Sales Volume up and Costs Down for Cagle's in Q1
US - Poultry meat processor, Cagle's Inc., has announced its results for the first quarter (Q1) ended 3 July 2010, which includes a marginal increase in sales, the result of a three per cent decrease in volume but an increase in unit price. Cost of sales was down five per cent.
11 August 2010
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Cagle's, Inc. has reported net income of $3.5 million or $0.75 per share for the first quarter of fiscal year 2011 compared to net income of $1.3 million or $0.28 per share for the first quarter of fiscal year 2010.
Revenues for the first quarter were $78.6 million up 0.7 per cent, reflecting a decrease in pounds sold of 3.1 per cent and an increase in sales price for poultry of $0.013 per pound as compared to the same period of fiscal 2010. Quoted market prices for products for the first quarter of fiscal 2011 versus the same period last year were mostly down with the exception of boneless breast which increased 9.1 per cent, and breast tenders which increased 7.7 per cent. Wing markets decreased 11 per cent, drums decreased 17 per cent, leg quarters were 19 per cent lower, and whole birds without giblets were quoted 7.3 per cent higher.
Cost of sales for the first quarter of fiscal 2011 decreased 4.9 per cent as compared with the same period last year, from $71.7 million to $68.2 million. Feed ingredient prices for broilers processed in the first quarter of fiscal 2011, which represented 36 per cent of the total cost of sales, decreased 8.5 per cent as compared to the first quarter of fiscal 2010.
This quarter marked the successful completion of the company's transition of its Pine Mountain Valley plant to a deboning facility which has provided Cagle's with the opportunity to market products in the boneless institutional and further processing areas while we continue to exploit fast food and deli product markets at our Collinsville complex. This transition involved expenditures of approximately $5 million for fixed asset and working capital to support the new product lines and has increased pounds processed at Pine Mountain in excess of 20 per cent.
The company says its shifting product mix and excellent margins on existing products have provided a good return for the company and stakeholders for the first quarter of fiscal 2011. It expects protein markets to continue to be strong for the remainder of this summer supported by low cattle and hog inventories and limited expansion of poultry supplies.
