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Margo Caribe, Inc. Announces Second Quarter 2022 Results

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JACKSONVILLE, Fla., July 21, 2022 /PRNewswire/ -- Margo Caribe, Inc. (OTC SYMBOL: MRGO) (Margo), a market leader in the home and garden segment, today announced fourth quarter and full year operating results of its wholly-owned subsidiary, Margo Outdoor Living, Inc. for the quarter ended June 30, 2022.

Margo Caribe, Inc.
Margo Caribe, Inc.

Net sales for the second quarter ended June 30, 2022, totaled $16.7 million, up 22 percent from the prior quarter and 14 percent lower than second quarter of last year. The Company reported second quarter unaudited results including pre-tax income of approximately $3.0 million and net income of $2.3 million or $.58 per share.

"The year-over-year decline in sales can be specifically attributed to a single customer participating in a short-term transactional program, excluding this customer, total sales were down less than 1 percent compared to prior year. We believe our sales growth to be consistent with industry segment growth levels given the impact of inflation on discretionary sales for our big-box customer base and a natural pull-back from pandemic fueled ecommerce sales," said Michael Spector, CEO.

Mr. Spector added, "our operating margins remain under pressure from increasing labor costs, continuation of high sea freight rates and elevated diesel fuel prices. Looking forward, we expect to see margin improvement as logistics costs return to more historical norms, receptive pricing flexibility and further product diversification. We are encouraged with progress made to further broaden our product offering and diversify our geographic supplier distribution network. We see specific opportunities in expanding our pottery segment programs using South American and European suppliers with improved margins, more reliable and lower cost supply logistics."

Highlights for the Three Months Ended June 30, 2022

  • Gross revenue was $16.7 million for the quarter, up 22% from the prior quarter and down 14% from the second quarter last year.

  • The sales growth profile remains strong, up 43% over 2019 pre-pandemic sales levels.

  • Pre-tax income of $3.0 million, was consistent with the prior quarter and 38% lower than the second quarter last year on 14% less sales. Product margins have compressed due to higher landed costs, but operating expenses have been managed to year-over- year growth of less than 2%.

  • Cash flow remains strong, net debt (debt less cash), ended the quarter at approximately $2.1 million, down 73% from the prior quarter.

Statements of Operations:
Period Ended June 30,
In Thousands except per share data








Three Months Ended 


Six Months Ended


Unaudited 


Unaudited 


2022

2021


2022

2021

Revenue

$          16,725

$          19,392


$       30,411

$           33,348

Cost of Sales

11,276

12,151


19,849

20,913

Gross Margin

5,448

7,241


10,562

12,435

 

Operating Expense

 

2,347

 

2,217


 

4,359

 

4,189

Operating Income

3,101

5,023


6,203

8,246

Interest Expense

Other Income / (Expense)

98

-

136

-


189

-

281

-

Pre-tax Income

3,003

4,888


6,014

7,965

 

Income Tax

 

673

 

1,095


 

1,347

 

1,784

Net Income

2,330

3,793


4,667

6,181

 

Net income per share

 

$0.58

 

$0.95


 

$1.17

 

$1.54

 

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 predominately 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.

Cision
Cision

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SOURCE Margo Caribe, Inc.