<PAGE>
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 September 27, 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
September 27, 1997 and March 29, 1997
(In Thousands, Except Par Value)
(9/97=Unaudited)
<CAPTION>
09/27/97 03/29/97
------------ -------------
<S> <C> <C>
Assets
- -----------------------------------------
CURRENT ASSETS
Cash $ 306 $ 94
Accounts receivable, net of allowance for
doubtful accounts of $571 and $408 at
Sept. 27, 1997 and March 29, 1997,
respectively 22,215 18,001
Inventories 30,219 33,466
Insurance Proceeds Receivable 0 3,054
Deferred Income Tax 0 114
Other current assets 1,457 2,075
------------ ------------
Total current assets 54,197 56,804
------------ ------------
INVESTMENTS IN AND RECEIVABLES FROM
UNCONSOLIDATED AFFILIATES 22,275 19,570
OTHER ASSETS 694 692
PROPERTY, PLANT, AND EQUIPMENT 98,620 100,305
Less accumulated depreciation (39,197) (37,974)
------------ ------------
Property, plant, and equipment, net 59,423 62,331
------------ ------------
TOTAL ASSETS $136,589 $139,397
============ ============
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES & STOCKHOLDERS' EQUITY
- -----------------------------------------
<S> <C> <C>
CURRENT LIABILITIES
Current Maturities of Long Term Debt $ 2,794 $ 3,325
Accounts payable 13,596 12,460
Accrued expenses 10,778 9,079
------------ ------------
Total Current Liabilities 27,168 24,864
------------ ------------
LONG TERM DEBT (net of current maturities) 44,071 49,798
NONCURRENT DEFERRED INCOME TAXES 10,980 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
Treasury Stock held for options (222) 0
Retained earnings 41,640 40,507
------------ ------------
Total stockholders' equity 54,370 53,459
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 136,589 $ 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 26 weeks ended September 27, 1997 and September 28, 1996
(Amounts in thousands, except per share data)
(unaudited)
13 wks 13 wks 26 wks 26 wks
ended ended ended ended
09/27/97 09/28/96 09/27/97 09/28/96
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $96,687 $92,021 $183,454 $175,835
Costs and Expenses:
Cost of Sales 93,343 88,856 174,988 171,926
Selling and Delivery 2,717 2,768 5,575 5,237
General and Administrative 1,544 1,785 3,160 3,336
------- -------- -------- --------
Total costs and expenses 97,604 93,409 183,723 180,499
------- -------- -------- --------
Income (Loss) From Operations (917) (1,388) (269) (4,664)
Other Income(Expense):
Interest expense (908) (1,484) (1,885) (2,480)
Income from unconsolidated
affiliates and other
income, net 2,227 1,815 4,429 3,597
-------- -------- -------- --------
Income (Loss) Before Income Taxes 402 (1,057) 2,275 (3,547)
(Provision) Benefit For Income Taxes (143) 418 (842) 1,348
-------- -------- -------- --------
Net Income (Loss) $ 259 $ (639) $ 1,433 $ (2,199)
======== ======== ======== ========
Weighted Average Number Of
Common Shares Outstanding 5,006 5,006 5,006 5,006
======== ======== ======== ========
Net Income (Loss) Per Common Share $ 0.05 $ (0.13) $ 0.29 $ (0.44)
Dividends Per Common Share .03 .03 .06 .06
======== ======== ======== ========
<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 26 weeks ended September 27, 1997 and September 28, 1996
(In Thousands)
(unaudited)
<CAPTION>
Sept 28, 1997 Sept 29, 1996
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 1,433 $ (2,199)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 3,887 3,796
(gain)loss on disposal of property, plant and
equipment (17) 18
Changes in investment in and receivables from
unconsolidated affiliates (2,705) (2,494)
Changes in assets and liabilities:
Accounts receivables, net (4,214) (1,388)
Inventories (3,247) (5,475)
Insurance Proceeds Receivable 3,054 3,201
Deferred Income Taxes asset 114 0
Other current assets 618 1,285
Accounts payable 1,136 5,898
Accrued expenses 1,699 (279)
Income taxes payable 0 (184)
Deferred income taxes payable (296) 1,438)
------- -------
Total Adjustments 6,523 2,940
------- -------
Net cash provided (uses) by operating activities 7,956 741
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant, and equipment (975) (1,738)
(Increase)decrease in other assets (16) (1)
Proceeds from the sale of property, plant, and equip. 25 107
------- -------
Net cash used in investing activities (965) (1,632)
------- -------
Cash Flows from financing activities:
Payments of long-term debt and capital
lease obligations (6,258) (923)
Proceeds from issuance of long-term debt 0 2,000
Dividends Paid (300) (300)
Repurchase of Common Stock (222) 0
------- -------
Net cash provided (used) by financing activities (6,780) 777
------- -------
NET INCREASE(DECREASE) IN CASH 211 (114)
CASH AT BEGINNING OF PERIOD 94 326
------- -------
CASH AT END OF PERIOD $ 305 $ 212
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $1,142 $2,025
======= =======
Income Taxes paid $ 752 $ 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
September 27, 1997
(unaudited)
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 September
27, 1997 and March 29, 1997 and the results of their operations and
their cash flows for the 13 weeks and 26 weeks ended September 27, 1997
and September 28, 1996.
2. The results of operations for the 13 weeks ended September 27, 1997 and
September 28, 1996. are not necessarily indicative of the results expected
for the full year.
3. Inventories consisted of the following: (In Thousands)
Sept 27, 1997 March 29, 1997
Finished Product $ 9,940 $ 12,188
Field Inventory and Breeders 15,562 16,294
Feed, Eggs, and Medication 3,228 3,472
Supplies 1,489 1,512
---------------- --------------
$30,219 $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 was $2,165,000 and $1,776,000 for the 13 weeks ended September 27,
1997 and September 28, 1996 and $4,333,000 and $3,547,000 respectively for
the 26 weeks ended September 27, 1997 and September 28, 1996.
<PAGE>
Management's Discussion and Analysis of Financial
Condition and Results of Operation
September 27, 1997
Financial Condition
The Company utilized improved cash flow generated by moderating feed cost
during the quarter to reduce debt, and through the use of available capacity on
its unsecured credit lines.
The Company's current ratio declined to 1.99 at September 27, 1997 from 2.28 at
March 21, 1997. Since the beginning of the year, however, the debt to total
capital ratio has improved to .463 from .488. As of the end of the period,
the Company had available $11,750,000 for borrowing under existing lines of
credit.
Results of Operations
Sales for the 13 weeks and 26 weeks ended September 27, 1997, increased by 5.1%
and 4.3% respectively as compared to the same periods a year ago. This
increase is attributed mainly to 3% more pounds of production and additional
product purchased outside for further processing. Market prices were 2% lower
for whole birds. Dark meat for export was approximately 40% lower.
Gross margins for the 13 week period ended September 27, 1997, were unchanged
from the same period of a year ago as a sluggish export market for dark meat
and high soy meal prices offset more moderate corn prices during the period.
Margins for the 26 week period ended September 27, 1997, improved to 4.6% from
2.2% during the corresponding period of a year ago which was the result of
lower overall feed cost during the first quarter.
Selling, Delivery and Administrative Expenses
Selling, delivery and administrative expenses were essentially unchanged from
levels one year ago for the quarter and six months ended September 27, 1997.
Interest Expense
Interest expense for the quarter and six months ended September 27, 1997 was
38.8% lower and 24% lower respectively than for the same periods of a year
ago. This reduction is attributed to reduced debt levels from a year earlier.
Interest expense was impacted slightly by increases in short term borrowing
rates.
Other Income
Other income increased by 18.5% and 23.1% for the 13 weeks and 26 weeks ended
September 27, 1997, respectively, as compared to the corresponding periods of
one year ago and is the result of increased production at one of the Company's
unconsolidated affiliates. This affiliate attained its full production level
in January, 1997.
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: November 6, 1997 /s/ J. Douglas Cagle
Date: November 6, 1997 /s/ Kenneth R. Barkley
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000016104
<NAME> CAGLE'S, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-28-1998
<PERIOD-START> MAR-30-1997
<PERIOD-END> SEP-27-1997
<CASH> 306
<SECURITIES> 0
<RECEIVABLES> 22786
<ALLOWANCES> 571
<INVENTORY> 30219
<CURRENT-ASSETS> 54197
<PP&E> 98620
<DEPRECIATION> 39197
<TOTAL-ASSETS> 136589
<CURRENT-LIABILITIES> 27168
<BONDS> 44071
<COMMON> 5006
0
0
<OTHER-SE> 60344
<TOTAL-LIABILITY-AND-EQUITY> 136589
<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>
