EX-99.1 2 v106928_ex99-1.htm
FOR IMMEDIATE RELEASE
Contact: Andrew Gordon, President & CEO
Telephone: (718) 832-0800

Coffee Holding Co., Inc. Reports First Quarter Earnings

BROOKLYN, New York - March 14, 2008. Coffee Holding Co., Inc. (AMEX: JVA) today announced its operating results for the quarter ended January 31, 2008. In this release, the Company:
 
Ÿ
Reports net sales of $14,962,541 for the three months ended January 31, 2008;
   
Ÿ
Reports sales growth of 18.4% for the three months ended January 31, 2008 compared to the three months ended January 31, 2007;
   
Ÿ
Reports net income of $182,265 for the three months ended January 31, 2008; and
   
Ÿ
Reports net income of $0.03 per share (basic and diluted) for the three months ended January 31, 2008.

Net sales totaled $14,962,541 for the three months ended January 31, 2008, an increase of $2,327,429, or 18.4%, from $12,635,112 for the three months ended January 31, 2007. The increase in net sales reflects both increased amounts of green coffee and private label coffee sold as well as increased sales prices compared to the first quarter of fiscal 2007.
 
Net income decreased by $127,419 to $182,265 for the three months ended January 31, 2008 from $309,684 for the three months ended January 31, 2007. The decrease in net income primarily resulted from increased cost of sales during the quarter that outpaced our increased net sales for the quarter. Increased cost of sales was also partially offset by decreased operating expenses and decreased other expense. Net income equaled $0.03 per share (basic and diluted) for the three months ended January 31, 2008 compared to $0.06 per share (basic and diluted) for the three months ended January 31, 2007.
 
“Our first quarter’s results were in line with our expectations, as we were able to achieve an acceptable level of profitability on increased revenues,” said Andrew Gordon, President and Chief Executive Officer. “However, I believe that recent events in the outside commodity markets may adversely affect our bottom line in the near term. During the month of February, prices in all commodities, including Arabica and Robusta coffee, soared over 20% in a few weeks time. These price appreciations, which are not only inflationary but ‘bubble like’ in their current forms, have negatively impacted our profit margins for a significant portion of our business. While we have been able to obtain [large] price concessions from most of our customers, these price increases will not have a positive impact until late in our second quarter at the earliest. In addition, the volatility in the markets has prevented us from successfully implementing our hedging strategies. Until this volatility abates, I believe our ability to execute our past strategies will be hampered.”

“Whether current conditions prove to be an aberration or a long term event we are not certain, but in light of these events we have begun the process of closely evaluating our overall business with an eye towards taking any steps necessary to maintain acceptable levels of profitability. Our balance sheet remains strong and we will continue to build on our core business base. I believe that our horizontally integrated business model will ultimately ensure our long term success in almost any business, economic or hostile market environment,” noted Mr. Gordon.

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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.

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COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
JANUARY 31, 2008 AND OCTOBER 31, 2007
 
   
January 31, 2008
  
October 31,
2007
  
   
(unaudited)
      
- ASSETS -
  
CURRENT ASSETS:
          
Cash
  
$
1,089,041
  
$
890,649
  
Commodities held at broker
    
3,082,871
    
3,468,530
  
Accounts receivable, net of allowances of $127,464 and $136,781 for 2008 and 2007, respectively
   
5,543,343
    
7,130,467
  
Inventories
    
4,709,513
    
4,472,097
  
Prepaid expenses and other current assets
    
483,649
    
502,240
  
Prepaid and refundable income taxes
    
108,712
    
236,406
  
Deferred income tax assets
    
270,000
    
279,000
  
TOTAL CURRENT ASSETS
    
15,287,129
    
16,979,389
  
               
Property and equipment, at cost, net of accumulated depreciation of $4,601,266 and $4,542,490 for 2008 and 2007, respectively
    
2,640,353
    
2,651,960
  
Deposits and other assets
    
742,016
    
765,368
  
TOTAL ASSETS
  
$
18,669,498
  
$
20,396,717
  
               
- LIABILITIES AND STOCKHOLDERS’ EQUITY -
CURRENT LIABILITIES:
              
Accounts payable and accrued expenses
  
$
4,968,590
  
$
6,791,690
  
Line of credit borrowings
    
889,253
    
897,191
  
Dividend payable
    
1,544,568
    
-
 
Income taxes payable
    
7,005
    
9,161
  
TOTAL CURRENT LIABILITIES
    
7,409,416
    
7,698,042
  
               
Deferred income tax liabilities
    
127,500
    
145,000
  
Deferred compensation payable
    
380,559
    
351,332
  
TOTAL LIABILITIES
    
7,917,475
    
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; 5,497,130 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
    
3,584,164
    
4,946,467
  
Less: Treasury stock, 32,700 and 14,900 common shares, at cost for 2008 and 2007, respectively
    
(164,694
)
  
(76,677
)
TOTAL STOCKHOLDERS’ EQUITY
   
10,752,023
    
12,202,343
  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  
$
18,669,498
  
$
20,396,717
  
 
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COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
THREE MONTHS ENDED JANUARY 31, 2008 AND 2007
(Unaudited)
 
   
2008
  
2007
  
NET SALES
  
$
14,962,541
  
$
12,635,112
  
               
COST OF SALES
    
13,082,423
    
10,466,517
  
               
GROSS PROFIT
    
1,880,118
    
2,168,595
  
               
OPERATING EXPENSES:
              
Selling and administrative
    
1,378,924
    
1,390,690
  
Writedown of amount due from dissolved joint venture
    
-
   
242,000
  
Officers’ salaries
    
161,377
    
117,012
  
TOTALS
    
1,540,301
    
1,749,702
  
               
INCOME FROM OPERATIONS
    
339,817
    
418,893
  
               
OTHER INCOME (EXPENSE):
              
Interest income
    
24,271
    
34,116
  
Equity in loss from dissolved joint venture
    
-
   
(63,939
)
Writedown of investment in dissolved joint venture
    
-
   
(33,000
)
Management fee income
    
-
   
12,026
  
Interest expense
    
(29,006
)
  
(24,232
)
TOTALS
    
(4,735
)
  
(75,029
)
               
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST IN SUBSIDIARY
    
335,082
    
343,864
  
               
Provision for income taxes
    
142,051
    
37,850
  
               
INCOME BEFORE MINORITY INTEREST
    
193,031
    
306,014
  
               
Minority interest in earnings (loss) of subsidiary
   
(10,766
)
  
3,670
  
               
NET INCOME
    
182,265
    
309,684
  
               
Retained earnings - beginning
    
4,946,467
    
4,009,151
  
Dividend declared
    
(1,544,568
)
  
-
 
               
RETAINED EARNINGS - ENDING
  
$
3,584,164
  
$
4,318,835
  
               
Basic and diluted earnings per share
  
$
.03
  
$
.06
  
               
Weighted average common shares outstanding:
              
Basic
    
5,506,326
    
5,529,830
  
Diluted
    
5,576,326
    
5,599,830
  
 
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COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JANUARY 31, 2008 AND 2007
(Unaudited)
 
   
2008
  
2007
  
OPERATING ACTIVITIES:
          
Net income
  
$
182,265
  
$
309,684
  
Adjustments to reconcile net income to net cash provided by operating activities:
              
Depreciation and amortization
    
119,572
    
60,630
  
Writedown of amount due from dissolved joint venture
    
-
   
242,000
  
Loss from dissolved joint venture
    
-
   
63,939
  
Writedown of investment in dissolved joint venture
    
-
   
33,000
  
Deferred income taxes
    
(8,500
)
  
(229,200
)
Changes in operating assets and liabilities:
              
Commodities held at broker
    
385,659
    
1,375,961
  
Accounts receivable
    
1,587,124
    
1,916,454
  
Inventories
    
(237,416
)
  
(561,482
)
Prepaid expenses and other assets
    
18,591
    
84,362
  
Prepaid and refundable income taxes
    
127,694
    
256,672
  
Accounts payable and accrued expenses
    
(1,823,100
)
  
(867,450
)
Due from dissolved joint venture
    
-
   
(183,232
)
Deposits and other assets
    
41,813
    
(132,557
)
Income taxes payable
    
(2,156
)
  
-
 
Net cash provided by operating activities
    
391,546
    
2,368,781
  
               
INVESTING ACTIVITIES:
              
Purchases of property and equipment
    
(107,965
)
  
(92,091
)
Net cash (used in) investing activities
    
(107,965
)
  
(92,091
)
               
FINANCING ACTIVITIES:
              
Advances under bank line of credit
    
14,282,082
    
11,103,226
  
Principal payments under bank line of credit
    
(14,290,020
)
  
(12,660,888
)
Purchase of treasury stock
    
(88,017
)
  
-
 
Net cash (used in) financing activities
    
(95,955
)
  
(1,557,662
)
               
MINORITY INTEREST
    
10,766
    
(3,670
)
             
NET INCREASE IN CASH
    
198,392
    
715,358
  
               
Cash, beginning of year
    
890,649
    
1,112,165
  
               
CASH, END OF PERIOD
  
$
1,089,041
  
$
1,827,523
  
               
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:
              
Interest paid
  
$
19,515
  
$
18,642
  
Income taxes paid
  
$
24,962
  
$
3,550
  
               
NONCASH INVENTORY AND FINANCING ACTIVITIES:
              
On January 31, 2008, the Company declared dividends in the amount of $1,544,568.
              

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