Coffee Holding Co., Inc. Reports Fiscal Year 2005 Results
BROOKLYN, New York -- January 18, 2006. Coffee Holding Co., Inc.
(AMEX:JVA) today announced its operating results for the fourth quarter and
fiscal year ended October 31, 2005. In this release, the Company:
o Reports sales growth of 32.5% for the quarter and 48.2% for the
year;
o Announces an increase in net income of 140.6% for the quarter and
35.4% for the year; and
o Reports net income of $0.11 per share for the quarter and $0.25 per
share for the year.
Net income increased $370,000, or 140.6%, to $632,000 or $0.11 per share,
for the quarter ended October 31, 2005 compared to $263,000, or $0.07 per share,
for the quarter ended October 31, 2004. Net income increased $310,000, or 35.4%,
to $1.2 million or $0.25 per share, for the year ended October 31, 2005 compared
to $875,000 or $0.22 per share, for the year ended October 31, 2004. The
increase in net income primarily reflects an increase in net sales, partially
offset by an increase in cost of sales. The increase in net sales primarily
reflects increased sales of green coffee.
"We are pleased with our incremental quarter to quarter growth and
anticipate additional revenue growth in 2006," said Andrew Gordon, President and
Chief Executive Officer. "Our overall business base continues to broaden and we
continue to experience growth in green coffee sales, private label coffee sales
and branded coffee sales, all three of our primary lines of business."
"We are extremely excited about the continued growth for our flagship
brand, Cafe Caribe, during fiscal year 2005 as both new customers and new
markets were added during this period. Year to year sales of our most important
brand increased over 20% for the second consecutive year."
"While we were unable to complete an acquisition during 2005, we are
hopeful that we will be able to take advantage of strategic opportunities in the
near future."
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.
BALANCE SHEETS
OCTOBER 31, 2005 AND 2004
2005 2004
------------ ------------
- ASSETS -
CURRENT ASSETS:
Cash $ 735,468 $ 642,145
Due from broker 2,994,394 873,901
Accounts receivable, net of allowance for doubtful accounts of $420,349 and
$150,349 for 2005 and 2004, respectively 5,159,576 4,005,755
Inventories 4,496,578 2,258,289
Prepaid expenses and other current assets 419,224 676,395
Deferred tax asset 318,600 136,900
------------ ------------
TOTAL CURRENT ASSETS 14,123,840 8,593,385
Property and equipment, at cost, net of accumulated depreciation of $3,727,524 and
$3,354,418 for 2005 and 2004, respectively 2,379,952 2,286,936
Deposits and other assets 41,521 33,496
------------ ------------
TOTAL ASSETS $ 16,545,313 $ 10,913,817
============ ============
- LIABILITIES AND STOCKHOLDERS' EQUITY -
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 4,431,577 $ 4,658,836
Current portion of term loan -- 252,000
Current portion of obligations under capital lease 1,329 111,060
Line of credit borrowings 1,063,167 2,685,045
Income taxes payable - current 218,864 160,000
------------ ------------
TOTAL CURRENT LIABILITIES 5,714,937 7,866,941
Obligations under capital lease, net of current portion -- 5,855
Income taxes payable - deferred 53,700 45,200
Deferred compensation payable 135,054 --
------------ ------------
TOTAL LIABILITIES 5,903,691 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 3,309,069 2,123,934
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 10,641,622 2,995,821
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'S EQUITY $ 16,545,313 $ 10,913,817
============ ============
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COFFEE HOLDING CO., INC.
CONDENSED STATEMENTS OF INCOME
THREE AND TWELVE MONTHS ENDED OCTOBER 31, 2005 AND 2004
(Unaudited)
Twelve Months Ended Three Months Ended
October 31, October, 31
2005 2004 2005 2004
------------ ------------ ------------ ------------
NET SALES $ 41,545,345 $ 28,030,389 $ 12,529,155 $ 9,452,861
COST OF SALES 33,875,973 20,927,506 10,218,366 7,034,811
------------ ------------ ------------ ------------
GROSS PROFIT 7,669,372 7,102,883 2,310,789 2,418,050
------------ ------------ ------------ ------------
OPERATING EXPENSES:
Selling and administrative 4,854,018 4,746,895 1,052,349 1,655,785
Bad Debt Expense 270,000 30,914 -- 30,914
Officers' salaries 574,245 622,573 174,974 252,149
------------ ------------ ------------ ------------
TOTALS 5,698,263 5,400,382 1,227,323 1,938,848
------------ ------------ ------------ ------------
INCOME FROM OPERATIONS 1,971,109 1,702,501 1,083,466 479,202
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE)
Interest income 50,363 11,966 24,937 2,771
Interest expense (110,684) (145,930) (22,554) (8,084)
------------ ------------ ------------ ------------
(60,321) (133,964) 2,383 (5,313)
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES 1,910,788 1,568,537 1,085,849 473,889
Provision for income taxes 725,653 693,195 453,474 211,095
------------ ------------ ------------ ------------
NET INCOME $ 1,185,135 $ 875,342 $ 632,375 $ 262,794
============ ============ ============ ============
Basic and diluted earnings per share $ .25 $ .22 $ .11 $ .07
============ ============ ============ ============
Weighted average common shares outstanding:
Basic 4,721,327 3,999,650 5,529,830 3,999,650
============ ============ ============ ============
Diluted 4,776,757 3,999,650 5,577,167 3,999,650
============ ============ ============ ============
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COFFEE HOLDING CO., INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED OCTOBER 31, 2005 AND 2004
2005 2004
------------ ------------
OPERATING ACTIVITIES:
Net income $ 1,185,135 $ 875,342
Adjustments to reconcile net income to net cash (used in) provided by
operating activities:
Depreciation and amortization 373,106 363,612
Bad debts 270,000 30,914
Deferred taxes (173,200) (27,200)
Changes in operating assets and liabilities:
Due from broker (2,120,493) 20,222
Accounts receivable (1,423,821) (1,881,986)
Inventories (2,238,289) (476,865)
Prepaid expenses and other current assets 551,929 (244,963)
Accounts payable and accrued expenses (227,259) 2,797,389
Income taxes payable 58,864 160,000
Deferred compensation payable (135,054) --
------------ ------------
Net cash (used in) provided by operating activities (3,879,082) 1,616,465
------------ ------------
INVESTING ACTIVITIES:
Purchases of property and equipment (466,122) (1,039,479)
Security deposits (8,025) (16,700)
------------ ------------
Net cash (used in) investing activities (474,147) (1,056,179)
------------ ------------
FINANCING ACTIVITIES:
Principal payments on term loan (252,000) (84,000)
Net proceeds from IPO 6,436,016 --
Advances under bank line of credit 27,754,052 28,108,814
Principal payments under bank line of credit (29,375,930) (27,715,835)
Principal payments of obligations under capital leases (115,586) (221,306)
Payments to related parties -- (79,646)
------------ ------------
Net cash provided by financing activities 4,446,552 8,027
------------ ------------
NET INCREASE IN CASH 93,323 568,313
Cash, beginning of year 642,145 73,832
------------ ------------
CASH, END OF YEAR $ 735,468 $ 642,145
============ ------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:
Interest paid $ 103,286 $ 145,930
============ ============
Income taxes paid $ 460,744 $ 370,850
============ ============
On June 10, 2005, 10,000 shares of restricted stock valued at $24,650 were
issued for services to be rendered.
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