PETS - Earnings call transcript Q1 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the PetMed Express Incorporated doing business as a 1-800-PetMeds Conference Call to review the Financial Results for the First Fiscal Quarter ended on June 30, 2018. At the request of the company, this conference call is being recorded. Founded in 1996, 1-800-PetMeds is America’s largest pet pharmacy, delivering prescription and non-prescription pet medications and other health products for dogs and cats direct to the customer. 1-800-PetMeds markets its products through national advertising campaigns, which direct consumers to order by phone or on the Internet, and aimed to increase the recognition of PetMed family of brand names. 1-800-PetMeds provides an attractive alternative for obtaining pet medications in terms of convenience, price, ease of ordering and rapid home delivery. would Chief turn Financial I to call time, company’s the Officer, this like the to over At Mr. Bruce Rosenbloom.

Bruce Rosenbloom

Thank to you. welcome everybody here like I today. would

Before will remind within be statements Actual well everyone may vary Akdag, the different the beliefs will that on implied from of the first statements. performance in concerning involve which to Executive the I will Commission this later I include until that included call this Litigation forward-looking based conference current These the press certain uncertainties that events of statements these and are materially future us. XXXX actual have be available future used our Securities these cause risks, achievements Securities expressed to session, or number call based as call. results Private Officer, to President listen-only be results Chief the we conference Mendo like would these of may or portion statements of turn on as information currently assumptions. significantly a the be future Because of views our events, upon to and that over meaning in the may information by may Act and Also, our assumptions Reform a the question-and-answer and or reflect risks statements uncertainties. factors number or based results, involve Exchange

factors with Securities recent report filings annual have associated the our most our Commission. Exchange and identified with We various operations risk in and other

Mendo? Chief speaker, President today’s introduce the me and let Executive X-XXX-PetMeds. Officer of Akdag, Now, Mendo

Mendo Akdag

our to Today, first you XXXX thank year’s Thank June review highlights ended you, ended June compare our us. everyone We’ll the results. last XXXX. joining Bruce. we XX, financial on Welcome will on XX, fiscal quarter for and of

increases the ended million XX, prior were the same on first XXXX, of of $XX.X reorder $XX.X period in For and increase sales. The sales new of for to XX%. compared June due sales order quarter increase sales in year, to the an fiscal million was

$XX to same value Our approximately year. quarter average was the or order $XX quarter of the for last compared

first the to or income per $X.XX year, same net per quarter million $X.XX income diluted share fiscal was For quarter, an compared increase $XX.X $X.X for or diluted share of million the net last XX%. to

In addition boost helped of our Act The sales, Reform Tax to to increased earnings. XXXX

on to to order summer sales acquire were prior by quarter sales in XX% last XX,XXX for of Approximately period quarter $XX.X in for $XX.X X.X% New website same online sales our the the million to our the increased quarter same a our million sales year, resulted increase $XX.X of in quarter, for our XX% compared customers to generated XX% for are sales the period for XX% which flea, same in than to and and for year. peak with being same the the fiscal product quarter. to considered The our the prior the year. compared the $XX.X million compared the reorder for similar Reorder by the last approximately quarter quarter We first to increased new year. business million off-season. proportion due seasonality tick mix. is winter heartworm the seasons, full-on medications our of Spring in harder

slight additional in million profit to in the sales year-ago. gross increase XX.X% The was decrease For of due was discounts same the given customers to $X.X increase sales, as percent a our to the a first quarter. gross fiscal for period quarter, a which for compared to profit resulted XX.X%

acquiring in year. payables an cash for as the approximately a increase million compared debt same for The million We for $X.X of the $XX $XX due was to the the compared period ready ends the increases increase income. period compared Our Operator, with general million the was cash we’re same in cost $XX and in $XX.X due compared financial and the majority to was year, last to same ago. $XX.X to million XXXX. This X.X% to expenses for a last questions. increases million of relatively in and $X.X year. quarter cash to was flat the sale inventory The costs. X.X% administrative spent prior customer of advertising increase million to same equivalents had quarter percent June of advertising as for review. quarter the X.X%. net a Net was operations year in advertising take We for quarter no of XX, $XX The from and at

Operator

Thank you.

question We session. first comes Hallum. Kevin [Operator your from question-and-answer will the line Craig from now is Our Ellich open. Instructions] Sir begin

Kevin Ellich

buying good was for a any on and versus Mendo, the morning. have cut Thanks right that down margins, gross patterns Hey, this off for in we comment thanks real year. Are seeing which changes you up out any generation cut the flea color behind the still and you is or medications could And detail in oral give next and you like that? that us newer strong? tick products that or past going

Mendo Akdag

strong. going market was The competitive. more still is That

So customers to discounts sales. stimulate to additional given we've

Kevin Ellich

or And it and you general? mortar in when just is markets are more you online say talking really about the competitive competitors or more is from competitive, brick

Mendo Akdag

reduced have prices in significantly. More smaller their line, players

We're So competitive. currently pricing. current we're our with comfortable

Kevin Ellich

discounts? And do you still Okay. plan those And competition, forward? to increased offering that are to offering with going you continue

Mendo Akdag

going to mean, will. Probably, the that. is dictate we condition market I

Kevin Ellich

X.X% order Is we And it. was when little to from up sales the tough a but that is obviously, a you Okay, that, guess, nicely sales look explains up the I maybe had at of than XX%, comp with competitive reordering year, due which really revenue, expected. that was then, got last landscape? lower strong new

Mendo Akdag

acquisition concerned, the as so focused last cost main increase. are dollars, That’s up advertising profits up, And were as $X.X million to compared gross the profit more The up. far cost quarters. is cost the reason gross we're for on is which

Kevin Ellich

that continue to with we that up then year? And think customer cost, in is to going should that range it's in rest of acquisition $XX or advertising Okay. cost be -- the the new for $XX

Mendo Akdag

a assumption. be Probably, that good probably would

Kevin Ellich

before one I then you in the thoughts slip lot on And of that other you you a cash more Bruce, strategy? capital cash, dividend building now is nicely, which have and using on Okay. sheet, cash obviously, increased the allocation balance to your for and

Mendo Akdag

have this don’t any time. plans We at specific

As you dividends increased we dividend $X.XX? the know, we paid and by

Kevin Ellich

was capital? in the on guess a think we Or Got was how Bruce just sort you. million, when I quickly, up are strong, of flow And really payable cash. million paid? accounts Is notice should timing then that bills $XX some $X.X working about changes cash

Bruce Rosenbloom

mean, something pretty Yes, made suppliers payables much both it’s that predominantly is will the somewhat consistent right. but probably be than forward. consistent suppliers and I obviously, timing up I that’s number advertising should be that’s that more payables anything, moving think Yes, as well. somewhat

Operator

you. Thank

Erin Ma'am is your question open. Wright next from from comes line Credit Suisse. Our

Erin Wright

you well? can on an channel products guess, sourcing your distributor I is from relationship? your Thanks. over-the-counter and today, through of both you Great. if the manufacturers, provide versus as on any, are gray-market How Thanks. the much product what -- update guess I prescription from going prescription direct

Mendo Akdag

look disclosed at have don’t XX-K. suggest We our we've our to what in anything you really add I to XX-K.

to it. not And at vendor am Our liberty are proprietary relationships I discuss and confidential.

Erin Wright

that to be Great. think we are the quarterly products, should the new guess, higher And benefits products that gross Thanks. that of margin you’re there How seeing? could on the progression trend? the are horizon about any in offsetting guess, perspective, you lap, guess. that’s some I fair. I from I Well, from profit margin parasiticide a it Thanks. of starting seems like

Mendo Akdag

shift The is medication It’s to market new more the generation just now there competitive. continuing. is

competitive. more become have medications generation New

Erin Wright

And M&A I guess, the perspective, to -- the Great. -- of terms any perspective? changes of advertising of in And anticipate your change or anything anything your to a deployment you at from capital sort see from all? kind also Thanks. on seeing are there? you horizon then, on Do do Okay. strategy, speak can deployment you strategy then capital you any an

Mendo Akdag

Advertising similar last was year. fairly to

on We not any changes than have spend worm. made other

during makes And we pops it. sense, acquisition do course some why as of that’s cash keep do As to obviously, look is on business. will we we’d there's cats, concern. something like at that far also up If opportunities And normal hand.

Operator

Instructions]. [Operator

line CL your David from question open. comes Sir, next from Our Westenberg King. is

David Westenberg

Hey, the question. thanks taking for

have the guys manufacturers March of already may asked color be been us up? get But season. you tick quarter? of people flea lands Are QX more buying here. season? you a it see some pick having little products talked in may most tick to being or mine if just you a can -- of and Some didn’t bit and to seeing may be be and plus flea give some kind any so, mortar most slow on and brick that So tick your opportunities -- for buying it be the flea or of do And about may consumers the from of start

Mendo Akdag

was start, good slow it probably was that late picking May agree a pretty would started April. last of June at week so. and And We up

David Westenberg

there’s subsequent pickup the have anticipates? quarters? guess Buying order I that be effect no slow But may that start on anticipated would or

Mendo Akdag

growth We in the March slow was The because was had reason it a single-digit -- our start. quarter. was

Operator

the Thank please Akdag, proceed. phone. questions no Mr. this you. time over At

Mendo Akdag

back could you go him Anthony Actually, queue what question could to more if Lebiedzinski one you in? from

Operator

Absolutely.

your comes from Our open. question Sir, is & Company. Lebiedzinski line Sidoti from next Anthony

Anthony Lebiedzinski

Yes, and good Bruce morning, Mendo.

of and far to I as So tick that flea start this assume follow-up, somewhat because case? as so the weather just being wanted to a Is unfavorable. the slow is season, the

Mendo Akdag

That is Yes. correct.

Anthony Lebiedzinski

Right.

Okay.

new close from new do down new X% So just did of in X%. trends, now it the or targeting order more sequentially as you to order as same customers at quarter Did of the far I when improve strategy? kind look to you differently sales up close guys sales were anything to when your march

Mendo Akdag

we and to More of the sales. additional same given discounts have stimulate

Anthony Lebiedzinski

strategy is to Got And continue with? you this a want still it.

Mendo Akdag

required, conditions yes. market the If

Anthony Lebiedzinski

Okay.

and So how far assume, nimble I your you be you your strategy, pricing can't as adjust right? as

Mendo Akdag

correct. is Yes. That

Anthony Lebiedzinski

nice your that ago, is Okay. increase we driving just AOV from a explain expectation improvement forward? And that there. another going And the as quarter as what’s saw a you and year this can far

Mendo Akdag

new the quarter. continued generation medications to in shift June The

Anthony Lebiedzinski

far And the medications the do in or progression far you adoption as far as as we that, next think as are by where consumers? generation as of where we are these as, end

Mendo Akdag

We’ll year. would be another my continuing. for continue It’s probably for, guess,

Anthony Lebiedzinski

Thank you. Okay.

Operator

Thank you.

questions now any Mr. have the we proceed. Akdag, over of phone. please don’t As Mendo

Mendo Akdag

our improve sales further focusing on today’s for conference service you. Thank conference Thank up fiscal levels. XXXX, wraps call. this In call. ends increase Operator, joining This us. to continuing the and you we’re

Operator

joining. so call. for Thank participants. today’s That conference you much you Thank all concludes

You may now disconnect.

PetMed Express (PETS) 23 Jul 182018 Q1 Earnings call transcript