FAIRPORT HARBOR, OH--(Marketwire - March 16, 2011) - OurPet's Company (OTCBB: OPCO) (www.ourpets.com), a leading proprietary pet supply company, today reported record financial results for the fourth quarter and for the year ended December 31, 2010. These results include those of Cosmic Pet Products ("Cosmic Pet") which sold certain inventory, equipment and product rights to OurPet's effective July 29, 2010.

Dr. Steven Tsengas, President and CEO, remarked, "We are pleased with the record fourth quarter net revenue and net income which reflect solid organic growth and the full integration of Cosmic Pet. During the quarter we completed the installation of an enterprise resource planning ("ERP") system at Cosmic Pet, enhanced its operations, and significantly improved customer service and on-time delivery. We ended 2010 with sales momentum and were better positioned to meet the increased demand for our products."

Since the Cosmic Pet transaction in late-July 2010, OurPet's has upgraded and expanded its line of branded catnip toys and accessory products. These exciting products, along with the expanded Go!CatGo!™ opening price point cat toys and Play-N-Squeak® upscale cat toys are being featured this week at the Global Pet Exposition in Orlando, Florida. It is one of the largest and most heavily attended pet expositions in the world. The Company is introducing more than 150 new products at this exposition, highlighted by the re-launch of the new and highly improved SmartScoop® automatic cat litter box.

2010 Fourth Quarter Results

Net revenue increased 25% to a record $4,690,500 for the 2010 fourth quarter, from $3,741,050 for the same period in 2009. The sales comparison particularly benefited from higher sales of Play-N-Squeak cat toy products, Durapet® stainless steel bonded rubber bowls and Cosmic Pet products.

Gross profit increased 11% to $1,244,738 for the 2010 fourth quarter from $1,120,524 a year ago. Gross profit margin declined to 26.5% for the 2010 fourth quarter from 30.0% for the same period last year. This was primarily due to higher manufacturing costs, Cosmic Pet transition costs, installation activities related to implementation of the new ERP system and operational improvements, including infrastructure and personnel, to prepare OurPet's to meet expected future customer demands.

The final phase of the Company's ERP system is scheduled to be installed during April 2011. This important milestone is expected to result in improved supply chain management with the recent addition of highly skilled personnel, better inventory controls, improved customer service and overall operational efficiencies throughout the Company.

Income from operations doubled to $455,329 for the 2010 fourth quarter from $225,730 for the same period last year. Included in the 2010 fourth quarter income from operations is a one-time gain of $240,623 resulting from an independent third party valuation of certain Cosmic Pet tangible assets.

The Company updated its estimate of tax loss carryforwards including utilization and recognized a deferred tax benefit of $5,451 during the 2010 fourth quarter resulting in net income tax expense of $16,068. The Company recognized a net tax benefit of $137,604 for the 2009 fourth quarter, primarily from the recognition of a deferred tax asset.

Net income increased 24% to $396,533 for the 2010 fourth quarter from $319,136 for the same period in 2009. Fully diluted earnings per share were 2 cents for both periods despite an 18% increase in the weighted average number of fully diluted common and equivalent shares outstanding compared to a year ago. This increase was principally due to the higher common stock price for the quarter ended December 31, 2010.

Bank Financing

The Company recently increased its Line of Credit to support working capital needs resulting from its current and anticipated growth. During the 2010 fourth quarter the Company's Line of Credit was increased by $300,000. Subsequent to December 31, 2010, it was increased further by $450,000 to a total of $3,250,000.

2010 Twelve Month Results

Net revenue increased 20% to a record $17,091,741 for the year ended December 31, 2010, from $14,251,786 for the same period a year ago.

Gross Profit increased 12% to $4,799,482 for the twelve month ended December 31, 2010 from $4,280,090 for the prior year. Gross profit margin was 28.1% for the year ended December 31, 2010 compared to 30.0% for the year 2009. This decrease was primarily due to costs related to the integration of the Cosmic Pet operations as well as higher than anticipated warehouse freight, labor and overhead costs.

Income from operations increased 54% to $1,222,250 for the year 2010 from $791,522 for the prior year. The 2010 results include a one-time gain of $240,623 from the increased valuation of certain Cosmic Pet intangible assets.

The Company recognized $99,555 of income tax expense for the year 2010 due to updated estimates of its tax liabilities and loss carryforwards utilization compared to a net tax benefit of $124,994 recognized for the same period a year ago.

Net income increased 27% to $986,534 for the year ended December 31, 2010 compared to $775,767 for the same period last year. Fully diluted earnings per share were 5 cents for both periods despite a 23% increase in the weighted average number of common and equivalent shares outstanding at December 31, 2010 compared to the same date in 2009. This increase was principally due to the higher price of the common stock price during the year, as well as the issuance of convertible preferred stock during the 2010 first quarter.

Stockholders' equity was $5,033,248 at December 31, 2010, an increase of 69% compared to $2,975,773 on the same date in 2009.

Looking to the Future

Dr. Tsengas commented, "We are optimistic for 2011 and beyond. With the SmartScoop litigation behind us, the integration of Cosmic Pet completed, and a pipeline full of new, exciting products we are committed to fully pursuing our growth formula, including product innovation, leading brand development, aggressive marketing and sales and strategic acquisitions/key partnerships in order to achieve superior revenue and profit results for our shareholders."

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, www.clipnosis.com, www.hideperchandgo.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.


                         For the Years Ended        For the Quarter Ended
                             December 31,               December 31,
                       -------------------------  ------------------------
                           2010         2009          2010         2009
                       -----------  ------------  -----------  -----------

Net revenue            $17,091,741  $ 14,251,786  $ 4,690,500  $ 3,741,050
Cost of goods sold      12,292,259     9,971,696    3,445,762    2,620,526
                       -----------  ------------  -----------  -----------
   Gross profit on
    sales                4,799,482     4,280,090    1,244,738    1,120,524

Selling, general and
 expenses                3,704,994     3,114,960    1,025,182      830,522
Litigation expense         112,861       373,608        4,850       64,272
Gain on Asset Purchase     240,623             -      240,623            -
                       -----------  ------------  -----------  -----------
   Income (loss) from
    operations           1,222,250       791,522      455,329      225,730
Other income and
 (expense), net                  1        38,153           (3)         (74)
Interest expense           136,162       178,902       42,725       44,124
                       -----------  ------------  -----------  -----------
Income before taxes      1,086,089       650,773      412,601      181,532

Income Tax (expense)
 benefit                   (99,555)      124,994      (16,068)     137,604
                       -----------  ------------  -----------  -----------
Net Income             $   986,534  $    775,767  $   396,533  $   319,136
                       ===========  ============  ===========  ===========

Basic and Diluted Net
 Income (Loss) Per
 Common Share After
 Dividend Requirements
 For Preferred Stock   $      0.05  $       0.05  $      0.02  $      0.02
                       ===========  ============  ===========  ===========

Weighted average
 number of common and
 equivalent shares
 outstanding used to
 calculate basic and
 diluted earnings per
 share                  19,102,046    15,523,288   19,865,247   16,897,046
                       ===========  ============  ===========  ===========

                       CONSOLIDATED BALANCE SHEETS

                                                        December 31,
                                                     2010          2009
                                                 ------------  ------------
   Cash and equivalents                          $     78,673  $     84,555
   Receivables, net                                 2,657,865     1,881,179
   Inventories                                      5,576,129     2,984,035
   Prepaid expenses                                   210,340        93,130
   Deferred Tax Asset net                              55,116       125,370
                                                 ------------  ------------
           Total current assets                     8,578,123     5,168,269
   Property and equipment, net                      2,260,873     1,954,805
   Intangible Assets                                  461,000             -
   Other assets                                       536,075       475,668
                                                 ------------  ------------

           Total assets                          $ 11,836,071  $  7,598,742
                                                 ============  ============

   Notes payable                                 $  2,628,000  $    949,000
   Current maturities of long-term debt               946,216       956,589
   Accounts payable                                 1,926,499     1,046,101
   Accrued expenses                                   504,504       417,199
                                                 ------------  ------------
           Total current liabilities                6,005,219     3,368,889
   Long-term debt                                     797,604     1,254,080
   Stockholders' Equity                             5,033,248     2,975,773
                                                 ------------  ------------

            Total liabilities and stockholders'
             equity                              $ 11,836,071  $  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