Coffee Holding Co., Inc. Reports Results For Three Months Ended January 31, 2017
STATEN ISLAND, NY--(Marketwired - Mar 17, 2017) - Coffee Holding Co., Inc. (NASDAQ: JVA) (the "Company" or "Coffee Holding Company") today announced its operating results for the three months ended January 31, 2017.
Net Sales. Net sales totaled $19,632,367 for the three months ended January 31, 2017, a decrease of $3,173,030, or 13.9%, from $22,805,397 for the three months ended January 31, 2016. The decrease in net sales reflects the Company's reduced wholesale transactions with our largest wholesale green coffee customer of approximately $7,645,000 which was partially offset by a gain of approximately $4.4 million in sales of both branded and private label coffee to both new and existing customers.
Cost of Sales. Cost of sales for the three months ended January 31, 2017 was $16,500,776, or 84.1% of net sales, as compared to $20,154,348, or 88.4% of net sales, for the three months January 31, 2016. 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 lower commodity prices during the quarter and reduced wholesale transactions with the Company's largest wholesale green coffee customer.
Gross Profit. Gross profit for the three months ended January 31, 2017 was $3,131,591, an increase of $480,542 from $2,651,049 for the three months ended January 31, 2016. Gross profit as a percentage of net sales increased to 16% for the three months ended January 31, 2017 from 11.6% for the three months ended January 31, 2016. The increase in gross profits was due to improved margins on the Company's wholesale and roasted business.
Operating Expenses. Total operating expenses increased by $678,371 to $2,519,181 for the three months ended January 31, 2017 from $1,840,810 for the three months ended January 31, 2016. The quarter ended January 31, 2017 included approximately $245,000 of selling and administrative expenses from the Company's subsidiary "SONO," which was not in the January 31, 2016 numbers. Also, the Company incurred increases in shipping expenses of $190,056, salary expense of $69,534, commission expense of $20,984, medical insurance expense of $30,423, depreciation expense of $22,439, professional fees of $61,301 and bank charges of $8,945. These increases are all the result of the Company's reinvestment in its growth and expansion strategy.
Net Income. The Company had net income of $375,782 or $0.06 per share basic and diluted, for the three months ended January 31, 2017 compared to net income of $439,569, or $0.07 per share basic and diluted for the three months ended January 31, 2016. The decrease in net income was due primarily to the reasons described above.
