Farmer Brothers Company · NASDAQ:FARM
Farmer Brothers — Investor Presentation (January 2012)
28 slides from Farmer Brothers's investor presentation, Jan 18, 2012
Slide 1: Investor Presentation January 2012
INVESTOR PRESENTATION JANUARY 2012 Exhibit 99.1
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
2 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS Certain statements contained in this presentation, including, but not limited to, statements regarding the development and growth of our business, our intent, belief or current expectations, primarily with respect to future operating perfor
Slide 3: Farmer Brothers Overview
3 FARMER BROTHERS OVERVIEW Leading manufacturer, wholesaler and distributor of coffee, tea and culinary products • Founded in 1912 • Today, the country’s largest direct store delivery (DSD) coffee company Differentiated business model • Most complete local, regional and national DSD network in the c
Slide 4: Farmer Brothers Key Investment Highlights
4 Product Offering National Coverage Acquisition Synergies Technical Expertise Market Position FARMER BROTHERS KEY INVESTMENT HIGHLIGHTS A recognized leader in both premium and cost competitive product offerings Leading national direct delivery footprint Opportunities to continue to realize synergie
Slide 5: Coffee and Tea Markets Continue to Grow
5 COFFEE AND TEA MARKETS CONTINUE TO GROW Mintel Coffee & Tea (2010); National Coffee Association Trends Report (2011); New York Times (July 2011)
Slide 6: Division Description
Division Description 6 Farmer Brothers roasts and distributes coffee, tea and culinary solutions such as spices, soup bases and salad dressings through direct store delivery and broad line distribution. Coffee Bean International, an independent, wholly-owned subsidiary of Farmer Brothers, is one of
Slide 7: Slide 7
Slide 8: Nationwide Distribution Network
7 NATIONWIDE DISTRIBUTION NETWORK • Total facility square footage exceeds 1.5 million square feet • 6 distribution centers and 114 branch warehouses • Approximately 500 routes servicing 63,000 customers
Slide 9: Our Coffee Business Transition
8 TODAY Traditional, Premium & Specialty Coffees PRE 2007 Only Traditional Coffee Three roasting facilities; DSD distribution in 48 states West Coast primarily Multiple brands: – Farmer Brothers – Superior – Coffee Bean International – Panache One brand: Farmer Brothers – Prebica – Cain’s – Metropol
Slide 10: FARM Key Points of Differentiation
9 FARM 5 KEY POINTS OF DIFFERENTIATION Product - Our products include coffee and tea, along with a diverse selection of culinary products and other hot and cold beverages. Delivery - Nearly 3 million square miles of direct and multi-channel distribution. Service - Our high touch service model allows
Slide 11: Quality Execution at All Tiers
10 QUALITY EXECUTION AT ALL TIERS Using small batch, large batch and continuous roasting processes in parallel, we achieve exceptional consistency and quality control over multiple tiers.
Slide 12: Production Capabilities
11 PRODUCTION CAPABILITIES TORRANCE HOUSTON PORTLAND coffee, spices coffee, tea coffee Headquarters • Capacity Utilization Currently at 50 to 60%
Slide 13: National Account Appeal
12 NATIONAL ACCOUNT APPEAL • Broad selection of consistently high quality products and services • Customization capabilities to support individual programs • National direct delivery distribution coverage • Responsive equipment service model with 24hr support • Comprehensive partnership model, inclu
Slide 14: We Sell More Than Just Coffee
13 WE SELL MORE THAN JUST COFFEE Our broad array of products provide diverse menu solutions for our customers
Slide 15: Significant Consumer Accounts
14 SIGNIFICANT CONSUMER ACCOUNTS
Slide 16: Private Label, with Added Value
15 PRIVATE LABEL, WITH ADDED VALUE • Accounts for approximately 15% of sales
Slide 17: when Daysinn RAMADA @@recp
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Slide 18: Farmer Brothers' Growth Strategy
17 FARMER BROTHERS' GROWTH STRATEGY • Increase synergies from the recent acquisitions of Coffee Bean International and Sara Lee • Grow all tiers of Foodservice business – leveraging our competitive advantages: • Low cost producer with available roasting capacity • Unparalleled coffee and allied prod
Slide 19: Sr. Management Team/Key Sales Leaders
18 Name Title Prior Experience SR. MANAGEMENT TEAM/KEY SALES LEADERS Jeffrey Wahba Interim Co-CEO, CFO and Treasurer Patrick Criteser Interim Co-CEO, President and CEO CBI Mark Harding Sr. VP of Operations Larry Garrett General Counsel Hortensia Gomez VP, Controller and Assistant Treasurer Joe Prewe
Slide 20: Farmer Brothers Coffee, Tea & Culinary
Farmer Brothers COFFEE, TEA & CULINARY
Slide 21: Recent Opportunities and Challenges
20 RECENT OPPORTUNITIES AND CHALLENGES • Coffee commodity market more than doubled from July 2010 to May 2011 but is currently about 20% below its 2011 highs • Farmer Brothers increased its prices to cover the cost increase but like its competitors lagged behind the rapid run-up in costs • Commodity
Slide 22: Key 2011 Executed Initiatives
21 KEY 2011 EXECUTED INITIATIVES • Aligned organization to meet current economic needs – reduced headcount by 10% while focusing resources on local markets • Significantly reduced operating expenses as a result of integration efforts – current run rate down more than 15% year over year • Despite unf
Slide 23: Year Revenue Growth Trend
22 5 YEAR REVENUE GROWTH TREND CBI acquisition – April 2007; Sara Lee DSD acquisition – February 2009
Slide 24: FY11 Adjusted EBITDAE Reconciliation
23 FY11 ADJUSTED EBITDAE RECONCILIATION • LIFO accounting impact of $40.3M in FY11 • Adjusted EBITDAE - $18.0M, $21.1M better than 2010 First full year after Sara Lee DSD Coffee and Tea acquisition; one time costs related to integration efforts included
Slide 25: Q1 Financial Performance FY12 vs. FY11
24 Q1 FINANCIAL PERFORMANCE FY12 VS. FY11 Q1 – quarter ending September 30.
Slide 26: Strong Balance Sheet with a Focus on Asset Management
25 (In millions) September 30, 2011 STRONG BALANCE SHEET WITH A FOCUS ON ASSET MANAGEMENT • Inventory - includes LIFO reserve of $70.0 million • PP&E - includes over 50 owned properties Cash and Cash Equivalents 4.6 Short-Term Investments 16.2 Accounts and Notes Receivable 44.6 Inventories 83.4 Othe
Slide 27: Investment Highlights
26 Product Offering National Coverage Acquisition Synergies Technical Expertise Market Position INVESTMENT HIGHLIGHTS A recognized leader in both premium and cost competitive product offerings Leading national direct delivery footprint Opportunities to continue to realize synergies from the recent a
Slide 28: Farmer Brothers Coffee, Tea & Culinary
Farmer Brothers COFFEE, TEA & CULINARY
Farmer Brothers — Investor Presentation (January 2012) on 6ix