CALM Cal Maine Foods Inc

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 third quarter of fiscal 2024 (thirteen weeks) ended March 2, 2024.

Third Quarter Fiscal Year 2024 Highlights

• Quarterly net sales of $703.1 million
• Quarterly net income of $146.4 million, or $3.01 per basic common share
• Record quarterly sales volume of total dozens sold and specialty dozens sold
• Cash dividend of $48.9 million, or $1.00 per share, pursuant to the Company’s established dividend policy

Overview

Sherman Miller, president and chief executive officer of Cal-Maine Foods, stated, “We are very pleased with Cal-Maine Foods’ strong financial and operating performance for the third quarter of fiscal 2024. Our sales reflect lower average selling prices compared to a year ago, when the shell egg industry experienced record high market prices due primarily to the impact of highly pathogenic avian influenza (“HPAI”) and other market factors resulting in a significant reduction in supply. While the more recent outbreaks of HPAI have also affected supply and caused market prices to move higher, the overall market impact has not been as severe. Fueled by strong demand, our total sales volumes (dozens sold) for the quarter were higher than the third quarter of fiscal 2023 and reached a Company record. Consumer demand for eggs has been strong, especially during the winter holiday season. We have worked hard to meet this demand with a favorable product mix of conventional and specialty eggs, as well as enhanced egg products offerings. Our managers and employees have continued to efficiently run our operations in a challenging environment due to the impact of and ongoing threat of HPAI. Despite the distractions, we have continued to meet the needs of our valued customers.

“In addition to our strong organic growth opportunities, we are pleased with the operational performance and successful integration of our acquisition of assets of Fassio Egg Farms, Inc., located in Erda, Utah outside of Salt Lake City, acquired in our second fiscal quarter. Following the end of the third quarter, we completed the acquisition from Tyson Foods, Inc. (NYSE:TSN) of a recently closed broiler processing plant, hatchery and feed mill located in Dexter, Missouri. We intend to repurpose the acquired assets for use in egg and egg products production. We remain focused on identifying other acquisition opportunities that complement our operating model and further extend our market reach.”

Sales Performance & Operating Highlights

Max Bowman, vice president and chief financial officer of Cal-Maine Foods, added, “For the third quarter of fiscal 2024, our net sales were $703.1 million compared with $997.5 million for the same period last year, which was the Company’s highest quarterly sales period with record high average selling prices for conventional and specialty eggs. The decline in sales revenue for the third quarter of fiscal 2024 was primarily due to the significant decrease in egg prices compared to a year ago. However, market prices moved higher sequentially in the third fiscal quarter due to both the recent impact of HPAI and normal seasonal fluctuations.

“Our overall sales volumes improved 3.2% compared to the same period last year as we sold 300.8 million dozens compared with 291.4 million dozens for the third quarter of fiscal 2023. Conventional eggs sold reached 192.2 million dozens, up 2.6%, while specialty eggs sold were 108.6 million dozens, a 4.4% increase over the prior-year period. These results represent the highest total dozens sold and highest specialty dozens sold in any quarter for Cal-Maine Foods.

“Net income attributable to Cal-Maine Foods for the third quarter of fiscal 2024 was $146.7 million, or $3.00 per diluted share, compared with $323.2 million, or $6.62 per diluted share, for the third quarter of fiscal 2023, which was another record for the Company.

“The net average selling price per dozen was $2.152 for conventional eggs in the third quarter of fiscal 2024, down 41.5% compared with $3.678 for the prior-year quarter. Net average selling price for specialty eggs was $2.415 per dozen, compared with $2.616 per dozen for the third quarter of fiscal 2023, a decline of 7.7%. Specialty dozens sold were 36.1% of total dozens sold in the third quarter of fiscal 2024 compared with 35.7% in the prior-year period.

“We reported operating income of $162.8 million for the third quarter of fiscal 2024, compared with operating income of $407.8 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. For the third quarter of fiscal 2024, feed costs per dozen were down 19.9% compared with the third quarter of fiscal 2023. Our other farm production costs were higher primarily due to higher flock amortization and increased facility costs.

“Current indications for corn supply 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, price volatility could remain. Soybean meal supply has remained tight relative to demand in the third quarter of fiscal 2024.”

 

 

13 Weeks Ended

 

39 Weeks Ended

 

March 2, 2024

 

February 25, 2023

 

March 2, 2024

 

February 25, 2023

Dozen Eggs Sold (000)

 

300,779

 

 

 

291,416

 

 

 

862,078

 

 

 

850,819

 

Conventional Dozen Eggs Sold (000)

 

192,182

 

 

 

187,357

 

 

 

566,174

 

 

 

555,045

 

Specialty Dozen Eggs Sold (000)

 

108,597

 

 

 

104,059

 

 

 

295,904

 

 

 

295,774

 

Dozen Eggs Produced (000)

 

259,527

 

 

 

263,174

 

 

 

774,984

 

 

 

782,186

 

% Specialty Sales (dozen)

 

36.1

%

 

 

35.7

%

 

 

34.3

%

 

 

34.8

%

% Specialty Sales (dollars)

 

38.5

%

 

 

28.2

%

 

 

42.5

%

 

 

29.6

%

Net Average Selling Price (per dozen)

$

2.247

 

 

$

3.298

 

 

$

1.866

 

 

$

2.771

 

Net Average Selling Price Conventional Eggs (per dozen)

$

2.152

 

 

$

3.678

 

 

$

1.624

 

 

$

2.984

 

Net Average Selling Price Specialty Eggs (per dozen)

$

2.415

 

 

$

2.616

 

 

$

2.328

 

 

$

2.369

 

Feed Cost (per dozen)

$

0.544

 

 

$

0.679

 

 

$

0.564

 

 

$

0.677

 

 

HPAI & Table Egg Supply Outlook

Outbreaks of HPAI have continued to occur in U.S. poultry flocks. From November 2023 through January of 2024, the USDA division of Animal and Plant Health Inspection Service reported that approximately 15.7 million commercial layer hens and pullets have been depopulated as a result of HPAI outbreaks.

During the third quarter of fiscal 2024, Cal-Maine Foods experienced an HPAI outbreak within its facilities in Kansas, resulting in depopulation of approximately 1.5 million laying hens and 240,000 pullets. Following the end of the third quarter, on April 1, 2024, one of the Company’s facilities located in Parmer County, Texas, tested positive for HPAI, resulting in depopulation of approximately 1.6 million laying hens and 337,000 pullets, or approximately 3.6% of the Company’s total flock as of March 2, 2024. Production at the facility has temporarily ceased as the Company follows the protocols prescribed by the USDA. Cal-Maine Foods is working to secure production from other facilities to minimize disruption to its customers.

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, the human health risk to the U.S. public from HPAI viruses is considered to be low. Also, according to the USDA, HPAI cannot be transmitted through safely handled and properly cooked eggs. There is no known risk related to HPAI associated with eggs that are currently in the market and no eggs have been recalled.

Looking Ahead

Miller added, “We are proud of our ability to manage our operations effectively and deliver favorable results to date for fiscal 2024. Like other producers, we have navigated significant challenges related to HPAI, and we remain diligent in our efforts to mitigate any future risks. We commend our team of managers and employees who have worked through these challenges with minimal disruption to our overall production and distribution. Importantly, we remain committed to meeting the needs of our valued customers with a diverse offering of quality products. Demand for shell eggs has remained strong as consumers look for an affordable and nutritious protein option. Across our operations, we are focused on meeting this demand, as we continue to identify opportunities to extend our market reach. We are also making significant investments in our operations to drive innovation and more efficient production and support our ability to add capacity, including cage-free opportunities. We have a strong balance sheet that provides us with the flexibility to fund our growth initiatives, including potential acquisitions. We believe fiscal 2024 will be another successful year for the Company, and we look forward to the opportunities ahead for Cal-Maine Foods.”

Dividend Payment

For the third quarter of fiscal 2024, Cal-Maine Foods will pay a cash dividend of approximately $1.00 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 May 16, 2024, to holders of record on May 1, 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, and (ix) global instability, including as a result of the war in Ukraine, the Israel-Hamas conflict and attacks on shipping in the Red Sea. 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

 

39 Weeks Ended

 

 

March 2, 2024

 

February 25, 2023

 

March 2, 2024

 

February 25, 2023

Net sales

 

$

703,076

 

 

$

997,493

 

 

$

1,685,654

 

 

$

2,457,537

 

Cost of sales

 

 

484,504

 

 

 

534,467

 

 

 

1,330,519

 

 

 

1,459,172

 

Gross profit

 

 

218,572

 

 

 

463,026

 

 

 

355,135

 

 

 

998,365

 

Selling, general and administrative

 

 

66,020

 

 

 

58,489

 

 

 

194,844

 

 

 

170,048

 

Gain on involuntary conversions

 

 

(9,929

)

 

 

(3,220

)

 

 

(9,929

)

 

 

(3,220

)

(Gain) loss on disposal of fixed assets

 

 

(306

)

 

 

(26

)

 

 

(44

)

 

 

36

 

Operating income

 

 

162,787

 

 

 

407,783

 

 

 

170,264

 

 

 

831,501

 

Other income, net

 

 

22,372

 

 

 

17,104

 

 

 

37,746

 

 

 

21,134

 

Income before income taxes

 

 

185,159

 

 

 

424,887

 

 

 

208,010

 

 

 

852,635

 

Income tax expense

 

 

38,796

 

 

 

102,118

 

 

 

44,658

 

 

 

206,438

 

Net income

 

 

146,363

 

 

 

322,769

 

 

 

163,352

 

 

 

646,197

 

Less: Loss attributable to noncontrolling interest

 

 

(349

)

 

 

(450

)

 

 

(1,295

)

 

 

(896

)

Net income attributable to Cal-Maine Foods, Inc.

 

$

146,712

 

 

$

323,219

 

 

$

164,647

 

 

$

647,093

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

Basic

 

$

3.01

 

 

$

6.64

 

 

$

3.38

 

 

$

13.31

 

Diluted

 

$

3.00

 

 

$

6.62

 

 

$

3.37

 

 

$

13.25

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

48,727

 

 

 

48,653

 

 

 

48,702

 

 

 

48,634

 

Diluted

 

 

48,884

 

 

 

48,842

 

 

 

48,865

 

 

 

48,832

 

 

 

 

 

 

 

 

 

 

CAL-MAINE FOODS, INC. AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS

(Unaudited)

(In thousands)

 

SUMMARY BALANCE SHEETS

   

 

 

March 2, 2024

 

June 3, 2023

ASSETS

 

 

 

 

Cash and short-term investments

 

$

694,843

 

$

647,914

Receivables, net

 

 

246,622

 

 

187,213

Inventories, net

 

 

269,244

 

 

284,418

Prepaid expenses and other current assets

 

 

6,883

 

 

5,380

Current assets

 

 

1,217,592

 

 

1,124,925

 

 

 

 

 

Property, plant and equipment, net

 

 

826,573

 

 

744,540

Other noncurrent assets

 

 

89,364

 

 

85,060

Total assets

 

$

2,133,529

 

$

1,954,525

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Accounts payable and accrued expenses

 

$

166,798

 

$

145,601

Dividends payable

 

 

48,891

 

 

37,130

Current liabilities

 

 

215,689

 

 

182,731

 

 

 

 

 

Deferred income taxes and other liabilities

 

 

196,881

 

 

162,211

Stockholders' equity

 

 

1,720,959

 

 

1,609,583

Total liabilities and stockholders' equity

 

$

2,133,529

 

$

1,954,525

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240402210813/en/

Sherman Miller, President and CEO Max P. Bowman, Vice President and CFO (601) 948-6813