Cal-Maine Foods Inc 10-Q for FY2025 Q2
Cal-Maine Foods Inc (CALM)
10-Q
2025-01-07
For: 2024-11-30
View Original
Added on
April 11, 2026
About this 10-Q
Cal-Maine Foods Inc filed this 10-Q on January 7, 2025, covering the quarter ended November 30, 2024 (FY2025 Q2).
Headline figures
Quarter ended November 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $954.67M
- up 82.5% from $523.23M a year earlier
- Net income
- $219.06M
- up 1187.9% from net income of $17.01M a year earlier
- Diluted EPS
- $4.47
- up 1177.1% from $0.35 a year earlier
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 January 7, 2025.
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)
November 30, 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
(908 )
(1,773 )
Common stock in treasury at cost –
shares at June 1, 2024
(31,661 )
(31,597 )
Total Cal-Maine Foods, Inc. stockholders’ equity
Noncontrolling interest in consolidated entity
(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
Twenty-six Weeks Ended
November 30, 2024
December 2, 2023
November 30, 2024
December 2, 2023
Net sales
$
$
$
$
Cost of sales
Gross profit
Selling, general and administrative
Loss on involuntary conversions
(Gain) loss on disposal of fixed assets
(1,479 )
Operating income
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
(705 )
(431 )
(1,091 )
(946 )
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
Twenty-six Weeks Ended
November 30, 2024
December 2, 2023
November 30, 2024
December 2, 2023
Net income
$
$
$
$
Other comprehensive income (loss), before
tax:
Unrealized holding gain (loss) on available-
for-sale securities, net of reclassification
adjustments
(573 )
Income tax benefit (expense) related to
items of other comprehensive income
(218 )
(277 )
(409 )
Other comprehensive income (loss), net of tax
(434 )
Comprehensive income
Less: Comprehensive loss attributable to the
noncontrolling interest
(705 )
(431 )
(1,091 )
(946 )
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)
Twenty-six Weeks Ended
November 30, 2024
December 2, 2023
Cash flows from operating activities:
Net income
$
$
Depreciation and amortization
Deferred income taxes
(13,825 )
Other adjustments, net
(159,791 )
Net cash provided by operations
Cash flows from investing activities:
Purchases of investment securities
(501,567 )
(43,569 )
Sales and maturities of investment securities
Investment in unconsolidated entities
(363 )
Distributions from unconsolidated entities
Acquisition of business
(111,521 )
(53,746 )
Purchases of property, plant and equipment
(65,588 )
(65,774 )
Net proceeds from disposal of property, plant and equipment
Net cash provided by (used in) investing activities
(247,422 )
Cash flows from financing activities:
Payments of dividends
(87,774 )
(37,276 )
Purchase of common stock by treasury
(60 )
(5 )
Principal payments on long-term debt
(2,477 )
Principal payments on finance lease
(214 )
Net cash used in financing activities
(90,311 )
(37,495 )
Net change in cash and cash equivalents
(97,582 )
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 and year-to-date periods
ended on November 30, 2024 and December 2, 2023 included
13
26 weeks
, respectively.
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 November 30, 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
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 - Acquisitions
Acquisition of ISE America, Inc. Assets
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.
Other Acquisitions
Effective November 30, 2024, the Company acquired the remaining
% interest in our majority-owned subsidiary,
MeadowCreek Foods LLC.
Note 3 - Investment
Securities
The following represents the Company’s investment securities as of November 30, 2024 and June 1, 2024 (in thousands):
November 30, 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 twenty-six weeks ended November 30, 2024 and December 2, 2023, respectively. Gross realized gains for the twenty-six
weeks ended November 30, 2024 and December 2, 2023 were $
realized losses for the twenty-six weeks ended November 30, 2024. Gross realized losses for the twenty-six weeks ended
December 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 November 30, 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 November 30, 2024 and June 1, 2024 (in thousands):
November 30, 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 Fassio Egg Farms, Inc.
(“Fassio”) 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.
The following table shows the beginning and ending balances in fair value of the contingent consideration:
Fassio Contingent Consideration
Balance, June 1, 2024
$
Fair value adjustments
Balance, November 30, 2024
$
12
Adjustments to the fair value of contingent consideration are recorded within selling, general and administrative expenses in the
condensed consolidated statements of income.
Note 5 - Inventories
Inventories consisted of the following as of November 30, 2024 and June 1, 2024 (in thousands):
November 30, 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
November 30, 2024 and June 1, 2024 consisted of approximately
million and
Note 6 - Equity
The following reflects equity activity for the thirteen weeks ended November 30, 2024 and December 2, 2023 (in thousands):
Thirteen Weeks Ended November 30, 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 August 31,
2024
$
$
$
(31,632 )
$
$
(474 )
$
$
(3,490 )
$
Other comprehensive
income, net of tax
—
—
—
—
(434 )
—
—
(434 )
Stock compensation
plan transactions
(29 )
—
—
—
Contributions to
Crepini Foods LLC
—
—
—
—
—
—
Aquisition of
noncontrolling
interest in
MeadowCreek Foods
LLC
—
—
—
—
—
(3,826 )
Dividends ($
per share)
Common
—
—
—
—
—
(65,911 )
—
(65,911 )
Class A common
—
—
—
—
—
(7,147 )
—
(7,147 )
Net income (loss)
—
—
—
—
—
(705 )
Balance at November
30, 2024
$
$
$
(31,661 )
$
$
(908 )
$
$
$
13
Thirteen Weeks Ended December 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 September
2, 2023
$
$
$
(30,014 )
$
$
(2,291 )
$
$
(2,013 )
$
Other comprehensive
income, net of tax
—
—
—
—
—
—
Stock compensation
plan transactions
—
—
—
Dividends ($
per share)
Common
—
—
—
—
—
(5,125 )
—
(5,125 )
Class A common
—
—
—
—
—
(557 )
—
(557 )
Net income (loss)
—
—
—
—
—
(431 )
Balance at December
2, 2023
$
$
$
(30,014 )
$
$
(1,614 )
$
$
(2,444 )
$
Twenty-six Weeks Ended November 30, 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
(64 )
—
—
—
Contributions to
Crepini Foods LLC
—
—
—
—
—
—
Aquisition of
noncontrolling
interest in
MeadowCreek Foods
LLC
—
—
—
—
—
(3,826 )
Dividends ($
per share)
Common
—
—
—
—
—
(110,986 )
—
(110,986 )
Class A common
—
—
—
—
—
(12,038 )
—
(12,038 )
Net income (loss)
—
—
—
—
—
(1,091 )
Balance at November
30, 2024
$
$
$
(31,661 )
$
$
(908 )
$
$
$
14
Twenty-six Weeks Ended December 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
loss, net of tax
—
—
—
—
1,272
—
—
Stock compensation
plan transactions
(6 )
—
—
—
Dividends ($
per share)
Common
—
—
—
—
—
(5,390 )
—
(5,390 )
Class A common
—
—
—
—
—
(586 )
—
(586 )
Net income (loss)
—
—
—
—
—
(946 )
Balance at December
2, 2023
$
$
$
(30,014 )
$
$
(1,614 )
$
$
(2,444 )
$
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
Twenty-six Weeks Ended
November 30, 2024
December 2, 2023
November 30, 2024
December 2, 2023
Numerator
Net income
$
$
$
$
Less: Loss attributable to
noncontrolling interest
(705 )
(431 )
(1,091 )
(946 )
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
$
$
$
$
15
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, as well as ready-to-eat products such as hard-
cooked eggs, egg wraps, protein pancakes, crepes and wrap-ups. Liquid and frozen egg products are primarily sold to the
institutional, foodservice and food manufacturing sectors. Ready-to-eat products are sold primarily within the retail and
foodservice channels.
The following table provides revenue disaggregated by product category (in thousands):
Thirteen Weeks Ended
Twenty-six Weeks Ended
November 30, 2024
December 2, 2023
November 30, 2024
December 2, 2023
Conventional shell egg sales
$
$
$
$
Specialty shell egg sales
Egg products
Other
$
$
$
$
Note 9 - Stock Based Compensation
Total stock-based compensation expense was $
and December 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 November 30, 2024 of $
average period of
14 - Stock Compensation Plans in our 2024 Annual Report for further information on our stock compensation plans.
The Company’s restricted share activity for the twenty-six weeks ended November 30, 2024 follows:
Number of
Shares
Weighted
Average Grant
Date Fair Value
Outstanding, June 1, 2024
$
Vested
(3,016 )
Forfeited
(2,892 )
Outstanding, November 30, 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
16
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. On November 30, 2024, the State filed an amended petition, primarily to address a
procedural deficiency that required the State to generally plead it was seeking monetary relief over $
restitution, civil penalties, attorney’s fees and costs. 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 $
defendants, jointly and severally, totaling $
motion for judgment as a matter of law or for a new trial, and a motion to alter or amend the judgment. On December 13, 2024,
the court granted defendants’ November 20, 2024 motion to stay enforcement of the judgment and entered an agreed order
requiring the defendants to post security during post-judgment proceedings and appeal, and stayed proceedings to enforce the
judgment until the disposition of the post-judgment motions and ultimate appeals. On December 17, 2024, the Company posted
a bond in the approximate amount of $
appeal the trial court’s decision. Another defendant posted a bond for the remaining amount, The Company intends to continue
to vigorously defend the claims asserted by the Egg Products Plaintiffs.
If the jury’s decision is ultimately upheld, the Company would be jointly and severally liable with other defendants for treble
damages, or $
Plaintiffs’ reasonable attorneys’ fees. During our second fiscal quarter of 2024, we recorded an accrued expense of $
million in selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Income and
classified as other noncurrent liabilities in the Company’s Condensed Consolidated Balance Sheets. Although less than the
bond posted by the Company, 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 and may also be revised in whole or in part in the
future to the extent we are successful in further proceedings in the litigation.
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.
17
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
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 November 5, 2024 the court denied defendants’
September 20, 2024 motion to certify an interlocutory appeal. The evidentiary hearing proceeded as scheduled and concluded
on December 17, 2024. The court directed the parties to present their proposed findings of fact and conclusions of law and
supporting briefs by January 30, 2025. 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.
18
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 48.1
million layers and 12.0 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.
19
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 customers’ 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 23.4% of our total shell
egg revenue for the second 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
20
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.
Effective on September 9, 2024, we 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 3,500 retail stores. The new entity, located in
Hopewell Junction, New York, operates as Crepini Foods LLC (“Crepini”). We capitalized Crepini with approximately $6.75
million in cash to purchase additional equipment and other assets and fund working capital in exchange for a 51% interest in the
new venture. Crepini LLC contributed its existing assets and business in exchange for a 49% interest in the new venture.
In fiscal 2022, we announced a strategic investment in a new entity, MeadowCreek Food, LLC (“MeadowCreek”), which
became a majority-owned subsidiary. During March 2023, MeadowCreek began operations with a focus on being a leading
provider of hard-cooked eggs. During second quarter 2025, we acquired the remaining ownership interests in MeadowCreek
and it became a wholly-owned subsidiary.
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 for use in shell egg production.
HPAI
Outbreaks of HPAI have continued to occur in U.S. poultry flocks. In In calendar 2024, 38.4 million commercial layer hens and
1.8 million pullets were depopulated due to HPAI. Approximately 13.6 million commercial layer hens and 500,000 pullets were
depopulated in December 2024 alone.
Our facilities in Kansas and Texas which experienced HPAI in fiscal 2024 are now fully operational.
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. According to the U.S. Centers for Disease Control and Prevention
(“CDC”), as of January 6, 2025, there were outbreaks in 917 herds of dairy cows in 16 states, and in 2024 there were 66 human
cases in the U.S., almost entirely among poultry and dairy workers. However, in 2024, one of the human cases resulted in
severe illness after the patient was exposed to sick and dead birds in backyard flocks. The patient, who was reported to have
underlying health conditions, died in January 2025. There have been no reported cases of person-to-person spread. According
to the CDC, the human health risk to the U.S. public from the HPAI virus is considered to be low. The extent of possible future
outbreaks among U.S. commercial egg layer flocks, with heightened risk during migration seasons, cannot be predicted.
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 second quarter and first two quarters of fiscal 2025, we recorded a gross profit of $356.0 million and $603.3 million,
respectively, compared to $91.1 million and $136.6 million, respectively, for the same periods of fiscal 2024, primarily driven
by an increase in the net average selling price of shell eggs, primarily conventional egg prices, as well as an increase in total
dozens sold, primarily specialty dozens sold. Our results were also positively impacted by lower feed costs and our recent
acquisitions discussed above, partially offset by an increase in the volume and price of outside egg purchases.
Our net average selling price per dozen for the second quarter of fiscal 2025 was $2.740 compared to $1.730 in the prior-year
period. Conventional egg prices per dozen were $2.943 compared to $1.458 for the prior-year period, and specialty egg prices
per dozen were $2.387 compared to $2.277 for the prior-year period. Egg prices in the second 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 September through November
(which most closely aligns with our second fiscal quarter) 2024 was approximately 310.7 million hens, which was a decrease of
9.7 million layers, or 3.0%, compared to the same period in the prior year. The daily average price for the Urner Barry southeast
large index for the second quarter of fiscal 2025 increased 102.1% from the comparable period in the prior year. For more
information about historical shell egg prices, see Part I Item I of our 2024 Annual Report.
21
Our dozens sold for the second quarter of fiscal 2025 increased 14.5% compared to the second quarter of fiscal 2024. In
addition to robust demand, 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.
Our farm production costs per dozen produced for the second quarter of fiscal 2025 decreased 8.5%, or $0.08 compared to the
prior year period, primarily due to lower feed costs. Feed costs per dozen produced decreased 12.8%, or $0.07, compared to the
second 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 cost of sales increased $126.4 million
quarter-over-quarter, primarily due to higher shell egg prices as well as an increase in dozens purchased to supply eggs for our
customers, including those acquired in our ISE acquisition, during the higher seasonal demand cycle while the nation
experienced lower supply due to HPAI.
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
Twenty-six Weeks Ended
November 30,
2024
December 2, 2023
November 30,
2024
December 2, 2023
Net sales
100.0
%
100.0
%
100.0
%
100.0
%
Cost of sales
62.7
%
82.6
%
65.3
%
86.1
%
Gross profit
37.3
%
17.4
%
34.7
%
13.9
%
Selling, general and administrative
8.1
%
14.5
%
8.0
%
13.1
%
(Gain) loss on disposal of fixed assets
—
%
0.1
%
(0.1)
%
—
%
Operating income
29.2
%
2.8
%
26.8
%
0.8
%
Total other income, net
1.1
%
1.5
%
1.3
%
1.6
%
Income before income taxes
30.3
%
4.3
%
28.1
%
2.4
%
Income tax expense
7.4
%
1.1
%
6.8
%
0.6
%
Net income
22.9
%
3.2
%
21.3
%
1.8
%
Less: Loss attributable to noncontrolling
interest
(0.1)
%
(0.1)
%
(0.1)
%
(0.1)
%
Net income attributable to Cal-Maine
Foods, Inc.
23.0
%
3.3
%
21.4
%
1.9
%
NET SALES
Total net sales for the second quarter of fiscal 2025 were $954.7 million compared to $523.2 million for the same period of
fiscal 2024.
Shell egg sales represented 94.6% and 95.3% of total net sales for the second 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. The Company’s egg products offerings
include liquid and frozen egg products and ready-to-eat products such as hard-cooked eggs, egg wraps, protein pancakes, crepes
and wrap-ups. Other sales represent feed sales, miscellaneous byproducts and resale products.
Total net sales for the twenty-six weeks ended November 30, 2024 were $1.7 billion, compared to $982.6 million for the
comparable period of fiscal 2024.
Shell egg sales represented 94.5% and 94.9% of total net sales for the twenty-six weeks ended November 30, 2024 and
December 2, 2023, respectively.
22
The table below presents net sales in key categories (in thousands, except percentage data):
Thirteen Weeks Ended
Twenty-six Weeks Ended
November 30, 2024
December 2, 2023
% Change
November 30, 2024
December 2, 2023
% Change
Shell Egg
$
903,861
$
498,504
81.3
%
$
1,645,374
$
932,465
76.5
%
Egg products
40,651
20,012
103.1
75,826
42,235
79.5
Other
10,159
4,718
115.3
19,342
7,878
145.5
Total net sales
$
954,671
$
523,234
82.5
%
$
1,740,542
$
982,578
77.1
%
The table below presents an analysis of our shell egg sales (in thousands, except percentage data):
Thirteen Weeks Ended
Twenty-six Weeks Ended
November 30, 2024
December 2, 2023
November 30, 2024
December 2, 2023
Shell egg sales
Conventional
$
616,891
68.3
%
$
280,599
56.3
%
$
1,101,627
67.0
%
$
505,879
54.3
%
Specialty
286,970
31.7
217,905
43.7
%
543,747
33.0
426,586
45.7
Total shell egg sales
$
903,861
100.0
%
$
498,504
100.0
%
$
1,645,374
100.0
%
$
932,465
100.0
%
Dozens sold
Conventional
209,597
63.5
%
192,462
66.8
%
409,586
64.0
%
373,992
66.6
%
Specialty
120,247
36.5
95,711
33.2
230,237
36.0
187,307
33.4
Total dozens sold
329,844
100.0
%
288,173
100.0
%
639,823
100.0
%
561,299
100.0
%
Net average selling price per dozen
Conventional
$
2.943
$
1.458
$
2.690
$
1.353
Specialty
$
2.387
$
2.277
$
2.362
$
2.277
All shell eggs
$
2.740
$
1.730
$
2.572
$
1.661
Shell egg sales
Second Quarter – Fiscal 2025 vs. Fiscal 2024
-
In the second quarter of fiscal 2025, conventional egg sales increased $336.3 million, or 119.8%, compared to the
second quarter of fiscal 2024, primarily due to a 101.9% increase in the prices for conventional eggs, which resulted in
a $311.3 million increase in net sales, and a 8.9% increase in the volume of conventional eggs sold, which resulted in a
$25.0 million increase in net sales. Results for the second quarter of 2025 were positively impacted by our recent
acquisition of ISE.
-
Specialty egg sales increased $69.1 million, or 31.7%, in the second quarter of fiscal 2025 compared to the second
quarter of fiscal 2024, primarily due to a 25.6% increase in the volume of specialty eggs sold, which resulted in a
$55.9 million increase in net sales and a 4.8% increase in prices for specialty eggs, which resulted in a $13.2 million
increase in net sales.
-
Demand for specialty eggs increased in the second quarter of fiscal 2025 as conventional egg prices rose. Specialty
dozens sold represented 36.5% of our shell egg dozens sold for the second quarter of fiscal 2025 compared to 33.2%
for 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.
Twenty-six weeks – Fiscal 2025 vs. Fiscal 2024
- For the twenty-six weeks ended November 30, 2024, conventional egg sales increased $595.8 million, or 117.8%,
compared to the same period of fiscal 2024, primarily due to the increase in the prices for conventional shell eggs.
Prices for conventional eggs increased 98.8%, which resulted in a $547.6 million increase in net sales. A 9.5%
increase in the volume of conventional eggs sold resulted in a $48.2 million increase in net sales.
-
Specialty egg sales increased $117.2 million, or 27.5%, for the twenty-six weeks ended November 30, 2024 compared
to the same period in fiscal 2024, primarily due to a 22.9% increase in the volume of specialty eggs sold, which
23
resulted in a $
97.8 million increase in net sales and a 3.7% increase in prices for specialty eggs, which resulted in a
$19.6 million increase in net sales.
Egg products sales
Second Quarter – Fiscal 2025 vs. Fiscal 2024
-
Egg products sales increased $20.6 million, or 103.1%, for the second quarter of fiscal 2025 compared to the same
period of fiscal 2024, primarily due to a 63.5% increase in liquid eggs pounds sold, which had a $7.9 million positive
impact on net sales, and a 25.2% increase in the net average selling price per pound of liquid eggs, which resulted in a
$5.1 million increase in net sales. Results for the second quarter of 2025 were positively impacted by our recent
acquisition of ISE, which included a breaking facility.
-
Sales from hard-cooked eggs increased $6.4 million or 212.5% in the second quarter of fiscal 2025 compared to fiscal
2024 as more processing capabilities are coming online from our investments in MeadowCreek and Crepini.
Twenty-six weeks – Fiscal 2025 vs. Fiscal 2024
- Egg products sales increased $33.6 million, or 79.5%, primarily due to a 39.9% increase in liquid eggs pounds sold,
which had a $10.9 million positive impact on net sales, and a 25.0% increase in the net average selling price per pound
of liquid eggs, which resulted in a $9.5 million increase in net sales.
-
Sales from hard-cooked eggs increased $12.1 million, or 194.6%, in the first two quarters of fiscal 2025 compared to
the same period in fiscal 2024, primarily for the reasons described above.
Other
-
Other sales increased compared to the prior year periods primarily due to higher feed sales related to our ISE
acquisition.
24
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 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
Twenty-six Weeks Ended
November 30,
2024
December 2,
2023
%
Change
November 30,
2024
December 2,
2023
%
Change
Cost of sales
Farm production
$
258,246
$
258,367
—
%
$
499,947
$
511,874
(2.3)
%
Processing, packaging,
and warehouse
98,823
84,767
16.6
190,534
166,673
14.3
Egg purchases and other
cost of sales
198,030
71,654
176.4
366,479
132,451
176.7
Egg products
43,530
17,316
151.4
80,322
35,017
129.4
Total cost of sales
$
598,629
$
432,104
38.5
%
$
1,137,282
$
846,015
34.4
%
Farm production costs (per
dozen produced)
Feed
$
0.483
$
0.554
(12.8)
%
$
0.488
$
0.575
(15.1)
%
Other
$
0.418
$
0.431
(3.0)
%
$
0.421
$
0.435
(3.2)
%
Total farm production cost
$
0.901
$
0.985
(8.5)
%
$
0.909
$
1.010
(10.0)
%
Outside egg purchases
(average cost per dozen)
$
3.22
$
2.03
58.6
%
$
3.03
$
1.84
64.7
%
Dozens produced
288,036
265,101
8.7
%
554,875
515,457
7.6
%
Percent produced to sold
87.3%
92.0%
(5.1)
%
86.7%
91.8%
(5.6)
%
Farm Production
Second Quarter – Fiscal 2025 vs. Fiscal 2024
-
Feed costs per dozen produced decreased 12.8% in the second quarter of fiscal 2025 compared to the second 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 $20.5 million for the second quarter of
fiscal 2025 compared to the prior period quarter.
-
For the second quarter of fiscal 2025, the average Chicago Board of Trade (“CBOT”) daily market price was $4.17 per
bushel of corn and $311 per ton of soybean meal, representing decreases of 13.0% and 25.3%, respectively, as
compared to the average CBOT daily market prices for the second 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.
Twenty-six weeks – Fiscal 2025 vs. Fiscal 2024
-
Feed costs per dozen produced decreased 15.1% in the twenty-six weeks ended November 30, 2024 compared to the
same period of fiscal 2024, primarily due to lower feed ingredient prices. The decrease in feed cost per dozen resulted
in a decrease in cost of sales of $48.3 million compared to the prior year period.
-
For the year-to-date period, the average CBOT daily market price was $4.10 per bushel of corn and $326 per ton of
soybean meal, representing decreases of 18.8% and 22.4%, respectively, compared to the average CBOT daily market
prices for the comparable period in the prior year.
25
-
Other farm production costs decreased due to lower flock amortization, for the reasons described above.
Current indications for corn and soybean project a favorable stocks-to-use ratio near the levels prevailing today for the
remainder of fiscal 2025; however, as long as outside factors remain uncertain (including weather patterns and global supply
chain disruptions), volatility could remain.
Processing, packaging, and warehouse
Second Quarter – Fiscal 2025 vs. Fiscal 2024
-
Processing, packaging, and warehouse costs increased 16.6% compared to the second quarter of fiscal 2024 due to a
9.7% increase in the volume of processed dozens as well as an increase in costs of packaging materials.
Twenty-six weeks – Fiscal 2025 vs. Fiscal 2024
-
Processing, packaging, and warehouse costs increased 14.3% compared to the first two quarters of fiscal 2025,
primarily due an 8.6% increase in the volume of processed dozens as well as an increase in costs of packaging
materials.
Egg purchases and other cost of sales
Second 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 58.6% compared to second quarter of fiscal 2024, as well as due to an increase of 80.3% in dozens
purchased. Dozens purchased increased due to purchasing more eggs to supply our customers during the higher
seasonal demand cycle while the nation experienced lower supply due to HPAI.
Twenty-six weeks – 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 64.7% compared to fiscal 2024, as well as an increase of 73.8% in dozens purchased, primarily
for the reasons described above.
GROSS PROFIT
Gross profit, as a percentage of net sales, was 31.5% for the second quarter of fiscal 2025 compared to 9.9% for the same
period of fiscal 2024. Gross profit for the twenty-six weeks ended November 30, 2024 was $603.3 million compared to $136.6
million for the same period of 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. (“EB”) 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
November 30, 2024
December 2, 2023
$ Change
% Change
Delivery expense
$
23,666
$
17,706
$
5,960
33.7
%
Marketing expense
15,074
12,197
2,877
23.6
%
Litigation loss contingency accrual
-
19,648
(19,648)
(100.0)
%
Other general and administrative
expenses
38,893
27,027
11,866
43.9
%
Total
$
77,633
$
76,578
$
1,055
1.4
%
Second Quarter – Fiscal 2025 vs. Fiscal 2024
26
Delivery expense
-
The increased delivery expense is primarily due to an increase in dozens sold in the second quarter of fiscal 2025
compared to the second 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 second quarter of fiscal 2024.
Litigation loss contingency accrual
- In the second quarter of fiscal 2024, we accrued a $19.6 million loss contingency relating to a jury decision returned in
pending anti-trust litigation. See further discussion in
Condensed Consolidated Financial Statements included in this Quarterly Report.
Other general and administrative expense
-
The increase in other general and administrative expense is primarily due both to an increase in the accrual for
anticipated employee bonuses and to the increased adjustment to the fair value of contingent consideration associated
with the Fassio acquisition. See further discussion in
of the Notes to Condensed
Consolidated Financial Statements included in this Quarterly Report.
Twenty-six Weeks Ended
November 30, 2024
December 2, 2023
$ Change
% Change
Delivery expense
$
44,730
$
35,397
$
9,333
26.4
%
Marketing expense
29,426
24,661
4,765
19.3
%
Litigation loss contingency accrual
—
19,673
(19,673)
(100.0)
%
Other general and administrative
expenses
65,409
49,093
16,316
33.2
%
Total
$
139,565
$
128,824
$
10,741
8.3
%
Twenty-six weeks – Fiscal 2025 vs. Fiscal 2024
Delivery expense
-
The increased delivery expense is primarily due to an increase in dozens sold compared to the prior year period.
Marketing expense
-
The increase in marketing expense is primarily due to an increase in franchise fees as specialty egg sales increased
compared to the prior year period.
Other general and administrative expense
-
The increase in other general and administrative expense is primarily for the reasons described above, as well as costs
associated with the acquisition of ISE assets that occurred during the first quarter of fiscal 2025.
OPERATING INCOME
For the second quarter of fiscal 2025, we recorded operating income of $278.1 million compared to operating income of $14.2
million for the same period of fiscal 2024.
For the twenty-six weeks ended November 30, 2024, we recorded operating income of $465.0 million compared to operating
income of $7.5 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.
For the second quarter of fiscal 2025, we earned $9.9 million of interest income compared to $7.1 million for the same period
of fiscal 2024, primarily due to higher average cash and cash equivalents and investment securities available-for-sale balances
27
and yields. The Company recorded interest expense of $150 thousand and $134 thousand for the second quarters ended
November 30, 2024 and December 2, 2023, respectively.
For the twenty-six weeks ended November 30, 2024, we earned $19.9 million of interest income compared to $14.6 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 $310 thousand and $276 thousand for the twenty-six
weeks ended November 30, 2024 and December 2, 2023, respectively.
INCOME TAXES
For the second quarter of fiscal 2025, our pre-tax income was $289.0 million, compared to $22.1 million for the second quarter
of fiscal 2024. Income tax expense of $70.6 million was recorded for second quarter 2025 with an effective tax rate of 24.4%.
For second quarter 2024, income tax expense was $5.5 million with an effective tax rate of 25.0%.
For the twenty-six weeks ended November 30, 2024, pre-tax income was $486.9 million, compared to $22.9 million for the
same period of fiscal 2024. Income tax expense of $119.0 million was recorded for the twenty-six weeks ended November 30,
2024 with an effective tax rate of 24.4%. For the same period of fiscal 2024, income tax expense was $5.9 million with 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 second quarter ended November 30, 2024 was $219.1 million, or
$4.49 per basic and $4.47 per diluted common share, compared to net income attributable to Cal-Maine Foods, Inc. of $17.0
million, or $0.35 per basic and diluted common share, for the same period of fiscal 2024.
Net income attributable to Cal-Maine Foods, Inc. for the twenty-six weeks ended November 30, 2024, was $369.0 million, or
$7.57 per basic and $7.54 per diluted common share, compared to net income attributable to Cal-Maine Foods, Inc. of $17.9
million or $0.37 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 $1.2 billion at November 30, 2024 compared to $1.0 billion at June 1, 2024. The calculation of
working capital is defined as current assets less current liabilities. Our current ratio was 5.5 at November 30, 2024 and June 1,
2024. The current ratio is calculated by dividing current assets by current liabilities.
Cash Flows from Operating Activities
For the twenty-six weeks ended November 30, 2024, $240.2 million in net cash was provided by operating activities, compared
to $73.7 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, increased volume of sales and a
decrease in feed ingredient costs compared to the prior-year period, partially offset by the increase in volume and price of
outside egg purchases.
Cash Flows from Investing Activities
For the twenty-six weeks ended November 30, 2024, $247.4 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 $32.8 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 $426.5 million in the twenty-six weeks ended November 30, 2024 and purchases of
investment securities were $501.6 million during the period. Sales and maturities of investment securities were $196.1 million
in the prior year period while purchases of investment securities were $43.6 million during the period. The increase in sales and
maturities of investment securities is primarily due to the maturities of short-term investments during the first two quarters of
28
fiscal 2025. Purchases of property, plant and equipment were $65.6 million and $65.8 million in the first two quarters of fiscal
2025 and 2024, respectively, primarily reflecting progress on our construction projects.
Cash Flows from Financing Activities
We paid dividends of $87.8 million for the twenty-six weeks ended November 30, 2024 compared to $37.3 million in the same
prior-year period.
As of November 30, 2024, cash decreased $97.6 million since June 1, 2024, compared to an increase of $69.0 million during
the same period of fiscal 2024. The decrease is primarily due to the acquisition of assets of ISE during fiscal 2025.
Credit Facility
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 November 30,
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 $73.0 million, or
approximately $1.489 per share, to holders of our Common Stock and Class A Common Stock with respect to our second
quarter of fiscal 2025. The amount paid per share will vary based on the number of outstanding shares on the record date. The
dividend is payable on February 13, 2025 to holders of record on January 29, 2025.
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 November 30, 2024 (in thousands):
Project(s) Type
Projected
Completion
Projected Cost
Spent as of
November 30, 2024
Remaining
Projected Cost
Cage-Free Layer & Pullet Houses
Fiscal 2025
$
83,167
$
79,340
$
3,827
Feed Mills
Fiscal 2026
16,593
6,376
10,217
Egg Products Expansion
Fiscal 2026
15,361
-
15,361
Cage-Free Layer & Pullet Houses
Fiscal 2026
195,996
126,117
69,879
$
311,117
$
211,833
$
99,284
The table reflects approximately $60 million in new capital projects added since the end of first quarter 2025. These projects
include the addition of five new cage-free layer houses and two pullet houses across our locations in Florida, Georgia, Utah and
Texas. We expect the projects to be completed with additional production capacity for approximately 1.1 million cage-free
layer hens and 250 thousand pullets by late summer 2025. We are also investing $15 million to expand our egg products
processing facility in Blackshear, Georgia to add extended shelf-life liquid eggs products.
We expect the processing plant and hatchery that we acquired in fourth quarter 2024 and repurposed for use in shell egg
production to be online in our next fiscal quarter. We have been working with local contract growers and have commitments
that would result in approximately 1.2 million additional free-range hens by fall 2025.
29
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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in our exposure to market risk during the twenty-six weeks ended November 30, 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 November 30, 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 November 30, 2024
that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
30
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 second 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
09/01/24 to 09/28/24
—
$
—
—
—
09/29/24 to 10/26/24
285
94.16
—
—
10/27/24 to 11/30/24
—
—
—
—
285
$
94.16
—
—
(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.
31
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:
January 7, 2025
/s/ Max P. Bowman
Max P. Bowman
Vice President, Chief Financial Officer
(Principal Financial Officer)
Date:
January 7, 2025
/s/ Matthew S. Glover
Matthew S. Glover
Vice President – Accounting
(Principal Accounting Officer)
Exhibit 31.1
1
Certification
Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934,
As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Sherman L. Miller, certify that:
1.
I have reviewed this Quarterly Report on Form 10-Q of Cal-Maine Foods, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(d)
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
/s/ Sherman L. Miller
Sherman L. Miller
President and Chief Executive Officer
Date:
January 7, 2025
Exhibit 31.2
1
Certification
Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934,
As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Max P. Bowman, certify that
1.
I have reviewed this Quarterly Report on Form 10-Q of Cal-Maine Foods, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
/s/ Max P. Bowman
Max P. Bowman
Vice President and Chief Financial Officer
Date:
January 7, 2025
Exhibit 32
1
Certifications Pursuant to 18 U.S.C. §1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Solely for the purposes of complying with 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, we, the undersigned Chief Executive Officer and Chief Financial Officer of Cal-Maine Foods, Inc. (the “Company”),
hereby certify, based on our knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended
November 30, 2024 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
/s/ Sherman L. Miller
Sherman L. Miller
President and Chief Executive Officer
/s/ Max P. Bowman
Max P. Bowman
Vice President and Chief Financial Officer
Date:
January 7, 2025