OurPet's Company Reports Record 2010 Second Quarter Results

FAIRPORT HARBOR, OH--(Marketwire - July 27, 2010) - OurPet's Company (OTCBB: OPCO) (www.ourpets.com), a leading proprietary pet supply company today reported record financial results for its second quarter ended June 30, 2010.

Dr. Steven Tsengas, President and CEO, said, "We are pleased with our record 2010 second quarter and year-to-date results. They were achieved despite sluggish economic conditions and reflect increased penetration of our branded products in key segments of the market. These record results demonstrate the soundness of our multi-pronged growth strategy. We expect stronger performance during the second half of 2010 compared to the first six months of this year."

Dr. Tsengas, continued, "We are very encouraged by our growth opportunities and performance outlook for the remainder of 2010. The purchase of certain assets of Cosmic Pet Products, which is on schedule to close during the 2010 third quarter, and the planned launch of more than 100 new products this year position us more favorably for 2011."

"According to our most recent research Cosmic Catnip, Cosmic Pet's leading product, has twice the brand awareness as its next closest competitor, 2.5 times the past purchase behavior as its next closest competitor, and three times the quality rating as its next closest competitor. We anticipate that Cosmic Pet Products will accelerate our future sales and profit while also complementing the exciting organic growth opportunities we are pursuing."

2010 Second Quarter Results

Net revenue increased 24% to a record $4,477,863 for the 2010 second quarter from $3,605,332 for the same period in 2009. The Company's sales particularly benefited from the introduction of additional dog toys during the 2010 second quarter. More products will be introduced during the second half of 2010 consistent with the planned launch of more than 100 new products this year.

Gross profit rose 26% to $1,363,415 for the 2010 second quarter from $1,083,644 a year ago. Gross profit margin increased to 30.5% for the 2010 second quarter from 30.1% for the 2009 second quarter, despite price and cost pressures. Plans focused on tight control of costs continue to be implemented throughout the company to achieve increased efficiencies.

Income from operations increased 104% to $415,168 for the 2010 second quarter from $203,583 for the same period last year. This was attributable to the increase in net revenues and higher gross profit margin, which were partially offset by higher selling, general and administrative expenses related to product development and sales and marketing activities. The 2010 second quarter results also benefited from lower litigation expense.

The Company recognized $94,230 in income tax expense during the 2010 second quarter due to expected utilization of tax loss carry forwards that reduced net deferred tax assets.

Net income increased 50% to $292,911 or $.01 per diluted share for the 2010 second quarter from $194,933 or $0.01 per share for the 2009 second quarter. The weighted average number of common and equivalent shares outstanding increased approximately 19% to 19,051,602 for the 2010 second quarter compared to a year ago, principally due to the increase in the common stock price during the quarter ended June 30, 2010 as well as the issuance of convertible preferred stock earlier this year.

2010 First Half Results

Net revenue increased 16.1% to a record $8,121,796 for the six months ended June 30, 2010 from $6,995,711 for the same period a year ago. Sales for the first half of 2010 benefited from additional dog toys introduced this year.

Gross profit rose 20% to a record $2,509,814 for the six months ended June 30, 2010 from $2,083,712 for the same period last year. Gross profit margin increased 1.1 percentage points to 30.9% from the first six months of 2009 principally due to maintaining tight cost controls of operating overhead.

Income from operations increased 115% to a record $705,995 for the six months ended June 30, 2010 from $328,764 for the same period last year. This was attributable to the increase in net revenues and increased gross profit margin, which were partially offset by higher selling, general and administrative expenses related to product development, sales and marketing activities, and also benefited from lower litigation expense.

The Company recognized $93,003 in income tax expense for the six months ended June 30, 2010 due to expected utilization of tax loss carry forwards that reduced net deferred tax assets.

Net income increased 103% to a record $555,157 or $0.03 per diluted share for the six months ended June 30, 2010 from $273,543 or $0.02 per share for the same period last year. The weighted average number of common and equivalent shares outstanding increased approximately 14% to 18,263,100 for the six months ended June 30, 2010 compared to a year ago, principally due to the increase in the common stock price during the six months ended June 30, 2010, as well as the issuance of convertible preferred stock earlier this year.

About OurPet's Company

OurPet's designs, produces and markets a broad line of innovative, high-quality accessory and consumable pet products in the U.S. and overseas. Investors and customers may visit www.ourpets.com for more information about the Company and its products. The Company's Websites include: www.smartscoop.com, www.ecopurenaturals.com, www.playnsqueak.com, and www.flappydogtoys.com.

Certain of the matters set forth in this press release are forward-looking and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are the following: business conditions and growth in the industry; general economic conditions; addition or loss of significant customers; the loss of key personnel; product development; competition; risks of doing business abroad; foreign government regulations; fluctuations in foreign rates; rising costs for raw materials and the unavailability of sources of supply; the timing of orders booked; and the other risks that are described from time to time in OurPet's SEC reports.

                    OURPET'S COMPANY AND SUBSIDIARIES
                      CONSOLIDATED OPERATING RESULTS


                           For the Six Months Ended  For the Quarter Ended
                                   June 30,                June 30,
                            ----------------------- -----------------------
                                2010        2009        2010        2009
                            ----------- ----------- ----------- -----------

Net revenue                 $ 8,121,796 $ 6,995,711 $ 4,477,863 $ 3,605,332
Cost of goods sold            5,611,982   4,911,999   3,114,448   2,521,688
                            ----------- ----------- ----------- -----------
   Gross profit on sales      2,509,814   2,083,712   1,363,415   1,083,644

Selling, general and
 administrative expenses      1,747,861   1,509,274     928,097     798,700
Litigation expense               55,958     245,674      20,150      81,361
                            ----------- ----------- ----------- -----------
   Income (loss) from
    operations                  705,995     328,764     415,168     203,583
Other income and (expense),
 net                                  -      37,720           -      37,722
Interest expense                 57,835      84,531      28,027      42,172
                            ----------- ----------- ----------- -----------
Income before taxes             648,160     281,953     387,141     199,133

Income Tax expense               93,003       8,410      94,230       4,200
                            ----------- ----------- ----------- -----------
Net Income                  $   555,157 $   273,543 $   292,911 $   194,933
                            =========== =========== =========== ===========


Basic and Diluted Net
 Income (Loss) Per Common
 Share After Dividend
 Requirements For
 Preferred Stock            $      0.03 $      0.02 $      0.01 $      0.01
                            =========== =========== =========== ===========

Weighted average number of
 common and equivalent
 shares outstanding used to
 calculate basic and
 diluted earnings per share  18,263,100  15,984,780  19,051,602  16,005,237
                            =========== =========== =========== ===========




                    OURPET'S COMPANY AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS


                                                   June 30,    December 31,
                                                     2010          2009
                                                 ------------  ------------
ASSETS
  Cash and equivalents                           $     72,312  $     84,555
  Receivables, net                                  2,445,990     1,881,179
  Inventories                                       3,478,681     2,984,035
  Prepaid expenses                                    235,008        93,130
  Deferred Tax Asset net                               31,090       125,370
                                                 ------------  ------------
    Total current assets                            6,263,081     5,168,269
  Property and equipment, net                       2,037,141     1,954,805
  Other                                               807,558       475,668
                                                 ------------  ------------

    Total assets                                 $  9,107,780  $  7,598,742
                                                 ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY
  Notes payable                                  $  1,445,000  $    949,000
  Current maturities of long-term debt                550,588       956,589
  Accounts payable                                  1,493,983     1,046,101
  Accrued expenses                                    335,215       417,199
                                                 ------------  ------------
    Total current liabilities                       3,824,786     3,368,889
  Long-term debt                                      855,850     1,254,080
  Stockholders' Equity                              4,427,144     2,975,773
                                                 ------------  ------------

    Total liabilities and stockholders' equity   $  9,107,780  $  7,598,742
                                                 ============  ============

Contact Information: CONTACT: OurPet's Company Dr. Steven Tsengas CEO (440) 354-6500 (Ext. 111) INVESTOR RELATIONS: Robert A. Lentz and Associates, Inc. Robert Lentz (614) 876-2000