PR Newswire
JACKSONVILLE, Fla., July 26, 2023
JACKSONVILLE, Fla., July 26, 2023 /PRNewswire/ -- Margo Caribe, Inc. (OTC SYMBOL: MRGO) (Margo), a market leader in the home and garden segment, today announced operating results of its wholly-owned subsidiary, Margo Outdoor Living, Inc. for the quarter ended June 30, 2023.
The Company reported unaudited results for the three-month period ended June 30, 2023, that included net sales of $14.1 million, 16 percent lower than the prior year and net income of approximately $3.1 million, 31 percent higher than the prior year. Unaudited results for the six-month period ended June 30, 2023, included net sales of $26.5 million, down 13 percent from the prior year and pre-tax income of approximately $6.7 million, a 13 percent improvement compared to the same period last year.
"Our sales in 2023 reflect the issues that our 'big-box' retail customers continue to address: realigning over-stocked inventory levels, inflation, softer-than-expected consumer demand for discretionary purchases and unfavorable spring weather," said Michael Spector, Margo Caribe's president and CEO.
Mr. Spector added, "We were pleased with our ability to increase pre-tax income despite lower sales by reducing operating expenses and improving gross margins as supply chain logistic costs continue to normalize back to pre-pandemic levels. Our primary operating focus remains on expanding and diversifying our product offerings and broadening our supplier distribution network. We are encouraged with business development opportunities in the pottery and tile segments by leveraging newly secured production commitments from South American and European suppliers."
Highlights for the Quarter Ended June 30, 2023
- Revenue was $14.1 million for the three-month period ending June 30, 2023, down 16 percent from the same period in the prior year. For the six-month period, revenue totaled $26.5 million, down 12.8 percent from last year.
- Net income for the three-month period was $3.1 million, an increase of 31 percent from the same period last year and $5.2 million for the six-month period, up 10.4 percent from the prior year.
- Pre-tax income improvement of 13 percent, or $780 thousand, for the six-months period ended June 30, 2023, was primarily driven by a 7.5 percentage point improvement in gross margin and a 4 percent decrease in operating expenses when compared to the prior year.
- Cash flow remained strong through the first half of 2023. Cash balances ended the quarter at $7.1 million, up 59 percent from the same period last year and 30 percent higher from year-end 2022.
- Debt, including related party notes, ended the second quarter at $4.3 million, down 33 percent or $2.1 million from the same period last year.
- The second quarter of 2023 ended with the Company having access to approximately $15.3 million in liquidity consisting of $8.3 million in asset-based lending availability, based on advance rates on accounts receivable and inventory and $6.9 million in free cash.
Margo Outdoor Living, Inc. | ||||||
Statements of Income | ||||||
(A wholly-owned subsidiary of Margo Caribe, Inc. | ||||||
Statements of Operations and Retained Earnings | ||||||
In thousands except per share data | Six Months Ended | Three Months Ended | ||||
June 30, | June 30, | |||||
2023 | 2022 | 2023 | 2022 | |||
Unaudited | Unaudited | Unaudited | Unaudited | |||
Revenues | ||||||
Distribution and eCommerce | $ 23,301 | $ 27,339 | $ 12,489 | $ 14,910 | ||
Manufacturing | 3,231 | 3,072 | 1,624 | $ 1,815 | ||
Total Revenue | 26,532 | 30,411 | 14,112 | 16,725 | ||
Cost of Sales | 15,026 | 19,514 | 7,654 | 11,013 | ||
Gross Profit(Loss) | 11,506 | 10,897 | 6,459 | 5,712 | ||
Operating expenses | 4,561 | 4,746 | 2,253 | 2,559 | ||
Income (Loss) from Operations | 6,945 | 6,151 | 4,206 | 3,153 | ||
Interest income (expense) | (205) | (189) | (108) | (98) | ||
Other expenses, net | - | - | ||||
Total Other Operating Expenses, Net | (205) | (189) | (108) | (98) | ||
Income (Loss) Before Income Tax | 6,740 | 5,962 | 4,098 | 3,055 | ||
Income Tax Benefit (Provision) | (1,638) | (1,341) | (996) | (690) | ||
Net Income (Loss) | 5,102 | 4,621 | 3,102 | 2,365 | ||
Earnings per common share | $ 1.28 | $ 1.15 | $ 0.78 | $ 0.59 | ||
Margo Outdoor Living, Inc. | ||
Condensed Balance Sheet | ||
(A wholly-owned subsidiary of Margo Caribe, Inc. | ||
Statements of Operations and Retained Earnings | ||
In Thousands | June 30, | |
2023 | 2023 | |
Unaudited | Unaudited | |
Assets | ||
Cash | $7,076 | $4,462 |
Accounts receivable, net | $5,869 | $7,115 |
Inventories, net | $5,640 | $5,489 |
Prepaid expenses | $517 | $1,696 |
Other | $565 | $201 |
Total Current Assets | $19,667 | $18,962 |
Property and equipment, net | $6,917 | $8,063 |
Right-of-Use Assets, operating leases | $12,779 | $13,032 |
Total Assets | $39,362 | $40,057 |
Liabilities and Stockholders' Equity | ||
Accounts payable | $346 | $1,171 |
Deferred tax liability | $466 | $704 |
Revolving line-of-credit | $0 | $0 |
Debt | $2,285 | $4,151 |
Note payable to related parties | $1,970 | $2,179 |
Operating lease liabilities | $14,119 | $14,503 |
Other | -$1,960 | $106 |
Total Liabilities | $17,226 | $22,814 |
Total Stockholders' Equity | $22,136 | $17,243 |
Total Liabilities and Stockholders' Equity | $39,362 | $40,057 |
About Margo Caribe, Inc.
Margo Caribe, Inc. through its subsidiary Margo Outdoor Living, Inc. (MOL). has benefited by building key relationships with the largest big-box retailers in its industry segment. Its focus on product development, world-wide supplier sourcing, cost-effective logistics and state-of-the-art automation has contributed to its success in growing both top and bottom-line results. MOL offers a wide range of products in the lawn and garden segment. This includes sales of landscaping pebbles, mulch, glass, pottery and tile products. The Company's customer base is predominantly big-box retailers but also sells products directly to consumers through the eCommerce sales channel.
MOL is a wholly-owned subsidiary of Margo Caribe, Inc., a Puerto Rico entity. Effective December 22, 2020, MOL converted from a Florida corporation to a Delaware corporation and changed its name from Margo State Line, Inc. to Margo Outdoor Living, Inc.
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SOURCE Margo Caribe, Inc.
