PetMed Express settles legal battle with Texas
POMPANO BEACH, FLA. — PetMed Express has settled with the Texas State Board of Pharmacy and Texas State Board of Veterinary Medical Examiners for $50,000 plus $9,000 in legal expenses and three years probation.
Although the company admits no wrongdoing, the settlement ends charges by the state that PetMed Express illegally dispensed veterinary drugs without valid prescriptions from practitioners with client-patient relationships. The lawsuit was filed in 2002 in Travis County, Texas, to protect public health, officials say. State officials allege "multiple violations" of Texas pharmacy laws, court documents show. The company's now-defunct "alternate veterinarian" program, in which an in-house DVM wrote prescriptions for off-site animals, was the source of contention and is no longer in place, says Lee Mathews, general counsel for the Texas veterinary board.
"I think they've cleaned up their act. We haven't had any recent problems," he says.Financial health
The company also reports no problems when it comes to finances. Founded in 1996, company sales of prescription and over-the-counter pet products brought in $50.7 million for this year's first fiscal quarter ending June 30, compared to $43.6 million during the same time in 2005. The average retail order was $84 for the quarter with more than 50 percent comprised of flea, tick and heartworm medication requests. Those drugs are garnered through "wholesalers and distributors," company CEO Menderes Akdag says.
That information comes from PetMed Express' most recent Security and Exchange Commission filings. The documents show roughly 217,000 new customers for PetMed Express during the first fiscal quarter of 2006, and 59 percent of all sales are generated via the Internet.
PetMed Express is traded on the NASDAQ. At presstime, the company's stock price closed at $11.20 a share, down from its 52-week high of $20.20.