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1800PetMeds® Press Releases
Call Us: 1-800-738-6337
02.11.2003
 
PETMED EXPRESS D/B/A 1-800-PetMeds® ANNOUNCES THIRD QUARTER RESULTS WITH CONTINUED GROWTH IN REORDER SALES

Pompano Beach, Florida, February 11, 2003 - PetMed Express, Inc. (OTCBB: PETS) today announced results for the quarter ended December 31, 2002. Net sales for the nine months ended December 31, 2002 were $40.1 million, compared to $21.4 million for the nine months ended December 31, 2001, an increase of 88%. Net sales for the quarter ended December 31, 2002 were $11.1 million, compared to $8.2 million for the quarter ended December 31, 2001, an increase of 34%. Net income for the nine months ended December 31, 2002 was $1.5 million or $.09 per share, $.07 diluted per share, compared to a net loss of $344,000 or $.02 loss per share for the nine months ended December 31, 2001. Net income was $435,000 or $.03 per share, $.02 diluted per share, for the third quarter of fiscal 2003, compared to net income of $353,000 or $.02 per share for the third quarter of fiscal 2002.

Mendo Akdag, CEO, announced, “We are pleased with our continued sales growth and with our strong customer reorder sales. Our customer reorder sales have increased $11.9 million, or 189%, to $18.1 million for the nine months ended December 31, 2002, from $6.3 million for the nine months ended December 31, 2001.

The majority of our product sales are affected by the seasons, due to the seasonality of mainly heartworm and flea and tick medications. The third quarter is considered our off season, and the first and second quarters encompass our peak season. Industry seasonality trends, according to Fountain Agricounsel LLC, Management Consultants to Agribusiness, are divided into percentage of industry sales by quarter. For the quarters ended March 31, June 30, September 30, and December 31 industry sales are 19%, 37%, 28%, and 16%, respectively.

We are excited about our new advertising campaign, which started airing nationwide earlier this month. We believe branding our 1-800-PetMeds® name is critical for our long term success and profitability. We invite everyone to preview our new commercial at our website, http://www.1800PetMeds.com/videos.asp.”

PetMed Express also reported new customer growth of approximately 74,000 customers for the third quarter of fiscal 2003, with 47% of those new customers ordering through our website at www.1800PetMeds.com.

Founded in 1996, PetMed Express is America’s largest pet pharmacy, delivering prescription and non-prescription pet medications, and health and nutritional supplements at competitive prices through the PetMed Express catalog, customer service representatives, 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 risk 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 Results of Financial Condition and Results of Operations in PetMed Express’ Annual Report on Form 10K for the year ended March 31, 2002.

For investment relations contact PetMed Express, Inc., Pompano Beach, Florida, Mendo Akdag, CEO, 954-979-5995.

 PETMED EXPRESS, INC. AND SUBSIDIARIES 
 FINANCIAL HIGHLIGHTS
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
 (UNAUDITED) 
               
   Three Months Ended     Nine Months Ended 
  December 31,   December 31,
               
   2002     2001     2002     2001 
               
 Sales   $        11,050,124  $          8,248,901  $        40,110,581  $        21,375,376
 Cost of sales            6,341,577           4,666,066         22,939,240         12,798,334
               
 Gross profit            4,708,547           3,582,835         17,171,341           8,577,042
               
 Operating expenses:                 
      General and administrative            1,801,081           1,589,912           5,858,693           4,240,019
      Advertising            2,116,258           1,549,154           8,755,679           4,334,617
      Severance charges                         -                          -                          -                195,000
      Depreciation and amortization                 97,939                75,336              264,711              263,492
 Total operating expenses            4,015,278           3,214,402         14,879,083           9,033,128
               
 Income (loss) from operations               693,269              368,433           2,292,258             (456,086)
               
 Other income (expense):                 
      Adjustment of estimate for legal settlement                         -                          -                          -                345,000
      Gain (loss) on disposal of property and equipment                 15,000                     109                15,000             (185,265)
      Interest expense                  (8,876)                 (4,333)               (18,916)               (45,378)
      Interest income                      505                  2,734                  6,462                15,183
      Other, net                   1,247               (13,595)                  4,534               (17,412)
 Total other income (expense)                   7,876               (15,085)                  7,080              112,128
               
 Income (loss) before provision for income taxes               701,145              353,348           2,299,338             (343,958)
               
 Provision for income taxes               266,435                        -                757,412                        -  
               
 Net income (loss)   $             434,710  $             353,348  $          1,541,926  $            (343,958)
               
 Net income (loss) per common share:                 
       Basic   $                   0.03  $                   0.02  $                   0.09  $                  (0.02)
       Diluted   $                   0.02  $                   0.02  $                   0.07  $                  (0.02)
                 
 Weighted average number of common shares outstanding:             
       Basic          17,658,010         16,360,010         17,142,763         16,360,010
       Diluted          21,662,154         18,263,436         20,999,411         16,360,010
               
 BALANCE SHEET DATA 
 (UNAUDITED) 
               
  December 31,   December 31,        
   2002     2001         
 Working capital (deficiency)            1,596,758             (734,185)        
 Total assets            9,462,999           3,645,345        
 Total liabilities            5,866,050           3,232,016        
 Total shareholders' equity            3,596,949              413,329