fee (US:JVA)2026-01-28 22:00Financial Performance - Net sales for the fiscal year ended October 31, 2025, totaled $96,283,547, an increase of $17,721,249, or 23%, from $78,562,298 for the fiscal year ended October 31, 2024[138]. - Cost of sales for the fiscal year ended October 31, 2025, was $80,868,881, or 84% of net sales, compared to $62,520,529, or 80% of net sales, for the fiscal year ended October 31, 2024[139]. - Gross profit for the fiscal year ended October 31, 2025, was $15,414,666, a decrease of $627,103 from $16,041,769 for the fiscal year ended October 31, 2024, with gross profit as a percentage of net sales decreasing to 16% from 20%[140]. - Operating expenses increased by $184,095 to $13,262,306 for the fiscal year ended October 31, 2025, from $13,078,211 for the fiscal year ended October 31, 2024[141]. - Net income for the fiscal year ended October 31, 2025, was $1,403,439, or $0.25 per share, compared to net income of $2,218,014, or $0.39 per share, for the fiscal year ended October 31, 2024[145]. Cash Flow and Working Capital - Working capital as of October 31, 2025, was $22,633,292, representing a $1,106,309 increase from $21,526,983 as of October 31, 2024[146]. - Operating activities used net cash of $5,018,989 for the fiscal year ended October 31, 2025, compared to net cash provided of $5,431,211 for the fiscal year ended October 31, 2024[152]. - Investing activities used net cash of $1,710,162 for the fiscal year ended October 31, 2025, compared to net cash provided of $2,843,069 for the fiscal year ended October 31, 2024[153]. - Financing activities had net cash used of $6,050,000 for the fiscal year ended October 31, 2025, compared to $9,627,234 for the fiscal year ended October 31, 2024[154]. Hedging and Risk Management - The net result of hedging activities for the fiscal year ended October 31, 2025, resulted in a gain of approximately $1.8 million, compared to a gain of approximately $1.6 million for the fiscal year ended October 31, 2024[139]. - The company utilizes short-term coffee futures and options contracts to hedge against price volatility, but remains exposed to potential losses during significant price declines[44]. Business Strategy and Market Position - The company expects to fund its operations, including liabilities and capital expenditures, through cash provided by operating activities and its credit facility until October 31, 2026[155]. - The company holds trademarks for all eight proprietary coffee brands and an exclusive license for S&W brands in the U.S., emphasizing brand recognition as crucial for success[45]. - The company sells private label and branded coffee to major retail and wholesale customers in the U.S., with contracts that may include minimum and maximum purchase obligations[46][47]. - The company conducts in-store promotions and marketing through trade shows, publications, and its website to capture changing consumer preferences[48][49]. - The company aims to grow by introducing new brand names and products across multiple price points, including specialty blends and peripheral products[50]. - The coffee market is highly competitive, with the company positioning itself as a value-added supplier to small specialty gourmet coffee roasters[51]. - The main competitor in private label sales is Massimo Zanetti Beverage Company, which has greater resources, but the company focuses on quality and customer service to remain competitive[52]. - The branded coffee market is dominated by Kraft Foods and J.M. Smucker Co., but the company's brands have a strong regional presence and cater to specific demographics[53]. Compliance and Regulations - The company is in compliance with all material laws and regulations related to its operations, which include obtaining necessary licenses and permits[54][55].