The following is a summary of the Farmer Bros. Co. (FARM) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Farmer Bros. Co. reported Q3 2024 sales of $85.4 million, relatively flat year-over-year.

• The gross margin increased significantly from 33.5% in Q3 2023 to 40.1% in Q3 2024.

• A slight reduction in operating expenses from $35.6 million to $34.7 million was seen.

• Net income improved significantly by $6.2 million, reducing the loss to $682,000 in Q3 2024 from $6.9 million in Q3 2023.

• Capital expenditure for the period remained unchanged at $3.4 million.

• As of March 31, 2024, the company had $5.5 million unrestricted cash and $200,000 in restricted cash, with $30.5 million available under their credit facility.

Business Progress:

• Farmer Bros. Co. has shown progress in transitioning to a direct-store delivery-based organization.

• New corporate headquarters have been set up in Fort Worth, Texas and production has been consolidated at its Portland facility.

• Improvements have been achieved in their brand pyramid and SKU rationalization initiatives.

• Inventories corresponding to the new tiered offerings are now greater than old SKU inventories, aiming to complete the SKU initiative by Q1 2025.

• Technology upgrades such as new handheld devices for sales representatives have improved inventory management and customer service.

• The customer decline rate has improved and customer accounts have stabilized.

• Balance sheet is projected to be free cash flow positive in early fiscal 2025, indicating continued efforts for profitable growth.

• Significant technological upgrades have been implemented including risk mitigation software, upgrades to ERP system, and customer relationship management system referred to as Project Symphony.

More details: Farmer Bros IR

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