Coffee Holding Co., Inc. (Nasdaq: JVA) (the “Company” or “Coffee Holding Company”) nowadays announced its operating consequences for the 3 months and six months ended April 30, 2019. Net Sales. Net sales totaled $20,716,491 for the three months ended April 30, 2019, a lower of $1,477,407, or 7%, from $22,193,898 for the 3 months ended April 30, 2018. The decrease in internet sales displays the decrease in promoting the rate of espresso all through this quarter in addition to a decrease in sales of about $2,000,000 to the Company’s former largest wholesale green coffee consumer.
Net income totaled $forty four,350,299 for the six months ended April 30, 2019, an increase of $seventy three,183 from $forty four,277,116 for the six months ended April 30, 2018. The increase in internet sales displays the continuing integration of the Steep & Brew enterprise into the Company’s sales blend as well as the Company’s extended sales of its branded and personal label coffees, partly offset by a decrease of about $2,000,000 in income to the Company’s former largest wholesale inexperienced espresso client and a decrease in income to Sears due to its financial ruin filing.
Cost of Sales. The cost of sales for the 3 months ended April 30, 2019, became $17,174,825, or eighty-two.Nine% of net income, compared to $18,326,914, or eighty-two. 6% of net sales for the 3 months, April 30, 2018. Cost of income is composed generally of the price of inexperienced coffee and packaging materials and realized and unrealized gains or losses on hedging activity. The lower in fee of sales changed due to the Company’s reduced income partially offset via the increased price of metallic cans due to the increased tariffs and a boom within the Company’s losses on its hedging of futures and alternative contracts.
Cost of sales for the six months ended April 30, 2019, become $36,239,592, or 81.7% of internet income, compared to $36,614,421, or eighty-two. 7% of net sales for the six months, April 30, 2018. Cost of income is composed normally of the fee of inexperienced coffee and packaging substances and found out and unrealized profits or losses on hedging pastime. The decrease in sales fee became due to the Company’s decreased sales offset by way of the improved cost of metal cans due to the expanded price lists and the Company’s accelerated losses from its hedging of futures and options contracts.
Gross Profit. Gross earnings for the 3 months ended April 30, 2019 was $3,541,666, a decrease of $325,318 from $three,866,984 for the three months ended April 30, 2018. Gross profit as a percent of net sales reduced to 17.1% for the 3 months ended April 30, 2019, from 17.4% for the 3 months ended April 30, 2018. The decrease in gross earnings resulted from better metal and trucking charges and the Company’s expanded losses from its hedging of futures and options contracts.
Gross profit for the six months ended April 30, 2019 became $eight,110,707, an growth of $448,012 from $7,662,695 for the six months ended April 30, 2018. Gross profit as a percentage of net sales elevated to 18.3% for the six months ended April 30, 2019, from 17.Three% for the six months ended April 30, 2018. The boom in gross income resulted from progressing margins on the Company’s wholesale and roasted business, offset by using higher metallic and trucking prices.
Operating Expenses. Total operating fees multiplied by way of $630,910 to $3,634,408 for the 3 months ended April 30, 2019, from $three,003,498 for the three months ended April 30, 2018. Selling and administrative charges expanded $644,006, or 22.7%, to $three,477,254 for the three months ended April 30, 2019 from $2,833,248 for the 3 months ended April 30, 2018. The number one reason for this increase was Steep & Brew’s purchase and the growth within the Company’s freight expenses because the Company multiplied and improved its product distribution. Officers’ profits reduced via $thirteen,096 or 7.7% to $157,154 for the 3 months ended April 30, 2019, from $a hundred and seventy,250 for the 3 months ended April 30, 2018.
Total running expenses elevated by $1,82,833 to $7,513,415 for the six months ended April 30, 2019 from $five,910,582 for the six months ended April 30, 2018. Selling and administrative charges increased $1,582,833, or 28.Four%, to $7,152,915 for the six months ended April 30, 2019 from $five,570,082 for the six months ended April 30, 2018. The number one reason for this growth was the acquisition of Steep & Brew and the company’s freight charges because the Company improved and extended its product distribution. Officers’ income elevated with the aid of $20,000 or 5.9% to $360,500 for the six months ended April 30, 2019, from $340,500 for the six months ended April 30, 2018.
Net Income. The Company had an internet lack of $238,468 or $zero.04 per percentage simple and diluted, for the 3 months ended April 30, 2019, in comparison to net earnings of $510,849, or $0.09 according to share simple and diluted for the 3 months ended April 30, 2018. The Company had net earnings of $ seventy-six,247 or $0.01 in line with percentage basic and diluted, for the six months ended April 30, 2019, as compared to internet income of $942,236, or $0.16 in keeping with percentage primary and diluted for the six months ended April 30, 2018. The decrease in internet income turned due commonly to the motives defined above.
“The endured bear market in espresso weighed closely on our results depressing revenues and profitability as espresso costs sank to sparkling fourteen-year lows for the duration of the beyond the sector, down a further sixteen% over the past 90 day period. With approximately 50% of our sales derived from the sale of green coffee beans, there is without a doubt no powerful method to insulate ourselves and our revenues from the decline in green espresso charges,” stated Andrew Gordon, President, and CEO of Coffee Holding Company. “Obviously, those had been no longer the effects we expected at the beginning of this economic year. However, due to our horizontally incorporated commercial enterprise model, gross income, except losses from hedging, held steady for the duration of this period whilst coffee prices collapsed. Our absolutely included platform enabled us to withstand among the industry fundamental pressures that most of our competitors are unable to resist.
Like many of my colleagues in the coffee market, we did not assume this decline’s period and severity. The maximum huge I’ve been concerned about within my thirty-five years of espresso industry enjoy. The gambling subject has fundamentally changed over the last few years from a supply/call for the ballgame to a risky atmosphere because of the over-involvement of doors speculative forces. However, at this point, we’ve absorbed our paper losses in the course of this region whilst at the same time locking in a really favorable physical inventory function for the foreseeable destiny. Even if costs do now not rally in a meaningful manner over the next ninety-one hundred twenty days and presently they have risen over 10% from their low, we consider the worst is in the back of us. A return to profitability is expected to occur. Obviously, if the market were to rally appreciably, each revenue and gross profits would quickly circulate inside the same course.
