Ocean BioChem Inc. (OBCI, Financial) filed Quarterly Report for the period ended 2009-09-30.
OCEAN BIO-CHEM, INC. is principally engaged in the marketing and distribution of a broad line of appearance and maintenance products for automobiles, boats, motorcycles, recreational vehicles and aircraft under the Star Brite name. Ocean Biochem Inc. has a market cap of $8.8 million; its shares were traded at around $1.1499 with a P/E ratio of 14.4 and P/S ratio of 0.4.
Company's primary commercial bank - Regions Bank. Security for the Letter of
Credit is a priority first mortgage on the Kinpak facility and collateral on
Kinpak manufacturing equipment. On February 10, 2009 the Company received
notification that its City of Montgomery, AL Series 1997 and Series 2002
Industrial Revenue Bonds with an approximate balance of $1,105,000 and
$2,720,000, respectively, were tendered by various bondholders. At September 30,
2009, $850,000 and $2,630,000 were outstanding, respectively. There has been no
default on these bonds by the Company. It is the understanding of the Company
that due to the tight credit markets, these bonds were tendered. As a result the
Company has been temporarily obligated to its primary commercial bank until the
credit markets improve sufficiently to remarket these bonds. The interest rate
on the loans during this period was prime rate or approximately 3.3%. We believe
current operations are sufficient to meet these obligations. Interest expense on
such notes were approximately $116,000 for the nine months ending September 30,
2009 and $29,000 for the three months ending September 30, 2009.
Advertising and promotion expenses were approximately $380,000 compared to
$409,000 for the comparative 2008 third quarter. On a comparative basis the
advertising programs in place in 2008 were repeated in 2009. The decrease in
expense of approximately $29,000 was a result of decreased advertising rates in
trade publications.
Selling and administrative expenses increased approximately $529,500 to
$1,406,500 from $877,000, for the comparative quarters. The largest increase was
unusual legal expense for $200,000, to sue a competitor, Valvtech for false and
misleading advertising. The courts have imposed an injunction against Valvtect
for their false and misleading marketing claims. It is anticipated the Company
will prevail in a trial, scheduled for spring 2010. In addition the Company had
an increase in non-cash expenses for allowances for doubtful accounts and stock
awards granted earlier in the year. The Company also recognized performance
related employee bonuses in the quarter.
Advertising and promotion expenses were approximately $1,279,000 compared
to $1,079,000 for the comparative 2008 period. The increase in advertising
expense of approximately $200,000 was a result of increased customer
cooperative, promotional, and catalog allowances in addition to increased
expenditures for trade shows. The Company has increased its consumer advertising
with increased expenditures in magazines, newspapers and television medias. We
also increased consumer and trade advertising in TV, radio and print. This year
the Company also initiated advertising programs on the internet, on both Face
Book and Twitter.
Selling and administrative expenses increased approximately $297,000 to
$3,251,000 from $2,954,000, for comparative periods. The largest increase was
unusual legal expense for $200,000, to sue a competitor, Valvtech for false and
misleading advertising. The courts have imposed an injunction against Valvtect
for their false and misleading marketing claims. It is anticipated the Company
will prevail in a trial, scheduled for spring 2010. The Company had higher
allocation of administrative services charged to affiliated companies offset by
additional allowance for bad debts and non cash compensation expense for both
stock and stock options awards.
Interest expense decreased by approximately $62,000 for the nine months
ended September 30, 2009 to $170,000 from $232,000 for the corresponding 2008
period. The decrease in interest expense is a result of the lower outstanding
borrowings for the comparative period partially offset by higher interest rates
on the Company's IRB's which were tendered in February 2009 and held as a term
loan by Regions Bank until the bonds are remarketed.
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OCEAN BIO-CHEM, INC. is principally engaged in the marketing and distribution of a broad line of appearance and maintenance products for automobiles, boats, motorcycles, recreational vehicles and aircraft under the Star Brite name. Ocean Biochem Inc. has a market cap of $8.8 million; its shares were traded at around $1.1499 with a P/E ratio of 14.4 and P/S ratio of 0.4.
Highlight of Business Operations:
Repayment of the bonds is guaranteed by a Letter of Credit issued by theCompany's primary commercial bank - Regions Bank. Security for the Letter of
Credit is a priority first mortgage on the Kinpak facility and collateral on
Kinpak manufacturing equipment. On February 10, 2009 the Company received
notification that its City of Montgomery, AL Series 1997 and Series 2002
Industrial Revenue Bonds with an approximate balance of $1,105,000 and
$2,720,000, respectively, were tendered by various bondholders. At September 30,
2009, $850,000 and $2,630,000 were outstanding, respectively. There has been no
default on these bonds by the Company. It is the understanding of the Company
that due to the tight credit markets, these bonds were tendered. As a result the
Company has been temporarily obligated to its primary commercial bank until the
credit markets improve sufficiently to remarket these bonds. The interest rate
on the loans during this period was prime rate or approximately 3.3%. We believe
current operations are sufficient to meet these obligations. Interest expense on
such notes were approximately $116,000 for the nine months ending September 30,
2009 and $29,000 for the three months ending September 30, 2009.
Advertising and promotion expenses were approximately $380,000 compared to
$409,000 for the comparative 2008 third quarter. On a comparative basis the
advertising programs in place in 2008 were repeated in 2009. The decrease in
expense of approximately $29,000 was a result of decreased advertising rates in
trade publications.
Selling and administrative expenses increased approximately $529,500 to
$1,406,500 from $877,000, for the comparative quarters. The largest increase was
unusual legal expense for $200,000, to sue a competitor, Valvtech for false and
misleading advertising. The courts have imposed an injunction against Valvtect
for their false and misleading marketing claims. It is anticipated the Company
will prevail in a trial, scheduled for spring 2010. In addition the Company had
an increase in non-cash expenses for allowances for doubtful accounts and stock
awards granted earlier in the year. The Company also recognized performance
related employee bonuses in the quarter.
Advertising and promotion expenses were approximately $1,279,000 compared
to $1,079,000 for the comparative 2008 period. The increase in advertising
expense of approximately $200,000 was a result of increased customer
cooperative, promotional, and catalog allowances in addition to increased
expenditures for trade shows. The Company has increased its consumer advertising
with increased expenditures in magazines, newspapers and television medias. We
also increased consumer and trade advertising in TV, radio and print. This year
the Company also initiated advertising programs on the internet, on both Face
Book and Twitter.
Selling and administrative expenses increased approximately $297,000 to
$3,251,000 from $2,954,000, for comparative periods. The largest increase was
unusual legal expense for $200,000, to sue a competitor, Valvtech for false and
misleading advertising. The courts have imposed an injunction against Valvtect
for their false and misleading marketing claims. It is anticipated the Company
will prevail in a trial, scheduled for spring 2010. The Company had higher
allocation of administrative services charged to affiliated companies offset by
additional allowance for bad debts and non cash compensation expense for both
stock and stock options awards.
Interest expense decreased by approximately $62,000 for the nine months
ended September 30, 2009 to $170,000 from $232,000 for the corresponding 2008
period. The decrease in interest expense is a result of the lower outstanding
borrowings for the comparative period partially offset by higher interest rates
on the Company's IRB's which were tendered in February 2009 and held as a term
loan by Regions Bank until the bonds are remarketed.
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