Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jul. 31, 2015 | Sep. 10, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | COFFEE HOLDING CO INC | |
Entity Central Index Key | 1,007,019 | |
Document Type | 10-Q | |
Document Period End Date | Jul. 31, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 6,215,894 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jul. 31, 2015 | Oct. 31, 2014 |
CURRENT ASSETS: | ||
Cash | $ 3,315,177 | $ 3,782,639 |
Accounts receivable, net of allowances of $144,000 for 2015 and 2014 | 11,995,756 | 15,419,860 |
Inventories | 12,444,317 | 15,210,153 |
Prepaid green coffee | 1,014,911 | 467,155 |
Prepaid expenses and other current assets | 289,151 | 260,112 |
Prepaid and refundable income taxes | 1,434,577 | 759 |
Deferred income tax asset | 1,442,747 | 343,657 |
TOTAL CURRENT ASSETS | 31,936,636 | 35,484,335 |
Machinery and equipment, at cost, net of accumulated depreciation of $4,106,177 and $3,704,802 for 2015 and 2014, respectively | 1,939,477 | 1,991,094 |
Customer list and relationships, net of accumulated amortization of $39,375 and $33,750 for 2015 and 2014, respectively | 110,625 | 116,250 |
Trademarks | 180,000 | 180,000 |
Goodwill | 440,000 | 440,000 |
Equity method investments | 97,242 | 97,404 |
Deposits and other assets | 605,478 | 643,549 |
TOTAL ASSETS | 35,309,458 | 38,952,632 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 5,600,015 | 8,693,100 |
Line of credit | 4,268,458 | 2,498,458 |
Due to broker | 476,661 | 484,924 |
Income taxes payable | 0 | 331,051 |
TOTAL CURRENT LIABILITIES | 10,345,134 | 12,007,533 |
Deferred income tax liabilities | 114,747 | 165,157 |
Deferred rent payable | 218,951 | 209,640 |
Deferred compensation payable | 477,478 | 515,549 |
TOTAL LIABILITIES | 11,156,310 | 12,897,879 |
STOCKHOLDERS EQUITY: | ||
Preferred stock, par value $.001 per share; 10,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, par value $.001 per share; 30,000,000 shares authorized, 6,456,316 shares issued; 6,215,894 shares outstanding for periods ended July 31, 2015 and 2014, respectively | 6,456 | 6,456 |
Additional paid-in capital | 15,904,109 | 15,904,109 |
Retained earnings | 9,237,571 | 11,079,168 |
Less: Treasury stock, 240,422 common shares, at cost for 2015 and 2014 | (1,267,862) | (1,267,862) |
Total Coffee Holding Co., Inc. Stockholders Equity | 23,880,274 | 25,721,871 |
Noncontrolling interest | 272,874 | 332,882 |
TOTAL EQUITY | 24,153,148 | 26,054,753 |
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY | $ 35,309,458 | $ 38,952,632 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jul. 31, 2015 | Oct. 31, 2014 |
ASSETS: | ||
Allowances for doubtful accounts | $ 144,000 | $ 144,000 |
Accumulated Depreciation | 4,106,177 | 3,704,802 |
Customer list and relationships, accumulated amortization | $ 39,375 | $ 33,750 |
STOCKHOLDERS EQUITY: | ||
Preferred stock, par value | $ .001 | $ .001 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock shares authorized | 30,000,000 | 30,000,000 |
Common stock shares issued | 6,456,316 | 6,456,316 |
Common stock shares outstanding | 6,215,894 | 6,215,894 |
Treasury Stock, Shares | 240,422 | 240,422 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Consolidated Statements Of Income | ||||
NET SALES | $ 27,039,857 | $ 26,628,571 | $ 95,708,890 | $ 79,373,667 |
COST OF SALES (Including $17.9 and $13.2 million of related party costs for the nine months ended July 31, 2015 and 2014, respectively. Including $3.0 and $4.1 million for the three months ended July 31, 2015 and 2014, respectively.) | 24,991,366 | 23,574,095 | 92,816,224 | 68,239,903 |
GROSS PROFIT (LOSS) | 2,048,491 | 3,054,476 | 2,892,666 | 11,133,764 |
OPERATING EXPENSES: | ||||
Selling and administrative | 1,723,158 | 1,656,789 | 5,286,993 | 5,094,939 |
Officers' salaries | 163,850 | 159,100 | 489,435 | 459,300 |
TOTALS | 1,887,008 | 1,815,889 | 5,776,428 | 5,554,239 |
(LOSS) INCOME FROM OPERATIONS | 161,483 | 1,238,587 | (2,883,762) | 5,579,525 |
OTHER INCOME (EXPENSE): | ||||
Interest income | 13,074 | 12,769 | 26,302 | 32,064 |
Gain (Loss) from equity method investments | (610) | (759) | (162) | (847) |
Interest expense | (35,156) | (16,271) | (153,768) | (42,340) |
TOTAL | (22,692) | (4,261) | (127,628) | (11,123) |
INCOME BEFORE PROVISION FOR INCOME TAXES AND NON-CONTROLLING INTEREST IN SUBSIDIARY | 138,791 | 1,234,326 | (3,011,390) | 5,568,402 |
(Benefit) provision for income taxes | 40 | 450,952 | (1,189,785) | 2,114,905 |
NET INCOME BEFORE NON-CONTROLLING INTEREST IN SUBSIDIARY | 138,751 | 783,374 | (1,821,605) | 3,453,497 |
Less: net income attributable to the non-controlling interest in subsidiary | 411 | (24,427) | (19,992) | (61,590) |
NET INCOME ATTRIBUTABLE TO COFFEE HOLDING CO., INC. | $ 139,162 | $ 758,947 | $ (1,841,597) | $ 3,391,907 |
Basic earnings per share | $ 0.02 | $ 0.12 | $ (.30) | $ 0.53 |
Diluted earnings per share | $ 0.02 | $ 0.11 | $ (.30) | $ 0.51 |
Weighted average common shares outstanding: | ||||
Basic | 6,215,894 | 6,344,487 | 6,215,894 | 6,362,933 |
Diluted | 6,215,894 | 6,611,487 | 6,215,894 | 6,629,933 |
CONSOLIDATED STATEMENTS OF INC5
CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Consolidated Statements Of Income | ||||
Related party costs | $ 3 | $ 4.1 | $ 17.9 | $ 13.2 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
OPERATING ACTIVITIES: | ||
Net (loss) income | $ (1,821,605) | $ 3,453,497 |
Adjustments to reconcile net (loss) income to net cash (used in) operating activities: | ||
Depreciation and amortization | 408,436 | 436,277 |
Unrealized gain on commodities | (8,263) | (1,211,540) |
Loss on equity method investments | 162 | 847 |
Deferred rent | 9,311 | 11,084 |
Deferred income taxes | (1,149,500) | 1,311,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,424,104 | (1,001,691) |
Inventories | 2,765,836 | (3,588,269) |
Prepaid expenses and other current assets | (29,039) | (77,445) |
Prepaid green coffee | (547,756) | (85,044) |
Prepaid and refundable income taxes | (1,433,818) | 201,800 |
Accounts payable and accrued expenses | (3,093,085) | (1,256,666) |
Income taxes payable | (331,051) | 700 |
Net cash used in operating activities | (1,806,268) | (1,805,450) |
INVESTING ACTIVITIES: | ||
Purchases of machinery and equipment | (351,194) | (398,847) |
Net cash used in investing activities | (351,194) | (398,847) |
FINANCING ACTIVITIES: | ||
Advances under bank line of credit | 9,272,578 | 3,551,522 |
Principal payments under bank line of credit | (7,502,578) | (1,280,704) |
Purchase of treasury stock | 0 | (660,778) |
Payment of dividend | (80,000) | (52,000) |
Net cash provided by financing activities | 1,690,000 | 1,558,040 |
NET DECREASE IN CASH | (467,462) | (646,257) |
CASH, BEGINNING OF PERIOD | 3,782,639 | 4,035,669 |
CASH, END OF PERIOD | 3,315,177 | 3,389,412 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA: | ||
Interest paid | 152,765 | 37,513 |
Income taxes paid | $ 1,647,668 | $ 715,000 |
1. BUSINESS ACTIVITIES
1. BUSINESS ACTIVITIES | 9 Months Ended |
Jul. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
1. BUSINESS ACTIVITIES | Coffee Holding Co., Inc. (the Company) conducts wholesale coffee operations, including manufacturing, roasting, packaging, marketing and distributing roasted and blended coffees for private labeled accounts and its own brands, and it sells green coffee. The Companys core product, coffee, can be summarized and divided into three product categories (product lines) as follows: Wholesale Green Coffee: Private Label Coffee: Branded Coffee: The Companys private label and branded coffee sales are primarily to customers that are located throughout the United States with limited sales in Canada and the Far East. Such customers include supermarkets, wholesalers, and individually-owned and multi-unit retailers. The Companys unprocessed green coffee, which includes over 90 specialty coffee offerings, is sold primarily to specialty gourmet roasters and to coffee shop operators in the United States with limited sales in Australia, Canada, England and China. The Companys wholesale green, private label, and branded coffee product categories generate revenues and cost of sales individually but incur selling, general and administrative expenses in the aggregate. There are no individual product managers and discrete financial information is not available for any of the product lines. The Companys product portfolio is used in one business and it operates and competes in one business activity and economic environment. In addition, the three product lines share customers, manufacturing resources, sales channels, and marketing support. Thus, the Company considers the three product lines to be one single reporting segment. |
2. BASIS OF PRESENTATION
2. BASIS OF PRESENTATION | 9 Months Ended |
Jul. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
2. BASIS OF PRESENTATION | The following (a) condensed consolidated balance sheet as of October 31, 2014, which has been derived from audited financial statements, and (b) the unaudited interim condensed financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (U.S. GAAP) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Companys latest shareholders annual report on Form 10-K filed with the SEC on January 23, 2015 for the fiscal year ended October 31, 2014 (Form 10-K). In the opinion of management, all adjustments (which include normal and recurring nature adjustments) necessary to present a fair statement of the Companys financial position as of July 31, 2015, and results of operations for the three and nine months ended July 31, 2015 and 2014 and the cash flows for the nine months ended July 31, 2015 and 2014, as applicable, have been made. The results of operations for the three and nine months ended July 31, 2015 and 2014 are not necessarily indicative of the operating results for the full fiscal year or any future periods. The condensed consolidated financial statements include the accounts of the Company, the Companys subsidiary, Organic Products Trading Company, LLC (OPTCO) and Generations Coffee Company, LLC (GCC), the entity formed as a result of the Companys joint venture with Carusos Coffee, Inc. The Company owns a 60% equity interest in GCC. All significant inter-company transactions and balances have been eliminated in consolidation. |
3. RECENTLY ISSUED ACCOUNTING P
3. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS AFFECTING THE COMPANY | 9 Months Ended |
Jul. 31, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
3. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS AFFECTING THE COMPANY | In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, (ASU 2014-09) Revenue from Contracts with Customers, which requires an entity to recognize revenue representing the transfer of promised goods or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. ASU 2014-09 is intended to establish principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenues and cash flows arising from the entitys contracts with customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. The original standard was effective for the Company on January 1, 2017, however, in April 2015, the FASB proposed a one-year deferral of this standard with a new effective date for the Company of January 1, 2018. Early application is not permitted. The Company is currently evaluating the effect that ASU 2014-09 will have on its condensed consolidated financial statements and related disclosures. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, which applies to inventory that is measured using first-in, first-out (FIFO) or average cost. Under the updated guidance, an entity should measure inventory that is within scope at the lower of cost and net realizable value, which is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory that is measured using last-in, last-out (LIFO). This ASU is effective for annual and interim periods beginning after December 15, 2016, and should be applied prospectively with early adoption permitted at the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of adopting this guidance. No other accounting pronouncements were issued during the nine months ended July 31, 2015, but not yet adopted are expected to have a material impact on the Companys condensed consolidated financial statements. |
4. PREPAID GREEN COFFEE
4. PREPAID GREEN COFFEE | 9 Months Ended |
Jul. 31, 2015 | |
Notes to Financial Statements | |
4. PREPAID GREEN COFFEE | The balance represents advance payments made by OPTCO to several coffee growing cooperatives for the purchase of green coffee. Interest is charged to the cooperatives for these advances. Interest earned was $26,302 and $32,064 for the nine months ended July 2015 and 2014, respectively. The prepaid coffee balance was $1,014,911 at July 31, 2015 and $467,155 at October 31, 2014. |
5. ACCOUNTS RECEIVABLE
5. ACCOUNTS RECEIVABLE | 9 Months Ended |
Jul. 31, 2015 | |
Notes to Financial Statements | |
5. ACCOUNTS RECEIVABLE | Trade accounts receivable are stated at the amount the Company expects to collect. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Management considers the following factors when determining the collectibility of specific customer accounts: customer credit-worthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. Past due balances over 60 days and other higher risk amounts are reviewed individually for collectibility. If the financial condition of the Companys customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on managements assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. The reserve for sales discounts represents the estimated discount that customers will take upon payment. The reserve for other allowances represents the estimated amount of returns, slotting fees and volume based discounts estimated to be incurred by the Company from its customers. The allowances are summarized as follows: July 31, October 31, 2015 2014 Allowance for doubtful accounts $ 65,000 $ 65,000 Reserve for other allowances 35,000 35,000 Reserve for sales discounts 44,000 44,000 Totals $ 144,000 $ 144,000 |
6. INVENTORIES
6. INVENTORIES | 9 Months Ended |
Jul. 31, 2015 | |
Inventory Disclosure [Abstract] | |
6. INVENTORIES | Inventories at July 31, 2015 and October 31, 2014 consisted of the following: July 31, 2015 October 31, 2014 Packed coffee $ 1,517,604 $ 1,578,248 Green coffee 10,172,904 12,987,257 Packaging supplies 753,809 644,648 Totals $ 12,444,317 $ 15,210,153 |
7. COMMODITIES HELD BY BROKER
7. COMMODITIES HELD BY BROKER | 9 Months Ended |
Jul. 31, 2015 | |
Notes to Financial Statements | |
7. COMMODITIES HELD BY BROKER | The Company has used, and intends to continue to use in a limited capacity, short-term coffee futures and options contracts primarily for the purpose of partially hedging and minimizing the effects of changing green coffee prices and to reduce our cost of sales. The commodities held at the broker represent the market value of the Companys trading account, which consists of options and future contracts for coffee held with a brokerage firm. The Company uses options and futures contracts, which are not designated or qualifying as hedging instruments, to partially hedge the effects of fluctuations in the price of green coffee beans. Options and futures contracts are recognized at fair value in the condensed consolidated financial statements with current recognition of gains and losses on such positions. The Companys accounting for options and futures contracts may increase earnings volatility in any particular period. The Company has open position contracts held by the broker, which are summarized as follows: July 31, 2015 October 31, 2014 Option Contracts 19,399 (217,624 ) Future Contracts (496,060 ) (267,300 ) Total Commodities (476,661 ) (484,924 ) The Company classifies its options and future contracts as trading securities and accordingly, unrealized holding gains and losses are included in earnings and not reflected as a net amount as a separate component of stockholders equity. At July 31, 2015, the Company held 75 options covering an aggregate of 2,812,500 pounds of green coffee beans at $1.29 per pound. The fair market value of these options, which was obtained from observable market data of similar instruments was $127,575. At July 31, 2015, the Company held 83 futures contracts for the purchase of 3,112,500 pounds of green coffee at a weighted average price of $1.29 per pound. The fair market value of coffee applicable to such contracts was $1.25 per pound at that date. At October 31, 2014, the Company held 60 futures contracts for the purchase of 2,250,000 pounds of green coffee at a weighted average price of $2.00 per pound. The fair market value of coffee applicable to such contracts was $1.88 per pound at that date. The Company did not hold any options that were in the money at October 31, 2014. The Company recorded realized and unrealized gains and losses respectively, on these contracts as follows: Three Months Ended July 31, 2015 2014 Gross realized gains $ 293,439 $ 1,165,014 Gross realized losses (175,280 ) (824,285 ) Unrealized losses (481,433 ) 38,437 Total $ (363,274 ) $ 379,166 Nine Months Ended July 31, 2015 2014 Gross realized gains $ 991,706 $ 3,321,023 Gross realized losses (6,415,825 ) (1,796,474 ) Unrealized gains 8,263 1,211,540 Total $ (5,415,856 ) $ 2,736,089 |
8. LINE OF CREDIT
8. LINE OF CREDIT | 9 Months Ended |
Jul. 31, 2015 | |
Debt Disclosure [Abstract] | |
8. LINE OF CREDIT | On February 17, 2009, the Company entered into a financing agreement with Sterling National Bank (Sterling) for a $5,000,000 credit facility. The credit facility is a revolving $5,000,000 line of credit and the Company can draw on the line at an amount up to 85% of eligible accounts receivable and 25% of eligible inventory consisting of green coffee beans and finished coffee not to exceed $1,000,000. Sterling shall have the right from time to time to adjust the foregoing percentages based upon, among other things, dilution, its sole determination of the value or likelihood of collection of eligible accounts receivables owed to the Company and considerations regarding inventory. The credit facility is payable monthly in arrears on the average unpaid balance of the line of credit at an interest rate equal to a per annum reference rate (3.25% and 3.75%) at July 31, 2015 and October 31, 2014, respectively. On July 22, 2010, the credit facility was increased to $7,000,000. In addition, OPTCO was added as a co-borrower and the inventory sublimit was raised from $1,000,000 to $2,000,000. Subsequent to July 31, 2010, $1,800,000 of the credit facility was allocated to OPTCO. On February 3, 2011, the Company amended their credit facility regarding the creation of a sublimit within the revolving line of credit in the form of a $300,000 term loan for the benefit of GCC. The Company provided a corporate guarantee to Sterling in connection with the amendment. The initial term of the credit facility was for three years and expired on February 17, 2012. The initial terms of the credit facility provided that the credit facility may be automatically extended for successive periods of one year each unless one party shall have provided the other party with a written notice of termination at least ninety days prior to the expiration of the then current term. Prior to the expiration of the initial term, and effective as of February 12, 2012, the term was extended until February 17, 2014 and the interest rate was reduced to the Wall Street Journal Prime rate (which is currently 3.25%) plus one percent (1%). On May 10, 2013, the credit facility was extended until February 17, 2015. On March 10, 2015, the Company entered into a loan modification agreement (the Modification Agreement) with Sterling. Pursuant to the Modification Agreement, the credit facility was modified to, among other things, (i) extend the term of the financing agreement until February 28, 2017; (ii) increase the maximum amount of the credit facility from $7,000,000 to $9,000,000; (iii) reduce the interest rate on the average unpaid balance of the line of credit from an interest rate equal to a per annum reference rate of 3.75% to an interest rate per annum equal to the Wall Street Journal Prime Rate (currently 3.25%); and (iv) require the Company to pay, upon the occurrence of certain termination events, a prepayment premium of .50% of the maximum amount of the credit facility in effect as of the date of the termination event. The credit facility contains covenants that place annual restrictions on the Companys operations, including covenants relating to debt restrictions, capital expenditures, minimum deposit restrictions, tangible net worth, net profit, leverage, employee loan restrictions, distribution restrictions (common stock and preferred stock), dividend restrictions, and restrictions on intercompany transactions. The credit facility also requires that the Company maintain a minimum working capital at all times. The Company was in compliance with all required financial covenants at July 31, 2015 and October 31, 2014. As of July 31, 2015 and October 31, 2014, the outstanding balance under the bank line of credit was $3,031,458 and $2,498,458, respectively. Also on March 10, 2015, the Company, as guarantor, and OPTCO (the Borrower), as borrower, entered into a new loan facility agreement with Sterling. The new loan facility is a revolving line of credit for a maximum of $3,000,000 (the New Loan Facility). The New Loan Facility terminates on February 28, 2017. The Borrower is able to draw on the New Loan Facility at an amount up to 85% of eligible accounts receivable, not to exceed 25% of all accounts of the Borrower. The New Loan Facility is payable monthly in arrears on the average unpaid balance of the line of credit at an interest rate per annum equal to the Wall Street Journal Prime Rate (currently 3.25%). The New Loan Facility is secured by all tangible and intangible assets of the Company. In connection with the New Loan Facility, the Company entered into a security agreement with Sterling and provided Sterling with a guarantee of the Borrowers obligations. As of July 31, 2015, the outstanding balance under the New Loan Facility was $1,237,000. |
9. EARNINGS PER SHARE
9. EARNINGS PER SHARE | 9 Months Ended |
Jul. 31, 2015 | |
Earnings Per Share [Abstract] | |
9. EARNINGS PER SHARE | The Company presents basic and diluted earnings per common share pursuant to the provisions included in the authoritative guidance issued by FASB, Earnings per Share, and certain other financial accounting pronouncements. Basic earnings per common share were computed by dividing net income by the sum of the weighted-average number of common shares outstanding. Diluted earnings per common share is computed by dividing the net income by the weighted-average number of common shares outstanding plus the dilutive effect of common shares issuable upon exercise of potential sources of dilution. The weighted average common shares outstanding used in the computation of basic and diluted earnings per share were 6,215,894 for the three and nine months ended July 31, 2015. The weighted average common shares outstanding used in the computation of basic earnings per share were 6,344,487 and 6,362,933 for the three and nine months ended July 31, 2014. The weighted average common shares outstanding used in the computation of diluted earnings per share were 6,611,487 and 6,629,933 for the three and nine months ended July 31, 2014. In September 2011, the Company issued units to certain purchasers which contained warrants to purchase, in the aggregate, 267,000 shares of the Companys common stock, all of which warrants are currently exercisable. The 267,000 shares of common stock underlying the warrants have been included in the diluted earnings per share calculation for the three and nine months ended July 31, 2014 because of their anti-dilutive impact. |
10. ECONOMIC DEPENDENCY
10. ECONOMIC DEPENDENCY | 9 Months Ended |
Jul. 31, 2015 | |
Risks and Uncertainties [Abstract] | |
10. ECONOMIC DEPENDENCY | Approximately 57% of the Companys sales were derived from one customer during the nine months ended July 31, 2015. This customer also accounted for approximately $5,400,000 of the Companys accounts receivable balance at July 31, 2015. Approximately 52% of the Companys sales were derived from one customer during the nine months ended July 31, 2014. This customer also accounted for approximately $7,900,000 of the Companys accounts receivable balance at July 31, 2014. Concentration of credit risk with respect to other trade receivables is limited due to the short payment terms generally extended by the Company, by ongoing credit evaluations of customers, and by maintaining an allowance for doubtful accounts that management believes will adequately provide for credit losses. For the nine months ended July 31, 2015, approximately 64% of the Companys purchases were from four vendors. These vendors accounted for approximately $2,961,000 of the Companys accounts payable at July 31, 2015. For the nine months ended July 31, 2014, approximately 62% of the Companys purchases were from four vendors. These vendors accounted for approximately $2,844,000 of the Companys accounts payable at July 31, 2014. Management does not believe the loss of any one vendor would have a material adverse effect of the Companys operations due to the availability of many alternate suppliers. Approximately 48% of the Companys sales were derived from one customer during the three months ended July 31, 2015. Approximately 52% of the Companys sales were derived from one customer during the three months ended July 31, 2014. For the three months ended July 31, 2015, approximately 60% of the Companys purchases were from four vendors. For the three months ended July 31, 2014, approximately 58% of the Companys purchases were from three vendors. Management does not believe the loss of any one vendor would have a material adverse effect on the Companys operations due to the availability of many alternate suppliers. |
11. RELATED PARTY TRANSACTIONS
11. RELATED PARTY TRANSACTIONS | 9 Months Ended |
Jul. 31, 2015 | |
Related Party Transactions [Abstract] | |
11. RELATED PARTY TRANSACTIONS | The Company has engaged its 40% partner in GCC as an outside contractor (the Partner). Included in contract labor expense are expenses incurred by the Partner during the three and nine months ended July 31, 2015 of $97,694 and $313,729, respectively, for the processing of finished goods. An employee of one of the top four vendors is a director of the Company. Purchases from that vendor totaled approximately $17,900,000 and $3,000,000 for the nine and three months ended July 31, 2015 and $13,200,000 and $4,100,000 for the nine and three months ended July 31, 2014. The corresponding accounts payable balance to this vendor was approximately $608,000 and $387,000 at July 31, 2015 and 2014, respectively. In January 2005, the Company established the Coffee Holding Co., Inc. Non-Qualified Deferred Compensation Plan. Currently, there is only one participant in the plan: Andrew Gordon, the Companys Chief Executive Officer. Within the plan guidelines, this employee is deferring a portion of his current salary and bonus. The assets are held in a separate trust. The deferred compensation payable represents the liability due to an officer of the Company. The assets are included in the Deposits and other assets in the accompanying balance sheets. The deferred compensation asset and liability at July 31, 2015 and October 31, 2014 were $477,478 and $515,549, respectively. |
12. STOCKHOLDERS' EQUITY
12. STOCKHOLDERS' EQUITY | 9 Months Ended |
Jul. 31, 2015 | |
Equity [Abstract] | |
12. STOCKHOLDERS' EQUITY | a. Treasury Stock b. Share Repurchase Program. |
13. SUBSEQUENT EVENTS
13. SUBSEQUENT EVENTS | 9 Months Ended |
Jul. 31, 2015 | |
Subsequent Events [Abstract] | |
13. SUBSEQUENT EVENTS | The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required further adjustment or disclosure in the condensed consolidated financial statements. |
5. ACCOUNTS RECEIVABLE (Tables)
5. ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Accounts Receivable Tables | |
Schedule of Accounts Receivable | July 31, October 31, 2015 2014 Allowance for doubtful accounts $ 65,000 $ 65,000 Reserve for other allowances 35,000 35,000 Reserve for sales discounts 44,000 44,000 Totals $ 144,000 $ 144,000 |
6. INVENTORIES (Tables)
6. INVENTORIES (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | July 31, 2015 October 31, 2014 Packed coffee $ 1,517,604 $ 1,578,248 Green coffee 10,172,904 12,987,257 Packaging supplies 753,809 644,648 Totals $ 12,444,317 $ 15,210,153 |
7. COMMODITIES HELD BY BROKER (
7. COMMODITIES HELD BY BROKER (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Commodities Held By Broker Tables | |
Schedule of Commodities held by Broker | July 31, 2015 October 31, 2014 Option Contracts 19,399 (217,624 ) Future Contracts (496,060 ) (267,300 ) Total Commodities (476,661 ) (484,924 ) |
Schedule of realized and unrealized gains and losses | Three Months Ended July 31, 2015 2014 Gross realized gains $ 293,439 $ 1,165,014 Gross realized losses (175,280 ) (824,285 ) Unrealized losses (481,433 ) 38,437 Total $ (363,274 ) $ 379,166 Nine Months Ended July 31, 2015 2014 Gross realized gains $ 991,706 $ 3,321,023 Gross realized losses (6,415,825 ) (1,796,474 ) Unrealized gains 8,263 1,211,540 Total $ (5,415,856 ) $ 2,736,089 |
4. PREPAID GREEN COFFEE (Detail
4. PREPAID GREEN COFFEE (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | Oct. 31, 2014 | |
Prepaid Green Coffee Details Narrative | |||||
Interest income | $ 13,074 | $ 12,769 | $ 26,302 | $ 32,064 | |
Prepaid green coffee | $ 1,014,911 | $ 1,014,911 | $ 467,155 |
5. ACCOUNTS RECEIVABLE (Details
5. ACCOUNTS RECEIVABLE (Details) - USD ($) | Jul. 31, 2015 | Oct. 31, 2014 |
Accounts Receivable Details | ||
Allowance for doubtful accounts | $ 65,000 | $ 65,000 |
Reserve for other allowances | 35,000 | 35,000 |
Reserve for sales discounts | 44,000 | 44,000 |
Totals | $ 144,000 | $ 144,000 |
6. INVENTORIES (Details)
6. INVENTORIES (Details) - USD ($) | Jul. 31, 2015 | Oct. 31, 2014 |
Packaging supplies | $ 753,809 | $ 644,648 |
Totals | 12,444,317 | 15,210,153 |
Packed Coffee | ||
Totals | 1,517,604 | 1,578,248 |
Green Coffee | ||
Totals | $ 10,172,904 | $ 12,987,257 |
7. COMMODITIES HELD BY BROKER26
7. COMMODITIES HELD BY BROKER (Details) - USD ($) | Jul. 31, 2015 | Oct. 31, 2014 |
Commodities Held By Broker Details | ||
Option Contracts | $ 19,399 | $ (217,624) |
Future Contracts | (496,060) | (267,300) |
Total Commodities | $ (476,661) | $ (484,924) |
7. COMMODITIES HELD BY BROKER27
7. COMMODITIES HELD BY BROKER (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Commodities Held By Broker Details 1 | ||||
Gross realized gains | $ 293,439 | $ 1,165,014 | $ 991,706 | $ 3,321,023 |
Gross realized losses | (175,280) | (824,285) | (6,415,825) | (1,796,474) |
Unrealized (loss) gains | (481,433) | 38,437 | 8,263 | 1,211,540 |
Total | $ (363,274) | $ 379,166 | $ (5,415,856) | $ 2,736,089 |
8. LINE OF CREDIT (Details Narr
8. LINE OF CREDIT (Details Narrative) - USD ($) | Jul. 31, 2015 | Oct. 31, 2014 |
Line Of Credit Details Narrative | ||
Bank line of credit | $ 3,031,458 | $ 2,498,458 |
11. RELATED PARTY TRANSACTIONS
11. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | Oct. 31, 2014 | |
Related Party Transactions Details Narrative | |||||
Contract labor expense from partner | $ 97,694 | $ 313,729 | |||
Purchases from top vendor | 3,000,000 | $ 4,100,000 | 17,900,000 | $ 13,200,000 | |
Top vendor accounts payable | 608,000 | $ 387,000 | 608,000 | $ 387,000 | |
Deferred compensation asset and liability | $ 477,478 | $ 477,478 | $ 515,549 |
Uncategorized Items - jva-20150
Label | Element | Value |
Net (loss) income | us-gaap_IncomeLossFromContinuingOperationsIncludingPortionAttributableToNoncontrollingInterest | $ 138,751 |
Net (loss) income | us-gaap_IncomeLossFromContinuingOperationsIncludingPortionAttributableToNoncontrollingInterest | $ 783,374 |