Farmer Bros. Co. Reports First Quarter Results
Farmer Bros. Co. (NASDAQ:FARM) today reported a net loss of $9.9 million, or $0.66 per share, for its fiscal first quarter ended September 30, 2010, compared with net income of $2.2 million, or $0.15 per share, for its prior year fiscal first quarter.
Net sales for the first quarter of fiscal 2011 decreased $3.4 million, or 3%, to $108.7 million from $112.1 million in the first quarter of the prior fiscal year, primarily due to a modest reduction in the number of customers who purchased products and a slight decline in the amount of products sold to those customers who have been with the Company for more than one year.
Cost of goods sold in the first quarter of fiscal 2011 increased $7.0 million, or 12%, to $64.8 million, or 60% of sales, from $57.8 million, or 52% of sales, in the first quarter of the prior fiscal year, primarily due to higher total coffee brewing equipment and service costs, increased raw material costs and changes in the mix of our customers and the products we sell to them.
Gross profit in the first quarter of fiscal 2011 decreased $10.4 million, or 19%, to $43.9 million from $54.3 million in the first quarter of fiscal 2010. Gross margin decreased to 40% in the first quarter of fiscal 2011 from 48% during the same period in the prior fiscal year.Operating expenses in the first quarter of fiscal 2011 decreased $0.8 million, or 1%, to $56.0 million, or 51% of sales, from $56.8 million, or 51% of sales, in the comparable period of fiscal 2010. Total other income, net in the fiscal quarter ended September 30, 2010 was $2.5 million compared to $5.1 million in the fiscal quarter ended September 30, 2009. This was primarily due to lower net unrealized gains in our preferred stock portfolio during the fiscal quarter ended September 30, 2010 as compared to the fiscal quarter ended September 30, 2009. Interest expense of $0.4 million in the first fiscal quarter of 2011 compared to $0.1 million in the first fiscal quarter of 2010 also contributed to this decrease. Lower net unrealized gains in our preferred stock portfolio resulted in part from a reduced portfolio balance due to the sale of a portion of our preferred stock portfolio during the fiscal quarter ended September 30, 2010.
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