What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-03-29 compared with 2021-12-28 · 728 added, 619 removed, 216 unchanged (86% of the section changed)

The following

with Management’s

conjunction with

Discussion and

Financial Condition

of Operations included

in Part II Item

7 of the Company’s

Annual Report on

Form 10-K for its

fiscal year ended May

(the “2021 Annual Report”), and the accompanying financial statements and

notes included in Part II Item 8 of the 2021 Annual

of Operations included in Part II

Item 7 of the Company’s

Annual Report on Form 10-K for

its fiscal year ended May 29,

(the “2021 Annual Report”), and the accompanying financial statements and notes included in Part II Item 8 of the 2021 Annual

Report and in

Part I Item 1

of this Quarterly Report on Form 10-Q (“Quarterly Report”).

forward-looking

report contains

numerous forward-looking

statements within

the Securities

Securities Exchange

“Exchange Act”)

soybean price

(the “Securities

Securities Exchange Act

(the “Exchange

Act”) relating

future supply

products, potential

price trends,

potential future

forward-looking

1 unchanged sentence

“anticipates,”

forward-looking

materially from

the forward-looking

The forward-looking

statements are

expectations,

1 unchanged sentence

actual results

forward-looking

materially from

the forward-looking

statements include,

among others,

Annual Report

hazards inherent

business (including

disease, pests,

potential for

product recall),

(iii) changes

acquisition not

risks relating

evolving COVID-19

pandemic, including

without limitation

increased costs

inflationary rates, and

(vii) adverse results

conditions, and

affecting poultry

countries (iii)

market prices

feed costs, (iv)

our ability to

predict and meet

demand for cage-free

and other specialty

eggs, (v) risks,

changes, or obligations

limitation increased costs

inflation and interest

(vii) adverse

results in pending

litigation matters.

are cautioned

reliance on forward-looking statements because,

while we believe the assumptions on

which the forward-looking statements are

forward-looking

forward-looking statements

looking statements, whether because of new information, future events,

or otherwise.

largest producer

and distributor

United States

Our total flock

of approximately

customers, including

regional grocery

store chains,

companies servicing

independent supermarkets

because, while

the assumptions

the forward-looking

statements are

reasonable, there

forward-looking statements will

prove to be accurate.

forward-looking statements included herein are only made as of

the respective dates thereof, or if

publicly these forward-looking statements, whether because of new information, future events, or otherwise.

largest producer and

distributor of fresh

shell eggs in

the United States

flock of approximately

customers, including national

and regional grocery

store chains, club

stores, companies servicing

independent supermarkets in

the U.S., food

2 unchanged sentences

in states across

the southwestern, southeastern,

mid-western and

the southwestern, southeastern, mid-western

mid-Atlantic regions of the U.S.

Arkansas, California,

Nevada, North

Carolina Oklahoma

City in addition to exclusivity in select New York

metropolitan areas, including areas within New Jersey and Pennsylvania.

pricing mechanisms

agreements with

our customers,

the Eggland’s

(“EB”) cooperative

distribute EB

Arkansas, California, Nevada,

North Carolina,

Oklahoma and South

exclusive license in

City in addition to exclusivity in select New York metropolitan areas, including areas within New Jersey and Pennsylvania.

Our operating

materially impacted

variety of pricing

mechanisms in pricing

agreements with our

customers, we sell

our conventional

2 unchanged sentences

quoted regional

wholesale market

formulas related

production which

soybean meal.

volatility in the market prices of shell eggs, the Urner-Barry White

Large, Southeast Regional Egg Market Price per dozen eggs

(“UB southeast large index”) for the first three quarters of fiscal year 2022 ranged from a low of $1.00 in June 2021 to a high of

$2.06 in February 2022.

ingredients, mainly

soybean meal,

market prices.

volatility in the market prices

of shell eggs, the Urner-Barry

White Large, Southeast

Regional Egg Market Price per

(“UB southeast large

index”) for the first

half of fiscal year

ranged from a low

of $1.00 in June

2021 to a high of

November 2021.

current market

transportation and storage costs, speculators, and agricultural, energy

and trade policies in the U.S.

transportation and storage costs, speculators, and agricultural, energy and trade policies in the U.S.

and internationally.

An important competitive advantage

for Cal-Maine Foods is

our ability to meet

our customers’ evolving needs

with a favorable

An important competitive advantage for Cal-Maine Foods is our ability to meet

our customers’ evolving needs with a favorable

pasture-raised

represent attractive offerings

to a subset of

and therefore our customers,

and help us continue

to serve as the trusted

represent attractive offerings to a subset

of consumers, and therefore our customers, and help

us continue to serve as the trusted

provider of quality food choices.

4 unchanged sentences

a significant

restaurant chains, food

service companies and

grocery chains, including

our largest customers,

announced goals to

restaurant chains, food service companies

and grocery chains, including our

largest customers, announced goals to

transition to

2 unchanged sentences

24% of the U.S.

total population

according to the 2020 U.S.

have passed legislation requiring

that all eggs sold in those

Massachusetts, which represent about

14% of the total U.S.

according to the 2020 U.S.

total population according to the 2020 U.S.

Census, have passed legislation requiring that all eggs

sold in those

Massachusetts,

which represent about 14% of the total U.S.

population according to the 2020

Census, cage-free legislation

goes into effect

January 1, 2022.

For additional information,

Annual Report, Part

“Business – Specialty

went into effect January

For additional

information, see the 2021

Annual Report, Part I,

Item 1, “Business –

“Risk Factors” under the sub-heading “Legal and Regulatory Risk Factors.”

6 unchanged sentences

Consequently,

equal, we would

expect to experience

lower selling prices, sales

volumes and net

income (and may incur

net losses) in our

equal, we would expect to

experience lower selling prices, sales volumes

and net income (and may

incur net losses) in our

August/September

2 unchanged sentences

necessarily meaningful comparisons.

coronavirus (“COVID-19”)

outbreak, characterized

coronavirus (“COVID-19”) outbreak,

characterized as

Health Organization

1 unchanged sentence

approximately

operations in

our employees,

operations in response

to the COVID-19

priority is the

health and safety

employees, who work

our customers.

critical infrastructure

critical infrastructure industry,

responsibility

communication with our managers across our operations and continue

to closely monitor the situation in our facilities and in the

communication with our managers across our operations and continue to closely monitor the situation in our facilities and in the

communities where we live and work.

have implemented procedures designed to protect our employees, taking

We have implemented procedures designed to protect our employees, taking into account

guidelines published

Disease Control

government health

agencies, and

strict sanitation

indications that COVID-19 affects chickens or

can be transferred through the food supply.

proactively monitor

operations during

the COVID-19 pandemic,

including additional

related costs

protocols and

biosecurity measures

throughout our

operations with

restricted access

indications that COVID-19 affects chickens or can be transferred through the food supply.

continue to proactively monitor

and manage operations during

the COVID-19 pandemic, including

additional related costs

negative impact

business through

disruptions in

supply chain such

as increased costs and

limited availability of packaging

supplies, and increased labor

costs and medical costs

and, more recently,

second quarters

spent approximately

supply chain such as increased costs

and limited availability of packaging supplies,

and increased labor costs and medical costs

and, more recently, inflation.

approximately $534

$397 thousand

thousand (excluding

claims) related

(excluding medical

insurance claims)

respectively.

from additional labor

costs and increased

cost of packaging

materials, primarily reflected

fiscal 2021, most

COVID-19 paid during the third quarter of

fiscal 2022 were an additional $424 thousand as

compared to $322 thousand paid in

the comparable quarter in fiscal 2021.

approximately

these expenses

2022 resulted

from additional

and increased

packaging materials,

primarily reflected

quarter of fiscal

additional labor costs, primarily reflected in cost of sales.

Medical insurance claims related to COVID-19 paid during the thirty-

additional $1.6

thousand as compared

to $529 thousand

comparable quarter in

spent approximately

medical insurance

respectively.

fiscal 2022 were an additional $1.1 million as compared to $818 thousand paid

in the comparable period in fiscal 2021.

the comparable

EXECUTIVE OVERVIEW

For the second quarter of fiscal 2022,

we recorded a gross profit of $43.7 million compared to $58.5

million for the same period

For the third

quarter of fiscal

2022, we recorded

a gross profit

of $91.6 million

compared to $47.5

million for the

increased 2.8%

million dozen

second quarter

2022 compared

second quarter

2022, conventional

decreased 4.4%

specialty dozens sold

increased 15.7%

as compared to

the same quarter

in fiscal 2021.

Specialty dozens sold

increased as more

cage-free facilities came into production which helped increase our

cage-free egg sales.

conventional dozens

sold decreased

specialty dozens sold increased 24.1%

as compared to the same

quarter in fiscal 2021.

dozens sold increased as more

cage-free facilities came into production, retailers continue shift to selling cage-free products and cage-free legislation went into

full effect in California on January 1, 2022.

comparable period

average selling

compared to $1.227

in the prior-year

reported by the

USDA as of December

1, 2021, were

selling price

322.7 million,

which is approximately 913

thousand more hens than

the comparable period of

the prior year.

The USDA also reported

eggs in incubators were down 9% versus the prior-year period.

production costs

increased 21.6%,

This increase

was primarily

increased prices

costs started

Though these feed costs

began trending higher

in fiscal 2021, we initially

benefitted from filling our

storage bins at harvest and

locking in the

basis portion of

our grain purchases

several months in

which reduced our

feed costs in

experience the

same benefits

sustained elevated

that increased

costs compared

soybean meal,

representing an

5.9%, respectively,

approximately 5.4

the comparable

year, driven by higher flock amortization

and facility expense.

Red River owns and operates a specialty shell egg

production complex with approximately 1.7 million

cage-free laying

also reported

table-type eggs in incubators totaled 55.4 million, a decrease of 7.6% versus the prior-year period.

monitoring the

recently reported

highly pathogenic

avian influenza

Disease Control

and Prevention,

these detections

do not present an immediate public health concern

have been no positive tests for HPAI

at any Cal-Maine Foods’ owned or contracted production facility to date.

2022, the USDA

division of Animal

and Plant Health

Inspection Service (“APHIS”),

reported that approximately

commercial layer

February 2022

reported layer

numbers, have

depopulated due to

Pullets impacted comprise

approximately 830,000, or

about 0.7 percent

of the February

believe we have implemented and continue to maintain robust biosecurity programs across our

federal, state

government officials

industry groups to

and future outbreaks and effectively manage our response, if needed.

Our farm production costs

per dozen produced for

the third quarter of

fiscal 2022 increased 16.9%,

or $0.132, compared to

third quarter

primarily due

feed ingredients.

third quarter

fiscal 2022, the average

Chicago Board of Trade

(“CBOT”) daily market price

was $6.13 per

bushel for corn and

for soybean meal, representing an increase of 23.5% and a decrease of 2.5%, respectively, compared to the average daily CBOT

the comparable

11.8% versus the comparable period in the prior fiscal year, driven by higher flock amortization and facility expense.

Red River owns and operates a specialty shell egg production complex with approximately 1.7 million cage-free laying

hens, cage-free

pullet capacity,

mill, processing

plant, related

processing plant,

related offices

and outbuildings

3 unchanged sentences

For additional

information, see

Note 2 – Acquisition

1 unchanged sentence

During October

Directors approved

investment that

will specialize

announced that

strategic investment

specialize in

(“MeadowCreek”).

capitalize MeadowCreek

purchase property

and equipment

a controlling

preferred provider

specialty and

capitalize MeadowCreek with

million in debt

and equity to

purchase property and

equipment and to

capital, and we

will retain a

controlling interest in

will serve as

the preferred provider

to supply specialty

MeadowCreek’s

3 unchanged sentences

October 2021,

$23.0 million

capital project

cage-free egg production

at our Okeechobee,

Florida, production facility.

The project is

designed to include

the construction of

two cage-free layer

houses and one cage-free

pullet house with capacity

for approximately 400,000

Directors approved

million capital

cage-free egg production at our

Okeechobee, Florida, production facility.

The project is designed

to include the construction of

two cage-free layer houses and one cage-free

pullet house with capacity for approximately 400,000

cage-free hens and 210,000

pullets, respectively.

has commenced,

pullet placements

house planned

and project completion

plans to fund the

project through a combination

of available cash on

hand, investments and

operating cash

Construction has

commenced, with

placements planned

house planned to be finished by October 1, 2022, with project completion expected by February 1, 2023.

The Company plans to

fund the project through a combination of available cash on hand, investments and operating cash flow.

Effective December 5,

1 unchanged sentence

an additional investment

venture Southwest Specialty

Eggs, LLC, to acquire

California, Arizona and Nevada markets.

Operations expressed as a percentage of net sales.

Thirteen Weeks

Twenty-six Weeks

November 27, 2021

November 28, 2020

November 27, 2021

November 28, 2020

venture Southwest Specialty Eggs,

LLC to acquire

California, Arizona and Nevada

This strategic investment

is proving to

be incrementally

accretive as additional

California’s January 1, 2022 cage-free mandate.

RESULTS OF OPERATIONS

The following table sets

forth, for the periods

indicated, certain items from

our Condensed Consolidated Statements

expressed as a percentage of net sales.

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

February 26, 2022

February 27, 2021

Cost of sales

3 unchanged sentences

Total other income, net

Income (loss) before income taxes

Income tax (benefit) expense

Net income (loss)

second quarter

Income before income taxes

Income tax expense (benefit)

sales for the third quarter of

fiscal 2022 were $477.5 million compared

to $359.1 million for the same

period of fiscal

Net shell egg

sales represented 97.3%

total net sales

third quarters of

fiscal 2022 and

2021, respectively.

miscellaneous

shell egg operations.

the twenty-six

$722.6 million,

included with our shell egg operations.

thirty-nine weeks

ended February

were $1,184.2

million, compared

comparable period of fiscal 2021.

November 28, 2020, respectively.

The table below presents an analysis of our conventional and specialty shell egg

sales (in thousands, except percentage data):

Thirteen Weeks

Twenty-six Weeks

November 27, 2021

November 28, 2020

November 27, 2021

November 28, 2020

February 27, 2021, respectively.

respectively.

million, respectively.

The table below presents an analysis of our conventional and specialty shell egg sales (in thousands, except percentage data):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

February 26, 2022

February 27, 2021

Total net sales

10 unchanged sentences

Shell egg net sales

Second Quarter – Fiscal 2022 vs.

In the second quarter of fiscal

conventional egg sales increased $21.5

million, or 10.7%, compared to

Third Quarter – Fiscal 2022 vs.

quarter of fiscal

2021, primarily due

conventional shell

to the increase

conventional shell eggs,

partially offset

4 unchanged sentences

resulted in a $10.6 million decrease in net sales, respectively.

believe prices

for conventional

positively impacted

the conventional

production layer

eggs decreased

the prior-year

We believe prices for conventional eggs were positively impacted by a better alignment of the conventional production

hens producing

brown conventional

February 2022

decreased 31.7

13.1%, versus

comparable period.

primarily tied

conventional eggs

retail channel

foodservice channel

the pandemic.

export market

second quarter

USDA Agriculture

Service reported

foodservice and

further processing

increased 7.9% compared

comparable prior-year

believe lower

conventional egg

meal preparation

begin to shift

in the fourth quarter

of fiscal 2021

as consumers began

to resume out-of-home

dining and prepare

meals at home.

primarily due

15.7% increase

specialty eggs

which resulted

million increase

specialty egg

period benefitted from our acquisition of the remaining 50% membership

interest in Red River, which helped drive

capabilities as additional

cage-free production

capacity came online

during the quarter.

Cage-free egg sales

24.0% of our total sales in second quarter fiscal 2022 and 23.8% of total sales fiscal year-to-date.

for specialty

eggs has increased

their preferences

higher-priced

meal preparation

prices in the prior-year period were primarily tied to a surplus of conventional eggs entering the retail channel from the

foodservice channel exceeding demand during this phase of the pandemic.

purchase higher-priced specialty eggs for at-home meal preparation due to the perceived health and

welfare benefits of

specialty eggs, various state laws

mandating the sale of cage-free

and the public commitments by

most retailers to sell

more cage-free

Twenty-six weeks – Fiscal 2022

volume of conventional eggs

Changes in price resulted in

a $66.3 million increase and

change in volume resulted

in a $21.2 million decrease in net sales, respectively.

believe prices

for conventional

positively impacted

the conventional

production layer

Information Resources,

Multi Outlet,

conventional white

comparable period.

Specialty egg sales increased

$37.7 million, or 26.0%,

in the third quarter

of fiscal 2022 compared

to the third quarter

million increase in

Outlet for the

latest 13 weeks

ended February 27,

(including free-range,

pasture-raised and

organic) increased

demand is due

to California’s

cage-free mandate going

into-effect January

as more retailers’

to selling more cage-free products.

Our specialty egg

the third quarter

the prior-year

period benefitted from

our acquisition

the remaining

50% membership

cage-free egg

production capacity came online during the quarter.

Cage-free egg sales for the first, second and third quarters of fiscal

2022 were 22.3%, 22.4% and 24.1% of our total net shell egg sales, respectively.

Thirty-nine weeks – Fiscal 2022 vs.

resulted in a $29.1 million decrease in net sales, respectively.

We believe prices for conventional eggs were positively impacted by a better alignment of the conventional production

layer hen flock and customer and consumer demand.

USDA Agriculture Marketing Service reported shell eggs broken

lower conventional

prior-year period

were primarily

of conventional

eggs entering

from the foodservice channel due to the pandemic.

conventional eggs

sold was primarily

due to elevated

retail demand

consumer preference

the fourth quarter

consumers began

home dining and prepare fewer meals at home.

Specialty egg

sales increased

$31.2 million,

twenty-six weeks

ended November

2021, primarily

decrease in specialty egg

Changes in price

resulted in a $1.4

million decrease and

change in volume

the retail channel from the foodservice channel exceeding demand during this phase of the pandemic.

The decrease in

volume of conventional

eggs sold was

primarily due to

elevated retail demand

during the first

consumers’ preferences

preparation due

saw this consumer

preference begin to

fourth quarter of

fiscal 2021 as

consumers began to

resume out-of-

conventional white shell egg dozens sales decreased 12.6% during the latest 39

weeks ended February 27, 2022 versus

the prior-year comparable period.

Specialty egg sales increased $53.8

million, or 13.2%, for the

thirty-nine weeks ended February 26, 2022

the same period of

fiscal 2021, primarily due

increase in the volume

of specialty dozens sold

increase in specialty egg prices.

Changes in price resulted in a $5.8 million increase and change in volume resulted in a

$48.0 million increase in net sales,

respectively.

also benefitted from our additional cage-free

production capacity.

Cage-free egg sales for the thirty-nine weeks ended February 26, 2022 were 23.0% of our total net shell egg sales.

Egg products net sales

Second Quarter – Fiscal 2022 vs.

sales increased

Third Quarter – Fiscal 2022 vs.

period of fiscal 2021,

2021, primarily due

primarily due to a

36.8% selling price increase,

$1.4 million positive

impact on net

foodservice demand due to the pandemic.

Our egg products net average selling

price increased in the second quarter

fiscal 2022 compared

to the same period

in fiscal 2021

as foodservice channel

demand has begun

to shift more

pandemic levels.

Twenty-six weeks – Fiscal 2022

which had a $3.4

million positive impact on

Selling prices for egg products in

the third quarter of fiscal 2021

were negatively impacted by a decline in

selling price

as foodservice

channel demand

Thirty-nine weeks – Fiscal 2022 vs.

increased $7.8

2 unchanged sentences

increase compared

the first twenty-six weeks of fiscal 2021, which had a $4.0 million positive

impact on net sales.

Our egg products net average selling

price increased in the twenty-six

weeks end November 27, 2021, compared

foodservice demand

more restrictive

governmental and

business shutdowns

the first thirty-nine weeks of fiscal 2021, which had a $7.4 million positive impact on net sales.

Our egg products

net average selling

price increased in

the thirty-nine weeks

end February 26,

2022, compared to

decline in foodservice

demand during the

more restrictive phases

of governmental and

business shutdowns due

COST OF SALES

million and $564.9 million, respectively.

Costs of sales for

the third quarter of

fiscal 2022 were $385.9

million compared to $311.6

million for the same

period of fiscal

thirty-nine weeks ended

February 26, 2022

and February 27,

2021, total cost

of sales were

$1,042.2 million and

$876.5 million, respectively.

sales consists

costs directly

directly related

to producing,

outside producers, processing and packing of liquid

and frozen egg products and other non-egg costs.

production costs are

the egg production

including feed,

hen amortization,

The following table presents the key variables affecting our cost of

sales (in thousands, except cost per dozen data):

Thirteen Weeks

Twenty-six Weeks

processing and

packing shell

eggs, purchases

outside producers, processing and packing of liquid and frozen egg products and other non-egg costs.

Farm production costs are

those costs incurred

production facility,

including feed, facility,

hen amortization, and

other related farm

The following table presents the key variables affecting our cost of sales (in thousands, except cost per dozen data):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

Cost of Sales:

Farm production

Processing, packaging, and

Processing, packaging, and warehouse

Egg purchases and other (including

2 unchanged sentences

Farm production costs (per dozen

Outside egg purchases (average

cost per dozen)

Outside egg purchases (average cost per

Dozens produced

1 unchanged sentence

Farm Production

Second Quarter – Fiscal 2022 vs.

Feed costs per dozen

produced increased 29.0% in

the second quarter of fiscal

2022 compared to the

second quarter of

This increase was

primarily due

to increased prices

our primary feed

costs started trending

higher midway

second quarter

of fiscal 2021

and have remained

elevated compared

to historical costs.

Though these feed costs began trending

higher in fiscal 2021, we initially benefitted from

have remained

elevated entering

second quarter

experience the

same benefits,

which increased

costs compared

costs increased

Third Quarter – Fiscal 2022 vs.

increased 20.3%

This increase

was primarily

increased prices

(“CBOT”) market

corn representing an increase of 23.5 percent compared to the average

daily CBOT prices for the third quarter of fiscal

production costs

increased due

flock amortization,

production, which

has higher capitalized

costs, which began

fiscal 2021, are capitalized in our flocks during pullet production and

increased our amortization expense.

We had higher

facility expense as more cage-free facilities came into production.

Twenty-six weeks – Fiscal 2022

produced increased

the twenty-six

2021 compared

primarily from

production, which has

higher capitalized costs.

our higher feed

costs, which began to

third quarter of

fiscal 2021, are capitalized in our flocks during pullet production and increased our amortization expense.

We had higher facility expense as more cage-free facilities came into production.

Thirty-nine weeks – Fiscal 2022 vs.

thirty-nine weeks

2021, primarily

1 unchanged sentence

resulting from

increased export

weather-related

costs increased

weather-related shortfalls

production and yields, which have placed additional pressure on domestic supplies.

production costs

increased due

flock amortization,

fiscal 2021, are capitalized in our flocks during pullet production and

increased our amortization expense.

We had higher

facility expense as more cage-free facilities came into production.

primarily from

fiscal 2021, are capitalized in our flocks during pullet production and increased our amortization expense.

We had higher facility expense as more cage-free facilities came into production.

Processing, packaging, and warehouse

Second Quarter – Fiscal 2022 vs.

Cost of packaging

materials increased

5.3% compared

to the second

quarter of fiscal

2021 as supply

chain constraints

caused by the pandemic increased costs for packaging products and manufacturer

implemented pandemic surcharges.

Third Quarter – Fiscal 2022 vs.

packaging materials

increased 17.7%

wage increases

shortages, primarily

Twenty-six weeks – Fiscal 2022

materials increased

chain constraints

manufacturers

pandemic surcharges.

Costs also increased due to rising inflation.

Labor costs increased

wage increases in

response to labor

shortages, primarily due

to the pandemic

increase in costs.

Thirty-nine weeks – Fiscal 2022 vs.

packaging materials

increased 10.8%

wage increases

shortages, primarily

the thirty-nine

manufacturers

implemented pandemic surcharges.

Costs also increased due to rising inflation.

Labor costs increased

wage increases in

response to labor

shortages, primarily due

to the pandemic

Dozens processed increased 3.2%

compared to the thirty-nine

weeks ended February 27,

2021, which resulted in

million increase in costs.

Egg purchases and other (including change in inventory)

Second Quarter – Fiscal 2022 vs.

this category

outside egg purchases, as our percentage of produced to sold increased

Twenty-six weeks – Fiscal 2022

Third Quarter – Fiscal 2022 vs.

this category

outside egg purchases, as our percentage of produced to sold increased

COVID-19 global pandemic, weather fluctuations and geopolitical

The decrease of $14.7 million was primarily due to the increased cost of feed

ingredients and processing costs.

increased primarily

prices, partially

outside egg purchases, as our percentage of produced to sold increased to 91.9% from 88.7%.

Thirty-nine weeks – Fiscal 2022 vs.

percentage of produced to sold increased to 93.3% from 89.5%, partially offset by higher egg prices.

volatility tied to the Russia-Ukraine war and higher export demand.

Gross profit for the third quarter of fiscal 2022

was $91.6 million compared to $47.5 million for the

same period of fiscal 2021.

The increase of $44.1 million was primarily due to higher egg prices as well as the increased volume of specialty eggs, partially

offset by the increased cost of feed ingredients and processing costs.

thirty-nine weeks

ended February

million compared

period of fiscal

1 unchanged sentence

was primarily due

to the increased

ingredients and

SELLING, GENERAL, AND ADMINISTRATIVE

to higher egg

prices as well

as the increased

specialty eggs, partially offset by the increased cost of feed ingredients and processing costs.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

administrative

distribution,

The following table presents an analysis of our SGA expenses (in

Thirteen Weeks

November 27, 2021

November 28, 2020

The following table presents an analysis of our SGA expenses (in thousands):

Thirteen Weeks Ended

February 26, 2022

February 27, 2021

Specialty egg expense

3 unchanged sentences

Other expenses

Second Quarter – Fiscal 2022 vs.

Third Quarter – Fiscal 2022 vs.

Specialty egg expense

Advertising and

franchise fees

due to increased

advertising expense.

Specialty egg

expense which

includes franchise

fees, advertising

and promotion

costs generally

third quarter

2022 compared

Specialty dozens

outside distributors

including unconsolidated

affiliates, Specialty

and Southwest

Specialty Eggs, LLC, increased which reduced related costs that we generally incur for specialty egg sales to retailers.

Delivery expense

2 unchanged sentences

Payroll, taxes and benefits expense

The increase in payroll, taxes and benefits is primarily due to an increase

in employee health insurance costs.

Other expenses

insurance market conditions.

Twenty-six Weeks

November 27, 2021

November 28, 2020

The increase in payroll, taxes and benefits

is primarily due to increased wages for standard annual

raises as well as the

addition of Red River.

The accrual for anticipated performance-based bonuses also increased.

Thirty-nine Weeks Ended

February 26, 2022

February 27, 2021

Specialty egg expense

3 unchanged sentences

Other expenses

Twenty-six weeks –

Fiscal 2022 vs.

Thirty-nine weeks – Fiscal 2022 vs.

Specialty egg expense

period of fiscal 2021 due to increased

advertising expense.

Specialty egg

expense which

includes franchise

fees, advertising

and promotion

costs generally

thirty-nine weeks end

2022, compared

Specialty dozens sold to outside distributors including unconsolidated affiliates,

Specialty Eggs, LLC and

Southwest Specialty Eggs,

LLC, increased which

reduced related costs

that we generally

incur for specialty

to retailers.

Delivery expense

2 unchanged sentences

Other expenses

in other expenses

is primarily due

The increase in other

expenses is primarily due

to property losses

incurred that

were not covered

as increased premiums for property and casualty insurance market

incurred that were not

covered by insurance as

as increased premiums for property and casualty insurance programs.

INCOME (LOSS)

million for the same period of fiscal 2021.

For the twenty-six

2021, we recorded

an operating loss

million compared

to an operating

loss of $12.7 million for the same period of fiscal 2021.

thousand for the same period of fiscal 2021.

For the thirty-nine weeks ended February 26, 2022, we recorded an operating loss of $2.2 million compared to an operating loss

of $13.2 million for the same period of fiscal 2021.

OTHER INCOME (EXPENSE)

expense, royalty income, equity income or loss of unconsolidated

entities, and patronage income, among other items.

$207 thousand

expense, royalty income, equity income or loss of unconsolidated entities, and patronage income, among other items.

significantly

respectively.

For the twenty-six

weeks ended November 27,

2021, we earned $497

thousand of interest income

compared to $1.7 million

significantly

interest expense

thirty-nine weeks ended

February 26, 2022,

$702 thousand

twenty-six weeks

ended November

income compared to

significantly lower

investment balances.

2021, respectively.

For the second quarter of fiscal 2022, equity

income of unconsolidated entities was $264 thousand

compared to $58 thousand in

the prior-year period.

For the twenty-six

weeks ended November

27, 2021, equity

income of unconsolidated

entities was $399

thousand compared

$14 thousand in the prior-year period.

for the second quarter

ended November 27, 2021,

was income of $1.9

million compared to income

of $436 thousand

million payment

and adjustment

various marketing agreements.

remeasurement

along with the $1.4 million payment related to review and adjustment of our

various marketing agreements.

As of November 27, 2021, we remain under

audit by the Internal Revenue Service (IRS) for the fiscal years

2013 through 2015.

adjustments related

development credits

claimed during

Management is continuing to evaluate those proposed adjustments

and does not anticipate the adjustments would result in

circumstances

reporting date, the Company believes

it is reasonably possible an

adjustment to the previously recognized

tax benefits related to

and development

approximately $520

thousand during

the second quarter of fiscal 2022.

benefit described

$157 thousand

the comparable

period of fiscal 2021, which reflects an effective tax rate of 23.6%.

Patronage dividends, which represent distributions from our membership in Eggland’s Best, Inc.

were $10.1 million and $9.0

million for the thirteen and thirty-nine weeks ended February 26, 2022 and February 27, 2021, respectively.

dividends are paid once a year based on the profits of Eggland’s Best as well as its available cash.

For the third

quarter of fiscal

2022, equity income

of unconsolidated entities

was $1.8 million

compared to $1.9

million in the

prior-year period.

For the thirty-nine weeks ended February 26, 2022, equity income of unconsolidated entities was $2.2 million compared to $1.9

million in the prior-year period.

Other, net for

the third quarter ended February 26, 2022,

was income of $1.1 million compared

to income of $537 thousand for

the same period of fiscal 2021.

for the thirty-nine

weeks ended February

26, 2022, was

income of $8.2

million compared to

income of $1.5

acquisition of

the remaining

50% membership

remeasurement of our

equity investment,

$1.4 million payment related to review and adjustment of our various marketing agreements.

third quarter of

pre-tax income was

$53.0 million compared

million for the

same period of

recorded income tax expense

of $13.6 million for

the third quarter of

fiscal 2022, which reflects

an effective tax

Excluding the impact of discrete

items related to a

$5.0 million net tax

benefit recorded in the

third quarter of fiscal

2021 in connection

with the Coronavirus

Aid, Relief, and

Economic Security Act

(the “CARES Act”),

income tax expense

the comparable period of fiscal 2021 was $3.3 million, which reflects an adjusted effective tax rate of 27.9%.

thirty-nine weeks

ended February

pre-tax income

million compared

period of fiscal 2021.

recorded an income tax benefit of $2.9 million, which includes the discrete tax benefit of $8.3 million

Note 2 – Acquisition

Condensed Consolidated

Statements in

this Quarterly

compared to $2.4 million for the comparable period of fiscal 2021,

which reflects an effective tax rate of 24.6%.

other receivables

included income

taxes receivables

$42.5 million, respectively.

Our effective tax

rate differs from

the federal statutory income

tax rate due to

state income taxes, certain

Financial Statements

Quarterly Report.

Excluding the discrete tax benefit, income tax

expense was $5.3 million with an

adjusted effective tax rate of 27.3%,

to income tax expense

of $934 thousand for the

comparable period of fiscal 2021,

which reflects an effective

tax rate of 41.8%

excluding the impact of the $5.0 million discrete net tax benefit recorded in connection with the CARES Act.

Our effective tax rate differs

from the federal statutory income tax rate

due to state income taxes, certain

federal tax credits and

1 unchanged sentence

noncontrolling interest.

Net income for

the second quarter ended

November 27, 2021, was

$1.2 million, or $0.02

per basic and diluted

NET INCOME ATTRIBUTABLE

TO CAL-MAINE FOODS, INC.

Net income attributable to Cal-Maine Foods, Inc.

for the third quarter ended February 26, 2022, was $39.5 million, or $0.81 per

diluted common

share, compared

to net income of $12.2 million or $0.25 per basic and diluted share for the same

period of fiscal 2021.

Net loss for the twenty-six

weeks ended November 27, 2021, was

$16.9 million, or $0.34 per

basic and diluted share, compared

to net loss of $7.2 million or $0.15 per basic and diluted share for the same period of fiscal 2021.

CAPITAL RESOURCES

AND LIQUIDITY

2021 was $364.7

million, compared

compared with 5.77 at May 29, 2021.

Amended and Restated

Credit Agreement (the

“Credit Agreement”) with

a five-year term.

The Credit Agreement

increased senior

secured revolving

credit facility

income attributable

basic and diluted common share for the same period of fiscal 2021.

diluted common

share, compared

income attributable

$0.13 per basic and diluted common share for the same period of fiscal 2021.

CAPITAL RESOURCES AND LIQUIDITY

Our working capital at February

26, 2022 was $401.3 million,

compared to $429.8 million at

May 29, 2021.

calculation of

working capital

current liabilities.

2022, compared

with 5.77 at May 29, 2021.

Amended and Restated Credit Agreement (the

“Credit Agreement”) with a five-year

The Credit Agreement amended

increased senior secured

revolving credit facility

(the “Credit Facility”),

initial aggregate

principal amount

initial aggregate principal

were borrowed

Credit Facility.

Note 7 – Credit Facility

Quarterly Report.

activities, compared

$10.7 million

operating activities

comparable period

primarily due

increased costs

of feed ingredients compared to the prior-year period.

weeks ended November 27,

2021, compared to $52.4 million

in the same period of fiscal

acquired the remaining

securities, net

of purchases,

the twenty-six

For the thirty-nine weeks ended February 26, 2022,

$20.8 million in net cash was provided by

operating activities, compared to

$14.7 million provided

by operating activities

for the comparable

period in fiscal

primarily due to

the higher egg

prices partially offset by increased costs of feed ingredients compared to the prior-year period.

our facilities,

equipment for

the thirty-nine

weeks ended February

26, 2022, compared

to $73.8 million

period of fiscal

also acquired the

comparable period

distributions

unconsolidated

entity in the first two quarters of fiscal 2022 compared to $2.70 million for

the same period fiscal of 2021.

decreased $41.9

million since

2021, compared

$30.8 million

the same period of fiscal 2021.

the increasing

cage-free eggs

our customers

smooth transition to

meet their announced

commitment timeline for

cage-free egg sales.

entity in the first three quarters of fiscal 2022 compared to $5.8 million for the same period fiscal of 2021.

As of February 26, 2022, cash decreased $41.8 million

since May 29, 2021, compared to a decrease of

$25.2 million during the

same period of fiscal 2021.

increasing demand

for cage-free

smooth transition to meet their

announced commitment timeline for cage-free

have invested approximately $502

million in facilities, equipment

and related operations to

expand our cage-free production

starting with our first facility

Executive Overview

The following table presents material construction

projects approved as of November 27, 2021 (in thousands):

million in facilities, equipment and related operations to expand our cage-free production

starting with our first facility in 2008.

The following table presents material construction projects approved as of February 26, 2022 (in thousands):

Project(s) Type

Projected Cost

November 27, 2021

Spent as of February

Projected Cost

1 unchanged sentence

Cage-Free Layer & Pullet Houses

We believe our

current cash balances, investments, cash flows from operations, and Credit Facility will be sufficient

We believe our current cash balances, investments, cash flows from operations, and Credit Facility will be sufficient to fund our

current capital needs.

ISSUED/ADOPTED ACCOUNTING STANDARDS

RECENTLY ISSUED/ADOPTED ACCOUNTING STANDARDS

Note 1 - Summary of Significant

Accounting Policies

of the Notes to Condensed Consolidated Financial Statements included in this Quarterly

of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report.

CRITICAL ACCOUNTING ESTIMATES

Critical accounting

in accordance

estimates are

those estimates

accordance with

accepted accounting

principles that

financial condition

of operations.

critical accounting

estimates identified

accounting estimates

identified in

2021 Annual Report.

1 unchanged sentence

DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our exposure to market risk during the

twenty-six weeks ended November 27, 2021

from the information provided in Item 7A.

Quantitative and Qualitative

Disclosures About Market Risk in our 2021 Annual

There have been no material changes in our exposure to market risk during the thirty-six weeks ended February 26, 2022 from

the information provided in Item 7A.

Quantitative and Qualitative Disclosures About Market Risk in our 2021 Annual Report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis