-----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, HWu7jRZgnamRtd3vO3HvJuOnfTx2qCVYJnlbC/78ANKeOLFhfGiwwjcpwkZOGJgQ 25g0qa5nn2+o+eG9tulpHw== 0000350737-97-000004.txt : 19970520 0000350737-97-000004.hdr.sgml : 19970520 ACCESSION NUMBER: 0000350737-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 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: 97606684 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 10q397 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 March 31, 1997 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 - 954-587-6280 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. 3,702,078 issued and outstanding at March 31, 1997. PART I - Financial Information Item l. Financial Statement OCEAN BIO-CHEM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS ------ MARCH 31, DEC. 31, 1997 1996 ---------- ---------- Current Assets: Cash $ 438,397 $ 394,569 Trade accounts receivable net of allowance for doubtful accounts of $27,000 at March 31, 1997 and December 31, 1996. 2,326,646 2,235,183 Due from Officers 142,360 141,880 Inventories 2,757,215 2,534,862 Prepaid Expenses 164,165 132,238 ---------- ----------- Total Current Assets 5,828,783 5,438,732 ---------- ----------- Property, Plant and Equipment, Net 2,152,257 2,138,815 ---------- ----------- Other Assets: Trademarks, trade names and patents, net 438,006 443,754 Funds held in escrow for construction 3,129,534 3,100,001 Due from Affiliated Companies, Net 725,913 648,866 Deposits and other assets 393,905 185,229 ----------- ----------- Total Other Assets 4,687,358 4,377,850 ----------- ----------- Total Assets $12,668,398 $11,955,397 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable - trade $ 1,274,264 $ 643,409 Notes payable - bank 1,888,001 1,658,001 Current portion of long term debt 240,000 280,000 Other Accrued Liabilities 91,163 119,503 ----------- ----------- Total Current Liabilities 3,493,428 2,700,913 ----------- ----------- Long term debt, less current portion 4,750,000 4,710,000 ----------- ----------- Shareholders' Equity: Common Stock - $.01 par value, 10,000,000 Shares authorized, 3,702,078 shares issued and outstanding 37,020 37,020 Additional paid-in capital 3,172,337 3,172,337 Foreign Currency Translation Adjustment ( 91,024) ( 82,887) Retained Earnings 1,306,637 1,418,014 ----------- ----------- Total Shareholders' Equity 4,424,970 4,544,484 ----------- ----------- Total Liabilities & Shareholders' Equity $ 12,668,398 $ 11,955,397 ============ ============ OCEAN BIO-CHEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THREE MONTHS ENDED MARCH 31, 1997 1996 ------------ ------------- Gross Sales $ 2,572,793 $ 2,487,611 Allowances 288,914 132,969 ----------- ------------ Net Sales 2,283,879 2,354,642 Cost of goods sold 1,661,883 1,494,105 ----------- ------------ Gross Profit 621,996 860,537 Cost and expenses: Advertising and promotion 117,707 81,270 Selling and administrative 614,109 606,256 Interest expense 99,552 41,370 ----------- ----------- Total Cost and Expenses 831,368 728,896 ----------- ----------- Operating Income (Loss) ( 209,372) 131,641 Interest Income 30,797 3,176 ----------- ----------- Income (Loss) before income taxes ( 178,575) 134,817 (Benefit) provision for income taxes ( 67,198) 40,000 ----------- ----------- Net Income (loss) ( 111,377) $ 94,817 =========== =========== Net earnings (loss) per common and common equivalent share, diluted ($ .03) $ .03 =========== =========== Earnings per share were calculated on the basis of 3,745,374 and 3,645,925 shares of common stock and common stock equivalent outstanding for the quarters ended March 31, 1997 and 1996, respectively. Common stock equivalents consist of options to purchase common stock. The March 31, 1996 shares outstanding included a 5% stock dividend . OCEAN BIO-CHEM, INC.AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THREE MONTHS ENDED MARCH 31 1997 1996 ----------- ----------- Cash flow provided (used) by operating activities: Net Income (Loss) $( 111,377) $ 94,817 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 46,225 29,326 Change in assets and liabilities: Increase in accounts receivable ( 91,463) ( 47,910) Increase in inventory ( 222,353) ( 412,310) (Increase) decrease in prepaid expenses ( 73,027) 3,178 Increase in accounts payable and accrued expenses: 404,926 482,594 ------------ ------------ Net cash provided (used) by operating activities: ( 47,069) 149,695 ------------ ------------ Cash provided by financing activities: Net payments under line of credit 230,000 ( 170,000) Advances to affiliates ( 77,047) ( 10,391) Short term borrowings, net ( 40,000) 212,408 Long term borrowings, net 40,000 770,000 ------------ ------------ Net cash provided by financing activities: 152,953 802,017 ------------ ------------ Cash used by investing activities: Purchase property, plant, equipment ( 53,919) ( 1,893,726) ------------ ------------ Net cash used by investing activities: ( 53,919) ( 1,893,726) ------------ ------------ Increase (decrease) in cash prior to effect of exchange rate on cash 51,965 ( 942,014) Effect of exchange rate on cash ( 8,137) 33,673 ------------ ------------ Increase (decrease) in cash 43,828 ( 908,341) Cash at beginning of period 394,569 997,309 ------------ ------------ Cash at end of period $ 438,397 $ 88,968 ============ ============ Supplemental Information Cash used for interest during period $ 99,552 $ 34,758 Cash used for income taxes during period $ 69,790 $ - ------------ ------------ The company had no cash equivalents at March 31, 1997 and 1996. 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. Certain financial statement items for the quarter ended March 31, 1996 have been reclassified to conform to the 1997 presentation. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS Liquidity and Capital Resources The primary sources of the Registrant's liquidity are its operations and short-term borrowings from a commercial bank. During 1996 the Registrant's line of credit commitment was increased from $2 million to $2.9 million by its commercial bank. The total borrowings under such line can aggregate up to $2,900,000 and is subject to renewal in April 1998. The Registrant is required to maintain minimum working capital of $1,500,000, debt to tangible net worth of 2 to 1 and debt service coverage of 1.7 times. The Registrant is involved in making sales in the Canadian market and accordingly must deal with fluctuations of the Canadian currency. The Registrant does not engage in currency hedging and deals with such risk as a pricing issue. Results of Operations: Gross Sales increased approximately 3% for the quarter ended March 31, 1997 when compared to the same quarter of the preceding year. Cost of Goods Sold increased as a percentage of gross sales when comparing the quarter ended March 31, 1997 with the comparable quarter in 1996. The percentages were 64.6% and 60.1% for the quarters ended 1997 and 1996, respectively. This was primarily due to idle plant operations during the construction period. Selling and Administrative expenses increased approximately $8,000 when comparing the quarter ended March 31, 1997 with March 31, 1996. This was not due to any one factor but included increased personnel expense and decreased legal expense. Advertising and Promotion increased approximately $36,000 comparing the three months ended March 31, 1997 with the same period in 1996. This was due to increased cooperative advertisement with customers. Interest Expense increased when comparing the March 31, 1997 quarter to the corresponding quarter in 1996 by approximately $58,000 due primarily to interest on the industrial revenue bonds assumed in connection with the acquisition and expansion of the Alabama facility. PART II - Other Information Item l - Legal Proceedings: Not applicable. 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 Matters: Not applicable Item 6 - Exhibits and Reports on Form 8-K (A) Exhibits: 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: May 14, 1997 By: /s/ Peter G. Dornau ---------------------------- Peter G. Dornau Chairman of the Board and Chief Executive Officer By: /s/ Peter G. Dornau --------------------------- Peter G. Dornau Chief Financial Officer EX-27 2 ART. 5 FDS FOR 1ST QUARTER 10-Q
5 3-MOS DEC-31-1997 MAR-31-1997 438,397 0 2,326,646 27,000 2,757,215 5,828,783 2,678,951 526,694 12,668,398 3,493,428 4,750,000 0 0 37,020 4,387,950 12,668,398 2,572,793 2,603,590 1,661,883 831,368 0 0 99,552 (178,575) (67,198) (111,377) 0 0 0 (111,377) (.03) (.03)
-----END PRIVACY-ENHANCED MESSAGE-----