CAL-MAINE FOODS INC
10-Ks and 10-Qs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
DC
20549
FORM
For the quarterly period ended
or
For the transition period from ____________ to ____________
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization)
(I.R.S Employer Identification No.)
,
,
,
(Address of principal executive offices)
(Zip Code)
(
)
(Registrant’s telephone number,
including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
The
Indicate
by
check
mark
whether
the
registrant: (1)
has
filed
all
reports
required
to
be
filed
by
Section
13
or
15(d)
of
the
Securities Exchange
Act of 1934
during the preceding
12 months (or
for such
shorter period that
the registrant was
required to
file such reports), and (2) has been subject to such filing requirements for the past
90 days.
☑
☐
Indicate by check
mark whether the
registrant has submitted
electronically every
Interactive Data File
required to be
submitted
pursuant to
Rule 405
of Regulation
S-T (§232.405
of this
chapter) during
the preceding
12 months
(or for
such shorter
period
that the registrant was required to submit such files).
☑
☐
Indicate by
check mark
whether the registrant
is a large
accelerated filer,
an accelerated
filer, a
non-accelerated filer,
a smaller
reporting
company,
or
an
emerging
growth
company.
See
the
definitions
of
“large
accelerated
filer,”
“accelerated
filer,”
“smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of
the Exchange Act.
☑
Accelerated filer
☐
Non – Accelerated filer
☐
Smaller reporting company
Emerging growth company
If
an
emerging
growth
company,
indicate
by
check
mark
if
the
registrant
has
elected
not
to
use
the
extended
transition
period
for
complying
with
any
new
or
revised
financial
accounting
standards
provided
pursuant
to
Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).
Yes
☐
☑
There were
value, outstanding as of October 1, 2024.
2
INDEX
Page
Number
Part I.
Financial Information
Item 1.
Item 2.
Item 3.
Item 4.
Part II.
Other Information
Item 1.
Item 1A.
Item 2.
Item 6.
3
PART
I.
FINANCIAL
INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
Cal-Maine Foods, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except for par value amounts)
(Unaudited)
August 31, 2024
June 1, 2024
Assets
Current assets:
Cash and cash equivalents
$
$
Investment securities available-for-sale
Trade and other receivables, net
Income tax receivable
Inventories
Prepaid expenses and other current assets
Total current
assets
Property, plant &
equipment, net
Investments in unconsolidated entities
Goodwill
Intangible assets, net
Other long-term assets
Total Assets
$
$
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
$
Accrued wages and benefits
Accrued income taxes payable
Dividends payable
Accrued expenses and other liabilities
Total current
liabilities
Other noncurrent liabilities
Deferred income taxes, net
Total liabilities
Commitments and contingencies - see Note 10
—
—
Stockholders’ equity:
Common stock ($
Common stock - authorized
Class A convertible common stock - authorized and issued
Paid-in capital
Retained earnings
Accumulated other comprehensive loss, net of tax
(
474
)
(
1,773
)
Common stock in treasury at cost –
shares at June 1, 2024
(
31,632
)
(
31,597
)
Total Cal-Maine Foods,
Inc. stockholders’ equity
Noncontrolling interest in consolidated entity
(
3,490
)
(
3,104
)
Total stockholders’
equity
Total Liabilities and Stockholders’
Equity
$
$
See Notes to Condensed Consolidated Financial Statements.
4
Cal-Maine Foods, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
Thirteen Weeks
Ended
August 31, 2024
September 2, 2023
Net sales
$
$
Cost of sales
Gross profit
Selling, general and administrative
Loss on involuntary conversions
Gain on disposal of fixed assets
(
1,817
)
(
56
)
Operating income (loss)
(
6,757
)
Other income (expense):
Interest income, net
Other, net
Total other income, net
Income before income taxes
Income tax expense
Net income
Less: Loss attributable to noncontrolling interest
(
386
)
(
515
)
Net income attributable to Cal-Maine Foods, Inc.
$
$
Net income per common share:
Basic
$
$
Diluted
$
$
Weighted average
shares outstanding:
Basic
Diluted
See Notes to Condensed Consolidated Financial Statements.
5
Cal-Maine Foods, Inc. and Subsidiaries
Condensed Consolidated Statements of
Comprehensive Income
(In thousands)
(Unaudited)
Thirteen Weeks
Ended
August 31, 2024
September 2, 2023
Net income
$
$
Other comprehensive income (loss), before tax:
Unrealized holding gain on available-for-sale securities, net of reclassification
adjustments
Income tax expense related to items of other comprehensive income
(
416
)
(
191
)
Other comprehensive income, net of tax
Comprehensive income
Less: Comprehensive loss attributable to the noncontrolling interest
(
386
)
(
515
)
Comprehensive income attributable to Cal-Maine Foods, Inc.
$
$
See Notes to Condensed Consolidated Financial Statements.
6
Cal-Maine Foods, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Thirteen Weeks
Ended
August 31, 2024
September 2, 2023
Cash flows from operating activities:
Net income
$
$
Depreciation and amortization
Deferred income taxes
(
14,605
)
Other adjustments, net
(
39,581
)
Net cash provided by operations
Cash flows from investing activities:
Purchases of investment securities
(
202,196
)
(
28,296
)
Sales and maturities of investment securities
Acquisition of business
(
111,521
)
Purchases of property,
plant and equipment
(
35,773
)
(
26,666
)
Net proceeds from disposal of property,
plant and equipment
Net cash provided by (used in) investing activities
(
135,871
)
Cash flows from financing activities:
Payments of dividends
(
37,758
)
(
36,983
)
Purchase of common stock by treasury
(
34
)
(
5
)
Principal payments on finance lease
(
58
)
Net cash used in financing activities
(
37,792
)
(
37,046
)
Net change in cash and cash equivalents
(
56,211
)
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
$
$
See Notes to Condensed Consolidated Financial Statements.
7
Cal-Maine Foods, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 - Summary of Significant Accounting Policies
Basis of Presentation
The
unaudited
condensed
consolidated
financial
statements
of
Cal-Maine
Foods,
Inc.
and
its
subsidiaries
(the
“Company,”
“we,” “us,” “our”)
have been prepared
in accordance with
the instructions to
Form 10-Q and
Article 10 of
Regulation S-X and
in
accordance
with generally
accepted
accounting
principles in
the
United
States of
America
(“GAAP”)
for
interim
financial
reporting and
should be
read in
conjunction with
our Annual
Report on
Form 10-K
for the fiscal
year ended
June 1,
2024 (the
“2024
Annual
Report”).
These
statements
reflect
all
adjustments
that
are,
in
the
opinion
of
management,
necessary
to
a
fair
statement of the results for
the interim periods presented
and, in the opinion of
management, consist of adjustments
of a normal
recurring nature.
Operating results for
the interim periods
are not necessarily
indicative of operating
results for the
entire fiscal
year.
Fiscal Year
The Company’s
fiscal year ends on
the Saturday closest to
May 31. Each of
the three-month periods
ended on August 31, 2024
and September 2, 2023 included
13 weeks
.
Use of Estimates
The preparation of the
consolidated financial statements in
conformity with GAAP requires management
to make estimates and
assumptions
that affect
the amounts
reported in
the consolidated
financial statements
and accompanying
notes. Actual
results
could differ from those estimates.
Investment Securities
Available-for-Sale
The Company
has determined
that its
debt securities
are available-for-sale
investments. We
classify these
securities as
current
because the
amounts invested
are available
for current
operations. Available
-for-sale
securities are
carried at
fair value,
based
on quoted market prices
as of the balance sheet
date, with unrealized gains
and losses recorded in other
comprehensive income.
The
amortized
cost
of
debt
securities
is
adjusted
for
amortization
of
premiums
and
accretion
of
discounts
to
maturity
and
is
recorded in interest
income. The Company regularly
evaluates changes to the
rating of its debt
securities by credit agencies
and
economic conditions
to assess and
record any
expected credit
losses through
allowance for
credit losses,
limited to
the amount
that fair value was less than the amortized cost basis.
The cost
basis for
realized gains
and losses
on available-for-sale
securities is
determined by
the specific
identification method.
Gains
and
losses
are
recognized
in
other
income
(expenses)
as
Other,
net
in
the
Company’s
Condensed
Consolidated
Statements of Income. Interest and dividends on securities classified as available-for-sale
are recorded in interest income.
Trade Receivables
Trade receivables
are stated at
their carrying
values, which
include a reserve
for credit losses.
As of August
31, 2024
and June
1,
2024,
reserves
for
credit
losses
were
$
customers based on
an evaluation of each
customer’s financial condition
and credit history.
Collateral is generally
not required.
The
Company
minimizes
exposure
to
counter
party
credit
risk
through
credit
analysis
and
approvals,
credit
limits,
and
monitoring
procedures.
In
determining
our
reserve
for
credit
losses,
receivables
are
assigned
an
expected
loss
based
on
historical loss information adjusted as needed for economic and
other forward-looking factors.
Dividends Payable
We
accrue dividends at
the end of
each quarter according
to the Company’s
dividend policy adopted
by its Board
of Directors.
The Company
pays a dividend
to shareholders
of its Common
Stock and
Class A Common
Stock on
a quarterly
basis for each
quarter for
which the
Company reports
net income
attributable to
Cal-Maine Foods,
Inc. computed
in accordance
with GAAP
in an amount
equal to one-third
(1/3) of such
quarterly income. Dividends
are paid to
shareholders of record
as of the 60th
day
following the
last day
of such quarter,
except for
the fourth fiscal
quarter.
For the
fourth quarter,
the Company
pays dividends
to shareholders of record on the 65th day after the
quarter end. Dividends are payable on the 15th day following
the record date.
8
Following a quarter for which the Company does not report net income
attributable to Cal-Maine Foods, Inc., the Company will
not pay a dividend
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 dividend policy is subject to
periodic review by the Board of
Directors.
Revenue Recognition
The
Company
recognizes
revenue
through
sale of
its products
to
customers
through
retail, foodservice
and
other
distribution
channels.
The
majority
of
the
Company’s
revenue
is
derived
from
agreements
or
contracts
with
customers
based
upon
the
customer
ordering
its
products
with
a
single
performance
obligation
of
delivering
the
product.
The
Company
believes
the
performance
obligation
is
met
upon
delivery
and
acceptance
of
the
product
by
our
customers,
which
generally
occurs
upon
shipment
or
delivery
to
a
customer
based
on
terms
of
the
sale.
Costs
paid
to
third
party
brokers
to
obtain
agreements
are
expensed as the Company’s
agreements are generally less than one year.
Revenues are
recognized in
an amount
that reflects
the net
consideration we
expect to
receive in
exchange for
delivery of
the
products.
The
Company
periodically
offers
sales
incentives
or
other
programs
such
as
rebates,
discounts,
coupons,
volume-
based incentives,
guaranteed sales and
other programs.
The Company
records an estimated
allowance for costs
associated with
these programs, which
is recorded as a
reduction in revenue at
the time of sale
using historical trends
and projected redemption
rates
of
each
program.
The
Company
regularly
reviews
these
estimates
and
any
difference
between
the
estimated
costs
and
actual realization of these programs would be recognized the subsequent
period.
Business Combinations
The Company applies the acquisition
method of accounting, which
requires that once control is obtained,
all the assets acquired
and liabilities assumed,
including amounts
attributable to noncontrolling
interests, are recorded
at their respective
fair values at
the date of acquisition. We
determine the fair values of identifiable assets and liabilities
internally,
which requires estimates and
the
use
of
various
valuation
techniques.
When
a
market
value
is
not
readily
available,
our
internal
valuation
methodology
considers the remaining estimated life of the assets acquired and what
management believes is the market value for those assets.
We
typically use the income
method approach for
intangible assets acquired in
a business combination. Significant
estimates in
valuing
certain
intangible
assets
include,
but
are
not
limited
to,
the
amount
and
timing
of
future
cash
flows,
growth
rates,
discount rates and
useful lives. The
excess of the purchase
price over fair values
of identifiable assets and
liabilities is recorded
as goodwill.
Loss Contingencies
Certain
conditions
may
exist
as
of
the
date
the
consolidated
financial
statements
are
issued
that
may
result
in
a
loss
to
the
Company but
which will only
be resolved when
one or more
future events occur
or fail to
occur.
The Company’s
management
and
its
legal
counsel
assess
such
contingent
liabilities,
and
such
assessment
inherently
involves
an
exercise
of
judgment.
In
assessing loss
contingencies
related to
legal proceedings
that are
pending against
the Company
or unasserted
claims that
may
result in
such proceedings,
the Company’s
legal counsel
evaluates the
perceived merits
of any
legal proceedings
or unasserted
claims as well as the perceived merits of the amount of relief sought or expected
to be sought therein.
If the assessment
of a contingency
indicates it is
probable that
a material loss
has been incurred
and the amount
of the liability
can
be
estimated,
the
estimated
liability
would
be
accrued
in
the
Company’s
consolidated
financial
statements.
If
the
assessment
indicates
a
potentially
material
loss
contingency
is
not
probable,
but
is
reasonably
possible,
or
is
probable
but
cannot
be
estimated,
then
the
nature
of
the
contingent
liability,
together
with
an
estimate
of
the
range
of
possible
loss
if
determinable
and material,
would be
disclosed.
Loss contingencies
considered
remote
are generally
not disclosed
unless they
involve guarantees, in which case the nature of the guarantee would be disclosed.
The Company expenses the costs of litigation as they are incurred.
New Accounting Pronouncements and Policies
No new accounting pronouncement issued or effective
during the fiscal year had or is expected to have a material impact on
our
Consolidated Financial Statements.
9
Note 2 - Acquisition
Effective
, the
Company
acquired
substantially
all of
the commercial
shell egg
production,
processing and
egg
products breaking
facilities of
ISE America,
Inc. and
certain of
its affiliates
(“ISE”).
The assets
acquired included
commercial
shell
egg
production
and
processing
facilities
with
a
capacity
at
the
time
of
acquisition
of
approximately
hens, including
egg products breaking facility.
The acquired assets also include an extensive customer
distribution network across the Northeast
and
Mid-Atlantic
states,
and
production
operations
in
Maryland,
New
Jersey,
Delaware
and
South
Carolina.
The
Company
accounted for the acquisition as a business combination.
Pending the
finalization of
the Company’s
valuation, the
following table
summarizes the
consideration paid
for the
ISE assets
and the amounts of assets acquired and liabilities assumed recognized
at the acquisition date (in thousands):
Cash consideration paid
$
Recognized amounts of identifiable assets acquired and liabilities assumed
Inventories
$
Property, plant and equipment
Intangible assets
Liabilities assumed
(
308
)
Total identifiable
net assets
$
Inventories consisted primarily of flock, feed ingredients,
packaging, and egg inventory.
Flock inventory was valued at carrying
value
as
management
believes
that
its
carrying
value
best
approximates
its
fair
value.
Feed
ingredients,
packaging
and
egg
inventory were all valued based on market prices as of June 28, 2024.
Property,
plant and
equipment were
valued utilizing
the cost
approach which
is based
on replacement
or reproduction
costs of
the assets and subtracting any depreciation resulting from physical deterioration
and/or functional or economic obsolescence.
Intangible
assets
consisted
primarily
of
customer
lists
acquired.
Customers
lists
were
valued
using
the
income
method
approach.
Note 3 - Investment
Securities
The following represents the Company’s
investment securities as of August 31, 2024 and June 1, 2024 (in thousands):
August 31, 2024
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Estimated
Fair Value
Municipal bonds
$
$
$
$
Commercial paper
Corporate bonds
Certificates of deposits
US government and agency obligations
Asset backed securities
Treasury bills
Total current
investment securities
$
$
$
$
10
June 1, 2024
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Estimated
Fair Value
Municipal bonds
$
$
$
$
Commercial paper
Corporate bonds
Certificates of deposits
US government and agency obligations
Asset backed securities
Treasury bills
Total current
investment securities
$
$
$
$
Available-for-sale
Proceeds
from
sales and
maturities of
investment
securities available-for-sale
were $
the
thirteen
weeks
ended August
31,
2024
and
September
2,
2023,
respectively.
Gross
realized
gains
for
the
thirteen
weeks
ended August 31,
2024 and September
2, 2023 were
$
losses for the thirteen weeks ended August 31, 2024. Gross realized losses for the
thirteen weeks ended September 2, 2023 were
$
Actual maturities
may differ
from contractual
maturities as some
borrowers have
the right to
call or prepay
obligations with
or
without penalties. Contractual maturities of current investments at August
31, 2024 are as follows (in thousands):
Estimated Fair Value
Within one year
$
1-5 years
Total
$
Note 4 - Fair Value
Measurements
The Company
is required
to categorize
both financial
and nonfinancial
assets and
liabilities based
on the
following fair
value
hierarchy. The
fair value
of an
asset is
the price
at which
the asset
could be
sold in
an orderly
transaction between
unrelated,
knowledgeable, and willing
parties able to engage in
the transaction. A liability’s
fair value is defined
as the amount that would
be
paid
to
transfer
the
liability
to
a
new
obligor
in
a
transaction
between
such
parties,
not
the
amount
that
would
be paid
to
settle the liability with the creditor.
•
Level 1
•
Level 2
directly or indirectly,
including:
◦
Quoted prices for similar assets or liabilities in active markets
◦
Quoted prices for identical or similar assets in non-active markets
◦
Inputs other than quoted prices that are observable for the asset or liability
◦
Inputs derived principally from or corroborated by other observable market
data
•
Level 3
significant to the fair value of the assets or liabilities
The disclosures of fair value of certain financial assets and liabilities that are recorded
at cost are as follows:
Cash and cash equivalents, accounts receivable,
and accounts payable:
short maturity of these instruments.
11
Assets and Liabilities Measured at Fair
Value
on a Recurring Basis
In
accordance
with
the
fair
value
hierarchy
described
above,
the
following
table
shows
the
fair
value
of
financial
assets and
liabilities measured at fair value on a recurring basis as of August 31, 2024 and June 1,
2024 (in thousands):
August 31, 2024
Level 1
Level 2
Level 3
Balance
Assets
Municipal bonds
$
$
$
$
Commercial paper
Corporate bonds
Certificates of deposits
US government and agency obligations
Asset backed securities
Treasury bills
Total assets measured at fair
value
$
$
$
$
Liabilities
Contingent consideration
$
$
$
$
Total liabilities measured
at fair value
$
$
$
$
June 1, 2024
Level 1
Level 2
Level 3
Balance
Assets
Municipal bonds
$
$
$
$
Commercial paper
Corporate bonds
Certificates of deposits
US government and agency obligations
Asset backed securities
Treasury bills
Total assets measured at fair
value
$
$
$
$
Liabilities
Contingent consideration
$
$
$
$
Total liabilities measured
at fair value
$
$
$
$
Investment
securities
–
available-for-sale
classified
as Level
2
consist
of
securities
with maturities
of
three
months
or longer
when purchased. We
classified these securities as
current because amounts
invested are readily available
for current operations.
Observable inputs for these securities are yields, credit risks, default rates, and volatility.
Contingent consideration
classified as Level 3
consists
of the potential
obligation to pay
an earnout to
the sellers of Fassio
Egg
Farms,
Inc.
contingent
on
the
acquired
business
meeting
certain
return
on
profitability
milestones
over
a
three-year
commencing on the date
of the acquisition in the
second quarter of fiscal 2024.
The fair value of the
contingent consideration is
estimated
using
a
discounted
cash
flow
model.
Key
assumptions
and
unobservable
inputs
that
require
significant
judgement
used
in
the
estimate
include
weighted
average
cost
of
capital,
egg
prices,
projected
revenue
and
expenses
over
which
the
contingent
considered
is measured
,
and
the probability
assessments with
respect to
the likelihood
of achieving
the forecasted
projections.
12
Note 5 - Inventories
Inventories consisted of the following as of August 31, 2024 and June 1,
2024 (in thousands):
August 31, 2024
June 1, 2024
Flocks, net of amortization
$
$
Eggs and egg products
Feed and supplies
$
$
We
grow
and
maintain
flocks
of
layers
(mature
female
chickens),
pullets
(female
chickens,
under
18
weeks
of
age),
and
breeders (male
and female
chickens used
to produce
fertile eggs
to hatch
for egg
production flocks).
Our total
flock at
August
31, 2024
and June
1, 2024
consisted of
approximately
Note 6 - Equity
The following reflects equity activity for the thirteen weeks ended
August 31, 2024 and September 2, 2023 (in thousands):
Thirteen Weeks
Ended August 31, 2024
Cal-Maine Foods, Inc. Stockholders
Common Stock
Class A
Treasury
Paid In
Accum.
Other
Retained
Noncontrolling
Amount
Amount
Amount
Capital
Comp. Loss
Earnings
Interest
Total
Balance at June 1,
2024
$
$
$
(
31,597
)
$
$
(
1,773
)
$
$
(
3,104
)
$
Other comprehensive
income, net of tax
—
—
—
—
—
—
Stock compensation
plan transactions
(
35
)
—
—
—
Dividends ($
per share)
Common
—
—
—
—
—
(
45,075
)
—
(
45,075
)
Class A common
—
—
—
—
—
(
4,891
)
—
(
4,891
)
Net income (loss)
—
—
—
—
—
(
386
)
Balance at August 31,
2024
$
$
$
(
31,632
)
$
$
(
474
)
$
$
(
3,490
)
$
13
Thirteen Weeks
Ended September 2, 2023
Cal-Maine Foods, Inc. Stockholders
Common Stock
Class A
Treasury
Paid In
Accum.
Other
Retained
Noncontrolling
Amount
Amount
Amount
Capital
Comp. Loss
Earnings
Interest
Total
Balance at June 3,
2023
$
$
$
(
30,008
)
$
$
(
2,886
)
$
$
(
1,498
)
$
Other comprehensive
income, net of tax
—
—
—
—
—
—
Stock compensation
plan transactions
(
6
)
—
—
—
Dividends ($
per share)
Common
—
—
—
—
—
(
265
)
—
(
265
)
Class A common
—
—
—
—
—
(
29
)
—
(
29
)
Net income (loss)
—
—
—
—
—
(
515
)
Balance at September
2, 2023
$
$
$
(
30,014
)
$
$
(
2,291
)
$
$
(
2,013
)
$
Note 7 - Net Income per Common Share
Basic net income
per share is
based on the
weighted average Common
Stock and Class
A Common Stock
outstanding. Diluted
net
income
per
share
is
based
on
weighted-average
common
shares
outstanding
during
the
relevant
period
adjusted
for
the
dilutive effect of share-based awards.
The
following
table
provides
a
reconciliation
of
the
numerators
and
denominators
used
to
determine
basic
and
diluted
net
income per common share (amounts in thousands, except per share data):
Thirteen Weeks
Ended
August 31, 2024
September 2, 2023
Numerator
Net income
$
$
Less: Loss attributable to noncontrolling interest
(
386
)
(
515
)
Net income attributable to Cal-Maine Foods, Inc.
$
$
Denominator
Weighted-average
common shares outstanding, basic
Effect of dilutive restricted shares
Weighted-average
common shares outstanding, diluted
Net income per common share attributable to Cal-Maine Foods, Inc.
Basic
$
$
Diluted
$
$
14
Note 8 - Revenue from Contracts with Customers
Net revenue is primarily generated through the sales of
shell eggs and egg products. The Company’s
shell egg product offerings
include specialty and
conventional shell eggs.
Specialty shell eggs include
cage-free, organic,
brown, free-range, pasture-raised
and nutritionally enhanced eggs. Conventional shell egg sales represent all other
shell egg sales not sold as specialty shell eggs.
The Company’s
egg products
offerings
include liquid
and frozen
egg products
and hard-cooked
eggs.
Liquid and
frozen egg
products
are
primarily
sold
to
the
institutional,
foodservice
and
food
manufacturing
sectors.
Hard-cooked
eggs
are
sold
primarily within the foodservice and retail channels.
The following table provides revenue disaggregated by product category
(in thousands):
Thirteen Weeks
Ended
August 31, 2024
September 2, 2023
Conventional shell egg sales
$
$
Specialty shell egg sales
Egg products
Other
$
$
Note 9 - Stock Based Compensation
Total
stock-based compensation
expense was
$
September 2, 2023, respectively.
Unrecognized
compensation
expense
as a
result
of non
-vested
shares
of
restricted
stock outstanding
under
the
Amended
and
Restated 2012 Omnibus Long-Term
Incentive Plan at August 31, 2024 of $
period
of
Stock Compensation Plans in our 2024 Annual Report for further information
on our stock compensation plans.
The Company’s restricted share activity
for the thirteen weeks ended August 31, 2024 follows:
Number of
Shares
Weighted
Average Grant
Date Fair Value
Outstanding, June 1, 2024
$
Vested
(
2,057
)
Forfeited
(
1,682
)
Outstanding, August 31, 2024
$
Note 10 - Commitments and Contingencies
LEGAL PROCEEDINGS
State of Texas
v. Cal-Maine Foods, Inc. d/b/a Wharton;
and Wharton County Foods, LLC
On April
23, 2020,
the Company
and its subsidiary
Wharton County
Foods, LLC (“WCF”)
were named
as defendants in
State
of
Texas
v.
Cal-Maine
Foods,
Inc.
d/b/a
Wharton;
and
Wharton
County
Foods,
LLC,
Cause
No.
2020-25427,
in
the
District
Court of
Harris County,
Texas.
The State
of Texas
(the “State”)
asserted claims
based on
the Company’s
and WCF’s
alleged
violation
of
the
Texas
Deceptive
Trade
Practices—Consumer
Protection
Act,
Tex.
Bus.
&
Com.
Code
§§
17.41-17.63
(“DTPA”).
The
State
claimed
that
the
Company
and
WCF
offered
shell
eggs
at
excessive
or
exorbitant
prices
during
the
COVID-19
state
of
emergency
and
made
misleading
statements
about
shell
egg
prices.
The
State
sought
temporary
and
permanent
injunctions
against
the
Company
and
WCF
to
prevent
further
alleged
violations
of
the
DTPA,
along
with
over
$
prejudice. On September
11, 2020,
the State filed a
notice of appeal,
which was assigned
to the Texas
Court of Appeals
for the
First
District.
On
August
16,
2022,
the
appeals
court
reversed
and
remanded
the
case
back
to
the
trial
court
for
further
15
proceedings. On October 31, 2022,
the Company and WCF appealed
the First District Court’s
decision to the Supreme Court
of
Texas.
On September
29, 2023,
the Supreme
Court of
Texas
denied the
Company’s
Petition for
Review and
remanded to
the
trial
court
for
further
proceedings.
The district
court
entered a
pre-trial
order
scheduling
pre-trial
proceedings
and
tentatively
setting a trial date for August 11, 2025. Management
believes the risk of material loss related to this matter to be remote.
Kraft Foods Global, Inc. et al. v.
United Egg Producers, Inc. et al.
As previously
reported, on
September 25,
2008, the
Company
was named
as one
of several
defendants
in numerous
antitrust
cases involving
the United
States shell
egg
industry.
The Company
settled all
of these
cases, except
for
the claims
of certain
plaintiffs who sought substantial
damages allegedly arising from
the purchase of egg products (as
opposed to shell eggs). These
remaining plaintiffs
are Kraft Food
Global, Inc.,
General Mills, Inc.,
and Nestle USA,
Inc. (the
“Egg Products
Plaintiffs”) and,
until a subsequent settlement was reached as described below,
The Kellogg Company.
On September
13, 2019,
the case
with the
Egg Products
Plaintiffs was
remanded from
a multi-district
litigation proceeding
in
the
United
States
District
Court
for
the
Eastern
District
of
Pennsylvania,
In
re
Processed
Egg
Products
Antitrust
Litigation,
MDL No. 2002, to
the United States District Court
for the Northern District
of Illinois, Kraft Foods Global,
Inc. et al. v.
United
Egg
Producers,
Inc.
et
al., Case
No.
1:11-cv-8808,
for
trial. The
Egg
Products
Plaintiffs
alleged
that
the
Company
and
other
defendants
violated
Section
1
of
the
Sherman
Act,
15.
U.S.C.
§
1,
by
agreeing
to
limit
the
production
of
eggs
and
thereby
illegally
to
raise
the
prices
that
plaintiffs
paid
for
processed
egg
products.
In
particular,
the
Egg
Products
Plaintiffs
attacked
certain features of
the United Egg
Producers animal-welfare guidelines
and program used by
the Company and
many other egg
producers.
On October 24, 2019,
the Company entered into
a confidential settlement agreement
with The Kellogg Company
dismissing all
claims against the
Company for an
amount that did
not have a
material impact on
the Company’s
financial condition or
results
of operations.
On November
11,
2019, a
stipulation
for dismissal
was filed
with the
court, and
on March
28, 2022,
the court
dismissed the Company with prejudice.
The trial of this case began
on October 17, 2023. On December
1, 2023, the jury returned a decision
awarding the Egg Products
Plaintiffs
$
liable
for
treble
damages,
or
$
settlements with
previous
settling defendants,
plus the
Egg Product
Plaintiffs’
reasonable
attorneys’
fees. This
decision is
not
final and remains subject to appeals by the parties. During
our second fiscal quarter of 2024, we recorded an accrued expense
of
$
and classified as
other noncurrent liabilities
in the Company’s
Condensed Consolidated
Balance Sheets. The
accrual represents
our
estimate
of
the
Company’s
proportional
share
of
the
reasonably
possible
ultimate
damages
award,
excluding
the
Egg
Product Plaintiffs’
attorneys’ fees
that we
believe would
be approximately
offset by
the credits
noted above.
We
have entered
into a judgment
allocation and joint
defense agreement
with the other
major producer
defendant remaining
in the case,
and are
in discussions
with other
defendants regarding
their contributions.
Our accrual
may change
in the future
based on
the outcome
of those discussions.
Our accrual may
also be revised
in whole or
in part in
the future to
the extent we
are successful in
further
proceedings in the
litigation.
On November 29, 2023,
the defendants, including
the Company,
filed a motion for
judgment as a
matter of
law in
their favor,
known as
a directed
verdict, notwithstanding
the jury’s
decision. The
court denied
this motion
on
September
30, 2024.
The Company
is evaluating
the court’s
September
30, 2024
order and
intends to
continue
to vigorously
defend the claims asserted by the Egg Products Plaintiffs.
State of Oklahoma Watershed Pollution
Litigation
On June
18, 2005,
the State
of Oklahoma
filed suit,
in the
United States
District Court
for the
Northern District
of Oklahoma,
against Cal-Maine
Foods,
Inc. and
Tyson
Foods,
Inc., Cobb-Vantress,
Inc., Cargill,
Inc., George’s,
Inc., Peterson
Farms, Inc.
and
Simmons
Foods,
Inc.,
and
certain
of
their
affiliates.
The
State
of
Oklahoma
claims
that
through
the
disposal
of
chicken
litter the
defendants polluted
the Illinois
River Watershed.
This watershed
provides water
to eastern
Oklahoma. The
complaint
sought
injunctive
relief
and
monetary
damages,
but
the
claim
for
monetary
damages
was dismissed
by
the
court.
Cal-Maine
Foods,
Inc.
discontinued
operations
in
the
watershed
in
or
around
2005.
Since
the
litigation
began,
Cal-Maine
Foods,
Inc.
purchased
%
of
the
membership
interests
of
Benton
County
Foods,
LLC,
which
is
an
ongoing
commercial
shell
egg
operation within
the Illinois
River Watershed.
Benton County
Foods, LLC
is not
a defendant
in the
litigation. We
also have
a
number of small contract producers that operate in the area.
The non-jury trial in the case began in September 2009
and concluded in February 2010. On January 18, 2023, the court entered
findings of
fact and
conclusions of
law in favor
of the
State of
Oklahoma, but
no penalties
were assessed.
The court
found the
defendants
liable
for
state
law
nuisance,
federal
common
law
nuisance,
and
state
law
trespass.
The
court
also
found
the
producers
vicariously
liable
for
the
actions
of
their
contract
producers.
The
court
directed
the
parties
to
confer
in
attempt
to
reach
agreement
on
appropriate
remedies.
On
June
12,
2023,
the
court
ordered
the
parties
to
mediate
before
retired
Tenth
16
Circuit
Chief
Judge
Deanell
Reece
Tacha,
but
the
mediation
was
unsuccessful.
On
June
26,
2024,
the
district
court
denied
defendants’
motion
to
dismiss
the
case.
On
September
13,
2024,
a
status
hearing
was
held
and
the
court
scheduled
an
evidentiary
hearing
for December
3, 2024,
to determine
whether any
legal remedy
is available
based on
the now
14 year
old
record
and
changed
circumstances
of
the
Illinois
River
watershed.
On
September
20,
2024,
the
defendants
filed
motions
to
certify an interlocutory
appeal and stay
further proceedings
pending appeal to
the United States
Court of Appeals
for the Tenth
Circuit.
The
court
has
not ruled
on these
motions.
While
management
believes
there
is a
reasonable
possibility
of a
material
loss from
the case,
at the
present time,
it is
not possible
to estimate
the amount
of monetary
exposure, if
any,
to the
Company
due
to
a
range
of
factors,
including
the
following,
among
others:
uncertainties
inherent
in
any
assessment
of
potential
costs
associated with injunctive
relief or other penalties
based on a decision
in a case tried over
14 years ago based
on environmental
conditions that existed at the
time, the lack of guidance from
the court as to what might
be considered appropriate remedies,
the
ongoing litigation with the State
of Oklahoma, and uncertainty regarding
what our proportionate share of any
remedy would be,
although we believe that our share compared to the other defendants is small.
Other Matters
In addition to
the above, the Company
is involved in
various other claims
and litigation incidental
to its business. Although
the
outcome of
these matters
cannot be
determined with
certainty,
management, upon
the advice
of counsel,
is of
the opinion
that
the final outcome should not have a material effect on the Company’s
consolidated results of operations or financial position.
Note 11 - Subsequent Events
Effective
on
September
9,
2024,
the
Company
completed
a
strategic
investment
with
Crepini
LLC,
establishing
a
new
egg
products and
prepared foods
venture. Crepini
LLC, founded
in 2007,
grew its
brand throughout
the United
States and
Mexico
featuring
egg
wraps,
protein
pancakes,
crepes,
and
wrap-ups,
which
are
sold
online
and
in
over
entity,
located in Hopewell Junction,
New York,
operates as Crepini
Foods LLC (“Crepini”).
The Company capitalized Crepini
with
approximately
$
exchange for a
% interest in the new venture.
Crepini LLC contributed its existing
assets and business in exchange
for a
%
interest in the new venture.
17
ITEM
2.
MANAGEMENT’S
DISCUSSION
AND
ANALYSIS
OF
FINANCIAL
CONDITION
AND
RESULTS
OF
OPERATIONS
The following
should be
read in
conjunction
with Management’s
Discussion and
Analysis of
Financial Condition
and Results
of Operations
included in Part
II Item 7
of the Company’s
Annual Report
on Form 10-K
for its fiscal
year ended
June 1, 2024
(the “2024 Annual Report”), and the accompanying financial statements and
notes included in Part II Item 8 of the 2024 Annual
Report and in
This
report
contains
numerous
forward-looking
statements
within
the
meaning
of
Section
27A
of
the
Securities
Act
of
1933
(the “Securities
Act”) and
Section 21E
of the
Securities Exchange
Act of
1934 (the
“Exchange Act”)
relating to
our shell
egg
and egg
products business,
including estimated
future production
data, expected
construction schedules,
projected construction
costs, potential
future supply
of and
demand for
our products,
potential future
corn and
soybean price
trends, potential
future
impact on our business of the resurgence in United States (“U.S.”)
commercial table egg layer flocks of highly pathogenic avian
influenza (“HPAI”),
potential future
impact on
our business
of inflation
and changing
interest rates,
potential future
impact on
our business
of new
legislation, rules
or policies,
potential outcomes
of legal
proceedings, including
loss contingency
accruals
and factors that
may result in changes
in the amounts recorded,
and other projected operating
data, including anticipated results
of operations
and financial
condition. Such
forward-looking
statements are
identified by
the use
of words
such as
“believes,”
“intends,”
“expects,”
“hopes,” “may,”
“should,”
“plans,”
“projected,”
“contemplates,”
“anticipates,”
or
similar words.
Actual
outcomes
or
results
could
differ
materially
from
those
projected
in
the
forward-looking
statements.
The
forward-looking
statements
are
based
on management’s
current
intent,
belief,
expectations,
estimates,
and
projections
regarding
the Company
and its
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
Part I
Item
1A
Risk
Factors
of
the
2024
Annual
Report,
the
risk
factors
(if
any)
set
forth
in
Part
II
Item
1A
Risk
Factors
and
elsewhere in
this report
as well
as those
included in
other reports
we file
from time
to time
with the
Securities and
Exchange
Commission (the
“SEC”) (including our
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
product
recall),
including but not limited to the current outbreak
of HPAI
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 recent
or 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
changes
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 conflicts
in Israel and surrounding areas and attacks on
shipping in the Red Sea. 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,
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
update publicly
these forward-
looking statements, whether because of new information, future events,
or otherwise.
GENERAL
Cal-Maine
Foods,
Inc.
(the
“Company,”
“we,”
“us,”
“our”)
is
primarily
engaged
in
the
production,
grading,
packaging,
marketing
and
distribution
of
fresh
shell
eggs.
Our
operations
are
fully
integrated
and we
have
one
operating
and
reportable
segment.
We
are
the
largest
producer
and
distributor
of
fresh
shell
eggs
in
the
U.S.
Our
total
flock
of
approximately
46.7
million
layers
and
10.9
million
pullets
and
breeders
is
the
largest
in
the
U.S.
We
sell
our
shell
eggs
and
egg
products
to
a
diverse group of
customers, including national
and regional grocery
store chains,
club stores, companies
servicing independent
supermarkets
in the
U.S., foodservice
distributors
and
egg product
customers
throughout the
majority
of the
U.S.
and aim
to
maintain efficient, state-of-the-art operations located
close to our customers.
Our
operating
results
are
materially
impacted
by
market
prices for
eggs
and
feed
grains
(corn
and
soybean
meal),
which
are
highly
volatile,
independent
of
each
other,
and
out
of
our
control.
Generally,
higher
market
prices
for
eggs
have
a
positive
impact
on
our
financial
results
while
higher
market
prices
for
feed
grains
have
a
negative
impact
on
our
financial
results.
Although we
use a
variety of
pricing mechanisms
in pricing
agreements with
our customers,
we sell
most of
our conventional
shell eggs
based on
formulas that
consider,
in varying
ways, independently
quoted regional
wholesale
market prices
for shell
eggs
or
formulas
related
to
our
costs
of
production
which
include
the
cost
of
corn
and
soybean
meal.
We
do
not
sell
eggs
directly to consumers or set the prices at which eggs are sold to consumers.
18
Retail
sales
of
shell
eggs
historically
have
been
highest
during
the
fall
and
winter
months
and
lowest
during
the
summer
months. Prices
for shell
eggs fluctuate
in response
to seasonal
demand factors
and a
natural increase
in egg
production during
the
spring
and
early
summer.
Historically,
shell
egg
prices
tend
to
increase
with
the
start
of
the
school
year
and
tend
to
be
highest
prior
to
holiday
periods,
particularly
Thanksgiving,
Christmas
and
Easter.
Consequently,
and
all
other
things
being
equal, we would
expect to experience
lower selling prices, sales
volumes and net
income (and may incur
net losses) in our
first
and
fourth
fiscal
quarters
ending
in
August/September
and
May/June,
respectively.
Because
of
the
seasonal
and
quarterly
fluctuations,
comparisons
of
our
sales
and
operating
results
between
different
quarters
within
a
single
fiscal
year
are
not
necessarily meaningful comparisons.
We
routinely
fill
our
storage
bins
during
harvest
season
when
prices
for
feed
ingredients
are
generally
lower.
To
ensure
continued
availability of
feed ingredients,
we may
enter into
contracts for
future purchases
of corn
and soybean
meal, and
as
part
of
these
contracts,
we
may
lock-in
the
basis
portion
of
our
grain
purchases
several
months
in
advance.
Basis
is
the
difference
between the
local cash
price for
grain and
the applicable
futures price.
A basis
contract is
a common
transaction in
the grain
market that
allows us
to lock-in
a basis
level for
a specific
delivery period
and wait
to set
the futures
price at
a later
date. Furthermore,
due to
the more
limited supply
for organic
ingredients,
we may
commit to
purchase organic
ingredients in
advance to help ensure supply.
Ordinarily, we do
not enter into long-term contracts beyond a year to purchase
corn and soybean
meal
or
hedge
against
increases
in
the
prices
of
corn
and
soybean
meal.
Corn
and
soybean
meal
are
commodities
and
are
subject
to
volatile
price
changes
due
to
weather,
various
supply
and
demand
factors,
transportation
and
storage
costs,
speculators,
agricultural, energy
and trade
policies in
the U.S.
and internationally
,
and global
instability that
could disrupt
the
supply chain.
An important competitive advantage
for Cal-Maine Foods is
our ability to meet
our customers’ evolving needs
with a favorable
mix of
branded and
private-label products
of conventional
and specialty
eggs, including
cage-free, organic,
brown, free-range,
pasture-raised and nutritionally-enhanced eggs as well as egg products.
CAGE-FREE EGGS
Ten
states
have
passed
legislation
or
regulations
mandating
minimum
space
or
cage-free
requirements
for
egg
production
or
mandated
the
sale
of
only
cage-free
eggs
and
egg
products
in
their
states,
with
implementation
of
these
laws
ranging
from
January
2022
to
January
2030.
These
states
represent
approximately
27%
of
the
U.S.
total
population
according
to
the 2020
U.S.
Census.
California,
Massachusetts,
Colorado,
Oregon,
Washington,
and
Nevada,
which
collectively
represent
approximately 20% of the total estimated U.S. population,
have cage-free legislation currently in effect.
A significant number of
our customers have announced
goals to either exclusively offer
cage-free eggs or significantly
increase
the
volume
of
cage-free
egg
sales
in
the
future,
subject
in
most
cases
to
availability
of
supply,
affordability
and
consumer
demand,
among
other
contingencies.
Our
customers
typically
do
not
commit
to
long-term
purchases
of
specific
quantities or
types
of
eggs
with
us,
and
as
a
result,
it
is
difficult
to
accurately
predict
customer
requirements
for
cage-free
eggs.
We
are
focused
on
adjusting
our
cage-free
production
capacity
with
a
goal
of
meeting
the
future
needs
of
our
customers
in
light
of
changing state requirements
and our
customer’s goals.
As always, we
strive to offer
a product
mix that aligns
with current
and
anticipated
customer
purchase
decisions.
We
are
engaging
with
our
customers
to
help
them
meet
their
announced
goals
and
needs. We
have invested significant capital
in recent years to acquire
and construct cage-free facilities, and
we expect our focus
for future
expansion will
continue to
include cage-free
facilities. Our
volume of
cage-free egg
sales has
continued to
increase
and account for a larger share of our
product mix. Cage-free egg revenue represented approximately
25.6% of our total net shell
egg revenue for the
first quarter of fiscal year
2025. At the same time,
we understand the importance
of our continued ability to
provide
conventional
eggs
in
order
to
provide
our
customers
with
a
variety
of
egg
choices
and
to
address
hunger
in
our
communities.
For
additional
information,
see
the
2024
Annual
Report,
Part
I
Item
1,
“Business
–
Specialty
Eggs,”
“Business
–
Growth
Strategy” and
“Business –
Government
Regulation,” and
the first
risk factor
in Part
I Item
1A, “Risk
Factors” under
the sub-
heading “Legal and Regulatory Risk Factors.”
ACQUISITIONS
During the
first quarter
of fiscal
2025,
we acquired
substantially all
the commercial
shell egg
production,
processing and
egg
products
breaking
assets
of
ISE
America,
Inc.
and
certain
of
its
affiliates
(“ISE”).
The
assets
acquired
included
commercial
shell
egg
production
and
processing
facilities
with
a
capacity
at
the
time
of
acquisition
of
approximately
4.7
million
laying
hens, including
1.0 million cage-free,
and 1.2 million
pullets, feed mills,
approximately 4,000
acres of land,
inventories and an
egg products breaking facility.
The acquired assets also include an extensive customer
distribution network across the Northeast
and Mid-Atlantic
states, and
production operations
in Maryland,
New Jersey,
Delaware and
South Carolina.
These production
assets
are
our
first
in
Maryland,
New
Jersey
and
Delaware.
We
believe
this
acquisition
provides
us
with
an
opportunity
to
19
significantly enhance
our market reach
in the Northeast
and Mid-Atlantic states.
See further discussion
in
of the Notes to Condensed Consolidated Financial Statements included in this Quarterly
Report.
In
second
quarter
2024,
we
acquired
the
assets
of
Fassio
Egg
Farms,
Inc.(“Fassio”),
related
to
its
commercial
shell
egg
production and processing
business. Fassio owned
and operated commercial
shell egg production
and processing facilities
with
a
capacity
at
the
time
of
acquisition
of
approximately
1.2
million
laying
hens,
primarily
cage-free,
a
feed
mill,
pullets,
a
fertilizer production and composting operation and land
located in Erda, Utah, outside Salt Lake City.
This acquisition provided
us with
an opportunity
to expand
our market
presence in
Utah and
the western
U.S., particularly
for cage-free
eggs. In
fourth
quarter
2024,
we
acquired
a
broiler
processing
plant,
hatchery
and
feed
mill
in
Dexter,
Missouri
that
were
closed
by
Tyson
Foods, Inc. in 2023 and that we are repurposing for use in shell egg and egg products production.
Following the end of first quarter 2025, we announced that we completed
a strategic investment with Crepini,
LLC, establishing
a
new
egg
products
and
prepared
foods
venture.
See
further
discussion
in
Note
11
–
Subsequent
Events
of
the
Notes
to
Condensed Consolidated Financial Statements included in this Quarterly
Report
HPAI
Outbreaks of HPAI
have continued to
occur in U.S. poultry
flocks. From the
resurgence beginning
in November 2023
until the
last reported
case in
commercial layer
hens in
July 2024,
approximately 33.1
million commercial
laying hens
and pullets
have
been depopulated.
During the
third and fourth
quarters of fiscal
2024, we experienced
HPAI
outbreaks within
our facilities located
in Kansas and
Texas,
resulting in
total depopulation
of approximately
3.1 million
laying hens
and 577,000
pullets. Both
locations have
been
cleared
by
the
USDA to
resume
operations.
Repopulation
began
during
the first
quarter
of
fiscal
2025
and
is expected
to
be
completed before calendar year end.
We
remain
dedicated
to robust
biosecurity
programs
across our
locations;
however,
no farm
is immune
from HPAI.
HPAI
is
currently
widespread
in
the
wild
bird
population
worldwide.
The
extent
of
possible
future
outbreaks,
with
heightened
risk
during the
migration seasons,
and more
recent HPAI
events, which
have been
directly linked
to dairy
cattle operations,
cannot
be predicted.
According to
the U.S.
Centers for
Disease Control
and Prevention,
the human health
risk to
the U.S. public
from
the HPAI
virus 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.
For
additional
information,
see
the
2024
Annual
Report,
Part
II
Item
7
“Management’s
Discussion
and
Analysis of Financial Condition and Results of Operations – HPAI.”
EXECUTIVE OVERVIEW
For the first quarter of
fiscal 2025, we recorded a gross
profit of $247.2 million, compared
to $45.4 million, for the
same period
of fiscal 2024,
primarily driven by an increase in the net average selling price
of shell eggs as well as an increase in total dozens
sold. In the first
quarter of fiscal 2025,
we sold a record
amount of total shell eggs
and specialty shell eggs,
reflecting favorable
demand for
shell eggs during
most of the
quarter.
Our results were
also positively
impacted by
lower feed costs
and our recent
acquisitions discussed above.
Our
net
average
selling
price
per
dozen
for
the
first
quarter
of
fiscal
2025
was
$2.392
compared
to
$1.589
in
the
prior-year
period. Conventional
egg prices
per dozen
were $2.424
compared to
$1.241 for
the prior-year
period, and
specialty egg
prices
per dozen were $2.335
compared to $2.278 for the
prior-year period. Egg
prices in the first quarter
of fiscal 2025 were elevated
compared
to the
prior-year
period
primarily
due
to
the resurgence
of
HPAI
outbreaks,
which
decreased
supply,
among
other
factors.
According
to
the
USDA,
the
monthly
average
size
of
the
layer
hen
flock
from
June
through
August
(which
most
closely aligns with
our first fiscal quarter)
2024 was approximately
305 million hens,
which was a decrease
of 9 million layers
,
or 2.9%,
compared to
the same
period in
the prior
year.
The daily
average price
for the
Urner Barry
southeast large
index for
the
first
quarter
of
fiscal
2025
increased
125.6%
from
the
comparable
period
in
the
prior
year
and
was
volatile
during
the
quarter
with
a
low
of
$2.54
and
a
high
of
$4.63
at
the
end
of
the
quarter.
Subsequent
to
quarter-end,
prices
have
dropped
significantly. For
more information about historical shell egg prices, see Part I Item I of our 2024 Annual
Report.
Our dozens sold
for the first quarter
of fiscal 2025
increased 13.5% compared
to fiscal 2024.
We
had an increase
in production
capacity with the
acquisitions of the
commercial shell egg
production and processing
business of ISE
during the first quarter
of
fiscal
2025
and
Fassio
during
the
second
quarter
of
fiscal
2024,
which
was
partially
offset
by
the
temporary
decrease
in
production due to the HPAI
outbreaks at our facilities in Kansas and Texas
during the third and fourth quarters of fiscal 2024.
20
Our farm
production costs
per dozen
produced for
the first
quarter
of fiscal
2025 decreased
11.7%,
or $0.12
compared to
the
prior year period, primarily
due to lower feed costs. Feed
costs per dozen produced
decreased 17.3%, or $0.10,
compared to the
first
quarter
of
fiscal
2024,
primarily
due
to
lower
feed
ingredient
prices.
For
information
about
historical
corn
and
soybean
meal prices,
see Part
I Item
I of
our 2024
Annual Report.
Our egg
purchases and
other (including
changes in
inventory) costs
increased
$107.7
million
quarter-over-quarter,
primarily
due
to
higher
shell
egg
prices
as
well
as
an
increase
in
dozens
purchased due to the loss of production caused by the HPAI
outbreaks at our facilities as described above .
RESULTS OF
OPERATIONS
The following
table sets forth,
for the periods
indicated, certain
items from
our Condensed Consolidated
Statements of Income
expressed as a percentage of net sales.
Thirteen Weeks
Ended
August 31, 2024
September 2, 2023
Net sales
100.0
%
100.0
%
Cost of sales
68.5
%
90.1
%
Gross profit
31.5
%
9.9
%
Selling, general and administrative
7.9
%
11.3
%
Gain on disposal of fixed assets
(0.2)
%
—
%
Operating income (loss)
23.8
%
(1.4)
%
Total other income, net
1.4
%
1.6
%
Income before income taxes
25.2
%
0.2
%
Income tax expense
6.2
%
0.1
%
Net income
19.0
%
0.1
%
Less: Loss attributable to noncontrolling interest
—
%
(0.1)
%
Net income attributable to Cal-Maine Foods, Inc.
19.0
%
0.2
%
NET SALES
Total
net sales for
the first quarter
of fiscal 2025
were $785.9 million
compared to $459.3
million for the
same period of
fiscal
2024.
Net shell
egg sales
represented 95.5%
and 95.2%
of total
net sales
for the
first quarters
of fiscal
2025 and
2024, respectively.
The Company’s
shell egg offerings
,
for both branded
and private-label products,
include specialty and
conventional shell eggs.
Specialty shell eggs include cage-free, organic,
brown, free-range, pasture-raised and nutritionally enhanced
eggs. Conventional
shell eggs sales represent all
other shell egg sales not sold
as specialty shell eggs. Shell egg sales
classified as “Other” represent
sales of miscellaneous byproducts and resale products included with our shell
egg operations.
The Company’s egg products
offerings
include liquid and frozen egg products and hard-cooked eggs.
21
The table below presents an analysis of our conventional and specialty shell egg
sales (in thousands, except percentage data):
Thirteen Weeks
Ended
August 31, 2024
September 2, 2023
Total net sales
$
785,871
$
459,344
Conventional
$
484,736
64.6
%
$
225,280
51.6
%
Specialty
256,777
34.2
%
208,681
47.7
%
Egg sales, net
741,513
98.8
%
433,961
99.3
%
Other
9,183
1.2
%
3,160
0.7
%
Net shell egg sales
$
750,696
100.0
%
$
437,121
100.0
%
Net shell egg sales as a percent of total net sales
95.5
%
95.2
%
Dozens sold:
Conventional
199,989
64.5
%
181,530
66.5
%
Specialty
109,990
35.5
%
91,596
33.5
%
Total dozens sold
309,979
100.0
%
273,126
100.0
%
Net average selling price per dozen:
Conventional
$
2.424
$
1.241
Specialty
$
2.335
$
2.278
All shell eggs
$
2.392
$
1.589
Egg products sales:
Egg products net sales
$
35,175
$
22,223
Pounds sold
21,051
19,353
Net average selling price per pound
$
1.671
$
1.148
Shell egg net sales
First Quarter – Fiscal 2025
vs. Fiscal 2024
-
In the
first quarter
of fiscal
2025,
conventional
egg sales
increased
$259.5 million,
or 115.2%,
compared to
the first
quarter
of
fiscal
2024,
primarily
due
to
a
95.3%
increase
in
the
prices
for
conventional
eggs,
which
resulted
in
a
$236.6 million increase in
net sales, and a 10.2%
increase in the volume of
conventional eggs sold, which resulted
in a
$22.9
million
increase
in
net
sales.
Results
for
the
first
quarter
of
2025
were
positively
impacted
by
our
recent
acquisitions discussed above.
-
Specialty egg sales increased $48.1 million, or
23.0%, in the first quarter of fiscal 2025 compared
to the first quarter of
fiscal 2024, primarily
due to an 20.1%
increase in the volume
of specialty eggs
sold, which resulted in
a $41.9 million
increase in
net sales
and a
2.5% increase
in prices
for specialty
eggs, which
resulted in
a $6.3
million increase
in net
sales.
-
Demand
for
specialty
eggs
increased
in
the
first
quarter
of
fiscal
2025
as
conventional
egg
prices
rose.
Our
sales
volume benefited
as we sold
20.1% more
specialty eggs by
volume in
the first quarter
of fiscal 2025
versus the prior-
year period. Additionally,
demand continues to be impacted by
cage-free requirements becoming effective
for Nevada,
Oregon and Washington
on January 1, 2024.
-
See “Executive Overview” above for additional discussion.
Egg products net sales
First Quarter – Fiscal 2025
vs. Fiscal 2024
-
Egg
products
net
sales
increased
$13.0
million,
or
58.3%,
for
the
first
quarter
of
fiscal
2025
compared
to
the
same
period of fiscal 2024, primarily
due to a 45.6%
selling price increase, which had a $11.0
million positive impact on net
sales.
22
-
Our egg products
net average selling
price increased in
the first quarter
of fiscal 2025,
compared to the
first quarter of
fiscal 2024, as the supply of shell eggs used to produce egg products was lower due
to the impact of HPAI
.
COST OF SALES
Cost of
sales consists
of
costs directly
related
to producing,
processing
and
packing
shell eggs,
purchases
of
shell
eggs from
outside sources,
processing and
packing of
liquid and
frozen egg
products and
other non-egg
costs. Farm production
costs are
those costs
incurred at
the egg production
facility,
including feed,
facility (including
labor), hen
amortization and
other related
farm production costs.
The following table presents the key variables affecting our cost of
sales (in thousands, except cost per dozen data):
Thirteen Weeks
Ended
August 31, 2024
September 2, 2023
%
Change
Cost of Sales:
Farm production
$
241,701
$
253,507
(4.7)
%
Processing, packaging, and warehouse
91,711
81,906
12.0
Egg purchases and other (including change in inventory)
168,449
60,797
177.1
Total shell eggs
501,861
396,210
26.7
Egg products
36,792
17,701
107.9
Total
$
538,653
$
413,911
30.1
%
Farm production costs (per dozen produced)
Feed
$
0.494
$
0.597
(17.3)
%
Other
$
0.421
$
0.439
(4.1)
%
Total
$
0.915
$
1.036
(11.7)
%
Outside egg purchases (average cost per dozen)
$
2.83
$
1.65
71.5
%
Dozens produced
266,839
250,365
6.6
%
Percent produced to sold
86.1%
91.7%
(6.1)
%
Farm Production
First Quarter – Fiscal 2025
vs. Fiscal 2024
-
Feed costs per dozen produced decreased 17.3% in the first quarter
of fiscal 2025
compared to the first quarter of fiscal
2024. This
decrease was
primarily due
to lower
prices for
corn and
soybean meal,
our primary
feed ingredients.
The
decrease
in
feed
cost
per
dozen
resulted
in
a
decrease
in
cost
of
sales of
$27.5
million
for
the
first
quarter
of
fiscal
2025
compared to the prior period quarter.
-
For the
first quarter
of fiscal
2025, the
average Chicago
Board of
Trade
(“CBOT”) daily
market price
was $4.03
per
bushel
for
corn
and
$340
per
ton
of
soybean
meal,
representing
decreases
of
24.0%
and
19.5%,
respectively,
as
compared to the average CBOT daily market prices for the first quarter
of fiscal 2024.
-
Other farm
production costs decreased
primarily due
to lower flock
amortization. Feed
costs reached their
peak in the
second quarter
of fiscal
2023 and
have since
trended downward.
Lower costs
result in
lower capitalized
values of
the
flocks during the grow out phase, which reduced amortization cost over time.
Current
indications
for
corn
project
an
overall
better
stocks-to-use
ratio
implying
potentially
lower
prices
in
the
near
term;
however, as long
as outside factors remain uncertain
(including weather patterns and
global supply chain disruptions), volatility
could remain.
Processing, packaging, and warehouse
First Quarter – Fiscal 2025
vs. Fiscal 2024
-
Processing, packaging, and warehouse costs increased 12.0
%
compared to the first quarter of fiscal 2024
due to a 7.5%
increase in the volume of processed dozens as well as an increase in costs of packaging
materials.
23
Egg purchases and other (including change in inventory)
First Quarter – Fiscal 2025
vs. Fiscal 2024
-
Costs in
this category
increased primarily
due to
higher shell
egg prices
as the
average cost
per dozen
of outside
egg
purchases
increased
71.5%
compared
to
first
quarter
of
fiscal
2024,
as
well
as
an
increase
of
67.5%
in
dozens
purchased due to the loss of
production caused by the HPAI
outbreaks
at our facilities in Kansas and Texas
in the third
and fourth quarters of fiscal 2024.
GROSS PROFIT
Gross profit, as a percentage of net sales, was 31.5% for the first quarter
of fiscal 2025 compared to 9.9% for the same period of
fiscal 2024.
The increase was
primarily due to
higher net average
selling price as
well as lower
feed ingredient prices,
partially
offset by the increase in volume and price of outside egg purchases
.
SELLING, GENERAL, AND ADMINISTRATIVE
EXPENSES
Selling,
general,
and
administrative
(“SGA”)
expenses
include
costs
of
delivery,
marketing,
and
other
general
and
administrative expenses.
Delivery expense includes
contract trucking
expense and
all costs to
maintain and operate
our fleet of
trucks to
deliver products
to customers
including the
related payroll
expenses. Marketing
expense includes
franchise fees
that
are
submitted
to
Eggland’s
Best,
Inc.
to
support
the
EB brand,
brokerage
and
commission
fees,
and
other
general
marketing
expenses
such
as
payroll
expenses
for
our
in-house
sales
team.
Other
general
and
administrative
expenses
include
corporate
payroll
related
expenses
and
other
general
corporate
overhead
costs.
The
following
table
presents
an
analysis
of
our
SGA
expenses (in thousands):
Thirteen Weeks
Ended
August 31, 2024
September 2, 2023
$ Change
% Change
Delivery expense
$
21,064
$
17,691
$
3,373
19.1
%
Marketing expense
14,352
12,463
1,889
15.2
%
Other general and administrative expenses
26,516
22,092
4,424
20.0
%
Total
$
61,932
$
52,246
$
9,686
18.5
%
First Quarter – Fiscal 2025
vs. Fiscal 2024
Delivery expense
-
The
increased
delivery
expense
is
primarily
due
to
an
increase
in
dozens
sold
in
the
first
quarter
of
fiscal
2025
compared to the first quarter of fiscal 2024.
Marketing expense
-
The
increase
in
marketing
expense
is
primarily
due
to
an
increase
in
franchise
fees
as
specialty
egg
sales
increased
compared to the first quarter of fiscal 2024.
Other general and administrative expense
-
The increase
in other
general and
administrative
expense
is primarily
due
to costs
associated
with the
acquisition
of
ISE assets that occurred during the first quarter of fiscal 2025 as well as an increase
in insurance costs.
OPERATING
INCOME (LOSS)
For
the
first
quarter
of
fiscal
2025,
we
recorded
operating
income
of
$187.0
million
compared
to
an
operating
loss
of
$6.8
million for the same period of fiscal 2024.
OTHER INCOME (EXPENSE)
Total
other
income
(expense)
consists
of
items
not
directly
charged
or
related
to
operations,
such
as
interest
income
and
expense, equity in income or loss of unconsolidated
entities, and patronage income, among other items. Patronage
dividends are
paid to us from our membership in the EB cooperative.
24
For the
first quarter
of fiscal
2025,
we earned
$9.9 million
of interest
income compared
to $7.5
million for
the same
period of
fiscal 2024,
primarily due to higher average
cash and cash equivalents and
investment securities available-for-sale balances
and
yields.
The
Company
recorded
interest
expense
of
$160
thousand
and
$142
thousand
for the
first
quarters
ended
August
31,
2024 and September 2, 2023, respectively.
INCOME TAXES
For the
first quarter
of fiscal
2025, our
pre-tax income
was $198.0
million, compared
to $733
thousand for
the first
quarter of
fiscal 2024.
Income tax
expense of
$48.4 million
was recorded
for first
quarter 2025
with an
effective
tax rate
of 24.4%.
For
first quarter 2024,
income tax expense
was $322 thousand
with an effective
tax rate of
43.9%. The higher
effective tax
rate for
first quarter
of fiscal
2024 is
primarily
due to
the loss
attributable
to our
noncontrolling interest.
Taxable
income for
the
first
quarter
of fiscal
2024
was $1.2
million
and
excludes
the
loss attributable
to
noncontrolling
interest
of
$515
thousand,
which
represents an effective tax rate of 25.7%.
Items causing
our effective
tax rate
to differ
from the
federal statutory
income tax
rate of
21% are
state income
taxes, certain
federal tax
credits and
certain items included
in income or
loss for financial
reporting purposes that
are not included
in taxable
income or
loss for income
tax purposes, including
tax exempt interest
income, certain
nondeductible expenses,
and net income
or loss attributable to noncontrolling interest.
NET INCOME ATTRIBUTABLE
TO CAL-MAINE FOODS, INC.
Net income
attributable to
Cal-Maine Foods,
Inc. for
the first quarter
ended August
31, 2024
was $150.0
million, or
$3.08 per
basic and $3.06
per diluted common
share, compared to
net income attributable
to Cal-Maine Foods,
Inc. of $926
thousand, or
$0.02 per basic and diluted common share, for the same period of fiscal
2024.
LIQUIDITY AND CAPITAL
RESOURCES
Working
Capital and Current Ratio
Our working capital was $1.0 billion
at both August 31, 2024 and June 1, 2024.
The calculation of working capital is defined
as
current
assets
less
current
liabilities.
Our
current
ratio
was
4.1
at
August
31,
2024,
compared
with
5.5
at
June
1,
2024.
The
current ratio is calculated by dividing current assets by current liabilities.
Cash Flows from Operating Activities
For
the thirteen
weeks
ended August
31, 2024,
$117.5
million
in net
cash
was
provided by
operating
activities,
compared
to
$23.7
million
provided
by
operating
activities
for
the
comparable
period
in
fiscal
2024.
The
increase
in
cash
flow
from
operating activities
resulted primarily
from higher
net average
selling prices
per dozen
as well
as a
decrease in
feed ingredient
costs compared to the prior-year period.
Cash Flows from Investing Activities
For the thirteen
weeks ended August
31, 2024,
$135.9 million
was used in
investing activities, primarily
due to the
acquisition
of
assets
of
ISE,
and
purchases
of
property,
plant
and
equipment.
This
compares
to
$80.9
million
provided
by
investing
activities in
the same
period of
fiscal 2024,
primarily due
to sales and
maturities of
investment securities.
Sales and
maturities
of investment
securities were
$209.7 million
in first
quarter of
fiscal 2025
and purchases
of investment
securities were
$202.2
million during the period. Sales and maturities of investment
securities were $135.8 million in the first quarter fiscal
2024
while
purchases
of
investment
securities
were
$28.3
million
during
the
period.
The
increase
in
sales
and
maturities
of
investment
securities is primarily due
to the maturities of short-term
investments during first quarter 2025.
Purchases of property,
plant and
equipment were
$35.8 million
and $26.7
million in the
first quarters
of fiscal
2025 and
2024, respectively,
primarily reflecting
progress on our construction projects.
Cash Flows from Financing Activities
We
paid dividends of $37.8
million for the thirteen
weeks ended August 31,
2024 compared to $37.0
million in the same
prior-
year period.
25
As of
August 31,
2024,
cash decreased
$56.2 million
since June
1, 2024,
compared to
an increase
of $67.5
million during
the
same period
of fiscal
2024.
The decrease
is primarily
due
to the
acquisition
of assets
of
ISE during
the first
quarter of
fiscal
2025.
Credit Facility
We
had
no long-term
debt outstanding
at August
31, 2024
or June
1, 2024.
On November
15, 2021,
we entered
into a
credit
agreement
that
provides
for
a
senior
secured
revolving
credit facility
(the
“Credit
Facility”),
in
an
initial
aggregate
principal
amount
of
up
to
$250
million
with
a
five-year
term.
As
of
August
31,
2024,
no
amounts
were
borrowed
under
the
Credit
Facility. We
have $4.7 million
in outstanding standby
letters of credit issued
under our Credit
Facility for the
benefit of certain
insurance companies.
Refer to
Part II
Item 8,
Notes to
Consolidated
Financial Statements
and Supplementary
Data, Note
10 -
Credit Facility included in our 2024
Annual Report for further information regarding our long-term debt.
Dividends
In
accordance
with
our
variable
dividend
policy,
we
will
pay
a
cash
dividend
totaling
approximately
$50.0
million,
or
approximately
$1.019 per
share, to
holders of
our Common
Stock and
Class A
Common Stock
with respect
to our
first fiscal
quarter
of
2025.
The
amount
paid
per
share
will
vary
based
on
the
number
of
outstanding
shares
on
the
record
date.
The
dividend is payable on November 14, 2024 to holders of record on October 30,
2024.
Material Cash Requirements
Material cash
requirements for
operating activities
primarily consist
of feed
ingredients, processing,
packaging and
warehouse
costs, employee related
costs, and other
general operating expenses,
which we expect
to be paid
from our cash
from operations
and cash and
investment securities on
hand for at
least the next
12 months. While
volatile egg prices
and feed ingredient
costs,
among
other
things,
make
long-term
predictions
difficult,
we
have
substantial
liquid
assets
and
availability
under
our
Credit
Facility to fund future operating requirements.
Our material
cash requirements
for capital
expenditures consist
primarily of
our construction
projects to increase
our cage-free
production
capacity.
We
continue
to
monitor
the
increasing
demand
for
cage-free
eggs and
to
engage
with
our
customers
in
efforts
to
achieve
a smooth
transition
toward
their
announced
timelines
for
cage-free
egg
sales. The
following
table presents
material construction projects approved as of August 31, 2024 (in
thousands):
Project(s) Type
Projected
Completion
Projected Cost
Spent as of August
31, 2024
Remaining
Projected Cost
Cage-Free Layer & Pullet Houses
Fiscal 2025
$
81,429
$
73,945
$
7,484
Dexter, MO Processing and Hatchery
Renovations
Fiscal 2025
6,204
4,704
1,500
Feed Mills
Fiscal 2026
16,593
4,565
12,028
Cage-Free Layer & Pullet Houses
Fiscal 2026
135,905
115,420
20,485
$
240,131
$
198,634
$
41,497
We believe our
current cash balances, investments, projected cash flows from operations, and available
borrowings under our
Credit Facility will be sufficient to fund our capital expenditure
cash needs for at least the next 12 months and to fund our
capital commitments currently in place thereafter.
IMPACT OF
RECENTLY
ISSUED/ADOPTED ACCOUNTING STANDARDS
For
information
on
changes
in
accounting
principles
and
new
accounting
policies,
see
CRITICAL ACCOUNTING ESTIMATES
Critical accounting
estimates
are those
estimates
made
in accordance
with U.S.
generally
accepted
accounting
principles that
involve
a
significant
level
of
estimation
uncertainty
and
have
had
or
are
reasonably
likely
to
have
a
material
impact
on
our
financial
condition
or results
of operations.
There
have been
no changes
to our
critical accounting
estimates identified
in our
2024 Annual Report.
26
ITEM 3. QUANTITATIVE
AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
There have been no material changes in our exposure to market risk during the
thirteen weeks ended August 31, 2024 from the
information provided in Part II Item 7A, Quantitative and Qualitative Disclosures About
Market Risk in our 2024 Annual
Report.
ITEM 4.
CONTROLS
AND
PROCEDURES
Disclosure Controls and Procedures
Our disclosure
controls and
procedures are
designed to
provide reasonable
assurance that
information required
to be
disclosed
by us in the reports
we file or submit
under the Exchange Act
is recorded, processed, summarized
and reported, within the
time
periods
specified
in
the
Securities and
Exchange
Commission’s
rules
and
forms. Disclosure
controls
and
procedures
include,
without limitation, controls and
procedures designed to ensure that
information required to be disclosed
by us in the reports that
we file or submit
under the Exchange
Act is accumulated and
communicated to management,
including our principal
executive
and
principal
financial
officers,
or
persons
performing
similar
functions,
as
appropriate
to
allow
timely
decisions
regarding
required disclosure. Based on an evaluation of our disclosure controls
and procedures conducted by our Chief Executive Officer
and
Chief
Financial
Officer,
together
with
other
financial
officers,
such
officers
concluded
that
our
disclosure
controls
and
procedures were effective as of August 31, 2024 at the reasonable
assurance level.
Changes in Internal Control Over Financial Reporting
There
was no
change
in our
internal control
over financial
reporting
that occurred
during the
quarter
ended
August
31, 2024
that has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.
27
PART
II. OTHER INFORMATION
ITEM 1.
LEGAL PROCEEDINGS
Refer
to
the
discussion
of
certain
legal
proceedings
involving
the
Company
and/or
its
subsidiaries
in
(i)
our
2024
Annual
Report,
Part
I
Item
3
Legal
Proceedings,
and
Part
II
Item 8,
Notes
to
Consolidated
Financial
Statements
and
Supplementary
Data,
Note
16
-
Commitments
and
Contingencies,
and
(ii)
in
this
Quarterly
Report
in
reference.
ITEM 1A.
RISK
FACTORS
There have been no material changes in the risk factors previously disclosed in the
Company’s 2024 Annual
Report.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
The following table is a summary of our first quarter 2025 share repurchases:
Issuer Purchases of Equity Securities
Total
Number of
Maximum Number
Shares Purchased
of Shares that
Total
Number
Average
as Part of Publicly
May Yet
Be
of Shares
Price Paid
Announced Plans
Purchased Under the
Period
Purchased (1)
per Share
Or Programs
Plans or Programs
06/02/24 to 06/29/24
—
$
—
—
—
06/30/24 to 07/27/24
502
66.86
—
—
07/28/24 to 08/31/24
—
—
—
—
502
$
66.86
—
—
(1)
As permitted under our Amended and Restated 2012
Omnibus Long-Term Incentive Plan, these shares were withheld by us to satisfy
tax withholding
ITEM 6. EXHIBITS
Exhibits
No.
Description
3.1
3.2
31.1*
31.2*
32**
101.SCH*+
Inline XBRL Taxonomy
Extension Schema Document
101.CAL*+
Inline XBRL Taxonomy
Extension Calculation Linkbase Document
101.DEF*+
Inline XBRL Taxonomy
Extension Definition Linkbase Document
101.LAB*+
Inline XBRL Taxonomy
Extension Label Linkbase Document
101.PRE*+
Inline XBRL Taxonomy
Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained
in Exhibit 101)
*
Filed herewith as an Exhibit.
**
Furnished herewith as an Exhibit.
+
Submitted electronically with this Quarterly Report.
28
SIGNATURES
Pursuant to
the requirements
of the Securities
Exchange Act
of 1934,
the registrant has
duly caused
this report
to be signed
on
its behalf by the undersigned, thereunto duly authorized.
CAL-MAINE FOODS, INC.
(Registrant)
Date:
October 1, 2024
/s/ Max P.
Bowman
Max P.
Bowman
Vice President, Chief Financial
Officer
(Principal Financial Officer)
Date:
October 1, 2024
/s/ Matthew S. Glover
Matthew S. Glover
Vice President – Accounting
(Principal Accounting Officer)
TABLE OF CONTENTS
Part I. FinancialItem 1. Financial StatementsNote 1 - Summary Of Significant Accounting PoliciesNote 2 - AcquisitionNote 3 - InvestmentNote 4 - Fair Value MeasurementsNote 5 - Inventories Inventories Consisted Of The Following As Of August 31, 2024 and June 1, 2024 (in Thousands):Note 5 - InventoriesNote 6 - EquityNote 7 - Net Income Per Common ShareNote 8 - Revenue From Contracts with CustomersNote 9 - Stock Based CompensationNote 10 - Commitments and ContingenciesNote 11 - Subsequent EventsItem 2. Management SItem 1A Risk Factors Of The 2024 Annual Report, The Risk Factors (if Any) Set Forth in Part II Item 1A Risk Factors andItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. ControlsPart II. Other InformationItem 1. Legal ProceedingsItem 1A. RiskItem 2. Unregistered Sales Of Equity Securities and Use Of ProceedsItem 6. Exhibits