Farmer Bros. Co. forms committee to explore strategic alternatives

FORT WORTH, Texas - Farmer Bros. Co. (NASDAQ:FARM), a coffee roaster and distributor with annual revenue of $341.54M, announced Monday it has initiated a process to evaluate strategic alternatives aimed at maximizing shareholder value. The announcement comes as the company’s stock trades near its 52-week low, having declined over 50% in the past year.

The company’s board has formed a strategy committee consisting of independent directors to evaluate potential options and make recommendations. Farmer Bros. has engaged North Point Mergers and Acquisitions, Inc. as its financial advisor and Winston & Strawn LLP as legal counsel to support the review process.

"Since the 2023 sale of our direct ship business, we have been focused on improving our financial and operational structure and are pleased with the progress we have made. We believe now is the right time to explore additional options that could allow us to more effectively maximize shareholder value," said David Pace, Chairman of the Board.

The company has not established a timetable for the review process and noted there is no assurance that the strategic review will result in any transaction or other outcome. Farmer Bros. stated it does not intend to provide further updates until it determines such disclosure is appropriate or necessary.

Founded in 1912, Farmer Brothers supplies coffee, tea and culinary products to customers ranging from small independent restaurants to large institutional buyers including restaurant chains, hotels, healthcare facilities and grocery chains. With a current market capitalization of $29.32M, the company appears slightly undervalued according to InvestingPro’s Fair Value analysis. Discover comprehensive insights about FARM and 1,400+ other stocks through InvestingPro’s detailed research reports.

The announcement comes after what the company described as two years of significant progress in transforming operations and improving business performance following the 2023 sale of its direct ship business.

This information is based on a press release statement issued by the company.

In other recent news, Farmer Brothers Co. reported its third-quarter fiscal year 2025 earnings, revealing a challenging period with both earnings and revenue falling short of analyst expectations. The company posted an earnings per share (EPS) of -$0.23, missing the forecast of -$0.13, and reported revenue of $82.05 million, which was below the anticipated $89.64 million. Despite the earnings miss, Farmer Brothers achieved a gross margin improvement to 42.1%, up from 40.1% in the previous year, and saw a $1.5 million increase in adjusted EBITDA year-over-year. The company remains optimistic about maintaining a gross margin above 40% and continues to focus on operational efficiencies and growth opportunities. Additionally, Farmer Brothers has undergone organizational changes, including the departure of its Chief Operations Officer, to better position itself for future challenges. The company is also emphasizing customer base growth and route density as part of its strategic focus. Analysts from firms such as Craig Hallum Capital Group and ROTH Capital have engaged with the company to discuss its strategies for maintaining gross margins and expanding revenue from allied products.

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