SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30,
1997
Commission File Number 0-13963
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
(Exact name of registrant as specified in its charter)
NEW MEXICO 85-0054230
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
811 South Platinum, Deming, New Mexico 88030
(505) 546-2769
Check whether the issuer (1) filed all reports required to be
filed by Section or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required
to file such reports, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
As of November 14, 1997, 13,776 shares of Common Stock of
Mimbres Valley Farmers Association, Inc. ("Farmers" or the
"Company") were outstanding.
Transitional small business disclosure format: Yes No X
<PAGE>
PART I
Item 1. Financial Statements
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
d.b.a. FARMERS, INC.
BALANCE SHEET
September 30, 1997 and June 30, 1997
<TABLE>
ASSETS
<S> <C> <C>
CURRENT ASSETS: SEPT 97 JUNE 97
Unaudited Audited
Cash and equivalents $ 219,784 $ 414,538
Trade and related party
receivables net of allowance
for doubtful accounts of
$36,168 at Sept. 30, 1997
and June 30, 1997 206,716 273,372
Inventories 1,942,511 1,871,922
Prepaid expenses 60,124 97,659
Prepaid income taxes 258,576
Income taxes receivable 23,950
Deferred income taxes 454,449
TOTAL CURRENT ASSETS 2,687,711 3,135,890
NET PROPERTY AND EQUIPMENT 1,973,118 2,040,264
OTHER NON-CURRENT ASSETS
Investment in supplier 68,046 71,629
Notes receivable-supplier 59,667 59,667
TOTAL OTHER NON-CURRENT
ASSETS 127,713 131,296
TOTAL ASSETS $4,788,542 $5,307,450
</TABLE>
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
d.b.a. FARMERS, INC.
BALANCE SHEET
September 30, 1997 and June 30, 1997
UNAUDITED
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C>
CURRENT LIABILITIES SEPT 97 JUNE 97
Unaudited Audited
Accounts payable $ 976,069 $1,205,396
Accrued expenses 148,382 219,070
Current portion of long-term
debt and capital leases 249,509 249,509
TOTAL CURRENT LIABILITIES 1,373,960 1,673,975
LONG-TERM DEBT AND CAPITAL
LEASES LESS CURRENT PORTION 1,629,748 1,663,863
DEFERRED INCOME TAXES 37,537 224,814
TOTAL LIABILITIES 3,041,245 3,562,652
STOCKHOLDERS' EQUITY
Common stock, $25 par-shares
authorized 500,000; 13,910
issued and 13,776 outstanding 347,750 347,750
Retained earnings 1,402,897 1,400,398
Treasury shares (3,350) (3,350)
TOTAL STOCKHOLDERS' EQUITY 1,747,297 $1,744,798
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $4,788,542 $5,307,450
</TABLE>
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
d.b.a. FARMERS, INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997
AND SEPTEMBER 30, 1996
UNAUDITED
<TABLE>
Three Months Three Months
Ended Ended
Sept. 30, 1997 Sept. 30, 1996
<S> <C> <C>
NET SALES $4,207,428 $5,064,372
COST OF SALES 3,208,257 3,765,342
Gross profit 999,171 1,299,030
OPERATING EXPENSES 993,649 1,195,699
Operating gain (loss) 5,522 103,331
OTHER INCOME (EXPENSE)
Patronage rebates and commissions 58,363 36,810
Rent income 14,049 12,197
Interest income 215 725
Interest expense (61,528) (51,655)
Miscellaneous 36,478 20,117
Income before income taxes 53,099 121,524
INCOME TAXES EXPENSE (18,054) (44,964)
NET INCOME $35,045 $76,560
RETAINED EARNINGS
Beginning of the period $1,367,852 $1,968,748
End of the period $1,402,897 $2,045,308
NET INCOME PER COMMON SHARE $3 $6
</TABLE>
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
d.b.a. FARMERS, INC.
STATEMENT OF CASH FLOWS
For the Three Months Ended September 30, 1997
and September 30, 1997
UNAUDITED
<TABLE>
Three Months Three Months
Ended Ended
Sept. 30, 1997 Sept. 30, 1996
<S> <C> <C>
OPERATING ACTIVITIES
Net income $35,046 $76,560
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Depreciation and amortization 75,736 77,335
Decrease in trade and related
party receivables 75,618 126,122
Increase in inventories (70,589) (187,035)
Decrease in prepaid expenses 36,618 16,952
Increase in income tax payable 18,054 44,964
Decrease in accrued expenses (93,653) (99,167)
Decrease in accounts payable (224,418 (272,337)
Net cash used by
operating activities (147,588) (216,606)
INVESTING ACTIVITIES
Decrease in property and
equipment (7,672) (27,398)
Decrease in investment in supplier 3,583
FINANCING ACTIVITIES
Proceeds from long term debt
and capital leases -0- 5,648
Repayment of long term debt and
capital leases (34,115) (54,807)
Net cash used for financing
activities (34,115) (49,159)
DECREASE IN CASH EQUIVALENTS (185,792) (293,163)
CASH AND EQUIVALENTS
Beginning of period 405,576 (293,163)
End of period $219,784 $0
</TABLE>
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
d.b.a. FARMERS, INC.
Notes to Financial Statements
UNAUDITED
1. Basis of Presentation
In the opinion of management, the accompanying unaudited
financial statements contain all adjustments necessary to
present fairly the financial position of Farmers as of
September 30, 1997 and June 30, 1997 and the results of
operations and cash flows for the three-month periods ending
September 30, 1997 and September 30, 1996.
The accounting policies followed by Farmers are set forth in
Note 1 to the financial statements in the 1997 Farmers Annual
Report filed on Form 10-KSB.
The results of operations for the three-month period ended
September 30, 1997 is not necessarily indicative of the
results to be expected for the full year.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Financial Condition
The Company filed its federal income tax return for the year
ending June 30, 1997 in the first quarter. The Company
anticipates a tax refund of $309,000. The Company expects to
use these funds to reduce short term bank debt and trade
payables.
Working capital ratios have improved from 1.74 at June 30,
1997 to 1.96 at September 30, 1997.
The Company is continuing to review inventory products and
categories at all stores to improve product margins and
movement.
Results of Operations
Sales from all stores were consistent with the previous
quarter. Gross margins increased from 19.5% in the fourth
quarter to 25.0% in the current quarter due to improved
pricing and the reduction of price discounts on slow and
obsolete inventory.
Savings from discontinued businesses and the implementation of
a purchase order system are reflected in the decrease in
quarterly operating expenses from the fourth quarter to the
current quarter.
Other income improved in the current quarter due to the rental
of two units in the mall.
The Company expects to begin the installation of a new
computer system to ultimately connect all stores, provide
timely and accurate information, and reduce operating costs.
Other expense is consistent with the previous quarter.
Future results from operations may differ from the opinions
expressed by management.
PART II
Item 6. Exhibits and Reports on Form 8-K.
(3)(i) & (ii) Articles of Incorporation and Bylaws of
Mimbres Valley Farmers Association, Inc., as currently in
effect, were filed as an exhibit to the Company's registration
<PAGE>
statement filed in 1985 and are incorporated herein by
reference.
(27) The Financial Data Schedule is attached as Exhibit
27.
No reports on Form 8-K were filed during the quarter for
which this report is filed.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities
Exchange Act of 1934, the registrant has caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: November 14, 1997.
MIMBRES VALLEY FARMERS ASSOCIATION,
INC.
By: James E. Keeler
James E. Keeler
Director
By: Garry S. Carter
Garry S. Carter,
Chief Executive Officer and
General Manager
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE SEPTEMBER 30, 1997 UNAUDITED FINANCIAL STATEMENTS
INCLUDED AS ITEM 1 TO FORM 10-QSB TO WHICH THIS SCHEDULE IS
ATTACHED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1997
<CASH> 219,784
<SECURITIES> 0
<RECEIVABLES> 302,551
<ALLOWANCES> 36,168
<INVENTORY> 1,942,511
<CURRENT-ASSETS> 2,687,711
<PP&E> 2,048,854
<DEPRECIATION> 75,736
<TOTAL-ASSETS> 4,788,542
<CURRENT-LIABILITIES> 1,373,960
<BONDS> 1,629,748
0
0
<COMMON> 347,750
<OTHER-SE> 1,402,897
<TOTAL-LIABILITY-AND-EQUITY> 4,788,542
<SALES> 4,207,428
<TOTAL-REVENUES> 4,316,533
<CGS> 3,208,257
<TOTAL-COSTS> 4,201,906
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 36,168
<INTEREST-EXPENSE> (61,528)
<INCOME-PRETAX> 53,099
<INCOME-TAX> (18,054)
<INCOME-CONTINUING> 35,045
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,045
<EPS-PRIMARY> 3
<EPS-DILUTED> 3
</TABLE>
