Oxford, MS 3/17/2011 -- Coffee Holding Co (Nasdaq:JVA ) today announced its operating results for the three months ended January 31, 2011. In this release, the Company: Reports net sales of $25,641,093 for the three months ended January 31, 2011 and $21,359,151 for the three months ended January 31, 2010; Reports sales growth of 20% for the three months ended January 31, 2011 compared to the three months ended January 31, 2010; and Reports net income of $1,041,072, or $0.19 per share (basic and diluted), for the three months ended January 31, 2011 compared to net income of $557,978, or $0.10 per share (basic and diluted), for the three months ended January 31, 2010.The Company had net income of $1,041,072, or $0.19 per share (basic and diluted), for the three months ended January 31, 2011 compared to net income of $557,978, or $0.10 per share (based and diluted), for the three months ended January 31, 2010. The increase in net income primarily reflects increased gross profit.
Net sales totaled $25,641,093 for the three months ended January 31, 2011, an increase of $4,281,942, or 20% from $21,359,151 for the three months ended January 31, 2010. The increase in net sales reflects higher sales prices compared to the first quarter of fiscal 2010 as well as additional poundage sold due to the addition of our OPTCO subsidiary.
Cost of sales for the three months ended January 31, 2011 was $22,560,399 or 87.9% of net sales, as compared to $18,721,421 or 87.7% of net sales for the three months ended January 31, 2010. The increase in cost of sales reflects the increased cost of green coffee.
Total operating expenses increased by $97,188, or 6.11%, to $1,686,096 for the three months ended January 31, 2011 as compared to operating expenses of $1,588,908 for the three months ended January 31, 2010. The increase in operating expenses was due to increases in selling and administrative expense of $67,221 and an increase in officers' salaries of $30,001. The added expenses were justified due to the high level of business during this period.
"In spite of commodity pressure and dramatically increased coffee prices during the quarter, we were still able to almost double our net income as compared to the same period last year. Our horizontal integrated business structure combined with our hedging policies helped us to significantly alleviate these higher costs as evidenced by our cost of sales only slightly increasing by 0.02 % during a time when the underlying commodity increased by over one dollar per pound as the fundamentals in the coffee market led to higher futures prices. With the national brands and our other competitors increasing their prices, but not to the full effect of the increase in the futures market, we remained under financial constraints on a portion of our private label sales; yet we were able to absorb much of those margin pressures through other areas of our business. We anticipate this trend will continue and we have just implemented another round of price increases which should be reflected in the results of our upcoming quarter even as coffee prices continue to climb to over thirty year highs."
"We remain upbeat regarding our overall business and believe we are well positioned to continue to improve both our top and bottom lines during these challenging times," said Andrew Gordon, President & CEO.
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