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 September 30, 1995
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, 1995
------------------------------------- ---------------------------------
Class A Common Stock, $1.00 Par Value 5,022,682
PART 1. FINANCIAL INFORMATION
Cagle's, Inc. And Subsidary
Consolidated Balance Sheets
September 30, 1995 and October 1, 1994
(In Thousands, Except Par Value)
(Unaudited)
09/30/95 04/01/95
------------ -------------
Assets
- -----------------------------------------
CURRENT ASSETS
Cash $1,353 $462
Accounts receivable, net of allowance for
doubtful accounts of $387 and $141 at
Sept. 30, 1995 and April 1, 1995,
respectively 14,089 15,013
Inventories 22,539 25,282
Other current assets 3,592 1,538
------------ ------------
Total current assets 41,573 42,295
------------ ------------
INVESTMENTS IN AND RECEIVABLES FROM
UNCONSOLIDATED AFFILIATES 12,752 11,697
OTHER ASSETS 943 550
PROPERTY, PLANT, AND EQUIPMENT 69,266 66,897
Less accumulated depreciation (29,307) (32,668)
------------ ------------
Property, plant, and equipment, net 39,959 34,229
------------ ------------
TOTAL ASSETS $95,227 $88,771
============ ============
LIABILITIES & STOCKHOLDERS' EQUITY
- -----------------------------------------
CURRENT LIABILITIES
Current Maturities $ 1,568 $ 1,572
Accounts payable 11,349 13,550
Accrued expenses 7,677 7,900
Current income taxes payable 0 967
Current deferred income taxes (114) 714
------------ ------------
Total Current Liabilities 20,480 24,703
------------ ------------
LONG TERM DEBT (net of current maturities) 20,150 15,233
NONCURRENT DEFERRED INCOME TAXES 6,201 4,464
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock, $1 par value; authorized 9,000
shares and 5023 and 5034 shares issued
respectively 5,023 5,034
Capital in excess of par value 8,195 8,366
Retained earnings 35,178 30,971
------------ ------------
Total stockholders' equity 45,396 44,371
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $95,227 $88,771
============ ============
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
Cagle's, Inc., & Subsidiary
Consolidated Statements of Income
For the 26 weeks ended July 1, 1995 and July 2, 1994
(Amounts in thousands, except per share data)
(unaudited)
13 wks 13 wks 26 wks 26 wks
ended ended ended ended
09/30/95 10/01/94 09/30/95 10/01/94
-------- -------- -------- --------
Net Sales $77,243 $89,227 $166,664 $177,199
Costs and Expenses:
Cost of Sales 74,264 80,810 157,887 159,440
Selling and Delivery 2,426 2,088 5,025 4,188
General and Administrative 1,799 1,495 3,406 3,420
------- -------- -------- --------
Total costs and expenses 78,489 84,393 166,318 167,048
------- -------- -------- --------
Income From Operations (1,246) 4,834 346 10,151
Other Income(Expense):
Interest expense (442) (279) (735) (566)
Income from unconsolidated
affiliates and other
income, net 6,092 472 7,367 982
-------- -------- -------- --------
Income Before Income Taxes 4,404 5,027 6,978 10,567
Provision For Income Taxes 1,492 1,555 2,471 3,657
-------- -------- -------- --------
Net Income $2,912 $3,472 4,507 6,910
======== ======== ======== ========
Weighted Average Number Of
Common Shares Outstanding 5,023 5,204 5,028 5,204
======== ======== ======== ========
Net Income Per Common Share $.58 * $.67 $.90 * $1.33
======== ======== ======== ========
DIVIDENDS PER COMMON SHARE $.0300 $.0250 $.0600 $.0500
<FN>
*ADJUSTED FOR 2 FOR 1 STOCK SPLIT IN JANUARY 1995.
The accompanying notes are an inteegral part of these consolidated
financial statements.
Cagle's, Inc & Subsidary
Consolidated Statements of Cash Flows
For the 26 weeks ended September 30, 1995 and October 1, 1994
(In Thousands)
(unaudited)
Sept 1, 1995 Oct 2, 1994
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $4,508 $6,910
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,327 2,198
(gain)loss on disposal of property, plant and
equipment (4,587) (35)
Changes in investment in and receivables from
unconsolidated affiliates (1,055) 100
Increase/Non Current Defferred Taxes 1,737 0
Changes in assets and liabilities:
Accounts receivables, net 924 (590)
Inventories 2,743 (1,082)
Other current assets (2,054) 207
Accounts payable (2,201) 1,120
Accrued expenses (223) 914
Income taxes payable (967) 450
Deferred income taxes (828) 0
------- -------
Total Adjustments (4,184) 3,282
------- -------
Net cash provided by operating activities 324 10,192
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant, and equipment (9,925) (6,686)
(Increase)decrease in other assets (410) (2,495)
Proceeds from the sale of property, plant, and equip. 6,473 79
------- -------
Net cash used in investing activities (3,862) (9,102)
------- -------
Cash Flows from financing activities:
Payments of long-term debt and capital
lease obligations (1,087) (618)
Repurchase Common Stock (182) 0
Proceeds from issuance of long-term debt 6,000 5,000
Dividends Paid (302) (260)
------- -------
Net cash provided by (used in)financing activities 4,429 4,122
------- -------
NET INCREASE(DECREASE) IN CASH 891 5,212
CASH AT BEGINNING OF PERIOD 462 875
------- -------
CASH AT END OF PERIOD $1,353 $6,087
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $735 $605
======= =======
Income Taxes paid $2,509 $3,207
======= =======
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
Cagle's, Inc. and Subsidiary
Notes to Consolidated Condensed Financial Statements
September 30, 1995
(Unaudited)
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 September
30, 1995 and April 1, 1995 and the results of their operations and their cash
flows for the 13 weeks and 26 weeks respectively, ended September 30, 1995
and October 1, 1994.
2. The results of operations for the 13 weeks and 26 weeks ended September 30,
1995, and October 1, 1994 are not necessarily indicative of the results
expected for the full year.
3. Inventories consisted of the following (in thousands)
Sept. 30, 1995 April 1, 1995
-------------- -------------
Finished Products 5,218 7,813
Field Inventory and Breeders 12,471 13,742
Feed, Eggs, and Medication 3,177 2,243
Supplies 1,673 1,484
------------- -------------
22,539 25,282
4. The weighted average numbers of shares outstanding, cash dividends per
common share and the net income per common share have been restated to reflect
the 2 for 1 stock split to stockholders of record in January 1995.
5. On June 24, 1995 the Company's plant in Pine Mountain Valley, Georgia was
destroyed by fire. The Company is rebuilding on the site and expects to be
back in production in November of 1995. $7.4 has been advanced by insurance
carriers as a partial advance on the property loss and this amount has been
applied against the book value of the property lost in the fire and the
difference reported as a gain within other income in the accompanying statement
of income.
Business interruption and extra expense coverage is also in place to cover the
on going cost and lost earnings associated with the fire and the extra cost
incurred to mitigate the loss at September 30, 1995. The Company has accrued
for the $2.3 million reimbursement of profits lost and additional costs
incurred due to the fire that it is reasonably assured of collecting to this
point i.e. amounts agreed to by the insurance company. These proceeds have
been recognized in the accompanying statement of income as a reduction of
costs incurred due to the fire. These amounts will continue to be accrued until
final settlement of the claim. Subsequent to September 30, 1995 $2.65 Million
was received from the insurance carrier on the Business Interruption Claim.
Cagle's, Inc. and Subsidiary
Management's Discussion and Analysis of Financial
Condition and Results of Operations
September 30, 1995
Financial Condition:
The Company has maintained a strong financial position despite the
burden of rebuilding from the fire that destroyed the Pine Mountain Valley
plant in June of this year and the effect that it has had upon operations.
As of the end of September, the Company had received a total of $7.4 Million
in advances from insurance coverage on the property. These funds along with
borrowings from existing lines of credit are being used to rebuild the plant
and continue operations. The new plant when complete will cost in excess of
$20 Million and is expected to be in operation in November 1995. At September
30, 1995, the Company accrued for the receipt of $2.3 Million from its Business
Interruption Coverage. On October 17, 1995, $2.65 Million was received from
the insurance company as a partial payment of expected benefits. Both the
property and Business Interruption Claims are in the process of being filed and
will be reflected in the financial position as received. While the fire loss
has stressed earnings, the Company is confident that the combination of
insurance proceeds and existing lines of credit will be sufficient to bring
the new facility on line as planned.
Working capital has increased by $3.5 Million while earnings have declined
and long term debt has been increased to fund construction.
As of September 30, 1995, $14 Million was available under the Company'
revolving credit facility and no advances had been made from the $40 Million
facility in place for the new Kentucky project. The Company expects to
utilize a portion of the $40 Million facility to supplement the insurance
proceeds for construction of the Pine Mountain facility in as much as the
Kentucky Project is delayed indefinitely due to the fire.
Results of Operations
Sales for the 13 and 26 weeks declined by 13.4% and 5.9% respectively
as compared to the same periods of a year ago. This decline is primarily due
to the absence of sales from the Pine Mountain Valley plant. While the field
inventory that was committed to this plant was liquidated, in most instances
the birds were sold as live birds or in a form which represented lower value
than if it had been put into its normal market profile. Once the field
inventory had cleared in early August these sales were lost.
Gross margins declined by 5.6% and 4.75% respectively for the 13 and 26 week
periods as compared to the same period of a year ago. Again this is primarily
due to the impact of the fire. While $2.3M of business interruption proceeds
have been recognized as a reduction in cost of sales the company believes this
to be a conservative estimate of the proceeds to be received for lost profits
and costs caused by the fire to date. However the final settlement amount will
not be known for several months.
Also contributing to the reduced margin, was the fact that feed cost for the
13 and 26 weeks averaged 7.06% and .4% higher respectively as compared to the
same period of a year ago and markets were 3.6% higher for the 13 weeks as
compared to a year ago but averaged 3.2% lower for the 6 month period.
Selling, Delivery and General and Administration Expense
Selling, delivery and general and administration expenses for the 13
weeks and 6 month period were 17.9% and 10.8% higher as compared to year ago
levels with storage and brokerage expenses contributing to the increase along
with some increases in personnel and expenses.
Interest Expenses:
Interest expense increased by 58.4% and 29.9% respectively for the 13
weeks and 6 months as compare to year ago levels and is the result of increased
borrowing against the company lines of credit.
Income Taxes
The provision for income taxes for the 13 weeks and 6 month periods
as well reflects taxes computed at statutory rates adjusted for any credits
that may be available.
Part II Other Information
Item 9 Exhibits and Reports on Form 8-K
a. Not applicable
b. No reports on Form 8-K were filed during this quarter. A
report on Form 8-K was filed in April 1995 to disclose the
Company's new unsecured revolving credit facility.
Signature:
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: November 8, 1995 /s/ J. Douglas Cagle
Chairman and Chief Executive Officer
DATE: November 8, 1995 /s/ Kenneth R. Barkley
Senior Vice President
Finance/Treasurer/CFO