There
are very few industries that can claim going through recession relatively
unscathed, and the pet industry is one of them. Growing steadily by
approximately 5.4% every year since 2002, the industry continues the trend this
year as well, being expected to reach $62.75 billion in revenue in the U.S. by
the end of the year. This figure marks a 4% increase from 2015. The trend is
largely due to a general tendency to humanize our pets and treat them as
members of the family, offering them the best care possible, whether it’s
high-end accessories, medical services or super premium food.
Although
competition is fierce, companies offering innovative or niche products are
highly successful and anticipate the global growth trend to be mirrored by
their own revenue this year. This is also the case of OurPet’s Company (OTCQX:
OPCO), a leading provider of proprietary pet products in the United States and
overseas. The company designs and manufactures a wide range of innovative,
high-quality accessories and products, from toys to feeding and waste
management solutions.
After
a strong showing and record results in Q1 (http://nnw.fm/SW0Tp), the company
reported a slight decline in revenue for the second quarter to $5.4 million,
2.7% lower than the $5.6 million reported in Q2 2015. The decline was caused
primarily by a temporary drop in purchase orders from various major retail
customers. The drop in orders does not however signal a reduced interest in the
company’s offering. On the contrary, it was due to a major retailer clearing
out its existing inventory to make room for upcoming OurPet’s products to be
launched in the second half of 2016. The Q2 report also indicated that the
company had a record order pipeline of $1.9 million and that, despite the
temporary drop in sales, it was able to reduce inventory to a little under $7.2
million from $8 million at the beginning of the year.
The
company’s CEO, Dr. Steven Tsengas, is not overly concerned about the lower
revenue numbers and believes that if the inventory reduction hadn’t happened,
OPCO would have shown strong growth in Q2 as well.
In
addition, Dr. Tsengas is confident that the company will catch up in the second
half of 2016. Based on the overall market tendencies, historical performance
and the new products it will put on the market, OurPet’s anticipates a solid
performance and record revenue again in Q3 and Q4, especially on the heels of
its SuperZoo National trade show participation in early August. At the event,
the company launched a strong showing of innovative pet products, including
OurPets® Switchgrass Natural Cat Litter™ (http://nnw.fm/4LFug) – a high-end,
all natural and fully biodegradable litter, and the Intelligent Pet Care™
(http://nnw.fm/Tp7gJ) BlueTooth® line of products, which monitor pet behavior
via a smartphone app. OurPet’s also recently introduced a new generation of
electronic cat toys.
For
more information, visit the company’s website at www.ourpets.com
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