Farmer Brothers Co. (NASDAQ:FARM) Q1 2019 Earnings Conference Call Transcript

Nov 07, 2018 • 05:00 pm ET

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Farmer Brothers Co. (NASDAQ:FARM) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon, ladies and gentlemen, and welcome to Farmer Bros. First Quarter 2019 Earnings Conference Call. (Operator Instructions). As a reminder, this conference call is being recorded.

I would now like to turn the call over to your host, Kaitlin Kikalo. Please go ahead.

Executive
Kaitlin Kikalo

Thank you. Good afternoon, everyone. Thank you for joining Farmer Bros. First Quarter 2019 Earnings Conference Call. Participating on today's call are Mike Keown, President and CEO; and David Robson, Treasurer and CFO. Earlier today, the company issued a press release, which is available in the IR section of Farmer Bros. website at www.farmerbros.com. The press release is also included as an exhibit to the company's Form 8-K available on the company's website and on the Securities and Exchange Commission's website at www.sec.gov.

A replay of this audio only webcast will be available approximately two hours after the conclusion of this call. A link to the audio replay will also be available on the company's website.

(Forward-Looking Cautionary Statements)

I will now turn the call over to Mike. Mike, Please go ahead.

Executive
Michael H. Keown

Thank you, Kaitlin. Welcome everyone, and thanks for joining us this afternoon. Our team entered the new fiscal year with energy and enthusiasm as we continued to focus on executing our strategy. Moving ahead to complete the integration of the Boyd's business, taking additional steps to enhance our DSD operations and leveraging investments in our roasting facilities by bringing on new customers as well as expanding business with existing customers.

David will review our financial results in detail, but I'd like to highlight a few things. We processed and sold over 25 million pounds of green coffee in the first quarter. This was consistent with our volume from the fourth quarter and up 9.6% from the first quarter of fiscal 2018 with Boyd's contributing approximately 14.5% of our total volume. Sales in the first quarter, including sales from the Boyd's business were $147.4 million, an increase of approximately 12% over the first quarter of fiscal 2018. Adjusted EBITDA for the quarter was $11 million compared to $12.5 million we reported in the prior year period.

You'll recall, we had noted on our last earnings call that we expected first quarter fiscal 2019 adjusted EBITDA would be lower than the prior year period, and we anticipated delivering stronger results in the second half of the year as we ramp up production in our Farmer Bros. facilities, more fully realize synergies from Boyd's and generate cost savings from route optimization in our DSD business, which I'll talk about in a moment. Overall, our start to fiscal 2019 has unfolded largely as we had expected and, in some cases, better-than-expected with adjusted EBITDA ahead of our plan.

I'd like to turn now to a review of our key areas of focus in the first quarter where we continue to make meaningful progress. First, Boyd's. We are just past the one-year mark for closing the acquisition, and I remain incredibly proud of how our team has executed on the