Q4 2020 Earnings Call
Please standby the conference will begin in about one minute again. Please standby the conference will begin in about one minute. Thank you.
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Welcome.
So the Petmeds Express incorporated doing business is 100 Petmeds conference call to review the financial results for the fourth fiscal quarter in your ended on March 31st 2020.
So the company this conference call is being recorded.
Got it in 1990, 618 hundred Petmeds as America's largest pet pharmacy, delivering prescription in nonprescription pet medication and other health problem cats and horses stretch of the consumer.
Their pets that it gets its products through national advertising campaign, which direction consumers to order by phone or on the Internet.
Greece, the recognition of the Petmeds family of brands.
100, Petmeds provides an attractive alternative for obtaining pet medication in terms of convenience price ease of ordering and rapid home delivery at this time I would like to turn the call over to the company's Chief Financial Officer, Mr. Bruce Rosenblum.
Thank you I'd like to welcome everybody here today before I turn the call over two megawatt all our president Chief Executive Officer.
To remind everyone that the first portion of this conference call will be listening.
Until the question and answer session to be later in the cool.
Also certain information that will be included in this press conference May include forward looking statements within the meaning of the private Securities Litigation Reform Act as mentioned on the board or the Securities Exchange Commission.
Involve a number of risks and uncertainties. These statements are based on our beliefs as well assumptions. We have views based upon information currently available to us because these statements reflect our current views concerning future events. These statements may involve risks uncertainties assumptions actual future results may vary.
Difficultly based on number of doctors that may cause the actual results or then pretty materially different from future results performance or achievements expressed or implied by these statements.
Identified there's risk factors associated with it with our operations and our most recent annual report and other filings with Securities Exchange Commission now let me introduce today Speaker Mendo Akdag, President and Chief Executive Officer, a 100 Petmeds Linda. Thank you Bruce Good morning, welcome and thank you for.
Joining us.
First we hope you are doing well and staying safe and healthy during these challenging times.
Due to close 19, our consumer demand has been strong for ecommerce with Pandora shifting their purchases goal line.
Our sales have been positively impacted due to this increased demand combined with the start of our peak season.
As an essential business, we had been opened during our normal business, our without any material disruptions in our operations.
We are dedicated to making every effort to assure let's get the medications baby.
We have also taken measures dress shoes, Allfast Safety Award absolutely.
We have implemented working from home, where possible and house disinfection, all our workplace.
We have repeatedly been stressing to our employees the need for social discussing a proper hygiene practices at home at work.
We transition in person meeting stall line, we have adopted permitting I mean not employees on our premise.
Well, so far we have not seen any material disruptions in our supply chain.
But the situation as about food changing day by day, we're monitoring and managing it closely.
Now we will compare our fourth fiscal quarter. After all my story for 2022 last year's quarter ended on March 31st 2019.
For the fourth fiscal quarter ended on March 30 for 2020, our salesforce $74.3 million compared to sales rose $64.6 million for the same period the prior year.
An increase of 15%.
The increase in sales for the quarter was due to increases in reorder under order sales.
The average order value was approximately $90 for the quarter copious $85 for the same quarter as the prior year.
For the fourth fiscal quarter net income was several million dollars or 35 cents diluted per share.
To $6.6 billion or 32 cents diluted per share for the same quarter a year ago.
An increase to diluted earnings per share or 8.4 versa.
Reorder sales increased by 17% to $65.2 million for the quarter.
As to reorder sales were 55.5 million $55.9 million for the same quarter the prior year.
New order sales increased by 5% to $9.1 million for the quarter.
Is $8.7 million for the same period the last year.
We acquired approximately haagen Dazs 7000, new customers in our fourth fiscal quarter.
Relative to what I read about 1004, the same period the prior year.
The seasonality in our businesses due to the portion of fleet to kind of hardware medications at our product mix.
Bring us somewhere close to their peak season with full outlets are being door season.
For the fourth fiscal quarter, our gross profit as a percentage of sales was 29.2 Porsche compared to 32 point Walker shot for the same period a year ago.
The percentage decrease for the quarter can mainly be attributed to increases in product costs at additional discounts given to customers in response to increased online competition.
Our general and administrative expenses as a percent off sales was 8.6% for the quarter.
Appear to Liveperson for the same quarter as the prior year.
We were able to leverage the gionee with increased sales.
For the quarter, we spent about $6.2 million in advertising.
To $6.5 million for the same quarter a year ago.
The decrease for the quarter was primarily due to a reduction in television advertising.
Advertising costs or acquiring a customer for the quarter defined as total advertising expenses divided by total new customers acquired was approximately $58 compared to $65 for the same quarter over the prior year.
We had $103.8 million in cash cash equivalents $17.9 million in that one story with no debt as a wash story for 2020.
Net cash from operations for the fiscal year was $38.8 million compared to $45.1 million for the prior fiscal year.
The decrease was due to lower net income offset by decreases in their majorities and increases in accounts payable compared to the prior fiscal year.
Capital expenditures were approximately $2.3 million for the fiscal year.
This as the drive Asher you operator, we're ready to take questions.
Thank you we will now begin the question answer portion of today's conference call. If you would like to ask a question. Please UN mute your phone press star one and record your first and last name and state Your company to ask your question.
You would like to withdraw your question you May you start Chu please.
Please standby for our first question.
And first we have Aaron White from credit Credit Suisse. Your line is open.
Great. Thanks.
On the order me basket size customer profile other metrics that you track how sticky would you think that this kobe driven customer rates will be.
We we are assuming that it is gonna be same as well as has been historically.
So you don't anticipate that there was any outside stockpiling.
There could be that's a possibility.
And we had campaign is encouraging.
During a firewall.
We are we were also cross selling so probably about half on half so there could be some stockpiling.
Okay. All right. Thanks, and then have you seen any changes in the parasiticide ordering patterns, whether it's a process LTC our prescription product you anticipate a change in ordering patterns, maybe because your coal then or because of this means that season in general this year.
You could provide any sort of color that'd be great. Thanks.
I would say flea and tick sees a star, though a little earlier this year probably end of February beginning on March. So the weather was war worse that might have positively impacted those offers also.
Okay, Alright, thank you much Iraq.
Thank you Kevin Ellich East Research your line is open.
Good morning.
No new customer sales increased about 6%.
Your first time in about eight quarters.
You know clearly has earned pointed out maybe some stockpiling going on but do you think that's also signed at the competitive environment finally leveling off.
Up prices stabilize in the markets zero with manufacturers outsourcing lab policies. So we've been price competitive.
Probably helped out also demands for ecommerce as reported all today has been strong.
Okay. That's helpful. And then gross margin you made the comment about.
I think you've said there's stan.
Some some of the campaigns and also no increase in product cost do you expect gross margin will continue to ramp in fiscal 2001, especially as you have some new parents inside products online as using paragould feels now available on your website.
Just curious if you give us any color how it's been doing in the first few days are first few weeks as you've been offering it.
It did buys really all the product mix.
Or Tc sales that have been going out to lately.
So it's really what have you found all the product mix.
We will know in a couple of quarters, where the gross margins will on though.
Okay, and then I know this might be a tough one but.
With new customers sales increasing.
Any have you guys, taking a look isn't any specific geography, where you're seeing an increase or surgeon in sales and then what about customers that use wondering how your petmeds.
Three four years ago stopped and now are using any of those people come back.
Yeah, we're seeing several our Uh huh.
Customers that has not purchase from us in our while has been coming back we have seen that it's the big said seven space to sell at the top seven eight states has been strong but does not to I would not say visit material difference between states.
Got it and then lastly, it looks like.
Certainly we've seen increased had adoptions and motion offerings are pretty empty now. So just wondering how you think that's an effect you business going forward I mean, I would imagine that's going to be a positive for the industry and your business. Just wondering if you guys have noticed that as well.
It should be a positive for us so we'll see what happened.
Okay. Thank you have you made.
Thank you next Gen Anthony Lebiedzinski from Sidoti and company. Your line is open.
Yes. Good morning, Thank you for taking the questions. So a joined the call late.
The adjustments, but I would just just wanted to get a sense, maybe if you could give us a little bit more color as to sales acceleration that you saw I guess, if you could just step back and look at your business before the call with 19 up Megan Afterwards, if you can you just kind of give us a census as of magnitude of the changes.
Sales.
Right.
Increased demand for E commerce.
The auto our peak season of course siding.
Positively impacted our sales.
Got it okay.
So.
So just wondering if he gets more states a opening up their economies now I mean, how should we think about the impact on your business from the demand perspective, obviously during March and I guess.
This is big surge in demand.
Anything you Congress related business.
Yes.
Sorry.
Get back to normal.
Well, what kind of impact that we can foresee in your business.
Well, the but I was still a strong so far for E. Commerce. So we'll see what out but I was a lots of coffee opens up.
Got it okay and as far as your advertising strategy, how should we think about that as far as you know how aggressive do you want to be with.
Loading the brand a I know.
Youre getting some TV ads now I'm. So just just wanted to get a sense as to how should we think about the.
Advertising strategy, new customer acquisition costs that'd be very helpful. Thank you.
Oh, we'll be aggressive during peak season.
We're working on optimizing our marketing and our bunch of this flexible depending on the ROI.
As far as the demand is strong will be aggressive.
Got it right thinking on best of luck.
Thank you.
Thank you and again that is star one if you have a question on the phone.
And next we have Ben Rose from Battle Road Research Your line is open.
Yes, good good morning, and glad to hear everything is going well for Petmeds. Some couple of questions Firstly for.
Mendo I understand that this may have been the first quarter that you have rolled out your new E. Commerce platform and was just curious to know if there any comments you can make a relative to.
How the platform is helping the business.
We still have allowed rolled out a new platform actually due to the quote with 19, and we've got busy and that we postponed it at this time.
Okay is that an indefinite postponement or no it's not an indefinite but we like to.
We've got ways, we withdraw like doing as while we are very busy.
Sure sure.
Also wanted to ask a little bit more about you had mentioned monitoring the supply chain.
Just curious if that is just kind of a generic concern around.
Being able to be properly stocked by your medications suppliers or is there or are there any other potential issues there.
It's January because there aren't a this there are sometimes delays to the lead times by a week or two so taking that into a situation at this time, but it is a generic launch sir.
Okay, and then if I and then if I may has the current environment.
Necessitated a any additional fulfillment workers or have you essentially been working.
With your current staff through the crisis.
We did increase our staff that we are using some temporary employees on in the distribution center.
Okay.
Alright, Thank you very much you'll walk.
Thank you and there are no further questions in queue.
Thank you yeah fiscal 2000 to anyone that road continue focusing on optimizing our marketing and this more competitive environment being more efficient would our advertising spending. In addition, there will continue investing at our ecommerce platform to better service our customers. This wraps up todays call.
This call. Thank you for joining us operator disaster conference call.
Thank you for participating you may now disconnect.
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