SOURCE: Coffee Holding Co., Inc.

June 14, 2007 09:00 ET

Coffee Holding Co., Inc. Reports Second Quarter and Six Month Earnings

BROOKLYN, NY--(Marketwire - June 14, 2007) - Coffee Holding Co., Inc. (AMEX: JVA) today announced its operating results for the three and six months ended April 30, 2007. In this release, the Company:

-- Reports sales growth of 18.2% for the quarter;

-- Reports a $623,122 increase in net income for the quarter; and

-- Reports net income of $0.06 per share for the quarter.
Net income equaled $338,888, or $.06 per share (basic and diluted), for the three months ended April 30, 2007 compared to a net loss of $284,234, or ($0.05) per share (basic and diluted), for the three months ended April 30, 2006. Net income equaled $648,592, or $.12 per share (basic and diluted), for the six months ended April 30, 2007 compared to net income of $235,404, or $0.04 per share (basic and diluted), for the six months ended April 30, 2006. The increase primarily reflects increased gross profit and was partially offset by increased operating expenses.

Net sales totaled $14,194,373 for the three months ended April 30, 2007, an increase of $2,183,445 or 18.2% from $12,010,928 for the three months ended April 30, 2006. Net sales totaled $26,829,485 for the six months ended April 30, 2007, an increase of $973,712 or 3.8% from $25,855,773 for the six months ended April 30, 2006. The increase in green coffee sales reflects higher sales of green coffee and private label coffee compared to the second quarter of fiscal year 2006.

"We are obviously pleased with our results for the quarter as operating margins returned to more historical levels. The price increases implemented at the beginning of 2007 were crucial in achieving these historical margins along with a favorable position in the green coffee markets were keys to a profitable quarter," said Andrew Gordon, President and Chief Executive Officer.

"I am always pleased when we are able to grow our business at the rate we have (18.8% for the quarter) while maintaining normal operating margins. In doing so, we continue to meet the challenges of an ever increasing volatile economic environment and we hope to keep to improving our margins while growing our sales over the balance of fiscal 2007. With some exciting new business on the West Coast as well as our first substantial business with our Joint Venture - Generations Coffee Co. to begin in the immediate future, we believe our goals will be achievable."

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
                    APRIL 30, 2007 AND OCTOBER 31, 2006


                                                    April 30,   October 31,
                                                      2007         2006
                                                  ------------ ------------
                                                   (unaudited)
                               - ASSETS -
CURRENT ASSETS:
   Cash                                           $  1,677,825 $  1,112,165
   Commodities held at broker                        3,428,114    4,330,489
   Accounts receivable, net of allowance for
    doubtful accounts of $420,349 for 2007 and
    2006                                             4,589,560    6,534,848
   Inventories                                       3,938,672    2,899,543
   Prepaid expenses and other current assets           744,693      328,544
   Prepaid and refundable taxes                          6,710      302,003
   Deferred tax asset                                  452,000      221,000
                                                  ------------ ------------
TOTAL CURRENT ASSETS                                14,837,574   15,728,592

Property and equipment, at cost, net of
 accumulated depreciation of $4,317,727 and
 $4,159,274 for 2007 and 2006, respectively          2,458,544    2,138,951
Investment in joint venture                            281,858      408,798
Due from joint venture, less reserve of $242,000
 for 2007                                              220,030       73,658
Deposits and other assets                              349,335      631,859
                                                  ------------ ------------
      TOTAL ASSETS                                $ 18,147,341 $ 18,981,858
                                                  ============ ============

               - LIABILITIES AND STOCKHOLDERS' EQUITY -
CURRENT LIABILITIES:
   Accounts payable and accrued expenses          $  4,052,468 $  4,828,689
   Income taxes payable                                 74,707            -
   Line of credit borrowings                         1,703,952    2,542,881
                                                  ------------ ------------
TOTAL CURRENT LIABILITIES                            5,831,127    7,371,570

Deferred income tax liabilities                          9,750       12,300
Deferred compensation payable                          316,169      256,284
                                                  ------------ ------------
TOTAL LIABILITIES                                    6,157,046    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, respectively                                   5,530        5,530
   Additional paid-in capital                        7,327,023    7,327,023
   Retained earnings                                 4,657,742    4,009,151
                                                  ------------ ------------
TOTAL STOCKHOLDERS' EQUITY                          11,990,295   11,341,704
                                                  ------------ ------------
   TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY     $ 18,147,341 $ 18,981,858
                                                  ============ ============


                         COFFEE HOLDING CO., INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            SIX AND THREE MONTHS ENDED APRIL 30, 2007 AND 2006
                                (Unaudited)


                               Six Months Ended       Three Months Ended
                                   April 30,               April 30,
                               2007        2006        2007        2006
                           ----------- ----------- ----------- -----------
NET SALES                  $26,829,485 $25,855,773 $14,194,373 $12,010,928

COST OF SALES               22,553,727  22,667,636  12,087,210  11,148,234
                           ----------- ----------- ----------- -----------

GROSS PROFIT                 4,275,758   3,188,137   2,107,163     862,964
                           ----------- ----------- ----------- -----------

OPERATING EXPENSES:
    Selling and
     administrative          2,846,734   2,502,295   1,456,044   1,219,458
    Writedown of amount due
     from joint venture        242,000           -           -           -
    Bad debt expense            31,195           -      31,195           -
    Officers’ salaries         234,449     272,180     117,437     136,205
                           ----------- ----------- ----------- -----------

TOTALS                       3,354,378   2,774,475   1,604,676   1,355,663
                           ----------- ----------- ----------- -----------

INCOME (LOSS) FROM
 OPERATIONS                    921,380     413,662     502,487    (492,969)
                           ----------- ----------- ----------- -----------

OTHER INCOME (EXPENSE)
  Interest income               66,576      57,289      32,460      26,723
  Equity in loss of joint
   venture                     (93,939)     (5,322)    (30,000)     (5,322)
  Writedown of investment
   in joint venture            (33,000)          -           -           -
  Management fee income         12,046           -           -           -
  Interest expense             (56,406)    (38,225)    (32,174)    (22,766)
  Impairment loss -
   leasehold improvements      (31,892)          -     (31,892)          -
                           ----------- ----------- ----------- -----------
                              (136,615)     13,742     (61,606)     (1,365)
                           ----------- ----------- ----------- -----------

INCOME (LOSS) BEFORE INCOME
 TAXES AND MINORITY
 INTEREST IN SUBSIDIARY        784,765     427,406     440,881    (494,334)

  Benefit (provision) for
   income taxes               (140,050)   (192,000)   (102,200)    210,100
                           ----------- ----------- ----------- -----------

INCOME (LOSS) BEFORE MINORITY
 INTEREST                      644,715           -     338,681           -

  Minority interest in
   subsidiary                    3,877           -         207           -
                           ----------- ----------- ----------- -----------

NET INCOME (LOSS)          $   648,592 $   235,404 $   338,888 $  (284,234)
                           =========== =========== =========== ===========

Basic and diluted earnings
 (loss) per share          $       .12 $       .04 $       .06 $      (.05)
                           =========== =========== =========== ===========


                         COFFEE HOLDING CO., INC.
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 SIX MONTHS ENDED APRIL 30, 2007 AND 2006
                                (Unaudited)


                                                      2007         2006
                                                  -----------  -----------
OPERATING ACTIVITIES:
   Net income                                     $   648,592  $   235,404
   Adjustments to reconcile net income to net
    cash provided by operating activities:
         Depreciation and amortization                165,478      227,907
         Writedown of amount due from joint
          venture                                     242,000            -
         Loss from joint venture                       93,939        5,322
         Writedown of investment in joint venture      33,000            -
         Deferred taxes                              (233,550)      29,300
         Impairment loss                               31,892            -
      Changes in operating assets and
       liabilities:
         Commodities held at broker                   902,375       14,443
         Accounts receivable                        1,703,288      899,654
         Inventories                               (1,039,129)     950,421
         Prepaid expenses and other current
          assets                                     (416,149)    (116,866)
         Prepaid and refundable income taxes          295,293     (104,607)
         Accounts payable and accrued expenses       (776,221)    (502,758)
         Due from joint venture                      (146,372)           -
         Deposits and other assets                     14,021      (19,675)
         Income taxes payable                          74,707     (217,064)
                                                  -----------  -----------
Net cash provided by operating activities           1,593,164    1,401,485
                                                  -----------  -----------

INVESTING ACTIVITIES:
   Purchases of property and equipment               (188,575)    (113,756)
   Security deposits                                        -       (2,500)
   Investment in joint ventures                             -     (450,501)
                                                  -----------  -----------
Net cash (used in) investing activities              (188,575)    (566,757)
                                                  -----------  -----------

FINANCING ACTIVITIES:
   Advances under bank line of credit              23,967,150   20,737,183
   Principal payments under bank line of credit   (24,806,079) (20,920,638)
   Principal payments of obligations under
    capital leases                                          -       (1,329)
                                                  -----------  -----------
Net cash (used in) financing activities              (838,929)    (184,784)
                                                  -----------  -----------

NET INCREASE IN CASH                                  565,660      649,944

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

CASH, END OF PERIOD                               $ 1,677,825  $ 1,385,412
                                                  ===========  ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:
   Interest paid                                  $    43,351  $    16,873
                                                  ===========  ===========
   Income taxes paid                              $         -  $   185,000
                                                  ===========  ===========

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING
 ACTIVITIES:

The Company utilized its deposit for the purchase
 of machinery and equipment                       $   328,388            -
                                                  ===========  -----------

Contact Information

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