CCOM Group, Inc. Reports 2020 First Quarter Results

HAWTHORNE, N.J.--(BUSINESS WIRE)--CCOM Group, Inc. (“CCOM”) (OTC Pink: “CCOM,” “CCOMP”), announced its financial results for the quarter ended March 31, 2020.

Results for the quarter ended March 31, 2020 compared to results for the same period in 2019:

• Sales increased 2.8% to $22,408,803 from $21,803,610
• Gross profit decreased 3.2% to $5,914,511 from $6,108,140
• Selling, general and administrative expenses increased 2.9% to $6,512,497 from $6,331,664
• Operating loss increased to $597,986 from $223,524
• Net loss increased 85.2% to $688,151 from $371,572
• Net loss per share on a fully diluted basis increased to $(0.07) 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 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 [phone].

(Financial Highlights Follow)

CCOM GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
	March 31,		December 31,
	2020		2019
	(Unaudited)
Assets
Current assets:
Cash	$	343,421	$	193,448
Accounts receivable, net of allowance for doubtful accounts of $608,479 and $557,532, respectively		11,720,659		11,260,382
Inventory		23,255,329		17,858,956
Prepaid expenses and other current assets		726,275		973,961
Total current assets		36,045,684		30,286,747
Property and equipment		1,038,055		1,009,524
Goodwill		1,416,929		1,416,929
Other assets - noncurrent		350,563		356,788
Deferred tax asset - noncurrent		2,799,000		2,799,000
	$	41,650,231	$	35,868,988
Liabilities and Stockholders' Equity
Current liabilities:
Borrowings under credit facility - revolving credit	$	13,088,802	$	12,395,838
Notes payable - current portion		109,373		107,776
Trade payables		10,404,732		4,128,135
Accrued liabilities		2,183,292		2,657,118
Income taxes payable		24,625		24,625
Total current liabilities		25,810,824		19,313,492
Notes payable, excluding current portion		323,593		351,531
Deferred tax liability - noncurrent		354,000		354,000
Total liabilities		26,488,417		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		2,092,984		2,781,135
Total stockholders' equity		15,161,814		15,849,965
	$	41,650,231	$	35,868,988

CCOM GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
	For the Three Months Ended
	March 31,
		2020			2019
Sales	$	22,408,803		$	21,803,610
Cost of sales		16,494,292			15,695,470
Gross profit		5,914,511			6,108,140
Selling, general and administrative expenses, net		6,512,497			6,331,664
Operating loss		(597,986	)		(223,524	)
Other income		56,454			57,351
Interest expense, net; includes related party interest of $0 and $10,937, respectively		(131,553	)		(187,019	)
Loss before income tax expense		(673,085	)		(353,192	)
Income tax expense		15,066			18,380
Net loss	$	(688,151	)	$	(371,572	)
Loss per common share:
Basic and diluted		$ (0.07	)		$ (0.04	)
Weighted average shares outstanding:
Basic and diluted		9,154,928			9,154,928

CCOM GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
		For The Three Months Ended
		March 31,
		2020			2019
Cash flows from operating activities:
Net loss	$	(688,151	)	$	(371,572	)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for doubtful accounts		58,753			(7,708	)
Depreciation		98,253			65,080
Net gain on sale of fixed assets		-			(2,225	)
Changes in operating assets and liabilities
Accounts receivable		(519,030	)		706,650
Inventory		(5,396,373	)		(2,916,636	)
Prepaid expenses and other current assets		247,686			(46,670	)
Other assets - noncurrent		6,225			6,177
Trade payables		6,276,597			(173,863	)
Accrued liabilities		(473,826	)		(220,397	)
Net cash used in operating activities		(389,866	)		(2,961,164	)
Cash flows from investing activities:
Additions to property and equipment		(126,784	)		(69,695	)
Proceeds from disposal of property and equipment		-			7,000
Net cash used in investing activities		(126,784	)		(62,695	)
Cash flows from financing activities:
Repayments of notes payable: includes related party repayments of $0 and $51,335 respectively		(26,341	)		(65,039	)
Borrowings under credit facility - revolving credit, net		692,964			3,263,877
Net cash provided by financing activities		666,623			3,198,838
Increase in cash		149,973			174,979
Cash - beginning of period		193,448			307,472
Cash - end of period	$	343,421		$	482,451