• Coffee Holding Co., Inc. Reports an Approximately 25% Increase in Net Sales During Third Quarter of 2022

    المصدر: Nasdaq GlobeNewswire / 14 سبتمبر 2022 15:25:00   America/Chicago

    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 

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