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 December 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 February 13, 1998, 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
December 31, 1997 and June 30, 1997
<TABLE>
ASSETS
<S> <C> <C>
CURRENT ASSETS: DEC 97 JUNE 97
Unaudited Audited
Cash and equivalents $ 249,025 $ 414,538
Trade and related party
receivables net of allowance
for doubtful accounts of
$34,141 at Dec.31, 1997
and $36,168 at
June 30, 1997 192,109 273,372
Inventories 1,903,164 1,871,922
Prepaid expenses 22,742 97,659
Income taxes receivable 23,950
Deferred income taxes 454,449
__________ __________
TOTAL CURRENT ASSETS 2,367,040 3,135,890
__________ __________
NET PROPERTY AND
EQUIPMENT 1,915,924 2,040,264
OTHER NON-CURRENT ASSETS
Investment in supplier 67,000 71,629
Notes receivable-supplier 59,667 59,667
__________ __________
TOTAL OTHER
NON-CURRENT ASSETS 126,667 131,296
__________ __________
TOTAL ASSETS $4,409,631 $5,307,450
========== ==========
</TABLE>
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
d.b.a. FARMERS, INC.
BALANCE SHEET
December 31, 1997 and June 30, 1997
UNAUDITED
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES DEC 97 JUNE 97
Unaudited Audited
Accounts payable 704,724 $1,205,396
Accrued expenses 197,962 219,070
Current portion of long-term
debt and capital leases 129,606 249,509
________ __________
TOTAL CURRENT LIABILITIES 1,032,292 1,673,975
LONG-TERM DEBT AND CAPITAL
LEASES LESS CURRENT PORTION 1,606,251 1,663,863
DEFERRED INCOME TAXES 72,559 224,814
__________ __________
TOTAL LIABILITIES 2,711,102 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 1,354,129 1,400,398
Treasury shares (3,350) (3,350)
__________ __________
TOTAL STOCKHOLDERS' EQUITY 1,698,529 $1,744,798
__________ __________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $4,409,631 $5,307,450
========== ==========
</TABLE>
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
d.b.a. FARMERS, INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1997
AND DECEMBER 31, 1996
UNAUDITED
<TABLE>
<S> <C> <C>
Six Months Six Months
Ended Ended
Dec. 31, 1997 Dec 31, 1996
NET SALES $8,253,234 $10,146,702
COST OF SALES 6,446,114 8,199,256
_________ ____________
Gross profit 1,807,120 1,947,446
OPERATING EXPENSES 1,978,499 2,423,381
__________ __________
Operating gain (loss) (171,379) (475,935)
OTHER INCOME (EXPENSE)
Patronage rebates and commissions 117,122 91,659
Rent income 37,249 23,448
Interest income 2,704 3,379
Interest expense (111,812) (109,451)
Miscellaneous 56,012 2,700
__________ __________
Loss before income tax
benefit (70,104) (464,200)
INCOME TAXES BENEFIT 23,835 157,828
__________ __________
NET LOSS (46,269) (306,372)
RETAINED EARNINGS
Beginning of the period $1,400,398 $1,968,748
__________ __________
End of the period $1,354,129 $1,662,376
========== ==========
NET INCOME PER COMMON SHARE ($3) ($22)
========== ===========
</TABLE>
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
d.b.a. FARMERS, INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1997
AND DECEMBER 31, 1996
UNAUDITED
<TABLE>
<S> <C> <C>
Three Months Three Months
Ended Ended
Dec. 31, 1997 Dec 31, 1996
NET SALES $4,045,806 $5,082,330
COST OF SALES 3,237,857 4,433,914
__________ __________
Gross profit 807,949 648,416
OPERATING EXPENSES 984,850 1,227,682
__________ __________
Operating gain (loss) (176,901) (579,266)
OTHER INCOME (EXPENSE)
Patronage rebates and commissions 58,759 54,849
Rent income 23,200 11,251
Interest income 2,489 2,654
Interest expense (50,284) (57,796)
Miscellaneous 19,534 (17,417)
__________ __________
Loss before income tax
benefit (123,203) (585,723)
INCOME TAXES BENEFIT 41,889 202,791
__________ ________
NET LOSS (81,314) (382,932)
RETAINED EARNINGS
Beginning of the period $1,435,443 $2,045,308
___________ __________
End of the period $1,354,129 $1,662,376
========== ===========
NET INCOME PER COMMON SHARE ($6) ($28)
========== ===========
</TABLE>
<PAGE>
MIMBRES VALLEY FARMERS ASSOCIATION, INC.
d.b.a. FARMERS, INC.
STATEMENT OF CASH FLOWS
For the Six Months Ended December 31, 1997
and December 31, 1996
UNAUDITED
<TABLE>
<S> <C> <C>
Six Months Six Months
Ended Ended
Dec.31,1997 Dec.31,1996
OPERATING ACTIVITIES
Net loss $ (46,268) $(306,371)
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Depreciation and amortization 150,902 153,147
Reserve for obsolescent inventor 23,467
Decrease in trade and related
party receivables 81,263 52,808
(Increase)Decrease in inventories (31,241) 576,880
(Increase)Decrease in prepaid
expenses 74,917 (42,372)
(Increase)Decrease in prepaid
income tax 326,144 (66,209)
Decrease in accrued expenses (21,109) (112,462)
Decrease in accounts payable (500,672) (386,557)
_________ __________
Net cash provided (used)
by operating activities 33,936 (107,669)
INVESTING ACTIVITIES
Increase in property and
equipment (26,563) (1,640)
Decrease in investment in supplier 4,629
__________ ________
Net cash used for investing
activities (21,934) (1,640)
FINANCING ACTIVITIES
Proceeds from long term debt
and capital leases 180,097 305,648
Repayment of long term debt and
capital leases (357,612) (213,524)
Net cash (used for) provided by
financing activities (177,515) 92,124
__________ __________
DECREASE IN CASH EQUIVALENTS (165,513) (17,185)
CASH AND EQUIVALENTS
Beginning of period 414,538 293,163
__________ __________
End of period $ 249,025 $ 275,978
========== ==========
</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 December 31, 1997 and June 30, 1997
and the results of operations and cash flows for the six-month periods
ending December 31, 1997 and December 31, 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 six-month period ended
December 31, 1997 is not necessarily indicative of the results to
be expected for the full year.
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
received a tax refund of $309,795. The company has used these
funds to reduce short term bank debt and trade payables.
Working capital ratios have improved from 1.74 at June 30, 1997
to 2.29 at December 31, 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 22.0% 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 has started 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.
The company is monitoring the operations of the hardware store
at its new location. The new location has yet to make an
operating profit despite adjustments to inventory, personnel
costs, and other factors. If results do not improve in
response to these operating changes, the Company may have to
decide whether or not to relocate the store to its original
location adjacent to the supermarket or discontinue its operations.
Future results from 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.
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: February 11, 1998.
MIMBRES VALLEY FARMERS
ASSOCIATION, INC.
By James E. Keeler
James E. Keeler
President and Director
By Garry S. Carter
Garry S. Carter
Chief Executive Officer and
General Manager
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE DECEMBER 31, 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> 6-mos
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1997
<CASH> 249,025
<SECURITIES> 0
<RECEIVABLES> 285,917
<ALLOWANCES> 34,141
<INVENTORY> 1,903,164
<CURRENT-ASSETS> 2,367,040
<PP&E> 1,915,924
<DEPRECIATION> 150,902
<TOTAL-ASSETS> 4,409,631
<CURRENT-LIABILITIES> 1,032,292
<BONDS> 1,606,251
0
0
<COMMON> 347,750
<OTHER-SE> 1,354,129
<TOTAL-LIABILITY-AND-EQUITY> 4,409,631
<SALES> 8,253,234
<TOTAL-REVENUES> 8,466,321
<CGS> 6,446,114
<TOTAL-COSTS> 8,424,613
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 111,812
<INCOME-PRETAX> (70,104)
<INCOME-TAX> (23,835)
<INCOME-CONTINUING> (46,269)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (46,269)
<EPS-PRIMARY> (3)
<EPS-DILUTED> (3)
</TABLE>
