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Coffee Holding Co., Inc. Reports Results for Three Months Ended January 31, 2021
来源: Nasdaq GlobeNewswire / 17 3月 2021 08:00:01 America/Chicago
STATEN ISLAND, New York, March 17, 2021 (GLOBE NEWSWIRE) -- Coffee Holding Co., Inc. (Nasdaq: JVA) (the “Company”) today announced its operating results for the three months ended January 31, 2021:
Net Sales. Net sales totaled $18,133,837 for the three months ended January 31, 2021, a decrease of $1,151,664, or 6%, from $19,285,501 for the three months ended January 31, 2020. The decrease in net sales was due to the COVID-19 pandemic which caused many of the Company’s green coffee customers who service the restaurant and food service industries to either remain closed or suspend their business operations during the period resulting in lost revenues from that segment of the Company’s customer base.
Cost of Sales. Cost of sales for the three months ended January 31, 2021 was $13,654,169, or 75.3% of net sales, as compared to $16,170,747, or 83.8% of net sales, for the three months January 31, 2020. Cost of sales consists primarily of the cost of green coffee and packaging materials and realized and unrealized gains or losses on hedging activity. The decrease in cost of sales was due to the Company’s decreased sales partially offset by its favorable green coffee position and hedging.
Gross Profit. Gross profit for the three months ended January 31, 2021 amounted to $4,479,668 or 24.7% of net sales, as compared to $3,114,754 or 16.2% of net sales, for the three months ended January 31, 2020. The increase in gross profits was attributable to increased margins on the Company’s roasted and branded products partially due to the movement of lower cost green coffee inventory built up in previous quarters
Operating Expenses. Total operating expenses decreased by $361,767 to $3,313,286 for the three months ended January 31, 2021 from $3,675,053 for the three months ended January 31, 2020. Selling and administrative expenses decreased by $344,743 and officers’ salaries decreased by $17,024. The company’s efforts to control costs through the elimination of redundancy in its operations and the elimination of certain unnecessary variable costs were the primary reasons for this decrease. These efforts were partially offset by stock compensation expense of $189,000 and the increase in the Company’s freight costs as it increased and expanded its product distribution.
Net Income. The Company had net income of $677,312 or $0.12 per share basic and diluted, for the three months ended January 31, 2021 compared to a net loss of $599,848, or $0.11 per share basic and diluted for the three months ended January 31, 2020. The increase in net income was due primarily to the reasons described above.
“We are pleased to begin the new fiscal year by reporting a big improvement in our operating results,” stated Andrew Gordon, Chief Executive Officer of Coffee Holding Co. “With last quarter’s inventory write-downs from our Generations/Steep & Brew subsidiary behind us, we were able to earn net income of $677,312, or $0.12 a share, as our profit margins improved substantially compared to last quarter. Adjusted EBITDA was $1,443,183 in the current quarter. With the price of green coffee at three year highs, we are no longer experiencing the downward pricing pressure of the previous three years which saw coffee prices languish below a $1 per pound for extended periods of time,” continued Mr. Gordon. “Those low commodity prices had a negative impact on the margins of our sales of green unroasted beans as well as forcing us to discount prices of our private label and branded products to remain competitive in a low priced national retail coffee environment.
“In addition, during the first quarter of 2021, we also reduced our operating expenses by approximately 10% as our past efforts to control costs had a positive impact on our operations during the quarter. We also were able to absorb the stock option compensation expense of $189,000 incurred during this quarter, and with only two quarters of expenses remaining, we are two thirds of the way home to eliminating this expense which resulted from our previous grant of stock options under our option plan,” said Mr. Gordon.
“Although sales decreased by approximately 6% compared to the first quarter of last year, we believe that as businesses continue to reopen, and the new customers we were able to attract over the last several months, we will begin to see a return of positive quarter over quarter revenue growth.
“Lastly, we have nearly completed our initial testing of our CBD infused single serve cups and are hopeful that we will be able to begin offering these for sale to our customers during the second calendar quarter of 2021,” 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 the revenue growth and the Company’s outlook on the launch of CBD-infused coffee and functional beverages. 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 our control, and which may cause our 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. We have 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
718-832-0800COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
JANUARY 31, 2021 AND OCTOBER 31, 2020January 31, 2021 October 31, 2020 (Unaudited) - ASSETS - CURRENT ASSETS: Cash $ 2,728,781 $ 2,875,120 Accounts receivable, net of allowances of $144,000 for 2021 and 2020 7,808,453 7,408,905 Inventories 15,699,299 17,102,993 Prepaid expenses and other current assets 509,654 490,246 Prepaid and refundable income taxes 60,191 145,305 TOTAL CURRENT ASSETS 26,806,378 28,022,569 Machinery and equipment, at cost, net of accumulated depreciation of $7,763,417 and $7,610,864 for 2021 and 2020, respectively 2,110,917 2,197,319 Customer list and relationships, net of accumulated amortization of $205,067 and $194,379 for 2021 and 2020, respectively 479,933 490,621 Trademarks and tradenames 1,488,000 1,488,000 Non-compete, net of accumulated amortization of $54,450 and $49,500 for 2021 and 2020, respectively 44,550 49,500 Goodwill 2,488,785 2,488,785 Equity method investments 558,807 561,405 Deferred income tax asset 664,276 782,175 Right of Use Asset 2,001,641 2,114,228 Deposits and other assets 275,097 285,548 TOTAL ASSETS $ 36,918,384 $ 38,480,150 - LIABILITIES AND STOCKHOLDERS’ EQUITY - CURRENT LIABILITIES: Accounts payable and accrued expenses $ 3,745,026 $ 3,036,097 Lease liability – current portion 360,119 484,163 Note payable – current portion 3,829 5,075 Due to broker 37,250 452,325 Income taxes payable 120,782 5,371 TOTAL CURRENT LIABILITIES 4,267,006 3,983,031 Deferred income tax liabilities 945,332 882,582 Line of credit 952,732 3,796,822 Lease liability 1,780,306 1,780,306 Note payable – long term 17,292 17,292 Deferred compensation payable 266,097 276,548 TOTAL LIABILITIES 8,228,765 10,736,581 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 for 2021 and 2020; 5,708,599 shares outstanding for 2021 and 2020 6,634 6,634 Additional paid-in capital 18,119,492 17,929,724 Retained earnings 13,893,180 13,215,868 Less: Treasury stock, 925,331 common shares, at cost for 2021 and 2020 (4,633,560 ) (4,633,560 ) Total Coffee Holding Co., Inc. Stockholders’ Equity 27,385,746 26,518,666 Noncontrolling interest 1,303,873 1,224,903 TOTAL EQUITY 28,689,619 27,743,569 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 36,918,384 $ 38,480,150 COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JANUARY 31, 2021 AND 2020
(Unaudited)2021 2020 NET SALES $ 18,133,837 $ 19,285,501 COST OF SALES (which includes purchases of approximately $0.7 million and $1.3 million in fiscal years 2021 and 2020, respectively, from a related party) 13,654,169 16,170,747 GROSS PROFIT 4,479,668 3,114,754 OPERATING EXPENSES: Selling and administrative 3,160,060 3,504,803 Officers’ salaries 153,226 170,250 TOTAL 3,313,286 3,675,053 INCOME (LOSS) FROM OPERATIONS 1,166,382 (560,299 ) OTHER INCOME (EXPENSE): Interest income 410 744 Loss from equity method investments (2,598 ) (1,311 ) Interest expense (26,669 ) (55,734 ) TOTAL (28,857 ) (56,301 ) INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES AND NON-CONTROLLING INTEREST IN SUBSIDIARY 1,137,525 (616,600 ) Provision (benefit) for income taxes 381,243 (65,416 ) NET INCOME (LOSS) BEFORE NON-CONTROLLING INTEREST IN SUBSIDIARY 756,282 (551,184 ) Less: Net income attributable to the non-controlling interest in subsidiary (78,970 ) (48,664 ) NET INCOME (LOSS) ATTRIBUTABLE TO COFFEE HOLDING CO., INC. $ 677,312 $ (599,848 ) Basic and diluted earnings (loss) earnings per share $ .12 $ (.11 ) Weighted average common shares outstanding: Basic and diluted 5,708,599 5,569,349 COFFEE HOLDING CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JANUARY 31, 2021 AND 2020
(Unaudited)2021 2020 OPERATING ACTIVITIES: Net income (loss) $ 756,282 $ (551,184 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 168,191 187,793 Stock-based compensation 189,768 248,031 Unrealized (gain) loss on commodities (415,075 ) 985,837 Loss on equity method investments 2,598 1,311 Amortization of right to use asset 112,587 106,961 Change in lease liability (124,044 ) (117,468 ) Deferred income taxes 180,649 (213,102 ) Changes in operating assets and liabilities: Accounts receivable (399,548 ) 811,251 Inventories 1,403,694 785,372 Prepaid expenses and other current assets (19,408 ) (26,258 ) Prepaid and refundable income taxes 85,114 138,033 Accounts payable and accrued expenses 708,929 (636,344 ) Income taxes payable 115,411 217 Net cash provided by operating activities 2,765,148 1,720,450 INVESTING ACTIVITIES: Purchases of machinery and equipment (66,151 ) (71,974 ) Net cash used in investing activities (66,151 ) (71,974 ) FINANCING ACTIVITIES: Advances under bank line of credit 910 600,100 Principal payments on note payable (1,246 ) Principal payments under bank line of credit (2,845,000 ) (1,900,000 ) Net cash used in financing activities (2,845,336 ) (1,299,900 ) NET (DECREASE) INCREASE IN CASH (146,339 ) 348,576 CASH, BEGINNING OF PERIOD 2,875,120 2,402,556 CASH, END OF PERIOD $ 2,728,781 $ 2,751,132 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, Earnings Before Interest, Income taxes (benefits), Depreciation and Amortization adjusted for stock compensation expense (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) $ 677,312 Add back:
Interest expense26,669 Income tax 381,243 Depreciation and amortization 168,191 Stock compensation 189,768 Total adjusted EBITDA $ 1,443,183