CAL-MAINE FOODS INC 10-Q

ITEM 1. FINANCIAL STATEMENTS Cal-Maine Foods, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands, except for par value amounts) (Unaudited) August 29, 2026 May 30, 2026 Assets Current assets: Cash and cash equivalents $ 113,542 $ 107,217 Investment securities available -for-sale 654,050 816,840 Trade and other receivables, net 175,998 156,564 Income tax receivable 109,234 107,867 Inventories 394,690 375,265 Prepaid expenses and other current assets 24,379 17,789 Total current assets 1,471,893 1,581,542 Property, plant & equipment, net 1,312,285 1,318,335 Goodwill 97,059 97,059 Intangible assets, net 96,596 73,130 Other long -term assets 35,546 37,504 Total Assets $ 3,013,379 $ 3,107,570 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 102,396 $ 96,106 Accrued wages and benefits 30,591 48,371 Accrued expenses and other liabilities 58,140 61,039 Total current liabilities 191,127 205,516 Other noncurrent liabilities 38,730 39,650 Deferred income taxes, net 203,575 221,872 Total liabilities 433,432 467,038 Commitments and contingencies - see Note 10 — — Stockholders’ equity: Common stock ($ 0.01 par value) - authorized 120,000 shares, issued 75,061 shares 751 751 Paid-in capital 87,775 86,106 Retained earnings 2,706,493 2,765,108 Accumulated other comprehensive loss, net of tax ( 2,429 ) ( 1,466 ) Common stock in treasury at cost – 28,145 shares at August 29, 2026 and 28,080 shares at May 30, 2026 ( 222,854 ) ( 217,767 ) Total Cal -Maine Foods, Inc. stockholders’ equity 2,569,736 2,632,732 Noncontrolling interest in consolidated entity 10,211 7,800 Total stockholders’ equity 2,579,947 2,640,532 Total Liabilities and Stockholders’ Equity $ 3,013,379 $ 3,107,570 See Notes to Condensed Consolidated Financial Statements. Index 4 Cal-Maine Foods, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) Thirteen Weeks Ended August 29, 2026 August 30, 2025 Net sales $ 539,607 $ 922,602 Cost of sales 539,204 611,288 Gross profit 403 311,314 Selling, general and administrative 81,652 69,514 Gain on involuntary conversions — ( 7,488 ) Loss on disposal of fixed assets 916 104 Operating income (loss) ( 82,165 ) 249,184 Other income (expense): Interest income, net 8,039 12,850 Other, net ( 70 ) 1,231 Total other income, net 7,969 14,081 Income (loss) before income taxes ( 74,196 ) 263,265 Income tax expense (benefit) ( 17,992 ) 64,158 Net income (loss) ( 56,204 ) 199,107 Less: Income (loss) attributable to noncontrolling interest 2,411 ( 233 ) Net income (loss) attributable to Cal -Maine Foods, Inc. $ ( 58,615 ) $ 199,340 Net income (loss) per common share: Basic $ ( 1.26 ) $ 4.13 Diluted $ ( 1.26 ) $ 4.12 Weighted average shares outstanding: Basic 46,703 48,281 Diluted 46,703 48,424 See Notes to Condensed Consolidated Financial Statements. Index 5 Cal-Maine Foods, Inc. and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (Loss) (In thousands) (Unaudited) Thirteen Weeks Ended August 29, 2026 August 30, 2025 Net income (loss) $ ( 56,204 ) $ 199,107 Other comprehensive income, before tax: Unrealized holding gain (loss) on available -for-sale securities, net of reclassification adjustments ( 1,270 ) 2,586 Income tax benefit (expense) related to items of other comprehensive income 307 ( 625 ) Other comprehensive income (loss), net of tax ( 963 ) 1,961 Comprehensive income (loss) ( 57,167 ) 201,068 Less: Comprehensive income (loss) attributable to the noncontrolling interest 2,411 ( 233 ) Comprehensive income (loss) attributable to Cal -Maine Foods, Inc. $ ( 59,578 ) $ 201,301 See Notes to Condensed Consolidated Financial Statements. Index 6 Cal-Maine Foods, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Thirteen Weeks Ended August 29, 2026 August 30, 2025 Cash flows from operating activities: Net income (loss) $ ( 56,204 ) $ 199,107 Depreciation and amortization 33,532 29,663 Deferred income taxes ( 18,012 ) 13,682 Other adjustments, net ( 60,706 ) 36,152 Net cash provided by (used in) operations ( 101,390 ) 278,604 Cash flows from investing activities: Purchases of investment securities ( 49,558 ) ( 270,315 ) Sales and maturities of investment securities 211,813 181,145 Acquisition of franchise territory ( 25,000 ) — Acquisition of business, net of cash acquired — ( 275,291 ) Purchases of property, plant and equipment ( 26,612 ) ( 45,302 ) Net proceeds from disposal of property, plant and equipment 29 49 Net cash provided by (used in) investing activities 110,672 ( 409,714 ) Cash flows from financing activities: Payments of dividends — ( 114,163 ) Purchase of common stock by treasury ( 5,059 ) ( 18 ) Net cash used in financing activities ( 5,059 ) ( 114,181 ) Net change in cash, cash equivalents and restricted cash 4,223 ( 245,291 ) Cash, cash equivalents and restricted cash at beginning of period 113,542 499,392 Cash, cash equivalents and restricted cash at end of period $ 117,765 $ 254,101 See Notes to Condensed Consolidated Financial Statements. Index 7 Cal-Maine Foods, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) Note 1 - Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements of Cal -Maine Foods, Inc. and its subsidiaries (“Cal -Maine Foods,” the “Company,” “we,” “us,” “our”) have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial reporting and should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended May 30, 2026 (the “2026 Annual Report”). These statements reflect all adjustments that are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented and, in the opinion of management, consist of adjustments of a normal recurring nature. Operating results for the interim periods are not necessarily indicative of operating results for the entire fiscal year. Fiscal Year The Company’s fiscal year ends on the Saturday closest to May 31. Each of the three-month periods ended on August 29, 2026 and August 30, 2025 included 13 weeks. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Intangible Assets Intangible assets are initially recorded at fair value in business acquisitions, which include primarily customer relationships and other definite-lived intangibles. They are amortized over their estimated useful lives of 5 to 15 years. The gross cost and accumulated amortization of intangible assets are removed when the recorded amounts are fully amortized and the asset is no longer in use or the contract has expired. When certain events or changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts. The Company periodically evaluates the remaining useful lives of our intangible assets and whether events and circumstances continue to support the related accounting conclusions. As of May 31, 2026, the Company reassessed the estimated useful life of certain intangible assets previously classified as with a definite life and determined that it was appropriate to reclassify franchise rights to an indefinite life. The use of an indefinite life for all franchise rights contemplates the Company’s historical ability to renew its franchise agreements indefinitely and at little cost. Therefore, cash flows derived from the franchise agreements are expected to continue indefinitely. As of May 31, 2026, the franchise agreements intangible assets had an aggregate carrying amount of approximately $ 8.6 million and are presented within “Intangible assets, net” on our condensed consolidated balance sheets. Amortization expense decreased by approximately $ 399 thousand for the thirteen weeks ended August 29, 2026 and future periods as a result of this change in estimate. As of August 29, 2026, the franchise agreements intangible assets had an aggregate carrying value of approximately $ 33.6 million with the $ 25 million acquisition of the franchise rights further described in Note 2 – Acquisition . Indefinite life assets are recorded at fair value in business acquisitions and represent franchise rights, brand names and water rights. They are not amortized, but are reviewed for impairment at least annually or more frequently if impairment indicators arise. Dividends Payable Dividends are accrue d at the end of each quarter according to the Company’s dividend policy adopted by its Board of Directors (the “Board”) . The Company pays a dividend to holders of its Common Stock on a quarterly basis for each quarter for which the Company reports net income attributable to Cal -Maine Foods, Inc. , computed in accordance with GAAP, in an amount equal to one-third (1/3) of such quarterly net income. Dividends are paid to stockholders of record as of the 60th day following the last day of such quarter, except for the fourth fiscal quarter. For the fourth quarter, the Company pays dividends to Index 8 stockholders of record on the 65th day after the quarter end. Dividends are payable on the 15th day following the record date. Following a quarter for which the Company does not report net income attributable to Cal-Maine Foods, Inc., the Company will not pay a dividend for a subsequent profitable quarter until the Company is profitable on a cumulative basis computed from the date of the most recent quarter for which a dividend was paid. The dividend policy is subject to periodic review by the Board. In accordance with our variable dividend policy, we will not pay a cash dividend to holders of our Common Stock with respect to our first quarter of fiscal 2027. Revenue Recognition The Company recognizes revenue through the sale of its products to customers through retail, foodservice , industrial and other distribution channels. The majority of the Company’s revenue is derived from agreements or contracts with customers based upon the customer ordering its products with a single performance obligation of delivering the product. The Company believes the performance obligation is met upon delivery and acceptance of the product by its customers, which generally occurs upon shipment or delivery to a customer based on the terms of the sale. Costs paid to third party brokers to obtain agreements are expensed as the Company’s agreements are generally less than one year. Revenues are recognized in an amount that reflects the net consideration we expect to receive in exchange for delivery of the products. The Company periodically offers sales incentives or other programs such as rebates, discounts, coupons, volume- based incentives, guaranteed sales and other programs. The Company records an estimated allowance for costs associated with these programs, which is recorded as a reduction in revenue at the time of sale using historical trends and projected redemption rates of each program. The Company regularly reviews these estimates and any difference between the estimated costs and actual realization of these programs would be recognized in the subsequent period. New Accounting Pronouncements and Policies In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024- 03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40) . The objective of ASU 2024 -03 is to improve disclosures about a public entity’s expenses, primarily through additional disaggregation of income statement expenses. Additionally, in January 2025, the FASB further clarified the effective date of ASU 2024 -03 with the issuance of ASU 2025-01. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted and may be applied either on a prospective or retrospective basis. The Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statement disclosures. There are no other new accounting pronouncement s issued or effective during the fiscal year that had or are expected to have a material impact on our consolidated financial statements. Note 2 - Acquisition Acquisition of Eggland’s Best ® Franchise Territory Effective July 10, 2026 , the Company acquired the Eggland’s Best® franchise territory in the Northeast for $ 25 million. The acquisition gives the Company the exclusive right to distribute and sell Egg-Land’s Best® and Land O’ Lakes® branded eggs in Maine, Massachusetts, New Hampshire, Rhode Island, and select key areas in Vermont, New York, and Connecticut . The Company accounted for the acquisition as an asset acquisition, as the fair value of the asset being acquired was recorded as an indefinite life franchise rights intangible asset. Index 9 Note 3 - Investment Securities Available-for-Sale The following represents the Company’s investment securities available -for-sale as of August 29, 2026 and May 30, 2026 (in thousands): August 29, 2026 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Municipal bonds $ 6,267 $ 3 $ — $ 6,270 Commercial paper 19,234 — 9 19,225 Corporate bonds 459,391 — 1,739 457,652 Certificates of deposits 2,746 — 8 2,738 US government and agency obligations 135,650 — 424 135,226 Treasury bills 32,957 — 18 32,939 Total current investment securities $ 656,245 $ 3 $ 2,198 $ 654,050 May 30, 2026 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Municipal bonds $ 12,362 $ 4 $ — $ 12,366 Commercial paper 42,562 — 16 42,546 Corporate bonds 569,137 — 742 568,395 Certificates of deposits 3,226 — 6 3,220 US government and agency obligations 153,172 — 187 152,985 Treasury bills 37,334 — 6 37,328 Total current investment securities $ 817,793 $ 4 $ 957 $ 816,840 Actual maturities may differ from contractual maturities as some borrowers have the right to call or prepay obligations with or without penalties. Contractual maturities of current investment securities at August 29, 2026 are as follows (in thousands): Estimated Fair Value Within one year $ 342,726 1-5 years 311,324 Total $ 654,050 Note 4 - Fair Value Measurements The Company is required to categorize both financial and nonfinancial assets and liabilities based on the following fair value hierarchy. The fair value of an asset is the price at which the asset could be sold in an orderly transaction between unrelated, knowledgeable, and willing parties able to engage in the transaction. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor in a transaction between such parties, not the amount that would be paid to settle the liability with the creditor. • Level 1 - Quoted prices in active markets for identical assets or liabilities • Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, including: ◦ quoted prices for similar assets or liabilities in active markets ◦ quoted prices for identical or similar assets in non-active markets ◦ inputs other than quoted prices that are observable for the asset or liability, and ◦ inputs derived principally from or corroborated by other observable market data • Level 3 - Unobservable inputs for the asset or liability that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities Index 10 The disclosure of fair value of certain financial assets and liabilities that are recorded at cost are as follows: Cash and Cash Equivalents, Accounts Receivable, and Accounts Payable The carrying amount approximates fair value due to the short maturity of these instruments. Assets and Liabilities Measured at Fair Value on a Recurring Basis In accordance with the fair value hierarchy described above, the following table shows the fair value of our financial assets and liabilities that are required to be measured at fair value on a recurring basis as of August 29, 2026 and May 30, 2026 (in thousands): August 29, 2026 Level 1 Level 2 Level 3 Balance Assets Municipal bonds $ — $ 6,270 $ — $ 6,270 Commercial paper — 19,225 — 19,225 Corporate bonds — 457,652 — 457,652 Certificates of deposits — 2,738 — 2,738 US government and agency obligations — 135,226 — 135,226 Treasury bills — 32,939 — 32,939 Total assets measured at fair value $ — $ 654,050 $ — $ 654,050 Liabilities Contingent consideration $ — $ — $ 19,000 $ 19,000 Total liabilities measured at fair value $ — $ — $ 19,000 $ 19,000 May 30, 2026 Level 1 Level 2 Level 3 Balance Assets Municipal bonds $ — $ 12,366 $ — $ 12,366 Commercial paper — 42,546 — 42,546 Corporate bonds — 568,395 — 568,395 Certificates of deposits — 3,220 — 3,220 US government and agency obligations — 152,985 — 152,985 Treasury bills — 37,328 — 37,328 Total assets measured at fair value $ — $ 816,840 $ — $ 816,840 Liabilities Contingent consideration $ — $ — $ 21,500 $ 21,500 Total liabilities measured at fair value $ — $ — $ 21,500 $ 21,500 Investment securities – available -for-sale are all classified as Level 2 and consist of securities with maturities of three months or longer when purchased. We classified these securities as current because amounts invested are readily available for current operations. Observable inputs for these securities are yields, credit risks, default rates, and volatility. Contingent consideration classified as Level 3 consists of the potential obligation to pay an earnout to Fassio Egg Farms, Inc. (“Fassio”) contingent on the acquired business meeting certain return on profitability milestones over a three-year period that commenced on the date of the acquisition in the second quarter of fiscal 2024. The fair value of the contingent consideration is estimated using a discounted cash flow model. Key assumptions and unobservable inputs that require significant judgment used in the estimate include weighted average cost of capital, egg prices, projected revenue and expenses over the period for which the contingent consideration is measured , and the probability assessments with respect to the likelihood of achieving the forecasted projections. Index 11 The following table shows the beginning and ending balances in fair value of the contingent consideration (in thousands): Fassio Contingent Consideration Balance, May 30, 2026 $ 21,500 Fair value adjustments ( 2,500 ) Balance, August 29, 2026 $ 19,000 At August 29, 2026 , the contingent consideration is recorded within “Accrued expenses and other liabilities” in the condensed consolidated balance sheets. Adjustments to the fair value of contingent consideration are recorded within “Selling, general and administrative” expenses in the condensed consolidated statements of operations. Note 5 - Inventories Inventories consisted of the following as of August 29, 2026 and May 30, 2026 (in thousands): August 29, 2026 May 30, 2026 Flocks, net of amortization $ 202,588 $ 192,673 Feed and supplies 86,952 84,769 Raw materials and finished goods inventory 105,150 97,823 $ 394,690 $ 375,265 We grow and maintain flocks of layers (mature female chickens), pullets (female chickens under 18 weeks of age), and breeders (male and female chickens used to produce fertile eggs to hatch for egg production flocks). Our total flock at August 29, 2026 and May 30, 2026 consisted of approximately 14.6 million and 14.1 million pullets and breeders and 50.4 million and 50.0 million layers, respectively. Note 6 - Equity The following reflects equity activity for the thirteen weeks ended August 29, 2026 and August 30, 2025 (in thousands): Thirteen Weeks Ended August 29, 2026 Cal -Maine Foods, Inc. Stockholders Treasury Paid In Accum. Other Retained Noncontrolling Amount Amount Capital Comp. Loss Earnings Interest Total Balance at May 30, 2026 $ 751 $ ( 217,767 ) $ 86,106 $ ( 1,466 ) $ 2,765,108 $ 7,800 $ 2,640,532 Other comprehensive loss, net of tax — — — ( 963 ) — — ( 963 ) Stock compensation plan transactions — ( 60 ) 1,669 — — — 1,609 Repurchase of shares — ( 5,027 ) — — — — ( 5,027 ) Net income (loss) — — — — ( 58,615 ) 2,411 ( 56,204 ) Balance at August 29, 2026 $ 751 $ ( 222,854 ) $ 87,775 $ ( 2,429 ) $ 2,706,493 $ 10,211 $ 2,579,947 Index 12 Thirteen Weeks Ended August 30, 2025 Cal -Maine Foods, Inc. Stockholders Treasury Paid In Accum. Other Retained Noncontrolling Amount Amount Capital Comp. Income (Loss) Earnings Interest Total Balance at May 31, 2025 $ 751 $ ( 85,893 ) $ 80,845 $ ( 1,007 ) $ 2,565,928 $ 5,391 $ 2,566,015 Other comprehensive income, net of tax — — — 1,961 — — 1,961 Stock compensation plan transactions — 2 1,289 — — — 1,291 Dividends ($ 1.371 per share) ( 66,457 ) ( 66,457 ) Net income (loss) — — — — 199,340 ( 233 ) 199,107 Balance at August 30, 2025 $ 751 $ ( 85,891 ) $ 82,134 $ 954 $ 2,698,811 $ 5,158 $ 2,701,917 On February 25, 2025, the Board approved a $ 500 million share repurchase program. The share repurchase program authorizes the Company, in management’s discretion, to repurchase Common Stock from time to time for an aggregate purchase price up to $ 500 million (exclusive of any fees, taxes, commissions or other expenses related to such repurchases), subject to market conditions and other factors. The actual timing, number and value of shares repurchased under the program will be determined by management in its discretion and will depend on a number of factors, including, but not limited to, the market price of the Common Stock and general market and economic conditions. The Company repurchased 66,601 shares during first quarter of fiscal 2026 under the share repurchase program. As of August 29, 2026, the Company had remaining authorization to purchase up to $ 315.7 million under the repurchase program. Subsequent to August 29, 2026, the Company repurchased 204,888 shares under the repurchase program for $ 14.9 million. Note 7 - Net Income (Loss) per Common Share Basic net income (loss) per share attributable to Cal -Maine Foods, Inc. is based on the weighted average shares of Common Stock outstanding. Diluted net income per share attributable to Cal -Maine Foods, Inc. is based on weighted-average shares of Common Stock outstanding during the relevant period adjusted for the dilutive effect of share -based awards. Restricted shares of 110 thousand were antidilutive due to the net loss for the first thirteen weeks of fiscal 2027. These shares were not included in the diluted net loss per share calculation. The following table provides a reconciliation of the numerators and denominators used to determine basic and diluted net income per common share attributable to Cal-Maine Foods, Inc. (amounts in thousands, except per share data): Thirteen Weeks Ended August 29, 2026 August 30, 2025 Numerator Net income (loss) $ ( 56,204 ) $ 199,107 Less: Income (loss) attributable to noncontrolling interest 2,411 ( 233 ) Net income (loss) attributable to Cal -Maine Foods, Inc. $ ( 58,615 ) $ 199,340 Denominator Weighted-average common shares outstanding, basic 46,703 48,281 Effect of dilutive restricted shares — 143 Weighted-average common shares outstanding, diluted 46,703 48,424 Net income (loss) per common share attributable to Cal -Maine Foods, Inc. Basic $ ( 1.26 ) $ 4.13 Diluted $ ( 1.26 ) $ 4.12 Index 13 Note 8 - Stock Based Compensation Restricted Stock Total stock-based compensation expense related to the restricted stock was $ 1.3 million for both the thirteen weeks ended August 29, 2026 and August 30, 2025 , respectively. Unrecognized compensation expense as a result of non-vested shares of equity-based awards outstanding under the Amended and Restated 2012 Omnibus Long-Term Incentive Plan at August 29, 2026 of $ 7.8 million will be recorded over a weighted average period of 1.9 years. Refer to Part II Item 8, Notes to Consolidated Financial Statements and Supplementary Data, Note 13 – Stock -Based Compensation in our 2026 Annual Report for further information on our stock compensation plans. The Company’s equity-based award activity for the thirteen weeks ended August 29, 2026 was as follows: Number of Shares Weighted Average Grant Date Fair Value Outstanding, May 30, 2026 209,002 $ 75.42 Granted 3,299 79.31 Vested ( 3,370 ) 74.87 Forfeited ( 1,190 ) 81.85 Outstanding, August 29, 2026 207,741 $ 75.45 Performance-Based Long-Term Incentive Awards Total compensation expense as a result of the performance-based program was $ 237 thousand and $ 78 thousand for the thirteen weeks ended August 29, 2026 and August 30, 2025, respectively. Our unrecognized compensation expense as a result of non-vested shares in the performance-based program was $ 2.2 million at August 29, 2026 . The unrecognized compensation expense will be amortized to stock compensation expense over a period of 2.5 years. Refer to Part II Item 8, Notes to Consolidated Financial Statements and Supplementary Data, Note 13 – Stock-Based Compensation in our 2026 Annual Report for further information on our performance -based program. A summary of our activity and related information for our performance-based awards is as follows: Number of Shares Weighted Average Grant Date Fair Value Outstanding, May 30, 2026 9,260 $ 101.95 Granted 21,183 80.08 Outstanding, August 29, 2026 30,443 $ 86.73 Note 9 – Segment Reporting The Company previously managed its business as one operating and reportable segment. Effective in the fourth quarter of fiscal 2026, the Company revised its internal reporting to change the manner in which its business is managed, which reflects a focus on managing its operations based on the Company’s product categories rather than on a consolidated basis. As a result, the Company now has three reportable segments: Conventional Shell Eggs, Specialty Shell Eggs, and Prepared Foods. The Company’s remaining operations, which include co-pack shell eggs, egg products, hard -cooked eggs and other business activities, are not reportable segments, as defined by the applicable accounting standard. All prior fiscal year periods have been recast to reflect the new reportable segments. Conventional Shell Eggs The Conventional Shell Eggs segment consists primarily of the production, grading, packaging, marketing and distribution of shell eggs sold as conventional shell eggs, which includes our brands Sunups® and Sunny Meadow®. Index 14 Specialty Shell Eggs The Specialty Shell Eggs segment consists primarily of the production, grading, packaging, marketing and distribution of shell eggs sold as cage-free, nutritionally enhanced, organic, brown, pasture -raised and free-range eggs. This segment includes our brands Farmhouse Eggs ® and 4Grain® as well as branded products from our membership of Eggland’s Best, Inc. cooperative which includes Egg-Land’s Best® and Land O’ Lakes®. Prepared Foods The Prepared Foods segment consists primarily of the production, packaging, marketing and distribution of prepared foods offerings such as pre-cooked egg patties, omelets, folded and scrambled egg formats, pancakes, waffles, and specialty wraps. This segment includes our brands Van’s® and Crepini®. The Company’s operating segments are determined on the basis of our organizational structure and information that is regularly reviewed by our Chief Operating Decision Maker (“CODM”). The Company’s CODM is Sherman Miller, President and Chief Executive Officer. Segment income is utilized during our forecasting process to assess profitability, strategic initiatives and capital investments. The CODM primarily compares actual performance of segment sales and segment income to prior period results and periodic forecasts to assist with assessing performance and deciding how to allocate resources. The accounting policies of the segments are generally the same as those presented in Note 1 - Summary of Significant Accounting Policies in the 2026 Annual Report. Segment selling, general and administrative (“SG&A”) expenses represents direct costs associated with each segment for marketing, delivery and employee costs. Other – segment income represents the total segment income from other operating segments such as co-pack shell egg, egg products, hard -cooked eggs and other business activities that do not individually meet the quantitative thresholds for separate disclosure. Unallocated Corporate SG&A represents overhead such as corporate payroll related expenses, legal and professional fees, amortization and other expenses that are not used to measure segment income and is managed at the corporate office. Intersegment sales represent sales between segments as part of our vertical integration. Intersegment sales from the Conventional and Specialty Shell Eggs segments are primarily sales related to our non -reportable egg products or hard -cooked segments. Conventional and Specialty Shell Eggs intersegment sales are transferred at discounted fixed rates to account for undergrades and yield loss, market rates, or at production costs. The Company does not report total assets by segment as operations are highly integrated, and assets are shared amongst segments. The CODM does not assess performance or allocate resources based on segment assets. Segment results, including the significant expense categories regularly provided to the CODM, are provided below (in thousands): Thirteen Weeks Ended August 29, 2026 Conventional Shell Eggs Specialty Shell Eggs Prepared Foods Total Reportable Segments Net sales - external customers $ 191,859 $ 229,112 $ 62,995 $ 483,966 Intersegment sales 9,824 7,820 — 17,644 Total segment sales 201,683 236,932 62,995 501,610 Segment cost of sales 250,481 197,623 48,346 496,450 Segment SG&A 22,247 24,372 6,807 53,426 Segment income (loss) $ ( 71,045 ) $ 14,937 $ 7,842 $ ( 48,266 ) Other - segment loss ( 8,374 ) Unallocated corporate SG&A ( 24,609 ) Loss on disposal of fixed assets ( 916 ) Operating loss ( 82,165 ) Other income, net 7,969 Loss before income taxes $ ( 74,196 ) Index 15 Thirteen Weeks Ended August 30, 2025 Conventional Shell Eggs Specialty Shell Eggs Prepared Foods Total Reportable Segments Net sales - external customers $ 486,523 $ 269,579 $ 72,368 $ 828,470 Intersegment sales 11,910 6,011 — 17,921 Total segment sales 498,433 275,590 72,368 846,391 Segment cost of sales 312,205 184,575 53,471 550,251 Segment SG&A 17,992 26,819 5,676 50,487 Segment income $ 168,236 $ 64,196 $ 13,221 $ 245,653 Other - segment income 12,219 Unallocated corporate SG&A ( 16,072 ) Gain on involuntary conversions 7,488 Loss on disposal of fixed assets ( 104 ) Operating income 249,184 Other income, net 14,081 Income before income taxes $ 263,265 The following table shows the reconciliation of net sales to consolidated results (in thousands): Thirteen Weeks Ended August 29, 2026 August 30, 2025 Total reportable segments $ 483,966 $ 828,470 Other - segment sales 55,641 94,132 Total consolidated net sales $ 539,607 $ 922,602 Other – segment sales represent sales from our non-reportable segments which includes co-pack shell egg sales, egg product sales, hard-cooked eggs and other business activities. Revenue primarily derives from sales throughout the U.S. The following table provides revenue disaggregated by segment and by sales channel which includes a new industrial channel and has been recast historically (in thousands): Thirteen Weeks Ended August 29, 2026 Retail Foodservice Industrial Other Total Conventional Shell Egg $ 161,604 $ 25,600 $ 1,102 $ 3,553 $ 191,859 Specialty Shell Egg 208,611 18,396 9 2,096 229,112 Prepared Foods 37,236 20,129 5,630 — 62,995 Other - segment sales 35,367 2,069 18,088 117 55,641 $ 442,818 $ 66,194 $ 24,829 $ 5,766 $ 539,607 Thirteen Weeks Ended August 30, 2025 Retail Foodservice Industrial Other Total Conventional Shell Egg $ 407,244 $ 69,958 $ 1,342 $ 7,979 $ 486,523 Specialty Shell Egg 241,110 26,266 279 1,924 269,579 Prepared Foods 21,593 31,265 19,510 — 72,368 Other - segment sales 60,536 2,667 30,869 60 94,132 $ 730,483 $ 130,156 $ 52,000 $ 9,963 $ 922,602 Index 16 Retail customers include primarily grocery and supermarket chains, club stores and other retailers. Foodservice customers include primarily distributors and operators serving restaurants and other away -from-home food markets. Industrial customers include primarily food manufacturers and other customers that use our products as ingredients or inputs in further processing. Note 10 - Commitments and Contingencies In re Shell Eggs Litigation Since November 2025, the Company has been named as a defendant in several lawsuits filed in federal courts alleging substantially identical claims, including: (1) the following lawsuits in the Southern District of Indiana: (a) King Kullen Grocery Co., Inc. v. Cal -Maine Foods, Inc., et al., Case No. 1:25 -cv-2274, (b) Nineteenseventynine LLC d/b/a The Breakfast Joynt v. Cal -Maine Foods, Inc., et al., Case No. 1:25 -cv-2301, (c) Taylor Egg Products, Inc. v. Cal -Maine Foods, Inc., et al., Case No. 1:25-cv-2554, (d) Hudson v. Cal -Maine Foods, Inc. et al., Case No. 1:25 -cv-02573, (e) Brandon Huyler v. Cal -Maine Foods, Inc., et al., Case No. 1:26 -cv-00135, and (f) Gloria Emery, Carol Goldberg, and Casey Whalen v. Cal -Maine Foods, Inc., et al., Case No. 1:26 -cv-00193; (2) the following lawsuits in the Northern District of Illinois: (a) Birchmans Parisian, LLC (d/b/a Lisciandro's Restaurant) v. Cal -Maine Foods, Inc., et al., Case No. 1:25-cv-14030, (b) Phil-N-Cindy's Lunch, Inc. v. Cal -Maine Foods, Inc., et al., Case No. 1:25 -cv-14082, (c) Yell-O-Glow Corporation v. Cal -Maine Foods, Inc., et al., Case No. 1:25 -cv- 15084, and (d) Tariq Habash, Delia Govea, Andrew Phillips, and Catalina Torres v. Urner Barry Publications, Inc., Cal -Maine Foods, Inc., et al., Case No. 1:25 -cv-14112; (3) the following lawsuits in the Western District of Wisconsin: (a) Matthew Edlin v. Cal -Maine Foods, Inc., et al., Case No. 3:25-cv-946, (b) India Price, Lakia Session, and Karen Solomon v. Cal -Maine Foods, Inc., et al., Case No. 3:25 -cv-1016; (c) Cheesecake Funk LLC d/b/a Cheesecake Funk v. Cal -Maine Foods, Inc., et al., Case No. 3:26-cv-00400, (d) Philly Phlava Original Steaks and Hoagies, Inc. v. Cal -Maine Foods, Inc., et al., Case No. 3:26-cv-00417; (e) LPJJ LLC v. Cal -Maine Foods, Inc. et al., Case No. 3:26 -cv-00425; (f) C&L, LLC, et al. v. Cal -Maine Foods, Inc. et al., Case No. 3:26 -cv-00454; (g) Angelica Allison, et al. v. Cal -Maine Foods, Inc., et al., Case No. 3:26 -cv-00702; and (h) Gutierrez Family LLC, et al. v. Cal -Maine Foods, Inc. , et al., Case No. 3:26-md-03175; (4) a lawsuit in the Western District of Missouri: Ryan v. Cal -Maine Foods, Inc., et al., Case No. 4:25 -cv-00999; and (5) the following lawsuits in the Central District of California: (a) DenWest Restaurants, Inc., et al. v. Cal -Maine Foods, Inc., et al., Case No. 8:26 -cv-00949, and (b) DMSD Restaurants, Inc., et al. v. Cal -Maine Foods, Inc., et al., Case No. 2:26 -cv-04204. The lawsuits generally allege that the Company, along with other egg producers and industry associations, conspired to artificially inflate the prices of conventional shell eggs nationwide, primarily through manipulation of industry price benchmarks (such as the Urner Barry Egg Index and Eggs Clearinghouse, Inc. spot market), coordinated reporting and supply restrictions, particularly during the calendar year 2022 highly pathogenic avian influenza (“HPAI”) outbreak. In each case, the plaintiff seeks certification of a putative class of either direct or indirect purchasers, monetary damages, injunctive relief, attorneys’ fees, and, in some cases, restitution under Section 1 of the Sherman Act, 15 U.S.C. § 1 (the “Sherman Act”) and various state antitrust and consumer protection statutes. The above actions have been transferred to the Western District of Wisconsin for multidistrict proceedings. An initial judicial management conference took place on May 8, 2026, where the court entered an initial case management order, setting forth deadlines for the consolidated complaints and initial briefing to be filed. No discovery has taken place in any of the actions. The Company disputes plaintiffs’ allegations in each of these actions and intends to vigorously defend itself in these action s. Civil Investigative Demand In March 2025, the Company received a Civil Investigative Demand (“CID”) from the U.S. Department of Justice (“DOJ”) in connection with an antitrust investigation to determine whether there was a violation of the antitrust laws through alleged anticompetitive conduct by and among egg producers. In August 2025, the Company received a subpoena from the State of New York requesting information and documents related to its investigation of anticompetitive conduct and high egg prices in the egg industry, and in March 2026, the Company received a similar subpoena from the State of Washington related to its investigation of anticompetitive conduct and high egg prices in the egg industry. Additionally, various states’ attorneys general sought to join the DOJ’s investigation or requested access to the confidential disclosures by the Company to the DOJ. On or about June 25, 2026, the Company entered into an agreement with the DOJ and 17 states’ attorneys general to resolve the investigation, subject to applicable court approvals and procedures. On June 29, 2026, the United States and certain states filed a civil antitrust complaint against the Company alleging that the Company and certain other defendants coordinated bidding to manipulate whole benchmark prices and simultaneously filed the proposed settlement and proposed final judgments. The settlement with the United States is proceeding through the Antitrust Procedures and Penalties Act, commonly known as the Tunney Act, process that includes publication of the proposed judgment, competitive impact statement, public comment period, and eventual court review before entry of the final judgment. The Company denied all wrongdoing or violations of law and no fines or penalties were assessed against the Company. In connection with the agreement, the Company agreed to implement certain antitrust compliance and reporting measures, to donate 30 million eggs to food banks and non-profits, and paid $ 1.5 million to the settling states to resolve the matter. Index 17 The State of Washington did not join in this settlement and the Company continues to comply with the State of Washington’s subpoena and cooperate with its investigations. Management cannot predict the eventual scope, duration or outcome of the State of Washington’s investigation and is unable to estimate the amount or range of potential losses, if any, at this time. Kraft Foods Global, Inc. et al. v. United Egg Producers, Inc. et al. On September 25, 2008, the Company was named as one of several defendants in numerous antitrust cases involving the U.S. shell egg industry. The Company settled all of these cases, except for the claims of certain plaintiffs who sought substantial damages allegedly arising from the purchase of egg products (as opposed to shell eggs). These remaining plaintiffs are Kraft Food Global, Inc., General Mills, Inc., and Nestle USA, Inc. (the “Egg Products Plaintiffs”) and, until a subsequent settlement was reached as described below, The Kellogg Company. On September 13, 2019, the case with the Egg Products Plaintiffs was remanded from a multi-district litigation proceeding in the United States District Court for the Eastern District of Pennsylvania, In re Processed Egg Products Antitrust Litigation, MDL No. 2002, to the United States District Court for the Northern District of Illinois, Kraft Foods Global, Inc. et al. v. United Egg Producers, Inc. et al., Case No. 1:11 -cv-8808, for trial. The Egg Products Plaintiffs alleged that the Company and other defendants violated Section 1 of the Sherman Act, by agreeing to limit the production of eggs and thereby illegally raise the prices that plaintiffs paid for processed egg products. In particular, the Egg Products Plaintiffs attacked certain features of the United Egg Producers animal -welfare guidelines and program used by the Company and many other egg producers. On October 24, 2019, the Company entered into a confidential settlement agreement with The Kellogg Company dismissing all claims against the Company for an amount that did not have a material impact on the Company’s financial condition or results of operations. On November 11, 2019, a stipulation for dismissal was filed with the court, and on March 28, 2022, the court dismissed the Company with prejudice. The trial of this case began on October 17, 2023. On December 1, 2023, the jury returned a decision awarding the Egg Products Plaintiffs $ 17.8 million in damages. On November 6, 2024, the court entered a final judgment against the Company and other defendants, jointly and severally, totaling $ 43.6 million after trebling. On December 4, 2024, the Company filed a renewed motion for judgment as a matter of law or for a new trial, and a motion to alter or amend the judgment. On December 13, 2024, the court granted defendants’ November 20, 2024 motion to stay enforcement of the judgment and entered an agreed order requiring the defendants to post security during post -judgment proceedings and appeal, and stayed proceedings to enforce the judgment until the disposition of the post -judgment motions and ultimate appeals. On December 17, 2024, the Company posted a bond in the approximate amount of $ 23.9 million, representing a portion of the total bond required to preserve the right to appeal the trial court’s decision. Another defendant posted a bond for the remaining amount. On November 19, 2025, the plaintiffs filed a motion to lift stay of proceedings on attorney’s fees and costs, and on December 5, 2025, the defendants filed their response in opposition to such motion. The court has not ruled on this motion. The Company intends to continue to vigorously defend the claims asserted by the Egg Products Plaintiffs. If the jury’s decision is ultimately upheld, the Company would be jointly and severally liable with other defendants for treble damages, or $ 43.6 million, subject to credit for certain settlements with previous settling defendants, plus the Egg Product Plaintiffs’ reasonable attorneys’ fees. During our second quarter of fiscal 2024, we recorded an accrued expense of $ 19.6 million in selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Operations and classified as other noncurrent liabilities in the Company’s Condensed Consolidated Balance Sheets. Although less than the bond posted by the Company, the accrual represents our estimate of the Company’s proportional share of the reasonably possible ultimate damages award, excluding the Egg Product Plaintiffs’ attorneys’ fees that we believe would be approximately offset by the credits noted above. We have entered into a judgment allocation and joint defense agreement with the other defendants remaining in the case. Our accrual may change in the future to the extent we are successful in further proceedings in the litigation. State of Oklahoma Watershed Pollution Litigation On June 18, 2005, the State of Oklahoma filed suit, in the United States District Court for the Northern District of Oklahoma, against Cal -Maine Foods, Inc. and Tyson Foods, Inc., Cobb-Vantress, Inc., Cargill, Inc., George’s, Inc., Peterson Farms, Inc. and Simmons Foods, Inc., and certain of their affiliates. The State of Oklahoma claims that through the disposal of chicken litter the defendants polluted the Illinois River Watershed. This watershed provides water to eastern Oklahoma. The complaint sought injunctive relief and monetary damages, but the claim for monetary damages was dismissed by the court. Cal -Maine Foods, Inc. discontinued operations in the watershed in or around 2005. Since the litigation began, Cal -Maine Foods, Inc. purchased 100 % of the membership interests of Benton County Foods, LLC, which is an ongoing commercial shell egg operation within the Illinois River Watershed. Benton County Foods, LLC is not a defendant in the litigation. We also have a number of small contract producers that operate in the area. Index 18 The non-jury trial in the case began in September 2009 and concluded in February 2010. On January 18, 2023, the court entered findings of fact and conclusions of law in favor of the State of Oklahoma. The court found the defendants jointly and severally liable for state law nuisance, federal common law nuisance, and state law trespass. The court also found the producers vicariously liable for the actions of their contract producers. On June 12, 2023, the court ordered the parties to mediate, but the mediation was unsuccessful. On June 26, 2024, the district court denied defendants’ motion to dismiss the case. On September 13, 2024, a status hearing was held and the court scheduled an evidentiary hearing for December 3, 2024, to determine whether any legal remedy is available based on the now 15-year -old record and changed circumstances of the Illinois River Watershed (the “IRW”). On December 9, 2025, the court entered a final judgment imposing approximately $ 420,000 in total penalties for all defendants and awarding certain non-monetary remedies, including injunctive relief. Pursuant to the final judgment, the Company is to pay approximately $ 70,000 in penalties. The judgment also entitles the State of Oklahoma to an award of attorneys’ fees and costs in an amount to be determined at a later date. The injunctive relief provides for, among other things, a special master to oversee an investigation, develop a remediation plan subject to court approval, and provide ongoing monitoring of remediation projects, the costs of which will be paid jointly and severally by the defendants. The defendants are required to fund $ 10 million within 5 days of appointment of the special master, and ongoing funding requirements of $ 5 million any time the fund is below $ 5 million. This funding obligation is expected to continue for the 30 years term. The defendants are in discussions of a potential expense sharing agreement; however, the Company does not currently expect to have a material share of the funding. The injunctive relief also includes certain annual reporting requirements and certain requirements on future operations within the IRW , including relating to removal of litter, storage, transportation, disposal and future land applications. On January 2, 2026, the Company filed its notice of appeal to the United States Court of Appeals for the Tenth Circuit. On January 16, 2026, the district court stayed the monetary portions of the judgment but declined to stay the injunctive portions. Effective July 10, 2026, the Company and all other defendants entered into a settlement agreement with the State of Oklahoma that provides for the payment of funds by the defendants into an environmental relief fund, certain restrictions on the application of chicken litter in the IRW and certain reporting and reporting measures. On July 15, 2026 , the State of Oklahoma and all defendants filed an unopposed joint motion for a stay in light of the settlement and an unopposed joint motion to vacate judgment. On August 17, 2026, the appeals court denied the parties’ motion to vacate the trial court’s judgment and remanded the matter back to the trial court without prejudice , and granted the motion to stay pending further order of the court. The settlement remains subject to applicable court approvals and procedures and is not expected to have a material impact on the Company’s financial condition or results of operations. Other Matters In addition to the above, the Company is involved in various other claims and litigation incidental to its business. Although the outcome of these matters cannot be determined with certainty, management, upon the advice of counsel, is of the opinion that the final outcome should not have a material effect on the Company’s consolidated results of operations or financial position. Note 11 - Subsequent Events On August 31, 2026, the Company, as borrower, and certain of its wholly-owned direct and indirect domestic subsidiaries, as guarantors, entered into a Second Amended and Restated Credit Agreement effective as of that date (the “Credit Agreement”), which amend ed and restate d the Company’s prior Amended and Restated Credit Agreement , dated November 15, 2021 (as amended from time to time) . The Credit Agreement provides for a senior unsecured revolving credit facility in an initial aggregate principal amount of up to $ 250 million (the “Revolver”), including a $ 25 million sublimit for the issuance of standby letters of credit and a $ 25 million sublimit for swingline loans (collectively, the “Credit Facility”). The Credit Facility also includes an accordion feature permitting the Company, with the consent of the administrative agent, to increase the Credit Facility by up to $ 250 million in the aggregate with one or more incremental senior term loans or an increase in the revolving commitments under the Revolver. The Credit Facility has a term of five years and will mature on August 31, 2031 . Borrowings under the Credit Facility bear interest, at the Company’s election, based on either the Term SOFR Rate plus the Applicable Margin or the Base Rate plus the Applicable Margin, each as defined in the Credit Agreement. The Credit Agreement contains customary affirmative and negative covenants, including financial covenants requiring (i) a maximum Total Funded Debt to Capitalization Ratio tested quarterly of no greater than 50 % and (ii) maintenance of Minimum Tangible Net Worth at all times of $ 1.5 billion plus 50 % of consolidated net income (if net income is positive), less permitted restricted payments for each fiscal quarter after May 30, 2026. Index 19