Attached files
| file | filename |
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| 8-K - FORM 8-K - OURPETS CO | v385145_8k.htm |
| EX-99.2 - EXHIBIT 99.2 - OURPETS CO | v385145_ex99-2.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
OurPet’s Company Reports Results for 2014 Second Quarter
FAIRPORT HARBOR, Ohio – July 29, 2014—OurPet's Company (OTCQB: OPCO) (www.ourpets.com), a leading proprietary pet supply company, today reported second quarter revenue increased approximately 13% to $5,360,210 for the three months ended June 30, 2014 compared to $4,748,503 for the same period a year ago. Net income for the 2014 second quarter increased approximately 11% to $147,755 compared to $132,765 the prior year. Diluted net income per share was $0.01 for the second quarter of 2014 and 2013.
Dr. Steven Tsengas, President and CEO, said, “We achieved double digit increases in net revenue and net income despite the adverse impact of challenging weather conditions and tentative consumer spending patterns nationally this year. Stronger sales growth is anticipated during the second half of 2014, especially in the Food, Drug, Mass market channel which will benefit from shipments of all of our PetZone branded products, complementing strong performance in the E-Commerce and Pet Specialty channels which is anticipated to continue.”
Dr. Tsengas added, “The Company’s dual-brand strategy is being well-accepted by customers and is a sound pathway to long-term growth. Our 2014 second quarter and year-to-date sales growth rates substantially exceeded recent independent industry trend projections for in-store and online purchases. We are moving forward as aggressively as possible with implementation of our strategy while also carefully managing inventory and other continuous improvement related initiatives. The re-launch of feline waste management and odor control products through our PetZone brand has resulted in favorable online customer satisfaction ratings and increased interest from national customers, particularly for the SmartScoop automatic and EZ-Scoop litterbox products. Other recent product introductions, such as the line of Corknip all-natural compressed catnip products, are expected to strengthen our sales in multiple channels. Positive contributions from these initiatives are expected to be realized during the second half of 2014 and into 2015.”
2014 Second Quarter Results
Net revenue increased approximately 13% to $5,360,210 for the 2014 second quarter from $4,748,503 last year with higher sales in most categories led by strong growth in the E-commerce and Pet Specialty channels.
Gross Profit was $1,518,445 for the 2014 second quarter compared to $1,408,190 the prior year. Gross profit margin decreased to 28.3% for the 2014 second quarter from 29.7% for the same period a year ago principally due to increases in certain product costs and sales mix.
Income from operations decreased to $192,758 for the 2014 second quarter from $259,857 last year. Higher gross profit for the 2014 second quarter was partially offset by a $177,000 increase in selling, general, and administrative expenses primarily related to higher marketing, promotional and commission expenses.
Other income of $61,232 for the 2014 second quarter was related to various patent infringement settlements. There was $0 of other income for the 2013 second quarter.
Income before taxes increased to $223,463 for the 2014 second quarter from $212,765 for the same period last year.
Net income was $147,755 for the 2014 second quarter compared to $132,765 for the same quarter last year. Net income per diluted share was $0.01 for second quarter of 2014 and 2013.
EBITDA was $426,753 for the 2014 second quarter compared to $432,830 a year ago. A reconciliation of EBITDA to GAAP net income is provided in an attachment to the summary financial statements.
2014 First Six Months Results
Net revenue increased 8% to $10,574,681 for the first six months of 2014 from $9,789,147 for the same period last year led by higher sales to the Food, Drug and Mass market, E-commerce and Pet Specialty market, partially offset by lower sales in the Waste/Odor category.
Gross profit increased to $3,072,347 for the first six months of 2014 from $2,864,565 for the same period in 2013. Gross profit margin decreased slightly to 29.1% for the first six months of 2014 from 29.3% for the same period a year ago despite adverse weather conditions, some promotional sales and higher than planned costs to enter the private label value market.
Income from operations decreased to $433,696 for the 2014 first half from $564,059 a year ago. Higher gross profit was offset by a $338,000 increase in selling, general, and administrative expenses primarily related to higher marketing, promotional and commission expenses.
Other income was $71,662 for the first six months of 2014 compared to $40,784 for the same period last year. The 2014 amount was nearly all due to patent infringement settlements, while the 2013 amount was due to $26,000 of insurance claim settlements and about $15,000 related to patent infringement settlements.
Income before taxes decreased to $438,992 for the first half of 2014 from $517,506 for the same period in 2013.
Income tax expense was $156,808 for the first six months of 2014 compared to $161,139 last year.
Net income decreased to $282,184 for the first six months of 2014 from $356,367 for the same period last year. Net income per share was $0.01 for the first six months of 2014 compared to $.02 for the same period in 2013.
EBITDA was $830,516 for the first half of 2014 compared to $941,636 the prior year. Depreciation and amortization expense was $325,158 for the 2014 first six months or $11,635 below the same period in 2013. 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 Tuesday, July 29, 2014, 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. For further information, contact:
| CONTACTS | INVESTOR RELATIONS |
| OurPet’s Company | InvestQuest, Inc. |
| Dr. Steven Tsengas, CEO | Robert Lentz |
| (440) 343-6500, x111 | (614) 876-1900 |
OurPet's Company
EBITDA -Q2'14 and YTD 2014 vs. prior comparable periods in 2013
| EBITDA | Q2'14 | Q2'13 | 1st six months 2014 | 1st six months 2013 | ||||||||||||
| Net Income | $ | 147,755 | $ | 132,765 | $ | 282,184 | $ | 356,367 | ||||||||
| Interest | 30,527 | 47,092 | 66,366 | 87,337 | ||||||||||||
| Tax Expense | 75,708 | 80,000 | 156,808 | 161,139 | ||||||||||||
| Depreciation | 153,326 | 159,980 | 287,011 | 312,169 | ||||||||||||
| Amortization | 19,437 | 12,993 | 38,147 | 24,624 | ||||||||||||
| Total EBITDA | $ | 426,753 | $ | 432,830 | $ | 830,516 | $ | 941,636 | ||||||||
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.
OURPET'S COMPANY AND SUBSIDIARIES
CONSOLIDATED OPERATING RESULTS
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Net revenue | $ | 5,360,210 | $ | 4,748,503 | $ | 10,574,681 | $ | 9,789,147 | ||||||||
| Cost of goods sold | 3,841,765 | 3,340,313 | 7,502,334 | 6,924,582 | ||||||||||||
| Gross profit on sales | 1,518,445 | 1,408,190 | 3,072,347 | 2,864,565 | ||||||||||||
| Selling, general and administrative expenses | 1,325,687 | 1,148,333 | 2,638,651 | 2,300,506 | ||||||||||||
| Income (loss) from operations | 192,758 | 259,857 | 433,696 | 564,059 | ||||||||||||
| Other (income) and expense, net | (61,232 | ) | - | (71,662 | ) | (40,784 | ) | |||||||||
| Interest expense | 30,527 | 47,092 | 66,366 | 87,337 | ||||||||||||
| Income before taxes | 223,463 | 212,765 | 438,992 | 517,506 | ||||||||||||
| Income Tax expense | 75,708 | 80,000 | 156,808 | 161,139 | ||||||||||||
| Net Income | $ | 147,755 | $ | 132,765 | $ | 282,184 | $ | 356,367 | ||||||||
| Basic and Diluted Net Income Per Common Share After Dividend Requirements For Preferred Stock | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.02 | ||||||||
| Weighted average number of common shares outstanding used to calculate basic earnings per share | 16,897,781 | 15,936,863 | 16,798,259 | 15,909,276 | ||||||||||||
| Weighted average number of common and equivalent shares outstanding used to calculate diluted earnings per share | 18,205,549 | 16,800,244 | 18,244,626 | 16,617,410 | ||||||||||||
OURPET'S COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2014 | 2013 | |||||||
| ASSETS | ||||||||
| Cash and equivalents | $ | 196,497 | $ | 57,975 | ||||
| Receivables, net | 3,032,005 | 2,811,139 | ||||||
| Inventories, net | 7,222,083 | 5,876,724 | ||||||
| Prepaid expenses | 463,935 | 397,268 | ||||||
| Total current assets | 10,914,520 | 9,143,106 | ||||||
| LONG TERM ASSETS | ||||||||
| Property and equipment, net | 1,964,970 | 1,891,209 | ||||||
| Amortizable Intangible Assets, net | 370,153 | 370,850 | ||||||
| Intangible Assets | 461,000 | 461,000 | ||||||
| Goodwill | 67,511 | 67,511 | ||||||
| Deposits and Other assets | 18,003 | 18,003 | ||||||
| Total long term assets | 2,881,637 | 2,808,573 | ||||||
| Total assets | $ | 13,796,157 | $ | 11,951,679 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Notes payable | $ | 100,000 | $ | 100,000 | ||||
| Current maturities of long-term debt | 249,560 | 397,575 | ||||||
| Accounts payable | 2,109,838 | 1,169,925 | ||||||
| Accrued expenses | 451,590 | 861,010 | ||||||
| Total current liabilities | 2,910,988 | 2,528,510 | ||||||
| LONG TERM LIABILITIES | ||||||||
| Long-term debt - less current portion above | 596,097 | 721,389 | ||||||
| Revolving line of credit | 3,167,032 | 1,833,032 | ||||||
| Deferred income taxes | 210,883 | 245,775 | ||||||
| Total long term liabilities | 3,974,012 | 2,800,196 | ||||||
| Total liabilities | 6,885,000 | 5,328,706 | ||||||
| Stockholders' Equity | 6,911,157 | 6,622,973 | ||||||
| Total liabilities and stockholders' equity | $ | 13,796,157 | $ | 11,951,679 | ||||