Coffee Holding Resumes Annual Dividend Payment of 33% of Net Earnings

Coffee Holding will resume its annual dividend of 33% of net earnings after a long hiatus. CEO Andrew Gordon believes the year-end results will show improved free cash flow and working capital. The company is confident in its financial performance and is now offering shareholders a dividend.

Coffee Holding Co., Inc. (NASDAQ: JVA), a leading integrated wholesale coffee roaster and dealer, has announced the resumption of its annual dividend after a long hiatus. The company, based in Staten Island, New York, has been navigating a challenging market environment but has demonstrated resilience and strategic foresight. CEO Andrew Gordon expressed confidence in the company's financial performance, which has been reflected in improved free cash flow and working capital.

The decision to resume the dividend comes after a period of uncertainty, including record-high Arabica coffee prices in February and potential tariff concerns in April. Coffee Holding Co. strategically managed these challenges by increasing inventory positions during market selloffs, securing lower-cost inventory, and maintaining a competitive edge. The company's gross margin and profitability have been positively impacted by these strategic moves.

The acquisition of Empire Coffee Company has also shown promising progress. The company cut its losses by half from the first quarter and increased sales to the level that Empire was at prior to its decline. Management expects this business to become accretive to earnings by the end of the next quarter, much sooner than initially anticipated.

Coffee Holding Co.'s strong Q2 FY2025 results, which include earnings of $0.11 per share and 22% revenue growth, demonstrate a remarkable turnaround. The company maintained a 19% gross margin despite losing money on its largest wholesale supermarket customer due to prior contractual obligations at lower coffee prices. The resumption of the annual dividend at 33% of net earnings signals management's confidence in sustainable improved cash flow and working capital position.

The company's product offerings, which include eight proprietary brands and roasting services for major wholesalers and retailers, have remained strong. Coffee Holding Co. continues to supply private label coffee under various labels and offers a broad array of coffee products across different consumer tastes and price points.

As investors and financial professionals, it is essential to keep an eye on Coffee Holding Co.'s progress. The company's strategic management of market volatility, successful acquisition integration, and improved financial performance are all positive indicators. The resumption of the annual dividend is a significant development that adds value to the investment thesis.

References:
[1] https://finance.yahoo.com/news/coffee-holding-co-inc-reports-123500000.html
[2] https://www.stocktitan.net/news/JVA/coffee-holding-co-inc-reports-second-quarter-results-and-new-9g7ji7j4fo2l.html
[3] https://quantisnow.com/company/JVA