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8-K - 8-K - OURPETS COv448478_8k.htm

 

Exhibit 99.1

 

OurPet’s Company is a leading proprietary pet supply company that designs, produces and markets a broad line of innovative, high-quality accessory and consumable pet products under the OurPet’s and Pet Zone brands in U.S. and international markets. Three Months Ended June 30, 2016 Market Trends • Net revenue decreased 2.7% to $5.4 million • Gross profit margin of 28.9% U.S. Pet Industry* • 3rd largest consumer market ($68 billion in 2015) • Forecast (CAGR) of 4%-5% through 2017 • 82.5 million or 68% of households own a pet • Of the 82.5 million households, 47% own at least one dog and 37% own at least one cat • Average annual spending on non-food pet products $1,135 for dogs $935 for cats • Industry is generally recession resistant Pet Accessories and Treats Categories • 19% of U.S. pet industry annual sales • Category sales estimated to be $12.5 billion • Forecast CAGR of 8% -10% through 2017 • Pets are living longer: 40% are “seniors” Key Markets • Pet Specialty • Food, Drug & Mass • E-commerce • Net income decreased 41% to $154,634 • Earnings per diluted share of $0.01 Dual Brand Strategy • OurPet’s products sold exclusively through the Pet Specialty channel • OurPet’s satisfies demands of the Pet Specialty consumer Wide variety of premium, innovative, quality toys and accessories Specially-designed to awaken a pets’ natural instincts Available exclusively at pet specialty retailers Dedicated trade and consumer support • Pet Zone is sold through the Food/Drug/Mass Merchandise channel • Pet Zone satisfies the demands of the Multi-Outlet consumer Pet Specialty quality products at affordable prices Value-added features that go beyond fun and functionality • When tested by consumers, Pet Zone’s brand awareness scored highest among competitors Proprietary Products OurPet’s Company has been granted or assigned 92 United States and international patents for cat and dog toys, dog feeders and natural and nutritional pet supplements and treats plus 70 United States and international patents pending for cat and dog toys, dog feeders and waste management products. Strategic Product Categories: *Source: APPA2015 Market Ticker symbol At June 30, 2016: Share price P/E Ratio Market capitalization Price/Book Price/Sales OTCQX OPCO $0.90 14.2 $18.1 2.0x $0.75 Dollars in millions, except share price. Quarterly Highlights • Launched Switchgrass Natural Cat Litter™ with BioChar; earned top ranking through third-party testing. • Launched Intelligent Pet Care product line to monitor pet health wellness and product functionality. • Now licensing Polymer Bonded Pet Bowl Patent to qualified companies. • Presented to a group of 450 independent investor club representatives at the 65th Annual Better Investing National Convention. • Increased focus on ecommerce and As Seen on TV Feline Waste Management Solutions Interactive Cat & Dog Toys Healthy Feeding Systems

 

 

 

 

OURPET’S COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the Three Months Ended June 30, For the Six Months ended June 30, 2016 2015 2016 2015 Net revenue $ 5,436,902 $ 5,586,828 $ 11,612,887 $ 11,184,150 Gross profit 1,571,844 1,718,069 3,403,701 3,412,414 Income from operations 227,702 422,463 642,972 778,776 Income before income taxes 207,245 418,945 616,684 755,474 Income tax (expense) 52,611 156,869 195,470 279,606 Net income $ 154,634 $ 262,076 $ 421,214 $ 475,868 Basic and Diluted Earnings Per Common Share After Dividend Requirements For Preferred Stock: Net Income $ 0.01 $ 0.01 $ 0.02 $ 0.02 Weighted average number of common shares outstanding used to calculate basic earnings per share 17,657,516 17,558,838 17,643,936 17,555,973 Weighted average number of common and equivalent shares outstanding used to calculate diluted earnings per share 18,277,335 19,201,418 18,250,885 19,172,847 Business Model Strong R&D and Patents Positioning with Leading Retailers Positioning with Leading Retailers • Products are brought to market after careful investment in both behavioral research and technology research • Focus on products with proven efficacy • Strong sell-through history with retailers such as Wal-Mart, PetSmart, and Petco • Private label business helps maintain shelf space within pet specialty retailers • Consolidation of vendors within leading retailers • Growth in Toys & Accessories continue • Aversion to developing commodity products • Formidable patent fencing process to secure inimitability versus the competition • #1 ranking within product category position at Amazon • Broad retail presence across pet specialty and food, drug & mass retailers, as well within e-commerce • The feline Waste & Odor control market represents a particularly attractive, growing segment “While we were disappointed with the decline in revenues and net income, the decreases are directly attributable to a major pet specialty retailer’s decision to transition out of its private label stainless steel rubber bonded bowls and toys and accessories, which we previously supplied, to make room in its inventory for OurPet’s branded products that will be rolled out during Q3 and Q4 of this year. ... Due to the seasonal nature of the pet industry, we typically experience our strongest sales in the second half of the year. We have no reason to believe this year will be any different.” 1300 East Street, Fairport Harbor, Ohio 44077 1.800.565.2695 • 440.354.6500 • Fax: 440.354.9129 • www.ourpets.com Public Company Symbol: OTCQX: OPCO • Member of APPA • NASC • RILA – Dr. Steven Tsengas, Chairman and CEO This Fact Sheet shall not constitute an offer to sell or the solicitation of an offer to buy OurPet’s Company securities. It is intended to provide background information on OurPet’s Company and should be read in conjunction with our SEC filings. including the risk factors and forward-looking safe harbor statements included in those filings. Copies of those documents are available on our website at www.ourpets.com. Sales Channels/ Customer examples Pet Specialty • Petco • Petsmart • Pet Supermarket • Pet Supplies Plus • Petvalu Food, Drug & Mass Grocery • Kroger • Publix • C&S Grocers Mass • Meijer • Kmart • Wal-Mart E-commerce • Amazon.com • Doctors Foster and Smith • Petsmart.com • Target.com • Walmart.com