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    Stock Alert for Ocean Bio-Chem Inc. (OBCI)

    Ocean Bio-Chem Inc. (OBCI) engages in the manufacturing, marketing and distribution of a full line of maintenance and care products for marine, automobile, motorcycle, power sports, outdoor power equipment, RV, agriculture, hardware, lawn & garden and OEMs. Its products are sold under the Starbrite, StarTron, Sea Safe, Sta-Put, Extend-a-Brush and Nos Guard names, as well as private label brands. The Company posted net sales of approximately $27.4 million for the year ended December 31, 2010, marking its second consecutive year of record net sales.

    OBCI was founded in 1973 and is based in Fort Lauderdale, Florida.  Its manufacturing and distribution facility is located in Montgomery, Alabama.

    Share Statistics (28-Mar-11) FY

    2008

    FY

    2009

    %

    Chg

    Q3

    2009

    Q3

    2010

    %

    Chg

    Symbol OBCI Revenue, $Mn 20.92 24.63 17.7% 8.91 9.02 1.2%
    Current price $3.24 Gross marg. 28.7% 32.0% 11.5% 30.5% 35.4% 16.1%
    52wk Range: $1.35-3.93 Oper. margin 7.3% 15.4%
    Avg Vol (3m): 9,187 Net margin 0.7% 4.3% 514.3% 6.4% 8.9% 39.1%
    Market Cap. 25.44M
    Shares Outstanding 7.85M EPS, $ 0.02 0.14 600.0% 0.07 0.09 28.6%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    OBCI closed higher Monday as it posted record net income for the year, as well as its second consecutive year of record net sales. OBCI president and CEO Peter Dornau said the Company has been successful in continuing to increase sales in marine markets as well as expanding sales in new and newer markets. The Company saw an increase in gross profit margin due to strong sales of higher margin products, as well as increased production efficiencies and higher volume at its Kinpak manufacturing subsidiary.

    Dornau also said that in 2010, the Company completed the joint venture Odorstar Technology LLC. with unique patented products and delivery system to safely eliminate mold, mildew odors.

    “We have completed EPA registrations of the products in all states (except California), expanded and improved manufacturing operations for the production of the Odorstar products, designed new consumer packaging for an easier, safer use of the product,” Dornau said in a press release.  “These expenditures have all been reflected in the Company’s 2010 financial statements. The process to EPA registration of Odorstar products in all states has taken longer than anticipated. With the state EPA registrations complete, the Company has started shipping products to its larger customers in the marine market. We are optimistic that the Odorstar products will be accretive to sales in 2011, as we expand distribution in other markets including home care, auto and mold remediation companies. Our joint venture partner has been extremely successful in selling products in his designated markets.”

    For the first two months of 2011, Dornau said the Company saw an increase in business activity, resulting in a 30% rise in gross sales. This is a good indicator that 2011 will be another strong year for the Company.

    Shares of OBCI gained 50.70% to close Monday at $3.24. It set a new 52-week high of $3.93 early in the session.  About 2.45 million shares have traded hands during the session, versus the 10-day average volume of 8K. The stock is currently trading above its 50-day and 200-day moving averages of $2.01 and $1.93, respectively. Market capitalization currently stands at $25.44 million and it has 7.85 million outstanding shares.

    Founded in 1973, OBCI claims to be the leading manufacturer and distributor of maintenance and appearance products for the marine, automotive, recreational vehicle and home care markets throughout North America.  The Company reported record revenues in 2009, which can be attributed to its continued implementation of a strategic plan of gaining additional market share in the marine sector as well as diversifying into new markets. OCBI unveiled new and improved products as part of this initiative.

    Products

    Marine

    The Company’s marine line consists of polishes, cleaners, protectants and waxes of various formulations under the Star brite brand name, StarTron enzyme fuel treatment, as well as private label products. The line also includes motor oils, various vinyl protectants, cleaners, teak cleaners, teak oils, bilge cleaners, hull cleaners, silicone sealants, polyurethane sealants, polysulfide sealants, gasket materials, lubricants, antifouling additives and anti-freeze coolants. In addition, it manufactures a line of brushes, poles and tie-downs, and other related marine accessories.

    Automotive

    The Company manufactures a line of automotive products under the Star brite brand name, including StarTron enzyme fuel treatment for both diesel and gas engines, hydraulic, gear and motor oils, and related items. In addition, anti-freeze and windshield washes are produced in varying formulations both under the Star brite brand, as well as under private labels for customers. It also produces a line of automotive polishes, cleaners and associated appearance items.

    Recreational Vehicle/Power Sports

    The Company markets StarTron to the recreational vehicle market, including snowmobiles, all-terrain vehicle’s (ATV’s) and motorcycles. Other recreational vehicle products are cleaners, polishes, detergents, fabric cleaners and protectors, silicone sealants, water proofers, gasket materials, degreasers, vinyl cleaners, protectors, toilet treatment fluids, and anti-freeze coolants.

    The Company blends and packages a variety of chemical formulations. In addition, it also manufactures for sale to various customers assorted styles of both polyvinyl chloride (PVC) and high-density polyethylene (HDPE) blow molded bottles.

    Financial Summary

    OBCI reported record net income for the year ended December 31, 2010, of approximately $2.0 million, compared to net income of $1.1 million for 2009, an increase of approximately 92%. Basic earnings per share were $0.26 per share compared to $0.14 per share for the year 2009. Diluted earnings per share were $0.24 per share compared to $0.14 per share for the year ended 2009.

    Record net sales, for the year ended December 31, 2010, were approximately $27.4 million compared to approximately $24.6 million for 2009, an increase of $2.8 million or 11%. The Company also reported record gross margin percent of 34.2% and record gross margin dollars of $9.4 million. Gross profit margin percent increased approximately 2.3%, compared to 2009 gross profit margin percent.

    Source: http://www.oceanbiochem.com/


    Financial Strength (28-Mar-2011) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 0.91 0.10 0.65 0.67
    Current Ratio (MRQ) 2.09 0.15 0.89 0.99
    LT Debt to Equity (MRQ) 23.20 6.71 21.32 115.05
    Total Debt to Equity (MRQ) 49.11 9.08 30.82 164.00
    Interest Coverage (TTM) 7.35 0.98 0.55 16.78

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    No consensus recommendations data available.

    Source: http://www.reuters.com/finance/stocks/analyst?symbol=OBCI.OQ

    Technical Analysis

    Source: http://stockcharts.com

    OBCI is trading above its 20-day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.

    OBCI’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility.

    The MACD for OBCI currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Mar28-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    Procter & Gamble Company PG 60.66 169.90B 15.28 13.94 2.07 1.98
    Ashland Inc. ASH 57.45 4.54B 14.84 11.97 0.75 0.71
    The Clorox Company CLX 69.68 9.59B 17.69 15.73 1.83 1.76
    Oil-Dri Corp. of America ODC 20.50 145.51M n/a n/a n/a n/a
    Zep Inc. ZEP 16.88 368.68M 14.55 12.23 0.57 0.55
    Cleaning Products Median n/a n/a n/a n/a
    Ocean Bio-Chem Inc. OBCI 3.24 25.44M n/a n/a n/a n/a

    Source: Thomson Financial

    Source: Yahoo Finance

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