OurPet''s Company (fka OPCO)

[beigledog]

The stock is probably down today due to the lower margins. I emailed Dr. Steve this morning and got the following response:

Hey Dr. Steve,



Once again…great quarter.



-You mentioned that the gross margins were down year over year, but you made no mention as to why. What was the cause? Was it the mix of products? Higher costs? Improvement in working capital (which I like, by the way) caused lower gross margins?

Lower GM of PetZone products, aggressive promotions to enter/expand certain key accounts (paid off later in the year), some increase in plastic products that were offset by reduction of the cost of imported goods (later in the year).



-When you say “more in line with historic first half growth rates” does that mean 20-25% revenue growth?

More in that line for the first half. We are launching the SmartScoot cat waste management product line (including an automatic cat litter box) and the ecoPure natural product line at Global tomorrow. These will start hitting the market in the next 2-5 months and should have sigificant impact in the latter two quareters. Long term investment!



Thanks and keep up the good work!

Thanks for your continued interest and best regards -- Dr. Steve