FARMER BROTHERS CO false Q3 2023 0000034563 6/30 0000034563 2022-07-01 2023-03-31 0000034563 2023-05-02 xbrli:shares 0000034563 2023-03-31 iso4217:USD 0000034563 2022-06-30 iso4217:USD xbrli:shares 0000034563 us-gaap:PreferredClassAMember 2023-03-31 0000034563 us-gaap:PreferredClassAMember 2022-06-30 0000034563 2023-01-01 2023-03-31 0000034563 2022-01-01 2022-03-31 0000034563 2021-07-01 2022-03-31 0000034563 us-gaap:PreferredStockMember 2022-06-30 0000034563 us-gaap:CommonStockMember 2022-06-30 0000034563 us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0000034563 us-gaap:RetainedEarningsMember 2022-06-30 0000034563 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-06-30 0000034563 us-gaap:RetainedEarningsMember 2022-07-01 2022-09-30 0000034563 2022-07-01 2022-09-30 0000034563 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-07-01 2022-09-30 0000034563 us-gaap:CommonStockMember 2022-07-01 2022-09-30 0000034563 us-gaap:AdditionalPaidInCapitalMember 2022-07-01 2022-09-30 0000034563 us-gaap:PreferredStockMember 2022-07-01 2022-09-30 0000034563 us-gaap:PreferredStockMember 2022-09-30 0000034563 us-gaap:CommonStockMember 2022-09-30 0000034563 us-gaap:AdditionalPaidInCapitalMember 2022-09-30 0000034563 us-gaap:RetainedEarningsMember 2022-09-30 0000034563 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-09-30 0000034563 2022-09-30 0000034563 us-gaap:RetainedEarningsMember 2022-10-01 2022-12-31 0000034563 2022-10-01 2022-12-31 0000034563 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-10-01 2022-12-31 0000034563 us-gaap:CommonStockMember 2022-10-01 2022-12-31 0000034563 us-gaap:AdditionalPaidInCapitalMember 2022-10-01 2022-12-31 0000034563 us-gaap:PreferredStockMember 2022-12-31 0000034563 us-gaap:CommonStockMember 2022-12-31 0000034563 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0000034563 us-gaap:RetainedEarningsMember 2022-12-31 0000034563 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-12-31 0000034563 2022-12-31 0000034563 us-gaap:RetainedEarningsMember 2023-01-01 2023-03-31 0000034563 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-01-01 2023-03-31 0000034563 us-gaap:CommonStockMember 2023-01-01 2023-03-31 0000034563 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-03-31 0000034563 us-gaap:PreferredStockMember 2023-03-31 0000034563 us-gaap:CommonStockMember 2023-03-31 0000034563 us-gaap:AdditionalPaidInCapitalMember 2023-03-31 0000034563 us-gaap:RetainedEarningsMember 2023-03-31 0000034563 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-03-31 0000034563 us-gaap:PreferredStockMember 2021-06-30 0000034563 us-gaap:CommonStockMember 2021-06-30 0000034563 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0000034563 us-gaap:RetainedEarningsMember 2021-06-30 0000034563 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-06-30 0000034563 2021-06-30 0000034563 us-gaap:RetainedEarningsMember 2021-07-01 2021-09-30 0000034563 2021-07-01 2021-09-30 0000034563 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-07-01 2021-09-30 0000034563 us-gaap:CommonStockMember 2021-07-01 2021-09-30 0000034563 us-gaap:AdditionalPaidInCapitalMember 2021-07-01 2021-09-30 0000034563 us-gaap:PreferredStockMember 2021-09-30 0000034563 us-gaap:CommonStockMember 2021-09-30 0000034563 us-gaap:AdditionalPaidInCapitalMember 2021-09-30 0000034563 us-gaap:RetainedEarningsMember 2021-09-30 0000034563 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-09-30 0000034563 2021-09-30 0000034563 us-gaap:RetainedEarningsMember 2021-10-01 2021-12-31 0000034563 2021-10-01 2021-12-31 0000034563 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-10-01 2021-12-31 0000034563 us-gaap:CommonStockMember 2021-10-01 2021-12-31 0000034563 us-gaap:AdditionalPaidInCapitalMember 2021-10-01 2021-12-31 0000034563 us-gaap:PreferredStockMember 2021-12-31 0000034563 us-gaap:CommonStockMember 2021-12-31 0000034563 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0000034563 us-gaap:RetainedEarningsMember 2021-12-31 0000034563 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-12-31 0000034563 2021-12-31 0000034563 us-gaap:RetainedEarningsMember 2022-01-01 2022-03-31 0000034563 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-01-01 2022-03-31 0000034563 us-gaap:CommonStockMember 2022-01-01 2022-03-31 0000034563 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-03-31 0000034563 us-gaap:PreferredStockMember 2022-03-31 0000034563 us-gaap:CommonStockMember 2022-03-31 0000034563 us-gaap:AdditionalPaidInCapitalMember 2022-03-31 0000034563 us-gaap:RetainedEarningsMember 2022-03-31 0000034563 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-03-31 0000034563 2022-03-31 0000034563 farm:FiveCustomersMember us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember 2022-07-01 2023-03-31 xbrli:pure 0000034563 farm:FiveCustomersMember us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember 2022-07-01 2022-12-31 0000034563 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:LongMember us-gaap:CashFlowHedgingMember 2023-03-31 utr:lb 0000034563 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:LongMember us-gaap:CashFlowHedgingMember 2022-06-30 0000034563 us-gaap:NondesignatedMember us-gaap:LongMember us-gaap:CashFlowHedgingMember 2023-03-31 0000034563 us-gaap:NondesignatedMember us-gaap:LongMember us-gaap:CashFlowHedgingMember 2022-06-30 0000034563 us-gaap:NondesignatedMember us-gaap:CashFlowHedgingMember us-gaap:ShortMember 2023-03-31 0000034563 us-gaap:NondesignatedMember us-gaap:CashFlowHedgingMember us-gaap:ShortMember 2022-06-30 0000034563 us-gaap:CashFlowHedgingMember 2022-07-01 2023-03-31 0000034563 us-gaap:InterestRateSwapMember 2019-03-27 0000034563 us-gaap:InterestRateSwapMember 2023-03-31 0000034563 srt:MinimumMember us-gaap:InterestRateSwapMember 2023-03-31 0000034563 us-gaap:InterestRateSwapMember 2023-01-01 2023-03-31 0000034563 us-gaap:InterestRateSwapMember 2022-07-01 2023-03-31 0000034563 us-gaap:InterestRateSwapMember 2021-04-26 0000034563 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:ShortTermInvestmentsMember us-gaap:CashFlowHedgingMember 2023-03-31 0000034563 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:ShortTermInvestmentsMember us-gaap:CashFlowHedgingMember 2022-06-30 0000034563 us-gaap:ShortTermInvestmentsMember us-gaap:NondesignatedMember 2023-03-31 0000034563 us-gaap:ShortTermInvestmentsMember us-gaap:NondesignatedMember 2022-06-30 0000034563 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:ShortTermInvestmentsMember us-gaap:CashFlowHedgingMember us-gaap:InterestRateSwapMember 2023-03-31 0000034563 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:ShortTermInvestmentsMember us-gaap:CashFlowHedgingMember us-gaap:InterestRateSwapMember 2022-06-30 0000034563 us-gaap:ShortTermInvestmentsMember us-gaap:NondesignatedMember us-gaap:InterestRateSwapMember 2023-03-31 0000034563 us-gaap:ShortTermInvestmentsMember us-gaap:NondesignatedMember us-gaap:InterestRateSwapMember 2022-06-30 0000034563 us-gaap:DesignatedAsHedgingInstrumentMember farm:LongtermDerivativeAssetsMember us-gaap:CashFlowHedgingMember 2023-03-31 0000034563 us-gaap:DesignatedAsHedgingInstrumentMember farm:LongtermDerivativeAssetsMember us-gaap:CashFlowHedgingMember 2022-06-30 0000034563 farm:LongtermDerivativeAssetsMember us-gaap:NondesignatedMember 2023-03-31 0000034563 farm:LongtermDerivativeAssetsMember us-gaap:NondesignatedMember 2022-06-30 0000034563 us-gaap:DesignatedAsHedgingInstrumentMember farm:LongtermDerivativeAssetsMember us-gaap:CashFlowHedgingMember us-gaap:InterestRateSwapMember 2023-03-31 0000034563 us-gaap:DesignatedAsHedgingInstrumentMember farm:LongtermDerivativeAssetsMember us-gaap:CashFlowHedgingMember us-gaap:InterestRateSwapMember 2022-06-30 0000034563 farm:LongtermDerivativeAssetsMember us-gaap:NondesignatedMember us-gaap:InterestRateSwapMember 2023-03-31 0000034563 farm:LongtermDerivativeAssetsMember us-gaap:NondesignatedMember us-gaap:InterestRateSwapMember 2022-06-30 0000034563 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:CashFlowHedgingMember farm:ShortTermDerivativeLiabilitiesMember 2023-03-31 0000034563 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:CashFlowHedgingMember farm:ShortTermDerivativeLiabilitiesMember 2022-06-30 0000034563 us-gaap:NondesignatedMember farm:ShortTermDerivativeLiabilitiesMember 2023-03-31 0000034563 us-gaap:NondesignatedMember farm:ShortTermDerivativeLiabilitiesMember 2022-06-30 0000034563 us-gaap:InterestRateSwapMember 2022-01-01 2022-03-31 0000034563 us-gaap:InterestRateSwapMember 2021-07-01 2022-03-31 0000034563 us-gaap:CommodityMember 2023-01-01 2023-03-31 0000034563 us-gaap:CommodityMember 2022-01-01 2022-03-31 0000034563 us-gaap:CommodityMember 2022-07-01 2023-03-31 0000034563 us-gaap:CommodityMember 2021-07-01 2022-03-31 0000034563 us-gaap:CommodityMember us-gaap:CostOfSalesMember 2023-01-01 2023-03-31 0000034563 us-gaap:CommodityMember us-gaap:CostOfSalesMember 2022-01-01 2022-03-31 0000034563 us-gaap:CommodityMember us-gaap:CostOfSalesMember 2022-07-01 2023-03-31 0000034563 us-gaap:CommodityMember us-gaap:CostOfSalesMember 2021-07-01 2022-03-31 0000034563 us-gaap:CostOfSalesMember us-gaap:CashFlowHedgingMember 2021-07-01 2022-03-31 0000034563 us-gaap:CostOfSalesMember 2022-07-01 2023-03-31 0000034563 farm:CoffeeMember 2023-01-01 2023-03-31 0000034563 farm:CoffeeMember 2022-01-01 2022-03-31 0000034563 farm:CoffeeMember 2022-07-01 2023-03-31 0000034563 farm:CoffeeMember 2021-07-01 2022-03-31 0000034563 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2022-12-31 0000034563 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2021-12-31 0000034563 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2022-06-30 0000034563 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2021-06-30 0000034563 us-gaap:InterestRateSwapMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2023-01-01 2023-03-31 0000034563 us-gaap:InterestRateSwapMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2022-01-01 2022-03-31 0000034563 us-gaap:InterestRateSwapMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2022-07-01 2023-03-31 0000034563 us-gaap:InterestRateSwapMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2021-07-01 2022-03-31 0000034563 farm:PartialUnwindOfInterestSwapMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2023-01-01 2023-03-31 0000034563 farm:PartialUnwindOfInterestSwapMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2022-01-01 2022-03-31 0000034563 farm:PartialUnwindOfInterestSwapMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2022-07-01 2023-03-31 0000034563 farm:PartialUnwindOfInterestSwapMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2021-07-01 2022-03-31 0000034563 us-gaap:CommodityMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2023-01-01 2023-03-31 0000034563 us-gaap:CommodityMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2022-01-01 2022-03-31 0000034563 us-gaap:CommodityMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2022-07-01 2023-03-31 0000034563 us-gaap:CommodityMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2021-07-01 2022-03-31 0000034563 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2023-03-31 0000034563 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2022-03-31 0000034563 farm:CounterpartyOneMember 2023-03-31 0000034563 farm:CounterpartyOneMember 2022-06-30 0000034563 farm:CoffeerelatedDerivativeInstrumentsMember 2022-07-01 2023-03-31 0000034563 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:EstimateOfFairValueFairValueDisclosureMember farm:CoffeerelatedDerivativeInstrumentsMember 2023-03-31 0000034563 us-gaap:FairValueInputsLevel1Member us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:EstimateOfFairValueFairValueDisclosureMember farm:CoffeerelatedDerivativeInstrumentsMember 2023-03-31 0000034563 us-gaap:FairValueInputsLevel2Member us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:EstimateOfFairValueFairValueDisclosureMember farm:CoffeerelatedDerivativeInstrumentsMember 2023-03-31 0000034563 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel3Member farm:CoffeerelatedDerivativeInstrumentsMember 2023-03-31 0000034563 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:NondesignatedMember farm:CoffeerelatedDerivativeInstrumentsMember 2023-03-31 0000034563 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:NondesignatedMember farm:CoffeerelatedDerivativeInstrumentsMember 2023-03-31 0000034563 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:NondesignatedMember farm:CoffeerelatedDerivativeInstrumentsMember 2023-03-31 0000034563 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel3Member us-gaap:NondesignatedMember farm:CoffeerelatedDerivativeInstrumentsMember 2023-03-31 0000034563 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:NondesignatedMember us-gaap:InterestRateSwapMember 2023-03-31 0000034563 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:NondesignatedMember us-gaap:InterestRateSwapMember 2023-03-31 0000034563 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:NondesignatedMember us-gaap:InterestRateSwapMember 2023-03-31 0000034563 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel3Member us-gaap:NondesignatedMember us-gaap:InterestRateSwapMember 2023-03-31 0000034563 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:EstimateOfFairValueFairValueDisclosureMember farm:CoffeerelatedDerivativeInstrumentsMember 2022-06-30 0000034563 us-gaap:FairValueInputsLevel1Member us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:EstimateOfFairValueFairValueDisclosureMember farm:CoffeerelatedDerivativeInstrumentsMember 2022-06-30 0000034563 us-gaap:FairValueInputsLevel2Member us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:EstimateOfFairValueFairValueDisclosureMember farm:CoffeerelatedDerivativeInstrumentsMember 2022-06-30 0000034563 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel3Member farm:CoffeerelatedDerivativeInstrumentsMember 2022-06-30 0000034563 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:NondesignatedMember farm:CoffeerelatedDerivativeInstrumentsMember 2022-06-30 0000034563 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:NondesignatedMember farm:CoffeerelatedDerivativeInstrumentsMember 2022-06-30 0000034563 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:NondesignatedMember farm:CoffeerelatedDerivativeInstrumentsMember 2022-06-30 0000034563 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel3Member us-gaap:NondesignatedMember farm:CoffeerelatedDerivativeInstrumentsMember 2022-06-30 0000034563 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:NondesignatedMember us-gaap:InterestRateSwapMember 2022-06-30 0000034563 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:NondesignatedMember us-gaap:InterestRateSwapMember 2022-06-30 0000034563 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:NondesignatedMember us-gaap:InterestRateSwapMember 2022-06-30 0000034563 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel3Member us-gaap:NondesignatedMember us-gaap:InterestRateSwapMember 2022-06-30 0000034563 farm:CoffeeMember 2023-03-31 0000034563 farm:CoffeeMember 2022-06-30 0000034563 farm:TeaAndCulinaryProductsMember 2023-03-31 0000034563 farm:TeaAndCulinaryProductsMember 2022-06-30 0000034563 farm:CoffeeBrewingEquipmentMember 2023-03-31 0000034563 farm:CoffeeBrewingEquipmentMember 2022-06-30 0000034563 us-gaap:BuildingMember 2023-03-31 0000034563 us-gaap:BuildingMember 2022-06-30 0000034563 us-gaap:MachineryAndEquipmentMember 2023-03-31 0000034563 us-gaap:MachineryAndEquipmentMember 2022-06-30 0000034563 us-gaap:SoftwareAndSoftwareDevelopmentCostsMember 2023-03-31 0000034563 us-gaap:SoftwareAndSoftwareDevelopmentCostsMember 2022-06-30 0000034563 us-gaap:FurnitureAndFixturesMember 2023-03-31 0000034563 us-gaap:FurnitureAndFixturesMember 2022-06-30 0000034563 farm:CoffeeBrewingEquipmentMember 2023-03-31 0000034563 farm:CoffeeBrewingEquipmentMember 2022-06-30 0000034563 farm:CoffeeBrewingEquipmentMember 2023-01-01 2023-03-31 0000034563 farm:CoffeeBrewingEquipmentMember 2022-01-01 2022-03-31 0000034563 farm:CoffeeBrewingEquipmentMember 2022-07-01 2023-03-31 0000034563 farm:CoffeeBrewingEquipmentMember 2021-07-01 2022-03-31 0000034563 us-gaap:CustomerRelationshipsMember 2022-07-01 2023-03-31 0000034563 us-gaap:CustomerRelationshipsMember 2023-03-31 0000034563 us-gaap:CustomerRelationshipsMember 2022-06-30 0000034563 us-gaap:TradeSecretsMember 2022-07-01 2023-03-31 0000034563 us-gaap:TradeSecretsMember 2023-03-31 0000034563 us-gaap:TradeSecretsMember 2022-06-30 0000034563 us-gaap:TrademarksAndTradeNamesMember 2022-07-01 2023-03-31 0000034563 us-gaap:TrademarksAndTradeNamesMember 2023-03-31 0000034563 us-gaap:TrademarksAndTradeNamesMember 2022-06-30 0000034563 farm:AmortizedIntangibleAssetsMember 2023-03-31 0000034563 farm:AmortizedIntangibleAssetsMember 2022-06-30 0000034563 us-gaap:TradeNamesMember 2023-03-31 0000034563 us-gaap:TradeNamesMember 2022-06-30 0000034563 farm:UnamortizedIntangibleAssetsMember 2023-03-31 0000034563 farm:UnamortizedIntangibleAssetsMember 2022-06-30 0000034563 us-gaap:PensionPlansDefinedBenefitMember 2023-01-01 2023-03-31 0000034563 us-gaap:PensionPlansDefinedBenefitMember 2022-01-01 2022-03-31 0000034563 us-gaap:PensionPlansDefinedBenefitMember 2022-07-01 2023-03-31 0000034563 us-gaap:PensionPlansDefinedBenefitMember 2021-07-01 2022-03-31 0000034563 farm:MultiemployerPlanMember 2023-01-01 2023-03-31 0000034563 farm:MultiemployerPlanMember 2022-01-01 2022-03-31 0000034563 farm:MultiemployerPlanMember 2022-07-01 2023-03-31 0000034563 farm:MultiemployerPlanMember 2021-07-01 2022-03-31 0000034563 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2023-01-01 2023-03-31 0000034563 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2022-01-01 2022-03-31 0000034563 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2022-07-01 2023-03-31 0000034563 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2021-07-01 2022-03-31 farm:plan farm:hour 0000034563 2021-07-01 2021-07-31 0000034563 2022-01-01 2022-01-31 0000034563 farm:RestatedandAmended401KPlanMember 2023-01-01 2023-01-01 0000034563 farm:FirstThresholdMember 2023-01-01 2023-01-01 0000034563 farm:SecondThresholdMember 2023-01-01 2023-01-01 0000034563 farm:RestatedandAmended401KPlanMember 2023-01-01 2023-03-31 0000034563 farm:RestatedandAmended401KPlanMember 2022-01-01 2022-03-31 0000034563 farm:RestatedandAmended401KPlanMember 2022-07-01 2023-03-31 0000034563 farm:RestatedandAmended401KPlanMember 2021-07-01 2022-03-31 0000034563 2022-01-01 2022-01-01 0000034563 us-gaap:DefinedBenefitPostretirementLifeInsuranceMember 2022-07-01 2023-03-31 0000034563 us-gaap:DefinedBenefitPostretirementLifeInsuranceMember 2021-07-01 2022-03-31 0000034563 us-gaap:RevolvingCreditFacilityMember 2023-03-31 0000034563 us-gaap:RevolvingCreditFacilityMember 2022-06-30 0000034563 us-gaap:SeniorLoansMember farm:TermLoanMember 2023-03-31 0000034563 farm:TermLoanMember 2023-03-31 0000034563 farm:TermLoanMember 2022-06-30 0000034563 us-gaap:RevolvingCreditFacilityMember farm:RevolverSecurityAgreementMember 2021-04-26 0000034563 us-gaap:RevolvingCreditFacilityMember 2022-08-08 2022-08-08 0000034563 us-gaap:RevolvingCreditFacilityMember 2022-08-08 0000034563 us-gaap:LondonInterbankOfferedRateLIBORMember farm:RevolverSecurityAgreementMember srt:MaximumMember 2021-04-26 2021-04-26 0000034563 us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember farm:RevolverSecurityAgreementMember 2022-08-08 2022-08-08 0000034563 farm:RevolverSecurityAgreementMember 2021-04-26 2021-04-26 0000034563 farm:RevolverSecurityAgreementMember 2022-07-01 2023-03-31 0000034563 us-gaap:RevolvingCreditFacilityMember farm:TermCreditFacilityAgreementMember 2021-04-26 0000034563 us-gaap:RevolvingCreditFacilityMember farm:TermCreditFacilityAgreementMember 2021-04-26 2021-04-26 0000034563 us-gaap:RevolvingCreditFacilityMember farm:RevolverSecurityAgreementMember us-gaap:LineOfCreditMember 2022-08-31 0000034563 us-gaap:RevolvingCreditFacilityMember farm:RevolverSecurityAgreementMember us-gaap:LineOfCreditMember 2022-08-30 2022-08-30 0000034563 us-gaap:RevolvingCreditFacilityMember farm:RevolverSecurityAgreementMember us-gaap:LineOfCreditMember 2022-08-31 2022-08-31 0000034563 us-gaap:RevolvingCreditFacilityMember farm:RevolverSecurityAgreementMember us-gaap:LineOfCreditMember 2022-07-01 2023-03-31 0000034563 us-gaap:LetterOfCreditMember 2023-03-31 0000034563 farm:A2017PlanMember 2023-03-31 0000034563 farm:A2020InducementPlanMember 2023-03-31 0000034563 farm:VestedMember farm:NonqualifiedStockOptionswithTimebasedVestingNQOMember 2022-06-30 0000034563 farm:VestedMember farm:NonqualifiedStockOptionswithTimebasedVestingNQOMember 2021-07-01 2022-03-31 0000034563 farm:NonqualifiedStockOptionswithTimebasedVestingNQOMember 2022-07-01 2023-03-31 0000034563 farm:NonqualifiedStockOptionswithTimebasedVestingNQOMember 2023-03-31 0000034563 farm:VestedMember farm:NonqualifiedStockOptionswithTimebasedVestingNQOMember 2023-03-31 0000034563 farm:VestedMember farm:NonqualifiedStockOptionswithTimebasedVestingNQOMember 2022-07-01 2023-03-31 0000034563 farm:NonqualifiedStockOptionswithTimebasedVestingNQOMember 2022-06-30 0000034563 farm:NonqualifiedStockOptionswithTimebasedVestingNQOMember farm:A2007AmendedandRestatedLongtermIncentivePlanMember 2023-01-01 2023-03-31 0000034563 farm:NonqualifiedStockOptionswithTimebasedVestingNQOMember 2023-01-01 2023-03-31 0000034563 farm:NonqualifiedStockOptionswithTimebasedVestingNQOMember 2022-01-01 2022-03-31 0000034563 farm:NonqualifiedStockOptionswithTimebasedVestingNQOMember 2021-07-01 2022-03-31 0000034563 farm:NonqualifiedStockOptionswithPerformancebasedandTimebasedVestingPNQMember farm:A2007AmendedandRestatedLongtermIncentivePlanMember 2022-06-30 0000034563 farm:NonqualifiedStockOptionswithPerformancebasedandTimebasedVestingPNQMember farm:A2007AmendedandRestatedLongtermIncentivePlanMember 2021-07-01 2021-12-31 0000034563 farm:NonqualifiedStockOptionswithPerformancebasedandTimebasedVestingPNQMember farm:A2007AmendedandRestatedLongtermIncentivePlanMember 2022-07-01 2023-03-31 0000034563 farm:NonqualifiedStockOptionswithPerformancebasedandTimebasedVestingPNQMember farm:A2007AmendedandRestatedLongtermIncentivePlanMember 2023-03-31 0000034563 farm:NonqualifiedStockOptionswithPerformancebasedandTimebasedVestingPNQMember 2022-07-01 2023-03-31 0000034563 us-gaap:RestrictedStockMember 2022-06-30 0000034563 us-gaap:RestrictedStockMember 2022-07-01 2023-03-31 0000034563 us-gaap:RestrictedStockMember 2023-03-31 0000034563 us-gaap:RestrictedStockMember 2021-07-01 2022-03-31 0000034563 us-gaap:RestrictedStockMember 2022-07-01 2023-03-31 0000034563 us-gaap:RestrictedStockMember 2023-03-31 0000034563 us-gaap:RestrictedStockMember 2022-06-30 0000034563 us-gaap:RestrictedStockMember farm:A2007AmendedandRestatedLongtermIncentivePlanMember 2023-01-01 2023-03-31 0000034563 us-gaap:GeneralAndAdministrativeExpenseMember us-gaap:RestrictedStockMember 2023-01-01 2023-03-31 0000034563 us-gaap:GeneralAndAdministrativeExpenseMember us-gaap:RestrictedStockMember 2022-01-01 2022-03-31 0000034563 us-gaap:GeneralAndAdministrativeExpenseMember us-gaap:RestrictedStockMember 2022-07-01 2023-03-31 0000034563 us-gaap:GeneralAndAdministrativeExpenseMember us-gaap:RestrictedStockMember 2021-07-01 2022-03-31 0000034563 farm:PerformanceBasedRestrictedStockUnitsMember 2022-06-30 0000034563 farm:PerformanceBasedRestrictedStockUnitsMember 2022-07-01 2023-03-31 0000034563 farm:PerformanceBasedRestrictedStockUnitsMember 2023-03-31 0000034563 srt:MinimumMember farm:PerformanceBasedRestrictedStockUnitsMember 2022-07-01 2023-03-31 0000034563 farm:PerformanceBasedRestrictedStockUnitsMember srt:MaximumMember 2022-07-01 2023-03-31 0000034563 us-gaap:RestrictedStockUnitsRSUMember 2023-01-01 2023-03-31 0000034563 us-gaap:RestrictedStockUnitsRSUMember 2022-01-01 2022-03-31 0000034563 us-gaap:RestrictedStockUnitsRSUMember 2022-07-01 2023-03-31 0000034563 us-gaap:RestrictedStockUnitsRSUMember 2021-07-01 2022-03-31 0000034563 us-gaap:RestrictedStockUnitsRSUMember 2023-03-31 0000034563 us-gaap:RestrictedStockUnitsRSUMember 2022-06-30 0000034563 us-gaap:RestrictedStockUnitsRSUMember 2023-01-01 2023-03-31 0000034563 us-gaap:RestrictedStockUnitsRSUMember 2022-01-01 2022-03-31 0000034563 farm:CashSettledRestrictedStockMember 2022-07-01 2023-03-31 0000034563 farm:CashSettledRestrictedStockMember 2022-06-30 0000034563 farm:CashSettledRestrictedStockMember 2023-03-31 0000034563 farm:CashSettledRestrictedStockUnitsMember 2023-01-01 2023-03-31 0000034563 farm:CashSettledRestrictedStockUnitsMember 2022-01-01 2022-03-31 0000034563 farm:CashSettledRestrictedStockUnitsMember 2022-07-01 2023-03-31 0000034563 farm:CashSettledRestrictedStockUnitsMember 2022-07-01 2023-03-31 0000034563 farm:CashSettledRestrictedStockUnitsMember 2021-07-01 2022-03-31 0000034563 farm:CSRSUMember 2023-03-31 0000034563 farm:CSRSUMember 2022-06-30 0000034563 farm:CSRSUMember 2022-07-01 2023-03-31 0000034563 farm:CSRSUMember 2023-01-01 2023-03-31 0000034563 farm:CSRSUMember 2022-01-01 2022-03-31 0000034563 farm:CSRSUMember 2021-07-01 2022-03-31 0000034563 us-gaap:EmployeeStockOptionMember 2023-01-01 2023-03-31 0000034563 us-gaap:EmployeeStockOptionMember 2022-01-01 2022-03-31 0000034563 us-gaap:EmployeeStockOptionMember 2022-07-01 2023-03-31 0000034563 us-gaap:EmployeeStockOptionMember 2021-07-01 2022-03-31 0000034563 us-gaap:CumulativePreferredStockMember 2022-07-01 2023-03-31 0000034563 us-gaap:CumulativePreferredStockMember 2022-01-01 2022-03-31 0000034563 us-gaap:CumulativePreferredStockMember 2021-07-01 2022-03-31 0000034563 us-gaap:SeriesAPreferredStockMember 2022-08-26 2022-08-26 0000034563 us-gaap:SeriesAPreferredStockMember 2022-08-26 0000034563 us-gaap:SeriesAPreferredStockMember 2017-10-02 0000034563 us-gaap:SeriesAPreferredStockMember 2017-10-02 2017-10-02 0000034563 farm:CoffeeRoastedMember 2023-01-01 2023-03-31 0000034563 farm:CoffeeRoastedMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2023-01-01 2023-03-31 0000034563 farm:CoffeeRoastedMember 2022-01-01 2022-03-31 0000034563 farm:CoffeeRoastedMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2022-01-01 2022-03-31 0000034563 farm:CoffeeRoastedMember 2022-07-01 2023-03-31 0000034563 farm:CoffeeRoastedMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2022-07-01 2023-03-31 0000034563 farm:CoffeeRoastedMember 2021-07-01 2022-03-31 0000034563 farm:CoffeeRoastedMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2021-07-01 2022-03-31 0000034563 farm:TeaIcedHotMember 2023-01-01 2023-03-31 0000034563 farm:TeaIcedHotMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2023-01-01 2023-03-31 0000034563 farm:TeaIcedHotMember 2022-01-01 2022-03-31 0000034563 farm:TeaIcedHotMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2022-01-01 2022-03-31 0000034563 farm:TeaIcedHotMember 2022-07-01 2023-03-31 0000034563 farm:TeaIcedHotMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2022-07-01 2023-03-31 0000034563 farm:TeaIcedHotMember 2021-07-01 2022-03-31 0000034563 farm:TeaIcedHotMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2021-07-01 2022-03-31 0000034563 farm:CulinaryMember 2023-01-01 2023-03-31 0000034563 farm:CulinaryMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2023-01-01 2023-03-31 0000034563 farm:CulinaryMember 2022-01-01 2022-03-31 0000034563 farm:CulinaryMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2022-01-01 2022-03-31 0000034563 farm:CulinaryMember 2022-07-01 2023-03-31 0000034563 farm:CulinaryMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2022-07-01 2023-03-31 0000034563 farm:CulinaryMember 2021-07-01 2022-03-31 0000034563 farm:CulinaryMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2021-07-01 2022-03-31 0000034563 farm:SpiceMember 2023-01-01 2023-03-31 0000034563 farm:SpiceMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2023-01-01 2023-03-31 0000034563 farm:SpiceMember 2022-01-01 2022-03-31 0000034563 farm:SpiceMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2022-01-01 2022-03-31 0000034563 farm:SpiceMember 2022-07-01 2023-03-31 0000034563 farm:SpiceMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2022-07-01 2023-03-31 0000034563 farm:SpiceMember 2021-07-01 2022-03-31 0000034563 farm:SpiceMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2021-07-01 2022-03-31 0000034563 us-gaap:ProductMember 2023-01-01 2023-03-31 0000034563 us-gaap:ProductMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2023-01-01 2023-03-31 0000034563 us-gaap:ProductMember 2022-01-01 2022-03-31 0000034563 us-gaap:ProductMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2022-01-01 2022-03-31 0000034563 us-gaap:ProductMember 2022-07-01 2023-03-31 0000034563 us-gaap:ProductMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2022-07-01 2023-03-31 0000034563 us-gaap:ProductMember 2021-07-01 2022-03-31 0000034563 us-gaap:ProductMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2021-07-01 2022-03-31 0000034563 farm:FuelSurchargeMember 2023-01-01 2023-03-31 0000034563 farm:FuelSurchargeMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2023-01-01 2023-03-31 0000034563 farm:FuelSurchargeMember 2022-01-01 2022-03-31 0000034563 farm:FuelSurchargeMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2022-01-01 2022-03-31 0000034563 farm:FuelSurchargeMember 2022-07-01 2023-03-31 0000034563 farm:FuelSurchargeMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2022-07-01 2023-03-31 0000034563 farm:FuelSurchargeMember 2021-07-01 2022-03-31 0000034563 farm:FuelSurchargeMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2021-07-01 2022-03-31 0000034563 us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2023-01-01 2023-03-31 0000034563 us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2022-01-01 2022-03-31 0000034563 us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2022-07-01 2023-03-31 0000034563 us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2021-07-01 2022-03-31 0000034563 farm:CoffeeMember us-gaap:InventoriesMember 2023-03-31 0000034563 farm:OtherInventoryMember us-gaap:InventoriesMember 2023-03-31 0000034563 farm:PortlandOregonMember 2023-03-31 0000034563 farm:PortlandOregonMember 2023-01-01 2023-03-31 0000034563 farm:SanDiegoCaliforniaMember 2023-03-31 0000034563 farm:SanDiegoCaliforniaMember 2023-01-01 2023-03-31 0000034563 farm:FresnoCaliforniaMember 2023-03-31 0000034563 farm:FresnoCaliforniaMember 2023-01-01 2023-03-31 0000034563 farm:SacramentoCaliforniaMember 2023-03-31 0000034563 farm:SacramentoCaliforniaMember 2023-01-01 2023-03-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)

☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023
OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
Commission file number: 001-34249
FARMER BROS. CO.
(Exact Name of Registrant as Specified in Its Charter)

Delaware |  |  | 95-0725980
(State or Other Jurisdiction of Incorporation of Organization) |  |  | (I.R.S. Employer Identification No.)
1912 Farmer Brothers Drive, Northlake, Texas 76262
(Address of Principal Executive Offices; Zip Code)
682-549-6600
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol(s) |  | Name of Each Exchange on Which Registered
Common Stock, par value $1.00 per share | FARM |  | Nasdaq Global Select Market
None
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ NO ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☐ |  |  | Accelerated filer |  | ☒
Non-accelerated filer | ☐ |  |  | Smaller reporting company |  | ☐
|  |  |  | Emerging growth company |  | ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the |  |
Exchange Act. | ☐ |  |  |  |  |

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES ☐ NO ☒
As of May 2, 2023, the registrant had 20,098,027 shares outstanding of its common stock, par value $1.00 per share, which is the registrant’s only class of common stock.

TABLE OF CONTENTS

| Page
PART I – FINANCIAL INFORMATION (UNAUDITED) |
Item 1. Financial Statements | 1
Consolidated Balance Sheets at March 31, 202 3 and June 30, 2022 | 1
Consolidated Statements of Operations for the Three and Nine Months Ended M arch 31, 202 3 and 202 2 | 2
Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended March 31, 202 3 and 202 2 | 3
Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended March 31, 202 3 and 202 2 | 4
Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 202 3 and 202 2 | 6
Notes to Consolidated Financial Statements | 7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 33
Item 4. Controls and Procedures | 34
PART II – OTHER INFORMATION |
Item 1. Legal Proceedings | 34
Item 1A. Risk Factors | 34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 34
Item 3. Defaults Upon Senior Securities | 34
Item 4. Mine Safety Disclosures | 34
Item 5. Other Information | 34
Item 6. Exhibits | 35
SIGNATURES | 36

PART I - FINANCIAL INFORMATION (UNAUDITED)
Item 1. Financial Statements
FARMER BROS. CO.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share and per share data)

| March 31, 2023 |  | June 30, 2022
ASSETS |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 7,256 |  |  | $ | 9,819 |
Restricted cash | 175 |  |  | 175 |
Accounts receivable, net of allowance for credit losses of $439 and $195, respectively | 54,098 |  |  | 46,935 |
Inventories | 82,255 |  |  | 99,618 |
Short-term derivative assets | 1,766 |  |  | 3,022 |
Prepaid expenses | 4,757 |  |  | 4,491 |
Assets held for sale | — |  |  | 1,032 |
Total current assets | 150,307 |  |  | 165,092 |
Property, plant and equipment, net | 131,399 |  |  | 138,150 |
Intangible assets, net | 14,086 |  |  | 15,863 |
Right-of-use operating lease assets | 26,202 |  |  | 27,957 |
Other assets | 3,053 |  |  | 3,009 |
Total assets | $ | 325,047 |  |  | $ | 350,071 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |
Current liabilities: |  |  |
Accounts payable | 65,145 |  |  | 52,877 |
Accrued payroll expenses | 8,329 |  |  | 14,761 |
Right-of-use operating lease liabilities - current | 8,040 |  |  | 7,721 |
Term loan - current | 3,133 |  |  | 3,800 |
Short term derivative liability | 1,560 |  |  | 2,349 |
Other current liabilities | 4,525 |  |  | 6,095 |
Total current liabilities | 90,732 |  |  | 87,603 |
Long-term borrowings under revolving credit facility | 67,000 |  |  | 63,000 |
Term loan - noncurrent | 41,412 |  |  | 40,123 |
Accrued pension liabilities | 28,476 |  |  | 28,540 |
Accrued postretirement benefits | 816 |  |  | 787 |
Accrued workers’ compensation liabilities | 2,704 |  |  | 3,169 |
Right-of-use operating lease liabilities - noncurrent | 18,750 |  |  | 20,762 |
Other long-term liabilities | 1,314 |  |  | 1,339 |
Total liabilities | $ | 251,204 |  |  | $ | 245,323 |
Commitments and contingencies |  |  |
Stockholders’ equity: |  |  |
Preferred stock, $1.00 par value, 500,000 shares authorized; Series A Convertible Participating Cumulative Perpetual Preferred Stock, 21,000 shares authorized; no shares outstanding as of March 31, 2023 and 14,700 shares issued and outstanding as of June 30, 2022; liquidation preference of $17,346 as of June 30, 2022 | — |  |  | 15 |
Common stock, $1.00 par value, 50,000,000 shares authorized; 19,953,781 and 18,464,966 shares issued and outstanding as of March 31, 2023 and June 30, 2022, respectively | 19,955 |  |  | 18,466 |
Additional paid-in capital | 75,395 |  |  | 71,997 |
Retained earnings | 20,296 |  |  | 52,701 |
Accumulated other comprehensive loss | (41,803) |  |  | (38,431) |
Total stockholders’ equity | $ | 73,843 |  |  | $ | 104,748 |
Total liabilities and stockholders’ equity | $ | 325,047 |  |  | $ | 350,071 |

The accompanying notes are an integral part of these unaudited consolidated financial statements.
1

FARMER BROS. CO.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except share and per share data)

| Three Months Ended March 31, |  | Nine Months Ended March 31,
| 2023 |  | 2022 |  | 2023 |  | 2022
Net sales | $ | 124,234 |  |  | $ | 119,398 |  |  | $ | 378,306 |  |  | $ | 346,205 |
Cost of goods sold | 95,563 |  |  | 83,838 |  |  | 292,648 |  |  | 244,197 |
Gross profit | 28,671 |  |  | 35,560 |  |  | 85,658 |  |  | 102,008 |
Selling expenses | 28,325 |  |  | 27,477 |  |  | 83,136 |  |  | 81,505 |
General and administrative expenses | 10,539 |  |  | 11,595 |  |  | 30,858 |  |  | 34,796 |
Net (gains) loss from sales of assets | (557) |  |  | 426 |  |  | (7,685) |  |  | (4,003) |
Operating expenses | 38,307 |  |  | 39,498 |  |  | 106,309 |  |  | 112,298 |
Loss from operations | (9,636) |  |  | (3,938) |  |  | (20,651) |  |  | (10,290) |
Other (expense) income: |  |  |  |  |  |  |
Interest expense | (4,210) |  |  | (1,591) |  |  | (12,431) |  |  | (7,106) |
Other, net | 2,453 |  |  | 1,579 |  |  | 791 |  |  | 5,790 |
Total other expense | (1,757) |  |  | (12) |  |  | (11,640) |  |  | (1,316) |
Loss before taxes | (11,393) |  |  | (3,950) |  |  | (32,291) |  |  | (11,606) |
Income tax expense | 30 |  |  | 90 |  |  | 113 |  |  | 278 |
Net loss | $ | (11,423) |  |  | $ | (4,040) |  |  | $ | (32,404) |  |  | $ | (11,884) |
Less: Cumulative preferred dividends, undeclared and unpaid | — |  |  | 149 |  |  | — |  |  | 444 |
Net loss available to common stockholders | $ | (11,423) |  |  | $ | (4,189) |  |  | $ | (32,404) |  |  | $ | (12,328) |
Net loss available to common stockholders per common share—basic | $ | (0.57) |  |  | $ | (0.23) |  |  | $ | (1.66) |  |  | $ | (0.68) |
Net loss available to common stockholders per common share—diluted | $ | (0.57) |  |  | $ | (0.23) |  |  | $ | (1.66) |  |  | $ | (0.68) |
Weighted average common shares outstanding—basic | 19,923,577 |  |  | 18,289,815 |  |  | 19,467,022 |  |  | 18,118,469 |
Weighted average common shares outstanding—diluted | 19,923,577 |  |  | 18,289,815 |  |  | 19,467,022 |  |  | 18,118,469 |

The accompanying notes are an integral part of these unaudited consolidated financial statements.
2

FARMER BROS. CO.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
(In thousands)

| Three Months Ended March 31, |  | Nine Months Ended March 31,
| 2023 |  | 2022 |  | 2023 |  | 2022
Net loss | $ | (11,423) |  |  | $ | (4,040) |  |  | $ | (32,404) |  |  | $ | (11,884) |
Other comprehensive (loss) income: |  |  |  |  |  |  |
Unrealized gains (losses) on derivatives designated as cash flow hedges | 819 |  |  | 383 |  |  | (1,993) |  |  | 11,374 |
Gains on derivatives designated as cash flow hedges reclassified to cost of goods sold | (331) |  |  | (3,110) |  |  | (2,213) |  |  | (8,742) |
Losses on derivative instruments undesignated as cash flow hedges reclassified to interest expense, net of tax | 267 |  |  | 294 |  |  | 833 |  |  | 916 |
Total comprehensive loss, net of tax | $ | (10,668) |  |  | $ | (6,473) |  |  | $ | (35,777) |  |  | $ | (8,336) |

The accompanying notes are an integral part of these unaudited consolidated financial statements.
3

FARMER BROS. CO. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) (In thousands, except share and per share data)
| Preferred Shares |  | Preferred Stock Amount |  | Common Shares |  | Common Stock Amount |  | Additional Paid-in Capital |  | Retained Earnings |  |  |  | Accumulated Other Comprehensive Income (Loss) |  | Total
Balance at June 30, 2022 | 14,700 |  |  | $ | 15 |  |  | 18,464,966 |  |  | $ | 18,466 |  |  | $ | 71,997 |  |  | $ | 52,701 |  |  |  |  | $ | (38,431) |  |  | $ | 104,748 |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (7,374) |  |  |  |  | — |  |  | (7,374) |
Cash flow hedges, net of taxes | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  | (1,521) |  |  | (1,521) |
401(k) compensation expense, including reclassifications | — |  |  | — |  |  | 257,052 |  |  | 257 |  |  | 940 |  |  | — |  |  |  |  | — |  |  | 1,197 |
Share-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 1,165 |  |  | — |  |  |  |  | — |  |  | 1,165 |
Issuance of common stock and stock option exercises | — |  |  | — |  |  | 158,744 |  |  | 159 |  |  | (159) |  |  | — |  |  |  |  | — |  |  | — |
Conversion and cancellation of preferred shares | (14,700) |  |  | (15) |  |  | 399,208 |  |  | 399 |  |  | (1,750) |  |  | — |  |  |  |  | — |  |  | (1,366) |
Balance at September 30, 2022 | — |  |  | — |  |  | 19,279,970 |  |  | 19,281 |  |  | 72,193 |  |  | 45,327 |  |  |  |  | (39,952) |  |  | 96,849 |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (13,608) |  |  |  |  | — |  |  | (13,608) |
Cash flow hedges, net of taxes | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  | (2,606) |  |  | (2,606) |
401(k) compensation expense, including reclassifications | — |  |  | — |  |  | 264,712 |  |  | 265 |  |  | 1,059 |  |  | — |  |  |  |  | — |  |  | 1,324 |
Share-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 979 |  |  | — |  |  |  |  | — |  |  | 979 |
Issuance of common stock and stock option exercises | — |  |  | — |  |  | 137,261 |  |  | 137 |  |  | (137) |  |  | — |  |  |  |  | — |  |  | — |
Balance at December 31, 2022 | — |  |  | — |  |  | 19,681,943 |  |  | 19,683 |  |  | 74,094 |  |  | 31,719 |  |  |  |  | (42,558) |  |  | 82,938 |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (11,423) |  |  |  |  | — |  |  | (11,423) |
Cash flow hedges, net of taxes | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  | 755 |  |  | 755 |
401(k) compensation expense, including reclassifications | — |  |  | — |  |  | 271,838 |  |  | 272 |  |  | 773 |  |  | — |  |  |  |  | — |  |  | 1,045 |
Share-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 528 |  |  | — |  |  |  |  | — |  |  | 528 |
Balance at March 31, 2023 | — |  |  | $ | — |  |  | 19,953,781 |  |  | $ | 19,955 |  |  | $ | 75,395 |  |  | $ | 20,296 |  |  |  |  | $ | (41,803) |  |  | $ | 73,843 |

4

FARMER BROS. CO. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) (In thousands, except share and per share data)
| Preferred Shares |  | Preferred Stock Amount |  | Common Shares |  | Common Stock Amount |  | Additional Paid-in Capital |  | Retained Earnings |  |  |  | Accumulated Other Comprehensive Income (Loss) |  | Total
Balance at June 30, 2021 | 14,700 |  |  | $ | 15 |  |  | 17,852,793 |  |  | $ | 17,853 |  |  | $ | 66,109 |  |  | $ | 66,311 |  |  |  |  | $ | (45,329) |  |  | $ | 104,959 |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (2,424) |  |  |  |  | — |  |  | (2,424) |
Cash flow hedges, net of taxes | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  | 4,253 |  |  | 4,253 |
ESOP and 401(k) compensation expense, including reclassifications | — |  |  | — |  |  | 51,597 |  |  | 52 |  |  | 619 |  |  | — |  |  |  |  | — |  |  | 671 |
Share-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 721 |  |  | — |  |  |  |  | — |  |  | 721 |
Issuance of common stock and stock option exercises | — |  |  | — |  |  | 94,407 |  |  | 94 |  |  | (94) |  |  | — |  |  |  |  | — |  |  | — |
Cumulative preferred dividends, undeclared and unpaid | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (147) |  |  |  |  | — |  |  | (147) |
Balance at September 30, 2021 | 14,700 |  |  | 15 |  |  | 17,998,797 |  |  | 17,999 |  |  | 67,355 |  |  | 63,740 |  |  |  |  | (41,076) |  |  | 108,033 |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (5,420) |  |  |  |  | — |  |  | (5,420) |
Cash flow hedges, net of taxes | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  | 1,728 |  |  | 1,728 |
ESOP and 401(k) compensation expense, including reclassifications | — |  |  | — |  |  | 82,437 |  |  | 84 |  |  | 664 |  |  | — |  |  |  |  | — |  |  | 748 |
Share-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 858 |  |  | — |  |  |  |  | — |  |  | 858 |
Issuance of common stock and stock option exercises | — |  |  | — |  |  | 129,292 |  |  | 129 |  |  | (618) |  |  | — |  |  |  |  | — |  |  | (489) |
Cumulative preferred dividends, undeclared and unpaid | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (148) |  |  |  |  | — |  |  | (148) |
Balance at December 31, 2021 | 14,700 |  |  | 15 |  |  | 18,210,526 |  |  | 18,212 |  |  | 68,259 |  |  | 58,172 |  |  |  |  | (39,348) |  |  | 105,310 |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (4,040) |  |  |  |  | — |  |  | (4,040) |
Cash flow hedges, net of taxes | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  | (2,433) |  |  | (2,433) |
ESOP and 401(k) compensation expense, including reclassifications | — |  |  | — |  |  | 90,329 |  |  | 90 |  |  | 1,099 |  |  | — |  |  |  |  | — |  |  | 1,189 |
Share-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 829 |  |  | — |  |  |  |  | — |  |  | 829 |
Cumulative preferred dividends, undeclared and unpaid | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (149) |  |  |  |  | — |  |  | (149) |
Balance at March 31, 2022 | 14,700 |  |  | $ | 15 |  |  | 18,300,855 |  |  | $ | 18,302 |  |  | $ | 70,187 |  |  | $ | 53,983 |  |  |  |  | $ | (41,781) |  |  | $ | 100,706 |

The accompanying notes are an integral part of these unaudited consolidated financial statements.
5

FARMER BROS. CO.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
| Nine Months Ended March 31,
| 2023 |  | 2022
Cash flows from operating activities: |  |  |
Net loss | $ | (32,404) |  |  | $ | (11,884) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities |  |  |
Depreciation and amortization | 16,725 |  |  | 18,119 |
Gain on settlement related to Boyd's acquisition | (1,917) |  |  | — |
Net gains from sale of assets | (7,685) |  |  | (4,003) |
Net losses (gains) on derivative instruments | 1,189 |  |  | (12,798) |
401(k), ESOP and share-based compensation expense | 6,237 |  |  | 4,526 |
Provision for credit losses | 535 |  |  | 437 |
Change in operating assets and liabilities: |  |  |
Accounts receivable | (7,698) |  |  | (7,559) |
Inventories | 17,363 |  |  | (25,610) |
Derivative (liabilities) assets, net | (3,751) |  |  | 13,223 |
Other assets | (510) |  |  | 1,989 |
Accounts payable | 12,101 |  |  | 16,921 |
Accrued expenses and other | (6,468) |  |  | (2,988) |
Net cash used in operating activities | (6,283) |  |  | (9,627) |
Cash flows from investing activities: |  |  |
Purchases of property, plant and equipment | (11,113) |  |  | (8,896) |
Proceeds from sales of property, plant and equipment | 11,507 |  |  | 9,062 |
Net cash provided by investing activities | 394 |  |  | 166 |
Cash flows from financing activities: |  |  |
Proceeds from Credit Facilities | 54,000 |  |  | 15,000 |
Repayments on Credit Facilities | (50,167) |  |  | (4,950) |
Payments of finance lease obligations | (144) |  |  | (144) |
Payment of financing costs | (363) |  |  | (330) |
Net cash provided by financing activities | 3,326 |  |  | 9,576 |
Net (decrease) increase in cash and cash equivalents and restricted cash | (2,563) |  |  | 115 |
Cash and cash equivalents and restricted cash at beginning of period | 9,994 |  |  | 10,438 |
Cash and cash equivalents and restricted cash at end of period | $ | 7,431 |  |  | $ | 10,553 |

Supplemental disclosure of non-cash investing and financing activities: |  |  |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 3,487 |  |  | $ | 6,168 |
Non-cash issuance of ESOP and 401(K) common stock | 793 |  |  | 224 |
Non cash additions to property, plant and equipment | 167 |  |  | 435 |
Cumulative preferred dividends, undeclared and unpaid | — |  |  | 444 |

The accompanying notes are an integral part of these unaudited consolidated financial statemen ts.
6

FARMER BROS. CO.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Introduction and Basis of Presentation
Farmer Bros. Co., a Delaware corporation (including its consolidated subsidiaries unless the context otherwise requires, the “Company”), is a leading coffee roaster, wholesaler, equipment servicer and distributor of coffee, tea, and other allied products manufactured under our owned brands, as well as under private labels on behalf of certain customers.
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of the interim financial data have been included. Operating results for the nine months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2023.
The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022, filed with the Securities and Exchange Commission (the “SEC”) on September 2, 2022, and the Form 10-K/A filed on October 27, 2022 (the “2022 Form 10-K”).
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its direct and indirect wholly owned subsidiaries FBC Finance Company, a California corporation, Coffee Bean Holding Co., Inc., a Delaware corporation and, the parent company of Coffee Bean International, Inc., an Oregon corporation, China Mist Brands, Inc., a Delaware corporation, and Boyd Assets Co., a Delaware corporation. All intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company reviews its estimates on an ongoing basis using currently available information. Changes in facts and circumstances may result in revised estimates and actual results may differ from those estimates.
Note 2. Summary of Significant Accounting Policies
For a detailed discussion about the Company’s significant accounting policies, see Note 2, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements in the 2022 Form 10-K.
During the nine months ended March 31, 2023, there were no significant updates made to the Company’s significant accounting policies.
Cash Equivalents
At March 31, 2023, we had $7.3 million of unrestricted cash and cash equivalents and $0.2 million in restricted cash. The restricted cash is related to a third party service agreement. At March 31, 2023 and June 30, 2022, none of the cash in the Company’s coffee-related derivative margin accounts was restricted. Further changes in commodity prices and the number of coffee-related derivative instruments held could have a significant impact on cash deposit requirements under certain of the Company's broker and counterparty agreements.
Concentration of Credit Risk
At March 31, 2023 and June 30, 2022, the financial instruments which potentially expose the Company to concentration of credit risk consist of cash in financial institutions (in excess of federally insured limits), derivative instruments and trade receivables.
The Company does not have any credit-risk related contingent features that would require it to post additional collateral in support of its net derivative asset positions.
7

Farmer Bros. Co.
Notes to Unaudited Consolidated Financial Statements (continued)

Approximately 43% and 35% of the Company’s accounts receivable balance was with five customers at March 31, 2023 and June 30, 2022, respectively. The Company estimates its maximum credit risk for accounts receivable at the amount recorded on the balance sheet. The accounts receivable are generally short-term and all estimated credit losses have been appropriately considered in establishing the allowance for credit losses.
Recent Accounting Pronouncements
The Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (the “FASB”). ASUs not listed below were assessed and either determined to be not applicable or expected to have minimal impact on its consolidated financial statements.
The following table provides a brief description of the recent ASUs applicable to the Company:

Standard |  | Description |  | Effective Date |  | Effect on the Financial Statements or Other Significant Matters
In March 2020, the FASB issued ASU No. 2020-04, “Facilitation of the Effect of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”) |  | The London Interbank Offered Rate (LIBOR) is being discontinued between December 2021 and June 2023. The Company has not entered into any new contracts after December 31, 2021 subject to LIBOR. With the overnight, 1-month, 3-month, 6-month and 12-month USD LIBOR rates being published through June 30, 2023, we will continue to leverage these for the existing contracts. ASU 2020-04 provides temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the transition from LIBOR to alternative reference rate. |  | Issuance date of March 12, 2020 through December 31, 2024. |  | The Company does not anticipate any material impacts on its consolidated financial statements.

Note 3. Leases
The Company has entered into leases for building facilities, vehicles and other equipment. The Company’s leases have remaining contractual terms through April 30, 2030, some of which have options to extend the lease for up to 10 years. For purposes of calculating operating lease liabilities, lease terms are deemed not to include options to extend the lease renewal until it is reasonably certain that the Company will exercise that option. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The components of lease expense are as follows:

|  |  |  | Three Months Ended March 31, |  | Nine Months Ended March 31, |  |  |
(In thousands) |  |  |  | 2023 |  | 2022 |  | 2023 |  | 2022 |  |  |
Operating lease expense |  |  |  | $ | 1,964 |  |  | $ | 1,887 |  |  | $ | 5,910 |  |  | $ | 5,557 |  |  |  |
Finance lease expense: |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization of finance lease assets |  |  |  | 41 |  |  | 41 |  |  | 123 |  |  | 123 |  |  |  |
Interest on finance lease liabilities |  |  |  | 8 |  |  | 11 |  |  | 27 |  |  | 34 |  |  |  |
Total lease expense |  |  |  | $ | 2,013 |  |  | $ | 1,939 |  |  | $ | 6,060 |  |  | $ | 5,714 |  |  |  |

Maturities of lease liabilities are as follows:

|  | March 31, 2023
(In thousands) |  | Operating Leases |  | Finance Leases
2023 |  | $ | 2,013 |  |  | $ | 48 |
2024 |  | 7,963 |  |  | 193 |
2025 |  | 6,786 |  |  | 193 |
2026 |  | 5,701 |  |  | 96 |
2027 |  | 4,250 |  |  | — |
Thereafter |  | 4,186 |  |  | — |
Total lease payments |  | 30,899 |  |  | 530 |
Less: interest |  | (4,109) |  |  | (46) |
Total lease obligations |  | $ | 26,790 |  |  | $ | 484 |

8

Farmer Bros. Co.
Notes to Unaudited Consolidated Financial Statements (continued)

Lease term and discount rate:

|  | March 31, 2023 |  | June 30, 2022
Weighted-average remaining lease terms (in years): |  |  |  |
Operating lease |  | 6.1 |  | 6.3
Finance lease |  | 2.8 |  | 3.5
Weighted-average discount rate: |  |  |  |
Operating lease |  | 6.17 | % |  | 5.69 | %
Finance lease |  | 6.50 | % |  | 6.50 | %

Other Information:

|  | Nine Months Ended March 31,
(In thousands) |  | 2023 |  | 2022
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash flows from operating leases |  | $ | 5,830 |  |  | $ | 5,138 |
Operating cash flows from finance leases |  | 27 |  |  | 34 |
Financing cash flows from finance leases |  | 144 |  |  | 114 |

Note 4. Derivative Instruments
Derivative Instruments Held
Coffee-Related Derivative Instruments
The Company is exposed to commodity price risk associated with its price to be fixed green coffee purchase contracts, which are described further in Note 2, “Summary of Significant Accounting Policies,” in the Notes to the Consolidated Financial Statements in the 2022 Form 10-K. The Company utilizes forward and option contracts to manage exposure to the variability in expected future cash flows from forecasted purchases of green coffee attributable to commodity price risk. Certain of these coffee-related derivative instruments utilized for risk management purposes have been designated as cash flow hedges, while other coffee-related derivative instruments have not been designated as cash flow hedges or do not qualify for hedge accounting despite hedging the Company’s future cash flows on an economic basis.
The following table summarizes the notional volumes for the coffee-related derivative instruments held by the Company at March 31, 2023 and June 30, 2022:

(In thousands) |  | March 31, 2023 |  | June 30, 2022
Derivative instruments designated as cash flow hedges: |  |  |  |
Long coffee pounds |  | 675 |  |  | 4,200 |
Derivative instruments not designated as cash flow hedges: |  |  |  |
Long coffee pounds |  | 412 |  |  | 516 |
Short coffee pounds |  | (11,250) |  |  | — |
Total |  | (10,163) |  |  | 4,716 |

Coffee-related derivative instruments designated as cash flow hedges outstanding as of March 31, 2023 will expire within 12 months. At March 31, 2023 and June 30, 2022 approximately 5% and 89%, respectively, of the Company's outstanding coffee-related derivative instruments were designated as cash flow hedges.
Interest Rate Swap Derivative Instruments
Pursuant to an International Swap Dealers Association, Inc. (“ISDA”) Master Agreement, which was effective March 20, 2019, the Company on March 27, 2019, entered into an interest rate 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 “Rate Swap”). In December 2019, the Company amended the notional amount to $65.0 million. The Rate Swap was intended to manage the Company’s interest rate risk on its floating-rate indebtedness under the Company’s revolving credit facility. Under the terms of the Rate Swap, the Company received 1-month LIBOR, subj ect to a 0% fl oor, and made payments based on a fixed rate of 2.1975%.
The Company had designated the Rate Swap derivative instrument as a cash flow hedge; however, during the three months ended September 30, 2020, the Company de-designated the Rate Swap derivative instrument. As a result, the balance in accumulated other comprehensive income, or “AOCI” was frozen at the time of de-designation. The Company recognized $0.3 million and $0.8 million, out of AOCI and into interest expense for the three and nine months ended
9

Farmer Bros. Co.
Notes to Unaudited Consolidated Financial Statements (continued)

March 31, 2023. The remaining balance of $0.5 million frozen in AOCI will be amortized over the life of the Rate Swap through October 11, 2023.
In connection with the revolver credit facility agreement entered into by the Company in April 2021 (see Note 1 1 for details), the Company also executed a new ISDA agreement (the “Amended Rate Swap”) to transfer its interest swap to Wells Fargo Bank, N.A. (“Wells Fargo”). Under the terms of the Amended Rate Swap, the Company receives 1-month LIBOR, subject to a 0% floor, and makes payments based on a fixed rate of 2.4725%, an increase of 0.275% from its original Rate Swap fixed rate of 2.1975%. The Amended Rate Swap utilizes the same notional amount of $65.0 million and maturity date of October 11, 2023 as the original interest rate swap.
The Company did not designate the Amended Rate Swap as a cash flow hedge. The Company’s obligations under the Amended Rate Swap are secured by the collateral which secures the loans under the new Revolver Credit Facility (see Note 11 for details) on a pari passu and pro rata basis with the principal of such loans.
Effect of Derivative Instruments on the Financial Statements
Balance Sheets
Fair values of derivative instruments on the Company’s consolidated balance sheets:

|  | Derivative Instruments Designated as Cash Flow Hedges |  | Derivative Instruments Not Designated as Accounting Hedges
(In thousands) |  | March 31, 2023 |  | June 30, 2022 |  | March 31, 2023 |  | June 30, 2022
Financial Statement Location: |  |  |  |  |  |  |  |
Short-term derivative assets: |  |  |  |  |  |  |  |
Coffee-related derivative instruments (1) |  | $ | 106 |  |  | $ | 2,144 |  |  | $ | 727 |  |  | $ | 555 |
Interest rate swap derivative instruments (1) |  | — |  |  | — |  |  | 933 |  |  | 323 |
Long-term derivative assets: |  |  |  |  |  |  |  |
Coffee-related derivative instruments (2) |  | — |  |  | 37 |  |  | — |  |  | 140 |
Interest rate swap derivative instruments (2) |  | — |  |  | — |  |  | — |  |  | 166 |
Short-term derivative liabilities: |  |  |  |  |  |  |  |
Coffee-related derivative instruments (3) |  | 3 |  |  | 3 |  |  | 1,557 |  |  | 2,346 |

________________
(1) Included in “Short-term derivative assets” on the Company's consolidated balance sheets.
(2) Included in “Long-term derivative assets” on the Company's consolidated balance sheets.
(3) Included in “Short-term derivative liabilities” on the Company's consolidated balance sheets.
Statements of Operations
The following table presents pretax net gains and losses for the Company's derivative instruments designated as cash flow hedges, as recognized in “AOCI,” “Cost of goods sold” and “Interest expense”.

|  | Three Months Ended March 31, |  | Nine Months Ended March 31, |  | Financial Statement Classification
(In thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022 |
Net (losses) gains recognized from AOCI to earnings - Interest rate swap |  | $ | (1) |  |  | $ | (1) |  |  | $ | 385 |  |  | $ | (6) |  |  | Interest Expense
Net losses reclassified from AOCI to earnings for de-designated Interest rate swap |  | (266) |  |  | (293) |  |  | (1,218) |  |  | (910) |  |  | Interest Expense
Net gains (losses) recognized in AOCI - Coffee-related |  | 819 |  |  | 383 |  |  | (1,993) |  |  | 11,374 |  |  | AOCI
Net gains recognized in earnings - Coffee - related |  | 331 |  |  | 3,110 |  |  | 2,213 |  |  | 8,742 |  |  | Cost of goods sold

For the three and nine months ended March 31, 2023 and 2022, there were no ga ins or losses recognized in earnings as a result of excluding amounts from the assessment of hedge effectiveness.
Net losses (gains) on derivative instruments in the Company’s consolidated statements of cash flows also include net (gains) losses on coffee-related derivative instruments designated as cash flow hedges reclassified to cost of goods sold from AOCI in the three and nine months ended March 31, 2023 and 2022. Gains and losses on coffee-related derivative instruments not designated as accounting hedges are included in “Other, net” in the Company’s consolidated statements of operations and in Net losses (gains) on derivative instruments in the Company’s consolidated statements of cash flows.
10

Farmer Bros. Co.
Notes to Unaudited Consolidated Financial Statements (continued)

Net gains and losses recorded in “Other, net” are as follows:

|  | Three Months Ended March 31, |  | Nine Months Ended March 31,
(In thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Net gains (losses) on coffee-related derivative instruments (1) |  | $ | 1,424 |  |  | $ | 665 |  |  | $ | (2,181) |  |  | $ | 3,087 |
Non-operating pension and other postretirement benefits |  | 727 |  |  | 896 |  |  | 2,182 |  |  | 2,685 |
Other gains, net |  | 302 |  |  | 18 |  |  | 790 |  |  | 18 |
Other, net |  | $ | 2,453 |  |  | $ | 1,579 |  |  | $ | 791 |  |  | $ | 5,790 |

___________
(1) Excludes net gains and losses on coffee-related derivative instruments designated as cash flow hedges recorded in cost of goods sold in the three and nine months ended March 31, 2023 and 2022.
Statement of Comprehensive Income (Loss)
The following table provides the balances and changes in accumulated other comprehensive income (loss) related to derivative instruments for the indicated periods:

|  | Three Months Ended March 31, |  | Nine Months Ended March 31,
(In thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Accumulated other comprehensive income (loss) beginning balance |  | $ | 2,436 |  |  | $ | (10,157) |  |  | $ | (1,692) |  |  | $ | (4,176) |
Net (losses) gains recognized from AOCI to earnings - Interest rate swap |  | (1) |  |  | (1) |  |  | 385 |  |  | (6) |
Net losses reclassified from AOCI to earnings for partial unwind of interest swap - Interest rate swap |  | (266) |  |  | (293) |  |  | (1,218) |  |  | (910) |
Net (gains) losses recognized in AOCI - Coffee-related |  | (819) |  |  | (383) |  |  | 1,993 |  |  | (11,374) |
Net gains recognized in earnings - Coffee - related |  | 331 |  |  | 3,110 |  |  | 2,213 |  |  | 8,742 |
Accumulated other comprehensive income (loss) ending balance |  | $ | 1,681 |  |  | $ | (7,724) |  |  | $ | 1,681 |  |  | $ | (7,724) |

Offsetting of Derivative Assets and Liabilities
The Company has agreements in place that allow for the financial right of offset for derivative assets and liabilities at settlement or in the event of default under the agreements. Additionally, under certain coffee derivative agreements, the Company maintains accounts with its counterparties to facilitate financial derivative transactions in support of its risk management activities.
The following table presents the Company’s net exposure from its offsetting derivative asset and liability positions, as well as cash collateral on deposit with its counterparties as of the reporting dates indicated:

(In thousands) |  |  |  | Gross Amount Reported on Balance Sheet |  | Netting Adjustments |  | Cash Collateral Posted |  | Net Exposure
March 31, 2023 |  | Derivative Assets |  | $ | 1,766 |  |  | $ | (833) |  |  | $ | — |  |  | $ | 933 |
|  | Derivative Liabilities |  | 1,560 |  |  | (833) |  |  | — |  |  | 727 |
June 30, 2022 |  | Derivative Assets |  | 3,365 |  |  | (2,349) |  |  | — |  |  | 1,016 |
|  | Derivative Liabilities |  | 2,349 |  |  | (2,349) |  |  | — |  |  | — |

Cash Flow Hedges
Changes in the fair value of the Company’s coffee-related derivative instruments designated as cash flow hedges are deferred in AOCI and subsequently reclassified into cost of goods sold in the same period or periods in which the hedged forecasted purchases affect earnings, or when it is probable that the hedged forecasted transaction will not occur by the end of the originally specified time period. Based on recorded values at March 31, 2023, $1.1 million of net losses on coffee-related derivative instruments designated as a cash flow hedge are expected to be reclassified into cost of goods sold within the next twelve months. These recorded values are based on market prices of the commodities as of March 31, 2023.
The Company had designated the Rate Swap derivative instrument as a cash flow hedge; however, during the three months ended September 30, 2020, the Company de-designated the Rate Swap derivative instrument. The frozen AOCI is subsequently reclassified into interest expense in the period or periods when the hedged transaction affects earnings or when it is probable that the hedged forecasted transaction will not occur by the end of the originally specified time period. As of March 31, 2023, $0.5 million of net losses on the Rate Swap de-designated as a cash flow hedge are expected to be reclassified into interest expense within the next twelve months.
11

Farmer Bros. Co.
Notes to Unaudited Consolidated Financial Statements (continued)

Note 5. Fair Value Measurements
Assets and liabilities measured and recorded at fair value on a recurring basis were as follows:

(In thousands) |  | Total |  | Level 1 |  | Level 2 |  | Level 3
March 31, 2023 |  |  |  |  |  |  |  |
Derivative instruments designated as cash flow hedges: |  |  |  |  |  |  |  |
Coffee-related derivative assets (1) |  | $ | 106 |  |  | $ | — |  |  | $ | 106 |  |  | $ | — |
Coffee-related derivative liabilities (1) |  | 3 |  |  | — |  |  | 3 |  |  | — |
Derivative instruments not designated as accounting hedges: |  |  |  |  |  |  |  |
Coffee-related derivative assets (1) |  | 727 |  |  | — |  |  | 727 |  |  | — |
Coffee-related derivative liabilities (1) |  | 1,557 |  |  | — |  |  | 1,557 |  |  | — |
Interest rate swap derivative asset (2) |  | 933 |  |  | — |  |  | 933 |  |  | — |
|  | Total |  | Level 1 |  | Level 2 |  | Level 3
June 30, 2022 |  |  |  |  |  |  |  |
Derivative instruments designated as cash flow hedges: |  |  |  |  |  |  |  |
Coffee-related derivative assets (1) |  | $ | 2,181 |  |  | $ | — |  |  | $ | 2,181 |  |  | $ | — |
Coffee-related derivative liabilities (1) |  | 3 |  |  | — |  |  | 3 |  |  | — |
Derivative instruments not designated as accounting hedges: |  |  |  |  |  |  |  |
Coffee-related derivative assets (1) |  | 695 |  |  | — |  |  | 695 |  |  | — |
Coffee-related derivative liabilities (1) |  | 2,346 |  |  | — |  |  | 2,346 |  |  | — |
Interest rate swap derivative asset (2) |  | 489 |  |  | — |  |  | 489 |  |  | — |

____________________
(1)The Company's coffee-related derivative instruments are traded over-the-counter and, therefore, classified as Level 2.
(2)The Company's interest rate swap derivative instrument are model-derived valuations with directly or indirectly observable significant inputs such as interest rate and, therefore, classified as Level 2.
Note 6. Accounts Receivable, Net

(In thousands) |  | March 31, 2023 |  | June 30, 2022
Trade receivables |  | $ | 53,824 |  |  | $ | 44,219 |
Other receivables (1) |  | 713 |  |  | 2,911 |
Allowance for credit losses |  | (439) |  |  | (195) |
Accounts receivable, net |  | $ | 54,098 |  |  | $ | 46,935 |

__________
(1) Includes vendor rebates and other non-trade receivables.
There was no material change in the allowance for credit losses during the nine months ended March 31, 2023.
Note 7. Inventories

(In thousands) |  | March 31, 2023 |  | June 30, 2022
Coffee |  |  |  |
Processed |  | $ | 32,095 |  |  | $ | 32,486 |
Unprocessed |  | 23,593 |  |  | 39,326 |
Total |  | $ | 55,688 |  |  | $ | 71,812 |
Tea and culinary products |  |  |  |
Processed |  | 22,210 |  |  | 24,034 |
Unprocessed |  | 71 |  |  | 58 |
Total |  | $ | 22,281 |  |  | $ | 24,092 |
Coffee brewing equipment parts |  | 4,286 |  |  | 3,714 |
Total inventories |  | $ | 82,255 |  |  | $ | 99,618 |

In addition to product cost, inventory costs include expenditures such as direct labor and certain supply, freight, warehousing, overhead variances, purchase price variance and other expenses incurred in bringing the inventory to its existing condition and location. The “Unprocessed” inventory values as stated in the above table represent the value of raw materials and the “Processed” inventory values represent all other products consisting primarily of finished goods.
12

Farmer Bros. Co.
Notes to Unaudited Consolidated Financial Statements (continued)

Note 8. Property, Plant and Equipment

(In thousands) |  | March 31, 2023 |  | June 30, 2022
Buildings and facilities |  | $ | 93,115 |  |  | $ | 92,948 |
Machinery, vehicles and equipment |  | 218,760 |  |  | 219,095 |
Capitalized software |  | 11,819 |  |  | 25,467 |
Office furniture and equipment |  | 12,225 |  |  | 14,347 |
|  | $ | 335,919 |  |  | $ | 351,857 |
Accumulated depreciation |  | (215,573) |  |  | (224,760) |
Land |  | 11,053 |  |  | 11,053 |
Property, plant and equipment, net |  | $ | 131,399 |  |  | $ | 138,150 |

Coffee Brewing Equipment (“CBE”) and Service
Capitalized CBE included in machinery and equipment above are:

(In thousands) |  | March 31, 2023 |  | June 30, 2022
Coffee Brewing Equipment |  | $ | 94,105 |  |  | $ | 93,549 |
Accumulated depreciation |  | (68,064) |  |  | (68,938) |
Coffee Brewing Equipment, net |  | $ | 26,041 |  |  | $ | 24,611 |

Depreciation expense related to capitalized CBE and other CBE related expenses provided to customers and reported in cost of goods sold were as follows:

|  | Three Months Ended March 31, |  | Nine Months Ended March 31,
(In thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Depreciation expense in COGS |  | $ | 1,785 |  |  | $ | 1,829 |  |  | $ | 5,403 |  |  | $ | 5,698 |
CBE Costs excl. depreciation exp |  | 8,950 |  |  | 6,479 |  |  | 23,370 |  |  | 18,242 |

Other expenses related to CBE provided to customers, such as the cost of servicing that equipment (including service employees’ salaries, cost of transportation and the cost of supplies and parts), are considered directly attributable to the generation of revenues from the customers. Therefore, these costs are included in cost of goods sold.
Note 9. Intangible Assets
The following is a summary of the Company’s amortized and unamortized intangible assets:

|  |  |  | March 31, 2023 |  | June 30, 2022
(In thousands) |  | Weighted Average Amortization Period as of March 31, 2023 |  | Gross Carrying Amount |  | Accumulated Amortization |  |  |  | Net |  | Gross Carrying Amount |  | Accumulated Amortization |  |  | Net
Amortized intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  | 4.0 |  | $ | 33,003 |  |  | $ | (23,542) |  |  |  |  | $ | 9,461 |  |  | $ | 33,003 |  |  | $ | (21,893) |  |  |  | $ | 11,110 |
Recipes |  | 0.6 |  | 930 |  |  | (852) |  |  |  |  | 78 |  |  | 930 |  |  | (752) |  |  |  | 178 |
Trade name/brand name |  | 0.7 |  | 510 |  |  | (485) |  |  |  |  | 25 |  |  | 510 |  |  | (457) |  |  |  | 53 |
Total amortized intangible assets |  |  |  | $ | 34,443 |  |  | $ | (24,879) |  |  |  |  | $ | 9,564 |  |  | $ | 34,443 |  |  | $ | (23,102) |  |  |  | $ | 11,341 |
Unamortized intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trademarks, trade names and brand name with indefinite lives |  |  |  | $ | 4,522 |  |  | $ | — |  |  |  |  | $ | 4,522 |  |  | $ | 4,522 |  |  | $ | — |  |  |  | $ | 4,522 |
Total unamortized intangible assets |  |  |  | $ | 4,522 |  |  | $ | — |  |  |  |  | $ | 4,522 |  |  | $ | 4,522 |  |  | $ | — |  |  |  | $ | 4,522 |
Total intangible assets |  |  |  | $ | 38,965 |  |  | $ | (24,879) |  |  |  |  | $ | 14,086 |  |  | $ | 38,965 |  |  | $ | (23,102) |  |  |  | $ | 15,863 |

Aggregate amortization expense for the three months ended March 31, 2023 and 2022 was $0.6 million in each period. Aggregate amortization expense for the nine months ended March 31, 2023 and 2022 was $1.8 million in each period.
13

Farmer Bros. Co.
Notes to Unaudited Consolidated Financial Statements (continued)

Note 10. Employee Benefit Plans
Single Employer Pension Plans
As of March 31, 2023, the Company has two defined benefit pension plans for certain employees, the "Farmer Bros. Plan" and the “Hourly Employees' Plan”. The Company froze benefit accruals and participation in these plans effective June 30, 2011 and October 1, 2016, respectively. After the plan freezes, participants do not accrue any benefits under the plan, and new hires are not eligible to participate in the plan.
The net periodic benefit cost (credit) for the defined benefit pension plans is as follows:

|  | Three Months Ended March 31, |  | Nine Months Ended March 31,
(In thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Interest cost |  | $ | 1,156 |  |  | $ | 848 |  |  | $ | 3,468 |  |  | $ | 2,544 |
Expected return on plan assets |  | (1,009) |  |  | (1,237) |  |  | (3,027) |  |  | (3,711) |
Amortization of net loss (1) |  | 281 |  |  | 339 |  |  | 844 |  |  | 1,017 |
Net periodic benefit cost (credit) |  | $ | 428 |  |  | $ | (50) |  |  | $ | 1,285 |  |  | $ | (150) |

___________
(1) These amounts represent the estimated portion of the net loss in AOCI that is expected to be recognized as a component of net periodic benefit cost over the current fiscal year.
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost

|  | March 31, 2023 |  | June 30, 2022
Discount rate |  | 4.50% |  | 2.60%
Expected long-term return on plan assets |  | 6.50% |  | 6.25%

Multiemployer Pension Plans
The Company participates in one multiemployer defined benefit pension plan that is union sponsored and collectively bargained for the benefit of certain employees subject to collective bargaining agreements, called the Western Conference of Teamsters Pension Plan ("WCTPP"). The Company makes contributions to this plan generally based on the number of hours worked by the participants in accordance with the provisions of negotiated labor contracts. The company also contributes to two defined contribution pension plans (All Other Plans) that are union sponsored and collectively bargained for the benefit of certain employees subject to collective bargaining agreements.
Contributions made by the Company to the multiemployer pension plans were as follows:

|  | Three Months Ended March 31, |  | Nine Months Ended March 31,
(In thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Contributions to WCTPP |  | $ | 313 |  |  | $ | 275 |  |  | $ | 978 |  |  | $ | 679 |
Contributions to All Other Plans |  | 6 |  |  | 7 |  |  | 22 |  |  | 19 |

Multiemployer Plans Other Than Pension Plans
The Company participates in nine multiemployer defined contribution plans other than pension plans that provide medical, vision, dental and disability benefits for active, union-represented employees subject to collective bargaining agreements. The plans are subject to the provisions of the Employee Retirement Income Security Act of 1974, and provide that participating employers make monthly contributions to the plans in an amount as specified in the collective bargaining agreements. Also, the plans provide that participants make self-payments to the plans, the amounts of which are negotiated through the collective bargaining process. The Company’s participation in these plans is governed by collective bargaining agreements which expire on or before January 31, 2025.
401(k) Plan
Farmer Bros. Co. 401(k) Plan (the “401(k) Plan”) is available to all eligible employees. The 401(k) Plan match portion is available to all eligible employees who have worked more than 1,000 hours during a calendar year and were employed at the end of the calendar year. Participants in the 401(k) Plan may choose to contribute a percentage of their annual pay subject to the maximum contribution allowed by the Internal Revenue Service. The Company's matching contribution is discretionary, based on approval by the Company's Board of Directors.
Beginning in July 2021, the Company re-instated a 401(k) Plan matching program (the “401(k) Match”) for non-union employees, by matching 50% of any non-union employee's annual contribution to the 401(k) Plan, up to 6% of such employee's eligible income, which is substantially similar to the program prior to its suspension in March 2020.
14

Farmer Bros. Co.
Notes to Unaudited Consolidated Financial Statements (continued)

Beginning in January 2022, the Company amended the 401(k) Match, whereby the Company on a quarterly basis, will contribute, instead of cash, shares of the Company’s common stock, par value $1.00 per share (the “Common Stock”) with a value equal to 50% of any non-union employee's annual contribution to the 401(k) Plan, up to 6% of such employee's eligible income. The terms of the match are substantially the same as the safe-harbor non-elective contribution. The Company recorded matching contributions of $0.4 million and $1.5 million in operating expenses in the three and nine months ended March 31, 2023, respectively and $0.5 million and $1.6 million in operating expenses in the three and nine months ended March 31, 2022, respectively. Effective January 1, 2023, the Company eliminated the 4% non-elective contribution and changed the Company match to 100% of the first 3% each eligible employee contributes plus 50% on the next 2% they contribute.
During the three months ended March 31, 2023 and 2022, the Company contributed a total of 271,838 and 90,329 of shares Common Stock with a value of $0.5 million and $0.6 million, respectively, to eligible participants’ annual plan compensation. During the nine months ended March 31, 2023 and 2022, the Company contributed a total of 793,602 and 224,363 of shares Common Stock with a value of $1.6 million and $1.8 million, respectively, to eligible participants’ annual plan compensation.
Effective January 1, 2022, the Company amended the 401(k) Plan to, among other things, increase the number of shares of Common Stock available for issuance under the 401(k) Plan by 2,000,000 additional shares of Common Stock and permit participants in the 401(k) Plan to invest a portion of their 401(k) Plan accounts into Common Stock.
Effective January 1, 2022, the Company merged the Company’s Employee Stock Ownership Plan (“ESOP”) into the 401(k) Plan and transferred all of the assets and shares in the ESOP to the 401(k) Plan.
Postretirement Benefits
Retiree Medical Plan and Death Benefit
On March 23, 2020, the Company announced a plan to amend and terminate the postretirement medical benefit plan that covers qualified non-union retirees and certain qualified union retirees (“Retiree Medical Plan”) effective January 1, 2021. As a result, the re-measurement generated a prior service credit. This credit, along with actuarial gains, were amortized over the remaining months of the plan through January 1, 2021. The Retiree Medical Plan is now terminated.
The Company provides a postretirement death benefit (the “Death Benefit” Plan) to certain employees and retirees, subject, in the case of current employees, to continued employment with the Company until retirement and certain other conditions related to the manner of employment termination and manner of death. In June 2021, the Company amended the Death Benefit Plan effective immediately, which triggered re-measurement of the plan. In conjunction with the amendment, the Company created a new Executive Death Benefit Plan (the “Executive Death Benefit Plan”) for a small group of participants in the Death Benefit Plan. Under the Executive Death Benefit Plan, the participants receive the same benefits they would have received under the Death Benefit Plan.
The following table shows the components of net periodic postretirement benefit cost for the Retiree Medical Plan and Death Benefit Plan for the three and nine months ended March 31, 2023 and 2022.

|  | Three Months Ended March 31, |  | Nine Months Ended March 31,
(In thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Components of Net Periodic Postretirement Benefit Cost: |  |  |  |  |  |
Service cost |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Interest cost |  | 10 |  |  | 7 |  |  | 29 |  |  | 20 |
Amortization of net gain |  | — |  |  | 2 |  |  | — |  |  | 8 |
Net periodic postretirement benefit cost |  | $ | 10 |  |  | $ | 9 |  |  | $ | 29 |  |  | $ | 28 |

Weighted-Average Assumptions Used to Determine Net Periodic Postretirement Benefit Cost

|  | Fiscal year
|  | 2023 |  | 2022
Retiree Medical Plan discount rate |  | N/A |  | N/A
Death Benefit Plan discount rate |  | 4.77% |  | 2.72%

15

Farmer Bros. Co.
Notes to Unaudited Consolidated Financial Statements (continued)

Note 11. Debt Obligations
The following table summarizes the Company’s debt obligations:

|  |  |  |  |  |  |  | March 31, 2023 |  | June 30, 2022
(In thousands) |  | Debt Origination Date |  | Maturity |  | Principal Borrowing Amount |  | Carrying Value |  | Weighted Average Interest Rate (1) |  | Carrying Value |  | Weighted Average Interest Rate (1)
Revolver |  | Various |  | 4/26/2027 |  | N/A |  | $ | 67,000 |  |  | 6.15 | % |  | $ | 63,000 |  |  | 2.75 | %
Term Loan |  | 8/31/2022 |  | 4/26/2027 |  | $47,000 |  | 45,433 |  |  |  |  | 45,600 |  |  |
|  |  |  |  |  |  |  | 112,433 |  |  |  |  | 108,600 |  |  |
Unamortized deferred debt financing costs |  |  |  |  |  | (888) |  |  |  |  | (1,677) |  |  |
Total |  |  |  |  |  |  |  | $ | 111,545 |  |  |  |  | $ | 106,923 |  |  |

__________
(1) The weighted average interest rate excludes the fixed rate on the de-designated Amended Rate Swap
Revolver Facility
On April 26, 2021, the Company entered into a senior secured facility which included a Revolver Credit Facility Agreement (the "Revolver Credit Facility"). The Revolver Credit Facility had a commitment of up to $80.0 million and a maturity date of April 25, 2025. On August 8, 2022, the Company and certain of its subsidiaries entered into the Increase Joinder and Amendment No. 2 to Credit Agreement (the “2nd Amendment”), with Wells Fargo, as administrative agent for each member of the lender group and as a lender. The 2nd Amendment amends certain terms and conditions of the Revolver Credit Facility by, among other things: (i) increasing the maximum revolver amount by $10.0 million to an aggregate maximum revolver commitment amount of $90.0 million; and (ii) 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).
Availability under the Revolver Credit Facility is calculated as the lesser of (a) $90.0 million or (b) the amount equal to the sum of (i) 85% of eligible accounts receivable (less a dilution reserve), plus (ii) the lesser of: (a) 80% of eligible raw material inventory, eligible in-transit inventory and eligible finished goods inventory (collectively, “Eligible Inventory”), and (b) 85% of the net orderly liquidation value of eligible inventory, minus (c) applicable reserve.
The Revolver Credit Facility contains customary affirmative and negative covenants and restrictions typical for a financing of this type. Non-compliance with one or more of the covenants and restrictions could result in the full or partial principal balance of the Revolver Credit Facility becoming immediately due and payable and termination of the commitments.
Prior Term Loan Facility
On April 26, 2021, the Company borrowed $47.5 million of term loans from various financial institutions as part of a Credit Agreement, dated as of April 26, 2021 (the “Prior Term Loan Facility”). The following is a summary description of the Prior Term Loan Facility:
1.total commitment of $47.5 million in the form of a term loan;
2.maturity date of April 25, 2025 and scheduled payback required on the principal prior to the maturity date;
3.fully collateralized by all existing and future capital stock of the borrowers (other than the Company) and all of the borrowers' personal and real property;
4.interest under the Term Loan is either LIBOR + 6.5% per annum, or (b) base rate + 5.50% per annum, with a 3% floor on base rate; and
5.commencing on the fiscal quarter ending on March 31, 2022, quarterly minimum EBITDA and fixed charge coverage ratio requirements specified therein.
Principal payments on the Prior Term Loan Facility were due quarterly in the amount of $0.95 million.
New Term Loan Facility
On August 31, 2022, the Company entered into Amendment No. 3 to Credit Agreement (the “3rd Amendment”), with the lenders party thereto, and Wells Fargo Bank, as administrative agent for each member of the lender group and as a lender. The 3rd Amendment amends certain terms and conditions of the Revolver Credit Facility by, among other things: (i) adding a new $47.0 million term loan (the “Term Loan”); (ii) extending the maturity date of the Company’s obligations under the Revolver Credit Facility from April 25, 2025 to April 26, 2027; provided, that if the maturity date of the Revolver Commitments is extended on or prior to April 1, 2027 to a date that is after April 26, 2027, then the maturity of the Term
16

Farmer Bros. Co.
Notes to Unaudited Consolidated Financial Statements (continued)

Loan Facility shall be August 31, 2037; (iii) releasing liens securing the obligations under the Revolver Facility Credit on various real properties owned by the Company; (iv) commencing on or around June 30, 2023, obligating the Company to maintain a Fixed Charge Coverage Ratio, calculated for each 12-month period ending on the last day of each fiscal month, of at least 1:00 to 1:00; and (v) lowering the Letter of Credit Fee payable with respect to letters of credit issued under the Credit Agreement from 2.25% to 1.75% of the average amount of the Letter of Credit Usage during the immediately preceding month.
The proceeds of the Term Loan Facility were used to repay the outstanding term loans under the Term Credit Facility Agreement. With the repayment of the Company’s outstanding loans and other obligations under the Term Credit Facility Agreement, the Company is no longer subject to the minimum EBITDA covenants contained therein. As part of the refinancing transaction, the Company expensed $1.5 million in unamortized deferred financing costs, discount and payoff premium for the nine months ended March 31, 2023, which are included in interest expense on the consolidated statement of operations.
Covenant Compliance
The Term Loan Facility contains customary affirmative and negative covenants and restrictions typical for a financing of this type that, among other things, require the Company to satisfy certain financial covenants and restrict 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. As of March 31, 2023, the Company was in compliance with all of the financial covenants under the Revolver Credit Facility and the Term Loan Facility (collectively, the “Credit Facilities”). Non-compliance with one or more of the covenants and restrictions could result in the full or partial principal balance of the Term Loan Facility Agreement and the Revolver Credit Facility becoming immediately due and payable and termination of the commitments which could impact our liquidity. Accordingly, an event of default could have a material and adverse impact on us. If we are unable to cure, obtain a waiver from the lenders, or refinance the Credit Facilities, we anticipate not being able to meet the current contractual covenant beginning June 30, 2023. We consider it probable that management’s plans, including the options described above, will be able to alleviate the potential noncompliance with the debt covenant prior to June 30, 2023.
Interest Rate Swap
In connection with the Revolver Credit Facility and Prior Term Loan Facility, the Company executed the Amended Rate Swap. Under the terms of the Amended Rate Swap, the Company receives 1-month LIBOR, subject to a 0% floor, and makes payments based on a fixed rate of 2.4725%, an increase of 0.275% from its original interest rate swap fixed rate of 2.1975%. The Amended Rate Swap utilizes the same notional amount of $65.0 million and maturity date of October 11, 2023 as the original interest rate swap.
Beginning with the quarter ended December 31, 2022, the Company is required to make monthly principal payments on the Term Loan debt obligation in the amount of $261 thousand. At March 31, 2023, the Company had outstanding borrowings on the Revolver Credit Facility of $67.0 million and had utilized $4.1 million of the letters of credit sublimit. At March 31, 2023, we had $16.4 million available on our Revolver Credit Facility.
Note 12. Share-based Compensation
Farmer Bros. Co. Amended and Restated 2017 Long-Term Incentive Plan (the “2017 Plan”)
As of March 31, 2023, there were 1,528,077 shares available under the 2017 Plan including shares that were forfeited under the prior plans for future issuance.
On December 15, 2021, the Company’s stockholders approved an amendment (the “Plan Amendment”) to the 2017 Plan, which (i) increased the number of shares of Common Stock available for grant under the Plan by 1,500,000 additional shares of Common Stock and (ii) allows the Company to utilize awards to attract and incentivize non-employee consultants.
Farmer Bros. Co. 2020 Inducement Incentive Award Plan (the “2020 Inducement Plan”)
As of March 31, 2023, there were 60,142 shares available under the 2020 Inducement Plan.
Non-qualified stock options with time-based vesting (“NQOs”)
One-third of the total number of shares subject to each stock option vest ratably on each of the first three anniversaries of the grant date, contingent on continued employment, and subject to accelerated vesting in certain circumstances. There were no NQOs granted during the nine months ended March 31, 2023.
17

Farmer Bros. Co.
Notes to Unaudited Consolidated Financial Statements (continued)

The following table summarizes NQO activity for nine months ended March 31, 2023:

Outstanding NQOs: |  | Number of NQOs |  | Weighted Average Exercise Price ($) |  |  |  | Weighted Average Remaining Life (Years) |  | Aggregate Intrinsic Value ($ in thousands)
Outstanding at June 30, 2022 |  | 450,687 |  |  | 12.39 |  |  |  | 4.34 |  | $ | — |
Granted |  | — |  |  | — |  |  |  | — |  | — |
Exercised |  | — |  |  | — |  |  |  | — |  | — |
Cancelled/Forfeited |  | (21,926) |  |  | 11.92 |  |  |  | — |  | — |
Expired |  | (35,174) |  |  | 18.99 |  |  |  | — |  | — |
Outstanding at March 31, 2023 |  | 393,587 |  |  | 11.83 |  |  |  | 3.05 |  | $ | — |
Exercisable at March 31, 2023 |  | 363,498 |  |  | 12.25 |  |  |  | 2.98 |  | $ | — |

The aggregate intrinsic values outstanding at the end of period in the table above represent the total pretax intrinsic values, based on the closing price of Common Stock of $3.86 and $4.69 at March 31, 2023 and June 30, 2022, respectively, representing the last trading day of the respective periods, which would have been received by NQO holders had all award holders exercised their NQOs that were in-the-money as of those dates. NQOs outstanding that are expected to vest are net of estimated forfeitures.
There were no options exercised during nine months ended March 31, 2023 and 2022.
At March 31, 2023 and June 30, 2022, respectively, there was $6 thousand and $0.2 million of unrecognized NQO compensation cost. The unrecognized NQO compensation cost at March 31, 2023 is expected to be recognized over the weighted average period of one month. Total compensation expense for NQOs was $5 thousand and $0.1 million for the three months ended March 31, 2023 and 2022, respectively. Total compensation expense for NQOs was $0.1 million and $0.4 million for the nine months ended March 31, 2023 and 2022, respectively.
Non-qualified stock options with performance-based and time-based vesting (“PNQs”)
The following table summarizes PNQ activity for the nine months ended March 31, 2023:

Outstanding PNQs: |  | Number of PNQs |  | Weighted Average Exercise Price ($) |  |  |  | Weighted Average Remaining Life (Years) |  | Aggregate Intrinsic Value ($ in thousands)
Outstanding at June 30, 2022 |  | 2,212 |  |  | 30.91 |  |  |  | 0.83 |  | $ | — |
Granted |  | — |  |  | — |  |  |  | — |  | — |
Exercised |  | — |  |  | — |  |  |  | — |  | — |
Cancelled/Forfeited |  | — |  |  | — |  |  |  | — |  | — |
Expired |  | (1,221) |  |  | 29.48 |  |  |  | — |  | — |
Outstanding at March 31, 2023 |  | 991 |  |  | 32.84 |  |  |  | 0.61 |  | $ | — |
Exercisable at March 31, 2023 |  | 991 |  |  | 32.85 |  |  |  | 0.61 |  | $ | — |

The aggregate intrinsic values outstanding at the end of each fiscal period in the table above represent the total pretax intrinsic values, based on the Company’s closing stock price of $3.86 and $4.69 at March 31, 2023 and June 30, 2022, respectively, representing the last trading day of the respective fiscal periods, which would have been received by PNQ holders had all award holders exercised their PNQs that were in-the-money as of those dates.
There were no options exercised during nine months ended March 31, 2023 and 2022.
At March 31, 2023 and June 30, 2022, there was no unrecognized PNQ compensation cost. There was no compensation expense related to PNQs in the three and nine months ended March 31, 2023 and 2022.
18

Farmer Bros. Co.
Notes to Unaudited Consolidated Financial Statements (continued)

Restricted Stock
The following table summarizes restricted stock activity for the nine months ended March 31, 2023:

Outstanding and Nonvested Restricted Stock Awards: |  | Shares Awarded |  | Weighted Average Grant Date Fair Value ($) |  |  |  |
Outstanding and nonvested at June 30, 2022 |  | 816,811 |  |  | 6.67 |  |  |  |  |
Granted |  | 680,579 |  |  | 5.68 |  |  |  |  |
Vested/Released |  | (312,925) |  |  | 6.70 |  |  |  |  |
Cancelled/Forfeited |  | (226,437) |  |  | 6.55 |  |  |  |  |
Outstanding and nonvested at March 31, 2023 |  | 958,028 |  |  | 6.11 |  |  |  |  |

The weighted average grant date fair value of RSUs granted during the quarters ended March 31, 2023 and 2022 were $5.68 and $8.18, respectively. The total grant-date fair value of restricted stock granted during the nine months ended March 31, 2023 was $4.0 million. The total fair value of awards vested during the nine months ended March 31, 2023 and 2022 were $1.6 million and $2.2 million, respectively.
At March 31, 2023 and June 30, 2022, there was $4.4 million and $3.9 million, respectively, of unrecognized compensation cost related to restricted stock. The unrecognized compensation cost related to restricted stock at March 31, 2023 is expected to be recognized over the weighted average period of 1.9 years. Total compensation expense for restricted stock was $0.5 million and $0.5 million, respectively, in the three months ended March 31, 2023 and 2022. Total compensation expense for restricted stock was $1.9 million and $1.5 million, respectively, in the nine months ended March 31, 2023 and 2022.
Performance-Based Restricted Stock Units (“PBRSUs”)
The following table summarizes PBRSU activity for the nine months ended March 31, 2023:

Outstanding and Nonvested PBRSUs: |  | PBRSUs Awarded (1) |  | Weighted Average Grant Date Fair Value ($) |  |  |  |
Outstanding and nonvested at June 30, 2022 |  | 456,993 |  |  | 6.16 |  |  |  |  |
Granted (1) |  | 214,842 |  |  | 6.40 |  |  |  |  |
Vested/Released |  | — |  |  | — |  |  |  |  |
Cancelled/Forfeited |  | (122,544) |  |  | 7.64 |  |  |  |  |
Outstanding and nonvested at March 31, 2023 |  | 549,291 |  |  | 5.92 |  |  |  |  |

_____________
(1) The target number of PBRSUs is presented in the table. Under the terms of the awards, the recipient may earn between 0% and 200% of the target number of PBRSUs depending on the extent to which the Company meets or exceeds the achievement of the applicable financial performance goals.
The weighted average grant date fair value of PBRSUs granted during the quarters ended March 31, 2023 and 2022 were $6.40 and $8.91, respectively. The total grant-date fair value of PBRSUs granted during the nine months ended March 31, 2023 was $1.4 million. The total fair value of awards vested during the nine months ended March 31, 2022 were $3 thousand.
At March 31, 2023 and June 30, 2022, there was $1.9 million and $1.7 million, respectively, of unrecognized PBRSU compensation cost. The unrecognized PBRSU compensation cost at March 31, 2023 is expected to be recognized over the weighted average period of 1.9 years. Total compensation expense for PBRSUs was $0.1 million and $0.2 million, respectively, for the three months ended March 31, 2023 and 2022. Total compensation expense for PBRSUs was $0.5 million and $0.5 million, respectively, for the nine months ended March 31, 2023 and 2022.
Cash-Settled Restricted Stock Units (“CSRSUs”)
CSRSUs vest in equal installments over a three-year period from the grant date, and are cash-settled upon vesting based on the closing share price of Common Stock on the vesting date.
The CSRSUs are accounted for as liability awards, and compensation expense is measured at fair value on the date of grant and recognized on a straight-line basis over the vesting period net of forfeitures. Compensation expense is remeasured at each reporting date with a cumulative adjustment to compensation cost during the period based on changes in the closing share price of Common Stock.
19

Farmer Bros. Co.
Notes to Unaudited Consolidated Financial Statements (continued)

The following table summarizes CSRSU activity for the nine months ended March 31, 2023:

Outstanding and Nonvested CSRSUs: |  | CSRSUs Awarded |  | Weighted Average Grant Date Fair Value ($) |  |  |  |
Outstanding and nonvested at June 30, 2022 |  | 145,645 |  |  | 6.36 |  |  |  |  |
Granted |  | 178,099 |  |  | 6.40 |  |  |  |  |
Vested/Released |  | (42,670) |  |  | 6.24 |  |  |  |  |
Cancelled/Forfeited |  | (90,685) |  |  | 6.26 |  |  |  |  |
Outstanding and nonvested at March 31, 2023 |  | 190,389 |  |  | 6.47 |  |  |  |  |

The weighted average grant date fair value of CSRSUs granted during the quarters ended March 31, 2023 and 2022 were $6.40 and $8.91, respectively. The total grant-date fair value of CSRSUs granted during the nine months ended March 31, 2023 was $1.1 million. The total fair value of awards vested during the nine months ended March 31, 2023 and 2022 was $0.2 million and $0.4 million, respectively.
At March 31, 2023 and June 30, 2022, there was $0.6 million and $0.6 million, respectively, of unrecognized compensation cost related to CSRSU. The unrecognized compensation cost related to CSRSU at March 31, 2023 is expected to be recognized over the weighted average period of 2.3 years. Total compensation expense for CSRSUs was $38 thousand and $25 thousand, respectively for the three months ended March 31, 2023 and 2022. Total compensation expense for CSRSUs was $0.2 million and $0.1 million, respectively for the nine months ended March 31, 2023 and 2022.
Note 13. Other Current Liabilities
Other current liabilities consist of the following:

(In thousands) |  | March 31, 2023 |  | June 30, 2022
Accrued workers’ compensation liabilities |  | $ | 827 |  |  | $ | 947 |
Finance lease liabilities |  | 193 |  |  | 193 |
Other (1) |  | 3,505 |  |  | 4,955 |
Other current liabilities |  | $ | 4,525 |  |  | $ | 6,095 |

_________
(1) Includes accrued property taxes, sales and use taxes and insurance liabilities.
Note 14. Other Long-Term Liabilities
Other long-term liabilities include the following:

(In thousands) |  | March 31, 2023 |  | June 30, 2022
Deferred compensation (1) |  | $ | 272 |  |  | $ | 195 |
Finance lease liabilities |  | 307 |  |  | 409 |
Deferred income taxes and other liabilities |  | 735 |  |  | 735 |
Other long-term liabilities |  | $ | 1,314 |  |  | $ | 1,339 |

___________
(1) Includes payroll taxes and cash-settled restricted stock units liabilities.
Note 15. Income Taxes
The income tax expense and the related effective tax rates are as follows (in thousands, except effective tax rate):

|  | Three Months Ended March 31, |  | Nine Months Ended March 31,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
Income tax expense |  | $ | 30 |  |  | $ | 90 |  |  | $ | 113 |  |  | $ | 278 |
Effective tax rate |  | (0.3) | % |  | (2.3) | % |  | (0.3) | % |  | (2.4) | %

The Company’s interim tax provision is determined using an estimated annual effective tax rate and adjusted for discrete taxable events that may occur during the quarter. The Company recognizes the effects of tax legislation in the period in which the law is enacted. Deferred tax assets and liabilities are remeasured using enacted tax rates expected to apply to taxable income in the years the Company estimates the related temporary differences to reverse. The Company evaluates its deferred tax assets quarterly to determine if a valuation allowance is required. In making such assessment, significant weight is given to evidence that can be objectively verified, such as recent operating results, and less consideration is given to less objective indicators such as future income projections.
20

Farmer Bros. Co.
Notes to Unaudited Consolidated Financial Statements (continued)

Tax expense in the three months ended March 31, 2023 was $30 thousand compared to $90 thousand in the three months ended March 31, 2022, which primarily relates to state income tax expense in certain jurisdictions. Tax expense in the nine months ended March 31, 2023 was $0.1 million compared to $0.3 million in the nine months ended March 31, 2022, which primarily relates to state income tax expense in certain jurisdictions.
The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by U.S. federal, state and local tax authorities. With limited exceptions, as of March 31, 2023, the Company is no longer subject to income tax audits by taxing authorities for any years prior to 2019. Although the outcome of tax audits is always uncertain, the Company does not believe the outcome of any future audit will have a material adverse effect on the Company’s consolidated financial statements.
Note 16. Net Loss Per Common Share
Basic net loss per common share is calculated by dividing net loss attributable to the Company by the weighted average number of common shares outstanding during the periods presented. Diluted net loss per common share is calculated by dividing diluted net loss attributable to the Company by the weighted average number of common shares outstanding adjusted to include the effect, if dilutive, of the exercise of in-the-money stock options, unvested performance-based restricted stock units, and shares of the Company’s Series A Convertible Participating Cumulative Perpetual Preferred Stock, par value $1.00 per share (“Series A Preferred Stock”), as converted, during the periods presented. The calculation of dilutive shares outstanding excludes out-of-the-money stock options (i.e., such option’s exercise prices were greater than the average market price of our common shares for the period) and unvested performance-based restricted stock units because their inclusion would have been anti-dilutive.
The following table presents the computation of basic and diluted net earnings loss per common share:

|  | Three Months Ended March 31, |  | Nine Months Ended March 31,
(In thousands, except share and per share amounts) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Undistributed net loss available to common stockholders |  | $ | (11,423) |  |  | $ | (3,993) |  |  | $ | (32,404) |  |  | $ | (11,854) |
Undistributed net loss available to nonvested restricted stockholders and holders of convertible preferred stock |  | — |  |  | (196) |  |  | — |  |  | (474) |
Net loss available to common stockholders - basic |  | $ | (11,423) |  |  | $ | (4,189) |  |  | $ | (32,404) |  |  | $ | (12,328) |
Weighted average common shares outstanding - basic |  | 19,923,577 |  |  | 18,289,815 |  |  | 19,467,022 |  |  | 18,118,469 |
Effect of dilutive securities: |  |  |  |  |  |  |  |
Shares issuable under stock options |  | — |  |  | — |  |  | — |  |  | — |
Weighted average common shares outstanding - diluted |  | 19,923,577 |  |  | 18,289,815 |  |  | 19,467,022 |  |  | 18,118,469 |
Net loss available to common stockholders per common share—basic |  | $ | (0.57) |  |  | $ | (0.23) |  |  | $ | (1.66) |  |  | $ | (0.68) |
Net loss available to common stockholders per common share—diluted |  | $ | (0.57) |  |  | $ | (0.23) |  |  | $ | (1.66) |  |  | $ | (0.68) |

The following table summarizes weighted average anti-dilutive securities excluded from the computation of diluted net loss per common share for the periods indicated:

|  | Three Months Ended March 31, |  | Nine Months Ended March 31,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
Shares issuable under stock options |  | 393,587 |  |  | 467,124 |  |  | 393,587 |  |  | 471,380 |
Shares issuable under convertible preferred stock |  | — |  |  | 448,741 |  |  | — |  |  | 448,741 |
Shares issuable under PBRSUs |  | 549,291 |  |  | 495,073 |  |  | 472,392 |  |  | 454,110 |

Note 17. Preferred Stock
The Company is authorized to issue 500,000 shares of preferred stock at a par value of $1.00, including 21,000 authorized shares of Series A Preferred Stock. There are no preferred shares issued and outstanding as of March 31, 2023.
Effective August 25, 2022, 12,964 shares of Series A Preferred Stock were converted into 399,208 shares of common stock at a conversion price of $38.32, in accordance with the terms of the Company’s Designation of Series A Preferred Stock. The terms of the Series A Preferred Stock are disclosed in Note 20 to the Consolidated Financial Statements included in the 2022 Form 10-K.
The shares of Series A Preferred Stock were originally issued to Boyd Coffee Company (now known as BCC Newco, Inc.) (“BCC”), on October 2, 2017, pursuant to that certain Asset Purchase Agreement, dated as of August 18, 2017 (the
21

Farmer Bros. Co.
Notes to Unaudited Consolidated Financial Statements (continued)

“Purchase Agreement”), by and among the Company, Boyd Assets Co., a Delaware corporation and wholly owned subsidiary of the Company, BCC and each of the parties set forth on Exhibit A thereto. 1,736 shares of Series A Preferred Stock originally issued to BCC in accordance with the terms of the Purchase Agreement were previously reacquired and cancelled by the Company as part of a settlement with BCC on July 26, 2022. The shares of Series A Preferred Stock converted represented all of the issued and outstanding shares of Series A Preferred Stock. The Company withheld 914 shares of Series A Preferred Stock pending satisfaction of certain indemnification claims (“Holdback Shares”) against the Seller.
As a result of the settlement entered into with BCC, the Company recorded a $1.9 million gain on settlement with the sellers, in general and administrative expense on the consolidated statement of operations, which included the cancellation of preferred shares and settlement of acquisition related contingent liabilities.
Note 18. Revenue Recognition
The Company’s primary sources of revenue are sales of coffee, tea and culinary products. The Company recognizes revenue when control of the promised good or service is transferred to the customer and in amounts that the Company expects to collect. The timing of revenue recognition takes into consideration the various shipping terms applicable to the Company’s sales.
The Company delivers products to customers through Direct-store-delivery (“DSD”) to the Company’s customers at their place of business and Direct ship from the Company’s warehouse to the customer’s warehouse, facility or address. Each delivery or shipment made to a third party customer is to satisfy a performance obligation. Performance obligations generally occur at a point in time and are satisfied when control of the goods passes to the customer. The Company is entitled to collection of the sales price under normal credit terms in the regions in which it operates.
The Company disaggregates net sales from contracts with customers based on the characteristics of the products sold:

|  | Three Months Ended March 31, |  | Nine Months Ended March 31,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
(In thousands) |  | $ |  | % of total |  | $ |  | % of total |  | $ |  | % of total |  | $ |  | % of total
Net Sales by Product Category: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Coffee (Roasted) |  | $ | 76,668 |  |  | 61.7 | % |  | $ | 77,503 |  |  | 64.9 | % |  | $ | 237,687 |  |  | 62.8 | % |  | $ | 223,607 |  |  | 64.6 | %
Tea & Other Beverages (1) |  | 23,382 |  |  | 18.8 | % |  | 21,033 |  |  | 17.6 | % |  | 71,014 |  |  | 18.8 | % |  | 62,961 |  |  | 18.2 | %
Culinary |  | 17,225 |  |  | 13.9 | % |  | 13,855 |  |  | 11.6 | % |  | 48,494 |  |  | 12.8 | % |  | 40,843 |  |  | 11.8 | %
Spices |  | 5,777 |  |  | 4.7 | % |  | 5,747 |  |  | 4.8 | % |  | 17,510 |  |  | 4.6 | % |  | 16,005 |  |  | 4.6 | %
Net sales by product category |  | 123,052 |  |  | 99.1 | % |  | 118,138 |  |  | 98.9 | % |  | 374,705 |  |  | 99.0 | % |  | 343,416 |  |  | 99.2 | %
Delivery Surcharge |  | 1,182 |  |  | 0.9 | % |  | 1,260 |  |  | 1.1 | % |  | 3,601 |  |  | 1.0 | % |  | 2,789 |  |  | 0.8 | %
Net sales |  | $ | 124,234 |  |  | 100.0 | % |  | $ | 119,398 |  |  | 100.0 | % |  | $ | 378,306 |  |  | 100.0 | % |  | $ | 346,205 |  |  | 100.0 | %

____________
(1)Includes all beverages other than roasted coffee, including frozen liquid coffee, and iced and hot tea, including cappuccino, cocoa, granitas, and concentrated and ready-to drink cold brew and iced coffee.
The Company does not have any material contract assets and liabilities as of March 31, 2023. Receivables from contracts with customers are included in “Accounts receivable, net” on the Company’s consolidated balance sheets. At March 31, 2023 and June 30, 2022, “Accounts receivable, net” included, $53.8 million and $44.2 million, respectively, in receivables from contracts with customers.
Note 19. Commitments and Contingencies
For a detailed discussion about the Company’s commitments and contingencies, see Note 18, “Commitments and Contingencies” in the Notes to Consolidated Financial Statements in the 2022 Form 10-K. During the nine months ended March 31, 2023, other than the following, or as otherwise disclosed herein, there were no material changes in the Company’s commitments and contingencies.
Purchase Commitments
As of March 31, 2023, the Company had committed to purchase green coffee inventory totaling $71.1 million under fixed-price contracts, and $17.7 million in inventory and other purchases under non-cancelable purchase orders.
22

Farmer Bros. Co.
Notes to Unaudited Consolidated Financial Statements (continued)

Legal Proceedings
Council for Education and Research on Toxics (“CERT”) v. Brad Berry Company Ltd., et al., Superior Court of the State of California, County of Los Angeles
On August 31, 2012, CERT filed an amendment to a private enforcement action adding a number of companies as defendants, including the Company’s subsidiary, Coffee Bean International, Inc., which sell coffee in California under the State of California's Safe Drinking Water and Toxic Enforcement Act of 1986 (“Prop 65”). The suit alleges that the defendants have failed to issue clear and reasonable warnings in accordance with Prop 65 that the coffee they produce, distribute, and sell contains acrylamide. This lawsuit was filed in Los Angeles Superior Court (the “Court”). CERT alleges that the Company and the other defendants failed to provide warnings for their coffee products of exposure to the chemical acrylamide as required under Prop 65. Plaintiff seeks equitable relief and civil penalties in the amount of the statutory maximum of $2,500 per day per violation of Prop 65. The Plaintiff asserts that every consumed cup of coffee, absent a compliant warning, is equivalent to a violation under Prop 65.
The Company, as part of a joint defense group (“JDG”) organized to defend against the lawsuit, disputes the claims of CERT. Acrylamide is not added to coffee but is present in all coffee in small amounts (parts per billion) as a byproduct of the coffee bean roasting process.
A series of procedural and legislative developments occurred in the ensuing years, and at hearings in August 2020 the Court denied CERT’s motion for summary judgment and granted the JDG’s motion for summary judgment. Notice of Judgment in favor of defendants was entered on October 6, 2020. CERT filed an appeal which was denied on October 26, 2022. On December 2, 2022, CERT filed a petition for review with the California Supreme Court which the Court denied on February 15, 2023. On February 23, 2023, the appellate court entered an order affirming the trial court’s decision to grant the JDG’s motion for summary judgment and remitting the case to the trial court to affirm the judgment in favor of the JDG.
The Company believes that the likelihood that the Company will ultimately incur a loss in connection with this litigation is less than reasonably possible.
The Company is a party to various other pending legal and administrative proceedings. It is management’s opinion that the outcome of such proceedings will not have a material impact on the Company’s financial position, results of operations, or cash flows.
Note 20. Sales of Assets
Sale of Branch Property
During the nine months ended March 31, 2023, the Company completed the sale of the following branch properties:

(In thousands) |  |  |  |  |  |  |  |
Name of Branch Property |  | Date Sold |  | Sales Price |  | Net Proceeds |  | Gain on Sale
Portland, Oregon |  | 9/23/2022 |  | $ | 1,990 |  |  | $ | 1,880 |  |  | $ | 1,770 |
San Diego, California |  | 9/19/2022 |  | 7,574 |  |  | 7,169 |  |  | 6,425 |
Fresno, California |  | 10/7/2022 |  | 760 |  |  | 716 |  |  | 648 |
Sacramento, California |  | 2/15/2023 |  | 2,174 |  |  | 2,051 |  |  | 1,941 |

23

Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q and other documents we file with the Securities and Exchange Commission (“SEC”) contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about us, our future performance, our financial condition, our products, our business strategy, our beliefs and our management’s assumptions. In addition, we, or others on our behalf, may make forward-looking statements in press releases or written statements, or in our communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls. These forward-looking statements can be identified by the use of words like “anticipates,” “estimates,” “projects,” “expects,” “plans,” “believes,” “intends,” “will,” “could,” “may,” “assumes” and other words of similar meaning. These statements are based on management’s beliefs, assumptions, estimates and observations of future events based on information available to our management at the time the statements are made and include any statements that do not relate to any historical or current fact. These statements are not guarantees of future performance and they involve certain risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed, implied or forecast by our forward-looking statements due in part to the risks, uncertainties and assumptions set forth in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2022 filed with the SEC on September 2, 2022 (the “2022 Form 10-K”), as well as those discussed elsewhere in this Quarterly Report on Form 10-Q and other factors described from time to time in our filings with the SEC.
Factors that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to, severe weather, levels of consumer confidence in national and local economic business conditions, the impact of labor shortages, the increase of costs due to inflation, an economic downturn caused by any pandemic, epidemic or other disease outbreak, comparable or similar to COVID-19, the success of our turnaround strategy, the impact of capital improvement projects, the adequacy and availability of capital resources to fund our existing and planned business operations and our capital expenditure requirements, our ability to meet financial covenant requirements in our Credit Facilities, which could impact, among other things, our liquidity, the relative effectiveness of compensation-based employee incentives in causing improvements in our performance, the capacity to meet the demands of our large national account customers, the extent of execution of plans for the growth of our business and achievement of financial metrics related to those plans, our success in retaining and/or attracting qualified employees, our success in adapting to technology and new commerce channels, the effect of the capital markets as well as other external factors on stockholder value, fluctuations in availability and cost of green coffee, competition, organizational changes, the effectiveness of our hedging strategies in reducing price and interest rate risk, changes in consumer preferences, our ability to provide sustainability in ways that do not materially impair profitability, changes in the strength of the economy, including any effects from inflation, business conditions in the coffee industry and food industry in general, our continued success in attracting new customers, variances from budgeted sales mix and growth rates, weather and special or unusual events, as well as other risks described in this Quarterly Report on Form 10-Q and other factors described from time to time in our filings with the SEC.
Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results. Any or all of the forward-looking statements contained in this Quarterly Report on Form 10-Q and any other public statement made by us, including by our management, may turn out to be incorrect. We are including this cautionary note to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise, except as required under federal securities laws and the rules and regulations of the SEC.
24

Financial Data Highlights (in thousands, except per share data and percentages)

| Three Months Ended March 31, |  | Favorable (Unfavorable) |  | Nine Months Ended March 31, |  | Favorable (Unfavorable)
| 2023 |  | 2022 |  | Change |  | % Change |  | 2023 |  | 2022 |  | Change |  | % Change
Income Statement Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net sales | $ | 124,234 |  |  | $ | 119,398 |  |  | $4,836 |  | 4.1% |  | $ | 378,306 |  |  | $ | 346,205 |  |  | $32,101 |  | 9.3%
Gross margin | 23.1 | % |  | 29.8 | % |  | (6.7)% |  | NM |  | 22.6 | % |  | 29.5 | % |  | (6.9)% |  | NM
Operating expenses as a % of sales | 30.8 | % |  | 33.1 | % |  | 2.3% |  | NM |  | 28.1 | % |  | 32.4 | % |  | 4.3% |  | NM
Loss from operations | $ | (9,636) |  |  | $ | (3,938) |  |  | $(5,698) |  | (144.7)% |  | $ | (20,651) |  |  | $ | (10,290) |  |  | $(10,361) |  | (100.7)%
Net loss | $ | (11,423) |  |  | $ | (4,040) |  |  | $(7,383) |  | (182.7)% |  | $ | (32,404) |  |  | $ | (11,884) |  |  | $(20,520) |  | (172.7)%
Operating Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Coffee pounds sold | 16,002 |  |  | 18,797 |  |  | (2,795) |  | (14.9)% |  | 50,902 |  |  | 58,466 |  |  | (7,564) |  | (12.9)%
EBITDA (1) | $ | (2,940) |  |  | $ | 2,577 |  |  | $(5,517) |  | (214.1)% |  | $ | (6,631) |  |  | $ | 11,055 |  |  | $(17,686) |  | (160.0)%
EBITDA Margin (1) | (2.4) | % |  | 2.2 | % |  | (4.6)% |  | NM |  | (1.8) | % |  | 3.2 | % |  | (5.0)% |  | NM
Adjusted EBITDA (1) | $ | (776) |  |  | $ | 5,021 |  |  | $(5,797) |  | (115.5)% |  | $ | (8,721) |  |  | $ | 13,009 |  |  | $(21,730) |  | (167.0)%
Adjusted EBITDA Margin (1) | (0.6) | % |  | 4.2 | % |  | (4.8)% |  | NM |  | (2.3) | % |  | 3.8 | % |  | (6.1)% |  | NM
Percentage of Total Net Sales By Product Category |  |  |  |  |  |  |  |  |  |  |  |
Coffee (Roasted) | 61.7 | % |  | 64.9 | % |  | (3.2)% |  | (4.9)% |  | 62.8 | % |  | 64.6 | % |  | (1.8)% |  | (2.8)%
Tea & Other Beverages (2) | 18.8 | % |  | 17.6 | % |  | 1.2% |  | 6.8% |  | 18.8 | % |  | 18.2 | % |  | 0.6% |  | 3.3%
Culinary | 13.9 | % |  | 11.6 | % |  | 2.3% |  | 19.8% |  | 12.8 | % |  | 11.8 | % |  | 1.0% |  | 8.5%
Spices | 4.7 | % |  | 4.8 | % |  | (0.1)% |  | (2.1)% |  | 4.6 | % |  | 4.6 | % |  | —% |  | —%
Net sales by product category | 99.1 | % |  | 98.9 | % |  | 0.2% |  | NM |  | 99.0 | % |  | 99.2 | % |  | (0.2)% |  | NM
Delivery Surcharge | 0.9 | % |  | 1.1 | % |  | (0.2)% |  | NM |  | 1.0 | % |  | 0.8 | % |  | 0.2% |  | NM
Net sales | 100.0 | % |  | 100.0 | % |  | —% |  | —% |  | 100.0 | % |  | 100.0 | % |  | —% |  | —%
Other data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures related to maintenance | $ | 3,399 |  |  | $ | 2,985 |  |  | $ | (414) |  |  | (13.9) | % |  | $ | 10,904 |  |  | $ | 7,893 |  |  | $ | (3,011) |  |  | (38.1)%
Total capital expenditures | 3,399 |  |  | 3,009 |  |  | (390) |  |  | (13.0) | % |  | 11,113 |  |  | 8,896 |  |  | (2,217) |  |  | (24.9)%
Depreciation and amortization expense | 5,409 |  |  | 5,791 |  |  | 382 |  |  | 6.6 | % |  | 16,725 |  |  | 18,119 |  |  | 1,394 |  |  | 7.7%

________________
NM - Not Meaningful
(1) EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. See “Non-GAAP Financial Measures” below for a reconciliation of these non-GAAP measures to their corresponding GAAP measures.
(2) Includes all beverages other than roasted coffee, frozen liquid coffee, and iced and hot tea, including cappuccino, cocoa, granitas, and concentrated and ready-to-drink cold brew and iced coffee.
25

Results of Operations
The following table sets forth information regarding our consolidated results of operations for the three and nine months ended March 31, 2023 and 2022 (in thousands, except percentages):

| Three Months Ended March 31, |  | Favorable (Unfavorable) |  | Nine Months Ended March 31, |  | Favorable (Unfavorable)
| 2023 |  | 2022 |  | Change |  | % Change |  | 2023 |  | 2022 |  | Change |  | % Change
Net sales | $ | 124,234 |  |  | $ | 119,398 |  |  | $4,836 |  | 4.1% |  | $ | 378,306 |  |  | $ | 346,205 |  |  | $32,101 |  | 9.3%
Cost of goods sold | 95,563 |  |  | 83,838 |  |  | (11,725) |  | (14.0)% |  | 292,648 |  |  | 244,197 |  |  | (48,451) |  | (19.8)%
Gross profit | 28,671 |  |  | 35,560 |  |  | (6,889) |  | (19.4)% |  | 85,658 |  |  | 102,008 |  |  | (16,350) |  | (16.0)%
Selling expenses | 28,325 |  |  | 27,477 |  |  | (848) |  | (3.1)% |  | 83,136 |  |  | 81,505 |  |  | (1,631) |  | (2.0)%
General and administrative expenses | 10,539 |  |  | 11,595 |  |  | 1,056 |  | 9.1% |  | 30,858 |  |  | 34,796 |  |  | 3,938 |  | 11.3%
Net (gains) loss from sales of assets | (557) |  |  | 426 |  |  | 983 |  | NM |  | (7,685) |  |  | (4,003) |  |  | 3,682 |  | 92.0%
Operating expenses | 38,307 |  |  | 39,498 |  |  | 1,191 |  | 3.0% |  | 106,309 |  |  | 112,298 |  |  | 5,989 |  | 5.3%
Loss from operations | (9,636) |  |  | (3,938) |  |  | (5,698) |  | (144.7)% |  | (20,651) |  |  | (10,290) |  |  | (10,361) |  | (100.7)%
Other (expense) income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense | (4,210) |  |  | (1,591) |  |  | (2,619) |  | (164.6)% |  | (12,431) |  |  | (7,106) |  |  | (5,325) |  | (74.9)%
Other, net | 2,453 |  |  | 1,579 |  |  | 874 |  | NM |  | 791 |  |  | 5,790 |  |  | 4,999 |  | NM
Total other expense | (1,757) |  |  | (12) |  |  | (1,745) |  | NM |  | (11,640) |  |  | (1,316) |  |  | (10,324) |  | NM
Loss before taxes | (11,393) |  |  | (3,950) |  |  | (7,443) |  | (188.4)% |  | (32,291) |  |  | (11,606) |  |  | (20,685) |  | (178.2)%
Income tax expense | 30 |  |  | 90 |  |  | 60 |  | NM |  | 113 |  |  | 278 |  |  | 165 |  | NM
Net loss | $ | (11,423) |  |  | $ | (4,040) |  |  | (7,383) |  | (182.7)% |  | $ | (32,404) |  |  | $ | (11,884) |  |  | (20,520) |  | (172.7)%
Less: Cumulative preferred dividends, undeclared and unpaid | — |  |  | 149 |  |  | 149 |  | 100.0% |  | — |  |  | 444 |  |  | 444 |  | 100.0%
Net loss available to common stockholders | $ | (11,423) |  |  | $ | (4,189) |  |  | (7,234) |  | (172.7)% |  | $ | (32,404) |  |  | $ | (12,328) |  |  | (20,076) |  | (162.8)%

___________
NM - Not Meaningful
Three and Nine Months Ended March 31, 2023 Compared to Three and Nine Months Ended March 31, 2022
Net Sales
Net sales in the three months ended March 31, 2023 increased $4.8 million, or 4.1%, to $124.2 million from $119.4 million in the three months ended March 31, 2022. Net sales in the nine months ended March 31, 2023 increased $32.1 million, or 9.3%, to $378.3 million from $346.2 million in the nine months ended March 31, 2022. The increase in net sales for the three and nine months ended March 31, 2023 was primarily due to higher pricing compared to prior periods, partially offset by a decline in sales volume primarily with the direct ship sales channel.
The following table presents the effect of changes in unit sales, and unit pricing and product mix in the three and nine months ended March 31, 2023 compared to the same period in the prior fiscal year (in millions):

| Three Months Ended March 31, 2023 vs. 2022 |  |  |  | Nine Months Ended March 31, 2023 vs. 2022 |  |
Effect of change in unit sales | $ | (19.0) |  |  |  |  | $ | (49.9) |  |  |
Effect of pricing and product mix changes | 23.8 |  |  |  |  | 82.0 |  |  |
Total increase in net sales | $ | 4.8 |  |  |  |  | $ | 32.1 |  |  |

Unit sales decreased 13.2% and average unit price increased by 19.9% in the three months ended March 31, 2023 as compared to the same period in the prior fiscal year, resulting in an increase in our net sales of 4.1%. Unit sales decreased 11.6% and average unit price increased by 23.8% in the nine months ended March 31, 2023 as compared to the same period in the prior fiscal year, resulting in an increase in our net sales of 9.3%. Average unit price increased during the three and nine months ended March 31, 2023 due to a higher mix of product sold via our DSD network versus Direct ship, as Direct ship has a lower average unit price. There were no new product category introductions which had a material impact on our net sales in the nine months ended March 31, 2023 or 2022.
Gross Profit
Gross profit decreased to $28.7 million for the three months ended March 31, 2023, compared to $35.6 million for the three months ended March 31, 2022. Gross margin decreased to 23.1% for the three months ended March 31, 2023 from 29.8% for the three months ended March 31, 2022. The decrease in gross profit was primarily due to higher product costs compared to the same period in the prior fiscal year.
26

Gross profit decreased to $85.7 million for the nine months ended March 31, 2023, compared to $102.0 million for the nine months ended March 31, 2022. Gross margin decreased to 22.6% for the nine months ended March 31, 2023 from 29.5% for the nine months ended March 31, 2022. The decrease in gross profit was primarily due to higher product costs and an increase in underlying commodities pricing compared to the same period in the prior fiscal year.
Operating Expenses
In the three months ended March 31, 2023, operating expenses decreased $1.2 million to $38.3 million, or 30.8% of net sales, from $39.5 million, or 33.1% of net sales in the prior year period. This decrease was due to a $1.1 million decrease in general and administrative expenses and an increase in net gain from the sale of branch properties of $1.0 million, which was partially offset by a $0.8 million increase in selling expenses. The decrease in general and administrative expenses during the three months ended March 31, 2023 was primarily due to a payroll tax refund.
In the nine months ended March 31, 2023, operating expenses decreased $6.0 million to $106.3 million, or 28.1% of net sales, from $112.3 million, or 32.4% of net sales in the prior year period. This decrease was due to $3.9 million decrease in general and administrative expenses and a $3.7 million increase in net gains from the sale of branch properties and other assets during the nine months ended March 31, 2023, offset by a $1.6 million increase in selling expenses. The increase in selling expenses during the nine months ended March 31, 2023 was primarily due to an increase in payroll related costs. The decrease in general and administrative expenses during the nine months ended March 31, 2023 was primarily due to a decrease in incentive compensation expense, a $1.9 million gain on settlement related to the acquisition of Boyd Coffee Company, which included the cancellation of shares of Series A Preferred Stock and settlement of liabilities, and a payroll tax refund which was partially offset by an increase in contract services.
Total Other Expense
Total other expense for the three months ended March 31, 2023 increased $1.7 million to $1.8 million compared to $12 thousand of expense in the three months ended March 31, 2022. Total other expense for the nine months ended March 31, 2023 increased $10.3 million to $11.6 million compared to $1.3 million of expense in the nine months ended March 31, 2022.
Interest expense in the three months ended March 31, 2023 increased $2.6 million to $4.2 million from $1.6 million in the prior year period. The increase is primarily related to a $1.4 million increase in interest expense related to the interest rate swap and the remainder due to higher interest rates compared to prior period. Interest expense in the nine months ended March 31, 2023 increased $5.3 million to $12.4 million from $7.1 million in the prior year period. The increase is primarily related to the write off of $1.5 million in deferred financing costs, interest rate swap interest which increased $2.3 million, discount and payoff premium incurred as a result of the refinancing transaction on August 31, 2022, an increase in debt obligations, and an increase in interest rates compared to the prior year period.
Other, net in the three months ended March 31, 2023 increased by $0.9 million to $2.5 million compared to $1.6 million in the prior year period. Other, net in the nine months ended March 31, 2023 decreased by $5.0 million to $0.8 million compared to $5.8 million in the prior year period. The change was primarily a result of mark-to-market net losses on coffee-related derivative instruments not designated as accounting hedges in the current period compared to net mark-to-market gains in the prior year period. The mark-to-market losses are primarily due to a decrease in the coffee-related commodity market.
Income Taxes
In the three months ended March 31, 2023 and March 31, 2022, we recorded income tax expense of $30 thousand and $90 thousand, respectively. In the nine months ended March 31, 2023 and March 31, 2022, we recorded income tax expense of $0.1 million and $0.3 million, respectively. See Note 15, Income Taxes, of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
27

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 excluding the impact of:
•income tax expense;
•interest expense; and
•depreciation and amortization expense.
“EBITDA Margin” is defined as EBITDA expressed as a percentage of net sales.
“Adjusted EBITDA” is defined as net loss excluding the impact of:
•income tax expense;
•interest expense;
•depreciation and amortization expense;
•401(k), ESOP and share-based compensation expense;
•gain on settlement with Boyd’s sellers;
•net (gains) losses from sales of assets; and
•severance costs.
“Adjusted EBITDA Margin” is defined as Adjusted EBITDA expressed as a percentage of net sales.
For purposes of calculating EBITDA and EBITDA Margin and Adjusted EBITDA and Adjusted EBITDA Margin, we have not adjusted for the impact of interest expense on our pension and postretirement benefit plans.
We believe these non-GAAP financial measures provide a useful measure of the Company’s operating results, a meaningful comparison with historical results and with the results of other companies, and insight into the Company’s ongoing operating performance. Further, management utilizes these measures, in addition to GAAP measures, when evaluating and comparing the Company’s operating performance against internal financial forecasts and budgets.
We believe that EBITDA facilitates operating performance comparisons from period to period by isolating the effects of certain items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. 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). We also present EBITDA and EBITDA Margin because (i) we believe that these measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in our industry, (ii) we believe that investors will find these measures useful in assessing our ability to service or incur indebtedness, and (iii) we use these measures internally as benchmarks to compare our performance to that of our competitors.
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.
Set forth below is a reconciliation of reported net loss to EBITDA (unaudited):

|  | Three Months Ended March 31, |  | Nine Months Ended March 31,
(In thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Net loss, as reported |  | $ | (11,423) |  |  | $ | (4,040) |  |  | $ | (32,404) |  |  | $ | (11,884) |
Income tax expense |  | 30 |  |  | 90 |  |  | 113 |  |  | 278 |
Interest expense (1) |  | 3,044 |  |  | 736 |  |  | 8,935 |  |  | 4,542 |
Depreciation and amortization expense |  | 5,409 |  |  | 5,791 |  |  | 16,725 |  |  | 18,119 |
EBITDA |  | $ | (2,940) |  |  | $ | 2,577 |  |  | $ | (6,631) |  |  | $ | 11,055 |
EBITDA Margin |  | (2.4) | % |  | 2.2 | % |  | (1.8) | % |  | 3.2 | %

____________
(1) Excludes interest expense related to pension plans and postretirement benefit plans.
28

Set forth below is a reconciliation of reported net loss to Adjusted EBITDA (unaudited):

|  | Three Months Ended March 31, |  | Nine Months Ended March 31,
(In thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Net loss, as reported |  | $ | (11,423) |  |  | $ | (4,040) |  |  | $ | (32,404) |  |  | $ | (11,884) |
Income tax expense |  | 30 |  |  | 90 |  |  | 113 |  |  | 278 |
Interest expense (1) |  | 3,044 |  |  | 736 |  |  | 8,935 |  |  | 4,542 |
Depreciation and amortization expense |  | 5,409 |  |  | 5,791 |  |  | 16,725 |  |  | 18,119 |
401(k), ESOP and share-based compensation expense |  | 1,572 |  |  | 2,018 |  |  | 6,071 |  |  | 5,015 |
Gain on settlement with Boyd's sellers (2) |  | — |  |  | — |  |  | (1,917) |  |  | — |
Net (gains) losses from sale of assets |  | (557) |  |  | 426 |  |  | (7,685) |  |  | (4,003) |
Severance costs |  | 1,149 |  |  | — |  |  | 1,441 |  |  | 942 |
Adjusted EBITDA |  | $ | (776) |  |  | $ | 5,021 |  |  | $ | (8,721) |  |  | $ | 13,009 |
Adjusted EBITDA Margin |  | (0.6) | % |  | 4.2 | % |  | (2.3) | % |  | 3.8 | %

____________
(1) Excludes interest expense related to pension plans and postretirement benefit plans.
(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.
Our Business
We are a leading coffee roaster, wholesaler, equipment servicer and distributor of coffee, tea and other allied products manufactured under our owned brands, as well as under private labels on behalf of certain customers. We were founded in 1912, incorporated in California in 1923, and reincorporated in Delaware in 2004. Our principal office is located in Northlake, Texas. We operate in one business segment.
We serve a wide variety of customers, from small independent restaurants and foodservice operators to large institutional buyers like restaurants, department and convenience store retailers, hotels, casinos, healthcare facilities, and gourmet coffee houses, as well as grocery chains with private brand and consumer-branded coffee and tea products, and foodservice distributors. Through our sustainability, stewardship, environmental efforts, and leadership we are not only committed to serving the finest products available, considering the cost needs of the customer, but also insist on their sustainable cultivation, manufacture and distribution whenever possible.
Our product categories consist of a robust line of roast and ground coffee, including organic, Direct Trade, Project D.I.R.E.C.T.®, Fair Trade Certified™® and other sustainably-produced offerings; frozen liquid coffee; flavored and unflavored iced and hot teas; including organic and Rainforest Alliance Certified™; culinary products including premium spices, pancake and biscuit mixes, gravy and sauce mixes, soup bases, dressings, syrups and sauces, and coffee-related products such as coffee filters, cups, sugar and creamers; and other beverages including cappuccino, cocoa, granitas, and other blender-based beverages and concentrated and ready-to-drink cold brew and iced coffee. 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 production facilities in Northlake, Texas and Portland, Oregon. We distribute our products from our Northlake, Texas and Portland, Oregon production facilities, as well as separate distribution centers in Portland, Oregon; Northlake, Illinois; Moonachie, New Jersey; and Rialto, California. Our products reach our customers primarily through our nationwide DSD network of 242 delivery routes and 101 branch warehouses as of March 31, 2023, or direct-shipped via common carriers or third-party distributors. DSD sales are primarily made “off-truck” to our customers at their places of business. We operate a large fleet of trucks and other vehicles to distribute and deliver our products through our DSD network, and we rely on 3PL service providers for our long-haul distribution.
The COVID-19 pandemic has significantly impacted our financial position, results of operations, cash flows and liquidity as the spread of the pandemic and resulting governmental actions have decreased the demand for our products. An economic downturn caused by any pandemic, epidemic or other disease outbreak, comparable or similar to COVID-19, 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.
For other impacts of the COVID-19 pandemic, please see “Item 1A. Risk Factors” in our 2022 Form 10‑K, which is accessible on the SEC’s website at www.sec.gov.
29

Liquidity, Capital Resources and Financial Condition
The following table summarizes our debt obligations:

|  |  |  |  |  |  |  | March 31, 2023 |  | June 30, 2022
(In thousands) |  | Debt Origination Date |  | Maturity |  | Principal Borrowing Amount |  | Carrying Value |  | Weighted Average Interest Rate (1) |  | Carrying Value |  | Weighted Average Interest Rate (1)
Revolver |  | Various |  | 4/26/2027 |  | N/A |  | $ | 67,000 |  |  | 6.15 | % |  | $ | 63,000 |  |  | 2.75 | %
Term Loan |  | 8/31/2022 |  | 4/26/2027 |  | $47,000 |  | 45,433 |  |  |  |  | 45,600 |  |  |
Total |  |  |  |  |  |  |  | $ | 112,433 |  |  |  |  | $ | 108,600 |  |  |

__________
(1) The weighted average interest rate excludes the fixed rate on the de-designated Amended Rate Swap.
On April 26, 2021, the Company entered into the Revolver Credit Facility, which was amended on August 8, 2022 and August 31, 2022, and entered into the Prior Term Loan Facility, which was paid in full as part of a refinancing transaction, as described in more detail in Note 11, Debt Obligations, of the Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10‑Q.
The Credit Facilities have a commitment of up to $90.0 million and a maturity date of April 26, 2027. Availability under the revolver is calculated as the lesser of (a) $90.0 million and (b) the amount derived from pursuant to a borrowing base composed of the sum of (i) 85% of eligible accounts receivable (less a dilution reserve), plus (ii) the lesser of: (a) 80% of eligible raw material inventory, eligible in-transit inventory and eligible finished goods inventory (collectively, “Eligible Inventory”), and (b) 85% of the net orderly liquidation value of Eligible Inventory, minus (c) applicable reserve. The Term Loan has a principal amount of $47.0 million and a maturity date of April 26, 2027.
The Credit Facilities contain customary affirmative and negative covenants and restrictions typical for a financing of this type. Non-compliance with one or more of the covenants and restrictions could result in the full or partial principal balance of the Credit Facilities becoming immediately due and payable and termination of the commitments. As of and through March 31, 2023, we were in compliance with all of the covenants under the Credit Facilities.
Failure to comply with these covenants would result in a default which could accelerate the repayment obligations and impact our liquidity. Accordingly, an event of default could have a material and adverse impact on us. If we are unable to cure, obtain a waiver from the lenders, or refinance the Credit Facilities, we anticipate not being able to meet the current contractual covenant beginning June 30, 2023. We consider it probable that management’s plans, including the options described above, will be able to alleviate the potential noncompliance with the debt covenant prior to June 30, 2023.
The amended Credit Facilities provide us with increased flexibility to proactively manage our liquidity, working capital, and preserving financial liquidity to mitigate the impact of the uncertain business environment resulting from increased costs due to inflation, fluctuations in the coffee commodity markets, and continue to execute on key strategic initiatives.
At March 31, 2023, the Company had outstanding borrowings on the Revolver Credit Facility of $67.0 million and had utilized $4.1 million of the letters of credit sublimit.
Liquidity
We generally finance our operations through cash flows from operations and borrowings under our Credit Facilities described above. In light of our financial position, operating performance and current economic conditions, including the state of the global capital markets, there can be no assurance as to whether or when we will be able to raise capital by issuing securities. We believe that the Credit Facilities, 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. We expect to fund our long-term liquidity needs, including contractual obligations, anticipated capital expenditures, principal payments on our Term Loan Credit Facility, as well as working capital requirements, from our operating cash flows and our Revolver Credit Facility to the extent available.
At March 31, 2023, we had $7.3 million of unrestricted cash and cash equivalents and $0.2 million in restricted cash. Further changes in commodity prices and the number of coffee-related derivative instruments held could have a significant impact on cash deposit requirements under our broker and counterparty agreements and may adversely affect our liquidity. At March 31, 2023, we had $16.4 million available on our Revolver Credit Facility.
30

Cash Flows
The significant captions and amounts from our consolidated statements of cash flows are summarized below:

| Nine Months Ended March 31,
| 2023 |  | 2022
Consolidated Statements of cash flows data (in thousands) |  |  |
Net cash used in operating activities | $ | (6,283) |  |  | $ | (9,627) |
Net cash provided by investing activities | 394 |  |  | 166 |
Net cash provided by financing activities | 3,326 |  |  | 9,576 |
Net (decrease) increase in cash and cash equivalents and restricted cash | $ | (2,563) |  |  | $ | 115 |

Operating Activities
Net cash used in operating activities during the nine months ended March 31, 2023 was $6.3 million as compared to $9.6 million in the nine months ended March 31, 2022, a decrease in cash used in operations of $3.3 million. The change was driven by a decrease in inventory, partially offset by lower cash earnings.
Investing Activities
Net cash provided by investing activities during the nine months ended March 31, 2023 was $0.4 million as compared to $0.2 million in the nine months ended March 31, 2022. The net change in investing activities was primarily due to an increase of $2.4 million related to proceeds from the sale of property, plant and equipment partially offset by an increase of $2.2 million in fixed asset purchases during the nine months ended March 31, 2023.
Financing Activities
Net cash provided by financing activities during the nine months ended March 31, 2023 was $3.3 million as compared to $9.6 million in the nine months ended March 31, 2022. The change of $6.3 million was primarily due to net borrowing proceeds of $3.8 million under the Credit Facilities during the nine months ended March 31, 2023 compared to $10.1 million of net borrowing proceeds in the prior year.
Capital Expenditures
For the nine months ended March 31, 2023 and 2022, our capital expenditures paid were $11.1 million and $8.9 million, respectively. In fiscal 2023, we anticipate paying between $14.0 million to $16.0 million in capital expenditures. We expect to finance these expenditures through cash flows from operations and borrowings under our Credit Facilities.
Depreciation and amortization expenses were $16.7 million and $18.1 million in the nine months ended March 31, 2023 and 2022, respectively. We anticipate our depreciation and amortization expense will be approximately $5.0 million to $6.0 million for the quarter ended June 30, 2023 based on our existing fixed asset commitments and the useful lives of our intangible assets.
Purchase Commitments
As of March 31, 2023, the Company had committed to purchase green coffee inventory totaling $71.1 million under fixed-price contracts, and $17.7 million in inventory and other purchases under non-cancelable purchase orders.
Contractual Obligations
As of March 31, 2023, the Company had operating and finance lease payment commitments totaling $27.3 million. Under our Term Loan Facility, the Company is required to make monthly principal repayments of $0.3 million, beginning in the quarter ending December 31, 2022.
Critical Accounting Policies and Estimates
We prepare our consolidated financial statements in accordance with GAAP. In applying many of these accounting principles, we need to make assumptions, estimates or judgments that affect the reported amounts of assets, liabilities, revenues and expenses in our consolidated financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates or judgments, however, are both subjective and subject to change, and actual results may differ from our assumptions and estimates. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts become known. For a summary of our significant accounting policies, see Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in Part I, Item 1 of our 2022 Form 10-K. For a summary of our critical accounting estimates, please see "Management's Discussion
31

and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates" in our 2022 Form 10-K.
Recent Accounting Pronouncements
See Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in Part I, Item 1 of our 2022 Form 10-K.
Off-Balance Sheet Arrangements
As of March 31, 2023, the Company did not have any off-balance sheet arrangements.
32

Item 3. | Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk
At March 31, 2023, we had outstanding borrowings on our Revolver Credit Facility of $67.0 million and had utilized $4.1 million of the letters of credit sublimit, as well as $45.4 million of debt outstanding under our Term Loan Facility. The weighted average interest rate on our Revolver Credit Facility was 6.15% with a SOFR applicable margin of 1.75%.
In addition to the Credit Facilities above, the Company executed an ISDA agreement with Wells Fargo (“Amended Rate Swap”). Under the terms of the Amended Rate Swap, the Company receives 1-month LIBOR, subject to a 0% floor, and makes payments based on a fixed rate of 2.4725%, The Amended Rate Swap utilizes the same notional amount of $65.0 million and maturity date of October 11, 2023 as the original interest rate swap. See Note 4, Derivative Instruments, of the Notes to Consolidated Financial Statements included in the fiscal 2022 Annual Report on Form 10‑K for further discussions of our derivative instruments.
The following table demonstrates the impact of interest rate changes on our annual interest expense on outstanding borrowings subject to interest rate variability under these Credit Facilities based on the weighted average interest rate on the outstanding borrowings as of March 31, 2023:

(In thousands) |  | Principal |  | Interest Rate |  | Annual Interest Expense
–150 basis points |  | $112,400 |  | 5.98% |  | $6,722
–100 basis points |  | $112,400 |  | 6.48% |  | $7,284
Unchanged |  | $112,400 |  | 7.48% |  | $8,408
+100 basis points |  | $112,400 |  | 8.48% |  | $9,532
+150 basis points |  | $112,400 |  | 8.98% |  | $10,094

Commodity Price Risk
We are exposed to commodity price risk arising from changes in the market price of green coffee. We value green coffee inventory on the FIFO basis. In the normal course of business we hold a large green coffee inventory and enter into forward commodity purchase agreements with suppliers. We are subject to price risk resulting from the volatility of green coffee prices. Due to competition and market conditions, volatile price increases cannot always be passed on to our customers. See Note 4, Derivative Instruments, of the Notes to the Unaudited Consolidated Financial Statements for further discussions of our derivative instruments.
The following table summarizes the potential impact as of March 31, 2023 to net loss and AOCI from a hypothetical 10% change in coffee commodity prices. The information provided below relates only to the coffee-related derivative instruments and does not include, when applicable, the corresponding changes in the underlying hedged items:

|  | Increase (Decrease) to Net Loss |  | Increase (Decrease) to AOCI
|  | 10% Increase in Underlying Rate |  | 10% Decrease in Underlying Rate |  | 10% Increase in Underlying Rate |  | 10% Decrease in Underlying Rate
(In thousands) |
Coffee-related derivative instruments (1) |  | $ | (1,886) |  |  | $ | 1,886 |  |  | $ | 103 |  |  | $ | (103) |

__________
(1) The Company’s purchase contracts that qualify as normal purchases include green coffee purchase commitments for which the price has been locked in as of March 31, 2023. These contracts are not included in the sensitivity analysis above as the underlying price has been fixed.
33

Item 4. | Controls and Procedures

Disclosure Controls and Procedures
Disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information we are required to disclose in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.
As of March 31, 2023, our management, with the participation of our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), carried out an evaluation of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(e) promulgated under the Exchange Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting
Management has determined that there has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act) during our fiscal quarter ended March 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. | Legal Proceedings

The information set forth in Note 19, Commitments and Contingencies, of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q is incorporated herein by reference.

Item 1A. | Risk Factors

For a discussion of our other potential risks and uncertainties, see the information under “Item 1A. Risk Factors” in our 2022 Form 10‑K. During the nine months ended March 31, 2023, there have been no material changes to the risk factors disclosed in our 2022 Form 10‑K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable
Item 5. Other Information
None
34

Item 6. | Exhibits

Exhibit No. |  | Description
3.1 |  | Second Amended and Restated Certificate of Incorporation of Farmer Bros. Co. (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 12, 2023 and incorporated herein by reference).
3.2 |  | Amended and Restated Bylaws (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 2, 2023 and incorporated herein by reference).
10.1 |  | General Release and Separation Agreement, dated March 23, 2023, by and between Farmer Bros. Co. and Ruben Inofuentes (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed with the SEC on March 28, 2023 and incorporated by reference).
10.2 |  | General Release and Separation Agreement, dated March 25, 2023, by and between Farmer Bros. Co. and Maurice Moragne (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K/A filed with the SEC on March 28, 2023 and incorporated by reference).
10.3* |  | Form of Farmer Bros. Co. Amended and Restated 2017 Long-Term Incentive Plan Stock Restricted Unit Award Agreement (Directors).
31.1* |  | Principal Executive Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2* |  | Principal Financial Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1** |  | Principal Executive Officer Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2** |  | Principal Financial Officer Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS* |  | Inline XBRL Instance Document
101.SCH* |  | Inline XBRL Taxonomy Extension Schema Document.
101.CAL* |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF* |  | Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB* |  | Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE* |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104 |  | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, formatted in Inline XBRL (included in Exhibit 101).

________________

* | Filed herewith
** | Furnished, not filed, herewith

35

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

| F ARMER B ROS. C O.
| By: |  | /s/ Deverl Maserang
|  |  | Deverl Maserang President and Chief Executive Officer (principal executive officer)
|  |  | May 10, 2023
| By: |  | /s/ Scott R. Drake
|  |  | Scott R. Drake Chief Financial Officer (principal financial officer)
|  |  | May 10, 2023

36