0001040130FALSE00010401302024-11-062024-11-06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 6, 2024
PetMed Express, Inc.
(Exact name of registrant as specified in its charter)
Florida
000-28827
65-0680967
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
420 South Congress Avenue, Delray Beach, Florida 33445
(Address of principal executive offices) (Zip Code)
(561) 526-4444
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $.001 per share
PETS
 NASDAQ Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


Item 2.02 Results of Operations and Financial Condition.

On November 6, 2024, PetMed Express, Inc. (the “Company”) issued a press release announcing its September 30, 2024 second quarter of fiscal year 2025 financial results and other financial information, and that management would review these results in a conference call at 4:30 pm Eastern time on November 6, 2024. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 2.02 and the information contained in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference in any Company filing under the Securities Act of 1933, as amended (“Securities Act”), or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except as shall be expressly set forth by specific reference in such filing.
The Company is making reference to non-GAAP financial information in both the press release and the conference call. A reconciliation of these non-GAAP financial measures to the nearest comparable GAAP financial measures is contained in the attached press release.
Item 9.01 Financial Statements and Exhibits.
(d)Exhibits.
99.1 – Press release dated November 6, 2024.
104 – Cover Page Interactive Data File (formatted as Inline XBRL).
EXHIBIT INDEX
Exhibit No.
Description
99.1
Press release dated November 6, 2024
104
Cover Page Interactive Data File (formatted as Inline XBRL)
2

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: November 6, 2024
PETMED EXPRESS, INC.
By:/s/ Sandra Y. Campos
Name:
Sandra Y. Campos
Title:
Chief Executive Officer and President
3

Exhibit 99.1

PetMeds® Announces Second Quarter Fiscal 2025 Financial Results


Delray Beach, Florida, November 6, 2024, 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
Exhibit 99.1 Page 1 of 8

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 CONTACT
ICR, LLC
John Mills
(646) 277-1254

Reed Anderson
(646) 277-1260
investor@petmeds.com


Exhibit 99.1 Page 2 of 8

PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED 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, net13,092 28,556 
Prepaid expenses and other current assets3,655 6,325 
Prepaid income taxes367 188 
Total current assets70,779 93,648 
Noncurrent assets:
Property and equipment, net26,204 26,657 
Intangible and other assets, net15,524 16,503 
Goodwill26,658 26,658 
Operating lease right-of-use assets1,188 1,432 
Deferred tax assets, net5,681 4,986 
Total noncurrent assets75,255 76,236 
Total assets$146,034 $169,884 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable$16,951 $37,024 
Sales tax payable24,373 25,012 
Accrued expenses and other current liabilities5,412 7,060 
Current operating lease liabilities446 459 
Deferred revenue1,650 2,603 
Total current liabilities48,832 72,158 
Operating lease liabilities, net of current lease liabilities768 995 
Total liabilities49,600 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 capital17,515 25,146 
Retained earnings78,889 71,555 
Total shareholders' equity96,434 96,731 
Total liabilities and shareholders' equity$146,034 $169,884 
Exhibit 99.1 Page 3 of 8

PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for share and per share amounts) (Unaudited)

Three Months Ended
September 30,		Six Months Ended
September 30,

2024202320242023
Net sales$59,570 $70,999 $127,522 $149,243 
Cost of sales42,259 50,937 92,240 106,655 
Gross profit17,311 20,062 35,282 42,588 
Operating expenses:
General and administrative10,493 11,962 15,367 27,673 
Advertising4,606 5,512 11,596 12,777 
Depreciation and amortization1,658 1,713 3,379 3,391 
Total operating expenses16,757 19,187 30,342 43,841 
Income (loss) from operations554 875 4,940 (1,253)
Other income:
Interest income, net185 151 280 345 
Other, net186 254 417 760 
Total other income371 405 697 1,105 
Income (loss) before (benefit) provision for income taxes925 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 $(0.02)
Weighted average number of common shares outstanding:
Basic20,597,80720,382,97920,555,54420,357,752
Diluted20,938,81720,780,45520,940,16120,357,752
Cash dividends declared per common share$— $0.30 $— $— $0.60 
Exhibit 99.1 Page 4 of 8

PETMED EXPRESS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)

Six Months Ended
September 30,
20242023
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 amortization3,379 3,391 
Share based compensation(7,631)3,489 
Deferred income taxes(696)(146)
Bad debt expense176 36 
(Increase) decrease in operating assets and increase (decrease) in operating liabilities:
Accounts receivable1,488 (345)
Inventories, net15,464 3,237 
Prepaid income taxes(179)426 
Prepaid expenses and other current assets2,670 (3,516)
Operating lease right-of-use assets, net245 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 period55,296 104,086 
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 
Exhibit 99.1 Page 5 of 8

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.
Exhibit 99.1 Page 6 of 8

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
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.

Exhibit 99.1 Page 7 of 8

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.
Exhibit 99.1 Page 8 of 8
v3.24.3
Cover
Nov. 06, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 06, 2024
Entity Registrant Name PetMed Express, Inc.
Entity Incorporation, State or Country Code FL
Entity File Number 000-28827
Entity Tax Identification Number 65-0680967
Entity Address, Address Line One 420 South Congress Avenue
Entity Address, City or Town Delray Beach
Entity Address, State or Province FL
Entity Address, Postal Zip Code 33445
City Area Code 561
Local Phone Number 526-4444
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $.001 per share
Trading Symbol PETS
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001040130
Amendment Flag false
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