Remarkable progress highlights MFA's achievements
Once again, let me start off with, "What a difference a year makes." Last year at this time, your cooperative was in the midst of suffering through the effects of the free-fall of the U.S. and world economy.
Oddly, last year came on the heels of MFA's largest profitability in the history of the cooperative.
I'm proud to report MFA weathered the storm well. Not as well as we'd like. But I can announce preliminary (because year-end books are not closed as of this writing) profitability approaching $10 million. That's remarkable progress. We're not yet where we want to be, but we're on the right path.
A year ago this past summer, MFA's senior management identified and listed major initiatives designed to restore the company to profitability and to outline a plan of action for full recovery.
During MFA's annual August managers' meeting last year, I personally addressed MFA's managers and told them my goal was to return to a growth mode. From the looks of the marketplace then, I told them the process would take two to three years.
I had been asked if I regretted taking the president and CEO role prior to these challenging times.
My answer? Hell, no. Remember the old joke about the difference between the contributions of a chicken and a pig in a bacon-and-eggs breakfast? The chicken is involved; the pig is committed.
Think of me as the pig, I told the managers. I know what needs to be done to get things on the right track.
By August of last year, we had established new financial targets and detailed plans to achieve those targets. Those plans included reductions in payroll, capital expenditures, sales of non-strategic and under-performing assets, reduction in borrowing needs, a formalized risk-management policy and very specific financial goals.
Never once did I think MFA and its highly skilled and dedicated workforce would not accomplish those initiatives. My concern involved external factors over which we have no control, like drought, flood, higher interest rates or a worldwide recession. Fortunately, luck was on our side.
I stood again in front of those managers this year at our August meeting. It gave me great pride to announce that we met most of the short-term goals and were ahead of schedule on many of the longer-term goals.
Aggressive balance-sheet management, financial performance, outstanding MFA employees and loyal customers put MFA one to two years ahead of a very aggressive schedule.
At MFA, we have implemented new sales and marketing programs in addition to our traditional marketing programs.
We have detailed activity steps to improve sales and margins in wholesale. We have detailed activity steps to improve sales and margins at retail. We have detailed activity steps to further reduce home office expenses without adversely impacting services to the operating divisions.
Those reductions will be made through modification, elimination, and a combination of process improvements and personnel changes.
We have targeted improvements over our base performance of $8 million in profitability per year.
You'll notice almost everything discussed above is about yesterday. Those of you who know me well know I am far more interested in tomorrow. MFA is moving forward toward that future.
We have the right people in the right places. We respect our customers. We enjoy the respect of those customers. MFA is large enough to compete favorably and small enough to understand and appreciate the needs of customers and potential customers.
We will continue to aggressively manage our balance sheet. We will continue to hire the best people and keep them trained. We will anticipate and focus on opportunities. We will be creative. We will better understand our competitive advantages. We will continually evaluate our marketing effectiveness. We will continue to sell.
We will constantly look for alternative ways to do business. We will frequently touch base with you, our customer. We are going to resist-no, we are going to ignore negativity.
We will have big goals. We will work hard. We will constantly treat our customers with respect and earn their business. We will attract new customers. And we will not rest until we move MFA into that future by creating opportunities to serve you, our customer.
Folks, we're just getting started. And we'll have fun along the way, doing what we do best in the heart of the country. MFA truly is made for agriculture.
Bill Streeter is president and CEO of MFA Incorporated.