EX-99 2 ex99.htm EX99 Cagle's, Inc


Cagle's, Inc. & Subsidiary

Unaudited Pro Forma Condensed Consolidated Financial Statements


The accompanying unaudited pro forma condensed consolidated financial statements present financial information to give effect of the sale of the Company’s thirty percent (30%) interest in Cagle’s-Keystone Foods LLC. The unaudited pro forma condensed consolidated statements of operations present the consolidated results of continuing operations of the Company, assuming the sale occurred as of April 2, 2005. The unaudited pro forma condensed consolidated balance sheet as of July 1, 2006 presents the consolidated financial position of the Company, assuming the sale occurred on that date. The unaudited financial information is subject to the assumptions and adjustments in the notes accompanying the unaudited pro forma condensed consolidated financial statements.


The unaudited pro forma condensed consolidated financial statements include specific assumptions and adjustments related to the sale of the joint venture. The adjustments are based upon presently available information and assumptions that management believes are reasonable under the circumstances as of the date of this filing. However, actual adjustments may differ materially from the information presented. The unaudited pro forma condensed consolidated financial statements, including notes thereto, should be read in conjunction with the historical consolidated financial statements of the Company included in its Annual Report on Form 10-K for the year ended April 1, 2006 and the unaudited condensed consolidated financial statements filed in its Quarterly Report on Form 10-Q for the 13 weeks ended July 1, 2006.


The unaudited pro forma condensed consolidated financial information presented is for informational purposes only. It is not intended to represent or be indicative of the consolidated results of operations or financial position that would have occurred had the sale been completed as of the dates presented nor is it intended to be indicative of future results of operations or financial position.





 

 

Cagle's, Inc. & Subsidiary

        

Pro Forma Condensed Consolidated Statements of Operations

      

For the 13 wks ended July 01, 2006

        

(Unaudited)

        

(In Thousands, except per share data)

        
    

Discontinued

    
  

As Reported

 

Operations

 

Adjustments

 

Pro Forma

         

Net sales

 

 $          54,277

 

 $                       -

 

 $                      -

 

 $         54,277

         

Costs and expenses:

        

Cost of sales

 

             54,130

 

                          -

 

                         -

 

            54,130

Selling and delivery

 

               1,953

 

                          -

 

                         -

 

              1,953

General and administrative

 

              1,314

 

                     208

a

                         -

 

              1,522

Total costs and expenses

 

             57,397

 

                     208

 

                         -

 

            57,605

         

Loss from operations

 

             (3,120)

 

                   (208)

 

                         -

 

            (3,328)

         

Other income (expense):

        

Interest expense

 

                (692)

 

                          -

 

                    273

b

               (419)

Other income, net

 

                 118

 

                          -

 

                    134

b

                 252

         

Loss before equity in earnings of

        

unconsolidated affiliates and income taxes

 

             (3,694)

 

                   (208)

 

                    407

 

            (3,495)

         

Equity in earnings of unconsolidated affiliates

 

                  941

 

                   (941)

a

                         -

 

                     -

         

Loss before income taxes

 

             (2,753)

 

                (1,149)

 

                    407

 

            (3,495)

         

Income taxes benefit

 

                (991)

 

               (414)

a

                147

c

        (1,258)

  

 

 

 

 

 

 

 

Net loss

 

 $          (1,762)

 

 $                (735)

 

 $                 260

 

 $         (2,237)

         

Weighted average shares outstanding

        

-Basic

 

4,743

 

4,743

 

4,743

 

4,743

-Diluted

 

4,743

 

4,743

 

4,743

 

4,743

         

Net loss per common share

        

-Basic

 

 $            (0.37)

 

 $               (0.15)

 

 $                0.05

 

 $           (0.47)

-Diluted

 

 $            (0.37)

 

 $               (0.15)

 

 $                0.05

 

 $           (0.47)





 

Cagle's, Inc. & Subsidiary

        

Pro Forma Condensed Consolidated Statements of Operations

      

For the Year Ended April 1, 2006

        

(Unaudited)

        

(In Thousands, except per share data)

        
    

Discontinued

    
  

As Reported

 

Operations

 

Adjustments

 

Pro Forma

         

Net sales

 

 $         237,266

 

 $                    -

 

 $                   -

 

 $    237,266

         

Costs and expenses:

        

Cost of sales

 

          227,136

 

                      -

 

                     -

 

      227,136

Selling and delivery

 

               7,314

 

                      -

 

                     -

 

          7,314

General and administrative

 

              6,468

 

                 818

a

                     -

 

           7,286

Total costs and expenses

 

           240,918

 

                818

 

                    -

 

     241,736

         

Loss from operations

 

             (3,652)

 

              (818)

 

                    -

 

        (4,470)

         

Other income (expense):

        

Interest expense

 

              (2,407)

 

                     -

 

                628

b

        (1,779)

Other income, net

 

              1,238

 

                     -

 

               781

b

          2,019

         

Loss before equity in earnings of

        

unconsolidated affiliates and income taxes

 

             (4,821)

 

               (818)

 

             1,409

 

        (4,230)

         

Equity in earnings of unconsolidated affiliates

 

           3,957

 

            (3,957)

a

-

 

-

         

Loss before income taxes

 

                 (864)

 

            (4,775)

 

             1,409

 

        (4,230)

         

Income taxes benefit

 

                (290)

 

           (1,719)

a

               507

c

        (1,502)

  

 

 

 

 

 

 

 

Net loss

 

 $              (574)

 

 $         (3,056)

 

 $              902

 

 $     (2,728)

         

Weighted average shares outstanding

        

-Basic

 

4,743

 

4,743

 

4,743

 

4,743

-Diluted

 

4,743

 

4,743

 

4,743

 

4,743

         

Net loss per common share

        

-Basic

 

 $             (0.12)

 

 $           (0.64)

 

 $             0.19

 

 $       (0.58)

-Diluted

 

 $             (0.12)

 

 $           (0.64)

 

 $             0.19

 

 $       (0.58)





Cagle's, Inc. & Subsidiary

      

Pro Forma Condensed Consolidated Balance Sheets

      

July 1, 2006

      

(Unaudited)

      

(In Thousands, Except Par Values)

      
  

July 1, 2006

 

Adjustments

 

Pro Forma

ASSETS

      

Current assets

      

Cash and cash equivalents

 

 $                     1,071

 

 $         13,392

b

 $         14,463

Trade accounts receivable, less allowance for doubtful accounts

                      11,254

 

-

 

11,254

Inventories

 

                      19,923

 

-

 

19,923

Refundable income taxes, current portion

 

                           784

 

-

 

784

Other current assets

 

                        1,386

 

-

 

1,386

Total current assets

 

                      34,418

 

13,392

 

47,810

       

Investments in and receivables from unconsolidated affiliates

                        9,363

 

(9,357)

b

6

       

Property, plant and equipment, at cost

      

Land

 

                        1,976

 

-

 

1,976

Buildings and improvements

 

                      58,940

 

-

 

58,940

Machinery, furniture and equipment

 

                      38,904

 

-

 

38,904

Vehicles

 

                        4,523

 

-

 

4,523

Construction in progress

 

                             58

 

-

 

58

  

                    104,401

 

-

 

104,401

Less accumulated depreciation

 

                      61,876

 

 

 

61,876

Property, plant and equipment, net

 

                      42,525

 

-

 

42,525

       

Other assets

      

Long-term refundable income taxes

 

                           607

 

                      -

 

                 607

Deferred income taxes

 

                        6,711

 

(6,675)

c

                   36

Deferred financing costs, net

 

                           251

 

                (102)

b

                 149

Other assets

 

                        2,750

 

- 

 

2,750

Total other assets

 

                      10,319

 

(6,777)

 

3,542

Total assets

 

 $                   96,625

 

 $          (2,742)

 

 $         93,883

       

LIABILITIES AND STOCKHOLDERS' EQUITY

      

Current liabilities

      

Current maturities of long-term debt   

 

 $                     3,689

 

 $          (1,400)

b

 $           2,289

Accounts payable  

 

                      11,401

 

                      -

 

11,401

Accrued expenses  

 

                        4,635

 

                      -

 

4,635

Deferred income taxes

 

                        1,655

 

                      -

 

1,655

Total current liabilities  

 

                      21,380

 

             (1,400)

 

            19,980

       

Long-term debt  

 

                      31,775

 

            (13,208)

b

            18,567

       

STOCKHOLDERS' EQUITY

      

Preferred stock, $1 par value; 1,000 shares authorized, none issued

                                -

 

                      -

 

                      -

Common stock, $1 par value; 9,000 shares authorized, 4,744

    

  shares issued and outstanding

 

                        4,744

 

                      -

 

4,744

Treasury stock, at cost

 

                            (80)

 

                      -

 

(80)

Additional paid-in capital

 

                        4,198

 

                      -

 

4,198

Retained earnings

 

                      34,608

 

11,866

 

46,474

Total stockholders' equity

 

                      43,470

 

11,866

 

55,336

Total liabilities and stockholders' equity

 

 $                   96,625

 

 $          (2,742)

 

 $         93,883











Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements


The unaudited pro forma condensed consolidated financial statements give effect to the sale of the Company’s thirty percent (30%) interest in Cagle’s-Keystone Foods LLC. The unaudited pro forma condensed consolidated statements of operations are presented as if the sale occurred as of April 2, 2005. The anticipated nonrecurring after-tax gain on the sale is not reflected in the pro forma condensed consolidated statements of operations. The impact of the anticipated use of proceeds to be invested in interest bearing facilities is included in the unaudited pro forma condensed consolidated statements of operations for the 13 week period ended July 1, 2006, and the year ended April 1, 2006. The unaudited pro forma condensed consolidated balance sheet is presented as if the sale occurred on July 1, 2006, and is based on the historical condensed consolidated balance sheet as of that date. The nonrecurring after-tax gain is reflected in the pro forma condensed consolidated balance sheet.


A

The Discontinued Operations columns in the unaudited pro forma condensed consolidated statements of operations

             represent the historical financial results of the Company’s thirty percent (30%) interest in Cagle’s-Keystone Foods LLC.

             This includes the Company’s equity in earnings of the unconsolidated affiliate, net of taxes, and management fees

             received from Cagle’s-Keystone foods LLC, net of taxes.


B

The Pro Forma Adjustments columns in the unaudited pro forma condensed consolidated financial statements

             represent the anticipated net cash proceeds from the sale and the intended use of the proceeds, elimination of the

             investment in Cagle’s-Keystone Foods LLC, anticipated excess cash for investment and related interest income, and

             the anticipated interest expense reduction as a result of the use of the proceeds.


C

The Pro Forma Adjustments columns in the unaudited pro forma condensed consolidated financial statements

             represent the anticipated income tax effects associated with the sale.