Coffee Holding Co., Inc. Reports Results for the Three and Nine Months Ended July 31, 2013

Coffee Holding Co., Inc. Reports Results for the Three and Nine Months Ended 
July 31, 2013 
STATEN ISLAND, NY -- (Marketwired) -- 09/11/13 --  Coffee Holding
Co., Inc. ("Coffee Holding") (NASDAQ: JVA) today announced its
operating results for the three and nine months ended July 31, 2013. 
Results of Operations 
The Company had a net loss of $2,108,911, or $0.33 per share (basic
and diluted), for the three months ended July 31, 2013 compared to
net income of $1,231,196 or $0.19 per share basic and diluted, for
the three months ended July 31, 2012. The Company had a net loss of
$1,566,886, or $0.25 per share (basic and diluted), for the nine
months ended July 31, 2013 compared to net income of $2,439,293 or
$0.38 per share basic and $0.37 diluted, for the nine months ended
July 31, 2012. The decrease in net income reflects losses realized in
the Company's hedging activities as coffee prices continued to
decrease on an unabated slide to a four year low during the period. 
Net sales totaled $32,370,692 for the three months ended July 31,
2013, a decrease of $12,113,761, or 27%, from $44,484,453 for the
three months ended July 31, 2012. The decrease in net sales reflects
lower coffee prices as coffee prices continued to decrease on an
unabated slide to a four year low during the same period, partially
offset by a 13.7% increase in pounds of green coffee sold as the
Company's business continued to shift to sales of green coffee from
private label sales. Net sales totaled $100,375,542 for the nine
months ended July 31, 2013, a decrease of $37,796,153, or 27.35%,
from $138,171,695 for the nine months ended July 31, 2012. The
decrease in net sales reflects lower coffee prices as coffee prices
continued to decrease on an unabated slide to a four year low during
the same period. 
Cost of sales for the three months ended July 31, 2013 was
$33,526,657 or 100.3% of net sales, as compared to $40,606,840 or
91.3% of net sales for the three months ended July 31, 2012. Cost of
sales for the nine months ended July 31, 2013 was $96,463,019 or
96.1% of net sales, as compared to $128,472,249 or 93% of net sales
for the nine months ended July 31, 2012. The increase in cost of
sales reflects losses realized in the Company's hedging activities
and lower prices paid for gree
n coffee during this period compared to
the same period during 2012. 
Total operating expenses increased by $24,333, or 1.3%, to $1,883,005
for the three months ended July 31, 2013 as compared to operating
expenses of $1,858,672 for the three months ended July 31, 2012. The
increase in operating expenses was due to an additional pay cycle
during the quarter partially offset by a decrease in selling and
administrative expenses. Total operating expenses increased by
$95,038, or 1.7%, to $5,674,149 for the nine months ended July 31,
2013 as compared to operating expenses of $5,579,111 for the nine
months ended July 31, 2012. The increase in operating expenses was
due to an additional pay cycle during the quarter and an increase in
selling and administrative expenses. 
"We believe our business is strong and will continue to grow. Our
operating results during the quarter were primarily affected due to
our realized losses relating to our hedging activities as a result of
a continued decrease in coffee prices during the quarter. Although we
believed at the beginning of the quarter that coffee prices would
stabilize, coffee prices continued their unabated slide to four year
lows and we exited out of certain long-term positions which
negatively impacted our gross margins. This four year decline in
coffee prices represents an approximate 60% decrease from the high
achieved in May 2011. However, we believe that such actions were
necessary to ensure that we maintained a strong balance sheet," said
Andrew Gordon, President & CEO. 
"During the quarter, we continued to focus on sales of wholesale
specialty green coffee and increased our volume in pounds of
specialty green coffee sold by 13.7% from approximately 10.7 million
pounds to 12.2 million pounds. We believe that the increase in our
sales volume of specialty green coffee demonstrates the
sustainability and continued potential for growth in our wholesale
specialty green coffee business model. Our continued shift from
private label sales to enhance our position as a dominant integrated
wholesale-roaster dealer of specialty green coffee places us in a
strong competitive position primarily due to our long term
relationships, unique product offerings and the vertical integration
of our business, allowing us to create synergies for our customer
base that our competitors cannot achieve," continued Mr. Gordon. 
"In addition, we continue to focus on the expansion of our
proprietary brands and the development of our sales inroads in China.
We believe that these initiatives along with our dominant position in
the specialty green market space will provide us with continued
revenue growth opportunities and will strengthen our operating
performance. We also remain open to opportunities that would enhance
shareholder value, including acquisitions, joint ventures or other
strategic alternatives," concluded 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. 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                    
                     JULY 31, 2013 AND OCTOBER 31, 2012                     
                                (Unaudited)                                 
                                    
                                        
                                                     July 31,   October 31, 
                                                       2013         2012    
                                                   -----------  ----------- 
                                                                            
                                 - ASSETS -                                 
CURRENT ASSETS:                                                             
  Cash                                             $ 3,483,229  $ 7,568,583 
  Accounts receivable, net of allowances of                                 
   $213,674 for 2013 and 2012                       12,255,619   12,633,128 
  Inventories                                        9,659,829   11,303,581 
  Prepaid green coffee                                 428,231      150,000 
  Prepaid expenses and other current assets            404,495      704,013 
  Prepaid and refundable income taxes                1,923,560       62,763 
  Deferred income tax asset                            513,875      702,655 
                                                   -----------  ----------- 
    TOTAL CURRENT ASSETS                            28,668,838   33,124,723 
Machinery and equipment, at cost, net of                                    
 accumulated depreciation of $2,981,415 and                                 
 $2,631,468 for 2013 and 2012, respectively          2,030,688    1,791,754 
Customer list and relationships, net of accumulated                         
 amortization of $24,375 and $18,750 for 2013 and                           
 2012, respectively                                    125,625      131,250 
Trademarks                                             180,000      180,000 
Goodwill                                               440,000      440,000 
Equity method investments                               98,755    1,931,931 
Deposits and other assets                              623,271      648,094 
                                                   -----------  ----------- 
      TOTAL ASSETS                                 $32,167,177  $38,247,752 
                                                   ===========  =========== 
                  - LIABILITIES AND STOCKHOLDERS' EQUITY -                  
CURRENT LIABILITIES:                                                        
  Accounts payable and accrued expenses            $ 5,055,539  $11,769,107 
  Line of credit                                     3,300,000      562,500 
  Due to broker                                      1,050,197    1,367,389 
  Income taxes payable                                       -       21,122 
                                                   -----------  ----------- 
    TOTAL CURRENT LIABILITIES                        9,405,736   13,720,118 
                                                                            
Deferred income tax liabilities                         72,875       32,655 
Deferred rent payable                                  178,703      166,668 
Deferred compensation payable                          515,485      528,687 
                                                   -----------  ----------- 
    TOTAL LIABILITIES                               10,172,799   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 2013                            
   and 2012                                              6,456        6,456 
  Additional paid-in capital                        15,904,109   15,904,109 
  Retained earnings                                  6,024,982    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                                         21,663,414   23,617,679 
  Non-controlling interest                             330,964      181,945 
                                                   -----------  ----------- 
    TOTAL EQUITY                                    21,994,378   23,799,624 
                                                   -----------  ----------- 
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $32,167,177  $38,247,752 
                                                   ===========  =========== 
                                                                            
                                                                            
                                                                            
                          COFFEE HOLDING CO., INC.                          
                CONDENSED CONSOLIDATED STATEMENTS OF INCOME                 
                                (Unaudited)                                 
                                                                            
                          Nine Months Ended          Three Months Ended     
                              July 31,                    July 31,          
                         2013          2012          2013          2012     
                     ------------  ------------  ------------  ------------ 
NET SALES            $100,375,542  $138,171,695  $ 32,370,692  $ 44,484,453 
                                                                            
COST OF SALES                                                               
 (including $24.7 and                                                       
 $23.4 million of                                                           
 related party costs                                                        
 for the nine months                                                        
 ended July 31, 2013                                                        
 and 2012,                                                                  
 respectively.                                                              
 Including $6.3 and                                                         
 $5.9 million for the                                                       
 three months ended                                                         
 July 31, 2013 and                                                          
 2012, respectively.)  96,463,019   128,472,249    33,526,657    40,606,840 
                     ------------  ------------  ------------  ------------ 
                                                                            
GROSS PROFIT (LOSS)     3,912,523     9,699,446    (1,155,965)    3,877,613 
                     ------------  ------------  ------------  -----
------- 
                                                                            
OPERATING EXPENSES:                                                         
 Selling and                                                                
  administrative        5,233,157     5,149,653     1,713,051     1,717,472 
 Officers' salaries       440,992       429,458       169,954       141,200 
                     ------------  ------------  ------------  ------------ 
  TOTALS                5,674,149     5,579,111     1,883,005     1,858,672 
                     ------------  ------------  ------------  ------------ 
                                                                            
(LOSS) INCOME FROM                                                          
 OPERATIONS            (1,761,626)    4,120,335    (3,038,970)    2,018,941 
                     ------------  ------------  ------------  ------------ 
                                                                            
OTHER INCOME                                                                
 (EXPENSE)                                                                  
 Interest income           30,176        27,909        12,370         9,268 
 (Loss) income from                                                         
  equity investment      (105,204)      (27,471)         (158)        3,627 
 Interest expense         (71,320)     (153,294)      (10,542)      (46,762)
                     ------------  ------------  ------------  ------------ 
  TOTALS                 (146,348)     (152,856)        1,670       (33,867)
                     ------------  ------------  ------------  ------------ 
                                                                            
(LOSS) INCOME BEFORE                                                        
 INCOME TAXES AND                                                           
 NON-CONTROLLING                                                            
 INTEREST IN                                                                
 SUBSIDIARIES          (1,907,974)    3,967,479    (3,037,300)    1,985,074 
                                                                            
 (Benefit) provision                                                        
  for income taxes       (490,108)    1,460,792      (997,618)      729,979 
                     ------------  ------------  ------------  ------------ 
                                                                            
Net (Loss) Income                                                           
 Before Non-                                                                
 Controlling Interest                                                       
 in Subsidiary         (1,417,866)    2,506,687    (2,039,682)    1,255,095 
 Less: net income                                                           
  attributable to the                                                       
  non-controlling                                                           
  interest               (149,020)      (67,394)      (69,229)      (23,899)
                     ------------  ------------  ------------  ------------ 
                                                                            
NET (LOSS) INCOME                                                           
 ATTRIBUTABLE TO                                                            
 COFFEE HOLDING CO.,                                                        
 INC.                $ (1,566,886) $  2,439,293  $ (2,108,911) $  1,231,196 
                     ============  ============  ============  ============ 
                                                                            
Basic earnings per                                                          
 share               $       (.25) $        .38  $       (.33) $        .19 
                     ============  ============  ============  ============ 
                                                                            
Diluted earnings per                                                        
 share               $       (.25) $        .37  $       (.33) $        .19 
                     ============  ============  ============  ============ 
                                                                            
Dividends declared                                                          
 per share           $        .06  $        .09  $        .00  $        .03 
                     ============  ============  ============  ============ 
                                                                            
Weighted average                                                            
 common shares                                                              
 outstanding:                                                               
  Basic                 6,372,309     6,372,309     6,372,309     6,372,309 
                     ============  ============  ============  ============ 
  Diluted               6,672,309     6,639,309     6,372,309     6,639,309 
                     ============  ============  ============  ============ 
                                                                            
                                                                            
                                                                            
                          COFFEE HOLDING CO., INC.                          
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS               
                  NINE MONTHS ENDED JULY 31, 2013 AND 2012                  
                                (Unaudited)                                 
                                                                            
                                                     2013          2012     
                                                 ------------  ------------ 
OPERATING ACTIVITIES:                                                       
  Net income (loss)                              $ (1,417,866) $  2,506,687 
  Adjustments to reconcile net income to net cash                           
   (used in) provided by operating activities:                              
      Depreciation and amortization                   355,570       332,630 
      Unrealized gain on commodities                 (317,192)   (1,701,257)
      Loss on equity method investments               105,204        27,471 
      Deferred rent                                    12,035        14,811 
      Deferred income taxes                           229,000       628,000 
    Changes in operating assets and liabilities:                            
      Accounts receivable                             377,509     2,433,607 
      Inventories                                   2,147,252     2,277,100 
      Prepaid expenses and other current assets       299,518        86,813 
      Prepaid green coffee                           (278,231)      187,454 
      Prepaid and refundable income taxes          (1,860,797)      175,939 
      Accounts payable and accrued expenses        (5,721,168)   (6,216,243)
      Deposits and other assets                        11,621        14,619 
      Income taxes payable                            (21,122)          142 
                                                 ------------  ------------ 
                                                                            
Net cash (used in) provided by operating                                    
 activities                                        (6,078,667)      767,773 
                                                 ------------  ------------ 
                                                                            
INVESTING ACTIVITIES:                                                       
  Purchase of equity method investments                     -    (2,100,000)
  Proceeds from disposition of equity method                          
      
   investment                                         232,069             - 
  Purchases of machinery and equipment               (588,879)     (517,033)
                                                 ------------  ------------ 
                                                                            
Net cash used in investing activities                (356,810)   (2,617,033)
                                                 ------------  ------------ 
                                                                            
FINANCING ACTIVITIES:                                                       
  Advances under bank line of credit                6,788,920   129,236,460 
  Principal payments under bank line of credit                  (129,677,12 
                                                   (4,051,420)            4)
  Payment of dividend                                (387,377)     (581,067)
                                                 ------------  ------------ 
                                                                            
Net cash provided by (used in) financing                                    
 activities                                         2,350,123    (1,021,731)
                                                 ------------  ------------ 
                                                                            
                                                                            
NET DECREASE IN CASH                               (4,085,354)   (2,870,991)
                                                                            
CASH, BEGINNING OF PERIOD                           7,568,583     4,244,335 
                                                 ------------  ------------ 
                                                                            
CASH, END OF PERIOD                              $  3,483,229  $  1,373,344 
                                                 ============  ============ 
                                                                            
                                                                            
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:                                  
    Interest paid                                $     73,261  $    168,428 
                                                 ------------  ------------ 
    Income taxes paid                            $    803,490  $    570,160 
                                                 ------------  ------------ 

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