Farmer Bros. Co. said late Monday that Chief Executive Roger Laverty III is stepping down as of April 19 and will retire at the end of the company's fiscal year. The company also announced cost reductions that include laying off 80 employees.
Laverty, 63, has been with the Torrance coffee roaster and institutional food service company for five years, and now plans to devote “additional time to personal and family matters,” the company said. Laverty will leave the board of directors when he retires on June 30.
The board said Chief Financial Officer Jeffrey Wahba, and President Patrick Criteser will share chief executive duties until a replacement for Laverty is found.
"On behalf of the shareholders and the entire board of directors, I would like to thank Rocky for his focus, determination and leadership in expanding the company's business over the past five years,” said Chairman Guenter Berger in a statement. “Rocky's efforts have positioned the company as one of the nation's largest (direct-store delivery) businesses for coffee, tea and culinary products."
After a long period of stagnation, Laverty grew Farmer Bros. into one the nation’s largest delivery businesses for coffee, tea and culinary products. The company acquired Sara Lee’s DSD Coffee delivery business in 2009, and Coffee Bean International, a large Portland, Ore. specialty coffee roaster, in 2007.
But the company’s financials have suffered as coffee bean prices have doubled over the last year and cocoa, sugar and spices prices also have soared. The company finally announced price increases last month.
The company also announced Monday that it would not pay a dividend for the current fiscal fourth quarter, and has reduced its headcount by 80 full-time employees. It also plans to realign its sales division to better focus on customer retention and increase market share in certain market segments. The company did not say how many employees it now has, but Yahoo Finance put the number before the layoffs at 2,030.
"We anticipate these actions will favorably impact overall profitability without sacrificing the superior service our customers have come to expect,” said Wahba in a statement. “In addition, these actions will help reach our goal of generating positive cash flow for fiscal 2012.”
Before the announcement, Farmer Bros. shares closed up 55 cents, or 4.5 percent, to $12.86 on the Nasdaq.
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