News Press Releases

OurPet's Company Reports Results for 2015 Second Quarter

August 3, 2015

Record Second Quarter Net Revenue of $5.6 Million; Net Income Up 77% to $262,076

FAIRPORT HARBOR, OH--(Marketwired - August 03, 2015) - OurPet's Company (OTCQB: OPCO) (www.ourpets.com), a leading proprietary pet supply company, today reported second quarter revenue increased 4% to a record $5,586,828 for the three months ended June 30, 2015 from $5,360,210 for the same period a year ago. Net income for the 2015 second quarter increased 77% to $262,076 compared to $147,755 the prior year. Diluted net income per share was $0.01 for the second quarter of 2015 and 2014.

Dr. Steven Tsengas, President and CEO, said, "We are encouraged with our results for the second quarter which included record net revenue, increased margins and further progress implementing our dual-brand strategy. All of this was achieved in the midst of a sluggish economy. Sales in Pet Specialty were particularly strong and benefited from recently introduced bowl designs, new cat toys and accessories. The outlook for E-commerce sales remains bright despite a temporary setback in the 2015 second quarter. Sales in the Grocery, Drug, and Mass channel are expected to benefit from the continued roll-out of the PetZone brand coupled with introduction of new products and targeted efforts to expand the retail base."

Dr. Tsengas continued, "We're excited about our growth opportunities in the second half of this year. Several new and exciting proprietary products will be shipped to customers beginning later this month. We also continue to further strengthen our product portfolio through aggressive development of innovative products in each of our key categories: toys/accessories, bowls/feeders and feline waste management. We received very positive feedback from buyers last month at SuperZoo -- the national show for pet retailers. We also received the coveted '1^st Place Award for New Cat Products' at SuperZoo. Three proprietary, game-changing products are being developed for the feline waste management category that we expect to release during the first half of 2016."

2015 Second Quarter Results
Net revenue increased 4% to a record $5,586,828 for the 2015 second quarter versus the same period last year. The $227,000 increase was attributable to strong sales in the Pet Specialty channel partially offset by a slight decrease in the Food, Drug and Mass channel and lower E-Commerce sales.

Gross Profit was $1,718,069 for the 2015 second quarter compared to $1,518,445 the prior year. Gross profit margin increased 2.5 percentage points to 30.8% for the 2015 second quarter from 28.3% for the same period a year ago due to continuous improvement initiatives, price increases, and product mix.

Income from operations increased to $422,463 for the 2015 second quarter from $192,758 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 second quarter decreased to $21,277 from $61,232 a year ago due to a higher amount of patent infringement settlements the prior year.

Income before taxes increased 87% to $418,945 for the 2015 second quarter versus the same period a year ago.

Income tax expense for the 2015 second quarter more than doubled to $156,869 from $75,708 a year ago.

Net income increased 77% to $262,076 for the 2015 second quarter from $147,755 last year. Net income per diluted share was $0.01 for the second quarter of 2015 and 2014.

EBITDA was $625,984 for the 2015 second quarter versus $426,753 a year ago. A reconciliation of EBITDA to GAAP net income is provided in an attachment to the summary financial statements.

2015 First Six Months Results
Net revenue increased 6% to $11,184,150 for the first half of 2015. The year-over-year increase was due to strong Pet Specialty sales plus higher sales in the Grocery, Drug and Mass channel.

Gross profit increased 11% to $3,412,414 for the first six months of 2015 versus the prior year. Gross profit margin increased 1.4 percentage points to 30.5% for the first six months of 2015 from 29.1% the prior year due to the same factors that benefited the 2015 second quarter results.

Income from operations increased 80% to $778,776 for the 2015 first half, which was attributable to higher gross profit and lower selling, general, and administrative expenses.

Other income decreased to $26,000 for the first six months of 2015 from $71,662 for the same period last year due to a greater amount of patent infringement settlements in 2014.

Income before taxes increased 72% to $755,474 for the first half of 2015 versus the same period a year ago.

Income tax expense was $279,606 for the first six months of 2015 compared to $156,808 the prior year.

Net income for the first six months of 2015 increased 69% to $475,868 from $282,184 for the same period in 2014. Net income per share increased to $0.02 for the first six months of 2015 from $.01 last year.

EBITDA increased 40% to $1,158,994 the first half of 2015 compared to $830,516 the prior year. A reconciliation of EBITDA to GAAP Net Income is provided in an attachment to the summary financial statements.

Investor Conference Call
OurPet's Company has scheduled an investor conference call for Monday, August 3, 2015, at 4:30 pm. Eastern Time (ET). Dr. Steve Tsengas, Chairman and CEO, and Scott Mendes, Chief Financial Officer, will discuss the company's growth strategy and financial results followed by a question and answer session. To participate in the conference call, individuals should dial (877) 485-3107. Phone lines will open at 4:20 p.m. ET. A digital replay of the investor conference call will be available following the call on the company's website: www.ourpets.com/investor/investors.html.

About OurPet's Company
OurPet's Company designs, produces and markets a broad line of innovative, high-quality accessory and consumable pet products in the U.S. and overseas. Investor and customers may visit www.ourpets.com for more information about our company and its products. OurPet's websites include www.petzonebrand.com and www.ourpets.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; 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 currency rates; rising costs for raw materials and sources of supply that may be limited or unavailable from time to time; 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 BALANCE SHEETS


			June 30,		December 31,
			2015		2014
			(unaudited)
ASSETS

CURRENT ASSETS
	Cash and cash equivalents		$	38,400	$	192,448
	Accounts receivable - trade, less allowance for doubtful accounts of $37,824 and $39,539			3,507,030		3,116,448
	Inventories net of reserve			8,047,370		6,894,115
	Prepaid expenses			470,833		478,593
		Total current assets		12,063,633		10,681,604

PROPERTY AND EQUIPMENT
	Computers and office equipment			974,857		883,163
	Warehouse equipment			581,974		567,816
	Leasehold improvements			289,217		276,952
	Tooling			4,207,203		3,885,401
	Construction in progress			216,000		157,031
		Total		6,269,251		5,770,363
	Less accumulated depreciation			4,314,660		4,000,815
		Net property and equipment		1,954,591		1,769,548

OTHER ASSETS
	Amortizable Intangible Assets, less amortization of $457,722 and $417,349			366,632		384,063
	Intangible Assets			461,000		461,000
	Goodwill			67,511		67,511
	Deposits and other assets			18,003		18,003
		Total other assets		913,146		930,577

		Total assets	$	14,931,370	$	13,381,729




The accompanying notes are an integral part of the consolidated financial statements.




OURPET'S COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)


			June 30,		December 31,
			2015		2014
			(unaudited)
LIABILITIES

CURRENT LIABILITIES
	Current maturities of long-term debt		$	520,420	$	601,632
	Accounts payable - trade			1,885,647		1,489,982
	Other accrued expenses			621,607		565,491
		Total current liabilities		3,027,674		2,657,105

LONG-TERM LIABILITIES
	Long-term debt - less current portion above			160,708		119,780
	Revolving Line of Credit			3,567,032		2,862,032
	Deferred Income Taxes			226,927		281,651
		Total long term liabilities		3,954,667		3,263,463

		Total liabilities		6,982,341		5,920,568

STOCKHOLDERS' EQUITY
COMMON STOCK
	No par value; 50,000,000 shares authorized, 17,562,239 and 17,553,007shares issued and outstanding at June 30, 2015 and December 31, 2014respectively			5,031,766		5,031,766

CONVERTIBLE PREFERRED STOCK
	No par value; convertible into Common Stock at the rate of 10 common shares for each preferred share; 4,825,000 shares authorized, 63,500 shares issued and outstanding at June 30, 2015 and December 31, 2014 respectively			579,850		579,850

	Series 2009 no par value; convertible into Common Stock at the rate of 10 common shares for each preferred share; 175,000 shares authorized,123,616 shares issued and outstanding at June 30, 2015 and December 31, 2014			865,312		865,312

PAID-IN CAPITAL				65,307		53,307

ACCUMULATED EARNINGS				1,406,794		930,926
		Total stockholders' equity		7,949,029		7,461,161

		Total liabilities and stockholders' equity	$	14,931,370	$	13,381,729


The accompanying notes are an integral part of the consolidated financial statements.




OURPET'S COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS



		For the Three Months Ended June 30,						For the Six Months Ended June 30,
		2015			2014			2015			2014


Net revenue		$	5,586,828		$	5,360,210		$	11,184,150		$	10,574,681

Cost of goods sold			3,868,759			3,841,765			7,771,736			7,502,334

Gross profit on sales			1,718,069			1,518,445			3,412,414			3,072,347

Selling, general and administrative expenses			1,295,606			1,325,687			2,633,638			2,638,651

Income from operations			422,463			192,758			778,776			433,696

Other income			(21,277	)		(61,232	)		(26,000	)		(71,662	)
Interest expense			24,795			30,527			49,302			66,366

Income before income taxes			418,945			223,463			755,474			438,992

Income tax expense			156,869			75,708			279,606			156,808

Net income		$	262,076		$	147,755		$	475,868		$	282,184


Basic and Diluted Earnings Per Common ShareAfter Dividend Requirements For PreferredStock:
	Net Income	$	0.01			0.01		$	0.02		$	0.01


Weighted average number of common sharesoutstanding used to calculatebasic earnings per share			17,558,838			16,897,781			17,555,973			16,798,259

Weighted average number of common andequivalent shares outstanding used tocalculate diluted earnings per share			19,201,418			18,205,549			19,172,847			18,244,626


The accompanying notes are an integral part of the consolidated financial statements.

OURPET'S COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2015


	Preferred Stock			Series 2009 Preferred Stock			Common Stock							Total
	Number of			Number of			Number of			Paid-In		Accumulated		Stockholders'
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Earnings		Equity


Balance at December 31, 2014	63,500	$	579,850	123,616	$	865,312	17,553,007	$	5,031,766	$	53,307	$	930,926	$	7,461,161

Common Stock issued upon exercise of
stock options							9,232
Net income													475,868		475,868
Stock-Based compensation expense											12,000				12,000

Balance at June 30, 2015 (unaudited)	63,500	$	579,850	123,616	$	865,312	17,562,239	$	5,031,766	$	65,307	$	1,406,794	$	7,949,029




OURPET'S COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS


					For the Six Months Ended
					June 30,
					2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES
	Net income				$	475,868		$	282,184
	Adjustments to reconcile net income to net cash provided by operating activities:
		Loss on Fixed Assets Written Off				6,638			-
		Depreciation expense				313,846			287,011
		Amortization expense				40,372			38,147
		Stock option expense				12,000			6,000
		(Increase) decrease in assets:
			Accounts receivable - trade			(390,582	)		(220,866	)
			Inventories			(1,153,255	)		(1,345,359	)
			Prepaid expenses			7,760			(66,667	)
			Amortizable Intangible Asset Additions			(22,940	)		(37,450	)
		Increase (decrease) in liabilities:
			Accounts payable - trade			395,665			939,913
			Accrued expenses			56,116			(409,420	)
			Deferred tax liabilities			(54,724	)		(34,892	)
				Net cash used in operating activities		(313,236	)		(561,399	)

CASH FLOWS FROM INVESTING ACTIVITIES
	Acquisition of property and equipment					(420,528	)		(360,772	)
		Net cash used in investing activities				(420,528	)		(360,772	)

CASH FLOWS FROM FINANCING ACTIVITIES
	Principal payments on long-term debt					(125,284	)		(273,307	)
	Net borrowing on bank line of credit					705,000			1,334,000
		Net cash provided by financing activities				579,716			1,060,693
		Net increase (decrease) in cash				(154,048	)		138,522

CASH AT BEGINNING OF PERIOD						192,448			57,975
CASH AT END OF PERIOD					$	38,400		$	196,497


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
	Interest paid				$	38,722		$	57,521
	Income taxes paid				$	256,000		$	320,500

SUPPLEMENTAL DISCLOSURE OF NON CASH TRANSACTIONS
	Non cash exercise of stock options/ warrants				$	6,933		$	232,645
	Tooling Obtained through Asset Purchase				$	85,000

The accompanying notes are an integral part of the consolidated financial statements.

										Exhibit 11

OURPET'S COMPANY AND SUBSIDIARIES

STATEMENT OF COMPUTATION OF NET INCOME PER SHARE



	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014

Net income	$	262,076		$	147,755		$	475,868		$	282,184

Preferred Stock dividend requirements		(11,399	)		(27,826	)		(22,672	)		(55,346	)

Net income attributable to common stockholders	$	250,677		$	119,929		$	453,196		$	226,838

Basic weighted average number of common shares outstanding		17,558,838			16,897,781			17,555,973			16,798,259

Preferred Stock Common Share Equivalents		1,236,160						1,236,160

Dilutive Stock Options outstanding for the Period		104,772			586,293			57,958			692,864

Dilutive Warrants outstanding for the Period		301,649			721,475			322,755			753,503

Diluted Weighted average number of common and equivalent shares outstanding		19,201,418			18,205,549			19,172,847			18,244,626

Basic and Diluted Net income per common share	$	0.01		$	0.01		$	0.02		$	0.01




OURPET'S COMPANY AND SUBSIDIARIES
CONSOLIDATED OPERATING RESULTS

			For the Three Months Ended						For the Six Months Ended
			June 30,						June 30,
			2015			2014			2015			2014

Net revenue			$	5,586,828		$	5,360,210		$	11,184,150		$	10,574,681
Cost of goods sold				3,868,759			3,841,765			7,771,736			7,502,334
		Gross profit on sales		1,718,069			1,518,445			3,412,414			3,072,347

Selling, general and administrative expenses				1,295,606			1,325,687			2,633,638			2,638,651

		Income from operations		422,463			192,758			778,776			433,696

Other income				(21,277	)		(61,232	)		(26,000	)		(71,662	)
Interest expense				24,795			30,527			49,302			66,366
Income before taxes				418,945			223,463			755,474			438,992

Income Tax expense				156,869			75,708			279,606			156,808
Net Income			$	262,076		$	147,755		$	475,868		$	282,184


Basic and Diluted Net Income Per CommonShare After Dividend Requirements For PreferredStock			$	0.01		$	0.01		$	0.02		$	0.01

Weighted average number of common sharesoutstanding used to calculatebasic earnings per share				17,558,838			16,897,781			17,555,973			16,798,259

Weighted average number of common andequivalent shares outstanding used tocalculate diluted earnings per share				19,201,418			18,205,549			19,172,847			18,244,626



OURPET'S COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

			June 30,			December 31,
			2015			2014
ASSETS
	Cash and equivalents		$	38,400		$	192,448
	Receivables, net			3,507,030			3,116,448
	Inventories, net			8,047,370			6,894,115
	Prepaid expenses			470,833			478,593
		Total current assets		12,063,633			10,681,604

LONG TERM ASSETS
	Property and equipment, net			1,954,591			1,769,548
	Amortizable Intangible Assets, net			366,632			384,063
	Intangible Assets			461,000			461,000
	Goodwill			67,511			67,511
	Deposits and Other assets			18,003			18,003
		Total long term assets		2,867,737			2,700,125

		Total assets	$	14,931,370		$	13,381,729

LIABILITIES AND STOCKHOLDERS' EQUITY
	Current maturities of long-term debt			520,420			601,632
	Accounts payable			1,885,647			1,489,982
	Accrued expenses			621,607			565,491
		Total current liabilities		3,027,674			2,657,105

LONG TERM LIABILITIES
	Long-term debt - less current portion above			160,708			119,780
	Revolving line of credit			3,567,032			2,862,032
	Deferred income taxes			226,927			281,651
		Total long term liabilities		3,954,667			3,263,463

		Total liabilities		6,982,341			5,920,568

	Stockholders' Equity			7,949,029			7,461,161

		Total liabilities and stockholders' equity	$	14,931,370		$	13,381,729

EBITDA

Q2'15

Q2'14

1st six months 2015

1st six months 2014

Net Income

$

262,076

$

147,755

$

475,868

$

282,184

Interest

24,795

30,527

49,302

66,366

Tax Expense

156,869

75,708

279,606

156,808

Depreciation

161,966

153,326

313,846

287,011

Amortization

20,278

19,437

40,372

38,147

Total EBITDA

$

625,984

$

426,753

$

1,158,994

$

830,516

The above table reconciles the Company’s disclosure of Net Income per GAAP with the non GAAP financial measure EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization.) As the investment community has often requested the EBITDA calculation to help them evaluate performance, Management has chosen to provide this disclosure. Although EBITDA is widely used in the investment community as a benchmark to reflect operating performance, financing capability and liquidity, it is not regarded as a measure of operating performance and liquidity under generally accepted accounting principles (“GAAP”). It also does not represent cash flows from operating activities. In addition, the Company’s EBITDA may not be comparable to similar indicators provided by other companies. The Presentation of this additional information is not meant to be considered in isolation or as a substitute for net income (loss), or any component thereof, in accordance with GAAP.

For further information, contact:

CONTACTS
OurPet's Company
Dr. Steven Tsengas
CEO
(440) 343-6500, x111

INVESTOR RELATIONS
InvestQuest, Inc.
Robert Lentz
(614) 876-1900