FAIRPORT HARBOR, OH--(Marketwire - March 16, 2011) - OurPet's Company (
OTCBB:
OPCO)
(
www.ourpets.com), a leading proprietary pet supply company, today reported
record financial results for the fourth quarter and for the year ended
December 31, 2010. These results include those of Cosmic Pet Products
("Cosmic Pet") which sold certain inventory, equipment and product rights
to OurPet's effective July 29, 2010.
Dr. Steven Tsengas, President and CEO, remarked, "We are pleased with the
record fourth quarter net revenue and net income which reflect solid
organic growth and the full integration of Cosmic Pet. During the quarter
we completed the installation of an enterprise resource planning ("ERP")
system at Cosmic Pet, enhanced its operations, and significantly improved
customer service and on-time delivery. We ended 2010 with sales momentum
and were better positioned to meet the increased demand for our products."
Since the Cosmic Pet transaction in late-July 2010, OurPet's has upgraded
and expanded its line of branded catnip toys and accessory products. These
exciting products, along with the expanded Go!CatGo!™ opening price
point cat toys and Play-N-Squeak® upscale cat toys are being featured
this week at the Global Pet Exposition in Orlando, Florida. It is one of
the largest and most heavily attended pet expositions in the world. The
Company is introducing more than 150 new products at this exposition,
highlighted by the re-launch of the new and highly improved SmartScoop®
automatic cat litter box.
2010 Fourth Quarter Results
Net revenue increased 25% to a record $4,690,500 for the 2010 fourth
quarter, from $3,741,050 for the same period in 2009. The sales
comparison particularly benefited from higher sales of Play-N-Squeak cat
toy products, Durapet® stainless steel bonded rubber bowls and Cosmic Pet
products.
Gross profit increased 11% to $1,244,738 for the 2010 fourth quarter from
$1,120,524 a year ago. Gross profit margin declined to 26.5% for the 2010
fourth quarter from 30.0% for the same period last year. This was
primarily due to higher manufacturing costs, Cosmic Pet transition costs,
installation activities related to implementation of the new ERP system and
operational improvements, including infrastructure and personnel, to
prepare OurPet's to meet expected future customer demands.
The final phase of the Company's ERP system is scheduled to be installed
during April 2011. This important milestone is expected to result in
improved supply chain management with the recent addition of highly skilled
personnel, better inventory controls, improved customer service and overall
operational efficiencies throughout the Company.
Income from operations doubled to $455,329 for the 2010 fourth quarter from
$225,730 for the same period last year. Included in the 2010 fourth
quarter income from operations is a one-time gain of $240,623 resulting
from an independent third party valuation of certain Cosmic Pet tangible
assets.
The Company updated its estimate of tax loss carryforwards including
utilization and recognized a deferred tax benefit of $5,451 during the 2010
fourth quarter resulting in net income tax expense of $16,068. The Company
recognized a net tax benefit of $137,604 for the 2009 fourth quarter,
primarily from the recognition of a deferred tax asset.
Net income increased 24% to $396,533 for the 2010 fourth quarter from
$319,136 for the same period in 2009. Fully diluted earnings per share
were 2 cents for both periods despite an 18% increase in the weighted
average number of fully diluted common and equivalent shares outstanding
compared to a year ago. This increase was principally due to the higher
common stock price for the quarter ended December 31, 2010.
Bank Financing
The Company recently increased its Line of Credit to support working
capital needs resulting from its current and anticipated growth. During
the 2010 fourth quarter the Company's Line of Credit was increased by
$300,000. Subsequent to December 31, 2010, it was increased further by
$450,000 to a total of $3,250,000.
2010 Twelve Month Results
Net revenue increased 20% to a record $17,091,741 for the year ended
December 31, 2010, from $14,251,786 for the same period a year ago.
Gross Profit increased 12% to $4,799,482 for the twelve month ended
December 31, 2010 from $4,280,090 for the prior year. Gross profit margin
was 28.1% for the year ended December 31, 2010 compared to 30.0% for the
year 2009. This decrease was primarily due to costs related to the
integration of the Cosmic Pet operations as well as higher than anticipated
warehouse freight, labor and overhead costs.
Income from operations increased 54% to $1,222,250 for the year 2010 from
$791,522 for the prior year. The 2010 results include a one-time gain of
$240,623 from the increased valuation of certain Cosmic Pet intangible
assets.
The Company recognized $99,555 of income tax expense for the year 2010 due
to updated estimates of its tax liabilities and loss carryforwards
utilization compared to a net tax benefit of $124,994 recognized for the
same period a year ago.
Net income increased 27% to $986,534 for the year ended December 31, 2010
compared to $775,767 for the same period last year. Fully diluted earnings
per share were 5 cents for both periods despite a 23% increase in the
weighted average number of common and equivalent shares outstanding at
December 31, 2010 compared to the same date in 2009. This increase was
principally due to the higher price of the common stock price during the
year, as well as the issuance of convertible preferred stock during the
2010 first quarter.
Stockholders' equity was $5,033,248 at December 31, 2010, an increase of
69% compared to $2,975,773 on the same date in 2009.
Looking to the Future
Dr. Tsengas commented, "We are optimistic for 2011 and beyond. With the
SmartScoop litigation behind us, the integration of Cosmic Pet completed,
and a pipeline full of new, exciting products we are committed to fully
pursuing our growth formula, including product innovation, leading brand
development, aggressive marketing and sales and strategic acquisitions/key
partnerships in order to achieve superior revenue and profit results for
our shareholders."
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,
www.clipnosis.com,
www.hideperchandgo.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 Years Ended For the Quarter Ended
December 31, December 31,
------------------------- ------------------------
2010 2009 2010 2009
----------- ------------ ----------- -----------
Net revenue $17,091,741 $ 14,251,786 $ 4,690,500 $ 3,741,050
Cost of goods sold 12,292,259 9,971,696 3,445,762 2,620,526
----------- ------------ ----------- -----------
Gross profit on
sales 4,799,482 4,280,090 1,244,738 1,120,524
Selling, general and
administrative
expenses 3,704,994 3,114,960 1,025,182 830,522
Litigation expense 112,861 373,608 4,850 64,272
Gain on Asset Purchase 240,623 - 240,623 -
----------- ------------ ----------- -----------
Income (loss) from
operations 1,222,250 791,522 455,329 225,730
Other income and
(expense), net 1 38,153 (3) (74)
Interest expense 136,162 178,902 42,725 44,124
----------- ------------ ----------- -----------
Income before taxes 1,086,089 650,773 412,601 181,532
Income Tax (expense)
benefit (99,555) 124,994 (16,068) 137,604
----------- ------------ ----------- -----------
Net Income $ 986,534 $ 775,767 $ 396,533 $ 319,136
=========== ============ =========== ===========
Basic and Diluted Net
Income (Loss) Per
Common Share After
Dividend Requirements
For Preferred Stock $ 0.05 $ 0.05 $ 0.02 $ 0.02
=========== ============ =========== ===========
Weighted average
number of common and
equivalent shares
outstanding used to
calculate basic and
diluted earnings per
share 19,102,046 15,523,288 19,865,247 16,897,046
=========== ============ =========== ===========
OURPET'S COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
2010 2009
------------ ------------
ASSETS
Cash and equivalents $ 78,673 $ 84,555
Receivables, net 2,657,865 1,881,179
Inventories 5,576,129 2,984,035
Prepaid expenses 210,340 93,130
Deferred Tax Asset net 55,116 125,370
------------ ------------
Total current assets 8,578,123 5,168,269
Property and equipment, net 2,260,873 1,954,805
Intangible Assets 461,000 -
Other assets 536,075 475,668
------------ ------------
Total assets $ 11,836,071 $ 7,598,742
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ 2,628,000 $ 949,000
Current maturities of long-term debt 946,216 956,589
Accounts payable 1,926,499 1,046,101
Accrued expenses 504,504 417,199
------------ ------------
Total current liabilities 6,005,219 3,368,889
Long-term debt 797,604 1,254,080
Stockholders' Equity 5,033,248 2,975,773
------------ ------------
Total liabilities and stockholders'
equity $ 11,836,071 $ 7,598,742
============ ============
Contact Information: CONTACT:
OurPet's Company
Dr. Steven Tsengas
CEO
(440) 354-6500 (Ext. 111)
INVESTOR RELATIONS:
Robert A. Lentz and Associates, Inc.
Robert Lentz
(614) 876-2000