Mr. Silong Chen, Chief Executive Officer of the Company, commented: "The first half of fiscal 2026 presented challenges as U.S. tariff policies temporarily impacted our overall revenue and margins. Despite these headwinds, our core traditional pet products category demonstrated strong resilience, growing 14.6% year-over-year driven by increased global demand and loyal customer orders."

"To mitigate external pressures, we took proactive steps to optimize operations, successfully reduced our general and administrative expenses by over 20%. At the same time, we strategically invested in targeted marketing to expand our brand footprint and capture future market share."

"Looking ahead, our outlook remains highly optimistic. We are accelerating our R&D initiatives to introduce a new generation of intelligent, eco-friendly pet products that meet evolving consumer demands. Backed by a robust portfolio of over 200 patents and a fully integrated supply chain, Dogness is well-positioned to navigate these temporary trade fluctuations, return to sustainable growth, and deliver long-term shareholder value."

Financial Results for the Half Year Ended December 31, 2025

Revenue decreased by approximately $4.4 million, or 36.2%, from about $12.1 million for the six months ended December 31, 2024 to approximately $7.7 million for the six months ended December 31, 2025. The decrease in revenue was primarily attributable to the impact of United State's tariff policies.

The following table breaks down Dogness' revenue by product and service type for the six months ended December 31, 2025 and 2024:

─ Traditional pet products

Revenue from traditional pet products increased by approximately $0.7 million, or 14.6%, from approximately $4.7 million for the six months ended December 31, 2024 to approximately $5.3 million for the six months ended December 31, 2025. The increase was mainly driven by increased sales volume for the six months ended December 31, 2025. Among the total revenue increase, $0.5 million was from sales to customers in international markets, and $0.2 million was from sales to customers in China domestic market, primarily due to increased orders from our current customers.

─ Intelligent pet products

Revenue from intelligent pet products decreased by approximately $2.8 million, or 62.6%, from around $4.5 million for the six months ended December 31, 2024, to roughly $1.7 million for the same period in 2025. The decrease was mainly driven by a decrease in sales volume and average selling price for the six months ended December 31, 2025, compared to the six months ended December 31, 2024. Among the total revenue decrease, $1.4 million decrease was from sales to customers in international markets and $1.5 million was from sales to customers in China domestic market, primarily due to decreased orders from our current customers.

─ Climbing hooks and others

Revenue from climbing hooks and other products decreased by about $2.2 million, or 76.8%, from roughly $2.9 million for the six months ended December 31, 2024, to about $0.7 million for the same period in 2025. The decrease was mainly driven by decreased sales volume and average selling price during the six months ended December 31, 2025, compared to the six months ended December 31, 2024. Among the total revenue decrease, $1.5 million decrease was from sales to customers in international markets and $0.7 million was from sales to customers in China domestic market, primarily due to the decreased orders from our current customers.

─ International vs. Domestic sales

Total international sales decreased by about $2.4 million, or 29.8%, from approximately $8.0 million for the six months ended December 31, 2024, to about $5.6 million during the same period in 2025, driven by significant decrease in sales orders, due to the impact of United States's tariff policies.

Domestic sales decreased by approximately $2.0 million, or 48.8%, from about $4.1 million for the six months ended December 31, 2024 to about $2.1 million for the six months ended December 31, 2025. The decrease in our domestic market sales was driven by significant decreased sales orders from our main customers, who are also affected by United States's tariff policies, resulting in reduced demand for our products.

Cost of revenues decreased by $1.8 million, or 21.0%, from approximately $8.7 million for the six months ended December 31, 2024, to approximately $6.8 million for the six months ended December 31, 2025, due to a significant decrease in sales volume. As a percentage of revenues, the cost of goods sold increased by 17.1 percentage points to 88.8% for the six months ended December 31, 2025, compared to 71.7% for the six months ended December 31, 2024.

Gross profit decreased by approximately $2.6 million, or 74.6%, from about $3.4 million for the six months ended December 31, 2024 to about $0.9 million for the six months ended December 31, 2025, primarily attributable to lower sales volume and reduced average selling price for intelligent pet products and climbing hooks and others products. Gross profit margin decreased to 11.2% for the six months ended December 31, 2025 from 28.3% for the six months ended December 31, 2024.

Total operating expenses increased by approximately $0.7 million or 13.0%, to about $6.3 million for the six months ended December 31, 2025, compared to around $5.6 million for the same period in 2024.

─ Selling expenses

Selling expenses increased by about $0.6 million, or 97.7%, from approximately $0.6 million for the six months ended December 31, 2024, to approximately $1.2 million for the six months ended December 31, 2025. The increase was primarily attributable to the increase in entertainment fees and advertising fees for the six months ended December 31, 2025. Selling expenses were 16.0% and 5.2% of total revenue for the six months ended December 31, 2025, and 2024, respectively.

─ General and Administrative Expenses

General and administrative expenses decreased by approximately $0.9 million, or 20.3%, from about $4.3 million for the six months ended December 31, 2024, to roughly $3.4 million for the same period in 2025. The decrease was primarily due to the reduction in office renovation expenses, depreciation expenses and share-based compensation expenses. As a percentage of sales, general and administrative expenses were 44.6% and 35.7% of total revenue for the six months ended December 31, 2025 and 2024, respectively.

─ Research and Development Expenses

Research and development expenses decreased by $0.1 million, or 19.8%, from approximately $0.7 million for the six months ended December 31, 2024, to about $0.5 million for the same period in 2025. As a percentage of sales, research and development expenses were 6.9% and 5.5% of total revenue for the six months ended December 31, 2025 and 2024, respectively. The Company expects these expenses to continue to increase as it expands research and development activities to increase the use of environmentally-friendly materials and develop more new high-tech products to meet customer demands.

Net loss increased by approximately $3.4 million, or 185.0%, from about $1.8 million for the six months ended December 31, 2024, to approximately $5.2 million for the six months ended December 31, 2025.

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 the impact of U.S. tariffs policy on our exports to the United States and related effects on our price competitiveness and overall profitability, 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.

For more information please contact:

WFS Investor Relations Inc
Connie Kang, Partner
Email: ckang@wealthfsllc.com
Tel: +86 1381 185 7742 (CN)

DONGGUAN, China and PLANO, Texas, May 19, 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 that the Company has entered into a share acquisition agreement (the "Agreement") with a shareholder of Dogness Intelligent Technology Co., Ltd. ("DITC") to acquire a 19.5% equity interest in DITC in exchange for Dogness's Class A common shares and warrants to purchase Class A common shares.

Established in 2018, DITC focuses on the research and development of Internet of Things (IoT) and app platforms in the pet industry. DITC is dedicated to creating user-centered intelligent petcare devices and applications that help track pet activities, collect health data, protect, feed, follow, and monitor pets, even if owners are not with their pets.

Mr. Silong Chen, Chief Executive Officer of Dogness, stated, "We are pleased to invest and acquire a strategic stake in DITC, an emerging player in petcare technology. With the growing focus on pet health and wellness, and advancements in IoT, AI, and data analytics driving demand for pet tech products that monitor activity and track vitals, DITC's innovative approach and commitment to developing a user-centered intelligent pet ecosystem align well with our strategic goals. We are excited to work with DITC and explore new opportunities for growth in the expanding petcare market."

For further information regarding this transaction, please see the Form 6-K to be filed with the SEC.

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 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.

For more information please contact:

Wealth Financial Services LLC
Connie Kang, Partner
Email: ckang@wealthfsllc.com
Tel: +86 1381 185 7742 (CN)

The Shares are being sold to certain non-U.S. purchasers (the "Purchasers") in a transaction exempt from registration under the Securities Act of 1933, as amended, in reliance on Regulation S thereunder. Each of the Purchasers understands that the Shares have not been registered under the Securities Act and such Purchasers may not sell or otherwise dispose of the Shares without registration under the Securities Act and under applicable state securities or "Blue Sky" laws, or pursuant to an exemption therefrom. Closing of the Private Placement is subject to customary closing conditions.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Shares in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

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 lingering effects of the Covid-19 pandemic on our customers' businesses and end purchasers' disposable income, 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.

For investor and media inquiries, please contact:

Wealth Financial Services LLC
Connie Kang, Partner
Email: ckang@wealthfsllc.com
Tel: +86 1381 185 7742 (CN)

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:

─ 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 LLC
Connie Kang, Partner
Email: ckang@wealthfsllc.com
Tel: +86 1381 185 7742 (CN)

DONGGUAN, China and PLANO, Texas, March 25, 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 annual meeting of shareholders for the fiscal year ended June 30, 2024, will be held on March 27, 2025, at 9:00 a.m. China Time (9:00 p.m. Eastern Time on March 26, 2025). The meeting will be held at the Company's executive office at No. 16 N. Dongke Road, Tongsha Industrial Zone, Dongguan, Guangdong, China. The meeting will be held as a hybrid virtual and physical meeting. Shareholders unable to attend in person may attend by call as follows:

Topic: DOGNESS (INTERNATIONAL) CORPORATION ANNUAL SHAREHOLDER MEETING 2024

Time: Mar 26, 2025 09:00 PM Eastern Time (US and Canada)

Join Zoom Meeting

https://us06web.zoom.us/j/88948047162?pwd=Eaypg5PPF1QRRLX59bFAexnam0INbf.1 

Meeting ID: 889 4804 7162

Passcode: 916781

Annual meeting materials will be made available on the Company's investor relations website ir.dogness.com and is available in its filings with the U.S. Securities and Exchange Commission on the EDGAR website www.sec.gov.

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 lingering effects of the Covid-19 pandemic on our customers' businesses and end purchasers' disposable income, 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.

For investor and media inquiries, please contact:

Wealth Financial Services LLC
Connie Kang, Partner
Email: ckang@wealthfsllc.com
Tel: +86 1381 185 7742 (CN)

PLANO, Texas, Oct. 17, 2024 /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 fiscal year ended June 30, 2024.

Silong Chen, Chief Executive Officer of Dogness, commented: "We continue to face challenges due to intense competition in the domestic market and the ongoing trade dispute between China and the United States, which are impacting and will likely continue impacting our domestic and export sales in the near future. In fiscal 2024, Dogness experienced intensified competition and a complex macro environment, which posed challenges to the Company resulting in a 15.6% revenue decline. Our gross profit for fiscal 2024 decreased to approximately $3.1 million, reflecting a 14.7% decline, primarily due to lower sales volumes in intelligent pet products. However, we effectively reduced our selling expenses by approximately $1.3 million and general and administrative expenses by $2.0 million, enhancing our operational efficiency. As a result, our overall gross profit margin improved slightly to 21.0%, up from 20.8% in fiscal 2023."

"Looking ahead, we are committed to leveraging our strengths in traditional pet products to capture additional market share, particularly in international markets where we see significant growth potential. We are also exploring new product lines and enhancements to our intelligent pet products, aiming to align them with consumer trends and preferences. Our commitment to sustainability will drive our research and development efforts, focusing on eco-friendly materials and advanced technologies that resonate with our customer base."

"Thanks to these strategic initiatives, our net loss improved by approximately $1.4 million, or 18.8%, decreasing from $7.5 million in fiscal 2023 to $6.1 million in fiscal 2024. We appreciate the continued support of our stakeholders as we strive for sustainable growth and profitability in the coming years, which we believe will position Dogness as a leader in the pet products industry."

Financial Results for The Fiscal Year Ended June 30, 2024

Revenues

Revenues decreased by approximately $2.7 million, or 15.6%, to approximately $14.8 million in fiscal 2024 from approximately $17.6 million in fiscal 2023. The decrease in revenue was primarily attributable to an approximately $3.0 million decrease in the sales of intelligent pet products and an approximately $0.5 million decrease in the sales of climbing hooks and others, offset by an approximately $0.7 million increase in the sales of traditional pet products.

The breakdown of our revenue by products and services categories is as follows:

Traditional Pet Products

Revenue from traditional pet products rose by approximately $0.7 million or 8.7%, from $8.3 million in fiscal 2023 to $9.0 million in fiscal 2024. This increase was primarily due to higher sales volume, with $1.2 million coming from overseas markets, offset by a $0.5 million decline in the Chinese domestic market.

Intelligent Pet Products

Revenue from intelligent pet products fell by approximately $3.0 million, or 40.8%, from $7.4 million in fiscal 2023 to $4.4 million in fiscal 2024. This decline was driven by a 33.1% drop in sales volume and a $2.3 decrease in average selling price per unit. The Chinese market accounted for a $0.8 million decrease, while overseas markets contributed to a $2.2 million decline, as the pet product industry is facing reduced consumer spending on non-essential intelligent pet products items.

Climbing Hooks and Others

Revenue from climbing hooks and other products decreased by approximately $0.5 million, or 25.0%, from $1.8 million in fiscal 2023 to $1.4 million in fiscal 2024, mainly due to lower sales volume.

Dyeing Services

The Company provides dyeing solutions using our manufacturing capabilities, applying dyes to textiles for desired quality and color. Revenue from dyeing services was $0.1 million in fiscal 2024, up from no revenue in 2023.

Sales to Related Parties

During fiscal 2024, Dogness Network Technology Co., Ltd. ("Dogness Network") and Dogness Technology Co., Ltd ("Dogness Technology") were related parties of the Company. Dogness Technology ceased being a related party after December 31, 2023. Sales to Dogness Network and Dogness Technology Co., Ltd totaled $0.1 million and $1.7 million in fiscal 2024 and 2023, respectively, representing 0.7% and 9.7% of total revenue. Costs associated with these sales were $0.1 million in 2024 and $1.2 million in 2023.

International vs. Domestic sales

Total international sales dropped by approximately $1.2 million, or 10.6% to approximately $10.1 million in fiscal 2024, primarily due to 48.7% decline in intelligent pet product sales. Traditional pet product sales, however, rose by 21.6%.

Domestic sales decreased by approximately $1.5 million, or 24.4% to around $4.8 million, driven by reduced customer orders caused by intense competition in the domestic market. Domestic sales of traditional and intelligent pet products declined by 19.8% and 27.7% respectively in the domestic market.

Cost of revenues

Cost of revenues decreased by approximately $2.2 million or 15.8%, from approximately $13.9 million in fiscal 2023 to approximately $11.7 million in fiscal 2024. The decreased cost of revenues was the result of the decrease in average unit cost due to a shift toward lower cost traditional pet products. 

Gross profit

Gross profit decreased by approximately $0.5 million or 14.7%, from approximately $3.7 million in fiscal 2023 to approximately $3.1 million in fiscal 2024, primarily attributable to the decreased sales volume of our intelligent pet products. Overall gross profit margin was 21.0% in fiscal 2024, an increase of 0.2 percentage points, as compared to 20.8% in fiscal 2023.

The breakdown of gross profit by products and services categories is as follows: