10q996





                        SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                        
                                        
                                    FORM 10-Q


               [X]   QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
                                        
               For the quarterly period ended September 30, 1996
                          Commission File No. 0-11102
                                        
                            OCEAN BIO-CHEM, INC.                           
                (Exact name of registrant as specified in its charter)
                                        
               Florida                                    59-1564329     
        (State or other jurisdiction of                (I.R.S. Employer
      incorporation or organization)                  Identification No.)
                                        
       4041 S. W. 47 Avenue, Ft. Lauderdale, FL                  33314   
      (Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code - 305-587-6280

     Indicate by check mark whether the registrant (l) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to such 
filing requirements for the past 90 days.

                             YES    X                    NO       

     Indicate the number of shares outstanding of each of the issuer's classes 
of common stock, as of the latest practicable date.

     $.01 Par Value Common Stock 10,000,000 shares authorized, 3,692,817 issued 
and outstanding at September 30, 1996.



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                         PART I - FINANCIAL INFORMATION

Item l.  Financial Statements

                               OCEAN BIO-CHEM, INC.
                                 AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

                                      ASSETS
                                                   SEPT. 30,        DEC.31,
                                                     1996            1995 
Current Assets:
    Cash                                            $ 845,180     $ 997,309 
    Trade Accounts Receivable Net Of 
     Allowances For Doubtful Accounts Of
     $ 43,000 And $ 48,000  At September 30, 1996                               
     And December 31, 1995 Respectively             2,451,979     2,006,418 
    Due From Officers                                 151,600       154,420 
    Inventories                                     2,657,244     2,038,750 
    Prepaid Expenses                                  192,977       111,455 
Total Current Assets                                6,298,980     5,308,352 

Property, Plant and Equipment, Net                  2,156,558       321,475 

Other Assets:
    Trademarks, Trade Names And Patents, Net          449,602       466,746 
    Due From Affiliated Companies, Net                604,264       632,379 
    Deposits And Other Assets                          42,897        18,818 
Total Other Assets                                  1,096,763     1,117,943 
Total Assets                                      $ 9,552,301    $6,747,770 

                       LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
    Accounts Payable Trade                        $ 1,144,678   $   485,105 
    Note Payable - Bank                             2,890,000     1,990,000 
    Current Portion Of Long-Term Debt                 240,000         7,592 
    Accrued Expenses Payable                           85,473        89,068 
Total Current Liabilities                           4,360,151     2,571,765 

Long-term Debt, Less Current Portion                  530,000         -        

Shareholders' Equity:
    Common Stock                                       36,928        35,130 
    Additional Paid-In Capital                      3,161,429     2,650,754 
    Retained Earnings                               1,539,645     1,568,646 
    Foreign Currency Translation Adjustment       (    75,852)  (    78,525)
Total Shareholders' Equity                          4,662,150     4,176,005 
Total Liabilities & Shareholders' Equity          $ 9,552,301    $6,747,770 

                                        2
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                               OCEAN BIO-CHEM, INC.
                                 AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME 
                                   (Unaudited)

                             FOR THE THREE MONTHS      FOR THE NINE MONTHS
                             ENDED SEPTEMBER 30,       ENDED SEPTEMBER 30,
                                1996      1995           1996        1995

Gross Sales                $ 2,972,020 $ 1,958,245  $ 9,274,884   $ 7,341,627 
                                      
Allowances                     123,267     132,584      355,413       415,360 
                                      
Net Sales                    2,848,753   1,825,661    8,919,471     6,926,267 
                                      
Cost Of Goods Sold           1,916,677   1,183,933    5,896,449     3,995,561 

Gross Profit                   932,076     641,728    3,023,022     2,930,706 
                                                 
Cost And Expenses 
  Adv. And Promotion           138,035     206,912      395,587       541,975  
  Selling And Admin.           555,548     506,124    1,699,238     1,525,067 
  Interest Expense              67,863      21,143      171,877        62,226 
                                               
  Total Expenses               761,446     734,179    2,266,702     2,129,268 

Income (Loss) From
  Operations                   170,630  (   92,451)     756,320       801,438 
Interest Income                  2,152       7,624        5,983        18,451 

Income (Loss) before provision
 for income taxes              172,782  (   84,827)     762,303       819,889 
Provision (Benefit) for
 Income taxes                   64,000  (   33,000)     286,000       308,000 

Net Income (Loss)              108,782  (   51,827)   $ 476,303     $ 511,889 

Earnings Per Share:
Net Income (Loss)
 Per Share                     $   .03    $ (  .01)   $     .13     $     .14 

Earnings per share for the nine months ended September 30, 1996 and the three 
months ended September 30, 1996 were calculated on the basis of 3,791,283 
weighted average common stock and common stock equivalent outstanding.  For the 
nine and three months ended September 30, 1995, earnings per share were 
calculated using 3,533,195 weighted average common stock and common stock 
equivalent outstanding. Common stock equivalents consist of options to purchase 
common stock.  All earnings per share have been adjusted to reflect a 5% stock 
dividend distributed to shareholders of record as of May 1, 1996.


                                        3
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                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                                                               
CASH FLOWS PROVIDED BY                                 1996           1995 
 OPERATING ACTIVITIES:
    
    Net Income                                       $ 476,303      $ 511,889 
      Adjustment to Reconcile Net Income
    To Net Cash Provided by Operations:
    Depreciation and Amortization                      139,821         70,870 
    Change in Assets and Liabilities:                          
     (Increase) Decrease in Accounts Receivable       (442,741)       471,712 
     Increase in Inventory                            (618,494)    (  278,553)
     Increase in Prepaid Expenses                     (105,601)    (  149,748) 
     (Increase) Decrease in Accounts Payable
          And Accrued Expenses                         655,978     (  120,742)
     Net Cash Provided by Operating Activities         105,266        505,428 

Cash Flows From Financing Activities:
    Net Borrowings Under Line of Credit                900,000     (  371,667)
    Advances to (from) Affiliates                       28,115     (  136,607)
    Borrowings (Repaymen)t of Debt                     762,408     (   21,938)
    Sale of Stock                                        7,169        181,818 
      Net Cash Provided (Used) by 
        Financing Activities                         1,697,692     (  348,394)

Cash Flows From Investing Activities
    Purchase Property, Plant, Equipment             (1,957,760)    (  131,830)
      Net Cash Used by Investing Activities         (1,957,760)    (  131,830)
    
     Increase (Decrease) in Cash Prior
       to Effect of Exchange Rate on Cash             (154,802)        25,204 
    Effect of Exchange Rate on Cash                      2,673     (      586)

    Net Increase (Decrease) in Cash                   (152,129)        24,618 
    Cash at Beginning of Period                         997,309       571,411 
    Cash at September 30,                          $    845,180     $ 596,029 

Supplemental Disclosures of Cash Flow  Information:
Cash Paid During the Year for:                                                  
    Interest (Net of Amount capitalized)              $ 132,000     $  62,226 
           Income taxes                               $ 271,000     $ 314,751 

Disclosure of accounting policy:

For purposes of the statement of cash flows, the Company considers all highly 
liquid debt instruments purchases with a maturity of three months or less to be 
cash equivalents.


                                        4

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                          OCEAN BIO-CHEM, INC.
                           AND SUBSIDIARIES
            NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.  The information contained in this Report is unaudited, but reflects all 
adjustments which are, in the opinion of the management, necessary for a fair 
statement of results of the interim periods, consisting only of normal recurring
accruals. The results  for such interim periods are not necessarily indicative 
of results to be expected for the full year.

 Item 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources
The primary sources of the Registrant's liquidity are its operations and a line 
of credit  from a commercial bank  to a limit of $2 million.   In February  1996
the Registrant obtained an increase to the line of credit for an additional 
$900,000 for temporary financing of the Registrant's asset purchase from Kinpak,
Inc. in Alabama.   The total borrowings  under such line can aggregate up to 
$2,900,000 and is subject to renewal in April 1997.  The Registrant is required 
to maintain minimum working capital of $1,500,000, debt to  tangible net worth 
of 2 to 1 and debt service coverage of 1.7 times.  As of year end Registrant was
in compliance with all terms.

The Registrant is involved in making sales in the Canadian market and must deal 
with the currency fluctuations of the Canadian currency.  The Registrant does 
not engage in currency hedging and deals with such currency risk as a pricing 
issue.

During the past few years Registrant has introduced various new products to the 
marketplace. This has required the Registrant to carry greater amounts of 
overall inventory and has resulted in lower inventory turnover rates.  The 
effects of such inventory turnover have not been material to the overall 
operations of Registrant.  Registrant believes that all required capital to 
maintain such increases can continue to be provided from operations and current 
lending arrangements.

Results of Operations For The Three Month Period July 1-September 30
Gross sales increased approximately $ 1,014,000  or 52% comparing the quarter 
ended September 30, 1996  with the comparable period of  the preceding year.  
Management  attributes this primarily  to the packaging and sales of antifreeze 
products during the quarter. The Company packages antifreeze products for a 
third party on a contract basis. The Company's orders and backlog for the 
packaging of antifreeze expire in the fourth quarter of 1996.

Cost of Goods Sold  increased at approximately 4% as a percentage of gross sales
for the quarter ended September 30, 1996 when compared to the 1995 quarter.  
This was primarily due to the increased proportion of lower  margin products 
sold which was reflected in the product sales mix during this quarter.

Advertising and promotion expenses decreased approximately $ 69,000 or 33 % 
comparing the three month period ended September 30, 1996 to 1995.  This is 
primarily due to cost reductions implemented by management.

Selling and administrative expenses increased approximately $ 49,000 or 10 % 
comparing the quarter ended September 30, 1996 to the comparable period in 1995.
This was not attributed to any particular factor.

Interest expense increased approximately $47,000 comparing the quarter ended 
September 30,1996 to the comparable period in 1995. This is primarily due to 
higher interest rates and debt levels outstanding.

                                   5

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Results Of Operations For The Nine Month Period January 1-September 30

Gross sales increased approximately $ 1,933,000 or 26 % comparing the nine month
periods in 1996 and 1995. This is primarily due to the sales and  packaging of 
antifreeze.

Cost of goods sold increased approximately 9% as a percentage of gross sales 
when comparing the nine months ended September 30, 1996 and 1995.  This reflects
the effects of the antifreeze sales during this period.

Advertising and promotion expenses decreased approximately $ 146,000 or 27%  
when comparing the nine months ended September 30, 1996 and 1995.  This is the 
effects of cost reductions implemented by management.

Selling and administrative expenses  increased during 1996 by approximately 
$ 174,000  or 11% when compared to 1995.  This was primarily due to the expenses
associated with the Alabama operations.

Interest expense  increased in 1996 for the nine month period by approximately 
$ 110,000 reflecting increased borrowings outstanding during the period and the 
interest on the borrowings assumed in the purchase of the Alabama Plant.














                                   6

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                      PART II - OTHER INFORMATION



 Item 1 -Legal Proceedings:  See the Registrant's 10K for the year ended 
          December 31, 1995

 Item 2 -Changes in Securities:  Not Applicable

 Item 3 -Defaults Upon Senior Securities:  Not Applicable

 Item 4 -Submission of Matters to Vote of Security Holders: Not Applicable

 Item 5 -Other Information: Not Applicable

 Item 6 -Exhibits and Reports on Form 8-K

         (A) Exhibits: Not Applicable

         (B) Reports on Form 8-K: Not Applicable


                              SIGNATURES


     Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on behalf by the 
undersigned thereunto duly authorized.


        OCEAN BIO-CHEM, INC.

DATE:  November 12, 1996              /s/  Peter G. Dornau
                                          Peter G. Dornau
                                          Chairman of the Board of Directors

                                      /s/  Peter G. Dornau
                                          Peter G. Dornau
                                          Chief Financial Officer

                                        7
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