SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(x) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarterly period ended December 31, 1994
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 31, 1994
- - - ------------------------------- ------------------------
Class A Common Stock, $1.00 Par Value 2,535,191 Shares
<PAGE>
<TABLE>
PART 1. FINANCIAL INFORMATION
Cagle's, Inc. And Subsidary
Consolidated Balance Sheets
December 31, 1994 and April 2, 1994
(In Thousands, Except Par Value)
(Unaudited)
<CAPTION>
Dec. 31,1994 April 2, 1994
------------ -------------
<S> <C> <C>
Assets
- - - -----------------------------------------
CURRENT ASSETS
Cash $2,270 $875
Accounts receivable, net of allowance for
doubtful accounts of $730 and $729 at
December 31, 1994 and April 2, 1994,
respectively 12,203 13,392
Inventories 24,920 22,779
Other current assets 706 1,146
------------ ------------
Total current assets 40,099 38,192
------------ ------------
INVESTMENTS IN AND RECEIVABLES FROM
UNCONSOLIDATED AFFILIATES 10,508 7,286
OTHER ASSETS 945 341
PROPERTY, PLANT, AND EQUIPMENT 62,525 52,598
Less accumulated depreciation (31,958) (29,197)
------------ ------------
Property, plant, and equipment, net 30,567 23,401
------------ ------------
TOTAL ASSETS $82,119 $69,220
============ ============
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES & STOCKHOLDERS' EQUITY
- - - -----------------------------------------
<S> <C> <C>
CURRENT LIABILITIES
Current maturities of long-term debt and
capital lease obligations $1,572 $1,239
Accounts payable 9,871 9,572
Accrued expenses 6,678 6,455
Current income taxes payable 1,625 848
Current deferred income taxes 0 337
------------ ------------
Total Current Liabilities 19,746 18,451
------------ ------------
LONG TERM DEBT and Capital Lease obligations,
net of current maturities 15,560 11,819
------------ ------------
NONCURRENT DEFERRED INCOME TAXES 4,682 4,682
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock, $1 par value; authorized 9,000
shares; 5,070 and 5204 shares issued at Dec.
31, 1994 and April 2, 1994, respectively 5,070 5,204
Additional paid-in-capital 9,193 11,317
Retained earnings 27,868 17,747
------------ ------------
Total stockholders' equity 42,131 34,268
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $82,119 $69,220
============ ============
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
Cagle's, Inc., & Subsidiary
Consolidated Statements of Income
For the 13 weeks and 39 weeks ended December 31, 1994 and January 1, 1994
(Amounts in thousands, except per share data)
(unaudited)
<CAPTION>
13 wks ended 13 wks ended 39 wks ended 39 wks ended
Dec. 31, 1994 Jan. 1, 1994 Dec 31, 1994 Jan. 1, 1994
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Sales $83,640 $73,334 $260,839 $230,989
Costs and Expenses:
Cost of Sales 74,997 66,891 234,437 211,137
Selling and Delivery 2,232 1,726 6,420 5,227
General and Administrative 1,453 1,644 4,873 4,973
------- -------- ------- -------
Total costs and expenses 78,682 70,261 245,730 221,337
-------- -------- ------- -------
Income From Operations 4,958 3,073 15,109 9,652
Other Income(Expense):
Interest expense (261) (337) (827) (1,047)
Income from unconsolidated
affiliates and other
income, net 521 471 1,503 1,042
-------- -------- ------- -------
Income Before Income Taxes 5,218 3,207 15,785 9,647
Provision For Income Taxes 1,617 1,154 5,274 3,352
-------- -------- ------- -------
Net Income $3,601 $2,053 $10,511 $6,295
======== ======== ======= =======
Weighted Average Number Of
Common Shares Outstanding* 5,159 5,202 5,182 5,224
======== ======== ======= =======
Net Income Per Common Share $.70 $.39 $2.03 $1.21
======== ======== ======= =======
DIVIDENDS PER COMMON SHARE $.025 $.025 $.075 $.075
<FN>
The accompanying notes are an inteegral part of these consolidated
financial statements.
* Weighted average shares and per share amounts adjusted for 2 for 1 stock
split in January, 1995.
</TABLE>
<PAGE>
<TABLE>
Cagle's, Inc & Subsidary
Consolidated Statements of Cash Flows
For the 39 weeks ended December 31, 1994 and January 1, 1994
(In Thousands)
(unaudited)
<CAPTION>
Dec. 31, 1994 Jan. 1, 1994
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $10,511 $6,295
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 3,362 3,780
(gain)loss on disposal of property, plant and
equipment (38) 157
Income from unconsolidated affiliates (222) (449)
Changes in assets and liabilities:
Accounts receivables, net 1,189 (1,357)
Inventories (2,141) (1,055)
Other current assets 440 974
Accounts payable 299 (629)
Accrued expenses 223 644
Income taxes payable 440 257
------- -------
Total Adjustments 3,552 2,322
------- -------
Net cash provided by operating activities 14,063 8,617 ------- -------
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant, and equipment (10,545) (3,211)
(Increase)decrease in other assets (604) 18
Proceeds from the sale of property, plant, and equip. 80 55
Investments in unconsolidated affiliates (3,023) 0
------- -------
Net cash used in investing activities (14,092) (3,138)
------- -------
Cash Flows from financing activities:
Payments of long-term debt and capital
lease obligations (926) (5,428)
Repurchase of common stock (2,260) (664)
Proceeds from issuance of long-term debt 5,000 0
Dividends Paid (390) (315)
------- -------
Net cash provided by (used in)financing activities 1,424 (6,407)
------- -------
NET INCREASE(DECREASE) IN CASH 1,395 (928)
CASH AT BEGINNING OF PERIOD 875 1,728
------- -------
CASH AT END OF PERIOD $2,270 $800
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid, net of capitalized interest of $92
in 1994 $831 $1,047
======= =======
Income Taxes paid $4,721 $3,095
======= =======
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
Cagle's, Inc. and Subsidiary
Notes to Consolidated Financial Statements
December 31, 1994
(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 Dec. 31, 1994
and April 2, 1994 and the results of their operations and their cash flows for
the 13 weeks and 39 weeks ended Dec. 31, 1994 and Jan. 1, 1994.
2. The results of operations for the 13 weeks and 39 weeks ended December
31, 1994 and January 1, 1994 are not necessarily indicative of the results
expected for the full year.
3. Inventories consisted of the following (in thousands):
Dec. 31, 1994 April 2, 1994
------------ -------------
Finished products $ 6,729 $ 5,301
Field inventory and breeders 14,686 14,049
Feed, eggs and medication 2,008 2,223
Supplies 1,497 1,206
------ ------
$ 24,920 $ 22,779
4. The weighted average number of common shares outstanding, the net income
per common share and the number of shares issued have been restated for the 2
for 1 stock split issued to stockholders of record on January 3, 1995.
5. On June 8, 1994, the Company issued a $5 Million industrial revenue bond
to finance the construction of a feed mill in Forsyth, Georgia. The unused
portion of the proceeds from the issuance of the bond totaling $469,000 at
December 31, 1994 are included in other assets in the accompanying balance
sheet.
6. During October 1994 the Company acquired a minority interest in a by-
products company. This investment is included in investments in and receivables
from unconsolidated affiliates on the balance sheet as of December 31, 1994.
<PAGE>
CAGLE'S, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
DECEMBER 31, 1994
Financial Condition
The best quarter thus far from a profit standpoint continued to strenghten the
Company's financial condition while funding investments in property, plant and
equipment as well as a minority investment in a by-products rendering company.
A portion of the additions to property, plant and equipment (Forsyth, Georgia,
Feed Mill) is being funded by tax-free industrial revenue bonds.
The Company has a $12 million line of credit available for use, of which
there are no borrowings outstanding as of December 31, 1994. The Company
expects to close on a $20 Million line of credit during the fourth quarter
to replace the existing $12 Million line of credit.
The Company will require significant financing to construct facilities for the
previously announced expansion in Kentucky. The company is confident that
sufficient financing is available to carry out the project as planned.
Results of Operations
Sales increased by 14% and 13% for the 13 weeks and 39 weeks ended December
31, 1994 respectively, compared to the same periods of a year ago. The
increase is credited to additional processed pounds through the slaughter
plants of 16% for the quarter and 6% for the nine months. This was
complemented by increased outside purchases to be used by the Atlanta, Georgia
further processing plant for various value added products. Market prices for
the 9 months were essentially the same for both years, however the trend has
been lower as the year progresses as compared to last year. The market prices
for the quarter ended December 31, 1994 averaged 4.5% lower than for the same
quarter of a year ago.
Cost of sales increased by 12% and 11% for the 13 weeks and 39 weeks ended
December 31, 1994, respectively, as compared to the same period of a year ago.
This is mainly due to the increased production pounds and the volume of outside
purchases which in most cases consists of higher unit priced items mainly
deboned breast meat. This cost was helped considerably by feed cost which
averaged 14% lower for the quarter and 4% lower for the 39 weeks ended
December 31, 1994 respectively as compared to the same periods of the previous
year. Gross margins for the quarter and 39 weeks were 1.5% higher than for
the same periods of the previous year.
Selling, Delivery, and General and Administrative Expenses
Selling, delivery, and general and administrative expenses increased by 9.3%
and 10.7% for the 13 weeks and 39 weeks ended December 31, 1994, respectively,
as compared to the same periods of a year ago and is attributable to additional
sales volume and the associated broker commissions required to achieve the
improved results. Storage expense also increased as inventories are increased
to support additional demand for product.
Interest Expense
Interest expense was 22.6% and 21% lower for the 13 weeks and 39 weeks ended
December 31, 1994, respectively, than for the same periods in the previous year
and is the result of reduced borrowing levels. Interest incurred on the $5
Million bond issue is being capitalized during construction.
<PAGE>
Income Taxes
The provision for income taxes for the 13 weeks and 39 weeks ended December 31,
1994 is computed at statutory rates and is adjusted for the impact of various
credits available to be applied to reduce current year taxes.
<PAGE>
Part II. Other Information
a. Exhibits
Exhibit 27. Finiancial Data Schedule
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 requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned there unto duly authorized.
Cagle's, Inc.
Date: January 24, 1994 /S/ J.Douglas Cagle
J.Douglas Cagle
Chairman and Chief Executive Officer
Date: January 24, 1994 /S/ Kenneth R. Barkley
Kenneth R. Barkley
Senior Vice President Finance/
Treasurer/Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000016104
<NAME> CAGLE'S, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-01-1994
<PERIOD-START> APR-03-1994
<PERIOD-END> DEC-31-1994
<CASH> 2270
<SECURITIES> 0
<RECEIVABLES> 12933
<ALLOWANCES> 730
<INVENTORY> 24920
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<BONDS> 15560
<COMMON> 5070
0
0
<OTHER-SE> 37061
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<INCOME-PRETAX> 15785
<INCOME-TAX> 5274
<INCOME-CONTINUING> 10511
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<CHANGES> 0
<NET-INCOME> 10511
<EPS-PRIMARY> 2.03
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</TABLE>
