Farmer Bros. Co. Reports Second Quarter Fiscal 2018 Financial Results
Second Quarter Fiscal 2018 Highlights:
- Volume of green coffee processed and sold increased by 4.6 million pounds, reaching 29.1 million pounds, an 18.7% increase over the prior year period;
- Gross profit increased
$10.4 million to $65.5 million and gross margin decreased 50 basis points to 39.1% over the prior year period; - Net loss was
$18.8 million compared to net income of$20.1 million in the prior year period; - Adjusted EBITDA was
$12.9 million compared to$11.2 million in the prior year period;* - SQF certification of new
Northlake ,Texas facility remains on track to be completed in the third quarter of fiscal 2018, with annual run-rate production levels of six million pounds expected by end of the fiscal year; - Completed acquisition of substantially all of the assets of
Boyd Coffee Company (“Boyd”) and began executing integration plan; and - Deployed Smart Touch selling platform to over half of our routes, with complete deployment expected by the end of fiscal 2018.
(*Adjusted EBITDA, a non-GAAP financial measure, is reconciled to its corresponding GAAP measure at the end of this press release.)
Second Quarter Fiscal 2018 Results:
Selected Financial Data
The selected financial data presented below under the captions “Income statement data,” “Operating data” and “Balance sheet and other data” summarizes certain performance measures for the three and six months ended
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
(In thousands, except per share data) | |||||||||||||||||
Income statement data: | |||||||||||||||||
Net sales | $ | 167,366 | $ | 139,025 | $ | 299,079 | $ | 269,513 | |||||||||
Gross margin | 39.1 | % | 39.6 | % | 38.3 | % | 39.4 | % | |||||||||
Income from operations | $ | 2,442 | $ | 35,910 | $ | 1,184 | $ | 38,415 | |||||||||
Net (loss) income | $ | (18,768 | ) | $ | 20,076 | $ | (19,746 | ) | $ | 21,694 | |||||||
Net (loss) income per common share available to common stockholders—diluted | $ | (1.13 | ) | $ | 1.20 | $ | (1.19 | ) | $ | 1.30 | |||||||
Operating data: | |||||||||||||||||
Coffee pounds | 29,086 | 24,505 | 52,301 | 47,819 | |||||||||||||
Non-GAAP net (loss) income | $ | (18,219 | ) | $ | 2,011 | $ | (17,543 | ) | $ | 5,398 | |||||||
Non-GAAP net (loss) income per diluted common share | $ | (1.09 | ) | $ | 0.12 | $ | (1.05 | ) | $ | 0.32 | |||||||
EBITDA | $ | 11,080 | $ | 39,091 | $ | 17,168 | $ | 47,192 | |||||||||
EBITDA Margin | 6.6 | % | 28.1 | % | 5.7 | % | 17.5 | % | |||||||||
Adjusted EBITDA | $ | 12,904 | $ | 11,153 | $ | 22,233 | $ | 22,165 | |||||||||
Adjusted EBITDA Margin | 7.7 | % | 8.0 | % | 7.4 | % | 8.2 | % | |||||||||
Balance sheet and other data: | |||||||||||||||||
Capital expenditures excluding new facility | $ | 7,247 | $ | 10,124 | $ | 11,757 | $ | 13,359 | |||||||||
Total capital expenditures | $ | 8,474 | $ | 24,097 | $ | 16,249 | $ | 48,647 | |||||||||
Depreciation and amortization expense | $ | 8,077 | $ | 5,075 | $ | 15,330 | $ | 10,086 | |||||||||
Non-GAAP net (loss) income, Non-GAAP net (loss) income per diluted common share, EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures; a reconciliation of these non-GAAP measures to their corresponding GAAP measures is included at the end of this press release.
Volume of green coffee processed and sold increased 18.7% for the quarter, with volume associated with the Boyd business acquired in
In the second quarter of fiscal 2018, green coffee pounds processed and sold through our DSD network were 9.9. million, or 34.0%, of total green coffee pounds processed and sold, while Direct Ship customers represented 18.7 million pounds, or 64.3%, of total green coffee pounds processed and sold. Distributor customers represented 0.5 million pounds, or 1.7%, of total green coffee pounds processed and sold.
Net sales were
Gross profit in the second quarter of fiscal 2018 increased
Operating expenses in the second quarter of fiscal 2018 increased
As a result of the foregoing factors, income from operations in the second quarter of fiscal 2018 was
Total other expense in the second quarter of fiscal 2018 was
Income tax expense was
As a result of the foregoing factors, net loss was
Non-GAAP Financial Measures:
Non-GAAP net (loss) income, Non-GAAP net (loss) income per diluted common share, EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures; a reconciliation of these non-GAAP measures to their corresponding GAAP measures is included at the end of this press release.
Beginning in the fourth quarter of fiscal 2017, we modified the calculation of Non-GAAP net (loss) income, Non-GAAP net (loss) income per diluted common share, Adjusted EBITDA and Adjusted EBITDA Margin to exclude acquisition and integration costs. Acquisition and integration costs include legal expenses, consulting expenses and internal costs associated with acquisitions and integration of those acquisitions. Beginning in the fourth quarter of fiscal 2017 acquisition and integration costs were significant and, we believe, excluding them will help investors to better understand our operating results and more accurately compare them across periods. We have not adjusted the historical presentation of Non-GAAP net (loss) income, Non-GAAP net (loss) income per diluted common share, Adjusted EBITDA and Adjusted EBITDA Margin because acquisition and integration costs in prior periods were not material to the Company’s results of operations.
Non-GAAP net loss in the second quarter of fiscal 2018 was
Adjusted EBITDA was
About
Founded in 1912,
Headquartered in
Investor Conference Call
The call will be open to all interested investors through a live audio web broadcast via the Internet at—https://edge.media-server.com/m6/p/uv3hzakb—and at the Company’s website www.farmerbros.com under “Investor Relations.” The call also will be available to investors and analysts by dialing Toll Free: 1-(844) 423-9890 or international: 1-(716) 247-5805. The passcode/ID is 1545229.
The audio-only webcast will be archived for approximately 30 days on the Investor Relations section of the
Forward-Looking Statements
Certain statements contained in this press release are not based on historical fact and are forward-looking statements within the meaning of federal securities laws and regulations. These statements are based on management's current expectations, assumptions, estimates and observations of future events and include any statements that do not directly relate to any historical or current fact. These forward-looking statements can be identified by the use of words like “anticipates,” “estimates,” “projects,” “expects,” “plans,” “believes,” “intends,” “will,” “could,” “assumes” and other words of similar meaning. Owing to the uncertainties inherent in forward- looking statements, actual results could differ materially from those set forth in forward-looking statements. The Company intends these forward-looking statements to speak only at the time of this press release and does not undertake to update or revise these statements as more information becomes available except as required under federal securities laws and the rules and regulations of the
FARMER BROS. CO. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||||||
(In thousands, except share and per share data) | |||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net sales | $ | 167,366 | $ | 139,025 | $ | 299,079 | $ | 269,513 | |||||||
Cost of goods sold | 101,847 | 83,929 | 184,553 | 163,219 | |||||||||||
Gross profit | 65,519 | 55,096 | 114,526 | 106,294 | |||||||||||
Selling expenses | 49,328 | 39,097 | 88,243 | 77,535 | |||||||||||
General and administrative expenses | 13,914 | 13,793 | 25,241 | 22,729 | |||||||||||
Restructuring and other transition expenses | 139 | 3,965 | 259 | 6,995 | |||||||||||
Net gain from sale of Torrance facility | — | (37,449 | ) | — | (37,449 | ) | |||||||||
Net gains from sale of spice assets | (395 | ) | (334 | ) | (545 | ) | (492 | ) | |||||||
Net losses (gains) from sales of other assets | 91 | 114 | 144 | (1,439 | ) | ||||||||||
Operating expenses | 63,077 | 19,186 | 113,342 | 67,879 | |||||||||||
Income from operations | 2,442 | 35,910 | 1,184 | 38,415 | |||||||||||
Other (expense) income: | |||||||||||||||
Dividend income | 6 | 270 | 11 | 535 | |||||||||||
Interest income | 1 | 159 | 2 | 288 | |||||||||||
Interest expense | (861 | ) | (524 | ) | (1,384 | ) | (913 | ) | |||||||
Other, net | 554 | (2,323 | ) | 641 | (2,132 | ) | |||||||||
Total other expense | (300 | ) | (2,418 | ) | (730 | ) | (2,222 | ) | |||||||
Income before taxes | 2,142 | 33,492 | 454 | 36,193 | |||||||||||
Income tax expense | 20,910 | 13,416 | 20,200 | 14,499 | |||||||||||
Net (loss) income | $ | (18,768 | ) | $ | 20,076 | $ | (19,746 | ) | $ | 21,694 | |||||
Less: Cumulative preferred dividends, undeclared and unpaid | 129 | — | 129 | — | |||||||||||
Net (loss) income available to common stockholders | $ | (18,897 | ) | $ | 20,076 | $ | (19,875 | ) | $ | 21,694 | |||||
Net (loss) income per common share available to common stockholders—basic | $ | (1.13 | ) | $ | 1.21 | $ | (1.19 | ) | $ | 1.31 | |||||
Net (loss) income per common share available to common stockholders—diluted | $ | (1.13 | ) | $ | 1.20 | $ | (1.19 | ) | $ | 1.30 | |||||
Weighted average common shares outstanding—basic | 16,723,498 | 16,584,106 | 16,711,660 | 16,573,545 | |||||||||||
Weighted average common shares outstanding—diluted | 16,723,498 | 16,707,003 | 16,711,660 | 16,695,687 | |||||||||||
FARMER BROS. CO. | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
(In thousands, except share and per share data) | |||||||
December 31, 2017 | June 30, 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 5,414 | $ | 6,241 | |||
Short-term investments | — | 368 | |||||
Accounts receivable, net | 62,275 | 46,446 | |||||
Inventories | 73,284 | 56,251 | |||||
Income tax receivable | 206 | 318 | |||||
Prepaid expenses | 9,176 | 7,540 | |||||
Total current assets | 150,355 | 117,164 | |||||
Property, plant and equipment, net | 178,148 | 176,066 | |||||
Goodwill | 21,861 | 10,996 | |||||
Intangible assets, net | 51,036 | 18,618 | |||||
Other assets | 7,263 | 6,837 | |||||
Deferred income taxes | 45,593 | 63,055 | |||||
Total assets | $ | 454,256 | $ | 392,736 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | 51,218 | 39,784 | |||||
Accrued payroll expenses | 17,286 | 17,345 | |||||
Short-term borrowings under revolving credit facility | 84,430 | 27,621 | |||||
Short-term obligations under capital leases | 488 | 958 | |||||
Short-term derivative liabilities | 1,649 | 1,857 | |||||
Other current liabilities | 10,991 | 9,702 | |||||
Total current liabilities | 166,062 | 97,267 | |||||
Accrued pension liabilities | 50,505 | 51,281 | |||||
Accrued postretirement benefits | 19,112 | 19,788 | |||||
Accrued workers’ compensation liabilities | 6,365 | 7,548 | |||||
Other long-term liabilities-capital leases | 116 | 237 | |||||
Other long-term liabilities | 2,156 | 1,480 | |||||
Total liabilities | $ | 244,316 | $ | 177,601 | |||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $1.00 par value, 500,000 shares authorized; Series A Convertible Participating Cumulative Perpetual Preferred Stock, 21,000 shares authorized; 14,700 and zero shares issued and outstanding at December 31, 2017 and June 30, 2017, respectively; Liquidation preference of $38.32 at December 31, 2017 | 15 | — | |||||
Common stock, $1.00 par value, 25,000,000 shares authorized; 16,899,667 and 16,846,002 shares issued and outstanding at December 31, 2017 and June 30, 2017, respectively . | 16,900 | 16,846 | |||||
Additional paid-in capital | 53,322 | 41,495 | |||||
Retained earnings | 203,289 | 221,182 | |||||
Unearned ESOP shares | (2,145 | ) | (4,289 | ) | |||
Accumulated other comprehensive loss | (61,441 | ) | (60,099 | ) | |||
Total stockholders’ equity | $ | 209,940 | $ | 215,135 | |||
Total liabilities and stockholders’ equity | $ | 454,256 | $ | 392,736 | |||
FARMER BROS. CO. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||
(In thousands) | ||||||||
Six Months Ended December 31, | ||||||||
2017 | 2016 | |||||||
Cash flows from operating activities: | ||||||||
Net (loss) income | $ | (19,746 | ) | $ | 21,694 | |||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||||||
Depreciation and amortization | 15,330 | 10,086 | ||||||
Provision for (recovery of) doubtful accounts | 129 | (44 | ) | |||||
Interest on sale-leaseback financing obligation | — | 681 | ||||||
Restructuring and other transition expenses, net of payments | (958 | ) | 1,082 | |||||
Deferred income taxes | 19,375 | 13,640 | ||||||
Net gain from sale of Torrance facility | — | (37,449 | ) | |||||
Net gains from sales of spice assets and other assets | (401 | ) | (1,931 | ) | ||||
ESOP and share-based compensation expense | 1,844 | 2,094 | ||||||
Net losses on derivative instruments and investments | 1,033 | 2,583 | ||||||
Change in operating assets and liabilities: | ||||||||
Purchases of trading securities | — | (2,959 | ) | |||||
Proceeds from sales of trading securities | 375 | 1,268 | ||||||
Accounts receivable | (8,102 | ) | (4,545 | ) | ||||
Inventories | (7,682 | ) | (10,071 | ) | ||||
Income tax receivable | 112 | (27 | ) | |||||
Derivative assets (liabilities), net | (3,000 | ) | 4,329 | |||||
Prepaid expenses and other assets | 352 | 33 | ||||||
Accounts payable | 1,264 | 18,356 | ||||||
Accrued payroll expenses and other current liabilities | 1,178 | (5,210 | ) | |||||
Accrued postretirement benefits | (676 | ) | (447 | ) | ||||
Other long-term liabilities | (1,960 | ) | (1,849 | ) | ||||
Net cash (used in) provided by operating activities | $ | (1,533 | ) | $ | 11,314 | |||
Cash flows from investing activities: | ||||||||
Acquisition of businesses, net of cash acquired | $ | (39,608 | ) | $ | (11,183 | ) | ||
Purchases of property, plant and equipment | (14,672 | ) | (26,864 | ) | ||||
Purchases of assets for construction of new facility | (1,577 | ) | (21,783 | ) | ||||
Proceeds from sales of property, plant and equipment | 85 | 3,332 | ||||||
Net cash used in investing activities | $ | (55,772 | ) | $ | (56,498 | ) | ||
Cash flows from financing activities: | ||||||||
Proceeds from revolving credit facility | $ | 69,758 | $ | 34,323 | ||||
Repayments on revolving credit facility | (12,949 | ) | (15,900 | ) | ||||
Proceeds from sale-leaseback financing obligation | — | 42,455 | ||||||
Proceeds from New Facility lease financing obligation | — | 7,662 | ||||||
Repayments of New Facility lease financing obligation | — | (35,772 | ) | |||||
Payments of capital lease obligations | (591 | ) | (641 | ) | ||||
Payment of financing costs | (365 | ) | — | |||||
Proceeds from stock option exercises | 625 | 405 | ||||||
Net cash provided by financing activities | $ | 56,478 | $ | 32,532 | ||||
Net decrease in cash and cash equivalents | $ | (827 | ) | $ | (12,652 | ) | ||
Cash and cash equivalents at beginning of period | 6,241 | 21,095 | ||||||
Cash and cash equivalents at end of period | $ | 5,414 | $ | 8,443 | ||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||
Net change in derivative assets and liabilities included in other comprehensive (loss) income, net of tax | $ | (1,342 | ) | $ | (1,203 | ) | ||
Non-cash additions to property, plant and equipment | $ | 557 | $ | 11,253 | ||||
Non-cash portion of earnout receivable recognized-spice assets sale | $ | 545 | $ | 492 | ||||
Non-cash portion of earnout payable recognized—China Mist acquisition | $ | — | $ | 500 | ||||
Non-cash receivable from West Coast Coffee—post-closing final working capital adjustment | $ | 218 | $ | — | ||||
Non-cash consideration given—Issuance of Series A preferred stock | $ | 11,756 | $ | — | ||||
Non-cash multiemployer plan holdback payable recognized—Boyd acquisition | $ | 1,056 | $ | — | ||||
Cumulative preferred dividends, undeclared and unpaid | $ | 129 | $ | — | ||||
Non-GAAP Financial Measures
In addition to net (loss) income determined in accordance with U.S. generally accepted accounting principles (“GAAP”), we use the following non-GAAP financial measures in assessing our operating performance:
“Non-GAAP net (loss) income” is defined as net (loss) income excluding the impact of:
- restructuring and other transition expenses;
- net gains and losses from sales of assets;
- non-cash income tax expense (benefit), including the release of valuation allowance on deferred tax assets;
- non-recurring 2016 proxy contest-related expenses;
- non-cash interest expense accrued on the Torrance facility sale-leaseback financing obligation;
- acquisition and integration costs;
and including the impact of:
- income taxes on non-GAAP adjustments.
“Non-GAAP net (loss) income per diluted common share” is defined as Non-GAAP net (loss) income divided by the weighted-average number of common shares outstanding, inclusive of the dilutive effect of common equivalent shares outstanding during the period.
“EBITDA” is defined as net (loss) income excluding the impact of:
- income taxes;
- interest expense; and
- depreciation and amortization expense.
“EBITDA Margin” is defined as EBITDA expressed as a percentage of net sales.
“Adjusted EBITDA” is defined as net (loss) income excluding the impact of:
- income taxes;
- interest expense;
- (loss) income from short-term investments;
- depreciation and amortization expense;
- ESOP and share-based compensation expense;
- non-cash impairment losses;
- non-cash pension withdrawal expense;
- other similar non-cash expenses;
- restructuring and other transition expenses;
- net gains and losses from sales of assets;
- non-recurring 2016 proxy contest-related expenses; and
- acquisition and integration costs.
“Adjusted EBITDA Margin” is defined as Adjusted EBITDA expressed as a percentage of net sales.
Restructuring and other transition expenses are expenses that are directly attributable to (i) the corporate relocation plan, consisting primarily of employee retention and separation benefits, facility-related costs and other related costs such as travel, legal, consulting and other professional services; and (ii) beginning in the third quarter of fiscal 2017, the DSD restructuring plan, consisting primarily of severance, prorated bonuses for bonus eligible employees, contractual termination payments and outplacement services, and other related costs, including legal, recruiting, consulting, other professional services, and travel.
In the first quarter of fiscal 2017, we modified the calculation of Non-GAAP net (loss) income and Non-GAAP net (loss) income per diluted common share (i) to exclude non-recurring expenses for legal and other professional services incurred in connection with the 2016 proxy contest that were in excess of the level of expenses normally incurred for an annual meeting of stockholders ("2016 proxy contest-related expenses") and non-cash interest expense accrued on the Torrance facility sale-leaseback financing obligation which has been included in the computation of the gain on sale upon conclusion of the leaseback arrangement, and (ii) to include income tax expense (benefit) on the non-GAAP adjustments based on the Company’s applicable marginal tax rate. We also modified Adjusted EBITDA and Adjusted EBITDA Margin to exclude 2016 proxy contest-related expenses. These modifications to our non-GAAP financial measures were made because such expenses are not reflective of our ongoing operating results and adjusting for them will help investors with comparability of our results.
Beginning in the third quarter of fiscal 2017 and for all periods presented, we include EBITDA in our non-GAAP financial measures. We believe that EBITDA facilitates operating performance comparisons from period to period by isolating the effects of certain items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense). We also present EBITDA and EBITDA Margin because (i) we believe that these measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in our industry, (ii) we believe that investors will find these measures useful in assessing our ability to service or incur indebtedness, and (iii) we use these measures internally as benchmarks to compare our performance to that of our competitors.
Beginning in the third quarter of fiscal 2017, we modified the calculation of Adjusted EBITDA and Adjusted EBITDA Margin to exclude (loss) income from our short-term investments because we believe excluding (loss) income generated from our investment portfolio is a measure more reflective of our operating results. The historical presentation of Adjusted EBITDA and Adjusted EBITDA Margin was recast to be comparable to the current period presentation.
Beginning in the fourth quarter of fiscal 2017, we modified the calculation of Non-GAAP net (loss) income, Non-GAAP net (loss) income per diluted common share, Adjusted EBITDA and Adjusted EBITDA Margin to exclude acquisition and integration costs. Acquisition and integration costs include legal expenses, consulting expenses and internal costs associated with acquisitions and integration of those acquisitions. Beginning in the fourth quarter of fiscal 2017 acquisition and integration costs were significant and, we believe, excluding them will help investors to better understand our operating results and more accurately compare them across periods. We have not adjusted the historical presentation of Non-GAAP net (loss) income, Non-GAAP net (loss) income per diluted common share, Adjusted EBITDA and Adjusted EBITDA Margin because acquisition and integration costs in prior periods were not material to the Company’s results of operations.
We believe these non-GAAP financial measures provide a useful measure of the Company’s operating results, a meaningful comparison with historical results and with the results of other companies, and insight into the Company's ongoing operating performance. Further, management utilizes these measures, in addition to GAAP measures, when evaluating and comparing the Company's operating performance against internal financial forecasts and budgets.
Non-GAAP net (loss) income, Non-GAAP net (loss) income per diluted common share, EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin, as defined by us, may not be comparable to similarly titled measures reported by other companies. We do not intend for non-GAAP financial measures to be considered in isolation or as a substitute for other measures prepared in accordance with GAAP.
Set forth below is a reconciliation of reported net (loss) income to Non-GAAP net (loss) income and reported net (loss) income per common share—diluted to Non-GAAP net (loss) income per diluted common share (unaudited):
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
(In thousands, except per share data) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Net (loss) income, as reported | $ | (18,768 | ) | $ | 20,076 | $ | (19,746 | ) | $ | 21,694 | ||||||
Restructuring and other transition expenses | 139 | 3,965 | 259 | 6,995 | ||||||||||||
Net gain from sale of Torrance facility | — | (37,449 | ) | — | (37,449 | ) | ||||||||||
Net gains from sale of spice assets | (395 | ) | (334 | ) | (545 | ) | (492 | ) | ||||||||
Net losses (gains) from sales of other assets | 91 | 114 | 144 | (1,439 | ) | |||||||||||
Non-recurring 2016 proxy contest-related expenses | — | 3,719 | — | 4,990 | ||||||||||||
Interest expense on sale-leaseback financing obligation | — | 371 | — | 681 | ||||||||||||
Acquisition and integration costs | 972 | — | 3,382 | — | ||||||||||||
Income tax (benefit) expense on non-GAAP adjustments | (258 | ) | 11,549 | (1,037 | ) | 10,418 | ||||||||||
Non-GAAP net (loss) income | $ | (18,219 | ) | $ | 2,011 | $ | (17,543 | ) | $ | 5,398 | ||||||
Net (loss) income per common share—diluted, as reported | $ | (1.12 | ) | $ | 1.20 | $ | (1.18 | ) | $ | 1.30 | ||||||
Impact of restructuring and other transition expenses | $ | 0.01 | $ | 0.24 | $ | 0.02 | $ | 0.42 | ||||||||
Impact of net gain from sale of Torrance facility | $ | — | $ | (2.24 | ) | $ | — | $ | (2.24 | ) | ||||||
Impact of net gains from sale of spice assets | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.03 | ) | ||||
Impact of net losses (gains) from sales of other assets | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | (0.09 | ) | |||||||
Impact of non-recurring 2016 proxy contest-related expenses | $ | — | $ | 0.22 | $ | — | $ | 0.30 | ||||||||
Impact of interest expense on sale-leaseback financing obligation | $ | — | $ | 0.02 | $ | — | $ | 0.04 | ||||||||
Impact of acquisition and integration costs | $ | 0.06 | $ | — | $ | 0.20 | $ | — | ||||||||
Impact of income tax (benefit) expense on non-GAAP adjustments | $ | (0.02 | ) | $ | 0.69 | $ | (0.06 | ) | $ | 0.62 | ||||||
Non-GAAP net (loss) income per diluted common share | $ | (1.09 | ) | $ | 0.12 | $ | (1.05 | ) | $ | 0.32 |
Set forth below is a reconciliation of reported net (loss) income to EBITDA (unaudited):
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
(In thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Net (loss) income, as reported | $ | (18,768 | ) | $ | 20,076 | $ | (19,746 | ) | $ | 21,694 | ||||||
Income tax expense | 20,910 | 13,416 | 20,200 | 14,499 | ||||||||||||
Interest expense | 861 | 524 | 1,384 | 913 | ||||||||||||
Depreciation and amortization expense | 8,077 | 5,075 | 15,330 | 10,086 | ||||||||||||
EBITDA | $ | 11,080 | $ | 39,091 | $ | 17,168 | $ | 47,192 | ||||||||
EBITDA Margin | 6.6 | % | 28.1 | % | 5.7 | % | 17.5 | % |
Set forth below is a reconciliation of reported net (loss) income to Adjusted EBITDA (unaudited):
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
(In thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Net (loss) income, as reported | $ | (18,768 | ) | $ | 20,076 | $ | (19,746 | ) | $ | 21,694 | ||||||
Income tax expense | 20,910 | 13,416 | 20,200 | 14,499 | ||||||||||||
Interest expense | 861 | 524 | 1,384 | 913 | ||||||||||||
(Income) loss from short-term investments | (21 | ) | 895 | (19 | ) | 274 | ||||||||||
Depreciation and amortization expense | 8,077 | 5,075 | 15,330 | 10,086 | ||||||||||||
ESOP and share-based compensation expense | 1,038 | 1,152 | 1,844 | 2,094 | ||||||||||||
Restructuring and other transition expenses | 139 | 3,965 | 259 | 6,995 | ||||||||||||
Net gain from sale of Torrance facility | — | (37,449 | ) | — | (37,449 | ) | ||||||||||
Net gains from sale of spice assets | (395 | ) | (334 | ) | (545 | ) | (492 | ) | ||||||||
Net losses (gains) from sales of other assets | 91 | 114 | 144 | (1,439 | ) | |||||||||||
Non-recurring proxy contest-related expenses | — | 3,719 | — | 4,990 | ||||||||||||
Acquisition and integration costs | 972 | — | 3,382 | — | ||||||||||||
Adjusted EBITDA | $ | 12,904 | $ | 11,153 | $ | 22,233 | $ | 22,165 | ||||||||
Adjusted EBITDA Margin | 7.7 | % | 8.0 | % | 7.4 | % | 8.2 | % | ||||||||
Investor Contact:
212-481-2050
farmerbros@tpg-ir.com
Source: Farmer Bros. Co.