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 GordonPresident &
CEO718-832-0800
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
OPERATIONSNINE AND THREE MONTHS ENDED JULY
31, 2022 AND
2021(Unaudited)
|
|
Nine Months EndedJuly 31, |
|
|
Three Months EndedJuly 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
FLOWSSIX 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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