Revenue during the quarter went up marginally by 2.77 percent to $138.19 million from $134.47 million in the previous year period. Gross margin for the quarter contracted 14 basis points over the previous year period to 38.95 percent. Total expenses were 98.51 percent of quarterly revenues, down from 99.77 percent for the same period last year. This has led to an improvement of 126 basis points in operating margin to 1.49 percent.

Operating income for the quarter was $2.06 million, compared with $0.31 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $12.18 million compared with $9.82 million in the prior year period. At the same time, adjusted EBITDA margin improved 151 basis points in the quarter to 8.81 percent from 7.30 percent in the last year period.

“We continue to make solid progress in our efforts to successfully execute our turnaround plan as demonstrated by the positive year-over-year improvement in our profitability levels,” said president and chief executive officer, Michael Keown. “We delivered our fifth consecutive quarter of at least mid-single digit volume growth and generated strong momentum within our customer pipeline, particularly in our national accounts. Our recent restructuring efforts are delivering positive results and we remain focused on continuously improving both our operational and financial performance to create substantial value for all stakeholders.”

The company has spent $84.02 million cash to meet investing activities during the nine month period as against cash outgo of $23.70 million in the last year period. It has incurred net capital expenditure of $31.51 million on net basis during the nine month period, up 208.86 percent or $21.31 million from year ago period.

Cash flow from financing activities was $58.12 million for the nine month period, up 366.72 percent or $45.67 million, when compared with the last year period.

Cash and cash equivalents stood at $5.73 million as on Mar. 31, 2017, down 57.04 percent or $7.60 million from $13.33 million on Mar. 31, 2016.

Working capital drops significantly
Farmer Brothers Company has witnessed a decline in the working capital over the last year. It stood at $32.39 million as at Mar. 31, 2017, down 65.46 percent or $61.38 million from $93.77 million on Mar. 31, 2016. Current ratio was at 1.28 as on Mar. 31, 2017, down from 2.55 on Mar. 31, 2016.

Cash conversion cycle (CCC) has decreased to 26 days for the quarter from 62 days for the last year period. Days sales outstanding were almost stable at 32 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 32 days for the quarter compared with 60 days for the previous year period. At the same time, days payable outstanding went up to 38 days for the quarter from 30 for the same period last year.