Market Overview

CCOM Group, Inc. Reports 2018 Second Quarter Results

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CCOM Group, Inc. ("CCOM") (OTC Pink: "CCOM," "CCOMP"), announced its
financial results for the quarter and six months ended June 30, 2018.

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

  • Sales increased 8.8% to $28,974,609 from $26,624,977
  • Gross profit increased 9.2% to $7,496,549 from $6,864,017
  • Selling, general and administrative expenses increased 7.0% to
    $6,006,236 from $5,610,928
  • Operating income increased 18.9% to $1,490,313 from $1,253,089
  • Net income increased 14.2% to $1,217,349 from $1,066,070; 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 $0.13 per
    share from $0.11 per share

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

  • Sales increased 10.2% to $48,820,916 from $44,296,353
  • Gross profit increased 9.5% to $13,002,908 from $11,874,016
  • Selling, general and administrative expenses increased 7.6% to
    $12,011,494 from $11,162,264
  • Operating income increased 39.3% to $991,414 from $711,752
  • Net income increased 51.0% to $628,478 from $416,341; 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 $0.06 per
    share 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, 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,

2018

December 31,

2017

 
(Unaudited)
 
Assets
Current assets:
Cash $ 511,912 $ 506,635
Accounts receivable, net of allowance for doubtful accounts
of $786,797 and $1,052,963, respectively 13,282,682 11,522,688
Inventory 18,594,819 16,231,516
Prepaid expenses and other current assets   1,133,676     1,121,745  
Total current assets 33,523,089 29,382,584
Property and equipment 681,269 568,079
Goodwill 1,416,929 1,416,929
Other assets - noncurrent 378,833 424,375
Deferred tax asset - noncurrent   1,622,000     1,682,000  
$ 37,622,120   $ 33,473,967  
Liabilities and Stockholders' Equity
Current liabilities:
Borrowings under credit facility - revolving credit $ 17,912,614 $ 14,464,649
Notes payable - current portion; includes related party notes
of $705,385 and $196,587, respectively 769,462 279,606
Trade payables 4,148,489 4,558,305
Accrued liabilities 2,084,634 2,165,224
Income taxes payable   403     18,488  
Total current liabilities 24,915,602 21,486,272
Notes payable, excluding current portion; includes related party
notes of $495,392 and $599,291, respectively 735,576 645,231
Deferred tax liability - noncurrent   567,000     567,000  
Total liabilities   26,218,178     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   (1,664,888 )   (2,293,366 )
Total stockholders' equity   11,403,942     10,775,464  
$ 37,622,120   $ 33,473,967  
 
   
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,

2018

2017 2018 2017
Sales $ 28,974,609 $ 26,624,977 $ 48,820,916 $ 44,296,353
Cost of sales 21,478,060 19,760,960 35,818,008 32,422,337
Gross profit 7,496,549 6,864,017 13,002,908 11,874,016
 
Selling, general and administrative expenses 6,006,236 5,610,928 12,011,494 11,162,264
Operating income 1,490,313 1,253,089

$

991,414

$

711,752
 
Other income 83,438 59,372 157,813 108,657
Interest expense, net; includes related party interest of $18,710
and $24,803 for three months ended June 30, 2018 and 2017,
respectively, and $33,216 and $43,986 for the six months ended June
30, 2018 and 2017, respectively
 
 
(195,774) (168,254) (360,121) (316,145)
Income from operations 1,377,977 1,144,207 789,106 504,264
 
Income tax expense 160,628 78,137 160,628 87,923
Net income $ 1,217,349 $ 1,066,070 $ 628,478 $ 416,341
 
Income per common share:
Basic $ 0.13 $ 0.11 $ 0.07 $ 0.04
Diluted $ 0.13 $ 0.11 $ 0.06 $ 0.04
 
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,
2018   2017  
Cash flows from operating activities:
Net income $ 628,478 $ 416,341
Adjustments to reconcile net income to net cash
used in operating activities:
Deferred income taxes 60,000 60,000
Provision for doubtful accounts 121,584 125,946
Depreciation 159,332 190,328
Net gain on sale of fixed assets (16,756 ) -
Changes in operating assets and liabilities
Accounts receivable (1,881,578 ) (2,261,284 )
Inventory (2,363,303 ) (2,569,257 )
Prepaid expenses and other current assets (11,931 ) (159,195 )
Other assets - noncurrent 45,542 -
Trade payables (409,816 ) 1,070,626
Accrued liabilities (80,590 ) (102,674 )
Income taxes payable (18,085 ) (27,188 )
Net cash used in operating activities (3,767,123 ) (3,256,357 )
 
Cash flows from investing activities:
Additions to property and equipment (37,703 ) (38,063 )
Proceeds from disposal of property and equipment 35,027   -  
Net cash used in investing activities (2,676 ) (38,063 )
 
Cash flows from financing activities:
Repayments of notes payable: includes related party
repayments of $95,327 and $86,385 respectively (172,889 ) (180,473 )
Repayments of short term financing, related party (500,000 ) (1,000,000 )
Issuance of short term financing, related party 1,000,000 1,500,000
Borrowings under credit facility - revolving credit, net 3,447,965   3,004,226  
Net cash provided by financing activities 3,775,076   3,323,753  
Increase in cash 5,277 29,333
Cash - beginning of period 506,635   448,758  
Cash - end of period $ 511,912   $ 478,091  

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