FORT WORTH, Texas, Feb. 05, 2016 (GLOBE NEWSWIRE) -- Farmer Bros. Co. today reported financial results for the second quarter ended December 31, 2015.
Second Quarter Fiscal 2016 Highlights:
- Net sales decreased 1.7% to $142.3 million in the second quarter of fiscal 2016, as compared to the prior year period;
- Net income was $5.6 million, or $0.34 per diluted common share, in the second quarter of fiscal 2016, as compared to $2.9 million, or $0.18 per diluted common share in the prior year period;
- Non-GAAP net income and Non-GAAP net income per diluted common share in the second quarter of fiscal 2016 were $5.7 million and $0.35, respectively, as compared to $3.9 million and $0.24, respectively, in the prior year period; and
- Adjusted EBITDA and Adjusted EBITDA Margin in the second quarter of fiscal 2016 were $12.8 million and 9.0%, respectively, as compared to $12.1 million and 8.4%, respectively, in the prior year period.
Second Quarter Fiscal 2016 Results:
Net sales in the second quarter of fiscal 2016 decreased $2.5 million, or 1.7%, to $142.3 million from $144.8 million in the second quarter of the prior fiscal year primarily due to decreases in sales of our coffee, tea and culinary products, resulting primarily from the effects of pricing and product mix changes offset, in part, by an increase in unit sales of coffee (roast & ground). In the second quarter of fiscal 2016, green coffee processed and sold was approximately 23.2 million pounds, compared to approximately 23.1 million pounds in the second quarter of fiscal 2015.
Gross profit in the second quarter of fiscal 2016 decreased $0.2 million, or 0.4%, to $52.9 million as compared to $53.1 million in the second quarter of fiscal 2015. Gross margin increased 50 basis points to 37.2% in the second quarter of fiscal 2016 from 36.7% in the second quarter of fiscal 2015. The decrease in gross profit was primarily due to the decrease in net sales. The increase in gross margin was primarily due to supply chain efficiencies realized primarily through the consolidation of our former Torrance coffee production volumes into our Houston manufacturing facility, partially offset by the decrease in net sales. Gross profit in the second quarter of fiscal 2016 and 2015, respectively, also included the beneficial effect of the liquidation of LIFO inventory quantities in the amount of $0.3 million and $2.2 million.
Michael H. Keown, President and CEO said, “Overall, I am pleased with the continued progress we are making across the business, and the transition to Northlake, Texas. He added, “Increases in supply chain efficiencies are paying off in enhanced profitability. We executed well during a period of high throughput allowing us to maintain our high quality and customer service standards while ramping up several new customers during the quarter.”
Operating expenses in the second quarter of fiscal 2016 decreased $2.1 million, or 4.2%, to $47.5 million, as compared to $49.6 million, in the second quarter of the prior fiscal year primarily due to $5.1 million in net gain from the sale of the spice assets, $1.7 million decrease in selling expenses and $0.4 million decrease in general and administrative expenses, partially offset by $5.2 million in restructuring and other transition expenses relating to the Company's corporate relocation plan. The decrease in selling expenses in the second quarter of fiscal 2016 was primarily due to lower fuel and freight expenses and lower depreciation expense as compared to the same period in the prior fiscal year. The decrease in the general and administrative expenses in the second quarter of fiscal 2016 was primarily due to lower accrual for anticipated bonus payments to eligible employees and consulting expense, partially offset by an increase in retiree medical costs, as compared to the same period in the prior fiscal year.
Income from operations in the second quarter of fiscal 2016 was $5.4 million as compared to $3.5 million in the second quarter of the prior fiscal year, primarily due to the $5.1 million net gain from the sale of spice assets, offset by restructuring and other transition expenses of $5.2 million incurred in connection with the Company's corporate relocation plan.
Total other income in the second quarter of fiscal 2016 was $0.6 million, primarily due to lower interest expense of $0.1 million and net gains on coffee-related derivative instruments of $32,000, as compared to total other expense of $0.4 million in the second quarter of fiscal 2015 which included higher interest expense of $0.2 million and net losses on coffee-related derivative instruments of $0.9 million.
As a result, net income in the second quarter of fiscal 2016 was $5.6 million, or $0.34 per diluted common share, compared to net income of $2.9 million, or $0.18 per diluted common share, in the second quarter of the prior fiscal year. Full report.
