Coffee Holding Company, Inc. Reports Third Quarter Earnings
BROOKLYN, New York--September 15, 2005--Coffee Holding Company, Inc. (AMEX:JVA)
today announced its results for the three and nine month periods ended July 31,
2005, which included 13 weeks.
In this release, the company:
o Reports sales growth for the quarter of 68.6 percent;
o Announces an earnings decrease of $322,420 compared to the three months
ended July 31, 2004;
o Records earnings per share loss of $(.08);
Net sales totaled $10,782,680 for the three months ended July 31, 2005, an
increase of $4,386,112 or 68.6 percent from $6,396,568 for the three months
ended July 31, 2004.
Net earnings decreased $322,420, or 257.0 percent, to $447,875 or $(.08) per
share for the three months ended July 31, 2005 compared to $125,455 or $(.03)
per share for the three months ended July 31, 2004.
Andrew Gordon, President and CEO of Coffee Holding, remarked, "Obviously, we are
never going to be satisfied with a losing quarter but quite frankly we remain
upbeat. The loss itself was a result of a $270,000 increase in allowance for
doubtful accounts receivable and an unrealized hedging loss - marked - to market
at the end of the quarter. As of August 31, 2005 the majority of this unrealized
loss has been reversed out. However, the coffee market continues to remain
extremely volatile. Beyond these two one time events, the quarter was overall a
positive considering prices declined by over 20% in roughly a 30 day period."
Gordon commented further, "Our sales of specialty green coffee remained high and
profitable during the summer months and our branded and private label sales were
healthy as well. In addition, we decreased prices by approximately 7% on our
branded and private label coffees during this period in response to a price
decline by national brands. However, despite the 20% decline in the price of
green coffee and pricing pressure from national brands our overall gross margins
declined by only 5.6%. In addition, we are extremely pleased with our 68% gain
in revenue quarter to quarter."
In closing, Gordon stated, "The third quarter is always our toughest. Although
there is little seasonality in the coffee business, the threat of a frost in
Brazil coupled with vacation and summer malaise makes running a coffee business
during the summer months a real challenge. We anticipate a strong rebound in the
fourth quarter."
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 BALANCE SHEETS
JULY 31, 2005 AND OCTOBER 31, 2004
July 31, October 31,
2005 2004
(unaudited)
- ASSETS -
CURRENT ASSETS:
Cash $ 1,234,142 $ 642,145
Due from broker 2,154,937 873,901
Accounts receivable, net of allowance for doubtful
accounts of $420,349 for 2005 and $150,349 for 2004 4,070,460 4,005,755
Inventories 3,559,831 2,258,289
Prepaid expenses and other current assets 434,620 676,395
Deferred tax asset 238,200 136,900
----------- -----------
TOTAL CURRENT ASSETS 11,692,190 8,593,385
Property and equipment, at cost, net of accumulated depreciation of
$3,635,827 and $3,354,418 for 2005 and 2004, respectively 2,363,463 2,286,936
Deposits and other assets 41,521 33,496
----------- -----------
TOTAL ASSETS $14,097,174 $10,913,817
=========== ===========
- LIABILITIES AND STOCKHOLDERS' EQUITY -
CURRENT LIABILITIES:
Current portion of term loan $ -- $ 252,000
Current portion of obligations under capital lease 9,216 111,060
Line of credit borrowings 1,328,161 2,685,045
Accounts payable and accrued expenses 2,681,050 4,658,836
Income taxes payable - current -- 160,000
----------- -----------
TOTAL CURRENT LIABILITIES 4,018,427 7,866,941
Obligations under capital lease, net of current portion -- 5,855
Income taxes payable - deferred 69,500 45,200
----------- -----------
TOTAL LIABILITIES 4,087,927 7,917,996
----------- -----------
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 and 3,999,650 shares issued and outstanding for 2005 and 2004,
respectively 5,530 4,000
Additional paid-in capital 7,327,023 867,887
Retained earnings 2,676,694 2,123,934
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 10,009,247 2,995,821
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $14,097,174 $10,913,817
=========== ===========
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COFFEE HOLDING CO., INC.
CONDENSED STATEMENTS OF INCOME
THREE AND NINE MONTHS ENDED JULY 31, 2005 AND 2004
(Unaudited)
Nine Months Ended Three Months Ended
July 31, July, 31
2005 2004 2005 2004
---- ---- ---- ----
NET SALES $ 29,016,190 $ 18,577,528 $ 10,782,680 $ 6,396,568
COST OF SALES 23,657,607 13,892,695 9,749,222 5,421,709
------------ ------------ ------------ ------------
GROSS PROFIT 5,358,583 4,684,833 1,033,458 974,859
------------ ------------ ------------ ------------
OPERATING EXPENSES:
Selling and administrative 3,801,669 3,091,110 1,420,090 1,036,381
Bad debt expense 270,000 -- 270,000 --
Officers' salaries 399,271 370,424 135,975 123,475
------------ ------------ ------------ ------------
TOTALS 4,470,940 3,461,534 1,826,065 1,159,856
------------ ------------ ------------ ------------
INCOME (LOSS) FROM OPERATIONS 887,643 1,223,299 (792,607) (184,997)
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE)
Interest income 25,426 9,195 18,219 2,692
Interest expense (88,130) (137,846) (24,908) (56,250)
------------ ------------ ------------ ------------
(62,704) (128,651) (6,689) (53,558)
------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES 824,939 1,094,648 (799,296) (238,555)
Provision (benefit) for income 272,179 482,100 (351,421) (113,100)
------------ ------------ ------------ ------------
taxes
NET INCOME (LOSS) $ 552,760 $ 612,548 $ (447,875) $ (125,455)
============ ============ ============ ============
Basic and diluted earnings (loss) $ .12 $ .15 $ (.08) $ (.03)
============ ============ ============ ============
per share
Weighted average common shares outstanding:
Basic 4,448,864 3,999,650 5,332,644 3,999,650
============ ============ ============ ============
Diluted 4,508,757 3,999,650 5,332,644 3,999,650
============ ============ ============ ============
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