Dogness Reports First Half Fiscal Year 2021 Financial Results
Dogness reported a 6.7% year-over-year revenue increase to $12.2 million, driven by a 60.3% surge in smart pet product sales. U.S. sales rose 41.7%, while China saw a 4.8% increase. Gross margin improved to 39.1%, with comprehensive income reaching $5.0 million compared to a $1.2 million loss the previous year. EPS rose to $0.03, up from a loss of $0.01. The company expands its distribution networks, including agreements with major retailers like Petco, Costco, and Chewy. Continuous product innovation is expected to further boost profitability.
- Revenue increased by 6.7% year-over-year to $12.2 million.
- Sales of smart pet products surged by 60.3%, accounting for 27.6% of total revenue.
- Gross margin improved to 39.1%, a 6.2 percentage point increase.
- Comprehensive income rose to $5.0 million, compared to a loss of $1.2 million the previous year.
- EPS grew to $0.03 from a loss of $0.01.
- New agreements with major retailers such as Petco, Costco, and Chewy expand distribution.
- None.
- Revenue Increases
6.7% YoY to$12.2 Million 60.3% YoY Increase in Sales of Intelligent Pet Products- U.S. Sales Increase
41.7% YoY - China Sales Increase
4.8% YoY - Gross Margin Improves to
39.1% - Comprehensive Income Increases to
$5.0 million from a Loss of$1.2 million a Year Ago - EPS Grows to
$0.03 per Basic and Diluted Share from a Loss of$0.01 per Basic and Diluted Share a Year Ago
PLANO, Texas, June 4, 2021 /PRNewswire/ -- Dogness (International) Corporation ("Dogness" or the "Company") (NASDAQ: DOGZ), a developer and manufacturer of a comprehensive line of Dogness-branded, OEM and private label pet products, today announced its unaudited financial results for the six months ended December 31, 2020.
Silong Chen, Chairman and Chief Executive Officer of Dogness, commented, "We made excellent progress as we continue to drive our growth strategy and help customers adjust to COVID-19's challenges. Our supply chain initiatives gave us a competitive advantage as we were able to get the products customers needed to their favorite retailers to buy, while other suppliers were stuck on ships or in overseas ports. This is a testament to our operations team, which quickly adjusted to the changing supply chain conditions and logistics hurdles. During this period, we maintained extra close engagements with our customers, as we worked to understand their multi-quarter demand forecasts in order to have adequate inventory on hand of the right products."
Mr. Chen continued, "We continue to do a great job expanding our distribution footprint in all key markets and all channels. For example, we recently announced agreements with Petco, Costco and Chewy, to name a few. In December, we also announced an OEM order for harnesses, leashes and other pet products, expected to be valued at
Financial Results for the Six Months Ended December 31, 2020
Revenue for the six months ended December 31, 2020 increased
Sales of smart pet products increased
During the six months ended December 31, 2020, Dogness' products were sold in 25 countries. Export sales accounted for
Cost of revenues was approximately
Gross profit increased by approximately
Comprehensive income was approximately
The Company had a
New State-of-the-Art Facility Opened
Over the last 18 years, Dogness has been an innovation leader, which gives the Company a distinct competitive advantage. The Company took another major step forward with the grand opening of its new high-tech headquarters in November 2020. The new Dogness headquarters, based in Dongguan, China, features an expansive 30,000 square meter high-tech campus, with dedicated state-of-the-art facilities for manufacturing, R&D, sales and marketing, IoT platform, warehousing and logistics, and more. The new headquarters also includes a dynamic showroom to display the full range of Dogness pet products, many of which are covered under the Company's more than 200 domestic and foreign patents. The new premier location builds upon the Dogness employee-focused culture and will be a recruiting advantage as the Company attracts top notch talent in support of its continuous R&D effort and increased customer demand.
Recent Business Highlights
May 12, 2021 – Secured over RMB 2 million in new orders and received two prestigious gold awards for Quality Ingenuity and Brand Quality at the 7th China (Shenzhen) International Pet Supplies Exhibition trade show. This was one of the first in-person trade show events since COVID-19 hit and the Shenzhen pet expo far exceeded the Company's expectations.
April 8, 2021 – Reported its e-commerce sales in China increased 24 times for calendar year 2020, as compared to calendar year 2019. Led by the Company's expanded smart pet product line, Dogness is far outpacing the overall market, with its online sales in China in calendar year 2020 increasing approximately 2,400 percent, compared to approximately 2 percent overall growth for China's urban pet market (dog and cat).
March 2, 2021 – Announced the launch of the latest Dogness Smart GPS Pet Tracker, the next generation of smart pet tracking, boasting real-time positioning with pin point accuracy. Dogness anticipates initial delivery in the second quarter of 2021.
January 20, 2021 – Closed a previously announced offering with institutional investors, raising approximately
January 14, 2021 – Received formal initial orders for more than 4,000 units of its 2L programmable automatic dog and cat feeders from Petco, which operates approximately 1,600 retail stores across the U.S. This order follows the successful fulfillment of Petco's previous test program orders, as Dogness expands its relationship with one of the pet industry's largest, most successful online and retail companies.
December 17, 2020 – Appointed Andy Alfaro as a national sales director. Mr. Alfaro brings over thirty years of experience in sales to Dogness. His proven success managing national and regional retail, wholesale and e-commerce accounts includes Best Buy, Amazon, Wal-Mart, Sam's Club, JCPenney, Shop HQ, Michaels, Home Depot, 7-11, Synnex, Superior and Petra.
December 7, 2020 – Announced an OEM order for certain pet products including harnesses and leashes, expected to be valued at
November 20, 2020 – Announced an expansion of its sales activities at Chewy, Inc. (NYSE: CHWY), a trusted online destination for pet parents. Dogness has been a supplier to Chewy since January 2019 and is excited to keep building on its successful relationship.
November 19, 2020 – Announced an expansion of its sales activities at Costco Wholesale Corporation ("Costco"), with both in-store and online special events to promote the high quality Dogness smart pet product line. Dogness has a unique position as one of, if not the only, smart pet product lines being made available to Costco's members, which is a testament to the high-quality, innovative and durable pet products Dogness is known for.
About Dogness
Dogness (International) Corporation was founded in 2003 from the belief that pet dogs and cats are important, well-loved family members. Through its smart products, hygiene products, health and wellness products, and leash products, Dogness is able to simplify pet lifestyles, make them more scientific, and enhance the relationship between pets and pet caregivers. The Company ensures industry-leading quality through its fully integrated vertical supply chain and world-class research and development capabilities, which has resulted in over 200 patents and patents pending. Dogness products reach families worldwide through global chain stores and distributors. For more information, please visit: ir.dogness.com.
Forward Looking Statements
No statement made in this press release should be interpreted as an offer to purchase or sell any security. Such an offer can only be made in accordance with the Securities Act of 1933, as amended, and applicable state securities laws. Certain statements in this press release concerning our future growth prospects are forward-looking statements regarding our future business expectations intended to qualify for the "safe harbor" under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding lingering effects of the COVID-19 pandemic on our customers' businesses and end purchasers' disposable income, our cooperation with telecom companies to secure 4G coverage, our ability to meet development, production and shipping targets, our ability to raise capital on any particular terms, fulfillment of customer orders, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, our ability to realize revenue from expanded operation and acquired assets in China and the U.S., our ability to attract and retain highly skilled professionals, client concentration, industry segment concentration, reduced demand for technology in our key focus areas, our ability to successfully complete and integrate potential acquisitions, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings. These filings are available at www.sec.gov. Dogness may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. In addition, please note that any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of the date of this press release. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.
DOGNESS (INTERNATIONAL) CORPORATION | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
AND COMPREHENSIVE INCOME (LOSS) | ||||||||||
(Unaudited) | ||||||||||
For The Six Months Ended December 31, | ||||||||||
2020 | 2019 | |||||||||
Revenues - third party customers | $ | 11,697,156 | $ | 10,887,822 | ||||||
Revenues – related parties | 548,351 | 588,733 | ||||||||
Total Revenues | 12,245,507 | 11,476,555 | ||||||||
Cost of revenues – third party customers | (7,170,811) | (7,344,048) | ||||||||
Cost of revenues – related parties | (285,258) | (351,601) | ||||||||
Total cost of revenues | (7,456,069) | (7,695,649) | ||||||||
Gross Profit | 4,789,438 | 3,780,906 | ||||||||
Operating expenses: | ||||||||||
Selling expenses | 1,000,340 | 933,861 | ||||||||
General and administrative expenses | 2,186,886 | 2,936,038 | ||||||||
Research and development expenses | 254,924 | 148,528 | ||||||||
Total operating expenses | 3,442,150 | 4,018,427 | ||||||||
Income (loss) from operations | 1,347,288 | (237,521) | ||||||||
Other expenses: | ||||||||||
Interest expense, net | (111,690) | (125,384) | ||||||||
Foreign exchange transaction gain (loss) | (119,082) | 46,905 | ||||||||
Other income (expenses), net | (158,565) | (3,766) | ||||||||
Gain from disposition of a subsidiary | 5,104 | |||||||||
Total other expense, net | (67,103) | (82,245) | ||||||||
Income (loss) before income taxes | 1,280,185 | (319,766) | ||||||||
Provision for income taxes | 530,679 | 104,730 | ||||||||
Net income (loss) | 749,506 | (424,496) | ||||||||
Less: net loss attributable to noncontrolling interest | (89,742) | (41,402) | ||||||||
Net income (loss) attributable to Dogness (International) | 839,248 | (383,094) | ||||||||
Other comprehensive income (loss): | ||||||||||
Foreign currency translation income (loss) | 4,171,436 | (826,508) | ||||||||
Comprehensive income (loss) | 4,920,942 | (1,251,004) | ||||||||
Less: comprehensive loss attributable to noncontrolling interest | (39,791) | (48,046) | ||||||||
Comprehensive income (loss) attributable to Dogness | $ | 4,960,733 | $ | (1,202,958) | ||||||
Earnings (Loss) Per share | ||||||||||
Basic | $ | 0.03 | $ | (0.01) | ||||||
Diluted | $ | 0.03 | $ | (0.01) | ||||||
Weighted Average Shares Outstanding | ||||||||||
Basic | 25,913,631 | 25,913,631 | ||||||||
Diluted | 25,931,146 | 25,913,631 | ||||||||
DOGNESS (INTERNATIONAL) CORPORATION | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
As of December 31, | As of June 30, | |||||||
2020 | 2020 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash | $ | 1,351,532 | $ | 1,266,873 | ||||
Short-term investments | 933,910 | 3,551,968 | ||||||
Accounts receivable from third-party customers, net | 3,303,159 | 1,916,840 | ||||||
Accounts receivable – related parties | 497,974 | 559,465 | ||||||
Inventories, net | 4,768,037 | 2,860,700 | ||||||
Prepayments and other current assets | 1,453,973 | 1,471,612 | ||||||
Advance to suppliers - related party | 29,240 | - | ||||||
Total current assets | 12,337,825 | 11,627,458 | ||||||
Property, plant and equipment, net | 53,495,926 | 43,533,512 | ||||||
Right-of-use lease assets, net | 5,308,717 | 5,123,898 | ||||||
Intangible assets, net | 2,238,206 | 2,104,803 | ||||||
Long-term investments in equity investees | 1,377,900 | 1,046,360 | ||||||
Deferred tax assets | 128,969 | 115,230 | ||||||
TOTAL ASSETS | $ | 74,887,543 | $ | 63,551,261 | ||||
LIABILITIES AND EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Short-term bank loans | $ | 910,000 | $ | 5,142,000 | ||||
Current portion of long term bank loans | 623,669 | - | ||||||
Accounts payable | 904,135 | 705,223 | ||||||
Accounts payable – related parties | 3,963 | 305,215 | ||||||
Due to a related party | 2,035,922 | 25,462 | ||||||
Advance from customers | 177,314 | 152,299 | ||||||
Taxes payable | 3,613,007 | 2,814,411 | ||||||
Accrued liabilities and other payable | 1,659,472 | 1,452,408 | ||||||
Operating lease liabilities, current | 164,694 | 172,716 | ||||||
Total current liabilities | 10,092,176 | 10,769,734 | ||||||
Long term bank loans | 7,027,723 | 73,300 | ||||||
Operating lease liabilities, non-current | 1,197,195 | 1,200,299 | ||||||
TOTAL LIABILITIES | 18,317,094 | 12,043,333 | ||||||
Commitments | ||||||||
EQUITY | ||||||||
Common shares, | ||||||||
Class A Common shares | 33,689 | 33,689 | ||||||
Class B Common shares | 18,138 | 18,138 | ||||||
Additional paid-in capital | 53,292,689 | 53,221,610 | ||||||
Statutory reserve | 194,401 | 191,716 | ||||||
Retained earnings | 4,052,634 | 3,216,071 | ||||||
Accumulated other comprehensive loss | (1,666,480) | (5,787,965) | ||||||
Total Dogness (International) Corporation stockholders' equity | 55,925,071 | 50,893,259 | ||||||
Noncontrolling interest | 645,378 | 614,669 | ||||||
Total equity | 56,570,449 | 51,507,928 | ||||||
TOTAL LIABILITIES AND EQUITY | $ | 74,887,543 | $ | 63,551,261 | ||||
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SOURCE Dogness International Corporation
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