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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 30, 2000.
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 September 30, 2000
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Class A Common Stock, $1.00 Par Value 4,747,280
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PART 1. FINANCIAL INFORMATION
Cagle's, Inc. and Subsidiary
Consolidated Balance Sheets
September 30, 2000 and October 2, 1999
(In Thousands, Except Par Value)
(Period 09/30/00 Unaudited)
09/30/00 04/01/00
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Assets -----------------------------------------
CURRENT ASSETS
Cash $ 93 $ 9,526
Accounts receivable, net of allowance for
doubtful accounts of $1,058 and $905 at
September 30, 2000 and April 1, 2000,
respectively 14,528 15,261
Inventories 28,527 31,112
Notes receivable 1,400 1,400
Other current assets 1,459 2,965
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Total current assets 46,007 60,264
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INVESTMENTS IN AND RECEIVABLES FROM
UNCONSOLIDATED AFFILIATES 37,618 34,634
OTHER ASSETS 1,029 1,069
PROPERTY, PLANT, AND EQUIPMENT 195,666 153,644
Less accumulated depreciation (61,113) (57,141)
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Property, plant, and equipment, net 134,553 96,503
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TOTAL ASSETS $ 219,207 $ 192,470
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LIABILITIES & STOCKHOLDERS' EQUITY---------------
CURRENT LIABILITIES
Current maturities of long term debt $ 8,506 $ 6,384
Accounts payable 13,077 10,753
Accrued expenses 9,060 10,642
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Total Current Liabilities 30,643 27,779
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LONG TERM DEBT (net of current maturities) 91,321 66,570
NONCURRENT DEFERRED INCOME TAXES 12,093 12,787
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STOCKHOLDERS' EQUITY:
Common stock, $1 par value; authorized 9,000
shares, issued and outstanding 4,748 and 4,748
shares, respectively 4,748 4,748
Capital in excess of par value 4,198 4,198
Treasury stock held for options (106) (106)
Retained earnings 72,955 72,839
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Total stockholders' equity 81,795 81,679
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 219,207 $ 192,470
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The accompanying notes are an integral part of these consolidated financial
statements.
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Cagle's, Inc. & Subsidiary
Consolidated Statements of Income
For the 13 and 26 weeks ended September 30, 2000
and the 13 and 26 weeks ended October 2, 1999
(Amounts in thousands, except per share data)
(Period 09/30/00 Unaudited)
13 wks 13 wks 26 wks 26 wks
ended ended ended ended
09/30/00 10/02/99 09/30/00 10/02/99
-------- -------- -------- --------
Net Sales $ 72,590 $ 83,046 $141,774 $169,404
Costs and Expenses:
Cost of Sales 69,827 73,678 137,121 150,017
Selling and Delivery 2,300 2,781 4,713 5,225
General and Administrative 2,182 2,105 4,262 4,665
------- -------- -------- --------
Total costs and expenses 74,309 78,564 146,096 159,907
------- -------- -------- --------
(Loss) Income From Operations (1,719) 4,482 (4,322) 9,497
Other Income(Expense):
Interest expense (421) (403) (988) (1,030)
Income from unconsolidated
affiliates and other
income, net 3,062 961 5,937 2,026
-------- -------- -------- --------
Income before income taxes 922 5,040 627 10,493
(Provision) benefit for income taxes (332) (1,807) (226) (3,859)
-------- -------- -------- --------
Net Income $ 590 $ 3,233 $ 401 $ 6,624
======== ======== ======== ========
Weighted Average Shares Outstanding
-Basic 4,748 4,758 4,748 4,761
-Diluted 4,742 4,761 4,742 4,766
======== ======== ======== ========
Net Income (Loss) Per Common Share
-Basic $ 0.12 $ 0.68 $ .08 $ 1.39
-Diluted $ 0.12 $ 0.68 $ .08 $ 1.39
Dividends Per Common Share $ .03 $ .03 $ .06 $ .06
======== ======== ======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
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Cagle's, Inc & Subsidiary
Consolidated Statements of Cash Flows
For the 26 weeks ended September 30, 2000 and 26 weeks ended October 2, 1999
(In Thousands) (Period 09/30/00 Unaudited)
Sept. 30, 2000 Oct. 02, 1999
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 401 $ 6,624
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 4,012 4,019
(gain)/loss on disposal of property,
plant and equipment 0 (10)
Changes in investment in and receivables from
unconsolidated affiliates (2,984) (1,540)
Changes in operating assets and liabilities:
Accounts receivables, net 733 4,545
Inventories 2,585 (859)
Other current assets 1,506 165
Accounts payable 2,324 (1,023)
Accrued expenses (1,582) 794
Income taxes payable 0 0
Deferred income taxes payable (694) (1,362)
Other non-current liability (300) 0
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Total Adjustments 5,600 4,729
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Net cash provided by operating activities 6,001 11,353
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CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant, and equipment (42,022) (8,807)
Proceeds from the sale of property, plant, and equip. 0 22
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Net cash used in investing activities (42,022) (8,785)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of long-term debt and capital
lease obligations (2,128) (1,395)
Proceeds from issuance of long-term debt 29,000 0
Dividends paid (284) (285)
Repurchase of common stock 0 (894)
Proceeds from exercise of stock options 0 23
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Net cash used in financing activities 26,588 (2,551)
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NET (DECREASE) INCREASE IN CASH (9,433) 17
CASH AT BEGINNING OF PERIOD 9,526 97
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CASH AT END OF PERIOD $ 93 $ 114
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (includes capitalized interest of
$2,355 for period ended 9/30/00) $ 3,115 $ 1,026
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Income Taxes $ 112 $ 4,736
============= ============
The accompanying notes are an integral part of these consolidated financial
statements.
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Cagle's, Inc. & Subsidiary
Notes to Consolidated Condensed Financial Statements
October 30, 2000
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 September
30, 2000 and April 1,2000 and the results of their operations for the 13
weeks and 26 weeks ended September 30, 2000 and October 2, 1999 and their
cash flows for the 26 weeks ended September 30, 2000 and October 2, 1999.
2. The results of operations for the 13 weeks and 26 weeks ended September 30,
2000 and October 2, 1999 are not necessarily indicative of the results
expected for the full year.
3. Inventories consisted of the following: (In Thousands)
September 30, 2000 April 1 2000
Finished Product $12,204 $13,174
Field Inventory and Breeders 12,411 13,683
Feed, Eggs, and Medication 2,656 2,914
Supplies 1,256 1,341
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$28,527 $31,112
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 its unconsolidated affiliates
using the equity method. The Company's share of earnings from these
affiliates totaled $3,019,000 and $930,573 respectively for the 13 weeks
ended September 30, 2000 and October 2, 1999 and $5,803,000 and $1,943,573
respectively for the 26 weeks ended September 30, 2000 and October 2, 1999.
6. Certain prior year amounts have been re-classified for consistency with
current period presentation.
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Management's Discussion and Analysis of Financial
Condition and Results of Operation
September 30, 2000
Financial Condition
Some improvement in market prices and continued favorable feed grain prices
enabled the company to return to a profitable position during the quarter ended
September 30, 2000. Continuing capital spending toward completion of the new
Perry Processing facility and the Rockmart, Ga. Feed Mill created a negative
cash flow which required additional funding from the company's $40,000,000
Revolving Credit facility. As of September 30, 2000, $29,000,000 had been
drawn against this facility.
The Company has requested and closed subsequent to the period end a temporary
expansion of the Revolving Credit facility to $60,000,000.
Results of Operations
Sales for the 13 week and 26 week ended September 30, 2000 were 12.6% and 16.3%
lower respectively when compared to the comparable periods of a year ago. The
lower revenue is attributable to lower market prices, primarily boneless
skinless breast meat prices which averaged 11.0% and 15.0% lower respectively
for the 13 week and 26 week respectively when compared to the comparable period
of a year ago. The lower prices for white meat was off-set slightly by higher
dark meat prices for the same periods.
Another important fact affecting total revenue is reduced requirement to
purchase outside product for further processing due to the availability of
product that had been dedicated with the final increment available during the
quarter. These outside purchases were 47.7% and 53.7% for the quarter and six
month periods as compared to the same period of a year ago. This represents
$5,419,000 and $14,030,000 less outside purchase respectively as compared to the
corresponding periods of a year ago and is believed to have had a corresponding
effect on revenues as this product represent sales over and above production
from the integrated operations.
Gross margins were 7.5% and 8.2% lower respectively from year ago as a result of
the lower pricing. Cost remained relatively stable over the same period.
Selling, Delivery and Administrative Expenses
As a total category these expenses are slightly lower than for the comparable
periods of a year ago with the primary reduction realized in outside storage
expense. There was some increase in professional fees (legal) associated with
on-going litigation as compared to the same periods of a year ago.
Interest Expense
Interest expense for the 13 week period and 26 week period ended September 30,
2000 was virtually the same as for the same periods of a year ago.
Other Income
Other income increased by 218.6% for the 13 week period ended September 30,
2000 compared to the 13 week period ended October 2, 1999 and by 193% for the
26 week period ended as of the same dates. This change represents an increase
in the company's share of earnings in unconsolidated affiliates.
Income Taxes
The provision for income taxes reflects the taxes due at statutory rates
adjusted for available tax credit to which the company is entitled.
Part II Other Information
Item 9 Exhibits and Reports on Form 8-K
a. Not applicable
b. A report or Form 8-K was 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 3, 2000 /s/ J. Douglas Cagle
Chairman and C.E.O.
Date: November 3, 2000 /s/ Kenneth R. Barkley
Sr. VP Finance/Treasurer/CFO
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