UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Act of 1934

Date of Report: March 16, 2011

(Date of earliest event reported)

 

 

OurPet’s Company

(Exact name of registrant as specified in its charter)

 

 

 

Colorado   000-31279   34-1480558
(State or other jurisdiction   (Commission   (I.R.S. Employer
of incorporation)   File Number)   Identification Number)

1300 East Street, Fairport Harbor, OH 44077

(Address of principal executive offices including zip code)

440-354-6500

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02. Results of Operations and Financial Condition.

On March 16, 2011, OurPet’s Company issued a press release and other financial information regarding its fourth quarter and 2010 year-end results. The press release and other financial information are attached hereto as Exhibit 99.

 

Item 9.01. Financial Statements and Exhibits.

 

  (d) Exhibits .

 

99    OurPet’s Company press release dated March 16, 2011 and other financial information


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: March 18, 2011   OurPet’s Company
  By:  

/s/ Scott R. Mendes

    Scott R. Mendes, Chief Financial
          Officer and Treasurer


EXHIBIT INDEX

 

Exhibit Number

  

Description

99    OurPet’s Company press release dated March 16, 2011 and other financial information

Exhibit 99

LOGO

FOR IMMEDIATE RELEASE

OurPet’s Company Reports Record 2010 Fourth Quarter

and Record 2010 Full-Year Results

FAIRPORT HARBOR, Ohio – March 16, 2011—OurPet’s Company (OTC BB: OPCO) (www.ourpets.com), a leading proprietary pet supply company today reported record financial results for the fourth quarter and for the year ended December 31, 2010. These results include those of Cosmic Pet Products (“Cosmic Pet”) which sold certain inventory, equipment and product rights to OurPet’s effective July 29, 2010.

Dr. Steven Tsengas, President and CEO, remarked, “We are pleased with the record fourth quarter net revenue and net income which reflect solid organic growth and the full integration of Cosmic Pet. During the quarter we completed the installation of an enterprise resource planning (“ERP”) system at Cosmic Pet, enhanced its operations, and significantly improved customer service and on-time delivery. We ended 2010 with sales momentum and were better positioned to meet the increased demand for our products.”

Since the Cosmic Pet transaction in late-July 2010, OurPet’s has upgraded and expanded its line of branded catnip toys and accessory products. These exciting products, along with the expanded Go!CatGo!™ opening price point cat toys and Play-N-Squeak ® upscale cat toys are being featured this week at the Global Pet Exposition in Orlando, Florida. It is one of the largest and most heavily attended pet expositions in the world. The Company is introducing more than 150 new products at this exposition, highlighted by the re-launch of the new and highly improved SmartScoop ® automatic cat litter box.

2010 Fourth Quarter Results

Net revenue increased 25% to a record $4,690,500 for the 2010 fourth quarter, from $3,741,050 for the same period in 2009. The sales comparison particularly benefited from higher sales of Play-N-Squeak cat toy products, Durapet ® stainless steel bonded rubber bowls and Cosmic Pet products.


Gross profit increased 11% to $1,244,738 for the 2010 fourth quarter from $1,120,524 a year ago. Gross profit margin declined to 26.5% for the 2010 fourth quarter from 30.0% for the same period last year. This was primarily due to higher manufacturing costs, Cosmic Pet transition costs, installation activities related to implementation of the new ERP system and operational improvements, including infrastructure and personnel, to prepare OurPet’s to meet expected future customer demands.

The final phase of the Company’s ERP system is scheduled to be installed during April 2011. This important milestone is expected to result in improved supply chain management with the recent addition of highly skilled personnel, better inventory controls, improved customer service and overall operational efficiencies throughout the Company.

Income from operations doubled to $455,329 for the 2010 fourth quarter from $225,730 for the same period last year. Included in the 2010 fourth quarter income from operations is a one-time gain of $240,623 resulting from an independent third party valuation of certain Cosmic Pet tangible assets.

The Company updated its estimate of tax loss carryforwards including utilization and recognized a deferred tax benefit of $5,451 during the 2010 fourth quarter resulting in net income tax expense of $16,068. The Company recognized a net tax benefit of $137,604 for the 2009 fourth quarter, primarily from the recognition of a deferred tax asset.

Net income increased 24% to $396,533 for the 2010 fourth quarter from $319,136 for the same period in 2009. Fully diluted earnings per share were 2 cents for both periods despite an 18% increase in the weighted average number of fully diluted common and equivalent shares outstanding compared to a year ago. This increase was principally due to the higher common stock price for the quarter ended December 31, 2010.

Bank Financing

The Company recently increased its Line of Credit to support working capital needs resulting from its current and anticipated growth. During the 2010 fourth quarter the Company’s Line of Credit was increased by $300,000. Subsequent to December 31, 2010, it was increased further by $450,000 to a total of $3,250,000.

2010 Twelve Month Results

Net revenue increased 20% to a record $17,091,741 for the year ended December 31, 2010, from $14,251,786 for the same period a year ago.

Gross Profit increased 12% to $4,799,482 for the twelve month ended December 31, 2010 from $4,280,090 for the prior year. Gross profit margin was 28.1% for the year ended December 31, 2010 compared to 30.0% for the year 2009. This decrease was primarily due to costs related to


the integration of the Cosmic Pet operations as well as higher than anticipated warehouse freight, labor and overhead costs.

Income from operations increased 54% to $1,222,250 for the year 2010 from $791,522 for the prior year. The 2010 results include a one-time gain of $240,623 from the increased valuation of certain Cosmic Pet intangible assets.

The Company recognized $99,555 of income tax expense for the year 2010 due to updated estimates of its tax liabilities and loss carryforwards utilization compared to a net tax benefit of $124,994 recognized for the same period a year ago.

Net income increased 27% to $986,534 for the year ended December 31, 2010 compared to $775,767 for the same period last year. Fully diluted earnings per share were 5 cents for both periods despite a 23% increase in the weighted average number of common and equivalent shares outstanding at December 31, 2010 compared to the same date in 2009. This increase was principally due to the higher price of the common stock price during the year, as well as the issuance of convertible preferred stock during the 2010 first quarter.

Stockholders’ equity was $5,033,248 at December 31, 2010, an increase of 69% compared to $2,975,773 on the same date in 2009.

Looking to the Future

Dr. Tsengas commented, “We are optimistic for 2011 and beyond. With the SmartScoop litigation behind us, the integration of Cosmic Pet completed, and a pipeline full of new, exciting products we are committed to fully pursuing our growth formula, including product innovation, leading brand development, aggressive marketing and sales and strategic acquisitions/key partnerships in order to achieve superior revenue and profit results for our shareholders.”

About OurPet’s Company

OurPet’s designs, produces and markets a broad line of innovative, high-quality accessory and consumable pet products in the U.S. and overseas. Investors and customers may visit www.ourpets.com for more information about the Company and its products. The Company’s Websites include: www.smartscoop.com , www.ecopurenaturals.com , www.playnsqueak.com , and www.flappydogtoys.com , www.clipnosis.com , www.hideperchandgo.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 and 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 rates; rising costs for raw materials and the unavailability of sources of supply; the timing of orders booked; and the other risks that are described from time to time in OurPet’s SEC reports.

 

CONTACT:    INVESTOR RELATIONS:
OurPet’s Company    Robert A. Lentz and Associates, Inc.
Dr. Steven Tsengas, CEO    Robert Lentz
(440) 354-6500 (Ext. 111)    (614) 876-2000


OURPET’S COMPANY AND SUBSIDIARIES

CONSOLIDATED OPERATING RESULTS

 

     For the Years Ended      For the Quarter Ended  
     December 31,      December 31,  
     2010     2009      2010     2009  

Net revenue

   $ 17,091,741      $ 14,251,786       $ 4,690,500      $ 3,741,050   

Cost of goods sold

     12,292,259        9,971,696         3,445,762        2,620,526   
                                 

Gross profit on sales

     4,799,482        4,280,090         1,244,738        1,120,524   

Selling, general and administrative expenses

     3,704,994        3,114,960         1,025,182        830,522   

Litigation expense

     112,861        373,608         4,850        64,272   

Gain on Asset Purchase

     240,623        —           240,623        —     
                                 

Income (loss) from operations

     1,222,250        791,522         455,329        225,730   

Other income and (expense), net

     1        38,153         (3     (74

Interest expense

     136,162        178,902         42,725        44,124   
                                 

Income before taxes

     1,086,089        650,773         412,601        181,532   

Income Tax (expense) benefit

     (99,555     124,994         (16,068     137,604   
                                 

Net Income

   $ 986,534      $ 775,767       $ 396,533      $ 319,136   
                                 

Basic and Diluted Net Income (Loss) Per Common Share After Dividend Requirements For Preferred Stock

   $ 0.05      $ 0.05       $ 0.02      $ 0.02   
                                 

Weighted average number of common and equivalent shares outstanding used to calculate basic and diluted earnings per share

     19,102,046        15,523,288         19,865,247        16,897,046   
                                 


OURPET’S COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

     December 31,  
     2010      2009  

ASSETS

     

Cash and equivalents

   $ 78,673       $ 84,555   

Receivables, net

     2,657,865         1,881,179   

Inventories

     5,576,129         2,984,035   

Prepaid expenses

     210,340         93,130   

Deferred Tax Asset net

     55,116         125,370   
                 

Total current assets

     8,578,123         5,168,269   

Property and equipment, net

     2,260,873         1,954,805   

Intangible Assets

     461,000         —     

Other assets

     536,075         475,668   
                 

Total assets

   $ 11,836,071       $ 7,598,742   
                 

LIABILITIES AND STOCKHOLDERS’ EQUITY

     

Notes payable

   $ 2,628,000       $ 949,000   

Current maturities of long-term debt

     946,216         956,589   

Accounts payable

     1,926,499         1,046,101   

Accrued expenses

     504,504         417,199   
                 

Total current liabilities

     6,005,219         3,368,889   

Long-term debt

     797,604         1,254,080   

Stockholders’ Equity

     5,033,248         2,975,773   
                 

Total liabilities and stockholders’ equity

   $ 11,836,071       $ 7,598,742