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Forum Report: Farmer Bros. Filing of 10-K Annual Report

(September 13, 2005)

Sent: Tuesday, September 13, 2005 6:17 PM
Subject: Farmer Bros. filing of 10-K annual report

Farmer Bros. filed is Form 10-K annual report with the SEC late this afternoon.  Following are some of the facts noted in a quick initial review:
1.    Sales increased 2% over the prior year, but the company reported a net loss of $5.4 million for the year, with a $6.6 loss from operations.  The components of "other" income and expense included a $16.8 million realized loss from coffee trading, essentially offset by investment income, other trading profits and tax credits.
2.    Cash and investment securities aggregating $181 million continued to constitute a majority -- 57.4% -- of the company's total assets.  Nothing was found in the report concerning management's intention to register as an investment company pursuant to the Investment Company Act of 1940.
3.    Management has not yet completed the "multiyear" management information systems project after spending $14 million, but now expects to complete in 2006 at a cost of another $4 million.
The financial statement's footnote summarizing quarterly performance for the past two years is copied below.
Your comments will be welcomed.
Gary Lutin
Lutin & Company
575 Madison Avenue, 10th Floor
New York, New York 10022
Tel: 212-605-0335
Fax: 212-605-0325

Quarterly summary from Form 10-K annual report of Farmer Bros. filed 9/13/05:

Note 12 Quarterly Financial Data (Unaudited)

(In thousands except per share data; all per share disclosures have been split



                          September 30  December 31    March 31      June 30

                              2004          2004         2005         2005


Net sales                      $46,708       $51,220      $50,271      $50,221

Gross profit                   $29,239       $30,298      $29,343      $26,576

Income (loss) from operations   $1,002          $699      ($2,167)     ($6,117)

Net income (loss)               $1,497       ($4,068)        $856      ($3,712)

Net income per common shares     $0.11        ($0.30)       $0.06       ($0.27)


                          September 30  December 31    March 31      June 30

                              2003          2003         2004         2004


Net sales                      $45,665       $51,511      $49,069      $47,345

Gross profit                   $29,632       $32,573      $30,581      $29,398

Income (loss) from operations   $1,057        $3,124         $743      ($1,161)

Net income                      $2,511        $2,565       $5,603       $2,008

Net income per common shares     $0.14         $0.15        $0.42        $0.15




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