Farmer Brothers Company (FARM) has reported 261.01 percent jump in profit for the quarter ended Dec. 31, 2016. The company has earned $20.08 million, or $1.20 a share in the quarter, compared with $5.56 million, or $0.34 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $2.01 million, or $0.12 a share compared with $5.75 million or $0.35 a share, a year ago.
Revenue during the quarter went down marginally by 2.31 percent to $139.02 million from $142.31 million in the previous year period. Gross margin for the quarter expanded 245 basis points over the previous year period to 39.63 percent. Total expenses were 74.17 percent of quarterly revenues, down from 96.23 percent for the same period last year. This has led to an improvement of 2206 basis points in operating margin to 25.83 percent.
Operating income for the quarter was $35.91 million, compared with $5.36 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $10.26 million compared with $12.83 million in the prior year period. At the same time, adjusted EBITDA margin contracted 164 basis points in the quarter to 7.38 percent from 9.02 percent in the last year period.
"Our second quarter was pivotal for Farmer Brothers as we moved forward in the transformation of our Company and achieved solid financial performance and strong operational execution," said president and chief executive officer, Michael Keown. "We delivered our fourth consecutive quarter of at least mid-single digit volume growth and generated robust gross profit and margin improvement. In addition, we brought on board new key customers and continued to take advantage of a promising pipeline of opportunities.
Working capital drops significantlyFarmer Brothers Company has witnessed a decline in the working capital over the last year. It stood at $50.18 million as at Dec. 31, 2016, down 39.08 percent or $32.19 million from $82.38 million on Dec. 31, 2015. Current ratio was at 1.52 as on Dec. 31, 2016, down from 2.40 on Dec. 31, 2015. Cash conversion cycle (CCC) has decreased to 13 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 31 days for the quarter compared with 56 days for the previous year period. At the same time, days payable outstanding went up to 49 days for the quarter from 33 for the same period last year.
Debt increases substantiallyFarmer Brothers Company has witnessed an increase in total debt over the last one year. It stood at $20.20 million as on Dec. 31, 2016, up 370.75 percent or $15.91 million from $4.29 million on Dec. 31, 2015. Total debt was 5.05 percent of total assets as on Dec. 31, 2016, compared with 1.69 percent on Dec. 31, 2015. Debt to equity ratio was at 0.10 as on Dec. 31, 2016, up from 0.04 as on Dec. 31, 2015. Interest coverage ratio improved to 68.53 for the quarter from 49.18 for the same period last year. 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
