Dogness Reports Financial Results for the Six Months Ended December 31, 2024

Published: 2025-03-31 16:31:12 ET DOGZ

DONGGUAN, China and PLANO, Texas, March 31, 2025 /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 financial results for the six months ended December 31, 2024.

Mr. Silong Chen, the CEO of the Company, commented: "We delivered robust financial results for the half year ended December 2024, marked by strong revenue growth, increased operational efficiency, and progress toward profitability. Our revenue reached $12.1 million for the six months ended December 2024, an 81.1% increase from the same period in 2023, driven by high demand across all product categories and regions. Meanwhile, our ongoing efforts on cost management and economies of scale have significantly improved operating results.

"Looking ahead, Dogness aims to accelerate product innovation, expand its global market presence and drive cost efficiencies. The Company plans to acquire smaller pet product manufacturers in China to strengthen supply chain control and operational efficiencies, thereby increasing market share. With a focus on developing sustainable, high-tech pet products and leveraging strategic partnerships, we anticipate further revenue growth, improved profitability and increased shareholder value."

Financial Results for the Half Year Ended December 31, 2024

Revenues increased by approximately $5.4 million, or 81.1%, from about $6.7 million for the year ended December 31, 2023 to approximately $12.1 million for the six months ended December 31, 2024. The increase in revenue was primarily attributable to the strong sales performance in both China's domestic market and international markets, driven by higher demand from existing customers and new customer.

The following table breaks down Dogness' revenue by product and service type for the six months ended December 31, 2024 and 2023:

For the six months ended December 31,

2024

2023

Products and services category

Revenue

Variance %

Products

Traditional pet products

4,660,824

3,601,676

29.4

Intelligent pet

4,546,642

2,234,220

103.5

Climbing hooks and others

2,878,245

761,742

277.9

Total revenue fromproducts

12,085,711

6,597,638

83.2

Services

Dyeing services

77,049

(100.0)

Total revenue fromservices

77,049

(100.0)

Total

12,085,711

6,674,687

81.1

─ Traditional pet products

Revenue from traditional pet products increased by approximately $1.1 million, or 29.4%, from approximately $3.6 million for the six months ended December 31, 2023 to approximately $4.7 million for the six months ended December 31, 2024. This growth was driven both higher sales volume and increased average selling prices. Of the revenue growth, $1.0 million came from international sales and $0.1 million from the domestic Chinese market, primarily due to expanded order volumes from customers.

─ Intelligent pet products

Revenue from intelligent pet products grew by approximately $2.3 million, or 103.5%, from around $2.2 million for the six months ended December 31, 2023, to roughly $4.5 million for the same period in 2024, mainly due to increased sales volume. The revenue increase included $1.2 million from international customers and $1.1 million from domestic Chinese customers, primarily from new and existing orders.

─ Climbing hooks and others

Revenue from climbing hooks and other products increased by about $2.1 million, or 277.9%, from roughly $0.8 million for the six months ended December 31, 2023, to about $2.9 million for the same period in 2024. This increase was influenced by higher sales volume and prices. International sales contributed $1.3 million to the revenue increase, while domestic sales accounted for $0.8 million, driven by higher orders.

─ Dyeing service

For the six months ended December 31, 2024 and 2023, the Company earned approximately $Nil and $0.1 million, respectively, for dyeing services.

─ International vs. Domestic sales

Total international sales rose by about $3.4 million, or 75.9%, from approximately $4.5 million for the six months ended December 31, 2023, to about $8.0 million during the same period in 2024, driven by increased orders across all product types.

Domestic sales also saw a significant increase of about $2.0 million, or 92.0%, from around $2.1 million in 2023 to approximately $4.1 million in 2024. In the domestic market, sales of traditional pet products, intelligent pet products, and climbing hooks increased by 16.2%, 109.2%, and 198.5%, respectively, compared to the previous year.

Cost of revenues increased by $3.3 million, or 61.6%, from approximately $5.4 million for the six months ended December 31, 2023, to approximately $8.7 million for the six months ended December 31, 2024, due to a significant increase in sales volume. As a percentage of revenues, the cost of goods sold decreased by approximately 8.7 percentage points to 71.7% for the six months ended December 31, 2024, compared to 80.4% for the six months ended December 31, 2023.

Gross profit rose by approximately $2.1 million, or 160.7%, from about $1.3 million for the six months ended December 31, 2023, to around $3.4 million for the same period in 2024. This increase resulted from higher sales volume and average selling prices. The overall gross profit margin improved to 28.3%, up 8.7 percentage points from 19.6% in the previous period.

Total operating expenses increased by approximately $0.7 million or 14.6%, to about $5.6 million for the six months ended December 31, 2024, compared to around $4.9 million for the same period in 2023.

─ Selling expenses

Selling expenses increased by about $0.1 million, or 18.0%, from approximately $0.5 million for the six months ended December 31, 2023, to approximately $0.6 million for the six months ended December 31, 2024. This rise was driven by an increase in marketing research activities. Selling expenses accounted for 5.2% of total revenues in 2024, compared to 7.9% in 2023.

─ General and Administrative Expenses

General and administrative expenses rose by approximately $0.4 million, or 11.3%, from about $3.9 million for the six months ended December 31, 2023, to roughly $4.3 million for the same period in 2024. This increase was primarily attributable to office decoration costs at our new Dongguan facility. As a percentage of sales, these expenses decreased to 35.7% in 2024 from 58.0% in 2023.

─ Research and Development Expenses

Research and development expenses increased by $0.2 million, or 37.0%, from approximately $0.5 million for the six months ended December 31, 2023, to about $0.7 million for the same period in 2024. These expenses were 5.5% of total revenues in 2024, down from 7.3% in 2023. We anticipate continued growth in research and development as we expand our efforts to use environmentally friendly materials and develop new high-tech products to meet customer demand.

Net loss decreased by approximately $1.4 million, or 43.2%, from about $3.2 million for the six months ended December 31, 2023, to approximately $1.8 million for the six months ended December 31, 2024, as a result of the foregoing.

About Dogness

Dogness (International) Corporation was founded in 2003 from the belief that dogs and cats are important, well-loved family members. Through its smart products, hygiene products, health and wellness products, and leash products, Dogness' technology simplifies pet lifestyles and enhances 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, our ability to raise capital on any particular terms, fulfillment of customer orders, fluctuations in earnings, fluctuations in foreign exchange rates, trade policies affecting our business including tariffs on our products, 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.

For investor and media inquiries, please contact:Wealth Financial Services LLCConnie Kang, PartnerEmail: ckang@wealthfsllc.com Tel: +86 1381 185 7742 (CN)

DOGNESS (INTERNATIONAL) CORPORATION

CONSOLIDATED BALANCE SHEETS

(All amounts in USD)

(Unaudited)

As of

December 31,

As of June 30,

2024

ASSETS

CURRENT ASSETS

Cash and cash equivalents

6,057,762

6,956,434

Accounts receivable from third-party customers, net

3,298,433

2,269,341

Accounts receivable from related party

311,713

582,182

Inventories, net

3,228,661

3,119,827

Due from related party

101,491

97,037

Prepayments and other current assets

3,374,352

3,328,189

Advances to supplier- related party

50,908

Total current assets

16,372,412

16,403,918

NON-CURRENT ASSETS

Property, plant and equipment, net

60,593,968

61,303,327

Operating lease right-of-use lease assets

15,679,000

16,325,988

Intangible assets, net

1,744,340

1,780,856

Long-term investments in equity investees

1,507,000

1,513,600

Deferred tax assets

1,972,480

1,873,140

Total non-current assets

81,496,788

82,796,911

TOTAL ASSETS

97,869,200

99,200,829

LIABILITIES AND EQUITY

CURRENT LIABILITIES

Short-term bank loans

890,500

894,400

Current portion of long-term bank loans

900,936

759,339

Accounts payable

2,264,565

1,286,981

Accounts payable - related party

12,913

Due to related parties

71,994

518,003

Advances from customers

224,676

264,832

Taxes payable

1,029,282

1,007,482

Accrued expenses and other current liabilities

1,504,502

1,452,225

Operating lease liabilities, current

2,279,655

2,352,482

Total current liabilities

9,179,023

8,535,744

NON-CURRENT LIABILITIES

Long-term bank loans

2,845,274

3,315,715

Operating lease liabilities, non-current

11,150,861

10,938,477

Total non-current liabilities

13,996,135

14,254,192

TOTAL LIABILITIES

23,175,158

22,789,936

Commitments and Contingencies (Note 6)

EQUITY

Class A Common shares, no par value, unlimited sharesauthorized; 3,661,658 issued and outstanding as of December 31, 2024 and June 30, 2024

92,403,766

92,004,296

Class B Common shares, no par value, unlimited shares authorized; 9,069,000 issued and outstanding as of December 31, 2024 and June 30, 2024

18,138

Statutory reserve

291,443

Accumulated deficit

(7,207,552)

(5,391,709)

Accumulated other comprehensive loss

(10,811,795)

(10,511,317)

Equity attributable to owners of the Company

74,694,000

76,410,851

Non-controlling interest

Total equity

74,694,042

76,410,893

TOTAL LIABILITIES AND EQUITY

97,869,200

99,200,829

DOGNESS (INTERNATIONAL) CORPORATION

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(All amounts in USD)

(Unaudited)

For the Six Months Ended

December 31,

2024

2023

Revenues–third party customers

12,085,711

6,573,379

Revenues – related parties

101,308

Total Revenues

12,085,711

6,674,687

Cost of revenues – third party customers

(8,668,552)

(5,280,923)

Cost of revenues – related parties

(82,835)

Total Cost of revenues

(8,668,552)

(5,363,758)

Gross Profit

3,417,159

1,310,929

Operating expenses:

Selling expenses

624,410

529,021

General and administrative expenses

4,312,486

3,873,442

Research and development expenses

665,494

485,849

Total operating expenses

5,602,390

4,888,312

Loss from operations

(2,185,231)

(3,577,383)

Other income (expense):

Interest income (expense), net

6,884

(113,690)

Foreign exchange transaction gain

114,443

32,469

Other income, net

41,357

80,891

Rental income from related parties, net

107,737

148,406

Total other income, net

270,421

148,076

Loss before income taxes

(1,914,810)

(3,429,307)

Income taxes benefit

(98,967)

(231,756)

Net loss

(1,815,843)

(3,197,551)

Less: net loss attributable to non-controlling interest

(934)

Net loss attributable to Dogness (International) Corporation

(1,815,843)

(3,196,617)

Other comprehensive loss

Foreign currency translation adjustments

(300,478)

1,666,560

Comprehensive loss

(2,116,321)

(1,530,991)

Less: comprehensive loss attributable to non-controllinginterest

(931)

Comprehensive loss attributable to Dogness(International) Corporation

(2,116,321)

(1,530,060)

Loss Per share

Basic

(0.14)

(0.30)

Diluted

(0.14)

(0.30)

Weighted Average Shares Outstanding

Basic

12,755,658

10,622,663

Diluted

12,755,658

10,622,663

DOGNESS (INTERNATIONAL) CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in USD)

(Unaudited)

For the Six Months Ended

December 31,

2024

2023

Cash flows from operating activities:

Net loss

(1,815,843)

(3,197,551)

Adjustments to reconcile loss income to net cash provided by (used in) operating activities:

Depreciation and amortization

1,395,756

1,414,937

Share-based compensation for services

399,470

Loss (gain) from disposal of property, plant and equipment

176,347

(9,845)

Change in credit losses

(232,600)

111,105

Deferred tax benefit

(108,490)

(275,121)

Amortization of right-of-use lease assets

585,466

591,705

Warrants modification

239,308

Changes in operating assets and liabilities:

Accounts receivable

(824,001)

(682,445)

Accounts receivable-related party

272,429

177,374

Inventories

(121,257)

(359,976)

Prepayments and other current assets

(61,720)

(1,080,158)

Advances to supplier-related party

51,537

126,527

Accounts payables

999,703

425,101

Accounts payables-related party

13,130

Accrued expenses and other current liabilities

24,691

16,516

Advance from customers

(39,639)

104,887

Operating lease liabilities

200,827

188,379

Taxes payable

26,242

159,612

Net cash provided by (used in) operating activities

942,048

(1,650,175)

Cash flows from investing activities:

Purchase of property, plant and equipment

(1,050,711)

(294,828)

Proceeds from disposition of property, plant and equipment

787

56,000

Net cash used in investing activities

(1,049,924)

(238,828)

Cash flows from financing activities:

Net proceeds from exercise of warrants

15,101

Reverse split shares

(810)

Proceeds from short-term bank loans

696,500

691,000

Repayment of short-term bank loans

(696,500)

(885,800)

Proceeds from long-term bank loans

2,625,800

Repayment of long-term bank loans

(316,297)

(2,793,472)

(Repayment of) proceeds from related-party loans

(456,160)

6,498

Net cash used in financing activities

(772,457)

(341,683)

Effect of exchange rate changes on cash and restricted cash

(18,339)

226,388

Net decrease in cash and cash equivalents

(898,672)

(2,004,298)

Cash and cash equivalents, beginning of period

6,956,434

4,483,308

Cash and cash equivalents, end of period

6,057,762

2,479,010

SUPPLEMENTAL DISCLOSURES OF CASH FLOWINFORMATION:

Cash paid for interest

115,430

154,884

Non-Cash Investing Activities

Liabilities incurred (settled) for purchase of property andequipment

34,909

(40,251)

Prepaid share-based compensation for services

(223,000)

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SOURCE Dogness (International) Corporation