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Press Release: Farmer Bros. Co. Reports Second -4-

· 02/04/2021 16:00
Set forth below is a reconciliation of reported net loss to EBITDA (unaudited): Three Months Ended December Six Months Ended December 31, 31, ---------------------------- --------------------------- (In thousands) 2020 2019 2020 2019 -------------- ------------ ------------- ------------ Net (loss) income, as reported $(17,725) $ 7,754 $(23,997) $12,408 Income tax (benefit) expense 13,703 (81) 13,845 (188) Interest expense (1) 2,002 1,585 3,994 2,861 Depreciation and amortization expense 7,308 7,594 14,349 15,211 -------- ---- ------- --- -------- --- ------- --- EBITDA $ 5,288 $16,852 $ 8,191 $30,292 ======= ==== ====== === ======= === ====== === EBITDA Margin 5.1% 11.1% 4.1% 10.4% ____________ (1) Excludes interest expense related to pension plans and postretirement benefits. Set forth below is a reconciliation of reported net loss to Adjusted EBITDA (unaudited): Three Months Ended December Six Months Ended December 31, 31, ------------------------------ --------------------------- (In thousands) 2020 2019 2020 2019 -------------- -------------- ------------- ------------ Net (loss) income, as reported $(17,725) $ 7,754 $(23,997) $12,408 Income tax (benefit) expense 13,703 (81) 13,845 (188) Interest expense(1) 2,002 1,585 3,994 2,861 Depreciation and amortization expense 7,308 7,594 14,349 15,211 ESOP and share-based compensation expense 794 909 1,950 1,778 Strategic initiatives (2) 1,333 -- 1,675 -- Net losses (gains) from sales of other assets (1,168) (11,057) (549) (23,662) Impairment of fixed assets 1,243 -- 1,243 -- Non-recurring costs associated with the COVID-19 pandemic 149 -- 260 -- Proxy contest-related expenses -- 259 -- 259 Severance 635 485 1,197 2,797 -------- ---- --------- --- -------- --- ------- --- Adjusted EBITDA(3) $ 8,274 $ 7,448 $ 13,967 $11,464 ======= ==== ===== === ======= === ====== === Adjusted EBITDA Margin 7.9% 4.9% 6.9% 3.9% ____________ (1) Excludes interest expense related to pension plans and postretirement benefits. (2) Includes initiatives related to the Houston facility exit and opening of the Rialto distribution center. (3) Adjusted EBITDA for the three and six months ended December 31, 2020 includes $7.2 million and $14.4 million, respectively, of higher amortized gains resulting from the curtailment of the postretirement medical plan in March 2020. These higher gains will continue until the plan sunset on January 1, 2021. See Note 10, Employee Benefit Plans, of the Notes to Unaudited Condensed Consolidated Financial Statements included in our quarterly ended December 31, 2020, on Form 10-Q for details. -------------------------------------------------------------------------------- income taxes; -- interest expense (benefit); -- (loss) income from short-term investments; -- depreciation and amortization expense; -- ESOP and share-based compensation expense; -- non-cash impairment losses; -- non-cash pension withdrawal expense; -- restructuring and other transition expenses; -- severance costs; -- proxy contest-related expenses; -- non-recurring costs associated with the COVID-19 pandemic; -- net gains and losses from sales of assets; -- non-cash pension settlements and postretirement benefits curtailment; and -- acquisition, integration and strategic costs.-- income taxes; -- interest expense; and -- depreciation and amortization expense.common stock $ 185 $ 109 Cumulative preferred dividends, undeclared and unpaid $ 284 $ 275

Non-GAAP Financial Measures

In addition to net (loss) income determined in accordance with U.S. generally accepted accounting principles ("GAAP"), we use the following non-GAAP financial measures in assessing our operating performance:

"EBITDA" is defined as net (loss) income excluding the impact of:

"EBITDA Margin" is defined as EBITDA expressed as a percentage of net sales.

"Adjusted EBITDA" is defined as net (loss) income excluding the impact of:

"Adjusted EBITDA Margin" is defined as Adjusted EBITDA expressed as a percentage of net sales.

For purposes of calculating EBITDA and EBITDA Margin and Adjusted EBITDA and Adjusted EBITDA Margin, we have excluded the impact of interest expense resulting from the adoption of ASU 2017-07, non-cash pretax pension and postretirement benefits resulting from the amendment and termination of certain Farmer Bros. pension and postretirement benefits plans and severance because these items are not reflective of our ongoing operating results.

We believe these non-GAAP financial measures provide a useful measure of the Company's operating results, a meaningful comparison with historical results and with the results of other companies, and insight into the Company's ongoing operating performance. Further, management utilizes these measures, in addition to GAAP measures, when evaluating and comparing the Company's operating performance against internal financial forecasts and budgets.

We believe that EBITDA facilitates operating performance comparisons from period to period by isolating the effects of certain items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense). We also present EBITDA and EBITDA Margin because (i) we believe that these measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in our industry, (ii) we believe that investors will find these measures useful in assessing our ability to service or incur indebtedness, and (iii) we use these measures internally as benchmarks to compare our performance to that of our competitors.

EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin, as defined by us, may not be comparable to similarly titled measures reported by other companies. We do not intend for non-GAAP financial measures to be considered in isolation or as a substitute for other measures prepared in accordance with GAAP.

Investor Relations Contact

Ellipsis

Jeff Majtyka & Kyle King

Investor.relations@farmerbros.com

(646) 776-0886

(END) Dow Jones Newswires

February 04, 2021 16:00 ET (21:00 GMT)