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FAIRPORT HARBOR, Ohio, August 4, 2003
-- OurPet's Company (OTCBB:OPCO) today
reported financial results for its
second quarter and six months ended June
30, 2003. Net sales for the second
quarter were $1,152,000, an increase of
13% compared to $1,023,000 for the prior
year second quarter. Gross profit as a
percent of net sales increased to 23% as
compared to 22% in the prior year. The
loss from operations was $81,000
compared to a loss from operations for
the prior year of $126,000 for an
improvement of $45,000 or 35%. Net loss
for the quarter was $148,000 compared to
a net loss for the prior year of
$156,000 for an improvement of $8,000.
The Net Loss for second quarter 2003
includes a one-time, special charge of
$40,183 related to the liquidation of
excess inventory. The second quarter
2002 results do not reflect any such
special charges.
For the first half of 2003 net sales
were $2,428,000, an increase of 24%
compared to $1,959,000 for the prior
year first half. Gross profit as a
percent of net sales increased to 25% as
compared to 21% in the prior year. The
loss from operations for the first half
decreased to $45,000 from a loss of
$217,000 for an improvement of $172,000
or 79%. Net loss for the first half was
$138,000 compared to a net loss for the
prior year of $274,000 for an
improvement of $136,000. As reported
previously, the first half 2003 results
include a special, one-time charge of
$40,183 related to the liquidation of
excess inventory.
The following table summarizes
financial highlights for the Second
Quarter and Six Months:
Second Quarter Six Months
-------------- ----------
2003 2002 Change 2003 2002 Change
---- ---- ------ ---- ---- ------
Net Sales $1,152,188 $1,022,648 +13% $2,428,471 $1,958,515 +24%
Gross
Profit 268,484 225,447 +19% 596,932 420,497 +42%
Loss From
Operations (81,369) (125,738) +35% (45,034) (217,312) +79%
Net Loss (148,263) (155,690) +5% (138,124) (273,684) +50%
Loss Per
Share(a) (0.02) (0.02) -- (0.02) (0.03) +33%
(a) Basic and diluted net loss per common share after dividend
requirements for preferred stock.
Dr. Steven Tsengas, President and CEO
of OurPet's, stated, "In spite of soft
general economic and consumer spending
conditions, we were able to increase
sales through expanding our product and
customer base as well as through
increased promotional efforts. Our
customers have enthusiastically accepted
our new products such as OurCat's Choice
Premium Cat Litter, Gourmet Gravy,
Gourmet Spray and Butterfly Ball. We
plan to continue such marketing efforts
and new product introductions in the
future."
Dr. Tsengas added "During the
quarter, OurPet's achieved increases in
profit margins by limiting the increase
in cost of goods sold and selling,
general and administrative expenses.
Based upon the results for the six
months, OurPet's expects to meet its
previously announced guidance projection
for FY 2003 of $7,200,000 in gross
revenues and $388,000 in pretax income."
OurPet's recently signed a marketing
agreement with Bonybone S.A. de C.V. of
Mexico to market the proprietary Gourmet
Rawhide Bone in the United States and
Canada on an exclusive basis and on a
non-exclusive basis in the rest of the
world. "We are very excited about this
innovative, healthy product since it is
primarily made of rawhide protein
instead of starch and meat byproducts,
helps clean and exercise the teeth and
gums, is safe and long-lasting and very
palatable," said Dr. Tsengas. The
Gourmet Rawhide Bone, along with the
Gourmet Spray, Gravy, IcePudding and
Supplements, will significantly enhance
OurPet's offering of healthy consumable
products. Approximately 90 percent of
dog owners buy rawhide products for
their dogs (see note). "We are very
pleased to be associated with OurPet's
and its strong international sales and
marketing capability," said Senor Angel
Chahin Maluly, Director of Bonybone
Operations.
Ms Heather L. Novak has joined
OurPet's as Marketing Vice President.
Novak received a BA in Chemistry and
Psychology from Miami University,
Oxford, OH and an MBA from Case Western
Reserve University, Cleveland, OH. Prior
to joining OurPet's, Novak made
significant contributions at The
Sherwin-Williams Company as product
development chemist, marketing manager
and product manager. "Since my father is
a veterinarian, I have been around pets
all my life -- I love them," said Novak.
"We are very pleased to have someone
with Novak's talents and passion for
pets on our team," commented Dr. Tsengas.
OurPet's designs, produces and
markets in the USA and overseas a broad
line of innovative, high-quality
accessory and consumable pet products.
Investors and customers may visit
www.ourpets.com for more information
about the company and its products. The
American Pet Products Manufacturers'
Association (APPMA) (see note) survey
estimates the U.S. market for pet
products at $31 billion, with a
long-term annual growth rate of 8-15
percent. The APPMA estimates that 64
million U.S. households report owing a
pet, including 65 million dogs, 77.7
million cats and 17.3 million birds.
Note: APPMA, 2002/2003 National Pet
Owners Survey
This news release contains
forward-looking statements within the
meaning of the Private Securities
Litigation Reform Act of 1995. These
statements contain the words "projects,"
"anticipates," "believes," "expects,"
"intends," "will," "may" and similar
words and expressions. Each such
statement is subject to uncertainties,
risks and other factors that could cause
actual results or performance to differ
materially from the results or
performance expressed in or implied by
such statements. The forward-looking
statements in this news release that
contain projections of the company's
expected financial performance and other
projections regarding future performance
are inherently subject to change, given
the nature of projections, and the
company's actual performance may be
better or worse than projected.
Uncertainties, risks and other factors
that may cause actual results or
performance to differ materially from
any results or performance expressed or
implied by forward-looking statements in
this news release include: (1) the
company's ability to manage its
operating expenses and realize operating
efficiencies, (2) the company's ability
to maintain and grow its sales with
existing and new customers, or (3) the
company's ability to secure access to
sufficient capital on favorable terms to
manage and grow its business. A
discussion of other risk factors that
may cause actual results to differ from
the results expressed in or implied by
these forward-looking statements can be
found in the company's periodic filings
with the SEC. The company disclaims any
duty to provide updates to the
forward-looking statements and
projections made in this news release.
OURPET'S COMPANY AND SUBSIDIARIES
CONSOLIDATED OPERATING RESULTS
(unaudited)
For the Six Months Ended For the Quarter Ended
June 30, June 30,
2003 2002 2003 2002
Net sales $2,428,471 $1,958,515 $1,152,188 $1,022,648
Less: Costs and
expenses
Cost of goods
sold 1,831,539 1,538,018 883,704 797,201
Selling, general
and
administrative
expenses 641,966 349,853 637,809 351,185
Interest and
other income
and expense 40,178 (1,321) 40,181 (17)
Interest expense 52,912 57,693 26,713 29,969
---------- ---------- ---------- ----------
Net loss $ (138,124) $ (273,684) $(148,263) $ (155,690)
========== ========== ========== ==========
Basic and Diluted
Loss Per Common
Share
After Dividend
Requirements For
Preferred Stock $ (0.02) $ (0.03) $ (0.02) $ (0.02)
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2003 2002
(unaudited) (audited)
ASSETS
Cash and equivalents $ 75,117 $ 36,434
Receivables, net 591,321 660,214
Inventories 1,644,255 1,702,847
Prepaid expenses 152,334 30,006
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Total current assets 2,463,027 2,429,501
Property and equipment, net 831,547 806,054
Other 140,403 136,124
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Total assets $3,434,977 $3,371,679
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LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings
and current maturities
of long-term debt $1,338,764 $1,410,399
Accounts payable 825,863 607,459
Accrued expenses 168,217 139,438
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Total current liabilities 2,332,844 2,157,296
Long-term debt 179,868 153,994
Stockholders' equity 922,265 1,060,389
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Total liabilities and
stockholders' equity $3,434,977 $3,371,679
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CONTACT: OurPet's Company
Dr. Steven Tsengas, CEO
John G. Murchie, VP/Treasurer
(440) 354-6500
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