Coffee Holding (JVA) 8-K Coffee Holding Co., Inc. Reports Third Quarter and Nine Month Earnings

FOR IMMEDIATE RELEASE

Contact: Andrew Gordon, President & CEO

Telephone: (718) 832-0800

Coffee Holding Co., Inc. Reports Third Quarter and Nine Month Earnings

BROOKLYN, New York -September 13, 2007. Coffee Holding Co., Inc. (AMEX:JVA) today announced its operating results for the three and nine months ended July 31, 2007. In this release, the Company:

· Reports sales growth of 17.8% for the quarter and 8.2% for the nine month period;

· Reports increases in net income of $191,206 for the quarter and $604,394 for the nine month period; and

· Reports net income of $0.07 per share for the 2007 quarter compared to $0.03 per share for the 2006 quarter and $0.18 per share for the nine months ended July 31, 2007 compared to $0.08 per share for the nine months ended July 31, 2006.

Net income equaled $370,656, or $0.07 per share (basic and diluted), for the three months ended July 31, 2007 compared to net income of $179,450, or $0.03 per share (basic and diluted), for the three months ended July 31, 2006. The increase compared to the three month period ended July 31, 2006 primarily reflects decreased operating expenses and increased other income, while gross profit remained relatively constant. Net income equaled $1,019,248, or $0.18 per share (basic and diluted), for the nine months ended July 31, 2007 compared to net income of $414,854, or $0.08 per share (basic and diluted), for the nine months ended July 31, 2006. The increase compared to the nine month period ended July 31, 2006 primarily reflects increased gross profit and was partially offset by increased operating expenses and other expense.

Net sales totaled $13,964,807 for the three months ended July 31, 2007, an increase of $2,106,226 or 17.8% from $11,858,581 for the three months ended July 31, 2006. Net sales totaled $40,794,292 for the nine months ended July 31, 2007, an increase of $3,079,938 or 8.2% from $37,714,354 for the nine months ended July 31, 2006. The increase in net sales reflects higher sales of green coffee and private label coffee compared to both the three and nine months ended July 31, 2006.

“We are positive about our results as we continue to build upon the momentum established during the second half of 2006 and the first half of our fiscal 2007,” said Andrew Gordon, President and Chief Executive Officer. “Historically, the third quarter is our slowest period as coffee consumption dips slightly during the summer months. Yet, it appears that much of the past seasonality of our business has ended. With the Entenmann’s business scheduled to roll out later this year and the recent hiring of a West Coast Green Coffee Sales Department in late August, we believe that the next several months will be a busy and exciting time for our company.”

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.

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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.

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COFFEE HOLDING CO., INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

JULY 31, 2007 AND OCTOBER 31, 2006

	July 31, 2007			October 31, 2006
	(unaudited)
- ASSETS -
CURRENT ASSETS:
Cash	$	2,098,689		$	1,112,165
Commodities held at broker		3,783,683			4,330,489
Accounts receivable, net of allowance for doubtful accounts of $420,349 for 2007 and 2006		5,277,593			6,534,848
Inventories		3,882,301			2,899,543
Prepaid expenses and other current assets		352,870			328,544
Prepaid and refundable taxes		32,411			302,003
Deferred income tax assets		459,000			221,000
TOTAL CURRENT ASSETS		15,886,547			15,728,592
Property and equipment, at cost, net of accumulated depreciation of $4,424,306 and $4,159,274 for 2007 and 2006, respectively		2,397,680			2,138,951
Investment in joint venture		284,458			408,798
Due from joint venture, less reserve of $242,000 for 2007		220,030			73,658
Deposits and other assets		499,860			631,859
TOTAL ASSETS	$	19,288,575		$	18,981,858
- LIABILITIES AND STOCKHOLDERS' EQUITY -
CURRENT LIABILITIES:
Line of credit borrowings	$	2,674,490		$	2,542,881
Accounts payable and accrued expenses		3,923,093			4,828,689
Income taxes payable		27,756			-
TOTAL CURRENT LIABILITIES		6,625,339			7,371,570
Deferred income tax liabilities		13,700			12,300
Deferred compensation payable		351,332			256,284
TOTAL LIABILITIES		6,990,371			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 for 2007 and 5,529,830 shares issued and outstanding for 2006		5,530			5,530
Additional paid-in capital		7,327,023			7,327,023
Retained earnings		5,028,399			4,009,151
Less treasury stock, 12,000 shares, at cost in 2007		(62,748	)		-
TOTAL STOCKHOLDERS' EQUITY		12,298,204			11,341,704
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	19,288,575		$	18,981,858

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COFFEE HOLDING CO., INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

NINE AND THREE MONTHS ENDED JULY 31, 2007 AND 2006

(Unaudited)

	Nine Months Ended July 31,						Three Months Ended July 31,
	2007			2006			2007			2006
NET SALES	$	40,794,292		$	37,714,354		$	13,964,807		$	11,858,581
COST OF SALES		34,581,004			32,584,566			12,027,277			9,916,930
GROSS PROFIT		6,213,288			5,129,788			1,937,530			1,941,651
OPERATING EXPENSES:
Selling and administrative		4,239,451			3,916,707			1,360,846			1,414,412
Writedown of amount due from joint venture		242,000			-			-			-
Bad debt expense		31,195			5,421			-			5,421
Officers’ salaries		384,302			408,155			149,853			135,975
TOTALS		4,896,948			4,330,283			1,510,699			1,555,808
INCOME FROM OPERATIONS		1,380,124			799,505			426,831			385,843
OTHER INCOME (EXPENSE)
Interest income		102,226			90,907			35,650			33,618
Equity in (loss) income of joint venture		(91,340	)		(74,611	)		2,600			(69,289	)
Writedown of investment in joint venture		(33,000	)		-			-			-
Management fee income		12,026			-			-			-
Interest expense		(87,530	)		(80,951	)		(31,124	)		(42,726	)
		(97,618	)		(64,655	)		7,126			(78,397	)
INCOME BEFORE PROVISION FOR INCOME TAXES AND MINORITY INTEREST IN SUBSIDIARY		1,218,722			734,850			433,957			307,446
Provision for income taxes		(198,493	)		(319,996	)		(58,443	)		(127,996	)
INCOME BEFORE MINORITY INTEREST		1,020,229			414,854			375,514			179,450
Minority interest in subsidiary		(981	)		-			(4,858	)		-
NET INCOME	$	1,019,248		$	414,854		$	370,656		$	179,450
Basic and diluted earnings per share	$	.18		$	.08		$	.07		$	.03

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COFFEE HOLDING CO., INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED JULY 31, 2007 AND 2006

(Unaudited)

	2007			2006
OPERATING ACTIVITIES:
Net income	$	1,019,248		$	414,854
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		272,058			328,962
Bad debts		31,195			5,421
Writedown of amount due from joint venture		242,000			-
Loss from joint venture		91,340			74,611
Writedown of investment in joint venture		33,000			-
Deferred income taxes		(236,600	)		46,100
Impairment loss		31,892			-
Changes in operating assets and liabilities:
Commodities held at broker		546,805			(176,480	)
Accounts receivable		984,060			86,222
Inventories		1,226,060			281,694
Prepaid expenses and other current assets		(24,326	)		(284,662	)
Prepaid and refundable income taxes		269,592			-
Accounts payable and accrued expenses		(905,595	)		194,252
Due from joint venture		(388,372	)		-
Deposits and other assets		(196,389	)		(99,479	)
Income taxes payable		27,756			(218,864	)
Deferred compensation payable		95,048			-
Net cash provided by operating activities		1,151,954			652,631
INVESTING ACTIVITIES:
Purchases of property and equipment		(234,291	)		(157,641	)
Investment in joint venture		-			(689,005	)
Net cash used in investing activities		(234,291	)		(846,646	)
FINANCING ACTIVITIES:
Advances under bank line of credit		36,771,879			31,322,458
Principal payments under bank line of credit		(36,640,270	)		(28,823,076	)
Purchase of treasury stock		(62,748	)		-
Principal payments of obligations under capital leases		-			(1,329	)
Net cash provided by financing activities		68,861			2,498,053
NET INCREASE IN CASH		986,524			2,304,038
Cash, beginning of year		1,112,165			735,468
CASH, END OF PERIOD	$	2,098,689		$	3,039,506
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:
Interest paid	$	35,530		$	36,034
Income taxes paid	$	132,506		$	269,784
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
The Company utilized its deposit for the purchase of machinery and equipment	$	328,388		$	-

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