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

August 27, 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

44,135,851

 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 September 27, 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)

(Unaudited)

August 27, 2022

May 28, 2022

Assets

Current assets:

Cash and cash equivalents

$

136,021

$

59,084

Investment securities available-for-sale

145,784

115,429

Trade and other receivables, net

178,217

177,257

Income tax receivable

42,147

42,147

Inventories

265,754

263,316

Prepaid expenses and other current assets

10,965

4,286

Total current assets

778,888

661,519

Property, plant & equipment, net

688,656

677,796

Investments in unconsolidated entities

15,674

15,530

Goodwill

44,006

44,006

Intangible assets, net

17,592

18,131

Other long-term assets

9,913

10,507

Total Assets

$

1,554,729

$

1,427,489

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable and accrued expenses

$

188,689

$

148,018

Dividends payable

41,742

36,656

Total current liabilities

230,431

184,674

Other noncurrent liabilities

9,706

10,274

Deferred income taxes, net

126,629

128,196

Total liabilities

366,766

323,144

Commitments and contingencies - see Note 11

—

—

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

69,017

67,989

Retained earnings

1,149,399

1,065,854

Accumulated other comprehensive loss, net of tax

(2,350)

(1,596)

Common stock in treasury at cost –

26,125

 shares at August 27, 2022 and

26,121

 shares

at May 28, 2022

(28,495)

(28,447)

Total Cal-Maine Foods, Inc. stockholders’ equity

1,188,322

1,104,551

Noncontrolling interest in consolidated entity

(359)

(206)

Total stockholders’ equity

1,187,963

1,104,345

Total Liabilities and Stockholders’ Equity

$

1,554,729

$

1,427,489

See Notes to Condensed Consolidated Financial Statements.

4

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

Thirteen Weeks Ended

August 27, 2022

August 28, 2021

Net sales

$

658,344

$

324,986

Cost of sales

440,854

318,341

Gross profit

217,490

6,645

Selling, general and administrative

53,607

46,525

(Gain) loss on disposal of fixed assets

33

(213)

Operating income (loss)

163,850

(39,667)

Other income (expense):

Interest income, net

903

232

Royalty income

428

273

Equity income of unconsolidated entities

144

135

Other, net

155

5,163

Total other income, net

1,630

5,803

Income (loss) before income taxes

165,480

(33,864)

Income tax expense (benefit)

40,346

(15,838)

Net income (loss)

125,134

(18,026)

Less: Loss attributable to noncontrolling interest

(153)

—

Net income (loss) attributable to Cal-Maine Foods, Inc.

$

125,287

$

(18,026)

Net income (loss) per common share:

Basic

$

2.58

$

(0.37)

Diluted

$

2.57

$

(0.37)

Weighted average shares outstanding:

Basic

48,623

48,858

Diluted

48,811

48,858

See Notes to Condensed Consolidated Financial Statements.

5

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of

Comprehensive Income (Loss)

(In thousands)

(Unaudited)

Thirteen Weeks Ended

August 27, 2022

August 28, 2021

Net income (loss)

$

125,134

 $ 

(18,026)

Other comprehensive income (loss), before tax:

Unrealized holding loss on available-for-sale securities, net of reclassification

adjustments

(997)

(224)

Income tax benefit related to items of other comprehensive income

243

54

Other comprehensive loss, net of tax

(754)

(170)

Comprehensive income (loss)

124,380

(18,196)

Less: Comprehensive loss attributable to the noncontrolling interest

(153)

—

Comprehensive income (loss) attributable to Cal-Maine Foods, Inc.

$

124,533

$

(18,196)

See Notes to Condensed Consolidated Financial Statements.

6

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Thirteen Weeks Ended

August 27, 2022

August 28, 2021

Cash flows from operating activities:

Net income (loss)

$

125,134

$

(18,026)

Depreciation and amortization

17,312

17,389

Deferred income taxes

(1,324)

(15,838)

Other adjustments, net

31,690

(7,637)

Net cash provided by (used in) operations

172,812

(24,112)

Cash flows from investing activities:

Purchases of investment securities

(51,834)

(1,388)

Sales and maturities of investment securities

20,296

39,388

Distributions from unconsolidated entities

—

400

Acquisition of business, net of cash acquired

—

(44,823)

Purchases of property, plant and equipment

(27,662)

(11,233)

Net proceeds from disposal of property, plant and equipment

78

1,171

Net cash used in investing activities

(59,122)

(16,485)

Cash flows from financing activities:

Payments of dividends

(36,653)

—

Purchase of common stock by treasury

(45)

(18)

Principal payments on finance lease

(55)

(53)

Net cash used in financing activities

(36,753)

(71)

Net change in cash and cash equivalents

76,937

(40,668)

Cash and cash equivalents at beginning of period

59,084

57,352

Cash and cash equivalents at end of period

$

136,021

$

16,684

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 and

in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial

reporting and should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended May 28, 2022 (the

“2022 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 ended on August 27, 2022

and August 28, 2021 included

13 weeks

.

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.

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 Operations. 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. As of August 27, 2022 and May

28, 2022, reserves for credit losses were $

716

 thousand and $

775

 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.

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

6.7

 million in the first

8

quarter of fiscal 2022 and $

9.2

 million in the second quarter of fiscal 2022. There was

no

 impact to Operating 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 Operations for the third quarter

ended February 26, 2022. Accordingly, we have reflected the correction of the immaterial error for the first quarter of fiscal

2022 as a reduction of Net Sales and Cost of Sales in the accompanying Condensed Consolidated Statements of Operations.

New Accounting Pronouncements and Policies

No new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our

Consolidated Financial Statements.

Note 2 - Investment

Securities

The following represents the Company’s investment securities as of August 27, 2022 and May 28, 2022 (in thousands):

August 27, 2022

Amortized

Cost

Unrealized 

Gains

Unrealized

Losses

Estimated 

Fair Value

Municipal bonds

$

15,032

$

—

$

155

$

14,877

Commercial paper

15,936

—

53

15,883

Corporate bonds

81,711

—

1,237

80,474

Certificates of deposits

3,263

—

48

3,215

US government and agency obligations

8,190

—

87

8,103

Asset backed securities

15,620

—

227

15,393

Treasury bills

7,870

—

31

7,839

Total current investment securities

$

147,622

$

—

$

1,838

$

145,784

Mutual funds

$

3,467

$

—

$

130

$

3,337

Total noncurrent investment securities

$

3,467

$

—

$

130

$

3,337

May 28, 2022

Amortized 

Cost

Unrealized 

Gains

Unrealized

Losses

Estimated 

Fair Value

Municipal bonds

$

10,136

$

—

$

32

$

10,104

Commercial paper

14,940

—

72

14,868

Corporate bonds

74,167

—

483

73,684

Certificates of deposits

1,263

—

18

1,245

US government and agency obligations

2,205

4

—

2,209

Asset backed securities

13,456

—

137

13,319

Total current investment securities

$

116,167

$

4

$

742

$

115,429

Mutual funds

$

3,826

$

—

$

74

$

3,752

Total noncurrent investment securities

$

3,826

$

—

$

74

$

3,752

Available-for-sale

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

20.3

 million and $

39.4

 million during the

thirteen weeks ended August 27, 2022 and August 28, 2021, respectively. Gross realized gains for the thirteen weeks ended

August 27, 2022 and August 28, 2021 were $

2

 thousand and $

127

 thousand, respectively. Gross realized losses for the thirteen

weeks ended August 27, 2022 and August 28, 2021 were $

27

 thousand and $

60

 thousand, respectively. There were

no

allowances for credit losses at August 27, 2022 and May 28, 2022.

9

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 August 27, 2022 are as follows (in thousands):

Estimated Fair Value

Within one year

$

64,148

1-5 years

81,636

Total

$

145,784

Noncurrent 

There were

no

 sales of noncurrent investment securities during the thirteen weeks ended August 27, 2022. Proceeds from sales

and maturities of noncurrent investment securities were $

385

 thousand during the thirteen weeks ended August 28, 2021. Gross

realized gains for the thirteen weeks ended August 28, 2021 were $

130

 thousand. There were

no

 realized losses for the thirteen

weeks ended August 28, 2021.

Note 3 - 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.

10

Assets and Liabilities Measured at Fair Value on a Recurring Basis

In accordance with the fair value hierarchy described above, the following table shows the fair value of financial assets and

liabilities measured at fair value on a recurring basis as of August 27, 2022 and May 28, 2022 (in thousands):

August 27, 2022

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

$

—

$

14,877

$

—

$

14,877

Commercial paper

—

15,883

—

15,883

Corporate bonds

—

80,474

—

80,474

Certificates of deposits

—

3,215

—

3,215

US government and agency obligations

—

8,103

—

8,103

Asset backed securities

—

15,393

—

15,393

Treasury bills

—

7,839

—

7,839

Mutual funds

3,337

—

—

3,337

Total assets measured at fair value

$

3,337

$

145,784

$

—

$

149,121

May 28, 2022

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

$

—

$

10,104

$

—

$

10,104

Commercial paper

—

14,868

—

14,868

Corporate bonds

—

73,684

—

73,684

Certificates of deposits

—

1,245

—

1,245

US government and agency obligations

—

2,209

—

2,209

Asset backed securities

—

13,319

—

13,319

Mutual funds

3,752

—

—

3,752

Total assets measured at fair value

$

3,752

$

115,429

$

—

$

119,181

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.

Note 4 - Inventories

Inventories consisted of the following as of August 27, 2022 and May 28, 2022 (in thousands):

August 27, 2022

May 28, 2022

Flocks, net of amortization

$

152,264

$

144,051

Eggs and egg products

24,548

26,936

Feed and supplies

88,942

92,329

$

265,754

$

263,316

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 August

27, 2022 and May 28, 2022 consisted of approximately

11.4

 million and

11.5

 million pullets and breeders and

41.1

 million and

42.2

 million layers, respectively.

Note 5 - 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

11

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 first quarter of fiscal 2023, we will pay a cash dividend of

approximately $

0.853

 per share to holders of our Common Stock and Class A Common Stock. 

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

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

Thirteen Weeks Ended

August 27, 2022

August 28, 2021

Net income (loss) attributable to Cal-Maine Foods, Inc.

$

125,287

$

(18,026)

Cumulative loss to be recovered prior to payment of divided at beginning of period

—

(4,244)

Net income available for dividend

$

125,287

$

—

1/3 of net income attributable to Cal-Maine Foods, Inc. available for dividend

41,762

—

Common stock outstanding (shares)

44,136

44,057

Class A common stock outstanding (shares)

4,800

4,800

Total common stock outstanding (shares)

48,936

48,857

Dividends per common share*

$

0.853

$

—

*Dividends per common share =

1/3

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

outstanding (shares).

Note 6 - Equity

The following reflects equity activity for the thirteen weeks ended August 27, 2022 and August 28, 2021 (in thousands):

Thirteen Weeks Ended August 27, 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 28,

2022

$

703

$

48

$

(28,447)

$

67,989

$

(1,596)

$

1,065,854

$

(206)

$

1,104,345

Other comprehensive

loss, net of tax

—

—

—

—

(754)

—

—

(754)

Stock compensation

plan transactions

—

—

(48)

1,028

—

—

—

980

Dividends

—

—

—

—

—

(41,742)

—

(41,742)

Net income (loss)

—

—

—

—

—

125,287

(153)

125,134

Balance at August

27, 2022

$

703

$

48

$

(28,495)

$

69,017

$

(2,350)

$

1,149,399

$

(359)

$

1,187,963

Thirteen Weeks Ended August 28, 2021

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum. Other

Retained

Amount

Amount

Amount

Capital

Comp. Loss

Earnings

Total

Balance at May 29, 2021

$

703

$

48

$

(27,433)

$

64,044

$

(558)

$

975,977

$

1,012,781

Other comprehensive loss, net of tax

—

—

—

—

(170)

—

(170)

Stock compensation plan transactions

—

—

(18)

1,000

—

—

982

Net loss

—

—

—

—

—

(18,026)

(18,026)

Balance at August 28, 2021

$

703

$

48

$

(27,451)

$

65,044

$

(728)

$

957,951

$

995,567

12

Note 7 - Net Income (Loss) per Common Share

Basic net income (loss) 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. Restricted shares of

131

 thousand were antidilutive due to the net loss for the first

quarter of fiscal 2022. These shares were not included in the diluted net loss per share calculation.

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

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

Thirteen Weeks Ended

August 27, 2022

August 28, 2021

Numerator

Net income (loss)

$

125,134

$

(18,026)

Less: Loss attributable to noncontrolling interest

(153)

—

Net income (loss) attributable to Cal-Maine Foods, Inc.

$

125,287

$

(18,026)

Denominator

Weighted-average common shares outstanding, basic

48,623

48,858

Effect of dilutive restricted shares

188

—

Weighted-average common shares outstanding, diluted

48,811

48,858

Net income (loss) per common share attributable to Cal-Maine Foods, Inc.

Basic

$

2.58

$

(0.37)

Diluted

$

2.57

$

(0.37)

Note 8 – Revenue from Contracts with Customers

Satisfaction of Performance Obligation

The vast majority of the Company’s revenue is derived from agreements 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 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 allowance for 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 the 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.’’

13

Disaggregation of Revenue

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

Thirteen Weeks Ended

August 27, 2022

August 28, 2021

Conventional shell egg sales

$

425,589

$

182,030

Specialty shell egg sales

200,820

132,458

Egg products

27,640

9,366

Other

4,295

1,132

$

658,344

$

324,986

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 August 27, 2022 and May 28, 2022, 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.

Note 9 - Stock Based Compensation

Total stock-based compensation expense was $

1.0

 million for the thirteen weeks ended August 27, 2022 and August 28, 2021.

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 August 27, 2022 of $

5.9

 million will be recorded over a weighted average

period of

1.9

 years. Refer to Part II Item 8, Notes to Consolidated Financial Statements and Supplementary Data, Note 16:

Stock Compensation Plans in our 2022 Annual Report for further information on our stock compensation plans.

The Company’s restricted share activity for the thirteen weeks ended August 27, 2022 follows:

Number of

Shares

Weighted

Average Grant

Date Fair Value

Outstanding, May 28, 2022

317,844

$

39.12

Vested

(3,240)

38.31

Forfeited

(2,778)

39.48

Outstanding, August 27, 2022

311,826

$

39.12

Note 10 – Income Taxes

For the first quarters of fiscal 2023 and 2022, the Company recorded income tax expense of $

40.3

 million and income tax

benefit of $

15.8

 million which reflects an effective tax rate of

24.4

% and

46.8

%, respectively. Excluding the impact of discrete

items related to an $

8.3

 million net tax benefit recorded in the first quarter of fiscal 2022 in connection with the Red River

Valley Egg Farm, LLC acquisition, the adjusted effective tax rate for the first quarter of fiscal 2022 is

22.4

%. 

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

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

noncontrolling interest.

14

Note 11 - Commitments and Contingencies

Financial Instruments

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

4.1

 million at August 27, 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. On August 16, 2022, the appeals court reversed and remanded the case back to the trial court for further

proceedings. The Company and WCF are considering whether to appeal this decision from the First District. 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 dismissed the case without

prejudice. On July 13, 2022, the court denied the plaintiffs’ motion to set aside or amend the judgment to amend their

complaint.

On March 15, 2022, plaintiffs filed a second suit against the Company and several defendants in Bell et al. v. Cal-Maine Foods

et al., Case No. 1:22-cv-246, in the Western District of Texas, Austin Division alleging the same assertions as laid out in the

first complaint. On August 12, 2022, the Company and other defendants in the case filed a motion to dismiss the plaintiffs’

class action complaint. On September 6, 2022, the plaintiffs’ filed their opposition to the motion to dismiss and the Company

and other defendants filed their reply on September 13, 2022. The court has not issued a ruling. Management believes the risk

of material loss related to both matters to be remote.

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

15

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. On May 2, 2022, the court set trial for October 24, 2022, but on September 20, 2022, the court

cancelled the trial date due to COVID-19 protocols and converted the trial date to a status hearing to reschedule the jury trial.

We anticipate the trial being rescheduled for the first or second calendar quarter of 2023. 

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, and on March 28,

2022, the court dismissed the Company with prejudice.

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: two earlier trials based on substantially the same facts and

legal arguments resulted in findings of no conspiracy and/or damages; this 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.

16

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 28, 2022

(the “2022 Annual Report”), and the accompanying financial statements and notes included in Part II Item 8 of the 2022 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 2022

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 that was first detected in commercial flocks in the U.S. in February

2022, (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, which generally have been exacerbated by Russia’s invasion of Ukraine starting February 2022, (vii) our ability to retain

existing customers, acquire new customers and grow our product mix and (viii) 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 41.1 million

layers and 11.4 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.

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. 

We routinely fill our storage bins during harvest season when prices for feed ingredients are generally lower. To ensure

continued availability of feed ingredients, we may enter into contracts for future purchases of corn and soybean meal, and as

part of these contracts, we may lock-in the basis portion of our grain purchases several months in advance. Furthermore, due to

the more limited supply for organic ingredients, we may commit to purchase organic ingredients in advance to help ensure

supply. Ordinarily, we do not enter into long-term contracts beyond a year to purchase corn and soybean meal or hedge against

17

increases in the prices of corn and soybean meal. 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 and most recently the Russia-Ukraine war.

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.

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.

HPAI

We are closely monitoring the current outbreak of highly pathogenic avian influenza (“HPAI”), that was first detected in

commercial flocks in the U.S. in February 2022 and which was most recently detected in commercial flocks in the U.S. in

September 2022. 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 as of September 27, 2022. The USDA division of Animal and Plant Health Inspection Service (“APHIS”)

reported that approximately 35.6 million commercial layer hens and 1.0 million pullets have been depopulated due to HPAI.

According to APHIS, the most recently reported outbreaks of HPAI affecting commercial layer hens and pullets occurred

September 21, 2022 and June 9, 2022, respectively. We believe the HPAI outbreak will continue to have an impact on the

overall supply of eggs through the balance of this calendar year and possibly beyond. According to LEAP Market Analytics,

layer hen inventory is not projected to exceed the 320 million mark until October of 2023.

While no farm is immune from HPAI, 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.

CAGE-FREE EGGS

Ten states have passed legislation or regulations mandating minimum space or cage-free requirements for egg production or

mandated the sale of only cage-free eggs and egg products in their states, with implementation of these laws ranging from

January 2022 to January 2026. These states represent approximately 27% of the U.S. total population according to the 2020

U.S. Census. In California and Massachusetts, which collectively represent 14% of the total U.S. population according to the

2020 U.S. Census, cage-free legislation went into effect January 1, 2022. However, these laws are subject to judicial challenge,

and the Supreme Court of the U.S. recently announced that in October 2022 it will review a case challenging California’s law

that requires the sale of only cage-free eggs in that state. These laws have already affected and, if upheld, will continue to affect

sourcing, production and pricing of eggs (conventional as well as specialty) as the national demand for cage-free production

could be greater than the current supply, which would increase the price of cage-free eggs, unless more cage-free production

capacity is constructed. Likewise, the national supply for eggs from conventional production could exceed consumer demand

which would decrease the price of conventional eggs.

A significant number of our customers have previously announced goals to offer cage-free eggs exclusively on or before 2026,

subject in most cases to availability of supply, affordability and customer demand, among other contingencies. Some of these

customers have recently changed those goals to offer 70% cage-free eggs by the end of 2030. Our customers typically do not

commit to long-term purchases of specific quantities or types of eggs with us, and as a result, it is difficult to accurately predict

customer requirements for cage-free eggs. We are, however, engaging with our customers in an effort to achieve a smooth

transition in meeting their announced goals and needs. Sales of cage-free eggs represented approximately 19.4% of our shell

egg revenues for the first quarter of fiscal 2023. We have invested significant capital in recent years to acquire and construct

cage-free facilities, and we expect our focus for future expansion will continue to include cage-free facilities. At the same time,

18

we understand the importance of our continued ability to provide more affordable conventional eggs in order to provide our

customers with a variety of egg choices and to address hunger in our communities. 

For additional information, see the 2022 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.”

EXECUTIVE OVERVIEW

For the first quarter of fiscal 2023, we recorded a gross profit of $217.5 million compared to $6.6 million for the same period of

fiscal 2022, with the increase due primarily to higher shell egg prices and increased volume of specialty eggs sold, partially

offset by the increased cost of feed ingredients and processing, packaging and warehouse costs. Our total dozens sold increased

8.1% to 275.3 million dozen shell eggs for the first quarter of fiscal 2023 compared to 254.6 million dozen for the same period

of fiscal 2022. For the first quarter of fiscal 2023, conventional dozens sold decreased 2.3% and specialty dozens sold increased

35.1% as compared to the same quarter in fiscal 2022. Demand for specialty eggs increased in the first quarter of fiscal 2023

compared to the same prior year period due primarily to the higher prices for conventional eggs. Further, demand for specialty

eggs continued to increase as retailers continued to shift to selling cage-free products and cage-free legislation went into full

effect in California and Massachusetts on January 1, 2022. We benefited from the strong demand for specialty eggs as we

placed more of our cage-free facilities into production and better utilized our existing cage-free production capacity.

Conventional egg prices increased in the first quarter of fiscal 2023 primarily due to decreased supply caused by the HPAI

outbreak compounded with good customer demand. See the discussion under the heading “HPAI” above. The daily average

price for the UB southeast large index for the first quarter of fiscal 2023 increased 133.8% from the comparable period in the

prior year. Our net average selling price per dozen for the first quarter of fiscal 2023 was $2.275 compared to $1.235 in the

prior-year period. Layer hen numbers reported by the USDA as of September 21, 2022, were 305.3 million, which represents a

decrease of 4.6% compared with the layer hen inventory a year ago. The USDA also reported that the hatch from April 2022

through August 2022 decreased 0.5% as compared with the prior-year period. As of September 1, 2022, however, eggs in

incubators were up 9.0% year-over-year, indicating that layer flocks may increase in the future.

Our farm production costs per dozen produced for the first quarter of fiscal 2023 increased 16.5%, or $0.148, compared to the

first quarter of fiscal 2022 . This increase was primarily due to increased prices for feed ingredients and a higher basis in corn in

most of our production areas. For the first quarter of fiscal 2023, the average Chicago Board of Trade (“CBOT”) daily market

price was $6.65 per bushel for corn and $456 per ton for soybean meal, representing increases of 11.5% and 25.4%,

respectively, compared to the average daily CBOT prices for the comparable period in the prior year.

RESULTS OF OPERATIONS

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

Operations expressed as a percentage of net sales.

Thirteen Weeks Ended

August 27, 2022

August 28, 2021

Net sales

100.0

%

100.0

%

Cost of sales

67.0

%

98.0

%

Gross profit

33.0

%

2.0

%

Selling, general and administrative

8.1

%

14.3

%

(Gain) loss on disposal of fixed assets

—

%

(0.1)

%

Operating income (loss)

24.9

%

(12.2)

%

Total other income, net

0.2

%

1.8

%

Income (loss) before income taxes

25.1

%

(10.4)

%

Income tax expense (benefit)

6.1

%

(4.9)

%

Net income (loss)

19.0

%

(5.5)

%

NET SALES

Total net sales for the first quarter of fiscal 2023 were a record $658.3 million compared to $325.0 million for the same period

of fiscal 2022.

19

Net shell egg sales represented 95.8% and 97.1% of total net sales for the first quarters of fiscal 2023 and 2022, respectively.

Shell egg sales classified as “Other” represent sales of hard-cooked eggs and other miscellaneous byproducts included with our

shell egg operations. 

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

Thirteen Weeks Ended

August 27, 2022

August 28, 2021

Total net sales

$

658,344

$

324,986

Conventional

$

425,589

67.5

%

$

182,030

57.6

%

Specialty

200,820

31.8

%

132,458

42.0

%

Egg sales, net

626,409

99.3

%

314,488

99.6

%

Other

4,295

0.7

%

1,132

0.4

%

Net shell egg sales

$

630,704

100.0

%

$

315,620

100.0

%

Net shell egg sales as a percent of total net sales

95.8

%

97.1

%

Dozens sold:

Conventional

179,712

65.3

%

183,872

72.2

%

Specialty

95,605

34.7

%

70,750

27.8

%

Total dozens sold

275,317

100.0

%

254,622

100.0

%

Net average selling price per dozen:

Conventional

$

2.368

$

0.990

Specialty

$

2.101

$

1.872

All shell eggs

$

2.275

$

1.235

Egg products sales: 

Egg products net sales

27,640

9,366

Pounds sold

16,502

15,269

Net average selling price per pound

1.675

0.613

Shell egg net sales

First Quarter – Fiscal 2023 vs. Fiscal 2022

-

In the first quarter of fiscal 2023, conventional egg sales increased $243.6 million, or 133.8%, compared to the first

quarter of fiscal 2022, 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 $247.6 million increase and the change in volume

resulted in a $4.1 million decrease in net sales, respectively.

-

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

production layer hen flock and customer and consumer demand. Conventional egg prices further increased in the first

quarter of fiscal 2023 primarily due to decreased supply caused by the HPAI outbreak, discussed above.

-

Conventional egg prices generally respond more quickly to market conditions as we sell the majority of our

conventional shell eggs based on formulas that adjust periodically and take into account, in varying ways,

independently quoted regional wholesale market prices for shell eggs or formulas related to our costs of production.

The majority of our specialty eggs are typically sold at prices and terms negotiated directly with customers and

therefore do not fluctuate as much as conventional pricing. As a result of these independently quoted whole markets

for conventional eggs reaching near historical highs, the average selling price for conventional eggs exceeded the

average selling price for specialty eggs in the first quarter of fiscal 2023.

-

Specialty egg sales increased $68.4 million, or 51.6%, in the first quarter of fiscal 2023 compared to the first quarter of

fiscal 2022, primarily due to a 35.1% increase in the volume of specialty eggs sold, which resulted in a $46.5 million

increase in net sales. 

-

According to Information Resources, Inc., Total US – Multi Outlet for the latest 13 weeks ended August 27, 2022,

cage-free eggs dozens sold (including free-range, pasture-raised and organic) increased 34.9%. We believe this

increase in demand was positively impacted by the higher conventional egg prices as compared to the same period in

20

the prior year. Demand for specialty eggs was further positively affected by California’s and Massachusetts’s cage-

free mandates going into effect January 1, 2022, as well as more retailers shifting to selling more cage-free products.

-

Our specialty egg sales in the first quarter of fiscal 2023 versus the prior-year period benefitted from the strong

demand for specialty eggs as we placed more of our cage-free facilities into production, and we better utilized our

existing cage-free production capacity. Cage-free egg sales for the first quarter of fiscal 2023 represented 19.4% of our

total net shell egg sales versus 22.1% for the same prior year period due the higher conventional egg prices. Cage-free

dozens sold increased 58% in the first of quarter of fiscal 2023 as compared to the first quarter of fiscal 2022.

Egg products net sales

First Quarter – Fiscal 2023 vs. Fiscal 2022

-

Egg products net sales increased $18.3 million or 195.1% for the first quarter of fiscal 2023 compared to the same

period of fiscal 2022, primarily due to a 173.2% selling price increase, which had a $17.5 million positive impact on

net sales.

-

Our egg products net average selling price increased in the first quarter of fiscal 2023, compared to the first quarter of

fiscal 2022 as the supply decreased due to the HPAI outbreak that started in February 2022. We believe 13.4 million of

the 33.7 million layers culled as a result of the HPAI outbreak were located at facilities dedicated to support inline

breaking facilities in Iowa and Ohio.

COST OF SALES

Costs of sales for the first quarter of fiscal 2023 were $440.9 million compared to $318.3 million for the same period of fiscal

2022. 

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

August 27, 2022

August 28, 2021

%

Change

Cost of Sales:

Farm production

$

266,651

$

207,495

28.5

%

Processing, packaging, and warehouse

81,417

65,059

25.1

Egg purchases and other (including change in inventory)

68,298

37,973

79.9

Total shell eggs

416,366

310,527

34.1

Egg products

24,488

7,814

213.4

Total

$

440,854

$

318,341

38.5

%

Farm production costs (per dozen produced)

Feed

$

0.667

$

0.545

22.4

%

Other

$

0.379

$

0.353

7.4

%

Total

$

1.046

$

0.898

16.5

%

Outside egg purchases (average cost per dozen)

$

2.57

$

1.35

90.4

%

Dozens produced

257,654

236,458

9.0

%

Percent produced to sold

93.6%

92.9%

0.8

%

Farm Production

First Quarter – Fiscal 2023 vs. Fiscal 2022

-

Feed costs per dozen produced increased 22.4% in the first quarter of fiscal 2023 compared to the first quarter of fiscal

2022. This increase was primarily due to increased prices for corn, our primary feed ingredient. 

21

-

For the first quarter of fiscal 2023, the average daily Chicago Board of Trade (“CBOT”) market price was $6.65 per

bushel for corn and $456 per ton of soybean meal representing increases of 11.5% and 25.4%, respectively, as

compared to the average daily CBOT prices for the first quarter of fiscal 202 2. 

Supplies of corn and soybean remained tight relative to demand in the first quarter of fiscal 2023 as evidenced by a low stock-

to-use ratio for corn, as a result of weather-related shortfalls in production and yields, ongoing disruptions related to the

COVID-19 global pandemic and the Russia-Ukraine war and its impact on the export markets. Basis levels for corn ran

significantly higher in our area of operations compared to our prior year first fiscal quarter. For fiscal 2023, we expect

continued corn and soybean upward pricing pressures and further market volatility to affect feed costs. 

Processing, packaging, and warehouse

First Quarter – Fiscal 2023 vs. Fiscal 2022

-

Cost of packaging materials increased 16.1% compared to the first quarter of fiscal 2022 due to rising inflation.

-

Labor costs increased 24.4% due to wage increases and increased use of contract labor in response to labor shortages .

-

Dozens processed increased 8.6% compared to the first quarter of fiscal 2022, which resulted in a $2.2 million increase

in costs.

Egg purchases and other (including change in inventory)

First Quarter – Fiscal 2023 vs. Fiscal 2022

-

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 93.6% from 92.9%.

GROSS PROFIT 

Gross profit for the first quarter of fiscal 2023 was $217.5 million compared to $6.6 million for the same period of fiscal 2022.

The increase of $210.9 million was primarily due to higher egg prices as well as the increased volume of specialty eggs sold,

partially offset by the increased cost of feed ingredients and processing, packaging and warehouse costs.

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

August 27, 2022

August 28, 2021

$ Change

% Change

Specialty egg expense

$

13,067

$

13,715

$

(648)

(4.7)

%

Delivery expense

19,916

13,936

5,980

42.9

%

Payroll, taxes and benefits

10,987

9,939

1,048

10.5

%

Stock compensation expense

1,025

1,001

24

2.4

%

Other expenses

8,612

7,934

678

8.5

%

Total

$

53,607

$

46,525

$

7,082

15.2

%

First Quarter – Fiscal 2023 vs. Fiscal 2022

Specialty egg expense

-

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

egg volumes, which were up 35.1% for the first quarter of fiscal 2023 compared to the same period of fiscal 2022.

However, our specialty egg expense decreased by 4.7%, primarily due to increased sales to other Eggland’s Best, Inc.

(“EB”) franchisees, including unconsolidated affiliates, Specialty Eggs, LLC and Southwest Specialty Eggs, LLC.

These franchisees that were responsible for the franchise fees, advertising and promotion costs associated with those

sales, which resulted in reduced costs for us. Also, the higher prices for conventional eggs and the comparatively lower

prices for specialty eggs diminished the need to promote specialty eggs; as a result, EB temporarily reduced the related

franchise fees for certain specialty egg products to encourage continued production of these products.

22

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 expense is primarily due to increased wages for all employees due to the

inflationary market.

OPERATING INCOME (LOSS)

For the first quarter of fiscal 2023, we recorded operating income of $163.9 million compared to operating loss of $39.7 million

for the same period of fiscal 2022.

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 first quarter of fiscal 2023, we earned $1.1 million of interest income compared to $290 thousand for the same period of

fiscal 2022. The increase resulted from significantly higher investment balances. The Company recorded interest expense of

$148 thousand and $58 thousand for the first quarters ended August 27, 2022 and August 28, 2021, respectively.

Other, net for the first quarter ended August 27, 2022, was income of $155 thousand compared to income of $5.2 million for

the same period of fiscal 2022. The decrease is primarily due to our acquisition of the remaining 50% membership interest in

Red River in the first quarter of fiscal 2022 as we recognized a $4.5 million gain due to the remeasurement of our equity

investment.

INCOME TAXES

For the first quarter of fiscal 2023, pre-tax income was $165.5 million compared to pre-tax loss of $33.9 million for the same

period of fiscal 2022. We recorded income tax expense of $40.3 million for the first quarter of fiscal 2023, which reflects an

effective tax rate of 24.4%, compared to an income tax benefit of $15.8 million in the prior year period, which reflects an

effective tax rate of 46.8%. Excluding the impact of discrete items related to a $8.3 million net tax benefit recorded in the first

quarter of fiscal 2022 in connection with the Red River Valley Egg Farm, LLC (“Red River”) acquisition, income tax benefit

for the comparable period of fiscal 2022 was $7.6 million, which reflects an adjusted effective tax rate of 22.4%. 

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

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

noncontrolling interest.

NET INCOME ATTRIBUTABLE TO CAL-MAINE FOODS, INC.

Net income attributable to Cal-Maine Foods, Inc. for the first quarter ended August 27, 2022, was $125.3 million, or $2.58 per

basic and $2.57 per diluted common share, compared to net loss attributable to Cal-Maine Foods, Inc. of $18.0 million or $0.37

per basic and diluted common share for the same period of fiscal 2022.

LIQUIDITY AND CAPITAL RESOURCES 

Working Capital and Current Ratio

Our working capital at August 27, 2022 was $548.5 million, compared to $476.8 million at May 28, 2022. The calculation of

working capital is defined as current assets less current liabilities. Our current ratio was 3.4 at August 27, 2022, compared with

3.6 at May 28, 2022. The current ratio is calculated by dividing current assets by current liabilities.

Cash Flows from Operating Activities

For the thirteen weeks ended August 27, 2022, $172.8 million in net cash was provided by operating activities, compared to

$24.1 million used by operating activities for the comparable period in fiscal 2022. The increase in cash flow from operating

23

activities resulted primarily from higher selling prices for conventional and specialty eggs as well as increased volume of

specialty egg sales, partially offset by increased costs of feed ingredients compared to the prior-year period. The increase in

Other adjustments, net is primarily due to a $67.4 million balance for income taxes payable as of August 27, 2022.

Cash Flows from Investing Activities

We continue to invest in our facilities, with $27.7 million used to purchase property, plant and equipment for the thirteen weeks

ended August 27, 2022, compared to $11.2 million in the same period of fiscal 2022. In the first quarter of fiscal 2022, we

acquired the remaining 50% membership interest in Red River Valley Egg Farm, LLC for $44.8 million, net of cash acquired.

Purchases of investments were $51.8 million in the first quarter of fiscal 2023, compared to $1.4 million in fiscal 2022. The

increase in purchases of investments is primarily due to the increased cash provided by operating activities noted above. Sales

and maturities of investment securities were $20.3 million for the thirteen weeks ended August 27, 2022, compared to $39.4

million for the comparable period in fiscal 2022. 

Cash Flows from Financing Activities

We paid dividends of $36.7 million in the first quarter of fiscal 2023.

As of August 27, 2022, cash increased $76.9 million since May 28, 2022, compared to a decrease of $40.7 million during the

same period of fiscal 2022.

Credit Facility

We had no long-term debt outstanding at August 27, 2022 or May 28, 2022. On November 15, 2021, we entered into a credit

agreement that provides for a senior secured revolving credit facility (the “Credit Facility”), in an initial aggregate principal

amount of up to $250 million with a five-year term. As of August 27, 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. Refer to Part II Item 8. Notes to the Financial Statements, Note 10 – Credit Facility included in our 2022

Annual Report for further information regarding our long-term debt.

Material Cash Requirements

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

smooth transition toward their announced commitment timeline for cage-free egg sales. As previously reported, during the first

quarter of fiscal 2023, our Board of Directors approved another capital project to expand our cage-free production capabilities.

The project at Chase, Kansas will convert existing conventional layer capacity to cage-free capacity for approximately 1.5

million cage-free hens and include remodels of all remaining pullet facilities. Project completion is expected by year-end 2025.

The following table presents material construction projects approved as of August 27, 2022 (in thousands):

Project(s) Type

Projected 

Completion

Projected Cost

Spent as of August

27, 2022

Remaining

Projected Cost

Cage-Free Layer & Pullet Houses/Processing

Facility

Fiscal 2023

$

132,161

115,343

16,818

Cage-Free Layer & Pullet Houses

Fiscal 2023

24,923

19,548

5,375

Cage-Free Layer & Pullet Houses

Fiscal 2024

42,591

383

42,208

Cage-Free Layer & Pullet Houses

Fiscal 2025

94,183

7,729

86,454

$

293,858

$

143,003

$

150,855

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

current capital needs for at least the next 12 months. 

IMPACT OF 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.

24

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

2022 Annual Report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our exposure to market risk during the thirteen weeks ended August 27, 2022 from the

information provided in Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our 2022 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 August 27, 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 August 27, 2022

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

25

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 2022 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 2022 Annual Report.

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

The following table is a summary of our first quarter 2023 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

05/29/22 to 06/25/22

286

$

47.04

—

—

06/26/22 to 07/23/22

609

52.48

—

—

07/24/22 to 08/27/22

—

—

—

—

895

$

50.74

—

—

(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.

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.

26

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: 

September 27, 2022

/s/ Max P. Bowman

Max P. Bowman

Vice President, Chief Financial Officer

(Principal Financial Officer)

໿

Date: 

September 27, 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:

September 27, 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:

September 27, 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 August

27, 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:

September 27, 2022

XML

Document and Entity Information - shares	3 Months Ended
	Aug. 27, 2022	Sep. 27, 2022
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Aug. 27, 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	--06-03
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Central Index Key	0000016160
Common Stock [Member]
Entity Common Stock, Shares Outstanding		44,135,851
Class A Common Stock [Member]
Entity Common Stock, Shares Outstanding		4,800,000

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Aug. 27, 2022	May 28, 2022
Current assets:
Cash and cash equivalents	$ 136,021	$ 59,084
Investment securities available-for-sale	145,784	115,429
Trade and other receivables, net	178,217	177,257
Income taxes receivable	42,147	42,147
Inventories	265,754	263,316
Prepaid expenses and other current assets	10,965	4,286
Total current assets	778,888	661,519
Property, plant & equipment, net	688,656	677,796
Investments in unconsolidated entities	15,674	15,530
Goodwill	44,006	44,006
Intangible assets, net	17,592	18,131
Other long-term assets	9,913	10,507
Total Assets	1,554,729	1,427,489
Current liabilities:
Accounts payable and accrued expenses	188,689	148,018
Dividends payable	41,742	36,656
Total current liabilities	230,431	184,674
Other noncurrent liabilities	9,706	10,274
Deferred income taxes, net	126,629	128,196
Total liabilities	366,766	323,144
Commitments and contingencies - see Note 13
Stockholders' equity:
Paid-in capital	69,017	67,989
Retained earnings	1,149,399	1,065,854
Accumulated other comprehensive loss, net of tax	(2,350)	(1,596)
Common stock in treasury at cost - 26,125 shares at August 27, 2022 and 26,121 shares at May 28, 2022	(28,495)	(28,447)
Total Cal-Maine Foods, Inc. stockholders' equity	1,188,322	1,104,551
Noncontrolling interest in consolidated entity	(359)	(206)
Total stockholders' equity	1,187,963	1,104,345
Total Liabilities and Stockholders' Equity	1,554,729	1,427,489
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	Aug. 27, 2022	May 28, 2022
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)	26,125,000	26,121,000
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 Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Aug. 27, 2022	Aug. 28, 2021
Condensed Consolidated Statements of Operations [Abstract]
Net sales	$ 658,344	$ 324,986
Cost of sales	440,854	318,341
Gross profit	217,490	6,645
Selling, general and administrative	53,607	46,525
(Gain) loss on disposal of fixed assets	33	(213)
Operating income (loss)	163,850	(39,667)
Other income (expense):
Interest income, net	903	232
Royalty income	428	273
Equity income of unconsolidated entities	144	135
Other, net	155	5,163
Total other income, net	1,630	5,803
Income (loss) before income taxes	165,480	(33,864)
Income tax expense (benefit)	40,346	(15,838)
Net income (loss)	125,134	(18,026)
Less: Loss attributable to noncontrolling interest	(153)	0
Net income (loss) attributable to Cal-Maine Foods, Inc.	$ 125,287	$ (18,026)
Net income (loss) per common share:
Basic (in dollars per share)	$ 2.58	$ (0.37)
Diluted (in dollars per share)	$ 2.57	$ (0.37)
Weighted average shares outstanding:
Basic (in shares)	48,623	48,858
Diluted (in shares)	48,811	48,858

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Aug. 27, 2022	Aug. 28, 2021
Condensed Consolidated Statements of Comprehensive Income (Loss) [Abstract]
Net income (loss)	$ 125,134	$ (18,026)
Other comprehensive income (loss), before tax:
Unrealized holding loss available-for-sale securities, net of reclassification adjustments	(997)	(224)
Income tax benefit related to items of other comprehensive income	243	54
Other comprehensive loss, net of tax	(754)	(170)
Comprehensive income (loss)	124,380	(18,196)
Less: Comprehensive loss attributable to the noncontrolling interest	(153)	0
Comprehensive income (loss) attributable to Cal-Maine Foods, Inc.	$ 124,533	$ (18,196)

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Aug. 27, 2022	Aug. 28, 2021
Cash flows from operating activities:
Net income (loss)	$ 125,134	$ (18,026)
Depreciation and amortization	17,312	17,389
Deferred income taxes	(1,324)	(15,838)
Other adjustments, net	31,690	(7,637)
Net cash provided by (used in) operations	172,812	(24,112)
Cash flows from investing activities:
Purchases of investment securities	(51,834)	(1,388)
Sales and maturities of investment securities	20,296	39,388
Distributions from unconsolidated entities	0	400
Acquisition of business, net of cash acquired	0	(44,823)
Purchases of property, plant and equipment	(27,662)	(11,233)
Net proceeds from disposal of property, plant and equipment	78	1,171
Net cash used in investing activities	(59,122)	(16,485)
Cash flows from financing activities:
Payments of dividends	(36,653)	0
Purchase of common stock by treasury	(45)	(18)
Principal payments on finance lease	(55)	(53)
Net cash used in financing activities	(36,753)	(71)
Net change in cash and cash equivalents	76,937	(40,668)
Cash and cash equivalents at beginning of period	59,084	57,352
Cash and cash equivalents at end of period	$ 136,021	$ 16,684

XML

Summary of Significant Accounting Policies

3 Months Ended

Aug. 27, 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 and

in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial

reporting and should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended May 28, 2022 (the

“2022 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 ended on August 27, 2022

and August 28, 2021 included

13 weeks

.

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.

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 Operations. 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. As of August 27, 2022 and May

28, 2022, reserves for credit losses were $

716

 thousand and $

775

 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.

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 Operations. 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 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 Operations for the third quarter

ended February 26, 2022. Accordingly, we have reflected the correction of the immaterial error for the first quarter of fiscal

2022 as a reduction of Net Sales and Cost of Sales in the accompanying Condensed Consolidated Statements of Operations.

New Accounting Pronouncements and Policies

No new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our

Consolidated Financial Statements.

XML

Investment Securities

3 Months Ended

Aug. 27, 2022

Investments Securities [Abstract]

Investment Securities

Note 2 - Investment

Securities

The following represents the Company’s investment securities as of August 27, 2022 and May 28, 2022 (in thousands):

August 27, 2022

Amortized

Cost

Unrealized 

Gains

Unrealized

Losses

Estimated 

Fair Value

Municipal bonds

$

15,032

$

—

$

155

$

14,877

Commercial paper

15,936

—

53

15,883

Corporate bonds

81,711

—

1,237

80,474

Certificates of deposits

3,263

—

48

3,215

US government and agency obligations

8,190

—

87

8,103

Asset backed securities

15,620

—

227

15,393

Treasury bills

7,870

—

31

7,839

Total current investment securities

$

147,622

$

—

$

1,838

$

145,784

Mutual funds

$

3,467

$

—

$

130

$

3,337

Total noncurrent investment securities

$

3,467

$

—

$

130

$

3,337

May 28, 2022

Amortized 

Cost

Unrealized 

Gains

Unrealized

Losses

Estimated 

Fair Value

Municipal bonds

$

10,136

$

—

$

32

$

10,104

Commercial paper

14,940

—

72

14,868

Corporate bonds

74,167

—

483

73,684

Certificates of deposits

1,263

—

18

1,245

US government and agency obligations

2,205

4

—

2,209

Asset backed securities

13,456

—

137

13,319

Total current investment securities

$

116,167

$

4

$

742

$

115,429

Mutual funds

$

3,826

$

—

$

74

$

3,752

Total noncurrent investment securities

$

3,826

$

—

$

74

$

3,752

Available-for-sale

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

20.3

 million and $

39.4

 million during the

thirteen weeks ended August 27, 2022 and August 28, 2021, respectively. Gross realized gains for the thirteen weeks ended

August 27, 2022 and August 28, 2021 were $

2

 thousand and $

127

 thousand, respectively. Gross realized losses for the thirteen

weeks ended August 27, 2022 and August 28, 2021 were $

27

 thousand and $

60

 thousand, respectively. There were

no

allowances for credit losses at August 27, 2022 and May 28, 2022.

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 August 27, 2022 are as follows (in thousands):

Estimated Fair Value

Within one year

$

64,148

1-5 years

81,636

Total

$

145,784

Noncurrent 

There were

no

 sales of noncurrent investment securities during the thirteen weeks ended August 27, 2022. Proceeds from sales

and maturities of noncurrent investment securities were $

385

 thousand during the thirteen weeks ended August 28, 2021. Gross

realized gains for the thirteen weeks ended August 28, 2021 were $

130

 thousand. There were

no

 realized losses for the thirteen

weeks ended August 28, 2021.

XML

Fair Value Measurements

3 Months Ended

Aug. 27, 2022

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 3 - 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 August 27, 2022 and May 28, 2022 (in thousands):

August 27, 2022

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

$

—

$

14,877

$

—

$

14,877

Commercial paper

—

15,883

—

15,883

Corporate bonds

—

80,474

—

80,474

Certificates of deposits

—

3,215

—

3,215

US government and agency obligations

—

8,103

—

8,103

Asset backed securities

—

15,393

—

15,393

Treasury bills

—

7,839

—

7,839

Mutual funds

3,337

—

—

3,337

Total assets measured at fair value

$

3,337

$

145,784

$

—

$

149,121

May 28, 2022

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

$

—

$

10,104

$

—

$

10,104

Commercial paper

—

14,868

—

14,868

Corporate bonds

—

73,684

—

73,684

Certificates of deposits

—

1,245

—

1,245

US government and agency obligations

—

2,209

—

2,209

Asset backed securities

—

13,319

—

13,319

Mutual funds

3,752

—

—

3,752

Total assets measured at fair value

$

3,752

$

115,429

$

—

$

119,181

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

3 Months Ended

Aug. 27, 2022

Inventories [Abstract]

Inventories

Note 4 - Inventories

Inventories consisted of the following as of August 27, 2022 and May 28, 2022 (in thousands):

August 27, 2022

May 28, 2022

Flocks, net of amortization

$

152,264

$

144,051

Eggs and egg products

24,548

26,936

Feed and supplies

88,942

92,329

$

265,754

$

263,316

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 August

27, 2022 and May 28, 2022 consisted of approximately

11.4

 million and

11.5

 million pullets and breeders and

41.1

 million and

42.2

 million layers, respectively.

XML

Accrued Dividends Payable And Dividends per Common Share

3 Months Ended

Aug. 27, 2022

Accrued Dividends Payable And Dividends Per Common Share [Abstract]

Accrued Dividends Payable And Dividends Per Common Share

Note 5 - 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 first quarter of fiscal 2023, we will pay a cash dividend of

approximately $

0.853

 per share to holders of our Common Stock and Class A Common Stock. 

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

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

Thirteen Weeks Ended

August 27, 2022

August 28, 2021

Net income (loss) attributable to Cal-Maine Foods, Inc.

$

125,287

$

(18,026)

Cumulative loss to be recovered prior to payment of divided at beginning of period

—

(4,244)

Net income available for dividend

$

125,287

$

—

1/3 of net income attributable to Cal-Maine Foods, Inc. available for dividend

41,762

—

Common stock outstanding (shares)

44,136

44,057

Class A common stock outstanding (shares)

4,800

4,800

Total common stock outstanding (shares)

48,936

48,857

Dividends per common share*

$

0.853

$

—

*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

3 Months Ended

Aug. 27, 2022

Equity [Abstract]

Equity

Note 6 - Equity

The following reflects equity activity for the thirteen weeks ended August 27, 2022 and August 28, 2021 (in thousands):

Thirteen Weeks Ended August 27, 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 28,

2022

$

703

$

48

$

(28,447)

$

67,989

$

(1,596)

$

1,065,854

$

(206)

$

1,104,345

Other comprehensive

loss, net of tax

—

—

—

—

(754)

—

—

(754)

Stock compensation

plan transactions

—

—

(48)

1,028

—

—

—

980

Dividends

—

—

—

—

—

(41,742)

—

(41,742)

Net income (loss)

—

—

—

—

—

125,287

(153)

125,134

Balance at August

27, 2022

$

703

$

48

$

(28,495)

$

69,017

$

(2,350)

$

1,149,399

$

(359)

$

1,187,963

Thirteen Weeks Ended August 28, 2021

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum. Other

Retained

Amount

Amount

Amount

Capital

Comp. Loss

Earnings

Total

Balance at May 29, 2021

$

703

$

48

$

(27,433)

$

64,044

$

(558)

$

975,977

$

1,012,781

Other comprehensive loss, net of tax

—

—

—

—

(170)

—

(170)

Stock compensation plan transactions

—

—

(18)

1,000

—

—

982

Net loss

—

—

—

—

—

(18,026)

(18,026)

Balance at August 28, 2021

$

703

$

48

$

(27,451)

$

65,044

$

(728)

$

957,951

$

995,567

XML

Net Income (Loss) per Common Share

3 Months Ended

Aug. 27, 2022

Net Income (Loss) per Common Share [Abstract]

Net Income (Loss) per Common Share

Note 7 - Net Income (Loss) per Common Share

Basic net income (loss) 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. Restricted shares of

131

 thousand were antidilutive due to the net loss for the first

quarter of fiscal 2022. These shares were not included in the diluted net loss per share calculation.

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

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

Thirteen Weeks Ended

August 27, 2022

August 28, 2021

Numerator

Net income (loss)

$

125,134

$

(18,026)

Less: Loss attributable to noncontrolling interest

(153)

—

Net income (loss) attributable to Cal-Maine Foods, Inc.

$

125,287

$

(18,026)

Denominator

Weighted-average common shares outstanding, basic

48,623

48,858

Effect of dilutive restricted shares

188

—

Weighted-average common shares outstanding, diluted

48,811

48,858

Net income (loss) per common share attributable to Cal-Maine Foods, Inc.

Basic

$

2.58

$

(0.37)

Diluted

$

2.57

$

(0.37)

XML

Revenue from Contracts with Customers

3 Months Ended

Aug. 27, 2022

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

Note 8 – Revenue from Contracts with Customers

Satisfaction of Performance Obligation

The vast majority of the Company’s revenue is derived from agreements 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 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 allowance for 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 the 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

August 27, 2022

August 28, 2021

Conventional shell egg sales

$

425,589

$

182,030

Specialty shell egg sales

200,820

132,458

Egg products

27,640

9,366

Other

4,295

1,132

$

658,344

$

324,986

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 August 27, 2022 and May 28, 2022, 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

Stock Based Compensation

3 Months Ended

Aug. 27, 2022

Stock Based Compensation [Abstract]

Stock Based Compensation

Note 9 - Stock Based Compensation

Total stock-based compensation expense was $

1.0

 million for the thirteen weeks ended August 27, 2022 and August 28, 2021.

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 August 27, 2022 of $

5.9

 million will be recorded over a weighted average

period of

1.9

 years. Refer to Part II Item 8, Notes to Consolidated Financial Statements and Supplementary Data, Note 16:

Stock Compensation Plans in our 2022 Annual Report for further information on our stock compensation plans.

The Company’s restricted share activity for the thirteen weeks ended August 27, 2022 follows:

Number of

Shares

Weighted

Average Grant

Date Fair Value

Outstanding, May 28, 2022

317,844

$

39.12

Vested

(3,240)

38.31

Forfeited

(2,778)

39.48

Outstanding, August 27, 2022

311,826

$

39.12

XML

Income Taxes

3 Months Ended

Aug. 27, 2022

Income Taxes [Abstract]

Income Taxes

Note 10 – Income Taxes

For the first quarters of fiscal 2023 and 2022, the Company recorded income tax expense of $

40.3

 million and income tax

benefit of $

15.8

 million which reflects an effective tax rate of

24.4

% and

46.8

%, respectively. Excluding the impact of discrete

items related to an $

8.3

 million net tax benefit recorded in the first quarter of fiscal 2022 in connection with the Red River

Valley Egg Farm, LLC acquisition, the adjusted effective tax rate for the first quarter of fiscal 2022 is

22.4

%. 

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

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

noncontrolling interest.

XML

Commitments and Contingencies

3 Months Ended

Aug. 27, 2022

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 11 - Commitments and Contingencies

Financial Instruments

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

4.1

 million at August 27, 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. On August 16, 2022, the appeals court reversed and remanded the case back to the trial court for further

proceedings. The Company and WCF are considering whether to appeal this decision from the First District. 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 dismissed the case without

prejudice. On July 13, 2022, the court denied the plaintiffs’ motion to set aside or amend the judgment to amend their

complaint.

On March 15, 2022, plaintiffs filed a second suit against the Company and several defendants in Bell et al. v. Cal-Maine Foods

et al., Case No. 1:22-cv-246, in the Western District of Texas, Austin Division alleging the same assertions as laid out in the

first complaint. On August 12, 2022, the Company and other defendants in the case filed a motion to dismiss the plaintiffs’

class action complaint. On September 6, 2022, the plaintiffs’ filed their opposition to the motion to dismiss and the Company

and other defendants filed their reply on September 13, 2022. The court has not issued a ruling. Management believes the risk

of material loss related to both matters to be remote.

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. On May 2, 2022, the court set trial for October 24, 2022, but on September 20, 2022, the court

cancelled the trial date due to COVID-19 protocols and converted the trial date to a status hearing to reschedule the jury trial.

We anticipate the trial being rescheduled for the first or second calendar quarter of 2023. 

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, and on March 28,

2022, the court dismissed the Company with prejudice.

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: two earlier trials based on substantially the same facts and

legal arguments resulted in findings of no conspiracy and/or damages; this 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

XML

Summary of Significant Accounting Policies (Policy)

3 Months Ended

Aug. 27, 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 and

in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial

reporting and should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended May 28, 2022 (the

“2022 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 ended on August 27, 2022

and August 28, 2021 included

13 weeks

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.

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 Operations. 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. As of August 27, 2022 and May

28, 2022, reserves for credit losses were $

716

 thousand and $

775

 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.

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 Operations. 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 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 Operations for the third quarter

ended February 26, 2022. Accordingly, we have reflected the correction of the immaterial error for the first quarter of fiscal

2022 as a reduction of Net Sales and Cost of Sales in the accompanying Condensed Consolidated Statements of Operations.

New Accounting Pronouncements and Policies

No new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our

Consolidated Financial Statements.

New Accounting Pronouncements and Policies

New Accounting Pronouncements and Policies

No new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our

Consolidated Financial Statements.

XML

Investment Securities (Tables)

3 Months Ended

Aug. 27, 2022

Investments Securities [Abstract]

Schedule Of Investment Securities

August 27, 2022

Amortized

Cost

Unrealized 

Gains

Unrealized

Losses

Estimated 

Fair Value

Municipal bonds

$

15,032

$

—

$

155

$

14,877

Commercial paper

15,936

—

53

15,883

Corporate bonds

81,711

—

1,237

80,474

Certificates of deposits

3,263

—

48

3,215

US government and agency obligations

8,190

—

87

8,103

Asset backed securities

15,620

—

227

15,393

Treasury bills

7,870

—

31

7,839

Total current investment securities

$

147,622

$

—

$

1,838

$

145,784

Mutual funds

$

3,467

$

—

$

130

$

3,337

Total noncurrent investment securities

$

3,467

$

—

$

130

$

3,337

May 28, 2022

Amortized 

Cost

Unrealized 

Gains

Unrealized

Losses

Estimated 

Fair Value

Municipal bonds

$

10,136

$

—

$

32

$

10,104

Commercial paper

14,940

—

72

14,868

Corporate bonds

74,167

—

483

73,684

Certificates of deposits

1,263

—

18

1,245

US government and agency obligations

2,205

4

—

2,209

Asset backed securities

13,456

—

137

13,319

Total current investment securities

$

116,167

$

4

$

742

$

115,429

Mutual funds

$

3,826

$

—

$

74

$

3,752

Total noncurrent investment securities

$

3,826

$

—

$

74

$

3,752

Schedule Of Contractual Maturities Of Investment Securities

Estimated Fair Value

Within one year

$

64,148

1-5 years

81,636

Total

$

145,784

XML

Fair Value Measurements (Tables)

3 Months Ended

Aug. 27, 2022

Fair Value Measurements [Abstract]

Schedule Of Assets Measured At Fair Value On A Recurring Basis

August 27, 2022

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

$

—

$

14,877

$

—

$

14,877

Commercial paper

—

15,883

—

15,883

Corporate bonds

—

80,474

—

80,474

Certificates of deposits

—

3,215

—

3,215

US government and agency obligations

—

8,103

—

8,103

Asset backed securities

—

15,393

—

15,393

Treasury bills

—

7,839

—

7,839

Mutual funds

3,337

—

—

3,337

Total assets measured at fair value

$

3,337

$

145,784

$

—

$

149,121

May 28, 2022

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

$

—

$

10,104

$

—

$

10,104

Commercial paper

—

14,868

—

14,868

Corporate bonds

—

73,684

—

73,684

Certificates of deposits

—

1,245

—

1,245

US government and agency obligations

—

2,209

—

2,209

Asset backed securities

—

13,319

—

13,319

Mutual funds

3,752

—

—

3,752

Total assets measured at fair value

$

3,752

$

115,429

$

—

$

119,181

XML

Inventories (Tables)

3 Months Ended

Aug. 27, 2022

Inventories [Abstract]

Schedule of Inventories

August 27, 2022

May 28, 2022

Flocks, net of amortization

$

152,264

$

144,051

Eggs and egg products

24,548

26,936

Feed and supplies

88,942

92,329

$

265,754

$

263,316

XML

Accrued Dividends Payable And Dividends per Common Share (Tables)

3 Months Ended

Aug. 27, 2022

Accrued Dividends Payable And Dividends Per Common Share [Abstract]

Schedule of Dividends

Thirteen Weeks Ended

August 27, 2022

August 28, 2021

Net income (loss) attributable to Cal-Maine Foods, Inc.

$

125,287

$

(18,026)

Cumulative loss to be recovered prior to payment of divided at beginning of period

—

(4,244)

Net income available for dividend

$

125,287

$

—

1/3 of net income attributable to Cal-Maine Foods, Inc. available for dividend

41,762

—

Common stock outstanding (shares)

44,136

44,057

Class A common stock outstanding (shares)

4,800

4,800

Total common stock outstanding (shares)

48,936

48,857

Dividends per common share*

$

0.853

$

—

*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)

3 Months Ended

Aug. 27, 2022

Equity [Abstract]

Summary of Equity Activity

Thirteen Weeks Ended August 27, 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 28,

2022

$

703

$

48

$

(28,447)

$

67,989

$

(1,596)

$

1,065,854

$

(206)

$

1,104,345

Other comprehensive

loss, net of tax

—

—

—

—

(754)

—

—

(754)

Stock compensation

plan transactions

—

—

(48)

1,028

—

—

—

980

Dividends

—

—

—

—

—

(41,742)

—

(41,742)

Net income (loss)

—

—

—

—

—

125,287

(153)

125,134

Balance at August

27, 2022

$

703

$

48

$

(28,495)

$

69,017

$

(2,350)

$

1,149,399

$

(359)

$

1,187,963

Thirteen Weeks Ended August 28, 2021

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum. Other

Retained

Amount

Amount

Amount

Capital

Comp. Loss

Earnings

Total

Balance at May 29, 2021

$

703

$

48

$

(27,433)

$

64,044

$

(558)

$

975,977

$

1,012,781

Other comprehensive loss, net of tax

—

—

—

—

(170)

—

(170)

Stock compensation plan transactions

—

—

(18)

1,000

—

—

982

Net loss

—

—

—

—

—

(18,026)

(18,026)

Balance at August 28, 2021

$

703

$

48

$

(27,451)

$

65,044

$

(728)

$

957,951

$

995,567

XML

Net Income (Loss) per Common Share (Tables)

3 Months Ended

Aug. 27, 2022

Net Income (Loss) per Common Share [Abstract]

Computation of Basic and Diluted Net Income Per Share

Thirteen Weeks Ended

August 27, 2022

August 28, 2021

Numerator

Net income (loss)

$

125,134

$

(18,026)

Less: Loss attributable to noncontrolling interest

(153)

—

Net income (loss) attributable to Cal-Maine Foods, Inc.

$

125,287

$

(18,026)

Denominator

Weighted-average common shares outstanding, basic

48,623

48,858

Effect of dilutive restricted shares

188

—

Weighted-average common shares outstanding, diluted

48,811

48,858

Net income (loss) per common share attributable to Cal-Maine Foods, Inc.

Basic

$

2.58

$

(0.37)

Diluted

$

2.57

$

(0.37)

XML

Revenue from Contracts with Customers (Tables)

3 Months Ended

Aug. 27, 2022

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

Thirteen Weeks Ended

August 27, 2022

August 28, 2021

Conventional shell egg sales

$

425,589

$

182,030

Specialty shell egg sales

200,820

132,458

Egg products

27,640

9,366

Other

4,295

1,132

$

658,344

$

324,986

XML

Stock Based Compensation (Tables)

3 Months Ended

Aug. 27, 2022

Stock Based Compensation [Abstract]

Summary of Equity Award Activity

Number of

Shares

Weighted

Average Grant

Date Fair Value

Outstanding, May 28, 2022

317,844

$

39.12

Vested

(3,240)

38.31

Forfeited

(2,778)

39.48

Outstanding, August 27, 2022

311,826

$

39.12

XML

Summary of Significant Accounting Policies (Narrative) (Details) - USD ($)	3 Months Ended
	Aug. 27, 2022	Nov. 27, 2021	Aug. 28, 2021	May 28, 2022	May 30, 2021
Significant Accounting Policies [Line Items]
Fiscal period duration	91 days		91 days
Reserves for credit losses	$ 716,000			$ 775,000
Cost of sales	440,854,000		$ 318,341,000
Operating Income Loss	163,850,000		(39,667,000)
Net income (loss)	125,134,000		(18,026,000)
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]
Cost of sales		$ 9,200,000	6,700,000
Operating Income Loss		0	0
Net income (loss)		$ 0	0
Retained Earnings [Member]
Significant Accounting Policies [Line Items]
Net income (loss)	$ 125,287,000		$ (18,026,000)

XML

Investment Securities (Narrative) (Details) - USD ($)	3 Months Ended
	Aug. 27, 2022	Aug. 28, 2021	May 28, 2022
Investments Securities [Abstract]
Proceeds from sale of available-for-sale securities, current	$ 20,300,000	$ 39,400,000
Proceeds from sale of available-for-sale securities, noncurrent	0	385,000
Gross realized gains on sales of available-for-sale securities, current	2,000	127,000
Gross realized gains on sales of available-for-sale securities, noncurrent		130,000
Gross realized losses on sales of available-for-sale securities, current	27,000	60,000
Gross realized losses on sales of available-for-sale securities, noncurrent		$ 0
Allowance for credit losses	$ 0		$ 0

XML

Investment Securities (Schedule of Investment Securities) (Details) - USD ($) $ in Thousands	Aug. 27, 2022	May 28, 2022
Debt Securities, Available-for-sale [Line Items]
Amortized Cost, Current	$ 147,622	$ 116,167
Unrealized Gains, Current	0	4
Unrealized Losses, Current	1,838	742
Estimated Fair Value, Current	145,784	115,429
Amortized Cost, Noncurrent	3,467	3,826
Unrealized Gains, Noncurrent	0	0
Unrealized Losses, Noncurrent	130	74
Estimated Fair Value, Noncurrent	3,337	3,752
Municipal Bonds [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost, Current	15,032	10,136
Unrealized Gains, Current	0	0
Unrealized Losses, Current	155	32
Estimated Fair Value, Current	14,877	10,104
Commercial Paper [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost, Current	15,936	14,940
Unrealized Gains, Current	0	0
Unrealized Losses, Current	53	72
Estimated Fair Value, Current	15,883	14,868
Corporate Bonds [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost, Current	81,711	74,167
Unrealized Gains, Current	0	0
Unrealized Losses, Current	1,237	483
Estimated Fair Value, Current	80,474	73,684
Certificates of Deposits [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost, Current	3,263	1,263
Unrealized Gains, Current	0	0
Unrealized Losses, Current	48	18
Estimated Fair Value, Current	3,215	1,245
US Government and Agency Obligations [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost, Current	8,190	2,205
Unrealized Gains, Current	0	4
Unrealized Losses, Current	87	0
Estimated Fair Value, Current	8,103	2,209
Asset Backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost, Current	15,620	13,456
Unrealized Gains, Current	0	0
Unrealized Losses, Current	227	137
Estimated Fair Value, Current	15,393	13,319
Treasury Bills [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost, Current	7,870
Unrealized Gains, Current	0
Unrealized Losses, Current	31
Estimated Fair Value, Current	7,839
Mutual Funds [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost, Noncurrent	3,467	3,826
Unrealized Gains, Noncurrent	0	0
Unrealized Losses, Noncurrent	130	74
Estimated Fair Value, Noncurrent	$ 3,337	$ 3,752

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Investment Securities (Schedule of Contractual Maturities of Investment Securities) (Details) - USD ($) $ in Thousands	Aug. 27, 2022	May 28, 2022
Investments Securities [Abstract]
Within one year	$ 64,148
1-5 years	81,636
Total	$ 145,784	$ 115,429

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Fair Value Measurements (Schedule of Assets Measured at Fair Value on A Recurring Basis) (Details) - USD ($) $ in Thousands	Aug. 27, 2022	May 28, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 149,121	$ 119,181
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	3,337	3,752
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	145,784	115,429
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	14,877	10,104
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	14,877	10,104
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	15,883	14,868
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	15,883	14,868
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	80,474	73,684
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	80,474	73,684
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	3,215	1,245
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	3,215	1,245
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
US Government and Agency Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	8,103	2,209
US Government and Agency Obligations [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
US Government and Agency Obligations [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	8,103	2,209
US Government and Agency Obligations [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	15,393	13,319
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	15,393	13,319
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
Treasury Bills [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	7,839
Treasury Bills [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0
Treasury Bills [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	7,839
Treasury Bills [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0
Mutual Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	3,337	3,752
Mutual Funds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	3,337	3,752
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	Aug. 27, 2022 Layers pullet_and_breeder	May 28, 2022 Layers pullet_and_breeder
Inventories [Abstract]
Pullets and breeders | pullet_and_breeder	11.4	11.5
Layers | Layers	41.1	42.2

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Inventories (Schedule Of Inventories) (Details) - USD ($) $ in Thousands	Aug. 27, 2022	May 28, 2022
Inventories [Abstract]
Flocks, net of amortization	$ 152,264	$ 144,051
Eggs and egg products	24,548	26,936
Feed and supplies	88,942	92,329
Total inventories	$ 265,754	$ 263,316

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Accrued Dividends Payable And Dividends per Common Share (Narrative) (Details)	3 Months Ended
	Aug. 27, 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	$ 0.853

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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
	Aug. 27, 2022	Aug. 28, 2021
Class of Stock [Line Items]
Net income (loss) attributable to Cal-Maine Foods, Inc.	$ 125,287	$ (18,026)
Cumulative losses to be recovered prior to payment of divided at beginning of period	0	(4,244)
Net income available for dividend	125,287	0
1/3 of net income attributable to Cal-Maine Foods, Inc. available for dividend	$ 41,762	$ 0
Common stock outstanding (shares)	48,936	48,857
Dividends per common share (in dollars per share)	$ 0.853	$ 0
Percentage of net income loss used to compute accrued dividends	33.33%
Common Stock [Member]
Class of Stock [Line Items]
Common stock outstanding (shares)	44,136	44,057
Class A Common Stock [Member]
Class of Stock [Line Items]
Common stock outstanding (shares)	4,800	4,800

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Equity (Summary of Equity Activity) (Details) - USD ($) $ in Thousands	3 Months Ended
	Aug. 27, 2022	Aug. 28, 2021
Beginning balance	$ 1,104,345	$ 1,012,781
Other comprehensive loss, net of tax	(754)	(170)
Stock compensation plan transactions	980	982
Dividends	(41,742)
Net income (loss)	125,134	(18,026)
Ending balance	1,187,963	995,567
Common Stock [Member]
Beginning balance	703	703
Ending balance	703	703
Treasury Stock [Member]
Beginning balance	(28,447)	(27,433)
Stock compensation plan transactions	(48)	(18)
Ending balance	(28,495)	(27,451)
Paid In Capital [Member]
Beginning balance	67,989	64,044
Stock compensation plan transactions	1,028	1,000
Ending balance	69,017	65,044
Accum. Other Comp. Loss [Member]
Beginning balance	(1,596)	(558)
Other comprehensive loss, net of tax	(754)	(170)
Ending balance	(2,350)	(728)
Retained Earnings [Member]
Beginning balance	1,065,854	975,977
Dividends	(41,742)
Net income (loss)	125,287	(18,026)
Ending balance	1,149,399	957,951
Noncontrolling Interest [Member]
Beginning balance	(206)
Net income (loss)	(153)
Ending balance	(359)
Class A Common Stock [Member] | Common Stock [Member]
Beginning balance	48	48
Ending balance	$ 48	$ 48

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Net Income (Loss) per Common Share (Narrative) (Details) shares in Thousands	3 Months Ended
	Aug. 28, 2021 shares
Net Income (Loss) per Common Share [Abstract]
Antidilutive restricted shares	131

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Net Income (Loss) 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
	Aug. 27, 2022	Aug. 28, 2021
Net Income (Loss) per Common Share [Abstract]
Net income (loss)	$ 125,134	$ (18,026)
Less: Loss attributable to noncontrolling interest	(153)	0
Net income (loss) attributable to Cal-Maine Foods, Inc.	$ 125,287	$ (18,026)
Denominator
Weighted-average common shares outstanding, basic (in shares)	48,623	48,858
Effect of dilutive restricted shares (in shares)	188	0
Weighted-average common shares outstanding, diluted (in shares)	48,811	48,858
Net income (loss) per common share attributable to Cal-Maine Foods, Inc.
Basic (in dollars per share)	$ 2.58	$ (0.37)
Diluted (in dollars per share)	$ 2.57	$ (0.37)

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Revenue from Contract with Customer (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands	3 Months Ended
	Aug. 27, 2022	Aug. 28, 2021
Disaggregation of Revenue [Line Items]
Net sales	$ 658,344	$ 324,986
Conventional shell egg sales [Member]
Disaggregation of Revenue [Line Items]
Net sales	425,589	182,030
Specialty shell egg sales [Member]
Disaggregation of Revenue [Line Items]
Net sales	200,820	132,458
Egg products [Member]
Disaggregation of Revenue [Line Items]
Net sales	27,640	9,366
Other [Member]
Disaggregation of Revenue [Line Items]
Net sales	$ 4,295	$ 1,132

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Stock Based Compensation (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Aug. 27, 2022	Aug. 28, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 5.9
Weighted average period of unrecognized compensation expense	1 year 10 months 24 days
Stock based compensation expense	$ 1.0	$ 1.0

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Stock Based Compensation (Summary of Equity Award Activity) (Details)	3 Months Ended
	Aug. 27, 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	317,844
Number of Shares, Vested (in shares) | shares	(3,240)
Number of Shares, Forfeited (in shares) | shares	(2,778)
Number of Shares, Outstanding, Ending Balance (in shares) | shares	311,826
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	$ 39.12
Weighted Average Grant Date Fair Value, Vested (in dollars per share) | $ / shares	38.31
Weighted Average Grant Date Fair Value, Forfeited (in dollars per share) | $ / shares	39.48
Weighted Average Grant Date Fair Value, Outstanding, Ending Balance (in dollars per share) | $ / shares	$ 39.12

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Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Aug. 27, 2022	Aug. 28, 2021
Tax Credit Carryforward [Line Items]
Income tax expense (benefit)	$ 40,346	$ (15,838)
Effective tax rate, percent	24.40%	46.80%
Adjusted effective income tax rate, percent		22.40%
Red River Valley Egg Farm, LLC [Member]
Tax Credit Carryforward [Line Items]
Discrete income tax benefit		$ 8,300

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Commitments and Contingencies (Narrative) (Details) - USD ($)	Apr. 23, 2020	Aug. 27, 2022	Feb. 26, 2022
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