ATLANTA, Feb. 8, 2011 /PRNewswire/ -- Cagle's, Inc. today reported a net (loss) of $(2.2) million, or $(0.46) per share, on net sales of $72.0 million for the third quarter ended January 1, 2011. For the comparable quarter a year ago the company reported a net (loss) of $(0.3) million, or $(0.08) per share, on net sales of $70.4 million.
Net sales for the third quarter were up 2.2% versus the prior year third quarter reflecting an 11.9% increase in pounds sold and a reduction in sales price per pound of 6.9 cents. Quoted market prices of products for the third quarter of fiscal 2011 versus the same period last year were mixed: boneless breast increased 4.8%, tenders decreased 4.5%, wings decreased 20.8%, drums decreased 22.8%, leg quarters increased 7.7%, and whole birds without giblets were quoted 26.2% higher. Discounting from these quoted markets was prevalent especially towards the end of the quarter, as our industry increased production in excess of 4% as reported by USDA increased egg sets and chick placements.
Cost of sales for the third quarter of fiscal 2011 of $71.2 million increased 6.3% as compared to prior year third quarter, reflecting an increase of pounds processed of 10.6% largely influenced by the gain in the bird size processed at our Pine Mountain Valley facility. Feed ingredient prices for broilers processed in the third quarter of fiscal 2011, which represented 39% of the total cost of sales, increased 18.6% as compared to the third quarter of fiscal 2010.
Feed ingredient prices continue to challenge our company and industry, as we experienced a 30% increase in the price of corn coupled with a 22% increase in the price of soybean meal since the start of our third quarter. The increases comes as our farmers have delivered their third largest corn crop ever of which 40% is now being used to generate ethanol as mandated and subsidized by our government. Our farmers produced the second largest soybean crop in our history. As influenced by current fiscal policy, our dollar is worth less and less on the world market which is supportive of increasing exports of this critical feed ingredient resulting in the lowest stocks-to-use ratio of soybean since the mid-1960's.
Entering into our fourth quarter our industry has shown restraint with current egg sets now close to equal those of last year. Competing protein prices are heading to record highs as the consumer is beginning to feel the impact of higher feed cost. In our third quarter, Cagle's began a 20% cut back in production at our deboning operation in an effort to balance supply and demand. We are optimistic that our industry will exhibit the production restraint necessary to support higher pricing for our products allowing for return to profitable margins.
For the first thirty-nine weeks of fiscal 2011, the company reported net income of $4.4 million, or $0.96 per share, on net sales of $233.7 million. For the comparable period of fiscal 2010, which was a forty week period, the company reported net income of $1.6 million, or $0.35 per share, on net sales of $236.0 million.
Cagle's, Inc. /s/ J. Douglas Cagle -------------------- J. Douglas Cagle Chairman, Chief Executive Officer and President
This press release contains forward-looking statements based on management's current views and assumptions. Actual results and events may differ. For a discussion of these matters, please refer to the "Forward-Looking Statements" in Item 7 of the Company's 2010 Annual Report on Form 10-K and please refer to the cautionary statement found in Management's Discussion and Analysis of Financial Condition and Results of Operations in Part I, Item 2 of the Quarterly Report on Form 10-Q for the Company's second quarter ended October 2, 2010.
Cagle's, Inc. Condensed Consolidated Statements of Operations (Unaudited) (In Thousands, except per Common Share data) 13 wks ended 13 wks ended 39 wks ended 40 wks ended 01/01/2011 01/02/2010 01/01/2011 01/02/2010 ---------- ---------- ---------- ---------- $71,977 $70,411 $233,725 $235,996 ------- ------- -------- -------- Net Sales Costs and Expenses: Cost of Sales 71,178 66,943 212,926 220,470 Selling and Delivery 2,593 2,124 7,695 6,596 General and Administrative 744 1,498 4,698 5,148 --- ----- ----- ----- Total Costs and Expenses 74,515 70,565 225,319 232,214 ------ ------ ------- ------- Operating Income (Loss) (2,538) (154) 8,406 3,782 Other Income (Expense): Interest Expense (318) (393) (1,037) (1,250) Other Income (Expense), Net 49 9 87 14 --- --- --- --- Total Other Income (Expense), Net (269) (384) (950) (1,236) ---- ---- ---- ------ Income (Loss) Before Income Taxes (2,807) (538) 7,456 2,546 Income Tax Expense (Benefit) (657) (193) 3,038 917 ---- ---- ----- --- Net Income (Loss) $(2,150) $(345) $4,418 $1,629 ======= ===== ====== ====== Weighted-Average Common Shares Outstanding 4,616 4,616 4,616 4,617 ===== ===== ===== ===== $(0.46) $(0.08) $0.96 $0.35 Net Income (Loss) Per Common Share ====== ====== ===== ===== Cagle's, Inc. Condensed Consolidated Balance Sheets (In Thousands) January 1, 2011 April 3, 2010 ----------- ------------- ASSETS (Unaudited) ------ Cash $1,906 $1,872 Trade Accounts Receivable, net 15,001 15,769 Inventories 31,926 26,065 Other Current Assets 598 305 --- Total Current Assets 49,431 44,011 Property, Plant, and Equipment, net 34,537 34,869 Other Assets 5,566 8,739 ----- ----- TOTAL ASSETS $89,534 $87,619 ------- ------- LIABILITIES & STOCKHOLDERS' EQUITY ---------------------------------- Current Maturities of Long-term Debt $2,848 $2,685 Accounts Payable 16,940 16,142 Other Current Liabilities 8,118 8,424 ----- ----- Total Current Liabilities 27,906 27,251 Long-Term Debt 21,875 25,033 Total Stockholders' Equity 39,753 35,335 ------ ------ TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $89,534 $87,619 ------- -------
Cagle's, Inc.
CONTACT: Harry Woodring, +1-404-355-2820
Web Site: http://www.cagles.net/
