Farmer Brothers Company (FARM) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $1.62 million, or $ 0.10 a share in the quarter, against a net loss of $1.07 million, or $0.07 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $3.39 million, or $0.21 a share compared with $4.16 million or $0.25 a share, a year ago. Revenue during the quarter went down marginally by 2.22 percent to $130.49 million from $133.44 million in the previous year period. Gross margin for the quarter expanded 133 basis points over the previous year period to 39.24 percent. Operating margin for the quarter period stood at positive 1.92 percent as compared to a negative 0.42 percent for the previous year period.
Operating income for the quarter was $2.50 million, compared with an operating loss of $0.56 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $11.63 million compared with $10.72 million in the prior year period. At the same time, adjusted EBITDA margin improved 88 basis points in the quarter to 8.91 percent from 8.03 percent in the last year period.
"We are pleased to see our teams efforts in strengthening our DSD organization, winning new customers and increasing volume with existing customers, along with enhancing efficiencies in our supply chain reflected in our first quarter results," said president and chief executive officer, Michael Keown. "We grew volume of green coffee pounds sold in the high-single to low-double digits for the third consecutive quarter and believe we are positioned to continue this positive trend through the remainder of the year. Further, our ongoing strong execution allowed us to deliver gross margin expansion and a reduction in operating expenses.
Working capital drops significantlyFarmer Brothers Company has witnessed a decline in the working capital over the last year. It stood at $52.17 million as at Sep. 30, 2016, down 29.61 percent or $21.95 million from $74.11 million on Sep. 30, 2015. Current ratio was at 1.50 as on Sep. 30, 2016, down from 1.96 on Sep. 30, 2015. Cash conversion cycle (CCC) has decreased to 25 days for the quarter from 52 days for the last year period. Days sales outstanding went up to 31 days for the quarter compared with 29 days for the same period last year.
Days inventory outstanding has decreased to 30 days for the quarter compared with 60 days for the previous year period. At the same time, days payable outstanding was almost stable at 36 days for the quarter, when compared with the previous year period.
Debt increases substantially
Farmer Brothers Company has witnessed an increase in total debt over the last one year. It stood at $44.92 million as on Sep. 30, 2016, up 777.96 percent or $39.81 million from $5.12 million on Sep. 30, 2015. Total debt was 11.52 percent of total assets as on Sep. 30, 2016, compared with 2 percent on Sep. 30, 2015. Debt to equity ratio was at 0.24 as on Sep. 30, 2016, up from 0.06 as on Sep. 30, 2015. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
