Family calls Farmer Bros. relocation to Fort Worth ‘misguided’

The granddaughter of the founder of Farmer Brothers wants a change of leadership at the 100-year-old coffee company, questioning decisions including the corporation’s relocation from California to Fort Worth.

In a letter sent to Farmer’s directors, Carol Farmer Waite criticizes CEO Mike Keown’s leadership and says she has organized a stockholder group called Save Farmer Bros. Waite said the group includes other family members and collectively owns 23 percent of outstanding stock.

They plan to nominate a slate of director candidates within the next week who would stand for election at the 2016 annual shareholders meeting, expected to be held in December.

“The sad truth is painfully obvious. Farmer Bros., its officers and employees, as well as all stakeholders, need fresh leadership to realize the full potential of our stock price,” Waite wrote in the letter filed with the Securities and Exchange Commission.

Among their concerns, Waite’s group says Farmer Brothers stock is undervalued and has been held down by poor operating performance, including lagging revenue growth. She criticized Keown’s management, including “his misguided decision to quickly move Farmer Brothers headquarters to Texas,” which she says resulted in 300 California workers losing their jobs.

In a statement issued Monday evening, a company spokesman said: “Farmer Bros. appreciates the role of the Farmer family in building the strong foundation the company has today and the legacy of Roy E. Farmer . . . . The board will seek to engage with the stockholder group constructively, consistent with the board’s obligations to all stockholders.

“The company’s principles, unchanged from their original founding by Roy E. Farmer, continue to guide the board and management team as Farmer Bros. executes its business strategy. The board will continue to take actions that it believes are in the best interest of the company and all of its stockholders.”

Farmer Brothers, which makes and supplies coffee to restaurants, hotels, casinos and other food-service providers, broke ground a year ago on a corporate headquarters complex at Interstate 35W and Texas 114, across from Texas Motor Speedway in Northlake.

The 537,000-square-foot facility 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. It is expected to employ at least 300.

Profitability has improved this year despite a small dip in revenues. For the first nine months of its fiscal year ended March 31, the company reported an operating profit of $5.1 million, up 8 percent, while revenues fell less than 1 percent to $410.2 millon.

The company, which is moving from Torrance, Calif., has temporarily established its headquarters operation near Alliance Airport.

Farmer Brothers shares (ticker: FARM) were trading up 55 cents, or nearly 2 percent, at $31.52 a share in morning trading Monday.

This story was originally published August 29, 2016 at 3:43 PM with the headline "Family calls Farmer Bros. relocation to Fort Worth ‘misguided’."