Farmer Bros. Co. reported financial results for its fourth quarter and fiscal year ended June 30, 2018.
Fourth Quarter Fiscal 2018 Highlights:
- Volume of green coffee processed and sold increased by 4.1 million pounds, reaching 27.4 million pounds, a 17.7% increase over the prior year period;
- Gross profit increased $9.8 million to $52.6 million and gross margin increased 320 basis points to 35.2% over the prior year period;
- Net income was $0.1 million compared to net loss of $(1.8) million in the prior year period; and
- Adjusted EBITDA was $14.0 million compared to $6.8 million in the prior year period.*
- Successfully added 4.1 million pounds of green coffee and $18.2 million in net sales related to the acquisition of Boyd Coffee Company (“Boyd”).
Fiscal 2018 Highlights:
- Volume of green coffee processed and sold increased by 11.9 million pounds, reaching 107.4 million pounds, a 12.5% increase over the prior year;
- Gross profit increased $20.2 million to $207.0 million and gross margin decreased 40 basis points to 34.1% in fiscal 2018;
- Net loss was $(18.3) million in fiscal 2018 compared to net income of $22.6 million in fiscal 2017, primarily driven by the sale of the Torrance facility in fiscal 2017; and
- Adjusted EBITDA was $47.6 million compared to $43.0 million in the prior year.*
(*Adjusted EBITDA, a non-GAAP financial measure, is reconciled to its corresponding GAAP measure at the end of this press release.)
“We had a solid fourth quarter and achieved Adjusted EBITDA results for the fiscal year in line with our expectations,” said Mike Keown, President and CEO. “As we closed out the year, our team continued to execute our strategy focused on leveraging the investments we have made in our roasting facilities, expanding our distribution network, adding new customers, and increasing business with existing customers. We ended fiscal 2018 having made terrific progress on the integration of the Boyd business, bringing a large portion of the production into our facilities and transitioning all Boyd DSD routes to our network. We added over 13 million pounds of green coffee to our business in fiscal 2018 from Boyd's - about 12% of our total volume for the year. In addition, we are continuing to convert new customers in our pipeline following the SQF certification of our Northlake, Texas facility earlier this year. As we look forward, we are excited about our ability to capitalize on growth opportunities in the dynamic coffee industry.”
Fourth Quarter and Fiscal 2018 Results:
Selected Financial Data
The selected financial data presented below under the captions “Income statement data,” “Operating data” and “Other data” summarizes certain performance measures for the three months and fiscal years ended June 30, 2018 and 2017 (unaudited). In the fourth quarter, the Company adopted changes in accounting principles converting from the last in, first out inventory method to the first in, first out inventory method and reclassifying and capitalizing certain freight, warehousing and other expenses as inventory costs. These changes were adopted retrospectively and all reported prior periods have been adjusted.