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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Farmer Brothers Company | NASDAQ:FARM | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.16 | 5.03% | 3.34 | 3.34 | 3.37 | 3.38 | 3.1813 | 3.20 | 32,166 | 20:31:23 |
November 25, 2019
Dear Fellow Farmer Bros. Co. Stockholders,
“Insanity: doing the same thing over and over again and expecting a different result.”
I am writing you on behalf of a group of concerned Farmer Bros. stockholders. Together we own 4.9% of the Company’s stock. Like you, we are frustrated by the value destruction that is a direct consequence of poor decisions made by our Board and Management over the last three years. Customers are confused, employees are disheartened, and our company is at a critical inflection point. In its recent communications to you, the Company tried to hide their failures and ask for more time to get their multi-year “turnaround” off the ground – time, we believe, they should not be afforded without better, more experienced stewards elected to the Board.
This is why we are asking for your support in electing Thomas Mortensen and Jonathan Waite to the Board. Tom and Jonathan are directly aligned with your interests in seeing Farmer Bros.’s success, have crucial on the ground experience and can effectively oversee and support our new CEO as he executes a turn-around plan.
We are asking you to elect our two director nominees and remove two of the principal architects of the Company’s failures, Directors Charles Mottern and Chris Marcy.
It is particularly revealing how the Company has attempted to gloss over decisions that were made by, and indeed implemented at the behest of Mr. Mottern and Mr. Marcy that have led to disastrous results for us shareholders. The recent “plan” put forward by the Company mirrors many of the priorities we have been advocating for as a shareholder and that I personally pushed for as a director of the Company. What’s missing today is proper oversight of and support for management by a Board of Directors intimately familiar with Farmer Bros.’s operations, customers and employees. Without this, we fear that the future will be no different than the recent past: a continued effort to cover up the issues of the past and not focus on the decisions and details required to ensure success. The success of Farmer Bros. now depends on execution, quarter by quarter, which we are confident is possible if our nominees are elected to the Board, given their past contributions during their time at Farmer Bros.
Shareholders should take note of conclusions recently made by Institutional Shareholders Services, a leading proxy advisory firm, in its report on the election contest:
We can tell you that Directors Mottern and Marcy were central actors in the Company’s failures, principally in supporting a failing CEO, implementing programs and directing management over decisions for which they had no experience and displayed purely self-interested motivations as the performance of the company crumbled.
In the last three years Mottern and Marcy bear significant responsibility for the state of Farmer Bros. and the general deterioration experienced since 2016, because they:
Since 2016, better management and Board leadership at Farmer Bros. would have taken greater advantage of the Company's market opportunities, produced far better operating results and unlocked more shareholder value, but the Board had no plan… for succession, talent development, strategy, or execution… that was tangible, measurable, and analyzable. BUT NOW THEY SAY THEY HAVE A PLAN … AGAIN.
What’s changed since 2016?
In 2016, the Company claimed that it was successfully implementing initiatives toward positive growth- with very high expectations. By 2019, most have proven to be major mistakes and failing operating performance: poor leadership, poor management, problems with supply chain and operations, terrible capital allocation discipline, and declining customer relationships and employee value.
As an example, in 2016 the Company stated that it expected a savings of $18M-20M annually from the new Texas headquarters and annual savings of $3M of 3PL savings to date, with neither of these expected saving ever realized (and the prior CFO even declared that the numbers made no sense).
As another example, during the last three years, the optimization of the supply chain continued with no defined direction or results and no quantified optimization attained:
Mr. Mottern re-organized direct-store-delivery (DSD), evidently without awareness of previous failed re-organization attempts, especially the massive failure of 2009-2010:
The same is true with Mr. Marcy’s attempt to redefine marketing strategies, differentiate the portfolio and make acquisitions for the sole reason to improve financials by buying revenue through acquisitions.
Why would shareholders give Mottern and Marcy another chance when, under their Board leadership, the result could be the same – failure!
Our nominees are committed to helping this Board, Management and company succeed – for the benefit of each shareholder.
Tom Mortensen and Jonathan Waite have helped turn Farmer Bros. around before. And they are prepared to help do it again. They listen to those who do the work, they have deep knowledge of the Company’s past successes and failures. They have a different perspective than the rest of the Board because they have also done the work and know first-hand about the operations of the Company.
Tom and Jonathan know how to optimize the supply chain and how to continue further optimization when appropriate. They know how to improve equipment placement and service to satisfy customers. They know how to differentiate the portfolio to meet the needs of customers and to innovate the portfolio when customers desire that innovation. And most of all, they already value the strong culture that Farmer Bros. had and know when changes need to be made.
Importantly, they already have a deep appreciation for the talented and experienced employees that have made the Company great in the past and are ready to do so for the present. Simply, they are the most qualified and experienced to help Farmer Bros. succeed.
We urge you to elect Tom Mortensen and Jonathan Waite. Once elected, they will work with the Board and new CEO Deverl Maserang to begin the process of returning Farmer Bros. to the values and principles upon which it was built.
VOTE FOR OUR EXPERIENCED DIRECTORS TO TURN-AROUND FARMER BROS. AND CREATE VALUE
We urge you to vote using only your GOLD PROXY today.
Your support is extremely important. If you have any questions, please call our proxy solicitor Okapi Partners toll-free at (877) 274-8654 or email info@okapipartners.com.
Please wait until you receive and review the Concerned Stockholders’ proxy materials and GOLD proxy card before you cast your vote in connection with the Annual Meeting.
Sincerely, Jeanne Farmer Grossman
IMPORTANT
If your shares are held in street name, your bank or broker can vote your shares only upon receipt of your specific instructions. Please contact the person responsible for your account and instruct them that you only wish to vote the GOLD proxy card.
If you have any questions or need further assistance, please contact Okapi Partners at (877) 274-8654 or by e-mail at info@okapipartners.com.
INVESTOR CONTACT:Okapi Partners LLC1212 Avenue of the Americas, 24th FloorNew York, NY 10036+1 877-796-5274info@okapipartners.com
MEDIA CONTACT:Dan Gagnier / Jeffrey Mathews Gagnier Communications +1 646-569-5897 farmerbros@gagnierfc.com
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
The Concerned Stockholders have filed a definitive proxy statement and an accompanying GOLD proxy card with the Securities and Exchange Commission (the “SEC”) to be used to solicit votes for the election of its nominees at the 2019 Annual Meeting of Stockholders of Farmer Bros. Co.
THE CONCERNED STOCKHOLDERS STRONGLY ADVISE ALL STOCKHOLDERS OF THE COMPANY TO READ THEIR PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC’S WEB SITE AT WWW.SEC.GOV. IN ADDITION, THE CONCERNED STOCKHOLDERS WILL PROVIDE COPIES OF THEIR PROXY STATEMENT WITHOUT CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE CONCERNED STOCKHOLDERS’ PROXY SOLICITOR, OKAPI PARTNERS, AT ITS TOLL-FREE NUMBER: (877) 274-8654 OR AT INFO@OKAPIPARTNERS.COM.
The participants in the proxy solicitation are: Jeanne Farmer Grossman, the Jeanne Grossman Living Trust, the 1964 Jeanne Ann Farmer Grossman Trust, the 1969 Jeanne Ann Farmer Grossman Trust, the 1972 Jeanne Ann Farmer Grossman Trust, the 1987 Roy F Farmer Trust II, the 1988 Roy F Farmer Trust II, the 1988 Roy F Farmer Trust III, the 1990 Brynn Elizabeth Grossman Trust, and the 1992 Brynn Elizabeth Grossman Trust, Thomas William Mortensen, and Jonathan Michael Waite.
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