Calmaine Foods Inc (CALM) SEC Filing 10-Q Quarterly Report for the period ending Saturday, August 28, 2021

CAL-MAINE FOODS REPORTS FIRST QUARTER FISCAL 2022 RESULTS

RIDGELAND, Miss. (September 28, 2021) - Cal-Maine Foods, Inc. (NASDAQ: CALM) today reported results for the first quarter of fiscal 2022 (thirteen weeks) ended August 28, 2021.

Net sales in the first quarter of fiscal 2022 increased to $331.7 million compared to $292.8 million in the first quarter of fiscal 2021. The Company reported a net loss of $18.0 million, or $0.37 per basic and diluted common share, for the first quarter of fiscal 2022, compared to a net loss of
$19.4 million, or $0.40 per basic and diluted common share, for the first quarter of fiscal 2021.

Dolph Baker, chairman and chief executive officer of Cal-Maine Foods, Inc., stated, “Our results for the first quarter of fiscal 2022 reflect challenging market conditions. While we reported a
13.3 percent increase in sales compared to the prior-year period, our results were affected by lower conventional egg sale volumes that partially offset a higher average conventional egg selling price. Our shell egg average selling price increased to $1.24 per dozen in the first quarter from $1.08 per dozen in the prior-year period. Our first quarter gross margins reflect higher production costs primarily related to a significant increase in feed costs compared to the prior-year period.

“Retail demand for shell eggs has declined from the high levels we saw during the most restrictive shutdown phases of the pandemic. In the first quarter 2022, total dozens sold decreased 1.7 percent versus the prior-year period to 259.4 million. As restaurants started to return to normalized schedules and consumers began to resume out-of-home dining, food service demand showed improvement, resulting in a more balanced demand for shell eggs.

“Hen numbers reported by the USDA as of September 1, 2021, were 319.5 million, which is approximately the same as the prior year. The USDA also reported that the hatch from April 2021 through August 2021 increased 2.1 percent compared to the prior-year period. As of September 1, 2021, eggs in incubators were down 4.9 percent from last year.

"For the first quarter of fiscal 2022, specialty egg sales totaled $138.7 million, accounting for
43.0 percent of total shell egg revenue, compared with $129.2 million, or 45.2 percent, for the prior-year quarter. Specialty egg dozens sold were 28.9 percent of total dozens sold in the first quarter fiscal 2022, compared with 26.0 percent in the first quarter of fiscal 2021. Higher specialty egg revenue reflects an
8.9 percent increase in specialty dozens sold in the first quarter of fiscal 2022 compared to the prior-year period.

"An important competitive advantage for Cal-Maine Foods is our ability to meet our customers’ evolving needs with a favorable product mix of conventional, cage-free, organic and other specialty eggs and egg products. We have enhanced our efforts to provide free-range and pasture-raised eggs that meet consumers’ evolving choice preferences. While a small part of our current business, the free-range and pasture-raised eggs we produce and sell represent attractive offerings to a subset of consumers, and therefore our customers, and help us continue to serve as the trusted provider of quality food choices.

“Additionally, as customer demand has evolved in line with state requirements for
cage-free eggs, we continue to expand our production capacity in anticipation of future customer purchase decisions. As previously announced, at the beginning of the first quarter, we completed the purchase of the remaining 50 percent membership interest in Red River Valley Egg Farm, LLC, adding an additional 1.7 million cage-free laying hens and pullet capacity. Since 2008, we have invested more than
$482 million in facilities, equipment, and related operations to expand our cage-free production and distribution capabilities. Importantly, we have maintained a strong financial position with the flexibility to continue to make the necessary investments in our operations in line with expected demand.

“For the first quarter of fiscal 2022, we reported an operating loss of $39.7 million compared with an operating loss of $27.2 million for the same period in the prior fiscal year. Farm production costs per dozen produced for the first quarter of fiscal 2022 were up 25.4 percent compared to the first quarter of fiscal 2021, an increase primarily tied to higher feed costs, which were up 40.5 percent compared with