Petmed Express Inc (PETS) 2020 Q4 法說會逐字稿

Welcome to the PetMed Express, Inc, doing business as 1-800-PetMeds, conference call to review the financial results for the fourth fiscal quarter and fiscal year ended on March 31, 2021.

歡迎來到 PetMed Express, Inc，作為 1-800-PetMeds 開展業務，召開電話會議，審查截至 2021 年 3 月 31 日的第四財季和財年的財務業績。

At the request of the company, this conference call is being recorded. Founded in 1996, 1-800-PetMeds is America's most trusted pet pharmacy, delivering prescription and nonprescription pet medications and other health products for dogs, cats and horses direct to the consumer. 1-800-PetMeds markets its products through national advertising campaigns, which direct consumers to order by phone or on the Internet and aim to increase the recognition of the PetMed's family of brand names. 1-800-PetMeds provides an attractive alternative for obtaining pet medications in terms of convenience, price, ease of ordering and a rapid home delivery.

應公司要求，對此次電話會議進行錄音。 1-800-PetMeds 成立於 1996 年，是美國最值得信賴的寵物藥房，直接向消費者提供狗、貓和馬的處方藥和非處方藥以及其他保健產品。 1-800-PetMeds 通過全國廣告活動推銷其產品，引導消費者通過電話或互聯網訂購，旨在提高 PetMed 品牌系列的知名度。 1-800-PetMeds 在便利性、價格、易於訂購和快速送貨上門方面為獲得寵物藥物提供了一個有吸引力的替代方案。

At this time, I would like to turn the call over to the company's Chief Financial Officer, Mr. Bruce Rosenbloom.

此時，我想將電話轉給公司的首席財務官 Bruce Rosenbloom 先生。

Thank you. I would like to welcome everybody here today. Before I turn the call over to Mendo Akdag, our President and Chief Executive Officer, I'd like to remind everyone that the first portion of this conference call will be listen-only until the question-and-answer session, which will be later in the call.

謝謝。我想歡迎大家今天來到這裡。在我將電話轉給我們的總裁兼首席執行官 Mendo Akdag 之前，我想提醒大家，本次電話會議的第一部分將是只聽，直到問答環節，這將在稍後進行在通話中。

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 of 1995 or the Securities and Exchange Commission that may involve a number of risks and uncertainties. These statements are based on our beliefs as well as assumptions we have used based upon information currently available to us. Because these statements reflect our current views concerning future events, these statements involve risks, uncertainties and assumptions. Actual future results may vary significantly based on a number of factors that may cause the actual results or events to be materially different from future results, performance or achievements expressed or implied by these statements. We have identified various risk factors associated with our operations in our most recent annual report and other filings with the Securities and Exchange Commission.

此外，本次新聞發布會中將包含的某些信息可能包括 1995 年《私人證券訴訟改革法案》或證券交易委員會定義的前瞻性陳述，這些陳述可能涉及許多風險和不確定性。這些陳述是基於我們的信念以及我們根據目前可用的信息所使用的假設。由於這些陳述反映了我們目前對未來事件的看法，因此這些陳述涉及風險、不確定性和假設。實際的未來結果可能會因多種因素而有很大差異，這些因素可能導致實際結果或事件與這些陳述明示或暗示的未來結果、業績或成就存在重大差異。我們在最近的年度報告和提交給美國證券交易委員會的其他文件中確定了與我們的運營相關的各種風險因素。

Now let me introduce today's speaker, Mendo Akdag, President and Chief Executive Officer of 1-800-PetMeds. Mendo?

現在讓我介紹今天的演講者，Mendo Akdag，他是 1-800-PetMeds 的總裁兼首席執行官。門多？

Thank you, Bruce. Welcome, and thank you for joining us. Today, we will review the highlights of our financial results. We'll compare our fourth fiscal quarter and fiscal year ended on March 31, 2021, to last year's quarter and fiscal year ended on March 31, 2020.

謝謝你，布魯斯。歡迎，並感謝您加入我們。今天，我們將回顧我們財務業績的亮點。我們將比較截至 2021 年 3 月 31 日的第四財季和財年與截至 2020 年 3 月 31 日的上一季度和財年。

For the fourth fiscal quarter ended on March 31, 2021, our sales were $71.7 million compared to sales of $74.3 million for the same period the prior year, a decrease of 3.5%. For the fiscal year ended on March 31, 2021, sales were $309.2 million compared to $284.1 million for the prior fiscal year, an increase of 8.8%. The sales for the quarter might have been negatively impacted by colder weather, and the demand was poor from the last year due to the pandemic.

截至 2021 年 3 月 31 日的第四財季，我們的銷售額為 7170 萬美元，而去年同期為 7430 萬美元，下降 3.5%。截至 2021 年 3 月 31 日的財政年度，銷售額為 3.092 億美元，而上一財政年度為 2.841 億美元，增長 8.8%。本季度的銷售可能受到寒冷天氣的負面影響，而且由於大流行，需求比去年差。

The average order value was approximately $93 for the quarter compared to $90 for the same quarter the prior year. For the fourth fiscal quarter, net income was $6.8 million or $0.34 diluted per share compared to $7 million or $0.35 diluted per share for the same quarter the prior year, a decrease to net income of 2.7%. For the fiscal year, net income was $30.6 million or $1.52 diluted per share compared to $25.9 million or $1.29 diluted per share a year ago, an increase to net income of 18.4%.

本季度的平均訂單價值約為 93 美元，而去年同期為 90 美元。第四財季淨收益為 680 萬美元或每股攤薄收益 0.34 美元，而去年同期為 700 萬美元或每股攤薄收益 0.35 美元，淨收益下降 2.7%。本財年，淨收入為 3060 萬美元或每股攤薄收益 1.52 美元，而一年前為 2590 萬美元或每股攤薄收益 1.29 美元，淨收入增長 18.4%。

Reorder sales decreased by 1.4% to $64.2 million for the quarter compared to reorder sales of $65.2 million for the same quarter the prior year. For the fiscal year, reorder sales increased by 9.7% to $272.6 billion compared to $248.6 million for the last year.

本季度再訂購銷售額下降 1.4% 至 6420 萬美元，而去年同期為 6520 萬美元。本財年，再訂單銷售額增長 9.7% 至 2726 億美元，而去年為 2.486 億美元。

New order sales decreased by 18% to $7.5 million for the quarter compared to $9.1 million for the same period the prior year. For the fiscal year, new order sales increased by 2.8% to $36.6 million compared to $35.6 million for the last year.

本季度新訂單銷售額下降 18% 至 750 萬美元，而去年同期為 910 萬美元。本財年，新訂單銷售額增長 2.8% 至 3660 萬美元，而去年為 3560 萬美元。

We acquired approximately 88,000 new customers in our fourth fiscal quarter compared to 107,000 for the same period the prior year, and we acquired approximately 443,000 new customers in the fiscal year compared to 421,000 for the last year. The seasonality in our businesses is due to the proportion of flea, tick and heartworm medications in our product mix. Spring and summer are considered peak seasons, with fall and winter being off-season.

我們在第四財季獲得了約 88,000 名新客戶，而去年同期為 107,000 名，我們在本財年獲得了約 443,000 名新客戶，而去年同期為 421,000 名。我們業務的季節性是由於跳蚤、蜱蟲和心絲蟲藥物在我們的產品組合中所佔的比例。春季和夏季被認為是旺季，秋季和冬季是淡季。

For the fourth fiscal quarter, our gross profit as a percent of sales was 28.6% compared to 29.2% for the same period a year ago. For the fiscal year, our gross profit as a percent of sales was 29.1% compared to 28.6% for the prior year. The percentage decrease for the quarter can be attributed to some of our vendors shifting their funding from discounting product costs to co-op marketing.

對於第四財季，我們的毛利潤佔銷售額的百分比為 28.6%，而去年同期為 29.2%。在本財年，我們的毛利潤佔銷售額的百分比為 29.1%，而上一年為 28.6%。本季度的百分比下降可歸因於我們的一些供應商將他們的資金從折扣產品成本轉移到合作營銷。

Our general and administrative expenses increased to $830,000 for the quarter, mainly due to increases in payroll, including stock-based compensation and IT expenses related to our new website platform. For the quarter, our advertising expenses were about $4.3 million compared to $6.2 million for the same quarter the prior year. For the fiscal year, it was $21.6 million compared to $22.7 million for the last fiscal year. Advertising spending increased over the prior year, yet total net advertising expenses decreased due to increased co-op marketing rebates. Advertising cost of acquiring a customer for the quarter, defined as total advertising expenses divided by total new customers acquired, was approximately $49 compared to $58 for the same quarter the prior year. And for the fiscal year, it was $49 compared to $54 for the last fiscal year.

本季度我們的一般和行政費用增加到 830,000 美元，這主要是由於工資增加，包括基於股票的補償和與我們新網站平台相關的 IT 費用。本季度，我們的廣告費用約為 430 萬美元，而去年同期為 620 萬美元。本財年為 2160 萬美元，而上一財年為 2270 萬美元。廣告支出比上一年有所增加，但由於合作營銷回扣增加，淨廣告支出總額有所下降。本季度獲得客戶的廣告成本（定義為總廣告費用除以獲得的新客戶總數）約為 49 美元，而去年同期為 58 美元。本財年為 49 美元，而上一財年為 54 美元。

We had $118.7 million in cash and cash equivalents and $34.4 million in inventory, with no debt as of March 31, 2021. Net cash from operations for the fiscal year was $40.1 million compared to $38.8 million for the prior fiscal year. Inventory was higher due to increases in lead times, and it was more than offset by increases in payables. Capital expenditures were approximately $2.4 million for the fiscal year.

截至 2021 年 3 月 31 日，我們擁有 1.187 億美元的現金和現金等價物以及 3440 萬美元的存貨，沒有債務。本財年的運營現金淨額為 4010 萬美元，而上一財年為 3880 萬美元。由於交貨時間的增加，庫存增加，但被應付賬款的增加所抵消。本財政年度的資本支出約為 240 萬美元。

This end the financial review. Operator, we're ready to take questions.

財務審查到此結束。接線員，我們準備好接受提問了。

(Operator Instructions) Our first question comes from Erin Wright with Crédit Suisse.

（操作員說明）我們的第一個問題來自 Crédit Suisse 的 Erin Wright。

First, can you speak to those factors that you were mentioning that were impacting the gross margin in the quarter? And how should we be thinking about that from a quarterly progression standpoint on the gross margin front? And also just longer term, can you help us frame the margin profile of your business? And what are some of the factors we should be considering longer term?

首先，您能否談談您提到的那些影響本季度毛利率的因素？我們應該如何從毛利率方面的季度進展角度考慮這一點？而且從長遠來看，您能幫助我們構建您業務的利潤率嗎？從長遠來看，我們應該考慮哪些因素？

[Rather] shifted funding to co-op marketing in lieu of discounting products, this negatively impacted gross margins for the quarter while positively impacting advertising expenses by reducing them. We anticipate this trend is going to continue. So I suggest you look at it at the operating income -- operating margin level instead of just gross margin.

[而是] 將資金轉移到合作營銷而不是打折產品，這對本季度的毛利率產生了負面影響，同時通過減少廣告費用對廣告費用產生了積極影響。我們預計這種趨勢將繼續下去。所以我建議你看看營業收入——營業利潤率水平，而不僅僅是毛利率。

Okay. That's helpful. And then just a bigger picture question on the broader shift to online pet spending as well as the greater pet ownership trends that we saw over the course of the pandemic, I guess how should we be thinking about the stickiness of that customer base? What are you seeing now as we lap some of that?

好的。這很有幫助。然後是關於更廣泛地轉向在線寵物消費以及我們在大流行期間看到的更大的寵物擁有趨勢的更大問題，我想我們應該如何考慮該客戶群的粘性？當我們把其中的一些圈起來時，你現在看到了什麼？

The peak last year was the month of April, and it looks like the peak this year is going to be the month of May. The weather was warmer last year in the March quarter compared to this year. And also demand was possibly pulled forward last year due to the pandemic. So we'll see what happens. Consumer behavior for this pandemic is somewhat difficult to predict.

去年的高峰是四月，今年的高峰似乎是五月。與今年相比，去年三月季度的天氣更暖和。去年由於大流行，需求也可能被拉高。所以我們將看看會發生什麼。這種流行病的消費者行為有點難以預測。

Our next question comes from Anthony Lebiedzinski with Sidoti.

我們的下一個問題來自 Anthony Lebiedzinski 和 Sidoti。

So just want to ask if any way for you guys to possibly quantify the impact of the colder weather, what that was? I know especially Texas and Midwest got hit pretty hard in February. So just wondering if you could take a stab at just trying to give us a sense as to the magnitude of the weather impact, maybe what it was, you think?

所以只想問問你們是否有任何方法可以量化寒冷天氣的影響，那是什麼？我知道得克薩斯州和中西部地區在 2 月份受到的打擊尤其嚴重。所以只是想知道你是否可以試著讓我們了解一下天氣影響的程度，也許它是什麼，你認為？

Yes. February was much colder for sure. It's really difficult, I mean it gets into to make some assumptions to do that. We are not going to do that at this time.

是的。二月肯定要冷得多。這真的很困難，我的意思是要做出一些假設才能做到這一點。我們現在不打算這樣做。

Okay. I know it's tough but I figure I would ask it anyway. But the -- okay. And then you talked in the release about -- and this is something you said before, but I just wanted to see if you guys could expand on what you're looking at as far as fiscal '22 plans with respect to exploring alternative ways of acquiring new customers and adding value-added services? Can you give us an update on that? And also, as far as your e-commerce platform, what else -- what have you done and what needs to still be done to get that fully finalized?

好的。我知道這很難，但我想我還是會問的。但是 - 好吧。然後你在新聞稿中談到了——這是你之前說過的話，但我只是想看看你們是否可以就探索替代方式的財政 '22 計劃擴展你們正在研究的內容獲取新客戶和增加增值服務？你能告訴我們最新情況嗎？而且，就您的電子商務平台而言，還有什麼 - 您做了什麼以及還需要做什麼才能完全完成？

We are still in process of exploring for new revenue sources and new opportunities within pet health and wellness and alternative ways of acquiring new customers, so we'll give you more information later part of the year. Our website and app redesign is continuing. It's going to be about June, July before we complete it. It never really gets completed, but at least the vast majority of it will be completed. And we'll do some A/B testing to further improve it.

我們仍在探索寵物健康和保健領域的新收入來源和新機會以及獲取新客戶的其他方式，因此我們將在今年晚些時候為您提供更多信息。我們的網站和應用程序重新設計仍在繼續。在我們完成它之前大約需要 6 月、7 月。它永遠不會真正完成，但至少會完成絕大部分。我們將進行一些 A/B 測試以進一步改進它。

(Operator Instructions) Our next question comes from Ben Rose with Battle Road Research.

（操作員說明）我們的下一個問題來自 Battle Road Research 的 Ben Rose。

Some questions, Mendo, around the Ask a Vet feature that, I guess, in the last several months you've been more prominently featuring on the website. Was curious to know if you could speak either quantitatively or qualitatively about the number of sessions that you may be having with customers and just your thoughts about this particular feature and potentially expanding its use over the next fiscal year?

一些問題，Mendo，圍繞“問獸醫”功能，我猜，在過去的幾個月裡，你在網站上的表現更加突出。很想知道您是否可以定量或定性地談論您可能與客戶進行的會議次數，以及您對這一特定功能的看法以及可能在下一個財政年度擴大其使用範圍？

Of course, I will talk qualitatively that the usage has been increasing. And it's going to be more prominent once we complete redesign. We are redesigning the education section of our website. So that has not been completed yet. So it will be more prominent also on the app. It is going to be more prominent. So it should be helping with -- helping the consumer and also may help with acquiring customers.

當然，我會定性地說，使用量一直在增加。一旦我們完成重新設計，它將更加突出。我們正在重新設計我們網站的教育部分。所以這還沒有完成。因此它在應用程序上也會更加突出。它將更加突出。所以它應該幫助——幫助消費者，也可能幫助獲得客戶。

Okay. And then either for you or Bruce, it looks like the inventory additions this year for the seasonally strongest June quarter were not quite as strong as they were -- were not quite as much as they were last year. Could you speak to the health of the supply chain and your ability to get the kind of medications that you need to fulfill customer orders?

好的。然後，無論是對你還是 Bruce，看起來今年季節性最強的 6 月季度的庫存增加並不像去年那麼強勁——並不像去年那麼多。您能否談談供應鏈的健康狀況以及您獲得滿足客戶訂單所需藥物的能力？

As far as inventory balances, our inventory balance was actually higher this year compared to last year. We really didn't see any significant issues in our major lines, major brands. We did note that there was some possible lead time issues on some of the smaller brands, but nothing material to the overall supply chain.

至於庫存餘額，我們今年的庫存餘額實際上比去年高。我們真的沒有在我們的主要產品線、主要品牌中看到任何重大問題。我們確實注意到一些較小品牌可能存在一些交貨時間問題，但對整個供應鏈來說沒有任何實質性影響。

And at this time, we have no further questions on the audio line. I'll hand it back to the speakers.

目前，我們對音頻線路沒有進一步的疑問。我會把它交還給揚聲器。

Thank you. In fiscal 2022, we will be exploring alternative ways of acquiring customers and adding value-added services. We'll continue investing in our e-commerce platform and mobile app to better service our customers.

謝謝。在 2022 財年，我們將探索獲取客戶和增加增值服務的替代方式。我們將繼續投資我們的電子商務平台和移動應用程序，以更好地服務我們的客戶。

This wraps up today's conference call. Thank you for joining us.

今天的電話會議到此結束。感謝您加入我們。

Operator, this ends the conference call. Thank you.

話務員，電話會議到此結束。謝謝。

That concludes today's conference. Thank you for participating. You may disconnect at this time.

今天的會議到此結束。感謝您的參與。此時您可以斷開連接。