JACKSON, MISS. — Untouched by the highly pathogenic avian influenza crippling the egg market, Cal-Maine Foods, Inc. reported its highest annual net income for the recent fiscal year. Record sales of shell eggs and lower average feed costs contributed to strong results.
For the fiscal year ended May 30, Cal-Maine had net income of $161,254,000, equal to $3.35 per share on the common stock, up 48% from $109,207,000, or $2.27 per share, for the year before. Net sales for the year climbed 9% to $1,576,128,000 from $1,440,907,000 for fiscal 2014.
The performance came in below analysts’ expectations, however. Cal-Maine’s shares on Nasdaq were down 8% in mid-morning trading on July 20 from the previous close of $53.89. Still, the stock price was up 30% from a year ago.
|Dolph Baker, chairman, president and c.e.o. of Cal-Maine Foods, Inc.|
“Overall, our operations ran very well in fiscal 2015 as we were able to benefit from more favorable market conditions for most of the year,” said Dolph Baker, chairman, president and chief executive officer. “There have been no positive tests for A.I. at any of the Cal-Maine Foods locations. However, we have significantly increased our biosecurity measures at every location, and we continue to monitor the situation every day. We are also working closely with the egg industry associations and government health officials to identify ways to mitigate the risk of future outbreaks.”
Specialty eggs were a key driver of performance for the year, accounting for nearly 20% of shell eggs sold and 27% of shell eggs revenue. To further capitalize on growing demand for specialty eggs, Cal-Maine Foods in April announced a new production joint venture in Texas with Rose Acre Farms to build a shell egg production complex with capacity for approximately 1.8 million cage-free laying hens. Construction is under way for Red River Valley Egg Farm, L.L.C., with initial flocks expected to be placed in November.
Net income for the fourth quarter advanced 46% to $46,114,000, or 96c per share, from $31,492,000, or 66c per share, for the year-ago period. Net sales for the quarter increased 8% to $403,011,000 from $371,582,000, reflecting a 6% increase in total dozen shell eggs sold and nearly 3% higher average selling prices compared to the prior-year quarter.
“We are well positioned to leverage the additional capacity from our recent joint ventures and other expansion projects under way in Florida, Kansas, Kentucky and Texas,” Mr. Baker said. “Our strong balance sheet also provides the flexibility to pursue new growth opportunities that will improve our operations. And we will continue to execute our growth strategy to enhance our product mix, including additional opportunities to market and sell specialty eggs.“Above all, we will work hard to meet the changing demands of our customers with outstanding service. We look forward to the opportunities ahead for Cal-Maine Foods in fiscal 2016.”