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
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
our quarterly report
on Form 10-Q
for the quarter
ended November 29,
2025, 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
February 2022
and that
impacted our
flocks in
the
third
and fourth
quarters of
fiscal 2024 and again in
March 2026, (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
of
government,
customer
and
consumer
reactions
to
high
market
prices
for
eggs,
including,
without
limitation,
potential
new
or
expanded
government regulations, (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 geopolitical conflicts and
other uncertainties. 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.