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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended August 31, 2004
Commission File Number 2-85538
CCA INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 04-2795439
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
200 Murray Hill Parkway
East Rutherford, NJ 07073
(Address of principal executive offices)(Zip Code)
(201) 330-1400
Registrant's telephone number, including area code
Indicate by check mark whether the Registrant: (1) has
filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the Registrant was re-
quired to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark whether the Registrant is an acceler-
ated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes No X
Common Stock, $.01 Par Value - 6,447,856 shares of as August 31,
2004
Class A Common Stock, $.01 Par Value - 958,230 shares as of
August 31, 2004
CCA INDUSTRIES, INC. AND SUBSIDIARIES
INDEX
Page
Number
PART I FINANCIAL INFORMATION:
Consolidated Balance Sheets as of
August 31, 2004 and November 30, 2003 1-2
Consolidated Statements of Operations
for the three months and nine months ended
August 31, 2004 and 2003 3
Consolidated Statements of Comprehensive Income
for the three months and nine months ended
August 31, 2004 and 2003 4
Consolidated Statements of Cash Flows for
the nine months ended August 31, 2004
and 2003 5
Notes to Consolidated Financial Statements 6-20
Item 2. Management Discussion and Analysis of
Results of Operations and Financial
Condition 21-22
Item 3. Quantitative and Qualitative Disclosures about
Market Risk 22
Item 4. Controls and Procedures 23
PART II OTHER INFORMATION 24
Item 1. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security
Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES 25
CCA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
A S S E T S
August 31, November 30,
2004 2003
(Unaudited)
Current Assets
Cash and cash equivalents $ 2,669,192 $ 1,206,787
Short-term investments and marketable
securities 3,501,105 2,632,448
Accounts receivable, net of allowances of
$788,297 and $895,723, respectively 9,263,533 6,604,982
Inventories 6,123,270 5,312,699
Prepaid expenses and sundry receivables 565,900 590,850
Deferred income taxes 786,159 963,566
Prepaid income taxes and refunds due - 236,620
Deferred advertising 1,911,634 -
Total Current Assets 24,820,793 17,547,952
Property and Equipment, net of
accumulated depreciation and
amortization 613,696 728,522
Intangible Assets, net of accumulated
amortization 499,035 532,193
Other Assets
Marketable securities 10,091,702 10,991,411
Other 37,963 39,138
Total Other Assets 10,129,665 11,030,549
Total Assets $36,063,189 $29,839,216
See Notes Consolidated to Financial Statements.
-1-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
August 31, November 30,
2004 2003
(Unaudited)
Current Liabilities
Accounts payable and accrued
liabilities $ 7,020,273 $ 5,603,150
Income taxes payable 694,618 -
Dividends payable 512,014 379,117
Total Current Liabilities 8,226,905 5,982,267
Subordinated Debentures 497,656 497,656
Deferred Income Taxes - 14,753
Shareholders' Equity
Preferred stock, $1.00 par; authorized
20,000,000 shares; none issued
Common stock, $.01 par; authorized
15,000,000 shares; 6,532,859 and
6,592,669 shares issued,
respectively 65,329 65,926
Class A common stock, $.01 par;
authorized 5,000,000 shares;
958,230 shares issued
and outstanding 9,582 9,582
Additional paid-in capital 3,835,133 3,831,425
Retained earnings 23,751,942 19,891,541
Unrealized gains (losses) on
marketable securities ( 173,687) ( 95,228)
27,488,299 23,703,246
Less: Treasury Stock (85,003
shares at August 31, 2004
and 274,055 shares at
November 30, 2003,
respectively) 149,671 358,706
Total Shareholders' Equity 27,338,628 23,344,540
Total Liabilities and
Shareholders' Equity $36,063,189 $29,839,216
See Notes to Consolidated Financial Statements.
-2-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended
August 31, August 31,
2004 2003 2004 2003
Revenues
Sales of Health
and Beauty Aid
Products - Net $16,535,940 $12,739,346 $47,609,050 $42,541,384
Other income 160,451 113,191 514,076 437,185
16,696,391 12,852,537 48,123,126 42,978,569
Costs and Expenses
Costs of sales 5,413,461 4,030,837 16,115,571 13,793,977
Selling, general and
administrative
expenses 4,739,038 4,195,547 13,038,772 13,232,809
Advertising,
cooperative
and promotions 3,932,062 2,404,560 9,819,958 7,760,818
Research and
development 226,283 229,477 666,755 661,250
Provision for
doubtful
accounts ( 37,605) ( 16,394) 37,100 216,499
Interest expense 8,671 8,010 25,500 23,808
14,281,910 0,852,037 39,703,656 35,689,161
Income before
Income Taxes 2,414,481 2,000,500 8,419,470 7,289,408
Provision for Income
Taxes 957,251 713,375 3,327,895 2,844,562
Net Income $1,457,230 $1,287,125 $5,091,575 $4,444,846
Earnings per Share
Basic $.20 $.18 $.70 $.61
Diluted $.19 $.17 $.67 $.59
Cash Dividends Declared
per Share $.00 $.00 $.14 $.12
See Notes to Consolidated Financial Statements.
-3-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Ended Nine Months Ended
August 31, August 31,
2004 2003 2004 2003
Net Income $1,457,230 $1,287,125 $5,091,575 $4,444,846
Other Comprehensive Income
Unrealized holding gains
(loss) on investments 203,419 ( 109,960) ( 78,459) ( 92,711)
Provision (Benefit) for
Taxes 80,648 ( 39,212) ( 31,012) ( 36,179)
Other Comprehensive
Income (Loss) - Net 122,771 ( 70,748) ( 47,447) ( 56,532)
Comprehensive Income $1,580,001 $1,216,377 $5,044,128 $4,388,314
Earnings Per Share:
Basic $.22 $.17 $.69 $.61
Diluted $.21 $.16 $.66 $.58
See Notes to Consolidated Financial Statements.
-4-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
August 31,
2004 2003
Cash Flows from Operating Activities:
Net income $5,091,575 $4,444,846
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 256,500 275,301
Loss (gain) on sale of marketable
securities and repurchase of
debentures 9,289 ( 22,758)
Decrease in deferred income taxes 162,654 126,624
(Increase) in accounts receivable (2,658,551) ( 624,540)
(Increase) in inventory ( 810,571) ( 2,048,156)
Decrease (increase) in prepaid
expenses and miscellaneous
receivables 24,950 ( 75,274)
(Increase) in deferred
advertising (1,911,634) ( 1,253,588)
Decrease in other assets 1,175 9,900
Increase in accounts payable
and accrued liabilities 1,417,125 1,088,116
Decrease in prepaid income taxes 236,620 1,703
Increase in taxes payable 694,618 1,175,014
Net Cash Provided by Operating
Activities 2,513,750 3,097,188
Cash Flows from Investing Activities:
Acquisition of property, plant
and equipment ( 105,613) ( 293,250)
Acquisition of intangible assets ( 2,905)( 2,846)
Purchase of marketable securities ( 2,703,858) ( 5,888,340)
Proceeds from sale and maturity of
investments 2,647,162 5,555,792
Net Cash (Used in) Investing
Activities ( 165,214) ( 628,644)
Cash Flows from Financing Activities:
Purchase of treasury stock ( 891,131) ( 5,771)
Dividends paid - ( 370,888)
Proceeds from exercise of common
stock options 5,000 -
Net Cash (Used in) Financing
Activities ( 886,131) ( 376,659)
Net Increase in Cash 1,462,405 2,091,885
Cash and Cash Equivalents at
Beginning Of Period 1,206,787 1,585,647
Cash and Cash Equivalents at End
of Period $2,669,192 $3,677,532
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for:
Interest $ 24,294 $ 31,441
Income taxes 2,203,617 1,537,051
Supplemental Disclosures of Non-Cash
Information:
Dividends declared and accrued $ 512,014 $ -
See Notes to Consolidated Financial Statements.
-5-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 -BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated finan-
cial statements have been prepared in accordance with
generally accepted accounting principles for interim
financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes re-
quired by generally accepted accounting principles for
complete financial statements. In the opinion of manage-
ment, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation
have been included. Operating results for the nine month
period ended August 31, 2004 are not necessarily indica-
tive of the results that may be expected for the year
ended November 30, 2004. For further information, refer
to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form
10-K for the year ended November 30, 2003.
NOTE 2 -ORGANIZATION AND DESCRIPTION OF BUSINESS
CCA Industries, Inc. ("CCA") was incorporated in the
State of Delaware on March 25, 1983.
CCA manufactures and distributes health and beauty aid
products.
CCA has several wholly-owned subsidiaries, CCA Cosmetics,
Inc., CCA Labs, Inc., Berdell, Inc., Nutra Care Corpora-
tion, CCA Online Industries, Inc., and CCA Industries
Canada (2003) Inc., all of which are currently inactive.
NOTE 3 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation:
The consolidated financial statements include the ac-
counts of CCA and its wholly-owned subsidiaries (collec-
tively the "Company").
-6-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates in Preparing Financial Statements:
The preparation of financial statements in conformity
with accounting principles generally accepted in the
United States of America requires management to make
estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of con-
tingent assets and liabilities at the date of the finan-
cial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results
could differ from those estimates.
Cash and Cash Equivalents:
For purposes of the statement of cash flows, the Company
considers all highly liquid instruments purchased with an
original maturity of less than three months to be cash
equivalents.
The Company has cash balances in excess of the maximum
amount insured by the FDIC as of August 31, 2004.
Short-Term Investments and Marketable Securities:
Short-term investments and marketable securities consist
of corporate and government bonds and equity securities.
The Company has classified its investments as Available-
for-Sale securities. Accordingly, such investments are
reported at fair market value, with the resultant unreal
ized gains and losses reported as a separate component of
shareholders' equity.
Inventories:
Inventories are stated at the lower of cost (first-in,
first-out) or market.
Product returns are recorded in inventory when they are
received at the lower of their original cost or market,
as appropriate. Obsolete inventory is written off and
its value is removed from inventory at the time its obso-
lescence is determined.
-7-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property and Equipment and Depreciation and Amortization
Property and equipment are stated at cost. The Company
charges to expense repairs and maintenance items, while
major improvements and betterments are capitalized. When
the Company sells or otherwise disposes of property and
equipment items, the cost and related accumulated depre-
ciation are removed from the respective accounts and any
gain or loss is included in earnings.
Depreciation and amortization are provided on the
straight-line method over the following estimated useful
lives or lease terms of the assets:
Machinery and equipment 5-7 Years
Furniture and fixtures 3-10 Years
Tools, dies and masters 3 Years
Transportation equipment 5 Years
Leasehold improvements Remaining life of the lease
(ranging from 1-9 years)
Intangible Assets:
Intangible assets are stated at cost. Patents and trade
marks are amortized on the straight-line method over a
period of 15-17 years.
Financial Instruments:
The carrying value of assets and liabilities considered
financial instruments approximate their respective fair
value.
Income Taxes:
Income tax expense includes federal and state taxes
currently payable and deferred taxes arising from tempo-
rary differences between income for financial reporting
and income tax purposes.
Tax Credits:
Tax credits, when present, are accounted for using the
flow-through method as a reduction of income taxes in the
years utilized.
Earnings Per Common Share:
Basic earnings per share is calculated using the average
number of shares of common stock outstanding during the
year. Diluted earnings per share is computed on the
basis of the weighted average number of common shares
outstanding plus the effect of outstanding stock options
using the "treasury stock method" and convertible deben-
tures using the "if-converted" method. Common stock
equivalents consist of stock options.
-8-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenue Recognition:
The Company recognizes sales upon shipment of merchan-
dise. Net sales are comprised of gross sales less ex-
pected returns, trade discounts, customer allowances and
various sales incentives. Although no legal right of
return exists between the customer and the Company, it is
an industry-wide practice to accept returns from custom-
ers. The Company, therefore, records a reserve for re -
turns equal to its gross profit on its historical per-
centage of returns on its last five months sales.
Accounts Receivable:
Accounts receivable consist of trade receivables recorded
at original invoice amount, less an estimated allowance
for uncollectible accounts. Trade credit is generally
extended on a short-term basis; thus trade receivables do
not bear interest, although a finance charge may be ap-
plied to receivables that are past due. Trade receivables
are periodically evaluated for collectibility based
on past credit history with customers and their current
financial condition. Changes in the estimated
collectibility of trade receivables are recorded in the
results of operations for the period in which the
estimate is revised. Trade receivables that are deemed
uncollectible are offset against the allowance for
uncollectible accounts. The Company generally does not
require collateral for trade receivables.
Accounts receivable with credit balances have been
included as a current liability in "Accounts payable and
accrued liabilities" in the accompanying balance sheet.
Accounts receivable are presented net of an allowance for
doubtful accounts of $278,449 and $549,851 as of August
31, 2004 and November 30, 2003, respectively.
Shipping and Handling Costs:
The Company presents shipping and handling costs as part
of selling, general and administrative expense and not as
part of cost of sales. Freight costs were $2,113,035,and
$2,302,746 for the nine months ended August 31, 2004 and
2003, respectively.
Comprehensive Income:
In accordance with the Financial Accounting Standards
Board ("FASB"), Statement on Financial Accounting
Standard No. 130 "Reporting Comprehensive Income", the
Company is required to report comprehensive income in
addition to net income from operations. Comprehensive
income is a more inclusive financial reporting
methodology that includes disclosure of certain financial
information that historically has not been recognized in
the calculation of net income.
Reclassifications
Certain prior year amounts have been reclassified to
conform to the 2004 presentation.
-9-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 -INVENTORIES
The components of inventory consist of the following:
August 31, November 30,
2004 2003
Raw materials $3,447,119 $3,746,522
Finished goods 2,676,151 1,566,177
$6,123,270 $5,312,699
At August 31, 2004 and November 30, 2003, the Company had
a reserve for obsolescence of $977,904 and $1,153,612,
respectively.
NOTE 5 - PROPERTY AND EQUIPMENT
The components of property and equipment consisted of the
following:
August 31, November 30,
2004 2003
Machinery and equipment $ 105,478 $ 105,478
Furniture and equipment 709,640 676,494
Transportation equipment 11,288 10,918
Tools, dies, and masters 405,959 347,560
Leasehold improvements 291,063 277,366
1,523,428 1,417,816
Less: Accumulated
depreciation and
amortization 909,732 689,294
Property and Equipment - Net $ 613,696 $ 728,522
Depreciation expense for the six months ended August 31,
2004 and 2003 amounted to $220,409 and $239,284,
respectively.
NOTE 6 - INTANGIBLE ASSETS
Intangible assets consist of the following:
August 31, November 30,
2004 2003
Patents and trademarks $762,298 $759,394
Less: Accumulated
amortization 263,263 227,201
Intangible Assets - Net $499,035 $532,193
Amortization expense for the nine months ended August 31,
2004 and 2003 amounted to $36,091 and $36,017,
respectively. Estimated amortization expense for each
quarter of the ensuing five years through May 31, 2009 is
$12,000.
-10-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 - DEFERRED ADVERTISING
In accordance with APB 28, Interim Financial Reporting,
the Company expenses its advertising and related costs
proportionately over the interim periods based on its
total expected costs per its various advertising
programs. Consequently a deferral of $1,930,556 is
accordingly reflected in the balance sheet for the
interim period. This deferral is the result of the
Company's $10 million media budget and $5.5 million co-op
budget for the year which contemplates lower spending in
the 4th quarter than in the other three quarters.
The table below sets forth the calculation:
August August
2004 2003
(In Millions) (In Millions)
Media advertising budget for
the fiscal year $10.00 $8.00
Pro-rata portion for nine months 7.50 $6.00
Media advertising spent 8.99 6.70
Accrual (deferral) ($ 1.49) ($.070)
Anticipated Co-op advertising
commitments $ 5.50 $5.00
Pro-rata portion for nine months 4.13 3.75
Co-op advertising spent 4.55 4.30
Accrual (deferral) ($ .42) ($ .55)
NOTE 8 -ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
The following items which exceeded 5% of total current
liabilities are included in accounts payable and accrued
liabilities as of:
August 31, November 30,
2004 2003
(In Thousands) (In Thousands)
a)Media advertising $ * $ *
b)Coop advertising 1,219 607
c)Accrued returns 1,123 787
d)Accrued bonuses 437 499
* under 5%
All other liabilities were for trade payables or
individually did not exceed 5% of total current
liabilities.
-11-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 - OTHER INCOME
Other income consists of the following at August 31:
2004 2003
Interest and dividend
income $388,898 $352,572
Royalty income 90,053 58,699
Miscellaneous 35,125 25,914
$514,076 $437,185
NOTE 10 - NOTES PAYABLE AND SUBORDINATED DEBENTURES
The Company has an available line of credit of
$10,000,000. Interest is calculated at the Company's
option, either on the outstanding balance at prime rate
minus 1% or Libor plus 150 basis points. The line of
credit is unsecured and the Company must adhere to
certain financial covenants pertaining to net worth and
debt coverage. The Company was not utilizing their
available credit line at August 31, 2004 or November 30,
2003.
On August 1, 2000, the Company repurchased (pursuant to a
tender offer) 278,328 shares of its outstanding common
stock by issuing subordinated debentures equal to $2 per
share, which accrue interest at 6% and are due to mature
on August 1, 2005. The interest is payable semi-
annually.
NOTE 11 - COMMITMENTS AND CONTINGENCIES
Litigation
The Company has been named as a defendant in 13 lawsuits
alleging that the plaintiffs were injured as a result of
their purchasing and ingesting our diet suppressant
containing phenylpropanolamine (PPA), which the Company
utilized as its active ingredient in its products prior
to November 2000. The lawsuits that were brought against
the Company are were for unspecified amounts of
compensatory and exemplary damages. Eleven of the suits
have been dismissed with prejudice. Outside counsel for
the Company believes that the two PPA cases still pending
against the Company are defensible. Of the Company's two
pending suits, there is a motion pending for the
dismissal of one and the other is insured by the
Company's liability carrier who is defending the case in
order to obtain a decision of dismissal on the merits.
Dividends
CCA declared a cash dividend of $0.14 per share payable
to all holders of the Company's common stock, $0.07 to
shareholders of record on May 1, 2004 payable on June 1,
2004 and $0.07 to shareholders of record on November 1,
2004, payable on December 1, 2004.
On June 17, 2004, the Board of Directors declared a 2%
stock dividend payable on December 1, 2004 to
shareholders of record on November 1, 2004.
-12-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12 - PENSION PLANS
The Company has adopted a 401(K) Profit Sharing Plan that
covers union and non-union employees with over one year
of service and attained Age 21. Employees may make
salary reduction contributions up to twenty-five percent
of compensation not to exceed the federal government
limits.
NOTE 13 - STOCK-BASED COMPENSATION
The Company accounts for its stock-based employee
compensation under the recognition and measurement
principles of Accounting Principles Board (APB) Opinion
No. 25, Accounting for Stock Issued to Employees, and
related interpretations. Under APB No. 25, when the
exercise price of stock options equals the market price
of the underlying stock on the date of grant, no
compensation expense is recognized in the consolidated
statement of operations.
During the second quarter of 2004, the Company issued
incentive stock options to purchase 66,600 shares and
non-qualified stock options to purchase 33,400 shares
under the 2003 stock option plan. Under the provisions
of APB No. 25, no compensation expense has been, or will
be, recognized in the consolidated statement of
operations.
Proforma net income and net income per share, as required
by SFAS No. 123, have been determined as if we had
accounted for all employee stock options granted under
SFAS No. 123's fair value method. The proforma effect of
recognizing compensation expense in accordance with SFAS
No. 123 is as follows:
Three Months Nine Months
Ended August 31, Ended August 31,
2004 2003 2004 2003
Net income as
reported $1,457,230 $1,287,125 $5,091,575 $4,444,846
SFAS No. 123 based
compensation ( 6,974) - ( 193,504) -
Income tax benefit 2,790 - 77,402 -
Net income -
proforma $1,453,046 $1,287,125 $4,975,473 $4,444,846
Basic net income
per share - as
reported $.20 $.18 $.70 $.61
Basic net income
per share -
proforma $.20 $.18 $.68 $.61
Diluted net income
per shares - as
reported $.19 $.17 $.67 $.59
Diluted net income
per share -
proforma $.19 $.17 $.65 $.59
Weighted average
shares used in
computing net
income and
proforma net
income per
share:
Basic 7,340,519 7,276,844 7,314,848 7,211,350
Diluted 7,619,540 7,674,234 7,593,220 7,593,596
-13-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 - STOCK-BASED COMPENSATION (Continued)
Proforma information regarding net income and net income
per share is required by SFAS No. 123, and has been
determined as if the Company had accounted for its
employee stock options under the fair value method of
SFAS No. 123. The fair value of these options were
estimated at the date of grant using the Black-Scholes
option pricing model with the following assumptions for
the three months and nine months ended August 31, 2004: a
risk-free interest rate of 3.78% and 4.73%; dividend
yield of 1.68% and 1.55%; volatility factor of the
expected market price of the Company's common stock of
20.32% and 9.74%; and a weighted average life of the
options of five or ten years.
The Black-Scholes option valuation model was developed
for use in estimating the fair value of traded options
which have no vesting restrictions and are fully
transferable. In addition, option valuation models
require the input of highly subjective assumptions.
Because the Company's employee stock options have
characteristics significantly different from those of
traded options and because changes in the subjective
input assumptions can materially affect the fair value
estimate, in management's opinion, the existing models do
not necessarily provide a reliable single measure of the
fair value of its employee stock options.
NOTE 14 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES
Short-term investments and marketable securities, which
consist of stock and various corporate and government
obligations, are stated at market value. The Company has
classified its investments as Available-for-Sale
securities and considers as current assets those
investments which will mature or are likely to be sold in
the next fiscal year. The remaining investments are
considered non-current assets. The cost and market
values of the investments at August 31, 2004 and November
30, 2003 were as follows:
-14-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES
August 31, 2004 November 30, 2003
COST MARKET COST MARKET
Current:
Corporate
obligations $ 775,000 $ 776,612 $ 850,860 $ 854,466
Government
obligations
(including
mortgage
backed
securities) 2,141,066 2,131,696 1,260,340 1,248,731
Common stock 253,134 253,834 304,379 295,538
Mutual funds 186,031 127,513 179,320 118,963
Other equity
investments 199,848 211,450 111,750 114,750
Total 3,555,079 3,501,105 2,706,649 2,632,448
Non-Current:
Corporate
obligations 5,623,227 5,581,904 5,374,706 5,342,893
Government obli-
gations 3,408,693 3,332,846 4,208,237 4,182,482
Preferred stock 1,179,495 1,176,952 1,329,495 1,366,036
Other equity
investments - - 100,000 100,000
Total 10,211,415 10,091,702 11,012,438 10,991,411
Total $13,766,494 $13,592,807 $13,719,087 $13,623,859
-15-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 -SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES (CONTINUED)
The market value at August 31, 2004 was $13,592,807 as compared to $13,623,859 at
November 30, 2003. The gross unrealized gains and losses were $61,151 and
($234,838) for August 31, 2004 and $89,761 and ($184,989) for November 30, 2003.
The cost and market values of the investments at August 31, 2004 were as follows:
COL. A COL. B COL. C COL. D COL.E
Amount at Which
Each Portfolio Of
Number of Market Equity Security
Units-Principal Value of Issues and Each
Amount of Each Issue Other Security
Name of Issuer and Maturity Interest Bonds and Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Notes Each Issue Sheet Date Balance Sheet
CORPORATE OBLIGATIONS:
GMAC Smartnotes 10/15/05 3.100% 200,000 $ 200,000 $ 199,652 $ 199,652
GMAC Smartnotes 10/15/05 3.150 400,000 400,000 400,180 400,180
GMAC Smartnotes 5/15/05 5.000 175,000 175,000 176,778 176,778
GMAC Smartnotes 6/15/05 3.550 200,000 200,000 200,464 200,464
GMAC Smartnotes 5/15/06 4.050 400,000 400,000 399,852 399,852
GMAC Smartnotes 10/15/06 3.550 250,000 250,000 249,248 249,248
GMAC Smartnotes 12/15/06 3.400 200,000 200,000 198,180 198,180
Household Finance Corp.
Internotes 10/15/06 2.750 100,000 100,000 99,391 99,391
Bear Sterns 2/15/07 2.650 100,000 100,000 98,711 98,711
-16-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES (CONTINUED)
COL. A COL. B COL. C COL. D COL. E
Amount at Which
Each Portfolio Of
Number of Market Equity Security
Units-Principal Value of Issues and Each
Amount of Each Issue Other Security
Name of Issuer and Maturity Interest Bonds and Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Notes Each Issue Sheet Date Balance Sheet
CORPORATE OBLIGATIONS (Continued):
Ford Motor Credit 5/22/06 4.750% 250,000 $ 250,000 $ 254,828 $ 254,828
Ford Motor Corp. 10/20/06 4.250 100,000 100,000 101,688 101,688
CIT Group Inc. 1/15/06 4.000 200,000 200,000 202,010 202,010
CIT Group Inc. 3/15/05 3.200 100,000 100,000 100,396 100,396
CIT Group Inc. 7/15/05 2.000 100,000 100,000 99,538 99,538
CIT Group Inc. 10/15/05 2.250 100,000 100,000 99,540 99,540
GE Capital Group
Internotes 2/15/06 2.450 250,000 250,000 249,020 249,020
GE Capital Group
Internotes 7/15/06 2.150 200,000 200,000 197,108 197,108
GE Capital Group
Internotes 10/15/06 2.500 400,000 400,000 395,908 395,908
GE Capital Group
Internotes 9/15/06 2.550 150,000 150,000 148,440 148,440
GE Capital Group
Internotes 9/15/06 2.350 300,000 300,000 296,592 296,592
GE Capital Group
Internotes 10/15/06 2.250 300,000 300,000 295,419 295,419
GE Capital Group
Internotes 2/15/07 2.500 200,000 200,000 197,466 197,466
GE Capital Group 3/15/07 2.350 250,000 250,000 245,110 245,110
Citibank Global
Markets Hldg Inc 3/15/07 2.350 150,000 150,000 147,030 147,030
American General
Fin. Corp. 8/15/05 2.050 200,000 200,000 199,436 199,436
American General
Fin. Corp. 9/15/06 2.500 100,000 100,000 98,934 98,934
John Hancock Life
Ins. Co. 7/15/06 2.250 200,000 200,000 197,724 197,724
John Hancock Life
Ins. Co. 10/15/06 2.450 100,000 100,000 98,403 98,403
John Hancock Life
Ins. Co. 10/15/06 2.300 200,000 200,000 196,882 196,882
John Hancock Life
Ins. Co. 3/15/07 2.350 150,000 150,000 147,851 147,851
General Dynamics Corp. 5/15/06 2.125 150,000 149,706 148,541 148,541
Bank One Corp.
Global Notes 6/30/08 2.625 125,000 124,363 120,540 120,540
Wells Fargo & Co. 8/25/08 3.120 100,000 99,158 97,656 97,656
6,398,227 6,358,516 6,358,516
-17-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 -SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES (CONTINUED)
COL. A COL. B COL. C COL. D COL. E
Amount at Which
Each Portfolio Of
Number of Market Equity Security
Units-Principal Value of Issues and Each
Amount of Each Issue Other Security
Name of Issuer and Maturity Interest Bonds and Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Notes Each Issue Sheet Date Balance Sheet
GOVERNMENT OBLIGATIONS:
US Treasury Note 7/31/05 1.500% 625,000 $ 624,096 $ 622,533 $ 622,533
US Treasury Note 6/30/05 1.125 200,000 199,524 198,758 198,758
US Treasury Note 5/15/06 2.000 100,000 99,895 99,578 99,578
US Treasury Note 5/15/06 2.000 100,000 99,616 99,578 99,578
US Treasury Note 5/31/05 1.250 375,000 374,550 373,361 373,361
Federal Home Loan Bank 8/21/06 2.590 200,000 200,000 199,626 199,626
Federal Home Loan Bank 7/24/08 2.125 100,000 100,000 100,000 100,000
Federal Home Loan Bank 7/28/06 2.189 200,000 199,000 198,376 198,376
FNMA 5/15/06 2.250 200,000 198,772 199,250 199,250
FHLB 6/19/06 2.260 250,000 249,380 248,673 248,673
FHLMC 11/15/17 4.375 200,000 200,000 200,062 200,062
FHLMC 11/15/09 3.000 250,000 250,000 249,418 249,418
FNMA 8/15/12 4.000 250,000 250,000 250,078 250,078
FNMA 12/10/17 3.000 150,000 150,000 150,329 150,329
FNMA 9/24/07 3.000 200,000 200,000 199,438 199,438
Tennessee Valley
Authority
Power Bonds 5/1/29 6.500 26,000 688,530 634,660 634,660
Tobacco Settlement Fin
Corp. N 6/1/15 5.000 200,000 198,500 178,780 178,780
NJ Turnpike Authority 1/1/30 1.050 325,000 325,000 325,000 325,000
Port Authority NY & NJ
Cons 88th SR BE 10/1/04 4.500 225,000 238,789 225,565 225,565
CLOSED END MUNICIPAL BONDS/MUTUAL FUNDS:
Muniyield New Jersey Insd Frd Inc. 6,500 96,905 96,460 96,460
Muniholdings New Jersey Insd FD Inc. 6,900 94,549 102,189 102,189
Nuveen New Jersey Invt Quality Municipal Fund 6,200 95,162 96,518 96,518
Nuveen New Jersey Prem Inc Municipal Fund 5,200 78,639 80,340 80,340
Van Kamp Amer Cap Inv Gr NJ 4,800 80,502 79,920 79,920
Blackrock New Jersey Municipal Inc. 6,000 87,989 85,620 85,620
Eaton Vance New Jersey Municipal Inc. 5,600 85,506 86,016 86,016
Nuveen New Jersey Dividend Advantage 5,700 84,855 84,417 84,417
5,549,759 5,464,543 5,464,543
-18-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 -SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES (CONTINUED)
COL. A COL. B COL. C COL. D COL. E
Amount at Which
Each Portfolio Of
Number of Market Equity Security
Units-Principal Value of Issues and Each
Amount of Each Issue Other Security
Name of Issuer and Maturity Interest Bonds and Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Notes Each Issue Sheet Date Balance Sheet
EQUITY:
Preferred Stock:
Public Income NTS
General Electric
Cap Corp. 11/15/32 6.100% 14,800 $ 379,495 $ 375,772 $ 375,772
Merrill Lynch Trust 9/30/08 7.280 6,000 150,000 161,400 161,400
Corporate Backed
Trust Certificates
For AIG
Sun America 5/17/07 6.700 6,000 150,000 157,200 157,200
Morgan Stanley Cap Tr 7/15/33 5.750 4,000 100,000 94,240 94,240
ABN AMRO Cap Fund 7/3/08 5.900 2,000 50,000 47,480 47,480
JP Morgan Chase Cap
IX 6/15/33 5.875 2,000 50,000 48,460 48,460
Wells Fargo Cap Tr
VIII 8/1/33 5.625 8,000 200,000 192,480 192,480
Lehman Cap Trust IV 10/31/52 6.375 4,000 100,000 99,920 99,920
1,179,495 1,176,952 1,176,952
-19-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES (CONTINUED)
COL. A COL. B COL. C COL. D COL. E
Amount at Which
Each Portfolio Of
Number of Market Equity Security
Units-Principal Value of Issues and Each
Amount of Each Issue Other Security
Name of Issuer and Maturity Interest Bonds and Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Notes Each Issue Sheet Date Balance Sheet
EQUITY (Continued):
Common Stock:
DTE Energy Co. 1,200 $ 51,649 $ 49,584 $ 49,584
Consolidated Edison Inc. 3,800 153,485 160,360 160,360
Progress Energy Inc. 1,000 48,000 43,890 43,890
253,134 253,834 253,834
Mutual Funds:
Dreyfus Premier Limited
Term High Income CL B 16,918.190 186,031 127,512 127,512
Other Equity Investments:
Aberdeen Asia Pacific
Income Fund 4 100,000 100,000 100,000
Enterprise Production Partners LP 5,000 99,848 111,450 111,450
199,848 211,450 211,450
$13,766,494 $13,592,807 $13,592,807
-20-
CCA INDUSTRIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
(UNAUDITED)
For the three-month period ended August 31, 2004, the Company
had revenues of $16,696,391 and net income of $1,457,230 after a
provision for taxes of $957,251. The Company increased its
advertising budget by $750,000 for the quarter over and above its
estimated merchandising and media expenses that it had contemplated
at the beginning of the year. Last year, for the August 31
quarter, the Company had $12,852,537 of revenue and net income of
$1,287,125. This represents a 30% and 13% improvement in revenues
and net income, respectively. Gross margins decreased slightly
from 68.4% to 67.3%. Selling, general and administrative (SG&A)
expenses increased to $4,739,038 from $4,195,547, as a result of an
increase in staff and sales commissions.
For the three month period ending August 2004, advertising,
cooperative and promotional allowance expenditures were $3.90
million. Last year, for the same three-month period ending August
31, 2003, they were $2.40 million. Advertising expenditures were
23.8% of sales compared to 18.9% last year. Since both co-op
advertising and promotions have a material effect on the Company's
operation, the Company attempts to anticipate its advertising and
promotional commitments as a percent of gross sales in order to
control its effect on its net income. In accordance with APB No.
28, Interim Financial Reporting, the Company expenses its
advertising and related costs proportionately over the interim
periods based on its total expected cost per its various
advertising programs. Consequently, a deferral of $1.5 million for
media expense and $0.4 million for co-op expenditures for the nine
month period is reflected in the balance sheet. The Company
deferred $0.7 million of media costs in the prior year for the
nine-month period. The deferral is the result of the Company's
final current year's $10.0 million media budget which was amended
from $9 million on August 2, 2004 for the entire current year.
These deferrals were predicated on substantially lower spending in
the third and fourth quarters. Co-op expenditures are budgeted at
$5.5 million for the year. Specifically, the Company spent $9.0
million for media advertising in the nine months and $4.6 million
for co-op advertising. The difference between the actual expense
and the budgeted expense is deferred or accrued over the subsequent
three month period, and by the end of the year will be fully
expensed.
For the nine month period ended August 31, 2004, the Company
had revenue of $48,123,126 and a net income of $5,091,575 after a
provision for income taxes of $3,327,895. In the prior year's
period, the Company had revenues of $42,978,569 and net income of
$4,444,846 after a provision for income taxes of $2,844,562. Gross
profit margins for the nine-month period ending August 31, 2004
decreased from 67.6% in the prior year to 66.2%.
For the nine month period ended August 2004, advertising,
cooperative and promotional allowance expenditures were $9,819,958
as compared to $7,760,818 for the nine-month period ending August
31, 2003. The Company budgeted a national advertising expenditure
for the current year at $10 million up from $8 million the prior
year and budgeted co-op and promotions from $5 million to $5.5
million allocated over the current fiscal year. The co-op and
promotion allowance increases were partially reversed by co-op
advertising credits previously accrued in the prior year not taken
by our customers because the proposed promotion did not consummate.
The reversed credits were allocated over the current fiscal year.
Current advertising expenditures were 20.6% of sales versus 18.2%
last year.
-21-
CCA INDUSTRIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
(UNAUDITED)
For the nine-month period ending August 31, 2004, research and
development expenses were $666,755 compared to $661,250 last year.
The Company's financial position as of August 31, 2004
consists of current assets of $24,820,793 and current liabilities
of $8,226,905 or a current ratio of 3:1. In addition,
shareholders' equity increased from $23,344,540 to $27,338,628
primarily due to net income earned during the period.
All of the Company's investments are classified as available
for sale. Investments with a maturity date greater than one year
from August 31, 2004 are presented as long-term investments.
Assuming these long-term investments can be sold and turned into
liquid assets at any time, it would result in a current ratio of
4.2:1.
The Company generated $2.5 million in cash from operations due
to the nine month net income of $5.09 million, a $1.4 million
increase in accounts payable, a $700,000 net increase in income taxes
due and a decrease in prepaid income taxes of $237,000, and $420,000
non-cash expenses included in net income. Cash decreased due to an
inventory increase of $0.8 million, an increase in the Company's
accounts receivable of $2.7 million, and an increase in deferred
advertising of $1.9 million. All increases in deferred advertising,
accounts receivable, inventory and accounts payable are "normal"
seasonal increases.
The $2.5 million cash generated by operations, however, was
partially used to pay dividends of $891,000, and for the
acquisition of equipment of $108,000. The Company paid after
netting purchases and sales of marketable securities $57,000,
leaving the Company with $1.46 million increase in cash.
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURE ABOUT MARKET RISK
The Company's financial statements record the Company's
investments under the "mark to market" method (i.e., at date-of-
statement market value). The investments are, categorically
listed, in "Common Stock", "Mutual Funds", "Other Equity",
"Preferred Stock", "Government Obligations" and "Corporate
Obligations". $465,284 of the Company's $13,592,807 portfolio of
investments (approximate, as at August 31, 2004) is invested in the
"Common Stock" and "Other Equity" categories, and approximately
$1,176,952 in that category are Preferred Stock holdings. Whereas
the Company does not take positions or engage in transactions in
risk-sensitive market instruments in any substantial degree, nor as
defined by SEC rules and instructions; therefore, the Company does
not believe that its investment-market risk is material.
-22-
ITEM 4. CONTROLS AND PROCEDURES
With the participation of our Chief Executive Officer and Chief
Financial Officer, management has carried out an evaluation of the
effectiveness of our disclosure controls and procedures (as defined
in Rule 13a-15(e) under the Securities Exchange Act of 1934).
Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and
procedures were effective as of August 31, 2004.
There were no changes in our internal control over financial
reporting (as defined in Rule 13a-15(f) under the Securities
Exchange Act of 1934) subsequent to the date the controls were
evaluated that materially affect, or are reasonably likely to
materially affect, our internal control over financial reporting.
-23-
CCA INDUSTRIES, INC.
PART II OTHER INFORMATION
Item 1. Legal Proceedings:
See Part I - Note 11 of the Financial Statements
regarding litigation.
Item 4. Submission of Matters to a Vote of Security Holders:
None.
Item 5. Other Information:
None.
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
(11) Computation of Earnings Per Share
(31.1) Certification of Chief Executive Officer pursuant to
Rule 13a-14(a)*
(31.2) Certification of Chief Financial Officer pursuant to
Rule 13a-14(a)*
(32.1) Certification of Chief Executive Officer pursuant to
18 U.S.C. 1350*
(32.2) Certification of Chief Financial Officer pursuant to
18 U.S.C. 1350*
* Filed herewith.
(b) Reports on Form 8-K.
Current report on Form 8-K furnished April 7, 2004 and
August 3, 2004 pursuant to Item 5 (Other Events).
-24-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date:
CCA INDUSTRIES, INC.
By:
David Edell, Chief Executive Officer
By:
Ira W. Berman, Chairman of the Board
-25-
Exhibit 11
CCA INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(UNAUDITED)
Three Months Ended Nine Months Ended
August 31, August 31,
2004 2003 2004 2003
Weighted average shares
outstanding - Basic 7,340,519 7,276,844 7,314,848 7,211,350
Net effect of dilutive
stock options--based
on the treasury stock
method using average
market price 279,021 397,390 278,372 382,246
Weighted average shares
outstanding - Diluted 7,619,540 7,674,234 7,593,220 7,593,596
Net income $1,457,230 $1,287,125 $5,091,575 $4,444,846
Per share amount
Basic $.20 $.18 $.70 $.61
Diluted $.19 $.17 $.67 $.59
Exhibit 31.1
CERTIFICATION
I, David Edell, Chief Executive Officer of the Registrant, certify
that:
1. I have reviewed this quarterly report on Form 10-Q of CCA
Industries, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present
in all material respects the financial condition, results of
operations and cash flows of the Registrant as of, and for,
the periods presented in this report.
4. The Registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-
15(e) and 15d-15(e)) for the Registrant and have:
(a) Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material
information relation to the Registrant, including its
consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in
which this report is being prepared;
(b) Evaluated the effectiveness of the Registrant's
disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation;
and
(c) Disclosed in this report any change in the Registrant's
internal control over financial reporting that occurred
during the Registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is
reasonably likely to affect, the Registrant's internal
control over financial reporting; and
5. The Registrant's other certifying officer and I have
disclosed, based on our most recent evaluation of internal
controls over financial reporting, to the Registrant's
auditors and the audit committee of the Registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in
the design or operation of internal control over
financial reporting which are reasonably likely to
adversely affect the Registrant's ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves
management or other employees who have a significant role
in the Registrant's internal control over financial
reporting.
Date:
/s/--------------------------------
David Edell
Chief Executive Officer
CERTIFICATION
I, John Bingman, Chief Financial Officer of the Registrant, certify
that:
1. I have reviewed this quarterly report on Form 10-Q of CCA
Industries, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present
in all material respects the financial condition, results of
operations and cash flows of the Registrant as of, and for,
the periods presented in this report.
4. The Registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-
15(e) and 15d-15(e)) for the Registrant and have:
(a) Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material
information relation to the Registrant, including its
consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in
which this report is being prepared;
(b) Evaluated the effectiveness of the Registrant's
disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation;
and
(c) Disclosed in this report any change in the Registrant's
internal control over financial reporting that occurred
during the Registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is
reasonably likely to affect, the Registrant's internal
control over financial reporting; and
5. The Registrant's other certifying officer and I have
disclosed, based on our most recent evaluation of internal
controls over financial reporting, to the Registrant's
auditors and the audit committee of the Registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in
the design or operation of internal control over
financial reporting which are reasonably likely to
adversely affect the Registrant's ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves
management or other employees who have a significant role
in the Registrant's internal control over financial
reporting.
Date: /s/--------------------------
John Bingman
Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of CCA Industries, Inc. (the
"Registrant") on Form 10-Q for the quarterly period ended August 31,
2004 as filed with the Securities and Exchange Commission on the date
hereof (the "Report"), I, David Edell, Chief Executive Officer of the
Registrant, certify, in accordance with 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that to the best of my knowledge:
(1) The Report, to which this certification is attached, fully
complies with the requirements of section 13(a) of the
Securities Exchange Action of 1934; and
(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and results of
operations of the Registrant.
Date:
/s/ --------------------------
David Edell
Chief Executive Officer
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of CCA Industries, Inc. (the
"Registrant") on Form 10-Q for the quarterly period ended August 31,
2004 as filed with the Securities and Exchange Commission on the date
hereof (the "Report"), I, John Bingman, Chief Financial Officer of the
Registrant, certify, in accordance with 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that to the best of my knowledge:
(1) The Report, to which this certification is attached, fully
complies with the requirements of section 13(a) of the
Securities Exchange Action of 1934; and
(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and results of
operations of the Registrant.
Date:
/s/ --------------------------
John Bingman
Chief Financial Officer