The renowned physicist Dr. Stephen Hawking, famously said, “Intelligence is the ability to adapt to change”, an observation that OurPet’s Company (OTCQX: OPCO) lives by. Earlier this year, the company filed its annual report (10-K) for the financial year ended December 31, 2015, which showed that it is responding to a changing market environment with operational efficiencies and new product innovation.
Net revenues for the 12 months ended December 31, 2015, were $23,819,189, an increase of $1,048,627 (4.6 percent) over revenues from the prior year. This growth resulted from increases in both unit sales and margins.
Net income for 2015 reached $1,336,912, increasing by an astounding 74 percent over net income for 2014. This improved performance showed that OurPet’s Company’s management is taking good care of business. Gross profit margin improved to almost 32% from 30% the previous year, and selling, general and administrative expenses actually declined.
OurPet’s Company’s 10-K also showcased the success of its dual-brand strategy, with the OurPets® brand for the “pet specialty” channel and the Pet Zone® brand for the “grocery, drug, mass” channel. In 2015, sales remained about the same in the “grocery, drug, mass” channel and increased in both the “pet specialty” and “e-commerce” channels by 11.8 percent and 6.3 percent, respectively.
The increased sales ran across many customer types, including distributors, national chains, regional chains and e-commerce retailers. The largest growth in revenue in 2015 came from sales to national chain customers, which increased by approximately $586,000, followed by sales to distributors, which grew by approximately $256,000.
International sales in 2015 were about $2,620,000, around 11 percent of total sales, and fell by approximately $300,000 or 10.3 percent, compared to 2014, mostly due to the strengthening of the U.S. dollar.
In 2015, the two largest product categories, comprising 85.9 percent of net sales, were toys and accessories. Both of these categories grew in 2015, with toys and accessories rising by approximately $406,000 (3.6%) and bowls and feeders rising by approximately $938,000 (11.0%). The edibles and consumables category comprised 5.9 percent of sales and decreased by 8.0 percent during 2015, mainly because a value-chain customer discontinued a product. The waste and odor category, which comprised 4.5 percent of sales in 2015, grew by 13.9 percent. The company expects this category to become more important in the coming year, as it has several new products under development, including its new Kitty Potty™ and Switchgrass/Bio Char Natural Litter.
At present, cats trump dogs at OurPet’s Company. The company sells more products for cats (57 percent of total sales) than it does for dogs (41 percent of sales). Another two percent is made up of miscellaneous items. Nevertheless, dog product sales increased at a rate of 11 percent because of higher bowl and feeder sales, as compared to cat product sales, which were up just one percent.
Last month, OurPet’s Company introduced its Intelligent Pet Care™ product line at the Global Pet Expo. Intelligent Pet Care™ products use Bluetooth® technology to communicate information to pet owners’ smartphones about their pets. The company also displayed its Whirling Wiggler™ Spinner Toy, new waste management products, and new designs for its bowl and feeder line.
OurPet’s Company’s intelligent and pro-active approach to the pet care marketplace is a result of its enlightened, well-informed management. The present team is made up of Dr. Steven Tsengas, chairman and chief executive officer; Dean S. Tsengas, chief operating officer, vice president of operations and secretary; Scott R. Mendes, chief financial officer; Kathleen Homyock, vice president of sales and new business development; and Gabriella Chessman, vice president of marketing. Dr. Tsengas is an engineer and inventor who has been elected to the National Inventors Hall of Fame. Under his guidance, OurPet’s Company has developed a portfolio of hundreds of products and nurtured an intellectual property (IP) stockpile of over 160 patents.
For more information, visit the company’s website at www.ourpets.com
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