Form 10-K - CCOM Group Inc.

Table of ContentsPART I.Item 1. BusinessGeneralColonial Commercial Corp. (“Colonial”) is a New York corporation which was incorporated on October 28, 1964. Unless otherwiseindicated, the term “Company” refers to Colonial Commercial Corp. and its consolidated subsidiaries. The Company's operations areconducted through its wholly owned subsidiaries, Universal Supply Group, Inc. (“Universal”), The RAL Supply Group, Inc. (“RAL”),and American/Universal Supply, Inc. (“American”). We distribute heating, ventilating and air conditioning equipment (HVAC), partsand accessories, climate control systems, appliances, and plumbing fixtures and supplies, primarily, in New Jersey, New York andportions of eastern Pennsylvania.We supply the Amana air conditioning and heating equipment line in New Jersey (exclusive of Cape May and Cumberland counties)and lower portions of New York State. We are also the non−exclusive supplier of the Goodman line of heating and air conditioningequipment in substantially the same trading area. We distribute these products through eight locations in New Jersey, seven locationsin lower New York State and one location in Willow Grove, Pennsylvania. Of these locations, two are used for warehousing purposesonly. In addition, we distribute American Standard heating and air conditioning equipment, as well as other heating and airconditioning accessories, in Elmsford and Hicksville, New York. We utilize showrooms for the display and sale of kitchen andbathroom fixtures and accessories at our locations in Fishkill, Middletown, New Windsor and Suffern, New York.We have developed a specialty in the design and sale of energy conservation control systems and the fabrication of customized ULlisted control panels, and we also supply indoor air quality components and systems.Our in−house staff provides technical assistance and training to customers. In some cases, we also use vendors' representatives andoutside services. We do not install any equipment or systems.In September 2006 we began to distribute appliances, such as washers and dryers, to appliance dealers primarily in New York, NewJersey, and portions of Connecticut, Delaware and Pennsylvania.Our business is affected by significant outdoor temperature swings. Our sales typically increase during peak heating and coolingdemand periods. Demand related to the residential central air conditioning replacement market is highest in the second and thirdquarters, while demand for heating equipment is usually highest in the fourth quarter.In 2006, 2005 and 2004, approximately 85% of our sales were for replacement and/or renovation and the remaining 15% of sales werefor new construction projects. In the same years, respectively, sales consisted of approximately 40%, 40% and 42% HVACequipment; 39%, 38% and 38% parts and accessories; and 16%, 16% and 15% climate control systems.We own no patents and have no intellectual property rights or proprietary technology.We carry general liability, comprehensive property damage, workers compensation and product liability insurance in amounts that weconsider adequate for our business. We maintain $2,000,000 in the aggregate and $1,000,000 per occurrence general liabilitycoverage, plus a $15,000,000 umbrella policy.No material regulatory requirements apply specifically to our business.2Source: COLONIAL COMMERCIAL , 10−K, March 23, 2007