Seasons of Change
Nov 02, 2020
By: Kevin Lauwagie, Chairman of the Board
As we transition from one calendar season into another, now is a fitting time to reflect on the tremendous success we have achieved during UFC’s season of change which has taken place over the last twenty months.
It is clear, with the close of fiscal 2020 now behind us, the changes we implemented as part of our mission to return focus to our core businesses has significantly strengthened the financial health of UFC. In doing so, we have reduced our intermediate and operating debt significantly; in fact, our operating debt was $0.00 for a period of time. To put this into perspective, the last time this happened was in 2016. Numbers do not lie. Our financial gains validate the effectiveness of our changes as well as annual patronage dividends.
What does this mean for our member-owners? With every season comes an end, and also a new beginning. With fiscal 2021 well underway, we are at our new beginning. UFC is more focused, more efficient, and more nimble than ever before. We are now better positioned to make decisions and act quickly on new opportunities that are in the best interest of our member-owners. In doing so, we are positioned to better serve our member-owners through competitive products, prices, services and financial returns.
Moving forward we will continue to focus on making moves that will further strengthen the financial health of the business. From a high level, the board of directors intends to continue revolving equity as a result of our strong financials. We have paid out the balance of preferred equity to those requesting so and 10% of the balance of preferred equity to those not making a request. Preferred equity stock has been returning 7% annually to those invested. These funds were used to generate working capital for the Brownton Grain project totaling $3.9 million. The preferred equity investments have worked well for UFC and its member investors.
On a separate note, UFC’s fiscal year ended on August 31st and we are nearing the end of the audit process for fiscal 2020 and I believe you will be pleased with the financial performance of YOUR cooperative. With current meeting restrictions and safety of our members and employees front of mind, we are in the process of deciding how we will handle our Annual Meeting which was originally planned to be held at the Berdan Center on December 9th. Given the challenging environment, the state has published an executive order that removes the requirement for an annual meeting, and allows for mail in voting for directors elections which allows us flexibility to ensure everyone’s safety. We will be communicating a definitive plan in the near future. Based on 2020 fiscal year performance we will be distributing patronage checks.
Last, our board of directors will be reduced from eight seats to seven. Two directors will be retiring: myself (24 years of service) and Todd Nelson (16 years of service). Unlike previous years, the 2021 board of directors will be elected by mail in ballot. You can expect to receive your ballot in your mailbox in mid-November.