SOURCE: Coffee Holding Co., Inc.

Coffee Holding Co., Inc.

March 15, 2013 16:47 ET

Coffee Holding Co., Inc. Reports Results for the First Fiscal Quarter 2013

STATEN ISLAND, NY--(Marketwire - Mar 15, 2013) - Coffee Holding Co., Inc. ("Coffee Holding" or the "Company") (NASDAQ: JVA) today announced its operating results for the three months ended January 31, 2013.

"We are pleased with our results for the quarter. In the first fiscal quarter of 2012, we recorded record revenue of $56.6 million, which was more than 121% of the first fiscal quarter of 2011 revenue and well in excess of any previous fiscal first quarter and not consistent with our historical growth. We believe this year's level of sales of $31.3 million in the first fiscal quarter of 2013, while below the first fiscal quarter of 2012, is more normalized from a historical perspective. Excluding 2012, our revenue for the first quarter of 2013 well exceeded previous first fiscal quarter results. In the first fiscal quarters of 2011, 2010, 2009, and 2008, we had revenues of $25.6 million, $21.4 million, $18.9 million, $15.0 million, respectively. In addition, during this quarter our gross margins increased on a percentage basis from 7.9% to 11.8% reflecting our efforts to increase our profit margins which we believe will result in greater future profitability for the company. We also believe this is a successful result given the negative impact on our profitability attributable to our withdrawal of our investment in Global Mark during the quarter," noted Andrew Gordon, our President and CEO.

"We experienced growth in key areas compared to the first quarter of fiscal 2012, most importantly on the branded and private label sides of the business. We believe it is the growth in these two areas that will ultimately enable us to achieve the targeted annualized gross profit level of nine percent for our 2013 fiscal year. A more favorable revenue mix is the first step for overall increased margins. We also believe coffee prices will rebound in the second half of 2013, helping to improve both our revenues and profits on the sales of wholesale green coffee. We anticipate a more normalized growth pattern on a going forward basis, while we remain focused on margin expansion and new business opportunities," stated Mr. Gordon.

Results of Operations

The Company had net income of $937,537, or $0.15 per share basic and $0.14 diluted, for the three months ended January 31, 2013 compared to net income of $1,578,345 or $0.25 per share basic and $0.24 diluted, for the three months ended January 31, 2012. The decrease in net income primarily reflects lower sales for the period year over year and the write off involving the Company's investment in Global Mark partially offset by higher gross margins of 11.8% during the three month period.

Net sales totaled $31,318,804 for the three months ended January 31, 2013, a decrease of $25,282,880, or 44.7%, from $56,601,684 for the three months ended January 31, 2012. The decrease in net sales primarily reflects lower coffee prices as well as reduced volumes of wholesale green coffee sales during the three month period.

Cost of sales for the three months ended January 31, 2013 was $27,636,207 or 88.2% of net sales, as compared to $52,151,940 or 92.1% of net sales for the three months ended January 31, 2012. The decrease in cost of sales reflects a shift in our overall business to a higher percentage of roasted coffee sales which tend to be more profitable on a percentage basis than our green coffee.

Total operating expenses increased by $65,686, or 3.6%, to $1,895,178 for the three months ended January 31, 2013 as compared to operating expenses of $1,829,492 for the three months ended January 31, 2012. The increase in operating expenses was due to increases in selling and administrative expense of $82,907 partially offset by a decrease in officers' salaries of $17,221.

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 throughout 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. We have based these forward-looking statements upon information available to management as of the date of this release and management's expectations and projections about certain future events. 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, coffee prices, pricing of our products, 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, 2013 AND OCTOBER 31, 2012  
   
    January 31,
2013
    October 31,
2012
 
    (unaudited)        
- ASSETS -  
CURRENT ASSETS:                
Cash   $ 8,271,965     $ 7,568,583  
Accounts receivable, net of allowances of $213,674 for 2013 and 2012     10,223,591       12,633,128  
Inventories     10,241,463       11,303,581  
Prepaid green coffee     205,000       150,000  
Prepaid expenses and other current assets     650,455       704,013  
Prepaid and refundable income taxes     52,106       62,763  
Deferred income tax asset     477,443       702,655  
TOTAL CURRENT ASSETS     30,122,023       33,124,723  
Machinery and equipment, at cost, net of accumulated depreciation of $2,747,212 and $2,631,468 for 2013 and 2012, respectively     1,744,407       1,791,754  
Customer list and relationships, net of accumulated amortization of $20,625 and $18,750 for 2013 and 2012, respectively     129,375       131,250  
Trademarks     180,000       180,000  
Goodwill     440,000       440,000  
Equity method investments     99,522       1,931,931  
Deposits and other assets     648,385       648,094  
TOTAL ASSETS   $ 33,363,712     $ 38,247,752  
- LIABILITIES AND STOCKHOLDERS' EQUITY -                
CURRENT LIABILITIES:                
Accounts payable and accrued expenses   $ 6,260,622     $ 11,769,107  
Line of credit     953,571       562,500  
Due to broker     913,507       1,367,389  
Income taxes payable     96,115       21,122  
TOTAL CURRENT LIABILITIES     8,223,815       13,720,118  
                 
Deferred income tax liabilities     9,443       32,655  
Deferred rent payable     170,680       166,668  
Deferred compensation payable     530,851       528,687  
TOTAL LIABILITIES     8,934,789       14,448,128  
STOCKHOLDERS' EQUITY:                
Coffee Holding Co., Inc. stockholders' equity:                
Preferred stock, par value $.001 per share; 10,000,000 shares authorized; 0 issued     -       -  
Common stock, par value $.001 per share; 30,000,000 shares authorized, 6,456,316 shares issued; 6,372,309 shares outstanding for 2013 and 2012     6,456       6,456  
Additional paid-in capital     15,904,109       15,904,109  
Retained earnings     8,529,405       7,979,247  
Less: Treasury stock, 84,007 common shares, at cost for 2013 and 2012     (272,133 )     (272,133 )
Total Coffee Holding Co., Inc. Stockholders' Equity     24,167,837       23,617,679  
Noncontrolling interest     261,086       181,945  
TOTAL EQUITY     24,428,923       23,799,624  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 33,363,712     $ 38,247,752  
                 
                 
                 
COFFEE HOLDING CO., INC.  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME  
THREE MONTHS ENDED JANUARY 31, 2013 AND 2012  
(Unaudited)  
   
    2013     2012  
                 
NET SALES   $ 31,318,804     $ 56,601,684  
                 
COST OF SALES (which includes purchases of approximately $9.7 million and $10.5 million for the three months ended January 31, 2013 and 2012, respectively from a related party)     27,636,207       52,151,940  
                 
GROSS PROFIT     3,682,597       4,449,744  
                 
OPERATING EXPENSES:                
Selling and administrative     1,765,241       1,682,334  
Officers' salaries     129,937       147,158  
TOTAL     1,895,178       1,829,492  
                 
INCOME FROM OPERATIONS     1,787,419       2,620,252  
                 
OTHER INCOME (EXPENSE):                
Interest income     7,579       13,884  
Loss from equity method investments     (104,437 )     (20,137 )
Interest expense     (38,399 )     (65,730 )
TOTAL     (135,257 )     (71,983 )
                 
INCOME BEFORE PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST IN SUBSIDIARY     1,652,162       2,548,269  
                 
Provision for income taxes     635,484       962,900  
                 
                 
NET INCOME BEFORE NONCONTROLLING INTEREST IN SUBSIDIARY     1,016,678       1,585,369  
Less: Net income attributable to the noncontrolling interest     (79,141 )     (7,024 )
                 
NET INCOME ATTRIBUTABLE TO COFFEE HOLDING CO., INC.   $ 937,537     $ 1,578,345  
                 
Basic earnings per share   $ .15     $ .25  
                 
Diluted earnings per share   $ .14     $ .24  
                 
Dividends declared per share   $ .06     $ .03  
                 
Weighted average common shares outstanding:                
Basic     6,372,309       6,372,309  
Diluted     6,639,309       6,644,309  
                 
                 
                 
COFFEE HOLDING CO., INC.  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
THREE MONTHS ENDED JANUARY 31, 2013 AND 2012  
(Unaudited)  
   
    2013     2012  
OPERATING ACTIVITIES:                
Net income   $ 1,016,678     $ 1,585,369  
Adjustments to reconcile net income to net cash provided by operating activities:                
Depreciation and amortization     117,616       112,693  
Unrealized gain on commodities     (453,882 )     (1,577,294 )
Loss on equity method investment     380       20,137  
Loss on disposition of equity method investment     104,057       -  
Deferred rent     4,012       4,937  
Deferred income taxes     202,000       599,000  
Changes in operating assets and liabilities:                
Accounts receivable     2,409,537       (1,937,860 )
Inventories     1,565,618       1,497,745  
Prepaid expenses and other current assets     53,558       43,768  
Prepaid green coffee     (55,000 )     152,036  
Prepaid and refundable income taxes     10,657       267,757  
Accounts payable and accrued expenses     (4,516,084 )     2,781,754  
Deposits and other assets     1,873       4,873  
Income taxes payable     74,993       35,918  
Net cash provided by operating activities     536,013       3,590,833  
                 
INVESTING ACTIVITIES:                
Purchase of equity method investment     -       (200,000 )
Proceeds from disposition of equity method investment     232,069       -  
Purchases of machinery and equipment     (68,394 )     (54,590 )
Net cash provided by (used in) investing activities     163,675       (254,590 )
                 
FINANCING ACTIVITIES:                
Advances under bank line of credit     3,441,192       48,525,026  
Principal payments under bank line of credit     (3,050,121 )     (48,549,137 )
Payment of dividend     (387,377 )     (193,689 )
Net cash provided by (used in) financing activities     3,694       (217,800 )
                 
                 
NET INCREASE IN CASH     703,382       3,118,443  
                 
CASH, BEGINNING OF PERIOD     7,568,583       4,244,335  
                 
CASH, END OF PERIOD   $ 8,271,965     $ 7,362,778  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:                
Interest paid   $ 41,191     $ 71,340  
Income taxes paid   $ 347,834     $ 60,225  
                 
                 
                 
COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JANUARY 31, 2013 AND 2012
(Unaudited)
 
Schedule of noncash investing and financing activities:
 
Proceeds from disposition of equity method investment:
 
    2013   2012
             
Inventory received   $ 503,500   $ -
Settlement of accounts payable     992,402     -
Total noncash proceeds   $ 1,495,902   $ -
             
             
             

Contact Information

  • CONTACT:
    Coffee Holding Co., Inc.
    Andrew Gordon
    President & CEO
    (718) 832-0800