Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 13, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | OCEAN BIO CHEM INC | |
Entity Central Index Key | 350,737 | |
Trading Symbol | OBCI | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 9,258,580 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash | $ 922,985 | $ 2,418,484 |
Trade accounts receivable less allowances of approximately $152,000 and $79,000, respectively | 9,071,740 | 4,963,895 |
Receivables due from affiliated companies | 887,681 | 1,584,365 |
Restricted cash | 2,765,346 | 2,747,360 |
Inventories, net | 10,133,830 | 9,074,426 |
Prepaid expenses and other current assets | 1,118,583 | 1,013,213 |
Total Current Assets | 24,900,165 | 21,801,743 |
Property, plant and equipment, net | 9,730,198 | 9,291,667 |
Intangible assets, net | 862,268 | 897,408 |
Total Assets | 35,492,631 | 31,990,818 |
Current Liabilities: | ||
Current portion of long-term debt, net | 242,344 | 240,017 |
Revolving line of credit | 1,100,000 | |
Accounts payable - trade | 2,545,561 | 1,807,120 |
Accrued expenses payable | 1,369,855 | 812,062 |
Total Current Liabilities | 5,257,760 | 2,859,199 |
Deferred tax liability | 280,813 | 153,895 |
Long-term debt, less current portion and debt issuance costs | 3,958,645 | 4,081,793 |
Total Liabilities | 9,497,218 | 7,094,887 |
Commitments and contingencies (Note 9) | ||
Shareholders' Equity: | ||
Common stock - $.01 par value, 12,000,000 shares authorized; 9,258,580 and 9,254,580 shares issued and outstanding | 92,586 | 92,546 |
Additional paid in capital | 9,945,464 | 9,931,634 |
Accumulated other comprehensive loss | (291,895) | (288,051) |
Retained earnings | 16,249,258 | 15,159,802 |
Total Shareholders' Equity | 25,995,413 | 24,895,931 |
Total Liabilities and Shareholders' Equity | $ 35,492,631 | $ 31,990,818 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Consolidated Balance Sheets [Abstract] | ||
Trade accounts receivable less allowances | $ 152,000 | $ 79,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 12,000,000 | 12,000,000 |
Common stock, shares issued | 9,258,580 | 9,254,580 |
Common stock, shares outstanding | 9,258,580 | 9,254,580 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Condensed Consolidated Statements of Operations [Abstract] | ||||
Net sales | $ 11,398,539 | $ 9,622,442 | $ 19,782,752 | $ 17,842,996 |
Cost of goods sold | 6,744,504 | 5,565,852 | 12,150,621 | 10,809,695 |
Gross profit | 4,654,035 | 4,056,590 | 7,632,131 | 7,033,301 |
Operating Expenses: | ||||
Advertising and promotion | 893,744 | 672,335 | 1,645,144 | 1,362,687 |
Selling and administrative | 2,289,070 | 1,983,838 | 3,843,847 | 3,527,861 |
Total operating expenses | 3,182,814 | 2,656,173 | 5,488,991 | 4,890,548 |
Operating income | 1,471,221 | 1,400,417 | 2,143,140 | 2,142,753 |
Other expense | ||||
Interest, net (expense) | (33,670) | (942) | (26,284) | (2,890) |
Income before income taxes | 1,437,551 | 1,399,475 | 2,116,856 | 2,139,863 |
Provision for income taxes | (316,200) | (446,963) | (472,125) | (683,427) |
Net income | $ 1,121,351 | $ 952,512 | $ 1,644,731 | $ 1,456,436 |
Earnings per common share - basic and diluted | $ 0.12 | $ 0.1 | $ 0.18 | $ 0.16 |
Dividends declared per common share | $ 0 | $ 0.06 | $ 0.06 | $ 0.06 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Condensed Consolidated Statements of Comprehensive Income [Abstract] | ||||
Net Income | $ 1,121,351 | $ 952,512 | $ 1,644,731 | $ 1,456,436 |
Foreign currency translation adjustment | (378) | 759 | (3,844) | (800) |
Comprehensive income | $ 1,120,973 | $ 953,271 | $ 1,640,887 | $ 1,455,636 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 1,644,731 | $ 1,456,436 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 522,513 | 487,442 |
Deferred income taxes | 126,918 | 30,019 |
Stock based compensation | 13,870 | 17,360 |
Provision for bad debts | 74,872 | 26,801 |
Other operating non-cash items | 246 | 4,612 |
Changes in assets and liabilities: | ||
Trade accounts receivable | (4,182,717) | (1,336,219) |
Receivables due from affiliated companies | 696,684 | (120,743) |
Inventories | (1,063,096) | (1,614,440) |
Prepaid expenses and other current assets | (105,370) | 281,382 |
Accounts payable - trade | 738,441 | 717,835 |
Income taxes payable | 25,108 | |
Accrued expenses payable | 557,793 | 142,422 |
Net cash (used in) provided by operating activities | (975,115) | 118,015 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (916,096) | (2,533,577) |
Net cash used in investing activities | (916,096) | (2,533,577) |
Cash flows from financing activities: | ||
Payments on long-term debt | (130,629) | (231,505) |
Borrowings on revolving line of credit | 1,100,000 | |
Dividends paid to common shareholders | (555,275) | (549,255) |
Net cash provided by (used in) financing activities | 414,096 | (780,760) |
Effect of exchange rate on cash | (398) | (6,053) |
Net decrease in cash and restricted cash | (1,477,513) | (3,202,375) |
Cash and restricted cash at beginning of period | 5,165,844 | 4,070,445 |
Cash and restricted cash at end of period | 3,688,331 | 868,070 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest during period | 35,987 | 3,546 |
Cash paid for income taxes during period | 364,000 | 628,300 |
Cash | 922,985 | 868,070 |
Restricted cash | 2,765,346 | |
Total cash and restricted cash | $ 3,688,331 | $ 868,070 |
Summary of Accounting Policies
Summary of Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Accounting Policies [Abstract] | |
SUMMARY OF ACCOUNTING POLICIES | 1. SUMMARY OF ACCOUNTING POLICIES Interim reporting The accompanying unaudited condensed consolidated financial statements include the accounts of Ocean Bio-Chem, Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain prior period data have been reclassified to conform to the current period presentation. Unless the context indicates otherwise, the term “Company” refers to Ocean Bio-Chem, Inc. and its subsidiaries. The unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The financial information furnished herein reflects all adjustments, consisting of normal recurring items that, in the opinion of management, are necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018. The information included in this Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Use of estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2018 | |
Recent Accounting Pronouncements [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | 2. RECENT ACCOUNTING PRONOUNCEMENTS Accounting Guidance Adopted by the Company In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09, which has been modified on several occasions, provides new guidance designed to enhance the comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. The core principle of the new guidance is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The new guidance also requires disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the new guidance effective January 1, 2018, using the full retrospective method, under which the Company applies the new guidance to each comparative period presented. Under the new guidance, the Company’s performance obligation to its customers under agreements currently in force is satisfied when the goods are shipped or picked up by the customer and title of the goods is transferred (generally upon such shipment or pick up); with regard to a customer for which the Company’s inventory is held at the customer’s warehouses, the Company’s performance obligation is deemed satisfied when the Company is notified of sales by the customer. While the timing of the Company’s revenue recognition did not change, certain allowances provided by the Company to customers, primarily for cooperative advertising, are now considered a reduction of net sales instead of an advertising and promotion expense. This reclassification did not affect net income. In November 2016, the FASB issued ASU 2016-18, which requires that a statement of cash flows explain the change during the reporting period in the total of cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents. The new guidance also requires disclosure of such amounts in the statements of cash flows or in the financial statement footnotes if restricted cash and restricted cash equivalents are presented in separate line items in the balance sheet. The Company adopted this guidance effective January 1, 2018. In accordance with the new guidance, the Company includes additional disclosures regarding its cash and restricted cash amounts in its statement of cash flows for each comparative period presented. Accounting Guidance Not Yet Adopted by the Company In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Under this new guidance, lessees (including lessees under leases classified as finance leases, which are to be classified based on criteria similar to that applicable to capital leases under current guidance, and leases classified as operating leases) will recognize a right-to-use asset and a lease liability on the balance sheet, initially measured as the present value of lease payments under the lease. Under current guidance, operating leases are not recognized on the balance sheet. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements; the guidance provides certain practical expedients. The Company is currently evaluating this guidance to determine its impact on the Company’s financial statements. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other,” which simplifies the quantitative test for goodwill impairment. Under current guidance, if a reporting unit’s carrying value exceeds its fair value, the entity must determine the implied value of goodwill. This determination is made by deducting the fair value of a reporting unit’s identifiable assets and liabilities from the fair value of the reporting unit as a whole as if the reporting unit had just been acquired. Under the new guidance, a determination of the implied value of goodwill will no longer be required; a goodwill impairment will be equal to the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this new standard will have on the Company’s financial statements. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses,” which replaces the “incurred loss” model under current GAAP with a forward-looking “expected loss” model, principally in connection with financial assets subject to credit losses. Under current GAAP, an entity reflects credit losses on financial assets measured on an amortized cost basis only when it is probable that losses have been incurred, generally considering only past events and current conditions in making these determinations. The guidance under ASU 2016-13 prospectively replaces this approach with a forward-looking methodology that reflects the expected credit losses over the lives of financial assets, beginning when such assets are first acquired. Under the expected loss model, credit losses will be measured based not only on past events and current conditions, but also on reasonable and supportable forecasts that affect the collectability of financial assets. The guidance also expands disclosure requirements. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted as of January 1, 2019. The Company is currently evaluating the impact the adoption of this new standard will have on the Company’s financial statement s. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2018 | |
Inventories [Abstract] | |
INVENTORIES | 3. INVENTORIES The Company’s inventories at June 30, 2018 and December 31, 2017 consisted of the following: June 30, December 31, Raw materials $ 4,546,710 $ 3,994,624 Finished goods 5,865,107 5,354,097 Inventories, gross 10,411,817 9,348,721 Inventory reserves (277,987 ) (274,295 ) Inventories, net $ 10,133,830 $ 9,074,426 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. Under the program, Company inventory is held at the customer’s warehouses. The Company manages the inventory levels at the warehouses and recognizes revenue as the products are sold by the customer. The inventories managed at the customer’s warehouses, which are included in inventories, net, amounted to approximately $484,000 and $494,000 at June 30, 2018 and December 31, 2017, respectively. |
Property, Plant & Equipment
Property, Plant & Equipment | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant & Equipment [Abstract] | |
PROPERTY, PLANT & EQUIPMENT | 4. PROPERTY, PLANT & EQUIPMENT The Company’s property, plant and equipment at June 30, 2018 and December 31, 2017 consisted of the following: Estimated June 30, December 31, Land $ 278,325 $ 278,325 Building and Improvements 30 years 9,315,217 4,673,409 Manufacturing and warehouse equipment 6-20 years 10,257,069 9,616,086 Office equipment and furniture 3-5 years 1,770,757 1,367,244 Leasehold improvements 10-15 years 571,483 567,898 Vehicles 3 years 10,020 10,020 Construction in process 428,891 5,197,780 Property, plant and equipment, gross 22,631,762 21,710,762 Less accumulated depreciation (12,901,564 ) (12,419,095 ) Property, plant and equipment, net $ 9,730,198 $ 9,291,667 Construction in progress at June 30, 2018 and December 31, 2017 includes $350,202 and $5,087,897, respectively, relating to the expansion of the manufacturing, warehouse and distribution facilities of the Company’s wholly-owned subsidiary, KINPAK Inc. (“Kinpak”), in Montgomery, Alabama. Depreciation expense totaled $261,055 (of which $219,516 is included in cost of goods sold and $41,539 is included in selling and administrative expenses) and $223,275 (of which $174,022 is included in cost of goods sold and $49,253 is included in selling and administrative expenses) for the three months ended June 30, 2018 and 2017, respectively. Depreciation expense totaled $482,469 (of which $397,171 is included in cost of goods sold and $85,298 is included in selling and administrative expenses) and $452,301 (of which $353,370 is included in cost of goods sold and $98,931 is included in selling and administrative expenses) for the six months ended June 30, 2018 and 2017, respectively. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2018 | |
Intangible Assets [Abstract] | |
INTANGIBLE ASSETS | 5. INTANGIBLE ASSETS The Company’s intangible assets at June 30, 2018 and December 31, 2017 consisted of the following: June 30, 2018 Intangible Asset Cost Accumulated Net Patents $ 622,733 $ 413,804 $ 208,929 Trade names and trademarks 1,131,125 549,561 581,564 Royalty rights 160,000 88,225 71,775 Total intangible assets $ 1,913,858 $ 1,051,590 $ 862,268 December 31, 2017 Intangible Asset Cost Accumulated Net Patents $ 622,733 $ 387,636 $ 235,097 Trade names and trademarks 1,131,125 549,561 581,564 Royalty rights 160,000 79,253 80,747 Total intangible assets $ 1,913,858 $ 1,016,450 $ 897,408 At June 30, 2018 and December 31, 2017, the trade names and trademarks are considered indefinite-lived. The patents (the most significant of which (the “ClO 2 2 2 2 2 Amortization expense related to intangible assets was $17,570 ($13,084 attributable to the patents and $4,486 attributable to the royalty rights) for each of the three months ended June 30, 2018 and 2017, and $35,140 ($26,168 attributable to the patents and $8,972 attributable to the royalty rights) for each of the six months ended June 30, 2018 and 2017. |
Revolving Line of Credit
Revolving Line of Credit | 6 Months Ended |
Jun. 30, 2018 | |
Revolving Line of Credit [Abstract] | |
REVOLVING LINE OF CREDIT | 6. REVOLVING LINE OF CREDIT On August 31, 2017, the Company and Regions Bank entered into a Business Loan Agreement (the “Business Loan Agreement”), under which the Company was provided a revolving line of credit. Under the Business Loan Agreement, the Company may borrow up to the lesser of (i) $6,000,000 or (ii) a borrowing base equal to 85% of Eligible Accounts (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 one month LIBOR rate plus 1.5% per annum, computed on a 365/360 basis. Eligible Accounts do not include, among other things, accounts receivable from affiliated entities. 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 August 31, 2018, 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 and inventory . The Business Loan Agreement terminates on August 31, 2018. The Company is engaged in negotiations with its principal lending bank regarding its revolving credit facility, and expects to enter into an agreement with the bank for a renewal or replacement of its existing facility. However, the Company cannot assure that its negotiations will be successful. |
Long Term Debt
Long Term Debt | 6 Months Ended |
Jun. 30, 2018 | |
Long Term Debt [Abstract] | |
LONG TERM DEBT | 7. LONG TERM DEBT Industrial Development Bond Financing On September 26, 2017, Kinpak indirectly obtained a $4,500,000 loan from Regions Capital Advantage, Inc. (the “Lender”). The proceeds of the loan are being used principally to pay or reimburse costs of constructing an approximately 85,000 square foot addition to Kinpak’s manufacturing, warehouse and distribution facilities in Montgomery, Alabama, and costs of purchasing and installing associated machinery and equipment (the “Project”). The loan was funded by the Lender’s purchase of a $4,500,000 industrial development bond (the “Bond”) issued by The Industrial Development Board of the City of Montgomery, Alabama (the “IDB”). The Bond is a limited obligation of the IDB and is payable solely out of revenues and receipts derived from the leasing or sale of Kinpak’s facilities. In this regard, Kinpak is obligated to fund the IDB’s payment obligations by providing rental payments under a lease between the IDB and Kinpak (the “Lease”), under which Kinpak leases its facilities from the IDB. Under the Lease, prior to the maturity date of the Bond, Kinpak may repurchase the facilities for $1,000 if the Bond has been redeemed or fully paid. The Bond bears interest at the rate of 3.07% per annum, calculated on the basis of a 360-day year and the actual number of days elapsed (subject to increase to 6.07% per annum upon the occurrence of an event of default), and is payable in 118 monthly installments of $31,324 beginning on November 1, 2017 and ending on August 1, 2027, with a final principal and interest payment to be made on September 1, 2027 in the amount of $1,799,201. The Bond provides that the interest rate will be subject to adjustment if it is determined by the United States Treasury Department, the Internal Revenue Service, or a similar government entity that the interest on the Bond is includable in the gross income of the Lender for federal income tax purposes. Under the Lease, Kinpak is required to make rental payments for the account of the IDB to the Lender in such amounts and at such times as are necessary to enable the payment of all principal and interest due on the Bond and other charges, if any, payable in respect of the Bond. The Lease also provides that Kinpak may redeem the Bond, in whole or in part, by prepaying its rental payment obligations in an amount sufficient to effect the redemption. In addition, the Lease contains provisions relating to the Project, including limitations on utilization of Bond proceeds, deposit of unused proceeds into a custodial account (as described below) and investment of monies held in the custodial account. Payment of amounts due and payable under the Bond and other related agreements are guaranteed by the Company and its other consolidated subsidiaries. In connection with its guarantee, the Company is subject to certain covenants, including financial covenants that effectively are substantially the same as the financial covenants included in the Business Loan Agreement described in Note 6. Through June 30, 2018, of the $4,500,000 proceeds of the Bond sale, approximately $1,704,000 has been applied to reimburse Kinpak for Project expenditures and approximately $54,000 was paid directly to other parties for certain transaction costs. The remaining amount is held in a custodial account and may be drawn by Kinpak from time to time to fund additional expenditures related to the Project. Because the Lease contains limitations on the manner in which Kinpak may utilize funds held in the custodial account, such funds are classified as restricted cash on the Company’s balance sheets. The Company incurred debt issuance costs of $196,095 in connection with the financing. These costs are shown as a reduction of the debt balance and are being amortized in accordance with the effective interest method. Capital Lease Obligations At June 30, 2018 and December 31, 2017, the Company was obligated under capital lease agreements covering equipment utilized in the Company’s operations. The capital leases, aggregating approximately $39,000 and $50,000 at June 30, 2018 and December 31, 2017, respectively, mature on July 1, 2020 and carry an interest rate of 2%. The following table provides information regarding the Company’s long-term debt at June 30, 2018 and December 31, 2017: Current Portion Long Term Portion June 30, December 31, June 30, December 31, Obligations related to industrial development bond financing $ 244,150 $ 240,395 $ 4,099,036 $ 4,222,241 Capitalized equipment leases 17,810 19,238 21,437 31,188 Total principal of long term debt 261,960 259,633 4,120,473 4,253,429 Debt issuance costs (19,616 ) (19,616 ) (161,828 ) (171,636 ) Total long term debt $ 242,344 $ 240,017 $ 3,958,645 $ 4,081,793 Required principal payments under the Company’s long term obligations are set forth below: Twelve month period ending June 30, 2019 $ 261,960 2020 271,294 2021 261,464 2022 268,003 2023 276,465 Thereafter 3,043,247 Total $ 4,382,433 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 8. RELATED PARTY TRANSACTIONS During the three and six months ended June 30, 2018 and 2017, the Company sold products to companies affiliated with Peter G. Dornau, who is the Company’s 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 $369,000 and $539,000 during the three months ended June 30, 2018 and 2017, respectively, and approximately $1,189,000 and $1,286,000 for the six months ended June 30, 2018 and 2017, respectively. Fees for administrative services aggregated approximately $251,000 and $260,000 (including approximately $24,000 and $28,000, respectively, to reimburse the Company for business related expenditures that it made on behalf of the affiliated companies) during the three months ended June 30, 2018 and 2017, respectively. Fees for administrative services aggregated approximately $429,000 for each of the six month periods ended June 30, 2018 and 2017 (including approximately $53,000 and $49,000, respectively, to reimburse the Company for business related expenditures that it made on behalf of the affiliated companies). The Company had accounts receivable from the affiliated companies in connection with the product sales and administrative services aggregating approximately $888,000 and $1,584,000 at June 30, 2018 and December 31, 2017, respectively. An entity that is owned by the Company’s Chairman, President and Chief Executive Officer provides several services to the Company. Under this arrangement, the Company paid the entity $10,500 for research and development services for each of the three month periods ended June 30, 2018 and 2017, and $21,000 for such services during each of the six month periods ended June 30, 2018 and 2017. The research and development expenses are included in the statements of operations for the three and six months ended June 30, 2018 and 2017 as a selling and administrative expense. In addition, during the three months ended June 30, 2018 and 2017, the Company paid this entity $6,000 and $0, respectively, for providing charter boat services for marketing and entertainment of Company customers, and $10,500 and $45,000 for such services during the six months ended June 30, 2018 and 2017. The charter boat services are included in the statements of operations for the three and six months ended June 30, 2018 and 2017 as an advertising and promotion expense. During the three and six months ended June 30, 2018, the Company also paid this entity $21,000 for the production of television commercials, which will be expensed over a twelve month period ending on March 31, 2019. The Company leases office and warehouse facilities in Fort Lauderdale, Florida from an entity controlled by its Chairman, President and Chief Executive Officer. See Note 9 for a description of the lease terms. A director of the Company is Regional Executive Vice President of an insurance broker through which the Company sources most of its insurance needs. During the three months ended June 30, 2018 and 2017, the Company paid an aggregate of approximately $261,000 and $244,000, respectively, and during the six months ended June 30, 2018 and 2017, the Company paid an aggregate of approximately $449,000 and $439,000, respectively, in insurance premiums on policies obtained through the insurance broker. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 9. COMMITMENTS AND CONTINGENCIES The Company leases its executive offices and warehouse facilities in Fort Lauderdale, Florida from an entity controlled by Peter G. Dornau, the Company’s 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 $25,000 for each of the three months ended June 30, 2018 and 2017 and was approximately $49,000 for each of the six months ended June 30, 2018 and 2017. The Company also leased a 15,000 square foot warehouse in Montgomery, AL near its Kinpak manufacturing facility for the purpose of fabricating and assembling brushes used for cleaning boats, automobiles, and recreational vehicles. The Company paid monthly rent of $4,375 under the lease, which commenced on August 1, 2016 and expired on July 31, 2018. The Company has relocated the brush fabrication and assembly operations from the leased warehouse to Kinpak’s facilities, which are being expanded in connection with the Project. See Note 7 above. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 10. EARNINGS PER SHARE Basic earnings per share are calculated by dividing net income by the weighted average number of shares outstanding during the reporting period. Diluted earnings per share reflect additional dilution from potential common stock issuances 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. Three Months Ended Six Months Ended 2018 2017 2018 2017 Earnings per common share – Basic Net income $ 1,121,351 $ 952,512 $ 1,644,731 $ 1,456,436 Weighted average number of common shares outstanding 9,256,206 9,154,768 9,255,398 9,150,874 Earnings per common share – Basic $ 0.12 $ 0.10 $ 0.18 $ 0.16 Earnings per common share – Diluted Net income $ 1,121,351 $ 952,512 $ 1,644,731 $ 1,456,436 Weighted average number of common shares outstanding 9,256,206 9,154,768 9,255,398 9,150,874 Dilutive effect of employee stock-based awards 40,483 66,807 41,638 69,097 Weighted average number of common shares outstanding - Diluted 9,296,689 9,221,575 9,297,036 9,219,971 Earnings per common share – Diluted $ 0.12 $ 0.10 $ 0.18 $ 0.16 The Company had no stock options outstanding during each of the three and six month periods ended June 30, 2018 and 2017, respectively, that were antidilutive and therefore not included in the diluted earnings per common share calculation. |
Securities Authorized for Issua
Securities Authorized for Issuance under Equity Compensation Plans | 6 Months Ended |
Jun. 30, 2018 | |
Securities Authorized for Issuance Under Equity Compensation Plans [Abstract] | |
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS | 11. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS Stock compensation expense during the three and six months ended June 30, 2018 and 2017 was $13,870 and $17,360, respectively, all of which relates to the shares of Company common stock issued to the Company’s non-employee directors as part of their compensation for service on the Board of Directors. There is no unrecognized compensation expense related to stock The following table provides information regarding outstanding stock options, all of which were granted under the Company’s 2008 Non-Qualified Stock Option Plan. Date Granted Shares Underlying Options Outstanding Shares Underlying Exercisable Options Exercise Price Expiration Date Weighted Average Remaining 1/11/09 40,000 40,000 $ 0.69 1/10/19 0.5 4/26/10 20,000 20,000 $ 2.07 4/25/20 1.8 60,000 60,000 $ 1.15 1.0 |
Cash Dividends
Cash Dividends | 6 Months Ended |
Jun. 30, 2018 | |
Cash Dividends [Abstract] | |
CASH DIVIDENDS | 12. CASH DIVIDENDS On March 19, 2018, the Company’s Board of Directors declared a special cash dividend of $0.06 per common share payable on April 16, 2018 to all shareholders of record on April 2, 2018. There were 9,254,580 shares of common stock outstanding on April 2, 2018; therefore, dividends aggregating $555,275 were paid on April 16, 2018. On April 13, 2017, the Company’s Board of Directors declared a special cash dividend of $0.06 per common share payable on May 11, 2017 to all shareholders of record on April 27, 2017. There were 9,154,243 shares of common stock outstanding on April 27, 2018; therefore, dividends aggregating $549,255 were paid on May 11, 2017. |
Major Customers
Major Customers | 6 Months Ended |
Jun. 30, 2018 | |
Major Customers [Abstract] | |
MAJOR CUSTOMERS | 13. MAJOR CUSTOMERS During the three months ended June 30, 2018 and 2017, the Company’s three largest customers in terms of net sales accounted for approximately 50.5% (26.0%, 14.3%, 10.2%) and 43.6% (20.8%, 12.2%, 10.6%), respectively, of the Company’s net sales, and during the six months ended June 30, 2018 and 2017 these customers accounted for approximately 43.6% (24.3%, 10.8%, 8.5%) and 42.2% (25.3%, 8.0%, 8.9%), respectively, of the Company’s net sales. At June 30, 2018 and December 31, 2017, trade accounts receivable due from the Company’s three largest customers constituted 67.7% (32.6%, 22.1%, 13.0%) and 36.9% (14.0%, 11.5%, 11.4%) of the Company’s outstanding trade accounts receivable. In February 2018, the Company changed payment terms for its largest customer from 30 days to 90 days. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Event [Abstract] | |
SUBSEQUENT EVENT | 14. SUBSEQUENT EVENT Pursuant to an asset acquisition agreement dated July 13, 2018, the Company acquired assets of Snappy Marine, Inc., a Florida corporation that marketed and distributed Snappy Teak – NU ® ® ® |
Summary of Accounting Policies
Summary of Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Accounting Policies [Abstract] | |
Interim reporting | Interim reporting The accompanying unaudited condensed consolidated financial statements include the accounts of Ocean Bio-Chem, Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain prior period data have been reclassified to conform to the current period presentation. Unless the context indicates otherwise, the term “Company” refers to Ocean Bio-Chem, Inc. and its subsidiaries. The unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The financial information furnished herein reflects all adjustments, consisting of normal recurring items that, in the opinion of management, are necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018. The information included in this Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. |
Use of estimates | Use of estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventories [Abstract] | |
Schedule of inventories | June 30, December 31, Raw materials $ 4,546,710 $ 3,994,624 Finished goods 5,865,107 5,354,097 Inventories, gross 10,411,817 9,348,721 Inventory reserves (277,987 ) (274,295 ) Inventories, net $ 10,133,830 $ 9,074,426 |
Property, Plant & Equipment (Ta
Property, Plant & Equipment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant & Equipment [Abstract] | |
Schedule of property, plant and equipment | Estimated June 30, December 31, Land $ 278,325 $ 278,325 Building and Improvements 30 years 9,315,217 4,673,409 Manufacturing and warehouse equipment 6-20 years 10,257,069 9,616,086 Office equipment and furniture 3-5 years 1,770,757 1,367,244 Leasehold improvements 10-15 years 571,483 567,898 Vehicles 3 years 10,020 10,020 Construction in process 428,891 5,197,780 Property, plant and equipment, gross 22,631,762 21,710,762 Less accumulated depreciation (12,901,564 ) (12,419,095 ) Property, plant and equipment, net $ 9,730,198 $ 9,291,667 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Intangible Assets [Abstract] | |
Schedule of intangible assets | June 30, 2018 Intangible Asset Cost Accumulated Net Patents $ 622,733 $ 413,804 $ 208,929 Trade names and trademarks 1,131,125 549,561 581,564 Royalty rights 160,000 88,225 71,775 Total intangible assets $ 1,913,858 $ 1,051,590 $ 862,268 December 31, 2017 Intangible Asset Cost Accumulated Net Patents $ 622,733 $ 387,636 $ 235,097 Trade names and trademarks 1,131,125 549,561 581,564 Royalty rights 160,000 79,253 80,747 Total intangible assets $ 1,913,858 $ 1,016,450 $ 897,408 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Long Term Debt [Abstract] | |
Summary of company's long term debt | Current Portion Long Term Portion June 30, December 31, June 30, December 31, Obligations related to industrial development bond financing $ 244,150 $ 240,395 $ 4,099,036 $ 4,222,241 Capitalized equipment leases 17,810 19,238 21,437 31,188 Total principal of long term debt 261,960 259,633 4,120,473 4,253,429 Debt issuance costs (19,616 ) (19,616 ) (161,828 ) (171,636 ) Total long term debt $ 242,344 $ 240,017 $ 3,958,645 $ 4,081,793 |
Summary of principal payments under long term obligations | Twelve month period ending June 30, 2019 $ 261,960 2020 271,294 2021 261,464 2022 268,003 2023 276,465 Thereafter 3,043,247 Total $ 4,382,433 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Summary of computation of basic and diluted earnings per common share | Three Months Ended Six Months Ended 2018 2017 2018 2017 Earnings per common share – Basic Net income $ 1,121,351 $ 952,512 $ 1,644,731 $ 1,456,436 Weighted average number of common shares outstanding 9,256,206 9,154,768 9,255,398 9,150,874 Earnings per common share – Basic $ 0.12 $ 0.10 $ 0.18 $ 0.16 Earnings per common share – Diluted Net income $ 1,121,351 $ 952,512 $ 1,644,731 $ 1,456,436 Weighted average number of common shares outstanding 9,256,206 9,154,768 9,255,398 9,150,874 Dilutive effect of employee stock-based awards 40,483 66,807 41,638 69,097 Weighted average number of common shares outstanding - Diluted 9,296,689 9,221,575 9,297,036 9,219,971 Earnings per common share – Diluted $ 0.12 $ 0.10 $ 0.18 $ 0.16 |
Securities Authorized for Iss27
Securities Authorized for Issuance under Equity Compensation Plans (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Securities Authorized for Issuance Under Equity Compensation Plans [Abstract] | |
Schedule of outstanding stock options under company's stock options plans | Date Granted Shares Underlying Options Outstanding Shares Underlying Exercisable Options Exercise Price Expiration Date Weighted Average Remaining 1/11/09 40,000 40,000 $ 0.69 1/10/19 0.5 4/26/10 20,000 20,000 $ 2.07 4/25/20 1.8 60,000 60,000 $ 1.15 1.0 |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Summary of inventories | ||
Raw materials | $ 4,546,710 | $ 3,994,624 |
Finished goods | 5,865,107 | 5,354,097 |
Inventories, gross | 10,411,817 | 9,348,721 |
Inventory reserves | (277,987) | (274,295) |
Inventories, net | $ 10,133,830 | $ 9,074,426 |
Inventories (Details Textual)
Inventories (Details Textual) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Inventories (Textual) | ||
Inventories managed at the customer's warehouses | $ 484,000 | $ 494,000 |
Property, Plant & Equipment (De
Property, Plant & Equipment (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Summary of property, plant and equipment | ||
Land | $ 278,325 | $ 278,325 |
Building and Improvements | 9,315,217 | 4,673,409 |
Manufacturing and warehouse equipment | 10,257,069 | 9,616,086 |
Office equipment and furniture | 1,770,757 | 1,367,244 |
Leasehold improvements | 571,483 | 567,898 |
Vehicles | 10,020 | 10,020 |
Construction in process | 428,891 | 5,197,780 |
Property, plant and equipment, gross | 22,631,762 | 21,710,762 |
Less accumulated depreciation | (12,901,564) | (12,419,095) |
Property, plant and equipment, net | $ 9,730,198 | $ 9,291,667 |
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 |
Property, Plant & Equipment (31
Property, Plant & Equipment (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Property, Plant & Equipment (Textual) | |||||
Construction in process | $ 428,891 | $ 428,891 | $ 5,197,780 | ||
Depreciation included in cost of goods sold | 219,516 | $ 174,022 | 397,171 | $ 353,370 | |
Depreciation expense | 261,055 | 223,275 | 482,469 | 452,301 | |
Depreciation included in selling and administrative expenses | 41,539 | $ 49,253 | 85,298 | $ 98,931 | |
Kinpak [Member] | |||||
Property, Plant & Equipment (Textual) | |||||
Construction in process | $ 350,202 | $ 350,202 | $ 5,087,897 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, Cost | $ 1,913,858 | $ 1,913,858 |
Intangible assets, Accumulated Amortization | 1,051,590 | 1,016,450 |
Intangible assets, Net | 862,268 | 897,408 |
Patents [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, Cost | 622,733 | 622,733 |
Intangible assets, Accumulated Amortization | 413,804 | 387,636 |
Intangible assets, Net | 208,929 | 235,097 |
Trade names and trademarks [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, Cost | 1,131,125 | 1,131,125 |
Intangible assets, Accumulated Amortization | 549,561 | 549,561 |
Intangible assets, Net | 581,564 | 581,564 |
Royalty rights [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, Cost | 160,000 | 160,000 |
Intangible assets, Accumulated Amortization | 88,225 | 79,253 |
Intangible assets, Net | $ 71,775 | $ 80,747 |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Intangible Assets (Textual) | ||||
Amortization expense | $ 17,570 | $ 17,570 | $ 35,140 | $ 35,140 |
Net of amortization | 208,929 | 208,929 | ||
Patents [Member] | ||||
Intangible Assets (Textual) | ||||
Amortization expense | 13,084 | 13,084 | $ 26,168 | 26,168 |
ClO2 Patents [Member] | ||||
Intangible Assets (Textual) | ||||
Expiry date of intangible assets | 2,021 | |||
Net of amortization | 205,791 | $ 205,791 | ||
Intangible assets, description | The patents (the most significant of which (the "ClO2 Patents") relate to a device for producing chlorine dioxide (ClO2) that is incorporated into the Company's disinfectant, sanitizer and deodorizer products) had a carrying value, net of amortization, of $208,929 at June 30, 2018 (of which $205,791 is attributable to the ClO2 Patents). The ClO2 Patents expire in 2022 and the other patents expire in 2021. | |||
Royalty rights [Member] | ||||
Intangible Assets (Textual) | ||||
Amortization expense | $ 4,486 | $ 4,486 | $ 8,972 | $ 8,972 |
Revolving Line of Credit (Detai
Revolving Line of Credit (Details) - USD ($) | 1 Months Ended | ||
Aug. 31, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | |
Revolving Line of Credit (Textual) | |||
Term of revolving line of credit | The Company was provided a revolving line of credit. Under the Business Loan Agreement, the Company may borrow up to the lesser of (i) $6,000,000 or (ii) a borrowing base equal to 85% of Eligible Accounts (as defined in the Business Loan Agreement) plus 50% of Eligible Inventory (as defined in the Business Loan Agreement). | ||
Maximum revolving credit line of credit provided in business loan agreement | $ 6,000,000 | ||
Percentage of eligible accounts receivables as part of borrowing base | 85.00% | ||
Percentage of eligible inventory as part of the borrowing base | 50.00% | ||
Description of interest on the revolving line of credit | LIBOR rate plus 1.5% per annum, computed on a 365/360 basis. | ||
Due date of outstanding principal and interest borrowed under revolving line of credit | Aug. 31, 2018 | ||
Financial covenants under credit agreement, description | The Company maintain a minimum fixed charge coverage ratio (generally, the ratio of (A) EBITDA for the most recently completed four fiscal quarters minus the sum of the Company's distributions to its shareholders, taxes paid and unfunded capital expenditures during such period to (B) current maturities of Company long term debt as of the end of the most recent fiscal quarter plus scheduled interest expense incurred over the most recently completed four fiscal quarters) of 1.20 to 1, tested quarterly, and a maximum "debt to cap" ratio (generally, funded debt divided by the sum of net worth and funded debt) of 0.75 to 1, as of the end of each fiscal quarter. For purposes of computing the fixed charge coverage ratio, "EBITDA" generally is defined as net income before taxes and depreciation expense plus amortization expense, plus interest expense, plus non-recurring and/or non-cash losses and expenses, minus non-recurring and/or non-cash gains and income; "unfunded capital expenditures" generally is defined as capital expenditures made from Company funds other than funds borrowed through term debt incurred to finance such capital expenditures; and "long term debt" generally is defined as "debt instruments with a maturity principal due date of one year or more in length," including, among other listed contractual debt instruments, "revolving lines of credit" and "capital leases obligations." | ||
Majority shareholder's ownership, percentage | 50.00% | ||
Revolving line of credit | $ 1,100,000 | $ 0 |
Long Term Debt (Details)
Long Term Debt (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Summary of long term debt | ||
Total principal of long term debt, Current Portion | $ 261,960 | $ 259,633 |
Total principal of long term debt, Long Term Portion | 4,120,473 | 4,253,429 |
Debt issuance costs, Current Portion | (19,616) | (19,616) |
Debt issuance costs, Long Term Portion | (161,828) | (171,636) |
Total long term debt, Current Portion | 242,344 | 240,017 |
Total long term debt, Long Term Portion | 3,958,645 | 4,081,793 |
Obligations related to industrial development bond financing [Member] | ||
Summary of long term debt | ||
Obligations related to industrial development bond financing, Current Portion | 244,150 | 240,395 |
Obligations related to industrial development bond financing, Long Term portion | 4,099,036 | 4,222,241 |
Capitalized equipment leases [Member] | ||
Summary of long term debt | ||
Capitalized equipment leases, Current Portion | 17,810 | 19,238 |
Capitalized equipment leases, Long Term Portion | $ 21,437 | $ 31,188 |
Long Term Debt (Details 1)
Long Term Debt (Details 1) | Jun. 30, 2018USD ($) |
Summary of principal payments under Company's long term obligations | |
2,019 | $ 261,960 |
2,020 | 271,294 |
2,021 | 261,464 |
2,022 | 268,003 |
2,023 | 276,465 |
Thereafter | 3,043,247 |
Total | $ 4,382,433 |
Long Term Debt (Details Textual
Long Term Debt (Details Textual) | 1 Months Ended | 6 Months Ended | |
Sep. 26, 2017USD ($)ft² | Jun. 30, 2018USD ($)Installments | Dec. 31, 2017USD ($) | |
Long Term Debt (Textual) | |||
Area of land | ft² | 85,000 | ||
Aggregate capital lease | $ 39,000 | $ 50,000 | |
Maturity period for capital lease | Mature on July 1, 2020. | ||
Percentage of interest rates | 2.00% | ||
Term loan, description | The $4,500,000 proceeds of the Bond sale, approximately $1,704,000 has been applied to reimburse Kinpak for Project expenditures and approximately $54,000 was paid directly to other parties for certain transaction costs. | ||
Lender's purchase of industrial development bond | $ 4,500,000 | ||
Repurchase price of facilities if bond has been redeemed or fully paid | $ 1,000 | ||
Bond redemptions, description | The Bond bears interest at the rate of 3.07% per annum, calculated on the basis of a 360-day year and the actual number of days elapsed (subject to increase to 6.07% per annum upon the occurrence of an event of default), and is payable in 118 monthly installments of $31,324 beginning on November 1, 2017 and ending on August 1, 2027, with a final principal and interest payment to be made on September 1, 2027 in the amount of $1,799,201. | ||
Number of installments | Installments | 118 | ||
Loan obtained from Regions Capital Advantage, Inc. | $ 4,500,000 | ||
Proceeds from sale of bond | $ 4,500,000 | ||
Incurred debt issuance costs | $ 196,095 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Related Party Transactions (Textual) | |||||
Sales to the affiliated companies | $ 369,000 | $ 539,000 | $ 1,189,000 | $ 1,286,000 | |
Administrative fees | 251,000 | 260,000 | 429,000 | 429,000 | |
Receivables due from affiliated companies | 888,000 | 888,000 | $ 1,584,000 | ||
Amount paid for the production of television commercials | 21,000 | 21,000 | |||
Reimburse business related expenditures | 24,000 | 28,000 | 53,000 | 49,000 | |
Services provided for marketing events | 6,000 | 0 | 10,500 | 45,000 | |
Research and development services | 10,500 | 10,500 | 21,000 | 21,000 | |
Insurance broker [Member] | |||||
Related Party Transactions (Textual) | |||||
Insurance premiums paid | $ 261,000 | $ 244,000 | $ 449,000 | $ 439,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Aug. 01, 2016USD ($)ft² | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) |
Fort Lauderdale, Florida [Member] | |||||
Commitments and contingencies (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 | $ 25,000 | $ 25,000 | $ 49,000 | $ 49,000 | |
Montgomery, AL [Member] | |||||
Commitments and contingencies (Textual) | |||||
Area of rent leases | ft² | 15,000 | ||||
Monthly rent | $ 4,375 | ||||
Expiration date | Jul. 31, 2018 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings per common share - Basic | ||||
Net income | $ 1,121,351 | $ 952,512 | $ 1,644,731 | $ 1,456,436 |
Weighted average number of common shares outstanding | 9,256,206 | 9,154,768 | 9,255,398 | 9,150,874 |
Earnings per common share - Basic | $ 0.12 | $ 0.1 | $ 0.18 | $ 0.16 |
Earnings per common share - Diluted | ||||
Net income | $ 1,121,351 | $ 952,512 | $ 1,644,731 | $ 1,456,436 |
Weighted average number of common shares outstanding | 9,256,206 | 9,154,768 | 9,255,398 | 9,150,874 |
Dilutive effect of employee stock-based awards | 40,483 | 66,807 | 41,638 | 69,097 |
Weighted average number of common shares outstanding - Diluted | 9,296,689 | 9,221,575 | 9,297,036 | 9,219,971 |
Earnings per common share - Diluted | $ 0.12 | $ 0.1 | $ 0.18 | $ 0.16 |
Securities Authorized for Iss41
Securities Authorized for Issuance under Equity Compensation Plans (Details) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Summary of outstanding options, exercisable options, exercise price, expiration date, weighted average remaining life under company stock option plans | |
Shares Underlying Options Outstanding | 60,000 |
Shares Underlying Exercisable Options | 60,000 |
Exercise Price | $ / shares | $ 1.15 |
Weighted Average Remaining Term | 1 year |
1/11/09 [Member] | |
Summary of outstanding options, exercisable options, exercise price, expiration date, weighted average remaining life under company stock option plans | |
Date Granted | Jan. 11, 2009 |
Shares Underlying Options Outstanding | 40,000 |
Shares Underlying Exercisable Options | 40,000 |
Exercise Price | $ / shares | $ 0.69 |
Expiration Date | Oct. 1, 2019 |
Weighted Average Remaining Term | 6 months |
4/26/10 [Member] | |
Summary of outstanding options, exercisable options, exercise price, expiration date, weighted average remaining life under company stock option plans | |
Date Granted | Apr. 26, 2010 |
Shares Underlying Options Outstanding | 20,000 |
Shares Underlying Exercisable Options | 20,000 |
Exercise Price | $ / shares | $ 2.07 |
Expiration Date | Apr. 25, 2020 |
Weighted Average Remaining Term | 1 year 9 months 18 days |
Securities Authorized for Iss42
Securities Authorized for Issuance under Equity Compensation Plans (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Securities Authorized for Issuance Under Equity Compensation Plans (Textual) | ||||
Stock compensation expense | $ 13,870 | $ 17,360 | $ 13,870 | $ 17,360 |
Cash Dividends (Details)
Cash Dividends (Details) - USD ($) | May 11, 2017 | Apr. 16, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Apr. 02, 2018 | Mar. 19, 2018 | Dec. 31, 2017 | Apr. 27, 2017 | Apr. 13, 2017 |
Cash Dividends (Textual) | |||||||||
Common stock, shares outstanding | 9,258,580 | 9,254,580 | |||||||
Dividends paid to common shareholders | $ 555,275 | $ 549,255 | |||||||
Shareholders [Member] | |||||||||
Cash Dividends (Textual) | |||||||||
Common stock, shares outstanding | 9,254,580 | 9,154,243 | |||||||
Dividends paid to common shareholders | $ 549,255 | $ 555,275 | |||||||
Dividends declared per common share | $ 0.06 | $ 0.06 |
Major Customers (Details)
Major Customers (Details) - Customers | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Net sales [Member] | |||||
Major Customers (Textual) | |||||
Concentration risk, percentage | 50.50% | 43.60% | 43.60% | 42.20% | |
Number of customers | 3 | 3 | 3 | 3 | |
Net sales [Member] | Customer One [Member] | |||||
Major Customers (Textual) | |||||
Concentration risk, percentage | 26.00% | 20.80% | 24.30% | 25.30% | |
Net sales [Member] | Customer Two [Member] | |||||
Major Customers (Textual) | |||||
Concentration risk, percentage | 14.30% | 12.20% | 10.80% | 8.00% | |
Net sales [Member] | Customer Three [Member] | |||||
Major Customers (Textual) | |||||
Concentration risk, percentage | 10.20% | 10.60% | 8.50% | 8.90% | |
Accounts receivable [Member] | |||||
Major Customers (Textual) | |||||
Concentration risk, percentage | 67.70% | 36.90% | |||
Number of customers | 3 | 3 | 3 | ||
Accounts receivable [Member] | Customer One [Member] | |||||
Major Customers (Textual) | |||||
Concentration risk, percentage | 32.60% | 14.00% | |||
Accounts receivable [Member] | Customer Two [Member] | |||||
Major Customers (Textual) | |||||
Concentration risk, percentage | 22.10% | 11.50% | |||
Accounts receivable [Member] | Customer Three [Member] | |||||
Major Customers (Textual) | |||||
Concentration risk, percentage | 13.00% | 11.40% |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event [Member] - Intellectual Property [Member] | Jul. 13, 2018USD ($) |
Subsequent Event (Textual) | |
Purchase price of asset acquisition | $ 1,358,882 |
Cash paid at closing | 345,882 |
Cash held back to pay for intellectual property rights registration | 13,000 |
Monthly installment | $ 16,667 |
Debt payment, terms | Over a 60 month period commencing on August 1, 2018, with a final payment due and payable on July 1, 2023. |
Promissory note, description | The Company provided to Snappy Marine a promissory note in the amount of $1,000,000, including interest (of the $1,000,000 amount of the note, $930,528 is recorded as principal, and the remaining $69,472, representing an imputed interest rate of 2.87% per annum, will be charged to interest expense over the term of the note). |
Promissory note, aggregate maximum offset amount | $ 25,000 |