SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934


    FOR THE QUARTER ENDED MARCH 31, 2002       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 Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).     Yes     No X
                                                   ---    ---

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       No X
                                            ---     ---

Indicate the number of shares outstanding of the Company's Common Stock and
Convertible Preferred Stock as of November 11, 2003.

           Common Stock, par value $.05 per share - 2,405,804 shares
    Convertible Preferred Stock, par value $.05 per share - 1,464,242 shares



<PAGE>

COLONIAL COMMERCIAL CORP. AND SUBSIDIARIES

                                   INDEX

                                                                      PAGE NO.
PART I.  FINANCIAL INFORMATION

      Item 1 -    Financial Statements

                  Consolidated Balance Sheets as of
                   March 31, 2002 (unaudited) and
                   December 31, 2001                                      1

                  Consolidated Statements of Operations
                    Three Months Ended March 31, 2002
                    and 2001 (unaudited)                                  2

                  Consolidated Statements of Cash Flows for
                     the Three Months Ended March 31, 2002
                     and 2001 (unaudited)                                 3

                  Notes to Consolidated Financial Statements
                     (unaudited)                                          4

     Item 2 -     Management's Discussion and Analysis of
                    Financial Condition and Results of Operations        11

     Item 3 -     Quantitative and Qualitative Disclosures About
                    Market Risk                                          15

     Item 4 -     Controls and Procedures                                16

PART II. OTHER INFORMATION

     Item 1 -     Legal Proceedings                                      17

     Item 6 -       Exhibits and Reports on Form 8-K                     17

SIGNATURES AND CERTIFICATIONS                                            17



<PAGE>
                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

<TABLE>
<CAPTION>


                   COLONIAL COMMERCIAL CORP. AND SUBSIDIARIES
                           Consolidated Balance Sheets
                      March 31, 2002 and December 31, 2001


                                Assets                              2002             2001
                                                                    ----             ----
                                                                 (Unaudited)
Current assets:
<S>                                                            <C>                  <C>
  Cash and cash equivalents                                    $    606,358         576,514
  Accounts receivable, net of
        allowance for doubtful accounts
        of $254,000 in 2002 and $253,000
        in 2001, respectively                                     4,013,645       4,466,667
  Inventory                                                       6,296,912       6,314,546
  Prepaid expenses and other current assets                         324,060         376,838
                                                               ------------    ------------
              Total current assets                               11,240,975      11,734,565
Property and equipment, net                                         614,901         622,790
Goodwill                                                          1,316,929       1,316,929
Other intangibles                                                   117,083         128,700
Restricted investment securities                                    145,955         122,506
                                                               ------------    ------------
                                                               $ 13,435,843      13,925,490
                                                               ============    ============
              Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
  Accounts payable                                             $  2,691,901       2,422,802
  Accrued liabilities                                               754,233       1,047,188
  Income taxes payable                                               17,342          26,086
  Borrowings under credit facility                                7,682,837       7,929,576
  Investment in unconsolidated subsidiary
        in bankruptcy, carried at cost                              219,007         219,007
  Guaranteed borrowings of unconsolidated
        subsidiary in bankruptcy                                  5,800,695       5,800,695
  Notes payable - current portion                                   129,285         143,405
                                                               ------------    ------------
              Total current liabilities                          17,295,300      17,588,759
Notes payable, excluding current portion                             60,122          90,495
Deferred compensation                                               145,955         122,506
                                                               ------------    ------------
              Total liabilities                                  17,501,377      17,801,760
                                                               ------------    ------------

Stockholders' equity (deficit):
  Convertible preferred stock, $.05 par value, liquidation
    preference of $7,321,430  at March 31, 2002
    and December 31, 2001, respectively, 2,468,860 shares
    authorized, 1,464,286 shares issued and outstanding
    at March 31, 2002 and December 31, 2001, respectively            73,214          73,214
  Common stock, $.05 par value, 20,000,000 shares
    authorized, 1,603,760 shares issued and outstanding
    at March 31, 2002 and December 31, 2001, respectively            80,189          80,189
  Additional paid-in capital                                      8,966,513       8,966,513
  Accumulated deficit                                           (13,185,450)    (12,996,186)
                                                               ------------    ------------
              Total stockholders' deficit                        (4,065,534)     (3,876,270)
Commitments and contingencies
                                                               $ 13,435,843      13,925,490
                                                               ============    ============


See accompanying notes to unaudited consolidated financial statements.
</TABLE>



                                      -1-
<PAGE>

<TABLE>
<CAPTION>


                   COLONIAL COMMERCIAL CORP. AND SUBSIDIARIES
                      Consolidated Statements of Operations
                   Three Months ended March 31, 2002 and 2001
                                   (Unaudited)

                                                        2002            2001
                                                        ----            ----
<S>                                                 <C>               <C>
Sales                                               $ 7,230,926       6,604,176
Cost of sales                                         5,019,904       4,583,146
                                                    -----------     -----------
     Gross profit                                     2,211,022       2,021,030

Selling, general and administrative
        expenses, net                                 2,303,435       2,240,993
                                                    -----------     -----------
     Operating loss                                     (92,413)       (219,963)

Interest income                                             603           4,683
Other income                                             38,448          39,867
Interest expense                                       (135,902)       (186,725)
                                                    -----------     -----------
     Loss from continuing operations
        before income taxes                            (189,264)       (362,138)

Income taxes                                               --           (74,100)
                                                    -----------     -----------
     Loss from continuing operations                $  (189,264)       (288,038)

Net income from operations of discontinued
  segments                                                 --           314,525
                                                    -----------     -----------
    Net (loss) income                               $  (189,264)         26,487
                                                    ===========     ===========

Income (loss) per common share:
  Basic:
    Loss from continuing operations                 $     (0.12)          (0.18)
    Income on discontinued operation                       --              0.20
                                                    -----------     -----------
    Net (loss) income per common share              $     (0.12)           0.02
                                                    ===========     ===========

  Diluted:
    Loss from continuing operations                 $     (0.12)          (0.18)
    Income on discontinued operation                       --              0.20
                                                    -----------     -----------
    Net (loss) income per common share              $     (0.12)           0.02
                                                    ===========     ===========

Weighted average shares outstanding:
  Basic                                               1,603,760       1,601,600
  Diluted                                             1,603,760       1,601,600


See accompanying notes to unaudited consolidated financial statements.
</TABLE>


                                      -2-
<PAGE>

<TABLE>
<CAPTION>


                   COLONIAL COMMERCIAL CORP. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                   Three Months ended March 31, 2002 and 2001
                                   (Unaudited)

                                                                         2002           2001
                                                                         ----           ----
Cash flows from operating activities:
<S>                                                                    <C>             <C>
   Net (loss) income                                                   $(189,264)      26,487
   Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
         Income from discontinued operation                                 --       (314,525)
         Deferred tax expense                                               --         12,900
         Provision for doubtful accounts                                  21,833       23,291
         Depreciation                                                     38,920       37,275
         Amortization of intangibles                                      11,617       35,387
         Changes in assets and liabilities, net of the effects
             of acquisitions:
                Accounts receivable                                      431,189      749,934
                Inventory                                                 17,634     (167,955)
                Prepaid expenses and other current assets                 52,778      145,185
               Accounts payable                                          269,099      (18,372)
               Investment securities - trading                           (23,449)        (887)
               Accrued liabilities                                      (292,955)    (657,674)
               Income taxes payable                                       (8,744)      (4,278)
               Deferred compensation                                      23,449          887
                                                                       ---------    ---------
                Net cash provided by (used in)  operating activities     352,107     (132,345)
                                                                       ---------    ---------

Cash flows from investing activities:
    Purchase of licensing agreement                                         --         (4,800)
    Net additions to property and equipment                              (31,031)         817
                                                                       ---------    ---------
               Net cash used in investing activities                     (31,031)      (3,983)
                                                                       ---------    ---------

Cash flow from financing activities:
    Net repayments on notes payable                                      (44,493)     (39,162)
    Net repayments under credit facility                                (246,739)    (777,621)
                                                                       ---------    ---------
               Net cash used in financing activities                    (291,232)    (816,783)
                                                                       ---------    ---------
Net cash provided by discontinued operation                                 --        775,522
                                                                       ---------    ---------
Increase (decrease) in cash and cash equivalents                          29,844     (177,589)
Cash and cash equivalents - beginning of period                          576,514      803,012
                                                                       ---------    ---------
Cash and cash equivalents - end of period                              $ 606,358      625,423
                                                                       =========    =========


See accompanying notes to unaudited consolidated financial statements.
</TABLE>



                                      -3-
<PAGE>



                   COLONIAL COMMERCIAL CORP. AND SUBSIDIARIES

                   Notes To Consolidated Financial Statements

                                 March 31, 2002
                                   (Unaudited)

(1)      Summary of Significant Accounting Policies and Practices
         --------------------------------------------------------

         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
         adjust- ments (consisting solely of normal recurring adjustments),
         which are, in the opinion of management, necessary for a fair
         presentation 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 March 31, 2002 are not necessarily
         indicative of the operating results that may be achieved for the full
         year.

         Certain information and footnote disclosures, normally included in con-
         solidated financial statements prepared in accordance with accounting
         principles generally accepted in the United States of America, 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 2001
         Form 10-K.

         Certain reclassifications have been made to the three months ended
         March 31, 2001 information to conform to the current quarter
         presentation.

         The Company has one continuing industry segment - heating, ventilation
            and air conditioning.

(2)      Chapter 11 Reorganization
         --------------------------

         On January 28, 2002, Atlantic Hardware & Supply Corporation
         ("Atlantic"), a wholly owned subsidiary of the Company, filed a
         voluntary petition with the U. S. Bankruptcy Court for the Eastern
         District of New York to reorganize under Chapter 11 of the U. S.
         Bankruptcy Code. As of the date of this filing, the proceedings are
         still on-going. Neither Colonial, nor Universal Supply Group, Inc.
         ("Universal"), is part of the Chapter 11 filing. The business of
         Atlantic is today conducted by one employee whose sole function is to
         collect on accounts receivables for the benefit of Atlantic's
         creditors, and the Company does not believe that Atlantic will emerge
         from the reorganization with any value for the Company. The Company was
         authorized by its Board to carry out the Chapter 11 filing in December
         2001 and, since they no longer exercise significant influence



                                      -4-
<PAGE>



         over Atlantic's operations and financial activities as of December 31,
         2001, Atlantic has been unconsolidated in the Company's financial
         statements and its operations are being reported as "results from
         operations of discontinued segments." The Company's statements of
         operations and statements of cash flows for the three months ended
         March 31, 2001 include certain reclassifications in order to conform to
         this presentation.

         On November 21, 2002, the Company and Universal were released from
         their guarantees of the indebtedness (approximately $5,800,000) of
         Atlantic by Atlantic's lending bank, in return for the agreement by the
         Company and Universal to pay to the bank $2,500,000 as a five-year term
         loan under the Company's line of credit with the bank, or, if earlier,
         on demand by the bank.

         The Company's investment in Atlantic's common stock is being recognized
         at cost, $219,007 of guaranteed liabilities and $5,800,695 of
         guaranteed borrowings under a credit facility as of March 31, 2002. The
         Company has recognized liabilities of Atlantic only to the extent such
         liabilities are guaranteed by the Company because the Company believes
         that it is not responsible for any other liabilities of Atlantic as
         Atlantic's creditors will be able to look only to Atlantic's assets for
         recovery. The Company will continue to recognize the $219,007 of
         guaranteed liabilities of Atlantic until they are extinguished by
         Atlantic's bankruptcy proceedings or otherwise.

(3)      Intangible Assets
         -----------------

         Statement 142, "Goodwill and Other Intangible Assets," requires that
         goodwill and intangible assets with indefinite useful lives no longer
         be amortized, but rather will be tested for impairment at least
         annually. Statement 142 also requires that intangible assets with
         definite useful lives be amortized over their respective estimated
         useful lives to their estimated residual values and reviewed for
         impairment, in accordance with Statement No. 144, "Accounting for the
         Impairment of Long-Lived Assets." Upon adoption of Statement 142, the
         Company was required to perform an assessment of whether there is an
         indication that goodwill was impaired as of the date of adoption. To
         accomplish this, the Company had to identify its reporting units and
         determine the carrying value of each reporting unit by assigning the
         assets and liabilities, including the existing goodwill and intangible
         assets, to those reporting units as of the date of adoption. The
         Company adopted the provisions of Statement 142 effective January 1,
         2002 and, accordingly, has ceased the amortization of the goodwill
         acquired in the acquisition of Universal. Upon adoption, there was no
         indication of impairment for goodwill acquired in prior business
         combinations.

         As required by the adoption of Statement No. 142, the Company also
         reassessed the useful lives and residual values of all acquired
         intangible assets to make any necessary amortization period
         adjustments. Based upon that assessment, no




                                      -5-
<PAGE>


         adjustments were made to the amortization period of residual values of
         other intangible assets. The cost of other intangible assets are
         amortized on a straight-line basis over their respective lives.

         As of March 31, 2002 and December 31, 2001, the Company had intangible
         assets, subject to amortization of $231,667 and $236,467, respectively,
         and related accumulated amortization of $114,583 and $107,767,
         respectively, which pertained primarily to covenants not to compete.
         Amortization expense for intangible assets subject to amortization
         amounted to approximately $11,617 and $10,417 for the three months
         ended March 31, 2002 and 2001, respectively. The estimated aggregate
         amortization expense for each of the five succeeding years ending
         December 31, 2006 amounts to approximately $42,900, $41,700, $26,700,
         $11,700 and $5,800 in 2002, 2003, 2004, 2005 and 2006, respectively.

         As of March 31, 2002 and December 31, 2001, the Company had unamortized
         goodwill in the amount of $1,316,929.

         The following table shows the results of operations as if Statement 142
         was applied to prior period: For the three months ended March 31,

                                                           2002          2001
                                                         -------       --------
Net income (loss), as reported                        $  (189,264)       26,487
Deduct:  negative goodwill amortization, net                 --          (8,763)
                                                      -----------     ---------

Adjusted net income (loss)                               (189,264)       17,724
                                                      ===========     =========

Income (loss) per share:
Basic net income (loss), as reported                  $     (0.12)         0.02
Negative goodwill amortization, net                          --           (0.01)
                                                      -----------     ---------
Adjusted net income (loss)                            $     (0.12)        (0.01)
                                                      ===========     =========

Diluted net income (loss), as reported                $     (0.12)         0.02
Negative goodwill amortization, net                          --           (0.01)
                                                      -----------     ---------
Adjusted net income (loss)                            $     (0.12)         0.01
                                                      ===========     =========

(4)      Supplemental Cash Flow Information
         ----------------------------------

         The following is supplemental information relating to the consolidated
         statements of cash flows:
                                                       Three Months Ended
                                             March 31,2002       March 31, 2001

        Cash paid during the period for:
             Interest                          $  118,059         $  186,726
             Income taxes                      $    8,744         $    7,700





                                      -6-
<PAGE>


         During the three months ended March 31, 2001, the Company retired 15
         shares, of convertible preferred stock, which were converted to a
         similar number of common shares. No shares were retired during 2002.

(5)      Subsequent Events
         -----------------

         (a) Nasdaq

         The Company's shares were delisted from the Nasdaq SmallCap Market in
         June 2002 because (i) the Company failed to timely file its Form 10-Q
         for the fiscal quarter ended March 31, 2002 and its Form 10-K for 2001;
         (ii) the market value of its publicly held shares of common stock was
         less than the required $1 million, and (iii) the closing bid price of
         its common stock was less than $1 per share.

         (b) Goldman Acquisition

         In July 2002, Universal acquired certain accounts receivable, inventory
         and other accessories from Goldman Associates of New York, Inc.
         ("Goldman"), relating to Goldman's HVAC business in New Jersey and
         certain areas of New York, for $670,981, of which $100,000 was paid as
         an up front deposit in June 2002. $570,981 of the purchase price was
         allocated to the above listed assets at their estimated fair values.
         The remaining $100,000 was recorded as goodwill and will be tested
         annually for impairment under the provisions of Statement 142. Pro
         forma results of operations are not provided, as the information is not
         material to the consolidated financial statements.

         (c) Release Of Guarantees

         On November 21, 2002, the Company and Universal were released from
         their guarantees of the indebtedness (approximately $5,800,000) by
         Atlantic to Colonial's and Atlantic's lending bank, in return for the
         agreement by the Company and Universal to pay to the bank $2,500,000 as
         a five-year term loan under the Company's line of credit with the bank,
         or, if earlier, on demand by the bank. The $3,300,000 difference
         between the total amount guaranteed ($5,800,000) and the amount the
         Company and Universal agreed to pay ($2,500,000) is reflected in the
         Company's 2002 statement of operations as income from the operations of
         discontinued segments.

         (d)  Private Placement

         On July 16, 2003, the Company completed a private placement, pursuant
         to Regulation D of the Securities Exchange Act of 1933. The Company
         raised $240,600 through the issuance of 802,000 shares of Common Stock
         at $0.30 per share. The stock was sold to officers and directors of the
         Company and one private investor. The proceeds of the private placement
         will be used for general





                                      -7-
<PAGE>

         working capital purposes. The stock cannot be sold, transferred or
         otherwise disposed of, unless subsequently registered under the
         Securities Act of 1933 and applicable state securities or Blue Sky
         laws, or pursuant to an exemption from such registration, which is
         available at the time of desired sale, and will bear a legend to that
         effect.

         (e) RAL Acquisition

         On September 30, 2003, RAL Purchasing, Inc., a newly formed, wholly
         owned subsidiary of Colonial, purchased substantially all of the assets
         and certain liabilities of RAL Supply Group, Inc. ("RAL") for a price
         of $3,838,521. $2,447,061 of the purchase price was paid in cash to the
         seller at the time of purchase. The remaining $1,391,460 was in the
         form of liabilities assumed by RAL Purchasing, Inc. The cash paid at
         the time of purchase was funded as follows:

         Borrowings on Colonial's credit facility                   $  2,147,061
         5-Year unsecured notes issued by RAL
         Purchasing, Inc. to a third party,
                at annual rate of 9%                                $    300,000
                                                                    ------------
         Total outlay                                               $  2,447,061
                                                                    ============

         In connection with this acquisition, Colonial's limit on its credit
         facility was increased by $2,000,000 to $14,000,000. All borrowings
         under the credit facility are secured by substantially all of the
         assets of RAL and Universal. In addition, the 5-year notes are
         guaranteed by Universal.

         As a result of this acquisition, liabilities were assumed as follows:

         Fair value of assets acquired                              $  3,838,521
         Cash paid                                                  $  2,447,061
                                                                    ------------
         Fair value of liabilities assumed                          $  1,391,460
                                                                    ============

         RAL is a distributor of heating and cooling equipment and high-end
         plumbing fixtures with six locations, servicing Orange, Rockland,
         Ulster and Sullivan counties in New York. Four locations have
         showrooms. RAL's products are marketed primarily to contractors,
         consumers, builders and the commercial sector. Initial purchase price
         allocations are not yet available as the acquisition was recently
         completed. The results of operations of RAL will be included in the
         consolidated results from the date of acquisition.

(6)      Comprehensive Income (Loss)
         ---------------------------

         The Company has no items of other comprehensive income (loss);
         therefore, there is no difference between the Company's comprehensive
         income (loss) and net income (loss) for the periods presented.





                                      -8-
<PAGE>

(7)      Net Income (Loss) Per Common Share

         A reconciliation between the numerators and denominators of the basic
         and diluted income (loss) per common share is as follows:

                                              Three Months Ended March 31,
                                                 2002             2001
                                                 ----             ----
         Net (loss) income numerator         $  (189,264)         26,487
                                                 =======          ======
         Weighted average common
            shares (denominator for
            basic income per share)            1,603,760       1,601,600
         Effect of dilutive securities:
           Convertible preferred stock            --              --
           Employee stock options                 --              --
                                             -----------       ---------
         Weighted average common
            and potential common
            shares outstanding
            (denominator for diluted
            income per share)                  1,603,760       1,601,600
                                               =========       =========

         Basic (loss) income  per share      $     (0.12)      $    0.02
                                                   =====            ====

         Diluted (loss) income  per share    $     (0.12)      $    0.02
                                                   =====            ====

                  Employee stock options totaling 280,600 and 158,800 for the
         three months ended March 31, 2002 and 2001, respectively, were not
         included in the income per share calculation because their effect would
         have been anti-dilutive. Convertible preferred stock totaling 1,464,286
         and 1,466,446 for the three months ended March 31, 2002 and 2001,
         respectively, were not included in the net loss per share because their
         effect would have been anti-dilutive.

(8)      New Accounting Pronouncements
         ------------------------------

         In June 2001, the FASB issued Statement No. 143, "Accounting for Asset
         Retirement Obligations". Statement 143 addresses financial accounting
         and reporting for obligations associated with the retirement of
         tangible long-lived assets and the associated asset retirement costs.
         It applies to legal obligations associated with the retirement of
         long-lived assets that result from the acquisition, construction,
         development and (or) the normal operation of a long-lived asset, except
         for certain obligations of lessees. The Company is required to adopt
         Statement 143, on January 1, 2003. Adoption of Statement 143 did not
         have a material impact on the Company's consolidated operations or
         financial position.







                                      -9-
<PAGE>

         In July 2002, the FASB issued Statement No. 146, "Accounting for Costs
         Associated with Exit or Disposal Activities". Statement 146 will spread
         out the reporting of expenses related to restructurings initiated after
         2002, because commitment to a plan to exit an activity or dispose of
         long-lived assets will no longer be enough to record a liability for
         the anticipated costs. Instead, exit and disposal costs are to be
         recorded when they are "incurred" and can be measured at fair value,
         and they will subsequently adjust the recorded liability for changes in
         estimated cash flows. The Company is required to adopt the provisions
         of Statement 146 as of January 1, 2003. The Company adopted Statement
         146 on January 1, 2003. Adoption of Statement 146 did not have an
         impact on the Company's consolidated results of operations or its
         financial position.

         In December 2002, the FASB issued Statement No. 148, Accounting for
         Stock- Based Compensation-Transition and Disclosure. Statement No. 148
         provides alternative methods of transition for a voluntary change to
         the fair value method of accounting for stock-based employee
         compensation as originally provided by the FASB issued Statement No.
         123, Accounting for Stock-Based Compensation. Additionally, Statement
         No. 148 amends the disclosure requirements of Statement No. 123 in both
         annual and interim financial statements. The disclosure requirements
         have been adopted as of the period ended December 31, 2002. The Company
         intends to continue to apply the intrinsic value method of accounting
         for stock-based employee compensation. The adoption of this
         pronouncement will not have any impact on the Company's consolidated
         financial position or results of operations.

         In November 2002, the FASB issued FASB interpretation No. 45,
         "Guarantor's Accounting and Disclosure Requirements for Guarantees,
         Including Indirect Guarantees of Indebtedness of Others" ("FIN 45").
         FIN 45 requires that upon issuance of guarantee, a guarantor must
         recognize a liability for the fair value of an obligation assumed under
         a guarantee. FIN 45 also requires additional disclosures by a guarantor
         in its interim and annual financial statements about the obligations
         associated with guarantees issued. The recognition provisions of FIN 45
         will be effective for any guarantees that are issued or modified after
         December 31, 2002. The adoption of FIN 45 did not have an impact on the
         Company's consolidated financial statements.

         In January 2003, the FASB issued Interpretation No. 46 (FIN 46),
         "Consolidation of Variable Interest Entities, an interpretation of ARB
         No. 51". FIN 46 addresses the consolidation by business enterprises of
         variable interest entities, as defined in the Interpretation. FIN 46 is
         effective for all new variable interest entities created or acquired
         after January 31, 2003. For variable interest entities created or
         acquired prior to February 1, 2003, the provisions of FIN 46 must be
         applied for the first interim period beginning after June 15, 2003. The
         Company does not believe that the adoption of FIN 46 will have any
         impact on the Company's consolidated financial statements.





                                      -10-
<PAGE>

         In April 2003, the FASB issued Statement No. 149, "Amendment of
         Statement 133 on Derivative Instruments and Hedging Activities."
         Statement No. 149 amends and clarifies the accounting guidance on
         derivative instruments (including certain derivative instruments
         embedded in other contracts) and hedging activities that fall within
         the scope of Statement No. 133, "Accounting for Derivative Instruments
         and Hedging Activities." Statement No. 149 is effective for all
         contracts entered into or modified after June 30, 2003, with certain
         exceptions, and for hedging relationships designated after June 30,
         2003. The guidance is to be applied prospectively. The adoption of this
         pronouncement will not have any impact on the Company's financial
         position and results of operations.

         In May 2003, the FASB issued Statement No. 150, "Accounting for Certain
         Financial Instruments with Characteristics of both Liabilities and
         Equity." Statement No. 150 changes the accounting guidance for certain
         financial instruments that, under previous guidance, could be
         classified as equity or "mezzanine" equity by now requiring those
         instruments to be classified as liabilities (or assets in some
         circumstances) in the statement of financial position. Further,
         Statement No. 150 requires disclosure regarding the terms of those
         instruments and settlement alternatives. Statement No. 150 is generally
         effective for all financial instruments entered into or modified after
         May 31, 2002 and is otherwise effective at the beginning of the first
         interim period beginning after June 15, 2003. The adoption of this
         pronouncement will not have any impact on the Company's financial
         position and results of operations.

         In January 1, 2003 the Company adopted the FASB's Emerging Issue Task
         Force (EITF) Issue No. 02-16 "Accounting by a Reseller for Cash
         Consideration Received from a Vendor" ("EITF 02-16"). The consensus
         reached by the EITF addressed the accounting for "Cash Consideration"
         (which includes slotting fees, cooperative advertising payments, etc.).
         The consensus of the EITF establishes an overall presumption that the
         cash received from vendors is a reduction in the price of vendor's
         products and should be recognized accordingly as a reduction in the
         cost of sales at the time the related inventory is sold. Some
         consideration could be characterized as a reduction of expense if the
         cash received represents a reimbursement of specific, incremental,
         identifiable costs incurred by the retailer to sell the vendor's
         products. The Company is in the process of assessing the impact, if
         any, of adopting EITF 02-16.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

Forward-looking Statements

         This Report on Form 10-Q contains forward-looking statements relating
to such matters as anticipated financial performance and business prospects.
When used in this






                                      -11-
<PAGE>

Report, the words "anticipates," "expects," "believes," "may," "intends" and
similar expressions are intended to be among the statements that identify
forward-looking statements. From time to time, the Company may also publish
forward-looking statements. The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements. Forward-looking
statements involve risks and uncertainties, including, but not limited to, the
consummation of certain events referred to in this report, the ability to
continue as a going concern, the availability of financing, the impact of the
bankruptcy of Atlantic on a go-forward basis, technological changes, competitive
factors, maintaining customer and vendor relationships, inventory obsolescence
and availability, and other risks detailed in the Company's periodic filings
with the Securities and Exchange Commission, which could cause the Company's
actual results and experience to differ materially from the anticipated results
or other expectations expressed in the Company's forward-looking statements.

Results of Operations - Three Months Ended March 31, 2002 and 2001

         The Company reported a net loss of $189,264 for the first quarter of
2002, as compared to net income of $26,487 in the 2001 quarter, which includes
net income from discontinued operations of $314,525. The operations of Atlantic
Hardware & Supply Corporation ("Atlantic") were discontinued at December 31,
2001. The Company had a loss from continuing operations before taxes of $189,264
in the first quarter of 2002, compared with a loss of $362,138 in 2001.

         For the first quarter of 2001, the Company reported income from the
discontinued operations of Atlantic of $314,525. This income was primarily due
to an increase in sales at Atlantic of $2,761,692 (63.7%) due to the timing of
shipments.

         Net sales of continuing operations increased $626,750 due primarily to
the opening of a new branch in Pennsylvania and the expansion of the North
Brunswick location, as well as an overall increase in market penetration. Gross
margins on those sales remained steady at 30.6%. Selling, general and
administrative expenses was basically the same in both periods.

          Interest expense on continuing operations decreased $50,823 in the
2002 quarter due to improved collections, decreased prime rates and consignment
arrangements with certain suppliers.

         A tax benefit for the first quarter of 2002 was not recorded, as the
Company did not expect to be able to realize such a benefit by the end of 2002.
During the first quarter of 2001, the Company recorded a federal tax benefit of
$74,100 for their continuing operations.

Liquidity and Capital Resources

         As of March 31, 2002, the Company had $606,358 in cash and cash
equivalents








                                      -12-
<PAGE>

compared with $576,514 at December 31, 2001. Between December 31, 2001 and March
31, 2002, there were no material changes in obligations associated with
operating agreements, obligations to financial institutions and other long term
debt obligations.

         Cash flows provided by operations were $352,107 during the three months
ended March 31, 2002. Accounts receivable declined due to the fact that
Universal's sales are typically lower in the first quarter than in the prior
year's fourth quarter. The 2002 decline in accounts receivable was less than the
2001 decline, due to the fact that 2002 sales were higher. Accounts payable
increased due to extended payment terms with Universal's vendors. Accrued
liabilities decreased due primarily to less accrued payroll.

         Cash flows used in investing activities of $31,031 during the three
months ended March 31, 2002 were due to the purchase of property and equipment.

         The cash flows used in financing activities of $291,232 were for net
repayments made on the credit facility of $246,739, as well as net repayments on
notes payable of $44,493. This compares to the prior year when $816,783 of cash
flows were used for financing activities, of which $777,621 was used for net
repayments on the credit facility and $39,162 was used for net repayments on
notes payable.

         The net cash provided by discontinued operations during the three
months ended March 31, 2001 of $775,522 is made up of net cash provided by the
operations and liquidation of Atlantic of $1,378,932, offset by the cash used
for the disposal of Well-Bilt of $603,410.

         On January 28, 2002, Atlantic, a wholly-owned subsidiary of the
Company, filed a voluntary petition with the U. S. Bankruptcy Court for the
Eastern District of New York to reorganize under Chapter 11 of the U. S.
Bankruptcy Code. As of the date of this filing, the proceedings are still
on-going. Colonial and its other operations are not part of the Chapter 11
filing. The business of Atlantic is today conducted by one employee, whose sole
function is to collect on accounts receivables for the benefit of Atlantic's
creditors, and the Company does not believe that Atlantic will emerge from the
reorganization with any value for the Company.

         On November 21, 2002, the Company and Universal were released from
their guarantees of the indebtedness (approximately $5,800,000 by Atlantic to
Colonial's and Atlantic's lending bank, in return for the agreement by the
Company and Universal to pay to the bank $2,500,000 as a five-year term loan
under the Company's line of credit with the bank, or, if earlier, on demand by
the bank.

         At March 31, 2002, amounts outstanding under the credit facility were
$7,682,837, of which $520,000 represents amounts under a term loan, payable in
25 equal monthly installments of approximately $21,000. Although the term loan
is payable over 25 months, the Bank can demand payment at any time. As monthly
repayments are made on the term loan, the available line of credit portion of
the facility increases by the amount of the principal payment.







                                      -13-
<PAGE>


         The Company believes that the credit facility is sufficient to finance
its current operating needs.

         On September 30, 2003, Colonial, through its newly formed, wholly owned
subsidiary, RAL Purchasing, Inc., purchased substantially all of the assets and
certain liabilities of RAL Supply Group, Inc. ("RAL"). The purchase price of
$3,838,521 was in the form of $2,447,061 of cash paid to the seller at the time
of purchase with the remaining $1,391,460 in the form of liabilities assumed by
RAL Purchasing, Inc. The $2,447,061 of cash paid at the time of purchase was
funded by $2,147,061 of borrowings on the Company's credit facility and 5-year,
9% notes issued by RAL Purchasing, Inc. to a third party in the amount of
$300,000. The 5-year notes are guaranteed by Universal. Colonial's limit on its
credit facility was increased by $2,000,000 to $14,000,000, as a result of the
acquisition.

         The Company expects to meet its liquidity needs going forward through a
combination of cash from operations, amounts available under its credit facility
and the issuance of stock through a private placement. On July 16, 2003,
Colonial completed a private placement pursuant to Regulation D of the
Securities Exchange Act of 1933. Colonial raised $240,600 through the issuance
of 802,000 shares of Common Stock at $0.30 per share. The stock was sold to
officers and directors of the Company and one private investor. The proceeds of
the private placement will be used for general working capital purposes.

Recent Accounting Pronouncements

         In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement No. 143, "Accounting for Asset Retirement Obligations". Statement 143
addresses financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset retirement
costs. It applies to legal obligations associated with the retirement of
long-lived assets that result from the acquisition, construction, development
and (or) the normal operation of a long-lived asset, except for certain
obligations of lessees. The Company is required to adopt Statement 143, on
January 1, 2003. Adoption of Statement 143 did not have a material impact on the
Company's consolidated operations or financial position.

         In July 2002, the FASB issued Statement No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities". Statement 146 will spread out the
reporting of expenses related to restructurings initiated after 2002, because
commitment to a plan to exit an activity or dispose of long-lived assets will no
longer be enough to record a liability for the anticipated costs. Instead, exit
and disposal costs are to be recorded when they are "incurred" and can be
measured at fair value, and they will subsequently adjust the recorded liability
for changes in estimated cash flows. The Company adopted Statement 146 on
January 1, 2003. Adoption of Statement 146 did not have an impact on





                                      -14-
<PAGE>

the Company's consolidated results of operations or its financial position.

         In December 2002, the FASB issued Statement No. 148, "Accounting for
Stock- Based Compensation-Transition and Disclosure". Statement No. 148 provides
alternative methods of transition for a voluntary change to the fair value
method of accounting for stock-based employee compensation as originally
provided by the FASB issued Statement No. 123, Accounting for Stock-Based
Compensation. Additionally, Statement No. 148 amends the disclosure requirements
of Statement No. 123 in both annual and interim financial statements. The
disclosure requirements have been adopted as of the period ended December 31,
2002. The Company intends to continue to apply the intrinsic value method of
accounting for stock-based employee compensation. The adoption of this
pronouncement will not have any impact on the Company's consolidated financial
position or results of operations.

         In November 2002, the FASB issued FASB interpretation No. 45,
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others" ("FIN 45"). FIN 45 requires that
upon issuance of guarantee, a guarantor must recognize a liability for the fair
value of an obligation assumed under a guarantee. FIN 45 also requires
additional disclosures by a guarantor in its interim and annual financial
statements about the obligations associated with guarantees issued. The
recognition provisions of FIN 45 will be effective for any guarantees that are
issued or modified after December 31, 2002. The adoption of FIN 45 did not have
an impact on the Company's consolidated financial statements.

         In January 2003, the FASB issued Interpretation No. 46 (FIN 46),
"Consolidation of Variable Interest Entities, an interpretation of ARB No. 51".
FIN 46 addresses the consolidation by business enterprises of variable interest
entities, as defined in the Interpretation. FIN 46 is effective for all new
variable interest entities created or acquired after January 31, 2003. For
variable interest entities created or acquired prior to February 1, 2003, the
provisions of FIN 46 must be applied for the first interim period beginning
after June 15, 2003. The Company does not believe that the adoption of FIN 46
will have any impact on the Company's consolidated financial statements.

         In April 2003, the FASB issued Statement No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities." Statement No.
149 amends and clarifies the accounting guidance on derivative instruments
(including certain derivative instruments embedded in other contracts) and
hedging activities that fall within the scope of Statement No. 133, "Accounting
for Derivative Instruments and Hedging Activities." Statement No. 149 is
effective for all contracts entered into or modified after June 30, 2003, with
certain exceptions, and for hedging relationships designated after June 30,
2003. The guidance is to be applied prospectively. The adoption of this
pronouncement will not have any impact on the Company's financial position and
results of operations.

         In May 2003, the FASB issued Statement No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity."
Statement No.






                                      -15-
<PAGE>

150 changes the accounting guidance for certain financial instruments that,
under previous guidance, could be classified as equity or "mezzanine" equity by
now requiring those instruments to be classified as liabilities (or assets in
some circumstances) in the statement of financial position. Further, Statement
No. 150 requires disclosure regarding the terms of those instruments and
settlement alternatives. Statement No. 150 is generally effective for all
financial instruments entered into or modified after May 31, 2002 and is
otherwise effective at the beginning of the first interim period beginning after
June 15, 2003. The adoption of this pronouncement will not have any impact on
the Company's financial position and results of operations.

         In January 1, 2003 the Company adopted the FASB's Emerging Issue Task
Force (EITF) Issue No. 02-16 "Accounting by a Reseller for Cash Consideration
Received from a Vendor" ("EITF 02-16"). The consensus reached by the EITF
addressed the accounting for "Cash Consideration" (which includes slotting fees,
cooperative advertising payments, etc.). The consensus of the EITF establishes
an overall presumption that the cash received from vendors is a reduction in the
price of vendor's products and should be recognized accordingly as a reduction
in the cost of sales at the time the related inventory is sold. Some
consideration could be characterized as a reduction of expense if the cash
received represents a reimbursement of specific, incremental, identifiable costs
incurred by the retailer to sell the vendor's products. The Company is in the
process of assessing the impact, if any, of adopting EITF 02-16.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

         The Company's pre-tax earnings and cash flow are exposed to changes in
interest rates as borrowings under its credit facility bear interest at the
prime rate, plus 2%. A hypothetical 10% adverse change in such rates would
reduce pre-tax earnings and cash flow by approximately $52,000 over a one-year
period, assuming the borrowing level remains consistent with the outstanding
borrowings as of March 31, 2002. The fair value of the borrowings under the
credit facility is not affected by changes in market interest rates.

         The Company's remaining interest-bearing obligations are at fixed rates
of interest and as such do not expose pre-tax earnings and cash flows to changes
in market interest rates. The change in fair value of the Company's fixed rate
obligations resulting from a hypothetical 10% adverse change in interest rates
would not be material.

Item 4.  Controls and Procedures

(a)      Evaluation of Disclosure Controls and Procedures

         The Company's senior management is responsible for establishing and
maintaining a system of disclosure controls and procedures (as defined in Rule
13a-14







                                      -16-
<PAGE>

and 15d-14 under the Securities Exchange Act of 1934 (the "Exchange Act"))
designed to ensure that information required to be disclosed by the Company in
the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported as specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by an issuer in the reports that it files or submits
under the Act is accumulated and communicated to the issuer's management,
including its principal executive officer or officers and principal financial
officer or officers, or persons performing similar functions, as appropriate to
allow them to make informed decisions regarding required disclosure.

         The Company has evaluated the effectiveness of the design and operation
of its disclosure controls and procedures under the supervision of and with the
participation of management, including the Chief Executive Officer and Chief
Financial Officer within 90 days prior to the filing date of this report. Based
on that evaluation our Chief Executive Officer and Chief Financial Officer have
concluded that our disclosure controls and procedures are effective in alerting
them to material information required to be included in our periodic Securities
and Exchange Commission filings.

(b)      Changes in Internal Controls

         Subsequent to that evaluation, there have been no significant changes
in our internal controls or other factors that could significantly affect these
controls after such evaluation.

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

         On January 28, 2002, Atlantic, a wholly-owned subsidiary of the
Company, filed a voluntary petition with the U. S. Bankruptcy Court for the
Eastern District of New York to reorganize under Chapter 11 of the U. S.
Bankruptcy Code. As of the date of this filing, the proceedings are still
on-going. Colonial and its other operations are not part of the Chapter 11
filing. The business of Atlantic is today conducted by one employee, whose sole
function is to collect on accounts receivables for the benefit of Atlantic's
creditors, and the Company does not believe that Atlantic will emerge from the
reorganization with any value for the Company.

Item 6.  Exhibits and Reports on Form 8-K

         a. Exhibits:

           31.1     Certification of Chief Executive Officer Pursuant to Rule
                    15d-14 of the Securities and Exchange Act of 1934, as
                    amended, as Pursuant to Section 302 of the Sarbanes- Oxley
                    Act of 2002

           31.2     Certification of Chief Financial Officer Pursuant to Rule
                    15d-14 of the Securities and Exchange Act of 1934, as
                    amended, as Pursuant to Section 302 of the Sarbanes- Oxley
                    Act of 2002


                                      -17-




<PAGE>



           32-1     Certification of Chief Executive Officer Pursuant to 18
                    U.S.C. Section 1350, as adopted pursuant to Section 906 of
                    the Sarbanes-Oxley Act of 2002

           32-2     Certification of Chief Financial Officer Pursuant to 18
                    U.S.C. Section 1350, as adopted pursuant to Section 906 of
                    the Sarbanes-Oxley Act of 2002

         b. Reports on Form 8-K:

               None

                                   SIGNATURES

         Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

Dated:   November 14, 2003                 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












                                      -18-
<PAGE>