SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(x) Quarterly Report Pursuant to Section 13 or 15(d) of the Security Exchange
Act of 1934 For the Quarterly period ended July 1, 2000
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Transition period from ______ to _______
Commission File Number 1-7138
CAGLE'S, INC.
GEORGIA 58-0625713
(State or other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
2000 Hills Avenue, N. W. Atlanta, Georgia 30318
(Address of Principal Executive Offices and Zip Code)
(404) 355-2820
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes __x__ No ______
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date
Class Outstanding July 1, 2000
- -------------------------------------- -----------------------------
Class A Common Stock, $1.00 Par Value 4,747,280
PART 1. FINANCIAL INFORMATION
Cagle's, Inc. And Subsidiary Consolidated Balance Sheets
July 1, 2000 and April 1, 2000
(In Thousands, Except Par Value)
(Period 7/01/00 Unaudited)
07/01/00 04/01/00
------------ -------------
Assets -----------------------------------------
CURRENT ASSETS
Cash $ 1,105 $ 9,526
Accounts receivable, net of allowance for
doubtful accounts of $983 and $905 at
July 1, 2000 and April 1, 2000,
respectively 15,799 15,261
Inventories 32,599 31,112
Notes receivable 1,400 1,400
Other current assets 2,857 2,965
------------ ------------
Total current assets 53,760 60,264
------------ ------------
INVESTMENTS IN AND RECEIVABLES FROM
UNCONSOLIDATED AFFILIATES 35,961 34,634
OTHER ASSETS 1,049 1,069
PROPERTY, PLANT, AND EQUIPMENT 172,715 153,644
Less accumulated depreciation (59,091) (57,141)
------------ ------------
Property, plant, and equipment, net 113,624 96,503
------------ ------------
TOTAL ASSETS $ 204,394 $ 192,470
============ ============
LIABILITIES & STOCKHOLDERS' EQUITY---------------
CURRENT LIABILITIES
Current maturities of long term debt $ 8,506 $ 6,384
Accounts payable 10,127 10,753
Accrued expenses 13,320 14,297
------------ ------------
Total current liabilities 31,953 31,434
------------ ------------
LONG TERM DEBT (net of current maturities) 79,445 66,570
NONCURRENT DEFERRED INCOME TAXES 11,649 12,787
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock, $1 par value; authorized 9,000
shares, 4748 shares issued at
July 1, 2000 and April 1, 2000, respectively 4,748 4,748
Capital in excess of par value 4,198 4,198
Treasury stock held for options (106) (106)
Retained earnings 72,507 72,839
------------ ------------
Total stockholders' equity 81,347 81,679
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 204,394 $ 192,470
============ ============
The accompanying notes are an integral part of these consolidated financial
statements.
Cagle's, Inc., & Subsidiary
Consolidated Statements of Income
For the 13 weeks ended July 1, 2000
and the 13 weeks ended July 3, 1999
(Amounts in thousands, except per share data)
(Period 07/01/00 Unaudited)
13 wks 13 wks
ended ended
07/01/00 07/03/99
-------- --------
Net Sales $ 69,184 86,358
Costs and Expenses:
Cost of Sales 67,294 76,339
Selling and Delivery 2,413 2,444
General and Administrative 2,080 2,560
------- --------
Total costs and expenses 71,787 81,343
------- --------
(Loss)/Income From Operations (2,603) 5,015
Other (Expense) Income:
Interest expense (567) (627)
Income from unconsolidated affiliates
and other income, net 2,875 1,065
-------- --------
(Loss) Income Before Income Taxes ( 295) 5,453
Benefit (Provision) For Income Taxes 106 (2,062)
-------- --------
Net (Loss)/Income $ ( 189) $ 3,391
======== ========
Weighted Average Shares Outstanding
-Basic 4,742 4,765
-Diluted 4,742 4,770
======== ========
Net (Loss) Income Per Common Share
-Basic $ (.04) $ .71
-Diluted $ (.04) $ .71
Dividends Per Common Share $ .03 $ .03
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
Cagle's, Inc & Subsidiary
Consolidated Statements of Cash Flows
For the 13 weeks ended July 1, 2000
and July 3, 1999
(In Thousands) (unaudited)
July 01, 2000 July 03, 1999
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) Income $ ( 189) $ 3,391
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,970 2,016
loss on disposal of property, plant and equipment
Changes in investment in and receivables from
unconsolidated affiliates (1,327) ( 813)
Changes in assets and liabilities:
Accounts receivables, net ( 538) 2,923
Notes Receivable 0 (2)
Inventories (1,487) (1,323)
Other current assets 108 (550)
Accounts payable (626) 1,698
Accrued expenses (977) 359
Income taxes payable 0 1,007
Deferred income taxes payable (1,138) 0
------------- -------------
Total Adjustments (4,015) 5,315
------------- -------------
Net cash (used in) or provided by
operating activities ( 4,204) 8,706
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant, and equipment (19,071) ( 4,001)
------------- -------------
Net cash used in investing activities (19,071) ( 4,001)
------------- -------------
Cash Flows from financing activities:
Payments of long-term debt and capital
lease obligations (1) (4,197)
Proceeds from issuance of long-term debt 15,000 0
Dividends Paid (145) (143)
Repurchase of Common Stock 0 (416)
Proceeds from exercise of Stock Options 0 23
------------- -------------
Net cash provided by (used in) financing activities 14,854 (4,733)
------------- -------------
NET DECREASE IN CASH (8,421) (28)
CASH AT BEGINNING OF PERIOD 9,526 97
------------- -------------
CASH AT END OF PERIOD $ 1,105 $ 69
============= =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest(including capitalized interest
of $940,000) $ 1,223 $ 512
============= =============
Income Taxes $ 112 $ 559
============= =============
The accompanying notes are an integral part of these consolidated financial
statements.
Cagle's, Inc. & Subsidiary
Notes to Consolidated Condensed Financial Statements
July 1, 2000
1. In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments which are of a normal and
recurring nature necessary to present fairly the consolidated financial
position of Cagle's, Inc. and Subsidiary (the "Company") as of July 1,
2000 and April 1,2000 and the results of their operations and their cash
flows for the 13 weeks ended July 1, 2000 and the 13 weeks ended July 3,
1999.
2. The results of operations for the 13 weeks ended July 1, 2000 and July 3,
1999 are not necessarily indicative of the results expected for the full
year.
3. Inventories consisted of the following: (In Thousands)
July 1, 2000 April 1 1999
Finished Product $15,060 $13,174
Field Inventory and Breeders 13,822 13,683
Feed, Eggs, and Medication 2,490 2,914
Supplies 1,227 1,341
---------------- --------------
$32,599 $31,112
4. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities,
the disclosures of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results may vary from those
estimates.
5. Investments in and Receivables from Unconsolidated Affiliates.
The Company accounts for its investments in 5 unconsolidated affiliates
using the equity method. The Company's share of earnings from these
affiliates totaled $2,784,000 for the 13 weeks ended July 1, 2000. The
earnings reported for these same affiliates totaled $1,012,000 for the 13
weeks ended July 3, 1999.
Management's Discussion and Analysis of Financial
Condition and Results of Operation
July 1, 2000
Financial Condition
Depressed market prices for poultry products pulled the Company into a loss
position for the quarter ended July 01,2000. the loss, joined with continued
capital spending required additional borrowing from bank lines of credit. As
of July 01,2000 the Company had borrowed $15,000,000 against its $40,000,000
Revolving line of credit in addition to full funding of a $72,750,000 term
loan.
The processing facility at Perry, Ga. and Feed Mill in Rockmart, Ga. are
expected to become operational in early fall, having unforeseen requirements
that have arisen with the Perry facility will require additional funding which
is currently being negotiated and is expected to be available as needed.
Results of Operations
Sales for the 13 week period ended July 01, 2000 was 19.9% lower than for the
comparable period a year ago. The decision is attributable to reduced selling
price as quoted market prices for boneless skinless breast meat average $.31
per lb. (18.7%) lower than for the same period a year ago. Ga. Dock quotation
for whole birds was $1.39 per lb. Lower or (2.34%) and 2.22% less tonnage
produced within the Company due to reduced average bird size to meet marketing
requirements. Additionally less product was purchased from outside sources for
resale in further processed form. The impact of these lower market prices was
to lower gross margins by 8.84% as compared to a year ago since grain prices
remained favorable at very near year ago levels.
Selling, Delivery and Administrative Expenses
These expenses for the 13 weeks ended July 01, 2000 were 10.2% lower than for
the 13 weeks ended July 03, 1999 with the decrease spread over several
classifications including expenses associated with the Company's risk
management program, reduced provision for bonuses and lower cost associated
with outside services such as consultants.
Interest Expense
Interest expense for the quarter was 9.6% lower compared to the same period of
a year ago, while interest rates increased during the period a higher
percentage of the total interest outlay was capitalized as part of the two
major construction projects.
Other Income
Other income increased by 170% and is the result of an unconsolidated affiliate
which was in a loss situation during the period April 03, 1999 through July 03,
1999 reporting a profit during the period April 01, 2000 through July 01, 2000.
Income Taxes
The provision for income taxes reflects the taxes due at statutory rates
adjusted for available tax credit to which the company is entitled. Due to
the reported loss for the reporting period a tax benefit is reflected to adjust
previous period accruals.
Part II Other Information
Item 9 Exhibits and Reports on Form 8-K
a. Not applicable
b. A report or Form 8-K was filed during the quarter.
Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 7, 2000 /s/ J. Douglas Cagle
Chairman and C.E.O.
Date: August 7, 2000 /s/ Kenneth R. Barkley
Sr. VP Finance/Treas/CFO