First Quarter Net Income Increased 36%

First Quarter Sales Increased 10%

First Quarter Diluted EPS $0.62 per share vs $0.45 per share

DELRAY BEACH, Fla., July 23, 2018 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the quarter ended June 30, 2018. Net sales for the quarter ended June 30, 2018 were $87.4 million, compared to $79.7 million for the quarter ended June 30, 2017, an increase of 10%. Reorder sales increased 11%, to $71.5 million for the quarter ended June 30, 2018, compared to $64.5 million for the same quarter in the prior year. New order sales increased 4.6%, to $15.9 million for the quarter ended June 30, 2018, compared to $15.2 million for the same quarter in the prior year. Net income was $12.6 million, or $0.62 diluted per share, for the quarter ended June 30, 2018, compared to net income of $9.3 million, or $0.45 diluted per share, for the quarter ended June 30, 2017, a 36% increase in net income. The Company’s online sales for the quarter ended June 30, 2018 were approximately 85% of all sales compared to 84% for the same quarter the prior year, with online sales increasing 12%.

Menderes Akdag, President and CEO, commented: “We were pleased with increases in both new order and reorder sales during the quarter, along with continued net income growth. This increase to net income can be attributed to increased revenues, which increased gross profit by $2.5 million. In addition, our net income growth was boosted by the Tax Reform Act of 2017, due to a decline in our federal tax rate from 35% to 21%. We expect our effective tax rate in fiscal 2019 to be approximately 24%. Average order value increased to $90 for the quarter compared to $87 for the same quarter the prior year. Net cash from operations for the quarter ended June 30, 2018 was $22.0 million, compared to $13.9 million for the same period last year. In fiscal 2019, we will look to build on past successes by focusing on sales growth and further improving our customer service levels.”

The Board of Directors declared an increased quarterly dividend of $0.27 per share on the Company’s common stock. The dividend will be payable on August 10, 2018, to shareholders of record at the close of business on August 3, 2018. The Company intends to continue to pay regular quarterly dividends; however, the declaration and payment of future dividends is discretionary and will be subject to a determination by the Board of Directors each quarter following its review of the Company’s financial performance.

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, please dial (888) 455-1758 (toll free) or (203) 827-7025. 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 July 23, 2018 until August 6, 2018 at 11:59 P.M. To access the replay, call (888) 277-5024 (toll free) or (203) 369-3021, 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 and cats 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, 2018. 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, 561-526-4444.

PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for per share amounts)
		June 30,			March 31,
		2018			2018
ASSETS		(Unaudited)
Current assets:
Cash and cash equivalents	$	94,561		$	77,936
Accounts receivable, less allowance for doubtful accounts of $37 and $35, respectively		2,431			2,292
Inventories - finished goods		25,046			23,337
Prepaid expenses and other current assets		1,278			882
Prepaid income taxes		-			788
Total current assets		123,316			105,235
Noncurrent assets:
Property and equipment, net		28,491			28,741
Intangible assets		860			860
Total noncurrent assets		29,351			29,601
Total assets	$	152,667		$	134,836
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	21,182		$	15,274
Accrued expenses and other current liabilities		3,526			2,835
Income taxes payable		3,247			-
Total current liabilities		27,955			18,109
Deferred tax liabilities		831			996
Total liabilities		28,786			19,105
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.001 par value, 5,000 shares authorized; 3 convertible shares issued and outstanding with a liquidation preference of $4 per share		9			9
Common stock, $.001 par value, 40,000 shares authorized; 20,601 and 20,601 shares issued and outstanding, respectively		21			21
Additional paid-in capital		10,100			9,381
Retained earnings		113,751			106,320
Total shareholders' equity		123,881			115,731
Total liabilities and shareholders' equity	$	152,667		$	134,836

PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except for per share amounts) (Unaudited)
		Three Months Ended
		June 30,
		2018			2017
Sales	$	87,390		$	79,657
Cost of sales		57,436			52,192
Gross profit		29,954			27,465
Operating expenses:
General and administrative		6,934			6,226
Advertising		6,707			6,292
Depreciation		556			531
Total operating expenses		14,197			13,049
Income from operations		15,757			14,416
Other income:
Interest income, net		379			83
Other, net		317			241
Total other income		696			324
Income before provision for income taxes		16,453			14,740
Provision for income taxes		3,871			5,464
Net income	$	12,582		$	9,276
Comprehensive income	$	12,582		$	9,276
Net income per common share:
Basic	$	0.62		$	0.46
Diluted	$	0.62		$	0.45
Weighted average number of common shares outstanding:
Basic		20,408			20,293
Diluted		20,449			20,448
Cash dividends declared per common share	$	0.25		$	0.20

PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
		Three Months Ended
		June 30,
		2018				2017
Cash flows from operating activities:
Net income	$	12,582			$	9,276
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		556				531
Share based compensation		719				494
Deferred income taxes		(165	)			(104	)
Bad debt expense		32				28
(Increase) decrease in operating assets and increase in liabilities:
Accounts receivable		(171	)			(279	)
Inventories - finished goods		(1,709	)			(2,804	)
Prepaid income taxes		788				-
Prepaid expenses and other current assets		(396	)			(494	)
Accounts payable		5,908				984
Accrued expenses and other current liabilities		643				696
Income taxes payable		3,247				5,568
Net cash provided by operating activities		22,034				13,896
Cash flows from investing activities:
Purchases of property and equipment		(306	)			(43	)
Net cash used in investing activities		(306	)			(43	)
Cash flows from financing activities:
Dividends paid		(5,103	)			(4,058	)
Net cash used in financing activities		(5,103	)			(4,058	)
Net increase in cash and cash equivalents		16,625				9,795
Cash and cash equivalents, at beginning of period		77,936				58,730
Cash and cash equivalents, at end of period	$	94,561			$	68,525
Supplemental disclosure of cash flow information:
Dividends payable in accrued expenses	$	288			$	263

Source: PetMed Express, Inc.

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