Speciality Egg Sales Help Boost Cal-Maine Profits02 January 2014
US - Egg company, Cal-Maine Foods has seen increased sales and improved operating performance as well as reduced feed costs in the second quarter of the financial year.
Net sales for the second quarter of fiscal 2014 were $354.3 million, an eight per cent increase compared with net sales of $328.9 million for the second quarter of fiscal 2013.
The Company reported net income of $26.1 million, or $1.09 per basic share and $1.08 per diluted share, for the second quarter of fiscal 2014 compared with $14.3 million, or $0.60 per basic and diluted share, for the second quarter of fiscal 2013.
For the first six months of fiscal 2014, net sales were $673.8 million compared with net sales of $601.8 million for the prior-year period.
The Company reported net income of $34.9 million, or $1.45 per basic share and $1.44 per diluted share, for the first half of fiscal 2014 compared with net income of $23.7 million, or $0.99 per basic and diluted share, for the year-earlier period.
Dolph Baker, chairman, president and chief executive officer of Cal-Maine Foods, said: “We are pleased with the continued growth in sales and improved operating performance for the second quarter of fiscal 2014. These results reflect the additional volumes related to the Maxim acquisition, completed in November 2012, which contributed to the 6.2 per cent growth in dozens sold during the quarter. Average selling prices were up one per cent compared with the second quarter of fiscal 2013.
“Our specialty egg sales continued to trend higher and accounted for 16.4 per cent of dozens sold and 23.7 per cent of total shell egg sales revenue for the quarter. Specialty eggs are an important area of focus for Cal-Maine Food’s growth strategy as they continue to gain popularity with consumers who are looking for alternatives and willing to pay for premium products. Specialty egg prices, which are typically higher and less cyclical than regular egg prices, were up 4.1 per cent in the second quarter of fiscal 2014 compared with the same period last year. We will continue to identify ways to enhance our product mix in line with changing customer demand trends.”
Mr Baker added: “We experienced favourable egg markets during the second quarter of fiscal 2014. Our feed costs, which remain at historically high levels, were 15 per cent lower than a year ago. We are optimistic feed costs will remain near current levels, but believe that prices of corn and soybean meal, our principal feed ingredients, will remain volatile for the balance of our fiscal year.
"Overall, our operations performed very well and our operating income for the second quarter of fiscal 2014 was $40.9 million compared with $20.4 million for the second quarter of fiscal 2013. These results reflect higher sales volumes and our continued efforts to be an efficient, low-cost producer. We are very pleased with our performance through the first half of fiscal 2014 and look forward to the new opportunities ahead for Cal-Maine Foods.”
For the second quarter of fiscal 2014, Cal-Maine Foods will pay a cash dividend of approximately $0.361 per share to holders of its common and Class A common stock. Pursuant to Cal-Maine Foods’ variable dividend policy, in each quarter for which the Company reports net income, the Company pays a cash dividend to shareholders in an amount equal to one-third of such quarterly income. No dividends are paid in a quarter for which the Company does not report net income. The amount paid could vary slightly based on the amount of outstanding shares on the record date. The dividend is payable on 3 February 2014 to shareholders of record on 29 January 2014.
On 15 November 2012, the Company purchased the commercial egg assets of Maxim Production Co., Inc. Excluding the acquisition, net sales for the second quarter of fiscal 2014 were $323.4 million, an increase of 1.6 per cent compared with the prior-year period. Dozens sold, excluding the acquisition, were 227.0 million for the second quarter of fiscal 2014, a decrease of 1.3 per cent compared with the second quarter of fiscal 2013. On a comparable basis, excluding the acquisition, net sales for the first half of fiscal 2014 were $615.0 million, an increase of 4.0 per cent, and dozens sold were 445.2 million, an increase of 1.2 per cent over the same period last year.
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. The Company, which is headquartered in Jackson, Mississippi, is the largest producer and distributor of fresh shell eggs in the United States and sells the majority of its shell eggs in approximately 29 states across the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States.
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