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What changed in FARMER BROTHERS CO's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of FARMER BROTHERS CO's 2024 and 2025 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 2025 report.

+164 added−191 removedSource: 10-K (2025-09-11) vs 10-K (2024-09-12)

Top changes in FARMER BROTHERS CO's 2025 10-K

164 paragraphs added · 191 removed · 143 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

35 edited+2 added−13 removed40 unchanged
Biggest changeWe operate a large fleet of trucks and other vehicles to distribute and deliver our products through our DSD network, and we rely on third-party logistics service providers ("3PL") for our long-haul distribution. We maintain inventory levels at each branch warehouse to promote minimal interruption in supply.
Biggest changeOur products reach our customers primarily through our nationwide DSD network of over 200 delivery routes and over 90 storage locations 4 as of June 30, 2025. We operate a large fleet of trucks and other vehicles to distribute and deliver our products through our DSD network, and we rely on third-party logistics service providers ("3PL") for our long-haul distribution.
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.
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 internally developed a market insight capability that reinforces our business-to-business positioning as a thought leader in the coffee, tea and food service industries.
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. • Project D.I.R.E.C.T. ® Program.
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 include sustainable supply chains, direct trade purchasing, training and technical assistance, recycling and composting networks, and packaging material reductions. • Project D.I.R.E.C.T. ® Program.
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.
We sell whole bean and roast and ground flavored and unflavored coffee products under the Cain's™ 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 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.
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.
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.
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. We operate in one business segment.
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.
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 Second Amended and Restated Bylaws can also be found on our website.
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 2 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.
In addition, these reports and the other documents we file with the SEC are available at a website maintained by the SEC at http://www.sec.gov.
In addition, these reports and the other documents we file with the 5 SEC are available at a website maintained by the SEC at http://www.sec.gov.
With a robust product line, including organic, Direct Trade, Project D.I.R.E.C.T. ® and other sustainably-produced coffees, iced and hot teas, cappuccino, spices, and baking/biscuit mixes, among others, we offer not only a breadth of high-quality products to our customers but also a comprehensive approach by providing value added services such as market insight, beverage planning, and equipment placement and service.
With a robust product line, including organic, Direct Trade, Project D.I.R.E.C.T. ® , Fair Trade Certified TM® and other sustainably-produced coffees, iced and hot teas, cappuccino, spices, and baking/biscuit mixes, among others, we offer not only a breadth of high-quality products to our customers but also a comprehensive approach by providing value added services such as market insight, beverage planning, and equipment placement and service.
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.
In fiscal 2025, 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.
We are not a party to any material legal proceedings arising under these regulations except as described in Note 19 , Commitments and Contingencies, of the Notes to Consolidated Financial Statements included in this Form 10‑K.
We are not a party to any material legal proceedings arising under these regulations except as described in Note 18 , Commitments and Contingencies, of the Notes to Consolidated Financial Statements included in this Form 10‑K.
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").
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, 2025 ("fiscal 2025") and June 30, 2024 ("fiscal 2024").
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.
We believe we compete well when these factors are valued by our customers, and we are less effective when only price matters. Our customer base is price sensitive, and we are often faced with price competition.
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.
We execute branch and route rationalization, optimize 1 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.
We tailor solutions to our customers' needs, helping them deliver a great experience for their customers, including by: • Offering a wide variety of sustainably sourced coffee, tea, and culinary products, thereby helping our customers achieve their sustainability goals and objectives; • Providing consumer, channel, and market insights, including ideation to support customer menu and product evaluation in line with consumer trends; • Delivering comprehensive commercial brewing equipment program support from installation to preventative maintenance to timely repair; • Providing DSD service where our trained Route Sales Representative ("RSR") orders product to keep our customers in-stock, merchandises the beverage station, rotates products, cleans and inspects equipment on-site, and performs “cup quality checks,” all to ensure a great experience for the consumer.
We tailor solutions to our customers' needs, helping them deliver a positive experience for their own customers, including by: • Offering a wide variety of sustainably sourced coffee, tea, and culinary products, thereby helping our customers achieve their sustainability goals and objectives; • Providing consumer, channel, and market insights, including ideation to support customer menu and product evaluation in line with consumer trends; • Delivering comprehensive commercial brewing equipment program support from installation to preventative maintenance to timely repair; • Providing DSD service where our trained Route Sales Representatives ("RSR") order product to keep our customers inventory in-stock, merchandises the beverage station, rotates products, cleans and inspects equipment on-site, and performs “cup quality checks,” all to ensure a positive experience for the consumer.
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 owned brand products are sold primarily into the foodservice channel. Our primary brands include Farmer Brothers ® , Sum>One, 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 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, as further explained in Note 5, Derivative Instruments, of the Notes to Consolidated Financial Statements included in this Form 10‑K.
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, vendor agreements and derivative instruments, as further explained in Note 4, Derivative Instruments, of the Notes to Consolidated Financial Statements included in this Form 10‑K.
This helps us to bring transparency to our supply chain, rank our suppliers, and also to identify opportunities to select trusted providers, cooperatives, mills, exporters, and other suppliers, when offering sustainable coffees to our customers. It also helps us deepen our understanding of greenhouse gas emissions generated upstream in our supply chain. • Supplier Sustainability.
We believe this helps us bring transparency to our supply chain, rank our suppliers, and also to identify opportunities to select trusted providers, cooperatives, mills, exporters, and other suppliers, when offering sustainable coffees to our customers. It also helps us deepen our understanding of greenhouse gas emissions generated upstream in our supply chain.
We have successfully built partnerships with leading equipment manufacturers and are invested in training our team on the latest equipment offerings to enhance our service capabilities and ability to add value. • Enhance Processes and Systems. We are implementing IT applications which we expect to enhance our supply chain optimization and flexibility.
We have built relationships with leading equipment manufacturers and are invested in training our team on the latest equipment offerings to enhance our service capabilities and ability to add value. • Enhance Processes and Systems. We are implementing IT applications which we expect will enhance our supply chain optimization and flexibility.
This model is an impact-based product or raw material sourcing framework that utilizes data-based sustainability metrics to influence an inclusive, collaborative approach to sustainability along the supply chain. To evaluate whether coffee is Project D.I.R.E.C.T . ® , we follow an outcome-based evaluation framework.
This model is an impact-based product or raw material sourcing framework that utilizes data-based sustainability metrics to influence an inclusive, collaborative approach to sustainability along the supply chain. To evaluate whether coffee is Project D.I.R.E.C.T . ® , we follow an outcome-based evaluation framework verified as responsibly sourced through Enveritas.
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.
During fiscal 2025, our top five customers accounted for approximately 3% of our net sales. Most of our customers rely on us for distribution; however, some of our customers use third-party distribution or conduct their own distribution.
We are committed to working with suppliers who share our social, environmental and economic sustainability goals. Regulatory and reputational risks can increase when suppliers are not held to the same strict standards to which we hold ourselves. To address this concern, all existing suppliers and new suppliers must acknowledge and adhere to our Supplier Standards of Engagement.
Regulatory and reputational risks can increase when suppliers are not held to the same strict standards to which we hold ourselves. To address this concern, all existing suppliers and new suppliers must acknowledge and adhere to our Supplier Standards of Engagement.
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.
Through our dedication to the craft of sourcing, blending and roasting coffee, and our participation with the Specialty Coffee Association, National Coffee Association, Coffee Quality Institute, International Women's Coffee Alliance, Alliance for Coffee Excellence, Global Coffee Platform and Pacific Coast Coffee Association, we work to help shape the future of the coffee industry.
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.
Such 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.
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.
Human Capital On June 30, 2025, we employed approximately 865 employees, 198 of whom are subject to collective bargaining agreements expiring on or before January 31, 2028. Achieving our vision of building a leading specialty products distributor and service company starts with our people.
The DSD system is central to our operational framework, and we are making significant enhancements to drive profitability, ensure customer retention and utilize our national reach to improve inventory management across our network.
The Company's nationwide direct-store-delivery ("DSD") network is central to our operational framework, and we are continuously working on enhancements to drive profitability, ensure customer retention and utilize our national reach to improve inventory management across our network.
We also sell coffee and tea products directly to consumers through our websites and sell certain products at retail and through foodservice distributors.
We maintain inventory levels at each branch warehouse to promote minimal interruption in supply. We also sell coffee and tea products directly to consumers through our websites and sell certain products at retail and through foodservice distributors.
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.
We believe our human capital management philosophy and programs align with developing and sustaining a culture that embraces our team member values of family, service and quality, collaboration, simplicity and sustainability. 3 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.
These Standards of Engagement are aligned with the United Nations Global Compact and set minimum standards for suppliers that are designed to provide Farmer Bros. visibility into all aspects of its supply chain and meets these objectives.
These Standards of Engagement set minimum standards for suppliers that are designed to provide Farmer Bros. visibility into all aspects of its supply chain and meets these objectives. Charitable Activities We view charitable involvement as a part of our corporate responsibility and sustainability model.
Rather, we purchase these coffee beans on a negotiated basis from coffee brokers, exporters and growers, including Direct Trade and Fair Trade Certified™ ® sources and Rainforest Alliance Certified™ farms. Fair Trade Certified™ ® provides an assurance that farmer groups are receiving the Fair Trade minimum price and an additional premium for certified organic products through arrangements with cooperatives.
Fair Trade Certified™ ® provides an assurance that farmer groups are receiving the Fair Trade minimum price and an additional premium for certified organic products through arrangements with cooperatives.
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.
Raw Materials and Supplies Our primary raw material is green coffee, an exchange-traded agricultural commodity that is subject to price fluctuations. 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.
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.
Additionally, we continue to invest in and improve 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 differentiate ourselves in the marketplace by providing coffee, tea, and culinary expertise, service excellence, and equipment program support.
Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.
Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year. Distribution We operate production and distribution facilities in Portland, Oregon. Distribution takes place out of the Portland facility, as well as separate distribution centers in Northlake, Illinois; Rialto, California; and Moonachie, New Jersey.
Recipient organizations include those with strong local and regional networks that ensure families have access to nutritious food.
We support the communities where our customers, team members, businesses, and suppliers call home, with an emphasis on providing and supporting supply chain stability and a focus on food security. Recipient organizations include those with strong local and regional networks that ensure families have access to nutritious food.
Removed
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.
Added
We have joined the Global Coffee platform to continue to be part of the global industry and driving responsible sourcing standards forward globally. • Supplier Sustainability. We are committed to working with suppliers who share our social, environmental and economic sustainability goals.
Removed
We differentiate ourselves in the marketplace by providing coffee, tea, and culinary expertise, service excellence, and equipment program support.
Added
We purchase green coffee beans from multiple coffee regions around the world. Some of the Arabica coffee beans we purchase do not trade directly on the commodity markets. Rather, we purchase these coffee beans on a negotiated basis from coffee brokers, exporters and growers, including Direct Trade and Fair Trade Certified™ ® sources and Rainforest Alliance Certified™ farms.
Removed
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.
Removed
We endorse and support communities where our customers, employees, businesses, and suppliers are located, and who have enthusiastically supported us over the past 100 years. Our objective is to provide support toward a mission of supply chain stability with a focus on food security.
Removed
We believe our human capital management philosophy and programs align with developing and sustaining a culture that embraces our team member values of family, service and quality, collaboration, simplicity and sustainability. We emphasize our value of family by striving for inclusive and equitable approaches in hiring practices, pay practices and team member engagement.
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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.
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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 $0.90 to $2.60.
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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.
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There can be no assurance that green coffee prices will remain at these levels in the future. Some of the Arabica coffee beans we purchase do not trade directly on the commodity markets.
Removed
Sale of Direct Ship Business On June 30, 2023, the Company completed its previously announced sale of certain assets related to its direct ship and private label business, including its production facility and corporate office building in Northlake, Texas (the “Sale”), pursuant to that certain Asset Purchase Agreement, dated as of June 6, 2023, by and between the Company and TreeHouse Foods, Inc.
Removed
(the “Buyer”), as amended by that certain Amendment to Asset Purchase Agreement, dated June 30, 2023, for a purchase price of $100 million in cash, subject to customary working capital and certain other adjustments, including a reduction for liabilities associated with a specified retained litigation matter.
Removed
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.
Removed
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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

44 edited+11 added−6 removed185 unchanged
Biggest changeManagement’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.
Biggest changeThe Credit Facility was subsequently amended on December 20, 2021, August 8, 2022, August 31, 2022, June 30, 2023 and December 4, 2023. At June 30, 2025, we had outstanding borrowings of $14.3 million and utilized $4.7 million of the letters of credit sublimit under the Credit Facility, and had $32.6 million of availability under our Credit Facility.
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 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, 9 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.
The amount of additional capital we may require, the timing of our capital needs and the availability of financing to fund those needs will depend on a number of factors, including our strategic initiatives and operating plans, the performance of our business, the number, complexity and characteristics of additional products or future manufacturing processes we require to serve new or existing markets, any material or significant product recalls, any failure or disruption with our manufacturing and co-packing partners as well as our third party logistics providers, the expansion into new markets, any changes in our regulatory or legislative landscape, particularly with respect to product safety, advertising, product labeling and data privacy, the costs associated with being a public company and the market conditions for debt or equity financing.
The amount of additional capital we may require, the timing of our capital needs and the availability of financing to fund those needs will depend on a number of factors, including our strategic initiatives and operating plans, the performance of our business, the number, complexity and characteristics of additional products or future manufacturing processes we require to serve new or existing markets, any material or significant product recalls, any failure or disruption with our manufacturing and co-packing partners as well as our third party logistics providers, the expansion into new markets, any changes in our regulatory or legislative landscape, particularly with respect to 15 product safety, advertising, product labeling and data privacy, the costs associated with being a public company and the market conditions for debt or equity financing.
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.
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.
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.
Any material interruption in our supply chain, such as material interruption of roasted coffee supply due to the casualty 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.
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.
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.
In this competitive environment, our business has been and may continue to be adversely impacted by increases in labor costs, including wages and benefits, including those increases triggered by regulatory actions regarding wages, scheduling and benefits; increased health care and workers’ compensation insurance costs; increased wages and costs of other benefits necessary to attract and retain high quality employees with the right skill sets.
In this competitive environment, our business has been and may continue to be adversely impacted by increases in labor costs, including wages and benefits, including those increases triggered by regulatory actions regarding 6 wages, scheduling and benefits; increased health care and workers’ compensation insurance costs; increased wages and costs of other benefits necessary to attract and retain high quality employees with the right skill sets.
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.
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.
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.
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 credit losses and counter-party risk which could have a material adverse effect on our results of operations.
If activist stockholder activities continue, our business could be adversely affected. For example, we have been and may continue to be required to retain the services of various professionals to advise us on activist stockholder matters, including legal, financial, and communications advisers, the costs of which may negatively impact our future financial results.
If activist stockholder activities continue, our business could be adversely affected. 16 For example, we have been and may continue to be required to retain the services of various professionals to advise us on activist stockholder matters, including legal, financial, and communications advisers, the costs of which may negatively impact our future financial results.
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.
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.
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, 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.
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.
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.
Many of the markets in which we sell our products are experiencing high levels of inflation, which may depress consumer demand for our products and reduce our profitability if we are unable to raise prices enough to keep up with increases in our costs.
Many of the markets in which we sell our products are experiencing high and rising levels of inflation, which may depress consumer demand for our products and reduce our profitability if we are unable to raise prices enough to keep up with increases in our costs.
Particularly in the U.S., there is increasing consumer awareness of health risks, including obesity, as well as increased consumer litigation based on alleged adverse health impacts of consumption of various food and beverage products.
Particularly in the U.S., there is increasing consumer awareness of health risks, including obesity, as well as increased 11 consumer litigation based on alleged adverse health impacts of consumption of various food and beverage products.
Increasing concentrations of carbon dioxide and other greenhouse gases in the atmosphere may have an adverse effect on global temperatures, weather patterns, and the frequency and severity of extreme weather events and natural disasters.
Increasing concentrations of carbon dioxide and other greenhouse gases in the atmosphere may have an adverse effect on 8 global temperatures, weather patterns, and the frequency and severity of extreme weather events and natural disasters.
Certain products are also distributed by third parties or direct shipped via common carrier. Many of these costs are beyond our control, and many are fixed rather than variable.
Certain products are 10 also distributed by third parties or direct shipped via common carrier. Many of these costs are beyond our control, and many are fixed rather than variable.
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.
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 products.
We have experienced storm-related damages and disruptions to our operations in the recent past related to both winter storms as well as heavy rainfall and flooding. Increased frequency or duration of extreme weather conditions could damage our facilities, impair production capabilities, disrupt our supply chain or impact demand for our products.
Our customers have experienced storm-related damages and we have experienced disruptions to our operations in the recent past related to both winter storms as well as heavy rainfall and flooding. Increased frequency or duration of extreme weather conditions could damage our and our customers' facilities, impair our production capabilities, disrupt our supply chain or impact demand for our products.
In addition, facility closings may trigger cash payments or previously unrecognized obligations under our defined benefit pension plans, and the cost of such liabilities may be significant or may compromise our ability to close facilities or otherwise conduct cost reduction initiatives on time and within budget.
In addition, facility closings may trigger cash payments or previously unrecognized obligations under our defined benefit pension plan, and the cost of such liabilities may be significant or may compromise our ability to close facilities or otherwise conduct cost reduction initiatives on time and within budget.
Our ability to acquire a consistent supply of green coffee at prices sufficient to meet our needs, similar to any agricultural commodity, may be impacted by, among other things, climate change, weather, natural disasters, real or perceived supply shortages, crop disease (such as coffee rust) and pests, general increase in farm inputs and costs of production, an increase in green coffee purchased and sold on a negotiated basis rather than directly on commodity markets in response to higher production costs relative to “C” market prices, speculative trading in coffee commodities, political and economic conditions or uncertainty, labor actions and shortages, foreign currency fluctuations, inflation, armed conflict in coffee producing nations, acts of terrorism, pandemics or other disease outbreaks (including the COVID-19 pandemic), government actions and trade barriers or tariffs, and the actions of producer organizations that have historically attempted to influence green coffee prices through agreements establishing export quotas or by restricting coffee supplies.
Our ability to acquire a consistent supply of green coffee at prices sufficient to meet our needs, similar to any agricultural commodity, may be impacted by, among other things, climate change, weather, natural disasters, real or perceived supply shortages, crop disease (such as coffee rust) and pests, general increase in farm inputs and costs of production, an increase in green coffee purchased and sold on a negotiated basis rather than directly on commodity markets in response to higher production costs relative to “C” market prices, speculative trading in coffee commodities, political and economic conditions or uncertainty, labor actions and shortages, foreign currency fluctuations, inflation, armed conflict in coffee producing nations, acts of terrorism, global health pandemics or other disease outbreaks, government actions and trade barriers or tariffs, and the actions of producer organizations that have historically attempted to influence green coffee prices through agreements establishing export quotas or by restricting coffee supplies.
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.
There were no intangible asset impairments during fiscal 2025 and fiscal 2024. 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.
See Note 19 , Commitments and Contingencies , of the Notes to Consolidated Financial Statements included in this Form 10‑K. Regardless of the merit of particular claims, litigation may be expensive, time-consuming, operationally disruptive and distracting to management, and could negatively affect our brand name and image and subject us to statutory penalties and costs of enforcement.
See Note 18 , Commitments and Contingencies , of the Notes to Consolidated Financial Statements included in this Form 10‑K. Regardless of 13 the merit of particular claims, litigation may be expensive, time-consuming, operationally disruptive and distracting to management, and could negatively affect our brand name and image and subject us to statutory penalties and costs of enforcement.
Loss of readily available access to water could have a material adverse effect on our business and operating results. The increasing concern over climate change also may result in more regional, federal, foreign and/or global legal and regulatory requirements to reduce or mitigate the effects of greenhouse gases.
Loss of readily available access to water could have a material adverse effect on our business and operating results. Concerns over climate change also may result in more regional, federal, foreign and/or global legal and regulatory requirements to reduce or mitigate the effects of greenhouse gases.
There is increasing concern that a gradual increase in global average temperatures due to increased concentration of carbon dioxide and other greenhouse gases in the atmosphere have caused and will continue to cause significant changes in weather patterns around the globe and an increase in the frequency and severity of extreme weather events.
There is a concern that a gradual increase in global average temperatures due to increased concentration of carbon dioxide and other greenhouse gases in the atmosphere may have caused and may continue to cause significant changes in weather patterns around the globe and an increase in the frequency and severity of extreme weather events.
Our business and results of operations have in the past been, and may continue to be, adversely affected by changes in global economic conditions including inflation, interest rates, consumer spending rates, energy availability and costs, the negative impacts caused by public health crises, such as the COVID-19 pandemic, as well as the potential impacts of geopolitical uncertainties, and the effect of governmental initiatives to manage economic conditions.
Our business and results of operations have in the past been, and may continue to be, adversely affected by changes in global economic conditions including inflation, interest rates, consumer spending rates, energy availability and costs, the negative impacts caused by public health crises, such as global health pandemics, as well as the potential impacts of geopolitical uncertainties, and the effect of governmental initiatives to manage economic conditions.
The Credit Facility contains certain customary affirmative and negative covenants and restrictions that, among other things, require the Company to satisfy certain financial covenants and restricts the Company's and its subsidiaries' ability to incur additional debt, pay dividends and make distributions, make certain investments and acquisitions, repurchase its stock and prepay certain indebtedness, create liens, enter into agreements with affiliates, modify the nature of its business, transfer and sell material assets and merge or consolidate.
The Credit Facility contains certain customary affirmative and negative covenants and restrictions that, among other things, require us to satisfy certain financial covenants and restricts our and our subsidiaries' ability to incur additional debt, pay 14 dividends and make distributions, make certain investments and acquisitions, repurchase its stock and prepay certain indebtedness, create liens, enter into agreements with affiliates, modify the nature of its business, transfer and sell material assets and merge or consolidate.
Further, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which will prohibit us from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, even if such combination is favored by a majority of stockholders, unless the business combination is approved in a prescribed manner.
Further, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which prohibits Delaware corporations from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, even if such combination is favored by a majority of stockholders, unless the business combination is approved in a prescribed manner.
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.
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 environmental, social and governance, or ESG, and sustainability expectations.
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.
As of June 30, 2025, the projected benefit obligation under our employer defined benefit pension plan 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 plan, significantly affects the net periodic benefit cost and ongoing funding requirements of the plan.
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.
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. 7 The launch and ongoing success of new brands and products is inherently uncertain, especially with regard to their appeal to consumers.
Net operating losses of $77.1 million in federal and $10.0 million of state are indefinite lived and will not expire.
Net operating losses of $74.0 million in federal and $8.8 million of state are indefinite lived and will not expire.
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.
Over the past few years, 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 and chief field operations officer.
In particular, increasing regulation of fuel emissions could substantially increase the supply chain and distribution costs associated with our products. As a result, climate change or increased concern over climate change could negatively affect our business and operations.
In particular, increasing regulation of fuel emissions could substantially increase the supply chain and distribution costs associated with our products. As a result, climate change or concerns over climate change could negatively affect our business and operations. Increased severe weather conditions may increase commodity costs, damage our facilities and disrupt our production capabilities and supply chain.
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.
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.
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 9 concerns.
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.
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.
At June 30, 2025, we had approximately $124.2 million in federal net operating loss carryforwards that will begin to expire in the tax year ending June 30, 2030 and $157.5 million in state net operating loss carryforwards that begin to expire in the tax year ending June 30, 2025.
In that case, the trading price of our common stock could decline. Risks Related to our Business and Industry Deterioration of global economic conditions, an economic recession, periods of inflation, rising interest rates, or economic uncertainty in our key markets may adversely affect customer and consumer spending, as well as demand for our products.
Risks Related to our Business and Industry Disruptions in the worldwide economy, including an economic recession, downturn periods of rising or high inflation, rising interest rates, or economic uncertainty in our key markets may adversely affect customer and consumer spending, as well as demand for our products, which could adversely affect our business, results of operations and financial condition.
In addition, if our customers or suppliers experience a security breach or system failure, their businesses could be disrupted or negatively affected, which may result in a reduction in customer orders or disruption in our supply chain, which would adversely affect our results of operations.
In addition, if our customers or suppliers experience a security breach or system failure, their businesses could be disrupted or negatively affected, which may result in a reduction in customer orders or disruption in our supply chain, which would adversely affect our results of operations. 17 Failure to prevent the unauthorized access, use, theft or destruction of personal, financial and other confidential information relating to our customers, suppliers, employees or our Company, could damage our business reputation, negatively affect our results of operations, and expose us to potential liability.
We are subject to new and changing privacy and information security laws and standards that may require significant investments in technology and new operational processes. The use of electronic payment methods and collection of other personal information exposes us to increased risk of privacy and/or security breaches.
The use of electronic payment methods and collection of other personal information exposes us to increased risk of privacy and/or security breaches.
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 may incur significant indebtedness in the future, including through additional borrowings under the Credit Facility, through the issuance of debt securities, or otherwise.
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 discussion under Item 7.
We maintain a 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 discussion under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity, Capital Resources and Financial Condition below for additional details).
This 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.
There can be no assurance that we will not be subject to allegations or claims with respect to ESG issues or our sustainability goals and objectives. 12 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.
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.
We may explore sales of our assets, and such divestitures may introduce significant risks and uncertainties. We may engage in divestitures in the future. Divestitures involve significant risks and uncertainties that could adversely affect our business, consolidated financial position and consolidated results of operations.
Removed
Unfavorable economic conditions may lead customers and consumers to delay or reduce purchases of our products and could present challenges in collecting our account receivables on a timely basis.
Added
In that case, the trading price of our common stock could decline.
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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.
Added
Political environments may create uncertainty with respect to, and could result in additional changes in, legislation, regulation, international relations and government policy, or could result in possible civil unrest or other disturbances. For example, the current U.S. presidential administration announced the implementation of significant new tariffs on foreign imported goods, certain of which recently went into effect.
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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.
Added
In response to the U.S. tariffs, various jurisdictions, including China, Canada and the EU, have announced plans for their own tariffs on American products.
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The launch and ongoing success of new brands and products is inherently uncertain, especially with regard to their appeal to consumers.
Added
If such increased or additional tariffs or other restrictions, quotas, embargoes, or safeguards are placed on goods imported into the United States, or any related counter-measures are taken by other countries, we may have to raise our prices or increase inventory levels, or find new sources of supply for raw materials (including green coffee) that we import.
Removed
Increased severe weather conditions, including those resulting from climate change, may increase commodity costs, damage our facilities and disrupt our production capabilities and supply chain.
Added
There is no assurance that we would be able to pass on any cost increases, in full or at all, any of which could materially affect our revenue, gross margin and results of operations.
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Failure to prevent the unauthorized access, use, theft or destruction of personal, financial and other confidential information relating to our customers, suppliers, employees or our Company, could damage our business reputation, negatively affect our results of operations, and expose us to potential liability. The protection of our customer, supplier, employee, and Company data and confidential information is critical.
Added
We cannot predict future trade policy and regulations in the United States and other countries, the terms of any renegotiated trade agreements or treaties, or tariffs and their impact on our business. A trade war could have a significant adverse effect on world trade and the world economy.
Added
To the extent that trade tariffs and other restrictions imposed by the United States or other countries increase the price of, or limit the amount of, our products or raw materials used in our products (including green coffee) imported into the United States or other countries, or create adverse tax consequences, the sales, cost or gross margin of our products may be adversely affected and the demand from our customers for products may be diminished.
Added
Uncertainty surrounding international trade policy and regulations as well as disputes and protectionist measures could also have an adverse effect on consumer confidence and spending and negatively affect demand for our products. We depend on the expertise of key personnel to operate our business.
Added
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.
Added
This rapidly changing environment may result in increased general and administrative expenses. There has also been a recent increase in litigation and investor activism surrounding ESG practices and related disclosures. For example, there has been recent focus by regulators, investors and other stakeholders on greenwashing and sustainability-related claims.
Added
The protection of our customer, supplier, employee, and Company data and confidential information is critical. We are subject to new and changing privacy and information security laws and standards that may require significant investments in technology and new operational processes.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Director of Infrastructure & Security and the Vice President of Information Technology each remain informed of and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents and risks, including through their regular review of reports prepared by the Company’s Information Security team and the measures implemented by the Company to identify and mitigate cybersecurity risks and related threats. 19 Board of Directors Our Board of Directors oversees our Enterprise Risk Management program, and cybersecurity risks are monitored as a part of the broader program.
Biggest changeThe Director of Infrastructure & Security and the Vice President of Information Technology each remain informed of and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents and risks, including through their regular review of reports prepared by the Company’s Information Security team and the measures implemented by the Company to identify and mitigate cybersecurity risks and related threats.
Despite these efforts, no system is impenetrable, and we cannot provide assurances that we will timely identify or prevent every cybersecurity attack or incident. Risk Management and Strategy We have established processes for assessing, identifying, and managing material risks from cybersecurity threats and have integrated these cybersecurity processes into our overall risk management system.
Despite these efforts, no system is impenetrable, and we cannot provide assurances that we will timely identify or prevent every cybersecurity attack or incident. 18 Risk Management and Strategy We have established processes for assessing, identifying, and managing material risks from cybersecurity threats and have integrated these cybersecurity processes into our overall risk management system.
In addition to the regular updates to the Technology Liaison, we have protocols by which certain cybersecurity incidents and threats are escalated within the Company and, where appropriate, reported in a timely manner to the Board and Technology Liaison.
In addition to the regular updates to the Technology Liaison, we have protocols by which 19 certain cybersecurity incidents and threats are escalated within the Company and, where appropriate, reported in a timely manner to the Board and Technology Liaison.
The Board of Directors as a whole, or through the Technology Liaison, regularly reviews the measures implemented by the Company to identify and mitigate data protection and cybersecurity risks.
The Board as a whole, or through the Technology Liaison, regularly reviews the measures implemented by the Company to identify and mitigate data protection and cybersecurity risks.
Added
Board of Directors Our Board of Directors (the "Board") oversees our Enterprise Risk Management program, and cybersecurity risks are monitored as a part of the broader program.

Item 2. Properties

Properties — owned and leased real estate

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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.
Biggest changeProperties Our production and distribution facilities as of June 30, 2025 are as follows: Location Approximate Area (Square Feet) Purpose Status Fort Worth, TX 25,000 Corporate headquarters and product development lab Leased Portland, OR 220,000 Manufacturing and distribution, product development lab Leased Oklahoma City, OK 81,105 Equipment repair center Leased Rialto, CA 156,586 Distribution and warehouse Leased Northlake, IL 89,837 Distribution and warehouse Leased Moonachie, NJ 41,404 Distribution and warehouse Leased As of June 30, 2025, we stage our products in over 90 storage locations throughout the contiguous United States.
These branch warehouses and our distribution centers, taken together, represent a vital part of our business, but no individual branch warehouse is material to the business as a whole. Our stand-alone branch warehouses vary in size from approximately 1,000 to 34,000 square feet.
These branch warehouses and our distribution centers, taken together, represent a vital part of our business, but no individual branch warehouse is material to the business as a whole. Our stand-alone branch warehouses vary in size from approximately 1,000 to 25,000 square feet.
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.
Utilization rates for our coffee roasting facilities were approximately 43% and 67% during fiscal 2025 and 2024, respectively. We believe that our existing facilities provide adequate capacity for our current operations.
Approximately 81% of our facilities are leased with a variety of expiration dates within the range of 2024 through 2030.
Approximately 86% of our facilities are leased with a variety of expiration dates within the range of 2025 through 2032.

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 4. Mine Safety Disclosures Not applicable. PART II
Biggest changeItem 3. Legal Proceedings For information regarding legal proceedings in which we are involved, see Note 18 , 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 4. Mine Safety Disclosures Not applicable. PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. Mine Safety Disclosures 20 PART II ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 20 ITEM 6. Reserved 21 ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 22 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 30 ITEM 8.
Biggest changeITEM 4. Mine Safety Disclosures 20 PART II ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 20 ITEM 6. Reserved 20 ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 21 ITEM 8. Financial Statements and Supplementary Data 28 ITEM 9.
Financial Statements and Supplementary Data 31 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 31 ITEM 9A. Controls and Procedures 31 ITEM 9B. Other Information 31
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 28 ITEM 9A. Controls and Procedures 28 ITEM 9B. Other Information 29

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to pay cash dividends in the foreseeable future.
Biggest changeWe intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to pay cash dividends in the foreseeable future. Purchases of Equity Securities Neither we, nor any affiliated purchaser, purchased any of our equity securities during the quarter ended June 30, 2025.
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.
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.
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.
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 2, 2025, there were approximately 176 shareholders of record of common stock.
Sale of Unregistered Securities We did not sell unregistered securities during fiscal 2024.
Sale of Unregistered Securities We did not sell unregistered securities during fiscal 2025.
Removed
Performance Graph The following graph depicts a comparison of the total cumulative stockholder return on our common stock for each of the last five fiscal years relative to the performance of the Russell 2000 Index and a peer group index. Companies in the Russell 2000 and peer group index are weighted by market capitalization.
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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.
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Because 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..
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The historical stock price performance of the Company’s common stock shown in the performance graph below is not necessarily indicative of future stock price performance. The Russell 2000 Index and the peer group index are included for comparative purposes only.
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They do not necessarily reflect management's opinion that such indices are an appropriate measure for the relative performance of the stock involved, and they are not intended to forecast or be indicative of possible future performance of our common stock.
Removed
The material in this performance graph is not soliciting material, is not deemed filed with the SEC, and is not incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act, whether made on, before or after the date of this filing and irrespective of any general incorporation language in such filing.
Removed
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.
Removed
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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Biggest changeFinancial 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.
Biggest changeOur cash increased by $1.0 million to $7.0 million as of June 30, 2025, compared to $6.0 million as of June 30, 2024. 21 Financial Data Highlights (in thousands, except per share data and percentages) For The Years Ended June 30, 2025 vs 2024 2025 2024 Favorable (Unfavorable) Change % Change Income Statement Data: Net sales $ 342,281 $ 341,094 $ 1,187 0.3 % Gross margin 43.5 % 39.3 % 4.2 % 10.7 % Operating expenses as a % of sales 43.9 % 39.9 % (4.0) % (10.0) % Net loss $ (14,516) $ (3,875) $ (10,641) NM Net loss available to common stockholders per common share—basic and diluted $ (0.68) $ (0.19) $ (0.49) NM Operating Data: Coffee pounds 19,984 22,169 (2,185) (9.9) % EBITDA(1) $ (381) $ 10,718 $ (11,099) (103.6) % EBITDA Margin(1) (0.1) % 3.1 % (3.2) % NM Adjusted EBITDA(1) $ 14,832 $ 558 $ 14,274 NM Adjusted EBITDA Margin(1) 4.3 % 0.2 % 4.1 % NM Percentage of Total Net Sales By Product Category Coffee (Roasted) 48.1 % 46.4 % 1.7 % 3.7 % Tea & Other Beverages (2) 27.0 % 26.4 % 0.6 % 2.3 % Culinary 17.6 % 19.3 % (1.7) % (8.8) % Spices 6.0 % 6.4 % (0.4) % (6.3) % Delivery Surcharge 1.3 % 1.5 % (0.2) % NM Net sales 100.0 % 100.0 % Other data: Total capital expenditures 9,591 13,843 4,252 30.7 % Depreciation & amortization expense 11,448 11,588 140 1.2 % ________________ NM - Not Meaningful (1) EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures.
We offer a comprehensive approach to our customers by providing not only a breadth of high-quality products, but also value added services such as market insight, beverage planning, and equipment placement and service. We operate a production facility in Portland, Oregon.
We offer a comprehensive approach to our customers by providing not only a breadth of high-quality products, but also value added services such as market insight, beverage planning, and equipment placement and service. We operate a production and distribution facility in Portland, Oregon.
These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense).
These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses) and the age and 24 book depreciation of facilities and equipment (affecting relative depreciation expense).
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.
For purposes of calculating Adjusted EBITDA and Adjusted EBITDA Margin, we are also excluding the impact of severance and the loss related to sale of business as these items are not reflective of our ongoing operating results.
The yield curve considers pricing and yield information for high quality bonds with maturities matched to estimated payouts of future pension benefits. • Expected long-term rate of return on plan assets .
The yield curve considers pricing and yield information for high quality bonds with maturities matched to estimated payouts of future pension benefits. 27 • Expected long-term rate of return on plan 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. 23 • 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. • Demographic and Channel Trends.
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.
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 net loss operations excluding the impact of: • income tax expense (benefit); • interest expense; and • depreciation and amortization expense.
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.
Average unit price increased during fiscal 2025 due to a mix of products sold, along with price increases implemented during fiscal 2025. There were no new product category introductions in fiscal 2025 or fiscal 2024 which had a material impact on our net sales.
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.
Non-compliance with one or more of the covenants and restrictions could result in the full or partial principal balance of 25 the Credit Facility becoming immediately due and payable and termination of the commitments. As of and through June 30, 2025, we were in compliance with all of the covenants under the Credit Facility.
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.
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, 2025, we had $6.8 million of unrestricted cash and cash equivalents.
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.
The results of operations for fiscal 2025 and fiscal 2024 are not necessarily indicative of the results that may be expected for any future period.
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.
Summary Overview of Fiscal 2025 Results Net sales in fiscal 2025 increased $1.2 million, or 0.3%, to $342.3 million from $341.1 million in fiscal 2024. 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 2025, we experienced higher gross margins compared to fiscal 2024.
Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as of June 30, 2024 or June 30, 2023.
Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as of June 30, 2025 or June 30, 2024.
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").
This discussion, which presents our results for fiscal 2025 and fiscal 2024, 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, 2024, as amended by that certain Amendment No. 1 to Form 10-K, filed with the SEC on October 25, 2024, which provides additional information on our results for fiscal 2024.
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. This calculation is for continuing operations only.
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.
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.
The decrease 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 2025, we recorded income tax expense of $0.1 million as compared to income tax expense of $14.0 thousand in fiscal 2024.
The Credit Facility provides us with increased flexibility to proactively manage our liquidity and working capital, while maintaining compliance with our debt financial covenants, and preserving financial liquidity to mitigate the impact of the uncertain business environment and continue to execute on key strategic initiatives. Pursuant to an International Swap Dealers Association, Inc.
The Credit Facility provides us with increased flexibility to proactively manage our liquidity and working capital, while maintaining compliance with our debt financial covenants, and preserving financial liquidity to mitigate the impact of the uncertain business environment and continue to execute on key strategic initiatives.
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%.
The following table presents the effect of changes in unit sales, unit pricing and product mix for fiscal 2025 compared to fiscal 2024 (in millions): Units Sold and Pricing For Year Ended June 30, 2025 vs 2024 % of Total Mix Change Effect of change in unit sales (47.4) (4.0) % Effect of pricing and product mix changes 48.6 4.0 % Total increase in net sales 1.2 — % Unit sales decreased 12.3% and average unit price increased by 14.5% in fiscal 2025 as compared to the same prior year period, resulting in a net increase in net sales of 0.3%.
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.
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 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.
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 $ (49) $ 2,656 50 basis points increase in discount rate $ 43 $ (2,438) 50 basis points decrease in expected rate of return on assets $ 213 N/A 50 basis points increase in expected rate of return on assets $ (213) N/A See Note 11 , Employee Benefit Plans, of the Notes to Consolidated Financial Statements included in this Form 10‑K for further discussions of our various pension plans.
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.
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 over 200 delivery routes and over 90 storage locations as of June 30, 2025.
“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.
“Adjusted EBITDA” is defined as net loss 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; • pension settlement charge; • strategic initiatives; and • loss related to sale of business.
(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.
(3) Cost related to Strategic Initiative of the Company Liquidity, Capital Resources and Financial Condition The following table summarizes the Company’s debt obligations, excluding unamortized deferred debt financing costs: June 30, 2025 June 30, 2024 (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 $ 14,300 6.48 % $ 23,300 7.05 % 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.
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.
At June 30, 2025, we had outstanding borrowings of $14.3 million and utilized $4.7 million of the letters of credit sublimit under the Credit Facility, and had $32.6 million of availability under our Credit Facility. Liquidity We generally finance our operations through cash flows from operations and borrowings under our Credit Facility.
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.
The decrease in selling expenses during fiscal 2025 was primarily due to decreased spend on facility and healthcare benefits, partially offset by an increase in rent related expenses. The decrease in general and administrative expenses during fiscal 2025 was primarily due to a decrease in consulting related costs and rent.
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.
Capital Expenditures For fiscal 2025 and fiscal 2024 our capital expenditures paid were $9.6 million and $13.8 million, respectively. In fiscal 2026, 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.
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.
Operating expenses increased by $14.2 million in fiscal 2025 over the prior year period due to a $20.2 million decrease in gain on sale of assets from the sale of branch properties and other assets compared to prior year offset by a $3.6 million decrease in selling expenses and a $2.4 million decrease in general and administrative expenses .
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 interest expense in fiscal 2025 was principally due to lower supplier interest expense. In fiscal 2025, Other, net decreased by $3.9 million to a $2.3 million gain compared to a $6.2 million gain in fiscal 2024.
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.
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.
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.
Overall, gross margins increased by 4.2% to 43.5% in fiscal 2025 from 39.3% in fiscal 2024. The improvement in gross margins was a result of price increases implemented across our network.
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.
Set forth below is a reconciliation of net loss to EBITDA (non-GAAP): For the Year Ended June 30, (In thousands) 2025 2024 Net loss $ (14,516) $ (3,875) Income tax expense 116 14 Interest expense (1) 2,571 2,991 Depreciation and amortization expense 11,448 11,588 EBITDA $ (381) $ 10,718 EBITDA Margin (0.1) % 3.1 % ____________ (1) Excludes interest expense related to pension plans and postretirement benefits.
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 change in total other income (expense) in fiscal 2025 was primarily a result of a charges related to pension settlement and losses from coffee-related derivative instruments in fiscal 2025. Interest expense in fiscal 2025 decreased $0.4 million to $7.5 million from $7.8 million in the prior year period.
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.
Set forth below is a reconciliation of net loss to Adjusted EBITDA (non-GAAP): Year Ended June 30, (In thousands) 2025 2024 Net loss $ (14,516) $ (3,875) Income tax expense 116 14 Interest expense (1) 2,571 2,991 Depreciation and amortization expense 11,448 11,588 401(k) and share-based compensation expense 1,999 3,762 Net losses (gains) on disposal of assets 2,547 (18,091) Pension settlement charge 7,726 — Loss related to sale of business (2) 800 1,214 Severance costs 1,882 2,955 Strategic initiative costs (3) 259 — Adjusted EBITDA $ 14,832 $ 558 Adjusted EBITDA Margin 4.3 % 0.2 % ________ (1) Excludes interest expense related to pension plans and postretirement benefits.
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.
Gross Profit Gross profit in fiscal 2025 increased $15.0 million, or 11.2%, to $148.9 million from $133.9 million in fiscal 2024. Gross margin increased by 4.2% to 43.5% in fiscal 2025 from 39.3% in fiscal 2024. The increase in gross profit in fiscal 2025 was primarily driven by improved pricing.
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.
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 price and availability of green coffee directly impacts our results of operations. For additional details, see Risk Factors in Part I, Item 1A of this Form 10-K. • Hedging Strategy. We are exposed to market risk of losses due to changes in coffee commodity prices.
Our primary raw material is green coffee, an exchange-traded agricultural commodity that is subject to price fluctuations and regulatory changes such as tariffs. The price and availability of green coffee directly impacts our results of operations. For additional details, see Risk Factors in Part I, Item 1A of this Form 10-K. • Coffee Sourcing and Hedging Strategy.
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.
The change was driven by a decrease in inventory and increased margin percentage in fiscal 2025. Investing Activities Net cash used in investing activities during fiscal 2025 was $5.9 million as compared to net cash provided by investing activities of $14.7 million during fiscal 2024.
With Revive, we offer our customers a comprehensive equipment program and 24/7 nationwide equipment service which we believe differentiates us in the marketplace. We offer a full spectrum of equipment needs, which includes brewing equipment installation, water filtration systems, equipment training, and maintenance services to ensure we are able to meet our customer’s demands.
We offer a full spectrum of equipment needs, which includes brewing equipment installation, water filtration systems, equipment training, and maintenance services to ensure we are able to meet our customer’s demands. Results of Operations The following table sets forth information regarding our consolidated results of operations for fiscal 2025 and fiscal 2024.
The results of operations and the related discussions below focus on the Company’s continuing operations for each period. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors.
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. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors.
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.
Cash Flows The significant captions and amounts from our consolidated statements of cash flows are summarized below: For the Years Ended June 30, 2025 2024 Consolidated Statements of cash flows data (in thousands) Net cash provided by (used in) operating activities $ 16,097 (14,147) Net cash (used in) provided by investing activities (5,902) 14,723 Net cash (used in) provided by financing activities (9,226) 10 Net increase in cash and cash equivalents $ 969 $ 586 Operating Activities Net cash provided by operating activities in fiscal 2025 increased $30.2 million as compared to fiscal 2024.
For 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.
For the Years Ended June 30, 2025 vs 2024 2025 2024 Favorable (Unfavorable) Change % Change Net sales $ 342,281 $ 341,094 $ 1,187 0.3 % Cost of goods sold 193,371 207,201 13,830 6.7 % Gross profit 148,910 133,893 15,017 11.2 % Selling expenses 107,749 111,371 3,622 3.3 % General and administrative expenses 39,275 41,649 2,374 5.7 % Net losses (gains) on disposal of assets 3,347 (16,877) (20,224) NM Operating expenses 150,371 136,143 (14,228) (10.5) % Loss from operations (1,461) (2,250) 789 35.1 % Other (expense) income: Interest expense (7,480) (7,835) 355 4.5 % Pension settlement charge (7,726) — (7,726) — % Other, net 2,267 6,224 (3,957) NM Total other expense (12,939) (1,611) (11,328) (703.2) % Loss from operations before taxes (14,400) (3,861) (10,539) (273.0) % Income tax expense 116 14 (102) (728.6) % Net loss $ (14,516) $ (3,875) $ (10,641) (274.6) % _____________ NM - Not Meaningful Fiscal 2025 and Fiscal 2024 Net Sales Net sales in fiscal 2025 increased $1.2 million, or 0.3%, to $342.3 million from $341.1 million in fiscal 2024.
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.
Our capital expenditures for fiscal 2025 were $9.6 million as compared to $13.8 million in fiscal 2024, a decrease of $4.3 million. This was driven by a decrease in coffee brewing equipment spend. As of June 30, 2025, the outstanding debt on our Revolver Credit Facility was $14.3 million, a decrease of $9.0 million since June 30, 2024.
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.
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. Material changes in pension costs may occur in the future due to changes in these assumptions.
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 derivative instruments, as further explained in Note 5 , Derivative Instruments , of the Notes to Consolidated Financial Statements included in this Form 10‑K. • Coffee Brewing Equipment Service & Restoration ("Revive") .
The impact of derivative instruments is further explained in Note 4 , Derivative Instruments , of the Notes to Consolidated Financial Statements included in this Form 10‑K. • Coffee Brewing Equipment Service & Restoration ("Revive") . With Revive, we offer our customers a comprehensive equipment program and 24/7 nationwide equipment service which we believe differentiates us in the marketplace.
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.
Net loss from disposal of assets was $3.3 million in fiscal 2025 compared to a net gain from disposal of assets of $16.9 million in fiscal 2024 The decrease in selling expenses during fiscal 2025 was primarily due to decreased spend on facility and healthcare benefits, partially offset by an increase in rent related expenses.
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.
Operating Expenses In fiscal 2025, operating expenses increased by $14.3 million, or 10.5%, to $150.4 million, from $136.1 million, in fiscal 2024. The change was primarily due to a $3.6 million decrease in selling expenses and a $2.4 million decrease in general and 23 administrative expenses.
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.
The decrease in general and administrative expenses during fiscal 2025 was primarily due to a decrease in consulting related costs and rent. Total Other Income (Expense) Total other income (expense) in fiscal 2025 was $12.9 million of expense compared to $1.6 million of expense in fiscal 2024.
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.
Financing Activities Net cash used in financing activities during fiscal 2025 was $9.2 million as compared to $10.0 thousand of cash provided by financing activities during fiscal 2024. The Revolver Credit Facility decreased to $14.3 million as of June 30, 2024 with $9.0 million of net paydowns on the Revolver Credit Facility in fiscal 2025.
The income tax expense in the current year was related primarily to state income tax.
The income tax expense primarily relates to the Hourly Employees' Plan and Death Benefit settlement and state income tax.
Removed
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.
Added
We are exposed to market risk of losses due to changes in coffee commodity prices. 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 strategic vendor pricing and derivative instruments when 22 appropriate.
Removed
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.
Added
(2) Result related to the divestiture of Direct Ship business which includes the impact of working capital and other adjustments.
Removed
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.
Added
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.
Removed
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.
Added
In fiscal 2025, proceeds from sale of assets was $4.5 million offset by capital expenditures of $9.6 million. In fiscal 2024, proceeds from sale of assets was $29.8 million offset by capital expenditures of $13.8 million.
Removed
Results of Operations The following table sets forth information regarding our consolidated results of operations for fiscal 2024 and fiscal 2023.
Added
Depreciation and amortization expense was $11.4 million and $11.6 million in fiscal 2025 and 2024, respectively.
Removed
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.
Added
Settlement Agreement On June 30, 2023, the Company completed its previously announced sale of certain assets related to its direct ship and private label business, including its production facility and corporate office building in Northlake, Texas (the “Sale”), pursuant to that certain Asset Purchase Agreement, dated as of June 6, 2023, by and between the Company and TreeHouse Foods, Inc.
Removed
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.
Added
(the “Buyer”), as amended by that certain Amendment to Asset Purchase Agreement, dated June 30, 2023. The Company and 26 the Buyer executed a Settlement Agreement and Release (the “Settlement Agreement”) related to the Asset Purchase Agreement, effective March 27, 2025, pursuant to which the Company agreed to pay Buyer an amount equal to $0.8 million.
Removed
(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.
Removed
Master Agreement (“ISDA”) effective March 20, 2019, the Company on March 27, 2019, entered into a swap transaction utilizing a notional amount of $80.0 million, with an effective date of April 11, 2019 and a maturity date of October 11, 2023 (the “Original Rate Swap”). In December 2019, the Company amended the notional amount to $65.0 million.
Removed
The Original Rate Swap was intended to manage the Company’s interest rate risk on its floating-rate indebtedness under the Company's prior revolving credit facility. Under the terms of the Original Rate Swap, the Company received 1-month LIBOR, subject to a 0% floor, and made payments based on a fixed rate of 2.1975%.
Removed
The Company’s obligations under the ISDA were secured by the collateral which secures the loans under the prior revolving credit facility on a pari passu and pro rata basis with the principal of such loans. On May 16, 2023, the Company settled the Original Rate Swap. The net settlement of the Original Rate Swap was a $13 thousand loss.
Removed
There is no remaining balance frozen in AOCI as of June 30, 2023. See Note 5 , Derivative Instruments , of the Notes to Consolidated Financial Statements included in this Form 10‑K, for details.
Removed
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. The Revolver Credit Facility remained at $23.3 million as of June 30, 2024.
Removed
Contractual Obligations, Commitments and Contingencies Our principal sources of liquidity are our existing cash and cash equivalents, cash generated from our operations and borrowing capacity currently available under our Credit Facility. We generally finance our obligations through cash flows from operations and borrowings under our Credit Facility.
Removed
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.
Removed
At June 30, 2024, we had $27.8 million of availability under our Credit Facility.
Removed
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.
Removed
(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, 2024.
Removed
Amounts shown in the table above: (a) include all coffee purchase contracts that the Company considers to be from normal purchases; and (b) do not include amounts related to derivative instruments that are recorded at fair value on the Company’s consolidated balance sheets.
Removed
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.
Removed
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.

Other FARM 10-K year-over-year comparisons