Dogness (international) Corpora (NASDAQ:DOGZ)

Second Quarter 2019 Financial Results

• Revenues decreased 12.6% to approximately $13.4 million from approximately $15.3 million. Sales of intelligent pet products increased to $1.5 million from $0.1 million.
• Net income decreased 59.4% to approximately $0.7 million from approximately $1.7 million. Fully diluted net income per share decreased to $0.03 from $0.04.

“During fiscal 2019, we continued to pursue our growth strategies of technological innovation, new product development, international expansion, and strategic partnerships,” commented Mr. Aaron (Silong) Chen, Chairman and Chief Executive Officer of Dogness. “Our financial results were affected by the trade tensions between China and the United States, but we were able to maintain profitability and significantly grow sales of our smart pet products. We continued to see success at major international trade shows, where we introduced new smart feeders and our first smart products designed for cats. We further expanded our sales channels in the U.S. and South America, and entered the Australian market.”

“As we enter fiscal 2020, we remain focused on growth. Our smart tech products continue to ramp up sales with major retailers in the U.S., and we will supplement this growth with increased marketing in China, Europe, Australia, and other regions. We will also further improve upon our existing products while investing in technological innovation and new product development. With increased product diversity, a growing number of online and offline distribution channels, and broadened geographic scope, we expect positive results for the next fiscal year, including top line growth of approximately 15% year over year and bottom line growth of approximately 50-80% year over year,” concluded Mr. Chen.

Business Outlook

For fiscal year 2020, the Company expects total revenues to grow approximately 15% and net income to grow approximately 50-80% compared to fiscal year 2019.

This forecast reflects the Company’s current and preliminary views, which are subject to change and is subject to risks and uncertainties, including, but not limited to, the risks and uncertainties identified in the Company’s public filings and forward looking statements.

DONGGUAN, China, Oct. 15, 2019 (GLOBE NEWSWIRE) -- Dogness (International) Corporation (“Dogness” or the “Company”) (DOGZ), a developer and manufacturer of pet products in China, including smart products, hygiene products, health and wellness products, and leash products, today announced that its smart products are now available to consumers in Australia.

“We are excited to bring our industry-leading cat and dog pet tech products to Australian families,” stated Mr. Aaron (Silong) Chen, Chairman and Chief Executive Officer of Dogness. “A tangible result of our continued participation in global trade shows, this development marks another milestone in Dogness’s international growth story. We look forward to helping pet caregivers in Australia simplify pet lifestyles, make them more scientific, and enhance their relationships with their pets.”

Already available for purchase at JB Hi-Fi, a leading Australian retailer, are Dogness’s Smart Camera Feeder, App Feeder, and Smart Camera Treater. Additional partners that will distribute similar products in the coming weeks and months include an online retailer, a department store, a consumer electronics retailer, and a pet retailer. 

DONGGUAN, China, April 16, 2019 (GLOBE NEWSWIRE) -- Dogness (International) Corporation (DOGZ) (“Dogness” or the “Company”), a leading developer and manufacturer of pet products, including smart products, hygiene products, health and wellness products, and leash products, today announced its new cooperation with Corey Nutrition Pet Food (“Corey Nutrition”).

Dogness will be the sole distributor in China of Corey North Paw, one of Corey Nutrition’s popular pet brands. Dogness, in turn, may share aggregated data from its smart pet product technology to offer Corey Nutrition deeper insights into pet food consumption, pet behavior, and pet health.

“We appreciate the opportunity to partner with Corey Nutrition, which shares our passion for the wellbeing of our four-legged family members,” Mr. Silong Chen, CEO of Dogness, commented. “The rich data collected by our suite of smart pet products will provide valuable insights to Corey Nutrition and our future partners. We look forward to extending our expertise and services to building a long-lasting and rewarding relationship.”

Corey North Paw pet food is expected to be available in China by early 2020.

DONGGUAN, China, April 03, 2019 (GLOBE NEWSWIRE) -- Dogness (International) Corporation (DOGZ) (“Dogness” or the “Company”), a leading developer and manufacturer of pet products, including smart products, hygiene products, health and wellness products, and leash products, today announced new distribution relationships with several international distributors.

The distributors include an online pet product retailer in the U.S., a prominent U.S. kennel club, a leading U.S. pet product chain store that also sells its products online, and a pet product distributor in Panama that provides to 12 countries in South America. The distributors will allow consumers to purchase Dogness’s smart products, which include the Dogness Smart iPet Robot, Mini Treat Robot, Smart CAM Feeder, Smart Fountain, Smart CAM Treater, and updated retractable leash. In addition, Dogness introduced a series of new smart products at the Global Pet Expo in late March, including cat feeders, cat fountains, and some portable drinking and feeding solutions, which will also be available in 6-8 weeks.

“Our new distribution relationships are a direct result of our attendance at international industry trade shows such as CES in Las Vegas and GPE in Orlando,” Mr. Silong Chen, CEO of Dogness, commented. “We look forward to working with our new distributors to share our innovative products with pet owners and caregivers worldwide. We are also excited by the opportunity to raise the global profile of the Dogness brand and to execute on our international growth strategy.”

DONGGUAN, China, Feb. 01, 2019 (GLOBE NEWSWIRE) -- Dogness (International) Corporation (NASDAQ: DOGZ) (“Dogness” or the “Company”), a leading developer and manufacturer of pet products, including traditional pet products and smart pet ecosystem products, today announced several business initiatives to develop its operations and grow into new product lines.

The Company has invested RMB 1.5 million out of an approved RMB 3.0 million to acquire 13% ownership interest in third party Linsun Smart Technology Co., Ltd (“Linsun”). Linsun will share its related technologies, patents and manufacturing capabilities with Dogness after the acquisition. Going forward, Dogness and Linsun will further develop new products and new technologies in the smart pet tech area together.
The Company has invested RMB 2.0 million out of an approved RMB 8.0 million to acquire 10% of the ownership interest in Dogness Network Technology Co., Ltd, in order to integrate the industrial chain and to further develop new products and new technologies in smart pet tech area. The remaining RMB 6.0 million investment is expected before June 2019.
The Board has approved the investment of RMB 3.5 million to jointly open Dogness Pet Store with Mr. Liwen Zheng, his company Changxuan Yuandong Co., Ltd., and Mr. Shiting Deng. There are no related party relationships noted with Mr. Shiting Deng.
In order to expand into the Japanese market and to complete the smart pet ecosystem, the Company has invested $250,000 for 51% ownership interest to establish and operate Japan Dogness Company.
In connection with these initiatives and to incentivize the Company’s employees, the Board has granted options to purchase 1.2 million Class A Common Shares to certain management and employees at an exercise price of $3.50 per share. This grant was made pursuant to the employee incentive plan.
Mr. Silong Chen, Chairman and CEO of Dogness, commented, “These initiatives are a key component of our global expansion and talent motivation strategies. We believe that they will contribute to our long-term sustainable growth in the years ahead.”

DONGGUAN, China, Oct. 30, 2018 (GLOBE NEWSWIRE) -- Dogness (International) Corporation (DOGZ) (“Dogness” or the “Company”), a leading developer and manufacturer of pet products, including leashes, accessories, and collars and harnesses that incorporate smart technology in China, today announced its unaudited second half and audited full fiscal year 2018 financial results ended June 30, 2018.

Audited Fiscal Year 2018 Financial Highlights (compared to prior year period)

Revenues increased 42.3% to $30.1 million from $21.2 million.
Gross profit increased 45.6% to $12.1 million from $8.3 million. Gross margin increased to 40.3% from 39.4%.
Income from operations increased 2.6% to $6.0 million from $5.8 million. Operating margin decreased to 19.8% from 27.4%.
Net income decreased 6.5% to $4.6 million from $4.9 million. Fully diluted net income per share decreased to $0.22 from $0.33.
Unaudited Fiscal Year 2018 Second Half Financial Highlights (compared to prior year period)

Revenues increased 25.1% to $15.3 million from $12.2 million.
Gross profit increased 22.8% to $6.1 million from $5.0 million. Gross margin decreased slightly to 40.0% from 40.7%.
Income from operations decreased 38.6% to $2.2 million from $3.6 million. Operating margin decreased to 14.6% from 29.7%.
Net income decreased 43.5% to $1.7 million from $3.1 million. Fully diluted net income per share decreased to $0.09 from $0.18.
Mr. Aaron (Si Long) Chen, Chairman and Chief Executive Officer of Dogness, commented, “Our first fiscal year as a public company saw significant increases in our top line and gross profit margin. Our existing product sales continued to perform strongly, and pet collars and pet leashes remained the top revenue drivers. In addition, we were excited to launch our Dogness Smart iPet Robot, Dogness Mini Treat Robot, Dogness Smart CAM Feeder, Dogness Smart Fountain, and Dogness Smart CAM Treater, expanding our smart pet ecosystem beyond that of our Smart Collar C2 and Smart Harness H2. Although we only introduced our new smart products in spring and summer 2018, we have already started to record sales of our smart collar, smart feeder, smart fountain, and smart treater.”

“In addition,” Mr. Chen continued, “we updated our retractable pet leash, reinforcing our commitment to our existing products, and launched the Dogness shampoo line in China’s domestic market, enhancing the Dogness brand. We also acquired a new plant facility in China and an office facility in Plano, Texas. These investments had a significant short-term impact on our bottom line, but they are necessary foundational investments to make for the long-term as we become a world-class global pet tech company.”

“In fiscal 2019, we look forward to continuing to drive the growth of our smart pet ecosystem, to cultivate our brand recognition, and to strengthen our global position as a leader of the pet tech industry. We will keep growing our four product areas of smart products, hygiene products, health and wellness products, and leash products as we simplify pet lifestyles, make them more scientific, and enhance the relationship between pets and pet caregivers. We look forward to the market’s growing recognition of our new smart products and continued support of our traditional products and believe that these commitments will enable us to grow sustainable value for our shareholders,” concluded Mr. Chen.

Business Outlook

For fiscal year 2019, the Company expects total revenues to grow approximately 10% to 20% and net income to grow approximately 10% to 20% compared to fiscal year 2018.

DONGGUAN, China, Aug. 23, 2018 (GLOBE NEWSWIRE) -- Dogness (International) Corporation (DOGZ) (“Dogness” or the “Company”), a leading developer and manufacturer of pet products, including leashes, accessories, and collars and harnesses that incorporate smart technology in China, launched five new products as part of its smart pet ecosystem at a product launch event in Shanghai on August 22, 2018.

“We have a clear goal, and that is not only to become a recognizable brand, but also for the Dogness name to become synonymous with good products, to become a brand that pet owners around the world trust,” Mr. Silong Chen, CEO of Dogness, said in a speech at the event.

“Since going public in December, we have undergone a positive change in product strategy and development, one centered around the concept of 'four products, one platform,'” continued Mr. Chen. “Our strategic focus and the engine of our future growth will be in the following four pet product areas: smart products, hygiene products, health and wellness products and leash products. These four product areas are independent and yet will be part of an integrated ‘Pet IoT Platform.’”

Through a single platform, the Dogness mobile app, the products presented today allow pet owners to remotely see, hear, speak, feed, play, and interact with their pets in different ways:

Dogness Smart iPet Robot: Pet owners will be able to see their pets through a camera, hear their pets through a built-in microphone, interact with their pets by feeding them treats, and play with their pets through an interactive laser pointer. Pet owners have full control over the 360-degree mobility of the robot through the Dogness app and can securely take and save pictures and videos of their dogs.
Dogness Mini Treat Robot: Space-conscious pet owners can see their pets through a stationary tilting camera that securely records photo and video, hear their pets through a built-in microphone, interact with their pets by feeding them treats, and play with them through an interactive laser pointer.
Dogness Smart CAM Feeder: Pet owners can now ensure that their pets are well-fed and on-schedule. Able to hold around 6.5 pounds of dry food, the smart feeder helps pet owners ensure the health of their pets, even when away from home. Pet owners can see their pets’ eating habits night and day through a built-in camera with night vision and call their pets to the feeder through a voice recording that can be programmed to be played at meal times.
Dogness Smart Fountain: The smart fountain ensures that pets stay hydrated with a source of clean filtered water from a patented filtering technology. Additional features include an oxygenating, free-falling, recirculating water stream for optimal freshness, the ability to increase or decrease the flow of water, a replaceable carbon water filter to maintain water freshness, a submersible pump for quiet operation, dishwasher-safe material, and an easily assembled and disassembled design.
Dogness Smart CAM Treater: Allows pet owners to see their pets night and day through a 160-degree full HD camera with night vision, hear their pets through a built-in microphone, interact with their pets by speaking to them through a built-in speaker, and play with their pets by tossing them treats.
In addition, Dogness announced an updated retractable leash to enhance the pet walking experience. The new leash allows pet owners to attach Dogness accessories to their retractable leashes, which currently include an LED light for better visibility in low light settings; a convenience box to store items such as doggie bags, treats, or keys; and a Bluetooth speaker to listen to music or answer calls.

In line with its mission of simplifying pet ownership, making it more scientific, and improving the care that pet owners give to their pets, Dogness also announced its own pet shampoo brand as the first product of its hygiene business.

“Pet owners want to do their best for their pets, but one area in which many lack knowledge is shampoo,” explained Mr. Chen. “Just as we use different types of shampoo in different situations, we should recognize that our pet cats and dogs have special requirements as well. For example, their skin is more vulnerable than that of humans, and the pH of their skin is different as well. Even in humans, the average pH of women’s skin differs from that of men.”

Each of the products launched today underwent painstaking refinement from Dogness staff, deep involvement from pet behavior experts, and detailed design from top domestic and overseas brand planning companies to ensure optimal cohesion between product experience, style, and branding.

“We are excited for this strategic expansion of our pet-centric ecosystem. By creating a full suite of products that enable pet owners around the world to better care for their pet family members, we raise awareness of our brand at home and abroad. We also enable ourselves to grow globally, fueling our sustainable development for our shareholders in the years to come,” concluded Mr. Chen.

Dogness (NASDAQ:DOGZ) ($4.90; $126.9M market cap), a developer and manufacturer of pet products, including leashes, accessories, and collars and harnesses that incorporate smart technology in China, announced its first 6 months financial results for fiscal 2018:

• Sales of $14.8 million vs $8.9 million in the prior year

• EPS of $0.18 vs $0.13 in the prior year

Management stated:

“We are pleased to announce a strong start to our fiscal year 2018. Our top line grew by 66.0%, driven by increases in sales volumes and is a testament to our growing customer base. This growth also shows the success of our strategy to improve the visibility of the Dogness brand worldwide by increasing our attendance at trade shows such as the 20th Pet Fair Asia in August 2017 and the 21st China International Pet Show in November 2017. Furthermore, we were able to implement efficiencies that improved both gross and operating margins as well as our net income.”

In related news, a new 13G filed yesterday showed that Shenzhen Jinhongtai Equity Investment took an 8.6% stake in DOGZ.

DOGZ (Potential China IPO, named Dogness (International) Corporation; Underwriter: Spartan Securities Group, Ltd.) - According to the company’s amended prospectus filed on 10/10/2017, the company mainly engages in the design and manufacture of pet products, including leashes and smart products, and lanyards in city of Dongguan, Guangdong Province, China. Most of its products are exported to the U.S. (approximately 42.9% and 49.8% of its products were sold in U.S in fiscal 2017 and 2016) and Europe and they are sold to pet stores, including major pet store chains. The company is offering a minimum of 8m shares and maximum of 10m shares at a price of $5.00 per share. After the IPO, the shares outstanding would be in the range between 23m and 25m, taking into consideration the minimum and maximum offering. The implied market cap would be $115m to $125m based on the offering price of $5.00 per share.

• The company’s revenues in FY 2017 (ended on June 30, 2017) were $21.2m, an increase of 31.5% from $16.1m in 2016, and net income was $4.9m, an increase of 42.0% from $3.5m in 2016.

• Implied post-IPO P/E based on 5.00 per share offering would be 23.3 and 25.3 considering the minimum and maximum offering.

• Good industry prospect:

“Our company’s primary market is the United States, with approximately 42.9% and 49.8% of our products being sold in America in fiscal 2017 and 2016, respectively. The United States has one of the highest pet ownership rates in the world, with approximately 65% of U.S. households, or approximately 79.7 million homes, owning a pet. Of these, roughly 54.4 million own at least one dog and 42.9 million own at least one cat. Approximately 42% of pet owners own more than one pet.

Pet owners in the United States have increasingly seen their pets as extended members of the family. Accordingly, spending on pets has increased steadily over the last decade. Moreover, since pets are four-legged members of the family, spending on pet necessities and accessories has been resilient even in the face of economic downturns. On average, U.S. households spend about $500 per year on their pets, or approximately 1% of their total household spending.”

• With expanded sales network, for example, the company sells its products in IKEA, Petco, Petsmart, Petvalu, Walmart, JD.com, etc.

• Investors can read the company’s presentation here.

Caveats

• We have performed no due diligence on the company

• Since most of the business is from international trade, company’s revenues could get hurt by trade protection