Farmer Bros.: Reports Q3 Fiscal 2021 Financial Results

Northlake / TX. (fbc) Farmer Bros. Company reported financial results for its third fiscal quarter ended March 31, 2021. Third quarter fiscal 2021 highlights:

Business Update

  • Successfully completed key initiatives within its supply chain optimization strategy, including:
    • Doubled capacity at the Northlake, Texas facility;
    • Ended production at the aged Houston, Texas facility; and
    • Opened a new West Coast distribution facility in Rialto, California;
  • Negotiated new credit facilities, effectively increasing borrowing capacity and flexibility while lowering overall borrowing cost;
  • Achieved notable improvement in March 2021 DSD sales compared to January and February 2021 months; and
  • Seeing strongest DSD sales levels since the start of the pandemic with average weekly DSD sales in the month of April 2021 down approximately 27 percent compared to pre-Covid levels.

Financial Results

  • Net sales were USD 93.2 million, a decrease of USD 36.0 million, or 27.9 percent, from the prior year period, primarily due to the impact of Covid-19;
  • Gross margin decreased to 25.6 percent from 29.4 percent in the prior year period;
    • Continued improvement trend in gross margin each quarter of fiscal 2021;
  • Net loss was USD 13.7 million compared to net loss of USD 39.8 million in the prior year period; and
  • Adjusted Ebitda was a loss of USD 0.8 million compared to income of USD 6.6 million in the prior year period.
  • As of March 31, 2021, total debt outstanding was USD 88.0 million and cash and cash equivalents was USD 8.5 million compared to USD 122.0 million and USD 60.0 million, respectively, as of June 30, 2020.

Deverl Maserang, President and CEO, commented, «As the nation continues to recover from the pandemic and, more recently, severe weather throughout the Central U.S., relative performance in our more impacted DSD business continues to show improvements from pre-Covid levels. At the same time, we are seeing early benefits from our focus on our five key turnaround strategies, particularly in the form of considerable and scalable network efficiencies that will be seen more fully in our results as sales continue to improve. March results were the best we’ve seen since the pandemic began, and we expect trends will continue to rebound as certain markets begin to more fully open and as certain parts of our business, such as healthcare and lodging, show continued recovery. Additionally, our new credit facility that we executed in April will give us improved borrowing costs and greater ability to leverage our collateral and operational plans, while allowing us to focus on accelerating growth and innovation throughout the organization.»