Nov 14, 2018   SOURCE: BusinessWire

CCOM Group, Inc. Reports 2018 Third Quarter Results

CCOM Group, Inc. (“CCOM”) (OTC Pink: “CCOM,” “CCOMP”), announced its financial results for the quarter and nine months ended September 30, 2018.

Results for the quarter ended September 30, 2018 compared to results for the same period in 2017:

  • Sales increased 20.5% to $29,011,036 from $24,074,709
  • Gross profit increased 18.9% to $7,361,636 from $6,191,020
  • Selling, general and administrative expenses increased 12.2% to $6,334,549 from $5,647,981
  • Operating income increased 89.1% to $1,027,087 from $543,039
  • Net income increased to $729,127 from $304,850; the 2018 and 2017 amounts include a $60,000 non-cash deferred income tax expense (with a corresponding decrease to CCOM’s deferred tax asset).
  • Net income per share on a fully diluted basis increased to $0.07 per share from $0.03 per share

Results for the nine months ended September 30, 2018 compared to results for the same period in 2017:

  • Sales increased 13.8% to $77,831,952 from $68,371,062
  • Gross profit increased 12.7% to $20,364,544 from $18,065,036
  • Selling, general and administrative expenses increased 9.1% to $18,346,043 from $16,810,245
  • Operating income increased 60.9% to $2,018,501 from $1,254,791
  • Net income increased 88.2% to $1,357,605 from $721,191; the 2018 and 2017 amounts include a $120,000 non-cash deferred income tax expense (with a corresponding decrease to CCOM’s deferred tax asset).
  • Net income per share on a fully diluted basis increased to $0.14 per share from $0.07 per share

About CCOM Group, Inc.

CCOM Group, Inc. (“CCOM”) distributes heating, ventilating and air conditioning equipment (HVAC), parts and accessories, whole-house generators, climate control systems, and plumbing and electrical fixtures and supplies, primarily in New Jersey, New York, Massachusetts and portions of eastern Pennsylvania, Connecticut and Vermont through its subsidiaries: Universal Supply Group, Inc., www.usginc.com, The RAL Supply Group, Inc., www.ralsupply.com, and S&A Supply, Inc., www.sasupplyinc.com. CCOM is headquartered in New Jersey, and, with its affiliates, operates out of 17 locations in its geographic trading area. For more information on CCOM’s operations, products and/or services, please visit www.ccomgrp.com.

(Financial Highlights Follow)

   
CCOM GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
 
September 30, December 31,
2018 2017
(Unaudited)
 
Assets
Current assets:
Cash $ 473,946 $ 506,635
Accounts receivable, net of allowance for doubtful accounts
of $683,549 and $1,052,963, respectively 12,378,087 11,522,688
Inventory 17,167,567 16,231,516
Prepaid expenses and other current assets   891,165     1,121,745  

Total current assets

30,910,765 29,382,584
Property and equipment 662,040 568,079
Goodwill 1,416,929 1,416,929
Other assets - noncurrent 361,041 424,375
Deferred tax asset - noncurrent   1,562,000     1,682,000  
$ 34,912,775   $ 33,473,967  
Liabilities and Stockholders' Equity
Current liabilities:
Borrowings under credit facility - revolving credit $ 15,179,250 $ 14,464,649
Notes payable - current portion; includes related party notes
of $207,893 and $196,587, respectively 261,627 279,606
Trade payables 3,578,338 4,558,305
Accrued liabilities 2,524,017 2,165,224
Income taxes payable   403     18,488  
Total current liabilities 21,543,635 21,486,272
Notes payable, excluding current portion; includes related party
notes of $443,015 and $599,291, respectively 669,071 645,231
Deferred tax liability - noncurrent   567,000     567,000  
Total liabilities   22,779,706     22,698,503  
 
Commitments and contingencies
Stockholders' equity:
Redeemable convertible preferred stock, $.05 par value,
2,500,000 shares authorized, 284,612 shares issued and
outstanding, liquidation preference of $1,423,060 14,231 14,231
Common stock, $.05 par value, 20,000,000 shares authorized,
9,154,928 shares issued and outstanding 457,746 457,746
Additional paid-in capital 12,596,853 12,596,853
Accumulated deficit   (935,761 )   (2,293,366 )
Total stockholders' equity   12,133,069     10,775,464  
$ 34,912,775   $ 33,473,967  
 
       
CCOM GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
 
 
For The Three Months Ended

For The Nine Months Ended

September 30, September 30,
2018 2017 2018 2017
Sales $ 29,011,036 $ 24,074,709 $ 77,831,952 $ 68,371,062
Cost of sales   21,649,400     17,883,689     57,467,408     50,306,026  
Gross profit 7,361,636 6,191,020 20,364,544 18,065,036
 
Selling, general and administrative expenses   6,334,549     5,647,981     18,346,043     16,810,245  
Operating income 1,027,087 543,039

 

2,018,501

 

1,254,791
 
Other income 49,597 46,965 207,410 155,622
Interest expense, net; includes related party interest of $15,099
and $21,781 for three months ended September 30, 2018
and 2017, respectively, and $48,314 and $65,766 for the
nine months ended September 30, 2018 and 2017, respectively   (204,446 )   (172,473 )   (564,567 )   (488,618 )
Income from operations 872,238 417,531 1,661,344 921,795
 
Income tax expense   143,111     112,681     303,739     200,604  
Net income $   729,127  

$

  304,850   $   1,357,605   $   721,191  
 
Income per common share:
Basic $ 0.08   $ 0.03   $ 0.14   $ 0.08  
Diluted $ 0.07   $ 0.03   $ 0.14   $ 0.07  
 
Weighted average shares
outstanding:
Basic   9,154,928     9,154,928     9,154,928     9,154,928  
Diluted   9,439,540     9,439,540     9,439,540     9,439,540  
       
       
CCOM GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For The Nine Months Ended
September 30,
2018 2017
Cash flows from operating activities:
Net income $ 1,357,605 $ 721,191
Adjustments to reconcile net income to net cash
used in operating activities:
Deferred income taxes 120,000 120,000
Provision for doubtful accounts 210,372 189,350
Depreciation 232,461 275,432
Net gain on sale of fixed assets (17,756 ) -
Changes in operating assets and liabilities
Accounts receivable (1,065,771 ) (1,392,939 )
Inventory (936,051 ) (1,752,642 )
Prepaid expenses and other current assets 230,580 (266,546 )
Other assets - noncurrent 63,334 (6,752 )
Trade payables (979,967 ) 766,382
Accrued liabilities 358,793 153,758
Income taxes payable (18,085 ) (27,188 )
Net cash used in operating activities (444,485 ) (1,219,954 )
 
Cash flows from investing activities:
Additions to property and equipment (91,603 ) (106,281 )
Proceeds from disposal of property and equipment 36,027   -  
Net cash used in investing activities (55,576 ) (106,281 )
 
Cash flows from financing activities:
Repayments of notes payable: includes related party
repayments of $145,190 and $230,886 respectively (247,229 ) (376,404 )
Repayments of short term financing, related party (1,500,000 ) (1,500,000 )
Issuance of short term financing, related party 1,500,000 1,500,000
Borrowings under credit facility - revolving credit, net 714,601   1,719,233  
Net cash provided by financing activities 467,372   1,342,829  
(Decrease) Increase in cash (32,689 ) 16,594
Cash - beginning of period 506,635   448,758  
Cash - end of period $ 473,946   $ 465,352