NASDAQ: PETS Sidoti Small-Cap Virtual Conference March 2023 Safe Harbor & Non-GAAP Measures This Presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, concerning expectations, beliefs plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements th ...

Core Viewpoint - PetMed Express, Inc. has announced preliminary financial results for the fourth quarter and fiscal year 2025, indicating a significant decline in net sales and an increase in net loss compared to the previous year [1][2][3]. Financial Performance - For the fiscal fourth quarter ended March 31, 2025, net sales are estimated to be between $51.1 million and $53.1 million, down from $66.5 million in the prior year [2]. - The estimated net loss for the fourth quarter is between $9.9 million and $10.4 million, compared to a net loss of $5.0 million in the prior year [2]. - For the fiscal year ended March 31, 2025, net sales are estimated to range from $231.6 million to $233.6 million, a decrease from $281.1 million in the prior year [3]. - The estimated net loss for the fiscal year is between $4.5 million and $5.0 million, an improvement from a net loss of $7.5 million in the prior year [3]. - The net loss includes a tax expense impact of $6.4 million due to a valuation allowance on the Company's net deferred tax assets [2][3]. Cash Position - As of March 31, 2025, the Company reported $54.7 million in cash and no debt [4]. Filing Status - The Company has filed Form 12b-25 with the SEC, indicating it is unable to file its Annual Report on Form 10-K within the prescribed time period, but expects to do so by July 1, 2025 [1][5].

Core Points - PetMed Express, Inc. has announced a delay in the release of its fourth quarter and fiscal year 2025 earnings due to the need for additional time to complete the year-end audit process [1] - The company expects to issue the earnings release and hold the related conference call by June 16, 2025, at the latest [2] Company Overview - Founded in 1996, PetMed Express, Inc. is a leader in the digital pet pharmacy industry, operating as a national online retailer through PetMeds.com and PetCareRx.com [3] - The company provides a wide range of medications, food products, and essential supplies for pets, leveraging partnerships with veterinary professionals and telehealth services [3]

Core Viewpoint - PetMed Express, Inc. will hold a conference call to discuss its financial results for the fourth quarter and full fiscal year ended March 31, 2025, on June 10, 2025 [1][2]. Company Overview - PetMed Express, Inc., operating as PetMeds, is a pioneer in the direct-to-consumer pet healthcare sector, founded in 1996 [3]. - The company is a licensed national online pharmacy across all 50 states, providing a range of pet health solutions including pharmaceuticals, compounded medications, and OTC supplements [3]. - PetMeds aims to empower pet owners to enhance the health and longevity of their pets through value, convenience, and care [3]. Conference Call Details - The conference call is scheduled for June 10, 2025, at 4:30 PM Eastern Time, with a question-and-answer session following the management's presentation [2]. - Participants are encouraged to dial in 5-10 minutes prior to the start time using the provided U.S. and international numbers [2]. - A telephonic replay of the conference call will be available after 7:30 PM Eastern Time on the same day until June 24, 2025 [2][3].

Core Insights - PetMed Express, Inc. has announced a strategic partnership with Dutch to enhance its pet healthcare ecosystem by providing affordable and accessible veterinary care options [1][2] - The collaboration aims to address the nationwide veterinarian shortage, which has left over 129 million Americans without easy access to pet care [2][3] Company Overview - PetMed Express, Inc. is a leader in the consumer pet healthcare sector, offering a wide range of pharmaceuticals, generics, compounded medications, and OTC supplements through its online platforms [4] - The company operates under the brands PetMeds and PetCareRx, delivering services across all fifty states [4] Partnership Details - The partnership allows pet parents to sign up for a monthly Dutch membership, providing virtual access to veterinarians for 24/7 appointments in 34 states [2] - Dutch has completed nearly 700,000 visits and treats over 150 conditions, including flea and tick medication and treatments for allergies and joint pain [2] Industry Context - The 2025 State of Veterinary Care Report indicates that approximately 38% of the U.S. population lives in areas lacking adequate veterinary care, highlighting the need for telehealth solutions [3] - Dutch, launched in July 2021, connects licensed veterinarians with pet owners and has expanded its services to include prescription medications, addressing the critical vet shortage in the U.S. [5]

Core Points - PetMed Express, Inc. will ring the Nasdaq Opening Bell on April 11, 2025, in celebration of National Pet Day, highlighting the bond between people and their pets [1][2] - The event will feature adoptable rescue dogs from Bidawee, emphasizing the importance of pet adoption and the joy pets bring to families [2][3] - Sandra Campos, President & CEO of PetMeds, advocates for accessible preventative healthcare for pets and supports rescue efforts across the country [3] Company Overview - Founded in 1996, PetMed Express, Inc. is a leader in the consumer pet healthcare sector, providing a wide range of pet health products through its online platforms [5] - The company offers prescription medications, vet-recommended food, and supplies, aiming to enhance the wellness and longevity of pets [5] - PetMeds operates with expert pharmacists and licenses across fifty states, ensuring a comprehensive service for pet owners [5]

Ms. Campbell added, "The appointment of Peter Batushansky to our Board, as well as the recent appointments of Justin Mennen and Leah Solivan, are the result of our strong ongoing focus on strategic board composition and refreshment, aligning the Board's skillsets with the oversight needed to drive shareholder value." Former pet industry executive with more than 20 years of experience across retail, pet, healthcare, and private equity Third independent director to join the Board since 2024 Longtime board mem ...

Group 1: Campaign Overview - Greater Good Charities and Bally Bet collaborated to raise 1 million meals for shelter pets across the country during the football season [1][2] - The campaign engaged football fans and pet lovers through social media, resulting in 50 to 100 pet meals donated per interaction [2] Group 2: Impact and Contributions - The partnership with the Cleveland Browns contributed an additional 1,000 pet meals for every point scored during games [2] - Greater Good Charities has invested over $750 million in impact since 2007, supporting charitable partners in 121 countries [4] Group 3: Company Profiles - Bally's Corporation operates 19 casinos across 11 states and has a growing omni-channel presence, including a sports betting platform [5] - Greater Good Charities is a 501(c)(3) nonprofit organization focused on helping people, pets, and the planet [4]

Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $53 million, a 19% decline from $65.3 million in the same period last year, primarily due to a 34% reduction in gross advertising [25] - Gross profit decreased to $14.9 million from $17.9 million year-over-year, with gross profit as a percentage of sales improving by 80 basis points to 28.1% [25][26] - General and administrative expenses decreased by 19.7% to $10.8 million from $13.4 million last year, driven by lower stock-based compensation and payroll expenses [26] - Net loss for the quarter was $700,000 or $0.03 per diluted share, an improvement from a net loss of $2 million or $0.10 per diluted share in the prior year [28] Business Line Data and Key Metrics Changes - The company achieved $2 million in adjusted EBITDA, up from $900,000 in the prior year period, indicating improved operational efficiency [28] - The average order value (AOV) increased by 7% to $108 from $101 year-over-year, while shipped order AOV rose by 4.3% to $97 from $93 [13] Market Data and Key Metrics Changes - Approximately 63,000 new customers received orders during the quarter, contributing to customer base growth despite overall revenue decline [25] - Inventory efficiency improved, with inventory turn rising to 1.5% in Q3 from 0.9% last year, alongside a 66% reduction in total inventory on hand to $11.8 million [15] Company Strategy and Development Direction - The company is focused on repositioning itself as a leader in consumer pet healthcare, emphasizing digital shopping enhancements and operational efficiency [7][12] - Cost-cutting measures and consolidation strategies are in place, targeting $5 million in annualized savings [8] - The company is modernizing its technology stack and enhancing customer experience to capture a younger demographic, particularly millennials and Gen Z [54] Management's Comments on Operating Environment and Future Outlook - Management noted that customers are under pressure, with reduced visits to veterinarians and some decline in prescriptions, but higher-income households continue to spend [44][47] - The competitive landscape remains dynamic, and the company is executing a disciplined transformation to enhance customer experience and operational infrastructure [21][22] Other Important Information - The company has resolved operational issues related to order management systems and is investing in technology to ensure a secure digital ecosystem [20] - Marketing strategies are being refined to focus on sustainable, profitable growth, with a reset of the marketing foundation planned [18][58] Q&A Session Summary Question: Clarification on new customer count and growth rates - Management confirmed that 63,000 new customers received orders in the quarter, ensuring clarity on customer count definitions [33] Question: Impact of SKU rationalization on revenue growth - Management indicated that SKU optimization did not significantly impact revenue, as many underperforming SKUs were drop-shipped and not directly tied to sales [36] Question: Trends in customer spending and market outlook - Management acknowledged that customers are pressured but noted that higher-income consumers continue to spend consistently [44][47] Question: Future marketing investments and revenue growth strategies - Management discussed the importance of foundational investments in customer experience before ramping up marketing spend to drive revenue growth [58][60]

Financial Performance - For the three months ended December 31, 2024, the net loss was $707,000, a significant improvement from a net loss of $2,027,000 for the same period in 2023, representing a 65% decrease [101]. - Gross profit margin increased to 28.1% for the three months ended December 31, 2024, compared to 27.4% for the same period in 2023 [94]. - Adjusted EBITDA for the three months ended December 31, 2024, was $2,002,000, a 116% increase from $925,000 in the same period of 2023 [101]. - The company reported a net income of $5,373,000 for the nine months ended December 31, 2024, compared to a net loss of $2,448,000 for the same period in 2023 [102]. - Gross profit decreased by approximately $3.0 million, or 16.6%, to approximately $14.9 million for the quarter ended December 31, 2024, from approximately $17.9 million for the same quarter in 2023 [112]. Sales and Customer Metrics - Net sales decreased by approximately $12.3 million, or 18.9%, to approximately $53.0 million for the quarter ended December 31, 2024, compared to approximately $65.3 million for the same quarter in 2023 [103]. - Reorder sales decreased by approximately $9.0 million, or 16.6%, to approximately $45.1 million for the quarter ended December 31, 2024, compared to approximately $54.1 million for the same quarter in 2023 [104]. - New order sales decreased by approximately $2.7 million, or 31.0%, to approximately $6.1 million for the quarter ended December 31, 2024, compared to $8.8 million for the same quarter in 2023 [105]. - The company acquired approximately 63,000 new customers for the quarter ended December 31, 2024, compared to approximately 97,000 new customers for the same quarter in 2023 [106]. - Recurring net sales, including AutoShip & Save subscriptions and membership revenue, as a percentage of total gross sales was 56.2% for the quarter ended December 31, 2024, up from 52.2% for the same period last year [109]. Cost Management - Total operating expenses decreased to 29.0% of sales for the three months ended December 31, 2024, down from 32.1% in the prior year [94]. - Cost of sales as a percentage of sales decreased to 71.9% for the three months ended December 31, 2024, from 72.6% in the same period of 2023 [94]. - Advertising expenses as a percentage of sales decreased to 5.6% for the three months ended December 31, 2024, from 8.8% in the same period of 2023 [94]. - General and administrative expenses decreased by approximately $2.6 million, or 19.7%, to approximately $10.8 million for the quarter ended December 31, 2024, from approximately $13.4 million for the same quarter in 2023 [113]. - Advertising expenses decreased by approximately $2.8 million, or 48.2%, to approximately $3.0 million for the quarter ended December 31, 2024, from approximately $5.8 million for the same quarter in 2023 [115]. Economic Outlook - The company expects macroeconomic factors, including inflation and rising interest rates, to continue impacting revenue growth rates for the remainder of fiscal 2025 [92]. Cash and Capital Management - The company believes that its cash and cash equivalents will be sufficient to continue operations for at least the next twelve months [121]. - As of December 31, 2024, the company held $50.1 million in cash and cash equivalents, which generate interest income based on prevailing interest rates [126]. - A significant change in interest rates could impact the interest income generated from excess cash and cash equivalents [126]. - The company has no debt obligations as of December 31, 2024 [126]. - The primary source of working capital is cash from operations, with no alternative sources currently available [125]. - The company anticipates funding future capital expenditures from working capital funds [125]. Corporate Governance - The Board of Directors has elected to suspend the quarterly dividend indefinitely to focus on growth initiatives and higher return projects [123]. - The company has no material long-term or short-term commitments for capital expenditures, relying on working capital for necessary additions [125]. - As of December 31, 2024, the company had $1.1 million in outstanding lease commitments from the PetCareRx acquisition [124]. - Cash and cash equivalents are managed by a limited number of outside professional managers under investment guidelines set by the Board of Directors [126]. - The company does not hold any derivative financial instruments that could expose it to significant market risk [126].