Farmer Bros. Co. (NASDAQ:FARM) (the “Company”) today provided an
update on its business and the actions the Company is taking in
response to the COVID-19 pandemic.
Deverl Maserang, President and Chief Executive Officer of Farmer
Brothers, said, “We are all aware of the effects of COVID-19 on the
global economy. As we navigate this unprecedented and rapidly
evolving environment, we are making decisions that prioritize the
health and safety of our team members and customers while taking
actions to support the long-term sustainability of our business. It
is always extremely difficult when we must take steps that impact
our team, and we are incredibly appreciative and proud of how we
have come together to support one another as we continue to focus
on serving our customers. We believe the turnaround strategy and
five key initiatives we have been executing are providing a strong
foundation for Farmer Brothers to weather these turbulent times and
emerge better and stronger than ever.”
Continuing Business Operations
Farmer Brothers continues to closely monitor the situation and
has established additional procedures and safety measures designed
to mitigate risk of exposure to the COVID-19 virus and potential
impact on business operations. The Company has enacted business
continuity initiatives and its supply chain is fully operational.
The Company has continued the rebalancing of volume across its
manufacturing network, bringing additional production into its
Northlake, Texas facility. Farmer Brothers is meeting ongoing
demand from its Direct Ship customers. In addition, the Company has
taken steps to accelerate its e-commerce initiatives and better
support the surge in demand in the retail grocery store setting
while many restaurant and retail locations serviced through its
Direct Store Delivery business have experienced temporary
government mandated closures or have limited service.
Maintaining Financial Flexibility
To position Farmer Brothers to navigate through this period of
uncertainty, the Company has eliminated discretionary expenses, is
closely managing inventory and has aggressively reduced capital
expenditures, while prioritizing investments in e-commerce
initiatives and serving Direct Ship customers’ needs.
In addition, Farmer Brothers has eliminated positions across the
organization and is implementing a furlough program for
approximately 50% of its remaining workforce. The furloughed team
members may utilize all paid vacation and personal time and will
continue to be eligible for health benefits. The Company has also
instituted a temporary reduction in the base salary of corporate
team members and suspended its 401(k) matching cash contributions.
The Company’s executive leadership has taken a voluntary 15%
reduction in base salary and Farmer Brothers’ Board of Directors
will forego its compensation for the quarter.
Farmer Brothers will continue to assess the impact of COVID-19
and will continue to take appropriate actions to support the
business and address the needs of its customers during and post
COVID-19. The Company is working to evaluate any relief available
through the CARES Act, including through industry associations, as
well as any other efforts to support the food industry as a pillar
of critical infrastructure.
About Farmer Bros. Co.
Founded in 1912, Farmer Bros. Co. is a national coffee roaster,
wholesaler and distributor of coffee, tea and culinary products.
The Company’s product lines include organic, Direct Trade and
sustainably-produced coffee. With a robust line of coffee, hot and
iced teas, cappuccino mixes, spices, and baking/biscuit mixes, the
Company delivers extensive beverage planning services and culinary
products to its U.S. based customers. The Company serves a wide
variety of customers, from small independent restaurants and
foodservice operators to large institutional buyers like restaurant
and convenience store chains, hotels, casinos, healthcare
facilities, and gourmet coffee houses, as well as grocery chains
with private brand coffee and consumer branded coffee and tea
products, and foodservice distributors.
Headquartered in Northlake, Texas, Farmer Bros. Co. generated
net sales of $595.9 million in fiscal 2019. The Company’ s primary
brands include Farmer Brothers®, Artisan Collection by Farmer
Brothers™, Superior®, Metropolitan™, China Mist® and Boyds®.
Forward-Looking Statements
Certain statements in this press release constitute
“forward-looking statements.” When used in this communication, the
words “will,” “expects,” “anticipates,” “estimates” and “believes,”
and similar expressions and statements that are made in the future
tense or refer to future events or developments, are intended to
identify such forward-looking statements. Such forward-looking
statements are subject to risks, uncertainties and other factors
that could cause the actual results, performance or achievements to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Factors that could cause actual results to differ
materially from those in forward looking statements include, but
are not limited to, the extent and duration of the disruption to
our business and our customers related to COVID-19. the timing and
success of our turnaround strategy, five key initiatives and DSD
restructuring plan, the impact of capital improvement projects, the
adequacy and availability of capital resources to fund the
Company’s existing and planned business operations and the
Company’s capital expenditure requirements, the relative
effectiveness of compensation-based employee incentives in causing
improvements in Company performance, the capacity to meet the
demands of our large national account customers, the extent of
execution of plans for the growth of Company business and
achievement of financial metrics related to those plans, the
ability of the Company to retain and/or attract qualified
employees, the success of the Company’s adaptation to technology
and new commerce channels, the effect of the capital markets as
well as other external factors on stockholder value, fluctuations
in availability and cost of green coffee, competition,
organizational changes, the effectiveness of our hedging strategies
in reducing price risk, changes in consumer preferences, our
ability to provide sustainability in ways that do not materially
impair profitability, changes in the strength and stability of the
economy, business conditions in the coffee industry and food
industry in general, our continued success in attracting new
customers, variances from budgeted sales mix and growth rates,
weather and special or unusual events, as well as other risks
described in this report and other factors described from time to
time in our filings with the SEC.
These statements are based on management’s current expectations,
assumptions, estimates and observations of future events and
include any statements that do not directly relate to any
historical or current fact; actual results may differ materially
due in part to the risk factors set forth in our most recent
annual, periodic and current reports filed with the SEC. Undue
reliance should not be placed on the forward-looking statements in
this communication, which are based on information available to the
Company on the date hereof, and the Company assumes no obligation
to update such statements.
Contact: Joele Frank, Wilkinson Brimmer
KatcherLeigh Parrish212-355-4449
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