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.”
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
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 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, 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, 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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240103022434/en/
Sherman Miller, President and CEO Max P. Bowman, Vice President
and CFO (601) 948-6813
Cal Maine Foods (NASDAQ:CALM)
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