Farmer Brothers Provides Business Update
Continuing to Serve Customers; Pivoting to Deliver for Customers on E-Commerce and Direct Ship
Taking Actions to Significantly Reduce Operating Expenses and Capital Expenditures
NORTHLAKE, Texas, March 30, 2020 (GLOBE NEWSWIRE) -- Farmer Bros. Co. (NASDAQ:FARM) (the “Company”) today provided an update on its business and the actions the Company is taking in response to the COVID-19 pandemic.
Deverl Maserang, President and Chief Executive Officer of Farmer Brothers, said, “We are all aware of the effects of COVID-19 on the global economy. As we navigate this unprecedented and rapidly evolving environment, we are making decisions that prioritize the health and safety of our team members and customers while taking actions to support the long-term sustainability of our business. It is always extremely difficult when we must take steps that impact our team, and we are incredibly appreciative and proud of how we have come together to support one another as we continue to focus on serving our customers. We believe the turnaround strategy and five key initiatives we have been executing are providing a strong foundation for Farmer Brothers to weather these turbulent times and emerge better and stronger than ever.”
Continuing Business Operations
Farmer Brothers continues to closely monitor the situation and has established additional procedures and safety measures designed to mitigate risk of exposure to the COVID-19 virus and potential impact on business operations. The Company has enacted business continuity initiatives and its supply chain is fully operational.
The Company has continued the rebalancing of volume across its manufacturing network, bringing additional production into its Northlake, Texas facility. Farmer Brothers is meeting ongoing demand from its Direct Ship customers. In addition, the Company has taken steps to accelerate its e-commerce initiatives and better support the surge in demand in the retail grocery store setting while many restaurant and retail locations serviced through its Direct Store Delivery business have experienced temporary government mandated closures or have limited service.
Maintaining Financial Flexibility
To position Farmer Brothers to navigate through this period of uncertainty, the Company has eliminated discretionary expenses, is closely managing inventory and has aggressively reduced capital expenditures, while prioritizing investments in e-commerce initiatives and serving Direct Ship customers’ needs.
In addition, Farmer Brothers has eliminated positions across the organization and is implementing a furlough program for approximately 50% of its remaining workforce. The furloughed team members may utilize all paid vacation and personal time and will continue to be eligible for health benefits. The Company has also instituted a temporary reduction in the base salary of corporate team members and suspended its 401(k) matching cash contributions. The Company’s executive leadership has taken a voluntary 15% reduction in base salary and Farmer Brothers’ Board of Directors will forego its compensation for the quarter.
Farmer Brothers will continue to assess the impact of COVID-19 and will continue to take appropriate actions to support the business and address the needs of its customers during and post COVID-19. The Company is working to evaluate any relief available through the CARES Act, including through industry associations, as well as any other efforts to support the food industry as a pillar of critical infrastructure.
About Farmer Bros. Co.
Founded in 1912, Farmer Bros. Co. is a national coffee roaster, wholesaler and distributor of coffee, tea and culinary products. The Company’s product lines include organic, Direct Trade and sustainably-produced coffee. With a robust line of coffee, hot and iced teas, cappuccino mixes, spices, and baking/biscuit mixes, the Company delivers extensive beverage planning services and culinary products to its U.S. based customers. The Company serves a wide variety of customers, from small independent restaurants and foodservice operators to large institutional buyers like restaurant and convenience store chains, hotels, casinos, healthcare facilities, and gourmet coffee houses, as well as grocery chains with private brand coffee and consumer branded coffee and tea products, and foodservice distributors.
Headquartered in Northlake, Texas, Farmer Bros. Co. generated net sales of $595.9 million in fiscal 2019. The Company’ s primary brands include Farmer Brothers®, Artisan Collection by Farmer Brothers™, Superior®, Metropolitan™, China Mist® and Boyds®.
