20
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 31, 2025
(the “2025 Annual Report”), and the
accompanying financial statements and
notes included in Part II
Item 8 of the 2025 Annual
Report and in
of this Quarterly Report on
Form 10-Q (“Quarterly
Report”).
This Quarterly 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
business,
including potential
future supply
of
and
demand
for
our
products,
potential
future corn
and
soybean
price
trends,
potential future impact on our business of
the resurgence in United States
(“U.S.”) commercial table egg layer flocks of highly
pathogenic avian influenza (“HPAI”), estimated future production data, expected construction
schedules, projected construction
costs, potential future impact on our business of inflation and changing interest rates, potential future impact on our business of
new legislation, rules or
policies, potential outcomes of legal
proceedings, including loss contingency accruals and factors
that
may result
in changes
in the
amounts recorded, other
projected operating data,
including anticipated results
of operations
and
financial condition, and potential future cash returns to stockholders including the timing and amount of any
repurchases under
our
share
repurchase
program.
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
Risk
Factors of
our
2025
Annual Report,
as
updated in
Part
II
Item
1A
of
this Quarterly
Report,
as
well
as
those
included
in
other
reports
we
file
from
time
to
time
with
the
United
States
Securities
and
Exchange
Commission
(“SEC”)
(including our
Quarterly Reports on
Form 10-Q
and Current
Reports on
Form 8-K),
(ii) the
risks and
hazards inherent in
the
shell egg, egg products and prepared
foods operations (including, as applicable, disease,
pests, weather conditions, and potential
for product
recall), including
but not
limited to
the current outbreak
of HPAI
affecting poultry
in the
U.S., Canada
and other
countries
that
was
first
detected in
commercial
flocks
in
the
U.S.
in
November
2023
and
that
first
impacted
our
flocks
in
December 2023, (iii) changes in the demand for and market prices of
shell eggs and feed costs as well as increase in input costs
for prepared
foods,
(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 recent or
future acquisition of
new flocks or businesses,
such as our
acquisition of Echo
Lake Foods completed June 2, 2025, and risks or changes that may cause conditions to
completing a pending acquisition not to
be met, (vi) our
ability to successfully integrate and manage recently acquired businesses like Echo Lake Foods and
realize the
expected benefits
of
such
acquisitions, including
synergies, cost
savings,
reduction in
earnings volatility,
margin
expansion,
financial returns, expanded
customer relationships, or sales or growth opportunities, (vii) our
ability to compete effectively with
existing
competitors
and
new market
entrants,
retain
existing
customers,
acquire new
customers
and
grow
our
product mix
including
our prepared
foods
product offerings,
(viii)
the
impacts
and potential
future impacts
of government,
customer and
consumer reactions
to
recent high
market prices
for eggs,
(ix) potential
impacts
to
our business
as a
result
of our
Company
ceasing
to
be
a
“controlled company”
under
the
rules of
The
Nasdaq Stock
Market
on
April
14,
2025,
(x)
risks
relating to
potential changes in inflation, interest rates
and trade and tariff policies, (xi) adverse results in pending litigation and other legal
matters,
and
(xii)
global
instability,
including
as a
result
of the
war
in
Ukraine,
the
conflicts involving
Israel
and
Iran,
and
attacks on
shipping
in
the
Red
Sea. The
actual
timing,
number and
value of
shares
repurchased under
our share
repurchase
program will be determined by
management in its discretion and
will depend on a number of factors, including
but not limited
to, the market price of our Common Stock and general market and economic conditions. The share repurchase program may be
suspended, modified
or discontinued
at
any time
without
prior notice.
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 made only 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.
COMPANY OVERVIEW
Cal-Maine Foods,
Inc. (“Cal-Maine Foods,”
the “Company,”
“we,” “us,” “our”) is
the largest
egg company
in the
U.S. and
a
leading
player
in
the
egg-based
food
industry.
With
a
strong
national
footprint,
Cal-Maine
Foods
provides
nutritious,
affordable, and sustainable protein to millions
of households every day.