Farmer Bros. (US:FARM)2025-05-08 20:21Financial & Operational Highlights Q3 FY2025 highlights include $82.1 million net sales, a $5 million net loss, $1.7 million positive adjusted EBITDA, improved gross margin, and completed brand initiatives Q3 FY2025 Key Financial Metrics (vs. Q3 FY2024) | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $82.1 million | $85.4 million | -3.9% | | Gross Profit | $34.5 million | $34.2 million | +0.9% | | Gross Margin | 42.1% | 40.1% | +200 bps | | Net Loss | $5.0 million | $0.7 million | Increased Loss | | Adjusted EBITDA | $1.7 million | $0.3 million | +$1.4 million | - Key strategic initiatives completed during the quarter include the launch of the new specialty coffee brand, Sum>One Coffee Roasters, and the completion of the company's brand pyramid and coffee SKU rationalization initiative, creating a tiered go-to-market strategy48 - As of March 31, 2025, the company had $4.1 million in unrestricted cash, $23.3 million in outstanding borrowings, and $22.1 million of additional borrowing capacity under its credit facility5 Consolidated Financial Statements This section presents unaudited consolidated financial statements for Q3 FY2025, covering Statements of Operations, Balance Sheets, and Cash Flows Consolidated Statements of Operations (Income Statement) Q3 FY2025 net sales decreased 3.9% to $82.1 million, resulting in a $5.0 million net loss, largely due to a $2.4 million net loss on asset disposals Q3 FY2025 Income Statement Highlights (in thousands) | Account | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net sales | $82,054 | $85,358 | | Gross profit | $34,504 | $34,231 | | (Loss) income from operations | $(3,563) | $(468) | | Net (loss) income | $(4,976) | $(682) | | Net (loss) income per share | $(0.23) | $(0.03) | Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $163.2 million, total liabilities to $125.9 million, and stockholders' equity to $37.3 million Balance Sheet Summary (in thousands) | Account | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,054 | $5,830 | | Total current assets | $84,560 | $102,981 | | Total assets | $163,159 | $185,213 | | Total current liabilities | $64,943 | $77,033 | | Total liabilities | $125,895 | $139,664 | | Total stockholders' equity | $37,264 | $45,549 | Consolidated Statements of Cash Flows For the nine months ended March 31, 2025, operating activities generated $6.4 million cash, investing activities used $8.0 million, resulting in a $1.8 million decrease in cash balance Cash Flow Summary for Nine Months Ended March 31 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $6,352 | $(13,152) | | Net cash (used in) provided by investing activities | $(7,956) | $13,366 | | Net cash (used in) provided by financing activities | $(169) | $66 | | Net (decrease) increase in cash | $(1,773) | $280 | Non-GAAP Financial Measures This section details the company's use of non-GAAP financial measures, EBITDA and Adjusted EBITDA, providing reconciliations to net (loss) income for performance analysis - The company uses non-GAAP measures like EBITDA and Adjusted EBITDA to facilitate operating performance comparisons by isolating the effects of items like capital structure, tax positions, and non-recurring costs2425 - Adjusted EBITDA excludes items such as income tax, interest, depreciation, share-based compensation, net gains/losses on asset disposals, loss on sale of business, and severance costs27 Reconciliation to EBITDA Q3 FY2025 EBITDA was a loss of $1.3 million, a significant downturn from $2.8 million in Q3 FY2024, with EBITDA margin shifting from 3.3% to -1.6% Reconciliation of Net (Loss) Income to EBITDA (in thousands) | Account | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net (loss) income | $(4,976) | $(682) | | Income tax expense | $187 | $— | | Interest expense | $655 | $635 | | Depreciation and amortization | $2,838 | $2,883 | | EBITDA | $(1,296) | $2,836 | Reconciliation to Adjusted EBITDA Adjusted EBITDA significantly improved to $1.7 million in Q3 FY2025 from $0.3 million in Q3 FY2024, expanding the margin to 2.1% from 0.3% Reconciliation of Net (Loss) Income to Adjusted EBITDA (in thousands) | Account | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net (loss) income | $(4,976) | $(682) | | Adjustments (Taxes, Interest, D&A, etc.) | $6,712 | $953 | | Adjusted EBITDA | $1,736 | $271 |