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OurPet's Company Reports Record 2010 Second Quarter Results
Net Revenue up 24% to $4.5 Million;
Net Income Increases 50% to $292,911
CONTACT:
OurPet’s, Company
Dr. Steven Tsengas
(440) 354-6500 (Ext. 11) |
INVESTOR RELATIONS:
Robert A. Lentz and Associates, Inc.
Robert Lentz
(614) 876-2000 |
FAIRPORT HARBOR, Ohio - July 27, 2010 - OurPet's Company (OTCBB: OPCO) (www.ourpets.com), a leading proprietary pet supply company today reported record financial results for its second quarter ended June 30, 2010.
Dr. Steven Tsengas, President and CEO, said, "We are pleased with our record 2010 second quarter and year-to-date results. They were achieved despite sluggish economic conditions and reflect increased penetration of our branded products in key segments of the market. These record results demonstrate the soundness of our multi-pronged growth strategy. We expect stronger performance during the second half of 2010 compared to the first six months of this year."
Dr. Tsengas, continued, "We are very encouraged by our growth opportunities and performance outlook for the remainder of 2010. The purchase of certain assets of Cosmic Pet Products, which is on schedule to close during the 2010 third quarter, and the planned launch of more than 100 new products this year position us more favorably for 2011."
"According to our most recent research Cosmic Catnip, Cosmic Pet's leading product, has twice the brand awareness as its next closest competitor, 2.5 times the past purchase behavior as its next closest competitor, and three times the quality rating as its next closest competitor. We anticipate that Cosmic Pet Products will accelerate our future sales and profit while also complementing the exciting organic growth opportunities we are pursuing."
2010 Second Quarter Results
Net revenue increased 24% to a record $4,477,863 for the 2010 second quarter from $3,605,332 for the same period in 2009. The Company's sales particularly benefited from the introduction of additional dog toys during the 2010 second quarter. More products will be introduced during the second half of 2010 consistent with the planned launch of more than 100 new products this year.
Gross profit rose 26% to $1,363,415 for the 2010 second quarter from $1,083,644 a year ago. Gross profit margin increased to 30.5% for the 2010 second quarter from 30.1% for the 2009 second quarter, despite price and cost pressures. Plans focused on tight control of costs continue to be implemented throughout the company to achieve increased efficiencies.
Income from operations increased 104% to $415,168 for the 2010 second quarter from $203,583 for the same period last year. This was attributable to the increase in net revenues and higher gross profit margin, which were partially offset by higher selling, general and administrative expenses related to product development and sales and marketing activities. The 2010 second quarter results also benefited from lower litigation expense.
The Company recognized $94,230 in income tax expense during the 2010 second quarter due to expected utilization of tax loss carry forwards that reduced net deferred tax assets.
Net income increased 50% to $292,911 or $.01 per diluted share for the 2010 second quarter from $194,933 or $0.01 per share for the 2009 second quarter. The weighted average number of common and equivalent shares outstanding increased approximately 19% to 19,051,602 for the 2010 second quarter compared to a year ago, principally due to the increase in the common stock price during the quarter ended June 30, 2010 as well as the issuance of convertible preferred stock earlier this year.
2010 First Half Results
Net revenue increased 16.1% to a record $8,121,796 for the six months ended June 30, 2010 from $6,995,711 for the same period a year ago. Sales for the first half of 2010 benefited from additional dog toys introduced this year.
Gross profit rose 20% to a record $2,509,814 for the six months ended June 30, 2010 from $2,083,712 for the same period last year. Gross profit margin increased 1.1 percentage points to 30.9% from the first six months of 2009 principally due to maintaining tight cost controls of operating overhead.
Income from operations increased 115% to a record $705,995 for the six months ended June 30, 2010 from $328,764 for the same period last year. This was attributable to the increase in net revenues and increased gross profit margin, which were partially offset by higher selling, general and administrative expenses related to product development, sales and marketing activities, and also benefited from lower litigation expense.
The Company recognized $93,003 in income tax expense for the six months ended June 30, 2010 due to expected utilization of tax loss carry forwards that reduced net deferred tax assets.
Net income increased 103% to a record $555,157 or $0.03 per diluted share for the six months ended June 30, 2010 from $273,543 or $0.02 per share for the same period last year. The weighted average number of common and equivalent shares outstanding increased approximately 14% to 18,263,100 for the six months ended June 30, 2010 compared to a year ago, principally due to the increase in the common stock price during the six months ended June 30, 2010, as well as the issuance of convertible preferred stock earlier this year.
About OurPet's Company
OurPet's designs, produces and markets a broad line of innovative, high-quality accessory and consumable pet products in the U.S. and overseas. Investors and customers may visit www.ourpets.com for more information about the Company and its products. The Company's Websites include: www.smartscoop.com, www.ecopurenaturals.com, www.playnsqueak.com, and www.flappydogtoys.com.
Certain of the matters set forth in this press release are forward-looking and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are the following: business conditions and growth in the industry; general economic conditions; addition or loss of significant customers; the loss of key personnel; product development; competition; risks of doing business abroad; foreign government regulations; fluctuations in foreign rates; rising costs for raw materials and the unavailability of sources of supply; the timing of orders booked; and the other risks that are described from time to time in OurPet's SEC reports.
OURPET'S COMPANY AND SUBSIDIARIES
CONSOLIDATED OPERATING RESULTS
For the Six Months Ended For the Quarter Ended
June 30, June 30,
----------------------- -----------------------
2010 2009 2010 2009
----------- ----------- ----------- -----------
Net revenue $ 8,121,796 $ 6,995,711 $ 4,477,863 $ 3,605,332
Cost of goods sold 5,611,982 4,911,999 3,114,448 2,521,688
----------- ----------- ----------- -----------
Gross profit on sales 2,509,814 2,083,712 1,363,415 1,083,644
Selling, general and
administrative expenses 1,747,861 1,509,274 928,097 798,700
Litigation expense 55,958 245,674 20,150 81,361
----------- ----------- ----------- -----------
Income (loss) from
operations 705,995 328,764 415,168 203,583
Other income and (expense),
net - 37,720 - 37,722
Interest expense 57,835 84,531 28,027 42,172
----------- ----------- ----------- -----------
Income before taxes 648,160 281,953 387,141 199,133
Income Tax expense 93,003 8,410 94,230 4,200
----------- ----------- ----------- -----------
Net Income $ 555,157 $ 273,543 $ 292,911 $ 194,933
=========== =========== =========== ===========
Basic and Diluted Net
Income (Loss) Per Common
Share After Dividend
Requirements For
Preferred Stock $ 0.03 $ 0.02 $ 0.01 $ 0.01
=========== =========== =========== ===========
Weighted average number of
common and equivalent
shares outstanding used to
calculate basic and
diluted earnings per share 18,263,100 15,984,780 19,051,602 16,005,237
=========== =========== =========== ===========
OURPET'S COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2010 2009
------------ ------------
ASSETS
Cash and equivalents $ 72,312 $ 84,555
Receivables, net 2,445,990 1,881,179
Inventories 3,478,681 2,984,035
Prepaid expenses 235,008 93,130
Deferred Tax Asset net 31,090 125,370
------------ ------------
Total current assets 6,263,081 5,168,269
Property and equipment, net 2,037,141 1,954,805
Other 807,558 475,668
------------ ------------
Total assets $ 9,107,780 $ 7,598,742
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ 1,445,000 $ 949,000
Current maturities of long-term debt 550,588 956,589
Accounts payable 1,493,983 1,046,101
Accrued expenses 335,215 417,199
------------ ------------
Total current liabilities 3,824,786 3,368,889
Long-term debt 855,850 1,254,080
Stockholders' Equity 4,427,144 2,975,773
------------ ------------
Total liabilities and stockholders' equity $ 9,107,780 $ 7,598,742
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