Cal-Maine Foods Reports Third Quarter Fiscal 2014 Results Business Wire JACKSON, Miss. -- March 31, 2014 Cal-Maine Foods, Inc. (NASDAQ: CALM) today reported resultsfor thethird quarter and nine months ended March 1, 2014. Net sales for the third quarter of fiscal 2014 were $395.5 million compared with net sales of $360.4 million for the third quarter of fiscal 2013. The Company reported net income of $42.9million, or $1.78 per basic share and $1.77 per diluted share, for the third quarter of fiscal 2014 compared with $30.6million, or $1.27per basic and diluted share, for the third quarter of fiscal 2013. For the first nine months of fiscal 2014, net sales were $1,069.3 million compared with net sales of $962.2 million for the prior-year period. The Company reported net income of $77.7 million, or $3.23perbasic share and $3.22 per diluted share, for the first nine months of fiscal 2014 compared with net income of $54.3million, or $2.26per basic and diluted share, for the year-earlier period. Dolph Baker, chairman, president and chief executive officer of Cal-Maine Foods, Inc., stated, “Cal-Maine Foods delivered a solid performance for the third quarter of fiscal 2014 with our net sales up 10 percent over the same period last year. The higher sales reflect both improved volumes through the holiday season and higher average selling prices compared with the third quarter of fiscal 2013. Consumer demand for shell eggs has been strong at the retail level for both generic and specialty eggs, supported by below average temperatures across the country. In addition, the egg products segment of the industry has continued to experience strong demand due to the introduction of breakfast items at many quick serve restaurants, as well as increased exports. “Sales of specialty eggs have increased throughout this fiscal year and were up 9.0 percent for the third quarter,” added Baker. “Specialty egg sales accounted for 17.4 percent of dozen eggs sold and 23.7 percent of total shell egg sales revenue for the third quarter of fiscal 2014, compared with 16.7 percent of dozen eggs sold and 23.6 percent of total shell egg sales revenue for the third quarter of fiscal 2013. We believe the performance of specialty eggs will continue to be a key driver of our growth as we capitalize on favorable consumer demand trends. We remain focused on identifying additional opportunities to market and sell specialty eggs and enhance our product mix.” “We are pleased with our improved operating performance during the third quarter. We were able to benefit from lower feed costs compared with the same period last year. Operating income was $46.6 million for the third quarter of fiscal 2014, up 51 percent compared with $30.9 million for the third quarter of fiscal 2013. Overall, our operations have continued to run well and our Board recently approved production expansion projects for our existing operations in Florida, Texas and Kentucky. These expansions will enhance our operating efficiencies and the additional capacity will allow us to purchase fewer eggs in the spot egg market where prices may be more expensive,” added Baker. As previously announced, on March 1, 2014, the Company completed the acquisition of 50 percent of the membership interests of Delta Egg Farm, LLC from Sunbest Foods of Iowa, Inc., a Moark, LLC affiliate. Delta Egg Farm, LLC was previously an unconsolidated joint venture of the Company. As a result of this transaction, Delta Egg Farm, LLC, is now a wholly owned subsidiary of the Company. For the third quarter of fiscal 2014, the Company recorded a non-recurring, non-cash gain of $4.0 million in other income for the excess of the purchase price over the carrying value of the Company’s 50 percent investment in the joint venture. This gain is non-taxable, and therefore resulted in a $1.5 million reduction to the Company’s income tax expense for the third quarter of fiscal 2014. Additionally, the Company recorded a $3.7 million decrease to deferred income tax liabilities related to the tax basis of the equity investment in the joint venture. Delta Egg’s assets include a feed mill and egg production complex with capacity for approximately 1.2 million laying hens, located near Delta, Utah, and an organic egg production complex with capacity for approximately 400,000 laying hens located near Chase, Kansas. Baker added, “We are pleased to assume the full ownership and management of Delta Egg Farm, LLC as we integrate these additional facilities into our operations. This transaction further advances our strategy to expand our capacity and grow our business through selective acquisitions. We look forward to the additional market opportunities ahead for Cal-Maine Foods in fiscal 2014.” For the third quarter of fiscal 2014, Cal-Maine Foods will pay a cash dividend of approximately $0.591per share to holders of its common and Class A common stock. Pursuant to Cal-Maine Foods’ variable dividend policy, in 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. No dividends are paid in a quarter for which the Company does not report net income. The amount paid could varyslightly based ontheamount of outstanding shares on the record date. The dividend is payable May 15,2014, to shareholders of record on April 30, 2014. Selected operating statistics for the third quarter and year to date periods of fiscal 2014 compared with the prior year periods are shown below: 13 Weeks Ended 39 Weeks Ended March 1, March 2, March 1, March 2, 2014 2013 2014 2013 Dozen Eggs 268,942 257,051 764,257 705,176 Sold (000) Dozen Eggs Produced 189,407 185,632 554,672 523,383 (000) % Specialty Sales 17.4 % 16.7 % 16.7 % 16.4 % (dozen) Net Average Selling $ 1.416 $ 1.351 $ 1.338 $ 1.308 Price (dozen) Feed Cost $ 0.459 $ 0.547 $ 0.495 $ 0.545 (dozen) % Specialty Sales 23.7 % 23.6 % 24.0 % 23.4 % Dollars Cal-Maine Foods, Inc. is primarily engaged in the production, grading, packing and saleof fresh shelleggs, including conventional, cage-free, organic and nutritionally-enhanced eggs. TheCompany, which is headquartered inJackson, Mississippi, is the largest producer and distributor of fresh shell eggs in the UnitedStates and sellsthemajority of its shell eggs in approximately 29states 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 statementsas 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 factorsthat 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 SECfilings (including its Annual Reportson Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K), (ii)therisks and hazards inherent in the shell egg business (including disease, pests, weather conditionsand 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 newflocks or businesses, and (v) adverse resultsin pending litigation matters. SEC filings may beobtained fromthe SEC or the Company’s website, www.calmainefoods.com. Readers are cautionednot to place undue reliance on forward-looking statementsbecause, while we believetheassumptions on whichthe forward-looking statements are based are reasonable, therecan be no assurance that these forward-looking statements will prove to be accurate. Further,the forward-looking statementsincluded herein are only made as of the respective dates thereof, or if nodate is stated, as of thedate hereof. Except as otherwise required by law, we disclaim any intentor obligation to updatepublicly these forward-looking statements, whether as aresult of new information, future events or otherwise. CAL-MAINE FOODS, INC. AND SUBSIDIARIES FINANCIAL HIGHLIGHTS SUMMARY STATEMENTS OF INCOME (Unaudited) (In thousands, except per share amounts) 13 Weeks Ended 39 Weeks Ended March 1, March 2, March 1, March 2, 2014 2013 2014 2013 Net sales $ 395,522 $ 360,373 $ 1,069,325 $ 962,171 Gross profit 91,895 67,047 211,473 163,060 Operating income 46,596 30,911 98,524 66,874 Other income 12,003 14,971 14,772 16,106 Income before 58,599 45,882 113,296 82,980 income taxes Net income $ 42,583 $ 30,551 $ 77,715 $ 54,256 Net income per common share: Basic $ 1.78 $ 1.27 $ 3.23 $ 2.26 Diluted $ 1.77 $ 1.27 $ 3.22 $ 2.26 Weighted average shares outstanding: Basic 24,047 24,035 24,061 23,966 Diluted 24,162 24,104 24,155 24,013 SUMMARY BALANCE SHEETS March 1, June 1, 2014 2013 ASSETS Cash and short-term investments $ 190,648 $ 182,888 Receivables 97,795 82,586 Inventories 149,296 147,993 Prepaid expenses and other current assets 2,170 1,414 Current assets 439,909 414,881 Property, plant and equipment (net) 306,528 266,008 Other noncurrent assets 50,640 64,738 Total assets $ 797,077 $ 745,627 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued expenses $ 86,550 $ 99,827 Current maturities of long-term debt 10,577 10,373 Deferred income taxes 31,571 19,995 Current liabilities 128,698 130,195 Long-term debt, less current maturities 53,384 54,647 Deferred income taxes and other liabilities 42,140 42,741 Stockholders' equity 572,855 518,044 Total liabilities and stockholders' equity $ 797,077 $ 745,627 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
Cal-Maine Foods Reports Third Quarter Fiscal 2014 Results
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