What changed in FARMER BROTHERS CO's 2024 10-K compared to 2023?

Across the narrative sections we track, FARMER BROTHERS CO (FARM) added 182 paragraphs, removed 209, and edited 154 between the 2023 and 2024 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+67/−86), Item 1A. Risk Factors (+60/−51), Item 1. Business (+38/−51).

Did FARMER BROTHERS CO add new Risk Factors in the 2024 10-K?

Yes — Item 1A Risk Factors shows 60 new/edited paragraphs and 51 removed paragraphs versus the 2023 10-K.

What changed in FARMER BROTHERS CO's MD&A (Item 7) in 2024?

Item 7 Management's Discussion & Analysis shows 67 new/edited paragraphs and 86 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did FARMER BROTHERS CO's Legal Proceedings (Item 3) change in 2024?

Item 3 shows 1 added/edited paragraphs and 1 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this FARM 10-K diff come from?

The source filings are FARMER BROTHERS CO's official 2023 and 2024 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in FARMER BROTHERS CO's 10-K — 2023 vs 2024

Paragraph-level year-over-year comparison of FARMER BROTHERS CO's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+182 added−209 removedSource: 10-K (2024-09-12) vs 10-K (2023-09-12)

Top changes in FARMER BROTHERS CO's 2024 10-K

182 paragraphs added · 209 removed · 154 edited across 7 sections

Item 7. Management's Discussion & Analysis+67 / −86 · 61 edited
Item 1A. Risk Factors+60 / −51 · 39 edited
Item 1. Business+38 / −51 · 37 edited
Item 7A. Quantitative and Qualitative Disclosures About Market Risk+6 / −10 · 6 edited
Item 5. Market for Registrant's Common Equity+7 / −7 · 7 edited

Item 1. Business

Business — how the company describes what it does

37 edited+1 added−14 removed50 unchanged

2023 filing

2024 filing

Biggest changeDonations may take the form of corporate cash contributions, product donations, employee volunteerism, and workplace giving (with or without matching contributions). • Recipient organizations include Feeding America, Ronald McDonald House, and local food banks. • We support industry organizations, which commit to grow, protect, and enhance supplies of quality coffee while improving the livelihoods of the families who produce it, and the Specialty Coffee Association (the “SCA”) Sustainability Council and the Coalition for Coffee Communities, which are focused on sustainability in coffee growing regions. • We organize local charities and fund raisers, including support of Ronald McDonald House, riding in the Ride Against Hunger supported by Tarrant Area Food Bank, and hosting local food drives. • Our usable and near expiring products or products with damaged packaging that can be donated are donated to Feeding America affiliated food banks nationwide, in an effort to keep all edible food waste from going to landfills.

Products and Services Our product and service categories consist of the following: • a robust line of roast and ground coffee, including organic, Direct Trade, Project D.I.R.E.C.T. ® , Fair Trade Certified TM® and other sustainably-produced offerings; • frozen liquid coffee; • flavored and unflavored iced and hot teas, including organic and Rainforest Alliance Certified™; • culinary products including premium spices, pancake and biscuit mixes, gravy and sauce mixes, soup bases, dressings, syrups and sauces, and coffee-related products such as coffee filters, cups, sugar and creamers; • other beverages including cappuccino, cocoa, granitas and other blender-based beverages and concentrated and ready-to-drink cold brew and iced coffee; and • installation, repair & refurbishment services for a wide array of coffee, tea and juice equipment using state of the art restoration techniques, managing full equipment lifecycle and providing enhanced service capabilities, maintenance and value addition.

Products and Services Our product and service categories consist of the following: • a robust line of roast and ground coffee, including organic, Direct Trade, Project D.I.R.E.C.T. ® , Fair Trade Certified TM® and other sustainably-produced offerings; • frozen liquid coffee; • ambient liquid coffee; • flavored and unflavored iced and hot teas, including organic and Rainforest Alliance Certified™; • culinary products including premium spices, pancake and biscuit mixes, gravy and sauce mixes, soup bases, dressings, syrups and sauces, and coffee-related products such as coffee filters, cups, sugar and creamers; • other beverages including cappuccino, cocoa, granitas and other blender-based beverages and concentrated and ready-to-drink cold brew and iced coffee; and • installation, repair & refurbishment services for a wide array of coffee, tea and juice equipment using state of the art restoration techniques, managing full equipment lifecycle and providing enhanced service capabilities, maintenance and value addition.

This has included company-paid short-term disability as well as paid parental leave for all non-union team members. • Focused improvement of our overall team member experience, including investments in HR technology, well-being initiatives and a comprehensive Benefits Assistance Center to help employees understand their benefits better. 4 Health and Safety The health and safety of our team members is crucial.

This has included company-paid short-term disability as well as paid parental leave for all non-union team members. • Focused improvement of our overall team member experience, including investments in HR technology, well-being initiatives and a comprehensive Benefits Assistance Center to help employees understand their benefits better. Health and Safety The health and safety of our team members is crucial.

However, our product line and geographic diversity provide some sales stability during the warmer months when coffee consumption ordinarily decreases. Additionally, we usually experience an increase in sales during the summer and early fall months from seasonal businesses located in vacation areas and from grocery retailers ramping up inventory for the winter selling season.

However, our product line and geographic diversity provide some sales stability during the warmer months when coffee consumption ordinarily decreases. Additionally, we usually experience an increase in sales during the summer and early fall months from seasonal businesses located in vacation areas and from retailers ramping up inventory for the winter selling season.

Our owned brand products are sold primarily into the foodservice channel. Our primary brands include Farmer Brothers ® , Artisan Collection by Farmer Brothers™, Superior ® , Metropolitan™, China Mist ® and Boyds ® . Our Artisan coffee products include Direct Trade, Project D.I.R.E.C.T. ® , Fair Trade Certified™®, Rainforest Alliance Certified™, organic and proprietary blends.

Our owned brand products are sold primarily into the foodservice channel. Our primary brands include Farmer Brothers ® , Artisan Collection by Farmer Brothers™, Metropolitan™, China Mist ® and Boyds ® . Our Artisan coffee products include Direct Trade, Project D.I.R.E.C.T. ® , Fair Trade Certified™®, Rainforest Alliance Certified™, organic and proprietary blends.

Our suppliers also execute a Supplier's 3 Certificate of Compliance, representing supplier's receipt and acknowledgment of the Standards of Engagement and agreement to comply with the same. Charitable Activities We view charitable involvement as a part of our corporate responsibility and sustainability model: Social, Environmental, and Economic Development, or SEED.

Our suppliers also execute a Supplier's Certificate of Compliance, representing supplier's receipt and acknowledgment of the Standards of Engagement and agreement to comply with the same. Charitable Activities We view charitable involvement as a part of our corporate responsibility and sustainability model: Social, Environmental, and Economic Development, or SEED.

In addition, we own numerous copyrights, registered and unregistered, registered domain names, and proprietary trade secrets, technology, know-how, and other proprietary rights that are not registered. Seasonality We experience some seasonal influences. The winter months historically have generally been our strongest sales months.

In addition, we own numerous copyrights, registered and unregistered, registered domain names, and proprietary trade secrets, technology, know-how, and other proprietary rights that are not registered. 4 Seasonality We experience some seasonal influences. The winter months historically have generally been our strongest sales months.

None of our business is subject to renegotiation of profits or termination of contracts or subcontracts at the election of the government. We have no 6 material revenues from foreign operations or long-lived assets located in foreign countries.

None of our business is subject to renegotiation of profits or termination of contracts or subcontracts at the election of the government. We have no material revenues from foreign operations or long-lived assets located in foreign countries.

Raw Materials and Supplies Our primary raw material is green coffee, an exchange-traded agricultural commodity that is subject to price fluctuations. Over the past five years, the coffee “C” market near month price per pound ranged from approximately $0.86 to $2.60.

The coffee “C” market near month price as of June 30, 2023 and 2022 was $1.65 and $2.30 per pound, respectively. Our principal packaging materials include carton board, corrugate and plastic. We also use a significant amount of electricity, natural gas, and other energy sources to operate our production and distribution facilities.

The coffee “C” market near month price as of June 30, 2024 and 2023 was $2.29 and $1.65 per pound, respectively. Our principal packaging materials include carton board, corrugate and plastic. We also use a significant amount of electricity, natural gas, and other energy sources to operate our production and distribution facilities.

During fiscal 2023, our top five customers accounted for approximately 3% of our net sales from continuing operations. Most of our customers rely on us for distribution; however, some of our customers use third-party distribution or conduct their own distribution.

During fiscal 2024, our top five customers accounted for approximately 3% of our net sales from continuing operations. Most of our customers rely on us for distribution; however, some of our customers use third-party distribution or conduct their own distribution.

Additionally, we are focused on building partnerships that utilize our current distribution capabilities to expose us to industry and product innovation. • Product Innovation Pipeline. We are continuing to enhance our premium coffee and tea program, developing strategic partnerships, and building an advantaged allied product portfolio that resonates with our customers.

Additionally, we are focused on building partnerships that utilize our current distribution capabilities to expose us to industry and product innovation. • Product Innovation Pipeline. We are continuing to enhance our premium and specialty coffee and tea programs, developing strategic partnerships, and building an advantaged allied product portfolio that resonates with our customers.

Through our dedication to the craft of sourcing, blending and roasting coffee, and our participation with the Specialty Coffee Association ("SCA"), National Coffee Association, Coalition for Coffee Communities, International Women's Coffee Alliance, Pacific Coast Coffee Association, and Roasters Guild, we work to help shape the future of the coffee industry.

Through our dedication to the craft of sourcing, blending and roasting coffee, and our participation with the Specialty Coffee Association ("SCA"), National Coffee Association, Coffee Quality Institute ("CQI"), Coalition for Coffee Communities, International Women's Coffee Alliance, Pacific Coast Coffee Association, 2 and Roasters Guild, we work to help shape the future of the coffee industry.

We believe that our collective efforts in measuring our social and environmental impact, creating programs for waste, water and energy reduction, promoting partnerships in our supply chain that aim at supply chain stability and food security, and focusing on employee engagement place us in a unique position to help retailers and foodservice operators create differentiated coffee and tea programs that can include sustainable supply chains, direct trade purchasing, training and technical assistance, recycling and composting networks, and packaging material reductions.

We are also continuing to invest in and enhance other IT capabilities to provide back-office support which will enable enhanced customer analytics, enable better product targeting and pricing, and create a more robust demand and supply process. In fiscal 2023, we introduced a newly integrated AI-backed pricing model that enhances our ability to evaluate and implement optimal pricing changes.

We are also continuing to invest in and enhance other IT capabilities to provide back-office support which will enable enhanced customer analytics, better product targeting and pricing, and create a more robust demand and supply process. We continue to use an integrated AI-backed pricing model that enhances our ability to evaluate and implement optimal pricing changes.

The enhancements include optimizing the management of the route network to focus on business development, higher profitable sales and customer penetration and introducing key performance indicators to create better focus, accountability and alignment toward business objectives. We have also recently expanded dedicated new business resources to capture market share.

The enhancements include optimizing the management of the route network to focus on business development, higher profitable sales and customer penetration; while utilizing key performance indicators to create better focus, accountability and alignment toward business objectives. We are also utilizing dedicated new business resources to capture market share.

Distribution takes place out of the Portland facility, as well as separate distribution centers in Northlake, Texas; Northlake, Illinois; Rialto, California; and Moonachie, New Jersey. Our products reach our customers primarily through our nationwide DSD network of 242 delivery routes and 106 branch warehouses as of June 30, 2023.

Distribution takes place out of the Portland facility, as well as separate distribution centers in Northlake, Illinois; Rialto, California; and Moonachie, New Jersey. Our products reach our customers primarily through our nationwide DSD network of 243 delivery routes and 104 branch warehouses as of June 30, 2024.

We purchase green coffee beans from multiple coffee regions around the world. Coffee “C” market prices in fiscal 2023 traded in a $1.42 to $2.43 per pound range during the fiscal year, and averaged 28% above the historical average for the past five years.

We purchase green coffee beans from multiple coffee regions around the world. Coffee “C” market prices in fiscal 2024 traded in a $1.44 to $2.54 per pound range during the fiscal year, and averaged 13% above the historical average for the past five years.

We also continue to execute branch rationalization, optimize product 1 offerings, and enhance inventory management, which improves our cost structure without sacrificing service to our customers. • Leveraging our Direct-Store-Delivery Network for growth.

We also continue to execute branch and route rationalization, optimize product offerings through SKU rationalization, individualize customer delivery methods, and enhance inventory management, which improves our cost structure without sacrificing service to our customers. • Leveraging our Direct-Store-Delivery Network for growth.

Copies of our Corporate Governance Guidelines, the Charters of the Audit, Compensation, Technology, Strategy and Capital Allocation and Nominating and Corporate Governance Committees of the Board of Directors, and our Code of Conduct and Ethics can also be found on our website.

Copies of our Corporate Governance Guidelines, the Charters of the Audit, Compensation and Nominating and Corporate Governance Committees of the Board of Directors, our Code of Conduct and Ethics and our Amended and Restated Bylaws can also be found on our website.

Pepper Inc. As many of our customers are small foodservice operators, we also compete with cash and carry and club stores (physical and on-line) such as Costco, Sam’s Club and Restaurant Depot and on-line retailers such as Amazon, including the institutional foodservice divisions of multi-national manufacturers of retail products.

Human Capital On June 30, 2023, we employed approximately 993 employees, 198 of whom are subject to collective bargaining agreements expiring on or before March 31, 2027. Achieving our vision of building a leading specialty products distributor and service company starts with our people.

Human Capital On June 30, 2024, we employed approximately 1,003 employees, 206 of whom are subject to collective bargaining agreements expiring on or before September 30, 2027. 3 Achieving our vision of building a leading specialty products distributor and service company starts with our people.

We believe our longevity, product quality and offerings, national distribution and equipment service network, industry and sustainability leadership, market insight, comprehensive approach to customer relationship management, and superior customer service are the major factors that differentiate us from our competitors. We compete well when these factors are valued by our customers, and we are less effective when only price matters.

Our corporate office in Northlake, Texas has also achieved LEED ® Silver Certification. • Project D.I.R.E.C.T. ® Program. In fiscal 2023, we continued to grow our direct trade sourcing model, Project D.I.R.E.C.T. ®. This program involves direct long-term partnerships with coffee growing communities based on principles of sustainability, transparent pricing and consumer education.

In fiscal 2024, we continued to utilize our direct trade sourcing model, Project D.I.R.E.C.T. ®. This program involves direct long-term partnerships with coffee growing communities based on principles of sustainability, transparent pricing and consumer education.

Team Member Benefits We value each team member and, as a result, we provide a Total Rewards Program that strives to deliver the features that our team members value. To accomplish this, we have conducted surveys of our team members over the last three years to make sure we are investing in areas that our people value.

To accomplish this, we have conducted surveys of our team members over the last three years to make sure we are investing in areas that our people value.

In fiscal 2023, we sold our Northlake, Texas production facility and are in the process of transitioning the entirety of our Direct-Store-Delivery ("DSD") production operations to our Portland, Oregon, facility.

In fiscal 2023, we sold our Northlake, Texas production facility and now utilize our Portland, Oregon facility and third-party co-manufacturers for the entirety of 1 our Direct-Store-Delivery ("DSD") production operations.

In connection with the Sale, the Company and the Buyer have agreed to a mutual transitional co-manufacturing agreement where the Company will manufacture certain products for Buyer and Buyer will manufacture certain products for the Company for an initial period of twelve months.

In connection with the Sale, the Company and the Buyer agreed to a mutual transitional co-manufacturing agreement where the Company manufactured certain products for Buyer and Buyer manufactured certain products for the Company for an initial period of twelve months which ended June 30, 2024. Distribution We operate a production facility in Portland, Oregon.

Competition and Trends The coffee industry is highly competitive, including with respect to price, product quality, service, convenience, technology and innovation, and competition could become more intense due to the relatively low barriers to entry and industry consolidation. We face competition from many sources, certain of which have greater financial and other resources than we do, such as The J.M.

In addition, we sell whole bean and roast and ground flavored and unflavored coffee products under the Public Domain ® , Un Momento ® , Collaborative Coffee ® , Cain's™, McGarvey® and Boyds® brands and iced and hot teas under the China Mist® brand through foodservice distributors at retail.

We sell whole bean and roast and ground flavored and unflavored coffee products under the Cain's™, McGarvey® and Boyds® brands and iced and hot teas under the China Mist® brand through foodservice distributors at retail. Our roast and ground coffee products are primarily sold in traditional packaging, including bags and fractional packages, as well as single-serve packaging.

In order to achieve our mission, increase cash optimization, and improve margins, we have grown existing capabilities and continue to develop new capabilities to deliver value to our customers. More recently, we have undertaken initiatives such as, but not limited to, the following: • Executing Manufacturing and Network Optimization . We continue to develop and execute manufacturing network optimization.

More recently, we have undertaken initiatives such as, but not limited to, the following: • Executing Manufacturing and Network Optimization . We continue to develop and execute manufacturing network optimization.

Our principal office and product development lab is located in Northlake, Texas ("Northlake facility"). We operate in one business segment.

Our principal office and product development lab is located in Fort Worth, Texas ("Fort Worth facility"). We were founded in 1912, incorporated in California in 1923, and reincorporated in Delaware in 2004. Our principal office is located in Forth Worth, Texas. We operate in one business segment.

We have developed a market insight capability internally that reinforces our business-to-business positioning as a thought leader in the coffee, tea and food service industries. We invest in proprietary consumer and customer segmentation studies and provide trend insights and product development support that helps our customers create winning products and integrated marketing strategies.

We invest in proprietary consumer and customer segmentation studies and provide trend insights and product development support that helps our customers create winning products and integrated marketing strategies.

Our customer base is price sensitive, and we are often faced with price competition.

We compete well when these factors are valued by our 5 customers, and we are less effective when only price matters. Our customer base is price sensitive, and we are often faced with price competition.

Business Strategy Overview We are a coffee company dedicated to delivering the coffee people want, the way they want it. We build partnerships with customers who value quality, a wide array of services and sustainable sourcing and are passionate about delivering great coffee, tea, and culinary experiences to their communities.

We build partnerships with customers who value quality, a wide array of services and sustainable sourcing and are passionate about delivering great coffee, tea, and culinary experiences to their communities. In order to achieve our mission, increase cash optimization, and improve margins, we have grown existing capabilities and continue to develop new capabilities to deliver value to our customers.

We believe that due to our commitment to the industry, large retail and foodservice operators are drawn to working with us.

We believe that due to our commitment to the industry, large retail and foodservice operators are drawn to working with us. • Market Insight and Consumer Research. We have developed a market insight capability internally that reinforces our business-to-business positioning as a thought leader in the coffee, tea and food service industries.

Our fiscal year ends on June 30, and our discussion is as of and for the fiscal years ended June 30, 2023 ("fiscal 2023") and June 30, 2022 ("fiscal 2022"). See Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations included in Part II, Item 7 of this Form 10-K.

See Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations included in Part II, Item 7 of this Form 10-K. Business Strategy Overview We are a coffee company dedicated to delivering the coffee people want, the way they want it.

Our roast and ground coffee products are primarily sold in traditional packaging, including bags and fractional packages, as well as single-serve packaging. Our tea products are sold in traditional tea bags and sachets, as well as single-serve tea pods and capsules.

Our tea products are sold in traditional tea bags and sachets, as well as single-serve tea pods and capsules. Our fiscal year ends on June 30, and our discussion is as of and for the fiscal years ended June 30, 2024 ("fiscal 2024") and June 30, 2023 ("fiscal 2023").

Removed

We were among the first coffee roasters in the nation to receive 2 SCA certification of a state-of-the-art coffee lab, which includes our product development labs at the Northlake, Texas and Portland, Oregon facilities. • Market Insight and Consumer Research.

Added

We continue to attract, develop and retain our team members with the following programs: Team Member Benefits We value each team member and, as a result, we provide a Total Rewards Program that strives to deliver the features that our team members value.

Removed

During fiscal 2023, we were part of the 2022 CDP Supplier Engagement Leaderboard. Further, in fiscal 2023, we published our annual sustainability report based on the Global Reporting Initiative’s comprehensive compliance standard.

Removed

In addition, China Mist is a member of the Ethical Tea Partnership (the “ETP”), a non-profit organization that works to improve the sustainability of the tea sector, the lives of tea workers and farmers, and the environment in which tea is produced.

Removed

As a member of the ETP, China Mist sources all of its tea from tea plantations that are certified, monitored, and regularly audited by the ETP. • Science-Based Carbon Reduction Targets. We believe combating climate change is critical to the future of our company, the coffee industry, coffee growers and the world.

Removed

In fiscal 2023, we made progress towards our science-based carbon reduction targets. With a new baseline established in fiscal 2018, we set more ambitious goals in line with efforts to limit global warming to 1.5°C.

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Setting approved targets places us among those responsible businesses that are making measurable contributions to incorporate sustainability within their business strategy. • Zero Waste to Landfill. Achieving zero waste in our production and distribution facilities is a significant step in reaching our overall sustainability goals.

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In fiscal 2023, we maintained our goal of 90% waste diversion for our primary production and distribution facilities. To accomplish this goal, we have focused on the circularity of our waste streams, making partnerships to reuse them, reintroducing them as inputs for new products, or recycling them and composting them when none of the previous options are possible.

Removed

Currently 79% of the waste generated company-wide is diverted from the landfill, and our roasting facilities have achieved the Zero Waste goal since 2018. • LEED ® Certified Facilities. Our Portland production and distribution facility is the first in the Northwest to achieve LEED ® Silver Certification.

Removed

We continue to attract, develop and retain our team members with the following programs: Diversity, Equity and Inclusion We know our customers represent a wide range of backgrounds and experiences and we strive to build a team that is as diverse and inclusive as our customers and the communities in which we do business.

Removed

Our commitments to diversity, equity and inclusion ("DEI") include: • Creating courageous and psychologically safe spaces for all team members through continual learning and development and implementation of Business Employee Resource Groups (BERGs); • Evaluation of all HR programs and processes through a DEI lens to identify and remove bias in our people practices. • Increase in diversity supplier partnerships and spend; • Actively recruiting from organizations that identify, prepare and develop diverse candidates for the workplace (e.g.

Removed

Texas Workforce Commission, Hiring our Heroes, Mom’s Unfiltered, INROADS Inc., etc.); • Engagement with community based organizations and local schools and universities to ensure equal access to employment opportunities through job search/interview training, apprenticeships, internships, and other programs; and • Partnership with the National Organization on Disabilities to review our practices, train our leaders and help us increase our employment of people with disabilities.

Removed

In addition, the Company is also 5 providing Buyer with certain transition services for an initial period of nine months and the Buyer is providing the Company with a lease of office and warehouse space at the Northlake, Texas facility sold in the Sale for an initial period of twelve months. Distribution We operate a production facility in Portland, Oregon.

Removed

We face competition from many sources, including the institutional foodservice divisions of multi-national manufacturers of retail products many of which have greater financial and other resources than we do, such as The J.M.

Removed

Printed copies of these posted materials are also available free of charge to stockholders who request them in writing from Investor Relations, 1912 Farmer Brothers Drive, Northlake, Texas 76262. Information on our website or linked to our website is not incorporated by reference into this Form 10-K.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

39 edited+21 added−12 removed175 unchanged

2023 filing

2024 filing

Biggest changeFrom time to time, we announce certain initiatives regarding our focus areas, which include environmental matters, sustainability in our supply chain, responsible sourcing, social investments and inclusion and diversity. We could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could fail in accurately reporting our progress on such initiatives and goals.

Biggest changeThis rapidly changing environment may result in increased general and administrative expenses. From time to time, we announce certain initiatives regarding our focus areas, which include environmental matters, sustainability in our supply chain, responsible sourcing, social investments and inclusion and diversity.

Our operating results may fluctuate from period to period as a result of a number of factors, including variations in our operating performance or the performance of our competitors, changes in accounting principles, fluctuations in the price and supply of green coffee, fluctuations in the selling prices of our products, the success of our hedging strategy, research reports and changes in financial estimates by analysts about us, or competitors or our industry, our inability or the inability of our competitors to meet analysts’ projections or guidance, strategic decisions by us or our competitors, such as acquisitions, capital investments or changes in business strategy, the depth and liquidity of the market for our common stock, adverse outcomes of litigation, changes in or uncertainty about economic conditions, inflation, supply chain disruptions, conditions or trends in our industry, geographies, or customers, activism by any large stockholder or group of stockholders, speculation by the investment community regarding our business, actual or anticipated growth rates relative to our competitors, terrorist acts, natural disasters, including due to the effects of climate change, perceptions of the investment opportunity associated with our common stock relative to other investment alternatives, competition, changes in consumer preferences and market trends, seasonality, our ability to retain and attract customers, our ability to manage inventory and fulfillment operations and maintain gross margin, and other factors described elsewhere in this risk factors section.

Our operating results may fluctuate from period to period as a result of a number of factors, including variations in our operating performance or the performance of our competitors, changes in accounting principles, fluctuations in the price and supply of green coffee, fluctuations in the selling prices of our products, the success of our hedging strategy, research reports and changes in financial estimates by analysts about us, or competitors or our industry, our inability or the inability of our competitors to meet analysts’ projections or guidance, strategic decisions by us or our competitors, such as acquisitions and divestitures, capital investments or changes in business strategy, the depth and liquidity of the market for our common stock, adverse outcomes of litigation, changes in or uncertainty about economic conditions, inflation, supply chain disruptions, conditions or trends in our industry, geographies, or customers, activism by any large stockholder or group of stockholders, speculation by the investment community regarding our business, actual or anticipated growth rates relative to our competitors, terrorist acts, natural disasters, including due to the effects of climate change, perceptions of the investment opportunity associated with our common stock relative to other investment alternatives, competition, changes in consumer preferences and market trends, seasonality, our ability to retain and attract customers, our ability to manage inventory and fulfillment operations and maintain gross margin, and other factors described elsewhere in this risk factors section.

Our present indebtedness and any future borrowings could have adverse consequences, including: • requiring a substantial portion of our cash flow from operations to make payments on our indebtedness; • reducing the cash flow available or limiting our ability to borrow additional funds, to pay dividends, to fund capital expenditures and other corporate purposes and to pursue our business strategies; • limiting our flexibility in planning for, or reacting to, changes in our businesses and the industries in which we operate; • limiting our ability to refinance our indebtedness on terms acceptable to us or at all; • increasing our vulnerability to general adverse economic and industry conditions; and • placing us at a competitive disadvantage compared to our competitors that have less debt.

Our present indebtedness and any future borrowings could have adverse consequences, including: • requiring a substantial portion of our cash flow from operations to make payments on our indebtedness; 14 • reducing the cash flow available or limiting our ability to borrow additional funds, to pay dividends, to fund capital expenditures and other corporate purposes and to pursue our business strategies; • limiting our flexibility in planning for, or reacting to, changes in our businesses and the industries in which we operate; • limiting our ability to refinance our indebtedness on terms acceptable to us or at all; • increasing our vulnerability to general adverse economic and industry conditions; and • placing us at a competitive disadvantage compared to our competitors that have less debt.

A new co-pack arrangement may not be available on terms as favorable to us as our existing co-pack arrangements, or at all. Customer quality control problems or food safety issues may adversely affect our brands thereby negatively impacting our sales or leading to potential product recalls or product liability claims. Selling products for human consumption involves inherent legal risks.

A new co-pack arrangement may not be available on terms as favorable to us as our existing co-pack arrangements, or at all. 11 Customer quality control problems or food safety issues may adversely affect our brands thereby negatively impacting our sales or leading to potential product recalls or product liability claims. Selling products for human consumption involves inherent legal risks.

Although we account for certain coffee-related derivative instruments as accounting hedges, the portion of open hedging contracts that are not designated as accounting hedges 8 are marked to period-end market price and unrealized gains or losses based on whether the period-end market price was higher or lower than the price we locked-in are recognized in our financial results at the end of each reporting period.

Although we account for certain coffee-related derivative instruments as accounting hedges, the portion of open hedging contracts that are not designated as accounting hedges are marked to period-end market price and unrealized gains or losses based on whether the period-end market price was higher or lower than the price we locked-in are recognized in our financial results at the end of each reporting period.

Should our operating performance deteriorate further, we will have less cash inflows from operations available to meet our financial obligations or to fund our other liquidity needs. Deterioration of our operating performance may also result in a 15 reduction in our working capital, which could negatively impact our available borrowing capacity under our Credit Facility.

Should our operating performance deteriorate further, we will have less cash inflows from operations available to meet our financial obligations or to fund our other liquidity needs. Deterioration of our operating performance may also result in a reduction in our working capital, which could negatively impact our available borrowing capacity under our Credit Facility.

Among other factors, changes in interest rates, mortality rates, early retirement rates, mix of plan asset investments, investment returns and the market value of plan assets can affect the level of plan funding, cause volatility in the net periodic benefit cost, increase our future funding requirements and require payments to the Pension Benefit Guaranty Corporation.

Among other factors, changes in interest rates, mortality rates, early retirement rates, mix of plan asset investments, investment returns 16 and the market value of plan assets can affect the level of plan funding, cause volatility in the net periodic benefit cost, increase our future funding requirements and require payments to the Pension Benefit Guaranty Corporation.

As a result, the effects of climate change could have a long-term adverse impact on our business and results of operations. 9 Investment in acquisitions could disrupt our ongoing business, not result in the anticipated benefits and present risks not originally contemplated. We have invested, and in the future may invest, in acquisitions which may involve significant risks and uncertainties.

As a result, the effects of climate change could have a long-term adverse impact on our business and results of operations. Investment in acquisitions could disrupt our ongoing business, not result in the anticipated benefits and present risks not originally contemplated. We have invested, and in the future may invest, in acquisitions which may involve significant risks and uncertainties.

If our vendors fail to meet our standards, provide products in a timely and efficient manner, or comply with applicable laws, these issues could have a material negative impact on our business and profitability. 11 We rely on co-packers to provide our supply of tea, spice, culinary and other products.

If our vendors fail to meet our standards, provide products in a timely and efficient manner, or comply with applicable laws, these issues could have a material negative impact on our business and profitability. We rely on co-packers to provide our supply of tea, spice, culinary and other products.

Divestitures involve significant risks and uncertainties that could adversely affect our business, consolidated financial position and consolidated results of operations. These include, among others, the inability to find buyers or complete transactions on favorable terms, disruption to our business and/or diversion of management attention from other business concerns.

Our risk of such increased payments may be greater if any of the participating employers in these underfunded plans withdraws from the plan due to insolvency and we are not able to contribute an amount sufficient to fund the unfunded liabilities associated with its participants in the plan.

Our risk of such 13 increased payments may be greater if any of the participating employers in these underfunded plans withdraws from the plan due to insolvency and we are not able to contribute an amount sufficient to fund the unfunded liabilities associated with its participants in the plan.

As a result, we may be unable to realize a tax benefit from the use of our NOLs, even if we generate a sufficient level of taxable net income prior to the expiration of the NOL carry forward periods. 12 Future impairment charges could adversely affect our operating results.

As a result, we may be unable to realize a tax benefit from the use of our NOLs, even if we generate a sufficient level of taxable net income prior to the expiration of the NOL carry forward periods. Future impairment charges could adversely affect our operating results.

We may also need to invest significant amounts of cash and equity to attract talented new employees and to invest in our 7 employee experience and culture, and we may never realize returns on these investments. We do not maintain key person life insurance policies on any of our executive officers.

We may also need to invest significant amounts of cash and equity to attract talented new employees and to invest in our employee experience and culture, and we may never realize returns on these investments. We do not maintain key person life insurance policies on any of our executive officers.

Any new laws and regulations or changes in government policy, existing laws and regulations or the interpretations thereof 13 could require us to change certain of our operational processes and procedures, or implement new ones, and may increase our operating and compliance costs, which could adversely affect our results of operations.

Any new laws and regulations or changes in government policy, existing laws and regulations or the interpretations thereof could require us to change certain of our operational processes and procedures, or implement new ones, and may increase our operating and compliance costs, which could adversely affect our results of operations.

In addition, covenants in our debt agreements could restrict or delay our ability to respond to business opportunities, or in the event of a failure to comply with such covenants, could result in an event of default, which if not cured or waived, could have a material adverse effect on us.

In addition, covenants in our debt agreements could restrict or delay our ability to 15 respond to business opportunities, or in the event of a failure to comply with such covenants, could result in an event of default, which if not cured or waived, could have a material adverse effect on us.

In addition, our legal and regulatory obligations in jurisdictions outside the U.S. are subject to unexpected changes, including the potential for regulatory or other governmental 17 entities to enact new or additional laws or regulations, to issue rulings that invalidate prior laws or regulations or to increase penalties significantly.

In addition, our legal and regulatory obligations in jurisdictions outside the U.S. are subject to unexpected changes, including the potential for regulatory or other governmental entities to enact new or additional laws or regulations, to issue rulings that invalidate prior laws or regulations or to increase penalties significantly.

While we have implemented training and information security policies for our team members and bolstered cybersecurity experience on our board, these measures may be insufficient to prevent against the constantly evolving threats. These threats increase the difficulty of timely detection and successful defense.

While we have 17 implemented training and information security policies for our team members and bolstered cybersecurity experience on our board, these measures may be insufficient to prevent against the constantly evolving threats. These threats increase the difficulty of timely detection and successful defense.

The changes in the prices we pay may take place on a monthly, quarterly or annual basis depending on the product and supplier. Unlike green coffee, we do not purchase 10 any derivative instruments to hedge cost fluctuations in these other commodities.

The changes in the prices we pay may take place on a monthly, quarterly or annual basis depending on the product and supplier. Unlike green coffee, we do not purchase any derivative instruments to hedge cost fluctuations in these other commodities.

We cannot assure investors that our trademark applications will be approved. Third parties may also oppose our trademark applications, or 18 otherwise challenge our use of the trademarks.

We cannot assure investors that our trademark applications will be approved. Third parties may also oppose our trademark applications, or otherwise challenge our use of the trademarks.

Any material interruption in our supply chain, such as material interruption of roasted coffee supply due to the casualty loss at any of our roasting plants or suppliers, interruptions in service by our third-party logistic service providers or common carriers that ship goods within our distribution channels, trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions, pandemics, social or labor unrest, natural disasters or political disputes and military conflicts that cause a material disruption in our supply chain could have a negative impact on our business and our profitability.

Any material interruption in our supply chain, such as material interruption of roasted coffee supply due to the casualty 10 loss at our roasting plant or suppliers, interruptions in service by our third-party logistic service providers or common carriers that ship goods within our distribution channels, trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions, pandemics, social or labor unrest, natural disasters or political disputes and military conflicts that cause a material disruption in our supply chain could have a negative impact on our business and our profitability.

The rights of the holders of our common stock may be subject to, and may be adversely affected by, 16 the rights of the holders of preferred stock that may be issued in the future.

The rights of the holders of our common stock may be subject to, and may be adversely affected by, the rights of the holders of preferred stock that may be issued in the future.

As of June 30, 2023, the projected benefit obligation under our two employer defined benefit pension plans exceeded the fair value of plan assets. The difference between the projected benefit obligation and the fair value of plan assets, or the funded status of the plans, significantly affects the net periodic benefit cost and ongoing funding requirements of those plans.

As of June 30, 2024, the projected benefit obligation under our two employer defined benefit pension plans exceeded the fair value of plan assets. The difference between the projected benefit obligation and the fair value of plan assets, or the funded status of the plans, significantly affects the net periodic benefit cost and ongoing funding requirements of those plans.

There were no intangible asset impairments during fiscal 2023 and fiscal 2022. Our business could be negatively impacted by corporate citizenship and sustainability matters. There is an increased focus from certain investors, customers, consumers, employees, and other stakeholders concerning corporate citizenship and sustainability matters.

There were no intangible asset impairments during fiscal 2024 and fiscal 2023. Our business could be negatively impacted by corporate citizenship and sustainability matters. There is an increased focus from certain investors, customers, consumers, employees, and other stakeholders concerning corporate citizenship and sustainability matters.

As a result, increases in the cost of green coffee could have a material adverse impact on our profitability, financial condition or results of operations. Our accounts receivable represents a significant portion of our current assets increasing our exposure to bad debts and counter-party risk which could have a material adverse effect on our results of operations.

As a result, increases in the cost of green coffee could have a material adverse impact on our profitability, financial condition or results of operations. 8 Our accounts receivable represents a significant portion of our current assets increasing our exposure to credit losses and counter-party risk which could have a material adverse effect on our results of operations.

At June 30, 2023, we had outstanding borrowings of $23.0 million and utilized $4.0 million of the letters of credit sublimit under the Credit Facility, and had $35.8 million of availability under our Credit Facility. We may incur significant indebtedness in the future, including through additional borrowings under the Credit Facility, through the issuance of debt securities, or otherwise.

At June 30, 2024, we had outstanding borrowings of $23.3 million and utilized $4.1 million of the letters of credit sublimit under the Credit Facility, and had $27.8 million of availability under our Credit Facility. We may incur significant indebtedness in the future, including through additional borrowings under the Credit Facility, through the issuance of debt securities, or otherwise.

We have completed the sale of certain of our assets in the past, and may explore additional sales of our assets, and such divestitures may introduce significant risks and uncertainties. Our strategic review resulted in the Sale, and we may engage in additional divestitures in the future.

We have completed the sale of certain of our assets in the past, and may explore additional sales of our assets, and such divestitures may introduce significant risks and uncertainties. As a result of our strategic review, in fiscal 2023 we completed the Sale, and we may engage in additional divestitures in the future.

At June 30, 2023, the Company had approximately $133.9 million in federal net operating loss carryforwards that will begin to expire in the tax year ending June 30, 2027 and $173.1 million in state net operating loss carryforwards that begin to expire in the tax year ending June 30, 2024.

At June 30, 2024, the Company had approximately $134.0 million in federal net operating loss carryforwards that will begin to expire in the tax year ending June 30, 2027 and $170.9 million in state net operating loss carryforwards that begin to expire in the tax year ending June 30, 2024.

A product liability judgment against us or a product recall or the damage to our reputation resulting therefrom could have a material adverse effect on our business, consolidated financial condition, results of operations or liquidity. Increases in income tax rates or changes in income tax laws could have a material adverse impact on our financial results.

Our Board of Directors has the authority to issue shares of preferred stock and to determine the price, rights, preferences, privileges and restrictions, including voting rights, of those shares without any further vote or action by stockholders.

In addition, our reputation within the business community and with our customers and suppliers may be affected, which could result in our customers and suppliers ceasing to do business with us which could adversely affect our business and results of operations. Our insurance policies do not cover losses caused by security breaches.

In April 2021, we entered into a new senior secured credit facility composed of a revolver credit facility (the "Revolver Credit Facility" or the "Credit Facility") and a term credit facility agreement (the “Term Credit Facility”) (See Liquidity for 14 details).

Net operating losses of $78.9 million in federal and $10.3 million of state are indefinite lived and will not expire.

Net operating losses of $77.1 million in federal and $10.0 million of state are indefinite lived and will not expire.

If we do not succeed in differentiating ourselves through, among other things, our product and service offerings, or if we are not effective in setting proper pricing, then our competitive position may be weakened, we could fail to retain our existing customer base and our sales and profitability may be materially adversely affected. 7 We may be unable to anticipate changes in customer preferences or successfully develop new products; also, if we do not effectively manage the introduction of new products, our results may be adversely impacted.

In 2022 and 2023, we had several changes to our executive leadership team and senior management as a result of organizational changes, including the departure of our chief sales officer and our chief supply chain officer.

In 2023 and 2024, we had several changes to our executive leadership team and senior management as a result of organizational changes, including the transition of our chief executive officer and our chief financial officer and the departure of our former chief human resources officer.

Customer demand for our products may not reach our targets or may decline as distributors and retailers seek to reduce inventory positions if there is an economic downturn or economic uncertainty in our key markets. Economic cycles and related fluctuations in customer demand may have a material adverse effect on our business, financial condition, and results of operations.

Such failures could be due to changes in our business (e.g., shifts in business among distribution channels or acquisitions). Moreover, the standards by which citizenship and sustainability efforts and related matters are measured are developing and evolving, and certain areas are subject to assumptions and standards that could change over time.

Moreover, the standards by which citizenship and sustainability efforts and related matters are measured are developing and evolving, and certain areas are subject to assumptions and standards that could change over time. Any such matters, or related corporate citizenship and sustainability matters, could have a material adverse effect on our business.

We depend on the expertise of key personnel to operate our business. The unexpected loss of one or more of these key employees or difficulty recruiting and retaining qualified personnel could have a material adverse effect on our operations and competitive position.

The unexpected loss of one or more of these key employees or difficulty recruiting and retaining qualified personnel could have a material adverse effect on our operations and competitive position. Our success depends on the efforts and abilities of key personnel and a consistent workforce, including frontline workers, support staff and executive team members.

Activities related to identifying, recruiting, hiring and integrating qualified individuals require significant time and attention.

This may require us to adapt to evolving labor conditions and make significant investments in training, coaching and other career development and retention activities. Activities related to identifying, recruiting, hiring and integrating qualified individuals require significant time and attention.

We must continue to recruit, retain, motivate and develop management and other employees sufficiently to maintain our current business and support our projected growth and strategic initiatives. This may require us to adapt to evolving labor conditions and make significant investments in training, coaching and other career development and retention activities.

The competition for talent is extremely high and candidates’ preferences and expectations are evolving. We must continue to recruit, retain, motivate and develop management and other employees sufficiently to maintain our current business and support our projected growth and strategic initiatives.

Removed

Our success depends on the efforts and abilities of key personnel and a consistent workforce, including frontline workers, support staff and executive team members. The competition for talent is extremely high and candidates’ preferences and expectations are evolving.

Added

Economic cycles and related fluctuations in customer demand may have a material adverse effect on our business, financial condition, and results of operations. 6 We depend on the expertise of key personnel to operate our business.

Removed

We may be unable to anticipate changes in consumer preferences and consumer demographics, which may result in decreased demand for our products. Our success depends in part on our ability to anticipate and offer products that appeal to the changing tastes, dietary habits and product packaging preferences of consumers in the market categories in which we compete.

Added

Our success depends, in part, on our ability to innovate and develop new brands and products both in response to and in anticipation of changing consumer preferences and demographics, and customer demands may require us to make internal investments to achieve or sustain competitive advantages and meet customer expectations.

Removed

In addition, we may incur significant costs related to developing and marketing new products or expanding our existing product lines in reaction to what we perceive to be increased consumer preference or demand. Such development or marketing may not result in the volume of sales or profitability anticipated.

Added

Further, the success of our innovation and product development efforts is affected by our ability to anticipate changes in consumer preferences and demographics, the technical capability of our product development staff in developing and testing product prototypes, including complying with governmental regulations, and the success of our management and sales team in introducing and marketing new products.

Removed

Any such matters, or related corporate citizenship and sustainability matters, could have a material adverse effect on our business. The performance of required transition services following the Sale may divert our resources and distract our management, which could harm our ability to optimize our continuing operations and successfully implement our post-Sale business strategy.

Added

The launch and ongoing success of new brands and products is inherently uncertain, especially with regard to their appeal to consumers.

Removed

As described above, in connection with the Sale, we agreed to a mutual transitional co-manufacturing agreement pursuant to which we will manufacture certain products for Buyer and Buyer will manufacture certain products for us for an initial period of twelve months. We are also providing Buyer with certain transition services for an initial period of nine months.

Added

Further, we may incur significant research, development and marketing expenditures in connection with our efforts to develop and launch new products, which we may be unable to recoup if such new products and brands do not gain widespread market acceptance.

Removed

In order to perform our obligations under these transition-related agreements, we must allocate certain of our resources, including assets, facilities, equipment, and the time and attention of our senior management team, to ensure a smooth transition of the businesses sold, which may negatively impact our own business, results of operations, financial condition and cash flows.

Added

In addition, the unsuccessful launch or fleeting popularity of our product innovations, among other things, may affect consumer perception of existing brands or products and our reputation, which may result in inventory write-offs and other associated costs.

Removed

Difficulties in separating the operations, logistics, technologies and IT infrastructure of the divested business from those of our continuing businesses may require substantially more time and funds than we anticipated in negotiating the terms of our transition-related agreements with Buyer.

Added

We could also be adversely affected if we are not successful in developing new brands or products in response to new brand or product introductions by our competitors. Some of our competitors may have greater financial and other resources than we do, making them better positioned to pursue new investment opportunities.

Removed

If we are unsuccessful at executing our business plan and the necessary transition activities following the Sale, our business and results of operations may be adversely affected and our ability to invest in and grow our business could be limited.

Added

A failure to sufficiently innovate or maintain adequate and effective marketing or advertising could also inhibit our ability to maintain our brand relevance and drive product sales.

Removed

On June 30, 2023, the Company and certain of its subsidiaries entered into that certain Consent and Amendment No. 4 to Credit Agreement (the “Fourth Amendment”), with the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent for each member of the lender group.

Added

If our competitors increase their spending on advertising and promotions, if our advertising, media, or marketing expenses increase, if our advertising and promotions become less effective than those of our competitors, or if we do not adequately leverage technology and data analytic capabilities needed to generate concise competitive insight, our business, financial condition, or results of operations could be adversely affected.

Removed

The Fourth Amendment amends that certain Credit Agreement (the “Credit Agreement”), originally entered into by and among the parties on April 26, 2021, as amended by that certain Consent and Amendment No. 1 to Credit Agreement, dated December 20, 2021, that certain Increase Joinder and Amendment No. 2 to Credit Agreement, dated August 8, 2022 and that certain Amendment No. 3 to Credit Agreement (“Amendment No. 3”), dated August 31, 2022..

Added

This increased focus on sustainability may result in new laws, regulations and requirements that could cause disruptions in or increased costs associated with developing, manufacturing and distributing our 12 products.

Removed

The Fourth Amendment includes a consent to the Sale by the administrative agent and the lenders and amends certain terms and conditions of the Credit Agreement by, among other things: (i) reflecting the payoff in full, with proceeds from the Sale, of the $47.0 million outstanding amount of the term loan issued pursuant to Amendment No. 3, (ii) reflecting the paydown, with proceeds from the Sale, of the Revolver Credit Facility (and a reduction of the maximum commitment of the lenders under the Revolver Credit Facility to $75.0 million), (iii) releasing liens of the administrative agent securing the obligations under the Credit Agreement on assets sold pursuant to the Sale, and (iv) amending the Credit Agreement so that the Company's financial covenant (i.e., fixed charge coverage ratio) is only in effect during such times when the Company's liquidity falls below certain thresholds.

Added

We could also lose revenue if our consumers change brands, our customers refuse to buy our products, or investors choose not to invest in our common stock if we do not meet their ESG and sustainability expectations.

Removed

We currently have 500,000 authorized shares of preferred stock undesignated as to series, and we could cause shares currently designated as to series but not outstanding to become undesignated and available for issuance as a series of preferred stock to be designated in the future.

Added

Further, the evolving legal and regulatory landscape and increased stakeholder focus on ESG and related matters has resulted in, and may continue to result in, increased management time and attention spent complying with or meeting such regulations and expectations.

Added

For example, developing and acting on initiatives within the scope of ESG, and collecting, measuring and reporting ESG-related information and metrics can be costly, difficult and time consuming and is subject to evolving reporting standards, including the SEC’s proposed climate-related reporting requirements, and similar proposals by other international regulatory bodies.

Added

We could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could fail in accurately reporting our progress on such initiatives and goals. Such failures could be due to changes in our business (e.g., shifts in business among distribution channels or acquisitions).

Added

We rely on independent certifications for a number of our products We rely on independent third-party certifications, such as certifications of our products as “organic,” “Non-GMO” or “kosher,” to differentiate our products from others. We must comply with the requirements of independent organizations or certification authorities in order to label our products as certified organic.

Added

For example, we can lose our “organic” certification if a manufacturing plant becomes contaminated with non-organic materials, or if it is not properly cleaned after a production run. In addition, all raw materials must be certified organic.

Added

Similarly, we can lose our “kosher” certification if a manufacturing plant and raw materials do not meet the requirements of the appropriate kosher supervision organization. The loss of any independent certifications could adversely affect our market position as an organic and natural products company, which could harm our business.

Added

Increases in income tax rates or other changes in tax laws, including changes in how existing tax laws are interpreted or enforced, could adversely affect our financial performance. The increasingly complex global tax environment has in the past and could continue to increase tax uncertainty, resulting in higher compliance costs and adverse effects on our financial performance.

Added

We are also subject to regular reviews, examinations and audits by numerous taxing authorities with respect to income and non-income based taxes.

Added

Economic and political pressures to increase tax revenues in jurisdictions in which we operate, or the adoption of new or reformed tax legislation or regulation, may make resolving tax disputes more difficult and the final resolution of tax audits and any related litigation can differ from our historical provisions and accruals, resulting in an adverse effect on our financial performance.

Added

Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity, Capital Resources and Financial Condition below for additional details). The Credit Facility was subsequently amended on December 20, 2021, August 8, 2022, August 31, 2022, June 30, 2023 and December 4, 2023.

Item 2. Properties

Properties — owned and leased real estate

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2024 filing

Biggest changeProperties Our production and distribution facilities as of June 30, 2023 are as follows: Location Approximate Area (Square Feet) Purpose Status Northlake, TX 108,262 Corporate headquarters, manufacturing, distribution, warehouse, product development lab Leased Portland, OR 124,000 Manufacturing and distribution, product development lab Leased Oklahoma City, OK 142,115 Equipment repair center Owned Northlake, IL 89,837 Distribution and warehouse Leased Moonachie, NJ 41,404 Distribution and warehouse Leased Rialto, CA 156,586 Distribution and warehouse Leased As of June 30, 2023, we stage our products in 106 branch warehouses throughout the contiguous United States.

Biggest changeProperties Our production and distribution facilities as of June 30, 2024 are as follows: Location Approximate Area (Square Feet) Purpose Status Fort Worth, TX 25,000 Corporate headquarters and product development lab Leased Portland, OR 124,000 Manufacturing and distribution, product development lab Leased Oklahoma City, OK 142,115 Equipment repair center Leased Northlake, IL 89,837 Distribution and warehouse Leased Moonachie, NJ 41,404 Distribution and warehouse Leased Rialto, CA 156,586 Distribution and warehouse Leased As of June 30, 2024, we stage our products in 104 branch warehouses throughout the contiguous United States.

Utilization rates for our coffee roasting facilities were approximately 68%, 75%, and 63% during fiscal 2023, 2022 and 2021, respectively. We believe that our existing facilities provide adequate capacity for our current operations.

Utilization rates for our coffee roasting facilities were approximately 67%, 68%, and 75% during fiscal 2024, 2023 and 2022, respectively. We believe that our existing facilities provide adequate capacity for our current operations.

Approximately 70% of our facilities are leased with a variety of expiration dates within the range of 2023 through 2032.

Approximately 81% of our facilities are leased with a variety of expiration dates within the range of 2024 through 2030.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings For information regarding legal proceedings in which we are involved, see Note 19 , Commitments and Contingencies , of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K, which is incorporated herein by reference.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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2024 filing

Biggest changeBecause no published peer group is similar to the Company's portfolio of business, the Company created a peer group index that includes the following companies that operate in a similar line of business: Utz Brands, Inc., J&J Snack Foods Corp., Hostess Brands, Inc., The Simply Good Foods Company, Calavo Growers, John B Sanfilippo & Son, Inc., SunOpta, Inc., MGP Ingredients, Inc., Whole Earth Brands, Beyond Meat, Inc., Freshpet, Inc., NewAge, Inc., The Duckhorn Portfolio, Inc., Vital Farms, Inc. and Bridgford Foods Corporation.

Biggest changeBecause no published peer group is similar to the Company's portfolio of business, the Company created a peer group index that includes the following companies that operate in a similar line of business: Beyond Meat, Inc., Bridgford Foods Corp, The Vita Coco Company, Inc, The Duckhorn Portfolio, Inc., Freshpet, Inc., BRC Inc., Village Farms International, Inc, MGP Ingredients Inc., Vintage Wine Estates, Inc., SunOpta Inc., Vital Farms, Inc. and Whole Earth Brands, Inc..

This does not include persons whose common stock is in nominee or “street name” accounts through brokers. Dividends We have not recently declared or paid any cash dividend on our common stock.

This does not include persons whose common stock is in nominee or “street name” accounts through brokers. 20 Dividends We have not recently declared or paid any cash dividend on our common stock.

The graph assumes an initial investment of $100.00 at the close of trading on June 30, 2018 and that all dividends paid by companies included in these indices have been reinvested.

The graph assumes an initial investment of $100.00 at the close of trading on June 30, 2019 and that all dividends paid by companies included in these indices have been reinvested.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The principal market on which our common stock is listed for trading is the Nasdaq Global Select Market under the symbol “FARM.” Holders As of September 5, 2023, there were approximately 191 shareholders of record of common stock.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The principal market on which our common stock is listed for trading is the Nasdaq Global Select Market under the symbol “FARM.” Holders As of September 4, 2024, there were approximately 181 shareholders of record of common stock.

Comparison of 5 Year Cumulative Total Return (Fiscal Years Ended June 30) 20 Fiscal Years Ended June 30, 2018 2019 2020 2021 2022 2023 Farmer Bros.

Comparison of 5 Year Cumulative Total Return (Fiscal Years Ended June 30) Fiscal Years Ended June 30, 2019 2020 2021 2022 2023 2024 Farmer Bros.

Sale of Unregistered Securities We did not sell unregistered securities during fiscal 2023.

Sale of Unregistered Securities We did not sell unregistered securities during fiscal 2024.

Co. 100.00 53.58 24.03 41.54 15.35 9.07 Russell 2000 Index 100.00 96.69 90.28 146.28 109.42 122.89 Peer Group Index 100.00 109.63 97.39 141.10 83.96 86.71 Issuer Purchases of Equity Securities Neither we, nor any affiliated purchaser, purchased any of our equity securities during the quarter ended June 30, 2023.

Co. 100.00 44.84 77.52 28.65 16.92 16.37 Russell 2000 Index 100.00 93.37 151.29 113.17 127.10 139.88 Peer Group Index 100.00 82.63 96.57 18.28 10.97 9.83 Issuer Purchases of Equity Securities Neither we, nor any affiliated purchaser, purchased any of our equity securities during the quarter ended June 30, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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2024 filing

Biggest changeFor the Years Ended June 30, 2023 vs 2022 2023 2022 2021 Favorable (Unfavorable) Change % Change Net sales $ 339,964 $ 314,783 $ 261,911 $ 25,181 8 % Cost of goods sold 225,351 180,968 166,130 (44,383) (25) % Gross profit 114,613 133,815 95,781 (19,202) (14) % Selling expenses 103,151 99,458 88,283 (3,693) (4) % General and administrative expenses 37,561 43,243 38,977 5,682 13 % Net gains from sale of assets (5,140) (2,905) (593) 2,235 NM Impairment of fixed assets — — 1,243 — — % Operating expenses 135,572 139,796 127,910 4,224 3 % Loss from operations (20,959) (5,981) (32,129) (14,978) (250) % Other (expense) income: Interest expense (9,162) (4,009) (9,901) (5,153) (129) % Postretirement benefits curtailment and pension settlement charge — — 6,359 — — % Other, net (4,242) 8,140 19,386 (12,382) (152) % Total other (expense) income (13,404) 4,131 15,844 (17,535) (424) % Loss from continuing operations before taxes (34,363) (1,850) (16,285) (32,513) (1,757) % Income tax (benefit) expense (325) 124 13,928 449 362 % Loss from continuing operations $ (34,038) $ (1,974) $ (30,213) $ (32,064) (1,624) % _____________ NM - Not Meaningful 24 Fiscal 2023 and Fiscal 2022 Net Sales Net sales in fiscal 2023 increased $25.2 million, or 8%, to $340.0 million from $314.8 million in fiscal 2022.

Biggest changeFor the Years Ended June 30, 2024 vs 2023 2024 2023 Favorable (Unfavorable) Change % Change Net sales $ 341,094 $ 339,964 $ 1,130 0.3 % Cost of goods sold 207,201 225,351 18,150 8.1 % Gross profit 133,893 114,613 19,280 16.8 % Selling expenses 111,371 103,151 (8,220) (8.0) % General and administrative expenses 41,649 37,561 (4,088) (10.9) % Net gains from sale of assets (16,877) (5,140) 11,737 NM Operating expenses 136,143 135,572 (571) (0.4) % Loss from operations (2,250) (20,959) 18,709 89.3 % Other (expense) income: Interest expense (7,835) (9,162) 1,327 14.5 % Other, net 6,224 (4,242) 10,466 NM Total other (expense) income (1,611) (13,404) 11,793 (88.0) % Loss from continuing operations before taxes (3,861) (34,363) 30,502 88.8 % Income tax expense (benefit) 14 (325) (339) 104.3 % Loss from continuing operations $ (3,875) $ (34,038) $ 30,163 88.6 % _____________ NM - Not Meaningful Fiscal 2024 and Fiscal 2023 Net Sales Net sales in fiscal 2024 increased $1.1 million, or 0.3%, to $341.1 million from $340.0 million in fiscal 2023.

As a result, our business model strives to reduce the impact 31 of green coffee price fluctuations on our financial results and to protect and stabilize our margins, principally through customer arrangements and derivative instruments. We utilize derivative instruments to reduce the impact of changing green coffee commodity prices.

As a result, our business model strives to reduce the impact of green coffee price fluctuations on our financial results and to protect and stabilize our margins, principally through customer arrangements and derivative instruments. We utilize derivative instruments to reduce the impact of changing green coffee commodity prices.

(2) See Note 12 , Employee Benefit Plans, of the Notes to Consolidated Financial Statements included in this Form 10‑K. (3) Purchase commitments include commitments under coffee purchase contracts for which all delivery terms have been finalized but the related coffee has not been received as of June 30, 2023.

Non-compliance with one or more of the covenants and restrictions could result in the full or partial principal balance of the Credit Facility becoming immediately due and payable and termination of the commitments. As of and through June 30, 2023, we were in compliance with all of the covenants under the Credit Facility.

Non-compliance with one or more of the covenants and restrictions could result in the full or partial principal balance of the Credit Facility becoming immediately due and payable and termination of the commitments. As of and through June 30, 2024, we were in compliance with all of the covenants under the Credit Facility.

Average unit price increased during fiscal 2023 due to a mix of products sold, along with price increases implemented during fiscal 2023. There were no new product category introductions in fiscal 2023 or fiscal 2022 which had a material impact on our net sales.

Average unit price increased during fiscal 2024 due to a mix of products sold, along with price increases implemented during fiscal 2024. There were no new product category introductions in fiscal 24 2024 or fiscal 2023 which had a material impact on our net sales.

We believe that the Credit Facility, to the extent available, in addition to our cash flows from operations, collectively, will be sufficient to fund our working capital and capital expenditure requirements for the next 12 months. At June 30, 2023, we had $5.2 million of unrestricted cash and cash equivalents.

We believe that the Credit Facility, to the extent available, in addition to our cash flows from operations, collectively, will be sufficient to fund our working capital and capital expenditure requirements for the next 12 months. At June 30, 2024, we had $5.8 million of unrestricted cash and cash equivalents.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion contains forward-looking statements that involve risks and uncertainties. This Management's Discussion and Analysis is for continuing operations of the Company. The Company’s results of operations for all periods presented have been adjusted to reflect the discontinued operations related to the Sale.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion contains forward-looking statements that involve risks and uncertainties. This Management's Discussion and Analysis is for continuing operations of the Company. The Company’s results of operations for fiscal 2023 presented have been adjusted to reflect the discontinued operations related to the Sale.

Our primary raw material is green coffee, an exchange-traded agricultural commodity that is subject to price fluctuations. Over the past five years, coffee “C” market near month price per pound ranged from approximately $0.86 to $2.60. The coffee “C” market near month price as of June 30, 2023 and 2022 was $1.65 and $2.30 per pound, respectively.

Our primary raw material is green coffee, an exchange-traded agricultural commodity that is subject to price fluctuations. Over the past five years, coffee “C” market near month price per pound ranged from approximately $0.90 to $2.60. The coffee “C” market near month price as of June 30, 2024 and 2023 was $2.29 and $1.65 per pound, respectively.

We operate in one business segment. We serve a wide variety of customers, from small independent restaurants and foodservice operators to large institutional buyers like restaurants, department and convenience store retailers, hotels, casinos, healthcare facilities, and gourmet coffee houses, as well as grocery chains with private brand and consumer-branded coffee and tea products, and foodservice distributors.

We serve a wide variety of customers, from small independent restaurants and foodservice operators to large institutional buyers like restaurants, department and convenience store retailers, hotels, casinos, healthcare facilities, and gourmet coffee houses, as well as grocery chains with private brand and consumer-branded coffee and tea products, and foodservice distributors.

Proceeds from the Sale were used to pay off in full, the $47 million outstanding amount under the Term Credit Facility and the partial pay down of the Revolver Credit Facility to a balance of $23.0 million as of June 30, 2023.

At June 30, 2023, approximately 40% of our outstanding coffee-related derivative instruments, representing 1.5 million pounds of forecasted green coffee purchases, were designated as cash flow hedges. At June 30, 2022, approximately 89% of our outstanding coffee-related derivative instruments, representing 4.2 million pounds of forecasted green coffee purchases, were designated as cash flow hedges.

Our Business We are a leading coffee roaster, wholesaler, equipment servicer and distributor of coffee, tea and other allied products manufactured under our owned brands, as well as under private labels on behalf of certain customers. We were founded in 1912, incorporated in California in 1923, and reincorporated in Delaware in 2004. Our principal office is located in Northlake, Texas.

As of June 30, 2023 and 2022, we had 3.9 million and 4.7 million pounds of green coffee covered under coffee-related derivative instruments, respectively. We do not purchase any derivative instruments to hedge cost fluctuations of any commodities other than green coffee. The fair value of derivative instruments is based upon broker quotes.

As of June 30, 2024 and 2023, we had 0.1 million and 3.9 million pounds of green coffee covered under coffee-related derivative instruments, respectively. We do not purchase any derivative instruments to hedge cost fluctuations of any commodities other than green coffee. The fair value of derivative instruments is based upon broker quotes.

The results of operations for fiscal 2023, fiscal 2022 and fiscal 2021 are not necessarily indicative of the results that may be expected for any future period.

The results of operations for fiscal 2024 and fiscal 2023 are not necessarily indicative of the results that may be expected for any future period.

EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin, as defined by us, may not be comparable to similarly titled measures reported by other companies. We do not intend for non-GAAP financial measures to be considered in isolation or as a substitute for other measures prepared in accordance with GAAP.

Results of Operations The following table sets forth information regarding our consolidated results of operations for fiscal 2023, fiscal 2022 and fiscal 2021.

Results of Operations The following table sets forth information regarding our consolidated results of operations for fiscal 2024 and fiscal 2023.

We distribute our products from our Portland, Oregon production facility, as well as separate distribution centers in Northlake, Texas; Portland, Oregon; Northlake, Illinois; Moonachie, New Jersey; and Rialto, California. Our products reach our customers primarily through our nationwide DSD network of 242 delivery routes and 106 branch warehouses as of June 30, 2023.

We distribute our products from our Portland, Oregon production facility, as well as separate distribution centers in Northlake, Illinois; Moonachie, New Jersey; and Rialto, California. Our products reach our customers primarily through our nationwide DSD network of 243 delivery routes and 104 branch warehouses as of June 30, 2024.

The increase in net sales was primarily due to higher pricing compared to prior periods, partially offset by a decline in sales volume. On our sales, average unit price increased due to the increase in pricing and product mix sold to customers.

The following table illustrates the sensitivity to a change in certain assumptions for the Farmer Bros. pension plan, holding all other assumptions constant: ($ in thousands) Effect on 2023 Net Periodic Benefit Cost Effect on June 30, 2023 PBO 50 basis points decrease in discount rate $ (62) $ 4,675 50 basis points increase in discount rate $ 50 $ (4,302) 50 basis points decrease in expected rate of return on assets $ 365 N/A 50 basis points increase in expected rate of return on assets $ (365) N/A See Note 12 , Employee Benefit Plans, of the Notes to Consolidated Financial Statements included in this Form 10‑K for further discussions of our various pension plans. 32

The following table illustrates the sensitivity to a change in certain assumptions for the Farmer Bros. pension plan, holding all other assumptions constant: ($ in thousands) Effect on 2024 Net Periodic Benefit Cost Effect on June 30, 2024 PBO 50 basis points decrease in discount rate $ (58) $ 4,260 50 basis points increase in discount rate $ 48 $ (3,932) 50 basis points decrease in expected rate of return on assets $ 382 N/A 50 basis points increase in expected rate of return on assets $ (382) N/A See Note 12 , Employee Benefit Plans, of the Notes to Consolidated Financial Statements included in this Form 10‑K for further discussions of our various pension plans.

At June 30, 2023, we had outstanding borrowings of $23.0 million and utilized $4.0 million of the letters of credit sublimit under the Credit Facility, and had $35.8 million of availability under our Credit Facility. Liquidity We generally finance our operations through cash flows from operations and borrowings under our Credit Facility.

At June 30, 2024, we had outstanding borrowings of $23.3 million and utilized $4.1 million of the letters of credit sublimit under the Credit Facility, and had $27.8 million of availability under our Credit Facility. Liquidity We generally finance our operations through cash flows from operations and borrowings under our Credit Facility.

Plan obligations and expenses are based on existing retirement plan provisions. The assumptions used in developing the required estimates include the following key factors: • Discount rates. We utilize a yield curve analysis to determine the discount rates for our defined benefit plans’ obligations.

Material changes in pension costs may occur in the future due to changes in these assumptions. Plan obligations and expenses are based on existing retirement plan provisions. The assumptions used in developing the required estimates include the following key factors: • Discount rates. We utilize a yield curve analysis to determine the discount rates for our defined benefit plans’ obligations.

The following table presents the effect of changes in unit sales, unit pricing and product mix for fiscal 2023 compared to fiscal 2022 (in millions): Units Sold and Pricing For Year Ended June 30, 2023 vs 2022 % of Total Mix Change Effect of change in unit sales (22.3) (88.5) % Effect of pricing and product mix changes 47.5 188.5 % Total increase in net sales 25.2 100.0 % Unit sales decreased 6.1% and average unit price increased by 15.1% in fiscal 2023 as compared to the same prior year period, resulting in a net increase in net sales of 8%.

The following table presents the effect of changes in unit sales, unit pricing and product mix for fiscal 2024 compared to fiscal 2023 (in millions): Units Sold and Pricing For Year Ended June 30, 2024 vs 2023 % of Total Mix Change Effect of change in unit sales (31.4) (2.9) % Effect of pricing and product mix changes 32.5 2.9 % Total increase in net sales 1.1 — % Unit sales decreased 8.6% and average unit price increased by 7.8% in fiscal 2024 as compared to the same prior year period, resulting in a net increase in net sales of 0.3%.

At June 30, 2023, we had $35.8 million of availability under our Credit Facility.

At June 30, 2024, we had $27.8 million of availability under our Credit Facility.

The decrease was primarily due to $3.7 million increase in selling expenses offset by a $5.7 million decrease in general and administrative expenses and a $2.2 million increase in net gains from sale of assets due to sale of branch properties during fiscal 2023.

The increase was primarily due to $8.2 million increase in selling expenses and a $4.1 million increase in general and administrative expenses offset by a $11.7 million increase in net gains from sale of assets due to sale of branch properties during fiscal 2024.

This discussion, which presents our results for fiscal 2023, fiscal 2022, and fiscal 2021 should be read in conjunction with our Consolidated Financial Statements and the accompanying notes and Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for fiscal 2022, filed with the SEC on September 2, 2022, which provides additional information on comparisons of fiscal 2022 and the year ended June 30, 2021 ("fiscal 2021").

This discussion, which presents our results for fiscal 2024 and fiscal 2023, should be read in conjunction with our Consolidated Financial Statements and the accompanying notes and Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K, filed with the SEC on September 12, 2023, as amended by that certain Amendment No. 1 to Form 10-K, filed with the SEC on October 27, 2023, which provides additional information on our results for fiscal 2023 and our fiscal year ended June 30, 2022 ("fiscal 2022").

Operating expenses decreased by $4.2 million in fiscal 2023 over the prior year period due to a $3.7 million increase in selling expenses offset by a $5.7 million decrease in general and administrative expenses and a $2.2 million increase in gain on sale of assets from the sale of branch properties and other assets.

Operating expenses increased by $0.6 million in fiscal 2024 over the prior year period due to a $8.2 million increase in selling expenses and a $4.1 million increase in general and administrative expenses offset by a $11.7 million increase in gain on sale of assets from the sale of branch properties and other assets.

Upon termination of this plan during fiscal 2021, the deferred non-cash tax expense was reversed out of other comprehensive income and recorded in continuing operations net income in the second quarter of fiscal 2021. 26 Non-GAAP Financial Measures In addition to net loss determined in accordance with U.S. generally accepted accounting principles (“GAAP”), we use the following non-GAAP financial measures in assessing our operating performance: “EBITDA” is defined as loss from continuing operations excluding the impact of: • income tax benefit; • interest expense; and • depreciation and amortization expense.

Non-GAAP Financial Measures In addition to net loss determined in accordance with U.S. generally accepted accounting principles (“GAAP”), we use the following non-GAAP financial measures in assessing our operating performance: “EBITDA” is defined as loss from continuing operations excluding the impact of: • income tax expense (benefit); • interest expense; and • depreciation and amortization expense.

An economic downturn may also cause substantial changes in consumer behavior and demand for our products, adversely affecting results of operations and our financial position, some of which we may not be able to predict with certainty. 29 Cash Flows The significant captions and amounts from our consolidated statements of cash flows are summarized below: For the Years Ended June 30, 2023 2022 Consolidated Statements of cash flows data (in thousands) Net cash used in operating activities $ (6,880) $ (11,454) Net cash provided by (used in) investing activities 88,445 (6,045) Net cash (used in) provided by financing activities (86,140) 17,055 Net decrease in cash and cash equivalents $ (4,575) $ (444) Operating Activities Net cash used in operating activities in fiscal 2023 decreased $4.6 million as compared to fiscal 2022.

An economic downturn may also cause substantial changes in consumer behavior and demand for our products, adversely affecting results of operations and our financial position, some of which we may not be able to predict with certainty. 27 Cash Flows The significant captions and amounts from our consolidated statements of cash flows are summarized below: For the Years Ended June 30, 2024 2023 Consolidated Statements of cash flows data (in thousands) Net cash used in operating activities $ (14,147) (7,324) Net cash provided by investing activities 14,723 340 Net cash provided by (used in) financing activities 10 (86,140) Net increase (decrease) in cash and cash equivalents $ 586 $ (93,124) Operating Activities Net cash used in operating activities in fiscal 2024 increased $6.8 million as compared to fiscal 2023.

The change in fair value of the derivative is reported in accumulated other comprehensive income (loss) (“AOCI”) on our consolidated balance sheet and subsequently reclassified into cost of goods sold in the period or periods when the hedged transaction affects earnings. At June 30, 2024, none of our outstanding coffee-related derivative instruments, were designated as cash flow hedges.

Summary Overview of Fiscal 2023 Results Net sales in fiscal 2023 increased $25.2 million, or 8%, to $340.0 million from $314.8 million in fiscal 2022. The increase in net sales was primarily due to higher pricing compared to prior periods, partially offset by decline in sales volume.

Summary Overview of Fiscal 2024 Results Net sales in fiscal 2024 increased $1.1 million, or 0.3%, to $341.1 million from $340.0 million in fiscal 2023. The increase in net sales was primarily due to higher pricing compared to prior periods, partially offset by a decline in sales volume. During fiscal 2024, we experienced higher gross margins compared to fiscal 2023.

We expect to finance these expenditures through cash flows from operations and borrowings under our Revolver Credit Facility. Depreciation and amortization expense from continuing operations was $12.9 million, $12.4 million and $18.8 million in fiscal 2023, 2022 and 2021, respectively.

In fiscal 2025, we anticipate capital expenditures will be between $9.0 million and $11.0 million. We expect to finance these expenditures through cash flows from operations and borrowings under our Revolver Credit Facility. Depreciation and amortization expense from continuing operations was $11.6 million and $12.9 million in fiscal 2024 and 2023, respectively.

“Adjusted EBITDA” is defined as loss from continuing operations excluding the impact of: • income tax benefit; • interest expense; • depreciation and amortization expense; • 401(k), ESOP and share-based compensation expense; • gain on Settlement with Boyd's sellers; • net gains from sales of assets; • strategic initiatives; • severance costs; • impairment of fixed assets; • costs associated with the COVID-19 pandemic; • severe weather event; and • postretirement benefits gains curtailment and pension settlement charge.

“Adjusted EBITDA” is defined as loss from continuing operations excluding the impact of: • income tax expense (benefit); • interest expense; • depreciation and amortization expense; • 401(k) and share-based compensation expense; • net gains from sales of assets; • severance costs; • loss related to sale of business; and • gain on settlement with Boyd's sellers.

(4) See Note 13 , Debt Obligations , of the Notes to Consolidated Financial Statements included in this Form 10‑K. 30 Capital Expenditures For fiscal 2023, fiscal 2022 and fiscal 2021 our capital expenditures paid were $15.0 million, $15.2 million and $15.1 million respectively. In fiscal 2024, we anticipate capital expenditures will be between $16.0 million and $18.0 million.

See Note 19 , Commitments and Contingencies, of the Notes to Consolidated Financial Statements included in this Form 10‑K. (4) See Note 13 , Debt Obligations , of the Notes to Consolidated Financial Statements included in this Form 10‑K. 28 Capital Expenditures For fiscal 2024 and fiscal 2023 our capital expenditures paid were $13.8 million and $13.2 million, respectively.

The portion of open hedging contracts that are not designated as accounting hedges are marked to period-end market price and unrealized gains or losses based on whether the period-end market price was higher or lower than the price we locked-in are recognized in our financial results. 29 Single Employer Pension Plan The estimation of our single employer Farmer Bros. pension plan requires that we make use of various actuarial assumptions such as discount rates and expected long-term rates of return on plan assets.

Financial Data Highlights (in thousands, except per share data and percentages) For The Years Ended June 30, 2023 vs 2022 2023 2022 2021 Favorable (Unfavorable) Change % Change Income Statement Data: Net sales $ 339,964 $ 314,783 261,911 $ 25,181 8.0 % Gross margin 33.7 % 42.5 % 36.6 % (8.8) % NM Operating expenses as a % of sales 39.9 % 44.4 % 48.8 % 4.5 % NM Loss from continuing operations $ (34,038) $ (1,974) (30,213) $ (32,064) NM Loss from continuing operations available to common stockholders per common share, basic and diluted $ (1.74) $ (0.14) $ (1.74) $ (1.60) NM Operating Data: Coffee pounds - continuing operations 24,373 26,159 26,347 (1,786) (6.8) % EBITDA(1) $ (16,925) $ 11,101 $ 8,646 $ (28,026) (252.5) % EBITDA Margin(1) (5.0) % 3.5 % 3.3 % (8.5) % NM Adjusted EBITDA(1) $ (14,153) $ 16,214 $ 13,777 $ (30,367) (187.3) % Adjusted EBITDA Margin(1) (4.2) % 5.2 % 5.3 % (9.4) % NM Percentage of Total Net Sales By Product Category Coffee (Roasted) 47.1 % 48.2 % 50.3 % (1.1) % (2.3) % Tea & Other Beverages (2) 26.0 % 25.6 % 24.8 % 0.4 % 1.6 % Culinary 19.0 % 17.7 % 16.9 % 1.3 % 7.3 % Spices 6.9 % 7.1 % 7.1 % (0.2) % (2.8) % Delivery Surcharge 1.0 % 1.4 % 0.9 % (0.4) % NM Net sales from continuing operations 100.0 % 100.0 % 100.0 % Other data: Capital expenditures related to maintenance $ 13,190 $ 12,038 $ 7,758 $ (1,152) (9.6) % Total capital expenditures 13,190 13,624 9,577 434 3.2 % Depreciation & amortization expense 12,938 12,359 18,760 (579) (4.7) % ________________ NM - Not Meaningful (1) EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures.

Financial Data Highlights (in thousands, except per share data and percentages) For The Years Ended June 30, 2024 vs 2023 2024 2023 Favorable (Unfavorable) Change % Change Income Statement Data: Net sales $ 341,094 $ 339,964 $ 1,130 0.3 % Gross margin 39.3 % 33.7 % 5.6 % NM Operating expenses as a % of sales 39.9 % 39.9 % — % NM Loss from continuing operations $ (3,875) $ (34,038) $ 30,163 NM Loss from continuing operations available to common stockholders per common share, basic and diluted $ (0.19) $ (1.74) $ 1.55 NM Operating Data: Coffee pounds - continuing operations 22,169 24,373 (2,204) (9.0) % EBITDA(1) $ 10,718 $ (16,925) $ 27,643 NM EBITDA Margin(1) 3.1 % (5.0) % 8.1 % NM Adjusted EBITDA(1) $ 558 $ (14,153) $ 14,711 NM Adjusted EBITDA Margin(1) 0.2 % (4.2) % 4.4 % NM Percentage of Total Net Sales By Product Category Coffee (Roasted) 46.4 % 47.1 % (0.7) % (1.5) % Tea & Other Beverages (2) 26.4 % 26.0 % 0.4 % 1.5 % Culinary 19.3 % 19.0 % 0.3 % 1.6 % Spices 6.4 % 6.9 % (0.5) % (7.2) % Delivery Surcharge 1.5 % 1.0 % 0.5 % NM Net sales from continuing operations 100.0 % 100.0 % Other data: Capital expenditures related to maintenance $ 13,843 $ 13,190 $ (653) (5.0) % Total capital expenditures 13,843 13,190 (653) (5.0) % Depreciation & amortization expense 11,588 12,938 1,350 10.4 % ________________ NM - Not Meaningful (1) EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures.

This calculation is for continuing operations only. 27 Set forth below is a reconciliation of reported loss from continuing operations to EBITDA (unaudited): For the Year Ended June 30, (In thousands) 2023 2022 2021 Loss from continuing operations, as reported $ (34,038) $ (1,974) $ (30,213) Income tax (benefit) expense (325) 124 13,928 Interest expense (1) 4,499 591 6,171 Depreciation and amortization expense 12,939 12,360 18,760 EBITDA $ (16,925) $ 11,101 $ 8,646 EBITDA Margin (5.0) % 3.5 % 3.3 % ____________ (1) Excludes interest expense related to pension plans and postretirement benefits.

Set forth below is a reconciliation of loss from continuing operations to EBITDA (non-GAAP): For the Year Ended June 30, (In thousands) 2024 2023 Loss from continuing operations $ (3,875) $ (34,038) Income tax expense (benefit) 14 (325) Interest expense (1) 2,991 4,499 Depreciation and amortization expense 11,588 12,939 EBITDA $ 10,718 $ (16,925) EBITDA Margin 3.1 % (5.0) % ____________ (1) Excludes interest expense related to pension plans and postretirement benefits.

The decrease in Other, net, was primarily a result of lower amortized gains on our terminated post-retirement medical benefit plan and mark-to-market net losses on coffee-related derivative instruments not designated as accounting hedges. Income Taxes In fiscal 2022, we recorded income tax expense of $0.1 million as compared to $13.9 million in fiscal 2021.

The increase in Other, net, was primarily a result of mark-to-market net gains on coffee-related derivative instruments not designated as accounting hedges during fiscal 2024. Income Taxes In fiscal 2024, we recorded income tax expense of $14.0 thousand as compared to income tax benefit of $0.3 million in fiscal 2023.

Total Other Income (Expense) Total other income (expense) in fiscal 2023 was $13.4 million of expense compared to $4.1 million of income in fiscal 2022. The change in total other income (expense) in fiscal 2023 was primarily a result of an increase in interest expense and an absence of the gains from coffee-related derivative instruments in fiscal 2023.

The change in total other income (expense) in fiscal 2024 was primarily a result of a decrease in interest expense and gains from coffee-related derivative instruments in fiscal 2024 compared to losses from coffee-related derivative instruments in fiscal 2023. Interest expense in fiscal 2024 decreased $1.3 million to $7.8 million from $9.2 million in the prior year period.

The following table summarizes the Company’s debt obligations, excluding unamortized deferred debt financing costs: June 30, 2023 June 30, 2022 (In thousands) Debt Origination Date Maturity Principal Amount Borrowed Carrying Value Weighted Average Interest Rate Carrying Value Weighted Average Interest Rate Revolver various 4/25/2025 N/A $ 23,021 6.66 % $ 63,000 6.17 % Term Loan 4/26/2021 4/25/2025 $ 47,500 $ — $ 45,600 7.50 % Total $ 23,021 $ 108,600 Credit Facility The revolver under the Credit Facility has a commitment of up to $75.0 million and a maturity date of April 25, 2025.

(3) Result of the settlements related to the Sale, which included gains related to coffee hedges and settlement of liabilities. 26 Liquidity, Capital Resources and Financial Condition The following table summarizes the Company’s debt obligations, excluding unamortized deferred debt financing costs: June 30, 2024 June 30, 2023 (In thousands) Debt Origination Date Maturity Principal Amount Borrowed Carrying Value Weighted Average Interest Rate Carrying Value Weighted Average Interest Rate Revolver various 4/26/2027 N/A $ 23,300 7.05 % $ 23,021 6.17 % Credit Facility The revolver under the Credit Facility has a commitment of up to $75.0 million and a maturity date of April 26, 2027.

Areas of focus include distribution network optimization, methods of procurement, logistics, inventory management, supporting technology, and real estate assets. The ability to attract and retain a skilled workforce, as well as mitigate global supply chain challenges, will affect our future growth and profitability. • Demographic and Channel Trends.

The ability to attract and retain a skilled workforce, as well as mitigate global supply chain challenges, will affect our future growth and profitability. 23 • Demographic and Channel Trends.

(2) Result of the settlement related to the acquisition of Boyd Coffee Company which included the cancellation of shares of Series A Preferred Stock and settlement of liabilities. 28 Liquidity, Capital Resources and Financial Condition Results include the cash flow impacts of discontinued operations, unless otherwise noted.

(2) Result of the settlement related to the acquisition of Boyd Coffee Company which included the cancellation of shares of Series A Preferred Stock and settlement of liabilities.

We are focused on leveraging our Portland, Oregon facility to produce the highest quality coffee in response to the market shift to premium and specialty coffee and create sustainable long-term growth. We will continue to invest in our facility to ensure reliable production while focusing on overall production costs. • Supply Chain Efficiencies and Competition.

Some of these factors include: • Investment in Manufacturing Facility. We are focused on leveraging our Portland, Oregon facility to produce the highest quality coffee in response to the market shift to premium and specialty coffee and create sustainable long-term growth.

Set forth below is a reconciliation of reported loss from continuing operations to Adjusted EBITDA (unaudited): Year Ended June 30, (In thousands) 2023 2022 2021 Loss from continuing operations, as reported $ (34,038) $ (1,974) $ (30,213) Income tax (benefit) expense (325) 124 13,928 Interest expense (1) 4,499 591 6,171 Depreciation and amortization expense 12,939 12,360 18,760 401(k), ESOP and share-based compensation expense 8,212 6,989 4,580 Net (gains) losses from sale of assets (5,140) (2,905) (593) Strategic initiatives (1,917) — — Severance costs — 76 4,203 Impairment of fixed assets 1,617 953 1,596 Gain on settlement with Boyd's sellers (2) — — 1,243 — — 352 Non-recurring costs associated with the COVID-19 pandemic — — 109 Weather-related event - 2021 severe winter weather — — (6,359) Postretirement benefits gains curtailment and pension settlement charge $ (14,153) $ 16,214 $ 13,777 Adjusted EBITDA (4.2) % 5.2 % 5.3 % Adjusted EBITDA Margin ________ (1) Excludes interest expense related to pension plans and postretirement benefits.

Set forth below is a reconciliation of loss from continuing operations to Adjusted EBITDA (non-GAAP): Year Ended June 30, (In thousands) 2024 2023 Loss from continuing operations $ (3,875) $ (34,038) Income tax expense (benefit) 14 (325) Interest expense (1) 2,991 4,499 Depreciation and amortization expense 11,588 12,939 401(k) and share-based compensation expense 3,762 8,212 Net gains from sale of assets (18,091) (5,140) Severance costs 2,955 1,617 Loss related to sale of business (3) 1,214 — Gain on settlement with Boyd's sellers (2) — (1,917) Adjusted EBITDA $ 558 $ (14,153) Adjusted EBITDA Margin 0.2 % (4.2) % ________ (1) Excludes interest expense related to pension plans and postretirement benefits.

The following table contains information regarding total contractual obligations as of June 30, 2023, which we expect to fund primarily with operating cash flows: Payment due by period (In thousands) Total Less Than One Year 1-3 Years 3-5 Years More Than 5 Years Contractual obligations: Operating lease obligations(1) $ 28,916 $ 7,979 $ 12,501 $ 7,509 $ 927 Finance lease obligations(1) 482 193 289 — — Pension plan obligations(2) 73,730 7,660 14,890 15,070 36,110 Postretirement benefits other than pension plans (2) 661 62 130 137 332 Revolving credit facility (4) 23,021 — 23,021 — — Purchase commitments(3) 115,335 115,335 — — — Derivative liabilities 2,636 2,636 — — — Total contractual obligations $ 244,781 $ 133,865 $ 50,831 $ 22,716 $ 37,369 ______________ (1) See Note 6 , Leases, of the Notes to Consolidated Financial Statements included in this Form 10‑K.

The following table contains information regarding total contractual obligations as of June 30, 2024, which we expect to fund primarily with operating cash flows: Payment due by period (In thousands) Total Less Than One Year 1-3 Years 3-5 Years More Than 5 Years Contractual obligations: Operating lease obligations(1) $ 40,659 $ 14,046 $ 16,832 $ 9,464 $ 317 Finance lease obligations(1) 289 193 96 — — Pension plan obligations(2) 73,950 7,900 15,010 15,100 35,940 Postretirement benefits other than pension plans (2) 719 71 147 150 351 Revolving credit facility (4) 23,300 — 23,300 — — Purchase commitments(3) 51,686 51,686 — — — Derivative liabilities 2,235 730 1,505 — — Total contractual obligations $ 192,838 $ 74,626 $ 56,890 $ 24,714 $ 36,608 ______________ (1) See Note 6 , Leases, of the Notes to Consolidated Financial Statements included in this Form 10‑K.

In order to compete effectively and capitalize on growth opportunities, we must retain and continue to grow our customer base, evaluate and undertake initiatives to reduce costs and streamline our supply chain. We continue to look for ways to deploy our personnel, systems, assets and infrastructure to create or 23 enhance stockholder value.

We will continue to invest in our facility to ensure reliable production while focusing on overall production costs. • Supply Chain Efficiencies and Competition. In order to compete effectively and capitalize on growth opportunities, we must retain and continue to grow our customer base, evaluate and undertake initiatives to reduce costs and streamline our supply chain.

Gross Profit Gross profit in fiscal 2023 decreased $19.2 million, or 14%, to $114.6 million from $133.8 million in fiscal 2022. Gross margin decreased 8.8% to 33.7% in fiscal 2023 from 42.5% in fiscal 2022.

Gross Profit Gross profit in fiscal 2024 increased $19.3 million, or 16.8%, to $133.9 million from $114.6 million in fiscal 2023. Gross margin increased by 5.6% to 39.3% in fiscal 2024 from 33.7% in fiscal 2023. The increase in gross profit in fiscal 2024 was primarily driven by improved pricing.

Purchase commitments related to the Sale will be transferred to the Buyer in the first half of fiscal 2024. See Note 19 , Commitments and Contingencies, of the Notes to Consolidated Financial Statements included in this Form 10‑K.

See Note 3 , Discontinued Operations of the Notes to Consolidated Financial Statements included in this Form 10‑K for more information related to the sale of business and the discontinued operations.

The change was driven by a decrease in inventory, partially offset by lower cash earnings. Investing Activities Net cash provided by investing activities during fiscal 2023 was $88.4 million as compared to net cash used of $6.0 million during fiscal 2022. The $94.4 million change is primarily reflective of the $92.2 million of net cash proceeds resulting from the Sale.

The change was driven by a paydown of accounts payable and an increase in inventory, partially offset by a decrease in accounts receivable in fiscal 2024. Investing Activities Net cash provided by investing activities during fiscal 2024 was $14.7 million as compared to $0.3 million during fiscal 2023.

Our cash decreased by $4.6 million to $5.4 million as of June 30, 2023, compared to $10.0 million as of June 30, 2022. The proceeds from the Sale were applied to pay off the Term Credit Facility and pay down the Revolver Credit Facility.

Our cash increased by $0.6 million to $6.0 million as of June 30, 2024, compared to $5.4 million as of June 30, 2023.

The increase in selling expenses during fiscal 2023 was primarily due to an increase in payroll-related costs.

The increase in selling expenses during fiscal 2024 was primarily due to additional spend on facility and vehicle rent expense and healthcare benefits. The increase in general and administrative expenses during fiscal 2024 was primarily due to an increase in severance costs, other compensation related costs and rent.

The decrease in general and administrative expenses during fiscal 2023 was primarily due to a decrease in incentive compensation expense, a $1.9 million gain on settlement related to the acquisition of Boyd Coffee Company ("Boyd"), which included the cancellation of shares of the Series A Convertible Participating Cumulative Perpetual Preferred Stock, par value $1.00 per share, of the Company ("Series A Preferred Stock") and settlement of liabilities (the "Boyd Settlement"), and a payroll tax refund which was partially offset by an increase in contract services. 22 Our capital expenditures related to continuing operations for fiscal 2023 were $13.2 million as compared to $13.6 million in fiscal 2022, a decrease of $0.4 million.

Further, the increase was impacted by the non-recurrence of a $1.9 million gain related to the settlement of the Boyd’s acquisition and payroll tax refund in fiscal 2023. Our capital expenditures related to continuing operations for fiscal 2024 were $13.8 million as compared to $13.2 million in fiscal 2023, an increase of $0.6 million.

Financing Activities Net cash used in financing activities during fiscal 2023 was $86.1 million as compared to of $17.1 million of cash provided by financing activities during fiscal 2022.

In fiscal 2024, proceeds from sale of assets was $29.8 million offset by maintenance capital expenditures of $13.8 million and a $1.2 million related to a working capital adjustment in continuing operations. Financing Activities Net cash provided by financing activities during fiscal 2024 was $10.0 thousand as compared to $86.1 million of cash used in financing activities during fiscal 2023.

For purposes of calculating EBITDA and EBITDA Margin and Adjusted EBITDA and Adjusted EBITDA Margin, we have excluded the impact of interest expense resulting from the adoption of ASU 2017-07, non-cash pretax pension and postretirement benefits resulting from the amendment and termination of certain Farmer Bros. pension and postretirement benefits plans and severance because these items are not reflective of our ongoing operating results.

“Adjusted EBITDA Margin” is defined as Adjusted EBITDA expressed as a percentage of net sales. For purposes of calculating EBITDA and EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin, we have excluded the impact of interest expense resulting from non-cash pretax pension and postretirement benefits.

Factors Affecting Our Business We have identified factors that affect our industry and business which we expect will play an important role in our future growth and profitability. Some of these factors include: • Investment in Manufacturing Facility.

(2) Includes all beverages other than roasted coffee, frozen liquid coffee, and iced and hot tea, including cappuccino, cocoa, granitas, and concentrated and ready-to-drink cold brew and iced coffee. Factors Affecting Our Business We have identified factors that affect our industry and business which we expect will play an important role in our future growth and profitability.

The increase in general and administrative expenses in fiscal 2022 was primarily due to third party costs related to several supply chain optimization initiatives, partially offset by a decrease of severance costs in the prior year period.

The increase in selling expenses during fiscal 2024 was primarily due to additional spend on facility and vehicle rent expense and healthcare benefits, partially offset by a decrease in advertising related expenses. The increase in general and administrative expenses during fiscal 2024 was primarily due to an increase in severance costs, other compensation related costs and rent.

Operating Expenses In fiscal 2022, operating expenses increased by $11.9 million, or 9%, to $139.8 million from $127.9 million, in fiscal 2021.

Operating Expenses In fiscal 2024, operating expenses increased by $0.6 million, or 0.4%, to $136.1 million, from $135.6 million, in fiscal 2023.

Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as of June 30, 2023 or June 30, 2022. Quarterly Financial Data (Unaudited) The following tables set forth certain unaudited quarterly information for each of the eight fiscal quarters in the two-year period ended June 30, 2023.

Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as of June 30, 2024 or June 30, 2023.

The expansionary capital spending reductions were driven by several key initiatives put in place, including a focus on refurbished coffee brewing equipment to drive cost savings, and reductions across some capital categories. As of June 30, 2023, the outstanding debt on our Revolver Credit Facility was $23.0 million a decrease of $40.0 million since June 30, 2022.

This was driven by an increase in maintenance capital spend on buildings and 22 facilities. As of June 30, 2024, the outstanding debt on our Revolver Credit Facility was $23.3 million, an increase of $0.3 million since June 30, 2023.

The decrease in interest expense in fiscal 2022 was principally due to lower interest rates on our new credit facility entered in April 2021, as well as a reduction in interest rate swap costs. In fiscal 2022, Other, net decreased by $11.3 million to $8.1 million compared to $19.4 million in fiscal 2021.

The decrease in interest expense in fiscal 2024 was principally due to lower supplier interest expense. In fiscal 2024, Other, net increased by $10.4 million to a $6.2 million gain compared to a $4.2 million loss in fiscal 2023.

The decrease in general and administrative expenses during fiscal 2023 was primarily due to a decrease in incentive compensation expense, a $1.9 million gain in connection with the Boyd Settlement, and a payroll tax refund which was partially offset by an increase in contract services.

Further, the increase was impacted by the non-recurrence of a $1.9 million gain related to the settlement of the Boyd’s acquisition and payroll tax refund in fiscal 2023. Total Other Income (Expense) Total other income (expense) in fiscal 2024 was $1.6 million of expense compared to $13.4 million of expense in fiscal 2023.

Removed

During fiscal 2023, we experienced lower gross margins compared to fiscal 2022, primarily resulting from higher product costs relative to fiscal 2022. Overall, gross margins decreased by 8.8% to 33.7% in fiscal 2023 from 42.5% compared to fiscal 2022. The decrease was also attributable to an increase in unfavorable production variances.

Added

Our principal office is located in Fort Worth, Texas. We operate in one business segment.

Removed

The price increases and delivery surcharges implemented across our network helped mitigate the impact of higher supply chain and product costs.

Added

Overall, gross margins increased by 5.6% to 39.3% in fiscal 2024 from 33.7% in fiscal 2023. The improvement in gross margins was a result of price increases and delivery surcharges implemented across our network.

Removed

This was driven by lower expansionary capital spend of $1.6 million in fiscal 2023 compared to fiscal 2022, offset by a $1.2 million increase in maintenance capital spend in fiscal 2023.

Added

See “ Non-GAAP Financial Measures ” below for a reconciliation of these non-GAAP measures to their corresponding GAAP measures, as well as discussion of certain changes we made to our methodology for calculating Adjusted EBITDA beginning with the period ending June 30, 2024.

Removed

See “ Non-GAAP Financial Measures ” below for a reconciliation of these non-GAAP measures to their corresponding GAAP measures. (2) Includes all beverages other than roasted coffee, frozen liquid coffee, and iced and hot tea, including cappuccino, cocoa, granitas, and concentrated and ready-to-drink cold brew and iced coffee.

Added

We continue to look for ways to deploy our personnel, systems, assets and infrastructure to create or enhance stockholder value. Areas of focus include distribution network optimization, methods of procurement, logistics, inventory management, supporting technology, and real estate assets.

Removed

The decrease in gross profit in fiscal 2023 was primarily driven by inflationary increases in materials and production costs, as well as an increase in underlying green coffee commodity prices. Operating Expenses In fiscal 2023, operating expenses decreased by $4.2 million, or 3%, to $135.6 million from $139.8 million, in fiscal 2022.

Added

The income tax expense in the current year was related primarily to state income tax.

Removed

The increase in selling expenses during fiscal 2023 was primarily due to increased headcount and other payroll-related costs and the inclusion of a one time sales tax refund in fiscal 2022.

Added

For purposes of calculating Adjusted EBITDA and Adjusted EBITDA Margin, we are also excluding the impact of severance and the loss 25 related to sale of business as these items are not reflective of our ongoing operating results.

Removed

Interest expense in fiscal 2023 increased $5.2 million to $9.2 million from $4.0 million in the prior year period. The increase in interest expense in fiscal 2023 was principally due to higher interest rates, as well as an increase in interest rate swap costs.

Removed

In fiscal 2023, Other, net decreased by $12.3 million to a $4.2 million loss compared to a $8.1 million gain in fiscal 2022. The decrease in Other, net, was primarily a result of mark-to-market net losses on coffee-related derivative instruments not designated as accounting hedges.

Removed

Income Taxes In fiscal 2023, we recorded income tax benefit of $0.3 million as compared to income tax expense of $0.1 million in fiscal 2022. Fiscal 2022 and Fiscal 2021 Net Sales Net sales in fiscal 2022 increased $52.9 million, or 20%, to $314.8 million from $261.9 million in fiscal 2021.

Removed

The increase in net sales was primarily due to the continued recovery from the impact of the COVID-19 pandemic, along with price increases and delivery surcharges implemented during fiscal 2022. 25 The following table presents the effect of changes in unit sales, unit pricing and product mix for fiscal 2022 compared to fiscal 2021 (in millions): Units Sold and Pricing For Year Ended June 30, 2022 vs 2021 % of Total Mix Change Effect of change in unit sales 5.5 10.4 % Effect of pricing and product mix changes 47.4 89.6 % Total increase in net sales 52.9 100.0 % Unit sales increased 1.8% and average unit price increased by 18.0% in fiscal 2022 as compared to the same prior year period, resulting in a net increase in net sales of 20%.

Removed

Average unit price increased during fiscal 2022 due to a mix of products sold, along with price increases and delivery surcharges implemented during fiscal 2022. There were no new product category introductions in fiscal 2022 or fiscal 2021 which had a material impact on our net sales.

Removed

Gross Profit Gross profit in fiscal 2022 increased $38.0 million, or 40%, to $133.8 million from $95.8 million in fiscal 2021. Gross margin increased 5.5% to 42.5% in fiscal 2022 from 37% in fiscal 2021. The increase in gross profit in fiscal 2022 was due to the continued recovery from COVID-19.

Removed

The increase was also attributable to a decline in our unfavorable production variances and inventory scrap write-downs due to the closure of our aged Houston, Texas plant during fiscal 2021. The price increases and delivery surcharges implemented during fiscal 2022 helped mitigate the impact of higher supply chain and product costs.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+0 added−4 removed1 unchanged

2023 filing

2024 filing

Biggest changeAt June 30, 2023, we had outstanding borrowings on our Revolver of $23.0 million and had utilized $4.0 million of the letters of credit sublimit. The weighted average interest rate on our outstanding borrowings subject to interest rate variability under the Revolver at June 30, 2023 was 6.66%.

Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk We had outstanding borrowings on our Revolver of $23.3 million and had utilized $4.1 million of the letters of credit sublimit at June 30, 2024. The weighted average interest rate on our outstanding borrowings subject to interest rate variability under the Revolver at June 30, 2024 was 7.05%.

These contracts are not included in the sensitivity analysis above as the underlying price has been fixed.

These contracts are not included in the sensitivity analysis above as the underlying price has been fixed. 30

The following table summarizes the potential impact as of June 30, 2023 to net income (loss) and AOCI from a hypothetical 10% change in coffee commodity prices.

The following table summarizes the potential impact as of June 30, 2024 to net income (loss) and AOCI from a hypothetical 10% change in coffee commodity prices.

The information provided below relates only to the coffee-related derivative instruments and does not include, when applicable, the corresponding changes in the underlying hedged items: Increase (Decrease) to Net Income Increase (Decrease) to AOCI 10% Increase in Underlying Rate 10% Decrease in Underlying Rate 10% Increase in Underlying Rate 10% Decrease in Underlying Rate (In thousands) Coffee-related derivative instruments(1) $ 378 $ (378) $ 260 $ (260) __________ (1) The Company's purchase contracts that qualify as normal purchases include green coffee purchase commitments for which the price has been locked in as of June 30, 2023.

The information provided below relates only to the coffee-related derivative instruments and does not include, when applicable, the corresponding changes in the underlying hedged items: Increase (Decrease) to Net Income Increase (Decrease) to AOCI 10% Increase in Underlying Rate 10% Decrease in Underlying Rate 10% Increase in Underlying Rate 10% Decrease in Underlying Rate (In thousands) Coffee-related derivative instruments(1) $ 11 $ (11) $ — $ — __________ (1) The Company's purchase contracts that qualify as normal purchases include green coffee purchase commitments for which the price has been locked in as of June 30, 2024.

Due to competition and market conditions, volatile price increases cannot always be passed on to our customers. See Note 5 , Derivative Instruments, of the Notes to Consolidated Financial Statements included in this Form 10‑K for further discussions of our derivative instruments.

Due to competition, market conditions and customer contractual terms, volatile price increases cannot always be passed on to our customers in a timely manner, if at all. See Note 5 , Derivative Instruments, of the Notes to Consolidated Financial Statements included in this Form 10‑K for further discussions of our derivative instruments.

The following table demonstrates the impact of interest rate changes on our annual interest expense on outstanding borrowings subject to interest rate variability under the Revolver based on the weighted average interest rate on the outstanding borrowings as of June 30, 2023: ($ in thousands) Principal Interest Rate Annual Interest Expense –150 basis points $ 23,021 5.16 % $ 1,188 –100 basis points $ 23,021 5.66 % $ 1,303 Unchanged $ 23,021 6.66 % $ 1,533 +100 basis points $ 23,021 7.66 % $ 1,763 +150 basis points $ 23,021 8.16 % $ 1,879 Commodity Price Risk We are exposed to commodity price risk arising from changes in the market price of green coffee.

The following table demonstrates the impact of interest rate changes on our annual interest expense on outstanding borrowings subject to interest rate variability under the Revolver based on the weighted average interest rate on the outstanding borrowings as of June 30, 2024: ($ in thousands) Principal Interest Rate Annual Interest Expense –150 basis points $ 23,300 5.55 % $ 1,293 –100 basis points $ 23,300 6.05 % $ 1,410 Unchanged $ 23,300 7.05 % $ 1,643 +100 basis points $ 23,300 8.05 % $ 1,876 +150 basis points $ 23,300 8.55 % $ 1,992 Commodity Price Risk We are exposed to commodity price risk arising from changes in the market price of green coffee.

Removed

Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk We historically have been exposed to market value risk arising from changes in interest rates on our securities portfolio for which we entered, from time to time, futures and options contracts, or invested in derivative instruments, to manage our interest rate risk.

Removed

Effective March 27, 2019, the Company entered into an interest rate swap to manage the interest rate risk on its floating-rate indebtedness. In connection with the Revolver Credit Facility, the Company also executed a new ISDA agreement to transfer its interest swap to Wells Fargo (“Amended Rate Swap”).

Removed

Under the terms of the Amended Rate Swap, the Company receives 1-month LIBOR, subject to a 0% floor, and makes payments based on a fixed rate of 2.4725%, an increase of 0.275% from its original interest rate swap fixed rate of 2.1975%.

Removed

The Amended Rate Swap utilizes the same notional amount of $65.0 million and maturity date of October 11, 2023 as the original interest rate swap. See Note 5 , Derivative Instruments, of the Notes to Consolidated Financial Statements included in this Form 10‑K for further discussions of our derivative instruments.

Top changes in FARMER BROTHERS CO's 2024 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 3. Legal Proceedings

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Other FARM 10-K year-over-year comparisons