CCOM Group, Inc. Reports 2021 Third Quarter Results

HAWTHORNE, N.J.--(BUSINESS WIRE)--CCOM Group, Inc. (“CCOM”) (OTC Pink: “CCOM,” “CCOMP”), announced its financial results for the three and nine months ended September 30, 2021.

Results for the three months ended September 30, 2021 compared to results for the same period in 2020:

• Sales increased 14.6% to $32,310,514 from $28,185,554
• Gross profit increased 21.8% to $9,012,731 from $7,401,499
• Selling, general and administrative expenses increased 19.4% to $7,365,369 from $6,169,708
• Operating income increased 33.7% to $1,647,362 compared to $1,231,791
• Net income of $3,615,164 compared to $917,443; the 2021 and 2020 amounts each include a $158,333 non-cash deferred income tax expense (with a corresponding decrease to CCOM’s deferred tax asset). The 2021 amount includes a $2,285,256 gain on early extinguishment of PPP debt.
• Net income per share on a fully diluted basis increased to $0.37 per share from $0.09 per share

Results for the nine months ended September 30, 2021 compared to results for the same period in 2020:

• Sales increased 17.9% to $91,076,042 from $77,279,836
• Gross profit increased 24.5% to $24,868,691 from $19,979,153
• Selling, general and administrative expenses increased 11.1% to $20,273,021 from $18,242,620
• Operating income of $4,595,670 compared to $1,736,533
• Net income of $6,209,349 compared to $1,161,213; the 2021 and 2020 amounts each include a $158,333 non-cash deferred income tax expense (with a corresponding decrease to CCOM’s deferred tax asset). The 2021 amount includes a $2,285,256 gain on early extinguishment of PPP debt.
• Net income per share on a fully diluted basis increased to $0.64 per share from $0.12 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 15 locations in its geographic trading area. For more information on CCOM’s operations, products and/or services, please visit www.ccom-group.com.

(Financial Highlights Follow)

CCOM GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
		September 30,		December 31,
		2021		2020
		(Unaudited)
Assets
Current assets:
Cash	$	296,154	$	388,267
Accounts receivable, net of allowance for doubtful accounts of $664,162 and $766,459, respectively
		11,699,412		10,305,665
Inventory		23,575,963		20,936,936
Prepaid expenses and other current assets		821,064		749,053
Total current assets		36,392,593		32,379,921
Property and equipment		1,520,783		1,095,506
Goodwill		1,416,928		1,416,929
Other assets - noncurrent		576,835		188,824
Deferred tax asset - noncurrent		2,231,909		2,548,575
	$	42,139,048	$	37,629,755
Liabilities and Stockholders' Equity
Current liabilities:
Borrowings under credit facility - revolving credit	$	9,492,568	$	9,151,368
Notes payable - current portion		161,629		627,009
Trade payables		5,450,050		5,892,126
Accrued liabilities		3,189,541		2,450,810
Income taxes payable		-		2,850
Total current liabilities		18,293,788		18,124,163
Notes payable, excluding current portion		378,061		2,247,742
Deferred tax liability - noncurrent		354,000		354,000
Total liabilities		19,025,849		20,725,905
Commitments and contingencies
Stockholders' equity:
Redeemable convertible preferred stock, $.05 par value, 2,500,000 shares authorized, 284,612 shares issued and
(Repayments) borrowings under credit facility - revolving credit, net		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		10,044,369		3,835,020
Total stockholders' equity		23,113,199		16,903,850
	$	42,139,048	$	37,629,755
The accompanying notes are integral part of these condensed consolidated financial statements.

CCOM GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
	For The Three Months Ended				For The Nine Months Ended
	September 30,				September 30,
		2021		2020		2021		2020
Sales	$	32,310,514	$	28,185,554	$	91,076,042	$	77,279,836
Cost of sales		23,297,783		20,784,055		66,207,351		57,300,683
Gross profit		9,012,731		7,401,499		24,868,691		19,979,153
Selling, general and administrative expenses		7,365,369		6,169,708		20,273,021		18,242,620
Operating income		1,647,362		1,231,791		4,595,670		1,736,533
Gain on Early Extinguishment of debt		2,285,256		-		2,285,256		-
Other income		42,121		44,026		139,719		179,364
Interest expense, net		(83,722)		(78,525)		(252,551)		(297,736)
Income from operations		3,891,017		1,197,292		6,768,094		1,618,161
Income tax expense		275,853		279,849		558,745		456,948
Net income	$	3,615,164	$	917,443	$	6,209,349	$	1,161,213
Income per common share:
Basic	$	0.38	$	0.10	$	0.66	$	0.12
Diluted	$	0.37	$	0.09	$	0.64	$	0.12
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
The accompanying notes are integral part of these condensed consolidated financial statements.

CCOM Group, Inc.
Consolidated Statements of Stockholders' Equity
For Nine Months Ended September 30, 2021
(Unaudited)
	Number of shares
	Redeemable Convertible Preferred Stock	Common Stock	Redeemable Convertible Preferred Stock		Common Stock		Additional Paid-In Capital		Accumulated Deficit		Total Stockholders' Equity
Balance at December 31, 2020	284,612	9,154,928	$	14,231	$	457,746	$	12,596,853	$	3,835,020	$	16,903,850
Net Income	-	-		-		-		-		13,839		13,839
Balance at March 31, 2021	284,612	9,154,928	$	14,231	$	457,746	$	12,596,853	$	3,848,859	$	16,917,689
Net Income										2,580,346		2,580,346
Balance at June 30, 2021	284,612	9,154,928	$	14,231	$	457,746	$	12,596,853	$	6,429,205	$	19,498,035
Net Income										3,615,164		3,615,164
Balance at September 30, 2021	284,612	9,154,928	$	14,231	$	457,746	$	12,596,853	$	10,044,369	$	23,113,199
The accompanying notes are integral part of these condensed consolidated financial statements.

CCOM GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
		For The Nine Months Ended
		September 30,
		2021		2020
Cash flows from operating activities:
Net income	$	6,209,349	$	1,161,213
Adjustments to reconcile net income to net cash
provided by operating activities:
Deferred income taxes		316,666		316,666
Provision for doubtful accounts		62,395		274,627
Depreciation		384,870		309,633
Net gain on sale of property and equipment		(6,200)		(12,300)
Forgiveness of financing		(2,285,256)		-
Changes in operating assets and liabilities
Accounts receivable		(1,456,142)		151,870
Inventory		(2,639,027)		(1,196,752)
Prepaid expenses and other current assets		(72,011)		273,993
Other assets - noncurrent		(388,011)		109,474
Trade payables		(442,076)		1,051,231
Accrued liabilities		738,731		(280,992)
Income taxes payable		(2,850)		(24,625)
Net cash provided by operating activities		420,438		2,134,038
Cash flows from investing activities:
Additions to property and equipment		(741,119)		(228,920)
Proceeds from disposal of property and equipment		6,200		12,300
Net cash used in investing activities		(734,919)		(216,620)
Cash flows from financing activities:
Repayments of notes payable		(118,832)		(86,670)
Issuance of financing		-		2,285,256
Borrowings (repayments) under credit facility - revolving credit, net		341,200		(4,022,898)
Net cash provided by (used in) financing activities		222,368		(1,824,312)
(Decrease) / Increase in cash		(92,113)		93,106
Cash - beginning of period		388,267		193,448
Cash - end of period	$	296,154	$	286,554
The accompanying notes are integral part of these condensed consolidated financial statements.