FOR IMMEDIATE RELEASE
Contact: Andrew Gordon, President & CEO
Telephone: (718) 832-0800
Coffee Holding Co., Inc. Reports First Quarter Earnings
BROOKLYN, New York - March 16, 2007. Coffee Holding Co., Inc. (AMEX:JVA) today announced its operating results for the three months ended January 31, 2007. In this release, the Company:
Ÿ | Reports net sales of $12,635,112 for the three months ended January 31, 2007; |
Ÿ | Reports net income of $309,684 for the three months ended January 31, 2007; and |
Ÿ | Reports net income of $0.06 per share (basic and diluted) for the three months ended January 31, 2007. |
Net income was $309,684, or $.06 per share (basic and diluted), for the three months ended January 31, 2007 compared to net income of $519,638, or $.09 per share (basic and diluted), for the three months ended January 31, 2006. The decrease primarily reflects losses related to our Café La Rica joint venture, including a $63,939 equity loss, a $33,000 writedown in the investment in the joint venture and a $242,000 writedown in amounts due from the joint venture. These losses reduced our net income by $338,939, or $0.04 per share, for the three months ended January 31, 2007.
“An overall strong quarter was tarnished once again by the disappointing situation with our Florida joint venture,” said Andrew Gordon, President and Chief Executive Officer. “As a result, we have chosen to dissolve the joint venture and must now attempt to recoup our assets. However, once this problem is resolved, we will explore other avenues to build our Florida and southeast business base.”
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 through 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
JANUARY 31, 2007 AND OCTOBER 31, 2006
January 31, 2007 | October 31, 2006 | ||||||
(unaudited) | |||||||
- ASSETS - | |||||||
CURRENT ASSETS: | |||||||
Cash | $ | 1,827,523 | $ | 1,112,165 | |||
Commodities held at broker | 2,954,528 | 4,330,489 | |||||
Accounts receivable, net of allowance for doubtful accounts of $420,349 for 2007 and 2006, respectively | 4,343,394 | 6,534,848 | |||||
Inventories | 3,461,025 | 2,899,543 | |||||
Prepaid expenses and other current assets | 244,182 | 328,544 | |||||
Prepaid and refundable taxes | 45,331 | 302,003 | |||||
Deferred tax asset | 442,000 | 221,000 | |||||
TOTAL CURRENT ASSETS | 13,317,983 | 15,728,592 | |||||
Property and equipment, at cost, net of accumulated depreciation of $4,219,039 and $4,159,274 for 2007 and 2006, respectively | 2,170,413 | 2,138,951 | |||||
Investment in joint venture | 311,858 | 408,798 | |||||
Due from joint venture, less reserve of $242,000 | 289,890 | 73,658 | |||||
Deposits and other assets | 803,019 | 631,859 | |||||
TOTAL ASSETS | $ | 16,893,163 | $ | 18,981,858 | |||
- LIABILITIES AND STOCKHOLDERS' EQUITY - | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable and accrued expenses | $ | 3,961,239 | $ | 4,828,689 | |||
Line of credit borrowings | 985,219 | 2,542,881 | |||||
TOTAL CURRENT LIABILITIES | 4,939,630 | 7,371,570 | |||||
Deferred income tax liabilities | 4,100 | 12,300 | |||||
Deferred compensation payable | 291,217 | 256,284 | |||||
TOTAL LIABILITIES | 5,241,775 | 7,640,154 | |||||
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 and outstanding for 2007 and 2006 | 5,530 | 5,530 | |||||
Additional paid-in capital | 7,327,023 | 7,327,023 | |||||
Retained earnings | 4,318,835 | 4,009,151 | |||||
TOTAL STOCKHOLDERS' EQUITY | 11,651,388 | 11,341,704 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 16,893,163 | $ | 18,981,858 |
COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JANUARY 31, 2007 AND 2006
(Unaudited)
2007 | 2006 | ||||||
NET SALES | $ | 12,635,112 | $ | 13,844,845 | |||
COST OF SALES | 10,466,517 | 11,519,402 | |||||
GROSS PROFIT | 2,168,595 | 2,325,443 | |||||
OPERATING EXPENSES: | |||||||
Selling and administrative | 1,390,690 | 1,282,837 | |||||
Writedown of amount due from joint venture | 242,000 | - | |||||
Officers’ salaries | 117,012 | 135,975 | |||||
TOTALS | 1,749,702 | 1,418,812 | |||||
INCOME FROM OPERATIONS | 418,893 | 906,631 | |||||
OTHER INCOME (EXPENSE) | |||||||
Interest income | 34,116 | 30,566 | |||||
Equity in loss of joint venture | (63,939 | ) | - | ||||
Writedown of investment in joint venture | (33,000 | ) | - | ||||
Management fee income | 12,026 | - | |||||
Interest expense | (24,232 | ) | (15,459 | ) | |||
(75,029 | ) | 15,107 | |||||
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST IN SUBSIDIARY | 343,864 | 921,738 | |||||
Provision for income taxes | 37,850 | 402,100 | |||||
INCOME BEFORE MINORITY INTEREST | 306,014 | - | |||||
Minority interest in subsidiary | 3,670 | - | |||||
NET INCOME | $ | 309,684 | $ | 519,638 | |||
Basic and diluted earnings per share | $ | .06 | $ | .09 | |||
Weighted average common shares outstanding: | |||||||
Basic | 5,529,830 | 5,529,830 | |||||
Diluted | 5,599,830 | 5,593,250 |
COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JANUARY 31, 2007 AND 2006
(Unaudited)
2007 | 2006 | ||||||
OPERATING ACTIVITIES: | |||||||
Net income | $ | 309,684 | $ | 519,638 | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 60,630 | 112,817 | |||||
Writedown of amount due from joint venture | 242,000 | - | |||||
Loss from joint venture | 63,939 | - | |||||
Writedown of investment in joint venture | 33,000 | - | |||||
Deferred taxes | (229,200 | ) | 29,300 | ||||
Changes in operating assets and liabilities: | |||||||
Commodities held at broker | 1,375,961 | 321,531 | |||||
Accounts receivable | 1,916,454 | 754,940 | |||||
Inventories | (561,482 | ) | 1,039,687 | ||||
Prepaid expenses and other assets | 84,362 | (64,734 | ) | ||||
Prepaid and refundable income taxes | 256,672 | - | |||||
Accounts payable and accrued expenses | (867,450 | ) | (1,038,711 | ) | |||
Deferred compensation payable | - | 33,981 | |||||
Due from joint venture | (183,232 | ) | - | ||||
Deposits and other assets | (136,227 | ) | - | ||||
Income taxes payable | - | 69,250 | |||||
Net cash provided by operating activities | 2,365,111 | 1,777,699 | |||||
INVESTING ACTIVITIES: | |||||||
Purchases of property and equipment | (92,091 | ) | (74,196 | ) | |||
Net cash (used in) investing activities | (92,091 | ) | (74,196 | ) | |||
FINANCING ACTIVITIES: | |||||||
Advances under bank line of credit | 11,103,226 | 10,317,070 | |||||
Principal payments under bank line of credit | (12,660,888 | ) | (10,909,112 | ) | |||
Principal payments of obligations under capital leases | - | (1,329 | ) | ||||
Net cash used in financing activities | (1,557,662 | ) | (593,371 | ) | |||
NET INCREASE IN CASH | 715,358 | 1,110,132 | |||||
Cash, beginning of year | 1,112,165 | 735,468 | |||||
CASH, END OF PERIOD | $ | 1,827,523 | $ | 1,845,600 | |||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA: | |||||||
Interest paid | $ | 18,642 | $ | 13,176 | |||
Income taxes paid | $ | 3,550 | $ | 299,321 |