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 December 28, 1996
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 December 28, 1996
- -------------------------------------- -----------------------------
Class A Common Stock, $1.00 Par Value 5,006,282
PART 1. FINANCIAL INFORMATION
Cagle's, Inc. And Subsidiary
Consolidated Balance Sheets
December 28, 1996 and March 30, 1996
(In Thousands, Except Par Value)
(Unaudited)
12/28/96 03/30/96
------------ -------------
Assets
- -----------------------------------------
CURRENT ASSETS
Cash $ 884 $ 326
Accounts receivable, net of allowance for
doubtful accounts of $557 and $315 at
Dec. 28, 1996 and March 30, 1996,
respectively 16,398 18,631
Inventories 36,633 32,908
Insurance Proceeds Receivable 4,483 9,183
Other current assets 791 2,481
------------ ------------
Total current assets 59,189 63,529
------------ ------------
INVESTMENTS IN AND RECEIVABLES FROM
UNCONSOLIDATED AFFILIATES 17,947 14,675
OTHER ASSETS 948 1,038
PROPERTY, PLANT, AND EQUIPMENT 97,276 94,538
Less accumulated depreciation (35,764) (31,093)
------------ ------------
Property, plant, and equipment, net 61,512 63,445
------------ ------------
TOTAL ASSETS $139,596 $142,687
============ ============
LIABILITIES & STOCKHOLDERS' EQUITY
- -----------------------------------------
CURRENT LIABILITIES
Current Maturities $ 2,625 $ 1,570
Accounts payable 12,746 13,489
Accrued expenses 6,847 7,776
Current income taxes payable 0 184
Current deferred income taxes 0 0
------------ ------------
Total Current Liabilities 22,218 23,019
------------ ------------
LONG TERM DEBT (net of current maturities) 57,810 58,508
NONCURRENT DEFERRED INCOME TAXES 8,652 9,139
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock, $1 par value; authorized 9,000
shares and 5006 and 5006 shares issued
respectively 5,006 5,006
Capital in excess of par value 7,946 7,946
Retained earnings 37,964 39,069
------------ ------------
Total stockholders' equity 50,916 52,021
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 139,596 $ 142,687
============ ============
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
Cagle's, Inc., & Subsidiary
Consolidated Statements of Income
For the 13 and 39 weeks ended Dec. 28, 1996 and Dec. 30, 1995
(Amounts in thousands, except per share data)
(unaudited)
13 wks 13 wks 26 wks 26 wks
ended ended ended ended
12/28/96 12/30/95 12/28/96 12/30/95
-------- -------- -------- --------
Net Sales $85,506 $64,439 $261,341 $231,103
Costs and Expenses:
Cost of Sales 80,169 61,295 252,095 219,182
Selling and Delivery 2,873 2,100 8,110 7,125
General and Administrative 1,575 1,404 4,911 4,810
------- -------- -------- --------
Total costs and expenses 84,617 64,799 265,116 231,117
------- -------- -------- --------
Income From Operations 889 (360) (3,775) (14)
Other Income(Expense):
Interest expense (1,157) (714) (3,637) (1,449)
Income from unconsolidated
affiliates and other
income, net 2,761 5,020 6,358 12,387
-------- -------- -------- --------
Income (Loss) Before Income Taxes 2,493 3,946 (1,054) 10,924
(Provision) Benefit For Income Taxes (948) (1,517) 400 (3,988)
-------- -------- -------- --------
Net Income $1,545 $2,429 (654) 6,936
======== ======== ======== ========
Weighted Average Number Of
Common Shares Outstanding 5,006 5,009 5,006 5,021
======== ======== ======== ========
Net (Loss) Income Per Common Share $ 0.31 $ 0.48 $ (0.13) $ 1.38
Dividends Per Common Share .03 .03 .09 .09
======== ======== ======== ========
<FN>
The accompanying notes are an integral part of these consolidated
financial statements.
Cagle's, Inc & Subsidiary
Consolidated Statements of Cash Flows
For the 39 weeks ended December 28, 1996 and December 30, 1995
(In Thousands)
(unaudited)
Dec 28, 1996 Dec 30, 1995
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ (654) $ 6,936
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 5,559 4,083
(gain)loss on disposal of property, plant and
equipment 10 (8,379)
Changes in investment in and receivables from
unconsolidated affiliates (3,272) (2,311)
Deferred Income Taxes (487) 3,081
Changes in assets and liabilities:
Accounts receivables, net 2,233 1,115
Inventories (3,725) (3,260)
Insurance Proceeds Receivable 3,200 (9,655)
Other current assets 1,690 960
Accounts payable (743) (1,204)
Accrued expenses (929) (923)
Income taxes payable (184) (967)
Deferred income taxes 0 (914)
------- -------
Total Adjustments 3,352 (18,374)
------- -------
Net cash provided by operating activities 2,698 (11,438)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant, and equipment (2,250) (31,437)
(Increase)decrease in other assets 90 (420)
Proceeds from the sale of property, plant, and equip. 114 10,137
------- -------
Net cash used in investing activities (2,046) (21,720)
------- -------
Cash Flows from financing activities:
Payments of long-term debt and capital
lease obligations (5,643) (1,404)
Repurchase Common Stock 0 (448)
Proceeds from issuance of long-term debt 6,000 35,000
Dividends Paid (451) (452)
------- -------
Net cash provided by (used in)financing activities (94) 32,696
------- -------
NET INCREASE(DECREASE) IN CASH 558 (462)
CASH AT BEGINNING OF PERIOD 326 462
------- -------
CASH AT END OF PERIOD $ 884 $ 0
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $3,637 $1,449
======= =======
Income Taxes paid $ 0 $2,769
======= =======
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
Cagle's, Inc. & Subsidiary
Notes to Consolidated Condensed Financial Statements
December 28, 1996
1. In the opinion of Management, the accompanying unaudited consolidated
financial statements contain all adjustments which are of normal and
recurring nature, necessary to present fairly the consolidated financial
position of Cagle's, Inc. and Subsidiary(the "Company") as of December
28, 1996 and March 30, 1996 and the results of their operations for the 13
weeks and 39 weeks ended December 28, 1996 and December 30, 1995 and
their cash flows for the 39 weeks ended December 28, 1996 and December
30, 1995.
2. The results of operations for the 13 weeks and 39 weeks ended December 28,
1996 and December 30, 1995 are not necessarily indicative of the results
expected for the full year.
3. Inventories consisted of the following: (In Thousands)
December 28, 1996 March 30, 1996
Finished Product $15,231 $ 10,640
Field Inventory and Breeders 16,724 17,630
Feed, Eggs, and Medication 2,920 3,000
Supplies 1,758 1,638
---------------- --------------
$36,633 $32,908
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 three unconsolidated
affiliates using the equity method. The Company's share of earnings and
management fees from these affiliates was $1,913,000 and $1,397,000 and
$5,460,000 and $3,807,000 respectively for the 13 weeks and 39 weeks
ended December 28, 1996 and December 30, 1995.
6. Insurance Proceeds Receivable
As of December 28, 1996, the Company has accrued $4,483,000 for the
receipt of insurance proceeds related to the fire at the Company's Pine
Mountain Plant on June 24, 1995. The Company received $3,200,000 as an
advance on the claim during the 9 months ended December 28, 1996. The
adjusting of the total claim is continuing.
Management's Discussion and Analysis of Financial
Condition and Results of Operation
December 28, 1996
Financial Condition
The Company's Financial condition improved during the quarter as a result of a
return to profitable operations which allowed some reduction in debt.
Moderation in the price of feed grains reduced demands for cash and borrowing
levels in total. As of December 28, 1996, $26 Million was advanced on the $35
Million revolver, however, $4 million of this advance was utilized to retire
the Industrial Revenue Bonds that had financed construction of a feed mill.
Results of Operations
Sales for the 13 weeks and 39 weeks ended December 28, 1996 increased 32.7%
and 13.1% respectively as compared to the same periods of a year ago. This
increase is due mainly to the return of the Pine Mountain Valley facility to
production. It was out of production from June 24, 1995 to late November 1995
and was not at full pre-fire production until mid fourth quarter of a year ago.
In addition, the Georgia Dock reported market price for the 13 weeks and 39
weeks averaged 11.3% and 12.6% higher, respectively, than year ago prices
during the same periods.
Gross margins improved for the quarter ended December 28, 1996 by 1.3% as
compared to year ago levels, but for the 39 weeks, margins were 1.7% lower.
The current quarter reflected the moderation of grain prices and higher market
prices for poultry, especially in the export sector. The lower margins for the
39 week period ended December 28, 1996 as compared to year ago levels reflect
the full effect of record high grain prices during the summer and early fall.
Selling, Delivery and Administrative Expenses
Selling, delivery and administrative expenses increased by 26.9% and 9.1%
respectively for the 13 weeks and 39 weeks ended December 28, 1996 and
December 30, 1995. This increase is the result of increased storage cost
required for higher frozen product production in support of domestic and
export sales.
Interest Expense
Interest expense was 62.0% and 151.0% higher respectively for the 13 weeks and
39 weeks ended December 28, 1996 and December 30, 1995 and is the direct
result of higher borrowing levels necessitated by the building of the new plant
at Pine Mountain Valley, Georgia and to support higher working capital needs
brought about by high grain costs and increased inventory levels dictated by
our marketing mix.
Other Income
Other income for the 13 week and 39 week periods was 45.0% and 48.7% lower,
respectively, than the same year ago periods due to the inclusion of gains from
insured recoveries in the year ago amounts.
Other income for the quarter and 39 weeks ended December 28, 1996 included
$770,000 which resulted from the settlement of a condemnation suit which had
been pending for several years.
Income Taxes
The benefit provision for income taxes for the 39 weeks ended December 28, 1996
reflects a credit at statutory rates for the loss currently reported.
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 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: February 7, 1997 /s/ J. Douglas Cagle
Date: February 7, 1997 /s/ Kenneth R. Barkley