STATEN ISLAND, NY--(Marketwired - Sep 13, 2017) -  Coffee Holding Co., Inc. (NASDAQ: JVA) (the "Company") today announced its operating results for the three and nine months ended July 31, 2017:

Net sales totaled $17,979,068 for the three months ended July 31, 2017, an increase of $624,535, or 3.6% from $17,354,533 for the three months ended July 31, 2016. The increase in net sales reflects our gain of approximately $4,000,000 in sales of both branded and private label coffee to both new and existing customers, partially offset by reduced wholesale transactions with our largest wholesale green coffee customer of approximately $3,400,000.

Cost of sales for the three months ended July 31, 2017 was $14,903,594, or 82.9% of net sales, as compared to $14,203,343, or 81.9% of net sales, for the three months July 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 increase in cost of sales reflects the change in the product mix due to our reduced wholesale transactions with our largest wholesale green coffee customer.

Gross profit for the three months ended July 31 2017 was $3,075,474, a decrease of $75,716 from $3,151,190 for the three months ended July 31, 2016. Gross profit as a percentage of net sales decreased to 17.1% for the three months ended July 31, 2017 from 18.1% for the three months ended July 31, 2016. Although we experienced improved margins on our wholesale and roasted business during the quarter, the decrease in gross profits was due in part to the purchase price paid for our acquisition of Comfort Foods, Inc., or CFI.

Total operating expenses increased by $1,027,420 to $2,895,643 for the three months ended July 31, 2017 from $1,868,223 for the three months ended July 31, 2016. The quarter ended July 31, 2017 included approximately $208,409 of selling and administrative expenses from our subsidiary Sonofresco, LLC, or SONO, and approximately $444,530 of selling and administrative expenses from our subsidiary CFI which were not fully included in the July 31, 2016 numbers since the SONO transaction was completed in late June 2016 and the CFI transaction occurred in 2017. Also, we incurred increases in shipping expenses of $175,481, salary expense of $42,169 and medical insurance expense of $22,946. These increases were the result of our reinvestment in our growth and expansion strategy.

The Company had net income of $32,800 or $0.01 per share basic and diluted, for the three months ended July 31, 2017 compared to net income of $755,518, or $0.12 per share basic and diluted for the three months ended July 31, 2016. The decrease in net income was due primarily to the reasons described above.

Additionally, the Company's Board of Directors has approved a share repurchase program pursuant to which the Company may repurchase up to $2 million in value of its outstanding common stock, par value, $0.001 per share, from time to time on the open market and in privately negotiated transactions subject to market conditions, share price and other factors (the "Share Repurchase Program"). The Company intends to fund the Share Repurchase Program with available cash and from future cash flow from operations.

The timing and amount of any shares repurchased will be determined based on the Company's evaluation of market conditions and other factors and the program may be discontinued or suspended at any time. Repurchases will be made in accordance with the rules and regulations promulgated by the Securities and Exchange Commission and certain other legal requirements to which the Company may be subject. Repurchases may be made, in part, under a Rule 10b5-1 plan, which allows stock repurchases when the Company might otherwise be precluded from doing so.

"We are pleased to report to our shareholders a sales increase during our third fiscal quarter of 2017. Our revenue grew by approximately 3.5% to approximately $18 million compared to approximately $17.4 million for the same period in 2016. This revenue figure includes a decrease in sales of approximately $3.4 million during the quarter to our former largest wholesale green coffee customer demonstrating that we have successfully offset all of the lost revenue from one customer by increasing our sales of branded, private label and green coffee sales to existing and new customers.

Sales of our flagship brand, Café Caribe, continue to improve, especially in the Texas market as our customer base in the region continues to grow along with the increased number of stores which now carry our brand. Sales of our private label grew by nearly 100% during the quarter from our last fiscal quarter. Sales of green coffee to our smaller, regional roaster clientele remained steady, reflecting the continuing sales growth of higher end, 100% Arabica micro brewed specialty beverages favored by the millennial coffee drinking demographic.

As our increased efforts in key areas of our business are now reflected in our revenues, I believe we have turned the page on our previous declines in revenue caused by the reduced sales to our former largest green coffee customer.

Once the integration of our most recent acquisition, Comfort Foods, Inc. in North Andover, Massachusetts, is completed, we expect to return to a profitable position as our overall gross margins continue to improve in conjunction with the changes in our overall sales mix, due in part to our efforts to replace our lower margin business with increased sales of our roasted product offerings.

Lastly, as we believe the public market is not reflecting the true value of our company, we have decided to initiate a share repurchase program whereby we may repurchase up to $2 million of our outstanding shares in the open market. Going forward, our focus will continue to be on growing our revenues over the next several years."

Full report.