PetMed Express, Inc. dba PetMeds and parent company of PetCareRx
(NASDAQ: PETS) today announced its financial results for its first
quarter ended June 30, 2024.
Quarterly Highlights for Q1, Fiscal
2025
- Net sales were $68 million, (13)%
lower than the prior year comparable quarter.
- Net income was
$3.8 million, or $0.18 diluted earnings per share. This compares to
net loss of $(1.1) million, or $(0.06) diluted earnings per share,
for the prior year comparable quarter.
- Increase in
net income is primarily attributed to a $8.7 million reversal of
accumulated stock compensation expense associated with departure of
the former CEO, partially offset by lower gross profit of $4.6
million.
- Adj. EBITDA of
$(1.5) million was $4.9 million lower than prior year comparable
quarter driven by lower sales and associated gross profit.
“Q1 FY‘25 results reflect a transition quarter
as we position the Company for future profitable growth by
optimizing our cost structure and leaning into our many
customer-centric attributes. During the first quarter, we saw a
changeover of the CEO and other key executives,” said Sandra
Campos, CEO & President. “May marked my first full month in the
CEO role, and in May and June we added a new Chief Marketing
Officer, Chief Operating Officer and Chief Digital and Technology
Officer, along with two new board members. As mentioned during the
Q4 FY‘24 earnings results, this new team is taking significant
action in areas that will reposition PETS for growth and
profitability.”
“To be clear, the Q1 financial results do not
reflect the full impact of these improvements which began in the
back half of the quarter,” Ms. Campos continued. “We have made
strong progress on key cost reduction initiatives including
combining and streamlining operations between PetMeds and
PetCareRx, and the new team has begun to advance our customer
growth strategies. We are gaining momentum and seeing early
positive signs of our key leading indicators, validating our
strategy to create an ecosystem of products and services for pets’
well-being and longevity.”
This afternoon the Company will host a
conference call to review the quarter’s financial results.
Time: 4:30 P.M. Eastern Time,
August 6, 2024.
Public call dial in: (844)
826-3035 (toll free) or (412) 317-5195.
Webcast stream
link: https://investors.petmeds.com for those who
wish to stream the call via webcast.
Replay: Available until August
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 10190753.
About PetMed Express,
Inc.Founded in 1996, PetMeds is the leader in pioneering
the digital pet pharmacy industry. As a national online
retailer, PetMeds.com and PetCareRx.com are top choices
for delivering preventive and chronic symptom prescriptions and OTC
medications and products through their thousands of veterinary
partners and a loyal customer base. Leveraging telehealth and
insurance partnerships, they offer value and convenience to pet
families at every stage of their pets' lives, whether dogs, cats,
or horses. PetMeds and PetCareRx provide a comprehensive range of
medications, food products, and essential supplies through their
websites, www.PetMeds.com and www.PetCareRx.com.
Forward Looking StatementThis
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) |
|
|
June 30,2024 |
|
March 31,2024 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
45,992 |
|
$ |
55,296 |
Accounts receivable, less allowance for doubtful accounts of $109
and $273, respectively |
|
2,261 |
|
|
3,283 |
Inventories - finished goods |
|
25,520 |
|
|
28,556 |
Prepaid expenses and other current assets |
|
3,851 |
|
|
6,325 |
Prepaid income taxes |
|
– |
|
|
188 |
Total current assets |
|
77,624 |
|
|
93,648 |
|
|
|
|
Noncurrent assets: |
|
|
|
Property and equipment, net |
|
26,109 |
|
|
26,657 |
Intangible and other assets, net |
|
16,014 |
|
|
16,503 |
Goodwill |
|
26,658 |
|
|
26,658 |
Operating lease right-of-use assets, net |
|
1,297 |
|
|
1,432 |
Deferred tax assets, net |
|
5,012 |
|
|
4,986 |
Total noncurrent assets |
|
75,090 |
|
|
76,236 |
|
|
|
|
Total assets |
$ |
152,714 |
|
$ |
169,884 |
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
24,467 |
|
$ |
37,024 |
Sales tax payable |
|
25,331 |
|
|
25,012 |
Accrued expenses and other current liabilities |
|
5,201 |
|
|
7,060 |
Current lease liabilities |
|
438 |
|
|
459 |
Deferred revenue |
|
2,146 |
|
|
2,603 |
Income taxes payable |
|
717 |
|
|
– |
Total current liabilities |
|
58,300 |
|
|
72,158 |
|
|
|
|
Long-term lease
liabilities |
|
883 |
|
|
995 |
|
|
|
|
Total liabilities |
|
59,183 |
|
|
73,153 |
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
Preferred stock, $0.001 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, $0.001 par value, 40,000,000 shares authorized;
20,600,652 and 21,148,692 shares issued and outstanding,
respectively |
|
21 |
|
|
21 |
Additional paid-in capital |
|
16,942 |
|
|
25,146 |
Retained earnings |
|
76,559 |
|
|
71,555 |
|
|
|
|
Total shareholders' equity |
|
93,531 |
|
|
96,731 |
|
|
|
|
Total liabilities and
shareholders' equity |
$ |
152,714 |
|
$ |
169,884 |
|
|
|
|
|
|
|
|
PETMED EXPRESS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except for share and per
share amounts) (Unaudited) |
|
|
|
Three Months EndedJune 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
Sales |
$ |
67,952 |
|
|
$ |
78,244 |
|
Cost of sales |
|
49,981 |
|
|
|
55,718 |
|
|
|
|
|
|
Gross profit |
|
17,971 |
|
|
|
22,526 |
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
General and administrative (including stock compensation of
($8,204) and $1,760, respectively) |
|
4,874 |
|
|
|
15,711 |
|
Advertising |
|
6,990 |
|
|
|
7,265 |
|
Depreciation and amortization |
|
1,721 |
|
|
|
1,678 |
|
Total operating expenses |
|
13,585 |
|
|
|
24,654 |
|
|
|
|
|
|
Income (loss) from
operations |
|
4,386 |
|
|
|
(2,128 |
) |
|
|
|
|
|
Other income: |
|
|
|
|
Interest income, net |
|
95 |
|
|
|
194 |
|
Other, net |
|
231 |
|
|
|
506 |
|
Total other income |
|
326 |
|
|
|
700 |
|
|
|
|
|
|
Income (loss) before provision
for income taxes |
|
4,712 |
|
|
|
(1,428 |
) |
|
|
|
|
|
Provision (benefit) for income
taxes |
|
958 |
|
|
|
(292 |
) |
|
|
|
|
|
Net income (loss) |
$ |
3,754 |
|
|
$ |
(1,136 |
) |
|
|
|
|
|
Net income (loss) per common
share: |
|
|
|
|
Basic |
$ |
0.18 |
|
|
$ |
(0.06 |
) |
Diluted |
$ |
0.18 |
|
|
$ |
(0.06 |
) |
|
|
|
|
|
Weighted average number of
common shares outstanding: |
|
|
|
|
Basic |
|
20,513,281 |
|
|
|
20,332,526 |
|
Diluted |
|
20,941,505 |
|
|
|
20,332,526 |
|
|
|
|
|
|
Cash dividends declared per
common share |
$ |
— |
|
|
$ |
0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
PETMED EXPRESS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(In thousands)
(Unaudited) |
|
|
|
|
Three Months EndedJune 30, |
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating
activities: |
|
|
|
|
|
Net income (loss) |
$ |
3,754 |
|
|
$ |
(1,136 |
) |
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
1,721 |
|
|
|
1,678 |
|
Share based compensation |
|
(8,204 |
) |
|
|
1,760 |
|
Deferred income taxes |
|
(26 |
) |
|
|
(627 |
) |
Bad debt expense |
|
142 |
|
|
|
19 |
|
(Increase) decrease in operating assets and increase (decrease) in
operating liabilities: |
|
|
|
|
|
Accounts receivable |
|
880 |
|
|
|
(46 |
) |
Inventories - finished goods |
|
3,036 |
|
|
|
(10,185 |
) |
Prepaid income taxes |
|
188 |
|
|
|
335 |
|
Prepaid expenses and other current assets |
|
2,474 |
|
|
|
(2,390 |
) |
Operating lease right-of-use assets, net |
|
135 |
|
|
|
196 |
|
Accounts payable |
|
(12,558 |
) |
|
|
9,115 |
|
Sales tax payable |
|
319 |
|
|
|
500 |
|
Accrued expenses and other current liabilities |
|
(505 |
) |
|
|
1,295 |
|
Lease liabilities |
|
(133 |
) |
|
|
(205 |
) |
Deferred revenue |
|
(457 |
) |
|
|
253 |
|
Income taxes payable |
|
717 |
|
|
|
– |
|
Net cash (used in) provided by
operating activities |
$ |
(8,517 |
) |
|
$ |
562 |
|
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
Acquisition of PetCareRx, net of cash acquired |
|
– |
|
|
|
(35,859 |
) |
Purchases of property and equipment |
|
(683 |
) |
|
|
(1,153 |
) |
Net cash used in investing
activities |
$ |
(683 |
) |
|
$ |
(37,012 |
) |
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
Dividends paid |
|
(104 |
) |
|
|
(6,102 |
) |
Net cash used in financing
activities |
$ |
(104 |
) |
|
$ |
(6,102 |
) |
|
|
|
|
|
|
Net decrease in cash and cash
equivalents |
|
(9,304 |
) |
|
|
(42,552 |
) |
Cash and cash equivalents, at
beginning of period |
|
55,296 |
|
|
|
104,086 |
|
|
|
|
|
|
|
Cash and cash equivalents, at
end of period |
$ |
45,992 |
|
|
$ |
61,534 |
|
|
|
|
|
|
|
Supplemental disclosure of
cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
Cash paid for income taxes |
$ |
81 |
|
|
$ |
– |
|
|
|
|
|
|
|
Dividends payable in accrued expenses and other current
liabilities |
$ |
112 |
|
|
$ |
1,507 |
|
|
|
|
|
|
|
|
|
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) |
June 30,2024 |
|
June 30,2023 |
|
$ |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Reconciliation of GAAP Net Income (Loss) to
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income ( loss) |
$ |
3,754 |
|
|
$ |
(1,136 |
) |
|
$ |
4,890 |
|
|
(430 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add (subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based Compensation(1) |
$ |
(8,204 |
) |
|
$ |
1,760 |
|
|
$ |
(9,964 |
) |
|
(566 |
)% |
Income Taxes |
$ |
958 |
|
|
$ |
(292 |
) |
|
$ |
1,250 |
|
|
(428 |
)% |
Depreciation and Amortization |
$ |
1,721 |
|
|
$ |
1,678 |
|
|
$ |
43 |
|
|
3 |
% |
Interest Income, Net(2) |
$ |
(95 |
) |
|
$ |
(194 |
) |
|
$ |
99 |
|
|
(51 |
)% |
Acquisition/Partnership Transactions and Other Items |
$ |
180 |
|
|
$ |
1,126 |
|
|
$ |
(946 |
) |
|
(84 |
)% |
Employee Severance |
$ |
149 |
|
|
$ |
393 |
|
|
$ |
(244 |
) |
|
(62 |
)% |
Adjusted EBITDA |
$ |
(1,537 |
) |
|
$ |
3,335 |
|
|
$ |
(4,872 |
) |
|
(146 |
)% |
(1) |
|
In April 2024, the Company and its former CEO entered into a
Transition and Separation Agreement pursuant to which the Company
cancelled the 510,000 restricted shares with a market condition and
accelerated vesting on the 30,000 remaining unvested
time-restricted shares which otherwise would not have vested.
Cancellation and acceleration of these shares resulted in an $8.7
million reduction of compensation expense in the three months ended
June 30, 2024. |
|
|
|
(2) |
|
Included in interest income, net is $410 thousand of interest
expense related to the sales tax liability and $505 thousand of
interest income for the three months ended June 30, 2024. This
compares to $426 thousand of interest expense related to the sales
tax liability and $620 thousand of interest income for the three
months ended June 30, 2023. |
PetMed Express (NASDAQ:PETS)
Gráfica de Acción Histórica
De Ago 2024 a Sep 2024
PetMed Express (NASDAQ:PETS)
Gráfica de Acción Histórica
De Sep 2023 a Sep 2024