Forum for Shareholders of Farmer Bros. Co.

Forum Home Page

2007 Conclusion

Forum activities relating to Farmer Bros. Co. were suspended in 2007, following the second year of new management.

Farmer Bros. Home Page


Farmer Bros. Reference


Morningstar Footnoted, September 15, 2010 article




September 15, 2010 at 9:10 am by Theo Francis

Proofreader wanted at Farmer Brothers …


We know Farmer Brothers (FARM) peddles coffee to the restaurant and cafeteria set, but it may be time to lay off the joe over there — at least while preparing the corporate filings.

Yesterday, the Torrance, California, purveyor of coffee (and related products) to institutional food-service outfits amended the 10-K it had just filed on Monday. The reason? As the 10-K/A put it in simple terms:

“This Amendment is being filed for the purpose of correcting certain typographical errors.”

As it turns out, those errors were numbers. And while they weren’t enormous, one of the line items was loss from operations. There, the company managed to reflect a profit from operations of $2.6 million in the quarter ending September 30, 2009 — when in fact the correct figure was a loss of $2.5 million. The company also overstated the loss in the quarter ended June 30 of this year by the same amount, about $5 million.

The other errors were smaller, and generally made the company’s finances look worse than they apparently are: An offsetting change in interest expense was reported as $1.5 million instead of $700,000; loss from operations for the year ended June 30 was $39.2 million, not $39.7 million; and accrued workers’ compensation liabilities were $1.35 million, not $1.66 million.

Major? Perhaps no. Unnerving? Yes. Especially given that the figures appeared in the company’s 10-K, which the auditors are supposed to give the once-over, and one of the errors was in the company’s consolidated statement of operations for the year. (The company’s auditor, for the record, is Ernst & Young. There doesn’t appear to have been any change to the company’s disclosures on internal controls, which suggests that management concluded the slip-ups weren’t all that serious in the grand scheme of things.)

We realize that typos happen — we make our share of them here at footnoted, for sure. Still, we’d recommend that Farmer Brothers find a proofreader. And maybe switch to decaf.

Image source: Theo Francis


© Copyright 2010 Morningstar, Inc.


The Forum is open to all Farmer Bros. shareholders, whether institutional or individual, and to professionals concerned with their investment decisions.  Its purpose is to provide shareholders with access to information and a free exchange of views on issues relating to their evaluations of alternatives.  As stated in the Forum's Conditions of Participation, participants are expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

There is no charge for participation.  Franklin Mutual Advisers, LLC, the manager of funds owning approximately 12.6% of Farmer Bros. shares, provided initial sponsorship for the Forum and arranged for it to be chaired by Gary Lutin.  Continuing support and guidance of the Forum is provided by an Advisory Panel of actively interested shareholders.

For additional information or to be included in an email distribution list, send an inquiry to