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: November 2, 2010

(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

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

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 November 2, 2010, OurPet’s Company issued a press release and other financial information regarding its third quarter and nine month 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 November 2, 2010 and other financial information

 

2


 

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: November 3, 2010   OurPet’s Company
  By:  

/s/ Scott R. Mendes

    Scott R. Mendes, Chief Financial Officer and Treasurer

 

3


 

EXHIBIT INDEX

 

Exhibit Number

 

Description

99   OurPet’s Company press release dated November 2, 2010 and other financial information

 

Exhibit 99

LOGO

FOR IMMEDIATE RELEASE

OurPet’s Company Reports 2010 Third Quarter Results

Record Quarterly Net Revenue

Cosmic Pet Product Integration Underway

FAIRPORT HARBOR, Ohio – November 2, 2010—OurPet’s Company (OTC BB: OPCO) (www.ourpets.com), a leading proprietary pet supply company today reported financial results for its third quarter ended September 30, 2010. The results include the purchase of certain assets of Cosmic Pet Products subsequent to July 30, 2010.

Dr. Steven Tsengas, President and CEO, said, “We achieved record net quarterly revenue and completed the acquisition of Cosmic Pet Products during the 2010 third quarter. For the 2010 third quarter, our performance was impacted by specific issues related to the pricing of two large, new customer promotional orders and costs attributable to the integration of Cosmic Pet Products. As a result, earnings per share declined to breakeven from $0.01 per diluted share a year ago.”

Dr. Tsengas, continued, “We entered the 2010 fourth quarter with sales momentum in our core business. Corrective actions have been taken to address the temporary 2010 third quarter challenges so that we can promptly resume our recent trend of improved margins and increased profitability. We are beginning to realize benefits from the acquisition of Cosmic Pet Products through increased market penetration and an expanded product line for the cat toy and accessory market”.

2010 Third Quarter Results

Net revenue increased 22% to a record $4,278,611 for the 2010 third quarter, including $242,780 of net revenue attributable to Cosmic Pet Products subsequent to August 1, 2010, from $3,515,026 for the same period in 2009. The Company’s sales particularly benefited from club account sales, our new Play and Squeak at Night ® product, cat toys and the partial quarter sales attributable to Cosmic Pet Products.

Gross profit declined 3% to $1,044,096 for the 2010 third quarter from $1,075,854 a year ago. The pricing of two large, new customer promotional orders and costs attributable to the integration of Cosmic Pet Products adversely impacted gross profit margin for the 2010 third quarter compared to a


year ago. As a result, gross profit margin declined to 24.4% for the 2010 third quarter from 30.6% for the same period last year.

Income from operations declined 74.3% to $60,923 for the 2010 third quarter from $237,027 for the same period last year. Included in the 2010 third quarter’s results are Cosmic Pet Products’ loss from operations of $57,491.

The Company updated its estimates of tax loss carry forwards including their utilization and recognized a deferred tax benefit of $18,575 during the 2010 third quarter resulting in net income tax benefit of $9,517. The Company did not have any deferred tax assets at the end of the 2009 third quarter.

Net income declined 81% to $34,837, or $0.00 per diluted share, for the 2010 third quarter from $183,086, or $0.01 per diluted share, for the same period in 2009. The weighted average number of common and equivalent shares outstanding increased approximately 16% to 18,149,684 for the 2010 third quarter compared to a year ago, principally due to the increase in the common stock price during the quarter ended September 30, 2010.

Bank Financing

In order to support growing working capital needs, the Company requested a $500,000 increase in its Line of Credit to $2,500,000. The Company’s request was approved following the close of the 2010 third quarter.

2010 Nine Month Results

Net revenue increased 18% to a record $12,400,406 for the nine months ended September 30, 2010, including $242,780 from Cosmic Pet Products, from $10,510,737 for the same period a year ago.

Gross profit margin declined 1.4% to 28.7% for the 2010 year-to-date period from 30.1% for the first nine months of 2009. This was principally due to costs related to the integration of the Cosmic Pet Products’ operations as well as pricing and other issues for two large, new customer promotional orders.

Income from operations increased 35.6% to $766,918 for the nine months ended September 30, 2010 from $565,792 for the same period last year. The 2010 nine months results include the Cosmic Pet Products loss from operations of $57,491.

The Company recognized $83,486 in income tax expense for the nine months ended September 30, 2010 due to updated estimates of its tax loss carry forwards and their utilization as compared to no deferred tax benefit recognition for the same period a year ago.

Net income increased 29.2% to $589,995, or $.03 per diluted share, for the nine months ended September 30, 2010 from $456,631, or $0.03 per diluted share, for the same period last year. The weighted average number of common and equivalent shares outstanding increased approximately 15% to 17,687,818 for the nine months ended September 30, 2010 compared to a year ago, principally due to the increase in the common stock price during the nine months ended September 30, 2010, as well as the issuance of convertible preferred stock earlier this year.


 

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 .

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 Nine Months Ended
September 30,
     For the Quarter Ended
September 30,
 
     2010      2009      2010     2009  

Net revenue

   $ 12,400,406       $ 10,510,737       $ 4,278,611      $ 3,515,026   

Cost of goods sold

     8,846,496         7,351,171         3,234,515        2,439,172   
                                  

Gross profit on sales

     3,553,910         3,159,566         1,044,096        1,075,854   

Selling, general and administrative expenses

     2,678,981         2,284,438         931,121        775,165   

Litigation expense

     108,011         309,336         52,052        63,662   
                                  

Income (loss) from operations

     766,918         565,792         60,923        237,027   

Other income and (expense), net

     1         38,226         —          506   

Interest expense

     93,438         134,777         35,603        50,247   
                                  

Income before taxes

     673,481         469,241         25,320        187,286   

Income Tax expense

     83,486         12,610         (9,517     4,200   
                                  

Net Income

   $ 589,995       $ 456,631       $ 34,837      $ 183,086   
                                  

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

   $ 0.03       $ 0.03       $ —        $ 0.01   
                                  

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

     17,687,818         15,374,661         18,149,684        15,706,693   
                                  


 

OURPET’S COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

     September 30,
2010
     December 31,
2009
 

ASSETS

     

Cash and equivalents

   $ 49,610       $ 84,555   

Receivables, net

     2,501,955         1,881,179   

Inventories

     5,484,845         2,984,035   

Prepaid expenses

     256,538         93,130   

Deferred Tax Asset net

     49,665         125,370   
                 

Total current assets

     8,342,613         5,168,269   

Property and equipment, net

     2,229,143         1,954,805   

Other

     839,643         475,668   
                 

Total assets

   $ 11,411,399       $ 7,598,742   
                 

LIABILITIES AND STOCKHOLDERS’ EQUITY

     

Notes payable

   $ 1,902,000       $ 949,000   

Current maturities of long-term debt

     906,539         956,589   

Accounts payable

     2,559,531         1,046,101   

Accrued expenses

     410,214         417,199   
                 

Total current liabilities

     5,778,284         3,368,889   

Long-term debt

     967,863         1,254,080   

Stockholders’ Equity

     4,665,252         2,975,773   
                 

Total liabilities and stockholders’ equity

   $ 11,411,399       $ 7,598,742