**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

 

**WASHINGTON, D.C. 20549**

 

**FORM 10-Q**

 

| **x**                                                       | **QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF 1934**  |
|-------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|
|                                                        |                                                                                                     |
| **For the quarterly period ended  February 29, 2008;** |
|                                                        |                                                                                                     |
| **OR**                                                      |
|                                                        |                                                                                                     |
| **o**                                                       | **TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF 1934** |

 

**for the transition period from         TO         **

 

**Golden Oval Eggs, LLC**

(Exact name of registrant as specified in its charter)

 

| **Delaware**                                                    | ** ** | **20-0422519**                           |
|-----------------------------------------------------------------|------------|------------------------------------------|
| (State or other jurisdiction of incorporation or  organization) |       | (I.R.S. employer identification  number) |
|                                                            |       |                                     |
| **1800 Park Avenue East**                                       |       |                                     |
| **Renville, MN**                                                | ** ** | **56284**                                |
| (Address of principal executive offices)                        |       | (Zip code)                               |

 

Telephone: **(320) 329-8182**

(Registrant’s telephone number, including area code)

 

Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days.

Yes x No o

 

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company.  See definition of “accelerated filer,” “largeaccelerated filer” and “smaller reporting company” in Rule 12b-2 of theExchange Act.

 
| Large Accelerated  Filer  o |   | Accelerated Filer o                |
|----------------------------------|--------|------------------------------------|
|                             |   |                               |
| Non-Accelerated Filer x          |   | Smaller Reporting  Company  o |

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act.)

Yes o  No x

 

Indicate by check mark ifthe registrant is not required to file reports pursuant to Section 13 or Section 15(d) ofthe Exchange Act.

Yes o  No x

 

As of February 29,2008, there were 5,430,877 of the Company’s Class A Units issued andoutstanding.

 

 

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**TABLE OF CONTENTS**

 

Golden Oval Eggs, LLC

Form 10-Q

For The Quarter Ended February 29, 2008

 
| **Description**  | ** **                                                                                  | **Page** |
|------------------|---------------------------------------------------------------------------------------------|----------|
| **Part I**  | **Financial Information**                                                                   |     |   |
| Item 1.          | Consolidated Condensed  Financial Statements                                                |     | 1 |
| Item 2.          | Management’s Discussion and  Analysis of Financial Condition and Results of Operations |     | 8 |
| Item 3.          | Quantitative and Qualitative  Disclosures about Market Risk                                 |     | 14 |
| Item 4.          | Controls and Procedures                                                                     |     | 14 |
|             |                                                                                        |     |   |
| **Part II** | **Other Information**                                                                       |     |   |
| Item 1.          | Legal Proceedings                                                                           |     | 14 |
| Item 1A.         | Risk Factors                                                                                |     | 15 |
| Item 2.          | Unregistered Sales of Equity  Securities and Use of Proceeds                                |     | 17 |
| Item 3.          | Defaults Upon Senior  Securities                                                            |     | 17 |
| Item 4.          | Submission of Matters to a  Vote of Security Holders                                        |     | 17 |
| Item 5.          | Other Information                                                                           |     | 17 |
| Item 6.          | Exhibits                                                                                    |     | 17 |
|             |                                                                                        |     |   |
| **Signatures**   |                                                                                        |     | 18 |

 

 

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**PART I.    FINANCIAL INFORMATION**

 

**Item 1. Condensed Financial Statements**

 

**GOLDEN OVAL EGGS, LLC**

 

**Consolidated Condensed Balance Sheets**

**February 29, 2008 and August 31,2007**

 

**(In Thousands)**

(Unaudited)

 
| ** **                                | ** ** | **February 29,  2008** | ** ** | **August 31,  2007** | ** ** |
|-------------------------------------------|------------|-----------------------------|------------|---------------------------|------------|
| Assets                                    |       |                        |       |                      |       |
| Current assets                            |       |                        |       |                      |       |
| Cash and cash equivalents                 |       | $                           |       |                      | $          |   |   |
| Accounts receivable                       |       | 19,319                      |       | 18,502                    |       |
| Inventories                               |       | 19,745                      |       | 18,352                    |       |
| Restricted cash                           |       | 1,115                       |       | 783                       |       |
| Other current assets                      |       | 1,461                       |       | 1,047                     |       |
| Total current assets                      |       | 41,640                      |       | 38,684                    |       |
|                                      |       |                        |       |                      |       |
| Property, plant and  equipment            |       |                        |       |                      |       |
|                                      |       |                        |       |                      |       |
| Land and land improvements                |       | 11,649                      |       | 11,649                    |       |
| Buildings                                 |       | 40,720                      |       | 40,684                    |       |
| Leasehold improvements                    |       | 916                         |       | 896                       |       |
| Equipment                                 |       | 71,722                      |       | 71,906                    |       |
| Construction in progress                  |       | 85                          |       | 173                       |       |
|                                      |       | 125,092                     |       | 125,308                   |       |
| Accumulated depreciation                  |       | (62,479                     | )          | (57,103                   | )          |
| Total property, plant and  equipment, net |       | 62,613                      |       | 68,205                    |       |
|                                      |       |                        |       |                      |       |
| Other assets                              |       |                        |       |                      |       |
| Investments                               |       | 1,633                       |       | 1,670                     |       |
| Intangible assets, net                    |       | 14,715                      |       | 18,826                    |       |
| Goodwill                                  |       | 22,858                      |       | 22,858                    |       |
| Note receivable                           |       | 298                         |       | 135                       |       |
| Total other assets                        |       | 39,504                      |       | 43,489                    |       |
|                                      |       |                        |       |                      |       |
| Total assets                              |       | $                           | 143,757    |                      | $          | 150,378 |   |

 

 See accompanying notes to consolidatedcondensed financial statements

 

1

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| ** **                                        | ** ** | **February 29,  2008** | ** ** | **August 31,  2007** | ** ** |
|---------------------------------------------------|------------|-----------------------------|------------|---------------------------|------------|
| Liabilities  and Members’ Equity             |       |                        |       |                      |       |
| Current liabilities                               |       |                        |       |                      |       |
| Revolving line of credit                          |       | $                           | 14,695     |                      | $          | 11,884 |   |
| Accounts payable                                  |       | 15,345                      |       | 14,221                    |       |
| Accrued interest                                  |       | 599                         |       | 2,988                     |       |
| Accrued compensation                              |       | 1,851                       |       | 1,824                     |       |
| Other current liabilities                         |       | 3,029                       |       | 2,595                     |       |
| Current maturities of long-term debt              |       | 9,521                       |       | 9,522                     |       |
| Total current liabilities                         |       | 45,040                      |       | 43,034                    |       |
|                                              |       |                        |       |                      |       |
| Long-term debt, less  current maturities          |       | 66,244                      |       | 84,727                    |       |
|                                              |       |                        |       |                      |       |
| Members’ equity                              |       |                        |       |                      |       |
| Members’ equity                              |       | 31,343                      |       | 21,612                    |       |
| Non-controlling interest in consolidated entities |       | 1,130                       |       | 1,005                     |       |
| Total members’ equity                        |       | 32,473                      |       | 22,617                    |       |
| Total liabilities and  members’ equity       |       | $                           | 143,757    |                      | $          | 150,378 |   |

 

See accompanying notes toconsolidated condensed financial statements

 

2

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**GOLDEN OVAL EGGS, LLC**

 

**Consolidated Condensed Statements ofOperations**

 

**For the Periods Ended February 29,2008 and February 28, 2007**

 

**(In Thousands, except per unit data)**

**(Unaudited)**

 
| ** **                                                  | ** ** | **Three Months Ended** | ** ** | **Six Months Ended** | ** ** |
|-------------------------------------------------------------|------------|----------------------------------|------------|--------------------------------|------------|
| ** **                                                  | ** ** | **February 29,**            | ** ** | **February 28,**          | ** ** | **February 29,** | ** ** | **February 28,** | ** ** |
| ** **                                                  | ** ** | **2008**                         | ** ** | **2007**                       | ** ** | **2008** | ** ** | **2007** | ** ** |
| Net sales                                                   |       | $                                | 55,335     |                           | $          | 45,446 |   | $ | 108,538 |   | $ | 94,063 |   |
|                                                        |       |                             |       |                           |       |   |   |   |   |
| Cost of goods sold                                          |       | 51,949                           |       | 42,581                         |       | 101,067 |   | 86,976 |   |
|                                                        |       |                             |       |                           |       |   |   |   |   |
| Gross profit                                                |       | 3,386                            |       | 2,865                          |       | 7,471 |   | 7,087 |   |
|                                                        |       |                             |       |                           |       |   |   |   |   |
| Operating expenses                                          |       | 8,877                            |       | 5,890                          |       | 13,319 |   | 11,072 |   |
|                                                        |       |                             |       |                           |       |   |   |   |   |
| Income from operations                                      |       | (5,491                           | )          | (3,025                         | )          | (5,848 | ) | (3,985 | ) |
|                                                        |       |                             |       |                           |       |   |   |   |   |
| Other income (expense)                                      |       |                             |       |                           |       |   |   |   |   |
| Interest expense                                            |       | (2,480                           | )          | (2,242                         | )          | (5,209 | ) | (4,964 | ) |
| Non-controlling interest in income of consolidated entities |       | (81                              | )          | —                         |       | (104 | ) | (62 | ) |
| Other income                                                |       | 342                              |       | 518                            |       | 694 |   | 598 |   |
| Forgiveness of debt                                         |       | 17,000                           |       | —                         |       | 17,000 |   | — |   |
| Total other income (expense)                                |       | 14,781                           |       | (1,724                         | )          | 12,381 |   | (4,428 | ) |
|                                                        |       |                             |       |                           |       |   |   |   |   |
| Net income                                                  |       | $                                | 9,290      |                           | $          | (4,749 | ) | $ | 6,533 |   | $ | (8,413 | ) |
|                                                        |       |                             |       |                           |       |   |   |   |   |
| Weighted average Members’ units outstanding            |       | 5,431                            |       | 5,419                          |       | 5,431 |   | 5,419 |   |
|                                                        |       |                             |       |                           |       |   |   |   |   |
| Net income per Members’ unit, basic                    |       | $                                | 1.71       |                           | $          | (0.88 | ) | $ | 1.20 |   | $ | (1.55 | ) |
|                                                        |       |                             |       |                           |       |   |   |   |   |
| Net income per Members’ unit, diluted                  |       | $                                | 1.67       |                           | $          | (0.88 | ) | $ | 1.17 |   | $ | (1.55 | ) |
|                                                        |       |                             |       |                           |       |   |   |   |   |
| Distributions per unit                                      |       | $                                | —     |                           | $          | — |   | $ | — |   | $ | — |   |

 

See accompanying notes to consolidated condensedfinancial statements

 

3

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**GOLDEN OVAL EGGS, LLC**

 

**Consolidated Condensed Statements ofCash Flows****For the Periods Ended February 29, 2008and February 28, 2007**

(In Thousands)(Unaudited)

 
| ** **                                                                               | ** ** | **Six Months Ended** | ** ** |
|------------------------------------------------------------------------------------------|------------|--------------------------------|------------|
| ** **                                                                               | ** ** | **February 29,**          | ** ** | **February 28,** | ** ** |
| ** **                                                                               | ** ** | **2008**                       | ** ** | **2007** | ** ** |
| Cash flows from operating activities                                                     |       |                           |       |   |   |
| Net income                                                                               |       | $                              | 6,533      |   | $ | (8,413 | ) |
| Adjustments to reconcile net income to net cash provided by operating  activities        |       |                           |       |   |   |
| Depreciation                                                                             |       | 5,376                          |       | 5,813 |   |
| Amortization                                                                             |       | 948                            |       | 949 |   |
| Gain on sale of property, plant & equipment                                     |       | —                         |       | 1 |   |
| Asset impairment                                                                         |       | 3,531                          |       | — |   |
| Gain on debt forgiveness                                                                 |       | (17,000                        | )          | — |   |
| Stock vesting (SFAS 123R)                                                                |       | 26                             |       | — |   |
| Changes in operating assets and liabilities                                              |       |                           |       |   |   |
| Accounts receivable                                                                      |       | (887                           | )          | (2,369 | ) |
| Inventories                                                                              |       | (1,393                         | )          | (955 | ) |
| Other current assets                                                                     |       | (414                           | )          | 200 |   |
| Accounts payable                                                                         |       | 1,124                          |       | 3,105 |   |
| Accruals and other current liabilities                                                   |       | 1,313                          |       | 1,349 |   |
| Minority interest                                                                        |       | 125                            |       | 67 |   |
| Net cash used by operating activities                                                    |       | (718                           | )          | (253 | ) |
|                                                                                     |       |                           |       |   |   |
| Cash flows from investing activities                                                     |       |                           |       |   |   |
| Purchases of property, plant and equipment                                               |       | (152                           | )          | (716 | ) |
| Proceeds from sale of property, plant and equipment                                      |       | —                         |       | 1 |   |
| Advance of note receivable                                                               |       | (162                           | )          | (59 | ) |
| Retirement of investment in other cooperatives                                           |       | 37                             |       | 9 |   |
| Net cash used by investing activities                                                    |       | (277                           | )          | (765 | ) |
|                                                                                     |       |                           |       |   |   |
| Cash flows from financing activities                                                     |       |                           |       |   |   |
| Net increase in revolving line of credit                                                 |       | 2,811                          |       | 5,640 |   |
| Payments of long-term debt                                                               |       | (1,484                         | )          | (4,262 | ) |
| (Increase) in restricted cash                                                            |       | (332                           | )          | (362 | ) |
| Net cash provided by financing activities                                                |       | 995                            |       | 1,016 |   |
| Net increase (decrease) in cash and cash equivalents                                     |       | —                         |       | (2 | ) |
| Cash and cash equivalents - beginning of period                                          |       | —                         |       | 222 |   |
| Cash and cash equivalents - end of period                                                |       | $                              | —     |   | $ | 220 |   |
|                                                                                     |       |                           |       |   |   |
| Supplementary disclosures of cash flow information                                       |       |                           |       |   |   |
| Cash paid during the period for:                                                         |       |                           |       |   |   |
| Interest, net of capitalized interest of $15 and $40 during 2008 and  2007, respectively |       | $                              | 1,962      |   | $ | 3,970 |   |
| Supplementary disclosures of non-cash transactions                                       |       |                           |       |   |   |
| Debt forgiveness                                                                         |       | $                              | 17,000     |   | — |   |
| Warrant issued for 880,492 Class A Convertible Preferred Units                      |       | 3,242                          |       | — |   |
| Class A units issued as payment of accrued officer bonus                            |       | —                         |       | 146 |   |

 

See accompanying notes toconsolidated condensed financial statements

 

4

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**GOLDEN OVAL EGGS, LLC**

 

**Notes to Consolidated CondensedFinancial Statements**

 

**February 29, 2008 and August 31,2007**

 

**(In Thousands Except Unit Data)**

 

1. Organization Golden Oval Eggs, LLC (the “Company”) was organized as a Delaware limitedliability company to effect the reorganization of Midwest Investors of Renville, Inc.(the “Cooperative”) effective August 31, 2004.  The Cooperative wasincorporated as a cooperative under the laws of the state of Minnesota in March 1994.The Company operates as the Cooperative’s successor and its operations are acontinuance of the operations of the Cooperative. The accompanying consolidatedcondensed financial statements for all periods presented are those of theCompany.

 

2. Basis ofPresentation  The accompanying consolidated condensed balance sheet asof August 31, 2007, which has been derived from audited consolidated financialstatements, and the unaudited interim consolidated condensed financialstatements at February 29, 2008 and for the three-month periods ended February 29,2008 and February 28, 2007 of the Company have been prepared in accordancewith generally accepted accounting principles for interim financial reportingand Securities and Exchange Commission rules and regulations. Certain information normally included in financial statements and relatedfootnotes prepared in accordance with generally accepted accounting principleshas been condensed or omitted pursuant to the rules and regulations of theSecurities and Exchange Commission.  The consolidated condensed financialstatements reflect all adjustments (consisting only of normal recurringadjustments) which are, in the opinion of management, necessary for a fairpresentation of the financial position and operating results for the interimperiods presented. These consolidated condensed financial statements should beread in conjunction with Management’s Discussion and Analysis of FinancialCondition and the consolidated financial statements and notes thereto includedin the Company’s Annual Report on Form 10-K for the year ended August 31,2007. The results of operations for the period ended February 29, 2008 arenot necessarily indicative of results to be expected for any other interimperiod or for the entire year.

 

3. Inventories  Pullet and layer hen inventories are stated at the cost ofproduction, which includes the costs of the chicks, feed, overhead and labor.Layer hen flock costs are capitalized to the point at which the pullet goesinto production and are amortized over the productive lives of the flocks,generally 18 to 24 months. Feed, supplies and liquid egg inventories are statedat the lower of cost (first-in, first-out) or market. Inventories consisted ofthe following:

 
| ** **               | ** ** | **February 29,  2008** | ** ** | **August 31,  2007** | ** ** |
|--------------------------|------------|-----------------------------|------------|---------------------------|------------|
| Hens and pullets         |       | $                           | 11,619     |                      | $          | 10,766 |   |
| Eggs and egg products    |       | 4,965                       |       | 4,046                     |       |
| Feed, supplies and other |       | 3,161                       |       | 3,540                     |       |
| Total inventories        |       | $                           | 19,745     |                      | $          | 18,352 |   |

 

5

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4. FinancingAgreements   Golden Oval Eggs, LLC, Midwest Investors of Iowa andGOECA, LP are parties to a Credit Agreement that was originally entered into onSeptember 13, 2004, and subsequently amended.  With the last amendment effective March 11,2008, the maturity date of $2,500 of a short term revolving note and all otherrevolving notes was extended from March 1, 2008 to July 31, 2008 andthe commencement date of certain financial covenants was also extended to July 31,2008.  We have historically financed ourworking capital needs through the Credit Agreement and, to the extent of ourcash flow, from operations.  The CreditAgreement, as amended, requires the Company, among other things, to generatemonthly EBITDA of at least $1,000 for the term of the Credit Agreement.Principal payments for Tranche A and Tranche B loans continue to be deferreduntil July 31, 2008.  To the extentthat monthly EBITDA exceeds $1,000, up to $200 per month will be transferredinto an interest bearing escrow account to provide funds for the upgrade of theThompson, Iowa wastewater facility. As has been reported in previous filingsand disclosed in the Risk Factors discussion of the Company’s report on Form 10-Kfor the fiscal year ended August 31, 2007, the Company is continuing toseek alternative sources of capital to strengthen its balance sheet.  The Company was not in compliance with allcovenants under the Credit Agreement for each month in the quarter ended February 29,2008 and as of February 29, 2008.

 

On February 15,2008, the Company and Land O’ Lakes executed an agreement whereby the purchaseprice of the Egg Products Division of MoArk was reduced by $17,000 and an equalamount of the subordinated note used to finance the acquisition wasreduced.  Additionally, the Companyissued a Warrant for the purchase of up to 880,492 newly authorized convertiblepreferred units in exchange for the forgiveness of accrued interest on thesubordinated note. The 697,350 Class B units held by Land O’ Lakes wereconverted to Class A units per the agreement.

 

The subordinated note toLand O’Lakes of $17.0 million was treated as debt forgiveness and wasclassified as income in the other income (expense) section of the Statement ofOperations.  In exchange for the accruedinterest of $3.2 million on the $17.0 million note that was forgiven, theCompany issued Land O’Lakes a Warrant that is included in the Equity section ofthe Condensed Balance sheet at a value of $3.2 million.

 

5. Stock BasedCompensation   The Company has bonus and compensation plans in placefor management.  Under these agreements management may receive up to 50%of certain performance bonuses in the form of Class A Units.  TheCompany accrues for management bonuses during the year based upon the estimatedamount that will be earned by year end.  Upon approval by the Board ofManagers, the bonuses are paid to management.  The number of units to beissued is based upon the higher of the book or market value of the Class AUnits at the time the bonus is awarded.  For the three months ended February 28,2007 and February 29, 2008, no Class A Units were issued tomanagement.

 

The Class A Unitsare nontransferable and subject to forfeiture ratably over the following threeyears.  The employee must be employed on the anniversary date of issuanceto avoid forfeiture.  In the event that termination of the employeeoccurs, the Company will record any forfeiture of units as a reduction tocompensation expense in the period in which the forfeiture occurs.  Therewere no forfeitures for the three months ended February 29, 2008 nor forthe quarter ended February 28, 2007.

 

The members of the Boardof Managers are granted 2,000 Class A Units for each year served on theboard following each year of service.  The Company recognizes compensationexpense for these awards based upon the fair value on the date they aregranted.  For the three months ended February 29, 2008 and February 28,2007 no units were awarded to the Board of Managers.

 

6

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6. Earnings per Share   Basic net income (loss) per unit wascalculated by dividing net income (loss) by the weighted average number of Class Acommon units outstanding during the period. Diluted net income (loss) per unit was calculated by dividing net income(loss) by the weighted average number of Class A common units outstandingduring the period plus the dilutive effects of the Warrant. Convertible Class APreferred units representing 146,749 units were included in the calculation ofdiluted net income per members’ unit.

 
| ** **                                 | ** ** | **February 29,  2008** | ** ** | **February 28,  2007** | ** ** |
|--------------------------------------------|------------|-----------------------------|------------|-----------------------------|------------|
| Numerator                                  |       |                        |       |                        |       |
| Net income (loss)                          |       | $                           | 6,533      |                        | $          | (8,843 | ) |
| Denominator                                |       |                        |       |                        |       |
| Weighted average units outstanding         |       | 5,431                       |       | 5,419                       |       |
|                                       |       |                        |       |                        |       |
| Diluted weighted average units outstanding |       | 5,578                       |       | 5,419                       |       |
|                                       |       |                        |       |                        |       |
| Basic profit (loss) per share              |       | $                           | 1.20       |                        | $          | (1.55 | ) |
|                                       |       |                        |       |                        |       |
| Diluted profit (loss) per share            |       | $                           | 1.17       |                        | $          | (1.55 | ) |

 

7. Use of Estimates  The preparation of consolidated condensed financial statements inconformity with accounting principles generally accepted in the United Statesof America requires management to make estimates and assumptions that affectthe reported amounts of assets and liabilities and the disclosure of contingentassets and liabilities at the date of the consolidated condensed financialstatements and the reported amounts of revenues and expenses during thereporting period. Actual results could differ materially from those estimates.

 

8. Capital Resourcesand Liquidity   The Company is a party to an Amended and RestatedCredit Agreement, as amended, with Metropolitan Life Insurance Company aslender and CoBank, ACB as lender and administrative agent (the “CreditAgreement”).  The Company has had limited access to capital under theCredit Agreement and the lenders under the Credit Agreement have modifiedcertain financial covenants in order to allow compliance with these covenantsby the Company.  As part of its efforts to obtain a refinancing of theCredit Agreement, the Company has completed the following steps:

 

On March 11, 2008,the Company entered into an extension and amendment agreement with the lendersunder the Credit Agreement that extends the termination date of a $2,500short-term revolving note issued under our Restated and Amended CreditAgreement from February 29, 2008 to July 31, 2008.  Thecommencement of the effective date of financial covenants under the CreditAgreement has also been delayed from March 1, 2008 to July 31, 2008.

 

9. Legal Proceedings  The Attorney General of Iowa has filed suit in relation to the Thompson, Iowawastewater facility.  Please refer to Item 1. Legal Proceedings under Part II.of this filing for a more detailed description of this and other legal matters.

 

7

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**Item 2. Management’s Discussion and Analysis of FinancialCondition and Results of Operations.**

 

**Forward-LookingStatements**

 

This Management’sDiscussion and Analysis of Financial Condition and Results of Operations contains,in addition to historical information, forward-looking statements that arebased on current expectations, beliefs, intentions or future strategies of themanagement of Golden Oval Eggs, LLC (“we”, “us”, “our”, or the “Company”). Whenused in this Management’s Discussion and Analysis of Financial Condition andResults of Operations or elsewhere in this Quarterly Report on Form 10-Q,the words “believe,” “expect,” “anticipate,” “will,” “estimate” and similarverbs or expressions are intended to identify such forward-lookingstatements.  If our management’s assumptions prove incorrect or shouldunanticipated circumstances arise, our actual results could differ materiallyfrom those anticipated. These differences could be caused by a number offactors or combination of factors including, but not limited to, those factorsdescribed in Part I, Item 1A. “Risk Factors” section of the Company’sAnnual Report on Form 10-K for the year ended August 31, 2007, aswell as those identified in other filings with the Securities and ExchangeCommission.  Readers are strongly urged to consider such factors whenevaluating any forward-looking statement. The Company undertakes no obligationto update any forward-looking statements to reflect future events or developments.

 

The following is adiscussion and analysis of our financial condition and results of operations asof and for the three month periods ended February 29, 2008 and February 28,2007. This section should be read in conjunction with the condensed financialstatements and related notes in Item 1 of this Quarterly Report and our AnnualReport on Form 10-K for the year ended August 31, 2007.

 

**Summary**

 

Golden Oval Eggs, LLC isa Delaware limited liability company, primarily engaged in the business ofproducing, processing, marketing and distributing egg products. The Companyoperates seven production facilities in the United States.  It maintainsits headquarters in Renville, Minnesota and a sales office in Plymouth,Minnesota.

 

The Company produces awide range of egg products, from unpasteurized liquid eggs, further processedegg products for other food manufacturers, and finished goods for sale toretailers and food service customers.  Products are sold to other foodmanufacturers, restaurants, supermarkets and foodservice distributors.

 

The Company producesapproximately two-thirds of its annual needs from eggs produced at layer barnsat the Company’s Renville, Minnesota and Thompson, Iowa facilities.  Theremainder is satisfied from purchases of eggs or liquid product under a varietyof pricing arrangements with third partiers.

 

The Company’s operatingincome or loss is materially affected by wholesale liquid egg prices, andpricing of further processed products which can fluctuate widely and areoutside of the Company’s control. Liquid eggs are a commodity product andprices fluctuate in response to supply/demand factors. The Company also sells aportion of its products under contracts at non-market prices. Depending uponmarket circumstances, the prices generated by the Company’s non-market volumetend to be less or more than what the prevailing open market prices wouldgenerate.

 

The Company’s cost ofproduction is materially affected by feed, purchased egg and liquid egg costs,which averaged approximately 65% of the Company’s total production costs in thesecond quarter of fiscal 2008.

 

8

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**Resultsof Operations**

 

Results of Operations —Second Quarter Fiscal Year 2008 Compared to Second Quarter Fiscal Year 2007

 

 *Net Sales* Net sales for the second quarter offiscal 2008 were $55.3 million, an increase of $9.9 million, or 21.8% over thesecond quarter in the prior fiscal year. Pounds sold in the second quarter were69.6 million, a decrease of 21.6 million, or 23.7% , than the same period yearago.  The decrease is due to a significant reduction of the Millersburg,Ohio facility egg supply (15.9 million pounds) which resulted in an impairmentcharge in the fiscal year ended August 31, 2007.  Additional causesof the decline include a decrease in pounds available to sell from productionfrom the Renville and Thompson facilities as a result of reductions in flocksizes associated with an increase in the amount of space allotted to each birdin compliance with animal care guidelines promulgated by industry groups (2.0million pounds), and a decrease in pounds available to sell as a result of usexiting certain low margin businesses (3.7 million pounds).  The average selling price per pound soldincreased from $0.468 to $0.745, an increase of $0.277, or 59.1%, as a resultof higher selling prices executed in an environment of sharply increased liquidegg markets.

 

*Cost ofgoods sold.* Costof goods sold for the first quarter of fiscal 2008 was $51.9 million, anincrease of $9.3 million, or 21.8%, as compared to the second  quarter of fiscal 2008.  The increase isdue primarily as a result of  increasesin the cost of feed, purchased eggs and purchased liquid eggs of $8.8 million,and a $.5 million increase in feed costs from the Company’s  interest in United Mills, which is includedin our consolidated financial statements.

 

*Operatingexpenses.*Operating expenses for the second quarter of fiscal 2008 were $8.9 million, anincrease of $3.0 million, or 33.7%, as compared to the second quarter of fiscal2007. Asset impairment of $3.7 million was recorded for discontinuedoperations at two of the processing facilities and an intangible asset.  Absent the impairment charges, operatingexpenses declined $0.7 million, or 12.1%, due primarily  to a reduction in discretionary spending inthe amount of $0.7 million, primarily in marketing.

 

*Totalother income( expense).* Total other income for the second quarter of fiscal 2008 was $14.8million, an increase of $16.5 million from the prior year period. Theprimary reason for the increase in total other income was the cancellation ofthe $17.0 million note we issued Land O’Lakes in connection with the amendmentof the terms of the MoArk Acquisition, as described more fully below under the “Liquidityand Capital Resources”. Interest expense increased $.2 million.   Otherincome decreased $0.2 million due to the timing of sales of manure from thechicken barns, as the sales were reported in the second quarter in the priorfiscal year. The manure sale for fiscal year 2008 occurred in March 2008,which is included in the  Company’s thirdquarter.

 

*IncomeTaxes.  * Asa limited liability company, the Company expects to be treated as a partnershipfor federal income tax purposes. Therefore, the Company will pay no federalincome tax and instead, the Company’s members will include their pro-rata shareof the Company’s net income or loss as an item of income for the purposes oftheir own federal income tax returns.

 

*NetIncome*. Operations for the second quarter ended February 29, 2008 resultedin a profit of $9.3 million, or a profit of $1.71 per basic  members’ unit and $1.67 per diluted members’unit, as compared to a loss of $(4.7) million, or $(0.88) per basic anddiluted members’ unit for the quarter ended February 29, 2008.

 

The Company’s financialperformance in the current quarter may not be indicative of future quarters dueto seasonal factors and volatility in both selling prices and cost of materialspurchased, as well as industry factors in an intensely competitive industry.

 

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Results of Operations —Six Months ended February 29, 2008 Compared to Six Months ended February 28,2007

 

*NetSales*              Net sales for the first half of fiscal 2008 were $108.5 million, an increase of$14.5 million, or an increase of 15.4% over the sales of the first half of theprior fiscal year.  The increase  isdue to higher average selling prices per pound for liquid eggs for the firsthalf of fiscal 2008 of $.706 versus $.448 for the first half of fiscal year2007, an increase of $.258, as well as an improved product mix. The increase inselling prices was due to the increasing costs of feed and purchased shell andliquid egg.  Pounds sold in the firsthalf were 148.4 million, a decrease of 50.2 million, or 25.3% over the sameperiod year ago.  A 7.8% (8.1 million pounds) decline from the Renvilleand Thompson facilities was caused by increasing the space allotted to eachbird in compliance with animal care guidelines promulgated by industrygroups.  The reduction of the Millersburg egg supply amounted to 35.0million pounds. The remaining decrease (7.1 million pounds) was due to ourdecision to exit certain low margin business.

 

*Cost ofGoods Sold*            Cost ofgoods sold for the first half of fiscal 2008 was $101.1 million, an increase of$14.1 million or 16.2% of the figure for the first half of fiscal 2007. As occurred in the second quarter, significant unfavorable cost pressures wereexperienced in the period.  Feed costs rose by more than 31.0%, or $4.2million for the half,  driven by highercorn and soybean meal costs.  Shell egg and liquid egg purchasesincreased $(15.6) million  Operationalimprovements resulted in savings of $4.4 million and we recorded a  $1.3million decrease in cost from our interest in United Mills, which is included in our consolidated financial statements.

 

*OperatingExpenses           *Operating expenses for the first half offiscal 2008 were $13.3 million, an increase of $2.2 million, or 20.3%, from thefirst half of fiscal 2007.  Asset impairment of $3.7 million was recordedfor discontinued operations at the Abbeville and California processingfacilities, and a Land O’Lakes licensing agreement that was recorded on our balancesheet statements as an intangible asset. A reduction occurred  in discretionary spending in the amount of$1.5 million with the balance spread across numerous accounts

 

*TotalOther Income(Expense)          *Total other income increased from a lossof $(4.4) million to $12.4 million, an increase of $16.8 million for theperiod.   The primary reason for the increase in other income was thecancellation of the $17.0 million note we issued to Land O’Lakes in connectionwith the amendment of the terms of the MoArk Acquisition, as described morefully below under “Liquidity and Capital Resources”.  Interest expense increased by $0.3 million onincreased line of credit debt and other income increased $0.1 million dueprimarily to litter sales.

 

*IncomeTaxes* As alimited liability company, the Company expects to be treated as a partnershipfor federal income tax purposes.  Therefore, the Company will pay nofederal income tax and instead, the Company’s members will include theirpro-rata share of the Company’s net income as an item of income for thepurposes of their own federal income tax returns.

 

*NetIncome* Net incomefor the six months ended February 29, 2008 resulted in a profit of $6.5million, or $1.20 per basic members’ unit and $1.17 per diluted members’ unit ,as compared to a loss of $(8.4) million, or $(1.55) per unit for the sameperiod a year ago.

 

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**Liquidityand Capital Resources**

 

The Company’s workingcapital at February 29, 2008 was $(3.4) million compared to $(4.3) millionat August 31, 2007.   The Company’s current ratio was 0.92 at February 29,2008 compared to 0.90 at August 31, 2007. On March 11, 2008, theCompany entered into an Extension and Amendment Agreement with its lenders thatextended the termination date of all revolving loans from March 1, 2008 toJuly 31, 2008.  Additionally, theprincipal payments for the Tranche A and Tranche B term loans were deferred forthe months of March, April, May, June and July of 2008 until thematurity date of the applicable loan. The Company is current on all interest and principal payments asrequired for the quarter ending February 29, 2008 and complied with itsminimum monthly EBITDA requirement for all months but one as of the end of thesecond quarter of fiscal 2008. The amended and restated credit agreementprovides for a $95.5 line of credit, consisting of a $15.0 million revolvingnote that terminates on March 1, 2008, a short term revolving note of $2.5million that also terminates on March 1, 2008 and $78.0 million in termnotes with principal repayment schedules resulting in retirement beginning in2014.  Certain financial benchmarks andratios contained in the credit agreements have had their effective datesextended until July 31, 2008.  Inthe interim period, the Company must produce a minimum EBITDA of $1.0 millionper month.  To the extent that EBITDAexceeds $1.0 million in any month, up to $200 is to be placed in an interestbearing escrow account to be used for the Thompson wastewater project.  The Company has agreed to explore strategicalternatives on terms, conditions and time frames mutually agreed between theCompany and its lenders.

 

The Company may requiresignificant additional capital resources in order to proceed with potentialfuture expansions or to otherwise respond to competitive pressures in theindustry.   In addition, the Company may seek additional capital froman offering of our equity securities or by incurring additional indebtedness,or both.  No assurance can be given that additional working capital willbe obtained in an amount that is sufficient for the Company’s needs, in atimely manner or on terms and conditions acceptable to the Companyor its members.  The Company’s financing needs are basedupon management estimates as to future revenue and expense. Our business planand our financing needs are also subject to change based upon, among otherfactors, market and industry conditions, our ability to increase cashflow from operations and our ability to control costs and expenses.  Ourefforts to raise additional funds from the sale of equity may be hamperedby the fact that our securities are illiquid and are subjectto restrictions on transfer. Our efforts to raise additionalfunds from incurring additional indebtedness may be hampered by the factthat the Company has significant outstanding indebtedness and all ofthe Company’s assets are pledged to its lenders to secure existingdebt.

 

The Company was unable tomeet all of the terms and conditions associated with the commitment from a newlender received on December 13, 2007, and the commitment has expired.

 

The Company’s long-termdebt at February 29, 2008, including current maturities, was$75.8 million compared to $94.2 million at August 31, 2007. Asof February 29, 2008, $14.7 million has been drawn against the $17.5revolving line of credit including the $2.5 million short term revolving note,compared to $11.9 million as of August 31, 2007. Substantially all tradereceivables and inventories collateralize the Company’s line of credit andproperty, plant and equipment collateralize the Company’s long-term debt underits credit agreement.

 

With respect theimprovements that will be required to the Thompson, Iowa wastewater system (seePart II, Item 1 “Legal Proceedings”), the Company is currently estimatingthe cost of these improvements.

 

On February 15,2008, the Company and Land O’ Lakes executed an agreement whereby the purchaseprice of the Egg Products Division of MoArk was reduced by $17.0 million and anequal amount of the subordinated note used to finance the acquisition wasreduced.  Additionally, the Companyissued a Warrant for the purchase of up to 880,492 newly authorized convertiblepreferred units in exchange for the forgiveness of accrued interest on thesubordinated note of $3.2 million. The 697,350 Class B units held by LandO’ Lakes were converted to Class A units per the agreement.

 

11

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Net cash flow fromoperations was $(0.7) million for the first two quarters of fiscal 2008compared to $(0.3) million in the first half of fiscal 2007. Principal paymentson long-term debt were $1.5 million and additions to fixed assets were $0.2million.  There were no distributions to unit holders during the first twoquarters of fiscal 2008.  An additional $0.4 million was added torestricted cash to provide for the principal payment on the 1999 and 2001 bondsdue in July 2008.

 

**CriticalAccounting Policies and Estimates**

 

The above discussion andanalysis of our results of operations and financial condition are based uponour consolidated condensed financial statements, which have been prepared inaccordance with accounting principles generally accepted in the United States.The preparation of these financial statements requires management to makeestimates and judgments that affect the reported amounts of assets,liabilities, revenues and expenses, and related disclosure of contingent assetsand liabilities. These estimates form the basis for making judgments about thecarrying values of assets and liabilities that are not readily apparent fromother sources. We base our estimates and judgments on historical experience andon various other assumptions that we believe are reasonable under thecircumstances. However, future events may change and even the best estimatesand judgments may require adjustment. For a complete description of the Company’ssignificant accounting policies, please see Note 1 to the consolidatedfinancial statements in the Company’s Annual Report on Form 10-K for theyear ended August 31, 2007. There have been no changes to criticalaccounting policies identified in our Annual Report on Form 10-K for theyear ended August 31, 2007.

 

Tangible Assets

 

We continually evaluatethe carrying value of our tangible assets for events or changes incircumstances that indicate that the carrying value may not be recoverable. Aspart of this reevaluation, if impairment indicators are present, we estimatethe future cash flows expected to result from the use of this asset and itseventual disposal. During the second quarter of Fiscal year 2008, the Companyrecognized impairment of assets for two discontinued operations and thedecision to exit the Retail test market. We determined that an impairment of  $0.2 million had occurred at the Vernonfacility in California. The Vernon facility has ceased all productionoperations due to a decrease of egg supply and excess production capacity. TheAbbeville facility incurred a loss of egg supply and has terminated the breakingof shell eggs. This resulted in impairment of $0.2 million. With the conclusionof the test marketing of retail sales in the Northeast, the Company hascancelled license agreements with Land O’Lakes (Form 8K filed 2/20/2008)and has determined that the company will exit the retail test market.Impairment charges of $0.5 million were incurred. All impairment charges wererecorded in the operations section of the Statement of Operations.

 

Intangible Assets

 

As aresult of the MoArk Acquisition that was completed June 30, 2006, weacquired intangible assets consisting of licenses to use certain brand namesand trademarks, licenses of certain product technology and certain patents andpatent applications.  We have recorded the excess of consideration paidover assets acquired.  Financial Accounting Standard No. 141 “BusinessCombinations” dictates that values be assigned to certain intangibleassets.  We have accordingly made estimates of the values to be carried onour books for intangible assets acquired, including registered and unregisteredtrade names and trademarks, licensing agreements, and patents and patentapplications.  The values of these assets are determined by forecastingfuture cash flows and assessing the risk of achieving the forecast.  Thoseintangible assets with finite lives will be amortized over a period matchingthe life of the underlying intellectual property, for example, the term of thelicense agreement or the remaining life of the patent. With thetermination of the retail test market and the cancelling of Land O’Lakeslicensing agreements (Form 8K filed 2/20/2008), impairment was recognizedfor the intangible Land O’Lakes license agreement of $3.2 million. This wasrecorded in the operations section of the Statement of Operations.

 

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Thoseintangibles with indefinite lives have been recorded as goodwill, and will notbe amortized over a fixed time period.  Rather, they will be tested forimpairment when impairment indicators are deemed present.  As of February 29,2008 we tested for impairment under the provisions of SFAS No. 142. Theresults of the impairment test indicated that the fair value of the singleentity reporting unit exceeded the carrying value of the reporting unit. As aresult, no provision for impairment was required.

 

**Impactof Recently Issued Accounting Pronouncements**

 

Please refer to Item 7, “Management’sDiscussion and Analysis of Financial Condition and Results of Operations”, inour Annual Report form 10-K for the year ended August 31, 2007 for adiscussion of the impact of recently issued accounting pronouncements

 

In September 2006,the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 157,Fair Value Measurements (“FAS 157”).  FAS 157 establishes a singleauthoritative definition of fair value, sets out a framework for measuring fairvalue, and expands on required disclosures about fair value measurement. The effective date of FAS 157 has been deferred one year which means the companyeffective date will be September 1, 2009.  The provisions of FAS 157are not expected to have a material impact on our consolidated financialstatements.

 

In February 2007,the FASB issued SFAS No. 159, “Establishing the Fair Value Option forFinancial Assets and Liabilities,” to permit all entities to choose to elect tomeasure eligible financial instruments at fair value.  SFAS No. 159applies to fiscal years beginning after November 15, 2007 with earlyadoption permitted for an entity that has also elected to apply the provisionsof SFAS No. 157, “Fair Value Measurements.”  An entity is prohibitedfrom retrospectively applying SFAS No. 159, unless it chooses earlyadoption.  Management is currently evaluating the impact of SFAS No. 159on its consolidated financial statements.

 

In December 2007,the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 160,Noncontrolling Interests in Consolidated Financial Statements (“FAS 160”). FAS160 establishes accounting and reporting standards for the4 noncontrollinginterest in a subsidiary and for the deconsolidation of a subsidiary. Theeffective date of FAS 160 is for fiscal years beginning on or after December 15,2008. Golden Oval is reviewing  FAS160  to determine what impact  it may have to the consolidated financialstatements.

 

In March 2008, theFinancial Accounting Standards Board (“FASB”) issued FASB Statement No. 161,Disclosures about Derivative Instruments and Hedging Activities, an Amendmentto FASB Statement No. 133. FAS 161 establishes the disclosure requirementsfor derivative instruments and hedging activities and expands the disclosurerequirements of statement 133. The effective date for financial statementsissued for fiscal years and interim periods beginning after November 15,2008. Golden Oval is reviewing FASB 161 but anticipates very little impact tothe Company.

 

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**Item 3. Quantitative and Qualitative Disclosures About MarketRisk**

 

There have been nomaterial changes in the market risk reported in the Company’s Annual Report on Form 10-Kfor the fiscal year ended August 31, 2007.

 

**Item 4. Controls and Procedures**

 

**Evaluationof Disclosure Controls and Procedures**

 

The Company’s ChiefExecutive Officer, Dana Persson, and Chief Financial Officer, Thomas A. Powell,have reviewed the Company’s disclosure controls and procedures as of the end ofthe period covered by this report. Based upon this review, they have concludedthat there is a continuing deficiency in the Company’s disclosure controls andprocedures as described in Part II, Item 9A “Controls and Procedures” ofthe Company’s Annual Report on Form 10-K for the year ended August 31,2007.  During the first quarter, the Company secured additional personnelresources to assist with the consolidation and financial reporting process,which resulted in significant progress toward addressing the deficiency in ourdisclosure controls and procedures.  TheCompany continues, however, to evaluate other possible remedial actions toimprove our disclosure controls and procedures.

 

**Changesin Internal Control over Financial Reporting**

 

Except for the additionof personnel resources to address the deficiency in disclosure controls andprocedures as described above, there have been no changes in internal controlover financial reporting that occurred during the fiscal quarter covered bythis report that have materially affected, or are reasonably likely tomaterially affect, the Company’s internal control over financial reporting.

 

**PART II.    OTHER INFORMATION**

 

**Item 1. Legal Proceedings**

 

Our Thompson, Iowafacility has an industrial wastewater treatment facility designed to treatwastewater from egg breaking.  The Thompson facility also has anassociated National Pollution Discharge and Elimination System (“NPDES”) permitfrom the Iowa Department of Natural Resources (“IDNR”) that governs the qualityof the wastewater influent to and effluent from the treatment facility.

 

In 2006, IDNR issuedthree Notices of Violation (“NOV”) against us regarding alleged violations ofthe NPDES permit discharge limits for biochemical oxygen demand, totalsuspended solids, and ammonia nitrogen.

 

On March 29, 2007,the Iowa Attorney General’s office filed suit against us requesting civilpenalties and injunctive relief against further NPDES permit violations. We have received extensions from the Iowa District Court for Winnebago Countyto submit our Answer to the suit, and during this time we have been negotiatingthe terms of a Consent Decree with the Iowa Attorney General’s office. Currently, we have until April 30, 2008 to submit our Answer.  Weexpect the terms of the Consent Decree to include an obligation by us to makeimprovements to the Thompson wastewater treatment system to prevent furtherpermit violations on an agreed-upon timeline, as well as the amount of a civilpenalty.

 

Consistent with thisexpectation, we applied to IDNR for a permit for construction of permanentimprovements to the Thompson wastewater treatment system.  We received the permit in February 2008,and we are in the process of preparing for construction of the improvements,which we anticipate will be 

 

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completed in 2008. In addition, operational changes have been made at the wastewater facility thathave achieved significant improvement in compliance with the NPDES permitrequirements.

 

At this time, the costassociated with the interim solution, permanent improvement to the wastewatertreatment facility, compliance with the NPDES permit, and the amount of penaltyor fine imposed by the Iowa Attorney General cannot be estimated, however theymay be significant, both individually and in the aggregate.

 

On March 27, 2008,we received a subpoena from the U.S. Department of Justice, through the U.S.Attorney for the Eastern District of Pennsylvania, requesting documents for theperiod of January 1, 2002 through March 27, 2008 relating primarilyto the pricing, marketing, and sales of our egg products. We intend to fullycooperate with the Department of Justice request. We cannot predict what, ifany, impact this inquiry and any results from this inquiry could have on ourcurrent or future operations or results of operations.

 

**Item 1A. Risk Factors**

 

We are a party to anAmended and Restated Credit Agreement dated June 30, 2006, which has beenamended by a First Amendment to the Amended and Restated Credit Agreement datedApril 30, 2007, by a Second Amendment to the Amended and Restated CreditAgreement dated October 19, 2007 and an “Extension Agreement” dated December 13,2007.  The Amended and Restated Credit Agreement as amended by the variousamendments and the extension agreement is referred to herein as the “AmendedCredit Agreement”.  On March 11, 2008, the Company, COBANK ACB (the “AdministrativeAgent”) and the banks and other financial institutions or entities, includingCOBANK ACB, which are parties to the Amended Credit Agreement entered into an “Extensionand Amendment Agreement”.  Pursuant to the Extension and AmendmentAgreement, the lenders granted the Company’s request for certain accommodationsunder the Amended Credit Agreement.

 

Pursuant to the Extensionand Amendment Agreement, the “Termination Date” as it applies to the Company’sRevolving Loans under the Amended Credit Agreement is extended to July 31,2008.  In addition, the due dates for principal payments with respect tothe Company’s Tranche A and Tranche B Loans have been extended.  Thosepayments which were due on March 20, 2008, April 20, 2008, May 20,2008, June 20, 2008 and July 20, 2008 are deferred until the MaturityDate of the applicable Tranche Loan.  Finally, the date for the Company tomeet certain financial benchmarks and ratios pursuant to the Amended CreditAgreement was extended from March 1, 2008 to the Termination Date of July 31,2008.  Commencing with the month of March, 2008, the Company is requiredto maintain a monthly minimum EBITDA of One Million Dollars ($1,000,000). The Company must also escrow certain amounts each month to provide for the costsand expenses of associated with remedying certain regulatory violations at theCompany’s facility in Thompson, Iowa.

 

Under the Extension andAmendment Agreement, the Company is obligated to explore strategic alternativesupon such terms and conditions and within such time frames as may be mutuallyagreed by the Company and the lenders under the Amended Credit Agreement. The Company will seek alternatives that provide for the mutual benefit of theCompany and its lenders.  The Company is required to regularly report tothe lenders regarding the status of its efforts.

 

An Event of Default willoccur under the Extension and Amendment Agreement if the Company fails tocomply with any of the requirements of the Amended Credit Agreement or theExtension and Amendment Agreement.   In addition, the lender maydeclare an Event of Default upon three days written notice if the lendersreasonably believe that the Company will be unable to comply with any mutuallyagreed-upon arrangements regarding the Company’s strategic alternatives.

 

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No assurance can be giventhat we will be able to identify or consummate a strategic alternative uponterms and conditions or within such time frames as may be mutually agreed to byus and the lenders.  Our efforts toidentify or negotiate an acceptable strategic alternative may be hampered byeconomic conditions related to credit markets, egg markets, commodity markets,or the U.S.  economy, or our inability tosuccessfully execute the Company’s plans. If we do not consummate an acceptable strategic alternative or if weotherwise default upon our Amended Credit Agreement and the obligations thereunder were to become accelerated and due, we may be required to curtailsignificantly or stop our business activities.

 

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**Item 2. Unregistered Sales of Equity Securities and Use ofProceeds**

 

None.

 

**Item 3. Defaults Upon Senior Securities**

 

None.

 

**Item 4. Submission of Matters to a Vote of Security Holders**

 

None.

 

**Item 5. Other Information**

 

None.

 

**Item 6. Exhibits**

 
| **Exhibit  No.** | ** ** | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 3.4              |       | Amendment No. 1 to  Amended and Restated Limited Liability Company Agreement of Golden Oval Eggs,  LLC dated as of February 15, 2008 (incorporated by reference to  Exhibit 3.4 to Form 8-K (File No. 000-51096) filed with the  Commission on February 20, 2008).                                                                                                                                                                  |
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 3.5              |       | Certificate of  Designation of Class A Convertible Preferred Units of Golden Oval Eggs,  LLC effective as of February 15, 2008 (incorporated by reference to  Exhibit 3.5 to Form 8-K (File No. 000-51096) filed with the  Commission on February 20, 2008).                                                                                                                                                                        |
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.1             |       | Amendment to Purchase  Agreement dated February 15, 2008 by and among Moark, LLC, Cutler at  Abbeville, L.L.C., Hi Point Industries, LLC, L & W Egg  Products, Inc., Norco Ranch, Inc., Moark Egg Corporation, Land  O’Lakes, Inc., Golden Oval Eggs, LLC, and GOECA, LP (incorporated by  reference to Exhibit 10.1to Form 8-K (File No. 000-51096)  filed with the Commission on February 20, 2008). |
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.2             |       | Warrant dated  February 15, 2008 to purchase 880,492 Class A Convertible Preferred  Units of Golden Oval Eggs, LLC issued to Land O’Lakes, Inc.  (incorporated by reference to Exhibit 10.2 to Form 8-K (File  No. 000-51096) filed with the Commission on February 20, 2008).                                                                                                                                            |
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.3             |       | Extension Agreement  dated December 13, 2007 to the to the Second Amendment to the Amended  and Restated Credit Agreement effective as of October 19, 2007 by and  between Golden Oval Eggs, LLC, GOECA, LP and Midwest Investors of Iowa as  borrowers, by Metropolitan Life Insurance Company, as a bank and lender, and  by CoBank, ACB as a lender and administrative agent (filed herewith).                                                       |
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.4             |       | Extension and Amendment  Agreement dated March 11, 2008 to the Second Amendment to the Amended and  Restated Credit Agreement effective as of October 19, 2007 by and  between Golden Oval Eggs, LLC, GOECA, LP and Midwest Investors of Iowa as  borrowers, by Metropolitan Life Insurance Company, as a bank and lender, and  by CoBank, ACB as a lender and administrative agent (filed herewith).                                                   |
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 31.1             |       | Certification of the  Chief Executive Officer pursuant to Rule 13a-14(a) or  Rule 15d-14(a) of the Exchange Act.                                                                                                                                                                                                                                                                                                                              |
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 31.2             |       | Certification of the  Chief Financial Officer pursuant to pursuant to Rule 13a-14(a) or  Rule 15d-14(a) of the Exchange Act.                                                                                                                                                                                                                                                                                                                  |
|             |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 32.1             |       | Certification of the  Chief Executive Officer and Chief Financial Officer pursuant to 18  U.S.C. Section 1350                                                                                                                                                                                                                                                                                                                                           |

 

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**SIGNATURES**

 

Pursuant to therequirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned, thereuntoduly authorized.

 
|                             | GOLDEN OVAL EGGS, LLC                          |
|----------------------------------|------------------------------------------------|
|                             |                                           |
|                             |                                           |   |
|                             | By:                                            | /s/ Dana Persson |   |
|                             | President and Chief  Executive Officer         |
|                             | (Principal Executive  Officer)                 |
|                             |                                           |   |
|                             | By:                                            | /s/ Thomas A. Powell |   |
|                             | Vice President and  Chief Financial

Officer   |
|                             | (Principal Financial  and Accounting

Officer) |
|                             |                                           |   |
| Date:   April 14, 2007 |                                           |   |
|                                  |                                                |  |  |  |

 

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