PETS 8-K
Petmed Express Inc (PETS)
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): May 4, 2020
PetMed Express, Inc.
(Exact name of registrant as specified in its charter)
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Florida |
000-28827 |
65-0680967 |
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(State or other jurisdiction |
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(I.R.S. Employer |
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420 South Congress Avenue, Delray Beach, FL 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):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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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 ☐
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. ☐
Item 2.02 Results of Operations and Financial Condition.
On May 4, 2020, PetMed Express, Inc. (the “Company”) issued a press release announcing its March 31, 2020 quarter and fiscal year-end financial results. Additionally, the Company announced that its Board of Directors declared an increased quarterly dividend from $0.27 to $0.28 per share on its common stock. The dividend will be payable on May 22, 2020, to shareholders of record at the close of business on May 15, 2020. 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. 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, 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.
Item 9.01 Financial Statements and Exhibits.
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(d) |
Exhibits. |
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99.1 – Press release dated May 4, 2020 |
EXHIBIT INDEX
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Description |
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| 99.1 |
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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: May 4, 2020
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PETMED EXPRESS, INC. |
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By: |
/s/ Bruce S. Rosenbloom |
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Name: |
Bruce S. Rosenbloom |
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Title: |
Chief Financial Officer |
Exhibit 99.1
PETMED EXPRESS, INC. D/B/A 1-800-PETMEDS ANNOUNCES ITS FOURTH QUARTER AND FISCAL YEAR END FINANCIAL RESULTS AND INCREASES ITS QUARTERLY DIVIDEND TO $0.28 PER SHARE
15% Increase in 4th Quarter Sales
8.4% Increase in 4th Quarter Diluted Earnings per Share
5% Increase in 4th Quarter New Order Sales
Delray Beach, Florida, May 4, 2020 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for its fourth quarter and fiscal year ended March 31, 2020. Net sales for the quarter ended March 31, 2020 were $74.3 million, compared to $64.6 million for the quarter ended March 31, 2019, an increase of 15%. Net income for the quarter ended March 31, 2020 was $7.0 million, or $0.35 diluted per share, compared to net income of $6.6 million, or $0.32 diluted per share, for the same quarter the prior year, an increase to diluted earnings per share of 8.4%. Reorder sales for the three months ended March 31, 2020 were $65.2 million, compared to $55.9 million for the three months ended March 31, 2019, an increase of 17%. New order sales for the three months ended March 31, 2020 were $9.1 million, compared to $8.7 million for the three months ended March 31, 2019, an increase of 5%. The Company acquired approximately 107,000 new customers in the quarter ended March 31, 2020, compared to 101,000 new customers in the same period the prior year. The average order size for the quarter ended March 31, 2020 was $90, compared to $85 for the quarter ended March 31, 2019.
Menderes Akdag, President and CEO, commented: “During the March quarter, due to COVID-19, demand has been strong for the ecommerce channel, with consumers shifting their purchases to online, which has positively impacted our sales. We were more efficient with our advertising in the fourth quarter, and we will continue to focus on optimizing our marketing plan in fiscal 2021. As an essential business, we have been open during our normal business hours without any material disruptions in our operations. We are dedicated to making every effort to ensure pets get the medications they need in these challenging times. We have also taken extra precautions to ensure the health and safety of our employees. Also, so far, we have not seen any material disruptions in our supply chain. But, as it is a fluid situation, we are monitoring and managing it closely. In fiscal 2021, we will continue to be price competitive and will increase advertising to acquire new customers, promote brand awareness, and reinforce brand loyalty.”
The Board of Directors declared an increased quarterly dividend from $0.27 to $0.28 per share on its common stock. The dividend will be payable on May 22, 2020, to shareholders of record at the close of business on May 15, 2020. 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 year-end financial results. To access the call which is open to the public, dial (888) 455-1758 (toll free) or (203) 827-7025. Please call in fifteen minutes prior to the scheduled start time. 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. Eastern Time on May 4, 2020 until May 18, 2020 at 11:59 P.M. To access the replay, call (800) 814-6745 (toll free) or (203) 369-3349 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, cats, and horses 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, 2019. 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.
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Exhibit 99.1 Page 1 of 4
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except for per share amounts)
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March 31, |
March 31, |
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2020 |
2019 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | 103,762 | $ | 100,529 | ||||
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Accounts receivable, less allowance for doubtful accounts of $59 and $39, respectively |
3,843 | 2,542 | ||||||
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Inventories - finished goods |
17,884 | 21,370 | ||||||
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Prepaid expenses and other current assets |
3,529 | 1,408 | ||||||
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Prepaid income taxes |
- | 582 | ||||||
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Total current assets |
129,018 | 126,431 | ||||||
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Noncurrent assets: |
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Property and equipment, net |
25,445 | 27,136 | ||||||
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Intangible assets |
860 | 860 | ||||||
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Total noncurrent assets |
26,305 | 27,996 | ||||||
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Total assets |
$ | 155,323 | $ | 154,427 | ||||
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
$ | 19,658 | $ | 16,275 | ||||
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Accrued expenses and other current liabilities |
4,214 | 2,351 | ||||||
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Income taxes payable |
471 | - | ||||||
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Total current liabilities |
24,343 | 18,626 | ||||||
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Deferred tax liabilities |
970 | 1,121 | ||||||
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Total liabilities |
25,313 | 19,747 | ||||||
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Commitments and contingencies |
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Shareholders' equity: |
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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 | ||||||
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Common stock, $.001 par value, 40,000 shares authorized; 20,166 and 20,674 shares issued and outstanding, respectively |
20 | 21 | ||||||
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Additional paid-in capital |
3,804 | 12,478 | ||||||
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Retained earnings |
126,177 | 122,172 | ||||||
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Total shareholders' equity |
130,010 | 134,680 | ||||||
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Total liabilities and shareholders' equity |
$ | 155,323 | $ | 154,427 | ||||
Exhibit 99.1 Page 2 of 4
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except for per share amount)
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Three Months Ended |
Year Ended |
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March 31, |
March 31, |
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2020 |
2019 |
2020 |
2019 |
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(UNAUDITED) |
(UNAUDITED) |
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Sales |
$ | 74,286 | $ | 64,565 | $ | 284,125 | $ | 283,419 | ||||||||
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Cost of sales |
52,600 | 43,841 | 202,879 | 188,105 | ||||||||||||
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Gross profit |
21,686 | 20,724 | 81,246 | 95,314 | ||||||||||||
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Operating expenses: |
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General and administrative |
6,413 | 5,840 | 25,264 | 24,767 | ||||||||||||
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Advertising |
6,205 | 6,522 | 22,748 | 22,148 | ||||||||||||
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Depreciation |
555 | 560 | 2,257 | 2,225 | ||||||||||||
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Total operating expenses |
13,173 | 12,922 | 50,269 | 49,140 | ||||||||||||
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Income from operations |
8,513 | 7,802 | 30,977 | 46,174 | ||||||||||||
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Other income: |
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Interest income, net |
300 | 549 | 1,747 | 1,864 | ||||||||||||
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Other, net |
307 | 256 | 1,169 | 1,083 | ||||||||||||
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Total other income |
607 | 805 | 2,916 | 2,947 | ||||||||||||
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Income before provision for income taxes |
9,120 | 8,607 | 33,893 | 49,121 | ||||||||||||
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Provision for income taxes |
2,117 | 1,987 | 8,042 | 11,381 | ||||||||||||
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Net income |
$ | 7,003 | $ | 6,620 | $ | 25,851 | $ | 37,740 | ||||||||
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Comprehensive income |
$ | 7,003 | $ | 6,620 | $ | 25,851 | $ | 37,740 | ||||||||
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Net income per common share: |
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Basic |
$ | 0.35 | $ | 0.32 | $ | 1.29 | $ | 1.84 | ||||||||
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Diluted |
$ | 0.35 | $ | 0.32 | $ | 1.29 | $ | 1.84 | ||||||||
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Weighted average number of common shares outstanding: |
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Basic |
19,984 | 20,491 | 20,041 | 20,461 | ||||||||||||
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Diluted |
20,010 | 20,501 | 20,055 | 20,491 | ||||||||||||
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Cash dividends declared per common share |
$ | 0.27 | $ | 0.27 | $ | 1.08 | $ | 1.06 | ||||||||
Exhibit 99.1 Page 3 of 4
PETMED EXPRESS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
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Year Ended |
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March 31, |
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2020 |
2019 |
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(UNAUDITED) |
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Cash flows from operating activities: |
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Net income |
$ | 25,851 | $ | 37,740 | ||||
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation |
2,257 | 2,225 | ||||||
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Share based compensation |
2,822 | 3,097 | ||||||
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Deferred income taxes |
(151 | ) | 125 | |||||
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Bad debt expense |
191 | 85 | ||||||
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(Increase) decrease in operating assets and increase (decrease) in liabilities: |
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Accounts receivable |
(1,492 | ) | (335 | ) | ||||
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Inventories - finished goods |
3,486 | 1,967 | ||||||
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Prepaid income taxes |
582 | 206 | ||||||
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Prepaid expenses and other current assets |
(376 | ) | (526 | ) | ||||
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Accounts payable |
3,383 | 1,001 | ||||||
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Accrued expenses and other current liabilities |
1,820 | (447 | ) | |||||
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Income taxes payable |
471 | - | ||||||
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Net cash provided by operating activities |
38,844 | 45,138 | ||||||
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Cash flows from investing activities: |
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Purchases of property and equipment |
(2,311 | ) | (620 | ) | ||||
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Net cash used in investing activities |
(2,311 | ) | (620 | ) | ||||
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Cash flows from financing activities: |
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Dividends paid |
(21,803 | ) | (21,925 | ) | ||||
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Repurchase and retirement of common stock |
(11,497 | ) | - | |||||
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Net cash used in financing activities |
(33,300 | ) | (21,925 | ) | ||||
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Net increase in cash and cash equivalents |
3,233 | 22,593 | ||||||
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Cash and cash equivalents, at beginning of year |
100,529 | 77,936 | ||||||
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Cash and cash equivalents, at end of year |
$ | 103,762 | $ | 100,529 | ||||
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Supplemental disclosure of cash flow information: |
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Cash paid for income taxes |
$ | 7,140 | $ | 11,051 | ||||
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Property and equipment in current assets |
$ | 1,745 | $ | - | ||||
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Dividends payable in accrued expenses |
$ | 246 | $ | 203 | ||||
Exhibit 99.1 Page 4 of 4