Farmer Brothers Company · NASDAQ:FARM
Farmer Brothers — Roth Conference 2017
22 slides from Farmer Brothers's conference presentation, Mar 13, 2017
Slide 1: Farmer Brothers Investor Presentation
Farmer Brothers INVESTOR PRESENTATION Roth Conference March 13, 2017
Slide 2: Forward-looking statements
Certain statements contained in this presentation are not based on historical fact and are forward-looking statements within the meaning of federal secures laws and regulations. These statements are peso on management's current expectations, assumptions, estimates and observations of lyr any histori
Slide 3: Corporate Overview
CORPORATE OVERVIEW = National and distri of foodservice products with over 100 years in the business FY16 Net Sales - $544M = Founded in 1912 fact holesal i i private Differentiated business model = One the coffee industry . ors val lurniiendiapecial m Coffee (Roast & Ground) i i i ment, roasting, a
Slide 4: Consumption & Occasion
CONSUMPTION & OCCASION Traditional 2y, % Consuming Any Coffee 3 Cotter - Not a Gourmet, Sy ‘5600 80D. 36 With Breakfast 3 Gourmet penetration has surpassed traditional coffee Coffesie no lencerlietasmomirercrinkt among Millennials “SPECIALTY” IZATION = COLD BREW Specialty coffee consumption surpasse
Slide 5: Beneficial Coffee Cherry Processing Protocol
Beneficial Cred Processing Protocol Reuse & Upcycle Farmers use the coffee cherry skins to boost Coffee houses are bedining to ppiancatica cacao Off the I promotit ing Media Blitz on i y This is new-age transparency (recaioonanac ioral (Webmd, Mayo Clinic) that furthers authenticity and /odwill io F
Slide 6: Artisan Collection Panache Coffee
ARTISAN COLLECTION PANACHE COFFEE “MOMENT Be SHINAN IST. RAD ONA ve : Qiaas ‘ges
Slide 7: Private Brand Program Development
PRIVATE BRAND PROGRAM DEVELOPMENT OUR MODEL WHY WE'RE DIFFERENT THE BENEFIT SPECIALTY COFFEE QUALI T SCALE Cp scores / buying philosophy > REPEAT PURCHASE Extensive coffee innovation expertise —_—cf CONSISTENCY 40 years of wholesaling => CONFIDENCE A TRUST Exacting quality standard fear Journeyman”
Slide 8: Nationwide Distribution Network
NATIONWIDE DISTRIBUTION NETWORK* 4 distribution centers and 107 branch warehouses Peis Manufacturing Facility EQ Distribution Center @ Branch Location Under Construction *Map excludes manufacturing fé
Slide 9: Sustainability is a key component to winning new business
d are a key component to winning new business First roaster in the Northwest to be LEED® Silver Certified 400% renewable energy is part of our ongoing carbon footprint reduction strategy at our roasting facilities 14% reduction in our electric use, 28,000 MT (or 6.8%) reduction in our carbon footpri
Slide 10: Experienced Senior Management Team
EXPERIENCED SENIOR MANAGEMENT TEAM Name Title Prior Experience Mike Keown President and Chief Executive Officer Wiese PeG David Robson Treasurer and Chief Financial Officer PIRCH*s UGeuromars Tom Mattei General Counsel and Assistant Secretary weintraubltobin LATHAMSWATKINS Ellen lobst Chief Operatio
Slide 11: Industry Association Leadership
INDUSTRY ASSOCIATION LEADERSHIP World Coffee Research = Mike Keown appointed Vice Chairman of the Board of Directors = lalty Coffee A lation of Sustainability Council = Council Member Pacific Coast Coffee Association = Board Member Roasters Guild Charitable Support = Coalition for Coffee Communities
Slide 12: Moving Forward
MOVING FORWARD Roth Conference March 14, 2017
Slide 13: Current Strategic Objectives
CURRENT STRATEGIC OBJECTIVES Increase production efficiency to improve competitiveness = Completed Corporate Relocation Plan = Implement supply chain cost reduction and efficiency initiatives = Leverage ERP system to reduce unnecessary costs = Maintain quality reputation as a competitive strength =
Slide 14: Growth Expansion Opportunities
GROWTH EXPANSION OPPORTUNITIES Positive industry trends = ~3-5% aggregate annual growth rates expected with specialty coffee and iced coffee beverages growing at higher rates = Consumption dynamic changing Large addressable market = Potential market share improvement through new customers and territ
Slide 15: Recent Accomplishments
RECENT ACCOMPLISHMENTS Strengthened management team = Adding talent to manage for future growth = Expertise in turnaround stories = Recently announced supply chain rationalization/simplification = DSD restructure targets annual savings of $2.0 million - $2.6 million to be realized fully by fiscal Q2
Slide 16: Corporate Relocation Plan
CORPORATE RELOCATION PLAN = New HQ and center in Texas up and running = Effectively transitioned all remaining key functions into the new facility = Installed roasters in new state-of-the-art facility = Expect to be fully operational by fiscal year end 2017 = Annual savings estimated $18 million - $
Slide 17: Recent Acquisitions
RECENT ACQUISITIONS China Mist Brands, Inc. = Acquired October 2016 for ~$10.8 million = Strong premium tea brand ¢ 4 | NN A = Fast growing market segment = National distribution in over 20,000 foodservice CT locations M | po) = Strong management team West Coast Coffee = Acquired in February 2017 fo
Slide 18: Financial Overview
FINANCIAL OVERVIEW March 142017
Slide 19: Improving Financial Results
IMPROVING FINANCIAL RESULTS Delivering better financial results = Marked underlying volume growth and operational streamlining = FY16 Non-GAAP Net Income* was our highest in over a decade Net Sales(millions} 8 & Green Coffee Lbs Sold (millions) Fvit Fvi2 Fv13 Fvia Fv1s FvI6 TTM- Dec-16 WEENet Sales
Slide 20: Strong Balance Sheet
STRONG BALANCE SHEET (in millions) December 31, 2016 Cash and Cash Equivalents 8.4 Short-Term Investments 26.2 Accounts and Notes Receivable 50.3 Inventories 56.6 Other Current Assets 47 Net PP&E 165.1 Other Assets 91.4 Total Assets 402.7 Total Liabilities excluding Credit Facility 178.6 Credit Faci
Slide 21: Key Activities to Propel Future Growth
KEY ACTIVITIES TO PROPEL FUTURE GROWTH Strong market with growing categories = Increased coffee and tea consumption Upgrading manufacturing facilities and distribution practices = New Northlake facility can initially increase roasting capacity by up to 25% to support increased demand with longer ter
Slide 22: Farmer Brothers
Farmer Brothers INVESTOR PRESENTATION Roth Conference March 14, 2017