OurPet’s: Revenue Rises 24%, Expanding in Emerging Markets
OurPet’s Company (OTC:OPCO) distributes its products through PetSmart, Inc. (NASDAQ:PETM) and Wal-Mart Stores, Inc. (NYSE:WMT) in addition to several others in the retail pet supply business. OurPet’s holds a number of patents that are essential in lifting the company to new heights, which could be seen in the near term.
Unique Market Advantages
OurPet’s Company develops, manufactures and markets products for the retail pet business. The company sells its products around the world and manufactures them through foreign and domestic subcontractors.
The company’s products are marketed under Flappy (www.flappy.com), SmartScoop (www.smartscoop.com), ecoPure Naturals (www.ecopurenaturals.com), Play-N-Squeak (www.playnsqueak.com) and other brands. As a public company, OurPet’s Company maintains a competitive advantage to raise the capital needed to develop and support its product lines, unlike the plethora of private pet companies.
The total USA pet industry has grown from approximately $16 billion in 1995 to over $45 billion in 2009. Pet owners spend approximately $1500 per cat and $2,500 per dog annually. According to the APPA (American Pet Products Association) there are 93 million dogs and 75 million cats in the USA. Approximately 70 million or 63% of American homes have at least one pet. OurPet’s has many products to offer this healthy, recession resistant, growing market.
The Play-N-Squeak is a very popular toy among cat owners. The product looks like a mouse, feels like a mouse and sounds like a mouse as it plays a realistic electronically pre-recorded live mouse squeak when agitated. A newer version coming soon will also include small LED eyes that blink when agitated for fun and games during the night. OPCO sells about $4 million of these adorable toys every year.
Bold Revenues and Capturing Emerging Markets
Of the annual $45 billion in pet market sales, approximately $12 billion is in pet accessories and treats. OurPet’s managed to increase their revenue by an incredible 24.2% for the second quarter of 2010 when compared to the same period in 2009. The Company has a five-year annual organic revenue growth goal of 25 percent and a minimum profit before taxes of 12-15 percent. Any strategic acquisitions would accelerate these results.
OurPet’s has found success in a recessionary market through extensive market penetration, market diversification, aggressive product innovation and expert implementation. OurPet’s introduced over 100 new products (SKUs) during the first half of 2010. Furthermore, the Company has an extensive intellectual property portfolio of over 100 patents issued or pending and over 75 trademarks issued or pending. This intellectual property base is expected to significantly increase over the coming years due to aggressive innovative product development.
OPCO managed to increase exports from $250,000 to over $2,000,000 over the past three years. The company’s exporting market is growing in Canada, the UK, Belgium, Norway, Finland, Denmark, Japan, Taiwan, Australia and New Zealand. The company is also making headway in South America, and has recently developed their first distributorship in India.
Places around the world that could not afford pets 10 years ago are now buying droves of household pets, especially cats and dogs. OurPet’s is capitalizing on both markets and is now targeting the 8,000+ independent pet stores and regional chains in the United States.
Sun Rising on OPCO
Investors may be scratching their heads at why this company is not huge already. Applica Consumer Products, who at the time was a subsidiary of Salton Inc., sued OurPet’s in the fall of 2007 when the Company introduced its SmartScoop Automatic Litter Box that competed with Applica’s LitterMaid Automatic Litter Box. The SmartScoop was developed by Nottingham Spirk Design (www.ns-design.com). Nottingham Spirk design is one of the top five one-stop ideation companies in the United States and a major OurPet’s shareholder.
Although it required significant expenditures of management’s time and financial resources, OurPet’s has successfully defended its SmartScoop intellectual property, continued the manufacture and sale of the product and was granted a patent in December 2009 by the U. S. Patent Office. Arguments on one remaining claim were presented to the Federal Court of Appeals in Washington D.C. District in September 2010 and a decision is expected in 30-90 days. A favorable decision by the Washington D. C. Court Of Appeals on this last claim will result in a dismissal of all eight claims filed against Smartscoop/OurPet’s in 2007. The other seven claims were dismissed by the ITC in 2009. OurPet’s feels that SmartScoop provides the most viable, economical and reliable solution to the $70-80 million annual revenue that automated cat litter boxes generate.
OurPets is developing quality products that animal lovers around the world adore. The company is serving the 75 million dogs and the 93 million cats that are in the United States, and is further expanding their foothold into international markets. The pet market is healthy, recession resistant and growing at an annual rate of approximately 6 percent. The accessory segment at OurPet’s is growing at double this rate. OurPet’s formula of aggressive product innovation and marketing should continue producing exciting revenue and profits into the foreseeable future.
For more information visit www.ourpets.com.
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