10-K/A: Golden Growers Amends 10-K, Reveals 2024 Financials & ProGold Sale
Annual Report Amendment
Golden Growers Cooperative filed an amended annual report, disclosing its 2024 financial results, a planned sale of its 50% ProGold LLC interest to Cargill for $81 million, and a proposed liquidation.
Summary
- Filed an Amendment No. 1 to the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, primarily to include the audit report for the year ended December 31, 2023, and updated certifications.
- Reported Net Income of $6.041 million for the fiscal year 2024, an increase from $5.331 million in fiscal year 2023.
- Earnings per Membership Unit increased to $0.39 in fiscal year 2024, up from $0.34 in fiscal year 2023.
- Total Assets decreased to $24.900 million as of December 31, 2024, from $26.824 million as of December 31, 2023.
- Members' Equity decreased to $24.696 million as of December 31, 2024, from $26.403 million as of December 31, 2023.
- The Cooperative's 50% investment in ProGold LLC decreased to $15.588 million in 2024 from $17.073 million in 2023.
- ProGold LLC, the joint venture, reported net income of $12.480 million in 2024, an increase from $12.169 million in 2023.
- The Board of Directors approved a resolution in January 2025 to submit a Plan of Liquidation and Dissolution of the Cooperative to its members for approval at the 2025 Annual Member Meeting.
- Cargill will purchase the Cooperative's 50% interest in ProGold LLC for $81 million within 30 days following the expiration of the Facility Lease on December 31, 2026.
- A distribution of $3,562,810, or $0.23 per outstanding membership unit, was declared in January 2025.
- The defined benefit pension plan was terminated in March 2023, with excess funds of $37,603 returned to the Cooperative in May 2024, and an excise tax of $18,802 paid in August 2024.
Sentiment
Score: 6
Explanation: The Cooperative reported increased net income and earnings per unit for FY 2024. The planned sale of its 50% interest in ProGold LLC to Cargill for $81 million, followed by a proposed liquidation and distribution of assets to members, represents a significant strategic event that could unlock value for members. However, total assets and members' equity declined, and corn revenue decreased significantly. The overall sentiment is cautiously positive due to the potential for a substantial return of capital to members, balanced against the operational declines and the winding down of the cooperative's current structure.
Positives
- Net Income increased to $6.041 million in FY 2024 from $5.331 million in FY 2023.
- Earnings per Membership Unit increased to $0.39 in FY 2024 from $0.34 in FY 2023.
- Net income from the 50% owned ProGold LLC increased to $12.480 million in 2024 from $12.169 million in 2023.
- A planned sale of the 50% ProGold LLC interest to Cargill for $81 million represents a significant future liquidity event for the Cooperative's members.
- Excess funds of $37,603 were returned to the Cooperative from the terminated pension plan in May 2024.
Negatives
- Total Assets decreased by $1.924 million to $24.900 million as of December 31, 2024.
- Members' Equity decreased by $1.707 million to $24.696 million as of December 31, 2024.
- Cash and Cash Equivalents decreased to $1.307 million in 2024 from $2.097 million in 2023.
- Corn Revenue decreased significantly to $61.998 million in 2024 from $88.019 million in 2023.
- Net Cash Used in Operating Activities remained negative at $396,000 in 2024.
- Member distributions of $7.745 million in 2024 exceeded net income, contributing to the decline in members' equity.
- The Cooperative's cash balance exceeded FDIC insurance limits by approximately $1.1 million at December 31, 2024.
Risks
- Reliance on Cargill for corn procurement services and operation of the ProGold Facility, with the current contract extending through December 31, 2026.
- Exposure to market price fluctuations for corn, which directly impacts corn revenue and expense.
- Concentration risk due to cash balances exceeding FDIC insurance limits by approximately $1.1 million at December 31, 2024.
- Unrealized losses on investments, although deemed temporary, indicate market volatility and potential for future impairment.
- The proposed Plan of Liquidation and Dissolution is subject to member approval at the 2025 Annual Member Meeting, introducing uncertainty regarding the Cooperative's future.
- The $81 million sale of the ProGold interest and subsequent liquidation are contingent on the expiration of the Facility Lease on December 31, 2026, delaying the realization of these events.
Future Outlook
The Cooperative plans to sell its 50% interest in ProGold LLC to Cargill for $81 million following the expiration of the Facility Lease on December 31, 2026. Subsequently, the Board of Directors has approved a resolution to submit a Plan of Liquidation and Dissolution of the Cooperative to its members for approval at the 2025 Annual Member Meeting, which would include the distribution of sale proceeds and all other assets to members.
Management Comments
- I have reviewed this annual report on Form 10-K/A of Golden Growers Cooperative (the registrant); Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
- Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
- The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Cooperative.
Industry Context
Golden Growers Cooperative operates within the agricultural cooperative and corn wet-milling industry, primarily through its 50% ownership in ProGold LLC. The planned sale of its ProGold interest to Cargill, a major player in agricultural commodities, and subsequent liquidation, indicates a strategic shift away from direct involvement in the corn wet-milling joint venture. This move could reflect a broader trend of consolidation or a decision by the cooperative to return capital to its members rather than continue operating in a complex joint venture structure.
Comparison to Industry Standards
- NA
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Bylaws Amendment | Fourth Amended and Restated Bylaws of Golden Growers Cooperative dated March 23, 2023. | 2023-03-23 | Updates the governing rules of the cooperative, likely reflecting operational or structural adjustments. |
| Pension Plan Termination | Approval of a resolution to terminate the defined benefit pension plan on March 31, 2023. | 2023-03-31 | Eliminates future pension liabilities and simplifies employee benefits structure. Excess funds were returned to the Cooperative. |
| Strategic Decision/Liquidation Plan | Board of Directors approved a resolution to submit a Plan of Liquidation and Dissolution to members at the 2025 Annual Member Meeting. | 2025-01 | Major strategic shift leading to the potential winding down of the Cooperative and distribution of assets to members. |
Related Party Transactions
- Investment in ProGold LLC (50% ownership) and associated net income and distributions.
- Corn procurement services agreement with Cargill, Incorporated, including an annual fee of $60,000. Cargill also operates the ProGold Facility under a lease.
- Planned sale of 50% interest in ProGold LLC to Cargill for $81 million.
Stakeholder Impact
- Shareholders/Members: Potential for significant capital distribution ($81 million from ProGold sale plus other assets) upon liquidation, subject to member approval. A $0.23 per unit distribution was declared in January 2025.
- Employees: The defined benefit pension plan was terminated, and 401(k) contributions continue. Future employment implications are unclear given the proposed liquidation.
- Cargill: Will acquire full ownership of ProGold LLC, consolidating its position in the corn wet-milling facility. Continues to have a services agreement with the Cooperative until 2026.
Next Steps
- Submission of the Plan of Liquidation and Dissolution to members for approval at the 2025 Annual Member Meeting.
- Negotiation, execution, and filing of all agreements, documents, or instruments necessary to effect the liquidation and dissolution, if approved by members.
- Cargill's purchase of the Cooperative's 50% interest in ProGold for $81 million within 30 days following the expiration of the Facility Lease on December 31, 2026.
- Implementation of the Plan of Liquidation and Dissolution, if approved, including distribution of proceeds and assets to members.
Key Dates
| Date | Description |
|---|---|
| 1994-01-19 | Golden Growers Cooperative (GG-ND) initially organized as a North Dakota member-owned cooperative. |
| 1997 | The ProGold Facility was leased to Cargill Incorporated. |
| 2009-07-29 | GG-ND formed GG-MN, a wholly owned cooperative subsidiary in Minnesota. |
| 2009-09-01 | GG-ND merged into GG-MN, reincorporating into Minnesota and converting to a cooperative association under Minnesota Statutes 308B. Amended and Restated Bylaws dated. |
| 2012-12 | The Cooperative approved a change to freeze its defined benefit pension plan as of January 1, 2013. |
| 2013-01-01 | Defined benefit pension plan freeze became effective. |
| 2017-04-04 | Amendment to ProGold Limited Liability Company Member Control Agreement between Golden Growers Cooperative and American Crystal Sugar Company dated. |
| 2017-07-01 | Second Amended and Restated Grain Services Agreement and Corn Supply Agreement between Golden Growers Cooperative and Cargill, Incorporated dated. |
| 2022-03-01 | Cargill exercised its option to purchase a 50% interest in ProGold from American Crystal Sugar; the Cooperative purchased American Crystal's remaining 1% interest, resulting in 50% ownership. ProGold and Cargill extended the Facility Lease through December 31, 2026. |
| 2022-12 | The Cooperative approved a resolution to terminate the pension plan on March 31, 2023. |
| 2023-03-23 | Fourth Amended and Restated Bylaws of Golden Growers Cooperative dated. |
| 2023-03-31 | Pension plan termination effective date. |
| 2024-05 | Excess funds totaling $37,603 from the pension plan were returned to the Cooperative. |
| 2024-08 | An excise tax of $18,802 was paid to the U.S. Treasury for pension plan excess funds. |
| 2024-08-06 | The Cooperative was notified of the pension plan termination. |
| 2024-12 | The Cooperative and Cargill determined that a long-term joint venture for ProGold would not be possible, and Cargill will purchase the Cooperative's 50% interest for $81 million. |
| 2024-12-31 | Fiscal year end for the current report. |
| 2025-01 | The Cooperative declared a distribution of $3,562,810 ($0.23 per unit). The Board of Directors approved a resolution to submit a Plan of Liquidation and Dissolution to members at the 2025 Annual Member Meeting. |
| 2025-03-18 | The Original Form 10-K for FY 2024 was filed with the SEC. |
| 2025-09-17 | Date of filing of this 10-K/A and certifications. |
| 2026-10-16 | Termination date of the $2,000,000 line of credit. |
| 2026-12-31 | Expiration of the Facility Lease with Cargill, after which Cargill will purchase the Cooperative's 50% interest in ProGold. |
| 2025 | Annual Member Meeting where the Plan of Liquidation and Dissolution will be submitted for approval. |
Keywords
Golden Growers Cooperative, 10-K/A, SEC filing, financial results, ProGold LLC, Cargill, liquidation, dissolution, corn wet-milling, cooperative, annual report, financial statements, member equity, earnings per unit, asset sale, pension plan, corporate bonds, fixed income funds, North Dakota, Minnesota
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