Ocean BioChem Inc. (OBCI, Financial) filed Quarterly Report for the period ended 2012-06-30.
Ocean Bio-chem, Inc. has a market cap of $16.9 million; its shares were traded at around $1.88 with a P/E ratio of 8.3 and P/S ratio of 0.5.
Selling and administrative expenses decreased by approximately $70,000 or 4.2%, from approximately $1,674,000 during the three months ended June 30, 2011 to approximately $1,604,000 during the same period in 2012. The decrease is due to lower stock-based compensation expense and lower variable sales commissions. As a percentage of net sales, selling and administrative expenses were 20.3% and 20.4% for the second quarter of 2012 and 2011, respectively.
Advertising and promotion increased to approximately $1,107,000 for the six months ended June 30, 2012 from $1,030,000 during the corresponding period in 2011, an increase of approximately $77,000 or 7.5%. As a percentage of net sales, advertising and promotion expense increased from 6.9% in the first six months of 2011 to 8.0% in the first six months of 2012. The increase is primarily due to increased television advertising. We anticipate that advertising and promotion expenses during the last six months of 2012 will be at approximately the same expense levels as they were in the second half of 2011.
Selling and administrative expenses decreased by approximately $117,000 or 4.2%, from approximately $2,776,000 during the six months ended June 30, 2011 to approximately $2,659,000 during the same period in 2012. The decrease is due to decreased stock-based compensation and lower variable sales commissions. As a percentage of net sales, selling and administrative expenses increased from 18.6% to 19.2%.
Under our credit agreement with Regions Bank (and, pursuant to an Equipment Finance Addendum to the Credit Agreement, Regions Equipment Finance Corporation (“REFCO”)), we have borrowings under a term loan, which is payable, together with interest at the fixed rate of 3.54% per annum, in 72 consecutive monthly payments of $37,511, with the final payment on July 6, 2017. At June 30, 2012, the remaining principal balance on the term loan was $2,091,270. In addition, the credit agreement provides for a revolving line of credit, under which we may borrow up to the lesser of (i) $6 million and (ii) a borrowing base equal to 80% of eligible accounts receivable plus 50% of eligible inventory. Interest on the revolving line of credit is payable at the 30 day LIBOR rate plus 1.74% per annum (unless 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 below 2.0 to 1, in which case interest will be payable at the 30 day LIBOR rate plus 2.75% per annum). In no event will the interest rate be less than 2.0% 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. Interest on amounts borrowed under the revolving line of credit is payable in monthly installments on outstanding average balances, with all outstanding principal and interest payable on July 6, 2014. At June 30, 2012, the outstanding balance under the revolving line of credit was $400,000.
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Ocean Bio-chem, Inc. has a market cap of $16.9 million; its shares were traded at around $1.88 with a P/E ratio of 8.3 and P/S ratio of 0.5.
Highlight of Business Operations:
Advertising and promotion expense decreased to approximately $641,000 for the three months ended June 30, 2012 from $656,000 during the corresponding period in 2011, a decrease of approximately $15,000 or 2.4%. As a percentage of net sales, advertising and promotion expense was approximately 8.1% in the second quarter of 2012 compared to approximately 8.0% in the second quarter of 2011. Although advertising was at approximately the same expense levels as the prior year, television advertising increased while newspaper and radio advertising decreased. We anticipate that advertising and promotion expenses during the last six months of 2012 will be at approximately the same expense levels as they were in the second half of 2011.Selling and administrative expenses decreased by approximately $70,000 or 4.2%, from approximately $1,674,000 during the three months ended June 30, 2011 to approximately $1,604,000 during the same period in 2012. The decrease is due to lower stock-based compensation expense and lower variable sales commissions. As a percentage of net sales, selling and administrative expenses were 20.3% and 20.4% for the second quarter of 2012 and 2011, respectively.
Advertising and promotion increased to approximately $1,107,000 for the six months ended June 30, 2012 from $1,030,000 during the corresponding period in 2011, an increase of approximately $77,000 or 7.5%. As a percentage of net sales, advertising and promotion expense increased from 6.9% in the first six months of 2011 to 8.0% in the first six months of 2012. The increase is primarily due to increased television advertising. We anticipate that advertising and promotion expenses during the last six months of 2012 will be at approximately the same expense levels as they were in the second half of 2011.
Selling and administrative expenses decreased by approximately $117,000 or 4.2%, from approximately $2,776,000 during the six months ended June 30, 2011 to approximately $2,659,000 during the same period in 2012. The decrease is due to decreased stock-based compensation and lower variable sales commissions. As a percentage of net sales, selling and administrative expenses increased from 18.6% to 19.2%.
Under our credit agreement with Regions Bank (and, pursuant to an Equipment Finance Addendum to the Credit Agreement, Regions Equipment Finance Corporation (“REFCO”)), we have borrowings under a term loan, which is payable, together with interest at the fixed rate of 3.54% per annum, in 72 consecutive monthly payments of $37,511, with the final payment on July 6, 2017. At June 30, 2012, the remaining principal balance on the term loan was $2,091,270. In addition, the credit agreement provides for a revolving line of credit, under which we may borrow up to the lesser of (i) $6 million and (ii) a borrowing base equal to 80% of eligible accounts receivable plus 50% of eligible inventory. Interest on the revolving line of credit is payable at the 30 day LIBOR rate plus 1.74% per annum (unless 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 below 2.0 to 1, in which case interest will be payable at the 30 day LIBOR rate plus 2.75% per annum). In no event will the interest rate be less than 2.0% 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. Interest on amounts borrowed under the revolving line of credit is payable in monthly installments on outstanding average balances, with all outstanding principal and interest payable on July 6, 2014. At June 30, 2012, the outstanding balance under the revolving line of credit was $400,000.
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