Nov 12, 2019   SOURCE: BusinessWire

CCOM Group, Inc. Reports 2019 Third Quarter Results

CCOM Group, Inc. (“CCOM”) (OTC Pink: “CCOM,” “CCOMP”), announced its financial results for the quarter and nine months ended September 30, 2019.

Results for the quarter ended September 30, 2019 compared to results for the same period in 2018:

  • Sales increased 10.0% to $31,903,370 from $29,011,036
  • Gross profit increased 5.4% to $7,759,476 from $7,361,636
  • Selling, general and administrative expenses increased 5.1% to $6,658,897 from $6,334,549
  • Operating income increased 7.2% to $1,100,579 from $1,027,087
  • Net income increased 6.5% to $776,788 from $729,127; the 2019 amount includes a $158,333 non-cash deferred income tax expense (with a corresponding decrease to CCOM’s deferred tax asset) and the 2018 amount includes a $60,000 non-cash deferred income tax expense.
  • Net income per share on a fully diluted basis increased to $0.08 per share from $0.07 per share

Results for the nine months ended September 30, 2019 compared to results for the same period in 2018:

  • Sales increased 11.0% to $86,396,102 from $77,831,952
  • Gross profit increased 8.5% to $22,096,617 from $20,364,544
  • Selling, general and administrative expenses increased 6.6% to $19,553,634 from $18,346,043
  • Operating income increased 26.0% to $2,542,983 from $2,018,501
  • Net income increased 24.7% to $1,693,443 from $1,357,605; the 2019 amount includes a $316,666 non-cash deferred income tax expense (with a corresponding decrease to CCOM’s deferred tax asset) and the 2018 amount includes a $120,000 non-cash deferred income tax expense.
  • Net income per share on a fully diluted basis increased to $0.17 per share from $0.14 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 16 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,

2019

2018

(Unaudited)
 
Assets
Current assets:
Cash

$

431,605

$

307,472

Accounts receivable, net of allowance for doubtful accounts
of $512,308 and $497,526, respectively

 

12,433,274

 

11,384,957

Inventory

 

20,452,137

 

18,740,410

Prepaid expenses and other current assets

 

994,530

 

1,046,161

Total current assets

 

34,311,546

 

31,479,000

Property and equipment

 

916,992

 

612,600

Goodwill

 

1,416,929

 

1,416,929

Other assets - noncurrent

 

361,812

 

471,178

Deferred tax asset - noncurrent

 

2,383,334

 

2,700,000

$

39,390,613

$

36,679,707

Liabilities and Stockholders' Equity
Current liabilities:
Borrowings under credit facility - revolving credit

$

14,653,786

$

13,476,541

Notes payable - current portion; includes related party notes
of $0 and $211,226, respectively

 

94,166

 

264,266

Trade payables

 

5,664,526

 

5,655,011

Accrued liabilities

 

2,765,040

 

2,479,556

Income taxes payable

 

-

 

715

Total current liabilities

 

23,177,518

 

21,876,089

Notes payable, excluding current portion; includes related party
notes of $0 and $389,109, respectively

 

318,921

 

602,887

Deferred tax liability - noncurrent

 

354,000

 

354,000

Total liabilities

 

23,850,439

 

22,832,976

 
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

Retained Earnings

 

2,471,344

 

777,901

Total stockholders' equity

 

15,540,174

 

13,846,731

$

39,390,613

$

36,679,707

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,

2019

2018

2019

2018

Sales

$

 

 

31,903,370

 

$

 

 

29,011,036

 

$

 

 

86,396,102

 

$

 

 

77,831,952

 

Cost of sales

 

24,143,894

 

 

21,649,400

 

 

64,299,485

 

 

57,467,408

 

Gross profit

 

7,759,476

 

 

7,361,636

 

 

22,096,617

 

 

20,364,544

 

 
Selling, general and administrative expenses

 

6,658,897

 

 

6,334,549

 

 

19,553,634

 

 

18,346,043

 

Operating income

 

1,100,579

 

 

1,027,087

 

 

2,542,983

 

 

2,018,501

 

 
Other income

 

49,594

 

 

49,597

 

 

157,902

 

 

207,410

 

Interest expense, net; includes related party interest of $7,708
and $15,099 for three months ended September 30, 2019
and 2018, respectively, and $34,503 and $48,314 for the
nine months ended September 30, 2019 and 2018, respectively

 

(192,767

)

 

(204,446

)

 

(595,992

)

 

(564,567

)

Income from operations

 

957,406

 

 

872,238

 

 

2,104,893

 

 

1,661,344

 

 
Income tax expense

 

180,618

 

 

143,111

 

 

411,450

 

 

303,739

 

Net income

$

 

 

776,788

 

$

 

 

729,127

 

$

 

 

1,693,443

 

$

 

 

1,357,605

 

 
Income per common share:
Basic $

0.08

 

$

0.08

 

$

0.18

 

$

0.14

 

Diluted

$

0.08

 

$

0.07

 

$

0.17

 

$

0.14

 

 
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,

2019

2018

Cash flows from operating activities:
Net income

$

 

1,693,443

 

$

 

1,357,605

 

Adjustments to reconcile net income to net cash
used in operating activities:
Deferred income taxes

316,666

 

120,000

 

Provision for doubtful accounts

151,254

 

210,372

 

Depreciation

230,201

 

232,461

 

Net gain on sale of fixed assets

(2,225

)

(17,756

)

Changes in operating assets and liabilities
Accounts receivable

(1,199,571

)

(1,065,771

)

Inventory

(1,711,727

)

(936,051

)

Prepaid expenses and other current assets

51,631

 

230,580

 

Other assets - noncurrent

109,366

 

63,334

 

Trade payables

9,515

 

(979,967

)

Accrued liabilities

285,484

 

358,793

 

Income taxes payable

(715

)

(18,085

)

Net cash used in operating activities

(66,678

)

(444,485

)

 
Cash flows from investing activities:
Additions to property and equipment

(337,549

)

(91,603

)

Proceeds from disposal of property and equipment

7,000

 

36,027

 

Net cash used in investing activities

(330,549

)

(55,576

)

 
Cash flows from financing activities:
Repayments of notes payable: includes related party
repayments of $600,335 and $145,190 respectively

(655,885

)

(247,229

)

Repayments of short term financing, related party

(500,000

)

(1,500,000

)

Issuance of short term financing, related party

500,000

 

1,500,000

 

Borrowings under credit facility - revolving credit, net

1,177,245

 

714,601

 

Net cash provided by financing activities

521,360

 

467,372

 

Increase (decrease) in cash

124,133

 

(32,689

)

Cash - beginning of period

307,472

 

506,635

 

Cash - end of period

$

 

431,605

 

$

 

473,946