PetMed Express, Inc. dba PetMeds and parent company of PetCareRx
(NASDAQ: PETS) today announced its financial results for its second
quarter ended September 30, 2024.
Second Quarter Fiscal 2025 Financial
Highlights
- Net sales of $59.6 million.
- Gross margin of 29.1%, an increase of 0.8% compared to the
prior year period.
- Net income of $2.3 million, or $0.11 per diluted share,
compared to net income of $0.7 million, or $0.03 per diluted share,
in the prior year period.
- Adjusted EBITDA of $2.1 million improved sequentially from an
Adjusted EBITDA loss of $(1.5) million in the first quarter of
fiscal 2025 and compared to Adjusted EBITDA of $3.4 million in the
prior year period.
- Continued progress on key initiatives supporting the
transformation of the business.
“We demonstrated significant progress on key
initiatives of phase one of our transformation, aimed at improving
profitability during the second quarter while also advancing our
vision of being a leader in the consumer pet healthcare sector,”
said Sandra Campos, CEO & President. “By
consolidating and streamlining our PetMeds and PetCareRX
back-of-the-house operations, we’ve materially lowered our cost
structure, which helped us deliver a strong sequential improvement
in Adjusted EBITDA during the second quarter. We are
now well positioned to lean more aggressively into differentiating
product assortments, brand awareness campaigns, and core marketing
initiatives to drive growth. While it’s still very early in our
turnaround, we remain confident in our direction and belief that
the changes and investments we are making across our business will
create a more compelling, enduring value proposition for all
stakeholders and will significantly strengthen our competitive
position.”
This afternoon the Company will host a conference call to review
the quarter’s financial results.
Time: 4:30 P.M. Eastern Time, November 6,
2024
Public call dial in (877) 407-0789 (toll free)
or (201) 689-8562.
Webcast stream link:
https://investors.petmeds.com for those who wish to stream the call
via webcast.
Replay: Available until November 20, 2024, at
11:59 P.M Eastern Time.
To access the replay, call (844) 512-2921 (toll free) or (412)
317-6671 and enter passcode 13748837.
About PetMed Express, Inc.
Founded in 1996, PetMeds is a leader in the
consumer pet healthcare sector. As a national online retailer with
expert pharmacists and licenses across fifty states, PetMeds.com
and PetCareRx.com deliver top branded pharmaceuticals, generics,
compounded prescription medications and OTC supplements and
vitamins that help pets live longer, healthier lives. Leveraging
telehealth and insurance partnerships, they offer unparalleled
value and convenience that enhance wellness and longevity for dogs,
cats, and horses. PetMeds and PetCareRx provides essential pet
health offerings through their websites, www.PetMeds.com and
www.PetCareRx.com.
Forward Looking Statement
This press release may contain “forward-looking
statements”, within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, 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 the
“Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” sections in the
Company’s Annual Report on Form 10-K for the year ended March 31,
2024. The Company’s future results may also be impacted by other
risk factors listed from time to time in the Company’s filings with
the Securities and Exchange Commission, including, but not limited
to, the Company's Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q and periodic filings on Form 8-K. You should not place
undue reliance on these forward-looking statements, which apply
only as of the date of this press release and should not be relied
upon as representing the Company’s views as of any subsequent date.
The Company explicitly disclaims any obligation to update any
forward-looking statements, other than as may be required by law.
If the Company does update one or more forward-looking statements,
no inference should be made that the Company will make additional
updates with respect to those or other forward-looking
statements.
PETMEDS INVESTOR RELATIONS CONTACTICR, LLCJohn
Mills(646) 277-1254
Reed Anderson(646) 277-1260investor@petmeds.com
|
PETMED EXPRESS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(In thousands, except for share and per
share data) |
|
|
|
|
|
September 30,2024 |
|
March 31,2024 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
52,045 |
|
|
$ |
55,296 |
|
Accounts receivable, less allowance for credit losses of $27 and
$273, respectively |
|
1,620 |
|
|
|
3,283 |
|
Inventories, net |
|
13,092 |
|
|
|
28,556 |
|
Prepaid expenses and other current assets |
|
3,655 |
|
|
|
6,325 |
|
Prepaid income taxes |
|
367 |
|
|
|
188 |
|
Total current assets |
|
70,779 |
|
|
|
93,648 |
|
|
|
|
|
Noncurrent assets: |
|
|
|
Property and equipment, net |
|
26,204 |
|
|
|
26,657 |
|
Intangible and other assets, net |
|
15,524 |
|
|
|
16,503 |
|
Goodwill |
|
26,658 |
|
|
|
26,658 |
|
Operating lease right-of-use assets |
|
1,188 |
|
|
|
1,432 |
|
Deferred tax assets, net |
|
5,681 |
|
|
|
4,986 |
|
Total noncurrent assets |
|
75,255 |
|
|
|
76,236 |
|
|
|
|
|
Total assets |
$ |
146,034 |
|
|
$ |
169,884 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
16,951 |
|
|
$ |
37,024 |
|
Sales tax payable |
|
24,373 |
|
|
|
25,012 |
|
Accrued expenses and other current liabilities |
|
5,412 |
|
|
|
7,060 |
|
Current operating lease liabilities |
|
446 |
|
|
|
459 |
|
Deferred revenue |
|
1,650 |
|
|
|
2,603 |
|
Total current liabilities |
|
48,832 |
|
|
|
72,158 |
|
|
|
|
|
Operating lease liabilities,
net of current lease liabilities |
|
768 |
|
|
|
995 |
|
|
|
|
|
Total liabilities |
|
49,600 |
|
|
|
73,153 |
|
|
|
|
|
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 |
|
9 |
|
|
|
9 |
|
Common stock, $.001 par value, 40,000,000 shares authorized;
20,663,218 and 21,148,692 shares issued and outstanding,
respectively |
|
21 |
|
|
|
21 |
|
Additional paid-in capital |
|
17,515 |
|
|
|
25,146 |
|
Retained earnings |
|
78,889 |
|
|
|
71,555 |
|
|
|
|
|
Total shareholders' equity |
|
96,434 |
|
|
|
96,731 |
|
|
|
|
|
Total liabilities and
shareholders' equity |
$ |
146,034 |
|
|
$ |
169,884 |
|
|
|
|
|
|
PETMED EXPRESS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except for share and per
share amounts) (Unaudited) |
|
|
|
|
|
Three Months EndedSeptember
30, |
|
Six Months EndedSeptember
30, |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
Net sales |
$ |
59,570 |
|
|
$ |
70,999 |
|
|
$ |
127,522 |
|
|
$ |
149,243 |
|
Cost of sales |
|
42,259 |
|
|
|
50,937 |
|
|
|
92,240 |
|
|
|
106,655 |
|
|
|
|
|
|
|
|
|
Gross profit |
|
17,311 |
|
|
|
20,062 |
|
|
|
35,282 |
|
|
|
42,588 |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
General and administrative |
|
10,493 |
|
|
|
11,962 |
|
|
|
15,367 |
|
|
|
27,673 |
|
Advertising |
|
4,606 |
|
|
|
5,512 |
|
|
|
11,596 |
|
|
|
12,777 |
|
Depreciation and amortization |
|
1,658 |
|
|
|
1,713 |
|
|
|
3,379 |
|
|
|
3,391 |
|
Total operating expenses |
|
16,757 |
|
|
|
19,187 |
|
|
|
30,342 |
|
|
|
43,841 |
|
|
|
|
|
|
|
|
|
Income (loss) from
operations |
|
554 |
|
|
|
875 |
|
|
|
4,940 |
|
|
|
(1,253 |
) |
|
|
|
|
|
|
|
|
Other income: |
|
|
|
|
|
|
|
Interest income, net |
|
185 |
|
|
|
151 |
|
|
|
280 |
|
|
|
345 |
|
Other, net |
|
186 |
|
|
|
254 |
|
|
|
417 |
|
|
|
760 |
|
Total other income |
|
371 |
|
|
|
405 |
|
|
|
697 |
|
|
|
1,105 |
|
|
|
|
|
|
|
|
|
Income (loss) before (benefit)
provision for income taxes |
|
925 |
|
|
|
1,280 |
|
|
|
5,637 |
|
|
|
(148 |
) |
|
|
|
|
|
|
|
|
(Benefit) provision for income
taxes |
|
(1,401 |
) |
|
|
565 |
|
|
|
(443 |
) |
|
|
273 |
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
2,326 |
|
|
$ |
715 |
|
|
$ |
6,080 |
|
|
$ |
(421 |
) |
|
|
|
|
|
|
|
|
Net income (loss) per common
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.11 |
|
|
$ |
0.04 |
|
|
$ |
0.30 |
|
|
$ |
(0.02 |
) |
Diluted |
$ |
0.11 |
|
|
$ |
0.03 |
|
|
$ |
0.29 |
|
|
$ |
(0.02 |
) |
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
20,597,807 |
|
|
|
20,382,979 |
|
|
|
20,555,544 |
|
|
|
20,357,752 |
|
Diluted |
|
20,938,817 |
|
|
|
20,780,455 |
|
|
|
20,940,161 |
|
|
|
20,357,752 |
|
|
|
|
|
|
|
|
|
Cash dividends declared per
common share |
$ |
— |
|
|
$ |
0.30 |
|
|
$ |
— |
|
|
$ |
0.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PETMED EXPRESS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(In thousands) (Unaudited) |
|
|
|
Six Months EndedSeptember
30, |
|
2024 |
|
2023 |
Cash flows from operating
activities: |
|
|
|
Net income (loss) |
$ |
6,080 |
|
|
$ |
(421 |
) |
Adjustments to reconcile net income (loss) to net cash (used in)
provided by operating activities: |
|
|
|
Depreciation and amortization |
|
3,379 |
|
|
|
3,391 |
|
Share based compensation |
|
(7,631 |
) |
|
|
3,489 |
|
Deferred income taxes |
|
(696 |
) |
|
|
(146 |
) |
Bad debt expense |
|
176 |
|
|
|
36 |
|
(Increase) decrease in operating assets and increase (decrease) in
operating liabilities: |
|
|
|
Accounts receivable |
|
1,488 |
|
|
|
(345 |
) |
Inventories, net |
|
15,464 |
|
|
|
3,237 |
|
Prepaid income taxes |
|
(179 |
) |
|
|
426 |
|
Prepaid expenses and other current assets |
|
2,670 |
|
|
|
(3,516 |
) |
Operating lease right-of-use assets, net |
|
245 |
|
|
|
394 |
|
Accounts payable |
|
(20,071 |
) |
|
|
(5,542 |
) |
Sales tax payable |
|
(639 |
) |
|
|
(1,278 |
) |
Accrued expenses and other current liabilities |
|
(221 |
) |
|
|
(136 |
) |
Lease liabilities |
|
(240 |
) |
|
|
(383 |
) |
Deferred revenue |
|
(953 |
) |
|
|
579 |
|
Net cash (used in) provided by
operating activities |
$ |
(1,128 |
) |
|
$ |
(215 |
) |
|
|
|
|
Cash flows from investing
activities: |
|
|
|
Acquisition of PetCareRx, net of cash acquired |
|
– |
|
|
|
(35,859 |
) |
Purchases of property and equipment |
|
(1,948 |
) |
|
|
(2,137 |
) |
Net cash used in investing
activities |
$ |
(1,948 |
) |
|
$ |
(37,996 |
) |
|
|
|
|
Cash flows from financing
activities: |
|
|
|
Dividends paid |
|
(175 |
) |
|
|
(12,404 |
) |
Net cash used in financing
activities |
$ |
(175 |
) |
|
$ |
(12,404 |
) |
|
|
|
|
Net decrease in cash and cash
equivalents |
|
(3,251 |
) |
|
|
(50,615 |
) |
Cash and cash equivalents, at
beginning of period |
|
55,296 |
|
|
|
104,086 |
|
|
|
|
|
Cash and cash equivalents, at
end of period |
$ |
52,045 |
|
|
$ |
53,471 |
|
|
|
|
|
Supplemental disclosure of
cash flow information: |
|
|
|
|
|
|
|
Cash paid for income taxes |
$ |
466 |
|
|
$ |
– |
|
|
|
|
|
Dividends payable in accrued expenses and other current
liabilities |
$ |
39 |
|
|
$ |
1,513 |
|
|
|
|
|
|
|
|
|
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 non-operational 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, acquisition costs related to PetCareRx,
employee severance and estimated state sales tax accrual as these
items are not indicative of our ongoing operations. Adjusted EBITDA
has limitations as a financial measure, and 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:
- 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 does not reflect capital expenditure
requirements for such replacements or for new capital
expenditures;
- Adjusted EBITDA 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 does not reflect
interest income (expense), net; or changes in, or cash requirements
for, our working capital;
- Adjusted EBITDA does not reflect
transaction related costs and other items which are either not
representative of our underlying operations or are incremental
costs that result from an actual or planned transaction and include
litigation matters, integration consulting fees, internal salaries
and wages (to the extent the individuals are assigned full-time to
integration and transformation activities) and certain costs
related to integrating and converging IT systems;
- Adjusted EBITDA does not reflect
certain non-operating expenses including the employee severance
which reduces cash available to us;
- Adjusted EBITDA does not reflect
certain expenses including the estimated state sales tax accrual
which reduces cash available to us.
- Other companies, including
companies in our industry, may calculate adjusted EBITDA
differently, which reduces the measures usefulness as comparative
measures.
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 MeasuresPetMed
Express, Inc.(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
Increase (Decrease) |
($ in thousands,
except percentages) |
September 30,2024 |
|
September 30,2023 |
|
$ |
|
% |
|
|
|
|
|
|
|
|
Consolidated Reconciliation of GAAP Net Income (Loss) to
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
Net income |
$ |
2,326 |
|
|
$ |
715 |
|
|
$ |
1,611 |
|
|
225 |
% |
|
|
|
|
|
|
|
|
Add (subtract): |
|
|
|
|
|
|
|
Stock-based Compensation |
$ |
573 |
|
|
$ |
1,728 |
|
|
$ |
(1,155 |
) |
|
(67 |
)% |
Income Taxes |
$ |
(1,401 |
) |
|
$ |
565 |
|
|
$ |
(1,966 |
) |
|
(348 |
)% |
Depreciation and Amortization |
$ |
1,658 |
|
|
$ |
1,713 |
|
|
$ |
(55 |
) |
|
(3 |
)% |
Interest (Income), Net(1) |
$ |
(185 |
) |
|
$ |
(151 |
) |
|
$ |
(34 |
) |
|
23 |
% |
Acquisition/Partnership Transactions and Other Items |
$ |
– |
|
|
$ |
168 |
|
|
$ |
(168 |
) |
|
(100 |
)% |
Employee Severance |
$ |
305 |
|
|
$ |
15 |
|
|
$ |
290 |
|
|
1933 |
% |
Sales Tax (Income) |
$ |
(1,178 |
) |
|
$ |
(1,316 |
) |
|
$ |
138 |
|
|
(10 |
)% |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
2,098 |
|
|
$ |
3,437 |
|
|
$ |
(1,339 |
) |
|
(39 |
)% |
(1) Included in interest income, net is $0.4
million of interest expense related to the sales tax liability and
$0.6 million of interest income for the three months ended
September 30, 2024. This compares to $0.4 million of interest
expense related to the sales tax liability and $0.6 million of
interest income for the three months ended September 30, 2023.
|
|
|
|
|
Six Months Ended |
|
Increase (Decrease) |
($ in thousands,
except percentages) |
September 30,2024 |
|
September 30,2023 |
|
$ |
|
% |
|
|
|
|
|
|
|
|
Consolidated Reconciliation of GAAP Net Income to Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
Net income |
$ |
6,080 |
|
|
$ |
(421 |
) |
|
$ |
6,501 |
|
|
(1544 |
)% |
|
|
|
|
|
|
|
|
Add (subtract): |
|
|
|
|
|
|
|
Stock-based Compensation |
$ |
(7,631 |
) |
|
$ |
3,488 |
|
|
$ |
(11,119 |
) |
|
(319 |
)% |
Income Taxes |
$ |
(443 |
) |
|
$ |
273 |
|
|
$ |
(716 |
) |
|
(262 |
)% |
Depreciation and Amortization |
$ |
3,379 |
|
|
$ |
3,391 |
|
|
$ |
(12 |
) |
|
— |
% |
Interest (Income), Net (1) |
$ |
(280 |
) |
|
$ |
(345 |
) |
|
$ |
65 |
|
|
(19 |
)% |
Acquisition/Partnership Transactions and Other Items |
$ |
180 |
|
|
$ |
1,294 |
|
|
$ |
(1,114 |
) |
|
(86 |
)% |
Employee Severance |
$ |
454 |
|
|
$ |
408 |
|
|
$ |
46 |
|
|
11 |
% |
Sales Tax (Income) |
$ |
(1,178 |
) |
|
$ |
(1,316 |
) |
|
$ |
138 |
|
|
(10 |
)% |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
561 |
|
|
$ |
6,772 |
|
|
$ |
(6,211 |
) |
|
(92 |
)% |
(1) Included in interest income, net is $0.8
million of interest expense related to the sales tax liability and
$1.1 million of interest income for the six months ended September
30, 2024. This compares to $0.8 million of interest expense related
to the sales tax liability and $1.2 million of interest income for
the six months ended September 30, 2023.
PetMed Express (NASDAQ:PETS)
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From Dec 2024 to Jan 2025
PetMed Express (NASDAQ:PETS)
Historical Stock Chart
From Jan 2024 to Jan 2025