The coffee roaster's earnings decline to $2.6million as revenue sinks to
$51.5 million. A new battle lies ahead.
By Jerry Hirsch
Times Staff Writer
February 18, 2004
Sales and profit continue to evaporate at commercial coffee roaster
Farmer Bros. Co.
Earnings fell for the ninth straight quarter, this time plunging 56% to $2.6
million, or $1.46 a share, in its fiscal second quarter ended Dec. 31 from
$5.9 million, or $3.24, in the same period a year earlier, the
Torrance-based company said Tuesday.
Revenue also slid again, dipping 5% to $51.5 million. Farmer Bros. hasn't
posted a year-to-year increase in quarterly sales for five consecutive
periods.
Farmer Bros. blamed its profit decline on a variety of problems. The company
has been saddled with millions of dollars in legal fees resulting from a
long-standing war between two branches of the founding family. The dispute
was settled in December when the company agreed to buy out the holdings of
one of the parties for $111 million, leaving the family of Chairman Roy F.
Farmer in control of the business.
Farmer Bros. also said higher prices for green, unroasted coffee and a
slowly recovering economy contributed to its worsening financial
performance.
The coffee roaster — one of California's largest publicly traded food
processors — faces another battle next week over its plan to reincorporate
in Delaware. Dissident shareholders object to the proposal, which they say
would make it harder for non-family stakeholders to push for changes.
Shareholders are scheduled to vote on the proposal at the company's annual
meeting Monday.
Farmer Bros.' performance was in stark contrast to that of California's
other large public coffee company, Emeryville-based Peet's Coffee &
Tea Inc. Peet's said last week that profit rose 22% to $2.7
million, or 20 cents a share, on higher sales of $34.5 million in the
quarter ended Dec. 28.
Peet's, which operates a chain of retail coffee stores and markets its own
brand of coffee, was helped by increased grocery chain penetration. Its
coffee was on the shelves of 2,700 stores by year end, compared with 1,000 a
year earlier.
Farmer Bros. primarily sells to restaurants and institutions such as
hospitals and food services. Before its earnings announcement, Farmer Bros.
shares rose $5.13 to $309.13 on Nasdaq.
As in previous quarters, Farmer Bros. declined to discuss its plans for
improving operations.
Copyright 2004 Los Angeles Times
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