STATEN ISLAND, N.Y., Sept. 14, 2010 (GLOBE NEWSWIRE) -- Coffee Holding Co., Inc. ("Coffee Holding") (Nasdaq:JVA) today announced its operating results for the three and nine months ended July 31, 2010. In this release, the Company:
- Reports net sales of $19,032,770 for the three months ended July 31, 2010 and $17,289,305 for the three months ended July 31, 2009;
- Reports sales growth of 10.1% for the three months ended July 31, 2010 compared to the three months ended July 31, 2009; and
- Reports net income of $424,091, or $0.08 per share (basic and diluted), for the three months ended July 31, 2010 compared to net income of $799,760, or $0.15 per share (basic and diluted), for the three months ended July 31, 2009.
Results of Operations
The Company had net income of $424,091, or $0.08 per share (basic and diluted), for the three months ended July 31, 2010 compared to net income of $799,760, or $0.15 per share (basic and diluted), for the three months ended July 31, 2009. The decrease in net income for the three month period primarily reflects an increased cost of sales resulting in part from higher green coffee prices that we were not immediately able to pass on to our customers, which resulted in a decreased gross profit. The Company had net income of $1,782,517, or $0.33 per share (basic and diluted), for the nine months ended July 31, 2010 compared to net income of $1,592,211, or $0.29 per share (basic and diluted), for the nine months ended July 31, 2009. The increase in net income for the nine month period primarily reflects increased net sales.
Net sales totaled $19,032,770 for the three months ended July 31, 2010, an increase of $1,743,465, or 10.1%, from $17,289,305 for the three months ended July 31, 2009. The increase in net sales for the three month period reflects increased sales of specialty green coffee to our largest green coffee customers and our acquisition of OPTCO in May 2010. Net sales totaled $60,309,228 for the nine months ended July 31, 2010, an increase of $6,289,183, or approximately 11.6%, from $54,020,045 for the nine months ended July 31, 2009. The increase in net sales for the nine month period reflects increased sales of both green coffee and private label coffee to our largest customers and the addition of our new wholly owned subsidiary OPTCO in May 2010.
Cost of sales for the three months ended July 31, 2010 was $16,574,355, or approximately 87.1% of net sales, as compared to $14,375,619, or approximately 83.1%, of net sales for the three months ended July 31, 2009. The increase in cost of sales as a percentage of net sales for the three month period reflects a decrease in net gains on options and futures contracts and an increase in green coffee purchases, partially offset by a decrease in labor costs. Cost of sales for the nine months ended July 31, 2010 was $52,655,415, or approximately 87.3% of net sales, as compared to $46,786,962, or approximately 86.6%, of net sales for the nine months ended July 31, 2009. The slight increase in cost of sales as a percentage of net sales for the nine month period was primarily a result of increased purchases and prices for green coffee.
Total operating expenses increased by $167,687, or approximately 11.1%, to $1,675,363 for the three months ended July 31, 2010 compared to operating expenses of $1,507,676 for the three months ended July 31, 2009. Total operating expenses increased by $149,749, or approximately 3.4%, to $4,549,960 for the nine months ended July 31, 2010 as compared to operating expenses of $4,400,211 for the nine months ended July 31, 2009. The increase in operating expenses was primarily the result of costs associated with the OPTCO acquisition.
"We are pleased to report positive results to our shareholders. Our revenues have continued to trend upwards as we have averaged 11.6% growth over the last nine months," said Andrew Gordon, President and Chief Executive Officer of the Company. "Our core businesses remain strong with the weakness in the outside economic picture having no effect on our sales to existing customers. The completion of the OPTCO (Organic Products Trading Co.) transaction is expected to improve both our revenues and profits in the upcoming months by giving us added penetration in the $1.4 billion organic coffee market, which expanded by 4.1% this past year as compared to 1% estimated growth in the mainstream coffee market. Lastly, while our third quarter profits were not as good as those achieved in the same period in 2009 due to the recent spike in the N.Y. Arabica commodity market which occurred rather suddenly and unexpectedly beginning in June, which is traditionally a weak seasonal period, we anticipate better margins in the fourth quarter as our recently announced price increases will have taken affect during this period."
Quarterly Dividend
The Company's previously announced quarterly cash dividend of $0.03 per share will be paid to stockholders of record as of the close of business on October 18, 2010. The dividend will be paid on November 1, 2010.
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.
CONTACT: Coffee Holding Co., Inc. Andrew Gordon, President & CEO (718) 832-0800