PetMed Express, Inc.

Good afternoon, everyone, and thank you for joining the PetMed Express Third Quarter Preliminary Financial Results Conference Call. My name is Shamali, the operator for today's call. I would now like to pass the conference over to our host, Mr. Brian Preveno, Investor Relations.

Thank you, Operator, and I'd like to welcome everybody here today to the PetMed Express Fiscal Third Quarter Preliminary Financial Results Conference Call. 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. 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 of the operations or business or financial condition of pet meds. 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 Exchange Commission. Now, let me introduce our CEO and President, Matt Hewlett. Matt?

Thank you, Brian. Thank you to everyone for making the time today to participate in today's conference call. Today's call will follow a slightly different format than recent calls. As many of today's listeners likely saw, this afternoon we filed an 8K and issued a press release announcing a planned restatement of certain previously issued financial statements due to errors in accounting for certain tax-related matters. Please reference those documents for additional information regarding those factors that may affect the restatement of our financial statements. Additionally, due to the administrative burden and the process required for a multi-year restatement, our 10-Q for fiscal year 2024's third quarter ended December 31st, 2023 will be delayed. The restatement and the delay in this quarter's 10-Q filing are due to errors in the accounting treatment related to certain previously reported tax-related items. As you recall, our Chief Financial Officer, Christine Chambers, first discussed the identification of the need for a sales tax accrual in the second fiscal quarter of last year and provided an update on the fiscal fourth quarter call. The restatement pertains in part to the recording of this sales tax accrual. I want to stress a few things. Number one, We are working together with all of our relevant partners and consultants to finalize the accounting treatment and complete the restatement as quickly as possible. Number two, the restatement has no impact on our day-to-day business operations or on our strategy. And number three, the restatement is a matter of accounting for tax-related items, and there is no impact on our current cash balance. Christine will be discussing this accounting issue in more detail during her portion of the call. We would like to spend the remainder of the time on today's call discussing progress made in the business and sharing some high-level specifics from the fiscal third quarter. For the quarter ending December 31, 2023, PetMeds delivered sales of $65.3 million compared to sales of $58.9 million in the prior year, an increase of 11% year-over-year, including from our recent acquisition of PetCareX. We reported a gross margin of 27.4%, which was in line with our expectations. This reflects a balance between promotional activities intended to introduce food to our customers and a regimented focus on maintaining our historical gross margin as an overall business. Returning customers accounted for sales of 57.7 million during the quarter. reflecting a growth of 8% year-over-year related to the addition of the PetCareRx business. In terms of our initiatives to offer more products and provide more value to our existing pet parent customers, we've focused intensely on raising awareness about our food catalog at both the category and brand levels. Additionally, we are enhancing our cross-sell initiatives through our email CRM, call center, and websites. Along those lines, we are excited to announce the addition of another major food brand of pet meds in the coming months. We have entered into a partnership with Hills Pet Nutrition and are launching Hills Science Diet this quarter, a premium category known for its tailor-made nutrition that promotes healthy skin, coat, and immune system in pets. Hills Science Diet will start to roll out as early as next month. Premium food brands are important relationships for pet meds, And this expansion was accelerated in part due to our acquisition of PetCareRx. Prescription and premium food are important categories for pet meds, as our pet parents are very health and wellness focused. Simply put, our customers want premium food and prescription food options, and we'll be leaning in heavily on this brand, as well as new ones, as we continue to go to market in the pet food category. We believe these additional food options provide us the ability to interact with our customers more often, increase the average order size, and enhance the lifetime value of each customer. Let's turn to our operational advancements and initiatives. We have talked about our key performance indicators for the transformation of the business, successfully providing more product offerings to our current customers, increasing our recurring customer base, and driving recurring revenues. A key business model driver for the PetMeds business is to expand the number and types of products our core prescription customer base buys from us or will buy from us on a recurring basis. We believe that our new auto-ship platform, which was recently launched, will help facilitate the long-term compounded benefit and expanded customer loyalty by delivering exceptional value. This new auto-ship and save capability enhances our current capabilities to include more pet parent control over their ordering experience, including activities like controlling the subscription duration, pausing or accelerating a subscription, and adding additional products. We have also integrated our VetLive functionality, which connects pet parents to licensed veterinarians over a digital connection 24-7, which is now available for all of our auto-ship and save customers on a complimentary basis. We believe the more products a pet parent uses on our auto-ship program, the more loyal they become. Our auto-ship and save and Pet Plus programs grew to 52% of our revenue during this last fiscal quarter, a substantial increase from 42% of revenue for the same time last year. I will now turn the call over to our CFO, Christine Chambers, to provide an overview of the quarter's financials.