TORRANCE, Calif.--(BUSINESS WIRE)--Sept. 14, 2004--Farmer
Brothers Co. (Nasdaq:FARM) today reported earnings for the Company's
fiscal year ended June 30, 2004 of $12.7 million or $0.81 per share,
compared with $23.6 million or $1.30 per share in the prior fiscal year
on a stock-split-adjusted basis. Fourth quarter earnings were $2.0
million or $0.11 per share compared with $5.8 million or $0.32 per share
for the prior year's fourth quarter on a split-adjusted basis.
Net sales of $193.6 million in fiscal year 2004 were 4
percent lower than the prior year's $201.6 million. In the fourth
quarter of 2004, however, the rate of decline was 1 percent, with net
sales of $47.3 million compared with $47.8 million in last year's fourth
quarter. The Company reported limited improvements in its largest
marketing area, California, but growth in its Mississippi Valley
operations. The Company cited reports in calendar 2004 of modest
improvements in nationwide restaurant trends, but noted that nationwide
data typically includes regional variations.
In response to the sales trends, management has
emphasized efforts to strengthen its sales teams, including
"back-to-the-basics" sales training programs. The Company noted that its
new generation of information technology systems, which already are at
work in the Company's administrative functions, soon will be applied to
the sales function.
The Company said the results also reflect costs
related to higher costs for employee benefits, including pensions and
the Employee Stock Ownership Plan (ESOP); higher legal expenses,
including costs associated with litigation and proxy matters; and the
costs of implementing the new information system. The Company also said
the average costs of green coffee throughout fiscal 2004 was 15 percent
higher than in fiscal 2003; although these were partly offset by price
increases, they contributed to lower gross profit margins in the second
half of fiscal 2004.
The Company reported 16.075 million shares outstanding
after its previously announced 10-for-one stock split in May 2004. The
Company is retroactively reflecting this stock split in this quarter's
report of prior-year comparisons of net income per share and weighted
average shares. The number of shares used in the calculation of earnings
per share reflects rules regarding the accounting of the unallocated
shares held by the ESOP.
The Company said the launch of its investor-relations
web site has been delayed by about a month as Company employees focus on
other key information technology projects.
Farmer Bros. Co. reports the following financial figures:
Three Months Ended June 30, 2004 June 30, 2003
Sales $47,344,000 $47,784,000
Net income $2,008,000 $5,783,000
Net income per share $0.11 $0.32
For the Year Ended June 30, 2004 June 30, 2003
Sales $193,589,000 $201,558,000
Cost of goods sold 71,405,000 70,662,000
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Gross profit 122,184,000 130,896,000
Selling expense 92,029,000 88,658,000
Administrative expenses 26,392,000 18,350,000
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Income from operations 3,763,000 23,888,000
Other income 12,219,000 13,683,000
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Income before taxes 15,982,000 37,571,000
Income taxes 3,295,000 13,942,000
--------------- -------------
Net income $12,687,000 $23,629,000
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Net income per share $0.81 $1.30
Weighted average
shares outstanding 15,576,450 18,145,910
Farmer Bros. Co. is an institutional coffee roaster
that sells a variety of coffee and allied products to the food service
industry. The Company's signature trucks and vans bearing the
"Consistently Good" logo are seen throughout Farmer Brothers' 28-state
service area. Farmer Brothers has paid a dividend for 51 consecutive
years, increased the dividend in each of the last seven consecutive
years, and its stock price has grown on a split-adjusted basis from
$1.80 a share in 1980.
Contact:
The Abernathy MacGregor Group
James Lucas, 213-630-6550