Staten Island / NY. (chc) Coffee Holding Company Inc. announced its operating results for the fiscal quarter ended July 31, 2024:
Net Sales: Net sales totaled USD 18,813,162 for the three months ended July 31, 2024, an increase of USD 3,048,797, or 19 percent, from USD 15,764,365 for the three months ended July 31, 2023. The increase in net sales was due to increased sales to new private label customers.
Cost of Sales: Cost of sales for the three months ended July 31, 2024 was USD 14,887,098, or 79.1 percent of net sales, as compared to USD 13,315,602, or 84.5 percent of net sales, for the three months ended July 31, 2023, an increase of USD 1,571,496. Cost of sales consists primarily of the cost of green coffee and packaging materials and realized and unrealized gains or losses on hedging activity. This increase in gross margin was due to price increases that were initiated during the three months ended July 31, 2024 for the Company’s roasted coffee customers as well as a favorable inventory position which resulted in higher gross margins related to the Company’s wholesale green coffee customers.
Gross Profit: Gross profit for the three months ended July 31, 2024 amounted to USD 3,926,064 or 20.9 percent of net sales, as compared to USD 2,448,763 or 15.5 percent of net sales, for the three months ended July 31, 2023. The increase in gross profits on a percentage and dollar basis was attributable to the factors listed above.
Operating Expenses: Total operating expenses increased by USD 354,191 to USD 3,206,201 for the three months ended July 31, 2024 from USD 2,852,010 for the three months ended July 31, 2023. Selling and administrative expenses increased by USD 336,373 and officers’ salaries increased by USD 17,818. The increase in selling and administrative expenses was due to higher payroll costs, professional fees, and insurance expense, partially offset by decreases in medical expenses, automobile costs, and advertising costs.
Other Income (Expense): Other income for the three months ended July 31, 2024 was USD 166,182, a decrease of USD 84,934 from other income of USD 251,116 for the three months ended July 31, 2023. The change was attributable to a decrease in interest expense of USD 99,383, an increase in interest income of USD 249, a decrease in loss from the Company’s equity method investments of USD 5,007, and a gain on extinguishment of lease of USD 210,567, partially offset by a decrease in other income of USD 400,140 related to an insurance claim.
Income Taxes: The Company’s expense for income taxes for the three months ended July 31, 2024 totaled USD 259,249 compared to a benefit of USD 40,250 for the three months ended July 31, 2023. The change was primarily attributable to the difference in the income for the three months ended July 31, 2024 versus the loss for the three months ended July 31, 2023.
Net Income (Loss): We had net income of USD 626,796, or USD 0.11 per share basic and diluted, for the three months ended July 31, 2024 compared to a net loss of USD 111,881, or USD 0.02 per share basic and diluted, for the three months ended July 31, 2023.
«We are pleased to deliver a strong third quarter performance to our shareholders,» said Andrew Gordon, President and CEO of Coffee Holding Company. «Our efforts over the last several months are now being reflected in our results. The addition of new customers for our private label business along with renewed growth of our flagship Café Caribe Brand have led the way to the strong growth in sales which I referred to in the company update which we issued at the beginning of 2024. In addition, we have paid down our line of credit by over USD 7 million during the last nine months, resulting in a savings of over USD 150,000 in interest expense. As of today, we have a zero-balance outstanding on our line of credit and I expect we will be able to maintain a similar level of borrowings over the next several periods as I believe we will continue to have positive cash flow from our operations. Annualized, these savings would translate into approximately USD .10 a share in pretax earnings. Lastly, with the termination of the Delta transaction, we are determined to see a higher price for our stock that is commensurate with the true value of our company,» concluded Andrew Gordon.
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