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

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 1,2012

November 26,2011

December 1,2012

November 26,2011
Dozen Eggs Sold (000) 238,064 218,132 448,125 426,228
Dozen Eggs Produced (000) 179,849 166,233 337,751 325,677
% Specialty Sales (dozen) 16.4 % 16.3 % 16.2 % 16.0 %

Net Average Selling Price (dozen)
$ 1.323 $ 1.272 $ 1.283 $ 1.196
Feed Cost (dozen) $ 0.574 $ 0.465 $ 0.547 $ 0.474
% Specialty Sales Dollars 22.9 % 22.7 % 23.2 % 23.1 %

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, . 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.




(In thousands, except per share amounts)

13 Weeks Ended

26 Weeks Ended

December 1,2012

November 26,2011

December 1,2012

November 26,2011
Net sales $ 328,870 $ 290,369 $ 601,798 $ 534,211
Gross profit 51,298 61,492 96,013 95,278
Operating income 20,366 35,673 35,963 41,630
Other income (expense) 2,031 335 1,135 (889 )
Income before income taxes 22,397 36,008 37,098 40,741
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


December 1, 2012

June 2, 2012
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
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

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