Coffee Holding Co., Inc. Reports Results for Fiscal Quarter Ending January 31, 2022

3/17, 10:37 PM (Source: GlobeNewswire)

STATEN ISLAND, New York, March 17, 2022 (GLOBE NEWSWIRE) -- Coffee Holding Co., Inc. (Nasdaq: JVA) (the “Company”) today announced its operating results for the fiscal quarter ended January 31, 2022:

Net Sales. Net sales totaled $16,704,860 for the three months ended January 31, 2022, a decrease of $1,428,977, or 7.9%, from $18,133,837 for the three months ended January 31, 2021. The decrease in net sales was due to an approximately $1,323,000 decline in sales from the Company’s Generations/Steep N Brew subsidiary due to loss of customers.

Cost of Sales. Cost of sales for the three months ended January 31, 2022 was $12,433,252, or 74.4% of net sales, as compared to $13,654,169, or 75.3% of net sales, for the three months January 31, 2021. Cost of sales consists primarily of the cost of green coffee and packaging materials and realized and unrealized gains or losses on hedging activity. The decrease in cost of sales was due to the Company’s decreased sales.

Gross Profit. Gross profit for the three months ended January 31, 2022 amounted to $4,271,608 or 25.6% of net sales, as compared to $4,479,668 or 24.7% of net sales, for the three months ended January 31, 2021. The increase in gross profits on a percentage basis was attributable to the factors listed above.

Operating Expenses. Total operating expenses increased by $407,592 to $3,720,878 for the three months ended January 31, 2022 from $3,313,286 for the three months ended January 31, 2021. Selling and administrative expenses increased by $409,680 and officers’ salaries decreased by $2,088. Operating expenses increased primarily due to increases of approximately $213,000 in professional fees, $55,000 in freight costs and $139,000 in labor costs, partially offset by decreases in various other operating expense categories.

“We recorded a profit of $0.05 per share in the first quarter of 2022 compared to a profit of $0.12 per share in the first quarter of 2021. Although our gross profit margin increased from 24.7% to 25.6% compared to last year, the increase in our operating expenses amounted to an additional $0.07 per share, as inflationary headwinds had a negative effect on the company’s performance for the quarter. Although our gross profit margins were healthy by our historical standards, increases in freight, labor and the cost of steel prevented additional margin expansion during the three months ended January 31, 2022. Further, higher legal expenses of approximately $213,000 incurred during the quarter as a result of ongoing class action lawsuits negatively affected our results. Adjusted EBITDA for the quarter was approximately $804,000, including a non-cash charge of approximately $190,000 relating to our stock option plan. Fortunately, we expect these expenses will be lower in both our second and third quarters, amounting to $172,000 and $42,000, respectively, before being completely expensed prior to the start of our fourth fiscal quarter of 2022,” said Andrew Gordon, President and CEO of Coffee Holding Company.

“The decrease in our net sales was entirely due to the continued loss of customers from our Steep N Brew subsidiary while sales in our private label and branded coffee products in the legacy Coffee Holding division were steady compared to the first quarter of fiscal 2021, as sales to existing and new customers remained strong at the grocery channel level. However, sales of green coffee to smaller and medium size roasters declined during the period as many of our smaller roaster customers cut back on purchases and chose to purchase green coffee on a ‘hand-to-cup’, or as-needed, basis due to the elevated prices of green coffee compared to the prices in fiscal 2021,” continued Andrew Gordon.

“Overall, our business does remain strong despite of the current inflationary environment and we believe our sales, along with our profit margins will continue to improve throughout fiscal 2022,” 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 the revenue growth and the Company’s outlook on the launch of CBD-infused coffee and functional beverages. 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 our control, and which may cause our 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. 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. 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
JANUARY 31, 2022 AND OCTOBER 31, 2021

  January 31, 2022  October 31, 2021 
  (Unaudited)    
- ASSETS -        
CURRENT ASSETS:        
Cash and cash equivalents $4,016,775  $3,696,275 
Accounts receivable, net of allowances of $144,000 for 2021 and 2020  8,542,166   9,299,978 
Inventories  16,816,240   15,961,866 
Due from broker  581,381   725,000 
Prepaid expenses and other current assets  649,293   542,224 
Prepaid and refundable income taxes  72,202   75,952 
TOTAL CURRENT ASSETS  30,678,057   30,301,295 
         
Building machinery and equipment, net  2,567,236   2,662,628 
Customer list and relationships, net of accumulated amortization of $247,819 and $237,131 for 2022 and 2021, respectively  437,181   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  370,519   402,245 
Investment - other  2,500,000   2,500,000 
Deferred income tax asset - net  93,186   77,394 
Right of Use Asset  3,443,105   3,545,786 
Deposits and other assets  508,086   449,225 
TOTAL ASSETS $43,518,905  $43,312,927 
         
- LIABILITIES AND STOCKHOLDERS’ EQUITY -        
CURRENT LIABILITIES:        
Accounts payable and accrued expenses $3,150,300  $5,047,640 
Line of credit – current portion  5,400,850   3,800,850 
Due to broker  631,469   708,321 
Note payable – current portion  4,200   4,200 
Lease liability – current portion  311,475   340,400 
Dividend payable  399,000   - 
Income taxes payable  564,599   416,449 
TOTAL CURRENT LIABILITIES  10,461,893   10,317,860 
         
Lease liabilities  3,239,638   3,299,784 
Note payable – long term  11,785   13,092 
Deferred compensation payable  301,976   311,872 
TOTAL LIABILITIES  14,015,292   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 for 2022 and 2021; 5,708,599 shares outstanding for 2022 and 2021  6,634   6,634 
Additional paid-in capital  18,878,565   18,688,797 
Retained earnings  14,353,085   14,471,222 
Less: Treasury stock, 925,331 common shares, at cost for 2022 and 2021  (4,633,560)  (4,633,560)
Total Coffee Holding Co., Inc. Stockholders’ Equity  28,604,724   28,533,093 
Noncontrolling interest  898,889   837,226 
TOTAL EQUITY  29,503,613   29,370,319 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $43,518,905  $43,312,927 


COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JANUARY 31, 2022 AND 2021
(Unaudited)

  2022  2021 
NET SALES $16,704,860  $18,133,837 
         
COST OF SALES (which includes purchases of approximately $1.2 million and $0.7 million in fiscal years 2022 and 2021, respectively, from a related party)  12,433,252   13,654,169 
         
GROSS PROFIT  4,271,608   4,479,668 
         
OPERATING EXPENSES:        
Selling and administrative  3,569,740   3,160,060 
Officers’ salaries  151,138   153,226 
TOTAL  3,720,878   3,313,286 
         
INCOME FROM OPERATIONS  550,730   1,166,382 
         
OTHER INCOME (EXPENSE):        
Interest income  1,537   410 
Loss from equity method investments  (31,725)  (2,598)
Interest expense  (40,610)  (26,669)
TOTAL  (70,798)  (28,857)
         
INCOME BEFORE PROVISION FOR INCOME TAXES AND NON-CONTROLLING INTEREST IN SUBSIDIARY  479,932   1,137,525 
         
Provision for income taxes  137,406   381,243 
         
NET INCOME BEFORE NON-CONTROLLING INTEREST IN SUBSIDIARY  342,526   756,282 
Less: Net income attributable to the non-controlling interest in subsidiary  (61,663)  (78,970)
         
NET INCOME ATTRIBUTABLE TO COFFEE HOLDING CO., INC. $280,863  $677,312 
         
Basic and diluted earnings earnings per share $.05  $.12 
         
Weighted average common shares outstanding:        
Basic and diluted  5,708,599   5,708,599 


COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JANUARY 31, 2022 AND 2021
(Unaudited)

  2022  2021 
OPERATING ACTIVITIES:        
         
Net income $342,526  $756,282 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:        
Depreciation and amortization  155,759   168,191 
Stock-based compensation  189,768   189,768 
Unrealized loss (gain) on commodities  66,767   (415,075)
Loss on equity method investments  31,726   2,598 
Amortization of right to use asset  102,681   112,587 
Deferred income taxes  (15,792)  180,649 
Changes in operating assets and liabilities:        
Accounts receivable  757,812   (399,548)
Inventories  (854,374)  1,403,694 
Prepaid expenses and other current assets  (107,069)  (19,408)
Prepaid and refundable income taxes  3,750   85,114 
Lease liability  (89,071)  (124,044)
Deposits and other assets  (68,757)  - 
Accounts payable and accrued expenses  (1,897,340)  708,929 
Income taxes payable  148,150   115,411 
Net cash (used in) provided by operating activities  (1,233,464)  2,765,148 
         
INVESTING ACTIVITIES:        
Purchases of machinery and equipment  (44,729)  (66,151)
Net cash used in investing activities  (44,729)  (66,151)
         
FINANCING ACTIVITIES:        
Advances under bank line of credit  1,600,000   910 
Principal payments on note payable  (1,307)  (1,246)
Principal payments under bank line of credit  -   (2,845,000)
Net cash provided by (used in) financing activities  1,598,693   (2,845,336)
         
NET INCREASE (DECREASE) IN CASH  320,500   (146,339)
         
CASH, BEGINNING OF PERIOD  3,696,275   2,875,120 
         
CASH, END OF PERIOD $4,016,775  $2,728,781 


  2022  2021 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:        
Interest paid $36,853  $31,406 
Income taxes paid $1,298  $69 


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) $280,863 
Addback:
Interest expense
  40,610 
Income tax provision  137,406 
Depreciation and amortization  155,759 
Stock compensation  189,768 
Total adjusted EBITDA $804,406 


Primary Logo

Copyright GlobeNewswire, Inc. 2016. All rights reserved.
You can register yourself on the website to receive press releases directly via e-mail to your own e-mail account.