To My Fellow Stockholders:
Despite fiscal 2013 presenting several challenges - including a manufacturer's suspension of production of several key products, advertising during a presidential election year, unseasonably colder weather, and increased competition - the Company was able to increase gross margins and decrease operational expenses to improve our bottom line results. For fiscal 2013 our net income increased to $17.2 million, or $0.86 diluted per share, compared to net income of $16.7 million, or $0.80 diluted per share, for fiscal 2012, an increase to earnings per share of 6.4%. Net sales for the fiscal year ended March 31, 2013 were $227.8 million, compared to $238.3 million for the fiscal year ended March 31, 2012, a decrease of 4.4%. Online sales for the fiscal year were approximately 77% of all sales, compared to 75% for the prior fiscal year. We have taken steps to address the decline in sales by focusing on increasing our advertising spending to improve new order sales, shifting our sales to higher margin items, and continuing to expand our product offerings.
1-800-PetMeds remains committed to returning capital to our stockholders. During the fiscal year, we maintained our quarterly dividend at $0.15 per share, while also paying a one-time special dividend of $1.00 per share in December 2012. For the fiscal year, we paid approximately $32.0 million in dividends, while also buying back approximately 397,000 shares paying approximately $3.9 million in the fiscal year, at an average price of $9.74.
1-800-PetMeds, with a mission statement of “Fast, Easy, Helpful Service with Great Savings!” continues to be America's Largest Pet Pharmacy, the national brand leader in pet medications and the most recognized in the pet industry as a result of spending over $257 million in advertising since fiscal 2001. We are a licensed pharmacy to dispense prescription medications in all 50 states. We offer a wide selection of products, over 3,000 SKUs, including a variety of private label products all made in the United States. We are always looking to expand our selection of products so that we can offer our customers the best medications, supplements, and pet supplies for dogs and cats at affordable prices. Our customers can enjoy either the convenience of ordering online at our top-rated website www.1800petmeds.com, or over the telephone, where they can experience 1-800-PetMeds' exceptional customer care.
We continue to remain thankful to our loyal customers, dedicated employees, and, you, our stockholders, for your ongoing support of 1-800-PetMeds.
President, Chief Executive Officer, Director
June 14, 2013
PetMed Express, Inc., d/b/a 1-800-PetMeds