EXHIBIT 99.1
PETMED EXPRESS D/B/A 1-800-PETMEDS ANNOUNCES SECOND QUARTER
FINANCIAL RESULTS - NET INCOME INCREASES 22%
Pompano Beach, Florida, October 23, 2006 - PetMed Express, Inc.
(NASDAQ: PETS) today announced its financial results for the
quarter ended September 30, 2006. Net income was $3.3 million,
or $0.14 diluted per share, for the quarter ended September 30,
2006, compared to net income of $2.7 million, or $0.11 diluted
per share, for the quarter ended September 30, 2005, an increase
to net income of 22%. Net sales for the quarter ended September
30, 2006 were $43.8 million, compared to $38.7 million for the
quarter ended September 30, 2005, an increase of 13%. Net income
was $8.1 million, or $0.33 diluted per share, for the six months
ended September 30, 2006, compared to net income of $6.3 million,
or $0.26 diluted per share, for the six months ended September
30, 2005, an increase to net income of 29%. Net sales for the
six months ended September 30, 2006 were $94.5 million, compared
to $82.3 million for the six months ended September 30, 2005, an
increase of 15%. Approximately 62% of all sales were placed on
the Company's website for the second quarter, compared to 55% for
the same quarter in the prior year.
Menderes Akdag, CEO and President, commented: "We are pleased to
report that our retail reorder sales increased by 23%, from $22.9
million to $28.1 million for the quarters ended September 30,
2005 and 2006, respectively. For the six months ended September
30, 2006 our retail reorder sales increased by 28% to $62.0
million from $48.6 million for the six months ended September 30,
2005. We are currently focused on optimizing our advertising
campaigns and improving our current service levels to capture
additional market share. We are also pleased to report that net
cash provided by operating activities increased by $1.5 million,
from $12.7 million for the six months ended September 30, 2005 to
$14.2 million for the six months ended September 30, 2006."
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, dial (888) 455-1758
(toll free) or (312) 470-7365. 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 23, 2006 until November 6, 2006 at 10:59 P.M. To
access the replay, call (866) 422-8069 (toll free) or (203) 369-
0828, 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, 2006. 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,
2006 2006
------------ ------------
(UNAUDITED)
ASSETS
------
Current assets:
Cash and cash equivalents $ 37,663,345 $ 23,216,907
Accounts receivable, less allowance for doubtful
accounts of $30,000 and $23,000, respectively 1,503,233 1,155,781
Inventories - finished goods 9,863,560 14,997,675
Prepaid expenses and other current assets 1,701,719 583,038
------------ ------------
Total current assets 50,731,857 39,953,401
Property and equipment, net 1,531,926 1,497,589
Deferred income taxes 873,663 794,002
Intangible asset 365,000 365,000
Other assets - 14,167
------------ ------------
Total assets $ 53,502,446 $ 42,624,159
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 5,798,892 $ 3,052,953
Income taxes payable - 958,318
Accrued expenses and other current liabilities 1,008,076 973,359
------------ ------------
Total liabilities 6,806,968 4,984,630
------------ ------------
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; 24,212,501 and 23,967,390 shares
issued and outstanding, respectively 24,213 23,967
Additional paid-in capital 14,423,528 13,433,054
Retained earnings 32,238,839 24,173,610
------------ ------------
Total shareholders' equity 46,695,478 37,639,529
------------ ------------
Total liabilities and shareholders' equity $ 53,502,446 $ 42,624,159
============ ============
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,
2006 2005 2006 2005
------------ ------------- ------------- -------------
Sales $ 43,812,754 $ 38,652,674 $ 94,486,107 $ 82,284,432
Cost of sales 26,890,113 23,801,822 57,439,141 50,574,994
------------ ------------- ------------- -------------
Gross profit 16,922,641 14,850,852 37,046,966 31,709,438
------------ ------------- ------------- -------------
Operating expenses:
General and administrative 4,320,703 3,808,677 8,769,325 7,661,571
Advertising 7,670,641 6,922,832 15,999,359 14,527,135
Depreciation and amortization 130,851 131,745 266,152 259,290
------------ ------------- ------------- -------------
Total operating expenses 12,122,195 10,863,254 25,034,836 22,447,996
------------ ------------- ------------- -------------
Income from operations 4,800,446 3,987,598 12,012,130 9,261,442
------------ ------------- ------------- -------------
Other income (expense):
Interest income 336,817 152,715 587,984 252,152
Other, net 136,763 81,821 237,165 122,108
Loss on disposal of property
and equipment - - (1,250) -
------------ ------------- ------------- -------------
Total other income (expense) 473,580 234,536 823,899 374,260
------------ ------------- ------------- -------------
Income before provision for income taxes 5,274,026 4,222,134 12,836,029 9,635,702
Provision for income taxes 1,959,055 1,511,308 4,770,800 3,383,290
------------ ------------- ------------- -------------
Net income $ 3,314,971 $ 2,710,826 $ 8,065,229 $ 6,252,412
============ ============= ============= =============
Net income per common share:
Basic $ 0.14 $ 0.12 $ 0.33 $ 0.27
============ ============= ============= =============
Diluted $ 0.14 $ 0.11 $ 0.33 $ 0.26
============ ============= ============= =============
Weighted average number of common
shares outstanding:
Basic 24,172,319 23,564,051 24,091,242 23,517,911
============ ============= ============= =============
Diluted 24,240,345 24,111,210 24,223,267 24,032,552
============ ============= ============= =============
99.1 page 3 - 4
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
September 30,
2006 2005
------------ ------------
Cash flows from operating activities:
Net income $ 8,065,229 $ 6,252,412
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 266,152 259,290
Compensation expense relating to stock issuances 489,488 -
Tax benefit related to stock options exercised - 38,110
Deferred income taxes (79,661) (18,353)
Loss on disposal of property and equipment 1,250 -
Bad debt expense (recovery) 27,565 (15,616)
(Increase) decrease in operating assets
and increase (decrease) in liabilities:
Accounts receivable (375,017) 817,099
Inventories - finished goods 5,134,115 2,812,609
Prepaid expenses and other current assets (1,118,681) (298,569)
Other assets 14,167 -
Accounts payable 2,745,939 (242,986)
Income taxes payable (958,318) 2,636,401
Accrued expenses and other current liabilities 34,717 440,690
------------ ------------
Net cash provided by operating activities 14,246,945 12,681,087
------------ ------------
Cash flows from investing activities:
Purchases of property and equipment (302,139) (30,915)
Net proceeds from the sale of property and equipment 400 -
------------ ------------
Net cash used in investing activities (301,739) (30,915)
------------ ------------
Cash flows from financing activities:
Proceeds from the exercise of stock options 421,513 285,962
Tax benefit related to stock options exercised 79,719 -
------------ ------------
Net cash provided by financing activities 501,232 285,962
------------ ------------
Net increase in cash and cash equivalents 14,446,438 12,936,134
Cash and cash equivalents, at beginning of period 23,216,907 12,680,962
------------ ------------
Cash and cash equivalents, at end of period $ 37,663,345 $ 25,617,096
============ ============
Supplemental disclosure of cash flow information:
Cash paid for income taxes $ 6,364,063 $ 727,132
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99.1 page 4 - 4