OurPet's Releases Second Quarter Results; Sales Increase 13%; Profit Margin Increases

Agreement with Bonybone S.A. de C.V. Signed; Heather L. Novak appointed Vice President of Marketing


FAIRPORT HARBOR, Ohio, August 4, 2003 (PRIMEZONE) -- OurPet's Company (OTCBB:OPCO) today reported financial results for its second quarter and six months ended June 30, 2003. Net sales for the second quarter were $1,152,000, an increase of 13% compared to $1,023,000 for the prior year second quarter. Gross profit as a percent of net sales increased to 23% as compared to 22% in the prior year. The loss from operations was $81,000 compared to a loss from operations for the prior year of $126,000 for an improvement of $45,000 or 35%. Net loss for the quarter was $148,000 compared to a net loss for the prior year of $156,000 for an improvement of $8,000. The Net Loss for second quarter 2003 includes a one-time, special charge of $40,183 related to the liquidation of excess inventory. The second quarter 2002 results do not reflect any such special charges.

For the first half of 2003 net sales were $2,428,000, an increase of 24% compared to $1,959,000 for the prior year first half. Gross profit as a percent of net sales increased to 25% as compared to 21% in the prior year. The loss from operations for the first half decreased to $45,000 from a loss of $217,000 for an improvement of $172,000 or 79%. Net loss for the first half was $138,000 compared to a net loss for the prior year of $274,000 for an improvement of $136,000. As reported previously, the first half 2003 results include a special, one-time charge of $40,183 related to the liquidation of excess inventory.

The following table summarizes financial highlights for the Second Quarter and Six Months:


                      Second Quarter             Six Months
                      --------------             ----------
               2003        2002    Change    2003       2002    Change
               ----        ----    ------    ----       ----    ------
 Net Sales  $1,152,188  $1,022,648  +13%  $2,428,471  $1,958,515  +24%
 Gross 
  Profit       268,484     225,447  +19%     596,932     420,497  +42%
 Loss From 
  Operations   (81,369)   (125,738) +35%     (45,034)   (217,312) +79%
 Net Loss     (148,263)   (155,690)  +5%    (138,124)   (273,684) +50%
 Loss Per 
  Share(a)       (0.02)      (0.02)  --        (0.02)      (0.03) +33%

 (a) Basic and diluted net loss per common share after dividend 
     requirements for preferred stock.

Dr. Steven Tsengas, President and CEO of OurPet's, stated, "In spite of soft general economic and consumer spending conditions, we were able to increase sales through expanding our product and customer base as well as through increased promotional efforts. Our customers have enthusiastically accepted our new products such as OurCat's Choice Premium Cat Litter, Gourmet Gravy, Gourmet Spray and Butterfly Ball. We plan to continue such marketing efforts and new product introductions in the future."

Dr. Tsengas added "During the quarter, OurPet's achieved increases in profit margins by limiting the increase in cost of goods sold and selling, general and administrative expenses. Based upon the results for the six months, OurPet's expects to meet its previously announced guidance projection for FY 2003 of $7,200,000 in gross revenues and $388,000 in pretax income."

OurPet's recently signed a marketing agreement with Bonybone S.A. de C.V. of Mexico to market the proprietary Gourmet Rawhide Bone in the United States and Canada on an exclusive basis and on a non-exclusive basis in the rest of the world. "We are very excited about this innovative, healthy product since it is primarily made of rawhide protein instead of starch and meat byproducts, helps clean and exercise the teeth and gums, is safe and long-lasting and very palatable," said Dr. Tsengas. The Gourmet Rawhide Bone, along with the Gourmet Spray, Gravy, IcePudding and Supplements, will significantly enhance OurPet's offering of healthy consumable products. Approximately 90 percent of dog owners buy rawhide products for their dogs (see note). "We are very pleased to be associated with OurPet's and its strong international sales and marketing capability," said Senor Angel Chahin Maluly, Director of Bonybone Operations.

Ms Heather L. Novak has joined OurPet's as Marketing Vice President. Novak received a BA in Chemistry and Psychology from Miami University, Oxford, OH and an MBA from Case Western Reserve University, Cleveland, OH. Prior to joining OurPet's, Novak made significant contributions at The Sherwin-Williams Company as product development chemist, marketing manager and product manager. "Since my father is a veterinarian, I have been around pets all my life -- I love them," said Novak. "We are very pleased to have someone with Novak's talents and passion for pets on our team," commented Dr. Tsengas.

OurPet's designs, produces and markets in the USA and overseas a broad line of innovative, high-quality accessory and consumable pet products. Investors and customers may visit www.ourpets.com for more information about the company and its products. The American Pet Products Manufacturers' Association (APPMA) (see note) survey estimates the U.S. market for pet products at $31 billion, with a long-term annual growth rate of 8-15 percent. The APPMA estimates that 64 million U.S. households report owing a pet, including 65 million dogs, 77.7 million cats and 17.3 million birds.

Note: APPMA, 2002/2003 National Pet Owners Survey

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements contain the words "projects," "anticipates," "believes," "expects," "intends," "will," "may" and similar words and expressions. Each such statement is subject to uncertainties, risks and other factors that could cause actual results or performance to differ materially from the results or performance expressed in or implied by such statements. The forward-looking statements in this news release that contain projections of the company's expected financial performance and other projections regarding future performance are inherently subject to change, given the nature of projections, and the company's actual performance may be better or worse than projected. Uncertainties, risks and other factors that may cause actual results or performance to differ materially from any results or performance expressed or implied by forward-looking statements in this news release include: (1) the company's ability to manage its operating expenses and realize operating efficiencies, (2) the company's ability to maintain and grow its sales with existing and new customers, or (3) the company's ability to secure access to sufficient capital on favorable terms to manage and grow its business. A discussion of other risk factors that may cause actual results to differ from the results expressed in or implied by these forward-looking statements can be found in the company's periodic filings with the SEC. The company disclaims any duty to provide updates to the forward-looking statements and projections made in this news release.


                   OURPET'S COMPANY AND SUBSIDIARIES
                     CONSOLIDATED OPERATING RESULTS
                                (unaudited)

                   For the Six Months Ended    For the Quarter Ended
                           June 30,                   June 30,    
                      2003         2002         2003         2002

 Net sales            $2,428,471  $1,958,515  $1,152,188  $1,022,648
 Less: Costs and 
  expenses
  Cost of goods
   sold                1,831,539   1,538,018     883,704     797,201

  Selling, general 
   and 
   administrative 
   expenses              641,966     349,853     637,809     351,185
  Interest and 
   other income 
   and expense            40,178      (1,321)     40,181         (17)
  Interest expense        52,912      57,693      26,713      29,969
                      ----------  ----------  ----------  ----------
 Net loss             $ (138,124) $ (273,684)  $(148,263) $ (155,690)
                      ==========  ==========  ==========  ==========
 Basic and Diluted 
  Loss Per Common 
  Share
 After Dividend 
  Requirements For 
  Preferred Stock     $    (0.02)  $   (0.03)   $  (0.02) $    (0.02)

               CONSOLIDATED BALANCE SHEETS


                                              June 30,   December 31,
                                                2003         2002
                                            (unaudited)    (audited)
 ASSETS

   Cash and equivalents                    $   75,117   $   36,434
   Receivables, net                           591,321      660,214

   Inventories                              1,644,255    1,702,847
   Prepaid expenses                           152,334       30,006
                                           ----------   ----------
           Total current assets             2,463,027    2,429,501
   Property and equipment, net                831,547      806,054
   Other                                      140,403      136,124
                                           ----------   ----------
           Total assets                    $3,434,977   $3,371,679
                                           ==========   ==========
 LIABILITIES AND STOCKHOLDERS' EQUITY

   Short-term borrowings 
    and current maturities
    of long-term debt                      $1,338,764   $1,410,399
   Accounts payable                           825,863      607,459

   Accrued expenses                           168,217      139,438
                                           ----------   ----------
    Total current liabilities               2,332,844    2,157,296
   Long-term debt                             179,868      153,994
   Stockholders' equity                       922,265    1,060,389
                                           ----------   ----------

    Total liabilities and 
     stockholders' equity                  $3,434,977   $3,371,679
                                           ==========   ==========


            

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