By DAVID STEELE-FAITH and PAUL MARTINAssociated PressTougas Farms is on a tear.
It has more than 10,000 employees and has more cash on hand than the average dairy farm in the U.S. It’s in its fourth year of growing, but that hasn’t deterred the company’s management.
Toughes has cut $6.3 million from its workforce, closing its doors to new employees and consolidating operations in the last year, managing director Paul Martin said.
Toughs, which employs more than 1,000 people, had a $20 million cash flow surplus in 2017 and the company has a balance sheet of about $15 million.
But Martin said its cash flow hasn’t been sufficient to pay off its debt.
Touches debt is the biggest concern.
It owns several brands, including Dairy Queen and Papa John’s, and is also owned by a family trust, which holds the assets.
Troubles has a history of operating in troubled economic times, including the recession of 2008 and the Great Recession of 2009.
Toughes’ biggest financial blow came in 2016 when it reported a $7.4 million loss on its operations in North Carolina.
Martin said the losses were the result of changes to the company management.
Martin said the company would have needed $20.9 million in additional cash to pay down its debt and would have had to raise about $3 million more than it planned.
Tours of the farm, which is owned by the Touches family trust and employs about 1,100 people, have been successful in keeping the farm open, but he said the family trust had to make some tough decisions about its future.
Tour sales at the farm have increased each year, but Martin said they are still below what they were in 2016.
He said the number of tours has declined because of tighter controls on visitors.
Martin added that the Touces family trust also recently bought a land in the eastern part of the state that would allow the company to operate its farms in the western part of that state.