Farmer Brothers Co. (NASDAQ: FARM) reported upbeat earnings for its fourth quarter on Thursday.
The company based out of Northlake, Texas, reported the volume of its green coffee pounds processed and sold increased 0.9%. Gross profit increased $1.2 million and gross margin increased 100 basis points to 40.1%, year-over-year.
What’s more, Farmer said income from operations declined by $1.4 million to $1.7 million due to higher one-time costs and fewer one-time benefits.
Net income slumped to $1.1 million from $84.2 million primarily due to the non-cash income tax benefit of $80.3 million from the release of valuation allowance on deferred tax assets in the fourth quarter of the prior fiscal year. Finally, adjusted EBITDA increased 30.7% to $11.6 million, and Adjusted EBITDA Margin was 8.7%, an increase of 210 basis points.
Farmer CEO Mike Keown was quoted in the news release as saying "Overall, it was a very solid quarter to close a transformational year and one that we believe further positions Farmer Brothers for future success.”
"Our continued progress in gross margin and Adjusted EBITDA improvement shows the ongoing benefits of our restructure. During the fourth quarter, we extended contracts with key customers covering approximately 20 million pounds of green coffee and won approximately two million pounds of new business, which is currently expected to begin shipping in the second quarter of fiscal 2018.
“We believe this demonstrates the industry's support for our talented organization and new capabilities."
Farmer shares hiked $2.35, or 7.7%, toward the close of trading Friday to $32.95.
