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
OPERATIONSSIX AND THREE MONTHS ENDED APRIL 30,
2022 AND 2021(Unaudited)
|
|
Six Months EndedApril 30, |
|
|
Three Months EndedApril 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
FLOWSSIX 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 |
) |
Coffee (NASDAQ:JVA)
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Coffee (NASDAQ:JVA)
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De Jun 2023 a Jun 2024