Monday 27 June 2022

USA – Coffee Holding Co., Inc. reports results for three months ended January 31, 2015

Must read

STATEN ISLAND, NY – Coffee Holding Co., Inc. announced on Mar 6, 2015, its operating results for the three months ended January 31, 2015.

The Company reported net income of $71,801, or $0.01 per share basic and diluted, for the three months ended January 31, 2015, compared to 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.

The decrease in net income reflects a $1.7 million or $0.27 per share unrealized loss on our hedging activities.

Net sales totaled $38,405,979 for the three months ended January 31, 2015, an increase of $11,059,632, or 40%, from $27,346,347 for the three months ended January 31, 2014.

The increase in net sales reflects a combination of increased sales of green and roasted coffee along with higher coffee prices year over year.

Cost of sales for the three months ended January 31, 2015 was $36,484,535 or 95.0% of net sales, as compared to $23,227,722 or 84.9% of net sales for the three months ended January 31, 2014.

The increase in cost of sales reflects higher prices paid for green coffee during this period compared to the same period during 2014 and a $1.7 million unrealized loss on our hedging activities in the three months ended January 31, 2015 compared to a $1 million gain in the three months ended January 31, 2014.

Gross profit decreased $2,197,181 to $1,921,444 for the three months ended January 31, 2015 as compared to gross profit of $4,118,625 for the three months ended January 31, 2014.

Gross profit as a percentage of net sales decreased by 10.1% for the three months ended January 31, 2015, as compared to gross profit as a percentage of net sales for the three months ended January 31, 2014.

The decrease in our margins reflects unrealized losses in our hedging activities and higher prices paid for green coffee during this period compared to the same period during 2014.

Total operating expenses decreased by $50,620, or 2.7%, to $1,819,092 for the three months ended January 31, 2015 as compared to operating expenses of $1,869,712 for the three months ended January 31, 2014. The decrease in operating expenses was due to a decrease in selling and administrative expenses of $44,255 and a decrease of $6,365 in officers’ salaries.

“In spite of an un-interrupted 15% decline in the price of green coffee during our first quarter, we were able to grow revenues by 40% as increased sales of green coffee and branded products partially offset the decline in the price of green coffee.

We have completed our business rationalization process which began in late 2013 as the volatility in the green coffee market forced us to discontinue doing business with several large accounts that were not willing to pay the higher prices that the coffee market was commanding at the time.

We did not feel it made sense to do business with such accounts in order to grow the top line at razor thin margins.

We believed it was better to concentrate in the areas which have proven to be our strengths in all market conditions, specialty upscale green coffee offerings and growing our Café Caribe brand,” said Andy Gordon, President and CEO.

“Whereas we used to have a 50% roasted, 50% wholesale green sales product mix, the shift away from lower margin private label business into these other areas now gives us an 80% to 20% green coffee to roasted sales mix which we believe will be more effective in maintaining profitability, as well as keeping both long and short term costs in check.

With the significant change over the last few years from traditional sales of can and bagged products to k-cups and out-of-home consumption, we believe that by supplying the base commodity, green coffee, to our customers, rather than being involved in the manufacturing and marketing sides of selling finished product, we will be able to control costs, improve margins and grow revenues all at the same time,” added Mr. Gordon.

Latest article