Ocean Bio-Chem, Inc. Reports Record Third Quarter and Nine Month Financial Results for 2020
– Third-quarter 2020 – Net Income up 315% to $4.7 million or $0.49 per share
– Nine Months 2020 – Net Income up 207% to $8.7 million or $0.92 per share
FORT LAUDERDALE, Fla., Nov. 16, 2020 /PRNewswire/ — Ocean Bio-Chem, Inc. (NASDAQ: OBCI) announced today record net income for both the third-quarter and the first nine months of 2020.
For the three months ended September 30, 2020, record net income was approximately $4.7 million compared to net income of approximately $1.1 million for the three months ended September 30, 2019, an increase of approximately $3.5 million or 315%. Earnings per share for the three months ended September 30, 2020, was $0.49 per share compared to $0.12 per share for the same period in 2019, an increase of 312%.
For the nine months ended September 30, 2020, net income was approximately $8.7 million compared to net income of approximately $2.9 million for the first nine months of 2019, an increase of approximately $5.9 million or 207%. Earnings per share for the nine months ended September 30, 2020, was $0.92 compared to $0.30 for the same period in 2019, an increase of 204%.
For the three months ended September 30, 2020, net sales were approximately $19.2 million compared to net sales of approximately $12.5 million for the three months ended September 30, 2019, an increase of approximately $6.7 million or 53%.
For the nine months ended September 30, 2020, net sales were approximately $42.7 million, compared to net sales of approximately $32.5 million for the same period of 2019, an increase of approximately $10.2 million or 31%.
Ocean Bio-Chem, Inc. President and CEO Peter Dornau commented, “I am extremely pleased with the financial results from both the third quarter and the nine months of 2020. Our third quarter net income of approximately $4.7 million surpassed our full year 2019 net income of approximately $3.5 million. The 2019 net income was also a record breaker. The 2020 third quarter results also represent the highest quarterly income in company history, which is driven by record net sales of $19.2 million for the quarter.”
Mr. Dornau continued, “The significant increase in sales volume had a positive effect on both gross profit percent and gross profit dollars as our fixed manufacturing costs remained relatively constant. Third quarter gross profit percent increased from 35.2% in 2019 to 45.7% in 2020, with gross profit dollars increasing approximately 99% over 2019 results.
The key to our long-term success is our plant and our people. As a vertical manufacturer, we rely less on outside vendors and can therefore pivot our production as the markets change. We have invested heavily in equipment and upgrades and expansions at our production and distribution facility to prepare for such growth. But it’s our dedicated employees that are making the smart moves and putting in the hard work to best use our resources.
As new, record net sales quarters are reported, we are highly satisfied to see that this durable building strategy is twofold: not only have we built a flexible manufacturing and distribution platform capable of supporting these record sales numbers, but also the organization to see it through. This flexibility equals a profitability that, in turn, pays for itself.
This reliable growth strategy helped fuel our continued success in this turbulent year of 2020. While many industries and competitors struggled to meet increased demands on volume and logistical challenges brought on by COVID-19, shelter-in-place orders, hurricanes, wildfires, etc., we were able to increase production and ship record amounts of products. These sales increases were broad based, as we saw increases in almost every channel of business we serve.
Our core markets of Marine, RV and Outdoor saw an excited increase of new consumers entering the market looking for ways to safely social distance. New and used boat and RV sales have outpaced several years previous, and our brands were there to capture many of these new consumers as we had product on the shelves, whereas our competition did not.
We also saw sizeable increases in the hardware/homecare markets as many consumers during lockdown dedicated time to home maintenance projects, such as teak furniture restoration, deck cleaning, mold and mildew removal, and outdoor fabric care.
Star Tron®, our enzyme-based fuel treatment, received strong sales from both ends of the spectrum: an increase in stored vehicles, as well as more Americans embarking on road trips instead of flying.
Lastly, our PERFORMACIDE® division of air care, deodorizing, sanitizing and disinfectant products also realized strong gains in the market. We were hit with more PERFORMACIDE® orders than we could produce at the beginning of the pandemic, which lead to a two-part plan. First, we decided which sales opportunities would provide the best long-term success for the brand—picking select partners who fit with the benefits of our unique product line and are poised to take advantage of its many uses beyond the pandemic. And second, we increased production lines to keep up with the demand for these partners.”
In closing Mr. Dornau states, “Your company was built to react fast to changing markets and take advantage of new opportunities while also providing best-in-class products, logistics and customer service to our existing customers. This, combined with strong financials and a great team, prepares us for continued success in 2021 regardless of challenges to come.”
Jeffrey Barocas, Chief Financial Officer of the Company, commented, “The financial position of the Company is strong. On September 30, 2020, the Company had approximately $7.3 million in cash (including $6.6 million in unrestricted cash and $.7 million restricted to use in connection with the expansion of our Montgomery, Alabama facilities), and net accounts receivable of approximately $16.3 million. As of September 30, 2020, the Company had a current ratio of approximately 5.5 to 1.
The Board of Directors will be evaluating an increase in the Company’s regular quarterly dividend or the declaration of a special cash dividend to our valued shareholders.”
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®, Performacide®, Outdoor Collection 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 Star brite® and Performacide® brand names and private labeled products.
The Company’s web sites are: www.oceanbiochem.com; www.starbrite.com; www.startron.com; and www.performacide.com
Certain statements contained in this press release, including without limitation, 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 “optimistic”, “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, sanitizing/deodorizing /disinfectant and automotive products; advertising and promotional efforts; utilization of our manufacturing facilities. unanticipated litigation developments; adverse weather conditions; 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 addressed in Part I, Item 1A (“Risk Factors”) in our annual report on Form 10-K for the year ended December 31, 2019. The Company does not intend and assumes no obligation, to update any forward-looking statements made in this press release. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this press release.
SOURCE Ocean Bio-Chem, Inc.