8-K
Cal-Maine Foods Inc (CALM)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
Date of Report (Date of Earliest Event Reported):
September 28, 2021
Cal-Maine Foods, Inc.
(Exact name of registrant as specified in its charter)
Delaware
001-38695
64-0500378
(State or other jurisdiction of
incorporation)
(Commission File Number)
(IRS Employer Identification No.)
1052 Highland Colony Pkwy
,
Suite 200
,
Ridgeland
,
MS
39157
(Address of principal executive offices (zip code))
601
-
948-6813
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see General Instruction A.2 below):
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the
Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value per share
CALM
The
NASDAQ
Global Select Market
Indicate by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of
1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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.
☐
Item 2.02.
Results of Operations
On September 28, 2021, Cal-Maine Foods, Inc. (the “Company”) issued a press release announcing
its financial results for the
first quarter of fiscal 2022. A copy of the Company’s
press release is attached hereto
as Exhibit 99.1 to this Current Report.
In accordance with General Instruction B.2 of Form 8-K, the information
in this Item 2.02 of this Current Report on Form 8-K,
including Exhibit 99.1 hereto, which are furnished herewith pursuant
to and relate to this Item 2.02, shall not be deemed "filed"
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or otherwise be subject
to the liabilities of Section 18 of the Exchange Act. The information in
this Item 2.02 of
this Current Report on Form 8-K and
Exhibit 99.1 hereto shall not be incorporated by reference into any filing
or other document filed by the Company with the SEC
pursuant to the Securities Act of 1933, as amended, the rules and regulations of the
SEC thereunder, the Exchange Act, or the
rules and regulations of the SEC thereunder except as shall be expressly set forth by
specific reference to this Form 8-K in such
filing or document.
Item 9.01.
Financial Statements and Exhibits
(d)
Exhibits
Exhibit
Number
Description
Press Release issued by the Company on September 28, 2021
104
Cover Page Interactive Data File, (embedded within the Inline XBRL document)
SIGNATURES
Pursuant to the requirements for the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
CAL-MAINE FOODS, INC.
Date:
September 28, 2021
By:
/s/ Max P. Bowman
Max P. Bowman
Director, Vice President, and Chief Financial Officer
Exhibit 99.1
| Contacts: | Dolph Baker, Chairman and CEO |
|---|---|
| Max P. Bowman, Vice President and<br> CFO | |
| (601) 948-6813 |
CAL-MAINE FOODS REPORTS FIRST QUARTER FISCAL 2022 RESULTS
RIDGELAND, Miss. (September 28, 2021) - Cal-Maine Foods, Inc. (NASDAQ: CALM) today reported results for the first quarter of fiscal 2022 (thirteen weeks) ended August 28, 2021.
Net sales in the first quarter of fiscal 2022 increased to $331.7 million compared to $292.8 million in the first quarter of fiscal 2021. The Company reported a net loss of $18.0 million, or $0.37 per basic and diluted common share, for the first quarter of fiscal 2022, compared to a net loss of
$19.4 million, or $0.40 per basic and diluted common share, for the first quarter of fiscal 2021.
Dolph Baker, chairman and chief executive officer of Cal-Maine Foods, Inc., stated, “Our results for the first quarter of fiscal 2022 reflect challenging market conditions. While we reported a
13.3 percent increase in sales compared to the prior-year period, our results were affected by lower conventional egg sale volumes that partially offset a higher average conventional egg selling price. Our shell egg average selling price increased to $1.24 per dozen in the first quarter from $1.08 per dozen in the prior-year period. Our first quarter gross margins reflect higher production costs primarily related to a significant increase in feed costs compared to the prior-year period.
“Retail demand for shell eggs has declined from the high levels we saw during the most restrictive shutdown phases of the pandemic. In the first quarter 2022, total dozens sold decreased 1.7 percent versus the prior-year period to 259.4 million. As restaurants started to return to normalized schedules and consumers began to resume out-of-home dining, food service demand showed improvement, resulting in a more balanced demand for shell eggs.
“Hen numbers reported by the USDA as of September 1, 2021, were 319.5 million, which is approximately the same as the prior year. The USDA also reported that the hatch from April 2021 through August 2021 increased 2.1 percent compared to the prior-year period. As of September 1, 2021, eggs in incubators were down 4.9 percent from last year.
"For the first quarter of fiscal 2022, specialty egg sales totaled $138.7 million, accounting for
43.0 percent of total shell egg revenue, compared with $129.2 million, or 45.2 percent, for the prior-year quarter. Specialty egg dozens sold were 28.9 percent of total dozens sold in the first quarter fiscal 2022, compared with 26.0 percent in the first quarter of fiscal 2021. Higher specialty egg revenue reflects an
8.9 percent increase in specialty dozens sold in the first quarter of fiscal 2022 compared to the prior-year period.
"An important competitive advantage for Cal-Maine Foods is our ability to meet our customers’ evolving needs with a favorable product mix of conventional, cage-free, organic and other specialty eggs and egg products. We have enhanced our efforts to provide free-range and pasture-raised eggs that meet consumers’ evolving choice preferences. While a small part of our current business, the free-range and pasture-raised eggs we produce and sell represent attractive offerings to a subset of consumers, and therefore our customers, and help us continue to serve as the trusted provider of quality food choices.
“Additionally, as customer demand has evolved in line with state requirements for
cage-free eggs, we continue to expand our production capacity in anticipation of future customer purchase decisions. As previously announced, at the beginning of the first quarter, we completed the purchase of the remaining 50 percent membership interest in Red River Valley Egg Farm, LLC, adding an additional 1.7 million cage-free laying hens and pullet capacity. Since 2008, we have invested more than
$482 million in facilities, equipment, and related operations to expand our cage-free production and distribution capabilities. Importantly, we have maintained a strong financial position with the flexibility to continue to make the necessary investments in our operations in line with expected demand.
“For the first quarter of fiscal 2022, we reported an operating loss of $39.7 million compared with an operating loss of $27.2 million for the same period in the prior fiscal year. Farm production costs per dozen produced for the first quarter of fiscal 2022 were up 25.4 percent compared to the first quarter of fiscal 2021, an increase primarily tied to higher feed costs, which were up 40.5 percent compared with
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CALM Reports First Quarter Fiscal 2022 Results
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September 28, 2021
the prior-year period. For the first quarter of fiscal 2022, the average Chicago Board of Trade (“CBOT”) daily market price was $5.96 per bushel for corn and $364 per ton for soybean meal, representing an increase of 81.8 percent and 26.1 percent, respectively, compared to the average daily CBOT prices for the first quarter of fiscal 2021. Corn and soybean supplies remained tight relative to demand, primarily related to higher export demand, as well as weather-related shortfalls in production and yields. We expect market prices to remain elevated and volatile relative to historical prices at least for the short term given the ongoing disruptions related to the COVID-19 global pandemic, weather fluctuations and geopolitical issues.
“While we continue to face a challenging environment, our operations are running well, and we look forward to the opportunities ahead for Cal-Maine Foods in fiscal 2022. We are confident in our growth strategy to provide a favorable product mix, expand our specialty egg production, increase our capacity for cage-free production and manage our operations in an efficient and sustainable manner. We believe we are well-positioned with sufficient capital to fund internal expansion projects and consider potential acquisitions to support our growth. Above all, we will strive to meet the demands of our valued customers and deliver greater value to our shareholders,” added Baker.
Pursuant to Cal-Maine Foods’ variable dividend policy, for each quarter in which the Company reports net income, the Company pays a cash dividend to shareholders in an amount equal to one-third of such quarterly income. Following a quarter for which the Company does not report net income, the Company will not pay a dividend with respect to that quarter or for a subsequent profitable quarter until the Company is profitable on a cumulative basis computed from the date of the last quarter for which a dividend was paid. Therefore, the Company will not pay a dividend with respect to the first quarter of fiscal 2022. As of August 28, 2021, the total cumulative loss to be recovered before payment of a dividend was $22.3 million.
Select operating statistics for the first quarter of fiscal 2022 compared with the prior year period are shown below:
| 13 Weeks Ended | ||||||
|---|---|---|---|---|---|---|
| August 28, 2021 | August 29, 2020 | |||||
| Dozen Eggs Sold (000) | 259,385 | 263,994 | ||||
| Dozen Eggs Produced (000) | 236,458 | 231,161 | ||||
| % Specialty Sales (dozen) | 28.9 | % | 26.0 | % | ||
| % Specialty Sales<br> (dollars) | 43.0 | % | 45.2 | % | ||
| Net Average Selling Price<br> (per dozen) | $ | 1.238 | $ | 1.078 | ||
| Net Average Selling Price<br> Specialty Eggs (per dozen) | $ | 1.851 | $ | 1.880 | ||
| Feed Cost (per dozen) | $ | 0.545 | $ | 0.388 |
Cal-Maine Foods, Inc. is primarily engaged in the production, grading, packing, marketing and distribution of fresh shell eggs, including conventional, cage-free, organic, free-range, pasture-raised and nutritionally enhanced eggs. The Company, which is headquartered in Ridgeland, Mississippi, is the largest producer and distributor of fresh shell eggs in the United States and sells the majority of its shell eggs in states across the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States.
Statementscontained in this press release that are not historical facts areforward-looking statements as that term is defined in the PrivateSecurities Litigation Reform Act of 1995. The forward-looking statements arebased on management’s current intent, belief, expectations, estimates andprojections regarding our company and our industry. These statements are notguarantees of future performance and involve risks, uncertainties, assumptionsand other factors that are difficult to predict and may be beyond ourcontrol. The factors that could cause actual results to differ materially fromthose projected in the forward-looking statements include, among others, (i)the risk factors set forth in the Company’s SEC filings (including itsAnnual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reportson Form 8-K), (ii) the risks and hazards inherent in the shell egg business(including disease, pests, weather conditions and potential for recall),(iii) changes in the demand for and market prices of shell eggs and feedcosts, (iv) our ability to predict and meet demand for cage-free and otherspecialty eggs, (v) risks, changes or obligations that could result from ourfuture acquisition of new flocks
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CALM Reports First Quarter Fiscal 2022 Results
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or businesses andrisks or changes that may cause conditions to completing a pending acquisitionnot to be met, (vi) risks relating to the evolving COVID-19 pandemic, and (vii)adverse results in pending litigation matters. SEC filings maybe obtained from the SEC or the Company’s website, www.calmainefoods.com.Readers are cautioned not to place undue reliance on forward-lookingstatements because, while we believe the assumptions on whichthe forward-looking statements are based are reasonable, there can be noassurance that these forward-looking statements will prove to be accurate.Further, the forward-looking statements included herein are only made asof the respective dates thereof, or if no date is stated, as of the datehereof. Except as otherwise required by law, we disclaim any intent orobligation to publicly update these forward-looking statements, whether asa result of new information, future events or otherwise.
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CALM Reports First Quarter Fiscal 2022 Results
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September 28, 2021
CAL-MAINE FOODS, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands, except per share amounts)
SUMMARY STATEMENTS OF OPERATIONS
| 13 Weeks Ended | ||||
|---|---|---|---|---|
| August 28, 2021 | August 29, 2020 | |||
| Net sales | $ | 331,704 | $ | 292,782 |
| Cost of sales | 325,059 | 276,017 | ||
| Gross profit | 6,645 | 16,765 | ||
| Selling, general and<br> administrative | 46,525 | 43,965 | ||
| (Gain) Loss on disposal of<br> fixed assets | (213) | 23 | ||
| Operating loss | (39,667) | (27,223) | ||
| Other income, net | 5,803 | 1,698 | ||
| Loss before income taxes | (33,864) | (25,525) | ||
| Income tax benefit | (15,838) | (6,126) | ||
| Net loss | $ | (18,026) | $ | (19,399) |
| Net loss per common share: | ||||
| Basic | $ | (0.37) | $ | (0.40) |
| Diluted | $ | (0.37) | $ | (0.40) |
| Weighted average shares<br> outstanding: | ||||
| Basic | 48,858 | 48,501 | ||
| Diluted | 48,858 | 48,501 |
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CALM Reports First Quarter Fiscal 2022 Results
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September 28, 2021
CAL-MAINE FOODS, INC.AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands)
SUMMARY BALANCE SHEETS
| August 28, 2021 | May 29, 2021 | |||
|---|---|---|---|---|
| ASSETS | ||||
| Cash and short-term<br> investments | $ | 90,350 | $ | 169,510 |
| Receivables, net | 134,400 | 126,639 | ||
| Inventories | 226,470 | 218,375 | ||
| Prepaid expenses and other<br> current assets | 9,249 | 5,407 | ||
| Current assets | 460,469 | 519,931 | ||
| Property, plant and<br> equipment, net | 667,963 | 589,417 | ||
| Other noncurrent assets | 83,298 | 119,826 | ||
| Total assets | $ | 1,211,730 | $ | 1,229,174 |
| LIABILITIES AND<br> STOCKHOLDERS' EQUITY | ||||
| Accounts payable and<br> accrued expenses | $ | 96,709 | $ | 89,191 |
| Current portion of lease<br> obligations | 834 | 906 | ||
| Current liabilities | 97,543 | 90,097 | ||
| Lease obligations, less<br> current maturities | 1,299 | 1,472 | ||
| Deferred income taxes and<br> other liabilities | 117,321 | 124,824 | ||
| Stockholders' equity | 995,567 | 1,012,781 | ||
| Total liabilities and<br> stockholders' equity | $ | 1,211,730 | $ | 1,229,174 |
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