Coffee Holding Company (JVA)

[polkamatic]

Coffee Holding Co., Inc. today announced its operating results for the three months ended January 31, 2013.
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"We are pleased with our results for the quarter.In the first fiscal quarter of 2012, we recorded record revenue of $56.6 million, which was more than 121% of the first fiscal quarter of 2011 revenue and well in excess of any previous fiscal first quarter and not consistent with our historical growth.We believe this year's level of sales of $31.3 million in the first fiscal quarter of 2013, while below the first fiscal quarter of 2012, is more normalized from a historical perspective. Excluding 2012, our revenue for the first quarter of 2013 well exceeded previous first fiscal quarter results. In the first fiscal quarters of 2011, 2010, 2009, and 2008, we had revenues of $25.6 million, $21.4 million, $18.9 million, $15.0 million, respectively. In addition, during this quarter our gross margins increased on a percentage basis from 7.9% to 11.8% reflecting our efforts to increase our profit margins which we believe will result in greater future profitability for the company. We also believe this is a successful result given the negative impact on our profitability attributable to our withdrawal of our investment in Global Mark during the quarter," noted Andrew Gordon, our President and CEO.

"We experienced growth in key areas compared to the first quarter of fiscal 2012, most importantly on the branded and private label sides of the business. We believe it is the growth in these two areas that will ultimately enable us to achieve the targeted annualized gross profit level of nine percent for our 2013 fiscal year. A more favorable revenue mix is the first step for overall increased margins. We also believe coffee prices will rebound in the second half of 2013, helping to improve both our revenues and profits on the sales of wholesale green coffee. We anticipate a more normalized growth pattern on a going forward basis, while we remain focused on margin expansion and new business opportunities," stated Mr. Gordon.

Results of Operations

The Company had net income of $937,537, or $0.15 per share basic and $0.14 diluted, for the three months ended January 31, 2013 compared to net income of $1,578,345 or $0.25 per share basic and $0.24 diluted, for the three months ended January 31, 2012. The decrease in net income primarily reflects lower sales for the period year over year and the write off involving the Company's investment in Global Mark partially offset by higher gross margins of 11.8% during the three month period.

Net sales totaled $31,318,804 for the three months ended January 31, 2013, a decrease of $25,282,880, or 44.7%, from $56,601,684 for the three months ended January 31, 2012. The decrease in net sales primarily reflects lower coffee prices as well as reduced volumes of wholesale green coffee sales during the three month period.

Cost of sales for the three months ended January 31, 2013 was $27,636,207 or 88.2% of net sales, as compared to $52,151,940 or 92.1% of net sales for the three months ended January 31, 2012. The decrease in cost of sales reflects a shift in our overall business to a higher percentage of roasted coffee sales which tend to be more profitable on a percentage basis than our green coffee.

Total operating expenses increased by $65,686, or 3.6%, to $1,895,178 for the three months ended January 31, 2013 as compared to operating expenses of $1,829,492 for the three months ended January 31, 2012. The increase in operating expenses was due to increases in selling and administrative expense of $82,907 partially offset by a decrease in officers' salaries of $17,221.

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 throughout 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. 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. 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, coffee prices, pricing of our products, 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.