Cagle's filed the petitions in the US Bankruptcy Court for the Northern District of Georgia in Atlanta, Ga. Atlanta-based Cagle's is an integrated poultry company that has been operating for more than 60 years.
In the first quarter ended July 2, Cagle’s sustained a loss of $5,735,000, which compared with net income of $3,478,000 in the first quarter of fiscal 2011. The company also suffered an operating loss during the period of $8,537,000, which compared with operating income of $5,811,000 in the same period a year ago. Net sales were $81,873,000, up 4 percent from $78,571,000.
Cagle's leadership emphasized that normal operations and customer service will continue without disruption, including sales, order processing and delivery. In connection with its Chapter 11 filing, Cagle's also announced it anticipates receiving court approval for a debtor-in-possession (DIP) financing facility from AgSouth Farm Credit, ACA.
"After careful consideration, we concluded that a Chapter 11 restructuring represents the best long-term solution for Cagle's Inc. and Cagle's Farms Inc.," said J. Douglas Cagle, chairman, president and CEO. "It is our goal to reach an agreement with our creditors in a quick and efficient manner, allowing us to restructure our debt with minimal disruption to our operations.
"We appreciate the ongoing loyalty and support of our employees, growers, customers and vendors," he added, "Their dedication and hard work is critical to our success. We remain committed to leading Cagle's toward a strong and profitable future with the help of our employees, our growers, our customer base, and our vendor community. Cagle's remains a viable business that is deeply committed to our employees and the customers that we serve."
Cagle's did not set a target date for emergence from Chapter 11, but Cagle stressed the company's strategy is to move quickly. "There is much work ahead," he added, "but time and time again, our employees have proven their ability to face significant challenges and handle change. By working together, we can preserve Cagle's and its future."