SOURCE: Coffee Holding Co., Inc.

Coffee Holding Co., Inc.

March 14, 2014 09:00 ET

Coffee Holding Co., Inc. Reports Results for Three Months Ended January 31, 2014

STATEN ISLAND, NY--(Marketwired - Mar 14, 2014) - Coffee Holding Co., Inc. (NASDAQ: JVA) today announced its operating results for the three months ended January 31, 2014:

The Company reported net income of $1,371,740, or $0.22 per share basic and $0.21 per share diluted, for the three months ended January 31, 2014 compared to net income of $937,537 or $0.15 per share basic and $0.14 per share diluted, for the three months ended January 31, 2013. The increase in net income reflects increased profitability on our sales.

Net sales totaled $27,346,347 for the three months ended January 31, 2014, a decrease of $3,972,457, or 13%, from $31,318,804 for the three months ended January 31, 2013. The decrease in net sales reflects lower coffee prices as coffee prices continued to decrease on an unabated slide to a seven year low during the same period, partially offset by a 13.7% increase in pounds of green coffee sold as our business continued to shift to sales of green coffee from private label sales.

Cost of sales for the three months ended January 31, 2014 was $23,227,722 or 84.9% of net sales, as compared to $27,636,207 or 88.2% of net sales for the three months ended January 31, 2013. The decrease in cost of sales reflects lower prices paid for green coffee during this period compared to the same period during 2013.

Gross profit increased $436,028 to $4,118,625 for the three months ended January 31, 2014 as compared to gross profit of $3,682,597 for the three months ended January 31, 2013. Gross profit as a percentage of net sales increased by 3.3% for the three months ended January 31, 2014, as compared to gross profit as a percentage of net sales for the three months ended January 31, 2013. The increase in our margins primarily reflects unrealized gains in our hedging activities and lower prices paid for green coffee during this period compared to the same period during 2013.

Total operating expenses decreased by $25,466, or 1.3%, to $1,869,712 for the three months ended January 31, 2014 as compared to operating expenses of $1,895,178 for the three months ended January 31, 2013. The decrease in operating expenses was due to a decrease in selling and administrative expenses of $54,629, partially offset by an increase in officers' salaries of $29,163.

"We are extremely pleased to report these positive results to our shareholders. Although coffee prices remained stalled at depressed levels during this period resulting in a 13% decline in revenues, this was offset by a 13.7% increase in poundage sold during the same period. With coffee prices now on the rise again, we believe the combination of higher commodity prices along with continued growth in our overall business should result in increased revenues. Our commitment to margin improvement was evidenced by this quarter's earnings and we will remain focused on continuing these results going forward," said Andrew Gordon, President and Chief Executive Officer.

"Our business continues to remain robust as we have achieved growth in all three major areas: wholesale green coffee sales, branded and private label sales. With the recent increase in the price of green coffee, we expect that these trends will continue to improve due to our position in the marketplace. As we stated in our comments with our 2013 annual results, we believe our recent problems are behind us and we thank our fellow shareholders for their continued patience and support," concluded Mr. Gordon.

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, including the Company's outlook on future margin performance and its share repurchase program. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. 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. Such statements may involve risks and uncertainties, including but not limited to those relating to product demand, pricing, hedging activities, 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. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JANUARY 31, 2014 AND OCTOBER 31, 2013
 
    January 31,
2014
    October 31,
 2013
 
             
- ASSETS -  
CURRENT ASSETS:            
Cash   $ 4,532,936     $ 4,035,669  
Accounts receivable, net of allowances of $144,000 for 2014 and 2013     10,037,140       12,362,792  
Inventories     8,966,557       9,373,018  
Prepaid green coffee     620,960       439,290  
Prepaid expenses and other current assets     429,083       336,494  
Prepaid and refundable income taxes     592,613       1,000,317  
Deferred income tax asset     906,606       1,330,666  
TOTAL CURRENT ASSETS     26,085,895       28,878,246  
                 
Machinery and equipment, at cost, net of accumulated depreciation of $3,277,275 and $3,130,902 for 2014 and 2013, respectively     2,037,851       2,060,350  
Customer list and relationships, net of accumulated amortization of $28,125 and $26,250 for 2014 and 2013, respectively     121,875       123,750  
Trademarks     180,000       180,000  
Goodwill     440,000       440,000  
Equity method investments     97,996       98,178  
Deposits and other assets     618,511       618,498  
TOTAL ASSETS   $ 29,582,128     $ 32,399,022  
                 
- LIABILITIES AND STOCKHOLDERS' EQUITY -  
CURRENT LIABILITIES:                
Accounts payable and accrued expenses   $ 5,240,419     $ 7,244,822  
Line of credit     -       1,229,182  
Due to broker     -       984,040  
Income taxes payable     200       -  
TOTAL CURRENT LIABILITIES     5,240,619       9,458,044  
                 
Deferred income tax liabilities     135,706       145,666  
Deferred rent payable     200,329       195,452  
Deferred compensation payable     515,511       515,498  
TOTAL LIABILITIES     6,092,165       10,314,660  
STOCKHOLDERS' EQUITY:                
Coffee Holding Co., Inc. stockholders' equity:                
  Preferred stock, par value $.001 per share; 10,000,000 shares authorized; no shares issued and outstanding     -       -  
  Common stock, par value $.001 per share; 30,000,000 shares authorized, 6,456,316 shares issued; 6,372,309 shares outstanding for 2014 and 2013     6,456       6,456  
  Additional paid-in capital     15,904,109       15,904,109  
  Retained earnings     7,483,373       6,111,633  
  Less: Treasury stock, 84,007 common shares, at cost for 2014 and 2013     (272,133 )     (272,133 )
    Total Coffee Holding Co., Inc. Stockholders' Equity     23,121,805       21,750,065  
Noncontrolling interest     368,158       334,297  
    TOTAL EQUITY     23,489,963       22,084,362  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 29,582,128     $ 32,399,022  
                 
                 
 
 
COFFEE HOLDING CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JANUARY 31, 2014 AND 2013
 
    January 31, 2014     January 31, 2013  
NET SALES   $ 27,346,347     $ 31,318,804  
                 
COST OF SALES (which include purchases of approximately $5.0 million and $9.7 million for the three months ended January 31, 2014 and 2013, respectively, from a related party)     23,227,722       27,636,207  
                 
GROSS PROFIT     4,118,625       3,682,597  
                 
OPERATING EXPENSES:                
  Selling and administrative     1,710,612       1,765,241  
  Officers' salaries     159,100       129,937  
TOTAL     1,869,712       1,895,178  
                 
INCOME FROM OPERATIONS     2,248,913       1,787,419  
                 
OTHER INCOME (EXPENSE):                
  Interest income     883       7,579  
  Loss from equity method investments     (182 )     (104,437 )
  Interest expense     (18,088 )     (38,399 )
TOTAL     (17,387 )     (135,257 )
                 
INCOME BEFORE PROVISION FOR INCOME TAXES AND                
NON-CONTROLLING INTEREST IN SUBSIDIARY     2,231,526       1,652,162  
                 
  Provision for income taxes     825,925       635,484  
                 
NET INCOME BEFORE NON-CONTROLLING INTEREST IN SUBSIDIARY     1,405,601       1,016,678  
  Less: net income attributable to the non-controlling interest in subsidiary     (33,861 )     (79,141 )
                 
NET INCOME ATTRIBUTABLE TO COFFEE HOLDING CO., INC.   $ 1,371,740     $ 937,537  
                 
                 
Basic earnings per share   $ 0.22     $ 0.15  
                 
Diluted earnings per share   $ 0.21     $ 0.14  
                 
Dividends declared per share   $ 0.0     $ 0.06  
                 
                 
Weighted average common shares outstanding:                
  Basic     6,372,309       6,372,309  
  Diluted     6,639,309       6,639,309  
                   
                   
 
 
COFFEE HOLDING CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JANUARY 31, 2014 AND 2013
 
    January 31,
2014
  January 31,
2013
 
OPERATING ACTIVITIES:          
Net income   $ 1,405,601   $ 1,016,678  
Adjustments to reconcile net income to net cash provided by operating activities:              
Depreciation and amortization     148,248     117,616  
Unrealized (gain) on commodities     (1,179,594 )   (453,882 )
Loss on equity method investments     182     104,437  
Deferred rent     4,877     4,012  
Deferred income taxes     414,100     202,000  
Changes in operating assets and liabilities:              
Accounts receivable     2,325,651     2,409,537  
Inventories     406,461     1,565,618  
Prepaid expenses and other current assets     102,965     53,558  
Prepaid green coffee     (181,670 )   (55,000 )
Prepaid and refundable income taxes     407,704     10,657  
Accounts payable and accrued expenses     (2,004,402 )   (4,516,084 )
Deposits and other assets     -     1,873  
Income taxes payable     200     74,993  
Net cash provided by operating activities     1,850,323     536,013  
               
INVESTING ACTIVITIES:              
Proceeds from disposition of equity method investment     -     232,069  
Purchases of machinery and equipment     (123,874 )   (68,394 )
Net cash (used in) provided by investing activities     (123,874 )   163,675  
               
FINANCING ACTIVITIES:              
  Advances under bank line of credit     40,202     3,441,192  
  Principal payments under bank line of credit     (1,269,384 )   (3,050,121 )
  Payment of dividend     -     (387,377 )
Net cash (used in) provided by financing activities     (1,229,182 )   3,694  
               
NET INCREASE IN CASH     497,267     703,382  
               
CASH, BEGINNING OF PERIOD     4,035,669     7,568,583  
               
CASH, END OF PERIOD   $ 4,532,936   $ 8,271,965  
    2014   2013
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:        
  Interest paid   $ 21,225   $ 41,191
  Income taxes paid   $ 5,089   $ 347,834
               
               
 
 
COFFEE HOLDING CO., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JANUARY 31, 2014 AND 2013
 
Schedule of noncash investing and financing activities:
 
Proceeds from disposition of equity method investment:
    2014   2013
         
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