Courtesy Green Coffee Biz, Coffee Holding Co., Inc. (NASDAQ:JVA) Adds Sum Fizz To Its Financial Health

by Tom Carlson | Tuesday, Mar 18, 2014 | 1301 views

Boston, MA, 03/18/2014 – For all the stakeholders of the Coffee Holding Co., Inc. (NASDAQ:JVA) the most recent financial data released by the company promises to add some more kick to their morning dose of caffeine. As per the fourth-quarter results of the firm for FY 2013 that ended on Jan 31, 2013 the JVA registered the net earnings of $1.37 million. It was more just about 40% than the $0.94 million, or 15 cents per basic share and 14 cents per diluted share, for the same period just a year ago.

Quite amazingly even though the net sales of Coffee Holding Co., Inc. (NASDAQ:JVA) witnessed a dip to $27.35 million from $31.32 million a year ago, the company attributes the decline a overall dip in coffee prices as the global prices of Coffee hit a record 7- year- nadir for the same period. The company has been able to keep its head high as it displayed a keen marketing sense to shift focus on green coffee, a fast emerging market, where it recorded a net growth of 13.7% increase in pounds sold terms. On a Year-on-year basis while JVA’s gross profit has floated up to $4.12 million from $3.68 million, the firm has been able to beat down its total operating expenses by 1.3% to $1.87 million from $1.9 million.

These facts are being noticed by even the keen market watchers as well known ratings firm the Street Ratings Team put its shares in “Hold” category. The firm cites Coffee Holding Co., Inc. (NASDAQ:JVA)’s increase in net income and strong financial position with rational debt levels as its strengths that augur well for the company at least in the short term. For example its net income in the fourth quarter of 2013 witnessed a rise of 89.1% (from $0.05 million to $0.09 million) from the corresponding period in 2012. Its debt-to-equity ratio (0.06) is very low and to its quick ratio of 1.73 demonstrates its ability to cover short-term liquidity requirements.

Still the rating agency is a bit uneasy about is dismal gain on equity, inferior profit margins and fragile operating cash flow. A great reason of concern is the hard fact of decline in revenue as it is slightly below the average industry rate of 0.7%. Also the fact that its gross profit margin remains extremely low (6.57%) can hurt the long term financial prospects of the company. The results also so that the net operating cash flow of Coffee Holding Co., Inc. (NASDAQ:JVA) has come down to $2.80 million, down 61.39% when compared with the same quarter of last year, while  the growth rate of the firm is still much lower than what is normal for long term good companies in the industry. So while the fizz in the cup of coffee may hold the company in good esteem for a shorter period, the firm requirements to work on its bottom lines to make it important for long term investors.

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