Coffee Holding Co., Inc. Announces the Purchase of Assets of Empire Coffee Company

Rhea-AI Summary

Coffee Holding Co. (NASDAQ: JVA) has acquired all assets of Empire Coffee Company for $800,000 through its newly created subsidiary, Second Empire. The purchase includes Empire's inventory, equipment, accounts receivable, customer list, and intellectual property. The transaction was completed on November 7, 2024, along with a new lease agreement for Empire's property.

The acquisition provides Coffee Holding with a turnkey manufacturing facility at approximately $0.60 on the dollar of the assets' true value. The company aims to improve Empire's performance and restore operations to pre-Covid revenue levels, with direct control over day-to-day operations. Management expects immediate manufacturing cost savings and operational flexibility.

Positive

• Acquired assets at 40% discount to true value ($800,000)
• Immediate access to turnkey manufacturing facility
• Expected manufacturing and operational cost savings
• Potential for additional facility optimization savings
• Access to existing customer base and intellectual property

Negative

• Additional operational costs from new lease agreement
• Integration and turnaround costs to restore pre-Covid performance
• Acquired business currently underperforming due to Covid-19 impact

Insights

Financial Analyst

This strategic asset acquisition at $800,000 represents significant value for Coffee Holding Co., purchasing assets at roughly 60% of their assessed value. The deal includes critical business components: inventory, equipment, accounts receivable, customer lists and intellectual property. The formation of Second Empire as a wholly-owned subsidiary indicates a structured approach to integration and risk management.

The acquisition presents three key advantages:

• Immediate cost synergies through manufacturing optimization
• Direct operational control, unlike their previous Steep/Generations acquisition
• Potential for facility consolidation savings

While Empire's recent performance was impacted by COVID-19, Coffee Holding's existing infrastructure and industry expertise position them well to revitalize operations to pre-pandemic levels. The turnkey nature of the facility allows for rapid integration and immediate revenue generation from existing customers.

Staten Island, NY, Nov. 11, 2024 (GLOBE NEWSWIRE) -- Coffee Holding Co., Inc. (NASDAQ: JVA) (“Coffee Holding”), a publicly traded integrated wholesale coffee roaster and dealer located in the United States announced today that it purchased all of the assets of Empire Coffee Company (“Empire”) based in Port Chester, NY. The purchase was made under Article 9 of the UCC and consists of Empire’s inventory, equipment, accounts receivable, customer list and all intellectual property. To facilitate the purchase, Coffee Holding created a new wholly owned subsidiary named Second Empire. Operations will be conducted by Second Empire. The purchase price of $800,000 was negotiated between Coffee Holding and Empire’s former lender and was paid on November 7, 2024. Coffee Holding also entered into a new lease for Empire’s property on the same day.

“We have known the principals at Empire for over forty years,” said Andrew Gordon, President and CEO of Coffee Holding. “Unfortunately, Empire never fully recovered from the Covid-19 shutdowns and the changes in consumer buying patterns that accompanied these shutdowns. The fact that we were able to complete a transaction allowing us to operate a first-class turnkey manufacturing facility where we are currently servicing some of our customers is a big win for us. We believe the purchase price represents about $0.60 on the dollar for the assets’ true value and we believe given our proven ability as an operator, we can quickly improve upon Empire’s recent performance and ramp up operations and return them to pre-Covid levels of annual revenue. Unlike our past Steep/Generations acquisition, we plan on controlling the day to day decision making and operations of Second Empire to ensure the success of the venture. In addition, we believe the ownership of this entity will result in both manufacturing and other cost savings almost immediately, as well as giving us the flexibility in the near term to explore greater future savings in our other existing facilities,” continued Andrew Gordon.

About Coffee Holding

Founded in 1971, Coffee Holding Co., Inc. (NASDAQ: JVA) 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’s product offerings consist of eight proprietary brands, each targeting a different segment of the consumer coffee market as well as roasting and blending coffees for major wholesalers and retailers throughout the United States who want to have products under their own names to compete with national brands. In addition to selling roasted coffee, Coffee Holding Co., Inc. also imports green coffee beans from around the world which it resells to smaller regional roasters and coffee shops around the United States and Canada.

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, including the Company’s outlook on the revenue growth. 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.

For further information, contact:

Coffee Holding Co., Inc.

Andrew Gordon
President & CEO
(718) 832-0800

FAQ

How much did Coffee Holding Co. (JVA) pay for Empire Coffee Company assets?

Coffee Holding Co. paid $800,000 for Empire Coffee Company's assets on November 7, 2024.

What assets did Coffee Holding (JVA) acquire from Empire Coffee?

JVA acquired Empire's inventory, equipment, accounts receivable, customer list, and all intellectual property.

When did Coffee Holding (JVA) complete the Empire Coffee acquisition?

The acquisition was completed on November 7, 2024.

What subsidiary will operate Empire Coffee's assets for JVA?

Second Empire, a newly created wholly-owned subsidiary of Coffee Holding, will operate the acquired assets.