Farmer Bros Co (FARM) 2025 Q1 法說會逐字稿

Good afternoon and welcome to the Farmer Brothers fiscal first quarter, 2025 earnings conference call. (Operator Instructions)

下午好，歡迎參加 Farmer Brothers 2025 年第一季財報電話會議。 （操作員說明）

Earlier today the company filed its form 10-Q and issued its first quarter results press release which is available on the investor relations section of Farmer Brothers website at farmerbros.com. The release 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，該公司提交了 10-Q 表格並發布了第一季業績新聞稿，該新聞稿可在 Farmer Brothers 網站 farmerbros.com 的投資者關係部分取得。新聞稿也作為附件包含在該公司的 10-Q 表格中，並可在其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，該公司網站上也將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 the purposes of the safe harbor provisions under the federal securities laws and regulations.

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中就公司未來預期、計劃和前景發表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。

These 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. 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 release and public filings.

這些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。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，請參閱該公司的新聞稿和公開文件。

On today's call management will also reference certain non-GAAP financial measures including adjusted EBITDA and adjusted EBITDA margin in assessing the company's operating performance. Reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures is also included in the company's relief and SEC filings. I will now turn the call over to farmer brothers, President and Chief Executive Officer John Moore. Mr. Moore. Please go ahead.

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。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也包含在公司的救濟和美國證券交易委員會的文件中。現在我將把電話轉給農民兄弟總裁兼執行長約翰摩爾。摩爾先生。請繼續。

Good afternoon, everyone and thank you for joining us. The first quarter showed steady improvement for Farmer Brothers. We saw solid sales growth and meaningful gains in both gross margin and adjusted EBITA on a year over year and quarter over quarter basis. These results underscore the positive progress we have made recently.

大家下午好，感謝您加入我們。農夫兄弟第一季表現穩定改善。我們看到銷售穩健成長，毛利率和調整後息稅折舊攤提前利潤較去年同期和季比都有顯著成長。這些結果凸顯了我們最近的積極進展。

They are also the result of efforts related to our brand pyramid and skew rationalization initiatives, enhancements with our inventory management processes, proactive and favorable pricing updates and realignments within our sales team.

它們也是與我們的品牌金字塔和傾斜合理化計劃、庫存管理流程的增強、積極和有利的定價更新以及銷售團隊內部重組相關的努力的結果。

During the quarter. We achieved another milestone related to our brand pyramid initiative with the refresh of our premium Boyd's coffee brand. Boyd's includes a diverse range of classic light, medium and dark roasts. In addition to single origin and flavored offerings. Boyd's is specifically geared toward our C-store, casual dining restaurants, hospitality, health care, entertainment and gaming customers. Historically Boyd has been predominantly a West Coast brand. However, as part of our brand pyramid initiative, it will now be our premier premium nationwide coffee offering.

本季期間。透過更新我們的優質博伊德咖啡品牌，我們實現了與品牌金字塔計畫相關的另一個里程碑。 Boyd's 提供各種經典的淺度、中度和深度烘焙咖啡。除了單一產地和風味產品外。 Boyd's 專門為我們的便利商店、休閒餐廳、飯店、醫療保健、娛樂和遊戲客戶而設。歷史上，Boyd 主要是西海岸品牌。然而，作為我們品牌金字塔計劃的一部分，它現在將成為我們全國各地首屈一指的優質咖啡產品。

We will be announcing our new specialty tier brand in the next few months, and we will have more details on our next call. We are incredibly excited about the addition of this brand as it marks the final phase of our brand pyramid initiative and a reintroduction of farmer brothers into the specialty coffee space.

我們將在接下來的幾個月內宣布我們的新專業級品牌，我們將在下次電話會議上提供更多詳細資訊。我們對這個品牌的加入感到非常興奮，因為它標誌著我們品牌金字塔計劃的最後階段以及農民兄弟重新進入精品咖啡領域。

By simplifying our brands and product offerings. We have been able to remove redundancies, optimize our roasting streamline operational facilities and enhance the overall customer experience. We have achieved all of this while aggressively managing our working capital and costs. Once complete, our customers will have options across multiple flavor profiles and up and down the value chain allowing them to participate at the level and price structure which works best for them. This is something we believe will help us drive customer growth and retention.

透過簡化我們的品牌和產品供應。我們已經能夠消除冗餘，優化我們的烘焙簡化營運設施並增強整體客戶體驗。我們在積極管理營運資金和成本的同時實現了這一切。完成後，我們的客戶將擁有多種口味配置以及價值鏈上下的選擇，使他們能夠以最適合他們的水平和價格結構參與其中。我們相信這將幫助我們推動客戶成長和保留。

Additionally, we have been working to optimize and add density to our existing DSD routes as part of our commitment to having the right products in the right place at the right time and at the right value proposition for our customers. This mantra is one of the most important aspects of our business and plays a crucial role in customer service growth and retention. We believe customer retention has continued to stabilize thanks to these efforts and improved execution by our restructured sales force.

此外，我們一直致力於優化和增加現有 DSD 路線的密度，作為我們承諾的一部分，即在正確的時間、正確的地點為客戶提供正確的價值主張。這一口號是我們業務最重要的方面之一，在客戶服務成長和保留方面發揮著至關重要的作用。我們相信，由於這些努力以及我們重組後的銷售團隊執行力的提高，客戶保留率持續穩定。

We are also proactively working to navigate the volatility. The industry is seeing in coffee markets and changes in consumer behaviors to mitigate these impacts. We are being nimble in commodity purchasing and inventory management. We are also utilizing our customer data as a way to gain a deeper understanding and further insight into the impact macroeconomic trends have on our customer base and their ordering habits.

我們也積極努力應對波動。該行業正在觀察咖啡市場和消費者行為的變化，以減輕這些影響。我們在商品採購和庫存管理方面非常靈活。我們也利用客戶資料來更深入地了解和洞察宏觀經濟趨勢對我們的客戶群及其訂購習慣的影響。

To that end, we piloted a short-term customer focused sales incentive with positive results. During the recent quarter, we will continue these efforts and explore additional opportunities to offset potential headwinds while also continuing to focus on selling in addition products to existing customers.

為此，我們試行了以客戶為中心的短期銷售激勵措施，並取得了正面成果。在最近一個季度，我們將繼續這些努力，探索更多機會來抵消潛在的不利因素，同時繼續專注於向現有客戶銷售更多產品。

Overall, we are confident the initiatives we put in place and the operational improvements we made throughout fiscal 2024 are helping us to navigate the challenges posed by macroeconomic headwinds and a volatile commodity pricing environment. From strategic pricing initiatives to enhanced operational efficiency to a focus on the value proposition, we can provide our customers as a true specialty goods provider. We feel farmer brothers is fundamentally better positioned to meet ongoing market demands than it has been in many years. With that. I will turn it over to Vance to discuss our financials in more detail. Vance?

總體而言，我們相信我們在 2024 財年採取的措施和所做的營運改善將幫助我們應對宏觀經濟逆風和不穩定的大宗商品定價環境帶來的挑戰。從策略定價措施到提高營運效率，再到注重價值主張，我們可以作為真正的特色商品供應商為客戶提供服務。我們認為，農民兄弟從根本上比多年來更能滿足持續的市場需求。就這樣。我會將其交給萬斯，更詳細地討論我們的財務狀況。萬斯？

Thanks John and good afternoon, everyone. Our first quarter results represent a solid start to our fiscal year and reflect meaningful progress in positioning Farmer Brothers on a more solid foundation for future growth adjusted even for the quarter was positive at $1.4 million. An improvement of $1.9 million on a year over year basis when compared to a 500,000 loss in the first quarter of last year. This was also a quarter over quarter improvement of almost $3 million when compared to a $1.6 million loss in the fourth quarter of fiscal '24.

謝謝約翰，大家下午好。我們第一季的業績代表了我們財年的良好開端，反映出在為 Farmer Brothers 奠定更堅實的未來成長基礎方面取得的有意義的進展，即使該季度調整後的業績為 140 萬美元。與去年第一季虧損 50 萬美元相比，年增了 190 萬美元。與 2024 財年第四季 160 萬美元的虧損相比，這一季度環比增長了近 300 萬美元。

Our improved adjusted EBITDA was largely driven by gross margin expansion. For the first quarter, our gross margin increased 630 basis points year over year to 43.9% compared to 37.6% in the first quarter of last year and increased 510 basis points sequentially compared to 38.8% last quarter. Our growth margin results primarily reflect our continued price optimization efforts as well as actions taken to address elevating coffee markets. For the first quarter, net sales increased $85.1 million. A $3.2 million or nearly 4% increase compared to the first quarter of last year.

我們改善的調整後 EBITDA 主要是由毛利率擴張所推動的。第一季度，我們的毛利率年增 630 個基點至 43.9%，而去年第一季為 37.6%；較上季的 38.8% 較上季成長 510 個基點。我們的利潤率成長結果主要反映了我們持續的價格優化努力以及為解決不斷增長的咖啡市場而採取的行動。第一季淨銷售額增加 8,510 萬美元。與去年第一季相比增加了 320 萬美元，近 4%。

This sales growth along with margin expansion resulted in a gross profit increase of $6.5 million to $37.3 million for the quarter compared to $30.8 million in the same period last year. Operating expenses were $40.1 million or 47.2% of net sales in the first quarter compared to $32.9 million or 40.1% of net sales in the first quarter of last year. This year over year increase was driven by an $8.5 million difference in net gains on asset sales as there were no grant sales during the first quarter of this fiscal year.

銷售成長以及利潤率擴張導致本季毛利增加 650 萬美元，達到 3,730 萬美元，去年同期為 3,080 萬美元。第一季營運費用為 4,010 萬美元，佔淨銷售額的 47.2%，而去年第一季營運費用為 3,290 萬美元，佔淨銷售額的 40.1%。同比成長是由資產銷售淨收益差異 850 萬美元推動的，因為本財年第一季沒有補助金銷售。

When adjusted for asset sales, operating expenses declined by $1.2 million or 3.2% of net sales year over year, reflecting the operational efficiencies which have been accomplished and our continued progress in optimizing our cost structure. Our net loss for the quarter was $5 million compared to a net loss of $1.6 million in the first quarter of last year. You should note that last year included $6.8 million of net gains related to asset disposals. While this quarter included a $1.7 million net loss related to asset disposals.

在根據資產銷售進行調整後，營運費用年減 120 萬美元，佔淨銷售額的 3.2%，反映了營運效率的提高以及我們在優化成本結構方面的持續進展。我們本季的淨虧損為 500 萬美元，而去年第一季的淨虧損為 160 萬美元。您應該注意到，去年包括與資產處置相關的 680 萬美元淨收益。而本季包括與資產處置相關的 170 萬美元淨虧損。

Looking at the balance sheet as of September 30, 2024, we had $3.3 million of unrestricted cash and cash equivalents $1.9 million in restricted cash and $23.3 million in outstanding borrowings under our credit facility with $27.1 million of additional borrowing capacity. We are making solid progress towards our goal of positive free cash flow as demonstrated in our improved cash flow from operating activities which improved to positive $2.5 million in the first quarter of this year.

截至2024 年9 月30 日的資產負債表顯示，我們的信貸安排下擁有330 萬美元的非限制性現金和現金等價物、190 萬美元的限制性現金和2,330 萬美元的未償借款，以及2,710 萬美元的額外借款能力。我們正在朝著正自由現金流的目標取得堅實進展，今年第一季經營活動現金流改善至 250 萬美元，證明了這一點。

This represents a $9.6 million improvement compared to negative $7.1 million in the first quarter of last year and a $3.5 million improvement compared to negative $1 million last quarter. This marks five consecutive quarters of improved cash from operating activities.

與去年第一季的負 710 萬美元相比，這意味著增加了 960 萬美元，與上一季的負 100 萬美元相比，增加了 350 萬美元。這標誌著經營活動現金連續五季有所改善。

We are encouraged by the solid quarter and the significant improvements we have achieved in gross margin adjusted EBITDA and cash flow. We are however mindful of the current volatility in coffee, commodity markets and the macroeconomic environment. While we are proactively working to address these conditions, we do not expect our financial results to be linear quarter to quarter. We remain confident we are on the right path in building the right foundation to generate sustainable value creation. With that, I will turn it back to John. John?

我們對季度的穩健表現以及毛利率調整後 EBITDA 和現金流方面取得的顯著改善感到鼓舞。然而，我們注意到咖啡、大宗商品市場和宏觀經濟環境當前的波動。雖然我們正在積極努力解決這些問題，但我們預計我們的財務表現不會按季度線性成長。我們仍然相信，我們正走在正確的道路上，為創造永續的價值奠定正確的基礎。有了這個，我會把它轉回給約翰。約翰？

Thanks Vance. overall, we believe this quarter provides a glimpse of the long-term potential of Farmer Brothers and what we can achieve with gross margins reaching a level not seen since March of 2022 and positive adjusted EBITDA performance, we believe we are on the right track. It appears our internal initiatives are starting to gain traction which should allow us to realize additional efficiency, working capital and operational gains throughout this fiscal year and beyond.

謝謝萬斯。總體而言，我們認為本季讓我們看到了Farmer Brothers 的長期潛力，以及我們可以實現的目標，即毛利率達到2022 年3 月以來的最高水平，並且調整後的EBITDA 表現呈正數，我們相信我們正走在正確的軌道上。我們的內部舉措似乎開始受到關注，這將使我們能夠在本財年及以後實現更高的效率、營運資本和營運收益。

We do however recognize we are not seeing the top line results. We know we need to draw significant scale and long-term growth. This will be a continued point of emphasis for us in fiscal 2025 as we focus on customer growth, adding density across our existing DSD routes and selling additional products into our existing customer base as a means to generate additional revenue and protect our margins.

然而，我們確實認識到我們沒有看到最重要的結果。我們知道我們需要實現顯著的規模和長期的成長。這將是我們在 2025 財年繼續關注的重點，因為我們專注於客戶成長，增加現有 DSD 路線的密度，並向現有客戶群銷售更多產品，作為產生額外收入和保護利潤的手段。

We are confident we will continue to build on this positive momentum as we remain focused on providing outstanding customer service, strong operational execution, fundamental performance and proactively mitigating market factors to drive sustainable growth and long-term value for our shareholders.

我們相信，我們將繼續鞏固這一積極勢頭，繼續專注於提供卓越的客戶服務、強大的營運執行力、基本業績和積極緩解市場因素，以推動股東的可持續成長和長期價值。

Before we open it up for questions, I would like to take a moment to thank our team for their tremendous work. Their entrepreneurial spirit and commitment to continuous improvement is evident in our recent results. Our success both in the near and long term would not be possible without them. With that, I want to thank you all for joining us on the call today. Operator, we will now open it up for questions.

在我們開始提問之前，我想花點時間感謝我們的團隊所做的巨大工作。他們的創業精神和對持續改進的承諾在我們最近的業績中得到了體現。沒有他們，我們就不可能在近期和長期取得成功。在此，我要感謝大家今天加入我們的電話會議。接線員，我們現在開始提問。

(Operator Instructions)

（操作員說明）

Gerard Sweeney, Roth Capital.

杰拉德·斯威尼，羅斯資本。

Good afternoon, John. Thanks for taking my call.

下午好，約翰。感謝您接聽我的電話。

Hi Gerard, how are you?

嗨傑拉德，你好嗎？

Doing Well. Wondering if we could start with the growth and density in the routes and it was something that I paid particular attention to. But want to understand churn how that's coming along and some of the growth initiatives and how they have taken place and then maybe we can talk about. (inaudible)

做得很好。想知道我們是否可以從路線的增長和密度開始，這是我特別關注的事情。但想要了解客戶流失是如何發生的以及一些成長舉措以及它們是如何發生的，然後也許我們可以討論。 （聽不清楚）

Sure. So, even since our last call, we are seeing a continued positive trend when it comes to churn, there's no question within the industry, it's there are some headwinds that are, you are seeing some single digit to low double digit declines comparable year on year unit sales and degradation frequency of visits, average consumer spend, and consumer spend in general is relatively soft. Having said that we are seeing that our levels of retention are even better than we had anticipated. Given some of the necessary price actions that we have taken over the last quarters, given the coffee markets.

當然。因此，即使自我們上次電話會議以來，我們仍然看到客戶流失率持續呈積極趨勢，行業內毫無疑問，但存在一些不利因素，您會看到與去年同期相比出現了個位數到低兩位數的下降年度單位銷售額和訪問頻率、平均消費者支出下降，且消費者支出整體相對疲軟。話雖如此，我們發現我們的保留水準甚至比我們預期的還要好。鑑於咖啡市場，我們在過去幾季採取了一些必要的價格行動。

So, at this point, we are reaching pretty much an inflection point there. And you can imagine we look at this weekly and some weeks are positive somewhat, some weeks are negative a little bit somewhat, but we are talking about the values that in some cases are under that are single digits in an estate of approximately 30,000 customers.

所以，在這一點上，我們幾乎已經達到了一個轉折點。你可以想像我們每週看一下，有些周有些積極，有些周有些消極，但我們談論的是在某些情況下在大約 30,000 名客戶的資產中低於個位數的值。

So, we are feeling like we are in a very good space there and getting better when it comes to then flipping into a growth trajectory. I think that's where we are really doubling down on our need to commit to outstanding customer service. Keeping in mind that commitment to right place, right time, right product, right value. We feel as though we have taken significant strides over the last year in resolving. What were some of those out-of-stock issues? Not having the stock where we needed it, when we needed it. We have pretty much resolved all of those issues.

因此，我們感覺我們處於一個非常好的空間，並且在進入成長軌跡時變得更好。我認為這就是我們真正需要加倍努力致力於提供卓越客戶服務的地方。請牢記對正確地點、正確時間、正確產品和正確價值的承諾。我們覺得去年我們在解決問題方面取得了重大進展。缺貨問題有哪些？當我們需要的時候，我們需要的地方卻沒有庫存。我們幾乎已經解決了所有這些問題。

The other major theme was equipment again where we needed it. And when again, there we had a rapid deployment system, we have now got equipment where we need it. We have leveraged our refurb capability. So, we have managed to do all of this in having a finished goods portfolio in the right place, right time with no increase. In fact, a decrease in days on hand inventory with our finished goods and a decrease in our CapEx related to brewing equipment. So, very pleased with where all of that is going and looking to improve that going forward.

另一個主要主題是我們需要的設備再次出現。再次，我們有一個快速部署系統，我們現在已經在需要的地方找到了設備。我們充分利用了我們的翻新能力。因此，我們成功地做到了所有這些，在正確的地點、正確的時間擁有成品組合，而且沒有增加。事實上，我們的成品庫存天數減少，以及與釀造設備相關的資本支出減少。因此，我對這一切的進展感到非常滿意，並希望未來能夠改進。

Got you and then the out-of-stock issues that's addressed by you skew rationalization and brand pyramid collapses everything so you can have the part of the right product at the right place right time is that (inaudible)

得到了你，然後你解決的缺貨問題扭曲了合理化，品牌金字塔崩潰了一切，這樣你就可以在正確的時間正確的地點擁有正確的產品的一部分是（聽不清）

I think it's a congruence of a number of things. It is most definitely those things in addition to taking a real careful look at how are we converting customer by customer from 1Q set into another and really being deliberate about that process and making sure that the communication to all of the team members in the field was done in a very deliberate and thoughtful fashion and then the customers were treated again, with that white glove service and coached through the transition to mitigate any potential attrition related to that.

我認為這是許多事情的一致性。除了真正仔細地研究我們如何將客戶從第一季度轉變為另一季度並真正深思熟慮該流程並確保與該領域所有團隊成員的溝通是最肯定的之外，這絕對是這些事情以一種非常深思熟慮和深思熟慮的方式完成，然後客戶再次受到白手套服務的對待，並在過渡過程中得到指導，以減少與此相關的任何潛在的流失。

Got it. And then obviously, growth part of it is limiting churn and if not growing customers, but how much of growth comes from maybe adding new routes or adjusting routes. And then, and obviously, like I said more stops, more product sales per stop.

知道了。顯然，成長的一部分是限制客戶流失，如果不是增加客戶的話，但有多少成長來自於增加新航線或調整航線。然後，顯然，就像我說的那樣，停靠點越多，每個停靠站的產品銷售就越多。

Sure. I think that's a great question. I think we are, if anything looking to optimize our routes and get even more value out of the routes that we have, I don't know that we need to add significantly to our route network. We have another a number of routes where we can improve utilization simply by focusing our business development efforts specific to those areas. And that's one of the things that we are looking about getting a bit better with over the quarters ahead, making sure that our business development efforts are focused in a very deliberate way so that that density is achieved to really optimize the route structure and get as much value out of it as possible.

當然。我認為這是一個很好的問題。我認為，如果我們想優化我們的航線並從我們現有的航線中獲得更多價值，我不知道我們需要大幅增加我們的航線網絡。我們還有另外一些路線，只需將我們的業務開發工作集中在這些領域即可提高利用率。這是我們希望在未來幾季做得更好的事情之一，確保我們的業務開發工作以非常審慎的方式集中，以便實現密度，以真正優化路線結構並獲得盡可能地發揮它的價值。

But the other piece of that is really unlocking the potential value that's there already within. Again, that estate of approximately 30,000 customers through better product penetration. I mean the best dollars to be had are in the existing accounts where there's no additional deployment of CapEx or Brewers, you are just basically selling in products that you already have on your truck and realizing the value of them. So I think we have a tremendous opportunity there.

但另一件事是真正釋放其中已有的潛在價值。同樣，透過更好的產品滲透，該群體擁有約 30,000 名客戶。我的意思是，最好的資金存在於現有帳戶中，無需額外部署資本支出或釀酒商，您基本上只是銷售卡​​車上已有的產品並實現它們的價值。所以我認為我們在那裡有巨大的機會。

How do you, how do we unlock that? This is a follow up. (technical difficulty)

你如何，我們如何解鎖？這是後續行動。 （技術難度）

Sure, I think with deliberate and thoughtful planning and execution, I think we are getting better and better about approaching our customers with the totality of product mix. Enabling our route sales representatives to be better equipped to get into those conversations with our customers and then also enabling our account executives with the tools that they need to go out and make a more profitable, more comprehensive customers.

當然，我認為透過深思熟慮和深思熟慮的規劃和執行，我認為我們在透過整體產品組合來接近客戶方面做得越來越好。使我們的路線銷售代表能夠更好地與客戶進行對話，然後還使我們的客戶主管能夠獲得他們需要的工具，從而結識更有利可圖、更全面的客戶。

So, what I mean by that they can go in now with a tool that they have and if they are again selling pancake mix, they should be selling the syrup that goes right along with that pancake mix. Clearly, they should be selling orange juice, they should be selling coffee, they should be selling tea.

所以，我的意思是，他們現在可以使用他們擁有的工具進入，如果他們再次銷售煎餅混合物，他們應該銷售與煎餅混合物一起使用的糖漿。顯然，他們應該賣柳橙汁，他們應該賣咖啡，他們應該賣茶。

Got it. Okay. That is, it for me. I will jump back in line. I appreciate it.

知道了。好的。也就是說，它適合我。我會跳回隊列。我很感激。

Thank you, Gerard.

謝謝你，傑拉德。

Eric Des Lauriers, Craig-Hallum Capital Group.

艾瑞克‧德斯‧勞裡爾斯 (Eric Des Lauriers)，克雷格-哈勒姆資本集團。

Great. Thank you for taking my questions and congrats on the strong quarter here.

偉大的。感謝您回答我的問題，並祝賀本季的強勁表現。

Thank you.

謝謝。

My first question is in regard to getting back into specialty coffee with this new brand that's to be announced in the coming months here. How should we think about that impacting financials? And I guess we can start with just kind of the revenue side of things. Should we think of this essentially as reentering a new category and that mostly incremental sales opportunities or is there any sort of, I guess cannibalization of existing revenues, maybe your customers, buying premium, where like more premium while they can't buy specialty. I'm just kind of wondering how we should think about the impact on revenues.

我的第一個問題是關於這個新品牌重返精品咖啡領域，該品牌將在未來幾個月內在這裡宣布。我們該如何看待這對財務的影響？我想我們可以從收入方面開始。我們是否應該認為這本質上是重新進入一個新類別，並且主要是增量銷售機會，或者是否存在任何形式的，我猜現有收入的蠶食，也許是你的客戶，購買溢價，在他們無法購買專業產品的情況下喜歡更多溢價。我只是想知道我們應該如何考慮對收入的影響。

That's a great question, Eric I think in the short term, it would be optimization on the sourcing and manufacturing and distribution side. In that we already have built into our network, a significant number of pounds in the specialty space. We haven't had a unified brand message around any of that for ever really in our history. And that's always been somewhat regional. And so in in launching this new brand expression, the first step will be transitioning the existing volume that's in the specialty space to this new brand experience.

這是一個很好的問題，埃里克，我認為在短期內，這將是採購、製造和分銷方面的最佳化。我們已經在我們的網路中建立了專業領域的大量資源。在我們的歷史上，我們還沒有關於任何一個真正的統一的品牌訊息。這總是有些地區性的。因此，在推出這個新的品牌表達時，第一步是將專業空間中的現有體積轉變為新的品牌體驗。

But from there, we can start to think about how do we roll that out nationally as a new portfolio of goods to customers that have never been exposed to Farmer Brothers as special coffee roaster before. And I think that's where you will start to see incremental revenue through the specialty brand and specialty as most people in the coffee business have seen is the fastest growing side of the coffee space. So, we are really excited to think about what that might mean for us.

但從那時起，我們可以開始思考如何在全國範圍內將其作為新的商品組合推廣給以前從未接觸過 Farmer Brothers 作為特殊咖啡烘焙商的客戶。我認為這就是您將開始透過特色品牌和特色看到增量收入的地方，因為咖啡行業的大多數人都看到這是咖啡領域中成長最快的一面。因此，我們非常高興地思考這對我們可能意味著什麼。

That makes sense. And I guess that sort of brings up another question for me on Boyd's you mentioned that it's been a west coast brand, you are now bringing it nationally. Are there any sort of areas where you were perhaps under indexed or didn't have much exposure to premium coffee? And thus, this Boyd's brand could also represent some incremental opportunity or is it sort of similar to just different brands and not a unified brand approach?

這是有道理的。我想這給我帶來了另一個問題，關於博伊德，你提到它是一個西海岸品牌，現在你要把它推向全國。是否有任何類型的領域您可能索引不足或沒有太多接觸優質咖啡？因此，這個博伊德的品牌也可能代表一些增量機會，或者它是否有點類似於不同的品牌，而不是統一的品牌方法？

No, I would say there are incremental opportunities with Boyd's in it as a comprehensive program that comes with [POS] materials that comes with marketing that comes with some initiatives that will really build equity into that as a brand experience that will be relatively new for Boyd's. It's been mostly a West Coast phenomenon to date, but it's performing particularly well in the C-store channel.

不，我想說的是，Boyd's 作為一個綜合計劃，附帶了[POS] 材料，附帶了一些營銷舉措，這些舉措將真正建立公平性，作為一種相對較新的品牌體驗，其中有增量機會。迄今為止，這主要是一種西海岸現象，但它在便利商店通路的表現尤其出色。

It's also very strong as we had mentioned in health care entertainment, casino gaming. It really checks a lot of boxes for people that are looking for that somewhat better experience in coffee, better value proposition. And we have not explored that comprehensively in other parts of the country with any kind of uniform brand messaging. So, we definitely see an opportunity there.

正如我們在醫療保健娛樂、賭場遊戲中提到的那樣，它也非常強大。對於那些尋求更好的咖啡體驗、更好的價值主張的人來說，它確實滿足了許多要求。我們還沒有在該國其他地區全面探索這一點，並提供任何統一的品牌資訊。所以，我們肯定在那裡看到了機會。

All right, that's helpful. And then I guess just margin wise. So, under understood that specialty is not just like a new incremental opportunity, but that there is opportunity for incremental sales. So, as we just kind of think about that on the on the gross margin side, can you help us understand if there's much of a difference at all between, I guess, all three of these categories to kind of help us understand how you see margins between them.

好的，這很有幫助。然後我想只是保證金方面的。因此，人們不理解的是，專業不僅僅是一個新的增量機會，而且是增量銷售的機會。因此，當我們只是在毛利率方面考慮這一點時，您能否幫助我們了解我想這三個類別之間是否存在很大差異，以幫助我們了解您的看法它們之間的邊距。

I mean, I don't know that we see them as particularly different on a percentage point basis. Of course, given that the top line contribution on a dollar's basis will be different just based on the value proposition from a top line dollars perspective, you will see more contribution from the specialty than you might from the commercial or premium. Having said that typically there are there in our system to date, there is more volume to be had in the commercial space and then a modicum of volume in the premiere or premium space. And then specialty really is truly the tip of the iceberg for us. We are excited to see where that goes in the future.

我的意思是，我不知道我們是否認為它們在百分點上有特別不同。當然，考慮到以美元為基礎的頂線貢獻將根據頂線美元角度的價值主張而有所不同，您將看到來自專業領域的貢獻比來自商業或溢價的貢獻更多。話雖如此，到目前為止，我們的系統中通常存在這樣的情況，商業空間中的數量較多，首映或高級空間中的數量也較少。對我們來說，專業確實只是冰山一角。我們很高興看到未來的發展方向。

Yeah, that's awesome. Could you elaborate a bit more on the gross margin drivers, I guess the drivers and the improvement that we have seen besides your price optimization efforts, (inaudible) you mentioned something else around the commodity pricing, but I was just, I was a little I guess, I was confused there.

是的，那太棒了。您能否詳細說明一下毛利率驅動因素，我猜除了您的價格優化工作之外，我們還看到了驅動因素和改進，（聽不清楚）您提到了有關商品定價的其他內容，但我只是，我有點我想，我在那裡很困惑。

Yeah, sure Eric. Yeah, so as you know, we throughout the course of the last several quarters, we have been working on that pricing optimization effort really in response to what we were seeing in terms of elevating commodity markets. And the coffee markets, we wanted to make sure that we weren't behind that curve. And so, we were taking pricing actions in response to the rising market. And so, that was just obviously to make sure that we are not falling behind. And so, we are seeing a little bit of that in the first quarter where we are still not quite seeing the full effect of that higher cost inventory. But realizing the pricing action that's going to be necessary to offset that as it comes through over the next couple of quarters.

是的，當然是埃里克。是的，正如你所知，在過去的幾個季度中，我們一直在致力於定價優化工作，真正響應我們所看到的大宗商品市場的提升。對於咖啡市場，我們希望確保我們沒有落後於這一趨勢。因此，我們採取定價行動來應對不斷上漲的市場。因此，這顯然是為了確保我們不會落後。因此，我們在第一季看到了一些這種情況，但我們仍然沒有完全看到成本較高的庫存的全部影響。但要意識到，在接下來的幾個季度中，有必要採取定價行動來抵消這一影響。

Got it. And just last question for me, can you comment on the prospect for potential further asset disposals? Just kind of wondering if this is something that we should think of is largely behind us now or if there's still some opportunities going forward?

知道了。最後一個問題是，您能否評論一下潛在的進一步資產處置的前景？只是想知道我們現在是否應該考慮這一點，或者是否仍然存在一些機會？

I mean, I think what we, as we said in the past, we are not relying on those as a business strategy in any way, shape or form for us. It's truly, it's looked at opportunistically and, in some cases, we have a network of branches dating back decades and as we all know urban centers have changed over that span and we may not have branches in an area that matches the need any longer. So, in some cases, we will get entertain offers for branches that are no longer perfectly suited for our needs, but it's not part of our ongoing business strategy.

我的意思是，我認為，正如我們過去所說，我們並不以任何方式、形式或形式依賴這些作為我們的業務策略。確實，這是機會主義的，在某些情況下，我們擁有幾十年前的分支機構網絡，眾所周知，城市中心在這段時間內發生了變化，我們可能不再在符合需求的地區設有分支機構。因此，在某些情況下，我們會為不再完全適合我們需求的分行提供娛樂優惠，但這不是我們持續業務策略的一部分。

That's helpful. All right. Thank you for taking my questions and congrats again on the strong start to the year.

這很有幫助。好的。感謝您回答我的問題，並再次祝賀今年的強勁開局。

Thank you very much.

非常感謝。

Thanks Eric.

謝謝埃里克。

(Operator Instructions)

（操作員說明）

Seeing no further questions. This concludes today's Farmer Brothers first quarter, fiscal 2025 earnings call. Thank you for attending.

看到沒有進一步的問題。今天 Farmer Brothers 2025 財年第一季財報電話會議到此結束。感謝您的出席。

The host has ended this call. Goodbye.

主持人已結束本次通話。再見。