Farmer Brothers Company · NASDAQ:FARM
Farmer Brothers — Shareholder Meeting (December 2012)
27 slides from Farmer Brothers's shareholder meeting presentation, Dec 12, 2012
Slide 1: 2012 Annual Stockholders Meeting
2012 Annual Stockholders Meeting December 6, 2012
Slide 2: Agenda
• Key Message Points • Business Transition: Historical Perspective • Framer Brothers Overview • Financial Overview for FY 2012 and Q1 2013 • Questions Agenda
Slide 3: Cautionary Statement Regarding Forward-Looking Statements
3 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 performance and the products and services we expect to offer and
Slide 4: Key Message Points
Key Message Points 1 • Overall, we continue making progress improving the Company’s financial results, capabilities, and employee engagement. 2 •We have spent considerable time finishing the recent integrations. This is intended to leverage our specialty coffee capabilities, lower costs, and attract
Slide 5: Business Transition: Historical Perspective
5 Traditional, Premium & Specialty Coffees Primarily Traditional Coffee Three roasting facilities; DSD distribution in 48 states West Coast focused One brand: 2010 Vendor of the Year for Sheetz, Inc. and Target Corporation 2012 Vendor of the Year for Einstein Brothers Restaurant Group Known primaril
Slide 6: Farmer Brothers Overview
6 A leading manufacturer, wholesaler and distributor of coffee, tea and culinary products • Founded in 1912 • Today, one of the country’s largest direct store delivery (DSD) coffee companies Differentiated business model • One of the most complete local, regional and national DSD networks in the cof
Slide 7: Nationwide Distribution Network
7 6 distribution centers and 117 branch warehouses Approximately 500 routes servicing 63,000 customers in 48 states Distribution center Manufacturing facility Branch Nationwide Distribution Network
Slide 8: Industry Drivers: Cautiously Optimistic
Industry Drivers: Cautiously Optimistic SUSTAINABILITY Higher awareness and interest in sustainability. COMPETITION Resurgent competition in coffee market. 61% of consumers and 57% of foodservice operators interested in sustainable/green coffee options FISCAL STATE Positive foodservice sales growth
Slide 9: Farmer Brothers' Growth Strategy
9 • Leverage high quality coffees and teas • Industry leading personnel, convenient DSD service • Leverage route network in less competitive geographic markets • Drive hot and iced tea penetration • Product promotions focused on higher margin items • Use culinary portfolio to increase average invoic
Slide 10: Farmer Brothers' Growth Strategy (continued)
10 • Reduce Inventory Across System • Hedging Strategy • Brand Rationalization • Asset Optimization • Operating Expense Reduction Strategy #5: Attack Non-Value Added Costs Farmer Brothers’ Growth Strategy (continued) • Align Employee Performance to Annual Operating Plan • Clear Employee Evaluation P
Slide 11: DSD Model Focuses on Exceeding Customers' Needs
DSD Club/Depot Broadline 11 Source: Datassentials – Proprietary Data DSD Model Focuses on Exceeding Customers’ Needs Across Our Beverage Portfolio Important Products • Coffee & Tea are TOP profit categories for restaurants. • 1 in 4 operators agree: Coffee & Tea contribute to operation’s overall ima
Slide 12: Investing in the Future
12 LOADING THE TRUCK: In September, we launched a new line of specialty coffees, the Artisan Collection by Farmer Brothers®, as well as Twinings® premium teas. LEADING WITH EXPERTISE: Focused training for all regional sales reps on specialty coffee and tea. UPGRADING PRODUCTION: Adding state-of-the-
Slide 13: Developing Model for National Accounts
13 Industry Leadership Paul Thornton, President Elect, SCAA Connections at Origin Large scale direct trade program in 6 countries Risk Management Innovative hedging tools National DSD Unparalleled reach in 48 states Market Insights Partnerships with Datassential, Nielsen, Symphony IRI, & The Hartman
Slide 14: Major Accounts
RETAIL FOODSERVICE Specialty Grocery/Mass Wholesale Restaurant C-Store Hospitality On-Site/Other 14 Major Accounts
Slide 15: Significant Wins
Significant Wins v4 WYNDHAM’ Gm, Hotels and Resorts a - rR] Pm, @ RAMADA dtoward-Johnson’ Sus thay. Smithsonian Winn. 1) Oo - Institution : Dixie
Slide 16: Improving Employee Performance and Creating Shareholder Value
Improving Employee Performance and Creating Shareholder Value
Slide 17: Building a High Performance Culture
We are focused on restoring the culture of Farmer Brothers Building a High Performance Culture 17 • We are now one company. We are aligning work and processes across the entire company. Completing Integration • Ensuring all employees know where we are going, key strategies, and their role. Strategy
Slide 18: Corporate Responsibility & Sustainability
Corporate Responsibility & Sustainability
Slide 19: What is Corporate Responsibility?
What is Corporate Responsibility? • A corporate function that is a reaction to global social, environmental, and economic issues: – In 40 years, there will be two billion more people and many more engaged in our high-consumptive economy. – Resources are becoming scarcer and more expensive. Waste is
Slide 20: Our Model
Our Model: Social Environmental Economic Development ENVI R O N M EN TA L Giving policy Stewardship funds Fair Trade Healthful company culture Increase worker retention Healthful product Cost control Long-term viability Attract new business Waste reduction Energy reduction Water reduction Track emis
Slide 21: Production Capabilities
TORRANCE HOUSTON PORTLAND 21 coffee, spices coffee, tea coffee Production Capabilities
Slide 22: Financial Overview
Farmer Brothers 100 ye, ssiON ‘ARS & PR a OF PRIDE Sy Financial Overview
Slide 23: Revenue Growth Trend
23 CBI acquisition – April 2007; Sara Lee DSD acquisition – February 2009 Fiscal Year ended June 30 Acquisition of CBI Acquisition of SL DSD (coffee & Tea) Revenue Growth Trend
Slide 24: FY12 Financial Performance vs. FY11
24 Fiscal Year ended June 30 * A reconciliation of EBITDAE to Net Income (Loss) is included in the Company’s form 10-K filed with the SEC for the applicable fiscal year FY12 Financial Performance vs. FY11
Slide 25: Cost of Coffee Has Become More Favorable
25 • Coffee commodity costs more than doubled from July 2010 to May 2011, but after a period of volatility have declined materially since September 2011 • Farmer Brothers increased its prices to cover the cost increase, but like its competitors, lagged somewhat behind the rapid run-up in costs • Cof
Slide 26: FY12 Accomplishments Leading to FY13 Growth
26 FY12 Accomplishments Leading to FY13 Growth Despite unfavorable external factors, increased top line by 7% and grew National Account business by over 20% Increased margin $ per pound on coffee during the year and expect margins to continue to improve in the short term with the improvement in the
Slide 27: Q1 Financial Performance (FY13 vs. FY12 & FY11)
Q1– fiscal year to date ending September 30. * A reconciliation of EBITDAE to Net Income (Loss) is included in the Company’s form 10-K filed with the SEC for the applicable fiscal year 27 Q1 Financial Performance (FY13 vs. FY12 & FY11)
Farmer Brothers — Shareholder Meeting (December 2012) on 6ix