STATEN ISLAND, NY--(Marketwired - Mar 6, 2015) - Coffee Holding Co., Inc. (NASDAQ: JVA) today announced its operating results for the three months ended January 31, 2015:

The Company reported net income of $71,801, or $0.01 per share basic and diluted, for the three months ended January 31, 2015, compared to net income of $1,371,740 or $0.22 per share basic and $0.21 per share diluted, for the three months ended January 31, 2014. The decrease in net income reflects a $1.7 million or $0.27 per share unrealized loss on our hedging activities.

Net sales totaled $38,405,979 for the three months ended January 31, 2015, an increase of $11,059,632, or 40%, from $27,346,347 for the three months ended January 31, 2014. The increase in net sales reflects a combination of increased sales of green and roasted coffee along with higher coffee prices year over year.

Cost of sales for the three months ended January 31, 2015 was $36,484,535 or 95.0% of net sales, as compared to $23,227,722 or 84.9% of net sales for the three months ended January 31, 2014. The increase in cost of sales reflects higher prices paid for green coffee during this period compared to the same period during 2014 and a $1.7 million unrealized loss on our hedging activities in the three months ended January 31, 2015 compared to a $1 million gain in the three months ended January 31, 2014.

Gross profit decreased $2,197,181 to $1,921,444 for the three months ended January 31, 2015 as compared to gross profit of $4,118,625 for the three months ended January 31, 2014. Gross profit as a percentage of net sales decreased by 10.1% for the three months ended January 31, 2015, as compared to gross profit as a percentage of net sales for the three months ended January 31, 2014. The decrease in our margins reflects unrealized losses in our hedging activities and higher prices paid for green coffee during this period compared to the same period during 2014.

Total operating expenses decreased by $50,620, or 2.7%, to $1,819,092 for the three months ended January 31, 2015 as compared to operating expenses of $1,869,712 for the three months ended January 31, 2014. The decrease in operating expenses was due to a decrease in selling and administrative expenses of $44,255 and a decrease of $6,365 in officers' salaries.

"In spite of an un-interrupted 15% decline in the price of green coffee during our first quarter, we were able to grow revenues by 40% as increased sales of green coffee and branded products partially offset the decline in the price of green coffee. We have completed our business rationalization process which began in late 2013 as the volatility in the green coffee market forced us to discontinue doing business with several large accounts that were not willing to pay the higher prices that the coffee market was commanding at the time. We did not feel it made sense to do business with such accounts in order to grow the top line at razor thin margins. We believed it was better to concentrate in the areas which have proven to be our strengths in all market conditions, specialty upscale green coffee offerings and growing our Café Caribe brand," said Andy Gordon, President and CEO.

"Whereas we used to have a 50% roasted, 50% wholesale green sales product mix, the shift away from lower margin private label business into these other areas now gives us an 80% to 20% green coffee to roasted sales mix which we believe will be more effective in maintaining profitability, as well as keeping both long and short term costs in check. With the significant change over the last few years from traditional sales of can and bagged products to k-cups and out-of-home consumption, we believe that by supplying the base commodity, green coffee, to our customers, rather than being involved in the manufacturing and marketing sides of selling finished product, we will be able to control costs, improve margins and grow revenues all at the same time," added Mr. Gordon.

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, including the Company's outlook on future margin performance and its share repurchase program. 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, 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.

   
   
COFFEE HOLDING CO., INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED BALANCE SHEETS  
JANUARY 31, 2015 AND OCTOBER 31, 2014  
   
    January 31, 2015     October 31, 2014  
    (Unaudited)        
- ASSETS -  
CURRENT ASSETS:                
Cash   $ 3,519,981     $ 3,782,639  
Accounts receivable, net of allowances of $144,000 for 2015 and 2014     21,295,183       15,419,860  
Inventories     13,562,889       15,210,153  
Prepaid green coffee     218,451       467,155  
Prepaid expenses and other current assets     268,670       260,112  
Prepaid and refundable income taxes     135,946       759  
Deferred income tax asset     819,052       343,657  
TOTAL CURRENT ASSETS     39,820,172       35,484,335  
                 
Machinery and equipment, at cost, net of accumulated depreciation of $3,847,166 and $3,704,802 for 2015 and 2014, respectively     1,885,769       1,991,094  
Customer list and relationships, net of accumulated amortization of $35,625 and $33,750 for 2015 and 2014, respectively     114,375       116,250  
Trademarks     180,000       180,000  
Goodwill     440,000       440,000  
Equity method investments     98,119       97,404  
Deposits and other assets     631,158       643,549  
TOTAL ASSETS   $ 43,169,593     $ 38,952,632  
                 
- LIABILITIES AND STOCKHOLDERS' EQUITY -  
CURRENT LIABILITIES:                
Accounts payable and accrued expenses   $ 8,420,898     $ 8,693,100  
Line of credit     5,498,458       2,498,458  
Due to broker     1,846,733       484,924  
Income taxes payable     474,309       331,051  
TOTAL CURRENT LIABILITIES     16,240,398       12,007,533  
                 
Deferred income tax liabilities     150,052       165,157  
Deferred rent payable     212,744       209,640  
Deferred compensation payable     503,158       515,549  
TOTAL LIABILITIES     17,106,352       12,897,879  
STOCKHOLDERS' EQUITY:                
Coffee Holding Co., Inc. stockholders' equity:                
Preferred stock, par value $.001 per share; 10,000,000 shares authorized; no shares issued and outstanding     -       -  
Common stock, par value $.001 per share; 30,000,000 shares authorized, 6,456,316 shares issued; 6,215,894 shares outstanding for 2015 and 2014     6,456       6,456  
Additional paid-in capital     15,904,109       15,904,109  
Retained earnings     11,150,969       11,079,168  
Less: Treasury stock, 240,422 common shares, at cost for 2015 and 2014     (1,267,862 )     (1,267,862 )
Total Coffee Holding Co., Inc. Stockholders' Equity     25,793,672       25,721,871  
Noncontrolling interest     269,569       332,882  
TOTAL EQUITY     26,063,241       26,054,753  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 43,169,593     $ 38,952,632  
                 
                 
                 
COFFEE HOLDING CO., INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
THREE MONTHS ENDED JANUARY 31, 2015 AND 2014  
(Unaudited)  
   
    January 31, 2015     January 31, 2014  
NET SALES   $ 38,405,979     $ 27,346,347  
                 
COST OF SALES (which include purchases of approximately $9.8 million and $5.0 million for the three months ended January 31, 2015 and 2014, respectively, from a related party)     36,484,535       23,227,722  
                 
GROSS PROFIT     1,921,444       4,118,625  
                 
OPERATING EXPENSES:                
Selling and administrative     1,666,357       1,710,612  
                 
Officers' salaries     152,735       159,100  
  TOTAL     1,819,092       1,869,712  
                 
INCOME FROM OPERATIONS     102,352       2,248,913  
                 
OTHER INCOME (EXPENSE):                
Interest income     8,297       883  
Gain (Loss) from equity method investments     715       (182 )
Interest expense     (53,979 )     (18,088 )
  TOTAL     (44,967 )     (17,387 )
                 
INCOME BEFORE PROVISION FOR INCOME TAXES AND                
NON-CONTROLLING INTEREST IN SUBSIDIARY     57,385       2,231,526  
                 
(Benefit) provision for income taxes     (31,104 )     825,925  
                 
NET INCOME BEFORE NON-CONTROLLING INTEREST IN SUBSIDIARY     88,489       1,405,601  
Less: net income attributable to the non-controlling interest in subsidiary     (16,688 )     (33,861 )
                 
NET INCOME ATTRIBUTABLE TO COFFEE HOLDING CO., INC.   $ 71,801     $ 1,371,740  
                 
                 
Basic earnings per share   $ 0.01     $ 0.22  
                 
Diluted earnings per share   $ 0.01     $ 0.21  
                 
                 
Weighted average common shares outstanding:                
Basic     6,215,894       6,372,309  
Diluted     6,215,894       6,639,309  
                 
                 
                 
COFFEE HOLDING CO., INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
THREE MONTHS ENDED JANUARY 31, 2015 AND 2014  
(Unaudited)  
   
    January 31, 2015     January 31, 2014  
OPERATING ACTIVITIES:                
Net income   $ 88,489     $ 1,405,601  
Adjustments to reconcile net income to net cash (used in) provided by operating activities:                
Depreciation and amortization     145,673       148,248  
Unrealized loss (gain) on commodities     1,361,809       (1,179,594 )
(Gain) loss on equity method investments     (715 )     182  
Deferred rent     3,104       4,877  
Deferred income taxes     (490,500 )     414,100  
Changes in operating assets and liabilities:                
Accounts receivable     (5,875,323 )     2,325,651  
Inventories     1,647,264       406,461  
Prepaid expenses and other current assets     (8,558 )     102,965  
Prepaid green coffee     248,704       (181,670 )
Prepaid and refundable income taxes     (135,187 )     407,704  
Accounts payable and accrued expenses     (272,203 )     (2,004,402 )
Income taxes payable     143,258       200  
Net cash (used in) provided by operating activities     (3,144,185 )     1,850,323  
                 
INVESTING ACTIVITIES:                
Purchases of machinery and equipment     (38,473 )     (123,874 )
Net cash used in investing activities     (38,473 )     (123,874 )
                 
FINANCING ACTIVITIES:                
Advances under bank line of credit     5,000,000       40,202  
Principal payments under bank line of credit     (2,000,000 )     (1,269,384 )
Payment of dividend     (80,000 )     -  
Net cash provided by (used in) financing activities     2,920,000       (1,229,182 )
                 
NET (DECREASE) INCREASE IN CASH     (262,658 )     497,267  
                 
CASH, BEGINNING OF PERIOD     3,782,639       4,035,669  
                 
CASH, END OF PERIOD   $ 3,519,981     $ 4,532,936  
                 
                 
    2015     2014  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:                
Interest paid   $ 46,479     $ 21,225  
Income taxes paid   $ 453,205     $ 5,089  
                 
                 

CONTACT:

Coffee Holding Co., Inc.
Andrew Gordon
President & CEO
(718) 832-0800