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]

Core Insights - PetMed Express, Inc. has appointed Peter Batushansky to its Board of Directors, effective April 09, 2025, marking the third independent director added since 2024 [1][2] - Dr. Gian Fulgoni, a longtime board member and former Chairman, will retire at the 2025 annual shareholders' meeting [1][2] - The company is undergoing a leadership transformation, with recent appointments including Leslie C. G. Campbell as Chairman and Sandra Campos as CEO [2][3] Company Strategy and Leadership - The addition of Mr. Batushansky is part of the company's strategy to enhance board composition and support its transformation plan aimed at driving shareholder value [2][3] - The board will consist of seven directors, six of whom are independent, with three new members added since 2024 [2] - Mr. Batushansky's experience in retail, pet, and healthcare sectors is expected to align with the company's ambitions to expand its business in the pet wellness ecosystem [3][4] Background of New Board Member - Mr. Batushansky has over 20 years of experience in various industries, including roles as CEO of Allivet and WebEyeCare [4][5] - Currently, he is a Partner at L2 Capital Partners, contributing to his extensive background in private equity [5][6] Company Overview - PetMed Express, founded in 1996, is a leader in the consumer pet healthcare sector, operating as a national online retailer [7] - The company offers a range of pet health products, including pharmaceuticals and supplements, through its websites [7]

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].

Financial Performance - Net sales for the third quarter were $53.0 million, a decrease from $65.3 million in the prior year period[10] - Gross margin rate improved to 28.1%, an increase of 80 basis points year-over-year[10] - Adjusted EBITDA reached $2.0 million, up from $0.9 million in the same quarter last year, reflecting a $1.1 million improvement[10] - The company reported a net loss of $0.7 million for the quarter, compared to a net loss of $2.0 million in the prior year[16] - For the three months ended December 31, 2024, the company reported a net loss of $707,000, a decrease of 65% compared to a net loss of $2,027,000 in the same period of 2023[27] - Adjusted EBITDA for the same period was $2,002,000, representing a 116% increase from $925,000 in the prior year[27] - For the nine months ended December 31, 2024, the company achieved a net income of $5,373,000, a significant improvement from a net loss of $2,448,000 in the same period of 2023[29] - Adjusted EBITDA for the nine months ended December 31, 2024, was $2,563,000, a decrease of 67% from $7,697,000 in the previous year[29] Expenses and Liabilities - General and administrative expenses were reduced by $2.6 million compared to the previous year[4] - Cash and cash equivalents at the end of the period were $50.1 million, down from $55.3 million at the beginning of the period[19] - Total current liabilities decreased to $47.96 million from $72.16 million year-over-year[13] - The company experienced a net cash used in operating activities of $2.29 million for the nine months ended December 31, 2024[19] - Stock-based compensation for the three months ended December 31, 2024, was $452,000, down 74% from $1,708,000 in the same period of 2023[27] - The company incurred employee severance costs of $209,000 for the three months ended December 31, 2024, with no such costs reported in the same period of 2023[27] Operational Focus and Future Outlook - The company is focused on driving differentiation and sustainable growth through operational excellence and financial discipline[4] - Future outlook includes continued progress on key initiatives supporting the transformation of the business[10] Adjusted EBITDA Considerations - The company noted that adjusted EBITDA should be considered supplemental to GAAP measures, highlighting its limitations in reflecting capital expenditure requirements and other non-operating expenses[25] - The company emphasized that adjusted EBITDA calculations may vary among companies in the industry, which affects comparability[24] Interest and Tax Expenses - Interest income for the three months ended December 31, 2024, was a net expense of $28,000, compared to a net expense of $136,000 in the same period of 2023, reflecting a 79% improvement[27] - The company reported a sales tax expense of $228,000 for the three months ended December 31, 2024, which was a 100% decrease from $228,000 in the same period of 2023[27]

Core Insights - PetMed Express, Inc. reported significant progress in its transformation journey, achieving $2 million in Adjusted EBITDA for the third quarter of fiscal 2025, a $1.1 million improvement year-over-year [3][7] - The company successfully reduced general and administrative expenses by $2.6 million compared to the previous year, indicating a focus on operational efficiency [3] - Net sales for the third quarter were $53.0 million, with a gross margin rate of 28.1%, reflecting an increase of 80 basis points from the prior year [7][12] Financial Performance - Adjusted EBITDA for the third quarter was $2.0 million, compared to $0.9 million in the prior year period, marking a 116% increase [7][22] - Net sales decreased from $65.3 million in the same quarter last year to $52.98 million this year, while cost of sales also decreased from $47.43 million to $38.08 million [12] - The company reported a net loss of $707,000 for the quarter, an improvement from a net loss of $2.03 million in the same quarter last year [12][22] Balance Sheet Highlights - As of December 31, 2024, total assets were $144.8 million, down from $169.9 million as of March 31, 2024 [10][11] - Current liabilities decreased significantly from $72.2 million to $48.0 million, indicating improved liquidity [10][11] - Shareholders' equity remained relatively stable at $96.2 million compared to $96.7 million in the previous period [11] Cash Flow Analysis - The company reported a net cash used in operating activities of $2.3 million for the nine months ended December 31, 2024, compared to $2.8 million for the same period last year [14] - Cash flows from investing activities showed a net cash outflow of $2.7 million, down from $39.4 million in the previous year, indicating a reduction in capital expenditures [14] - Cash and cash equivalents at the end of the period were $50.1 million, down from $55.3 million at the beginning of the period [15]

Core Viewpoint - PetMed Express, Inc. will hold a conference call on February 10, 2025, to discuss its financial results for the fiscal third quarter ended December 31, 2024 [1]. Group 1: Conference Call Details - The conference call is scheduled for February 10, 2025, at 4:30 PM Eastern Time [2]. - U.S. dial-in number for the call is 877-407-0789, and the international number is 201-689-8562 [2]. - A telephonic replay will be available after 7:30 PM Eastern Time on the same day through February 24, 2025 [2][3]. Group 2: Company Overview - PetMed Express, Inc. is a leader in the consumer pet healthcare sector, founded in 1996 [3]. - The company operates as a national online retailer, providing top branded pharmaceuticals, generics, compounded prescription medications, and OTC supplements and vitamins [3]. - PetMeds leverages telehealth and insurance partnerships to enhance wellness and longevity for pets, including dogs, cats, and horses [3].

Company Overview - PetMed Express, Inc. operates as a leader in the consumer pet healthcare sector, providing a range of pet health products through its online platforms PetMeds.com and PetCareRx.com [3] - The company was founded in 1996 and has established itself as a national online retailer with expert pharmacists and licenses across all fifty states [3] - PetMed Express offers top branded pharmaceuticals, generics, compounded prescription medications, and OTC supplements and vitamins aimed at enhancing the health and longevity of pets [3] Upcoming Events - PetMed Express will participate in the 27th Annual ICR Conference scheduled for January 13-15, 2025, in Orlando, Florida [1] - CEO Sandra Campos and CFO Robyn DâElia will present to investors on January 13, 2025, at approximately 11:00 a.m. Eastern Time [2] - A live webcast of the presentation will be accessible on the company's investor relations website [2]