-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J2aoo3NN2/nFRF5+5Nkw8IHjbNoVv59HMSreS2xRggFIow5RiiiIytKWTiw9UCKA op6zFwLJApX2cUJEoELnLQ== 0000350737-95-000007.txt : 19951120 0000350737-95-000007.hdr.sgml : 19951120 ACCESSION NUMBER: 0000350737-95-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951115 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: 95593439 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 95Q930.wpd 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 September 30, 1995 Commission File No. 0-11102 OCEAN BIO-CHEM, INC. (Exact name of registrant as specified in its charter) Florida 59-1564329 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4041 S. W. 47 Avenue, Ft. Lauderdale, FL 33314 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code - 305-587-6280 Indicate by check mark whether the registrant (l) 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, 3,512,970 issued and outstanding at September 30, 1995. PART I - FINANCIAL INFORMATION Item l. Financial Statements OCEAN BIO-CHEM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) ASSETS SEPT. 30, DEC.31, 1995 1994 Current Assets: Cash $ 596,029 $ 571,411 Trade Accounts Receivable Net Of Allowances For Doubtful Accounts Of $ 33,000 And $ 35,000 At September 30, 1995 And December 31, 1994 Respectively 1,344,976 1,990,558 Due From Officers 186,390 12,520 Inventories 2,206,199 1,927,646 Prepaid Expenses 231,573 102,967 Total Current Assets 4,565,167 4,605,102 Office Equipment And Improvements, Net 322,323 244,119 Other Assets: Trademarks, Trade Names And Patents, Net 472,494 489,738 Due From Affiliated Companies, Net 507,354 370,747 Deposits And Other Assets 33,464 12,322 Total Other Assets 1,013,312 872,807 Total Assets $5,900,802 $5,722,028 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts Payable Trade $ 412,230 $ 536,611 Notes Payable - Bank 1,195,000 1,566,667 Current Portion Of Long-Term Debt - 29,570 Accrued Expenses Payable 135,831 117,059 Total Current Liabilities 1,743,061 2,249,907 Long-term Debt, Less Current Portion - 7,501 Shareholders' Equity: Common Stock 35,130 30,448 Additional Paid-In Capital 2,650,754 2,016,915 Retained Earnings 1,539,994 1,484,808 Foreign Currency Translation Adjustment ( 68,137) ( 67,551) Total Shareholders' Equity $4,157,741 $3,464,620 Total Liabilities & Shareholders' Equity $5,900,802 $5,722,028 2 OCEAN BIO-CHEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) FOR THE THREE MONTHS FOR THE NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, 1995 1994 1995 1994 Gross Sales $ 1,958,245 $ 2,006,143 $ 7,341,627 $ 6,822,180 Allowances 132,584 125,401 415,360 411,075 Net Sales 1,825,661 1,880,742 6,926,267 6,411,105 Cost Of Goods Sold 1,183,933 1,076,476 3,995,561 3,608,840 Gross Profit 641,728 804,266 2,930,706 2,802,265 Cost And Expenses Adv. And Promotion 206,912 197,074 541,975 475,449 Selling And Admin. 506,124 480,627 1,525,067 1,415,446 Interest Expense 21,143 16,261 62,226 43,631 Total Expenses 734,179 693,962 2,129,268 1,934,526 Income (Loss) From Operations ( 92,451) 110,304 801,438 867,739 Interest Income 7,624 - 18,451 - Income (Loss) before provision for income taxes ( 84,827) 110,304 819,889 867,739 Provision (Benefit) for Income taxes ( 33,000) 46,000 308,000 327,000 Net Income (Loss) $( 51,827) $ 64,304 $ 511,889 $ 540,739 Earnings Per Share: Net Income (Loss) Per Share $( .01) $ .02 $ .15 $ .16 Earnings per share for the nine months ended September 30, 1995 and the three months ended September 30, 1995 were calculated on the basis of 3,533,195 weighted average common stock and common stock equivalent outstanding. For the nine and three months ended September 30, 1994, earnings per share were calculated using 3,387,671 weighted average common stock and common stock equivalent outstanding. Common stock equivalents consist of options to purchase common stock. All earnings per share have been adjusted to reflect a 5% stock dividend distributed to shareholders of record as of March 31, 1995. 3 OCEAN BIO-CHEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994 CASH FLOWS PROVIDED BY 1995 1994 OPERATING ACTIVITIES: Net Income $ 511,889 $ 540,739 Adjustment to Reconcile Net Income To Net Cash Provided by Operations: Depreciation 70,870 59,236 Change in Assets and Liabilities: Decrease in Accounts Receivable 471,712 506,446 Increase in Inventory ( 278,553) ( 519,187) Increase in Prepaid Expenses ( 149,748) ( 51,256) Decrease in Accounts Payable And Accrued Expenses ( 120,742) ( 240,335) Net Cash Provided by Operating Activities 505,428 295,643 Cash Flows From Financing Activities: Net Borrowings Under Line of Credit ( 371,667) ( 200,000) Advances to Affiliates ( 136,607) ( 262,678) Repayment of Debt ( 21,938) ( 124,875) Sale of Stock 181,818 23,690 Net Cash Used by Financing Activities ( 348,394) ( 563,863) Cash Flows From Investing Activities Purchase Property, Plant, Equipment ( 131,830) ( 130,268) Net Cash Used by Investing Activities ( 131,830) ( 130,268) Increase (Decrease) in Cash Prior to Effect of Exchange Rate on Cash 25,204 ( 398,488) Effect of Exchange Rate on Cash ( 586) 3,164 Net Increase (Decrease) in Cash 24,618 ( 395,324) Cash at Beginning of Period 571,411 516,892 Cash at September 30, $ 596,029 $ 121,568 Supplemental Disclosures of Cash Flow Information: Cash Paid During the Year for: Interest (Net of Amount capitalized) $ 62,226 $ 39,506 Income taxes $ 314,751 $ 190,771 Disclosure of accounting policy: For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchases with a maturity of three months or less to be cash equivalents. 4 OCEAN BIO-CHEM, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. 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 OPERATIONS Liquidity and Capital Resources The primary sources of the Registrant's liquidity are its operations and short term borrowings froma commercial lender. Currently the Registrant has available a line of credit for $1,500,000 which was renewed in March 1995 for a one year period. Management believes that the normal cash flows generated by operations and such line is sufficient to meet the capital requirements of the registrant for the foreseeable future. The Registrant is involved in making sales in the Canadian market and as such must deal with currency fluctuations of the Canadian currency. The Registrant does not engage in currency hedging and deals with such risks as a pricing issue. During the past few years the Registrant has introduced various new products. This has required the Registrant to increase overall inventory to meet demand. As a result, inventory turnover rates have decreased. The effects of such inventory turnover rates have not been material to the overall operations of the Registrant. Additionally, the Registrant has opened new manufacturing facilities for production of new products. Management is of the opinion that all required capital to maintain such inventory increases can continue to be provided from operations and current lending arrangements. Results of Operations For The Three Month Period July 1-September 30 Gross sales decreased approximately $48,000 or 2% comparing the quarter ended September 30, 1995 with the comparable period of the preceding year. Management attributes this to the effects of inclement weather experienced during the third quarter. Cost of Goods Sold increased at approximately 7% as a percentage of gross sales for the quarter ended September 30, 1995 when compared to the 1994 quarter. This was primarily due to the increased proportion of lower margin products sold which was reflected in the product sales mix during this quarter. Management attributes this to seasonal variation. Advertising and promotion expenses increased approximately $10,000 or 5% comparing the three month period ended September 30, 1995 to 1994. This is due to timing differences. Selling and administrative expenses increased approximately $25,000 or 5% comparing the quarter ended September 30, 1995 to the comparable period in 1994. This was not attributed to any particular factor. Interest expense increased approximately $5,000 comparing the quarter ended September 30, 1995 to the comparable period in 1994. This was primarily due to higher interest rates. 5 Results Of Operations For The Nine Month Period January 1-September 30 Gross sales increased approximately $519,000 or 8% comparing the nine month periods in 1995 and 1994. This is due to the results of the record sales levels experienced in the first quarter. Cost of goods sold increased approximately 2 % of gross sales when comparing the nine months ended September 30,1995 and 1994. This reflects the variations in the sales mix experienced during the third quarter. Advertising and promotion expenses increased approximately $66,000 or 14% when comparing the nine months ended September 30, 1995 and 1994. This was due primarily to special promotions on selected products during the second quarter and timing differences. Selling and administrative expenses increased during 1995 by approximately $110,000 or 8% when compared to 1994. This was primarily due to increased personnel cost, and additions to the sales representatives the Registrant uses in expectations of projected marketing increases. Interest expense increased in 1995 for the nine month period by approximately $19,000 reflecting increased interest rates for the period. 6 PART II - OTHER INFORMATION Item 1 - Legal Proceedings: See the Registrant's 10K for the year ended December 31, 1994 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: Not Applicable Item 5 - Other Information: Not Applicable Item 6 - Exhibits and Reports on Form 8-K (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 behalf by the undersigned thereunto duly authorized. OCEAN BIO-CHEM, INC. Date: 11/14/95 /s/ Peter Dornau Peter G. Dornau Chairman of the Board of Directors and Chief Executive Officer /s/ Peter Dornau Peter G. Dornau Chief Financial Officer 7 EX-27 2 ART. 5 FDS FOR 3RD QUARTER 10-Q
5 This schedule contains summary financial information extracted from the September 30, 1995 10-Q of Ocean Bio-Chem, Inc. and is qualified in its entirety by reference to such financial statements. 9-MOS DEC-31-1995 SEP-30-1995 596,029 0 1,377,976 33,000 2,206,199 4,565,167 605235 (282,912) 5,900,802 1,743,061 0 35,130 0 0 4,122,611 5,900,802 7,341,627 7,341,627 3,995,561 2,129,268 0 0 62,226 819,889 308,000 819,889 0 0 0 511,889 .15 .15
-----END PRIVACY-ENHANCED MESSAGE-----