-----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, R49mwuRFbZzscsdSjHzvHqYIosbdLHG2TqI84QFJ12u9rnPQsj+mdYGH54WWkKW9 YPw+YKzrKSIDxvvq8YfgiA== 0000034563-97-000002.txt : 19970222 0000034563-97-000002.hdr.sgml : 19970222 ACCESSION NUMBER: 0000034563-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970214 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: 97536065 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, 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 December 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 six months ended December 31, ended December 31, 1996 1995 1996 1995 Net sales $57,460 $58,571 $110,245 $113,609 Cost of goods sold 25,954 27,706 51,323 55,217 31,506 30,865 58,922 58,392 Selling expense 20,743 20,798 40,924 40,018 General and administrative expenses 2,130 2,060 3,648 3,953 22,873 22,858 44,572 43,971 Income from operations 8,633 8,007 14,350 14,421 Other income (expense): Dividend income 659 648 1,345 1,273 Interest income 1,694 1,722 3,138 2,930 Other 261 190 401 344 2,614 2,560 4,884 4,547 Income before taxes 11,247 10,567 19,234 18,968 Income taxes 4,413 3,994 7,741 7,603 Net income $ 6,834 $ 6,573 $ 11,493 $ 11,365 Net income per share $3.55 $3.41 $5.97 $5.90 The accompanying notes are an integral part of these financial statements. FARMER BROS. CO. CONSOLIDATED BALANCE SHEETS (Unaudited) December 31, June 30, 1996 1996 ASSETS Current assets: Cash and cash equivalents $ 44,755 $ 28,165 Short term investments 75,564 74,937 Accounts and notes receivable, net 17,626 18,822 Inventories 38,950 40,818 Income tax receivable - 1,000 Deferred income taxes 2,616 2,616 Prepaid expenses and other 710 701 Total current assets $180,221 $167,059 Property, plant and equipment, net 33,134 33,343 Notes receivable 1,841 1,841 Long term investments, net 40,707 40,058 Other assets 17,662 17,320 Deferred taxes 1,147 1,269 Total assets $274,712 $260,890 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 8,939 $ 4,635 Accrued payroll expenses 4,144 4,153 Other 5,288 5,542 Total current liabilities 18,371 14,330 Accrued postretirement benefits 13,428 12,892 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 240,022 230,840 Investment valuation allowance 397 334 Total shareholders' equity 242,913 233,668 Total liabilities and shareholders' equity $274,712 $260,890 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, 1996 1995 Cash flows from operating activities: Net Income $ 11,493 $ 11,365 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 2,858 2,177 Deferred income taxes - 213 Other (60) (131) Net (gain) loss on investments (128) (16) Change in assets and liabilities: Accounts and notes receivable 1,177 (609) Inventories 1,867 1,377 Income tax receivable 1,000 1,266 Prepaid expenses and other assets (504) (520) Accounts payable 4,304 1,053 Accrued payroll expenses and other liabilities (263) 931 Other long term liabilities 536 882 Total adjustments $ 10,787 $ 6,623 Net cash provided by operating activities $ 22,280 $ 17,988 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, 1996 1995 Net cash provided by operating activities: $22,280 $17,988 Cash flows from investing activities: Purchases of property, plant and equipment (2,527) (3,439) Proceeds from sales of property, plant and equipment 92 206 Purchases of investments (195,863) (101,540) Proceeds from sales of investments 194,900 100,545 Notes repaid 20 62 Net cash (used in) provided by investing activities (3,378) (4,166) Cash flows from financing activities: Dividends paid (2,312) (2,023) Net cash used in financing activities (2,312) (2,023) Net (decrease) in cash and cash equivalents 16,590 11,799 Cash and cash equivalents at beginning of year 28,165 8,321 Cash and cash equivalents at end of quarter $44,755 $20,120 Supplemental disclosure of cash flow information: Income tax payments $ 8,196 $ 5,601 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, 1996 1996 Fair Fair (In thousands) Cost Value Cost Value Current Assets Commercial Paper $44,344 $44,220 $34,609 $34,775 U.S. Government Obligations 31,410 31,344 40,129 40,162 $75,754 $75,564 $74,738 $74,937 Non-Current Assets U.S. Government Obligations $ 2,090 $ 2,052 $ 2,096 $ 2,043 Corporate Debt - - 1,400 1,350 Preferred stocks 34,015 36,181 34,475 35,114 Liquid asset fund and other 2,287 2,475 1,551 1,551 $38,392 $40,708 $39,522 $40,058 The gross unrealized gains and (losses) on securities classified as available for sale were $2,380,000 and ($442,000), respectively, at December 31, 1996, and $1,263,000 and ($528,000), respectively, at June 30, 1996. Gross realized gains from available for sale securities were $128,000 and $16,000 at December 31, 1996 and 1995, respectively. The Company hedges interest rate risk in its portfolio of preferred stock. Deferred losses associated with the hedge are $1,179,000 and $162,000 at December 31 and June 30, 1996, respectively. The contractual maturities of debt securities classified as current and non- current available for sale are as follows: Maturities Fair Value (In thousands) 12/31/96 06/30/96 Within 1 year $75,564 $74,937 After 1 year through 5 years 2,052 2,043 After 5 years through 10 years - 1,350 After 10 years - - $77,616 $78,330 C. Inventories (In thousands) Processed Unprocessed Total December 31, 1996 Coffee $ 5,571 $12,269 $17,840 Allied products 9,125 4,759 13,884 Coffee brewing equipment 2,257 4,969 7,226 $16,953 $21,997 $38,950 June 30, 1996 Coffee $ 5,302 $12,259 $17,561 Allied products 10,846 4,847 15,693 Coffee brewing equipment 2,475 5,089 7,564 $18,623 $22,195 $40,818 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Registrant's second quarter operations are consistent with prior year results. During the past three years the green coffee market has been especially volatile. During the most recent quarter, coffee prices were comparatively stable. During January, 1997, the green coffee market entered a bullish phase similar to that seen during the Brazilian frosts of 1994. Green coffee prices have recently increased 50% and reached prices in excess of $1.80 per pound after closing out the calendar year a little below $1.20 per pound. As Registrant's coffee inventory is replaced with higher priced coffee, higher roast coffee prices and a corresponding decrease in sales volume is likely to result. Net sales for the second quarter of fiscal 1997 decreased 2% to $57,460,000 from $58,571,000 in the same quarter of the prior fiscal year. Net sales for the first half of fiscal 1997 decreased 3% to $110,245,000 from $113,609,000 in the first half of fiscal 1996. Gross profit in the second quarter increased 2% to $31,506,000 or 55% of sales, as compared to $30,865,000, or 53% of sales, in the same quarter of fiscal 1996. Operating expenses reached $22,873,000 in the second quarter of fiscal 1997 as compared to $22,858,000 in the second quarter of fiscal 1996 and $21,699,000 in the first quarter of fiscal 1997. Income after taxes for the three months ended December 31, 1995, reached $6,834,000, or $3.55 per share, as compared to $4,659,000, or $2.42 per share, in the first quarter of fiscal 1997 and $6,573,000, or $3.41 per share, in the same quarter of fiscal 1996. Net income for the first half of fiscal 1997 reached $11,493,000, or $5.97 per share, as compared to $11,365,000, or $5.90 per share, in the first six months of fiscal 1996. Quarterly Summary of Results (in thousands of dollars) 12/31/95 03/31/96 06/30/96 09/30/96 12/31/96 Net sales 58,571 56,774 53,692 52,785 57,460 Gross profit 30,865 30,885 29,534 27,416 31,506 Operating income 8,007 7,939 6,839 5,717 8,633 Net income 6,573 6,391 5,608 4,659 6,834 (as a percentage of sales) 12/31/95 03/31/96 06/30/96 09/30/96 12/31/96 Net sales 100.00 100.00 100.00 100.00 100.00 Gross profit 52.69 54.40 55.00 51.94 54.83 Operating income 13.67 13.98 12.74 10.83 15.02 Net income 11.22 11.26 10.44 8.82 11.89 (in dollars) 12/31/95 03/31/96 06/30/96 09/30/96 12/31/96 EPS 3.41 3.32 2.91 2.42 3.55 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 December 2, 1996. 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 1,417,281 shares for election and 9,244 shares against. The proposal to appoint Coopers & Lybrand L.L.P.as the independent accountants for the Company for the year ended June 30, 1997 was approved with 1,426,359 shares in favor of the resolution, 16 shares against and 150 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, 1997 FARMER BROS. CO. (Registrant) John E. Simmons John E. Simmons Treasurer and Chief Financial Officer EX-27 2
5 1000 3-MOS JUN-30-1997 DEC-31-1996 44755 75564 17626 535 38750 180221 33134 52995 274712 18371 0 0 0 1926 0 274712 57460 57460 25954 22873 0 0 0 11247 4413 6834 0 0 0 6834 3.55 3.55
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