Cal-Maine Foods(CALM) - 2025 Q1 - Quarterly Report

Part I. Financial Information This section details the company's financial performance, operational analysis, market risk, and internal controls Financial Statements The company's financial statements for Q1 FY2025 reflect substantial growth in assets, sales, and net income, driven by favorable market conditions and operational efficiency Condensed Consolidated Balance Sheets The balance sheet shows total assets increased to $2.39 billion, with corresponding rises in liabilities and stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands USD) | Account | August 31, 2024 | June 1, 2024 | | :--- | :--- | :--- | | Total Current Assets | $1,343,479 | $1,241,839 | | Property, Plant & Equipment, net | $960,070 | $857,234 | | Total Assets | $2,390,008 | $2,184,761 | | Total Current Liabilities | $325,415 | $227,743 | | Total Liabilities | $490,945 | $387,718 | | Total Stockholders' Equity | $1,899,063 | $1,797,043 | Condensed Consolidated Statements of Income The income statement reveals a significant profitability turnaround with net sales surging to $785.9 million and net income reaching $150.0 million Income Statement Summary (in thousands USD, except per share data) | Metric | Thirteen Weeks Ended Aug 31, 2024 | Thirteen Weeks Ended Sep 2, 2023 | | :--- | :--- | :--- | | Net Sales | $785,871 | $459,344 | | Gross Profit | $247,218 | $45,433 | | Operating Income (Loss) | $186,957 | $(6,757) | | Net Income Attributable to Cal-Maine | $149,976 | $926 | | Diluted EPS | $3.06 | $0.02 | Condensed Consolidated Statements of Cash Flows Operating cash flow significantly increased to $117.5 million, while investing activities, including an acquisition, led to a net decrease in cash Cash Flow Summary (in thousands USD) | Cash Flow Activity | Thirteen Weeks Ended Aug 31, 2024 | Thirteen Weeks Ended Sep 2, 2023 | | :--- | :--- | :--- | | Net cash provided by operations | $117,452 | $23,685 | | Net cash provided by (used in) investing | $(135,871) | $80,880 | | Net cash used in financing | $(37,792) | $(37,046) | | Net change in cash | $(56,211) | $67,519 | Notes to Condensed Consolidated Financial Statements Notes detail a significant business acquisition, revenue segmentation by product, ongoing legal proceedings, and a subsequent strategic investment - Effective June 28, 2024, the company acquired substantially all commercial shell egg production and processing assets of ISE America, Inc. for cash consideration of $111.5 million, including facilities with a capacity of approximately 4.7 million laying hens[23][24] Revenue by Product Category (in thousands USD) | Product Category | Q1 FY2025 | Q1 FY2024 | | :--- | :--- | :--- | | Conventional shell egg sales | $484,736 | $225,280 | | Specialty shell egg sales | $256,777 | $208,681 | | Egg products | $35,175 | $22,223 | | Other | $9,183 | $3,160 | | Total | $785,871 | $459,344 | - Subsequent to the quarter end, on September 9, 2024, the company completed a strategic investment in Crepini LLC, capitalizing a new venture, Crepini Foods LLC, with $6.75 million in cash for a 51% interest[48] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) MD&A highlights strong Q1 FY2025 performance driven by higher egg prices, increased sales volume, and reduced feed costs, maintaining robust liquidity Executive Overview The executive overview highlights a significant increase in gross profit driven by higher egg prices, increased sales volume, and lower feed costs - Net average selling price per dozen increased to $2.392 in Q1 FY2025 from $1.589 in the prior-year period, primarily due to HPAI outbreaks decreasing the national layer hen flock and thus reducing supply[66] - Total dozens sold increased by 13.5% compared to the prior year, boosted by the acquisitions of ISE and Fassio, which offset temporary production losses from HPAI outbreaks at Cal-Maine's Kansas and Texas facilities[67] - Farm production costs per dozen decreased by 11.7% year-over-year, mainly due to a 17.3% reduction in feed costs per dozen produced[68] Results of Operations Results of operations show net sales surged to $785.9 million, driven by price and volume increases, leading to expanded gross profit margins Shell Egg Sales Analysis (Q1 FY2025 vs Q1 FY2024, per dozen) | Category | Net Average Selling Price per Dozen | Dozens Sold (thousands) | | :--- | :--- | :--- | | Conventional | $2.424 (up 95.3%) | 199,989 (up 10.2%) | | Specialty | $2.335 (up 2.5%) | 109,990 (up 20.1%) | | All Shell Eggs | $2.392 (up 50.5%) | 309,979 (up 13.5%) | Farm Production Costs (per dozen produced, USD) | Cost Component | Q1 FY2025 | Q1 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Feed | $0.494 | $0.597 | (17.3)% | | Other | $0.421 | $0.439 | (4.1)% | | Total | $0.915 | $1.036 | (11.7)% | - Costs for outside egg purchases increased significantly due to a 71.5% rise in the average cost per dozen and a 67.5% increase in the volume of dozens purchased, necessitated by HPAI-related production losses[83] Liquidity and Capital Resources The company maintains strong liquidity with $1.0 billion in working capital, no long-term debt, and sufficient resources for future operations and capital projects - Working capital remained strong at $1.0 billion at the end of the quarter, with a current ratio of 4.1[94] - A cash dividend of approximately $50.0 million, or $1.019 per share, will be paid for the first fiscal quarter of 2025[100] Material Construction Projects (as of Aug 31, 2024, in thousands USD) | Project Type | Projected Completion | Projected Cost | Remaining Cost | | :--- | :--- | :--- | :--- | | Cage-Free Layer & Pullet Houses | Fiscal 2025 | $81,429 | $7,484 | | Dexter, MO Renovations | Fiscal 2025 | $6,204 | $1,500 | | Feed Mills | Fiscal 2026 | $16,593 | $12,028 | | Cage-Free Layer & Pullet Houses | Fiscal 2026 | $135,905 | $20,485 | | Total | | $240,131 | $41,497 | Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes in its exposure to market risk during the first quarter of fiscal 2025 from prior disclosures - There have been no material changes in the company's exposure to market risk during the thirteen weeks ended August 31, 2024[105] Controls and Procedures Management concluded the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - The company's CEO and CFO concluded that disclosure controls and procedures were effective as of August 31, 2024[106] - There were no material changes to the company's internal control over financial reporting during the quarter[107] Part II. Other Information This section covers legal proceedings, risk factors, equity sales, and exhibits Legal Proceedings The company refers to the detailed discussion of its legal proceedings as disclosed in Note 10 of the Notes to Condensed Consolidated Financial Statements - For information on legal proceedings, the report refers to Note 10 in the financial statements section of the Form 10-Q[108] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes in risk factors were reported compared to the company's 2024 Annual Report[109] Unregistered Sales of Equity Securities and Use of Proceeds During Q1 FY2025, the company repurchased 502 shares of common stock at an average price of $66.86 per share to satisfy tax withholding obligations Q1 FY2025 Share Repurchases (USD) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | 06/30/24 to 07/27/24 | 502 | $66.86 | | Total | 502 | $66.86 | Exhibits This section lists the exhibits filed with the quarterly report, including corporate documents and officer certifications - The report includes standard exhibits such as officer certifications and Inline XBRL data files[112]