• PetMeds® Announces Its First Quarter Financial Results and Declares a Quarterly Dividend of $0.30 Per Share

    المصدر: Nasdaq GlobeNewswire / 25 يوليو 2022 16:00:00   America/New_York

    DELRAY BEACH, Fla., July 25, 2022 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (NASDAQ: PETS), Your Trusted Pet Health ExpertTM, today announced its financial results for its first quarter ended June 30, 2022. Net sales for the quarter ended June 30, 2022, were $70.2 million, compared to $79.3 million for first quarter in the prior year, a decrease of 11.5%. Net income for the quarter ended June 30, 2022 was $2.8 million, or $0.14 diluted earnings per share, compared to net income of $4.4 million, or $0.22 diluted earnings per share, for the prior year quarter ended June 30, 2021. Adjusted EBITDA (1) was $6.3 million, or $0.31 diluted earnings per share, for the current year quarter, compared to adjusted EBITDA of $7.1 million, or $0.35 diluted earnings per share, for the quarter ended June 30, 2021, a decrease to adjusted EBITDA of 10%.

    “While disappointed with the quarterly sales results, I remain encouraged by some of the underlying trends we are seeing,” said Matt Hulett, CEO and President, “We knew early in the quarter that the colder temperatures, particularly in April, would have a material impact to sales due to the delay in our seasonally sensitive flea and tick business.  Absent that, we would have seen a stabilization of our business on a year-over-year basis especially in our loyal returning base.  The business strengthened throughout the quarter, including a recovery in our business later in the quarter with improving new and returning customers.” 

    Mr. Hulett added, “We are excited about our partnership with Vetster and pleased with how we quickly executed and launched the integration with this key strategic initiative in pet telemedicine.  We see this as an important milestone on our roadmap to transform PetMeds from a prescription eCommerce company into a broader pet health brand. We continue to invest in our infrastructure, which includes processes, systems, and people. We have just enabled a new data warehouse that gives us deep insights into our first party data, and we recently announced the newest member of my team, Christine Chambers, Chief Financial Officer who will be joining us on August 3rd.”

    The Board of Directors declared a quarterly dividend of $0.30 per share on the Company’s common stock. The dividend will be payable on August 19, 2022, to shareholders of record at the close of business on August 12, 2022. 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.

    This afternoon at 4:30 P.M. Eastern Time, the Company will host a conference call to review the quarter’s financial results. To access the call, which is open to the public, please dial (877) 407-0789 (toll free) or (201) 689-8562. We will also provide a link at https://www.1800petmeds.com/investor.html for those who wish to stream the call via webcast. For those unable to participate in the live event, the call will be available for replay from 7:30 P.M. Eastern Time on July 25, 2022, until August 8, 2022, at 11:59 P.M Eastern Time. To access the replay, call (844) 512-2921 (toll free) or (412) 317-6671 and enter passcode 13731566.

    Founded in 1996, PetMeds is Your Trusted Pet Health ExpertTM, 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 through its website at www.petmeds.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, 2022. 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, 561-526-4444, investor@petmeds.com.

    For media relations contact Mary Eva Tredway, Butin PR, maryeva@Butinpr.com.

    (1) Adjusted EBITDA and adjusted EBITDA per share are non-GAAP financial measures. See “Non-GAAP Financial Measures” for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures.


      
    PETMED EXPRESS, INC. AND SUBSIDIARIES 
    CONDENSED CONSOLIDATED BALANCE SHEETS 
    (In thousands, except for per share data) 
           
      June 30,  March 31, 
      2022  2022 
    ASSETS (Unaudited)    
           
    Current assets:      
    Cash and cash equivalents$105,414 $111,080 
    Accounts receivable, less allowance for doubtful      
    accounts of $36 and $39, respectively 1,782  1,913 
    Inventories - finished goods 22,575  32,455 
    Prepaid expenses and other current assets 4,415  4,866 
    Prepaid income taxes -  681 
    Total current assets 134,186  150,995 
           
    Noncurrent assets:      
    Property and equipment, net 24,693  24,464 
    Minority interest investment in Vetster 5,000  - 
    Intangible assets 860  860 
    Total noncurrent assets 30,553  25,324 
           
    Total assets$164,739 $176,319 
           
    LIABILITIES AND SHAREHOLDERS' EQUITY      
           
    Current liabilities:      
    Accounts payable$17,031 $27,500 
    Accrued expenses and other current liabilities 6,027  5,697 
    Income taxes payable 839  - 
    Total current liabilities 23,897  33,197 
           
    Deferred tax liabilities 642  936 
           
    Total liabilities 24,539  34,133 
           
    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;      
    20,989 and 20,979 shares issued and outstanding, respectively 21  21 
    Additional paid-in capital 13,196  11,660 
    Retained earnings 126,974  130,496 
           
    Total shareholders' equity 140,200  142,186 
           
    Total liabilities and shareholders' equity$164,739 $176,319 
           


    PETMED EXPRESS, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
    (In thousands, except for per share amounts) (Unaudited)
           
      Three Months Ended
      June 30,
      2022  2021 
           
    Sales$70,187 $79,312 
    Cost of sales 50,244  57,532 
           
    Gross profit 19,943  21,780 
           
    Operating expenses:      
    General and administrative 9,351  8,041 
    Advertising 6,349  7,673 
    Depreciation 753  647 
    Total operating expenses 16,453  16,361 
           
    Income from operations 3,490  5,419 
           
    Other income:      
    Interest income, net 117  85 
    Other, net 198  284 
    Total other income 315  369 
           
    Income before provision for income taxes 3,805  5,788 
           
    Provision for income taxes 1,030  1,360 
           
    Net income$2,775 $4,428 
           
    Net income per common share:      
    Basic$0.14 $0.22 
    Diluted$0.14 $0.22 
           
    Weighted average number of common shares outstanding:   
    Basic 20,208  20,109 
    Diluted 20,291  20,200 
           
    Cash dividends declared per common share$0.30 $0.30 
           


    PETMED EXPRESS, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands) (Unaudited)
     
      Three Months Ended
      June 30,
      2022  2021 
    Cash flows from operating activities:    
    Net income$2,775 $4,428 
    Adjustments to reconcile net income to net cash    
    provided by operating activities:    
    Depreciation 753  647 
    Share based compensation 1,536  718 
    Deferred income taxes (294) (167)
    Bad debt expense 45  29 
    (Increase) decrease in operating assets    
    and increase (decrease) in liabilities:    
    Accounts receivable 86  396 
    Inventories - finished goods 9,880  5,246 
    Prepaid income taxes 681  959 
    Prepaid expenses and other current assets 451  442 
    Accounts payable (10,469) (14,834)
    Accrued expenses and other current liabilities 97  1,145 
    Income taxes payable 839  569 
    Net cash provided by (used in) operating activities 6,380  (422)
         
    Cash flows from investing activities:    
    Purchases of minority interest investment in Vetster (5,000) - 
    Purchases of property and equipment (982) (477)
    Net cash used in investing activities (5,982) (477)
         
    Cash flows from financing activities:    
    Dividends paid (6,064) (6,033)
    Net cash used in financing activities (6,064) (6,033)
         
    Net decrease in cash and cash equivalents (5,666) (6,932)
    Cash and cash equivalents, at beginning of period 111,080  118,718 
         
    Cash and cash equivalents, at end of period$105,414 $111,786 
         
    Supplemental disclosure of cash flow information:    
         
    Dividends payable in accrued expenses$791 $245 
         

    Non-GAAP Financial Measures

    To provide investors with additional information regarding our financial results, we have disclosed here and elsewhere in this earnings release adjusted EBITDA and adjusted EBITDA per share, non-GAAP financial measures that we calculate as net income excluding; share-based compensation expense; depreciation and amortization; income tax provision; and interest income (expense). We have provided reconciliations below of adjusted EBITDA to net income and adjusted EBITDA per share to diluted earnings per share, the most directly comparable GAAP financial measures.

    We have included adjusted EBITDA and adjusted EBITDA per share in this earnings release because they are key measures used by our management and board of directors to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, the exclusion of certain expenses in calculating adjusted EBITDA facilitates operating performance comparability across reporting periods by removing the effect of non-cash expenses. Accordingly, we believe that adjusted EBITDA and adjusted EBITDA per share provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

    We believe it is useful to exclude non-cash charges, such as, share-based compensation expense and depreciation and amortization from our adjusted EBITDA and adjusted EBITDA per share because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations. We believe it is useful to exclude income tax provision; interest income (expense) which are not components of our core business operations. We also believe it is useful to exclude other expenses like the investment banking fee related to the Vetster partnership, which was executed in the June quarter. Adjusted EBITDA and adjusted EBITDA per share has limitations as financial measures, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

    • Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future and adjusted EBITDA and adjusted EBITDA per share does not reflect capital expenditure requirements for such replacements or for new capital expenditures;
    • Adjusted EBITDA and adjusted EBITDA per share does not reflect share-based compensation. Share-based compensation has been, and will continue to be for the foreseeable future, a material recurring expense in our business and an important part of our compensation strategy;
    • Adjusted EBITDA and adjusted EBITDA per share does not reflect interest income (expense), net; or changes in, or cash requirements for, our working capital;
    • Adjusted EBITDA and adjusted EBITDA per share does not reflect certain expenses like the investment banking fee related to the Vetster partnership, which was executed in the June quarter; and
    • Other companies, including companies in our industry, may calculate adjusted EBITDA and adjusted EBITDA per share differently, which reduces its usefulness as a comparative measure.

    Because of these limitations, you should consider adjusted EBITDA and adjusted EBITDA per share alongside other financial performance measures, including various cash flow metrics, net income, net margin, and our other GAAP results. The following table presents a reconciliation of net income to adjusted EBITDA and adjusted EBITDA per share for each of the periods indicated:

    Reconciliation of Non-GAAP Measures
    PetMed Express, Inc.
    (Unaudited)
     
     Three Months Ended  
     June 30,June 30,$%
    ($ in thousands, except percentages) 2022  2021 ChangeChange
         
    Consolidated Reconciliation of GAAP Net Income to Adjusted EBITDA:
         
    Net income$ 2,775 $ 4,428 $ (1,653)-37%
         
    Add (subtract):    
        Share-based compensation$ 1,536 $ 718 $ 818 114%
        Income Taxes$ 1,030 $ 1,360 $ (330)-24%
        Depreciation$ 753 $ 647 $ 106 16%
        Interest Income/Expense$ (117)$ (85)$ (32)38%
        Investment Banking Fee (Vetster)$ 355 $ - $ 355 - 
         
    Adjusted EBITDA$ 6,332 $ 7,068 $ (736)-10%
         

     

     
     Three Months Ended  
    ($ in thousands, except percentagesJune 30,June 30,$%
    and per share amounts) 2022  2021 ChangeChange
         
    Consolidated Reconciliation of GAAP Net Income Per Share to Adjusted EBITDA per share:
         
    Net income per share, diluted$ 0.14 $ 0.22 $ (0.08)-38%
         
    Add (subtract):    
        Share-based compensation$ 0.08 $ 0.04 $ 0.04 113%
        Income Taxes$ 0.05 $ 0.07 $ (0.02)-25%
        Depreciation$ 0.03 $ 0.03 $ 0.00 16%
        Interest Income/Expense$ (0.01)$ (0.01)$ (0.00)37%
        Investment Banking Fee (Vetster)$ 0.02 $ - $ 0.02 - 
         
    Adjusted EBITDA Per Share$ 0.31 $ 0.35 $ (0.04)-11%
         

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