EX-99.1 2 jva_ex991.htm POWER POINT PRESENTATION jva_ex991.htm
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Coffee Holding Co., Inc.
NASDAQ:JVA
 
 
 

 
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Safe Harbor Statement
This presentation contains certain forward-looking statements. Additional written and oral forward-looking
statements may be made by the Company from time to time in Securities and Exchange Commission (SEC)
filings and otherwise. The Private Securities Litigation Reform Act of 1995 provides a safe-harbor for forward-
looking statements. These statements may be identified by the use of forward-looking words or phrases
including, but not limited to, “anticipate”, “believe”, “expect”, “project”, “intend”, “may”, “planned”,
“potential”, “should”, “will” or “would”. The Company cautions readers that results predicted by forward-
looking statements, including, without limitation, those relating to the Company’s future business
prospects, revenues, working capital, liquidity, capital needs, order backlog, interest costs and income are
subject to certain risks and uncertainties that could cause actual results to differ materially from those
indicated in the forward-looking statements.
Specific risks and uncertainties include, but are not limited to those set forth under Item 1A, “Risk Factors”, of
the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the
SEC. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a
result of new information, future events or otherwise.
 
 

 
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Company Snapshot
 Family Operated Business - 35+ years
 May 2005 IPO (AMEX:JVA - $5.00)
 Moved to NASDAQ - March 16, 2010
 Only horizontally integrated company in the industry
 Core Business -Private Label Coffee, Branded Coffee and
 Specialty Green Coffee
 “ONE STOP SHOP” for our customer’s coffee requirements
 10/31/11 sales - $146.7 Million
¹
(1) For the year ended October 31, 2011
 
 

 
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Key Statistics
Market Statistics
Stock Price 2/27/2012
 $ 8.05
Shares Outstanding (Diluted)
 6.4
52 Week High
 $ 30.98
Market Capitalization (Diluted)
 $ 51.5
52 Week Low
 $ 3.90
Plus Debt¹
 $ 1.8
Avg. Daily Volume (3 mo.)
 327,390
Less Cash¹
 $ 4.2
Shares Outstanding (Basic)
 6.4
Enterprise Value
 $ 49.1
Ownership %²
David Gordon, EVP Operations
 14.8 %
Andrew Gordon, CEO
 14.0
Bridgeway Capital Management
 3.1
Oxford Asset Management
 1.6
Morgan Stanley
 0.7
Dimensional Fund
 0.7
D.E. Shaw
 0.6
LTM Stock Price and Volume
(1) As of October 31, 2011
(2) Source: Thomson One
 
 

 
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  Our key management team has over 50 years experience in
 the coffee industry
  Andrew Gordon, President and CEO
  Employed by Coffee Holding for over 26 years
  Procures all green coffee and trades the commodity market on a daily basis
  Oversees both the branded and private label sales areas
  David Gordon, Executive Vice President
  Employed by Coffee Holding for over 28 years
  Main contact with GMCR
  Travels extensively to origin (Central and South America)
  Founding member of SCAA (Specialty Coffee Association of America)
  Head of CHC Quality Control
Experienced Management Team
 
 

 
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Investment Highlights
 National distribution with platform for growth
 Positioned to profitably grow through varying cycles of the coffee
 market
 Favorable industry trends
 Strong customers and alliances
 Diverse portfolio of branded coffees
 Significant revenue and income growth
 Strong balance sheet
 Experienced management team
 
 

 
7
Overview
  Coffee Holding Company is one of the leading manufacturers
 of private label coffee in the U.S. We pack for wholesalers and
 retailers located throughout the Continental U.S., Canada and
 Pacific Rim. We have grown our customer base for over forty
 (40) years and enjoy the reputation for being both quality and
 service oriented. Our focus as a private label coffee roaster is to
 give our customers the best available beans at a reasonable cost
 to ensure them a quality product in both taste and price which
 will build business and develop a dedicated loyal customer base
.
 
 

 
Strong Industry Growth
8
U.S. Coffee Imports Continue Upward Path¹
(Billion $)
 
 

 
What Makes Us Different?
  CHC is one of the few coffee companies offering a
 broad array of coffee and teas across the
entire
 spectrum
of consumer tastes, price points,
 product types and distribution channels
  Our horizontal integration allows CHC to do well
 under varying economic conditions and market
 trends
(demand for coffee relatively inelastic:
 amounts consumed don’t change, only
 consumption patterns change)
 
 

 
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Full Suite Of Products
  Retail branded coffee
  Mainstream retail private label coffee
  Specialty retail coffees both private label and branded
  Wholesale specialty green and gourmet whole bean coffees
  Food service
  Instant coffees
  Niche products
 
 

 
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CHC Customer Advantage
  CHC has the capability to roast, grind & pack coffee in
 can/brick pack. Have capability to pack whole
 bean/ground coffee in valve bags
  We are also certified ORGANIC/ FAIR TRADE
  We can provide a agglomerated, crystal, organic
 instant coffees packed in glass/plastic
  We are here to help you “GROW” your business-not
 merely provide product
  We have extensive history in developing successful PL
 coffee programs
  Easy Accessibility-you will have DIRECT contact with
 VP Sales, and President
  Access to IRI/Nielsen data
 
 

 
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Manufacturing Facilities
Coffee Holding has two (2) manufacturing facilities:
La Junta, Co
   Have capacity to roast and ground coffee in can and brick formats
   Can formats - 11, 11.5, 12, 13, 23, 26, 33.9, 34.5,36,39 oz sizes
   Brick format - 8.8, 11, 11.5, 12, 13 oz sizes
   La Junta, CO-50,000 sq ft
Cleveland, OH
  Generations Coffee is the specialty division of Coffee Holding Company
  We roast all of the coffee beans separately by variety and in small controlled batches
  Our flavored coffees are blended with flavoring oils while still whole bean ensuring
 then oils fully integrate the product. The result is a higher quality, more consistent
 flavor profile. Our experts team of roasters and blenders can either duplicate the
 flavor profile of current or competitive products; or we can assist you in creating
 blends and flavor profiles unique to your label
  Generations roasting facility is OCIA International organic certified and produces
 organic coffees in compliance with the National Organic program (NOP). We are
 also Fair Trade Registered and carry an assortment of coffees with these dual
 certifications
 
 

 
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Revenue Mix
  Specialty Green Coffee ~60%
  Unroasted raw beans imported from around
 the world and sold to large and small
 roasters and coffee shop operators
  Private Label Coffee ~25%
  Coffee roasted, blended, packaged under
 customer specifications and sold under a
 white label brand
  Branded Label Coffee ~15%
  Coffee roasted and blended to our
 specifications and packaged and sold under
 our seven proprietary and licensed brands
% of Revenue
¹
(1) Approximate percentages
 
 

 
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Specialty Green Coffee
  Approx. 60% of revenues
  Charter Member of the Specialty Coffee
 Association
  300+ specialty green coffee customers and
 regional roasters, coffee houses, single store
 operations and mall coffee stores.
  Direct contact with specific farmers in
 producing countries to ensure certain
 qualities of Arabica coffees during the year
  25+ year relationship with Green Mountain
 Coffee Roasters.
 
 

 
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  Approx. 25% of revenues
  Roast, Ground, Pack coffee for Retail,
 Wholesale, Mass Mdse, Club under
 their corporate label
  Key customers - Sears (KMart), Family
 Dollar, Associated Wholesaler Grocers,
 Kansas City , Winco, Raley’s, Sunflower
 Markets and Ingles Markets.
Private Label Coffee
 
 

 
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  Approx. 15% of revenues
  Five (5) proprietary brands, Café Caribe,
 Café Supremo, Via Roma, Fifth Avenue
 and Don Manuel 100% Colombian coffee
  License with Del Monte for North
 American rights to S&W Gourmet coffees
Branded Label Coffee
 
 

 
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Branded Coffee Labels
  Café Caribe
  Specialty espresso that targets
 espresso coffee drinkers in the
 Hispanic market
  S&W (Licensed Brand)
  An upscale canned coffee
 established in 1921
  Café Supremo
  A specialty espresso targeting
 espresso drinkers of all
 backgrounds and tastes
  Il Classico (Licensed Brand)
  An unpscale S&W branded
 espresso product
  Fifth Avenue
  A blended coffee that is a
 popular alternative to national
 branded coffee.
  Via Roma
  Italian espresso targeted at
 traditional espresso drinkers
  Don Manuel
  Produced from the finest 100%
 Columbian coffee beans. An
 upscale quality product which
 commands a premium
 
 

 
Recent Acquisition -2010
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  Organic Products Trading Co., Vancouver, WA in April 2010 became a wholly
 owned subsidiary of Coffee Holding Co. OPTCO is one of the largest purveyors of
 top quality sustainable coffees in North America and their over $10.0 million in
 annual revenues has boosted a thriving and successful green coffee sales division.
  In addition, OPTCO’s current customer base of approximately 200 roasters are
 able to purchase the traditional gourmet Arabica coffees from our current
 inventories and our customer base has immediate access to a consistent supply of
 the highest quality Organic and Fair Trade Arabica coffees from a premier
 organization whose specialty has been procuring these coffees from around the
 world over the past twenty plus years.
 
 

 
Joint Ventures
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  Coffee Holding Co., entered into a joint venture with Caruso’s Coffee of Brecksville, Ohio.
 
Generations Coffee Company, LLC, a Delaware limited liability company engages in the
 roasting, packaging and sale of private label specialty coffee products from its Brecksville
 location. Coffee Holding owns 60% of the Joint Venture and Caruso’s Coffee owns 40% of the
 Joint Venture. The profits earned by the Joint Venture are divided among the parties in
 accordance with their respective percentage ownership interests. Coffee Holding is the
 exclusive supplier of coffee inventory for the Joint Venture.  
  This Joint Venture allows us to bid on the private label gourmet whole bean business we
 have not been equipped to pursue from an operational standpoint in the past. With this
 specialty roasting facility in place, in many cases right in the backyard of our most important
 wholesale and retail customers, we are in an ideal position to combine our current canned
 private label business with high-end private label specialty whole bean business. High-end
 specialty whole bean coffee sells for as much as three times more per pound than the canned
 coffees in which we currently specialize.
  GCC was recently awarded the whole bean bag business at Associated Wholesale
 Grocers, Kansas City. This is our 2nd largest bag program after Ingles Markets.
  In November 2011, Coffee Holding Co. entered into a joint venture with Global Mark LLC,
 a new venture focusing on supply of instant coffee and related products.  Coffee Holding owns
 40% of the Joint Venture. 
  This Joint Venture is expected to provide us with direct access to a quality supply of
 instant coffee products, which are integral to our overall product mix to our most important
 wholesale and retail customers.  We also expect to utilize this Joint Venture to grow our
 instant coffee sales and to reduce our annual costs by eliminating the middleman. 
 
 
 

 
Socially Responsible
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  Cup for for Education was founded in 2003 by Karen Gordon, Director of
 Specialty Green Coffee of Coffee Holding Co. Cup is a non-profit with 501 3C
 status. Cup works hard in coffee communities around the world in creating better
 learning environments for some of the poorest children in the world. CFE
 provides books, computers, libraries, teachers and schools.
  Cafe Feminino was founded in 2004 to support women coffee producers in
 Central and South America to take a step toward achieving empowerment. This
 step came in the form of growing, harvesting and producing their own coffee
 called Café Femenino. The Café Femenino Foundation, which provides grants to
 select programs and projects that enhance the lives of women and their families
 in coffee growing communities around the world. The Café Femenino Coffee is
 imported exclusively by OPTCO and distributed by more than 80 roasters whom
 pay a premium above the fair trade price.
  Coffee Holding is a proud sponsor of The Avon Foundation. Also we are a
 Opening Ceremony breakfast sponsor at several of Avon Walk for Breast Cancer
 events throughout the U.S.
 
 

 
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Coffee Holding Company, Inc.
Coffee Market Report
Friday, March 2nd , 2012
 
 
 N.Y. Arabica prices continued to chop around for the second week in a row between $2.01 - 2.07 in the most active
 May contract. Roasters continue to buy futures at current levels, somewhat offsetting the rising differentials out of
 Central America and Colombia. Funds remain heavily short the market and a failure to break the $2.00 level
 nearterm should spark a substantial shortcovering rally.
 London Robusta futures continue to remain firm; although without a N.Y. rally, they could continue to tread water.
 A downward revision for next year’s Vietnam and Uganda crops by a combined 3M bags continues to underscore
 London’s strength.
 Also, world coffee exports fell 10% on the year in January, to 7.99 million 60-kilogram bags, the International Coffee
 Organization said Wednesday. Exports from October to January, the first four months of the 2011-12 crop year,
 decreased by 3% to 32.59 million bags, compared with 33.61 million bags last season.
 
 N.Y. May close - $2.0180
 
 London May close - $.9163
 
 
      Have a Good Weekend,
 
   Andy
  
Weekly “C” Market Report
 
 

 
Growth Strategies - Past & Present
  Selectively pursue strategic acquisitions, alliances, private label
  i.e., Licensing agreement with Del Monte, acquisition of Premier Roasters
  Joint Venture - Generations Coffee
  Acquisition of OPTCO
  Target the U.S. - based Hispanic coffee market, leverage Café Caribe &
 Café Supremo brands
  Hispanic population in U.S. growing at 9x average rate
  Largest minority demographic in U.S.
  Extremely brand loyal
  Drink 4x as much coffee per capita as their Anglo Saxon counterparts
  Continue to expand green coffee sales to medium and larger sized
 Regional roasters
  Develop branded and green coffee sales in Chinese market
  Targeted acquisitions with companies whose profile and business
 philosophies mesh with ours
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Current Trends
  Elevated green unroasted coffee prices
  Forced many small and medium size roasters who in the past have procured
 full lots of coffee from conventional trade houses to now purchase coffee
 from Coffee Holding Co. in order to stretch cash flows and reduce
 commodity market risk exposure
  Smucker’s purchase of Café Bustelo and Café Pilon, two Spanish
 brands
  These two brands compete with our Café Caribe and Café Supremo brands
 and may mark the beginning of ethnic oriented coffees going main stream
  It is likely that after these brands are folded into the Folger’s family, retailers
 will need to carry multiple brands of this category and will view our Café
 Caribe and Café Supremo brands in an increasingly favorable light
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Income Statement