Business Wire | Aug 10, 2020 09:00AM EDT

CCOM Group, Inc. Reports 2020 Second Quarter Results

Aug. 10, 2020

HAWTHORNE, N.J.--(BUSINESS WIRE)--Aug. 10, 2020--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 SUBSIDIARIESCondensed Consolidated Balance Sheets June 30, December 31, 2020 2019

(Unaudited) Assets

Current assets:

Cash $ 521,423 $ 193,448

Accounts receivable, net of allowance for doubtfulaccounts

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 parvalue,

2,500,000 shares authorized, 284,612 shares issuedand

outstanding, liquidation preference of $1,423,060 14,231 14,231

Common stock, $.05 par value, 20,000,000 sharesauthorized,

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 SUBSIDIARIESCondensed 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 5,560,415 6,563,073 12,072,912 12,894,737administrativeexpensesOperating 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; includesrelated partyinterest of$0 and $15,968 forthree months endedJune 30, 2020

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

six months endedJune 30, 2020 and (87,658) (216,206) (219,211) (403,225)2019, respectively

Income from 1,093,954 1,500,679 420,869 1,147,487operations Income tax expense 162,033 212,452 177,099 230,832

Net income $ 931,921 $ 1,288,227 $ 243,770 $ 916,655

Income per commonshare:Basic $ 0.10 $ 0.14 $ 0.03 $ 0.10

Diluted $ 0.10 $ 0.13 $ 0.03 $ 0.09

Weighted averagesharesoutstanding: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 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 cashused 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 liabilitiesAccounts 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 2,000 7,000equipmentNet cash used in investing activities (198,923) (229,001)

Cash flows from financing activities:Repayments of notes payable: includes relatedpartyrepayments of $0 and $103,639 respectively (54,113) (136,497)

Issuance of financing 2,285,256

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

(Repayments) borrowings under credit facility - (453,686) 4,038,498revolving credit, netNet 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



View source version on businesswire.com: https://www.businesswire.com/news/home/20200810005016/en/

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