Attached files
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| EX-99.02 - EXHIBIT 99.02 - CCOM Group, Inc. | ex99_02.htm |
| 8-K - CCOM GROUP, INC 8-K 3-29-2013 - CCOM Group, Inc. | form8k.htm |
EXHIBIT 99.01
CCOM Group, Inc. Reports 2012 Fourth Quarter and Full Year Financial Results
HAWTHORNE, New Jersey (March 29, 2013) – CCOM Group, Inc. (the “Company”) (OTCQB: “CCOM,” “CCOMP”) today announced its financial results for the fourth quarter and year ended December 31, 2012.
Results for the fourth quarter of 2012 compared to results for the fourth quarter of 2011:
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Sales increased 8.6% to $24,923,292 from $22,939,776
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Gross profit increased 5.8% to $6,132,685 from $5,796,027
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Selling, general and administrative expenses increased 4.2% to $5,236,816 from $5,026,787
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Operating income increased 16.5% to $895,859 from $769,240
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Net income increased 53.3% to $920,612 from $600,526
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Earnings per share on a fully diluted basis increased to $0.10 from $0.06 per share
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Results for the year ended December 31, 2012 compared to results for the year ended December 31, 2011:
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Sales increased 8.2% to $86,110,638 from $79,563,932
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Gross profit increased 2.9% to $21,603,483 from $20,990,944
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Selling, general and administrative expenses increased 2.3% to $20,684,458 from $20,228,933
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Operating income increased 20.6% to $919,025 from $762,011
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Net income increased 175.6% to $645,859 from $234,344
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Earnings per share on a fully diluted basis increased to $0.07 from $0.03 per share
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The Company recognized a $16,000 net tax benefit in the fourth quarter of 2012 and for the year ended December 31, 2012 primarily due to a partial release of the valuation allowance against the Company’s deferred tax asset.
Michael Goldman, Chief Executive Officer of the Company, said, “The Company experienced a significant improvement in the fourth quarter of 2012. The improvement resulted from several factors, including sales of new product offerings, increased sales from a stronger inventory position, improved market penetration and the effects of Hurricane Sandy. In 2012 the Company also leveraged more favorable terms from its lenders and expanded its use of vendor discount and rebate programs.
“As previously announced, our distribution agreement for Speed Queen washer-dryers accounted for more than 10% of our revenues in 2012 and will terminate in June of this year. Nevertheless, we believe that the Company is in a position to capitalize on improvements in the economy, additional sales from the after-effects of Hurricane Sandy, and the recent introduction of generators and generator accessories into our product line.”
About CCOM Group, Inc.
CCOM distributes heating, ventilating and air conditioning, (“HVAC”), equipment, parts and accessories, climate control systems, customized control panels, and plumbing and electrical supplies and equipment to professional contractors in the states of New York, New Jersey, Massachusetts, Connecticut and eastern Pennsylvania 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. The Company also distributes home appliances to dealer groups and appliance stores through its Goldman Universal division. The Company is headquartered in New Jersey, and, with its affiliates, operates out of 18 locations in its geographic trading area. For more information on CCOM’s operations, products and/or services, please visit www.ccomgrp.com.
Safe Harbor Statement
The foregoing press release may contain statements concerning CCOM’s financial performance, markets and business operations that may be considered "forward-looking" under applicable securities laws. CCOM cautions readers of this press release that actual results might differ materially from those projected in any forward-looking statements. Factors which might cause actual results to differ materially from any results that are projected in the forward-looking statements include the following: continued acceptance of the company's products in the marketplace, competitive factors, dependence upon third-party vendors, and other risks detailed in the company's periodic report filings with the Securities and Exchange Commission. These and certain other factors which might cause actual results to differ materially from those projected are detailed from time to time in CCOM's periodic reports and registration statements filed with the Securities and Exchange Commission. CCOM undertakes no obligation to update forward looking statements to reflect changed assumptions, the occurrence of unanticipated events, or changes in future operating results, financial condition or business over time.
For further information, please contact Michael Goldman, Chief Executive Officer, or William Salek, Chief Financial Officer, at (973) 427-8224.
(Financial Highlights Follow)
CCOM GROUP, INC. (FORMERLY COLONIAL COMMERCIAL CORP.) AND SUBSIDIARIES
Consolidated Balance Sheets
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December 31,
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December 31,
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2012
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2011
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As Restated*
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Assets
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Current assets:
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Cash
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$ | 297,128 | $ | 271,697 | ||||
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Accounts receivable, net of allowance for doubtful accounts of $429,186 and $652,449, respectively
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11,131,317 | 10,057,598 | ||||||
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Inventory
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12,029,400 | 12,035,597 | ||||||
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Prepaid expenses and other current assets
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1,372,390 | 1,413,531 | ||||||
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Total current assets
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24,830,235 | 23,778,423 | ||||||
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Property and equipment
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1,036,710 | 949,912 | ||||||
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Goodwill
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1,416,929 | 1,416,929 | ||||||
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Other assets - noncurrent
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270,265 | 428,532 | ||||||
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Deferred income tax asset - noncurrent
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100,000 | - | ||||||
| $ | 27,654,139 | $ | 26,573,796 | |||||
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Liabilities and Stockholders' Equity
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Current liabilities:
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Borrowings under credit facility - revolving credit
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$ | 12,297,180 | $ | 11,991,407 | ||||
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Notes payable, current portion; includes related party notes of $607,999 and $32,009, respectively
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745,500 | 384,630 | ||||||
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Trade payables
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5,242,044 | 5,681,928 | ||||||
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Accrued liabilities
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1,630,792 | 1,476,776 | ||||||
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Income taxes payable
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- | 586 | ||||||
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Total current liabilities
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19,915,516 | 19,535,327 | ||||||
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Convertible notes payable-related party
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200,000 | 200,000 | ||||||
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Notes payable, non-current portion; includes related party notes of $1,440,015 and $798,014, respectively
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1,947,813 | 1,977,518 | ||||||
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Deferred income tax liability - noncurrent
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496,000 | 412,000 | ||||||
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Total liabilities
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22,559,329 | 22,124,845 | ||||||
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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, 293,057 shares issued and outstanding, liquidation preference of $1,465,285
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14,653 | 14,653 | ||||||
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Common stock, $.05 par value, 20,000,000 shares authorized, 9,154,953 shares issued and outstanding
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457,747 | 457,747 | ||||||
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Additional paid-in capital
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12,659,782 | 12,659,782 | ||||||
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Accumulated deficit
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(8,037,372 | ) | (8,683,231 | ) | ||||
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Total stockholders' equity
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5,094,810 | 4,448,951 | ||||||
| $ | 27,654,139 | $ | 26,573,796 | |||||
*See note on Consolidated Statement of Stockholders’ Equity
CCOM GROUP, INC. (FORMERLY COLONIAL COMMERCIAL CORP.) AND SUBSIDIARIES
Consolidated Statements of Income
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For the Years Ended December 31,
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2012
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2011
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Sales
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$ | 86,110,638 | $ | 79,563,932 | ||||
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Cost of sales
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64,507,155 | 58,572,988 | ||||||
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Gross profit
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21,603,483 | 20,990,944 | ||||||
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Selling, general and administrative expenses, net
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20,684,458 | 20,228,933 | ||||||
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Operating income
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919,025 | 762,011 | ||||||
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Other income
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201,788 | 264,397 | ||||||
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Gain on early extinguishment of debt
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116,164 | - | ||||||
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Interest expense, net; includes related party interest of $81,276 and $63,729, respectively
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(607,118 | ) | (792,064 | ) | ||||
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Income before income tax benefit
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$ | 629,859 | $ | 234,344 | ||||
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Income tax benefit
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16,000 | - | ||||||
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Net income
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$ | 645,859 | $ | 234,344 | ||||
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Income per common share:
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Basic
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$ | 0.07 | $ | 0.03 | ||||
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Diluted
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$ | 0.07 | $ | 0.03 | ||||
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Weighted average shares outstanding:
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Basic
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9,154,953 | 8,425,090 | ||||||
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Diluted
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9,448,010 | 8,718,148 | ||||||
CCOM GROUP, INC. (FORMERLY COLONIAL COMMERCIAL CORP.) AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
For the Years Ended December 31, 2012 and 2011
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Number of shares
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Redeemable
Convertible P
referred
Stock
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Common
Stock
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Redeemable
Convertible
Preferred
Stock
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Common
Stock
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Additional
Paid-In
Capital
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Accumulated
Deficit
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Total
Stockholders'
Equity
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Restated*
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Restated*
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Balance at December 31, 2010
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293,057 | 4,654,953 | $ | 14,653 | $ | 232,747 | $ | 10,634,782 | $ | (8,917,575 | ) | $ | 1,964,607 | |||||||||||||||
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Issuance of Common Stock for cash
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- | 4,500,000 | - | 225,000 | 2,025,000 | - | 2,250,000 | |||||||||||||||||||||
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Net Income
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- | - | - | - | - | 234,344 | 234,344 | |||||||||||||||||||||
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Balance at December 31, 2011
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293,057 | 9,154,953 | $ | 14,653 | $ | 457,747 | $ | 12,659,782 | $ | (8,683,231 | ) | $ | 4,448,951 | |||||||||||||||
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Net Income
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- | - | - | - | - | 645,859 | 645,859 | |||||||||||||||||||||
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Balance at December 31, 2012
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293,057 | 9,154,953 | $ | 14,653 | $ | 457,747 | $ | 12,659,782 | $ | (8,037,372 | ) | $ | 5,094,810 | |||||||||||||||
*During the fourth quarter of 2012, the Company determined that the deferred tax liability balance and the accumulated deficit balance were understated by $412,000 at December 31, 2010. The Company is restating its accumulated deficit at December 31, 2010, to properly reflect a deferred tax liability of $412,000 arising from the cumulative amortization of goodwill for tax purposes which was incorrectly used to reduce the valuation allowance against the deferred tax assets which were not more likely than not expected to be realized. This retroactive adjustment results in increasing the accumulated deficit at December 31, 2010 and increasing total liabilities by $412,000. The impact of the annual amortization for tax purposes on the 2011 balance sheet, statement of income and cash flows was not material.
CCOM GROUP, INC. (FORMERLY COLONIAL COMMERCIAL CORP.) AND SUBSIDIARIES
Consolidated Statements of Cash Flows
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For The Years Ended December 31,
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2012
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2011
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Cash flows from operating activities:
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Net income
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$ | 645,859 | $ | 234,344 | ||||
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Adjustments to reconcile net income to net cash provided by operating activities:
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Deferred income tax benefit
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(16,000 | ) | - | |||||
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Provision for doubtful accounts
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414,412 | 318,325 | ||||||
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Depreciation and amortization
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359,235 | 369,004 | ||||||
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Net gain on sale of property and equipment
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(3,113 | ) | (629 | ) | ||||
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Changes in operating assets and liabilities
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Accounts receivable
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(1,488,131 | ) | (743,094 | ) | ||||
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Inventory
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6,197 | (1,254,528 | ) | |||||
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Prepaid expenses and other current assets
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41,141 | (301,906 | ) | |||||
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Other assets – noncurrent
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158,267 | (255,619 | ) | |||||
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Trade payables
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(439,884 | ) | (831,578 | ) | ||||
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Accrued liabilities
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154,016 | (197,627 | ) | |||||
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Income taxes payable
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(586 | ) | (1,774 | ) | ||||
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Net cash used in operating activities
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(168,587 | ) | (2,665,082 | ) | ||||
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Cash flows from investing activities:
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Additions to property and equipment
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(165,550 | ) | (67,068 | ) | ||||
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Proceeds from disposal of property and equipment
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4,600 | 8,383 | ||||||
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Net cash used in investing activities
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(160,950 | ) | (58,685 | ) | ||||
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Cash flows from financing activities:
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Repayments of notes payable; includes related party repayments of $1,232,009 and $482,009, respectively
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(1,650,805 | ) | (1,001,098 | ) | ||||
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Issuance of notes payable, related party
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1,700,000 | 450,000 | ||||||
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Proceeds from issuance of common stock
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- | 2,250,000 | ||||||
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Borrowings under credit facility - revolving credit, net
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305,773 | 1,221,172 | ||||||
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Net cash provided by financing activities
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354,968 | 2,920,074 | ||||||
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Increase in cash
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25,431 | 196,307 | ||||||
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Cash - beginning of year
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271,697 | 75,390 | ||||||
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Cash - end of year
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$ | 297,128 | $ | 271,697 | ||||