BROOKLYN, NY -- (Marketwire) -- 09/11/08 -- 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 - -
OfficersÂ’
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:
Andrew Gordon
President & CEO
Telephone: (718) 832-0800
