STATEN ISLAND, NY, U.S. – Coffee Holding Co., Inc. (NASDAQ: JVA) (“Coffee Holding”), a leading wholesale coffee dealer and roaster, reported financial results for its fiscal third quarter ended July 31, 2015.
Fiscal Q3 2015 Financial Results
Net sales in the fiscal third quarter of 2015 increased to approximately $27.0 million compared to approximately $26.6 million in the same year-ago quarter. The increase reflects an increase in sales of our roasted product offerings of approximately $850,000, which was achieved despite a commodity pricing decrease of almost $0.75 per pound of green coffee period over period, which negatively impacted our wholesale green coffee sales.
Gross profit in the third quarter was approximately $2.0 million compared to approximately $3.1 million in the year-ago quarter. The decrease in profit reflects a significant gain on hedging activity during the 2014 period as compared to the 2015 period and a commodity pricing decrease of almost $0.75 per pound of green coffee period over period, which negatively impacted our wholesale green coffee sales.
Selling, general and administrative expenses in the fiscal third quarter were approximately $1.9 million compared to approximately $1.8 million in the year-ago quarter. As a percentage of revenues, SG&A was 7.0% compared to 6.8%.
Net income in the fiscal third quarter was approximately $0.1 million, or $0.02 per diluted share, compared to net income of approximately $0.8 million, or $0.11 per diluted share, in the year-ago quarter. Without the impact of hedging activities for the three months ended July 31, 2014 and 2015, our basic earnings per share would have been $0.08 for the 2014 period compared to approximately $0.05 per share for the 2015 period.
At July 31, 2015, cash totaled approximately $3.3 million compared to approximately $3.8 million at October 31, 2014. Total debt was approximately $4.3 million at July 31, 2015 compared to approximately $2.5 million at October 31, 2014.
Management Commentary
“Our fiscal third quarter represents the first clean look at our core coffee business without speculative trading activities,” said Andrew Gordon, President and CEO of Coffee Holding. “This is also our third consecutive quarter of year over-year sales growth despite continued headwinds in the overall coffee market and commodity pricing. While the top-line growth was modest, we returned to profitability, as expected.
“Operationally, our three business segments remain strong, with growth across specialty green coffee distribution and sales of private label and branded products. Our new channels of distribution in the Texas market for our Café Caribe label and expected continued growth in that market, has now made this the second most important marketing area for us for our Café Caribe label, surpassing our distribution efforts in the Chicago mid-west market and trailing only our distribution in the New York, New Jersey and Pennsylvania marketing area. We also remain on target to hit our 2015 goal of 56.1 million pounds of coffee sold, which represents a 4% increase from 2014.”
“Just last month,” continued Mr. Gordon, “we began selling our own single cup product line which we manufacture through our joint venture, Generations Coffee Company, LLC, to address the continued shift in consumer demand from packaged ground coffee to single cup product offerings. We do not expect this new initiative to affect any of our current wholesale client or partner relationships. With this new product offering, we are solely targeting our current customer base and potential new customers, both of which we believe would otherwise purchase their single cup needs from other smaller third parties. We expect this single cup initiative to supplement our other avenues for growth potential in 2016.”
Conference Call
Coffee Holding President & CEO Andrew Gordon will host the earnings call, followed by a question and answer period.
Date: Tuesday, September 15, 2015 Time: 10:00 a.m. Eastern time (7:00 a.m. Pacific time) Toll-free dial-in number: 1-877-407-8133 International dial-in number: 201-689-8040 Conference ID: 13619682
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.
A replay of the conference call will be available on the same day through September 22, 2015.
Toll-free replay number: 1-877-660-6853 International replay number: 1-201-612-7415 Replay ID: 13619682
