MARGO CARIBE INC. JACKSONVILLE, Fla., Oct. 26, 2023 /PRNewswire/ -- Margo Caribe, Inc. (OTC SYMBOL: MRGO) (Margo), a market leader in the home and garden segment, today announced operating results of its wholly-owned subsidiary, Margo Outdoor Living, Inc. for the quarter ended September 30, 2023.
The Company reported unaudited results for the three-month period ended September 30, 2023, that included net sales of $9.8 million, 3 percent lower than the same quarter last year and net income of approximately $895 thousand, 285 percent higher than the prior year. Unaudited results for the nine-month period ended September 30, 2023, included net sales of $36.4 million, down 10 percent from the prior year and pre-tax income of approximately $7.9 million, a 26 percent improvement compared to the same period last year.
"Overall, we were pleased with our performance in the third quarter," said Michael Spector, president, and CEO. "We saw an improving sales trend during the third quarter, but sales this year remain under pressure from our customer's inventory realignment, inflation influenced pricing and softening demand for consumer discretionary spending in our segment. We were able to post a significant lift in operating income through higher product margins and reducing operating expenses."
Mr. Spector added, "We are making good progress with strategic initiatives to diversify our product offering and expand our international supplier network. We see specific niche opportunities in the pottery, tile and commodity rock segments that will contribute solid top-line growth with improved margins."
Highlights for the Quarter Ended September 30, 2023
- Revenue was $9.8 million for the three-month period ending September 30, 2023, down 3 percent from the same period in the prior year. For the nine-month period, revenue totaled $36.4 million, down 10.3 percent compared to the prior year.
- Net income for the three-month period was $895 thousand, an increase of $662 thousand or 285 percent from the same period last year and $6.0 million for the nine-month period, up 23.6 percent from the prior year.
- Pre-tax income improved 26.5 percent, or $1.7 million, for the nine-month period ended September 30, 2023, compared to the prior year, driven primarily by a 7.4 percentage point improvement in gross margin and a 5.7 percent decrease in operating expenses.
- Cash flow has remained strong through the third quarter 2023. Cash balances ended the quarter at $8.0 million, up 26 percent from the same period last year and 47 percent higher from year-end 2022.
- Debt, including related party notes, ended the second quarter at $3.7 million, down 37 percent or $2.2 million from the same period last year.
- The company ended the third quarter with access to approximately $15 million in liquidity consisting of $7.2 million in asset-based lending credit availability, based on advance rates on accounts receivable and inventory and approximately $7.7 million in uncommitted cash.
Margo Outdoor Living, Inc. | ||
Condensed Balance Sheet | ||
(A wholly-owned subsidiary of Margo Caribe, Inc.) | ||
Statements of Operations and Retained Earnings | ||
In Thousands | September 30, | |
2023 | 2022 | |
Unaudited | Unaudited | |
Assets | ||
Cash | $8,002 | $6,355 |
Accounts receivable, net | $3,817 | $4,632 |
Inventories, net | $5,805 | $5,311 |
Prepaid expenses | $535 | $1,965 |
Other | $2,130 | $201 |
Total Current Assets | $20,290 | $18,465 |
Property and equipment, net | $6,720 | $7,900 |
Right-of-Use Assets, operating leases | $12,097 | $13,032 |
Total Assets | $39,107 | $39,397 |
Liabilities and Stockholders' Equity | ||
Accounts payable | $535 | $600 |
Deferred tax liability | $466 | $704 |
Revolving line-of-credit | $0 | $0 |
Debt | $1,721 | $3,666 |
Note payable to related parties | $1,970 | $2,179 |
Operating lease liabilities | $13,381 | $14,536 |
Other | -$1,996 | $236 |
Total Liabilities | $16,077 | $21,921 |
Total Stockholders' Equity | $23,030 | $17,475 |
Total Liabilities and Stockholders' Equity | $39,107 | $39,397 |
Margo Outdoor Living, Inc. | ||||||
Statements of Income | ||||||
(A wholly-owned subsidiary of Margo Caribe, Inc.) | ||||||
Statements of Operations and Retained Earnings | ||||||
In thousands except per share data | Nine Months Ended | Three Months Ended | ||||
September 30, | September 30, | |||||
2023 | 2022 | 2023 | 2022 | |||
Unaudited | Unaudited | Unaudited | Unaudited | |||
Revenues | ||||||
Distribution and eCommerce | $ 32,390 | $ 36,663 | $ 9,089 | $ 9,324 | ||
Manufacturing | 3,989 | 3,904 | 758 | $ 833 | ||
Total Revenue | 36,379 | 40,567 | 9,848 | 10,156 | ||
Cost of Sales | 21,322 | 26,769 | 6,297 | 7,255 | ||
Gross Profit (Loss) | 15,057 | 13,798 | 3,551 | 2,901 | ||
Operating expenses | 6,826 | 7,240 | 2,265 | 2,494 | ||
Income (Loss) from Operations | 8,231 | 6,558 | 1,286 | 407 | ||
Interest income (expense) | (309) | (296) | (104) | (108) | ||
Income (Loss) Before Income Tax | 7,922 | 6,261 | 1,182 | 299 | ||
Income Tax Benefit (Provision) | (1,925) | (1,408) | (287) | (67) | ||
Net Income (Loss) | 5,997 | 4,853 | 895 | 232 | ||
Earnings per common share | $ 1.24 | $ 1.21 | $ 0.19 | $ 0.06 | ||
About Margo Caribe, Inc.
Margo Caribe, Inc. through its subsidiary Margo Outdoor Living, Inc. (MOL). has benefited by building key relationships with the largest big-box retailers in its industry segment. Its focus on product development, world-wide supplier sourcing, cost-effective logistics and state-of-the-art automation has contributed to its success in growing both top and bottom-line results. MOL offers a wide range of products in the lawn and garden segment. This includes sales of landscaping pebbles, mulch, glass, pottery and tile products. The Company's customer base is predominantly big-box retailers but also sells products directly to consumers through the eCommerce sales channel.
MOL is a wholly-owned subsidiary of Margo Caribe, Inc., a Puerto Rico entity. Effective December 22, 2020, MOL converted from a Florida corporation to a Delaware corporation and changed its name from Margo State Line, Inc. to Margo Outdoor Living, Inc.
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SOURCE Margo Caribe, Inc.
