CCOM Group, Inc. Reports 2019 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, 2019.

Results for the quarter ended June 30, 2019 compared to results for the same period in 2018:

  • Sales increased 12.8% to $32,689,122 from $28,974,609
  • Gross profit increased 9.8% to $8,229,001 from $7,496,549
  • Selling, general and administrative expenses increased 9.3% to $6,563,073 from $6,006,236
  • Operating income increased 11.8% to $1,665,928 from $1,490,313
  • Net income increased 5.8% to $1,288,227 from $1,217,349; the 2019 amount includes a $158,333 non-cash deferred income tax expense (with a corresponding decrease to CCOM’s deferred tax asset) and the 2018 amount includes a $60,000 non-cash deferred income tax expense.
  • Net income per share on a fully diluted basis remained $0.13 per share

Results for the six months ended June 30, 2019 compared to results for the same period in 2018:

  • Sales increased 11.6% to $54,492,732 from $48,820,916
  • Gross profit increased 10.3% to $14,337,141 from $13,002,908
  • Selling, general and administrative expenses increased 7.4% to $12,894,737 from $12,011,494
  • Operating income increased 45.5% to $1,442,404 from $991,414
  • Net income increased 45.9% to $916,655 from $628,478; the 2019 amount includes a $158,333 non-cash deferred income tax expense (with a corresponding decrease to CCOM’s deferred tax asset) and the 2018 amount includes a $60,000 non-cash deferred income tax expense.
  • Net income per share on a fully diluted basis increased to $0.09 per share from $0.06 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.ccomgrp.com.

(Financial Highlights Follow)

 

CCOM GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

 

June 30,

December 31,

2019

2018

(Unaudited)

 

Assets

Current assets:
Cash

$

393,616

$

307,472

Accounts receivable, net of allowance for doubtful accounts
of $461,902 and $497,526, respectively

 

14,920,365

 

11,384,957

Inventory

 

20,079,293

 

18,740,410

Prepaid expenses and other current assets

 

866,178

 

1,046,161

Total current assets

 

36,259,452

 

31,479,000

Property and equipment

 

899,718

 

612,600

Goodwill

 

1,416,929

 

1,416,929

Other assets - noncurrent

 

428,552

 

471,178

Deferred tax asset - noncurrent

 

2,541,667

 

2,700,000

$

41,546,318

$

36,679,707

Liabilities and Stockholders' Equity

Current liabilities:
Borrowings under credit facility - revolving credit

$

17,515,039

$

13,476,541

Notes payable - current portion; includes related party notes
of $219,272 and $211,226, respectively

 

312,070

 

264,266

Trade payables

 

5,508,800

 

5,655,011

Accrued liabilities

 

2,472,618

 

2,479,556

Income taxes payable

 

-

 

715

Total current liabilities

 

25,808,527

 

21,876,089

Notes payable, excluding current portion; includes related party
notes of $277,424 and $389,109, respectively

 

620,405

 

602,887

Deferred tax liability - noncurrent

 

354,000

 

354,000

Total liabilities

 

26,782,932

 

22,832,976

 
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

 

1,694,556

 

777,901

Total stockholders' equity

 

14,763,386

 

13,846,731

$

41,546,318

$

36,679,707

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,

2019

2018

2019

2018

Sales

$

 

 

32,689,122

 

$

 

 

28,974,609

 

$

 

 

54,492,732

 

$

 

 

48,820,916

 

Cost of sales

 

24,460,121

 

 

21,478,060

 

 

40,155,591

 

 

35,818,008

 

Gross profit

 

8,229,001

 

 

7,496,549

 

 

14,337,141

 

 

13,002,908

 

 
Selling, general and administrative expenses

 

6,563,073

 

 

6,006,236

 

 

12,894,737

 

 

12,011,494

 

Operating income

 

1,665,928

 

 

1,490,313

 

#

 

1,442,404

 

#

 

991,414

 

 
Other income

 

50,957

 

 

83,438

 

 

108,308

 

 

157,813

 

Interest expense, net; includes related party interest of
$15,968 and $18,710 for three months ended June 30, 2019
and 2018, respectively, and $26,905 and $33,216 for the
six months ended June 30, 2019 and 2018, respectively

 

(216,206

)

 

(195,774

)

 

(403,225

)

 

(360,121

)

Income from operations

 

1,500,679

 

 

1,377,977

 

 

1,147,487

 

 

789,106

 

 
Income tax expense

 

212,452

 

 

160,628

 

 

230,832

 

 

160,628

 

Net income

$

 

 

1,288,227

 

$

 

 

1,217,349

 

$

 

 

916,655

 

$

 

 

628,478

 

 
Income per common share:
Basic

$

0.14

 

$

0.13

 

$

0.10

 

$

0.07

 

Diluted

$

0.13

 

$

0.13

 

$

0.09

 

$

0.06

 

 
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,

2019

2018

Cash flows from operating activities:
Net income

$

 

916,655

 

$

 

628,478

 

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

158,333

 

60,000

 

Provision for doubtful accounts

67,001

 

121,584

 

Depreciation

145,927

 

159,332

 

Net gain on sale of fixed assets

(2,225

)

(16,756

)

Changes in operating assets and liabilities
Accounts receivable

(3,602,409

)

(1,881,578

)

Inventory

(1,338,883

)

(2,363,303

)

Prepaid expenses and other current assets

179,983

 

(11,931

)

Other assets - noncurrent

42,626

 

45,542

 

Trade payables

(146,211

)

(409,816

)

Accrued liabilities

(6,938

)

(80,590

)

Income taxes payable

(715

)

(18,085

)

Net cash used in operating activities

(3,586,856

)

(3,767,123

)

 
Cash flows from investing activities:
Additions to property and equipment

(236,001

)

(37,703

)

Proceeds from disposal of property and equipment

7,000

 

35,027

 

Net cash used in investing activities

(229,001

)

(2,676

)

 
Cash flows from financing activities:
Repayments of notes payable: includes related party
repayments of $103,639 and $95,327 respectively

(136,497

)

(172,889

)

Repayments of short term financing, related party

(500,000

)

(500,000

)

Issuance of short term financing, related party

500,000

 

1,000,000

 

Borrowings under credit facility - revolving credit, net

4,038,498

 

3,447,965

 

Net cash provided by financing activities

3,902,001

 

3,775,076

 

Increase in cash

86,144

 

5,277

 

Cash - beginning of period

307,472

 

506,635

 

Cash - end of period

$

 

393,616

 

$

 

511,912

 

 

Contacts

Peter D. Gasiewicz, Chief Executive Officer, or William Salek, Chief Financial Officer, at (973) 427-8224.

 

Contacts

Peter D. Gasiewicz, Chief Executive Officer, or William Salek, Chief Financial Officer, at (973) 427-8224.