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Wall Street JournalEN
Based on the provided financial report articles, the title of the article is likely: "Consolidated Balance Sheets and Statements of Operations for the Three and Nine Months Ended January 31, 2025, and the Year Ended January 31, 2024, and the Related Notes
Based on the provided financial report articles, the title of the article is likely: "Consolidated Balance Sheets and Statements of Operations for the Three and Nine Months Ended January 31, 2025, and the Year Ended January 31, 2024, and the Related Notes
The report presents the financial statements of the company for the period from October 31, 2023, to January 31, 2025. The company reported a net income of $X for the period, with revenue of $Y and expenses of $Z. The company’s cash and cash equivalents increased by $X, and its accounts receivable decreased by $Y. The company’s inventory increased by $Z, and its accounts payable decreased by $W. The company’s stockholders’ equity increased by $X, and its non-controlling interest decreased by $Y. The company’s revenue was primarily generated from the sale of green coffee, packaged coffee, and roasters’ parts, with the majority coming from the packaged coffee segment. The company also reported a significant increase in revenue from the Empire Coffee Company acquisition, which was completed on November 6, 2024.
Overview
We are an integrated wholesale coffee roaster and dealer primarily in the United States. We offer a broad array of coffee products across the entire spectrum of consumer tastes, preferences and price points, positioning us well to increase profitability and endure potential coffee price volatility.
Our operations focus on:
- Selling wholesale specialty green coffee
- Roasting, blending, packaging and selling private label coffee
- Roasting, blending, packaging and selling our eight coffee brands
- Selling tabletop coffee roasting equipment
Our financial performance is affected by several factors:
- Level of marketing and pricing competition
- Ability to retain existing and attract new customers
- Hedging policy
- Fluctuations in green coffee prices and selling prices
- Ability to manage inventory and maintain gross margins
Recent Developments
On November 6, 2024, our subsidiary Second Empire entered into a Secured Creditor Sale Agreement to purchase equipment, accounts receivable and inventory of Empire Coffee Company, Inc.
Three Months Ended January 31, 2025 Compared to the Three Months Ended January 31, 2024
| Metric | Q1 2025 | Q1 2024 | Change |
|---|---|---|---|
| Net Sales | $21,305,285 | $19,540,402 | +9% |
| Cost of Sales | $15,573,359 (73.1% of net sales) | $16,060,103 (82.2% of net sales) | -$486,744 |
| Gross Profit | $5,731,926 (26.9% of net sales) | $3,480,299 (17.8% of net sales) | +64.7% |
| Operating Expenses | $4,140,895 | $2,863,388 | +$1,277,507 |
| Other Income (Expense) | $31,683 | $123,550 | -$91,867 |
| Income Taxes | $406,092 | $142,337 | +$263,755 |
| Net Income (Loss) | $1,153,256 ($0.20 per share) | $(351,024) ($0.06 per share) | +$1,504,280 |
The increase in net sales was driven by higher sales of private label and branded products to wholesale and retail customers. Gross margin improved due to favorable green coffee prices and an improved inventory situation. Operating expenses increased primarily due to higher payroll, professional fees, and the Empire Coffee Company acquisition.
Liquidity, Capital Resources and Going Concern
As of January 31, 2025, we had working capital of $22,386,733, up from $21,526,983 as of October 31, 2024. This was mainly due to increases in due from broker, cash, and accounts receivable, offset by an increase in our line of credit.
We have a credit facility with Webster Financial Corp. that was most recently modified in June 2024, extending the maturity to June 2025 and adjusting certain terms. We were not in compliance with financial covenants as of October 2023 but have since received a waiver.
For the three months ended January 31, 2025, operating activities used $401,898 in cash, investing activities used $817,906, and financing activities used $2,200,000. The decrease in operating cash flow was primarily due to the increase in accounts receivable.
We expect to fund our operations for at least the next 12 months using cash from operations and our credit facility. An increase in eligible accounts receivable and inventory would allow us to borrow more under the line of credit.
Conclusion
In summary, we delivered strong financial results in Q1 2025 with increased sales, improved gross margins, and profitability. While we face some liquidity challenges, we believe we are well-positioned to continue growing our business and managing coffee price volatility through our diversified product offerings and strategic initiatives.