Cal-Maine Foods, Inc. — FY2024 Form 10-K
Reporting period: Fiscal year ended June 1, 2024 (52 weeks), compared with fiscal 2023 ended June 3, 2023 (53 weeks). The filing is an annual report, not a standalone 2023 fourth-quarter filing.
Business context
Cal-Maine is the largest U.S. producer and distributor of shell eggs. It operates an integrated egg-production business and reports one operating segment. In FY2024, it sold approximately 1.148 billion dozen shell eggs; specialty eggs represented 34.9% of dozens sold, and cage-free eggs generated approximately 29.5% of net shell egg sales. Egg products contributed 3.8% of revenue.
Financial performance and liquidity
| Metric | FY2024 | FY2023 |
|---|---|---|
| Net sales | $2.326 billion | $3.146 billion |
| Gross profit / margin | $541.6 million / 23.3% | $1.196 billion / 38.0% |
| Operating income / margin | $312.5 million / 13.4% | $967.7 million / 30.7% |
| Net income attributable to Cal-Maine | $277.9 million | $758.0 million |
| Diluted earnings per share | $5.69 | $15.52 |
| Cash provided by operating activities | $451.4 million | $863.0 million |
| Capital expenditures | $147.1 million | $136.6 million |
Sales declined 26.1%, primarily reflecting lower egg prices after supply recovered from earlier HPAI-related disruption. Dozens sold were essentially flat. The average shell egg selling price fell to $1.932 per dozen from $2.622; feed cost per dozen produced declined to $0.550 from $0.676. The lower selling prices more than offset reduced feed costs, compressing margins and earnings.
At year-end, cash and cash equivalents were $237.9 million and available-for-sale investments were $574.5 million. Working capital was approximately $1.0 billion and the current ratio was 5.5. The company had no borrowings under its $250 million revolving credit facility and reported $4.7 million of standby letters of credit. Total liabilities were $387.7 million and stockholders’ equity was $1.797 billion.
Dividends paid in FY2024 totaled $91.9 million, down from $252.3 million in FY2023. Under the variable dividend policy, quarterly dividends generally equal one-third of quarterly GAAP net income, subject to credit-facility restrictions.
Material changes, outlook, and risks
- HPAI: Outbreaks at company facilities in Kansas and Texas led to depopulation of approximately 3.1 million laying hens and 577,000 pullets during FY2024. The sites were cleared to resume operations and repopulation had begun. HPAI-related indemnity and insurance recoveries contributed to a $23.5 million gain on involuntary conversions, versus $3.3 million in FY2023.
- Acquisitions and investment: The company acquired Fassio Egg Farms in September 2023 for estimated consideration of $54.7 million, including contingent consideration. After year-end, it acquired ISE America assets for approximately $110 million, funded with cash. The filing also describes approved construction projects with $55.7 million of remaining projected costs at year-end, principally for cage-free capacity.
- Legal contingency: In an antitrust case involving processed egg products, a jury awarded plaintiffs $17.8 million in damages. Potential treble damages, before credits and attorneys’ fees, were described as $53.3 million. Cal-Maine accrued $19.6 million for its estimated proportional share; post-trial proceedings and appeals remain pending, and the accrual could change. The auditor identified litigation and claims as a critical audit matter.
- Other litigation: In Oklahoma watershed litigation, the court ruled for the State but had not set remedies; management said a material loss was reasonably possible but could not estimate the amount. Management considered the Texas price-related case risk of material loss remote.
- Outlook and principal risks: No quantified earnings or sales guidance is provided. Management noted that near-term corn indicators suggested potentially lower prices, but volatility could persist due to weather and global supply-chain uncertainty. Results remain sensitive to volatile egg prices, feed costs, HPAI, cage-free demand and regulation, customer concentration, labor costs, and legal outcomes. Walmart and Sam’s Club accounted for 34.0% of FY2024 net sales.
Important facts for investors to verify
- Whether egg prices and margins stabilize or decline further, and how HPAI affects flock recovery, supply, and indemnity recoveries.
- The status and potential financial exposure of the processed-egg antitrust case, including the $19.6 million accrual, appeals, and any allocation or settlement developments.
- Integration, costs, and expected contribution of the ISE America acquisition, as well as delivery of planned cage-free projects within stated budgets and timelines.
- Liquidity after acquisitions, capital spending, and dividends; confirm credit-facility availability, covenant compliance, and the effect of the variable dividend policy.
- Whether customer concentration—especially Walmart and Sam’s Club—and changing customer commitments to cage-free eggs affect sales volumes, pricing, or capacity utilization.