Farmer Bros. (FARM)2023-05-09 16:00Financial Performance - Net sales for the three months ended March 31, 2023, increased by 124.2 million compared to 32.1 million, or 9.3%, to 346.2 million in the same period of 2022[167]. - The company reported a net loss of 4.0 million in the same period of 2022, reflecting an increase in loss of 182.7%[166]. - The company experienced a decline in gross profit of 35.6 million in the same period of 2022[166]. - Adjusted EBITDA for the three months ended March 31, 2023, was 5.0 million in the same period last year[184]. Gross Margin and Profitability - Gross margin for the three months ended March 31, 2023, was 23.1%, down from 29.8% in the same period of 2022, representing a decrease of 6.7 percentage points[162]. - Gross profit for the three months ended March 31, 2023, decreased to 35.6 million in the same period last year, with gross margin declining to 23.1% from 29.8%[169]. - EBITDA for the three months ended March 31, 2023, was 2.6 million in the same period of 2022[162]. Sales and Unit Performance - Coffee pounds sold decreased by 2,795 pounds, or 14.9%, to 16,002 pounds in the three months ended March 31, 2023, compared to 18,797 pounds in the same period of 2022[162]. - Unit sales decreased by 13.2% in the three months ended March 31, 2023, while average unit price increased by 19.9%, resulting in a net sales increase of 4.1%[168]. - Average unit price increased due to a higher mix of products sold via the DSD network compared to Direct ship, which has a lower average unit price[168]. Operating Expenses - Operating expenses as a percentage of sales improved to 30.8% for the three months ended March 31, 2023, from 33.1% in the same period of 2022, a favorable change of 2.3 percentage points[162]. - Operating expenses for the three months ended March 31, 2023, decreased by 38.3 million, representing 30.8% of net sales, down from 33.1% in the prior year[171]. - Operating expenses for the nine months ended March 31, 2023, decreased by 106.3 million, or 28.1% of net sales, down from 32.4% in the prior year[172]. Interest and Other Expenses - The company incurred interest expenses of 1.6 million in the same period of 2022[166]. - Total other expense for the three months ended March 31, 2023, increased to 12 thousand in the same period last year[173]. - Interest expense for the three months ended March 31, 2023, increased to 1.6 million in the prior year, primarily due to higher interest rates[174]. Capital Expenditures and Liquidity - Capital expenditures related to maintenance for the three months ended March 31, 2023, were 3.0 million in the same period of 2022[162]. - The company anticipates capital expenditures between 16.0 million for fiscal 2023, with 67.0 million on the Revolver Credit Facility and 16.4 million available as of March 31, 2023[200]. - The company had 0.2 million in restricted cash as of March 31, 2023[200]. Compliance and Future Outlook - The company is in compliance with all covenants under the Credit Facilities as of March 31, 2023, but anticipates potential noncompliance beginning June 30, 2023[195][196]. - A hypothetical 10% increase in coffee commodity prices could result in a 16.7 million for the nine months ended March 31, 2023, with an expectation of approximately 6.0 million for the quarter ending June 30, 2023[206].