ATLANTA – Cagle's Inc.’s shifting product mix and improved margins on existing products have provided a good return for the company for its first quarter of fiscal 2011. Net income for the quarter was $3.5 million or $0.75 per share compared to net income of $1.3 million or $0.28 per share for the first quarter of fiscal year 2010.
First-quarter revenues were $78.6 million, up 0.7%, reflecting a decrease in lbs. sold of 3.1% and an increase in sales price for poultry of $0.013 per lb. 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 meat which increased 9.1%, and breast tenders which increased 7.7%, the company explained. Wing markets decreased 11%, drums decreased 17%, leg quarters were 19% lower and whole birds without giblets were quoted 7.3% higher.
Cost of sales for the quarter decreased 4.9% 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% of the total cost of sales, decreased 8.5% 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 it continues to serve fast-food and deli-product markets at its Collinsville complex. The transition involved expenditures of approximately $5 million for fixed asset and working capital to support the new product lines and has increased lbs. processed at Pine Mountain in excess of 20%.
“We expect 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,” the company said in a news release.