Petmed Express Inc (PETS) 2022 Q4 法說會逐字稿

Good afternoon, everyone, and thank you for joining the PetMed Express third quarter earnings conference call. My name is Doug, the operator for today's call.

大家下午好，感謝您參加 PetMed Express 第三季度收益電話會議。我叫道格，是今天電話的接線員。

I would now like to pass the conference over to our host, Mr. Brian Prenoveau, Investor Relations. Sir, the floor is now yours.

我現在想將會議轉交給我們的主持人，投資者關係部的 Brian Prenoveau 先生。主席先生，現在該發言了。

Thank you, operator, and I'd like to welcome everybody to the PetMed Express Fiscal Fourth Quarter Earnings Call. (Operator Instructions) Also, certain information that will be included during this call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934 as amended 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.

謝謝接線員，歡迎大家參加 PetMed Express 第四財季財報電話會議。 （操作員說明）此外，本次電話會議中將包含的某些信息可能包括 1995 年《私人證券訴訟改革法》和 1934 年《證券交易法》修訂版含義內的前瞻性陳述，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。

Because these statements reflect our current views concerning future events, these statements involve risks, uncertainties and assumptions. Actual results could differ materially from those projected. There can be no assurance that any forward-looking results will occur or be realized. And nothing contained in this presentation is or should be relied upon as a representation or warranty as to any future matter, including any matter in respect to the operations or business or financial condition of PetMeds.

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。實際結果可能與預期結果存在重大差異。無法保證任何前瞻性結果將會發生或實現。本演示文稿中的任何內容均不得或不應作為對任何未來事項的陳述或保證，包括與 PetMeds 的運營或業務或財務狀況有關的任何事項。

PetMeds undertakes no obligation to update publicly these forward-looking statements based on subsequent events, except as may be required by applicable law, regulation or other competent legal authority. 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.

PetMeds 不承擔根據後續事件公開更新這些前瞻性陳述的義務，適用法律、法規或其他主管法律機構可能要求的除外。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。

Also, during the course of today's call, the company will be discussing 1 or more non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in the press release we issued this afternoon.

此外，在今天的電話會議期間，公司將討論一項或多項非 GAAP 財務指標。我們今天下午發布的新聞稿中包含這些非 GAAP 財務指標與最直接可比的 GAAP 指標的調節。

Now let me introduce our CEO and President, Matt Hulett. Matt?

現在讓我介紹一下我們的首席執行官兼總裁 Matt Hulett。馬特？

Thank you, Brian. Thank you for making the time today to participate in our earnings call. We will be walking you through the following components in today's earnings call: one, reflections in the last 12 months; two, an update on our strategic road map, including our recent acquisition of PetCareRx; and three, a detailed review of our quarterly financial results.

謝謝你，布萊恩。感謝您今天抽出時間參加我們的財報電話會議。在今天的財報電話會議上，我們將帶您了解以下內容：第一，過去 12 個月的反思；第二，更新我們的戰略路線圖，包括我們最近對 PetCareRx 的收購；第三，詳細審查我們的季度財務業績。

For anyone new to the PetMed Express company and story, PetMeds is a company that delivers prescription and nonprescription medications, food, supplements and supply and provides access to vet services and pet insurance direct to the consumer.

對於任何剛接觸 PetMed Express 公司和故事的人來說，PetMeds 是一家提供處方藥和非處方藥、食品、補充劑和用品並直接向消費者提供獸醫服務和寵物保險的公司。

Our expert online pharmacy is an established and trusted brand, as evidenced by the fact that we have served over 11 million pet parents over our company's 26-year operating history. We have a loyal customer base of pet parents that value our brand, service and quality. Our goal is to be the market leader in pet wellness and health care or as we like to say, be the trusted pet health experts because we believe every pet deserves to live a long, happy, healthy life.

我們的專業在線藥店是一個成熟且值得信賴的品牌，在我們公司 26 年的運營歷史中，我們已經為超過 1100 萬寵物父母提供服務，這一事實證明了這一點。我們擁有忠實的寵物父母客戶群，他們重視我們的品牌、服務和質量。我們的目標是成為寵物健康和保健領域的市場領導者，或者正如我們喜歡說的那樣，成為值得信賴的寵物健康專家，因為我們相信每隻寵物都應該過上長壽、快樂、健康的生活。

As we mentioned on previous earnings calls, PetMed is in a rebuilding mode. We have reconstituted the company with an updated strategy, a new and experienced management team and a revised overall approach to the market. We've accomplished a great deal over the course of the past year. And most recently, completed the acquisition of PetCareRx.

正如我們在之前的財報電話會議上提到的，PetMed 正處於重建模式。我們用更新的戰略、經驗豐富的新管理團隊和修訂後的市場整體方法對公司進行了重組。在過去的一年裡，我們取得了很多成就。最近，完成了對 PetCareRx 的收購。

This acquisition represents the first in the company's history, and we believe it will be transformative. The acquisition immediately provides notable benefit including an increase to our top line, but more importantly, it brings a significant opportunity to expand the PetMeds product catalog. We now have the distribution capabilities in place, to provide enhanced products and offerings to existing and new customers and to further grow our sales.

此次收購是公司歷史上的第一次，我們相信它將具有變革性。此次收購立即帶來了顯著的好處，包括增加我們的收入，但更重要的是，它帶來了擴大 PetMeds 產品目錄的重要機會。我們現在擁有適當的分銷能力，可以為現有和新客戶提供增強的產品和服務，並進一步增加我們的銷售額。

During fiscal 2023, we expanded our capabilities in telemedicine through the strategic investment investor in April 2022 and in pet insurance with our investment in Pumpkin Insurance earlier this year. We believe we now have the foundation of a complete pet wellness brand that covers your pet from nose to tail.

在 2023 財年，我們通過 2022 年 4 月的戰略投資投資者擴大了我們在遠程醫療方面的能力，並在今年早些時候通過投資 Pumpkin Insurance 擴大了我們在寵物保險方面的能力。我們相信我們現在擁有一個完整的寵物健康品牌的基礎，從鼻子到尾巴覆蓋您的寵物。

As with most transformations, it has required some investment to drive change and has resulted in some challenges that we had to overcome, but these have only made us stronger. I will provide an overview of our annual results and then our CFO, Christine Chambers, will go into greater depth later in the presentation on our quarterly financial performance.

與大多數轉型一樣，它需要一些投資來推動變革，並帶來了一些我們必須克服的挑戰，但這些只會讓我們變得更強大。我將概述我們的年度業績，然後我們的首席財務官 Christine Chambers 稍後將在介紹我們的季度財務業績時更深入地介紹。

Fiscal year 2023 sales were $257 million compared to sales of $273 million in the prior year, equating to a decrease of 6%. This compared to a 12% decline in fiscal 2022 compared to fiscal 2021. The rate of sales decline decreased as we began to realize a stabilization of the business over the course of the year.

2023 財年銷售額為 2.57 億美元，上年銷售額為 2.73 億美元，下降 6%。相比之下，2022 財年與 2021 財年相比下降了 12%。隨著我們開始意識到業務在這一年中的穩定，銷售額下降的速度有所下降。

Now that the acquisition of PetCareRx has closed, heading into fiscal year 2024, we anticipate further stabilization of our core business and profitable growth from the acquisition. The integration of the new catalog, which we expect to be implemented over the next several quarters will help fuel growth into the coming years.

既然對 PetCareRx 的收購已經結束，進入 2024 財年，我們預計我們的核心業務將進一步穩定並從收購中實現利潤增長。我們預計將在未來幾個季度實施的新目錄的整合將有助於推動未來幾年的增長。

I want to bring up a few fourth quarter highlights before discussing more big picture items. As has been our focus this year, we were pleased to see continued growth in new customers. Our new customer count for the quarter was approximately $72,000, representing a 12% increase year-over-year. This is the second quarter in a row where we have seen net new customer growth, breaking the downward trend since Q1 of 2021.

在討論更多大局項目之前，我想提出一些第四季度的亮點。正如我們今年的重點一樣，我們很高興看到新客戶的持續增長。我們本季度的新客戶數量約為 72,000 美元，同比增長 12%。這是我們連續第二個季度實現新客戶淨增長，打破了自 2021 年第一季度以來的下降趨勢。

Our customer acquisition efficacy metrics were in line with our expectations as well. Our LTV to CAC for the quarter was 1.9%. We saw continued improvements in the recurring revenue side of our business as well. Our AutoShip & Save program continues to expand as 44% of our revenue was derived from our AutoShip subscription program during the fourth quarter, an increase from 31% at this time last year.

我們的客戶獲取效率指標也符合我們的預期。本季度我們對 CAC 的 LTV 為 1.9%。我們也看到了我們業務的經常性收入方面的持續改善。我們的 AutoShip & Save 計劃繼續擴大，因為我們 44% 的收入來自第四季度的 AutoShip 訂閱計劃，高於去年同期的 31%。

While we saw many positive trends in the business this past year, we still have work to do. Returning sales declined 6% year-over-year, driven by declines in over-the-counter medication and partially offset by year-over-year growth in food and other consumables. The OTC product category experienced aggressive competitor price discounting across online and off-line retailers. We will address this in more detail later on the call.

雖然我們在過去的一年中看到了許多積極的業務趨勢，但我們仍有工作要做。退貨銷售額同比下降 6%，原因是非處方藥下降，部分被食品和其他消耗品的同比增長所抵消。 OTC 產品類別在線上和線下零售商之間經歷了激烈的競爭對手價格折扣。我們將在稍後的電話會議上更詳細地解決這個問題。

Turning to Slide 5. As I mentioned, the vision of our company is to provide total wellness from nose to tail. The acquisition of PetCareRx provides significant additional capabilities with pet medication and nutrition. PetCareRx will add thousands of additional products to the existing PetMeds catalog, providing more expansive choices to our pet parents.

轉到幻燈片 5。正如我提到的，我們公司的願景是提供從鼻子到尾巴的全面健康。對 PetCareRx 的收購為寵物藥物和營養提供了重要的附加功能。 PetCareRx 將向現有的 PetMeds 目錄添加數千種額外產品，為我們的寵物父母提供更廣泛的選擇。

One big reason we believe we can execute and leverage this product expansion is due to our expertise in distribution and shipping, and we can do so with minimal additional capital requirements. In other words, we believe we can maintain, if not improve, the same level of order efficiency and customer satisfaction utilizing our existing infrastructure while realizing a significant expansion in product offering. We believe telemedicine and insurance are important components of total wellness and long-term opportunities that track, albeit somewhat behind human adoption of these same services.

我們相信我們能夠執行和利用這一產品擴展的一個重要原因是我們在分銷和運輸方面的專業知識，而且我們可以以最少的額外資本要求做到這一點。換句話說，我們相信我們可以利用我們現有的基礎設施保持（如果不能提高）相同水平的訂單效率和客戶滿意度，同時實現產品供應的顯著擴展。我們認為遠程醫療和保險是全面健康和長期機會的重要組成部分，儘管在某種程度上落後於人類對這些相同服務的採用。

Given the overall size of the market opportunity, we believe currently, these services are vastly underutilized and have the potential for amazing growth over the long term. While we don't anticipate Vetster or our partnership with Pumpkin to deliver significant revenue in the next 12 months, we do believe these are foundational investments as we look out over the next 3 to 5 years.

考慮到市場機會的總體規模，我們認為目前這些服務還沒有得到充分利用，並且有可能在長期內實現驚人的增長。雖然我們預計 Vetster 或我們與 Pumpkin 的合作夥伴關係不會在未來 12 個月內帶來可觀的收入，但我們確實相信這些是我們未來 3 到 5 年的基礎投資。

We've mentioned the upside of PetCareRx, but I want to spend some time talking about the people and processes behind the integration. Employees from both sides have been rapidly coming together as a team. I'm happy to report that we are integrating teams extremely well, and we've confirmed that there is a lot of operating synergy across both businesses.

我們已經提到了 PetCareRx 的優勢，但我想花點時間談談集成背後的人員和流程。雙方的員工迅速團結在一起。我很高興地報告我們正在非常好地整合團隊，並且我們已經確認兩個業務之間存在很多運營協同效應。

PetCareRx and PetMeds will continue to operate as separate brands. However, we are integrating our operations so that we are well coordinated on critical areas related to demand generation, distribution and shipping and supplier negotiations.

PetCareRx 和 PetMeds 將繼續作為獨立品牌運營。然而，我們正在整合我們的業務，以便我們在與需求生成、分銷和運輸以及供應商談判相關的關鍵領域得到很好的協調。

As we have discussed, the rationale for this acquisition was to expand the PetMeds addressable market while providing immediate upside. Instead of providing just a slither of our customers' needs via the pet medication space, PetMeds will be delivering on what we call a full nose-to-tail solution for our customers that includes medication, specialty diet and food products, vet services and new wellness services. Additionally, we are excited about having distribution and fulfillment capacity along the Eastern seaboard of the United States as we will now be able to access the efficient distribution capacity for larger format products.

正如我們所討論的，此次收購的理由是擴大 PetMeds 的潛在市場，同時提供直接的上漲空間。 PetMeds 將不再通過寵物藥物領域僅僅滿足客戶的一小部分需求，而是為我們的客戶提供我們稱之為“從頭到尾”的完整解決方案，其中包括藥物、特殊飲食和食品、獸醫服務和新的健康服務。此外，我們很高興在美國東海岸擁有分銷和履行能力，因為我們現在將能夠獲得更大規格產品的高效分銷能力。

Finally, the acquisition provides the opportunity to gain more wallet share from pet consumers, resulting in high lifetime value. PetMeds has historically only serviced a small portion of our customers' overall needs for their pet. Medication is purchased on a less frequent basis than pet food. With the acquisition of PetCareRx, PedMeds will be offering and selling more products on a more regular basis to customers.

最後，此次收購提供了從寵物消費者那裡獲得更多錢包份額的機會，從而帶來高終生價值。 PetMeds 歷來只滿足客戶對其寵物的總體需求的一小部分。購買藥物的頻率低於寵物食品。通過收購 PetCareRx，PedMeds 將更定期地向客戶提供和銷售更多產品。

As we just discussed, the basket of new assets and capabilities through our acquisitions and partnerships provide more opportunities for PetMeds to grow and expand. PetMeds is now able to service and address a broader addressable market across the pet wellness space.

正如我們剛剛討論的那樣，通過我們的收購和合作夥伴關係獲得的一攬子新資產和能力為 PetMeds 提供了更多的發展和擴張機會。 PetMeds 現在能夠服務和解決寵物健康領域更廣泛的潛在市場。

With our investments in Vet Care, broader product selection and insurance, there has never been a greater opportunity for us to expand our relationship with our existing customers and attract new customers. Over time, we expect our revenues to be more diversified as we address a broader range of our pet parents need.

通過我們在 Vet Care 方面的投資、更廣泛的產品選擇和保險，我們有前所未有的機會來擴大與現有客戶的關係並吸引新客戶。隨著時間的推移，我們預計我們的收入會更加多元化，因為我們會滿足更廣泛的寵物父母需求。

Today, PetMeds participates in the medication market, which is approximately a $13 billion market out of $123 billion pet market in the United States. With the acquisition of PetCareRx, we are now operating in a much larger addressable market. PetCareRx not only carries an extensive list of medications, they also made the investment to expand their addressable market by curating over 10,000 of the best non-medication health and wellness products in the market, including food, supplements and other similar products. They also bring incremental distribution center capability outside of core medication distribution and important incremental nonmedication supplier relationships.

今天，PetMeds 參與了醫藥市場，在美國 1230 億美元的寵物市場中，這個市場大約有 130 億美元。通過收購 PetCareRx，我們現在在一個更大的潛在市場中運營。 PetCareRx 不僅擁有廣泛的藥物清單，他們還通過策劃市場上超過 10,000 種最好的非藥物健康和保健產品（包括食品、補充劑和其他類似產品）來擴大其目標市場。他們還在核心藥物分銷和重要的增量非藥物供應商關係之外帶來了增量配送中心的能力。

Let's turn to Slide 8. In fiscal 2023, we accomplished many of the initial steps that are important to our transformation. We demonstrated the ability to grow new customers, increased our recurring subscription revenue, expanded our product catalog and launched the unique and differentiated services.

讓我們轉到幻燈片 8。在 2023 財年，我們完成了許多對我們的轉型很重要的初始步驟。我們展示了發展新客戶、增加經常性訂閱收入、擴大產品目錄並推出獨特和差異化服務的能力。

We are now turning the page to our next chapter, revenue growth. We will be spending the next year on execution, while we also see tremendous market tailwinds in the consumable pet health and wellness pet category. We are confident in this statement given the continuing stabilization of the core PetMeds business, as well as a great start to the integration of the PetCareRx team.

我們現在翻到下一章，收入增長。明年我們將花在執行上，同時我們也看到了消耗性寵物健康和保健寵物類別的巨大市場順風。鑑於核心 PetMeds 業務的持續穩定，以及 PetCareRx 團隊整合的良好開端，我們對這一聲明充滿信心。

I'd like to put a finer point on this. We are expeditiously and successfully integrating our new acquisition team and brand, PetCareRx. Almost half of PetCareRx' revenue is derived from non-medication products. We will be rapidly adding these relationships and products from the PetCareRx portfolio to PetMeds over the next several quarters, and are confident that we will see similar expansion of buying behavior with our PetMeds customers over time. In fact, we see prescription food and premium food is a real need for the PetMeds traditional pet parent.

我想在這一點上提出一個更好的觀點。我們正在迅速並成功地整合我們新的收購團隊和品牌 PetCareRx。 PetCareRx 幾乎一半的收入來自非藥物產品。在接下來的幾個季度中，我們將迅速將 PetCareRx 產品組合中的這些關係和產品添加到 PetMeds 中，並且有信心隨著時間的推移，我們將看到與我們的 PetMeds 客戶的購買行為類似的擴展。事實上，我們看到處方食品和優質食品是 PetMeds 傳統寵物父母的真正需求。

We are pleased to announce that Purina will be our first premium and prescription food partner that we will launch at PetMeds next quarter. As you might know, prescription food is typically prescribed by a veterinarian, which is a similar process to the core prescription business that PetMeds pioneered and perfected over 20 years ago. We understand how to work with that, deliver an efficient and high-quality customer experience.

我們很高興地宣布，Purina 將成為我們下個季度在 PetMeds 上推出的第一個優質和處方食品合作夥伴。您可能知道，處方食品通常由獸醫開處方，這與 PetMeds 20 多年前開創並完善的核心處方業務類似。我們了解如何與之合作，提供高效和高質量的客戶體驗。

We will be launching aspects of the PetCareRx catalog over the next several quarters. In addition, we are leaning into PetMeds' large size and scale in the direct-to-consumer pharmaceutical space. We have migrated the management of all of the meaningful pharmaceutical supplier agreements from PetCareRx over to PetMeds, which provides additional benefits to the existing PetCareRx business in the form of improved marketing cooperative funds from manufacturers, which also will help make the PetCareRx business accretive more quickly.

我們將在接下來的幾個季度推出 PetCareRx 目錄的各個方面。此外，我們正傾向於 PetMeds 在直接面向消費者的製藥領域的規模和規模。我們已將所有有意義的製藥供應商協議的管理從 PetCareRx 轉移到 PetMeds，這以改善來自製造商的營銷合作資金的形式為現有 PetCareRx 業務提供了額外的好處，這也將有助於使 PetCareRx 業務更快地增長.

I'll now turn the call over to Christine to review our financial results and expectations in more detail.

我現在將電話轉給克里斯汀，以更詳細地審查我們的財務業績和預期。

Thanks, Matt. I'm going to discuss this most recent quarter and provide an update on the tax liability we mentioned last quarter. First, let me turn to our financial results for the quarter ending March 31, 2023, our fourth fiscal quarter. My remarks will compare this year's quarterly results to the same quarter last year.

謝謝，馬特。我將討論最近這個季度，並提供我們上個季度提到的納稅義務的最新情況。首先，讓我談談我們截至 2023 年 3 月 31 日的第四財季的財務業績。我的發言將把今年的季度業績與去年同期進行比較。

Fourth quarter sales were $62.4 million compared to the sales of $66 million in the same period last year, a decrease of 5%. As Matt mentioned, we continued our trend related to net new customer growth year-over-year. We welcomed approximately 72,000 new pet parents this quarter compared to 65,000 in the prior year, representing growth in excess of 12% year-over-year. However, repeat sales of $56 million for the quarter decreased 6% compared to the same period last year.

第四季度銷售額為 6240 萬美元，與去年同期的 6600 萬美元相比下降了 5%。正如馬特所提到的，我們延續了與去年同期淨新客戶增長相關的趨勢。本季度我們迎來了大約 72,000 名新寵物父母，而去年同期為 65,000 名，同比增長超過 12%。然而，該季度的重複銷售額為 5600 萬美元，與去年同期相比下降了 6%。

We continue to see contraction in the over-the-counter medication market, in line with the macro trends seen across the industry that Matt discussed earlier. To put a finer point on this, our largest percentage decrease was from the flee and tick over-the-counter medication category. This last quarter experienced a large amount of price discounting in online and off-line retailers. OTC medication has become an increasingly smaller percentage of PetMeds' overall sales.

我們繼續看到非處方藥市場的收縮，這與馬特之前討論的整個行業的宏觀趨勢一致。為了更好地說明這一點，我們最大的百分比下降來自 flee 和 tick 非處方藥類別。上個季度在線上和線下零售商經歷了大量的價格折扣。非處方藥在 PetMeds 總銷售額中所佔的比例越來越小。

We've seen continued growth of our AutoShip & Save sales as a percentage of total sales, driving greater engagement and recurring revenue. This will help strengthen our repeat sales base. As Matt mentioned, AutoShip & Save sales as a percentage of total sales was 44% in the quarter, up from 42% last quarter and from 31% in the same period last year. Gross profit for the quarter as a percentage of sales was 27.9% as compared to 29.4% for the same quarter last year and 25.9% for the prior quarter.

我們已經看到我們的 AutoShip & Save 銷售額佔總銷售額的百分比持續增長，推動了更大的參與度和經常性收入。這將有助於加強我們的重複銷售基礎。正如 Matt 提到的那樣，AutoShip & Save 銷售額佔本季度總銷售額的百分比為 44%，高於上一季度的 42% 和去年同期的 31%。本季度毛利佔銷售額的百分比為 27.9%，而去年同期為 29.4%，上一季度為 25.9%。

Last quarter, we leaned into deeper seasonal promotions that were focused on lab customers. Compared to last year, we also saw an increase in per order freight expenses.

上個季度，我們開展了針對實驗室客戶的更深入的季節性促銷活動。與去年相比，我們還看到每筆訂單的運費有所增加。

G&A increased $10.7 million year-over-year. This included a onetime tax accrual for $6.9 million in the quarter. When normalized for the tax liability and nonoperating costs related to the PetCareRx acquisition advisory fees, G&A increased $2.7 million year-over-year. This is due to an increase of $1.3 million related to payroll expenses, $600,000 related to third-party resources and some increases in software expenses related to ongoing improvement in our operating tools and processes.

G&A 同比增加 1070 萬美元。這包括本季度 690 萬美元的一次性應計稅款。當對與 PetCareRx 收購諮詢費相關的納稅義務和非運營成本進行標準化時，G&A 同比增加 270 萬美元。這是由於與工資支出相關的 130 萬美元增加，與第三方資源相關的 600,000 美元以及與我們的運營工具和流程的持續改進相關的軟件支出的一些增加。

That said, as we look forward, we do not expect G&A, excluding nonoperating items to continue to increase at the same rate. We believe the team is largely being put in place and the G&A will be fairly flat on a go-forward basis. As we integrate and layer on the PetCareRx teams, we expect to drive cost synergies through PetCareRx that will get the stand-alone business accretive by the end of the year.

也就是說，正如我們所期待的那樣，我們預計 G&A（不包括非經營項目）不會繼續以同樣的速度增長。我們相信該團隊已基本就位，並且 G&A 在未來的基礎上將相當平穩。隨著我們對 PetCareRx 團隊的整合和分層，我們希望通過 PetCareRx 推動成本協同效應，這將使獨立業務在年底前實現增長。

We take our responsibilities to our shareholders seriously, and we are committed to operating with the highest standards of transparency and integrity. As I mentioned last quarter, we received and accrued for a sales tax assessment in the second quarter of fiscal year 2023. Based on the assessment received, the company initiated a process to evaluate the potential for further sales tax contingencies. We have conducted a thorough analysis with tax expert. And based on this analysis, we have accrued an additional $6.9 million this quarter related to prior year sales tax liabilities.

我們認真對待我們對股東的責任，我們致力於以最高標準的透明度和誠信經營。正如我在上個季度提到的，我們在 2023 財年第二季度收到併計提了銷售稅評估。根據收到的評估，公司啟動了一個程序來評估進一步銷售稅或有事項的可能性。我們與稅務專家進行了徹底的分析。根據這一分析，我們本季度額外增加了 690 萬美元，與上一年的銷售稅負債相關。

Net loss for the fourth quarter was $5.1 million or $0.25 per diluted share compared to net income of $6.1 million or $0.30 per diluted share for the same quarter last year. This quarter includes the $6.9 million tax accrual I mentioned earlier, equal to approximately $0.25 per diluted share. Adjusted EBITDA for the quarter was $3.6 million compared to $9.5 million for the same quarter last year. The decrease in adjusted EBITDA reflects lower gross margin of $2 million, higher G&A spend of $2.7 million and lower marketing co-op dollars.

第四季度淨虧損為 510 萬美元或攤薄後每股收益 0.25 美元，而去年同期淨收入為 610 萬美元或攤薄後每股收益 0.30 美元。本季度包括我之前提到的 690 萬美元的應計稅款，相當於攤薄每股約 0.25 美元。本季度調整後的 EBITDA 為 360 萬美元，而去年同期為 950 萬美元。調整後 EBITDA 的減少反映了 200 萬美元的毛利率下降、270 萬美元的 G&A 支出增加以及營銷合作費用的減少。

Turning to Slide 11. We continue to maintain a strong balance sheet and cash position. We ended the fiscal year with $104 million of cash on the balance sheet and no debt. Subsequent to quarter end, we paid $36 million cash for the acquisition of PetCareRx. As always, management remains committed to increasing total shareholder returns.

轉到幻燈片 11。我們繼續保持強勁的資產負債表和現金狀況。我們在本財政年度結束時資產負債表上有 1.04 億美元的現金，沒有債務。季度末後，我們支付了 3600 萬美元現金用於收購 PetCareRx。一如既往，管理層仍然致力於提高股東總回報。

In support of that commitment, we are declaring a $0.30 cash dividend payable in June this year. We continue to evaluate our dividend policy as we assess the growth opportunities in front of us. We expect to be able to build recurring revenue while also growing our new customer base in our core business.

為支持這一承諾，我們宣布將於今年 6 月派發 0.30 美元的現金股息。在評估擺在我們面前的增長機會時，我們將繼續評估我們的股息政策。我們希望能夠建立經常性收入，同時在我們的核心業務中擴大我們的新客戶群。

This year, we will be focusing (inaudible) to set up the expanded product catalog to drive organic growth and to generate organic synergies that will meet PetCareRx accretive before the end of the year. In the longer term, we will generate further value creation from adding differentiated services, such as with our Vetster and Pumpkin partnership. With a more immediate upside to our PetMeds business, through expanding our wallet share by selling food and a broader assortment of consumables.

今年，我們將重點（聽不清）建立擴大的產品目錄，以推動有機增長並產生有機協同效應，以在年底前滿足 PetCareRx 增長。從長遠來看，我們將通過增加差異化服務來進一步創造價值，例如與 Vetster 和 Pumpkin 的合作夥伴關係。通過銷售食品和更廣泛的消耗品來擴大我們的錢包份額，我們的 PetMeds 業務有更直接的優勢。

In the immediate term, our mantra is to digest and execute. Our management team has made a lot of investments in and foundational changes to the business. As a result of these investments, the company today has a much stronger foundation for future success. After having now completed the PetCareRx acquisition and the investments in Vetster and Pumpkin, we want to make sure that those businesses are well integrated, nurtured and driving meaningful improvements in financial results for the company.

在短期內，我們的口頭禪是消化和執行。我們的管理團隊對業務進行了大量投資和基礎性變革。由於這些投資，今天的公司為未來的成功奠定了更堅實的基礎。在完成對 PetCareRx 的收購以及對 Vetster 和 Pumpkin 的投資之後，我們希望確保這些業務得到很好的整合、培育，並推動公司財務業績的顯著改善。

I will now turn the call back over to Matt for some concluding remarks prior to Q&A.

我現在將把電話轉回給馬特，讓他在問答之前做一些總結性發言。

Thanks, Christine. This next fiscal year for PetMeds will be important for the company. We expect to show growth in new customers as well as a stabilized recurring sales base, but most importantly, healthy top line revenue growth while keeping our fixed costs stable. We expect to get leverage in our P&L as we add revenue scale.

謝謝，克里斯汀。 PetMeds 的下一個財政年度對公司來說很重要。我們預計將顯示新客戶的增長以及穩定的經常性銷售基礎，但最重要的是，健康的收入增長，同時保持我們的固定成本穩定。隨著我們增加收入規模，我們希望在我們的 P&L 中獲得影響力。

Investors shouldn't expect to hear a lot about new inorganic activity because the company has been so active of late. Management will be focused on operational execution that includes integrating our recent partnerships and investments. We believe that we have assembled the components to deliver long-term growth and profitability.

投資者不應期望聽到很多關於新無機活動的消息，因為該公司最近一直非常活躍。管理層將專注於運營執行，包括整合我們最近的合作夥伴關係和投資。我們相信我們已經組裝了組件以實現長期增長和盈利。

For this upcoming quarter, PetMeds is feeling more comfortable around our growth strategy and visibility into our future performance. We like the strategy that we are pursuing as a premium specialty retailer brand. We strongly believe that there is room to navigate and thrive in a large addressable tech market with a set of strong differentiated solutions for pet parents.

對於即將到來的這個季度，PetMeds 對我們的增長戰略和對未來業績的可見性感到更加滿意。我們喜歡我們作為優質專業零售商品牌所追求的戰略。我們堅信，通過為寵物父母提供一套強大的差異化解決方案，在一個龐大的可尋址技術市場中，存在導航和繁榮的空間。

As we have said in previous calls, we aim to be pet parents' trusted pet health expert. We've been sharing our growth strategy with you for a little over a year, and we have substantially filled in the pieces to build an enduring, profitable and growing pet health company. To be crystal clear on those measures, year-over-year customer growth, continued recurring revenue, expect to see continued progress on our AutoShip & Save program.

正如我們在之前的電話會議中所說，我們的目標是成為寵物父母值得信賴的寵物健康專家。一年多來，我們一直在與您分享我們的增長戰略，我們已經充分填補了建立一家持久、盈利和不斷發展的寵物保健公司的各個部分。為了清楚地了解這些措施，客戶同比增長，持續的經常性收入，預計我們的 AutoShip & Save 計劃將繼續取得進展。

In addition, we are excited about our new wholesale membership product called PetPlus, which we now operate as part of the PetCareRx acquisition. More diversification beyond medication. PetMeds now has a more diversified catalog of premium food, vet services and insurance. We believe there are great opportunities to expand wallet share, LTV and overall customer engagement and satisfaction.

此外，我們對名為 PetPlus 的新批發會員產品感到興奮，我們現在將其作為 PetCareRx 收購的一部分進行運營。藥物以外的更多多樣化。 PetMeds 現在擁有更多樣化的優質食品、獸醫服務和保險目錄。我們相信有很大的機會來擴大錢包份額、LTV 以及整體客戶參與度和滿意度。

We have checked those boxes, and now we're adding a new one. That being meeting and exceeding market growth rates for the entire PetMeds business. Management is feeling good about our momentum going into this current quarter and beyond. We are making great progress integrating our new team at PetCareRx as well as the other investments that we have made over the last several quarters. We are confident that investors will see improved revenues with recovering leverage in the income statement in the coming quarters.

我們已經選中了這些框，現在我們正在添加一個新框。這達到並超過了整個 PetMeds 業務的市場增長率。管理層對我們進入本季度及以後的勢頭感覺良好。我們在整合我們在 PetCareRx 的新團隊以及我們在過去幾個季度進行的其他投資方面取得了很大進展。我們相信，隨著未來幾個季度損益表槓桿率的恢復，投資者將看到收入有所改善。

Lastly, we have a strong balance sheet that provides us with the financial flexibility to take advantage of a large and growing market. This ends our prepared remarks. Operator, we are now ready to take questions.

最後，我們擁有強大的資產負債表，為我們提供了財務靈活性，可以利用龐大且不斷增長的市場。我們準備好的發言到此結束。接線員，我們現在準備好接受提問了。

(Operator Instructions) Our first question comes from the line of Corey Grady with Jefferies.

（操作員說明）我們的第一個問題來自 Corey Grady 與 Jefferies 的合作。

I wanted to follow up on your comments about flea and tick season. So you reported Q4, up 6% sequentially on an easier comp of last year and it's -- now that's quite a bit below your typical seasonality. So maybe you can add more color on what impacted the quarter. I mean how much of that was due to the OTC contraction? And were there any other factors that contributed to the softness?

我想跟進您對跳蚤和蜱蟲季節的評論。所以你報告了第四季度，比去年更容易的 comp 連續增長了 6% 而且它 - 現在這比你的典型季節性要低得多。因此，也許您可以為影響該季度的因素添加更多顏色。我的意思是其中有多少是由於場外交易收縮造成的？還有其他因素導致柔軟嗎？

Corey, yes, as I indicated on the call, majority of that decline was the over-the-counter flea and tick medication as a percentage of the decline. And as we noted, that was largely due to off-line and online price discounting that was quite excessive this season.

科里，是的，正如我在電話中指出的那樣，下降的大部分是非處方跳蚤和壁蝨藥物佔下降的百分比。正如我們所指出的，這主要是由於本季的線下和線上價格折扣過大。

Conversely, the Rx side of the business, which continues to be the highest concentration of where we focused sees less discounting and less price pressure, and that obviously has higher gross margins. So for us, we decided not to contribute and really compete in lower price discounting in OTC flea and tick. So that kind of explains some of that decline year-over-year, Corey?

相反，業務的 Rx 方面，仍然是我們關注的最集中的地方，折扣和價格壓力較小，而且顯然具有更高的毛利率。因此，對我們來說，我們決定不參與並真正參與 OTC flea 和 tick 的低價折扣競爭。所以這在一定程度上解釋了同比下降，科里？

All right. That's helpful. And then I wanted to just ask about the dividend. So with earnings this quarter and closing PetCareRx, can you talk about your priorities for cash and how you're thinking about your capital return strategy here?

好的。這很有幫助。然後我只想問一下股息。因此，隨著本季度的收益和 PetCareRx 的關閉，你能談談你對現金的優先考慮以及你如何考慮你的資本回報策略嗎？

Cory, it's Christine. And thanks for the question. As we always review the dividend on a quarterly basis, and we're really feeling strongly about our ability grow the business from some of the declines that we've seen. And I think over the long term, management wants to show those signs of the repeated -- the repeatable growth. And over time, we feel stock appreciation, the growing company will generate free cash flow that will deliver higher returns to investors. So I think we'll continue to evaluate it, but we definitely take a broader approach to it.

科里，我是克里斯汀。謝謝你的提問。由於我們總是每季度審查一次股息，我們真的很強烈地感受到我們有能力從我們所看到的一些下滑中發展業務。而且我認為從長遠來看，管理層希望展示那些重複的跡象 - 可重複的增長。隨著時間的推移，我們感受到股票升值，成長中的公司將產生自由現金流，為投資者帶來更高的回報。所以我認為我們會繼續評估它，但我們肯定會採取更廣泛的方法。

(Operator Instructions) Our next question comes from the line of Anthony Lebiedzinski with Sidoti & Company.

（操作員說明）我們的下一個問題來自 Sidoti & Company 的 Anthony Lebiedzinski。

So just a follow-up on Q4 sales. Was there any noticeable impact do you think from the weather? Obviously, that does influence the timing of when people purchase flea and tick medication. So just want to get your thoughts on that.

所以只是對第四季度銷售的跟進。你認為天氣有什麼明顯的影響嗎？顯然，這確實會影響人們購買跳蚤和蜱蟲藥物的時間。所以只是想了解一下你的想法。

Anthony, this is Matt, obviously. No less so on weather and more so on the over-the-counter flea and tick medication trends in terms of price discounting had a more pronounced impact to the sales side of the business. However, we are feeling better, management feels a lot better around the stabilization of PetMeds in this quarter and as well as PetCareRx integration. So we're feeling good about the stabilization of PetMeds.

安東尼，顯然這是馬特。天氣情況同樣如此，價格折扣方面的非處方跳蚤和蜱蟲藥物趨勢對業務的銷售方面也產生了更顯著的影響。然而，我們感覺好多了，管理層在本季度穩定 PetMeds 以及 PetCareRx 整合方面感覺好多了。因此，我們對 PetMeds 的穩定性感到滿意。

And like I said, more and more of the business has been more Rx focused. So we haven't seen those trends per se, reflected in the core prescription refill Rx business for PetMeds.

就像我說的，越來越多的業務更加關注 Rx。所以我們還沒有看到這些趨勢本身，反映在 PetMeds 的核心處方補充 Rx 業務中。

Got you. Okay. And then going back to the third quarter, your gross margin was hit somewhat because you reactivated some dormant customers with some promotions. So as that happened -- so now that we're ready actually now more than halfway done with the first quarter here. So in terms of those reactivated customers, have you seen anything as far as those customers going back and purchasing products from PetMeds?

明白了好的。然後回到第三季度，您的毛利率有所下降，因為您通過一些促銷活動重新激活了一些休眠客戶。所以當那件事發生的時候——所以現在我們已經準備好了，實際上現在第一季度已經完成了一半以上。那麼就那些重新激活的客戶而言，您是否看到這些客戶返回並從 PetMeds 購買產品？

Great question. First off, it was great to see that trend continue. We had 2 quarters of sequential net new customer growth, which is a trend we broke that hadn't been really a trend that we've seen for a couple of years in terms of net new customer growth year-over-year.

很好的問題。首先，很高興看到這種趨勢繼續下去。我們有兩個季度的連續淨新客戶增長，這是我們打破的趨勢，在淨新客戶同比增長方面我們已經看到了幾年的趨勢。

Secondarily, as you know, PetMeds traditionally has been a low engagement platform, primarily focused on Rx prescription refill. And so it's going to be a little bit of time until we get other more highly consumable products like food, prescription food, premium food onboard to see those trends, but early indicators are that the customers that we reactivated was a good strategy.

其次，如您所知，PetMeds 傳統上是一個低參與度的平台，主要專注於 Rx 處方補充。因此，在我們獲得其他更易消費的產品（如食品、處方食品、優質食品）之前，我們還需要一些時間才能看到這些趨勢，但早期跡象表明，我們重新激活的客戶是一個很好的策略。

And lastly, I'd say the ability for us to be marketing efficient has made us a little bit more confident that we don't have to discount as aggressively to get these customers back onto the platform. So those 3 things combined make us feel pretty good about where we're spending our media dollars and how we're effectively bringing back lapsed customers.

最後，我要說的是，我們提高營銷效率的能力讓我們更有信心，我們不必為了讓這些客戶回到平台上而大打折扣。因此，這 3 件事結合起來讓我們對我們將媒體資金花在哪里以及我們如何有效地帶回流失的客戶感到非常滿意。

Got you. Okay. And then as far as PetCareRx talked about operational synergies. So now that you've already acquired the company for a few weeks since the beginning of April, in terms of those operational synergies, can you expand on that? And then compared to your original announcement from back in January, are you seeing an opportunity for greater operational synergies that you would have expected at first? Or how should we think about that?

明白了好的。然後就 PetCareRx 而言，談到了運營協同效應。那麼，自 4 月初以來，您已經收購了這家公司數週時間，就這些運營協同效應而言，您能否對此進行擴展？然後與您 1 月份的原始公告相比，您是否看到了您最初預期的更大運營協同效應的機會？或者我們應該如何考慮？

That's a great question. So it's like 3 things in there that I'd like to say. One is the team at Tech-Rx is phenomenal. We've had a really great time and an easier time integrating that team and getting them all kind of coordinated across the board. So in terms of activating a team, which I would call the most important aspect to an acquisition exceeded our expectations.

這是一個很好的問題。所以我想說其中的 3 件事。一是 Tech-Rx 的團隊非常出色。我們度過了非常愉快的時光，也更輕鬆地整合了該團隊並讓他們全面協調。因此，在激活團隊方面，我認為收購最重要的方面超出了我們的預期。

In terms of revenue and cost integration, I'd say on the revenue side in terms of getting more size and scale benefits for things like cooperative advertising and things like that related to our overall increase in scale due to PetMeds plus PetCareRx, I think we're doing a really good job there. That was maybe happening a little bit more quickly than we anticipated.

在收入和成本整合方面，我想在收入方面說，在合作廣告等方面獲得更多的規模和規模效益，以及與 PetMeds 和 PetCareRx 相關的整體規模增長相關的事情，我認為我們在那裡做得很好。這可能比我們預期的要快一點。

And on the cost side, we're doing a really good job of looking at ways in which we can streamline operations. So overall, I think we're really pleased with how it's going thus far and that we have managed 2 teams with 2 different brands, maybe a little bit better than expectations in terms of integration.

在成本方面，我們在尋找簡化運營的方法方面做得非常好。所以總的來說，我認為我們對目前的進展感到非常滿意，我們管理著兩個擁有兩個不同品牌的團隊，在整合方面可能比預期好一點。

So it's really great to see that team in New York really, really embrace the PetMeds culture. And we, in turn, at PetMeds have really embraced PetCareRx. So we're really, really optimistic about this.

所以很高興看到紐約的那個團隊真正地、真正地接受了 PetMeds 文化。反過來，我們在 PetMeds 真正接受了 PetCareRx。所以我們對此非常非常樂觀。

There are no further questions in the queue. I'd like to hand the call back to Mr. Hulett for closing remarks.

隊列中沒有其他問題。我想將電話轉回給 Hulett 先生，請他作結束語。

Thanks, operator. Thank you for joining our call today. I'm confident that the future we envision for PetMeds along with the foundation that we've been laying will meet the market opportunity in unique and innovative ways. And will lead to increased operating results and shareholder value. PetMeds' brand expertise and reputation are unparalleled. We have greatly accelerated our operating road map, and we look forward to sharing our progress as we go to market with products and services that positively change the lives of our pet parents impact. Thank you for your continued support.

謝謝，運營商。感謝您今天加入我們的電話會議。我相信，我們為 PetMeds 設想的未來以及我們一直在奠定的基礎將以獨特和創新的方式迎接市場機遇。並將帶來更高的經營業績和股東價值。 PetMeds 的品牌專業知識和聲譽是無與倫比的。我們已經大大加快了我們的運營路線圖，我們期待著分享我們的進展，因為我們將產品和服務推向市場，積極改變我們寵物父母的生活。感謝您一如既往的支持。

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.

女士們，先生們，今天的電話會議到此結束。感謝您的參與。此時您可以斷開線路，度過美好的一天。