Coffee Holding Co., Inc. Announces the Purchase of its Colorado Roasting Facility from the City of La Junta, Colorado.

Rhea-AI Summary

Coffee Holding Company (Nasdaq: JVA) has announced the purchase of its 50,000 sq. ft. roasting facility in La Junta, Colorado, for $900,000, significantly below its appraised value. This acquisition is expected to enhance operational efficiency and save the company over $100,000 annually by eliminating rent payments. Furthermore, the company anticipates annualized cost savings of around $2.0 million post-consolidation and an expansion of its operations. The acquisition supports Coffee Holding's goal to improve its financial standing and operational effectiveness.

Positive

• Acquisition of roasting facility for $900,000, below appraised value.
• Annual savings of over $100,000 from eliminated rent.
• Expected annualized cost savings of approximately $2.0 million post-consolidation.
• Improved operational efficiency through facility expansion.

Negative

• Increased freight costs anticipated for shipping to the East Coast.

STATEN ISLAND, New York, June 30, 2021 (GLOBE NEWSWIRE) -- Coffee Holding Company (Nasdaq: JVA) (the “Company” or “Coffee Holding Company”) announced the purchase of the building and surrounding property in La Junta, Colorado, which has been the home to its largest roasting operations since 2005.

The purchase price of $900,000 for the 50,000 sq. ft. facility and adjoining 6.278 acres of land was $70,000 below the recent appraised value of the property. “We believe this is a great opportunity to improve the value and operational efficiency of our company,” said Andrew Gordon, President and CEO of Coffee Holding Company. “At a time when the company is basically debt free, to now own our largest and most efficient operating facility, we believe the company will greatly benefit in the near and long term in several ways. First, by eliminating our monthly rental to the city, we will save over $100,000 annually, or $0.02 cents per share. We will also recognize the depreciation on our balance sheet for this asset. More importantly, we will now be able to undergo an expansion at the facility which we expect will enable us to conduct our roasting operations more efficiently. The expansion of this facility, which we hope to begin by late calendar 2021, will allow us to consolidate operations here in La Junta, which we believe will eliminate cost dualities and overheads in our other locations. Eventually, we believe the annualized cost savings will be approximately $2.0 million once operations have been fully consolidated in La Junta. We expect the company will experience increased freight costs associated with shipping product back to the east coast, but we anticipate the overall cost savings will vastly outstrip any potential increases,” concluded Mr. Gordon.

About Coffee Holding

Coffee Holding Co., Inc. is a leading integrated wholesale coffee roaster and dealer in the United States and one of the few coffee companies that offers a broad array of coffee products across the entire spectrum of consumer tastes, preferences and price points. Coffee Holding has been a family-operated business for three generations and has remained profitable through varying cycles in the coffee industry and the economy. The Company’s private label and branded coffee products are sold throughout the United States, Canada and abroad to supermarkets, wholesalers, and individually owned and multi-unit retail customers.

Forward looking statements

Any statements that are not historical facts contained in this release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, the expected cost savings from the transaction; expected future depreciation; expectations relating to the Company’s ability to recognize cost savings from the transaction; and expected synergies as a result of the transaction. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. We have based these forward-looking statements upon information available to management as of the date of this release and management’s expectations and projections about certain future events. It is possible that the assumptions made by management for purposes of such statements may not materialize. Such statements may involve risks and uncertainties, including but not limited to those relating to product demand, pricing, market acceptance, hedging activities, the effect of economic conditions, intellectual property rights, the outcome of competitive products, risks in product development, the results of financing efforts, the ability to complete transactions and other factors discussed from time to time in the Company’s Securities and Exchange Commission filings. The Company undertakes no obligation to update or revise any forward-looking statement for events or circumstances after the date on which such statement is made.

Company Contact

Coffee Holding Co., Inc.
Andrew Gordon
President & CEO
718-832-0800

FAQ

What recent acquisition did Coffee Holding Company (JVA) announce?

Coffee Holding Company announced the purchase of its roasting facility in La Junta, Colorado, for $900,000.

How much will Coffee Holding save annually from eliminating rent?

Coffee Holding expects to save over $100,000 annually by eliminating rent payments.

What are the expected cost savings after consolidating operations at the La Junta facility?

The company anticipates annualized cost savings of approximately $2.0 million post-consolidation.

What impact will the new facility have on Coffee Holding's operations?

The new facility will improve operational efficiency and allow for expansion of roasting operations.

What potential drawback is associated with the acquisition of the La Junta facility?

Increased freight costs for shipping products back to the East Coast are anticipated.