RAMJI BALAKRISHNAN, BOARD TREASURER
New Pi Board Treasurer
e ﬁscal year, which concluded in June, can be divided into
two distinct phases: pre and post-COVID.
Like others, we had to reconﬁgure our
entire operations for the second portion of
the year, starting March 2020.
Brieﬂy, as in prior years, revenue growth and operating
cashﬂow were negative in the ﬁrst portion of the year.
e disruption from the simultaneous remodel projects
of our Iowa City and Coralville stores did not help this
pattern. A sales surge with the arrival of COVID produced
positive revenue growth and positive operating cashﬂow
in the second portion of the year. Co-op Cart, an online
shopping initiative that went live in December 2019 (and
on which we had worked for a year or more), was a big part
in this resurgence. Indeed, at times, sales via Co-op Cart
accounted for up to 40% of total sales, although the
proportion has leveled oﬀ at a lower value.
From an accounting perspective, relative to the prior year,
we experienced a revenue growth of about (2%). However,
the reported loss increased by about 22% because our
costs do not decrease proportionately – we have a base
level of “ﬁxed” costs that we incur to operate the stores.
ese costs have been aggressively managed over the prior
years, and we do not have much more room to trim these
costs. As such, increased sales are the only way forward.
ese numbers do not tell the whole story, however.
Managing cashﬂow is the biggest challenge for businesses
like ours because we have thin margins and have
experienced several years of negative sales growth. e
good news is that our cash position improved substantively
for the year, increasing by a bit over $1 million. Digging
deeper, operating cashﬂow was about ($200,000). at
is, we had a negative cashﬂow from just running the
store. is outﬂow was magniﬁed when we add in the
approximately $740,000 that we invested in upgrading
the facilities, remodeling the stores and such. Financing
cashﬂow of about $1.98 million is comprised of the net
change in member equity shares as well as long term
liabilities. ere are two main components to the ﬁnancing
cashﬂow. First, we took out a loan for about $900,000
from Hills Bank to fund the store remodeling projects.
Second, we received a loan of $1.24 million from the
Payroll Protection Program (PPP) administered loan from
the Small Business Administration. is loan supported
the Co-op’s liquidity at a time of tremendous uncertainty.
Based on current guidance from our bankers and auditors,
we estimate 80% or more will be forgivable and recognized
as income in this new ﬁscal year. is PPP loan funded a
$2/hour bonus for all our team members from spring into
this fall which we would not have otherwise been able to
We enter this new ﬁscal year in a stronger ﬁnancial
position than we were in a year ago. e two drivers for
this optimism are the major changes to our operations
(including Co-op Cart) and the receipt of a forgivable loan
under the PPP loan. Despite the great uncertainty in the
external world currently, we remain optimistic that
New Pioneer will be here to serve our community for
years to come.
new pioneer food co-op’s newsletter16