Cal-Maine Foods, Inc. (NASDAQ: CALM) today reported results for
the first quarter of fiscal 2018 ended September 2, 2017.
Net sales for the first quarter of fiscal 2018 were $262.8
million compared with $239.8 million for the prior-year period. The
Company reported a net loss of $16.0 million, or $0.33 per basic
and diluted share, for the thirteen weeks ended September 2,
2017, compared with a net loss of $30.9 million, or $0.64 per basic
and diluted share, for the year-earlier period.
Dolph Baker, chairman, president and chief executive officer of
Cal-Maine Foods, Inc., stated, “We are pleased to report higher
sales for the first quarter of fiscal 2018 compared with the same
period last year, in spite of the ongoing challenges and price
volatility in the egg markets. The first quarter of our fiscal year
is typically a seasonally slow period for our business. While we
are disappointed to report a loss for the quarter, we are
encouraged by the year-over-year improvement in our performance.
Our results reflect continued solid retail demand and a modest
increase in both volumes and prices compared with the first quarter
of fiscal 2017. Market prices for conventional shell eggs moved
higher over the summer, and our average customer selling prices for
all eggs were up 6.8 percent in the first quarter compared with a
year ago. Market prices have significantly improved since the end
of the quarter and are currently trending well above levels from a
year ago.
“Following the 2015 avian influenza (AI)-related laying hen
losses, producers repopulated their flocks and the younger, more
productive hen population produced a higher number of eggs. Total
supply still remained high through the first quarter in relation to
overall market demand trends. According to Nielsen data, retail
demand has been in line with normal seasonal trends and continues
to show year-over-year improvement. However, lower institutional
demand for egg products and reduced export demand have resulted in
an oversupply environment and created additional pricing pressures.
The USDA reports that shell egg exports have returned to historical
levels since the beginning of calendar 2017, but are still below
the peak levels reached prior to the AI outbreak. We are encouraged
that the export outlook has improved for both shell eggs and egg
products. While overall market conditions are more favorable than a
year ago, we do not expect any sustained improvement in pricing
until we have a more stable supply and demand balance. The most
recent USDA reports indicate the chick hatch has been trending down
for most of the past year compared with the previous year, which
could influence future supply levels.
“Specialty eggs, excluding co-pack sales, accounted for 21.7
percent of our total sales volume for the first quarter of fiscal
2018, compared with 22.9 percent for the same period a year ago.
Specialty egg revenue was 39.6 percent of total shell egg revenues,
compared with 46.7 percent for the first quarter of fiscal 2017.
The average selling price for specialty eggs was down 4.8 percent
compared with the first quarter of last year.
“Our specialty egg business remains an important area of focus
for our growth strategy, and we have made investments in our
operations and production capacity to meet expected demand trends.
As reported, many food service providers, national restaurant
chains and major retailers, including our largest customers, have
made public commitments to transition away from conventional eggs
and exclusively offer cage-free eggs by future specified dates.
However, the higher price gap between conventional eggs and
specialty eggs has resulted in reduced demand for specialty eggs.
We have adjusted our production levels in line with current
customer demand for cage-free eggs, and we are well positioned to
increase our capacity when demand trends change. Above all, we will
continue to support our customers with a favorable product mix that
includes cage-free eggs, as well as other healthy and affordable
options for consumers including conventional, nutritionally
enhanced and organic eggs.”
Baker added, “Our operations ran well during the summer months,
and our farm production costs per dozen were down 6.1 percent over
the prior-year period. We remain focused on managing our operations
in an efficient and responsible manner, regardless of market
conditions. While the recent hurricanes that hit the United States
following the quarter caused disruptions to our operations in
Texas, Florida and Georgia, we were fortunate to not sustain any
material loss of egg production. We commend the heroic efforts of
Cal-Maine Foods employees across our operations who supported these
affected locations and worked tirelessly to continue production
under such extraordinary conditions.
“For the first quarter of fiscal 2018, our feed costs per dozen
produced were down 13.0 percent compared with a year ago, as we
benefited from favorable supplies of grain from last fall. While
grain prices have been volatile, this year’s USDA harvest estimates
indicate we should have an ample supply of our primary feed
ingredients in fiscal 2018,” said Baker.
Pursuant to Cal-Maine Foods’ variable dividend policy, for each
quarter for 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 last quarter for which a dividend was paid.
Therefore, the Company did not pay a dividend with respect to the
fourth quarter of fiscal 2016, or any quarter of fiscal 2017, and
will not pay a dividend for the first quarter of fiscal 2018. At
September 2, 2017, cumulative losses that must be recovered
prior to paying a dividend were $90.6 million.
Selected operating statistics for the first
quarter of fiscal 2018 compared with the prior-year period are
shown below:
13 Weeks Ended
September 2,2017
August 27,2016
Dozen Eggs Sold (000) 249,464 242,325
Dozen Eggs Produced (000) 213,570 198,782 % Specialty Sales
(dozen)* 21.7 % 22.9 % % Specialty Sales (dollars)* 39.6 % 46.7 %
Net Average Selling Price (dozen) $ 1.017 $ 0.952 Net Average
Selling Price Specialty Eggs (dozen)* $ 1.878 $ 1.973 Feed Cost
(dozen) $ 0.375 $ 0.431
*Excludes co-pack specialty eggs
Cal-Maine Foods, Inc. is primarily engaged in the production,
grading, packing and sale of fresh shell eggs, including
conventional, cage-free, organic and nutritionally-enhanced eggs.
The Company, which is headquartered in Jackson,
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.
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), (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, and (vi) 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, INC. AND
SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands, except per share
amounts)
SUMMARY STATEMENTS OF
OPERATIONS
13 Weeks Ended September 2, 2017
August 27, 2016 Net sales $ 262,845 $ 239,845
Gross profit (loss) 17,336 (9,569 ) Operating loss (24,378 )
(50,350 ) Other income (loss) (139 ) 1,810 Loss before income taxes
and noncontrolling interest (24,517 ) (48,540 ) Loss before income
taxes attributable to Cal-Maine Foods, Inc. (24,333 ) (48,496 )
Net loss $ (15,993 ) $ (30,936 ) Net loss per share:
Basic $ (0.33 ) $ (0.64 ) Diluted $ (0.33 ) $ (0.64 ) Weighted
average shares outstanding Basic 48,330 48,249
Diluted 48,330 48,249
SUMMARY BALANCE SHEETS
September 2, 2017 June
3, 2017 ASSETS Cash and short-term investments $ 125,971 $
156,026 Receivables 75,626 64,509 Income tax receivable 55,970
52,691 Inventories 159,226 160,692 Prepaid expenses and other
current assets 3,753 2,288 Current assets 420,546
436,206 Property, plant and equipment (net) 452,099 458,184
Other noncurrent assets 138,383 138,704 Total assets
$ 1,011,028 $ 1,033,094
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses $ 58,386 $ 59,853 Current
maturities of long-term debt 4,683 4,826 Current
liabilities 63,069 64,679 Long-term debt, less current
maturities 5,048 6,113 Deferred income taxes and other liabilities
113,446 117,809
Stockholders’ equity
829,465 844,493
Total liabilities and stockholders’
equity
$ 1,011,028 $ 1,033,094
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version on businesswire.com: http://www.businesswire.com/news/home/20171002005229/en/
Cal-Maine Foods, Inc.Dolph Baker, 601-948-6813Chairman,
President and CEOorTimothy A. Dawson, 601-948-6813Vice President
and CFO
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