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Farmer
Bros. Reports Net Loss
By - 2/10/2005
Los Angeles Business Journal Staff
Farmer Bros. Co.
reported a net loss of more than $4 million (30 cents per share) for
its second fiscal quarter ended Dec. 31, compared with net income of
$2.6 million (15 cents) in the year-earlier period.
The results mark the 13th straight quarter
of year-over-year earnings declines.
The Torrance-based coffee roaster said the
second quarter losses reflect increases in world green coffee prices,
which resulted in a decrease in the value of green coffee futures and
options used by the company to hedge against a decline in commodity
prices.
The net realized and unrealized coffee
trading losses in the second quarter amounted to $8.8 million,
resulting in a net loss of $8.3 million, excluding dividend and
interest income.
The company’s second quarter revenues were
$51.2 million, compared with $51.5 million in the second quarter of
last year.
“We believe the losses from our
second-quarter hedging activities are likely to be recovered in part
as we sell our roast coffee in future periods at higher prices,” said
Interim Chief Executive Guenter Berger, in a statement.
Berger was appointed last month after the
suicide of chairman and chief executive Roy E. Farmer. Despite the
loss of Farmer, Berger said operations remain stable and Farmer Bros.
is attempting to improve the business and create shareholder value
through efforts to improve the effectiveness of its sales staff and
strengthen its infrastructure with new information systems.
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