Calmaine Foods Inc (CALM) 10-Q Quarterly Report January 2020

Net sales for the second quarter of fiscal 2020 were $311.5 million, a 12.5 percent decrease, compared to $356.0 million for the second quarter of fiscal 2019. The Company reported net loss of $10.1 million, or $0.21 per basic and diluted share, for the second quarter of fiscal 2020, compared to net income of $21.8 million, or $0.45 per basic and diluted share, for the second quarter of fiscal 2019.

For the twenty-six weeks ended November 30, 2019, net sales were $552.7 million compared to $696.6 million for the prior-year period. The Company reported net loss of $55.8 million, or $1.15 per basic and diluted share, for the twenty-six weeks ended November 30, 2019, compared to net income of $34.2 million, or $0.71 per basic and diluted share for the year-earlier period.

Dolph Baker, chairman and chief executive officer of Cal-Maine Foods, Inc., stated, “We continued to experience challenging market conditions for the second quarter of fiscal 2020. While our sales volumes remained relatively flat in the second quarter compared to last year, our financial results reflect lower average selling prices compared with the same period of fiscal 2019. The Southeast large market average price for conventional eggs dropped 12.7 percent for the second quarter of fiscal 2020 compared to the second quarter of fiscal 2019. At the same time, our average sales price was down 11.5 percent, due to an unfavorable balance of egg supply and demand. Hen numbers, as reported by the USDA Chickens and Eggs report as of December 23, 2019, are 340.5 million, which is 4.6 more million hens than a year ago. The increase in the number of hens continues to contribute to the oversupply of eggs.

“During the second quarter of fiscal 2020, we lost a portion of our sales of non-specialty eggs to a major customer in the Southeast region, representing 4.6 percent of total shell egg dozens and 6.1 percent of non-specialty egg dozens for fiscal 2019. This did not materially affect sales during the second quarter of fiscal 2020. However, we expect our new capacity additions and our previously disclosed plans to decommission some older, less efficient facilities will help optimize our operations, improve our sales mix, and better align our production and sales within the region.

“Our specialty egg business remains a key component of our growth strategy in fiscal 2020. For the second quarter, specialty eggs, excluding co-pack sales, were $109.4 million accounting for 36.0 percent of our sales revenue, compared with $120.8 million, or 35.0 percent of sales revenue, in the second quarter of fiscal 2019. Average pricing for specialty eggs was down by 4.1 percent to $1.88 per dozen in the second quarter compared to the prior-year second quarter. Specialty dozens sold were also down 5.7 percent, as sales of specialty dozens were negatively affected by low conventional egg prices.

"We continue our efforts to position Cal-Maine Foods as an industry leader in meeting future customer requirements for cage-free eggs. We are preparing for the additional demand created by legislation in California, Washington and Oregon requiring cage-free eggs, as well as three other states with similar laws defining minimum space requirements. We have invested over $314 million to expand our cage-free production and continue to make progress with our expansion plans in Florida, Texas and Utah, which will provide significant additional processing, pullet and cage-free capacity upon completion.

“We continue to pursue our strategy to grow our business through selective acquisitions as well as focused expansion and conversion of our existing farms, based on a timeline to meet our customers’ needs. During the

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The following information was filed by Calmaine Foods Inc (CALM) on Monday, January 6, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Calmaine Foods Inc's 10-Q Quarterly Report:

M & A - Other Highlight
We expect our recent acquisition of Mahard effective October 20, 2019 will have a positive impact on our non-specialty shell egg volumes and continue growth of our customer base.

Financial - Expense Highlight
Advertising expense, which is a component of specialty egg expense, also contributed to the decrease in specialty egg expense for the twenty-six weeks ended November 30, 2019.
Financial - Expense Highlight
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 fiscal year 2019, as updated by our subsequent Quarterly Reports on Form 10-Q, (ii) the risks and hazards inherent in the shell egg business (including disease, pests, weather conditions, and potential for product 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.
Financial - Expense Highlight
In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.
Financial - Expense Highlight
The majority of the increase was accelerated amortization expense associated with selling flocks early due to market conditions, and higher labor costs.
Financial - Expense
The majority of the increase...Read more
Other - Other
An oversupply of eggs has...Read more
Other - Other
However, ongoing uncertainties and geopolitical...Read more
Financial - Earnings
NET INCOME (LOSS) ATTRIBUTABLE TO...Read more
Financial - Expense
Specialty egg expense typically fluctuates...Read more
Financial - Expense
Specialty egg expense typically fluctuates...Read more
Financial - Income
For thirteen weeks ended November...Read more
Financial - Income
Results for the thirteen weeks...Read more
Financial - Expense
Specialty egg expense decreased $1.6...Read more
Financial - Expense
Specialty egg expense decreased $3.3...Read more
Revenue - Product
This increase is primarily due...Read more
Other - Other
This standard will be effective...Read more
Financial - Expense
Other farm production cost per...Read more
Financial - Expense
Other farm production cost per...Read more
Financial - Income
For twenty-six weeks ended November...Read more
Financial - Expense
Payroll and overhead expense decreased...Read more
Revenue - Geography
This report contains numerous forward-looking...Read more
Other - Other
The guidance is effective for...Read more
Revenue - Product
Consequently, we generally experience lower...Read more
Financial - Expense
26 Index Other expenses increased...Read more
Financial - Expense
Other expenses increased $2.7 million...Read more
Revenue - Product
The volume increase accounted for...Read more
Other - Other
This standard will be effective...Read more
Revenue - Product
However, we expect our new...Read more
Revenue - Product
Net shell egg sales of...Read more
Revenue - Product
Net shell egg sales of...Read more
Other - Other
These hen numbers continue to...Read more
Revenue - Product
The total volume decrease for...Read more
Revenue - Product
Specialty shell eggs, which include...Read more
Financial - Expense
Feed cost per dozen for...Read more
Other - Other
As of November 30, 2019,...Read more
Other - Other
The guidance is effective for...Read more
Other - Other
Other adjustments, net decreased primarily...Read more
Financial - Income
Other, net for the thirteen...Read more
Financial - Income
Other, net for the twenty-six...Read more
Revenue - Product
The 11.5% decrease in average...Read more
Revenue - Product
The 20.6% decrease in average...Read more
Financial - Cash Flow
A decrease in egg selling...Read more
Legal - Other
Additionally, the credit agreement requires...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

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Calmaine Foods Inc provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32: Section 1350 Certification

Ticker: CALM
CIK: 16160
Form Type: 10-Q Quarterly Report
Accession Number: 0000016160-20-000011
Submitted to the SEC: Mon Jan 06 2020 7:04:09 AM EST
Accepted by the SEC: Mon Jan 06 2020
Period: Saturday, November 30, 2019
Industry: Agricultural Prod Livestock And Animal Specialties