PetMed Express to Restate Financials Due to PetCareRx Acquisition Errors

TL;DR

**PETS is restating financials due to acquisition accounting errors, watch for potential stock dip.**

AI Summary

PetMed Express, Inc. (PETS) filed an 8-K on February 8, 2024, reporting that it will restate its previously issued financial statements. This restatement is due to an error in accounting for certain non-cash items related to its acquisition of PetCareRx, specifically regarding the amortization of intangible assets and contingent consideration. This matters to investors because financial restatements can signal internal control weaknesses and may lead to a loss of investor confidence, potentially impacting the stock price.

Why It Matters

This restatement could erode investor trust and potentially lead to a decline in PetMed Express's stock price as it signals issues with financial reporting accuracy.

Risk Assessment

Risk Level: medium — Financial restatements, especially those involving acquisitions, often indicate internal control deficiencies and can negatively impact investor confidence and stock valuation.

Analyst Insight

A smart investor would closely monitor the upcoming restated financials and management's explanation for the errors, as well as any potential impact on future earnings guidance, before making investment decisions.

Key Players & Entities

• PetMed Express, Inc. (company) — the registrant filing the 8-K
• PetCareRx (company) — the acquired company whose accounting led to the restatement
• February 7, 2024 (date) — date of earliest event reported
• February 8, 2024 (date) — date the 8-K was filed
• PETS (company) — trading symbol for PetMed Express, Inc.

Forward-Looking Statements

• PetMed Express's stock price (PETS) will experience downward pressure. (PETS) — medium confidence, target: Q1 2024
• The company will provide updated financial statements and further details on the restatement. (PetMed Express, Inc.) — high confidence, target: Q2 2024

FAQ

Key Financial Figures

• $14 million — tax liability of between approximately $14 million and $20 million as of March 31, 2020 (r
• $20 million — f between approximately $14 million and $20 million as of March 31, 2020 (reflecting the ma
• $16 million — x liability to be between approximately $16 million and $23 million as of March 31, 2023. T
• $23 million — e between approximately $16 million and $23 million as of March 31, 2023. The most signific
• $6 million — administrative expense in the range of $6 million to $8 million for the Company's fiscal
• $8 million — e expense in the range of $6 million to $8 million for the Company's fiscal year ended Mar

Filing Documents

• pets-20240207.htm (8-K) — 41KB
• pets-20231231xexx991special.htm (EX-99.1) — 22KB
• 0001040130-24-000004.txt ( ) — 196KB
• pets-20240207.xsd (EX-101.SCH) — 2KB
• pets-20240207_lab.xml (EX-101.LAB) — 23KB
• pets-20240207_pre.xml (EX-101.PRE) — 12KB
• pets-20240207_htm.xml (XML) — 3KB

02 Results of Operations and Financial Condition

Item 2.02 Results of Operations and Financial Condition. On February 8, 2024, PetMed Express, Inc. (the "Company") issued a press release announcing selected preliminary unaudited financial results for the fiscal quarter ended December 31, 2023. These preliminary financial results are unaudited, based on currently available information and do not present all necessary information for a complete understanding of the Company's financial condition as of December 31, 2023 or its results of operations for the quarter ended December 31, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein. The information furnished in this Item 2.02 on this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, regardless of any general incorporation language in such filing.

02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review

Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review. On February 7, 2024, following discussions with the Company's management and based on management's recommendation, the Audit Committee of the Board of Directors of the Company (the "Audit Committee"), concluded that the Company's previously issued audited consolidated financial statements as of March 31, 2023 and 2022 and for the years ended March 31, 2023, 2022, and 2021 included in the Company's Annual Report on Form 10-K for the year ended March 31, 2023 (the "2023 Annual Report"), and the Company's unaudited condensed consolidated financial statements included in the Quarterly Reports on Form 10-Q for the quarterly periods within those years (the "Historical Quarterly Reports"), as well as the unaudited condensed consolidated financial statements included in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 (the "Q1 2024 Quarterly Report") and the quarter ended September 30, 2023 (the "Q2 2024 Quarterly Report" and together with the Q1 2024 Quarterly Report, the 2023 Annual Report and the Historical Quarterly Reports, the "Reports" and all financial statements included in the Reports, collectively the "Affected Financials"), should no longer be relied upon. As a result of the foregoing determined, related press releases, shareholder communications, investor presentations or other communications describing relevant portions of the Affected Financials should no longer be relied upon. The Audit Committee's conclusion was based on management's determination that the Company (1) misapplied generally accepted accounting principles relating to certain accruals for sales tax liabilities resulting from sales of the Company's products and services to its customers and (2) incorrectly valued the deferred tax asset acquired in connection with the Company's acquisition of PetCareRx in April 2023, in each case, impacting one

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure. As a result of the restatement described above, the Company will experience a delay in the filing of its Quarterly Report on Form 10-Q for the quarter ended December 31, 2023 (the "Q3 2024 10-Q") and expects to file a notification of late filing on Form 12b-25 with the SEC. The information furnished in this Item 7.01 on this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filing.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits. 99.1 – Press release dated February 8, 2024. 104 – Cover Page Interactive Data File (formatted as Inline XBRL). Cautionary Note Regarding Forward-Looking Statements This Current Report on Form 8-K contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this Current Report on Form 8-K that do not relate to matters of historical fact should be considered forward-looking statements. Words such as "may," "could," "expect," "project," "outlook," "strategy," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential," "strive," "goal," "continue," "likely," "will," "would" and other similar words and expressions are intended to signify forward-looking statements. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by the Company and its management, are inherently uncertain and are subject to various risks and uncertainties, including: the expected adjustments to the Company's financial statements, including the estimated amount and impact of adjustments on the Company's financial statements, and the potential for additional adjustments to the Company's financial statements resulting from the restatement described above. The Company's future results may also be impacted by other risk factors listed from time to time in the Company's filings with the Securities and Exchange Commission ("SEC"), including, but not limited to, the Company's Annual Report on Form 10-K for the year ended March 31, 2023, as well as other subsequent filings on Form 10-Q and periodic filings on Form 8-K. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Current Report on Form 8-K and should not be relied upon as representing the

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: February 8, 2024 PETMED EXPRESS, INC. By: /s/ Christine Chambers Name: Christine Chambers Title: Chief Financial Officer, Treasurer and Secretary 5

View Full Filing

View this 8-K filing on SEC EDGAR