SOURCE: Coffee Holding Co., Inc.

September 11, 2008 09:15 ET

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

BROOKLYN, NY--(Marketwire - September 11, 2008) - Coffee Holding Co., Inc. (AMEX: JVA) today announced its operating results for the three and nine months ended July 31, 2008. In this release, the Company:

--  Reports net sales of $17,598,572 for the quarter and $50,730,554 for
    the nine months ended July 31, 2008;
    
--  Reports sales growth of 26.0% for the quarter and 24.4% for the nine
    months ended July 31, 2008 compared to the three and nine month periods
    ended July 31, 2007; and
    
--  Reports net income of $551,259 for the quarter and a net loss of
    $1,310,654 for the nine months ended July 31, 2008.
    

The Company had net income of $551,259, or $0.10 per share (basic and diluted), for the three months ended July 31, 2008 compared to net income of $370,656, or $0.07 per share (basic and diluted), for the three months ended July 31, 2007. The increase in net income primarily reflects increased net sales, which resulted in an increase in gross profit.

The Company had a net loss of $1,310,654, or $0.24 per share (basic and diluted), for the nine months ended July 31, 2008 compared to net income of $1,019,248, or $0.18 per share (basic and diluted), for the nine months ended July 31, 2007. The net loss reflects increased coffee prices and hedging losses when the price of coffee surged to a ten year high and subsequently collapsed during a 45 day period in February and March of 2008.

Net sales totaled $17,598,572 for the three months ended July 31, 2008, an increase of $3,633,765, or 26.0%, from $13,964,807 for the three months ended July 31, 2007. Net sales totaled $50,730,554 for the nine months ended July 31, 2008, an increase of $9,936,262, or 24.4%, from $40,794,292 for the nine months ended July 31, 2007. The increase in net sales reflects both increased amounts of green coffee, branded coffee and private label coffee sold as well as increased sales prices compared to the third quarter of fiscal 2007. The increase in net sales also reflects the price increases we implemented in the fourth quarter of fiscal 2007 and the first quarter of fiscal 2008 in response to higher green coffee prices.

"Following last quarter's unacceptable results, we are pleased that this quarter is more representative of the health of our overall business. Although many challenges remain in the overall macro environment in which we operate, we believe that we have taken the necessary steps to achieve the desired results as reflected by our performance in this past quarter," said President and Chief Executive Officer Andrew Gordon.

"A 26% increase in sales as well as a 48% gain in net income can be attributed to the determined efforts of our management and employees to strengthen our company and increase shareholder value. We will continue to monitor our core business as well as scrutinize the profitability of individual accounts to ensure they meet the criteria designed to achieve similar results going forward and we will not hesitate to make adjustments as we deem needed."

"With coffee prices having stabilized and the Entenmann's rollout fully underway, we anticipate further growth in sales and profits in the months ahead," 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. 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



                                                  July 31,     October 31,
                                                    2008          2007
                                                ------------  ------------
                                                (unaudited)     (audited)
                     - ASSETS -

CURRENT ASSETS:
   Cash                                         $    767,783  $    890,649
   Commodities held at broker                        986,941     3,468,530
   Accounts receivable, net of allowance for
    doubtful accounts of $127,464 and $136,781
    for 2008 and 2007, respectively                6,567,245     7,130,467
   Inventories                                     4,718,773     4,472,097
   Prepaid expenses and other current assets         283,393       502,240
   Prepaid and refundable taxes                      322,812       236,406
   Deferred income tax asset                         850,000       279,000
                                                ------------  ------------
TOTAL CURRENT ASSETS                              14,496,947    16,979,389

Property and equipment, at cost, net of
 accumulated depreciation of $4,878,850 and
 $4,542,490 for 2008 and 2007, respectively        2,901,232     2,651,960
Deposits and other assets                            513,692       765,368
                                                ------------  ------------
             TOTAL ASSETS                       $ 17,911,871  $ 20,396,717
                                                ============  ============

     - LIABILITIES AND STOCKHOLDERS' EQUITY -

CURRENT LIABILITIES:
  Accounts payable and accrued expenses         $  5,958,568  $  6,791,690
  Line of credit                                   2,328,562       897,191
  Income taxes payable                                     -         9,161
                                                ------------  ------------
TOTAL CURRENT LIABILITIES                          8,287,130     7,698,042

Deferred income tax liabilities                       64,000       145,000
Deferred compensation payable                        414,212       351,332
                                                ------------  ------------
TOTAL LIABILITIES                                  8,765,342     8,194,374
                                                ------------  ------------
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; 5,452,716 shares outstanding
    for 2008 and 5,514,930 shares outstanding
    in 2007                                            5,530         5,530
   Additional paid-in capital                      7,327,023     7,327,023
   Retained earnings                               2,091,245     4,946,467
   Less: Treasury stock, 77,114 and 14,900
    common shares, at cost for 2008 and 2007,
    respectively                                    (277,269)      (76,677)
                                                ------------  ------------
TOTAL STOCKHOLDERS' EQUITY                         9,146,529    12,202,343
                                                ------------  ------------
             TOTAL LIABILITIES AND
              STOCKHOLDERS' EQUITY              $ 17,911,871  $ 20,396,717
                                                ============  ============







                         COFFEE HOLDING CO., INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Unaudited)



                         Nine Months Ended         Three Months Ended
                              July 31,                   July 31,
                        2008          2007          2008          2007
                    ------------  ------------  ------------  ------------
NET SALES           $ 50,730,554  $ 40,794,292  $ 17,598,572  $ 13,964,807

COST OF SALES         47,927,963    34,581,004    15,002,037    12,027,277
                    ------------  ------------  ------------  ------------

GROSS PROFIT           2,802,591     6,213,288     2,596,535     1,937,530
                    ------------  ------------  ------------  ------------

OPERATING EXPENSES:
  Selling and
   administrative      4,282,961     4,270,646     1,363,607     1,360,846
  Writedown of
   amount due from
   dissolved joint
   venture                     -       242,000             -             -
  Officers’
   salaries              461,076       384,302       161,376       149,853
                    ------------  ------------  ------------  ------------
TOTALS                 4,744,037     4,896,948     1,524,983     1,510,699
                    ------------  ------------  ------------  ------------

INCOME (LOSS) FROM
 OPERATIONS           (1,941,446)    1,316,340     1,071,552       426,831
                    ------------  ------------  ------------  ------------

OTHER INCOME
 (EXPENSE)
  Interest and
   dividend income        49,253       102,226         5,594        35,650
  Equity in loss
   from dissolved
   joint venture               -       (91,340)            -         2,600
  Writedown of
   investment in
   dissolved joint
   venture                     -       (33,000)            -             -
  Management fee
   income                      -        12,026             -             -
  Interest expense       (95,740)      (87,530)      (34,307)      (31,124)
                    ------------  ------------  ------------  ------------
TOTAL OTHER INCOME
 (EXPENSE)               (46,487)      (97,618)      (28,713)        7,126
                    ------------  ------------  ------------  ------------

INCOME (LOSS)
 BEFORE BENEFIT
 FROM (PROVISION
 FOR) INCOME TAX
 EXPENSE AND
 MINORITY INTEREST
 IN SUBSIDIARY        (1,987,933)    1,218,722     1,042,839       433,957

  Benefit from
   (provision for)
   income tax
   expense               679,623      (198,493)     (490,326)      (58,443)
                    ------------  ------------  ------------  ------------

INCOME (LOSS)
 BEFORE MINORITY
 INTEREST             (1,308,310)    1,020,229       552,513       375,514

  Minority interest
   in loss of
   subsidiary             (2,344)         (981)       (1,254)       (4,858)
                    ------------  ------------  ------------  ------------

NET INCOME (LOSS)     (1,310,654)    1,019,248       551,259       370,656

Retained
 earnings-beginning    4,946,467     4,009,151     1,539,986     4,657,743
Dividends             (1,544,568)            -             -             -
                    ------------  ------------  ------------  ------------

RETAINED EARNINGS -
 ENDING             $  2,091,245  $  5,028,399  $  2,091,245  $  5,028,399
                    ============  ============  ============  ============

Basic and diluted
 earnings (loss)
 per share          $       (.24) $        .18  $        .10  $        .07
                    ============  ============  ============  ============

Weighted average
 common shares
 outstanding:
    Basic              5,485,136     5,528,708     5,461,242     5,528,708
                    ============  ============  ============  ============
    Diluted            5,485,136     5,528,708     5,461,242     5,528,708
                    ============  ============  ============  ============






                         COFFEE HOLDING CO., INC.
                    CONDENSED STATEMENTS OF CASH FLOWS
                                (Unaudited)

                                                    2008          2007
                                                ------------  ------------
OPERATING ACTIVITIES:
  Net (loss) income                             $ (1,310,654) $  1,019,248
  Adjustments to reconcile net income to net
   cash provided by operating activities:
      Depreciation and amortization                  400,134       272,058
      Bad debts                                            -        31,195
      Writedown of amount due from dissolved
       joint venture                                       -       242,000
      Loss from dissolved joint venture                    -        91,340
      Writedown of investment in dissolved
       joint venture                                       -        33,000
      Deferred income taxes                         (652,000)     (236,600)
      Impairment loss                                      -        31,892
    Changes in operating assets and
     liabilities:
      Commodities held at broker                   2,481,589       546,805
      Accounts receivable                            563,222     1,226,060
      Inventories                                   (246,676)     (982,758)
      Prepaid expenses and other current assets      218,847       (24,326)
      Prepaid and refundable income taxes            (86,406)      269,592
      Accounts payable and accrued expenses         (833,122)     (905,595)
      Due from dissolved joint venture                     -      (388,372)
      Deposits and other assets                      (47,628)     (197,370)
      Income taxes payable                            (9,161)       27,756
      Deferred compensation payable                   62,880        95,048
                                                ------------  ------------
Net cash provided by operating activities            541,025     1,150,973
                                                ------------  ------------

INVESTING ACTIVITIES:
  Purchases of property and equipment               (352,446)     (234,291)
                                                ------------  ------------
Net cash used in investing activities               (352,446)     (234,291)
                                                ------------  ------------

FINANCING ACTIVITIES:
  Advances under bank line of credit              46,023,524    36,771,879
  Principal payments under bank line of
   credit                                        (44,592,153)  (36,640,270)
  Payment of dividend                             (1,544,568)            -
  Purchase of treasury stock                        (200,592)      (62,748)
                                                ------------  ------------
Net cash provided by (used) in financing
 activities                                         (313,789)       68,861
                                                ------------  ------------

MINORITY INTEREST                                      2,344           981
                                                ------------  ------------

NET INCREASE (DECREASE) IN CASH                     (122,866)      986,524

  Cash, beginning of year                            890,649     1,112,165
                                                ------------  ------------

CASH, END OF PERIOD                             $    767,783  $  2,098,689
                                                ============  ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:
  Interest paid                                 $     84,143  $     35,530
                                                ============  ============
  Income taxes paid                             $     23,249  $    132,506
                                                ============  ============

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING
 ACTIVITIES:
  The Company utilized its deposit for the
   purchase of machinery and equipment          $    296,960  $    328,388
                                                ============  ============

Contact Information

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