US - Egg company, Cal-Maine Foods has reported an increase of more than four per cent in the volume of its sales in the last quarter and the average price has risen by almost three per cent, with speciality lines growing strongly.
Net sales for the second quarter of fiscal 2015 were $378.6 million, a 6.9 per cent increase compared with net sales of $354.3 million for the second quarter of fiscal 2014. The Company reported net income of $36.6 million, or $0.76 per basic share and $0.76 per diluted share, for the second quarter of fiscal 2015 compared with $26.1 million, or $0.54 per basic and $0.54 diluted share, for the second quarter of fiscal 2014.
For the first six months of fiscal 2015, net sales were $735.6 million compared with net sales of $673.8 million for the prior-year period. The Company reported net income of $64.3 million, or $1.34 per basic share and $1.33 per diluted share, for the first half of fiscal 2015 compared with net income of $34.9 million, or $0.73 per basic share and $0.72 per diluted share, for the year-earlier period.
The net income per share numbers for the second quarter and six month periods for fiscal 2015 and fiscal 2014 reflect the two-for-one stock split for shares of the Company’s common stock and Class A common stock, effective 31 October 2014.
Dolph Baker, chairman, president and chief executive officer of Cal-Maine Foods, Inc., commented: “We are pleased with the continued growth in sales and improved operating performance for the second quarter of fiscal 2015. These results reflect both a 4.2 per cent increase in total dozens of shell eggs sold and 2.9 per cent higher average selling prices compared with the second quarter of fiscal 2014.
“Our specialty egg sales continued to trend higher and accounted for 19.0 per cent of dozens sold and 26.8 per cent of total shell egg sales revenue for the second quarter. Specialty eggs continue to be an important area of focus for Cal-Maine Food’s growth strategy.
“We have recently expanded our market reach through our latest joint venture, Southwest Specialty Eggs, LLC, with licensing agreements for the sale of Egg-Land’s Best® and Land O’ Lakes® branded specialty eggs, as well as 4Grain®, Farmhouse Eggs® and other premium brands in Arizona, southern California and Nevada. We will continue to identify ways to enhance our product mix and provide a variety of healthy choices for our customers.”
“We experienced strong demand and favourable market conditions during the second quarter of fiscal 2015. Our feed costs were 11.0 per cent lower than the same period a year ago, and 10.6 per cent lower through the first half of this fiscal year. While corn and soybean meal basis prices are still at relatively high levels, we expect to benefit from more stable feed costs in fiscal 2015 compared to our last fiscal year.
“Overall, our operations have continued to perform very well this quarter and through the first half of this fiscal year. Operating income for the second quarter of fiscal 2015 was $55.6 million compared with $40.9 million for the second quarter of fiscal 2014.
“These results reflect our lower costs and our focused efforts to be an efficient, low-cost producer across all of the Company’s operations. We are pleased with our progress at our latest expansion projects in Florida, Kansas, Kentucky and Texas, and we believe the additional capacity and improved efficiencies will result in less dependence on outside egg purchases. We are also expanding our capacity for specialty eggs at both the Kansas and Kentucky facilities, which will enhance our ability to meet the needs of our customers.
“We are very pleased with our performance through the first half of fiscal 2015 and look forward to the new opportunities ahead for Cal-Maine Foods. However, along with the rest of the egg industry, we will be closely monitoring the pending implementation of Proposition 2 and Assembly Bill 1437 related to egg production standards and sales in California. This legislation, scheduled to be effective January 1, 2015, could have a significant impact on egg production throughout the country. While it is too early to determine the outcome for our operations, we will continue to manage the aspects of our business we can control. As such, we remain focused on the key elements of our growth strategy: identify value-added acquisition opportunities, provide the right product mix for our customers with expanded sales of specialty eggs, and maximise our operating efficiencies. We believe these efforts will continue to produce favorable results for our customers and shareholders in fiscal 2015,” said Mr Baker.
For the second quarter of fiscal 2015, Cal-Maine Foods will pay a cash dividend of approximately $0.252 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 12 February 2015, to shareholders of record on 28 January 2015.
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