Farmer Brothers shareholders defeated a bid led by the founder’s granddaughter for three seats on the board of directors, backing CEO Michael Keown and his decision to relocate the century-old coffee company from southern California to North Texas.
Now, with the proxy fight behind it, the company is preparing to move its headquarters staff from temporary quarters near Alliance Airport into a newly built complex across from Texas Motor Speedway in the coming weeks.
Construction crews are putting the finishing touches on the 538,000-square-foot facility in Northlake that will include 100,000 square feet of manufacturing space, where coffee beans will be roasted and packaged, and 300,000 square feet of distribution space. About 150 employees currently work at the Farmer Brothers headquarters and the new complex is expected to employ 300.
“I’m excited to get focused on the business,” Keown said after the shareholders meeting Thursday at the Marriott Hotel at Champions Circle in far north Fort Worth. He said distribution activities have started at the new facility, with outbound coffee shipments to start soon.
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Three incumbent directors including Keown were reelected by a plurality over the slate of challengers, according to preliminary results of the shareholder vote. Final tallies will be filed with the Securities and Exchange Commission in the next few days.
The vote ended a family feud that began in August when Carol Farmer Waite, a granddaughter of the company’s founder, Roy E. Farmer, sent a letter to the board criticizing Keown and calling for a change in leadership. The group called the company’s decision to move to Northlake from Torrance, Calif., “misguided” and said Farmer Brothers had improved results by selling assets and trimming inventory, not growing the business.
But executives called Waite’s accusations “misleading” and warned that electing the group’s three directors to the seven-member board would effectively put the public company back in control of the founding family. And Farmer family members were split, with Waite’s brother, Richard Farmer, siding publicly with management.
Waite did not attend Thursday’s meeting, citing a personal conflict. But a representative read a letter in which she accused the board of misleading shareholders and not responding to her concerns.
“With this board, I have been ignored and not acknowledged,” the letter stated. “This is not acceptable.”
Some long-term shareholders said after the meeting that the company has become far more transparent under Keown than when it was run by Farmer family members, and speculated that Waite may be upset that it’s not paying a dividend.
Farmer Brothers shares (ticker: FARM) have increased by more than 200 percent since Keown took the helm in 2012. The company also said it has boosted the amount of coffee pounds processed and sold by over 40 percent and gone from a net loss of $27 million in fiscal 2012 to net income of $90 million in fiscal 2016, boosted by one-time tax benefits..
Moving into the modern complex is expected to save the company as much as $20 million a year in operating costs.