EX-99.1 2 may15068k-ex991.txt EXHIBIT 99.1 Date: May 15, 2006 Contact: Bruce S. Rosenbloom, CFO Phone: (954) 979 5995 Fax: (954) 971 0544 PETMED EXPRESS D/B/A 1-800-PETMEDS ANNOUNCES RECORD FINANCIAL RESULTS FOR FISCAL 2006 - SALES INCREASE 27%, NET INCOME INCREASES 51% Pompano Beach, Florida, May 15, 2006 - PetMed Express, Inc. (NASDAQ: PETS) today announced its financial results for the fiscal year ended March 31, 2006. Net sales for the year ended March 31, 2006 were $137.6 million, compared to $108.4 million for the year ended March 31, 2005, an increase of 27%. Net income was $12.1 million, or $0.50 diluted per share, for the year ended March 31, 2006, compared to net income of $8.0 million, or $0.34 diluted per share, for the year ended March 31, 2005, an increase to net income of 51%. The Company acquired approximately 624,000 new customers during the fiscal year compared to 510,000 during the prior year. Approximately 57% of all orders were placed on our website during the fiscal year. For the quarter ended March 31, 2006, net sales were $29.4 million, compared to $23.5 million for the quarter ended March 31, 2005, an increase of 25%. Net income for the quarter ended March 31, 2006 was $3.1 million, or $0.13 diluted per share, compared to net income of $2.4 million, or $0.10 diluted per share, for the same quarter the prior year, an increase to net income of 30%. The Company acquired approximately 94,000 new customers during the fourth fiscal quarter compared to 80,000 new customers for the same quarter in the prior year. Mendo Akdag, CEO and President, commented: "We are pleased to report that our retail reorder sales increased 29%, from $68.7 million to $88.4 million, for the years ended March 31, 2005 and 2006, respectively. We will continue to focus on reorder sales in fiscal 2007 by initiating more relevant personalized communication and health education content to build value for our customers and assist them in choosing the right products for their pets. We invite everyone to visit the newly launched health and education website, Pet Health 101 (www.pethealth101.com)." -------------------- 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 (312) 470-7365. 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 A.M. on May 15, 2006 until May 29, 2006 at 11:59 P.M. To access the replay, call (866) 365-4158 (toll free) or (203) 369-0225, 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, 2005. 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, 954-979-5995. ### 99.1 page 1 - 4 PETMED EXPRESS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

March 31, 2006 2005 ------------- ------------- ASSETS ------ Current assets: Cash and cash equivalents $ 23,216,907 $ 12,680,962 Accounts receivable, less allowance for doubtful accounts of $23,000 and $37,000, respectively 1,155,781 1,796,756 Inventories - finished goods 14,997,675 11,180,333 Prepaid expenses and other current assets 583,038 213,152 ------------- ------------- Total current assets 39,953,401 25,871,203 Property and equipment, net 1,497,589 1,286,267 Deferred income taxes 794,002 582,846 Intangible asset 365,000 365,000 Other assets 14,167 14,167 ------------- ------------- Total assets $ 42,624,159 $ 28,119,483 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ Current liabilities: Accounts payable $ 3,052,953 $ 2,724,990 Income taxes payable 958,318 601,535 Accrued expenses and other current liabilities 973,359 575,894 ------------- ------------- Total liabilities 4,984,630 3,902,419 ============= ============= 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 8,898 8,898 Common stock, $.001 par value, 40,000,000 shares authorized; 23,967,390 and 23,458,725 shares issued and outstanding, respectively 23,967 23,459 Additional paid-in capital 13,433,054 12,074,611 Retained earnings 24,173,610 12,110,096 ------------- ------------- Total shareholders' equity 37,639,529 24,217,064 ------------- ------------- Total liabilities and shareholders' equity $ 42,624,159 $ 28,119,483 ============= =============

99.1 page 2 - 4 PETMED EXPRESS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME

Year Ended March 31, 2006 2005 2004 ------------ ------------ ------------ Sales $ 137,583,155 $ 108,357,747 $ 93,994,233 Cost of sales 83,244,366 64,700,002 55,824,406 ------------ ------------ ------------ Gross profit 54,338,789 43,657,745 38,169,827 ------------ ------------ ------------ Operating expenses: General and administrative 14,078,343 11,396,320 10,754,427 Advertising 21,570,667 19,185,982 17,653,614 Depreciation and amortization 544,535 573,817 550,392 ------------ ------------ ------------ Total operating expenses 36,193,545 31,156,119 28,958,433 ------------ ------------ ------------ Income from operations 18,145,244 12,501,626 9,211,394 ------------ ------------ ------------ Other income (expense): Loss on disposal of property and equipment (1,719) - - Interest expense - (965) (14,546) Interest income 676,083 99,044 9,739 Other, net 215,586 3,710 6,938 ------------ ------------ ------------ Total other income (expense) 889,950 101,789 2,131 ------------ ------------ ------------ Income before provision for income taxes 19,035,194 12,603,415 9,213,525 Provision for income taxes 6,971,680 4,593,045 3,399,921 ------------ ------------ ------------ Net income $ 12,063,514 $ 8,010,370 $ 5,813,604 ============ ============ ============ Net income per common share: Basic $ 0.51 $ 0.35 $ 0.30 ============ ============ ============ Diluted $ 0.50 $ 0.34 $ 0.25 ============ ============ ============ Weighted average number of common shares outstanding: Basic 23,658,722 22,862,417 19,471,681 ============ ============ ============ Diluted 24,211,955 23,833,189 23,689,866 ============ ============ ============

99.1 page 3 - 4 PETMED EXPRESS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended March 31, 2006 2005 2004 ------------ ------------ ------------ Cash flows from operating activities: Net income $ 12,063,514 $ 8,010,370 $ 5,813,604 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 544,535 573,817 550,392 Tax benefit related to stock options exercised 342,920 918,749 588,872 Deferred income taxes (211,156) (1,490) - Loss on disposal of property and equipment 1,719 - - Bad debt expense (recovery) (1,709) 16,092 7,432 (Increase) decrease in operating assets and increase (decrease) in liabilities: Accounts receivable 642,684 (679,547) (488,850) Inventories - finished goods (3,817,342) (475) (6,911,712) Prepaid expenses and other current assets (369,886) 19,066 245,890 Other assets - 7,655 178,333 Accounts payable 327,963 (548,072) 702,603 Income taxes payable 356,783 179,090 251,693 Accrued expenses and other current liabilities 397,465 (146,456) 167,338 ------------ ------------ ------------ Net cash provided by operating activities 10,277,490 8,348,799 1,105,595 ------------ ------------ ------------ Cash flows from investing activities: Purchases of property and equipment (758,176) (171,757) (741,740) Net proceeds from the sale of property and equipment 600 - - ------------ ------------ ------------ Net cash used in investing activities (757,576) (171,757) (741,740) ------------ ------------ ------------ Cash flows from financing activities: Proceeds from the exercise of stock options and warrants and other transactions 1,016,031 1,293,436 1,999,345 Payments on the loan obligation - (68,442) (68,443) ------------ ------------ ------------ Net cash provided by financing activities 1,016,031 1,224,994 1,930,902 ------------ ------------ ------------ Net increase in cash and cash equivalents 10,535,945 9,402,036 2,294,757 Cash and cash equivalents, at beginning of period 12,680,962 3,278,926 984,169 ------------ ------------ ------------ Cash and cash equivalents, at end of period $ 23,216,907 $ 12,680,962 $ 3,278,926 ============ ============ ============ Supplemental disclosure of cash flow information: Cash paid for interest $ - $ 884 $ 14,302 ============ ============ ============ Cash paid for income taxes $ 6,483,132 $ 3,496,696 $ 2,513,214 ============ ============ ============

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