Coffee Holding Co., Inc. Reports Results for the Three and Six Months Ended April 30, 2013

Coffee Holding Co., Inc. Reports Results for the Three and Six Months Ended 
April 30, 2013 
STATEN ISLAND, NY -- (Marketwired) -- 06/13/13 --  Coffee Holding
Co., Inc. ("Coffee Holding") (NASDAQ: JVA) today announced its
operating results for the three and six months ended April 30, 2013.
In this release, the Company: 


 
--  Reports net sales of $68,004,850 for the six months ended April 30,
    2013 and $36,686,047 for the three months ended April 30, 2013
    compared to net sales of $93,687,243 for the six months ended April
    30, 2012 and $37,085,559 for the three months ended April 30, 2012;
    and
    
    
--  Reports net loss of $395,512, or $0.06 per share (basic and diluted)
    for the three months ended April 30, 2013 compared to net loss of
    $370,247, or $0.06 per share (basic and diluted) for the three months
    ended April 30, 2012.

  
Results of Operations 
The Company had a net loss of $395,512, or $0.06 per share basic and
diluted, for the three months ended April 30, 2013 compared to a net
loss of $370,247 or $0.06 per share basic and diluted, for the three
months ended April 30, 2012. The slight increase in the net loss
primarily reflects lower coffee prices for the period. The Company
had net income of $542,025, or $0.09 per share basic and $0.08
diluted, for the six months ended April 30, 2013 compared to net
income of $1,208,098 or $0.19 per share basic and $0.18 diluted, for
the six months ended April 30, 2012. The decrease in the net income
primarily reflects lower sales for the period year over year and the
write off of our investment in Global Mark partially offset by higher
margins during the period. 
Net sales totaled $36,686,047 for the three months ended April 30,
2013, a decrease of $399,512, or 1.08%, from $37,085,559 for the
three months ended April 30, 2012. The slight decrease in net sales
primarily reflects lower coffee prices for 2013 compared to the same
period in 2012. Net sales totaled $68,004,850 for the six months
ended April 30, 2013, a decrease of $25,682,393, or 27.41%, from
$93,687,243 for the six months ended April 30, 2012. The decrease in
net sales primarily reflects lower coffee prices as well as reduced
volumes of wholesale green coffee sales and a more normalized rate of
sales recorded in the first quarter of 2013. 
Cost of sales for the three months ended April 30, 2013 was
$35,301,868 or 96.2% of net sales, as compared to $35,701,667 or
96.3% of net sales for the three months ended April 30, 2012. The
decrease in cost of sales reflects lower prices paid for green coffee
during this period compared to the same period in 2012. Cost of sales
for the six months ended April 30, 2013 was $62,936,854 or 92.5% of
net sales, as compared to $87,853,608 or 93.8% of net sales for the
six months ended April 30, 2012. The decrease in cost of sales
reflects lower green coffee prices during the six months as well as 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 decreased by $10,094, or 0.53%, to
$1,894,255 for the three months ended April 30, 2013 as compared to
operating expenses of $1,904,349 for the three months ended April 30,
2012. The decrease in operating expenses was due to a decrease in
selling and administrative expense of $10,094. Total operating
expenses increased by $58,411, or 1.6%, to $3,790,651 for the six
months ended April 30, 2013 as compared to operating expenses of
$3,732,240 for the six months ended April 30, 2012. The increase in
operating expenses was due to an increase in selling and
administrative expense of $75,632, partially offset by a decrease in
officers' salaries of $17,221. 
"We are pleased with our quarterly results as three year lows in the
green coffee market continued to provide pressure on our ability to
maintain gross margins on our increasing wholesale green coffee
business. In addition, the low commodity prices also continued to
provide pressure on our profit margins in both our private label and
branded coffee divisions as we increased our promotional activity
necessary to remain competitive at the supermarket shelf level.
Falling commodity prices, especially in a short period of time,
continue to be a risk in our business. However, we believe we have
managed these conditions well as we maintained our sales and gross
margins towards our targeted year-end level of nine percent. We feel
these commodity headwinds are likely  to end as coffee prices have
well exceeded most targeted levels to the downside and are
potentially poised to rise in the second half of 2013. If they do, we
believe our positions in both the green coffee and retail markets
will provide us with the opportunity for expanded profits as well as
renewed growth in our top line revenues," said Andrew Gordon,
President & CEO. 
"In addition, we have launched several new initiatives this quarter
which we believe will prove beneficial to our results.  Revenues from
our recent licensing arrangement of our Don Manuel Colombian coffee
in China along with increased sales of green coffee in China, should
add to our profitability and we believe the China market's potential
upside remains both untapped and highly viable. Also, we recently
launched our Premier Roasters (TM) 100 % Arabica Whole Bean Coffee
line packed in composite cans.  These 100 % Arabica products,
available in light, medium and dark roasts blends, utilize some of
the finest Arabica beans available from Central American harvests. 
We believe these new Premier Roasters 100 % Arabica coffees are the
most upscale line we have ever offered for the traditional
supermarket shelf.  We also believe this new innovative product line,
unique to almost all traditional supermarket offerings, will resonate
positively with the consumer who is looking for 100 % Arabica Whole
Bean product packed in a more sustainable packaging concept than
currently available.  The product's presentation is not only
extremely appealing and more creative than traditional bulk offerings
seen in most grocery stores; but will also maintain its freshness for
an extended period of time because of the packaging, which is a
distinct advantage for both the retailer and the end user.  We remain
excited and upbeat regarding the overall condition of our business
and look forward to generating better and more normalized levels of
earnings over the next several quarters," concluded Mr. Gordon. 
The Company's Dividend Program 
As previously announced, the Company's board of directors has
continued to evaluate the Company's previous dividend program.
Consistent with the Company's growth strategy, the Company's board of
directors has elected to utilize cash flow to facilitate reinvestment
in the Company in lieu of payment of quarterly dividends. "Given our
growth strategy and changes in 2013 tax rates, we believe by
reinvesting in the Company, we can better optimize shareholder
value," Mr. Gordon stated. 
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                    
                    APRIL 30, 2013 AND OCTOBER 31, 2012                     
                                (Unaudited)                                 
                                                                            
                                                  April 30,    October 31,  
                                                     2013          2012     
                                                 ------------  ------------ 
                                 - ASSETS -                                 
CURRENT ASSETS:                                                             
  Cash                                           $  7,615,141  $  7,568,583 
  Accounts receivable, net of allowances and                                
   reserves of $213,674 for 2013 and 2012          10,726,416    12,633,128 
  Inventories                                       8,751,842    11,303,581 
  Prepaid green coffee                                459,473       150,000 
  Prepaid expenses and other current assets           659,937       704,013 
  Prepaid and refundable income taxes                 465,730        62,763 
  Deferred income tax, net                            621,267       702,655 
                                                 ------------  ------------ 
    TOTAL CURRENT ASSETS                           29,299,806    33,124,723 
Machinery and equipment, at cost, net of                                    
 accumulated depreciation of $2,862,195 and                                 
 $2,631,468 for 2013 and 2012, respectively         2,030,872     1,791,754 
Customer list and relationships, net of                                     
 accumulated amortization of $22,500 and $18,750                            
 for 2013 and 2012, respectively                      127,500       131,250 
Trademarks                                            180,000       180,000 
Goodwill                                              440,000       440,000 
Equity method investment                               98,913     1,931,931 
Deferred income tax asset                               9,733             - 
Deposits and other assets                             628,119       648,094 
                                                 ------------  ------------ 
      TOTAL ASSETS                               $ 32,814,943  $ 38,247,752 
                                                 ============  ============ 
                  - LIABILITIES AND STOCKHOLDERS' EQUITY -                  
CURRENT LIABILITIES:                                                        
  Accounts payable and accrued expenses          $  6,753,530  $ 11,769,107 
  Line of credit                                            -       562,500 
  Due to broker                                     1,336,834     1,367,389 
  Income taxes payable                                    370        21,122 
                                                 ------------  ------------ 
    TOTAL CURRENT LIABILITIES                       8,090,734    13,720,118 
                                                                            
Deferred income tax liabilities                             -        32,655 
Deferred rent payable                                 174,691       166,668 
Deferred compensation payable                         515,458       528,687 
                                                 ------------  ------------ 
    TOTAL LIABILITIES                               8,780,883    14,448,128 
                                                 ------------  ------------ 
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; 6,372,309 shares outstanding                              
   for 2012 and 2011                                    6,456         6,456 
  Additional paid-in capital                       15,904,109    15,904,109 
  Retained earnings                                 8,133,893     7,979,247 
  Less: Treasury stock, 84,007 common shares, at                            
   cost for 2012 and 2011                            (272,133)     (272,133)
                                                 ------------  ------------ 
  Total Coffee Holding Co., Inc. Stockholders'                              
   Equity                                          23,772,325    23,617,679 
  Non-controlling interest                            261,735       181,945 
                                                 ------------  ------------ 
    TOTAL EQUITY                                   24,034,060    23,799,624 
                                                 ------------  ------------ 
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 32,814,943  $ 38,247,752 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
                          COFFEE HOLDING CO., INC.                          
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS               
                                (Unaudited)                 
                
                                                                            
                             Six Months Ended         Three Months Ended    
                                 April 30,                 April 30,        
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
NET SALES                $68,004,850  $93,687,243  $36,686,047  $37,085,559 
                                                                            
COST OF SALES (including                                                    
 $18.4 and $17.5 million                                                    
 of related party costs                                                     
 for the six months                                                         
 ended April 30, 2013                                                       
 and 2012, respectively.                                                    
 Including $8.7 and $7.0                                                    
 million for the three                                                      
 months ended April 30,                                                     
 2013 and 2012,                                                             
 respectively.)           62,936,854   87,853,608   35,301,868   35,701,667 
                         -----------  -----------  -----------  ----------- 
                                                                            
GROSS PROFIT               5,067,996    5,833,635    1,384,179    1,383,892 
                         -----------  -----------  -----------  ----------- 
                                                                            
OPERATING EXPENSES:                                                         
  Selling and                                                               
   administrative          3,519,614    3,443,982    1,753,155    1,763,249 
  Officers' salaries         271,037      288,258      141,100      141,100 
                         -----------  -----------  -----------  ----------- 
TOTAL                      3,790,651    3,732,240    1,894,255    1,904,349 
                         -----------  -----------  -----------  ----------- 
                                                                            
INCOME (LOSS) FROM                                                          
 OPERATIONS                1,277,345    2,101,395     (510,076)    (520,457)
                         -----------  -----------  -----------  ----------- 
                                                                            
OTHER INCOME (EXPENSE)                                                      
  Interest income             17,805       18,641       10,226        4,758 
  Loss from equity                                                          
   method investment        (105,046)     (31,098)        (609)     (10,961)
  Interest expense           (60,779)    (106,532)     (22,379)     (40,803)
                         -----------  -----------  -----------  ----------- 
TOTAL                       (148,020)    (118,989)     (12,762)     (47,006)
                         -----------  -----------  -----------  ----------- 
                                                                            
INCOME (LOSS) BEFORE                                                        
 PROVISION FOR INCOME                                                       
 TAXES AND NON-                                                             
 CONTROLLING INTEREST IN                                                    
 SUBSIDIARY                1,129,325    1,982,406     (522,838)    (567,463)
                                                                            
  Provision (benefit)                                                       
   for income taxes          507,510      730,813     (127,974)    (233,687)
                         -----------  -----------  -----------  ----------- 
                                                                            
NET INCOME (LOSS) BEFORE                                                    
 NON-CONTROLLING                                                            
 INTEREST IN SUBSIDIARY      621,815    1,251,593     (394,864)    (333,776)
  Less: Net (income)                                                        
   attributable to the                                                      
   non-controlling                                                          
   interest                  (79,790)     (43,495)        (648)     (36,471)
                         -----------  -----------  -----------  ----------- 
                                                                            
NET INCOME (LOSS)                                                           
 ATTRIBUTABLE TO COFFEE                                                     
 HOLDING CO., INC.       $   542,025  $ 1,208,098  $  (395,512) $  (370,247)
                         ===========  ===========  ===========  =========== 
                                                                            
Basic earnings (loss)                                                       
 per share               $       .09  $       .19  $      (.06) $      (.06)
                         ===========  ===========  ===========  =========== 
Diluted earnings (loss)                                                     
 per share               $       .08  $       .18  $      (.06) $      (.06)
                         ===========  ===========  ===========  =========== 
Dividends declared per                                                      
 share                   $       .06  $       .06  $       .00  $       .03 
                         ===========  ===========  ===========  =========== 
                                                                            
Weighted average common                                                     
 shares outstanding:                                                        
  Basic                    6,372,309    6,372,309    6,372,309    6,372,309 
                         ===========  ===========  ===========  =========== 
  Diluted                  6,639,309    6,644,309    6,372,309    6,372,309 
                         ===========  ===========  ===========  =========== 
                                                                            
                                                                            
                                                                            
                          COFFEE HOLDING CO., INC.                          
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS               
                  SIX MONTHS ENDED APRIL 30, 2013 AND 2012                  
                                (Unaudited)                                 
                                                    
                        
                                                     2013          2012     
                                                 ------------  ------------ 
OPERATING ACTIVITIES:                                                       
  Net income                                     $    621,815  $  1,251,593 
  Adjustments to reconcile net income to net                                
   cash provided by operating activities:                                   
      Depreciation and amortization                   234,476       223,398 
      Unrealized gain on commodities                  (30,555)   (1,296,613)
      Loss on equity method investment                    989        31,098 
      Loss on disposition of equity method                                  
       investment                                     104,057               
      Deferred rent                                     8,023         9,874 
      Deferred income taxes                            39,000       493,000 
    Changes in operating assets and liabilities:                            
      Accounts receivable                           1,906,712     6,386,652 
      Inventories                                   3,055,239     1,482,771 
      Prepaid expenses and other current assets        44,076        68,534 
      Prepaid green coffee                           (309,473)      338,471 
      Prepaid and refundable income taxes            (402,967)     (123,219)
      Accounts payable and accrued expenses        (4,023,176)   (6,428,912)
      Deposits and other assets                         6,746         9,746 
      Income taxes payable                            (20,752)         (100)
                                                 ------------  ------------ 
        Net cash provided by operating                                      
         activities                                 1,234,210     2,446,293 
                                                 ------------  ------------ 
                                                                            
INVESTING ACTIVITIES:                                                       
  Purchase of equity method investment                      -    (2,000,000)
  Proceeds from disposition of equity method                                
   investment                                         232,069             - 
  Purchases of machinery and equipment               (469,844)     (188,640)
                                                 ------------  ------------ 
        Net cash used in investing activities        (237,775)   (2,188,640)
                                                 ------------  ------------ 
                                                                            
FINANCING ACTIVITIES:                                                       
  Advances under bank line of credit                3,466,969    90,112,780 
  Principal payments under bank line of credit     (4,029,469)  (91,795,389)
  Payment of dividend                                (387,377)     (387,378)
                                                 ------------  ------------ 
        Net cash used in financing activities        (949,877)   (2,069,987)
                                                 ------------  ------------ 
                                                                            
                                                                            
NET INCREASE (DECREASE) IN CASH                        46,558    (1,812,334)
                                                                            
CASH, BEGINNING OF PERIOD                           7,568,583     4,244,335 
                                                 ------------  ------------ 
                                                                            
CASH, END OF PERIOD                              $  7,615,141  $  2,432,001 
                                                 ============  ============ 
                                                                            
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:                                  
  Interest paid                                  $     64,177  $    121,872 
                                                 ============  ============ 
  Income taxes paid                              $    477,991  $    343,805 
                                                 ============  ============ 

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