Cal-Maine Foods Inc. Files 10-Q for Period Ending December 2, 2023

TL;DR

<b>Cal-Maine Foods Inc. filed its quarterly report (10-Q) for the period ending December 2, 2023, detailing its financial performance and operational status.</b>

AI Summary

CAL-MAINE FOODS INC (CALM) filed a Quarterly Report (10-Q) with the SEC on January 3, 2024. Cal-Maine Foods Inc. filed a 10-Q report for the period ending December 2, 2023. The filing covers the second quarter of fiscal year 2024. The company's fiscal year ends on June 1st. The filing was submitted on January 3, 2024. The company's principal executive offices are located in Ridgeland, MS.

Why It Matters

For investors and stakeholders tracking CAL-MAINE FOODS INC, this filing contains several important signals. This 10-Q filing provides investors with the latest financial data and operational insights into Cal-Maine Foods' performance during the second quarter of fiscal year 2024. Understanding the details within this report is crucial for assessing the company's current financial health, market position, and future prospects in the egg production industry.

Risk Assessment

Risk Level: — CAL-MAINE FOODS INC shows moderate risk based on this filing. The filing is a standard quarterly report (10-Q) which typically contains routine financial and operational information, but does not indicate any immediate or severe financial distress or significant positive developments.

Analyst Insight

Review the detailed financial statements and management's discussion and analysis within the 10-Q to understand Cal-Maine Foods' performance trends and identify any emerging risks or opportunities.

Key Numbers

• 2023-12-02 — Period End Date (Fiscal period covered by the 10-Q filing)
• 2024-01-03 — Filing Date (Date the 10-Q was filed with the SEC)
• 0601 — Fiscal Year End (Company's fiscal year end date)

Key Players & Entities

• CAL-MAINE FOODS INC (company) — Filer name
• 2023-12-02 (date) — Period of report
• 2024-01-03 (date) — Filed as of date
• 0000016160 (company) — Central Index Key
• Ridgeland, MS (location) — Business address city and state

Forward-Looking Statements

• CAL-MAINE FOODS INC will likely maintain a stable share count in the near term. (CAL-MAINE FOODS INC) — medium confidence, target: 2024-06-01

FAQ

Industry Context

Cal-Maine Foods is a major producer and distributor of shell eggs in the United States. The company operates within the highly competitive and often volatile agricultural sector, influenced by factors such as feed costs, avian health, and consumer demand.

Regulatory Implications

As a publicly traded company, Cal-Maine Foods is subject to the reporting requirements of the Securities and Exchange Commission (SEC), including the regular filing of Form 10-Q for quarterly financial and operational updates.

What Investors Should Do

1. Analyze the financial statements (balance sheet, income statement, cash flow) for the quarter ended December 2, 2023.
2. Review the 'Management's Discussion and Analysis of Financial Condition and Results of Operations' section for insights into performance drivers and outlook.
3. Examine any disclosed risk factors or legal proceedings that may impact the company's future operations or financial results.

Key Dates

• 2023-12-02: Period End Date — Marks the end of the reporting period for the 10-Q filing.
• 2024-01-03: Filing Date — Date the 10-Q was officially submitted to the SEC.

Year-Over-Year Comparison

This filing represents the most recent quarterly update for Cal-Maine Foods Inc., providing current financial and operational data compared to previous periods.

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value per share CALM The NASDAQ
• $1.8 million — y. The Company recognized goodwill of $1.8 million as a result of the acquisition. Index

Filing Documents

• calm2024q2.htm (10-Q) — 1313KB
• exhibit311.htm (EX-31.1) — 13KB
• exhibit312.htm (EX-31.2) — 13KB
• exhibit32.htm (EX-32) — 8KB
• 0001562762-24-000004.txt (&nbsp;) — 6020KB
• calm-20231202.xsd (EX-101.SCH) — 35KB
• calm-20231202_cal.xml (EX-101.CAL) — 54KB
• calm-20231202_def.xml (EX-101.DEF) — 140KB
• calm-20231202_lab.xml (EX-101.LAB) — 485KB
• calm-20231202_pre.xml (EX-101.PRE) — 261KB
• calm2024q2_htm.xml (XML) — 1068KB

Financial Statements

Financial Statements Condensed Consolidated Balance Sheets - December 2, 2023 and June 3, 2023 3 Condensed Consolidated Statements of Income - Thirteen and Twenty -six Weeks Ended December 2, 2023 and November 26, 2022 4 Condensed Consolidated Statements of Comprehensive Income - Thirteen and Twenty -six Weeks Ended December 2, 2023 and November 26, 2022 5 Condensed Consolidated Statements of Cash Flows - Twenty-six Weeks Ended December 2, 2023 and November 26, 2022 6 Notes to Condensed Consolidated Financial Statements 7 Item 2.

Management's Discussion and Analysis of

Management's Discussion and Analysis of Financial Condition and Results of Operations 19 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 29 Item 4.

Controls and Procedures

Controls and Procedures 29 Part II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 30 Item 1A.

Risk Factors

Risk Factors 30 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 30 Item 6. Exhibits 30

Signatures

Signatures 31 Index 3 PART I. FINANCIAL INFORMATION ITEM 1.

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS Cal-Maine Foods, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands, except for par value amounts) (Unaudited) December 2, 2023 June 3, 2023 Assets Current assets: Cash and cash equivalents $ 361,783 $ 292,824 Investment securities available-for-sale 206,045 355,090 Trade and other receivables, net 165,391 120,247 Income tax receivable 33,771 66,966 Inventories 287,270 284,418 Prepaid expenses and other current assets 9,673 5,380 Total current assets 1,063,933 1,124,925 Property, plant & equipment, net 815,468 744,540 Investments in unconsolidated entities 14,370 14,449 Goodwill 45,776 44,006 Intangible assets, net 17,074 15,897 Other long-term assets 10,184 10,708 Total Assets $ 1,966,805 $ 1,954,525 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 98,144 $ 82,590 Accrued wages and benefits 20,164 38,733 Accrued income taxes payable 8,445 8,288 Dividends payable 5,682 37,130 Accrued expenses and other liabilities 21,352 15,990 Total current liabilities 153,787 182,731 Other noncurrent liabilities 30,571 9,999 Deferred income taxes, net 158,483 152,212 Total liabilities 342,841 344,942 Commitments and contingencies - see Note 10 — — Stockholders' equity: Common stock ($ 0.01 par value): Common stock - authorized 120,000 shares, issued 70,261 shares 703 703 Class A convertible common stock - authorized and issued 4,800 shares 48 48 Paid-in capital 74,214 72,112 Retained earnings 1,583,071 1,571,112 Accumulated other comprehensive loss, net of tax ( 1,614 ) ( 2,886 ) Common stock in treasury at cost – 26,078 shares at December 2, 2023 and 26,077 shares at June 3, 2023 ( 30,014 ) ( 30,008 ) Total Cal-Maine Foods, Inc. stockholders' equity 1,626,408 1,611,081 Noncontrolling interest in consolidated entity ( 2,444 ) ( 1,498 ) Total stockholders' equity 1,623,964 1,609,583 To

financial statements

financial statements and accompanying notes. Actual results could differ from those estimates. Investment Securities The Company has determined that its debt securities are available-for-sale investments. We classify these securities as current because the amounts invested are available for current operations. Available -for-sale securities are carried at fair value, based on quoted market prices as of the balance sheet date, with unrealized gains and losses recorded in other comprehensive income. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity and is recorded in interest income. The Company regularly evaluates changes to the rating of its debt securities by credit agencies and economic conditions to assess and record any expected credit losses through allowance for credit losses, limited to the amount that fair value was less than the amortized cost basis. Investments in mutual funds are recorded at fair value and are classified as "Other long-term assets" in the Company's Condensed Consolidated Balance Sheets. Unrealized gains and losses for equity securities are recorded in other income (expenses) as Other, net in the Company's Condensed Consolidated Statements of Income. The cost basis for realized gains and losses on available-for-sale securities is determined by the specific identification method. Gains and losses are recognized in other income (expenses) as Other, net in the Company's Condensed Consolidated are recorded in interest income. Trade Receivables Trade receivables are stated at their carrying values, which include a reserve for credit losses. As of December 2, 2023 and June 3, 2023, reserves for credit losses were $ 536 thousand and $ 579 tho

business

business acquisitions, which include franchise rights, customer relationships, non-compete agreements, trademark and right of use intangibles. They are amortized over their estimated useful lives of 5 to 15 years. The gross cost and accumulated amortization of intangible assets are removed when the recorded amounts are fully amortized and the asset is no longer in use or the contract has expired. When certain events or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts. Indefinite life assets are recorded at fair value in business acquisitions and represents water rights. They are not amortized, but are reviewed for impairment at least annually or more frequently if impairment indicators arise. Dividends Payable We accrue dividends at the end of each quarter according to the Company's dividend policy adopted by its Board of Directors. The Company pays a dividend to shareholders of its Common Stock and Class A Common Stock on a quarterly basis for each quarter for which the Company reports net income attributable to Cal-Maine Foods, Inc. computed in accordance with GAAP in an amount equal to one-third (1/3) of such quarterly income. Dividends are paid to shareholders of record as of the 60th day following the last day of such quarter, except for the fourth fiscal quarter. For the fourth quarter, the Company pays dividends to shareholders of record on the 65th day after the quarter end. Dividends are payable on the 15th day following the record date. Following a quarter for which the Company does not report net income attributable to Cal-Maine Foods, Inc., the Company will not pay a dividend for a subsequent profitable quarter until the Company is profitable on a cumulative basis computed from the date of the most recent quarter for which a divid

financial statements

financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. The Company expenses the costs of litigation as they are incurred. Index 9 New Accounting Pronouncements and Policies No new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our Consolidated Financial Statements. Note 2 - Acquisition Effective September 30, 2023 , the Company acquired the assets of Fassio Egg Farms, Inc. ("Fassio"), related to its commercial shell egg production and processing business. Fassio owns and operates commercial shell egg production and processing facilities with a capacity at the time of acquisition of approximately 1.2 million laying hens, primarily cage-free, a feed mill, pullets, a fertilizer production and composting operation and land located in Erda, Utah, outside Salt Lake City. The Company accounted for the acquisition as a business combination. The following table summarizes the consideration paid for Fassio and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date (in thousands): Cash consideration paid $ 53,746 Fair value of contingent consideration 1,000 Total estimated purchase consideration 54,746 Recognized amounts of identifiable assets acquired and liabilities assumed Inventory $ 6,164 Property, plant and equipment 44,540 Intangible assets 2,272 Other long-term assets 143 Liabilities assumed ( 143 ) Total identifiable net assets 52,9

business

business meeting certain return on profitability milestones over a three-year period, commencing on the date of the acquisition. The fair value of the contingent consideration is estimated using a discounted cash flow model. Key assumptions and unobservable inputs that require significant judgement used in the estimate include weighted average cost of capital, egg prices, projected revenue and expenses over which the contingent considered is measured, and the probability assessments with respect to the likelihood of achieving the forecasted projections. A range of potential outcomes cannot be reasonably estimated due to market volatility of egg prices. Goodwill represents the excess of the purchase price of the acquired

business

business over the acquisition date fair value of the net assets acquired. Goodwill recorded in connection with the Fassio acquisition is primarily attributable to improved efficiencies from integrating the assets of Fassio with the operations of the Company. The Company recognized goodwill of $1.8 million as a result of the acquisition. Index 10 Note 3 - Investment Securities The following represents the Company's investment securities as of December 2, 2023 and June 3, 2023 (in thousands): December 2, 2023 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Municipal bonds $ 6,141 $ — $ 108 $ 6,033 Commercial paper 2,791 — 2 2,789 Corporate bonds 98,202 — 535 97,667 Certificates of deposits 1,125 — 6 1,119 US government and agency obligations 88,470 — 116 88,354 Asset backed securities 10,045 38 — 10,083 Total current investment securities $ 206,774 $ 38 $ 767 $ 206,045 Mutual funds $ 2,190 $ — $ 24 $ 2,166 Total noncurrent investment securities $ 2,190 $ — $ 24 $ 2,166 June 3, 2023 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Municipal bonds $ 16,571 $ — $ 275 $ 16,296 Commercial paper 56,486 — 77 56,409 Corporate bonds 139,979 — 1,402 138,577 Certificates of deposits 675 — — 675 US government and agency obligations 101,240 — 471 100,769 Asset backed securities 13,459 — 151 13,308 Treasury bills 29,069 — 13 29,056 Total current investment securities $ 357,479 $ — $ 2,389 $ 355,090 Mutual funds $ 2,172 $ — $ 91 $ 2,081 Total noncurrent investment securities $ 2,172 $ — $ 91 $ 2,081 Available-for-sale Proceeds from sales and maturities of investment securities available-for-sale were $ 196.1 million and $ 65.3 million during the twenty-six weeks ended December 2, 2023 and November 26, 2022, respectively. Gross realized gains for

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