Staten Island / NY. (chc) Coffee Holding Company Inc. announced its operating results for the fiscal quarter ended April 30, 2022:
Net sales: Net sales totaled USD 16,498,169 for the three months ended April 30, 2022, an increase of USD 2,029,611, or 14.0 percent, from USD 14,468,558 for the three months ended April 30, 2021. The increase in net sales was due to an increase of sales to the Company’s legacy customers partially offset by a decrease in sales from the Company’s Generations/Steep N Brew subsidiary.
Cost of Sales: Cost of sales for the three months ended April 30, 2022 was USD 14,505,415, or 87.9 percent of net sales, as compared to USD 10,699,090, or 74 percent of net sales, for the three months April 30, 2021. The increase in cost of sales was due to the Company’s increased sales to the Company’s legacy customers, increased prices of green coffee and packaging materials and the Company’s continued losses from the Company’s Generations/Steep N Brew subsidiary, which included obsolete inventory write-off of approximately USD 718,000.
Gross profit: Gross profit for the three months ended April 30, 2022 amounted to USD 1,992,754 or 12.1 percent of net sales, as compared to USD 3,769,468 or 26.1 percent of net sales, for the three months ended April 30, 2021. The decrease in gross profits on a percentage basis was attributable to the factors listed above.
Total operating expenses: Total operating expenses increased by USD 50,899 to USD 3,366,223 for the three months ended April 30, 2022 from USD 3,315,324 for the three months ended April 30, 2021. Selling and administrative expenses increased by USD 53,399 and officers’ salaries decreased by USD 2,500.
Net (Loss) Income: The Company had a net loss of USD 368,096 or USD (0.06) per share basic and diluted, for the three months ended April 30, 2022 compared to net income of USD 357,044, or USD 0.06 per share basic and diluted for the three months ended April 30, 2021. The decrease in net income was due primarily to the continued losses from the Company’s Generations/Steep N Brew subsidiary.
«Although we increased sales by approximately USD 2.0 million or 14.0 percent compared to last year and business remained strong in both the Coffee Holding legacy and Optco divisions, we recorded a loss of USD 0.06 per share for this fiscal period, primarily as a result of an operating loss at our «Generations / Steep N Brew» division. After several periods of losses at «Generations / Steep N Brew», stemming from increasing costs, impacts of the Covid pandemic and poor performance, we are now looking to restructure the operational activities at «Generations / Steep N Brew». Unfortunately, we incurred write offs relating to accounts receivables, inventory and packaging materials at this division, resulting in an operating loss of approximately USD 508,000 (net of tax) or USD 0.09 per share,» said Andrew Gordon, President and CEO of Coffee Holding Company.
«Moving forward, I believe we have a clear direction on how to grow both our sales and profits as we had in the past by focusing on sales of unroasted green coffee beans to small and medium size roasters, sales of private label products to large wholesalers and retailers and a continued push on our own legacy brands. I believe this has been and will continue to be a winning formula in our efforts to grow both our sales and profits. We have increased our sales now for seven consecutive months compared to the prior year despite low meaningful sales from our «Generations / Steep N Brew» subsidiary, including a 14 percent increase this quarter and I anticipate that trend will continue in spite of the inflationary headwinds that many of our green coffee customers now face. We appreciate our shareholders’ loyalty and patience and we look forward to a clearer path forward in the immediate future,» concluded Gordon.