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Cal-Maine Foods, Inc. Reports Second Quarter Fiscal 2013 Results



  Cal-Maine Foods, Inc. Reports Second Quarter Fiscal 2013 Results

Business Wire

JACKSON, Miss. -- December 31, 2012

Cal-Maine Foods, Inc. (NASDAQ: CALM) today announced results for the second
quarter and six months ended December 1, 2012.

Net sales for the second quarter of fiscal 2013 were $328.9 million compared
with net sales of $290.4 million for the same quarter of fiscal 2012. The
Company reported net income of $14.3 million, or $0.60 per basic share, for
the second quarter of fiscal 2013 compared with net income of $23.3 million,
or $0.97 per basic share, for the second quarter of fiscal 2012.

For the first six months of fiscal 2013, net sales were $601.8 million
compared with net sales of $534.2 million for the prior-year period. The
Company reported net income of $23.7 million, or $0.99 per basic share, for
the first half of fiscal 2013 compared with net income of $26.4 million, or
$1.11 per basic share, for the year-earlier period.

Dolph Baker, chairman, president and chief executive officer of Cal-Maine
Foods, Inc., stated, “We are pleased with the continued growth in sales for
the second quarter of fiscal 2013; however, our operating results also reflect
challenging market conditions and increased input costs. The higher sales
reflect a 9.1 percent growth in dozens sold and a 4.0 percent increase in
average selling prices compared with the second quarter of fiscal 2012. Our
specialty egg sales accounted for 16.4 percent of dozens sold and 22.9 percent
of total shell egg sales revenue for the quarter. Specialty eggs are an
important area of focus for Cal-Maine Food’s growth strategy as they continue
to gain popularity with consumers looking for healthy choices, and have higher
and less cyclical retail selling prices. Specialty egg prices were up 4.8
percent in the second quarter of fiscal 2013 compared with the same period
last year.

“Our profitability for the second quarter of fiscal 2013 was adversely
affected by higher costs for corn and soybean meal, our primary feed
ingredients, and additional expenses related to recent acquisitions. The
severe drought over the summer months pushed corn prices to record high levels
at the end of the summer. While these costs have come off their peak levels,
our feed costs per dozen were 23.4 percent higher in the second quarter than
the same period a year ago. We expect our feed costs to remain high and
volatile for the remainder of fiscal 2013. In addition, according to the most
recent USDA report, the number of laying hens on December 1, 2012, was 2.5
percent higher compared with a year ago, affecting the current market supply
of eggs. However, the hatch for egg- type chicks has declined over the past
two consecutive years and was down 2.9 percent for the first 11 months of
calendar 2012 compared with the same period in calendar 2011. While we note
these market dynamics for Cal-Maine Foods and our industry, we remain focused
on executing our strategy to be an efficient low-cost producer.

“We continued to expand our operations in fiscal 2013 as we completed another
acquisition during the second quarter,” added Baker. “As previously announced,
we acquired the commercial egg production and related assets of Texas-based
Maxim Production Co., Inc., including a feed mill and two production complexes
with capacity for approximately 3.5 million laying hens with related pullet
capacity. In addition, we added related contract capacity for approximately
500,000 laying hens. This transaction, along with our previous acquisition of
the Pilgrim’s Pride egg production assets, further advances our strategy to
grow our business through selective acquisitions. Our management team is
focused on making the right investments to ensure a successful integration of
these additional facilities. We are pleased with our progress to date and look
forward to the new opportunities ahead for Cal-Maine Foods.”

For the second quarter of fiscal 2013, Cal-Maine Foods will pay a cash
dividend of approximately $0.199 per share to holders of its common and Class
A common stock. The amount paid could vary slightly based on the amount of
outstanding shares on the record date. The dividend is payable
February 14, 2013, to shareholders of record on January 30, 2013.

Selected operating statistics for the second quarter and year to date periods
of fiscal 2013 compared with the prior year periods are shown below:

                                                 
                 13 Weeks Ended                   26 Weeks Ended
                 December 1,     November 26,     December 1,     November 26,
                 2012            2011             2012            2011
Dozen Eggs         238,064          218,132         448,125          426,228
Sold (000)
Dozen Eggs
Produced           179,849          166,233         337,751          325,677
(000)
                                                                   
% Specialty
Sales              16.4    %        16.3    %       16.2    %        16.0    %
(dozen)
                                                                   
Net Average
Selling          $ 1.323         $  1.272         $ 1.283         $  1.196
Price
(dozen)
Feed Cost        $ 0.574         $  0.465         $ 0.547         $  0.474
(dozen)
                                                                   
% Specialty
Sales              22.9    %        22.7    %       23.2    %        23.1    %
Dollars
                                                                   

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 approximately
29 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) risks, changes or obligations that could result from our future
acquisition of new flocks or businesses, and (v) 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 update publicly these forward-looking
statements, whether as a result of new information, future events or
otherwise.

 
SUMMARY STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
                                                   
                  13 Weeks Ended                    26 Weeks Ended
                  December 1,     November          December       November
                  2012            26,               1,             26,
                                  2011              2012           2011
Net sales         $  328,870      $  290,369        $  601,798     $ 534,211
Gross profit         51,298          61,492            96,013        95,278
Operating            20,366          35,673            35,963        41,630
income
Other income         2,031           335               1,135         (889    )
(expense)
Income before        22,397          36,008            37,098        40,741
income taxes
                                                                    
Net income        $  14,290       $  23,260         $  23,705      $ 26,377
                                                                    
Net income
per common
share:
Basic             $  0.60         $  0.97           $  0.99        $ 1.11
Diluted           $  0.60         $  0.97           $  0.99        $ 1.10
                                                                    
Weighted
average
shares
outstanding:
Basic                23,941          23,871            23,931        23,869
Diluted              23,978          23,950            23,968        23,947
                                                                    

 
SUMMARY BALANCE SHEETS
 
                                                December 1,       June 2,
                                                2012              2012
ASSETS
Cash and short-term investments                 $  163,083        $ 260,751
Receivables                                        99,964           62,768
Inventories                                        143,671          117,158
Prepaid expenses and other current assets          2,113            1,525
Current assets                                     408,831          442,202
                                                                   
Property, plant and equipment (net)                271,199          222,615
Other noncurrent assets                            63,959           61,499
Total assets                                    $  743,989        $ 726,316
                                                                   
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses           $  101,158        $ 103,724
Current maturities of long-term debt               11,163           11,458
Deferred income taxes                              28,883           25,474
Current liabilities                                141,204          140,656
                                                                   
Long-term debt, less current maturities            59,309           64,762
Deferred income taxes and other liabilities        43,079           41,570
Stockholders' equity                               500,397          479,328
Total liabilities and stockholders' equity      $  743,989        $ 726,316
                                                                   

Contact:

Cal-Maine Foods, Inc.
Dolph Baker, 601-948-6813
Chairman, President and CEO
or
Timothy A. Dawson, 601-948-6813
Vice President and CFO
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