EX-99 2 v025899_ex99.txt Coffee Holding Company, Inc. Reports Third Quarter Earnings BROOKLYN, New York--September 15, 2005--Coffee Holding Company, Inc. (AMEX:JVA) today announced its results for the three and nine month periods ended July 31, 2005, which included 13 weeks. In this release, the company: o Reports sales growth for the quarter of 68.6 percent; o Announces an earnings decrease of $322,420 compared to the three months ended July 31, 2004; o Records earnings per share loss of $(.08); Net sales totaled $10,782,680 for the three months ended July 31, 2005, an increase of $4,386,112 or 68.6 percent from $6,396,568 for the three months ended July 31, 2004. Net earnings decreased $322,420, or 257.0 percent, to $447,875 or $(.08) per share for the three months ended July 31, 2005 compared to $125,455 or $(.03) per share for the three months ended July 31, 2004. Andrew Gordon, President and CEO of Coffee Holding, remarked, "Obviously, we are never going to be satisfied with a losing quarter but quite frankly we remain upbeat. The loss itself was a result of a $270,000 increase in allowance for doubtful accounts receivable and an unrealized hedging loss - marked - to market at the end of the quarter. As of August 31, 2005 the majority of this unrealized loss has been reversed out. However, the coffee market continues to remain extremely volatile. Beyond these two one time events, the quarter was overall a positive considering prices declined by over 20% in roughly a 30 day period." Gordon commented further, "Our sales of specialty green coffee remained high and profitable during the summer months and our branded and private label sales were healthy as well. In addition, we decreased prices by approximately 7% on our branded and private label coffees during this period in response to a price decline by national brands. However, despite the 20% decline in the price of green coffee and pricing pressure from national brands our overall gross margins declined by only 5.6%. In addition, we are extremely pleased with our 68% gain in revenue quarter to quarter." In closing, Gordon stated, "The third quarter is always our toughest. Although there is little seasonality in the coffee business, the threat of a frost in Brazil coupled with vacation and summer malaise makes running a coffee business during the summer months a real challenge. We anticipate a strong rebound in the fourth quarter." 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 through 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. 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. COFFEE HOLDING CO., INC. CONDENSED BALANCE SHEETS JULY 31, 2005 AND OCTOBER 31, 2004
July 31, October 31, 2005 2004 (unaudited) - ASSETS - CURRENT ASSETS: Cash $ 1,234,142 $ 642,145 Due from broker 2,154,937 873,901 Accounts receivable, net of allowance for doubtful accounts of $420,349 for 2005 and $150,349 for 2004 4,070,460 4,005,755 Inventories 3,559,831 2,258,289 Prepaid expenses and other current assets 434,620 676,395 Deferred tax asset 238,200 136,900 ----------- ----------- TOTAL CURRENT ASSETS 11,692,190 8,593,385 Property and equipment, at cost, net of accumulated depreciation of $3,635,827 and $3,354,418 for 2005 and 2004, respectively 2,363,463 2,286,936 Deposits and other assets 41,521 33,496 ----------- ----------- TOTAL ASSETS $14,097,174 $10,913,817 =========== =========== - LIABILITIES AND STOCKHOLDERS' EQUITY - CURRENT LIABILITIES: Current portion of term loan $ -- $ 252,000 Current portion of obligations under capital lease 9,216 111,060 Line of credit borrowings 1,328,161 2,685,045 Accounts payable and accrued expenses 2,681,050 4,658,836 Income taxes payable - current -- 160,000 ----------- ----------- TOTAL CURRENT LIABILITIES 4,018,427 7,866,941 Obligations under capital lease, net of current portion -- 5,855 Income taxes payable - deferred 69,500 45,200 ----------- ----------- TOTAL LIABILITIES 4,087,927 7,917,996 ----------- ----------- 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 and 3,999,650 shares issued and outstanding for 2005 and 2004, respectively 5,530 4,000 Additional paid-in capital 7,327,023 867,887 Retained earnings 2,676,694 2,123,934 ----------- ----------- TOTAL STOCKHOLDERS' EQUITY 10,009,247 2,995,821 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $14,097,174 $10,913,817 =========== =========== -----------------------------------------------------------------------------------------------------------------------------
COFFEE HOLDING CO., INC. CONDENSED STATEMENTS OF INCOME THREE AND NINE MONTHS ENDED JULY 31, 2005 AND 2004 (Unaudited)
Nine Months Ended Three Months Ended July 31, July, 31 2005 2004 2005 2004 ---- ---- ---- ---- NET SALES $ 29,016,190 $ 18,577,528 $ 10,782,680 $ 6,396,568 COST OF SALES 23,657,607 13,892,695 9,749,222 5,421,709 ------------ ------------ ------------ ------------ GROSS PROFIT 5,358,583 4,684,833 1,033,458 974,859 ------------ ------------ ------------ ------------ OPERATING EXPENSES: Selling and administrative 3,801,669 3,091,110 1,420,090 1,036,381 Bad debt expense 270,000 -- 270,000 -- Officers' salaries 399,271 370,424 135,975 123,475 ------------ ------------ ------------ ------------ TOTALS 4,470,940 3,461,534 1,826,065 1,159,856 ------------ ------------ ------------ ------------ INCOME (LOSS) FROM OPERATIONS 887,643 1,223,299 (792,607) (184,997) ------------ ------------ ------------ ------------ OTHER INCOME (EXPENSE) Interest income 25,426 9,195 18,219 2,692 Interest expense (88,130) (137,846) (24,908) (56,250) ------------ ------------ ------------ ------------ (62,704) (128,651) (6,689) (53,558) ------------ ------------ ------------ ------------ INCOME (LOSS) BEFORE INCOME TAXES 824,939 1,094,648 (799,296) (238,555) Provision (benefit) for income 272,179 482,100 (351,421) (113,100) ------------ ------------ ------------ ------------ taxes NET INCOME (LOSS) $ 552,760 $ 612,548 $ (447,875) $ (125,455) ============ ============ ============ ============ Basic and diluted earnings (loss) $ .12 $ .15 $ (.08) $ (.03) ============ ============ ============ ============ per share Weighted average common shares outstanding: Basic 4,448,864 3,999,650 5,332,644 3,999,650 ============ ============ ============ ============ Diluted 4,508,757 3,999,650 5,332,644 3,999,650 ============ ============ ============ ============ ----------------------------------------------------------------------------------------------------------