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spk_0: welcome to pet meds conference call to review the financial results for the fourth quarter and fiscal year and march thirty first twenty twenty two during the presentation all participants will be in a listen only mode afterward will conduct a question and answer session at that time if you have a question preach press the one followed by the for on your telephone if at any time during the conference you need to reach an operator please press start zero at the request of the company this conference calls being recorded founded in nineteen sixty nine pet matches your trusted pet health expert and america's most trusted pet pharmacy delivering prescription a nonprescription pet medications and other health products for dogs cats and courses direct to the customer mads markets it's products through a national advertising campaigns which directs customers to order online or by phone and which are intended to increase the recognition of the pet that brand name that man's provide them attractive alternative for obtaining pet medication in terms of convenience price either bordering and rapid home delivery at this time i would like to turn the call over to the compete chief financial officer mr bruce rosenblum
spk_1: thank you and a like to welcome everybody here today i would also like to remind everyone that the first portion of a conference call will be listen only until the question and answer session which will be later and at all also certain information that will be included in a press conference may include for dodgy statements we didn't a meeting of the private security litigation reform act imagine any by or the securities and exchange commission the may bob a number of risks and uncertainties these statements are based on our belief as well as assumptions the use based upon information currently available to us because establish a fight or current views concerning future events these statements and risks uncertainties in assumption actual results cleared differ materially from those projected the company undertakes no obligation to update the statements based on subsequent events we have identified various risk factors associated with our operations in our most recent annual report another other for the securities and exchange commission now i the introduce our ceo and president matthew it man
spk_0: thanks for good afternoon and thank you for joining the earnings call the eight month mark since i started as a new ceo incredible throughout this time i've remained committed to clarity and transparency with him better than to take orders as to the progress of our strategic transformation he be clear pet med pioneer the i my have description business over twenty six years ago and that it in legacy of which everyone a pet name is very proud eleven in recent years growth has slowed and outside a significant twenty twenty up ticket sales related to the pandemic or a leadership position was with i continue to believe that happening with a terrific company with a talented and dedicated workforce to been a large employers customer base during today's earnings call we will share with you since early indications regarding the stabilization of our core business and articulation of our new strategy and tangible evidence of operating progress towards the execution of that new strategy i reiterate that my commitment is the be open and transparent as the how we are entering the transformation and it's iconic company today i'm going to divide my prepared remarks between a corporate scripture business and our pet health experts strategy with more time spent on the ladder including some specific steps we have already taken flights
spk_2: executing on the slaughter strategy
spk_0: i have a number of key points i want to communicate you today the for clarity i organize them into reaping the first thing is a a nation of the core business when the significant revenue declines with experience over the past year have begun to moderate for example a revenue in the fourth quarter decrease seven point nine percent year over year compared to a decrease and twelve point seven percent for the preceding nine month period while january and february hadn't revenue declined and a low single digits weather in march anymore more material impact on a quarter the typically a cooler march much of the country delay the start of the flea and sixty a season which normally represent a ramp up a customer demand for our leading to a slower than expected final month of the quarter which that salesman a category to rebound at higher temperatures which one too much for the point for the and simulate a more normal for you
spk_2: and hard one medication the man and pets now
spk_0: based on the still a question customer purchase pattern which that with the sale of them by for this year will be a delay to the start of the seasonal feels rather than a compression or lot and feel over the course of the summer adjusted ebitda for the fourth quarter exceed largely face and by been going on on the eight point four percent as compared to the thirty one percent decrease reported for the third quarter police will cover those in more detail that we cheated with little the fight double digit percentage increases in general and administrative expenses know the year you to purpose for investment and headcount and infrastructure to simulate the support a teacher blow notably the kept on valuable marking been relatively flat your bigger as you may recall last quarter we had it has the money for that resulted in unexpected inefficiency in a murphy's then them have now settled into a good place
spk_2: marking operation
spk_0: we are actively testing our cheaters are like some last quarter and written a laser beam focus on activities to grow our new customer number but we have not fully crack the top down because my god we're executing on several cities except that been just started out new customers education strategy and recently bring it up new team members
spk_2: like a new chief marketing officer the second thing is the acceleration of a subscription basis today i'm pleased to report that as a month of march thirty seven percent of our revenue is referring revenue divide them are other ships and say it's crippling blow when this is a whopping forty one percent increase from the previous quarter as mentioned in our lap earnings call we are introducing to do next with a strategically employer and our business evolves into a subscription ecommerce that
spk_0: as a result of the devolution over time we expect to see an increase in el pp at the subscription program crazy more reliable recurring revenue stream from our customers our new customer care for the corner in approximately sixty six thousand and or ltv to capture the quarter is two point five yeah the new custom account is calculated using the more specific definition of new customers and being those who have not previously purchased from us within the past three years as i mentioned earlier we bleed el pp the cat the more meaningful measure of the market value creation vs using our traditional well as method we expect to see that as lt get a cat that will grow as the migrate more but returning customers or on a ship subscription program and expand the back inside or average order value over the life of our customers the final theme is the rapid acceleration of a pet health experts strategy with the first building block of the strategic that are being telemedicine on people came with house our initial deployment of an investment partnership strategy that greatly accelerates our experts impact on strategy you may recall on that date we're announcement he's a partnership with the fastest growing and industry leading tell him back and platform after this is the exciting first are many transactions that will build a strategic color of our experts have helped strategy i hinted at telemedicine during the last call and to entered his face we delivered a novel approach the capital allocation and i will talk about
spk_2: to a bit later on this call
spk_0: now let's dive deeper into the details with the presentation material as always we like the your pictures of suffered an employee that or like that you see in many original picture throughout his presentation back the slide the just my dog carry a patented as he was eight weeks old let us start with a look at the current market and respected on the obama as he covered in our previous earnings call that ned operates in a very large and growing addressable market and us at market is over one hundred billion in annual sales and it is expected to reach one hundred and twenty billion by twenty twenty four the address of the pet medication market where we participate today at approximately ten billion
spk_2: and blowing rapidly
spk_0: we are actively working on improving her core business that on the decline while opposite sides on expanding our of a market into the broader wellness market which is that the made to be over thirty billion today we are one of the leading pet pharmacy at is also important part of the strategy of many of the cat one in player than the industry additionally i learned over the money since i started the business they are not many trusted of prescription providers will be a platforms and players the with which puts up and an enviable condition or court asset and demonstrated competency one prescription will enable us them is much more quickly to execute on a broader pet health experts strategy and i will elaborate on in a moment not only are we operating in large addressable market but we also operate marketed as brush with underlying the approach from their favorable to digital retailers he was household pet ownership is increased over time and today that without a us households have a pet
spk_2: had celery this trend that now more than ever had parents are keenly agenda the helping to the pet and it a covered world those pet parents are like me and will seek out health and wellness care provider by trusted brand i believe patna is uniquely positioned to take advantage of is trade
spk_0: consumers also now expect everything to be real time and digital h trend which is impacted every industry as we've seen in other digitally comrades vertical the ongoing move towards digitization a retail is accelerating today or addressable market is largely dominated by op one sale but we see the girl going trend to purchase online and very favorable to at currency no pets as an extension of their own family and they are increasingly demanding more healthy pick their option we see this as a positive trend your petn as an opportunity for glow similarly align with his friends and human health pet parents are thinking through the entire spectrum other pet care from diet to veterinary services in from infancy your old age as was really examine the channel through which the acceptance products and services lastly the pandemic accelerate increasing trend for the digitization of healthier pacific lee in the pet market regulations related to imprison veterinary business and prescription fulfillment were temporarily waiting for the first time during clothing and the service has moved on mind it unprecedented wave as i mentioned in our previous earnings call our team has spent a considerable amount of time conducting research with the industry generally as well specifically pets as i noted earlier in april we now important strategic partnership an investment of medicine with dexter with his groundbreaking partnership we believe we are in the first mainstream pet ominous and platform and the one that will prove to be an accelerator and widespread adoption of our medicine and have been over a decade were pet method when it first and thousand over in my commitment is that we will continue to do so during the latter to call we discuss them keep happening differentiator i want to reiterate that because there are and i believe they provide a real edge for companies transformation first a brand is not widely known and trusted our own market research indicates that fifty five percent of us have parents are aware that happened having a strong brand takes years to develop in a couple of the pack of their trusted fantasy and pet medication expert
spk_2: second we have a strong operational quality efficiency of a pharmacy or customer carried a great season
spk_0: no class which can assure the cops were getting products to quickly and accurately additionally or that workers receive quality service delivered your that platform we will be looking to expand or that network and provide in here service to down the new technology to to our partnership the dexter our deep experience with the bet community is a significant can have a damage as we discussed their last earnings call we currently have one of the largest direct to consumer debt networks and the online retail space with over seventy thousand and veterinarians that we work with over the company's history currently are all my that portal and seventeen thousand and the veterinarians
spk_2: that one as i said and earlier or it all this is a core capability and unique asset because it a people that will expand our fulfillment capability as we give our been
spk_0: our intent is that right incremental revenue for a powerful platform often toward that parker and the near future oh my other online players we don't give that to competitors for revenue with you that as partners in jockey provide a greater already a pet health services a pet it out in we will continue working together whole to improve that ability to care for cats because of our industry leading service relationships with that a prescription medication authorization way or the highest the and every bag which speaks volume to the level of veterinary cooperation with we see a again
spk_2: ultimately we believe if we help that a profits for both of that and protect them will follow our pet pharmaceutical category expertise is something i view as a towering spring many retailers can tell dogs but you can provide medication it sounded by at scale as i've said before being a differentiated cat medication provider our to sell or health while offering and continue
spk_0: to be viewed as pet health experts especially in the market can get to become even more competitive pubmed currently enjoy a close and strategic bond with are many supply and those relationships have developed over time to become even more strategic we have direct relationship with all of our major suppliers and we work together closely to effectively market products your customer base our customer service inaugural customer centricity eagles permeates our culture and as demonstrated router team we provided one hundred percent satisfaction guaranteed to our customers and we go the extra mile for our customers with truly empathetic an expert so that we don't have have a transactional interaction with customers we have been trusting genuine relationships are custom review cabinet and a traffic pet health experts and we take that responsibility seriously i recently had the pleasure of us into a phone interaction for memorial customer is what they had to say well i just want to complement the to people that i smoke with i call from the parking lot of emergency clinic which is open night and weekend i told petland about my situation be represented that i talked to name's cindy bend over backwards to get this prescription to be the next day before the hospital even open monday morning
spk_2: and then i call later that day to make sure that i could get the medication i spoke to go and i explain the situation at how i had to have this medication and he said i'm going to make sure that it in the mail for you they were both absolutely wonderful i can't thank you guys enough
spk_0: they were just back have become so sympathetic and they understood how i was feeling it's kind of a cultural rehab you're not selling it at men this is not like buying food or music either our cat and when they sick they are if we all needed this is important vivian got a perfect example of are employed medication to our customers and has lobbying and i'm delighted to share this story and recognize them for their exemplary customer service
spk_2: aetna has historically been a somewhat love road yet i it in based company we are intent however upon becoming a higher growth company employee we're in a great addition to do that pubmed is profitable with a pristine balanchine we do not have any that we had approximately one hundred eleven million in cash and cash equivalent to add on march thirty first twenty twenty two and we're casual positive
spk_0: at that the living much of our business from a transactional direct to consumer model to a subscription business description businesses are clearly compelling business model to due to their predictable and stable recurring casual
spk_2: the that mention at the beginning of the call we ended a month of march with approximately thirty seven percent of our customer the mode and ordering be out or other ship in a subscription program and we anticipate that that number will continue to rise
spk_0: we continue to have a large base of returning customers which is an indication of the quality of service and about you that we don't look we are fortunate to have a large base of over two million contract that have purchased from as over the last two years we have over twenty six years of experience as a pure play pharmacy whole life and fifty states delivering outstanding citizen value this domain experience in what i would call a more complicated part of the pegasus which make your progress in the other segments much easier our customers just like a random service or mps score is over eighty which puts up and the upper floor tile along with some of the most beloved brand now i like to have bruce review our finances and a quarter
spk_1: matt during regular for usual results we will prepare for fiscal quarter which ended on march thirty first three twenty to to last year's quarter that ended on march thirty first twenty twenty one i would also like to highlight that we introduce new non gaap financial metric last quarter adjusted even an integer to either to share we decided to include you do you measure it because they are key measures used by management and buyer beware to evaluate a robbery performance generate future had already planned a big strategic decisions regarding the allocation of capital adjusted he didn't and adjusted eat it up or share provide a more accurate picture of the underlying profitability and also how to be a recent increases in non cash stampede compensation yeah most recent as two year with a felix situation to parry two totally different environment between twenty twenty pandemic in twenty twenty one mostly those pandemic as we move toward is your first voters to year the early march thirty first three twenty three with our new largely cargo ships agencies and processes and with many of our highway initiative strongly a place we expect to be much more efficient with our during the emerging stand with three result for the current year or sales for sixty six million compared to feel that seventy one point seven million that is a period of our year a decrease of selling point nine percent while we were disappointed with the overall feels results for the quarter compared to the per year we will encourage by the feel strangely thought in january worry down in single digits however as mentioned earlier as a result of colder weather the spring we saw the way in the fleet check in or one season resulting in a decrease in demand for fleets it can hurt when to fold products in the month of march in contrast in the prior year seasons started in early march a positive trend the highlight for the quarter with the continued growth of our auto shipping phase subscription program approximately thirty seven percent of a revenue in the month of march was generated from our otto should be same description program with similar more popular brand exceed forty one percent reflecting the alignment of i discount promotional offers which required enrollment in the auto show progress rolling or subscription revenue is one of our main priorities and to school twenty twenty three and we expect to see stronger reorder sales as or autoshop revenue continues to grow
spk_0: during the quarter we saw decreases above new orders and real sales
spk_1: your sales are obviously one area needs improvement and were actively to point b thinking in addition is around reenergizing new customer grow your sales decreased by thirty five percent to four point nine million for the quarter compared to seven point four million for the same quarter the prior year we acquired a proxy get three thousand new customers in our for fiscal quarter ended march thirty first twenty twenty two compared to eighty thousand and the same period the prior year we are sales decreased by four point eight percent to sixty one point one million for the quarter ended march thirty first twenty twenty two compare to reorder sales and sixty four point two million to the same core in the prior year a full year we sales decreased by a point two percent to two hundred and fifty point four million compared to two hundred and seventy two point six million for the prior year with the increasing auditioned for corruption adoption rate we will see more opportunities to continue to build our relationship with our loyal customer base will also work to continue to improve our real resales i border into our loyal customer base will increase product offerings and services for fiscal quarter or gross profit as a percentage of sales was twenty nine point four percent compared to twenty point six percent to the same period a year ago this percentage increases due to some by major manufacturers shipping their funding from cooperative market a rebates to discounted product class and also the funding a discount promotion related auto shop there may be an opportunity to improve gross margin in fiscal twenty twenty three if the shift the prescription medications continues and we can grow future sales without the relying surprise promotions that income was six point one million or thirty cents diluted per share the for for of difficult school twenty twenty two compared to six point eight million or thirty four sensibility earnings per share the same quarter last year reflecting a decrease the net income of eleven percent net income during the quarter was also aided by to tax benefits a one hundred ninety six thousand state tax rebate related to twenty twenty and one hundred and thirty one thousand a rate reduction and twenty twenty one which was recognized in the march color adjusted even after the march quarter was nine point five million or forty seven cents on a deluded basis compared to ten point four million or fifty two cents on a deluded basis but the same quarter last year were fighting a decrease to adjusted either that or a point four percent adjusted either it i just even a per share add that certain noncash expenditures it would you start compensation interest income and expense income taxes depreciation and amortization again adjusting either and adjusted either per share or nine gap key measures used by management and are born to die you wait are operating performance generate future operating plans and they strategic decisions regarding the allocation of capital we will continue to disclose his financial measure in our future as that mentioned earlier in the earnings call adjusted even after the march quarter exceeded our expectations by been down only a point four percent to the fourth quarter ended march thirty first point where you to compare to been down thirty one percent the third quarter ended december thirty first twenty twenty one over the past six months we have seen double digit percentage increases in general and administrative expenses year over year due to the intentional and strategic incremental investments and both account and infrastructure we'll continue make you put the phone that move in the business to fuel and support future growth we also expect to see i continued investment capital expenditures to the tune of approximately five million dollars in fiscal two thousand twenty three of which four point two million is incremental to the business the or hundred eleven million in cash and cash equivalents and thirty two point five million an inventory with no debt as a march thirty first twenty twenty to the company continues to be committed to return on capital to our stockholders at such the board writers the quite a quarterly dividend a thirty cents per share on the country's commas thought there will be payable on may twenty seven twenty twenty two to shareholders a record at the close of business on may twentieth point when you to please note that the declaration of pain a future dividends is discretionary and will be subject to a determination by the board writers each quarter following his review of the company's financial performance now i like to hand the presentation back over to math
spk_0: thanks for us we embarked on a new jerky eight months ago when i joined the company in evaluating and planning for future we wanted first away exam and we set ourselves as a culture and company and then we delve into redefining our company's core purpose we look at where we excel today in the market and how he consistently saw her customers and the use that as the starting point for our we beginning process without work we identified a clear market me down a brand company focused on the to be trusted pet health experts at many ways we have served this function for a customer for over twenty six years if you think about it by prescription medication represents perhaps the most typical corner of the technique of it involves a collaboration with an authorization from veterinarian combined with dispensing controlled substances and comply with regulatory requirements etc it short yep hard when you contact that either online or over the phone or paying extra attention to your pet specific help me with important and customer specific details like monitoring for drug interaction strange accuracy their pets prescription we now have the capability to extend have demonstrated competent much further to that end i am
spk_2: pretty soon they'll argue that shit
spk_0: our vision every pet sitters to lead a long happy healthy life our mission at that aims to be the most trusted technical expert by providing incredible karen services that are affordable to the broadest with the pepper in order to realize this decision for me to execute on our mission through the strategy i would like to share with you next next slide we are now ready to talk about our long term strategy the sept degree of specific we have been hinting at a larger strategy of they started as a business just a month ago at that is million from being just a leading penn station retailer to a market leader expert have healthcare we have already been given permission by our customers of the law twenty six years to be a pet parents trusted partner and caring for the task at parents are getting man permission to do more and they want more we have taken important step towards executing on a long term strategy starting with the announcement that we made recently and the telemedicine space a strategic pillars that we will be executing on our nutrition medications well met and care with data about driving and being at the heart of our services a recent announcement was that there is the first building blocks of our care of for instance other ship with a fantastic program sell off at them to improve their pet care of your cost saving convenience and most importantly help compliance and their pet but we think we can do more in the future will be adding more capability and utility to this ship service being the trusted pet health experts also means
spk_2: we're not the same thing to all people like i said before anyone can sell daunted about it a far different proposition that being the trusted health experts and consistently solving our customers individual and you a pet health and wellness me
spk_0: onto the next flight so we can covered this recent partnership and announcement we're really excited about television we just a note a strategic new investment in partnership was quoted including an exciting said of innovation that with a truly revolutionary dispatcher when out the partnership with an early stage venture capital based company combat that there is a leading start up in the pet states abiding incredible services for both at and that a company had led by and hello tina season and and successful entrepreneurs we're excited to offer what we think is the most advanced telemedicine platform on the planet
spk_2: with this partnership at my the weeks ahead of the other paprika
spk_0: most importantly supports back and pet like never before now i like to provide an overview of the deal and deal structure i've been intimating for they started the company that we are big believers and telemedicine the field is one of the many sept pet will be taken to send her place as the go to expert pet health and fitness continues to have a strong balance sheet and we have indicated we intend to put some about one hundred million clock capital to work this deal with evidence about strategy can only make smart deals additional management's willing to commit quickly deterrent get them into a growth company here's an overview of our deal with that stuff at led to the exclusive at medication provider dah better and better in the exclusive tell them and provided a pet the five million dollar investment minority stake and after as or the steering be round ability to grow patna daughter ship share in the form of performance be warrant bit on specific for one objective mutually exclusive long term agree to work together to build new distribution channels and never before seen customers the technology and a convert integration provide a powerful combination that has never been introduced in the pet category we see a panoply of upsides in opportunities including earth mainstream watch we believe we are the first company to introduce pet element of the the ministry and acting over two million pet parent customers with over seventy thousand and veterinarian and attack and network load to live direct connect access to a telemedicine experience
spk_2: close to the loop between a pet parrot and he bet that at the prescription medication can be prescribed directly to a pet he cases without the need of an inhabited
spk_0: new revenue stream this partnership great new revenue streams wouldn't happen and the potential for new revenue stream and traffic driven from masters platform go to market acceleration unique investment partnership terms allow pets to accelerate or go to market or new strategy for example that little leverage the best your platform given by virtue virtual that particular embedded with our cat medication and retail platform directly into their platform climbing up the sales funnel we believe that operate our health wasn't able to acquire new customers and to create more incentive for pet subscribers new customers will be able to get into care whether this is tax or like video chat with your bag or any that provider of and exclusive that marketplace taxes on your smartphone or desktop twenty four seven veterinary i know you think that this partnership with a huge win for bet to we believe it's partnership allowed to provide attractive capability the additional revenue stream to our quarterback network and beyond and we offer plated remember bunch of new innovations that we're not ready to talk about that the deal in the short term should do the falling to the fact that business attracting customer adding more utility to or out a ship capability will help us attract new customers to a new and he says hello american and cathcart medical continental the this will greatly differentiated from the marketplace and allowed to not focus solely on pricing good driving more subscribers adding more totally like i mentioned above will also unable to increase acceleration a converting are you listening customers to subscription offering today that number thirty seven percent and we would like to see that never exceed fifty percent in the for year twenty twenty three driving more prescription business
spk_2: today the process of getting had optimization require a well honed back the to an obligation from the pet sounds such a million while authorization their high with the always and prescriptions due to the need to physically that with this technology customers will be able to connect to their that that are able to visit and subsequently had the
spk_0: description of the right additional revenue stream we will be connecting pet parents did that and we will be able to participate on a reminisce your basis for each paid virtual that appointment book on a picnic platform and addition at match will participate incremental iraq and o t c rather do that or bucks to the best your platform we have long thought that there was more we could do to support that at math class that your in that and that clinic the flexibility to work whenever and wherever they want only pet health care of not literally now be a finger a apartment i've talked about our network of over seventy thousand and back with a strategic asset we hope the turn that after into a partnership that helps them that he merely by allowing more productivity but the ability and or revenue for that partners we've been very intentional about continuing to build our that relationship we believe that this is a real game changer tibet and pick up a combined goal to make quality pet health care more acceptable affordable and available the pet parents and pad everywhere we believe pet helmet and will be as big a friend edited and human health care and we're excited about the possibility that it's or ship one lock for all of our shared stakeholders you see a great featuring having more health and wellness or this is your business and especially growing economies description base well beyond our current level we have a lot left to do a growing our customers is certainly a huge focus for the company
spk_2: i hope this level of detail hundred guarantee demonstrate are confident than a future that that
spk_3: alpha provide some insight into the associated that cause and activity and they are reflected or operating results this and they're prepared remarks operator we are now ready to take question
spk_4: thank you and if you'd like to register a question please post have one all by the for on your telephone keypad right now to hear a three tone to knowledge or request bush has been answered and you would like to withdraw your registration please post have one all by the three and as reminder to register for a question
spk_5: as the one all about a for on your telephone keypad right now the first questions from the line of aaron right with morgan stanley please proceed was your question
spk_6: hey thanks for taking my question here what are you seeing quarter to date in terms of did man trying to look for progression and a free and take season that you said with up to a somewhat slower start here but sure we anticipate a meaningful ball is here associated with pesticides in the current quarter how do you anticipate that plane out from what years
spk_7: thanks just you want to take that i can follow ah sure ah urinary down arm
spk_8: you as he mentioned during the quarter it we started our very strong obviously once we hit march ah we definitely side a drop in demand unlike will be found the previous march twenty twenty one ah yeah we've we've also had to
spk_7: swerve nation for manufacturers out to fulfill you take season ah so that's something i think all those said that had seen you in the past we've gone through ah me too lazy season or see season coming early in the elite in the earlier i would say that traditionally it six
spk_9: a period
spk_2: in the past it has extended i would feel it plays out in the cold quarter and ah but yeah we definitely saw that are a large ah and we'll see how it shakes out for rock
spk_0: for the jugular
spk_2: yeah they already got out any and fill it with knowing i'd add to that members
spk_0: library said it and you know we do have a concentration of play and check and hard one ah and so we're feeling quite confident because we're concerned even our january february and so unfortunately you can't control the weather ah may we do have category concentration of those areas so you know we're confident that we have a very long a boil
spk_5: turning base so when when the earth heats up winters are paid that you know we orders woah woah can get back to where we expect them
spk_2: okay and then to quit fox year the a given seventy initiatives around advertising and and stand for the quarter has we beat thank you to bad advertising send him to score twenty twenty three
spk_0: adding to we anticipate a step back from here as a percentage of sales in the coming quarters i guess help us find that and been in terms of how you're thinking about advertising stand him and in turn to the talent to medicine partnership to describe a little bit more on the financial contributions for you and in will this be material for you near term thanks
spk_2: yeah i'll take the last question first and then throw it over the bridge and began to telemedicine piece on it is a pretty exciting opportunity it since we are a prescription space is a core offering to consumers obviously we want to be in front of that trend of happened consumers literally at the at their fingertips have the ability to
spk_0: connect to a bad guy either on their desktop or on their mobile device and have prescription delivered to their to their doors ah we aren't really guiding to have this opportunity as it's really really do ah the dcp our relations which connects the consumer whether that are are relatively ah new as well we see the regulations listening over time and that we see more demand for consumers that we're not really guiding per se and we love to excite
spk_7: on the upside of his partnership develops partnerships are very hard to forecast that you know but we're very excited about it and we think this is the best game and the pet telemedicine status and baxter this is a seedling team that we've started to get to know very well they caught me highly recommended from the travel space and the marketplace is extremely well
spk_1: i had multiple times except as your building up marketplace and so will were highly confident that this is the right chief and product and business model for us to put
spk_7: or that around and jews are growing demand around on the the other problems bruce you want to take that will follow
spk_1: tourists worries you advertising so for the quarter advertising down about eight hundred thousand or about twenty percent were were last year
spk_0: and you know i would say that we were somewhat on target stay somewhat similar to where we stayed in the previous year ahmadi see the first start the season we prepared that or the due to that and our we expect to spend probably similar to what you saw last year but we expect to be more much more addition witherspoon editors area that we can read then better to do feel much better return obviously will take advantage of that will we see him yeah they want to get add that to a exactly right as we want to make sure we were spending money when there was the man because consumer good very bad in check and heart worm we decided not to accelerate that the other thing that we decide to do it introduces lp been attacked number in the two point five acts with you saw you know that could that could
spk_5: change over time as we start to in front of that we want to be very smart about how we scale or the man two point five may be on the higher
spk_4: could be lower than average just depends on the types of consumers that we're finding and where we think we there's a spot to invest so that gives you some direction where we're going by it should be
spk_0: you know higher than you see in the past are we going to be very performance oriented around that lp you know that the the two point five acts as a pretty efficient lp be the cat i think that might move around a little bit
spk_2: i thank you so much and the next question comes from the line of corey grady with jeffries please proceed with your class
spk_0: hi they're sticking my question i want to follow up on the new marketing strategies and partnerships the maybe as she has been a little more time talking about areas where you think kinds of validation and turns return in areas where you are continuing to pass hey thanks to the question and i'll have i'll jump on have one yeah again i want to remind you and you know this week after our discussions that much of what we've done city has been really building can have a basis a platform for growth as you can recall last quarter we had some inefficiencies we implement a new marking operations technology new marking partners and with the really testing a lot we've been testing new customer second center for younger more digital data of an epic the headline years we're seeing a lot of interest at health experts bad you either standing for something that more position that around your pets health vs kind of a broader play you know the everything store for a pet
spk_2: a really consumers are responding to that so we're gonna adjust or positioning are created around that game and we're certainly see some really positive signals around now and assets are the scale i think our media next was scale i think with the way we spend our dollars would definitely scale and more scale profitably know i would like to point out there's a fair
spk_0: thousand out of the three thousand russell three thousand companies are not profitable we can to grow profitably find that new customers and like i said on the earnings call really customers understand that pet mets fans or pet health care and i think that's really exciting proposition for for customers gotta to tell for and then i was wondering for my second question if you could quantify the sales and passion that way the late sixties them and then how did results for the quarter terms of sales competition now reordered new order how to back compared your expectations coming in the quarter i'll start members you want to finish
spk_10: sure
spk_7: ah yeah well as you sit on their earnings call january february we're trending ashley to where we wanted to we started to see the evening out of those cops it was a really important metric for us and i think we've been really transparent about that new customer growth has been an issue for the company for a while something that we're going to continue to work on and were actually pretty optimistic that that will that will improve and unfortunately march was just colder than anticipated so we're at we're anticipating returning customers to be more flat your bigger than than what you saw embrace you want to have any other color do that oh yeah i would say that
spk_1: yeah i did see all the the to surprise in march me we look at it the two largest caesar was really strong last year so are reorder numbers
spk_11: you know were much higher i would just say that you're you're to two totally different marches between early on client season versus a delayed season
spk_4: so you had those die dichotomy be fair but the identity real orders were probably out of the to we were dollars probably more
spk_12: war started from the delay season there now when we would expect to go you do more to got it thank you
spk_0: and as a reminder to register for a question that's the one followed by the for on your telephone keeper and the next question comes from the line of david maley with one one o two partners please proceed with your question i grew same it on you mentioned cause that the better deal is the first of many transactions should we expect transactions views of similar size or is likely that there might be something that's much bigger down the road
spk_2: and i guess if so would that be the feel that would lead you to eventually on peer the dividend i save you the question i'm i think is yours to parse that obviously the arctic the first part and then i'll take the second part
spk_0: the capital allocation side is we have a lotta cash and cash as really been put to use it so far as we fill out this puzzle pieces that i mentioned on the call around care for man wellness diet medication know we think we've pretty good medication and there's other areas where really need a finland him and what's driving that is with
spk_2: really our customers really want to have more products they want more basket from us they want more services that are aligned when have health and that that's driving really some of our thoughts around how to accelerate whether it's an investment emanate more investment partnership that you saw investors so we're going to continue to look
spk_0: get those types of opportunities you know things that we discussed and earnings was called like insurance certainly them lead to more of a partnership type of profile but certainly were open to emanate as well as asset prices are to settle down the economy starts to change or it could be some more buying opportunities there but we're open to filling in this puzzle pieces using cash and on the dividend side you know we have a commitment to the dividend one of the things that were looking at the management team that we discuss all the time as new customer growth it starts to get figured out may have better calculus we understand the types of recurring customer acquisition we can start driving that's probably the time that we'd start discussing how fast we wanted to the company but as you know we've struggled with new customer growth and so we've decided to support the dividends and we've also decided to also not grow the company unprofitable you know we're not decided to take this business down to earth you know a profitable and unprofitable business which a lot of ecommerce companies have decided to do
spk_12: oh and i you think that can be a problem and you start entering into some of these more difficult periods that we're starting to see now so in sure we're going to support the dividend were certainly having conversations with the boil the time
spk_2: but we're actually excited about going through investments your partnerships mm a candidate and to generate a lot of cash the there's an opportunity for us to do for for us to do both themselves the good news about the pet health spaces there's a lot of company that the hundred billion dollar space and there's a lot of companies that want to work with is like a said on the call there's
spk_4: not many pet prescription companies and a lot of folks want to work with us and it gives us an opportunity to generate terms like the sound the best deal that are probably look at one to see him somewhere else with the performance wanted circa one when an answer to work when we will decide that we can really replicas of was certainly the sky
spk_2: i felt the board until that there's a lot of opportunity for us to find in our data or semi organic growth through partnerships i hope that answers your question if not we i can keep them
spk_0: that's good that's that's good color really appreciate it thank you
spk_2: quick question thank you
spk_3: and are no further questions at this time i will not and the presentation back to the house
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