SUBMITTED AGENDA ITEMS:

Review of March financial statements
Sales continue to be slower than budgeted. Margin is slightly under budget and this may be due to people being more conservative in their spending and buying lower margin items due to the slowed economy. HP has had lay offs and is planning more and this could be another reason. Conventional Grocery stores are now carrying more organics and this may also be impacting sales. May sales are starting to climb. Payroll expense has been kept under control and is under the budget for the month and year to date. Gross profit is lagging compared to budget. Expenses are below budget. Net income from operations beat the budget as well. In April the store had the benefit of both Easter and an Owner Appreciation Day falling in that month.

Depreciation on the rack system didn't start until the end of March when it was budgeted to begin in January so this decreased our depreciation.
Decrease in cash was due to the increase in assets and liabilities.
Management is keeping a tight grip on labor with the slow sales. April is the first month where the downward trend reversed and began to increase. The management has decided to offer an Owner Appreciation Day each month starting in July and for the rest of the year. With fuel prices continuing to go up will impact cost of goods in the store and at this point we are not sure of the impact of this.

The Board is encouraged to read the Cooperative Grocer Magazine to see growth trends in the natural foods industry. The industry average is 11.05% growth over previous year for our size store in a growth mode and FA is at 10.05%.

Discussion on how the subtractions should be done on the balance sheet. Anne would like it to be reversed from how we do it now. Dana will make the change to make increases positive and decreases negative. The variance in monthly net change will now reflect this change. The change will also be made for the annual net change.

Review of 1st Quarter financial statements
Dana will reliable these statements to be year to date instead of quarterly reports, so at the second quarter the statistics will be for the first six months rather than second quarter alone.
Reviewed the Board Formatted financial statements.
Statistics compared to the Cooperative Grocer were discussed.
· Margin has slipped
· Payroll is higher than last year but in line with the budget
· There is a profit
· Current ratio is above the industry median. We have $1.93 for every $1 we have of debt
· Debt to equity has gone up slightly due to rack purchase line of credit. This should improve as the year progresses. We will not accelerate debt payment because we need the cash.
· Sales per labor hour is improving because of the tight reign on labor
· Sales per customer have gone up
· Benchmarks are from 2004 because the new benchmarks don't come out until the July 2006 Cooperative Grocer Magazine and these will be the 2005 numbers
· Store overall is doing well
· Anne would like the wording changed from total fixed assets to total fixes/other long-term assets to make this line item clearer. Dana will make this change. The numbers tie together but this make it clearer for the Board.
Discussion property purchase financial impact
Dana and Michele met with Gary Feuerstein and Evanite. Evanite is very open to working with the Co-op. They may let us close our deal separately from Endex's purchase. The lot line adjustment is still being discussed. There will be an easement on the property by the railroad tracks for whoever buys that piece of property. We are concerned about interest rates going up so would like to purchase sooner rather than later. The Board will make the offer to Evanite once Endex is ready.
Endex is planning to lease spaces to businesses that go with the Co-op.

Discussion on financial handling of FA Kitchen Commissary
Dana is looking at how we account for the kitchen, as it is a production unit rather than a retail unit. She's concerned about how it affects the labor margin and whether or not it's comparable to the target cooperative grocer retail margins. Discussed various ways the kitchen might be accounted for. Further research needs to be done into these various ideas and the data will be brought to the next Finance Committee meeting for further discussion.

New Board member training process
Toni would like to continue as chair and Dave will take Chris's place on the committee. At the Board Meeting these positions will be announced. This meeting was Dave's first meeting so he doesn't feel ready to chair the committee yet.

Meeting adjourned: 6:45pm