Colonial Commercial Corp. (“Colonial”) (OTC Markets Group OTCQB:
“CCOM,” “CCOMP”), today announced financial results for the first
quarter ended March 31, 2011.
Sales for the quarter were $15,061,973, down 5.3%, or $835,926,
from the prior-year quarter. The decrease in sales was
substantially related to a reduction in demand for heating,
ventilation and air conditioning units utilized in residential new
construction and a reduction of commercial hydronic and plumbing
bid and specification work.
Gross profit for the quarter was $4,178,467, down 3.3%, or
$143,859, from the prior-year quarter. Gross profit expressed as a
percentage of sales was 27.7% in 2011 compared to 27.2% for the
comparable period in 2010. The decline in gross profit was directly
related to the loss in sales. However, the increase in gross
margins expressed as a percentage of sales was caused by the
reduction in commercial bid and specification work and reduction of
heating, ventilating and air conditioning units sold for new
construction, both of which are sold at lower than normal margin
percentages.
Selling, general and administrative expenses were $5,296,442,
down 1.4%, or $73,965, from the prior-year quarter. The decrease in
selling, general and administrative expense is primarily related to
a $62,555 reduction in payroll and benefit costs, a $29,197
reduction in rent, a $21,087 reduction in depreciation and
amortization and a $38,210 reduction in office expense, offset by a
$38,236 increase in facility expense and a $27,794 increase in
professional fees.
The Company’s net loss for the quarter was $1,265,779, up 8.1%,
or $95,006, compared to the prior-year quarter. The increase in net
loss is primarily the result of the $143,859 decrease in gross
profit, partially offset by the $73,965 decrease in selling,
general and administrative expense.
William Pagano, Chief Executive Officer of the Company, said,
“We are pleased that in March 2011 we completed the restructure of
our balance sheet as the Company issued 4,500,000 shares of stock
for $2.25 million added capital. At the same time, we amended our
loan agreement with Wells Fargo by extending the term of the loan
an additional three years, lowering the interest rate by 1.5%, and
increasing our ability to borrow against our assets. The Company
should realize the benefit of this restructure in the near
future.
“The business climate for building related products in the
Northeast remains tepid and extremely competitive as a large number
of contractors, distributors and wholesalers struggle to maintain
their respective market shares. On the positive side, we see many
opportunities for increased sales of designed and engineered
commercial systems and new products such as geothermal, water
source heat pumps and variable refrigerant flow products. We
anticipate that we will be able to capitalize on these
opportunities as we prepare for the economic turnaround that we now
anticipate to occur in mid 2012.”
About Colonial Commercial Corp.
Colonial 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 19 locations in its geographic trading area. For
more information on Colonial’s operations, products and/or
services, please visit www.colonialcomm.com.
Safe Harbor Statement
The foregoing press release may contain statements concerning
Colonial Commercial Corp.’s financial performance, markets and
business operations that may be considered "forward-looking" under
applicable securities laws. Colonial 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 Colonial's periodic
reports and registration statements filed with the Securities and
Exchange Commission. Colonial 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.
COLONIAL COMMERCIAL CORP. AND SUBSIDIARIES Condensed Consolidated
Balance Sheets March 31, December 31, 2011
2010 (Unaudited) Assets Current assets: Cash $ 131,101 $ 75,390
Accounts receivable, net of allowance for doubtful accounts of
$639,141 in 2011 and $694,083 in 2010 8,539,614 9,632,829 Inventory
10,376,894 10,781,069 Prepaid expenses and other current assets
964,206 1,111,625 Total current assets
20,011,815 21,600,913 Property and equipment 1,100,139 1,126,810
Goodwill 1,416,929 1,416,929 Other assets - noncurrent
200,453 172,913 $ 22,729,336 $
24,317,565 Liabilities and Stockholders' Equity Current
liabilities: Trade payables $ 5,518,288 $ 6,513,506 Accrued
liabilities 1,289,900 1,674,403 Income taxes payable - 2,360
Borrowings under credit facility - revolving credit 9,807,075
10,770,235 Convertible notes payable-related party 200,000 - Notes
payable - current portion; includes related party notes of $782,009
in 2011 and $32,009 in 2010 1,868,534
1,094,275 Total current liabilities 18,683,797 20,054,779
Convertible notes payable, excluding current portion-related party
- 200,000
Notes payable, excluding current portion;
includes related party notes of $72,021 in 2011 and $830,024 in
2010
684,711 1,686,179 Total liabilities
19,368,508 21,940,958 Commitments and
contingencies Stockholders' equity:
Redeemable convertible preferred stock,
$.05 par value, 2,500,000 shares authorized, 293,057 shares issued
and outstanding in 2011 and 2010, liquidation preference of
$1,465,285 in 2011 and 2010
14,653 14,653
Common stock, $.05 par value, 20,000,000
shares authorized, 9,154,953 and 4,654,953 shares issued and
outstanding in 2011 and 2010, respectively
457,747 232,747 Additional paid-in capital 12,659,782 10,634,782
Accumulated deficit (9,771,354 ) (8,505,575 ) Total
stockholders' equity 3,360,828 2,376,607
$ 22,729,336 $ 24,317,565 COLONIAL
COMMERCIAL CORP. AND SUBSIDIARIES Condensed Consolidated Statements
of Operations (Unaudited) For The Three Months Ended
March 31, 2011 2010 Sales $ 15,061,973 $
15,897,899 Cost of sales 10,883,506 11,575,573 Gross
profit 4,178,467 4,322,326 Selling, general and
administrative expenses 5,296,442 5,370,407 Operating
loss (1,117,975 ) (1,048,081 ) Other income 63,968 68,265
Interest expense, net; includes related party interest of $15,830
in 2011 and $16,790 in 2010 (211,772 ) (190,957 ) Net loss $
(1,265,779 ) $ (1,170,773 ) Net loss per common share: Basic
and diluted $ (0.20 ) $ (0.25 ) Weighted average shares
outstanding: Basic and diluted 6,194,953 4,654,953
COLONIAL COMMERCIAL CORP. AND SUBSIDIARIES Condensed
Consolidated Statements of Cash Flows (Unaudited) For
Three Months Ended March 31, 2011 2010 Cash flows
from operating activities: Net loss $ (1,265,779 ) $
(1,170,773 ) Adjustments to reconcile net loss to net cash provided
by operating activities: Provision for doubtful accounts 71,100
77,081 Depreciation 94,493 114,747 Net loss on disposal of fixed
assets 739 - Amortization of intangibles - 833 Changes in operating
assets and liabilities Accounts receivable 1,022,115 717,215
Inventory 404,175 (398,705 ) Prepaid expenses and other current
assets 147,419 (120,306 ) Other assets - noncurrent (27,540 )
11,692 Trade payables (995,218 ) 1,776,273 Accrued liabilities
(384,503 ) 95,781 Income taxes payable (2,360 ) (4,374 ) Net cash
(used in) provided by operating activities (935,359 ) 1,099,464
Cash flows from investing activities: Additions to
property and equipment (29,786 ) - Proceeds from disposal of
property and equipment 3,000 - Net cash used in
investing activities (26,786 ) - Cash flows from
financing activities:
Repayments of notes payable; includes
related party repayments of $8,002 in 2011 and 2010
(268,984 ) (28,465 ) Issuance of common stock 2,250,000 -
Repayments under credit facility - revolving credit, net (963,160 )
(1,307,828 ) Net cash provided by (used in) financing activities
1,017,856 (1,336,293 ) Increase (decrease) in cash 55,711
(236,829 ) Cash - beginning of period 75,390 746,629
Cash - end of period $ 131,101 $ 509,800