Coffee Service

COVID-19 hammers Coffee Holding’s 2020 sales and earnings

Logo provided.

February 16, 2021

Coffee Holding Co., a wholesale coffee roaster and dealer, reported its net sales totaled $74.3 million for the fiscal year ended Oct. 31, 2020, a decrease of $12.1 million, or 14%, from $86.4 million for the fiscal year ended Oct. 31, 2019, according to an earnings report. The losses were due to the COVID-19 pandemic which caused many of the company's green coffee customers, who service the restaurant and foodservice industries, as well as the company's customers in the foodservice space, to either close or suspend their business operations during the period resulting in lost revenues.

The company reported a net loss of $94,301 or 2 cents per share basic and diluted, for the fiscal year ended Oct. 31, 2020, compared to a net loss of $94,598, or 2 cents per share basic and diluted for the fiscal year ended Oct. 31, 2019.

The decrease in net income was due to numerous factors which had to be dealt with during the company's fiscal fourth quarter. For the 2020 fiscal year, the company had a loss before its non-controlling interest in its subsidiary of $336,044, versus net income of $264,006 for the 2019 fiscal year.

Shares traded at $5.13 today against a 5-week range of $1.76-$5.72.

The company's consolidated subsidiary, in which it has a 60% interest, had write downs on both inventories and accounts receivable due to COVID-19, including an approximately $85,000 write down of receivables and an approximately $217,000 write down of inventories.

"In a year which most people would choose to forget, we too were not immune to the effects of extended lockdowns and consumer belt tightening due to the pandemic caused by COVID-19," CEO Andrew Gordon said in the press release. "Our sales declined by approximately $12 million, or 14%, as shutdowns closed bars, restaurants and most non-essential retail establishments."

"The second area of our business negatively impacted by the shutdowns was our Steep N Brew subsidiary, which experienced a decline of approximately $4.5 million," Gordon said. "This decline was primarily due to Steep N Brew's largest customer converting its existing relationship from a direct customer buying basis to a brokerage basis. Thus, we were unable to recognize 100% of the revenues, as we have done in the past."

For an update on how the coronavirus pandemic has affected convenience services, click here.