Farmer Bros. Co. Announces Amendment to ABL Credit Facility

Rhea-AI Summary

Farmer Bros. Co. (NASDAQ:FARM) announced an amendment to its ABL credit facility with Wells Fargo, enhancing liquidity and flexibility. The amendment increases the maximum revolver commitment from $80 million to $90 million and replaces the LIBOR interest rate benchmark with SOFR, reducing the applicable margin from 2.25% to 1.75%. CEO Deverl Maserang highlighted the importance of this additional liquidity in maintaining inventory levels amid rising commodity pressures, underscoring a commitment to quality coffee products for customers and benefits for shareholders.

Positive

• Increased liquidity with a $10 million rise in maximum revolving credit to $90 million.
• Lower interest rate margin reduced from 2.25% to 1.75%, potentially decreasing financing costs.

Negative

• None.

NORTHLAKE, Texas, Aug. 09, 2022 (GLOBE NEWSWIRE) -- Farmer Bros. Co. (NASDAQ:FARM) ( “Farmer Brothers” or the “Company”) today announced that the Company had amended (the “Amendment”) its ABL credit facility with Wells Fargo Bank, N.A., providing further flexibility and additional liquidity under its current revolving credit facility.

Among other things, the Amendment amends certain terms and conditions of the Credit Agreement, such as increasing the maximum revolver amount by $10 million to an aggregate maximum revolver commitment amount of $90 million, and reducing the interest rate by replacing the London Interbank Offered Rate (“LIBOR”) interest rate benchmark (which had an applicable margin of 2.25% for LIBOR rate loans) with the secured overnight financing rate (“SOFR”) interest rate benchmark (which has an applicable margin of 1.75% for SOFR rate loans).

Deverl Maserang, CEO of Farmer Brothers, commented, “We’re pleased to have access to this additional liquidity, which enhances our flexibility to assure adequate inventory levels in the midst of heightened commodity market and pricing pressures. Providing quality coffee and services to our customers and vendors remains our number one priority and as such, the enhancements to our credit facility provide additional support for the benefit of both customers and our shareholders.”

About Farmer Brothers

Founded in 1912, Farmer Bros. Co. is a national coffee roaster, wholesaler, and distributor of coffee, tea, and culinary products. The Company’s product lines include organic, Direct Trade, and sustainably produced coffee. With a robust line of coffee, hot and iced teas, cappuccino mixes, spices, and baking/biscuit mixes, the Company delivers extensive beverage planning services and culinary products to its U.S. based customers. The Company serves a wide variety of customers, from small independent restaurants and foodservice operators to large institutional buyers like restaurant, department and convenience store chains, hotels, casinos, healthcare facilities, and gourmet coffee houses, as well as grocery chains with private brand coffee and consumer branded coffee and tea products, and foodservice distributors.

Marketing Contact

Nathalie Oetzel
noetzel@farmerbros.com

Investor Relations Contact

Ellipsis
Jeff Majtyka & Kyle King
Investor.relations@farmerbros.com
(646) 776-0886

FAQ

What did Farmer Bros. Co. announce on August 9, 2022?

Farmer Bros. Co. announced an amendment to its ABL credit facility with Wells Fargo, increasing liquidity and flexibility.

How much did the revolving credit facility increase for Farmer Bros. Co.?

The revolving credit facility increased by $10 million, raising the total to $90 million.

What interest rate benchmark did Farmer Bros. Co. switch to?

Farmer Bros. Co. switched from the LIBOR interest rate benchmark to the secured overnight financing rate (SOFR).

What is the new applicable margin for SOFR rate loans for Farmer Bros. Co.?

The new applicable margin for SOFR rate loans is 1.75%.

Why is the credit facility amendment important for Farmer Bros. Co.?

The amendment is important as it enhances liquidity, ensuring adequate inventory levels amid rising commodity market pressures.