CCOM Group, Inc. Reports 2014 Results

March 30, 2015 | By Business Wire News

HAWTHORNE, N.J.

CCOM Group, Inc. (“CCOM”) (OTC Pink: “CCOM,” “CCOMP”), announced its financial results for the year ended December 31, 2014.

Results for the year ended December 31, 2014 compared to results for the same period in 2013:

Sales decreased 8.4% to $81,048,785 from $88,458,677
Gross profit decreased 4.2% to $21,400,992 from $22,327,630
Selling, general and administrative expenses decreased 3.5% to $20,240,991 from $20,980,190
Operating income decreased 13.9% to $1,160,001 from $1,347,440
Net income decreased 74.5% to $761,240 from $2,983,212; the 2014 amount includes a $25,153 non-cash income tax expense and the 2013 amount includes a $2,074,500 non-cash income tax benefit
Net income per share on a fully diluted basis decreased to $0.08 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, appliances 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, American/Universal Supply Division, www.ausupplyinc.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.ccomgrp.com.


CCOM GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
		December 31,			December 31,
		2014			2013
	Assets
Current assets:
Cash		$	238,696		$	377,461
Accounts receivable, net of allowance for doubtful accounts of $892,960 and $657,765, respectively			9,654,270			9,729,122
Inventory			14,121,649			12,349,272
Prepaid expenses and other current assets			730,299			1,065,101
Deferred income tax asset			160,000			200,000
	Total current assets		24,904,914			23,720,956
Property and equipment, net			962,504			865,764
Goodwill			1,416,929			1,416,929
Other assets – noncurrent			43,246			107,718
Deferred income tax asset – noncurrent			2,056,500			2,016,500
		$	29,384,093		$	28,127,867
	Liabilities and Stockholders’ Equity
Current liabilities:
Borrowings under credit facility – revolving credit		$	11,940,419		$	11,952,588
Notes payable, current portion; includes related party notes of $150,298 and $638,779, respectively			302,877			776,746
Trade payables			4,760,291			3,307,881
Accrued liabilities			1,388,238			1,664,558
Income taxes payable			16,087			14,175
	Total current liabilities		18,407,912			17,715,948
Convertible notes payable; related parties			200,000			200,000
Notes payable, non-current portion; includes related party notes of $1,134,934 and $1,285,232, respectively			1,433,257			1,659,235
Deferred income tax liability – noncurrent			567,000			538,000
	Total liabilities		20,608,169			20,113,183
Commitments and contingencies
Stockholders’ equity:
Redeemable convertible preferred stock, $.05 par value, 2,500,000 shares authorized, 284,612 shares issued
and outstanding, liquidation preference of $1,423,060			14,231			14,231
Common stock, $.05 par value, 20,000,000 shares authorized, 9,154,953 shares issued and outstanding			457,747			457,747
Additional paid-in capital			12,596,866			12,596,866
Accumulated deficit			(4,292,920	)		(5,054,160	)
	Total stockholders’ equity		8,775,924			8,014,684
		$	29,384,093		$	28,127,867


CCOM GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Income

	For the Years Ended December 31,
	2014			2013
Sales	$	81,048,785		$	88,458,677
Cost of sales		59,647,793			66,131,047
Gross profit		21,400,992			22,327,630

Selling, general and administrative expenses, net		20,240,991			20,980,190
Operating income		1,160,001			1,347,440

Other income		196,533			196,180
Interest expense, net; includes related party interest expense of $114,892 and $130,284, respectively		(554,011	)		(604,318	)
Income before income tax (expense) benefit		802,523			939,302

Income tax (expense) benefit		(41,283	)		2,043,910
Net income	$	761,240		$	2,983,212

Income per common share:
Basic	$	0.08		$	0.33
Diluted	$	0.08		$	0.32

Weighted average shares outstanding:
Basic		9,154,953			9,154,953
Diluted		9,439,565			9,446,564


CCOM GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders’ Equity
For the Years Ended December 31, 2014 and 2013
	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, 2012	293,057		9,154,953	$	14,653		$	457,747	$	12,659,782		$	(8,037,372	)	$	5,094,810

Net Income	–		–		–			–		–			2,983,212			2,983,212
Preferred Stock Redemption	(8,445	)	–		(422	)		–		(62,916	)		–			(63,338	)
Balance at December 31, 2013	284,612		9,154,953	$	14,231		$	457,747	$	12,596,866		$	(5,054,160	)	$	8,014,684

Net Income	–		–		–			–		–			761,240			761,240
Balance at December 31, 2014	284,612		9,154,953	$	14,231		$	457,747	$	12,596,866		$	(4,292,920	)	$	8,775,924


CCOM GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows

		For The Years Ended December 31,
		2014		2013
Cash flows from operating activities:
Net income	$	761,240	$	2,983,212
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes		29,000		(2,074,500)
Provision for doubtful accounts		300,327		476,466
Depreciation and amortization		299,356		306,543
Net gain on sale of property and equipment		(14,945)		(9,759)
Changes in operating assets and liabilities:
Accounts receivable		(225,475)		925,729
Inventory		(1,772,377)		(319,872)
Prepaid expenses and other current assets		334,802		307,289
Other assets – noncurrent		64,472		162,547
Trade payables		1,452,410		(1,934,163)
Accrued liabilities		(276,320)		33,766
Income taxes payable		1,912		14,175
Net cash provided by operating activities		954,402		871,433

Cash flows from investing activities:
Additions to property and equipment		(335,077)		(138,359)
Proceeds from disposal of property and equipment		21,200		51,147
Net cash used in investing activities		(313,877)		(87,212)

Cash flows from financing activities:
Repurchase of preferred stock		–		(63,338)
Repayments of notes payable; includes related party repayments of $2,138,779 and $2,123,784,
respectively		(2,267,121)		(2,295,958)
Issuance of notes payable, related party		1,500,000		2,000,000
Repayments under credit facility – revolving credit, net		(12,169)		(344,592)
Net cash used in financing activities		(779,290)		(703,888)
(Decrease) increase in cash		(138,765)		80,333
Cash – beginning of year		377,461		297,128
Cash – end of year	$	238,696	$	377,461