PetMed Express, Inc. (NASDAQ:PETS) Q2 2020 Earnings Conference Call - Final Transcript

Oct 26, 2020 • 08:00 am ET

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PetMed Express, Inc. (NASDAQ:PETS) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
Bruce S. Rosenbloom

on September 30, 2020, our sales were $75.4 million compared to $69.9 million for the same period, the prior year, an increase of 7.9%. For the six months ended on September 30, 2020, sales were $171.6 million compared to $149.9 million for the six months, the prior year, an increase of 14.5%. The increases in sales were due to increases in reorder sales for the quarter, and increases for both new order and reorder sales for the six months.

The average order value was approximately $87 for the quarter compared to $85 for the same period last year. For the second fiscal quarter, net income was $8.4 million or $0.42 diluted per share compared to $6.7 million or $0.33 diluted per share for the same quarter, the prior year, an increase to net income of 26%. And for the six months, net income was $16.2 million or $0.81 diluted per share compared to $12 million or $0.60 diluted per share a year ago, an increase to net income of 35%.

Reorder sales increased by 9.6% to $67.8 million for the quarter compared to reorder sales of $61.9 million for the same quarter, the prior year. And for the six months, reorder sales increased by 14.3% to $148.2 million compared to $129.6 million for the same period last year.

New order sales decreased by 5% to $7.7 million for the quarter compared to $8.1 million for the same period, the prior year. And for the six months, new order sales increased by 15.4% to $23.5 million compared to $20.3 million for the same period last year. We acquired approximately 96,000 new customers in our second fiscal quarter compared to 98,000 for the same period, the prior year. And we acquired approximately 282,000 new customers in the six months, compared to 238,000 for the same period a year ago.

Seasonality in our business is due to the proportion of flea, tick and heartworm medications in our product mix. Spring and summer are considered peak season, with fall and winter being the off-season. For the second fiscal quarter, our gross profit as a percentage of sales was 30.5% compared to 28.6% for the same period, the prior year. And for the six months, our gross profit as a percentage of sales was 29% compared to 27.9% for the same period a year ago.

Gross margins improved by 190 basis points for the September quarter and by 110 basis points for the six months. The increases were due to the benefit of having direct relationships with all major manufacturers and these manufacturers had Minimum Advertised Price Policies. Also, our product mix shifted to higher margin prescription medications during the September quarter, compared to the June quarter.

General and administrative expenses as a percentage of sales were 9% for both the quarter and the same quarter last year. For the quarter, we spent $5.1 million in advertising, compared to $4.8 million for the same quarter, the prior year, an increase of 8%. For the six