COFFEE HOLDING CO INC - FORM 8-K - EX-99.1 - PRESS RELEASE - March 9, 2012

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8-K - CURRENT REPORT - COFFEE HOLDING CO INCjva_8k.htm
EXHIBIT 99.1
 
Coffee Holding Co., Inc. Reports Results for the Three Months Ended January 31, 2012

STATEN ISLAND, N.Y., March 9, 2012 (GLOBE NEWSWIRE) -- Coffee Holding Co., Inc. (“Coffee Holding” or the “Company”) (Nasdaq:JVA) today announced its operating results for the three months ended January 31, 2012.  In this release, the Company:
 
●
Reports sales growth of 120% which increased to net sales of $56,601,684 for the three months ended January 31, 2012 and $25,641,093 for the three months ended January 31, 2011; and
 
●
Reports net income of $1,578,345, or $0.25 per share basic and $0.24 per share diluted, for the three months ended January 31, 2012 compared to net income of $1,041,072, or $0.19 per share (basic and diluted), for the three months ended January 31, 2011.
 
Results of Operations

The Company had net income of $1,578,345, or $0.25 per share basic and $0.24 diluted, for the three months ended January 31, 2012 compared to net income of $1,041,072 or $0.19 per share (basic and diluted), for the three months ended January 31, 2011.  The increase in net income primarily reflects increased gross profit.

Net sales totaled $56,601,684 for the three months ended January 31, 2012, an increase of $30,960,591, or 120%, from $25,641,093 for the three months ended January 31, 2011.  The increase in net sales primarily reflects higher sales prices compared to the first quarter of fiscal 2011 and an increase in sales of green coffee, as well as an increase in private label and branded sales.

Cost of sales for the three months ended January 31, 2012 was $52,151,940 or 92.1% of net sales, as compared to $22,560,399 or 87.9% of net sales for the three months ended January 31, 2011.  The increase in cost of sales reflects the increased cost of sales, as well as the shift in our overall business to a higher percentage of green coffee sales as compared to roasted coffee sales which tend to be less profitable on a percentage basis than our roasted products.

Total operating expenses increased by $143,396, or 8.5%, to $1,829,492 for the three months ended January 31, 2012 as compared to operating expenses of $1,686,096 for the three months ended January 31, 2011.  The increase in operating expenses was due to increases in selling and administrative expense of $176,088 partially offset by a decrease in officers’ salaries of $32,692.

“We are pleased to report a strong quarter in both revenues and earnings to our shareholders.  We continue to see growth in all areas of our business as continued historically high coffee prices have not affected demand.  Increased sales on our flagship brand, Café Caribe, have come through new outlets of distribution as four new major supermarket chains have taken on the product since the start of the year.  Private label sales continue to grow as well, with consumers looking to save as the economy is still on the mend.  In addition green coffee sales increased, as the demand for our high quality Arabicas and Organic coffees remains brisk.  Although our margins remain strong, higher increases in sales of green coffee as compared to increases in private label and branded sales have impacted our overall gross margins.  That said, we will always take growth as long as it is profitable,” said Andrew Gordon, President & CEO.

 
 
 
 
Quarterly Dividend

The Company’s previously announced quarterly cash dividend of $0.03 per share will be paid to stockholders of record as of the close of business on April 17, 2012.  The dividend will be paid on April 30, 2012.

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 throughout 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.  We have 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.  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, coffee prices, pricing of our products, 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, 2012 AND OCTOBER 31, 2011
 
   
January 31, 2012
    
October 31, 2011
  
   
(unaudited)
        
- ASSETS -
CURRENT ASSETS:
            
Cash
   $ 7,362,778     $ 4,244,335  
Accounts receivable, net of allowances of  $269,611 for 2012 and 2011
     17,959,441       16,021,581  
Inventories
     11,978,110       13,475,855  
Prepaid green coffee
     236,718       388,754  
Prepaid expenses and other current assets
     231,911       275,679  
Prepaid and refundable income taxes
     110,215       377,972  
Deferred income tax asset
     254,441       896,400  
TOTAL CURRENT ASSETS
     38,133,614       35,680,576  
Machinery and equipment, at cost, net of accumulated depreciation of $2,302,384 and  $2,191,566 for 2012 and 2011, respectively
     1,605,531       1,661,759  
Customer list and relationships, net of accumulated amortization of $13,125 and $11,250 for 2012 and 2011, respectively
     136,875       138,750  
Trademarks
     180,000       180,000  
Goodwill
     440,000       440,000  
Deferred income tax asset
     7,059       -  
Deposits and other assets
     883,679       677,606  
TOTAL ASSETS
   $ 41,386,758     $ 38,778,691  
- LIABILITIES AND STOCKHOLDERS’ EQUITY -
CURRENT LIABILITIES:
                
Accounts payable and accrued expenses
   $ 15,161,172     $ 12,379,414  
Line of credit
     1,795,998       1,820,109  
Due to broker
     290,264       1,867,558  
Income taxes payable
     36,018       100  
TOTAL CURRENT LIABILITIES
     17,283,452       16,067,181  
                 
Deferred income tax liabilities
     -       35,900  
Deferred rent payable
     151,858       146,921  
Deferred compensation payable
     569,790       538,707  
TOTAL LIABILITIES
     18,005,100       16,788,709  
STOCKHOLDERS’ EQUITY:
                
Coffee Holding Co., Inc. stockholders’ equity:
                
 Preferred stock, par value $.001 per share; 10,000,000 shares authorized; 0 issued
     -       -  
 Common stock, par value $.001 per share; 30,000,000 shares authorized, 6,456,316 shares issued; 6,372,309 shares outstanding for 2012 and 2011
     6,456       6,456  
 Additional paid-in capital
     15,884,609       15,884,609  
 Contingent consideration
     19,500       19,500  
 Retained earnings
     7,652,978       6,268,326  
 Less: Treasury stock, 89,007 common shares, at cost for 2012 and 2011
     (272,133 )     (272,133 )
Total Coffee Holding Co., Inc. Stockholders’ Equity
     23,291,410       21,906,758  
Noncontrolling interest
     90,248       83,224  
  TOTAL EQUITY
     23,381,658       21,989,982  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
   $ 41,386,758     $ 38,778,691  

 
 
 
 
 

COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JANUARY 31, 2012 AND 2011
(Unaudited)

   
2012
    
2011
  
NET SALES
   $ 56,601,684     $ 25,641,093  
                 
COST OF SALES (which includes purchases of approximately $10.5 million and $4.8 million for the three
months ended January 31, 2012 and 2011, respectively from a related party)
     52,151,940       22,560,399  
                 
GROSS PROFIT
     4,449,744       3,080,694  
                 
OPERATING EXPENSES:
                
Selling and administrative
     1,682,334       1,506,246  
Officers’ salaries
     147,158       179,850  
TOTAL
     1,829,492       1,686,096  
                 
INCOME FROM OPERATIONS
     2,620,252       1,394,598  
                 
OTHER INCOME (EXPENSE):
                
Interest income
     13,884       160,586  
Loss from equity investment
     (20,137 )     -  
Interest expense
     (65,730 )     (112,636 )
TOTALS
     (71,983 )     47,950  
                 
INCOME BEFORE PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST IN SUBSIDIARY
     2,548,269       1,442,548  
                 
Provision for income taxes
     962,900       391,417  
                 
                 
NET INCOME BEFORE NONCONTROLLING INTEREST IN SUBSIDIARY
     1,585,369       1,051,131  
Less: Net income attributable to the noncontrolling interest
     (7,024 )     (10,059 )
                 
NET INCOME ATTRIBUTABLE TO COFFEE HOLDING CO., INC.
   $ 1,578,345     $ 1,041,072  
                 
Basic earnings per share
   $ .25     $ .19  
                 
Diluted earnings per share
   $ .24     $ .19  
                 
Dividends declared per share
   $ .03     $ .03  
                 
Weighted average common shares outstanding:
                
Basic
     6,372,309       5,490,823  
Diluted
     6,644,309       5,500,823  

 
 
 
 

COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JANUARY 31, 2012 AND 2011
(Unaudited)

   
2012
    
2011
  
OPERATING ACTIVITIES:
            
Net income
   $ 1,585,369     $ 1,051,131  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation and amortization
     112,693       111,066  
Unrealized (gain) loss on commodities
     (1,577,294 )     154,437  
Loss from equity investment
     20,137       -  
Bad debt expense
     -       -  
Deferred rent
     4,937       5,541  
Deferred income taxes
     599,000       (113,500 )
Changes in operating assets and liabilities:
                
Accounts receivable
     (1,937,860 )     (1,594,361 )
Inventories
     1,497,745       1,276,257  
Prepaid expenses and other current assets
     43,768       119,549  
Prepaid green coffee
     152,036       971,943  
Prepaid and refundable income taxes
     267,757       (123,141 )
Accounts payable and accrued expenses
     2,781,754       158,225  
Deposits and other assets
     4,873       4,872  
Income taxes payable
     35,918       (36,541 )
Net cash provided by operating activities
     3,590,833       1,985,478  
                 
INVESTING ACTIVITIES:
                
Equity investment
     (200,000 )     -  
Purchases of machinery and equipment
     (54,590 )     (132,506 )
Net cash used in investing activities
     (254,590 )     (132,506 )
                 
FINANCING ACTIVITIES:
                
Advances under bank line of credit
     48,525,026       20,690,112  
Principal payments under bank line of credit
     (48,549,137 )     (21,180,002 )
Payment of dividend
     (193,689 )     (166,989 )
Net cash used in financing activities
     (217,800 )     (656,879 )
                 
NET INCREASE IN CASH
     3,118,443       1,196,093  
                 
CASH, BEGINNING OF PERIOD
     4,244,335       1,672,921  
                 
CASH, END OF PERIOD
   $ 7,362,778     $ 2,869,014  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:
                
Interest paid
   $ 71,340     $ 116,675  
Income taxes paid
   $ 60,225     $ 659,773  

 

CONTACT: 
Coffee Holding Co., Inc.
Andrew Gordon, President & CEO
(718) 832-0800



 

COFFEE HOLDING CO INC Reports