Coffee Holding Co (NASDAQ:JVA)

STATEN ISLAND, N.Y., Sept. 27, 2011 (GLOBE NEWSWIRE) -- Coffee Holding Co., Inc. ("Coffee Holding" or the "Company") (Nasdaq:JVA) today announced that it entered into a subscription agreement (the "Subscription Agreement") with certain institutional investors. Pursuant to the Subscription Agreement, the Company will sell up to 890,000 units, each consisting of one share of the Company's common stock and three-tenths of a warrant to purchase one share of common stock for a purchase price of $10.40 per unit (the "Offering"). The warrants will be exercisable beginning six months and one day after closing, will expire five years after becoming exercisable and will have an exercise price of $13.59 per share. Net proceeds of the Offering, after deducting placement agent fees and other estimated offering expenses payable by the Company are expected to be approximately $8.3 million. In addition, pursuant to the Subscription Agreement, a limited liability company of which Andrew Gordon (our President, Chief Executive Officer, Chief Financial Officer and Treasurer) is the sole owner and David Gordon (our Executive Vice President of Operation and Secretary), will sell up to 200,000 shares of common stock at a price of 9.92 per share (the "Selling Stockholder Offering"). In connection with the offerings, the Company and the selling stockholders entered into a placement agency agreement with Roth Capital Partners and Maxim Group LLC.

We may from time to time offer and sell common stock, preferred stock, debt securities, warrants and units, having an aggregate offering price of up to $100,000,000. We may offer and sell these securities separately or together in any combination. In addition, certain stockholders, including our executive officers, may offer and resell, from time to time, up to 1,000,000 shares of our common stock. We and the selling stockholders may offer and sell these securities to or through underwriters, directly to investors or through agents. We will specify the terms of the securities, the names of the selling stockholders and the names of any underwriters or agents and their respective compensation, in supplements to this prospectus. We will not receive any of the proceeds from the sale of our common stock by the selling stockholders. For full details see S-3 form.

We would like to reiterate our alert concerning JVA.  Please see our analysis.

Intro:

On July 15, 2011 we stated that we established a short position in shares of Coffee Holdings (JVA) at $22.30.

In response to the wild ride in the share price of JVA over the last four months (up 650% from trough to peak), the GeoTeam decided to take a closer look. After careful research, we have concluded that the company is dangerously overvalued at current prices. The stock appears to have rallied as a result of what we suspect were unnoticed and consider to be non-operating items in its fiscal 2011 quarterly earnings reports.  These items may have created the appearance of strong earnings growth when in fact it seems apparent that core earnings are decaying. The following summarizes our observations...

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Please see message board post on JVA. It appears that earnings quality may not be as high as investors had first assumed.

STATEN ISLAND, N.Y., June 9, 2011 (GLOBE NEWSWIRE) -- Coffee Holding Co., Inc. today announced its operating results for the three and six months ended April 30, 2011. In this release, the Company:

• Reports net sales $62,973,110 for the six months ended April 30, 2011 and $37,332,017 for the three months ended April 30, 2011 compared to net sales of $41,276,459 for the six months ended April 30, 2010 and $19,917,308 for the three months ended April 30, 2010; 
• Reports sales growth of 87% for the three months ended April 30, 2011 compared to 11.4% for the three months ended April 30, 2010; and 
• Reports net income of $1,187,957, or $0.22 per share (basic and diluted) for the three months ended April 30, 2011 compared to net income of $800,448, or $0.15 per share (basic and diluted) for the three months ended April 30, 2010.

"We are pleased to report another strong quarter to our shareholders.   Our revenue growth continues to drive our bottom line as our business has been strong in all areas during this period. Our price increases helped us keep pace with the rising price of green coffee, improving our margins on both our private label and branded businesses. 

Quarterly Results for Period Ending January 31st, 2011:

• 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.

"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.