-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, WwBRSl9RGfwgLHx0wwXMls0+0JbbUDvtqp7PdVlWHatkSTVPpYVPGb857Bieil0j l6GIb+ablTgt8PrUgocQSw== 0000350737-95-000001.txt : 19950814 0000350737-95-000001.hdr.sgml : 19950814 ACCESSION NUMBER: 0000350737-95-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OCEAN BIO CHEM INC CENTRAL INDEX KEY: 0000350737 STANDARD INDUSTRIAL CLASSIFICATION: SPECIALTY CLEANING, POLISHING AND SANITATION PREPARATIONS [2842] IRS NUMBER: 591564329 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11102 FILM NUMBER: 95561702 BUSINESS ADDRESS: STREET 1: 4041 SW 47TH AVE CITY: FORT LAUDERDALE STATE: FL ZIP: 33314 BUSINESS PHONE: 3055876280 MAIL ADDRESS: STREET 1: 4041 SW 47TH AVE CITY: FT LAUDERDALE STATE: FL ZIP: 33314 FORMER COMPANY: FORMER CONFORMED NAME: STAR BRITE CORP DATE OF NAME CHANGE: 19841204 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [x] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1995 Commission File No. 2-70197 OCEAN BIO-CHEM, INC. (Exact name of registrant as specified in its charter) Florida 59-1564329 (State of other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Registrant's telephone number, including area code - 305-587-6280 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. $.01 Par Value Common Stock, 10,000,000 shares authorized. 3,366,338 issued and outstanding at June 30, 1995. PART I - Financial Information Item l. Financial Statement OCEAN BIO-CHEM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS JUNE 30, DEC. 31, 1995 1994 Current Assets: Cash $1,143,374 $ 571,411 Trade Accounts Receivable Net of Allowances for Doubtful Accounts of $ 36,000 and $ 35,000 at June 30, 1995 and December 31, 1994, Respectively 1,432,377 1,990,558 Due From Officers 28,600 12,520 Inventories 2,395,386 1,927,646 Prepaid Expenses 209,186 102,967 Current Assets 5,208,923 4,605,102 Office Equipment and Furnishings, Net 250,977 244,119 Other Assets Trademarks, Trade Names and Patents, Net 478,242 489,738 Deposits and Other Assets 35,451 12,322 Due From Affiliated Companies, Net 532,744 370,747 Total Other Assets 1,046,437 872,807 Total Assets $ 6,506,337 $ 5,722,028 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts Payable - Trade $ 939,681 $ 536,611 Notes Payable - Bank 1,331,667 1,566,667 Current Portion of Long-Term Debt - 29,570 Accrued Expenses Payable 168,103 117,059 Total Current Liabilities 2,439,451 2,249,907 Long-term Debt, Less Current Portion - 7,501 Shareholders' Equity: Common Stock 33,663 30,448 Additional Paid-in Capital 2,516,220 2,016,915 Retained Earnings 1,591,821 1,484,808 Foreign Currency Translation Adjustment ( 74,818) ( 67,551) Total Shareholders' Equity 4,066,886 3,464,620 Total Liabilities & Shareholders' Equity $ 6,506,337 $ 5,722,028 OCEAN BIO-CHEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS FOR THE SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, 1995 1994 1995 1994 Gross Sales $2,908,971 $2,819,649 $5,383,382 $4,816,037 Allowances 131,625 101,909 282,776 285,674 Net Sales 2,777,346 2,717,740 5,100,606 4,530,363 Cost of Goods Sold 1,542,353 1,480,524 2,811,628 2,532,364 Gross Profit 1,234,993 1,237,216 2,288,978 1,997,999 Cost and Expenses: Advertising and Promotion 229,858 185,040 335,063 278,375 Selling and Administrative 472,153 502,603 1,018,943 934,819 Interest Expense 15,154 10,596 41,083 27,370 Total Cost and Expenses 717,165 698,239 1,395,089 1,240,564 Income From Operations 517,828 538,977 893,889 757,435 Interest Income 6,932 - 10,827 - Income before provision for income taxes 524,760 538,977 904,716 757,435 Provision for Income Taxes 201,000 205,000 341,000 281,000 Net Income $ 323,760 $ 333,977 $ 563,716 $ 476,435 Net Per Share $ .09 $ .10 $ .16 $ .14 Earnings per share were calculated based on the weighted average common stock and common stock equivalent outstanding of 3,513,495 shares for the six months and three months ending June 30, 1995 and 3,387,671 shares for the six months and three months ended June 30, 1994. Common stock equivalents consist of options to purchase common stock. All earnings per share have been restated to reflect a 5% stock dividend distributed to shareholders of record as of March 31, 1995. OCEAN BIO-CHEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR SIX MONTHS ENDED JUNE 30 1995 1994 Cash flow used by operating activities: Net Income $ 563,716 $ 476,435 Adjustments to Reconcile Net Income to Net Cash Provided by Operations: Depreciation and Amortization 44,567 38,596 Change in Assets and Liabilities: Decrease in Accounts Receivable 558,181 291,274 Increase in Inventory ( 467,740) ( 386,656) Increase in Prepaid Expenses ( 145,426) ( 118,601) Increase in Accounts Payable and Accrued Expenses: 501,271 61,355 Net Cash Provided by Operating Activities: 1,054,569 362,403 Cash Flows From Financing Activities: Net Borrowings Under Line of Credit ( 235,000) 95,000 Advances (to) From Affiliates, net ( 161,997) ( 241,387) Borrowings (Payment) on Debts, Net ( 84,228) ( 141,854) Sale of Stock 45,817 3,240 Net Cash Used by Financing Activities: ( 435,408) ( 285,001) Cash Flows From Investing Activities: Purchase Property, Plant, Equipment ( 39,931) ( 106,884) Net Cash Used by Financing Activities: ( 39,931) ( 106,884) Increase (Decrease) in Cash Prior to Effect of Exchange Rate on Cash 579,230 ( 29,482) Effect of Exchange Rate on Cash ( 7,267) ( 117) Net Increase (Decrease) in Cash 571,963 ( 29,599) Cash at Beginning of Period 571,411 516,892 Cash at June 30, $ 1,143,374 $ 487,293 Supplemental Information Cash Used for Interest During Period $ 41,300 $ 15,375 Cash Used for Income Taxes During Period $ 210,331 $ 187,000 For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. OCEAN BIO-CHEM, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS l. The information contained in this Report is unaudited, but reflects all adjustments which are, in the opinion of the management, necessary for a fair statement of results of the interim periods, consisting only of normal recurring accruals. The results for such interim periods are not necessarily indicative of results to be expected for the full year. ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION Liquidity and Capital Resources The primary sources of the Registrant's liquidity are its operations and short term borrowings from a commercial lender. During 1994 the registrant increased its financial commitments from its commercial bank. Currently the Registrant has $1,500,000 available through a one year renewable line of credit. The line was renewed in March of 1995 for a one year period. Management believes that the normal cash flows generated from operations and the line of credit are sufficient to cover the capital requirements of the Registrant in the foreseeable future. The Registrant is involved in making sales in the Canadian market and must deal with the currency fluctuations of the Canadian currency. The Registrant does not engage in currency hedging and deals with such currency risk as a pricing issue. During the past few years Registrant has introduced various new products to the market. This has required the Registrant to carry greater amounts of overall inventory and has resulted in lower inventory turnover rates. The effects of such inventory turnover have not been material to the overall operations of Registrant. Registrant believes that all required capital to maintain such increases can continue to be provided from operations and current lending arrangements. Results of Operations For The Three Month Period April 1-June 30: Gross Sales increased approximately $89,000 or 3 % when comparing the quarter ended June 30, 1995 with the comparable period of the preceding year. Management attributes the lower than expected increase of gross sales due to the inclement weather during the latter part of the second quarter. Cost of Goods Sold remained constant remained constant as a percentage of sales when comparing the quarter ended June 30, 1995 with the quarter ended June 30, 1994. Advertising and Promotion expenses increased approximately $ 45,000 or 24 % when comparing the three months ended June 30, 1995 tot he three months ended June 30, 1994. This was primarily the results of special promotions on selected products relating to market penetration. Selling and Administrative expenses decreased approximately $30,000 or 6% when comparing the quarter ended June 30, 1995 to the comparable period in 1994. This was not due to any one particular factors. Interest Expense increased approximately $5,000 or 43% comparing the quarter ended June 30, 1995 to the comparable period in 1994. This was primarily due to increased levels of borrowings outstanding and increased interest rates of the registrant's line of credit during this period. Result of Operations For the Six Month Period January 1 - June 30 Gross Sales creased 12 % or approximately $567,000 when comparing the six month periods of 1995 and 1994. Management attributes the increase to the record sales levels experienced during the first quarter. Cost of Goods sold increased approximately 1% as a percentage of gross sales when comparing the six months ended June 30, 1995 to the six months ended June 30, 1995. This was not due to any one particular factor. Advertising and promotion expenses increased approximately 20% or $57,000 when comparing the six months ended June 30, 1995 to the six months ended June 30, 1994. This was primarily due to the results of special promotions on selected products relating to market penetration expended in the second quarter. Selling and administrative expenses increased for the six months ended June 30, 1995 by approximately $ 84,000 or 9 % when compared to the six months ended June 30, 1994. This was primarily due to the increased selling, mailing and administrative expenses of the first quarter. Interest expense increased in 1995 for the six month period by approximately $14,000 or 52% when compared to the six month period of 1994 reflecting increased levels of borrowings outstanding and increased rates on the Registrants line of credit during this period. PART II: OTHER INFORMATION Item l - Legal Proceedings: See the Registrant's 10K for the year ended December 31, 1993 Item 2 - Changes in Securities: Not applicable Item 3 - Defaults Upon Senior Securities: Not applicable Item 4 - Submission of Matters to Vote of Security Holders: On May 16, 1995, at the Registrant's annual meeting, shareholders elected two directors; Peter Dornau and Jeffrey Tieger, 2,074,789 voted for the directors, none voted against. Shareholders also approved Levi, Rattner, Cahlin & Co., P.A., Certified Public Accountants, by a vote of 2,074,128 for and 661 shares against, as the Registrant's auditors for 1995. Item 5 - Other Matters: Not applicable Item 6 - Exhibits: Not applicable (A) Exhibits - Not applicable (B) Reports on Form 8-K - Not Applicable SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OCEAN BIO-CHEM, INC. Date: 8/11/95 By: Peter G. Dornau Chairman of the Board and Chief Executive Officer By: Peter G. Dornau Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----