Colonial Commercial Corp. to Acquire Universal Supply Group, Inc.

LEVITTOWN, N.Y.--(BUSINESS WIRE)--March 25, 1999--

Acquisition Should Approximately Double Colonial's Sales and

be Accretive to Earnings Per Share

Colonial Commercial Corp. (Nasdaq: "CCOM", "CCOMP"), which distributes contract and architectural door hardware, doors and frames (through its ownership of Atlantic Hardware and Supply Corporation), today announced that it has entered into a Definitive Agreement to purchase the assets and business of Universal Supply Group, Inc.

The transaction, which is subject to certain terms and conditions, will be based on a formula purchase price payable in cash, which is now estimated to approximate $12 million.

Universal Supply Group, Inc. ("Universal"), headquartered in Hawthorne, New Jersey, is a leading distributor of heating and air conditioning equipment and climate controls in the state of New Jersey. Universal's sales for its fiscal year ending March 31, 1999 are estimated to exceed $26 million, which represents a 40%-plus increase when compared with sales of $18.4 million in the fiscal year ended March 31, 1998.

Universal's products are marketed primarily to heating, ventilation and air conditioning (HVAC) contractors, which in turn sell such products to residential homeowners and commercial/industrial customers. Approximately 90% of its products are sold into the replacement/retrofit market, with the balance utilized in new construction applications. In addition to its 500 different product lines, Universal also provides technical field support, in-house training, and control system consultation for engineers and installers.

"Universal has developed a superb reputation for quality products and services during the past 50 years, and its experienced management team should contribute greatly to Colonial's future success," stated Bernard Korn, Chief Executive Officer of Colonial Commercial Corp. "The acquisition will significantly expand Colonial's capabilities as a distributor of building-related products and will allow us to diversify into residential and remodeling markets. At the same time, Universal should complement our Atlantic Hardware and Supply subsidiary, in that both companies market to contractors or builders, rather than to end-users of their products."

"We are excited about joining the Colonial family of companies," commented William Pagano, President of Universal Supply Group, Inc. "Upon evaluation of the various strategic alternatives available to our company, we determined that Colonial Commercial Corp.'s management philosophy was consistent with Universal's business plan and principles. We are confident that our employees and customers will be well-served by this transaction."

"The proposed acquisition of Universal is consistent with Colonial's strategy for substantially enhancing shareholder values," continued Korn. "The acquisition should more than double the annual sales of our Company, and it should be accretive to earnings per share, on a going-forward basis. In the twelve months following the completion of the Universal acquisition, Colonial's revenues should exceed $50 million, compared with approximately $25 million for the year ended December 31, 1998. We expect the acquisition to close in June 1999."

Colonial Commercial Corp., through its ownership of Atlantic Hardware and Supply Corporation, distributes a broad line of contract and architectural door hardware, doors and frames to customers located in the Eastern United States. Its products are installed in commercial, residential and institutional structures, including office buildings, hospitals, hotels, schools, government facilities and high-rise apartment buildings.

For the year ended December 31, 1998, Colonial Commercial Corp. reported a total net income of $3,851,753, or $1.23 per diluted share, on revenues of $25.2 million. This compared with a total net income of $672,356, or $0.21 per diluted share, and sales of $22.6 million, for the year ended December 31, 1997.

Colonial Commercial Corp. is headquartered in Levittown, New York. Its common stock is traded on NASDAQ under the symbol "CCOM", while its convertible preferred shares trade on NASDAQ under the symbol "CCOMP" (Note: Each share of the Company's preferred stock is convertible into one share of the Company's common stock. Preferred stockholders will be entitled to a dividend, based upon a formula, when and if any dividends are declared on the Company's common stock).

This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe", "estimate", "project", "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products in the marketplace, competitive factors, dependence upon third-party vendors, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.