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 March 31, 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 March 31, 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
March 31, 1997 and June 30, 1996
ASSETS
CURRENT ASSETS: MARCH 1997 JUNE 1996
Unaudited Audited
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<S> <C> <C>
Cash and equivalents $ 180,672 $ 293,163
Trade and related party
receivables net of allowance
for doubtful accounts of
$18,852 at March 31, 1997
and June 30, 1996 373,373 506,635
Inventories net of reserve
at March 31, 1997 for
obsolete inventory of $25,678 2,219,384 2,863,318
Prepaid expenses 142,549 89,799
Prepaid income taxes 145,324 249,801
TOTAL CURRENT ASSETS 3,061,303 4,002,716
Plant, Property and Equipment 5,268,885 5,314,627
Accumulated Depreciation 3,181,906 2,994,421
NET PROPERTY AND EQUIPMENT 2,086,979 2,320,206
OTHER NON-CURRENT ASSETS
Investment in supplier 68,051 68,051
Note receivable-supplier 59,667 59,667
Intangibles, net of
amortization 13,035 17,888
TOTAL OTHER NON-CURRENT
ASSETS 140,752 145,606
TOTAL ASSETS $5,289,034 $6,468,528
</TABLE>
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
d.b.a. FARMERS, INC.
BALANCE SHEET
March 31, 1997 and June 30, 1996
UNAUDITED
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES MARCH 1997 JUNE 1996
Unaudited Audited
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<S> <C> <C>
Accounts payable $1,204,544 $1,558,849
Accrued expenses 157,260 330,333
Current portion of long-term
debt 424,475 302,185
TOTAL CURRENT LIABILITIES 1,786,279 2,191,367
LONG-TERM DEBT AND CAPITAL
LEASES LESS CURRENT PORTION 1,533,124 1,926,477
DEFERRED INCOME TAXES 37,537 37,537
TOTAL LIABILITIES 3,356,940 4,155,381
STOCKHOLDERS' EQUITY
Common stock, $25 par-shares
authorized 500,000; 13,910
issued and 13,776 outstanding 347,749 347,749
Retained earnings 1,587,695 1,968,748
Treasury shares (3,350) (3,350)
TOTAL STOCKHOLDERS' EQUITY 1,932,094 2,313,147
$5,289,034 $6,468,528
</TABLE>
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
d.b.a. FARMERS, INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 1997
UNAUDITED
Three Months Nine Months
Ended Ended
March 31, 1997 March 31, 1997
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<S> <C> <C>
NET SALES $4,617,330 $14,764,032
COST OF SALES 3,670,167 11,869,423
<PAGE>
Gross profit 947,163 2,894.609
OPERATING EXPENSES 1,112,481 3,535,862
Operating loss (165,318) (641,253)
OTHER INCOME (EXPENSE)
Patronage rebates and commissions 75,831 167,490
Rent income 6,776 30,224
Interest income 179 3,558
Interest expense (52,619) (162,070)
Miscellaneous 22,000 24,700
Loss before income taxes (113,152) (577,352)
INCOME TAXES BENEFIT 38,471 196,300
NET LOSS (74,681) (381,052)
RETAINED EARNINGS
Beginning of the period 1,662,376 1,968,748
End of the period 1,587,695 1,587,695
NET LOSS PER COMMON SHARE ($5) ($28)
</TABLE>
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
d.b.a. FARMERS, INC.
STATEMENT OF CASH FLOWS
For the Nine Months Ended March 31, 1997
UNAUDITED
OPERATING ACTIVITIES
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Net loss ($381,052)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 227,189
Decrease in trade and related party receivables 133,262
Decrease in inventories 643,934
Increase in prepaid expenses (52,750)
Decrease in prepaid income taxes 104,477
Decrease in accrued expenses (173,074)
Decrease in accounts payable (354,305)
Net cash provided by operating activities 147,681
INVESTING ACTIVITIES
Decrease in property and equipment 10,889
FINANCING ACTIVITIES
Proceeds from long term debt and capital leases 305,648
Repayment of long term debt and capital leases (576,711)
Net cash used for financing activities (271,063)
DECREASE IN CASH EQUIVALENTS (112,491)
CASH AND EQUIVALENTS
Beginning of period 293,163
End of period $180,672
</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, Inc. as of
March 31, 1997 and June 30, 1996 and the results of operations
and cash flows for the periods ending March 31, 1997.
The accounting policies followed by Farmers, Inc. are set
forth in Note 1 to the financial statements in the 1996
Farmers, Inc. Annual Report filed on Form 10-K.
The results of operations for the three-month and nine-month
periods ended March 31, 1997 are not necessarily indicative of
the results to be expected for the full year.
<PAGE>
FARMERS, INC.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
On February 28, 1997, the Board of Directors appointed Garry S.
Carter as the Chief Executive Officer and General Manager of the
Company. Mr. Carter is a CPA. He has several years experience in
senior management in banking and other industries.
Financial Condition
The Company received an anticipated $300,776 tax refund in the
third quarter and reduced long term debt by that amount. In
addition, the Radio Shack franchise was sold. Trade payables
and obsolete inventories were reduced.
Results of Operations
Sales from continuing operations reflected the usual after
Christmas decline.
Gross profit stabilized in the third quarter as various
product lines were adjusted to meet the needs of area
customers. Slow moving and specialty items are being
eliminated from all retail inventory categories. The recently
implemented purchase order system has provided management with
an effective tool to review product lines.
The furniture store inventory was liquidated and the appliance
store was combined with the hardware store. In addition, the
garage was closed. As a result of combining some of the
stores and eliminating others, salary expense was reduced. A
substantial savings in salary expense is expected in the
fourth quarter.
Other income and expense are consistent with the prior
quarter.
Future results of operations may differ from the opinions
expressed by Management in the above Management Discussion and
Analysis.
<PAGE>
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 statement filed
in 1985 and are incorporated herein by reference.
(27) The Financial Data Schedule is attached as Exhibit 27.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated: May 15, 1997.
MIMBRES VALLEY FARMERS ASSOCIATION,
INC.
By: /s/ Judy Phillips
Judy Phillips
Director
By: /s/ Garry S. Carter
Garry S. Carter, Chief Executive
Officer and General Manager
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE MARCH 31, 1997 UNAUDITED FINANCIAL STATEMENTS INCLUDED AS ITEM
1 TO THIS 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> MAR-31-1997
<CASH> 180,672
<SECURITIES> 0
<RECEIVABLES> 433,040
<ALLOWANCES> 18,852
<INVENTORY> 2,219,384
<CURRENT-ASSETS> 3,061,303
<PP&E> 5,268,885
<DEPRECIATION> 3,181,906
<TOTAL-ASSETS> 5,289,034
<CURRENT-LIABILITIES> 1,786,279
<BONDS> 1,533,124
0
0
<COMMON> 347,749
<OTHER-SE> 1,587,695
<TOTAL-LIABILITY-AND-EQUITY> 5,289,034
<SALES> 4,617,330
<TOTAL-REVENUES> 4,722,116
<CGS> 3,670,167
<TOTAL-COSTS> 4,782,648
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 18,852
<INTEREST-EXPENSE> (52,619)
<INCOME-PRETAX> (113,152)
<INCOME-TAX> 38,471
<INCOME-CONTINUING> (74,681)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (74,681)
<EPS-PRIMARY> (5)
<EPS-DILUTED> (5)
</TABLE>
