PetMeds® Investor Relations


Welcome:

To My Fellow Stockholders:

1-800-PetMeds continued to provide solid profitability for our stockholders in the fiscal year ended March 31, 2010, which was highlighted by the growth of our internet sales and net income. Net income increased to $26.0 million in fiscal 2010, or $1.14 diluted earnings per share, compared to $23.0 million, or $0.98 diluted earnings per share in fiscal 2009, an increase to earnings per share of 17%. Net sales for fiscal 2010 were $238.3 million compared to $219.4 million for fiscal 2009, an increase of 9%. Our continued strong financial performance can be attributed to reorder growth, and success in leveraging our operating expenses. Our reorder sales increased 13%, from $156.9 million to $177.8 million in fiscal years 2009 and 2010, respectively, and our operating expenses as a percent of sales improved 176 basis points for the fiscal year ended March 31, 2010, compared to the prior fiscal year.

Our internet sales increased to $162.8 million in fiscal 2010, compared to $143.3 million in fiscal 2009, with approximately 68% of all orders placed on our website at www.petmeds.com during the fiscal year. As in years past, we acquired more new customers during fiscal year 2010 as compared to the prior fiscal year, approximately 815,000 compared to 802,000. In August 2009, the Company announced its first ever quarterly dividend, and has paid approximately $6.8 million in the last three fiscal quarters, illustrating our commitment to returning capital to our shareholders.

1-800-PetMeds is America’s Largest Pet Pharmacy and continues to be the most recognized national brand in the pet industry as a result of our investment of approximately $183 million in advertising since fiscal 2001. This advertising investment has helped us increase our sales from $10.0 million in fiscal 2001 to $238.3 million in fiscal 2010. We continue to offer a broad selection of products, both over-the-counter and prescription, for dogs, cats, and horses at affordable prices. Our customers can enjoy either the convenience of ordering over the telephone with 1-800-PetMeds’ exceptional customer service or on the web at our highly-rated web site www.petmeds.com.

 
According to the American Pet Products Manufacturers Association, spending on pets in the U.S. increased by 5.3% and reached $45.5 billion in 2009, and the pet medication market that we participate in is estimated to be approximately $3.7 billion. There is a continuing increase in pet-related spending, a higher awareness of pet health, and the continued humanization of pets, integrating them into all aspects of our lives. In fiscal 2011 our focus will be on conversion optimization, and the expansion of our product line to offer more products that help improve the quality of pet’s lives.

We remain thankful to our loyal customers, dedicated employees, and, you, our stockholders, for your ongoing support of 1-800-PetMeds.

Sincerely,



Menderes Akdag
President, Chief Executive Officer, Director
June 18, 2010

PetMed Express, Inc., d/b/a 1-800-PetMeds

1800PetMeds®

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