-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C/obm3IPldnfw9KhS5Nfwyx2CN42zjdFrrnVkrJa0uqL4ePe4r1NhW97KlMz/tHy xguweKeOXe9+ROlMv50n3Q== 0000034563-96-000002.txt : 19960216 0000034563-96-000002.hdr.sgml : 19960216 ACCESSION NUMBER: 0000034563-96-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960213 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FARMER BROTHERS CO CENTRAL INDEX KEY: 0000034563 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FOOD PREPARATIONS & KINDRED PRODUCTS [2090] IRS NUMBER: 950725980 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-01375 FILM NUMBER: 96517716 BUSINESS ADDRESS: STREET 1: 20333 S NORMANDIE AVE CITY: TORRANCE STATE: CA ZIP: 90502 BUSINESS PHONE: 3107875200 MAIL ADDRESS: STREET 1: 20333 SOUTH NORMANDIE AVENUE CITY: TORRANCE STATE: CA ZIP: 90502 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended December 31, 1995 Commission file number 0-1375 FARMER BROS. CO. California 95-0725980 State of Incorporation Federal ID Number 20333 S. Normandie Avenue, Torrance, California 90502 Registrant's Address Zip (310) 787-5200 Registrant's telephone number Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Number of shares of Common Stock outstanding: 1,926,414 as of December 31, 1995. PAGE 1 OF 9 PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Dollars in thousands, except per share data) FARMER BROS. CO. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) For the three months For the six months ended December 31, ended December 31, 1995 1994 1995 1994 Net sales $58,571 $62,598 $113,609 $116,780 Cost of goods sold 27,706 32,513 55,217 60,787 30,865 30,085 58,392 55,993 Selling expense 20,798 19,199 40,018 37,621 General and administrative expenses 2,060 2,863 3,953 5,835 22,858 22,062 43,971 43,456 Income from operations 8,007 8,023 14,421 12,537 Other income (expense): Dividend income 648 646 1,273 1,199 Interest income 1,722 990 2,930 1,948 Other 190 (381) 344 (134) 2,560 1,255 4,547 3,013 Income before taxes and cumulative effect of accounting change 10,567 9,278 18,968 15,550 Provision for income taxes 3,994 3,572 7,603 6,087 Net income per share $ 6,573 $ 5,706 $ 11,365 $ 9,463 Income per share: Net income per share $3.41 $2.96 $5.90 $4.91 The accompanying notes are an integral part of these financial statements. FARMER BROS. CO. CONSOLIDATED BALANCE SHEETS (Unaudited) December 31, June 30, 1995 1995 ASSETS Current assets: Cash and cash equivalents $ 20,120 8,321 Short term investments 81,746 80,530 Accounts and notes receivable, net 19,027 18,481 Inventories 35,384 36,761 Income tax receivable 1,265 Deferred income taxes 3,577 3,577 Prepaid expenses and other 991 871 Total current assets 160,845 149,806 Property, plant and equipment, net 34,410 33,213 Notes receivable 1,880 1,880 Long term investments, net 43,747 43,337 Other assets 16,277 15,887 Deferred taxes 217 217 Total assets $257,376 $244,340 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 10,460 $ 9,408 Accrued payroll expenses 5,202 4,711 Other 5,046 4,605 Total current liabilities 20,708 18,724 Accrued postretirement benefits 12,846 11,505 Commitments and contingencies Shareholders' equity: Common stock, $1.00 par value, authorized 3,000,000 shares; issued and outstanding 1,926,414 shares 1,926 1,926 Additional paid-in capital 568 568 Retained earnings 220,962 211,619 Investment valuation allowance 366 (2) Total shareholders' equity 223,822 214,111 Total liabilities and shareholders' equity $257,376 $244,340 The accompanying notes are an integral part of these financial statements. FARMER BROS. CO. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the six months ended December 31, 1995 1994 Cash flows from operating activities: Net Income $11,365 $ 9,463 Adjustments to reconcile net income to net cash provided by operating activities: Cumulative effect of accounting change Depreciation 2,177 2,631 Deferred income taxes 213 Other (131) (141) Net (gain) loss on investments (16) 461 Change in assets and liabilities: Accounts and notes receivable (609) (4,429) Inventories 1,377 (1,423) Income tax receivable 1,266 5,357 Prepaid expenses and other assets (520) (1,144) Accounts payable 1,053 1,339 Accrued payroll expenses and other liabilities 931 778 Other long term liabilities 882 780 Total adjustments 6,623 4,209 Net cash provided by operating activities $17,988 $13,672 The accompanying notes are an integral part of these financial statements. FARMER BROS. CO CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (Unaudited) For the six months ended December 31, 1995 1994 Net cash provided by operating activities: $17,988 $13,672 Cash flows from investing activities: Purchases of property, plant and equipment (3,439) (4,199) Proceeds from sales of property, plant and equipment 206 173 Purchases of investments (101,540) (78,153) Proceeds from sales of investments 100,545 69,599 Notes issued (20) Notes repaid 62 72 Net cash (used in) provided by investing activities (4,166) (12,528) Cash flows from financing activities: Dividends paid (2,023) (1,926) Net cash used in financing activities (2,023) (1,926) Net (decrease) in cash and cash equivalents 11,799 (782) Cash and cash equivalents at beginning of year 8,321 8,681 Cash and cash equivalents at end of quarter $20,120 $ 7,899 Supplemental disclosure of cash flow information: Income tax payments $ 5,601 $ 2,627 The accompanying notes are an integral part of these financial statements. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) A. Unaudited Financial Statements The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. It is Management's opinion that all adjustments of a normal recurring nature necessary for a fair statement of the results of operations for the interim periods have been made. B. Investments December 31, June 30, 1995 1995 Fair Fair Cost Value Cost Value (In thousands) Current Assets U.S. Government Obligations $76,606 $76,712 $80,608 $80,530 Corp. Debt Securities 5,034 5,034 - - $81,640 $81,746 $80,608 $80,530 Non-Current Assets U.S. Government Obligations $ 3,692 $ 3,878 $ 8,617 $ 8,610 Corp. Debt Securities 5,075 5,077 1,599 1,569 Preferred stocks 31,862 34,040 30,456 31,896 Liquid asset fund and other 1,224 752 1,262 1,262 $41,853 $43,747 $41,934 $43,337 The Company hedges interest rate risk in its portfolio of preferred stock. Deferred losses associated with the hedge are $1,862,000 and $1,329,000 at September 30 and June 30, 1995, respectively. The contractual maturities of debt securities classified as current and non- current available for sale are as follows: Fair Value 12/31/95 06/30/95 (In thousands) Within 1 year $81,746 $80,530 After 1 year through 5 years 7,454 8,610 After 5 years through 10 years 1,501 1,569 After 10 years - - $90,701 $90,709 C. Inventories Processed Unprocessed Total (In thousands) December 31, 1995 Coffee $ 3,884 $ 9,935 $13,819 Allied products 9,723 4,972 14,695 Coffee brewing equipment 1,508 5,361 6,869 $15,115 $20,268 $35,383 June 30, 1995 Coffee $ 3,093 $10,809 $13,902 Allied products 11,308 4,096 15,404 Coffee brewing equipment 2,120 5,335 7,455 $16,521 $20,240 $36,761 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Registrant's operations during the second quarter have returned to more normal operating margins. During the past two years the green coffee market exhibited a volatility that has not been seen for more than a decade. Prices of green coffee tripled, then fell off. During the most recent quarter green coffee costs fell below $1.00 per pound for the first time in more than two years, from intermediate prices of about $1.25 per pound. Now in February the cost of green coffee has again reached $1.25 per pound. As green coffee costs have come down, the Company has effected price decreases on roast coffee. The Company continues to find lethargic demand. Registrant's customers (hotels and restaurants) continue to feel the pinch of reduced spending. Consumers have reduced the number of times they eat out and business travel and entertainment has been reduced (as the result of corporate belt tightening, reduced tax deductions and high tech communications). Net sales for the second quarter of fiscal 1996 decreased 6% to $58,571,000 as compared to $62,598,000 in the same quarter of the prior year. Net sales for the first half of fiscal 1996 decreased 2.7% to $113,609,000 from $116,780,000 in the same period of fiscal 1995. Gross profit in the second quarter was $30,865,000, or 53% of sales, as compared to $27,527,000, or 50% of sales, in the first quarter of fiscal 1996 and $30,085,000, or 48% of sales, in the same quarter of fiscal 1995. Operating expenses reached $22,858,000 in the second quarter of fiscal 1996, as compared to $21,114,000 in the first quarter of fiscal 1996 and $22,062,000 in the second quarter of fiscal 1995. Income after taxes for the three months ended December 31, 1995, reached $6,573,000, or $3.41 per share, as compared to $4,791,000, or $2.49 per share, in the first quarter of fiscal 1996, and $5,706,000 or $2.96 per share in the second quarter of fiscal 1995. Net income for the first half of fiscal 1996 reached $11,365,000, or $5.90 per share, as compared to $9,463,000, or $4.91 per share, in the first six months of fiscal 1995. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, (CONTINUED) Quarterly Summary of Results (in thousands of dollars) 12/31/94 03/31/95 06/30/95 09/30/95 12/31/95 Net sales 62,598 59,514 58,368 55,038 58,571 Gross profit 30,085 26,818 30,088 27,527 30,865 Operating income 8,023 4,448 8,250 6,413 8,007 Net income 5,706 3,220 6,834 4,791 6,573 (as a percentage of sales) 12/31/94 03/31/95 06/30/95 09/30/94 12/31/95 Net sales 100.00 100.00 100.00 100.00 100.00 Gross profit 48.06 45.06 51.55 50.01 52.69 Operating income 12.82 7.47 14.13 11.65 13.67 Net income 9.12 5.41 11.71 8.70 11.22 (in dollars) 12/31/93 03/31/94 06/30/94 09/30/94 12/31/95 EPS 2.96 1.67 3.55 2.49 3.41 PART II OTHER INFORMATION Item 1. Legal proceedings. not applicable. Item 2. Changes in securities. none. Item 3. Defaults upon senior securities. none. Item 4. Submission of matters to a vote of security holders. The Annual Meeting of Shareholders of Farmer Bros. Co. was held on November 27, 1995. Holders of the Company's common stock were entitled to one vote per share of common stock held. Six directors were elected at the meeting, each to serve for the coming year and until any successors are elected and qualify. The following persons were elected as directors: Roy F. Farmer, Roy E. Farmer, Catherine E. Crowe, Lewis A. Coffman, Guenter W. Berger and John M. Anglin. There were 1,075,052 shares for the election of directors, 3,693 shares against and 3,720 shares abstaining. The proposal to appoint Coopers & Lybrand L.L.P.as the independent accountants for the Company for the year ended June 30, 1996 was approved with 1,531,031 shares in favor of the resolution, 153 shares against and 396 shares abstaining. PART II OTHER INFORMATION, (CONTINUED) Item 5. Other information. none. Item 6. Exhibits and reports on Form 8-K. (a) Exhibits. (2) Plan of acquisition, reorganization, arrangement, liquidation or succession not applicable. (4) Instruments defining the rights of security holders, including indentures. not applicable. (11) Statement re computation of per share earnings. not applicable. (15) Letter re unaudited interim financial information. not applicable. (18) Letter re change in accounting principles. not applicable. (19) Report furnished to security holders not applicable. (22) Published report regarding matters submitted to vote of security holders. not applicable. (23) Consents of experts and counsel. not applicable. (24) Power of attorney. not applicable. (27) Financial Data Schedule See attached Form EX-27. (99) Additional exhibits. not applicable. (b) Reports on Form 8-K none. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: February 13, 1996 FARMER BROS. CO. (Registrant) John E. Simmons John E. Simmons Treasurer and Chief Financial Officer EX-27 2
5 1000 3-MOS JUN-30-1996 DEC-31-1995 20120 81746 19027 545 35384 160845 34410 50315 257270 20708 0 1926 0 0 0 257376 58571 58571 27706 22858 0 0 0 10567 3994 6573 0 0 0 6573 3.41 3.41
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