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Employee Benefit Plans | 12 Months Ended
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Jun. 30, 2024
Retirement Benefits [Abstract] |
Employee Benefit Plans | Note 12. Employee Benefit Plans The Company provides the following benefit plans for full-time employees who work 30 hours or more per week: •401(k); •health and other welfare benefit plans; and •in certain circumstances, pension and postretirement benefits. See below for detail description of each benefit plan. Generally, the plans provide health benefits after 30 days of employment and other retirement benefits based on years of service and/or a combination of years of service and earnings. Single Employer Pension Plans As of June 30, 2024, the Company has two defined benefit pension plans for certain employees (the "Farmer Bros. Plan" and the “Hourly Employees' Plan”).
|  | Farmer Bros. Plan As of June 30, |  | Hourly Employees’ Plan As of June 30, |  | Total
($ in thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024 |  | 2023
Change in projected benefit obligation |  |  |  |  |  |  |  |  |  |  |  |
Benefit obligation at the beginning of the year |  | $ | 95,406 |  |  | $ | 102,508 |  |  | $ | 3,801 |  |  | $ | 3,951 |  |  | $ | 99,207 |  |  | $ | 106,459 |
Interest cost |  | 4,631 |  |  | 4,451 |  |  | 186 |  |  | 173 |  |  | 4,817 |  |  | 4,624 |
Actuarial gain |  | (2,119) |  |  | (5,008) |  |  | (310) |  |  | (132) |  |  | (2,429) |  |  | (5,140) |
Benefits paid |  | (6,535) |  |  | (6,545) |  |  | (194) |  |  | (191) |  |  | (6,729) |  |  | (6,736) |
Projected benefit obligation at the end of the year |  | $ | 91,383 |  |  | $ | 95,406 |  |  | $ | 3,483 |  |  | $ | 3,801 |  |  | $ | 94,866 |  |  | $ | 99,207 |
Change in plan assets |  |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets at the beginning of the year |  | $ | 75,934 |  |  | $ | 74,250 |  |  | $ | 3,690 |  |  | $ | 3,848 |  |  | $ | 79,624 |  |  | $ | 78,098 |
Actual return on plan assets |  | 7,543 |  |  | 6,147 |  |  | 165 |  |  | 33 |  |  | 7,708 |  |  | 6,180 |
Employer contributions |  | 2,332 |  |  | 2,082 |  |  | — |  |  | — |  |  | 2,332 |  |  | 2,082 |
Benefits paid |  | (6,535) |  |  | (6,545) |  |  | (194) |  |  | (191) |  |  | (6,729) |  |  | (6,736) |
Fair value of plan assets at the end of the year |  | $ | 79,274 |  |  | $ | 75,934 |  |  | $ | 3,661 |  |  | $ | 3,690 |  |  | $ | 82,935 |  |  | $ | 79,624 |
Funded status at end of year (underfunded) |  | $ | (12,109) |  |  | $ | (19,472) |  |  | $ | 178 |  |  | $ | (111) |  |  | $ | (11,931) |  |  | $ | (19,583) |
Amounts recognized in consolidated balance sheets |  |  |  |  |  |
Non-current assets |  | — |  |  | — |  |  | 178 |  |  | — |  |  | 178 |  |  | — |
Noncurrent liabilities |  | (12,109) |  |  | (19,472) |  |  | — |  |  | (111) |  |  | (12,109) |  |  | (19,583) |
Total |  | $ | (12,109) |  |  | $ | (19,472) |  |  | $ | 178 |  |  | $ | (111) |  |  | $ | (11,931) |  |  | $ | (19,583) |
Amounts recognized in AOCI |  |  |  |  |  |  |  |  |  |  |  |
Net loss |  | 22,291 |  |  | 28,444 |  |  | (185) |  |  | 137 |  |  | 22,106 |  |  | 28,581 |
Total accumulated OCI (not adjusted for applicable tax) |  | $ | 22,291 |  |  | $ | 28,444 |  |  | $ | (185) |  |  | $ | 137 |  |  | $ | 22,106 |  |  | $ | 28,581 |
Weighted average assumptions used to determine benefit obligations |  |  |  |  |  |
Discount rate |  | 5.35 | % |  | 5.05 | % |  | 5.35 | % |  | 5.05 | % |  | 5.35 | % |  | 5.05 | %
Rate of compensation increase |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A
Components of Net Periodic Benefit Cost and Other Changes Recognized in Other Comprehensive Income (Loss) (OCI)
|  | Farmer Bros. Plan June 30, |  | Hourly Employees’ Plan June 30, |  | Total
($ in thousands) |  | 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
Components of net periodic benefit cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest cost |  | 4,631 |  |  | 4,451 |  |  | 3,262 |  |  | 186 |  |  | 173 |  |  | 129 |  |  | 4,817 |  |  | 4,624 |  |  | 3,391 |
Expected return on plan assets |  | (4,336) |  |  | (3,906) |  |  | (4,734) |  |  | (152) |  |  | (129) |  |  | (214) |  |  | (4,488) |  |  | (4,035) |  |  | (4,948) |
Amortization of net loss |  | 827 |  |  | 1,125 |  |  | 1,356 |  |  | — |  |  | — |  |  | — |  |  | 827 |  |  | 1,125 |  |  | 1,356 |
Net periodic benefit cost |  | $ | 1,122 |  |  | $ | 1,670 |  |  | $ | (116) |  |  | $ | 34 |  |  | $ | 44 |  |  | $ | (85) |  |  | $ | 1,156 |  |  | $ | 1,714 |  |  | $ | (201) |
Other changes recognized in OCI |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net gain (1) |  | $ | (5,326) |  |  | $ | (7,249) |  |  | $ | (7,542) |  |  | $ | (322) |  |  | $ | (36) |  |  | $ | (279) |  |  | $ | (5,648) |  |  | $ | (7,285) |  |  | $ | (7,821) |
Amortization of net loss |  | (827) |  |  | (1,125) |  |  | (1,356) |  |  | — |  |  | — |  |  | — |  |  | (827) |  |  | (1,125) |  |  | (1,356) |
Total recognized in other comprehensive income (loss) |  | $ | (6,153) |  |  | $ | (8,374) |  |  | $ | (8,898) |  |  | $ | (322) |  |  | $ | (36) |  |  | $ | (279) |  |  | $ | (6,475) |  |  | $ | (8,410) |  |  | $ | (9,177) |
Total recognized in net periodic benefit cost and OCI |  | $ | (5,031) |  |  | $ | (6,704) |  |  | $ | (9,014) |  |  | $ | (288) |  |  | $ | 8 |  |  | $ | (364) |  |  | $ | (5,319) |  |  | $ | (6,696) |  |  | $ | (9,378) |
Weighted-average assumptions used to determine net periodic benefit cost |  |  |  |  |  |  |  |  |  |
Discount rate |  | 5.05 | % |  | 4.50 | % |  | 2.60 | % |  | 5.05 | % |  | 4.50 | % |  | 2.60 | % |  | 5.05 | % |  | 4.50 | % |  | 2.60 | %
Expected long-term return on plan assets |  | 7.00 | % |  | 6.50 | % |  | 6.25 | % |  | 5.50 | % |  | 4.75 | % |  | 6.50 | % |  | 6.25 | % |  | 5.63 | % |  | 6.38 | %
Rate of compensation increase |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A |  | N/A
(1) Net gain for fiscal year ended June 30, 2024, 2023 and 2022 was primarily due to plan assets returns. Basis Used to Determine Expected Long-term Return on Plan Assets The expected long-term return on plan assets assumption was developed as a weighted average rate based on the target asset allocation of the plan and the Long-Term Capital Market Assumptions (CMA) 2020. The capital market assumptions were developed with a primary focus on forward-looking valuation models and market indicators. The key fundamental economic inputs for these models are future inflation, economic growth, and interest rate environment. Due to the long-term nature of the pension obligations, the investment horizon for the CMA 2020 is 20 to 30 years. In addition to forward-looking models, historical analysis of market data and trends was reflected, as well as the outlook of recognized economists, organizations and consensus CMA from other credible studies. Description of Investment Policy The Company’s investment strategy is to build an efficient, well-diversified portfolio based on a long-term, strategic outlook of the investment markets. The investment markets outlook utilizes both the historical-based and forward-looking return forecasts to establish future return expectations for various asset classes. These return expectations are used to develop a core asset allocation based on the specific needs of each plan. The core asset allocation utilizes investment portfolios of various asset classes and multiple investment managers in order to maximize the plan’s return while providing multiple layers of diversification to help minimize risk. Additional Disclosures
|  | Farmer Bros. Plan June 30, |  | Hourly Employees’ Plan June 30, |  | Total
($ in thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024 |  | 2023
Comparison of obligations to plan assets |  |  |  |  |  |  |  |  |  |  |  |
Projected benefit obligation |  | $ | 91,383 |  |  | $ | 95,406 |  |  | $ | 3,483 |  |  | $ | 3,801 |  |  | $ | 94,866 |  |  | $ | 99,207 |
Accumulated benefit obligation |  | 91,383 |  |  | 95,406 |  |  | 3,483 |  |  | 3,801 |  |  | 94,866 |  |  | 99,207 |
Fair value of plan assets at measurement date |  | 79,274 |  |  | 75,934 |  |  | 3,661 |  |  | 3,690 |  |  | 82,935 |  |  | 79,624 |
Plan assets by category |  |  |  |  |  |  |  |  |  |  |  |
Equity securities |  | 37,849 |  |  | 49,516 |  |  | — |  |  | 750 |  |  | 37,849 |  | 50,266 |
Debt securities |  | 37,504 |  |  | 20,765 |  |  | 3,661 |  |  | 2,940 |  |  | 41,165 |  | 23,705 |
Real estate |  | 3,921 |  |  | 5,653 |  |  | — |  |  | — |  |  | 3,921 |  | 5,653 |
Total |  | $ | 79,274 |  |  | $ | 75,934 |  |  | $ | 3,661 |  |  | $ | 3,690 |  |  | $ | 82,935 |  |  | $ | 79,624 |
Plan assets by category |  |  |  |  |  |  |  |  |  |  |  |
Equity securities |  | 47.7 | % |  | 65.2 | % |  | — | % |  | 20.3 | % |  | 45.6 | % |  | 63.1 | %
Debt securities |  | 47.3 | % |  | 27.3 | % |  | 100.0 | % |  | 79.7 | % |  | 49.7 | % |  | 29.8 | %
Real estate |  | 5.0 | % |  | 7.5 | % |  | — | % |  | — | % |  | 4.7 | % |  | 7.1 | %
Total |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | %
Fair values of plan assets were as follows:
|  | As of June 30, 2024
(In thousands) |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Investments measured at NAV
Farmer Bros. Plan |  | $ | 79,274 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 79,274 |
Hourly Employees’ Plan |  | 3,661 |  |  | — |  |  | — |  |  | — |  |  | 3,661 |
|  | As of June 30, 2023
(In thousands) |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Investments measured at NAV
Farmer Bros. Plan |  | $ | 75,934 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 75,934 |
Hourly Employees’ Plan |  | 3,690 |  |  | — |  |  | — |  |  | — |  |  | 3,690 |
The Company's single employer pension plan—Hourly Employees' Plan target asset allocation remains in debt securities for fiscal 2025.The following is the target asset allocation for the Company's single employer pension plan— Farmer Bros. Plan—for fiscal 2025:
| Fiscal 2025
U.S. large cap equity securities | 28.0 | %
U.S. small cap equity securities | 10.0 | %
International equity securities | 22.0 | %
Debt securities | 35.0 | %
Real Asset | 5.0 | %
Total | 100.0 | %
Estimated Amounts in OCI Expected To Be Recognized In fiscal 2025, the Company expects to recognize net periodic cost of $0.7 million for the Farmer Bros. Plan and $73.3 thousand for the Hourly Employees’ Plan. Estimated Future Contributions and Refunds In fiscal 2025, the Company expects to contribute $2.9 million to the Farmer Bros. Plan and does not expect to contribute to the Hourly Employees’ Plan. Estimated Future Benefit Payments The following benefit payments are expected to be paid over the next 10 fiscal years:
(In thousands) |  | Farmer Bros. Plan |  | Hourly Employees’ Plan
Year Ending: |
June 30, 2025 |  | $ | 7,640 |  |  | $ | 260 |
June 30, 2026 |  | 7,210 |  |  | 240 |
June 30, 2027 |  | 7,300 |  |  | 260 |
June 30, 2028 |  | 7,310 |  |  | 260 |
June 30, 2029 |  | 7,270 |  |  | 260 |
June 30, 2030 to June 30, 2034 |  | 34,670 |  |  | 1,270 |
These amounts are based on current data and assumptions and reflect expected future service, as appropriate. 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.
|  |  |  | Pension Protection Act Zone Status
Pension Fund |  | EIN-PN |  | As of 1/1/2022
Western Conference of Teamsters Pension Plan |  | 91-6145047-001 |  | Green
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. The Company’s minimum contributions to these plans are defined within the collective bargaining agreements. Contributions made by the Company to the multiemployer pension plans were as follows:
(In thousands) |  | WCTPP(1)(2)(3) |  | All Other Plans
Year Ended: |  |  |  |
June 30, 2024 |  | $ | 1,248 |  |  | $ | 35 |
June 30, 2023 |  | 1,280 |  |  | 28 |
June 30, 2022 |  | 961 |  |  | 29 |
____________ (1)Individually significant plan. (2)Less than 5% of total contribution to WCTPP based on WCTPP's FASB Disclosure Statement (3)The Company guarantees that one hundred seventy-three (173) hours will be contributed upon for all employees who are compensated for all available straight time hours for each calendar month. An additional 6.5% of the basic contribution must be paid for PEER or the Program for Enhanced Early Retirement. The risks of participating in multiemployer pension plans are different from single-employer plans in that: (i) assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers; (ii) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers; and (iii) if the Company stops participating in the multiemployer plan, the Company may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability. Future collective bargaining negotiations may result in the Company withdrawing from the remaining multiemployer pension plans in which it participates and, if successful, the Company may incur a withdrawal liability, the amount of which could be material to the Company's results of operations and cash flows. 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 expires on or before September 30, 2027. The Company's aggregate contributions to multiemployer plans other than pension plans in the fiscal years ended June 30, 2024, 2023 and 2022 were $3.9 million, $3.6 million and $3.0 million, respectively. The Company expects to contribute an aggregate of approximately $3.9 million towards multiemployer plans other than pension plans in fiscal 2025. 401(k) Plan The 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. 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. Effective January 1, 2024, the Company amended the 401(k) matching program, whereby the Company on an annual basis will contribute cash for 100% of the first 3% each eligible employee contributes plus 50% on the next 2% they contribute. The Company recorded matching contributions of $1.3 million, $2.0 million and $2.0 million in operating expenses for the fiscal years ended June 30, 2024, 2023 and 2022, respectively. For the fiscal years ended June 30, 2024, 2023 and 2022 the Company contributed a total of 595,031 shares, 937,848 shares and 371,566 shares of the Company’s common stock with a value of $1.9 million, $4.6 million and $3.6 million, respectively, to eligible participants’ annual plan compensation. Effective August 1, 2024, the Company suspended the 401(k) matching program. Postretirement Benefits In June 2021, the Company amended the Death Benefit Plan effective immediately, which triggered re-measurement of the plan. The Company surrendered the purchased life insurance policies that funded these death benefits, and received cash proceeds from the insurance carriers. 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 Company also retained the life insurance policies to fund the postretirement death benefit of these participants, and have a long-term receivable in Other Assets of $0.5 million as of June 30, 2024 which equates to the cash surrender value of the policies. The following table shows the components of net periodic postretirement benefit cost for the Retiree Medical Plan and Executive Death Benefit Plan for the fiscal years ended June 30, 2024, 2023 and 2022. Net periodic postretirement benefit cost for fiscal 2024 was based on employee census information as of June 30, 2024.
|  | Year Ended June 30,
(In thousands) |  | 2024 |  | 2023 |  | 2022
Components of Net Periodic Postretirement Benefit Cost (Credit): |  |  |  |  |  |
Service cost |  | $ | — |  |  | $ | — |  |  | $ | — |
Interest cost |  | 42 |  |  | 39 |  |  | 27 |
Amortization of net gain |  | — |  |  | — |  |  | 11 |
Net periodic postretirement benefit (credit) cost |  | $ | 42 |  |  | $ | 39 |  |  | $ | 38 |
The tables below show the remaining bases for the transition (asset) obligation, prior service cost (credit), and the calculation of the amortizable gain or loss for the Executive Death Benefit Plan.
|  |  | Year Ended June 30,
($ in thousands) |  |  | 2024 |  | 2023
Amortization of Net (Gain) Loss: |  |  |  |  |
Net loss as of July 1 |  |  | $ | 8 |  |  | $ | 17 |
Net loss subject to amortization |  |  | 8 |  |  | 17 |
Corridor (10% of greater of APBO or assets) |  |  | 86 |  |  | 83 |
Net loss in excess of corridor |  |  | $ | — |  |  | $ | — |
Amortization years |  |  | 14.7 |  | 15.3
The following tables provide a reconciliation of the benefit obligation and plan assets for the Retiree Medical Plan, Death Benefit Plan and Executive Death Benefit Plan:
|  | As of June 30,
(In thousands) |  | 2024 |  | 2023
Change in Benefit Obligation: |  |  |  |
Projected postretirement benefit obligation at beginning of year |  | $ | 826 |  |  | $ | 844 |
Service cost |  | — |  |  | — |
Interest cost |  | 42 |  |  | 39 |
Actuarial (gains) losses |  | (9) |  |  | (57) |
Benefits paid |  | — |  |  | — |
Projected postretirement benefit obligation at end of year |  | $ | 859 |  |  | $ | 826 |
|  | Year Ended June 30,
(In thousands) |  | 2024 |  | 2023
Change in Plan Assets: |  |  |  |
Fair value of plan assets at beginning of year |  | $ | — |  |  | $ | — |
Employer contributions |  | — |  |  | — |
Benefits paid |  | — |  |  | — |
Fair value of plan assets at end of year |  | $ | — |  |  | $ | — |
Projected postretirement benefit obligation at end of year |  | 859 |  |  | 826 |
Funded status of plan |  | $ | (859) |  |  | $ | (826) |
|  | June 30,
(In thousands) |  | 2024 |  | 2023
Amounts Recognized in the Consolidated Balance Sheets Consist of: |  |  |  |
Current liabilities |  | $ | (69) |  |  | $ | (61) |
Noncurrent liabilities |  | (790) |  |  | (765) |
Total |  | $ | (859) |  |  | $ | (826) |
(In thousands) |
Estimated Future Benefit Payments: |
Year Ending: |
June 30, 2025 | $ | 71 |
June 30, 2026 | 73 |
June 30, 2027 | 74 |
June 30, 2028 | 75 |
June 30, 2029 | 75 |
June 30, 2030 to June 30, 2034 | 351 |
Expected Contributions: |
June 30, 2025 | $ | 71 |

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- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 710 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/710/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 712 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/712/tableOfContent Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 715 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/715/tableOfContent Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/718/tableOfContent + Details
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