Farmer Bros. (US:FARM)2026-02-13 21:59Sales Performance - Net sales for the three months ended December 31, 2025 decreased by $1.1 million, or 1.2%, to $88.9 million compared to $90.0 million in the same period of 2024[110]. - Net sales for the six months ended December 31, 2025 decreased by $4.6 million, or 2.6%, to $170.5 million from $175.1 million in the same period of 2024[111]. - Unit sales decreased by 9.6%, while average unit price increased by 9.3% in the three months ended December 31, 2025, contributing to the overall decrease in net sales[112]. - Unit sales decreased by 10.2%, while average unit price increased by 8.5%, leading to a net sales decrease of 2.6% for the six months ended December 31, 2025[113]. Profitability - Gross margin for the three months ended December 31, 2025 was 36.3%, down from 43.1% in the same period of 2024, representing a decline of 6.8 percentage points[105]. - Gross profit for the three months ended December 31, 2025, decreased to $32.3 million, down from $38.8 million in the same period of 2024, resulting in a gross margin decrease to 36.3% from 43.1%[114][115]. - For the six months ended December 31, 2025, gross profit decreased to $64.7 million from $76.2 million, with gross margin declining to 37.9% from 43.5%[116]. - Net loss for the three months ended December 31, 2025 was $4.9 million, compared to a net income of $0.2 million in the same period of 2024, marking a significant decline of 2,417.1%[105]. - EBITDA for the three months ended December 31, 2025 was $(1.7) million, a decrease of 146.4% compared to $3.7 million in the same period of 2024[105]. - Adjusted EBITDA for the three months ended December 31, 2025, was $0.5 million, with an Adjusted EBITDA margin of 0.5%, compared to $5.9 million and 6.6% in the prior year[128]. Operating Expenses - Operating expenses as a percentage of sales for the three months ended December 31, 2025 were 40.9%, an improvement of 1.1 percentage points compared to 42.0% in the same period of 2024[105]. - Operating expenses for the three months ended December 31, 2025, decreased by $1.4 million to $36.4 million, representing 40.9% of net sales, down from 42.0% in the prior year[117]. - For the six months ended December 31, 2025, operating expenses decreased by $5.9 million to $72.0 million, or 42.2% of net sales, compared to 44.5% in the prior year[118]. - The company reported a significant increase in general and administrative expenses, which rose by 7.6% to $8.8 million for the three months ended December 31, 2025 compared to $9.5 million in the same period of 2024[109]. Cash Flow and Financing - Net cash used in operating activities for the six months ended December 31, 2025 was $5.8 million, a decrease of $10.8 million compared to net cash provided of $5.0 million in the same period of 2024, primarily due to increased green coffee commodity costs[141]. - Net cash used in investing activities during the six months ended December 31, 2025 was $3.7 million, a decrease from $5.2 million in the same period of 2024, attributed to a reduction in capital expenditures[142]. - Net cash provided by financing activities for the six months ended December 31, 2025 was $6.9 million, compared to a net cash used of $0.1 million in the same period of 2024, mainly due to net borrowing proceeds of $7.0 million under the Credit Facility[143]. - The company had outstanding borrowings on the Revolver Credit Facility of $21.3 million as of December 31, 2025[137]. - As of December 31, 2025, the company had $4.2 million in unrestricted cash and cash equivalents, and $0.2 million in restricted cash, with $24.6 million available for borrowing under its Revolver Credit Facility[139]. Capital Expenditures - Total capital expenditures for the three months ended December 31, 2025 were $1.8 million, a decrease of 9.9% from $2.0 million in the same period of 2024[105]. - Capital expenditures for the six months ended December 31, 2025 were $3.8 million, down from $5.4 million in 2024, with anticipated expenditures of $9.0 million to $11.0 million for fiscal 2026[144]. - The company expects to finance capital expenditures through cash flows from operations and borrowings under its Credit Facility[144]. Commitments and Future Outlook - The company had committed to purchase green coffee inventory totaling $39.6 million under fixed-price contracts and $12.4 million in inventory and other purchases under non-cancelable purchase orders as of December 31, 2025[146]. - Total operating and finance lease payment commitments amounted to $34.5 million as of December 31, 2025[147]. - The company anticipates increased commodity cost volatility and economic uncertainty due to macroeconomic trends and tariffs, which may negatively impact future net sales and profitability[134]. - The company operates a production and distribution facility in Portland, Oregon, with a nationwide DSD network of over 200 delivery routes as of December 31, 2025[133]. - There were no off-balance sheet arrangements as of December 31, 2025[150].