Despite an increase of sales, the company reported net income of $14.3 million for the second quarter compared with a net income of $23.3 million for the second quarter of fiscal 2012. The company also reported a net income of $23.7 million for the first half of fiscal 2013 compared with net income of $26.4 million for the year-earlier period.
"We are pleased with the continued growth in sales for the second quarter of fiscal 2013; however, our operating results also reflect challenging market conditions and increased input costs," said Dolph Baker, chairman, president and CEO of Cal-Maine Foods. "The higher sales reflect a 9.1 percent growth in dozens sold and a 4 percent increase in average selling prices compared with the second quarter of fiscal 2012. Our specialty egg sales accounted for 16.4 percent of dozens sold and 22.9 percent of total shell egg sales revenue for the quarter. Specialty eggs are an important area of focus for Cal-Maine Food's growth strategy as they continue to gain popularity with consumers looking for healthy choices, and have higher and less cyclical retail selling prices. Specialty egg prices were up 4.8 percent in the second quarter of fiscal 2013 compared with the same period last year."
Baker said profits for the second quarter of fiscal 2013 were hurt by higher costs for corn and soybean meal and additional expenses related to recent acquisitions.
"In addition, according to the most recent [U.S. Department of Agriculture] report, the number of laying hens on December 1, 2012, was 2.5 percent higher compared with a year ago, affecting the current market supply of eggs. However, the hatch for egg-type chicks has declined over the past two consecutive years and was down 2.9 percent for the first 11 months of calendar 2012 compared with the same period in calendar 2011. While we note these market dynamics for Cal-Maine Foods and our industry, we remain focused on executing our strategy to be an efficient low-cost producer," said Baker.
Cal-Maine expanded operations in fiscal 2013, acquiring the commercial egg production and related assets of Texas-based Maxim Production Co. Inc., including a feed mill and two production complexes with capacity for approximately 3.5 million laying hens with related pullet capacity. The company also added related contract capacity for approximately 500,000 laying hens.
"This transaction, along with our previous acquisition of the Pilgrim's Corp. egg production assets, further advances our strategy to grow our business through selective acquisitions," said Baker. "Our management team is focused on making the right investments to ensure a successful integration of these additional facilities. We are pleased with our progress to date and look forward to the new opportunities ahead for Cal-Maine Foods."