Cal-Maine Foods has announced a threefold increase in net earnings for the first quarter (Q1) of Fiscal Year (FY) 2013 compared to the corresponding quarter of FY 2012.
For the quarter ending September 1st 2012, Cal-Maine Foods achieved sales of $272.9 million ($243.8 million, Q1 of 2012) a 10.7% increase. Net income rose threefold from $3.117 million in Q1 of FY2012 to $9.415 million for the most recent quarter.
The beneficial effect of an increasing proportion of sales of specialty eggs and a general increase in unit sales value were collectively responsible for the exceptional performance by the company. Gross margin increased from 13.8% in Q1 of 2012 to 16.3% for the most recent quarter. Specialty egg sales attained 16.1% of volume and 23.55% of sales value.
These figures compare to 15.7% and 23.6% respectively for Q1 of the previous year. Average selling price of shell eggs for the most recent quarter was $1.238 per dozen compared to $1.117 per dozen in 2012 or an uplift of 10.3%. It is calculated that unit revenue for branded specialty eggs (predominantly Eggland’s Best and supported by 4-Grain and Farmhouse) averaged $1.90 per dozen, a premium of 61% over generics estimated from figures presented to have been sold at $1.18 per dozen. Cal-Maine Foods purchased 24.8% of shell eggs sold in Q1 of 2013 compared to 23.4% in Q1 of 2012.
The increase in margin is noteworthy when compared to the stated 5% increase in feed cost from 48.4 cents per dozen during Q1 of 2012 to 51.0 cents per dozen for the most recent quarter. This differential imposed an incremental cost of $550,000 for Q1 of 2013.
In reviewing the summary balance sheet for September 1st it is noted that total assets of $712.95 million decreased by 1.8% from the end of FY 2012. The current ratio improved from 3.1 to 3.4, attributable mainly to a reduction in accounts payable and accrued expenses. Long- term debt was reduced by 4.4% from $64.76 million to $62.04 million.
During the past quarter the acquisition of the 1.4 million hen holdings of Pilgrim’s Pride was completed and according to the Company Report progress has been made in integrating these facilities into existing operations in the Texas Division.
In commenting on results, Dolf Baker chairman, president and CEO of Cal-Maine Foods stated “We are pleased with our financial and operating performance for the first quarter of fiscal 2013. These results reflect a strong start to our fiscal year in what is typically our most challenging quarter”. He added an optimistic note with “We will continue to identify new market opportunities to expand our specialty egg business and meet growing customer demand”.
“The damage to the national corn and grain crops caused by the extreme summer drought conditions will likely keep our feed costs near record high levels in fiscal 2013,” he concluded cautiously.