Financial Report

For Fiscal Year End June 30, 2007

Elka Malkis

Income Statements

Sales last year were over 37.4 million dollars, an increase of 4% over last year. Store sales were $27,727,220, Warehouse sales were $9,680,935, and sales at our new On-Line store were $15,943.

At the Store, we averaged 2,562 customers per day, the same as last year, with an average transaction of $29.77, an increase of 2% over last year. The Warehouse had 151 regular customers at the end of this year, compared to 100 last year. The On-Line store, which we opened at the end of October, had 329 customers in those first 8 months, with an average transaction of $51.88.

As a percent of Sales, our blended Gross Profit Margin went down a little bit, from 36.6% to 36.1%.

The primary reason the margin is down a bit is that the warehouse's sales increased at a faster rate than the store's, and the Warehouse has a lower margin (18.7) than the Store (39.7).

We paid 5.9 million in Wages. We employ 260 people, with 202 of those at full-time and 58 part-time. Benefits and taxes came to an additional 2.6 million, of which $610,000 was spent on health, dental and disability insurance. All together we spent 22.9% of Sales on labor related expenses, making it, as always, our largest expense after Cost of Goods.

All the other General and Administrative expenses totaled 3.8 million. We spent $53,000 for trash disposal, $122,000 for property taxes, $170,000 for utilities, $392,000 in member discounts, $318,000 in credit and debit card processing fees, $105,000 to print and mail the newsletter. And finally, we spent $2,300 for business lunches, which amounts to .006% or six-thousandths of a percent of sales.

We earned $183,000 in interest, and booked Other Income of $173,000 most of which is service and delivery fees at the Warehouse.

Our total Patronage Refund this year is $968,364, which will be distributed, proportionately by purchases, to everyone who was a member in fiscal year 2007. Of your total refund, 60% will be returned to you as cash and 40% will be retained by the Co-op.

We paid $210,000 in State and Federal Income Taxes. Our Net Income for the year, after we pay taxes and patronage refund, is $266,000.

Balance Sheets

On the Asset side, we have a little more cash in checking and savings accounts.

Our Inventory is up - primarily due to the warehouse.

Our Receivables are a little lower - these are receivables from the Warehouse, and this simply may be a timing issue.

We bought some new Equipment this year: new bike racks; new coffee fixture; a dishwasher, a freezer and an oven for the Deli; we remodeled the admin office; and we upgraded the telephone system at the Warehouse.

Other Assets are higher due mainly to an increase in our deferred tax benefit. This is an odd accounting requirement where we have to estimate the future value, at the current tax rate, of expenses that we can deduct on the financial statements, but not on the tax returns. For example, if we have more charitable contributions this year than are allowed on the tax return, we must estimate how much in tax savings that will garner us next year when we can deduct the allowable amount of contributions carried over.

On the Liabilities side there is not too much change - the Patronage Refund is a little smaller than last year, but last year's refund was unusually high.

Changes in Equity are due to member stock purchases, posting last year's equity portion of the Patronage Refund and this year's Net Income which, when added to all previous years' income, becomes Retained Earnings.