Cal-Maine Foods Reports on Q2 FY 2021

01/05/2021

In a press release dated January 5th Cal-Maine Foods (CALM) announced results for the 2nd Quarter of FY 2021 ending November 28th 2020.

 

The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS)

 

2nd Quarter Ending

Nov. 28th 2020

Nov. 30th 2019

Difference (%)

Sales:

$347,328

$311,522

+11.5

Gross profit:

$58,451

$29,375

+99.0

Operating income (loss):

$14,479

$(16,565)

+187.4

Pre-tax income (loss)

Net income (loss)

$15,917

$12,1551

$(15,049)

$(10,186)2

+205.8

+219.3

Diluted earnings (loss) per share:

$0.25

$(0.21)

+219.1

Gross Margin (%)

16.8

9.4

+78.7

Operating Margin (%)

4.2

(5.3)

+179.2

Profit (Loss) Margin (%)

3.5

(3.2)

+209.4

Long-term Debt and lease obligations:

$1,905

$2,387

-20.2

12 Months Trailing:

Return on Assets (%)

2.2

Return on Equity (%)

4.6

Operating Margin (%)

2.8

Profit Margin (%)

3.2

Total Assets

$1,200,355

$1,206,694

-0.5

Market Capitalization

$1,822,000

 

Note 1. Loss on disposal of fixed assets $99 million 

           2.Loss on disposal of fixed assets $212million . Loss attributable to non-controlling unit $125 million

 

52-Week Range in Share Price: $30.74 to $46.66 50-day Moving average $38.28

 

Market Close Jan. 5th pre-release $37.28. After-hours trading, post-release $40.00 (+7.3%)

 

Trailing P/E 40.8 Beta 0.2

 

In reviewing the CALM quarterly report the following calculated values* represent key data for the most recent Quarter. (Q2 Fiscal 2019 and percent difference in parentheses):-

 

  • Dozen shell eggs sold: 273,651,000 (261,026,000 +4.8)
  • Average selling price of all shell eggs: $1.24 per dozen; ($1.17 per dozen; +6.0%).
  • Average selling price of specialty eggs (excluding co-pack) calculated from data released: $1.87 cents per dozen; ($1.90 per dozen; -15%).
  • Average selling price of generic eggs calculated from data released: $1.02 cents per dozen; ($0.95 cents per dozen; +7.4%).
  • Differential between generic and specialty eggs: $0.85 cents per dozen; ($0.95 per dozen; -10.5%)
  • Specialty eggs as a proportion of volume sold: 26.4%; (23.5%; +12.3%)
  • Specialty eggs as a proportion of sales value: 39.7%; (38.2 %; +1.5%)
  • Proportion of eggs sold actually produced by Cal-Maine flocks: 92.1% (88.7% +3.8%;).
  • Feed cost per dozen 41.1 cents (41.6 cents -1.2%)

Dolph Baker Chairman and CEO

*Assumes that 98 percent of sales value derived from shell eggs.

 

Dolph Baker, Chairman and CEO of Cal-Maine Foods, Inc., stated, “Our results for the second quarter of Fiscal 2021 reflect favorable demand trends for shell eggs, primarily at the retail level as consumers continue to prepare more meals at home during the COVID-19 pandemic. Demand from food service customers has been less consistent and remains well below pre-pandemic levels, due in part to various restrictions on restaurants in place for different areas of the country.

 

Baker continued “We are especially grateful for the hard work and dedication of our employees who have worked to meet customer demand through extraordinary conditions. As the COVID-19 pandemic continues to affect our daily lives, our top priority is the health and safety of our employees, and we remain vigilant in managing our operations in a safe manner”.

 

In reviewing pricing Baker stated “market prices for eggs rose steadily in the early part of the second quarter and then leveled off for the remainder of the period. For example, the Urner-Barry Southeastern Regional Large Price for conventional eggs for the second quarter of 2021 was $1.21 per dozen, up 3.5 percent compared to $1.17 for the second quarter of fiscal 2020, and our average sales price was up 5.8 percent compared with the prior-year second quarter. We did not experience a typical seasonal spike in market prices around Thanksgiving; the UB southeastern large index peaked on October 8, 2020, at $1.30 and then declined to $1.20 at quarter close.

 

The supply-demand situation was addressed as “The overall supply of eggs reported by the United States Department of Agriculture declined in the second quarter of fiscal 2021 compared to the same period last year. The USDA also reported that the hatch from July through November 2020 decreased 1.5 percent as compared to the same period last year, and hen numbers reported by the USDA as of December 1, 2020, were 325.2 million, which represents 15.6 million fewer hens than a year ago. However, the decreased hen and egg supply has been offset by the decreased food service demand as noted above”.

 

In relation to the transition to cage-free housing Baker stated "We have continued to take aggressive steps to position Cal-Maine Foods to meet the expected future demand for cage-free eggs. As a growing number of states have passed legislation requiring cage-free eggs by specified future dates, we are working closely with our customers who are transitioning to meet expected requirements. Over the past twelve years, we have invested approximately $405 million in facilities, equipment, and related operations to expand our cage-free production. In addition, we have committed another $57.8 million towards the production of cage-free facilities, including the latest $40.1 million conversion project, previously announced on December 15, 2020, at our production facility in Guthrie, Kentucky. Together with our other cage-free expansion projects, we believe we will continue to enhance our ability to provide exceptional service and distribution capabilities to our customers”.

 

Future uncertainties were addressed by Baker as “feed costs started trending higher midway through the second quarter and continued volatility is expected for the remainder of fiscal 2021 as increased export demand for both soybeans and corn is placing pressure on domestic supplies. Additionally, the ongoing uncertainties and supply chain disruptions related to the COVID-19 outbreak, weather fluctuations and geopolitical issues surrounding trade agreements and international tariffs will continue to affect market prices for our primary feed ingredients.

 

Baker concluded “we are pleased with our ability to respond to dynamic market conditions and manage our operations in the face of the unprecedented challenges created by the COVID-19 pandemic. While we are still facing an uncertain environment, we believe retail demand for eggs will remain strong, and we are optimistic that effective vaccines will soon be widely available, restoring consumer confidence and allowing restaurants and food service operators to resume regular schedules.






































































































































































































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