Farmer Bros. Co. (NASDAQ: FARM), a national coffee roaster, wholesaler and distributor of coffee, tea and culinary products, announced May 7 that Christopher P. Mottern, who has served on the company’s board of directors 2013, has been appointed to serve as interim chief executive officer, effective immediately.
Mottern succeeds Michael Keown who, by mutual agreement with the board, has stepped down as Farmer Brothers’ President and CEO, and as a director.
The company is based in Northlake.
The company said the board has launched “a comprehensive search process, with the assistance of a leading executive search firm, to identify and evaluate candidates to serve as permanent CEO.”
“As we position Farmer Brothers for its next phase of growth and development, we have determined that now is the right time for a leadership transition,” Randy Clark, chairman of the board, said in a news release.
Also on May 7, Framer Brothers reported fiscal third quarter net sales were $146.7 million, a decrease of $11.2 million, or 7.1%, from the prior year period. The company reported a net loss in the quarter of $51.7 million compared to a net loss of $2.2 million in the prior year’s quarter. Gross margin decreased to 27.2% from 33.1% in the prior year period, while operating expenses as percentage of sales improved to 31.4% from 34.9% in the prior year period.
“The company’s third quarter results are not acceptable in terms of what we aim to deliver for our shareholders,” said Mottern. “There were a number of unexpected costs and execution issues in the period that negatively impacted the company’s financial results. Given these issues and our year-to-date results, we are taking a cautious approach in our outlook and are updating our targeted Adjusted EBITDA range for fiscal 2019 to $34 million to $36 million.”
Mottern said the company has already started taking corrective actions such as putting new operational controls and processes in place.
“We continue to believe in the underlying long-term earnings power of Farmer Brothers’ business, and we are operating with a sense of urgency,” he said.
Mottern has more than 40 years of experience in the food and beverage industry, having served as CEO of Peet’s Coffee & Tea, president of The Heublein Wines Group, and CEO of Capri Sun Inc.
“With his deep understanding of our business from his six years on the board, extensive leadership and industry experience, and background in finance and accounting, Chris is a natural fit to lead Farmer Brothers in an interim capacity while we conduct a thorough and comprehensive search for a new permanent CEO,” Clark said.
Clark . The Board is focused on identifying the right leader to guide the Company forward during this important time in its history and driving sustainable growth and value creation for our shareholders.”
Clark thanked Keown for his commitment to the company since 2012.
“Under his leadership, Farmer Brothers has grown through multiple acquisitions, made critical investments into its roasting facilities, successfully relocated its headquarters and rebuilt its workforce in Northlake, and achieved ambitious sustainability goals,” Clark said.
Keown said in the announcement that it was a privilege to lead Farmer Brothers and its employees over the past seven years.
“I am proud of all that we have accomplished together,” he said. “With the company’s state-of-the art coffee processing facility, leadership position in sustainable coffee practices, and having brought the Boyd’s coffee volume into the company’s operations, I am confident Farmer Brothers has a strong foundation for the future and look forward to watching its continued growth and success.”
Mottern said it was an honor to serve as interim CEO role.
“I am committed to driving the business forward, while also ensuring a smooth leadership transition,” he said.
Farmer Bros. Co. was founded in 1912 and is a national coffee roaster, wholesaler and distributor of coffee, tea and culinary products, including organic, Direct Trade and sustainably-produced coffee.
Farmer Bros. Co. generated net sales of more than $600 million in fiscal 2018 and has approximately 1,500 employees nationwide.
– FWBP Staff