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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2004 OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO __________
Commission file number: 0-1375
FARMER BROS. CO.
(exact name of registrant as specified in its charter)
Delaware 95-0725980
(State of Incorporation) (I.R.S. Employer Identification No.)
20333 South Normandie Avenue, Torrance, California 90502
(address of principal executive offices) (Zip Code)
(310)787-5200
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). YES [X] NO [ ]
On January 31, 2005 Registrant had 16,075,080 shares outstanding of its
common stock, par value $1.00 per share, which is the Registrant's only class
of common stock.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Dollars in thousands, except share and per share
data)
FARMER BROS. CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the three months For the six months
ended December 31, ended December 31,
2004 2003 2004 2003
Net sales $51,220 $51,511 $97,928 $97,176
Cost of goods sold 20,922 18,938 38,391 34,971
Gross profit 30,298 32,573 59,537 62,205
Selling expense 22,722 22,967 44,549 45,284
General and administrative expense 6,877 6,482 13,287 12,740
Operating expenses 29,599 29,449 57,836 58,024
Income from operations 699 3,124 1,701 4,181
Other income and expense:
Dividend income 865 881 1,734 1,683
Interest income 585 570 1,061 1,221
Other, net (8,307) (403) (8,222) 1,169
(6,857) 1,048 (5,427) 4,073
(Loss) income before taxes (6,158) 4,172 (3,726) 8,254
Income taxes (2,090) 1,607 (1,155) 3,178
Net (loss) income ($4,068) $2,565 ($2,571) $5,076
Net (loss) income per common share ($0.30) $0.15 ($0.18) $0.29
Weighted average
shares outstanding 13,615,530 17,512,660 13,588,170 17,670,970
Dividends declared per share $0.10 $0.095 $0.20 $0.19
The accompanying notes are an integral part of these financial statements.
FARMER BROS. CO.
CONSOLIDATED BALANCE SHEETS
December 31, June 30,
2004 2004
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $27,596 $21,807
Short term investments 168,185 176,903
Accounts and notes receivable, net 15,744 14,565
Inventories 32,671 35,579
Income tax receivable 3,525 408
Deferred income taxes 775 775
Prepaid expenses 3,369 2,683
Total current assets $251,865 $252,720
Property, plant and equipment, net $41,828 $42,300
Notes receivable 143 143
Other assets 21,408 21,609
Deferred income taxes 1,099 1,099
Total assets $316,343 $317,871
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $11,700 $9,589
Accrued payroll expenses 4,775 6,999
Other 4,466 4,601
Total current liabilities $20,941 $21,189
Accrued post-retirement benefits $28,057 $26,984
Total liabilities $48,998 $48,173
Commitments and contingencies
Stockholders' equity:
Common stock, $1.00 par value,
authorized 20,000,000 shares; $16,075 $16,075
16,075,080 shares issued and outstanding
Additional paid-in capital 32,381 32,248
Retained earnings 278,390 283,654
Unearned ESOP shares (58,764) (61,542)
Less accumulated comprehensive loss (737) (737)
Total stockholders' equity $267,345 $269,698
Total liabilities and
stockholders' equity $316,343 $317,871
The accompanying notes are an integral part of these financial statements.
FARMER BROS. CO.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the six months
ended December 31,
2004 2003
Cash flows from operating activities:
Net (loss) income ($2,571) $5,076
Adjustments to reconcile net (loss) income to
net cash provided by operating activities:
Depreciation 4,043 3,508
Loss on sales of assets (20) (45)
ESOP compensation expense 2,911 2,343
Net (loss) gain on investments (8,521) 1,323
Change in assets and liabilities:
Short term investments 17,239 (994)
Accounts and notes receivable (1,201) (78)
Inventories 2,908 588
Income tax receivable (3,117) 332
Prepaid expenses and other assets (485) (36)
Accounts payable 2,111 611
Accrued payroll expenses and other (2,359) (1,696)
Accrued post-retirement benefits 1,073 1,167
Total adjustments 14,582 7,023
Net cash provided by
operating activities $12,011 $12,099
Cash flows from investing activities:
Purchases of property, plant and equipment (3,606) (3,760)
Proceeds from sales of property, plant
and equipment 55 52
Notes repaid 22 19
Net cash used in investing activities (3,529) (3,689)
Cash flows from financing activities:
Dividends paid (2,693) (3,088)
ESOP contributions - (1,177)
Proceeds from sale of short-term investments - 111,161
Purchase of capital stock - (111,161)
Cash used in financing activities (2,693) (4,265)
Net increase in cash and
cash equivalents 5,789 4,145
Cash and cash equivalents at beginning of period 21,807 19,961
Cash and cash equivalents at end of period $27,596 $24,106
Supplemental disclosure of cash flow information:
Income tax payments $1,655 $2,250
The accompanying notes are an integral part of these financial statements.
Notes to Consolidated Financial Statements (Unaudited)
Note 1. Unaudited Consolidated Financial Statements
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete consolidated financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation of the interim financial data have
been included. Operating results for the three and six month periods ended
December 31, 2004 are not necessarily indicative of the results that may be
expected for the fiscal year ending June 30, 2005.
The consolidated balance sheet at June 30, 2004 has been derived from the
audited consolidated financial statements at that date but does not include all
of the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Farmer Bros. Co. annual report on Form 10-K
for the fiscal year ended June 30, 2004.
Share and per share amounts included in the accompanying consolidated financial
statements and in the notes to the consolidated financial statements have been
retroactively adjusted for all periods presented to reflect a ten-for-one stock
split in May 2004.
Note 2. Investments
Investments are as follows (in thousands):
December 31, June 30,
2004 2004
Trading securities at fair value
U.S. Treasury obligations $114,380 $119,528
Preferred stock 57,297 56,037
Futures, options and other
derivative investments (3,491) 1,338
$168,186 $176,903
Note 3. Inventories
(in thousands)
December 31, 2004
Processed Unprocessed Total
Coffee $ 2,294 $11,473 $13,767
Allied products 10,221 3,144 13,365
Coffee brewing equipment 1,802 3,737 5,539
$14,317 $18,354 $32,671
June 30, 2004
Processed Unprocessed Total
Coffee $ 3,034 $10,736 $13,770
Allied products 11,800 3,665 15,465
Coffee brewing equipment 2,341 4,003 6,344
$17,175 $18,404 $35,579
Interim LIFO Calculations
An actual valuation of inventory under the LIFO method is made only
at the end of each year based on the inventory levels and costs at that
time. Accordingly, interim LIFO calculations must necessarily be based
on management's estimates of expected year-end inventory levels and costs.
Because these are subject to many forces beyond management's control,
interim results are subject to the final year-end LIFO inventory valuation.
Note 4. Pension Plans
The Company has a contributory defined benefit pension plan for all employees
not covered under a collective bargaining agreement and a non-contributory
defined benefit plan for certain hourly employees covered under a collective
bargaining agreement. The net periodic pension costs for the defined benefit
plans were as follows:
Components of Net Periodic Benefit Cost
(in thousands)
Three months ended December 31
2004 2003
Service cost $529 $594
Interest cost 1,071 988
Expected return on plan assets (1,559) (1,362)
Amortization of transition obligation (asset) 0 0
Amortization of prior service cost 46 62
Amortization of net (gain) loss 18 336
Net periodic benefit cost $105 $2,621
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Liquidity and Capital Resources
There have been no material changes in the Company's liquidity or capital
resources since the fiscal year ended June 30, 2004. The Company continues to
maintain a strong working capital position.
(in thousands) December 31, June 30,
2004 2004
Current assets $251,865 $252,720
Current liabilities $ 20,941 $ 21,189
Working capital $230,924 $231,531
Total assets $316,343 $317,871
All present and future liquidity needs are expected to be met by internal
sources. The Company does not expect it will need to rely on banks or other
third parties for its working capital and other liquidity needs. There have
been no changes in the needs or commitments described in the Company's annual
report on Form 10-K.
Results of Operations
The operating trends discussed in the Form 10-K for fiscal 2004 have continued
into the first half of fiscal 2005. Net sales were virtually flat for the
quarter and six months ended December 31, 2004 compared with prior periods.
Net sales for the three months ended December 31, 2004 reached $51,220,000,
compared with $51,511,000 in the same quarter of fiscal 2004. Net sales for the
first half of fiscal 2005 reached $97,928,000, compared with $97,176,000 in the
first half of fiscal 2004.
Gross profit decreased 7% to $30,298,000 in the fiscal quarter ended December
31, 2004 as compared to $32,573,000 in the same quarter of fiscal 2004. Gross
profit for the six months ended December 31, 2004 decreased 4% to $59,537,000
as compared to $62,205,000 during the first half of fiscal 2004. This
decrease primarily reflected the near-term direct effect of a volatile,
sustained increase in green coffee prices during the most recent fiscal
quarter. Although the Company expects to be able to pass on this cost
increase over time by charging higher prices for its roast coffee products,
such price increases lag increases in the cost of green coffee. Although many
of the Company's competitors have also adjusted their pricing to reflect higher
green coffee costs, there is no way to predict when or if the Company will
return to its previous profit margins.
Operating expenses, consisting of selling and general and administrative
expenses, increased 1% in the second quarter of fiscal 2005 to $29,599,000 as
compared to $29,449,000 in the same quarter of fiscal 2004. Fiscal year-to-
date operating expenses were $57,836,000 for fiscal 2005 as compared to
$58,024,000 in fiscal 2004. This small change in operating expenses was the
result of several differences (in thousands):
Six month period ended
December 31,
2004 2003
Legal $ 432 $1,270
IT software depreciation 1,451 658
IT consulting 1,494 1,914
ESOP 3,326 2,631
Employee benefits 1,931 2,851
$8,634 $9,324
IT consulting costs are expected to continue to decrease through the balance of
fiscal 2005. We expect to incur minimal additional IT consulting as we refine
our manufacturing system. Most continuing consulting costs are associated with
the new sales system, and will be capitalized for the balance of fiscal 2005.
We expect the new sales system to go live in the early summer.
The increased ESOP expense reflects the increased number of shares acquired by
the ESOP last year. The employee benefits decrease primarily resulted from
actuarially derived pension and retiree medical costs.
In addition, we expect to incur additional consulting costs associated with
Sarbannes-Oxley 404 implementation during the remainder of fiscal 2005. None
of these costs are yet reflected in 2005 operating expenses, but we anticipate
that we will incur at least $650,000 in such costs during the remainder of
fiscal 2005. Total consulting costs associated with this project, divided
between fiscal 2004 and 2005, may exceed $1,000,000.
As a result of the smaller gross profit and flat operating expenses, second
quarter 2005 income from operations decreased to $699,000 as compared to
$3,124,000 in the same quarter of fiscal 2004. Similarly, income from
operations for fiscal year-to-date 2005 decreased to $1,701,000 as compared to
$4,181,000 in the same period of fiscal 2004.
Other income (expense) in the second quarter of fiscal 2005 was $6,857,000 as
compared to $1,048,000 in the same quarter of fiscal 2004, primarily as a
result of higher green coffee prices during the second quarter of fiscal 2005.
Other income (expense) for the first half of fiscal 2005 was a loss of
($5,427,000) as compared to income of $4,073,000 in fiscal 2004.
Other, net (expense) in the second quarter of fiscal 2005 was ($8,307,000), as
compared to Other, net (expense) of ($403,000) in the same quarter of fiscal
2004. Higher green coffee prices during the second quarter of fiscal 2005
resulted in a decrease in the value of green coffee futures and options used by
the Company to hedge against a decline in commodity prices. Other, net
(expense) during the second quarter of fiscal 2005 consisted of net realized
and unrealized coffee trading losses of ($8,821,000), offset by net gains of
$514,000 on other investments.
For the first six months of fiscal 2005, Other, net (expense) was ($8,222,000),
as compared to Other, net income of $1,169,000 for the same period of fiscal
2004. Higher green coffee prices during the second quarter of fiscal 2005
resulted in a decrease in the value of green coffee futures and options used by
the Company to hedge against a decline in commodity prices. Other, net
(expense) during the first six months of fiscal 2005 consisted of net realized
and unrealized coffee trading losses of ($9,663,000), offset by net gains on
other investments. The net realized and unrealized losses during the three and
six month periods ended December 31, 2004 consisted of the following (in
thousands):
Three month period Six month period
ended ended
December 31, 2004 December 31, 2004
Realized coffee gains $1,340 $2,063
Realized coffee losses (7,665) (7,687)
Unrealized coffee losses (2,496) (4,039)
Totals ($8,821) ($9,663)
As the result of the above mentioned factors, net loss for the second quarter
of fiscal 2005 was ($4,068,000) or ($0.30) per share, as compared to net income
of $2,565,000 or $0.15 per share, for the same quarter of fiscal 2004. Net
loss for the first half of fiscal 2005 was ($2,571,000) or ($0.18) per share,
as compared to net income of $5,076,000 or $0.29 per share in the first half of
fiscal 2004.
Quarterly Summary of Results (in thousands, except per share data):
Quarter ended 12/31/03 3/31/04 6/30/04 9/30/04 12/31/04
Net sales $51,511 $49,069 $47,344 $46,708 $51,220
Gross profit $32,573 $30,581 $29,398 $29,253 $30,298
Income (loss) from operations $3,124 $743 ($1,161) $1,002 $699
Net income (loss) $2,565 $5,603 $2,008 $1,497 ($4,068)
Net income (loss)
per common share $0.15 $0.42 $0.11 $0.11 ($0.30)
Forward-Looking Statements
Certain statements contained in this quarterly report on Form 10-Q regarding
the risks, circumstances and financial trends that may affect our future
operating results, financial position and cash flows are not based on
historical fact and are forward-looking statements within the meaning of
federal securities laws and regulations. These statements are based on
management's current expectations, assumptions, estimates and observations of
future events and include any statements that do not directly relate to any
historical or current fact. These forward-looking statements can be
identified by the use of words like "anticipates," "feels," "estimates,"
"projects," "expects," "plans," "believes," "intends," "will," "assumes" and
other words of similar meaning. Owing to the uncertainties inherent in
forward-looking statements, actual results could differ materially from those
set forth in forward-looking statements. We intend these forward-looking
statements to speak only at the time of this report and do not undertake to
update or revise these statements as more information becomes available except
as required under federal securities laws and the rules and regulations of the
SEC. Factors that could cause actual results to differ materially from those
in forward-looking statements include, but are not limited to, fluctuations in
availability and cost of green coffee, competition, organizational changes, the
impact of a weaker economy, business conditions in the coffee industry and food
industry in general, the Company's continued success in attracting new
customers, variances from budgeted sales mix and growth rates, and weather and
special or unusual events, as well as other risks described in this report and
other factors described from time to time in the Company's filings with the
SEC.
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
Financial Markets
We are exposed to market value risk arising from changes in interest rates on
our securities portfolio. Our portfolio of investment grade money market
instruments includes discount commercial paper, medium term notes, federal
agency issues and U.S. Treasury securities. As of December 31, 2004 over 52%
of these funds were invested in instruments with maturities shorter than 90
days. This portfolio's interest rate risk is not hedged and its average
maturity is approximately 93 days. A 100 basis point increase in the general
level of interest rates would result in a change in the market value of the
portfolio of approximately $1,150,000.
Our portfolio of preferred securities includes investments in derivatives that
provide a natural economic hedge of interest rate risk. We review the
interest rate sensitivity of these securities and (a) enter into "short
positions" in futures contracts on U.S. Treasury securities or (b) hold put
options on such futures contracts in order to reduce the impact of certain
interest rate changes on such preferred stocks. Specifically, we attempt to
manage the risk arising from changes in the general level of interest rates.
We do not transact in futures contracts or put options for speculative
purposes.
The following table demonstrates the impact of varying interest rate changes
based on the preferred stock holdings, futures and options positions, and
market yield and price relationships at December 31, 2004. This table is
predicated on an instantaneous change in the general level of interest rates
and assumes predictable relationships between the prices of preferred
securities holdings, the yields on U.S. Treasury securities and related
futures and options.
Interest Rate Changes
(In thousands)
Market Value at December 31, 2004 Change in Market
Preferred Futures & Total Value of Total
Stock Options Portfolio Portfolio
- -150 basis points
("b.p.") $63,036 $0 $63,036 $5,114
- -100 b.p. 61,665 2 61,667 3,745
Unchanged 57,280 642 57,921 0
+100 b.p. 52,174 4,699 56,874 (1,048)
+150 b.p. 49,625 7,344 56,968 ( 953)
The number and type of futures and options contracts entered into depends on,
among other items, the specific maturity and issuer redemption provisions for
each preferred stock held, the slope of the Treasury yield curve, the expected
volatility of Treasury yields, and the costs of using futures and/or options.
Commodity Price Changes
We are exposed to commodity price risk arising from changes in the market
price of green coffee. We price our inventory on the LIFO basis. In the normal
course of business, we hold a large green coffee inventory and enter into
forward commodity purchase agreements with suppliers. We are subject to price
risk resulting from the volatility of green coffee prices. Volatile price
increases cannot, because of competition and market conditions, always be
passed on to our customers. The Company holds a mix of futures contracts and
options to help hedge against volatile green coffee price decreases. Gains and
losses on these derivative instruments are realized immediately in Other, net.
The following table demonstrates the impact of changes in the price of green
coffee on inventory and green coffee futures and options at December 31, 2004.
It assumes an immediate change in the price of green coffee, and the valuations
of coffee index futures and options and relevant forward commodity purchase
agreements at December 31, 2004 (in thousands):
Market Value of
Coffee Price Coffee Futures Change in Market Value
Change Inventory & Options Totals Derivatives Inventory
-20% $11,013 $1,637 $12,650 $5,770 ($2,753)
unchanged 13,767 (4,133) 9,634
20% 16,520 (8,785) 7,735 (4,652) 2,753
At December 31, 2004 the derivatives consisted mainly of exchange traded
commodity futures and options with maturities shorter than four months.
Item 4 Controls & Procedures
As of the end of the period covered by this report, the Chief Executive Officer
and Chief Financial Officer evaluated the Company's disclosure controls and
procedures pursuant to Exchange Act Rule 13a-14 and 15d-14. They have
concluded that the Company's disclosure controls and procedures are effective
in ensuring that all material information required to be filed in this
quarterly report has been made known to them in a timely fashion. In addition,
there have been no significant changes in the Company's internal controls or in
other factors that could significantly affect the Company's internal control
over financial reporting.
PART II OTHER INFORMATION
Item 4. Submission of matters to a vote of security holders.
(a) The Company held its Annual Meeting of Stockholders on December 14, 2004.
(b) Omitted pursuant to Instruction 3 to Item 4 of Form 10-Q.
(c) The two items voted upon at the meeting were (i) to elect three directors
to a three-year term of office expiring at the 2007 Annual Meeting of
Stockholders ("Item 1"); and (ii) to ratify the selection of Ernst & Young LLP
as independent auditors of the Company for the fiscal year ending June 30,
2005 ("Item 2").
The results of voting at the Annual Meeting of Stockholders follows:
Item 1 - Election of Directors
FOR WITHHOLD
Lewis A. Coffman 12,273,023 2,734,070
John Samore, Jr. 12,671,935 2,335,158
Kenneth R. Carson 12,251,756 2,755,337
Item 2 - Ratification of Selection of Ernst & Young LLP as Independent Auditors
for the fiscal year ending June 30, 2005
FOR AGAINST ABSTAIN TOTAL
14,874,710 85,044 47,339 15,007,093
All nominees to the Board of Directors were declared to have been elected as
directors to hold office until the 2007 Annual Meeting of Stockholders. Item
2 was declared to have been approved.
(d) Not applicable.
Item 6. Exhibits and reports on Form 8-K.
(a) Exhibits. See Exhibit Index.
(b) Reports on Form 8-K.
A Form 8-K dated August 3, 2004 and filed with the Commission on August 4,
2004, to announce the retirement of Kenneth R. Carson, Vice President of
Sales, and the appointment of Michael J. King as his replacement.
A Form 8-K dated August 17, 2004 and filed with the Commission on August 18,
2004, to announce the appointment of Kenneth R. Carson, retired Vice President
of Sales, to the Board of Directors.
A Form 8-K dated and filed with the Commission on November 10, 2004, announcing
first quarter 2005 earnings and noting a change in the date of the Annual
Meeting of Stockholders.
A Form 8-K dated December 14, 2004 and filed with the Commission on December
15, 2004 presenting the script of an address to the Company's Annual Meeting of
Stockholders by its Chief Financial Officer.
A Form 8-K dated December 16, 2004 and filed with the Commission on December
17, 2004 announcing a dividend and presenting the certified results of proxy
voting in connection with the December 14, 2004 Annual Meeting of Stockholders.
A Form 8-K dated January 9, 2005 and filed with the Commission on January 10,
2005 announcing the appointment of Guenter W. Berger as Interim Chief Executive
Officer after the sudden death of Chairman and CEO Roy E. Farmer.
A Form 8-K dated and filed with the Commission on January 14, 2005, announcing
the appointment of Carol Farmer Waite to the Company's Board of Directors,
filling a seat vacated by the death of her brother Roy E. Farmer on January 7,
2005.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
FARMER BROS. CO.
/s/ Guenter W. Berger
Guenter W. Berger, Vice President, Interim Chief Executive Officer and
Director(principal executive officer)
Date: February 8, 2005
/s/ John E. Simmons
John E. Simmons, Treasurer and Chief Financial Officer
(principal financial and accounting officer)
Date: February 8, 2005
EXHIBIT INDEX
3.1 Certificate of Incorporation (filed as an exhibit to the Form 10-Q for
the quarter ended March 31, 2004 and incorporated herein by reference).
3.2 By-laws (filed as an exhibit to the Form 10-Q for the quarter ended March
31, 2004 and incorporated herein by reference).
10.1 The Farmer Bros. Co. Pension Plan for Salaried Employees (filed as an
exhibit to the Form 10-K for the year ended June 30, 2002 and incorporated
herein by reference).
10.2 The Farmer Bros. Co. Incentive Compensation Plan (filed as an exhibit to
the Form 10-K for the year ended June 30, 2002 and incorporated herein by
reference).
10.3 The Farmer Bros. Co. Employee Stock Ownership Plan (filed as an exhibit
to
the Form 10-K for the year ended June 30, 2002 and incorporated herein by
reference).
10.4 Farmer Bros. Co. Employee Stock Ownership Plan Amendment 2 (filed as an
exhibit to the Form 10-Q for the quarter ended December 31, 2003 and
incorporated herein by reference).
10.5 Farmer Bros. Co. Employee Stock Ownership Plan Amendment 3 (filed as an
exhibit to the Form 10-Q for the quarter ended December 31, 2003 and
incorporated herein by reference).
10.6 Loan Agreement dated July 21, 2003 between the Company and Wells Fargo
Bank, Trustee of the Farmer Bros Co. Employee Stock Ownership Plan (filed as an
exhibit to the Form 10-Q for the quarter ended December 31, 2003 and
incorporated herein by reference).
31.1 Principal Executive Officer Certification Pursuant to Securities Exchange
Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.(filed herewith)
31.2 Principal Financial Officer Certification Pursuant to Securities Exchange
Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.(filed herewith)
32.1 Principal Executive Officer Certification Pursuant to 18 U.S.C. Section
1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(furnished herewith)
32.2 Principal Financial Officer Certification Pursuant to 18 U.S.C. Section
1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(furnished herewith)
Exhibit 31.2
Certification Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
I, John E. Simmons, Treasurer and Chief Financial Officer of Farmer Bros. Co.
("Registrant"), certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Registrant;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered
by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the Registrant as of, and for, the periods presented in this report;
4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant
and have:
(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating
to the Registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this report is being
prepared;
(c) Evaluated the effectiveness of the Registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d) Disclosed in this report any change in the Registrant's
internal control over financial reporting that occurred
during the Registrant's most recent fiscal quarter (the
Registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely
to materially affect, the Registrant's internal control over
financial reporting; and
5. The Registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the Registrant's auditors and the audit committee of the
Registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the
Registrant's ability to record, process, summarize and report
financial information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
Registrant's internal control over financial reporting.
Date: February 8, 2005
/s/ John E. Simmons
John E. Simmons
Treasurer and Chief Financial Officer
(principal financial and accounting officer)
Exhibit 31.1
Certification Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
I, Guenter W. Berger, Interim Chief Executive Officer of Farmer Bros. Co.
("Registrant"), certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Registrant;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered
by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the Registrant as of, and for, the periods presented in this report;
4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant
and have:
(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under
our supervision, to ensure that material information relating
to the Registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this report is being
prepared;
(c) Evaluated the effectiveness of the Registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d) Disclosed in this report any change in the Registrant's
internal control over financial reporting that occurred
during the Registrant's most recent fiscal quarter (the
Registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely
to materially affect, the Registrant's internal control over
financial reporting; and
5. The Registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the Registrant's auditors and the audit committee of the
Registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the
Registrant's ability to record, process, summarize and report
financial information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
Registrant's internal control over financial reporting.
Date: February 8, 2005
/s/ Guenter w. Berger
Guenter W. Berger
Interim Chief Executive Officer
(principal executive officer)
Exhibit 32.1 CERTIFICATION of Chief Executive Officer Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 In connection with the quarterly report of Farmer Bros. Co. (the "Company") on Form 10-Q for the fiscal period ended December 31, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Guenter W. Berger, Interim Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company. Dated: February 8, 2005 /s/ Guenter W. Berger Guenter W. Berger Interim Chief Executive Officer (principal executive officer)
Exhibit 32.2 CERTIFICATION of Chief Financial Officer Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 In connection with the quarterly report of Farmer Bros. Co. (the "Company") on Form 10-Q for the fiscal period ended December 31, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John E. Simmons, Treasurer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company. Dated: February 8, 2005 /s/ John E. Simmons John E. Simmons Treasurer and Chief Financial Officer (principal financial and accounting officer