STATEN ISLAND, NY – Coffee Holding Co., Inc.) (the “Company”) has announced its operating results for the fiscal year ended October 31, 2014.
The Company had net income of $4,967,535, or $0.78 per share basic and diluted, for the fiscal year ended October 31, 2014 compared to a net loss of $(1,480,235), or $(0.23) per share basic and diluted for the fiscal year ended October 31, 2013.
The increase in net income reflects the increased profitability of sales and the increased realized and unrealized gains of $3,739,264 on hedging activities during the year.
Net sales totaled $108,863,097 for the fiscal year ended October 31, 2014, a decrease of $25,117,662, or 18.8%, from $133,980,759 for the fiscal year ended October 31, 2013. The decrease in net sales primarily reflects a decrease of 20% in pounds of green coffee sold during fiscal year 2014.
The Company believes that the decrease in pounds of green coffee sold resulted from a continued decrease in purchases by customers as a result of market volatility and a significant increase in coffee prices.
Reduced sales of green coffee to one customer were partially offset by increased sales to new smaller specialty gourmet roasters at improved margins as the Company began reducing its inventory position into a rising market during the first half of 2014.
Cost of sales for the fiscal year ended October 31, 2014 was $93,334,118, or 85.7% of net sales, as compared to $128,011,678, or 95.5% of net sales, for the fiscal year ended October 31, 2013.
Cost of sales consists primarily of the cost of green coffee and packaging materials and realized and unrealized gains or losses on hedging activity.
The decrease in cost of sales reflects favorable inventory positions and rising coffee prices which allowed for improved margins during fiscal year 2014, and increased realized and unrealized gains on hedging activities of $3,739,264.
Gross profit for the fiscal year ended October 31, 2014 was $15,528,979, an increase of $9,559,898 from $5,969,081 for the fiscal year ended October 31, 2013.
Gross profit as a percentage of net sales increased to 14.3% for the fiscal year ended October 31, 2014 from 4.5% for the fiscal year ended October 31, 2013. The increase in margins reflects realized and unrealized gains in the Company’s hedging activities and favorable inventory positions.
Total operating expenses increased $5,542 to $7,527,452 for the fiscal year ended October 31, 2014 from $7,521,910 for the fiscal year ended October 31, 2013.
Selling and administrative expenses decreased $71,767, or 1.03%, to $6,868,052 for the fiscal year ended October 31, 2014 from $6,939,819 for the fiscal year ended October 31, 2013. Officers’ salary increased $77,309 or 13.3% to $659,400 for the fiscal year ended October 31, 2014 from $582,091 for the fiscal year ended October 31, 2013.
“We are pleased to report to our shareholders a significant improvement over last year’s results.
We believe we have turned the corner in finding the correct balance in sales mix within our different areas of business, which we expect to simultaneously allow us to achieve both our targeted level of gross profitability along with increases in revenue for the foreseeable future,” said Andrew Gordon, President & CEO.
