Business Wire | Nov 10, 2020 09:00AM EST

CCOM Group, Inc. Reports 2020 Third Quarter Results

Nov. 10, 2020

HAWTHORNE, N.J.--(BUSINESS WIRE)--Nov. 10, 2020--CCOM Group, Inc. ("CCOM") (OTC Pink: "CCOM," "CCOMP"), announced its financial results for the quarter and nine months ended September 30, 2020.

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

* Sales decreased 11.7% to $28,185,554 from $31,903,370 * Gross profit decreased 4.6% to $7,401,499 from $7,759,476 * Selling, general and administrative expenses decreased 7.3% to $6,169,708 from $6,658,897 * Operating income increased 11.9% to $1,231,791 from $1,100,579 * Net income increased 18.1% to $917,443 from $776,788; the 2020 and 2019 amounts 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 increased to $0.09 per share from $0.08 per share

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

* Sales decreased 10.6% to $77,279,836 from $86,396,102 * Gross profit decreased 9.6% to $19,979,153 from $22,096,617 * Selling, general and administrative expenses decreased 6.7% to $18,242,620 from $19,553,634 * Operating income decreased 23.1% to $1,618,161 from $2,104,893 * Net income decreased 31.4% to $1,161,213 from $1,693,443; the 2020 and 2019 amounts include a $316,666 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 $0.12 per share from $0.17 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.ccomgrp.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 SUBSIDIARIESCondensed Consolidated Balance Sheets September December 30, 31,

2020 2019

(Unaudited)

Assets

Current assets:Cash $ 286,554 $ 193,448

Accounts receivable, net of allowance for doubtful 10,833,885 11,260,382accounts of $793,952 and $557,532, respectivelyInventory 19,055,708 17,858,956

Prepaid expenses and other current assets 699,968 973,961

Total current assets 30,876,115 30,286,747

Property and equipment 1,183,043 1,009,524

Goodwill 1,416,929 1,416,929

Other assets - noncurrent 247,314 356,788

Deferred tax asset - noncurrent 2,482,334 2,799,000

$ $ 36,205,735 35,868,988

Liabilities and Stockholders' Equity

Current liabilities: $ 8,372,940 $Borrowings under credit facility - revolving credit 12,395,838

Notes payable - current portion 1,549,132 107,776

Trade payables 5,179,366 4,128,135

Accrued liabilities 2,376,126 2,657,118

Income taxes payable - 24,625

Total current liabilities 17,477,564 19,313,492

Notes payable, excluding current portion 1,362,993 351,531

Deferred tax liability - noncurrent 354,000 354,000

Total liabilities 19,194,557 20,019,023

Commitments and contingenciesStockholders' equity:Redeemable convertible preferred stock, $.05 parvalue, 2,500,000 shares authorized, 284,612 shares 14,231 14,231issued and (Repayments) borrowings under creditfacility - revolving credit, netCommon stock, $.05 par value, 20,000,000 shares 457,746 457,746authorized, 9,154,928 shares issued and outstandingAdditional paid-in capital 12,596,853 12,596,853

Retained earnings 3,942,348 2,781,135

Total stockholders' equity 17,011,178 15,849,965

$ $ 36,205,735 35,868,988

-

CCOM GROUP, INC. AND SUBSIDIARIESCondensed Consolidated Statements of Operations(Unaudited)For The Three Months Ended

For The Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

Sales$28,185,554

$31,903,370

$77,279,836

$86,396,102

Cost of sales20,784,055

24,143,894

57,300,683

64,299,485

Gross profit7,401,499

7,759,476

19,979,153

22,096,617

Selling, general and administrative expenses6,169,708

6,658,897

18,242,620

19,553,634

Operating income1,231,791

1,100,579

#1,736,533

#2,542,983

Other income44,026

49,594

179,364

157,902

Interest expense, net; includes related party interest of $0 and $7,708 for three months ended September 30, 2020 and 2019, respectively, and $0 and $34,503 for the nine months ended September 30, 2020 and 2019, respectively(78,525)

(192,767)

(297,736)

(595,992)

Income from operations1,197,292

957,406

1,618,161

2,104,893

Income tax expense279,849

180,618

456,948

411,450

Net income$917,443

$776,788

$1,161,213

$1,693,443

Income per common share:Basic$ 0.10

$ 0.08

$ 0.12

$ 0.18

Diluted$ 0.09

$ 0.08

$ 0.12

$ 0.17

Weighted average sharesoutstanding:Basic9,154,928

9,154,928

9,154,928

9,154,928

Diluted9,439,540

9,439,540

9,439,540

9,439,540

CCOM GROUP, INC. AND SUBSIDIARIESCondensed Consolidated Statements of Operations(Unaudited) For The Three Months For The Nine Months Ended Ended

September 30, September 30,

2020 2019 2020 2019

Sales $ 28,185,554 $ 31,903,370 $ 77,279,836 $ 86,396,102

Cost of sales 20,784,055 24,143,894 57,300,683 64,299,485

Gross profit 7,401,499 7,759,476 19,979,153 22,096,617

Selling, general and 6,169,708 6,658,897 18,242,620 19,553,634administrative expensesOperating income 1,231,791 1,100,579 # 1,736,533 # 2,542,983

Other income 44,026 49,594 179,364 157,902

Interest expense, net;includes related partyinterest of $0 and $7,708for three months ended (78,525) (192,767) (297,736) (595,992)September 30, 2020 and2019, respectively, and $0and $34,503 for the ninemonths ended September 30,2020 and 2019, respectivelyIncome from operations 1,197,292 957,406 1,618,161 2,104,893

Income tax expense 279,849 180,618 456,948 411,450

Net income $ 917,443 $ 776,788 $ 1,161,213 $ 1,693,443

Income per common share:Basic $ 0.10 $ 0.08 $ 0.12 $ 0.18

Diluted $ 0.09 $ 0.08 $ 0.12 $ 0.17

Weighted average sharesoutstanding: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 SUBSIDIARIESCondensed Consolidated Statements of Cash Flows(Unaudited)For The Nine Months EndedSeptember 30,2020

2019

Cash flows from operating activities:Net income$1,161,213

$1,693,443

Adjustments to reconcile net income to net cash used in operating activities:Deferred income taxes316,666

316,666

Provision for doubtful accounts274,627

151,254

Depreciation309,633

230,201

Net gain on sale of fixed assets(12,300)

(2,225)

Changes in operating assets and liabilitiesAccounts receivable151,870

(1,199,571)

Inventory(1,196,752)

(1,711,727)

Prepaid expenses and other current assets273,993

51,631

Other assets - noncurrent109,474

109,366

Trade payables1,051,231

9,515

Accrued liabilities(280,992)

285,484

Income taxes payable(24,625)

(715)

Net cash provided by (used in) operating activities2,134,038

(66,678)

Cash flows from investing activities:Additions to property and equipment(228,920)

(337,549)

Proceeds from disposal of property and equipment12,300

7,000

Net cash used in investing activities(216,620)

(330,549)

Cash flows from financing activities:Repayments of notes payable: includes related party repayments of $0 and $600,335 respectively(86,670)

(655,885)

Repayments of short term financing, related party(500,000)

Issuance of financing2,285,256

Issuance of short term financing, related party500,000

Borrowings under credit facility - revolving credit, net(4,022,898)

1,177,245

Net cash (used in) provided by financing activities(1,824,312)

521,360

Increase in cash93,106

124,133

Cash - beginning of period193,448

307,472

Cash - end of period$286,554

$431,605

View source version on businesswire.com: https://www.businesswire.com/news/home/20201110005150/en/

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