CCOM Group, Inc. Reports 2015 Second Quarter Results

HAWTHORNE, N.J.--()--CCOM Group, Inc. (“CCOM”) (OTC Pink: “CCOM,” “CCOMP”), announced its financial results for the quarter ended June 30, 2015.

Results for the quarter ended June 30, 2015 compared to results for the same period in 2014:

  • Sales decreased 6.4% to $22,324,307 from $23,858,421
  • Gross profit decreased 3.8% to $5,866,657 from $6,101,342
  • Selling, general and administrative expenses increased 3.4% to $5,046,574 from $4,878,432 (2014 selling, general and administrative expenses include a one-time real estate tax refund of $285,897)
  • Operating income decreased 32.9% to $820,083 from $1,222,910
  • Net income decreased 36.2% to $712,309 from $1,117,153 (2014 results include the one-time real estate tax refund of $285,897 referred to above)
  • Net income per share on a fully diluted basis decreased to $0.08 from $0.12 per share

Results for the six months ended June 30, 2015 compared to results for the same period in 2014:

  • Sales decreased 5.3% to $37,880,569 from $39,984,121
  • Gross profit decreased 1.1% to $10,477,983 from $10,599,577
  • Selling, general and administrative expenses increased 2.0% to $10,247,903 from $10,051,700 (2014 selling, general and administrative expenses include a one-time real estate tax refund of $285,897)
  • Operating income decreased 58.0% to $230,080 from $547,877
  • Net income decreased 89.5% to $35,750 from $341,171 (2014 results include the one-time real estate tax refund of $285,897 referred to above)
  • Net income per share on a fully diluted basis decreased to $0.00 from $0.04 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, appliances 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, American/Universal Supply Division, www.ausupplyinc.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.

       
CCOM GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
 
June 30, December 31,
  2015     2014  
 
 
Assets
Current assets:
Cash $ 435,547 $ 238,696
Accounts receivable, net of allowance for doubtful accounts
of $999,187 and $892,960, respectively 10,966,600 9,654,270
Inventory 14,956,608 14,121,649
Prepaid expenses and other current assets 985,453 730,299
Deferred tax asset   160,000     160,000  
Total current assets 27,504,208 24,904,914
Property and equipment 883,630 962,504
Goodwill 1,416,929 1,416,929
Other assets - noncurrent 12,385 43,246
Deferred tax asset - noncurrent   2,056,500     2,056,500  
$ 31,873,652   $ 29,384,093  
Liabilities and Stockholders' Equity
Current liabilities:
Borrowings under credit facility - revolving credit $ 13,766,919 $ 11,940,419
Notes payable - current portion; includes related party notes
of $1,656,411 and $150,298, respectively 1,819,445 302,877
Convertible notes payable, related party 200,000 -
Trade payables 4,369,160 4,760,291
Accrued liabilities 1,794,671 1,388,238
Income taxes payable   -     16,087  
Total current liabilities 21,950,195 18,407,912
Convertible notes payable, excluding current portion-related party - 200,000
Notes payable, excluding current portion; includes related party
notes of $305,170 and $1,134,934, respectively 544,783 1,433,257
Deferred tax liability - noncurrent   567,000     567,000  
Total liabilities   23,061,978     20,608,169  
 
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,
9,154,953 shares issued and outstanding 457,747 457,747
Additional paid-in capital 12,596,866 12,596,866
Accumulated deficit   (4,257,170 )   (4,292,920 )
Total stockholders' equity   8,811,674     8,775,924  
$ 31,873,652   $ 29,384,093  

 

 

               
CCOM Group, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
 
For The Three Months Ended For The Six Months Ended
June 30, June 30,
  2015     2014     2015     2014  
Sales $ 22,324,307 $ 23,858,421 $ 37,880,569 $ 39,984,121
Cost of sales   16,457,650     17,757,079     27,402,586     29,384,544  
Gross profit 5,866,657 6,101,342 10,477,983 10,599,577
 
Selling, general and administrative expenses, net   5,046,574     4,878,432     10,247,903     10,051,700  
Operating income 820,083 1,222,910

 

230,080

 

547,877
 
Other income 31,631 53,733 76,503 101,690
Interest expense, net; includes related party interest of
$29,617 and $29,992 for three months ended June 30, 2015
and 2014, respectively, and $59,215 and $60,440 for the
six months ended June 30, 2015 and 2014, respectively   (139,405 )   (148,990 )   (270,833 )   (287,396 )

Income before income tax expense

712,309 1,127,653 35,750 362,171
 
Income tax expense   -     10,500     -     21,000  
Net income $   712,309   $   1,117,153   $   35,750   $   341,171  
 
Income per common share:
Basic $ 0.08   $ 0.12   $ 0.00   $ 0.04  
Diluted $ 0.08   $ 0.12   $ 0.00   $ 0.04  
 

Weighted average shares outstanding:

Basic   9,154,953     9,154,953     9,154,953     9,154,953  
Diluted   9,439,565     9,439,565     9,439,565     9,439,565  
 
       
CCOM GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
For The Six Months Ended
June 30,
2015 2014
Cash flows from operating activities:
Net income $ 35,750 341,171
Adjustments to reconcile net income to net cash
used in operating activities:
Deferred income taxes - 21,000
Provision for doubtful accounts 135,387 217,580
Depreciation 155,457 146,813
Net gain on sale of fixed assets - (4,300 )
Changes in operating assets and liabilities
Accounts receivable (1,447,716 ) (1,538,816 )
Inventory (834,959 ) (1,467,151 )
Prepaid expenses and other current assets (255,154 ) (187,656 )
Other assets - noncurrent 30,861 97,500
Trade payables (391,131 ) 411,632
Accrued liabilities 406,433 (31,658 )
Income taxes payable (16,087 ) 3,715  
Net cash used in operating activities (2,181,159 ) (1,990,170 )
 
Cash flows from investing activities:
Additions to property and equipment (48,332 ) (225,637 )
Proceeds from disposal of property and equipment -     4,300  
Net cash used in investing activities (48,332 )

 

(221,337 )
 
Cash flows from financing activities:
Repayments of notes payable: includes related party
repayments of $1,573,651 and $1,068,007 respectively (1,650,158 ) (1,116,353 )
Issuance of notes payable, related party 2,250,000 1,000,000
Borrowings under credit facility - revolving credit, net 1,826,500   2,221,901  
Net cash provided by financing activities 2,426,342   2,105,548  
Increase (decrease) in cash 196,851 (105,959 )
Cash - beginning of period 238,696   377,461  
Cash - end of period $ 435,547   271,502  

 

Contacts

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

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