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Farmer Bros. Co. Reports Second Quarter Results

Stocks in this article: FARM

Second Quarter Fiscal 2013 Operating Income Improved $6.1 million Second Quarter Fiscal 2013 EBITDAE Increased 15% to $10.4 million

TORRANCE, Calif., Feb. 6, 2013 (GLOBE NEWSWIRE) -- Farmer Bros. Co. (Nasdaq:FARM), a manufacturer, wholesaler and distributor of coffee, tea and culinary products, today reported financial results for the three and six months ended December 31, 2012.

Fiscal Second Quarter Results:

Net sales for the second quarter of fiscal 2013 increased $3.9 million, or 3%, to $135.7 million from $131.8 million in the second quarter of the prior fiscal year. The increase in net sales was primarily due to increases in sales of coffee and tea products.

Gross profit in the second quarter of fiscal 2013 increased $5.8 million, or 13%, to $50.4 million, as compared to $44.5 million during the second quarter of the prior fiscal year. Gross profit in the second quarter of fiscal 2013 includes the expected beneficial effect of the liquidation of LIFO inventory quantities in the amount of $0.5 million as compared to $3.8 million in the same period in the prior fiscal year. Gross margin increased to 37% in the second quarter of fiscal 2013 from 34% in the second quarter of the prior fiscal year. This gross margin increase is primarily due to a 31% lower average cost of green coffee beans purchased compared to the same period in the prior fiscal year.

Operating expenses in the second quarter of fiscal 2013 decreased $0.3 million, or 0.5%, to $49.9 million, or 37% of sales, from $50.2 million, or 38% of sales, in the second quarter of the prior fiscal year. Operating expenses decreased primarily due to the absence of pension withdrawal expense, partially offset by higher payroll and related expenses resulting from the Company's investments in additional sales and marketing personnel, higher startup costs related to the increase in national customers, higher expenses related to sales training and losses in one of the Company's distribution centers affected by hurricane Sandy. Operating expenses in the second quarter of the prior fiscal year included $4.3 million in pension withdrawal expense related to a multiemployer pension plan.

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