CCOM Group, Inc. Reports 2015 Second Quarter Results

August 13, 2015 | By Business Wire News

HAWTHORNE, N.J.

CCOM Group, Inc. (“CCOM”) (OTC Pink: “CCOM,” “CCOMP”), announced its financial results for the quarter ended June 30, 2015.

Results for the quarter ended June 30, 2015 compared to results for the same period in 2014:

Sales decreased 6.4% to $22,324,307 from $23,858,421
Gross profit decreased 3.8% to $5,866,657 from $6,101,342
Selling, general and administrative expenses increased 3.4% to $5,046,574 from $4,878,432 (2014 selling, general and administrative expenses include a one-time real estate tax refund of $285,897)
Operating income decreased 32.9% to $820,083 from $1,222,910
Net income decreased 36.2% to $712,309 from $1,117,153 (2014 results include the one-time real estate tax refund of $285,897 referred to above)
Net income per share on a fully diluted basis decreased to $0.08 from $0.12 per share

Results for the six months ended June 30, 2015 compared to results for the same period in 2014:

Sales decreased 5.3% to $37,880,569 from $39,984,121
Gross profit decreased 1.1% to $10,477,983 from $10,599,577
Selling, general and administrative expenses increased 2.0% to $10,247,903 from $10,051,700 (2014 selling, general and administrative expenses include a one-time real estate tax refund of $285,897)
Operating income decreased 58.0% to $230,080 from $547,877
Net income decreased 89.5% to $35,750 from $341,171 (2014 results include the one-time real estate tax refund of $285,897 referred to above)
Net income per share on a fully diluted basis decreased to $0.00 from $0.04 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
Condensed Consolidated Balance Sheets

		June 30,			December 31,
			2015			2014


	Assets
Current assets:
Cash		$	435,547		$	238,696
Accounts receivable, net of allowance for doubtful accounts
of $999,187 and $892,960, respectively			10,966,600			9,654,270
Inventory			14,956,608			14,121,649
Prepaid expenses and other current assets			985,453			730,299
Deferred tax asset			160,000			160,000
Total current assets			27,504,208			24,904,914
Property and equipment			883,630			962,504
Goodwill			1,416,929			1,416,929
Other assets – noncurrent			12,385			43,246
Deferred tax asset – noncurrent			2,056,500			2,056,500
		$	31,873,652		$	29,384,093
	Liabilities and Stockholders’ Equity
Current liabilities:
Borrowings under credit facility – revolving credit		$	13,766,919		$	11,940,419
Notes payable – current portion; includes related party notes
of $1,656,411 and $150,298, respectively			1,819,445			302,877
Convertible notes payable, related party			200,000			–
Trade payables			4,369,160			4,760,291
Accrued liabilities			1,794,671			1,388,238
Income taxes payable			–			16,087
Total current liabilities			21,950,195			18,407,912
Convertible notes payable, excluding current portion-related party			–			200,000
Notes payable, excluding current portion; includes related party
notes of $305,170 and $1,134,934, respectively			544,783			1,433,257
Deferred tax liability – noncurrent			567,000			567,000
Total liabilities			23,061,978			20,608,169

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			(4,257,170	)		(4,292,920	)
Total stockholders’ equity			8,811,674			8,775,924
		$	31,873,652		$	29,384,093


CCOM Group, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

	For The Three Months Ended								For The Six Months Ended
	June 30,								June 30,
			2015				2014				2015				2014
Sales	$		22,324,307		$		23,858,421		$		37,880,569		$		39,984,121
Cost of sales			16,457,650				17,757,079				27,402,586				29,384,544
Gross profit			5,866,657				6,101,342				10,477,983				10,599,577

Selling, general and administrative expenses, net			5,046,574				4,878,432				10,247,903				10,051,700
Operating income			820,083				1,222,910				230,080				547,877

Other income			31,631				53,733				76,503				101,690
Interest expense, net; includes related party interest of
$29,617 and $29,992 for three months ended June 30, 2015
and 2014, respectively, and $59,215 and $60,440 for the
six months ended June 30, 2015 and 2014, respectively			(139,405	)			(148,990	)			(270,833	)			(287,396	)
Income before income tax expense			712,309				1,127,653				35,750				362,171

Income tax expense			–				10,500				–				21,000
Net income	$		712,309		$		1,117,153		$		35,750		$		341,171

Income per common share:
Basic		$	0.08			$	0.12			$	0.00			$	0.04
Diluted		$	0.08			$	0.12			$	0.00			$	0.04

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


CCOM GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)

		For The Six Months Ended
		June 30,
		2015		2014
Cash flows from operating activities:
Net income	$	35,750		341,171
Adjustments to reconcile net income to net cash
used in operating activities:
Deferred income taxes		–		21,000
Provision for doubtful accounts		135,387		217,580
Depreciation		155,457		146,813
Net gain on sale of fixed assets		–		(4,300	)
Changes in operating assets and liabilities
Accounts receivable		(1,447,716	)	(1,538,816	)
Inventory		(834,959	)	(1,467,151	)
Prepaid expenses and other current assets		(255,154	)	(187,656	)
Other assets – noncurrent		30,861		97,500
Trade payables		(391,131	)	411,632
Accrued liabilities		406,433		(31,658	)
Income taxes payable		(16,087	)	3,715
Net cash used in operating activities		(2,181,159	)	(1,990,170	)

Cash flows from investing activities:
Additions to property and equipment		(48,332	)	(225,637	)
Proceeds from disposal of property and equipment		–		4,300
Net cash used in investing activities		(48,332	)	(221,337	)

Cash flows from financing activities:
Repayments of notes payable: includes related party
repayments of $1,573,651 and $1,068,007 respectively		(1,650,158	)	(1,116,353	)
Issuance of notes payable, related party		2,250,000		1,000,000
Borrowings under credit facility – revolving credit, net		1,826,500		2,221,901
Net cash provided by financing activities		2,426,342		2,105,548
Increase (decrease) in cash		196,851		(105,959	)
Cash – beginning of period		238,696		377,461
Cash – end of period	$	435,547		271,502