Cagle's, Inc. Announces Results for the Second Quarter Ended October 2, 2010

ATLANTA, Nov. 9, 2010 /PRNewswire-FirstCall/ -- Cagle's, Inc. (Amex: CGL.A) today reported net income of $3.1 million or $0.67 per share, on net sales of $83.2 million for the second quarter ended October 2, 2010. For the comparable quarter a year ago, which was a fourteen week period, the company reported net income of $0.7 million, or $0.15 per share, on net sales of $87.6 million.

Net sales for the second quarter were up 2.3% or $.035 per pound, versus the fourteen week prior year second quarter adjusted to reflect a thirteen week period, as we experienced a 19% increase in boneless breast and tenders production reflecting the successful transition of our Pine Mountain Valley plant to a deboning facility. Quoted market prices of products for the second quarter of fiscal 2011 versus the same period last year were mixed as boneless breast and tenders increased 23.9%, wings decreased 13.0%, drums decreased 21.0%, leg quarters were 7.5% lower, and whole birds without giblets were quoted 30.7% higher.

Cost of sales for the second quarter of fiscal 2011 of $73.5 decreased 3.2% as compared to the fourteen week prior year second quarter adjusted to reflect a thirteen week period. Operational efficiencies improved supported by larger bird size at our Pine Mountain facility with a second quarter production volume increase of 5.5% and a year to date increase of 7.5% both as compared to adjusted 13 week and 26 week periods of fiscal 2010. Feed ingredient prices for broilers processed in the second quarter of fiscal 2011, which represented 38% of the total cost of sales, decreased 6.0% as compared to the second quarter of fiscal 2010.

As we continue the ongoing transformation of our Pine Mountain Valley operation we are focusing on yield improvements and cost control to maximize our margins as well as providing higher utilization of assets already in place. Over the next two years we expect to more than double our Pine Mountain production, when compared to volumes reflected in fiscal 2010 results, providing operational efficiencies throughout all phases of our company.  Our Collinsville facility continues to expand its value added customer base in the fast food and grocery deli business and is running at better than 100% capacity.

With reduced availability of competing protein we are cautiously optimistic for the remainder of this fiscal year. Recent increases of grain cost will stress margins for all protein producers but chicken remains an excellent cost effective choice for consumers.

For the first two quarters of fiscal 2011, the company reported net income of $6.6 million or $1.42 per share, on net sales of $161.7 million. For the comparable period of fiscal 2010, which was a twenty seven week period, the company reported net income of $2.0 million, or $0.43 per share, on net sales of $165.6 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 first quarter ended July 3, 2010.

Cagle's, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In Thousands, except net income per share)
	13 wks ended	14 wks ended	26 wks ended	27 wks ended
	10/02/2010	10/03/2009	10/02/2010	10/03/2009
Net Sales	$         83,177	$         87,570	$       161,748	$       165,585
Costs and Expenses:
Cost of Sales	73,533	81,819	141,748	153,527
Selling and Delivery	2,655	2,275	5,102	4,472
General and Administrative	1,856	1,985	3,954	3,650
Total Costs and Expenses	78,044	86,079	150,804	161,649
Operating Income	5,133	1,491	10,944	3,936
Other Income (Expense):
Interest Expense	(338)	(415)	(719)	(857)
Other Income (Expense), Net	34	3	38	5
Total Other Income (Expense), Net	(304)	(412)	(681)	(852)
Income Before Income Taxes	4,829	1,079	10,263	3,084
Income Tax Expense	1,739	388	3,695	1,110
Net Income	$           3,090	$              691	$           6,568	$           1,974
Weighted-Average Common Shares Outstanding	4,616	4,616	4,616	4,617
Net Income Per Common Share	$             0.67	$             0.15	$             1.42	$             0.43

Cagle's, Inc.
Condensed Consolidated Balance Sheets
(In Thousands)
			October 2, 2010		April 3, 2010
ASSETS			(Unaudited)
Cash		$	1,833		$	1,872
Trade Accounts Receivable, net			16,615			15,769
Inventories			30,314			26,065
Other Current Assets			655			305
Total Current Assets			49,417			44,011
Property, Plant, and Equipment, net			35,366			34,869
Other Assets			4,927			8,739
TOTAL ASSETS		$	89,710		$	87,619
LIABILITIES & STOCKHOLDERS' EQUITY
Current Maturities of Long-term Debt		$	2,793		$	2,685
Accounts Payable			18,293			16,142
Other Current Liabilities			8,888			8,424
Total Current Liabilities			29,974			27,251
Long-Term Debt			17,833			25,033
Total Stockholders' Equity			41,903			35,335
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY		$	89,710		$	87,619

SOURCE Cagle's, Inc.

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