Farmer Bros. (FARM)2024-09-12 21:02Operations and Facilities - The company sold its Northlake, Texas production facility in fiscal 2023 and now utilizes the Portland, Oregon facility and third-party co-manufacturers for its Direct-Store-Delivery operations[10]. - The company operates a nationwide DSD network with 243 delivery routes and 104 branch warehouses as of June 30, 2024[26]. Workforce and Employment - The company employed approximately 1,003 employees as of June 30, 2024, with 206 employees subject to collective bargaining agreements expiring on or before September 30, 2027[17]. - The company has implemented a proactive approach to workplace safety, including regular safety training and fleet safety reviews[19]. Sustainability and Corporate Responsibility - The company continues to enhance its premium and specialty coffee and tea programs, focusing on sustainable product solutions and strategic partnerships[11]. - The Project D.I.R.E.C.T. program focuses on direct long-term partnerships with coffee growing communities, emphasizing sustainability and transparent pricing[14]. - The company is committed to working with suppliers who share its sustainability goals, requiring adherence to its Supplier Standards of Engagement[14]. - The company emphasizes charitable involvement as part of its corporate responsibility, supporting organizations like Feeding America and local food banks[15]. Financial Performance and Market Insights - The coffee "C" market near month price as of June 30, 2024, was 1.65 per pound on June 30, 2023, reflecting a significant increase[20]. - Fiscal 2024 coffee "C" market prices traded in a range of 2.54 per pound, averaging 13% above the historical average for the past five years[20]. - The company completed the sale of certain assets related to its direct ship and private label business for a purchase price of 23.3 million with a weighted average interest rate of 7.05%[120]. - A hypothetical 10% increase in coffee commodity prices could decrease net income by 11[121]. - The company serves a diverse customer base, with the top five customers accounting for approximately 3% of net sales from continuing operations in fiscal 2024[27]. Supply Chain and Pricing Strategy - The company is implementing IT applications to enhance supply chain optimization and flexibility, including an AI-backed pricing model for optimal pricing changes[11]. - The company maintains a large green coffee inventory and enters into forward commodity purchase agreements to mitigate price volatility[121]. - The company is exposed to commodity price risk due to fluctuations in green coffee prices, which cannot always be passed on to customers in a timely manner[121]. Product Offerings - The company has a robust line of products, including organic and Fair Trade Certified coffee, frozen liquid coffee, and culinary products[8].