<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
--------------
FORM 10-Q
Quarterly Report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended January 26, 1997
Commission File Number 0-22252
CATTLEMAN's, INC.
{Exact name of registrant as specified in its charter)
----------------
Delaware 38-3012740
(State or other jurisdiction (IRS. Employer
of incorporation or organization) Identification Number)
1825 Scott Street
Detroit, Michigan 48207
(Address of executive offices) (Zip Code)
Company's telephone number, including area code: (313) 833 - 2700
------------------
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 twelve months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
requirements for the past 90 days.
YES X NO
---- -----
Indicate the number of share outstanding of each of the Registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding at March 5, 1997
----- ----------------------------
Common stock, $.001 per share 3,577,580
<PAGE> 2
Part 1: Financial Information
Cattleman's, Inc.
Item 1 Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)
($ in Thousands)
<TABLE>
<CAPTION>
JANUARY 26, 1997 APRIL 28, 1996
<S> <C> <C>
ASSETS
Current Assets
Cash $ 316 $ 738
Accounts Receivable 4,494 4,700
Inventory - Finished Goods 3,089 4,798
Inventory - Supplies 174 202
Prepaids 836 580
Income Tax Refundable 134 334
Deferred Income Taxes 13 113
--------- ----------
Current Assets 9,056 11,464
Property, Plant & Equipment 11,627 11,038
Accumulated Depreciation (5,820) (4,984)
--------- ----------
Net 5,807 6,054
Other Assets
Goodwill 312 329
Loans receivable, officers 290 295
Other 226 226
--------- ----------
Other Assets 828 850
$ 15,691 $ 18,368
========= ==========
LIABILITIES
Accounts Payable $ 3,391 $ 4,220
Accrued Expenses 1,110 876
Current Portion, long-term debt 96 637
--------- ----------
Current Liabilities 4,597 5,733
Long-term Debt 5,384 7,416
Deferred Income Tax 193 181
--------- ----------
5,577 7,597
Total Liabilities 10,174 13,330
EQUITY
Capital 721 794
Retained Earnings 4,796 4,244
--------- ----------
5,517 5,038
$ 15,691 $ 18,368
========= ==========
</TABLE>
The accompanying notes are an integral part of the consolidated statements.
<PAGE> 3
Cattleman's, Inc.
Item 1 Financial Statements
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
($ in thousands except per share data)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
JANUARY 26, 1997 JANUARY 28, 1996 JANUARY 26, 1997 JANUARY 28, 1996
<S> <C> <C> <C> <C> <C>
Sales $ 26,367 100.0% $ 29,942 100.0% $ 91,966 100.0% $ 95,205 100.0%
Cost of Goods Sold 25,143 95.4% 28,722 95.9% 87,166 94.8% 90,619 95.2%
Selling, General & Admin. 1,003 3.8% 1,206 4.0% 3,394 3.7% 3,470 3.6%
------------------ ----------------- ----------------- -----------------
Earnings From Operations 221 0.8% 14 0.0% 1,406 1.5% 1,116 1.2%
Interest 109 0.4% 163 0.5% 459 0.5% 451 0.5%
------------------ ----------------- ----------------- -----------------
Income Before Taxes 112 0.4% (149) -0.5% 947 1.0% 665 0.7%
Income Tax 40 0.2% (54) -0.2% 397 0.4% 210 0.2%
------------------ ----------------- ----------------- -----------------
Net Earnings $ 72 0.3% $ (95) -0.3% $ 550 0.6% $ 455 0.5%
================== ================= ================= =================
Earnings Per Share $ 0.02 ($0.03) $ 0.16 $ 0.14
========== ========= ========= =========
Average Shares Outstanding 3,487,682 3,291,583 3,487,682 3,291,583
========== ========= ========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated statements.
<PAGE> 4
Cattleman's, Inc.
Item 1 Financial Statements
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
($ in Thousands) THIRTY-NINE WEEKS ENDED
JANUARY 26, 1997 JANUARY 28, 1996
<S> <C> <C>
CASH FLOW FROM OPERATIONS $ 2,809 $ (111)
INVESTING ACTIVITIES
Capital Expenditures & Other (584) (505)
FINANCING ACTIVITIES
Net Repayments on debt (2,647) (427)
Change in Cash (422) (1,043)
Beginning Cash 738 1,148
------------ -----------
Ending Cash $ 316 $ 105
============ ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 459 $ 451
============ ===========
Income Taxes $ 0 $ 210
============ ===========
</TABLE>
The accompanying notes are an integral part of the consolidated statements.
<PAGE> 5
CATTLEMAN's, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements of Cattleman's, Inc.
("Cattleman's") have been prepared in accordance with the instructions for Form
10-Q and are unaudited. The statements include all adjustments (consisting of
normal recurring accruals) which Cattleman's considers necessary for a fair
presentation of the interim periods. The accounting policies followed by the
Cattleman's and additional footnotes, are included in the Cattleman's fiscal
year 1996 annual report on Form 10-K.
This 10-Q is written with the presumption that the users of the interim
financial statements have read or have access to Cattleman's Form 10-K, which
contains the latest audited financial statements and notes thereto, together
with Management's Discussion and Analysis of Financial Condition and Results of
Operations as of April 28, 1996 and for the year then ended. Only material
changes in financial condition and results of operations are discussed in the
remainder of Part I.
Cattleman's interim operating results may be subject to substantial
fluctuations which do not necessarily occur or recur on a seasonal basis. Such
fluctuations are normally caused by competitive and other conditions in the
cattle and boxed beef markets over which Cattleman's has little or no control.
Therefore, the results of operations for the interim periods presented are not
necessarily indicative of the results to be attained for the full fiscal year.
2. COMMITMENTS AND CONTINGENCIES
Cattleman's is involved in various disputes incident to the ordinary course of
its business. In the opinion of management, any liability for which provision
has not been made relative to the various lawsuits, claims or administrative
proceedings pending against Cattleman's should not have a material adverse
effect on its financial position.
<PAGE> 6
CATTLEMAN's, INC.
ITEM 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations - Second Quarter - Fiscal 1997
COMPARISON OF THIRTEEN WEEKS ENDED JANUARY 26, 1997 TO THIRTEEN WEEKS ENDED
JANUARY 28, 1996
RESULTS OF OPERATIONS
Sales for the thirteen weeks ended January 26, 1997 and January 28, 1996 were
$26,367,000 and $29,942,000 respectively. Sales decreased $3,575,000 or 11.9%
when compared to the same period in the prior year. The reduction in sales
resulted from a decrease in the market supply of available gross tonnage
products. Retail sales represented 16.8% of total sales for this period
compared to 16.6% for the same period of fiscal 1996.
Cost of Goods Sold for the thirteen weeks ended January 26, 1997 and January
28, 1996 were $25,143,000 and $28,722,000 respectively, a decrease of
$3,579,000. This represents 95.4% and 95.9% of sales for the respective
periods. The margin improvement resulted primarily from enhanced yields in the
processing operation.
Selling, General and Administrative Expenses for the thirteen weeks ended
January 26, 1997 and January 28, 1996 were $1,003,000 and $1,206,000,
respectively. The decrease resulted primarily from a concerted effort by
management on a variety of cost cutting projects.
Interest expense totaled $109,000 for the thirteen weeks ended January 26,
1997, down from $163,000 for the thirteen weeks ended January 28, 1996. The
decrease resulted from a lower use of the revolving line of credit throughout
the period for slightly lower average accounts receivable levels and from lower
inventory purchases during the thirteen weeks end January 26,1997.
Additionally, interest rates remained unchanged for the thirteen weeks ended
January 26, 1997 compared to the thirteen weeks ended January 28, 1996.
Net Income for the thirteen weeks ended January 26, 1997 totaled $72,000
compared with net losses of ($95,000) for the thirteen weeks ended January 28,
1996. The $167,000 increase resulted primarily from reductions in Selling,
General and Administrative costs.
<PAGE> 7
COMPARISON OF THIRTY-NINE WEEKS ENDED JANUARY 26, 1997 TO THIRTY-NINE WEEKS
ENDED OCTOBER 29, 1995
RESULTS OF OPERATIONS
Sales for the thirty-nine weeks ended January 26, 1997 and January 28, 1996
were $91,966,000 and $95,205,000 respectively. Sales decreased $3,239,000 or
3.4%. The decreased sales resulted primarily from a decrease in gross tonnage
of products sold compared to the same period in the prior year. Retail sales
represented 17.4% of total sales for this period compared to 17.2% for the
same period of fiscal 1996.
Cost of Goods Sold for the thirty-nine weeks ended January 26, 1997 and
January 28, 1996 were $87,166,000 and $90,619,000 respectively, a decrease of
$3,453,000. This represents 94.8% and 95.2% of sales for the respective
periods. The margin increase resulted primarily from enhanced yields in the
processing operation.
Selling, General and Administrative Expenses for the thirty-nine weeks ended
January 26, 1997 and January 28, 1996 were $3,394,000 and $3,470,000,
respectively. The $76,000 decrease in costs resulted primarily from a
concerted effort by management on a variety of cost cutting projects.
Interest expense totaled $459,000 for the thirty-nine weeks ended January 26,
1997, up from $451,000 for the thirty-nine weeks ended January 28, 1996.
Interest rates remained unchanged for the thirty-nine weeks ended January 26,
1997 compared to the thirty-nine weeks ended January 28, 1996.
Net Income for the thirty-nine weeks ended January 26, 1997 totaled $550,000
compared with net earnings of $455,000 for the thirty-nine weeks ended January
28, 1996. The $95,000 increase resulted primarily from slightly higher
margins in processing and retail operations.
<PAGE> 8
FINANCIAL CONDITION
Cash Provided From Operations for the thirty-nine weeks ended January 26,
1997, totaled $2,809,000. This was generated mainly from net income before
depreciation ($ 1.5 million), decreases in inventory ($1.7 million), decreases
in net tax assets ($ .3 million), and decreases in accounts receivable ($.2
million). These were offset by decreases in accounts payable and accrued
liabilities ($ .6 million) and increases in prepaids ($ .3 million). Cash used
from operations in the thirty-nine weeks ended January 28, 1996 totaled $
111,000 million.
Investing Activity for the thirty-nine weeks ending January 26, 1997 and
January 28, 1996 was $584,000 and $505,000 respectively. Funds were used
primarily for improvements to and equipment in the processing plant.
Financing Activity During October 1996, Cattleman's obtained new financing
with a financial institution. The long term financing provided $2.4 million
and extended the maturity by 15 years. Proceeds from the $2.4 million was used
to paydown long term debt. Additionally, cash provided by operations of $.24
million further repaid borrowings on the line of credit.
<PAGE> 9
PART II. Other Information
CATTLEMAN's, INC.
ITEM 1. LEGAL PROCEEDINGS
None material
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
Cattleman's intends to buy back shares of Cattleman's stock in upcoming
quarters.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8 - K
None
<PAGE> 10
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Quarterly Report on Form 10 - Q for the
thirteen weeks ended January 26, 1997 to be signed on its behalf by the
undersigned thereunto duly authorized.
CATTLEMAN's, INC.
DATE: March 12, 1997 Markus Rohtbart
--------------- -----------------------
Markus Rohtbart
Chairman of the Board & Treasurer
Matthew G. Martin
-----------------------
Matthew G. Martin
Chief Financial and Operating
Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-28-1996
<PERIOD-START> APR-29-1996
<PERIOD-END> JAN-26-1997
<CASH> 316
<SECURITIES> 0
<RECEIVABLES> 4,494
<ALLOWANCES> 0
<INVENTORY> 3,263
<CURRENT-ASSETS> 9,056
<PP&E> 11,627
<DEPRECIATION> 5,820
<TOTAL-ASSETS> 15,691
<CURRENT-LIABILITIES> 4,597
<BONDS> 5,577
0
0
<COMMON> 3,487
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 15,691
<SALES> 91,966
<TOTAL-REVENUES> 91,966
<CGS> 87,166
<TOTAL-COSTS> 87,166
<OTHER-EXPENSES> 3,394
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 459
<INCOME-PRETAX> 947
<INCOME-TAX> 397
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 550
<EPS-PRIMARY> .16
<EPS-DILUTED> 0
</TABLE>
