Ocean Bio-Chem, Inc. Reports 2018 Full Year and Fourth Quarter Net Income and Net Sales
2018 Record Net Income of $2.8 Million – 7.4% increase over 2017
2018 Record Net Sales of $41.8 Million – 10.2% increase over 2017
FORT LAUDERDALE, Fla., March 29, 2019 /PRNewswire/ — Ocean Bio-Chem, Inc. (NASDAQ: OBCI) announced its full year and fourth quarter 2018 financial results.
The Company’s 2018 net income was approximately $2.8 million, compared to 2017 net income of $2.6 million, an increase of approximately $0.2 million or 7.4%. Earnings per share for 2018 were $0.30 compared to $0.28 for 2017, an increase of 7.1%.
The Company also reported record 2018 net sales of approximately $41.8 million, compared to approximately $37.9 million for 2017, an increase of approximately $3.9 million or 10.2%.
Fourth quarter 2018 net sales were approximately $8.835 million, compared to fourth quarter 2017 net sales of approximately $8.763 million, an increase of approximately $72,000 or 1.0%. Fourth quarter 2018 net loss was approximately $122,000 compared to income of approximately $293,000 in 2017, a decrease of approximately $415,000. The fourth quarter performance reflected lower gross margins due to higher operating costs at the Company’s Kinpak manufacturing and distribution facility in Montgomery, Alabama, partially offset by lower advertising and promotion expenses and selling and administrative expenses. Fourth quarter 2018 net loss per share was $(0.01)compared to fourth quarter 2017 net income per share of $0.03.
Peter Dornau, President and CEO commented: “The Company’s 2018 net sales marked the sixth consecutive year in which the Company achieved record annual net sales. Once again, our Star brite® branded and private label marine products led the way. We experienced increased sales of our marine products throughout our distribution channels, including marine specialty retailers, mass merchandisers and online retailers. Moreover, sports specialty retailers became an emerging market for our marine products in 2018.”
Mr. Dornau continued: “The Company also experienced continued sales growth of its Star Tron® enzyme fuel treatment products through a major mass merchandiser, reflecting expanded product placement within its stores. In addition, sales of our disinfectant group products, including our chlorine dioxide-based deodorizers, disinfectants and sanitizers, continued to increase. Among the contributors to this increase were sales of our Auto Odor Eliminator to a national automotive retail chain of approximately 5,000 stores, sales to a distributor of private label disinfectant and sanitizer products directed both to the agriculture/cultivation and home/commercial restoration markets, and sales directed to the pet care market. In 2018, we commenced sales of our Performacide® disinfectant/deodorizer to Chewy.com, the largest online retailer specializing in pet products. We also sold Performacide® products to a national pet retailer, for use in disinfecting their kennels and examination rooms.”
Mr. Dornau continued: “In the fourth quarter of 2018, our Kinpak manufacturing and distribution facilities incurred increased operating costs as a result of several factors, including higher payroll and related costs, reflecting employee overtime compensation incurred to meet customer demand, as well as higher operating costs in connection with the expansion of the Kinpak facilities. A key management objective for 2019 is to reduce operating costs at these facilities. The full year net income reflects an approximately $0.2 million reduction in the provision for income taxes primarily resulting from federal tax legislation enacted in 2017.”
Mr. Dornau continued: “We believe that our continued sales growth in 2018 is, to a considerable extent, attributable to our increased expenditures on internet, magazine and television advertising. We intend to continue to focus on advertising efforts in 2019. Among other things, we intend to introduce an advertising campaign directed to the recreational vehicle market. We also will continue to use advertising to support our core products, including through use of increased consumer education advertising, as well as “‘how-to’ videos on YouTube.”
Mr. Dornau concluded: “I am pleased to report that our expanded Kinpak manufacturing and distribution facilities became fully operational in 2018. We are in the process of completing an additional bottle filling line at the facility, which should increase the efficiency of our bottle filling operations, and we will continue to evaluate our capital equipment needs with a focus on reducing product costs. Finally, in anticipation of our expectation that the Company will continue to generate strong sales in 2019, we have increased inventory levels to reduce the interval between customer orders and shipment.”
As recently announced, the Company has declared a special cash dividend of $0.05 per share, payable on April 19, 2019to common shareholders of record on April 5, 2019.
**Full year and Fourth Quarter 2017 financial information in this release has been retroactively adjusted to reflect the change in accounting for revenue from contracts with customers under Financial Accounting Standards Board Update (“ASU”) 2014-09, “Revenue from Contracts with Customers” (Topic 606). The Company adopted ASU 2014-09 on January 1, 2018.)
About Ocean Bio-Chem, Inc.:
Ocean Bio-Chem, Inc. manufactures, markets and distributes a broad line of appearance and maintenance products for the marine, automotive, power sports, recreational vehicle and outdoor power equipment markets under the Star brite®, Star Tron®, Odor Star® and other brand names within the United States of America and Canada. In addition, the Company produces private label formulations of many of its products for various customers and provides custom blending and packaging services for these and other products. The Company also manufactures, markets and distributes a line of disinfectant, sanitizing and deodorizing products under the Performacide® and Star brite® brand names.
Certain statements contained in this Press Release constitute forward-looking statements, including, without limitation, continued focus on advertising efforts and types of advertising to be employed in 2019, increased efficiencies resulting from completion of a third bottle filling line at Kinpak’s facilities and the expectation that the Company will continue to generate strong sales in 2019. For this purpose, any statements contained in this report that are not statements of historical fact may be deemed to be 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; ineffectiveness of our advertising and promotional efforts; changes in marketing strategies; unanticipated delays in, or failure to realize expected efficiencies as a result of, completion of the third bottle filling line at our manufacturing and distribution facilities in Montgomery, Alabama; unanticipated litigation developments; exposure to market risks relating to changes in interest rates and foreign exchange rates; prices for raw materials that are petroleum or chemical based and other factors addressed in our annual report on Form 10-K for the year ended December 31, 2018.
CEO and President
Vice President & CFO
SOURCE Ocean Bio-Chem, Inc.