UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 26, 1994 Commission File No. 2-
62681
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________to ______________
GOLD KIST INC.
(Exact name of registrant as specified in its charter)
GEORGIA 58-
0255560 (State or other jurisdiction of (I.R.S.
Employer
incorporation or organization) Identification
No.)
244 Perimeter Center Parkway, N.E., Atlanta, Georgia 30346
(Address of principal executive offices) (Zip
Code)
(Registrant's telephone number, including area code) (404)
393-5000
N/A
(Former name, former address and former fiscal year, if
changed since last report.)
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
<PAGE>
<PAGE>
Item 1. Financial GOLD KIST INC. AND SUBSIDIARIES
Statements CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
(Unaudited)
Mar. 26, 1994 June 26,1993
_____________ ____________
ASSETS
Current assets:
Cash and cash equivalents $ 11,179 31,086
Receivables, principally trade, less
allowance for doubtful accounts
of $6,202 at Mar. 26, 1994 and
$5,255 at June 26, 1993 108,828 101,361
Notes receivable 21,918 32,410
Inventories (note 3) 206,157 174,504
Other current assets 15,525 3,365
_______ _______
Total current assets 363,607 342,726
Investments 72,398 75,318
Property, plant and equipment, net 205,719 204,481
Other assets 44,785 42,577
_______ _______
$686,509 665,102
======= =======
LIABILITIES AND EQUITY
Current liabilities:
Notes payable and current maturities of
long-term debt:
Short-term bank borrowings $ 3,000 -
Subordinated loan certificates 24,801 26,386
Current maturities of long-term debt 27,802 28,044
_______ _______
55,603 54,430
Accounts payable 119,988 94,236
Accrued compensation and related expenses 26,919 23,078
Interest left on deposit 9,033 13,392
Other current liabilities 5,043 8,435
Patronage refunds and equity payable 1,185 8,526
_______ _______
Total current liabilities 217,771 202,097
Long-term debt, excluding current maturities 119,467 120,334
Accrued postretirement benefit costs 31,880 31,841
Other liabilities 696 617
_______ _______
Total liabilities 369,814 354,889
_______ _______
Minority interest 25,097 24,593
Patrons' and other equity:
Common stock, $1.00 par value - Authorized
500 shares; 79 issued and outstanding 79 79
Revolving fund and cumulative preferred
certificates - 10,253
Patronage reserves 212,019 204,148
Retained earnings 79,500 71,140
_______ _______
Total patrons' and other equity 291,598 285,620
_______ _______
<PAGE>
Contingent liabilities (note 6)
$686,509 665,102
======= =======
See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
GOLD KIST INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands)
(Unaudited)
Three Months Ended Nine Months Ended
__________________ _________________
Mar. 26, Mar. 27, Mar. 26, Mar. 27,
1994 1993 1994 1993
_________ _________ ________ ________
Net sales volume $391,380 336,653 1,098,234 985,871
Cost of sales 358,414 304,012 984,543 888,365
_______ _______ _________ _______
Gross margins 32,966 32,641 113,691 97,506
Distribution, administrative and
general expenses 30,286 28,392 88,449 82,056
_______ _______ _________ _______
Net operating margins 2,680 4,249 25,242 15,450
_______ _______ _________ _______
Other income (deductions):
Interest income 1,049 1,364 4,464 5,444
Interest expense (2,532) (3,403) (9,394) (12,676)
Equity in earnings (loss) of
partnership (note 4) 1,052 2,360 (1,492) 2,037
Miscellaneous, net 758 2,790 3,776 6,333
_______ _______ _________ _______
327 3,111 (2,646) 1,138
_______ _______ _________ _______
Margins before income taxes,
minority interest and
cumulative effect of change
in accounting principle 3,007 7,360 22,596 16,588
Income tax expense (note 5) 789 2,280 7,331 5,272
_______ ______ _________ _______
Margins before minority
expense and cumulative
effect of change in
accounting principle 2,218 5,080 15,265 11,316
Minority interest 361 (276) (599) (1,472)
_______ ______ _________ _______
Margins before cumulative
effect of change in
accounting principle 2,579 4,804 14,666 9,844
Cumulative effect of change in
accounting for income taxes
(note 5) - - 5,339 -
_______ ______ _________ _______
Net margins $ 2,579 4,804 20,005 9,844
======= ====== ========= =======
See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
GOLD KIST INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
Nine Months Ended
_________________
Mar. 26, Mar. 27,
1994 1993
________ _________
Cash flows from operating activities:
Net margins $ 20,005 9,843
Non-cash items included in net margins:
Depreciation and amortization 27,506 27,149
Cumulative effect of change in accounting
principle (5,339) -
Equity in loss of partnership 1,492 (2,037)
Deferred income tax benefit (2,543) (2,719)
Other (361) 2,924
Changes in operating assets and liabilities:
Receivables 3,025 21,892
Inventories (31,653) (16,501)
Other current assets (1,830) (2,127)
Accounts payable and accrued expenses 26,201 25,705
Interest left on deposit (4,359) (505)
Deposit for income taxes (5,038) -
_______ _______
Net cash provided by operating activities 27,106 63,624
_______ _______
Cash flows from investing activities:
Acquisitions of property, plant and equipment (28,970) (14,289)
Proceeds from partnership earnings distribution 1,770 11,404
Proceeds from sale of loans 5,040 10,000
Other (3,694) (4,664)
_______ _______
Net cash provided by (used in) investing
activities (25,854) 2,451
_______ _______
Cash flows from financing activities:
Short-term borrowings (repayments), net 1,415 (43,603)
Proceeds from long-term debt 15,650 14,586
Principal payments of long-term debt (16,759) (21,548)
Patronage refunds and other equity paid in cash (21,465) (3,439)
_______ _______
Net cash used in financing activities (21,159) (54,004)
_______ _______
Net change in cash and cash equivalents (19,907) 12,071
Cash and cash equivalents at beginning of period 31,086 12,150
_______ _______
Cash and cash equivalents at end of period $ 11,179 24,221
======= =======
<PAGE>
Supplemental disclosure of cash flow data:
Cash paid during the periods for:
Interest (net of amounts capitalized) $ 14,282 15,897
======= =======
Income taxes $ 13,790 8,550
======= =======
See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
GOLD KIST INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in Thousands)
(Unaudited)
1. The accompanying unaudited consolidated financial
statements reflect the accounts of Gold Kist Inc. and its
subsidiaries ("Gold Kist"). These consolidated financial
statements should be read in conjunction with Management's
Discussion and Analysis of Consolidated Results of
Operations and Financial Condition and the Notes to
Consolidated Financial Statements on pages 13 through 17
and pages 25 through 35, respectively, of Gold Kist's
Annual Report in the previously filed Form 10-K for the
year ended June 26, 1993.
2. In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments
(consisting of normal recurring accruals) necessary to
present fairly the financial position, the results of
operations, and the cash flows. All significant
intercompany balances and transactions have been
eliminated in consolidation. Results of operations for
interim periods are not necessarily indicative of results
for the entire year.
3. Inventories consist of the following:
Mar. 26, 1994 June 26, 1993
_____________ _____________
Merchandise for sale $ 79,299 57,147
Live poultry and hogs 71,842 63,616
Marketable products 24,512 22,751
Raw materials and supplies 30,504 30,990
_______ _______
$206,157 174,504
======= =======
4. Gold Kist has a 33% interest in Golden Peanut Company, a
Georgia general partnership. Gold Kist's investment in
the partnership was $19.8 million at March 26, 1994 and
$23.0 million at June 26, 1993.
Summarized income statement information of Golden Peanut
Company is shown below:
Three Months Ended Nine Months Ended
__________________ _________________
Mar. 26, Mar. 27, Mar. 26, Mar. 27,
1994 1993 1994 1993
_______ _______ ________ ________
Net sales and other
operating income $122,540 127,727 320,707 351,579
Costs and expenses 119,393 120,621 325,206 345,462
_______ _______ _______ _______
Net earnings (loss) $ 3,147 7,106 (4,499) 6,117
======= ====== ======= =======
<PAGE>
GOLD KIST INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(Amounts in Thousands)
(Unaudited)
5. The Association provides for Federal and state income taxes
currently payable, as well as for those deferred because of
timing differences between reporting income and expenses
for financial statement purposes and income and expenses
for tax purposes.
In February 1992, the Financial Accounting Standards Board
issued Statement 109, "Accounting for Income Taxes," (SFAS
109). SFAS 109 requires an asset and liability approach in
accounting and, therefore, required a change from the
deferred method the Association previously used. Under the
asset and liability method of SFAS 109, deferred tax assets
and liabilities are recognized for the future tax
consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or
settled. Under SFAS 109, the effect on deferred tax assets
and liabilities of a change in tax rates is recognized as
income or expense in the period that includes the enactment
date.
Effective June 27, 1993, the Association adopted SFAS 109
and reported the cumulative effect of that change in the
method of accounting for income taxes in the consolidated
statement of operations for the first quarter of fiscal
1994, which ended September 25, 1993.
Pursuant to the deferred method under Accounting Principles
Board Opinion 11, which was applied in fiscal 1993 and
prior years, deferred income taxes that were reported in
different years for financial reporting purposes and income
tax purposes were recognized for income and expense items
using the tax rate applicable for the year of the
calculation. Under the deferred method, deferred taxes
were not adjusted for subsequent changes in tax rates.
The cumulative effect of this change in accounting for
income taxes, which resulted in a tax benefit of $5.3
million, was determined as of June 27, 1993 and was
reflected in the consolidated financial statements for the
three months ended September 25, 1993. Prior years'
financial statements have not been restated to apply the
provisions of SFAS 109.
<PAGE>
GOLD KIST INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(Amounts in Thousands)
(Unaudited)
The provision for income tax expense consists of the
following:
Three Months Ended Nine Months Ended
Mar. 26, 1994 Mar. 26, 1994
__________________ _________________
Current expense:
Federal $ 204 8,367
State 267 1,185
____ ______
471 9,552
____ ______
Deferred expense (benefit):
Federal 286 (1,999)
State 32 (222)
____ ______
318 (2,221)
____ ______
Total $ 789 7,331
==== ======
The effective tax rate from operations for nine months
ended March 26, 1994 was 32.4%. A reconciliation of income
tax expense from operations at the expected Federal
statutory rate of 35% to actual tax expense from operations
for the applicable periods follows:
Three Months Nine Months
Ended Ended
Mar. 26, 1994 Mar. 26, 1994
_____________ _____________
Income taxes at Federal statutory rate $1,053 7,909
Cash portion of nonqualified patronage
refund (70) (415)
State income taxes, net of Federal
income tax benefit 215 647
Other, net (409) (810)
_____ _____
Total $ 789 7,331
===== =====
<PAGE>
GOLD KIST INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(Amounts in Thousands)
(Unaudited)
The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and
deferred tax liabilities at June 26, 1993 are as follows:
Deferred tax assets:
Postretirement benefits expense $12,347
Insurance accruals 7,347
Bad debt reserves 2,286
State tax operating loss carryforwards 1,708
Other 986
______
Total gross deferred tax assets 24,674
Less valuation allowance (1,708)
______
Net deferred tax assets 22,966
======
Deferred tax liabilities:
Accelerated depreciation (5,020)
Deferred compensation (4,088)
______
Total deferred tax liabilities (9,108)
______
Net deferred tax assets $13,858
======
The Association's management believes the existing net
deductible temporary differences comprising the total net
deferred tax assets will reverse during periods in which
the Association generates net taxable income.
6. In January 1993, three Alabama member patrons of Gold Kist
filed lawsuits in the nature of derivative actions against
Gold Kist and Golden Poultry Company, Inc., and certain
directors, officers and employees of the companies. The
lawsuits allege that the named officers, directors and
employees violated their fiduciary duties by creating
Golden Poultry Company, Inc. and Carolina Golden Products
Company (Golden Poultry), by permitting their continued
operations and by selling shares of Golden Poultry's common
stock to certain officers, directors and employees. Among
the remedies requested are the transfer of Golden Poultry's
operations to Gold Kist, as well as unspecified actual and
punitive damages. In March 1994, the Court certified the
litigation as a class action. Gold Kist intends to defend
the litigation vigorously.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF CONSOLIDATED RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
Net Sales Volume
The Association's net sales volume for the three and nine
month periods ended March 26, 1994 increased 16.3% and 11.4%,
respectively, as compared to the same periods a year ago. The
Poultry segment had net sales increases of 10.7% and 8.5%,
respectively, for the three and nine month periods ended March
26, 1994. The Poultry segment's sales increase for the
quarter ended March 26, 1994 was the result of a 4.5% increase
in average selling prices for broiler products and a 11.1%
increase in pounds of poultry sold as compared to the same
quarter a year ago. For the nine months ended March 26, 1994,
average selling prices for poultry products and pounds sold
were up 5.7% and 6.6%, respectively, over the comparable
periods a year ago. The impact of these factors on net sales
was partially offset by lower sales volume for non-poultry
food items and lower prices for market hogs. The increase in
broiler market prices during the current fiscal year has been
attributable to a more favorable supply-demand relationship
resulting from increased export sales, as well as the general
recovery of the U.S. economy.
Net sales volume in the Agri-Services segment for the three
and nine month periods ended March 26, 1994 increased 38.1%
and 23.7%, respectively, above the comparable periods last
fiscal year. The increases represented increased sales of
seed, fertilizer, chemicals and animal feeds through the
Association's retail store system, as well as wholesale sales
of these products to independent dealers and distributors.
Hot, dry weather conditions during the summer of 1993 damaged
pasture land, which resulted in increased sales of animal
feeds during the fall and winter months and contributed to
increased plantings necessary to reestablish damaged pastures
in the current quarter. In addition, increased sales during
the quarter ended March 26, 1994 were partially the result of
favorable weather conditions for agricultural planting
activity in the Southeast.
Net Operating Margins
The Association had net operating margins of $2.7 million and
$25.2 million, respectively, for the three and nine month
periods ended March 26, 1994 as compared to net operating
margins of $4.2 million and $15.4 million, respectively, in
the comparable periods a year ago. For the current three and
nine month periods, the Poultry segment had net operating
margins of $1.1 million and $33.5 million, respectively, as
compared to net operating margins of $5.2 million and $27.2
million, respectively, during the same periods last year. The
decline in operating margins for the quarter ended March 26,
1994 as compared to the same quarter last year was due
primarily to an 18.6% increase in feed ingredient costs. The
improvement in year-to-date operating margins was primarily
<PAGE>
the result of increased average selling prices, which were
partially offset by increased feed ingredient costs. As
discussed above, average selling prices for broiler products
in the current quarter were approximately 4.5% higher than in
the comparable quarter a year ago. For the nine months ended
March 26, 1994, feed ingredient costs were up about 8.3% from
the same period last year. The increase in feed ingredient
costs resulted from last summer's drought in the Southeast and
floods in the Midwest.
The Agri-Services segment had net operating margins of
approximately $3.2 million for the quarter ended March 26,
1994 as compared to $433,000 in the comparable period a year
ago. As a result of the increase in net sales volume, year-
to-date net operating losses were $3.6 million as compared to
$8.7 million in the year earlier period. Although net
operating losses for this segment in the current year were
less than in the same periods a year ago, lower gross margins
for fertilizer and chemical products in the current year
partially offset the impact of increased sales on net
operating margins.
Other Income (Deductions)
Interest income for the three and nine months ended March
26,1994 of approximately $1.0 million and $4.5 million,
respectively, decreased $315,000 and $1.0 million,
respectively, from the comparable periods last year as a
result of the reduction in loans carried by the Association's
financing subsidiary.
Interest expense for the three and nine month periods ended
March 26, 1994 decreased $871,000 and $3.3 million,
respectively, from the comparable periods last fiscal year
primarily as a result of lower average borrowings and to a
lesser extent, lower interest rates. Interest expense for the
nine months ended March 27, 1993 included $1.0 million related
to an income tax audit for the years 1987 through 1989.
The Association recorded a $1.1 million gain for the quarter
ended March 26, 1994, representing its prorata share of the
Golden Peanut Company's net earnings as compared to a gain of
$2.4 million in the same quarter last year. For the nine
months ended March 26, 1994, the Association recorded a $1.5
million loss as compared to a gain of $2.0 million in the
comparable period last year. The decline in Golden Peanut's
year-to-date net earnings was primarily the result of lower
market prices related to a large carryover peanut crop from
1992.
Miscellaneous, net was a $3.8 million gain for the nine months
ended March 26,1994 as compared to a gain of $6.3 million in
the same period last year. Miscellaneous, net for the nine
months ended March 26, 1994 and March 27, 1993 each include
$1.2 million representing the Association's equity in the
earnings of Alimenta Commodities Limited, a foreign trading
company. Also included in miscellaneous, net were patronage
refunds from other cooperatives, other dividends and rental
income, as well as other miscellaneous items. Patronage
refunds and other dividends for the nine months ended March
<PAGE>
1994 were $578,000 as compared to $2.4 million in the same
period last year. Rental income on leased facilities was $1.4
million for the nine months ended March 26,1994 as compared to
$1.3 million in the previous year.
Miscellaneous, net for the current year includes a $333,000
loss related to the Association's minority interest in a pecan
shelling and marketing operation.
Margins Before Income Taxes, Minority Interest and Cumulative
Effect of Change in Accounting Principle
For the three and nine month periods ended March 26, 1994, the
Association had margins before income taxes, minority interest
and cumulative effect of change in accounting principle of
$3.0 million and $22.6 million, respectively. This compared
to margins before minority interest and cumulative effect of
change in accounting principle of $7.4 million and $16.6
million, respectively, in the same periods a year ago. The
decline in margins for the current quarter as compared to a
year ago was primarily the result of increased broiler
production costs related to higher feed ingredient costs. The
improvement in year-to-date margin comparisons was due
primarily to higher market prices for broilers and lower
operating losses in the Agri-Services segment.
Cumulative Effect of Change in Accounting for Income Taxes
Effective June 27, 1993, the Association adopted SFAS 109
"Accounting for Income Taxes", which requires an asset and
liability approach in accounting for income taxes. As a
result of the adoption, the Association recorded a tax benefit
of $5.3 million during the first quarter ended September 25,
1993. (See Note 5 of Notes to Consolidated Financial
Statements).
LIQUIDITY AND CAPITAL RESOURCES
The Association's liquidity is dependent upon cash from
operations and external sources of financing. The principal
sources of external short-term financing are proceeds from the
continuous offering of Subordinated Loan Certificates, a
revolving credit facility with a group of banks, and
uncommitted lines of credit. At March 26, 1994, the
Association had unused available loan commitments to borrow
additional amounts of $32.7 million and additional uncommitted
facilities to provide loans and letters of credit of
approximately $130.2 million. The primary sources of external
long-term financing are a note agreement with an insurance
company and proceeds from the continuous offering of
Subordinated Capital Certificates of Interest.
Covenants under the terms of loan agreements with lenders
include conditions that could limit the short-term and long-
term funds available from various external sources. The
Association was in compliance with all applicable conditions
in loan agreements with all lenders at March 26, 1994.
<PAGE>
Working capital and the current ratio were $145.8 million and
1.67 to 1, respectively, at March 26, 1994, as compared to
$140.6 million and 1.70 to 1, respectively, at June 26, 1993.
Patrons' equity at March 26, 1994 was $291.6 million as
compared to $285.6 million at June 26, 1993. The increase was
primarily the result of net margins of approximately $20.0
million, which included a $5.3 million benefit associated with
an accounting change for income taxes (see Note 5 of Notes to
Consolidated Financial Statements). Cash and cash equivalents
during the current fiscal year decreased $19.9 million to
$11.2 million at March 26, 1994. The decrease was primarily
the result of expenditures for the acquisition of property,
plant and equipment, patronage distributions, and repayments
of long-term debt, which was partially offset by net cash
provided by operations of $27.1 million.
For the nine month period ended March 26, 1994, the
Association's investment activities included $29.0 million in
expenditures for property, plant and equipment, which were
primarily related to expansion and improvements in the poultry
operations. The Association, including its non-cooperative
subsidiaries, plans fiscal 1994 capital expenditures of
approximately $44.0 million. For fiscal 1995, the Association
has $64.0 million budgeted for capital expenditures. These
planned capital expenditures include expansion and
technological advances in poultry production and processing,
as well as other facility improvements and necessary
replacements.
During the nine month period ended March 26, 1994, the
Association had cash payments totaling $21.5 million for
patronage refunds and other equity payments. These payments
included $10.2 million representing the redemption of
Revolving Fund and Cumulative Preferred Certificates. The
Association believes cash and cash equivalents on hand at
March 26, 1994 and cash expected to be provided from
operations, in addition to proceeds from the sale of
Subordinated Capital Certificates of Interest and borrowings
available under existing credit arrangements, will be
sufficient to maintain cash flows adequate for the
Association's projected growth and operational objectives
during fiscal 1994.
<PAGE>
PART II: OTHER INFORMATION
Item 3. Legal Proceedings.
In January 1993, Alabama member patrons of Gold Kist
filed a lawsuit in the Circuit Court of Jefferson County,
Alabama, Tenth Judicial Circuit, against the Association and
Golden Poultry Company, Inc. and certain directors, officers
and employees of the companies (Ronald Pete Windham and
Windham Enterprises, Inc. on their behalf and on behalf of
and for the use and benefit of Gold Kist, Inc. and its
shareholders/members v. Harold O. Chitwood, individually and
in his capacity as an officer of Gold Kist and a Director of
Golden Poultry; et al.). The lawsuit alleges that the named
officers, directors and employees violated their fiduciary
duties by diverting corporate opportunities from Gold Kist
to Golden Poultry Company, Inc. and Carolina Golden Products
Company in connection with the creation of Golden Poultry
Company, Inc. and Carolina Golden Products Company, by
permitting their continued operations and by selling shares
of Golden Poultry common stock to certain officers,
directors and employees of the Association and Golden
Poultry. Among the remedies requested are the transfer of
Golden Poultry operations to Gold Kist as well as
unspecified actual and punitive damages. In March 1994, the
Court certified the litigation as a class action. The
Association intends to defend the litigation vigorously.
Item 6. Exhibits and Reports on Form 8-K.
(b) Reports on Form 8-K. Gold Kist has not filed any
reports on Form 8-K during the three months ended
March 26, 1994.
SIGNATURES
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.
GOLD KIST INC.
(Registrant)
Date May 9, 1994
Peter J. Gibbons
Vice President, Finance
(Chief Financial Officer)
Date May 9, 1994
W. F. Pohl, Jr.
Controller
(Chief Accounting Officer)
<PAGE>
PART II: OTHER INFORMATION
Item 3. Legal Proceedings.
In January 1993, Alabama member patrons of Gold Kist
filed a lawsuit in the Circuit Court of Jefferson County,
Alabama, Tenth Judicial Circuit, against the Association
and Golden Poultry Company, Inc. and certain directors,
officers and employees of the companies (Ronald Pete
Windham and Windham Enterprises, Inc. on their behalf and
on behalf of and for the use and benefit of Gold Kist, Inc.
and its shareholders/members v. Harold O. Chitwood,
individually and in his capacity as an officer of Gold Kist
and a Director of Golden Poultry; et al.). The lawsuit
alleges that the named officers, directors and employees
violated their fiduciary duties by diverting corporate
opportunities from Gold Kist to Golden Poultry Company,
Inc. and Carolina Golden Products Company in connection
with the creation of Golden Poultry Company, Inc. and
Carolina Golden Products Company, by permitting their
continued operations and by selling shares of Golden
Poultry common stock to certain officers, directors and
employees of the Association and Golden Poultry. Among the
remedies requested are the transfer of Golden Poultry
operations to Gold Kist as well as unspecified actual and
punitive damages. In March 1994, the Court certified the
litigation as a class action. The Association intends to
defend the litigation vigorously.
Item 6. Exhibits and Reports on Form 8-K.
(b) Reports on Form 8-K. Gold Kist has not filed any
reports on Form 8-K during the three months ended
March 26, 1994.
SIGNATURES
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.
GOLD KIST INC.
(Registrant)
Date May 9, 1994 /s/ Peter J. Gibbons
Peter J. Gibbons
Vice President, Finance
(Chief Financial Officer)
Date May 9, 1994 /s/ W. F. Pohl, Jr.
W. F. Pohl, Jr.
Controller
(Chief Accounting Officer)
<PAGE>
