CCOM Group, Inc. Reports 2017 Second Quarter Results

HAWTHORNE, N.J.--()--CCOM Group, Inc. (“CCOM”) (OTC Pink: “CCOM,” “CCOMP”), announced its financial results for the quarter and six months ended June 30, 2017.

Results for the quarter ended June 30, 2017 compared to results for the same period in 2016:

  • Sales increased 12.6% to $26,624,977 from $23,635,776
  • Gross profit increased 7.3% to $6,864,017 from $6,394,947
  • Selling, general and administrative expenses increased 4.6% to $5,610,928 from $5,364,632
  • Operating income increased 21.6% to $1,253,089 from $1,030,315
  • Net income increased 17.2% to $1,066,070 from $909,575; the 2017 amount includes a $60,000 non-cash deferred income tax expense (with a corresponding decrease to CCOM’s deferred tax asset). There was no income tax expense in 2016.
  • Net income per share on a fully diluted basis increased to $0.11 per share from $0.10 per share

Results for the six months ended June 30, 2017 compared to results for the same period in 2016:

  • Sales increased 6.7% to $44,296,353 from $41,514,540
  • Gross profit increased 4.7% to $11,874,016 from $11,335,938
  • Selling, general and administrative expenses increased 3.1% to $11,162,264 from $10,825,833
  • Operating income increased 39.5% to $711,752 from $510,105
  • Net income increased 42.7% to $416,341 from $291,798; the 2017 amount includes a $60,000 non-cash deferred income tax expense (with a corresponding decrease to CCOM’s deferred tax asset). There was no income tax expense in 2016.
  • Net income per share on a fully diluted basis increased to $0.04 per share from $0.03 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
 
June 30, December 31,
2017 2016
(Unaudited)
 
Assets
Current assets:
Cash $ 478,091 $ 448,758
Accounts receivable, net of allowance for doubtful accounts
of $1,184,797 and $1,078,613, respectively 12,923,595 10,788,257
Inventory 17,457,282 14,888,025
Prepaid expenses and other current assets   839,234     680,039  
Total current assets 31,698,202 26,805,079
Property and equipment 655,697 756,050
Goodwill 1,416,929 1,416,929
Other assets - noncurrent 171,144 171,144
Deferred tax asset - noncurrent   2,256,500     2,316,500  
$ 36,198,472   $ 31,465,702  
Liabilities and Stockholders' Equity
Current liabilities:
Borrowings under credit facility - revolving credit $ 16,422,081 $ 13,417,855
Convertible notes payable; related party 100,000 -
Notes payable - current portion; includes related party notes
of $635,777 and $176,283, respectively 780,924 353,208
Trade payables 4,922,633 3,852,007
Accrued liabilities 1,892,409 1,995,083
Income taxes payable   15,000     42,188  
Total current liabilities 24,133,047 19,660,341
Convertible notes payable, excluding current portion-related party - 100,000
Notes payable, excluding current portion; includes related party
notes of $750,000 and $795,879, respectively 821,027 877,304
Deferred tax liability - noncurrent   567,000     567,000  
Total liabilities   25,521,074     21,204,645  
 
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   (2,391,432 )   (2,807,773 )
Total stockholders' equity   10,677,398     10,261,057  
$ 36,198,472   $ 31,465,702  
 
           
CCOM GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
 
For The Three Months Ended For The Six Months Ended
June 30, June 30,
2017 2016 2017 2016
Sales $ 26,624,977 $ 23,635,776 $ 44,296,353 $ 41,514,540
Cost of sales   19,760,960     17,240,829     32,422,337     30,178,602  
Gross profit 6,864,017 6,394,947 11,874,016 11,335,938
 
Selling, general and administrative expenses   5,610,928     5,364,632     11,162,264     10,825,833  
Operating income 1,253,089 1,030,315

 

711,752

 

510,105
 
Other income 59,372 45,988 108,657 89,505
Interest expense, net; includes related party interest of
$24,803 and $37,398 for three months ended June 30, 2017
and 2016, respectively, and $43,986 and $67,064 for the
six months ended June 30, 2017 and 2016, respectively   (168,254 )   (166,728 )   (316,145 )   (307,812 )
Income from operations 1,144,207 909,575 504,264 291,798
 
Income tax expense   78,137     -     87,923     -  
Net income $   1,066,070   $   909,575   $   416,341   $   291,798  
 
Income per common share:
Basic $ 0.12   $ 0.10   $ 0.05   $ 0.03  
Diluted $ 0.11   $ 0.10   $ 0.04   $ 0.03  
 
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 Six Months Ended
June 30,
2017 2016
Cash flows from operating activities:
Net income $ 416,341 $ 291,798
Adjustments to reconcile net income to net cash
used in operating activities:
Deferred income taxes 60,000 -
Provision for doubtful accounts 125,946 71,216
Depreciation 190,328 177,625
Net gain on sale of fixed assets - (1,757 )
Changes in operating assets and liabilities
Accounts receivable (2,261,284 ) (2,002,287 )
Inventory (2,569,257 ) (2,106,041 )
Prepaid expenses and other current assets (159,195 ) (64,185 )
Other assets - noncurrent - 5,236
Trade payables 1,070,626 292,322
Accrued liabilities (102,674 ) 390,226
Income taxes payable (27,188 ) -  
Net cash used in operating activities (3,256,357 ) (2,945,847 )
 
Cash flows from investing activities:
Additions to property and equipment (38,063 ) (80,343 )
Proceeds from disposal of property and equipment -   8,847  
Net cash used in investing activities (38,063 ) (71,496 )
 
Cash flows from financing activities:
Repayments of notes payable: includes related party
repayments of $586,385 and $1,829,764 respectively (680,473 ) (1,913,740 )
Issuance of notes payable, related party 1,000,000 2,750,000
Borrowings under credit facility - revolving credit, net 3,004,226   2,064,521  
Net cash provided by financing activities 3,323,753   2,900,781  
Increase (decrease) in cash 29,333 (116,562 )
Cash - beginning of period 448,758   577,303  
Cash - end of period $ 478,091   $ 460,741  

Contacts

CCOM Group, Inc.
(973) 427-8224
Peter D. Gasiewicz, Chief Executive Officer
William Salek, Chief Financial Officer

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