FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended May 31, 2004
Commission File Number 2-85538
CCA INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 04-2795439
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
200 Murray Hill Parkway
East Rutherford, NJ 07073
(Address of principal executive offices) (Zip Code)
(201) 330-1400
Registrant's telephone number, including area code
Indicate by check mark whether the Registrant: (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
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes No X
Common Stock, $.01 Par Value - 6,356,261 shares of as May 31, 2004
Class A Common Stock, $.01 Par Value - 958,230 shares as of
May 31, 2004
CCA INDUSTRIES, INC. AND SUBSIDIARIES
INDEX
Page
Number
PART I FINANCIAL INFORMATION:
Consolidated Balance Sheets as of
May 31, 2004 and November 30, 2003 1-2
Consolidated Statements of Operations
for the three months and six months ended
May 31, 2004 and 2003 3
Consolidated Statements of Comprehensive Income
for the three months and six months ended
May 31, 2004 and 2003 4
Consolidated Statements of Cash Flows for
the six months ended May 31, 2004
and 2003 5
Notes to Consolidated Financial Statements 6-20
Item 2. Management Discussion and Analysis of
Results of Operations and Financial
Condition 21-22
Item 3. Quantitative and Qualitative Disclosures about
Market Risk 23
Item 4. Controls and Procedures 23
PART II OTHER INFORMATION 24
Item 1. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security
Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES 25
CCA INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
A S S E T S
May 31, November 30,
2004 2003
(Unaudited)
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 1,204,257 $ 1,206,787
Short-term investments and marketable
securities 2,255,490 2,632,448
Accounts receivable, net of allowances of
$885,828 and $895,723, respectively 9,629,924 6,604,982
Inventories 5,902,086 5,312,699
Prepaid expenses and sundry receivables 574,600 590,850
Deferred income taxes 835,140 963,566
Prepaid income taxes and refunds due - 236,620
Deferred advertising 5,292,716 -
Total Current Assets 25,694,213 17,547,952
Property and Equipment, net of accumulated
depreciation and amortization 661,310 728,522
Intangible Assets, net of accumulated
amortization 510,738 532,193
Other Assets
Marketable securities 11,336,566 10,991,411
Other 37,888 39,138
Total Other Assets 11,374,454 11,030,549
Total Assets $38,240,715 $29,839,216
</TABLE>
See Notes Consolidated to Financial Statements.
-1-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
May 31, November 30,
2004 2003
(Unaudited)
<S> <C> <C>
Current Liabilities
Accounts payable and accrued liabilities $10,430,552 $ 5,603,150
Income taxes payable 601,696 -
Dividends payable 1,024,028 379,117
Total Current Liabilities 12,056,276 5,982,267
Subordinated Debentures 497,656 497,656
Deferred Income Taxes 13,804 14,753
Shareholders' Equity
Preferred stock, $1.00 par; authorized
20,000,000 shares; none issued
Common stock, $.01 par; authorized
15,000,000 shares; 6,441,264 and
6,592,669 shares issued, respectively 64,413 65,926
Class A common stock, $.01 par; authorized
5,000,000 shares; 958,230 shares issued
and outstanding 9,582 9,582
Additional paid-in capital 3,831,048 3,831,425
Retained earnings 22,294,713 19,891,541
Unrealized gains (losses) on marketable
securities ( 377,106) ( 95,228)
25,822,650 23,703,246
Less: Treasury Stock (85,003 shares at
May 31, 2004 and 274,055 shares
at November 30, 2003, respectively) 149,671 358,706
Total Shareholders' Equity 25,672,979 23,344,540
Total Liabilities and Shareholders' Equity $38,240,715 $29,839,216
</TABLE>
See Notes to Consolidated Financial Statements.
-2-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
hree Months Ended Six Months Ended
May 31, May 31,
2004 2003 2004 2003
<S> <C> <C> <C> <C>
Revenues
Sales of Health and
Beauty Aid
Products - Net $18,143,645 $17,439,253 $31,073,110 $29,802,038
Other income 195,602 171,597 353,625 323,994
18,339,247 17,610,850 31,426,735 30,126,032
Costs and Expenses
Costs of sales 5,852,863 5,316,313 10,702,110 9,763,140
Selling, general and
administrative
expenses 4,495,581 4,927,457 8,299,734 9,037,262
Advertising, cooperative
and promotions 3,063,590 2,633,688 5,887,896 5,356,258
Research and development 206,626 202,077 440,472 431,773
Provision for doubtful
accounts 65,245 195,304 74,705 232,893
Interest expense 8,906 7,435 16,829 15,798
13,692,811 13,282,274 25,421,746 24,837,124
Income before
Income Taxes 4,646,436 4,328,576 6,004,989 5,288,908
Provision for Income
Taxes 1,848,233 1,744,481 2,370,644 2,131,187
Net Income $ 2,798,203 $ 2,584,095 $ 3,634,345 $ 3,157,721
Earnings per Share
Basic $.38 $.36 $.50 $.44
Diluted $.36 $.34 $.47 $.41
Cash Dividends Declared
per Share $.00 $.00 $.14 $.12
</TABLE>
See Notes to Consolidated Financial Statements.
-3-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<CAPTION>
(UNAUDITED)
Three Months Ended Six Months Ended
May 31, May 31,
2004 2003 2004 2003
<S> <C> <C> <C> <C>
Net Income $2,798,203 $2,584,095 $3,634,345 $3,157,721
Other Comprehensive Income
Unrealized holding gains
(loss) on investments ( 440,603) 17,249 ( 281,878) 140,888
Provision (Benefit) for
Taxes ( 175,260) 6,971 ( 111,280) 56,758
Other Comprehensive
Income (Loss) - Net ( 265,343) 10,278 ( 170,598) 84,130
Comprehensive Income $2,532,860 $2,594,373 $3,463,747 $3,241,851
Earnings Per Share:
Basic $.35 $.36 $.47 $.45
Diluted $.33 $.34 $.45 $.42
</TABLE>
See Notes to Consolidated Financial Statements.
-4-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
(UNAUDITED)
Six Months Ended
May 31,
2004 2003
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $3,634,345 $3,157,721
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 165,406 186,991
Loss (gain) on sale of marketable
securities and repurchase of debentures 12,285 ( 22,758)
Decrease (increase) in deferred income
taxes 127,477 ( 42,274)
(Increase) in accounts receivable ( 3,024,942) ( 2,745,195)
(Increase) in inventory ( 589,387) ( 2,270,182)
Decrease (increase) in prepaid expenses
and miscellaneous receivables 16,250 ( 238,971)
(Increase) in deferred advertising ( 5,292,716) ( 2,573,105)
Decrease (increase) in other assets 1,250 ( 375)
Increase in accounts payable
and accrued liabilities 4,827,402 4,300,548
Decrease in prepaid income taxes 236,620 -
Increase in taxes payable 601,696 699,944
Net Cash Provided by Operating Activities 715,686 452,344
Cash Flows from Investing Activities:
Acquisition of property, plant and equipment ( 75,985) ( 247,732)
Acquisition of intangible assets ( 754) ( 1,182)
Purchase of marketable securities ( 2,502,801) ( 3,623,972)
Proceeds from sale and maturity of
investments 2,240,441 4,556,792
Net Cash (Used in) Provided by
Investing Activities ( 339,099) 683,906
Cash Flows from Financing Activities:
Purchase of treasury stock - ( 5,771)
Dividends paid ( 379,117) ( 370,888)
Net Cash (Used in) Financing Activities ( 379,117) ( 376,659)
Net (Decrease) Increase in Cash ( 2,530) 759,591
Cash and Cash Equivalents at Beginning
of Period 1,206,787 1,585,647
Cash and Cash Equivalents at End
of Period $1,204,257 $2,345,238
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for:
Interest $ 16,829 $ 15,928
Income taxes 1,374,450 1,460,687
Supplemental Disclosures of Non-Cash
Information:
Dividends declared and accrued $1,028,028 $ -
</TABLE>
See Notes to Consolidated Financial Statements.
-5-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial state-
ments have been prepared in accordance with generally accepted ac-
counting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accord
ingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the six
month period ended May 31, 2004 are not necessarily indicative of the
results that may be expected for the year ended November 30, 2004.
For further information, refer to the consolidated financial state
ments and footnotes thereto included in the Company's annual report
on Form 10-K for the year ended November 30, 2003.
NOTE 2 - ORGANIZATION AND DESCRIPTION OF BUSINESS
CCA Industries, Inc. ("CCA") was incorporated in the State of Dela
ware on March 25, 1983.
CCA manufactures and distributes health and beauty aid products.
CCA has several wholly-owned subsidiaries, CCA Cosmetics, Inc., CCA
Labs, Inc., Berdell, Inc., Nutra Care Corporation, CCA Online Indus
tries, Inc., and CCA Industries Canada (2003) Inc., all of which are
currently inactive.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation:
The consolidated financial statements include the accounts of CCA and
its wholly-owned subsidiaries (collectively the "Company").
-6-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates:
The consolidated financial statements include the use of estimates,
which management believes are reasonable. The process of preparing
financial statements in conformity with generally accepted accounting
principles requires the use of estimates and assumptions regarding
certain types of assets, liabilities, revenues, and expenses. Such
estimates primarily relate to unsettled transactions and events as of
the date of the financial statements. Accordingly, upon settlement,
actual results may differ from estimated amounts.
Short-Term Investments and Marketable Securities:
Short-term investments and marketable securities consist of corporate
and government bonds and equity securities. The Company has classi
fied its investments as Available-for-Sale securities. Accordingly,
such investments are reported at fair market value, with the resul
tant unrealized gains and losses reported as a separate component of
shareholders' equity.
Statements of Cash Flows Disclosure:
For purposes of the statement of cash flows, the Company considers
all highly liquid instruments purchased with an original maturity of
less than three months to be cash equivalents.
Inventories:
Inventories are stated at the lower of cost (first-in, first-out) or
market.
Product returns are recorded in inventory when they are received at
the lower of their original cost or market, as appropriate. Obsolete
inventory is written off and its value is removed from inventory at
the time its obsolescence is determined.
-7-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property and Equipment and Depreciation and Amortization
Property and equipment are stated at cost. The Company charges to
expense repairs and maintenance items, while major improvements and
betterments are capitalized. When the Company sells or otherwise
disposes of property and equipment items, the cost and related
accumulated depreciation are removed from the respective accounts and
any gain or loss is included in earnings.
Depreciation and amortization are provided on the straight-line
method over the following estimated useful lives or lease terms of
the assets:
Machinery and equipment 5-7 Years
Furniture and fixtures 3-10 Years
Tools, dies and masters 3 Years
Transportation equipment 5 Years
Leasehold improvements Remaining life of the lease
(ranging from 1-9 years)
Intangible Assets:
Intangible assets are stated at cost. Patents and trademarks are
amortized on the straight-line method over a period of 15-17 years.
Financial Instruments:
The carrying value of assets and liabilities considered financial
instruments approximate their respective fair value.
Income Taxes:
Income tax expense includes federal and state taxes currently payable
and deferred taxes arising from temporary differences between income
for financial reporting and income tax purposes.
Tax Credits:
Tax credits, when present, are accounted for using the flow-through
method as a reduction of income taxes in the years utilized.
-8-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Earnings Per Common Share:
Basic earnings per share is calculated using the average number of
shares of common stock outstanding during the year. Diluted earnings
per share is computed on the basis of the weighted average number of
common shares outstanding plus the effect of outstanding stock
options using the "treasury stock method" and convertible debentures
using the "if-converted" method. Common stock equivalents consist of
stock options.
Revenue Recognition:
The Company recognizes sales upon shipment of merchandise. Net sales
are comprised of gross sales less expected returns, trade discounts,
customer allowances and various sales incentives. Although no legal
right of return exists between the customer and the Company, it is an
industry-wide practice to accept returns from customers. The Com
pany, therefore, records a reserve for returns equal to its gross
profit on its historical percentage of returns on its last five
months sales.
Accounts Receivable:
Accounts receivable consist of trade receivables recorded at original
invoice amount, less an estimated allowance for uncollectible ac
counts. Trade credit is generally extended on a short-term basis;
thus trade receivables do not bear interest, although a finance
charge may be applied to receivables that are past due. Trade
receivables are periodically evaluated for collectibility based on
past credit history with customers and their current financial
condition. Changes in the estimated collectibility of trade receiv
ables are recorded in the results of operations for the period in
which the estimate is revised. Trade receivables that are deemed
uncollectible are offset against the allowance for uncollectible
accounts. The Company generally does not require collateral for
trade receivables.
Accounts receivable with credit balances have been included as a
current liability in "Accounts payable and accrued liabilities" in
the accompanying balance sheet.
Accounts receivable are presented net of an allowance for doubtful
accounts of $332,069 and $549,851 as of May 31, 2004 and November 30,
2003, respectively.
Shipping and Handling Costs:
The Company presents shipping and handling costs as part of selling,
general and administrative expense and not as part of cost of sales.
Freight costs were $1,291,784 and $1,672,134 for the six months ended
May 31, 2004 and 2003, respectively.
Comprehensive Income:
The Company adopted SFAS #130, Comprehensive Income, which considers
the Company's financial performance in that it includes all changes
in equity during the period from transactions and events from non-
owner sources.
Reclassifications
Certain prior year amounts have been reclassified to conform to the
2004 presentation.
-9-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 - INVENTORIES
The components of inventory consist of the following:
May 31, November 30,
2004 2003
Raw materials $3,543,440 $3,746,522
Finished goods 2,358,646 1,566,177
$5,902,086 $5,312,699
At May 31, 2004 and November 30, 2003, the Company had a reserve for
obsolescence of $979,393 and $1,153,612, respectively.
NOTE 5 - PROPERTY AND EQUIPMENT
The components of property and equipment consisted of the following:
May 31, November 30,
2004 2003
Machinery and equipment $ 105,478 $ 105,478
Furniture and equipment 708,184 676,494
Transportation equipment 10,918 10,918
Tools, dies, and masters 386,158 347,560
Leasehold improvements 283,063 277,366
1,493,801 1,417,816
Less: Accumulated depreciation
and amortization 832,491 689,294
Property and Equipment - Net $ 661,310 $ 728,522
Depreciation expense for the six months ended May 31, 2004 and 2003
amounted to $143,197 and $162,990, respectively.
NOTE 6 - INTANGIBLE ASSETS
Intangible assets consist of the following:
May 31, November 30,
2004 2003
Patents and trademarks $760,148 $759,394
Less: Accumulated amortization 249,410 227,201
Intangible Assets - Net $510,738 $532,193
Amortization expense for the six months ended May 31, 2004 and 2003
amounted to $22,209 and $24,001, respectively. Estimated amortiza
tion expense for each quarter of the ensuing five years through May
31, 2009 is $12,000.
-10-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 - DEFERRED ADVERTISING
In accordance with APB 28, Interim Financial Reporting, the Company
expenses its advertising and related costs proportionately over the
interim periods based on its total expected costs per its various
advertising programs. Consequently a deferral of $5,292,716 is
accordingly reflected in the balance sheet for the interim period.
This deferral is the result of the Company's $9 million media budget
and $5.5 million co-op budget for the year which contemplates lower
spending in the 4th quarter than in the other three quarters.
The table below sets forth the calculation:
May May
2004 2003
(In Millions) (In Millions)
Media advertising budget for the fiscal year $9.00 $8.00
Pro-rata portion for six months $4.50 $4.00
Media advertising spent 8.72 5.52
Accrual (deferral) ($4.22) ($1.52)
Anticipated Co-op advertising commitments $5.50 $5.00
Pro-rata portion for six months $2.75 $2.50
Co-op advertising spent 3.82 3.55
Accrual (deferral) ($6.07) ($1.05)
NOTE 8 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
The following items which exceeded 5% of total current liabilities
are included in accounts payable and accrued liabilities as of:
May 31, November 30,
2004 2003
(In Thousands) (In Thousands)
a) Media advertising $3,575 $ *
b) Coop advertising 1,475 607
c) Accrued returns 1,087 787
d) Accrued bonuses * 499
$6,137 $1,893
* under 5%
All other liabilities were for trade payables or individually did not
exceed 5% of total current liabilities.
-11-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 - OTHER INCOME
Other income consists of the following at May 31:
2004 2003
Interest and dividend income $261,315 $241,556
Royalty income 60,380 58,699
Miscellaneous 31,930 23,739
$353,625 $323,994
NOTE 10 - NOTES PAYABLE AND SUBORDINATED DEBENTURES
The Company has an available line of credit of $10,000,000. Interest
is calculated at the Company's option, either on the outstanding
balance at prime rate minus 1% or Libor plus 150 basis points. The
line of credit is unsecured and the Company must adhere to certain
financial covenants pertaining to net worth and debt coverage. The
Company was not utilizing their available credit line at May 31, 2004
or November 30, 2003.
On August 1, 2000, the Company repurchased (pursuant to a tender
offer) 278,328 shares of its outstanding common stock by issuing
subordinated debentures equal to $2 per share, which accrue interest
at 6% and are due to mature on August 1, 2005. The interest is
payable semi-annually.
NOTE 11 - COMMITMENTS AND CONTINGENCIES
Litigation
The Company has been named as a defendant in 12 lawsuits alleging
that the plaintiffs were injured as a result of their purchasing and
ingesting our diet suppressant containing phenylpropanolamine (PPA),
which the Company utilized as its active ingredient in its products
prior to November 2000. The lawsuits brought against the Company are
for unspecified amount of compensatory and exemplary damages. Nine
of the suits have been dismissed with prejudice. Outside counsel for
the Company believes that the three PPA cases still pending against
the Company are defensible. Of the Company's three pending suits,
one is insured by the Company's liability carrier.
Dividends
CCA declared a cash dividend of $0.14 per share payable to all
holders of the Company's common stock, $0.07 to shareholders of
record on May 1, 2004 payable on June 1, 2004 and $0.07 to sharehold
ers of record on November 1, 2004, payable on November 30, 2004.
On June 17, 2004, the Board of Directors declared a 2% stock dividend
payable on December 1, 2004 to shareholders of record on November 1,
2004.
-12-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12 - PENSION PLANS
The Company has adopted a 401(K) Profit Sharing Plan that covers
union and non-union employees with over one year of service and
attained Age 21. Employees may make salary reduction contributions
up to twenty-five percent of compensation not to exceed the federal
government limits.
NOTE 13 - STOCK-BASED COMPENSATION
The Company accounts for its stock-based employee compensation under
the recognition and measurement principles of Accounting Principles
Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees,
and related interpretations. Under APB No. 25, when the exercise
price of stock options equals the market price of the underlying
stock on the date of grant, no compensation expense is recognized in
the consolidated statement of operations.
During the second quarter of 2004, the Company issued incentive stock
options to purchase 66,600 shares and non-qualified stock options to
purchase 33,400 shares under the 2003 stock option plan. Under the
provisions of APB No. 25, no compensation expense has been, or will
be, recognized in the consolidated statement of operations.
Proforma net income and net income per share, as required by SFAS No.
123, have been determined as if we had accounted for all employee
stock options granted under SFAS No. 123's fair value method. The
proforma effect of recognizing compensation expense in accordance
with SFAS No. 123 is as follows:
<TABLE>
<CAPTION>
Three Months Six Months
Ended May 31, Ended May 31,
2004 2003 2004 2003
<S> <C> <C> <C> (C>
Net income as reported $2,798,203 $2,584,095 $3,634,345 $3,157,721
SFAS No. 123 based
compensation ( 186,530) - ( 186,530) -
Income tax benefit 74,612 - 74,612 -
Net income - proforma $2,686,285 $2,584,095 $3,522,427 $3,157,721
Basic net income per
share - as reported $.38 $.36 $.50 $.44
Basic net income per
share - proforma $.37 $.36 $.48 $.44
Diluted net income per
share - as reported $.36 $.34 $.47 $.41
Diluted net income per
shared - proforma $.35 $.34 $.46 $.41
Weighted average
shares used in
computing net income and
proforma net income per
share:
Basic 7,314,491 7,215,128 7,301,942 7,178,242
Diluted 7,677,661 7,654,529 7,665,029 7,642,160
</TABLE>
-13-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 - STOCK-BASED COMPENSATION (Continued)
Proforma information regarding net income and net income per share is
required by SFAS No. 123, and has been determined as if the Company
had accounted for its employee stock options under the fair value
method of SFAS No. 123. The fair value of these options was esti-
mated at the date of grant using the Black-Scholes option pricing
model with the following assumptions for the three months and six
months ended May 31, 2004: a risk-free interest rate of 3.78%;
dividend yield of 1.68%; volatility factor of the expected market
price of the Company's common stock of 20.32%; and a weighted average
life of the options of five or ten years.
The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting
restrictions and are fully transferable. In addition, option valua-
tion models require the input of highly subjective assumptions.
Because the Company's employee stock options have characteristics
significantly different from those of traded options and because
changes in the subjective input assumptions can materially affect the
fair value estimate, in management's opinion, the existing models do
not necessarily provide a reliable single measure of the fair value
of its employee stock options.
NOTE 14 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES
Short-term investments and marketable securities, which consist of
stock and various corporate and government obligations, are stated at
market value. The Company has classified its investments as
Available-for-Sale securities and considers as current assets those
investments which will mature or are likely to be sold in the next
fiscal year. The remaining investments are considered non-current
assets. The cost and market values of the investments at May 31,
2004 and November 30, 2003 were as follows:
-14-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES
May 31, 2004 November 30, 2003
COST MARKET COST MARKET
Current:
Corporate
obligations $ 525,000 $ 527,803 $ 850,860 $ 854,466
Government
obligations
(including mortgage
backed securities) 1,317,446 1,260,568 1,260,340 1,248,731
Common stock 253,134 240,050 304,379 295,538
Mutual funds 183,751 122,319 179,320 118,963
Other equity
investments 103,573 104,750 111,750 114,750
Total 2,382,904 2,255,490 2,706,649 2,632,448
Non-Current:
Corporate obli-
gations 6,024,066 5,950,390 5,374,706 5,342,893
Government obli-
gations 4,132,697 4,013,188 4,208,237 4,182,482
Preferred stock 1,329,495 1,272,988 1,329,495 1,366,036
Other equity invest-
ments 100,000 100,000 100,000 100,000
Total 11,586,258 11,336,566 11,012,438 10,991,411
Total $13,969,162 $13,592,056 $13,719,087 $13,623,859
-15-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<CAPTION>
NOTE 14 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES (CONTINUED)
The market value at May 31, 2004 was $13,592,056 as compared to $13,623,859 at November 30,
2003. The gross unrealized gains and losses were $16,403 and ($393,509) for May 31, 2004 and
$89,761 and ($184,989) for November 30, 2003. The cost and market values of the investments at
May 31, 2004 were as follows:
COL. A COL. B COL. C COL.D COL.E
Amount at Which
Each Portfolio
Number of Market Of Equity Security
Units-Principal Value of Issues and Each
Amount of Each Issue Other Security
Name of Issuer and Maturity Interest Bonds and Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Notes Each Issue Sheet Date Balance Sheet
<S> <C> <C> <C> <C> <C> <C>
CORPORATE OBLIGATIONS:
GMAC Smartnotes 10/15/05 3.100% 200,000 $ 200,000 $ 199,330 $ 199,330
GMAC Smartnotes 10/15/05 3.150 400,000 400,000 399,728 399,728
GMAC Smartnotes 5/15/05 5.000 175,000 175,000 177,062 177,062
GMAC Smartnotes 8/15/04 2.650 250,000 250,000 250,235 250,235
GMAC Smartnotes 6/15/05 3.550 200,000 200,000 200,208 200,208
GMAC Smartnotes 5/15/06 4.050 400,000 400,000 396,960 396,960
GMAC Smartnotes 10/15/06 3.550 250,000 250,000 247,525 247,525
GMAC Smartnotes 12/15/06 3.400 200,000 200,000 196,662 196,662
Household Finance Corp.
Internotes 10/15/06 2.750 100,000 100,000 98,919 98,919
Bear Sterns 2/15/07 2.650 100,000 100,000 97,366 97,366
</TABLE>
-16-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<CAPTION>
NOTE 14 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES (CONTINUED)
COL. A COL. B COL. C COL.D COL.E
Amount at Which
Each Portfolio
Number of Market Of Equity Security
Units-Principal Value of Issues and Each
Amount of Each Issue Other Security
Name of Issuer and Maturity Interest Bonds and Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Notes Each Issue Sheet Date Balance Sheet
<S> <C> <C> <C> <C> <C> <C>
CORPORATE OBLIGATIONS (Continued):
Ford Motor Credit 5/22/06 4.750% 250,000 $ 250,000 $ 253,603 $ 253,603
Ford Motor Corp. 10/20/06 4.250 100,000 100,000 99,978 99,978
CIT Group Inc. 1/15/06 4.000 200,000 200,000 201,952 201,952
CIT Group Inc. 3/15/05 3.200 100,000 100,000 100,506 100,506
CIT Group Inc. 7/15/05 2.000 100,000 100,000 99,268 99,268
CIT Group Inc. 10/15/05 2.250 100,000 100,000 99,367 99,367
GE Capital Group Internotes 2/15/06 2.450 250,000 250,000 248,195 248,195
GE Capital Group Internotes 7/15/06 2.150 200,000 200,000 196,018 196,018
GE Capital Group Internotes 10/15/06 2.500 400,000 400,000 394,812 394,812
GE Capital Group Internotes 9/15/06 2.550 150,000 150,000 147,849 147,849
GE Capital Group Internotes 9/15/06 2.350 300,000 300,000 295,696 295,696
GE Capital Group Internotes 10/15/06 2.250 300,000 300,000 295,101 295,101
GE Capital Group Internotes 2/15/07 2.500 200,000 200,000 195,256 195,256
GE Capital Group 3/15/07 2.350 250,000 250,000 242,372 242,372
Citibank Global Markets
Hldg Inc. 3/15/07 2.350 150,000 150,000 145,101 145,101
American General Fin. Corp. 8/15/05 2.050 200,000 200,000 199,448 199,448
American General Fin. Corp. 9/15/06 2.500 100,000 100,000 98,304 98,304
John Hancock Life Ins. Co. 7/15/06 2.250 200,000 200,000 196,604 196,604
John Hancock Life Ins. Co. 10/15/06 2.450 100,000 100,000 97,606 97,606
John Hancock Life Ins. Co. 7/15/06 2.300 200,000 200,000 195,292 195,292
John Hancock Life Ins. Co. 3/15/07 2.350 150,000 150,000 146,138 146,138
General Dynamics Corp. 10/15/06 2.125 150,000 149,706 147,713 147,713
Bank One Corp. Global Notes 6/30/08 2.625 125,000 124,360 118,019 118,019
6,549,066 6,478,193 6,478,193
</TABLE>
-17-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<CAPTION>
NOTE 14 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES (CONTINUED)
COL. A COL. B COL. C COL.D COL.E
Amount at Which
Each Portfolio
Number of Market of Equity Security
Units-Principal Value of Issues and Each
Amount of Each Issue Other Security
Name of Issuer and Maturity Interest Bonds and Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Notes Each Issue Sheet Date Balance Sheet
<S> <C> <C> <C> <C> <C> <C>
GOVERNMENT OBLIGATIONS:
US Treasury Note 7/31/05 1.500% 625,000 $ 624,096 $ 621,681 $ 621,681
US Treasury Note 6/30/05 1.125 200,000 199,524 198,376 198,376
US Treasury Note 5/15/06 2.000 100,000 99,895 99,031 99,031
US Treasury Note 5/31/05 1.250 375,000 374,550 372,893 372,893
Federal Home Loan Bank 8/21/06 2.590 200,000 200,000 198,126 198,126
Federal Home Loan Bank 7/24/06 2.125 100,000 100,000 98,406 98,406
Federal Home Loan Bank 7/28/06 2.189 200,000 199,000 196,688 196,688
FNMA 5/15/06 2.250 200,000 198,772 197,750 197,750
FHLB 6/19/06 2.260 250,000 249,380 246,720 246,720
FHLMC 11/15/17 4.375 200,000 200,000 195,626 195,626
FHLMC 11/15/09 3.000 250,000 250,000 243,640 243,640
FNMA 8/15/12 4.000 250,000 250,000 249,610 249,610
FNMA 12/10/17 3.000 150,000 150,000 149,063 149,063
FNMA 9/24/07 3.000 200,000 200,000 196,626 196,626
Tennessee Valley Authority
Power Bonds 5/1/29 6.500 26,000 688,530 626,600 626,600
Tobacco Settlement Fin
Corp. N 6/1/15 5.000 200,000 198,500 170,245 170,245
NJ Turnpike Authority 1/1/30 1.050 325,000 325,000 325,000 325,000
Port Authority NY & NJ
Cons 88th SR BE 10/1/04 4.500 225,000 238,789 227,313 227,313
CLOSED END MUNICIPAL BONDS/MUTUAL FUNDS:
Muniyield New Jersey Insd Frd Inc. 6,500 96,905 89,115 89,115
Muniholdings New Jersey Insd FD Inc. 6,900 94,549 94,323 94,323
Nuveen New Jersey Invt Quality Municipal Fund 6,200 95,162 87,420 87,420
Nuveen New Jersey Prem Inc Municipal Fund 5,200 78,639 74,620 74,620
Van Kamp Amer Cap Inv Gr NJ 4,800 80,502 74,880 74,880
Blackrock New Jersey Municipal Inc. 6,000 87,989 80,460 80,460
Eaton Vance New Jersey Municipal Inc. 5,600 85,506 79,743 79,743
Nuveen New Jersey Dividend Advantage 5,700 84,855 79,801 79,801
5,450,143 5,273,756 5,273,756
</TABLE>
-18-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<CAPTION>
NOTE 14 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES (CONTINUED)
COL. A COL. B COL. C COL.D COL.E
Amount at Which
Each Portfolio
Number of Market Of Equity Security
Units-Principal Value of Issues and Each
Amount of Each Issue Other Security
Name of Issuer and Maturity Interest Bonds and Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Notes Each Issue Sheet Date Balance Sheet
<S> <C> <C> <C> <C> <C> <C>
EQUITY:
Preferred Stock:
Public Income NTS
General Electric Cap
Corp. 11/15/32 6.100% 14,800 $ 379,495 $ 364,228 $ 364,228
Merrill Lynch Trust 9/30/08 7.280 6,000 150,000 155,400 155,400
Corporate Backed Trust
Certificates For AIG
Sun America 5/17/07 6.700 6,000 150,000 151,260 151,260
Corporate Backed Trust
Certificates For Bristol
Myers Squibb 5/23/07 6.800 6,000 150,000 147,780 147,780
Morgan Stanley Cap Tr 7/15/33 5.750 4,000 100,000 89,120 89,120
ABN AMRO Cap Fund 7/3/08 5.900 2,000 50,000 45,600 45,600
JP Morgan Chase Cap IX 6/15/33 5.875 2,000 50,000 45,600 45,600
Wells Fargo Cap Tr VIII 8/1/33 5.625 8,000 200,000 177,200 177,200
Lehman Cap Trust IV 10/31/52 6.375 4,000 100,000 96,800 96,800
1,329,495 1,272,988 1,272,988
</TABLE>
-19-
CCA INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<CAPTION>
NOTE 14 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES (CONTINUED)
COL. A COL. B COL. C COL.D COL.E
Amount at Which
Each Portfolio
Number of Market Of Equity Security
Units-Principal Value of Issues and Each
Amount of Each Issue Other Security
Name of Issuer and Maturity Interest Bonds and Cost of at Balance Issue Carried in
Title of Each Issue Date Rate Notes Each Issue Sheet Date Balance Sheet
<S> <C> <C> <C> <C> <C> <C>
EQUITY (Continued):
Common Stock:
DTE Energy Co. 1,200 $ 51,649 $ 48,252 $ 48,252
Consolidated Edison Inc. 3,800 153,485 149,188 149,188
Progress Energy Inc. 1,000 48,000 42,610 42,610
253,134 240,050 240,050
Mutual Funds:
Dreyfus Premier Limited
Term High Income CL B 16,918.190 183,751 122,319 122,319
Other Equity Investments:
Aberdeen Asia Pacific
Income Fund 4 100,000 100,000 100,000
Enterprise Production Partners LP 5,000 103,573 104,750 104,750
203,573 204,750 204,750
$13,969,162 $13,592,056 $13,592,056
</TABLE>
-20-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION (UNAUDITED)
For the three-month period ending May 31, 2004, the Company had revenues of
$18,339,247 and net income of $2,798,203 after a provision for taxes of
$1,848,233. For the same quarter in 2003, revenues were $17,610,850 and net
income of $2,584,095 after a provision for taxes of $1,744,481. Earnings per
share was $.36 (diluted) for the second quarter 2004 as compared to earnings
per share of $.34 (diluted) for the second quarter 2003. In accordance with
EITF 00-14, the Company has accounted for certain sales incentives offered to
customers by charging them directly to sales as opposed to advertising and
promotional expense. Net sales for the second quarter of 2004 were reduced by
$636,598 and offset by an equal reduction of trade promotional expenses, which
were included in the Company's advertising expense budget. In the same period
of the prior year, gross sales were reduced by $695,397 and trade promotion was
credited by that amount. These accounting adjustments under EITF 00-14 do not
affect net income.
For the three month period ending May 31, 2004, the 8% increase in net
income was a result of a $704,392 increase in net sales and an increase in cost
of goods sold of $552,875. Advertising, co-op and promotional expenses in
creased by $429,902 compared to the three months ending May 31, 2003. Selling,
general and administrative expenses decreased by $431,876. Included in the
selling, general and administrative expenses were reductions of $92,304 in
freight out, $76,220 in royalty expenses, legal and accounting of $50,795, and
a decrease in consulting fees of $59,563.
Both media and co-op commitments have a material effect on the Company's
operations. The Company attempts to anticipate its advertising and promotional
commitments as a percentage of gross sales in order to control its effect on
net income. In accordance with APB No. 28, Interim Financial Reporting, the
Company expenses its advertising and related costs proportionately over the
interim periods based on its total expected expenses for its various adver-
tising programs. The total advertising programs for the year are budgeted at
$9 million for media and $5.5 million for co-op advertising up from $8 million
for media and $5 million for the prior year. The Company's co-op budget for
the quarter is $1,375,000. Deducted from the budgeted figure is the $636,598
offset against net sales. Research of prior years show that the entire amount
of the budgeted co-op has never been fully utilized by the Company's accounts
as a result of merchandising changes and cancelled promotions. An additional
reduction of $133,776 to co-op expense is due to this reserve placed on co-op
commitments. The reduction is based on an estimate of co-op commitments that
will not be utilized based on the historical facts. The resulting $604,626 was
expensed for co-op for the quarter and a deferral of $1,074,402 for co-op
advertising is reflected on the balance sheet. This deferral will be fully
expensed by year-end. The deferral is primarily a result of the Company's
current $5,500,000 co-op advertising budget, which is predicated on substan
tially lower spending in the third and fourth quarters. The Company expensed
$2,250,000 for its media advertising for the quarter and deferred $4,218,314
for subsequent deductions.
-21-
For the period ended May 31, 2004, there was approximately $178,126 of
unclaimed co-op commitments from the prior years. If it becomes apparent that
this co-op will not be utilized, the unclaimed co-op will be offset against the
expense during the rest of the fiscal year. This procedure is consistent with
prior years' methodology with regard to the unclaimed co-op expenses.
For the six month period ended May 31, 2004, the Company had revenues of
$31,426,735 and net income of $3,634,345 after a provision for income taxes of
$2,370,644. In the prior year's period, the Company had revenues of
$30,126,032 and net income of $3,157,721 after a provision for income taxes of
$2,131,187. This represents a 15.1% increase in net income due to an increase
in revenues of $1,300,703 and an increase in cost of good sold of $960,973.
Selling, general and administrative expenses decreased from last period to this
period by $737,528, and advertising, co-op and promotional expenses increased
by $531,638 compared to the six months ended May 31, 2003.
For the six month period ended May 31, 2004, advertising, cooperative and
promotional allowance expenditures were $5,887,896 as compared to $5,356,258
for the six month period ending May 31, 2003. This is primarily due to an
estimated increase in the national advertising budget from $8 million to $9
million annually. Advertising expenditures were 18.9% of sales vs. 18.0% last
year.
For the six month period ending May 31, 2004 research and development
expenses were $440,472 compared to $431,773 last year.
The Company's financial position as at May 31, 2004 consists of current
assets of $25,694,213 and current liabilities of $12,056,276, or a current
ratio of 2.1:1. In addition, shareholders' equity increased from $23,344,540
to $25,822,650 primarily due to net income earned during the current period.
All of the Company's investments are classified as available for sale.
Investments with a maturity date greater than one year from May 31, 2004 are
presented as long-term investments. Assuming these long-term investments can
be sold and turned into liquid assets at any time, it would result in a current
ratio of 3.1:1.
The Company generated $716,000 in cash from operations due to the six month
net income of $3.63 million, a $4.8 million increase in accounts payable, and a
$602,000 net increase in income taxes due. Cash decreased due to an inventory
increase of $0.6 million, an increase in the Company's accounts receivable of
$3.0 million and an increase in deferred advertising of $5.3 million. All
increases in deferred advertising, accounts receivable, inventory and accounts
payable are "normal" seasonal increases.
The $716,000 cash generated by operations, however, was used to pay divi-
dends of $379,000 and for the acquisition of equipment of $77,000 . The
Company paid after netting purchases and sales of marketable securities
$260,000, leaving the Company with no change in its cash position.
-22-
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURE ABOUT MARKET RISK
The Company's financial statements record the Company's investments under
the "mark to market" method (i.e., at date-of-statement market value). The
investments are, categorically listed, in "Common Stock", "Mutual Funds",
"Other Equity", "Preferred Stock", "Government Obligations" and "Corporate
Obligations". $444,800 of the Company's $13,592,056 portfolio of investments
(approximate, as at May 31, 2004) is invested in the "Common Stock" and "Other
Equity" categories, and approximately $1,272,988 in that category are Preferred
Stock holdings. Whereas the Company does not take positions or engage in
transactions in risk-sensitive market instruments in any substantial degree,
nor as defined by SEC rules and instructions; therefore, the Company does not
believe that its investment-market risk is material.
ITEM 4. CONTROLS AND PROCEDURES
With the participation of our Chief Executive Officer and Chief Financial
Officer, management has carried out an evaluation of the effectiveness of our
disclosure controls and procedures (as defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934). Based on that evaluation, the Chief Execu-
tive Officer and Chief Financial Officer concluded that our disclosure controls
and procedures were effective as of May 31, 2004.
There were no changes in our internal control over financial reporting (as
defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) subsequent
to the date the controls were evaluated that materially affect, or are reason
ably likely to materially affect, our internal control over financial
reporting.
-23-
CCA INDUSTRIES, INC.
PART II OTHER INFORMATION
Item 1. Legal Proceedings:
See Part I - Note 11 of the Financial Statements regarding liti-
gation.
Item 4. Submission of Matters to a Vote of Security Holders:
None.
Item 5. Other Information:
None.
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
(11) Computation of Earnings Per Share
(31.1) Certification of Chief Executive Officer pursuant to Rule
13a-14(a)*
(31.2) Certification of Chief Financial Officer pursuant to Rule
13a-14(a)*
(32.1) Certification of Chief Executive Officer pursuant to 18
U.S.C. 1350*
(32.2) Certification of Chief Financial Officer pursuant to 18
U.S.C. 1350*
* Filed herewith.
(b) Reports on Form 8-K.
Current report on Form 8-K furnished April 7, 2004 pursuant to
Item 5 (Other Events).
-24-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the under-
signed, thereunto duly authorized.
Date: July 6, 2004
CCA INDUSTRIES, INC.
By:
David Edell, Chief Executive Officer
By:
Ira W. Berman, Chairman of the Board
-25-
Exhibit 11
CCA INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(UNAUDITED)
Three Months Ended Six Months Ended
May 31, May 31,
2004 2003 2004 2003
Weighted average shares
outstanding - Basic 7,314,491 7,215,128 7,301,942 7,178,242
Net effect of dilutive stock
options--based on the
treasury stock method
using average market
price 363,170 439,401 363,087 463,918
Weighted average shares outstanding -
Diluted 7,677,661 7,654,529 7,665,029 7,642,160
Net income $2,798,203 $2,584,095 $3,634,345 $3,157,721
Per share amount
Basic $.38 $.36 $.50 $.44
Diluted $.36 $.34 $.47 $.41
Exhibit 31.1
CERTIFICATION
I, David Edell, Chief Executive Officer of the Registrant, certify that:
1. I have reviewed this quarterly report on Form 10-Q of CCA Industries, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the Registrant as of, and for, the periods presented in this report.
4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervi-
sion, to ensure that material information relation to the Registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which
this report is being prepared;
(b) Evaluated the effectiveness of the Registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation;
and
(c) Disclosed in this report any change in the Registrant's internal
control over financial reporting that occurred during the Regis-
trant's most recent fiscal quarter (the registrant's fourth fiscal
quarter in the case of an annual report) that has materially af-
fected, or is reasonably likely to affect, the Registrant's internal
control over financial reporting; and
5. The Registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal controls over financial reporting,
to the Registrant's auditors and the audit committee of the Registrant's
board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the Registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
control over financial reporting.
Date: July 6, 2004
/s/
-----------------------------------
David Edell
Chief Executive Officer
Exhibit 31.2
CERTIFICATION
I, John Bingman, Chief Financial Officer of the Registrant, certify that:
1. I have reviewed this quarterly report on Form 10-Q of CCA Industries, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the Registrant as of, and for, the periods presented in this report.
4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervi-
sion, to ensure that material information relation to the Registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which
this report is being prepared;
(b) Evaluated the effectiveness of the Registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation;
and
(c) Disclosed in this report any change in the Registrant's internal
control over financial reporting that occurred during the Regis-
trant's most recent fiscal quarter (the registrant's fourth fiscal
quarter in the case of an annual report) that has materially af-
fected, or is reasonably likely to affect, the Registrant's internal
control over financial reporting; and
5. The Registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal controls over financial reporting,
to the Registrant's auditors and the audit committee of the Registrant's
board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the Registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the Registrant's
internal control over financial reporting.
Date: July 6, 2004
/s/__________________________________
John Bingman
Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of CCA Industries, Inc. (the
"Registrant") on Form 10-Q for the quarterly period ended May 31, 2004 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, David Edell, Chief Executive Officer of the Registrant, certify,
in accordance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report, to which this certification is attached, fully complies with
the requirements of section 13(a) of the Securities Exchange Action of
1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Regis-
trant.
Date: July 6, 2004
/s/ --------------------------------
David Edell
Chief Executive Officer
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of CCA Industries, Inc. (the
"Registrant") on Form 10-Q for the quarterly period ended May 31, 2004 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, John Bingman, Chief Financial Officer of the Registrant, certify,
in accordance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report, to which this certification is attached, fully complies with
the requirements of section 13(a) of the Securities Exchange Action of
1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Regis-
trant.
Date: July 6, 2004
/s/ --------------------------------
John Bingman
Chief Financial Officer