STATEN ISLAND, NY – Coffee Holding Co., Inc. has announced its operating results for the three months ended January 31, 2014.
The Company reported net income of $1,371,740, or $0.22 per share basic and $0.21 per share diluted, for the three months ended January 31, 2014 compared to net income of $937,537 or $0.15 per share basic and $0.14 per share diluted, for the three months ended January 31, 2013. The increase in net income reflects increased profitability on our sales.
Net sales totaled $27,346,347 for the three months ended January 31, 2014, a decrease of $3,972,457, or 13%, from $31,318,804 for the three months ended January 31, 2013.
The decrease in net sales reflects lower coffee prices as coffee prices continued to decrease on an unabated slide to a seven year low during the same period, partially offset by a 13.7% increase in pounds of green coffee sold as our business continued to shift to sales of green coffee from private label sales.
Cost of sales for the three months ended January 31, 2014 was $23,227,722 or 84.9% of net sales, as compared to $27,636,207 or 88.2% of net sales for the three months ended January 31, 2013.
The decrease in cost of sales reflects lower prices paid for green coffee during this period compared to the same period during 2013.
Gross profit increased $436,028 to $4,118,625 for the three months ended January 31, 2014 as compared to gross profit of $3,682,597 for the three months ended January 31, 2013.
Gross profit as a percentage of net sales increased by 3.3% for the three months ended January 31, 2014, as compared to gross profit as a percentage of net sales for the three months ended January 31, 2013.
The increase in our margins primarily reflects unrealized gains in our hedging activities and lower prices paid for green coffee during this period compared to the same period during 2013.
Total operating expenses decreased by $25,466, or 1.3%, to $1,869,712 for the three months ended January 31, 2014 as compared to operating expenses of $1,895,178 for the three months ended January 31, 2013. The decrease in operating expenses was due to a decrease in selling and administrative expenses of $54,629, partially offset by an increase in officers’ salaries of $29,163.
“We are extremely pleased to report these positive results to our shareholders. Although coffee prices remained stalled at depressed levels during this period resulting in a 13% decline in revenues, this was offset by a 13.7% increase in poundage sold during the same period.
With coffee prices now on the rise again, we believe the combination of higher commodity prices along with continued growth in our overall business should result in increased revenues.
Our commitment to margin improvement was evidenced by this quarter’s earnings and we will remain focused on continuing these results going forward,” said Andrew Gordon, President and Chief Executive Officer.
“Our business continues to remain robust as we have achieved growth in all three major areas: wholesale green coffee sales, branded and private label sales.
With the recent increase in the price of green coffee, we expect that these trends will continue to improve due to our position in the marketplace.
As we stated in our comments with our 2013 annual results, we believe our recent problems are behind us and we thank our fellow shareholders for their continued patience and support,” concluded Mr. Gordon.
