SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1998 COMMISSION FILE NO. 1-6663
COLONIAL COMMERCIAL CORP.
-------------------------
(Exact Name of Company as Specified in its Charter)
NEW YORK 11-2037182
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
3601 HEMPSTEAD TURNPIKE, LEVITTOWN NEW YORK 11756-1315
------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Company's Telephone Number, Including Area Code: 516-796-8400
------------
Indicate by check mark whether the Company (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 Company was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of the Company's Common Stock and
Convertible Preferred Stock as of September 30, 1998.
Common Stock, par value $.01 per share - 1,460,417 shares
Convertible Preferred Stock, par value $.01 per share - 1,602,462 shares
<PAGE>
COLONIAL COMMERCIAL CORP. AND SUBSIDIARIES
INDEX
PAGE NO.
--------
PART I. FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheets as of
September 30,1998 (unaudited) and
December 31, 1997 1
Consolidated Statements of Operations
Three Months ended September 30, 1998 and
1997 (unaudited) 2
Consolidated Statements of Operations
Nine Months ended September 30, 1998 and
1997 (unaudited) 3
Consolidated Statements of Cash Flows for
the Nine Months ended September 30, 1998 and
1997 (unaudited) 4
Notes to Consolidated Financial Statements
(unaudited) 5
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 1 - Legal Proceedings 10
Item 6 - Exhibits and Reports on Form 8-K 10
SIGNATURES 11
<PAGE>
PART 1.
ITEM 1. FINANCIAL STATEMENTS
- ------- --------------------
COLONIAL COMMERCIAL CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
September 30, 1998 and December 31, 1997
<TABLE>
<CAPTION>
ASSETS 1998 1997
------ ---- ----
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalent $ 3,565,967 1,240,986
Accounts receivable, net of allowance for doubtful
accounts of $406,979 in 1998 and $416,688 in 1997 7,378,931 7,904,353
Inventory 760,352 823,267
Notes receivable - current portion 158,035 278,035
Prepaid expenses and other assets 116,439 114,245
Investment in Monroc, Inc. -- 3,321,790
Land held for sale 174,226 174,226
Deferred taxes 234,000 306,000
----------- -----------
Total current assets 12,387,950 14,162,902
Notes receivable, excluding current portion 395,087 652,854
Property and equipment, net 418,029 344,701
----------- -----------
$13,201,066 15,160,457
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable 1,122,633 1,748,551
Accrued liabilities 1,088,091 1,075,218
Income taxes payable 121,413 112,606
Borrowings under line of credit 614,751 1,990,108
Notes payable - current portion -- 447,363
----------- -----------
Total current liabilities 2,946,888 5,373,846
Excess of acquired net assets over cost 752,844 837,543
----------- -----------
Total liabilities 3,699,732 6,211,389
----------- -----------
Stockholders' equity:
Convertible preferred stock, $.05 par value,
liquidation preference of $8,012,310 and $8,337,710
at September 30,1998 and December 31,1997,
respectively 2,468,860 shares authorized, 1,602,462
and 1,667,542 shares issued and outstanding, at
September 30, 1998 and December 31, 1997, respectively, 80,123 83,377
Common stock, $.05 par value, 20,000,000 shares
authorized, 1,479,154 and 1,429,735 shares issued at
September 30, 1998 and December 31, 1997,
respectively, 1,460,584 and 1,429,735 shares
outstanding at September 30, 1998 and
December 31, 1997, respectively 73,958 71,487
Additional paid-in capital 8,986,048 9,023,669
Accumulated other comprehensive income -- 1,889,990
1,889,990
Retained earnings (accumulated deficit) 408,804 (2,119,455)
Treasury stock, 18,570 common shares, at cost (47,599) --
----------- -----------
Total stockholders' equity 9,501,334 8,949,068
----------- -----------
Commitments and contingencies
$13,201,066 15,160,457
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
-1-
<PAGE>
COLONIAL COMMERCIAL CORP.
Consolidated Statements of Operations
Three Months ended September 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
Sales $ 6,467,564 4,681,882
Cost of sales 4,747,628 3,501,895
----------- -----------
Gross profit 1,719,936 1,179,987
----------- -----------
Selling, general and
administrative expenses, net 1,434,423 1,308,264
Write-off of deferred expenses for
abandoned acquisition -- 385,705
----------- -----------
Operating income (loss) 285,513 (513,982)
Gain on sale of Monroc, Inc. stock --
Interest income 59,884 11,293
Other income 99,832 168,411
Interest expense (44,236) (74,857)
----------- -----------
Income (loss) before income 400,993 (409,135)
taxes
Income taxes 57,000 10,000
----------- -----------
Net income (loss) $ 343,993 (419,135)
=========== ===========
Net earnings (loss) per common share:
Basic $ .24 (.29)
----------- -----------
Diluted $ .11 (.29)
----------- -----------
Weighted average shares outstanding:
Basic 1,456,544 1,423,976
Diluted 3,120,768 1,423,976
</TABLE>
See accompanying notes to consolidated financial statements.
-2-
<PAGE>
COLONIAL COMMERCIAL CORP.
Consolidated Statements of Operations
Nine Months ended September 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Sales $ 18,613,774 16,698,842
Cost of sales 13,731,857 12,608,120
------------ ------------
Gross profit 4,881,917 4,090,722
------------ ------------
Selling, general and
administrative expenses, net 4,291,917 4,096,172
Write-off of deferred expenses for
abandoned acquisition -- 385,705
------------ ------------
Operating (loss) income 590,000 (391,155)
------------ ------------
Gain on sale of Monroc, Inc. stock 2,101,853 238,033
Interest income 118,677 35,493
Other income 113,380 171,156
Interest expense (163,651) (227,418)
------------ ------------
Income (loss) before income 2,760,259 (173,891)
taxes
Income taxes 232,000 70,000
------------ ------------
Net income (loss) $ 2,528,259 (243,891)
============ ============
Net earnings (loss) per common share:
Basic $ 1.75 (.17)
------------ ------------
Diluted $ .80 (.17)
------------ ------------
Weighted average shares outstanding:
Basic 1,441,550 1,401,331
Diluted 3,140,712 1,401,331
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
<PAGE>
COLONIAL COMMERCIAL CORP.
Consolidated Statements of Cash Flows
Nine Months ended September 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Reconciliation of net income to net cash
used in operating activities:
Net income $ 2,528,259 (243,891)
Adjustments to reconcile net income to cash
used in operating activities:
Provision for allowance for doubtful accounts 190,249 202,500
Depreciation 73,119 51,274
Amortization of excess of acquired net assets
over cost (84,699) (84,699)
Deferred tax provision 72,000 --
Gain on sale of Monroc, Inc. stock (2,101,853) (238,033)
Gain on disposal of fixed assets -- (6,988)
Changes in assets and liabilities:
Accounts receivable 335,173 1,410,678
Inventory 62,915 620,220
Prepaid expenses and other assets (2,194) (3,828)
Accounts payable (625,918) (1,737,637)
Accrued liabilities 12,873 (123,119)
Income taxes payable 8,807 (13,381)
----------- -----------
Net cash provided by (used in)
operating activities 468,731 (166,904)
----------- -----------
Cash flows from investing activities:
Proceeds from sale of Monroc, Inc. stock 3,533,653 456,233
Payments received on notes receivable 377,767 90,000
Proceeds from disposal of fixed assets -- 19,457
Additions to property and equipment (146,447) (146,390)
----------- -----------
Net cash provided by investing activities 3,764,973 419,300
----------- -----------
Cash flows from financing activities:
Payments on notes payable (447,363) (469,082)
Net repayments under line of credit (1,375,357) (582,906)
Payments for purchase of treasury stock (86,003) --
----------- -----------
Net cash used in financing activities (1,908,723) (1,051,988)
----------- -----------
Increase (decrease) in cash and cash equivalents 2,324,981 (799,592)
Cash and cash equivalents - beginning of period 1,240,986 1,322,533
----------- -----------
Cash and cash equivalents - end of period $ 3,565,967 522,941
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
COLONIAL COMMERCIAL CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1998 and December 31, 1997
(Unaudited)
(1) BASIS OF PRESENTATION
---------------------
The consolidated financial statements of Colonial Commercial Corp. and
subsidiaries (the Company), included herein have been prepared by the
Company and are unaudited; however, such information reflects all
adjustments (consisting solely of normal recurring adjustments) which are,
in the opinion of management, necessary for a fair statement of the
financial position, results of operations, and cash flows for the interim
periods to which the report relates. The results of operations for the
period ended September 30, 1998 are not necessarily indicative of the
operating results which may be achieved for the full year.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. It is
suggested that these consolidated financial statements be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's l997 Annual Report filed on Form 10-KSB.
(2) CASH EQUIVALENT
---------------
Cash equivalent of $2,700,000 at September 30, 1998 consists of a
certificate of deposit with an initial term of less than three months. For
purposes of the statement of cash flows, the Company considers all highly
liquid investment instruments with an original maturity of three months or
less to be cash equivalents. There were no cash equivalents at December 31,
1997.
(3) SUPPLEMENTAL CASH FLOW INFORMATION
----------------------------------
The following is supplemental information relating to the consolidated
statements of cash flows:
NINE MONTHS ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1997
------------------ ------------------
Cash paid during the period for:
Interest $ 174,628 $ 230,760
Income taxes $ 154,386 $ 154,417
Non-Cash Transactions:
During the nine month period of 1998, the Company retired 65,080 shares of
convertible preferred stock, 15,662 shares it acquired during the nine month
period and 49,418 shares which were converted to a similar number of common
shares. During the nine month period of 1997, 47,987 shares of convertible
preferred stock, which were exchanged for a similar number of common shares,
were retired.
-5-
<PAGE>
(4) INVESTMENT IN MONROC, INC.
--------------------------
At December 31, 1997, the Company owned 328,071 shares of Monroc common
stock, which was classified as an available-for-sale security. The fair
value of the investment security was $3,321,790, which was comprised of a
cost basis of $1,431,800 and a gross unrealized holding gain of $1,889,990
at December 31, 1997, which was recorded as a separate component of
stockholders' equity.
In June 1998, the Company sold all of its shares of Monroc common stock for
proceeds of $3,533,653 and realized a gain of $2,101,853. In connection
with the sale of shares, the Company recognized deferred tax expense of
approximately $72,000. The deferred tax expense represents a reversal of a
previously recorded deferred tax asset, which was recorded in 1997 for the
anticipated use of the Company's net operating loss carryforward.
(5) COMPREHENSIVE INCOME
--------------------
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income." This
Statement requires that all items recognized under accounting standards
as components of comprehensive income be reported in an annual
financial statement that is displayed with the same prominence as other
annual financial statements. For example, other comprehensive income
may include foreign currency translation adjustments, minimum pension
liability adjustments, and unrealized gains and losses on marketable
securities classified as available-for-sale. The Company's only item of
other comprehensive income is the net change in unrealized gain on
available-for-sale securities. The accumulated other comprehensive
income of $1,889,990 at December 31, 1997 on the accompanying
consolidated balance sheets is the unrealized gain on the Company's
investment security. Annual financial statements for prior periods will
be reclassified, as required.
The Company's total comprehensive income was as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income (loss) $ 2,528,259 (243,891) 343,993 (419,135)
Other comprehensive income:
Unrealized holding gains
arising during period 211,863 1,695,837 -- 656,220
Less: reclassification
adjustment for gains
realized in net income (2,101,853) (238,038) -- --
----------- ----------- ----------- -----------
Total comprehensive income $ 638,269 1,213,908 343,993 237,085
=========== =========== =========== ===========
</TABLE>
(6) NET EARNINGS PER COMMON SHARE
-----------------------------
In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings per Share" (Statement 128). Statement 128 replaces the
calculation of primary and fully diluted earnings per share, with basic and
diluted earnings per share. Prior periods have been restated to conform to
the Statement 128 requirements. A reconciliation between the numerators and
denominators of the basic and diluted earnings per common share is as
follows:
-6-
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income (loss) (numerator) $2,528,259 (243,891) 343,993 (419,135)
Weighted average common shares
(denominator for basic
earnings per share) 1,441,550 1,401,331 1,456,544 1,423,976
Effect of dilutive securities:
Convertible preferred stock 1,641,762 -- 1,611,834 --
Employee stock options 57,400 -- 52,390 --
---------- ---------- ---------- ----------
Weighted average common and
potential common shares
outstanding (denominator for
diluted earnings per share) 3,140,712 1,401,331 3,120,768 1,423,976
========== ========== ========== ==========
Basic earnings (loss) per
share $ 1.75 (.17) .24 (.29)
========== ========== ========== ==========
Diluted earnings (loss) per
share $ .80 (.17) .11 (.29)
========== ========== ========== ==========
</TABLE>
(7) SUBSEQUENT EVENT
----------------
On October 31, 1998, the Company completed the sale of a real estate
parcel in Salt Lake County, Utah for $1.1 million in cash, net of its 50 percent
partner's ownership interest, resulting in $1.0 million of net cash proceeds.
The sale will result in a pre-tax gain of approximately $830,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- ------------------------------------------------
FINANCIAL CONDITION AND RESULTS
-------------------------------
Results of Operations - Three Months Ended
September 30, 1998 and 1997
The Company reported net income of $343,993 for the third quarter of
1998, which includes $417,517 of net income from Atlantic Hardware and Supply
Corporation ("Atlantic") as compared to a net loss of $419,135 for the third
quarter of l997, which included $12,454 of net income from Atlantic.
Sales increased $1,785,682 (38%) to $6,467,564 in the 1998 period due
to the timing of delivery on contracts and continued strong construction
activity in the Company's market area. Selling, general and administrative
expenses net, increased $126,159 principally due to variable costs which
increased with sales; however, as a percentage of sales decreased approximately
5.7 percentage points. The Company had no write-off of deferred acquisition
expenses during the third quarter of 1998, whereas $385,705 was written off
during the third quarter of the 1997 period. Interest expense decreased $30,621
principally due to lower borrowings resulting from the Company's improved
accounts receivable collections and utilization of
-7-
<PAGE>
internal cash. Other income includes approximately $98,000 of unclaimed payments
made on the Company's 6% notes in the third quarter of 1998 as compared to
approximately $150,000 in the third quarter of 1997. The Company has provided
for current state income taxes associated with the income from Atlantic.
Results of Operations - Nine Months Ended
September 30, 1998 and 1997
The Company reported net income of $2,528,259 for the nine months of 1998,
which principally includes $1,010,260 of net income from Atlantic Hardware and
Supply Corporation ("Atlantic") and a $2,101,853 gain on the sale of Monroc,
Inc. common stock, as compared to a net loss of $243,891 for the nine months of
1997, which included $352,500 of net income from Atlantic and a $238,033 gain on
the sale of Monroc, Inc. common stock.
Sales increased $1,914,932 (11%) to $18,613,774 in the 1998 period
compared to sales of $16,698,842 in the 1997 period. Atlantic's sales backlog
has increased $1,553,000 to $10,424,000 since December 31, 1997. The September
30, 1998 backlog has increased $919,000 from September 30, 1997. These increases
are partially attributable to the continued strong construction activity in the
Company's market areas.
Gross margins improved primarily as a result of changes in product
mix and a decrease in reserve requirements in comparison to the 1997 period.
Selling, general and administrative expense increased $194,745, however, as a
percentage of sales decreased 1.4 percentage points. The Company had no
write-off of deferred acquisition expenses during the 1998 period, whereas
$385,705 was written off during the 1997 period. Interest expense decreased
$63,767 principally due to lower borrowings on Atlantic's revolving line of
credit resulting from improved accounts receivable collections and utilization
of internal cash. Interest income increased principally as a result of
short-term investment of $2.7 million of proceeds from the sale of Monroc, Inc.
stock. Other income includes approximately $98,000 of unclaimed payments made on
the Company's 6% notes in the third quarter 1998 as compared to approximately
$150,000 in the third quarter of 1997. The Company has provided for current
state income taxes associated with the income from Atlantic, as well as deferred
tax expense resulting from the realized gain on the sale of the common stock of
Monroc.
The Company continues to seek the acquisition of or merger with
privately held companies which businesses generate a recurring stream of income.
Reported earnings in the near term will be affected by the timing and the size
of any new acquisitions and the operating results of Atlantic.
Liquidity and Capital Resources
As of September 30, l998, the Company had $3,565,967 in cash and cash
equivalent compared to $1,240,986 at December 31, 1997. Such improvement in cash
position is principally attributed to the proceeds from the sale of Monroc
common stock.
Cash flows provided by operations were $468,731 during the nine
months 1998 as compared to $166,904 used in operations during the nine months
1997 principally due to increased operating income and a smaller reduction in
accounts payable.
-8-
<PAGE>
Cash flows provided by investing activities increased $3,345,673 to
$3,764,973 in the 1998 period as compared to $419,300 in the 1997 period
principally due to the Company's sale of its remaining shares in Monroc, Inc.
common stock (328,071 shares) as compared to the sale of 50,000 shares in the
1997 period and the payment in full of a $298,750 note receivable from Monroc,
Inc.
Cash flows used in financing activities during the nine months of
1998 of $1,908,723 were due to payments made on notes of $447,363, repayments on
the line of credit of $1,375,357 and payments of $86,003 to acquire treasury
stock.
On October 31, 1998, the Company received $1.0 million of net cash
proceeds from the sale of a real estate parcel in Salt Lake County, Utah.
The Company believes that its cash is adequate for its present
operations and that additional credit is available should it be required. The
Company's resources consist primarily of cash, investment in Atlantic and a note
receivable.
Year 2000 Date Conversion
The year 2000 issue affects computer systems, equipment and other
systems that have time sensitive programs that may not properly recognize the
year 2000.
The Company's computer systems are currently being upgraded and, upon
completion in mid 1999, they will be year 2000 compliant. At this time,
management believes that the Company does not have any internal critical year
2000 issues that it cannot remedy.
Management is in the process of surveying third parties with whom it
has a material relationship primarily through written correspondence. Management
is relying upon the response of these third parties in its assessment of Year
2000 readiness. Although the Company does not have significant data
communications with its customers, suppliers, financial institutions and others,
management cannot be certain as to the Year 2000 readiness of these third
parties or the impact that any non-compliance on their part may have on the
Company's business, results of operations, financial condition or liquidity.
The Company expects to incur internal staff cost, as well as
consulting and other expenses, in preparing for the Year 2000. Because the
Company has replaced a significant portion of its computer hardware in recent
years and is currently updating its software, the costs to be incurred in
addressing the Year 2000 issue are not expected to have a material impact on the
Company's business, results of operations, financial condition or liquidity.
The above comments on the Year 2000 issue contain forward-looking
statements relating to the Company's plans, strategies, objectives,
expectations, intentions and resources that should be read in conjunction with
the following disclosure on forward-looking statements.
-9-
<PAGE>
Forward-Looking Statements
Management's discussion and analysis of the results of operations and
financial condition, and other sections of this 10-QSB, include "forward-looking
statements". Within the meaning of Section 27(A) of the Securities and Exchange
Act of 1933 and Section 21(E) of the Securities and Exchange Act of 1934 (the
"Exchange Act"), all statements other than statements of historical information
provided herein are forward-looking statements and may contain information about
financial results, economic condition, trends and known uncertainties. The
forward-looking statements contained herein are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
reflected in the forward-looking statements.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect management's analysis, judgment,
belief or expectation only as of the date hereof. The Company undertakes no
obligation to publicly revise these forward-looking statements to reflect events
or circumstances that arise after the date hereof. In addition to the disclosure
contained herein, readers should carefully review any disclosure of risks and
uncertainties contained in other documents the company files, or has filed from
time to time with the Securities and Exchange Commission, pursuant to the
Exchange Act.
Recent Accounting Pronouncements
The Financial Accounting Standards Board issued Statement No. 133,
"Accounting for Derivative Instruments and Hedging Activities" (Statement 133).
Statement 133 established accounting and reporting standards for derivative
instruments embedded in other contracts, and for hedging activities. Statement
133 is effective for all fiscal quarters of all fiscal years beginning after
June 15, 1999. Early application of all the provisions of this Statement is
encouraged but is permitted only as of the beginning of any fiscal quarter that
begins after issuance of this Statement. Management of the Company does not
believe that the implementation of Statement 133 will have a significant impact
on its financial position or results of operations.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - Exhibit 27. Financial Data Schedule September 30,1998
Exhibit 27.397 Restated Financial Data Schedule
September 30, 1997
(b) Reports on Form 8-K - During the three months ended September
30,l998, the Company did not file any reports on Form 8-K.
-10-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: November 12, 1998 COLONIAL COMMERCIAL CORP.
/S/ BERNARD KORN
----------------
Bernard Korn, Chairman
of the Board and President
/S/ JAMES W. STEWART
--------------------
James W. Stewart
Executive Vice President
and Treasurer
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-QSB
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000021828
<NAME> COLONIAL COMMERCIAL CORP.
<S> <C>
<PERIOD-TYPE> 9-MOS
<PERIOD-START> JAN-01-1998
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 3,565,967
<SECURITIES> 0
<RECEIVABLES> 7,785,910
<ALLOWANCES> 406,979
<INVENTORY> 760,352
<CURRENT-ASSETS> 12,387,950
<PP&E> 677,696
<DEPRECIATION> 259,667
<TOTAL-ASSETS> 13,201,066
<CURRENT-LIABILITIES> 2,946,888
<BONDS> 0
0
80,123
<COMMON> 73,958
<OTHER-SE> 9,347,253
<TOTAL-LIABILITY-AND-EQUITY> 13,201,066
<SALES> 18,613,774
<TOTAL-REVENUES> 18,613,774
<CGS> 13,731,857
<TOTAL-COSTS> 13,731,857
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 190,249
<INTEREST-EXPENSE> 163,651
<INCOME-PRETAX> 2,760,259
<INCOME-TAX> 232,000
<INCOME-CONTINUING> 2,528,259
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,528,259
<EPS-PRIMARY> 1.75
<EPS-DILUTED> .80
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEPTEMBER 30, 1997 FORM 10-QSB AS RESTATED IN ACCORDANCE WITH FASB 128, WHICH
WAS ADOPTED DECEMBER 31, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000021828
<NAME> COLONIAL COMMERCIAL CORP.
<S> <C>
<PERIOD-TYPE> 9-MOS
<PERIOD-START> JAN-01-1997
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 522,941
<SECURITIES> 0
<RECEIVABLES> 7,132,171
<ALLOWANCES> 440,125
<INVENTORY> 1,085,527
<CURRENT-ASSETS> 8,491,634
<PP&E> 376,913
<DEPRECIATION> 167,294
<TOTAL-ASSETS> 13,899,010
<CURRENT-LIABILITIES> 4,672,335
<BONDS> 0
0
83,598
<COMMON> 71,266
<OTHER-SE> 8,206,035
<TOTAL-LIABILITY-AND-EQUITY> 13,899,010
<SALES> 16,698,842
<TOTAL-REVENUES> 16,698,842
<CGS> 12,608,120
<TOTAL-COSTS> 12,608,120
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<EPS-PRIMARY> (.17)
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</TABLE>
