UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

FORM 10-Q

(mark one)

☑  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended November 30, 2019

OR

☐  Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ____________ to ____________

Commission File Number:  000-04892

CAL-MAINE FOODS, INC.

(Exact name of registrant as specified in its charter)

Delaware	64-0500378
(State or other jurisdiction of incorporation or organization)	(I.R.S Employer Identification No.)

3320 Woodrow Wilson Avenue, Jackson, Mississippi  39209

(Address of principal executive offices) (Zip Code)

(601) 948-6813

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	CALM	The NASDAQ Global Select Market

Indicate by check mark whether the registrant:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑     No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑      No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer	☑	Accelerated filer	☐
Non – Accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐    No ☑

There were 43,893,117 shares of Common Stock, $0.01 par value, and 4,800,000 shares of Class A Common Stock, $0.01 par value, outstanding as of January 6, 2020.

CAL-MAINE FOODS, INC. AND SUBSIDIARIES

FORM 10-Q

INDEX

FOR THE QUARTER ENDED NOVEMBER 30, 2019

			Page Number
Part I.		Financial Information
	Item 1.	Condensed Consolidated Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets - November 30, 2019 and June 1, 2019	2
		Condensed Consolidated Statements of Operations - Thirteen and Twenty-six Weeks Ended November 30, 2019 and December 1, 2018	3
		Condensed Consolidated Statements of Comprehensive Income (Loss) - Thirteen and Twenty-six Weeks Ended November 30, 2019 and December 1, 2018	4
		Condensed Consolidated Statements of Cash Flows - Twenty-six Weeks Ended November 30, 2019 and December 1, 2018	5
		Notes to Condensed Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
	Item 4.	Controls and Procedures	32
Part II.		Other Information
	Item 1.	Legal Proceedings	32
	Item 1A.	Risk Factors	32
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
	Item 6.	Exhibits	35
	Signatures		36

PART I.  FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

CAL-MAINE FOODS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for par value amounts)

	November 30, 2019		June 1, 2019
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	11,248	$	69,247
Investment securities available-for-sale	123,275		250,181
Trade and other receivables (less allowance for doubtful accounts of
$358 and $206 at November 30, 2019 and June 1, 2019, respectively)	118,046		71,760
Inventories	190,968		172,237
Prepaid expenses and other current assets	5,301		4,328
Total current assets	448,838		567,753
Property, plant & equipment, net	531,443		455,347
Finance lease right-of-use asset, net	755		947
Operating lease right-of-use asset, net	2,014		—
Investments in unconsolidated entities	64,297		67,554
Goodwill	35,525		35,525
Intangible assets, net	24,336		23,762
Other long-term assets	4,072		5,390
TOTAL ASSETS	$	1,111,280	$	1,156,278
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	102,001	$	73,211
Current maturities of long-term debt	—		1,500
Current portion of finance lease obligation	201		196
Current portion of operating lease obligation	646		—
Total current liabilities	102,848		74,907
Long-term finance lease obligation	756		858
Long-term operating lease obligation	1,367		—
Other noncurrent liabilities	7,674		8,110
Deferred income taxes	64,342		82,597
Total liabilities	176,987		166,472
Commitment and contingencies - see Note 12
Stockholders’ equity:
Common stock, $0.01 par value, 120,000 authorized and 70,261 shares issued at
November 30, 2019 and June 1, 2019, respectively, and 43,893 and 43,895
shares outstanding at November 30, 2019 and June 1, 2019, respectively	703		703
Class A convertible common stock, $0.01 par value, 4,800 shares authorized,
issued and outstanding at November 30, 2019 and June 1, 2019	48		48
Paid-in capital	58,652		56,857
Retained earnings	900,485		954,527
Accumulated other comprehensive income (loss),net of tax	(269)		355
Common stock in treasury at cost – 26,368 and 26,366 shares at
November 30, 2019 and June 1, 2019	(25,888)		(25,866)
Total Cal-Maine Foods, Inc. stockholders’ equity	933,731		986,624
Noncontrolling interest in consolidated entities	562		3,182
Total stockholders’ equity	934,293		989,806
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,111,280	$	1,156,278

See Notes to Condensed Consolidated Financial Statements.

2

CAL-MAINE FOODS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

	13 Weeks Ended				26 Weeks Ended
	November 30, 2019		December 1, 2018		November 30, 2019		December 1, 2018
Net sales	$	311,522	$	356,040	$	552,688	$	696,623
Cost of sales	282,147		285,505		544,438		568,960
Gross profit	29,375		70,535		8,250		127,663
Selling, general and administrative	45,728		45,231		88,203		89,741
(Gain) loss on disposal of fixed assets	212		(30)		82		(89)
Operating income (loss)	(16,565)		25,334		(80,035)		38,011
Other income (expense):
Interest income, net	1,140		1,688		2,825		3,473
Royalty income	348		719		759		1,220
Equity in income (loss) of affiliates	(454)		909		(908)		2,338
Other, net	482		124		1,818		225
Total other income, net	1,516		3,440		4,494		7,256
Income (loss) before income taxes and noncontrolling interest	(15,049)		28,774		(75,541)		45,267
Income tax (benefit) expense	(4,863)		6,768		(19,634)		10,518
Net income (loss) before noncontrolling interest	(10,186)		22,006		(55,907)		34,749
Less: Income (loss) attributable to noncontrolling interest	(125)		199		(86)		537
Net income (loss) attributable to Cal-Maine Foods, Inc.	$	(10,061)	$	21,807	$	(55,821)	$	34,212
Net income (loss) per common share attributable to Cal-Maine Foods, Inc.:
Basic	$	(0.21)	$	0.45	$	(1.15)	$	0.71
Diluted	$	(0.21)	$	0.45	$	(1.15)	$	0.71
Weighted average shares outstanding:
Basic	48,447		48,391		48,447		48,390
Diluted	48,447		48,534		48,447		48,525

See Notes to Condensed Consolidated Financial Statements.

3

CAL-MAINE FOODS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

	13 Weeks Ended				26 Weeks Ended
	November 30, 2019		December 1, 2018		November 30, 2019		December 1, 2018
Net income (loss), including noncontrolling interests	$	(10,186)	$	22,006	$	(55,907)	$	34,749
Other comprehensive loss, before tax:
Unrealized holding loss on available-for-sale securities, net of reclassification adjustments	(241)		(717)		(825)		(250)
Income tax benefit related to items of other comprehensive income	59		175		201		61
Other comprehensive loss, net of  tax	(182)		(542)		(624)		(189)
Comprehensive income (loss)	(10,368)		21,464		(56,531)		34,560
Less: comprehensive income (loss) attributable to the noncontrolling interest	(125)		199		(86)		537
Comprehensive income (loss) attributable to Cal-Maine Foods, Inc.	$	(10,243)	$	21,265	$	(56,445)	$	34,023

See Notes to Condensed Consolidated Financial Statements.

4

CAL-MAINE FOODS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	26 Weeks Ended
	November 30, 2019		December 1, 2018
Operating activities:
Net income (loss) including noncontrolling interest	$	(55,907)	$	34,749
Depreciation and amortization	27,571		27,229
Impairment loss on property, plant & equipment	2,919		—
Other adjustments, net	(48,855)		(34,290)
Net cash provided by (used in) operations	(74,272)		27,688
Investing activities:
Purchases of investment securities	(10,116)		(78,564)
Sales and maturities of investment securities	137,160		108,274
Investment in unconsolidated entities	—		(4,272)
Distributions from unconsolidated entities	2,357		4,456
Acquisition of business	(44,515)		(17,889)
Purchases of property, plant and equipment	(68,106)		(18,972)
Net proceeds from disposal of property, plant and equipment	1,866		454
Net cash provided by (used in) investing activities	18,646		(6,513)
Financing activities:
Purchase of common stock by treasury	(21)		(6)
Distributions to noncontrolling interests	(755)		—
Principal payments on long-term debt	(1,500)		(2,185)
Principal payments on finance lease	(97)		—
Payment of dividends	—		(21,210)
Net cash used in financing activities	(2,373)		(23,401)
Net change in cash and cash equivalents	(57,999)		(2,226)
Cash and cash equivalents at beginning of period	69,247		48,431
Cash and cash equivalents at end of period	$	11,248	$	46,205
Supplemental Information:
Cash paid for operating leases	$	398	$	—
Interest paid	$	91	$	130

See Notes to Condensed Consolidated Financial Statements.

5

CAL-MAINE FOODS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

November 30, 2019

(unaudited)

Note 1 - Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements of Cal-Maine Foods, Inc. and its subsidiaries (the "Company," "we," "us," "our") have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Therefore, they do not include all of the information and footnotes required by generally accepted accounting principles (GAAP) in the United States of America for complete financial statements and should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended June 1, 2019. These statements reflect all adjustments that are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented and, in the opinion of management, consist of adjustments of a normal recurring nature. Operating results for the interim periods are not necessarily indicative of operating results for the entire fiscal year.

Fiscal Year

The Company's fiscal year-end is on the Saturday nearest May 31. Each of the three-month periods and year-to-date periods ended on November 30, 2019 and December 1, 2018 included 13 and 26 weeks, respectively.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that effect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Leases

The Company determines if an arrangement is a lease at inception of the arrangement and classifies it as an operating lease or finance lease. We recognize the right to use an underlying asset for the lease term as a right-of-use (ROU) asset on our balance sheet. A lease liability is recorded to represent our obligation to make lease payments over the term of the lease. These assets and liabilities are included in our Condensed Consolidated Balance Sheet in Finance lease right-of-use asset, Operating lease right-of-use asset, Current portion of finance lease obligation, Current portion of operating lease obligation, Long-term finance lease obligation, and Long-term operating lease obligation.

The Company records ROU assets and lease obligations based on the discounted future minimum lease payments over the term of the lease. When the rate implicit in the lease is not easily determinable, the Company’s incremental borrowing rate is used to calculate the present value of the future lease payments. The Company elected not to recognize ROU assets and lease obligations for leases with an initial term of 12 months or less. Lease expense for operating leases is recognized on a straight-line basis over the lease term.

Nature of Leases

The company leases certain office spaces, trucks, processing machines, and equipment to support our operations under cancelable and non-cancelable contracts.

Corporate and Field Offices

We lease office space for administrative employees at some of our farms. These contracts are typically structured with initial non-cancelable terms of three to ten years. To the extent our corporate and field office contracts include

6

renewal options, we evaluate whether we are reasonably certain to exercise those options on a contract by contract basis based on expected future office space needs.

Trucks

We assumed several non-cancelable operating leases for trucks from a prior acquisition. The initial terms on these leases ranged from five to seven years. We do not intend to exercise renewal options beyond the initial term.

Processing machines and other equipment

We lease a processing machine through a finance lease arrangement assumed in an acquisition. The lease contains a purchase option at the end of the term that we intend to exercise. The company leases various pieces of equipment such as forklifts, pallet jacks, and other items in support of operations. These leases are cancelable and non-cancelable with terms ranging from one month to five years.

Recently Adopted Accounting Standards

In February 2016, the FASB issued ASU 2016-02, Leases. The purpose of the standard is to improve transparency and comparability related to the accounting and reporting of leasing arrangements. The new standard establishes a ROU model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations.

The effective date for the new standard, for the Company, was June 2, 2019 and the Company adopted the new standard on that date. The Company elected a modified retrospective transition approach, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either its effective date or the beginning of the earliest comparative period presented in the financial statements as its date of initial application. We used June 2, 2019 as the date of initial application. If an entity chooses the second option, the transition requirements for existing leases apply to leases entered into between the date of initial application and the effective date. The entity must recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. Because the Company chose the first option, the Company has not recast its comparative period financial statements.  In connection with adopting the new standard, the Company reclassified its presentation of finance lease obligations and property in the financial statements for all periods presented.

The new standard provides a number of optional practical expedients in transition. The Company elected practical expedients which permit us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs.

The new standard provides practical expedients for an entity’s initial and ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. For the leases that qualify, we do not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient to not separate lease and non-lease components for all of our leases.

Implementation of the new standard did not have a material effect on our financial statements. See Note 6 for additional information.

Reclassification

Certain reclassifications were made to the fiscal 2019 financial statements to conform to the fiscal 2020 financial statement presentation. These reclassifications had no effect on income

7

Note 2 - Acquisition

Effective on October 20, 2019, the Company acquired certain assets of Mahard Egg Farm (Mahard), relating to its commercial shell egg production, processing, distribution and sales for $45.5 million. Upon satisfaction of certain post-closing covenants, an additional $1 million dollars will be paid to the seller. The acquired assets include facilities with current capacity for approximately 3.9 million laying hens and permitted capacity for up to 8.0 million laying hens, a feed mill, pullet raising facilities and related production facilities located in Chillicothe, Texas, and Nebo, Oklahoma, and a distribution warehouse located in Gordonville, Texas. Mahard owned equity interests in the Company's majority owned subsidiary, Texas Egg Products, LLC (TEP). As a result of the acquisition, the Company now owns 93.2% of TEP. The acquired operations of Mahard are included in the accompanying financial statements as of October 20, 2019. Acquisition related costs incurred during the period were immaterial to the financial statements.

Pending the finalization of the Company's valuation, the following table summarizes the preliminary aggregate purchase price allocation for Mahard (in thousands):

Inventory	$	5,276
Property, plant and equipment	38,433
Customer list and non-compete agreement	2,000
Liabilities assumed	(194)
Purchase price	45,515
Deferred purchase price	(1,000)
Cash consideration paid	$	44,515

Note 3 - Inventories

Inventories consisted of the following (in thousands):

	November 30, 2019		June 1, 2019
Flocks, net of amortization	$	111,436	$	105,536
Eggs and egg products	20,938		14,318
Feed and supplies	58,594		52,383
	$	190,968	$	172,237

We grow and maintain flocks of layers (mature female chickens), pullets (female chickens, under 18 weeks of age), and breeders (male and female chickens used to produce fertile eggs to hatch for egg production flocks). Our total flock at November 30, 2019 consisted of approximately 10.0 million pullets and breeders and 40.8 million layers.

8

Note 4 - Investment Securities

The following represents the Company’s investment securities as of November 30, 2019 and June 1, 2019 (in thousands):

November 30, 2019	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
US government and agency obligations	$	10,583	$	54	$	—	$	10,637
Municipal bonds	25,310		112		—		25,422
Corporate bonds	84,280		328		—		84,608
Certificates of deposits	1,004		—		—		1,004
Asset backed securities	1,593		11		—		1,604
Total current investment securities	$	122,770	$	505	$	—	$	123,275
Mutual funds	$	1,760	$	833	$	—	$	2,593
Total noncurrent investment securities	$	1,760	$	833	$	—	$	2,593

June 1, 2019	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
US government and agency obligations	$	30,896	$	78	$	—	$	30,974
Municipal bonds	50,220		133		—		50,353
Commercial paper	9,953		—		8		9,945
Corporate bonds	147,068		94		—		147,162
Certificates of deposits	6,149		—		1		6,148
Asset backed securities	5,589		10		—		5,599
Total current investment securities	$	249,875	$	315	$	9	$	250,181
Mutual funds	$	2,331	$	1,026	$	—	$	3,357
Total noncurrent investment securities	$	2,331	$	1,026	$	—	$	3,357

Available-for-sale

Proceeds from sales and maturities of investment securities available-for-sale were $137.2 million and $108.3 million during the twenty-six weeks ended November 30, 2019 and December 1, 2018, respectively. Gross realized gains for the twenty-six weeks ended November 30, 2019 and December 1, 2018 were $162,000 and $1,000, respectively.  Gross realized losses for the twenty-six weeks ended November 30, 2019 and December 1, 2018 were $6,000 and $26,000, respectively. For purposes of determining gross realized gains and losses, the cost of securities sold is based on the specific identification method.

Actual maturities may differ from contractual maturities as some borrowers have the right to call or prepay obligations with or without penalties.  Contractual maturities of current investments at November 30, 2019, are as follows (in thousands):

	Estimated Fair Value
Within one year	$	88,703
1-5 years	34,572
Total	$	123,275

9

Noncurrent

The mutual funds are classified as “Other long-term assets” in the Company’s Condensed Consolidated Balance Sheets. Gains and losses are recognized in other income (expenses) as Other, net in the Company's Condensed Consolidated Statements of Operations.

Proceeds from sales and maturities of noncurrent investment securities were $1.2 million and $84,000 during the twenty-six weeks ended November 30, 2019 and December 1, 2018, respectively. Gross realized gains for the twenty-six weeks ended November 30, 2019 and December 1, 2018 were $611,000 and $48,000, respectively.  There were no realized losses for the twenty-six weeks ended November 30, 2019 and December 1, 2018. For purposes of determining gross realized gains and losses, the cost of securities sold is based on the specific identification method.

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Note 5 - Fair Value Measurements

The Company is required to categorize both financial and nonfinancial assets and liabilities based on the following fair value hierarchy.  The fair value of an asset is the price at which the asset could be sold in an orderly transaction between unrelated, knowledgeable, and willing parties able to engage in the transaction. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor in a transaction between such parties, not the amount that would be paid to settle the liability with the creditor.

•Level 1 - Quoted prices in active markets for identical assets or liabilities

•Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly

•Level 3 - Unobservable inputs for the asset or liability that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

The disclosures of fair value of certain financial assets and liabilities that are recorded at cost are as follows:

Cash and cash equivalents: The carrying amount approximates fair value due to the short maturity of these instruments.

Long-term debt: The carrying value of the Company’s long-term debt is at its stated value.  We have not elected to carry our long-term debt at fair value.  Fair values for debt are based on quoted market prices or published forward interest rate curves, which are level 2 inputs. The fair value and carrying value of the Company’s borrowings under its long-term debt were as follows (in thousands):

	November 30, 2019				June 1, 2019
	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities
Note payable	$	—	$	—	$	1,500	$	1,501
Finance lease obligations	957		867		1,054		940
Total liabilities measured at fair value	$	957	$	867	$	2,554	$	2,441

10

Assets and Liabilities Measured at Fair Value on a Recurring Basis

In accordance with the fair value hierarchy described above, the following table shows the fair value of financial assets and liabilities measured at fair value on a recurring basis as of November 30, 2019 and June 1, 2019 (in thousands):

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							Total
November 30, 2019	Level 1		Level 2		Level 3		Balance
Assets
US government and agency obligations	$	—	$	10,637	$	—	$	10,637
Municipal bonds	—		25,422		—		25,422
Corporate bonds	—		84,608		—		84,608
Certificates of deposits	—		1,004		—		1,004
Asset backed securities	—		1,604		—		1,604
Mutual funds	2,593		—		—		2,593
Total assets measured at fair value	$	2,593	$	123,275	$	—	$	125,868

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June 1, 2019	Level 1		Level 2		Level 3		Balance
Assets
US government and agency obligations	$	—	$	30,974	$	—	$	30,974
Municipal bonds	—		50,353		—		50,353
Commercial paper	—		9,945		—		9,945
Corporate bonds	—		147,162		—		147,162
Certificates of deposits	—		6,148		—		6,148
Asset backed securities	—		5,599		—		5,599
Mutual funds	3,357		—		—		3,357
Total assets measured at fair value	$	3,357	$	250,181	$	—	$	253,538

Investment securities – available-for-sale have maturities of three months or longer when purchased, and are classified as current, because they are available for current operations. Observable inputs for these securities are yields, credit risks, default rates, and volatility.

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Note 6 - Leases

Expenses related to operating leases, amortization of finance lease ROU assets and finance lease interest are included in Cost of sales, Selling general and administrative expense, and Interest income, net in the Condensed Consolidated Statements of Operations. The Company’s lease cost consists of the following (in thousands):

	13 Weeks Ended November 30, 2019		26 Weeks Ended November 30, 2019
Operating Lease cost	$	201	$	398
Finance Lease cost
Amortization of right-of-use asset	$	39	$	77
Interest on lease obligations	$	11	$	23
Short term lease cost	$	1,294	$	1,728

Future minimum lease payments under non-cancelable leases are as follows (in thousands):

	As of November 30, 2019
	Operating Leases		Finance Leases
Remainder fiscal 2020	$	383	$	120
2021	718		239
2022	588		239
2023	460		239
2024	56		219
Thereafter	30		—
Total	2,235		1,056
Less imputed interest	(222)		(99)
Total	$	2,013	$	957

The weighted-average remaining lease term and discount rate for lease liabilities included in our Condensed Consolidated Balance Sheet are as follows:

	As of November 30, 2019
	Operating Leases		Finance Leases
Weighted-average remaining lease term (years)	3.4		4.0
Weighted-average discount rate	5.9	%	4.9	%

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Note 7 - Accrued Dividends Payable and Dividends per Common Share

We accrue dividends at the end of each quarter according to the Company’s dividend policy adopted by its Board of Directors. The Company pays a dividend to shareholders of its Common Stock and Class A Common Stock on a quarterly basis for each quarter for which the Company reports net income attributable to Cal-Maine Foods, Inc. computed in accordance with GAAP in an amount equal to one-third (1/3) of such quarterly income. Dividends are paid to shareholders of record as of the 60th day following the last day of such quarter, except for the fourth fiscal quarter.  For the fourth quarter, the Company pays dividends to shareholders of record on the 65th day after the quarter end. Dividends are payable on the 15th day following the record date. Following a quarter for which the Company does not report net income attributable to Cal-Maine Foods, Inc., the Company will not pay a dividend for a subsequent profitable quarter until the Company is profitable on a cumulative basis computed from the date of the last quarter for which a dividend was paid. At the end of the second quarter of fiscal 2020, the amount of cumulative losses to be recovered before payment of a dividend was $75.6 million.

On our condensed consolidated statement of operations, we determine dividends per common share in accordance with the computation in the following table (in thousands, except per share data):

	13 Weeks Ended				26 Weeks Ended
	November 30, 2019		December 1, 2018		November 30, 2019		December 1, 2018
Net income (loss) attributable to Cal-Maine Foods, Inc. available for dividend	$	(10,061)	$	21,807	$	(55,821)	$	34,212
1/3 of net income attributable to Cal-Maine Foods, Inc. available for dividend	$	—	$	7,246	$	—	$	11,381
Common stock outstanding (shares)	43,893		43,828
Class A common stock outstanding (shares)	4,800		4,800
Total common stock outstanding (shares)	48,693		48,628
Dividends per common share*	$	—	$	0.149	$	—	$	0.234

*Dividends per common share = 1/3 of Net income (loss) attributable to Cal-Maine Foods, Inc. available for dividend