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 June 29, 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 June 29, 1996
------------------------------------- -----------------------------
Class A Common Stock, $1.00 Par Value 5,006,282
<PAGE>
<TABLE>
PART 1. FINANCIAL INFORMATION
Cagle's, Inc. And Subsidiary
Consolidated Balance Sheets
June 29, 1996 and March 30, 1996
(In Thousands, Except Par Value)
(Unaudited)
<CAPTION>
06/29/96 03/30/96
------------ -------------
<S> <C> <C>
Assets
- -----------------------------------------
CURRENT ASSETS
Cash $ 284 $ 326
Accounts receivable, net of allowance for
doubtful accounts of $407 and $315 at
June 29, 1996 and March 30, 1996, respectively 15,520 18,631
Inventories 37,317 32,908
Insurance proceeds receivable 9,183 9,183
Other current assets 3,173 2,481
------------ ------------
Total Current Assets 65,477 63,529
------------ ------------
INVESTMENTS IN AND RECEIVABLES FROM
UNCONSOLIDATED AFFILIATES 15,922 14,675
OTHER ASSETS 1,076 1,038
PROPERTY, PLANT, AND EQUIPMENT 94,258 94,538
Less accumulated depreciation (32,690) (31,093)
------------ ------------
Property, plant, and equipment, net 61,568 63,445
------------ ------------
TOTAL ASSETS $144,043 $142,687
============ ============
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES & STOCKHOLDERS' EQUITY
- -----------------------------------------
<S> <C> <C>
CURRENT LIABILITIES
Current Maturities of Long Term Debt $ 1,570 $ 1,570
Accounts payable 15,277 13,489
Accrued expenses 7,348 7,776
Current income taxes payable 0 184
------------ ------------
Total Current Liabilities 24,195 23,019
------------ ------------
LONG TERM DEBT (net of current maturities) 60,398 58,508
NONCURRENT DEFERRED INCOME TAXES 9,139 9,139
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock, $1 par value; authorized 9,000
shares and 5006 and 5006 shares issued
and outstanding respectively 5,006 5,006
Capital in excess of par value 7,946 7,946
Retained earnings 37,359 39,069
------------ ------------
Total Stockholders' Equity 50,311 52,021
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $144,043 $142,687
============ ============
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
Cagle's, Inc., & Subsidiary
Consolidated Statements of Operations
For the 13 weeks ended June 29, 1996 and July 1, 1995
(Amounts in thousands, except per share data)
(unaudited)
13 wks 13 wks
ended ended
06/29/96 07/01/95
-------- --------
<S> <C> <C>
Net Sales $83,814 $89,421
Costs and Expenses:
Cost of Sales 83,070 83,623
Selling and Delivery 2,469 2,599
General and Administrative 1,551 1,607
------- --------
Total costs and expenses 87,090 87,829
------- --------
Income (Loss) From Operations (3,276) 1,592
Other Income (Expense):
Interest expense (996) (293)
Other Income, net 1,782 1,275
-------- --------
Income (Loss) Before Income Taxes (2,490) 2,574
Provision For Income Taxes 930 (978)
-------- --------
Net Income (Loss) $(1,560) $1,596
======== ========
Weighted Average Number Of
Common Shares Outstanding 5,006 5,034
======== ========
Net Income (Loss) Per Common Share $ (.31) $ .32
======== ========
DIVIDENDS PER COMMON SHARE $.0300 $.0300
<FN>
The accompanying notes are an integral part of these consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
Cagle's, Inc & Subsidiary
Consolidated Statements of Cash Flows
For the 13 weeks ended June 29, 1996 and July 1, 1995
(In Thousands)
(unaudited)
<CAPTION>
June 29,1996 July 1,1995
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (1,560) $ 1,596
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,992 1,100
(gain)loss on disposal of property, plant and
equipment 26 0
Changes in investment in and receivables from
unconsolidated affiliates (1,247) (265)
Changes in assets and liabilities:
Accounts receivable, net 3,111 1,432
Inventories (4,409) (1,546)
Other current assets (692) 259
Accounts payable 1,788 (2,081)
Accrued expenses (428) 46
Income taxes payable (184) 453
------- -------
Total Adjustments (43) (602)
------- -------
Net cash provided (Used) by operating activities (1,603) 994
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant, and equipment (225) (1,882)
(Increase)decrease in other assets (47) (305)
Proceeds from the sale of property, plant, and equip. 94 0
------- -------
Net cash used in investing activities (178) (2,187)
------- -------
Cash Flows from financing activities:
Payments of long-term debt and capital
lease obligations (610) (773)
Proceeds from issuance of long-term debt 2,500 3,000
Dividends Paid (151) (151)
------- -------
Net cash provided by (used in) financing activities 1,739 2,076
------- -------
NET INCREASE(DECREASE) IN CASH (42) 883
CASH AT BEGINNING OF PERIOD 326 462
------- -------
CASH AT END OF PERIOD $ 284 $1,345
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $1,204 $ 311
======= =======
Income Taxes paid $ 0 $ 505
======= =======
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
Cagle's, Inc. and Subsidiary
Notes to Consolidated Condensed Financial Statements
June 29, 1996
(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 June 29, 1996 and
March 30, 1996 and the results of their operations and their cash flows for the
13 weeks ended June 29, 1996 and July 1, 1995.
2. The results of operations for the 13 weeks ended June 29, 1996 and July 1,
1995 are not necessarily indicative of the results expected for the full year.
3. Inventories consisted of the following (in thousands):
June 29, 1996 March 30, 1996
Finished Product 13,168 10,640
Field Inventory and Brokers 19,225 17,630
Feed Eggs and Medication 3,233 3,000
Supplies 1,691 1,638
--------------- ----------------
37,317 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
disclosure 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 could differ from those estimates.
5. Investments in and Receivables from the 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 was $1,771,000 and $1,245,000 for the respective periods
ended June 29, 1996 and July 1, 1995.
6. Pine Mountain Valley Fire
On June 24, 1995, the Company's plant in Pine Mountain Valley, Georgia
was destroyed by fire. The Company has rebuilt the plant on site. As of June
29, 1996 has accrued an Insurance Claim Receivable of $9,183,000 which
represents amounts management expects to receive for Business Interruption
Costs and extra expense for expediting the rebuilding of the facilities. These
claims are in the adjusting process.
<PAGE>
Managements Discussion and Analysis of Financial
Condition and Results of Operations
June 29, 1996
Financial Condition:
The Company's total debt increased during the quarter as additional
borrowing was required to meet increased inventory levels. Record high grain
prices which increased cost of field inventories and higher than normal product
inventories due to higher value products and build up due to unpredictable
shipping schedules for export product contributed to this increase. Slower
than anticipated settlement of insurance claims resulting from the fire loss
of a year ago has also been a factor in the high debt level. Working capital
increased by $772,000 during the quarter and current ratio continues to be
strong at 2.71:1.0. The Company expects to close a new financing package
subsequent to the end of the quarter which will provide term financing for the
rebuilt plant in Pine Mountain Valley and a $35 Million revolving credit
facility.
Results of Operations:
Sales for the 13 weeks ended June 29, 1996 decreased by 6.27% as
compared to the same period of a year ago and is the results of reduced
purchases of outside product for further processing and resale, as internal
production was diverted for this purpose from the Macon, Georgia plant, and a
build up of inventory for shipments which were not made by the end of the
period.
Gross margins decreased from 6.5% for the same quarter last year to
.89% this year. The reduced margin is attributed to feed cost which averaged
42.58% higher than year ago levels and production in efficiencies in both live
production and in the processing plants which had adverse impact on margins.
The GA Dock quoted market price for broilers increased $.074 per lb. or 14.2%
and helped offset some of the high cost of those products which are priced
basis the GA Dock market. However, the Company's predominant market is for
deboned product and those prices have not risen as significantly.
Selling, Delivery and General and Administrative Expenses:
Selling, delivery and general and administrative expenses for the
quarter declined by 4.4% for the period ended June 29, 1996 as compared to the
same period of a year ago and results primarily from reduction in scale of some
of the local distribution operations and direct sales related expenses.
Interest Expense
Interest expense for the quarter ended June 29, 1996 increased
by 239.9% as compared to the same period of a year ago and results from the
significantly higher debt level that the Company currently carries.
Other Income
Other income increased by 39.8% when compared to the same period of a
year ago. Other income includes management fees and the Company's share of
earnings from its three unconsolidated affiliates of $1.771 Million and $1.245
Million respectively for the periods ended June 29, 1996 and July 1, 1995.
Income Taxes
The provision for income taxes reflects a credit at statutory rates for
the loss currently reported.
<PAGE>
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 Exchange Act of 1934,
the registrant has duly caused this report to be singed on its behalf by the
undersigned thereunto duly authorized.
Date /s/ J. Douglas Cagle
August 12, 1996 J. Douglas Cagle
Date /s/ Kenneth R. Barkley
August 12, 1996 Kenneth R. Barkley
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000016104
<NAME> CAGLE'S, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-29-1997
<PERIOD-START> MAR-31-1996
<PERIOD-END> JUn-29-1996
<CASH> 284
<SECURITIES> 0
<RECEIVABLES> 15927
<ALLOWANCES> 407
<INVENTORY> 37317
<CURRENT-ASSETS> 65477
<PP&E> 94258
<DEPRECIATION> 32690
<TOTAL-ASSETS> 144043
<CURRENT-LIABILITIES> 24195
<BONDS> 60398
<COMMON> 5006
0
0
<OTHER-SE> 45305
<TOTAL-LIABILITY-AND-EQUITY> 144013
<SALES> 83814
<TOTAL-REVENUES> 83814
<CGS> 83070
<TOTAL-COSTS> 87090
<OTHER-EXPENSES> (1782)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 996
<INCOME-PRETAX> (2490)
<INCOME-TAX> (930)
<INCOME-CONTINUING> (1560)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1560)
<EPS-PRIMARY> (.31)
<EPS-DILUTED> (.31)
</TABLE>
