Cal-Maine Reports Rise in Net Sales01 April 2014
US - Cal-Maine Foods, Inc. has reported that net sales for the third quarter of fiscal 2014 were $395.5 million compared with net sales of $360.4 million for the third quarter of fiscal 2013, according to the company's results for the third quarter and nine months ended 1 March 2014.
Cal-Maine reported net income of $42.9 million, or $1.78 per basic share and $1.77 per diluted share, for the third quarter of fiscal 2014 compared with $30.6 million, or $1.27 per basic and diluted share, for the third quarter of fiscal 2013.
For the first nine months of fiscal 2014, net sales were $1,069.3 million compared with net sales of $962.2 million for the prior-year period. The Company reported net income of $77.7 million, or $3.23 per basic share and $3.22 per diluted share, for the first nine months of fiscal 2014 compared with net income of $54.3 million, or $2.26 per basic and diluted share, for the year-earlier period.
Dolph Baker, chairman, president and chief executive officer of Cal-Maine Foods, Inc., stated, “Cal-Maine Foods delivered a solid performance for the third quarter of fiscal 2014 with our net sales up 10 per cent over the same period last year.
"The higher sales reflect both improved volumes through the holiday season and higher average selling prices compared with the third quarter of fiscal 2013. 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 per cent for the third quarter."
"Specialty egg sales accounted for 17.4 per cent of dozen eggs sold and 23.7 per cent of total shell egg sales revenue for the third quarter of fiscal 2014, compared with 16.7 per cent of dozen eggs sold and 23.6 per cent 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 favorable consumer demand trends. We remain focused on identifying additional opportunities to market and sell specialty eggs and enhance our product mix.
"We are pleased with our improved operating performance during the third quarter. We were able to benefit from lower feed costs compared with the same period last year. Operating income was $46.6 million for the third quarter of fiscal 2014, up 51 per cent compared with $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."
As previously announced, on 1 March 2014, the company completed the acquisition of 50 per cent of the membership interests of Delta Egg Farm, LLC from Sunbest Foods of Iowa, Inc., a Moark, LLC affiliate.
Delta Egg Farm, LLC was previously an unconsolidated joint venture of the Company. As a result of this transaction, Delta Egg Farm, LLC, is now a wholly owned subsidiary of the Company. For the third quarter of fiscal 2014, the Company recorded a non-recurring, non-cash gain of $4.0 million in other income for the excess of the purchase price over the carrying value of the Company’s 50 per cent investment in the joint venture.
This gain is non-taxable, and therefore resulted in a $1.5 million reduction to the Company’s income tax expense for the third quarter of fiscal 2014. Additionally, the Company recorded a $3.7 million decrease to deferred income tax liabilities related to the tax basis of the equity investment in the joint venture.
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.
Mr Baker added, "We are pleased to assume the full ownership and management of Delta Egg Farm, LLC as we integrate these additional facilities into our operations. This transaction further advances our strategy to expand our capacity and grow our business through selective acquisitions. We look forward to the additional market opportunities ahead for Cal-Maine Foods in fiscal 2014."ThePoultrySite News Desk