FORT WORTH, Texas, Nov. 23, 2016 /PRNewswire/ -- Save Farmer Bros. today issued the following statement to stockholders to set the record straight regarding the many distortions and misrepresentations made by the Board of the Directors (the "Board") and management of Farmer Bros. Co. (NASDAQ : FARM ) ("FARM" or the "Company"):
"Over the past few months, CEO Mike Keown and his Board (note that Mr. Keown proudly claims in his LinkedIn profile to have recruited three of seven directors) have demonstrated that there is no limit to the distortions and misrepresentations that they will spread in their effort to squeeze out the Farmer family and firm up their control over your company. We have witnessed Mr. Keown and his Board take highly questionable actions in seeking to diminish the voting influence of the Company's employees, and with it their power to voice opposition to the culture of intimidation that Mr. Keown has instituted at the Company during his tenure as CEO. We have witnessed Mr. Keown and his Board endeavor to strip director Jeanne Farmer Grossman of her voice in the boardroom by spreading falsities and taking away her director independence for no good reason. We have witnessed Mr. Keown and his Board boasting about improving operating performance, when in reality they have used asset sales, inventory liquidation and one-time income tax benefits to mask the Company's bloated corporate expenses and poor capital allocation decisions under their watch. We have witnessed Mr. Keown and his Board set aside $3.5 million of stockholder capital to finance a scare campaign aimed at disseminating false information about Save Farmer Bros. It is time to set the record straight."
"Mr. Keown and his Board remain unapologetic about misrepresenting Randy Clark and Christopher Mottern as Certified Public Accountants in past proxy materials. Rather than taking responsibility, Mr. Keown and his Board attempt to distract stockholders from the issue by blaming Save Farmer Bros. for bringing these egregious misrepresentations to light. This entire episode demonstrates problems at the Company that run much deeper than two directors misrepresenting their credentials. Mr. Keown and his Board appear to have a 'circle the wagons' mentality when one of their own gets caught in a lie. How can stockholders trust a board that has this mentality?"
"Mr. Keown and his Board claim that Charles Marcy was 'brought to the attention of the Nominating Committee and the Board by Leadership Capital Partners, LLC,' and is therefore independent of Mike Keown. We find this claim to be an outrageous falsehood. Mr. Keown, in his LinkedIn profile, clearly claims that he recruited Mr. Marcy (as well as Randy Clark and Christopher Mottern). If that was not enough evidence, Messrs. Keown and Marcy had a longstanding friendship going back well before their time together on the Board. They were both directors of a regional non-profit in Boulder, Colorado for a number of years. We understand that their families had vacationed together on at least one occasion. Moreover, Mr. Marcy has publicly boasted multiple times about recommending Mr. Keown for the position of CEO of Farmer Bros. For Mr. Keown and his Board to claim that Mr. Marcy was independently identified by a third party does not pass the smell test."
"Mr. Keown and his Board have wheeled out a tired and stale argument from the 1980's by claiming that Save Farmer Bros. is seeking control of the Company without paying a 'control premium.' This is an extremely ironic claim for Mr. Keown and his recruits to make considering that they are the ones who effectively control the Company while owning a de minimis amount of Farmer Bros. stock. The truth is that we are not seeking control over the Company. The Save Farmer Bros. nominees will only have one constituency: Farmer Bros. stockholders. They will not be beholden to management for their directorship. Farmer Bros. stockholders will have selected them. This kind of mandate will allow them to truly provide oversite of management in a way that the current Board cannot."
"Mr. Keown and his Board proudly state that Richard F. Farmer, Ph.D. 'has publicly stated his support of the Board and management.' Mr. Keown and his Board went on to state that: 'The Farmer Bros. Co. Board and management team appreciate the support of Richard Farmer and remain committed to acting in the best interest of the Company and to delivering value to all stockholders.' The truth is that Mr. Farmer's 'support' of the Board rings very hollow. If Mr. Farmer believes that the Board is committed to 'delivering value to all stockholders,' then why did he start selling stock in December 2015? Why did he sell 600,000 shares on May 19, 2016? If Mr. Farmer believes that the Board is 'committed to acting in the best interest of the Company,' then why does he want to liquidate a substantial amount of the Farmer Bros. stock in the Farmer family trusts? Why don't Mr. Farmer's actions match his 'support' for the Board and management? Is Mr. Farmer using the Board and management to position himself to sell even more Farmer Bros. stock? Or are the Board and management using Mr. Farmer to tighten their grip on the Company? Or is it both? Is Save Farmer Bros. the only one who doesn't have a hidden agenda?"
"Mr. Keown and his Board have implied that Save Farmer Bros. group members have committed perjury by stating that our director nominees will cause the Company to explore all reasonable options to maximize stockholder value. This hyperbolic statement is so absurd that it further discredits Mr. Keown and his Board, who are trying to distract stockholders from their failure to create a special committee to explore all reasonable options to maximize stockholder value. In order to set the record straight, however, we will point out just how ridiculous and desperate this claim is. First, the statement is an obvious red herring. Save Farmer Bros.' nominees are independent of Ms. Waite, and will continue to be independent of Ms. Waite once they are on the Board. Why did Mr. Keown and his Board believe otherwise in making its statement? In Mr. Keown's world does he expect the directors that he recruited to always agree with him? That is not how Mr. Mortensen, Mr. Samore and Ms. Gonzalez-Yousef will operate as directors. Second, the quote, as presented by Mr. Keown and his Board as evidence of potential perjury on the part of Save Farmer Bros. group members, is so horribly edited that it removes all context. The full text of the quote, which was made nearly two years ago, should have read: 'At the present time, the beneficiaries and myself want to continue with our parents, grandfather and great-grandmother's vision and wishes (as stated in the trusts) since we all feel that it is in our best interest to do so. (emphasis added)' Don't be distracted by the tactics of Mr. Keown and his Board. Our director nominees, once elected, will call for the formation of a special committee to explore all reasonable options to maximize stockholder value. Do you honestly believe that Mr. Keown and his Board will do the same?"
"Mr. Keown and his Board will do or say anything to distract stockholders from the truth, which is that Mr. Keown is running out of levers to pull to mask the Company's bloated corporate overhead and mask his poor capital allocation decisions. What is going to happen to earnings when there are no longer real estate assets to sell? What is going to happen to earnings when there are no longer non-core businesses to divest? What is going to happen to earnings when there are no longer income tax benefits to harvest? What is going to happen to earnings when there is no longer excess inventory to liquidate? Stockholders will be left holding the bag now that Mr. Keown is out of levers to pull. Stockholders cannot wait another three years to send Mr. Keown and his Board a message that we see through their charade."
Investors with questions on how to vote, please contact:
Okapi Partners LLC
Bruce H. Goldfarb/Patrick McHugh/Charles Garske
(212) 297-0720 or Toll-Free (855) 305-0857
SOURCE Save Farmer Bros.