Farmer Brothers Reports First Quarter Fiscal 2024 Financial Results

By: Alexis Rubinstein, Managing Editor - Coffee Network

Tue, 14 Nov 2023, 15:13

Alexis Rubinstein

Managing Editor

CoffeeNetwork (New York) - Farmer Brothers (NASDAQ: FARM) today reported its first quarter fiscal 2024 financial results for the period ended Sept. 30, 2023. The company filed its 10-Q and published its quarterly shareholder letter.

First quarter fiscal 2024 net sales were $81.9 million, which increased slightly on a year[1]over-year basis compared to $79.8 million in the first quarter of fiscal 2023. Overall, net 3 sales were positively impacted by higher pricing compared to prior periods, but were offset by transitional costs and a slight decrease in coffee volume.

Gross profit during the quarter increased to $30.8 million compared to $27.0 million for the first quarter of fiscal 2023. Gross margin increased 380 basis points on a year-over[1]year basis to 37.6%. The increase in gross profit was primarily due to improved pricing and a decrease in underlying costs.

Operating expenses were $32.9 million in the first quarter of fiscal 2024, up from $27.8 million in the prior year period. This increase was due to a $3.6 million increase in general and administrative (G&A) expenses, a $400,000 decrease in net gains from the sale of branch properties and other assets and a $1.1 million increase in selling expenses. The increase in selling expenses during the first quarter was primarily due to additional spend on vehicles, fleet and freight. The increase in G&A expenses was primarily due to severance costs of $2.3 million related to executive management transitions and the non-recurrence of a $1.9 million gain related to the Boyd settlement in the prior year.

Net loss from continuing operations was $1.3 million compared to a loss of $1.6 million in the first quarter of 2023.

For the three months ended Sept. 30, 2023, our capital expenditures were $3.5 million compared to $2.8 million in the prior year period. In fiscal 2024, we anticipate paying between $16 and $18 million in capital expenditures. We expect to finance these expenditures through cash flow from operations and borrowings under our credit facility.

Adjusted EBITDA approached breakeven for the fiscal first quarter at a loss of $452,000 compared to a loss of $3.9 million on a year-over-year basis.

Turning to the balance sheet, as of Sept. 30, 2023, we had $4 million of unrestricted cash and cash equivalents. As of Sept. 30, 2023, we had outstanding borrowings of $23.3 million, utilized $4.6 million of the letters of credit sub-limit and had $25.4 million of availability under our credit facility. We believe we are adequately capitalized to finance our operations in fiscal 2024.

Alexis Rubinstein

Coffee

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