EXHIBIT 99.1
Date: January 23, 2006
Contact: Bruce S. Rosenbloom, CFO
Phone: (954) 979 5995
Fax: (954) 971 0544
PETMED EXPRESS D/B/A 1-800-PETMEDS ANNOUNCES RECORD THIRD QUARTER
FINANCIAL RESULTS - SALES INCREASE 25%, NET INCOME INCREASES 37%
Pompano Beach, Florida, January 23, 2006 - PetMed Express, Inc.
(NASDAQ: PETS) today announced its financial results for the
quarter ended December 31, 2005. Net sales for the quarter ended
December 31, 2005 were $25.9 million, compared to $20.8 million
for the quarter ended December 31, 2004, an increase of 25%. Net
income was $2.7 million, or $0.11 diluted per share, for the
quarter ended December 31, 2005, compared to net income of $2.0
million, or $0.08 diluted per share, for the quarter ended
December 31, 2004, an increase to net income of 37%. Net sales
for the nine months ended December 31, 2005 were $108.2 million,
compared to $84.8 million for the nine months ended December 31,
2004, an increase of 28%. Net income for the nine months ended
December 31, 2005 was $8.9 million, or $0.37 diluted per share,
compared to net income of $5.6 million, or $0.23 diluted per
share, for the nine months ended December 31, 2004, an increase
to net income of 60%.
The Company acquired approximately 105,000 new customers during
the third fiscal quarter compared to 85,000 new customers for the
same quarter in the prior year. Approximately 57% of all orders
were placed on the Company's website during the third fiscal
quarter.
Menderes Akdag, CEO and President, commented: "We are pleased to
report that our retail new order sales increased by 26% to $7.3
million for the third fiscal quarter compared to $5.8 million for
the same quarter in the prior year. The advertising cost of
acquiring a new customer for the third fiscal quarter improved to
approximately $30 compared to $31 for the same quarter in the
prior year. In addition, our retail reorder sales increased by
25%, from $14.5 million to $18.1 million for the quarters ended
December 31, 2004 and 2005, respectively. We are also pleased to
report that net cash provided by operating activities increased
by $10.0 million, from $3.5 million for the nine months ended
December 31, 2004 to $13.5 million for the nine months ended
December 31, 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) 234-0010. 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 January 23, 2006 until February 6, 2006 at 5:00 P.M. To
access the replay, call (866) 487-7597 (toll free) or (203) 369-
1654, 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
December 31, March 31,
2005 2005
----------- -----------
(UNAUDITED)
ASSETS
------
Current assets:
Cash and cash equivalents $ 26,640,511 $ 12,680,962
Accounts receivable, less allowance for
doubtful accounts of $13,000 and $37,000,
respectively 658,726 1,796,756
Inventories - finished goods 11,572,899 11,180,333
Prepaid expenses and other current assets 374,303 213,152
----------- -----------
Total current assets 39,246,439 25,871,203
Property and equipment, net 1,141,641 1,286,267
Deferred income taxes 630,833 582,846
Intangible asset 365,000 365,000
Other assets 14,167 14,167
----------- -----------
Total assets $ 41,398,080 $ 28,119,483
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 1,859,103 $ 2,724,990
Income taxes payable 4,576,531 601,535
Accrued expenses and other current liabilities 946,759 575,894
----------- -----------
Total liabilities 7,382,393 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; 23,728,555 and 23,458,725 shares
issued and outstanding, respectively 23,729 23,459
Additional paid-in capital 12,948,460 12,074,611
Retained earnings 21,034,600 12,110,096
----------- -----------
Total shareholders' equity 34,015,687 24,217,064
----------- -----------
Total liabilities and shareholders' equity $ 41,398,080 $ 28,119,483
=========== ===========
99.1 page 2 - 4
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Nine Months Ended
December 31, December 31,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Sales $ 25,890,095 $ 20,782,837 $ 108,174,527 $ 84,826,062
Cost of sales 15,613,715 12,337,310 66,188,709 50,905,585
------------ ------------ ------------ ------------
Gross profit 10,276,380 8,445,527 41,985,818 33,920,477
------------ ------------ ------------ ------------
Operating expenses:
General and administrative 3,060,580 2,541,197 10,722,151 8,734,370
Advertising 3,189,099 2,628,090 17,716,234 16,012,910
Depreciation and amortization 135,638 146,609 394,928 460,962
------------ ------------ ------------ ------------
Total operating expenses 6,385,317 5,315,896 28,833,313 25,208,242
------------ ------------ ------------ ------------
Income from operations 3,891,063 3,129,631 13,152,505 8,712,235
------------ ------------ ------------ ------------
Other income (expense):
Interest expense - - - (880)
Interest income 215,590 33,409 467,742 55,414
Other, net 49,147 906 171,255 2,317
------------ ------------ ------------ ------------
Total other income (expense) 264,737 34,315 638,997 56,851
------------ ------------ ------------ ------------
Income before provision for income taxes 4,155,800 3,163,946 13,791,502 8,769,086
Provision for income taxes 1,483,708 1,206,835 4,866,998 3,182,182
------------ ------------ ------------ ------------
Net income 2,672,092 1,957,111 8,924,504 5,586,904
============ =========== ============ ============
Net income per common share:
Basic $ 0.11 $ 0.08 $ 0.38 $ 0.25
============ =========== ============ ============
Diluted $ 0.11 $ 0.08 $ 0.37 $ 0.23
============ =========== ============ ============
Weighted average number of common shares
outstanding:
Basic 23,680,221 23,266,549 23,572,211 22,670,044
============ =========== ============ ============
Diluted 24,255,705 23,903,297 24,105,124 23,867,698
============ =========== ============ ============
99.1 page 3 - 4
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
December 31,
2005 2004
----------- -----------
Cash flows from operating activities:
Net income $ 8,924,504 $ 5,586,904
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 394,928 460,962
Tax benefit related to stock options exercised 212,856 826,476
Deferred income taxes (47,987) (77,455)
Bad debt expense (recovery) (16,144) (14,530)
(Increase) decrease in operating assets and liabilities:
Accounts receivable 1,154,174 849,394
Inventories - finished goods (392,566) (2,276,359)
Prepaid expenses and other current assets (161,151) (63,947)
Other assets - 7,655
Accounts payable (865,887) (1,698,494)
Income taxes payable 3,974,996 123,489
Accrued expenses and other current liabilities 370,865 (187,771)
----------- -----------
Net cash provided by operating activities 13,548,588 3,536,324
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment (250,302) (146,623)
----------- -----------
Net cash used in investing activities (250,302) (146,623)
----------- -----------
Cash flows from financing activities:
Proceeds from the exercise of stock options,
warrants, and other transactions 661,263 1,225,835
Payments on the loan obligation - (68,442)
----------- -----------
Net cash provided by financing activities 661,263 1,157,393
----------- -----------
Net increase in cash and cash equivalents 13,959,549 4,547,094
Cash and cash equivalents, at beginning of period 12,680,962 3,278,926
----------- -----------
Cash and cash equivalents, at end of period $ 26,640,511 $ 7,826,020
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for interest $ - $ 802
=========== ===========
Cash paid for income taxes $ 727,132 $ 2,309,672
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99.1 page 4 - 4