- Sales and Profit Margin Improve
- Agreement with American Colloid Company
- Benjamin D. Suarez elected to Board of Directors
FAIRPORT HARBOR, Ohio, Nov. 3, 2003
-- OurPet's Company (OTCBB:OPCO) today
reported financial results for its third
quarter and nine months ended September
30, 2003. Net sales for the third
quarter were $1,371,000, an increase of
4% compared to $1,312,000 for the prior
year third quarter. Gross profit for the
quarter was $351,000, an increase of 2%
compared to $345,000 for the prior year
quarter. Gross profit as a percent of
net sales was 26% for the third quarter
in both years. The loss from operations
was $38,000 compared to a loss from
operation for the prior year of $20,000
for an increase in loss of $18,000. Net
loss for the quarter was $66,000
compared to a net loss for the prior
year of $49,000 for an increase in loss
of $17,000.
For the nine months of 2003 net sales
were $3,800,000, an increase of 16%
compared to $3,271,000 for the prior
year nine months. Gross profit for the
nine months was $948,000, an increase of
24% compared to $765,000 for the prior
year nine months. Gross profit as a
percent of nets sales increased to 25%
as compared to 23% in the prior year.
The loss from operations for the nine
months decreased to $84,000 from a loss
of $237,000 for an improvement of
$153,000 or 65%. Net loss for the nine
months was $204,000 compared to a net
loss for the prior year of $323,000 for
an improvement of $119,000. As
previously reported, the nine months
2003 results include a special, one time
charge of $40,183 related to the
liquidation of excess inventory. Due to
the third quarter results, OurPet's does
not expect to meet its previously
released guidance projections for FY
2003.
The following table summarized
financial highlights for the Third
Quarter:
Third Quarter
----------------------------------------------
2003 2002 Change
--------------- -------------- ---------------
Net Sales $1,371,112 $1,312,249 +4%
Gross Profit 351,402 344,820 +2%
Loss From Operations (38,499) (19,518) -97%
Net Loss (65,914) (49,245) -34%
Loss Per Share (a) (0.00) (0.00) -
Nine Months
----------------------------------------------
2003 2002 Change
--------------- -------------- ---------------
Net Sales $3,799,633 $3,270,764 +16%
Gross Profit 948,334 765,317 +24%
Loss From Operations (83,533) (236,830) +65%
Net Loss (204,038) (322,929) +37%
Loss Per Share (a) (0.02) (0.03) +33%
(a) Basic and diluted net income (loss) per common share after
dividend requirements for preferred stock.
Dr. Steven Tsengas, President and CEO
of OurPet's stated, "Third quarter
results were disappointing and do not
reflect the true potential of our
Company. We feel that the recent
addition of a Vice President of
Marketing, sales department
restructuring, significant investment in
launching OurCat's Choice Premium
Clumping Cat Litter and the continuous
introduction of exciting new products
should positively impact results in the
future." Dr. Tsengas further commented
that "such new products as the Gourmet
Rawhide bones, Durapets Bowls and Bubble
Mouse were well received at the Backer
Christmas Pet Show and shipments are
scheduled to begin in the fourth
quarter."
OurPet's entered into a strategic
marketing agreement to have American
Colloid Company (NYSE:ACO) sell and
distribute its popular OurCat's Choice
Premium Clumping Cat Litter in the
specialty pet market within the pet
supply industry beginning October 1,
2003. "We are very pleased to be
associated with American Colloid
Company," said Dr. Tsengas. "Their
expertise in sales and distribution will
help take OurCat's Choice to the next
level, enabling us to expand the market
for this innovative product." "We have
received many requests for a corn-based
cat litter in recent years," said John
B. Renick, National Sales Manager of the
American Colloid Company. "In our
opinion, OurCat's Choice is the best
product available to our customers. We
look forward to supplying this high
quality, innovative product." OurCat's
Choice patent pending natural
formulation provides outstanding odor
control, ease of cleaning, safety and
minimum tracking.
Mr. Benjamin D. Suarez,
Chairman/founder of Suarez Corporation
Industries, has been elected to the
Board of Directors of OurPet's Company.
Mr. Suarez's book "7 Steps to Freedom -
How to Escape the American Rat Race" has
sold over $10 million and has become the
basis of an accredited direct-marketing
course at the University of Akron. Under
Mr. Suarez's leadership Suarez
Corporation Industries has become one of
the leading direct-marketing companies
in the world and one of the largest
employers in Stark County, Ohio. "We are
very pleased and excited to have Mr.
Suarez's cutting-edge marketing insight
on our Board," 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)(b) survey estimates
the U.S. market for pet products at $32
billion, with a long-term annual growth
rate of 10 percent. The APPMA estimates
an American pet population of 68 million
dogs, 73 million cats and 19 million
birds.
(b) APPMA, 2002/2003 National Pet
Owners Survey
OURPET'S COMPANY AND SUBSIDIARIES
CONSOLIDATED OPERATING RESULTS
(unaudited)
For the Nine Months Ended For the Quarter Ended
September 30, September 30,
------------------------- -----------------------
2003 2002 2003 2002
------------- ----------- ----------- -----------
Net revenue $3,799,633 $3,270,764 $1,371,162 $1,312,249
Less: Costs and
expenses
Cost of goods sold 2,851,299 2,505,447 1,019,760 967,429
Selling, general
and administrative
expenses 1,031,867 1,002,147 389,901 364,338
Interest and other
income and expense 40,054 (3,063) (124) (1,742)
Interest expense 80,451 89,162 27,539 31,469
------------- ----------- ----------- -----------
Net income (loss) $(204,038) $(322,929) $(65,914) $(49,245)
============= =========== =========== ===========
Basic and Diluted
Net Income (Loss)
Per Common Share
After Dividend
Requirements For
Preferred Stock $(0.02) $(0.03) $- $-
============= =========== =========== ===========
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2003 2002
(unaudited) (audited)
------------- -------------
ASSETS
Cash and equivalents $94,699 $36,434
Receivables, net 586,873 660,214
Inventories 1,851,430 1,702,847
Prepaid expenses 190,741 30,006
------------- -------------
Total current assets 2,723,743 2,429,501
Property and equipment, net 782,619 806,054
Other 139,441 136,124
------------- -------------
Total assets $3,645,803 $3,371,679
============= =============
LIABILITIES AND STOCKHOLDER'S EQUITY
Short-term borrowings and current
maturities of long-term debt $1,488,561 $1,410,399
Accounts payable 979,078 607,459
Accrued expenses 170,781 139,438
------------- -------------
Total current liabilities 2,638,420 2,157,296
Long-term debt 151,032 153,994
Stockholders' Equity 856,351 1,060,389
------------- -------------
Total liabilities and stockholders'
equity $3,645,803 $3,371,679
============= =============
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, (3) the
company's ability to retain existing
members of its senior management team
and to attract additional management
employees, (4) the company's ability to
manage fluctuations in the availability
and cost of key materials and tools of
production, (5) general economic
conditions that might impact demand for
the company's products, (6) competition
from existing or new participants in the
pet products industry, (7) the company's
ability to design and bring to market
new products on a timely and profitable
basis, (8) challenges to the company's
patents or trademarks on existing or new
products, or (9) 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.
Contacts:
OurPet's Company
Dr. Steven Tsengas or John G. Murchie
440-354-6500
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