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 28, 1997
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 28, 1997
- -------------------------------------- -----------------------------
Class A Common Stock, $1.00 Par Value 5,006,281
<PAGE>
<TABLE>
PART 1. FINANCIAL INFORMATION
Cagle's, Inc. And Subsidiary
Consolidated Balance Sheets
June 28, 1997 and March 29, 1997
(In Thousands, Except Par Value)
(Unaudited)
<CAPTION>
06/28/97 03/29/97
------------ -------------
<S> <C> <C>
Assets
- -----------------------------------------
CURRENT ASSETS
Cash $ 138 $ 94
Accounts receivable, net of allowance for
doubtful accounts of $519 and $408 at
June 28, 1997 and March 29, 1997,
respectively 17,760 18,001
Inventories 36,095 33,466
Insurance Proceeds Receivable 0 3,054
Deferred Income Tax 0 114
Other current assets 1,552 2,075
------------ ------------
Total current assets 55,545 56,804
------------ ------------
INVESTMENTS IN AND RECEIVABLES FROM
UNCONSOLIDATED AFFILIATES 20,895 19,570
OTHER ASSETS 683 692
PROPERTY, PLANT, AND EQUIPMENT 98,427 100,305
Less accumulated depreciation (37,504) (37,974)
------------ ------------
Property, plant, and equipment, net 60,923 62,331
------------ ------------
TOTAL ASSETS $138,046 $139,397
============ ============
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES & STOCKHOLDERS' EQUITY
- -----------------------------------------
<S> <C> <C>
CURRENT LIABILITIES
Current Maturities of Long Term Debt $ 4,019 $ 3,325
Accounts payable 12,992 12,460
Accrued expenses 10,063 9,079
------------ ------------
Total Current Liabilities 27,074 24,864
------------ ------------
LONG TERM DEBT (net of current maturities) 45,688 49,798
NONCURRENT DEFERRED INCOME TAXES 10,805 11,276
------------ ------------
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 41,527 40,507
------------ ------------
Total stockholders' equity 54,479 53,459
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 138,046 $ 139,397
============ ============
<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 ended June 28, 1997 and June 29, 1996
(Amounts in thousands, except per share data)
(unaudited)
13 wks 13 wks
ended ended
06/28/97 06/29/96
-------- --------
<S> <C> <C>
Net Sales $86,767 $83,814
Costs and Expenses:
Cost of Sales 81,645 83,070
Selling and Delivery 2,858 2,469
General and Administrative 1,619 1,551
------- --------
Total costs and expenses 86,122 87,090
------- --------
Income (Loss) From Operations 645 (3,276)
Other Income(Expense):
Interest expense (977) (996)
Income from unconsolidated
affiliates and other
income, net 2,201 1,782
-------- --------
Income (Loss) Before Income Taxes 1,869 (2,490)
(Provision) Benefit For Income Taxes (699) 930
-------- --------
Net Income (Loss) $1,170 $(1,560)
======== ========
Weighted Average Number Of
Common Shares Outstanding 5,006 5,006
======== ========
Net Income (Loss) Per Common Share $ 0.23 $ (0.31)
Dividends Per Common Share .03 .03
======== ========
<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 28, 1997 and June 29, 1996
(In Thousands)
(unaudited)
<CAPTION>
June 28, 1997 June 29, 1996
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 1,170 $ (1,560)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,954 1,992
(gain)loss on disposal of property, plant and
equipment 9 26
Changes in investment in and receivables from
unconsolidated affiliates (1,325) (1,247)
Changes in assets and liabilities:
Accounts receivables, net 241 3,111
Inventories (2,629) (4,409)
Insurance Proceeds Receivable 3,054 0
Deferred Income Taxes asset 114 0
Other current assets 523 (692)
Accounts payable 532 1,788
Accrued expenses 984 (428)
Income taxes payable 0 (184)
Deferred income taxes payable (471) 0
------- -------
Total Adjustments 2,986 (43)
------- -------
Net cash provided (uses) by operating activities 4,156 (1,603)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant, and equipment (551) (225)
(Increase)decrease in other assets 5 (47)
Proceeds from the sale of property, plant, and equip. 0 94
------- -------
Net cash used in investing activities (546) (178)
------- -------
Cash Flows from financing activities:
Payments of long-term debt and capital
lease obligations (3,416) (610)
Proceeds from issuance of long-term debt 0 2,500
Dividends Paid (150) (151)
------- -------
Net cash provided (used) by financing activities (3,566) 1,739
------- -------
NET INCREASE(DECREASE) IN CASH 44 (42)
CASH AT BEGINNING OF PERIOD 94 326
------- -------
CASH AT END OF PERIOD $ 138 $ 284
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 691 $1,204
======= =======
Income Taxes paid $ 736 $ 0
======= =======
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
Cagle's, Inc. & Subsidiary
Notes to Consolidated Condensed Financial Statements
June 28, 1997
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 June 28,
1997 and March 29, 1997 and the results of their operations and their cash
flows for the 13 weeks ended June 28, 1997 and June 29, 1996.
2. The results of operations for the 13 weeks ended June 28, 1997 and June
29, 1996 are not necessarily indicative of the results expected for the
full year.
3. Inventories consisted of the following: (In Thousands)
June 28, 1997 March 29, 1997
Finished Product $15,021 $ 12,188
Field Inventory and Breeders 16,115 16,294
Feed, Eggs, and Medication 3,452 3,472
Supplies 1,507 1,512
---------------- --------------
$36,095 $33,466
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 $2,168,000 and $1,771,000
respectively for the 13 weeks ended June 28, 1997 and June 29, 1996.
<PAGE>
Management's Discussion and Analysis of Financial
Condition and Results of Operation
June 28, 1997
Financial Condition
The Company received proceeds from its final insurance settlement for the
Pine Mountain Valley fire during the quarter. This cash was used to reduce
debt. There was an increase in finished goods inventory levels as movement
into export markets was sluggish throughout most of the period.
Working capital declined slightly from year end levels, but the current ratio
remained strong at 2.05 to 1, and debt to capital ratio was reduced to .428
to 1.
Subsequent to the end of the period the Company utilized eight ($8) million
of its revolver to retire secured debt from an insurance company; thus
eliminating the last secured debt. As of the period end the Company had
$18,750,000 available to borrow under existing lines of credit. After the
July borrowing that availability is $10,750,000.
Results of Operations
Sales for the 13 weeks ended June 28, 1997 increased 3.5% as compared to the
same period of a year ago. This increase is attributed primarily to 8.26% more
production pounds.
Gross margins improved to 5.9% as compared to .89% during the same period of
a year ago. This improvement is mainly the result of lower feed costs. Feed
cost averaged 17.2% lower this quarter as compared to a year ago when corn
prices were approaching new record highs.
Selling, Delivery and Administrative Expenses
Selling, delivery and administrative expenses for the quarter were 11.4%
higher than a year ago; and are the result of increased outside storage cost
due to higher finished product inventories during the period.
Interest Expense
Interest expense for the quarter ended June 28, 1997 was 1.9% lower than for
the same period of a year ago. This reduction is attributed to slightly reduced
debt levels from a year earlier. Interest expense was impacted late in the
quarter by increases in short term borrowing rates.
Other Income
Other income increased by 23.6% as compared to the same period of a year ago.
This increase is due to increased production levels in one of the companies
unconsolidated affiliates. Income from the affiliates totaled $2.168 million
and $1.771 million, respectively, for the periods ended June 28, 1997 and
June 29, 1996.
Income Taxes
The provision for income taxes reflects taxes at statutory rates adjusted for
available tax credits to which the Company is entitled.
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: August 8, 1997 /s/ J. Douglas Cagle
Date: August 8, 1997 /s/ 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-28-1998
<PERIOD-START> MAR-30-1997
<PERIOD-END> JUN-28-1997
<CASH> 138
<SECURITIES> 0
<RECEIVABLES> 18279
<ALLOWANCES> 519
<INVENTORY> 36095
<CURRENT-ASSETS> 55545
<PP&E> 98427
<DEPRECIATION> 37504
<TOTAL-ASSETS> 138046
<CURRENT-LIABILITIES> 27074
<BONDS> 45688
<COMMON> 5006
0
0
<OTHER-SE> 49473
<TOTAL-LIABILITY-AND-EQUITY> 138046
<SALES> 86767
<TOTAL-REVENUES> 86767
<CGS> 81645
<TOTAL-COSTS> 86122
<OTHER-EXPENSES> (2201)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 977
<INCOME-PRETAX> 1869
<INCOME-TAX> 699
<INCOME-CONTINUING> 1170
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1170
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
