Coffee Holding Co., Inc. Reports Third Quarter and Nine Month Earnings.BROOKLYN Brooklyn (br  k`lĭn), borough of New York City (1990 pop. 2,300,664), 71 sq mi (184 sq km), coextensive with Kings co., SE N.Y. , N.Y. -- Coffee Holding Co., Inc. (AMEX AMEXSee: American Stock Exchange :JVA JVA Justizvollzugsanstalt (German: Prison) JVA Joint Venture Agreement JVA Joint Vibration Analysis (diagnostic aid for the temporomandibular joint) JVA Joint Voluntary Agency JVA Joint Venture Accounting ) today announced its operating results for the three and nine months ended July July: see month. 31, 2006. In this release, the Company: --Reports sales growth of 10.0% for the quarter and 30.0% for the nine month period; --Reports a $627,000 increase in net income for the quarter and a $138,000 decrease in net income for the nine month period; and --Reports net income of $0.03 per share for the quarter and $0.08 per share for the nine months ended July 31, 2006. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight totaled $11.9 million for the three months ended July 31, 2006, an increase of $1.1 million, or 10.0%, from $10.8 million for the quarter ended July 31, 2005. Net sales for the nine months ended July 31, 2006 equaled $37.7 million, an increase of $8.7 million, or 30.0%, from $29.0 million during the nine months ended July 31, 2005. The increase in net sales for the three and nine month periods was due to an increase in pounds of coffee sold due to increased sales of the Company's private label, branded and specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. green coffees. Net income was $179,000, or $0.03 per share, for the three months ended July 31, 2006 compared to a net loss of $448,000, or ($0.08) per share, for the three months ended July 31, 2005. The increase in net income primarily reflects an increase in gross profit and decreased operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Net income decreased by $138,000 to $415,000, or $0.08 per share for the nine months ended July 31, 2006 compared to $553,000, or $.12 per share, for the nine months ended July 31, 2005. The decrease in net income reflects increased cost of sales and lower margins on the Company's branded and private label products due to market conditions. A loss by the Company's Cafe La Rica joint venture also negatively impacted net income for the three and nine month periods ended July 31, 2006. "Although outside market conditions and the overall economic landscape continue to present challenges, we are pleased with our quarterly results," said Andrew Gordon Andrew Gordon is a prominent scholar of modern Japanese history. He is a faculty member at Harvard University and chairs the Department of History there. Selected works
"Since the Cafe La Rica joint venture is a start-up Start-up The earliest stage of a new business venture. operation that has been in existence for only a few months, we are not surprised or concerned by its early results which negatively impacted our earnings. Rather, we are pleased that our Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and sales numbers are significantly higher and that our leading brand Cafe Caribe can now be found on the shelves of every major grocery chain in the state. This had been one of our goals from both the outset of our initial public offering and the formation of the joint venture." About Coffee Holding Coffee Holding is a leading integrated wholesale coffee roaster roaster a young fowl for eating; weighs 5 to 7 lb at 6 months of age. and dealer in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. 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 Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and abroad to supermarkets Supermarkets, past and present, include: Transnational Originating (HQ) country first. The rest in alphabetical order.
Any statements that are not historical facts contained in this release are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. It is possible that the assumptions made by management for purposes of such statements may not materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. . Actual results may differ materially from those projected or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in any forward-looking statements. Such statements may involve risks and uncertainties, including but not limited to those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date on which such statement is made.
COFFEE HOLDING CO., INC.
CONDENSED BALANCE SHEETS
JULY 31, 2006 AND OCTOBER 31, 2005
July 31, October 31,
2006 2005
------------ ------------
(unaudited)
- ASSETS -
CURRENT ASSETS:
Cash $ 3,039,506 $ 735,468
Due from brokers 3,170,874 2,994,394
Accounts receivable, net of allowance for
doubtful accounts of $425,770 and
$420,349 for 2006 and 2005, respectively 5,067,933 5,159,576
Inventories 4,214,884 4,496,578
Prepaid expenses and other current assets 568,832 284,170
Deferred tax asset 245,000 318,600
------------ ------------
TOTAL CURRENT ASSETS 16,307,029 13,988,786
Property and equipment, at cost, net of
accumulated depreciation of $4,056,485 and
$3,727,524 for 2006 and 2005, respectively 2,208,631 2,379,952
Investment in joint ventures 614,394 -
Deposits and other assets 366,669 176,575
------------ ------------
TOTAL ASSETS $19,496,723 $16,545,313
============ ============
- LIABILITIES AND STOCKHOLDERS' EQUITY -
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 4,625,829 $ 4,431,577
Line of credit borrowings 3,562,549 1,063,167
Current portion of obligations under
capital lease - 1,329
Income taxes payable - current - 218,864
------------ ------------
TOTAL CURRENT LIABILITIES 8,188,378 5,714,937
Deferred compensation payable 225,669 135,054
Income taxes payable - deferred 26,200 53,700
------------ ------------
TOTAL LIABILITIES 8,440,247 5,903,691
------------ ------------
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 and outstanding for 2006
and 2005, respectively 5,530 5,530
Additional paid-in capital 7,327,023 7,327,023
Retained earnings 3,723,923 3,309,069
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 11,056,476 10,641,622
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $19,496,723 $16,545,313
============ ============
COFFEE HOLDING CO., INC.
CONDENSED STATEMENTS OF OPERATIONS
NINE AND THREE MONTHS ENDED JULY 31, 2006 AND 2005
(Unaudited)
Nine Months Ended Three Months Ended
July 31, July, 31
2006 2005 2006 2005
------------ ------------ ------------ ------------
NET SALES $37,714,354 $29,016,190 $11,858,581 $10,782,680
COST OF SALES 32,584,566 23,657,607 9,916,930 9,749,222
------------ ------------ ------------ ------------
GROSS PROFIT 5,129,788 5,358,583 1,941,651 1,033,458
------------ ------------ ------------ ------------
OPERATING EXPENSES:
Selling and
administrative 3,916,707 3,801,669 1,414,412 1,420,090
Bad debt
expense 5,421 270,000 5,421 270,000
Officers'
salaries 408,155 399,271 135,975 135,975
------------ ------------ ------------ ------------
TOTALS 4,330,283 4,470,940 1,555,808 1,826,065
------------ ------------ ------------ ------------
INCOME (LOSS) FROM
OPERATIONS 799,505 887,643 385,843 (792,607)
------------ ------------ ------------ ------------
OTHER INCOME
(EXPENSE)
Interest income 90,907 25,426 33,618 18,219
Equity in loss of
joint venture (74,611) - (69,289) -
Interest expense (80,951) (88,130) (42,726) (24,908)
------------ ------------ ------------ ------------
(64,655) (62,704) (78,397) (6,689)
------------ ------------ ------------ ------------
INCOME (LOSS)
BEFORE INCOME
TAXES 734,850 824,939 307,446 (799,296)
(Provision)
benefit for
income taxes (319,996) (272,179) (127,996) 351,421
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 414,854 $ 552,760 $ 179,450 $ (447,875)
============ ============ ============ ============
Basic and diluted
earnings (loss)
per share $ .08 $ .12 $ .03 $ (.08)
============ ============ ============ ============
COFFEE HOLDING CO., INC.
CONDENSED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED JULY 31, 2006 AND 2005
(Unaudited)
2006 2005
------------- ------------
OPERATING ACTIVITIES:
Net income $ 414,854 $ 552,760
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 328,962 281,409
Bad debts 5,421 270,000
Deferred taxes 46,100 (77,000)
Loss from joint venture 74,611 -
Changes in operating assets and
liabilities:
Due from brokers (176,480) (1,281,036)
Accounts receivable 86,222 (334,705)
Inventories 281,694 (1,301,542)
Prepaid expenses and other current
assets (284,662) 266,425
Accounts payable and accrued
expenses 194,252 (1,977,786)
Other assets (99,479) -
Income taxes payable (218,864) (160,000)
------------- ------------
Net cash provided by (used in) operating
activities 652,631 (3,761,475)
------------- ------------
INVESTING ACTIVITIES:
Purchases of property and equipment (157,641) (357,936)
Security deposits - (8,025)
Investment in joint ventures (689,005) -
------------- ------------
Net cash (used in) investing activities (846,646) (365,961)
------------- ------------
FINANCING ACTIVITIES:
Principal payments on term loan - (252,000)
Advances under bank line of credit 31,322,458 17,315,427
Net proceeds from IPO - 6,436,016
Principal payments under bank line of
credit (28,823,076) (18,672,311)
Principal payments of obligations under
capital leases (1,329) (107,699)
------------- ------------
Net cash provided by financing activities 2,498,053 4,719,433
------------- ------------
NET INCREASE IN CASH 2,304,038 591,997
Cash, beginning of year 735,468 642,145
------------- ------------
CASH, END OF PERIOD $ 3,039,506 $ 1,234,142
============= ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:
Interest paid $ 36,034 $ 81,495
============= ============
Income taxes paid $ 269,784 $ 297,145
============= ============
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