☑
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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95-0725980
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1912 Farmer Brothers Drive,
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Northlake,
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Texas
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76262
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(Address of Principal Executive Offices; Zip Code)
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888
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998-2468
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(Registrant’s Telephone Number, Including Area Code)
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Common Stock, $1.00 par value
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FARM
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NASDAQ Global Select Market
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Large accelerated filer
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☐
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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☐
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Emerging growth company
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☐
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
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Exchange Act.
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☐
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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
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PART I
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ITEM 1.
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Business
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ITEM 1A.
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Risk Factors
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ITEM 1B.
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Unresolved Staff Comments
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ITEM 2.
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Properties
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ITEM 3.
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Legal Proceedings
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ITEM 4.
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Mine Safety Disclosures
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PART II
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ITEM 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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ITEM 6.
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Selected Financial Data
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ITEM 7.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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ITEM 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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ITEM 8.
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Financial Statements and Supplementary Data
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ITEM 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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ITEM 9A.
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Controls and Procedures
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ITEM 9B.
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Other Information
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PART III
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ITEM 10.
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Directors, Executive Officers and Corporate Governance
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ITEM 11.
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Executive Compensation
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ITEM 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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ITEM 13.
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Certain Relationships and Related Transactions, and Director Independence
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ITEM 14.
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Principal Accountant Fees and Services
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PART IV
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ITEM 15.
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Exhibits, Financial Statement Schedules
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ITEM 16.
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Form 10-K Summary
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SIGNATURES
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INDEX OF CONSOLIDATED FINANCIAL STATEMENTS
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Item 1.
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Business
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•
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a robust line of roast and ground coffee, including organic, Direct Trade, Project D.I.R.E.C.T.® and other sustainably-produced offerings;
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•
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frozen liquid coffee;
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flavored and unflavored iced and hot teas, including organic and Rainforest Alliance Certified TM;
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•
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culinary products including premium spices, pancake and biscuit mixes, gravy and sauce mixes, soup bases, dressings, syrups and sauces, and coffee-related products such as coffee filters, cups, sugar and creamers; and
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other beverages including cappuccino, cocoa, granitas, and concentrated and ready-to-drink cold brew and iced coffee.
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developing new products in response to demographic and other trends to better compete in areas such as premium coffees and teas;
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building our e-commerce capabilities;
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executing manufacturing and network optimization;
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optimizing our product assortment;
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developing our product innovation pipeline;
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creating a commercial brewing equipment (CBE) competitive service advantage;
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building an industry leading sustainability platform;
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creating a culture to improve employee engagement and to attract and retain talent within our diverse workplace; and
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ensure our systems and processes provide high-quality products at a competitive cost, protection against cyber threats, and a safe environment for our employees and partners.
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offering a wide variety of coffee, tea, and culinary products;
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providing consumer, channel, and market insights;
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ideation to support customer menu and product evaluation in line with consumer trends;
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delivering comprehensive commercial brewing equipment program support from installation to preventative maintenance to timely repair;
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delivering the highest standards in food quality and safety with all of our production facilities being Safe Quality Food (“SQF”) certified;
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helping our customers deliver their sustainability goals and objectives;
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Customer–centric Direct-store-delivery ("DSD") capability with focus on providing location-level program execution and merchandising support; and
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a robust approach to social, environmental and economic sustainability throughout our business.
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Embrace our Purpose, Vision, and Values. In fiscal 2020, we evolved our purpose, vision, and values to support building a performance driven culture.
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Develop our Talent. We have invested in a Learning Management System to enable training facilitation and tracking of training modules to support the development of our team members.
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Recognize and Reward Performance. We aligned our incentive plans to support our annual and long-term strategy. For instance, in fiscal 2020, we executed a front-line recognition program for those team members that delivered great results on company service metrics, which aligns with the Enrich Customer Relationships pillar of our 5 Es strategy.
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Build on our Brewing Equipment Service Advantage. From installation, to preventative maintenance, and timely repair execution, our trained service technicians and equipment remanufacturing capabilities provide reliable, consistent service coverage across a wide geographic area which we believe is a competitive advantage. We continue to invest in systems and processes to enable a more efficient go-to-market with our equipment program.
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Drive Customer Satisfaction. Providing our customers the product they want, when they want it, is key to customer satisfaction and retention. We have invested in systems and processes to improve fill rates, including SKU optimization and inventory replenishment tools. We have also reinvigorated our innovation pipeline so we can continually deliver on-trend products and equipment.
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Expand Customer Service Capabilities. In fiscal 2020, we have expanded our equipment service call center to support our DSD route business in order to enable quick resolution of issues and drive better visibility on customer inquiries. We believe this enables better customer response and improves customer retention.
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Develop Pre-Sell/Tel-Sell Capabilities. In order to better serve certain customer’s needs, we expanded our Tel-Sell (Roastery Direct) program in fiscal 2020. This program enables us to better service customers outside our DSD network who want to purchase our products. We pick, pack, and ship products to these customers via common carriers. We are also implementing a Pre-Sell DSD model in select markets. In this model, we sell to our customers in advance of the delivery, enabling more quality time with our customers, and more deliveries per day.
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Upgrade our Route Handheld Technology. We are piloting a new handheld technology in select markets. We expect this technology to improve route productivity and enable improved customer fill rates.
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Investment in Technology. We are implementing IT applications which we expect to enhance supply chain optimization and flexibility.
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Deploy B2B/E-Commerce Solution. We believe that this solution will enable a more robust roastery direct program, as well as coffee house and subscription sales. This will lead to improved customer analytics, and enable better product targeting.
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Improve Demand Planning. We are in process of developing new tools to provide visibility to customer demand. We are working closely with our key vendor partners to create a more robust demand and supply process and implementing a sales demand consensus model.
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Manufacturing and Distribution Network Optimization Plan. We are in process of developing and executing manufacturing network optimization, which includes opening a distribution center in the western part of the United States and consolidating third party frozen distribution services. Additionally, we continue to evaluate our branch footprint to determine the optimal structure to deliver products to our DSD customers more efficiently and effectively. These initiatives, among others, is expected to reduce our transportation and warehousing cost.
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SKU Optimization. In fiscal 2020, we continued optimizing our SKU portfolio. We have reduced the number of underperforming coffee and allied products, and have reduced components and packaging options. Since fiscal 2019, we have undertaken efforts to optimize our SKU count reducing our total SKU count by more than 26.0%.
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•
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Implement Procurement Partnerships. We are working with our vendor partners to enhance our vendor managed inventory program. We have implemented quarterly business reviews with key vendor partners.
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•
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Expand Sustainability Program. We continue to enhance our sustainable product offerings and incorporate sustainability as we develop new products. We are developing marketing campaigns to better communicate our program portfolio as a differentiator for our customers, inclusive of our capability to restore and refurbish equipment.
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Evolve our Product Portfolio. We are actively developing product solutions that align with emerging consumer trends with premium coffee and tea products. We are partnering with our equipment suppliers on equipment innovation. We are developing our espresso based beverage program and actively optimizing our allied product offerings.
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Renovate Product Portfolio. As consumers shift in the demand for healthier food and beverage products, we look to future opportunities to reformulate our existing product lines with clean label offerings and provide more "Better for You" product offerings.
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Define and Implement our Digital Strategy. We are actively engaging and developing our digital strategy to respond to the digital capabilities that our customers expect as well as add efficiency to our sales and logistics functions.
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Sustainability. We believe that our collective efforts in measuring our social and environmental impact, creating programs for waste, water and energy reduction, promoting partnerships in our supply chain that aim at supply chain stability and food security, and focusing on employee engagement place us in a unique position to help retailers and foodservice operators create differentiated coffee and tea programs that can include sustainable supply chains, direct trade purchasing, training and technical assistance, recycling and composting networks, and packaging material reductions. During fiscal 2020, we achieved the Carbon Disclosure Project's Climate leadership level for our efforts to reduce Scope 1, 2 and 3 emissions (direct emissions, indirect emissions from consumption of purchased electricity, heat or steam and other indirect emissions). Further, in fiscal 2020, we published our annual sustainability report based on the Global Reporting Initiative’s comprehensive compliance standard. In addition, China Mist is a member of the Ethical Tea Partnership (the “ETP”), a non-profit organization that works to improve the sustainability of the tea sector, the lives of tea workers and farmers, and the environment in which tea is produced. As a member of the ETP, China Mist sources all of its tea from tea plantations that are certified, monitored, and regularly audited by the ETP.
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Science-Based Carbon Reduction Targets. We believe combating climate change is critical to the future of our company, the coffee industry, coffee growers and the world. In fiscal 2020 we made progress towards our science based carbon reduction targets. With a new baseline established in fiscal 2018, we set more ambitious goals in line with efforts to limit global warming to 1.5°C. Setting approved targets places us among those responsible businesses that are making measurable contributions to incorporate sustainability within their business strategy.
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Zero Waste to Landfill. Achieving zero waste in our production and distribution facilities is a significant step in reaching our overall sustainability goals. In fiscal 2020 we maintained our goal of 90% waste diversion for our primary production and distribution facilities. To accomplish this goal, we implemented ambitious recycling and composting guidelines across these facilities.
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LEED® Certified Facilities. Our Portland production and distribution facility was one of the first in the Northwest to achieve LEED® Silver Certification. Our corporate offices in Northlake, Texas has also achieved LEED® Silver Certification.
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Expansion of Project D.I.R.E.C.T.® Program. In fiscal 2020, we continued to grow our direct trade sourcing model, Project D.I.R.E.C.T. ®. This model is an impact-based product or raw material sourcing framework that utilizes data-based sustainability metrics to influence an inclusive, collaborative approach to sustainability along the supply chain. To evaluate whether coffee is Project D.I.R.E.C.T.®, we follow an outcome-based evaluation framework. The result of this evaluation impacts where we invest our resources within our supply chain and has led to an increased level of transparency for us. Project D.I.R.E.C.T . ® represents a growing part of our coffee portfolio.
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Green Coffee Traceability. We are committed to the inclusion of more sustainably-sourced coffees in our supply chain. Regulatory and reputational risks can increase when customers, roasters and suppliers cannot see back into their supply chain. To address these concerns, as well as to deepen our commitment to the longevity of the coffee industry, we track traceability levels from all green coffee suppliers on a per-contract basis. During fiscal 2020, we continued to monitor purchases from coffee suppliers and ask for them to provide traceability information on a per contract basis. This helps us to bring transparency to our supply chain, rank our suppliers, and also to identify opportunities to select trusted providers, cooperatives, mills, exporters, etc., when offering sustainable coffees to our customers.
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•
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Supplier Sustainability. We are committed to working with suppliers who share our social, environmental and economic sustainability goals. Regulatory and reputational risks can increase when suppliers are not held to the same strict standards to which we hold ourselves. To address this concern, we annually survey all green coffee suppliers along with our top suppliers of processed coffee and non-coffee products to assess their social, environmental, and economic sustainability practices and alignment with the United Nations Global Compact, a United Nations initiative to encourage businesses worldwide to adopt sustainable and socially responsible policies, documenting 96% compliance with United Nations Global Compact practices from all respondents. Existing suppliers and new suppliers must acknowledge and adhere to our Supplier Standards of Engagement. These Standards of Engagement set minimum standards for Suppliers that are designed to provide Farmer Bros. visibility into all
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•
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Recipient organizations include Feeding America, Ronald McDonald House, and local food banks.
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We support industry organizations such as World Coffee Research, which commits to grow, protect, and enhance supplies of quality coffee while improving the livelihoods of the families who produce it, and the Specialty Coffee Association (“SCA”) Sustainability Council and the Coalition for Coffee Communities, which are focused on sustainability in coffee growing regions.
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Our employee-driven CAFÉ Crew organizes employee involvement at local charities and fund raisers, including support of Team Ronald McDonald House, riding in the Ride Against Hunger supported by Tarrant Area Food Bank, hosting local food drives and donation of Farmer Brothers products nearing the end of their shelf life to organizations related to Feeding America.
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Our usable and near expiring products or products with damaged packaging that can be donated are donated to Feeding America affiliated food banks nationwide, in an effort to keep all edible food waste from going to landfills.
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Coffee Industry Leadership. Through our dedication to the craft of sourcing, blending and roasting coffee, and our participation and/or leadership positions with the SCA, National Coffee Association, Coalition for Coffee Communities, International Women's Coffee Alliance, Pacific Coast Coffee Association, Roasters Guild and World Coffee Research, we work to help shape the future of the coffee industry. We believe that due to our commitment to the industry, large retail and foodservice operators are drawn to working with us. We were among the first coffee roasters in the nation to receive SCA certification of a state-of-the-art coffee lab, which includes our product development lab at the Northlake facility. We also operate Public Domain®, a specialty coffeehouse in Portland, Oregon.
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Market Insight and Consumer Research. We have developed a market insight capability internally that reinforces our business-to-business positioning as a thought leader in the coffee, tea and food service industries. We provide trend insights and product development support that help our customers create winning products and integrated marketing strategies. Within this, we are focused on understanding key demographic groups and their attitudes and behaviors to better position the Company as a consumer brand at retail and e-commerce and expand these sales channels.
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Item 1A.
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Risk Factors
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•
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requiring a substantial portion of our cash flow from operations to make payments on our indebtedness;
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reducing the cash flow available or limiting our ability to borrow additional funds, to pay dividends, to fund capital expenditures and other corporate purposes and to pursue our business strategies;
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•
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limiting our flexibility in planning for, or reacting to, changes in our businesses and the industries in which we operate;
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•
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increasing our vulnerability to general adverse economic and industry conditions; and
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•
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placing us at a competitive disadvantage compared to our competitors that have less debt.
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•
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seek additional financing in the debt or equity markets;
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•
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refinance or restructure all or a portion of our indebtedness;
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•
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sell assets; and/or
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•
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reduce or delay planned capital or operating expenditures, strategic acquisitions or investments.
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Item 1.B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Location
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Approximate Area
(Square Feet)
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Purpose
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Status
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Northlake, TX
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535,585
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Corporate headquarters, manufacturing, distribution, warehouse, product development lab
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Owned
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Houston, TX
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330,877
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Manufacturing and warehouse
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Leased
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Portland, OR
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114,000
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Manufacturing and distribution
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Leased
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Oklahoma City, OK
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142,115
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Equipment repair center
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Owned
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Northlake, IL
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89,837
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Distribution and warehouse
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Leased
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Moonachie, NJ
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41,404
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Distribution and warehouse
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Leased
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Hillsboro, OR
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20,400
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Manufacturing, distribution and warehouse
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Leased
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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|
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2015
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2016
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2017
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2018
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2019
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2020
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||||||
Farmer Bros. Co.
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$
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100.00
|
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$
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136.43
|
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$
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128.72
|
|
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$
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130.00
|
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$
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69.66
|
|
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$
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31.32
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|
Russell 2000 Index
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$
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100.00
|
|
|
$
|
93.83
|
|
|
$
|
119.01
|
|
|
$
|
139.84
|
|
|
$
|
135.21
|
|
|
$
|
126.25
|
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Value Line Food Processing Index
|
|
$
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100.00
|
|
|
$
|
118.48
|
|
|
$
|
126.26
|
|
|
$
|
125.48
|
|
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$
|
135.42
|
|
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$
|
138.97
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Peer Group Index
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$
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100.00
|
|
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$
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150.78
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|
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$
|
144.48
|
|
|
$
|
137.15
|
|
|
$
|
104.43
|
|
|
$
|
114.54
|
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Period
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Total Number of Shares of Our Class A Common Stock Purchased
|
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Average Price Paid Per Share of Our Class A Common Stock
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Total Number of Shares of Our Class A Common Stock Purchased as Part of Publicly Announced Plans or Programs
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Maximum Number of Shares of Our Class A Common Stock That May Yet Be Purchased Under the Plan or Program
|
|||||
April 1 to April 30, 2020
|
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—
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$
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—
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|
|
—
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—
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May 1 to May 31, 2020
|
|
—
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|
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$
|
—
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|
|
—
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|
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—
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June 1 to June 30, 2020
|
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—
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|
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$
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—
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|
|
—
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|
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—
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Item 6.
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Selected Financial Data
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For the Years Ended June 30,
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(In thousands, except per share data)
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2020
|
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2019
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2018(1)
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2017(1)
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2016(1)
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Consolidated Statement of Operations Data:
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Net sales
|
$
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501,320
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|
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$
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595,942
|
|
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$
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606,544
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|
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$
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541,500
|
|
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$
|
544,382
|
|
Cost of goods sold
|
$
|
363,198
|
|
|
$
|
416,840
|
|
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$
|
399,155
|
|
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$
|
354,649
|
|
|
$
|
373,165
|
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Restructuring and other transition expenses
|
$
|
—
|
|
|
$
|
4,733
|
|
|
$
|
662
|
|
|
$
|
11,016
|
|
|
$
|
16,533
|
|
Net gain from sale of Torrance Facility
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(37,449
|
)
|
|
$
|
—
|
|
Net (gains) losses from sales of assets
|
$
|
(25,237
|
)
|
|
$
|
465
|
|
|
$
|
(966
|
)
|
|
$
|
(2,129
|
)
|
|
$
|
(8,405
|
)
|
Impairment losses on intangible assets
|
$
|
42,030
|
|
|
$
|
—
|
|
|
$
|
3,820
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(Loss) income from operations
|
$
|
(43,002
|
)
|
|
$
|
(14,702
|
)
|
|
$
|
1,053
|
|
|
$
|
38,934
|
|
|
$
|
(1,736
|
)
|
Postretirement benefits curtailment gains and pension settlement (charge)
|
$
|
5,760
|
|
|
$
|
(10,948
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Income tax (benefit) expense(2)
|
$
|
(195
|
)
|
|
$
|
40,111
|
|
|
$
|
17,312
|
|
|
$
|
14,815
|
|
|
$
|
(72,239
|
)
|
Net (loss) income available to common stockholders
|
$
|
(37,641
|
)
|
|
$
|
(74,130
|
)
|
|
$
|
(18,669
|
)
|
|
$
|
22,551
|
|
|
$
|
71,791
|
|
Net (loss) income available to common stockholders per common share—basic
|
$
|
(2.19
|
)
|
|
$
|
(4.36
|
)
|
|
$
|
(1.11
|
)
|
|
$
|
1.35
|
|
|
$
|
4.35
|
|
Net (loss) income available to common stockholders per common share—diluted
|
$
|
(2.19
|
)
|
|
$
|
(4.36
|
)
|
|
$
|
(1.11
|
)
|
|
$
|
1.34
|
|
|
$
|
4.32
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of June 30,
|
||||||||||||||||||
(In thousands)
|
2020
|
|
2019
|
|
2018(1)
|
|
2017(1)
|
|
2016(1)
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total current assets
|
$
|
176,713
|
|
|
$
|
159,908
|
|
|
$
|
173,514
|
|
|
$
|
140,703
|
|
|
$
|
177,366
|
|
Property, plant and equipment, net
|
$
|
165,633
|
|
|
$
|
189,458
|
|
|
$
|
186,589
|
|
|
$
|
176,066
|
|
|
$
|
118,416
|
|
Goodwill
|
$
|
—
|
|
|
$
|
36,224
|
|
|
$
|
36,224
|
|
|
$
|
10,996
|
|
|
$
|
272
|
|
Intangible assets, net
|
$
|
20,662
|
|
|
$
|
28,878
|
|
|
$
|
31,515
|
|
|
$
|
18,618
|
|
|
$
|
6,219
|
|
Operating lease assets
|
$
|
21,117
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Deferred income taxes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39,308
|
|
|
$
|
53,933
|
|
|
$
|
71,508
|
|
Total assets
|
$
|
392,699
|
|
|
$
|
424,610
|
|
|
$
|
475,531
|
|
|
$
|
407,153
|
|
|
$
|
383,714
|
|
Short-term borrowings under revolving credit facility
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
89,787
|
|
|
$
|
27,621
|
|
|
$
|
109
|
|
Long-term borrowings under revolving credit facility
|
$
|
122,000
|
|
|
$
|
92,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating lease liabilities
|
$
|
21,483
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Finance lease obligations
|
$
|
9
|
|
|
$
|
32
|
|
|
$
|
248
|
|
|
$
|
1,195
|
|
|
$
|
2,359
|
|
Earnout payable
|
$
|
—
|
|
|
$
|
400
|
|
|
$
|
600
|
|
|
$
|
1,100
|
|
|
$
|
100
|
|
Long-term derivative liabilities
|
$
|
2,859
|
|
|
$
|
1,612
|
|
|
$
|
386
|
|
|
$
|
380
|
|
|
$
|
—
|
|
Total liabilities
|
$
|
280,786
|
|
|
$
|
267,116
|
|
|
$
|
246,476
|
|
|
$
|
177,601
|
|
|
$
|
186,397
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
reduced headcount and furloughed a significant percentage of employees;
|
•
|
eliminated fiscal third quarter 2020 cash compensation for our Board of Directors;
|
•
|
temporarily decreased executive leadership, corporate team member’s and all exempt employees (except route sales representatives) base salaries by instituting a 15% reduction;
|
•
|
reduced discretionary spending, including a moratorium on all travel;
|
•
|
reduced fiscal year ending 2020 management incentive bonus program;
|
•
|
reduced plant production costs in two of our plants;
|
•
|
suspended 401k cash matching for all eligible employees;
|
•
|
reduced capital expenditures while also closely managing inventory and other spending;
|
•
|
implemented cost controls throughout our coffee brewing equipment (“CBE”) program service network;
|
•
|
instituted cost savings to reduce our general and administrative expenses; and
|
•
|
reduced our DSD supply chain network costs by reducing freight and fleet, and consolidating routes.
|
|
For The Years Ended June 30,
|
|
2020 vs 2019
|
|
2019 vs 2018
|
||||||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
Favorable (Unfavorable)
|
|
Favorable (Unfavorable)
|
||||||||||||||||
|
|
|
|
|
|
|
Change
|
|
% Change
|
|
Change
|
|
% Change
|
||||||||||||
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
$
|
501,320
|
|
|
$
|
595,942
|
|
|
$
|
606,544
|
|
|
$
|
(94,622
|
)
|
|
(15.9
|
)%
|
|
$
|
(10,602
|
)
|
|
(1.7
|
)%
|
Gross margin
|
27.6
|
%
|
|
30.1
|
%
|
|
34.2
|
%
|
|
(2.5
|
)%
|
|
NM
|
|
|
(4.1
|
)%
|
|
NM
|
|
|||||
Operating expenses as a % of sales
|
36.1
|
%
|
|
32.5
|
%
|
|
34.0
|
%
|
|
3.6
|
%
|
|
NM
|
|
|
(1.5
|
)%
|
|
NM
|
|
|||||
(Loss) income from operations
|
$
|
(43,002
|
)
|
|
$
|
(14,702
|
)
|
|
$
|
1,053
|
|
|
$
|
(28,300
|
)
|
|
192.5
|
%
|
|
$
|
(15,755
|
)
|
|
NM
|
|
Net loss
|
$
|
(37,087
|
)
|
|
$
|
(73,595
|
)
|
|
$
|
(18,280
|
)
|
|
$
|
36,508
|
|
|
49.6
|
%
|
|
$
|
(55,315
|
)
|
|
NM
|
|
Net loss available to common stockholders per common share—basic
|
$
|
(2.19
|
)
|
|
$
|
(4.36
|
)
|
|
$
|
(1.11
|
)
|
|
$
|
2.17
|
|
|
NM
|
|
|
$
|
(3.25
|
)
|
|
NM
|
|
Net loss available to common stockholders per common share—diluted
|
$
|
(2.19
|
)
|
|
$
|
(4.36
|
)
|
|
$
|
(1.11
|
)
|
|
$
|
2.17
|
|
|
NM
|
|
|
$
|
(3.25
|
)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Coffee pounds
|
100,700
|
|
|
108,098
|
|
|
107,429
|
|
|
(7,398
|
)
|
|
(6.8
|
)%
|
|
669
|
|
|
0.6
|
%
|
|||||
EBITDA(1)
|
$
|
(1,796
|
)
|
|
$
|
3,617
|
|
|
$
|
32,673
|
|
|
$
|
(5,413
|
)
|
|
(149.7
|
)%
|
|
(29,056
|
)
|
|
(88.9
|
)%
|
|
EBITDA Margin(1)
|
(0.4
|
)%
|
|
0.6
|
%
|
|
5.4
|
%
|
|
(1.0
|
)%
|
|
NM
|
|
|
(4.8
|
)%
|
|
NM
|
|
|||||
Adjusted EBITDA(1)
|
$
|
18,742
|
|
|
$
|
31,882
|
|
|
$
|
47,562
|
|
|
$
|
(13,140
|
)
|
|
(41.2
|
)%
|
|
$
|
(15,680
|
)
|
|
(33.0
|
)%
|
Adjusted EBITDA Margin(1)
|
3.7
|
%
|
|
5.3
|
%
|
|
7.8
|
%
|
|
(1.6
|
)%
|
|
NM
|
|
|
(2.5
|
)%
|
|
NM
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Percentage of Total Net Sales By Product Category
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Coffee (Roasted)
|
64.9
|
%
|
|
63.5
|
%
|
|
62.6
|
%
|
|
1.4
|
%
|
|
2.2
|
%
|
|
0.9
|
%
|
|
1.4
|
%
|
|||||
Coffee (Frozen Liquid)
|
5.7
|
%
|
|
5.8
|
%
|
|
5.7
|
%
|
|
(0.1
|
)%
|
|
(1.7
|
)%
|
|
0.1
|
%
|
|
1.8
|
%
|
|||||
Tea (Iced & Hot)
|
5.1
|
%
|
|
5.6
|
%
|
|
5.4
|
%
|
|
(0.5
|
)%
|
|
(8.9
|
)%
|
|
0.2
|
%
|
|
3.7
|
%
|
|||||
Culinary
|
10.0
|
%
|
|
10.8
|
%
|
|
10.6
|
%
|
|
(0.8
|
)%
|
|
(7.4
|
)%
|
|
0.2
|
%
|
|
1.9
|
%
|
|||||
Spice
|
4.3
|
%
|
|
4.0
|
%
|
|
4.2
|
%
|
|
0.3
|
%
|
|
7.5
|
%
|
|
(0.2
|
)%
|
|
(4.8
|
)%
|
|||||
Other beverages(2)
|
9.0
|
%
|
|
9.8
|
%
|
|
11.0
|
%
|
|
(0.8
|
)%
|
|
(8.2
|
)%
|
|
(1.2
|
)%
|
|
(10.9
|
)%
|
|||||
Other revenues(3)
|
0.5
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|||||||||
Net sales by product category
|
99.5
|
%
|
|
99.5
|
%
|
|
99.5
|
%
|
|
(0.5
|
)%
|
|
(16.5
|
)%
|
|
—
|
%
|
|
(6.9
|
)%
|
|||||
Fuel Surcharge
|
0.5
|
%
|
|
0.5
|
%
|
|
0.5
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||||
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
(0.5
|
)%
|
|
(16.5
|
)%
|
|
—
|
%
|
|
—
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures related to maintenance
|
$
|
11,845
|
|
|
$
|
21,088
|
|
|
$
|
21,782
|
|
|
$
|
(9,243
|
)
|
|
(43.8
|
)%
|
|
$
|
(694
|
)
|
|
(3.2
|
)%
|
Total capital expenditures
|
$
|
17,560
|
|
|
$
|
34,759
|
|
|
$
|
37,020
|
|
|
$
|
(17,199
|
)
|
|
(49.5
|
)%
|
|
$
|
(2,261
|
)
|
|
(6.1
|
)%
|
Depreciation and amortization expense
|
$
|
29,896
|
|
|
$
|
31,065
|
|
|
$
|
30,464
|
|
|
$
|
(1,169
|
)
|
|
(3.8
|
)%
|
|
$
|
601
|
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Investment in State-of-the-Art Facility and Capacity Expansion. We are focused on leveraging our investment in the Northlake, Texas, facility to produce the highest quality coffee in response to the market shift to premium and specialty coffee, support volume rebalancing across our manufacturing network and create sustainable long-term growth. However, until we complete the transition of most manufacturing to our Northlake facility, we will continue to experience higher manufacturing costs driven by downtime and inefficiencies associated with certain aging production infrastructure.
|
•
|
Supply Chain Efficiencies and Competition. In order to compete effectively and capitalize on growth opportunities, we must retain and continue to grow our customer base, evaluate and undertake initiatives to reduce costs and streamline our supply chain. We continue to look for ways to deploy our personnel, systems, assets and infrastructure to create or enhance stockholder value. Areas of focus include distribution network optimization, opening a western U.S. distribution facility, methods of procurement, logistics, inventory management, supporting technology, and real estate assets.
|
•
|
Demographic and Channel Trends. Our success is dependent upon our ability to develop new products in response to demographic and other trends to better compete in areas such as premium coffee and tea, including expansion of our product portfolio by investing resources in what we believe to be key growth categories and different formats. We continue to focus on accelerating our roastery direct and e-commerce initiatives via a new digital platform.
|
•
|
Fluctuations in Green Coffee Prices. Our primary raw material is green coffee, an exchange-traded agricultural commodity that is subject to price fluctuations. Over the past five years, coffee “C” market near month price per pound ranged from approximately $0.88 to $1.74. The coffee “C” market near month price as of June 30, 2020 and 2019 was $1.04 and $1.10 per pound, respectively. The price and availability of green coffee directly impacts our results of operations. For additional details, see Risk Factors in Part I, Item 1A of this report.
|
•
|
Coffee Brewing Equipment and Service. We offer our customers a comprehensive equipment program and 24/7 nationwide equipment service which we believe differentiates us in the marketplace. We offer a full spectrum of equipment needs, which includes brewing equipment installation, water filtration systems, equipment training, and maintenance services to ensure we are able to meet our customer’s demands.
|
•
|
Hedging Strategy. We are exposed to market risk of losses due to changes in coffee commodity prices. Our business model strives to reduce the impact of green coffee price fluctuations on our financial results and to protect and stabilize our margins, principally through customer arrangements and derivative instruments, as further explained in Note 6, Derivative Instruments, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10‑K.
|
•
|
Sustainability. With an increasing focus on sustainability across the coffee and foodservice industry, and particularly from the customers we serve, it is important for us to embrace sustainability across our operations, in the quality of our products, as well as, how we treat our coffee growers. We believe that our collective efforts in measuring our social and environmental impact, creating programs for waste, water and energy reduction, promoting partnerships in our supply chain that aim at supply chain stability and food security, and focusing on employee engagement place us in a unique position to help retailers and foodservice operators create differentiated coffee and tea programs that can include sustainable supply chains, direct trade purchasing, training and technical assistance, recycling and composting networks, and packaging material reductions.
|
|
For the Years Ended June 30,
|
|
2020 vs 2019
|
|
2019 vs 2018
|
||||||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
Favorable (Unfavorable)
|
|
Favorable (Unfavorable)
|
||||||||||||||||
|
|
|
|
|
|
|
Change
|
|
% Change
|
|
Change
|
|
% Change
|
||||||||||||
Net sales
|
$
|
501,320
|
|
|
$
|
595,942
|
|
|
$
|
606,544
|
|
|
$
|
(94,622
|
)
|
|
(15.9
|
)%
|
|
$
|
(10,602
|
)
|
|
(1.7
|
)%
|
Cost of goods sold
|
363,198
|
|
|
416,840
|
|
|
399,155
|
|
|
53,642
|
|
|
12.9
|
%
|
|
(17,685
|
)
|
|
(4.4
|
)%
|
|||||
Gross profit
|
138,122
|
|
|
179,102
|
|
|
207,389
|
|
|
(40,980
|
)
|
|
(22.9
|
)%
|
|
(28,287
|
)
|
|
(13.6
|
)%
|
|||||
Selling expenses
|
121,762
|
|
|
139,647
|
|
|
153,391
|
|
|
17,885
|
|
|
12.8
|
%
|
|
13,744
|
|
|
9.0
|
%
|
|||||
General and administrative expenses
|
42,569
|
|
|
48,959
|
|
|
49,429
|
|
|
6,390
|
|
|
13.1
|
%
|
|
470
|
|
|
1.0
|
%
|
|||||
Restructuring and other transition expenses
|
—
|
|
|
4,733
|
|
|
662
|
|
|
4,733
|
|
|
100.0
|
%
|
|
(4,071
|
)
|
|
NM
|
|
|||||
Net (gains) losses from sales of assets
|
(25,237
|
)
|
|
465
|
|
|
(966
|
)
|
|
25,702
|
|
|
NM
|
|
|
(1,431
|
)
|
|
148.1
|
%
|
|||||
Impairment of goodwill and intangible assets
|
42,030
|
|
|
—
|
|
|
3,820
|
|
|
(42,030
|
)
|
|
NM
|
|
|
3,820
|
|
|
100.0
|
%
|
|||||
Operating expenses
|
181,124
|
|
|
193,804
|
|
|
206,336
|
|
|
12,680
|
|
|
6.5
|
%
|
|
12,532
|
|
|
6.1
|
%
|
|||||
(Loss) income from operations
|
(43,002
|
)
|
|
(14,702
|
)
|
|
1,053
|
|
|
(28,300
|
)
|
|
192.5
|
%
|
|
(15,755
|
)
|
|
NM
|
|
|||||
Other (expense) income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Dividend income
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
%
|
|
(12
|
)
|
|
(100.0
|
)%
|
|||||
Interest income
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
%
|
|
(2
|
)
|
|
(100.0
|
)%
|
|||||
Interest expense
|
(10,483
|
)
|
|
(12,000
|
)
|
|
(9,757
|
)
|
|
1,517
|
|
|
(12.6
|
)%
|
|
(2,243
|
)
|
|
23.0
|
%
|
|||||
Postretirement benefits curtailment gains and pension settlement (charge)
|
5,760
|
|
|
(10,948
|
)
|
|
—
|
|
|
16,708
|
|
|
NM
|
|
|
(10,948
|
)
|
|
NM
|
|
|||||
Other, net
|
10,443
|
|
|
4,166
|
|
|
7,722
|
|
|
6,277
|
|
|
150.7
|
%
|
|
(3,556
|
)
|
|
(46.1
|
)%
|
|||||
Total other income (expense)
|
5,720
|
|
|
(18,782
|
)
|
|
(2,021
|
)
|
|
24,502
|
|
|
(130.5
|
)%
|
|
(16,761
|
)
|
|
NM
|
|
|||||
Loss before taxes
|
(37,282
|
)
|
|
(33,484
|
)
|
|
(968
|
)
|
|
(3,798
|
)
|
|
11.3
|
%
|
|
(32,516
|
)
|
|
NM
|
|
|||||
Income tax (benefit) expense
|
(195
|
)
|
|
40,111
|
|
|
17,312
|
|
|
(40,306
|
)
|
|
(100.5
|
)%
|
|
22,799
|
|
|
131.7
|
%
|
|||||
Net loss
|
$
|
(37,087
|
)
|
|
$
|
(73,595
|
)
|
|
$
|
(18,280
|
)
|
|
$
|
36,508
|
|
|
(49.6
|
)%
|
|
$
|
(55,315
|
)
|
|
302.6
|
%
|
Less: Cumulative preferred dividends, undeclared and unpaid
|
554
|
|
|
535
|
|
|
389
|
|
|
19
|
|
|
3.6
|
%
|
|
146
|
|
|
37.5
|
%
|
|||||
Net loss available to common stockholders
|
$
|
(37,641
|
)
|
|
$
|
(74,130
|
)
|
|
$
|
(18,669
|
)
|
|
$
|
36,489
|
|
|
(49.2
|
)%
|
|
$
|
(55,461
|
)
|
|
297.1
|
%
|
|
For the Years Ended June 30,
|
|
2020 vs 2019
|
|
2019 vs 2018
|
||||||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
Favorable (Unfavorable)
|
|
Favorable (Unfavorable)
|
||||||||||||||||
|
|
|
|
|
|
|
Change
|
|
% Change
|
|
Change
|
|
% Change
|
||||||||||||
Units sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Coffee (Roasted)
|
80,560
|
|
|
86,478
|
|
|
85,943
|
|
|
(5,918
|
)
|
|
(6.84
|
)%
|
|
535
|
|
|
0.62
|
%
|
|||||
Coffee (Frozen Liquid)
|
310
|
|
|
427
|
|
|
407
|
|
|
(117
|
)
|
|
(27.40
|
)%
|
|
20
|
|
|
4.91
|
%
|
|||||
Tea (Iced & Hot)
|
2,381
|
|
|
2,755
|
|
|
2,706
|
|
|
(374
|
)
|
|
(13.58
|
)%
|
|
49
|
|
|
1.81
|
%
|
|||||
Culinary
|
6,237
|
|
|
7,932
|
|
|
9,227
|
|
|
(1,695
|
)
|
|
(21.37
|
)%
|
|
(1,295
|
)
|
|
(14.03
|
)%
|
|||||
Spice
|
589
|
|
|
792
|
|
|
933
|
|
|
(203
|
)
|
|
(25.63
|
)%
|
|
(141
|
)
|
|
(15.11
|
)%
|
|||||
Other beverages(1)
|
3,566
|
|
|
4,631
|
|
|
5,932
|
|
|
(1,065
|
)
|
|
(23.00
|
)%
|
|
(1,301
|
)
|
|
(21.93
|
)%
|
|||||
Total
|
93,643
|
|
|
103,015
|
|
|
105,148
|
|
|
(9,372
|
)
|
|
(9.10
|
)%
|
|
(2,133
|
)
|
|
(2.03
|
)%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unit Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Coffee (Roasted)
|
$
|
4.06
|
|
|
$
|
4.38
|
|
|
$
|
4.42
|
|
|
$
|
(0.32
|
)
|
|
(7.31
|
)%
|
|
$
|
(0.04
|
)
|
|
(0.90
|
)%
|
Coffee (Frozen Liquid)
|
$
|
92.32
|
|
|
$
|
80.89
|
|
|
$
|
85.49
|
|
|
$
|
11.43
|
|
|
14.13
|
%
|
|
$
|
(4.60
|
)
|
|
(5.38
|
)%
|
Tea (Iced & Hot)
|
$
|
10.65
|
|
|
$
|
12.02
|
|
|
$
|
12.00
|
|
|
$
|
(1.37
|
)
|
|
(11.40
|
)%
|
|
$
|
0.02
|
|
|
.17
|
%
|
Culinary
|
$
|
8.16
|
|
|
$
|
8.08
|
|
|
$
|
6.98
|
|
|
$
|
0.08
|
|
|
.99
|
%
|
|
$
|
1.10
|
|
|
15.76
|
%
|
Spice
|
$
|
36.46
|
|
|
$
|
30.43
|
|
|
$
|
26.96
|
|
|
$
|
6.03
|
|
|
19.82
|
%
|
|
$
|
3.47
|
|
|
12.87
|
%
|
Other beverages(1)
|
$
|
12.72
|
|
|
$
|
12.60
|
|
|
$
|
11.24
|
|
|
$
|
0.12
|
|
|
.95
|
%
|
|
$
|
1.36
|
|
|
12.10
|
%
|
Average unit price
|
$
|
5.35
|
|
|
$
|
5.79
|
|
|
$
|
5.77
|
|
|
$
|
(0.44
|
)
|
|
(7.60
|
)%
|
|
$
|
0.02
|
|
|
0.35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Net Sales By Product Category
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Coffee (Roasted)
|
$
|
327,283
|
|
|
$
|
378,583
|
|
|
$
|
379,951
|
|
|
$
|
(51,300
|
)
|
|
(13.55
|
)%
|
|
$
|
(1,368
|
)
|
|
(0.36
|
)%
|
Coffee (Frozen Liquid)
|
28,619
|
|
|
34,541
|
|
|
34,794
|
|
|
(5,922
|
)
|
|
(17.14
|
)%
|
|
(253
|
)
|
|
(.73
|
)%
|
|||||
Tea (Iced & Hot)
|
25,369
|
|
|
33,109
|
|
|
32,477
|
|
|
(7,740
|
)
|
|
(23.38
|
)%
|
|
632
|
|
|
1.95
|
%
|
|||||
Culinary
|
50,917
|
|
|
64,100
|
|
|
64,432
|
|
|
(13,183
|
)
|
|
(20.57
|
)%
|
|
(332
|
)
|
|
(.52
|
)%
|
|||||
Spice
|
21,473
|
|
|
24,101
|
|
|
25,150
|
|
|
(2,628
|
)
|
|
(10.90
|
)%
|
|
(1,049
|
)
|
|
(4.17
|
)%
|
|||||
Other beverages(1)
|
45,342
|
|
|
58,367
|
|
|
66,699
|
|
|
(13,025
|
)
|
|
(22.32
|
)%
|
|
(8,332
|
)
|
|
(12.49
|
)%
|
|||||
Net sales by product category
|
$
|
499,003
|
|
|
$
|
592,801
|
|
|
$
|
603,503
|
|
|
$
|
(93,798
|
)
|
|
(15.82
|
)%
|
|
$
|
(10,702
|
)
|
|
(1.77
|
)%
|
Fuel Surcharge
|
2,317
|
|
|
3,141
|
|
|
3,041
|
|
|
(824
|
)
|
|
(26.23
|
)%
|
|
100
|
|
|
3.29
|
%
|
|||||
Total
|
$
|
501,320
|
|
|
$
|
595,942
|
|
|
$
|
606,544
|
|
|
$
|
(94,622
|
)
|
|
(15.88
|
)%
|
|
$
|
(10,602
|
)
|
|
(1.75
|
)%
|
|
For Year Ended June 30,
2020 vs. 2019
|
|
% of Total Mix Change
|
|||
Effect of change in unit sales
|
$
|
(50.1
|
)
|
|
(53.0
|
)%
|
Effect of pricing and product mix changes
|
(44.5
|
)
|
|
(47.0
|
)%
|
|
Total decrease in net sales
|
$
|
(94.6
|
)
|
|
(100.0
|
)%
|
•
|
postretirement medical curtailment gains in the current year period;
|
•
|
pension settlement charge in prior year period;
|
•
|
higher employee postretirement benefit gains due to the plan curtailment;
|
•
|
lower interest expense; and
|
•
|
lower net losses on coffee-related derivative instruments in the fiscal year ended June 30, 2020.
|
|
For Year Ended June 30,
2019 vs. 2018
|
|
% of Total Mix Change
|
|||
Effect of change in unit sales
|
$
|
(12.4
|
)
|
|
(117.0
|
)%
|
Effect of pricing and product mix changes
|
1.8
|
|
|
17.0
|
%
|
|
Total decrease in net sales
|
$
|
(10.6
|
)
|
|
(100.0
|
)%
|
•
|
income taxes;
|
•
|
interest expense; and
|
•
|
depreciation and amortization expense.
|
•
|
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;
|
•
|
restructuring and other transition expenses;
|
•
|
severance costs;
|
•
|
proxy contest-related expenses;
|
•
|
non-recurring costs associated with the COVID-19 pandemic;
|
•
|
net gains and losses from sales of assets;
|
•
|
non-cash pension settlements and postretirement benefits curtailment; and
|
•
|
acquisition, integration and strategic costs.
|
|
|
For the Year Ended June 30,
|
||||||||||
(In thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Net loss, as reported
|
|
$
|
(37,087
|
)
|
|
$
|
(73,595
|
)
|
|
$
|
(18,280
|
)
|
Income tax (benefit) expense
|
|
(195
|
)
|
|
40,111
|
|
|
17,312
|
|
|||
Interest expense(1)
|
|
5,590
|
|
|
6,036
|
|
|
3,177
|
|
|||
Depreciation and amortization expense
|
|
29,896
|
|
|
31,065
|
|
|
30,464
|
|
|||
EBITDA
|
|
$
|
(1,796
|
)
|
|
$
|
3,617
|
|
|
$
|
32,673
|
|
EBITDA Margin
|
|
(0.4
|
)%
|
|
0.6
|
%
|
|
5.4
|
%
|
(1)
|
Excludes interest expense related to pension plans and postretirement benefits.
|
|
|
Year Ended June 30,
|
|||||||||||
(In thousands)
|
|
2020
|
|
2019
|
|
2018
|
|||||||
Net loss, as reported
|
|
$
|
(37,087
|
)
|
|
$
|
(73,595
|
)
|
|
$
|
(18,280
|
)
|
|
Income tax (benefit) expense
|
|
(195
|
)
|
|
40,111
|
|
|
17,312
|
|
||||
Interest expense(1)
|
|
5,590
|
|
|
6,036
|
|
|
3,177
|
|
||||
Income from short-term investments
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
||||
Depreciation and amortization expense
|
|
29,896
|
|
|
31,065
|
|
|
30,464
|
|
||||
ESOP and share-based compensation expense
|
|
4,329
|
|
|
3,723
|
|
|
3,822
|
|
||||
Restructuring and other transition expenses(2)
|
|
—
|
|
|
4,733
|
|
|
662
|
|
||||
Strategic initiatives
|
341,000
|
|
523
|
|
|
—
|
|
|
—
|
|
|||
Net (gains) losses from sales of assets
|
|
(25,237
|
)
|
|
465
|
|
|
(966
|
)
|
||||
Impairment of goodwill and intangible assets
|
|
42,030
|
|
|
—
|
|
|
3,820
|
|
||||
Non-recurring costs associated with the COVID-19 pandemic
|
|
362
|
|
|
—
|
|
|
—
|
|
||||
Postretirement benefits gains curtailment and pension settlement charge
|
|
(5,760
|
)
|
|
10,948
|
|
|
—
|
|
||||
Proxy contest-related expenses
|
|
463
|
|
|
—
|
|
|
—
|
|
||||
Acquisition and integration costs
|
|
—
|
|
|
6,123
|
|
|
7,570
|
|
||||
Severance
|
2,273,000
|
|
3,828
|
|
|
2,273
|
|
|
—
|
|
|||
Adjusted EBITDA(3)
|
|
$
|
18,742
|
|
|
$
|
31,882
|
|
|
$
|
47,562
|
|
|
Adjusted EBITDA Margin
|
|
3.7
|
%
|
|
5.3
|
%
|
|
7.8
|
%
|
(1)
|
Excludes interest expense related to pension plans and postretirement benefits.
|
(2)
|
Fiscal year ended June 30, 2019, includes $3.4 million, including interest, assessed by the WC Pension Trust representing the Company’s share of the WCTPP unfunded benefits due to the Company’s partial withdrawal from the WCTPP as a result of employment actions taken by the Company in 2016 in connection with the Corporate Relocation Plan, net of payments of $0.8 million.
|
(3)
|
Adjusted EBITDA for fiscal 2020 includes $7.2 million of higher amortized gains resulting from the curtailment of the postretirement medical plan in March 2020. These higher gains will continue until the plan sunset on January 1, 2021. See Note 13, Employee Benefit Plans, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10‑K.
|
|
|
|
|
|
|
|
|
June 30, 2020
|
|
June 30, 2019
|
||||||||||
(In thousands)
|
|
Debt Origination Date
|
|
Maturity
|
|
Original Borrowing Amount
|
|
Carrying Value
|
|
Weighted Average Interest Rate
|
|
Carrying Value
|
|
Weighted Average Interest Rate
|
||||||
Credit Facility
|
|
Revolver
|
|
11/6/2023
|
|
N/A
|
|
$
|
122,000
|
|
|
4.91
|
%
|
|
$
|
92,000
|
|
|
3.98
|
%
|
(1)
|
retained the revolving commitments under the Credit Agreement of $125.0 million and the sublimit on letters of credit and swingline loans of $15.0 million each;
|
(2)
|
added a $5.0 million quarterly commitment reduction beginning September 30, 2021;
|
(3)
|
adjusted from cash flow-based to an asset-based lending structure with borrowing a base of 85% of eligible accounts receivable plus 50% of eligible inventory with certain permitted maximum over advance amounts;
|
(4)
|
removed all previous financial covenants of net leverage ratio, interest coverage ratio and minimum EBITDA;
|
(5)
|
added a covenant relief period (commencing on the effective date of the Third Amendment and ending upon delivery of a compliance certificate on or after fiscal month ending September 30, 2021), during which the Company must comply with the following:
|
(6)
|
added a covenant requiring us to maintain a minimum liquidity covenant, tested on a weekly basis;
|
(7)
|
added an anti-cash hoarding provision;
|
(8)
|
added a minimum fixed charge coverage ratio of 1.05:1.00 commencing with fiscal quarter ending September 30, 2021, and tested on a quarterly basis thereafter;
|
(9)
|
modified the applicable margin for base rate loans to range from PRIME + 3.50% to PRIME + 4.50% per annum and the applicable margin for Eurodollar loans to range from Adjusted LIBO Rate + 4.50% to Adjusted LIBO Rate + 5.50% per annum and fixed the commitment fee at 0.50%;
|
(10)
|
provided for the revolving commitments to be reduced upon the occurrence of certain asset dispositions and incurrence of non-permitted indebtedness and imposed additional restrictions on the Company’s ability to utilize certain other negative covenant baskets; and
|
(11)
|
added a requirement to provide mortgages and related mortgage instruments with respect to certain specified real property owned by the Company.
|
•
|
amended our existing senior secured revolving credit facility, as described above;
|
•
|
reduced headcount and furloughed a significant percentage of employees;
|
•
|
eliminated fiscal third quarter 2020 cash compensation for our Board of Directors;
|
•
|
temporarily decreased executive leadership, corporate team members’ and all exempt employees’ (except route sales representatives) base salaries by 15%;
|
•
|
reduced discretionary spending, including a moratorium on all travel;
|
•
|
reduced fiscal year ending 2020 management incentive bonus program;
|
•
|
reduced plant production costs in two of our plants;
|
•
|
suspended 401(k) cash matching for all eligible employees;
|
•
|
reduced capital expenditures while also closely managing inventory and other spending;
|
•
|
implemented cost controls throughout our coffee brewing equipment (“CBE”) program service network;
|
•
|
instituted cost savings to reduce our selling, general and administrative expenses; and
|
•
|
reduced our DSD supply chain network costs by reducing freight, and fleet, and consolidating routes.
|
|
For the Years Ended June 30,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
Condensed Consolidated Statements of cash flows data (in thousands)
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
$
|
1,455
|
|
|
$
|
35,450
|
|
|
$
|
8,855
|
|
Net cash used in investing activities
|
21,917
|
|
|
(32,361
|
)
|
|
(74,640
|
)
|
|||
Net cash provided by financing activities
|
29,658
|
|
|
1,456
|
|
|
61,982
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
53,030
|
|
|
$
|
4,545
|
|
|
$
|
(3,803
|
)
|
|
|
Payment due by period
|
||||||||||||||||||
(In thousands)
|
|
Total
|
|
Less Than
One Year
|
|
1-3
Years
|
|
3-5
Years
|
|
More Than
5 Years
|
||||||||||
Contractual obligations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating lease obligations(1)
|
|
$
|
21,482
|
|
|
$
|
5,854
|
|
|
$
|
8,348
|
|
|
$
|
6,157
|
|
|
$
|
1,123
|
|
Finance lease obligations(1)
|
|
9
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Pension plan obligations(2)
|
|
72,790
|
|
|
7,260
|
|
|
14,170
|
|
|
14,700
|
|
|
36,660
|
|
|||||
Postretirement benefits other than
pension plans(2)
|
|
5,166
|
|
|
750
|
|
|
915
|
|
|
963
|
|
|
2,538
|
|
|||||
Revolving credit facility
|
|
122,000
|
|
|
—
|
|
|
—
|
|
|
122,000
|
|
|
—
|
|
|||||
Purchase commitments(3)
|
|
65,702
|
|
|
65,702
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Derivative liabilities—noncurrent
|
|
2,859
|
|
|
—
|
|
|
2,859
|
|
|
—
|
|
|
—
|
|
|||||
Cumulative Preferred dividends, undeclared and unpaid-non-current
|
|
1,478
|
|
|
—
|
|
|
1,478
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
|
$
|
291,486
|
|
|
$
|
79,575
|
|
|
$
|
27,770
|
|
|
$
|
143,820
|
|
|
$
|
40,321
|
|
|
|
June 30,
|
||||||||||
(In thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Maintenance:
|
|
|
|
|
|
|
||||||
Coffee brewing equipment
|
|
$
|
6,479
|
|
|
$
|
14,925
|
|
|
$
|
12,067
|
|
Building and facilities
|
|
154
|
|
|
106
|
|
|
542
|
|
|||
Vehicles, machinery and equipment
|
|
1,772
|
|
|
2,787
|
|
|
5,513
|
|
|||
Software, office furniture and equipment
|
|
3,440
|
|
|
3,270
|
|
|
3,660
|
|
|||
Capital expenditures, maintenance
|
|
$
|
11,845
|
|
|
$
|
21,088
|
|
|
$
|
21,782
|
|
|
|
|
|
|
|
|
||||||
Expansion Project:
|
|
|
|
|
|
|
||||||
Machinery and equipment
|
|
$
|
5,417
|
|
|
$
|
13,671
|
|
|
$
|
10,746
|
|
IT equipment
|
|
$
|
298
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Capital expenditures, Expansion Project
|
|
$
|
5,715
|
|
|
$
|
13,671
|
|
|
$
|
10,746
|
|
|
|
|
|
|
|
|
||||||
New Facility Costs:
|
|
|
|
|
|
|
||||||
Building and facilities, including land
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,577
|
|
Machinery and equipment
|
|
—
|
|
|
—
|
|
|
2,489
|
|
|||
Software, office furniture and equipment
|
|
—
|
|
|
—
|
|
|
426
|
|
|||
Capital expenditures, New Facility
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,492
|
|
Total capital expenditures
|
|
$
|
17,560
|
|
|
$
|
34,759
|
|
|
$
|
37,020
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
($ in thousands)
|
|
Principal
|
|
Interest Rate
|
|
Annual Interest Expense
|
|||
–150 basis points
|
|
$57,000
|
|
3.41
|
%
|
|
$
|
1,944
|
|
–100 basis points
|
|
$57,000
|
|
3.91
|
%
|
|
$
|
2,229
|
|
Unchanged
|
|
$57,000
|
|
4.91
|
%
|
|
$
|
2,799
|
|
+100 basis points
|
|
$57,000
|
|
5.91
|
%
|
|
$
|
3,369
|
|
+150 basis points
|
|
$57,000
|
|
6.41
|
%
|
|
$
|
3,654
|
|
|
|
Increase (Decrease) to Net Income
|
|
Increase (Decrease) to AOCI
|
||||||||||||
|
|
10% Increase in Underlying Rate
|
|
10% Decrease in Underlying Rate
|
|
10% Increase in Underlying Rate
|
|
10% Decrease in Underlying Rate
|
||||||||
(In thousands)
|
|
|||||||||||||||
Coffee-related derivative instruments(1)
|
|
$
|
861
|
|
|
$
|
(861
|
)
|
|
$
|
3,813
|
|
|
$
|
(3,813
|
)
|
Item 8.
|
Financial Statements and Supplementary Data
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Plan Category
|
|
Number of
Shares to be
Issued Upon
Exercise / Vesting of
Outstanding
Options or Rights(2)
|
|
Weighted
Average
Exercise
Price of
Outstanding
Options(3)
|
|
Number of
Shares
Remaining
Available
for Future
Issuance(4)
|
Equity compensation plans approved by stockholders(1)
|
|
535,430
|
|
$13.56
|
|
458,947
|
Equity compensation plans not approved by stockholders (5)
|
|
88,495
|
|
$6.72
|
|
211,505
|
Total
|
|
623,925
|
|
|
|
670,452
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
(a)
|
List of Financial Statements and Financial Statement Schedules:
|
|
Consolidated Balance Sheets as of June 30, 2020 and 2019.
|
|
Consolidated Statements of Operations for the Years Ended June 30, 2020, 2019 and 2018.
|
|
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended June 30, 2020, 2019 and 2018.
|
|
Consolidated Statements of Cash Flows for the Years Ended June 30, 2020, 2019 and 2018.
|
|
Consolidated Statements of Stockholders’ Equity for the Years Ended June 30, 2020, 2019 and 2018.
|
|
Notes to Consolidated Financial Statements.
|
(b)
|
Exhibits:
|
Exhibit No.
|
|
Description
|
|
|
|
2.1
|
|
|
|
|
|
2.2
|
|
|
|
|
|
2.3
|
|
|
|
|
|
2.4
|
|
|
|
|
|
3.1
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
3.5
|
|
|
|
|
|
3.6
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10
|
|
|
|
|
|
10.11
|
|
|
|
|
|
10.12
|
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
Exhibit No.
|
|
Description
|
|
|
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
10.22
|
|
|
|
|
|
10.23
|
|
|
|
|
|
10.24
|
|
|
|
|
|
10.25
|
|
|
|
|
|
10.26
|
|
|
|
|
|
10.27
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
10.28
|
|
|
|
|
|
10.29
|
|
|
|
|
|
10.30
|
|
|
|
|
|
10.31
|
|
|
|
|
|
10.32
|
|
|
|
|
|
10.33
|
|
|
|
|
|
10.34
|
|
|
|
|
|
10.35
|
|
|
|
|
|
10.36
|
|
|
|
|
|
10.37
|
|
|
|
|
|
10.38
|
|
|
|
|
|
10.39
|
|
|
|
|
|
10.40
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
10.41
|
|
|
|
|
|
10.42
|
|
|
|
|
|
10.43
|
|
|
|
|
|
10.44
|
|
|
|
|
|
10.45
|
|
|
|
|
|
10.46
|
|
|
|
|
|
|
|
|
10.47
|
|
|
|
|
|
10.48
|
|
|
|
|
|
10.49
|
|
|
|
|
|
10.50
|
|
|
|
|
|
10.51
|
|
|
|
|
|
10.52
|
|
|
|
|
|
10.53
|
|
|
|
|
|
10.54
|
|
Exhibit No.
|
|
Description
|
|
|
|
10.55
|
|
|
|
|
|
10.56
|
|
|
|
|
|
10.57
|
|
|
|
|
|
10.58
|
|
|
|
|
|
10.59
|
|
|
|
|
|
10.60
|
|
|
|
|
|
10.61
|
|
|
|
|
|
10.62
|
|
|
|
|
|
10.63
|
|
|
|
|
|
10.64
|
|
|
|
|
|
10.65
|
|
|
|
|
|
10.66
|
|
|
|
|
|
10.67
|
|
|
|
|
|
10.68
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
10.69
|
|
|
|
|
|
10.70
|
|
|
|
|
|
10.71
|
|
|
|
|
|
10.72
|
|
|
|
|
|
14.1
|
|
|
|
|
|
21.1
|
|
|
|
|
|
23.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (furnished herewith).
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document (furnished herewith).
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document (furnished herewith).
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document (furnished herewith).
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document (furnished herewith).
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document (furnished herewith).
|
104
|
|
Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (furnished herewith).
|
*
|
Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and/or exhibits to this agreement have been omitted. The Registrant undertakes to supplementally furnish copies of the omitted schedules and/or exhibits to the Securities and Exchange Commission upon request.
|
**
|
Management contract or compensatory plan or arrangement.
|
Item 16.
|
Form 10-K Summary
|
|
|
|
|
|
|
|
FARMER BROS. CO.
|
||||
|
|
|
|||
|
By:
|
|
/s/ Deverl Maserang
|
||
|
|
|
Deverl Maserang
President and Chief Executive Officer (principal executive officer) |
||
|
|
|
September 10, 2020
|
||
|
|
|
|
||
|
By:
|
|
/s/ Scott R. Drake
|
||
|
|
|
Scott R. Drake
Chief Financial Officer (principal financial officer) |
||
|
|
|
September 10, 2020
|
|
|
|
|
|
/s/ Christopher P. Mottern
|
|
Chairman of the Board and Director
|
|
September 10, 2020
|
Christopher P. Mottern
|
|
|
|
|
|
|
|
|
|
/s/ Deverl Maserang
|
|
President and Chief Executive Officer
|
|
September 10, 2020
|
Deverl Maserang
|
|
|
|
|
|
|
|
|
|
/s/ Allison M. Boersma
|
|
Director
|
|
September 10, 2020
|
Allison M. Boersma
|
|
|
|
|
|
|
|
|
|
/s/ Randy E. Clark
|
|
Director
|
|
September 10, 2020
|
Randy E. Clark
|
|
|
|
|
|
|
|
|
|
/s/ Stacy Loretz-Congdon
|
|
Director
|
|
September 10, 2020
|
Stacy Loretz-Congdon
|
|
|
|
|
|
|
|
|
|
/s/ Charles F. Marcy
|
|
Director
|
|
September 10, 2020
|
Charles F. Marcy
|
|
|
|
|
|
|
|
|
|
/s/ David W. Ritterbush
|
|
Director
|
|
September 10, 2020
|
David W. Ritterbush
|
|
|
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30,
|
||||||
|
2020
|
|
2019
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
60,013
|
|
|
$
|
6,983
|
|
Accounts receivable, net of allowance for doubtful accounts of $1,796 and $1,324, respectively
|
40,882
|
|
|
55,155
|
|
||
Inventories
|
67,408
|
|
|
87,910
|
|
||
Income tax receivable
|
831
|
|
|
1,191
|
|
||
Short-term derivative assets
|
165
|
|
|
1,865
|
|
||
Prepaid expenses
|
7,414
|
|
|
6,804
|
|
||
Total current assets
|
176,713
|
|
|
159,908
|
|
||
Property, plant and equipment, net
|
165,633
|
|
|
189,458
|
|
||
Goodwill
|
—
|
|
|
36,224
|
|
||
Intangible assets, net
|
20,662
|
|
|
28,878
|
|
||
Other assets
|
8,564
|
|
|
9,468
|
|
||
Long-term derivative assets
|
10
|
|
|
674
|
|
||
Right-of-use operating lease assets
|
21,117
|
|
|
—
|
|
||
Total assets
|
$
|
392,699
|
|
|
$
|
424,610
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
36,987
|
|
|
72,771
|
|
||
Accrued payroll expenses
|
9,394
|
|
|
14,518
|
|
||
Operating leases liabilities - current
|
5,854
|
|
|
—
|
|
||
Short-term derivative liabilities
|
5,255
|
|
|
1,474
|
|
||
Other current liabilities
|
6,802
|
|
|
7,309
|
|
||
Total current liabilities
|
64,292
|
|
|
96,072
|
|
||
Long-term borrowings under revolving credit facility
|
122,000
|
|
|
92,000
|
|
||
Accrued pension liabilities
|
58,772
|
|
|
47,216
|
|
||
Accrued postretirement benefits
|
9,993
|
|
|
23,024
|
|
||
Accrued workers’ compensation liabilities
|
4,569
|
|
|
4,747
|
|
||
Operating lease liabilities - noncurrent
|
15,628
|
|
|
—
|
|
||
Other long-term liabilities
|
5,532
|
|
|
4,057
|
|
||
Total liabilities
|
280,786
|
|
|
267,116
|
|
||
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 shares issued and outstanding as of June 30, 2020 and 2019, respectively; liquidation preference of $16,178 and $15,624 as of June 30, 2020 and 2019, respectively
|
15
|
|
|
15
|
|
||
Common stock, $1.00 par value, 25,000,000 shares authorized; 17,347,774 and 17,042,132 shares issued and outstanding at June 30, 2020 and 2019, respectively
|
17,348
|
|
|
17,042
|
|
||
Additional paid-in capital
|
62,043
|
|
|
57,912
|
|
||
Retained earnings
|
108,536
|
|
|
146,177
|
|
||
Accumulated other comprehensive loss
|
(76,029
|
)
|
|
(63,652
|
)
|
||
Total stockholders’ equity
|
$
|
111,913
|
|
|
$
|
157,494
|
|
Total liabilities and stockholders’ equity
|
$
|
392,699
|
|
|
$
|
424,610
|
|
|
For the Years Ended June 30,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
Net sales
|
$
|
501,320
|
|
|
$
|
595,942
|
|
|
$
|
606,544
|
|
Cost of goods sold
|
363,198
|
|
|
416,840
|
|
|
399,155
|
|
|||
Gross profit
|
138,122
|
|
|
179,102
|
|
|
207,389
|
|
|||
Selling expenses
|
121,762
|
|
|
139,647
|
|
|
153,391
|
|
|||
General and administrative expenses
|
42,569
|
|
|
48,959
|
|
|
49,429
|
|
|||
Restructuring and other transition expenses
|
—
|
|
|
4,733
|
|
|
662
|
|
|||
Net (gains) losses from sales of assets
|
(25,237
|
)
|
|
465
|
|
|
(966
|
)
|
|||
Impairment of goodwill and intangible assets
|
42,030
|
|
|
—
|
|
|
3,820
|
|
|||
Operating expenses
|
181,124
|
|
|
193,804
|
|
|
206,336
|
|
|||
(Loss) income from operations
|
(43,002
|
)
|
|
(14,702
|
)
|
|
1,053
|
|
|||
Other (expense) income:
|
|
|
|
|
|
||||||
Dividend income
|
—
|
|
|
—
|
|
|
12
|
|
|||
Interest income
|
—
|
|
|
—
|
|
|
2
|
|
|||
Interest expense
|
(10,483
|
)
|
|
(12,000
|
)
|
|
(9,757
|
)
|
|||
Postretirement benefits curtailment gains and pension settlement (charge)
|
5,760
|
|
|
(10,948
|
)
|
|
—
|
|
|||
Other, net
|
10,443
|
|
|
4,166
|
|
|
7,722
|
|
|||
Total other income (expense)
|
5,720
|
|
|
(18,782
|
)
|
|
(2,021
|
)
|
|||
Loss before taxes
|
(37,282
|
)
|
|
(33,484
|
)
|
|
(968
|
)
|
|||
Income tax (benefit) expense
|
(195
|
)
|
|
40,111
|
|
|
17,312
|
|
|||
Net loss
|
$
|
(37,087
|
)
|
|
$
|
(73,595
|
)
|
|
$
|
(18,280
|
)
|
Less: Cumulative preferred dividends, undeclared and unpaid
|
554
|
|
|
535
|
|
|
389
|
|
|||
Net loss available to common stockholders
|
$
|
(37,641
|
)
|
|
$
|
(74,130
|
)
|
|
$
|
(18,669
|
)
|
Net loss available to common stockholders per common share—basic
|
$
|
(2.19
|
)
|
|
$
|
(4.36
|
)
|
|
$
|
(1.11
|
)
|
Net loss available to common stockholders per common share—diluted
|
$
|
(2.19
|
)
|
|
$
|
(4.36
|
)
|
|
$
|
(1.11
|
)
|
Weighted average common shares outstanding—basic
|
17,205,849
|
|
|
16,996,354
|
|
|
16,815,020
|
|
|||
Weighted average common shares outstanding—diluted
|
17,205,849
|
|
|
16,996,354
|
|
|
16,815,020
|
|
|
For the Years Ended June 30,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
Net loss
|
$
|
(37,087
|
)
|
|
$
|
(73,595
|
)
|
|
$
|
(18,280
|
)
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
||||||
Unrealized losses on derivative instruments designated as cash flow hedges, net of tax
|
(7,518
|
)
|
|
(9,198
|
)
|
|
(5,922
|
)
|
|||
Losses on derivative instruments designated as cash flow hedges reclassified to cost of goods sold, net of tax
|
8,863
|
|
|
9,197
|
|
|
800
|
|
|||
Change in pension and retiree benefit obligations, net of tax
|
(13,722
|
)
|
|
(1,612
|
)
|
|
4,576
|
|
|||
Total comprehensive loss, net of tax
|
$
|
(49,464
|
)
|
|
$
|
(75,208
|
)
|
|
$
|
(18,826
|
)
|
FARMER BROS. CO.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share and per share data)
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Preferred Shares
|
|
Preferred Stock Amount
|
|
Common
Shares
|
|
Common Stock
Amount
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Unearned
ESOP
Shares
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
|
||||||||||||||||
Balance at June 30, 2017
|
—
|
|
|
—
|
|
|
16,846,002
|
|
|
16,846
|
|
|
41,495
|
|
|
236,993
|
|
|
(4,289
|
)
|
|
(61,493
|
)
|
|
229,552
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,280
|
)
|
|
—
|
|
|
—
|
|
|
(18,280
|
)
|
|||||||
Adjustment due to the adoption of ASU 2017-12
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
342
|
|
|
—
|
|
|
(209
|
)
|
|
133
|
|
|||||||
Adjustment due to the adoption of ASU 2016-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,641
|
|
|
—
|
|
|
—
|
|
|
1,641
|
|
|||||||
Unrealized losses on derivative instruments designated as cash flow hedges, net of reclassifications to cost of goods sold, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,913
|
)
|
|
(4,913
|
)
|
|||||||
Change in the funded status of retiree benefit obligations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,576
|
|
|
4,576
|
|
|||||||
ESOP compensation expense, including reclassifications
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150
|
|
|
—
|
|
|
2,144
|
|
|
—
|
|
|
2,294
|
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
9,155
|
|
|
9
|
|
|
1,518
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,527
|
|
|||||||
Stock option exercises
|
—
|
|
|
—
|
|
|
96,502
|
|
|
97
|
|
|
1,245
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,342
|
|
|||||||
Consideration for Boyd Coffee acquisition
|
14,700
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
11,557
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,572
|
|
|||||||
Cumulative preferred dividends, undeclared and unpaid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(389
|
)
|
|
—
|
|
|
—
|
|
|
(389
|
)
|
|||||||
Balance at June 30, 2018
|
14,700
|
|
|
15
|
|
|
16,951,659
|
|
|
16,952
|
|
|
55,965
|
|
|
220,307
|
|
|
(2,145
|
)
|
|
(62,039
|
)
|
|
229,055
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(73,595
|
)
|
|
—
|
|
|
—
|
|
|
(73,595
|
)
|
|||||||
Net reclassification of unrealized losses on cash flow hedges, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||||
Change in pension and retiree benefit obligations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,612
|
)
|
|
(1,612
|
)
|
|||||||
ESOP compensation expense, including reclassifications
|
—
|
|
|
—
|
|
|
37,571
|
|
|
37
|
|
|
364
|
|
|
—
|
|
|
2,145
|
|
|
—
|
|
|
2,546
|
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
18,298
|
|
|
18
|
|
|
1,111
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,129
|
|
|||||||
Stock option exercises
|
—
|
|
|
—
|
|
|
34,604
|
|
|
35
|
|
|
472
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
507
|
|
|||||||
Cumulative preferred dividends, undeclared and unpaid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(535
|
)
|
|
—
|
|
|
—
|
|
|
(535
|
)
|
|||||||
Balance at June 30, 2019
|
14,700
|
|
|
$
|
15
|
|
|
17,042,132
|
|
|
$
|
17,042
|
|
|
$
|
57,912
|
|
|
$
|
146,177
|
|
|
$
|
—
|
|
|
$
|
(63,652
|
)
|
|
$
|
157,494
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37,087
|
)
|
|
—
|
|
|
—
|
|
|
(37,087
|
)
|
|||||||
Net reclassification of unrealized gains on cash flow hedges, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,345
|
|
|
1,345
|
|
|||||||
Change in retiree benefit obligations, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,722
|
)
|
|
(13,722
|
)
|
|||||||
ESOP compensation expense, including reclassifications
|
—
|
|
|
—
|
|
|
266,429
|
|
|
266
|
|
|
2,719
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,985
|
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,323
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,323
|
|
|||||||
Issuance of common stock and stock option exercises
|
—
|
|
|
—
|
|
|
39,213
|
|
|
40
|
|
|
89
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
129
|
|
|||||||
Cumulative preferred dividends, undeclared and unpaid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(554
|
)
|
|
—
|
|
|
—
|
|
|
(554
|
)
|
|||||||
Balance at June 30, 2020
|
14,700
|
|
|
$
|
15
|
|
|
17,347,774
|
|
|
$
|
17,348
|
|
|
$
|
62,043
|
|
|
$
|
108,536
|
|
|
$
|
—
|
|
|
$
|
(76,029
|
)
|
|
$
|
111,913
|
|
FARMER BROS. CO.
|
|||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||||||
(In thousands)
|
|||||||||||
|
For the Years Ended June 30,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(37,087
|
)
|
|
$
|
(73,595
|
)
|
|
$
|
(18,280
|
)
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|||||||||||
Depreciation and amortization
|
29,896
|
|
|
31,065
|
|
|
30,464
|
|
|||
Provision for doubtful accounts
|
1,379
|
|
|
1,363
|
|
|
137
|
|
|||
Impairment of goodwill and intangible assets
|
42,030
|
|
|
—
|
|
|
3,820
|
|
|||
Change in estimated fair value of contingent earnout consideration
|
—
|
|
|
—
|
|
|
(500
|
)
|
|||
Restructuring and other transition expenses, net of payments
|
—
|
|
|
1,172
|
|
|
(1,185
|
)
|
|||
Deferred income taxes
|
(300
|
)
|
|
41,654
|
|
|
17,155
|
|
|||
Postretirement benefits and pension settlement cost
|
(5,760
|
)
|
|
10,948
|
|
|
—
|
|
|||
Net (gains) losses from sales of assets
|
(25,237
|
)
|
|
466
|
|
|
(995
|
)
|
|||
ESOP and share-based compensation expense
|
4,309
|
|
|
3,674
|
|
|
3,822
|
|
|||
Net losses on derivative instruments and investments
|
9,818
|
|
|
9,196
|
|
|
1,982
|
|
|||
Change in operating assets and liabilities:
|
|||||||||||
Accounts receivable
|
12,893
|
|
|
2,757
|
|
|
(4,628
|
)
|
|||
Inventories
|
19,530
|
|
|
16,192
|
|
|
(15,513
|
)
|
|||
Derivative (liabilities) assets, net
|
(1,082
|
)
|
|
(18,901
|
)
|
|
(7,782
|
)
|
|||
Other assets
|
990
|
|
|
114
|
|
|
1,073
|
|
|||
Accounts payable
|
(35,784
|
)
|
|
16,546
|
|
|
3,864
|
|
|||
Accrued expenses and other
|
(14,140
|
)
|
|
(7,201
|
)
|
|
(4,579
|
)
|
|||
Net cash provided by operating activities
|
$
|
1,455
|
|
|
$
|
35,450
|
|
|
$
|
8,855
|
|
Cash flows from investing activities:
|
|||||||||||
Acquisitions of businesses, net of cash acquired
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(39,608
|
)
|
Purchases of property, plant and equipment
|
(17,560
|
)
|
|
(34,760
|
)
|
|
(35,443
|
)
|
|||
Purchases of assets for construction of New Facility
|
—
|
|
|
—
|
|
|
(1,577
|
)
|
|||
Proceeds from sales of property, plant and equipment
|
39,477
|
|
|
2,399
|
|
|
1,988
|
|
|||
Net cash provided (used) in investing activities
|
$
|
21,917
|
|
|
$
|
(32,361
|
)
|
|
$
|
(74,640
|
)
|
Cash flows from financing activities:
|
|||||||||||
Proceeds from revolving credit facility
|
$
|
90,000
|
|
|
$
|
50,642
|
|
|
$
|
85,315
|
|
Repayments on revolving credit facility
|
(60,000
|
)
|
|
(48,429
|
)
|
|
(23,149
|
)
|
|||
Payments of finance lease obligations
|
(53
|
)
|
|
(215
|
)
|
|
(947
|
)
|
|||
Payment of financing costs
|
(418
|
)
|
|
(1,049
|
)
|
|
(579
|
)
|
|||
Proceeds from stock option exercises
|
129
|
|
|
507
|
|
|
1,342
|
|
|||
Net cash provided by financing activities
|
$
|
29,658
|
|
|
$
|
1,456
|
|
|
$
|
61,982
|
|
Net increase (decrease) in cash and cash equivalents
|
$
|
53,030
|
|
|
$
|
4,545
|
|
|
$
|
(3,803
|
)
|
Cash and cash equivalents at beginning of year
|
6,983
|
|
|
2,438
|
|
|
6,241
|
|
|||
Cash and cash equivalents at end of year
|
$
|
60,013
|
|
|
$
|
6,983
|
|
|
$
|
2,438
|
|
FARMER BROS. CO.
|
|||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
|
|||||||||||
(In thousands)
|
|||||||||||
|
For the Years Ended June 30,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
4,426
|
|
|
$
|
5,512
|
|
|
$
|
3,177
|
|
Cash paid for income taxes
|
$
|
21
|
|
|
$
|
107
|
|
|
$
|
144
|
|
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Non-cash additions to property, plant and equipment
|
$
|
446
|
|
|
$
|
2,619
|
|
|
$
|
2,814
|
|
Non-cash portion of earnout receivable recognized—Spice Assets sale
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
298
|
|
Non-cash portion of earnout payable recognized—West Coast Coffee acquisition
|
$
|
—
|
|
|
$
|
400
|
|
|
$
|
—
|
|
Non-cash receivable from West Coast Coffee—post-closing final working capital adjustment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
218
|
|
Non-cash post-closing working capital adjustment—Boyd Coffee acquisition
|
$
|
—
|
|
|
$
|
2,277
|
|
|
$
|
1,056
|
|
Non-cash Issuance of 401-K shares of Common Stock
|
$
|
266
|
|
|
$
|
37
|
|
|
$
|
—
|
|
Non-cash consideration given-Issuance of Series A Preferred Stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,756
|
|
Cumulative preferred dividends, undeclared and unpaid
|
$
|
554
|
|
|
$
|
535
|
|
|
$
|
389
|
|
Derivative Treatment
|
|
Accounting Method
|
Normal purchases and normal sales exception
|
|
Accrual accounting
|
Designated in a qualifying hedging relationship
|
|
Hedge accounting
|
All other derivative instruments
|
|
Mark-to-market accounting
|
Buildings and facilities
|
10 to 30 years
|
Machinery and equipment
|
3 to 15 years
|
Equipment under finance leases
|
Shorter of term of lease or estimated useful life
|
Office furniture and equipment
|
5 to 7 years
|
Capitalized software
|
3 to 5 years
|
Standard
|
|
Description
|
|
Effective Date
|
|
Effect on the Financial Statements or Other Significant Matters
|
In March 2020, the FASB issued ASU No. 2020-04, “Facilitation of the Effect of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”).
|
|
The London Interbank Offered Rate (LIBOR) is set to expire at the end of 2021. Contracts affected by the rate change would be required to be modified. Under current U.S. GAAP, those modifications would have to be evaluated to determine whether they result in new contracts or continuation of the existing contracts. ASU 2020-04 provides temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the transition from LIBOR to alternative reference rate.
|
|
Issuance date of March 12, 2020 through December 31, 2022.
|
|
The Company is currently evaluating the impact ASU 2020-04 will have on its consolidated financial statements.
|
In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes" ("ASU 2019-12").
|
|
ASU 2019-12 guidance simplifies the accounting for income taxes by removing the exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items (for example, discontinued operations or other comprehensive income). With the removal of this exception, entities will determine the tax effect of pre-tax income or loss from continuing operations without consideration of the tax effects of other items that are not included in continuing operations.
|
|
Annual periods beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period.
|
|
The Company is currently evaluating the impact ASU 2019-12 will have on its consolidated financial statements.
|
In August 2018, the FASB issued ASU No. 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU 2018-15”).
|
|
ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.
|
|
Annual periods beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period.
|
|
The Company will adopt the new guidance effective July 1, 2020, on a prospective basis, which will not require the Company to adjust comparative periods. Adoption of ASU 2018-15 will not have a material impact on the results of operations, financial position or cash flows of the Company.
|
In August 2018, the FASB issued ASU No. 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans” (“ASU 2018-14”).
|
|
ASU 2018-14 modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing disclosures that no longer are considered cost beneficial, clarifying the specific requirements of disclosures and adding disclosure requirements identified as relevant.
|
|
Annual periods beginning after December 15, 2020. Early adoption is permitted.
|
|
Effective for the Company beginning July 1, 2021. The Company is currently evaluating the impact ASU 2018-14 will have on its consolidated financial statements.
|
In February 2018, the FASB issued ASU No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”).
|
|
ASU 2018-02 provides entities an option to reclassify certain stranded tax effects resulting from the tax reform from accumulated other comprehensive income to retained earnings.
|
|
The guidance in ASU 2018-02 is effective for annual periods beginning after December 15, 2018, and interim periods within those fiscal years, and should be applied either in the period of adoption or retrospectively.
|
|
The Company did not elect the option to reclassify certain stranded tax effects resulting from the tax reform from accumulated other comprehensive income to retained earnings.
|
|
|
|
|
|
|
|
Standard
|
|
Description
|
|
Effective Date
|
|
Effect on the Financial Statements or Other Significant Matters
|
In January 2017, the FASB issued ASU No. 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”).
|
|
The amendments in ASU 2017-04 address concerns regarding the cost and complexity of the two-step goodwill impairment test, and remove the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. ASU 2017-04 does not amend the optional qualitative assessment of goodwill impairment.
|
|
Annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019.
|
|
The Company adopted the new guidance effective January 1, 2020, on a prospective basis, which did not require the Company to adjust comparative periods. Adoption of ASU 2017-04 did not have a material impact on the results of operations, financial position or cash flows of the Company.
|
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Since that date, the FASB has issued additional ASUs clarifying certain aspects of ASU 2016-13.
|
|
The objective of the guidance in ASU 2016-13 is to allow entities to recognize estimated credit losses in the period that the change in valuation occurs. The amendments in ASU 2016-13 requires an entity to present financial assets measured on an amortized cost basis on the balance sheet net of an allowance for credit losses. The model requires an estimate of the credit losses expected over the life of an exposure or pool of exposures. The income statement will reflect the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period.
|
|
Annual reporting periods beginning after December 15, 2019 and interim periods within those reporting periods.
|
|
The Company will adopt the guidance effective beginning July 1, 2020. The Company has completed its assessment of the guidance and has concluded that it will not have a material impact on its consolidated financial statements.
|
In February 2016, the FASB issued ASU 2016-02, Leases. Since that date, the FASB has issued additional ASUs clarifying certain aspects of ASU 2016-02.
|
|
ASU 2016-02 requires a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for both finance and operating leases. Subsequent guidance issued after February 2016 did not change the core principle of ASU 2016-02.
|
|
Annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early application is permitted.
|
|
The Company adopted the new guidance effective July 1, 2019, using the modified retrospective transition method, which did not require the Company to adjust comparative periods. See Note 7 for the applicable disclosure of ASU 2016-02 adoption. .
|
(In thousands)
|
Fair Value
|
|
Estimated
Useful Life
(years)
|
||
|
|
|
|
||
Cash paid
|
$
|
38,871
|
|
|
|
Holdback Cash Amount
|
3,150
|
|
|
|
|
Multiemployer Plan Holdback
|
1,056
|
|
|
|
|
Fair value of Series A Preferred Stock (14,700 shares)(1)
|
11,756
|
|
|
|
|
Fair value of Holdback Stock (6,300 shares)(1)
|
4,825
|
|
|
|
|
Estimated post-closing net working capital adjustment
|
(8,059
|
)
|
|
|
|
Total consideration
|
$
|
51,599
|
|
|
|
|
|
|
|
||
Accounts receivable
|
$
|
7,503
|
|
|
|
Inventory
|
9,415
|
|
|
|
|
Prepaid expense and other assets
|
1,951
|
|
|
|
|
Property, plant and equipment
|
4,936
|
|
|
|
|
Goodwill
|
25,395
|
|
|
|
|
Intangible assets:
|
|
|
|
||
Customer relationships
|
16,000
|
|
|
10
|
|
Trade name/trademark—indefinite-lived
|
3,100
|
|
|
|
|
Accounts payable
|
(15,080
|
)
|
|
|
|
Other liabilities
|
(1,621
|
)
|
|
|
|
Total consideration
|
$
|
51,599
|
|
|
|
(In thousands)
|
|
For the Year Ended June 30,
|
||
|
|
2018
|
||
Net sales
|
|
$
|
67,385
|
|
Income before taxes
|
|
$
|
1,572
|
|
|
|
For the Year Ended June 30,
|
|||
(In thousands)
|
|
|
2018
|
||
Net sales
|
|
|
$
|
628,526
|
|
(Loss) income before taxes
|
|
|
$
|
(642
|
)
|
(In thousands)
|
Balances as of
June 30, 2017
|
|
Additions
|
|
Payments
|
|
Non-Cash Settled
|
|
Adjustments
|
|
Balances as of
June 30, 2020 |
||||||||||||
Employee-related costs
|
$
|
—
|
|
|
$
|
2,634
|
|
|
$
|
2,634
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other
|
—
|
|
|
1,949
|
|
|
1,949
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
—
|
|
|
$
|
4,583
|
|
|
$
|
4,583
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended June 30,
|
||||||||||
(In thousands)
|
2020
|
|
2019
|
|
2018
|
||||||
Employee-related costs
|
$
|
30
|
|
|
$
|
1,487
|
|
|
$
|
612
|
|
Other
|
—
|
|
|
284
|
|
|
429
|
|
|||
Total
|
$
|
30
|
|
|
$
|
1,771
|
|
|
$
|
1,041
|
|
|
|
As of June 30,
|
||||
(In thousands)
|
|
2020
|
|
2019
|
||
Derivative instruments designated as cash flow hedges:
|
|
|
|
|
||
Long coffee pounds
|
|
36,413
|
|
|
42,113
|
|
Derivative instruments not designated as cash flow hedges:
|
|
|
|
|
||
Long coffee pounds
|
|
8,348
|
|
|
6,070
|
|
Total
|
|
44,761
|
|
|
48,183
|
|
|
|
Derivative Instruments
Designated as Cash Flow Hedges
|
|
Derivative Instruments Not Designated as Accounting Hedges
|
||||||||||||
|
|
As of June 30,
|
|
As of June 30,
|
||||||||||||
(In thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Financial Statement Location:
|
|
|
|
|
|
|
|
|
||||||||
Short-term derivative assets:
|
|
|
|
|
|
|
|
|
||||||||
Coffee-related derivative instruments(1)
|
|
$
|
35
|
|
|
$
|
1,254
|
|
|
$
|
130
|
|
|
$
|
611
|
|
Long-term derivative assets:
|
|
|
|
|
|
|
|
|
||||||||
Coffee-related derivative instruments(2)
|
|
$
|
10
|
|
|
$
|
671
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Short-term derivative liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Coffee-related derivative instruments(3)
|
|
$
|
3,322
|
|
|
$
|
1,114
|
|
|
$
|
706
|
|
|
$
|
114
|
|
Interest rate swap derivative instruments(3)
|
|
$
|
1,228
|
|
|
$
|
246
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term derivative liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Coffee-related derivative instruments(4)
|
|
$
|
246
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swap derivative instruments(4)
|
|
$
|
2,613
|
|
|
$
|
1,599
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Year Ended June 30,
|
|
Financial Statement Classification
|
|||||||||||
(In thousands)
|
|
2020
|
|
2019
|
|
2018
|
|
|
|||||||
Net losses recognized in AOCI - Interest rate swap
|
|
$
|
(2,863
|
)
|
|
$
|
(1,791
|
)
|
|
$
|
—
|
|
|
|
AOCI
|
Net (losses) gains recognized from AOCI to earnings - Interest rate swap
|
|
$
|
(383
|
)
|
|
$
|
45
|
|
|
$
|
—
|
|
|
|
Interest Expense
|
Net losses reclassified from AOCI to earnings for partial unwind of interest swap - Interest rate swap (1)
|
|
$
|
(407
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Interest Expense
|
Net losses recognized in AOCI - Coffee-related
|
|
$
|
(4,655
|
)
|
|
$
|
(7,407
|
)
|
|
$
|
(8,420
|
)
|
|
|
AOCI
|
Net losses recognized in earnings - Coffee-related
|
|
$
|
(8,073
|
)
|
|
$
|
(9,242
|
)
|
|
$
|
(1,179
|
)
|
|
|
Costs of goods sold
|
Net gains (losses) recognized in earnings (ineffective portion)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48
|
|
|
|
Other, net
|
(1)
|
The 407 thousand of realized loss was due to partial unwinding of interest rate swap resulting from the amendment of the notional amount from $80.0 million to $65.0 million.
|
|
|
Year Ended June 30,
|
||||||||||
(In thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Net losses on coffee-related derivative instruments
|
|
$
|
(1,362
|
)
|
|
$
|
(2,252
|
)
|
|
$
|
(469
|
)
|
Net gains on investments
|
|
—
|
|
|
—
|
|
|
7
|
|
|||
Net losses on derivative instruments and investments(1)
|
|
(1,362
|
)
|
|
(2,252
|
)
|
|
(462
|
)
|
|||
Non-operating pension and other postretirement benefit plans cost(2)
|
|
11,651
|
|
|
6,315
|
|
|
6,651
|
|
|||
Other gains, net
|
|
154
|
|
|
103
|
|
|
1,533
|
|
|||
Other, net
|
|
$
|
10,443
|
|
|
$
|
4,166
|
|
|
$
|
7,722
|
|
(In thousands)
|
|
|
|
Gross Amount Reported on Balance Sheet
|
|
Netting Adjustments
|
|
Cash Collateral Posted
|
|
Net Exposure
|
||||||||
As of June 30, 2020
|
|
Derivative Assets
|
|
$
|
175
|
|
|
$
|
(175
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Derivative Liabilities
|
|
$
|
8,115
|
|
|
$
|
(176
|
)
|
|
$
|
—
|
|
|
$
|
7,939
|
|
As of June 30, 2019
|
|
Derivative Assets
|
|
$
|
2,539
|
|
|
$
|
(698
|
)
|
|
$
|
—
|
|
|
$
|
1,841
|
|
|
|
Derivative Liabilities
|
|
$
|
3,086
|
|
|
$
|
(698
|
)
|
|
$
|
—
|
|
|
$
|
2,388
|
|
|
|
Classification
|
|
As of June 30, 2020
|
||
(In thousands)
|
|
|
|
|
||
Operating lease assets
|
|
Right-of-use operating lease assets
|
|
$
|
21,117
|
|
Finance lease assets
|
|
Property, plant and equipment, net
|
|
9
|
|
|
Total lease assets
|
|
|
|
$
|
21,126
|
|
|
|
|
|
|
||
Operating lease liabilities - current
|
|
Operating lease liabilities - current
|
|
$
|
5,854
|
|
Operating lease liabilities - noncurrent
|
|
Operating lease liabilities - noncurrent
|
|
15,628
|
|
|
Finance lease liabilities
|
|
Other long-term liabilities
|
|
9
|
|
|
Total lease liabilities
|
|
|
|
$
|
21,491
|
|
|
|
Classification
|
|
For the Year Ended June 30, 2020
|
|
||
(In thousands)
|
|
|
|
|
|
||
Operating lease expense
|
|
General and administrative expenses and cost of goods sold
|
|
$
|
5,354
|
|
|
Finance lease expense:
|
|
|
|
|
|
||
Amortization of finance lease assets
|
|
General and administrative expenses
|
|
52
|
|
|
|
Interest on finance lease liabilities
|
|
Interest expense
|
|
2
|
|
|
|
Total lease expense
|
|
|
|
$
|
5,408
|
|
|
|
|
For the Years Ended June 30,
|
||||||
(In thousands)
|
|
Operating Leases
|
|
Finance Leases
|
||||
Maturities of lease liabilities are as follows:
|
|
|
|
|
||||
2021
|
|
$
|
5,854
|
|
|
$
|
9
|
|
2022
|
|
4,454
|
|
|
—
|
|
||
2023
|
|
3,894
|
|
|
—
|
|
||
2024
|
|
3,654
|
|
|
—
|
|
||
2025
|
|
2,503
|
|
|
—
|
|
||
Thereafter
|
|
3,954
|
|
|
—
|
|
||
Total lease payments
|
|
24,313
|
|
|
9
|
|
||
Less: interest
|
|
(2,831
|
)
|
|
—
|
|
||
Total lease obligations
|
|
$
|
21,482
|
|
|
$
|
9
|
|
|
|
As of June 30, 2020
|
|
Weighted-average remaining lease terms (in years):
|
|
|
|
Operating lease
|
|
8.3
|
|
Finance lease
|
|
0.2
|
|
|
|
|
|
Weighted-average discount rate:
|
|
|
|
Operating lease
|
|
4.50
|
%
|
Finance lease
|
|
4.50
|
%
|
|
|
For the Year Ended June 30, 2020
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
5,000
|
|
Operating cash flows from finance leases
|
|
$
|
2
|
|
Financing cash flows from finance leases
|
|
$
|
51
|
|
|
|
|
||
Leased assets obtained in exchange for new finance lease liabilities
|
|
$
|
—
|
|
Leased assets obtained in exchange for new operating lease liabilities
|
|
$
|
—
|
|
(In thousands)
|
|
Operating
Lease Obligations |
|
Capital
Lease Obligations |
||||
Year Ended June 30,
|
|
|
|
|
||||
2020
|
|
$
|
4,434
|
|
|
$
|
36
|
|
2021
|
|
3,238
|
|
|
1
|
|
||
2022
|
|
2,472
|
|
|
—
|
|
||
2023
|
|
2,131
|
|
|
—
|
|
||
2024
|
|
2,025
|
|
|
—
|
|
||
Thereafter
|
|
4,389
|
|
|
—
|
|
||
Total minimum lease payments
|
|
$
|
18,689
|
|
|
37
|
|
|
Less: imputed interest
(0.82% to 10.66%) |
|
|
|
(2
|
)
|
|||
Present value of future minimum lease payments
|
|
|
|
35
|
|
|||
Less: current portion
|
|
|
|
(34
|
)
|
|||
Long-term capital lease obligations
|
|
|
|
$
|
1
|
|
(In thousands)
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
As of June 30, 2020
|
|
|
|
|
|
|
|
|
||||||||
Derivative instruments designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
Coffee-related derivative assets(1)
|
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
45
|
|
|
$
|
—
|
|
Coffee-related derivative liabilities(1)
|
|
$
|
3,568
|
|
|
$
|
—
|
|
|
$
|
3,568
|
|
|
$
|
—
|
|
Interest rate swap derivative liabilities(2)
|
|
$
|
3,841
|
|
|
$
|
—
|
|
|
$
|
3,841
|
|
|
$
|
—
|
|
Derivative instruments not designated as accounting hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||
Coffee-related derivative assets(1)
|
|
$
|
130
|
|
|
$
|
—
|
|
|
$
|
130
|
|
|
$
|
—
|
|
Coffee-related derivative liabilities(1)
|
|
$
|
706
|
|
|
$
|
—
|
|
|
$
|
706
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
(In thousands)
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
As of June 30, 2019
|
|
|
|
|
|
|
|
|
||||||||
Derivative instruments designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
Coffee-related derivative assets(1)
|
|
$
|
1,925
|
|
|
$
|
—
|
|
|
$
|
1,925
|
|
|
$
|
—
|
|
Coffee-related derivative liabilities(1)
|
|
$
|
1,127
|
|
|
$
|
—
|
|
|
$
|
1,127
|
|
|
$
|
—
|
|
Interest rate swap derivative liabilities(2)
|
|
$
|
1,845
|
|
|
$
|
—
|
|
|
$
|
1,845
|
|
|
$
|
—
|
|
Derivative instruments not designated as accounting hedges:
|
|
|
|
|
|
|
|
|
||||||||
Coffee-related derivative assets(1)
|
|
$
|
614
|
|
|
$
|
—
|
|
|
$
|
614
|
|
|
$
|
—
|
|
Coffee-related derivative liabilities(1)
|
|
$
|
114
|
|
|
$
|
—
|
|
|
114
|
|
|
$
|
—
|
|
(1)
|
The Company's coffee-related derivative instruments are traded over-the-counter and, therefore, classified as Level 2.
|
(2)
|
The Company's interest rate swap derivative instrument are model-derived valuations with directly or indirectly observable significant inputs such as interest rate and, therefore, classified as Level 2.
|
|
|
As of June 30,
|
||||||
(In thousands)
|
|
2020
|
|
2019
|
||||
Trade receivables
|
|
$
|
40,695
|
|
|
$
|
53,593
|
|
Other receivables(1)
|
|
1,983
|
|
|
2,886
|
|
||
Allowance for doubtful accounts
|
|
(1,796
|
)
|
|
(1,324
|
)
|
||
Accounts receivable, net
|
|
$
|
40,882
|
|
|
$
|
55,155
|
|
|
|
As of June 30,
|
||||||
(In thousands)
|
|
2020
|
|
2019
|
||||
Coffee
|
|
|
|
|
||||
Processed
|
|
$
|
17,840
|
|
|
$
|
25,769
|
|
Unprocessed
|
|
32,913
|
|
|
33,259
|
|
||
Total
|
|
$
|
50,753
|
|
|
$
|
59,028
|
|
Tea and culinary products
|
|
|
|
|
||||
Processed
|
|
$
|
10,627
|
|
|
$
|
21,767
|
|
Unprocessed
|
|
45
|
|
|
74
|
|
||
Total
|
|
$
|
10,672
|
|
|
$
|
21,841
|
|
Coffee brewing equipment parts
|
|
$
|
5,983
|
|
|
$
|
7,041
|
|
Total inventories
|
|
$
|
67,408
|
|
|
$
|
87,910
|
|
|
|
As of June 30,
|
||||||
(In thousands)
|
|
2020
|
|
2019
|
||||
Buildings and facilities (1)
|
|
$
|
98,293
|
|
|
$
|
107,915
|
|
Machinery and equipment (2)
|
|
240,431
|
|
|
249,477
|
|
||
Capitalized software
|
|
29,765
|
|
|
27,666
|
|
||
Office furniture and equipment
|
|
14,042
|
|
|
14,035
|
|
||
|
|
$
|
382,531
|
|
|
$
|
399,093
|
|
Accumulated depreciation
|
|
(229,829
|
)
|
|
(225,826
|
)
|
||
Land (1)
|
|
12,931
|
|
|
16,191
|
|
||
Property, plant and equipment, net
|
|
$
|
165,633
|
|
|
$
|
189,458
|
|
|
|
As of June 30,
|
||||||
(In thousands)
|
|
2020
|
|
2019
|
||||
Coffee Brewing Equipment (1)
|
|
$
|
98,734
|
|
|
$
|
106,593
|
|
Accumulated depreciation (1)
|
|
(67,800
|
)
|
|
(70,202
|
)
|
||
Coffee Brewing Equipment, net
|
|
$
|
30,934
|
|
|
$
|
36,391
|
|
|
|
For the Years Ended June 30,
|
||||||||||
(In thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Depreciation expense
|
|
$
|
9,572
|
|
|
$
|
9,109
|
|
|
$
|
8,629
|
|
|
|
|
|
|
|
|
||||||
Other CBE expenses
|
|
$
|
27,906
|
|
|
$
|
33,855
|
|
|
$
|
30,172
|
|
Balance at June 30, 2017
|
|
$
|
10,996
|
|
Final Purchase Price Allocation Adjustment (West Coast Coffee)
|
|
(167
|
)
|
|
Additions (Boyd Coffee)
|
|
25,395
|
|
|
Balance at June 30, 2018
|
|
$
|
36,224
|
|
Additions
|
|
—
|
|
|
Balance at June 30, 2019
|
|
36,224
|
|
|
Additions
|
|
—
|
|
|
Impairment
|
|
(36,224
|
)
|
|
Balance at June 30, 2020
|
|
$
|
—
|
|
|
|
|
|
As of June 30,
|
||||||||||||||||||||||||||
|
|
Weighted
Average
Amortization
Period as of
June 30, 2020
|
|
2020
|
|
2019
|
||||||||||||||||||||||||
(In thousands)
|
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Impairment
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|||||||||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Customer relationships
|
|
6.7
|
|
$
|
33,003
|
|
|
$
|
(17,492
|
)
|
|
$
|
—
|
|
|
$
|
15,511
|
|
|
$
|
33,003
|
|
|
$
|
(15,291
|
)
|
|
$
|
17,712
|
|
Non-compete agreements
|
|
1.5
|
|
220
|
|
|
(161
|
)
|
|
—
|
|
|
59
|
|
|
220
|
|
|
(122
|
)
|
|
98
|
|
|||||||
Recipes
|
|
3.3
|
|
930
|
|
|
(487
|
)
|
|
—
|
|
|
443
|
|
|
930
|
|
|
(354
|
)
|
|
576
|
|
|||||||
Trade name/brand name
|
|
3.4
|
|
510
|
|
|
(383
|
)
|
|
—
|
|
|
127
|
|
|
510
|
|
|
(346
|
)
|
|
164
|
|
|||||||
Total amortized intangible assets
|
|
|
|
$
|
34,663
|
|
|
$
|
(18,523
|
)
|
|
$
|
—
|
|
|
$
|
16,140
|
|
|
$
|
34,663
|
|
|
$
|
(16,113
|
)
|
|
$
|
18,550
|
|
Unamortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Trademarks, trade names and brand name with indefinite lives
|
|
|
|
$
|
10,328
|
|
|
$
|
—
|
|
|
$
|
(5,806
|
)
|
|
$
|
4,522
|
|
|
$
|
10,328
|
|
|
$
|
—
|
|
|
$
|
10,328
|
|
Total unamortized intangible assets
|
|
|
|
$
|
10,328
|
|
|
$
|
—
|
|
|
$
|
(5,806
|
)
|
|
$
|
4,522
|
|
|
$
|
10,328
|
|
|
$
|
—
|
|
|
$
|
10,328
|
|
Total intangible assets
|
|
|
|
$
|
44,991
|
|
|
$
|
(18,523
|
)
|
|
$
|
(5,806
|
)
|
|
$
|
20,662
|
|
|
$
|
44,991
|
|
|
$
|
(16,113
|
)
|
|
$
|
28,878
|
|
For the fiscal year ending:
|
|
|
||
June 30, 2021
|
|
$
|
2,412
|
|
June 30, 2022
|
|
2,388
|
|
|
June 30, 2023
|
|
2,370
|
|
|
June 30, 2024
|
|
2,260
|
|
|
June 30, 2025
|
|
2,200
|
|
|
Thereafter
|
|
4,510
|
|
|
Total
|
|
$
|
16,140
|
|
|
|
Brewmatic Plan
As of June 30,
|
|
Hourly Employees’ Plan
As of June 30,
|
|
Farmer Bros. Plan
As of June 30, |
|
Total
|
||||||||||||||||||||
($ in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2019
|
|
2020
|
|
2019
|
||||||||||||||
Change in projected benefit obligation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Benefit obligation at the beginning of the year
|
|
$
|
121,752
|
|
|
$
|
3,724
|
|
|
$
|
4,475
|
|
|
$
|
4,040
|
|
|
$
|
137,175
|
|
|
$
|
126,227
|
|
|
$
|
144,939
|
|
Interest cost
|
|
4,084
|
|
|
2,339
|
|
|
152
|
|
|
161
|
|
|
2,722
|
|
|
4,236
|
|
|
5,222
|
|
|||||||
Actuarial (gain) loss
|
|
13,433
|
|
|
8,482
|
|
|
561
|
|
|
349
|
|
|
(1,571
|
)
|
|
13,994
|
|
|
7,260
|
|
|||||||
Benefits paid
|
|
(5,943
|
)
|
|
(3,097
|
)
|
|
(102
|
)
|
|
(75
|
)
|
|
(3,574
|
)
|
|
(6,045
|
)
|
|
(6,746
|
)
|
|||||||
Pension settlement
|
|
—
|
|
|
(21,286
|
)
|
|
—
|
|
|
—
|
|
|
(3,162
|
)
|
|
—
|
|
|
(24,448
|
)
|
|||||||
Other - Plan merger
|
|
—
|
|
|
131,590
|
|
|
—
|
|
|
—
|
|
|
(131,590
|
)
|
|
—
|
|
|
—
|
|
|||||||
Projected benefit obligation at the end of the year
|
|
$
|
133,326
|
|
|
$
|
121,752
|
|
|
$
|
5,086
|
|
|
$
|
4,475
|
|
|
$
|
—
|
|
|
$
|
138,412
|
|
|
$
|
126,227
|
|
Change in plan assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fair value of plan assets at the beginning of the year
|
|
$
|
75,411
|
|
|
$
|
3,719
|
|
|
$
|
3,778
|
|
|
$
|
3,629
|
|
|
$
|
97,211
|
|
|
$
|
79,189
|
|
|
$
|
104,559
|
|
Actual return on plan assets
|
|
3,382
|
|
|
9,325
|
|
|
239
|
|
|
224
|
|
|
(6,236
|
)
|
|
3,621
|
|
|
3,313
|
|
|||||||
Employer contributions
|
|
3,054
|
|
|
1,800
|
|
|
—
|
|
|
—
|
|
|
1,525
|
|
|
3,054
|
|
|
3,325
|
|
|||||||
Benefits paid
|
|
(5,943
|
)
|
|
(3,097
|
)
|
|
(102
|
)
|
|
(75
|
)
|
|
(3,574
|
)
|
|
(6,045
|
)
|
|
(6,746
|
)
|
|||||||
Pension settlement
|
|
—
|
|
|
(22,100
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(3,162
|
)
|
|
—
|
|
|
(25,262
|
)
|
||||||
Other - Plan merger
|
|
—
|
|
|
85,764
|
|
|
—
|
|
|
—
|
|
|
$
|
(85,764
|
)
|
|
—
|
|
|
—
|
|
||||||
Fair value of plan assets at the end of the year
|
|
$
|
75,904
|
|
|
$
|
75,411
|
|
|
$
|
3,915
|
|
|
$
|
3,778
|
|
|
$
|
—
|
|
|
$
|
79,819
|
|
|
$
|
79,189
|
|
Funded status at end of year (underfunded) overfunded
|
|
$
|
(57,422
|
)
|
|
$
|
(46,341
|
)
|
|
$
|
(1,171
|
)
|
|
$
|
(697
|
)
|
|
$
|
—
|
|
|
$
|
(58,593
|
)
|
|
$
|
(47,038
|
)
|
Amounts recognized in consolidated balance sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Non-current liabilities
|
|
(57,422
|
)
|
|
(46,341
|
)
|
|
(1,171
|
)
|
|
(697
|
)
|
|
—
|
|
|
(58,593
|
)
|
|
(47,038
|
)
|
|||||||
Total
|
|
$
|
(57,422
|
)
|
|
$
|
(46,341
|
)
|
|
$
|
(1,171
|
)
|
|
$
|
(697
|
)
|
|
$
|
—
|
|
|
$
|
(58,593
|
)
|
|
$
|
(47,038
|
)
|
Amounts recognized in AOCI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss
|
|
62,830
|
|
|
50,080
|
|
|
1,115
|
|
|
565
|
|
|
—
|
|
|
63,945
|
|
|
50,645
|
|
|||||||
Total AOCI (not adjusted for applicable tax)
|
|
$
|
62,830
|
|
|
$
|
50,080
|
|
|
$
|
1,115
|
|
|
$
|
565
|
|
|
$
|
—
|
|
|
$
|
63,945
|
|
|
$
|
50,645
|
|
Weighted average assumptions used to determine benefit obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Discount rate
|
|
2.55
|
%
|
|
3.45
|
%
|
|
2.55
|
%
|
|
3.45
|
%
|
|
4.10
|
%
|
|
2.55
|
%
|
|
4.05
|
%
|
|||||||
Rate of compensation increase
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
|
Brewmatic Plan
June 30,
|
|
Hourly Employees’ Plan
June 30,
|
|
Farmer Bros. Plan
June 30, |
|
Total
|
||||||||||||||||||||
($ in thousands)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2019
|
|
2020
|
|
2019
|
||||||||||||||
Components of net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest cost
|
|
4,084
|
|
|
2,339
|
|
|
152
|
|
|
161
|
|
|
2,722
|
|
|
4,236
|
|
|
5,222
|
|
|||||||
Expected return on plan assets
|
|
(4,174
|
)
|
|
(2,257
|
)
|
|
(232
|
)
|
|
(222
|
)
|
|
(2,767
|
)
|
|
(4,406
|
)
|
|
(5,246
|
)
|
|||||||
Amortization of net loss
|
|
1,475
|
|
|
796
|
|
|
4
|
|
|
—
|
|
|
710
|
|
|
1,479
|
|
|
1,506
|
|
|||||||
Pension settlement charge
|
|
—
|
|
|
9,586
|
|
|
—
|
|
|
—
|
|
|
1,356
|
|
|
—
|
|
|
10,942
|
|
|||||||
Net periodic benefit cost
|
|
$
|
1,385
|
|
|
$
|
10,464
|
|
|
$
|
(76
|
)
|
|
$
|
(61
|
)
|
|
$
|
2,021
|
|
|
$
|
1,309
|
|
|
$
|
12,424
|
|
Other changes recognized in OCI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss (1)
|
|
$
|
14,225
|
|
|
$
|
1,413
|
|
|
$
|
554
|
|
|
$
|
347
|
|
|
$
|
7,433
|
|
|
$
|
14,779
|
|
|
$
|
9,193
|
|
Prior service cost (credit)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Amortization of net loss
|
|
(1,475
|
)
|
|
(796
|
)
|
|
(4
|
)
|
|
—
|
|
|
(710
|
)
|
|
(1,479
|
)
|
|
(1,506
|
)
|
|||||||
Pension settlement charge
|
|
—
|
|
|
(9,586
|
)
|
|
—
|
|
|
—
|
|
|
(1,356
|
)
|
|
—
|
|
|
(10,942
|
)
|
|||||||
Allocation of net Loss - Plan merger
|
|
—
|
|
|
56,446
|
|
|
—
|
|
|
—
|
|
|
(56,446
|
)
|
|
—
|
|
|
—
|
|
|||||||
Net loss due to annuity purchase
|
|
—
|
|
|
814
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
814
|
|
|||||||
Total recognized in OCI
|
|
$
|
12,750
|
|
|
$
|
48,291
|
|
|
$
|
550
|
|
|
$
|
347
|
|
|
$
|
(51,079
|
)
|
|
$
|
13,300
|
|
|
$
|
(2,441
|
)
|
Total recognized in net periodic benefit cost and OCI
|
|
$
|
14,135
|
|
|
$
|
58,755
|
|
|
$
|
474
|
|
|
$
|
286
|
|
|
$
|
(49,058
|
)
|
|
$
|
14,609
|
|
|
$
|
9,983
|
|
Weighted-average assumptions used to determine net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Discount rate
|
|
3.45
|
%
|
|
4.10
|
%
|
|
3.45
|
%
|
|
4.05
|
%
|
|
4.05
|
%
|
|
3.45
|
%
|
|
4.05
|
%
|
|||||||
Expected long-term return on plan assets
|
|
6.75
|
%
|
|
6.75
|
%
|
|
6.75
|
%
|
|
6.75
|
%
|
|
—
|
%
|
|
6.75
|
%
|
|
6.75
|
%
|
|||||||
Rate of compensation increase
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Brewmatic Plan
June 30,
|
|
Hourly Employees’ Plan
June 30,
|
|
Total
|
||||||||||||||||||
($ in thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||||||
Comparison of obligations to plan assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Projected benefit obligation
|
$
|
133,326
|
|
|
$
|
121,752
|
|
|
$
|
5,086
|
|
|
$
|
4,475
|
|
|
$
|
138,412
|
|
|
$
|
126,227
|
|
Accumulated benefit obligation
|
$
|
133,326
|
|
|
$
|
121,752
|
|
|
$
|
5,086
|
|
|
$
|
4,475
|
|
|
$
|
138,412
|
|
|
$
|
126,227
|
|
Fair value of plan assets at measurement date
|
$
|
75,904
|
|
|
$
|
75,411
|
|
|
$
|
3,915
|
|
|
$
|
3,778
|
|
|
$
|
79,819
|
|
|
$
|
79,189
|
|
Plan assets by category
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity securities
|
$
|
49,744
|
|
|
$
|
48,464
|
|
|
$
|
2,572
|
|
|
$
|
2,440
|
|
|
$
|
52,316
|
|
|
$
|
50,904
|
|
Debt securities
|
21,439
|
|
|
22,461
|
|
|
1,111
|
|
|
1,100
|
|
|
22,550
|
|
|
23,561
|
|
||||||
Real estate
|
4,721
|
|
|
4,486
|
|
|
232
|
|
|
238
|
|
|
4,953
|
|
|
4,724
|
|
||||||
Total
|
$
|
75,904
|
|
|
$
|
75,411
|
|
|
$
|
3,915
|
|
|
$
|
3,778
|
|
|
$
|
79,819
|
|
|
$
|
79,189
|
|
Plan assets by category
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity securities
|
66
|
%
|
|
64
|
%
|
|
66
|
%
|
|
65
|
%
|
|
66
|
%
|
|
64
|
%
|
||||||
Debt securities
|
28
|
%
|
|
30
|
%
|
|
28
|
%
|
|
29
|
%
|
|
28
|
%
|
|
30
|
%
|
||||||
Real estate
|
6
|
%
|
|
6
|
%
|
|
6
|
%
|
|
6
|
%
|
|
6
|
%
|
|
6
|
%
|
||||||
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
As of June 30, 2020
|
||||||||||||||||||
(In thousands)
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Investments measured at NAV
|
||||||||||
Brewmatic Plan
|
|
$
|
75,904
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75,904
|
|
Hourly Employees’ Plan
|
|
$
|
3,915
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,915
|
|
|
|
As of June 30, 2019
|
||||||||||||||||||
(In thousands)
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Investments measured at NAV
|
||||||||||
Brewmatic Plan
|
|
$
|
75,411
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75,411
|
|
Hourly Employees’ Plan
|
|
$
|
3,778
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,778
|
|
|
Fiscal 2021
|
|
U.S. large cap equity securities
|
37.7
|
%
|
U.S. small cap equity securities
|
4.6
|
%
|
International equity securities
|
23.2
|
%
|
Debt securities
|
28.3
|
%
|
Real estate
|
6.2
|
%
|
Total
|
100.0
|
%
|
(In thousands)
|
|
|
Brewmatic Plan
|
|
Hourly Employees’
Plan
|
||||
Year Ending:
|
|
|
|||||||
June 30, 2021
|
|
|
$
|
7,100
|
|
|
$
|
160
|
|
June 30, 2022
|
|
|
$
|
6,820
|
|
|
$
|
160
|
|
June 30, 2023
|
|
|
$
|
7,010
|
|
|
$
|
180
|
|
June 30, 2024
|
|
|
$
|
7,110
|
|
|
$
|
190
|
|
June 30, 2025
|
|
|
$
|
7,200
|
|
|
$
|
200
|
|
June 30, 2026 to June 30, 2030
|
|
|
$
|
35,510
|
|
|
$
|
1,150
|
|
(1)
|
Individually significant plan.
|
(2)
|
Less than 5% of total contribution to WCTPP based on WCTPP's FASB Disclosure Statement for the calendar year ended December 31, 2019.
|
(3)
|
The Company guarantees that one hundred seventy-three (173) hours will be contributed upon for all employees who are compensated for all available straight time hours for each calendar month. An additional 6.5% of the basic contribution must be paid for PEER or the Program for Enhanced Early Retirement.
|
(4)
|
Includes one plan that is not individually significant.
|
(5)
|
June 30, 2019 includes WCT monthly settlement obligations of $190,507.
|
(In thousands)
|
|
June 30, 2020
|
|
|
June 30, 2019
|
|
||
WCT Pension Trust (1)
|
|
—
|
|
|
$
|
1,487
|
|
|
Local 807 Pension Fund (2)
|
|
$
|
182
|
|
|
$
|
182
|
|
|
|
Year Ended June 30,
|
||||||||||
(In thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Components of Net Periodic Postretirement Benefit Cost (Credit):
|
|
|
|
|
|
|
||||||
Service cost
|
|
$
|
446
|
|
|
$
|
530
|
|
|
$
|
609
|
|
Interest cost
|
|
725
|
|
|
887
|
|
|
835
|
|
|||
Amortization of net gain
|
|
(3,067
|
)
|
|
(834
|
)
|
|
(841
|
)
|
|||
Curtailment credit - Retiree Medical
|
|
(5,750
|
)
|
|
—
|
|
|
—
|
|
|||
Amortization of prior service credit
|
|
(5,666
|
)
|
|
(1,757
|
)
|
|
(1,757
|
)
|
|||
Net periodic postretirement benefit (credit) cost
|
|
$
|
(13,312
|
)
|
|
$
|
(1,174
|
)
|
|
$
|
(1,154
|
)
|
|
|
Retiree Medical Plan
|
|
Death Benefit
|
||||||||||||
|
|
Year Ended June 30,
|
|
Year Ended June 30,
|
||||||||||||
($ in thousands)
|
|
2020(1)
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Amortization of Net (Gain) Loss:
|
|
|
|
|
|
|
|
|
||||||||
Net (gain) loss as of July 1
|
|
$
|
—
|
|
|
$
|
(7,039
|
)
|
|
$
|
2,903
|
|
|
$
|
1,878
|
|
Net (gain) loss subject to amortization
|
|
—
|
|
|
(7,039
|
)
|
|
2,903
|
|
|
1,878
|
|
||||
Corridor (10% of greater of APBO or assets)
|
|
—
|
|
|
1,490
|
|
|
1,043
|
|
|
919
|
|
||||
Net (gain) loss in excess of corridor
|
|
$
|
—
|
|
|
$
|
(5,549
|
)
|
|
$
|
1,860
|
|
|
$
|
959
|
|
Amortization years
|
|
—
|
|
|
8.6
|
|
|
5.8
|
|
|
6.5
|
|
|
|
As of June 30,
|
||||||
(In thousands)
|
|
2020
|
|
2019
|
||||
Change in Benefit Obligation:
|
|
|
|
|
||||
Projected postretirement benefit obligation at beginning of year
|
|
$
|
24,092
|
|
|
$
|
21,283
|
|
Service cost
|
|
446
|
|
|
530
|
|
||
Interest cost
|
|
725
|
|
|
887
|
|
||
Participant contributions
|
|
593
|
|
|
605
|
|
||
Amendments
|
|
(13,441
|
)
|
|
—
|
|
||
Actuarial gains (losses)
|
|
(621
|
)
|
|
2,010
|
|
||
Benefits paid
|
|
(1,055
|
)
|
|
(1,223
|
)
|
||
Projected postretirement benefit obligation at end of year
|
|
$
|
10,739
|
|
|
$
|
24,092
|
|
|
|
Year Ended June 30,
|
||||||
(In thousands)
|
|
2020
|
|
2019
|
||||
Change in Plan Assets:
|
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
|
$
|
—
|
|
|
$
|
—
|
|
Employer contributions
|
|
462
|
|
|
618
|
|
||
Participant contributions
|
|
593
|
|
|
605
|
|
||
Benefits paid
|
|
(1,055
|
)
|
|
(1,223
|
)
|
||
Fair value of plan assets at end of year
|
|
$
|
—
|
|
|
$
|
—
|
|
Projected postretirement benefit obligation at end of year
|
|
10,739
|
|
|
24,092
|
|
||
Funded status of plan
|
|
$
|
(10,739
|
)
|
|
$
|
(24,092
|
)
|
|
|
June 30,
|
||||||
(In thousands)
|
|
2020
|
|
2019
|
||||
Amounts Recognized in the Consolidated Balance Sheets Consist of:
|
|
|
|
|
||||
Current liabilities
|
|
$
|
(744
|
)
|
|
$
|
(1,068
|
)
|
Non-current liabilities
|
|
(9,995
|
)
|
|
(23,024
|
)
|
||
Total
|
|
$
|
(10,739
|
)
|
|
$
|
(24,092
|
)
|
|
|
Year Ended June 30,
|
||||||
(In thousands)
|
|
2020
|
|
2019
|
||||
Amounts Recognized in AOCI Consist of:
|
|
|
|
|
||||
Net gain
|
|
$
|
(2,714
|
)
|
|
$
|
(5,160
|
)
|
Prior service credit
|
|
(8,961
|
)
|
|
(6,936
|
)
|
||
Total AOCI
|
|
$
|
(11,675
|
)
|
|
$
|
(12,096
|
)
|
|
|
Year Ended June 30,
|
||||||
(In thousands)
|
|
2020
|
|
2019
|
||||
Other Changes in Plan Assets and Benefit Obligations Recognized in OCI:
|
|
|
|
|
||||
Unrecognized actuarial gains (loss)
|
|
$
|
(621
|
)
|
|
$
|
2,010
|
|
Prior service (credit) cost
|
|
(13,441
|
)
|
|
—
|
|
||
Unrecognized prior service cost
|
|
—
|
|
|
—
|
|
||
Amortization of net loss
|
|
3,068
|
|
|
835
|
|
||
Amortization of prior service cost
|
|
11,416
|
|
|
1,757
|
|
||
Total recognized in OCI
|
|
422
|
|
|
4,602
|
|
||
Net periodic benefit cost
|
|
(13,312
|
)
|
|
(1,174
|
)
|
||
Total recognized in net periodic benefit credit and OCI
|
|
$
|
(12,890
|
)
|
|
$
|
3,428
|
|
|
|
1-Percentage Point
|
||||||
(In thousands)
|
|
Increase
|
|
Decrease
|
||||
Effect on total of service and interest cost components
|
|
$
|
50
|
|
|
$
|
(43
|
)
|
Effect on accumulated postretirement benefit obligation
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
June 30, 2020
|
|
June 30, 2019
|
||||||||||
(In thousands)
|
|
Debt Origination Date
|
|
Maturity
|
|
Original Borrowing Amount
|
|
Carrying Value
|
|
Weighted Average Interest Rate
|
|
Carrying Value
|
|
Weighted Average Interest Rate
|
||||||
Credit Facility
|
|
Revolver
|
|
11/6/2023
|
|
N/A
|
|
$
|
122,000
|
|
|
4.91
|
%
|
|
$
|
92,000
|
|
|
3.98
|
%
|
(1)
|
retained the revolving commitments under the Credit Agreement of $125.0 million and the sublimit on letters of credit and swingline loans of $15.0 million each;
|
(2)
|
added a $5.0 million quarterly commitment reduction beginning September 30, 2021;
|
(3)
|
adjusted from cash flow-based to an asset-based lending structure with borrowing a base of 85% of eligible accounts receivable plus 50% of eligible inventory with certain permitted maximum over advance amounts;
|
(4)
|
removed all previous financial covenants of net leverage ratio, interest coverage ratio and minimum EBITDA;
|
(5)
|
added a covenant relief period (commencing on the effective date of the Third Amendment and ending upon delivery of a compliance certificate on or after fiscal month ending September 30, 2021), during which the Company must comply with the following:
|
(6)
|
added covenant requiring the Company to maintain a minimum liquidity covenant, tested on a weekly basis;
|
(7)
|
added an anti-cash hoarding provision;
|
(8)
|
added a minimum fixed charge coverage ratio of 1.05:1.00 commencing with fiscal quarter ending September 30, 2021, and tested on a quarterly basis thereafter;
|
(9)
|
modified the applicable margin for base rate loans to range from PRIME + 3.50% to PRIME + 4.50% per annum and the applicable margin for Eurodollar loans to range from Adjusted LIBO Rate + 4.50% to Adjusted LIBO Rate + 5.50% per annum and fixed the commitment fee at 0.50%;
|
(10)
|
provided for the revolving commitments to be reduced upon the occurrence of certain asset dispositions and incurrence of non-permitted indebtedness and imposed additional restrictions on the Company’s ability to utilize certain other negative covenant baskets; and
|
(11)
|
added a requirement to provide mortgages and related mortgage instruments with respect to certain specified real property owned by the Company.
|
|
|
As of June 30,
|
||||||
|
|
2020
|
|
2019
|
||||
Allocated shares
|
|
1,170,015
|
|
|
1,393,530
|
|
||
Committed to be released shares
|
|
—
|
|
|
—
|
|
||
Unallocated shares
|
|
—
|
|
|
—
|
|
||
Total ESOP shares
|
|
1,170,015
|
|
|
1,393,530
|
|
||
|
|
|
|
|
||||
(In thousands)
|
|
|
|
|
||||
Fair value of ESOP shares
|
|
$
|
8,588
|
|
|
$
|
22,812
|
|
|
|
Year Ended June 30,
|
||||||||||
|
|
2020
|
|
2019
|
|
2018
|
||||||
Weighted average fair value of NQOs
|
|
$
|
4.24
|
|
|
$
|
7.78
|
|
|
$
|
10.41
|
|
Risk-free interest rate
|
|
1.5
|
%
|
|
3.0
|
%
|
|
2.0
|
%
|
|||
Dividend yield
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Average expected term
|
|
4.6 years
|
|
|
4.6 years
|
|
|
4.6 years
|
|
|||
Expected stock price volatility
|
|
35.4
|
%
|
|
29.6
|
%
|
|
35.4
|
%
|
Outstanding NQOs:
|
|
Number
of NQOs
|
|
Weighted
Average
Exercise
Price ($)
|
|
Weighted
Average
Remaining
Life
(Years)
|
|
Aggregate
Intrinsic
Value
($ in thousands)
|
||
Outstanding at June 30, 2019
|
|
198,049
|
|
|
27.35
|
|
5.25
|
|
40
|
|
Granted
|
|
536,468
|
|
|
13.16
|
|
—
|
|
—
|
|
Exercised
|
|
(10,360
|
)
|
|
12.48
|
|
—
|
|
28
|
|
Forfeited
|
|
(157,172
|
)
|
|
24.14
|
|
—
|
|
—
|
|
Expired
|
|
(38,027
|
)
|
|
31.31
|
|
—
|
|
—
|
|
Outstanding at June 30, 2020
|
|
528,958
|
|
|
13.92
|
|
6.21
|
|
55
|
|
Exercisable at June 30, 2020
|
|
20,017
|
|
|
28.27
|
|
3.23
|
|
—
|
|
Outstanding PNQs:
|
|
Number
of
PNQs
|
|
Weighted
Average
Exercise
Price ($)
|
|
Weighted
Average
Remaining
Life
(Years)
|
|
Aggregate
Intrinsic
Value
($ in
thousands)
|
||
Outstanding at June 30, 2019
|
|
229,961
|
|
|
26.21
|
|
1.23
|
|
—
|
|
Granted
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Exercised
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Forfeited
|
|
(6,212
|
)
|
|
32.85
|
|
—
|
|
—
|
|
Expired
|
|
(210,119
|
)
|
|
25.86
|
|
—
|
|
—
|
|
Outstanding at June 30, 2020
|
|
13,630
|
|
|
28.60
|
|
2.36
|
|
—
|
|
Exercisable at June 30, 2020
|
|
8,822
|
|
|
26.89
|
|
1.98
|
|
—
|
|
Outstanding and Nonvested Restricted Stock Awards:
|
|
Shares
Awarded
|
|
Weighted
Average
Grant Date
Fair Value
($)
|
|
Outstanding at June 30, 2019
|
|
32,056
|
|
|
21.10
|
Granted
|
|
229,573
|
|
|
13.0
|
Exercised/Released
|
|
(30,352
|
)
|
|
20.8
|
Cancelled/Forfeited
|
|
(12,673
|
)
|
|
17.7
|
Outstanding and nonvested at June 30, 2020
|
|
218,604
|
|
|
13.0
|
Outstanding and Nonvested PBRSUs:
|
|
PBRSUs
Awarded
|
|
Weighted
Average
Grant Date
Fair Value
($)
|
|
Outstanding and nonvested at June 30, 2019
|
|
51,237
|
|
|
27.69
|
Granted
|
|
81,236
|
|
|
14.46
|
Vested/Released
|
|
—
|
|
|
—
|
Cancelled/Forfeited
|
|
(51,136
|
)
|
|
25.63
|
Outstanding and nonvested at June 30, 2020
|
|
81,337
|
|
|
15.78
|
|
|
As of June 30,
|
||||||
(In thousands)
|
|
2020
|
|
2019
|
||||
Accrued postretirement benefits
|
|
$
|
744
|
|
|
$
|
1,068
|
|
Accrued workers’ compensation liabilities
|
|
1,466
|
|
|
1,495
|
|
||
Cumulative preferred dividends, undeclared and unpaid (1)
|
|
1,477
|
|
|
305
|
|
||
Earnout payable(2)
|
|
—
|
|
|
1,000
|
|
||
Working capital dispute payable(3)
|
|
551
|
|
|
354
|
|
||
Other(4)
|
|
2,564
|
|
|
3,087
|
|
||
Other current liabilities
|
|
$
|
6,802
|
|
|
$
|
7,309
|
|
|
|
As of June 30,
|
||||||
(In thousands)
|
|
2020
|
|
2019
|
||||
Finance leases liabilities
|
|
$
|
9
|
|
|
$
|
32
|
|
Derivative liabilities—noncurrent
|
|
2,859
|
|
|
1,612
|
|
||
Deferred compensation (1)
|
|
1,170
|
|
|
—
|
|
||
Cumulative preferred dividends, undeclared and unpaid—noncurrent
|
|
—
|
|
|
618
|
|
||
Deferred income taxes (2)
|
|
1,494
|
|
|
1,795
|
|
||
Other long-term liabilities
|
|
$
|
5,532
|
|
|
$
|
4,057
|
|
|
|
For the Years Ended June 30,
|
||||||||||
(In thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
—
|
|
|
$
|
(1,774
|
)
|
|
$
|
101
|
|
State
|
|
105
|
|
|
231
|
|
|
56
|
|
|||
Total current income tax (benefit) expense
|
|
105
|
|
|
(1,543
|
)
|
|
157
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
(458
|
)
|
|
30,618
|
|
|
17,090
|
|
|||
State
|
|
158
|
|
|
11,036
|
|
|
65
|
|
|||
Total deferred income tax expense
|
|
(300
|
)
|
|
41,654
|
|
|
17,155
|
|
|||
Income tax expense
|
|
$
|
(195
|
)
|
|
$
|
40,111
|
|
|
$
|
17,312
|
|
|
|
For the Years Ended June 30,
|
||||||||||
(In thousands)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Statutory tax rate
|
|
21
|
%
|
|
21
|
%
|
|
28
|
%
|
|||
Income tax (benefit) expense at statutory rate
|
|
$
|
(7,829
|
)
|
|
$
|
(7,032
|
)
|
|
$
|
(272
|
)
|
State income tax (benefit) expense, net of federal tax benefit
|
|
(1,523
|
)
|
|
(1,295
|
)
|
|
12
|
|
|||
Valuation allowance
|
|
9,153
|
|
|
50,123
|
|
|
283
|
|
|||
Change in tax rate
|
|
233
|
|
|
124
|
|
|
18,022
|
|
|||
Retiree life insurance
|
|
—
|
|
|
—
|
|
|
19
|
|
|||
Other (net)
|
|
(229
|
)
|
|
(1,809
|
)
|
|
(752
|
)
|
|||
Income tax expense
|
|
$
|
(195
|
)
|
|
$
|
40,111
|
|
|
$
|
17,312
|
|
|
|
|
|
|
|
|
|
|
As of June 30,
|
|||||||
(In thousands)
|
|
2020
|
|
2019
|
|
||||
Deferred tax assets:
|
|
|
|
|
|
||||
Postretirement benefits
|
|
$
|
20,232
|
|
|
$
|
20,775
|
|
|
Accrued liabilities
|
|
3,970
|
|
|
5,042
|
|
|
||
Net operating loss carryforwards
|
|
38,754
|
|
|
37,768
|
|
|
||
Intangible assets
|
|
9,482
|
|
|
—
|
|
|
||
Operating lease liabilities
|
|
5,419
|
|
|
—
|
|
|
||
Other
|
|
6,893
|
|
|
5,950
|
|
|
||
Total deferred tax assets
|
|
84,750
|
|
|
69,535
|
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
||||
Fixed assets
|
|
(13,427
|
)
|
|
(15,562
|
)
|
|
||
Right-of-use operating lease assets
|
|
(5,513
|
)
|
|
—
|
|
|
||
Other
|
|
(2,950
|
)
|
|
(3,749
|
)
|
|
||
Total deferred tax liabilities
|
|
(21,890
|
)
|
|
(19,311
|
)
|
|
||
Valuation allowance
|
|
(64,354
|
)
|
|
(52,019
|
)
|
|
||
Net deferred tax liabilities
|
|
$
|
(1,494
|
)
|
|
$
|
(1,795
|
)
|
|
|
|
For the Years Ended June 30,
|
||||||||||
(In thousands, except share and per share amounts)
|
|
2020
|
|
2019
|
|
2018
|
||||||
Undistributed net (loss) income available to common stockholders
|
|
$
|
(37,462
|
)
|
|
$
|
(74,054
|
)
|
|
$
|
(18,652
|
)
|
Undistributed net (loss) income available to nonvested restricted stockholders and holders of convertible preferred stock
|
|
(179
|
)
|
|
(76
|
)
|
|
(17
|
)
|
|||
Net (loss) income available to common stockholders—basic
|
|
$
|
(37,641
|
)
|
|
$
|
(74,130
|
)
|
|
$
|
(18,669
|
)
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding—basic
|
|
17,205,849
|
|
|
16,996,354
|
|
|
16,815,020
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
|
||||||
Shares issuable under stock options
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Weighted average common shares outstanding—diluted
|
|
17,205,849
|
|
|
16,996,354
|
|
|
16,815,020
|
|
|||
Net (loss) income per common share available to common stockholders—basic
|
|
$
|
(2.19
|
)
|
|
$
|
(4.36
|
)
|
|
$
|
(1.11
|
)
|
Net (loss) income per common share available to common stockholders—diluted
|
|
$
|
(2.19
|
)
|
|
$
|
(4.36
|
)
|
|
$
|
(1.11
|
)
|
|
|
For the Years Ended June 30,
|
|||||||
|
|
2020
|
|
2019
|
|
2018
|
|||
Shares issuable under stock options
|
|
330,627
|
|
|
157,850
|
|
|
462,032
|
|
Shares issuable under convertible preferred stock
|
|
422,193
|
|
|
407,734
|
|
|
393,769
|
|
Shares issuable under PBRSUs
|
|
73,012
|
|
|
65,971
|
|
|
35,732
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(In thousands, except share and per share amounts)
|
|
|
|
|
|
|
||||||||||||||
Shares Authorized
|
|
Shares Issued and Outstanding
|
|
Stated Value per Share
|
|
Carrying Value
|
|
Cumulative Preferred Dividends, Undeclared and Unpaid
|
|
Liquidation Preference
|
||||||||||
21,000
|
|
|
14,700
|
|
|
$
|
1,101
|
|
|
$
|
16,178
|
|
|
$
|
1,478
|
|
|
$
|
16,178
|
|
|
|
For the Years Ended June 30,
|
|||||||||||||||||||
|
|
2020
|
|
2019
|
|
2018
|
|||||||||||||||
(In thousands)
|
|
$
|
|
% of total
|
|
$
|
|
% of total
|
|
$
|
|
% of total
|
|||||||||
Net Sales by Product Category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Coffee (Roasted)
|
|
$
|
325,764
|
|
|
64.9
|
%
|
|
$
|
378,583
|
|
|
63.5
|
%
|
|
$
|
379,951
|
|
|
62.6
|
%
|
Coffee (Frozen Liquid)
|
|
28,619
|
|
|
5.7
|
%
|
|
34,541
|
|
|
5.8
|
%
|
|
34,794
|
|
|
5.7
|
%
|
|||
Tea (Iced & Hot)
|
|
25,369
|
|
|
5.1
|
%
|
|
33,109
|
|
|
5.6
|
%
|
|
32,477
|
|
|
5.4
|
%
|
|||
Culinary
|
|
50,135
|
|
|
10.0
|
%
|
|
64,100
|
|
|
10.8
|
%
|
|
64,432
|
|
|
10.6
|
%
|
|||
Spice
|
|
21,473
|
|
|
4.3
|
%
|
|
24,101
|
|
|
4.0
|
%
|
|
25,150
|
|
|
4.2
|
%
|
|||
Other beverages(1)
|
|
44,983
|
|
|
9.0
|
%
|
|
58,367
|
|
|
9.8
|
%
|
|
66,699
|
|
|
11.0
|
%
|
|||
Other revenues(2)
|
|
2,701
|
|
|
0.5
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Net sales by product category
|
|
499,044
|
|
|
99.5
|
%
|
|
592,801
|
|
|
99.5
|
%
|
|
603,503
|
|
|
99.5
|
%
|
|||
Fuel surcharge
|
|
2,276
|
|
|
0.5
|
%
|
|
3,141
|
|
|
0.5
|
%
|
|
3,041
|
|
|
0.5
|
%
|
|||
Net sales
|
|
$
|
501,320
|
|
|
100.0
|
%
|
|
$
|
595,942
|
|
|
100.0
|
%
|
|
$
|
606,544
|
|
|
100.0
|
%
|
(1)
|
Includes all beverages other than roasted coffee, frozen liquid coffee, and iced and hot tea, including cappuccino, cocoa, granitas, and concentrated and ready-to drink cold brew and iced coffee.
|
(2)
|
Represents revenues for certain transition services related to the sale of the Company’s office coffee assets.
|
|
|
For The Three Months Ended
|
||||||||||||||
|
|
September 30,
2019 |
|
December 31,
2019 |
|
March 31,
2020 |
|
June 30,
2020 |
||||||||
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
138,600
|
|
|
$
|
152,498
|
|
|
$
|
129,139
|
|
|
$
|
81,083
|
|
Cost of goods sold
|
|
$
|
97,959
|
|
|
$
|
108,513
|
|
|
$
|
91,190
|
|
|
$
|
65,536
|
|
Gross profit
|
|
$
|
40,641
|
|
|
$
|
43,985
|
|
|
$
|
37,949
|
|
|
$
|
15,547
|
|
Selling expenses
|
|
$
|
33,614
|
|
|
$
|
34,906
|
|
|
$
|
31,968
|
|
|
$
|
21,274
|
|
Income (loss) from operations
|
|
$
|
6,892
|
|
|
$
|
8,870
|
|
|
$
|
(45,169
|
)
|
|
$
|
(13,595
|
)
|
Net income (loss)
|
|
$
|
4,654
|
|
|
$
|
7,754
|
|
|
$
|
(39,777
|
)
|
|
$
|
(9,718
|
)
|
Net income (loss) available to common stockholders per common share—basic
|
|
$
|
0.26
|
|
|
$
|
0.44
|
|
|
$
|
(2.32
|
)
|
|
$
|
(0.57
|
)
|
Net income (loss) available to common stockholders per common share—diluted
|
|
$
|
0.26
|
|
|
$
|
0.43
|
|
|
$
|
(2.32
|
)
|
|
$
|
(0.57
|
)
|
|
|
For The Three Months Ended
|
||||||||||||||
|
|
September 30,
2018 |
|
December 31,
2018 |
|
March 31,
2019 |
|
June 30,
2019 |
||||||||
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
147,440
|
|
|
$
|
159,773
|
|
|
$
|
146,679
|
|
|
$
|
142,050
|
|
Cost of goods sold
|
|
$
|
99,205
|
|
|
$
|
106,529
|
|
|
$
|
106,779
|
|
|
$
|
104,327
|
|
Gross profit
|
|
$
|
48,235
|
|
|
$
|
53,244
|
|
|
$
|
39,900
|
|
|
$
|
37,723
|
|
Selling expenses
|
|
$
|
37,310
|
|
|
$
|
39,591
|
|
|
$
|
34,422
|
|
|
$
|
28,324
|
|
(Loss) income from operations
|
|
$
|
(2,078
|
)
|
|
$
|
502
|
|
|
$
|
(6,102
|
)
|
|
$
|
(7,024
|
)
|
Net loss
|
|
$
|
(2,986
|
)
|
|
$
|
(10,100
|
)
|
|
$
|
(51,749
|
)
|
|
$
|
(8,760
|
)
|
Net loss available to common stockholders per common share—basic
|
|
$
|
(0.18
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(3.05
|
)
|
|
$
|
(0.52
|
)
|
Net loss available to common stockholders per common share—diluted
|
|
$
|
(0.18
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(3.05
|
)
|
|
$
|
(0.52
|
)
|
|
/S/ DEVERL MASERANG
|
Deverl Maserang
President and Chief Executive Officer (principal executive officer) |
|
/S/ SCOTT R. DRAKE
|
Scott R. Drake
Chief Financial Officer (principal financial officer) |
|
/S/ DEVERL MASERANG
|
Deverl Maserang
President and Chief Executive Officer (principal executive officer) |
|
/S/ SCOTT R. DRAKE
|
Scott R. Drake
Chief Financial Officer (principal financial officer) |