Cal-Maine Foods, Inc. (NASDAQ: CALM) today reported
results for the first quarter of fiscal 2017 ended August
27, 2016.
Net sales for the first quarter of fiscal 2017 were $239.8
million, a 60.7 percent decrease compared to $609.9 million for the
first quarter of fiscal 2016. The Company reported a net loss of
$30.9 million, or $0.64 per basic and diluted share, for the first
quarter of fiscal 2017, compared to net income of
$143.0 million, or $2.97 per basic share and $2.95 per
diluted share, for the first quarter of fiscal 2016.
Dolph Baker, chairman, president and chief executive officer of
Cal-Maine Foods, Inc., stated, “Our results for the first quarter
of fiscal 2017 reflect a disappointing shell egg market with more
challenging market conditions and significantly lower market prices
than the first quarter of fiscal 2016. Average customer selling
prices dropped 58 percent from the record high levels we
experienced a year ago. As the supply of shell eggs moved higher
after the disruptions created by the Avian Influenza outbreak in
the spring of 2015, market prices declined. Retail demand remained
favorable; however, lower institutional demand for egg products and
reduced egg exports pushed inventory levels higher and created
additional pricing pressures. As cited in recent USDA Chickens and
Eggs Reports, the increase in chicks hatched indicates the national
laying flock will continue to expand. Based on this report, we
expect the shell egg supply will continue to grow through calendar
2016, and then we may begin to see a correction early next
year.
“Our first quarter results were also affected by lower co-pack
business and a small decline in specialty egg volume compared with
the prior year period. Sales of specialty eggs accounted for 22.9
percent of our total number of shell eggs sold and 46.7 percent of
our shell eggs revenue for the first quarter of fiscal 2017.
Specialty egg prices held up better than non-specialty egg prices,
but were down 20 percent from the extremely high levels in the
first quarter of last year. As non-specialty shell egg prices
dropped, we experienced margin and volume pressures on specialty
eggs as well. Consumer demand trends remain favorable, and we are
focused on the continued expansion of our specialty egg business,
especially cage-free eggs, in light of current and anticipated
customer demand. As reported, many food service providers, national
restaurant chains and major retailers, including our largest
customers, have made public commitments to exclusive offerings of
cage-free eggs by future specified dates. We are making significant
investments across our operations, including our joint venture with
Rose Acre Farms in Texas and additional conversion projects, to
expand our cage-free egg production and meet this expected future
demand. Above all, we will continue to support our customers with a
favorable product mix that includes cage-free eggs, as well as
other healthy and affordable options for consumers including
conventional, nutritionally enhanced and organic eggs.”
Baker added “Our operations ran well during the summer months;
however, we experienced higher farm production costs primarily due
to ongoing capital improvement and conversion projects. Our feed
costs per dozen produced were marginally higher compared with a
year ago, with adequate supplies of grain from last fall. The USDA
reports indicate another plentiful harvest for both corn and
soybean crops this year, which should result in lower grain prices
for fiscal 2017.
“Looking ahead, we plan to continue to execute our strategy
despite short-term market conditions. We will focus on managing our
operations efficiently and identifying additional growth
opportunities, including acquisitions, that will enhance our
ability to serve our customers and extend our market reach. As
previously announced on August 2, 2016, Cal-Maine Foods is in the
process of acquiring substantially all of the assets of Foodonics
International, Inc. and its related entities doing business as
Dixie Egg Company. The assets to be acquired include commercial egg
production and processing facilities with capacity for
approximately 1.6 million laying hens and related feed production,
milling and distribution facilities in Georgia, Alabama and Florida
as well as contract grower arrangements for an additional 1.5
million laying hens. In addition, the assets to be acquired include
the Egg-Land’s Best, Inc. franchise with licensing rights for
portions of certain markets in Alabama, Florida and Georgia as well
as Puerto Rico, Bahamas and Cuba. We expect to close this
transaction in the second quarter of fiscal 2017, and we are
excited about the opportunities this acquisition will provide for
Cal-Maine Foods and our customers,” said Baker.
Pursuant to Cal-Maine Foods’ variable dividend policy, for each
quarter for which the Company reports net income, the Company pays
a cash dividend to shareholders in an amount equal to one-third of
such quarterly income. Following a quarter for which the Company
does not report net income, the Company will not pay a dividend
with respect to that quarter or for a subsequent profitable quarter
until the Company is profitable on a cumulative basis computed from
the date of the last quarter for which a dividend was paid.
Therefore, the Company did not pay a dividend with respect to the
fourth quarter of fiscal 2016 and will not pay a dividend for the
first quarter of fiscal 2017. At August 27, 2016, cumulative losses
that must be recovered prior to paying a dividend were $31.3
million.
Selected operating statistics for the first quarter of fiscal
2017 compared with the prior-year period are shown below:
13 Weeks Ended August 27,
2016 August 29, 2015 Dozen Eggs Sold (000)
242,325 258,774 Dozen Eggs Produced (000) 198,782 202,648 %
Specialty Sales (dozen)* 22.9 % 22.4 % % Specialty Sales (dollars)*
46.7 % 24.7 % Net Average Selling Price (dozen) $ 0.952 $ 2.243 Net
Average Selling Price Specialty Eggs (dozen) $ 1.973 $ 2.481 Feed
Cost (dozen) $ 0.431 $ 0.419
*Excludes co-pack specialty eggs
Cal-Maine Foods, Inc. is primarily engaged in the production,
grading, packing and sale of fresh shell eggs, including
conventional, cage-free, organic and nutritionally-enhanced eggs.
The Company, which is headquartered in Jackson,
Mississippi, is the largest producer and distributor of fresh shell
eggs in the United States and sells the majority of
its shell eggs in states across the southwestern, southeastern,
mid-western and mid-Atlantic regions of the United States.
Statements contained in this press release that are not
historical facts are forward-looking statements as that term
is defined in the Private Securities Litigation Reform Act of 1995.
The forward-looking statements are based on management’s current
intent, belief, expectations, estimates and projections regarding
our company and our industry. These statements are not guarantees
of future performance and involve risks, uncertainties, assumptions
and other factors that are difficult to predict and may be
beyond our control. The factors that could cause actual results to
differ materially from those projected in the forward-looking
statements include, among others, (i) the risk factors set forth in
the Company’s SEC filings (including its Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K), (ii) the risks and hazards
inherent in the shell egg business (including disease, pests,
weather conditions and potential for recall),
(iii) changes in the demand for and market prices of shell
eggs and feed costs, (iv) our ability to predict and meet demand
for cage-free and other specialty eggs, (v) risks, changes or
obligations that could result from our future acquisition of
new flocks or businesses and risks or changes that may cause
conditions to completing a pending acquisition not to be met, and
(vi) adverse results in pending litigation matters. SEC
filings may be obtained from the SEC or the Company’s
website, www.calmainefoods.com. Readers are cautioned not to
place undue reliance on forward-looking statements because,
while we believe the assumptions on which the
forward-looking statements are based are reasonable, there can
be no assurance that these forward-looking statements will prove to
be accurate. Further, the forward-looking
statements included herein are only made as of the respective
dates thereof, or if no date is stated, as of the date
hereof. Except as otherwise required by law, we disclaim any
intent or obligation to publicly update these forward-looking
statements, whether as a result of new information, future
events or otherwise.
CAL-MAINE FOODS, INC. AND SUBSIDIARIES FINANCIAL
HIGHLIGHTS
(Unaudited)
(In thousands, except per share
amounts)
SUMMARY STATEMENTS OF OPERATIONS
13 Weeks Ended
August 27,2016
August 29,2015
Net sales $ 239,845 $ 609,895 Gross profit (loss) (9,569 ) 263,071
Operating income (loss) (49,825 ) 220,108 Other income 1,285 549
Income (loss) before income taxes and
noncontrolling interest
(48,540 ) 220,657
Income (loss) before income taxes
attributable to Cal-Maine Foods, Inc.
(48,496 ) 219,590 Net income (loss) $ (30,936 ) $ 143,023
Net income (loss) per share: Basic $ (0.64 ) $ 2.97 Diluted
$ (0.64 ) $ 2.95 Weighted average shares outstanding Basic
48,249 48,163 Diluted 48,249
48,498
SUMMARY BALANCE SHEETS
August 27,2016
May 28,2016
ASSETS Cash and short-term investments $ 306,848 $ 389,545
Receivables 74,099 67,448 Income tax receivable 34,855 11,830
Inventories 154,621 154,799 Prepaid expenses and other current
assets 3,530 2,661 Current assets 573,953 626,283
Property, plant and equipment (net) 404,787 392,274 Other
noncurrent assets 97,232 93,208 Total assets $
1,075,972 $ 1,111,765 LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 59,223 $ 67,131 Current
maturities of long-term debt 15,915 16,320 Current
liabilities 75,138 83,451 Long-term debt, less current
maturities 8,125 9,250 Deferred income taxes and other liabilities
105,282 101,703 Stockholders' equity 887,427 917,361
Total liabilities and stockholders' equity $ 1,075,972 $ 1,111,765
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160926005212/en/
Cal-Maine Foods, Inc.Dolph Baker, 601-948-6813Chairman,
President and CEOorTimothy A. Dawson, 601-948-6813Vice President
and CFO
Cal Maine Foods (NASDAQ:CALM)
Historical Stock Chart
From Aug 2024 to Sep 2024
Cal Maine Foods (NASDAQ:CALM)
Historical Stock Chart
From Sep 2023 to Sep 2024