Farmer Bros. Co. Q4 FY2024 earnings call

• Welcomed new Chief Financial Officer Vance Fisher. - Completed sale of direct ship business, focused on DSD. - Optimized value chain, centralized roasting, and rationalized SKUs. - Implemented brand pyramid initiative for traditional, premium, and specialty coffee tiers. - Achieved gross margin improvement via pricing optimization and made progress in operational capabilities and cost structure.

For the fourth quarter of fiscal 2024, net sales decreased slightly by 1% to $84.4 million. Gross margins increased to 38.8%, a 630 basis point improvement from the prior year. For the full fiscal year 2024, net sales were $341.1 million, a $1.1 million increase from fiscal 2023. Gross margins increased 560 basis points to 39.3%. The adjusted EBITDA loss for the fourth quarter improved to a loss of $1.6 million, and for the full fiscal year, adjusted EBITDA was positive at $558,000 compared to a $14.2 million loss in fiscal 2023.

• Anticipate improved gross margin and net profitability in future quarters. - Focus on sales growth, margin protection, and solid working capital management to achieve free cash flow positivity in fiscal 2025.

• Commodity market fluctuations and macro factors impacting financial performance. - Potential acceleration in customer attrition due to pricing fatigue and inflationary pressures.

Q: Update on fulfillment rates?

A: Made tremendous progress, with demand planning improved for finished goods and effective measures on equipment side.

Q: Update on brand pyramid?

A: Farmer Brothers and Boyd's rebrand complete, specialty brand launch scheduled for end of calendar year.

Q: Customer retention and free cash flow roadmap?

A: Attrition in line with industry, working towards free cash flow with sales growth, margin protection, and working capital management