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Farmer Bros. Co. Reports Third Quarter Fiscal 2013 Results

Stocks in this article: FARM

Beginning April 1, 2013, the Company implemented procedures pursuant to the guidelines of Accounting Standards Codification 815, "Derivatives and Hedging," to enable it to account for certain coffee-related derivatives as accounting hedges. As a result, beginning in the fourth quarter of fiscal 2013, the Company anticipates a portion of the gains and losses from re-valuing the coffee-related derivative contracts to their market prices will be recorded in accumulated other comprehensive income on its balance sheet and recognized in cost of goods sold when the related coffee is received.

Chief Financial Officer Mark Nelson stated, "The net realized and unrealized losses from our derivative contracts incurred in the third quarter of fiscal 2013 significantly improved from the second quarter of fiscal 2013. Beginning in the fourth quarter of fiscal 2013, we believe the volatility in our quarterly results will reduce and comparability between reporting periods will improve as we implement procedures to account for certain coffee-related derivatives as accounting hedges."

Income tax benefit in the third quarter of fiscal 2013 was $56,000 compared to $0.6 million in the third quarter of the prior fiscal year.

As a result of the forgoing factors, net loss in the fiscal quarter ended March 31, 2013 was $(1.4) million, or $(0.09) per common share, as compared to net loss of $(5.5) million, or $(0.35) per common share, during the same period in the prior fiscal year. Third quarter fiscal 2013 EBITDAE increased $3.8 million, or 60%, to $10.1 million as compared to $6.4 million in the same period of the prior fiscal year.

Fiscal Nine Month Results

Net sales in the first nine months of fiscal 2013 increased $6.7 million, or 2%, to $381.2 million as compared to $374.5 million in the first nine months of fiscal 2012, primarily due to increases in sales of the Company's coffee and tea products.

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