Welcome to the PetMed Express Incorporated, doing business as 1-800-PetMeds conference call to review the financial results for the third fiscal quarter ended December 31st, 2019. At the request of the company, this conference call is being recorded. Founded in 1996, 1-800-PetMeds is America's largest pet pharmacy, delivering prescription and non-prescription pet medications and other health products for dogs and cats direct to the consumer. 1-800-PetMeds markets its products through national advertising campaigns, which direct consumers to order by phone or on the internet, and aim to increase the recognition of the PetMeds family of brand names. 1-800-PetMeds provides an attractive alternative for providing pet medications in terms of convenience, price, ease of ordering, and rapid home delivery. At this time, I would like to turn the call over to the company's Chief Financial Officer, Mr. Bruce S. Rosenbloom. You may begin.
Thank you. Good morning. I'd like to welcome everybody here today. Before I turn the call over to Menderes Akdag, our President and Chief Executive Officer, I'd like to remind everyone that the first portion of this conference call will be listen only until the question and answer session, which will be later in the call. Also, certain information that will be included in this press conference may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 or the Securities and Exchange Commission 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 future results may vary significantly based on a number of factors that may cause the actual results or events to be materially different from future results, performance, or achievements expressed or implied by these statements. We have identified various risk factors associated with our operations in our most recent annual report and other filings with the Securities and Exchange Commission. Now let me introduce today's speaker, Menderes Akdag, President and Chief Executive Officer of 1-800-PetMeds. Mendo.
Thank you, Bruce. Welcome, everyone, and thank you for joining us. Today, we will review the highlights of our financial results. We'll compare our third fiscal quarter ended on December 31st, 2019, to last year's quarter ended on December 31st, 2018. For the third fiscal quarter ended on December 31st, 2019, our sales were relatively flat at $59.9 million compared to $60.1 million for the same period the prior year. The average order value for the quarter was approximately $85 compared to $84 for the same quarter the prior year. For the third fiscal quarter, net income was $6.8 million, or $0.34 diluted per share, compared to $7.8 million or $0.38 diluted per share for the same quarter the prior year, a decrease to diluted earnings per share of 10%. The decrease to net income for the quarter was mainly due to lower gross profit margins.
Net income margins for the quarter sequentially improved by 180 basis points compared to the September quarter and 470 basis points compared to the June quarter. Reorder sales increased by 1% to $53.8 million for the quarter, compared to reorder sales of $53.3 million for the same quarter the prior year. New order sales decreased by 9.9% to $6.1 million for the quarter, compared to $6.8 million for the same period the prior year. Increased online competition negatively impacted our new order sales. We acquired approximately 76,000 new customers in our third fiscal quarter, compared to 81,000 for the same period the prior year. The seasonality in our business is due to the proportion of flea, tick, and heartworm medications in our product mix. Spring and summer are considered peak season, with fall and winter being the off-season.
For the third fiscal quarter, our gross profit as a percent of sales was 29.5%, compared to 32.3% for the same period a year ago. Manufacturers' minimum advertised price policies are bringing a general pricing discipline into the market. As a result, our gross profit margins for the quarter improved sequentially by 90 basis points compared to the September quarter and 220 basis points compared to the June quarter. General and administrative expenses for the quarter increased by $247,000, mainly due to increased payroll. For the quarter, our advertising expenses were $3.2 million compared to $3.6 million for the same quarter the prior year, a decrease of about 12%. Advertising cost to acquire a customer for the quarter was $42 compared to $45 for the same quarter the prior year.
We had $92.4 million in cash and cash equivalents and $24.2 million in inventory, with no debt as of December 31st, 2019. Net cash from operations for the nine months was $21.6 million compared to $32 million for the nine months last year. The decrease was mainly due to decreases in net income. This ends the financial review. Operator, we are ready to take questions. Operator, we are ready to take questions.
Yes, sir. We'll now begin the question-and-answer session. If you'd like to ask a question, please press star followed by the number one. Please unmute your phone and record your first name and company. That's record your first name and last name and company clearly when prompted. To withdraw your request, press star two. Once again, if you'd like to ask a question, press star one and record your first and last name and company name. Thank you. Our first question is from Kevin Hetchler from Ascendiant Capital. Your line is open.
Good morning. Hey, Mendo.
Good morning.
I guess starting off with MAP pricing, obviously having a slightly positive impact on margins. Can you remind us, do you have all of the major manufacturers under MAP now, or is there still one left?
They are all under MAP, yes, all major manufacturers.
Okay, great. Can you give us an update? I think you guys had talked about switching over, adding on a new e-commerce platform by year-end. Did that get done? If so, Bruce, can you remind us what the cost outlay was?
It did not get done yet. We are anticipating it's going to happen in February, the cost is about $5 million.
Okay, great. With the presidential election coming up this year, can you give us some color on your thoughts for advertising? Are you going to stay with online advertising this year, Mendo, or are you going to add on a little bit of TV to start trying on the ad spend this year?
Majority of our advertising is going to be online. If we do any TV, it's going to be minimal, it's likely going to be in spring and summer.
Got you. Last question for me. Clearly, there's still competition, but like you said, it's a little bit more rationalized with MAP pricing. Just wondering if you have any thoughts in terms of how fast the online or e-commerce channel's growing and how we should gauge your share of that growth.
It would be a guess. I'm not going to guess. I can tell you that veterinarians still have the majority of the market share on prescription meds, and we anticipate a continuing market share shift to direct-to-consumer online channel.
Great. Thanks, guys.
Thank you. Our next question is from Anthony Lebiedzinski from Sidoti & Company. Your line is open.
Thank you, and good morning, and thank you for taking the question. I guess first, I just wanted to confirm that so as far as the increase in AOV and the gross margin sequentially, is that entirely you think due to MAP pricing, or is there anything else that perhaps drove those increases?
Yeah. MAP prices helped with that, yes.
Got it. Okay. Can you remind us as far as the e-commerce platform, what are the main things that you are looking to achieve through the improvement that you're looking to do with the e-commerce platform?
The objective is to improve user experience. It has AI capabilities, so we want to do more personalization, easier views, speed.
Okay, got it. Okay, perfect. As far as your comment about optimizing your marketing, I know, Mendo, you just mentioned about doing pretty much all online advertising. Anything else that we should think about as far as advertising spending, marketing efficiencies?
We're working on optimizing our marketing, so it was our off-peak season. We'll be more aggressive advertising during peak season.
All right. This is starting in the June quarter.
It starts in March. Yes.
Okay. Lastly, cash position continues to be pretty healthy on the balance sheet. How are you guys thinking about the longer-term view, your view for dividends versus buybacks?
Currently, we're paying as you know dividends, $0.27 per quarter. We do look at acquisition opportunities during our normal course of business.
Okay. All right. Thank you very much. Best of luck.
Thank you.
Thank you. Once again, if you'd like to ask a question, press star one. Please record your name and company clearly when prompted. To withdraw your question, you press star two. No questions at this time. Let me now hand the call back to our speaker for closing remarks.
Thank you. In 2020, we'll focus on optimizing our marketing in this more competitive environment and being more efficient with our advertising spending. In addition, we'll continue investing in our e-commerce platform to better service our customers. This wraps up today's conference call. Thank you for joining us. Operator, this ends the conference call.
Thank you. Thank you for participating. You may now disconnect.