STATEN ISLAND, N.Y., June 9, 2011 (GLOBE NEWSWIRE) -- Coffee Holding Co., Inc. ("Coffee Holding") (Nasdaq:JVA) today announced its operating results for the three and six months ended April 30, 2011. In this release, the Company:
- Reports net sales $62,973,110 for the six months ended April 30, 2011 and $37,332,017 for the three months ended April 30, 2011 compared to net sales of $41,276,459 for the six months ended April 30, 2010 and $19,917,308 for the three months ended April 30, 2010;
- Reports sales growth of 87% for the three months ended April 30, 2011 compared to 11.4% for the three months ended April 30, 2010; and
- Reports net income of $1,187,957, or $0.22 per share (basic and diluted) for the three months ended April 30, 2011 compared to net income of $800,448, or $0.15 per share (basic and diluted) for the three months ended April 30, 2010.
Results of Operations
The Company had net income of $1,187,957, or $0.22 per share (basic and diluted), for the three months ended April 30, 2011 compared to net income of $800,448 or $0.15 per share (basic and diluted), for the three months ended April 30, 2010. The Company had net income of $2,229,029, or $0.41 per share (basic and diluted), for the six months ended April 30, 2011 compared to net income of $1,358,426 or $0.25 per share (basic and diluted), for the six months ended April 30, 2010. The increase in net income primarily reflects increased gross profit.
Net sales totaled $37,332,017 for the three months ended April 30, 2011, an increase of $17,414,709, or 87%, from $19,917,308 for the three months ended April 30, 2010. Net sales totaled $62,973,110 for the six months ended April 30, 2011, an increase of $21,696,651, or 52%, from $41,276,459 for the six months ended April 30, 2010. The increase in net sales reflects higher sales prices compared to the second quarter of fiscal 2010 as well as additional poundage sold due to the addition of our subsidiary, OPTCO, as well as additional sales of green coffee to new customers.
Cost of sales for the three months ended April 30, 2011 was $33,732,594, or 90.3% of net sales, as compared to $17,068,938, or 85.7% of net sales for the three months ended April 30, 2010. Cost of sales for the six months ended April 30, 2011 was $56,292,992, or 89.4% of net sales, as compared to $35,790,325, or 86.7% of net sales for the six months ended April 30, 2010. The increase in cost of sales reflects the increased cost of green coffee, the addition of our subsidiary, OPTCO, as well as a greater shift in the percentage of sales of green coffee from roasted coffee sales.
Total operating expenses increased by $210,787, or 13.37%, to $1,787,213 for the three months ended April 30, 2011 as compared to operating expenses of $1,576,426 for the three months ended April 30, 2010. Total operating expenses increased by $309,733, or 9.78%, to $3,475,067 for the six months ended April 30, 2011 as compared to operating expenses of $3,165,334 for the six months ended April 30, 2010. The increase in operating expenses was due to increases in selling and administrative expense due to a higher level of business during this period as well as in increase in officers' salaries of $30,000.
"We are pleased to report another strong quarter to our shareholders. Our revenue growth continues to drive our bottom line as our business has been strong in all areas during this period. Our price increases helped us keep pace with the rising price of green coffee, improving our margins on both our private label and branded businesses.
"In addition to our traditional sources of revenue, our growth this quarter was driven by several new factors which we believe will have ongoing benefits for our company. First is the continuing high price of green unroasted coffee which many industry experts believe will remain elevated for the foreseeable future. These sustained high prices have had a negative impact on many smaller and medium size roasters who in the past, have procured full lots of green coffee from conventional trade houses sources. We believe that these extended higher commodity prices as well as heightened market volatility have made it both financially difficult, as well as strategically unwise, for many smaller and medium size roasters to purchase large amounts of coffee on their own. The unanticipated consequences of these higher prices is that we have picked up many of these roasters as new customers who can now rely on us for a wide variety of high quality Arabica coffees for their inventory needs without stretching their cash flows and increasing their market risk exposure. These roaster customers are local roasters scattered throughout the country. Adding this new group of customers to our already vast green coffee selling base should give us a boost to both our revenues for the foreseeable future.
"Also during this period, we attended our second selling show in China. We believe we will be able to begin to cultivate a new customer base for our brands; as this market is virtually untapped, yet it has the potential to become one of the most important outlets for coffee consumption over the next ten years. The Chinese appetite for quality American brands was evident during our interactions on our visits. We have just completed our first few sales into this market and we anticipate this could mark the start of another growth area for our company.
"Lastly, Smucker's recent announcement of their purchase of Cafe Bustelo and Cafe Pilon, the two dominant brands that compete with our Cafe Caribe and Cafe Supremo, could mark the beginning of these ethnic coffees going main stream. We believe many retailers who in the past have not realized the importance of this segment of the coffee drinking market will now be forced to do so as these highly popular Spanish brands will now be part of the Folgers' family. We believe our Spanish brands, both Cafe Caribe and Cafe Supremo, will now be viewed in a different and better light as many of these retailers will need to carry multiple brands in this category to offer their customers another choice just like they do in most other categories.
"We view these events in a positive way and believe they will have a beneficial impact on our future business," said Mr. Andrew Gordon, President and CEO of Coffee Holding Co.
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 July 18, 2011. The dividend will be paid on August 1, 2011.
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