<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 December 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 December 27, 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
December 27, 1997 and March 29, 1997
(In Thousands, Except Par Value)
(12/97=Unaudited)
<CAPTION>
12/27/97 03/29/97
------------ -------------
<S> <C> <C>
Assets
- -----------------------------------------
CURRENT ASSETS
Cash $ 175 $ 94
Accounts receivable, net of allowance for
doubtful accounts of $663 and $408 at
Dec. 27, 1997 and March 29, 1997,
respectively 18,370 18,001
Inventories 32,908 33,466
Insurance Proceeds Receivable 0 3,054
Deferred Income Tax 0 114
Other current assets 743 2,075
------------ ------------
Total current assets 52,196 56,804
------------ ------------
INVESTMENTS IN AND RECEIVABLES FROM
UNCONSOLIDATED AFFILIATES 26,080 19,570
OTHER ASSETS 693 692
PROPERTY, PLANT, AND EQUIPMENT 99,604 100,305
Less accumulated depreciation (40,931) (37,974)
------------ ------------
Property, plant, and equipment, net 58,673 62,331
------------ ------------
TOTAL ASSETS $137,642 $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 12,348 12,460
Accrued expenses 11,040 9,079
------------ ------------
Total Current Liabilities 26,182 24,864
------------ ------------
LONG TERM DEBT (net of current maturities) 46,070 49,798
NONCURRENT DEFERRED INCOME TAXES 10,930 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 41,730 40,507
------------ ------------
Total stockholders' equity 54,460 53,459
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 137,642 $ 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 39 weeks ended December 27, 1997 and December 28, 1996
(Amounts in thousands, except per share data)
(unaudited)
13 wks 13 wks 39 wks 39 wks
ended ended ended ended
12/27/97 12/28/96 12/27/97 12/28/96
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $85,532 $85,506 $265,986 $261,341
Costs and Expenses:
Cost of Sales 79,472 80,169 254,463 252,095
Selling and Delivery 2,617 2,873 8,192 8,110
General and Administrative 1,579 1,575 4,741 4,911
------- -------- -------- --------
Total costs and expenses 83,668 84,617 267,396 265,116
------- -------- -------- --------
Income (Loss) From Operations (1,141) 889 (1,410) (3,775)
Other Income(Expense):
Interest expense (828) (1,157) (2,713) (3,637)
Income from unconsolidated
affiliates and other
income, net 2,356 2,761 6,784 6,358
-------- -------- -------- --------
Income (Loss) Before Income Taxes 392 2,493 2,661 (1,054)
(Provision) Benefit For Income Taxes (150) (948) (992) 400
-------- -------- -------- --------
Net Income (Loss) $ 242 $ 1,545 $ 1,669 $ (654)
======== ======== ======== ========
Weighted Average Number Of
Common Shares Outstanding 5,006 5,006 5,006 5,006
======== ======== ======== ========
Net Income (Loss) Per Common Share $ 0.05 $ 0.31 $ 0.33 $ (0.13)
Dividends Per Common Share .03 .03 .09 .09
======== ======== ======== ========
<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 39 weeks ended December 27, 1997 and December 28, 1996
(In Thousands)
(unaudited)
<CAPTION>
Dec. 27, 1997 Dec. 28, 1996
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 1,672 $ (654)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 5,937 5,559
(gain)loss on disposal of property, plant and
equipment (276) 10
Changes in investment in and receivables from
unconsolidated affiliates (6,510) (3,272)
Changes in assets and liabilities:
Accounts receivables, net (369) 2,233
Inventories 558 (3,725)
Insurance Proceeds Receivable 3,054 3,200
Deferred Income Taxes asset 114 0
Other current assets 1,332 1,690
Accounts payable (112) (743)
Accrued expenses 1,961 (929)
Income taxes payable 0 (184)
Deferred income taxes payable (346) (487)
------- -------
Total Adjustments 5,343 3,352
------- -------
Net cash provided (uses) by operating activities 7,015 2,698
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant, and equipment (4,826) (2,250)
(Increase)decrease in other assets (9) 90
Proceeds from the sale of property, plant, and equip. 2,832 114
------- -------
Net cash used in investing activities (2,003) (2,046)
------- -------
Cash Flows from financing activities:
Payments of long-term debt and capital
lease obligations (4,259) (5,643)
Proceeds from issuance of long-term debt 0 6,000
Dividends Paid (450) (451)
Repurchase of Common Stock (222) 0
------- -------
Net cash provided (used) by financing activities (4,931) (94)
------- -------
NET INCREASE(DECREASE) IN CASH 81 558
CASH AT BEGINNING OF PERIOD 94 326
------- -------
CASH AT END OF PERIOD $ 175 $ 884
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $2,966 $3,637
======= =======
Income Taxes paid $ 967 $ 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
December 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 December
27, 1997 and March 29, 1997 and the results of their operations and
their cash flows for the 13 weeks and 39 weeks ended December 27, 1997
and December 28, 1996.
2. The results of operations for the 13 weeks ended December 27, 1997 and
December 28, 1996. are not necessarily indicative of the results expected
for the full year.
3. Inventories consisted of the following: (In Thousands)
Dec. 27, 1997 March 29, 1997
Finished Product $14,958 $ 12,188
Field Inventory and Breeders 13,769 16,294
Feed, Eggs, and Medication 2,675 3,472
Supplies 1,506 1,512
---------------- --------------
$32,908 $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 five unconsolidated affiliates
using the equity method. The Company's share of earnings and management
fees was $1,466,000 and $1,913,000 for the 13 weeks ended December 27,
1997 and December 28, 1996 and $5,799,000 and $5,460,000 respectively for
the 39 weeks ended December 27, 1997 and December 28, 1996.
<PAGE>
Management's Discussion and Analysis of Financial
Condition and Results of Operation
December 27, 1997
Financial Condition
Slow movement of export product along with seasonal inventory increases
resulted in an increase in revolving credit line borrowing, however, total debt
is $4.3 million less than at the beginning of the 39 week period.
The Company's current ratio declined from the March 29, 1997, level of 2.28 to
1 to 1.99 to 1 at December 27, 1997, however, the debt and total capital ratio
has improved to .47 to 1 from .488 to 1. The Company's availability under
existing lines of credit was $11,009,000 at December 28, 1996.
Results of Operations
Sales for the 13 weeks ended December 27, 1997, declined by 3.5% as compared to
the 13 weeks ended December 28, 1996, and is attributed to lower prices for
deboned meat and sharply lower prices for export items. The quoted market for
broilers during the quarter averaged 11.6% lower than a year ago . In
addition, the unsettled environment in Asia appreciably slowed movement of
product slated for that market resulting in heavier than normal inventory
during the period.
Sales for the 39 weeks ended December 27, 1997, were 1.8% higher than for the
corresponding period of last year and are the result of 1.8% more production
volume during the same period.
Gross margins for the 13 weeks ended December 27, 1997, were lower by 2.54%
(3.7% -vs- 6.24%) due largely to lower selling prices which more than off-set
feed cost that averaged 8.3% lower than for the same quarter of a year ago.
Margins for the 39 weeks ended December 27, 1997, were .8% higher than for the
39 weeks ended December 28, 1996, due largely to more favorable feed grain cost
during the period.
Selling, Delivery, and Administrative Expenses
Selling, delivery and administrative expenses were 5.6% and .7% lower
respectively for the 13 weeks and 39 weeks period ended December 27, 1997, as
compared to the same period ended December 28, 1996.
Interest Expense
Interest expense for the quarter and 9 months ended December 27, 1997, were
28.2% and 25.4% lower than the comparable periods ended December 28, 1996, due
to lower average debt levels and lower interest rates.
Other Income
Other income for the 13 weeks ended December 27, 1997, was 14.7% lower than for
the same period of a year ago and proceeds resulting from the resolution of a
lawsuit which was included in the year ago numbers. The 39 weeks' results
increased 6.7% as compared to the same period of a year ago and is the result
of increased earnings produced by the Company's unconsolidated affiliates.
Income Taxes
The provision for income taxes reflects the Company's tax liability computed
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: February 6, 1997 /s/ J. Douglas Cagle
Date: February 6, 1997 /s/ Kenneth R. Barkley
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000016104
<NAME> CAGLE'S, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-28-1998
<PERIOD-START> MAR-30-1997
<PERIOD-END> DEC-27-1997
<CASH> 175
<SECURITIES> 0
<RECEIVABLES> 19033
<ALLOWANCES> 663
<INVENTORY> 32908
<CURRENT-ASSETS> 52196
<PP&E> 99604
<DEPRECIATION> 40931
<TOTAL-ASSETS> 137642
<CURRENT-LIABILITIES> 26182
<BONDS> 46070
<COMMON> 5006
0
0
<OTHER-SE> 60384
<TOTAL-LIABILITY-AND-EQUITY> 137642
<SALES> 82532
<TOTAL-REVENUES> 82532
<CGS> 79472
<TOTAL-COSTS> 83668
<OTHER-EXPENSES> (1136)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 828
<INCOME-PRETAX> 392
<INCOME-TAX> 150
<INCOME-CONTINUING> 242
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 242
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
