CCOM Group, Inc. (“CCOM”) (OTC Pink: “CCOM,” “CCOMP”), announced its financial results for the year ended December 31, 2019.
Results for the year ended December 31, 2019 compared to results for the same period in 2018:
- Sales increased 8.6% to $113,701,032 from $104,657,935
- Gross profit increased 6.4% to $29,016,775 from $27,277,147
- Selling, general and administrative expenses increased 6.2% to $26,375,014 from $24,837,160
- Operating income increased 8.3% to $2,641,761 from $2,439,987
- Net income decreased 57.4% to $1,308,234 from $3,071,267; the 2019 amount includes a $596,000 non-cash income tax expense and the 2018 amount includes a $1,231,000 non-cash income tax benefit
- Net income per share on a fully diluted basis decreased to $0.13 per share from $0.32 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.
(Financial Highlights Follow)
CCOM GROUP, INC. AND SUBSIDIARIES | ||||||
Consolidated Balance Sheets | ||||||
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| December 31, |
| December 31, | ||
|
| 2019 |
| 2018 | ||
| Assets |
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Current assets: |
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Cash |
| $ | 193,448 |
| $ | 307,472 |
Accounts receivable, net of allowance for doubtful accounts of $557,532 and $497,526, respectively |
| 11,260,382 |
|
| 11,384,957 | |
Inventory |
| 17,858,956 |
|
| 18,740,410 | |
Prepaid expenses and other current assets |
| 973,961 |
|
| 1,046,161 | |
| Total current assets |
| 30,286,747 |
|
| 31,479,000 |
Property and equipment, net |
| 1,009,524 |
|
| 612,600 | |
Goodwill |
|
| 1,416,929 |
|
| 1,416,929 |
Other assets - noncurrent |
| 356,788 |
|
| 471,178 | |
Deferred income tax asset - noncurrent |
| 2,799,000 |
|
| 3,395,000 | |
|
| $ | 35,868,988 |
| $ | 37,374,707 |
| Liabilities and Stockholders' Equity |
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Current liabilities: |
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Borrowings under credit facility - revolving credit | $ | 12,395,838 |
| $ | 13,476,541 | |
Notes payable, current portion; includes related party notes of $0 and $211,226, respectively |
| 107,776 |
|
| 264,266 | |
Trade payables |
| 4,128,135 |
|
| 5,655,011 | |
Accrued liabilities |
| 2,657,118 |
|
| 2,479,556 | |
Income taxes payable |
| 24,625 |
|
| 715 | |
| Total current liabilities |
| 19,313,492 |
|
| 21,876,089 |
Notes payable, non-current portion; includes related party notes of $0 and $389,109, respectively |
| 351,531 |
|
| 602,887 | |
Deferred income tax liability - noncurrent |
| 354,000 |
|
| 354,000 | |
| Total liabilities |
| 20,019,023 |
|
| 22,832,976 |
Commitments and contingencies |
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Stockholders' equity: |
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Redeemable convertible preferred stock, $.05 par value, 2,500,000 shares authorized, 284,612 shares issued |
|
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| |||
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 |
| 2,781,135 |
|
| 1,472,901 | |
| Total stockholders' equity |
| 15,849,965 |
|
| 14,541,731 |
|
| $ | 35,868,988 |
| $ | 37,374,707 |
CCOM GROUP, INC. AND SUBSIDIARIES | |||||
Consolidated Statements of Income | |||||
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| For the Years Ended December 31, | ||||
| 2019 |
| 2018 | ||
Sales | $ | 113,701,032 |
| $ | 104,657,935 |
Cost of sales |
| 84,684,257 |
|
| 77,380,788 |
Gross profit |
| 29,016,775 |
|
| 27,277,147 |
|
|
|
| ||
Selling, general and administrative expenses, net |
| 26,375,014 |
|
| 24,837,160 |
Operating income |
| 2,641,761 |
|
| 2,439,987 |
|
|
|
| ||
Other income |
| 226,497 |
|
| 269,325 |
Interest expense, net; includes related party interest expense of $34,503 and $59,728, respectively |
| (748,440) |
|
| (745,019) |
Income before income tax expense (benefit) |
| 2,119,818 |
|
| 1,964,293 |
|
|
|
| ||
Income tax expense (benefit) |
| 811,584 |
|
| (1,106,974) |
Net income | $ | 1,308,234 |
| $ | 3,071,267 |
|
|
|
| ||
Income per common share: |
|
|
| ||
Basic | $ | 0.14 |
| $ | 0.33 |
Diluted | $ | 0.13 |
| $ | 0.32 |
|
|
|
| ||
Weighted average common shares outstanding: |
|
|
| ||
Basic |
| 9,154,928 |
|
| 9,154,928 |
Diluted |
| 9,439,540 |
|
| 9,439,540 |
|
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|
|
CCOM GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||||||
Consolidated Statements of Stockholders' Equity | ||||||||||||||||||||
For the Years Ended December 31, 2019 and 2018 | ||||||||||||||||||||
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| Number of shares |
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| Redeemable | Common | Redeemable | Common | Additional | Retained | Total | |||||||||||||
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Balance at December 31, 2017, as reported | 284,612 | 9,154,928 | $ | 14,231 | $ | 457,746 | $ | 12,596,853 | $ | (2,293,366) | $ | 10,775,464 | ||||||||
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Impact of change to deferred taxes |
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(See Note 1(r)) |
|
|
|
|
|
| 695,000 |
| 695,000 | |||||||||||
Balance at December 31, 2017, |
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as restated | 284,612 | 9,154,928 | $ | 14,231 | $ | 457,746 | $ | 12,596,853 | $ | (1,598,366) | $ | 11,470,464 | ||||||||
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Net Income | - | - |
| - |
| - |
| - |
| 3,071,267 |
| 3,071,267 | ||||||||
Balance at December 31, 2018 | 284,612 | 9,154,928 | $ | 14,231 | $ | 457,746 | $ | 12,596,853 | $ | 1,472,901 | $ | 14,541,731 | ||||||||
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Net Income | - | - |
| - |
| - |
| - |
| 1,308,234 |
| 1,308,234 | ||||||||
Balance at December 31, 2019 | 284,612 | 9,154,928 | $ | 14,231 | $ | 457,746 | $ | 12,596,853 | $ | 2,781,135 | $ | 15,849,965 | ||||||||
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CCOM GROUP, INC. AND SUBSIDIARIES | ||||||
Consolidated Statements of Cash Flows | ||||||
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| For the Years Ended December 31, | ||||
|
| 2019 |
| 2018 | ||
Cash flows from operating activities: |
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| ||
Net income | $ | 1,308,234 | $ | 3,071,267 | ||
Adjustments to reconcile net income to net cash provided |
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by operating activities: |
|
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Deferred income tax expense (benefit) |
| 596,000 |
| (1,231,000) | ||
Provision for doubtful accounts |
| 295,476 |
| 334,558 | ||
Depreciation and amortization |
| 319,042 |
| 298,654 | ||
Net gain on sale of property and equipment |
| (13,279) |
| (24,756) | ||
Changes in operating assets and liabilities: |
|
|
|
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Accounts receivable |
| (170,901) |
| (196,827) | ||
Inventory |
| 881,454 |
| (2,508,894) | ||
Prepaid expenses and other current assets |
| 72,200 |
| 75,584 | ||
Other assets – noncurrent |
| 114,390 |
| (46,803) | ||
Trade payables |
| (1,526,876) |
| 1,096,706 | ||
Accrued liabilities |
| 177,562 |
| 314,332 | ||
Income taxes payable |
| 23,910 |
| (17,773) | ||
Net cash provided by operating activities |
| 2,077,212 |
| 1,165,048 | ||
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Cash flows from investing activities: |
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Additions to property and equipment |
| (468,609) |
| (108,356) | ||
Proceeds from disposal of property and equipment |
| 37,000 |
| 43,027 | ||
Net cash used in investing activities |
| (431,609) |
| (65,329) | ||
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Cash flows from financing activities: |
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Repayments of notes payable; includes related party |
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repayments of $600,335 and $195,763, respectively |
| (678,924) |
| (310,774) | ||
Repayments of short-term financing, related party |
| (500,000) |
| (1,500,000) | ||
Issuance of short-term financing, related party |
| 500,000 |
| 1,500,000 | ||
Repayments under credit facility - revolving |
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credit, net |
| (1,080,703) |
| (988,108) | ||
Net cash used in financing activities |
| (1,759,627) |
| (1,298,882) | ||
Decrease in cash |
| (114,024) |
| (199,163) | ||
Cash - beginning of year |
| 307,472 |
| 506,635 | ||
Cash - end of year | $ | 193,448 | $ | 307,472 | ||
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Peter D. Gasiewicz, Chief Executive Officer, or William Salek, Chief Financial Officer, at (973) 427-8224
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