Cal-Maine Foods(CALM)2025-04-08 20:31Production and Market Position - Cal-Maine Foods has a total flock of approximately 48.9 million layers and 12.3 million pullets and breeders, making it the largest producer and distributor of fresh shell eggs in the U.S.[94] - In fiscal 2025, the average number of layer hens increased by 14%, and total chicks hatched rose by 24% compared to the prior-year quarter[103]. - Cage-free egg revenue represented approximately 19.2% of total shell egg revenue for the third quarter of fiscal year 2025[105]. - The company has engaged in proactive measures to mitigate the tight egg supply situation, including increasing breeder flocks by 33%[103]. - Ten states have passed legislation mandating cage-free requirements for egg production, affecting approximately 27% of the U.S. population[104]. Financial Performance - In Q3 fiscal 2025, the company recorded a gross profit of $716.1 million, up from $218.6 million in Q3 fiscal 2024, driven by a significant increase in net average selling prices of shell eggs and total dozens sold[111]. - The net average selling price per dozen for Q3 fiscal 2025 was $4.060, compared to $2.247 in the prior-year period, reflecting a 80.5% increase[112]. - Total net sales for Q3 fiscal 2025 reached $1.4 billion, a 101.6% increase from $703.1 million in Q3 fiscal 2024[118]. - Shell egg sales accounted for 94.9% of total net sales in Q3 fiscal 2025, with conventional egg sales increasing by $602.8 million, or 145.7%, compared to Q3 fiscal 2024[119][123]. - For the thirty-nine weeks ended March 1, 2025, total net sales were $3.2 billion, compared to $1.7 billion for the same period in fiscal 2024, marking an 87.4% increase[120]. - Gross profit for the thirty-nine weeks ended March 1, 2025, was $1.3 billion, compared to $355.1 million for the same period in 2024, reflecting higher net average selling prices[130]. Cost and Expenses - The company’s farm production costs per dozen produced decreased by 5.7%, or $0.06, compared to the prior year, primarily due to lower feed costs[114]. - Egg purchases and other costs of sales increased by $163.8 million quarter-over-quarter, primarily due to higher shell egg prices and increased volumes purchased[114]. - Total cost of sales for the thirteen weeks ended March 1, 2025, was $701.6 million, a 44.8% increase compared to $484.5 million for the same period in 2024[126]. - Selling, general, and administrative expenses totaled $79.97 million for the thirteen weeks ended March 1, 2025, a 21.1% increase from $66.02 million for the same period in 2024[132]. - Processing, packaging, and warehouse costs increased by 17.6% in the third quarter of fiscal 2025 compared to the same period in fiscal 2024, due to a 13.5% increase in the volume of processed dozens[129]. Income and Taxation - Operating income for the third quarter of fiscal 2025 was $635.7 million, compared to $162.8 million for the same period in fiscal 2024[142]. - Income tax expense for the third quarter of fiscal 2025 was $154.9 million, with an effective tax rate of 23.4%[146]. - For the thirty-nine weeks ended March 1, 2025, pre-tax income was $1.1 billion, a significant increase from $208.0 million for the same period in fiscal 2024[147]. - Net income attributable to Cal-Maine Foods, Inc. for the thirty-nine weeks ended March 1, 2025, was $877.6 million, or $17.99 per basic share, compared to $164.6 million, or $3.38 per basic share, for the same period in fiscal 2024[151]. - The effective tax rate for the thirty-nine weeks ended March 1, 2025, was 23.8%, compared to 21.5% for the same period in fiscal 2024[150]. Cash Flow and Capital Management - Cash flows from operating activities for the thirty-nine weeks ended March 1, 2025, provided $811.7 million, up from $237.6 million in the comparable period of fiscal 2024[153]. - Working capital increased to $1.5 billion at March 1, 2025, compared to $1.0 billion at June 1, 2024, while the current ratio decreased to 3.9 from 5.5[152]. - The company paid dividends of $160.8 million for the thirty-nine weeks ended March 1, 2025, compared to $43.0 million in the same prior-year period[155]. - A new $500 million share repurchase program was approved on February 25, 2025, allowing the company to repurchase shares at management's discretion[157]. - The company anticipates that its current cash balances and projected cash flows will be sufficient to fund capital expenditure needs for at least the next 12 months[163]. Strategic Investments and Acquisitions - The company completed a strategic investment with Crepini LLC, capitalizing the new venture with approximately $6.75 million for a 51% interest[108]. - The acquisition of ISE America, Inc. included assets with a capacity of approximately 4.7 million laying hens, enhancing market reach in the Northeast and Mid-Atlantic states[107]. - The company acquired the assets of Fassio Egg Farms, Inc. in Q2 fiscal 2024, enhancing its market presence in Utah and the western U.S. for cage-free eggs[110]. - Cash paid for business acquisitions was $116.2 million in the thirty-nine weeks ended March 1, 2025, primarily related to the ISE acquisition[154]. Future Outlook and Expansion - Ongoing expansion projects are expected to add approximately 1.1 million cage-free layer hens and 250,000 pullets, with a projected investment of $60 million[103]. - The company expects to complete construction projects for cage-free production capacity in calendar 2025, adding approximately 1.1 million cage-free layer hens and 250 thousand pullets[162].