Financial Overview

Cooperative Coffees is legally governed by Subchapter T of the Internal Revenue Code of 1986 which applies to most cooperatives and that meet the following criteria: 1) the cooperative is owned by patrons of the coop and those with ownership only receive one vote regardless of their level of patronage; 2) the cooperative must operate at or near cost and if profits are earned they must be returned to the patrons in proportion to their patronage.

In practice, this structure significantly affects our financial operations in many ways.  Some of the most important affects are:

• Securing capital investment in the cooperative is challenging because common stock can only be owned by patrons (members of the cooperative that buy green coffees).
  
• We are required to operate at or near breakeven so accumulating profits as retained earnings is challenging.
• We may sell preferred stock to outside investors which is non-voting, but the rate of return is limited to a maximum of 8% annual return.

In spite of these challenges, our first seven years of operation have been quite successful.  Some highlights include:

• Annualize sales growth of 35% over the last five years.
• Every year of operation since the first full year in business has been profitable.
• The members of the cooperative have invested over $350,000 in the organization through the purchase of one share each of common stock and non-voting preferred stock.
• Have access to $2,000,000 of short and long term debt financing to cover our inventory and receivables financing.

Some key measures include the following: