Category: Food & Beverage

Coffee Holding Co., Inc. Reports Results for the Three Months Ended January 31, 2012

Coffee Holding Co., Inc. ("Coffee Holding" or the "Company") (Nasdaq:JVA ) today announced its operating results for the three months ended January 31, 2012. In this release, the Company:

  • Reports sales growth of 120% which increased to net sales of $56,601,684 for the three months ended January 31, 2012 and $25,641,093 for the three months ended January 31, 2011; and
  • Reports net income of $1,578,345, or $0.25 per share basic and $0.24 per share diluted, for the three months ended January 31, 2012 compared to net income of $1,041,072, or $0.19 per share (basic and diluted), for the three months ended January 31, 2011.

Results of Operations

The Company had net income of $1,578,345, or $0.25 per share basic and $0.24 diluted, for the three months ended January 31, 2012 compared to net income of $1,041,072 or $0.19 per share (basic and diluted), for the three months ended January 31, 2011. The increase in net income primarily reflects increased gross profit.

Net sales totaled $56,601,684 for the three months ended January 31, 2012, an increase of $30,960,591, or 120%, from $25,641,093 for the three months ended January 31, 2011. The increase in net sales primarily reflects higher sales prices compared to the first quarter of fiscal 2011 and an increase in sales of green coffee, as well as an increase in private label and branded sales.

Cost of sales for the three months ended January 31, 2012 was $52,151,940 or 92.1% of net sales, as compared to $22,560,399 or 87.9% of net sales for the three months ended January 31, 2011. The increase in cost of sales reflects the increased cost of sales, as well as the shift in our overall business to a higher percentage of green coffee sales as compared to roasted coffee sales which tend to be less profitable on a percentage basis than our roasted products.

Total operating expenses increased by $143,396, or 8.5%, to $1,829,492 for the three months ended January 31, 2012 as compared to operating expenses of $1,686,096 for the three months ended January 31, 2011. The increase in operating expenses was due to increases in selling and administrative expense of $176,088 partially offset by a decrease in officers' salaries of $32,692.

"We are pleased to report a strong quarter in both revenues and earnings to our shareholders. We continue to see growth in all areas of our business as continued historically high coffee prices have not affected demand. Increased sales on our flagship brand, Cafe Caribe, have come through new outlets of distribution as four new major supermarket chains have taken on the product since the start of the year. Private label sales continue to grow as well, with consumers looking to save as the economy is still on the mend. In addition green coffee sales increased, as the demand for our high quality Arabicas and Organic coffees remains brisk. Although our margins remain strong, higher increases in sales of green coffee as compared to increases in private label and branded sales have impacted our overall gross margins. That said, we will always take growth as long as it is profitable," said Andrew Gordon, President & CEO.

Quarterly Dividend

The Company's previously announced quarterly cash dividend of $0.03 per share will be paid to stockholders of record as of the close of business on April 17, 2012. The dividend will be paid on April 30, 2012.

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, 2012 AND OCTOBER 31, 2011
     
  January 31,
2012
October 31,
2011
  (unaudited)  
- ASSETS -    
CURRENT ASSETS:    
Cash $ 7,362,778 $ 4,244,335
Accounts receivable, net of allowances of $269,611 for 2012 and 2011 17,959,441 16,021,581
Inventories 11,978,110 13,475,855
Prepaid green coffee 236,718 388,754
Prepaid expenses and other current assets 231,911 275,679
Prepaid and refundable income taxes 110,215 377,972
Deferred income tax asset 254,441 896,400
TOTAL CURRENT ASSETS 38,133,614 35,680,576
Machinery and equipment, at cost, net of accumulated depreciation of $2,302,384 and $2,191,566 for 2012 and 2011, respectively 1,605,531 1,661,759
Customer list and relationships, net of accumulated amortization of $13,125 and $11,250 for 2012 and 2011, respectively 136,875 138,750
Trademarks 180,000 180,000
Goodwill 440,000 440,000
Deferred income tax asset 7,059 --
Deposits and other assets 883,679 677,606
TOTAL ASSETS $ 41,386,758 $ 38,778,691
- LIABILITIES AND STOCKHOLDERS' EQUITY -    
CURRENT LIABILITIES:    
Accounts payable and accrued expenses $ 15,161,172 $ 12,379,414
Line of credit 1,795,998 1,820,109
Due to broker 290,264 1,867,558
Income taxes payable 36,018 100
TOTAL CURRENT LIABILITIES 17,283,452 16,067,181
     
Deferred income tax liabilities -- 35,900
Deferred rent payable 151,858 146,921
Deferred compensation payable 569,790 538,707
TOTAL LIABILITIES 18,005,100 16,788,709
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 2012 and 2011 6,456 6,456
Additional paid-in capital 15,884,609 15,884,609
Contingent consideration 19,500 19,500
Retained earnings 7,652,978 6,268,326
Less: Treasury stock, 89,007 common shares, at cost for 2012 and 2011 (272,133) (272,133)
Total Coffee Holding Co., Inc. Stockholders' Equity 23,291,410 21,906,758
Noncontrolling interest 90,248 83,224
TOTAL EQUITY 23,381,658 21,989,982
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 41,386,758 $ 38,778,691
     
See notes to Condensed Consolidated Financial Statements.    
 
COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JANUARY 31, 2012 AND 2011
(Unaudited)
     
  2012 2011
NET SALES $ 56,601,684 $ 25,641,093
     
COST OF SALES (which includes purchases of approximately $10.5 million and $4.8 million for the three months ended January 31, 2012 and 2011, respectively from a related party) 52,151,940 22,560,399
     
GROSS PROFIT 4,449,744 3,080,694
     
OPERATING EXPENSES:    
Selling and administrative 1,682,334 1,506,246
Officers' salaries 147,158 179,850
TOTAL 1,829,492 1,686,096
     
INCOME FROM OPERATIONS 2,620,252 1,394,598
     
OTHER INCOME (EXPENSE):    
Interest income 13,884 160,586
Loss from equity investment (20,137) --
Interest expense (65,730) (112,636)
TOTALS (71,983) 47,950
     
INCOME BEFORE PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST IN SUBSIDIARY 2,548,269 1,442,548
     
Provision for income taxes 962,900 391,417
     
     
NET INCOME BEFORE NONCONTROLLING INTEREST IN SUBSIDIARY 1,585,369 1,051,131
Less: Net income attributable to the noncontrolling interest (7,024) (10,059)
     
NET INCOME ATTRIBUTABLE TO COFFEE HOLDING CO., INC. $ 1,578,345 $ 1,041,072
     
Basic earnings per share $ .25 $ .19
     
Diluted earnings per share $ .24 $ .19
     
Dividends declared per share $ .03 $ .03
     
Weighted average common shares outstanding:    
Basic 6,372,309 5,490,823
Diluted 6,644,309 5,500,823
     
See notes to Condensed Consolidated Financial Statements.    
 
COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JANUARY 31, 2012 AND 2011
(Unaudited)
     
  2012 2011
OPERATING ACTIVITIES:    
Net income $ 1,585,369 $ 1,051,131
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 112,693 111,066
Unrealized (gain) loss on commodities (1,577,294) 154,437
Loss from equity investment 20,137 --
Bad debt expense -- --
Deferred rent 4,937 5,541
Deferred income taxes 599,000 (113,500)
Changes in operating assets and liabilities:    
Accounts receivable (1,937,860) (1,594,361)
Inventories 1,497,745 1,276,257
Prepaid expenses and other current assets 43,768 119,549
Prepaid green coffee 152,036 971,943
Prepaid and refundable income taxes 267,757 (123,141)
Accounts payable and accrued expenses 2,781,754 158,225
Deposits and other assets 4,873 4,872
Income taxes payable 35,918 (36,541)
Net cash provided by operating activities 3,590,833 1,985,478
     
INVESTING ACTIVITIES:    
Equity investment (200,000) --
Purchases of machinery and equipment (54,590) (132,506)
Net cash used in investing activities (254,590) (132,506)
     
FINANCING ACTIVITIES:    
Advances under bank line of credit 48,525,026 20,690,112
Principal payments under bank line of credit (48,549,137) (21,180,002)
Payment of dividend (193,689) (166,989)
Net cash used in financing activities (217,800) (656,879)
     
NET INCREASE IN CASH 3,118,443 1,196,093
     
CASH, BEGINNING OF PERIOD 4,244,335 1,672,921
     
CASH, END OF PERIOD $ 7,362,778 $ 2,869,014
     
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:    
Interest paid $ 71,340 $ 116,675
Income taxes paid $ 60,225 $ 659,773
     
See notes to Condensed Consolidated Financial Statements.    
Contact:
Coffee Holding Co., Inc.
Andrew Gordon, President & CEO
(718) 832-0800