Margo Caribe, Inc. Announces Third Quarter 2023 Results

Rhea-AI Summary

Margo Caribe, Inc. reports Q3 operating results for its subsidiary Margo Outdoor Living, Inc. with net sales of $9.8 million, down 3% from last year. Net income is approximately $895 thousand, a 285% increase from the prior year. For the nine-month period, net sales are $36.4 million, down 10% from last year, and pre-tax income is $7.9 million, a 26% improvement.

Positive

• Margo Outdoor Living, Inc. saw a significant lift in operating income through higher product margins and reducing operating expenses. Cash balances ended the quarter at $8.0 million, up 26% from last year. Debt ended the quarter at $3.7 million, down 37% from last year. The company has access to approximately $15 million in liquidity.

Negative

• Net sales for Margo Outdoor Living, Inc. were down 3% in Q3 compared to last year. Net sales for the nine-month period were down 10% compared to last year.

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.

FAQ

What were the net sales for Margo Outdoor Living, Inc. in Q3?

The net sales for Margo Outdoor Living, Inc. in Q3 were $9.8 million, a 3% decrease from last year.

What was the net income for Margo Outdoor Living, Inc. in Q3?

The net income for Margo Outdoor Living, Inc. in Q3 was approximately $895 thousand, a 285% increase from last year.

What were the net sales for the nine-month period?

The net sales for the nine-month period were $36.4 million, a 10% decrease from last year.

What was the pre-tax income for the nine-month period?

The pre-tax income for the nine-month period was approximately $7.9 million, a 26% improvement from last year.

What were the cash balances at the end of the quarter?

The cash balances at the end of the quarter were $8.0 million, a 26% increase from last year.

What was the debt at the end of the quarter?

The debt at the end of the quarter was $3.7 million, a 37% decrease from last year.

How much liquidity does the company have?

The company has access to approximately $15 million in liquidity.