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8-K - FORM 8-K - CAL-MAINE FOODS INCv351101_8k.htm

 

Exhibit 99.1

 

Contacts: Dolph Baker, Chairman, President and CEO
    Timothy A. Dawson, Vice President and CFO
    (601) 948-6813

 

CAL-MAINE FOODS, INC. REPORTS FOURTH QUARTER

AND FISCAL 2013 RESULTS

 

JACKSON, Miss. (July 29, 2013) – Cal-Maine Foods, Inc. (NASDAQ:CALM) today announced financial results for the fourth quarter and fiscal year ended June 1, 2013.

 

For the fourth quarter of fiscal 2013, net sales were $325.9 million compared with net sales of $275.2 million for the fourth quarter a year ago. The Company reported a net loss of $3.8 million, or $0.16 per basic share, for the fourth quarter of fiscal 2013 compared with net earnings of $37.3 million, or $1.56 per basic share, for the same period last year. Results for the fourth quarter of 2013 include a one-time charge of $17.0 million, or $0.71 per basic share, after tax, related to the settlement of a direct purchaser class claim against the Company. Results for the fourth quarter of fiscal 2012 included a one-time gain of approximately $27.0 million, or $1.12 per share, after tax, as a result of a distribution from Eggland’s Best, Inc. related to the joint venture between Eggland’s Best, Inc. and Land O’Lakes, Inc., announced on May 1, 2012. Excluding these one-time items, net earnings were $13.2 million, or $0.55 per basic share, for the fourth quarter of fiscal 2013 compared with $10.3 million, or $0.44 per basic share, for the fourth quarter of fiscal 2012. The fourth quarter of fiscal 2013 had 13 weeks compared with 14 weeks in the prior year period.

 

For the fiscal year 2013, net sales were $1.3 billion compared with net sales of $1.1 billion for fiscal 2012. The Company reported net income of $50.4 million, or $2.10 per basic share, for fiscal 2013 compared with net income of $89.7 million, or $3.76 per basic share, in fiscal 2012. Excluding the one-time items described above for the fourth quarter of each fiscal year, net income for fiscal 2013 was $67.5 million, or $2.81 per basic share, compared with $62.7 million, or $2.64 per basic share, in fiscal 2012. Fiscal 2013 had 52 weeks compared with 53 weeks in fiscal 2012.

 

As announced on July 23, 2013, the Company reached a settlement in an egg antitrust class action claim, whereby the Company has agreed to make a single payment of $28.0 million, which amounts to a charge of $17.0 million, or $0.71 per basic share, after tax. Dolph Baker, chairman, president and chief executive officer of Cal-Maine Foods, Inc., stated, “We believe we have negotiated a settlement for an amount that is in the best interest of our Company and our shareholders. While the one-time charge related to the settlement affected our fourth quarter and fiscal 2013 financial results, we had a solid operating performance and we do not expect any material future impact on our operations. With this distraction behind us, we will focus on our business strategy and the opportunities ahead in fiscal 2014.”

 

Commenting on the results for the fourth quarter and fiscal 2013, Baker said, “We were pleased with our results with our fourth quarter sales up 18 percent over the same period a year ago. These results reflect higher volumes related to acquisitions with a 6 percent increase in eggs produced and sold compared with the same period a year ago. Notably, we achieved this growth even though we had an extra week of sales in the previous year’s fourth quarter.

 

“For the year, we were pleased to exceed our previous year’s sales record with $1.3 billion in sales,” Baker noted. “We experienced strong demand for shell eggs throughout the year from our retail, egg product and export customers. Sales of specialty eggs accounted for 16.4 percent of our total number of eggs sold and 23.7 percent of our shell egg sales revenue for the year. Specialty eggs have been an important area of strategic focus for Cal-Maine and, as a result, we achieved a 7.8 percent increase in specialty egg volume for the year and a 6.1 percent increase in specialty egg selling prices. Overall, our average selling prices were up 7.9 percent in fiscal 2013. We expect specialty eggs, which have a higher retail selling price, will continue to gain market share over regular eggs as more consumers are willing to pay for these premium products.

 

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CAL-MAINE FOODS, INC. POST OFFICE BOX 2960 JACKSON, MISSISSIPPI 39207
  PHONE  601-948-6813   FAX  601-969-0905

 

 
 

 

CALM Reports Fourth Quarter and Fiscal 2013 Results

Page 2

July 29, 2013

 

“Our operations have continued to run well in fiscal 2013, in spite of experiencing higher and more volatile feed costs primarily related to a tight national corn supply. For the year, our feed costs per dozen were up 15 percent compared with fiscal 2012, and the higher input costs adversely affected our gross profit margins. In spite of these cost pressures, our management team has continued to focus on making Cal-Maine an efficient, low-cost producer with consistent operating results. Looking ahead, we are cautiously optimistic about the yield of this year’s corn and soybean crops which could provide some relief to our feed costs in fiscal 2014.

 

“Overall, we are very pleased with Cal-Maine’s performance in fiscal 2013 and our ability to execute our strategy in the marketplace. We have worked hard this year to integrate the operations of both the Pilgrim’s Pride and Maxim egg operations and we are pleased with the operating synergies we have achieved from these acquisitions. In addition, we have the opportunity to leverage the additional capacity from these facilities and expand our market reach.

 

“We have many reasons to be optimistic for continued growth in the year ahead. Our strong balance sheet provides us with the flexibility to pursue our growth strategy. We will look for additional strategic acquisition opportunities that meet our criteria and add value to our operations. And, we will continue to manage our operations efficiently and identify ways to improve our product mix and expand our sales of specialty eggs. Together, we believe these efforts will reward both our customers and shareholders in fiscal 2014 and beyond,” Baker concluded.

 

Pursuant to Cal-Maine’s 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. Therefore, the Company will not pay a dividend for the fourth quarter of fiscal 2013. Cal-Maine paid a total of $18.1 million in dividends, or $0.75 per share, in fiscal 2013.

 

Selected operating statistics for the fourth quarter and fiscal 2013 compared with the prior-year periods are shown below:

 

   13 & 14 Weeks Ended   52 & 53 Weeks Ended 
   June 1, 2013   June 2, 2012   June 1, 2013   June 2, 2012 
Dozens eggs sold (000)   243,280    228,811    948,456    884,274 
Dozens egg produced (000)   181,004    171,190    704,388    662,975 
                     
% Specialty sales (dozen)   16.4%   16.5%   16.4%   16.3%
                     
Net average selling price (dozen)  $1.280   $1.152   $1.301   $1.205 
Feed cost (dozen)  $0.527   $0.480   $0.540   $0.469 
                     
% Specialty sales (dollars)   24.5%   25.8%   23.7%   24.0%

 

As previously disclosed, on August 10, 2012, and November 15, 2012, the Company purchased the commercial egg assets of Pilgrim’s Pride Corporation and Maxim Production Co., Inc., respectively. On a comparable basis, excluding the acquisitions, for the thirteen-week period ended June 1, 2013, net sales were $288.0 million and dozens sold were 210.5 million, and for the fifty-two week period ended June 1, 2013, net sales were $1,187.1 million and dozens sold were 866.0 million.

 

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.

  

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CALM Reports Fourth Quarter and Fiscal 2013 Results

Page 3

July 29, 2013

 

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 Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 2, 2012, as updated by our subsequent 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.

 

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CALM Reports Fourth Quarter and Fiscal 2013 Results

Page 4

July 29, 2013

 

CAL-MAINE FOODS, INC. AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS

 

SUMMARY STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)

 

   13 and 14 Weeks Ended   52 and 53 Weeks Ended 
   June 1,
2013
   June 2,
2012
   June 1,
2013
   June 2,
2012
 
Net sales  $325,933   $275,245   $1,288,104   $1,113,116 
Gross profit   51,489    41,356    214,549    201,783 
Operating income (loss)   (7,281)   12,083    59,593    88,652 
Other income (expense)   (131)   45,678    15,975    50,425 
Income before income taxes and noncontrolling interest   (7,412)   57,761    75,568    139,077 
Income before income taxes attributable to Cal-Maine Foods, Inc.   (7,609)   57,620    75,230    138,845 
                     
Net income  $(3,833)  $37,256   $50,423   $89,735 
                     
Net income per share:                    
Basic  $(0.16)  $1.56   $2.10   $3.76 
Diluted  $(0.16)  $1.56   $2.10   $3.75 
Weighted average shares outstanding                    
Basic   24,035    23,888    23,983    23,875 
Diluted   24,035    23,925    24,044    23,942 

 

SUMMARY BALANCE SHEETS

 

   June 1,
2013
   June 2,
2012
 
ASSETS          
Cash and short-term investments  $182,888   $260,751 
Receivables   82,586    62,768 
Inventories   147,993    117,158 
Prepaid expenses and other current assets   1,414    1,525 
Current assets   414,881    442,202 
           
Property, plant and equipment (net)   266,008    222,615 
Other noncurrent assets   64,738    61,499 
Total assets  $745,627   $726,316 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
Accounts payable and accrued expenses  $99,827   $91,633 
Current maturities of long-term debt   10,373    11,458 
Deferred income taxes   19,995    25,474 
Current liabilities   130,195    115,183 
           
Long-term debt, less current maturities   54,647    64,762 
Deferred income taxes and other liabilities   42,741    41,570 
Stockholders' equity   518,044    479,328 
Total liabilities and stockholders' equity  $745,627   $726,316 

 

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