Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 29, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | OCEAN BIO CHEM INC | ||
Entity Central Index Key | 350,737 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-Known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Common Stock, Shares Outstanding | 9,008,855 | ||
Entity Public Float | $ 12,067,625 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash | $ 2,468,415 | $ 3,062,729 |
Trade accounts receivable less allowances of approximately $78,000 and $76,000, respectively | 5,092,040 | 4,850,282 |
Receivables due from affiliated companies | 1,051,091 | 715,034 |
Inventories, net | 7,914,950 | 8,109,333 |
Prepaid expenses and other current assets | 942,820 | 851,333 |
Deferred tax asset | 125,335 | 123,360 |
Total Current Assets | 17,594,651 | 17,712,071 |
Property, plant and equipment, net | 5,356,388 | 5,172,882 |
Other Assets: | ||
Intangible assets, net | 1,037,968 | 1,095,458 |
Total Other Assets | 1,037,968 | 1,095,458 |
Total Assets | 23,989,007 | 23,980,411 |
Current Liabilities: | ||
Accounts payable - trade | 1,101,720 | 1,439,868 |
Current portion of long-term debt | $ 451,148 | 425,658 |
Income taxes payable | 16,465 | |
Accrued expenses payable | $ 1,098,721 | 1,115,514 |
Total Current Liabilities | 2,651,589 | 2,997,505 |
Deferred tax liability | 365,012 | 258,682 |
Long-term debt, less current portion | 328,818 | 692,104 |
Total Liabilities | $ 3,345,419 | $ 3,948,291 |
Commitments and contingencies | ||
Shareholders' Equity: | ||
Common stock - $.01 par value, 12,000,000 shares authorized; 8,983,374 shares and 8,914,274 shares issued, respectively | $ 89,834 | $ 89,142 |
Additional paid in capital | 9,287,313 | 9,131,952 |
Foreign currency translation adjustment | (284,442) | (279,163) |
Retained earnings | 11,550,883 | 11,090,189 |
Total Shareholders' Equity | 20,643,588 | 20,032,120 |
Total Liabilities and Shareholders' Equity | $ 23,989,007 | $ 23,980,411 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Balance Sheets [Abstract] | ||
Trade accounts receivable, allowance for doubtful accounts | $ 78,000 | $ 76,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 12,000,000 | 12,000,000 |
Common stock, shares issued | 8,983,374 | 8,914,274 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Statements of Operation [Abstract] | ||
Gross sales | $ 35,785,119 | $ 35,832,357 |
Less: discounts, returns, and allowances | 1,797,632 | 1,905,369 |
Net sales | 33,987,487 | 33,926,988 |
Cost of goods sold | 22,647,516 | 21,797,093 |
Gross profit | 11,339,971 | 12,129,895 |
Operating Expenses: | ||
Advertising and promotion expenses | 3,010,758 | 2,565,678 |
Selling and administrative | 7,579,682 | 6,540,961 |
Total operating expenses | 10,590,440 | 9,106,639 |
Operating income | 749,531 | 3,023,256 |
Other income (expense) | ||
Interest net, (expense) | (33,639) | $ (43,454) |
Other (expense) | (12,522) | |
Income before income taxes | 703,370 | $ 2,979,802 |
Provision for income taxes | 242,676 | 948,874 |
Net income | $ 460,694 | 2,030,928 |
Loss attributable to noncontrolling interests | 17,149 | |
Net income attributable to Ocean Bio-Chem, Inc. | $ 460,694 | $ 2,048,077 |
Earnings per common share - basic and diluted | $ 0.05 | $ 0.23 |
Dividends declared per common share | $ 0.05 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Statements Of Comprehensive Income [Abstract] | ||
Net income | $ 460,694 | $ 2,030,928 |
Foreign currency translation adjustment | (5,279) | (12,707) |
Comprehensive income | $ 455,415 | 2,018,221 |
Comprehensive loss attributable to noncontrolling interests | 17,149 | |
Comprehensive income attributable to Ocean Bio-Chem, Inc. | $ 455,415 | $ 2,035,370 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) | Total | Common Stock | Additional Paid In Capital | Foreign Currency Translation Adjustment | Retained Earnings | Treasury Stock | Non Controlling Interest |
Beginning balance at Dec. 31, 2013 | $ 18,272,076 | $ 87,499 | $ 8,805,460 | $ (266,456) | $ 9,482,128 | $ (65,029) | $ 228,474 |
Beginning balance, shares at Dec. 31, 2013 | 8,749,888 | ||||||
Net income (loss) | 2,030,928 | 2,048,077 | (17,149) | ||||
Dividends declared | (440,016) | (440,016) | |||||
Options exercised | 63,250 | $ 1,150 | 49,600 | 12,500 | |||
Options exercised, shares | 115,000 | ||||||
Stock based compensation - grants | 329,914 | $ 493 | 276,892 | $ 52,529 | |||
Stock based compensation - grants, shares | 49,386 | ||||||
Acquisition of joint venture partner's interest in OdorStar | (211,325) | $ (211,325) | |||||
Foreign currency translation adjustment | (12,707) | (12,707) | |||||
Ending balance at Dec. 31, 2014 | 20,032,120 | $ 89,142 | 9,131,952 | (279,163) | 11,090,189 | ||
Ending balance, shares at Dec. 31, 2014 | 8,914,274 | ||||||
Net income (loss) | $ 460,694 | 460,694 | |||||
Options exercised | $ 79 | (79) | |||||
Options exercised, shares | 7,844 | ||||||
Stock based compensation - grants | $ 156,053 | $ 613 | 155,440 | ||||
Stock based compensation - grants, shares | 61,256 | ||||||
Foreign currency translation adjustment | (5,279) | (5,279) | |||||
Ending balance at Dec. 31, 2015 | $ 20,643,588 | $ 89,834 | $ 9,287,313 | $ (284,442) | $ 11,550,883 | ||
Ending balance, shares at Dec. 31, 2015 | 8,983,374 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 460,694 | $ 2,030,928 |
Adjustment to reconcile net income to net cash provided by operations: | ||
Depreciation and amortization | 916,317 | 843,116 |
Deferred income taxes | 104,355 | $ (37,648) |
Loss on sale of property, plant and equipment | 12,522 | |
Stock based compensation | 162,225 | $ 356,085 |
Other operating noncash items | 8,016 | (17,664) |
Changes in assets and liabilities: | ||
Trade accounts receivable | (244,513) | (517,352) |
Inventories | 191,797 | (716,439) |
Prepaid expenses and other current assets | (91,487) | (210,843) |
Receivables due from affiliated companies | (336,057) | (178,632) |
Accounts payable and other accrued expenses | (384,016) | 234,802 |
Net cash provided by operating activities | 799,853 | 1,786,353 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | $ (997,761) | (830,817) |
Cash paid for acquisition of joint venture partner's interest in OdorStar | $ (150,000) | |
Cash paid for patent and trademark registration | $ (11,902) | |
Sale of property, plant and equipment | 55,000 | |
Net cash used in investing activities | (954,663) | $ (980,817) |
Cash flows from financing activities: | ||
Payments on long-term debt | $ (437,988) | (414,524) |
Dividends paid to common shareholders | (440,016) | |
Proceeds from exercise of stock options | 63,250 | |
Net cash used in financing activities | $ (437,988) | (791,290) |
Effect of exchange rate on cash | (1,516) | (23,404) |
Net (decrease) increase in cash | (594,314) | (9,158) |
Cash at beginning of period | 3,062,729 | 3,071,887 |
Cash at end of period | 2,468,415 | 3,062,729 |
Supplemental disclosure of cash transactions: | ||
Cash paid for interest during period | 34,871 | 51,537 |
Cash paid for income taxes during period | $ 169,200 | 1,090,000 |
Supplemental disclosure of non-cash investing information: | ||
Amounts due from joint venture partner released as part of acquisition of joint venture partner's interest in OdorStar | $ 305,905 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |
Organization and summary of significant accounting policies | Note 1 Organization Basis of presentation Revenue recognition Collectability of accounts receivable Inventories Shipping and handling costs Advertising and promotion expense Property, plant and equipment Research and development costs Stock based compensation Use of estimates Concentration of credit risk; dependence on major customers Concentration of cash Fair value of financial instruments ASC 820 also sets forth a valuation hierarchy of the inputs (assumptions that market participants would use in pricing an asset or liability) used to measure fair value. The hierarchy prioritizes the inputs into the following three levels: Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The carrying amounts of the Company’s short-term financial instruments, including accounts receivable, accounts payable, certain accrued expenses, revolving line of credit, and notes payable to related parties, approximate their fair value due to the relatively short period to maturity for these instruments. The fair value of long-term debt is based on current rates at which the Company could borrow funds with similar remaining maturities; the carrying amount of the long-term debt approximates fair value. Impairment of long-lived assets Income taxes We record a valuation allowance when necessary to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance. We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax positions will be sustained on examination by the taxing authorities based on the technical merits of the positions; otherwise, we establish reserves for uncertain tax positions. We adjust reserves with respect to uncertain tax positions to address developments related to these positions, such as the closing of a tax audit, the expiration of a statute of limitations or the refinement of an estimate. The provision for income taxes includes any reserves with respect to uncertain tax positions that are considered appropriate, as well as the related net interest and penalties. The Company has been audited by the Internal Revenue Service through the year ended December 31, 2009. Intangible assets – The Company purchased the Star brite® trade name and trademark in 1980 for $880,000. The cost of the trade name and trademark initially were amortized on a straight-line basis over an estimated useful life of 40 years. Effective January 1, 2002 and in accordance with ASC Topic 350, "Intangibles – Goodwill and Other," the Company determined that these intangible assets have indefinite lives and therefore, the Company no longer recognizes amortization expense. In addition, the Company’s wholly- owned subsidiary, OdorStar Technology, LLC, owns patents relating to a device for producing chlorine dioxide (ClO2), which is incorporated in Company's disinfectant, sanitizer and deodorizer products. The Company amortizes these patents over their remaining life on a straight line basis. The Company amortized approximately $51,000 for each of the years ended December 31, 2015 and 2014. On August 6, 2013, the Company purchased for $160,000 royalty rights (previously owned by an unaffiliated company that owned the patents ultimately acquired by OdorStar) relating to sales of products encompassing OdorStar's patented technology. The Company is amortizing the royalty rights over their remaining life on a straight line basis, and amortized approximately $18,000 for each of the years ended December 31, 2015 and 2014, respectively. On September 16, 2014, the Company paid its former OdorStar joint venture partner $150,000 and released the former joint venture partner from $305,905 in debt in exchange for the former joint venture partner's membership interest in OdorStar and all rights to the trade name Performacide®. The Company capitalized $244,580 in relation to the Performacide® trade name. The Company has determined that the Performacide® trade name has an indefinite life and, therefore, it is not being amortized. See Note 4 – OdorStar . The Company evaluates trademarks and trade names (all of which are indefinite-lived intangible assets) for impairment every year and at other times when an event occurs or circumstances change such that it is reasonably possible that an impairment may exist. The Company evaluates royalty rights and patents for impairment when an event occurs or circumstances change such that it is reasonably possible that an impairment may exist. Foreign currency adjustments Earnings per share |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2015 | |
Inventories [Abstract] | |
Inventories: | Note 2 The composition of inventories at December 31, 2015 and 2014 are as follows: 2015 2014 Raw materials $ 3,749,702 $ 3,365,093 Finished goods 4,445,130 5,021,536 Inventories, gross 8,194,832 8,386,629 Inventory reserves (279,882 ) (277,296 ) Inventories, net $ 7,914,950 $ 8,109,333 The inventory reserves shown in the table above reflect slow moving and obsolete inventory. The Company operates a vendor managed inventory program with one of its customers to improve the promotion of the Company's products. The Company manages the inventory levels at this customer’s warehouses and recognizes revenue as the products are sold by the customer. The inventories managed at the customer’s warehouses amounted to approximately $543,000 and $493,000 at December 31, 2015 and 2014, respectively. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | Note 3 The Company’s property, plant and equipment at December 31, 2015 and 2014 consisted of the following: Estimated Useful Life 2015 2014 Land $ 278,325 $ 278,325 Building and Improvements 30 years 4,652,669 4,648,089 Manufacturing and warehouse equipment 6-20 years 9,072,162 8,486,397 Office equipment and furniture 3-5 years 1,293,609 1,044,605 Construction in process 215,155 64,038 Leasehold improvements 10-15 years 544,146 436,659 Vehicles 3 years 42,283 131,828 Property, plant and equipment, gross 16,098,349 15,089,941 Less accumulated depreciation (10,741,961 ) (9,917,059 ) Property, plant and equipment, net $ 5,356,388 $ 5,172,882 |
OdorStar
OdorStar | 12 Months Ended |
Dec. 31, 2015 | |
OdorStar [Abstract] | |
OdorStar | Note 4 In 2010, the Company and BBL Distributors, LLC (“BBL”) organized OdorStar. OdorStar owns patents relating to a device for producing chlorine dioxide, which is incorporated in the Company's disinfectant, sanitizer and deodorizer products manufactured and marketed under the Star brite® and Performacide ® OdorStar operated as a joint venture until September 16, 2014, when the Company acquired BBL’s membership interest, at which time OdorStar became a wholly-owned subsidiary of the Company. In connection with the Company’s acquisition of BBL's membership interest, BBL and its affiliates released any rights they may have to the Performacide ® Prior to the acquisition, the Company was the managing member of OdorStar and included OdorStar in its consolidated financial statements. The Company and BBL shared equally in profits and losses with OdorStar. The Company’s consolidated statement of operations include OdorStar’s operating loss of approximately $130,000 ($34,000 during the period prior to the Company’s acquisition of BBL’s membership interest) during the year ended December 31, 2014. |
Revolving Line of Credit
Revolving Line of Credit | 12 Months Ended |
Dec. 31, 2015 | |
Revolving Line of Credit and Long-term Debt [Abstract] | |
Revolving line of credit | Note 5 On August 4, 2014, the Company and Regions Bank entered into a Business Loan Agreement (the“Business Loan Agreement”), under which the Company was provided a renewed revolving line of credit. Under the renewed revolving line of credit, the Company may borrow up to the lesser of (i) $6 million or (ii) a borrowing base equal to 80% of eligible accounts receivable (as defined in the Business Loan Agreement) plus 50% of eligible inventory (as defined in the Business Loan Agreement).Interest on amounts borrowed under the revolving line of credit is payable monthly at the 30 day LIBOR rate plus 1.65% per annum (unless the Company’s debt service coverage ratio (generally, net operating profit plus depreciation, amortization and lease/rent expense divided by current maturities of long-term debt plus interest and lease/rent expense, calculated on a trailing twelve month basis) falls to or below 2.0 to 1, in which case interest is payable at the 30 day LIBOR rate plus 2.65% 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 until expiration of the revolving line of credit on July 6, 2016, at which time all outstanding principal and interest will be due and payable. The Company’s obligations under the revolving line of credit are secured by, among other things, the Company’s accounts receivable, inventory, contract rights and general intangibles and, as a result of cross-collateralization of the Company’s obligations under the term loan described in Note 7 and the revolving line of credit, real property and equipment at the Montgomery, Alabama facility of the Company’s subsidiary, Kinpak, Inc. ("Kinpak"). The Business Loan Agreement contains various covenants, including financial covenants requiring a minimum debt service coverage ratio of 1.75 to 1.00, tested on a trailing twelve month basis, and a maximum debt to capitalization ratio (generally, funded debt divided by the sum of total net worth and funded debt) of 0.75 to 1, tested quarterly. For the year ended December 31, 2015, our debt service coverage ratio exceeded 3.0 to 1 and at December 31, 2015, our debt to capitalization ratio was approximately .04 to 1. The line of credit is subject to several events of default, including a decline in the majority shareholder’s ownership below 50% of all outstanding shares. At December 31, 2015 and December 31, 2014, the Company had no borrowings under the revolving line of credit. |
Accrued Expenses Payable
Accrued Expenses Payable | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Expenses Payable [Abstract] | |
Accrued expenses payable: | Note 6 Accrued expenses payable at December 31, 2015 and 2014 consisted of the following: 2015 2014 Accrued customer promotions $ 491,378 $ 369,238 Accrued payroll, commissions, and benefits 269,380 255,880 Other 337,963 490,396 Total accrued expenses payable $ 1,098,721 $ 1,115,514 |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2015 | |
Revolving Line of Credit and Long-term Debt [Abstract] | |
Long-term debt | Note 7 On July 6, 2011, in connection with a credit agreement among the Company, Kinpak, Regions Bank and Regions Equipment Finance Corporation (“REFCO”), an Equipment Finance Addendum to the Credit Agreement was entered into by the Company, Kinpak and REFCO. Under the Addendum, REFCO provided to the Company a $2,430,000 term loan with a fixed interest rate of 3.54% per annum. Principal and interest on the term loan are payable in equal monthly installments of $37,511 through July 6, 2017, the date the term loan matures. In the event the Company’s debt service coverage ratio falls to or below 2.0 to 1, interest on the term loan will increase to 4.55% per annum. The Company’s debt service coverage ratio exceeded 3.0 to 1 for the year ended December 31, 2015. The proceeds of the term loan were used to pay Kinpak’s remaining obligations under a lease agreement relating to industrial revenue bonds used to fund the expansion of Kinpak’s facilities and acquisition of related equipment. At December 31, 2015 approximately $692,000 was outstanding under the term loan. At December 31, 2015 and 2014, the Company was obligated under various capital lease agreements covering equipment utilized in the Company’s operations. The capital leases aggregating approximately $88,000 and $8,000 at December 31, 2015 and December 31, 2014, respectively have varying maturities through 2020 and carry interest rates ranging from 2% to 14%. The following table provides information regarding the Company’s long-term debt at December 31, 2015 and 2014: Current Portion Long-term Portion 2015 2014 2015 2014 Term loan $ 432,601 $ 417,577 $ 259,503 $ 692,104 Capitalized equipment leases 18,547 8,081 69,315 -- Total long-term debt $ 451,148 $ 425,658 $ 328,818 $ 692,104 Required principal payments under these obligations are set forth below: Year ending December 31, 2016 $ 451,148 2017 278,392 2018 19,238 2019 19,593 2020 11,595 Total $ 779,966 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes [Abstract] | |
Income taxes: | Note 8 The components of the Company’s consolidated provision for income taxes are as follows: 2015 2014 Federal – current $ 136,479 $ 961,573 Federal – deferred 101,290 (37,242 ) State – current 1,842 24,949 State – deferred 3,065 (406 ) Total provision for income taxes $ 242,676 $ 948,874 The reconciliation of the provision for income taxes at the statutory rate to the reported provision for income taxes is as follows: 2015 % 2014 % Income Tax computed at statutory rate $ 239,146 34.0 % $ 1,013,133 34.0 % State tax, net of federal benefit 889 0.1 % 16,300 0.5 % Loss attributable to noncontrolling interest --- 0.0 % 5,831 0.2 % Share based compensation (2,881 ) (0.4 )% (738 ) 0.0 % Other, permanent adjustments 6,079 0.9 % (79,733 ) -2.7 % Tax credits and prior year tax adj. (557 ) -0.1 % (5,919 ) -0.2 % Provision for income taxes $ 242,676 34.5 % $ 948,874 31.8 % The Company’s deferred tax asset and liability accounts consisted of the following at December 31, 2015 and 2014: 2015 2014 Deferred taxes – current Reserves for trade accounts receivable and inventories $ 125,335 $ 123,360 Total deferred tax asset current $ 125,335 $ 123,360 Deferred taxes - non-current Depreciation of property and equipment $ (365,012 ) $ (258,682 ) Total deferred tax liability non-current $ (365,012 ) $ (258,682 ) |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related party transactions | Note 9 During 2015, as in previous years, the Company sold products to companies affiliated with its Chairman, President and Chief Executive Officer. The affiliated companies distribute the products outside of the United States and Canada. The Company also provides administrative services to these companies. Sales to the affiliated companies aggregated approximately $2,075,000 and $1,956,000 during the years ended December 31, 2015 and 2014, respectively, and administrative fees aggregated approximately $527,000 and $478,000 during the years ended December 31, 2015 and 2014, respectively. The Company had accounts receivable from the affiliated companies in connection with the product sales and administrative services aggregating approximately $1,051,000 and $715,000 at December 31, 2015 and 2014, respectively. Transactions with the affiliated companies were made in the ordinary course of business. While the terms of the sales to the affiliated companies differed from the terms of sale to other customers, the affiliated companies bear their own warehousing, distribution, advertising, selling and marketing costs, as well as their own freight charges (the Company pays freight charges in connection with sales to its domestic customers on all but small orders). Moreover, the Company does not pay sales commissions with respect to products sold to the affiliated companies. As a result, the Company believes its profit margins with respect to sales of its products to the affiliated companies are similar to the profit margins it realizes with respect to sales of the same products to its larger domestic customers. Management believes that the sales transactions did not involve more than normal credit risk or present other unfavorable features. A subsidiary of the Company currently uses the services of an entity that is owned by the Chairman, President and Chief Executive Officer of the Company to conduct product research and development and to assist in the production of television commercials. The Company paid the entity $42,000 for research and development services in each of the years ended December 31, 2015 and 2014. In addition, for the year ended December 31, 2014, the Company made a $40,000 prepayment to the affiliated company for the production of television commercials. During 2015, the affiliated company provided the services covered by the prepayment, and the $40,000 is included in advertising and promotion expenses in the Company’s consolidated statement of operations for the year ended December 31, 2015. The Company leases office and warehouse facilities in Fort Lauderdale, Florida from an entity controlled by its Chairman, President and Chief Executive Officer. The Company believes that its rental payments are below market rates. See Note 10 for a description of the lease terms. A director of the Company is Regional Executive Vice President of an entity from which the Company sources most of its commercial insurance needs at an arm’s length competitive basis. The Company paid an aggregate of approximately $925,000 and $811,000 to the entity during the years ended December 31, 2015 and 2014, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies [Abstract] | |
Commitments and contingencies | Note 10 The Company leases its executive offices and warehouse facilities in Fort Lauderdale, Florida from an entity controlled by its Chairman, President and Chief Executive Officer. The lease, as extended, expires on December 31, 2023. The lease requires an annual minimum base rent of $94,800 and provides for a maximum annual 2% increase in subsequent years, although the entity has not raised the minimum rent since the Company entered into a previous lease agreement in 1998. Additionally, the leasing entity is entitled to reimbursement of all taxes, assessments, and any other expenses that arise from ownership. Each of the parties to the lease has agreed to review the terms of the lease every three years at the request of the other party. Rent expense under the lease was approximately $98,000 and $97,000 for the years ended December 31, 2015 and 2014, respectively. The following is a schedule of minimum future rentals on the Company’s non-cancelable operating leases. 12 month period ending December 31, 2016 $ 96,064 2017 97,985 2018 99,945 2019 101,944 2020 103,983 Thereafter 324,593 Total $ 824,514 On August 13, 2014, Star-Brite Distributing, Inc. (“Star-Brite”), a wholly-owned subsidiary of the Company, filed a complaint for injunctive relief and damages against Gold Eagle Co. (“Gold Eagle”) in the United States District Court for the Southern District of Florida. The complaint alleges that Gold Eagle, in violation of Section 43(a) of the Lanham Act, the Florida Deceptive and Unfair Trade Practices Act, and the Florida False Advertising Statute, made false and/or misleading statements in a comparative marketing campaign against Star Tron® Enzyme Fuel Treatment, an enzyme based fuel additive for the marine market used to treat ethanol gasoline, commonly referred to as E10 fuel. The complaint also constitutes a claim for common law unfair competition. Specifically, the complaint alleges, among other things, that Gold Eagle commenced a marketing campaign for its STA-BIL® Marine ethanol fuel treatment and stabilizer (“STA-BIL Marine”) that included a product information tag attached to the neck of the STA-BIL Marine product bottle; that the product information tag contained a comparison advertisement purportedly establishing that, based on a fuel stability test and a corrosion control test, STA-BIL Marine outperformed Star Tron; and that the tests used were not appropriate for fuel additives treating E10 fuel. The complaint seeks a preliminary and permanent injunction enjoining Gold Eagle from further publishing the alleged false and/or misleading statements and requiring Gold Eagle to issue corrective advertising sufficient to dispel the lingering harmful effects of specified product information tags; the entry of a judgment against Gold Eagle for actual damages and enhanced damages up to three times actual damages; disgorgement of profits to Star-Brite that Gold Eagle made as a result of the alleged unlawful actions; and costs and attorney’s fees. Gold Eagle filed an answer to complaint and counterclaim, generally denying the allegations in Star-Brite’s complaint and asserting, among other things, that original equipment manufacturers recognize the fuel stability test it used as reliable for testing E10 fuel treatment additives and that the corrosion protection test it used is applicable to most boat engine fuel systems. Gold Eagle also asserted affirmative defenses to Star-Brite’s claims. Gold Eagle’s counterclaim alleges, among other things, that in various advertising and marketing materials for Star Tron, which Star-Brite markets for use in various types of engines, Star-Brite makes false and misleading claims that are causing harm to Gold Eagle, which markets competitive products under the STA-BIL brand, thereby violating the same statutory provisions as Gold Eagle is alleged to have violated in Star-Brite’s complaint, and also constituting common law unfair competition. Among other things, the counterclaim references several tests conducted by a laboratory hired by Gold Eagle and alleges that, given the results of these tests, Star-Brite’s claims that Star Tron improves the performance of E10 fuel, provides cleaning and restorative benefits, and provides benefits with respect to ethanol fuel problems are false and misleading. Gold Eagle seeks, among other things, a permanent injunction enjoining Star-Brite from further using, displaying and distributing marketing materials that include the alleged false and misleading claims and requiring Star-Brite to issue corrective statements sufficient to dispel any residual harmful effects of the alleged false and misleading statements; and that the Court issue a judgment against Star-Brite for actual damages to be enhanced up to three times; disgorgement of profits to Gold Eagle that Star-Brite made as a result of its alleged unlawful actions; and attorney’s fees, costs and interest. Star-Brite filed an answer to the counterclaim, generally denying the allegations, and asserting affirmative defenses, including that Star-Brite’s subject advertising is based on reliable tests, data and results, and that the counterclaim is barred by, among other things, the applicable statutes of limitations and the doctrine of laches. In September 2015, Gold Eagle filed a motion for summary judgment. Star-Brite filed two motions for summary judgment with respect to Gold Eagle’s counterclaims, one of which was based on Star-Brite’s defenses regarding the statutes of limitations and doctrine of laches and the other based on Star-Brite’s other defenses to the counterclaims. Star-Brite’s motion based on the statutes of limitations and doctrine of laches was denied by the Court in January 2016. The remaining motions were denied as moot following the jury verdict on the matter, described below. A jury trial was conducted during February 2016. On March 1, 2016, the jury unanimously found that (i) Gold Eagle’s advertising was not literally false; (ii) Gold Eagle did not commit false advertising under the Florida False Advertising Statute; (iii) Star-Brite’s advertising was not literally false and (iv) Star-Brite did not commit false advertising under the Florida False Advertising Statute. As a result of the jury’s verdict, the Court determined that (i) Star-Brite would recover nothing from Gold Eagle, and Star-Brite’s action was dismissed on the merits and (ii) Gold Eagle would recover nothing from Star-Brite, and Gold eagle’s counterclaim was dismissed on the merits. Each party has until April 1, 2016 to file an appeal. The Company believes that, based on information available, the outcome of this legal matter will not ultimately have a material adverse effect on the financial position or results of operation of the Company. However, in the event of unexpected further developments, it is possible that the ultimate resolution of this matter, or other matters that may arise, if unfavorable, may be materially adverse to the Company’s business, financial condition, results of operations or liquidity. |
Stock Options and Awards
Stock Options and Awards | 12 Months Ended |
Dec. 31, 2015 | |
Stock options and awards [Abstract] | |
Stock options and awards: | Note 11 On May 29, 2015, the Company’s shareholders approved the Ocean Bio-Chem, Inc. 2015 Equity Compensation Plan (the “Plan”). The Plan is designed (i) to meet the Nasdaq listing requirements, (ii) to enable compensation attributable to grants under the Plan to qualify for an exemption from the deduction limit under section 162(m) of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (the “Code”) and (iii) to enable incentive stock options to meet the requirements of the Code. As a result of the adoption of the Plan, no further stock awards will be made under the Company’s equity compensation plans previously approved by its shareholders (the “Prior Plans”). The Plan authorizes the issuance of 630,000 shares, subject to anti-dilution adjustments upon the occurrence of certain events affecting the common stock. The Company issued stock awards under the Plan to officers, key employees and a consultant totaling an aggregate of 65,500 shares of common stock during the year ended December 31, 2015 and issued stock awards to officers, key employees and a consultant under its Prior Plans totaling an aggregate of 128,000 shares of common stock during the year ended December 31, 2014. At December 31, 2015, 564,500 shares remained available for future issuance under the Plan. Compensation expense related to the stock awards was approximately $162,000 and $356,000 for the years ended December 31, 2015 and 2014, respectively. During 2015, a former director exercised stock options to purchase 10,000 shares. Following the withholding of 2,156 shares in connection with the net exercise feature of the stock options, the Company delivered 7,844 shares to the former director. During 2014, an officer, directors, and a former director of the Company exercised stock options to purchase an aggregate of 145,000 shares of the Company’s common stock for an aggregate of approximately $63,000 in cash and the withholding of 14,633 shares in connection with a net exercise feature of the stock options. As a result, 130,367 shares were delivered to the persons exercising stock options, and approximately $49,600 is reflected as paid in capital on the consolidated balance sheet. The following tables provide information at December 31, 2015 and 2014 regarding outstanding options under the Company’s stock option plans. As used in the table below, “2002 NQ” refers to the Company’s 2002 Non-Qualified Stock Option Plan and “2008 NQ” refers to the Company’s 2008 Non-Qualified Stock Option Plan. At December 31, 2015: Plan Date Options Outstanding Exercisable Exercise Price Expiration Weighted Average 2002 NQ 4/3/06 30,000 30,000 $ 1.08 4/2/16 0.3 2002 NQ 12/17/07 40,000 40,000 1.32 12/16/17 2.0 2008 NQ 1/11/09 40,000 40,000 0.69 1/10/19 3.1 2008 NQ 4/26/10 20,000 20,000 2.07 4/25/20 4.4 130,000 130,000 $ 1.19 2.3 At December 31, 2014: Plan Date Options Outstanding Exercisable Exercise Price Expiration Weighted Average 2002 NQ 4/3/06 40,000 40,000 $ 1.08 4/2/16 1.3 2002 NQ 12/17/07 40,000 40,000 1.32 12/16/17 3.0 2008 NQ 1/11/09 40,000 40,000 0.69 1/10/19 4.1 2008 NQ 4/26/10 20,000 20,000 2.07 4/25/20 5.4 140,000 140,000 $ 1.18 3.2 The following table provides information relating to stock option transactions during the years ended December 31, 2015 and 2014: 2015 2014 Weighted Weighted Average Average Exercise Exercise Shares Price Shares Price Options outstanding beginning of the year 140,000 $ 1.18 170,000 $ 1.23 Options exercised (10,000 ) 1.08 (30,000 ) 1.46 Totals 130,000 $ 1.19 140,000 $ 1.18 Stock options may be awarded as part of compensation to executives, employees, directors and others, pursuant to the terms of the Company’s 2015 Equity Compensation Plan. Prior to the May 29, 2015 effective date of the 2015 Equity Compensation Plan, stock options could be awarded under the Prior Plans. No options were awarded in 2015 or 2014. Grants of stock options or other equity awards are made at the discretion of the Equity Grant Committee of the Board of Directors. Only non-qualified options granted under the Prior Plans were outstanding on December 31, 2015. Outstanding non-qualified options previously granted to outside directors have a 10-year term and are immediately exercisable. The last tranche of non-qualified options previously granted terminate on April 25, 2020. There was no compensation expense attributable to stock options recognized during each of the years ended December 31, 2015 and 2014. At December 31, 2015 and 2014, there was no unrecognized compensation cost related to share based compensation arrangements |
Major Customers
Major Customers | 12 Months Ended |
Dec. 31, 2015 | |
Major Customers [Abstract] | |
Major customers: | Note 12 The Company had sales to each of two major customers that constituted in excess of 10% of the Company’s consolidated net sales for each of the years ended December 31, 2015 and 2014. Sales to these customers aggregated approximately 38.2% and 36.0% of consolidated net sales for 2015 and 2014, respectively. The Company’s top five unaffiliated customers represented approximately 49.0% and 47.0%, of consolidated net sales for the years ended December 31, 2015 and 2014, respectively, and 39.4% and 36.2% of consolidated trade accounts receivable at December 31, 2015 and 2014, respectively. While the Company enjoys good relations with these customers, the loss of any of these customers could have an adverse impact on the Company’s operations. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings per share | Note 13 Basic earnings per share is calculated by dividing net income attributable to Ocean-Bio Chem, Inc. by the weighted average number of shares outstanding during the reporting period. Diluted earnings per share reflect additional dilution from potential common stock issuable upon the exercise of outstanding stock options. The following table sets forth the computation of basic and diluted earnings per common share, as well as a reconciliation of the weighted average number of common shares outstanding to the weighted average number of shares outstanding on a diluted basis. Year Ended 2015 2014 Earnings per common share –Basic Net income attributable to OBCI $ 460,694 $ 2,048,077 Weighted average number of common shares outstanding 8,940,593 8,834,951 Earnings per common share – Basic $ 0.05 $ 0.23 Earnings per common share – Diluted Net income attributable to OBCI $ 460,694 $ 2,048,077 Weighted average number of common shares outstanding 8,940,593 8,834,951 Dilutive effect of employee stock-based awards 86,513 111,251 Weighted average number of common shares outstanding - assuming dilution 9,027,106 8,946,202 Earnings per common share - Diluted $ 0.05 $ 0.23 The Company had no stock options outstanding at December 31, 2015 and 2014, respectively that were anti-dilutive and therefore not included in the diluted earnings per common share calculation. |
Special Cash Dividend
Special Cash Dividend | 12 Months Ended |
Dec. 31, 2015 | |
Special Cash Dividend [Abstract] | |
Special Cash Dividend | Note 14 On April 15, 2014, the Company paid a special cash dividend of $0.05 per common share to all shareholders of record on April 1, 2014. The dividend aggregated $440,016. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2015 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | Note -15 There have been no accounting pronouncements or changes in accounting pronouncements during the year ended December 31, 2015 that are expected to have a material impact on the Company’s financial position, results of operations or cash flows. Accounting pronouncements that became effective during the year ended December 31, 2015 did not have a material impact on disclosures or on the Company’s financial position, results of operations or cash flows. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note -16 On March 25, 2016, the Board of Directors of Ocean Bio-Chem, Inc. declared a special cash dividend of $0.06 per share payable on April 26, 2016 to shareholders of record on April 12, 2016. |
Organization and Summary of S24
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |
Organization | Organization |
Basis of presentation | Basis of presentation |
Revenue recognition | Revenue recognition |
Collectability of accounts receivable | Collectability of accounts receivable |
Inventories | Inventories |
Shipping and handling costs | Shipping and handling costs |
Advertising and promotion expense | Advertising and promotion expense |
Property, plant and equipment | Property, plant and equipment |
Research and development costs | Research and development costs |
Stock based compensation | Stock based compensation |
Use of estimates | Use of estimates |
Concentration of credit risk; dependence on major customers | Concentration of credit risk; dependence on major customers |
Concentration of cash | Concentration of cash |
Fair value of financial instruments | Fair value of financial instruments ASC 820 also sets forth a valuation hierarchy of the inputs (assumptions that market participants would use in pricing an asset or liability) used to measure fair value. The hierarchy prioritizes the inputs into the following three levels: Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The carrying amounts of the Company’s short-term financial instruments, including accounts receivable, accounts payable, certain accrued expenses, revolving line of credit, and notes payable to related parties, approximate their fair value due to the relatively short period to maturity for these instruments. The fair value of long-term debt is based on current rates at which the Company could borrow funds with similar remaining maturities; the carrying amount of the long-term debt approximates fair value. |
Impairment of long-lived assets | Impairment of long-lived assets |
Income taxes | Income taxes We record a valuation allowance when necessary to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance. We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax positions will be sustained on examination by the taxing authorities based on the technical merits of the positions; otherwise, we establish reserves for uncertain tax positions. We adjust reserves with respect to uncertain tax positions to address developments related to these positions, such as the closing of a tax audit, the expiration of a statute of limitations or the refinement of an estimate. The provision for income taxes includes any reserves with respect to uncertain tax positions that are considered appropriate, as well as the related net interest and penalties. The Company has been audited by the Internal Revenue Service through the year ended December 31, 2009. |
Intangible assets | Intangible assets – The Company purchased the Star brite® trade name and trademark in 1980 for $880,000. The cost of the trade name and trademark initially were amortized on a straight-line basis over an estimated useful life of 40 years. Effective January 1, 2002 and in accordance with ASC Topic 350, "Intangibles – Goodwill and Other," the Company determined that these intangible assets have indefinite lives and therefore, the Company no longer recognizes amortization expense. In addition, the Company’s wholly- owned subsidiary, OdorStar Technology, LLC, owns patents relating to a device for producing chlorine dioxide (ClO2), which is incorporated in Company's disinfectant, sanitizer and deodorizer products. The Company amortizes these patents over their remaining life on a straight line basis. The Company amortized approximately $51,000 for each of the years ended December 31, 2015 and 2014. On August 6, 2013, the Company purchased for $160,000 royalty rights (previously owned by an unaffiliated company that owned the patents ultimately acquired by OdorStar) relating to sales of products encompassing OdorStar's patented technology. The Company is amortizing the royalty rights over their remaining life on a straight line basis, and amortized approximately $18,000 for each of the years ended December 31, 2015 and 2014, respectively. On September 16, 2014, the Company paid its former OdorStar joint venture partner $150,000 and released the former joint venture partner from $305,905 in debt in exchange for the former joint venture partner's membership interest in OdorStar and all rights to the trade name Performacide®. The Company capitalized $244,580 in relation to the Performacide® trade name. The Company has determined that the Performacide® trade name has an indefinite life and, therefore, it is not being amortized. See Note 4 – OdorStar . The Company evaluates trademarks and trade names (all of which are indefinite-lived intangible assets) for impairment every year and at other times when an event occurs or circumstances change such that it is reasonably possible that an impairment may exist. The Company evaluates royalty rights and patents for impairment when an event occurs or circumstances change such that it is reasonably possible that an impairment may exist. |
Foreign currency adjustments | Foreign currency adjustments |
Earnings per share | Earnings per share |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventories [Abstract] | |
Summary of composition of inventories | 2015 2014 Raw materials $ 3,749,702 $ 3,365,093 Finished goods 4,445,130 5,021,536 Inventories, gross 8,194,832 8,386,629 Inventory reserves (279,882 ) (277,296 ) Inventories, net $ 7,914,950 $ 8,109,333 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Summary of property, plant and equipment | Estimated Useful Life 2015 2014 Land $ 278,325 $ 278,325 Building and Improvements 30 years 4,652,669 4,648,089 Manufacturing and warehouse equipment 6-20 years 9,072,162 8,486,397 Office equipment and furniture 3-5 years 1,293,609 1,044,605 Construction in process 215,155 64,038 Leasehold improvements 10-15 years 544,146 436,659 Vehicles 3 years 42,283 131,828 Property, plant and equipment, gross 16,098,349 15,089,941 Less accumulated depreciation (10,741,961 ) (9,917,059 ) Property, plant and equipment, net $ 5,356,388 $ 5,172,882 |
Accrued Expenses Payable (Table
Accrued Expenses Payable (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Expenses Payable [Abstract] | |
Summary of accrued expenses payable | 2015 2014 Accrued customer promotions $ 491,378 $ 369,238 Accrued payroll, commissions, and benefits 269,380 255,880 Other 337,963 490,396 Total accrued expenses payable $ 1,098,721 $ 1,115,514 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Revolving Line of Credit and Long-term Debt [Abstract] | |
Summary of company's long term debt | Current Portion Long-term Portion 2015 2014 2015 2014 Term loan $ 432,601 $ 417,577 $ 259,503 $ 692,104 Capitalized equipment leases 18,547 8,081 69,315 -- Total long-term debt $ 451,148 $ 425,658 $ 328,818 $ 692,104 |
Summary of principal payments under Company's long term obligations | Year ending December 31, 2016 $ 451,148 2017 278,392 2018 19,238 2019 19,593 2020 11,595 Total $ 779,966 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes [Abstract] | |
Summary of provision for income taxes | 2015 2014 Federal – current $ 136,479 $ 961,573 Federal – deferred 101,290 (37,242 ) State – current 1,842 24,949 State – deferred 3,065 (406 ) Total provision for income taxes $ 242,676 $ 948,874 |
Summary of reconciliation of the provision for income taxes at the statutory rate to the reported provision for income taxes | 2015 % 2014 % Income Tax computed at statutory rate $ 239,146 34.0 % $ 1,013,133 34.0 % State tax, net of federal benefit 889 0.1 % 16,300 0.5 % Loss attributable to noncontrolling interest --- 0.0 % 5,831 0.2 % Share based compensation (2,881 ) (0.4 )% (738 ) 0.0 % Other, permanent adjustments 6,079 0.9 % (79,733 ) -2.7 % Tax credits and prior year tax adj. (557 ) -0.1 % (5,919 ) -0.2 % Provision for income taxes $ 242,676 34.5 % $ 948,874 31.8 % |
Summary of deferred tax asset and liability | 2015 2014 Deferred taxes – current Reserves for trade accounts receivable and inventories $ 125,335 $ 123,360 Total deferred tax asset current $ 125,335 $ 123,360 Deferred taxes - non-current Depreciation of property and equipment $ (365,012 ) $ (258,682 ) Total deferred tax liability non-current $ (365,012 ) $ (258,682 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies [Abstract] | |
Schedule of minimum future rentals on the Company's non-cancelable operating leases | 12 month period ending December 31, 2016 $ 96,064 2017 97,985 2018 99,945 2019 101,944 2020 103,983 Thereafter 324,593 Total $ 824,514 |
Stock Options and Awards (Table
Stock Options and Awards (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stock options and awards [Abstract] | |
Schedule of options outstanding and granted under stock option plans | At December 31, 2015: Plan Date Options Outstanding Exercisable Exercise Price Expiration Weighted Average 2002 NQ 4/3/06 30,000 30,000 $ 1.08 4/2/16 0.3 2002 NQ 12/17/07 40,000 40,000 1.32 12/16/17 2.0 2008 NQ 1/11/09 40,000 40,000 0.69 1/10/19 3.1 2008 NQ 4/26/10 20,000 20,000 2.07 4/25/20 4.4 130,000 130,000 $ 1.19 2.3 At December 31, 2014: Plan Date Options Outstanding Exercisable Exercise Price Expiration Weighted Average 2002 NQ 4/3/06 40,000 40,000 $ 1.08 4/2/16 1.3 2002 NQ 12/17/07 40,000 40,000 1.32 12/16/17 3.0 2008 NQ 1/11/09 40,000 40,000 0.69 1/10/19 4.1 2008 NQ 4/26/10 20,000 20,000 2.07 4/25/20 5.4 140,000 140,000 $ 1.18 3.2 |
Schedule of information relating to stock option transactions | 2015 2014 Weighted Weighted Average Average Exercise Exercise Shares Price Shares Price Options outstanding beginning of the year 140,000 $ 1.18 170,000 $ 1.23 Options exercised (10,000 ) 1.08 (30,000 ) 1.46 Totals 130,000 $ 1.19 140,000 $ 1.18 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Summary of computation of basic and diluted earnings per common share | Year Ended 2015 2014 Earnings per common share –Basic Net income attributable to OBCI $ 460,694 $ 2,048,077 Weighted average number of common shares outstanding 8,940,593 8,834,951 Earnings per common share – Basic $ 0.05 $ 0.23 Earnings per common share – Diluted Net income attributable to OBCI $ 460,694 $ 2,048,077 Weighted average number of common shares outstanding 8,940,593 8,834,951 Dilutive effect of employee stock-based awards 86,513 111,251 Weighted average number of common shares outstanding - assuming dilution 9,027,106 8,946,202 Earnings per common share - Diluted $ 0.05 $ 0.23 |
Organization and Summary of S33
Organization and Summary of Significant Accounting Policies (Details) | Aug. 06, 2013USD ($) | Sep. 16, 2014USD ($) | Dec. 31, 2015USD ($)Customers | Dec. 31, 2014USD ($)Customers | Dec. 31, 1980USD ($) |
Summary of accounting policies (Textual) | |||||
Trade accounts receivable, allowance for doubtful accounts | $ 78,000 | $ 76,000 | |||
Bad debt expense | 3,000 | 0 | |||
Shipping and handling costs | 1,367,000 | 1,348,000 | |||
Advertising and promotion expense | 3,011,000 | 2,566,000 | |||
Research and development costs | $ 78,000 | $ 45,000 | |||
Percentage of consolidated net revenues from the Company's top five unaffiliated customers | 49.00% | 47.00% | |||
Percentage of consolidated accounts receivable from the Company's top five unaffiliated customers | 39.40% | 36.20% | |||
Number of top unaffiliated customers | Customers | 5 | 5 | |||
Purchase of royalty rights | $ 160,000 | ||||
Amortization of royalty rights | $ 18,000 | $ 18,000 | |||
Capitalized costs trade name costs | $ 244,580 | ||||
Cash paid for acquisition of joint venture partner's interest in OdorStar | 150,000 | ||||
Amounts due from joint venture partner released as part of acquisition of joint venture partner's interest in OdorStar | 305,905 | ||||
Loss attributable to noncontrolling interests | 17,149 | ||||
Depreciation expense | $ 847,000 | 774,000 | |||
Star brite trade name and trademark [Member] | |||||
Summary of accounting policies (Textual) | |||||
Indefinite-lived intangible assets, acquired during period | $ 880,000 | ||||
Amortization of acquired intangible assets | $ 51,000 | $ 51,000 | |||
Indefinite lived intangible asset, Description | The cost of the trade name and trademark initially were amortized on a straight-line basis over an estimated useful life of 40 years. Effective January 1, 2002 and in accordance with ASC Topic 350, "Intangibles Goodwill and Other," the Company determined that these intangible assets have indefinite lives and therefore, the Company no longer recognizes amortization expense. | ||||
Indefinite lived intangible asset former amortization period | 40 years |
Inventories (Details)
Inventories (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Summary of composition of inventories | ||
Raw materials | $ 3,749,702 | $ 3,365,093 |
Finished goods | 4,445,130 | 5,021,536 |
Inventories, gross | 8,194,832 | 8,386,629 |
Inventory reserves | (279,882) | (277,296) |
Inventories, net | $ 7,914,950 | $ 8,109,333 |
Inventories (Details Textual)
Inventories (Details Textual) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Inventories (Textual) | ||
Inventories managed at the customer's warehouses | $ 543,000 | $ 493,000 |
Property, Plant and Equipment36
Property, Plant and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of property, plant and equipment | ||
Land | $ 278,325 | $ 278,325 |
Building and Improvements | 4,652,669 | 4,648,089 |
Manufacturing and warehouse equipment | 9,072,162 | 8,486,397 |
Office equipment and furniture | 1,293,609 | 1,044,605 |
Construction in process | 215,155 | 64,038 |
Leasehold improvements | 544,146 | 436,659 |
Vehicles | 42,283 | 131,828 |
Property, plant and equipment, gross | 16,098,349 | 15,089,941 |
Less accumulated depreciation | (10,741,961) | (9,917,059) |
Property, plant and equipment, net | $ 5,356,388 | $ 5,172,882 |
Building and Improvements [Member] | ||
Summary of property, plant and equipment | ||
Estimated Useful Life | 30 years | |
Manufacturing and warehouse equipment [Member] | Minimum [Member] | ||
Summary of property, plant and equipment | ||
Estimated Useful Life | 6 years | |
Manufacturing and warehouse equipment [Member] | Maximum [Member] | ||
Summary of property, plant and equipment | ||
Estimated Useful Life | 20 years | |
Office equipment and furniture [Member] | Minimum [Member] | ||
Summary of property, plant and equipment | ||
Estimated Useful Life | 3 years | |
Office equipment and furniture [Member] | Maximum [Member] | ||
Summary of property, plant and equipment | ||
Estimated Useful Life | 5 years | |
Leasehold improvements [Member] | Minimum [Member] | ||
Summary of property, plant and equipment | ||
Estimated Useful Life | 10 years | |
Leasehold improvements [Member] | Maximum [Member] | ||
Summary of property, plant and equipment | ||
Estimated Useful Life | 15 years | |
Vehicles [Member] | ||
Summary of property, plant and equipment | ||
Estimated Useful Life | 3 years |
OdorStar (Details)
OdorStar (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Odorstar (Textual) | ||
Cash paid for acquisition of joint venture partner's interest in OdorStar | $ 150,000 | |
Amounts due from joint venture partner released as part of acquisition of joint venture partner's interest in OdorStar | 305,905 | |
Period prior to BBL Distributors, LLC acquisition [Member] | ||
Odorstar (Textual) | ||
OdorStar operating losses included in consolidated financial statements | 34,000 | |
OdorStar [Member] | ||
Odorstar (Textual) | ||
OdorStar operating losses included in consolidated financial statements | $ 130,000 |
Revolving Line of Credit (Detai
Revolving Line of Credit (Details) - USD ($) $ in Millions | Aug. 04, 2014 | Dec. 31, 2015 |
Revolving line of credit (Textual) | ||
Term of revolving line of credit | The Company may borrow up to the lesser of (i) $6 million or (ii) a borrowing base equal to 80% of eligible accounts receivable (as defined in the Business Loan Agreement) plus 50% of eligible inventory (as defined in the Business Loan Agreement). | |
Maximum borrowing capacity of the company | $ 6 | |
Percentage of eligible accounts receivables as part of borrowing base | 80.00% | |
Percentage of eligible inventory as part of the borrowing base | 50.00% | |
Description of interest on the revolving line of credit | 30 day LIBOR rate plus 1.65% per annum | |
Minimum debt service coverage ratio to qualify for LIBOR plus 1.74% | 2.0 to 1 | |
Alternate interest rate condition if it doesn't satisfy the debt coverage ratio | 30 day LIBOR rate plus 2.65% per annum | |
Due date of outstanding principal and interest borrowed under revolving line of credit | Jul. 6, 2016 | |
Financial covenants under credit agreement | A minimum debt service coverage ratio of 1.75 to 1.00, tested on a trailing twelve month basis, and a maximum debt to capitalization ratio (generally, funded debt divided by the sum of total net worth and funded debt) of 0.75 to 1, tested quarterly. | |
Debt service coverage ratio | 1.75 to 1.00 | 3.0 to 1 |
Debt capitalization ratio | 0.75 to 1 | .04 to 1 |
Ownership requirement of majority shareholder to prevent default | The line of credit is subject to several events of default, including a decline in the majority shareholder's ownership below 50% of all outstanding shares. |
Accrued Expenses Payable (Detai
Accrued Expenses Payable (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Summary of accrued expenses payable | ||
Accrued customer promotions | $ 491,378 | $ 369,238 |
Accrued payroll, commissions, and benefits | 269,380 | 255,880 |
Other | 337,963 | 490,396 |
Total accrued expenses payable | $ 1,098,721 | $ 1,115,514 |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Summary of long term debt | ||
Total long term debt, Current Portion | $ 451,148 | $ 425,658 |
Total long term debt, Long Term Portion | 328,818 | 692,104 |
Term loan [Member] | ||
Summary of long term debt | ||
Term loan, Current Portion | 432,601 | 417,577 |
Term loan, Long-term Portion | 259,503 | 692,104 |
Capitalized equipment leases [Member] | ||
Summary of long term debt | ||
Capitalized equipment leases, Current Portion | 18,547 | $ 8,081 |
Capitalized equipment leases, Long-term Portion | $ 69,315 |
Long-term Debt (Details 1)
Long-term Debt (Details 1) | Dec. 31, 2015USD ($) |
Summary of principal payments under Company's long term obligations | |
2,016 | $ 451,148 |
2,017 | 278,392 |
2,018 | 19,238 |
2,019 | 19,593 |
2,020 | 11,595 |
Total | $ 779,966 |
Long-term Debt (Details Textual
Long-term Debt (Details Textual) | Jul. 06, 2011USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Long Term Debt (Textual) | |||
Term loan | $ 692,000 | ||
Aggregate capital lease | $ 88,000 | $ 8,000 | |
Maturity period for capital lease | Through 2,020 | ||
Minimum [Member] | |||
Long Term Debt (Textual) | |||
Percentage of interest rates | 2.00% | ||
Debt service coverage ratio | 1 | ||
Maximum [Member] | |||
Long Term Debt (Textual) | |||
Percentage of interest rates | 14.00% | ||
Debt service coverage ratio | 3 | ||
REFCO [Member] | |||
Long Term Debt (Textual) | |||
Term loan | $ 2,430,000 | $ 37,511 | |
Interest rate | 3.54% | ||
Term loan maturity date | Jul. 6, 2017 | ||
Term loan, Description | Term loan with a fixed interest rate of 3.54% per annum. Principal and interest on the term loan are payable in equal monthly installments of $37,511 through July 6, 2017, the date the term loan matures. In the event the Company's debt service coverage ratio falls to or below 2.0 to 1, interest on the term loan will increase to 4.55% per annum. The Company's debt service coverage ratio exceeded 3.0 to 1 for the year ended December 31, 2015. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of provision for income taxes | ||
Federal - current | $ 136,479 | $ 961,573 |
Federal - deferred | 101,290 | (37,242) |
State - current | 1,842 | 24,949 |
State - deferred | 3,065 | (406) |
Total provision for income taxes | $ 242,676 | $ 948,874 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of reconciliation of the provision for income taxes at the statutory rate to the reported provision for income taxes | ||
Income Tax computed at statutory rate | $ 239,146 | $ 1,013,133 |
State tax, net of federal benefit | $ 889 | 16,300 |
Loss attributable to noncontrolling interest | 5,831 | |
Share based compensation | $ (2,881) | (738) |
Other, permanent adjustments | 6,079 | (79,733) |
Tax credits and prior year tax adj. | (557) | (5,919) |
Provision for income taxes | $ 242,676 | $ 948,874 |
Income Tax computed at statutory rate, percentage | 34.00% | 34.00% |
State tax, net of federal benefit, percentage | 0.10% | 0.50% |
Loss attributable to noncontrolling interest, percentage | 0.00% | 0.20% |
Share based compensation, percentage | (0.40%) | 0.00% |
Other, permanent adjustments, percentage | 0.90% | (2.70%) |
Tax credits and prior year tax adj., percentage | (0.10%) | (0.20%) |
Provision for income taxes, percentage | 34.50% | 31.80% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred taxes-current | ||
Reserves for trade accounts receivable and inventories | $ 125,335 | $ 123,360 |
Total deferred tax asset current | 125,335 | 123,360 |
Deferred taxes - non-current | ||
Depreciation of property and equipment | (365,012) | (258,682) |
Total deferred tax liability non-current | $ (365,012) | $ (258,682) |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transactions (Textual) | ||
Sales to the affiliated companies | $ 2,075,000 | $ 1,956,000 |
Administrative fees | 527,000 | 478,000 |
Accounts receivable from the affiliated companies | 1,051,091 | 715,034 |
Amount paid to entity for services | 42,000 | 42,000 |
Insurance premiums paid | 925,000 | 811,000 |
Advance for the production of television commercials | $ 40,000 | |
Prepaid advertising | $ 40,000 |
Commitments and Contingencies47
Commitments and Contingencies (Details) | Dec. 31, 2015USD ($) |
Schedule of minimum future rentals on the Company's non-cancelable operating leases | |
2,016 | $ 96,064 |
2,017 | 97,985 |
2,018 | 99,945 |
2,019 | 101,944 |
2,020 | 103,983 |
Thereafter | 324,593 |
Total | $ 824,514 |
Commitments and Contingencies48
Commitments and Contingencies (Details Textual) - Fort Lauderdale Florida Facility [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments (Textual) | ||
Extended expiration date of lease | Dec. 31, 2023 | |
Minimum base rent | $ 94,800 | |
Maximum annual percentage increase in base rent | 2.00% | |
Period to review term of lease | 3 years | |
Rent expense under the lease | $ 98,000 | $ 97,000 |
Stock Options and Awards (Detai
Stock Options and Awards (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of options outstanding and granted under stock option plans | ||
Options Outstanding | 130,000 | 140,000 |
Exercisable options | 130,000 | 140,000 |
Exercise Price | $ 1.19 | $ 1.18 |
Weighted Average Remaining life | 2 years 3 months 18 days | 3 years 2 months 12 days |
2002 NQ [Member] | ||
Schedule of options outstanding and granted under stock option plans | ||
Date granted | Apr. 3, 2006 | Apr. 3, 2006 |
Options Outstanding | 30,000 | 40,000 |
Exercisable options | 30,000 | 40,000 |
Exercise Price | $ 1.08 | $ 1.08 |
Expiration date | Apr. 2, 2016 | Apr. 2, 2016 |
Weighted Average Remaining life | 3 months 18 days | 1 year 3 months 18 days |
2002 NQ 1 [Member] | ||
Schedule of options outstanding and granted under stock option plans | ||
Date granted | Dec. 17, 2007 | Dec. 17, 2007 |
Options Outstanding | 40,000 | 40,000 |
Exercisable options | 40,000 | 40,000 |
Exercise Price | $ 1.32 | $ 1.32 |
Expiration date | Dec. 16, 2017 | Dec. 16, 2017 |
Weighted Average Remaining life | 2 years | 3 years |
2008 NQ [Member] | ||
Schedule of options outstanding and granted under stock option plans | ||
Date granted | Jan. 11, 2009 | Jan. 11, 2009 |
Options Outstanding | 40,000 | 40,000 |
Exercisable options | 40,000 | 40,000 |
Exercise Price | $ 0.69 | $ 0.69 |
Expiration date | Jan. 10, 2019 | Jan. 10, 2019 |
Weighted Average Remaining life | 3 years 1 month 6 days | 4 years 1 month 6 days |
2008 NQ 1 [Member] | ||
Schedule of options outstanding and granted under stock option plans | ||
Date granted | Apr. 26, 2010 | Apr. 26, 2010 |
Options Outstanding | 20,000 | 20,000 |
Exercisable options | 20,000 | 20,000 |
Exercise Price | $ 2.07 | $ 2.07 |
Expiration date | Apr. 25, 2020 | Apr. 25, 2020 |
Weighted Average Remaining life | 4 years 4 months 24 days | 5 years 4 months 24 days |
Stock Options and Awards (Det50
Stock Options and Awards (Details 1) - Stock Option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of information relating to stock option transactions | ||
Options outstanding beginning of the year | 140,000 | 170,000 |
Options exercised | (10,000) | (30,000) |
Options outstanding end of the year | 130,000 | 140,000 |
Options outstanding beginning of the year, Weighted Average Exercise Price | $ 1.18 | $ 1.23 |
Options exercised, Weighted Average Exercise Price | 1.08 | 1.46 |
Options outstanding ending of the year, Weighted Average Exercise Price | $ 1.19 | $ 1.18 |
Stock Options and Awards (Det51
Stock Options and Awards (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Stock options and awards (Textual) | ||
Stock awards granted | 65,500 | 128,000 |
Common stock available for future issuance under Equity Compensation Plan | 564,500 | |
Stock based compensation attributable to stock award | $ 162,000 | $ 356,000 |
Number of shares withhold in connection with net exercise feature of options | 2,156 | 14,633 |
Shares issued to option holders shares | 7,844 | 130,367 |
Term of previously non-qualified options granted | 10 years | |
Termination period of previously non-qualified options | Apr. 25, 2020 | |
Number of shares authorized under equity compensation plan | 630,000 | |
Paid in Capital | $ 49,600 |
Major Customers (Details)
Major Customers (Details) - Customers | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Major customers (Textual) | ||
Percentage of consolidated net revenues by customers with sales in excess of 10% of consolidated net revenues | 38.20% | 36.00% |
Number of customers with sales in excess of 10% of consolidated net revenues | 2 | 2 |
Percentage of consolidated net revenues from the Company's top five unaffiliated customers | 49.00% | 47.00% |
Percentage of consolidated accounts receivable from the Company's top five unaffiliated customers | 39.40% | 36.20% |
Number of top unaffiliated customers | 5 | 5 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings per common share - Basic | ||
Net income attributable to OBCI | $ 460,694 | $ 2,048,077 |
Weighted average number of common shares outstanding | 8,940,593 | 8,834,951 |
Earnings per common share - basic | $ 0.05 | $ 0.23 |
Earnings per common share - Diluted | ||
Net income attributable to OBCI | $ 460,694 | $ 2,048,077 |
Weighted average number of common shares outstanding | 8,940,593 | 8,834,951 |
Dilutive effect of employee stock-based awards | 86,513 | 111,251 |
Weighted average number of common shares outstanding - assuming dilution | 9,027,106 | 8,946,202 |
Earnings per common share - diluted | $ 0.05 | $ 0.23 |
Earnings Per Share (Details Tex
Earnings Per Share (Details Textual) - shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share (Textual) | ||
Anti-dilutive stock options outstanding | 0 | 0 |
Special Cash Dividend (Details)
Special Cash Dividend (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Special Cash Dividend (Textual) | ||
Dividends paid to common shareholders | $ 440,016 | |
Dividends declared per common share | $ 0.05 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | 1 Months Ended |
Mar. 25, 2016$ / shares | |
Subsequent Events (Textual) | |
Common stock dividends declared | $ 0.06 |
Paid date of declared dividend | Apr. 26, 2016 |
Record date of declared dividend | Apr. 12, 2016 |