STATEN ISLAND, New York, Sept. 14, 2022 (GLOBE NEWSWIRE) -- Coffee Holding Co., Inc. (Nasdaq: JVA) (the “Company”) today announced its operating results for the fiscal quarter ended July 31, 2022:
Net Sales. Net sales totaled $17,013,286 for the three months ended July 31, 2022, an increase of $3,378,973, or 24.8%, from $13,634,313 for the three months ended July 31, 2021. The increase in net sales was due to an increase of sales to the Company’s legacy customers along with incremental sales to several significant new customers in the quarter.
Cost of Sales. Cost of sales for the three months ended July 31, 2022 was $13,867,710, or 81.5% of net sales, as compared to $10,708,461, or 78.5% of net sales, for the three months July 31, 2021. Cost of sales consists primarily of the cost of green coffee and packaging materials and realized and unrealized gains or losses on hedging activity. The increase in cost of sales was due to the Company’s increased sales to its customers, increased prices of green coffee and packaging materials.
Gross Profit. Gross profit for the three months ended July 31, 2022 amounted to $3,145,576 or 18.5% of net sales, as compared to $2,925,852 or 21.5% of net sales, for the three months ended July 31, 2021. The decrease in gross profits on a percentage basis was attributable to the factors listed above.
Operating Expenses. Total operating expenses decreased by $333,223 to $2,906,094 for the three months ended July 31, 2022 from $3,239,317 for the three months ended July 31, 2021. Selling and administrative expenses decreased by $326,684 and officers’ salaries decreased by $6,539.
Net (Loss) Income. The Company had net income of $132,381 or $0.02 per share basic and diluted, for the three months ended July 31, 2022 compared to a net loss of $127,051, or $(0.02) per share basic and diluted for the three months ended July 31, 2021.
“Following a 14% increase in revenues during our second quarter of 2022, we experienced an even greater increase this quarter as our sales rose 24.8% compared to the third quarter of 2021. A combination of increased sales of our branded products, most notably our Latin espressos, Café Caribe and Café Supremo, along with sales to new customers were responsible for the increase. The increase in sales occurred despite a decrease in revenues of approximately $660,000 at our Generations/Steep and Brew subsidiary over the first six months of fiscal 2022 as compared to 2021, and a decrease in sales at Generations/Steep and Brew of approximately $5.5 million over the first nine months of fiscal 2022 as compared to 2021,” stated Andrew Gordon, President and CEO of the Company.
“I believe we have found the simple solution to continue to grow revenues by remaining focused on our core legacy business of sales of gourmet green coffee beans, sales of our specialty proprietary brands and sales of private label products to some of the largest wholesalers and retailers in the United States, rather than relying on acquisitions and/or joint ventures,” continued Mr. Gordon. “However, the unfortunate downside of our renewed sales growth is the headwinds we continue to face from logistics as our freight factors increased by approximately $500,000, or approximately $0.10 a share, during this third quarter of 2022. We expect this increase in transportation costs in both bringing green coffee and other supplies to our factories, and shipping finished product to our customers, to continue to weigh our profitability for the immediate future, until supply chain issues mitigate and diesel fuel levels show a meaningful decline,” concluded Mr. Gordon.
About Coffee Holding
Coffee Holding Co., Inc. 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.
Forward looking statements
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, including the Company’s outlook on its revenue growth and operations. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond the Company’s control, and which may cause the Company’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. The Company has 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. Such statements may involve risks and uncertainties, including but not limited to those relating to product demand, pricing, market acceptance, hedging activities, the effect of economic conditions, the effect of any pandemics including the one caused by Covid-19, 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.
Company Contact
Coffee Holding Co., Inc.
Andrew Gordon
President & CEO
718-832-0800
COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| July 31, 2022 | October 31, 2021 | |||||||
| (Unaudited) | ||||||||
| - ASSETS - | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | 1,430,477 | $ | 3,696,275 | ||||
| Accounts receivable, net of allowances of $144,000 for 2022 and 2021 | 7,535,104 | 9,299,978 | ||||||
| Inventories | 19,239,461 | 15,961,866 | ||||||
| Prepaid expenses and other current assets | 707,643 | 542,224 | ||||||
| Due from broker | 417,685 | 725,000 | ||||||
| Prepaid and refundable income taxes | 652,995 | 75,952 | ||||||
| TOTAL CURRENT ASSETS | 29,983,365 | 30,301,295 | ||||||
| Building machinery and equipment, net | 3,628,921 | 2,662,628 | ||||||
| Customer list and relationships, net of accumulated amortization of $263,069 and $237,131 for 2022 and 2021, respectively | 421,931 | 447,869 | ||||||
| Trademarks and tradenames | 408,000 | 408,000 | ||||||
| Non-compete, net of accumulated amortization of $74,250 and $69,300 for 2022 and 2021, respectively | 24,750 | 29,700 | ||||||
| Goodwill | 2,488,785 | 2,488,785 | ||||||
| Equity method investments | 359,090 | 402,245 | ||||||
| Investment - other | 2,500,000 | 2,500,000 | ||||||
| Deferred income tax asset - net | 148,586 | 77,394 | ||||||
| Right of Use Asset | 3,287,758 | 3,545,786 | ||||||
| Deposits and other assets | 506,123 | 449,225 | ||||||
| TOTAL ASSETS | $ | 43,757,309 | $ | 43,312,927 | ||||
| - LIABILITIES AND STOCKHOLDERS’ EQUITY - | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accrued expenses | $ | 4,872,467 | $ | 5,047,640 | ||||
| Line of credit – current portion | - | 3,800,850 | ||||||
| Lease liability – current portion | 122,456 | 340,400 | ||||||
| Note payable – current portion | 4,200 | 4,200 | ||||||
| Due to broker | 439,247 | 708,321 | ||||||
| Income taxes payable | 1,500 | 416,449 | ||||||
| TOTAL CURRENT LIABILITIES | 5,439,870 | 10,317,860 | ||||||
| Lease liabilities | 3,299,951 | 3,299,784 | ||||||
| Line of credit net of current portion | 6,114,000 | - | ||||||
| Note payable – long term | 10,461 | 13,092 | ||||||
| Deferred compensation payable | 300,013 | 311,872 | ||||||
| TOTAL LIABILITIES | 15,164,295 | 13,942,608 | ||||||
| Commitments and Contingencies | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Coffee Holding Co., Inc. 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, 6,633,930 shares issued as of July 31, 2022 and October 31, 2021; 5,708,599 shares outstanding as of July 31, 2022 and October 31, 2021 | 6,634 | 6,634 | ||||||
| Additional paid-in capital | 19,094,618 | 18,688,797 | ||||||
| Retained earnings | 14,117,370 | 14,471,222 | ||||||
| Less: Treasury stock, 925,331 common shares, at cost as of July 31, 2022 and October 31, 2021 | (4,633,560 | ) | (4,633,560 | ) | ||||
| Total Coffee Holding Co., Inc. Stockholders’ Equity | 28,585,062 | 28,533,093 | ||||||
| Non-controlling interest | 7,952 | 837,226 | ||||||
| TOTAL EQUITY | 28,593,014 | 29,370,319 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 43,757,309 | $ | 43,312,927 | ||||
COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
NINE AND THREE MONTHS ENDED JULY 31, 2022 AND 2021
(Unaudited)
| Nine Months Ended July 31, | Three Months Ended July 31, | |||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||
| NET SALES | $ | 50,216,316 | $ | 46,236,708 | $ | 17,013,286 | $ | 13,634,313 | ||||||||||
| COST OF SALES | 40,806,381 | 35,061,947 | 13,867,710 | 10,708,461 | ||||||||||||||
| GROSS PROFIT | 9,409,935 | 11,174,761 | 3,145,576 | 2,925,852 | ||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||||
| Selling and administrative | 9,530,817 | 9,407,199 | 2,758,995 | 3,085,679 | ||||||||||||||
| Officers’ salaries | 449,375 | 460,501 | 147,099 | 153,638 | ||||||||||||||
| TOTAL | 9,980,192 | 9,867,700 | 2,906,094 | 3,239,317 | ||||||||||||||
| (LOSS) INCOME FROM OPERATIONS | (570,257 | ) | 1,307,061 | 239,482 | (313,465 | ) | ||||||||||||
| OTHER (EXPENSE) INCOME | ||||||||||||||||||
| Interest income | 4,095 | 3,629 | 2 | 2,700 | ||||||||||||||
| Loss from equity method investment | (43,154 | ) | (7,369 | ) | (7,354 | ) | (3,454 | ) | ||||||||||
| Interest expense | (143,393 | ) | (48,710 | ) | (53,100 | ) | (5,202 | ) | ||||||||||
| TOTAL | (182,452 | ) | (52,450 | ) | (60,452 | ) | (5,956 | ) | ||||||||||
| (LOSS) INCOME BEFORE (BENEFIT) PROVISION FOR INCOME TAXES AND NON-CONTROLLING INTEREST IN SUBSIDIARY | (752,709 | ) | 1,254,611 | 179,030 | (319,421 | ) | ||||||||||||
| (Benefit) provision for income taxes | (188,626 | ) | 419,326 | 46,649 | (91,003 | ) | ||||||||||||
| NET (LOSS) INCOME BEFORE NON-CONTROLLING INTEREST IN SUBSIDIARY | (564,083 | ) | 835,285 | 132,381 | (228,418 | ) | ||||||||||||
| Less: Net loss attributable to the non-controlling interest | 609,231 | 72,020 | - | 101,367 | ||||||||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO COFFEE HOLDING CO., INC. | $ | 45,148 | $ | 907,305 | $ | 132,381 | $ | (127,051 | ) | |||||||||
| Basic and diluted (loss) earnings per share | $ | .01 | $ | .16 | $ | .02 | $ | (.02 | ) | |||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||
| Basic and diluted | 5,708,599 | 5,708,599 | 5,708,599 | 5,708,599 | ||||||||||||||
COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JULY 31, 2022 AND 2021
(Unaudited)
| 2022 | 2021 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net (loss) income | $ | (564,083 | ) | $ | 835,285 | |||
| Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||||||
| Depreciation and amortization | 421,661 | 504,280 | ||||||
| Stock-based compensation | 405,821 | 569,305 | ||||||
| Unrealized loss (gain) on commodities | 38,241 | (315,569 | ) | |||||
| Loss on equity method investments | 43,155 | 7,369 | ||||||
| Write-off of accounts receivable | 415,096 | - | ||||||
| Write-down of obsolete inventory | 718,353 | - | ||||||
| Amortization of right of use asset | 258,028 | 321,921 | ||||||
| Deferred income taxes | (71,192 | ) | 4,849 | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 1,349,778 | 1,156,932 | ||||||
| Inventories | (4,215,991 | ) | 750,468 | |||||
| Prepaid expenses and other current assets | (165,419 | ) | (339,855 | ) | ||||
| Prepaid and refundable income taxes | (577,043 | ) | 92,597 | |||||
| Accounts payable and accrued expenses | (175,173 | ) | 1,048,073 | |||||
| Deposits and other assets | (68,757 | ) | (128,353 | ) | ||||
| Change in lease liability | (217,777 | ) | (367,458 | ) | ||||
| Income taxes payable | (414,949 | ) | 288,294 | |||||
| Net cash (used in) provided by operating activities | (2,820,251 | ) | 4,428,138 | |||||
| INVESTING ACTIVITIES: | ||||||||
| Purchases of machinery and equipment | (1,357,066 | ) | (1,491,233 | ) | ||||
| Net cash used in investing activities | (1,357,066 | ) | (1,491,233 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Advances under bank line of credit | 3,027,654 | 2,515,563 | ||||||
| Principal payments on note payable | (2,631 | ) | (3,783 | ) | ||||
| Payment of dividend | (399,000 | ) | - | |||||
| Principal payments under bank line of credit | (714,504 | ) | (3,812,385 | ) | ||||
| Net cash provided by (used in) financing activities | 1,911,519 | (1,300,605 | ) | |||||
| NET (DECREASE) INCREASE IN CASH | (2,265,798 | ) | 1,636,300 | |||||
| CASH, BEGINNING OF PERIOD | 3,696,275 | 2,875,120 | ||||||
| CASH, END OF PERIOD | $ | 1,430,477 | $ | 4,511,420 | ||||
| 2022 | 2021 | |||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA: | ||||||||
| Interest paid | $ | 136,682 | $ | 55,389 | ||||
| Income taxes paid | $ | 519,229 | $ | 10,307 | ||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Purchase of inventory by non-controlling interest | $ | 220,043 | ||||||
| Initial recognition of operating lease right of use asset | - | $ | 65,999 | |||||
| Initial recognition of operating lease liabilities | - | $ | 65,999 | |||||
