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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 | |
---|---|---|---|---|---|---|---|---|---|---|
-0.08 | -2.54% | 3.07 | 3.07 | 3.29 | 3.20 | 3.09 | 3.13 | 59,394 | 22:46:07 |
þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Large accelerated filer
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¨
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Accelerated filer
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ý
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
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Exchange Act.
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¨
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Page
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September 30, 2019
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June 30, 2019
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||||
ASSETS
|
|
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|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
7,425
|
|
|
$
|
6,983
|
|
Accounts receivable, net
|
57,465
|
|
|
55,155
|
|
||
Inventories
|
91,730
|
|
|
87,910
|
|
||
Income tax receivable
|
1,741
|
|
|
1,191
|
|
||
Short-term derivative assets
|
317
|
|
|
1,865
|
|
||
Prepaid expenses
|
7,500
|
|
|
6,804
|
|
||
Assets held for sale
|
1,718
|
|
|
—
|
|
||
Total current assets
|
167,896
|
|
|
159,908
|
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||
Property, plant and equipment, net
|
181,154
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|
189,458
|
|
||
Goodwill
|
36,224
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|
36,224
|
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||
Intangible assets, net
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28,275
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|
28,878
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Other assets
|
9,485
|
|
|
9,468
|
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||
Long-term derivatives assets
|
215
|
|
|
674
|
|
||
Right-of-use operating lease assets
|
16,349
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|
|
—
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|
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Total assets
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$
|
439,598
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|
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$
|
424,610
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|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
71,800
|
|
|
72,771
|
|
||
Accrued payroll expenses
|
16,109
|
|
|
14,518
|
|
||
Operating leases liabilities - current
|
4,332
|
|
|
—
|
|
||
Short-term derivative liabilities
|
3,461
|
|
|
1,474
|
|
||
Other current liabilities
|
7,024
|
|
|
7,309
|
|
||
Total current liabilities
|
102,726
|
|
|
96,072
|
|
||
Long-term borrowings under revolving credit facility
|
85,000
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|
|
92,000
|
|
||
Accrued pension liabilities
|
46,290
|
|
|
47,216
|
|
||
Accrued postretirement benefits
|
22,751
|
|
|
23,024
|
|
||
Accrued workers’ compensation liabilities
|
4,747
|
|
|
4,747
|
|
||
Operating lease liabilities - noncurrent
|
12,084
|
|
|
—
|
|
||
Other long-term liabilities
|
4,431
|
|
|
4,057
|
|
||
Total liabilities
|
$
|
278,029
|
|
|
$
|
267,116
|
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Commitments and contingencies
|
|
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||||
Stockholders’ equity:
|
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Preferred stock, $1.00 par value, 500,000 shares authorized; Series A Convertible Participating Cumulative Perpetual Preferred Stock, 21,000 shares authorized; 14,700 shares issued and outstanding as of September 30, 2019 and June 30, 2019; liquidation preference of $15,761 and $15,624 as of September 30, 2019 and June 30, 2019, respectively
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15
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15
|
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Common stock, $1.00 par value, 25,000,000 shares authorized; 17,095,198 and 17,042,132 shares issued and outstanding as of September 30, 2019 and June 30, 2019, respectively
|
17,095
|
|
|
17,042
|
|
||
Additional paid-in capital
|
58,718
|
|
|
57,912
|
|
||
Retained earnings
|
150,694
|
|
|
146,177
|
|
||
Accumulated other comprehensive loss
|
(64,953
|
)
|
|
(63,652
|
)
|
||
Total stockholders’ equity
|
$
|
161,569
|
|
|
$
|
157,494
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|
Total liabilities and stockholders’ equity
|
$
|
439,598
|
|
|
$
|
424,610
|
|
|
Three Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Net sales
|
$
|
138,600
|
|
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$
|
147,440
|
|
Cost of goods sold
|
97,959
|
|
|
99,205
|
|
||
Gross profit
|
40,641
|
|
|
48,235
|
|
||
Selling expenses
|
33,614
|
|
|
37,310
|
|
||
General and administrative expenses
|
12,740
|
|
|
8,617
|
|
||
Restructuring and other transition expenses
|
—
|
|
|
4,467
|
|
||
Net gains from sales of assets
|
(12,605
|
)
|
|
(81
|
)
|
||
Operating expenses
|
33,749
|
|
|
50,313
|
|
||
Income (loss) from operations
|
6,892
|
|
|
(2,078
|
)
|
||
Other (expense) income:
|
|
|
|
||||
Interest expense
|
(2,548
|
)
|
|
(2,852
|
)
|
||
Other, net
|
203
|
|
|
657
|
|
||
Total other expense
|
(2,345
|
)
|
|
(2,195
|
)
|
||
Income (loss) before taxes
|
4,547
|
|
|
(4,273
|
)
|
||
Income tax benefit
|
(107
|
)
|
|
(1,287
|
)
|
||
Net income (loss)
|
4,654
|
|
|
(2,986
|
)
|
||
Less: Cumulative preferred dividends, undeclared and unpaid
|
137
|
|
|
132
|
|
||
Net earnings (loss) available to common stockholders
|
$
|
4,517
|
|
|
$
|
(3,118
|
)
|
Net earnings (loss) available to common stockholders per common share—basic
|
$
|
0.26
|
|
|
$
|
(0.18
|
)
|
Net earnings (loss) available to common stockholders per common share—diluted
|
$
|
0.26
|
|
|
$
|
(0.18
|
)
|
Weighted average common shares outstanding—basic
|
17,099,851
|
|
|
16,886,718
|
|
||
Weighted average common shares outstanding—diluted
|
17,518,413
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|
|
16,886,718
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|
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Three Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Net income (loss)
|
$
|
4,654
|
|
|
$
|
(2,986
|
)
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
||||
Unrealized losses on derivative instruments designated as cash flow hedges, net of tax
|
(3,889
|
)
|
|
(6,097
|
)
|
||
Gains (losses) on derivative instruments designated as cash flow hedges reclassified to cost of goods sold, net of tax
|
2,588
|
|
|
1,460
|
|
||
Total comprehensive income (loss), net of tax
|
$
|
3,353
|
|
|
$
|
(7,623
|
)
|
FARMER BROS. CO.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) (In thousands, except share and per share data) |
|||||||||||||||||||||||||||||
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|
|
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|
|
||||||||||||||
|
Preferred Shares
|
|
Preferred Stock Amount
|
|
Common
Shares |
|
Common Stock
Amount |
|
Additional
Paid-in Capital |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total
|
||||||||||||||
Balance at June 30, 2019
|
14,700
|
|
|
$
|
15
|
|
|
17,042,132
|
|
|
$
|
17,042
|
|
|
$
|
57,912
|
|
|
$
|
146,177
|
|
|
$
|
(63,652
|
)
|
|
$
|
157,494
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,654
|
|
|
—
|
|
|
4,654
|
|
||||||
Net reclassification of unrealized losses on cash flow hedges, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,301
|
)
|
|
(1,301
|
)
|
||||||
Pension settlement loss, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Change in the funded status of retiree benefit obligations, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
ESOP compensation expense, including reclassifications
|
—
|
|
|
—
|
|
|
52,534
|
|
|
53
|
|
|
807
|
|
|
—
|
|
|
—
|
|
|
860
|
|
||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Stock option exercises
|
—
|
|
|
—
|
|
|
532
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cumulative preferred dividends, undeclared and unpaid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(137
|
)
|
|
—
|
|
|
(137
|
)
|
||||||
Balance at September 30, 2019
|
14,700
|
|
|
$
|
15
|
|
|
17,095,198
|
|
|
$
|
17,095
|
|
|
$
|
58,718
|
|
|
$
|
150,694
|
|
|
$
|
(64,953
|
)
|
|
$
|
161,569
|
|
FARMER BROS. CO.
CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) (Continued) (In thousands, except share and per share data) |
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Preferred Shares
|
|
Preferred Stock Amount
|
|
Common
Shares |
|
Common Stock
Amount |
|
Additional
Paid-in Capital |
|
Retained
Earnings |
|
Unearned
ESOP Shares |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total
|
||||||||||||||||
Balance at June 30, 2018
|
14,700
|
|
|
$
|
15
|
|
|
16,951,659
|
|
|
$
|
16,952
|
|
|
$
|
55,965
|
|
|
$
|
220,307
|
|
|
$
|
(2,145
|
)
|
|
$
|
(62,039
|
)
|
|
$
|
229,055
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,986
|
)
|
|
—
|
|
|
—
|
|
|
(2,986
|
)
|
|||||||
Net reclassification of unrealized losses on cash flow hedges, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,637
|
)
|
|
(4,637
|
)
|
|||||||
ESOP compensation expense, including reclassifications
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
529
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
529
|
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
433
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
433
|
|
|||||||
Stock option exercises
|
—
|
|
|
—
|
|
|
26,042
|
|
|
26
|
|
|
300
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
326
|
|
|||||||
Cumulative preferred dividends, undeclared and unpaid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(132
|
)
|
|
—
|
|
|
—
|
|
|
(132
|
)
|
|||||||
Balance at September 30, 2018
|
14,700
|
|
|
$
|
15
|
|
|
16,977,701
|
|
|
$
|
16,978
|
|
|
$
|
57,227
|
|
|
$
|
217,189
|
|
|
$
|
(2,145
|
)
|
|
$
|
(66,676
|
)
|
|
$
|
222,588
|
|
FARMER BROS. CO.
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
|||||||
(In thousands)
|
|||||||
|
Three Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
4,654
|
|
|
$
|
(2,986
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|||||
Depreciation and amortization
|
7,617
|
|
|
7,728
|
|
||
Restructuring and other transition expenses, net of payments
|
—
|
|
|
3,712
|
|
||
Deferred income taxes
|
—
|
|
|
(1,334
|
)
|
||
Net gains from sales of assets
|
(12,605
|
)
|
|
(81
|
)
|
||
Net losses on derivative instruments
|
4,514
|
|
|
3,068
|
|
||
Other adjustments
|
908
|
|
|
1,866
|
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(2,359
|
)
|
|
(4,658
|
)
|
||
Inventories
|
(4,792
|
)
|
|
(11,062
|
)
|
||
Derivative assets (liabilities), net
|
(1,403
|
)
|
|
(5,198
|
)
|
||
Other assets
|
(1,480
|
)
|
|
(61
|
)
|
||
Accounts payable
|
1,399
|
|
|
13,049
|
|
||
Accrued expenses and other liabilities
|
(340
|
)
|
|
(2,963
|
)
|
||
Net cash (used) provided by operating activities
|
$
|
(3,887
|
)
|
|
$
|
1,080
|
|
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property, plant and equipment
|
(5,276
|
)
|
|
(7,733
|
)
|
||
Proceeds from sales of property, plant and equipment
|
16,618
|
|
|
53
|
|
||
Net cash provided (used) in investing activities
|
$
|
11,342
|
|
|
$
|
(7,680
|
)
|
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from revolving credit facility
|
$
|
23,000
|
|
|
$
|
12,020
|
|
Repayments on revolving credit facility
|
(30,000
|
)
|
|
—
|
|
||
Payments of finance lease obligations
|
(13
|
)
|
|
(53
|
)
|
||
Proceeds from stock option exercises
|
—
|
|
|
326
|
|
||
Net cash (used) provided by financing activities
|
$
|
(7,013
|
)
|
|
$
|
12,293
|
|
Net increase in cash and cash equivalents
|
$
|
442
|
|
|
$
|
5,693
|
|
Cash and cash equivalents at beginning of period
|
6,983
|
|
|
2,438
|
|
||
Cash and cash equivalents at end of period
|
$
|
7,425
|
|
|
$
|
8,131
|
|
FARMER BROS. CO.
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - (continued)
|
|||||||
(In thousands)
|
|||||||
|
Three Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
||||
Net change in derivative assets and liabilities
included in other comprehensive loss, net of tax
|
$
|
(1,301
|
)
|
|
$
|
(4,637
|
)
|
Non-cash additions to property, plant and equipment
|
$
|
250
|
|
|
$
|
6,976
|
|
Non-cash portion of earnout receivable recognized—spice assets sale
|
$
|
—
|
|
|
$
|
252
|
|
Non-cash issuance of 401-K common stock
|
$
|
53
|
|
|
$
|
—
|
|
Cumulative preferred dividends, undeclared and unpaid
|
$
|
137
|
|
|
$
|
132
|
|
Standard
|
|
Description
|
|
Effective Date
|
|
Effect on the Financial Statements or Other Significant Matters
|
In August 2018, the FASB issued ASU No. 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”).
|
|
ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.
|
|
Annual periods beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period.
|
|
Effective for the Company beginning July 1, 2020. The Company is currently evaluating the impact ASU 2018-15 will have on its consolidated financial statements.
|
In August 2018, the FASB issued ASU No. 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans” (“ASU 2018-14”).
|
|
ASU 2018-14 modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing disclosures that no longer are considered cost beneficial, clarifying the specific requirements of disclosures and adding disclosure requirements identified as relevant.
|
|
Annual periods beginning after December 15, 2020. Early adoption is permitted.
|
|
Effective for the Company beginning July 1, 2021. The Company is currently evaluating the impact ASU 2018-14 will have on its consolidated financial statements.
|
In February 2018, the FASB issued ASU No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”).
|
|
ASU 2018-02 provides entities an option to reclassify certain stranded tax effects resulting from the tax reform from accumulated other comprehensive income to retained earnings.
|
|
The guidance in ASU 2018-02 is effective for annual periods beginning after December 15, 2018, and interim periods within those fiscal years, and should be applied either in the period of adoption or retrospectively.
|
|
The Company did not elect the option to reclassify certain stranded tax effects resulting from the tax reform from accumulated other comprehensive income to retained earnings.
|
In January 2017, the FASB issued ASU No. 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”).
|
|
The amendments in ASU 2017-04 address concerns regarding the cost and complexity of the two-step goodwill impairment test, and remove the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. ASU 2017-04 does not amend the optional qualitative assessment of goodwill impairment.
|
|
Annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019.
|
|
Effective for the Company beginning July 1, 2020. Adoption of ASU 2017-04 is not expected to have a material effect on the results of operations, financial position or cash flows of the Company.
|
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Since that date, the FASB has issued additional ASUs clarifying certain aspects of ASU 2016-13.
|
|
The objective of the guidance in ASU 2016-13 is to allow entities to recognize estimated credit losses in the period that the change in valuation occurs. The amendments in ASU 2016-13 requires an entity to present financial assets measured on an amortized cost basis on the balance sheet net of an allowance for credit losses.
The model requires an estimate of the credit losses expected over the life of an exposure or pool of exposures. The income statement will reflect the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period.
|
|
Annual reporting periods beginning after December 15, 2019 and interim periods within those reporting periods.
|
|
Effective for the Company beginning July 1, 2020. The Company is currently evaluating the impact of adoption on its financial statements and related disclosures, but does not anticipate a material impact to the consolidated financial statements.
|
In February 2016, the FASB issued ASU 2016-02, Leases. Since that date, the FASB has issued additional ASUs clarifying certain aspects of ASU 2016-02.
|
|
ASU 2016-02 requires a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for both finance and operating leases. Subsequent guidance issued after February 2016 did not change the core principle of ASU 2016-02.
|
|
Annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early application is permitted.
|
|
The Company adopted the new guidance effective July 1, 2019, using the modified retrospective transition method, which did not require the Company to adjust comparative periods. See the Adoption of ASU 2016-02 below for additional information.
|
|
|
Classification
|
|
September 30, 2019
|
||
(In thousands)
|
|
|
|
|
||
Operating lease assets
|
|
Right-of-use operating lease assets
|
|
$
|
16,349
|
|
Finance lease assets
|
|
Property, plant and equipment, net
|
|
47
|
|
|
Total lease assets
|
|
|
|
$
|
16,396
|
|
|
|
|
|
|
||
Operating lease liabilities - current
|
|
Operating lease liabilities - current
|
|
$
|
4,332
|
|
Operating lease liabilities - noncurrent
|
|
Operating lease liabilities - noncurrent
|
|
12,084
|
|
|
Finance lease liabilities
|
|
Other long-term liabilities
|
|
48
|
|
|
Total lease liabilities
|
|
|
|
$
|
16,464
|
|
|
|
|
|
Three Months Ended September 30,
|
||
|
|
Classification
|
|
2019
|
||
(In thousands)
|
|
|
|
|
||
Operating lease expense
|
|
General and administrative expenses and cost of goods sold
|
|
$
|
1,109
|
|
Finance lease expense:
|
|
|
|
|
||
Amortization of finance lease assets
|
|
General and administrative expenses
|
|
13
|
|
|
Interest on finance lease liabilities
|
|
Interest expense
|
|
1
|
|
|
Total lease expense
|
|
|
|
$
|
1,123
|
|
|
|
September 30, 2019
|
||||||
(In thousands)
|
|
Operating Leases
|
|
Finance Leases
|
||||
Maturities of lease liabilities are as follows:
|
|
|
|
|
||||
2020
|
|
$
|
3,266
|
|
|
$
|
40
|
|
2021
|
|
3,802
|
|
|
9
|
|
||
2022
|
|
2,812
|
|
|
—
|
|
||
2023
|
|
2,268
|
|
|
—
|
|
||
2024
|
|
2,095
|
|
|
—
|
|
||
Thereafter
|
|
4,591
|
|
|
—
|
|
||
Total lease payments
|
|
18,834
|
|
|
49
|
|
||
Less: interest
|
|
(2,418
|
)
|
|
(1
|
)
|
||
Total lease obligations
|
|
$
|
16,416
|
|
|
$
|
48
|
|
|
|
September 30, 2019
|
|
Weighted-average remaining lease terms (in years):
|
|
|
|
Operating lease
|
|
9.0
|
|
Finance lease
|
|
0.9
|
|
|
|
|
|
Weighted-average discount rate:
|
|
|
|
Operating lease
|
|
4.50
|
%
|
Finance lease
|
|
4.50
|
%
|
|
|
Three Months Ended
September 30, 2019 |
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
1,041
|
|
Operating cash flows from finance leases
|
|
$
|
1
|
|
Financing cash flows from finance leases
|
|
$
|
13
|
|
|
|
|
||
Leased assets obtained in exchange for new finance lease liabilities
|
|
$
|
—
|
|
Leased assets obtained in exchange for new operating lease liabilities
|
|
$
|
—
|
|
(In thousands)
|
|
Operating
Lease Obligations |
|
Capital
Lease Obligations |
||||
Year Ended June 30,
|
|
|
|
|
||||
2020
|
|
$
|
4,434
|
|
|
$
|
36
|
|
2021
|
|
3,238
|
|
|
1
|
|
||
2022
|
|
2,472
|
|
|
—
|
|
||
2023
|
|
2,131
|
|
|
—
|
|
||
2024
|
|
2,025
|
|
|
—
|
|
||
Thereafter
|
|
4,389
|
|
|
—
|
|
||
Total minimum lease payments
|
|
$
|
18,689
|
|
|
37
|
|
|
Less: imputed interest
(0.82% to 10.66%) |
|
|
|
(2
|
)
|
|||
Present value of future minimum lease payments
|
|
|
|
35
|
|
|||
Less: current portion
|
|
|
|
(34
|
)
|
|||
Long-term capital lease obligations
|
|
|
|
$
|
1
|
|
(In thousands)
|
|
September 30, 2019
|
|
June 30, 2019
|
||
Derivative instruments designated as cash flow hedges:
|
|
|
|
|
||
Long coffee pounds
|
|
51,563
|
|
|
42,113
|
|
Derivative instruments not designated as cash flow hedges:
|
|
|
|
|
||
Long coffee pounds
|
|
1,880
|
|
|
6,070
|
|
Total
|
|
53,443
|
|
|
48,183
|
|
|
|
Derivative Instruments
Designated as Cash Flow Hedges
|
|
Derivative Instruments Not Designated as Accounting Hedges
|
||||||||||||
|
|
September 30, 2019
|
|
June 30, 2019
|
|
September 30, 2019
|
|
June 30, 2019
|
||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
||||||||
Financial Statement Location:
|
|
|
|
|
|
|
|
|
||||||||
Short-term derivative assets:
|
|
|
|
|
|
|
|
|
||||||||
Coffee-related derivative instruments(1)
|
|
$
|
303
|
|
|
$
|
1,254
|
|
|
$
|
13
|
|
|
$
|
611
|
|
Long-term derivative assets:
|
|
|
|
|
|
|
|
|
||||||||
Coffee-related derivative instruments (2)
|
|
$
|
215
|
|
|
$
|
671
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Short-term derivative liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Coffee-related derivative instruments (3)
|
|
$
|
2,760
|
|
|
$
|
1,114
|
|
|
$
|
300
|
|
|
$
|
114
|
|
Interest rate swap derivative instruments (3)
|
|
$
|
401
|
|
|
$
|
246
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term derivative liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Coffee-related derivative instruments (4)
|
|
$
|
82
|
|
|
$
|
13
|
|
|
$
|
2
|
|
|
$
|
—
|
|
Interest rate swap derivative instruments (4)
|
|
$
|
1,945
|
|
|
$
|
1,599
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Three Months Ended September 30,
|
|
Financial Statement Classification
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
|
|||||
Net loss recognized in AOCI - Interest rate swap
|
|
$
|
(496
|
)
|
|
$
|
—
|
|
|
AOCI
|
Net gain recognized from AOCI to earnings - Interest rate swap
|
|
$
|
20
|
|
|
$
|
—
|
|
|
Interest Expense
|
Net losses recognized in AOCI - Coffee-related
|
|
$
|
(4,699
|
)
|
|
$
|
(8,193
|
)
|
|
AOCI
|
Net loss recognized in earnings - Coffee - related
|
|
$
|
(3,471
|
)
|
|
$
|
(1,962
|
)
|
|
Cost of goods sold
|
|
|
Three Months Ended September 30,
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
||||
Net losses on coffee-related derivative instruments(1)
|
|
$
|
(1,043
|
)
|
|
$
|
(1,105
|
)
|
Non-operating pension and other postretirement benefit plans cost (2)
|
|
1,248
|
|
|
1,763
|
|
||
Other (losses) gains, net
|
|
(2
|
)
|
|
(1
|
)
|
||
Other, net
|
|
$
|
203
|
|
|
$
|
657
|
|
(In thousands)
|
|
|
|
Gross Amount Reported on Balance Sheet
|
|
Netting Adjustments
|
|
Cash Collateral Posted
|
|
Net Exposure
|
||||||||
September 30, 2019
|
|
Derivative Assets
|
|
$
|
531
|
|
|
$
|
(546
|
)
|
|
$
|
—
|
|
|
$
|
(15
|
)
|
|
|
Derivative Liabilities
|
|
$
|
5,490
|
|
|
$
|
(546
|
)
|
|
$
|
—
|
|
|
$
|
4,944
|
|
June 30, 2019
|
|
Derivative Assets
|
|
$
|
2,539
|
|
|
$
|
(698
|
)
|
|
$
|
—
|
|
|
$
|
1,841
|
|
|
|
Derivative Liabilities
|
|
$
|
3,086
|
|
|
$
|
(698
|
)
|
|
$
|
—
|
|
|
$
|
2,388
|
|
(In thousands)
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
September 30, 2019
|
|
|
|
|
|
|
|
|
||||||||
Derivative instruments designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
Coffee-related derivative assets (1)
|
|
$
|
518
|
|
|
$
|
—
|
|
|
$
|
518
|
|
|
$
|
—
|
|
Coffee-related derivative liabilities (1)
|
|
$
|
2,842
|
|
|
$
|
—
|
|
|
$
|
2,842
|
|
|
$
|
—
|
|
Interest rate swap derivative liabilities (2)
|
|
$
|
2,346
|
|
|
$
|
—
|
|
|
$
|
2,346
|
|
|
$
|
—
|
|
Derivative instruments not designated as accounting hedges:
|
|
|
|
|
|
|
|
|
||||||||
Coffee-related derivative assets(1)
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
—
|
|
Coffee-related derivative liabilities(1)
|
|
$
|
302
|
|
|
$
|
—
|
|
|
$
|
302
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
(In thousands)
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
June 30, 2019
|
|
|
|
|
|
|
|
|
||||||||
Derivative instruments designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
Coffee-related derivative assets (1)
|
|
$
|
1,925
|
|
|
$
|
—
|
|
|
$
|
1,925
|
|
|
$
|
—
|
|
Coffee-related derivative liabilities (1)
|
|
$
|
1,127
|
|
|
$
|
—
|
|
|
$
|
1,127
|
|
|
$
|
—
|
|
Interest rate swap derivative liabilities (2)
|
|
$
|
1,845
|
|
|
$
|
—
|
|
|
$
|
1,845
|
|
|
$
|
—
|
|
Derivative instruments not designated as accounting hedges:
|
|
|
|
|
|
|
|
|
||||||||
Coffee-related derivative assets (1)
|
|
$
|
614
|
|
|
$
|
—
|
|
|
$
|
614
|
|
|
$
|
—
|
|
Coffee-related derivative liabilities (1)
|
|
$
|
114
|
|
|
$
|
—
|
|
|
$
|
114
|
|
|
$
|
—
|
|
(1)
|
The Company's coffee-related derivative instruments are traded over-the-counter and, therefore, classified as Level 2.
|
(2)
|
The Company's interest rate swap derivative instrument are model-derived valuations with directly or indirectly observable significant inputs such as interest rate and, therefore, classified as Level 2.
|
(In thousands)
|
|
September 30, 2019
|
|
June 30, 2019
|
||||
Trade receivables
|
|
$
|
54,689
|
|
|
$
|
53,593
|
|
Other receivables(1)
|
|
3,806
|
|
|
2,886
|
|
||
Allowance for doubtful accounts
|
|
(1,030
|
)
|
|
(1,324
|
)
|
||
Accounts receivable, net
|
|
$
|
57,465
|
|
|
$
|
55,155
|
|
(In thousands)
|
|
September 30, 2019
|
|
June 30, 2019
|
||||
Coffee
|
|
|
|
|
||||
Processed
|
|
$
|
28,284
|
|
|
$
|
25,769
|
|
Unprocessed
|
|
36,946
|
|
|
33,259
|
|
||
Total
|
|
$
|
65,230
|
|
|
$
|
59,028
|
|
Tea and culinary products
|
|
|
|
|
||||
Processed
|
|
$
|
19,229
|
|
|
$
|
21,767
|
|
Unprocessed
|
|
80
|
|
|
74
|
|
||
Total
|
|
$
|
19,309
|
|
|
$
|
21,841
|
|
Coffee brewing equipment parts
|
|
$
|
7,191
|
|
|
$
|
7,041
|
|
Total inventories
|
|
$
|
91,730
|
|
|
$
|
87,910
|
|
(In thousands)
|
|
September 30, 2019
|
|
June 30, 2019
|
||||
Buildings and facilities
|
|
$
|
105,188
|
|
|
$
|
107,915
|
|
Machinery and equipment
|
|
244,774
|
|
|
249,477
|
|
||
Capitalized software
|
|
28,250
|
|
|
27,666
|
|
||
Office furniture and equipment
|
|
13,882
|
|
|
14,035
|
|
||
|
|
$
|
392,094
|
|
|
$
|
399,093
|
|
Accumulated depreciation
|
|
(225,970
|
)
|
|
(225,826
|
)
|
||
Land
|
|
15,030
|
|
|
16,191
|
|
||
Property, plant and equipment, net
|
|
$
|
181,154
|
|
|
$
|
189,458
|
|
(In thousands)
|
|
September 30, 2019
|
|
June 30, 2019
|
||||
Coffee Brewing Equipment
|
|
$
|
104,481
|
|
|
$
|
106,593
|
|
Accumulated depreciation
|
|
(69,444
|
)
|
|
$
|
(70,202
|
)
|
|
Coffee Brewing Equipment, net
|
|
$
|
35,037
|
|
|
$
|
36,391
|
|
|
|
Three Months Ended September 30,
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
||||
Depreciation expense
|
|
$
|
2,339
|
|
|
$
|
2,195
|
|
|
|
|
|
|
||||
Other CBE expenses
|
|
$
|
7,725
|
|
|
$
|
8,507
|
|
|
|
|
|
September 30, 2019
|
|
June 30, 2019
|
|
|
|||||||||||||||||||
(In thousands)
|
|
Weighted
Average Amortization Period as of September 30, 2019 |
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|||||||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Customer relationships
|
|
7.6
|
|
|
$
|
33,003
|
|
|
$
|
(15,842
|
)
|
|
$
|
17,161
|
|
|
$
|
33,003
|
|
|
$
|
(15,291
|
)
|
|
$
|
17,712
|
|
Non-compete agreements
|
|
2.4
|
|
|
220
|
|
|
(132
|
)
|
|
88
|
|
|
220
|
|
|
(122
|
)
|
|
98
|
|
||||||
Recipes
|
|
4.1
|
|
|
930
|
|
|
(387
|
)
|
|
543
|
|
|
930
|
|
|
(354
|
)
|
|
576
|
|
||||||
Trade name/brand name
|
|
4.8
|
|
|
510
|
|
|
(355
|
)
|
|
155
|
|
|
510
|
|
|
(346
|
)
|
|
164
|
|
||||||
Total amortized intangible assets
|
|
|
|
$
|
34,663
|
|
|
$
|
(16,716
|
)
|
|
$
|
17,947
|
|
|
$
|
34,663
|
|
|
$
|
(16,113
|
)
|
|
$
|
18,550
|
|
|
Unamortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Trademarks, trade names and brand name with indefinite lives
|
|
|
|
$
|
10,328
|
|
|
$
|
—
|
|
|
$
|
10,328
|
|
|
$
|
10,328
|
|
|
$
|
—
|
|
|
$
|
10,328
|
|
|
Total unamortized intangible assets
|
|
|
|
$
|
10,328
|
|
|
$
|
—
|
|
|
$
|
10,328
|
|
|
$
|
10,328
|
|
|
$
|
—
|
|
|
$
|
10,328
|
|
|
Total intangible assets
|
|
|
|
$
|
44,991
|
|
|
$
|
(16,716
|
)
|
|
$
|
28,275
|
|
|
$
|
44,991
|
|
|
$
|
(16,113
|
)
|
|
$
|
28,878
|
|
|
|
Three Months Ended September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
(In thousands)
|
|
|
||||||
Service cost
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
|
1,059
|
|
|
1,426
|
|
||
Expected return on plan assets
|
|
(1,102
|
)
|
|
(1,485
|
)
|
||
Amortization of net loss(1)
|
|
370
|
|
|
370
|
|
||
Net periodic benefit cost
|
|
$
|
327
|
|
|
$
|
311
|
|
|
|
September 30, 2019
|
|
June 30, 2019
|
Discount rate
|
|
3.45%
|
|
3.45%
|
Expected long-term return on plan assets
|
|
6.75%
|
|
6.75%
|
(In thousands)
|
|
September 30, 2019
|
|
June 30, 2019
|
||||
WCT Pension Trust (1)
|
|
$
|
916
|
|
|
$
|
1,487
|
|
Local 807 Pension Fund (2)
|
|
$
|
182
|
|
|
$
|
182
|
|
|
|
Three Months Ended September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
(In thousands)
|
|
|
|
|
||||
Components of Net Periodic Postretirement Benefit Cost (Credit):
|
|
|
|
|
||||
Service cost
|
|
$
|
147
|
|
|
$
|
133
|
|
Interest cost
|
|
214
|
|
|
222
|
|
||
Amortization of net gain
|
|
(125
|
)
|
|
(209
|
)
|
||
Amortization of prior service credit
|
|
(392
|
)
|
|
(439
|
)
|
||
Net periodic postretirement benefit credit
|
|
$
|
(156
|
)
|
|
$
|
(293
|
)
|
|
|
Fiscal
|
||
|
|
2020
|
|
2019
|
Retiree Medical Plan discount rate
|
|
3.62%
|
|
4.25%
|
Death Benefit discount rate
|
|
3.64%
|
|
4.25%
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
June 30, 2019
|
||||||||||
(In thousands)
|
|
Debt Origination Date
|
|
Maturity
|
|
Original Borrowing Amount
|
|
Carrying Value
|
|
Weighted Average Interest Rate
|
|
Carrying Value
|
|
Weighted Average Interest Rate
|
||||||
Credit Facility
|
|
Revolver
|
|
11/6/2023
|
|
N/A
|
|
$
|
85,000
|
|
|
4.06
|
%
|
|
$
|
92,000
|
|
|
3.98
|
%
|
|
|
September 30, 2019
|
|
June 30, 2019
|
||||
Allocated shares
|
|
1,393,530
|
|
|
1,393,530
|
|
||
Committed to be released shares
|
|
—
|
|
|
—
|
|
||
Unallocated shares
|
|
—
|
|
|
—
|
|
||
Total ESOP shares
|
|
1,393,530
|
|
|
1,393,530
|
|
||
|
|
|
|
|
||||
(In thousands)
|
|
|
|
|
||||
Fair value of ESOP shares
|
|
$
|
18,046
|
|
|
$
|
22,812
|
|
|
|
Three Months Ended September 30, 2019
|
||
Weighted average fair value of NQOs
|
|
$
|
4.47
|
|
Risk-free interest rate
|
|
1.8
|
%
|
|
Dividend yield
|
|
—
|
%
|
|
Average expected term
|
|
4.7 years
|
|
|
Expected stock price volatility
|
|
37.0
|
%
|
Outstanding NQOs:
|
|
Number
of NQOs
|
|
Weighted
Average
Exercise
Price ($)
|
|
Weighted
Average
Remaining
Life
(Years)
|
|
Aggregate
Intrinsic
Value
($ in thousands)
|
||
Outstanding at June 30, 2019
|
|
198,049
|
|
|
27.35
|
|
5.25
|
|
40
|
|
Granted
|
|
223,713
|
|
|
13.13
|
|
—
|
|
—
|
|
Exercised
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Forfeited
|
|
(68,842
|
)
|
|
27.40
|
|
—
|
|
—
|
|
Expired
|
|
(12,946
|
)
|
|
31.70
|
|
—
|
|
—
|
|
Outstanding at September 30, 2019
|
|
339,974
|
|
|
17.82
|
|
6.12
|
|
6
|
|
Exercisable at September 30, 2019
|
|
37,283
|
|
|
26.33
|
|
1.71
|
|
6
|
|
Outstanding PNQs:
|
|
Number
of
PNQs
|
|
Weighted
Average
Exercise
Price ($)
|
|
|
Weighted
Average
Remaining
Life
(Years)
|
|
Aggregate
Intrinsic
Value
($ in
thousands)
|
||
Outstanding at June 30, 2019
|
|
229,961
|
|
|
26.21
|
|
|
1.23
|
|
—
|
|
Granted
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
Exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
Forfeited
|
|
(6,212
|
)
|
|
32.85
|
|
|
—
|
|
—
|
|
Expired
|
|
(149,031
|
)
|
|
25.05
|
|
|
—
|
|
—
|
|
Outstanding at September 30, 2019
|
|
74,718
|
|
|
27.95
|
|
|
1.00
|
|
—
|
|
Exercisable at September 30, 2019
|
|
53,990
|
|
|
26.65
|
|
|
0.78
|
|
—
|
|
Outstanding and Nonvested Restricted Stock Awards:
|
|
Shares
Awarded
|
|
Weighted
Average
Grant Date
Fair Value
($)
|
||
Outstanding and nonvested at June 30, 2019
|
|
32,056
|
|
|
21.10
|
|
Granted
|
|
7,370
|
|
|
13.56
|
|
Vested/Released
|
|
—
|
|
|
—
|
|
Cancelled/Forfeited
|
|
(757
|
)
|
|
31.70
|
|
Outstanding and nonvested at March 31, 2019
|
|
38,669
|
|
|
20.22
|
|
Outstanding and Nonvested PBRSUs:
|
|
PBRSUs
Awarded(1)
|
|
Weighted
Average
Grant Date
Fair Value
($)
|
||
Outstanding and nonvested at June 30, 2019
|
|
51,237
|
|
|
27.69
|
|
Granted(1)
|
|
38,080
|
|
|
13.13
|
|
Vested/Released
|
|
—
|
|
|
—
|
|
Cancelled/Forfeited
|
|
(24,254
|
)
|
|
27.91
|
|
Outstanding and nonvested at September 30, 2019
|
|
65,063
|
|
|
27.57
|
|
Expected to vest at September 30, 2019
|
|
—
|
|
|
—
|
|
(In thousands)
|
|
September 30, 2019
|
|
June 30, 2019
|
||||
Accrued postretirement benefits
|
|
$
|
1,068
|
|
|
$
|
1,068
|
|
Accrued workers’ compensation liabilities
|
|
1,598
|
|
|
1,495
|
|
||
Earnout payable (1)
|
|
—
|
|
|
1,000
|
|
||
Working capital dispute payable(2)
|
|
354
|
|
|
354
|
|
||
Other (3)
|
|
4,004
|
|
|
3,392
|
|
||
Other current liabilities
|
|
$
|
7,024
|
|
|
$
|
7,309
|
|
(In thousands)
|
|
September 30, 2019
|
|
June 30, 2019
|
||||
Finance lease liabilities
|
|
$
|
48
|
|
|
$
|
32
|
|
Derivative liabilities—noncurrent
|
|
2,029
|
|
|
1,612
|
|
||
Cumulative preferred dividends, undeclared and unpaid—noncurrent
|
|
687
|
|
|
618
|
|
||
Deferred income taxes and other liabilities(1)
|
|
1,667
|
|
|
1,795
|
|
||
Other long-term liabilities
|
|
$
|
4,431
|
|
|
$
|
4,057
|
|
|
|
Three Months Ended September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Income tax benefit
|
|
$
|
(107
|
)
|
|
$
|
(1,287
|
)
|
Effective tax rate
|
|
(2.3
|
)%
|
|
30.1
|
%
|
|
|
Three Months Ended September 30,
|
||||||
(In thousands, except share and per share amounts)
|
|
2019
|
|
2018
|
||||
Undistributed net earnings (loss) available to common stockholders
|
|
$
|
4,507
|
|
|
$
|
(3,115
|
)
|
Undistributed net earnings (loss) available to nonvested restricted stockholders and holders of convertible preferred stock
|
|
10
|
|
|
(3
|
)
|
||
Net earnings (loss) available to common stockholders—basic
|
|
$
|
4,517
|
|
|
$
|
(3,118
|
)
|
|
|
|
|
|
||||
Weighted average common shares outstanding—basic
|
|
17,099,851
|
|
|
16,886,718
|
|
||
Effect of dilutive securities:
|
|
|
|
|
||||
Shares issuable under stock options
|
|
2,390
|
|
|
—
|
|
||
Shares issuable under PBRSUs
|
|
4,871
|
|
|
—
|
|
||
Shares issuable under convertible preferred stock
|
|
411,301
|
|
|
—
|
|
||
Weighted average common shares outstanding—diluted
|
|
17,518,413
|
|
|
16,886,718
|
|
||
Net earnings (loss) per common share available to common stockholders—basic
|
|
$
|
0.26
|
|
|
$
|
(0.18
|
)
|
Net earnings (loss) per common share available to common stockholders—diluted
|
|
$
|
0.26
|
|
|
$
|
(0.18
|
)
|
|
|
Three Months Ended September 30,
|
||||
|
|
2019
|
|
2018
|
||
Shares issuable under stock options
|
|
—
|
|
|
51,177
|
|
Shares issuable under convertible preferred stock
|
|
—
|
|
|
397,215
|
|
Shares issuable under PBRSUs
|
|
—
|
|
|
—
|
|
(In thousands, except share and per share amounts)
|
|
|
|
|
|
|
||||||||||||||
Shares Authorized
|
|
Shares Issued and Outstanding
|
|
Stated Value per Share
|
|
Carrying Value
|
|
Cumulative Preferred Dividends, Undeclared and Unpaid
|
|
Liquidation Preference
|
||||||||||
21,000
|
|
|
14,700
|
|
|
$
|
1,072
|
|
|
$
|
15,761
|
|
|
$
|
1,061
|
|
|
$
|
15,761
|
|
|
|
Three Months Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
||||||||||
(In thousands)
|
|
$
|
|
% of total
|
|
$
|
|
% of total
|
||||||
Net Sales by Product Category:
|
|
|
|
|
|
|
|
|
||||||
Coffee (Roasted)
|
|
$
|
87,370
|
|
|
63.0
|
%
|
|
$
|
95,355
|
|
|
64.7
|
%
|
Coffee (Frozen Liquid)
|
|
7,928
|
|
|
5.7
|
%
|
|
8,556
|
|
|
5.8
|
%
|
||
Tea (Iced & Hot)
|
|
7,705
|
|
|
5.6
|
%
|
|
8,904
|
|
|
6.0
|
%
|
||
Culinary
|
|
14,203
|
|
|
10.2
|
%
|
|
15,994
|
|
|
10.8
|
%
|
||
Spice
|
|
6,206
|
|
|
4.5
|
%
|
|
6,157
|
|
|
4.2
|
%
|
||
Other beverages(1)
|
|
12,734
|
|
|
9.2
|
%
|
|
11,626
|
|
|
7.9
|
%
|
||
Other revenues(2)
|
|
1,755
|
|
|
1.3
|
%
|
|
—
|
|
|
—
|
%
|
||
Net sales by product category
|
|
137,901
|
|
|
99.5
|
%
|
|
146,592
|
|
|
99
|
%
|
||
Fuel surcharge
|
|
699
|
|
|
0.5
|
%
|
|
848
|
|
|
1
|
%
|
||
Net sales
|
|
$
|
138,600
|
|
|
100.0
|
%
|
|
$
|
147,440
|
|
|
100
|
%
|
(1)
|
Includes all beverages other than roasted coffee, frozen liquid coffee, and iced and hot tea, including cappuccino, cocoa, granitas, and concentrated and ready-to drink cold brew and iced coffee.
|
(2)
|
Represents revenues for certain transition services related to the sale of the Company’s office coffee assets.
|
(In thousands)
|
|
September 30, 2019
|
||
Buildings and facilities
|
|
$
|
982
|
|
Land
|
|
736
|
|
|
Assets held for sale
|
|
$
|
1,718
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Three Months Ended September 30,
|
|
Favorable (Unfavorable)
|
|||||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Income Statement Data:
|
|
|
|
|
|
|
|
|||||||
Net sales
|
$
|
138,600
|
|
|
$
|
147,440
|
|
|
$
|
(8,840
|
)
|
|
(6.0
|
)%
|
Gross margin
|
29.3
|
%
|
|
32.7
|
%
|
|
(3.4
|
)%
|
|
NM
|
|
|||
Operating expenses as a % of sales
|
24.3
|
%
|
|
34.1
|
%
|
|
9.8
|
%
|
|
NM
|
|
|||
Income (loss) from operations
|
$
|
6,892
|
|
|
$
|
(2,078
|
)
|
|
$
|
8,970
|
|
|
431.7
|
%
|
Net income (loss)
|
$
|
4,654
|
|
|
$
|
(2,986
|
)
|
|
$
|
7,640
|
|
|
NM
|
|
Net earnings (loss) available to common stockholders per common share—basic
|
$
|
0.26
|
|
|
$
|
(0.18
|
)
|
|
$
|
0.44
|
|
|
NM
|
|
Net earnings (loss) available to common stockholders per common share—diluted
|
$
|
0.26
|
|
|
$
|
(0.18
|
)
|
|
$
|
0.44
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|||||||
Operating Data:
|
|
|
|
|
|
|
|
|||||||
Coffee pounds
|
25,958
|
|
|
25,449
|
|
|
509
|
|
|
2.0
|
%
|
|||
EBITDA(1)
|
$
|
13,440
|
|
|
$
|
4,658
|
|
|
$
|
8,782
|
|
|
188.5
|
%
|
EBITDA Margin(1)
|
9.7
|
%
|
|
3.2
|
%
|
|
6.5
|
%
|
|
NM
|
|
|||
Adjusted EBITDA(1)
|
$
|
4,016
|
|
|
$
|
10,967
|
|
|
$
|
(6,951
|
)
|
|
(63.4
|
)%
|
Adjusted EBITDA Margin(1)
|
2.9
|
%
|
|
7.4
|
%
|
|
(4.5
|
)%
|
|
NM
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Percentage of Total Net Sales By Product Category
|
|
|
|
|
|
|
|
|||||||
Coffee (Roasted)
|
63.0
|
%
|
|
64.7
|
%
|
|
(1.7
|
)%
|
|
(2.6
|
)%
|
|||
Coffee (Frozen Liquid)
|
5.7
|
%
|
|
5.8
|
%
|
|
(0.1
|
)%
|
|
(1.7
|
)%
|
|||
Tea (Iced & Hot)
|
5.6
|
%
|
|
6.0
|
%
|
|
(0.4
|
)%
|
|
(6.7
|
)%
|
|||
Culinary
|
10.2
|
%
|
|
10.8
|
%
|
|
(0.6
|
)%
|
|
(5.6
|
)%
|
|||
Spice
|
4.5
|
%
|
|
4.2
|
%
|
|
0.3
|
%
|
|
7.1
|
%
|
|||
Other beverages(2)
|
9.2
|
%
|
|
7.9
|
%
|
|
1.3
|
%
|
|
16.5
|
%
|
|||
Other revenues(3)
|
1.3
|
%
|
|
—
|
%
|
|
1.3
|
%
|
|
NM
|
|
|||
Net sales by product category
|
99.5
|
%
|
|
99.4
|
%
|
|
0.1
|
%
|
|
NM
|
|
|||
Fuel Surcharge
|
0.5
|
%
|
|
0.6
|
%
|
|
(0.1
|
)%
|
|
NM
|
|
|||
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
—
|
%
|
|
NM
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Other data:
|
|
|
|
|
|
|
|
|||||||
Capital expenditures related to maintenance
|
$
|
4,352
|
|
|
$
|
5,462
|
|
|
$
|
(1,110
|
)
|
|
(20.3
|
)%
|
Total capital expenditures
|
$
|
5,276
|
|
|
$
|
7,787
|
|
|
$
|
(2,511
|
)
|
|
(32.2
|
)%
|
Depreciation and amortization expense
|
$
|
7,617
|
|
|
$
|
7,728
|
|
|
$
|
(111
|
)
|
|
(1.4
|
)%
|
|
Three Months Ended September 30,
|
|
Favorable (Unfavorable)
|
|||||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Net sales
|
$
|
138,600
|
|
|
$
|
147,440
|
|
|
$
|
(8,840
|
)
|
|
(6.0
|
)%
|
Cost of goods sold
|
97,959
|
|
|
99,205
|
|
|
1,246
|
|
|
1.3
|
%
|
|||
Gross profit
|
40,641
|
|
|
48,235
|
|
|
(7,594
|
)
|
|
(15.7
|
)%
|
|||
Selling expenses
|
33,614
|
|
|
37,310
|
|
|
3,696
|
|
|
9.9
|
%
|
|||
General and administrative expenses
|
12,740
|
|
|
8,617
|
|
|
(4,123
|
)
|
|
(47.8
|
)%
|
|||
Restructuring and other transition expenses
|
—
|
|
|
4,467
|
|
|
4,467
|
|
|
100.0
|
%
|
|||
Net gains from sales of assets
|
(12,605
|
)
|
|
(81
|
)
|
|
12,524
|
|
|
NM
|
|
|||
Operating expenses
|
33,749
|
|
|
50,313
|
|
|
16,564
|
|
|
32.9
|
%
|
|||
Income (loss) from operations
|
6,892
|
|
|
(2,078
|
)
|
|
8,970
|
|
|
431.7
|
%
|
|||
Other (expense) income:
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
(2,548
|
)
|
|
(2,852
|
)
|
|
304
|
|
|
10.7
|
%
|
|||
Other, net
|
203
|
|
|
657
|
|
|
(454
|
)
|
|
(69.1
|
)%
|
|||
Total other expense
|
(2,345
|
)
|
|
(2,195
|
)
|
|
(150
|
)
|
|
(6.8
|
)%
|
|||
Income (loss) before taxes
|
4,547
|
|
|
(4,273
|
)
|
|
8,820
|
|
|
206.4
|
%
|
|||
Income tax benefit
|
(107
|
)
|
|
(1,287
|
)
|
|
(1,180
|
)
|
|
(91.7
|
)%
|
|||
Net income (loss)
|
$
|
4,654
|
|
|
$
|
(2,986
|
)
|
|
7,640
|
|
|
255.9
|
%
|
|
Less: Cumulative preferred dividends, undeclared and unpaid
|
137
|
|
|
132
|
|
|
(5
|
)
|
|
(3.8
|
)%
|
|||
Net earnings (loss) available to common stockholders
|
$
|
4,517
|
|
|
$
|
(3,118
|
)
|
|
7,635
|
|
|
244.9
|
%
|
|
Three Months Ended September 30,
|
|
Favorable (Unfavorable)
|
|||||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Units sold
|
|
|
|
|
|
|
|
|||||||
Coffee (Roasted)
|
20,766
|
|
|
20,359
|
|
|
407
|
|
|
2.0
|
%
|
|||
Coffee (Frozen Liquid)
|
98
|
|
|
125
|
|
|
(27
|
)
|
|
(21.6
|
)%
|
|||
Tea (Iced & Hot)
|
625
|
|
|
634
|
|
|
(9
|
)
|
|
(1.4
|
)%
|
|||
Culinary
|
1,858
|
|
|
2,088
|
|
|
(230
|
)
|
|
(11.0
|
)%
|
|||
Spice
|
167
|
|
|
215
|
|
|
(48
|
)
|
|
(22.3
|
)%
|
|||
Other beverages(1)
|
939
|
|
|
1,054
|
|
|
(115
|
)
|
|
(10.9
|
)%
|
|||
Total
|
24,453
|
|
|
24,475
|
|
|
(22
|
)
|
|
(.1
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Unit Price
|
|
|
|
|
|
|
|
|||||||
Coffee (Roasted)
|
$
|
4.26
|
|
|
$
|
4.68
|
|
|
$
|
(0.44
|
)
|
|
(9.4
|
)%
|
Coffee (Frozen Liquid)
|
$
|
80.72
|
|
|
$
|
68.49
|
|
|
$
|
12.22
|
|
|
17.8
|
%
|
Tea (Iced & Hot)
|
$
|
12.33
|
|
|
$
|
14.04
|
|
|
$
|
(1.67
|
)
|
|
(11.9
|
)%
|
Culinary
|
$
|
7.92
|
|
|
$
|
7.66
|
|
|
$
|
0.22
|
|
|
2.9
|
%
|
Spice
|
$
|
37.08
|
|
|
$
|
28.64
|
|
|
$
|
8.48
|
|
|
29.7
|
%
|
Other beverages(1)
|
$
|
13.80
|
|
|
$
|
11.04
|
|
|
$
|
2.80
|
|
|
25.5
|
%
|
Average unit price
|
$
|
5.67
|
|
|
$
|
6.02
|
|
|
$
|
(0.33
|
)
|
|
(5.5
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Total Net Sales By Product Category(2)
|
|
|
|
|
|
|
|
|||||||
Coffee (Roasted)
|
$
|
88,375
|
|
|
$
|
95,355
|
|
|
$
|
(6,980
|
)
|
|
(7.3
|
)%
|
Coffee (Frozen Liquid)
|
7,928
|
|
|
8,556
|
|
|
(628
|
)
|
|
(7.3
|
)%
|
|||
Tea (Iced & Hot)
|
7,705
|
|
|
8,904
|
|
|
(1,199
|
)
|
|
(13.5
|
)%
|
|||
Culinary
|
14,710
|
|
|
15,994
|
|
|
(1,284
|
)
|
|
(8.0
|
)%
|
|||
Spice
|
6,206
|
|
|
6,157
|
|
|
49
|
|
|
.8
|
%
|
|||
Other beverages(1)
|
12,952
|
|
|
11,626
|
|
|
1,326
|
|
|
11.4
|
%
|
|||
Net sales by product category
|
$
|
137,876
|
|
|
$
|
146,592
|
|
|
$
|
(8,716
|
)
|
|
(5.9
|
)%
|
Fuel Surcharge
|
724
|
|
|
848
|
|
|
(124
|
)
|
|
(14.6
|
)%
|
|||
Total
|
$
|
138,600
|
|
|
$
|
147,440
|
|
|
$
|
(8,840
|
)
|
|
(6.0
|
)%
|
|
Three Months Ended
September 30, 2019 vs. 2018 |
|
% of Total Mix Change
|
|||
Effect of change in unit sales
|
$
|
(0.1
|
)
|
|
(1.1
|
)%
|
Effect of pricing and product mix changes
|
(8.7
|
)
|
|
(98.9
|
)%
|
|
Total decrease in net sales
|
$
|
(8.8
|
)
|
|
(100.0
|
)%
|
•
|
income taxes;
|
•
|
interest expense; and
|
•
|
depreciation and amortization expense.
|
•
|
income taxes;
|
•
|
interest expense;
|
•
|
(loss) income from short-term investments;
|
•
|
depreciation and amortization expense;
|
•
|
ESOP and share-based compensation expense;
|
•
|
non-cash impairment losses;
|
•
|
non-cash pension withdrawal expense;
|
•
|
restructuring and other transition expenses;
|
•
|
severance costs
|
•
|
net gains and losses from sales of assets;
|
•
|
non-cash pension settlement charges; and
|
•
|
acquisition and integration costs.
|
|
|
Three Months Ended September 30,
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
||||
Net income (loss), as reported
|
|
$
|
4,654
|
|
|
$
|
(2,986
|
)
|
Income tax expense (benefit)
|
|
(107
|
)
|
|
(1,287
|
)
|
||
Interest expense (1)
|
|
1,276
|
|
|
1,203
|
|
||
Depreciation and amortization expense
|
|
7,617
|
|
|
7,728
|
|
||
EBITDA
|
|
$
|
13,440
|
|
|
$
|
4,658
|
|
EBITDA Margin
|
|
9.7
|
%
|
|
3.2
|
%
|
|
|
Three Months Ended September 30,
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
||||
Net income (loss), as reported
|
|
$
|
4,654
|
|
|
$
|
(2,986
|
)
|
Income tax expense (benefit)
|
|
(107
|
)
|
|
(1,287
|
)
|
||
Interest expense(1)
|
|
1,276
|
|
|
1,203
|
|
||
Depreciation and amortization expense
|
|
7,617
|
|
|
7,728
|
|
||
ESOP and share-based compensation expense
|
|
869
|
|
|
912
|
|
||
Restructuring and other transition expenses(2)
|
|
—
|
|
|
4,467
|
|
||
Net losses (gains) from sales of other assets
|
|
(12,605
|
)
|
|
(81
|
)
|
||
Acquisition and integration costs
|
|
—
|
|
|
1,011
|
|
||
Severance
|
|
2,312
|
|
|
—
|
|
||
Adjusted EBITDA
|
|
$
|
4,016
|
|
|
$
|
10,967
|
|
Adjusted EBITDA Margin
|
|
2.9
|
%
|
|
7.4
|
%
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
June 30, 2019
|
||||||||||
(In thousands)
|
|
Debt Origination Date
|
|
Maturity
|
|
Original Borrowing Amount
|
|
Carrying Value
|
|
Weighted Average Interest Rate
|
|
Carrying Value
|
|
Weighted Average Interest Rate
|
||||||
Credit Facility
|
|
Revolver
|
|
11/6/2023
|
|
N/A
|
|
$
|
85,000
|
|
|
4.06
|
%
|
|
$
|
92,000
|
|
|
3.98
|
%
|
|
Three Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Condensed Consolidated Statements of cash flows data (in thousands)
|
|
|
|
||||
Net cash (used) provided by operating activities
|
$
|
(3,887
|
)
|
|
$
|
1,080
|
|
Net cash provided (used) in investing activities
|
11,342
|
|
|
(7,680
|
)
|
||
Net cash (used) provided by financing activities
|
(7,013
|
)
|
|
12,293
|
|
||
Net increase in cash and cash equivalents
|
$
|
442
|
|
|
$
|
5,693
|
|
|
|
Three Months Ended September 30,
|
||||||
(In thousands)
|
|
2019
|
|
2018
|
||||
Maintenance:
|
|
|
|
|
||||
Coffee brewing equipment
|
|
$
|
2,145
|
|
|
$
|
4,117
|
|
Building and facilities
|
|
75
|
|
|
—
|
|
||
Vehicles, machinery and equipment
|
|
687
|
|
|
570
|
|
||
IT, software, office furniture and equipment
|
|
1,445
|
|
|
775
|
|
||
Capital expenditures, maintenance
|
|
$
|
4,352
|
|
|
$
|
5,462
|
|
|
|
|
|
|
||||
Expansion Project:
|
|
|
|
|
||||
Machinery and equipment
|
|
$
|
924
|
|
|
$
|
2,325
|
|
Capital expenditures, Expansion Project
|
|
$
|
924
|
|
|
$
|
2,325
|
|
|
|
|
|
|
||||
Total capital expenditures
|
|
$
|
5,276
|
|
|
$
|
7,787
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
(In thousands)
|
|
Principal
|
|
Interest Rate
|
|
Annual Interest Expense
|
|||
–150 basis points
|
|
$5,000
|
|
2.56
|
%
|
|
$
|
128
|
|
–100 basis points
|
|
$5,000
|
|
3.06
|
%
|
|
$
|
153
|
|
Unchanged
|
|
$5,000
|
|
4.06
|
%
|
|
$
|
203
|
|
+100 basis points
|
|
$5,000
|
|
5.06
|
%
|
|
$
|
253
|
|
+150 basis points
|
|
$5,000
|
|
5.56
|
%
|
|
$
|
278
|
|
|
|
Increase (Decrease) to Net Loss
|
|
Increase (Decrease) to AOCI
|
||||||||||||
|
|
10% Increase in Underlying Rate
|
|
10% Decrease in Underlying Rate
|
|
10% Increase in Underlying Rate
|
|
10% Decrease in Underlying Rate
|
||||||||
(In thousands)
|
|
|||||||||||||||
Coffee-related derivative instruments(1)
|
|
$
|
192
|
|
|
$
|
(192
|
)
|
|
$
|
5,574
|
|
|
$
|
(5,574
|
)
|
Item 4.
|
Controls and Procedures
|
PART II - OTHER INFORMATION
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 6.
|
Exhibits
|
Exhibit No.
|
|
Description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
101
|
|
The following financial statements from the Company’s Quarterly Report on Form 10-Q for the fiscal period ended September 30, 2019, formatted in eXtensible Business Reporting Language: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Loss, (iv) Condensed Consolidated Statements of Cash Flows, (v) Condensed Consolidated Statements of Stockholders’ Equity and (vi) Notes to Unaudited Condensed Consolidated Financial Statements (furnished herewith).
|
|
|
*
|
Filed herewith
|
|
|
**
|
Furnished, not filed, herewith
|
|
|
|
|
|
|
|
FARMER BROS. CO.
|
||||
|
|
|
|||
|
By:
|
|
/s/ Deverl Maserang
|
||
|
|
|
Deverl Maserang
President and Chief Executive Officer (principal executive officer) |
||
|
|
|
November 7, 2019
|
||
|
|
|
|
||
|
By:
|
|
/s/ Scott Lyon
|
||
|
|
|
Scott Lyon
Corporate Controller
(interim principal financial and accounting officer)
|
||
|
|
|
November 7, 2019
|
1 Year Farmer Brothers Chart |
1 Month Farmer Brothers Chart |
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