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Published: 2024-01-03 16:05:48 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 SECOND QUARTER FISCAL 2024
RIDGELAND, Miss. (January 3, 2024) - 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 second quarter of fiscal 2024 (thirteen weeks) ended December
 
2, 2023.
 
 
Second Quarter Fiscal Year 2024 Highlights
●
Quarterly net sales of $523.2 million
●
Quarterly net income of $17.0 million or $0.35 per basic and diluted common share
●
Cash dividend of $5.7 million,
 
or $0.116 per share, pursuant to the Company’s established
dividend policy
Overview
Sherman Miller, president and chief executive officer of Cal-Maine Foods, Inc., stated, “Cal-Maine
Foods delivered
 
a solid
 
financial and
 
operating performance
 
for the
 
second quarter
 
of fiscal
 
2024 in
 
the
face of dynamic market conditions. Our sales reflect a different market environment from a year ago, with
significantly lower average
 
selling prices.
 
However, our total
 
volumes sold were
 
up slightly over
 
a year ago,
as consumer
 
demand for
 
shell eggs
 
continued to
 
be favorable
 
in the
 
quarter, especially leading
 
up to
 
the
Thanksgiving holiday. As always, we strive to offer consumers a wide range of quality choices in shell eggs
as well as
 
enhanced egg products offerings.
 
Our ability to
 
meet changing demand
 
trends with a
 
favorable
product mix has
 
been an important
 
differentiator for Cal-Maine
 
Foods. With solid
 
execution, we continued
to
 
meet
 
the
 
needs of
 
our customers.
 
We
 
commend our
 
managers and
 
employees across
 
our
 
production
facilities who continued to efficiently manage our operations and keep
 
pace with changing demand.
“During the second quarter, we completed the acquisition of the assets of Fassio
 
Egg Farms, Inc. a
shell
 
egg
 
production
 
and
 
processing
 
business
 
located
 
in
 
Erda,
 
Utah,
 
outside
 
of
 
Salt
 
Lake
 
City.
 
The
additional production
 
capacity, especially
 
for cage-free
 
eggs, will
 
enhance our
 
ability to
 
serve our
 
valued
customers in this important
 
market area. We welcome
 
the Fassio team
 
to Cal-Maine Foods
 
as we apply our
proven operating model and further expand our cage-free production capabilities.
 
“Following the
 
end of
 
the second
 
quarter,
 
we
 
announced a
 
definitive
 
agreement
 
to
 
acquire from
Tyson Foods, Inc. (NYSE:TSN)
 
a recently closed broiler
 
processing plant, hatchery and
 
feed mill located in
Dexter, Missouri.
 
We expect
 
to complete
 
the acquisition
 
in our
 
third fiscal
 
quarter and
 
to repurpose
 
the
assets for
 
use in
 
egg and
 
egg products
 
production. We
 
look forward
 
to the
 
opportunities to
 
leverage the
added
 
production
 
and distribution
 
capabilities
 
and reach
 
more
 
customers in
 
Missouri
 
and
 
surrounding
markets.”
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cal-Maine Foods Reports Second Quarter Fiscal 2024 Results
Page 2
January 3, 2024
-MORE-
Sales Performance & Operating Highlights
Max Bowman,
 
vice president and
 
chief financial officer
 
of Cal-Maine Foods,
 
Inc., added, “For
 
the
second quarter of
 
fiscal 2024, our
 
net sales were
 
$523.2 million compared
 
with $801.7 million
 
for the same
period last year. The decline in
 
sales revenue for the second quarter
 
of fiscal 2024 was primarily
 
due to the
significant
 
decrease
 
in
 
the
 
net
 
average
 
selling price
 
for
 
conventional eggs.
 
However, our
 
sales
 
volumes
improved slightly with 288.2 million total dozens sold in the second quarter of fiscal 2024 compared with
284.1 million, an increase of 1.4%, over the same period last year.
 
“Net income attributable to
 
Cal-Maine Foods, Inc. for
 
the second quarter of
 
fiscal 2024 was $17.0
million,
 
or
 
$0.35
 
per
 
diluted
 
share,
 
compared
 
with
 
$198.6
 
million,
 
or
 
$4.07
 
per
 
diluted
 
share,
 
for
 
the
second quarter of
 
fiscal 2023.
 
These results include
 
a $19.6 million
 
loss contingency accrual,
 
reflected in
SG&A
 
expenses,
 
for
 
our
 
estimated
 
share
 
of
 
damages
 
and
 
fees
 
awarded
 
in
 
a
 
pending
 
anti-trust
 
legal
proceeding. We are still pursuing legal actions to reverse, and if necessary,
 
appeal the decisions.
“While conventional egg prices improved
 
sequentially, the net average selling
 
price per dozen was
$1.458 for conventional eggs in the
 
second quarter of fiscal 2024, down
 
49.4% compared with $2.883 for
the prior-year
 
quarter. Net
 
average selling
 
price for
 
specialty eggs
 
was $2.277
 
per dozen,
 
compared with
$2.370 per dozen for
 
the second quarter
 
of fiscal 2023, a
 
decline of 3.9%.
 
Specialty dozens sold
 
were 33.2%
of total
 
dozens sold
 
in the
 
second quarter
 
of fiscal
 
2024 compared
 
with 33.8%
 
in the
 
prior-year period.
Cage-free
 
eggs
 
accounted
 
for
 
approximately
 
30.4%
 
of
 
shell
 
egg
 
revenue
 
for
 
the
 
second
 
quarter
 
of
 
fiscal
2024.
“We reported
 
operating income
 
of $14.2
 
million for
 
the second
 
quarter of
 
fiscal 2024,
 
compared
with
 
operating
 
income
 
of
 
$259.9
 
million
 
for
 
the
 
prior-year
 
quarter,
 
primarily
 
reflecting
 
lower
 
market
prices. However,
 
we benefitted
 
from lower
 
feed ingredient
 
prices compared
 
with the
 
same period
 
a year
ago.
 
We
 
continued to
 
focus on
 
the
 
aspects of
 
our
 
business we
 
can
 
control
 
and
 
managed our
 
operations
efficiently
 
despite
 
higher
 
input
 
costs
 
at
 
our
 
production,
 
processing
 
and
 
distribution
 
centers,
 
as
 
well
 
as
ongoing
 
investments
 
in
 
enhanced
 
biosecurity
 
measures
 
to
 
mitigate
 
the
 
risk
 
of
 
highly
 
pathogenic
 
avian
influenza (“HPAI”).
 
“Current indications
 
for corn
 
project an overall
 
better stocks-to-use
 
ratio implying
 
potentially lower
prices
 
in
 
the
 
near
 
term;
 
however,
 
as
 
we
 
continue
 
to
 
face
 
uncertain
 
external
 
forces
 
including
 
weather
patterns and global supply
 
chain disruptions, volatility could
 
remain. Soybean meal supply
 
has remained
tight relative to demand in the second quarter of fiscal 2024.”
13 Weeks Ended
26 Weeks Ended
December 2, 2023
November 26, 2022
December 2, 2023
November 26, 2022
Dozen Eggs Sold (000)
288,173
284,086
561,299
559,403
Conventional Dozen Eggs Sold (000)
192,462
187,976
373,992
367,688
Specialty Dozen Eggs Sold (000)
95,711
96,110
187,307
191,715
Dozen Eggs Produced (000)
265,101
261,358
515,457
519,012
% Specialty Sales (dozen)
33.2
%
33.8
%
33.4
%
34.3
%
% Specialty Sales (dollars)
43.3
%
29.4
%
45.4
%
30.5
%
Net Average Selling Price (per dozen)
$
1.730
$
2.709
$
1.661
$
2.496
Net Average Selling Price Conventional
Eggs (per dozen)
$
1.458
$
2.883
$
1.353
$
2.631
Net Average Selling Price Specialty Eggs
(per dozen)
$
2.277
$
2.370
$
2.277
$
2.236
Feed Cost (per dozen)
$
0.554
$
0.685
$
0.575
$
0.676
Cal-Maine Foods Reports Second Quarter Fiscal 2024 Results
Page 3
January 3, 2024
-MORE-
HPAI & Table Egg Supply Outlook
Outbreaks of HPAI have
 
continued to occur in
 
U.S. poultry flocks. Prior
 
to November 2023, there
were no reported significant
 
outbreaks of HPAI in
 
commercial table egg layer
 
flocks since December 2022.
On January 3, 2024,
 
the USDA division
 
of Animal and
 
Plant Health Inspection
 
Service (“APHIS”) reported
that approximately 12.9
 
million commercial table
 
egg layers
 
and 1.5
 
million commercial table
 
egg pullets
have been depopulated as a result of HPAI outbreaks since the beginning of November
 
2023.
Cal-Maine
 
Foods
 
experienced
 
an
 
HPAI
 
outbreak
 
within
 
its
 
facilities
 
in
 
Kansas,
 
resulting
 
in
depopulation of approximately
 
1.5 million laying hens and
 
240 thousand pullets, or
 
approximately 3.3% of
its
 
total
 
flock,
 
subsequent
 
to
 
quarter
 
end.
 
Cal-Maine
 
Foods
 
believes
 
that
 
it
 
can
 
mitigate
 
the
 
loss
 
of
production through
 
flock rotations.
 
The Company
 
remains dedicated
 
to robust
 
biosecurity programs
 
across
its locations; however, no
 
farm is immune from
 
HPAI. HPAI is still
 
present in the wild
 
bird population and
the
 
extent
 
of
 
possible
 
future
 
outbreaks,
 
with
 
heightened
 
risk
 
during
 
the
 
migration
 
seasons,
 
cannot
 
be
predicted.
 
According
 
to
 
the
 
U.S.
 
Centers
 
for
 
Disease
 
Control
 
and
 
Prevention,
 
these
 
detections
 
do
 
not
present an immediate public health concern.
The Company believes the HPAI
 
outbreak will continue to affect
 
the overall supply of eggs
 
until the
layer
 
hen
 
flock
 
is
 
fully
 
replenished.
 
The
 
layer
 
hen
 
flock
 
five-year
 
monthly
 
average
 
for
 
the
 
month
 
of
December from
 
2018 through
 
2022 was
 
330.1 million
 
hens. According
 
to the
 
USDA, the
 
U.S. flock
 
consisted
of 321.6 million layers
 
producing table or market
 
type eggs as of
 
December 1, 2023, which is
 
2.6 % below
the five-year average.
 
Looking Ahead
Miller added, “We are pleased with our
 
ability to effectively manage our business through the first
half of
 
fiscal 2024,
 
as we
 
have continued
 
to
 
deal with
 
the impact
 
of HPAI.
 
We
 
are proud
 
of our
 
team’s
resilience
 
and
 
ability
 
to
 
quickly
 
respond
 
to
 
the
 
challenges
 
we
 
have
 
faced.
 
Our
 
proven
 
operating
 
model
supports our
 
ability to
 
manage our
 
operations through
 
the various
 
cycles that
 
characterize our
 
business.
Cal-Maine
 
Foods
 
is
 
uniquely
 
positioned
 
to
 
leverage
 
our
 
scale
 
and
 
continue
 
to
 
meet
 
growing
 
customer
demand. We
 
are also
 
mindful of
 
our important
 
role as
 
a contributor
 
to the
 
nation’s food
 
supply with
 
an
affordable and nutritious protein portfolio. We remain focused on our strategy to
 
invest in our operations
to expand
 
capacity; pursue
 
synergistic acquisition
 
opportunities; and
 
support long-term
 
growth through
investment in
 
innovative, scale-driven
 
products and
 
facilities. We
 
are fortunate
 
to have
 
a strong
 
balance
sheet and a disciplined capital allocation strategy that supports our growth objectives. We look forward to
the opportunities ahead for Cal-Maine Foods.”
Dividend Payment
For the second
 
quarter of fiscal
 
2024, Cal-Maine Foods
 
will pay a
 
cash dividend of
 
approximately
$0.116
 
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 February 15, 2024, to holders of record on January
 
31, 2024.
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
Cal-Maine Foods Reports Second Quarter Fiscal 2024 Results
Page 4
January 3, 2024
-MORE-
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 and
 
that
 
first
 
impacted our
flocks in December 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,
 
(vii)
 
our
ability
 
to
 
retain
 
existing
 
customers,
 
acquire
 
new
 
customers
 
and
 
grow
 
our
 
product
 
mix,
 
(viii)
 
adverse
results in pending litigation matters,
 
(ix) global instability, including
 
as a result of
 
the wars in
 
Ukraine
and Israel
 
and attacks
 
on shipping
 
in the
 
Red Sea,
 
and (x)
 
any potential
 
resurgence of
 
COVID-19. 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 Second Quarter Fiscal 2024 Results
Page 5
January 3, 2024
-MORE-
CAL-MAINE FOODS, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands, except per share amounts)
SUMMARY STATEMENTS OF INCOME
13 Weeks Ended
26 Weeks Ended
December 2, 2023
November 26, 2022
December 2, 2023
November 26, 2022
Net sales
$
523,234
$
801,700
$
982,578
$
1,460,044
Cost of sales
432,104
483,851
846,015
924,705
Gross profit
91,130
317,849
136,563
535,339
Selling, general and administrative
76,578
57,952
128,824
111,559
(Gain) loss on disposal of fixed assets
318
29
262
62
Operating income (loss)
14,234
259,868
7,477
423,718
Other income, net
7,884
2,400
15,374
4,030
Income before income taxes
22,118
262,268
22,851
427,748
Income tax expense
5,540
63,974
5,862
104,320
Net income
16,578
198,294
16,989
323,428
Less: Loss attributable to noncontrolling interest
(431)
(293)
(946)
(446)
Net income attributable to Cal-Maine Foods, Inc.
$
17,009
$
198,587
$
17,935
$
323,874
Net income per common share:
Basic
$
0.35
$
4.08
$
0.37
$
6.66
Diluted
$
0.35
$
4.07
$
0.37
$
6.63
Weighted average shares outstanding:
Basic
48,690
48,624
48,691
48,624
Diluted
48,866
48,840
48,854
48,827
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cal-Maine Foods Reports Second Quarter Fiscal 2024 Results
Page 6
January 3, 2024
-END-
CAL-MAINE FOODS, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands)
 
SUMMARY BALANCE SHEETS
December 2, 2023
June 3, 2023
ASSETS
Cash and short-term investments
$
567,828
$
647,914
Receivables, net
199,162
187,213
Inventories, net
287,270
284,418
Prepaid expenses and other current assets
9,673
5,380
Current assets
1,063,933
1,124,925
Property, plant and equipment, net
815,468
744,540
Other noncurrent assets
87,404
85,060
Total assets
$
1,966,805
$
1,954,525
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses
$
148,105
$
145,601
Dividends payable
5,682
37,130
Current liabilities
153,787
182,731
Deferred income taxes and other liabilities
189,054
162,211
Stockholders' equity
1,623,964
1,609,583
Total liabilities and stockholders' equity
$
1,966,805
$
1,954,525