EX-99.1 2 ex991.htm EXHIBIT 99.1 EXHIBIT 99.1

EXHIBIT 99.1


FOR IMMEDIATE RELEASE

    

Contact:  Andrew Gordon, President & CEO

Telephone:  (718) 832-0800


Coffee Holding Co., Inc. Reports Third Quarter and Nine Month Results


BROOKLYN, New York – September 11, 2008. Coffee Holding Co., Inc. (AMEX: JVA) today announced its operating results for the three and nine months ended July 31, 2008. In this release, the Company:


Ÿ

Reports net sales of $17,598,572 for the quarter and $50,730,554 for the nine months ended July 31, 2008;


Ÿ

Reports sales growth of 26.0% for the quarter and 24.4% for the nine months ended July 31, 2008 compared to the three and nine month periods ended July 31, 2007; and


Ÿ

Reports net income of $551,259 for the quarter and a net loss of $1,310,654 for the nine months ended July 31, 2008.


The Company had net income of $551,259, or $0.10 per share (basic and diluted), for the three months ended July 31, 2008 compared to net income of $370,656, or $0.07 per share (basic and diluted), for the three months ended July 31, 2007.  The increase in net income primarily reflects increased net sales, which resulted in an increase in gross profit. 

The Company had a net loss of $1,310,654, or $0.24 per share (basic and diluted), for the nine months ended July 31, 2008 compared to net income of $1,019,248, or $0.18 per share (basic and diluted), for the nine months ended July 31, 2007.  The net loss reflects increased coffee prices and hedging losses when the price of coffee surged to a ten year high and subsequently collapsed during a 45 day period in February and March of 2008.

Net sales totaled $17,598,572 for the three months ended July 31, 2008, an increase of $3,633,765, or 26.0%, from $13,964,807 for the three months ended July 31, 2007. Net sales totaled $50,730,554 for the nine months ended July 31, 2008, an increase of $9,936,262, or 24.4%, from $40,794,292 for the nine months ended July 31, 2007. The increase in net sales reflects both increased amounts of green coffee, branded coffee and private label coffee sold as well as increased sales prices compared to the third quarter of fiscal 2007.  The increase in net sales also reflects the price increases we implemented in the fourth quarter of fiscal 2007 and the first quarter of fiscal 2008 in response to higher green coffee prices.  

“Following last quarter’s unacceptable results, we are pleased that this quarter is more representative of the health of our overall business.  Although many challenges remain in the overall macro environment in which we operate, we believe that we have taken the necessary steps to achieve the desired results as reflected by our performance in this past quarter,” said President and Chief Executive Officer Andrew Gordon.


“A 26% increase in sales as well as a 48% gain in net income can be attributed to the determined efforts of our management and employees to strengthen our company and increase shareholder value. We will continue to monitor our core business as well as scrutinize the profitability of individual accounts to ensure they meet the criteria designed to achieve similar results going forward and we will not hesitate to make adjustments as we deem needed.”


“With coffee prices having stabilized and the Entenmann’s rollout fully underway, we anticipate further growth in sales and profits in the months ahead,” concluded Mr. Gordon.


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.



1



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.



2



  


COFFEE HOLDING CO., INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


  

 

July 31, 2008

 

 

October 31, 2007

 

  

 

(unaudited)

 

 

(audited)

 

- ASSETS -

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash

 

$

767,783

 

 

$

890,649

 

Commodities held at broker

 

 

986,941

 

 

 

3,468,530

 

Accounts receivable, net of allowance for doubtful accounts of $127,464 and $136,781 for 2008 and 2007, respectively

 

 

6,567,245

 

 

 

7,130,467

 

Inventories

 

 

4,718,773

 

 

 

4,472,097

 

Prepaid expenses and other current assets

 

 

283,393

 

 

 

502,240

 

Prepaid and refundable taxes

 

 

322,812

 

 

 

236,406

 

Deferred income tax asset

 

 

850,000

 

 

 

279,000

 

TOTAL CURRENT ASSETS

 

 

14,496,947

 

 

 

16,979,389

 

  

 

 

 

 

 

 

 

 

Property and equipment, at cost, net of accumulated depreciation of $4,878,850 and  $4,542,490 for 2008 and 2007, respectively

 

 

2,901,232

 

 

 

2,651,960

 

Deposits and other assets

 

 

513,692

 

 

 

765,368

 

               TOTAL ASSETS

 

$

17,911,871

 

 

$

20,396,717

 

  

 

 

 

 

 

 

 

 

- LIABILITIES AND STOCKHOLDERS' EQUITY -

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

5,958,568

 

 

$

6,791,690

 

Line of credit

 

 

2,328,562

 

 

 

897,191

 

Income taxes payable

 

 

-

 

 

 

9,161

 

TOTAL CURRENT LIABILITIES

 

 

8,287,130

 

 

 

7,698,042

 

  

 

 

 

 

 

 

 

 

Deferred income tax liabilities

 

 

64,000

 

 

 

145,000

 

Deferred compensation payable

 

 

414,212

 

 

 

351,332

 

TOTAL LIABILITIES

 

 

8,765,342

 

 

 

8,194,374

 

  

 

 

 

 

 

 

 

 

MINORITY INTEREST

 

 

-

 

 

 

-

 

  

 

 

 

 

 

 

 

 

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 shares issued; 5,452,716 shares outstanding for 2008 and 5,514,930 shares outstanding in 2007

 

 

5,530

 

 

 

5,530

 

Additional paid-in capital

 

 

7,327,023

 

 

 

7,327,023

 

Retained earnings

 

 

2,091,245

 

 

 

4,946,467

 

Less: Treasury stock, 77,114 and 14,900 common shares, at cost for 2008 and 2007, respectively

 

 

(277,269

)

 

 

(76,677

)

TOTAL STOCKHOLDERS’ EQUITY

 

 

9,146,529

 

 

 

12,202,343

 

                 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

17,911,871

 

 

$

20,396,717

 





  

3


  



COFFEE HOLDING CO., INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


  

 

 

 

 

 

 

  

 

Nine Months Ended

July 31,

 

 

Three Months Ended

July, 31

 

  

 

2008

 

 

2007

 

 

2008

 

 

2007

 

NET SALES

 

$

50,730,554

 

 

$

40,794,292

 

 

$

17,598,572

 

 

$

13,964,807

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF SALES

 

 

47,927,963

 

 

 

34,581,004

 

 

 

15,002,037

 

 

 

12,027,277

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

2,802,591

 

 

 

6,213,288

 

 

 

2,596,535

 

 

 

1,937,530

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative

 

 

4,282,961

 

 

 

4,270,646

 

 

 

1,363,607

 

 

 

1,360,846

 

Writedown of amount due from dissolved joint venture

 

 

–

 

 

 

242,000

 

 

 

–

 

 

 

–

 

Officers’ salaries

 

 

461,076

 

 

 

384,302

 

 

 

161,376

 

 

 

149,853

 

TOTALS

 

 

4,744,037

 

 

 

4,896,948

 

 

 

1,524,983

 

 

 

1,510,699

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM OPERATIONS

 

 

(1,941,446

)

 

 

1,316,340

 

 

 

1,071,552

 

 

 

426,831

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

 

49,253

 

 

 

102,226

 

 

 

5,594

 

 

 

35,650

 

Equity in loss from dissolved joint venture

 

 

–

 

 

 

(91,340

)

 

 

–

 

 

 

2,600

 

Writedown of investment in dissolved joint venture

 

 

–

 

 

 

(33,000

)

 

 

–

 

 

 

–

 

Management fee income

 

 

–

 

 

 

12,026

 

 

 

–

 

 

 

–

 

Interest expense

 

 

(95,740

)

 

 

(87,530

)

 

 

(34,307

)

 

 

(31,124

)

TOTAL OTHER INCOME (EXPENSE)

 

 

(46,487

)

 

 

(97,618

)

 

 

(28,713

)

 

 

7,126

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE BENEFIT FROM (PROVISION FOR) INCOME TAX EXPENSE AND MINORITY INTEREST IN SUBSIDIARY

 

 

(1,987,933

)

 

 

1,218,722

 

 

 

1,042,839

 

 

 

433,957

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefit from (provision for) income tax expense

 

 

679,623

 

 

 

(198,493

)

 

 

(490,326

)

 

 

(58,443

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE MINORITY INTEREST

 

 

(1,308,310

)

 

 

1,020,229

 

 

 

552,513

 

 

 

375,514

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minority interest in loss of subsidiary

 

 

(2,344

)

 

 

(981

)

 

 

(1,254

)

 

 

(4,858

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

 

(1,310,654

)

 

 

1,019,248

 

 

 

551,259

 

 

 

370,656

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retained earnings-beginning

 

 

4,946,467

 

 

 

4,009,151

 

 

 

1,539,986

 

 

 

4,657,743

 

Dividends

 

 

(1,544,568

)

 

 

–

 

 

 

–

 

 

 

–

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RETAINED EARNINGS - ENDING

 

$

2,091,245

 

 

$

5,028,399

 

 

$

2,091,245

 

 

$

5,028,399

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic  and diluted earnings (loss) per share

 

$

(.24

)

 

$

.18

 

 

$

.10

 

 

$

.07

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

5,485,136

 

 

 

5,528,708

 

 

 

5,461,242

 

 

 

5,528,708

 

Diluted

 

 

5,485,136

 

 

 

5,528,708

 

 

 

5,461,242

 

 

 

5,528,708

 




  

4


  



COFFEE HOLDING CO., INC.

CONDENSED STATEMENTS OF CASH FLOWS

 (Unaudited)

 

  

 

2008

 

 

2007

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

Net (loss) income

 

$

(1,310,654

)

 

$

1,019,248

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

400,134

 

 

 

272,058

 

Bad debts

 

 

-

 

 

 

31,195

 

Writedown of amount due from dissolved joint venture

 

 

-

 

 

 

242,000

 

Loss from dissolved joint venture

 

 

-

 

 

 

91,340

 

Writedown of investment in dissolved joint venture

 

 

-

 

 

 

33,000

 

Deferred income taxes

 

 

(652,000

)

 

 

(236,600

)

Impairment loss

 

 

-

 

 

 

31,892

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Commodities held at broker

 

 

2,481,589

 

 

 

546,805

 

Accounts receivable

 

 

563,222

 

 

 

1,226,060

 

Inventories

 

 

(246,676

)

 

 

(982,758

)

Prepaid expenses and other current assets

 

 

218,847

 

 

 

(24,326

)

Prepaid and refundable income taxes

 

 

(86,406

)

 

 

269,592

 

Accounts payable and accrued expenses

 

 

(833,122

)

 

 

(905,595

)

Due from dissolved joint venture

 

 

-

 

 

 

(388,372

)

Deposits and other assets

 

 

(47,628

)

 

 

(197,370

)

Income taxes payable

 

 

(9,161

)

 

 

27,756

 

Deferred compensation payable

 

 

62,880

 

 

 

95,048

 

Net cash provided by operating activities

 

 

541,025

 

 

 

1,150,973

 

  

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

   Purchases of property and equipment

 

 

(352,446

)

 

 

(234,291

)

Net cash used in investing activities

 

 

(352,446

)

 

 

(234,291

)

  

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

  Advances under bank line of credit

 

 

46,023,524

 

 

 

36,771,879

 

  Principal payments under bank line of credit

 

 

(44,592,153

)

 

 

(36,640,270

)

  Payment of dividend

 

 

(1,544,568

)

 

 

-

 

  Purchase of treasury stock

 

 

(200,592

)

 

 

(62,748

)

Net cash provided by (used) in financing activities

 

 

(313,789

)

 

 

68,861

 

  

 

 

 

 

 

 

 

 

MINORITY INTEREST

 

 

2,344

 

 

 

981

 

  

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

 

(122,866

)

 

 

986,524

 

  

 

 

 

 

 

 

 

 

Cash, beginning of year

 

 

890,649

 

 

 

1,112,165

 

  

 

 

 

 

 

 

 

 

CASH, END OF PERIOD

 

$

767,783

 

 

$

2,098,689

 

  

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:

 

 

 

 

 

 

 

 

Interest paid

 

$

84,143

 

 

$

35,530

 

Income taxes paid

 

$

23,249

 

 

$

132,506

 

  

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

The Company utilized its deposit for the purchase of machinery and equipment

 

$

296,960

 

 

$

328,388

 






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