The Daily Breeze - August 25, 2007 article

Farmer Bros. Co., the South Bay-based institutional coffee roaster, named a new CEO and filled two other key positions on Friday, moves that represent a change in the company's old guard.

In December, Roger "Rocky" Laverty, the company's current chief operating officer, will become CEO of the firm located in Harbor Gateway near Torrance.

Laverty, 60, will succeed Guenter Berger, who will continue as chairman. Berger has worked at Farmer Bros. in various positions for the past 47 years.

In addition, Laverty, a Manhattan Beach resident, was elected as a director of the company's board. The board also elected James J. McGarry, 53, an El Segundo attorney and Redondo Beach resident, as an independent director.

Effective immediately, Laverty and McGarry fill two board vacancies created by the retirements of two veteran Farmer Bros. officials.

"Rocky has the skills and experience - and the solid grounding in this business - that will help him drive Farmer Bros. forward," Berger, 70, said in a news release.

Berger added: "We are pleased that Jim McGarry will bring his independent voice and broad business experience as the board navigates a period of quickening change."

The company declined an interview request for this article.

Farmer Bros. roasts coffee beans that it sells to institutional customers such as restaurants, hotels and convenience stores.

The public company has been struggling for market share in an increasingly competitive coffee industry. In addition, the firm's stock price has performed poorly compared with highs of a few years ago.

"We'll have to see if the management changes provide a foundation for either renewed competitive vitality or for a sale to someone who can help the business grow," said Gary Lutin, a New York investment banker who runs an Internet forum for mostly dissident investors. The forum, which has been relatively inactive for more than a year, has pushed for a sale of the closely held coffee firm.

In the company release, Laverty, who was named chief operating officer last year, did not give specifics about his plans for the coffee maker, but noted that change "is accelerating" as the firm absorbs a newly acquired specialty-coffee roaster and prepares for possibly more such purchases.

"Our April 27, 2007, acquisition of Coffee Bean Intl. was the company's first in nearly 30 years, and given the right opportunity, it surely won't be our last," Laverty said in the release.

Before joining Farmer Bros. last year, Laverty served two years as president and CEO of specialty coffee roaster Diedrich Coffee. He also spent 19 years with retailer Smart & Final in various positions including CEO, COO and general counsel.

Until a few years ago, Farmer Bros. had been led by members of the founding Farmer family, which has a controlling stake in the firm. However, in 2005, Farmer Bros. was rocked by the suicide of Roy E. Farmer, who had succeeded his father the previous year as chairman and CEO.

On Friday, Farmer Bros. also announced an increase in its dividend to investors for the 11th consecutive year.

The Farmer Bros. stock price rose 87cents, or 3.93 percent, on Friday to close at $22.99 on Nasdaq.

muhammed.el-hasan@dailybreeze.com

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