SOURCE: Coffee Holding Co., Inc.

September 14, 2007 09:15 ET

Coffee Holding Co., Inc. Reports Third Quarter and Nine Month Earnings

BROOKLYN, NY--(Marketwire - September 14, 2007) - Coffee Holding Co., Inc. (AMEX: JVA) today announced its operating results for the three and nine months ended July 31, 2007. In this release, the Company:

--  Reports sales growth of 17.8% for the quarter and 8.2% for the nine
    month period;
--  Reports increases in net income of $191,206 for the quarter and
    $604,394 for the nine month period; and
--  Reports net income of $0.07 per share for the 2007 quarter compared to
    $0.03 per share for the 2006 quarter and $0.18 per share for the nine
    months ended July 31, 2007 compared to $0.08 per share for the nine months
    ended July 31, 2006.
    

Net income equaled $370,656, or $0.07 per share (basic and diluted), for the three months ended July 31, 2007 compared to net income of $179,450, or $0.03 per share (basic and diluted), for the three months ended July 31, 2006. The increase compared to the three month period ended July 31, 2006 primarily reflects decreased operating expenses and increased other income, while gross profit remained relatively constant. Net income equaled $1,019,248, or $0.18 per share (basic and diluted), for the nine months ended July 31, 2007 compared to net income of $414,854, or $0.08 per share (basic and diluted), for the nine months ended July 31, 2006. The increase compared to the nine month period ended July 31, 2006 primarily reflects increased gross profit and was partially offset by increased operating expenses and other expense.

Net sales totaled $13,964,807 for the three months ended July 31, 2007, an increase of $2,106,226 or 17.8% from $11,858,581 for the three months ended July 31, 2006. Net sales totaled $40,794,292 for the nine months ended July 31, 2007, an increase of $3,079,938 or 8.2% from $37,714,354 for the nine months ended July 31, 2006. The increase in net sales reflects higher sales of green coffee and private label coffee compared to both the three and nine months ended July 31, 2006.

"We are positive about our results as we continue to build upon the momentum established during the second half of 2006 and the first half of our fiscal 2007," said Andrew Gordon, President and Chief Executive Officer. "Historically, the third quarter is our slowest period as coffee consumption dips slightly during the summer months. Yet, it appears that much of the past seasonality of our business has ended. With the Entenmann's business scheduled to roll out later this year and the recent hiring of a West Coast Green Coffee Sales Department in late August, we believe that the next several months will be a busy and exciting time for our company."

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.

                      PART I -- FINANCIAL INFORMATION
Item 1. Financial
 Statements              COFFEE HOLDING CO., INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                    JULY 31, 2007 AND OCTOBER 31, 2006

                                                  July 31,     October 31,
                                                    2007          2006
                                                ------------  -------------
                                                (unaudited)
                        - ASSETS -
CURRENT ASSETS:
   Cash                                         $  2,098,689  $   1,112,165
   Commodities held at broker                      3,783,683      4,330,489
   Accounts receivable, net of allowance for
    doubtful accounts of $420,349 for 2007 and
    2006                                           5,277,593      6,534,848
   Inventories                                     3,882,301      2,899,543
   Prepaid expenses and other current assets         352,870        328,544
   Prepaid and refundable taxes                       32,411        302,003
   Deferred income tax assets                        459,000        221,000
                                                ------------  -------------
     TOTAL CURRENT ASSETS                         15,886,547     15,728,592

Property and equipment, at cost, net of
 accumulated depreciation of $4,424,306 and
 $4,159,274 for 2007 and 2006, respectively        2,397,680      2,138,951
Investment in joint venture                          284,458        408,798
Due from joint venture, less reserve of
 $242,000 for 2007                                   220,030         73,658
Deposits and other assets                            499,860        631,859
                                                ------------  -------------
     TOTAL ASSETS                               $ 19,288,575  $  18,981,858
                                                ============  =============


       - LIABILITIES AND STOCKHOLDERS' EQUITY -
CURRENT LIABILITIES:
   Line of credit borrowings                    $  2,674,490  $   2,542,881
   Accounts payable and accrued expenses           3,923,093      4,828,689
   Income taxes payable                               27,756              -
                                                ------------  -------------
     TOTAL CURRENT LIABILITIES                     6,625,339      7,371,570

Deferred income tax liabilities                       13,700         12,300
Deferred compensation payable                        351,332        256,284
                                                ------------  -------------
     TOTAL LIABILITIES                             6,990,371      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 for 2007 and 5,529,830 shares
    issued and outstanding for 2006                    5,530          5,530
   Additional paid-in capital                      7,327,023      7,327,023
   Retained earnings                               5,028,399      4,009,151
   Less treasury stock, 12,000 shares, at
    cost in 2007                                     (62,748)             -
                                                ------------  -------------

     TOTAL STOCKHOLDERS' EQUITY                   12,298,204     11,341,704
                                                ------------  -------------
       TOTAL LIABILITIES AND STOCKHOLDERS'
        EQUITY                                  $ 19,288,575  $  18,981,858
                                                ============  =============




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

                            Nine Months Ended        Three Months Ended
                                 July 31,                  July 31,
                            2007         2006         2007         2006
                        -----------  -----------  -----------  -----------
NET SALES               $40,794,292  $37,714,354  $13,964,807  $11,858,581

COST OF SALES            34,581,004   32,584,566   12,027,277    9,916,930
                        -----------  -----------  -----------  -----------

GROSS PROFIT              6,213,288    5,129,788    1,937,530    1,941,651
                        -----------  -----------  -----------  -----------

OPERATING EXPENSES:
  Selling and
   administrative         4,239,451    3,916,707    1,360,846    1,414,412
  Writedown of amount
   due from joint
   venture                  242,000            -            -            -
  Bad debt expense           31,195        5,421            -        5,421
  Officers' salaries        384,302      408,155      149,853      135,975
                        -----------  -----------  -----------  -----------

    TOTALS                4,896,948    4,330,283    1,510,699    1,555,808
                        -----------  -----------  -----------  -----------

INCOME FROM OPERATIONS    1,380,124      799,505      426,831      385,843
                        -----------  -----------  -----------  -----------

OTHER INCOME (EXPENSE)
  Interest income           102,226       90,907       35,650       33,618
  Equity in (loss)
   income of joint
   venture                  (91,340)     (74,611)       2,600      (69,289)
  Writedown of
   investment in joint
   venture                  (33,000)           -            -            -
  Management fee income      12,026            -            -            -
  Interest expense          (87,530)     (80,951)     (31,124)     (42,726)
                        -----------  -----------  -----------  -----------
                            (97,618)     (64,655)       7,126      (78,397)
                        -----------  -----------  -----------  -----------

INCOME BEFORE PROVISION
 FOR INCOME TAXES AND
 MINORITY INTEREST IN
 SUBSIDIARY               1,218,722      734,850      433,957      307,446

  Provision for income
   taxes                   (198,493)    (319,996)     (58,443)    (127,996)
                        -----------  -----------  -----------  -----------

INCOME BEFORE MINORITY
 INTEREST                 1,020,229      414,854      375,514      179,450

  Minority interest in
   subsidiary                  (981)           -       (4,858)           -
                        -----------  -----------  -----------  -----------

NET INCOME              $ 1,019,248  $   414,854  $   370,656  $   179,450
                        ===========  ===========  ===========  ===========

Basic and diluted
 earnings per share     $       .18  $       .08  $       .07  $       .03
                        ===========  ===========  ===========  ===========



                         COFFEE HOLDING CO., INC.
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 NINE MONTHS ENDED JULY 31, 2007 AND 2006
                                (Unaudited)
                                                      2007         2006
                                                  -----------  -----------
OPERATING ACTIVITIES:
    Net income                                    $ 1,019,248  $   414,854
    Adjustments to reconcile net income to net
     cash provided by operating activities:
      Depreciation and amortization                   272,058      328,962
      Bad debts                                        31,195        5,421
      Writedown of amount due from joint venture      242,000            -
      Loss from joint venture                          91,340       74,611
      Writedown of investment in joint venture         33,000            -
      Deferred income taxes                          (236,600)      46,100
      Impairment loss                                  31,892            -
     Changes in operating assets and liabilities:
      Commodities held at broker                      546,805     (176,480)
      Accounts receivable                             984,060       86,222
      Inventories                                   1,226,060      281,694
      Prepaid expenses and other current assets       (24,326)    (284,662)
      Prepaid and refundable income taxes             269,592            -
      Accounts payable and accrued expenses          (905,595)     194,252
      Due from joint venture                         (388,372)           -
      Deposits and other assets                      (196,389)     (99,479)
      Income taxes payable                             27,756     (218,864)
      Deferred compensation payable                    95,048            -
                                                  -----------  -----------

        Net cash provided by operating activities   1,151,954      652,631
                                                  -----------  -----------

INVESTING ACTIVITIES:
    Purchases of property and equipment              (234,291)    (157,641)
    Investment in joint venture                             -     (689,005)
                                                  -----------  -----------

        Net cash used in investing activities        (234,291)    (846,646)
                                                  -----------  -----------

FINANCING ACTIVITIES:
    Advances under bank line of credit             36,771,879   31,322,458
    Principal payments under bank line of credit  (36,640,270) (28,823,076)
    Purchase of treasury stock                        (62,748)           -
    Principal payments of obligations under
     capital leases                                         -       (1,329)
                                                  -----------  -----------

        Net cash provided by financing activities      68,861    2,498,053
                                                  -----------  -----------

NET INCREASE IN CASH                                  986,524    2,304,038

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

CASH, END OF PERIOD                               $ 2,098,689  $ 3,039,506
                                                  ===========  ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:
    Interest paid                                 $    35,530  $    36,034
                                                  ===========  ===========
    Income taxes paid                             $   132,506  $   269,784
                                                  ===========  ===========

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