x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended March 31, 2015
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OR
|
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from ___________ to ___________
|
Large accelerated filer | o | Accelerated filer | x | |
Non-accelerated filer | o | Smaller reporting company | o |
Page
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|||
PART I
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1
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Item 1.
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Business
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1
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Item 1A.
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Risk Factors
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6
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Item 1B.
|
Unresolved Staff Comments
|
10
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Item 2.
|
Properties
|
10
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Item 3.
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Legal Proceedings
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10
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Item 4.
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Mine Safety Disclosures
|
10
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PART II
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11
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||
Item 5.
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Market for Registrant
’
s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
11
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Item 6.
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Selected Financial Data
|
14
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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15
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
|
21
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Item 8.
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Financial Statements and Supplementary Data
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22
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Item 9.
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
40
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Item 9A.
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Controls and Procedures
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40
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Item 9B.
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Other Information
|
40
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PART III
|
41
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||
Item 10.
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Directors, Executive Officers, and Corporate Governance
|
41
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Item 11.
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Executive Compensation
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41
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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41
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
|
41
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Item 14.
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Principal Accountant Fees and Services
|
41
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PART IV
|
42
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||
Item 15.
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Exhibits, Financial Statement Schedules
|
42
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SIGNATURES
|
43
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1 |
2 |
3 |
|
●
|
Product selection and availability, including the availability of prescription and non-prescription medications;
|
|
●
|
Brand recognition;
|
|
●
|
Reliability and speed of delivery;
|
|
●
|
Personalized service and convenience;
|
|
●
|
Price; and
|
|
●
|
Quality of website content.
|
|
●
|
Channel leader, in an estimated $4.0 billion industry;
|
|
●
|
“1-800-PetMeds” brand name;
|
|
●
|
Licensed pharmacy to conduct business in 50 states, and awarded Vet-VIPPS
CM
(Veterinary-Verified Internet Pharmacy Practice Site) accreditation by the National Association of Boards of Pharmacy®;
|
|
●
|
Exceptional customer care and support
|
4 |
5 |
6 |
7 |
8 |
|
●
|
Our ability to obtain new customers at a reasonable cost, retain existing customers, or encourage reorders;
|
|
●
|
Our ability to increase the number of visitors to our website, or our ability to convert visitors to our website into customers;
|
|
●
|
The mix of medications and other pet products sold by us;
|
|
●
|
Our ability to manage inventory levels or obtain an adequate supply of products;
|
|
●
|
Our ability to adequately maintain, upgrade, and develop our website, the systems that we use to process customers’ orders and payments, or our computer network;
|
|
●
|
Increased competition within our market niche;
|
|
●
|
Price competition;
|
|
●
|
New products introduced to the market, including generics;
|
|
●
|
Increases in the cost of advertising;
|
|
●
|
The amount and timing of operating costs and capital expenditures relating to expansion of our product line or operations;
|
|
●
|
Disruption of our toll-free telephone service, technical difficulties, or systems and Internet outages or slowdowns; and
|
|
●
|
Unfavorable general economic trends.
|
9 |
10 |
Fiscal 2015:
|
High
|
Low
|
||||||
First Quarter
|
$ | 13.80 | $ | 12.63 | ||||
Second Quarter
|
$ | 14.54 | $ | 13.24 | ||||
Third Quarter
|
$ | 14.72 | $ | 12.56 | ||||
Fourth Quarter
|
$ | 16.59 | $ | 14.04 | ||||
Fiscal 2014:
|
High
|
Low
|
||||||
First Quarter
|
$ | 13.73 | $ | 12.37 | ||||
Second Quarter
|
$ | 17.17 | $ | 12.82 | ||||
Third Quarter
|
$ | 16.94 | $ | 14.58 | ||||
Fourth Quarter
|
$ | 16.65 | $ | 12.62 |
Declaration Date
|
Per Share
Dividend
|
Record Date
|
Total Amount
(In thousands)
|
Payment Date
|
||||||
May 3, 2013
|
$ | 0.150 |
May 15, 2013
|
$ | 3,016 |
May 24, 2013
|
||||
July 26, 2013
|
$ | 0.170 |
August 12, 2013
|
$ | 3,433 |
August 23, 2013
|
||||
October 28, 2013
|
$ | 0.170 |
November 8, 2013
|
$ | 3,432 |
November 22, 2013
|
||||
January 30, 2014
|
$ | 0.170 |
February 12, 2014
|
$ | 3,432 |
February 21, 2014
|
||||
May 2, 2014
|
$ | 0.170 |
May 14, 2014
|
$ | 3,432 |
May 23, 2014
|
||||
July 21, 2014
|
$ | 0.170 |
August 4, 2014
|
$ | 3,446 |
August 15, 2014
|
||||
October 20, 2014
|
$ | 0.170 |
November 3, 2014
|
$ | 3,445 |
November 14, 2014
|
||||
January 20, 2015
|
$ | 0.170 |
February 3, 2015
|
$ | 3,445 |
February 13, 2015
|
11 |
Fiscal Year Ended March 31,
|
||||||||||||||||||||||||
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
|||||||||||||||||||
Nasdaq Composite
|
100.00 | 116.80 | 132.87 | 143.58 | 188.17 | 219.73 | ||||||||||||||||||
S&P 500
|
100.00 | 115.65 | 125.52 | 143.05 | 174.31 | 196.51 | ||||||||||||||||||
Russell 2000
|
100.00 | 125.79 | 125.56 | 146.03 | 182.39 | 197.37 | ||||||||||||||||||
PetMed Express, Inc.
|
100.00 | 73.57 | 60.23 | 74.94 | 78.48 | 101.55 |
12 |
EQUITY COMPENSATION PLAN INFORMATION
|
||||||||||||
(In thousands, except for per share amounts)
|
||||||||||||
Number of securities
|
Number of securities
|
|||||||||||
to be issued upon
|
Weighted average
|
remaining available
|
||||||||||
exercise of outstanding
|
exercise price of
|
for future issuance
|
||||||||||
options, warrants
|
outstanding options,
|
under equity
|
||||||||||
Plan category
|
and rights
|
warrants and rights
|
compensation plans
|
|||||||||
2006 Employee Restricted Stock Plan
|
773 | - | 558 | |||||||||
2006 Director Restricted Stock Plan
|
242 | - | 290 | |||||||||
Total
|
1,015 | 848 |
13 |
14 |
15 |
Fiscal Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Sales
|
100.0 | % | 100.0 | % | 100.0 | % | ||||||
Cost of sales
|
66.8 | 66.7 | 66.1 | |||||||||
Gross profit
|
33.2 | 33.3 | 33.9 | |||||||||
Operating expenses:
|
||||||||||||
General and administrative
|
9.2 | 9.2 | 9.5 | |||||||||
Advertising
|
11.0 | 11.6 | 12.0 | |||||||||
Discontinued project costs
|
0.7 | - | - | |||||||||
Depreciation
|
0.3 | 0.4 | 0.5 | |||||||||
Total operating expenses
|
21.2 | 21.2 | 22.0 | |||||||||
Income from operations
|
12.0 | 12.1 | 11.9 | |||||||||
Total other income
|
0.1 | 0.1 | 0.1 | |||||||||
Income before provision for income taxes
|
12.1 | 12.2 | 12.0 | |||||||||
Provision for income taxes
|
4.5 | 4.5 | 4.5 | |||||||||
Net income
|
7.6 | % | 7.7 | % | 7.5 | % |
16 |
Sales (In thousands)
|
2015
|
%
|
2014
|
%
|
$ Variance
|
% Variance
|
||||||||||||||||||
Reorder Sales
|
$ | 189,685 | 82.7 | % | $ | 191,205 | 81.9 | % | $ | (1,520 | ) | -0.8 | % | |||||||||||
New Order Sales
|
$ | 39,710 | 17.3 | % | $ | 42,186 | 18.1 | % | $ | (2,476 | ) | -5.9 | % | |||||||||||
Total Net Sales
|
$ | 229,395 | 100.0 | % | $ | 233,391 | 100.0 | % | $ | (3,996 | ) | -1.7 | % | |||||||||||
Internet Sales
|
$ | 184,078 | 80.2 | % | $ | 184,356 | 79.0 | % | $ | (278 | ) | -0.2 | % | |||||||||||
Contact Center Sales
|
$ | 45,317 | 19.8 | % | $ | 49,035 | 21.0 | % | $ | (3,718 | ) | -7.6 | % | |||||||||||
Total Net Sales
|
$ | 229,395 | 100.0 | % | $ | 233,391 | 100.0 | % | $ | (3,996 | ) | -1.7 | % |
17 |
18 |
Sales (In thousands)
|
2014
|
%
|
2013
|
%
|
$ Variance
|
% Variance
|
||||||||||||||||||
Reorder Sales
|
$ | 191,205 | 81.9 | % | $ | 184,814 | 81.1 | % | $ | 6,391 | 3.5 | % | ||||||||||||
New Order Sales
|
$ | 42,186 | 18.1 | % | $ | 43,015 | 18.9 | % | $ | (829 | ) | -1.9 | % | |||||||||||
Total Net Sales
|
$ | 233,391 | 100.0 | % | $ | 227,829 | 100.0 | % | $ | 5,562 | 2.4 | % | ||||||||||||
Internet Sales
|
$ | 184,356 | 79.0 | % | $ | 175,984 | 77.2 | % | $ | 8,372 | 4.8 | % | ||||||||||||
Contact Center Sales
|
$ | 49,035 | 21.0 | % | $ | 51,845 | 22.8 | % | $ | (2,810 | ) | -5.4 | % | |||||||||||
Total Net Sales
|
$ | 233,391 | 100.0 | % | $ | 227,829 | 100.0 | % | $ | 5,562 | 2.4 | % |
19 |
20 |
Total
|
Less than
1 year
|
1-2 years
|
3-5 Years
|
More than
5 years
|
||||||||||||||||
Property lease
|
$ | 1,300 | $ | 781 | $ | 519 | $ | - | $ | - | ||||||||||
Executive employment contract
|
$ | 550 | $ | 550 | $ | - | $ | - | $ | - | ||||||||||
Total obligations
|
$ | 1,850 | $ | 1,331 | $ | 519 | $ | - | $ | - |
21 |
Page
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||
Report of Independent Registered Public Accounting Firm
|
23
|
|
Consolidated Balance Sheets as of March 31, 2015 and 2014
|
24
|
|
Consolidated Statements of Comprehensive Income for each of the three years in the period ended March 31, 2015
|
25
|
|
Consolidated Statements of Changes in Shareholders’ Equity for each of the three years in the period ended March 31, 2015
|
26
|
|
Consolidated Statements of Cash Flows for each of the three years in the period ended March 31, 2015
|
27
|
|
Notes to Consolidated Financial Statements
|
28
|
|
Report of Management on Internal Control Over Financial Reporting
|
38
|
|
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting
|
39
|
22 |
/s/ McGladrey LLP
|
|
McGladrey LLP
|
23 |
March 31,
|
March 31,
|
|||||||
2015
|
2014
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 35,613 | $ | 18,305 | ||||
Short term investments - available for sale
|
15,591 | 15,539 | ||||||
Accounts receivable, less allowance for doubtful accounts of $8 and $7, respectively
|
1,931 | 1,761 | ||||||
Inventories - finished goods
|
25,068 | 35,727 | ||||||
Prepaid expenses and other current assets
|
1,380 | 1,761 | ||||||
Deferred tax assets
|
817 | 1,062 | ||||||
Prepaid income taxes
|
- | 54 | ||||||
Total current assets
|
80,400 | 74,209 | ||||||
Nonurrent assets:
|
||||||||
Prepaid expenses
|
- | 1,996 | ||||||
Property and equipment, net
|
1,569 | 1,310 | ||||||
Intangible assets
|
860 | 860 | ||||||
Deferred tax assets
|
23 | - | ||||||
Total noncurrent assets
|
2,452 | 4,166 | ||||||
Total assets
|
$ | 82,852 | $ | 78,375 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 5,153 | $ | 5,768 | ||||
Accrued expenses and other current liabilities
|
2,214 | 2,325 | ||||||
Income taxes payable
|
50 | - | ||||||
Total current liabilities
|
7,417 | 8,093 | ||||||
Deferred tax liabilities
|
- | 65 | ||||||
Total liabilities:
|
7,417 | 8,158 | ||||||
Commitments and contingencies
|
||||||||
Shareholders’ equity:
|
||||||||
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 | ||||||
Common stock, $.001 par value, 40,000 shares authorized; 20,262 and 20,190 shares issued and outstanding, respectively | 20 | 20 | ||||||
Additional paid-in capital
|
3,117 | 1,578 | ||||||
Retained earnings
|
72,343 | 68,647 | ||||||
Accumulated other comprehensive loss
|
(54 | ) | (37 | ) | ||||
Total shareholders’ equity
|
75,435 | 70,217 | ||||||
Total liabilities and shareholders’ equity
|
$ | 82,852 | $ | 78,375 |
24 |
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Sales
|
$ | 229,395 | $ | 233,391 | $ | 227,829 | ||||||
Cost of sales
|
153,125 | 155,774 | 150,708 | |||||||||
Gross profit
|
76,270 | 77,617 | 77,121 | |||||||||
Operating expenses:
|
||||||||||||
General and administrative
|
21,101 | 21,352 | 21,592 | |||||||||
Advertising
|
25,182 | 27,180 | 27,433 | |||||||||
Discontinued project costs
|
1,714 | - | - | |||||||||
Depreciation
|
660 | 867 | 1,091 | |||||||||
Total operating expenses
|
48,657 | 49,399 | 50,116 | |||||||||
Income from operations
|
27,613 | 28,218 | 27,005 | |||||||||
Other income (expense):
|
||||||||||||
Interest income, net
|
184 | 185 | 306 | |||||||||
Other, net
|
1 | (4 | ) | (5 | ) | |||||||
Total other income
|
185 | 181 | 301 | |||||||||
Income before provision for income taxes
|
27,798 | 28,399 | 27,306 | |||||||||
Provision for income taxes
|
10,345 | 10,427 | 10,141 | |||||||||
Net income
|
$ | 17,453 | $ | 17,972 | $ | 17,165 | ||||||
Net change in unrealized loss on short term investments
|
(17 | ) | (35 | ) | (46 | ) | ||||||
Comprehensive income
|
$ | 17,436 | $ | 17,937 | $ | 17,119 | ||||||
Net income per common share:
|
||||||||||||
Basic
|
$ | 0.87 | $ | 0.90 | $ | 0.86 | ||||||
Diluted
|
$ | 0.87 | $ | 0.90 | $ | 0.86 | ||||||
Weighted average number of common shares outstanding:
|
||||||||||||
Basic
|
20,015 | 19,901 | 19,926 | |||||||||
Diluted
|
20,136 | 20,043 | 20,049 | |||||||||
Cash dividends declared per common share
|
$ | 0.68 | $ | 0.66 | $ | 1.60 |
25 |
Convertible
|
Common
|
Additional
|
Other
|
|||||||||||||||||||||||||||||
Preferred Stock
|
Stock
|
Paid-In
|
Retained
|
Comprehensive
|
||||||||||||||||||||||||||||
Shares
|
Amounts
|
Shares
|
Amounts
|
Capital
|
Earnings
|
Loss
|
Total
|
|||||||||||||||||||||||||
Balance, March 31, 2012
|
3 | $ | 9 | 20,338 | $ | 20 | $ | - | $ | 81,108 | $ | 44 | $ | 81,181 | ||||||||||||||||||
Issuance of restricted stock, net
|
- | - | 168 | - | - | - | - | - | ||||||||||||||||||||||||
Share based compensation
|
- | - | - | - | 1,943 | - | - | 1,943 | ||||||||||||||||||||||||
Dividends declared
|
- | - | - | - | - | (32,080 | ) | - | (32,080 | ) | ||||||||||||||||||||||
Repurchased and retired shares
|
- | - | (397 | ) | - | (3,865 | ) | - | - | (3,865 | ) | |||||||||||||||||||||
Deferred tax adjustment related to resticted stock
|
- | - | - | - | (284 | ) | - | - | (284 | ) | ||||||||||||||||||||||
Allocation of retirement of repurchased shares of additional paid in capital and retained earnings
|
- | - | - | - | 2,206 | (2,206 | ) | - | - | |||||||||||||||||||||||
Net income
|
- | - | - | - | - | 17,165 | 17,165 | 17,165 | ||||||||||||||||||||||||
Other comprehensive loss:
|
||||||||||||||||||||||||||||||||
Net Change in unrealized loss on short term investments
|
(46 | ) | (46 | ) | ||||||||||||||||||||||||||||
Total comprehensive income
|
$ | 17,119 | - | |||||||||||||||||||||||||||||
Balance, March 31, 2013
|
3 | 9 | 20,109 | 20 | - | 63,987 | (2 | ) | 64,014 | |||||||||||||||||||||||
Issuance of restricted stock, net
|
- | - | 81 | - | - | - | - | - | ||||||||||||||||||||||||
Share based compensation
|
- | - | - | - | 1,479 | - | - | 1,479 | ||||||||||||||||||||||||
Dividends declared
|
- | - | - | - | - | (13,312 | ) | - | (13,312 | ) | ||||||||||||||||||||||
Deferred tax adjustment related to resticted stock
|
- | - | - | - | 99 | - | - | 99 | ||||||||||||||||||||||||
Net income
|
- | - | - | - | - | 17,972 | 17,972 | 17,972 | ||||||||||||||||||||||||
Other comprehensive loss:
|
||||||||||||||||||||||||||||||||
Net Change in unrealized loss on short term investments
|
(35 | ) | (35 | ) | ||||||||||||||||||||||||||||
Total comprehensive income
|
$ | 17,937 | - | |||||||||||||||||||||||||||||
Balance, March 31, 2014
|
3 | 9 | 20,190 | 20 | 1,578 | 68,647 | (37 | ) | 70,217 | |||||||||||||||||||||||
Issuance of restricted stock, net
|
- | - | 72 | - | - | - | - | - | ||||||||||||||||||||||||
Share based compensation
|
- | - | - | - | 1,481 | - | - | 1,481 | ||||||||||||||||||||||||
Dividends declared
|
- | - | - | - | - | (13,757 | ) | - | (13,757 | ) | ||||||||||||||||||||||
Deferred tax adjustment related to resticted stock
|
- | - | - | - | 58 | - | - | 58 | ||||||||||||||||||||||||
Net income
|
- | - | - | - | - | 17,453 | 17,453 | 17,453 | ||||||||||||||||||||||||
Other comprehensive loss:
|
||||||||||||||||||||||||||||||||
Net Change in unrealized loss on short term investments
|
(17 | ) | (17 | ) | ||||||||||||||||||||||||||||
Total comprehensive income
|
$ | 17,436 | - | |||||||||||||||||||||||||||||
Balance, March 31, 2015
|
3 | $ | 9 | 20,262 | $ | 20 | $ | 3,117 | $ | 72,343 | $ | (54 | ) | $ | 75,435 |
26 |
Year Ended
|
||||||||||||
March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$ | 17,453 | $ | 17,972 | $ | 17,165 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Depreciation
|
660 | 867 | 1,091 | |||||||||
Share based compensation
|
1,481 | 1,479 | 1,943 | |||||||||
Discontinued project costs
|
1,714 | - | - | |||||||||
Deferred income taxes
|
157 | (183 | ) | (76 | ) | |||||||
Bad debt expense
|
94 | 95 | 56 | |||||||||
(Increase) decrease in operating assets and increase (decrease) in liabilities:
|
||||||||||||
Accounts receivable
|
(264 | ) | (417 | ) | 77 | |||||||
Inventories - finished goods
|
10,659 | (4,126 | ) | (5,384 | ) | |||||||
Prepaid income taxes
|
54 | (54 | ) | 199 | ||||||||
Prepaid expenses and other current assets
|
662 | (1,237 | ) | (1,279 | ) | |||||||
Accounts payable
|
(616 | ) | (686 | ) | (165 | ) | ||||||
Accrued expenses and other current liabilities
|
(61 | ) | (42 | ) | (499 | ) | ||||||
Income taxes payable
|
50 | (162 | ) | 162 | ||||||||
Net cash provided by operating activities
|
32,043 | 13,506 | 13,290 | |||||||||
Cash flows from investing activities:
|
||||||||||||
Net change in investments
|
(68 | ) | (84 | ) | (5,189 | ) | ||||||
Purchases of property and equipment
|
(918 | ) | (45 | ) | (626 | ) | ||||||
Net cash used in investing activities
|
(986 | ) | (129 | ) | (5,815 | ) | ||||||
Cash flows from financing activities:
|
||||||||||||
Dividends paid
|
(13,807 | ) | (13,326 | ) | (31,972 | ) | ||||||
Purchases of treasury stock
|
- | - | (3,865 | ) | ||||||||
Tax adjustment related to stock compensation
|
58 | 99 | (284 | ) | ||||||||
Net cash used in financing activities
|
(13,749 | ) | (13,227 | ) | (36,121 | ) | ||||||
Net increase (decrease) in cash and cash equivalents
|
17,308 | 150 | (28,646 | ) | ||||||||
Cash and cash equivalents, at beginning of year
|
18,305 | 18,155 | 46,801 | |||||||||
Cash and cash equivalents, at end of year
|
$ | 35,613 | $ | 18,305 | $ | 18,155 | ||||||
Supplemental disclosure of cash flow information:
|
||||||||||||
Cash paid for income taxes
|
$ | 10,026 | $ | 10,727 | $ | 10,140 | ||||||
Retirement of treasury stock
|
$ | - | $ | - | $ | 3,865 | ||||||
Dividends payable in accrued expenses
|
$ | 212 | $ | 262 | $ | 276 |
27 |
28 |
(1)
|
Summary of Significant Accounting Policies (Continued)
|
29 |
March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Net income
|
$ | 17,453 | $ | 17,972 | $ | 17,165 | ||||||
Net change in unrealized loss on short term
investments
|
(17 | ) | (35 | ) | (46 | ) | ||||||
Comprehensive income
|
$ | 17,436 | $ | 17,937 | $ | 17,119 |
30 |
Fair Value Measurement at March 31, 2015 Using
|
||||||||||||||||
Quoted Prices
|
Significant
|
|||||||||||||||
in Active
|
Other
|
Significant
|
||||||||||||||
Markets for
|
Observable
|
Unobservable
|
||||||||||||||
March 31,
|
Identical Assets
|
Inputs
|
Inputs
|
|||||||||||||
2015
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Assets:
|
||||||||||||||||
Cash and Cash
equivalents - money market funds
|
$ | 35,613 | $ | 35,613 | $ | - | $ | - | ||||||||
Short term investments -
bond mutual funds
|
15,591 | 15,591 | - | - | ||||||||||||
$ | 51,204 | $ | 51,204 | $ | - | $ | - |
March 31,
|
||||||||
2015
|
2014
|
|||||||
Leasehold improvements
|
$ | 1,119 | $ | 1,124 | ||||
Computer software
|
3,391 | 2,749 | ||||||
Furniture, fixtures and equipment
|
4,686 | 5,771 | ||||||
9,196 | 9,644 | |||||||
Less: accumulated depreciation
|
(7,627 | ) | (8,334 | ) | ||||
Property and equipment, net
|
$ | 1,569 | $ | 1,310 |
31 |
March 31,
|
||||||||
2015
|
2014
|
|||||||
Accrued sales tax
|
$ | 465 | $ | 478 | ||||
Accrued credit card fees
|
285 | 275 | ||||||
Accrued salaries and benefits
|
741 | 754 | ||||||
Accrued professional expenses
|
225 | 275 | ||||||
Accrued sales return allowance
|
147 | 143 | ||||||
Accrued dividends payable
|
212 | 262 | ||||||
Other accrued liabilities
|
139 | 138 | ||||||
Accrued expenses and other current liabilities
|
$ | 2,214 | $ | 2,325 |
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Net income (numerator):
|
||||||||||||
Net income
|
$ | 17,453 | $ | 17,972 | $ | 17,165 | ||||||
Shares (denominator)
|
||||||||||||
Weighted average number of common shares
outstanding used in basic computation
|
20,015 | 19,901 | 19,926 | |||||||||
Common shares issuable upon the vesting
of restricted stock
|
111 | 132 | 113 | |||||||||
Common shares issuable upon conversion
of preferred shares
|
10 | 10 | 10 | |||||||||
Shares used in diluted computation
|
20,136 | 20,043 | 20,049 | |||||||||
Net income per common share:
|
||||||||||||
Basic
|
$ | 0.87 | $ | 0.90 | $ | 0.86 | ||||||
Diluted
|
$ | 0.87 | $ | 0.90 | $ | 0.86 |
32 |
March 31,
|
||||||||
2015
|
2014
|
|||||||
Deferred tax assets:
|
||||||||
Accrued expenses
|
$ | 545 | $ | 679 | ||||
Deferred stock compensation
|
246 | 248 | ||||||
Net operating loss carryforward
|
- | 53 | ||||||
Bad debt and inventory reserves
|
26 | 35 | ||||||
Property and equipment
|
23 | - | ||||||
Total deferred tax assets
|
840 | 1,015 | ||||||
Deferred tax liabilities:
|
||||||||
Property and equipment
|
- | (18 | ) | |||||
Total net deferred taxes
|
$ | 840 | $ | 997 |
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Current taxes
|
||||||||||||
Federal
|
$ | 9,303 | $ | 9,689 | $ | 9,588 | ||||||
State
|
885 | 921 | 913 | |||||||||
Total current taxes
|
10,188 | 10,610 | 10,501 | |||||||||
Deferred taxes
|
||||||||||||
Federal
|
143 | (167 | ) | (329 | ) | |||||||
State
|
14 | (16 | ) | (31 | ) | |||||||
Total deferred taxes
|
157 | (183 | ) | (360 | ) | |||||||
Total provision for income taxes
|
$ | 10,345 | $ | 10,427 | $ | 10,141 |
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Income taxes at U.S. statutory rates
|
$ | 9,729 | $ | 9,940 | $ | 9,557 | ||||||
State income taxes, net of federal tax benefit
|
589 | 583 | 562 | |||||||||
Permanent differences
|
(29 | ) | (35 | ) | (74 | ) | ||||||
Other
|
56 | (61 | ) | 96 | ||||||||
Total provision for income taxes
|
$ | 10,345 | $ | 10,427 | $ | 10,141 |
33 |
34 |
Declaration Date
|
Per Share
Dividend |
Record Date
|
Total Amount
(In thousands) |
Payment Date
|
||||||
May 2, 2014
|
$ | 0.170 |
May 14, 2014
|
$ | 3,432 |
May 23, 2014
|
||||
July 21, 2014
|
$ | 0.170 |
August 4, 2014
|
$ | 3,446 |
August 15, 2014
|
||||
October 20, 2014
|
$ | 0.170 |
November 3, 2014
|
$ | 3,445 |
November 14, 2014
|
||||
January 20, 2015
|
$ | 0.170 |
February 3, 2015
|
$ | 3,445 |
February 13, 2015
|
Employee
Plan Number of Shares (In thousands) |
Director
Plan Number of Shares (In thousands) |
Both Plans
Number of Shares (In thousands) |
||||||||||
Non-vested restricted stock outstanding at March 31, 2014
|
170 | 60 | 230 | |||||||||
Restricted stock granted
|
51 | 30 | 81 | |||||||||
Restricted stock vested
|
(83 | ) | (30 | ) | (113 | ) | ||||||
Restricted stock forfeited or expired
|
(10 | ) | - | (10 | ) | |||||||
Non-vested restricted stock outstanding at March 31, 2015
|
128 | 60 | 188 |
35 |
Year Ended March 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Allowance for doubtful accounts:
|
||||||||||||
Balance at beginning of period
|
$ | 7 | $ | 5 | $ | 5 | ||||||
Provision for doubtful accounts
|
95 | 95 | 56 | |||||||||
Write-off of uncollectible accounts receivable
|
(94 | ) | (93 | ) | (56 | ) | ||||||
Balance at end of year
|
$ | 8 | $ | 7 | $ | 5 |
Years Ending March 31, (in thousands)
|
|||||
2016
|
781 | ||||
2017
|
519 | ||||
Total lease payments
|
$ | 1,300 |
36 |
Quarter Ended:
|
June 30, 2014
|
September 30, 2014
|
December 31, 2014
|
March 31, 2015
|
|||||||||||||
Sales
|
$ | 72,541 | $ | 57,576 | $ | 49,284 | $ | 49,994 | |||||||||
Gross Profit
|
$ | 23,772 | $ | 18,459 | $ | 17,100 | $ | 16,939 | |||||||||
Income from operations
|
$ | 7,838 | $ | 4,290 | $ | 7,666 | $ | 7,819 | |||||||||
Net income
|
$ | 4,973 | $ | 2,732 | $ | 4,797 | $ | 4,951 | |||||||||
Diluted net income per common share
|
$ | 0.25 | $ | 0.14 | $ | 0.24 | $ | 0.25 | |||||||||
Quarter Ended:
|
June 30, 2013 |
September 30, 2013
|
December 31, 2013
|
March 31, 2014
|
|||||||||||||
Sales
|
$ | 74,194 | $ | 60,479 | $ | 50,086 | $ | 48,632 | |||||||||
Gross Profit
|
$ | 24,013 | $ | 19,252 | $ | 16,889 | $ | 17,463 | |||||||||
Income from operations
|
$ | 7,497 | $ | 6,532 | $ | 7,047 | $ | 7,142 | |||||||||
Net income
|
$ | 4,755 | $ | 4,150 | $ | 4,541 | $ | 4,526 | |||||||||
Diluted net income per common share
|
$ | 0.24 | $ | 0.21 | $ | 0.23 | $ | 0.23 |
37 |
/s/ Menderes Akdag
|
|||
Menderes Akdag
|
|||
President, Chief Executive Officer, Director
|
/s/ Bruce S. Rosenbloom | |||
Bruce S. Rosenbloom | |||
Chief Financial Officer |
38 |
/s/ McGladrey LLP | |||
McGladrey LLP |
39 |
40 |
41 |
|
3.1
|
Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form 10-SB, File No. 000-28827, filed January 10, 2000).
|
|
3.2
|
Articles of Amendment to the Amended and Restated Articles of Incorporation
filed June 6, 2001.*
|
|
3.3
|
By-Laws of the Corporation (incorporated by reference to Exhibit 3.3 to the Registration Statement on Form 10-SB, File No. 000-28827, filed January 10, 2000).
|
|
4.1
|
Specimen common stock certificate (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form 10-SB, File No. 000-28827, filed January 10, 2000).
|
|
10.1
|
1998 Stock Option Plan incorporated by reference to Exhibit 10.1 to the Registration Statement on Form 10-SB, File No. 000-28827, filed January 10, 2000).
|
|
10.2
|
Employment Agreement with Menderes Akdag (incorporated by reference to Exhibit 10 of the Registrant’s Form 8-K filed March 30, 2001).
|
|
10.3
|
Agreement for the Sale and Leaseback of the Land and Building (incorporated by reference to Exhibit 99.1 of the Registrant’s Form 8-K filed June 14, 2001).
|
|
10.4
|
Amendment Number 1 to Executive Employment Agreement with Menderes Akdag (incorporated by reference to Exhibit 99.1 of the Registrant’s Form 8-K filed March 18, 2004).
|
|
10.5
|
Amendment Number 2 to Executive Employment Agreement with Menderes Akdag (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed February 28, 2007).
|
|
10.6
|
2006 Employee Equity Compensation Restricted Stock Plan (incorporated by reference to our definitive Proxy Statement for our 2006 Annual Meeting of Stockholders filed June 22, 2006).
|
|
10.7
|
2006 Outside Director Equity Compensation Restricted Stock Plan (incorporated by reference to our definitive Proxy Statement for our 2006 Annual Meeting of Stockholders filed June 22, 2006).
|
|
10.8
|
Employment Letter with Bruce Rosenbloom dated May 30, 2001 (incorporated by reference to Exhibit 10.9 of the Registrant’s Form 8-K filed April 7, 2009).
|
|
10.9
|
Amendment Number 3 to Executive Employment Agreement with Menderes Akdag (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed February 8, 2010).
|
|
10.10
|
Amendment Number 4 to Executive Employment Agreement with Menderes Akdag (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed January 28, 2013).
|
|
14.1
|
Corporate Code of Ethics (incorporated by reference to our definitive Proxy Statement for our 2004 Annual Meeting of Stockholders filed June 30, 2004).
|
|
21.1
|
Subsidiaries of Registrant*
|
|
31.1
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).*
|
|
31.2
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).*
|
|
32.1
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 1350.**
|
42 |
PETMED EXPRESS, INC.
(the “registrant”)
|
||
By: /s/ Menderes Akdag
|
||
Menderes Akdag
Chief Executive Officer and President
(principal executive officer)
|
SIGNATURE
|
TITLE
|
|
|
Chief Executive Officer and President
|
|
/s/ Menderes Akdag
|
(principal executive officer)
|
|
Menderes Akdag
|
Officer and Director
|
|
/s/ Robert C. Schweitzer
|
Chairman of the Board
|
|
Robert C. Schweitzer
|
Director
|
|
Chief Financial Officer and Treasurer | ||
/s/ Bruce S. Rosenbloom
|
(principal financial and accounting officer)
|
|
Bruce S. Rosenbloom
|
Officer
|
|
/s/ Ronald J. Korn
|
Director
|
|
Ronald J. Korn
|
||
/s/ Gian M. Fulgoni
|
Director
|
|
Gian M. Fulgoni
|
||
/s/ Frank J. Formica
|
Director
|
|
Frank J. Formica
|
43 |
Exhibit 3.2 |
PETMED EXPRESS, INC.,
|
|||
|
|
/S/ Marc A. Puleo | |
By: Marc A. Puleo, M.D. President |
Exhibit 21.1 |
1.
|
I have reviewed this Annual Report on Form 10-K of PetMed Express, Inc. for the fiscal year ended March 31, 2015;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
|
May 22, 2015
|
|||
|
By:
|
/s/ Menderes Akdag | |
Menderes Akdag | |||
Chief Executive Officer and President |
1.
|
I have reviewed this Annual Report on Form 10-K of PetMed Express, Inc. for the fiscal year ended March 31, 2015;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
|
May 22, 2015
|
|||
|
By:
|
/s/ Bruce S. Rosenbloom | |
Bruce S. Rosenbloom | |||
Chief Financial Officer |
|
(1)
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
(2)
|
the information contained in the Report, fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
Date: May 22, 2015 | |||
|
By:
|
/s/ Menderes Akdag | |
Menderes Akdag | |||
Chief Executive Officer and President |
|
By:
|
/s/ Bruce S. Rosenbloom | |
Bruce S. Rosenbloom | |||
Chief Financial Officer |