- Performance took both an expected and unexpected negative turn in May with a net loss of $(5k)
- Starting at the top, total sales for the month were $153k with $82k in e-tab sales, $63k in paper tab sales and $8k in bingo
- As communicated in prior communications, Dawn had been projecting a slowdown in gambling activity as the summer months arrive and that is proving true
- Outside of January 2022’s weak sales due to the covid surge, June represented the softest demand for e-tabs, which had been around $100k a month since February, for a decline of roughly 20% in May; paper tab sales declined to $63k
- Gross profit margins were a mixed bag with e-tabs at 16.91% ($14k in gross profit) while paper tabs were poor at 15.39% ($10k in gross profit)
- To put the paper tabs’ gross profit margin of 15.4% into perspective, paper tabs had been running around 18.3% since October 2021
- Overall, the decline in sales volume was anticipated; however, what was overlooked was the sizeable progressive tax on gross profits that builds throughout the fiscal year, which had not been as impactful on monthly net income figures due to greater gross profits from robust sales
- So how much was this tax in May? About $11.5K in total, which means net income would have been roughly $6k from operations (gross profits $26K – operating expenses $20k)
- Next month’s progressive gross margin tax is estimated at $9k, meaning that June is also likely to see negative net income once again due to softer sales as people spend leisure time elsewhere
- April’s gross margin tax was $10K but total sales were almost 10% higher, so the margin tax was more easily absorbed in the monthly income statement
- The following expenses were approved for July 2022:
- CG Made Easy Administrative Fee = $250
- Inventory = $4,000
- Paper tab sales slowed slightly, so less inventory purchases needed given the amount on hand
- Rotary Gambling Team Compensation = $2,600
- Bingo Team Compensation = $2,000
- Bingo is being hosted every Thursday night
- Revenue Share with MPeters = $8,500
- Profit share is 31% of e-tab gaming à As noted above, e-tab sales plummeted in May and is expected to remain down for the rest of summer, resulting in a lower share
- City of Faribault = $1,000
- Weaker sales lower the amount to be shared with the city
- Revenue Share with Boxers = $6,000
- Profit-share w/ e-tabs = 15% & paper tabs = 20% à Likewise, softer sales will result in less revenue share
- Misc. Cost = $2,000
- FRYS is hiring Reece, Winter payroll processing is ~$1k a month with another $1k for pursue bingo and/or other misc. costs that arrive
- Total Expenses = $23,350
- On a motion by Kymn Anderson with a second by Rebecca Freed, the FRYS membership approved the expenses for July
- Even though earnings were poor, FRYS was still able to provide charitable gifts to the following organizations at the June membership meeting:
- Faribault Rotary Youth Exchange “Outbound Students” - $1,000 each to the two outbound exchange students; $2,000 approved ($1k each)
- Faribault Diversity Coalition “international festival” – sponsorship of entertainment for youth. $500 approved
- Morristown Gun Club “Summer youth league” –$500 approved
- Total Gifts: $3,000
- On a motion by Dick Huston with a second by George Wickstrom, the FRYS membership approved the charitable contributions
- In other FRYS news, Keith Kramer has been able to locate a contractor to get repairs done at the Rotary Camp, a long-time objective of FRYS but finding labor to get the job done has been a challenge
- The FRYS board has earmarked profits for the Rotary Camp and the contractor has been located at the opportune time given that UBIT hits as of August 31 (FRYS tax year-end); estimates on the repair costs are still to come.
- The final piece of membership news is that Brenda DeMars has accepted the FRYS board’s invite to become an official board member of FRYS!
- Brenda is the critically important Gambling Manager for FRYS’ charitable gambling operation and the essential connection for the FRYS / Boxers partnership
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