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 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 December 30, 1995
------------------------------------- ---------------------------------
Class A Common Stock, $1.00 Par Value 5,006,282
<PAGE>
<TABLE>
PART 1. FINANCIAL INFORMATION
Cagle's, Inc. And Subsidary
Consolidated Balance Sheets
December 30, 1995 and April 1, 1995
(In Thousands, Except Par Value)
(Unaudited)
<CAPTION>
12/30/95 04/01/95
------------ -------------
<S> <C> <C>
Assets
- -----------------------------------------
CURRENT ASSETS
Cash $ 0 $462
Accounts receivable, net of allowance for
doubtful accounts of $480 and $141 at
Dec. 30, 1995 and April 1, 1995,
respectively 13,898 15,013
Inventories 28,542 25,282
Other current assets 10,233 1,538
------------ ------------
Total current assets 52,673 42,295
------------ ------------
INVESTMENTS IN AND RECEIVABLES FROM
UNCONSOLIDATED AFFILIATES 14,008 11,697
OTHER ASSETS 959 550
PROPERTY, PLANT, AND EQUIPMENT 90,608 66,897
Less accumulated depreciation (30,766) (32,668)
------------ ------------
Property, plant, and equipment, net 59,842 34,229
------------ ------------
TOTAL ASSETS $127,482 $88,771
============ ============
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES & STOCKHOLDERS' EQUITY
- -----------------------------------------
<S> <C> <C>
CURRENT LIABILITIES
Current Maturities $ 1,568 $ 1,572
Accounts payable 12,346 13,550
Accrued expenses 6,977 7,900
Current income taxes payable 0 967
Current deferred income taxes (200) 714
------------ ------------
Total Current Liabilities 20,691 24,703
------------ ------------
LONG TERM DEBT (net of current maturities) 48,838 15,233
NONCURRENT DEFERRED INCOME TAXES 7,545 4,464
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock, $1 par value; authorized 9,000
shares and 5006 and 5034 shares issued
respectively 5,006 5,034
Capital in excess of par value 7,946 8,366
Retained earnings 37,456 30,971
------------ ------------
Total stockholders' equity 50,408 44,371
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $127,482 $88,771
============ ============
<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 and 39 weeks ended December 30, 1995 and December 31, 1994
(Amounts in thousands, except per share data)
(unaudited)
13 wks 13 wks 39 wks 39 wks
ended ended ended ended
12/30/95 12/31/94 12/30/95 12/31/94
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $64,439 $83,640 $231,103 $260,839
Costs and Expenses:
Cost of Sales 61,295 74,997 219,182 234,437
Selling and Delivery 2,100 2,232 7,125 6,420
General and Administrative 1,404 1,453 4,810 4,873
------- -------- -------- --------
Total costs and expenses 64,799 78,682 231,117 245,730
------- -------- -------- --------
Income (loss) From Operations (360) 4,958 (14) 15,109
Other Income(Expense):
Interest expense (714) (261) (1,449) (827)
Income from unconsolidated
affiliates and other
income, net 5,020 521 12,387 1,503
-------- -------- -------- --------
Income Before Income Taxes 3,946 5,218 10,924 15,785
Provision For Income Taxes 1,517 1,617 3,988 5,274
-------- -------- -------- --------
Net Income $2,429 $3,601 6,936 10,511
======== ======== ======== ========
Weighted Average Number Of
Common Shares Outstanding 5,009 5,159 5,021 5,182
======== ======== ======== ========
Net Income Per Common Share $.48 $.70 $1.38 $2.03
======== ======== ======== ========
DIVIDENDS PER COMMON SHARE $.0300 $.0250 $.0900 $.0750
<FN>
The accompanying notes are an inteegral part of these consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
Cagle's, Inc & Subsidary
Consolidated Statements of Cash Flows
For the 39 weeks ended December 30, 1995 and December 31, 1994
(In Thousands)
(unaudited)
<CAPTION>
Dec 30, 1995 Dec 31, 1994
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $6,936 $10,511
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 4,083 3,362
(gain)loss on disposal of property, plant and
equipment (8,379) (38)
Changes in investment in and receivables from
unconsolidated affiliates (2,311) (222)
Increase/Non Current Defferred Taxes 3,081 0
Changes in assets and liabilities:
Accounts receivables, net 1,115 1,189
Inventories (3,260) (2,141)
Other current assets (8,695) 440
Accounts payable (1,204) 299
Accrued expenses (923) 223
Income taxes payable (967) 0
Deferred income taxes (914) 440
------- -------
Total Adjustments (18,374) 3,552
------- -------
Net cash provided (used) by operating activities (11,438) 14,063
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant, and equipment (31,437) (10,545)
(Increase)decrease in other assets (420) (604)
Proceeds from the sale of property, plant, and equip. 10,137 80
Investments in unconsolidated affilates 0 (3,023)
------- -------
Net cash used in investing activities (21,720) (14,092)
------- -------
Cash Flows from financing activities:
Payments of long-term debt and capital
lease obligations (1,404) (926)
Repurchase Common Stock (448) (2,260)
Proceeds from issuance of long-term debt 35,000 5,000
Dividends Paid (452) (390)
------- -------
Net cash provided by (used in)financing activities 32,696 1,424
------- -------
NET INCREASE(DECREASE) IN CASH (462) 1,395
CASH AT BEGINNING OF PERIOD 462 875
------- -------
CASH AT END OF PERIOD $ 0 $2,270
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $1,449 $831
======= =======
Income Taxes paid $2,769 $4,721
======= =======
<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
December 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 December
30, 1995 and April 1, 1995 and the results of their operations and their cash
flows for the 13 weeks and 39 weeks respectively, ended December 30, 1995
and December 31, 1994.
2. The results of operations for the 13 weeks and 39 weeks ended December 30,
1995, and December 31, 1994 are not necessarily indicative of the results
expected for the full year.
3. Inventories consisted of the following (in thousands)
Dec. 30, 1995 April 1, 1995
-------------- -------------
Finished Products 8,298 7,813
Field Inventory and Breeders 15,411 13,742
Feed, Eggs, and Medication 3,071 2,243
Supplies 1,762 1,484
------------- -------------
28,542 25,282
4. On June 24, 1995 the Company's plant in Pine Mountain Valley, Georgia
was destroyed by fire. The Company has rebuilt the plant on the site and
started processing on November 20, 1995 on a limited scale. Pre-fire
volume is expected in mid to late January.
As of December 30, 1995 the Company has received $7.4 million in advances
from the insurance company against the property and inventory loss and $2.6
million as an advance toward Business Interruption/Extra expense losses.
In addition, the Company has accrued $7.6 million toward the balance of the
property claim and inventory loss and Business Interruption loss. This amount
was received subsequent to the end of the period. The Company has reflected
the business interruption element of these amounts
as a reduction of cost of sales. The excess of property proceeds from insurance
over the book value of property destroyed by the fire has been recorded within
other income.
The Company expects to receive additional amounts under the Business
Interruption/Extra Expense coverage for additional costs being incurred during
the period until the plant reaches pre-fire efficiency. However, these
amounts are subject to negotiation in final settlement and are indeterminable
as of this time.
5. The Company's year to date earnings reflect a provision for income taxes
at an effective rate of 36.5% which anticipates utilization of available
state tax credits to which the Company is entitled.
<PAGE>
Cagle's, Inc. and Subsidiary
Management's Discussion and Analysis of Financial
Condition and Results of Operations
December 30, 1995
Financial Condition:
The Company's financial condition as of December 30, 1995 remains strong
despite large drawdowns on debt facilities. This additional debt is the
result of borrowings to rebuild the processing plant lost in the June 24th
fire. The Company rebuilt the plant on an extremly accelerated schedule,
consequently the Capital Spending outpaced insurance recoveries requiring
drawdowns from existing lines of credit. In addition, escalating grain
prices have increased field inventory values requiring more borrowing for
working capital.
As of December 30, 1995 the Company had $19 million borrowed against its $20
million operating line and $16 million drawn against a $40 million stand-by
line that was diverted from the planned Kentucky project. It is expected that
insurance proceeds will be utilized to reduce the debt resulting from the fire
loss and permanent financing put in place for a portion of the construction
cost.
Results of Operations:
Sales for the 13 and 39 weeks declined by 23% and 11.4% respectively
as compared to the same periods of a year ago, despite market prices that
averaged 12.2% and .5% higher for the 13 week and 39 week respectively over the
same period of a year ago. The reduction in sales is primarily the result of
28.7% and 16.9% less processed lbs. respectively for the quarter and 9 months
as compared to the same periods of a year ago. This is directly attributable
to the loss of production from the plant lost in the fire.
Gross margins were 5.4% and 4.9% lower respectively for the 13 weeks and 39
weeks as compared to the same period of a year ago and is attributable to
extra cost and inefficiencies due to the fire loss which have not been resolved
with the insurance coverage and escalating feed cost which averaged 27.3% and
8.3% higher for the 13 weeks and 39 weeks respectively compared to the same
period of a year ago. In addition, the Company has experienced some
inefficiencies associated with converting the Macon, Georgia Plant to a consumer
packaged IQF (Individually Quick Frozen) plant from a straight deboning plant.
Selling, Delivery and General and Administration Expense:
As a group these expenses have remained relatively unchanged for both the 13
week and 39 week periods when compared to prior year levels.
<PAGE>
Interest Expenses:
Interest expense increased by 173.6% and 75.2% respectively for the quarter
and 9 months as compared to the same period of a year ago is directly
attributable to the heavier debt load carried during the periods.
Income Taxes:
The provision for income taxes as reported reflects the Company's expected
tax liability adjusted for credits that the Company is eligible to receive,
mainly state tax credits.
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: February 8, 1996 /s/ J. Douglas Cagle
Chairman and Chief Executive Officer
DATE: February 8, 1996 /s/ Kenneth R. Barkley
Senior Vice President
Finance/Treasurer/CFO
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000016104
<NAME> CAGLE'S, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-30-1996
<PERIOD-START> APR-02-1995
<PERIOD-END> DEC-30-1995
<CASH> (1900)
<SECURITIES> 0
<RECEIVABLES> 14378
<ALLOWANCES> 480
<INVENTORY> 28542
<CURRENT-ASSETS> 50773
<PP&E> 90608
<DEPRECIATION> 30766
<TOTAL-ASSETS> 125582
<CURRENT-LIABILITIES> 18791
<BONDS> 48838
<COMMON> 5006
0
0
<OTHER-SE> 45402
<TOTAL-LIABILITY-AND-EQUITY> 125582
<SALES> 231103
<TOTAL-REVENUES> 231103
<CGS> 219182
<TOTAL-COSTS> 231117
<OTHER-EXPENSES> (12387)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1449
<INCOME-PRETAX> 10924
<INCOME-TAX> 3988
<INCOME-CONTINUING> 6936
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6936
<EPS-PRIMARY> 1.386
<EPS-DILUTED> 1.386
</TABLE>
