Cal-Maine Foods, Inc. (NASDAQ: CALM) today reported results for
the first quarter of fiscal 2022 (thirteen weeks) ended August 28,
2021.
Net sales in the first quarter of fiscal 2022 increased to
$331.7 million compared to $292.8 million in the first quarter of
fiscal 2021. The Company reported a net loss of $18.0 million, or
$0.37 per basic and diluted common share, for the first quarter of
fiscal 2022, compared to a net loss of $19.4 million, or $0.40 per
basic and diluted common share, for the first quarter of fiscal
2021.
Dolph Baker, chairman and chief executive officer of Cal-Maine
Foods, Inc., stated, “Our results for the first quarter of fiscal
2022 reflect challenging market conditions. While we reported a
13.3 percent increase in sales compared to the prior-year period,
our results were affected by lower conventional egg sale volumes
that partially offset a higher average conventional egg selling
price. Our shell egg average selling price increased to $1.24 per
dozen in the first quarter from $1.08 per dozen in the prior-year
period. Our first quarter gross margins reflect higher production
costs primarily related to a significant increase in feed costs
compared to the prior-year period.
“Retail demand for shell eggs has declined from the high levels
we saw during the most restrictive shutdown phases of the pandemic.
In the first quarter 2022, total dozens sold decreased 1.7 percent
versus the prior-year period to 259.4 million. As restaurants
started to return to normalized schedules and consumers began to
resume out-of-home dining, food service demand showed improvement,
resulting in a more balanced demand for shell eggs.
“Hen numbers reported by the USDA as of September 1, 2021, were
319.5 million, which is approximately the same as the prior year.
The USDA also reported that the hatch from April 2021 through
August 2021 increased 2.1 percent compared to the prior-year
period. As of September 1, 2021, eggs in incubators were down 4.9
percent from last year.
"For the first quarter of fiscal 2022, specialty egg sales
totaled $138.7 million, accounting for 43.0 percent of total shell
egg revenue, compared with $129.2 million, or 45.2 percent, for the
prior-year quarter. Specialty egg dozens sold were 28.9 percent of
total dozens sold in the first quarter fiscal 2022, compared with
26.0 percent in the first quarter of fiscal 2021. Higher specialty
egg revenue reflects an 8.9 percent increase in specialty dozens
sold in the first quarter of fiscal 2022 compared to the prior-year
period.
"An important competitive advantage for Cal-Maine Foods is our
ability to meet our customers’ evolving needs with a favorable
product mix of conventional, cage-free, organic and other specialty
eggs and egg products. We have enhanced our efforts to provide
free-range and pasture-raised eggs that meet consumers’ evolving
choice preferences. While a small part of our current business, the
free-range and pasture-raised eggs we produce and sell represent
attractive offerings to a subset of consumers, and therefore our
customers, and help us continue to serve as the trusted provider of
quality food choices.
“Additionally, as customer demand has evolved in line with state
requirements for cage-free eggs, we continue to expand our
production capacity in anticipation of future customer purchase
decisions. As previously announced, at the beginning of the first
quarter, we completed the purchase of the remaining 50 percent
membership interest in Red River Valley Egg Farm, LLC, adding an
additional 1.7 million cage-free laying hens and pullet capacity.
Since 2008, we have invested more than $482 million in facilities,
equipment, and related operations to expand our cage-free
production and distribution capabilities. Importantly, we have
maintained a strong financial position with the flexibility to
continue to make the necessary investments in our operations in
line with expected demand.
“For the first quarter of fiscal 2022, we reported an operating
loss of $39.7 million compared with an operating loss of $27.2
million for the same period in the prior fiscal year. Farm
production costs per dozen produced for the first quarter of fiscal
2022 were up 25.4 percent compared to the first quarter of fiscal
2021, an increase primarily tied to higher feed costs, which were
up 40.5 percent compared with the prior-year period. For the first
quarter of fiscal 2022, the average Chicago Board of Trade (“CBOT”)
daily market price was $5.96 per bushel for corn and $364 per ton
for soybean meal, representing an increase of 81.8 percent and 26.1
percent, respectively, compared to the average daily CBOT prices
for the first quarter of fiscal 2021. Corn and soybean supplies
remained tight relative to demand, primarily related to higher
export demand, as well as weather-related shortfalls in production
and yields. We expect market prices to remain elevated and volatile
relative to historical prices at least for the short term given the
ongoing disruptions related to the COVID-19 global pandemic,
weather fluctuations and geopolitical issues.
“While we continue to face a challenging environment, our
operations are running well, and we look forward to the
opportunities ahead for Cal-Maine Foods in fiscal 2022. We are
confident in our growth strategy to provide a favorable product
mix, expand our specialty egg production, increase our capacity for
cage-free production and manage our operations in an efficient and
sustainable manner. We believe we are well-positioned with
sufficient capital to fund internal expansion projects and consider
potential acquisitions to support our growth. Above all, we will
strive to meet the demands of our valued customers and deliver
greater value to our shareholders,” added Baker.
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 last quarter for which a dividend was paid.
Therefore, the Company will not pay a dividend with respect to the
first quarter of fiscal 2022. As of August 28, 2021, the total
cumulative loss to be recovered before payment of a dividend was
$22.3 million.
Select operating statistics for the first quarter of fiscal 2022
compared with the prior year period are shown below:
13 Weeks Ended
August 28, 2021
August 29, 2020
Dozen Eggs Sold (000)
259,385
263,994
Dozen Eggs Produced (000)
236,458
231,161
% Specialty Sales (dozen)
28.9
%
26.0
%
% Specialty Sales (dollars)
43.0
%
45.2
%
Net Average Selling Price (per dozen)
$
1.238
$
1.078
Net Average Selling Price Specialty Eggs
(per dozen)
$
1.851
$
1.880
Feed Cost (per dozen)
$
0.545
$
0.388
Cal-Maine Foods, Inc. is primarily engaged in the production,
grading, packing, marketing and distribution of fresh shell eggs,
including conventional, cage-free, organic, 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.
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, (vi) risks
relating to the evolving COVID-19 pandemic, and (vii) 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
OPERATIONS
13 Weeks Ended
August 28, 2021
August 29, 2020
Net sales
$
331,704
$
292,782
Cost of sales
325,059
276,017
Gross profit
6,645
16,765
Selling, general and administrative
46,525
43,965
(Gain) Loss on disposal of fixed
assets
(213
)
23
Operating loss
(39,667
)
(27,223
)
Other income, net
5,803
1,698
Loss before income taxes
(33,864
)
(25,525
)
Income tax benefit
(15,838
)
(6,126
)
Net loss
$
(18,026
)
$
(19,399
)
Net loss per common share:
Basic
$
(0.37
)
$
(0.40
)
Diluted
$
(0.37
)
$
(0.40
)
Weighted average shares outstanding:
Basic
48,858
48,501
Diluted
48,858
48,501
CAL-MAINE FOODS, INC. AND
SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands)
SUMMARY BALANCE SHEETS
August 28, 2021
May 29, 2021
ASSETS
Cash and short-term investments
$
90,350
$
169,510
Receivables, net
134,400
126,639
Inventories
226,470
218,375
Prepaid expenses and other current
assets
9,249
5,407
Current assets
460,469
519,931
Property, plant and equipment, net
667,963
589,417
Other noncurrent assets
83,298
119,826
Total assets
$
1,211,730
$
1,229,174
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses
$
96,709
$
89,191
Current portion of lease obligations
834
906
Current liabilities
97,543
90,097
Lease obligations, less current
maturities
1,299
1,472
Deferred income taxes and other
liabilities
117,321
124,824
Stockholders' equity
995,567
1,012,781
Total liabilities and stockholders'
equity
$
1,211,730
$
1,229,174
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210928005970/en/
Dolph Baker, Chairman and CEO Max P. Bowman, Vice President and
CFO (601) 948-6813
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