Cal-Maine Foods Reports Third Quarter Fiscal 2014 Results

  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
 
Press spacebar to pause and continue. Press esc to stop.