What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-09-27 compared with 2022-03-29 · 529 added, 809 removed, 135 unchanged (91% of the section changed)

The following

conjunction with

with Management’s

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 29,

(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

(the “2022 Annual Report”), and the accompanying financial statements and

notes included in Part II Item 8 of the 2022 Annual

Report and in

1 unchanged sentence

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

report contains

numerous forward-looking

statements within

the Securities

forward-looking

(the “Securities

Securities Exchange Act

(the “Exchange

Act”) relating

future supply

products, potential

price trends,

potential future

Securities Exchange

“Exchange Act”)

soybean price

forward-looking

1 unchanged sentence

“anticipates,”

materially from

the forward-looking

The forward-looking

statements are

forward-looking

expectations,

1 unchanged sentence

actual results

materially from

the forward-looking

forward-looking

statements include,

among others,

Annual Report

hazards inherent

business (including

disease, pests,

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

countries that

2022, (iii) changes in the

demand for and market prices of

shell eggs and feed costs, (iv)

our ability to predict and meet

flocks or businesses and risks or

changes that may cause conditions to

completing a pending acquisition not to be

met, (vi) risks

generally have been

exacerbated by Russia’s

invasion of Ukraine

starting February 2022,

(vii) our ability

forward-looking

assumptions on

forward-looking statements

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

are reasonable,

assurance that

these forward-

forward-looking statements

intent or obligation

to update publicly

these forward-looking statements,

whether because of

new information, future

largest producer

and distributor

United States

Our total flock

of approximately

customers, including

regional grocery

store chains,

companies servicing

independent supermarkets

the U.S., food

2 unchanged sentences

in states across

the southwestern, southeastern, mid-western

the southwestern, southeastern,

mid-western and

mid-Atlantic regions of the U.S.

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

pricing mechanisms

agreements with

our customers,

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

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

eggs or formulas related to our costs of production which include the cost of corn and soybean

availability of

feed ingredients,

contracts for

future purchases

part of these contracts,

we may lock-in

the basis portion of

our grain purchases

several months in

Furthermore, due

we do not enter

into long-term contracts

beyond a year

to purchase corn and

soybean meal or hedge

transportation

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

and most recently the Russia-Ukraine war.

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 consumers, and therefore our customers, and help

us continue to serve as the trusted

represent attractive offerings

to a subset of

and therefore our customers,

and help us continue

to serve as the trusted

provider of quality food choices.

Specialty shell

significant and

growing portion

recent years,

a significant

restaurant chains, food service companies

and grocery chains, including our

largest customers, announced goals to

transition to

Additionally,

approximately

24% of the 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

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.”

eggs fluctuate

5 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 as

Health Organization

international

or contracted

Health Inspection

Service (“APHIS”)

that approximately

respectively.

calendar year

Market Analytics,

layer hen inventory is not projected to exceed the 320 million mark until October

we have implemented

robust biosecurity

across our locations.

are also working closely with federal, state and local government

officials and focused industry groups

to mitigate the risk of this and future outbreaks and effectively manage

our response, if needed.

CAGE-FREE EGGS

implementation

approximately

operations in response

to the COVID-19

priority is the

health and safety

employees, who work

In California

and Massachusetts,

collectively represent

cage-free legislation went

into effect January

these laws are subject

to judicial challenge,

Supreme Court

recently announced

case challenging

that requires the sale of only

cage-free eggs in that state.

have already affected and,

if upheld, will continue to affect

eggs (conventional

as specialty)

current supply,

would increase

cage-free production

is constructed.

Likewise, the

national supply

from conventional

consumer demand

which would decrease the price of conventional eggs.

A significant number

of our customers

have previously announced

goals to offer

cage-free eggs exclusively

to availability

affordability and

customer demand,

contingencies.

customers have

recently changed

70% cage-free

Our customers

critical infrastructure industry,

responsibility

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.

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

guidelines published

Disease Control

government health

agencies, and

strict sanitation

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, inflation.

approximately $534

$397 thousand

(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.

commit to long-term

purchases of specific quantities

or types of eggs

with us, and as

a result, it is difficult

to accurately predict

their announced

eggs represented

approximately

these expenses

2022 resulted

from additional

additional labor costs, primarily reflected in cost of sales.

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

additional $1.6

the comparable

first quarter

have invested

significant capital

cage-free facilities, and

we expect our focus

for future expansion will

continue to include cage-free

customers with a variety of egg choices and to address hunger in our

Strategy” and

Regulation,” and

Factors” under

heading “Legal and Regulatory Risk Factors.”

EXECUTIVE OVERVIEW

For the third

quarter of fiscal

2022, we recorded

a gross profit

of $91.6 million

compared to $47.5

million for the

For the first quarter of fiscal

2023, we recorded a gross profit of

$217.5 million compared to $6.6 million

for the same period of

offset by the increased

cost of feed ingredients

and processing, packaging

and warehouse costs.

total dozens sold increased

8.1% to 275.3

million dozen shell

first quarter of

fiscal 2023 compared

to 254.6 million

dozen for the

of fiscal 2022.

For the first

quarter of fiscal 2023, conventional

dozens sold decreased 2.3% and specialty

dozens sold increased

specialty eggs

the same prior

year period due

primarily to the

higher prices for

conventional eggs.

demand for specialty

eggs continued

Massachusetts

placed more of our cage-free facilities into production and better utilized

our existing cage-free production capacity.

southeast large

increased 133.8%

million dozen

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

selling price

322.7 million,

approximately 5.4

the comparable

prior-year period.

hen numbers reported

as of September

21, 2022, were

305.3 million, which

4.6% compared

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,

processing plant,

related offices

and outbuildings

equipment located

approximately 400

Bogata, Texas.

For additional

information, see

Note 2 – Acquisition

Consolidated Financial Statements included in this Quarterly Report.

During October

announced that

strategic investment

specialize in

(“MeadowCreek”).

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

opportunities

institutional

industrial food products arenas.

October 2021,

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.

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,

2021, we made

an additional investment

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

incubators were up 9.0% year-over-year,

indicating that layer flocks may increase in the future.

production costs

increased 16.5%,

first quarter of fiscal 2022

This increase was primarily

due to increased prices for

feed ingredients and a higher

basis in corn in

our production

first quarter

average Chicago

Trade (“CBOT”)

respectively, compared

to the average daily CBOT prices for the comparable period in the prior

Operations expressed as a percentage of net sales.

Thirteen Weeks

August 27, 2022

August 28, 2021

Cost of sales

3 unchanged sentences

Total other income, net

Income before income taxes

Income (loss) 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

included with our shell egg operations.

thirty-nine weeks

ended February

were $1,184.2

million, compared

comparable period of fiscal 2021.

February 27, 2021, respectively.

Net income (loss)

net sales for

the first quarter

of fiscal 2023

were a record

$658.3 million

compared to $325.0

million for the

of fiscal 2022.

represented 95.8%

first quarters

2022, 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

Shell egg sales classified

as “Other” represent

sales of hard-cooked

eggs and other

miscellaneous byproducts included

shell egg operations.

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

sales (in thousands, except percentage data):

Thirteen Weeks

August 27, 2022

August 28, 2021

Total net sales

1 unchanged sentence

Net shell egg sales

Net shell egg sales as a

percent of total net sales

Net shell egg sales as a percent of total net sales

Total dozens sold

Net average selling price per

Net average selling price per dozen:

All shell eggs

1 unchanged sentence

Egg products net sales

Net average selling price per

Net average selling price per pound

Shell egg net sales

Third Quarter – Fiscal 2022 vs.

quarter of fiscal

First Quarter – Fiscal 2023

first quarter

$243.6 million,

primarily due

to the increase

conventional shell eggs,

conventional shell

partially offset

by a decrease

of conventional

price resulted

conventional eggs sold.

Changes in price

resulted in a

$247.6 million

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

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.

USDA Agriculture

Service reported

foodservice and

further processing

increased 7.9% compared

comparable prior-year

believe lower

conventional egg

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

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.

increase and the

change in volume

resulted in a $4.1 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

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.

prices for conventional eggs

were positively impacted by

a better alignment of the

size of the conventional

production layer

egg prices further

quarter of fiscal 2023 primarily due to decreased supply caused by the HPAI

outbreak, discussed above.

independently

quoted regional

not fluctuate

as conventional

independently

whole markets

average selling price for specialty eggs in the first quarter of fiscal 2023.

Specialty egg sales increased $68.4 million, or

51.6%, in the first quarter of fiscal 2023

compared to the first quarter of

primarily due

35.1% increase

specialty eggs

increase in net sales.

pasture-raised

positively impacted

higher conventional

Massachusetts’s

free mandates going into effect January 1, 2022, as well as more

retailers shifting to selling more cage-free products.

existing cage-free production capacity.

Cage-free egg sales for the first

quarter of fiscal 2023 represented 19.4%

total net shell egg

sales versus 22.1%

for the same prior

year period due

the higher conventional

dozens sold increased 58% in the first of quarter of fiscal 2023 as compared

to the first quarter of fiscal 2022.

Egg products net sales

Third Quarter – Fiscal 2022 vs.

period of fiscal 2021,

primarily due to a

36.8% selling price increase,

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

30.2%, primarily

selling price

increase compared

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

First Quarter – Fiscal 2023

primarily due

173.2% selling

price increase,

million positive

Our egg products

1 unchanged sentence

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

the first quarter

of fiscal 2023,

compared to the

first quarter of

fiscal 2022 as the supply decreased due to the HPAI

outbreak that started in February 2022.

believe 13.4 million of

breaking facilities in Iowa and Ohio.

COST OF SALES

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.

million compared

sales consists

directly related

costs directly

to producing,

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

outside producers, processing and packing of liquid

and frozen egg products and other non-egg costs.

production costs are

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

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

August 27, 2022

August 28, 2021

Cost of Sales:

1 unchanged sentence

Processing, packaging, and warehouse

Egg purchases and other (including

change in inventory)

Egg purchases and other (including change in inventory)

Total shell eggs

Farm production costs (per dozen

Outside egg purchases (average cost per

Farm production costs (per dozen produced)

Outside egg purchases (average cost per dozen)

Dozens produced

1 unchanged sentence

Farm Production

Third Quarter – Fiscal 2022 vs.

increased 20.3%

This increase

was primarily

increased prices

First Quarter – Fiscal 2023

Feed costs per dozen produced

increased 22.4% in the first quarter

of fiscal 2023

compared to the first quarter of fiscal

This increase was primarily due to increased prices for corn, our primary

feed ingredient.

first quarter

average daily

Chicago Board

(“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,

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

ingredient prices

resulting from

weather-related shortfalls

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

production costs

increased due

flock amortization,

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.

respectively,

compared to the average daily CBOT prices for the first quarter of fiscal 202

corn and soybean

remained tight

relative to demand

fiscal 2023 as

evidenced by a

weather-related

Russia-Ukraine

significantly

continued corn and soybean upward pricing pressures and further market

volatility to affect feed costs.

Processing, packaging, and warehouse

Third Quarter – Fiscal 2022 vs.

packaging materials

increased 17.7%

chain constraints

manufacturers

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%

the thirty-nine

manufacturers

implemented pandemic surcharges.

Costs also increased due to rising inflation.

First Quarter – Fiscal 2023

Cost of packaging materials increased 16.1% compared to the first quarter of

fiscal 2022 due to rising inflation.

Labor costs increased 24.4%

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.

due to wage increases and increased use of contract labor in response to labor shortages

Dozens processed increased 8.6% compared to the first quarter of fiscal 2022,

which resulted in a $2.2 million increase

Egg purchases and other (including change in inventory)

Third Quarter – Fiscal 2022 vs.

First Quarter – Fiscal 2023

this category

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

of $19.3 million

was primarily due

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

partially offset

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

to 93.6% from 92.9%.

Gross profit for

the first quarter

of fiscal 2023

was $217.5 million

compared to $6.6

million for the

same period of

primarily due

increased volume

partially offset by the increased cost of feed ingredients

and processing,

packaging and warehouse costs.

SELLING, GENERAL, AND ADMINISTRATIVE

administrative

1 unchanged sentence

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

Thirteen Weeks Ended

February 26, 2022

February 27, 2021

Thirteen Weeks

August 27, 2022

August 28, 2021

Specialty egg expense

3 unchanged sentences

Other expenses

Third Quarter – Fiscal 2022 vs.

First Quarter – Fiscal 2023

Specialty egg expense

Specialty egg

expense which

includes franchise

fees, advertising

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

The increased

delivery expense

Payroll, taxes and benefits expense

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

Delivery expense

Payroll, taxes and benefits

Stock compensation expense

Other expenses

Thirty-nine weeks – Fiscal 2022 vs.

Specialty egg expense

Specialty egg

expense which

includes franchise

aligns with specialty

our specialty egg

expense decreased by

4.7%, primarily due

to increased sales

Eggland’s Best,

unconsolidated

These franchisees

responsible for

the 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.

costs associated

sales, which resulted in reduced costs for us.

Also, the higher prices for

conventional eggs and the comparatively lower

prices for specialty eggs diminished

the need to promote specialty eggs;

as a result, EB temporarily reduced

franchise fees for certain specialty egg products to encourage continued production

of these products.

Delivery expense

1 unchanged sentence

delivery expense

Other expenses

The increase in other

expenses is primarily due

to property losses

incurred that were not

covered by insurance as

as increased premiums for property and casualty insurance programs.

Payroll, taxes and benefits expense

benefits expense

all employees

inflationary market.

INCOME (LOSS)

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.

For the first quarter of fiscal 2023,

we recorded operating income of $163.9 million

compared to operating loss of $39.7 million

for the same period of fiscal 2022.

OTHER INCOME (EXPENSE)

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

expense, royalty income, equity income or loss of unconsolidated

entities, and patronage income, among other items.

For the first quarter of fiscal

2023, we earned $1.1 million of interest

income compared to $290 thousand for

the same period of

significantly

respectively.

thirty-nine weeks ended

February 26, 2022,

$148 thousand and $58 thousand for the first quarters

ended August 27, 2022 and August 28, 2021, respectively.

quarter ended

$155 thousand

income compared to

significantly lower

investment balances.

2021, respectively.

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

our acquisition

remaining 50%

membership interest

remeasurement

first quarter

2023, pre-tax

$165.5 million

recorded income

which reflects

effective tax

rate of 46.8%.

Excluding the

impact of discrete

items related to

recorded in the

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

Financial Statements

Quarterly Report.

Excluding the discrete tax benefit, income tax

expense was $5.3 million with an

River”) acquisition,

for the comparable period of fiscal 2022 was $7.6 million, which reflects an

adjusted effective tax rate of 22.4%.

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

Our effective tax

rate differs from

the federal statutory income

tax rate due to

state income taxes, certain

federal tax credits and

3 unchanged sentences

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

income attributable

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

diluted common

share, compared

income attributable

attributable to Cal-Maine

the first quarter

ended August 27,

2022, was $125.3

million, or $2.58

basic and $2.57 per diluted

common share, compared to net

loss attributable to Cal-Maine

of $18.0 million

per basic and diluted common share for the same period of fiscal 2022.

CAPITAL RESOURCES AND LIQUIDITY

Our working capital at February

26, 2022 was $401.3 million,

compared to $429.8 million at

May 29, 2021.

LIQUIDITY AND CAPITAL

Capital and Current Ratio

2022 was $548.5

million, compared

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

were borrowed

Credit Facility.

Note 7 – Credit Facility

Quarterly Report.

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 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

working capital is

defined as current

assets less current liabilities.

Our current ratio

was 3.4 at August

27, 2022, compared with

3.6 at May 28, 2022.

The current ratio is calculated by dividing current

assets by current liabilities.

Cash Flows from Operating Activities

activities for

the comparable

Other adjustments, net is primarily due to a $67.4 million balance for

income taxes payable as of August 27, 2022.

Cash Flows from Investing Activities

to invest in our facilities, with $27.7

million used to purchase property,

plant and equipment for the thirteen

remaining 50%

membership interest

$44.8 million,

cash acquired.

of investments

investments is

primarily due

increased cash

operating activities

maturities of

securities were

million for the comparable period in fiscal 2022.

Cash Flows from Financing Activities

We paid dividends

of $36.7 million in the first quarter of fiscal 2023.

cash increased

$76.9 million

million during

same period of fiscal 2022.

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 in 2008.

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

Credit Facility

long-term debt

outstanding at

credit facility

have $4.1 million in

outstanding standby letters of

credit, issued under our

Credit Facility for the benefit

insurance companies.

to Part II Item

Financial Statements, Note

Facility included

Annual Report for further information regarding our long-term debt.

Material Cash Requirements

smooth transition toward

their announced commitment

timeline for cage-free

As previously

reported, during the

fiscal 2023, our

Board of Directors

approved another

capital project

to expand our

cage-free production

capabilities.

approximately

million cage-free hens and include remodels of all remaining pullet facilities.

completion is expected by year-end 2025.

The following table presents material construction projects approved

as of August 27, 2022 (in thousands):

Project(s) Type

Projected Cost

Spent as of February

Spent as of August

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 to fund our

current capital needs.

RECENTLY ISSUED/ADOPTED ACCOUNTING STANDARDS

Cage-Free Layer & Pullet Houses

We believe our

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

current capital needs for at least the next 12 months.

ISSUED/ADOPTED ACCOUNTING STANDARDS

Note 1 - Summary of Significant

Accounting Policies

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

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

CRITICAL ACCOUNTING ESTIMATES

Critical accounting

estimates are

those estimates

accordance with

accepted accounting

in accordance

principles that

financial condition

of operations.

accounting estimates

identified in

critical accounting

estimates identified

2022 Annual Report.

1 unchanged sentence

DISCLOSURES ABOUT MARKET RISK

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.

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

the thirteen weeks ended August 27, 2022 from the

information provided in Item 7A.

Quantitative and Qualitative Disclosures

About Market Risk in our 2022 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