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DELRAY BEACH, Fla., Nov. 07, 2022 (GLOBE NEWSWIRE) -- PetMed Express, Inc. (NASDAQ: PETS), Your Trusted Pet Health ExpertTM, today announced its financial results for its second quarter ended September 30, 2022.
Quarterly Highlights
“We were pleased to see revenue begin to stabilize this quarter after multiple quarters of decline," said Matt Hulett, CEO and President. "This mainly reflects the continued growth of our AutoShip & Save subscription sales, which increased to 39% of our total sales for the quarter from 34% for the prior quarter.”
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 November 30, 2022, to shareholders of record at the close of business on November 18, 2022. The declaration and payment of future dividends is discretionary and will be subject to the determination by the Board of Directors.
This afternoon the Company will host a conference call to review the quarter’s financial results.
Time: 4:30 P.M. Eastern Time, November 7, 2022
Public call dial in (877) 407-0789 (toll free) or (201) 689-8562.
Webcast stream link: https://www.1800petmeds.com/investor.html for those who wish to stream the call via webcast.
Replay: Available until November 21, 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 13733883.
Founded in 1996, PetMeds is Your Trusted Pet Health Expert™, 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, 561-526-4441, investor@petmeds.com.
For media relations contact Mary Eva Tredway, Butin PR, maryeva@Butinpr.com.
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for per share data) September 30,
2022 March 31,
2022 (Unaudited) ASSETS Current assets: Cash and cash equivalents$96,546 $111,080Accounts receivable, less allowance for doubtful accounts of $32 and $39, respectively 1,590 1,913Inventories - finished goods 34,022 32,455Prepaid expenses and other current assets 5,463 4,866Prepaid income taxes 595 681Total current assets 138,216 150,995 Noncurrent assets: Property and equipment, net 25,189 24,464Intangible and other assets 5,860 860Total noncurrent assets 31,049 25,324 Total assets$169,265 $176,319 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable$23,980 $27,500Accrued expenses and other current liabilities 6,585 5,697Total current liabilities 30,565 33,197 Deferred tax liabilities 547 936 Total liabilities 31,112 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 9Common stock, $.001 par value, 40,000 shares authorized; 21,077 and 20,979 shares issued and outstanding, respectively 21 21Additional paid-in capital 14,877 11,660Retained earnings 123,246 130,496 Total shareholders' equity 138,153 142,186 Total liabilities and shareholders' equity$169,265 $176,319
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per share amounts) (Unaudited) Three Months Ended
September 30, Six Months Ended
September 30, 2022 2021 2022 2021 Sales$65,394 $67,386 $135,581 $146,698Cost of sales 46,943 48,212 97,187 105,744 Gross profit 18,451 19,174 38,394 40,954 Operating expenses: General and administrative 10,753 6,958 20,104 14,999Advertising 3,879 3,435 10,228 11,108Depreciation 858 694 1,611 1,341Total operating expenses 15,490 11,087 31,943 27,448 Income from operations 2,961 8,087 6,451 13,506 Other income: Interest income, net 388 74 505 159Other, net 261 170 459 454Total other income 649 244 964 613 Income before provision for income taxes 3,610 8,331 7,415 14,119 Provision for income taxes 1,031 1,982 2,061 3,342 Net income$2,579 $6,349 $5,354 $10,777 Net income per common share: Basic$0.13 $0.31 $0.26 $0.53Diluted$0.13 $0.31 $0.26 $0.53 Weighted average number of common shares outstanding: Basic 20,261 20,178 20,235 20,144Diluted 20,344 20,568 20,318 20,384 Cash dividends declared per common share$0.30 $0.30 $0.60 $0.60
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited) Six Months Ended
September 30, 2022 2021 Cash flows from operating activities: Net income$5,354 $10,777 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,611 1,341 Share based compensation 3,217 1,600 Deferred income taxes (389) 346 Bad debt expense 66 58 (Increase) decrease in operating assets and increase (decrease) in liabilities: Accounts receivable 257 675 Inventories - finished goods (1,567) 14,687 Prepaid income taxes 86 60 Prepaid expenses and other current assets (597) 106 Accounts payable (3,520) (28,365)Accrued expenses and other current liabilities 590 (210)Income taxes payable — — Net cash provided by operating activities 5,108 1,075 Cash flows from investing activities: Purchases of minority interest investment in Vetster (5,000) — Purchases of property and equipment (2,336) (972)Net cash used in investing activities (7,336) (972) Cash flows from financing activities: Dividends paid (12,306) (12,259)Net cash used in financing activities (12,306) (12,259) Net decrease in cash and cash equivalents (14,534) (12,156)Cash and cash equivalents, at beginning of period 111,080 118,718 Cash and cash equivalents, at end of period$96,546 $106,562 Supplemental disclosure of cash flow information: Cash paid for income taxes$2,560 $2,935 Dividends payable in accrued expenses$856 $110
Non-GAAP Financial Measures
To provide investors and the market with additional information regarding our financial results, we have disclosed (see below) adjusted EBITDA, a non-GAAP financial measure that we calculate as net income excluding share-based compensation expense; depreciation and amortization; income tax provision; interest income (expense); and other expenses. We have provided reconciliations below of adjusted EBITDA to net income, the most directly comparable GAAP financial measures.
We have included adjusted EBITDA, herein, because it is a key measure 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 and other expenses. Accordingly, we believe that adjusted EBITDA provides 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, depreciation and amortization from our adjusted EBITDA 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 and interest income (expense), as neither are components of our core business operations. We also believe that it is useful to exclude other expenses, including the investment banking fee related to the Vetster partnership, which was executed in the June quarter, and employee severance and estimated state sales tax assessment accrual, both were executed in the September quarter, as these items are not indicative of our ongoing operations. Adjusted EBITDA has limitations as a financial measure, these non-GAAP measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
Because of these and other limitations, adjusted EBITDA should only be considered as supplemental to, and alongside with other GAAP based 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, the most directly comparable GAAP measure to adjusted EBITDA for each of the periods indicated:
Reconciliation of Non-GAAP Measures
PetMed Express, Inc.
(Unaudited) Three Months Ended ($ in thousands, except percentages) September 30,
2022 September 30,
2021 $
Change %
Change Consolidated Reconciliation of GAAP Net Income to Adjusted EBITDA: Net income$2,579 $6,349 $(3,770) (59)% Add (subtract): Share-based Compensation$1,681 $882 $799 91%Income Taxes$1,031 $1,982 $(951) (48)%Depreciation$858 $694 $164 24%Interest Income/Expense$(388) $(74) $(314) 424%Investment Banking Fee (Vetster)$— $— $— n/mEmployee Severance$364 $— $364 n/mState Sales Tax Assessment Accrual$925 $— $925 n/mAdjusted EBITDA$7,050 $9,833 $(2,783) (28)% Six Months Ended ($ in thousands, except percentages) September 30,
2022 September 30,
2021 $
Change %
Change Consolidated Reconciliation of GAAP Net Income to Adjusted EBITDA: Net income$5,354 $10,777 $(5,423) (50)% Add (subtract): Share-based Compensation$3,217 $1,600 $1,617 101%Income Taxes$2,061 $3,342 $(1,281) (38)%Depreciation$1,611 $1,341 $270 20%Interest Income/Expense$(505) $(159) $(346) 218%Investment Banking Fee (Vetster)$355 $— $355 n/mEmployee Severance$364 $— $364 n/mState Sales Tax Assessment Accrual$925 $— $925 n/mAdjusted EBITDA$13,382 $16,901 $(3,519) (21)%
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1 Adjusted EBITDA is a non-GAAP financial measure. See “Non-GAAP Financial Measures” for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures.