• Coffee Holding Co., Inc. Reports 14% Increase in Net Sales, But Records Small Net Loss Due to Losses at Steep N Brew Subsidiary

    ソース: Nasdaq GlobeNewswire / 14 6 2022 16:24:00   America/Chicago

    STATEN ISLAND, New York, June 14, 2022 (GLOBE NEWSWIRE) -- Coffee Holding Co., Inc. (Nasdaq: JVA) (the “Company”) today announced its operating results for the fiscal quarter ended April 30, 2022:

    Net Sales. Net sales totaled $16,498,169 for the three months ended April 30, 2022, an increase of $2,029,611, or 14.0%, from $14,468,558 for the three months ended April 30, 2021. The increase in net sales was due to an increase of sales to the Company’s legacy customers partially offset by a decrease in sales from the Company’s Generations/Steep N Brew subsidiary.

    Cost of Sales. Cost of sales for the three months ended April 30, 2022 was $14,505,415, or 87.9% of net sales, as compared to $10,699,090, or 74% of net sales, for the three months April 30, 2021. The increase in cost of sales was due to the Company’s increased sales to the Company’s legacy customers, increased prices of green coffee and packaging materials and the Company’s continued losses from the Company’s Generations/Steep N Brew subsidiary, which included obsolete inventory write-off of approximately $718,000.

    Gross Profit. Gross profit for the three months ended April 30, 2022 amounted to $1,992,754 or 12.1% of net sales, as compared to $3,769,468 or 26.1% of net sales, for the three months ended April 30, 2021. The decrease in gross profits on a percentage basis was attributable to the factors listed above.

    Operating Expenses. Total operating expenses increased by $50,899 to $3,366,223 for the three months ended April 30, 2022 from $3,315,324 for the three months ended April 30, 2021. Selling and administrative expenses increased by $53,399 and officers’ salaries decreased by $2,500.

    Net (Loss) Income. The Company had a net loss of $368,096 or $(0.06) per share basic and diluted, for the three months ended April 30, 2022 compared to net income of $357,044, or $0.06 per share basic and diluted for the three months ended April 30, 2021. The decrease in net income was due primarily to the continued losses from the Company’s Generations/Steep N Brew subsidiary.

    “Although we increased sales by approximately $2.0 million or 14.0% compared to last year and business remained strong in both the Coffee Holding legacy and Optco divisions, we recorded a loss of $0.06 per share for this fiscal period, primarily as a result of an operating loss at our Generations/Steep N Brew division. After several periods of losses at Generations/Steep N Brew, stemming from increasing costs, impacts of the COVID pandemic and poor performance, we are now looking to restructure the operational activities at Generations/Steep N Brew. Unfortunately, we incurred write offs relating to accounts receivables, inventory and packaging materials at this division, resulting in an operating loss of approximately $508,000 (net of tax) or $0.09 per share,” said Andrew Gordon, President and CEO of Coffee Holding Company.

    “Moving forward, I believe we have a clear direction on how to grow both our sales and profits as we had in the past by focusing on sales of unroasted green coffee beans to small and medium size roasters, sales of private label products to large wholesalers and retailers and a continued push on our own legacy brands. I believe this has been and will continue to be a winning formula in our efforts to grow both our sales and profits. We have increased our sales now for seven consecutive months compared to the prior year despite low meaningful sales from our Generations/Steep N Brew subsidiary, including a 14% increase this quarter and I anticipate that trend will continue in spite of the inflationary headwinds that many of our green coffee customers now face. We appreciate our shareholders’ loyalty and patience and we look forward to a clearer path forward in the immediate future,” concluded Mr. Gordon.

    About Coffee Holding

    Coffee Holding Co., Inc. 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. 

    Forward looking statements

    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, including the Company’s outlook on its revenue growth and operations. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond the Company’s control, and which may cause the Company’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. The Company has 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. Such statements may involve risks and uncertainties, including but not limited to those relating to product demand, pricing, market acceptance, hedging activities, the effect of economic conditions, the effect of any pandemics including the one caused by Covid-19, 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.

    Company Contact

    Coffee Holding Co., Inc.

    Andrew Gordon

    President & CEO

    718-832-0800


    COFFEE HOLDING CO., INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS

      April 30, 2022  October 31, 2021 
      (Unaudited)    
    - ASSETS -        
    CURRENT ASSETS:        
    Cash $3,025,137  $3,696,275 
    Accounts receivable, net of allowances of $144,000 for 2022 and 2021  7,335,947   9,299,978 
    Inventories  15,972,528   15,961,866 
    Prepaid expenses and other current assets  430,938   542,224 
    Due from broker  261,250   725,000 
    Prepaid and refundable income taxes  375,417   75,952 
    TOTAL CURRENT ASSETS  27,401,217   30,301,295 
             
    Building machinery and equipment, net  3,277,216   2,662,628 
    Customer list and relationships, net of accumulated amortization of $255,444 and $237,131 for 2022 and 2021, respectively  429,556   447,869 
    Trademarks and tradenames  408,000   408,000 
    Non-compete, net of accumulated amortization of $74,250 and $69,300 for 2022 and 2021, respectively  24,750   29,700 
    Goodwill  2,488,785   2,488,785 
    Equity method investments  366,444   402,245 
    Investment - other  2,500,000   2,500,000 
    Deferred income tax asset - net  114,961   77,394 
    Right of Use Asset  3,365,837   3,545,786 
    Deposits and other assets  508,522   449,225 
    TOTAL ASSETS $40,885,288  $43,312,927 
             
    - LIABILITIES AND STOCKHOLDERS’ EQUITY -        
    CURRENT LIABILITIES:        
    Accounts payable and accrued expenses $2,623,805  $5,047,640 
    Line of credit – current portion  5,900,000   3,800,850 
    Lease liability – current portion  191,374   340,400 
    Note payable – current portion  4,200   4,200 
    Due to broker  132,125   708,321 
    Income taxes payable  6,214   416,449 
    TOTAL CURRENT LIABILITIES  8,857,718   10,317,860 
             
    Lease liabilities  3,295,876   3,299,784 
    Note payable – long term  10,461   13,092 
    Deferred compensation payable  302,412   311,872 
    TOTAL LIABILITIES  12,466,467   13,942,608 
    Commitments and Contingencies        
    STOCKHOLDERS’ EQUITY:        
    Coffee Holding Co., Inc. 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, 6,633,930 shares issued as of April 30, 2022 and October 31, 2021; 5,708,599 shares outstanding as of April 30, 2022 and October 31, 2021  6,634   6,634 
    Additional paid-in capital  19,052,806   18,688,797 
    Retained earnings  13,984,989   14,471,222 
    Less: Treasury stock, 925,331 common shares, at cost as of April 30, 2022 and October 31, 2021  (4,633,560)  (4,633,560)
    Total Coffee Holding Co., Inc. Stockholders’ Equity  28,410,869   28,533,093 
    Non-controlling interest  7,952   837,226 
    TOTAL EQUITY  28,418,821   29,370,319 
    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $40,885,288  $43,312,927 


    COFFEE HOLDING CO., INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    SIX AND THREE MONTHS ENDED APRIL 30, 2022 AND 2021
    (Unaudited)

      Six Months Ended
    April 30,
      Three Months Ended
    April 30,
     
      2022  2021  2022  2021 
    NET SALES $33,203,029  $32,602,395  $16,498,169  $14,468,558 
                     
    COST OF SALES  26,938,669   24,353,356   14,505,415   10,699,090 
                     
    GROSS PROFIT  6,264,360   8,249,039   1,992,754   3,769,468 
                     
    OPERATING EXPENSES:                
    Selling and administrative  6,784,824   6,321,651   3,215,085   3,161,686 
    Officers’ salaries  302,275   306,863   151,138   153,638 
    TOTAL  7,087,099   6,628,514   3,366,223   3,315,324 
                     
    (LOSS) INCOME FROM OPERATIONS  (822,739)  1,620,525   (1,373,469)  454,144 
                     
    OTHER (EXPENSE) INCOME                
    Interest income  4,094   929   2,556   519 
    Loss from equity method investment  (35,801)  (3,915)  (4,075)  (1,317)
    Interest expense  (90,293)  (43,507)  (49,683)  (16,839)
    TOTAL  (122,000)  (46,493)  (51,202)  (17,637)
                     
    (LOSS) INCOME BEFORE (BENEFIT) PROVISION FOR INCOME TAXES AND NON-CONTROLLING INTEREST IN SUBSIDIARY  (944,739)  1,574,032   (1,424,671)  436,507 
                     
    (Benefit) provision for income taxes  (248,275)  510,329   (385,681)  129,086 
                     
    NET (LOSS) INCOME BEFORE NON-CONTROLLING INTEREST IN SUBSIDIARY  (696,464)  1,063,703   (1,038,990)  307,421 
    Less: Net loss (income) attributable to the non-controlling interest  609,231   (29,348)  670,894   49,623 
                     
    NET INCOME (LOSS) ATTRIBUTABLE TO COFFEE HOLDING CO., INC. $(87,233) $1,034,355  $(368,096) $357,044 
                     
    Basic and diluted (loss) earnings per share $(.02) $.18  $(.06) $.06 
                     
    Weighted average common shares outstanding:                
    Basic and diluted  5,708,599   5,708,599   5,708,599   5,708,599 


    COFFEE HOLDING CO., INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    SIX MONTHS ENDED APRIL 30, 2022 AND 2021
    (Unaudited)

      2022  2021 
    OPERATING ACTIVITIES:        
             
    Net (loss) income $(696,464) $1,063,703 
    Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:        
    Depreciation and amortization  280,594   337,353 
    Stock-based compensation  364,009   379,537 
    Unrealized gain on commodities  (112,446)  (559,408)
    Loss on equity method investments  35,801   3,915 
    Write-off of accounts receivable  415,096   - 
    Write-down of obsolete inventory  718,353   - 
    Amortization of right of use asset  179,949   226,155 
    Deferred income taxes  (37,567)  154,550 
    Changes in operating assets and liabilities:        
    Accounts receivable  1,548,935   709,476 
    Inventories  (949,058)  1,935,996 
    Prepaid expenses and other current assets  111,286   (173,177)
    Prepaid and refundable income taxes  (299,465)  91,684 
    Accounts payable and accrued expenses  (2,423,835)  970,875 
    Deposits and other assets  (68,757)  (100,000)
    Change in lease liability  (152,934)  (248,980)
    Income taxes payable  (410,235)  255,611 
    Net cash (used in) provided by operating activities  (1,496,738)  5,047,290 
             
    INVESTING ACTIVITIES:        
    Purchases of machinery and equipment  (871,919)  (597,444)
    Net cash used in investing activities  (871,919)  (597,444)
             
    FINANCING ACTIVITIES:        
    Advances under bank line of credit  2,500,000   15,563 
    Principal payments on note payable  (2,631)  (2,507)
    Payment of dividend  (399,000)  - 
    Principal payments under bank line of credit  (400,850)  (3,809,885)
    Net cash provided by (used in) financing activities  1,697,519   (3,796,829)
             
    NET (DECREASE) INCREASE IN CASH  (671,138)  653,017 
             
    CASH, BEGINNING OF PERIOD  3,696,275   2,875,120 
             
    CASH, END OF PERIOD $3,025,137  $3,528,137 


      2022  2021 
    SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:        
    Interest paid $84,967  $54,943 
    Income taxes paid $498,992  $8,485 
             
    SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:        
             
    Purchase of inventory by non-controlling interest $220,043     
    Initial recognition of operating lease right of use asset  -  $65,999 
    Initial recognition of operating lease liabilities  -  $65,999 


    RECONCILIATION OF NON-GAAP FINANCIAL MEASURE

    To supplement Coffee Holding’s consolidated financial statements presented in accordance with U.S. GAAP, Coffee Holding uses a non-GAAP measure, Adjusted Earnings Before Interest, Income Taxes (benefits), Depreciation and Amortization (Adjusted EBITDA). This non-GAAP measure is provided to enhance overall understanding of Coffee Holding’s current financial performance. Reconciliation of the nearest GAAP measure to Adjusted EBITDA follows:

    Net income (GAAP measure) $(368,096)
    Addback:
    Interest expense
      49,683 
    Income tax provision  (385,681)
    Depreciation and amortization  124,835 
    Stock compensation  174,241 
    Total adjusted EBITDA $(405,018)


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