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Published: 2023-07-25 16:07:17 ET
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EX-99.1 5 exhibit991.htm EX-99.1 exhibit991
exhibit991p1i0
 
Exhibit 99.1
-MORE-
Contacts:
Sherman Miller, President and CEO
Max P. Bowman, Vice President and CFO
(601) 948-6813
CAL-MAINE FOODS REPORTS RESULTS
FOR FOURTH QUARTER AND FISCAL YEAR 2023
ANNOUNCES QUARTERLY CASH DIVIDEND OF $0.76 PER SHARE
RIDGELAND, Miss. (July 25,
 
2023) - Cal-Maine Foods,
 
Inc. (NASDAQ: CALM) (“Cal-Maine
 
Foods” or the
“Company”), the
 
largest producer and
 
distributor of
 
fresh shell
 
eggs in
 
the United
 
States, today reported
results for the fourth
 
quarter of fiscal 2023
 
(fourteen weeks) and fiscal
 
year 2023 (fifty-three weeks)
 
ended
June 3, 2023. The
 
fourth quarter of fiscal
 
2022 was a thirteen-week
 
period and fiscal year
 
2022 was a fifty-
two week period.
 
Fourth Quarter and Fiscal Year 2023 Highlights
●
Quarterly net sales of $688.7 million, driven by increased sales volumes
 
●
Quarterly net income of $110.9 million, or $2.28 per basic and $2.27 per diluted
 
common share
●
Fiscal year net sales of $3.1 billion and net income of $758.0 million
●
Cash dividend of $37.1 million, or $0.76 per share, pursuant to the Company’s
 
established
dividend policy
Overview
Sherman Miller, president and chief executive officer
 
of Cal-Maine Foods, Inc. stated, “Our
 
fourth
quarter performance marked
 
a solid finish
 
to a strong fiscal
 
year for Cal-Maine
 
Foods. Our results
 
for fiscal
2023
 
reflect
 
the
 
extreme
 
market
 
conditions
 
we
 
faced,
 
with
 
significantly
 
higher
 
average
 
selling
 
prices
compared
 
with
 
the
 
prior-year
 
period,
 
primarily
 
due
 
to
 
the
 
highly
 
pathogenic
 
avian
 
influenza
 
(“HPAI”)
outbreak and higher grain and
 
other input costs. Prices
 
in the fourth quarter have
 
decreased significantly
from the fiscal
 
year’s highest levels
 
as the egg
 
industry begins to
 
recover from the
 
effects of HPAI.
 
At the
same time,
 
strong consumer
 
demand for
 
shell eggs
 
supported higher
 
sales for
 
the fourth
 
quarter, which
included the busy Easter holiday season.
“Our operations continued
 
to run well
 
in the fourth
 
quarter despite a
 
challenging environment with
inflationary
 
pressures
 
affecting
 
our
 
feed
 
and
 
other
 
production
 
costs.
 
Cal-Maine
 
Foods
 
has
 
a
 
proven
operating
 
model
 
that
 
has
 
sustained
 
our
 
business
 
throughout
 
various
 
economic
 
cycles,
 
and
 
we
 
remain
focused on
 
managing the
 
aspects of
 
our business
 
that we
 
can control.
 
The added
 
challenges of
 
the HPAI
outbreak have
 
adversely affected
 
the overall
 
egg supply,
 
and we
 
have continued
 
to navigate
 
through the
related
 
disruptions to
 
meet the
 
needs of
 
our
 
valued
 
customers. Cal-Maine
 
Foods has
 
robust biosecurity
measures in
 
place across
 
our operations,
 
and we
 
continue to
 
invest in
 
additional resources
 
necessary to
reduce risk.
 
We commend
 
our dedicated
 
managers and
 
employees across
 
our operations
 
who have
 
followed
strict protocols and efficiently managed our operations under difficult
 
conditions.”
Sales Performance & Operating Highlights
Max Bowman, vice president and chief financial
 
officer of Cal-Maine Foods, added, “For the fourth
quarter of fiscal
 
2023, our net
 
sales were $688.7
 
million compared with
 
$593.0 million for
 
the same period
last
 
year.
 
Our
 
top
 
line
 
growth
 
was
 
driven
 
by
 
higher
 
average
 
selling
 
price
 
for
 
specialty
 
eggs
 
as
 
well
 
as
increased sales
 
volumes of
 
both conventional
 
and specialty
 
eggs, due
 
in part
 
to having
 
14 weeks
 
in the
 
fourth
quarter of fiscal 2023 compared with 13 weeks in the prior-year period. Net income for
 
the fourth quarter
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cal-Maine Foods Reports Fourth Quarter and Fiscal 2023 Results
Page 2
July 25,
 
2023
-MORE-
of fiscal 2023
 
was $110.9 million, or
 
$2.27 per diluted share,
 
compared with $110.0 million,
 
or $2.25 per
diluted share, for the fourth quarter of fiscal 2022.
“For
 
fiscal
 
2023,
 
net
 
sales
 
were
 
$3.1
 
billion
 
compared
 
with
 
$1.8
 
billion
 
for
 
fiscal
 
2022,
 
and
 
net
income was
 
$758.0 million,
 
or $15.52
 
per diluted
 
share, compared
 
with net
 
income of
 
$132.7 million,
 
or
$2.72
 
per
 
diluted
 
share.
 
These
 
results
 
reflect
 
the
 
impact
 
of
 
the
 
HPAI
 
outbreak
 
throughout
 
fiscal
 
2023,
which began
 
in February
 
2022 and
 
caused higher
 
prices for
 
shell eggs
 
due to
 
the reduced
 
egg supply.
 
In
addition, our
 
specialty egg
 
net average
 
selling price
 
also increased
 
in response
 
to rising
 
feed and
 
other input
costs.
“Conventional egg
 
net average
 
selling price
 
per dozen
 
was $2.038
 
for the
 
fourth quarter
 
of fiscal
2023 compared with $2.108 the prior-year quarter and $2.739 for fiscal 2023. However, conventional egg
selling prices declined significantly during
 
the latter part of the
 
fourth quarter of fiscal 2023.
 
Net average
selling price
 
for specialty
 
eggs rose
 
to $2.499
 
per dozen,
 
compared with
 
$2.015 per
 
dozen for
 
the fourth
quarter of fiscal 2022 and $2.403 for fiscal 2023. Specialty dozens sold were 34.6% of total dozens sold in
the fourth quarter of fiscal 2023 compared with 34.0% in the prior-year period.
 
“We reported
 
operating income
 
of $136.2
 
million for
 
the fourth
 
quarter of
 
fiscal 2023,
 
compared
with
 
$145.7
 
million
 
for
 
the
 
prior
 
year
 
quarter,
 
and
 
operating
 
income
 
of
 
$967.7
 
million
 
for
 
fiscal
 
2023
compared with $143.5
 
million for fiscal
 
2022. We remained
 
focused on disciplined
 
cost management as
 
we
continued to
 
incur higher
 
costs across
 
various inputs
 
including feed,
 
labor, packaging,
 
and distribution.
Overall,
 
fourth
 
quarter
 
farm
 
production
 
costs
 
per
 
dozen
 
increased
 
9.9%
 
compared
 
with
 
the
 
prior-year
quarter, primarily
 
tied to
 
higher flock
 
amortization and
 
facility costs.
 
For fiscal
 
2023, farm
 
production costs
per
 
dozen
 
increased
 
16.1%
 
compared
 
with
 
fiscal
 
2022,
 
primarily
 
tied
 
to
 
higher
 
feed,
 
facility,
 
and
 
flock
amortization costs. For the fourth
 
quarter of fiscal 2023, feed
 
costs per dozen were $0.671,
 
a 4.7% increase
compared
 
with
 
the
 
fourth
 
quarter
 
of
 
fiscal
 
2022.
 
For
 
fiscal
 
2023, feed
 
costs
 
per
 
dozen
 
were
 
$0.676, an
18.4% increase
 
compared with
 
fiscal 2022.
 
Supplies of
 
corn and
 
soybean remained
 
tight relative
 
to demand,
as evidenced
 
by a
 
low stock-to-use
 
ratio for
 
corn, due
 
to weather-related
 
shortfalls in
 
production and
 
yields,
ongoing
 
supply-chain
 
disruptions
 
and
 
the
 
Russia-Ukraine
 
war
 
and
 
its
 
impact
 
on
 
the
 
export
 
markets.”
added Bowman.
 
14 Weeks Ended
June 3, 2023
13 Weeks Ended
May 28, 2022
53 Weeks Ended
June 3, 2023
52 Weeks Ended
May 28, 2022
Dozen Eggs Sold (000)
296,554
271,961
1,147,373
1,083,789
Conventional Dozen Eggs Sold (000)
194,031
179,396
749,076
747,914
Specialty Dozen Eggs Sold (000)
102,523
92,565
398,297
335,875
Dozen Eggs Produced (000)
276,354
264,650
1,058,540
1,022,327
% Specialty Sales (dozen)
34.6
%
34.0
%
34.7
%
31.0
%
% Specialty Sales (dollars)
39.1
%
32.9
%
31.6
%
37.8
%
Net Average Selling Price (per dozen)
$
2.197
$
2.076
$
2.622
$
1.579
Net Average Selling Price Conventional
Eggs (per dozen)
$
2.038
$
2.108
$
2.739
$
1.420
Net Average Selling Price Specialty
Eggs (per dozen)
$
2.499
$
2.015
$
2.403
$
1.932
Feed Cost (per dozen)
$
0.671
$
0.641
$
0.676
$
0.571
Product Mix & Cage-Free Eggs
An important focus of Cal-Maine’s growth strategy is the expansion of its cage-free egg production
capacity
 
in
 
line
 
with
 
expected
 
demand.
 
As
 
previously
 
reported,
 
a
 
significant
 
number
 
of
 
the
 
Company’s
customers have
 
announced goals
 
to offer
 
cage-free eggs
 
exclusively on
 
or before
 
2026, subject
 
in most
 
cases
to availability
 
of supply, affordability,
 
and consumer demand,
 
among other
 
contingencies. Some of
 
these
customers have
 
recently changed
 
those goals
 
to offer
 
70% cage-free
 
eggs by
 
the end
 
of 2030.
 
Cal-Maine
Cal-Maine Foods Reports Fourth Quarter and Fiscal 2023 Results
Page 3
July 25,
 
2023
-MORE-
Foods continually strives
 
to engage
 
with customers to
 
help them
 
meet their
 
expected cage-free timelines
and goals.
 
Cal-Maine Foods
 
has made
 
significant investments
 
in its
 
production and
 
distribution capabilities
as sales of
 
cage-free eggs continue
 
to increase and
 
account for a
 
larger share of
 
the Company’s product
 
mix.
Cage-free egg sales comprised 26.2% and 20.1% of total net
 
shell egg sales for the fourth quarter and fiscal
year 2023, respectively.
Table Egg Supply Outlook
The current
 
HPAI outbreak
 
has had
 
a significant
 
impact, lasting
 
twice as
 
long as
 
the prior
 
2014-
2015 outbreak
 
and affecting
 
a larger
 
number of
 
hens in
 
the U.S.
 
Approximately 43.3 million
 
commercial
layer
 
hens
 
and
 
1.0
 
million
 
pullets
 
have
 
been
 
depopulated
 
due
 
to
 
HPAI,
 
leading
 
to
 
higher
 
prices
 
for
conventional shell eggs beginning in the
 
fourth quarter of fiscal 2022 and
 
continuing into the first part of
the fourth quarter of
 
fiscal 2023. Though the
 
virus is still
 
present in the wild
 
bird population, HPAI
 
has not
been detected in a commercial egg-laying flock since December 2022. While
 
it is evident the industry and
USDA have devoted significant resources to attempt to prevent future outbreaks, no farm is
 
immune, and
the focus is now on the fall migration season.
 
Layer hen numbers reported by the USDA as
 
of July 1, 2023, were 317.4 million, which
 
represents
an increase
 
of 5.6%
 
compared with
 
the layer
 
hen inventory
 
a year
 
ago. The
 
USDA also
 
reported that
 
the
hatch
 
from
 
February
 
2023
 
through
 
June
 
2023
 
increased
 
2.1%
 
as
 
compared
 
with
 
the
 
prior-year
 
period,
indicating that layer flocks may continue to increase in the future.
 
In calendar year 2022, per capita U.S.
 
consumption was estimated to be 279
 
eggs. According to the
USDA, the
 
decline in
 
consumption was
 
primarily due
 
to limited
 
availability caused
 
by the
 
outbreak of
 
HPAI.
As of July 18, 2023,
 
the USDA projects that
 
the per capita consumption
 
will increase in calendar
 
year 2023
and 2024 to 282.6 and 292.7, respectively.
Looking Ahead
Miller
 
added,
 
“We
 
are
 
proud
 
of
 
our
 
performance
 
over
 
the
 
past
 
year
 
as
 
we
 
demonstrated
 
solid
execution of our organic growth
 
strategy in a dynamic market
 
environment. Despite ongoing uncertainties
related to HPAI and other macroeconomic concerns, we remained focused on managing our operations as
efficiently and safely
 
as possible. We
 
have continued to
 
deliver against our
 
key performance metrics,
 
and
we commend the work
 
of our managers and
 
employees for their dedication and
 
continued support of our
valued
 
customers. Across
 
our
 
operations,
 
we
 
have
 
a
 
shared
 
commitment to
 
our
 
mission
 
to
 
be
 
the
 
most
reliable and sustainable
 
producer of fresh shell
 
eggs and egg products.
 
While egg prices
 
were higher during
most of fiscal 2023 due primarily to the impact of HPAI and higher grain and other
 
input costs, they have
returned to pricing
 
levels more in
 
line with historic
 
norms.
 
Moving forward, we
 
believe that the
 
demand
for affordable
 
food choices
 
will continue
 
to grow.
 
As the
 
largest producer
 
and distributor
 
of fresh
 
shell eggs,
we are well positioned to support this
 
need in more communities.
 
Eggs offer a great nutritional value
 
with
high quality
 
protein and essential
 
vitamins and minerals
 
for healthy
 
living such
 
as choline, vitamin
 
B12 and
iodine. Cal-Maine Foods’ proven operating model and differentiated product mix
 
continue to support our
ability to
 
meet changing
 
customer demand
 
and extend
 
our market
 
reach. Importantly,
 
we have
 
the financial
strength
 
to
 
support
 
our
 
growth
 
strategy,
 
which
 
includes
 
acquisitions
 
and
 
organic
 
growth,
 
and
 
we
 
look
forward to the opportunities ahead for Cal-Maine Foods in fiscal 2024.”
 
Dividend Payment
For the
 
fourth quarter
 
of fiscal
 
2023, Cal-Maine
 
Foods will
 
pay a
 
cash dividend
 
of approximately
$0.76 per
 
share to
 
holders of
 
its common
 
and Class
 
A common
 
stock. Pursuant
 
to Cal-Maine
 
Foods’ variable
dividend
 
policy,
 
for
 
each
 
quarter
 
in
 
which
 
the
 
Company
 
reports
 
net
 
income,
 
the
 
Company
 
pays
 
a
 
cash
dividend to
 
shareholders in an
 
amount equal
 
to one-third
 
of such
 
quarterly income.
 
Following a
 
quarter
for which the
 
Company does not
 
report net income,
 
the Company will
 
not pay a
 
dividend with
 
respect to
that quarter or
 
for a subsequent
 
profitable quarter until
 
the Company is
 
profitable on
 
a cumulative basis
Cal-Maine Foods Reports Fourth Quarter and Fiscal 2023 Results
Page 4
July 25,
 
2023
-MORE-
computed from
 
the date
 
of the
 
most recent
 
quarter for
 
which a
 
dividend was
 
paid. The
 
amount paid
 
per
share will vary based on the number
 
of outstanding shares on the record date. The
 
dividend is payable on
August 22, 2023, to holders of record on August 7, 2023.
About Cal-Maine Foods
Cal-Maine Foods, Inc.
 
is primarily engaged
 
in the production,
 
grading, packaging, marketing
 
and
distribution
 
of
 
fresh
 
shell
 
eggs,
 
including
 
conventional,
 
cage-free,
 
organic,
 
brown,
 
free-range,
 
pasture-
raised and nutritionally enhanced eggs.
 
The Company, which is
 
headquartered in Ridgeland, Mississippi,
is the largest
 
producer and distributor of
 
fresh shell eggs in
 
the United States and
 
sells the majority of
 
its
shell
 
eggs
 
in
 
states across
 
the southwestern,
 
southeastern, mid-western
 
and mid-Atlantic
 
regions of
 
the
United States.
Forward Looking Statements
Statements
 
contained
 
in
 
this
 
press
 
release
 
that
 
are
 
not
 
historical
 
facts
 
are
 
forward-looking
statements as that term
 
is defined in the
 
Private Securities Litigation Reform
 
Act of 1995.
 
The forward-
looking
 
statements
 
are
 
based
 
on
 
management’s
 
current
 
intent,
 
belief,
 
expectations,
 
estimates
 
and
projections
 
regarding
 
our
 
company
 
and
 
our
 
industry.
 
These
 
statements
 
are
 
not
 
guarantees
 
of
 
future
performance and involve risks, uncertainties, assumptions and other factors that
 
are difficult to predict
and may be
 
beyond our
 
control. The
 
factors that could
 
cause actual results
 
to differ materially
 
from those
projected in
 
the
 
forward-looking statements
 
include, among
 
others, (i)
 
the
 
risk factors
 
set forth
 
in the
Company’s SEC
 
filings (including
 
its Annual
 
Reports on
 
Form 10-K, Quarterly
 
Reports on
 
Form 10-Q
 
and
Current Reports
 
on Form
 
8-K),
 
(ii) the
 
risks and
 
hazards inherent
 
in the
 
shell egg
 
business (including
disease, pests, weather
 
conditions and potential
 
for recall),
 
including but not
 
limited to the
 
most recent
outbreak of highly pathogenic avian influenza affecting poultry in the
 
U.S., Canada and other countries
that was first detected in commercial flocks in the
 
U.S. in February 2022, (iii) changes in the demand
 
for
and market prices of shell eggs and
 
feed costs, (iv) our ability to predict and
 
meet demand for cage-free
and other specialty eggs,
 
(v) risks, changes or obligations
 
that could result from
 
our future acquisition of
new
 
flocks
 
or
 
businesses
 
and
 
risks
 
or
 
changes
 
that
 
may
 
cause
 
conditions
 
to
 
completing
 
a
 
pending
acquisition not to be
 
met, (vi) risks
 
relating to increased costs,
 
rising inflation and interest rates,
 
which
began in response to
 
market conditions caused in
 
part by the
 
COVID-19 pandemic and which generally
have been exacerbated
 
by the Russia-Ukraine
 
war that
 
began in February
 
2022, (vii) our
 
ability to
 
retain
existing
 
customers,
 
acquire
 
new
 
customers
 
and
 
grow
 
our
 
product
 
mix,
 
and
 
(viii)
 
adverse
 
results
 
in
pending
 
litigation
 
matters
 
.
 
SEC
 
filings
 
may
 
be
 
obtained
 
from
 
the
 
SEC
 
or
 
the
 
Company’s
 
website
,
www.calmainefoods.com.
 
Readers
 
are
 
cautioned
 
not
 
to
 
place
 
undue
 
reliance
 
on
 
forward-looking
statements because,
 
while we
 
believe the
 
assumptions on
 
which the
 
forward-looking
 
statements are
 
based
are
 
reasonable,
 
there
 
can
 
be
 
no
 
assurance
 
that
 
these
 
forward-looking
 
statements
 
will
 
prove
 
to
 
be
accurate.
 
Further, the
 
forward-looking statements
 
included herein
 
are
 
only
 
made
 
as
 
of
 
the
 
respective
dates
 
thereof,
 
or
 
if
 
no
 
date
 
is
 
stated,
 
as
 
of
 
the
 
date
 
hereof.
 
Except
 
as
 
otherwise
 
required
 
by
 
law,
 
we
disclaim
 
any
 
intent
 
or
 
obligation
 
to
 
publicly
 
update
 
these
 
forward-looking
 
statements,
 
whether
 
as
 
a
result of new information, future events or otherwise.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cal-Maine Foods Reports Fourth Quarter and Fiscal 2023 Results
Page 5
July 25,
 
2023
-MORE-
CAL-MAINE FOODS, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands, except per share amounts)
SUMMARY STATEMENTS OF INCOME
14 Weeks Ended
June 3, 2023
13 Weeks Ended
May 28, 2022
53 Weeks Ended
June 3, 2023
52 Weeks Ended
May 28, 2022
Net sales
$
688,680
$
592,964
$
3,146,217
$
1,777,159
Cost of sales
490,588
397,879
1,949,760
1,440,100
Gross profit
198,092
195,085
1,196,457
337,059
Selling, general and administrative
62,159
51,640
232,207
198,631
Insurance recoveries
(125)
(2,267)
(3,345)
(5,492)
(Gain) loss on disposal of fixed assets
(167)
13
(131)
383
Operating income
136,225
145,699
967,726
143,537
Other income, net
9,690
664
30,824
22,478
Income before income taxes
145,915
146,363
998,550
166,015
Income tax expense
35,380
36,495
241,818
33,574
Net income
110,535
109,868
756,732
132,441
Less: Loss attributable to noncontrolling
interest
(396)
(118)
(1,292)
(209)
Net income attributable to Cal-Maine
Foods, Inc.
$
110,931
$
109,986
$
758,024
$
132,650
Net income per common share:
Basic
$
2.28
$
2.26
$
15.58
$
2.73
Diluted
$
2.27
$
2.25
$
15.52
$
2.72
Weighted average shares outstanding:
Basic
48,689
48,622
48,648
48,581
Diluted
48,838
48,791
48,834
48,734
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cal-Maine Foods Reports Fourth Quarter and Fiscal 2023 Results
Page 6
July 25,
 
2023
-END-
CAL-MAINE FOODS, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands)
 
SUMMARY BALANCE SHEETS
June 3, 2023
May 28, 2022
ASSETS
Cash and short-term investments
$
647,914
$
174,513
Receivables, net
187,213
219,404
Inventories, net
284,418
263,316
Prepaid expenses and other current assets
5,380
4,286
Current assets
1,124,925
661,519
Property, plant and equipment, net
744,540
677,796
Other noncurrent assets
85,060
88,174
Total assets
$
1,954,525
$
1,427,489
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses
$
145,601
$
148,018
Dividends payable
37,130
36,656
Current liabilities
182,731
184,674
Deferred income taxes and other liabilities
162,211
138,470
Stockholders' equity
1,609,583
1,104,345
Total liabilities and stockholders' equity
$
1,954,525
$
1,427,489