10-Q

1

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM

10-Q

☑

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

For the quarterly period ended

February 26, 2022

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: 

001-38695

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.)

1052 Highland Colony Pkwy

,

Suite 200

,

Ridgeland

,

Mississippi

39157

(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

44,140,283

 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 March 29, 2022.

2

INDEX

Page

Number

Part I.

Financial Information

Item 1.

Item 2.

Item 3.

Item 4.

Part II.

Other Information

Item 1.

Item 1A.

Item 2.

Item 6.

3

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)

February 26, 2022

May 29, 2021

Assets

Current assets:

Cash and cash equivalents

$

15,589

$

57,352

Investment securities available-for-sale

81,125

112,158

Trade and other receivables, net

138,654

84,123

Income tax receivable

41,383

42,516

Inventories

240,087

218,375

Prepaid expenses and other current assets

5,872

5,407

Total current assets

522,710

519,931

Property, plant & equipment, net

671,373

589,417

Finance lease right-of-use asset, net

409

525

Operating lease right-of-use asset, net

1,168

1,724

Investments in unconsolidated entities

15,794

54,941

Goodwill

44,006

35,525

Intangible assets, net

18,686

20,341

Other long-term assets

7,849

6,770

Total Assets

$

1,281,995

$

1,229,174

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable and accrued expenses

$

120,665

$

89,191

Current portion of finance lease obligation

222

215

Current portion of operating lease obligation

486

691

Total current liabilities

121,373

90,097

Long-term finance lease obligation

271

438

Long-term operating lease obligation

682

1,034

Other noncurrent liabilities

10,673

10,416

Deferred income taxes, net

118,753

114,408

Total liabilities

251,752

216,393

Commitments and contingencies - see Note 13

—

—

Stockholders’ equity:

Common stock ($

0.01

 par value):

Common stock - authorized

120,000

 shares, issued

70,261

 shares

703

703

Class A convertible common stock - authorized and issued

4,800

 shares

48

48

Paid-in capital

66,909

64,044

Retained earnings

992,523

975,977

Accumulated other comprehensive loss, net of tax

(1,413)

(558)

Common stock in treasury at cost –

26,121

 shares at February 26, 2022 and

26,202

shares at May 29, 2021

(28,439)

(27,433)

Total Cal-Maine Foods, Inc. stockholders’ equity

1,030,331

1,012,781

Noncontrolling interest in consolidated entity

(88)

—

Total stockholders’ equity

1,030,243

1,012,781

Total Liabilities and Stockholders’ Equity

$

1,281,995

$

1,229,174

See Notes to Condensed Consolidated Financial Statements.

4

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

February 26, 2022

February 27, 2021

Net sales

$

477,485

$

359,080

$

1,184,195

$

999,189

Cost of sales

385,903

311,563

1,042,221

876,457

Gross profit

91,582

47,517

141,974

122,732

Selling, general and administrative

52,686

47,656

146,991

135,494

(Gain) loss on disposal of fixed assets

(674)

354

(2,855)

476

Operating income (loss)

39,570

(493)

(2,162)

(13,238)

Other income (expense):

Interest income, net

79

591

440

2,181

Royalty income

326

321

877

906

Patronage dividends

10,120

9,004

10,120

9,004

Equity income of unconsolidated entities

1,809

1,872

2,208

1,886

Other, net

1,144

537

8,169

1,485

Total other income, net

13,478

12,325

21,814

15,462

Income before income taxes

53,048

11,832

19,652

2,224

Income tax expense (benefit)

13,594

(1,716)

(2,921)

(4,080)

Net income

39,454

13,548

22,573

6,304

Less: Loss attributable to noncontrolling interest

(63)

—

(91)

—

Net income attributable to Cal-Maine Foods, Inc.

$

39,517

$

13,548

$

22,664

$

6,304

Net income per common share:

Basic

$

0.81

$

0.28

$

0.46

$

0.13

Diluted

$

0.81

$

0.28

$

0.46

$

0.13

Weighted average shares outstanding:

Basic

48,886

48,530

48,888

48,511

Diluted

49,036

48,659

49,035

48,649

See Notes to Condensed Consolidated Financial Statements.

5

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of

Comprehensive Income

(in thousands)

(unaudited)

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

February 26, 2022

February 27, 2021

Net income

$

39,454

 $

13,548

 $

22,573

 $

6,304

Other comprehensive income (loss), before tax:

Unrealized holding loss on available-for-sale

securities, net of reclassification adjustments

(551)

(378)

(1,130)

(283)

Income tax benefit related to items of other

comprehensive income

134

92

275

69

Other comprehensive loss, net of tax

(417)

(286)

(855)

(214)

Comprehensive income

39,037

13,262

21,718

6,090

Less: Comprehensive loss attributable to the

noncontrolling interest

(63)

—

(91)

—

Comprehensive income attributable to Cal-Maine

Foods, Inc.

$

39,100

$

13,262

$

21,809

$

6,090

See Notes to Condensed Consolidated Financial Statements.

6

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

Cash flows from operating activities:

Net income

$

22,573

$

6,304

Depreciation and amortization

50,996

44,391

Deferred income taxes

(3,861)

9,970

Other adjustments, net

(48,884)

(45,936)

Net cash provided by operations

20,824

14,729

Cash flows from investing activities:

Purchases of investment securities

(47,135)

(59,415)

Sales and maturities of investment securities

76,377

85,202

Investment in unconsolidated entities

(3,000)

—

Distributions from unconsolidated entities

400

5,813

Acquisition of business, net of cash acquired

(44,823)

—

Purchases of property, plant and equipment

(49,170)

(73,796)

Net proceeds from disposal of property, plant and equipment

6,041

3,273

Net cash used in investing activities

(61,310)

(38,923)

Cash flows from financing activities:

Purchase of common stock by treasury

(1,120)

(871)

Principal payments on finance lease

(160)

(153)

Contributions

3

5

Net cash used in financing activities

(1,277)

(1,019)

Net change in cash and cash equivalents

(41,763)

(25,213)

Cash and cash equivalents at beginning of period

57,352

78,130

Cash and cash equivalents at end of period

$

15,589

$

52,917

Supplemental Information:

Cash paid for operating leases

$

625

$

703

Interest paid

$

230

$

193

See Notes to Condensed Consolidated Financial Statements.

7

Cal-Maine Foods, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(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 in the

United States of America ("GAAP") for complete financial statements and should be read in conjunction with our Annual

Report on Form 10-K for the fiscal year ended May 29, 2021 (the "2021 Annual Report"). 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 ends on the Saturday closest to May 31. Each of the three-month periods and year-to-date periods

ended on February 26, 2022 and February 27, 2021 included 13 weeks and 39 weeks, respectively

.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and

assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results

could differ from those estimates.

The severity, magnitude and duration, as well as the economic consequences of the COVID-19 pandemic, are uncertain, rapidly

changing and difficult to predict. Therefore, our accounting estimates and assumptions might change materially in future

periods in response to COVID-19.

Investment Securities

Our investment securities are accounted for in accordance with ASC 320, “Investments - Debt and Equity Securities” (“ASC

320”). The Company considers all its debt securities for which there is a determinable fair market value, and there are no

restrictions on the Company's ability to sell within the next 12 months, as available-for-sale. We classify these securities as

current, because the amounts invested are available for current operations. Available-for-sale securities are carried at fair value,

with unrealized gains and losses reported as a separate component of stockholders’ equity. The Company regularly evaluates

changes to the rating of its debt securities by credit agencies and economic conditions to assess and record any expected credit

losses through the allowance for credit losses, limited to the amount that fair value was less than the amortized cost basis. The

cost basis for realized gains and losses on available-for-sale securities is determined by the specific identification method.

Gains and losses are recognized in other income (expenses) as Other, net in the Company's Condensed Consolidated Statements

of Income. Investments in mutual funds are classified as “Other long-term assets” in the Company’s Condensed Consolidated

Balance Sheets.

Trade Receivables 

Trade receivables are stated at their carrying values, which include a reserve for credit losses. At February 26, 2022 and May

29, 2021, reserves for credit losses were $

725

 thousand and $

795

 thousand, respectively. The Company extends credit to

customers based on an evaluation of each customer's financial condition and credit history. Collateral is generally not required.

The Company minimizes exposure to counter party credit risk through credit analysis and approvals, credit limits, and

monitoring procedures. In determining our reserve for credit losses, receivables are assigned an expected loss based on

historical loss information adjusted as needed for economic and other forward-looking factors.

Business Combinations

The Company applies fair value accounting guidance to measure non-financial assets and liabilities associated with business

acquisitions. These assets and liabilities are measured at fair value for the initial purchase price allocation. The fair value of

8

non-financial assets acquired is determined internally. Our internal valuation methodology for non-financial assets considers the

remaining estimated life of the assets acquired and what management believes is the market value for those assets.

Change in Accounting Principle

Effective May 31, 2020, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), which is

intended to improve financial reporting by requiring more timely recording of credit losses on loans and other financial

instruments held by financial institutions and other organizations. The guidance replaces the prior “incurred loss” approach with

an “expected loss” model and requires measurement of all expected credit losses for financial assets held at the reporting date

based on historical experience, current conditions, and reasonable and supportable forecasts. The Company adopted the

guidance on a modified retrospective basis through a cumulative effect adjustment to retained earnings as of the beginning of

the period of adoption. The Company evaluated its current methodology of estimating allowance for doubtful accounts and the

risk profile of its receivables portfolio and developed a model that includes the qualitative and forecasting aspects of the

“expected loss” model under the amended guidance. The Company finalized its assessment of the impact of the amended

guidance and recorded a $

422

 thousand cumulative increase to retained earnings at May 31, 2020.

Immaterial Error Correction

Effective on May 30, 2021, the Company acquired the remaining

50

% membership interest in Red River Valley Egg Farm,

LLC (“Red River”), including certain liabilities. During the Company’s third quarter of fiscal 2022, management determined

that it had not properly eliminated select intercompany sales and cost of sales transactions between Red River and the

corresponding other wholly-owned subsidiaries of the Company in its first and second quarter 2022 Condensed Consolidated

Statements of Income. The errors resulted in an overstatement of Net Sales and Cost of Sales of $

6.7

 million in the first quarter

of fiscal 2022 and $

9.2

 million in the second quarter of fiscal 2022. There was

no

 impact to Operating income (loss), Net

income (loss) or Net income (loss) per share. 

We evaluated the errors quantitatively and qualitatively in accordance with Staff Accounting Bulletin

("SAB") No. 99 Materiality, and SAB No. 108 Considering the Effects of Prior Year Misstatements when Quantifying

Misstatements in the Current Year Financial Statements, and determined that the related impact was not material to our

condensed consolidated financial statements for the first or second quarters of fiscal 2022, but that correcting the cumulative

impact of the errors would be relevant to our Condensed Consolidated Statements of Income for the third quarter

ended February 26, 2022. Accordingly, we have reflected the correction of the immaterial errors as a reduction of Net Sales and

Cost of Sales in the accompanying Condensed Consolidated Statements of Income for the thirty-nine weeks ended February 26,

2022.

Note 2 – Acquisition

Effective on May 30, 2021, the Company acquired the remaining

50

% membership interest in Red River Valley Egg Farm,

LLC (“Red River”), including certain liabilities. As a result of the acquisition, Red River became a wholly owned subsidiary of

the Company. Red River owns and operates a specialty shell egg production complex with approximately

1.7

 million cage-free

laying hens, cage-free pullet capacity, feed mill, processing plant, related offices and outbuildings and related equipment

located on approximately

400

 acres near Bogata, Texas.

9

The following table summarizes the consideration paid for Red River and the amounts of the assets acquired and liabilities

assumed recognized at the acquisition date:

Cash consideration paid

$

48,500

Fair value of the Company's equity interest in Red River held before the business combination

48,500

$

97,000

Recognized amounts of identifiable assets acquired and liabilities assumed

Cash

$

3,677

Accounts receivable, net

1,980

Inventory

8,789

Property, plant and equipment

85,002

Liabilities assumed

(2,448)

Deferred income taxes

(8,481)

Total identifiable net assets

88,519

Goodwill

8,481

$

97,000

Cash and accounts receivable acquired along with liabilities assumed were valued at their carrying value which approximates

fair value due to the short maturity of these instruments.

Inventory consisted primarily of flock, feed ingredients, packaging, and egg inventory. Flock inventory was valued at carrying

value as management believes that their carrying value best approximates their fair value. Feed ingredients, packaging and egg

inventory were all valued based on market prices as of May 30, 2021. 

Property, plant and equipment were valued utilizing the cost approach which is based on replacement or reproduction costs of

the assets and subtracting any depreciation resulting from physical deterioration and/or functional or economic obsolescence.

The Company recognized a gain of $

4.5

 million as a result of remeasuring to fair value its

50

% equity interest in Red River

held before the business combination. The gain was recorded in other income and expense under the heading “Other, net” in the

Company’s Condensed Consolidated Statements of Income. The acquisition of Red River resulted in a discrete tax benefit of

$

8.3

 million, which includes a $

7.3

 million decrease in deferred income tax expense related to the outside-basis of our equity

investment in Red River, with a corresponding non-recurring, non-cash $

954,000

 reduction to income taxes expense on the

non-taxable remeasurement gain associated with the acquisition. As part of the acquisition accounting, the Company also

recorded an $

8.5

 million deferred tax liability for the difference in the inside-basis of the acquired assets and liabilities

assumed. The recognition of deferred tax liabilities resulted in the recognition of goodwill. None of the goodwill recognized is

expected to be deductible for income tax purposes.

10

Note 3 - Investment

Securities

The following represents the Company’s investment securities as of February 26, 2022 and May 29, 2021 (in thousands):

February 26, 2022

Amortized

Cost

Unrealized 

Gains

Unrealized

Losses

Estimated 

Fair Value

Municipal bonds

$

514

$

—

$

3

$

511

Commercial paper

9,980

—

23

9,957

Corporate bonds

61,634

—

344

61,290

Certificates of deposits

1,268

—

12

1,256

Asset backed securities

8,205

—

94

8,111

Total current investment securities

$

81,601

$

—

$

476

$

81,125

Mutual funds

$

2,967

$

—

$

53

$

2,914

Total noncurrent investment securities

$

2,967

$

—

$

53

$

2,914

May 29, 2021

Amortized 

Cost

Unrealized 

Gains

Unrealized

Losses

Estimated 

Fair Value

Municipal bonds

$

16,424

$

56

$

—

$

16,480

Commercial paper

1,998

—

—

1,998

Corporate bonds

80,092

608

—

80,700

Certificates of deposits

1,077

—

1

1,076

Asset backed securities

11,914

—

10

11,904

Total current investment securities

$

111,505

$

664

$

11

$

112,158

Mutual funds

$

2,306

$

1,810

$

—

$

4,116

Total noncurrent investment securities

$

2,306

$

1,810

$

—

$

4,116

Available-for-sale

Proceeds from sales and maturities of investment securities available-for-sale were $

76.4

 million and $

85.2

 million during the

thirty-nine weeks ended February 26, 2022 and February 27, 2021, respectively. Gross realized gains for the thirty-nine weeks

ended February 26, 2022 and February 27, 2021 were $

181

 thousand and $

116

 thousand, respectively. Gross realized losses for

the thirty-nine weeks ended February 26, 2022 and February 27, 2021 were $

67

 thousand and $

17

 thousand, respectively. There

were

no

 allowances for credit losses at February 26, 2022 and May 29, 2021.

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 February 26, 2022 are as follows (in thousands):

Estimated Fair Value

Within one year

$

52,391

1-5 years

28,734

Total

$

81,125

Noncurrent 

Proceeds from sales and maturities of noncurrent investment securities were $

4.9

 million during the thirty-nine weeks

ended February 26, 2022. Gross realized gains for the thirty-nine weeks ended February 26, 2022 were $

2.2

 million. There

were no realized losses for the thirty-nine weeks ended February 26, 2022. There were

no

 sales of noncurrent investment

securities during the thirty-nine weeks ended February 27, 2021.

11

Note 4 - 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, including:

◦

Quoted prices for similar assets or liabilities in active markets

◦

Quoted prices for identical or similar assets in non-active markets

◦

Inputs other than quoted prices that are observable for the asset or liability

◦

Inputs derived principally from or corroborated by other observable market data

•

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, accounts receivable, and accounts payable:

 The carrying amount approximates fair value due to the

short maturity of these instruments.

Lease obligations:

 The carrying value of the Company’s lease obligations is at its present value which approximates fair value.

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 February 26, 2022 and May 29, 2021 (in thousands):

February 26, 2022

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

$

—

$

511

$

—

$

511

Commercial paper

—

9,957

—

9,957

Corporate bonds

—

61,290

—

61,290

Certificates of deposits

—

1,256

—

1,256

Asset backed securities

—

8,111

—

8,111

Mutual funds

2,914

—

—

2,914

Total assets measured at fair value

$

2,914

$

81,125

$

—

$

84,039

May 29, 2021

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

$

—

$

16,480

$

—

$

16,480

Commercial paper

—

1,998

—

1,998

Corporate bonds

—

80,700

—

80,700

Certificates of deposits

—

1,076

—

1,076

Asset backed securities

—

11,904

—

11,904

Mutual funds

4,116

—

—

4,116

Total assets measured at fair value

$

4,116

$

112,158

$

—

$

116,274

Investment securities – available-for-sale classified as Level 2 consist of securities with maturities of three months or longer

when purchased. We classified these securities as current because amounts invested are readily available for current operations.

Observable inputs for these securities are yields, credit risks, default rates, and volatility.

12

Note 5 - Inventories

Inventories consisted of the following as of February 26, 2022 and May 29, 2021 (in thousands):

February 26, 2022

May 29, 2021

Flocks, net of amortization

$

137,086

$

123,860

Eggs and egg products

24,153

21,084

Feed and supplies

78,848

73,431

$

240,087

$

218,375

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 February

26, 2022 consisted of approximately

9.4

 million pullets and breeders and

42.7

 million layers.

Note 6 - 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 most recent quarter for which a dividend was paid. For the third quarter of fiscal 2022, we will pay a cash dividend

of approximately $

0.125

 per share to holders of our Common Stock and Class A Common Stock. The amount of the accrual is

recorded in Accounts payable and accrued expenses in the Company’s Condensed Consolidated Balance Sheets.

On our Condensed Consolidated Statements of Income, we determine dividends per common share in accordance with the

computation in the following table (in thousands, except per share data):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

February 26, 2022

February 27, 2021

Net income attributable to Cal-Maine Foods,

Inc.

$

39,517

$

13,548

$

22,664

$

6,304

Cumulative losses to be recovered prior to

payment of divided at beginning of period

(21,097)

(8,614)

(4,244)

(1,370)

Net income available for dividend

$

18,420

$

4,934

$

18,420

$

4,934

1/3 of net income attributable to Cal-Maine

Foods, Inc. available for dividend

6,140

1,645

6,140

1,645

Common stock outstanding (shares)

44,140

44,056

Class A common stock outstanding (shares)

4,800

4,800

Total common stock outstanding (shares)

48,940

48,856

Dividends per common share*

$

0.125

$

0.034

$

0.125

$

0.034

*Dividends per common share =

1/3

 of Net income attributable to Cal-Maine Foods, Inc. available for dividend ÷ Total common stock

outstanding (shares).

Note 7 – Credit Facility

On November 15, 2021, we entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with a

five

-

year term. The Credit Agreement amended and restated the Company’s previously existing credit agreement dated July 10,

2018. The Credit Agreement provides for an increased senior secured revolving credit facility (the “Credit Facility” or

“Revolver”), in an initial aggregate principal amount of up to $

250

 million, which includes a $

15

 million sublimit for the

13

issuance of standby letters of credit and a $

15

 million sublimit for swingline loans. The Credit Facility also includes an

accordion feature permitting, with the consent of BMO Harris Bank N.A. (the “Administrative Agent”), an increase in the

Credit Facility in the aggregate up to $

200

 million by adding one or more incremental senior secured term loans or increasing

one or more times the revolving commitments under the Revolver. As of February 26, 2022,

no

 amounts were borrowed under

the Credit Facility and $

4.1

 million in standby letters of credit were issued under the Credit Facility.

The interest rate in connection with loans made under the Credit Facility is based on, at the Company’s election, either the

Eurodollar Rate plus the Applicable Margin or the Base Rate plus the Applicable Margin. The “Eurodollar Rate” means the

reserve adjusted rate at which Eurodollar deposits in the London interbank market for an interest period of

one

,

two

,

three

,

six

or

twelve

 months (as selected by the Company) are quoted. The “Base Rate” means a fluctuating rate per annum equal to the

highest of (a) the federal funds rate plus

0.50

% per annum, (b) the prime rate of interest established by the Administrative

Agent, and (c) the Eurodollar Rate for an interest period of

one

 month plus

1

% per annum, subject to certain interest rate floors.

The “Applicable Margin” means

0.00

% to

0.75

% per annum for Base Rate Loans and

1.00

% to

1.75

% per annum for

Eurodollar Rate Loans, in each case depending upon the Total Funded Debt to Capitalization Ratio for the Company at the

quarterly pricing date. The Company will pay a commitment fee on the unused portion of the Credit Facility payable quarterly

from

0.15

% to

0.25

% in each case depending upon the Total Funded Debt to Capitalization Ratio for the Company at the

quarterly pricing date. The Credit Agreement contains customary provisions regarding replacement of the Eurodollar Rate.

The Credit Facility is guaranteed by all the current and future wholly-owned direct and indirect domestic subsidiaries of the

Company (the “Guarantors”), and is secured by a first-priority perfected security interest in substantially all of the Company’s

and the Guarantors’ accounts, payment intangibles, instruments (including promissory notes), chattel paper, inventory

(including farm products) and deposit accounts maintained with the Administrative Agent.

The Credit Agreement for the Credit Facility contains customary covenants, including restrictions on the incurrence of liens,

incurrence of additional debt, sales of assets and other fundamental corporate changes and investments. The Credit Agreement

requires maintenance of two financial covenants: (i) a maximum Total Funded Debt to Capitalization Ratio tested quarterly of

no greater than

50

%; and (ii) a requirement to maintain Minimum Tangible Net Worth at all times of $

700

 Million plus

50

% of

net income (if net income is positive) less permitted restricted payments for each fiscal quarter after November 27, 2021.

Additionally, the Credit Agreement requires that Fred R. Adams Jr.’s spouse, natural children, sons-in-law or grandchildren, or

any trust, guardianship, conservatorship or custodianship for the primary benefit of any of the foregoing, or any family limited

partnership, similar limited liability company or other entity that

100

% of the voting control of such entity is held by any of the

foregoing, shall maintain at least

50

% of the Company's voting stock. Failure to satisfy any of these covenants will constitute a

default under the terms of the Credit Agreement. Further, under the terms of the Credit Agreement, payment of dividends under

the Company's current dividend policy of

one-third

 of the Company's net income computed in accordance with GAAP and

payment of other dividends or repurchases by the Company of its capital stock is allowed, as long as after giving effect to such

dividend payments or repurchases no default has occurred and is continuing and the sum of cash and cash equivalents of the

Company and its subsidiaries plus availability under the Credit Facility equals at least $

50

 million.

The Credit Agreement also includes customary events of default and customary remedies upon the occurrence of an event of

default, including acceleration of the amounts due under the Credit Facility and foreclosure of the collateral securing the Credit

Facility.

At February 26, 2022, we were in compliance with the covenant requirements of the Credit Facility.

14

Note 8 - Equity

The following reflects equity activity for the thirteen and thirty-nine weeks ended February 26, 2022 and February 27, 2021 (in

thousands):

Thirteen Weeks Ended February 26, 2022

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum. Other

Retained

Noncontrolling

Amount

Amount

Amount

Capital

Comp. Loss

Earnings

Interest

Total

Balance at November

27, 2021

$

703

$

48

$

(27,450)

$

66,019

$

(996)

$

959,124

$

(25)

$

997,423

Other comprehensive

loss, net of tax

—

—

—

—

(417)

—

—

(417)

Stock compensation

plan transactions

—

—

(989)

890

—

—

—

(99)

Dividends

—

—

—

—

—

(6,118)

—

(6,118)

Net income (loss)

—

—

—

—

—

39,517

(63)

39,454

Balance at February

26, 2022

$

703

$

48

$

(28,439)

$

66,909

$

(1,413)

$

992,523

$

(88)

$

1,030,243

Thirteen Weeks Ended February 27, 2021

Cal-Maine Foods, Inc. Stockholders

Common Stock

Accum.

Class A

Treasury

Paid In

Other Comp.

Retained

Amount

Amount

Amount

Capital

Income (Loss)

Earnings

Total

Balance at November 28, 2020

$

703

$

48

$

(26,723)

$

62,206

$

151

$

968,325

$

1,004,710

Other comprehensive loss, net of tax

—

—

—

—

(286)

—

(286)

Stock compensation plan transactions

—

—

(826)

964

—

—

138

Dividends

—

—

—

—

—

(1,661)

(1,661)

Net income

—

—

—

—

—

13,548

13,548

Balance at February 27, 2021

$

703

$

48

$

(27,549)

$

63,170

$

(135)

$

980,212

$

1,016,449

Thirty-nine Weeks Ended February 26, 2022

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum. Other

Retained

Noncontrolling

Amount

Amount

Amount

Capital

Comp. Loss

Earnings

Interest

Total

Balance at May 29,

2021

$

703

$

48

$

(27,433)

$

64,044

$

(558)

$

975,977

$

—

$

1,012,781

Other comprehensive

loss, net of tax

—

—

—

—

(855)

—

—

(855)

Stock compensation

plan transactions

—

—

(1,006)

2,865

—

—

—

1,859

Contributions

—

—

—

—

—

—

3

3

Dividends

—

—

—

—

—

(6,118)

—

(6,118)

Net income (loss)

—

—

—

—

—

22,664

(91)

22,573

Balance at February

26, 2022

$

703

$

48

$

(28,439)

$

66,909

$

(1,413)

$

992,523

$

(88)

$

1,030,243

15

Thirty-nine Weeks Ended February 27, 2021

Cal-Maine Foods, Inc. Stockholders

Common Stock

Accum.

Class A

Treasury

Paid In

Other Comp.

Retained

Amount

Amount

Amount

Capital

Income (Loss)

Earnings

Total

Balance at May 30, 2020

$

703

$

48

$

(26,674)

$

60,372

$

79

$

975,147

$

1,009,675

Impact of ASC 326

—

—

—

—

—

422

422

Balance at May 31 2020

703

48

(26,674)

60,372

79

975,569

1,010,097

Other comprehensive loss, net of tax

—

—

—

—

(214)

—

(214)

Stock compensation plan transactions

—

—

(875)

2,793

—

—

1,918

Contributions

—

—

—

5

—

—

5

Dividends

—

—

—

—

—

(1,661)

(1,661)

Net income

—

—

—

—

—

6,304

6,304

Balance at February 27, 2021

$

703

$

48

$

(27,549)

$

63,170

$

(135)

$

980,212

$

1,016,449

Note 9 - Net Income per Common Share

Basic net income per share is based on the weighted average Common Stock and Class A Common Stock outstanding. Diluted

net income per share is based on weighted-average common shares outstanding during the relevant period adjusted for the

dilutive effect of share-based awards.

The following table provides a reconciliation of the numerators and denominators used to determine basic and diluted net

income per common share (amounts in thousands, except per share data):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

February 26, 2022

February 27, 2021

Numerator

Net income

$

39,454

$

13,548

$

22,573

$

6,304

Less: Loss attributable to noncontrolling

interest

(63)

—

(91)

—

Net income attributable to Cal-Maine

Foods, Inc.

$

39,517

$

13,548

$

22,664

$

6,304

Denominator

Weighted-average common shares

outstanding, basic

48,886

48,530

48,888

48,511

Effect of dilutive restricted shares

150

129

147

138

Weighted-average common shares

outstanding, diluted

49,036

48,659

49,035

48,649

Net income per common share attributable to

Cal-Maine Foods, Inc.

Basic

$

0.81

$

0.28

$

0.46

$

0.13

Diluted

$

0.81

$

0.28

$

0.46

$

0.13

Note 10 - Revenue Recognition

Satisfaction of Performance Obligation

Most of the Company’s revenue is derived from contracts with customers based on the customer placing an order for products.

Pricing for the most part is determined when the Company and the customer agree upon the specific order, which establishes

the contract for that order.

16

Revenues are recognized in an amount that reflects the net consideration we expect to receive in exchange for the goods. Our

shell eggs are sold at prices related to independently quoted wholesale market prices, negotiated prices or formulas related to

our costs of production. The Company’s sales predominantly contain a single performance obligation. We recognize revenue

upon satisfaction of the performance obligation with the customer, which typically occurs within days of the Company and the

customer agreeing upon the order.

Returns and Refunds

Some of our contracts include a guaranteed sale clause, pursuant to which we credit the customer’s account for product that the

customer is unable to sell before expiration. The Company records an estimate of returns and refunds by using historical return

data and comparing to current period sales and accounts receivable. The allowance is recorded as a reduction in sales with a

corresponding reduction in trade accounts receivable.

Sales Incentives Provided to Customers

The Company periodically provides incentive offers to its customers to encourage purchases. Such offers include current

discount offers (e.g., percentage discounts off current purchases), inducement offers (e.g., offers for future discounts subject to

a minimum current purchase), and other similar offers. Current discount offers, when accepted by customers, are treated as a

reduction to the sales price of the related transaction, while inducement offers, when accepted by customers, are treated as a

reduction to sales price based on estimated future redemption rates. Redemption rates are estimated using the Company’s

historical experience for similar inducement offers. Current discount and inducement offers are presented as a net amount in

‘‘Net sales.’’

Disaggregation of Revenue

The following table provides revenue disaggregated by product category (in thousands):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

February 26, 2022

February 27, 2021

Conventional shell egg sales

$

280,633

$

203,189

$

685,678

$

560,297

Specialty shell egg sales

182,945

145,210

462,319

408,537

Egg products

12,749

9,098

33,516

25,736

Other

1,158

1,583

2,682

4,619

$

477,485

$

359,080

$

1,184,195

$

999,189

Contract Costs

The Company can incur costs to obtain or fulfill a contract with a customer. If the amortization period of these costs is less than

one year, they are expensed as incurred. When the amortization period is greater than one year, a contract asset is recognized

and is amortized over the contract life as a reduction in net sales. As of February 26, 2022 and February 27, 2021, the balance

for contract assets is immaterial.

Contract Balances

The Company receives payment from customers based on specified terms that are generally less than 30 days from delivery.

There are rarely contract assets or liabilities related to performance under the contract.

17

Note 11 - Leases

Expenses related to operating leases, amortization of finance leases, right-of-use 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 Income. The Company’s lease cost consists of the following (in thousands):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 26, 2022

Operating lease cost

$

200

$

625

Finance lease cost

Amortization of right-of-use asset

$

44

$

132

Interest on lease obligations

$

6

$

20

Short term lease cost

$

1,086

$

3,221

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

As of February 26, 2022

Operating Leases

Finance Leases

Remainder fiscal 2022

$

180

$

60

2023

539

240

2024

380

217

2025

130

—

2026

26

—

2027

5

—

Total

1,260

517

Less imputed interest

(92)

(24)

Total

$

1,168

$

493

The weighted-average remaining lease term and discount rate for lease liabilities included in our Condensed Consolidated

Balance Sheet are as follows:

As of February 26, 2022

Operating Leases

Finance Leases

Weighted-average remaining lease term (years)

2.4

1.8

Weighted-average discount rate

5.9

%

4.9

%

Note 12 - Stock Based Compensation

Total stock-based compensation expense was $

3.0

 million and $

2.8

 million for the thirty-nine weeks ended February 26, 2022

and February 27, 2021, respectively.

Unrecognized compensation expense as a result of non-vested shares of restricted stock outstanding under the Amended and

Restated 2012 Omnibus Long-Term Incentive Plan at February 26, 2022 of $

8.1

 million will be recorded over a weighted

average period of

2.3

 years. Refer to Part II Item 8, Notes to Consolidated Financial Statements and Supplementary Data, Note

16: Stock Compensation Plans in our 2021 Annual Report for further information on our stock compensation plans.

18

The Company’s restricted share activity for the thirty-nine weeks ended February 26, 2022 follows:

Number of

Shares

Weighted

Average Grant

Date Fair Value

Outstanding, May 29, 2021

302,147

$

39.37

Granted

113,142

41.13

Vested

(90,778)

42.53

Forfeited

(3,932)

37.81

Outstanding, February 26, 2022

320,579

$

39.12

Note 13 - Commitments and Contingencies

Financial Instruments

The Company maintained standby letters of credit (“LOCs”) totaling $

4.1

 million at February 26, 2022, which were issued

under the Company's Credit Facility. The outstanding LOCs are for the benefit of certain insurance companies and are not

recorded as a liability on the consolidated balance sheets.

LEGAL PROCEEDINGS

State of Texas v. Cal-Maine Foods, Inc. d/b/a Wharton; and Wharton County Foods, LLC 

On April 23, 2020, the Company and its subsidiary Wharton County Foods, LLC (“WCF”) were named as defendants in State

of Texas v. Cal-Maine Foods, Inc. d/b/a Wharton; and Wharton County Foods, LLC, Cause No. 2020-25427, in the District

Court of Harris County, Texas. The State of Texas (the “State”) asserted claims based on the Company’s and WCF’s alleged

violation of the Texas Deceptive Trade Practices—Consumer Protection Act, Tex. Bus. & Com. Code §§ 17.41-17.63

(“DTPA”). The State claimed that the Company and WCF offered shell eggs at excessive or exorbitant prices during the

COVID-19 state of emergency and made misleading statements about shell egg prices. The State sought temporary and

permanent injunctions against the Company and WCF to prevent further alleged violations of the DTPA, along with over

$

100,000

 in damages. On August 13, 2020, the court granted the defendants’ motion to dismiss the State’s original petition with

prejudice. On September 11, 2020, the State filed a notice of appeal, which was assigned to the Texas Court of Appeals for the

First District. The State filed its opening brief on December 7, 2020. The Company and WCF filed their response on February

8, 2021. On February 11, 2022, the Texas Court of Appeals heard oral argument but has not issued a ruling. Management

believes the risk of material loss related to this matter to be remote.

Bell et al. v. Cal-Maine Foods et al. 

On April 30, 2020, the Company was named as one of several defendants in Bell et al. v. Cal-Maine Foods et al., Case No.

1:20-cv-461, in the Western District of Texas, Austin Division. The defendants include numerous grocery stores, retailers,

producers, and farms. Plaintiffs assert that defendants violated the DTPA by allegedly demanding exorbitant or excessive prices

for eggs during the COVID-19 state of emergency. Plaintiffs request certification of a class of all consumers who purchased

eggs in Texas sold, distributed, produced, or handled by any of the defendants during the COVID-19 state of emergency.

Plaintiffs seek to enjoin the Company and other defendants from selling eggs at a price more than 10% greater than the price of

eggs prior to the declaration of the state of emergency and damages in the amount of $

10,000

 per violation, or $

250,000

 for

each violation impacting anyone over 65 years old. On December 1, 2020, the Company and certain other defendants filed a

motion to dismiss the plaintiffs’ amended class action complaint. The plaintiffs subsequently filed a motion to strike, and the

motion to dismiss and related proceedings were referred to a United States magistrate judge. On July 14, 2021, the magistrate

judge issued a report and recommendation to the court that the defendants’ motion to dismiss be granted and the case be

dismissed without prejudice for lack of subject matter jurisdiction. On September 20, 2021, the court adopted the magistrate’s

report and recommendation in its entirety and granted defendants’ motion to dismiss plaintiffs’ first amended class action

complaint; thereafter, the court entered a final judgment in favor of the Company and certain other defendants dismissing the

case without prejudice. On October 18, 2021, plaintiffs filed a motion to alter or amend the final judgement and allow a filing

of a second amended complaint. The Company responded on November 1, 2021. The court has not ruled on the plaintiffs’

motion.

19

Kraft Foods Global, Inc. et al. v. United Egg Producers, Inc. et al. 

As previously reported, on September 25, 2008, the Company was named as one of several defendants in numerous antitrust

cases involving the United States shell egg industry. The Company settled all of these cases, except for the claims of certain

plaintiffs who sought substantial damages allegedly arising from the purchase of egg products (as opposed to shell eggs). These

remaining plaintiffs are Kraft Food Global, Inc., General Mills, Inc., and Nestle USA, Inc. (the “Egg Products Plaintiffs”) and

The Kellogg Company.

On September 13, 2019, the case with the Egg Products Plaintiffs was remanded from a multi-district litigation proceeding in

the United States District Court for the Eastern District of Pennsylvania, In re Processed Egg Products Antitrust Litigation,

MDL No. 2002, to the United States District Court for the Northern District of Illinois, Kraft Foods Global, Inc. et al. v. United

Egg Producers, Inc. et al., Case No. 1:11-cv-8808, for trial. The Egg Products Plaintiffs allege that the Company and other

defendants violated Section 1 of the Sherman Act, 15. U.S.C. § 1, by agreeing to limit the production of eggs and thereby

illegally to raise the prices that plaintiffs paid for processed egg products. In particular, the Egg Products Plaintiffs are attacking

certain features of the United Egg Producers animal-welfare guidelines and program used by the Company and many other egg

producers. The Egg Products Plaintiffs seek to enjoin the Company and other defendants from engaging in antitrust violations

and seek treble money damages. The parties filed a joint status report on May 18, 2020. On August 4, 2021, by docket entry,

the court instructed the parties to jointly submit a second status report to the court that included a proposed schedule for

preparing a final pretrial order. On August 25, 2021, the parties filed a joint status report, and on August 26, 2021, the court, by

docket entry, informed the parties that the need to discuss issues was no longer necessary and that a scheduled August 30, 2021,

status hearing was stricken. No trial schedule has yet been entered by the court.

In addition, on October 24, 2019, the Company entered into a confidential settlement agreement with The Kellogg Company

dismissing all claims against the Company for an amount that did not have a material impact on the Company’s financial

condition or results of operations. On November 11, 2019, a stipulation for dismissal was filed with the court, but the court has

not yet entered a judgment on the filing.

The Company intends to continue to defend the remaining case with the Egg Products Plaintiffs as vigorously as possible based

on defenses which the Company believes are meritorious and provable. Adjustments, if any, which might result from the

resolution of this remaining matter with the Egg Products Plaintiffs have not been reflected in the financial statements. While

management believes that there is still a reasonable possibility of a material adverse outcome from the case with the Egg

Products Plaintiffs, at the present time, it is not possible to estimate the amount of monetary exposure, if any, to the Company

due to a range of factors, including the following, among others: the matter is in the early stages of preparing for trial following

remand; any trial will be before a different judge and jury in a different court than prior related cases; there are significant

factual issues to be resolved; and there are requests for damages other than compensatory damages (i.e., injunction and treble

money damages).

State of Oklahoma Watershed Pollution Litigation

On June 18, 2005, the State of Oklahoma filed suit, in the United States District Court for the Northern District of Oklahoma,

against Cal-Maine Foods, Inc. and Tyson Foods, Inc. and affiliates, Cobb-Vantress, Inc., Cargill, Inc. and its affiliate, George’s,

Inc. and its affiliate, Peterson Farms, Inc. and Simmons Foods, Inc. The State of Oklahoma claims that through the disposal of

chicken litter the defendants have polluted the Illinois River Watershed. This watershed provides water to eastern Oklahoma.

The complaint seeks injunctive relief and monetary damages, but the claim for monetary damages has been dismissed by the

court. Cal-Maine Foods, Inc. discontinued operations in the watershed. Accordingly, we do not anticipate that Cal-Maine

Foods, Inc. will be materially affected by the request for injunctive relief unless the court orders substantial affirmative

remediation. Since the litigation began, Cal-Maine Foods, Inc. purchased

100

% of the membership interests of Benton County

Foods, LLC, which is an ongoing commercial shell egg operation within the Illinois River Watershed. Benton County Foods,

LLC is not a defendant in the litigation.

The trial in the case began in September 2009 and concluded in February 2010. The case was tried without a jury, and the court

has not yet issued its ruling. Management believes the risk of material loss related to this matter to be remote.

Other Matters

In addition to the above, the Company is involved in various other claims and litigation incidental to its business. Although the

outcome of these matters cannot be determined with certainty, management, upon the advice of counsel, is of the opinion that

the final outcome should not have a material effect on the Company’s consolidated results of operations or financial position.

20

Note 14 - Related Party Transaction

On August 24, 2020, Mrs. Jean Reed Adams, the wife of the Company’s late founder Fred R. Adams, Jr., and the Fred R.

Adams, Jr. Daughters’ Trust, dated July 20, 2018 (the “Daughters’ Trust”), of which the daughters of Mr. Adams are

beneficiaries (together, the “Selling Stockholders”), completed a registered secondary public offering of

6,900,000

 shares of

Common Stock held by them, pursuant to a previously disclosed Agreement Regarding Common Stock (the “Agreement”) filed

as an exhibit to our 2021 Annual Report. Mrs. Adams and the Daughters’ Trust advised the Company that they were conducting

the offering in order to pay estate taxes related to the settlement of Mr. Adam’s estate and to obtain liquidity. The public

offering was made pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-227742),

including the Prospectus contained therein dated October 9, 2018, and a related Prospectus Supplement dated August 19, 2020,

each of which is on file with the Securities and Exchange Commission. The public offering involved only the sale of shares of

Common Stock that were already outstanding, and thus the Company did not issue any new shares or raise any additional

capital in the offering. The expenses of the offering (not including the underwriting discount and legal fees and expenses of

legal counsel for the Selling Stockholders, which were paid by the Selling Stockholders) paid by the Company were $

1.1

million. Pursuant to the Agreement, the Selling Stockholders reimbursed the Company $

551

 thousand.

21

ITEM 2. MANAGEMENT’S

DISCUSSION

AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

The following should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results

of Operations included in Part II Item 7 of the Company’s Annual Report on Form 10-K for its fiscal year ended May 29, 2021

(the “2021 Annual Report”), and the accompanying financial statements and notes included in Part II Item 8 of the 2021 Annual

Report and in

 of this Quarterly Report on Form 10-Q (“Quarterly Report”).

This report contains numerous forward-looking statements within the meaning of Section 27A of the Securities Act of 1933

(the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) relating to our shell egg

business, including estimated future production data, expected construction schedules, projected construction costs, potential

future supply of and demand for our products, potential future corn and soybean price trends, potential future impact on our

business of the COVID-19 pandemic, potential future impact on our business of new legislation, rules or policies, potential

outcomes of legal proceedings, and other projected operating data, including anticipated results of operations and financial

condition. Such forward-looking statements are identified by the use of words such as “believes,” “intends,” “expects,”

“hopes,” “may,” “should,” “plans,” “projected,” “contemplates,” “anticipates,” or similar words. Actual outcomes or results

could differ materially from those projected in the forward-looking statements. The forward-looking statements are based on

management’s current intent, belief, expectations, estimates, and projections regarding the Company and its industry. These

statements are not guarantees of future performance and involve risks, uncertainties, assumptions, and other factors that are

difficult to predict and may be beyond our control. The factors that could cause actual results to differ materially from those

projected in the forward-looking statements include, among others, (i) the risk factors set forth in Part I Item 1A of the 2021

Annual Report (ii) the risks and hazards inherent in the shell egg business (including disease, pests, weather conditions, and

potential for product recall), including but not limited to the current outbreak of highly pathogenic avian influenza (HPAI)

affecting poultry in the U.S., Canada and other countries (iii) changes in the demand for and market prices of shell eggs and

feed costs, (iv) our ability to predict and meet demand for cage-free and other specialty eggs, (v) risks, changes, or obligations

that could result from our future acquisition of new flocks or businesses and risks or changes that may cause conditions to

completing a pending acquisition not to be met, (vi) risks relating to the evolving COVID-19 pandemic, including without

limitation increased costs and rising inflation and interest rates, and (vii) adverse results in pending litigation matters. Readers

are cautioned not to place undue reliance on forward-looking statements because, while we believe the assumptions on which

the forward-looking statements are based are reasonable, there can be no assurance that these forward-looking statements will

prove to be accurate. Further, forward-looking statements included herein are only made as of the respective dates thereof, or if

no date is stated, as of the date hereof. Except as otherwise required by law, we disclaim any intent or obligation to update

publicly these forward-looking statements, whether because of new information, future events, or otherwise.

GENERAL

Cal-Maine Foods, Inc. (the “Company,” “we,” “us,” “our”) is primarily engaged in the production, grading, packaging,

marketing and distribution of fresh shell eggs. Our operations are fully integrated under one operating segment. We are the

largest producer and distributor of fresh shell eggs in the United States (“U.S.”). Our total flock of approximately 42.7 million

layers and 9.4 million pullets and breeders is the largest in the U.S. We sell most of our shell eggs to a diverse group of

customers, including national and regional grocery store chains, club stores, companies servicing independent supermarkets in

the U.S., food service distributors and egg product consumers in states across the southwestern, southeastern, mid-western and

mid-Atlantic regions of the U.S.

We are a member of the Eggland’s Best, Inc. (“EB”) cooperative and produce, market, and distribute EB and Land O'Lakes

branded eggs, both directly and through our joint ventures Specialty Eggs, LLC and Southwest Specialty Eggs, LLC, under

exclusive license agreements in Alabama, Arizona, Florida, Georgia, Louisiana, Mississippi and Texas and in portions of

Arkansas, California, Nevada, North Carolina, Oklahoma and South Carolina. We also have an exclusive license in New York

City in addition to exclusivity in select New York metropolitan areas, including areas within New Jersey and Pennsylvania.

Our operating results are materially impacted by market prices for eggs and feed grains (corn and soybean meal), which are

highly volatile, independent of each other, and out of our control. Generally, higher market prices for eggs have a positive

impact on our financial results while higher market prices for feed grains have a negative impact on our financial results.

Although we use a variety of pricing mechanisms in pricing agreements with our customers, we sell most of our conventional

shell eggs based on formulas that consider, in varying ways, independently quoted regional wholesale market prices for shell

eggs or formulas related to our costs of production which include the cost of corn and soybean meal. As an example of the

volatility in the market prices of shell eggs, the Urner-Barry White Large, Southeast Regional Egg Market Price per dozen eggs

(“UB southeast large index”) for the first three quarters of fiscal year 2022 ranged from a low of $1.00 in June 2021 to a high of

$2.06 in February 2022.

22

Generally, we purchase primary feed ingredients, mainly corn and soybean meal, at current market prices. Corn and soybean

meal are commodities and are subject to volatile price changes due to weather, various supply and demand factors,

transportation and storage costs, speculators, and agricultural, energy and trade policies in the U.S. and internationally. 

An important competitive advantage for Cal-Maine Foods is our ability to meet our customers’ evolving needs with a favorable

product mix of conventional and specialty eggs, including cage-free, organic and other specialty offerings, as well as egg

products. We have also enhanced our efforts to provide free-range and pasture-raised eggs that meet consumers’ evolving

choice preferences. While a small part of our current business, the free-range and pasture-raised eggs we produce and sell

represent attractive offerings to a subset of consumers, and therefore our customers, and help us continue to serve as the trusted

provider of quality food choices.

Specialty shell eggs have been a significant and growing portion of the market. In recent years, a significant number of large

restaurant chains, food service companies and grocery chains, including our largest customers, announced goals to transition to

an exclusively cage-free egg supply chain by specified future dates. Additionally, several states, representing approximately

24% of the U.S. total population according to the 2020 U.S. Census, have passed legislation requiring that all eggs sold in those

states must be cage-free eggs by specified future dates, and other states are considering such legislation. In California and

Massachusetts, which represent about 14% of the total U.S. population according to the 2020 U.S. Census, cage-free legislation

went into effect January 1, 2022. For additional information, see the 2021 Annual Report, Part I, Item 1, “Business – Specialty

Eggs,” “Business – Growth Strategy” and “Business – Government Regulation,” and the first risk factor in Part I Item 1A,

“Risk Factors” under the sub-heading “Legal and Regulatory Risk Factors.”

Retail sales of shell eggs historically have been highest during the fall and winter months and lowest during the summer

months. Prices for shell eggs fluctuate in response to seasonal demand factors and a natural increase in egg production during

the spring and early summer. Historically, shell egg prices tend to increase with the start of the school year and tend to be

highest prior to holiday periods, particularly Thanksgiving, Christmas and Easter. Consequently, and all other things being

equal, we would expect to experience lower selling prices, sales volumes and net income (and may incur net losses) in our first

and fourth fiscal quarters ending in August/September and May/June, respectively. Because of the seasonal and quarterly

fluctuations, comparisons of our sales and operating results between different quarters within a single fiscal year are not

necessarily meaningful comparisons.

COVID-19

Since early 2020, the coronavirus (“COVID-19”) outbreak, characterized as a pandemic by the World Health Organization on

March 11, 2020, has caused significant disruptions in international and U.S. economies and markets. We understand the

challenges and difficult economic environment facing families in the communities where we live and work, and we are

committed to helping where we can. We have provided food assistance to those in need by donating approximately 679

thousand dozen eggs to date in fiscal 2022. We believe we are taking all reasonable precautions in the management of our

operations in response to the COVID-19 pandemic. Our top priority is the health and safety of our employees, who work hard

each day to produce eggs for our customers. As part of the nation’s food supply, we work in a critical infrastructure industry,

and we believe we have a special responsibility to maintain our normal work schedule. As such, we are in regular

communication with our managers across our operations and continue to closely monitor the situation in our facilities and in the

communities where we live and work. We have implemented procedures designed to protect our employees, taking into account

guidelines published by the Centers for Disease Control and other government health agencies, and we have strict sanitation

protocols and biosecurity measures in place throughout our operations with restricted access to visitors. There are no known

indications that COVID-19 affects chickens or can be transferred through the food supply. 

We continue to proactively monitor and manage operations during the COVID-19 pandemic, including additional related costs

that we incurred or may incur in the future. The pandemic had a negative impact on our business through disruptions in the

supply chain such as increased costs and limited availability of packaging supplies, and increased labor costs and medical costs

and, more recently, inflation.

In the third quarters of fiscal 2022 and 2021, we spent approximately $534 thousand and $397 thousand (excluding medical

insurance claims) related to the pandemic and its effects, respectively. The majority of these expenses in fiscal 2022 resulted

from additional labor costs and increased cost of packaging materials, primarily reflected in cost of sales. In fiscal 2021, most

of these expenses related to additional labor costs, primarily reflected in cost of sales. Medical insurance claims related to

COVID-19 paid during the third quarter of fiscal 2022 were an additional $424 thousand as compared to $322 thousand paid in

the comparable quarter in fiscal 2021.

23

For the thirty-nine weeks ended 2022 and 2021, we spent approximately $1.8 million (excluding medical insurance claims)

related to the pandemic and its effects. The majority of these expenses in fiscal 2022 resulted from additional labor costs and

increased cost of packaging materials, primarily reflected in cost of sales. In fiscal 2021, most of these expenses related to

additional labor costs, primarily reflected in cost of sales. Medical insurance claims related to COVID-19 paid during the thirty-

nine weeks ended 2022 were an additional $1.6 million as compared to $1.1 million paid in the comparable period in fiscal

2021.

EXECUTIVE OVERVIEW

For the third quarter of fiscal 2022, we recorded a gross profit of $91.6 million compared to $47.5 million for the same period

of fiscal 2021, with the increase due primarily to higher shell egg prices and increased volume of specialty eggs. Our total

dozens sold increased 2.8% to 287.7 million dozen shell eggs for the third quarter of fiscal 2022 compared to 279.7 million

dozen for the same period of fiscal 2021. For the third quarter of fiscal 2022, conventional dozens sold decreased 5.2% and

specialty dozens sold increased 24.1% as compared to the same quarter in fiscal 2021. Specialty dozens sold increased as more

cage-free facilities came into production, retailers continue shift to selling cage-free products and cage-free legislation went into

full effect in California on January 1, 2022.

The daily average price for the UB southeast large index for the third quarter of fiscal 2022 increased 46.8% from the

comparable period in the prior year. Our net average selling price per dozen for the third quarter of fiscal 2022 was $1.612

compared to $1.246 in the prior-year period. Hen numbers reported by the USDA as of March 1, 2022, were 322.7 million,

which is approximately 5.4 million less hens than the comparable period of the prior year. The USDA also reported that the

hatch from October 2021 through February 2022 decreased 5.5% compared to the prior-year period. As of March 1, 2022,

table-type eggs in incubators totaled 55.4 million, a decrease of 7.6% versus the prior-year period.

We are closely monitoring the recently reported outbreaks of highly pathogenic avian influenza (“HPAI”). According to the

U.S. Centers for Disease Control and Prevention, these detections

do not present an immediate public health concern

. There

have been no positive tests for HPAI at any Cal-Maine Foods’ owned or contracted production facility to date. As of March 28,

2022, the USDA division of Animal and Plant Health Inspection Service (“APHIS”), reported that approximately 11.5 million

commercial layer hens or about 3.6% of the table egg layer flock based on February 2022 reported layer numbers, have been

depopulated due to HPAI. Pullets impacted comprise approximately 830,000, or about 0.7 percent of the February 2022 pullet

inventory. We believe we have implemented and continue to maintain robust biosecurity programs across our locations. We are

also working closely with federal, state and local government officials and focused industry groups to mitigate the risk of this

and future outbreaks and effectively manage our response, if needed. 

Our farm production costs per dozen produced for the third quarter of fiscal 2022 increased 16.9%, or $0.132, compared to the

third quarter of fiscal 2021. This increase was primarily due to increased prices for feed ingredients. For the third quarter of

fiscal 2022, the average Chicago Board of Trade (“CBOT”) daily market price was $6.13 per bushel for corn and $412 per ton

for soybean meal, representing an increase of 23.5% and a decrease of 2.5%, respectively, compared to the average daily CBOT

prices for the comparable period in the prior year. Other farm production costs for the third quarter of fiscal 2022 increased

11.8% versus the comparable period in the prior fiscal year, driven by higher flock amortization and facility expense.

Effective May 30, 2021, we acquired the remaining 50% membership interest in Red River Valley Egg Farm, LLC (“Red

River”). Red River owns and operates a specialty shell egg production complex with approximately 1.7 million cage-free laying

hens, cage-free pullet capacity, feed mill, processing plant, related offices and outbuildings and related equipment located on

approximately 400 acres near Bogata, Texas. For additional information, see

 of the Notes to Condensed

Consolidated Financial Statements included in this Quarterly Report.

During October 2021, we announced that our Board of Directors approved a strategic investment that will specialize in high-

value commercial product solutions targeting specific needs in the food industry. The initial focus will include hard-cooked

eggs. The new entity, located in Neosho, Missouri, will operate as MeadowCreek Foods, LLC (“MeadowCreek”). We will

capitalize MeadowCreek with up to $18.5 million in debt and equity to purchase property and equipment and to fund working

capital, and we will retain a controlling interest in the venture. We will serve as the preferred provider to supply specialty and

conventional eggs that MeadowCreek needs to manufacture egg products. MeadowCreek’s marketing plan is designed to

extend our reach in the foodservice and retail marketplace and bring new opportunities in the restaurant, institutional and

industrial food products arenas.

Also, during October 2021, we announced that our Board of Directors approved a $23.0 million capital project to expand our

cage-free egg production at our Okeechobee, Florida, production facility. The project is designed to include the construction of

two cage-free layer houses and one cage-free pullet house with capacity for approximately 400,000 cage-free hens and 210,000

pullets, respectively. Construction has commenced, with first pullet placements planned by mid-May 2022 and the first layer

24

house planned to be finished by October 1, 2022, with project completion expected by February 1, 2023. The Company plans to

fund the project through a combination of available cash on hand, investments and operating cash flow.

Effective December 5, 2021, we made an additional investment in our joint venture Southwest Specialty Eggs, LLC to acquire

warehouse and distribution capability to expand Southwest Specialty Eggs, LLC’s customer base in the southern

California, Arizona and Nevada markets. This strategic investment is proving to be incrementally accretive as additional cases

of specialty and cage-free eggs began distribution through the warehouse in early December as customers prepared for the

California’s January 1, 2022 cage-free mandate.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain items from our Condensed Consolidated Statements of Income

expressed as a percentage of net sales.

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

February 26, 2022

February 27, 2021

Net sales

100.0

%

100.0

%

100.0

%

100.0

%

Cost of sales

80.8

%

86.8

%

88.0

%

87.7

%

Gross profit

19.2

%

13.2

%

12.0

%

12.3

%

Selling, general and administrative

11.0

%

13.3

%

12.4

%

13.6

%

(Gain) loss on disposal of fixed assets

(0.1)

%

0.1

%

(0.2)

%

—

%

Operating income (loss)

8.3

%

(0.2)

%

(0.2)

%

(1.3)

%

Total other income, net

2.8

%

3.4

%

1.8

%

1.5

%

Income before income taxes

11.1

%

3.2

%

1.6

%

0.2

%

Income tax expense (benefit)

2.8

%

(0.5)

%

(0.2)

%

(0.4)

%

Net income

8.3

%

3.7

%

1.8

%

0.6

%

NET SALES

Total net sales for the third quarter of fiscal 2022 were $477.5 million compared to $359.1 million for the same period of fiscal

2021.

Net shell egg sales represented 97.3% and 97.5% of total net sales for the third quarters of fiscal 2022 and 2021, respectively.

Shell egg sales classified as “Other” represent sales of hard-cooked eggs, hatching eggs and other miscellaneous products

included with our shell egg operations. 

Total net sales for the thirty-nine weeks ended February 26, 2022 were $1,184.2 million, compared to $999.2 million for the

comparable period of fiscal 2021.

Net shell egg sales represented 97.2% and 97.4% of total net sales for the thirty-nine weeks ended February 26, 2022 and

February 27, 2021, respectively. 

Total conventional dozens sold for the first, second and third quarters were 183.9 million, 192.1 million and 192.5 million,

respectively. Total specialty dozens sold for the first, second and third quarters were 70.8 million, 77.4 million and 95.1

million, respectively.

25

The table below presents an analysis of our conventional and specialty shell egg sales (in thousands, except percentage data):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

February 26, 2022

February 27, 2021

Total net sales

$

477,485

$

359,080

$

1,184,195

$

999,189

Conventional

$

280,633

60.4

%

$

203,189

58.0

%

$

685,678

59.6

%

$

560,297

57.5

%

Specialty

182,945

39.4

%

145,210

41.5

%

462,319

40.2

%

408,537

42.0

%

Egg sales, net

463,578

99.8

%

348,399

99.5

%

1,147,997

99.8

%

968,834

99.5

%

Other

1,158

0.2

%

1,583

0.5

%

2,682

0.2

%

4,619

0.5

%

Net shell egg sales

$

464,736

100.0

%

$

349,982

100.0

%

$

1,150,679

100.0

%

$

973,453

100.0

%

Net shell egg sales as a

percent of total net sales

97.3

%

97.5

%

97.2

%

97.4

%

Dozens sold:

Conventional

192,511

66.9

%

203,070

72.6

%

568,511

70.0

%

599,625

73.4

%

Specialty

95,140

33.1

%

76,645

27.4

%

243,310

30.0

%

217,735

26.6

%

Total dozens sold

287,651

100.0

%

279,715

100.0

%

811,821

100.0

%

817,360

100.0

%

Net average selling price per

dozen:

Conventional

$

1.458

$

1.001

$

1.206

$

0.934

Specialty

$

1.923

$

1.895

$

1.900

$

1.876

All shell eggs

$

1.612

$

1.246

$

1.414

$

1.185

Egg products sales: 

Egg products net sales

12,749

9,098

33,516

25,736

Pounds sold

15,947

15,569

47,225

46,565

Net average selling price per

pound

0.799

0.584

0.710

0.553

Shell egg net sales

Third Quarter – Fiscal 2022 vs. Fiscal 2021

-

In the third quarter of fiscal 2022, conventional egg sales increased $77.4 million, or 38.1%, compared to the third

quarter of fiscal 2021, primarily due to the increase in price for conventional shell eggs, partially offset by a decrease

in volume of conventional eggs sold. Changes in price resulted in a $88.0 million increase and the change in volume

resulted in a $10.6 million decrease in net sales, respectively.

-

We believe prices for conventional eggs were positively impacted by a better alignment of the conventional production

layer hen flock and customer and consumer demand. According to reports from the USDA, the average number of

hens producing white and brown conventional eggs for February 2022 decreased 31.7 million, or 13.1%, versus the

prior-year comparable period. USDA Agriculture Marketing Service reported shell eggs broken for foodservice and

further processing increased 7.9% compared to the comparable prior-year period. We believe lower conventional egg

prices in the prior-year period were primarily tied to a surplus of conventional eggs entering the retail channel from the

foodservice channel exceeding demand during this phase of the pandemic.

-

Conventional egg volume sales decreased 5.2%. We believe many consumers have evolved their preferences to

purchase higher-priced specialty eggs for at-home meal preparation due to the perceived health and welfare benefits of

specialty eggs, various state laws mandating the sale of cage-free and the public commitments by most retailers to sell

more cage-free products. Per Information Resources, Inc. (“IRI”), Total US – Multi Outlet, conventional white shell

egg dozens sales decreased 13.7% during the latest 13 weeks ended February 27, 2022 versus the prior-year

comparable period.

-

Specialty egg sales increased $37.7 million, or 26.0%, in the third quarter of fiscal 2022 compared to the third quarter

of fiscal 2021, primarily due to a 24.1% increase in the volume of specialty eggs sold, which resulted in a $35.0

million increase in net sales. Per IRI, Total US – Multi Outlet for the latest 13 weeks ended February 27, 2022, cage-

free eggs dozens sold (including free-range, pasture-raised and organic) increased 21.3%. We believe this increase in

26

demand is due to California’s cage-free mandate going into-effect January 1, 2022, as well as more retailers’ shifting

to selling more cage-free products.

-

Our specialty egg sales in the third quarter of fiscal 2022 versus the prior-year period benefitted from our acquisition

of the remaining 50% membership interest in Red River, which helped drive our cage-free egg sales. Our cage-free

sales also benefitted from our continued investment in expanded cage-free capabilities as additional cage-free

production capacity came online during the quarter. Cage-free egg sales for the first, second and third quarters of fiscal

2022 were 22.3%, 22.4% and 24.1% of our total net shell egg sales, respectively.

Thirty-nine weeks – Fiscal 2022 vs. Fiscal 2021

-

For the thirty-nine weeks ended February 26, 2022, conventional egg sales increased $125.4 million or 22.4%

compared to the same period of fiscal 2021, primarily due to the increase in price, partially offset by a decrease in

volume of conventional eggs sold. Changes in price resulted in a $154.6 million increase and change in volume

resulted in a $29.1 million decrease in net sales, respectively.

-

We believe prices for conventional eggs were positively impacted by a better alignment of the conventional production

layer hen flock and customer and consumer demand. USDA Agriculture Marketing Service reported shell eggs broken

for foodservice and further processing increased 10.2% compared to the comparable prior-year period. We believe

lower conventional egg prices in the prior-year period were primarily tied to a surplus of conventional eggs entering

the retail channel from the foodservice channel exceeding demand during this phase of the pandemic.

-

The decrease in volume of conventional eggs sold was primarily due to elevated retail demand during the first half of

fiscal 2021 due to consumers’ preferences to purchase eggs for in-home meal preparation due to the pandemic. We

saw this consumer preference begin to shift in the fourth quarter of fiscal 2021 as consumers began to resume out-of-

home dining and prepare fewer meals at home. Per Information Resources, Inc. (“IRI”), Total US – Multi Outlet,

conventional white shell egg dozens sales decreased 12.6% during the latest 39 weeks ended February 27, 2022 versus

the prior-year comparable period.

-

Specialty egg sales increased $53.8 million, or 13.2%, for the thirty-nine weeks ended February 26, 2022 compared to

the same period of fiscal 2021, primarily due to an 11.7% increase in the volume of specialty dozens sold and a slight

increase in specialty egg prices. Changes in price resulted in a $5.8 million increase and change in volume resulted in a

$48.0 million increase in net sales, respectively. We also benefitted from our additional cage-free production capacity.

Cage-free egg sales for the thirty-nine weeks ended February 26, 2022 were 23.0% of our total net shell egg sales.

Egg products net sales

Third Quarter – Fiscal 2022 vs. Fiscal 2021

-

Egg products net sales increased $3.7 million or 40.1% for the third quarter of fiscal 2022 compared to the same

period of fiscal 2021, primarily due to a 36.8% selling price increase, which had a $3.4 million positive impact on net

sales.

-

Selling prices for egg products in the third quarter of fiscal 2021 were negatively impacted by a decline in foodservice

demand due to the pandemic. Our egg products net average selling price increased in the third quarter of fiscal 2022

compared to the same period in fiscal 2021 as foodservice channel demand has begun to shift more to pre-pandemic

levels.

Thirty-nine weeks – Fiscal 2022 vs. Fiscal 2021

-

Egg products net sales increased $7.8 million or 30.2%, primarily due to a 28.4% selling price increase compared to

the first thirty-nine weeks of fiscal 2021, which had a $7.4 million positive impact on net sales.

-

Our egg products net average selling price increased in the thirty-nine weeks end February 26, 2022, compared to the

same period in fiscal 2021 as foodservice channel demand has begun to shift more towards pre-pandemic levels.

Selling prices for egg products in the thirty-nine weeks ended February 27, 2021 were negatively impacted by a

decline in foodservice demand during the more restrictive phases of governmental and business shutdowns due to the

pandemic.

27

COST OF SALES

Costs of sales for the third quarter of fiscal 2022 were $385.9 million compared to $311.6 million for the same period of fiscal

2021. For the thirty-nine weeks ended February 26, 2022 and February 27, 2021, total cost of sales were $1,042.2 million and

$876.5 million, respectively.

Cost of sales consists of costs directly related to producing, processing and packing shell eggs, purchases of shell eggs from

outside producers, processing and packing of liquid and frozen egg products and other non-egg costs. Farm production costs are

those costs incurred at the egg production facility, including feed, facility, hen amortization, and other related farm production

costs.

The following table presents the key variables affecting our cost of sales (in thousands, except cost per dozen data):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26,

2022

February 27,

2021

%

Change

February 26,

2022

February 27,

2021

%

Change

Cost of Sales:

Farm production

$

239,389

$

190,883

25.4

%

$

668,855

$

531,877

25.8

%

Processing, packaging, and warehouse

77,116

63,640

21.2

211,649

187,014

13.2

Egg purchases and other (including

change in inventory)

59,135

50,443

17.2

133,968

137,001

(2.2)

Total shell eggs

375,640

304,966

23.2

1,014,472

855,892

18.5

Egg products

10,263

6,597

55.6

27,749

20,565

34.9

Total

$

385,903

$

311,563

23.9

%

$

1,042,221

$

876,457

18.9

%

Farm production costs (per dozen

produced)

Feed

$

0.562

$

0.467

20.3

%

$

0.546

$

0.422

29.4

%

Other

$

0.350

$

0.313

11.8

%

$

0.350

$

0.318

10.1

%

Total

$

0.912

$

0.780

16.9

%

$

0.896

$

0.740

21.1

%

Outside egg purchases (average cost per

dozen)

$

1.75

$

1.26

38.9

%

$

1.57

$

1.23

27.6

%

Dozens produced

264,433

248,130

6.6

%

757,677

731,205

3.6

%

Percent produced to sold

91.9%

88.7%

3.6

%

93.3%

89.5%

4.2

%

Farm Production

Third Quarter – Fiscal 2022 vs. Fiscal 2021

-

Feed costs per dozen produced increased 20.3% in the third quarter of fiscal 2022 compared to the third quarter of

fiscal 2021. This increase was primarily due to increased prices for corn, our primary feed ingredient. For the third

quarter of fiscal 2022, the average daily Chicago Board of Trade (“CBOT”) market price was $6.13 per bushel for

corn representing an increase of 23.5 percent compared to the average daily CBOT prices for the third quarter of fiscal

2021. 

-

Other farm production costs increased due to higher flock amortization, primarily from an increase in our cage-free

production, which has higher capitalized costs. Also, our higher feed costs, which began to rise in our third quarter of

fiscal 2021, are capitalized in our flocks during pullet production and increased our amortization expense.

-

We had higher facility expense as more cage-free facilities came into production.

Thirty-nine weeks – Fiscal 2022 vs. Fiscal 2021

-

Feed costs per dozen produced increased 29.4% in the thirty-nine weeks ended February 26, 2022 compared to the

same period of fiscal 2021, primarily due to higher feed ingredient prices resulting from weather-related shortfalls in

production and yields, which have placed additional pressure on domestic supplies.

-

Other farm production costs increased due to higher flock amortization, primarily from an increase in our cage-free

production, which has higher capitalized costs. Also, higher feed costs, which began to rise in our third quarter of

fiscal 2021, are capitalized in our flocks during pullet production and increased our amortization expense.

28

-

We had higher facility expense as more cage-free facilities came into production.

Processing, packaging, and warehouse

Third Quarter – Fiscal 2022 vs. Fiscal 2021

-

Cost of packaging materials increased 17.7% compared to the third quarter of fiscal 2021 as supply chain constraints

initially caused by the pandemic increased costs for packaging products and manufacturers implemented pandemic

surcharges. Costs also increased due to rising inflation.

-

Labor costs increased 16.3% due to wage increases in response to labor shortages, primarily due to the pandemic and

its effects.

-

Dozens processed increased 6.6% compared to the third quarter of fiscal 2021, which resulted in a $4.5 million

increase in costs.

Thirty-nine weeks – Fiscal 2022 vs. Fiscal 2021

-

Cost of packaging materials increased 10.8% compared to the thirty-nine weeks ended February 27, 2021 as supply

chain constraints initially caused by the pandemic increased costs for packaging products and manufacturers

implemented pandemic surcharges. Costs also increased due to rising inflation.

-

Labor costs increased 15.3% due to wage increases in response to labor shortages, primarily due to the pandemic and

its effects.

-

Dozens processed increased 3.2% compared to the thirty-nine weeks ended February 27, 2021, which resulted in $6.1

million increase in costs.

Egg purchases and other (including change in inventory)

Third Quarter – Fiscal 2022 vs. Fiscal 2021

-

Costs in this category increased primarily due to higher egg prices, partially offset by the decrease in the volume of

outside egg purchases, as our percentage of produced to sold increased to 91.9% from 88.7%.

Thirty-nine weeks – Fiscal 2022 vs. Fiscal 2021

-

Costs in this category decreased primarily due to the decrease in the volume of outside egg purchases, as our

percentage of produced to sold increased to 93.3% from 89.5%, partially offset by higher egg prices.

Looking forward throughout the rest of fiscal 2022, market indications point to higher corn and soybean prices and higher

volatility tied to the Russia-Ukraine war and higher export demand.

GROSS PROFIT 

Gross profit for the third quarter of fiscal 2022 was $91.6 million compared to $47.5 million for the same period of fiscal 2021.

The increase of $44.1 million was primarily due to higher egg prices as well as the increased volume of specialty eggs, partially

offset by the increased cost of feed ingredients and processing costs.

Gross profit for the thirty-nine weeks ended February 26, 2022 was $142.0 million compared to $122.7 million for the same

period of fiscal 2021. The increase of $19.3 million was primarily due to higher egg prices as well as the increased volume of

specialty eggs, partially offset by the increased cost of feed ingredients and processing costs.

29

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

Selling, general, and administrative expenses ("SGA") include costs of marketing, distribution, accounting and corporate

overhead. The following table presents an analysis of our SGA expenses (in thousands):

Thirteen Weeks Ended

February 26, 2022

February 27, 2021

$ Change

% Change

Specialty egg expense

$

17,318

$

16,162

$

1,156

7.2

%

Delivery expense

16,440

13,359

3,081

23.1

%

Payroll, taxes and benefits

11,398

10,195

1,203

11.8

%

Stock compensation expense

1,007

964

43

4.5

%

Other expenses

6,523

6,976

(453)

(6.5)

%

Total

$

52,686

$

47,656

$

5,030

10.6

%

Third Quarter – Fiscal 2022 vs. Fiscal 2021

Specialty egg expense

-

Specialty egg expense which includes franchise fees, advertising and promotion costs generally tracks with specialty

egg volumes which were up 24.1% for the third quarter of fiscal 2022 compared to the same period of fiscal 2021. 

Specialty dozens sold to outside distributors including unconsolidated affiliates, Specialty Eggs, LLC and Southwest

Specialty Eggs, LLC, increased which reduced related costs that we generally incur for specialty egg sales to retailers. 

Delivery expense

-

The increased delivery expense is primarily due to the increase in fuel and labor costs for both our fleet and contract

trucking.

Payroll, taxes and benefits expense

-

The increase in payroll, taxes and benefits is primarily due to increased wages for standard annual raises as well as the

addition of Red River. The accrual for anticipated performance-based bonuses also increased.

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

$ Change

% Change

Specialty egg expense

$

45,295

$

42,898

$

2,397

5.6

%

Delivery expense

44,771

38,905

5,866

15.1

%

Payroll, taxes and benefits

32,640

31,526

1,114

3.5

%

Stock compensation expense

2,983

2,789

194

7.0

%

Other expenses

21,302

19,376

1,926

9.9

%

Total

$

146,991

$

135,494

$

11,497

8.5

%

Thirty-nine weeks – Fiscal 2022 vs. Fiscal 2021

Specialty egg expense

-

Specialty egg expense which includes franchise fees, advertising and promotion costs generally tracks with specialty

egg volumes which were up 11.7% for the thirty-nine weeks end February 26, 2022, compared to the same period of

fiscal 2021. Specialty dozens sold to outside distributors including unconsolidated affiliates, Specialty Eggs, LLC and

Southwest Specialty Eggs, LLC, increased which reduced related costs that we generally incur for specialty egg sales

to retailers. 

Delivery expense

-

The increased delivery expense is primarily due to the increase in fuel and labor costs for both our fleet and contract

trucking.

Other expenses

-

The increase in other expenses is primarily due to property losses incurred that were not covered by insurance as well

as increased premiums for property and casualty insurance programs.

30

OPERATING INCOME (LOSS)

For the third quarter of fiscal 2022, we recorded operating income of $39.6 million compared to operating loss of $493

thousand for the same period of fiscal 2021.

For the thirty-nine weeks ended February 26, 2022, we recorded an operating loss of $2.2 million compared to an operating loss

of $13.2 million for the same period of fiscal 2021.

OTHER INCOME (EXPENSE) 

Total other income (expense) consists of items not directly charged or related to operations, such as interest income and

expense, royalty income, equity income or loss of unconsolidated entities, and patronage income, among other items.

For the third quarter of fiscal 2022, we earned $205 thousand of interest income compared to $661 thousand for the same

period of fiscal 2021. The decrease resulted from significantly lower investment balances. The Company recorded interest

expense of $126 thousand and $70 thousand for the third quarters ended February 26, 2022 and February 27, 2021,

respectively.

For the thirty-nine weeks ended February 26, 2022, we earned $702 thousand of interest income compared to $2.4 million for

the same period of fiscal 2021. The decrease resulted from significantly lower investment balances. The Company recorded

interest expense of $262 thousand and $205 thousand for the thirty-nine weeks ended February 26, 2022 and February 27,

2021, respectively.

Patronage dividends, which represent distributions from our membership in Eggland’s Best, Inc. were $10.1 million and $9.0

million for the thirteen and thirty-nine weeks ended February 26, 2022 and February 27, 2021, respectively. Patronage

dividends are paid once a year based on the profits of Eggland’s Best as well as its available cash.

For the third quarter of fiscal 2022, equity income of unconsolidated entities was $1.8 million compared to $1.9 million in the

prior-year period.

For the thirty-nine weeks ended February 26, 2022, equity income of unconsolidated entities was $2.2 million compared to $1.9

million in the prior-year period.

Other, net for the third quarter ended February 26, 2022, was income of $1.1 million compared to income of $537 thousand for

the same period of fiscal 2021.

Other, net for the thirty-nine weeks ended February 26, 2022, was income of $8.2 million compared to income of $1.5 million

for the same period of fiscal 2021. The majority of the increase is due to our acquisition of the remaining 50% membership

interest in Red River as we recognized a $4.5 million gain due to the remeasurement of our equity investment, along with the

$1.4 million payment related to review and adjustment of our various marketing agreements.

INCOME TAXES

For the third quarter of fiscal 2022, pre-tax income was $53.0 million compared to $11.8 million for the same period of fiscal

2021. We recorded income tax expense of $13.6 million for the third quarter of fiscal 2022, which reflects an effective tax rate

of 25.6%. Excluding the impact of discrete items related to a $5.0 million net tax benefit recorded in the third quarter of fiscal

2021 in connection with the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), income tax expense for

the comparable period of fiscal 2021 was $3.3 million, which reflects an adjusted effective tax rate of 27.9%.

For the thirty-nine weeks ended February 26, 2022, pre-tax income was $19.7 million compared to $2.2 million for the same

period of fiscal 2021. We recorded an income tax benefit of $2.9 million, which includes the discrete tax benefit of $8.3 million

as discussed in

 of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report.

Excluding the discrete tax benefit, income tax expense was $5.3 million with an adjusted effective tax rate of 27.3%, compared

to income tax expense of $934 thousand for the comparable period of fiscal 2021, which reflects an effective tax rate of 41.8%

excluding the impact of the $5.0 million discrete net tax benefit recorded in connection with the CARES Act. 

Our effective tax rate differs from the federal statutory income tax rate due to state income taxes, certain federal tax credits and

certain items included in income for financial reporting purposes that are not included in taxable income for income tax

31

purposes, including tax exempt interest income, certain nondeductible expenses and net income or loss attributable to our

noncontrolling interest.

NET INCOME ATTRIBUTABLE TO CAL-MAINE FOODS, INC.

Net income attributable to Cal-Maine Foods, Inc. for the third quarter ended February 26, 2022, was $39.5 million, or $0.81 per

basic and diluted common share, compared to net income attributable to Cal-Maine Foods, Inc. of $13.5 million or $0.28 per

basic and diluted common share for the same period of fiscal 2021.

Net income attributable to Cal-Maine Foods, Inc. for the thirty-nine weeks ended February 26, 2022, was $22.7 million, or

$0.46 per basic and diluted common share, compared to net income attributable to Cal-Maine Foods, Inc. of $6.3 million or

$0.13 per basic and diluted common share for the same period of fiscal 2021.

CAPITAL RESOURCES AND LIQUIDITY

Our working capital at February 26, 2022 was $401.3 million, compared to $429.8 million at May 29, 2021. The calculation of

working capital is defined as current assets less current liabilities. Our current ratio was 4.31 at February 26, 2022, compared

with 5.77 at May 29, 2021.

We had no long-term debt outstanding at February 26, 2022 or May 29, 2021. On November 15, 2021, we entered into an

Amended and Restated Credit Agreement (the “Credit Agreement”) with a five-year term. The Credit Agreement amended and

restated the Company’s previously existing credit agreement dated July 10, 2018. The Credit Agreement provides for an

increased senior secured revolving credit facility (the “Credit Facility”), in an initial aggregate principal amount of up to $250

million. As of February 26, 2022, no amounts were borrowed under the Credit Facility. We have $4.1 million in outstanding

standby letters of credit, issued under our Credit Facility for the benefit of certain insurance companies. For additional

information, see

 of the Notes to Condensed Consolidated Financial Statements included in this

Quarterly Report.

For the thirty-nine weeks ended February 26, 2022, $20.8 million in net cash was provided by operating activities, compared to

$14.7 million provided by operating activities for the comparable period in fiscal 2021. This is primarily due to the higher egg

prices partially offset by increased costs of feed ingredients compared to the prior-year period.

We continue to invest in our facilities, with $49.2 million used to purchase property, plant and equipment for the thirty-nine

weeks ended February 26, 2022, compared to $73.8 million in the same period of fiscal 2021. We also acquired the remaining

50% membership interest in Red River during our first quarter of fiscal 2022 for $48.5 million. Sales and maturities of

investment securities, net of purchases, were $29.2 million for the thirty-nine weeks ended February 26, 2022, compared to

$25.8 million for the comparable period in fiscal 2021. We received $400 thousand in distributions from an unconsolidated

entity in the first three quarters of fiscal 2022 compared to $5.8 million for the same period fiscal of 2021. 

As of February 26, 2022, cash decreased $41.8 million since May 29, 2021, compared to a decrease of $25.2 million during the

same period of fiscal 2021.

We continue to monitor the increasing demand for cage-free eggs and to engage with our customers in an effort to achieve a

smooth transition to meet their announced commitment timeline for cage-free egg sales. We have invested approximately $502

million in facilities, equipment and related operations to expand our cage-free production starting with our first facility in 2008.

The following table presents material construction projects approved as of February 26, 2022 (in thousands):

Project(s) Type

Projected 

Completion

Projected Cost

Spent as of February

26, 2022

Remaining

Projected Cost

Cage-Free Layer & Pullet Houses/Processing

Facility

Fiscal 2022

$

130,918

108,579

22,339

Cage-Free Layer & Pullet Houses

Fiscal 2023

24,752

6,262

18,490

$

155,670

$

114,841

$

40,829

We believe our current cash balances, investments, cash flows from operations, and Credit Facility will be sufficient to fund our

current capital needs. 

32

RECENTLY ISSUED/ADOPTED ACCOUNTING STANDARDS

For information on changes in accounting principles and new accounting policies, see

 of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report.

CRITICAL ACCOUNTING ESTIMATES 

Critical accounting estimates are those estimates made in accordance with U.S. generally accepted accounting principles that

involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our

financial condition or results of operations. There have been no changes to our critical accounting estimates identified in our

2021 Annual Report.

33

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our exposure to market risk during the thirty-six weeks ended February 26, 2022 from

the information provided in Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our 2021 Annual Report.

ITEM 4. CONTROLS

AND

PROCEDURES

Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed

by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time

periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include,

without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that

we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive

and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding

required disclosure. Based on an evaluation of our disclosure controls and procedures conducted by our Chief Executive Officer

and Chief Financial Officer, together with other financial officers, such officers concluded that our disclosure controls and

procedures were effective as of February 26, 2022 at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarter ended February 26, 2022

that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Refer to the discussion of certain legal proceedings involving the Company and/or its subsidiaries in (i) our 2021 Annual

Report, Part I Item 3 Legal Proceedings, and Part II Item 8, Notes to Consolidated Financial Statements and Supplementary

Data, Note 18: Commitments and Contingencies, and (ii) in this Quarterly Report in

of the Notes to Condensed Consolidated Financial Statements, which discussions are incorporated herein by reference.

ITEM 1A. RISK

FACTORS

There have been no material changes in the risk factors previously disclosed in the Company’s 2021 Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table is a summary of our third quarter 2022 share repurchases:

Issuer Purchases of Equity Securities

Total Number of

Maximum Number

Shares Purchased

of Shares that

Total Number

Average

as Part of Publicly

May Yet Be

of Shares

Price Paid

Announced Plans

Purchased Under the

Period

Purchased (1)

per Share

Or Programs

Plans or Programs

11/28/21 to 12/25/21

206

$

36.32

—

—

12/26/21 to 01/22/22

26,780

41.00

—

—

01/23/22 to 02/26/22

—

—

—

—

26,986

$

40.96

—

—

(1) As permitted under our Amended and Restated 2012 Omnibus Long-Term Incentive Plan, these shares were withheld by us to satisfy tax withholding 

 obligations for employees in connection with the vesting of restricted common stock.

34

ITEM 6. EXHIBITS

Exhibits

No.

Description

3.1

Second Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to

Exhibit 3.1 in the Registrant’s Form 8-K, filed July 20, 2018)

3.2

Composite Bylaws of the Company (incorporated by reference to Exhibit 3.2 in the Registrant’s Form 10-Q

for the quarter ended March 2, 2013, filed April 5, 2013)

31.1*

Rule 13a-14(a) Certification of the Chief Executive Officer

31.2*

Rule 13a-14(a) Certification of the Chief Financial Officer

32**

Section 1350 Certification of the Chief Executive Officer and the Chief Financial Officer

101.SCH*+

Inline XBRL Taxonomy Extension Schema Document

101.CAL*+

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*+

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*+

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*+

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*

Filed herewith as an Exhibit. 

**

Furnished herewith as an Exhibit.

+

Submitted electronically with this Quarterly Report.

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: 

March 29, 2022

/s/ Max P. Bowman

Max P. Bowman

Vice President, Chief Financial Officer

(Principal Financial Officer)

໿

Date: 

March 29, 2022

/s/ Matthew S. Glover

Matthew S. Glover

Vice President – Accounting

(Principal Accounting Officer)

໿

EX-31.1

Exhibit 31.1

1

Certification

Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934,

As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Adolphus B. Baker, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of Cal-Maine Foods, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact

necessary to make the statements made, in light of the circumstances under which such statements were made, not

misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in

all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods

presented in this report;

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as

defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed

under our supervision, to ensure that material information relating to the registrant, including its consolidated

subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is

being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this

report based on such evaluation; and

(d)

 Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the

registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has

materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

and

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over

financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons

performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial

reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report

financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the

registrant’s internal control over financial reporting.

/s/ Adolphus B. Baker

Adolphus B. Baker

Chief Executive Officer and Chairman of the Board

Date:

March 29, 2022

EX-31.2

Exhibit 31.2

1

Certification

Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934,

As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Max P. Bowman, certify that

1.

I have reviewed this Quarterly Report on Form 10-Q of Cal-Maine Foods, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact

necessary to make the statements made, in light of the circumstances under which such statements were made, not

misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in

all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods

presented in this report;

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as

defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed

under our supervision, to ensure that material information relating to the registrant, including its consolidated

subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is

being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by

this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the

registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has

materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

and

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over

financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons

performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial

reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and

report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the

registrant’s internal control over financial reporting.

/s/ Max P. Bowman

Max P. Bowman

Vice President and Chief Financial Officer

Date:

March 29, 2022

EX-32

Exhibit 32

1

Certifications Pursuant to 18 U.S.C. §1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Solely for the purposes of complying with 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of

2002, we, the undersigned Chief Executive Officer and Chief Financial Officer of Cal-Maine Foods, Inc. (the “Company”),

hereby certify, based on our knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended

February 26, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act

of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and

results of operations of the Company.

/s/ Adolphus B. Baker

Adolphus B. Baker

Chief Executive Officer and Chairman of the Board

/s/ Max P. Bowman

Max P. Bowman

Vice President and Chief Financial Officer

Date:

March 29, 2022

XML

Document and Entity Information - shares	9 Months Ended
	Feb. 26, 2022	Mar. 29, 2022
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Feb. 26, 2022
Document Transition Report	false
Entity File Number	001-38695
Entity Registrant Name	CAL-MAINE FOODS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	64-0500378
Entity Address, Address Line One	1052 Highland Colony Pkwy
Entity Address Address Line 2	Suite 200
Entity Address, City or Town	Ridgeland
Entity Address, State or Province	MS
Entity Address, Postal Zip Code	39157
City Area Code	601
Local Phone Number	948-6813
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	CALM
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Current Fiscal Year End Date	--05-28
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000016160
Common Stock [Member]
Entity Common Stock, Shares Outstanding		44,140,283
Class A Common Stock [Member]
Entity Common Stock, Shares Outstanding		4,800,000

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Feb. 26, 2022	May 29, 2021
Current assets:
Cash and cash equivalents	$ 15,589	$ 57,352
Investment securities available-for-sale	81,125	112,158
Trade and other receivables, net	138,654	84,123
Income taxes receivable	41,383	42,516
Inventories	240,087	218,375
Prepaid expenses and other current assets	5,872	5,407
Total current assets	522,710	519,931
Property, plant & equipment, net	671,373	589,417
Finance lease right-of-use asset, net	409	525
Operating lease right-of-use asset, net	1,168	1,724
Investments in unconsolidated entities	15,794	54,941
Goodwill	44,006	35,525
Intangible assets, net	18,686	20,341
Other long-term assets	7,849	6,770
Total assets	1,281,995	1,229,174
Current liabilities:
Accounts payable and accrued expenses	120,665	89,191
Current portion of finance lease obligation	222	215
Current portion of operating lease obligation	486	691
Total current liabilities	121,373	90,097
Long-term finance lease obligation	271	438
Long-term operating lease obligation	682	1,034
Other noncurrent liabilities	10,673	10,416
Deferred income taxes, net	118,753	114,408
Total liabilities	251,752	216,393
Stockholders' equity:
Paid-in capital	66,909	64,044
Retained earnings	992,523	975,977
Accumulated other comprehensive loss, net of tax	(1,413)	(558)
Common stock in treasury at cost - 26,121 shares at February 26, 2022 and 26,202 shares at May 29, 2021	(28,439)	(27,433)
Total Cal-Maine Foods, Inc. stockholders' equity	1,030,331	1,012,781
Noncontrolling interest in consolidated entity	(88)	0
Total stockholders' equity	1,030,243	1,012,781
Total Liabilities and Stockholders' Equity	1,281,995	1,229,174
Common Stock [Member]
Stockholders' equity:
Common stock	703	703
Class A Convertible Common Stock [Member]
Stockholders' equity:
Common stock	$ 48	$ 48

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Feb. 26, 2022	May 29, 2021
Common Stock [Member]
Common stock, par value per share (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	120,000,000	120,000,000
Common stock, shares issued (in shares)	70,261,000	70,261,000
Common stock in treasury (in shares)	26,121,000	26,202,000
Class A Convertible Common Stock [Member]
Common stock, par value per share (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	4,800,000	4,800,000
Common stock, shares issued (in shares)	4,800,000	4,800,000

XML

Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 26, 2022	Feb. 27, 2021	Feb. 26, 2022	Feb. 27, 2021
Condensed Consolidated Statements of Income [Abstract]
Net sales	$ 477,485	$ 359,080	$ 1,184,195	$ 999,189
Cost of sales	385,903	311,563	1,042,221	876,457
Gross profit	91,582	47,517	141,974	122,732
Selling, general and administrative	52,686	47,656	146,991	135,494
(Gain) loss on disposal of fixed assets	(674)	354	(2,855)	476
Operating income (loss)	39,570	(493)	(2,162)	(13,238)
Other income (expense):
Interest income, net	79	591	440	2,181
Royalty income	326	321	877	906
Patronage dividends	10,120	9,004	10,120	9,004
Equity income of unconsolidated entities	1,809	1,872	2,208	1,886
Other, net	1,144	537	8,169	1,485
Total other income, net	13,478	12,325	21,814	15,462
Income before income taxes	53,048	11,832	19,652	2,224
Income tax expense (benefit)	13,594	(1,716)	(2,921)	(4,080)
Net income	39,454	13,548	22,573	6,304
Less: Loss attributable to noncontrolling interest	(63)	0	(91)	0
Net income attributable to Cal-Maine Foods, Inc.	$ 39,517	$ 13,548	$ 22,664	$ 6,304
Net income per common share:
Basic (in dollars per share)	$ 0.81	$ 0.28	$ 0.46	$ 0.13
Diluted (in dollars per share)	$ 0.81	$ 0.28	$ 0.46	$ 0.13
Weighted average shares outstanding:
Basic (in shares)	48,886	48,530	48,888	48,511
Diluted (in shares)	49,036	48,659	49,035	48,649

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 26, 2022	Feb. 27, 2021	Feb. 26, 2022	Feb. 27, 2021
Condensed Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 39,454	$ 13,548	$ 22,573	$ 6,304
Other comprehensive income (loss), before tax:
Unrealized holding loss on available-for-sale securities, net of reclassification adjustments	(551)	(378)	(1,130)	(283)
Income tax benefit related to items of other comprehensive income	134	92	275	69
Other comprehensive loss, net of tax	(417)	(286)	(855)	(214)
Comprehensive income	39,037	13,262	21,718	6,090
Less: Comprehensive loss attributable to the noncontrolling interest	(63)	0	(91)	0
Comprehensive income attributable to Cal-Maine Foods, Inc.	$ 39,100	$ 13,262	$ 21,809	$ 6,090

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Feb. 26, 2022	Feb. 27, 2021
Cash flows from operating activities:
Net income	$ 22,573	$ 6,304
Depreciation and amortization	50,996	44,391
Deferred income taxes	(3,861)	9,970
Other adjustments, net	(48,884)	(45,936)
Net cash provided by operations	20,824	14,729
Cash flows from investing activities:
Purchases of investment securities	(47,135)	(59,415)
Sales and maturities of investment securities	76,377	85,202
Investment in unconsolidated entities	(3,000)	0
Distributions from unconsolidated entities	400	5,813
Acquisition of business, net of cash acquired	(44,823)	0
Purchases of property, plant and equipment	(49,170)	(73,796)
Net proceeds from disposal of property, plant and equipment	6,041	3,273
Net cash used in investing activities	(61,310)	(38,923)
Cash flows from financing activities:
Purchase of common stock by treasury	(1,120)	(871)
Principal payments on finance lease	(160)	(153)
Contributions	3	5
Net cash used in financing activities	(1,277)	(1,019)
Net change in cash and cash equivalents	(41,763)	(25,213)
Cash and cash equivalents at beginning of period	57,352	78,130
Cash and cash equivalents at end of period	15,589	52,917
Supplemental information:
Cash paid for operating leases	625	703
Interest paid	$ 230	$ 193

XML

Summary of Significant Accounting Policies

9 Months Ended

Feb. 26, 2022

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

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 in the

United States of America ("GAAP") for complete financial statements and should be read in conjunction with our Annual

Report on Form 10-K for the fiscal year ended May 29, 2021 (the "2021 Annual Report"). 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 ends on the Saturday closest to May 31. Each of the three-month periods and year-to-date periods

ended on February 26, 2022 and February 27, 2021 included 13 weeks and 39 weeks, respectively

.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and

assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results

could differ from those estimates.

The severity, magnitude and duration, as well as the economic consequences of the COVID-19 pandemic, are uncertain, rapidly

changing and difficult to predict. Therefore, our accounting estimates and assumptions might change materially in future

periods in response to COVID-19.

Investment Securities

Our investment securities are accounted for in accordance with ASC 320, “Investments - Debt and Equity Securities” (“ASC

320”). The Company considers all its debt securities for which there is a determinable fair market value, and there are no

restrictions on the Company's ability to sell within the next 12 months, as available-for-sale. We classify these securities as

current, because the amounts invested are available for current operations. Available-for-sale securities are carried at fair value,

with unrealized gains and losses reported as a separate component of stockholders’ equity. The Company regularly evaluates

changes to the rating of its debt securities by credit agencies and economic conditions to assess and record any expected credit

losses through the allowance for credit losses, limited to the amount that fair value was less than the amortized cost basis. The

cost basis for realized gains and losses on available-for-sale securities is determined by the specific identification method.

Gains and losses are recognized in other income (expenses) as Other, net in the Company's Condensed Consolidated Statements

of Income. Investments in mutual funds are classified as “Other long-term assets” in the Company’s Condensed Consolidated

Balance Sheets.

Trade Receivables 

Trade receivables are stated at their carrying values, which include a reserve for credit losses. At February 26, 2022 and May

29, 2021, reserves for credit losses were $

725

 thousand and $

795

 thousand, respectively. The Company extends credit to

customers based on an evaluation of each customer's financial condition and credit history. Collateral is generally not required.

The Company minimizes exposure to counter party credit risk through credit analysis and approvals, credit limits, and

monitoring procedures. In determining our reserve for credit losses, receivables are assigned an expected loss based on

historical loss information adjusted as needed for economic and other forward-looking factors.

Business Combinations

The Company applies fair value accounting guidance to measure non-financial assets and liabilities associated with business

acquisitions. These assets and liabilities are measured at fair value for the initial purchase price allocation. The fair value of

non-financial assets acquired is determined internally. Our internal valuation methodology for non-financial assets considers the

remaining estimated life of the assets acquired and what management believes is the market value for those assets.

Change in Accounting Principle

Effective May 31, 2020, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), which is

intended to improve financial reporting by requiring more timely recording of credit losses on loans and other financial

instruments held by financial institutions and other organizations. The guidance replaces the prior “incurred loss” approach with

an “expected loss” model and requires measurement of all expected credit losses for financial assets held at the reporting date

based on historical experience, current conditions, and reasonable and supportable forecasts. The Company adopted the

guidance on a modified retrospective basis through a cumulative effect adjustment to retained earnings as of the beginning of

the period of adoption. The Company evaluated its current methodology of estimating allowance for doubtful accounts and the

risk profile of its receivables portfolio and developed a model that includes the qualitative and forecasting aspects of the

“expected loss” model under the amended guidance. The Company finalized its assessment of the impact of the amended

guidance and recorded a $

422

 thousand cumulative increase to retained earnings at May 31, 2020.

Immaterial Error Correction

Effective on May 30, 2021, the Company acquired the remaining

50

% membership interest in Red River Valley Egg Farm,

LLC (“Red River”), including certain liabilities. During the Company’s third quarter of fiscal 2022, management determined

that it had not properly eliminated select intercompany sales and cost of sales transactions between Red River and the

corresponding other wholly-owned subsidiaries of the Company in its first and second quarter 2022 Condensed Consolidated

Statements of Income. The errors resulted in an overstatement of Net Sales and Cost of Sales of $

6.7

 million in the first quarter

of fiscal 2022 and $

9.2

 million in the second quarter of fiscal 2022. There was

no

 impact to Operating income (loss), Net

income (loss) or Net income (loss) per share. 

We evaluated the errors quantitatively and qualitatively in accordance with Staff Accounting Bulletin

("SAB") No. 99 Materiality, and SAB No. 108 Considering the Effects of Prior Year Misstatements when Quantifying

Misstatements in the Current Year Financial Statements, and determined that the related impact was not material to our

condensed consolidated financial statements for the first or second quarters of fiscal 2022, but that correcting the cumulative

impact of the errors would be relevant to our Condensed Consolidated Statements of Income for the third quarter

ended February 26, 2022. Accordingly, we have reflected the correction of the immaterial errors as a reduction of Net Sales and

Cost of Sales in the accompanying Condensed Consolidated Statements of Income for the thirty-nine weeks ended February 26,

2022.

XML

Acquisition

9 Months Ended

Feb. 26, 2022

Acquisitions [Abstract]

Acquisitions

Note 2 – Acquisition

Effective on May 30, 2021, the Company acquired the remaining

50

% membership interest in Red River Valley Egg Farm,

LLC (“Red River”), including certain liabilities. As a result of the acquisition, Red River became a wholly owned subsidiary of

the Company. Red River owns and operates a specialty shell egg production complex with approximately

1.7

 million cage-free

laying hens, cage-free pullet capacity, feed mill, processing plant, related offices and outbuildings and related equipment

located on approximately

400

 acres near Bogata, Texas.

The following table summarizes the consideration paid for Red River and the amounts of the assets acquired and liabilities

assumed recognized at the acquisition date:

Cash consideration paid

$

48,500

Fair value of the Company's equity interest in Red River held before the business combination

48,500

$

97,000

Recognized amounts of identifiable assets acquired and liabilities assumed

Cash

$

3,677

Accounts receivable, net

1,980

Inventory

8,789

Property, plant and equipment

85,002

Liabilities assumed

(2,448)

Deferred income taxes

(8,481)

Total identifiable net assets

88,519

Goodwill

8,481

$

97,000

Cash and accounts receivable acquired along with liabilities assumed were valued at their carrying value which approximates

fair value due to the short maturity of these instruments.

Inventory consisted primarily of flock, feed ingredients, packaging, and egg inventory. Flock inventory was valued at carrying

value as management believes that their carrying value best approximates their fair value. Feed ingredients, packaging and egg

inventory were all valued based on market prices as of May 30, 2021. 

Property, plant and equipment were valued utilizing the cost approach which is based on replacement or reproduction costs of

the assets and subtracting any depreciation resulting from physical deterioration and/or functional or economic obsolescence.

The Company recognized a gain of $

4.5

 million as a result of remeasuring to fair value its

50

% equity interest in Red River

held before the business combination. The gain was recorded in other income and expense under the heading “Other, net” in the

Company’s Condensed Consolidated Statements of Income. The acquisition of Red River resulted in a discrete tax benefit of

$

8.3

 million, which includes a $

7.3

 million decrease in deferred income tax expense related to the outside-basis of our equity

investment in Red River, with a corresponding non-recurring, non-cash $

954,000

 reduction to income taxes expense on the

non-taxable remeasurement gain associated with the acquisition. As part of the acquisition accounting, the Company also

recorded an $

8.5

 million deferred tax liability for the difference in the inside-basis of the acquired assets and liabilities

assumed. The recognition of deferred tax liabilities resulted in the recognition of goodwill. None of the goodwill recognized is

expected to be deductible for income tax purposes.

XML

Investment Securities

9 Months Ended

Feb. 26, 2022

Investments Securities [Abstract]

Investment Securities

Note 3 - Investment

Securities

The following represents the Company’s investment securities as of February 26, 2022 and May 29, 2021 (in thousands):

February 26, 2022

Amortized

Cost

Unrealized 

Gains

Unrealized

Losses

Estimated 

Fair Value

Municipal bonds

$

514

$

—

$

3

$

511

Commercial paper

9,980

—

23

9,957

Corporate bonds

61,634

—

344

61,290

Certificates of deposits

1,268

—

12

1,256

Asset backed securities

8,205

—

94

8,111

Total current investment securities

$

81,601

$

—

$

476

$

81,125

Mutual funds

$

2,967

$

—

$

53

$

2,914

Total noncurrent investment securities

$

2,967

$

—

$

53

$

2,914

May 29, 2021

Amortized 

Cost

Unrealized 

Gains

Unrealized

Losses

Estimated 

Fair Value

Municipal bonds

$

16,424

$

56

$

—

$

16,480

Commercial paper

1,998

—

—

1,998

Corporate bonds

80,092

608

—

80,700

Certificates of deposits

1,077

—

1

1,076

Asset backed securities

11,914

—

10

11,904

Total current investment securities

$

111,505

$

664

$

11

$

112,158

Mutual funds

$

2,306

$

1,810

$

—

$

4,116

Total noncurrent investment securities

$

2,306

$

1,810

$

—

$

4,116

Available-for-sale

Proceeds from sales and maturities of investment securities available-for-sale were $

76.4

 million and $

85.2

 million during the

thirty-nine weeks ended February 26, 2022 and February 27, 2021, respectively. Gross realized gains for the thirty-nine weeks

ended February 26, 2022 and February 27, 2021 were $

181

 thousand and $

116

 thousand, respectively. Gross realized losses for

the thirty-nine weeks ended February 26, 2022 and February 27, 2021 were $

67

 thousand and $

17

 thousand, respectively. There

were

no

 allowances for credit losses at February 26, 2022 and May 29, 2021.

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 February 26, 2022 are as follows (in thousands):

Estimated Fair Value

Within one year

$

52,391

1-5 years

28,734

Total

$

81,125

Noncurrent 

Proceeds from sales and maturities of noncurrent investment securities were $

4.9

 million during the thirty-nine weeks

ended February 26, 2022. Gross realized gains for the thirty-nine weeks ended February 26, 2022 were $

2.2

 million. There

were no realized losses for the thirty-nine weeks ended February 26, 2022. There were

no

 sales of noncurrent investment

securities during the thirty-nine weeks ended February 27, 2021.

XML

Fair Value Measurements

9 Months Ended

Feb. 26, 2022

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 4 - 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, including:

◦

Quoted prices for similar assets or liabilities in active markets

◦

Quoted prices for identical or similar assets in non-active markets

◦

Inputs other than quoted prices that are observable for the asset or liability

◦

Inputs derived principally from or corroborated by other observable market data

•

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, accounts receivable, and accounts payable:

 The carrying amount approximates fair value due to the

short maturity of these instruments.

Lease obligations:

 The carrying value of the Company’s lease obligations is at its present value which approximates fair value.

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 February 26, 2022 and May 29, 2021 (in thousands):

February 26, 2022

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

$

—

$

511

$

—

$

511

Commercial paper

—

9,957

—

9,957

Corporate bonds

—

61,290

—

61,290

Certificates of deposits

—

1,256

—

1,256

Asset backed securities

—

8,111

—

8,111

Mutual funds

2,914

—

—

2,914

Total assets measured at fair value

$

2,914

$

81,125

$

—

$

84,039

May 29, 2021

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

$

—

$

16,480

$

—

$

16,480

Commercial paper

—

1,998

—

1,998

Corporate bonds

—

80,700

—

80,700

Certificates of deposits

—

1,076

—

1,076

Asset backed securities

—

11,904

—

11,904

Mutual funds

4,116

—

—

4,116

Total assets measured at fair value

$

4,116

$

112,158

$

—

$

116,274

Investment securities – available-for-sale classified as Level 2 consist of securities with maturities of three months or longer

when purchased. We classified these securities as current because amounts invested are readily available for current operations.

Observable inputs for these securities are yields, credit risks, default rates, and volatility.

XML

Inventories

9 Months Ended

Feb. 26, 2022

Inventories [Abstract]

Inventories

Note 5 - Inventories

Inventories consisted of the following as of February 26, 2022 and May 29, 2021 (in thousands):

February 26, 2022

May 29, 2021

Flocks, net of amortization

$

137,086

$

123,860

Eggs and egg products

24,153

21,084

Feed and supplies

78,848

73,431

$

240,087

$

218,375

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 February

26, 2022 consisted of approximately

9.4

 million pullets and breeders and

42.7

 million layers.

XML

Accrued Dividends Payable And Dividends per Common Share

9 Months Ended

Feb. 26, 2022

Accrued Dividends Payable And Dividends Per Common Share [Abstract]

Accrued Dividends Payable And Dividends Per Common Share

Note 6 - 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 most recent quarter for which a dividend was paid. For the third quarter of fiscal 2022, we will pay a cash dividend

of approximately $

0.125

 per share to holders of our Common Stock and Class A Common Stock. The amount of the accrual is

recorded in Accounts payable and accrued expenses in the Company’s Condensed Consolidated Balance Sheets.

On our Condensed Consolidated Statements of Income, we determine dividends per common share in accordance with the

computation in the following table (in thousands, except per share data):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

February 26, 2022

February 27, 2021

Net income attributable to Cal-Maine Foods,

Inc.

$

39,517

$

13,548

$

22,664

$

6,304

Cumulative losses to be recovered prior to

payment of divided at beginning of period

(21,097)

(8,614)

(4,244)

(1,370)

Net income available for dividend

$

18,420

$

4,934

$

18,420

$

4,934

1/3 of net income attributable to Cal-Maine

Foods, Inc. available for dividend

6,140

1,645

6,140

1,645

Common stock outstanding (shares)

44,140

44,056

Class A common stock outstanding (shares)

4,800

4,800

Total common stock outstanding (shares)

48,940

48,856

Dividends per common share*

$

0.125

$

0.034

$

0.125

$

0.034

*Dividends per common share =

1/3

 of Net income attributable to Cal-Maine Foods, Inc. available for dividend ÷ Total common stock

outstanding (shares).

XML

Credit Facility

9 Months Ended

Feb. 26, 2022

Credit Facility [Abstract]

Credit Facility

Note 7 – Credit Facility

On November 15, 2021, we entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with a

five

-

year term. The Credit Agreement amended and restated the Company’s previously existing credit agreement dated July 10,

2018. The Credit Agreement provides for an increased senior secured revolving credit facility (the “Credit Facility” or

“Revolver”), in an initial aggregate principal amount of up to $

250

 million, which includes a $

15

 million sublimit for the

issuance of standby letters of credit and a $

15

 million sublimit for swingline loans. The Credit Facility also includes an

accordion feature permitting, with the consent of BMO Harris Bank N.A. (the “Administrative Agent”), an increase in the

Credit Facility in the aggregate up to $

200

 million by adding one or more incremental senior secured term loans or increasing

one or more times the revolving commitments under the Revolver. As of February 26, 2022,

no

 amounts were borrowed under

the Credit Facility and $

4.1

 million in standby letters of credit were issued under the Credit Facility.

The interest rate in connection with loans made under the Credit Facility is based on, at the Company’s election, either the

Eurodollar Rate plus the Applicable Margin or the Base Rate plus the Applicable Margin. The “Eurodollar Rate” means the

reserve adjusted rate at which Eurodollar deposits in the London interbank market for an interest period of

one

,

two

,

three

,

six

or

twelve

 months (as selected by the Company) are quoted. The “Base Rate” means a fluctuating rate per annum equal to the

highest of (a) the federal funds rate plus

0.50

% per annum, (b) the prime rate of interest established by the Administrative

Agent, and (c) the Eurodollar Rate for an interest period of

one

 month plus

1

% per annum, subject to certain interest rate floors.

The “Applicable Margin” means

0.00

% to

0.75

% per annum for Base Rate Loans and

1.00

% to

1.75

% per annum for

Eurodollar Rate Loans, in each case depending upon the Total Funded Debt to Capitalization Ratio for the Company at the

quarterly pricing date. The Company will pay a commitment fee on the unused portion of the Credit Facility payable quarterly

from

0.15

% to

0.25

% in each case depending upon the Total Funded Debt to Capitalization Ratio for the Company at the

quarterly pricing date. The Credit Agreement contains customary provisions regarding replacement of the Eurodollar Rate.

The Credit Facility is guaranteed by all the current and future wholly-owned direct and indirect domestic subsidiaries of the

Company (the “Guarantors”), and is secured by a first-priority perfected security interest in substantially all of the Company’s

and the Guarantors’ accounts, payment intangibles, instruments (including promissory notes), chattel paper, inventory

(including farm products) and deposit accounts maintained with the Administrative Agent.

The Credit Agreement for the Credit Facility contains customary covenants, including restrictions on the incurrence of liens,

incurrence of additional debt, sales of assets and other fundamental corporate changes and investments. The Credit Agreement

requires maintenance of two financial covenants: (i) a maximum Total Funded Debt to Capitalization Ratio tested quarterly of

no greater than

50

%; and (ii) a requirement to maintain Minimum Tangible Net Worth at all times of $

700

 Million plus

50

% of

net income (if net income is positive) less permitted restricted payments for each fiscal quarter after November 27, 2021.

Additionally, the Credit Agreement requires that Fred R. Adams Jr.’s spouse, natural children, sons-in-law or grandchildren, or

any trust, guardianship, conservatorship or custodianship for the primary benefit of any of the foregoing, or any family limited

partnership, similar limited liability company or other entity that

100

% of the voting control of such entity is held by any of the

foregoing, shall maintain at least

50

% of the Company's voting stock. Failure to satisfy any of these covenants will constitute a

default under the terms of the Credit Agreement. Further, under the terms of the Credit Agreement, payment of dividends under

the Company's current dividend policy of

one-third

 of the Company's net income computed in accordance with GAAP and

payment of other dividends or repurchases by the Company of its capital stock is allowed, as long as after giving effect to such

dividend payments or repurchases no default has occurred and is continuing and the sum of cash and cash equivalents of the

Company and its subsidiaries plus availability under the Credit Facility equals at least $

50

 million.

The Credit Agreement also includes customary events of default and customary remedies upon the occurrence of an event of

default, including acceleration of the amounts due under the Credit Facility and foreclosure of the collateral securing the Credit

Facility.

At February 26, 2022, we were in compliance with the covenant requirements of the Credit Facility.

XML

Equity

9 Months Ended

Feb. 26, 2022

Equity [Abstract]

Equity

Note 8 - Equity

The following reflects equity activity for the thirteen and thirty-nine weeks ended February 26, 2022 and February 27, 2021 (in

thousands):

Thirteen Weeks Ended February 26, 2022

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum. Other

Retained

Noncontrolling

Amount

Amount

Amount

Capital

Comp. Loss

Earnings

Interest

Total

Balance at November

27, 2021

$

703

$

48

$

(27,450)

$

66,019

$

(996)

$

959,124

$

(25)

$

997,423

Other comprehensive

loss, net of tax

—

—

—

—

(417)

—

—

(417)

Stock compensation

plan transactions

—

—

(989)

890

—

—

—

(99)

Dividends

—

—

—

—

—

(6,118)

—

(6,118)

Net income (loss)

—

—

—

—

—

39,517

(63)

39,454

Balance at February

26, 2022

$

703

$

48

$

(28,439)

$

66,909

$

(1,413)

$

992,523

$

(88)

$

1,030,243

Thirty-nine Weeks Ended February 26, 2022

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum. Other

Retained

Noncontrolling

Amount

Amount

Amount

Capital

Comp. Loss

Earnings

Interest

Total

Balance at May 29,

2021

$

703

$

48

$

(27,433)

$

64,044

$

(558)

$

975,977

$

—

$

1,012,781

Other comprehensive

loss, net of tax

—

—

—

—

(855)

—

—

(855)

Stock compensation

plan transactions

—

—

(1,006)

2,865

—

—

—

1,859

Contributions

—

—

—

—

—

—

3

3

Dividends

—

—

—

—

—

(6,118)

—

(6,118)

Net income (loss)

—

—

—

—

—

22,664

(91)

22,573

Balance at February

26, 2022

$

703

$

48

$

(28,439)

$

66,909

$

(1,413)

$

992,523

$

(88)

$

1,030,243

Thirteen Weeks Ended February 27, 2021

Cal-Maine Foods, Inc. Stockholders

Common Stock

Accum.

Class A

Treasury

Paid In

Other Comp.

Retained

Amount

Amount

Amount

Capital

Income (Loss)

Earnings

Total

Balance at November 28, 2020

$

703

$

48

$

(26,723)

$

62,206

$

151

$

968,325

$

1,004,710

Other comprehensive loss, net of tax

—

—

—

—

(286)

—

(286)

Stock compensation plan transactions

—

—

(826)

964

—

—

138

Dividends

—

—

—

—

—

(1,661)

(1,661)

Net income

—

—

—

—

—

13,548

13,548

Balance at February 27, 2021

$

703

$

48

$

(27,549)

$

63,170

$

(135)

$

980,212

$

1,016,449

Thirty-nine Weeks Ended February 27, 2021

Cal-Maine Foods, Inc. Stockholders

Common Stock

Accum.

Class A

Treasury

Paid In

Other Comp.

Retained

Amount

Amount

Amount

Capital

Income (Loss)

Earnings

Total

Balance at May 30, 2020

$

703

$

48

$

(26,674)

$

60,372

$

79

$

975,147

$

1,009,675

Impact of ASC 326

—

—

—

—

—

422

422

Balance at May 31 2020

703

48

(26,674)

60,372

79

975,569

1,010,097

Other comprehensive loss, net of tax

—

—

—

—

(214)

—

(214)

Stock compensation plan transactions

—

—

(875)

2,793

—

—

1,918

Contributions

—

—

—

5

—

—

5

Dividends

—

—

—

—

—

(1,661)

(1,661)

Net income

—

—

—

—

—

6,304

6,304

Balance at February 27, 2021

$

703

$

48

$

(27,549)

$

63,170

$

(135)

$

980,212

$

1,016,449

XML

Net Income per Common Share

9 Months Ended

Feb. 26, 2022

Net Income per Common Share [Abstract]

Net Income per Common Share

Note 9 - Net Income per Common Share

Basic net income per share is based on the weighted average Common Stock and Class A Common Stock outstanding. Diluted

net income per share is based on weighted-average common shares outstanding during the relevant period adjusted for the

dilutive effect of share-based awards.

The following table provides a reconciliation of the numerators and denominators used to determine basic and diluted net

income per common share (amounts in thousands, except per share data):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

February 26, 2022

February 27, 2021

Numerator

Net income

$

39,454

$

13,548

$

22,573

$

6,304

Less: Loss attributable to noncontrolling

interest

(63)

—

(91)

—

Net income attributable to Cal-Maine

Foods, Inc.

$

39,517

$

13,548

$

22,664

$

6,304

Denominator

Weighted-average common shares

outstanding, basic

48,886

48,530

48,888

48,511

Effect of dilutive restricted shares

150

129

147

138

Weighted-average common shares

outstanding, diluted

49,036

48,659

49,035

48,649

Net income per common share attributable to

Cal-Maine Foods, Inc.

Basic

$

0.81

$

0.28

$

0.46

$

0.13

Diluted

$

0.81

$

0.28

$

0.46

$

0.13

XML

Revenue Recognition

9 Months Ended

Feb. 26, 2022

Revenue Recognition [Abstract]

Revenue Recognition

Note 10 - Revenue Recognition

Satisfaction of Performance Obligation

Most of the Company’s revenue is derived from contracts with customers based on the customer placing an order for products.

Pricing for the most part is determined when the Company and the customer agree upon the specific order, which establishes

the contract for that order.

Revenues are recognized in an amount that reflects the net consideration we expect to receive in exchange for the goods. Our

shell eggs are sold at prices related to independently quoted wholesale market prices, negotiated prices or formulas related to

our costs of production. The Company’s sales predominantly contain a single performance obligation. We recognize revenue

upon satisfaction of the performance obligation with the customer, which typically occurs within days of the Company and the

customer agreeing upon the order.

Returns and Refunds

Some of our contracts include a guaranteed sale clause, pursuant to which we credit the customer’s account for product that the

customer is unable to sell before expiration. The Company records an estimate of returns and refunds by using historical return

data and comparing to current period sales and accounts receivable. The allowance is recorded as a reduction in sales with a

corresponding reduction in trade accounts receivable.

Sales Incentives Provided to Customers

The Company periodically provides incentive offers to its customers to encourage purchases. Such offers include current

discount offers (e.g., percentage discounts off current purchases), inducement offers (e.g., offers for future discounts subject to

a minimum current purchase), and other similar offers. Current discount offers, when accepted by customers, are treated as a

reduction to the sales price of the related transaction, while inducement offers, when accepted by customers, are treated as a

reduction to sales price based on estimated future redemption rates. Redemption rates are estimated using the Company’s

historical experience for similar inducement offers. Current discount and inducement offers are presented as a net amount in

‘‘Net sales.’’

Disaggregation of Revenue

The following table provides revenue disaggregated by product category (in thousands):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

February 26, 2022

February 27, 2021

Conventional shell egg sales

$

280,633

$

203,189

$

685,678

$

560,297

Specialty shell egg sales

182,945

145,210

462,319

408,537

Egg products

12,749

9,098

33,516

25,736

Other

1,158

1,583

2,682

4,619

$

477,485

$

359,080

$

1,184,195

$

999,189

Contract Costs

The Company can incur costs to obtain or fulfill a contract with a customer. If the amortization period of these costs is less than

one year, they are expensed as incurred. When the amortization period is greater than one year, a contract asset is recognized

and is amortized over the contract life as a reduction in net sales. As of February 26, 2022 and February 27, 2021, the balance

for contract assets is immaterial.

Contract Balances

The Company receives payment from customers based on specified terms that are generally less than 30 days from delivery.

There are rarely contract assets or liabilities related to performance under the contract.

XML

Leases

9 Months Ended

Feb. 26, 2022

Leases [Abstract]

Leases

Note 11 - Leases

Expenses related to operating leases, amortization of finance leases, right-of-use 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 Income. The Company’s lease cost consists of the following (in thousands):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 26, 2022

Operating lease cost

$

200

$

625

Finance lease cost

Amortization of right-of-use asset

$

44

$

132

Interest on lease obligations

$

6

$

20

Short term lease cost

$

1,086

$

3,221

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

As of February 26, 2022

Operating Leases

Finance Leases

Remainder fiscal 2022

$

180

$

60

2023

539

240

2024

380

217

2025

130

—

2026

26

—

2027

5

—

Total

1,260

517

Less imputed interest

(92)

(24)

Total

$

1,168

$

493

The weighted-average remaining lease term and discount rate for lease liabilities included in our Condensed Consolidated

Balance Sheet are as follows:

As of February 26, 2022

Operating Leases

Finance Leases

Weighted-average remaining lease term (years)

2.4

1.8

Weighted-average discount rate

5.9

%

4.9

%

XML

Stock Based Compensation

9 Months Ended

Feb. 26, 2022

Stock Based Compensation [Abstract]

Stock Based Compensation

Note 12 - Stock Based Compensation

Total stock-based compensation expense was $

3.0

 million and $

2.8

 million for the thirty-nine weeks ended February 26, 2022

and February 27, 2021, respectively.

Unrecognized compensation expense as a result of non-vested shares of restricted stock outstanding under the Amended and

Restated 2012 Omnibus Long-Term Incentive Plan at February 26, 2022 of $

8.1

 million will be recorded over a weighted

average period of

2.3

 years. Refer to Part II Item 8, Notes to Consolidated Financial Statements and Supplementary Data, Note

16: Stock Compensation Plans in our 2021 Annual Report for further information on our stock compensation plans.

The Company’s restricted share activity for the thirty-nine weeks ended February 26, 2022 follows:

Number of

Shares

Weighted

Average Grant

Date Fair Value

Outstanding, May 29, 2021

302,147

$

39.37

Granted

113,142

41.13

Vested

(90,778)

42.53

Forfeited

(3,932)

37.81

Outstanding, February 26, 2022

320,579

$

39.12

XML

Commitments and Contingencies

9 Months Ended

Feb. 26, 2022

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 13 - Commitments and Contingencies

Financial Instruments

The Company maintained standby letters of credit (“LOCs”) totaling $

4.1

 million at February 26, 2022, which were issued

under the Company's Credit Facility. The outstanding LOCs are for the benefit of certain insurance companies and are not

recorded as a liability on the consolidated balance sheets.

LEGAL PROCEEDINGS

State of Texas v. Cal-Maine Foods, Inc. d/b/a Wharton; and Wharton County Foods, LLC 

On April 23, 2020, the Company and its subsidiary Wharton County Foods, LLC (“WCF”) were named as defendants in State

of Texas v. Cal-Maine Foods, Inc. d/b/a Wharton; and Wharton County Foods, LLC, Cause No. 2020-25427, in the District

Court of Harris County, Texas. The State of Texas (the “State”) asserted claims based on the Company’s and WCF’s alleged

violation of the Texas Deceptive Trade Practices—Consumer Protection Act, Tex. Bus. & Com. Code §§ 17.41-17.63

(“DTPA”). The State claimed that the Company and WCF offered shell eggs at excessive or exorbitant prices during the

COVID-19 state of emergency and made misleading statements about shell egg prices. The State sought temporary and

permanent injunctions against the Company and WCF to prevent further alleged violations of the DTPA, along with over

$

100,000

 in damages. On August 13, 2020, the court granted the defendants’ motion to dismiss the State’s original petition with

prejudice. On September 11, 2020, the State filed a notice of appeal, which was assigned to the Texas Court of Appeals for the

First District. The State filed its opening brief on December 7, 2020. The Company and WCF filed their response on February

8, 2021. On February 11, 2022, the Texas Court of Appeals heard oral argument but has not issued a ruling. Management

believes the risk of material loss related to this matter to be remote.

Bell et al. v. Cal-Maine Foods et al. 

On April 30, 2020, the Company was named as one of several defendants in Bell et al. v. Cal-Maine Foods et al., Case No.

1:20-cv-461, in the Western District of Texas, Austin Division. The defendants include numerous grocery stores, retailers,

producers, and farms. Plaintiffs assert that defendants violated the DTPA by allegedly demanding exorbitant or excessive prices

for eggs during the COVID-19 state of emergency. Plaintiffs request certification of a class of all consumers who purchased

eggs in Texas sold, distributed, produced, or handled by any of the defendants during the COVID-19 state of emergency.

Plaintiffs seek to enjoin the Company and other defendants from selling eggs at a price more than 10% greater than the price of

eggs prior to the declaration of the state of emergency and damages in the amount of $

10,000

 per violation, or $

250,000

 for

each violation impacting anyone over 65 years old. On December 1, 2020, the Company and certain other defendants filed a

motion to dismiss the plaintiffs’ amended class action complaint. The plaintiffs subsequently filed a motion to strike, and the

motion to dismiss and related proceedings were referred to a United States magistrate judge. On July 14, 2021, the magistrate

judge issued a report and recommendation to the court that the defendants’ motion to dismiss be granted and the case be

dismissed without prejudice for lack of subject matter jurisdiction. On September 20, 2021, the court adopted the magistrate’s

report and recommendation in its entirety and granted defendants’ motion to dismiss plaintiffs’ first amended class action

complaint; thereafter, the court entered a final judgment in favor of the Company and certain other defendants dismissing the

case without prejudice. On October 18, 2021, plaintiffs filed a motion to alter or amend the final judgement and allow a filing

of a second amended complaint. The Company responded on November 1, 2021. The court has not ruled on the plaintiffs’

motion.

Kraft Foods Global, Inc. et al. v. United Egg Producers, Inc. et al. 

As previously reported, on September 25, 2008, the Company was named as one of several defendants in numerous antitrust

cases involving the United States shell egg industry. The Company settled all of these cases, except for the claims of certain

plaintiffs who sought substantial damages allegedly arising from the purchase of egg products (as opposed to shell eggs). These

remaining plaintiffs are Kraft Food Global, Inc., General Mills, Inc., and Nestle USA, Inc. (the “Egg Products Plaintiffs”) and

The Kellogg Company.

On September 13, 2019, the case with the Egg Products Plaintiffs was remanded from a multi-district litigation proceeding in

the United States District Court for the Eastern District of Pennsylvania, In re Processed Egg Products Antitrust Litigation,

MDL No. 2002, to the United States District Court for the Northern District of Illinois, Kraft Foods Global, Inc. et al. v. United

Egg Producers, Inc. et al., Case No. 1:11-cv-8808, for trial. The Egg Products Plaintiffs allege that the Company and other

defendants violated Section 1 of the Sherman Act, 15. U.S.C. § 1, by agreeing to limit the production of eggs and thereby

illegally to raise the prices that plaintiffs paid for processed egg products. In particular, the Egg Products Plaintiffs are attacking

certain features of the United Egg Producers animal-welfare guidelines and program used by the Company and many other egg

producers. The Egg Products Plaintiffs seek to enjoin the Company and other defendants from engaging in antitrust violations

and seek treble money damages. The parties filed a joint status report on May 18, 2020. On August 4, 2021, by docket entry,

the court instructed the parties to jointly submit a second status report to the court that included a proposed schedule for

preparing a final pretrial order. On August 25, 2021, the parties filed a joint status report, and on August 26, 2021, the court, by

docket entry, informed the parties that the need to discuss issues was no longer necessary and that a scheduled August 30, 2021,

status hearing was stricken. No trial schedule has yet been entered by the court.

In addition, on October 24, 2019, the Company entered into a confidential settlement agreement with The Kellogg Company

dismissing all claims against the Company for an amount that did not have a material impact on the Company’s financial

condition or results of operations. On November 11, 2019, a stipulation for dismissal was filed with the court, but the court has

not yet entered a judgment on the filing.

The Company intends to continue to defend the remaining case with the Egg Products Plaintiffs as vigorously as possible based

on defenses which the Company believes are meritorious and provable. Adjustments, if any, which might result from the

resolution of this remaining matter with the Egg Products Plaintiffs have not been reflected in the financial statements. While

management believes that there is still a reasonable possibility of a material adverse outcome from the case with the Egg

Products Plaintiffs, at the present time, it is not possible to estimate the amount of monetary exposure, if any, to the Company

due to a range of factors, including the following, among others: the matter is in the early stages of preparing for trial following

remand; any trial will be before a different judge and jury in a different court than prior related cases; there are significant

factual issues to be resolved; and there are requests for damages other than compensatory damages (i.e., injunction and treble

money damages).

State of Oklahoma Watershed Pollution Litigation

On June 18, 2005, the State of Oklahoma filed suit, in the United States District Court for the Northern District of Oklahoma,

against Cal-Maine Foods, Inc. and Tyson Foods, Inc. and affiliates, Cobb-Vantress, Inc., Cargill, Inc. and its affiliate, George’s,

Inc. and its affiliate, Peterson Farms, Inc. and Simmons Foods, Inc. The State of Oklahoma claims that through the disposal of

chicken litter the defendants have polluted the Illinois River Watershed. This watershed provides water to eastern Oklahoma.

The complaint seeks injunctive relief and monetary damages, but the claim for monetary damages has been dismissed by the

court. Cal-Maine Foods, Inc. discontinued operations in the watershed. Accordingly, we do not anticipate that Cal-Maine

Foods, Inc. will be materially affected by the request for injunctive relief unless the court orders substantial affirmative

remediation. Since the litigation began, Cal-Maine Foods, Inc. purchased

100

% of the membership interests of Benton County

Foods, LLC, which is an ongoing commercial shell egg operation within the Illinois River Watershed. Benton County Foods,

LLC is not a defendant in the litigation.

The trial in the case began in September 2009 and concluded in February 2010. The case was tried without a jury, and the court

has not yet issued its ruling. Management believes the risk of material loss related to this matter to be remote.

Other Matters

In addition to the above, the Company is involved in various other claims and litigation incidental to its business. Although the

outcome of these matters cannot be determined with certainty, management, upon the advice of counsel, is of the opinion that

the final outcome should not have a material effect on the Company’s consolidated results of operations or financial position.

XML

Related Party Transaction

9 Months Ended

Feb. 26, 2022

Related Party Transaction [Abstract]

Related Party Transaction

Note 14 - Related Party Transaction

On August 24, 2020, Mrs. Jean Reed Adams, the wife of the Company’s late founder Fred R. Adams, Jr., and the Fred R.

Adams, Jr. Daughters’ Trust, dated July 20, 2018 (the “Daughters’ Trust”), of which the daughters of Mr. Adams are

beneficiaries (together, the “Selling Stockholders”), completed a registered secondary public offering of

6,900,000

 shares of

Common Stock held by them, pursuant to a previously disclosed Agreement Regarding Common Stock (the “Agreement”) filed

as an exhibit to our 2021 Annual Report. Mrs. Adams and the Daughters’ Trust advised the Company that they were conducting

the offering in order to pay estate taxes related to the settlement of Mr. Adam’s estate and to obtain liquidity. The public

offering was made pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-227742),

including the Prospectus contained therein dated October 9, 2018, and a related Prospectus Supplement dated August 19, 2020,

each of which is on file with the Securities and Exchange Commission. The public offering involved only the sale of shares of

Common Stock that were already outstanding, and thus the Company did not issue any new shares or raise any additional

capital in the offering. The expenses of the offering (not including the underwriting discount and legal fees and expenses of

legal counsel for the Selling Stockholders, which were paid by the Selling Stockholders) paid by the Company were $

1.1

million. Pursuant to the Agreement, the Selling Stockholders reimbursed the Company $

551

 thousand.

XML

Summary of Significant Accounting Policies (Policy)

9 Months Ended

Feb. 26, 2022

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

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 in the

United States of America ("GAAP") for complete financial statements and should be read in conjunction with our Annual

Report on Form 10-K for the fiscal year ended May 29, 2021 (the "2021 Annual Report"). 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

Fiscal Year

The Company's fiscal year ends on the Saturday closest to May 31. Each of the three-month periods and year-to-date periods

ended on February 26, 2022 and February 27, 2021 included 13 weeks and 39 weeks, respectively

Use of Estimates

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and

assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results

could differ from those estimates.

The severity, magnitude and duration, as well as the economic consequences of the COVID-19 pandemic, are uncertain, rapidly

changing and difficult to predict. Therefore, our accounting estimates and assumptions might change materially in future

periods in response to COVID-19.

Investment Securities

Investment Securities

Our investment securities are accounted for in accordance with ASC 320, “Investments - Debt and Equity Securities” (“ASC

320”). The Company considers all its debt securities for which there is a determinable fair market value, and there are no

restrictions on the Company's ability to sell within the next 12 months, as available-for-sale. We classify these securities as

current, because the amounts invested are available for current operations. Available-for-sale securities are carried at fair value,

with unrealized gains and losses reported as a separate component of stockholders’ equity. The Company regularly evaluates

changes to the rating of its debt securities by credit agencies and economic conditions to assess and record any expected credit

losses through the allowance for credit losses, limited to the amount that fair value was less than the amortized cost basis. The

cost basis for realized gains and losses on available-for-sale securities is determined by the specific identification method.

Gains and losses are recognized in other income (expenses) as Other, net in the Company's Condensed Consolidated Statements

of Income. Investments in mutual funds are classified as “Other long-term assets” in the Company’s Condensed Consolidated

Balance Sheets.

Trade Receivables

Trade Receivables 

Trade receivables are stated at their carrying values, which include a reserve for credit losses. At February 26, 2022 and May

29, 2021, reserves for credit losses were $

725

 thousand and $

795

 thousand, respectively. The Company extends credit to

customers based on an evaluation of each customer's financial condition and credit history. Collateral is generally not required.

The Company minimizes exposure to counter party credit risk through credit analysis and approvals, credit limits, and

monitoring procedures. In determining our reserve for credit losses, receivables are assigned an expected loss based on

historical loss information adjusted as needed for economic and other forward-looking factors.

Business Combinations

Business Combinations

The Company applies fair value accounting guidance to measure non-financial assets and liabilities associated with business

acquisitions. These assets and liabilities are measured at fair value for the initial purchase price allocation. The fair value of

non-financial assets acquired is determined internally. Our internal valuation methodology for non-financial assets considers the

remaining estimated life of the assets acquired and what management believes is the market value for those assets.

Change in Accounting Principle

Change in Accounting Principle

Effective May 31, 2020, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), which is

intended to improve financial reporting by requiring more timely recording of credit losses on loans and other financial

instruments held by financial institutions and other organizations. The guidance replaces the prior “incurred loss” approach with

an “expected loss” model and requires measurement of all expected credit losses for financial assets held at the reporting date

based on historical experience, current conditions, and reasonable and supportable forecasts. The Company adopted the

guidance on a modified retrospective basis through a cumulative effect adjustment to retained earnings as of the beginning of

the period of adoption. The Company evaluated its current methodology of estimating allowance for doubtful accounts and the

risk profile of its receivables portfolio and developed a model that includes the qualitative and forecasting aspects of the

“expected loss” model under the amended guidance. The Company finalized its assessment of the impact of the amended

guidance and recorded a $

422

 thousand cumulative increase to retained earnings at May 31, 2020.

Immaterial Error Correction

Immaterial Error Correction

Effective on May 30, 2021, the Company acquired the remaining

50

% membership interest in Red River Valley Egg Farm,

LLC (“Red River”), including certain liabilities. During the Company’s third quarter of fiscal 2022, management determined

that it had not properly eliminated select intercompany sales and cost of sales transactions between Red River and the

corresponding other wholly-owned subsidiaries of the Company in its first and second quarter 2022 Condensed Consolidated

Statements of Income. The errors resulted in an overstatement of Net Sales and Cost of Sales of $

6.7

 million in the first quarter

of fiscal 2022 and $

9.2

 million in the second quarter of fiscal 2022. There was

no

 impact to Operating income (loss), Net

income (loss) or Net income (loss) per share. 

We evaluated the errors quantitatively and qualitatively in accordance with Staff Accounting Bulletin

("SAB") No. 99 Materiality, and SAB No. 108 Considering the Effects of Prior Year Misstatements when Quantifying

Misstatements in the Current Year Financial Statements, and determined that the related impact was not material to our

condensed consolidated financial statements for the first or second quarters of fiscal 2022, but that correcting the cumulative

impact of the errors would be relevant to our Condensed Consolidated Statements of Income for the third quarter

ended February 26, 2022. Accordingly, we have reflected the correction of the immaterial errors as a reduction of Net Sales and

Cost of Sales in the accompanying Condensed Consolidated Statements of Income for the thirty-nine weeks ended February 26,

2022.

XML

Acquisition (Tables)

9 Months Ended

Feb. 26, 2022

Acquisitions [Abstract]

Allocation of Purchase Price

Cash consideration paid

$

48,500

Fair value of the Company's equity interest in Red River held before the business combination

48,500

$

97,000

Recognized amounts of identifiable assets acquired and liabilities assumed

Cash

$

3,677

Accounts receivable, net

1,980

Inventory

8,789

Property, plant and equipment

85,002

Liabilities assumed

(2,448)

Deferred income taxes

(8,481)

Total identifiable net assets

88,519

Goodwill

8,481

$

97,000

XML

Investment Securities (Tables)

9 Months Ended

Feb. 26, 2022

Investments Securities [Abstract]

Schedule Of Investment Securities

February 26, 2022

Amortized

Cost

Unrealized 

Gains

Unrealized

Losses

Estimated 

Fair Value

Municipal bonds

$

514

$

—

$

3

$

511

Commercial paper

9,980

—

23

9,957

Corporate bonds

61,634

—

344

61,290

Certificates of deposits

1,268

—

12

1,256

Asset backed securities

8,205

—

94

8,111

Total current investment securities

$

81,601

$

—

$

476

$

81,125

Mutual funds

$

2,967

$

—

$

53

$

2,914

Total noncurrent investment securities

$

2,967

$

—

$

53

$

2,914

May 29, 2021

Amortized 

Cost

Unrealized 

Gains

Unrealized

Losses

Estimated 

Fair Value

Municipal bonds

$

16,424

$

56

$

—

$

16,480

Commercial paper

1,998

—

—

1,998

Corporate bonds

80,092

608

—

80,700

Certificates of deposits

1,077

—

1

1,076

Asset backed securities

11,914

—

10

11,904

Total current investment securities

$

111,505

$

664

$

11

$

112,158

Mutual funds

$

2,306

$

1,810

$

—

$

4,116

Total noncurrent investment securities

$

2,306

$

1,810

$

—

$

4,116

Schedule Of Contractual Maturities Of Investment Securities

Estimated Fair Value

Within one year

$

52,391

1-5 years

28,734

Total

$

81,125

XML

Fair Value Measurements (Tables)

9 Months Ended

Feb. 26, 2022

Fair Value Measurements [Abstract]

Schedule Of Assets Measured At Fair Value On A Recurring Basis

February 26, 2022

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

$

—

$

511

$

—

$

511

Commercial paper

—

9,957

—

9,957

Corporate bonds

—

61,290

—

61,290

Certificates of deposits

—

1,256

—

1,256

Asset backed securities

—

8,111

—

8,111

Mutual funds

2,914

—

—

2,914

Total assets measured at fair value

$

2,914

$

81,125

$

—

$

84,039

May 29, 2021

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

$

—

$

16,480

$

—

$

16,480

Commercial paper

—

1,998

—

1,998

Corporate bonds

—

80,700

—

80,700

Certificates of deposits

—

1,076

—

1,076

Asset backed securities

—

11,904

—

11,904

Mutual funds

4,116

—

—

4,116

Total assets measured at fair value

$

4,116

$

112,158

$

—

$

116,274

XML

Inventories (Tables)

9 Months Ended

Feb. 26, 2022

Inventories [Abstract]

Schedule of Inventories

February 26, 2022

May 29, 2021

Flocks, net of amortization

$

137,086

$

123,860

Eggs and egg products

24,153

21,084

Feed and supplies

78,848

73,431

$

240,087

$

218,375

XML

Accrued Dividends Payable And Dividends per Common Share (Tables)

9 Months Ended

Feb. 26, 2022

Accrued Dividends Payable And Dividends Per Common Share [Abstract]

Schedule of Dividends

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

February 26, 2022

February 27, 2021

Net income attributable to Cal-Maine Foods,

Inc.

$

39,517

$

13,548

$

22,664

$

6,304

Cumulative losses to be recovered prior to

payment of divided at beginning of period

(21,097)

(8,614)

(4,244)

(1,370)

Net income available for dividend

$

18,420

$

4,934

$

18,420

$

4,934

1/3 of net income attributable to Cal-Maine

Foods, Inc. available for dividend

6,140

1,645

6,140

1,645

Common stock outstanding (shares)

44,140

44,056

Class A common stock outstanding (shares)

4,800

4,800

Total common stock outstanding (shares)

48,940

48,856

Dividends per common share*

$

0.125

$

0.034

$

0.125

$

0.034

*Dividends per common share =

1/3

 of Net income attributable to Cal-Maine Foods, Inc. available for dividend ÷ Total common stock

outstanding (shares).

XML

Equity (Tables)

9 Months Ended

Feb. 26, 2022

Equity [Abstract]

Schedule of Statement of Stockholders' Equity Activities, Including Noncontrolling Interest

Thirteen Weeks Ended February 26, 2022

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum. Other

Retained

Noncontrolling

Amount

Amount

Amount

Capital

Comp. Loss

Earnings

Interest

Total

Balance at November

27, 2021

$

703

$

48

$

(27,450)

$

66,019

$

(996)

$

959,124

$

(25)

$

997,423

Other comprehensive

loss, net of tax

—

—

—

—

(417)

—

—

(417)

Stock compensation

plan transactions

—

—

(989)

890

—

—

—

(99)

Dividends

—

—

—

—

—

(6,118)

—

(6,118)

Net income (loss)

—

—

—

—

—

39,517

(63)

39,454

Balance at February

26, 2022

$

703

$

48

$

(28,439)

$

66,909

$

(1,413)

$

992,523

$

(88)

$

1,030,243

Thirty-nine Weeks Ended February 26, 2022

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum. Other

Retained

Noncontrolling

Amount

Amount

Amount

Capital

Comp. Loss

Earnings

Interest

Total

Balance at May 29,

2021

$

703

$

48

$

(27,433)

$

64,044

$

(558)

$

975,977

$

—

$

1,012,781

Other comprehensive

loss, net of tax

—

—

—

—

(855)

—

—

(855)

Stock compensation

plan transactions

—

—

(1,006)

2,865

—

—

—

1,859

Contributions

—

—

—

—

—

—

3

3

Dividends

—

—

—

—

—

(6,118)

—

(6,118)

Net income (loss)

—

—

—

—

—

22,664

(91)

22,573

Balance at February

26, 2022

$

703

$

48

$

(28,439)

$

66,909

$

(1,413)

$

992,523

$

(88)

$

1,030,243

Thirteen Weeks Ended February 27, 2021

Cal-Maine Foods, Inc. Stockholders

Common Stock

Accum.

Class A

Treasury

Paid In

Other Comp.

Retained

Amount

Amount

Amount

Capital

Income (Loss)

Earnings

Total

Balance at November 28, 2020

$

703

$

48

$

(26,723)

$

62,206

$

151

$

968,325

$

1,004,710

Other comprehensive loss, net of tax

—

—

—

—

(286)

—

(286)

Stock compensation plan transactions

—

—

(826)

964

—

—

138

Dividends

—

—

—

—

—

(1,661)

(1,661)

Net income

—

—

—

—

—

13,548

13,548

Balance at February 27, 2021

$

703

$

48

$

(27,549)

$

63,170

$

(135)

$

980,212

$

1,016,449

Thirty-nine Weeks Ended February 27, 2021

Cal-Maine Foods, Inc. Stockholders

Common Stock

Accum.

Class A

Treasury

Paid In

Other Comp.

Retained

Amount

Amount

Amount

Capital

Income (Loss)

Earnings

Total

Balance at May 30, 2020

$

703

$

48

$

(26,674)

$

60,372

$

79

$

975,147

$

1,009,675

Impact of ASC 326

—

—

—

—

—

422

422

Balance at May 31 2020

703

48

(26,674)

60,372

79

975,569

1,010,097

Other comprehensive loss, net of tax

—

—

—

—

(214)

—

(214)

Stock compensation plan transactions

—

—

(875)

2,793

—

—

1,918

Contributions

—

—

—

5

—

—

5

Dividends

—

—

—

—

—

(1,661)

(1,661)

Net income

—

—

—

—

—

6,304

6,304

Balance at February 27, 2021

$

703

$

48

$

(27,549)

$

63,170

$

(135)

$

980,212

$

1,016,449

XML

Net Income per Common Share (Tables)

9 Months Ended

Feb. 26, 2022

Net Income per Common Share [Abstract]

Computation of Basic and Diluted Net Income Per Share

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

February 26, 2022

February 27, 2021

Numerator

Net income

$

39,454

$

13,548

$

22,573

$

6,304

Less: Loss attributable to noncontrolling

interest

(63)

—

(91)

—

Net income attributable to Cal-Maine

Foods, Inc.

$

39,517

$

13,548

$

22,664

$

6,304

Denominator

Weighted-average common shares

outstanding, basic

48,886

48,530

48,888

48,511

Effect of dilutive restricted shares

150

129

147

138

Weighted-average common shares

outstanding, diluted

49,036

48,659

49,035

48,649

Net income per common share attributable to

Cal-Maine Foods, Inc.

Basic

$

0.81

$

0.28

$

0.46

$

0.13

Diluted

$

0.81

$

0.28

$

0.46

$

0.13

XML

Revenue Recognition (Tables)

9 Months Ended

Feb. 26, 2022

Revenue Recognition [Abstract]

Disaggregation of Revenue

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

February 26, 2022

February 27, 2021

Conventional shell egg sales

$

280,633

$

203,189

$

685,678

$

560,297

Specialty shell egg sales

182,945

145,210

462,319

408,537

Egg products

12,749

9,098

33,516

25,736

Other

1,158

1,583

2,682

4,619

$

477,485

$

359,080

$

1,184,195

$

999,189

XML

Leases (Tables)

9 Months Ended

Feb. 26, 2022

Leases [Abstract]

Schedule of Lease Cost

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 26, 2022

Operating lease cost

$

200

$

625

Finance lease cost

Amortization of right-of-use asset

$

44

$

132

Interest on lease obligations

$

6

$

20

Short term lease cost

$

1,086

$

3,221

Schedule of Future Minimum Lease Payments

As of February 26, 2022

Operating Leases

Finance Leases

Remainder fiscal 2022

$

180

$

60

2023

539

240

2024

380

217

2025

130

—

2026

26

—

2027

5

—

Total

1,260

517

Less imputed interest

(92)

(24)

Total

$

1,168

$

493

Schedule of Weighted-Average Information

As of February 26, 2022

Operating Leases

Finance Leases

Weighted-average remaining lease term (years)

2.4

1.8

Weighted-average discount rate

5.9

%

4.9

%

XML

Stock Based Compensation (Tables)

9 Months Ended

Feb. 26, 2022

Stock Based Compensation [Abstract]

Summary of Equity Award Activity

Number of

Shares

Weighted

Average Grant

Date Fair Value

Outstanding, May 29, 2021

302,147

$

39.37

Granted

113,142

41.13

Vested

(90,778)

42.53

Forfeited

(3,932)

37.81

Outstanding, February 26, 2022

320,579

$

39.12

XML

Summary of Significant Accounting Policies (Narrative) (Details) - USD ($)	3 Months Ended				9 Months Ended
	Feb. 26, 2022	Nov. 27, 2021	Aug. 28, 2021	Feb. 27, 2021	Feb. 26, 2022	Feb. 27, 2021	May 30, 2021	May 29, 2021	May 30, 2020
Significant Accounting Policies [Line Items]
Reserves for credit losses	$ 725,000				$ 725,000			$ 795,000
Stockholders' equity	1,030,331,000				1,030,331,000			$ 1,012,781,000
Net sales	477,485,000			$ 359,080,000	1,184,195,000	$ 999,189,000
Cost of sales	385,903,000			311,563,000	1,042,221,000	876,457,000
Operating Income Loss	39,570,000			(493,000)	(2,162,000)	(13,238,000)
Profit Loss	39,454,000			13,548,000	22,573,000	6,304,000
Red River Valley Egg Farm Llc [Member]
Significant Accounting Policies [Line Items]
Business acquisition, percentage of voting interest acquired							50.00%
Revision of Prior Period, Error Correction, Adjustment [Member]
Significant Accounting Policies [Line Items]
Net sales		$ 9,200,000	$ 6,700,000
Cost of sales		$ 9,200,000	$ 6,700,000
Operating Income Loss					0
Profit Loss					0
Retained Earnings [Member]
Significant Accounting Policies [Line Items]
Profit Loss	$ 39,517,000			$ 13,548,000	$ 22,664,000	$ 6,304,000
Retained Earnings [Member] | Restatement Adjustment [Member]
Significant Accounting Policies [Line Items]
Stockholders' equity									$ 422,000,000

XML

Acquisition (Narrative) (Details) - Red River Valley Egg Farm Llc [Member] Layers in Millions	May 30, 2021 USD ($) a Layers	Feb. 26, 2022 USD ($)	May 29, 2021
Business Acquisition [Line Items]
Business acquisition, percentage of voting interest acquired	50.00%
Number of laying hens acquired | Layers	1.7
Area of land | a	400
Gain on remeasurement of interest held prior to acquisition	$ 4,500,000
Ownership percentage			50.00%
Discrete income tax benefit	8,300,000
Reduction of deferred income tax related to outside-basis of equity investment	7,300,000
Reduction to income tax expense on remeasurement gain	954,000
Deferred tax liability recognized	$ 8,500,000	$ 8,481,000

XML

Acquisition (Allocation of Purchase Price) (Details) - USD ($) $ in Thousands	9 Months Ended
	Feb. 26, 2022	May 30, 2021	May 29, 2021
Business Acquisition [Line Items]
Goodwill	$ 44,006		$ 35,525
Red River Valley Egg Farm Llc [Member]
Business Acquisition [Line Items]
Cash consideration paid	48,500
Fair value of the Company's equity interest in Red River held before the business combination	48,500
Business combination, consideration transferred	97,000
Cash	3,677
Accounts receivable, net	1,980
Inventory	8,789
Property, plant and equipment	85,002
Liabilities assumed	(2,448)
Deferred income taxes	(8,481)	$ (8,500)
Total identifiable assets, net	88,519
Goodwill	8,481
Total identifiable assets and goodwill, net	$ 97,000

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Investment Securities (Narrative) (Details) - USD ($)	9 Months Ended
	Feb. 26, 2022	Feb. 27, 2021	May 29, 2021
Investments Securities [Abstract]
Proceeds from sale of available-for-sale securities, current	$ 76,400,000	$ 85,200,000
Proceeds from sale of available-for-sale securities, noncurrent	4,900,000	0
Gross realized gains on sales of available-for-sale securities, current	181,000	116,000
Gross realized gains on sales of available-for-sale securities, noncurrent	2,200,000
Gross realized losses on sales of available-for-sale securities, current	67,000	$ 17,000
Allowance for credit losses	$ 0		$ 0

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Investment Securities (Schedule of Investment Securities) (Details) - USD ($) $ in Thousands	Feb. 26, 2022	May 29, 2021
Debt Securities, Available-for-sale [Line Items]
Amortized Cost, Current	$ 81,601	$ 111,505
Unrealized Gains, Current	0	664
Unrealized Losses, Current	476	11
Estimated Fair Value, Current	81,125	112,158
Amortized Cost, Noncurrent	2,967	2,306
Unrealized Gains, Noncurrent	0	1,810
Unrealized Losses, Noncurrent	53	0
Estimated Fair Value, Noncurrent	2,914	4,116
Municipal Bonds [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost, Current	514	16,424
Unrealized Gains, Current	0	56
Unrealized Losses, Current	3	0
Estimated Fair Value, Current	511	16,480
Commercial Paper [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost, Current	9,980	1,998
Unrealized Gains, Current	0	0
Unrealized Losses, Current	23	0
Estimated Fair Value, Current	9,957	1,998
Corporate Bonds [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost, Current	61,634	80,092
Unrealized Gains, Current	0	608
Unrealized Losses, Current	344	0
Estimated Fair Value, Current	61,290	80,700
Certificates of Deposits [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost, Current	1,268	1,077
Unrealized Gains, Current	0	0
Unrealized Losses, Current	12	1
Estimated Fair Value, Current	1,256	1,076
Asset Backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost, Current	8,205	11,914
Unrealized Gains, Current	0	0
Unrealized Losses, Current	94	10
Estimated Fair Value, Current	8,111	11,904
Mutual Funds [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost, Noncurrent	2,967	2,306
Unrealized Gains, Noncurrent	0	1,810
Unrealized Losses, Noncurrent	53	0
Estimated Fair Value, Noncurrent	$ 2,914	$ 4,116

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Investment Securities (Schedule of Contractual Maturities of Investment Securities) (Details) - USD ($) $ in Thousands	Feb. 26, 2022	May 29, 2021
Investments Securities [Abstract]
Within one year	$ 52,391
1-5 years	28,734
Total	$ 81,125	$ 112,158

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Fair Value Measurements (Schedule of Assets Measured at Fair Value on A Recurring Basis) (Details) - USD ($) $ in Thousands	Feb. 26, 2022	May 29, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 84,039	$ 116,274
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	2,914	4,116
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	81,125	112,158
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Municipal Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	511	16,480
Municipal Bonds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Municipal Bonds [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	511	16,480
Municipal Bonds [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	9,957	1,998
Commercial Paper [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Commercial Paper [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	9,957	1,998
Commercial Paper [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Corporate Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	61,290	80,700
Corporate Bonds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Corporate Bonds [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	61,290	80,700
Corporate Bonds [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Certificates of Deposits [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	1,256	1,076
Certificates of Deposits [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Certificates of Deposits [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	1,256	1,076
Certificates of Deposits [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Asset Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	8,111	11,904
Asset Backed Securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Asset Backed Securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	8,111	11,904
Asset Backed Securities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Mutual Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	2,914	4,116
Mutual Funds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	2,914	4,116
Mutual Funds [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Mutual Funds [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 0	$ 0

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Inventories (Narrative) (Details) pullet_and_breeder in Millions, Layers in Millions	Feb. 26, 2022 Layers pullet_and_breeder
Inventories [Abstract]
Pullets and breeders | pullet_and_breeder	9.4
Layers | Layers	42.7

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Inventories (Schedule Of Inventories) (Details) - USD ($) $ in Thousands	Feb. 26, 2022	May 29, 2021
Inventories [Abstract]
Flocks, net of amortization	$ 137,086	$ 123,860
Eggs and egg products	24,153	21,084
Feed and supplies	78,848	73,431
Total inventories	$ 240,087	$ 218,375

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Accrued Dividends Payable And Dividends per Common Share (Narrative) (Details)	3 Months Ended
	Feb. 26, 2022 $ / shares
Accrued Dividends Payable And Dividends Per Common Share [Abstract]
Percentage of net income loss used to compute accrued dividends	33.33%
Dividends payable per share	$ 0.125

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Accrued Dividends Payable And Dividends per Common Share (Schedule of Dividends) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 26, 2022	Feb. 27, 2021	Feb. 26, 2022	Feb. 27, 2021
Class of Stock [Line Items]
Net Income (Loss)	$ 39,517	$ 13,548	$ 22,664	$ 6,304
Cumulative losses to be recovered prior to payment of divided at beginning of period	(21,097)	(8,614)	(4,244)	(1,370)
Net income available for dividend	18,420	4,934	18,420	4,934
1/3 of net income attributable to Cal-Maine Foods, Inc. available for dividend	$ 6,140	$ 1,645	$ 6,140	$ 1,645
Common stock outstanding (shares)	48,940	48,856	48,940	48,856
Dividends per common share (in dollars per share)	$ 0.125	$ 0.034	$ 0.125	$ 0.034
Percentage of net income loss used to compute accrued dividends	33.33%
Common Stock [Member]
Class of Stock [Line Items]
Common stock outstanding (shares)	44,140	44,056	44,140	44,056
Class A Common Stock [Member]
Class of Stock [Line Items]
Common stock outstanding (shares)	4,800	4,800	4,800	4,800

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Credit Facility (Narrative) (Details) - Credit Agreement [Member]	9 Months Ended
	Feb. 26, 2022 USD ($)
Line Of Credit Facility [Line Items]
Credit facility term	5 years
Maximum borrowing capacity	$ 250,000,000
Available additional capacity	200,000,000
Amount outstanding	$ 0
Maximum total funded debt to capitalization ratio	50.00%
Minimum tangible net worth, amount	$ 700,000
Minimum tangible net worth, percentage of net income	50.00%
Threshold of voting control in related entities that requires compliance with covenant	100.00%
Minimum amount of company voting stock	50.00%
Dividend policy, percentage	33.33%
Minimum cash, cash equivalents, and credit facility availability	$ 50,000,000
Minimum [Member]
Line Of Credit Facility [Line Items]
Commitment fee	0.15%
Maximum [Member]
Line Of Credit Facility [Line Items]
Commitment fee	0.25%
Eurodollar [Member] | Minimum [Member]
Line Of Credit Facility [Line Items]
Basis spread on variable rate	1.00%
Eurodollar [Member] | Maximum [Member]
Line Of Credit Facility [Line Items]
Basis spread on variable rate	1.75%
Eurodollar, One Month [Member]
Line Of Credit Facility [Line Items]
Interest period	12 months
Eurodollar, Two Month [Member]
Line Of Credit Facility [Line Items]
Interest period	6 months
Eurodollar, Three Month [Member]
Line Of Credit Facility [Line Items]
Interest period	3 months
Eurodollar, Six Month [Member]
Line Of Credit Facility [Line Items]
Interest period	2 months
Eurodollar, Twelve Month [Member]
Line Of Credit Facility [Line Items]
Interest period	1 month
Base Rate [Member] | Minimum [Member]
Line Of Credit Facility [Line Items]
Basis spread on variable rate	0.00%
Base Rate [Member] | Maximum [Member]
Line Of Credit Facility [Line Items]
Basis spread on variable rate	0.75%
Base Rate, Federal Funds [Member]
Line Of Credit Facility [Line Items]
Basis spread on variable rate	0.50%
Base Rate, Eurodollar [Member]
Line Of Credit Facility [Line Items]
Interest period	1 month
Basis spread on variable rate	1.00%
Standby Letters of Credit [Member]
Line Of Credit Facility [Line Items]
Maximum borrowing capacity	$ 15,000,000
Amount outstanding	4,100,000
Swingline [Member]
Line Of Credit Facility [Line Items]
Maximum borrowing capacity	$ 15,000,000

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Equity (Schedule of Statement of Stockholders' Equity Activities, Including Noncontrolling Interest) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 26, 2022	Feb. 27, 2021	Feb. 26, 2022	Feb. 27, 2021
Schedule of Stockholders Equity [Line Items]
Beginning balance	$ 997,423	$ 1,004,710	$ 1,012,781	$ 1,009,675
Other comprehensive income (loss), net of tax	(417)	(286)	(855)	(214)
Stock compensation plan transactions	(99)	138	1,859	1,918
Contributions			3	5
Dividends	(6,118)	(1,661)	(6,118)	(1,661)
Net income	39,454	13,548	22,573	6,304
Ending balance	1,030,243	1,016,449	1,030,243	1,016,449
Adjustment [Member]
Schedule of Stockholders Equity [Line Items]
Beginning balance				422
Cumulative Effect Period Of Adoption Adjusted Balance [Member]
Schedule of Stockholders Equity [Line Items]
Beginning balance				1,010,097
Treasury Stock [Member]
Schedule of Stockholders Equity [Line Items]
Beginning balance	(27,450)	(26,723)	(27,433)	(26,674)
Stock compensation plan transactions	(989)	(826)	(1,006)	(875)
Ending balance	(28,439)	(27,549)	(28,439)	(27,549)
Treasury Stock [Member] | Cumulative Effect Period Of Adoption Adjusted Balance [Member]
Schedule of Stockholders Equity [Line Items]
Beginning balance				(26,674)
Additional Paid-in Capital [Member]
Schedule of Stockholders Equity [Line Items]
Beginning balance	66,019	62,206	64,044	60,372
Stock compensation plan transactions	890	964	2,865	2,793
Contributions				5
Ending balance	66,909	63,170	66,909	63,170
Additional Paid-in Capital [Member] | Cumulative Effect Period Of Adoption Adjusted Balance [Member]
Schedule of Stockholders Equity [Line Items]
Beginning balance				60,372
AOCI Attributable to Parent [Member]
Schedule of Stockholders Equity [Line Items]
Beginning balance	(996)	151	(558)	79
Other comprehensive income (loss), net of tax	(417)	(286)	(855)	(214)
Ending balance	(1,413)	(135)	(1,413)	(135)
AOCI Attributable to Parent [Member] | Cumulative Effect Period Of Adoption Adjusted Balance [Member]
Schedule of Stockholders Equity [Line Items]
Beginning balance				79
Retained Earnings [Member]
Schedule of Stockholders Equity [Line Items]
Beginning balance	959,124	968,325	975,977	975,147
Dividends	(6,118)	(1,661)	(6,118)	(1,661)
Net income	39,517	13,548	22,664	6,304
Ending balance	992,523	980,212	992,523	980,212
Retained Earnings [Member] | Adjustment [Member]
Schedule of Stockholders Equity [Line Items]
Beginning balance				422
Retained Earnings [Member] | Cumulative Effect Period Of Adoption Adjusted Balance [Member]
Schedule of Stockholders Equity [Line Items]
Beginning balance				975,569
Noncontrolling Interest [Member]
Schedule of Stockholders Equity [Line Items]
Beginning balance	(25)		0
Contributions			3
Net income	(63)		(91)
Ending balance	(88)		(88)
Common Stock [Member] | Common Stock [Member]
Schedule of Stockholders Equity [Line Items]
Beginning balance	703	703	703	703
Ending balance	703	703	703	703
Common Stock [Member] | Common Stock [Member] | Cumulative Effect Period Of Adoption Adjusted Balance [Member]
Schedule of Stockholders Equity [Line Items]
Beginning balance				703
Class A Common Stock [Member] | Common Stock [Member]
Schedule of Stockholders Equity [Line Items]
Beginning balance	48	48	48	48
Ending balance	$ 48	$ 48	$ 48	48
Class A Common Stock [Member] | Common Stock [Member] | Cumulative Effect Period Of Adoption Adjusted Balance [Member]
Schedule of Stockholders Equity [Line Items]
Beginning balance				$ 48

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Net Income per Common Share (Computation of Basic and Diluted Net Income Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 26, 2022	Feb. 27, 2021	Feb. 26, 2022	Feb. 27, 2021
Net Income per Common Share [Abstract]
Net income	$ 39,454	$ 13,548	$ 22,573	$ 6,304
Less: Loss attributable to noncontrolling interest	(63)	0	(91)	0
Net income attributable to Cal-Maine Foods, Inc.	$ 39,517	$ 13,548	$ 22,664	$ 6,304
Denominator
Weighted-average common shares outstanding, basic (in shares)	48,886	48,530	48,888	48,511
Effect of dilutive restricted shares (in shares)	150	129	147	138
Weighted-average common shares outstanding, diluted (in shares)	49,036	48,659	49,035	48,649
Net income per common share attributable to Cal-Maine Foods, Inc.
Basic (in dollars per share)	$ 0.81	$ 0.28	$ 0.46	$ 0.13
Diluted (in dollars per share)	$ 0.81	$ 0.28	$ 0.46	$ 0.13

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Revenue Recognition (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 26, 2022	Feb. 27, 2021	Feb. 26, 2022	Feb. 27, 2021
Disaggregation of Revenue [Line Items]
Net sales	$ 477,485	$ 359,080	$ 1,184,195	$ 999,189
Conventional shell egg sales [Member]
Disaggregation of Revenue [Line Items]
Net sales	280,633	203,189	685,678	560,297
Specialty shell egg sales [Member]
Disaggregation of Revenue [Line Items]
Net sales	182,945	145,210	462,319	408,537
Egg products [Member]
Disaggregation of Revenue [Line Items]
Net sales	12,749	9,098	33,516	25,736
Other [Member]
Disaggregation of Revenue [Line Items]
Net sales	$ 1,158	$ 1,583	$ 2,682	$ 4,619

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Leases (Schedule of Lease Cost) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Feb. 26, 2022	Feb. 26, 2022
Leases [Abstract]
Operating Lease cost	$ 200	$ 625
Finance Lease cost
Amortization of right-of-use asset	44	132
Interest on lease obligations	6	20
Short term lease cost	$ 1,086	$ 3,221

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Leases (Schedule of Future Minimum Lease Payments) (Details) $ in Thousands	Feb. 26, 2022 USD ($)
Operating Leases
Remainder of fiscal 2022	$ 180
2023	539
2024	380
2025	130
2026	26
2027	5
Total	1,260
Less imputed interest	(92)
Total	1,168
Finance Leases
Remainder fiscal 2022	60
2023	240
2024	217
2025	0
2026	0
2027	0
Total	517
Less imputed interest	(24)
Total	$ 493

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Leases (Schedule of Weighted Average Information) (Details)	Feb. 26, 2022
Operating Leases
Weighted-average remaining lease term (years)	2 years 4 months 24 days
Weighted-average discount rate	5.90%
Finance Leases
Weighted-average remaining lease term (years)	1 year 9 months 18 days
Weighted-average discount rate	4.90%

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Stock Based Compensation (Narrative) (Details) - USD ($) $ in Millions	9 Months Ended
	Feb. 26, 2022	Feb. 27, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 8.1
Weighted average period of unrecognized compensation expense	2 years 3 months 18 days
Stock based compensation expense (benefit)	$ 3.0	$ 2.8

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Stock Based Compensation (Summary of Equity Award Activity) (Details)	9 Months Ended
	Feb. 26, 2022 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward]
Number of Shares, Outstanding, Beginning Balance (in shares) | shares	302,147
Number of Shares, Granted (in shares) | shares	113,142
Number of Shares, Vested (in shares) | shares	(90,778)
Number of Shares, Forfeited (in shares) | shares	(3,932)
Number of Shares, Outstanding, Ending Balance (in shares) | shares	320,579
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Weighted Average Grant Date Fair Value, Outstanding, Beginning Balance (in dollars per share) | $ / shares	$ 39.37
Weighted Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares	41.13
Weighted Average Grant Date Fair Value, Vested (in dollars per share) | $ / shares	42.53
Weighted Average Grant Date Fair Value, Forfeited (in dollars per share) | $ / shares	37.81
Weighted Average Grant Date Fair Value, Outstanding, Ending Balance (in dollars per share) | $ / shares	$ 39.12

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Commitments and Contingencies (Narrative) (Details) - USD ($)	Apr. 23, 2020	Feb. 26, 2022
Credit Agreement [Member]
Loss Contingencies [Line Items]
Amount outstanding		$ 0
Credit Agreement [Member] | Standby Letters of Credit [Member]
Loss Contingencies [Line Items]
Amount outstanding		$ 4,100,000
Benton County Foods [Member]
Loss Contingencies [Line Items]
Ownership interest		100.00%
Pending Litigation | State of Texas v. Cal-Maine Foods, Inc. d/b/a Wharton; and Wharton County Foods, LLC [Member]
Loss Contingencies [Line Items]
Damages sought	$ 100,000
Pending Litigation | Bell et al. v. Cal-Maine Foods et al. [Member] | Minimum [Member]
Loss Contingencies [Line Items]
Damages sought	10,000
Pending Litigation | Bell et al. v. Cal-Maine Foods et al. [Member] | Maximum [Member]
Loss Contingencies [Line Items]
Damages sought	$ 250,000

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Related Party Transaction (Narrative) (Details) - Immediate Family Member Of Management Or Principal Owner [Member] $ in Thousands	Aug. 24, 2020 USD ($) shares
Related Party Transaction [Line Items]
Shares issued | shares	6,900,000
Fees paid	$ 1,100
Fees reimbursed	$ 551