Sterling Consolidated Announces Third Quarter 2013 Results

NEPTUNE, N.J., Nov. 25, 2013 (GLOBE NEWSWIRE) -- Sterling Consolidated Corp. (OTCBB:STCC), a leading supplier of hydraulic and pneumatic seals to the automotive and industrial marketplace, today reported its results for the third quarter ended September 30, 2013.

Key Highlights:

  • Completed acquisition of Superior Seals and Service in High Point, NC;
  • Revenues increased to $1.6 million, up 12.1% year over year;
  • Operating income of $52,021, an increase of $41,037;
  • Secured $2.45 million senior bank debt to provide access to working capital for future acquisitions and related costs

Revenues for the third quarter of 2013 were $1.6 million, up slightly compared to $1.4 million for the same period in 2012. Gross profit for the third quarter of 2013 was $0.39 million, a 40.0% increase from $0.28 million for the same period in 2012.

The Company's operating income for the third quarter of 2013 was $52,021 compared to operating income of $10,984 in the third quarter of 2012, an increase of $41,037. Net income for the period was $4,723, or $0.0001 per diluted share, compared to net income of $1,046, or $0.00003 per diluted share, in the comparable period in 2012. Net income was affected this quarter by costs associated with Superior Seals acquisition, bank financing and general costs attributed to being public.

Darren DeRosa, Chief Executive Officer of Sterling Consolidated, commented, "The third quarter was very successful as we increased revenues, controlled costs and secured financing for our future growth. After becoming a public company our goal was to consolidate the highly fragmented O-ring distributor market. We began to execute on this objective with the acquisition of Superior Seals and Service in the third quarter, which was completed earlier than expected. Our acquisition committee has ramped its efforts to expand our addressable targets, and there are a number of regionally strategic and well run companies along the East Coast that we are in advanced discussions with. We expect to close additional acquisitions over the coming quarters that will immediately add to our top and bottom line."

To be added to the Sterling Consolidated investor email list, please email pcarlson@kcsa.com with STCC in the subject line.

About Sterling Consolidated Corp.

Sterling Consolidated Corp., through its wholly-owned subsidiary, Sterling Seal and Supply, has been a leading supplier of hydraulic and pneumatic seals to the automotive and industrial marketplace for more than 40 years. Through a combination of leveraging its logistical expertise and sophisticated, experienced management, the company intends to be an active and strategic consolidator of small- and mid-sized businesses within the highly-fragmented, multi-billion dollar seal industry. Currently serving more than 3,000 customers, Sterling offers acquisition targets a unique growth opportunity and competitive advantage through logistical expertise, strong regional branding and industry-specific distribution centers.

Forward-looking Statements

This release contains statements that constitute forward-looking statements. These statements appear in a number of places in this release and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: (i) the Company's financing plans; (ii) trends affecting the Company's financial condition or results of operations; (iii) the Company's growth strategy and operating strategy; and (iv) the declaration and payment of dividends. The words "may," "would," "will," "expect," "estimate," "anticipate," "believe," "intend," and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company's ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors.

STERLING CONSOLIDATED CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2013 2012 2013 2012
Revenues
O-rings and rubber product sales $ 1,546,716 $ 1,380,002 $ 4,623,352 $ 4,503,506
Freight services 40,676 31,749 104,929 88,850
Rental services 15,984 18,427 39,054 50,573
Total revenues $ 1,603,376 $ 1,430,178 $ 4,767,335 $ 4,642,929
Cost of sales
Cost of goods 1,090,241 1,081,137 3,129,584 3,205,182
Cost of services 120,209 67,390 257,068 201,819
Total cost of sales 1,210,450 1,148,527 3,386,652 3,407,001
Gross profit 392,926 281,651 1,380,683 1,235,928
Operating expenses
Sales and marketing 10,333 14,788 35,310 35,519
General and administrative 330,572 255,879 1,253,010 932,968
Total operating expenses 340,905 270,667 1,288,320 968,487
Operating income 52,021 10,984 92,363 267,441
Other income and expense
Other income 3,269 27,572 10,879 47,799
Other expense -- -- -- --
Interest expense (29,377) (36,788) (91,611) (92,059)
Total other income and (expense) (26,108) (9,216) (80,732) (44,260)
Income before provision for income taxes 25,913 1,768 11,631 223,181
Provision for income taxes 21,190 722 3,437 91,169
Net income 4,723 1,046 8,194 132,012
Other comprehensive income/(loss)
Unrealized gain/(loss) on interest rate swap contract 2,908 -- (10,076) (4,699)
Comprehensive income/(loss) $ 7,631 $ 1,046 $ (1,882) $ 127,313
Net income/(Loss) per share of common stock:
Basic and diluted $ 0.00 $ 0.00 $ 0.00 $ 0.00
Weighted average number of shares outstanding
Basic and diluted 37,231,649 36,882,590 37,142,721 36,589,801
STERLING CONSOLIDATED CORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2013 2012
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 77,226 $ 115,489
Account receivable, net of allowance 1,033,662 871,132
Inventory, net of reserve 2,372,061 2,307,413
Notes receivable 43,176 40,601
Investment 100 75
Other current assets 1,100 --
Total current assets 3,527,325 3,334,710
Property and equipment, net 2,601,999 2,684,299
Intangible asset, net 970 --
Deferred tax asset 7,776 7,776
Total assets $ 6,138,070 $ 6,026,785
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 1,045,378 $ 1,139,681
Notes payable (current portion) 132,228 130,905
Notes payable related party (current portion) 50,083 62,151
Bank line of credit 894,591 839,591
Interest rate swap contract 11,800 1,724
Other liabilities 208,854 76,971
Total current liabilities 2,342,934 2,251,023
Other liabilities
Notes payable 808,386 900,761
Notes payable (related party) 1,654,145 1,614,952
Total other liabilities 2,462,531 2,515,713
Total liabilities 4,805,465 4,766,736
Stockholders' equity
Preferred stock, $0.001 par value; 10,000,000 shares authorized, no shares issued -- --
Common stock, $0.001 par value; 200,000,000 shares authorized, 37,399,040 and 37,074,040 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively. 37,399 37,074
Accumulated other comprehensive loss (11,800) (1,724)
Additional paid-in capital 1,249,192 1,175,079
Retained earnings 57,814 49,620
Total stockholders' equity 1,332,605 1,260,049
Total liabilities and stockholders' equity $ 6,138,070 $ 6,026,785

CONTACT: Investor Contact: KCSA Strategic Communications Phil Carlson / Josh Dver 212-896-1233 / 1239 pcarlson@kcsa.com / jdver@kcsa.comSource:Sterling Consolidated Corporation