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.