PetMed Express Inc. Q4 FY2024 Financial Results

Greetings and welcome to the PetMed Express Fourth Quarter Financial Results Conference. The report summarizes the company's fiscal performance for Q4 FY2024. This quarter marks significant changes and strategic improvements implemented to enhance operational efficiency and drive future growth for PetMed Express (PETS).

Executive Summary

CEO Sandra Campos outlined transformative plans, emphasizing integration and consolidation efforts post the acquisition of PetCareRx, improved customer experience via technology enhancement, and initiatives to drive top-line growth and profitability.

This fiscal report contains significant financial metrics, forward-looking statements, and strategic initiatives being undertaken to streamline operations and ensure the long-term sustainability of the company.

Financial Performance

The company's financial performance for Q4 FY2024 reveals the following key metrics:

Revenue and Profit

Total revenue for the quarter was reported at $66.5M, up 6.6% year-over-year (YoY) from $62.4M. This increase was driven primarily by the acquisition of PetCareRx. PETS filled nearly 500,000 Rx prescriptions and foods over the past 18 months. New customer additions stood at 302,000 for FY2024, reflecting a 10% YoY increase.

Gross profit was $18.65M with a gross profit ratio of 27.98%. However, operating income showed a loss of $8.16M, primarily due to increased G&A and advertising expenses, and depreciation and amortization costs. Net loss for the quarter was $7.46M or $0.37 per diluted share.

Expenses

Total operating expenses amounted to $26.81M which included $15.25M in General and Administrative expenses and $10.51M in Selling and Marketing expenses.

Cash Flow

Net cash used in operating activities amounted to $-194k. PETS made significant investments including $4.51M in property, plant, and equipment and $35.86M for acquisitions. Dividends paid totaled $12.44M for FY2024.

Balance Sheet and Liquidity

As of March 31, 2024, PetMed Express held over $55M in cash equivalents with no debt, indicating a strong liquidity position.

Strategic Highlights and Future Outlook

CEO Sandra Campos emphasized strategic objectives focused on consolidating the brand, streamlining operations, and enhancing customer experience. The core pillars of the strategy include:

• Reinforcing a customer-centric approach.
• Expanding the product and services ecosystem for pet wellness.
• Implementing advanced technology solutions to improve operational efficiencies.
• Fostering repeat customer engagement through personalized marketing and improved loyalty programs.

Looking ahead, the management team is focused on achieving top-line growth through these strategic initiatives while maintaining financial discipline.

Ratios and Performance Metrics

PetMed Express's financial ratios reflect their comparative performance within the industry. For example, PETS reported a gross profit margin of 27.64%, operating profit margin of -3.09%, and a current ratio of 1.78. Their operational metrics highlight areas for improvement and showcase their strengths relative to peers.

Conclusion

Despite the net loss reported in the fourth quarter, PETS is strategically positioned to capitalize on industry growth opportunities. Management's focus on technology investments, brand consolidation, and operational efficiency improvements promises a robust path forward for sustained growth and profitability.