EXHIBIT 99.1
Date: October 24, 2005
Contact: Bruce S. Rosenbloom, CFO
Phone: (954) 979 5995
Fax: (954) 971 0544
PETMED EXPRESS D/B/A 1-800-PETMEDS ANNOUNCES RECORD SECOND QUARTER
FINANCIAL RESULTS - SALES INCREASE 34%, NET INCOME INCREASES 50%
Pompano Beach, Florida, October 24, 2005 - PetMed Express, Inc.
(NASDAQ: PETS) today announced its financial results for the quarter
ended September 30, 2005. Net sales for the quarter ended September
30, 2005 were $38.7 million, compared to $28.8 million for the quarter
ended September 30, 2004, an increase of 34%. Net income was $2.7
million, or $0.11 diluted per share, for the quarter ended September
30, 2005, compared to net income of $1.8 million, or $0.08 diluted per
share, for the quarter ended September 30, 2004, an increase to net
income of 50%. Net sales for the six months ended September 30, 2005
were $82.3 million, compared to $64.0 million for the six months ended
September 30, 2004, an increase of 28%. Net income for the six months
ended September 30, 2005 was $6.3 million, or $0.26 diluted per share,
compared to net income of $3.6 million, or $0.15 diluted per share,
for the six months ended September 30, 2004, an increase to net income
of 72%.
The Company acquired approximately 208,000 new customers during the
second fiscal quarter compared to 154,000 new customers for the same
quarter in the prior year. Approximately 55% of all orders were
placed on the Company's website for the second fiscal quarter,
compared to 52% for the same quarter in the prior year.
Menderes Akdag, CEO and President, commented: "We are pleased to
report that our retail new order sales increased by 35% to $14.7
million for the second fiscal quarter compared to $10.9 million for
the same quarter in the prior year. The advertising cost of acquiring
a new customer for the second fiscal quarter was approximately $33
compared to $37 for the same quarter in the prior year. This
improvement in the cost of customer acquisition can be attributed to
increased advertising efficiency with more effective advertising. In
addition, our retail reorder sales increased by 33%, from $17.2
million to $22.9 million for the quarters ended September 30, 2004 and
2005, respectively. We are also pleased to report that net cash
provided by operating activities increased by $6.1 million, from $6.6
million for the six months ended September 30, 2004 to $12.7 million
for the six months ended September 30, 2005."
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, call (888) 455-1758 (toll free)
or (210) 234-0007. 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 October 24, 2005 until
November 7, 2005 at 11:59 P.M. To access the replay, call (866) 422-
8142 (toll free) or (203) 369-0830, 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 at www.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,
2005. 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.
###
99.1 page 1 - 4
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, March 31,
2005 2005
------------- -------------
(UNAUDITED)
ASSETS
------
Current assets:
Cash and cash equivalents $ 25,617,096 $ 12,680,962
Accounts receivable, less allowance
for doubtful accounts of $20,000
and $37,000, respectively 995,273 1,796,756
Inventories - finished goods 8,367,724 11,180,333
Prepaid expenses and other current
assets 511,721 213,152
------------- -------------
Total current assets 35,491,814 25,871,203
Property and equipment, net 1,057,892 1,286,267
Deferred income taxes 601,199 582,846
Intangible asset 365,000 365,000
Other assets 14,167 14,167
------------- -------------
Total assets $ 37,530,072 $ 28,119,483
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 2,482,004 $ 2,724,990
Income taxes payable 3,237,936 601,535
Accrued expenses and other current
liabilities 1,016,584 575,894
------------- -------------
Total liabilities 6,736,524 3,902,419
------------- -------------
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;
23,618,481 and 23,458,725 shares
issued and outstanding,
respectively 23,618 23,459
Additional paid-in capital 12,398,524 12,074,611
Retained earnings 18,362,508 12,110,096
------------- -------------
Total shareholders' equity 30,793,548 24,217,064
------------- -------------
Total liabilities and shareholders'
equity $ 37,530,072 $ 28,119,483
============= =============
99.1 page 2 - 4
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
September 30, September 30,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Sales $ 38,652,674 $ 28,754,697 $ 82,284,432 $ 64,043,225
Cost of sales 23,801,822 17,141,556 50,574,994 38,568,275
------------ ------------ ------------ ------------
Gross profit 14,850,852 11,613,141 31,709,438 25,474,950
------------ ------------ ------------ ------------
Operating expenses:
General and administrative 3,808,677 2,971,268 7,661,571 6,193,173
Advertising 6,922,832 5,629,991 14,527,135 13,384,820
Depreciation and amortization 131,745 155,294 259,290 314,353
------------ ------------ ------------ ------------
Total operating expenses 10,863,254 8,756,553 22,447,996 19,892,346
------------ ------------ ------------ ------------
Income from operations 3,987,598 2,856,588 9,261,442 5,582,604
------------ ------------ ------------ ------------
Other income (expense)
Interest expense - (138) - (880)
Interest income 152,715 17,372 252,152 22,005
Other, net 81,821 1,821 122,108 1,411
------------ ------------ ------------ ------------
Total other income (expense) 234,536 19,055 374,260 22,536
------------ ------------ ------------ ------------
Income before provision for
income taxes 4,222,134 2,875,643 9,635,702 5,605,140
Provision for income taxes 1,511,308 1,063,988 3,383,290 1,975,347
------------ ------------ ------------ ------------
Net income 2,710,826 1,811,655 6,252,412 3,629,793
============ ============ ============ ============
Net income per common share:
Basic 0.12 0.08 0.27 0.16
============ ============ ============ ============
Diluted 0.11 0.08 0.26 0.15
============ ============ ============ ============
Weighted average number of
common shares outstanding:
Basic 23,564,051 22,719,266 23,517,911 22,370,162
============ ============ ============ ============
Diluted 24,111,210 23,860,513 24,032,552 23,463,939
============ ============ ============ ============
99.1 page 3 - 4
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
September 30, March 31,
2005 2005
------------- -------------
(UNAUDITED)
Cash flows from operating activities:
Net income $ 6,252,412 $ 3,629,793
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 259,290 314,353
Tax benefit related to stock options
exercised 38,110 690,512
Deferred income taxes (18,353) -
Bad debt expense (15,616) 5,852
(Increase) decrease in operating assets
and liabilities:
Accounts receivable 817,099 365,588
Inventories - finished goods 2,812,609 1,767,015
Prepaid expenses and other current
assets (298,569) (98,674)
Other assets - 7,655
Accounts payable (242,986) 25,410
Income taxes payable 2,636,401 162,390
Accrued expenses and other current
liabilities 440,690 (273,716)
------------- -------------
Net cash provided by operating activities 12,681,087 6,596,178
------------- -------------
Cash flows from investing activities:
Purchases of property and equipment (30,915) (110,583)
------------- -------------
Net cash used in investing activities (30,915) (110,583)
------------- -------------
Cash flows from financing activities:
Proceeds from the exercise of stock options,
warrants, and other transactions 285,962 1,093,835
Payments on the loan obligation - (68,442)
------------- -------------
Net cash provided by financing activities 285,962 1,025,393
------------- -------------
Net increase in cash and cash equivalents 12,936,134 7,510,988
Cash and cash equivalents, at beginning of
period 12,680,962 3,278,926
------------- -------------
Cash and cash equivalents, at end of period $ 25,617,096 $ 10,789,914
============= =============
Supplemental disclosure of cash flow
information:
Cash paid for interest $ - $ 802
============= =============
Cash paid for income taxes $ 727,132 $ 1,122,445
============= =============
99.1 page 4 - 4