10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-11102

OCEAN BIO-CHEM, INC.

(Exact name of registrant as specified in its charter)

Florida	59-1564329
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

4041 SW 47 AVENUE

FORT LAUDERDALE, FLORIDA 33314

(Address of principal executive offices)

954-587-6280

(Registrant’s telephone number, including area code)

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 by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨	Accelerated filer    ¨
Non-accelerated filer  ¨	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

At November 13, 2014, 8,914,274 shares of the registrant’s Common Stock were outstanding.

OCEAN BIO-CHEM, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

		Page
PART I	Financial Information:
	Item 1. Financial Statements	3
	Condensed consolidated balance sheets at September 30, 2014 (unaudited) and December 31, 2013	3
	Condensed consolidated statements of operations (unaudited) for the three and nine months ended September 30, 2014 and 2013	4
	Condensed consolidated statements of comprehensive income (unaudited) for the three and nine months ended September 30, 2014 and 2013	5
	Condensed consolidated statements of cash flows (unaudited) for the nine months ended September 30, 2014 and 2013	6
	Notes to condensed consolidated financial statements	7-13
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	14-18
	Item 3. Quantitative and Qualitative Disclosures about Market Risk	19
	Item 4. Controls and Procedures	19
PART II	Other Information:
	Item 1A. Risk Factors	19
	Item 6. Exhibits	20
	Signatures	21

2

PART 1-FINANCIAL INFORMATION

Item 1. Financial Statements

OCEAN BIO-CHEM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2014			December 31, 2013
	(Unaudited)
ASSETS
Current Assets:
Cash	$	1,828,433		$	3,071,887
Trade accounts receivable less allowances of approximately $93,000 and $93,000, respectively		6,153,532			4,413,656
Receivables due from affiliated companies		489,597			536,402
Inventories, net		8,793,629			7,367,894
Prepaid expenses and other current assets		803,757			621,107
Deferred tax asset		67,546			64,665
Total Current Assets		18,136,494			16,075,611
Property, plant and equipment, net		5,220,565			5,116,441
Other Assets:
Trademarks, trade names, royalty rights, and patents, net		1,112,806			920,269
Other assets		6,325			130,803
Total Other Assets		1,119,131			1,051,072
Total Assets	$	24,476,190		$	22,243,124
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable – trade	$	2,397,419		$	1,013,829
Current portion of long term debt		423,384			414,525
Income taxes payable		41,098			119,943
Accrued expenses payable		1,091,407			1,067,355
Total Current Liabilities		3,953,308			2,615,652
Deferred tax liability		196,571			237,635
Long term debt, less current portion		798,736			1,117,761
Total Liabilities		4,948,615			3,971,048
Commitments and contingencies
Shareholders' Equity:
Common stock - $.01 par value, 12,000,000 shares authorized; 8,914,274 and 8,749,888 shares issued		89,142			87,499
Additional paid in capital		9,131,952			8,805,460
Less cost of common stock in treasury, 0 and 79,941 shares, respectively		-			(65,029	)
Accumulated other comprehensive loss		(272,955	)		(266,456	)
Retained earnings		10,579,436			9,482,128
Total Shareholders' Equity of Ocean Bio-Chem, Inc.		19,527,575			18,043,602
Noncontrolling interest		—			228,474
Total Shareholders' Equity		19,527,575			18,272,076
Total Liabilities and Shareholders' Equity	$	24,476,190		$	22,243,124

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

OCEAN BIO-CHEM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Gross sales	$	10,934,694		$	10,878,028		$	26,342,525		$	26,058,406
Less: discounts, returns, and allowances		502,249			437,303			1,176,586			1,127,666
Net sales		10,432,445			10,440,725			25,165,939			24,930,740
Cost of goods sold		6,839,296			7,258,766			16,054,342			16,535,366
Gross profit		3,593,149			3,181,959			9,111,597			8,395,374
Operating Expenses:
Advertising and promotion		642,547			633,015			1,942,710			2,019,838
Selling and administrative		1,615,369			1,552,490			4,899,713			4,580,519
Total operating expenses		2,257,916			2,185,505			6,842,423			6,600,357
Operating income		1,335,233			996,454			2,269,174			1,795,017
Other expense
Interest, net (expense)		(10,272	)		(16,219	)		(31,789	)		(51,843	)
Income before income taxes		1,324,961			980,235			2,237,385			1,743,174
Provision for income taxes		426,155			351,081			717,210			622,231
Net income		898,806			629,154			1,520,175			1,120,943
Loss (gain) attributable to noncontrolling interests		4,287			(7,489	)		17,149			22,390
Net income attributable to Ocean Bio-Chem, Inc.	$	903,093		$	621,665		$	1,537,324		$	1,143,333
Earnings per common share – basic and diluted	$	0.10		$	0.07		$	0.17		$	0.13
Dividends declared per common share	$	—		$	—		$	0.05		$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

4

OCEAN BIO-CHEM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Net Income	$	898,806		$	629,154		$	1,520,175		$	1,120,943
Other comprehensive (loss) income :
Foreign currency translation adjustment		(10,292	)		3,438			(6,499	)		(3,175	)
Comprehensive income		888,514			632,592			1,513,676			1,117,768
Comprehensive loss (gain) attributable to noncontrolling interests		4,287			(7,489	)		17,149			22,390
Comprehensive income attributable to Ocean Bio-Chem, Inc.	$	892,801		$	625,103		$	1,530,825		$	1,140,158

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

5

OCEAN BIO-CHEM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended
	September 30,
	2014			2013
Cash flows from operating activities:
Net income	$	1,520,175		$	1,120,943
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		623,653			578,734
Deferred income taxes		(43,945	)		(8,727	)
Stock based compensation		356,085			318,110
Other operating non-cash items		29,868			132,499
Changes in assets and liabilities:
Trade accounts receivable		(1,838,350	)		(4,059,225	)
Inventories		(1,425,735	)		649,554
Other assets		13,058			3,725
Prepaid expenses and other current assets		(182,650	)		(135,127	)
Receivables due from affiliated companies		46,805			113,516
Accounts payable and other accrued expenses		1,192,228			1,019,958
Net cash provided by (used in) operating activities		291,192			(266,040	)
Cash flows from investing activities:
Purchases of property, plant and equipment		(675,734	)		(475,362	)
Cash paid for acquisition of joint venture partner's interest in OdorStar		(150,000	)		—
Purchase of royalty rights		—			(160,000	)
Net cash used in investing activities		(825,734	)		(635,362	)
Cash flows from financing activities:
Net borrowings under revolving line of credit		—			300,000
Payments on long-term debt		(310,166	)		(304,476	)
Dividends paid to common shareholders		(440,016	)		—
Proceeds from exercise of stock options		63,250			79,667
Net cash (used in) provided by financing activities		(686,932	)		75,191
Effect of exchange rates on cash		(21,980	)		(2,680	)
Net decrease in cash		(1,243,454	)		(828,891	)
Cash at beginning of period		3,071,887			1,508,385
Cash at end of period	$	1,828,433		$	679,494
Supplemental disclosure of cash flow information:
Cash paid for interest during period	$	39,571		$	52,700
Cash paid for income taxes during period	$	840,000		$	701,100
Supplemental disclosure of noncash investing information:
Amounts due from joint venture partner released as part of acquisition of joint venture partner's interest in OdorStar	$	305,905

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

OCEAN BIO-CHEM, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF ACCOUNTING POLICIES

Interim reporting

The accompanying unaudited condensed consolidated financial statements include the accounts of Ocean Bio-Chem, Inc. and its subsidiaries, all of which are wholly-owned. Prior to September 16, 2014, one of the Company’s subsidiaries, OdorStar Technology, LLC (“OdorStar”), was a joint venture in which the Company had a 50% interest. OdorStar was included in the unaudited condensed consolidated financial statements because the Company had a controlling interest.  All significant intercompany transactions and balances have been eliminated in consolidation.  Certain prior-period data have been reclassified to conform to the current period presentation.  Unless the context indicates otherwise, the term “Company” refers to Ocean Bio-Chem, Inc. and its subsidiaries.

The unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

The financial information furnished herein reflects all adjustments, consisting of normal recurring items that, in the opinion of management, are necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014.

The information included in this Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions.

2. RECENT ACCOUNTING PRONOUNCEMENTS

There have been no accounting pronouncements or changes in accounting pronouncements during the nine months ended September 30, 2014 that are expected to have a material impact on the Company’s financial position, results of operations or cash flows. Accounting pronouncements that became effective during the nine months ended September 30, 2014 did not have a material impact on the Company’s financial position, results of operations or cash flows, or on financial statement disclosures made by the Company.

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3. INVENTORIES

The composition of inventories at September 30, 2014 and December 31, 2013 are as follows:

	September 30, 2014			December 31, 2013
Raw materials	$	3,565,164		$	3,262,769
Finished goods		5,530,761			4,407,421
Inventories, gross		9,095,925			7,670,190
Inventory reserves		(302,296	)		(302,296	)
Inventories, net	$	8,793,629		$	7,367,894

The inventory reserves shown in the table above reflect slow moving and obsolete inventory.

The Company manages an inventory program for one of its customers to improve the promotion of the Company's products. The Company manages the inventory levels at the customer’s warehouses and recognizes revenue as the products are sold by the customer. The inventories managed at the customer’s warehouses amounted to approximately $551,000 and $408,000 at September 30, 2014 and December 31, 2013, respectively, and are included in inventories, net on the balance sheet.

4. PROPERTY, PLANT, & EQUIPMENT

The Company’s property, plant and equipment consisted of the following at September 30, 2014 and December 31, 2013:

	Estimate Useful Life	September 30, 2014			December 31, 2013
Land		$	278,325		$	278,325
Building and improvements	30 years		4,648,089			4,632,565
Manufacturing and warehouse equipment	6-20 years		8,440,289			8,160,173
Office equipment and furniture	3-5 years		1,013,327			830,950
Construction in process			72,419			19,604
Leasehold improvements	10-15 years		428,214			419,315
Vehicles	3 years		128,830			32,263
Property, plant and equipment, gross			15,009,493			14,373,195
Less accumulated depreciation			(9,788,928	)		(9,256,754	)
Property, plant and equipment, net		$	5,220,565		$	5,116,441

5. ODORSTAR JOINT VENTURE

In 2010, the Company and BBL Distributors, LLC (“BBL”) organized OdorStar. OdorStar owns patents relating to a device for producing chlorine dioxide, which, among other things, can be used in products designed to safely prevent and eliminate odors relating to mold, mildew and other sources of unpleasant odors. Disinfectant products incorporating the device are manufactured and marketed under the Performacide^® brand name.

OdorStar operated as a joint venture until September 16, 2014, when the Company acquired BBL’s membership interest, at which time OdorStar became a wholly-owned subsidiary of the Company. In connection with the Company’s acquisition in OdorStar, BBL and its affiliates released any rights they may have to the Performacide^® trade name. The Company paid BBL $150,000 and released BBL from indebtedness of $305,905 claimed by the Company.

Prior to the acquisition, the Company and BBL shared equally in profits or losses from OdorStar. The Company’s consolidated statements of operations include OdorStar’s operating loss of approximately $8,000 and operating income of $14,000 during the three months ended September 30, 2014 and 2013, respectively, and operating losses of approximately $34,000 and $45,000 during the nine months ended September 30, 2014 and 2013, respectively.

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6. REVOLVING LINE OF CREDIT

On August 4, 2014, Ocean Bio-Chem, Inc. (the “Company”) and Regions Bank entered into a new Business Loan Agreement (the “Business Loan Agreement”), under which the Company was provided a renewed revolving line of credit. Under the renewed revolving line of credit, the Company may borrow up to the lesser of (i) $6 million or (ii) a borrowing base equal to 80% of eligible accounts receivable (as defined in the Business Loan Agreement) plus 50% of eligible inventory (as defined in the Business Loan Agreement). Interest on amounts borrowed under the revolving line of credit is payable monthly at the 30 day LIBOR rate plus 1.65% per annum (unless the Company’s debt service coverage ratio (generally, net operating profit plus depreciation, amortization and lease/rent expense divided by current maturities of long-term debt plus interest and lease/rent expense, calculated on a trailing twelve month basis) falls to or below 2.0 to 1, in which case interest is payable at the 30 day LIBOR rate plus 2.65% per annum).

Outstanding amounts under the revolving line of credit are payable on demand.  If no demand is made, the Company may repay and reborrow funds from time to time until expiration of the revolving line of credit on July 6, 2016, at which time all outstanding principal and interest will be due and payable. The Company’s obligations under the revolving line of credit are secured by among other things, the Company’s accounts receivable, inventory, contract rights and general intangibles and, as a result of cross-collateralization of the Company’s obligations under the term loan described in Note 7 and the revolving line of credit, real property and equipment at the Montgomery, Alabama facility of the Company’s subsidiary, Kinpak, Inc. ("Kinpak").   The Business Loan Agreement includes financial covenants requiring a minimum debt service coverage ratio of 1.75 to 1.00, tested on a trailing twelve month basis, and a maximum debt to capitalization ratio (generally, funded debt divided by the sum of total net worth and funded debt) of 0.75 to 1, tested quarterly.  The line of credit is subject to several events of default, including a decline in the majority shareholder’s ownership below 50% of all outstanding shares. At September 30, 2014, the Company was in compliance with these covenants. At September 30, 2014 and December 31, 2013, the Company had no borrowings under the revolving line of credit.

The revolving line of credit replaces an earlier line of credit issued under a Credit Agreement that the Company, together with Kinpak, entered into with Regions Bank and Regions Equipment Finance Corporation ("REFCO") on July 6, 2011 (the "Credit Agreement"). The terms of the revolving line of credit under the Credit Agreement were similar to the terms of the revolving line of credit under the Business Loan Agreement.

7. LONG TERM DEBT

On July 6, 2011, under the Equipment Finance Addendum to the Credit Agreement, REFCO provided to the Company a $2,430,000 term loan with a fixed interest rate of 3.54%.  Principal and interest on the term loan are payable in equal monthly installments through July 6, 2017, the date on which the term loan matures.  The proceeds of the term loan were used to pay the Company’s remaining obligations under a lease agreement relating to industrial revenue bonds used to fund the expansion of Kinpak’s facilities and acquisition of related equipment.  At September 30, 2014, approximately $1,212,000 was outstanding under the term loan. The term loan and the revolving line of credit under the Business Loan Agreement described in Note 6 are cross-defaulted (i.e., a default under one instrument will be deemed a default under the other).

At September 30, 2014 and December 31, 2013, the Company was obligated under various capital lease agreements covering equipment utilized in the Company’s operations. The capital leases, aggregating $10,331 and $19,532 at September 30, 2014 and December 31, 2013, respectively, have varying maturities through 2015 and carry interest rates ranging from 7% to 14%.

The following table provides information regarding the Company’s long term debt at September 30, 2014 and December 31, 2013:

	Current Portion				Long Term Portion
	September 30, 2014		December 31, 2013		September 30, 2014		December 31, 2013
Term loan	$	413,903	$	403,074	$	797,886	$	1,109,680
Capitalized equipment leases		9,481		11,451		850		8,081
Total long term debt	$	423,384	$	414,525	$	798,736	$	1,117,761

9

Required principal payments under the Company’s long term obligations are set forth below:

12 month period ending September 30,
2015	$	423,384
2016		429,645
2017		369,091
Total	$	1,222,120

8. RELATED PARTY TRANSACTIONS

During the three and nine months ended September 30, 2014 and 2013, the Company sold products to companies affiliated with its Chairman, President and Chief Executive Officer. The affiliated companies distribute the products outside of the United States and Canada. The Company also provides administrative services to these companies. Sales to the affiliated companies aggregated approximately $466,000 and $397,000 during the three months ended September 30, 2014 and 2013, respectively, and approximately $1,474,000 and $1,337,000 for the nine months ended September 30, 2014 and 2013, respectively. Administrative fees aggregated approximately $143,000 and $83,000 during the three months ended September 30, 2014 and 2013, respectively, and approximately $382,000 and $319,000 for the nine months ended September 30, 2014 and 2013, respectively. The Company had accounts receivable from the affiliated companies in connection with the product sales and administrative services aggregating approximately $490,000 and $536,000 at September 30, 2014 and December 31, 2013, respectively. Transactions with the affiliated companies were made in the ordinary course of business. While the terms of sale to the affiliated companies differed from the terms applicable to other customers, the affiliated companies bear their own warehousing, distribution, advertising, selling and marketing costs, as well as their own freight charges (the Company pays freight charges in connection with sales to its domestic customers on all but small orders). Moreover, the Company does not pay sales commissions with respect to products sold to the affiliated companies. As a result, the Company believes its profit margins with respect to sales to the affiliated companies are similar to the profit margins with respect to sales to its larger domestic customers. Management believes that the sales transactions did not involve more than normal credit risk or present other unfavorable features.

A subsidiary of the Company currently uses the services of an entity that is owned by its Chairman, President and Chief Executive Officer to conduct product research and development, marketing and advertising. Under this arrangement, the Company paid the entity approximately $10,500 for each of the three month periods ended September 30, 2014 and 2013, and $31,500 for each of the nine month periods ended September 30, 2014 and 2013.

The Company leases office and warehouse facilities in Fort Lauderdale, Florida from an entity controlled by its Chairman, President and Chief Executive Officer. The Company believes that the rental payments are below market rates. See Note 9 for a description of the lease terms.

A director of the Company is Regional Executive Vice President of an entity from which the Company sources most of its insurance needs at an arm’s length competitive basis. During the three months ended September 30, 2014 and 2013, the Company paid an aggregate of approximately $203,000 and $72,000, respectively, and during the nine months ended September 30, 2014 and 2013, the Company paid an aggregate of approximately $518,000 and $405,000, respectively, in insurance premiums on policies obtained through the entity.

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9. COMMITMENTS AND CONTINGENCIES

The Company leases its executive offices and warehouse facilities in Fort Lauderdale, Florida from an entity controlled by its Chairman, President and Chief Executive Officer. On May 16, 2013, the term of the lease, which was scheduled to expire on May 1, 2018, was extended through December 31, 2023. The lease requires annual minimum base rent of $94,800 and provides for a maximum annual 2% increase in subsequent years, although the entity has not raised the minimum rent since the Company entered into a previous lease agreement in 1998. Additionally, the leasing entity is entitled to reimbursement of all taxes, assessments, and any other expenses that arise from ownership. Each of the parties to the lease has agreed to review the terms of the lease every three years at the request of the other party. Rent expense under the lease was approximately $24,000 for each of the three month periods ended September 30, 2014 and 2013, and was approximately $73,000 for each of the nine month periods ended September 30, 2014 and 2013.

On November 25, 2013, OdorStar and Kinpak filed a Second Amended Complaint in the United States District Court for the Southern District of Florida, alleging patent infringement by SSM Distributors LLC, d/b/a Biocide Systems, and SSM Manufacturing, Inc. SMM Distributors LLC is now defunct. The Second Amended Complaint, which amended a complaint initially filed on January 18, 2013, alleges that Biocide manufactured, used, sold and continues to sell an odor-eliminating product that infringes OdorStar's U.S. Patent No. 6,764,661 (“the ‘661 patent”), relating to a device for producing chlorine dioxide. Biocide denied infringement and both sides moved for summary judgment. On January 27, 2014, the District Court granted the defendants' motion for summary judgment of non-infringement and denied the plaintiffs' motion.

OdorStar and Kinpak have appealed the judgment to the United States Court of Appeals for the Eleventh Circuit. Specifically, OdorStar and Kinpak contend that the district court erred in construing the claims of the ‘661 patent and in entering summary judgment of non-infringement based on an incorrect claim construction. The appeal is pending.

On March 27, 2014, the defendants filed a motion with the District Court seeking payment by OdorStar and Kinpak of their attorneys’ fees and non-taxable costs in the amount of $259,550, based on, among other things, the defendants’ contention that the plaintiffs' patent infringement claims were vexatious and intended to intimidate the defendants into withdrawing from competition with the plaintiffs. OdorStar and Kinpak filed an opposition to the motion, essentially denying the defendants' contentions and stating that defendants were not entitled to payment of their attorneys’ fees under applicable legal standards. The District Court has not yet ruled on the motion.

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10. EARNINGS PER SHARE

Basic earnings per share is calculated based on net income attributable to Ocean Bio-Chem, Inc. and the weighted average number of shares outstanding during the reported period. Diluted earnings per share reflect additional dilution from potential common stock issuable upon the exercise of outstanding stock options. The following table sets forth the computation of basic and diluted earnings per common share, as well as a reconciliation of the weighted average number of common shares outstanding to the weighted average number of shares outstanding on a diluted basis.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Earnings per common share -Basic
Net income attributable to OBCI	$	903,093	$	621,665	$	1,537,324	$	1,143,333
Weighted average number of common shares outstanding		8,914,274		8,605,183		8,808,219		8,499,800
Earnings per common share - Basic	$	0.10	$	0.07	$	0.17	$	0.13
Earnings per common share – Diluted
Net income attributable to OBCI	$	903,093	$	621,665	$	1,537,324	$	1,143,333
Weighted average number of common shares outstanding		8,914,274		8,605,183		8,808,219		8,499,800
Dilutive effect of employee stock-based awards		86,900		234,061		114,372		270,358
Weighted average number of common shares outstanding - assuming dilution		9,001,174		8,839,244		8,922,591		8,770,158
Earnings per common share - Diluted	$	0.10	$	0.07	$	0.17	$	0.13

The Company had no stock options outstanding for each of the three and nine month periods ended September 30, 2014 and 2013, respectively, that were anti-dilutive and therefore not included in the diluted earnings per common share calculation.

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11. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

During the three months ended September 30, 2014, no stock options were exercised.

During the nine months ended September 30, 2014, stock options to purchase an aggregate of 145,000 shares were exercised. Following the withholding of an aggregate of 14,633 shares in connection with the net exercise feature of the stock options, the Company delivered an aggregate of 130,367 shares to the option holders who exercised their options.

There was no stock compensation expense related to stock awards during the three months ended September 30, 2014 and 2013. Stock compensation expense recognized during the nine months ended September 30, 2014 and 2013 attributable to stock awards totaled approximately $356,000 and $306,000, respectively. Stock compensation expense attributable to stock options was $0 and $3,000 for the three months ended September 30, 2014 and 2013, respectively, and $0 and $12,000 for the nine months ended September 30, 2014 and 2013, respectively.

At September 30, 2014, there was no unrecognized compensation expense related to stock options.

The following table provides information at September 30, 2014 regarding outstanding stock options under the Company’s stock option plans. As used in the table below, “2002 NQ” refers to the Company’s 2002 Non-Qualified Stock Option Plan and “2008 NQ” refers to the Company’s 2008 Non-Qualified Stock Option Plan.

Plan	Date Granted	Options Outstanding		Exercisable Options	Exercise Price		Expiration Date	Weighted Average Remaining Life
2002 NQ	4/03/06		40,000	40,000	$	1.08	4/02/16	1.5
2002 NQ	12/17/07		40,000	40,000	$	1.32	12/16/17	3.3
2008 NQ	1/11/09		40,000	40,000	$	0.69	1/10/19	4.3
2008 NQ	4/26/10		20,000	20,000	$	2.07	4/25/20	5.7
			140,000	140,000	$	1.18		3.4

13

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-looking Statements:

Certain statements contained in this Quarterly Report on Form 10-Q, including without limitation, our anticipated lower effective tax rate in 2014 as compared to 2013, anticipated full year 2014 advertising and promotion expenses, our ability to provide required capital to support inventory levels, the effect of price increases in raw materials that are petroleum or chemical based or commodity chemicals on our margins, and the sufficiency of funds provided through operations and existing sources of financing to satisfy our cash requirements constitute forward-looking statements. For this purpose, any statements contained in this report that are not statements of historical fact may be deemed forward-looking statements. Without limiting the generality of the foregoing, words such as "believe," "may," "will," "expect," "anticipate," "intend," or "could," including the negative or other variations thereof or comparable terminology, are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause actual results to be materially different from those expressed or implied by such forward-looking statements. Factors that may affect these results include, but are not limited to, the highly competitive nature of our industry; reliance on certain key customers; changes in consumer demand for marine, recreational vehicle and automotive products; advertising and promotional efforts; exposure to market risks relating to changes in interest rates, foreign exchange rates, prices for raw materials that are petroleum or chemical based and other factors.

Overview:

We are principally engaged in manufacturing, marketing and distributing a broad line of appearance, performance and maintenance products for the marine, automotive, power sports, recreational vehicle and outdoor power equipment markets, under the Star brite®, StarTron® and other trademarks within the United States of America and Canada.  We also manufacture, market and distribute products incorporating a patented device for producing chlorine dioxide, designed to safely prevent and eliminate odors related to mold, mildew and other sources of unpleasant odors, as well as disinfectant products, marketed under the Performacide® trademark, that also incorporate the patented device. In addition, we produce private label formulations of many of our products for various customers and provide custom blending and packaging services for these and other products.  We sell our products through national retailers and to national and regional distributors who, in turn, sell our products to specialized retail outlets.

Critical accounting estimates:

See “Management's Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2013 for information regarding our critical accounting estimates.

Results of Operations:

Three Months Ended September 30, 2014 Compared to the Three Months Ended September 30, 2013

The following table provides a summary of our financial results for the three months ended September 30, 2014 and 2013:

	For The Three Months Ended September 30,
					Percent			Percentage of Net Sales
	2014		2013		Change			2014			2013
Net Sales	$	10,432,445	$	10,440,725		(0.1	%)		100.0	%		100.0	%
Cost of Goods Sold		6,839,296		7,258,766		(5.8	%)		65.6	%		69.5	%
Gross Profit		3,593,149		3,181,959		12.9	%		34.4	%		30.5	%
Advertising and Promotion		642,547		633,015		1.5	%		6.2	%		6.1	%
Selling and Administrative		1,615,369		1,552,490		4.1	%		15.5	%		14.9	%
Operating Income		1,335,233		996,454		34.0	%		12.8	%		9.5	%
Interest Expense, net		10,272		16,219		(36.7	%)		0.1	%		0.2	%
Provision for Income Taxes		426,155		351,081		21.4	%		4.1	%		3.4	%
Net Income	$	898,806	$	629,154		42.9	%		8.6	%		6.0	%
Net Income Attributable to Ocean Bio-Chem, Inc.	$	903,093	$	621,665		45.3	%		8.7	%		6.0	%

Net sales were approximately $10,432,000 for the three months ended September 30, 2014 compared to approximately $10,441,000 during the same period in 2013, a decrease of approximately $9,000 or 0.1%.   The reduction in net sales is due to reduced sales volume, largely offset by higher prices.

14

Cost of goods sold and gross profit – Cost of goods sold decreased by approximately $420,000 or 5.8% to approximately $6,839,000 during the three months ended September 30, 2014, from approximately $7,259,000 during the same period in 2013. The lower cost of goods sold reflects improved efficiencies at our manufacturing plant.

Gross profit increased by approximately $411,000 or 12.9% to approximately $3,593,000 for the three months ended September 30, 2014, from approximately $3,182,000 during the same period in 2013. As a percentage of net sales, gross profit was approximately 34.4% and 30.5% for the three month periods ended September 30, 2014 and 2013 respectively. The increased percentage for the 2014 period reflects increased selling prices, and improved efficiencies at our manufacturing plant.

Advertising and promotion expenses increased to approximately $643,000 for the three months ended September 30, 2014 from approximately $633,000 during the same period in 2013, an increase of approximately $10,000 or 1.5%.  As a percentage of net sales, advertising and promotion expense was approximately 6.2% in the third quarter of 2014 compared to approximately 6.1% in the third quarter of 2013.  The increase reflects higher television and internet advertising partially offset by decreases in magazine advertising and marketing expenses.

Selling and administrative expenses increased by approximately $63,000 or 4.1%, from approximately $1,552,000 during the three months ended September 30, 2013 to approximately $1,615,000 during the same period in 2014.  The increase is attributable to higher payroll expenses, professional fees, insurance premiums, consumer rebates, and depreciation. As a percentage of net sales, selling and administrative expenses increased to 15.5% during the third quarter of 2014 as compared to 14.9% in the third quarter of 2013.

Operating income – As a result of the foregoing, operating income increased by approximately $339,000 or 34.0% to approximately $1,335,000 in the three months ended September 30, 2014 compared to approximately $996,000 during the same period in 2013.

Interest expense, net decreased by approximately $6,000 to approximately $10,000 during the three months ended September 30, 2014, compared to approximately $16,000 during the three months ended September 30, 2013. The decrease reflects the declining outstanding principal on our term loan, as well as interest income on a note (the "BBL Note") issued to us by BBL Distributors, LLC ("BBL") as a result of our payment, during 2013, of amounts BBL would have paid as additional capital contributions to OdorStar Technology LLC (“OdorStar”), to fund certain of OdorStar’s business requirements, had BBL been willing and able to do so. Under the September 16, 2014 agreement by which we acquired BBL's membership interest in OdorStar, we released BBL from its obligations under the BBL Note. See Note 5 to the condensed consolidated financial statements included in this report for further information.

Income taxes - Our income tax expense in the third quarter of 2014 was approximately $426,000, or 32.2% of pretax income, compared to approximately $351,000, or 35.8% of pretax income, during the same period in 2013. We anticipate a lower effective tax rate in 2014 as compared to 2013 because fewer of our 2014 expenses will be nondeductible.   

Net income and Net income attributable to Ocean Bio-Chem, Inc. - As a result of the factors described above, net income for the third quarter of 2014 increased by approximately $270,000, or 42.9%, to approximately $899,000 from approximately $629,000 in the third quarter of 2013.  Net income attributable to Ocean Bio-Chem. Inc. increased by approximately $281,000, or 45.3%, to approximately $903,000 in the third quarter of 2014, from approximately $622,000 during the same period in 2013.  Net income attributable to Ocean Bio-Chem, Inc. does not include a loss of approximately $4,000 and income of approximately $7,000 for the third quarter of 2014 and 2013, respectively, which are attributable to the membership interest BBL formerly held in OdorStar. See Note 5 to the condensed consolidated financial statements included in this report for additional information.

15

Nine Months Ended September 30, 2014 Compared to the Nine Months Ended September 30, 2013

The following table provides a summary of our financial results for the nine months ended September 30, 2014 and 2013:

	For The Nine Months Ended September, 30
					Percent			Percentage of Net Sales
	2014		2013		Change			2014			2013
Net Sales	$	25,165,939	$	24,930,740		0.9	%		100.0	%		100.0	%
Cost of Goods Sold		16,054,342		16,535,366		(2.9	%)		63.8	%		66.3	%
Gross Profit		9,111,597		8,395,374		8.5	%		36.2	%		33.7	%
Advertising and Promotion		1,942,710		2,019,838		(3.8	%)		7.7	%		8.1	%
Selling and Administrative		4,899,713		4,580,519		7.0	%		19.5	%		18.4	%
Operating Income		2,269,174		1,795,017		26.4	%		9.0	%		7.2	%
Interest Expense, net		31,789		51,843		(38.7	%)		0.1	%		0.2	%
Provision for Income Taxes		717,210		622,231		15.3	%		2.8	%		2.5	%
Net Income	$	1,520,175	$	1,120,943		35.6	%		6.0	%		4.5	%
Net Income Attributable to Ocean Bio Chem, Inc.	$	1,537,324	$	1,143,333		34.5	%		6.1	%		4.6	%

Net sales increased by $235,000 or 0.9% to approximately $25,166,000 for the nine months ended September 30, 2014 compared to approximately $24,931,000 during the same period in 2013.  The increase in sales primarily reflects continued growth of StarTron®, our fuel treatment product line, particularly in major hardware retail chains and national automotive aftermarket parts and accessories retail chains.

Cost of goods sold and gross profit – Cost of goods sold decreased by approximately $481,000 or 2.9% to approximately $16,054,000 during the nine months ended September 30, 2014, from approximately $16,535,000 during the same period in 2013, as a result of a more favorable product mix and increased efficiencies at our manufacturing plant.

Gross profit increased by approximately $717,000 or 8.5% to approximately $9,112,000 for the nine months ended September 30, 2014, from approximately $8,395,000 for the same period in 2013. As a percentage of net sales, gross profit increased to approximately 36.2% for the nine months ended September 30, 2014 from 33.7% in the 2013 period, as a result of the factors described above.

Advertising and promotion expenses decreased to approximately $1,943,000 for the nine months ended September 30, 2014 from approximately $2,020,000 during the same period in 2013, a decrease of approximately $77,000 or 3.8%.  As a percentage of net sales, advertising and promotion expense was approximately 7.7% during the nine months ended September 30, 2014 compared to approximately 8.1% in the comparable period of 2013.   The decrease is a result of lower magazine advertising and marketing expenses, partially offset by increased television and internet advertising, customer cooperative advertising expense (which is based on sales to the participating customers), and increased trade show expenses. Full year advertising and promotion expenses are anticipated to be similar to 2013 full year expenses.

Selling and administrative expenses increased by approximately $319,000 or 7.0%, from approximately $4,581,000 during the nine months ended September 30, 2013 to approximately $4,900,000 during the nine months ended September 30, 2014.   The increase is primarily attributable to stock based compensation, administrative and sales salaries, legal fees associated with ongoing patent litigation (see Note 9 to the consolidated financial statements included in this report for further information), insurance, and computer services.  As a percentage of net sales, selling and administrative expenses increased to 19.5% during the nine months ended September 30, 2014 as compared to 18.4% during the nine months ended September 30, 2013.

16

Operating income – As a result of the foregoing, operating income was approximately $2,269,000 for the nine months ended September 30, 2014 compared to approximately $1,795,000 during the same period in 2013, an increase of approximately $474,000 or 26.4%.

Interest expense, net decreased by approximately $20,000 to approximately $32,000 during the nine months ended September 30, 2014, compared to approximately $52,000 during the same period in 2013. The decrease reflects the declining outstanding principal on our term loan and interest income from the BBL Note in 2014. As noted above, we released BBL from its obligations under the BBL Note in connection with our acquisition of BBL's membership interest in OdorStar. See Note 5 to the condensed consolidated financial statements included in this report for additional information.

Income taxes - Our income tax expense for the nine months ended September 30, 2014 is approximately $717,000, or 32.1% of pretax income, compared to approximately $622,000, or 35.7% of pretax income, during the same period in 2013.  We anticipate a lower effective tax rate in 2014 as compared to 2013 because fewer of our 2014 expenses will be nondeductible.  

Net income and Net income attributable to Ocean Bio-Chem, Inc. - As a result of the factors described above, net income for the nine months ended September 30, 2014 increased by approximately $399,000, or 35.6%, to $1,520,000 from approximately $1,121,000 in the nine months ended September 30, 2013.  Net income attributable to Ocean Bio-Chem. Inc. increased by approximately $394,000, or 34.5%, to approximately $1,537,000 for the nine months ended September 30, 2014 from approximately $1,143,000 during the same period in 2013.  Net income attributable to Ocean Bio-Chem, Inc. does not include losses of approximately $17,000 and $22,000 for the nine months ended September 30, 2014 and 2013, respectively, which are attributable to the membership interest BBL formerly held in OdorStar.  See Note 5 to the condensed consolidated financial statements included in this report for additional information.

Liquidity and capital resources:

Our cash balance was approximately $1,828,000 at September 30, 2014 compared to approximately $3,072,000 at December 31, 2013. At September 30, 2014 and December 31, 2013, we had no borrowings under our revolving line of credit.

Net cash provided by operating activities during the nine months ended September 30, 2014 was approximately $291,000 compared to net cash used by operating activities of approximately $266,000 for the nine months ended September 30, 2013.  The increase in cash provided by operating activities reflects an increase in net income of $399,000 and a $213,000 decrease in net working capital usage to $2,195,000 for the nine months ended September 30, 2014 from $2,408,000 for the nine months ended September 30, 2013.

Trade accounts receivable (net of a $93,000 for allowance for doubtful accounts) aggregated approximately $6,154,000 at September 30, 2014, an increase of approximately $1,740,000 or 39.4% compared to net trade accounts receivable of approximately $4,414,000 at December 31, 2013. The increase reflects the seasonality of our business.

Inventories, net increased by approximately $1,426,000 or 19.4% from approximately $7,368,000 at December 31, 2013 to approximately $8,794,000 at September 30, 2014.

Net cash used in investing activities was approximately $826,000 for the nine months ended September 30, 2014 compared to approximately $635,000 for the nine months ended September 30, 2013. The increase in cash used in investing is a result of increased purchases of property, plant, and equipment.  We continue to invest in our manufacturing facilities as we deem appropriate. In addition, during the nine months ended September 30, 2014, we paid $150,000 under the agreement by which we acquired BBL’s membership interest in OdorStar. We also purchased a recreational vehicle and a trailer for use in advertising and exhibiting our products at trade shows and other events, such as fishing competitions.

Net cash used in financing activities was approximately $687,000 for the nine months ended September 30, 2014 compared to net cash provided by financing activities of approximately $75,000 during the nine months ended September 30, 2013. The increase in cash used is a result of our payment of a special cash dividend of $0.05 per share totaling $440,016. In addition, during the nine months ended September 30, 2013 we borrowed $300,000 on our revolving line of credit.

On July 6, 2011, we, together with our subsidiary, Kinpak Inc. (“Kinpak”), entered into a Credit Agreement with Regions Bank (and, pursuant to an Equipment Finance Addendum to the Credit Agreement, Regions Equipment Finance Corporation (“REFCO”)) under which (a) Regions Bank provided a revolving line of credit (which has been replaced by the revolving line of credit described below), and (b)REFCO provided a term loan in the amount of $2,430,000, the proceeds of which were used to pay Kinpak’s remaining lease obligations in connection with the previously outstanding 2002 Series of Industrial Development Revenue Bonds issued by the City of Montgomery, Alabama (the “2002 Bonds”). The 2002 Bonds were used to fund the expansion of Kinpak’s facilities and acquisition of related equipment.

Under the term loan, we pay principal, together with interest at the fixed rate of 3.54% per annum, in 72 consecutive monthly payments of $37,511 over the six year period beginning on August 6, 2011, with the final payment due on July 6, 2017. In the event our debt service coverage ratio (net profit plus taxes, interest, depreciation, amortization and rent expense divided by debt service plus interest and lease/rent expense) falls to or below 2.0 to 1, interest on the term loan will increase by 1.01% per annum. At September 30, 2014, our debt service coverage ratio was approximately 6.5 to 1.

17

On August 4, 2014, we entered into a new Business Loan Agreement with Regions Bank (the "Business Loan Agreement") under which we were provided a new revolving line of credit. Under the revolving line of credit, we may borrow up to the lesser of (i) $6 million and (ii) a borrowing base equal to 80% of eligible accounts receivable (as defined in the Business Loan Agreement) plus 50% of eligible inventory (as defined in the Business Loan Agreement). Interest on the revolving line of credit is payable monthly at the 30 day LIBOR rate plus 1.65% per annum (unless our debt service coverage ratio (generally, net operating profit plus depreciation, amortization and lease/rent expense divided by current maturities of long-term debt plus interest and lease/rent expense, calculated on a trailing twelve month basis) falls to or below 2.0 to 1, in which case in which case the interest is payable at the 30 day LIBOR rate plus 2.65% per annum). Outstanding amounts under the revolving line of credit are payable on demand. If no demand is made, we may repay and reborrow funds from time to time, until expiration of the revolving line of credit on July 6, 2016, at which time all outstanding principal and interest is due and payable.

The Business Loan Agreement contains various covenants, including financial covenants requiring a minimum debt coverage ratio of 1.75 to 1.00, tested on a rolling four-quarter basis, and a maximum debt to capitalization ratio (generally, funded debt divided by the sum of total net worth and funded debt) of 0.75 to 1, tested quarterly. At September 30, 2014, we were in compliance with these covenants.

Our obligations under our borrowings from Regions Bank described above are secured by our accounts receivable, inventory, general intangibles and contract rights, as well as real property and equipment at Kinpak’s Montgomery, Alabama facility.

At September 30, 2014, we had no borrowings under our revolving line of credit. See Notes 6 and 7 to the consolidated financial statements included in this report for further information regarding our loan obligations.

In addition to the revolving line of credit and term loan, we have obtained financing through capital leases for both manufacturing and office equipment, totaling approximately $10,300 and $19,500 at September 30, 2014 and December 31, 2013, respectively.

Our sales in the Canadian market are subject to currency fluctuations relating to the Canadian dollar. We do not engage in currency hedging and address currency risk as a pricing issue. In the nine months ended September 30, 2014, we recorded approximately $6,000 in foreign currency translation adjustments (decreasing shareholders’ equity by $6,000).

During the past few years, we have introduced a number of new products.  At times, new product introductions have required us to increase our overall inventory and have resulted in lower inventory turnover rates.  The effects of reduced inventory turnover have not been material to our overall operations.  We believe that all required capital to maintain such increases will continue to be provided by operations and, if necessary, our revolving line of credit. 

Many of the raw materials that we use in the manufacturing process are petroleum or chemical based and commodity chemicals that are subject to fluctuating prices. The nature of our business does not enable us to pass through the price increases to our national retailers and distributors as promptly as we experience increases in raw material costs. This may, at times, adversely affect our margins.

At September 30, 2014 and through the date of this report, we did not and do not have any material commitments for capital expenditures.

We believe that funds provided through operations and our existing sources of financing will be sufficient to satisfy our cash requirements over at least the next twelve months.

18

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures:

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") at the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures as of the end of the period covered by this report are effective to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Exchange Act are (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and (ii) accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding the disclosure.

Change in Internal Controls over Financial Reporting:

No change in internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1A. – Risk Factors

In addition to the information set forth in this report, you should carefully consider the factors discussed in Part I -Item 1A, "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2013, which could materially affect the Company’s business, financial condition or future results. 

19

Item 6. – Exhibits

Exhibit No.	Description
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act. *
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act. *
32.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350. *
32.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350. *
101	The following materials from Ocean Bio-Chem, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September, 30, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013, (ii) Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2014 and 2013, (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2014 and 2013; (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013 and (v) Notes  to Condensed Consolidated Financial Statements. .

* Filed herewith.

20

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.
Dated: November 14, 2014	/s/ Peter G. Dornau
	Peter G. Dornau
	Chairman of the Board, President and
	Chief Executive Officer
	(Principal Executive Officer)
Dated: November 14, 2014	/s/ Jeffrey S. Barocas
	Jeffrey S. Barocas
	Vice President and
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

21

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Peter G. Dornau certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Ocean Bio-Chem, Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  November 14, 2014	/s/ Peter G. Dornau
	Peter G. Dornau
	Chairman of the Board, President and
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Jeffrey S. Barocas certify that:

1. I have reviewed this quarterly report on Form 10-Q of Ocean Bio-Chem, Inc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  November 14, 2014	/s/ Jeffrey S. Barocas
	Jeffrey S. Barocas
	Vice President
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO RULE 13a-14(b)

UNDER THE SECURITIES EXCHANGE ACT AND 18 U.S.C. 1350

I, Peter G. Dornau, Chief Executive Officer of Ocean Bio-Chem, Inc. (the "Company"), hereby certify that, based on my knowledge:

1. The Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  November 14, 2014	/s/ Peter G. Dornau
	Peter G. Dornau
	Chairman of the Board, President and
	Chief Executive Officer (Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO RULE 13a-14(b)

UNDER THE SECURITIES EXCHANGE ACT AND 18 U.S.C. 1350

I, Jeffrey S. Barocas, Chief Financial Officer of Ocean Bio-Chem, Inc. (the "Company"), hereby certify that, based on my knowledge:

1. The Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  November 14, 2014	/s/ Jeffrey S. Barocas
	Jeffrey S. Barocas
	Vice President
	Chief Financial Officer (Principal Financial and Accounting Officer)

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Related Party Transactions (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Related Party Transactions (Textual)
Sales to the affiliated companies	$ 466,000	$ 397,000	$ 1,474,000	$ 1,337,000
Administrative fees	143,000	83,000	382,000	319,000
Accounts receivable from the affiliated companies	489,597		489,597		536,402
Amount paid to entity for services	10,500	10,500	31,500	31,500
Insurance premiums paid	$ 203,000	$ 72,000	$ 518,000	$ 405,000

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Inventories (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Summary of composition of inventories
Raw materials	$ 3,565,164	$ 3,262,769
Finished goods	5,530,761	4,407,421
Inventories, gross	9,095,925	7,670,190
Inventory reserves	(302,296)	(302,296)
Inventories, net	$ 8,793,629	$ 7,367,894

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Securities Authorized for Issuance under Equity Compensation Plans (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Summary of outstanding options, exercisable options, exercise price, expiration date, weighted average remaining life under company stock option plans
Options Outstanding	140,000
Exercisable Options	140,000
Exercise Price	$ 1.18
Weighted Average Remaining Life	3 years 4 months 24 days
2002NQ One [Member]
Summary of outstanding options, exercisable options, exercise price, expiration date, weighted average remaining life under company stock option plans
Date Granted	Apr. 03, 2006
Options Outstanding	40,000
Exercisable Options	40,000
Exercise Price	$ 1.08
Expiration Date	Apr. 02, 2016
Weighted Average Remaining Life	1 year 6 months
2002NQ Two [Member]
Summary of outstanding options, exercisable options, exercise price, expiration date, weighted average remaining life under company stock option plans
Date Granted	Dec. 17, 2007
Options Outstanding	40,000
Exercisable Options	40,000
Exercise Price	$ 1.32
Expiration Date	Dec. 16, 2017
Weighted Average Remaining Life	3 years 3 months 18 days
2002NQ Three [Member]
Summary of outstanding options, exercisable options, exercise price, expiration date, weighted average remaining life under company stock option plans
Date Granted	Jan. 11, 2009
Options Outstanding	40,000
Exercisable Options	40,000
Exercise Price	$ 0.69
Expiration Date	Jan. 10, 2019
Weighted Average Remaining Life	4 years 3 months 18 days
2002NQ Four [Member]
Summary of outstanding options, exercisable options, exercise price, expiration date, weighted average remaining life under company stock option plans
Date Granted	Apr. 26, 2010
Options Outstanding	20,000
Exercisable Options	20,000
Exercise Price	$ 2.07
Expiration Date	Apr. 25, 2020
Weighted Average Remaining Life	5 years 8 months 12 days

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Inventories

9 Months Ended

Sep. 30, 2014

Inventories [Abstract]

INVENTORIES

3. INVENTORIES

The composition of inventories at September 30, 2014 and December 31, 2013 are as follows:

	September 30,  2014			December 31,  2013
Raw materials	$	3,565,164		$	3,262,769
Finished goods		5,530,761			4,407,421
Inventories, gross		9,095,925			7,670,190
Inventory reserves		(302,296	)		(302,296	)
Inventories, net	$	8,793,629		$	7,367,894

The inventory reserves shown in the table above reflect slow moving and obsolete inventory.

The Company manages an inventory program for one of its customers to improve the promotion of the Company's products. The Company manages the inventory levels at the customer’s warehouses and recognizes revenue as the products are sold by the customer. The inventories managed at the customer’s warehouses amounted to approximately $551,000 and $408,000 at September 30, 2014 and December 31, 2013, respectively, and are included in inventories, net on the balance sheet.

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Revolving Line of Credit (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended
	Aug. 04, 2014
Revolving Line of Credit (Textual)
Term of revolving line of credit	The Company may borrow up to the lesser of (i) $6 million or (ii) a borrowing base equal to 80% of eligible accounts receivable (as defined in the Business Loan Agreement) plus 50% of eligible inventory.
Maximum borrowing capacity of the company	$ 6
Percentage of eligible accounts receivables as part of borrowing base	80.00%
Percentage of eligible inventory as part of the borrowing base	50.00%
Description of interest on the revolving line of credit	30 day LIBOR rate plus 1.65% per annum
Minimum debt service coverage ratio to qualify for LIBOR	2.0 to 1
Alternate interest rate condition if it doesn't satisfy the debt coverage ratio	30 day LIBOR rate plus 2.65% per annum
Due date of outstanding principal and interest borrowed under revolving line of credit	Jul. 06, 2016
Financial covenants under credit agreement	Minimum debt service coverage ratio of 1.75 to 1.00, tested on a trailing twelve month basis, and a maximum debt to capitalization ratio (generally, funded debt divided by the sum of total net worth and funded debt) of 0.75 to 1, tested quarterly.
Debt service coverage ratio	1.75 to 1.00
Debt capitalization ratio	0.75 to 1
Ownership requirement of majority shareholder to prevent default	The line of credit is subject to several events of default, including a decline in the majority shareholder's ownership below 50% of all outstanding shares.

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Odorstar Joint Venture (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Odorstar Joint Venture (Textual)
Operating losses/income	$ 1,335,233	$ 996,454	$ 2,269,174	$ 1,795,017
Cash paid for buyout of joint venture partner			150,000
Amounts due from joint venture partner released as part of acquisition of joint venture partner's interest in OdorStar			305,905
OdorStar [Member]
Odorstar Joint Venture (Textual)
Operating losses/income	$ 8,000	$ 14,000	$ 34,000	$ 45,000

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Long Term Debt (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Summary of long-term debt
Total long term debt, Current Portion	$ 423,384	$ 414,525
Total long term debt, Long Term Portion	798,736	1,117,761
Term loan [Member]
Summary of long-term debt
Total long term debt, Current Portion	413,903	403,074
Total long term debt, Long Term Portion	797,886	1,109,680
Capitalized equipment leases [Member]
Summary of long-term debt
Total long term debt, Current Portion	9,481	11,451
Total long term debt, Long Term Portion	$ 850	$ 8,081

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Long Term Debt (Details 1) (USD $)	Sep. 30, 2014
Summary of principal payments under Company's long term obligations
2015	$ 423,384
2016	429,645
2017	369,091
Total	$ 1,222,120

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2014

Recent Accounting Pronouncements [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

2. RECENT ACCOUNTING PRONOUNCEMENTS

There have been no accounting pronouncements or changes in accounting pronouncements during the nine months ended September 30, 2014 that are expected to have a material impact on the Company’s financial position, results of operations or cash flows. Accounting pronouncements that became effective during the nine months ended September 30, 2014 did not have a material impact on the Company’s financial position, results of operations or cash flows, or on financial statement disclosures made by the Company.

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Long Term Debt (Details Textual) (USD $)	9 Months Ended		9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 REFCO [Member]	Jul. 06, 2011 REFCO [Member]
Long Term Debt (Textual)
Term loan	$ 1,212,000			$ 2,430,000
Interest rate				3.54%
Term loan maturity date			Jul. 06, 2017
Aggregate capital lease	$ 10,331	$ 19,532
Maturity period for capital lease	Through 2015
Interest rates minimum	7.00%
Interest rates maximum	14.00%

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Condensed Consolidated Balance Sheets (USD $)	Sep. 30, 2014	Dec. 31, 2013
Current Assets:
Cash	$ 1,828,433	$ 3,071,887
Trade accounts receivable less allowances of approximately $64,000 and $93,000, respectively	6,153,532	4,413,656
Receivables due from affiliated companies	489,597	536,402
Inventories, net	8,793,629	7,367,894
Prepaid expenses and other current assets	803,757	621,107
Deferred tax asset	67,546	64,665
Total Current Assets	18,136,494	16,075,611
Property, plant and equipment, net	5,220,565	5,116,441
Other Assets:
Trademarks, trade names, royalty rights, and patents, net	1,112,806	920,269
Other assets	6,325	130,803
Total Other Assets	1,119,131	1,051,072
Total Assets	24,476,190	22,243,124
Current Liabilities:
Accounts payable - trade	2,397,419	1,013,829
Current portion of long term debt	423,384	414,525
Income taxes payable	41,098	119,943
Accrued expenses payable	1,091,407	1,067,355
Total Current Liabilities	3,953,308	2,615,652
Deferred tax liability	196,571	237,635
Long term debt, less current portion	798,736	1,117,761
Total Liabilities	4,948,615	3,971,048
Shareholders' Equity:
Common stock - $.01 par value, 12,000,000 shares authorized; 8,914,274 and 8,749,888 shares issued	89,142	87,499
Additional paid in capital	9,131,952	8,805,460
Less cost of common stock in treasury, 0 and 79,941 shares, respectively		(65,029)
Accumulated other comprehensive loss	(272,955)	(266,456)
Retained earnings	10,579,436	9,482,128
Total Shareholders' Equity of Ocean Bio-Chem, Inc.	19,527,575	18,043,602
Noncontrolling interest		228,474
Total Shareholders' Equity	19,527,575	18,272,076
Total Liabilities and Shareholders' Equity	$ 24,476,190	$ 22,243,124

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities:
Net income	$ 1,520,175	$ 1,120,943
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation and amortization	623,653	578,734
Deferred income taxes	(43,945)	(8,727)
Stock based compensation	356,085	318,110
Other operating non-cash items	29,868	132,499
Changes in assets and liabilities:
Trade accounts receivable	(1,838,350)	(4,059,225)
Inventories	(1,425,735)	649,554
Other assets	13,058	3,725
Prepaid expenses and other current assets	(182,650)	(135,127)
Receivables due from affiliated companies	46,805	113,516
Accounts payable and other accrued expenses	1,192,228	1,019,958
Net cash provided by (used in) operating activities	291,192	(266,040)
Cash flows from investing activities:
Purchases of property, plant and equipment	(675,734)	(475,362)
Cash paid for acquisition of joint venture partner's interest in OdorStar	(150,000)
Purchase of royalty rights		(160,000)
Net cash used in investing activities	(825,734)	(635,362)
Cash flows from financing activities:
Net borrowings under revolving line of credit		300,000
Payments on long-term debt	(310,166)	(304,476)
Dividends paid to common shareholders	(440,016)
Proceeds from exercise of stock options	63,250	79,667
Net cash (used in) provided by financing activities	(686,932)	75,191
Effect of exchange rates on cash	(21,980)	(2,680)
Net decrease in cash	(1,243,454)	(828,891)
Cash at beginning of period	3,071,887	1,508,385
Cash at end of period	1,828,433	679,494
Supplemental disclosure of cash flow information:
Cash paid for interest during period	39,571	52,700
Cash paid for income taxes during period	840,000	701,100
Supplemental disclosure of noncash investing information:
Amounts due from joint venture partner released as part of acquisition of joint venture partner's interest in OdorStar	$ 305,905

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Earnings Per Share (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Earnings per common share - Basic
Net income attributable to OBCI	$ 903,093	$ 621,665	$ 1,537,324	$ 1,143,333
Weighted average number of common shares outstanding	8,914,274	8,605,183	8,808,219	8,499,800
Earnings per common share - Basic	$ 0.10	$ 0.07	$ 0.17	$ 0.13
Earnings per common share - Diluted
Net income attributable to OBCI	$ 903,093	$ 621,665	$ 1,537,324	$ 1,143,333
Weighted average number of common shares outstanding	8,914,274	8,605,183	8,808,219	8,499,800
Dilutive effect of employee stock-based awards	86,900	234,061	114,372	270,358
Weighted average number of common shares outstanding - assuming dilution	9,001,174	8,839,244	8,922,591	8,770,158
Earnings per common share - Diluted	$ 0.10	$ 0.07	$ 0.17	$ 0.13

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Summary of computation of basic and diluted earnings per common share

	Three Months Ended  September 30,				Nine Months Ended  September 30,
	2014		2013		2014		2013
Earnings per common share -Basic
Net income attributable to OBCI	$	903,093	$	621,665	$	1,537,324	$	1,143,333
Weighted average number of common shares outstanding		8,914,274		8,605,183		8,808,219		8,499,800
Earnings per common share - Basic	$	0.10	$	0.07	$	0.17	$	0.13
Earnings per common share – Diluted
Net income attributable to OBCI	$	903,093	$	621,665	$	1,537,324	$	1,143,333
Weighted average number of common shares outstanding		8,914,274		8,605,183		8,808,219		8,499,800
Dilutive effect of employee stock-based awards		86,900		234,061		114,372		270,358
Weighted average number of common shares outstanding - assuming dilution		9,001,174		8,839,244		8,922,591		8,770,158
Earnings per common share - Diluted	$	0.10	$	0.07	$	0.17	$	0.13

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Earnings Per Share (Details Textual)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Earnings Per Share (Textual)
Anti-dilutive stock options outstanding

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Summary of Accounting Policies (Details)	Sep. 30, 2014
Summary of Accounting Policies (Textual)
Owned joint venture with OdorStar percentage	50.00%

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Summary of Accounting Policies

9 Months Ended

Sep. 30, 2014

Summary of Accounting Policies [Abstract]

SUMMARY OF ACCOUNTING POLICIES

1. SUMMARY OF ACCOUNTING POLICIES

Interim reporting

The accompanying unaudited condensed consolidated financial statements include the accounts of Ocean Bio-Chem, Inc. and its subsidiaries, all of which are wholly-owned. Prior to September 16, 2014, one of the Company’s subsidiaries, OdorStar Technology, LLC (“OdorStar”), was a joint venture in which the Company had a 50% interest. OdorStar was included in the unaudited condensed consolidated financial statements because the Company had a controlling interest.  All significant intercompany transactions and balances have been eliminated in consolidation.  Certain prior-period data have been reclassified to conform to the current period presentation.  Unless the context indicates otherwise, the term “Company” refers to Ocean Bio-Chem, Inc. and its subsidiaries.

The unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

The financial information furnished herein reflects all adjustments, consisting of normal recurring items that, in the opinion of management, are necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014.

The information included in this Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Trade accounts receivable, allowance for doubtful accounts	$ 93,000	$ 93,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	12,000,000	12,000,000
Common stock, shares issued	8,914,274	8,749,888
Common stock held in treasury, shares	0	79,941

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Securities Authorized for Issuance under Equity Compensation Plans

9 Months Ended

Sep. 30, 2014

Securities Authorized for Issuance under Equity Compensation Plans [Abstract]

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

11. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

During the three months ended September 30, 2014, no stock options were exercised.

During the nine months ended September 30, 2014, stock options to purchase an aggregate of 145,000 shares were exercised. Following the withholding of an aggregate of 14,633 shares in connection with the net exercise feature of the stock options, the Company delivered an aggregate of 130,367 shares to the option holders who exercised their options.

There was no stock compensation expense related to stock awards during the three months ended September 30, 2014 and 2013. Stock compensation expense recognized during the nine months ended September 30, 2014 and 2013 attributable to stock awards totaled approximately $356,000 and $306,000, respectively. Stock compensation expense attributable to stock options was $0 and $3,000 for the three months ended September 30, 2014 and 2013, respectively, and $0 and $12,000 for the nine months ended September 30, 2014 and 2013, respectively.

At September 30, 2014, there was no unrecognized compensation expense related to stock options.

The following table provides information at September 30, 2014 regarding outstanding stock options under the Company’s stock option plans. As used in the table below, “2002 NQ” refers to the Company’s 2002 Non-Qualified Stock Option Plan and “2008 NQ” refers to the Company’s 2008 Non-Qualified Stock Option Plan.

Plan	Date Granted	Options Outstanding		Exercisable Options	Exercise Price		Expiration Date	Weighted Average Remaining Life
2002 NQ	4/03/06		40,000	40,000	$	1.08	4/02/16	1.5
2002 NQ	12/17/07		40,000	40,000	$	1.32	12/16/17	3.3
2008 NQ	1/11/09		40,000	40,000	$	0.69	1/10/19	4.3
2008 NQ	4/26/10		20,000	20,000	$	2.07	4/25/20	5.7
			140,000	140,000	$	1.18		3.4

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Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 13, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	OCEAN BIO CHEM INC
Entity Central Index Key	0000350737
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		8,914,274

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Summary of Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2014

Summary of Accounting Policies [Abstract]

Interim reporting

Interim reporting

The accompanying unaudited condensed consolidated financial statements include the accounts of Ocean Bio-Chem, Inc. and its subsidiaries, all of which are wholly-owned. One of the Company’s wholly-owned subsidiaries, OdorStar Technology, LLC (“OdorStar”), was a 50% owned joint venture prior to September 2014, but was included in the unaudited condensed consolidated financial statements because the Company had a controlling interest. All significant intercompany transactions and balances have been eliminated in consolidation. Certain prior-period data have been reclassified to conform to the current period presentation. Unless the context indicates otherwise, the term “Company” refers to Ocean Bio-Chem, Inc. and its subsidiaries.

The unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

The financial information furnished herein reflects all adjustments, consisting of normal recurring items that, in the opinion of management, are necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014.

The information included in this Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Use of estimates

Use of estimates

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions.

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Condensed Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Statements of Operation [Abstract]
Gross sales	$ 10,934,694	$ 10,878,028	$ 26,342,525	$ 26,058,406
Less: discounts, returns, and allowances	502,249	437,303	1,176,586	1,127,666
Net sales	10,432,445	10,440,725	25,165,939	24,930,740
Cost of goods sold	6,839,296	7,258,766	16,054,342	16,535,366
Gross profit	3,593,149	3,181,959	9,111,597	8,395,374
Operating Expenses:
Advertising and promotion	642,547	633,015	1,942,710	2,019,838
Selling and administrative	1,615,369	1,552,490	4,899,713	4,580,519
Total operating expenses	2,257,916	2,185,505	6,842,423	6,600,357
Operating income	1,335,233	996,454	2,269,174	1,795,017
Other expense
Interest, net (expense)	(10,272)	(16,219)	(31,789)	(51,843)
Income before income taxes	1,324,961	980,235	2,237,385	1,743,174
Provision for income taxes	426,155	351,081	717,210	622,231
Net income	898,806	629,154	1,520,175	1,120,943
Loss (gain) attributable to noncontrolling interests	4,287	(7,489)	17,149	22,390
Net income attributable to Ocean Bio-Chem, Inc.	$ 903,093	$ 621,665	$ 1,537,324	$ 1,143,333
Earnings per common share - basic and diluted	$ 0.1	$ 0.07	$ 0.17	$ 0.13
Dividends declared per common share			$ 0.05

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Revolving Line of Credit

9 Months Ended

Sep. 30, 2014

Revolving Line of Credit and Long Term Debt [Abstract]

REVOLVING LINE OF CREDIT

6. REVOLVING LINE OF CREDIT

On August 4, 2014, Ocean Bio-Chem, Inc. (the “Company”) and Regions Bank entered into a new Business Loan Agreement (the “Business Loan Agreement”), under which the Company was provided a renewed revolving line of credit. Under the renewed revolving line of credit, the Company may borrow up to the lesser of (i) $6 million or (ii) a borrowing base equal to 80% of eligible accounts receivable (as defined in the Business Loan Agreement) plus 50% of eligible inventory (as defined in the Business Loan Agreement). Interest on amounts borrowed under the revolving line of credit is payable monthly at the 30 day LIBOR rate plus 1.65% per annum (unless the Company’s debt service coverage ratio (generally, net operating profit plus depreciation, amortization and lease/rent expense divided by current maturities of long-term debt plus interest and lease/rent expense, calculated on a trailing twelve month basis) falls to or below 2.0 to 1, in which case interest is payable at the 30 day LIBOR rate plus 2.65% per annum).

Outstanding amounts under the revolving line of credit are payable on demand.  If no demand is made, the Company may repay and reborrow funds from time to time until expiration of the revolving line of credit on July 6, 2016, at which time all outstanding principal and interest will be due and payable. The Company’s obligations under the revolving line of credit are secured by among other things, the Company’s accounts receivable, inventory, contract rights and general intangibles and, as a result of cross-collateralization of the Company’s obligations under the term loan described in Note 7 and the revolving line of credit, real property and equipment at the Montgomery, Alabama facility of the Company’s subsidiary, Kinpak, Inc. ("Kinpak").   The Business Loan Agreement includes financial covenants requiring a minimum debt service coverage ratio of 1.75 to 1.00, tested on a trailing twelve month basis, and a maximum debt to capitalization ratio (generally, funded debt divided by the sum of total net worth and funded debt) of 0.75 to 1, tested quarterly.  The line of credit is subject to several events of default, including a decline in the majority shareholder’s ownership below 50% of all outstanding shares. At September 30, 2014, the Company was in compliance with these covenants. At September 30, 2014 and December 31, 2013, the Company had no borrowings under the revolving line of credit.

The revolving line of credit replaces an earlier line of credit issued under a Credit Agreement that the Company, together with Kinpak, entered into with Regions Bank and Regions Equipment Finance Corporation ("REFCO") on July 6, 2011 (the "Credit Agreement"). The terms of the revolving line of credit under the Credit Agreement were similar to the terms of the revolving line of credit under the Business Loan Agreement.

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Odorstar Joint Venture

9 Months Ended

Sep. 30, 2014

Odorstar Joint Venture [Abstract]

ODORSTAR JOINT VENTURE

5. ODORSTAR JOINT VENTURE

In 2010, the Company and BBL Distributors, LLC (“BBL”) organized OdorStar. OdorStar owns patents relating to a device for producing chlorine dioxide, which, among other things, can be used in products designed to safely prevent and eliminate odors relating to mold, mildew and other sources of unpleasant odors. Disinfectant products incorporating the device are manufactured and marketed under the Performacide^® brand name.

OdorStar operated as a joint venture until September 16, 2014, when the Company acquired BBL’s membership interest, at which time OdorStar became a wholly-owned subsidiary of the Company. In connection with the Company’s acquisition in OdorStar, BBL and its affiliates released any rights they may have to the Performacide^® trade name. The Company paid BBL $150,000 and released BBL from indebtedness of $305,905 claimed by the Company.

Prior to the acquisition, the Company and BBL shared equally in profits or losses from OdorStar. The Company’s consolidated statements of operations include OdorStar’s operating loss of approximately $8,000 and operating income of $14,000 during the three months ended September 30, 2014 and 2013, respectively, and operating losses of approximately $34,000 and $45,000 during the nine months ended September 30, 2014 and 2013, respectively.

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Securities Authorized for Issuance under Equity Compensation Plans (Tables)

9 Months Ended

Sep. 30, 2014

Securities Authorized for Issuance under Equity Compensation Plans [Abstract]

Schedule of outstanding stock options under Company's stock option plans

Plan	Date Granted	Options Outstanding		Exercisable Options	Exercise Price		Expiration Date	Weighted Average Remaining Life
2002 NQ	4/03/06		40,000	40,000	$	1.08	4/02/16	1.5
2002 NQ	12/17/07		40,000	40,000	$	1.32	12/16/17	3.3
2008 NQ	1/11/09		40,000	40,000	$	0.69	1/10/19	4.3
2008 NQ	4/26/10		20,000	20,000	$	2.07	4/25/20	5.7
			140,000	140,000	$	1.18		3.4

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Inventories (Tables)

9 Months Ended

Sep. 30, 2014

Inventories [Abstract]

Summary of composition of inventories

	September 30,  2014			December 31,  2013
Raw materials	$	3,565,164		$	3,262,769
Finished goods		5,530,761			4,407,421
Inventories, gross		9,095,925			7,670,190
Inventory reserves		(302,296	)		(302,296	)
Inventories, net	$	8,793,629		$	7,367,894

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

9. COMMITMENTS AND CONTINGENCIES

The Company leases its executive offices and warehouse facilities in Fort Lauderdale, Florida from an entity controlled by its Chairman, President and Chief Executive Officer. On May 16, 2013, the term of the lease, which was scheduled to expire on May 1, 2018, was extended through December 31, 2023. The lease requires annual minimum base rent of $94,800 and provides for a maximum annual 2% increase in subsequent years, although the entity has not raised the minimum rent since the Company entered into a previous lease agreement in 1998. Additionally, the leasing entity is entitled to reimbursement of all taxes, assessments, and any other expenses that arise from ownership. Each of the parties to the lease has agreed to review the terms of the lease every three years at the request of the other party. Rent expense under the lease was approximately $24,000 for each of the three month periods ended September 30, 2014 and 2013, and was approximately $73,000 for each of the nine month periods ended September 30, 2014 and 2013, respectively.

On November 25, 2013, OdorStar and Kinpak filed a Second Amended Complaint in the United States District Court for the Southern District of Florida, alleging patent infringement by SSM Distributors LLC, d/b/a Biocide Systems, and SSM Manufacturing, Inc. SMM Distributors LLC is now defunct. The Second Amended Complaint, which amended a complaint initially filed on January 18, 2013, alleges that Biocide manufactured, used, sold and continues to sell an odor-eliminating product that infringes OdorStar's U.S. Patent No. 6,764,661 (“the ‘661 patent”), relating to a device for producing chlorine dioxide. Biocide denied infringement and both sides moved for summary judgment. On January 27, 2014, the District Court granted the defendants' motion for summary judgment of non-infringement and denied the plaintiffs' motion.

OdorStar and Kinpak have appealed the judgment to the United States Court of Appeals for the Eleventh Circuit. Specifically, OdorStar and Kinpak contend that the district court erred in construing the claims of the ‘661 patent and in entering summary judgment of non-infringement based on an incorrect claim construction. The appeal is pending.

On March 27, 2014, the defendants filed a motion with the District Court seeking payment by OdorStar and Kinpak of their attorneys’ fees and non-taxable costs in the amount of $259,550, based on, among other things, the defendants’ contention that the plaintiffs' patent infringement claims were vexatious and intended to intimidate the defendants into withdrawing from competition with the plaintiffs. OdorStar and Kinpak filed an opposition to the motion, essentially denying the defendants' contentions and stating that defendants were not entitled to payment of their attorneys’ fees under applicable legal standards. The District Court has not yet ruled on the motion.

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Long Term Debt

9 Months Ended

Sep. 30, 2014

Revolving Line of Credit and Long Term Debt [Abstract]

LONG TERM DEBT

7. LONG TERM DEBT

On July 6, 2011, under the Equipment Finance Addendum to the Credit Agreement, REFCO provided to the Company a $2,430,000 term loan with a fixed interest rate of 3.54%.  Principal and interest on the term loan are payable in equal monthly installments through July 6, 2017, the date on which the term loan matures.  The proceeds of the term loan were used to pay the Company’s remaining obligations under a lease agreement relating to industrial revenue bonds used to fund the expansion of Kinpak’s facilities and acquisition of related equipment.  At September 30, 2014, approximately $1,212,000 was outstanding under the term loan. The term loan and the revolving line of credit under the Business Loan Agreement described in Note 6 are cross-defaulted (i.e., a default under one instrument will be deemed a default under the other).

At September 30, 2014 and December 31, 2013, the Company was obligated under various capital lease agreements covering equipment utilized in the Company’s operations. The capital leases, aggregating $10,331 and $19,532 at September 30, 2014 and December 31, 2013, respectively, have varying maturities through 2015 and carry interest rates ranging from 7% to 14%.

The following table provides information regarding the Company’s long term debt at September 30, 2014 and December 31, 2013:

	Current Portion				Long Term Portion
	September 30,  2014		December 31,  2013		September 30,  2014		December 31,  2013
Term loan	$	413,903	$	403,074	$	797,886	$	1,109,680
Capitalized equipment leases		9,481		11,451		850		8,081
Total long term debt	$	423,384	$	414,525	$	798,736	$	1,117,761

Required principal payments under the Company’s long term obligations are set forth below:

12 month period ending September 30,
2015	$	423,384
2016		429,645
2017		369,091
Total	$	1,222,120

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Related Party Transactions

9 Months Ended

Sep. 30, 2014

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

8. RELATED PARTY TRANSACTIONS

During the three and nine months ended September 30, 2014 and 2013, the Company sold products to companies affiliated with its Chairman, President and Chief Executive Officer. The affiliated companies distribute the products outside of the United States and Canada. The Company also provides administrative services to these companies. Sales to the affiliated companies aggregated approximately $466,000 and $397,000 during the three months ended September 30, 2014 and 2013, respectively, and approximately $1,474,000 and $1,337,000 for the nine months ended September 30, 2014 and 2013, respectively. Administrative fees aggregated approximately $143,000 and $83,000 during the three months ended September 30, 2014 and 2013, respectively, and approximately $382,000 and $319,000 for the nine months ended September 30, 2014 and 2013, respectively. The Company had accounts receivable from the affiliated companies in connection with the product sales and administrative services aggregating approximately $490,000 and $536,000 at September 30, 2014 and December 31, 2013, respectively. Transactions with the affiliated companies were made in the ordinary course of business. While the terms of sale to the affiliated companies differed from the terms applicable to other customers, the affiliated companies bear their own warehousing, distribution, advertising, selling and marketing costs, as well as their own freight charges (the Company pays freight charges in connection with sales to its domestic customers on all but small orders). Moreover, the Company does not pay sales commissions with respect to products sold to the affiliated companies. As a result, the Company believes its profit margins with respect to sales to the affiliated companies are similar to the profit margins with respect to sales to its larger domestic customers. Management believes that the sales transactions did not involve more than normal credit risk or present other unfavorable features.

A subsidiary of the Company currently uses the services of an entity that is owned by its Chairman, President and Chief Executive Officer to conduct product research and development, marketing and advertising. Under this arrangement, the Company paid the entity approximately $10,500 for each of the three month periods ended September 30, 2014 and 2013, and $31,500 for each of the nine month periods ended September 30, 2014 and 2013.

The Company leases office and warehouse facilities in Fort Lauderdale, Florida from an entity controlled by its Chairman, President and Chief Executive Officer. The Company believes that the rental payments are below market rates. See Note 9 for a description of the lease terms.

A director of the Company is Regional Executive Vice President of an entity from which the Company sources most of its insurance needs at an arm’s length competitive basis. During the three months ended September 30, 2014 and 2013, the Company paid an aggregate of approximately $203,000 and $72,000, respectively, and during the nine months ended September 30, 2014 and 2013, the Company paid an aggregate of approximately $518,000 and $405,000, respectively, in insurance premiums on policies obtained through the entity.

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Earnings Per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

EARNINGS PER SHARE

10. EARNINGS PER SHARE

Basic earnings per share is calculated based on net income attributable to Ocean Bio-Chem, Inc. and the weighted average number of shares outstanding during the reported period. Diluted earnings per share reflect additional dilution from potential common stock issuable upon the exercise of outstanding stock options. The following table sets forth the computation of basic and diluted earnings per common share, as well as a reconciliation of the weighted average number of common shares outstanding to the weighted average number of shares outstanding on a diluted basis.

	Three Months Ended  September 30,				Nine Months Ended  September 30,
	2014		2013		2014		2013
Earnings per common share -Basic
Net income attributable to OBCI	$	903,093	$	621,665	$	1,537,324	$	1,143,333
Weighted average number of common shares outstanding		8,914,274		8,605,183		8,808,219		8,499,800
Earnings per common share - Basic	$	0.10	$	0.07	$	0.17	$	0.13
Earnings per common share – Diluted
Net income attributable to OBCI	$	903,093	$	621,665	$	1,537,324	$	1,143,333
Weighted average number of common shares outstanding		8,914,274		8,605,183		8,808,219		8,499,800
Dilutive effect of employee stock-based awards		86,900		234,061		114,372		270,358
Weighted average number of common shares outstanding - assuming dilution		9,001,174		8,839,244		8,922,591		8,770,158
Earnings per common share - Diluted	$	0.10	$	0.07	$	0.17	$	0.13

The Company had no stock options outstanding for each of the three and nine month periods ended September 30, 2014 and 2013, respectively, that were anti-dilutive and therefore not included in the diluted earnings per common share calculation.

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Commitments and Contingencies (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Commitments (Textual)
Attorneys' fees and non-taxable costs			$ 259,550
Fort Lauderdale Florida Facility [Member]
Commitments (Textual)
Scheduled expiration date of lease			May 01, 2018
Extended date of lease			Dec. 31, 2023
Minimum base rent			94,800
Maximum percentage increase in base rent			2.00%
Period to review term of lease			3 years
Rent expense under the lease	$ 24,000	$ 24,000	$ 73,000	$ 73,000

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Long Term Debt (Tables)

9 Months Ended

Sep. 30, 2014

Revolving Line of Credit and Long Term Debt [Abstract]

Summary of company's long term debt

	Current Portion				Long Term Portion
	September 30, 2014		December 31, 2013		September 30, 2014		December 31, 2013
Term loan	$	413,903	$	403,074	$	797,886	$	1,109,680
Capitalized equipment leases		9,481		11,451		850		8,081
Total long term debt	$	423,384	$	414,525	$	798,736	$	1,117,761

Summary of principal payments under Company's long term obligations

12 month period ending September 30,
2015	$	423,384
2016		429,645
2017		369,091
Total	$	1,222,120

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Inventories (Details Textual) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Inventories (Textual)
Inventories managed at the customer's warehouses	$ 551,000	$ 408,000

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Statements of Comprehensive Income [Abstract]
Net Income	$ 898,806	$ 629,154	$ 1,520,175	$ 1,120,943
Other comprehensive (loss) income:
Foreign currency translation adjustment	(10,292)	3,438	(6,499)	(3,175)
Comprehensive income	888,514	632,592	1,513,676	1,117,768
Comprehensive loss (gain) attributable to noncontrolling interests	4,287	(7,489)	17,149	22,390
Comprehensive income attributable to Ocean Bio-Chem, Inc.	$ 892,801	$ 625,103	$ 1,530,825	$ 1,140,158

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Property, Plant, & Equipment

9 Months Ended

Sep. 30, 2014

Property, Plant, & Equipment [Abstract]

PROPERTY, PLANT, & EQUIPMENT

4. PROPERTY, PLANT, & EQUIPMENT

The Company’s property, plant and equipment consisted of the following at September 30, 2014 and December 31, 2013:

	Estimate  Useful  Life	September 30,  2014			December 31,  2013
Land		$	278,325		$	278,325
Building and improvements	30 years		4,648,089			4,632,565
Manufacturing and warehouse equipment	6-20 years		8,440,289			8,160,173
Office equipment and furniture	3-5 years		1,013,327			830,950
Construction in process			72,419			19,604
Leasehold improvements	10-15 years		428,214			419,315
Vehicles	3 years		128,830			32,263
Property, plant and equipment, gross			15,009,493			14,373,195
Less accumulated depreciation			(9,788,928	)		(9,256,754	)
Property, plant and equipment, net		$	5,220,565		$	5,116,441

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Property, Plant, & Equipment (Details) (USD $)			9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Building and improvements [Member]	Sep. 30, 2014 Manufacturing and warehouse equipment [Member] Maximum [Member]	Sep. 30, 2014 Manufacturing and warehouse equipment [Member] Minimum [Member]	Sep. 30, 2014 Office equipment and furniture [Member] Maximum [Member]	Sep. 30, 2014 Office equipment and furniture [Member] Minimum [Member]	Sep. 30, 2014 Leasehold improvements [Member] Maximum [Member]	Sep. 30, 2014 Leasehold improvements [Member] Minimum [Member]	Sep. 30, 2014 Vehicles [Member]
Summary of property, plant and equipment
Land	$ 278,325	$ 278,325
Building and improvements	4,648,089	4,632,565
Manufacturing and warehouse equipment	8,440,289	8,160,173
Office equipment and furniture	1,013,327	830,950
Construction in process	72,419	19,604
Leasehold improvements	428,214	419,315
Vehicles	128,830	32,263
Property, plant and equipment, gross	15,009,493	14,373,195
Less accumulated depreciation	(9,788,928)	(9,256,754)
Property, plant and equipment, net	$ 5,220,565	$ 5,116,441
Estimated Useful Life			30 years	20 years	6 years	5 years	3 years	15 years	10 years	3 years

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Securities Authorized for Issuance under Equity Compensation Plans (Details Textual) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Securities Authorized for Issuance under Equity Compensation Plans (Textual)
Stock options exercised			145,000
Number of shares withhold in connection with net exercise feature of options			14,633
Shares issued to option holders			130,367
Stock compensation expense attributable to stock awards			$ 356,000	$ 306,000
Unrecognized compensation expense related to stock options awarded to employees
Stock option [Member]
Securities Authorized for Issuance under Equity Compensation Plans (Textual)
Stock compensation expense attributable to stock awards	$ 0	$ 3,000	$ 0	$ 12,000

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Property, Plant, & Equipment (Tables)

9 Months Ended

Sep. 30, 2014

Property, Plant, & Equipment [Abstract]

Summary of property, plant and equipment

	Estimate  Useful  Life	September 30,  2014			December 31,  2013
Land		$	278,325		$	278,325
Building and improvements	30 years		4,648,089			4,632,565
Manufacturing and warehouse equipment	6-20 years		8,440,289			8,160,173
Office equipment and furniture	3-5 years		1,013,327			830,950
Construction in process			72,419			19,604
Leasehold improvements	10-15 years		428,214			419,315
Vehicles	3 years		128,830			32,263
Property, plant and equipment, gross			15,009,493			14,373,195
Less accumulated depreciation			(9,788,928	)		(9,256,754	)
Property, plant and equipment, net		$	5,220,565		$	5,116,441