-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S9nsqvDmG09ih3H3qj5re4c0JUM8cJGLLLKjtEOY7aaZJ+a9IGEyos+5YIkFDsGB 570q3pRSyjUcFt6TMGPFfA== 0000904456-00-000020.txt : 20000411 0000904456-00-000020.hdr.sgml : 20000411 ACCESSION NUMBER: 0000904456-00-000020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000226 FILED AS OF DATE: 20000410 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAL MAINE FOODS INC CENTRAL INDEX KEY: 0000016160 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - LIVESTOCK & ANIMAL SPECIALTIES [0200] IRS NUMBER: 640500378 STATE OF INCORPORATION: DE FISCAL YEAR END: 0529 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-04892 FILM NUMBER: 597184 BUSINESS ADDRESS: STREET 1: 3320 WOODROW WILSON DRIVE CITY: JACKSON STATE: MS ZIP: 39207 BUSINESS PHONE: 6019486813 MAIL ADDRESS: STREET 1: 3320 WOODROW WILSON DR CITY: JACKSON STATE: MS ZIP: 39209 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (mark one) [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended February 26, 2000 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 (I.R.S. Employer Identification No.) Incorporation or Organization) 3320 WOODROW WILSON AVENUE, JACKSON, MISSISSIPPI 39209 (Address of principal executive offices) (Zip Code) (601) 948-6813 (Registrant's telephone number, including area code) 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 _X_ No ___ Number of shares outstanding of each of the issuer's classes of common stock (exclusive of treasury shares), as of March 31, 2000. Common Stock, $0.01 par value 11,040,688 shares Class A Common Stock, $0.01 par value 1,200,000 shares CAL-MAINE FOODS, INC. INDEX
PAGE PART I. FINANCIAL INFORMATION NUMBER Item 1. Condensed Consolidated Financial Statements (Unaudited) Condensed Consolidated Balance Sheets - February 26, 2000 and May 29, 1999 3 Condensed Consolidated Statements of Operations - Three Months and Nine Months Ended February 26, 2000 and February 27, 1999 4 Condensed Consolidated Statements of Cash Flow - Nine Months Ended November 26, 2000 and February 27, 1999 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Item 3. Quantitative and Qualitative Disclosures of Market Risk 11 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 12 Signatures 13
2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CAL-MAINE FOODS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
February 26, 2000 May 29, 1999 ----------------- ------------ (unaudited) (note) ASSETS Current assets: Cash and cash equivalents $ 7,502 $ 36,198 Accounts receivable, net 18,675 14,617 Recoverable federal and state income taxes 4,606 - Inventories 45,963 38,353 Prepaid expenses and other current assets 795 771 -------------------------------- Total current assets 77,541 89,939 Notes receivable and investments 7,194 7,468 Goodwill 3,760 4,260 Other assets 3,007 2,104 Property, plant and equipment 232,248 184,354 Less accumulated depreciation (84,867) (74,443) -------------------------------- 147,381 109,911 -------------------------------- TOTAL ASSETS $ 238,883 $ 213,682 ================================ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable to banks $ 1,000 $ - Accounts payable and accrued expenses 29,826 27,026 Current maturities of long-term debt 6,091 4,118 Current deferred income taxes 10,294 10,294 -------------------------------- Total current liabilities 47,211 41,438 Long-term debt, less current maturities 115,018 79,886 Deferred expenses 1,489 1,489 Deferred income taxes 8,088 10,285 -------------------------------- Total liabilities 171,806 133,098 Stockholders' equity: Common stock $0.01 par value per share: Authorized shares - 30,000,000 Issued and outstanding shares - 17,565,200 at February 26, 2000 and May 29, 1999 176 176 Class A common stock $0.01 par value: authorized, issued and outstanding 1,200,000 shares 12 12 Paid-in capital 18,784 18,784 Retained earnings 58,975 71,525 Common stock in treasury - 6,478,112 shares at February 26, 2000 and 6,257,712 shares at May 29, 1999 (10,870) (9,913) -------------------------------- Total stockholders' equity 67,077 80,584 -------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 238,883 $ 213,682 ================================
See notes to condensed consolidated financial statements. 3 CAL-MAINE FOODS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) UNAUDITED
13 Weeks Ended 39 Weeks Ended February 26, 2000 February 27, 1999 February 26, 2000 February 27, 1999 -------------------------------------- -------------------------------------- Net sales $ 79,191 $ 77,861 $ 209,300 $ 224,594 Cost of sales 72,644 62,170 194,352 185,519 ------------------------------------------------------------------------- Gross profit 6,547 15,691 14,948 39,075 Selling, general and administrative 10,780 8,700 29,489 26,921 ------------------------------------------------------------------------- Operating income (loss) (4,233) 6,991 (14,541) 12,154 Other income (expense): Interest expense, net (2,071) (934) (4,679) (2,426) Other 46 275 180 120 ------------------------------------------------------------------------- (2,025) (659) (4,499) (2,306) ------------------------------------------------------------------------- Income (loss) before income taxes (6,258) 6,332 (19,040) 9,848 Income tax expense (benefit) (2,261) 2,353 (6,947) 3,702 ------------------------------------------------------------------------- NET INCOME (LOSS) $ (3,997) $ 3,979 $ (12,093) $ 6,146 ========================================================================= Net income (loss) per common share: Basic $ (.32) $ .31 $ (.98) $ .47 ========================================================================= Diluted $ (.32) $ .30 $ (.98) $ .46 ========================================================================= Weighted average shares outstanding: Basic 12,349 13,019 12,401 13,094 ========================================================================= Diluted 12,349 13,134 12,401 13,234 =========================================================================
See notes to condensed consolidated financial statements. 4 CAL-MAINE FOODS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) UNAUDITED
39 Weeks Ended February 26, 2000 February 27, 1999 ----------------- ----------------- Cash flows provided by operating activities $(10,082) $ 19,373 Cash flows from investing activities: Purchases of property, plant and equipment (4,526) (3,103) Construction of production facilities (12,697) (6,592) Purchases of shell egg production and processing business (36,205) - Payments received on notes receivable and from investments 496 370 Increase in note receivable, investments and other assets (2,704) (1,830) Net proceeds from sale of property, plant and equipment 331 4,411 ------------------------------------ Net cash used in investing activities (55,305) (6,744) Cash flows from financing activities: Net proceeds from payable to banks 1,000 - Long-term borrowings 40,295 6,350 Principal payments on long-term debt and capital leases (3,190) (3,747) Purchases of common stock for treasury (957) (1,096) Payment of dividends (457) (437) ------------------------------------ Net cash provided by financing activities 36,691 1,070 ------------------------------------ Increase (decrease) in cash and cash equivalents (28,696) 13,699 Cash and cash equivalents at beginning of period 36,198 41,126 ------------------------------------ Cash and cash equivalents at end of period $ 7,502 $ 54,825 ====================================
See notes to condensed consolidated financial statements. 5 CAL-MAINE FOODS, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (in thousands, except share amounts) February 26, 2000 (unaudited) 1. Presentation of Interim Information The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the management , all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month and nine-month periods ended February 26, 2000 are not necessarily indicative of the results that may be expected for the year ended June 3, 2000. The balance sheet at May 28, 1999 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Cal-Maine Foods, Inc.'s annual report on Form 10-K for the fiscal year ended May 28, 1999. 2. Inventories Inventories consisted of the following:
February 26, 2000 May 29, 1999 -------------------------------------- Flocks $ 28,547 $ 24,662 Eggs 3,791 2,471 Feed and supplies 10,456 7,847 Livestock 3,169 3,373 -------------------------------------- $ 45,963 $ 38,353 ======================================
3. Acquisition In September 1999, Cal-Maine Foods, Inc. purchased substantially all of the assets and assumed certain liabilities of Smith Farms, Inc. and certain related companies ("Smith Farms") for cash of $36.2 million. The assets purchased were Smith Farms' egg production and processing businesses in Texas and Arkansas, and included approximately 3.9 million laying hens and growing pullets. The cash purchase price of the acquisition was provided from current working capital. Unaudited pro forma results of operations of the Company, including Smith Farms were as follows:
Nine Months Ended February 26, 2000 February 27, 1999 --------------------------------------------- Net sales $ 220,637 $ 266,694 Net income (loss) (13,358) 7,057 Net income (loss) per basic share (1.08) .54 Net income (loss) per diluted share (1.08) .53
Pro forma results do not purport to be indicative of actual results had the acquisition been made at May 31, 1998 or the results that may occur in the future. 6 4. Long-Term Debt In September 1999, the Company and one of its lenders obtained to additional borrowings of $16.0 million, received a commitment for an additional $15.0 million over the next two years for construction purposes, and revised terms for approximately $9.3 million in existing long-term debt. The additional borrowings of $16.0 million has an average life of approximately 10.6 years and an interest rate of 8.26%. The Company will make principal and interest payments under the existing terms of the $9.3 million long-term note payable through December 2003. The revised terms will become effective in December 2003 based on a 15-year amortization and maturing in September 2014. The debt is secured by certain assets located in Ohio, Kentucky, and Tennessee. In February 2000, the Company obtained a borrowing of $14.0 million. The terms of the note payable provide for a 10-year amortization period and an interest rate of LIBOR plus 1.75% maturing in 2007. The note is secured by certain assets acquired from Smith Farms. The Company is required by provisions of its note payable agreements to maintain certain minimum financial covenants. For the current quarter, the Company did not meet its interest coverage ratio and tangible net worth requirements pertaining to three long-term note payable agreements totaling $51 million. It also did not meet its funded debt ratio requirement pertaining to one of these long-term note payable agreements and its $35 million line of credit. The Company does not anticipate meeting these requirements in the fourth quarter of fiscal 2000. It has received a waiver of these requirements for the third and fourth quarters of fiscal 2000 and anticipates amending the agreements to ensure compliance with these requirements in fiscal 2001. ITEM 2. MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW The Company is primarily engaged in the production, cleaning, grading, packing, and sale of fresh shell eggs. The Company's fiscal year end is the Saturday closest to May 31. The Company's operations are fully integrated. It owns facilities to hatch chicks, grow pullets, manufacture feed, and produce, process, and distribute shell eggs. The Company currently is the largest producer and distributor of fresh shell eggs in the United States. The shell egg segment sales, including feed sales to outside egg producers, accounted for 98% of the Company's net sales. The Company primarily markets its shell eggs in the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States. Shell eggs are sold directly by the Company primarily to national and regional supermarket chains. The Company currently uses contract producers for approximately 23% of its total egg production. Contract producers operate under agreements with the Company for the use of their facilities in the production of shell eggs by layers owned by the Company, which owns the eggs produced. Also, shell eggs are purchased, as needed, from outside producers for resale by the Company. The Company's operating income or loss is significantly affected by wholesale shell egg market prices, which can fluctuate widely and are outside of the Company's control. Retail sales of shell eggs are greatest during the fall and winter months and lowest during the summer months. Prices for shell eggs fluctuate in response to seasonal factors and an increase in egg demand during the winter months. The Company's cost of production is materially affected by feed costs, which average about 60% of Cal-Maine's' total farm egg production cost. Changes in feed costs result in changes in the Company's cost of goods sold. The cost of feed ingredients is affected by a number of supply and demand factors such as crop production and weather, and other factors, such as the level of grain exports, over which the Company has little or no control. 7 RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, certain items from the Company's Condensed Consolidated Statements of Operations expressed as a percentage of net sales.
Percentage of Net Sales ----------------------- 13 Weeks Ended 39 Weeks Ended Feb. 26, 2000 Feb. 27, 1999 Feb. 26, 2000 Feb. 27, 1999 ------------------------------------------------------------------------ Net sales 100.0% 100.0% 100.0% 100.0% Cost of sales 91.7 79.8 92.9 82.6 ------------------------------------------------------------------------ Gross profit 8.3 20.2 7.1 17.4 Selling, general & administrative 13.6 11.2 14.0 12.0 ------------------------------------------------------------------------ Operating income (loss) (5.3) 9.0 (6.9) 5.4 Other expense (2.6) (.9) (2.2) (1.0) ------------------------------------------------------------------------ Income (loss) before taxes (7.9) 8.1 (9.1) 4.4 Income tax expense (benefit) (2.9) 3.0 (3.3) 1.7 ------------------------------------------------------------------------ Net income (loss) (5.0)% 5.1% (5.8)% 2.7% ========================================================================
NET SALES Net sales for the third quarter of fiscal 2000 were $79.2 million, an increase of $1.3 million, or 1.7% as compared to net sales for the third quarter of fiscal 1999. Although the total dozens of eggs sold increased in the current quarter, egg selling prices were down significantly as compared with prices a year ago. Dozens sold for the current quarter were 138.2 million dozen, an increase of 30.7 million dozen, or 28.6% as compared to the third quarter of last year. The Smith Farms acquisition in September 1999 and the Hudson Brothers acquisition in May 1999 accounted for substantially all of the increase in dozens sold. The Company's net average selling price per dozen for the fiscal 2000 third quarter was $.536, compared to $.679 for the third quarter of last year, a decrease of 21.1%. The Company's net average selling price per dozen is the average selling price for all sizes and grades of shell eggs, including non-graded egg sales, breaking stock and undergrades. Although domestic demand was good, increased egg supply and weak export demand caused egg prices to decrease during the third quarter of this fiscal year. Feed sales to outside producers also decreased for the current quarter as a result of lower tons sold and lower cost of feed ingredients which brought market prices for feed down. Net sales for the thirty-nine weeks ended February 26, 2000 were $209.3 million, a decrease of $15.3 million, or 6.8 %, as compared to the same period last fiscal year. As in the current quarter discussed above, an increase in dozens sold was offset by a sharp decrease in egg selling prices. Dozens sold for the current 39 week period were 379.3 million as compared to 321.1 million for last fiscal year, an increase of 18.1%. The recent acquisitions accounted for most of the increase. For the current 39 week period, the Company's net average selling price per dozen was $.512, compared to $.638 per dozen last fiscal year, a decrease of $.126 per dozen, or 19.7%. As discussed above, increased egg supply and weak export demand were the primary cause of reduced egg market prices. COST OF SALES Cost of sales for the third quarter ended February 26, 2000 was $72.6 million, an increase of $10.4 million, or 16.8%, as compared to the cost of sales of $62.2 million for last year's third quarter. The increase is the net result of an increase in total dozens sold and a decrease in feed cost per dozen produced. As discussed above, dozens sold for the current quarter increased 30.7 million dozens, or 28.6% above last year's third quarter. Of the 30.7 million dozens sold increase, 9.4 million dozens were purchased from outside egg producers. During weak egg market conditions, such as in the current fiscal year, the Company is able to purchase outside eggs at more favorable net prices which mitigates the normally higher cost of purchasing eggs from outside sources. Feed cost for the third quarter ended February 26, 2000 was $.182 per dozen as compared to last fiscal years' cost per dozen of $.197, a decrease of 7.6%. Although total dozens sold increased and cost per dozen sold improved, the sharp drop in egg selling prices resulted in a decrease in gross profit from 20.2% of net sales for the quarter ended February 27, 1999, to 8.3% for the quarter ended February 26, 2000. 8 For the thirty-nine week period ended February 26, 2000, total cost of sales was $194.4 million, an increase of $8.9 million, or 4.8% as compared to the cost of sales of $185.5 million for last year. The decrease is the result of lower feed cost per dozen and an increase in dozens purchased from outside producers. Feed cost for the current 39 weeks was $.182 per dozen, compared to $.198 per dozen for last year, a decrease of $.016 per dozen, or 8.0%. Dozens sold for the current 39 weeks are 58.2 million dozens higher than last year. Of this increase, 21.1 million dozens were purchased from outside egg producers. As discussed above, the Company was able to make these purchases at more favorable net prices. The decreased feed cost and cost of outside egg purchases were not enough to offset the drop in egg selling prices, and the net result was a decrease in gross profit from 17.4% of net sales for last year to 7.1% for the current fiscal year. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expense for the third quarter ended February 26, 2000 was $10.8 million, an increase of $2.1 million, or 23.9%, as compared to the $8.7 million for last fiscal year's third quarter. The increase is primarily due to the increased dozens sold from the acquisitions mentioned above. Dozens of eggs sold for the current quarter increased 28% above the same period last year. The increase of $2.1 million was evenly split between administrative and delivery expenses. The increases in administrative expenses were primarily in payroll and related overhead, and in consulting and professional fees. All costs of delivery increased in relationship to the increased sales volume. As a percent of net sales, selling, general and administrative expense increased from 11.2% for fiscal 1999 to 13.6% for the current third quarter. For the thirty-nine weeks ended February 26, 2000, selling, general and administrative expense was $29.5 million, an increase of $2.6 million, or 9.5%, as compared to $26.9 million for the same period last fiscal year. The increase is related to the 18.1% increase in dozens sold from the acquisitions mentioned above. On a dozens sold basis, selling, general and administrative expense have decreased $.006, or 7.4%, per dozen for the current fiscal period. As a percent of net sales, selling, general and administrative expense increased from 12.0% for last year to 14.0% for the current year. OPERATING INCOME As the result of the above, an operating loss of $4.2 million was incurred for the third quarter ended February 26, 2000, as compared to an operating income of $7.0 million for last fiscal year's comparable quarter. As a percent of sales, the current fiscal 2000 quarter had a 5.3% operating loss, compared to a 9.0% operating income for last year. For the thirty-nine weeks ended February 26, 2000, an operating loss of $14.5 million was incurred, compared to a $12.2 million operating income for last fiscal year. As a percent of net sales, the current fiscal period had a 6.9% operating loss, compared to a 5.4% operating income for last year. OTHER EXPENSE Other expense for the third quarter ended February 26, 2000 was $ 2.0 million, an increase of $1.4 million, as compared to the third quarter last fiscal year. For the current quarter, net interest expense increased $1.1 million and other income decreased $229,000 from last year. Net interest expense increased as the result of increased long-term borrowing and a decrease in interest income due to lower cash equivalent investments. Other income decreased due to lower earnings from equity investments. As a percent of net sales, other expense was 2.6% for the current fiscal third quarter, compared to .9% last year. For the thirty-nine weeks ended February 26, 2000, other expense was $4.5 million, an increase of $2.2 million, as compared to other expense of $2.3 million for last year. For the current period, net interest expense increased $2.3 million and other income increased $60,000. The increase in interest resulted from the same activities as mentioned above in the current quarter. As a percent of net sales, other expense was 2.2% for the current fiscal period, as compared to 1.0% for last year. 9 INCOME TAXES As a result of the above, the Company's pre-tax loss was $6.3 million for the quarter ended February 26, 2000, compared to pre-tax income of $6.3 million for last year's quarter. For the current quarter, an income tax benefit of $2.3 million was recorded with an effective tax rate of 36.1%, as compared to an income tax expense of $2.4 million with an effective rate of 37.2% for last year's comparable quarter. For the thirty-nine week period ended February 26, 2000, the Company's pre-tax loss was $19.0 million, compared to pre-tax income of $9.8 million for last year. For the current thirty-nine week period, an income tax benefit of $7.0 million was recorded with an effective tax rate of 36.5%, as compared to an income tax expense of $3.7 million with an effective rate of 37.6% for last year's comparable period. NET INCOME (LOSS) Net loss for the third quarter ended February 26, 2000 was $4.0 million, or $.32 per basic share, compared to net income of $4.0 million, or $.31 per basic share for last fiscal year's third quarter. For the thirty-nine week period ended February 26, 2000, net loss was $12.1 million, or $.98 per basic share, compared to last fiscal year's net income of $6.1 million, or $.47 per basic share. CAPITAL RESOURCES AND LIQUIDITY The Company's working capital at February 26, 2000 was $30.3 million, compared to $48.5 million at May 29, 1999. The Company's need for working capital generally is highest in the first and last fiscal quarters ending in August and May, respectively, when egg prices are normally at seasonal lows. Seasonal borrowing needs frequently are higher during these periods than during other fiscal periods. The Company had $34 million available for use under its line of credit with three banks at February 26, 2000. The Company's long-term debt at that date, including current maturities and capitalized lease obligations, totaled $121.1 million. Substantially all trade receivables collateralize the Company's line of credit, and property, plant and equipment collateralize the Company's long-term debt. The Company is required by certain provisions of these loan agreements to (1) maintain minimum levels of working capital and net worth; (2) limit dividends, capital expenditures, lease obligations and additional long-term borrowings; and (3) maintain various current, cash-flow, and interest coverage ratios, among other restrictions. For the current quarter, the Company did not meet its interest coverage ratio and tangible net worth requirements pertaining to three long-term note payable agreements totaling $51 million. It also did not meet its funded debt ratio requirement pertaining to one of these long-term note payable agreements and its $35 million line of credit. The Company does not anticipate meeting these requirements in the fourth quarter of fiscal 2000. It has received a waiver of these requirements for the third and fourth quarters of fiscal 2000 and anticipates amending the agreements to ensure compliance with these requirements in fiscal 2001. Under certain of the loan agreements, the lenders have the option to require the prepayment of any outstanding borrowings in the event of a change in the control of the company. For the thirty-nine weeks ended February 26, 2000, $10.1 million in net cash was used in operating activities. This compares to $19.4 million in net cash that was provided by operating activities for the comparable period last fiscal year. In the current thirty-nine week period, $4.5 million was used for purchases of property, plant and equipment, $12.7 million used for construction projects, and $36.2 million used in acquisition of a shell egg operation. Approximately $1.0 million was used for purchase of common stock, and $456,000 was used for payment of dividends on the common stock. The Company, as a 50% member, invested $1.2 million, and loaned $1.5 million in the construction of a joint venture egg operation in Utah, Delta Egg Farm, LLC. The Company received $1.0 million from borrowings under its line of credit and long-term borrowings of $40.3 million. Principal payments of $3.2 million were made on long-term debt. The net result was a decrease in cash of $28.7 million. In September 1999, the Company obtained additional borrowings of $16.0 million, received a commitment for an additional $15.0 million over the next two years for construction purposes, and revised terms for approximately $9.3 million in existing long-term debt. The additional borrowings of $16.0 million has an average life of approximately 10.6 years and an interest rate of 8.26%. 10 The revised terms for the $9.3 million debt will initiate in December 2003 and include a 15-year amortization. The debt is secured by certain assets located in Ohio, Kentucky, and Tennessee. In February 2000, the Company obtained a $14.0 million note payable with a 10-year amortization period and an interest rate of LIBOR plus 1.75% maturing in 2000. The note payable is secured by certain assets acquired from Smith Farms. For the comparable period last fiscal year, $3.1 million was used for purchases of property, plant, and equipment, and $6.6 million used in construction projects. The Company invested $1.5 million in the Delta Egg Farm joint venture egg operations in Utah. Net cash of $4.4 million was received from sales of property, plant, and equipment, and from notes receivable. Additional long-term borrowings of $6.4 million were received and repayments of $3.8 million were made. Approximately $1.5 million was used in payment of stock dividends and purchases of treasury stock. The net result was an increase in cash of $13.7 million At February 26, 2000, the Company had expended, since the start of the project, approximately $13.5 million for construction of new shell egg production, processing and feed mill facilities in Waelder, Texas. The estimated cost of construction is approximately $18.7 million with anticipated borrowings in fiscal 2000 of approximately $10.4 million from an insurance company. The Company has $2.9 million of deferred tax liability due to a subsidiary's change from a cash basis to an accrual basis taxpayer on May 29, 1988. The TAXPAYER RELIEF ACT OF 1997 provides that the taxes on the cash basis temporary differences as of that date are generally payable over 20 years beginning in fiscal 1999, or in full in the first fiscal year in which there is a change in ownership control. Payment of the $2.9 million deferred tax liability will reduce the Company's cash, but would not impact the Company's statement of operations or reduce stockholder's equity, as these taxes have been accrued and are reflected on the Company's balance sheet. FORWARD LOOKING STATEMENTS. The foregoing statements contain forward-looking statements, which involve risks, and uncertainties and the Company's actual experience may differ materially from that discussed above. Factors that may cause such a difference include, but are not limited to, those discussed in "Factors Affecting Future Performance" below, as well as future events that have the effect of reducing the Company's available cash balances, such as unanticipated operating losses or capital expenditures related to possible future acquisitions. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management's analysis only as the date hereof. The Company assumes no obligation to update forward-looking statements. See also the Company's reports to be filed from time to time with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. FACTORS AFFECTING FUTURE PERFORMANCE. The Company's future operating results may be affected by various trends and factors beyond the Company's control. These include adverse changes in shell egg prices and in the grain markets. Accordingly, past trends should not be used to anticipate future results and trends. Further, the Company's prior performance should not be presumed to be an accurate indication of future performance. ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK There have been no material changes in the market risk reported in the Company's fiscal 1999 annual report on Form 10-K. 11 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits Exhibit Number Exhibit 27 Financial data schedule b. Reports on Form 8-K No current report on Form 8K was filed by the Company covering an event during the third quarter of fiscal 2000. 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CAL-MAINE FOODS, INC. (Registrant) Date: April 06,2000 /s/BOBBY J. RAINES ------------------ Bobby J. Raines Vice President/Treasurer (Principal Financial Officer) Date: April 06,2000 /s/CHARLES F. COLLINS --------------------- Charles F. Collins Vice President/Controller (Principal Accounting Officer) 13 EX-27 2
5 0000016160 CAL-MAINE FOODS, INC. 1,000 OTHER JUN-03-2000 FEB-26-2000 7,502 0 18,675 0 45,963 77,541 232,248 84,867 238,883 47,211 0 0 0 188 66,889 238,883 209,300 209,300 194,352 194,352 0 0 4,679 (19,040) (6,947) (12,093) 0 0 0 (12,093) (.98) (.98)
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