-----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, ThjHwgQHuu6XcXQQuKWzIzA0Wid2HCevEQXw7KMUZxncqoZ25iQrjyYxq/ltmdW+ oA/sV1S8WVyJHN1oFZbdpQ== 0000034563-96-000006.txt : 19960517 0000034563-96-000006.hdr.sgml : 19960517 ACCESSION NUMBER: 0000034563-96-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 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: 96564809 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 March 31, 1996 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 March 31, 1996. 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 nine months ended March 31, ended March 31, 1996 1995 1996 1995 Net sales $56,774 $59,514 $170,383 $176,294 Cost of goods sold 25,889 32,696 81,106 93,483 30,885 26,818 89,277 82,811 Selling expense 20,972 18,958 60,990 56,578 General and administrative expenses 1,974 3,412 5,927 9,248 22,946 22,370 66,917 65,826 Income from operations 7,939 4,448 22,360 16,985 Other income (expense): Dividend income 619 638 1,892 1,836 Interest income 1,656 1,154 4,586 3,102 Other 463 (857) 807 (991) 2,738 935 7,285 3,947 Income before taxes 10,677 5,383 29,645 20,932 Provision for income taxes 4,286 2,163 11,889 8,249 Net income per share $ 6,391 $ 3,220 $ 17,756 $ 12,683 Income per share: Net income per share $3.32 $1.67 $9.22 $6.58 The accompanying notes are an integral part of these financial statements. FARMER BROS. CO. CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, June 30, 1996 1995 ASSETS Current assets: Cash and cash equivalents $ 12,035 $ 8,321 Short term investments 94,139 80,530 Accounts and notes receivable, net 19,734 18,481 Inventories 34,283 36,761 Income tax receivable - 1,265 Deferred income taxes 3,577 3,577 Prepaid expenses and other 1,313 871 Total current assets 165,081 149,806 Property, plant and equipment, net 34,125 33,213 Notes receivable 1,880 1,880 Long term investments, net 44,118 43,337 Other assets 16,472 15,887 Deferred taxes 217 217 Total assets $261,893 $244,340 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 8,535 $ 9,408 Accrued payroll expenses 5,861 4,711 Other 5,980 4,605 Total current liabilities 20,376 18,724 Accrued postretirement benefits 12,506 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 226,293 211,619 Investment valuation allowance 224 (2) Total shareholders' equity 229,011 214,111 Total liabilities and shareholders' equity $261,893 $244,340 The accompanying notes are an integral part of these financial statements. FARMER BROS. CO. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the nine months ended March 31, 1996 1995 Cash flows from operating activities: Net Income $ 17,756 $ 12,683 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 3,518 3,922 Deferred income taxes (472) - Other (164) (143) Net (gain) loss on investments (351) 1,430 Change in assets and liabilities: Accounts and notes receivable (1,331) (2,667) Inventories 2,478 (1,568) Income tax receivable 1,265 5,357 Prepaid expenses and other assets (1,041) (1,951) Accounts payable (873) 3,121 Accrued payroll expenses and other liabilities 2,525 (750) Other long term liabilities 1,323 1,292 Total adjustments 6,877 8,043 Net cash provided by operating activities $ 24,633 $ 20,726 The accompanying notes are an integral part of these financial statements. FARMER BROS. CO CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (Unaudited) For the nine months ended March 31, 1996 1995 Net cash provided by operating activities: $ 24,633 $ 20,726 Cash flows from investing activities: Purchases of property, plant and equipment (4,499) (6,348) Proceeds from sales of property, plant and equipment 246 255 Purchases of investments (165,351) (103,227) Proceeds from sales of investments 151,689 92,730 Notes issued (761) Notes repaid 78 83 Net cash (used in)provided by investing activities (17,837) (17,268) Cash flows from financing activities: Dividends paid (3,082) (2,890) Net cash used in financing activities (3,082) (2,890) Net increase in cash and cash equivalents 3,714 568 Cash and cash equivalents at beginning of period 8,321 8,681 Cash and cash equivalents at end of quarter $ 12,035 $ 9,249 Supplemental disclosure of cash flow information: Income tax payments $ 10,013 $ 6,921 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 March 31 June 30, 1996 1995 Fair Fair Cost Value Cost Value (In thousands) Current Assets U.S. Government Obligations $88,168 $88,146 $80,608 $80,530 Corp. Debt Securities 6,029 5,993 - - $94,197 $94,139 $80,608 $80,530 Non-Current Assets U.S. Government Obligations $ 3,696 $ 3,695 $ 8,616 $ 8,610 Corp. Debt Securities 4,958 4,935 1,599 1,569 Preferred stocks 32,737 33,339 30,456 31,896 Liquid asset fund and other 1,999 2,149 1,263 1,262 $43,390 $44,118 $41,934 $43,337 The Company hedges interest rate risk in its portfolio of preferred stock. Deferred losses associated with the hedge are $148,000 and $1,329,000 at March 31 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 03/31/96 06/30/95 (In thousands) Within 1 year $ 94,139 $ 80,530 After 1 year through 5 years 7,253 8,610 After 5 years through 10 years 1,377 1,569 After 10 years - - $102,769 $ 90,709 C. Inventories Processed Unprocessed Total (In thousands) March 31, 1996 Coffee $ 3,272 $10,728 $14,000 Allied products 8,752 4,668 13,420 Coffee brewing equipment 2,185 4,678 6,863 $14,209 $20,074 $34,283 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 Analyze of Financial Condition and Results of Operations The green coffee market always has an effect on Registrant's operations. During the most recent quarter, the price of the March coffee contract traded on the CSCE ranged from $0.9040 to $1.3150 per pound, as compared to a range from $1.5075 to $1.8725 per pound during the same period of the prior fiscal year. The lower price of green coffee during fiscal 1996 has contributed to Registrant's improved gross profit, but high selling prices over the past two years have dampened demand. The restaurant and lodging industries continue to be sluggish with no signs of strong growth. Registrant cautions that the green coffee market can become more volatile during the traditional Brazilian frost season (June-July), and is unable to predict either the direction of green coffee costs or whether current profit margins can be maintained. Net sales for the second quarter of fiscal 1995 increased 5% to $56,774,000 as compared to $59,514,000 in the same quarter of the prior year. Net sales for the first nine months of fiscal 1996 decreased 3% to $170,383,000 from $176,294,000 in the same period of fiscal 1995. Gross profit in the third quarter was $30,885,000 or 54% of sales, as compared to $30,885,000, or 53% of sales, in the second quarter of fiscal 1996 and $26,818,000, or 45% of sales, in the third same quarter of fiscal 1995. Gross profit for the first nine months of fiscal 1996 increased 8% to $89,277,000, from $82,811,000, in the same period of the prior fiscal year. Operating expenses for the first three fiscal quarters increased 2% to $66,917,000 in 1996 as compared to $65,826,000 in the same period of the prior fiscal year. Income after taxes for the three months ended March 31, 1996, reached $6,391,000, or $3.32 per share, as compared to $6,573,000, or $3.41 per share, in the second quarter of fiscal 1996, and $3,220,000 or $1.67 per share in the third quarter 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) 03/31/95 06/30/95 09/30/95 12/31/95 03/31/96 Net sales 59,514 58,368 55,038 58,571 56,774 Gross profit 26,818 30,088 27,527 30,865 30,885 Operating income 4,448 8,250 6,413 8,007 7,939 Net income 3,220 6,834 4,791 6,573 6,391 (as a percentage of sales) 03/31/95 06/30/95 09/30/95 12/31/95 03/31/96 Net sales 100.00 100.00 100.00 100.00 100.00 Gross profit 45.06 51.55 50.01 53.00 54.40 Operating income 7.47 14.13 11.65 13.67 13.98 Net income 5.41 11.71 8.70 11.22 11.26 (in dollars) 03/31/95 06/30/95 09/30/95 12/31/95 03/31/96 EPS 1.67 3.55 2.49 3.41 3.32 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 none. security holders. 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. PART II OTHER INFORMATION, (CONTINUED) (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: May 14, 1996 FARMER BROS. CO. (Registrant) John E. Simmons John E. Simmons Treasurer and Chief Financial Officer EX-27 2
5 1,000 3-MOS JUN-30-1996 MAR-31-1996 12035 94139 19734 545 34283 165081 34125 51186 261893 20376 0 0 0 1926 0 0 56774 56774 25889 22946 0 0 0 10677 4286 0 0 0 0 6391 3.41 3.41
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