ 10,777 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 1,611 | 1,341 |
Share based compensation | 3,217 | 1,600 |
Deferred income taxes | (389) | 346 |
Bad debt expense | 66 | 58 |
(Increase) decrease in operating assets and increase (decrease) in liabilities: | ||
Accounts receivable | 257 | 675 |
Inventories - finished goods | (1,567) | 14,687 |
Prepaid income taxes | 86 | 60 |
Prepaid expenses and other current assets | (597) | 106 |
Accounts payable | (3,520) | (28,365) |
Accrued expenses and other current liabilities | 590 | (210) |
Net cash provided by operating activities | 5,108 | 1,075 |
Cash flows from investing activities: | ||
Purchase of minority interest investment in Vetster | (5,000) | 0 |
Purchases of property and equipment | (2,336) | (972) |
Net cash used in investing activities | (7,336) | (972) |
Cash flows from financing activities: | ||
Dividends paid | (12,306) | (12,259) |
Net cash used in financing activities | (12,306) | (12,259) |
Net decrease in cash and cash equivalents | (14,534) | (12,156) |
Cash and cash equivalents, at beginning of period | 111,080 | 118,718 |
Cash and cash equivalents, at end of period | 96,546 | 106,562 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 2,560 | 2,935 |
Dividends payable in accrued expenses | $ 856 | $ 110 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Organization PetMed Express, Inc. and subsidiaries, d/b/a PetMeds® (the “Company”), is a leading nationwide pet pharmacy and Your Trusted Pet Health Expert TM . The Company markets prescription and non-prescription pet medications, health products, and supplies for dogs, cats, and horses, directly to the consumer. The Company offers consumers an attractive alternative for obtaining pet medications in terms of expertise, convenience, price, speed of delivery and valued customer service. The Company markets its products through advertising and promotional campaigns, which aim to increase the recognition of the “PetMeds®” brand name, increase traffic on its website at www.petmeds.com , acquire new customers, and maximize repeat purchases. Virtually all of the Company’s sales are to customers in the United States. The Company’s corporate headquarters and distribution facility is located in Delray Beach, Florida. The Company’s fiscal year end is March 31, and references herein to fiscal 2023 or fiscal 2022 refer to the Company's fiscal years ending March 31, 2023 and 2022, respectively. Basis of Presentation and Consolidation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, the accompanying Condensed Consolidated Financial Statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position of the Company at September 30, 2022, the Statements of Income for the three and six months ended September 30, 2022 and 2021, and Cash Flows for the six months ended September 30, 2022 and 2021. The results of operations for the three and six months ended September 30, 2022 are not necessarily indicative of the operating results expected for the fiscal year ending March 31, 2023. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2022. The Condensed Consolidated Financial Statements include the accounts of PetMed Express, Inc. and its wholly owned subsidiaries. All significant intercompany transactions have been eliminated upon consolidation. Use of Estimates The preparation of Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Fair Value of Financial Instruments The carrying amounts of the Company's cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the short-term nature of these instruments. Recent Accounting Pronouncements |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue RecognitionThe Company generates revenue by selling pet medication products and pet supplies mainly to retail customers. Certain pet supplies offered on the Company’s website are drop shipped to customers. The Company considers itself the principal in the arrangement because the Company controls the specified good before it is transferred to the customer. Revenue contracts contain one performance obligation, which is delivery of the product. Customer care and support is deemed not to be a material right to the contract. The transaction price is adjusted at the date of sale for any applicable sales discounts and an estimate of product returns, which are based on historical patterns, however this is not considered a key judgment. Revenue is recognized when control transfers to the customer at the point in time at which the shipment of the product occurs. This key judgment is determined as the shipping point, which represents the point in time when the Company has a present right to payment, title has transferred to the customer, and the customer has assumed the risks and rewards of ownership. Outbound shipping and handling fees are an accounting policy election and are included in sales as the Company considers itself the principal in the arrangement given its responsibility for supplier selection and discretion over pricing. Shipping costs associated with outbound freight after control over a product has transferred to a customer are an accounting policy election and are accounted for as fulfillment costs and are included in cost of sales. The Company disaggregates revenue in the following two categories: (1) reorder revenue vs new order revenue, and (2) internet revenue vs. contact center revenue. The following table illustrates revenue by various classifications: Three Months Ended September 30, Revenue (In thousands) 2022 % 2021 % $ Variance % Variance Reorder Sales $ 59,729 91.3 % $ 60,646 90.0 % $ (917) -1.5 % New Order Sales 5,665 8.7 % 6,740 10.0 % (1,075) -15.9 % Total Net Sales $ 65,394 100.0 % $ 67,386 100.0 % $ (1,992) -3.0 % Internet Sales $ 56,548 86.5 % $ 55,961 83.0 % $ 587 1.0 % Contact Center Sales 8,846 13.5 % 11,425 17.0 % (2,579) -22.6 % Total Net Sales $ 65,394 100.0 % $ 67,386 100.0 % $ (1,992) -3.0 % Six Months Ended September 30, Revenue (In thousands) 2022 % 2021 % $ Variance % Variance Reorder Sales $ 123,068 90.8 % $ 129,348 88.2 % $ (6,280) -4.9 % New Order Sales 12,513 9.2 % 17,350 11.8 % (4,837) -27.9 % Total Net Sales $ 135,581 100.0 % $ 146,698 100.0 % $ (11,117) -7.6 % Internet Sales $ 116,843 86.2 % $ 122,408 83.4 % $ (5,565) -4.5 % Contact Center Sales 18,738 13.8 % 24,290 16.6 % (5,552) -22.9 % Total Net Sales $ 135,581 100.0 % $ 146,698 100.0 % $ (11,117) -7.6 % The Company changed the definition of a new customer on April 1, 2022, to include anyone who has not ordered over the past thirty-six months. The reorder and new order sales amounts for the three and six months ended September 30, 2022, and the reorder and new order sales amounts for the three and six months ended September 30, 2021 reflect this new customer definition change. Under the previous definition of a new customer, reorder and new order sales were $62.0 million and $5.4 million, respectively, for the three months ended September 30, 2021. Under the previous definition of a new customer, reorder and new order sales were $133.0 million and $13.7 million, respectively, for the six months ended September 30, 2021. Virtually all the Company’s sales are paid by credit cards and the Company usually receives the cash settlement in two to three banking days. Credit card sales minimize the accounts receivable balances relative to sales. The Company had no material contract asset or liability balances as of September 30, 2022 or March 31, 2022. |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share In accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 260 (“ Earnings Per Share ”) basic net income per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net income per common share includes the dilutive effect of potential restricted stock and the effects of the potential conversion of preferred shares, calculated using the treasury stock method. Unvested restricted stock and convertible preferred shares issued by the Company represent the only dilutive effect reflected in the diluted weighted average shares outstanding. The following is a reconciliation of the numerators and denominators of the basic and diluted net income per share computations for the periods presented (in thousands, except for per share amounts): Three Months Ended September 30, Six Months Ended 2022 2021 2022 2021 Net income (numerator): Net income $ 2,579 $ 6,349 $ 5,354 $ 10,777 Shares (denominator): Weighted average number of common shares outstanding used in basic computation 20,261 20,178 20,235 20,144 Common shares issuable upon vesting of restricted stock 73 380 73 230 Common shares issuable upon conversion of preferred shares 10 10 10 10 Shares used in diluted computation 20,344 20,568 20,318 20,384 Net income per common share: Basic $ 0.13 $ 0.31 $ 0.26 $ 0.53 Diluted $ 0.13 $ 0.31 $ 0.26 $ 0.53 For the three and six months ended September 30, 2022 and 2021, 261,228 and 115,219 shares of common restricted stock, respectively, were excluded from the computations of diluted net income per common share, as their inclusion would have had an anti-dilutive effect on diluted net income per common share. |
Accounting for Stock-Based Comp
Accounting for Stock-Based Compensation | 6 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation The Company records compensation expense associated with restricted stock in accordance with ASC Topic 718 (“ Share Based Payment ”) (ASU 2016-09). The Company had 958,998 common shares issued under the 2016 Employee Equity Compensation Restricted Stock Plan (“2016 Employee Plan”), and 240,755 common shares issued under the 2015 Outside Director Equity Compensation Restricted Stock Plan (“2015 Director Plan”) at September 30, 2022, all shares of which were issued subject to a restriction or forfeiture period that lapses ratably on the first, second, and third anniversaries of the date of grant, and the fair value of which is being amortized over the one In August 2021, the Company issued 90,000 restricted shares and 510,000 performance restricted shares to the Company’s CEO, in accordance with the CEO’s employment agreement, under the 2016 Employee Plan. The fair value of the 90,000 restricted shares issuance was valued at $28.70 per share. The value of the 510,000 performance restricted shares issuance was valued by a third party valuation firm, and these shares were valued at $9.7 million, or $19.06 per share. The valuation firm utilized a Monte Carlo model to value the 510,000 performance restricted shares and looked at several other factors such as historical stock price volatility. The fair value of the restricted performance shares is being amortized over the three-year restriction period. Effective, August 3, 2022 Christine Chambers, the new Chief Financial Officer, received an initial equity award under the 2016 Employee Plan consisting of (i) an award of 13,000 restricted shares, and (ii) 3,000 performance restricted shares, which performance restricted shares will be based on the attainment of performance criteria equally weighted between adjusted EBITDA and revenue. The shares for each grant will be released from restriction equally over a three The Company issued 57,640 shares of restricted stock, net of forfeitures, to certain employees under the 2016 Employee Plan during the quarter ended September 30, 2022. The Company issued 30,000 shares of restricted stock, net of forfeitures, to board members under the 2015 Director Plan during the quarter ended September 30, 2022. For the quarters ended September 30, 2022 and 2021, the Company recognized $1.7 million and $0.9 million, respectively, of compensation expense related to the 2016 Employee Plan and 2015 Director Plan. For the six months ended September 30, 2022 and 2021, the Company recognized $3.2 million and $1.6 million, respectively, of compensation expense related to the 2016 Employee Plan and 2015 Director Plan. At September 30, 2022 and 2021 there was $12.2 million and $15.8 million of unrecognized compensation cost related to the non-vested restricted stock awards, respectively, which is expected to be recognized over the next one In July 2022, the Company’s 2022 Employee Equity Compensation Restricted Stock Plan (“2022 Employee Plan”) became effective upon the approval of the plan by the Company’s Shareholders. The 2022 Employee Plan authorizes 1,000,000 shares of the Company's common stock available for issuance under the plan. The value of the restricted stock is determined based on the market value of the stock at the issuance date. The restriction period or forfeiture period is determined by the Company’s Board of Directors and is to be no less than 1 year and no more than ten years. No shares had been issued under the 2022 Employee Plan as of September 30, 2022. |
Fair Value
Fair Value | 6 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value The Company carries cash and cash equivalents at fair value in the Condensed Consolidated Balance Sheets. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. ASC Topic 820 (“Fair Value Measurements”) establishes a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Include other inputs that are directly or indirectly observable in the marketplace. Level 3 - Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. At September 30, 2022, the Company had invested the majority of its $96.5 million cash and cash equivalents balance in money market funds which are classified within Level 1. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters and Routine Proceedings The Company has settled complaints that had been filed with various states’ pharmacy boards in the past. There can be no assurances made that other states will not attempt to take similar actions against the Company in the future. The Company also intends to vigorously defend its trade or service marks. There can be no assurance that the Company will be successful in protecting its trade or service marks. Legal costs related to the above matters are expensed as incurred .From time to time, the Company may be involved in and subject to disputes and legal proceedings, as well as demands, claims and threatened litigation that arise in the ordinary course of its business. These proceedings may include allegations involving business practices, infringement of intellectual property, employment or other matters. The ultimate outcome of any legal proceeding is often uncertain, there can be no assurance that the Company will be successful in any legal proceeding, and unfavorable outcomes could have a negative impact on our results of operations and financial condition. The Company records a liability in its financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. The Company reviews the status of each significant matter each accounting period as additional information is known and adjusts the loss provision when appropriate. If a matter is both probable to result in a liability and the amounts of loss can be reasonably estimated, the Company estimates and discloses the possible loss or range of loss to the extent necessary to make the financial statements not misleading. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in the Company’s financial statements. Gain contingencies are not recorded until they are realized. Legal costs related to any legal matters are expensed as incurred. The Company evaluates contingencies on an ongoing basis and has established loss provisions for matters in which losses are probable and the amount of the loss can be reasonably estimated and is not currently a party to any legal proceeding that management believes could have a material adverse effect on our results of operations. Estimated state sales tax assessment accruals in the amount of $0.9 million are included in the "Accrued expenses and other current liabilities" line item on the Condensed Consolidated Balance Sheets as of September 30, 2022 and the offsetting expense was recognized in the "General and administrative" line item within the Condensed Consolidated Statements of Income for the three months ended September 30, 2022. The Company believes the recorded reserves in the consolidated financial statements are adequate considering the probable and estimable liabilities. The Company continues to assess and evaluate sales tax contingencies. At this point, additional contingencies are not estimable. Employment Agreements and Separation Agreement On July 14, 2022, the Board of Directors of Company appointed Christine Chambers to serve as the Company’s Chief Financial Officer and to assume the duties of principal financial officer and principal accounting officer effective August 3, 2022 (“Effective Date”). |
Changes in Shareholders' Equity
Changes in Shareholders' Equity | 6 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Changes in Shareholders' Equity | Changes in Shareholders ’ Equity: Changes in Shareholders’ Equity for the three months ended September 30, 2022 is summarized below (in thousands): Common Stock Additional Retained Beginning balance at March 31, 2022: $ 21 $ 11,660 $ 130,496 Share based compensation — 1,536 — Dividends declared — — (6,297) Net income — — 2,775 Ending balance at June 30, 2022 $ 21 $ 13,196 $ 126,974 Shares Issued — — — Share based compensation — 1,681 — Dividends declared — — (6,307) Net income — — 2,579 Ending balance at September 30, 2022: $ 21 $ 14,877 $ 123,246 Changes in Shareholders’ Equity for the six months ended September 30, 2021 is summarized below (in thousands): Common Stock Additional Retained Beginning balance at March 31, 2021: $ 20 $ 7,111 $ 134,141 Share based compensation — 718 — Dividends declared — — (6,080) Net income — — 4,428 Ending balance at June 30, 2021 $ 20 $ 7,829 $ 132,489 Shares Issued 1 — — Share based compensation — 882 — Dividends declared — — (6,092) Net income — — 6,349 Ending balance at September 30, 2021: $ 21 $ 8,711 $ 132,746 There were no shares of common stock that were purchased or retired in the six months ended September 30, 2022 or 2021. At September 30, 2022, the Company had approximately $28.7 million remaining under the Company’s share repurchase plan. |
Income Taxes
Income Taxes | 6 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesFor the quarters ended September 30, 2022 and 2021, the Company recorded an income tax provision of approximately $1.0 million and $2.0 million, respectively, and for the six months ended September 30, 2022 and 2021 the Company recorded an income tax provision of approximately $2.1 million and $3.3 million, respectively. The effective tax rate for the quarter ended September 30, 2022 was approximately 28.6%, compared to approximately 23.8% for the quarter ended September 30, 2021, and the effective tax rate for the six months ended September 30, 2022 was approximately 27.8% compared to approximately 23.7% for the six months ended September 30, 2021. The increase in the effective tax rate for the quarter and six months ended September 30, 2022 is due to an increase in state tax due to the extension of the Company's business operations. |
Related Party Transaction
Related Party Transaction | 6 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | Related Party Transaction The Company’s Board of Directors' Chairman, Gian Fulgoni serves on the board of directors of Prophet, a brand and marketing consulting company, which the Company engaged with in March 2021 for $292 thousand. The Company expensed $32 thousand in fiscal 2021 and $260 thousand in fiscal 2022. There was no related expense in the six months ended September 30, 2022. This transaction was approved by the Company’s Board of Directors with terms that are comparable to those with an unrelated third party. |
Minority Interest Investment in
Minority Interest Investment in Vetster | 6 Months Ended |
Sep. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
Minority Interest Investment in Vetster | Minority Interest Investment in VetsterOn April 19, 2022, the Company engaged in a three-year partnership agreement with Vetster Inc. (“Vetster”), a veterinary telehealth Canadian company. The Company also purchased a 5% minority interest in Vetster in the amount of $5.0 million and received warrants for additional equity in Vetster, which are tied to future performance milestones. Under the terms of the agreement, the Company becomes the exclusive e-commerce provider for Vetster, and Vetster becomes the exclusive provider of telehealth and telemedicine services to the Company. The minority interest investment is being valued on the cost basis and the investment will be evaluated periodically for any impairment. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn November 7, 2022, the Board of Directors declared a quarterly dividend of $0.30 per share. The Board established a November 18, 2022 record date and a November 30, 2022 payment date. Based on the outstanding share balance as of November 8, 2022 the Company estimates the dividend payable to be approximately $6.3 million.Subsequent to September 30, 2022, the Board of Directors approved and issued 1,000 restricted shares to employees pursuant to the 2016 Employee Plan. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis Of Presentation and Consolidation | Basis of Presentation and ConsolidationThe accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, the accompanying Condensed Consolidated Financial Statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position of the Company at September 30, 2022, the Statements of Income for the three and six months ended September 30, 2022 and 2021, and Cash Flows for the six months ended September 30, 2022 and 2021. The results of operations for the three and six months ended September 30, 2022 are not necessarily indicative of the operating results expected for the fiscal year ending March 31, 2023. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2022. The Condensed Consolidated Financial Statements include the accounts of PetMed Express, Inc. and its wholly owned subsidiaries. All significant intercompany transactions have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates The preparation of Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of the Company's cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the short-term nature of these instruments. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, will have a material effect on the Company's consolidated financial position, results of operations, or cash flows. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregation of Revenue | The following table illustrates revenue by various classifications: Three Months Ended September 30, Revenue (In thousands) 2022 % 2021 % $ Variance % Variance Reorder Sales $ 59,729 91.3 % $ 60,646 90.0 % $ (917) -1.5 % New Order Sales 5,665 8.7 % 6,740 10.0 % (1,075) -15.9 % Total Net Sales $ 65,394 100.0 % $ 67,386 100.0 % $ (1,992) -3.0 % Internet Sales $ 56,548 86.5 % $ 55,961 83.0 % $ 587 1.0 % Contact Center Sales 8,846 13.5 % 11,425 17.0 % (2,579) -22.6 % Total Net Sales $ 65,394 100.0 % $ 67,386 100.0 % $ (1,992) -3.0 % Six Months Ended September 30, Revenue (In thousands) 2022 % 2021 % $ Variance % Variance Reorder Sales $ 123,068 90.8 % $ 129,348 88.2 % $ (6,280) -4.9 % New Order Sales 12,513 9.2 % 17,350 11.8 % (4,837) -27.9 % Total Net Sales $ 135,581 100.0 % $ 146,698 100.0 % $ (11,117) -7.6 % Internet Sales $ 116,843 86.2 % $ 122,408 83.4 % $ (5,565) -4.5 % Contact Center Sales 18,738 13.8 % 24,290 16.6 % (5,552) -22.9 % Total Net Sales $ 135,581 100.0 % $ 146,698 100.0 % $ (11,117) -7.6 % |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following is a reconciliation of the numerators and denominators of the basic and diluted net income per share computations for the periods presented (in thousands, except for per share amounts): Three Months Ended September 30, Six Months Ended 2022 2021 2022 2021 Net income (numerator): Net income $ 2,579 $ 6,349 $ 5,354 $ 10,777 Shares (denominator): Weighted average number of common shares outstanding used in basic computation 20,261 20,178 20,235 20,144 Common shares issuable upon vesting of restricted stock 73 380 73 230 Common shares issuable upon conversion of preferred shares 10 10 10 10 Shares used in diluted computation 20,344 20,568 20,318 20,384 Net income per common share: Basic $ 0.13 $ 0.31 $ 0.26 $ 0.53 Diluted $ 0.13 $ 0.31 $ 0.26 $ 0.53 |
Changes in Shareholders' Equi_2
Changes in Shareholders' Equity (Tables) | 6 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Changes in Shareholders' Equity | Changes in Shareholders’ Equity for the three months ended September 30, 2022 is summarized below (in thousands): Common Stock Additional Retained Beginning balance at March 31, 2022: $ 21 $ 11,660 $ 130,496 Share based compensation — 1,536 — Dividends declared — — (6,297) Net income — — 2,775 Ending balance at June 30, 2022 $ 21 $ 13,196 $ 126,974 Shares Issued — — — Share based compensation — 1,681 — Dividends declared — — (6,307) Net income — — 2,579 Ending balance at September 30, 2022: $ 21 $ 14,877 $ 123,246 Changes in Shareholders’ Equity for the six months ended September 30, 2021 is summarized below (in thousands): Common Stock Additional Retained Beginning balance at March 31, 2021: $ 20 $ 7,111 $ 134,141 Share based compensation — 718 — Dividends declared — — (6,080) Net income — — 4,428 Ending balance at June 30, 2021 $ 20 $ 7,829 $ 132,489 Shares Issued 1 — — Share based compensation — 882 — Dividends declared — — (6,092) Net income — — 6,349 Ending balance at September 30, 2021: $ 21 $ 8,711 $ 132,746 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 65,394 | $ 67,386 | $ 135,581 | $ 146,698 |
Revenues, percentage | 100% | 100% | 100% | 100% |
Revenues, variance | $ (1,992) | $ (11,117) | ||
Revenues, variance, percentage | (3.00%) | (7.60%) | ||
Internet Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 56,548 | $ 55,961 | $ 116,843 | $ 122,408 |
Revenues, percentage | 86.50% | 83% | 86.20% | 83.40% |
Revenues, variance | $ 587 | $ (5,565) | ||
Revenues, variance, percentage | 1% | (4.50%) | ||
Contact Center Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 8,846 | $ 11,425 | $ 18,738 | $ 24,290 |
Revenues, percentage | 13.50% | 17% | 13.80% | 16.60% |
Revenues, variance | $ (2,579) | $ (5,552) | ||
Revenues, variance, percentage | (22.60%) | (22.90%) | ||
Reorder Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 59,729 | $ 60,646 | $ 123,068 | $ 129,348 |
Revenues, percentage | 91.30% | 90% | 90.80% | 88.20% |
Revenues, variance | $ (917) | $ (6,280) | ||
Revenues, variance, percentage | (1.50%) | (4.90%) | ||
New Order Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 5,665 | $ 6,740 | $ 12,513 | $ 17,350 |
Revenues, percentage | 8.70% | 10% | 9.20% | 11.80% |
Revenues, variance | $ (1,075) | $ (4,837) | ||
Revenues, variance, percentage | (15.90%) | (27.90%) |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 65,394 | $ 67,386 | $ 135,581 | $ 146,698 |
Reorder Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 59,729 | 60,646 | 123,068 | 129,348 |
Reorder Sales | Previously Reported | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 62,000 | 133,000 | ||
New Order Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 5,665 | 6,740 | $ 12,513 | 17,350 |
New Order Sales | Previously Reported | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 5,400 | $ 13,700 |
Net Income Per Share - Schedule
Net Income Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net income (numerator): | ||||
Net income | $ 2,579 | $ 6,349 | $ 5,354 | $ 10,777 |
Shares (denominator): | ||||
Weighted average number of common shares outstanding used in basic computation (in shares) | 20,261 | 20,178 | 20,235 | 20,144 |
Common shares issuable upon vesting of restricted stock (in shares) | 73 | 380 | 73 | 230 |
Common shares issuable upon conversion of preferred shares (in shares) | 10 | 10 | 10 | 10 |
Shares used in diluted computation (in shares) | 20,344 | 20,568 | 20,318 | 20,384 |
Basic (in dollars per share) | $ 0.13 | $ 0.31 | $ 0.26 | $ 0.53 |
Diluted (in dollars per share) | $ 0.13 | $ 0.31 | $ 0.26 | $ 0.53 |
Net Income Per Share - Narrativ
Net Income Per Share - Narrative (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Common restricted stock (in shares) | 261,228 | 115,219 | 261,228 | 115,219 |
Accounting for Stock-Based Co_2
Accounting for Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Aug. 03, 2022 | Jul. 31, 2022 | Aug. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
2016 Employee Plan | Restricted Stock | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Restricted common shares issued (in shares) | 57,640 | 958,998 | |||||
Restriction period | 3 years | ||||||
2016 Employee Plan | Restricted Stock | Chief Executive Officer | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Issued restricted shares (in shares) | 90,000 | ||||||
Issued restricted share price (in dollars per share) | $ 28.70 | ||||||
2016 Employee Plan | Restricted Stock | Chief Financial Officer | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Issued restricted shares (in shares) | 13,000 | ||||||
2016 Employee Plan | Performance Restricted Stock | Chief Executive Officer | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Issued restricted shares (in shares) | 510,000 | ||||||
Value of shares | $ 9.7 | ||||||
Issued restricted share price (in dollars per share) | $ 19.06 | ||||||
2016 Employee Plan | Performance Restricted Stock | Chief Financial Officer | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Issued restricted shares (in shares) | 3,000 | ||||||
2015 Director Plan | Restricted Stock | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Restricted common shares issued (in shares) | 30,000 | 240,755 | |||||
2015 Director Plan | Restricted Stock | Minimum | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Restriction period | 1 year | ||||||
2015 Director Plan | Restricted Stock | Maximum | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Restriction period | 3 years | ||||||
2016 Employee Plan and 2015 Director Plan | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Compensation expense | $ 1.7 | $ 0.9 | $ 3.2 | $ 1.6 | |||
2016 Employee Plan and 2015 Director Plan | Restricted Stock | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Unrecognized compensation cost | $ 12.2 | $ 15.8 | $ 12.2 | $ 15.8 | |||
Nonvested restricted shares issued and outstanding (in shares) | 776,928 | 734,669 | 776,928 | 734,669 | |||
2016 Employee Plan and 2015 Director Plan | Restricted Stock | Minimum | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Recognition period | 1 year | ||||||
2016 Employee Plan and 2015 Director Plan | Restricted Stock | Maximum | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Recognition period | 3 years | ||||||
2022 Employee Plan | Restricted Stock | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Restricted common shares issued (in shares) | 0 | ||||||
Shares available for issuance (in shares) | 1,000,000 | ||||||
2022 Employee Plan | Restricted Stock | Minimum | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Restriction period | 1 year | ||||||
2022 Employee Plan | Restricted Stock | Maximum | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Restriction period | 10 years | ||||||
2016 Employee Equity Compensation Restricted Stock Plan | Chief Financial Officer | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Grant release restriction period | 3 years |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Mar. 31, 2022 |
Fair Value Disclosures [Abstract] | ||
Cash and cash equivalents | $ 96,546 | $ 111,080 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
State sales tax assessment accruals | $ 900 |
Accrued severance costs | $ 364 |
Note 7 - Changes in Shareholder
Note 7 - Changes in Shareholders' Equity - Schedule of Changes in Shareholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning balance | $ 142,186 | $ 142,186 | ||||
Shares Issued | $ 1 | |||||
Net income | $ 2,579 | 6,349 | 5,354 | $ 10,777 | ||
Ending balance | 138,153 | 138,153 | ||||
Common Stock | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning balance | 21 | 21 | 20 | $ 20 | 21 | 20 |
Ending balance | 21 | 21 | 21 | 20 | 21 | 21 |
Additional Paid-In Capital | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning balance | 13,196 | 11,660 | 7,829 | 7,111 | 11,660 | 7,111 |
Share based compensation | 1,681 | 1,536 | 882 | 718 | ||
Ending balance | 14,877 | 13,196 | 8,711 | 7,829 | 14,877 | 8,711 |
Retained Earnings | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Beginning balance | 126,974 | 130,496 | 132,489 | 134,141 | 130,496 | 134,141 |
Dividends declared | (6,307) | (6,297) | (6,092) | (6,080) | ||
Net income | 2,579 | 2,775 | 6,349 | 4,428 | ||
Ending balance | $ 123,246 | $ 126,974 | $ 132,746 | $ 132,489 | $ 123,246 | $ 132,746 |
Changes in Shareholders' Equi_3
Changes in Shareholders' Equity - Narrative (Details) - USD ($) shares in Thousands, $ in Millions | 6 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Equity [Abstract] | ||
Shares repurchased and retired (in shares) | 0 | 0 |
Remaining authorized repurchase amount | $ 28.7 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 1,031 | $ 1,982 | $ 2,061 | $ 3,342 |
Effective Income Tax Rate Reconciliation, Percent, Total | 28.60% | 23.80% | 27.80% | 23.70% |
Note 9 - Related Party Transact
Note 9 - Related Party Transaction (Details) - Prophet - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Sep. 30, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | |
Related Party Transaction [Line Items] | ||||
Amount of transaction | $ 292 | |||
Related expenses | $ 0 | $ 260 | $ 32 |
Note 10 - Minority Interest Inv
Note 10 - Minority Interest Investment in Vetster (Details Textual) - Partnership Agreement with Vetster $ in Millions | Apr. 19, 2022 USD ($) |
Noncontrolling Interest [Line Items] | |
Term of agreement | 3 years |
Minority interest purchased | 5% |
Investments | $ 5 |
Note 11 - Subsequent Events (De
Note 11 - Subsequent Events (Details Textual) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Nov. 07, 2022 | Nov. 08, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Subsequent Event [Line Items] | ||||||
Cash dividends declared per common share (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.60 | $ 0.60 | ||
Subsequent Event | Quarterly Dividend | ||||||
Subsequent Event [Line Items] | ||||||
Cash dividends declared per common share (in dollars per share) | $ 0.30 | |||||
Dividends payable | $ 6.3 | |||||
Subsequent Event | Employee Stock | 2016 Employee Equity Compensation Restricted Stock Plan | ||||||
Subsequent Event [Line Items] | ||||||
Issued restricted shares (in shares) | 1,000 |