Brownie's Marine Swings to Profit on Cost Cuts, Revenue Edges Up

TL;DR

**BWMG's cost-cutting delivered a profit, but stagnant revenue and declining gross profit are red flags for sustained growth.**

AI Summary

Brownie's Marine Group, Inc. (BWMG) reported a net income of $67,259 for the six months ended June 30, 2025, a significant improvement from a net loss of $255,882 in the same period of 2024. Total revenues increased slightly to $4,048,093 for the first six months of 2025, up from $3,997,150 in 2024, representing a 1.27% increase. Gross profit, however, decreased by 8.51% to $1,388,889 from $1,518,158 year-over-year, primarily due to a 7.27% increase in total cost of revenues to $2,659,204. Selling, general, and administrative expenses saw a substantial reduction of 24.30%, falling to $1,302,116 from $1,722,795. The company's cash position improved, with cash increasing to $453,548 as of June 30, 2025, from $417,678 at December 31, 2024. Accounts receivable also grew significantly by 101.03% to $362,848, while inventory increased by 7.93% to $2,225,836. The company's total assets slightly increased to $5,812,643 from $5,766,915, and total liabilities decreased to $4,151,423 from $4,186,956, contributing to an improved stockholders' equity of $1,661,219.

Why It Matters

This turnaround to profitability is a critical signal for investors, indicating improved operational efficiency and potentially a more sustainable business model for BWMG. The significant reduction in selling, general, and administrative expenses suggests management is effectively controlling costs, which could lead to stronger margins in the future. For employees, a profitable company offers greater job security and potential for growth. Customers might see continued product development and service improvements as the company stabilizes. In the competitive marine and diving equipment market, BWMG's ability to achieve net income while competitors may struggle with rising costs positions it favorably for market share gains.

Risk Assessment

Risk Level: medium — While BWMG achieved net income, the gross profit decreased by 8.51% to $1,388,889 for the six months ended June 30, 2025, despite a slight revenue increase. This indicates pressure on margins. Additionally, the company's reliance on related party transactions, which accounted for $272,617 of total revenues, introduces potential conflicts of interest and concentration risk.

Analyst Insight

Investors should monitor BWMG's next earnings report closely for continued gross profit erosion or stabilization. While the cost reductions are positive, the declining gross profit suggests underlying challenges in pricing or cost of goods sold. Consider if the current profitability is sustainable without stronger top-line growth and improved gross margins.

Financial Highlights

debt To Equity

2.50

revenue

$4,048,093

operating Margin

N/A

total Assets

$5,812,643

total Debt

$4,151,423

net Income

$67,259

eps

N/A

gross Margin

34.30%

cash Position

$453,548

revenue Growth

1.27%

Key Numbers

• $67,259 — Net Income (for the six months ended June 30, 2025, compared to a net loss of $255,882 in 2024)
• $4,048,093 — Total Revenues (for the six months ended June 30, 2025, up 1.27% from $3,997,150 in 2024)
• $1,388,889 — Gross Profit (for the six months ended June 30, 2025, down 8.51% from $1,518,158 in 2024)
• $1,302,116 — Selling, General and Administrative Expenses (for the six months ended June 30, 2025, a 24.30% decrease from $1,722,795 in 2024)
• $453,548 — Cash (as of June 30, 2025, up from $417,678 at December 31, 2024)
• $362,848 — Accounts Receivable (as of June 30, 2025, up 101.03% from $180,496 at December 31, 2024)
• $2,225,836 — Inventory, net (as of June 30, 2025, up 7.93% from $2,062,279 at December 31, 2024)
• $1,661,219 — Total Stockholders' Equity (as of June 30, 2025, up from $1,579,960 at December 31, 2024)
• 449,703,989 — Common Stock Outstanding (as of June 30, 2025, up from 449,430,935 at December 31, 2024)
• $2,659,204 — Total Cost of Revenues (for the six months ended June 30, 2025, up 7.27% from $2,478,992 in 2024)

Key Players & Entities

• Brownie's Marine Group, Inc. (company) — registrant
• Trebor Industries, Inc. (company) — wholly owned subsidiary
• Brownie's High Pressure Compressor Services, Inc. (company) — wholly owned subsidiary
• BLU3, Inc. (company) — wholly owned subsidiary
• Submersible Systems, Inc. (company) — wholly owned subsidiary
• Live Blue, Inc. (company) — wholly owned subsidiary
• Gold Coast Scuba, LLC (company) — acquired assets from
• Steven M. Gagas (person) — LLC Member of Gold Coast Scuba
• William Frenier (person) — LLC Member of Gold Coast Scuba
• SEC (regulator) — Securities and Exchange Commission

FAQ

Risk Factors

• Dependence on Key Subsidiaries [medium — operational]: The company's operations are heavily reliant on its wholly owned subsidiaries: Trebor Industries, Inc. (BTL), Brownie's High Pressure Compressor Services, Inc. (BHP/LWA), and BLU3, Inc. Any disruption or underperformance in these entities, which manufacture and distribute specialized diving and compressor products, could significantly impact the company's overall financial results.
• Recreational Diving Market Volatility [medium — market]: The company designs, tests, manufactures, and distributes recreational hookah diving, scuba, and water safety products. The demand for these products is tied to the discretionary spending of consumers and the overall health of the recreational diving and marine tourism industries, which can be subject to economic downturns and seasonal fluctuations.
• Inventory Management Challenges [low — financial]: Inventory increased by 7.93% to $2,225,836 as of June 30, 2025. While this could support future sales, a significant increase in inventory without a corresponding rise in sales could lead to carrying costs, obsolescence, and potential write-downs, impacting profitability.
• Accounts Receivable Growth [medium — financial]: Accounts receivable grew by 101.03% to $362,848 as of June 30, 2025. While this indicates increased sales on credit, it also heightens the risk of bad debt if collections are not managed effectively, potentially impacting cash flow.
• Integration of Acquisitions [medium — operational]: The company has engaged in several acquisitions, including Submersible Systems, Inc. and assets from Gold Coast Scuba, LLC. The success of these integrations, in terms of realizing synergies and managing operations, is critical. Failure to effectively integrate could lead to inefficiencies and impact financial performance.

Industry Context

Brownie's Marine Group operates within the recreational diving and marine safety product sector. This industry is characterized by a focus on specialized equipment for activities like scuba diving, hookah diving, and water safety. Key trends include technological advancements in dive gear, increasing interest in underwater exploration, and the demand for portable, user-friendly dive systems, as exemplified by BLU3's offerings. The market can be influenced by consumer discretionary spending and the health of the marine tourism industry.

Regulatory Implications

As a manufacturer and distributor of safety-critical equipment, Brownie's Marine Group is subject to product safety regulations and standards. Compliance with manufacturing quality controls and potential certifications for diving equipment is essential. Additionally, any international sales expose the company to varying import/export regulations and compliance requirements in different jurisdictions.

What Investors Should Do

1. Monitor Gross Margin Trends
2. Analyze Accounts Receivable Growth
3. Evaluate SG&A Reduction Sustainability
4. Assess Inventory Turnover

Key Dates

• 2025-06-30: End of Six-Month Period — Reporting period for the current financial results, showing a net income of $67,259 and revenues of $4,048,093.
• 2024-06-30: Prior Year Six-Month Period End — Comparison period, during which the company reported a net loss of $255,882 and revenues of $3,997,150.
• 2025-12-31: Prior Year End — Balance sheet comparison date, showing cash of $417,678 and total stockholders' equity of $1,579,960.
• 2021-09-03: Merger Agreement with Submersible Acquisition, Inc. — Marks a significant strategic move to acquire Submersible Systems, Inc., expanding the company's product offerings in high-pressure tanks and air systems.
• 2022-02-13: Incorporation of Live Blue, Inc. (LBI) — Establishment of a new subsidiary focused on guided tour experiences using BLU3 technology, indicating a strategy to broaden market reach.
• 2022-05-02: Asset Purchase Agreement with Gold Coast Scuba, LLC — Acquisition of assets and liabilities from Gold Coast Scuba, further integrating operations and potentially expanding the retail or service side of the business.

Glossary

Gross Profit

The profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services. (Decreased by 8.51% to $1,388,889, indicating that the cost of revenues grew faster than sales, impacting overall profitability despite revenue growth.)

Selling, General and Administrative Expenses (SG&A)

Costs incurred by a company that are not directly related to the production or acquisition of goods, but are necessary for the overall operation of the business. (Significantly reduced by 24.30% to $1,302,116, a key factor in the company's improved net income, demonstrating successful cost control measures.)

Stockholders' Equity

The value of a company's assets minus its liabilities; represents the ownership stake of shareholders. (Increased to $1,661,219, reflecting the company's improved financial position and a reduction in total liabilities.)

Inventory, net

The cost of goods that a company has on hand and intends to sell, net of any allowances for obsolescence or valuation adjustments. (Increased by 7.93% to $2,225,836, suggesting potential for increased sales but also carrying costs and risk of obsolescence.)

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for. (More than doubled, increasing by 101.03% to $362,848, indicating higher credit sales but also increased risk of non-payment.)

Cost of Revenues

The direct costs attributable to the production or purchase of the goods sold by a company during a period. (Increased by 7.27% to $2,659,204, outpacing revenue growth and contributing to the decline in gross profit margin.)

Year-Over-Year Comparison

Compared to the six months ended June 30, 2024, Brownie's Marine Group has shown a significant turnaround, moving from a net loss of $255,882 to a net income of $67,259. While total revenues saw a modest increase of 1.27% to $4,048,093, the gross profit declined by 8.51% due to a faster rise in the cost of revenues. A major positive development is the substantial 24.30% reduction in selling, general, and administrative expenses, which was instrumental in achieving profitability. The company's balance sheet also shows an improved cash position and a decrease in total liabilities, leading to higher stockholders' equity.

Filing Documents

• form10-q.htm (10-Q) — 1086KB
• ex31-1.htm (EX-31.1) — 17KB
• ex31-2.htm (EX-31.2) — 18KB
• ex32.htm (EX-32) — 10KB
• form10-q_001.jpg (GRAPHIC) — 8KB
• 0001641172-25-023769.txt ( ) — 6803KB
• bwmg-20250630.xsd (EX-101.SCH) — 46KB
• bwmg-20250630_cal.xml (EX-101.CAL) — 57KB
• bwmg-20250630_def.xml (EX-101.DEF) — 239KB
• bwmg-20250630_lab.xml (EX-101.LAB) — 438KB
• bwmg-20250630_pre.xml (EX-101.PRE) — 354KB
• form10-q_htm.xml (XML) — 1134KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION ITEM 1.

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS. 4 ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 24 ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. 28 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES. 28

– OTHER INFORMATION

PART II – OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. 30 ITEM 1A. RISK FACTORS. 30 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. 30 ITEM 3. DEFAULTS UPON SENIOR SECURITIES. 30 ITEM 4. MINE SAFETY DISCLOSURES. 30 ITEM 5. OTHER INFORMATION. 30 ITEM 6. EXHIBITS. 31 2 NOTE REGARDING FORWARD-LOOKING INFORMATION This Quarterly Report includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking "intend," "plan," "targets," "likely," "aim," "will," "would," "could," and similar expressions or phrases identify forward- looking statements. We have based these forward-looking statements largely on our current expectations and future events and financial trends that we believe may affect our financial condition, results of operation, business strategy and financial needs. You should read thoroughly this Quarterly Report with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by risk factors included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on May 9, 2024, which risk factors could adversely impact our business and financial performance. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking st

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2024 (UNAUDITED) Note 1. Company Overview Brownie's Marine Group, Inc. (the "Company") designs, tests, manufactures and distributes recreational hookah diving, scuba, and water safety products through its wholly owned subsidiary, Trebor Industries, Inc., a Florida corporation, incorporated in 1981 ("Trebor" or "BTL"), manufactures and sells high pressure air and industrial compressor packages, yacht based scuba air compressor and nitrox generation systems through its wholly owned subsidiary, Brownie's High Pressure Compressor Services, Inc., a Florida corporation incorporated in 2017 ("BHP") and doing business as LW Americas ("LWA") and develops and markets portable battery powered surface supplied air dive systems through its wholly owned subsidiary BLU3, Inc., a Florida corporation ("BLU3"). On September 3, 2021, the Company, entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement") with Submersible Acquisition, Inc., a Florida corporation and wholly owned subsidiary of the Company ("Acquisition Sub"), Submersible Systems, Inc., a Florida corporation ("Submersible" or "SSI"), and Summit Holdings V, LLC, a Florida limited liability company ("Summit") and Tierra Vista Group, LLC, a Florida limited liability company ("Tierra Vista" and, together with Summit, the "Sellers"), the owners of all of the capital stock of Submersible, pursuant to which Acquisition Sub merged with and into Submersible (the "Merger"), and Submersible, the surviving corporation, became a wholly owned subsidiary of the Company. Submersible is a manufacturer of high pressure tanks and redundant air systems for the military and recreational diving industries, based in Huntington Beach, California and sells its products to governments, militaries, private companies and the dive industry throughout the world. On February 13, 2022 the Company filed with the Florida Department of State, the articles of inco

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