CCA Industries Reports Net Loss in Q3

CCA Industries, Inc. reported a net loss of $114,047 for the three months ended August 31, 2022 as compared to a net loss of $82,109 for prior-year quarter. 

 

Net income was $139,604 for the nine months ended August 31, 2022 as compared to net income of $273,445 for the nine months ended August 31, 2021. The net income for the nine months ended August 31, 2021, however, included a $316,400 gain on extinguishment of debt as a result of the forgiveness of the loan granted under the Paycheck Protection Program by the US Small Business Administration. This was a non-cash transaction as the funds were received in fiscal 2020. The EBITDA for the first nine months of fiscal 2022 was $252,321 as compared to $106,664 for the first nine months of fiscal 2021 after adjusting for the Paycheck Protection Loan forgiven. 

 

“We have had some extraordinary challenges in the third quarter of fiscal 2022. As we previously disclosed, we were notified in April 2022 that the United States FDA has banned the use of hydroquinone in Porcelana,” said CEO Christopher Dominello. “We immediately stopped shipping the Porcelana products. Our Porcelana products were re-formulated, but had an expense to dispose of inventory related to the original product. In addition, Porcelana sales were interrupted as we were not able to have the re-formulated product available until the last week of August 2022. We were notified by a major customer in July 2022 that they were reducing significantly the number of stores carrying our Plus White products. However, our online sales increased 58% for the third quarter of fiscal 2022 compared to the same period in 2021. Sales of the Porcelana re-formulated product have resumed in the fourth quarter of fiscal 2022. We anticipate it will take a couple of months for sales to ramp back up to their previous level.”