Business Wire | Nov 12, 2021 09:00AM EST

CCOM Group, Inc. Reports 2021 Third Quarter Results

Nov. 12, 2021

HAWTHORNE, N.J.--(BUSINESS WIRE)--Nov. 12, 2021--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 fordoubtful accounts 11,699,412 10,305,665of $664,162 and $766,459, respectively

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 9,492,568 9,151,368credit $ $

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, $.05par value,2,500,000 shares authorized, 284,612 sharesissued and

(Repayments) borrowings under credit facility - 14,231 14,231revolving credit, net

Common stock, $.05 par value, 20,000,000 sharesauthorized, 457,746 457,7469,154,928 shares issued and outstanding

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 consolidatedfinancial 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. 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 andadministrative 7,365,369 6,169,708 20,273,021 18,242,620expenses

Operating income 1,647,362 1,231,791 4,595,670 1,736,533

Gain on EarlyExtinguishment of 2,285,256 - 2,285,256 -debt

Other income 42,121 44,026 139,719 179,364

Interest expense, (83,722) (78,525) (252,551) (297,736)net

Income from 3,891,017 1,197,292 6,768,094 1,618,161operations

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 commonshare:

Basic $ 0.38 $ 0.10 $ 0.66 $ 0.12

Diluted $ 0.37 $ 0.09 $ 0.64 $ 0.12

Weighted averageshares

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 thesecondensed 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.

Consolidated Statements of Stockholders' Equity

For Nine Months Ended September 30, 2021

(Unaudited)

Number of shares

Redeemable Redeemable Convertible Common Convertible Common Additional Accumulated Total Preferred Stock Preferred Stock Paid-In Deficit Stockholders' Stock Stock Capital Equity

Balanceat 284,612 9,154,928 $ 14,231 $ 457,746 $ 12,596,853 $ 3,835,020 $ 16,903,850December 31, 2020

Net - - - - - 13,839 13,839Income

Balanceat March 284,612 9,154,928 $ 14,231 $ 457,746 $ 12,596,853 $ 3,848,859 $ 16,917,68931, 2021

Net 2,580,346 2,580,346Income

Balanceat June 284,612 9,154,928 $ 14,231 $ 457,746 $ 12,596,853 $ 6,429,205 $ 19,498,03530, 2021

Net 3,615,164 3,615,164Income

Balanceat 284,612 9,154,928 $ 14,231 $ 457,746 $ 12,596,853 $ 10,044,369 $ 23,113,199September 30, 2021

The accompanying notes are integral part of these condensed consolidatedfinancial 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211112005101/en/

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