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Strong Q3 Performance Validates OurPet’s Company’s (OPCO) Innovation-Driven Approach to Pet Products Industry
OurPet’s Company created quite the stir this morning when the company reported a triple-digit increase in quarterly net income on an impressive hike in revenues. While the company primarily attributes the growth to stronger domestic and international sales partnerships, one can’t ignore innovation as a considerable catalyst.
In recent years, the nation’s overall $73 billion pet products industry has enjoyed robust growth driven by increasing e-commerce purchases and an uptick in dog and cat ownership. The market is currently dominated by PetSmart, Inc. (NASDAQ: PETM) (nearly 39%), which tallied full-year 2014 revenues of $1.9 billion, and Petco (roughly 19%), which is looking raise about $800 million in an IPO in the relatively near future, according to Bloomberg Business. The two leaders are also reportedly in discussion for a merger, but there’s plenty of room for an innovative player like OurPet’s.
When OurPet’s jumped into the pet specialty business nearly 20 years ago, there was an obvious lack in product innovation and new product development. It’s within this void that the company initially focused its sights and has continued to excel. In the last five years, OurPet’s used this focus as an anchor during its transition from a small to a medium-sized company. Today, OurPet’s has an intellectual property portfolio featuring more than 160 individual patents.
The overarching ongoing capitalization strategy is to execute the aggressive development of innovative products to successfully push through adverse market conditions to achieve increases in revenue, margins and net income.
By maintaining an active new product development program built on these patents, and a proven history of churning out and bringing to market evolutionary and revolutionary products, OurPet’s enjoys global sales via specialty retailers, food, drug and mass chains, and e-commerce and international channels. A look at the company’s third-quarter results demonstrates the efficiency of this model.
OurPet’s this morning reported record third-quarter revenue of $5.99 million, an increase of 7% from $5.60 million in revenues for the comparable three months of 2014. Net income for the third quarter increased 428% to $410,450, or $0.02 diluted earnings per share, compared to $77,751, or $0.00, for the year prior.
For comparison, in March, PetSmart reported a 6.0% increase in fourth quarter 2015 sales and an increase of 8.7% increase non-GAAP net income over the prior year.
Commenting on its impressive quarterly performance and innovation behind the growth, Dr. Steven Tsengas, OurPet’s president and CEO, stated, “We are pleased with our results for the third quarter in which we achieved record net revenue, gross margins improving to 34%, and net income from operations of almost 11% of sales. We continue to see strong sales growth in the Pet Specialty channel driven by our cat toys and bowls/feeder lines. E-commerce sales rebounded and grew 7% while the Food, Drug, Mass channel slightly decreased; however, we anticipate improved sales as the conversion to the Pet Zone brand is completed by year end… With the recent and anticipated introduction of a significant number of new innovative products in all our product categories, we are experiencing robust sales activity. Our Catty Whack™, winner of the SuperZoo ‘Best New Cat Product’ award, is beginning to ship and is receiving strong consumer reaction. We expect to release more information on other major, trend-setting products over the next six months.”
In its news release this morning, OurPet’s alluded confidence in its ability to maintain growth momentum moving forward. The company continues to dig its heels into the innovation-thirsty pet industry to capture its fair share of the market and deliver new products poised to take the industry by storm.
For more information visit www.ourpets.com
