Cal-Maine Foods’ net income, sales up in second quarter
Net income jumps to $36.6 million for second quarter of FY 2015
Cal-Maine Foods reported a jump in net income and sales for the second quarter of fiscal year 2015. The quarter ended November 29, 2014.
The company reported net income of $36.6 million, or $0.76 per basic share and $0.76 per diluted share, for the second quarter of fiscal 2015 compared with $26.1 million, or $0.54 per basic and $0.54 diluted share, for the second quarter of fiscal 2014. Net sales for the second quarter of fiscal 2015 were $378.6 million, a 6.9 percent increase compared with net sales of $354.3 million for the second quarter of fiscal 2014.
Cal-Maine Foods reported net income of $64.3 million, or $1.34 per basic share and $1.33 per diluted share, for the first half of fiscal 2015 compared with net income of $34.9 million, or $0.73 per basic share and $0.72 per diluted share, for the year-earlier period. For the first six months of fiscal 2015, net sales were $735.6 million compared with net sales of $673.8 million for the prior-year period.
The net income per share numbers for the second quarter and six month periods for fiscal 2015 and fiscal 2014 reflect the two-for-one stock split for shares of the company’s common stock and Class A common stock, effective October 31.
Dolph Baker, chairman, president and chief executive officer of Cal-Maine Foods, stated: “We are pleased with the continued growth in sales and improved operating performance for the second quarter of fiscal 2015. These results reflect both a 4.2 percent increase in total dozens of shell eggs sold and 2.9 percent higher average selling prices compared with the second quarter of fiscal 2014.
“Our specialty egg sales continued to trend higher and accounted for 19.0 percent of dozens sold and 26.8 percent of total shell egg sales revenue for the second quarter. Specialty eggs continue to be an important area of focus for Cal-Maine Food’s growth strategy. We have recently expanded our market reach through our latest joint venture, Southwest Specialty Eggs LLC, with licensing agreements for the sale of Eggland’s Best and Land O’ Lakes branded specialty eggs, as well as 4Grain, Farmhouse Eggs and other premium brands in Arizona, southern California and Nevada. We will continue to identify ways to enhance our product mix and provide a variety of healthy choices for our customers.”
Baker added, “We experienced strong demand and favorable market conditions during the second quarter of fiscal 2015. Our feed costs were 11.0 percent lower than the same period a year ago, and 10.6 percent lower through the first half of this fiscal year. While corn and soybean meal basis prices are still at relatively high levels, we expect to benefit from more stable feed costs in fiscal 2015 compared to our last fiscal year.
“Overall, our operations have continued to perform very well this quarter and through the first half of this fiscal year. Operating income for the second quarter of fiscal 2015 was $55.6 million compared with $40.9 million for the second quarter of fiscal 2014. These results reflect our lower costs and our focused efforts to be an efficient, low-cost producer across all of the company’s operations. We are pleased with our progress at our latest expansion projects in Florida, Kansas, Kentucky and Texas, and we believe the additional capacity and improved efficiencies will result in less dependence on outside egg purchases. We are also expanding our capacity for specialty eggs at both the Kansas and Kentucky facilities, which will enhance our ability to meet the needs of our customers.”
Cal-Maine Foods keeping eye on industry changes in California
While Baker said the company is pleased with its performance during the first half of the fiscal year and is looking forward to opportunities in the second half, he did express some caution as the industry undergoes changes because of new laws in California.
“Along with the rest of the egg industry, we will be closely monitoring the pending implementation of Proposition 2 and Assembly Bill 1437 related to egg production standards and sales in California,” said Baker. “This legislation, scheduled to be effective January 1, 2015, could have a significant impact on egg production throughout the country. While it is too early to determine the outcome for our operations, we will continue to manage the aspects of our business we can control. As such, we remain focused on the key elements of our growth strategy: identify value-added acquisition opportunities, provide the right product mix for our customers with expanded sales of specialty eggs, and maximize our operating efficiencies. We believe these efforts will continue to produce favorable results for our customers and shareholders in fiscal 2015.”