STATEN ISLAND, New York, Sept. 16, 2024 (GLOBE NEWSWIRE) -- Coffee Holding Co., Inc. (Nasdaq: JVA) (the "Company") today announced its operating results for the fiscal quarter ended July 31, 2024:
Net Sales. Net sales totaled $18,813,162 for the three months ended July 31, 2024, an increase of $3,048,797, or 19%, from $15,764,365 for the three months ended July 31, 2023. The increase in net sales was due to increased sales to new private label customers.
Cost of Sales. Cost of sales for the three months ended July 31, 2024 was $14,887,098, or 79.1% of net sales, as compared to $13,315,602, or 84.5% of net sales, for the three months ended July 31, 2023, an increase of $1,571,496. Cost of sales consists primarily of the cost of green coffee and packaging materials and realized and unrealized gains or losses on hedging activity. This increase in gross margin was due to price increases that were initiated during the three months ended July 31, 2024 for the Company's roasted coffee customers as well as a favorable inventory position which resulted in higher gross margins related to the Company's wholesale green coffee customers.
Gross Profit. Gross profit for the three months ended July 31, 2024 amounted to $3,926,064 or 20.9% of net sales, as compared to $2,448,763 or 15.5% of net sales, for the three months ended July 31, 2023. The increase in gross profits on a percentage and dollar basis was attributable to the factors listed above.
Operating Expenses. Total operating expenses increased by $354,191 to $3,206,201 for the three months ended July 31, 2024 from $2,852,010 for the three months ended July 31, 2023. Selling and administrative expenses increased by $336,373 and officers' salaries increased by $17,818. The increase in selling and administrative expenses was due to higher payroll costs, professional fees, and insurance expense, partially offset by decreases in medical expenses, automobile costs, and advertising costs.
Other Income (Expense). Other income for the three months ended July 31, 2024 was $166,182, a decrease of $84,934 from other income of $251,116 for the three months ended July 31, 2023. The change was attributable to a decrease in interest expense of $99,383, an increase in interest income of $249, a decrease in loss from the Company's equity method investments of $5,007, and a gain on extinguishment of lease of $210,567, partially offset by a decrease in other income of $400,140 related to an insurance claim.
Income Taxes. The Company's expense for income taxes for the three months ended July 31, 2024 totaled $259,249 compared to a benefit of $40,250 for the three months ended July 31, 2023. The change was primarily attributable to the difference in the income for the three months ended July 31, 2024 versus the loss for the three months ended July 31, 2023.
Net Income (Loss). We had net income of $626,796, or $0.11 per share basic and diluted, for the three months ended July 31, 2024 compared to a net loss of $111,881, or $0.02 per share basic and diluted, for the three months ended July 31, 2023.
"We are pleased to deliver a strong third quarter performance to our shareholders" said Andrew Gordon, President and CEO of Coffee Holding Company. Our efforts over the last several months are now being reflected in our results. The addition of new customers for our private label business along with renewed growth of our flagship Café Caribe Brand have led the way to the strong growth in sales which I referred to in the company update which we issued at the beginning of 2024. In addition, we have paid down our line of credit by over $7 million during the last nine months, resulting in a savings of over $150,000 in interest expense. As of today, we have a zero-balance outstanding on our line of credit and I expect we will be able to maintain a similar level of borrowings over the next several periods as I believe we will continue to have positive cash flow from our operations. Annualized, these savings would translate into approximately $.10 a share in pretax earnings. Lastly, with the termination of the Delta transaction, we are determined to see a higher price for our stock that is commensurate with the true value of our company," concluded Mr. Gordon.
About Coffee Holding
Founded in 1971, Coffee Holding Co., Inc. (NASDAQ: JVA) 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's product offerings consist of eight proprietary brands, each targeting a different segment of the consumer coffee market as well as roasting and blending coffees for major wholesalers and retailers throughout the United States who want to have products under their own names to compete with national brands. In addition to selling roasted coffee, Coffee Holding Co., Inc. also imports green coffee beans from around the world which it resells to smaller regional roasters and coffee shops around the United States and Canada.
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 the revenue growth. 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 our control, and which may cause our 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. 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. 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, 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, 2024 | October 31, 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 3,098,158 | $ | 2,733,977 | ||||
| Accounts receivable, net of allowances for credit losses of $144,000 for 2024 and 2023 | 7,449,547 | 7,983,032 | ||||||
| Receivable from sale of investment | - | 3,150,000 | ||||||
| Inventories | 14,506,015 | 18,986,539 | ||||||
| Due from broker | 1,263,603 | 345,760 | ||||||
| Prepaid expenses and other current assets | 213,443 | 413,752 | ||||||
| Prepaid and refundable income taxes | 311,306 | 365,876 | ||||||
| TOTAL CURRENT ASSETS | 26,842,072 | 33,978,936 | ||||||
| Building, machinery, and equipment, net | 3,329,576 | 3,494,450 | ||||||
| Customer list and relationships, net of accumulated amortization of $278,125 and $310,383 for 2024 and 2023, respectively | 161,875 | 184,750 | ||||||
| Trademarks and tradenames | 327,000 | 327,000 | ||||||
| Equity method investments | 39,676 | 39,676 | ||||||
| Right-of-use asset | 1,192,834 | 2,696,159 | ||||||
| Deferred income tax assets, net | 1,017,453 | 1,341,407 | ||||||
| Deposits and other assets | 141,529 | 129,523 | ||||||
| TOTAL ASSETS | $ | 33,052,015 | $ | 42,191,901 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accrued expenses | $ | 4,535,476 | $ | 5,206,442 | ||||
| Line of credit | 1,900,000 | 9,620,000 | ||||||
| Due to broker | 275,276 | 292,407 | ||||||
| Note payable - current portion | - | 4,200 | ||||||
| Lease liabilities - current portion | 636,534 | 255,625 | ||||||
| TOTAL CURRENT LIABILITIES | 7,347,286 | 15,378,674 | ||||||
| Note payable, net of current | 2,860 | 3,034 | ||||||
| Lease liabilities, net of current | 903,821 | 2,974,579 | ||||||
| Deferred compensation payable | 126,978 | 120,523 | ||||||
| TOTAL LIABILITIES | 8,380,945 | 18,476,810 | ||||||
| Commitments and Contingencies (Note 8) | ||||||||
| 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 for 2024 and 2023; 5,708,599 shares outstanding for 2024 and 2023 | 6,634 | 6,634 | ||||||
| Additional paid in capital | 19,094,618 | 19,094,618 | ||||||
| Retained earnings | 10,447,840 | 9,491,861 | ||||||
| Less: common stock held in treasury, at cost; 925,331 shares for 2024 and 2023 | (4,633,560 | ) | (4,633,560 | ) | ||||
| Total Coffee Holding Co., Inc. stockholders' equity | 24,915,532 | 23,959,553 | ||||||
| Noncontrolling interest | (244,462 | ) | (244,462 | ) | ||||
| TOTAL STOCKHOLDERS' EQUITY | 24,671,070 | 23,715,091 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 33,052,015 | $ | 42,191,901 | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Nine months ended July 31, | Three months ended July 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| NET SALES | $ | 57,349,477 | $ | 49,411,183 | $ | 18,813,162 | $ | 15,764,365 | ||||||||
| COST OF SALES | 46,239,134 | 41,810,204 | 14,887,098 | 13,315,602 | ||||||||||||
| GROSS PROFIT | 11,110,343 | 7,600,979 | 3,926,064 | 2,448,763 | ||||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Selling and administrative | 9,365,236 | 8,722,156 | 3,045,611 | 2,709,238 | ||||||||||||
| Officers' salaries | 474,983 | 467,548 | 160,590 | 142,772 | ||||||||||||
| TOTAL | 9,840,219 | 9,189,704 | 3,206,201 | 2,852,010 | ||||||||||||
| INCOME (LOSS) FROM OPERATIONS | 1,270,124 | (1,588,725 | ) | 719,863 | (403,247 | ) | ||||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||
| Interest income | 34,669 | 3,120 | 256 | 7 | ||||||||||||
| Interest expense | (235,427 | ) | (393,590 | ) | (44,641 | ) | (144,024 | ) | ||||||||
| Loss from equity method investments | - | (14,310 | ) | - | (5,007 | ) | ||||||||||
| Gain on extinguishment of lease | 210,567 | - | 210,567 | - | ||||||||||||
| Other income | - | 634,181 | - | 400,140 | ||||||||||||
| TOTAL | 9,809 | 229,401 | 166,182 | 251,116 | ||||||||||||
| INCOME (LOSS) BEFORE EXPENSE (BENEFIT) FOR INCOME TAXES | 1,279,933 | (1,359,324 | ) | 886,045 | (152,131 | ) | ||||||||||
| Expense (benefit) for income taxes | 323,954 | (355,500 | ) | 259,249 | (40,250 | ) | ||||||||||
| NET INCOME (LOSS) | $ | 955,979 | $ | (1,003,824 | ) | $ | 626,796 | $ | (111,881 | ) | ||||||
| Basic and diluted earnings (loss) per share | $ | 0.17 | $ | (0.18 | ) | $ | 0.11 | $ | (0.02 | ) | ||||||
| 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 CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
| Common Stock | Treasury Stock | Additional Paid-in | Retained | Non-controlling | ||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Earnings | Interest | Total | |||||||||||||||||||||||||
| Balance, October 31, 2022 | 5,708,599 | $ | 6,634 | 925,331 | $ | (4,633,560 | ) | $ | 19,094,618 | $ | 10,327,437 | $ | (244,462 | ) | $ | 24,550,667 | ||||||||||||||||
| Net loss | - | - | - | - | - | (532,103 | ) | - | (532,103 | ) | ||||||||||||||||||||||
| Balance, January 31, 2023 | 5,708,599 | 6,634 | 925,331 | (4,633,560 | ) | 19,094,618 | 9,795,334 | (244,462 | ) | 24,018,564 | ||||||||||||||||||||||
| Net loss | - | - | - | - | - | (359,840 | ) | - | (359,840 | ) | ||||||||||||||||||||||
| Balance, April 30, 2023 | 5,708,599 | 6,634 | 925,331 | (4,633,560 | ) | 19,094,618 | 9,435,494 | (244,462 | ) | 23,658,724 | ||||||||||||||||||||||
| Net loss | - | - | - | - | - | (111,881 | ) | - | (111,881 | ) | ||||||||||||||||||||||
| Balance, July 31, 2023 | 5,708,599 | $ | 6,634 | 925,331 | $ | (4,633,560 | ) | $ | 19,094,618 | $ | 9,323,613 | $ | (244,462 | ) | $ | 23,546,843 | ||||||||||||||||
| Balance October 31, 2023 | 5,708,599 | $ | 6,634 | 925,331 | $ | (4,633,560 | ) | $ | 19,094,618 | $ | 9,491,861 | $ | (244,462 | ) | $ | 23,715,091 | ||||||||||||||||
| Net income | - | - | - | - | - | 351,024 | - | 351,024 | ||||||||||||||||||||||||
| Balance January 31, 2024 | 5,708,599 | 6,634 | 925,331 | (4,633,560 | ) | 19,094,618 | 9,842,885 | (244,462 | ) | 24,066,115 | ||||||||||||||||||||||
| Net loss | - | - | - | - | - | (21,841 | ) | - | (21,841 | ) | ||||||||||||||||||||||
| Balance, April 30, 2024 | 5,708,599 | 6,634 | 925,331 | (4,633,560 | ) | 19,094,618 | 9,821,044 | (244,462 | ) | 24,044,274 | ||||||||||||||||||||||
| Net loss | - | - | - | - | - | 626,796 | - | 626,796 | ||||||||||||||||||||||||
| Balance, July 31, 2024 | 5,708,599 | $ | 6,634 | 925,331 | $ | (4,633,560 | ) | $ | 19,094,618 | $ | 10,447,840 | $ | (244,462 | ) | $ | 24,671,070 | ||||||||||||||||
COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Nine months ended July 31, | ||||||||
| 2024 | 2023 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | 955,979 | (1,003,824 | ) | ||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 458,429 | 436,669 | ||||||
| Unrealized gain on commodities | (934,974 | ) | (776,521 | ) | ||||
| Loss on equity method investments | - | 14,310 | ||||||
| Amortization of right-of-use asset | 203,268 | 240,504 | ||||||
| Gain on extinguishment of lease liability | (210,567 | ) | - | |||||
| Deferred income taxes | 323,954 | (355,500 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 533,485 | 1,334,319 | ||||||
| Inventories | 4,480,524 | 2,113,830 | ||||||
| Prepaid expenses and other current assets | 200,309 | (9,306 | ) | |||||
| Prepaid and refundable income taxes | 54,570 | - | ||||||
| Lease liabilities | (179,225 | ) | (203,908 | ) | ||||
| Deposits and other assets | (12,006 | ) | - | |||||
| Accounts payable, accrued expenses, and deferred compensation payable | (664,511 | ) | (991,411 | ) | ||||
| Net cash provided by operating activities | 5,209,235 | 799,162 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of machinery and equipment | (270,680 | ) | (721,696 | ) | ||||
| Proceeds from sale of investment | 3,150,000 | - | ||||||
| Net cash provided by (used in) investing activities | 2,879,320 | (721,696 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Advances under bank line of credit | - | 2,434,783 | ||||||
| Cash overdraft | - | (876,148 | ) | |||||
| Principal payments on note payable | (4,374 | ) | (4,641 | ) | ||||
| Principal payments under bank line of credit | (7,720,000 | ) | (1,728,783 | ) | ||||
| Net cash used in financing activities | (7,724,374 | ) | (174,789 | ) | ||||
| Net change in cash and cash equivalents | 364,181 | (97,323 | ) | |||||
| Cash and cash equivalents, beginning of period | 2,733,977 | 2,515,873 | ||||||
| Cash and cash equivalents, end of period | $ | 3,098,158 | $ | 2,418,550 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA: | ||||||||
| Interest paid | $ | 281,841 | $ | 243,100 | ||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Initial recognition of operating lease right-of-use asset | $ | 547,975 | $ | 146,416 | ||||
