Farmer Brothers Draws Down on Revolving Credit Facility to Enhance Financial Flexibility
April 29 2020 - 4:00PM
Farmer Bros. Co. (NASDAQ:FARM) (the “Company”) today announced that
it has drawn down $34.0 million on its $125.0 million revolving
credit facility, bringing the total amount outstanding to $122.0
million of revolving loans and $2.3 million of outstanding letters
of credit. This is a proactive measure to increase the Company’s
cash position and preserve financial flexibility.
Deverl Maserang, President and Chief Executive Officer of Farmer
Brothers, said, “We remain focused on taking actions to support the
long-term sustainability of our business as we continue to navigate
the evolving COVID-19 situation. In addition to the steps we have
already taken to eliminate discretionary expenses and reduce
capital expenditures, we are accessing additional funds through our
credit facility as a precautionary measure to maintain our
financial flexibility. This will also allow us to accelerate the
continued rebalancing of our manufacturing across our network and
reduce costs long-term. We are committed to serving our customers
as we prioritize the health and safety of our employees, and we
continue to believe that our turnaround strategy and five key
initiatives provide a strong foundation for Farmer Brothers to
overcome near-term challenges and emerge better and stronger.”
Subsequent to the borrowing, the Company had over $65.0 million
of cash and cash equivalents. In accordance with the terms of the
credit facility, the proceeds from the draw down may be used for
general corporate purposes. Borrowings under the credit facility
mature in November of 2023, and the Company may prepay amounts
borrowed any time without premium or penalty (subject to customary
break funding expenses, if any).
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 StatementsCertain 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 the COVID-19 pandemic, levels of consumer
confidence in national and local economic business conditions, the
duration and magnitude of the pandemic’s impact on unemployment
rates, the success of the Company’s strategy to recover from the
effects of the pandemic, the Company’s use of proceeds from the
borrowings under the credit facility, 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 Katcher Leigh
Parrish 212-355-4449
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