Cal-Maine Foods, Inc. (NASDAQ: CALM) today reported results for
the fourth quarter and fifty-two weeks ended June 2, 2018.
Net sales for the fourth quarter of fiscal 2018 were $443.1
million, a 61.4 percent increase, compared with $274.6 million for
the fourth quarter of fiscal 2017. The Company reported net income
of $71.8 million, or $1.48 per basic and diluted share, for the
fourth quarter of fiscal 2018, compared with a net loss of $24.5
million, or $0.51 per basic and diluted share, for the fourth
quarter of fiscal 2017. The fourth quarter of fiscal 2018 was a
13-week period compared with 14 weeks for the same period in fiscal
2017.
For the fiscal year ended June 2, 2018, net sales were
$1,502.9 million compared with $1,074.5 million for the prior-year
period. The Company reported net income of $125.9 million, or $2.60
per basic and diluted share, for fiscal 2018, compared with net
loss of $74.3 million, or $1.54 per basic and diluted share, for
the year-earlier period. Fiscal 2018 included 52 weeks compared
with 53 weeks for fiscal 2017. Results for fiscal 2018 were
favorably affected by a $43.0 million, or $0.89 per basic and
diluted share, tax benefit related to the Tax Cuts and Jobs Act
(TCJA) tax reform legislation and the subsequent revaluation of the
Company’s deferred tax liabilities at the new, lower corporate tax
rate. The Company recorded provisional adjustments related to the
TCJA in the third quarter and recorded adjustments related to the
completed analysis in the Company’s fourth quarter. These results
also include an after-tax charge of $54.8 million, or $1.13 per
basic and diluted share, recorded in the second quarter of fiscal
2018, related to the settlement of certain previously disclosed
antitrust litigation.
Dolph Baker, chairman, president and chief executive officer of
Cal-Maine Foods, Inc., stated, “We are pleased with our financial
and operating performance for the fourth quarter, marking a strong
finish to fiscal 2018. Notably, these results represent the best
fourth quarter performance in the Company’s history. The impressive
sales gains reflect strong consumer demand and significantly higher
average selling prices compared with the same period a year ago.
The Easter holiday and retail grocery promotions featuring shell
eggs were key drivers of sales for the fourth quarter along with
good foodservice demand. These favorable market conditions
supported our business with a significant improvement in
profitability compared with a year ago. Importantly, our financial
performance allows us to resume our quarterly cash dividend payment
to our shareholders.
“Market prices were exceptionally strong during the first part
of the quarter, but fell significantly following the Easter
holiday. Overall, average customer selling prices were up 74.1
percent compared with the fourth quarter last year. According to
reports from IRI, a consumer market research firm, retail demand
has been favorable throughout this period, especially around the
Easter holiday season. Export demand remained at near historical
levels during the fourth quarter. Together, these demand trends
have supported market prices at recent production levels. However,
according to recent USDA reports, the chick hatch rate has been up
for the last eight months, and has increased by approximately 10
percent since the beginning of calendar 2018. Given these trends,
the projected increase in the U.S. laying hen flock and potential
excess shell egg supply could create additional pricing
pressure.”
Baker continued, “Specialty eggs, excluding co-pack sales,
accounted for 25.5 percent of our sales volumes for the fourth
quarter, compared with 22.7 percent a year ago. Specialty egg
revenue was 29.0 percent of total shell egg revenue, compared with
42.0 percent for the fourth quarter of fiscal 2017, reflecting
significantly higher market prices for non-specialty eggs in the
current period. Specialty eggs remain a primary focus of our growth
strategy, and we strive to offer a favorable product mix that
reflects consumer demand trends. As the egg industry moves forward
in anticipation of the expected increase in demand for cage-free
eggs, we are working closely with our customers to ensure their
needs are met through this transition. As such, we intend to make
the required investments in our operations and adjust our cage-free
production capacity in line with expected demand.
“We are also closely monitoring industry developments
surrounding a proposed referendum that will be on the ballot for
voters in California later this calendar year. This referendum
mandates, over a period of time, that all egg production in
California must be cage-free with specific space requirements for
laying hens. In addition, if passed, the referendum will require
that all eggs and egg products sold in the state of California must
be cage-free by a certain future date. This referendum, if adopted,
could affect sourcing and production of eggs in California, which
would create uncertainty surrounding supply and pricing in other
areas of the country.
“Our operations have performed well throughout fiscal 2018, as
our managers across all Cal-Maine Foods locations have maintained a
consistent focus on efficient and responsible management. For the
fourth quarter, operating income was $91.3 million compared with an
operating loss of $38.3 million a year ago. Our feed costs for the
fourth quarter were up 9.2 percent over last year, due to the
higher cost of feed ingredients, primarily soybean meal, and a
slightly lower feed conversion rate. Our overall farm production
costs per dozen for the fourth quarter were also slightly higher
than a year ago. Feed costs have been volatile since the end of our
fiscal year, but have come down recently. Looking ahead, the
current corn and soybean crops are ahead of schedule, and favorable
growing conditions should support lower prices for feed
ingredients. However, the current geopolitical risks associated
with the recently imposed and additional proposed tariffs are
creating more price volatility and uncertainty.
“We are proud of our accomplishments for fiscal 2018, as we
continued to execute our growth strategy with favorable results.
Looking ahead, we will remain focused on this same strategy: manage
our operations efficiently and responsibly, provide a favorable
product mix, including cage-free and other specialty eggs, and look
for acquisition or other growth opportunities that enhance our
operations. Above all, we are focused on meeting the needs of our
customers and providing excellent service. We have a strong balance
sheet, including a new five-year, $100 million revolving credit
facility, that provides additional financial flexibility to support
our growth strategy, and we look forward to the opportunities ahead
for Cal-Maine Foods in fiscal 2019,” said Baker.
Pursuant to Cal-Maine Foods’ variable dividend policy, for each
quarter for which the Company reports net income, the Company pays
a cash dividend to shareholders in an amount equal to one-third of
such quarterly income. Following a quarter for which the Company
does not report net income, the Company will not pay a dividend
with respect to that quarter or for a subsequent profitable quarter
until the Company is profitable on a cumulative basis computed from
the date of the last quarter for which a dividend was paid. At the
end of the Company's third quarter of fiscal 2018, cumulative
losses to be recovered prior to paying a dividend were $20.5
million. The Company's net income for the fourth quarter of 2018
was $71.8 million. Therefore, for the fourth quarter of fiscal
2018, the Company will pay a dividend of $17.1 million, or $0.351
per share, to holders of its common and Class A common stock. The
dividend is payable on August 21, 2018 to holders of record on
August 6, 2018.
Selected operating statistics for the fourth quarter and fiscal
2018 compared with the prior-year periods are shown below:
13 Weeks Ended
14 Weeks Ended 52 Weeks Ended
53 Weeks Ended June 2, 2018
June 3, 2017 June 2, 2018
June 3, 2017 Dozen Eggs Sold (000) 251,955
273,015 1,037,713 1,031,130
Dozen Eggs Produced (000) 215,729 237,006 873,307 870,252 %
Specialty Sales (dozen)* 25.5 % 22.7 % 23.5 % 22.9 % % Specialty
Sales (dollars)* 29.0 % 42.0 % 32.0 % 43.6 % Net Average Selling
Price (dozen) $ 1.694 $ 0.973 $ 1.397 $ 1.007 Net Average Selling
Price Specialty Eggs (dozen) $ 1.941 $ 1.823 $ 1.916 $ 1.939 Feed
Cost (dozen) $ 0.416 $ 0.381 $ 0.394 $ 0.399
*Excludes co-pack specialty eggs
Cal-Maine Foods, Inc. is primarily engaged in the production,
grading, packing and sale of fresh shell eggs, including
conventional, cage-free, organic and nutritionally-enhanced eggs.
The Company, which is headquartered in Jackson,
Mississippi, is the largest producer and distributor of fresh shell
eggs in the United States and sells the majority of
its shell eggs in states across the southwestern, southeastern,
mid-western and mid-Atlantic regions of the United States.
Statements contained in this press release that are not
historical facts are forward-looking statements as that term
is defined in the Private Securities Litigation Reform Act of 1995.
The forward-looking statements are based on management’s current
intent, belief, expectations, estimates and projections regarding
our company and our industry. These statements are not guarantees
of future performance and involve risks, uncertainties, assumptions
and other factors that are difficult to predict and may be
beyond our control. The factors that could cause actual results to
differ materially from those projected in the forward-looking
statements include, among others, (i) the risk factors set forth in
the Company’s SEC filings (including its Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K), (ii) the risks and hazards
inherent in the shell egg business (including disease, pests,
weather conditions and potential for recall),
(iii) changes in the demand for and market prices of shell
eggs and feed costs, (iv) our ability to predict and meet demand
for cage-free and other specialty eggs, (v) risks, changes or
obligations that could result from our future acquisition of
new flocks or businesses and risks or changes that may cause
conditions to completing a pending acquisition not to be met, and
(vi) adverse results in pending litigation matters. SEC
filings may be obtained from the SEC or the Company’s
website, www.calmainefoods.com. Readers are cautioned not to
place undue reliance on forward-looking statements because,
while we believe the assumptions on which the
forward-looking statements are based are reasonable, there can
be no assurance that these forward-looking statements will prove to
be accurate. Further, the forward-looking
statements included herein are only made as of the respective
dates thereof, or if no date is stated, as of the date
hereof. Except as otherwise required by law, we disclaim any
intent or obligation to publicly update these forward-looking
statements, whether as a result of new information, future
events or otherwise.
CAL-MAINE FOODS, INC. AND
SUBSIDIARIESFINANCIAL HIGHLIGHTS(Unaudited)(In
thousands, except per share amounts)
SUMMARY STATEMENTS OF OPERATIONS
13 Weeks
Ended
14 Weeks
Ended
52 Weeks
Ended
53 Weeks
Ended
June 2,
2018
June 3,
2017
June 2,
2018
June 3,
2017
Net sales $ 443,095 $ 274,584 $ 1,502,932 $ 1,074,513 Gross profit
141,216 12,006 361,046 45,550 Operating income (loss) 91,315
(38,291 ) 102,675 (132,094 ) Other income 2,575 5,141 14,662 17,800
Income (loss) before income taxes and noncontrolling interest
93,890 (33,151 ) 117,337 (114,294 ) Income (loss) before income
taxes attributable to Cal-Maine Foods, Inc. 93,561 (33,011 )
117,073 (114,145 ) Net income (loss) $ 71,767 $ (24,471 ) $
125,932 $ (74,278 ) Net income (loss) per share: Basic $
1.48 $ (0.51 ) $ 2.60 $ (1.54 ) Diluted $ 1.48 $ (0.51 ) $ 2.60 $
(1.54 ) Weighted average shares outstanding Basic 48,289 48,329
48,353 48,362 Diluted 48,495 48,329 48,468
48,362
CAL-MAINE FOODS, INC. AND
SUBSIDIARIESFINANCIAL HIGHLIGHTS(Unaudited)(In
thousands)
SUMMARY BALANCE SHEETS
June 2, 2018 June 3, 2017
ASSETS Cash and short-term investments $ 331,017 $ 156,026
Receivables 85,839 64,509 Income tax receivable — 52,691
Inventories 168,644 160,692 Prepaid expenses and other current
assets 2,020 2,288 Current assets 587,520 436,206
Property, plant and equipment (net) 425,384 458,184 Other
noncurrent assets 137,543 138,704 Total assets $
1,150,447 $ 1,033,094 LIABILITIES AND
STOCKHOLDERS' EQUITY Accounts payable and accrued expenses $ 86,856
$ 59,853 Income taxes payable 17,446 — Current maturities of
long-term debt 3,536 4,826 Current liabilities
107,838 64,679 Long-term debt, less current maturities 2,554
6,113 Deferred income taxes and other liabilities 84,373 117,809
Stockholders' equity 955,682 844,493 Total
liabilities and stockholders' equity $ 1,150,447 $ 1,033,094
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version on businesswire.com: https://www.businesswire.com/news/home/20180723005123/en/
Cal-Maine Foods, Inc.Timothy A. Dawson, 601-948-6813Vice
President and CFOorDolph Baker, 601-948-6813Chairman and CEO
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