EXHIBIT 99.1
PETMED EXPRESS D/B/A 1-800-PETMEDS ANNOUNCES THIRD QUARTER
FINANCIAL RESULTS - NET SALES INCREASE 21%
Pompano Beach, Florida, January 22, 2007 - PetMed Express, Inc.
(NASDAQ: PETS) today announced its financial results for the
quarter ended December 31, 2006. Net sales for the quarter ended
December 31, 2006 were $31.4 million, compared to $25.9 million
for the quarter ended December 31, 2005, an increase of 21%. Net
income was $2.8 million, or $0.11 diluted per share, for the
quarter ended December 31, 2006, compared to net income of $2.7
million, or $0.11 diluted per share, for the quarter ended
December 31, 2005, an increase to net income of 3%. Net sales
for the nine months ended December 31, 2006 were $125.8 million,
compared to $108.2 million for the nine months ended December 31,
2005, an increase of 16%. Net income was $10.8 million, or $0.44
diluted per share, for the nine months ended December 31, 2006,
compared to net income of $8.9 million, or $0.37 diluted per
share, for the nine months ended December 31, 2005, an increase
to net income of 21%. Approximately 63% of all sales were placed
on the Company's website for the third quarter, compared to 57%
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 27%, from
$7.3 million to $9.2 million for the quarters ended December 31,
2005 and 2006, respectively. We acquired approximately 130,000
new customers for the quarter ended December 31, 2006, compared
to 105,000 for the same quarter in the prior year. Retail
reorder sales increased by 22%, from $18.1 million to $22.1
million for the quarters ended December 31, 2005 and 2006,
respectively, and for the nine months ended December 31, 2006 our
retail reorder sales increased by 26% to $84.1 million from $66.7
million for the nine months ended December 31, 2005. We are also
pleased to report that net cash provided by operating activities
increased by $1.6 million, from $13.5 million for the nine months
ended December 31, 2005 to $15.1 million for the nine months
ended December 31, 2006.
Our focus in 2007 will be on capturing additional market share
and on improving our customer service levels. As previously
announced, our new 2007 advertising campaign features America's
Sweetheart Betty White and we are excited about teaming up with
her to help educate pet owners on keeping their pets healthy
through 1-800-PetMeds where they can purchase their pets'
medications conveniently and at a savings. We invite everyone to
preview our new commercial at our website,
http://www.1800PetMeds.com/videos.asp."
-------------------------------
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
10:00 A.M. on January 22, 2007 until 11:59 P.M. on February 5,
2007. To access the replay, call (866) 454-2124 (toll free) or
(203) 369-1243, 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
December 31, March 31,
2006 2006
(UNAUDITED)
------------ ------------
ASSETS
------
Current assets:
Cash and cash equivalents $ 38,169,594 $ 23,216,907
Accounts receivable, less allowance for doubtful
accounts of $19,000 and $23,000, respectively 921,151 1,155,781
Inventories - finished goods 10,031,304 14,997,675
Prepaid expenses and other current assets 1,979,083 583,038
------------ ------------
Total current assets 51,101,132 39,953,401
Property and equipment, net 1,924,848 1,497,589
Deferred income taxes 1,018,739 794,002
Intangible asset 365,000 365,000
Other assets - 14,167
------------ ------------
Total assets $ 54,409,719 $ 42,624,159
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 3,652,398 $ 3,052,953
Income taxes payable - 958,318
Accrued expenses and other current liabilities 854,802 973,359
------------ ------------
Total liabilities 4,507,200 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;
24,216,217 and 23,967,390 shares issued and outstanding,
respectively 24,216 23,967
Additional paid-in capital 14,876,332 13,433,054
Retained earnings 34,993,073 24,173,610
------------ ------------
Total shareholders' equity 49,902,519 37,639,529
------------ ------------
Total liabilities and shareholders' equity $ 54,409,719 $ 42,624,159
============ ============
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,
2006 2005 2006 2005
------------- ------------- ------------- -------------
Sales $ 31,352,277 $ 25,890,095 $ 125,838,384 $ 108,174,527
Cost of sales 18,563,400 15,613,715 76,002,541 66,188,709
------------- ------------- ------------- -------------
Gross profit 12,788,877 10,276,380 49,835,843 41,985,818
------------- ------------- ------------- -------------
Operating expenses:
General and administrative 4,022,852 3,060,580 12,792,177 10,722,151
Advertising 4,771,341 3,189,099 20,770,700 17,716,234
Depreciation and amortization 129,355 135,638 395,507 394,928
------------- ------------- ------------- -------------
Total operating expenses 8,923,548 6,385,317 33,958,384 28,833,313
------------- ------------- ------------- -------------
Income from operations 3,865,329 3,891,063 15,877,459 13,152,505
------------- ------------- ------------- -------------
Other income (expense):
Interest income 329,141 215,590 917,125 467,742
Other, net 94,964 49,147 332,129 171,255
Loss on disposal of property and equipment - - (1,250) -
------------- ------------- ------------- -------------
Total other income (expense) 424,105 264,737 1,248,004 638,997
------------- ------------- ------------- -------------
Income before provision for income taxes 4,289,434 4,155,800 17,125,463 13,791,502
Provision for income taxes 1,535,200 1,483,708 6,306,000 4,866,998
------------- ------------- ------------- -------------
Net income $ 2,754,234 $ 2,672,092 $ 10,819,463 $ 8,924,504
============= ============ ============= =============
Net income per common share:
Basic $ 0.11 $ 0.11 $ 0.45 $ 0.38
============= ============ ============= =============
Diluted $ 0.11 $ 0.11 $ 0.44 $ 0.37
============= ============ ============= =============
Weighted average number of common shares outstanding:
Basic 24,213,937 23,680,221 24,132,289 23,572,211
============= ============ ============= =============
Diluted 24,382,861 24,255,705 24,316,117 24,105,124
============= ============ ============= =============
99.1 page 3 - 4
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
December 31,
2006 2005
------------ ------------
Cash flows from operating activities:
Net income $ 10,819,463 $ 8,924,504
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 395,507 394,928
Stock based compensation relating to stock issuances 777,426 -
Tax benefit related to stock options exercised - 212,856
Deferred income taxes (224,737) (47,987)
Loss on disposal of property and equipment 1,250 -
Bad debt expense (recovery) 16,038 (16,144)
(Increase) decrease in operating assets
and increase (decrease) in liabilities:
Accounts receivable 218,592 1,154,174
Inventories - finished goods 4,966,371 (392,566)
Prepaid expenses and other current assets (1,396,045) (161,151)
Other assets 14,167 -
Accounts payable 599,445 (865,887)
Income taxes payable (958,318) 3,974,996
Accrued expenses and other current liabilities (118,557) 370,865
------------ ------------
Net cash provided by operating activities 15,110,602 13,548,588
------------ ------------
Cash flows from investing activities:
Purchases of property and equipment (824,416) (250,302)
Net proceeds from the sale of property and equipment 400 -
------------ ------------
Net cash used in investing activities (824,016) (250,302)
------------ ------------
Cash flows from financing activities:
Proceeds from the exercise of stock options 435,064 661,263
Tax benefit related to stock options exercised 231,037 -
------------ ------------
Net cash provided by financing activities 666,101 661,263
------------ ------------
Net increase in cash and cash equivalents 14,952,687 13,959,549
Cash and cash equivalents, at beginning of period 23,216,907 12,680,962
------------ ------------
Cash and cash equivalents, at end of period $ 38,169,594 $ 26,640,511
============ ============
Supplemental disclosure of cash flow information:
Cash paid for income taxes $ 8,104,063 $ 727,132
============ ============
99.1 page 4 - 4