For the quarter ended Jan. 31, Coffee Holding Company reported net income of $1.37 million, or 22 cents per basic share and 21 cents per diluted share, up from $0.94 million, or 15 cents per basic share and 14 cents per diluted share, in the same period one year earlier.
Net sales declined year over year to $27.35 million from $31.32 million. The company noted in its statement that the decline stemmed from "lower coffee prices as coffee prices continued to decrease on an unabated slide to a seven year low during the same period, partially offset by a 13.7% increase in pounds of green coffee sold as our business continued to shift to sales of green coffee from private label sales."
Gross profit increased year over year to $4.12 million from $3.68 million. Total operating expenses decreased 1.3% year over year to $1.87 million from $1.9 million.
TheStreet Ratings team rates COFFEE HOLDING CO INC as a "hold" with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate COFFEE HOLDING CO INC (JVA) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 89.1% when compared to the same quarter one year prior, rising from $0.05 million to $0.09 million.
- JVA's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, JVA has a quick ratio of 1.73, which demonstrates the ability of the company to cover short-term liquidity needs.
- JVA, with its decline in revenue, slightly underperformed the industry average of 0.7%. Since the same quarter one year prior, revenues slightly dropped by 5.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for COFFEE HOLDING CO INC is currently extremely low, coming in at 6.57%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.25% significantly trails the industry average.
- Net operating cash flow has significantly decreased to $2.80 million or 61.39% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: JVA Ratings Report