Cal-Maine Foods reports drop in net income, increase in net sales
Egg producer anticipates improved financial picture as production costs are expected to drop
Cal-Maine Foods reported net sales for the first quarter of fiscal year 2014 increased 17 percent, while the net income dropped nearly 7 percent when compared to the first quarter of fiscal year 2013. The largest egg producer in the United States released its financial results for the quarter ending August 31 on September 30.
For the first quarter of fiscal 2014, net sales were $319.5 million, an increase of 17 percent compared with net sales of $272.9 million for the first quarter of fiscal 2013. The company reported net income of $8.8 million, or $0.36 per basic and diluted share, for the first quarter of fiscal 2014 compared with net income of $9.4 million, or $0.39 per basic and diluted share, for the year-earlier period.
"We are pleased with our sales performance for the first quarter of fiscal 2014, marking a strong start to fiscal 2014. These results reflect higher volumes and higher average selling prices compared with the first quarter last year. Specialty eggs have continued to gain in popularity with consumers and accounted for 16.2 percent of dozens sold and 24.6 percent of total shell egg sales for the first quarter. The average selling price of specialty eggs also increased 5.5 percent over the first quarter last year. Cal-Maine Foods is well positioned to capitalize on the growing demand for specialty eggs, and we will continue to focus on enhancing our product mix with a full complement of conventional, cage-free, organic and nutritionally enhanced eggs," said Dolph Baker, chairman, president and CEO of Cal-Maine Foods.
Cal-Maine operations have been running well, Baker added, but overall production costs were higher during the first quarter of the fiscal year than they were for the first quarter of fiscal year 2013. Market prices for grain have remained high, and Cal-Maine's feed costs were up 3.4 cents per dozen when compared with the same period during the previous fiscal year.
"However, we are encouraged by the favorable growing conditions this summer, which have improved the yield of this year's corn and soybean crops. As a result, prices have already come down from the previous high levels and we expect to incur lower feed costs for the remainder of fiscal 2014. Regardless of market conditions, we remain focused on managing our operations efficiently and meeting the needs of our customers. We believe we have the right growth strategy in place and look forward to the opportunities ahead for Cal-Maine Foods in fiscal 2014," said Baker.
The first quarter of 2014 showed a rebound after the company experienced a loss of $3.8 million in the fourth quarter of fiscal 2013, largely due to a previously disclosed settlement of a direct purchaser class claim against the company, resulting in a one-time charge of $17 million.