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 first
quarter of fiscal 2024 (thirteen weeks) ended September 2,
2023.
First Quarter Fiscal Year 2024 Highlights
- Quarterly net sales of $459.3 million
- Quarterly net income of $926,000 or $0.02 per basic and diluted
common share
- Net average selling price for specialty eggs increased 8.4
percent quarter-over-quarter
- Cash dividend of $294,000, or $0.006 per share, pursuant to the
Company’s established dividend policy
Overview
Sherman Miller, president and chief executive officer of
Cal-Maine Foods, Inc., stated, “Our results for the first quarter
of fiscal 2024 reflect the current dynamic market conditions. After
reaching record high levels in fiscal 2023, average selling prices
for shell eggs have since returned to more normalized levels as the
overall egg supply recovers from the most recent highly pathogenic
avian influenza (“HPAI”) outbreak, which depleted the national hen
supply. Customer demand has been favorable with conventional egg
volumes higher than a year ago, offset by lower sales of specialty
eggs. We continue to focus on offering customers a wide range of
quality choices in shell eggs, as well as egg products offerings,
with a favorable product mix in line with changing consumer demand
trends.
“Our operations ran well during the quarter, and we benefitted
from lower feed costs, although we generally continued to incur
higher input costs. Our team has continued to focus on managing our
operations in an efficient and sustainable manner. While there have
been no recent outbreaks of HPAI in commercial egg laying flocks,
we remain diligent in following strict protocols and continue to
invest in additional resources to reduce future risk. We commend
the work of our managers and employees who responsibly managed our
production and continued to bring more quality eggs to the market
to support our valued customers. We also have a number of expansion
projects underway to increase our production capacity, and we look
forward to the opportunities to expand our market reach.
“In addition to our organic growth initiatives, we have
continued to expand our business through selective acquisitions.
Following the end of the first quarter, we announced a definitive
agreement to acquire substantially all the assets of Fassio Egg
Farms, Inc., related to its commercial shell egg production, and
processing business, located in Erda, Utah, outside of Salt Lake
City. The assets to be acquired include facilities with a current
capacity of approximately 1.2 million laying hens, primarily
cage-free, a feed mill, pullets, a fertilizer production and
composting operation and land. We expect to close this transaction
during the second fiscal quarter. We are excited about the
opportunity to expand our market presence in Utah and the western
United States,” added Miller.
Sales Performance & Operating Highlights
Max Bowman, vice president and chief financial officer of
Cal-Maine Foods, Inc., added, “For the first quarter of fiscal
2024, our net sales were $459.3 million compared with $658.3
million for the same period last year, which was an exceptionally
strong first quarter performance driven by record average
conventional selling prices and record specialty sales volumes. The
decline in revenue for the first quarter of fiscal 2024 was
primarily due to the decrease in the net average selling price for
conventional eggs, partially offset by the increase in the net
average selling price for specialty eggs. Net income for the first
quarter of fiscal 2024 was $926,000, or $0.02 per diluted share,
compared with $125.3 million, or $2.57 per diluted share, for the
first quarter of fiscal 2023.
“Conventional egg net average selling price per dozen was $1.241
for the first quarter of fiscal 2024 compared with $2.368 for the
prior-year quarter. Conventional egg selling prices declined
significantly in the first quarter of fiscal 2024 compared to the
first quarter of fiscal 2023 as the U.S. egg supply recovers from
the most recent HPAI outbreak. Net average selling price for
specialty eggs rose to $2.278 per dozen, compared with $2.101 per
dozen for the first quarter of fiscal 2023. Specialty dozens sold
were 33.5% of total dozens sold in the first quarter of fiscal 2024
compared with 34.7% in the prior-year period.
“We reported an operating loss of $6.8 million for the first
quarter of fiscal 2024, compared with operating income of $163.9
million for the prior-year quarter, reflecting lower conventional
shell egg prices and increased labor costs, partially offset by
lower farm production costs due to the decrease in feed ingredient
prices. We remained focused on disciplined cost management as we
generally continued to incur higher input costs at our production,
processing and distribution centers, as well as costs incurred for
additional bio-security measures to mitigate the risk of HPAI.
Overall, first quarter farm production costs per dozen decreased
1.0% compared with the prior-year quarter. For the first quarter of
fiscal 2024, feed costs per dozen were $0.597, a 10.5% decrease
compared with the first quarter of fiscal 2023.
“Current indications for corn project an overall better
stocks-to-use ratio; however, until this year’s harvest is complete
and as long as outside factors remain uncertain [including weather
patterns and the Russia-Ukraine war and its effect on export
markets], volatility could remain. Soybean meal supply has remained
tight relative to demand in the first quarter of fiscal 2024.
13 Weeks Ended
September 2, 2023
August 27, 2022
Dozen Eggs Sold (000)
273,126
275,317
Conventional Dozen Eggs Sold (000)
181,530
179,712
Specialty Dozen Eggs Sold (000)
91,596
95,605
Dozen Eggs Produced (000)
250,356
257,654
% Specialty Sales (dozen)
33.5
%
34.7
%
% Specialty Sales (dollars)
47.7
%
31.8
%
Net Average Selling Price (per dozen)
$
1.589
$
2.275
Net Average Selling Price Conventional
Eggs (per dozen)
$
1.241
$
2.368
Net Average Selling Price Specialty Eggs
(per dozen)
$
2.278
$
2.101
Feed Cost (per dozen)
$
0.597
$
0.667
Product Mix & Cage-Free Eggs
“Specialty eggs remain an important area of focus of Cal-Maine
Food’s growth strategy. A top priority of this strategy is to
expand our cage-free production capacity with the goal of meeting
future customer needs in line with changing state requirements. We
continue to work closely with our customers regarding their
expected timing and purchase decisions related to their previously
announced plans to offer cage-free eggs exclusively by specific
future dates. We have invested significant capital to acquire and
construct cage-free facilities as our volume of cage-free egg sales
has continued to increase and account for a greater share of our
product mix. Cage-free egg revenue comprised approximately 33.0% of
total net shell egg revenue for the first quarter of fiscal 2024,”
added Bowman.
Table Egg Supply Outlook
The most recent outbreak of HPAI affected the Company’s business
and financial results primarily during the fourth quarter of fiscal
2022 and continuing into the first part of the fourth quarter of
fiscal 2023. While the last occurrence in a commercial egg laying
flock was in December 2022, there have been occurrences in other
avian populations in the U.S. since then. HPAI is still present in
the wild bird population and the extent of possible future
outbreaks, particularly during the upcoming fall migration season,
cannot be predicted. There have been no positive tests for HPAI at
any of Cal-Maine Foods’ owned or contracted production facilities
as of October 2, 2023. Based on USDA data, the Company believes
that the U.S. layer hen flock, which declined as a result of flock
depletions due to HPAI, has largely recovered but remains slightly
lower than the five-year average.
Layer hen numbers reported by the USDA as of September 1, 2023,
were 318.2 million, which represents an increase of 3.1% compared
with the layer hen inventory a year ago. The USDA also reported
that the hatch from April 2023 through August 2023 increased 2.0%
as compared with the prior-year period, indicating that layer
flocks may continue to increase in the future.
Looking Ahead
Miller added, “We look forward to the opportunities ahead for
Cal-Maine Foods in fiscal 2024. While we face ongoing challenges
related to the threat of HPAI and inflationary headwinds, we will
continue to manage the aspects of our business we can control. We
are uniquely positioned to support the nation’s food supply with
nutritious and affordable protein, and we believe demand for our
products will continue to grow. We are confident we have the right
strategy in place to meet this demand, with a proven operating
model that will drive long-term growth. Across our operations, we
have a shared commitment to our mission to be the most reliable and
sustainable producer of fresh shell eggs and egg products.
Importantly, we have a dedicated workforce, and sufficient capital
to fund internal expansion projects and consider additional
potential acquisitions to support our strategy. Above all, we will
strive to meet the demands of our valued customers and deliver
greater value to our shareholders.”
Dividend Payment
For the first quarter of fiscal 2024, Cal-Maine Foods will pay a
cash dividend of approximately $0.006 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 November 16,
2023, to holders of record on November 1, 2023.
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 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, which began in response to market conditions caused
in part by the COVID-19 pandemic and which generally have been
exacerbated by the Russia-Ukraine war that began in February 2023,
(vii) our ability to retain existing customers, acquire new
customers and grow our product mix, and (viii) adverse results in
pending litigation matters. SEC filings may be obtained from the
SEC or the Company’s website, www.calmainefoods.com. Readers are
cautioned not to place undue reliance on forward-looking statements
because, while we believe the assumptions on which the
forward-looking statements are based are reasonable, there can be
no assurance that these forward-looking statements will prove to be
accurate. Further, the forward-looking statements included herein
are only made as of the respective dates thereof, or if no date is
stated, as of the date hereof. Except as otherwise required by law,
we disclaim any intent or obligation to publicly update these
forward-looking statements, whether as a result of new information,
future events or otherwise.
CAL-MAINE FOODS, INC. AND
SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands, except per share
amounts)
SUMMARY STATEMENTS OF
INCOME
13 Weeks Ended
September 2, 2023
August 27, 2022
Net sales
$
459,344
$
658,344
Cost of sales
413,911
440,854
Gross profit
45,433
217,490
Selling, general and administrative
52,246
53,607
(Gain) loss on disposal of fixed
assets
(56
)
33
Operating income (loss)
(6,757
)
163,850
Other income, net
7,490
1,630
Income before income taxes
733
165,480
Income tax expense
322
40,346
Net income
411
125,134
Less: Loss attributable to noncontrolling
interest
(515
)
(153
)
Net income attributable to Cal-Maine
Foods, Inc.
$
926
$
125,287
Net income per common share:
Basic
$
0.02
$
2.58
Diluted
$
0.02
$
2.57
Weighted average shares outstanding:
Basic
48,690
48,623
Diluted
48,840
48,811
CAL-MAINE FOODS, INC. AND
SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands)
SUMMARY BALANCE SHEETS
September 2, 2023
June 3, 2023
ASSETS
Cash and short-term investments
$
609,962
$
647,914
Receivables, net
159,150
187,213
Inventories, net
280,801
284,418
Prepaid expenses and other current
assets
14,145
5,380
Current assets
1,064,058
1,124,925
Property, plant and equipment, net
752,580
744,540
Other noncurrent assets
83,729
85,060
Total assets
$
1,900,367
$
1,954,525
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses
$
126,088
$
145,601
Dividends payable
294
37,130
Current liabilities
126,382
182,731
Deferred income taxes and other
liabilities
162,655
162,211
Stockholders' equity
1,611,330
1,609,583
Total liabilities and stockholders'
equity
$
1,900,367
$
1,954,525
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231003159352/en/
Sherman Miller, President and CEO Max P. Bowman, Vice President
and CFO (601) 948-6813
Cal Maine Foods (NASDAQ:CALM)
Historical Stock Chart
Von Apr 2024 bis Mai 2024
Cal Maine Foods (NASDAQ:CALM)
Historical Stock Chart
Von Mai 2023 bis Mai 2024