CCOM Group, Inc. Reports 2017 Third Quarter Results

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

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

  • Sales increased 0.4% to $24,074,709 from $23,984,268
  • Gross profit decreased 0.3% to $6,191,020 from $6,209,729
  • Selling, general and administrative expenses increased 0.8% to $5,647,981 from $5,602,748
  • Operating income decreased 10.5% to $543,039 from $606,981
  • Net income increased 87.8% to $304,850 from $162,306; the 2017 amount includes a $60,000 non-cash deferred income tax expense (with a corresponding decrease to CCOM’s deferred tax asset) and the 2016 amount includes a $270,000 non-cash deferred income tax expense.
  • Net income per share on a fully diluted basis increased to $0.03 per share from $0.02 per share

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

  • Sales increased 4.4% to $68,371,062 from $65,498,808
  • Gross profit increased 3.0% to $18,065,036 from $17,545,667
  • Selling, general and administrative expenses increased 2.3% to $16,810,245 from $16,428,581
  • Operating income increased 12.3% to $1,254,791 from $1,117,086
  • Net income increased 58.8% to $721,191 from $454,104; the 2017 amount includes a $120,000 non-cash deferred income tax expense (with a corresponding decrease to CCOM’s deferred tax asset) and the 2016 amount includes a $270,000 non-cash deferred income tax expense.
  • Net income per share on a fully diluted basis increased to $0.08 per share from $0.05 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,
  2017     2016  
(Unaudited)
 
Assets
Current assets:
Cash $ 465,352 $ 448,758
Accounts receivable, net of allowance for doubtful accounts
of $ 927,279 and $1,078,613, respectively 11,991,846 10,788,257
Inventory 16,640,667 14,888,025
Prepaid expenses and other current assets   946,585     680,039  
Total current assets 30,044,450 26,805,079
Property and equipment 638,811 756,050
Goodwill 1,416,929 1,416,929
Other assets - noncurrent 177,896 171,144
Deferred tax asset - noncurrent   2,196,500     2,316,500  
$ 34,474,586   $ 31,465,702  
Liabilities and Stockholders' Equity
Current liabilities:
Borrowings under credit facility - revolving credit $ 15,137,088 $ 13,417,855
Notes payable - current portion; includes related party notes
of $191,309 and $176,283, respectively 302,345 353,208
Trade payables 4,618,389 3,852,007
Accrued liabilities 2,148,841 1,995,083
Income taxes payable   15,000     42,188  
Total current liabilities 22,221,663 19,660,341
Convertible notes payable, excluding current portion-related party - 100,000
Notes payable, excluding current portion; includes related party
notes of $649,967 and $795,879, respectively 703,675 877,304
Deferred tax liability - noncurrent   567,000     567,000  
Total liabilities   23,492,338     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   (2,086,582 )   (2,807,773 )
Total stockholders' equity   10,982,248     10,261,057  
$ 34,474,586   $ 31,465,702  
 
           
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,
2017 2016 2017 2016
Sales $ 24,074,709 $ 23,984,268 $ 68,371,062 $ 65,498,808
Cost of sales 17,883,689 17,774,539 50,306,026 47,953,141
Gross profit 6,191,020 6,209,729 18,065,036 17,545,667
 
Selling, general and administrative expenses 5,647,981 5,602,748 16,810,245 16,428,581
Operating income 543,039 606,981

 

1,254,791

 

1,117,086
 
Other income 46,965 51,752 155,622 141,257
Interest expense, net; includes related party interest of $21,781
and $17,532 for three months ended September 30, 2017
and 2016, respectively, and $65,766 and $84,596 for the
nine months ended September 30, 2017 and 2016, respectively (172,473) (143,920) (488,618) (451,732)
Income from operations 417,531 514,813 921,795 806,611
 
Income tax expense 112,681 352,507 200,604 352,507
Net income $ 304,850 $ 162,306 $ 721,191 $ 454,104
 
Income per common share:
Basic $ 0.03 $ 0.02 $ 0.08 $ 0.05
Diluted $ 0.03 $ 0.02 $ 0.08 $ 0.05
 
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,
2017 2016
Cash flows from operating activities:
Net income $ 721,191 $ 454,104
Adjustments to reconcile net income to net cash
used in operating activities:
Deferred income taxes 120,000 270,000
Provision for doubtful accounts 189,350 187,261
Depreciation 275,432 269,209
Net gain on sale of fixed assets - (1,757)
Changes in operating assets and liabilities
Accounts receivable (1,392,939) (1,424,818)
Inventory (1,752,642) (808,924)
Prepaid expenses and other current assets (266,546) (241,434)
Other assets - noncurrent (6,752) 6,981
Trade payables 766,382 (104,783)
Accrued liabilities 153,758 525,392
Income taxes payable (27,188) (120)
Net cash used in operating activities (1,219,954) (868,889)
 
Cash flows from investing activities:
Additions to property and equipment (106,281) (86,250)
Proceeds from disposal of property and equipment - 8,847
Net cash used in investing activities (106,281) (77,403)
 
Cash flows from financing activities:
Repayments of notes payable: includes related party
repayments of $1,730,886 and $2,870,855 respectively (1,876,404) (3,095,137)
Issuance of notes payable, related party 1,500,000 2,750,000
Borrowings under credit facility - revolving credit, net 1,719,233 1,142,005
Net cash provided by financing activities 1,342,829 796,868
Increase (decrease) in cash 16,594 (149,424)
Cash - beginning of period 448,758 577,303
Cash - end of period $ 465,352 $ 427,879
 

Contacts

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

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