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Published: 2023-10-03 16:02:15 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 FIRST QUARTER FISCAL 2024
RIDGELAND, Miss. (October
 
3, 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 first quarter of fiscal 2024 (thirteen weeks) ended September 2, 2023.
 
 
First Quarter Fiscal Year 2024 Highlights
●
Quarterly net sales of $459.3 million
●
Quarterly net income of $926,000 or $0.02 per basic and diluted common share
●
Net average selling price for specialty eggs increased 8.4 percent quarter-over-quarter
●
Cash dividend of $294,000, or $0.006 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 results
for the
 
first quarter
 
of fiscal
 
2024 reflect
 
the current
 
dynamic market
 
conditions.
 
After reaching
 
record
high levels in
 
fiscal 2023, average
 
selling prices for
 
shell eggs have
 
since returned to
 
more normalized levels
as
 
the
 
overall
 
egg
 
supply
 
recovers
 
from
 
the
 
most
 
recent
 
highly
 
pathogenic
 
avian
 
influenza
 
(“HPAI”)
outbreak, which depleted
 
the national hen
 
supply.
 
Customer demand has
 
been favorable with
 
conventional
egg volumes higher than
 
a year ago,
 
offset by lower sales
 
of specialty eggs.
 
We continue to
 
focus on offering
customers a wide
 
range of quality
 
choices in shell
 
eggs, as well
 
as egg products
 
offerings, with a
 
favorable
product mix in line with changing consumer demand trends.
 
“Our operations ran well during
 
the quarter, and we benefitted
 
from lower feed costs, although
 
we
generally
 
continued
 
to
 
incur
 
higher
 
input
 
costs.
 
Our
 
team
 
has
 
continued
 
to
 
focus
 
on
 
managing
 
our
operations in an efficient and sustainable
 
manner.
 
While there have been no recent
 
outbreaks of HPAI in
commercial
 
egg
 
laying
 
flocks,
 
we
 
remain
 
diligent
 
in
 
following
 
strict
 
protocols
 
and
 
continue
 
to
 
invest
 
in
additional resources
 
to reduce
 
future risk.
 
We commend
 
the work
 
of our
 
managers and
 
employees who
responsibly managed
 
our production
 
and continued
 
to bring
 
more quality
 
eggs to
 
the market
 
to support
our valued customers.
 
We also have a number of expansion projects underway to increase our production
capacity, and we look forward to the opportunities to expand our market reach.
 
“In addition
 
to our
 
organic growth
 
initiatives, we
 
have continued
 
to expand
 
our business
 
through
selective
 
acquisitions.
 
Following
 
the
 
end
 
of
 
the
 
first
 
quarter,
 
we
 
announced
 
a
 
definitive
 
agreement
 
to
acquire substantially all
 
the assets of
 
Fassio Egg Farms,
 
Inc., related to
 
its commercial shell
 
egg production,
and processing business, located in
 
Erda, Utah, outside of Salt Lake
 
City.
 
The assets to be acquired
 
include
facilities with a
 
current capacity of
 
approximately 1.2 million
 
laying hens, primarily
 
cage-free, a feed
 
mill,
pullets,
 
a
 
fertilizer
 
production
 
and
 
composting
 
operation
 
and
 
land.
 
We
 
expect
 
to
 
close
 
this
 
transaction
during the second
 
fiscal quarter.
 
We are excited
 
about the opportunity
 
to expand our
 
market presence in
Utah and the western United States,” added Miller.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cal-Maine Foods Reports First Quarter Fiscal 2024 Results
Page 2
October 3, 2023
-MORE-
Sales Performance & Operating Highlights
Max Bowman,
 
vice president
 
and chief
 
financial officer
 
of Cal-Maine
 
Foods, Inc.,
 
added, “For
 
the
first quarter of
 
fiscal 2024, our
 
net sales were
 
$459.3 million compared
 
with $658.3 million
 
for the same
period
 
last
 
year,
 
which
 
was
 
an
 
exceptionally
 
strong
 
first
 
quarter
 
performance
 
driven
 
by
 
record
 
average
conventional selling prices and record
 
specialty sales volumes. The decline
 
in revenue for the first
 
quarter
of
 
fiscal
 
2024
 
was
 
primarily
 
due
 
to
 
the
 
decrease
 
in
 
the
 
net
 
average
 
selling
 
price
 
for
 
conventional
 
eggs,
partially offset
 
by the
 
increase in
 
the net
 
average selling
 
price for
 
specialty eggs.
 
Net income
 
for the
 
first
quarter of fiscal
 
2024 was $926,000,
 
or $0.02 per
 
diluted share, compared
 
with $125.3 million,
 
or $2.57
per diluted share, for the first quarter of fiscal 2023.
“Conventional egg net average selling price per dozen was $1.241 for the first quarter of fiscal 2024
compared with $2.368 for
 
the prior-year quarter. Conventional
 
egg selling prices declined
 
significantly in
the first quarter of
 
fiscal 2024 compared to
 
the first quarter
 
of fiscal 2023
 
as the U.S. egg
 
supply recovers
from the most recent HPAI outbreak. Net average selling price for specialty eggs rose to $2.278 per dozen,
compared with
 
$2.101 per
 
dozen for
 
the first
 
quarter of
 
fiscal 2023.
 
Specialty dozens
 
sold were
 
33.5% of
total dozens sold in the first quarter of fiscal 2024 compared with 34.7% in the prior-year period.
 
“We reported
 
an operating
 
loss of
 
$6.8 million
 
for the
 
first quarter
 
of fiscal
 
2024, compared
 
with
operating income of
 
$163.9 million for
 
the prior-year quarter,
 
reflecting lower conventional
 
shell egg prices
and
 
increased
 
labor
 
costs,
 
partially
 
offset
 
by
 
lower
 
farm
 
production
 
costs
 
due
 
to
 
the
 
decrease
 
in
 
feed
ingredient prices. We
 
remained focused on
 
disciplined cost management
 
as we generally
 
continued to incur
higher
 
input
 
costs
 
at
 
our
 
production,
 
processing
 
and
 
distribution
 
centers,
 
as
 
well
 
as
 
costs
 
incurred
 
for
additional bio-security measures to
 
mitigate the risk of
 
HPAI. Overall, first quarter
 
farm production costs
per dozen
 
decreased 1.0%
 
compared with
 
the prior-year
 
quarter. For
 
the first
 
quarter of
 
fiscal 2024, feed
costs per dozen were $0.597, a 10.5% decrease compared with the first quarter of fiscal 2023.
 
“Current indications for corn project an overall better stocks-to-use ratio; however,
 
until this year’s
harvest is
 
complete and
 
as long
 
as outside
 
factors remain
 
uncertain [including
 
weather patterns
 
and the
Russia-Ukraine
 
war
 
and
 
its
 
effect
 
on export
 
markets],
 
volatility
 
could
 
remain.
 
Soybean
 
meal supply
 
has
remained tight relative to demand in the first quarter of fiscal 2024.
13 Weeks Ended
September 2, 2023
August 27, 2022
Dozen Eggs Sold (000)
273,126
275,317
Conventional Dozen Eggs Sold (000)
181,530
179,712
Specialty Dozen Eggs Sold (000)
91,596
95,605
Dozen Eggs Produced (000)
250,356
257,654
% Specialty Sales (dozen)
33.5
%
34.7
%
% Specialty Sales (dollars)
47.7
%
31.8
%
Net Average Selling Price (per dozen)
$
1.589
$
2.275
Net Average Selling Price Conventional Eggs (per dozen)
$
1.241
$
2.368
Net Average Selling Price Specialty Eggs (per dozen)
$
2.278
$
2.101
Feed Cost (per dozen)
$
0.597
$
0.667
Product Mix & Cage-Free Eggs
“Specialty
 
eggs
 
remain
 
an
 
important
 
area
 
of
 
focus
 
of
 
Cal-Maine
 
Food’s
 
growth
 
strategy.
 
A
 
top
priority
 
of
 
this
 
strategy
 
is
 
to
 
expand
 
our
 
cage-free
 
production
 
capacity
 
with
 
the
 
goal
 
of
 
meeting
 
future
customer needs in line with changing state requirements.
 
We continue to work closely with our customers
regarding their expected
 
timing and purchase
 
decisions related to
 
their previously announced
 
plans to offer
cage-free
 
eggs
 
exclusively
 
by
 
specific
 
future
 
dates.
 
We
 
have
 
invested
 
significant
 
capital
 
to
 
acquire
 
and
construct cage-free facilities as our volume of cage-free egg
 
sales has continued to increase and account for
Cal-Maine Foods Reports First Quarter Fiscal 2024 Results
Page 3
October 3, 2023
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a greater share of
 
our product mix. Cage-free
 
egg revenue comprised approximately
 
33.0% of total net
 
shell
egg revenue for the first quarter of fiscal 2024,” added Bowman.
Table Egg Supply Outlook
The most recent outbreak of HPAI affected the Company’s
 
business and financial results primarily
during
 
the
 
fourth
 
quarter
 
of
 
fiscal
 
2022
 
and
 
continuing
 
into
 
the
 
first
 
part
 
of
 
the
 
fourth
 
quarter
 
of
 
fiscal
2023.
 
While the last occurrence
 
in a commercial egg laying
 
flock was in December 2022,
 
there have been
occurrences
 
in
 
other
 
avian
 
populations
 
in
 
the
 
U.S.
 
since
 
then.
 
HPAI
 
is
 
still
 
present
 
in
 
the
 
wild
 
bird
population
 
and
 
the
 
extent
 
of
 
possible
 
future
 
outbreaks,
 
particularly
 
during
 
the
 
upcoming
 
fall
 
migration
season, cannot be predicted. There have been no positive tests for HPAI at any of Cal-Maine Foods’ owned
or contracted production facilities as of
 
October 2, 2023. Based on USDA
 
data, the Company believes that
the U.S. layer
 
hen flock, which
 
declined as a
 
result of flock
 
depletions due to
 
HPAI, has largely
 
recovered
but remains slightly lower than the five-year average.
Layer
 
hen
 
numbers
 
reported
 
by
 
the
 
USDA
 
as
 
of
 
September
 
1,
 
2023,
 
were
 
318.2
 
million,
 
which
represents an increase of 3.1% compared with
 
the layer hen inventory a year ago. The
 
USDA also reported
that
 
the
 
hatch
 
from
 
April
 
2023
 
through
 
August
 
2023
 
increased
 
2.0%
 
as
 
compared
 
with
 
the
 
prior-year
period, indicating that layer flocks may continue to increase in the future.
 
Looking Ahead
Miller
 
added,
 
“We
 
look
 
forward
 
to
 
the
 
opportunities
 
ahead
 
for
 
Cal-Maine
 
Foods
 
in
 
fiscal
 
2024.
 
While
 
we
 
face
 
ongoing
 
challenges
 
related
 
to
 
the
 
threat
 
of
 
HPAI
 
and
 
inflationary
 
headwinds,
 
we
 
will
continue to manage the aspects of our business we can control.
 
We are uniquely positioned to support the
nation’s food
 
supply with
 
nutritious and
 
affordable protein,
 
and we
 
believe demand
 
for our
 
products will
continue to grow.
 
We are confident we have the right strategy in place to meet this demand, with a proven
operating model
 
that will
 
drive long-term
 
growth.
 
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.
Importantly, we have a dedicated workforce, and sufficient capital to fund internal expansion projects and
consider
 
additional
 
potential
 
acquisitions
 
to
 
support
 
our
 
strategy.
 
Above
 
all,
 
we
 
will
 
strive
 
to
 
meet
 
the
demands of our valued customers and deliver greater value to our shareholders.
”
Dividend Payment
For
 
the
 
first
 
quarter
 
of
 
fiscal
 
2024,
 
Cal-Maine
 
Foods
 
will
 
pay
 
a
 
cash
 
dividend
 
of
 
approximately
$0.006
 
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
 
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 November 16, 2023, to holders of record on November 1, 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.
Cal-Maine Foods Reports First Quarter Fiscal 2024 Results
Page 4
October 3, 2023
-MORE-
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 2023, (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,
 
and
 
higher
 
and
 
potentially
 
further
increases in 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 2023, (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 First Quarter Fiscal 2024 Results
Page 5
October 3, 2023
-MORE-
CAL-MAINE FOODS, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands, except per share amounts)
SUMMARY STATEMENTS OF INCOME
13 Weeks Ended
September 2, 2023
August 27, 2022
Net sales
$
459,344
$
658,344
Cost of sales
413,911
440,854
Gross profit
45,433
217,490
Selling, general and administrative
52,246
53,607
(Gain) loss on disposal of fixed assets
(56)
33
Operating income (loss)
(6,757)
163,850
Other income, net
7,490
1,630
Income before income taxes
733
165,480
Income tax expense
322
40,346
Net income
411
125,134
Less: Loss attributable to noncontrolling interest
(515)
(153)
Net income attributable to Cal-Maine Foods, Inc.
$
926
$
125,287
Net income per common share:
Basic
$
0.02
$
2.58
Diluted
$
0.02
$
2.57
Weighted average shares outstanding:
Basic
48,690
48,623
Diluted
48,840
48,811
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cal-Maine Foods Reports First Quarter Fiscal 2024 Results
Page 6
October 3, 2023
-END-
CAL-MAINE FOODS, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands)
 
SUMMARY BALANCE SHEETS
September 2, 2023
June 3, 2023
ASSETS
Cash and short-term investments
$
609,962
$
647,914
Receivables, net
159,150
187,213
Inventories, net
280,801
284,418
Prepaid expenses and other current assets
14,145
5,380
Current assets
1,064,058
1,124,925
Property, plant and equipment, net
752,580
744,540
Other noncurrent assets
83,729
85,060
Total assets
$
1,900,367
$
1,954,525
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses
$
126,088
$
145,601
Dividends payable
294
37,130
Current liabilities
126,382
182,731
Deferred income taxes and other liabilities
162,655
162,211
Stockholders' equity
1,611,330
1,609,583
Total liabilities and stockholders' equity
$
1,900,367
$
1,954,525