(FARM) 2024 Q1 法說會逐字稿

Good afternoon, and welcome to the Farmer Brothers fisca first-quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this call is being recorded.

下午好，歡迎參加 Farmer Brothers 2024 年第一季財報電話會議。 （操作員說明）謹此提醒，此通話正在錄音。

Earlier today, the company issued its quarterly shareholder letter available on the Investor Relations section of Farmer Brothers' website at farmerbros.com. The shareholder letter is also included as an exhibit on the company's Form 10-Q and is available on its website and the Securities and Exchange Commission's website at SEC.gov. A replay of this audio-only webcast will also be available on the company's website approximately two hours after the conclusion of this call.

今天早些時候，該公司發布了季度股東信函，可在 Farmer Brothers 網站 farmerbros.com 的投資者關係部分查看。股東信函也作為附件包含在公司的 10-Q 表格中，並可在公司網站和美國證券交易委員會網站 SEC.gov 上取得。本次電話會議結束後約兩小時後，也將在公司網站上提供此純音訊網路廣播的重播。

Before we begin the call, please note all of the financial information presented is unaudited and various remarks made by management during this call about the company's future expectations, plans, and prospects may constitute forward-looking statements for purposes of the Safe Harbor provisions under the federal securities laws and regulations. This forward-looking statements represent the company's views as of today and should not be relied upon as representing the company's views as of any subsequent date.

在我們開始電話會議之前，請注意，所提供的所有財務資訊均未經審計，管理層在本次電話會議期間發表的有關公司未來預期、計劃和前景的各種言論可能構成前瞻性陳述，以符合安全港條款的目的。聯邦證券法律和法規。本前瞻性陳述代表本公司截至目前的觀點，不應被視為代表本公司截至任何後續日期的觀點。

Results could differ materially from those forward-looking statements. Additional information on factors which could cause actual results and other events to differ materially from those forward-looking statements is available in the company's shareholder letter and public filings.

結果可能與這些前瞻性陳述有重大差異。有關可能導致實際結果和其他事件與這些前瞻性陳述存在重大差異的因素的更多信息，請參閱公司的股東信和公開文件。

On today's call, management will also reference certain non-GAAP financial measures included, including adjusted EBITDA and adjusted EBITDA margin in assessing the company's operating performance. Reconciliation of those non-GAAP financial measures to their most directly comparable GAAP measures is also included in the company's shareholder letter.

在今天的電話會議上，管理層還將參考某些非公認會計準則財務指標，包括調整後的 EBITDA 和調整後的 EBITDA 利潤率來評估公司的營運績效。本公司的股東信中也包括這些非公認會計原則財務指標與其最直接可比較的公認會計原則指標的調節。

And I will now turn the call over to Farmer Brothers' Interim Chief Executive Officer, John Moore. Mr. Moore, please go ahead.

我現在將把電話轉給 Farmer Brothers 臨時執行長約翰·摩爾 (John Moore)。摩爾先生，請繼續。

Good afternoon, everyone, and thank you for joining us today. Immediately after I joined Farmer Brothers in June, we executed on the sale of our direct ship business and refocused our model on what we have always done best, direct store delivery. Since then, we've been strengthening our foundation by appropriately sizing the business, instilling a more efficient operational organization, reducing our cost structure and formalizing an attractive but achievable strategic, long-term, sustainable growth plan. Simply put, Farmer Brothers is getting back to basics and executing on the fundamentals which have made us industry leader for so many years.

大家下午好，感謝您今天加入我們。六月我加入 Farmer Brothers 後，我們立即出售了直接發貨業務，並將我們的模式重新聚焦於我們一直做得最好的業務——直接商店送貨。從那時起，我們一直透過適當調整業務規模、建立更有效率的營運組織、降低成本結構以及正式製定有吸引力但可實現的策略性、長期、可持續成長計劃來鞏固我們的基礎。簡而言之，Farmer Brothers 正在回歸基礎並執行多年來使我們成為行業領導者的基本原則。

Our first-quarter results are a promising preliminary look at these efforts. Overall, our revenue increased year over year, our margins expanded, and our adjusted EBITDA is approaching breakeven. Costs associated with the direct ship business transition, along with sluggish coffee volumes offset some of the gross margin improvement we realized during the quarter. But big picture, we are beginning to trend in the right direction.

我們第一季的業績是對這些努力的一個有希望的初步審視。整體而言，我們的營收逐年成長，利潤率擴大，調整後的 EBITDA 已接近損益兩平。與直航業務轉型相關的成本以及咖啡銷售的低迷抵消了我們在本季實現的毛利率的部分改善。但從整體來看，我們正開始朝著正確的方向發展。

Progress likely won't be linear across all the metrics we track and we anticipate transitional impacts will abate as we move throughout the year. We are confident that we will continue to see improvement in our revenue, gross margins, and operating costs, especially as we focus on driving customer growth, customer retention, and increasing product penetration in the market.

我們追蹤的所有指標的進展可能不會是線性的，我們預計隨著全年的進展，過渡性影響將會減弱。我們有信心，我們將繼續看到我們的收入、毛利率和營運成本的改善，特別是當我們專注於推動客戶成長、客戶保留和提高產品在市場中的滲透率時。

This is all happening at an opportune time as coffee costs trended lower in the quarter and are expected to continue to do so throughout the fiscal year. We're still selling through our higher priced coffee inventory and bringing in new supply at a meaningfully lower cost. In fact, our cost per pound of coffee during the quarter was down 12% on a year-over-year basis and 1.6% from the prior quarter.

這一切都發生在適當的時候，因為本季咖啡成本呈下降趨勢，並且預計整個財年將繼續下降。我們仍在透過價格較高的咖啡庫存進行銷售，並以顯著降低的成本引入新的供應。事實上，本季我們每磅咖啡的成本年減 12%，比上一季下降 1.6%。

Meanwhile, we are making progress on centralizing our roasting and production activities to our Portland, Oregon facility. Once completed, we believe this facility will operate with a significantly reduced conversion cost. In addition, we're working to evaluate and reduce brand and SKU redundancies across our coffee lines to simplify our customer-facing lineup and further streamline production and sales operations. We believe these efforts will continue to drive down our cost of goods sold over the coming quarters.

同時，我們在將烘焙和生產活動集中到俄勒岡州波特蘭工廠方面取得了進展。一旦完工，我們相信該設施的營運成本將顯著降低。此外，我們正在努力評估和減少咖啡系列中的品牌和 SKU 冗餘，以簡化面向客戶的產品陣容，並進一步簡化生產和銷售營運。我們相信這些努力將繼續降低我們未來幾季的銷售成本。

In addition, our AI-driven pricing engine is helping us optimize our pricing strategy. This system is informing necessary and timely changes in prices such as those we implemented in May and October, which are already helping to drive gross margin improvement.

此外，我們的人工智慧驅動的定價引擎正在幫助我們優化定價策略。該系統可以通知必要且及時的價格變化，例如我們在 5 月和 10 月實施的價格變化，這已經有助於推動毛利率的提高。

We are also making headway with several of our growth initiatives. Our new on-trend product additions, including our SHOTT natural-flavored syrups and Boyd's ambient liquid coffee are performing well in their early stages. Our Revive equipment and service business also continues to be a differentiator for our DSD business.

我們的幾項成長計劃也取得了進展。我們新推出的熱門產品，包括 SHOTT 天然風味糖漿和 Boyd 常溫液態咖啡，在早期階段表現良好。我們的 Revive 設備和服務業務也持續成為我們 DSD 業務的差異化因素。

With that, I'll turn it over to Brad to discuss our financials in more detail. Brad?

這樣，我將把它交給布拉德，更詳細地討論我們的財務狀況。布拉德？

Thanks, John, and hello, everyone. Before jumping into the numbers, just a quick reminder, results for fiscal '24 first quarter are reported on a continuing operations basis, reflecting the performance of our DSD business only in the respective periods.

謝謝約翰，大家好。在進入數字之前，快速提醒一下，24 財年第一季的業績是在持續經營的基礎上報告的，僅反映了我們 DSD 業務在相應時期的業績。

From a headline perspective, we're encouraged by the results driven from a transition to DSD-focused business with three of our primary financial metrics, net sales, gross margin, and adjusted EBITDA. Our net sales for the first quarter were $81.9 million, which increased slightly on a year-over-year basis compared to $79.8 million in the first quarter of fiscal '23, driven by higher pricing and offset by lower volumes.

從整體角度來看，我們對向以 DSD 為重點的業務轉型所帶來的結果感到鼓舞，其中包括我們的三個主要財務指標：淨銷售額、毛利率和調整後 EBITDA。我們第一季的淨銷售額為 8,190 萬美元，與 23 財年第一季的 7,980 萬美元相比，同比略有增長，這是由於定價上漲和銷量下降所抵消的。

Our gross profit margin increased to 37.6% for the first quarter of fiscal '24 from 33.8% for the first quarter of fiscal '23. The increase in gross profit represents a 380 basis point increase compared to the prior-year period. Improvement in margin resulted from pricing actions as well as a decrease in our underlying product costs.

我們的毛利率從 23 財年第一季的 33.8% 增至 24 財年第一季的 37.6%。毛利較去年同期成長380個基點。定價行動以及我們的基礎產品成本的下降導致了利潤率的提高。

Operating expenses were $32.9 million for the first quarter of fiscal '24, up from $27.8 million in the prior-year period. This increase was due primarily to a $3.6 million increase in G&A expenses, which were related to severance costs for executive management transitions, a decrease in net gains from the sale of branch properties and other assets and an increase in selling expenses, which was driven by additional spend on vehicles, fleet, and freight. Adjusted EBITDA approached breakeven for the first quarter at a loss of $452,000 compared to a loss of $3.9 million in the same period a year ago.

2024 財年第一季的營運支出為 3,290 萬美元，高於去年同期的 2,780 萬美元。這一增長主要是由於管理及管理費用增加了 360 萬美元，這與執行管理層換屆的遣散費、出售分公司財產和其他資產的淨收益減少以及銷售費用增加有關，而銷售費用的增加是由於車輛、車隊和貨運方面的額外支出。第一季調整後 EBITDA 接近損益兩平，虧損 45.2 萬美元，去年同期虧損 390 萬美元。

Turning to the balance sheet. The end of the first quarter, we had $4 million of unrestricted cash and cash equivalents. We had outstanding borrowings under our credit facility of $23.3 million, utilized $4.6 million of the letters of credit sublimit and had $25.4 million of availability.

轉向資產負債表。第一季末，我們擁有 400 萬美元的不受限制的現金和現金等價物。我們的信貸安排下的未償借款為 2,330 萬美元，使用了 460 萬美元的信用證次級限額，並有 2,540 萬美元的可用資金。

Looking ahead, we're adequately capitalized to execute on our DSD plans. You can expect us to be laser focused on improving efficiency of operations, continuing to reduce our costs, and streamlining how we go to market in terms of brands and product SKUs, all of which, along with anticipated favorable coffee pricing trends, position us well to deliver high gross margins and improved results.

展望未來，我們有足夠的資本來執行我們的 DSD 計劃。您可以期待我們專注於提高營運效率，繼續降低成本，並簡化我們在品牌和產品 SKU 方面進入市場的方式，所有這些，加上預期的有利咖啡定價趨勢，使我們處於有利地位實現高毛利率和改善業績。

With that, I'll turn it back to John. John?

這樣，我會把它轉回給約翰。約翰？

Thanks, Brad. In closing, we're off to a good start in setting the foundation and positioning the company for long-term growth. With a local branch network covering 49 states and equipment servicing capabilities across the country, we remain an industry leader in size, service, and product offerings.

謝謝，布拉德。最後，我們在為公司的長期發展奠定基礎和定位方面有了一個很好的開始。憑藉覆蓋 49 個州的本地分公司網路和遍布全國的設備服務能力，我們在規模、服務和產品供應方面仍然處於行業領先地位。

We are already seeing early-stage improvement in our gross and operating margin profile. And we'll continue to focus on the following: leveraging our nationwide DSD customer network, appropriately sizing our cost structure, continuing to optimize pricing, driving customer growth and retention, increasing market penetration for on-trend products and completing the transitional services associated with our direct ship sale. We believe we're in a position to be able to generate positive free cash flow in early fiscal 2025 and ultimately deliver long-term value to shareholders.

我們已經看到我們的毛利率和營業利潤率狀況出現了早期改善。我們將繼續關注以下方面：利用我們全國範圍內的DSD客戶網絡，適當調整我們的成本結構，繼續優化定價，推動客戶增長和保留，提高流行產品的市場滲透率，並完成與我們的直接船舶銷售。我們相信，我們能夠在 2025 財年初產生正的自由現金流，最終為股東帶來長期價值。

Thank you again to everyone for joining this call and for your continued support of Farmer Brothers. We look forward to speaking with you more soon.

再次感謝大家加入本次電話會議以及對農夫兄弟的持續支持。我們期待盡快與您進一步交談。

And this concludes this conference. Thank you very much for attending today's presentation. You may now disconnect.

本次會議到此結束。非常感謝您參加今天的演講。您現在可以斷開連線。