SOURCE: Coffee Holding Co., Inc.

March 19, 2007 09:07 ET

Coffee Holding Co., Inc. Reports First Quarter Earnings

BROOKLYN, NY -- (MARKET WIRE) -- March 19, 2007 -- Coffee Holding Co., Inc. (AMEX: JVA) today announced its operating results for the three months ended January 31, 2007. In this release, the Company:

--  Reports net sales of $12,635,112 for the three months ended January
    31, 2007;
    
--  Reports net income of $309,684 for the three months ended January 31,
    2007; and
    
--  Reports net income of $0.06 per share (basic and diluted) for the
    three months ended January 31, 2007.
    
Net income was $309,684, or $.06 per share (basic and diluted), for the three months ended January 31, 2007 compared to net income of $519,638, or $.09 per share (basic and diluted), for the three months ended January 31, 2006. The decrease primarily reflects losses related to our Café La Rica joint venture, including a $63,939 equity loss, a $33,000 writedown in the investment in the joint venture and a $242,000 writedown in amounts due from the joint venture. These losses reduced our net income by $338,939, or $0.04 per share, for the three months ended January 31, 2007.

"An overall strong quarter was tarnished once again by the disappointing situation with our Florida joint venture," said Andrew Gordon, President and Chief Executive Officer. "As a result, we have chosen to dissolve the joint venture and must now attempt to recoup our assets. However, once this problem is resolved, we will explore other avenues to build our Florida and southeast business base."

About Coffee Holding

Coffee Holding is a leading integrated wholesale coffee roaster and dealer in the United States and one of the few coffee companies that offers a broad array of coffee products across the entire spectrum of consumer tastes, preferences and price points. Coffee Holding has been a family operated business for three generations and has remained profitable through varying cycles in the coffee industry and the economy. The Company's private label and branded coffee products are sold through the United States, Canada and abroad to supermarkets, wholesalers, and individually owned and multi unit retail customers.

Any statements that are not historical facts contained in this release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. It is possible that the assumptions made by management for purposes of such statements may not materialize. Actual results may differ materially from those projected or implied in any forward-looking statements. Such statements may involve risks and uncertainties, including but not limited to those relating to product demand, pricing, market acceptance, the effect of economic conditions, intellectual property rights, the outcome of competitive products, risks in product development, the results of financing efforts, the ability to complete transactions, and other factors discussed from time to time in the Company's Securities and Exchange Commission filings. The Company undertakes no obligation to update or revise any forward-looking statement for events or circumstances after the date on which such statement is made.

                         COFFEE HOLDING CO., INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                  JANUARY 31, 2007 AND OCTOBER 31, 2006


                                                  January 31,   October 31,
                                                      2007         2006
                                                  ------------ ------------
                                                  (unaudited)
                              - ASSETS -
CURRENT ASSETS:
   Cash                                           $  1,827,523 $  1,112,165
   Commodities held at broker                        2,954,528    4,330,489
   Accounts receivable, net of allowance for
    doubtful accounts of $420,349 for 2007 and
    2006, respectively                               4,343,394    6,534,848
   Inventories                                       3,461,025    2,899,543
   Prepaid expenses and other current assets           244,182      328,544
   Prepaid and refundable taxes                         45,331      302,003
   Deferred tax asset                                  442,000      221,000
                                                  ------------ ------------

TOTAL CURRENT ASSETS                                13,317,983   15,728,592

Property and equipment, at cost, net of
 accumulated depreciation of $4,219,039 and
 $4,159,274 for 2007 and 2006, respectively          2,170,413    2,138,951
Investment in joint venture                            311,858      408,798
Due from joint venture, less reserve of $242,000       289,890       73,658
Deposits and other assets                              803,019      631,859
                                                  ------------ ------------
      TOTAL ASSETS                                $ 16,893,163 $ 18,981,858
                                                  ============ ============

       - LIABILITIES AND STOCKHOLDERS' EQUITY -
CURRENT LIABILITIES:
   Accounts payable and accrued expenses          $  3,961,239 $  4,828,689
   Line of credit borrowings                           985,219    2,542,881
                                                  ------------ ------------

TOTAL CURRENT LIABILITIES                            4,939,630    7,371,570

Deferred income tax liabilities                          4,100       12,300
Deferred compensation payable                          291,217      256,284
                                                  ------------ ------------

TOTAL LIABILITIES                                    5,241,775    7,640,154
                                                  ------------ ------------

MINORITY INTEREST                                            -            -

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
   Preferred stock, par value $.001 per share;
    10,000,000 shares authorized; none issued                -            -
   Common stock, par value $.001 per share;
    30,000,000 shares authorized, 5,529,830
    shares issued and outstanding for 2007 and
    2006                                                 5,530        5,530
   Additional paid-in capital                        7,327,023    7,327,023
   Retained earnings                                 4,318,835    4,009,151
                                                  ------------ ------------

TOTAL STOCKHOLDERS' EQUITY                          11,651,388   11,341,704
                                                  ------------ ------------
      TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $ 16,893,163 $ 18,981,858
                                                  ============ ============




                         COFFEE HOLDING CO., INC.
                CONDENSED CONSOLIDATED STATEMENTS OF INCOME
               THREE MONTHS ENDED JANUARY 31, 2007 AND 2006
                                (Unaudited)



                                                 2007            2006
                                             -------------   -------------
NET SALES                                    $  12,635,112   $  13,844,845

COST OF SALES                                   10,466,517      11,519,402
                                             -------------   -------------

GROSS PROFIT                                     2,168,595       2,325,443
                                             -------------   -------------

OPERATING EXPENSES:
  Selling and administrative                     1,390,690       1,282,837
  Writedown of amount due from joint venture       242,000               -
  Officers’ salaries                               117,012         135,975
                                             -------------   -------------
TOTALS                                           1,749,702       1,418,812
                                             -------------   -------------

INCOME FROM OPERATIONS                             418,893         906,631
                                             -------------   -------------

OTHER INCOME (EXPENSE)
  Interest income                                   34,116          30,566
  Equity in loss of joint venture                  (63,939)              -
  Writedown of investment in joint venture         (33,000)              -
  Management fee income                             12,026               -
  Interest expense                                 (24,232)        (15,459)
                                             -------------   -------------
                                                   (75,029)         15,107
                                             -------------   -------------

INCOME BEFORE INCOME TAXES AND MINORITY
 INTEREST  IN SUBSIDIARY                           343,864         921,738

  Provision for income taxes                        37,850         402,100
                                             -------------   -------------

INCOME BEFORE MINORITY INTEREST                    306,014               -

  Minority interest in subsidiary                    3,670               -
                                             -------------   -------------

NET INCOME                                   $     309,684   $     519,638
                                             =============   =============

Basic and diluted earnings per share         $         .06   $         .09
                                             =============   =============

Weighted average common shares outstanding:
  Basic                                          5,529,830       5,529,830
                                             =============   =============
  Diluted                                        5,599,830       5,593,250
                                             =============   =============




                        COFFEE HOLDING CO., INC.
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               THREE MONTHS ENDED JANUARY 31, 2007 AND 2006
                                (Unaudited)



                                                      2007         2006
                                                  -----------  -----------
OPERATING ACTIVITIES:
  Net income                                      $   309,684  $   519,638
  Adjustments to reconcile net income to net cash
   provided by (used in) operating activities:
     Depreciation and amortization                     60,630      112,817
     Writedown of amount due from joint venture       242,000            -
     Loss from joint venture                           63,939            -
     Writedown of investment in joint venture          33,000            -
     Deferred taxes                                  (229,200)      29,300
  Changes in operating assets and liabilities:
     Commodities held at broker                     1,375,961      321,531
     Accounts receivable                            1,916,454      754,940
     Inventories                                     (561,482)   1,039,687
     Prepaid expenses and other assets                 84,362      (64,734)
     Prepaid and refundable income taxes              256,672            -
     Accounts payable and accrued expenses           (867,450)  (1,038,711)
     Deferred compensation payable                          -       33,981
     Due from joint venture                          (183,232)           -
     Deposits and other assets                       (136,227)           -
     Income taxes payable                                   -       69,250
                                                  -----------  -----------

Net cash provided by operating activities           2,365,111    1,777,699
                                                  -----------  -----------

INVESTING ACTIVITIES:
  Purchases of property and equipment                 (92,091)     (74,196)
                                                  -----------  -----------

Net cash (used in) investing activities               (92,091)     (74,196)
                                                  -----------  -----------

FINANCING ACTIVITIES:
  Advances under bank line of credit               11,103,226   10,317,070
  Principal payments under bank line of credit    (12,660,888) (10,909,112)
  Principal payments of obligations under capital
   leases                                                   -       (1,329)
                                                  -----------  -----------

Net cash used in financing activities              (1,557,662)    (593,371)
                                                  -----------  -----------


NET INCREASE IN CASH                                  715,358    1,110,132

  Cash, beginning of year                           1,112,165      735,468
                                                  -----------  -----------

CASH, END OF PERIOD                               $ 1,827,523  $ 1,845,600
                                                  ===========  ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:
  Interest paid                                   $    18,642  $    13,176
                                                  ===========  ===========
  Income taxes paid                               $     3,550  $   299,321
                                                  ===========  ===========

Contact Information

  • Contact:
    Andrew Gordon
    President & CEO
    Telephone: (718) 832-0800