Executive Summary

Net sales rose 24.8% year over year to $17.01M, while the company swung to positive net income of $0.13M ($0.02 EPS) versus a loss in Q3 2021; sequentially, net sales improved vs Q2 and EPS turned positive from $(0.06) .
Gross margin compressed to 18.5% from 21.5% YoY due to higher green coffee, packaging and freight costs; management cited approximately $500,000 freight headwinds (~$0.10/share) as a key profit drag .
Operating expenses fell $0.33M YoY to $2.91M, supporting a return to operating income ($0.24M) despite cost inflation .
No formal guidance or earnings call transcript was available; near‑term narrative hinges on ongoing logistics normalization and continued growth with legacy customers and proprietary brands .

What Went Well and What Went Wrong

Revenue growth accelerated: net sales +24.8% YoY on increased sales to legacy customers and “several significant new customers”; branded Latin espressos (Café Caribe, Café Supremo) highlighted as growth drivers .
Cost discipline: total operating expenses declined $0.33M YoY to $2.91M, enabling a return to operating income of $0.24M .
Strategic focus: “remaining focused on our core legacy business… rather than relying on acquisitions and/or joint ventures” to drive revenues, per CEO Andrew Gordon .

Margin pressure: gross margin fell to 18.5% vs 21.5% last year as higher green coffee, packaging, and freight offset sales growth .
Logistics inflation: CEO flagged ~~$500,000 freight cost increase (~~$0.10/share) this quarter, expected to weigh on near‑term profitability until supply chain/diesel prices ease .
Subsidiary weakness: Generations/Steep & Brew sales decreased roughly $5.5M over the first nine months vs 2021; earlier quarters included receivable and inventory write‑offs and losses at the subsidiary, pressuring results .

Metric	Q1 2022	Q2 2022	Q3 2022
Net Sales ($USD)	$16,704,860	$16,498,169	$17,013,286
Gross Profit ($USD)	$4,271,608	$1,992,754	$3,145,576
Gross Margin (%)	25.6%	12.1%	18.5%
Operating Expenses ($USD)	$3,720,878	$3,366,223	$2,906,094
Income from Operations ($USD)	$550,730	$(1,373,469)	$239,482
Net Income ($USD)	$280,863	$(368,096)	$132,381
Diluted EPS ($USD)	$0.05	$(0.06)	$0.02

Legacy Coffee Holding (green beans, private label, proprietary brands): sales increased, particularly Latin espresso brands, aided by new customers .
Generations/Steep & Brew: significant sales declines in 2022; prior quarter losses and write‑downs pressured profitability .

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Quarter	None provided	None provided	N/A
Gross Margin	FY/Quarter	None provided	None provided; near‑term pressure from logistics/fuel costs	N/A
Operating Expenses	FY/Quarter	None provided	None provided	N/A
Tax Rate	FY/Quarter	None provided	None provided	N/A
Dividend	FY/Quarter	Not guided	No guidance; note a $399,000 dividend payment occurred earlier in 2022 (historical, not guidance)	N/A

No earnings call transcript found for Q3 2022; themes derived from press releases.

Topic	Previous Mentions (Q1 2022)	Previous Mentions (Q2 2022)	Current Period (Q3 2022)	Trend
Supply chain & freight	Inflation raised freight/labor/steel costs; legal expenses elevated	Obsolete inventory write‑off; restructuring at Generations/Steep & Brew	~$500K freight cost increase; headwinds expected near‑term	Cost headwinds persistent
Product/brand performance	Private label/branded stable; green coffee to small roasters softened	Legacy and Optco divisions strong; Generations weak	Branded Latin espressos and new customers drove growth	Mix shifting to proprietary brands
Subsidiary actions	N/A	Restructure Generations/Steep & Brew following losses/write‑offs	Generations/Steep & Brew revenues down significantly YTD	Ongoing restructuring/drag
Legal/regulatory	Class action legal expense ~$213K impacted Q1	N/A	N/A	Improved vs Q1
Strategy focus	N/A	Focus on legacy green/private label/proprietary brands	Emphasis on core legacy business vs acquisitions/JVs	Consistent strategic pivot

“A combination of increased sales of our branded products, most notably our Latin espressos, Café Caribe and Café Supremo, along with sales to new customers were responsible for the increase.” — Andrew Gordon, President & CEO .
“I believe we have found the simple solution to continue to grow revenues by remaining focused on our core legacy business… rather than relying on acquisitions and/or joint ventures.” .
“Our freight factors increased by approximately $500,000, or approximately $0.10 a share, during this third quarter of 2022… expected to continue to weigh our profitability… until supply chain issues mitigate and diesel fuel levels show a meaningful decline.” .
Prior quarter context: “We recorded a loss… primarily as a result of an operating loss at our Generations/Steep N Brew division… write offs relating to accounts receivables, inventory and packaging materials… approximately $508,000 (net of tax).” .
Q1: “Inflationary headwinds had a negative effect… freight, labor and the cost of steel prevented additional margin expansion… higher legal expenses of approximately $213,000…” .

No Q3 2022 earnings call transcript or Q&A available [ListDocuments: earnings-call-transcript search returned none].

Wall Street consensus (S&P Global) for Q3 2022 EPS and revenue was unavailable; comparison to estimates cannot be provided. If available, future analysis should benchmark the $17.01M revenue and $0.02 EPS against consensus to assess beat/miss [GetEstimates error].

Revenue momentum is intact with accelerated YoY growth and sequential improvement; EPS turned positive versus Q2, indicating operational stabilization despite inflationary pressures .
Margin compression remains the primary risk; freight and broader input inflation materially impacted gross margin and diluted profitability (~$0.10/share headwind) .
Strategic pivot toward legacy channels and proprietary brands is working; sustained demand from large wholesalers/retailers and branded Latin espressos supports top‑line .
Generations/Steep & Brew remains a drag; restructuring and normalization of write‑offs are crucial to improving consolidated margins and earnings trajectory .
Lack of formal guidance and no call limits visibility; watch for subsequent disclosures on logistics costs and subsidiary progress to refine near‑term EPS expectations .
Tactical setup: monitor fuel/diesel trends and freight rates as catalysts for margin recovery; continued customer additions could offset remaining subsidiary weakness .
Capital allocation: earlier dividend payment underscores return of capital but is not guided; liquidity and line of credit usage should be watched amid cost volatility .