OurPet’s Company (OPCO) Announces 428% Increase in Q3 Profit OurPet’s Company (OPCO) Announces 428% Increase in Q3 Profits with Record Revenue
Today before the opening bell, OurPet’s Company reported record third-quarter revenue of $5.99 million, an increase of 7% from $5.60 million in revenues for the same three-month period a year earlier. Net income for the quarter increased 428% to $410,450, or $0.02 diluted earnings per share, compared to $77,751, or $0.00, for the year prior.
Dr. Steven Tsengas, President and CEO, stated, “We are pleased with our results for the third quarter in which we achieved record net revenue, gross margins improving to 34%, and net income from operations of almost 11% of sales. We continue to see strong sales growth in the Pet Specialty channel driven by our cat toys and bowls/feeder lines. E-commerce sales rebounded and grew 7% while the Food, Drug, Mass channel slightly decreased; however, we anticipate improved sales as the conversion to the Pet Zone brand is completed by year end. Unfortunately, with the strengthening of the U.S. dollar, international sales have been negatively impacted particularly in Canada and the United Kingdom.”
Dr. Tsengas added, “We have expanded and strengthened our relationship with several domestic and international independent sales representative organizations, and have added another experienced salesperson to our staff. With the recent and anticipated introduction of a significant number of new innovative products in all our product categories, we are experiencing robust sales activity. Our Catty Whack™, winner of the SuperZoo ‘Best New Cat Product’ award, is beginning to ship and is receiving strong consumer reaction. We expect to release more information on other major, trend-setting products over the next six months.
“As we have previously communicated, the last five years have been challenging for OurPet’s as we have transitioned from a small- to a medium-sized company poised for accelerated future growth in both revenue and net income. This required large investments in management/operating informational systems; strengthening and, where appropriate, adding management and professional/technical talent; improving warehousing and inventory management efficiencies; strengthening relationships of strategic domestic and overseas suppliers; and strengthening our relationship with our banking resources. We sincerely believe that these improvements will positively impact revenue and profit results going into the fourth quarter of 2015 and beyond.”
2015 Third Quarter Results
Net revenue increased 7% to $5,986,645 for the 2015 third quarter versus the same period last year. The $386,000 increase was attributable to strong sales in the Pet Specialty and Value channels, partially offset by a decrease in the Food, Drug and Mass channel.
Gross Profit was $2,012,177 for the 2015 third quarter compared to $1,640,751 the prior year. Gross profit margin increased 4.3 percentage points to 33.6% for the 2015 third quarter from 29.3% for the same period a year ago due to continuous improvement initiatives, price increases, and product mix.
Income from operations increased to $649,023 for the 2015 third quarter from $152,768 a year ago. This increase was primarily due to higher gross profit and also benefited from lower selling, general, and administrative expenses.
Other income for the 2015 third quarter increased to $14,582 from $6,051 a year ago due to a higher amount of patent infringement settlements.
Income before taxes was almost five times greater at $627,686 for the 2015 third quarter compared to $127,666 a year ago.
Income tax expense for the 2015 third quarter increased to $217,236 from $49,915 a year ago due to the higher income.
Net income increased to $410,450 for the 2015 third quarter from $77,751 last year. Net income per diluted share increased to $0.02 for the third quarter of 2015 from $0.00 a year ago.
EBITDA was $825,696 for the 2015 third quarter versus $323,140 a year ago. A reconciliation of EBITDA to GAAP net income is provided in an attachment to the summary financial statements.
2015 First Nine Months Results
For the first nine months of 2015, net revenue increased 6% to $17,170,795. The growth was attributed to strong Pet Specialty sales, especially in the bowls and feeders category.
Gross profit increased 15% to $5,424,591 for the first nine months of 2015 versus the prior year. Gross profit margin increased 2.5 percentage points to 31.6% for the first nine months of 2015 from 29.1% the prior year due to the same factors that benefited the 2015 third quarter results.
Income from operations increased 143% to $1,427,797 for the first nine months of 2015, which was attributable to higher gross profit and lower selling, general, and administrative expenses.
Other income decreased to $40,582 for the first nine months of 2015 from $77,713 for the same period last year due to a greater amount of patent infringement settlements in 2014.
Income before taxes increased to $1,383,158 for the first nine months of 2015 compared to $566,658 for the same period a year ago.
Income tax expense was $496,839 for the first nine months of 2015 compared to $206,723 the prior year.
Net income for the first nine months of 2015 more than doubled to $886,319 from $359,935 for the same period in 2014. Net income per share increased to $0.04 for the first nine months of 2015 from $0.02 last year.
EBITDA increased 72% to $1,984,688 the first nine months of 2015 compared to $1,153,656 the prior year. A reconciliation of EBITDA to GAAP Net Income is provided in an attachment to the summary financial statements.
The Current Ratio improved to 5.61, reflecting strong liquidity, while Stockholders’ Equity improved by $904,319 or 12.1% over the comparable date last year.
For those unfamiliar with OurPet’s Company, the company develops, produces and markets various pet accessory and consumable products designed to awaken pets’ natural instincts, be it in feeding, playing or waste management. Sold globally through pet specialty retailers, food, drug and mass chains, e-commerce and international channels, the company’s products are marketed under a the OurPets®, Pet Zone® and PetTastic® brands with well-known sub-brands such as Play-N-Squeak™, Cosmic Catnip™, Durapet, SmartScoop and Flappy.
To learn more about OurPet’s Company, visit www.ourpets.com
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