Cal-Maine Foods, Inc. Reports Second Quarter Fiscal 2013 Results
Cal-Maine Foods, Inc. Reports Second Quarter Fiscal 2013 Results
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 $0.199 per share to holders of its common and Class A common stock. The amount paid could vary slightly based on the amount of outstanding shares on the record date. The dividend is payable February 14, 2013, to shareholders of record on January 30, 2013.
Selected operating statistics for the second quarter and year to date periods of fiscal 2013 compared with the prior year periods are shown below:
|13 Weeks Ended||26 Weeks Ended|
|Dozen Eggs Sold (000)||238,064||218,132||448,125||426,228|
|Dozen Eggs Produced (000)||179,849||166,233||337,751||325,677|
|% Specialty Sales (dozen)||16.4||%||16.3||%||16.2||%||16.0||%|
Net Average Selling Price (dozen)
|Feed Cost (dozen)||$||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,www.calmainefoods.com.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.
SUMMARY STATEMENTS OF INCOME
(In thousands, except per share amounts)
13 Weeks Ended
26 Weeks Ended
|Other income (expense)||2,031||335||1,135||(889||)|
|Income before income taxes||22,397||36,008||37,098||40,741|
|Net income per common share:|
|Weighted average shares outstanding:|
SUMMARY BALANCE SHEETS
|Cash and short-term investments||$||163,083||$||260,751|
|Prepaid expenses and other current assets||2,113||1,525|
|Property, plant and equipment (net)||271,199||222,615|
|Other noncurrent assets||63,959||61,499|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Accounts payable and accrued expenses||$||101,158||$||103,724|
|Current maturities of long-term debt||11,163||11,458|
|Deferred income taxes||28,883||25,474|
|Long-term debt, less current maturities||59,309||64,762|
|Deferred income taxes and other liabilities||43,079||41,570|
|Total liabilities and stockholders' equity||$||743,989||$||726,316|
Cal-Maine Foods, Inc.
Dolph Baker, 601-948-6813
Chairman, President and CEO
Timothy A. Dawson, 601-948-6813
Vice President and CFO
KEYWORDS: United States North America Mississippi
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