April 3, 2014

Cal-maine's Q3 net sales increased 10%, driven by specialty eggs

 

Cal-Maine Foods, Inc., the largest producer and distributor of fresh shell eggs in the United States, delivered a solid performance for the third quarter of fiscal 2014 with net sales up 10% over the same period last year, according to Dolph Baker, chairman, president and chief executive officer.

The higher sales reflect both improved volumes through the holiday season and higher average selling prices compared with the third quarter of fiscal 2013. Cal-Maine Foods, Inc. is primarily engaged in the production, grading, packing and sale of fresh shell eggs, including conventional, cage-free, organic and nutritionally-enhanced eggs.

For the third quarter of fiscal 2014 ended March 1, 2014, Cal-Maine Foods, Inc. reported net sales of US$395.5 million compared with net sales of US$360.4 million for the third quarter of fiscal 2013. The company reported net income of US$42.9 million for the third quarter of fiscal 2014 compared with US$30.6 million for the third quarter of fiscal 2013.

For the first nine months of fiscal 2014, net sales were US$1,069.3 million compared with net sales of US$962.2 million for the prior-year period. The company reported net income of US$77.7 million for the first nine months of fiscal 2014 compared with net income of US$54.3 million for the year-earlier period.

Baker said, "Consumer demand for shell eggs has been strong at the retail level for both generic and specialty eggs, supported by below average temperatures across the country. In addition, the egg products segment of the industry has continued to experience strong demand due to the introduction of breakfast items at many quick serve restaurants, as well as increased exports."

"Sales of specialty eggs have increased throughout this fiscal year and were up 9.0% for the third quarter," added Baker. "Specialty egg sales accounted for 17.4% of dozen eggs sold and 23.7% of total shell egg sales revenue for the third quarter of fiscal 2014, compared with 16.7% of dozen eggs sold and 23.6% of total shell egg sales revenue for the third quarter of fiscal 2013. We believe the performance of specialty eggs will continue to be a key driver of our growth as we capitalize on favourable consumer demand trends. We remain focused on identifying additional opportunities to market and sell specialty eggs and enhance our product mix."

"We were able to benefit from lower feed costs compared with the same period last year. Operating income was US$46.6 million for the third quarter of fiscal 2014, up 51% compared with US$30.9 million for the third quarter of fiscal 2013. Overall, our operations have continued to run well and our Board recently approved production expansion projects for our existing operations in Florida, Texas and Kentucky. These expansions will enhance our operating efficiencies and the additional capacity will allow us to purchase fewer eggs in the spot egg market where prices may be more expensive," added Baker.

On March 1, 2014, the Company completed the acquisition of 50% of the membership interests of Delta Egg Farm, LLC from Sunbest Foods of Iowa, Inc., a Moark, LLC affiliate. Delta Egg Farm, LLC, previously an unconsolidated joint venture of the company, is now a wholly owned subsidiary of the company. Delta Egg's assets include a feed mill and egg production complex with capacity for approximately 1.2 million laying hens, located near Delta, Utah, and an organic egg production complex with capacity for approximately 400,000 laying hens located near Chase, Kansas.

Baker added, "This transaction further advances our strategy to expand our capacity and grow our business through selective acquisitions."