Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 28, 2019 | Jun. 29, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | OCEAN BIO CHEM INC | ||
Entity Central Index Key | 0000350737 | ||
Trading Symbol | OBCI | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 10,837,621 | ||
Entity Common Stock, Shares Outstanding | 9,366,119 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash | $ 1,401,047 | $ 2,418,484 |
Trade accounts receivable less allowances of approximately $171,000 and $79,000, respectively | 5,658,686 | 4,963,895 |
Receivables due from affiliated companies | 1,045,990 | 1,584,365 |
Restricted cash | 2,332,877 | 2,747,360 |
Inventories, net | 12,085,813 | 9,074,426 |
Prepaid expenses and other current assets | 1,010,641 | 1,013,213 |
Total Current Assets | 23,535,054 | 21,801,743 |
Property, plant and equipment, net | 9,649,237 | 9,291,667 |
Intangible assets, net | 2,050,212 | 897,408 |
Total Assets | 35,234,503 | 31,990,818 |
Current Liabilities: | ||
Current portion of long-term debt, net | 425,663 | 240,017 |
Accounts payable - trade | 1,472,230 | 1,807,120 |
Accrued expenses payable | 1,108,905 | 812,062 |
Total Current Liabilities | 3,006,798 | 2,859,199 |
Deferred tax liability | 280,349 | 153,895 |
Long-term debt, less current portion and debt issuance costs | 4,514,105 | 4,081,793 |
Total Liabilities | 7,801,252 | 7,094,887 |
COMMITMENTS AND CONTINGENCIES (Note 11) | ||
Shareholders' Equity: | ||
Common stock - $.01 par value, 12,000,000 shares authorized; 9,338,191 shares and 9,254,580 shares issued, respectively | 93,382 | 92,546 |
Additional paid in capital | 10,235,827 | 9,931,634 |
Accumulated other comprehensive loss | (295,734) | (288,051) |
Retained earnings | 17,399,776 | 15,159,802 |
Total Shareholders' Equity | 27,433,251 | 24,895,931 |
Total Liabilities and Shareholders' Equity | $ 35,234,503 | $ 31,990,818 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Consolidated Balance Sheets [Abstract] | ||
Trade accounts receivable less allowances | $ 171,000 | $ 79,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 12,000,000 | 12,000,000 |
Common stock, shares issued | 9,338,191 | 9,254,580 |
Common stock, shares outstanding | 9,338,191 | 9,254,580 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Consolidated Statements of Operations [Abstract] | ||
Net sales | $ 41,799,545 | $ 37,940,978 |
Cost of goods sold | 27,402,356 | 24,309,132 |
Gross profit | 14,397,189 | 13,631,846 |
Operating Expenses: | ||
Advertising and promotion | 3,050,858 | 2,658,878 |
Selling and administrative | 7,638,158 | 7,297,538 |
Total operating expenses | 10,689,016 | 9,956,416 |
Operating income | 3,708,173 | 3,675,430 |
Other income (expense) | ||
Interest (expense) income, net | (121,894) | 2,065 |
Income before income taxes | 3,586,279 | 3,677,495 |
Provision for income taxes | (791,030) | (1,073,961) |
Net income | $ 2,795,249 | $ 2,603,534 |
Earnings per common share - basic and diluted | $ 0.3 | $ 0.28 |
Dividends declared per common share | $ 0.06 | $ 0.06 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Consolidated Statements of Comprehensive Income [Abstract] | ||
Net income | $ 2,795,249 | $ 2,603,534 |
Foreign currency translation adjustment | (7,683) | (1,496) |
Comprehensive income | $ 2,787,566 | $ 2,602,038 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) | Total | Common Stock | Additional Paid In Capital | Accumulated Other Comprehensive Loss | Retained Earnings |
Beginning balance at Dec. 31, 2016 | $ 22,515,071 | $ 91,469 | $ 9,604,634 | $ (286,555) | $ 13,105,523 |
Beginning balance, shares at Dec. 31, 2016 | 9,146,937 | ||||
Net income | 2,603,534 | 2,603,534 | |||
Dividends, common stock | (549,255) | (549,255) | |||
Options exercised | 26,400 | $ 341 | 26,059 | ||
Options exercised, shares | 34,043 | ||||
Common stock issued, net of shares withheld for employee taxes | 301,677 | $ 736 | 300,941 | ||
Common stock issued, net of shares withheld for employee taxes, shares | 73,600 | ||||
Foreign currency translation adjustment | (1,496) | (1,496) | |||
Ending balance at Dec. 31, 2017 | 24,895,931 | $ 92,546 | 9,931,634 | (288,051) | 15,159,802 |
Ending balance, shares at Dec. 31, 2017 | 9,254,580 | ||||
Net income | 2,795,249 | 2,795,249 | |||
Dividends, common stock | (555,275) | (555,275) | |||
Options exercised | $ 85 | (85) | |||
Options exercised, shares | 8,510 | ||||
Common stock issued, net of shares withheld for employee taxes | 305,029 | $ 751 | 304,278 | ||
Common stock issued, net of shares withheld for employee taxes, shares | 75,101 | ||||
Foreign currency translation adjustment | (7,683) | (7,683) | |||
Ending balance at Dec. 31, 2018 | $ 27,433,251 | $ 93,382 | $ 10,235,827 | $ (295,734) | $ 17,399,776 |
Ending balance, shares at Dec. 31, 2018 | 9,338,191 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 2,795,249 | $ 2,603,534 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,175,267 | 955,161 |
Deferred income taxes | 126,454 | (59,472) |
Stock based compensation | 330,823 | 324,145 |
Provision for bad debts | 35,145 | 198,839 |
Other operating non-cash items | 3,378 | 4,612 |
Changes in assets and liabilities: | ||
Trade accounts receivable | (729,936) | (230,942) |
Receivables due from affiliated companies | 538,375 | (394,262) |
Inventories | (3,021,201) | (479,873) |
Prepaid expenses and other current assets | 2,572 | 739 |
Accounts payable - trade | (334,890) | 295,100 |
Income taxes payable | (1,447) | |
Accrued expenses payable | 296,843 | (287,857) |
Net cash provided by operating activities | 1,218,079 | 2,928,277 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (1,358,776) | (5,275,732) |
Purchase of intangible assets | (376,722) | |
Net cash used in investing activities | (1,735,498) | (5,275,732) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 4,500,000 | |
Payments on long-term debt | (332,185) | (315,756) |
Borrowings on revolving line of credit | 2,750,000 | 1,000,000 |
Repayments on revolving line of credit | (2,750,000) | (1,000,000) |
Payments for taxes related to net share settlements of stock awards | (25,794) | (22,468) |
Dividends paid to common shareholders | (555,275) | (549,255) |
Payments for debt issuance costs | (196,095) | |
Proceeds from exercise of stock options | 26,400 | |
Net cash (used in) provided by financing activities | (913,254) | 3,442,826 |
Effect of exchange rate on cash | (1,247) | 28 |
Net (decrease) increase in cash and restricted cash | (1,431,920) | 1,095,399 |
Cash and restricted cash at beginning of period | 5,165,844 | 4,070,445 |
Cash and restricted cash at end of period | 3,733,924 | 5,165,844 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest during period | 136,031 | 29,496 |
Cash paid for income taxes during period | 660,000 | 1,282,400 |
Cash | 1,401,047 | 2,418,484 |
Restricted cash | 2,332,877 | 2,747,360 |
Total cash and restricted cash | 3,733,924 | 5,165,844 |
Noncash investing and financing activities: | ||
Issuance of note payable for asset acquisition | 1,000,000 | |
Imputed interest | (69,472) | |
Principal portion of note payable issued for asset acquisition | $ 930,528 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | Note 1 Organization Basis of presentation and consolidation – The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Revenue recognition – On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, “ Revenue from Contracts with Customers Originally Topic 606 As Revised Net sales $ 38,933,458 $ (992,480 ) $ 37,940,978 Cost of goods sold 24,436,780 (127,648 ) 24,309,132 Gross profit 14,496,678 (864,832 ) 13,631,846 Operating expenses: Advertising and promotion 3,523,710 (864,832 ) 2,658,878 Selling and administrative 7,297,538 - 7,297,538 Total operating expenses 10,821,248 (864,832 ) 9,956,416 Operating income 3,675,430 - 3,675,430 Interest income 2,065 - 2,065 Income before income taxes 3,677,495 - 3,677,495 Provision for income taxes (1,073,961 ) - (1,073,961 ) Net income $ 2,603,534 $ - $ 2,603,534 Collectability of accounts receivable Inventories Shipping and handling costs Advertising and promotion expense Property, plant and equipment Research and development costs Stock based compensation Accounting for Stock Compensation Use of estimates Concentration of cash Fair value of financial instruments Fair Value Measurements and Disclosures ASC Topic 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 three levels of inputs as follows: Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs that include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data through correlation or other means. Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed data in connection with fair value measurements. The carrying amounts of the Company’s short-term financial instruments, including cash, accounts receivable, accounts payable, certain accrued expenses and revolving line of credit, 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 Property, Plant and Equipment – Overall Income taxes The Company records a valuation allowance when necessary to reduce its deferred tax assets to the net amount that the Company believes is more likely than not to be realized. The Company considers available evidence, both positive and negative, and use judgments regarding past and future events, including operating results and available tax planning strategies, in assessing the need for a valuation allowance. The Company recognizes tax benefits from uncertain tax positions only if the Company believes 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, the Company establishes reserves for uncertain tax positions. The Company adjusts 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 no uncertain tax positions as of December 31, 2018. The Company is no longer subject to income tax examinations for years before 2015. Intangible assets Foreign currency translation Earnings per share |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventories [Abstract] | |
Inventories | Note 2 The composition of the Company’s inventories at December 31, 2018 and 2017 are as follows: 2018 2017 Raw materials $ 4,320,131 $ 3,994,624 Finished goods 8,049,791 5,354,097 Inventories, gross 12,369,922 9,348,721 Inventory reserves (284,109 ) (274,295 ) Inventories, net $ 12,085,813 $ 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. 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, which are included in inventories, net, amounted to approximately $495,000 and $494,000 at December 31, 2018 and 2017, respectively. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note 3 The Company’s property, plant and equipment at December 31, 2018 and 2017 consisted of the following: Estimated Useful Life 2018 2017 Land $ 278,325 $ 278,325 Building and Improvements 30 years 9,548,922 4,673,409 Manufacturing and warehouse equipment 6-20 years 10,736,161 9,616,086 Office equipment and furniture 3-5 years 1,838,360 1,367,244 Leasehold improvements 10-15 years 577,068 567,898 Vehicles 3 years 10,020 10,020 Construction in process 80,682 5,197,780 Property, plant and equipment, gross 23,069,538 21,710,762 Less accumulated depreciation (13,420,301 ) (12,419,095 ) Property, plant and equipment, net $ 9,649,237 $ 9,291,667 The Company is nearing completion of a project involving the expansion of the manufacturing, warehouse and distribution facilities of the Company’s wholly-owned subsidiary, KINPAK Inc. (“Kinpak”) in Montgomery, Alabama, as well as the purchase and installation of associated machinery and equipment (the “Expansion Project”). As of December 31, 2018, the remaining work on the Expansion Project involves the completion of a bottle filling line and the purchase and installation of additional equipment. At December 31, 2018, the Company’s expenditures on the Expansion Project aggregated approximately $6.0 million. The total cost of the Expansion Project is estimated to be approximately $6.7 million. Construction in progress at December 31, 2018 and 2017 includes $46,996 and $5,087,897, respectively, relating to the expansion of Kinpak’s manufacturing, warehouse and distribution facilities. |
Snappy Marine Asset Acquisition
Snappy Marine Asset Acquisition | 12 Months Ended |
Dec. 31, 2018 | |
Snappy Marine Asset Acquisition [Abstract] | |
Snappy Marine Asset Acquisition | Note 4 Pursuant to an asset acquisition agreement dated July 13, 2018, the Company acquired assets of Snappy Marine, Inc. (“Snappy Marine”), a Florida corporation that marketed and distributed Snappy Teak – NU ® ® ® Pro forma information with respect to the asset acquisition is not presented as the operations of the acquired business are not material to the Company’s operations. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets [Abstract] | |
Intangible Assets | Note 5 The Company’s intangible assets at December 31, 2018 and 2017 consisted of the following: December 31, 2018 Intangible Assets Cost Accumulated Net Patents $ 622,733 $ 439,972 $ 182,761 Trade names and trademarks 1,649,880 561,449 1,088,431 Customer list 525,663 48,186 477,477 Product formulas 262,832 24,093 238,739 Royalty rights 160,000 97,196 62,804 Total intangible assets $ 3,221,108 $ 1,170,896 $ 2,050,212 December 31, 2017 Intangible Assets 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 On July 13, 2018, the Company acquired assets of Snappy Marine, principally consisting of intangible assets (see Note 4). The allocated cost of the intangible assets acquired from Snappy Marine and their respective useful lives are set forth in the table below: Intangible Assets Amount Life Trademarks and trade names $ 518,755 20 years Customer list 525,663 5 years Product formulas 262,832 5 years Total intangible assets acquired from Snappy Marine $ 1,307,250 Amortization expense related to intangible assets aggregated $154,446 and $70,280 for the years ended December 31, 2018 and 2017, respectively. |
Revolving Line of Credit
Revolving Line of Credit | 12 Months Ended |
Dec. 31, 2018 | |
Revolving Line of Credit [Abstract] | |
Revolving Line of Credit | Note 6 On August 31, 2018, 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 revolving line of credit, 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 1.35% 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, 2021, at which time all outstanding principal and interest will be due and payable. The Company’s obligations under the revolving line of credit are principally secured by the Company’s accounts receivable and inventory. The Business Loan Agreement includes financial covenants requiring that 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) prior year current maturities of Company long term debt plus 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; “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” and “prior year current maturities of long term debt” generally is defined as the principal portions of long-term debt maturing within one year as listed at the last quarter end of the prior completed four fiscal quarters. At December 31, 2018, the Company was in compliance with these financial covenants. The revolving 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. On August 31, 2017, the Company and Regions Bank entered into a Business Loan Agreement (the “Predecessor Agreement’), under which the Company was provided a revolving line of credit in the maximum amount of $6,000,000. The Predecessor Agreement, as amended, was substantially similar to the Business Loan Agreement, with the following exceptions: (i) if no demand for payment was made by Regions Bank, all outstanding amounts were due and payable one year from the date of the Predecessor Agreement; (ii) Interest on amounts borrowed under the Predecessor Agreement was payable monthly at the one month LIBOR rate plus 1.5% per annum, computed on a 365/360 basis. The Predecessor Agreement expired on August 31, 2018 and was replaced by the Business Loan Agreement. At December 31, 2018 and 2017, the Company had no borrowings under the revolving line of credit provided by the Business Loan Agreement and the Predecessor Agreement, respectively. |
Accrued Expenses Payable
Accrued Expenses Payable | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Expenses Payable [Abstract] | |
Accrued Expenses Payable | Note 7 Accrued expenses payable at December 31, 2018 and 2017 consisted of the following: 2018 2017 Accrued customer promotions $ 485,472 $ 343,172 Accrued payroll, commissions, and benefits 373,895 280,783 Other 249,538 188,107 Total accrued expenses payable $ 1,108,905 $ 812,062 |
Long Term Debt
Long Term Debt | 12 Months Ended |
Dec. 31, 2018 | |
Long Term Debt [Abstract] | |
Long Term Debt | Note 8 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 relating to the Expansion 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. Kinpak inherited the lease structure when it first acquired its facilities from its predecessor-in-interest in 1996. The Lease provides that 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 Expansion 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 a guarantee agreement under which the Company provided its guarantee, the Company is subject to certain covenants, including financial covenants requiring that the Company maintain (i) a minimum fixed charge ratio (generally, the ratio of (A) EBITDA minus the sum of Company’s distributions to its shareholders, taxes paid and unfunded capital expenditures to (B) current maturities of Company long-term debt plus interest expense) of 1.2 to 1, tested quarterly, and (ii) a ratio of funded debt (as defined in the guaranty agreement) divided by the sum of net worth and funded debt of 0.75 to 1, tested quarterly. 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. At December 31, 2018, the Company was in compliance with these financial covenants. Through December 31, 2018, of the $4,500,000 proceeds of the Bond sale, approximately $2,161,000 has been applied to reimburse Kinpak for Expansion 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 Expansion 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 financing costs of $196,095 in connection with the financing. These costs are shown as a reduction of the debt balance and are being amortized under the effective interest method. Other Long Term Obligations In connection with the Company’s agreement to purchase the assets of Snappy Marine (see Note 4 above), 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 promissory note, $930,528 was recorded as principal, and the remaining $69,472, representing an imputed interest rate of 2.87% per annum, is being recorded as interest expense over the term of the note). The note is payable in equal installments of $16,667 over a 60 month period that commenced on August 1, 2018, with a final payment due and payable on July 1, 2023. If the note is prepaid in full, the entire outstanding balance of the note (including all unpaid amounts allocated to interest over the remaining term of the note) must be paid. At December 31, 2018 and 2017, the Company was obligated under capital lease agreements covering equipment utilized in the Company’s operations. The capital leases, aggregating approximately $31,000 and $50,000 at December 31, 2018 and 2017, respectively, mature on July 1, 2020 and carry an interest rate of 2% per annum. The following table provides information regarding the Company’s long-term debt at December 31, 2018 and 2017: Current Portion Long Term Portion December 31, December 31, December 31, December 31, Obligations related to industrial development bond financing $ 247,985 $ 240,395 $ 3,974,256 $ 4,222,241 Note payable related to asset acquisition 177,701 --- 680,274 --- Capitalized equipment leases 19,593 19,238 11,596 31,188 Total principal of long term debt 445,279 259,633 4,666,126 4,253,429 Debt issuance costs (19,616 ) (19,616 ) (152,021 ) (171,636 ) Total long term debt $ 425,663 $ 240,017 $ 4,514,105 $ 4,081,793 Required principal payments under the Company’s industrial development bond financing and other long term obligations are set forth below: Year ending December 31, 2019 $ 445,279 2020 449,936 2021 452,068 2022 465,873 2023 396,366 Thereafter 2,901,883 Total $ 5,111,405 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | Note 9 The components of the Company’s provision for income taxes for the years ended December 31, 2018 and 2017 are as follows: 2018 2017 Federal – current $ 636,046 $ 1,101,503 Federal – deferred 120,760 (60,364 ) State – current 28,530 31,930 State – deferred 5,694 892 Total provision for income taxes $ 791,030 $ 1,073,961 The reconciliation of the provision for income taxes at the statutory rate to the reported provision for income taxes is as follows: 2018 % 2017 % Income Tax computed at statutory rate $ 753,119 21.0 % $ 1,250,348 34.0 % State tax, net of federal benefit 22,468 0.6 % 21,074 0.6 % Share based compensation (1,233 ) (0.0 )% (6,303 ) (0.2 )% Domestic production activities deduction ---- ---- (110,410 ) (3.0 )% Effect of tax rate change on deferred taxes ---- ---- (90,980 ) (2.5 )% Permanent adjustments 14,040 0.4 % 24,202 0.7 % Tax credits and other 2,636 0.1 % (13,970 ) (0.4 )% Provision for income taxes $ 791,030 22.1 % $ 1,073,961 29.2 % The Company’s deferred tax liability consisted of the following at December 31, 2018 and 2017: 2018 2017 Deferred tax liability Inventory reserves $ 62,475 $ 68,631 Trade accounts receivable allowances 37,645 9,017 Depreciation and amortization (380,469 ) (231,543 ) Total net deferred tax liability $ (280,349 ) $ (153,895 ) The Tax Cuts and Jobs Act was enacted on December 22, 2017. The legislation significantly changes United States tax law by, among other things, reducing the Company’s federal corporate income tax rate from 34% to 21%, effective January 1, 2018. As a result of the reduction in the federal corporate income tax rate, the Company revalued its net deferred tax liabilities at December 31, 2017 and recognized a $90,980 tax benefit in the Company’s consolidated statement of operations. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10 During 2018, as in previous years, 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 and pays certain business related expenditures for the affiliated companies, for which the Company is reimbursed. Sales to the affiliated companies aggregated approximately $2,190,000 and $2,070,000 during the years ended December 31, 2018 and 2017, respectively; fees for administrative services aggregated approximately $760,000 and $764,000, respectively; and amounts billed to the affiliated companies to reimburse the Company for business related expenditures made on behalf of the affiliated companies aggregated approximately $151,000 and $120,000 during the years ended December 31, 2018 and 2017, respectively. The Company had accounts receivable from the affiliated companies in connection with the product sales and administrative services aggregating approximately $1,046,000 and $1,584,000 at December 31, 2018 and 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 an aggregate of $77,000 ($42,000 for research and development, $14,000 for charter boat services that the Company used to provide sales incentives for external sales representatives and $21,000 for the production of television commercials) and $106,250 ($42,000 for research and development and $64,250 for charter boat services that the Company used to provide sales incentives for external sales representatives) for the years ended December 31, 2018 and 2017, respectively. Expenditures for the research and development services are included in the consolidated statements of operations within selling and administrative expenses. Expenditures for the charter boat services and television production services are included in the consolidated statements of operations within advertising and promotion expenses. 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 11 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 years ended December 31, 2018 and 2017, the Company paid an aggregate of approximately $1,261,000 and $1,235,000, respectively, in insurance premiums on policies obtained through the insurance broker. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 11 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 base 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 $97,000 for each of the years ended December 31, 2018 and 2017. The rent expense is included in the Company’s consolidated statements of operations as a selling and administrative expense. The Company also leased a 15,000 square foot warehouse in Montgomery, Alabama 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 have been expanded in connection with the Expansion Project. See Note 8 above. The following is a schedule of minimum future rentals on the Company’s non-cancelable operating leases. Year ending December 31, 2019 $ 96,064 2020 97,985 2021 99,945 2022 101,944 2023 103,983 Total $ 499,921 |
Stock Options and Awards
Stock Options and Awards | 12 Months Ended |
Dec. 31, 2018 | |
Stock options and awards [Abstract] | |
Stock options and awards | Note 12 On May 29, 2015, the Company’s shareholders approved the Ocean Bio-Chem, Inc. 2015 Equity Compensation Plan (the “Plan”). The Plan provides for grants of several types of awards at the discretion of the Equity Grant Committee of the Company’s Board of Directors, including stock options, stock units, stock awards, stock appreciation rights and other stock based awards. The Plan authorizes the issuance of 630,000 shares of Company common stock, subject to anti-dilution adjustments upon the occurrence of certain events affecting the common stock. During the years ended December 31, 2018 and 2017, the Company granted stock awards under the Plan aggregating 81,400 and 79,100 shares of common stock, respectively, to officers, key employees, directors and, in 2017, a consultant of an affiliated company. Following the withholding of an aggregate of 6,299 and 5,500 shares of common stock, respectively, in connection with a tax withholding feature of the Plan, 75,101 and 73,600 shares were delivered to the award recipients, during the years ended December 31, 2018 and 2017, respectively. At December 31, 2018, 262,000 shares remained available for future issuance under the Plan. The shares vested immediately upon issuance and were fully expensed in the period in which they were awarded. Compensation expense related to the stock awards was $330,823 and $324,145 for the years ended December 31, 2018 and 2017, respectively. The Company withheld shares in 2018 and 2017 that had a value of $25,794 and $22,468, respectively, for income tax withholding related to the awards. 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”). Prior to the May 29, 2015 effective date of the Plan, stock options were granted under the Prior Plans. Only non-qualified options granted under the Prior Plans were outstanding on December 31, 2018. Outstanding non-qualified options were granted to outside directors, have a 10-year term from the date of grant 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 the years ended December 31, 2018 and 2017, and at December 31, 2018 and 2017, there was no unrecognized compensation cost related to share based compensation arrangements During 2018, a former director exercised a stock option to purchase 10,000 shares of common stock. The Company withheld 1,490 shares in connection with the net exercise of the stock option by the former director and delivered 8,510 shares to the former director. During 2017, stock options to purchase an aggregate of 40,000 shares of common stock were exercised. The Company received a total of $26,400, withheld 5,957 shares in connection with the net exercise feature of the stock options and delivered an aggregate of 34,043 shares to the option holders who exercised their options. The following tables provide information regarding outstanding options under the Company’s stock option plans at December 31, 2018 and 2017. All options referenced in the table below were granted under the Company’s 2008 Non-Qualified Stock Option Plan. At December 31, 2018: Date Granted Options Outstanding Exercisable Options Exercise Price Expiration Date Weighted Average Remaining Life 1/11/09 30,000 30,000 0.69 1/10/19 0.0 4/26/10 20,000 20,000 2.07 4/25/20 1.3 50,000 50,000 $ 1.24 0.6 At December 31, 2017: Date Granted Options Outstanding Exercisable Options Exercise Price Expiration Date Weighted Average Remaining Life 1/11/09 40,000 40,000 0.69 1/10/19 1.0 4/26/10 20,000 20,000 2.07 4/25/20 2.4 60,000 60,000 $ 1.15 1.5 The following table provides information relating to stock option transactions during the years ended December 31, 2018 and 2017: 2018 2017 Weighted Weighted Average Average Exercise Exercise Shares Price Shares Price Options outstanding beginning of the year 60,000 $ 1.15 100,000 $ 1.22 Options exercised (10,000 ) 0.69 (40,000 ) 1.32 Total 50,000 $ 1.24 60,000 $ 1.15 |
Major Customers
Major Customers | 12 Months Ended |
Dec. 31, 2018 | |
Major Customers [Abstract] | |
Major Customers | Note 13 The Company had net 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, 2018 and 2017. Net sales to each of these two customers respectively represented approximately 21.7% and 11.4% of consolidated net sales, respectively, for the year ended December 31, 2018 and approximately 22.5% and 11.9% of consolidated net sales, respectively, for the year ended December 31, 2017. At December 31, 2018 and 2017, trade accounts receivables due from the Company’s two largest customers respectively constituted 41.0% (25.2% and 15.8%) and 25.5% (14.0% and 11.5%) of the Company’s outstanding trade accounts receivable. In 2018, the Company changed payment terms for its largest customer from 30 days to 90 days. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 14 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 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. Years Ended 2018 2017 Earnings per common share –Basic Net income $ 2,795,249 $ 2,603,534 Weighted average number of common shares outstanding 9,279,872 9,190,429 Earnings per common share – Basic $ 0.30 $ 0.28 Earnings per common share – Diluted Net income $ 2,795,249 $ 2,603,534 Weighted average number of common shares outstanding 9,279,872 9,190,429 Dilutive effect of employee stock-based awards 39,231 63,373 Weighted average number of common shares outstanding - Diluted 9,319,103 9,253,802 Earnings per common share - Diluted $ 0.30 $ 0.28 The Company had no stock options outstanding at December 31, 2018 and 2017, respectively that were anti-dilutive and therefore not included in the diluted earnings per common share calculation. |
Cash Dividends
Cash Dividends | 12 Months Ended |
Dec. 31, 2018 | |
Cash Dividends [Abstract] | |
Cash Dividends | Note 15 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, 2017; therefore, dividends aggregating $549,255 were paid on May 11, 2017. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2018 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | Note 16 Accounting Guidance Adopted by the Company In May 2014, the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers 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 consolidated statements of cash flows for each comparative period presented. The changes to the Company’s 2017 statement of cash flows are as follows: Originally ASU 2016-18 As Revised Net cash provided by operating activities $ 2,928,277 $ - $ 2,928,277 Net cash used in investing activities (8,023,092 ) 2,747,360 (5,275,732 ) Net cash provided by financing activities 3,442,826 - 3,442,826 Effect of exchange rate fluctuations on cash 28 - 28 Net (decrease) increase in cash $ (1,651,961 ) $ 2,747,360 $ 1,095,399 Accounting Guidance Not Yet Adopted by the Company In February 2016, the FASB issued ASU 2016-02 (Topic 842) “ Leases The Company will adopt the new guidance effective January 1, 2019 using a modified retrospective method, under which it will record an immaterial cumulative adjustment to retained earnings rather than retrospectively adjusting prior periods. This application of the modified retrospective method will result in a balance sheet presentation that will not be comparable to the prior period in the first year of adoption. Based on the Company’s portfolio of leases at December 31, 2018, approximately $430,000 of lease assets and liabilities will be recognized on its balance sheet upon adoption, almost all of which relate to the lease for to the Company’s executive offices and manufacturing facilities located in Ft. Lauderdale, Florida. The Company does not expect the new standard to have a material impact on its results of operations or cash flows. In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments – Credit Losses s. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Event [Abstract] | |
Subsequent Event | Note -17 On March 22, 2019, the Company’s Board of Directors declared a special cash dividend of $0.05 per common share payable on April 19, 2019 to all shareholders of record on April 5, 2019. At the time of the filing of this report there were 9,366,119 shares of common stock outstanding; therefore, dividends aggregating $468,306 will be paid on April 19, 2019. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |
Organization | Organization |
Basis of presentation and consolidation | Basis of presentation and consolidation – The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). |
Revenue recognition | Revenue recognition – On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, “ Revenue from Contracts with Customers |
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 Accounting for Stock Compensation |
Use of estimates | Use of estimates |
Concentration of cash | Concentration of cash |
Fair value of financial instruments | Fair value of financial instruments ASC Topic 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 three levels of inputs as follows: Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs that include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data through correlation or other means. Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed data in connection with fair value measurements. The carrying amounts of the Company’s short-term financial instruments, including cash, accounts receivable, accounts payable, certain accrued expenses and revolving line of credit, 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 The Company records a valuation allowance when necessary to reduce its deferred tax assets to the net amount that the Company believes is more likely than not to be realized. The Company considers available evidence, both positive and negative, and use judgments regarding past and future events, including operating results and available tax planning strategies, in assessing the need for a valuation allowance. The Company recognizes tax benefits from uncertain tax positions only if the Company believes 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, the Company establishes reserves for uncertain tax positions. The Company adjusts 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 no uncertain tax positions as of December 31, 2018. The Company is no longer subject to income tax examinations for years before 2015. |
Intangible assets | Intangible assets |
Foreign currency translation | Foreign currency translation |
Earnings per share | Earnings per share |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization and Summary of Significant Accounting Policies [Abstract] | |
Schedule of Changes in Statement of Operations | Originally Topic 606 As Revised Net sales $ 38,933,458 $ (992,480 ) $ 37,940,978 Cost of goods sold 24,436,780 (127,648 ) 24,309,132 Gross profit 14,496,678 (864,832 ) 13,631,846 Operating expenses: Advertising and promotion 3,523,710 (864,832 ) 2,658,878 Selling and administrative 7,297,538 - 7,297,538 Total operating expenses 10,821,248 (864,832 ) 9,956,416 Operating income 3,675,430 - 3,675,430 Interest income 2,065 - 2,065 Income before income taxes 3,677,495 - 3,677,495 Provision for income taxes (1,073,961 ) - (1,073,961 ) Net income $ 2,603,534 $ - $ 2,603,534 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventories [Abstract] | |
Schedule of inventories | 2018 2017 Raw materials $ 4,320,131 $ 3,994,624 Finished goods 8,049,791 5,354,097 Inventories, gross 12,369,922 9,348,721 Inventory reserves (284,109 ) (274,295 ) Inventories, net $ 12,085,813 $ 9,074,426 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | Estimated Useful Life 2018 2017 Land $ 278,325 $ 278,325 Building and Improvements 30 years 9,548,922 4,673,409 Manufacturing and warehouse equipment 6-20 years 10,736,161 9,616,086 Office equipment and furniture 3-5 years 1,838,360 1,367,244 Leasehold improvements 10-15 years 577,068 567,898 Vehicles 3 years 10,020 10,020 Construction in process 80,682 5,197,780 Property, plant and equipment, gross 23,069,538 21,710,762 Less accumulated depreciation (13,420,301 ) (12,419,095 ) Property, plant and equipment, net $ 9,649,237 $ 9,291,667 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets [Abstract] | |
Schedule of intangible assets | December 31, 2018 Intangible Assets Cost Accumulated Net Patents $ 622,733 $ 439,972 $ 182,761 Trade names and trademarks 1,649,880 561,449 1,088,431 Customer list 525,663 48,186 477,477 Product formulas 262,832 24,093 238,739 Royalty rights 160,000 97,196 62,804 Total intangible assets $ 3,221,108 $ 1,170,896 $ 2,050,212 December 31, 2017 Intangible Assets 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 |
Schedule of allocated cost of intangible assets acquired from Snappy Marine and their respective useful lives | Intangible Assets Amount Life Trademarks and trade names $ 518,755 20 years Customer list 525,663 5 years Product formulas 262,832 5 years Total intangible assets acquired from Snappy Marine $ 1,307,250 |
Accrued Expenses Payable (Table
Accrued Expenses Payable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Expenses Payable [Abstract] | |
Summary of accrued expenses payable | 2018 2017 Accrued customer promotions $ 485,472 $ 343,172 Accrued payroll, commissions, and benefits 373,895 280,783 Other 249,538 188,107 Total accrued expenses payable $ 1,108,905 $ 812,062 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Long Term Debt [Abstract] | |
Schedule of company's long term debt | Current Portion Long Term Portion December 31, December 31, December 31, December 31, Obligations related to industrial development bond financing $ 247,985 $ 240,395 $ 3,974,256 $ 4,222,241 Note payable related to asset acquisition 177,701 --- 680,274 --- Capitalized equipment leases 19,593 19,238 11,596 31,188 Total principal of long term debt 445,279 259,633 4,666,126 4,253,429 Debt issuance costs (19,616 ) (19,616 ) (152,021 ) (171,636 ) Total long term debt $ 425,663 $ 240,017 $ 4,514,105 $ 4,081,793 |
Schedule of principal payments under long term obligations | Year ending December 31, 2019 $ 445,279 2020 449,936 2021 452,068 2022 465,873 2023 396,366 Thereafter 2,901,883 Total $ 5,111,405 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Summary of provision (benefit) for income taxes | 2018 2017 Federal – current $ 636,046 $ 1,101,503 Federal – deferred 120,760 (60,364 ) State – current 28,530 31,930 State – deferred 5,694 892 Total provision for income taxes $ 791,030 $ 1,073,961 |
Summary of reconciliation of the provision for income taxes at the statutory rate to the reported provision for income taxes | 2018 % 2017 % Income Tax computed at statutory rate $ 753,119 21.0 % $ 1,250,348 34.0 % State tax, net of federal benefit 22,468 0.6 % 21,074 0.6 % Share based compensation (1,233 ) (0.0 )% (6,303 ) (0.2 )% Domestic production activities deduction ---- ---- (110,410 ) (3.0 )% Effect of tax rate change on deferred taxes ---- ---- (90,980 ) (2.5 )% Permanent adjustments 14,040 0.4 % 24,202 0.7 % Tax credits and other 2,636 0.1 % (13,970 ) (0.4 )% Provision for income taxes $ 791,030 22.1 % $ 1,073,961 29.2 % |
Summary of deferred tax asset (liability) | 2018 2017 Deferred tax liability Inventory reserves $ 62,475 $ 68,631 Trade accounts receivable allowances 37,645 9,017 Depreciation and amortization (380,469 ) (231,543 ) Total net deferred tax liability $ (280,349 ) $ (153,895 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Schedule of minimum future rentals on the Company's non-cancelable operating leases | Year ending December 31, 2019 $ 96,064 2020 97,985 2021 99,945 2022 101,944 2023 103,983 Total $ 499,921 |
Stock options and awards (Table
Stock options and awards (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock options and awards [Abstract] | |
Schedule of outstanding stock options under company's stock options plans | At December 31, 2018: Date Granted Options Outstanding Exercisable Options Exercise Price Expiration Date Weighted Average Remaining Life 1/11/09 30,000 30,000 0.69 1/10/19 0.0 4/26/10 20,000 20,000 2.07 4/25/20 1.3 50,000 50,000 $ 1.24 0.6 At December 31, 2017: Date Granted Options Outstanding Exercisable Options Exercise Price Expiration Date Weighted Average Remaining Life 1/11/09 40,000 40,000 0.69 1/10/19 1.0 4/26/10 20,000 20,000 2.07 4/25/20 2.4 60,000 60,000 $ 1.15 1.5 |
Schedule of information relating to stock option transactions | 2018 2017 Weighted Weighted Average Average Exercise Exercise Shares Price Shares Price Options outstanding beginning of the year 60,000 $ 1.15 100,000 $ 1.22 Options exercised (10,000 ) 0.69 (40,000 ) 1.32 Total 50,000 $ 1.24 60,000 $ 1.15 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted earnings per common share | Years Ended 2018 2017 Earnings per common share –Basic Net income $ 2,795,249 $ 2,603,534 Weighted average number of common shares outstanding 9,279,872 9,190,429 Earnings per common share – Basic $ 0.30 $ 0.28 Earnings per common share – Diluted Net income $ 2,795,249 $ 2,603,534 Weighted average number of common shares outstanding 9,279,872 9,190,429 Dilutive effect of employee stock-based awards 39,231 63,373 Weighted average number of common shares outstanding - Diluted 9,319,103 9,253,802 Earnings per common share - Diluted $ 0.30 $ 0.28 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Recent Accounting Pronouncements [Abstract] | |
Schedule of statement of cash flows | Originally ASU 2016-18 As Revised Net cash provided by operating activities $ 2,928,277 $ - $ 2,928,277 Net cash used in investing activities (8,023,092 ) 2,747,360 (5,275,732 ) Net cash provided by financing activities 3,442,826 - 3,442,826 Effect of exchange rate fluctuations on cash 28 - 28 Net (decrease) increase in cash $ (1,651,961 ) $ 2,747,360 $ 1,095,399 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Changes in Statement of Operations [Line Items] | ||
Net sales | $ 41,799,545 | $ 37,940,978 |
Cost of goods sold | 27,402,356 | 24,309,132 |
Gross profit | 14,397,189 | 13,631,846 |
Operating expenses: | ||
Advertising and promotion | 3,050,858 | 2,658,878 |
Selling and administrative | 7,638,158 | 7,297,538 |
Total operating expenses | 10,689,016 | 9,956,416 |
Operating income | 3,708,173 | 3,675,430 |
Interest (expense) income, net | (121,894) | 2,065 |
Income before income taxes | 3,586,279 | 3,677,495 |
Provision for income taxes | (791,030) | (1,073,961) |
Net income | $ 2,795,249 | 2,603,534 |
Originally Reported [Member] | ||
Schedule of Changes in Statement of Operations [Line Items] | ||
Net sales | 38,933,458 | |
Cost of goods sold | 24,436,780 | |
Gross profit | 14,496,678 | |
Operating expenses: | ||
Advertising and promotion | 3,523,710 | |
Selling and administrative | 7,297,538 | |
Total operating expenses | 10,821,248 | |
Operating income | 3,675,430 | |
Interest (expense) income, net | 2,065 | |
Income before income taxes | 3,677,495 | |
Provision for income taxes | (1,073,961) | |
Net income | 2,603,534 | |
Topic 606 Adjustment [Member] | ||
Schedule of Changes in Statement of Operations [Line Items] | ||
Net sales | (992,480) | |
Cost of goods sold | (127,648) | |
Gross profit | (864,832) | |
Operating expenses: | ||
Advertising and promotion | (864,832) | |
Selling and administrative | ||
Total operating expenses | (864,832) | |
Operating income | ||
Interest (expense) income, net | ||
Income before income taxes | ||
Provision for income taxes | ||
Net income |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Organization and Summary of Significant Accounting Policies (Textual) | ||
Trade accounts receivable, allowance for doubtful accounts | $ 171,000 | $ 79,000 |
Bad debt expense | 35,000 | 199,000 |
Shipping and handling costs | 1,273,000 | 1,099,000 |
Advertising and promotion expense | 3,050,858 | 2,658,878 |
Research and development costs | 49,000 | 42,000 |
Depreciation expense | 1,001,206 | 884,881 |
Cost of goods sold | 837,478 | 695,184 |
Selling and administrative expenses | $ 163,728 | $ 189,697 |
Inventories (Details)
Inventories (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of inventories | ||
Raw materials | $ 4,320,131 | $ 3,994,624 |
Finished goods | 8,049,791 | 5,354,097 |
Inventories, gross | 12,369,922 | 9,348,721 |
Inventory reserves | (284,109) | (274,295) |
Inventories, net | $ 12,085,813 | $ 9,074,426 |
Inventories (Details Textual)
Inventories (Details Textual) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Inventories (Textual) | ||
Inventories managed at the customer's warehouses | $ 495,000 | $ 494,000 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of property, plant and equipment | ||
Land | $ 278,325 | $ 278,325 |
Building and Improvements | 9,548,922 | 4,673,409 |
Manufacturing and warehouse equipment | 10,736,161 | 9,616,086 |
Office equipment and furniture | 1,838,360 | 1,367,244 |
Leasehold improvements | 577,068 | 567,898 |
Vehicles | 10,020 | 10,020 |
Construction in process | 80,682 | 5,197,780 |
Property, plant and equipment, gross | 23,069,538 | 21,710,762 |
Less accumulated depreciation | (13,420,301) | (12,419,095) |
Property, plant and equipment, net | $ 9,649,237 | $ 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 and Equipment_3
Property, Plant and Equipment (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant & Equipment (Textual) | ||
Construction in process | $ 80,682 | $ 5,197,780 |
Kinpak [Member] | ||
Property, Plant & Equipment (Textual) | ||
Construction in process | 46,996 | $ 5,087,897 |
Expenditures on expansion project aggregated | 6,000,000 | |
Estimated total cost of expansion project | $ 6,700,000 |
Snappy Marine Asset Acquisiti_2
Snappy Marine Asset Acquisition (Details) | Jul. 13, 2018USD ($) |
Snappy Marine Asset Acquisition (Textual) | |
Purchase price of asset acquisition | $ 1,358,882 |
Purchase price of Intellectual Property acquisition | 1,350,000 |
Purchase price of Inventory acquisition | 8,882 |
Promissory note, aggregate maximum offset amount | 25,000 |
Legal costs directly related to asset acquisition | 39,722 |
Snappy Marine, Inc. [Member] | |
Snappy Marine Asset Acquisition (Textual) | |
Cash paid at closing to seller | 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 that commenced 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 was recorded as principal, and the remaining $69,472, representing an imputed interest rate of 2.87% per annum, is being recorded as interest expense over the term of the note). |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, Cost | $ 3,221,108 | $ 1,913,858 |
Intangible assets, Accumulated Amortization | 1,170,896 | 1,016,450 |
Intangible assets, Net | 2,050,212 | 897,408 |
Patents [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, Cost | 622,733 | 622,733 |
Intangible assets, Accumulated Amortization | 439,972 | 387,636 |
Intangible assets, Net | 182,761 | 235,097 |
Trade names and trademarks [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, Cost | 1,649,880 | 1,131,125 |
Intangible assets, Accumulated Amortization | 561,449 | 549,561 |
Intangible assets, Net | 1,088,431 | 581,564 |
Customer list [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, Cost | 525,663 | |
Intangible assets, Accumulated Amortization | 48,186 | |
Intangible assets, Net | 477,477 | |
Product formulas [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, Cost | 262,832 | |
Intangible assets, Accumulated Amortization | 24,093 | |
Intangible assets, Net | 238,739 | |
Royalty rights [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, Cost | 160,000 | 160,000 |
Intangible assets, Accumulated Amortization | 97,196 | 79,253 |
Intangible assets, Net | $ 62,804 | $ 80,747 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Indefinite-lived Intangible Assets [Line Items] | |
Total intangible assets acquired from Snappy Marine | $ 1,307,250 |
Trademarks and trade names [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Total intangible assets acquired from Snappy Marine | $ 518,755 |
Estimated useful life of intangible assets | 20 years |
Customer list [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Total intangible assets acquired from Snappy Marine | $ 525,663 |
Estimated useful life of intangible assets | 5 years |
Product formulas [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Total intangible assets acquired from Snappy Marine | $ 262,832 |
Estimated useful life of intangible assets | 5 years |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible Assets (Textual) | ||
Amortization expense related to intangible assets | $ 154,446 | $ 70,280 |
Revolving Line of Credit (Detai
Revolving Line of Credit (Details) - Business Loan Agreement [Member] - USD ($) | Aug. 31, 2017 | Aug. 31, 2018 | Dec. 31, 2018 |
Revolving Line of Credit (Textual) | |||
Term of revolving line of credit, description | The Company was provided a revolving line of credit. Under the revolving line of credit, 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 | (i) if no demand for payment was made by Regions Bank, all outstanding amounts were due and payable one year from the date of the Predecessor Agreement; (ii) Interest on amounts borrowed under the Predecessor Agreement was payable monthly at the one month LIBOR rate plus 1.5% per annum, computed on a 365/360 basis. The Predecessor Agreement expired on August 31, 2018 and was replaced by the Business Loan Agreement. | LIBOR rate plus 1.35% per annum, computed on a 365/360 basis. | |
Due date of outstanding principal and interest borrowed under revolving line of credit | Aug. 31, 2021 | ||
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) prior year current maturities of Company long term debt plus 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; "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" and "prior year current maturities of long term debt" generally is defined as the principal portions of long-term debt maturing within one year as listed at the last quarter end of the prior completed four fiscal quarters. | ||
Majority shareholder's ownership, percentage | 50.00% | ||
Revolving line of credit | $ 6,000,000 |
Accrued Expenses Payable (Detai
Accrued Expenses Payable (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of accrued expenses payable | ||
Accrued customer promotions | $ 485,472 | $ 343,172 |
Accrued payroll, commissions, and benefits | 373,895 | 280,783 |
Other | 249,538 | 188,107 |
Total accrued expenses payable | $ 1,108,905 | $ 812,062 |
Long Term Debt (Details)
Long Term Debt (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of long term debt | ||
Total principal of long term debt, Current Portion | $ 445,279 | $ 259,633 |
Total principal of long term debt, Long Term Portion | 4,666,126 | 4,253,429 |
Debt issuance costs, Current Portion | (19,616) | (19,616) |
Debt issuance costs, Long Term Portion | (152,021) | (171,636) |
Total long term debt, Current Portion | 425,663 | 240,017 |
Total long term debt, Long Term Portion | 4,514,105 | 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 | 247,985 | 240,395 |
Obligations related to industrial development bond financing, Long Term portion | 3,974,256 | 4,222,241 |
Note payable related to asset acquisition [Member] | ||
Summary of long term debt | ||
Note payable related to asset acquisition, Current Portion | 177,701 | |
Note payable related to asset acquisition, Long Term Portion | 680,274 | |
Capitalized equipment leases [Member] | ||
Summary of long term debt | ||
Capitalized equipment leases, Current Portion | 19,593 | 19,238 |
Capitalized equipment leases, Long Term Portion | $ 11,596 | $ 31,188 |
Long Term Debt (Details 1)
Long Term Debt (Details 1) | Dec. 31, 2018USD ($) |
Summary of principal payments under Company's long term obligations | |
2019 | $ 445,279 |
2020 | 449,936 |
2021 | 452,068 |
2022 | 465,873 |
2023 | 396,366 |
Thereafter | 2,901,883 |
Total | $ 5,111,405 |
Long Term Debt (Details Textual
Long Term Debt (Details Textual) | 1 Months Ended | 12 Months Ended | |
Sep. 26, 2017USD ($) | Dec. 31, 2018USD ($)Installments | Dec. 31, 2017USD ($) | |
Industrial Development Bond Financing [Member] | |||
Long Term Debt (Textual) | |||
Term loan, description | The $4,500,000 proceeds of the Bond sale, approximately $2,161,000 has been applied to reimburse Kinpak for Expansion 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 | ||
Proceeds of the bond sale | $ 4,500,000 | ||
Payments for debt issuance costs | $ 196,095 | ||
Financial covenants under credit agreement, description | The Company is subject to certain covenants, including financial covenants requiring that the Company maintain (i) a minimum fixed charge ratio (generally, the ratio of (A) EBITDA minus the sum of Company's distributions to its shareholders, taxes paid and unfunded capital expenditures to (B) current maturities of Company long-term debt plus interest expense) of 1.2 to 1, tested quarterly, and (ii) a ratio of funded debt (as defined in the guaranty agreement) divided by the sum of net worth and funded debt of 0.75 to 1, tested quarterly. 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. | ||
Other Long Term Obligations [Member] | |||
Long Term Debt (Textual) | |||
Aggregate capital lease | $ 31,000 | $ 50,000 | |
Maturity period for capital lease | Mature on July 1, 2020. | ||
Percentage of interest rates | 2.00% | ||
Promissory note, description | The Company's agreement to purchase the assets of Snappy Marine (see Note 4 above), 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 promissory note, $930,528 was recorded as principal, and the remaining $69,472, representing an imputed interest rate of 2.87% per annum, is being recorded as interest expense over the term of the note). | ||
Monthly installment | $ 16,667 | ||
Debt payment, terms | Over a 60 month period that commenced on August 1, 2018, with a final payment due and payable on July 1, 2023. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of provision for income taxes | ||
Federal - current | $ 636,046 | $ 1,101,503 |
Federal - deferred | 120,760 | (60,364) |
State - current | 28,530 | 31,930 |
State - deferred | 5,694 | 892 |
Total provision for income taxes | $ 791,030 | $ 1,073,961 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
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 | $ 753,119 | $ 1,250,348 |
State tax, net of federal benefit | 22,468 | 21,074 |
Share based compensation | (1,233) | (6,303) |
Domestic production activities deduction | (110,410) | |
Effect of tax rate change on deferred taxes | (90,980) | |
Permanent adjustments | 14,040 | 24,202 |
Tax credits and other | 2,636 | (13,970) |
Total provision for income taxes | $ 791,030 | $ 1,073,961 |
Income Tax computed at statutory rate, percentage | 21.00% | 34.00% |
State tax, net of federal benefit, percent | 0.60% | 0.60% |
Share based compensation, percent | 0.00% | (0.20%) |
Domestic production activities deduction, percent | (3.00%) | |
Effect of tax rate change on deferred taxes, percent | (2.50%) | |
Permanent adjustments, percent | 0.40% | 0.70% |
Tax credits and other, percent | 0.10% | (0.40%) |
Provision for income taxes | 22.10% | 29.20% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Income Taxes [Abstract] | ||
Inventory reserves | $ 62,475 | $ 68,631 |
Trade accounts receivable allowances | 37,645 | 9,017 |
Depreciation and amortization | (380,469) | (231,543) |
Total net deferred tax liability | $ (280,349) | $ (153,895) |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes [Abstract] | ||
Income tax rates, description | The legislation significantly changes United States tax law by, among other things, reducing the Company's federal corporate income tax rate from 34% to 21%, effective January 1, 2018. | |
Deferred tax liabilities, net | $ 90,980 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transactions (Textual) | ||
Sales to the affiliated companies | $ 2,190,000 | $ 2,070,000 |
Administrative fees | 760,000 | 764,000 |
Receivables due from affiliated companies | 1,046,000 | 1,584,000 |
Amount paid for the production of television commercials | 21,000 | |
Reimburse business related expenditures | 151,000 | 120,000 |
Research and development costs | 49,000 | 42,000 |
Service [Member] | ||
Related Party Transactions (Textual) | ||
Sales to the affiliated companies | 77,000 | 106,250 |
Amount paid for the production of television commercials | 21,000 | |
Sales promotional events | 14,000 | 64,250 |
Research and development costs | 42,000 | 42,000 |
Insurance broker [Member] | ||
Related Party Transactions (Textual) | ||
Insurance premiums paid | $ 1,261,000 | $ 1,235,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Dec. 31, 2018USD ($) |
Year ending December 31, | |
2019 | $ 96,064 |
2020 | 97,985 |
2021 | 99,945 |
2022 | 101,944 |
2023 | 103,983 |
Total | $ 499,921 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Textual) | Aug. 01, 2016USD ($)ft² | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Fort Lauderdale, Florida [Member] | |||
Commitments and contingencies (Textual) | |||
Extended expiration date of lease | Dec. 31, 2023 | ||
Annual 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 | $ 97,000 | $ 97,000 | |
Montgomery, Alabama [Member] | |||
Commitments and contingencies (Textual) | |||
Area of rent leases | ft² | 15,000 | ||
Monthly rent | $ 4,375 | ||
Expiration date | Jul. 31, 2018 |
Stock options and awards (Detai
Stock options and awards (Details) - Employee Stock Option [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of outstanding options, exercisable options, exercise price, expiration date, weighted average remaining life under company stock option plans [Abstract] | |||
Shares Underlying Options Outstanding | 50,000 | 60,000 | 100,000 |
Shares Underlying Exercisable Options | 50,000 | 60,000 | |
Exercise Price | $ 1.24 | $ 1.15 | |
Weighted Average Remaining Life | 7 months 6 days | 1 year 6 months | |
1/11/09 [Member] | |||
Summary of outstanding options, exercisable options, exercise price, expiration date, weighted average remaining life under company stock option plans [Abstract] | |||
Date Granted | Jan. 11, 2009 | Jan. 11, 2009 | |
Shares Underlying Options Outstanding | 30,000 | 40,000 | |
Shares Underlying Exercisable Options | 30,000 | 40,000 | |
Exercise Price | $ 0.69 | $ 0.69 | |
Expiration Date | Jan. 10, 2019 | Jan. 10, 2019 | |
Weighted Average Remaining Life | 0 years | 1 year | |
4/26/10 [Member] | |||
Summary of outstanding options, exercisable options, exercise price, expiration date, weighted average remaining life under company stock option plans [Abstract] | |||
Date Granted | Apr. 26, 2010 | Apr. 26, 2010 | |
Shares Underlying Options Outstanding | 20,000 | 20,000 | |
Shares Underlying Exercisable Options | 20,000 | 20,000 | |
Exercise Price | $ 2.07 | $ 2.07 | |
Expiration Date | Apr. 25, 2020 | Apr. 25, 2020 | |
Weighted Average Remaining Life | 1 year 3 months 19 days | 2 years 4 months 24 days |
Stock Options and Awards (Det_2
Stock Options and Awards (Details 1) - Stock option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule Of Information Relating To Stock Option Transactions [Abstract] | ||
Shares, Options outstanding beginning of the year | 60,000 | 100,000 |
Shares, Options exercised | (10,000) | (40,000) |
Shares, Options outstanding end of the year | 50,000 | 60,000 |
Weighted Average Exercise Price, Options outstanding beginning | $ 1.15 | $ 1.22 |
Weighted Average Exercise Price, Options exercised | 0.69 | 1.32 |
Weighted Average Exercise Price, Options outstanding ending | $ 1.24 | $ 1.15 |
Stock Options and Awards (Det_3
Stock Options and Awards (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |
May 29, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Options and Awards (Textual) | |||
Number of shares authorized under equity compensation plan | 630,000 | ||
Stock awards granted | 81,400 | 79,100 | |
Number of shares withhold in connection with net exercise feature of options | 1,490 | 5,957 | |
Shares issued to option holders shares | 8,510 | 34,043 | |
Common stock available for future issuance under equity compensation plan | 262,000 | ||
Stock awards granted, net | 75,101 | 73,600 | |
Stock based compensation attributable to stock award | $ 330,823 | $ 324,145 | |
Payments for taxes related to net share settlements of stock awards | $ 25,794 | 22,468 | |
Term of previously non-qualified options granted | 10 years | ||
Termination period of previously non-qualified options | Apr. 25, 2020 | ||
Option exercised | $ 26,400 | ||
Stock option [Member] | |||
Stock Options and Awards (Textual) | |||
Number of shares withhold in connection with net exercise feature of options | 6,299 | 5,500 | |
Stock option exercised | (10,000) | (40,000) |
Major Customers (Details)
Major Customers (Details) - Customers | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Major Customers (Textual) | ||
Description of changed payment terms | 30 days to 90 days. | |
Net sales [Member] | ||
Major Customers (Textual) | ||
Concentration risk, percentage | 10.00% | 10.00% |
Number of customers | 2 | 2 |
Net sales [Member] | Customer One [Member] | ||
Major Customers (Textual) | ||
Concentration risk, percentage | 21.70% | 22.50% |
Net sales [Member] | Customer Two [Member] | ||
Major Customers (Textual) | ||
Concentration risk, percentage | 11.40% | 11.90% |
Trade accounts receivable [Member] | ||
Major Customers (Textual) | ||
Concentration risk, percentage | 41.00% | 25.50% |
Number of customers | 2 | 2 |
Trade accounts receivable [Member] | Customer One [Member] | ||
Major Customers (Textual) | ||
Concentration risk, percentage | 25.20% | 14.00% |
Trade accounts receivable [Member] | Customer Two [Member] | ||
Major Customers (Textual) | ||
Concentration risk, percentage | 15.80% | 11.50% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings per common share - Basic | ||
Net income | $ 2,795,249 | $ 2,603,534 |
Weighted average number of common shares outstanding | 9,279,872 | 9,190,429 |
Earnings per common share - Basic | $ 0.30 | $ 0.28 |
Earnings per common share - Diluted | ||
Net income | $ 2,795,249 | $ 2,603,534 |
Weighted average number of common shares outstanding | 9,279,872 | 9,190,429 |
Dilutive effect of employee stock-based awards | 39,231 | 63,373 |
Weighted average number of common shares outstanding - Diluted | 9,319,103 | 9,253,802 |
Earnings per common share - Diluted | $ 0.30 | $ 0.28 |
Cash Dividends (Details)
Cash Dividends (Details) - USD ($) | May 11, 2017 | Apr. 16, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 02, 2018 | Apr. 27, 2017 |
Cash Dividends (Textual) | ||||||
Common stock, shares outstanding | 9,338,191 | 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 paid per common share | $ 0.06 | $ 0.06 |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by operating activities | $ 1,218,079 | $ 2,928,277 |
Net cash used in investing activities | (1,735,498) | (5,275,732) |
Net cash provided by financing activities | (913,254) | 3,442,826 |
Effect of exchange rate fluctuations on cash | (1,247) | 28 |
Net (decrease) increase in cash | $ (1,431,920) | 1,095,399 |
Originally Reported [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by operating activities | 2,928,277 | |
Net cash used in investing activities | (8,023,092) | |
Net cash provided by financing activities | 3,442,826 | |
Effect of exchange rate fluctuations on cash | 28 | |
Net (decrease) increase in cash | (1,651,961) | |
ASU 2016-18 Adjustment [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by operating activities | ||
Net cash used in investing activities | 2,747,360 | |
Net cash provided by financing activities | ||
Effect of exchange rate fluctuations on cash | ||
Net (decrease) increase in cash | $ 2,747,360 |
Recent Accounting Pronounceme_4
Recent Accounting Pronouncements (Details Textual) | Dec. 31, 2018USD ($) |
Recent Accounting Pronouncements [Abstract] | |
Portfolio of lease assets and liabilities will be recognized on its balance sheet upon adoption | $ 430,000 |
Subsequent Event (Details)
Subsequent Event (Details) | 1 Months Ended |
Mar. 22, 2019 | |
Subsequent Event [Member] | Board of Directors [Member] | |
Subsequent Event (Textual) | |
Subsequent event, description | The Company's Board of Directors declared a special cash dividend of $0.05 per common share payable on April 19, 2019 to all shareholders of record on April 5, 2019. At the time of the filing of this report there were 9,366,119 shares of common stock outstanding; therefore, dividends aggregating $468,306 will be paid on April 19, 2019. |