Financial Report

By Elka Malkis, Financial Manager

I know it's April. I know you're thinking tulips and lilacs. I know the last of the stock you made from the freerange Thanksgiving turkey is gone from the back of the freezer. This column, however, will report on the financial statements from October through December of long-ago 2005.

Sales for the quarter were $9,047,687, an increase over last year of 20.7%. The Gross Profit Margin was 35.1%. This is a blended margin, from both the retail store and the warehouse. Both the store and the warehouse exceeded their margin goals. This margin tells us that, after we paid the suppliers, we had just over 35 cents left from every dollar in sales available to pay all our other expenses.

Expenses included: $2,046,000 in Wages and Benefits (22.6%), Building Expenses of $201,776 (2.2%), Operating Expenses of $383,426 (4.3%), Administrative Expenses of $28,318 (.3%), Governance Expenses of $247,111 (2.7%) (this includes the $100,000 given out in WedgeShare grants), and Promotions Expenses of $88,777 (1%).

We sent in $98,000 to the IRS and Minnesota Department of Revenue for estimated taxes. We ended the quarter with $297,813 in Net Income After Tax, or 3.3% of sales.

Our Balance Sheet is very strong. Assets are just over $10 million dollars, which includes $3.2 million of Fixed Assets (land, building, equipment, vehicles) and almost $1 million in inventory. Our Liabilities are very low, primarily because we do not have any long-term bank debt. Our Current Ratio is a robust 2.94 to 1. This tells us that for every dollar we owe in the next 12 months (for example, to our suppliers) we have $2.94 to cover it.

Member Equity, totaling $8.6 million, consists of paid-in stock purchases (the one-time $80.00 stock purchase you make to become a Wedge Co-op owner), the portion of past patronage refunds that the Co-op retained, retained earnings from previous years (the profit we make on selling to non-members), and this year's Year-To-Date Net Income. Our Debt to Equity Ratio is .21 to 1. This tells us that 80% of our Assets are owned by the Co-op, and only 20% is owned from outside, again primarily our grocery suppliers.

My assessment of the Co-op financial statements is that we are in a great position whether we decide to expand the business in some way (2nd store, home store, something else?) or need to weather increasing competition from a downtown Lund's and Whole Foods, a Trader Joe's in St. Louis Park, or WalMart and SuperTarget promoting organics.