Coffee Holding Co., Inc. Reports Results for the First Fiscal Quarter 2013

Coffee Holding Co., Inc. Reports Results for the First Fiscal Quarter 2013 
STATEN ISLAND, NY -- (Marketwire) -- 03/15/13 --  Coffee Holding Co.,
Inc. ("Coffee Holding" or the "Company") (NASDAQ: JVA) today
announced its operating results for the three months ended January
31, 2013. 
"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. 


 
                                                                            
                          COFFEE HOLDING CO., INC.                          
                   CONDENSED CONSOLIDATED BALANCE SHEETS                    
                   JANUARY 31, 2013 AND OCTOBER 31, 2012                    
                                                                            
                                                 January 31,   October 31,  
                                                     2013          2012     
                                                 ------------  ------------ 
                                                  (unaudited)               
                                 - ASSETS -                                 
CURRENT ASSETS:                                                             
Cash                                             $  8,271,965  $  7,568,583 
Accounts receivable, net of allowances of                                   
 $213,674 for 2013 and 2012                        10,223,591    12,633,128 
Inventories                                        10,241,463    11,303,581 
Prepaid green coffee                                  205,000       150,000 
Prepaid expenses and other current assets             650,455       704,013 
Prepaid and refundable income taxes                    52,106        62,763 
Deferred income tax asset                             477,443       702,655 
                                                 ------------  ------------ 
TOTAL CURRENT ASSETS                               30,122,023    33,124,723 
Machinery and equipment, at cost, net of                                    
 accumulated depreciation of $2,747,212 and                                 
 $2,631,468 for 2013 and 2012, respectively         1,744,407     1,791,754 
 
Customer list and relationships, net of                                     
 accumulated amortization of $20,625 and $18,750                            
 for 2013 and 2012, respectively                      129,375       131,250 
Trademarks                                            180,000       180,000 
Goodwill                                              440,000       440,000 
Equity method investments                              99,522     1,931,931 
Deposits and other assets                             648,385       648,094 
                                                 ------------  ------------ 
TOTAL ASSETS                                     $ 33,363,712  $ 38,247,752 
- LIABILITIES AND STOCKHOLDERS' EQUITY -                                    
CURRENT LIABILITIES:                                                        
Accounts payable and accrued expenses            $  6,260,622  $ 11,769,107 
Line of credit                                        953,571       562,500 
Due to broker                                         913,507     1,367,389 
Income taxes payable                                   96,115        21,122 
                                                 ------------  ------------ 
TOTAL CURRENT LIABILITIES                           8,223,815    13,720,118 
                                                                            
Deferred income tax liabilities                         9,443        32,655 
Deferred rent payable                                 170,680       166,668 
Deferred compensation payable                         530,851       528,687 
                                                 ------------  ------------ 
TOTAL LIABILITIES                                   8,934,789    14,448,128 
                                                 ------------  ------------ 
STOCKHOLDERS' EQUITY:                                                       
Coffee Holding Co., Inc. stockholders' equity:                              
Preferred stock, par value $.001 per share;                                 
 10,000,000 shares authorized; 0 issued                     -             - 
Common stock, par value $.001 per share;                                    
 30,000,000 shares authorized, 6,456,316 shares                             
 issued; 6,372,309 shares outstanding for 2013                              
 and 2012                                               6,456         6,456 
Additional paid-in capital                         15,904,109    15,904,109 
Retained earnings                                   8,529,405     7,979,247 
Less: Treasury stock, 84,007 common shares, at                              
 cost for 2013 and 2012                              (272,133)     (272,133)
                                                 ------------  ------------ 
Total Coffee Holding Co., Inc. Stockholders'                                
 Equity                                            24,167,837    23,617,679 
Noncontrolling interest                               261,086       181,945 
                                                 ------------  ------------ 
TOTAL EQUITY                                       24,428,923    23,799,624 
                                                 ------------  ------------ 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $ 33,363,712  $ 38,247,752 
                                                                            
                                                                            
                                                                            
                          COFFEE HOLDING CO., INC.                          
                CONDENSED CONSOLIDATED STATEMENTS OF INCOME                 
                THREE MONTHS ENDED JANUARY 31, 2013 AND 2012                
                                (Unaudited)                                 
                                                                            
                                                     2013          2012     
                                                 ------------  ------------ 
                                                                            
NET SALES                                        $ 31,318,804  $ 56,601,684 
                                                                            
COST OF SALES (which includes purchases of                                  
 approximately $9.7 million and $10.5 million                               
 for the three months ended January 31, 2013 and                            
 2012, respectively from a related party)          27,636,207    52,151,940 
                                                 ------------  ------------ 
                                                                            
GROSS PROFIT                                        3,682,597     4,449,744 
                                                 ------------  ------------ 
                                                                            
OPERATING EXPENSES:                                                         
Selling and administrative                          1,765,241     1,682,334 
Officers' salaries                                    129,937       147,158 
                                                 ------------  ------------ 
TOTAL                                               1,895,178     1,829,492 
                                                 ------------  ------------ 
                                                                            
INCOME FROM OPERATIONS                              1,787,419     2,620,252 
                                                 ------------  ------------ 
                                                                            
OTHER INCOME (EXPENSE):                                                     
Interest income                                         7,579        13,884 
Loss from equity method investments                  (104,437)      (20,137)
Interest expense                                      (38,399)      (65,730)
                                                 ------------  ------------ 
TOTAL                                                (135,257)      (71,983)
                                                 ------------  ------------ 
                                                                            
INCOME BEFORE PROVISION FOR INCOME TAXES AND                                
 NONCONTROLLING INTEREST IN SUBSIDIARY              1,652,162     2,548,269 
                                                                            
Provision for income taxes                            635,484       962,900 
                                                 ------------  ------------ 
                                                                            
                                                                            
NET INCOME BEFORE NONCONTROLLING INTEREST IN                                
 SUBSIDIARY                                         1,016,678     1,585,369 
Less: Net income attributable to the                                        
 noncontrolling interest                              (79,141)       (7,024)
                                                 ------------  ------------ 
                                                                            
NET INCOME ATTRIBUTABLE TO COFFEE HOLDING CO.,                              
 INC.                                            $    937,537  $  1,578,345 
                                                                            
Basic earnings per share                         $        .15  $        .25 
                                                                            
Diluted earnings per share                       $        .14  $        .24 
                                                                            
Dividends declared per share                     $        .06  $        .03 
                                                                            
Weighted average common shares outstanding:                                 
Basic                                               6,372,309     6,372,309 
Diluted                                             6,639,309     6,644,309 
                                                                            
                                                                            
                                                                            
                          COFFEE HOLDING CO., INC.                          
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS               
                THREE MONTHS ENDED JANUARY 31, 2013 AND 2012                
                                (Unaudited)                                 
                                                                            
                                                     2013          2012     
                                                 ------------  ------------ 
OPERATING ACTIVITIES:                                                       
Net income                                       $  1,016,678  $  1,585,369 
Adjustments to reconcile net income to net cash                             
 provided by operating activities:                                          
Depreciation and amortization                         117,616       112,693 
Unrealized gain on commodities                       (453,882)   (1,577,294)
Loss on equity method investment                          380        20,137 
Loss on disposition of equity method investment       104,057             - 
Deferred rent                                           4,012         4,937 
Deferred income taxes                                 202,000       599,000 
Changes in operating assets and liabilities:                                
Accounts receivable                                 2,409,537    (1,937,860)
Inventories                                         1,565,618     1,497,745 
Prepaid expenses and other current assets              53,558        43,768 
Prepaid green coffee                                  (55,000)      152,036 
Prepaid and refundable income taxes                    10,657       267,757 
Accounts payable and accrued expenses              (4,516,084)    2,781,754 
Deposits and other assets                               1,873         4,873 
Income taxes payable                                   74,993        35,918 
                                                 ------------  ------------ 
Net cash provided by operating activities             536,013     3,590,833 
                                                 ------------  ------------ 
                                                                            
INVESTING ACTIVITIES:                                                       
Purchase of equity method investment                        -      (200,000)
Proceeds from disposition of equity method                                  
 investment                                           232,069             - 
Purchases of machinery and equipment                  (68,394)      (54,590)
                                                 ------------  ------------ 
Net cash provided by (used in) investing                                    
 activities                                           163,675      (254,590)
                                                 ------------  ------------ 
                                                                            
FINANCING ACTIVITIES:                                                       
Advances under bank line of credit                  3,441,192    48,525,026 
Principal payments under bank line of credit       (3,050,121)  (48,549,137)
Payment of dividend                                  (387,377)     (193,689)
                                                 ------------  ------------ 
Net cash provided by (used in) financing                                    
 activities                                             3,694      (217,800)
                                                 ------------  ------------ 
                                                                            
                                                                            
NET INCREASE IN CASH                                  703,382     3,118,443 
                                                                            
CASH, BEGINNING OF PERIOD                           7,568,583     4,244,335 
                                                 ------------  ------------ 
                                                                            
CASH, END OF PERIOD                              $  8,271,965  $  7,362,778 
                                                                            
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:                                  
Interest paid                                    $     41,191  $     71,340 
Income taxes paid                                $    347,834  $     60,225 
                                                                            
                                                                            
                                                                            
                          COFFEE HOLDING CO., INC.                          
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS              
                THREE MONTHS ENDED JANUARY 31, 2013 AND 2012                
                                 (Unaudited)                                
                                                                            
Schedule of noncash investing and financing activities:                     
                                                                            
Proceeds from disposition of equity method investment:                      
                                                                            
                                                         2013        2012   
                                                     ----------- -----------
                                                                            
Inventory received                                   $   503,500 $         -
Settlement of accounts payable                           992,402           -
                                                     ----------- -----------
Total noncash proceeds                               $ 1,495,902 $         -
                                                     ----------- -----------

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