Calmaine Foods Inc (CALM) 10-Q Quarterly Report Mon Mar 30 2020

Net sales for the third quarter of fiscal 2020 were $345.6 million, a 10.0 percent decrease, compared to $384.0 million for the third quarter of fiscal 2019. The Company reported net income of $13.7 million, or $0.28 per basic and diluted share, for the third quarter of fiscal 2020, compared to net income of $39.8 million, or $0.82 per basic and diluted share, for the third quarter of fiscal 2019.

For the thirty-nine weeks ended February 29, 2020, net sales were $898.3 million compared to $1,080.6 million for the prior-year period. The Company reported net loss of $42.1 million, or $0.87 per basic and diluted share, for the thirty-nine weeks ended February 29, 2020, compared to net income of $74.0 million, or $1.53 per basic and $1.52 diluted share for the year-earlier period.

Dolph Baker, chairman and chief executive officer of Cal-Maine Foods, Inc., stated, “Our results for the third quarter of fiscal 2020 reflect more challenging market conditions than we experienced for the same period last year. However, we were pleased with our ability to execute our strategy in this environment and return to profitability for the quarter. While our sales volumes were in line with last year, our overall sales revenue was down due to the lower average selling prices compared with the same period of fiscal 2019. The Southeast large market average price for conventional eggs dropped 13.8 percent for the third quarter of fiscal 2020 compared to the third quarter of fiscal 2019, while our average sales price was down 10.0 percent. Since the end of the third quarter, market prices have moved significantly higher to record levels, and we expect to see continued price volatility through the end of our fiscal year.

"For the third quarter, specialty eggs, excluding co-pack sales, were $117.7 million, accounting for 35.0 percent of our sales revenue, compared with $131.1 million, or 35.0 percent of sales revenue, in the third quarter of fiscal 2019. Average pricing for specialty eggs was down by 3.4 percent to $1.89 per dozen in the third quarter compared to the prior-year third quarter. Specialty dozens sold were also down 7.1 percent, as sales of specialty dozens were negatively affected by low conventional egg prices.

“An unfavorable balance of egg supply and demand continued to adversely affect market prices during the third quarter and year-to-date periods. However, hen numbers, as reported by the USDA Chickens and Eggs report on March 23, 2020, were 330.0 million, which is 11.8 million less hens than reported a year ago. The USDA also reported that hatch rates decreased 4.95 percent for the last three consecutive months through February 2020, including a 8.0 percent decrease in February, as compared to the same period in the prior year.

"We have worked hard to prepare Cal-Maine Foods to meet future customer requirements and the expected additional demand for cage-free eggs. This demand has been supported 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 are committed to meeting the demands of our customers, and we have invested over $344 million to expand our cage-free production starting with our first facility in 2008. We are pleased with our progress to date, with expansion projects underway in Florida, Texas and Utah, which will provide significant additional processing, pullet and cage-free capacity upon completion.

“Our operations ran well during the third quarter, and we have remained focused on efficient and responsible management of our production facilities. Overall, our farm production costs per dozen were down 1.6 percent over the third quarter last year, reflecting a 3.6 percent drop in feed costs offset by slight increases in other farm production costs. According to USDA reports, current supplies of corn and soybeans are favorable heading into the

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The following information was filed by Calmaine Foods Inc (CALM) on Monday, March 30, 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:

Financial - Expense Highlight
Advertising expense, which is a component of specialty egg expense, also contributed to the decrease in specialty egg expense for the thirty-nine weeks ended February 29, 2020.

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.
M & A - Other Highlight
The recent acquisition of Mahard had a positive impact on our non-specialty shell egg volumes and continued growth of our customer base.
Financial - Cash Flow Highlight
The net decrease in investment securities funded negative cash flows from operations as well as ongoing construction projects and the acquisition of Mahard.
Financial - Expense
Farm production costs for the...Read more
Financial - Expense
Specialty egg expense typically fluctuates...Read more
Financial - Expense
Specialty egg expense typically fluctuates...Read more
Other - Other
However, current ongoing uncertainties and...Read more
Financial - Expense
Specialty egg expense decreased $1.6...Read more
Financial - Expense
Specialty egg expense decreased $5.0...Read more
Financial - Income
For thirteen weeks ended February...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
Other - Other
During the third quarter and...Read more
Financial - Income
For thirty-nine weeks ended February...Read more
Financial - Expense
Farm production costs for the...Read more
Other - Other
According to USDA reports, current...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
Other expenses increased $1.0 million...Read more
Financial - Expense
Other expenses increased $3.7 million...Read more
Revenue - Product
The volume increase accounted for...Read more
Revenue - Product
This increase is primarily due...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
Revenue - Product
This increase is primarily due...Read more
Revenue - Product
The total volume decrease for...Read more
Revenue - Product
Specialty shell eggs, which include...Read more
Financial - Earnings
NET INCOME ATTRIBUTABLE TO NONCONTROLLING...Read more
Other - Other
The guidance is effective for...Read more
Revenue - Product
The 10.0% decrease in average...Read more
Revenue - Product
The 16.8% decrease in average...Read more
Financial - Cash Flow
A decrease in egg selling...Read more
Financial - Income
Other, net for the thirty-nine...Read more
Legal - Other
Additionally, the credit agreement requires...Read more
Financial - Earnings
The decrease of $666,000 is...Read more
Financial - Earnings
The decrease of $3.9 million...Read more
Other - Other
We are following published guidelines...Read more
Other - Other
Since the beginning of our...Read more
Revenue - Product
For the third quarter of...Read more

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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: 0000016160-20-000056
Submitted to the SEC: Mon Mar 30 2020 7:23:43 AM EST
Accepted by the SEC: Mon Mar 30 2020
Period: Saturday, February 29, 2020
Industry: Agricultural Prod Livestock And Animal Specialties