Shares of Ocean Bio-Chem, Inc. (NASDAQ: OBCI) swiftly turned higher because investors were delighted by the earnings results that the company reported for its 2Q2016. The management also sounded optimistic about Ocean Bio-Chem’s future prospects, especially for the balance of 2016.
But as an investor or a prospective one, the 2Q earnings report contained a number of details that you are better of keeping in mind because they can help you gauge how the future is going to unfold.
2Q2016 earnings highlight
For 2Q2016, Ocean Bio-Chem, Inc. (NASDAQ: OBCI) generated net revenue of $8.72 million, slightly below $8.74 million generated in the same period last year, but better than $6.75 million in the previous quarter. EPS in the latest quarter came in at $0.07, better than $0.01 a year ago.
The EPS in 2Q2016 came on net income of $657,000, which increased a whopping 477% over the figure reported in the same quarter last year.
Ocean Bio-Chem also reported improvements in gross margin and gross profit for the latest quarter. Gross margin of 42.1% was the highest the company has ever achieved in any 2Q in many years. Gross profit of $3.7 million was also a record figure.
The catalysts in 2Q for Bio-Chem, Inc. (NASDAQ: OBCI)
What drove Ocean Bio-Chem, Inc. (NASDAQ: OBCI)’s gains in 2Q? The company’s CEO Peter Dornau tried to shed light on what transpired in the quarter. She said that the solid quarterly performance was first supported by a more profitable sales mix. He particularly cited strong sales of the Star Brite line of products.
The other growth catalyst in the quarter was decline in expenses related to marketing and promotion activities. Those costs fell 7% YoY.
Lower legal expenses in 2Q also helped Bio-Chem, Inc. (NASDAQ: OBCI) to post improved financial results in the quarter. The decline in legal costs was particularly contribution by the completion of the advertising litigation involving an industry rival. Legal expenses related to the suit have impacted earnings from last year until the previous quarter.