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Net sales for the fourth quarter of fiscal 2017 were
For the fifty-three weeks ended June 3, 2017, net sales were
“The egg markets have been affected by increased production levels, as producers repopulated their flocks after the 2015 avian influenza (AI)-related laying hen losses, and the younger, more productive hen population has produced a higher number of eggs. Overall, market demand trends have not kept pace with these production levels. According to Nielsen data, retail customer demand for shell eggs has remained seasonal. However, relatively weak institutional and export demand have placed additional pressure on the egg markets. During the AI-related price spike, institutional egg customers reformulated their products to use fewer eggs, and while egg prices have since come down, these customers have not returned to their previous usage levels. While the USDA reports that egg export demand has improved since the beginning of fiscal 2017, U.S. egg exports are still below the peak levels prior to the AI outbreak. Together, these factors have created an oversupply and market prices have fallen accordingly. We do not expect to see any meaningful improvement until there is a better balance of supply and demand. However, we are encouraged by recent USDA reports indicating the chick hatch has been trending down for the last 10 out of 11 months, suggesting there may be a moderation in the size of the laying hen flock as we move forward.
“Specialty eggs, excluding co-pack sales, accounted for 22.7 percent of our total sales volume for the fourth quarter of fiscal 2017, compared with 23.3 percent for the same period a year ago. Specialty egg revenue was 42.0 percent of total shell egg revenues, compared with 40.2 percent for the fourth quarter of fiscal 2016. The average selling price for specialty eggs, which is typically higher and less volatile than conventional eggs, was down 9.3 percent over the fourth quarter of last year. For the year, specialty eggs accounted for 43.6 percent of total shell egg revenues, compared with 29.1 percent last year, and specialty egg prices were down 12.4 percent compared with fiscal 2016 prices.
“Our specialty egg business has continued to be a primary focus of our growth strategy. We have made significant investments across our operations to meet anticipated demand for cage-free eggs, as food service providers, national restaurant chains and major retailers, including our largest customers, have stated objectives to exclusively offer cage-free eggs by future specified dates. However, with the recent low prices of conventional eggs and typical seasonal fluctuations, demand trends for cage-free eggs slowed down in the fourth quarter, resulting in a higher supply of specialty eggs. We have adjusted our production levels to meet the demands of our customers who still prefer cage-free eggs, and we are well positioned to serve our customers as demand trends change. In addition to cage-free eggs, our product mix provides a wide variety of healthy choices for consumers including conventional, nutritionally enhanced and organic eggs.”
Baker continued, “In spite of challenging market conditions, we have remained focused on managing our operations in an efficient and responsible manner. We were able to benefit from lower grain costs for the past year due to favorable harvest results. For the fourth quarter of fiscal 2017, our feed costs per dozen were down 3.8 percent compared with a year ago, and our overall farm production costs per dozen were down 1.0 percent over the fourth quarter of fiscal 2016. For the year, feed costs per dozen were down 3.6 percent, while overall farm production costs per dozen were at the same level as the prior year, even with higher capital expenditures for recent conversion and other improvement projects. Looking ahead, we expect to have an adequate supply of our primary feed ingredients in fiscal 2018 while grain prices remain volatile.
“While we faced extraordinary market conditions in fiscal 2017, we
continued to demonstrate consistent execution of our growth strategy. We
will follow this same direction in the year ahead, and we believe
Pursuant to Cal-Maine Foods’ variable dividend policy, for 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. Following a quarter for which the Company does not
report net income, the Company will not pay a dividend with respect to
that quarter or for a subsequent profitable quarter until the Company is
profitable on a cumulative basis computed from the date of the last
quarter for which a dividend was paid. Therefore, the Company did not
pay a dividend with respect to the fourth quarter of fiscal 2016, or the
first through third quarters of fiscal 2017, and will not pay a dividend
for the fourth quarter of fiscal 2017. At June 3, 2017, cumulative
losses that must be recovered prior to paying a dividend were
Selected operating statistics for the fourth quarter and fiscal 2017 compared with the prior-year periods are shown below:
14 and 13 Weeks Ended | 53 and 52 Weeks Ended | |||||||||||||||
June 3, 2017 | May 28, 2016 | June 3, 2017 | May 28, 2016 | |||||||||||||
Dozen Eggs Sold (000) | 273,015 | 253,077 | 1,031,130 | 1,053,597 | ||||||||||||
Dozen Eggs Produced (000) | 237,006 | 198,950 | 870,252 | 819,307 | ||||||||||||
% Specialty Sales (dozen)* | 22.7 | % | 23.3 | % | 22.9 | % | 22.9 | % | ||||||||
% Specialty Sales (dollars)* | 42.0 | % | 40.2 | % | 43.6 | % | 29.1 | % | ||||||||
Net Average Selling Price (dozen) | $ | 0.973 | $ | 1.152 | $ | 1.007 | $ | 1.735 | ||||||||
Net Average Selling Price Specialty Eggs (dozen) | $ | 1.823 | $ | 2.011 | $ | 1.939 | $ | 2.213 | ||||||||
Feed Cost (dozen) | $ | 0.381 | $ | 0.396 | $ | 0.399 | $ | 0.414 | ||||||||
*Excludes co-pack specialty eggs |
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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) our ability to predict and meet
demand for cage-free and other specialty eggs, (v) risks, changes or
obligations that could result from our future acquisition of new flocks
or businesses and risks or changes that may cause conditions to
completing a pending acquisition not to be met, and (vi) adverse
results in pending litigation matters.
CAL-MAINE FOODS, INC. AND SUBSIDIARIES | |||||||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||||||
(Unaudited) |
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(In thousands, except per share amounts) |
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SUMMARY STATEMENTS OF OPERATIONS | |||||||||||||||
14 and 13 Weeks Ended | 53 and 52 Weeks Ended | ||||||||||||||
June 3, 2017 | May 28, 2016 | June 3, 2017 | May 28, 2016 | ||||||||||||
Net sales | $ | 274,584 | $ | 303,020 | $ | 1,074,513 | $ | 1,908,650 | |||||||
Gross profit | 12,006 | 40,680 | 45,550 | 648,074 | |||||||||||
Operating income (loss) | (38,291 | ) | (1,965 | ) | (132,094 | ) | 471,877 | ||||||||
Other income | 5,141 | 3,034 | 17,800 | 15,372 | |||||||||||
Income (loss) before income taxes and noncontrolling interest | (33,151 | ) | 1,068 | (114,294 | ) | 487,249 | |||||||||
Income (loss) before income taxes attributable to Cal-Maine Foods, Inc. | (33,011 | ) | 987 | (114,145 | ) | 485,243 | |||||||||
Net income (loss) | $ | (24,471 | ) | $ | (376 | ) | $ | (74,278 | ) | $ | 316,041 | ||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | (0.51 | ) | $ | (0.01 | ) | $ | (1.54 | ) | $ | 6.56 | ||||
Diluted | $ | (0.51 | ) | $ | (0.01 | ) | $ | (1.54 | ) | $ | 6.53 | ||||
Weighted average shares outstanding | |||||||||||||||
Basic | 48,329 | 48,247 | 48,362 | 48,195 | |||||||||||
Diluted | 48,329 | 48,247 | 48,362 | 48,365 | |||||||||||
SUMMARY BALANCE SHEETS |
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June 3, 2017 | May 28, 2016 | ||||||
ASSETS | |||||||
Cash and short-term investments | $ | 156,026 | $ | 389,545 | |||
Receivables | 64,509 | 67,448 | |||||
Income tax receivable | 52,691 | 11,830 | |||||
Inventories | 160,692 | 154,799 | |||||
Prepaid expenses and other current assets | 2,288 | 2,661 | |||||
Current assets | 436,206 | 626,283 | |||||
Property, plant and equipment (net) | 458,184 | 392,274 | |||||
Other noncurrent assets | 138,704 | 93,208 | |||||
Total assets | $ | 1,033,094 | $ | 1,111,765 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Accounts payable and accrued expenses | $ | 59,853 | $ | 67,131 | |||
Current maturities of long-term debt | 4,826 | 16,320 | |||||
Current liabilities | 64,679 | 83,451 | |||||
Long-term debt, less current maturities | 6,113 | 9,250 | |||||
Deferred income taxes and other liabilities | 117,809 | 101,703 | |||||
Stockholders' equity | 844,493 | 917,361 | |||||
Total liabilities and stockholders' equity | $ | 1,033,094 | $ | 1,111,765 | |||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170724005171/en/
Source:
Cal-Maine Foods, Inc.
Dolph Baker, 601-948-6813
Chairman,
President and CEO
or
Timothy A. Dawson, 601-948-6813
Vice
President and CFO