Cal-Maine Foods reported an increase in net sales for the fourth quarter of 2013, but a settlement of a direct purchaser class claim against the company hurt profits, as Cal-Maine Foods experienced a net loss for the quarter ending June 1.
For the fourth quarter of fiscal 2013, net sales were $325.9 million compared with net sales of $275.2 million for the fourth quarter a year ago, the company announced on July 29. The company reported a net loss of $3.8 million for the fourth quarter of fiscal 2013 compared with net earnings of $37.3 million, for the same period in 2012.
Results for the fourth quarter of 2013 include a one-time charge of $17.0 million after tax, related to the settlement of a direct-purchaser class claim against Cal-Maine Foods. Results for the fourth quarter of fiscal 2012 included a one-time gain of approximately $27 million after tax, as a result of a distribution from Eggland's Best Inc. related to the joint venture between Eggland's Best and Land O'Lakes, announced on May 1, 2012. Excluding these one-time items, net earnings were $13.2 million for the fourth quarter of fiscal 2013 compared with $10.3 million, or $0.44 per basic share, for the fourth quarter of fiscal 2012. The fourth quarter of fiscal 2013 had 13 weeks compared with 14 weeks in the prior year period.
For the fiscal year 2013, net sales were $1.3 billion compared with net sales of $1.1 billion for fiscal 2012. Cal-Maine Foods reported a net income of $50.4 million for fiscal 2013 compared with net income of $89.7 million in fiscal year 2012. Excluding the one-time items described above for the fourth quarter of each fiscal year, the net income for fiscal year 2013 was $67.5 million, with $62.7 million in fiscal year 2012. Fiscal year 2013 had 52 weeks compared with 53 weeks in fiscal year 2012.
As announced on July 23, Cal-Maine Foods reached a settlement in an egg antitrust class action claim, whereby the company has agreed to make a single payment of $28 million, which amounts to a charge of $17.0 million after tax.
Dolph Baker, chairman, president and CEO of Cal-Maine Foods, stated: "We believe we have negotiated a settlement for an amount that is in the best interest of our company and our shareholders. While the one-time charge related to the settlement affected our fourth quarter and fiscal 2013 financial results, we had a solid operating performance, and we do not expect any material future impact on our operations. With this distraction behind us, we will focus on our business strategy and the opportunities ahead in fiscal 2014."
Commenting on the results for the fourth quarter and fiscal 2013, Baker said: "We were pleased with our results with our fourth quarter sales up 18 percent over the same period a year ago. These results reflect higher volumes related to acquisitions with a 6 percent increase in eggs produced and sold compared with the same period a year ago. Notably, we achieved this growth even though we had an extra week of sales in the previous year's fourth quarter.
"For the year, we were pleased to exceed our previous year's sales record with $1.3 billion in sales. We experienced strong demand for shell eggs throughout the year from our retail, egg product and export customers. Sales of specialty eggs accounted for 16.4 percent of our total number of eggs sold and 23.7 percent of our shell egg sales revenue for the year. Specialty eggs have been an important area of strategic focus for Cal-Maine and, as a result, we achieved a 7.8 percent increase in specialty egg volume for the year and a 6.1 percent increase in specialty egg selling prices. Overall, our average selling prices were up 7.9 percent in fiscal 2013. We expect specialty eggs, which have a higher retail selling price, will continue to gain market share over regular eggs as more consumers are willing to pay for these premium products," Baker said.
Operations have continued to run well in fiscal 2013, Baker said, in spite of experiencing higher and more volatile feed costs primarily related to a tight national corn supply. For the year, feed costs per dozen were up 15 percent compared with fiscal 2012, and the higher input costs adversely affected gross profit margins for Cal-Maine Foods. Looking ahead, Baker is cautiously optimistic about the yield of this year's corn and soybean crops which could provide some relief to feed costs in fiscal 2014.
"Overall, we are very pleased with Cal-Maine's performance in fiscal 2013 and our ability to execute our strategy in the marketplace. We have worked hard this year to integrate the operations of both the Pilgrim's Pride and Maxim egg operations and we are pleased with the operating synergies we have achieved from these acquisitions. In addition, we have the opportunity to leverage the additional capacity from these facilities and expand our market reach," said Baker.
