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  Company
Profile:
OurPet’s Company (OPCO) offers both “high tech”
and “high touch” in the lucrative pet industry that has grown from $15
billion in 1994 to a projected $45 billion in 2008, according to the
American Pet Product Manufacturers Association (APPMA). Founded in 1995,
OurPet's has quickly established an excellent reputation for quality and
innovation and has grown at 3-5 times faster than the overall industry.
OurPet’s offers an excellent opportunity to participate in the rapidly
expanding pet market.
 Dr.
Steven Tsengas, Ph.D., Chairman, President/CEO, OurPet’s Company
Dr. Tsengas received his BS Engineering Degree
from the State University of New York at Buffalo, his MS Business Degree
(minor in Behavioral Sciences) from the University of Rochester, W. Simon
Graduate School of Business and his Ph.D. from Clayton College of Natural
Health. He has attended numerous managerial, business and technical
seminars. During 1960-1975 he was employed by Eastman Kodak, Harris
Corporation, Babcock & Wilcox and AMAC Enterprises in various positions,
including President, Executive Vice President, General Manager of
Operations, Marketing Manager, Director of Human Resources, Manager of
Central Operations, Senior Industrial Engineer, etc. He executed four
significant turnaround situations.
Since 1976, he has personally founded over half
a dozen high tech and consumer product companies and has provided financial
and managerial assistance to several successful entrepreneurial start-ups.
The high tech ventures included electronics, polymers, metal finishing,
environmental pollution control, energy conservation and veterinary
sciences. He has extensive technical knowledge, holds over 75 utility and
design patents, has written many management and technical articles and has
taught and lectured at several local colleges. He is a Fellow of The Ohio
Academy of Science, the National Inventors Hall of Fame and the American
Society of Patent Holders. Dr. Tsengas is active in various professional,
community and technical associations including the American Naturopathic
Medical Association, American Holistic Medical Association, Students In Free
Enterprise (SIFE) advisor and past National SIFE Competition Judge, Ohio
State Science Day judge, International Association of Assistance Dogs
member, Lake County Development Council Past President and Chairman of the
Economic Forum Comm., Lake Erie College Entrepreneurial Program Advisor,
International Folk Festival Board Member, and Lakeland Community College
Foundation Marketing Comm.
Dr. Tsengas grew up in Upstate New York. He and
his wife, Linda, have lived in Mentor, Ohio since 1970 and have two sons and
four grandchildren. He enjoys reading, classical music, investing and
fishing.
Natural Health and
Nutrition:
Dr. Tsengas has had a keen interest in a
holistic, integrated approach to health for over 35 years. His interest in
holistic health, combined with his love of pets, led him to augment his BS
(Engineering) and MS (Business/Behavioral Science) with a Ph.D. in Natural
Health & Nutrition. The subject of his doctorate dissertation was “Canine
Aging – an Integrative Medical Approach.” He examined the causes of aging,
primary age related pathologies and integrative medical approaches
(conventional and alternative) to slow down aging, and improve the quality
of life during the latter years. In depth areas of interest include cat and
dog biological behavior and geriatric pathologies such as osteoarthritis,
periodontal disease, cardiovascular disease, skin and coat problems,
cognitive health and nutrition. He has effectively applied his knowledge and
interest in developing pet accessory and consumable products for improving
the health, safety, comfort and enjoyment of pets. He has been issued dozens
of patents related to pet products. |
Consumer Goods
Processed & Packaged Goods
(OPCO-OTC: BB)
OurPet’s Company
1300 East Street
Fairport Harbor, OH 44077
Phone: 440-354-6500
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Interview conducted by: Lynn
Fosse, Senior Editor, CEOCFOinterviews.com, Published – May 28, 2010
CEOCFO:
Dr. Tsengas, would you give us a little on the history of the company?
Dr. Tsengas:
OurPet’s Company started in 1995 with the introduction of the Big Dog
Feeder, which was an elevated feeder. The product was invented for improving
the feeding and the posture, as well as the prevention of osteoarthritis in
especially the larger-breed dogs in the process of eating when they are
bending. Subsequently the company has grown from the one product in 1995
where we have over 400 products now, and about 90% are proprietary. They
cover the gamut all the way from elevated feeders to other feeding products
to dog and cat waste systems. We also make quite an array of dog and cat
toys.
CEOCFO:
What is the common thread about your products that is a bit of a different
focus than many other pet product companies?
Dr. Tsengas:
The really unique one comes from when I started the company. I have an
engineering degree and my Ph.D. is in pet geriatrics, so we wanted to make
products that are not only beautiful-looking and appealing to the owners,
but they are functionally beneficial to the pets. They improve the health,
safety and the enjoyment for pets. The very unique aspect of it is that we
have over one hundred patents issued or pending, so our products are very
innovative and very proprietary in nature; we are not a commodity type of a
pet company. In other words there are a lot of companies in the industry
that basically go to China and bring over little stuffed toys and they
resell them through retailers. However, our products are designed and
developed by us. They are innovative and they tend to be upscale; in other
words they are not commodity-type products.
CEOCFO:
Would you give us an example of a couple of the other products that you make
that are helpful to the animals?
Dr. Tsengas:
Our pet products cover the whole gamut. For example, the Play-N-Squeak® is a
little mouse that we introduced back in 2000. This product resulted from
research that I did in the preying behavior of cats, in terms of the tactile
feel in the paws and the high-frequency sound that the mice emit. So we came
up with a product called the Play-N-Squeak®, which feels like a mouse, looks
like a mouse and actually when the cat hits it, it squeaks like a mouse. It
has a built-in pre-recorded microchip sound that has its own batteries and
the whole power system. So anytime the cat hits the little mouse with its
paw, this thing squeaks just like a live field mouse. The product was
introduced in 2000 and it has grown now to annual multi-million dollars in
sales and has about thirty-five or forty different products that are sold in
that category. On the other extreme, we have a very complicated product in
our cat litter-box called SmartScoop®. This is an automatic cat litter-box,
so it makes having a cat a lot easier. You don’t have to necessarily clean
up, when you are away, because it does the cleaning for you. What it does is
the cat goes into the litter-box, the system detects the cat by means of an
infrared detector and once the cat finishes its job in the litter box, the
unit actually comes and rakes and picks up the clumps and places them in a
plastic bag for you. So after three or seven days, depending on the number
of cats that you have, you take out and reverse the bag and throw it in the
waste can. You don’t have to touch anything; we use a no-touch plastic bag,
which costs only pennies. This is a completely automatic, very sophisticated
type of a system. So we cover the gamut all the way from very simple toys to
complicated type of systems.
CEOCFO:
Who is using your products and where are they getting them?
Dr. Tsengas:
The people that buy our products are the owners of 93 million cats in the
United States, and 85 million dog owners. Buy the way, about 64% of American
homes have a pet, and about 30% to 40% of these homes have a cat or a dog or
multiple pets. We have a huge marketplace that has grown
from about $16 billion in 1995 in sales to about $45 billion in sales this
past year. Our products by the way
are sold everywhere. Some well-known customers of ours include PetSmart,
Petco, Pet Supplies Plus. They are in grocery chains for example Publix
supermarkets in the southeast part of the United States. They are in
Wal-Mart and Kmart; they are in the Army and Air Force exchanges including
the Navy Exchange. They are in catalogs like Dr. Foster and Smith, and
frequently we are on QVC. We sell through multiple channels including over
seas where we have about eighteen foreign distributors.
CEOCFO:
Is overseas a growing market for you?
Dr. Tsengas:
Last year we grew over 60-70% the international business.
CEOCFO:
How has the recent economy affected the company?
Dr. Tsengas:
One of the beauties of the pet industry is that it is not completely
recession proof, but it is recession resistant. Last year in spite of what
is called the Great Recession, we still grew about 15%. Our goal is to grow
between 20% and 25% a year compounded. We achieved record sales and record
revenues as well as record net income. The situation you have is that pets
especially dogs have a special relationships with humans and over the years
about 80% of the people consider their dog as a member of the family. There
has been tremendous humanization of pets during the last ten or so years. We
expect this kind of growth to continue; as a matter of fact it will resume
its 6% growth over all and in the categories that we are in grow between 10%
or 14%.
CEOCFO:
Is it that more people are buying more items or that you are in more
locations; why is the growth happening?
Dr. Tsengas:
When I first entered this market I had started about six other companies
prior to starting OurPet’s, and they were in polymers, electronics, and
high-tech type of things. When I visited the first pet trade show back in
1995 all I saw was leashes and rawhide bones and plastic dishes and stuff
like that. The industry was lacking in terms of technology and innovation.
So I saw this as a tremendous opportunity to combine a knowledge about pets,
their evolution, their behavior, their nutritional needs, along with some
high-technology in polymers, elastomers, and electronics, then use this
technology to fill the needs of the pets, the pet owners, and the retailers.
Since 1995 during the last fifteen years there has been a tremendous dynamic
change in the distribution of the pet industry, as it has gone from
family-owned pet stores and distributors to during the 1990’s the entry of
the super pet stores like PetSmart and Petco. By the way, PetSmart when we
first started working with them back in 1995, they had only about 250
stores. Today they have 1250 and they are still growing. You had the
tremendous growth in the specialty stores and subsequent to that in the
early 2000s you had the entry of the discount people like Wal-Mart, in a big
way. So you have big dynamism in the pet industry and the level of
sophistication in technology. People are finding out that innovation sells,
so you find that not only the low-cost items are more sophisticated, but
there are more higher priced products that people are willing to spend on
for their pets especially dogs.
CEOCFO:
Why should potential investors pick OurPet’s?
Dr. Tsengas:
You don’t have a tremendous number of publicly traded pet companies in the
United States, so if people are looking for a pure-play in terms of the pet
industry to be part of its growth they should consider OurPet’s. We have
grown from a start-up in 1995 where last year we reported close to about $15
million in revenue and we see some tremendous growth ahead of us. If people
are looking for a pure-play, in other words in a company that has
proprietary products, which gives them an opportunity to participate in this
very healthy growing industry; OurPet’s gives them that opportunity. Most of
the other publicly-owned companies are retailers like PetSmart and so on are
big retailers, where we are one of the few companies that have a proprietary
line of products.
CEOCFO:
What might investors miss about OurPet’s that they should understand?
Dr. Tsengas:
Our symbol is OPCO and if they go to our website, www.ourpets.com, I think
they will be quite impressed with what they see of the whole line of
products and the history of our company. We do have an investor location
where they can get a tremendous amount of financial information to make a
decision about our company. The main thing is I think of our company as kind
of the old type of a scale, like you see with justice. Especially if you are
a public company you are always trying to keep it in dollars between growth
and reporting short-term profits and revenue. So you are always trying to
make decisions, in other words there is tremendous opportunity for growth in
our industry. We are a company that has invested very heavily in
intellectual properties, as I mentioned we have over a hundred patents
issued or pending. We introduced at the Global Pet Exposition last March,
close to 150 new products. Right now we have under development some major
products that will change the trend again in the industry. We were the ones
that introduced the squeaking sound-type of products, and we introduced the
elevated feeding. This has been our history, of being an innovative
trend-setter in the pet industry. So all this development and building the
company for growth, hiring people before the sales develop, expanding,
putting in the computerized informational systems; all of these cost money,
but you need to do this if you are going to continue growing at the kind of
growth at 20% to 25%, which is our goal. The people that want to invest in
our company should realize that we are a growth company and we aren’t going
to be necessarily putting these very big earnings per share numbers to the
bottom line right now, because our objective here is to grow the company and
gain market share so that we can be a $40 to $50 million company in five
years.
CEOCFO:
In closing, most of the pet stores are now pet friendly stores; what is the
policy at OurPet’s?
Dr. Tsengas:
Here at the company we encourage our employees and associates to bring pets
in. My secretary right outside my door has a French Poodle. He waits and
greets me at the front door and will not stop until he gets his daily treat.
We have dogs all over the place!
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