UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(b) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: FEBRUARY 28, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 AND 15(d) OF THE
SECURITES EXCHANGE ACT OF 1934
Commission file: No. 33-94644
MINN-DAK FARMERS COOPERATIVE
(Exact named of registrant as specified in its charter)
North Dakota 23-7222188
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7525 Red River Road
Wahpeton, North Dakota 58075
(Address of principal (Zip Code)
executive offices)
(701) 642-8411
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
YES __X__ NO _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
Class of Common Stock April 9, 1997
$250 Par Value 482
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
MINN-DAK FARMERS COOPERATIVE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
FEBRUARY 28, 1997 FEBRUARY 28, 1997
FEBRUARY 29, 1996 FEBRUARY 29, 1996
---------------------- ----------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
REVENUE:
From sales of sugar, by-products, yeast
and resale commodities, net of discounts $ 52,893 $ 51,118 $ 101,555 $ 88,479
Other income (211) (50) (494) (32)
--------- --------- --------- ---------
52,683 51,068 101,062 88,447
--------- --------- --------- ---------
EXPENSES:
Production costs of sugar, by-products,
yeast and resale commodities sold 10,112 10,172 20,012 19,284
Marketing (includes freight and storage) 5,064 4,893 10,893 10,695
General and administrative 1,123 1,188 2,253 2,130
Interest 1,428 1,041 2,614 1,814
(Gain) loss on disposition of property and equipment 4 0 101 10
--------- --------- --------- ---------
17,731 17,294 35,873 33,933
--------- --------- --------- ---------
NET PROCEEDS RESULTING FROM MEMBER AND
NONMEMBER BUSINESS $ 34,952 $ 33,774 $ 65,189 $ 54,514
========= ========= ========= =========
DISTRIBUTION OF NET PROCEEDS:
Credited to members' investment:
Components of net income:
Income (loss) from non-member business $ (488) $ 240 $ (577) $ 379
Patronage income 6,576 10,456 11,471 10,526
--------- --------- --------- ---------
Net income 6,088 10,696 10,894 10,905
Unit retention capital 225 228 753 729
--------- --------- --------- ---------
Net credit to members' investment 6,313 10,924 11,647 11,634
Payments to members for sugarbeets, net of unit
retention capital 28,639 22,850 53,542 42,880
--------- --------- --------- ---------
NET PROCEEDS RESULTING FROM MEMBER AND
NONMEMBER BUSINESS $ 34,952 $ 33,774 $ 65,189 $ 54,514
========= ========= ========= =========
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
MINN-DAK FARMERS COOPERATIVE
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(IN THOUSANDS)
FEBRUARY 28, AUGUST 31,
1997 1996
ASSETS (UNAUDITED) (AUDITED)
--------- ---------
CURRENT ASSETS:
<S> <C> <C>
Cash $ (81) $ 853
--------- ---------
Receivables:
Trade accounts 12,033 10,294
Growers 1 2,840
--------- ---------
12,035 13,134
--------- ---------
Advances to affiliate 2,008 780
--------- ---------
Inventories:
Refined sugar, pulp and molasses to be sold
on a pooled basis 52,202 7,749
Nonmember refined sugar 65 468
Yeast 110 109
Materials and supplies 3,862 4,027
Beet Inventory 15,132 -
Other 98 98
--------- ---------
71,469 12,450
--------- ---------
Deferred charges 590 1,119
--------- ---------
Prepaid expenses 2,845 1,789
--------- ---------
Property and equipment available for sale 789 789
--------- ---------
Total current assets 89,655 30,916
--------- ---------
PROPERTY, PLANT AND EQUIPMENT:
Land and land improvements 13,975 11,956
Buildings 25,926 22,254
Factory equipment 77,178 72,463
Other equipment 2,743 2,201
Construction in progress 19,265 22,352
--------- ---------
139,086 131,226
Less accumulated depreciation (49,308) (48,551)
--------- ---------
89,778 82,675
--------- ---------
OTHER ASSETS:
Investments restricted for capital lease projects 5,048 7,514
Investment in stock of other corporations, unconsolidated
marketing subsidiaries and other cooperatives 12,907 12,663
Deferred income taxes 3,450 3,450
Other 770 1,052
--------- ---------
22,174 24,679
--------- ---------
See Notes to Consolidated Financial Statements $ 201,607 $ 138,270
========= =========
</TABLE>
<TABLE>
<CAPTION>
MINN-DAK FARMERS COOPERATIVE
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
(IN THOUSANDS)
FEBRUARY 28, AUGUST 31,
1997 1996
LIABILITIES AND MEMBERS' INVESTMENT (UNAUDITED) (AUDITED)
--------- ---------
<S> <C> <C>
CURRENT LIABILITIES:
Short-term notes payable $ 45,761 $ 0
--------- ---------
Current portion of long-term debt 2,513 2,513
--------- ---------
Accounts payable:
Trade (1,792) 6,623
Growers 20,800 6,064
--------- ---------
19,008 12,686
--------- ---------
Advances from affiliate 1,199 1,202
--------- ---------
Accrued liabilities 2,770 2,669
--------- ---------
Total current liabilities 71,251 19,070
LONG-TERM DEBT, NET OF CURRENT PORTION 32,804 48,810
OBLIGATION UNDER CAPITAL LEASE 12,000 12,000
OTHER 728 728
COMMITTMENTS AND CONTINGENCIES 0 0
--------- ---------
Total liabilities 116,783 80,609
--------- ---------
MINORITY INTEREST IN EQUITY OF SUBSIDIARY 399 337
--------- ---------
MEMBERS' INVESTMENT:
Preferred stock:
Class A - 100,000 shares authorized, $105 par value; 58,525 shares
issued and outstanding at August 31, 1996
and 66,967 at February 28, 1997 7,032 6,145
Class B - 100,000 shares authorized, $75 par value;
58,525 shares issued and outstanding at August 31, 1996
and 66,967 at February 28, 1997 5,023 4,389
Class C - 100,000 shares authorized, $76 par value;
58,525 shares issued and outstanding at August 31, 1996
and 66,967 at February 28, 1997 5,089 4,448
--------- ---------
17,144 14,982
Common stock, 600 shares authorized on February 28, 1997 and 600 shares
authorized on August 31, 1996, $250 par value; issued and outstanding,
483 shares at February 28, 1997
and 481 shares at August 31, 1996 121 120
Paid in capital in excess of par value 23,753 10,296
Unit retention capital 6,982 6,262
Qualified allocated patronage 3,702 3,720
Nonqualified allocated patronage 32,934 21,575
Retained earnings (deficit) (210) 367
--------- ---------
84,425 57,324
--------- ---------
$ 201,607 $ 138,270
========= =========
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
MINN-DAK FARMERS COOPERATIVE
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
SIX MONTHS ENDED
FEBRUARY 28, 1997
FEBRUARY 29, 1996
--------------------
1997 1996
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income allocated to members' investment $ 10,894 $ 10,905
Add (deduct) noncash items:
Depreciation and amortization 2,125 1,449
Equipment disposals - loss 101 10
Net loss allocated from unconsolidated marketing subsidiaries (209)
Noncash portion of patronage capital credits (237)
Retention of nonqualified unit retains 753 730
Changes in operating assets and liabilities:
Accounts receivable and advances (129) 1,477
Inventory and prepaid expenses (60,075) (38,200)
Deferred charges 529 360
Other assets 282 (404)
Accounts payable, advances, and accrued liabilities 9,454 10,730
-------- --------
NET CASH (USED IN)/PROVIDED BY OPERATING ACTIVITIES (36,512) (12,943)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposition of property, plant and equipment 1 3
Capital expenditures (6,748) (7,322)
Investment in stock of other corporations, unconsolidated
marketing subsidiaries and other cooperatives (244) (3,670)
Minority interest in equity of subsidiaries 62 95
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (6,928) (10,894)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of short-term debt 45,761 16,660
Payment of long-term debt (16,006) (4,540)
Payment of unit retains and allocated patronage (2,870) (2,493)
Issuance of long-term debt 0 2,000
Sale and repurchase of common stock, net 1
Issuance of stock 15,619 12,106
Issuance of long term tax-exempt bonds 0 12,000
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 42,505 35,733
-------- --------
NET INCREASE (DECREASE) IN CASH (934) 11,895
CASH, BEGINNING OF YEAR 853 287
-------- --------
CASH, END OF QUARTER $ (81) $ 12,181
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash payments for:
Interest $ 2,646 $ 1,603
======== ========
Income taxes, net of refunds $ 33 $ 28
======== ========
See Notes to Consolidated Financial Statements
</TABLE>
MINN-DAK FARMERS COOPERATIVE
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The condensed consolidated financial statements for the three month periods
ended February 28, 1997 and February 29, 1996 are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments) which are, in
the opinion of management, necessary for a fair presentation of the
financial position and operating results for the interim period. The
condensed consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes thereto, together with
management's discussion and analysis of financial condition and results of
operations, contained in the Company's Annual Report to Stockholders
previously submitted in the Company's Annual 10-K for the fiscal year ended
August 31, 1996. The results of operations for the three months ended
February 28, 1997, are not necessarily indicative of the results for the
entire fiscal year ending August 31, 1997.
2. In August 1996, the company declared a revolvement of the remaining 1988
crop and 35% of the 1989 crop per unit retains and allocated patronage.
That amount, $2,508,453, was paid to the stockholders on October 18, 1996.
In August, 1996 the company declared a revolvement of 35% of the 1995 crop
allocated patronage. On January 2, 1997, that payment was made to the
stockholders in the amount of $196,700.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION
FOR THE THREE MONTHS ENDED AND SIX MONTHS ENDED FEBRUARY 28, 1997 AND 1996
The following discussion and analysis relates to the financial condition and
results of operations of Minn-Dak Farmers Cooperative ("the Company") for the
three months ended and six months ended February 28, 1997 (the second quarter of
the Company's 1996-1997 fiscal year) and 1996 (the second quarter of the
Company's 1995-1996 fiscal year). The Company's fiscal year runs from September
1 to August 31.
RESULTS FROM OPERATIONS
COMPARISON OF THE THREE MONTHS ENDED FEBRUARY 28, 1997 AND 1996
Revenue for the three months ended February 28, 1997 increased $1.8 million from
the 1996 period, an increase of 3.5%. Revenue from sales of finished goods
decreased $0.2 million, while the change in finished goods inventory increased
$2.0 million. Revenue from sugar sales increased $0.5 million, or 2.3%,
reflecting a 2.8% decrease in sales volume, offset by a 5.2% increase in average
net selling price. While there can be no assurance that the Company's estimates
will be accurate, the increase in the average net selling price for sugar is
expected to continue. The Company is projecting the average net selling price
for sugar to increase approximately 6% for the fiscal year due mostly to
price/customer mix changes and favorable market conditions.
Revenue from pulp sales decreased $0.2 million or 6.1%, reflecting a 9.9%
decrease in sales volume, offset by a 4.2% increase in average net selling
price. The decrease in volume is attributable to the shipping plan established
for fiscal year 1997, which calls for very few shipments in the first five
months of the fiscal year to one of the Company's major markets. While there can
be no assurance that the Company's estimates will be accurate, the increase in
the average net selling price for pulp is expected to continue. The Company is
projecting the average net selling price for pulp to increase 11% for the fiscal
year as a result of a stronger domestic market (feed prices are up), coupled
with more domestic sales volume and value added sales. Revenue from molasses
decreased $0.1 million or 8.6%, reflecting a 10.9% decrease in sales volume,
offset by a 2.5% increase in average net selling price. The decrease in volume
can be attributable to less production of molasses to sell. This is a result of
a higher quality sugarbeet crop, which in turns results in less molasses
production per unit of sugarbeets processed. While there can be no assurance
that the Company's estimates will be accurate, the increase in average net
selling price for molasses is expected to continue and will increase
approximately 8% for the fiscal year.
Revenues from yeast sales decreased $0.4 million or 28%, reflecting a 34.1%
decrease in sales volume, offset by a 9.3% increase in average net selling
price. The reduction in sales volume is attributable to reduced production of
yeast, which was due to the inability of the plant to produce quality fresh
yeast. The yeast quality problem was due to the poor quality of the growth
medium for the yeast - beet molasses. The problem was resolved by the end of
January but actual sales were limited in January and February to approximately
50% of budget. Steps have been taken to insure this type of problem is minimized
or eliminated in the future.
The other factor contributing to the change in revenues results from the
increase or decrease in finished goods inventories. The increase in the value of
all finished goods inventories for the three months ended February 28, 1997 was
$2.0 million, or 8.1% more than the increase in the value of the finished goods
inventories for the prior year. The increase in the value of the finished goods
inventories was mostly a result of the amount of sugar available during that
period. Production of sugar was 282,000 cwt. more for the period, while the
sugar sales volume change was 34,000 cwt. less, thus resulting in a greater
increase in the value of sugar inventory for the three months ended.
Depreciation and Interest expenses for fiscal year 1996-1997 are expected to be
higher than fiscal year 1995-1996 due to more fixed asset purchases and more
long term debt, both associated with the Company's plant expansion plan
activities (see the Liquidity and Capital Resources section). Depreciation
expense is expected to increase approximately $1.0 million to $1.5 million,
while Interest expense is expected to increase approximately $1.5 million to
$2.0 million. For the three months ended February 28, 1997 depreciation expense
was $0.20 million, or 29.2% higher than the same period in 1996. Interest
expense was $0.39 million, or 37.2% higher than the same period in 1996.
In the section Distribution of Net Proceeds, payments to members for sugarbeets,
net of unit retention capital and unprocessed sugarbeet inventory, for the three
months ended February 28, 1997 increased $5.8 million, or 25.3% from the 1996
period. For fiscal year 1996-1997 the Company is projecting a payment to growers
for sugarbeets totaling $69.4 million, which is $15.1 million, or 28% more than
the prior fiscal year. The payment is based upon (i) an average delivered sugar
content of 18.61%, (ii) a total sugarbeet crop of 1,506,646 tons and (iii) the
Company's projected selling price for its sugar. The projected increase is the
result of higher selling prices for all products, and greater production of
products as a result of increased tons of beets harvested and increased quality
of the beets delivered (higher sugar content).
COMPARISON OF THE SIX MONTHS ENDED FEBRUARY 28, 1997 AND 1996
Revenue for the six months ended February 28, 1997 increased $13.1 million from
the 1996 period, an increase of 14.8%. Revenue from sales of finished goods
decreased $3.4 million, while the change in finished goods inventory increased
$16.5 million. Revenue from sugar sales decreased $2.7 million, or 5.3%,
reflecting a 10.5% decrease in sales volume, offset by a 5.8% increase in
average net selling price. While there can be no assurance that the Company's
estimates will be accurate, the increase in the average net selling price for
sugar is expected to continue. The Company is projecting the average net selling
price for sugar to increase approximately 6% for the fiscal year due mostly to
price/customer mix changes and favorable market conditions.
Revenue from pulp sales decreased $0.2 million or 5.4%, reflecting a 12.4%
decrease in sales volume, offset by an 8% increase in average net selling price.
The decrease in volume is attributable to the shipping plan established for
fiscal year 1997, which calls for very few shipments in the first five months of
the fiscal year to one of the Company's major markets. While there can be no
assurance that the Company's estimates will be accurate, the increase in the
average net selling price for pulp is expected to continue. The Company is
projecting the average net selling price for pulp to increase 11% for the fiscal
year as a result of a stronger domestic market (feed prices are up), coupled
with more domestic sales volume and value added sales. Revenue from molasses
decreased $0.1 million or 2.1%, reflecting a 5% decrease in sales volume, offset
by a 3% increase in average net selling price. The decrease in volume can be
attributable to less production of molasses to sell. This is a result of a
higher quality sugarbeet crop, which in turns results in less molasses
production per unit of sugarbeets processed. While there can be no assurance
that the Company's estimates will be accurate, the increase in average net
selling price for molasses is expected to continue and will increase
approximately 8% for the fiscal year.
Revenues from yeast sales decreased $0.4 million or 12.4%, reflecting a 16.7%
decrease in sales volume, offset by a 5.1% increase in average net selling
price. The reduction in sales volume is attributable to reduced production of
yeast, which was due to the inability of the plant to produce quality fresh
yeast. The yeast quality problem was due to the poor quality of the growth
medium for the yeast - beet molasses. The problem was resolved by the end of
January but actual sales were limited in January and February to approximately
50% of budget. Steps have been taken to insure this type of problem is minimized
or eliminated in the future.
The other factor contributing to the change in revenues results from the
increase or decrease in finished goods inventories. The increase in the value of
all finished goods inventories for the six months ended February 28, 1997 was
$16.5 million, or 58.6% more than the increase in the value of the finished
goods inventories for the prior year. The increase in the value of the finished
goods inventories was mostly a result of the amount of sugar available during
that period. Production of sugar was 517,000 cwt. more for the period, while the
sugar sales volume change was 270,000 cwt. less, thus resulting in a greater
increase in the value of sugar inventory for the six months ended.
Depreciation and Interest expenses for fiscal year 1996-1997 are expected to be
higher than fiscal year 1995-1996 due to more fixed asset purchases and more
long term debt, both associated with the Company's plant expansion plan
activities (see the Liquidity and Capital Resources section). Depreciation
expense is expected to increase approximately $1.0 million to $1.5 million,
while Interest expense is expected to increase approximately $1.5 million to
$2.0 million. For the six months ended February 28, 1997 depreciation expense
was $0.52 million, or 38% higher than the same period in 1996. Interest expense
was $0.80 million, or 44.1% higher than the same period in 1996.
In the section Distribution of Net Proceeds, payments to members for sugarbeets,
net of unit retention capital and unprocessed sugarbeet inventory, for the six
months ended February 28, 1997 increased $22.9 million, or 24.9% from the 1996
period. For fiscal year 1996-1997 the Company is projecting a payment to growers
for sugarbeets totaling $69.4 million, which is $15.1 million, or 28% more than
the prior fiscal year. The payment is based upon (i) an average delivered sugar
content of 18.61%, (ii) a total sugarbeet crop of 1,506,646 tons and (iii) the
Company's projected selling price for its sugar. The projected increase is the
result of higher selling prices for all products, and greater production of
products as a result of increased tons of beets harvested and increased quality
of the beets delivered (higher sugar content).
LIQUIDITY AND CAPITAL RESOURCES
Because the Company operates as a cooperative, payments for member-delivered
sugar beets, the principal raw material used in producing the sugar and
agri-products it sells, are subordinated to all member business expenses. In
addition, actual cash payments to members are spread over a period of
approximately one year following delivery of sugar beet crops to the Company and
are net of unit retains and patronage allocated to them, all three of which
remain available to meet the Company's capital requirements. This member
financing arrangement may result in an additional source of liquidity and
reduced outside financing requirements in comparison to a similar business
operated on a non-cooperative basis. However, because sugar is sold throughout
the year (while sugar beets are processed primarily between September and April)
and because substantial amounts of equipment are required for its operations,
the Company has utilized substantial outside financing on both a seasonal and
long-term basis to fund such operations. The financing has been provided by the
St. Paul Bank for Cooperatives (the "Bank"). The Company had a short-term line
of credit with the Bank for calendar 1996 of $35.0 million and has a short-term
line of credit with the Bank for calendar 1997 of $50.0 million.
The various loan agreements between the Bank and the Company obligate the
Company to maintain or achieve certain amounts of working capital and certain
financial ratios, as well as imposing other restrictions. As of February 28,
1997 the Company was in compliance with its loan agreements with the bank.
Working capital increased $6.6 million for the six months ended 2-28-97.
Increased working capital is a result of normal financing, operational and
capital expenditure activities of the Company. The targeted working capital for
8-31-97 is approximately $7.0 million dollars and, in the Company's opinion, is
the most accurate expectation.
The primary factor for the changes in the Company's financial condition for the
six months ended February 28, 1997 was due to the commencement of the 1996/1997
sugarbeet processing season. The cash used to provide for operations of $36.5
million and for investing activities of $6.9 million was funded through cash
flow financing activities and a reduction in cash. The net cash provided through
financing activities was primarily provided through proceeds from the issuance
of short term debt of $45.8 million, repayment of long term debt of $16.0
million, payment of remaining 1988 crop and 35% of 1989 crop unit retains and
allocated patronage of $2.5 million, payment of 1995 crop qualified allocated
patronage of $.2 million and issuance of stock of $15.6 million
Capital expenditures for the six months ended February 28, 1997 totaled $6.7
million. Capital expenditures for fiscal year 1997 are currently estimated at
$35.9 million, $33.9 million resulting from the Company's strategy of expanding
capacity and improving operating efficiencies.
These capital expenditures are a continuation of the strategy to improve
operating efficiencies and the Company's announced plan to expand the capacity
of its manufacturing and agricultural receiving facilities. The funds necessary
to finance the Company's expansion plan, environmental and general capital
expenditures for the prior, current and next fiscal year, which is estimated to
total $86.2 million, are expected to be derived from the sale of its common and
preferred stock (net of stock offering costs of $0.1 million) totaling $37.3
million and the balance, or $50.0 million, from long-term debt secured from the
St. Paul Bank for Cooperatives and/or through the use of a lease (through
Richland County, North Dakota) financed by the issuance of solid waste disposal
revenue and industrial development revenue bonds. As of February 28, 1997, the
expansion plan was on schedule and projected to be within budget.
The company anticipates that the funds necessary for compliance with the Bank's
working capital requirements and future capital expenditures will be derived
from the net proceeds of a stock offering that was completed in 1996, Company
depreciation, unit retains, non-patronage income, and long-term borrowing. Those
costs not covered through the stock offering will be funded through a long-term
debt agreement, with the Bank who is the principal lender. The long-term debt
created by this expansion will be repaid with funds generated through
depreciation, income tax savings, and reduced costs per cwt of production.
(Depreciation expense is a non-cash expense that under the Company's accounting
procedures reduces the amounts available for payments to the Company's members.
The resources represented by such non-cash expenses are available as a source of
working capital for the Company, which may be used for payment of long-term
debt.) The strategic plan of the Company calls for the economics of scale
generated by the expansion project to first be applied to the long-term debt
associated with the project. The initial operational savings and working capital
considerations will be used to pay off the incremental debt for the project.
After the incremental long term debt has been satisfied, the Company believes
that the shareholders will see the savings through operations and other working
capital considerations being reflected in higher per ton beet payments, all
other factors affecting the per ton payments being equal.
In fiscal 1996, the company was able to secure a lease from Richland County,
North Dakota funded by low interest, fifteen year tax exempt solid waste
disposal bonds in the amount of $12.0 million with zero principle amortization
for the first three years, and $1.0 million per year of principle amortization
for the next 12 years. These bonds were required to be secured by a Letter of
Credit from a non-government agency bank (Norwest Bank North Dakota) who in turn
was secured by a Letter of Credit from the St. Paul Bank for Cooperatives, the
Company's primary lender. Solid waste disposal bonds are available under certain
conditions where a by-product of manufacturing must be further manufactured or
refined to produce a salable product.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the annual meeting of the shareholders which was held on December 10, 1996 a
proposed change to the Cooperative's by-laws was voted upon by the shareholders.
The by-law change dealt with Article XVII - MEMBERS which defines membership in
the association. The change establishes specific geographical definition to
areas of residency and production area, relative to the location of the
association, in order to qualify as a shareholder. The by-law change proposal
passed upon a vote of 188 shareholders for the change and 6 shareholders
against. The Cooperative also held election of directors. Elected to three year
terms by voice vote and unanimous consent were the following directors: Michael
Hasbargen, district four; Jack Lacey, district five; and Paul Summer, district
seven. In addition, the following directors (including current expiration date
of term) continue on following the Cooperative's annual meeting: Jerry Meyer,
district one (1997); Robert Breuer, district two (1998); Edward Moen, Jr.,
district three (1998); John Hought, district six (1997); Lawrence Deal, district
eight (1997); and Victor Krabbenhoft, district nine (1998).
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
SIGNATURES
Pursuant to the requirement 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.
MINN-DAK FARMERS COOPERATIVE
(Registrant)
Date: April 10, 1997 /s/ LARRY D. STEWARD
-------------------- --------------------
Larry D. Steward
President and Chief Executive Officer
Date: April 10, 1997 /s/ STEVEN M. CASPERS
-------------------- ---------------------
Steven M. Caspers
Executive Vice President, and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> FEB-28-1997
<CASH> (81)
<SECURITIES> 0
<RECEIVABLES> 12,035
<ALLOWANCES> 0
<INVENTORY> 71,469
<CURRENT-ASSETS> 89,655
<PP&E> 139,086
<DEPRECIATION> (49,308)
<TOTAL-ASSETS> 201,607
<CURRENT-LIABILITIES> 71,251
<BONDS> 12,000
0
17,144
<COMMON> 121
<OTHER-SE> 67,160
<TOTAL-LIABILITY-AND-EQUITY> 201,607
<SALES> 101,555
<TOTAL-REVENUES> 101,062
<CGS> 30,905
<TOTAL-COSTS> 30,905
<OTHER-EXPENSES> 2,354
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,614
<INCOME-PRETAX> 11,647
<INCOME-TAX> 0
<INCOME-CONTINUING> 11,647
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,647
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
