Market Overview

CCOM Group, Inc. Reports 2020 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, 2020.

Results for the quarter ended June 30, 2020 compared to results for the same period in 2019:

  • Sales decreased 18.4% to $26,685,479 from $32,689,122
  • Gross profit decreased 19.0% to $6,663,143 from $8,229,001
  • Selling, general and administrative expenses decreased 15.3% to $5,560,415 from $6,563,073
  • Operating income decreased 33.8% to $1,102,728 from $1,665,928
  • Net income decreased 27.7% to $931,921 from $1,288,227; the 2020 and 2019 amounts each include a $158,333 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 decreased to $0.10 per share from $0.13 per share

Results for the six months ended June 30, 2020 compared to results for the same period in 2019:

  • Sales decreased 9.9% to $49,094,282 from $54,492,732
  • Gross profit decreased 12.3% to $12,577,654 from $14,337,141
  • Selling, general and administrative expenses decreased 6.4% to $12,072,912 from $12,894,737
  • Operating income decreased 65.0% to $504,742 from $1,442,404
  • Net income decreased 73.4% to $243,770 from 916,655; the 2020 and 2019 amounts each include a $158,333 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 decreased to $0.03 per share from $0.09 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.ccom-group.com.

For further information, please contact Peter D. Gasiewicz, Chief Executive Officer, or William Salek, Chief Financial Officer, at (973) 427-8224.

(Financial Highlights Follow)

 
CCOM GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
 
June 30, December 31,

2020

2019

(Unaudited)
 

Assets

Current assets:

Cash

$ 521,423

$ 193,448

Accounts receivable, net of allowance for doubtful accounts

of $792,777 and $557,532, respectively

12,712,215

11,260,382

Inventory

17,363,545

17,858,956

Prepaid expenses and other current assets

791,720

973,961

Total current assets

31,388,903

30,286,747

Property and equipment

1,070,912

1,009,524

Goodwill

1,416,929

1,416,929

Other assets - noncurrent

290,346

356,788

Deferred tax asset - noncurrent

2,640,667

2,799,000

 

$ 36,807,757

$ 35,868,988

Liabilities and Stockholders' Equity

Current liabilities:

Borrowings under credit facility - revolving credit

$ 11,942,152

$ 12,395,838

Notes payable - current portion

1,456,409

107,776

Trade payables

3,665,493

4,128,135

Accrued liabilities

1,983,554

2,657,118

Income taxes payable

16,625

24,625

Total current liabilities

19,064,233

19,313,492

Notes payable, excluding current portion

1,295,789

351,531

Deferred tax liability - noncurrent

354,000

354,000

Total liabilities

20,714,022

20,019,023

 

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

3,024,905

2,781,135

Total stockholders' equity

16,093,735

15,849,965

$ 36,807,757

$ 35,868,988

 
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,

2020

2019

2020

2019

Sales $

26,685,479

$

32,689,122

$

49,094,282

$

54,492,732

Cost of sales

20,022,336

24,460,121

36,516,628

40,155,591

Gross profit

6,663,143

8,229,001

12,577,654

14,337,141

 
Selling, general and administrative expenses

5,560,415

6,563,073

12,072,912

12,894,737

Operating income

1,102,728

1,665,928

504,742

1,442,404

 
Other income

78,884

50,957

135,338

108,308

Interest expense, net; includes related party interest of

$0 and $15,968 for three months ended June 30, 2020

and 2019, respectively, and $0 and $26,905 for the

six months ended June 30, 2020 and 2019, respectively

(87,658)

(216,206)

(219,211)

(403,225)

Income from operations

1,093,954

1,500,679

420,869

1,147,487

 
Income tax expense

162,033

212,452

177,099

230,832

Net income $

931,921

$

1,288,227

$

243,770

$

916,655

 
Income per common share:
Basic

$ 0.10

$ 0.14

$ 0.03

$ 0.10

Diluted

$ 0.10

$ 0.13

$ 0.03

$ 0.09

 
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,

2020

2019

Cash flows from operating activities:
Net income $

243,770

$

916,655

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

158,333

158,333

Provision for doubtful accounts

214,436

67,001

Depreciation

201,283

145,927

Net gain on sale of fixed assets

(2,000)

(2,225)

Changes in operating assets and liabilities
Accounts receivable

(1,666,269)

(3,602,409)

Inventory

495,411

(1,338,883)

Prepaid expenses and other current assets

182,241

179,983

Other assets - noncurrent

66,442

42,626

Trade payables

(462,642)

(146,211)

Accrued liabilities

(673,564)

(6,938)

Income taxes payable

(8,000)

(715)

Net cash used in operating activities

(1,250,559)

(3,586,856)

 
Cash flows from investing activities:
Additions to property and equipment

(200,923)

(236,001)

Proceeds from disposal of property and equipment

2,000

7,000

Net cash used in investing activities

(198,923)

(229,001)

 
Cash flows from financing activities:
Repayments of notes payable: includes related party
repayments of $0 and $103,639 respectively

(54,113)

(136,497)

Issuance of financing

2,285,256

Repayments of short term financing, related party

-

(500,000)

Issuance of short term financing, related party

-

500,000

(Repayments) borrowings under credit facility - revolving credit, net

(453,686)

4,038,498

Net cash provided by financing activities

1,777,457

3,902,001

Increase in cash

327,975

86,144

Cash - beginning of period

193,448

307,472

Cash - end of period $

521,423

$

393,616

 

 

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