UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(mark one)

☑þ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~August 27, 2016~~

September 2, 2017

☐¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ____________ to ____________

Commission File Number: 000-04892

CAL-MAINE FOODS, INC.

(Exact name of registrant as specified in its charter)


~~Delaware~~		~~64-0500378~~
Delaware		64-0500378
(State or other jurisdiction of incorporation or organization)		(I.R.S Employer Identification No.)

3320 Woodrow Wilson Avenue, Jackson, Mississippi 39209

(Address of principal executive offices)~~(Zip~~ (Zip Code)

(601) 948-6813

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ þ No☐¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes~~Yes~~ ☑ þ No☐¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” ~~and~~, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large Accelerated filer☑þ		Accelerated filer ☐¨

Non – Accelerated filer☐¨ (Do not check if a smaller reporting company)		Smaller reporting company¨
		Emerging growth company ☐¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes☐¨ No ☑þ

There were ~~43,730,931~~43,772,428 shares of Common Stock, $0.01 par value, and 4,800,000 shares of Class A Common Stock, $0.01 par value, outstanding as of September ~~23, 2016.~~

29, 2017.

Index

CAL-MAINE FOODS, INC.AND SUBSIDIARIES

FORM 10-Q

INDEX

FOR THE QUARTERENDED ~~AUGUST 27, 2016~~

SEPTEMBER 2, 2017


			~~Page Number~~
~~Part I.~~		~~Financial Information~~	Page Number
Part I.		Financial Information

	Item 1.	Condensed Consolidated Financial Statements (Unaudited)

		Condensed Consolidated Balance Sheets - ~~August 27, 2016~~ September 2, 2017 and ~~May 28, 2016~~June 3, 2017	2

		Condensed Consolidated Statements of Operations - Thirteen Weeks Ended September 2, 2017 and August 27, 2016 ~~and August 28, 2015~~	3

		Condensed Consolidated Statements of Comprehensive Income - Thirteen Weeks Ended September 2, 2017 and August 27, 2016 ~~and August 28, 2015~~	4

		Condensed Consolidated Statements of Cash Flow - Thirteen Weeks Ended September 2, 2017 and August 27, 2016 ~~and August 28, 2015~~	5

		Notes to Condensed Consolidated Financial Statements	6

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12 11

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20

	Item 4.	Controls and Procedures	20 21

Part II.		Other Information

	Item 1.	Legal Proceedings	21

	Item 1A.	Risk Factors	23 24

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23 24

	Item 6.	Exhibits	24

	Signatures		25

Index

PART I. FINANCIALINFORMATION

ITEM 1. FINANCIAL STATEMENTS

CAL-MAINE FOODS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

August 27, 2016

May 28, 2016

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$
37,646

$
29,046
Investment securities available-for-sale

269,202

360,499
Trade and other receivables (less allowance for doubtful accounts of

$944 and $727 at August 27, 2016 and May 28, 2016, respectively)

74,099

67,448
Income tax receivable

34,855

11,830
Inventories

154,621

154,799
Prepaid expenses and other current assets

3,530

2,661
Total current assets

573,953

626,283

Property, plant and equipment, net

404,787

392,274
Goodwill

29,196

29,196
Other investments

58,483

53,975
Other intangible assets

4,642

4,958
Other assets

4,911

5,079
TOTAL ASSETS

$
1,075,972

$
1,111,765

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued expenses

$
59,223

$
67,131
Current maturities of long-term debt

15,915

16,320
Total current liabilities

75,138

83,451

Long-term debt, less current maturities

8,125

9,250
Other noncurrent liabilities

6,380

6,321
Deferred income taxes

98,902

95,382
Total liabilities

188,545

194,404

Commitments and Contingencies - see Note 4

Stockholders’ equity:

Common stock, $0.01 par value, 120,000 and 70,261 shares authorized and issued

    at August 27,  2016 and May 28, 2016, respectively

   43,733 and 43,737 shares outstanding at August 27, 2016 and May 28, 2016, respectively

703

703
Class A convertible common stock, $.01 par value, 4,800 shares authorized, issued

    and outstanding at August 27, 2016 and May 28, 2016, respectively

48

48
Paid-in capital

47,254

46,404
Retained earnings

859,504

890,440
Accumulated other comprehensive income (loss), net of tax

263

(48)
Common stock in treasury at cost – 26,527 and 26,524 shares at August 27, 2016

and May 28, 2016, respectively

(22,314)

(22,272)
Total Cal-Maine Foods, Inc. stockholders’ equity

885,458

915,275
Noncontrolling interest in consolidated entities

1,969

2,086
Total stockholders’ equity

887,427

917,361
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$
1,075,972

$
1,111,765



	September 2, 2017			June 3, 2017
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	18,943		$	17,564
Investment securities available-for-sale	107,028			138,462
Trade and other receivables (less allowance for doubtful accounts of
$435 and $386 at September 2, 2017 and June 3, 2017, respectively)	75,626			64,509
Income tax receivable	55,970			52,691
Inventories	159,226			160,692
Prepaid expenses and other current assets	3,753			2,288
Total current assets	420,546			436,206
Property, plant and equipment, net	452,099			458,184
Other investments	69,435			69,296
Goodwill	35,525			35,525
Other intangible assets, net	28,590			29,149
Other assets	4,833			4,734
TOTAL ASSETS	$	1,011,028		$	1,033,094
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	58,386		$	59,853
Current maturities of long-term debt	4,683			4,826
Total current liabilities	63,069			64,679
Long-term debt, less current maturities	5,048			6,113
Other noncurrent liabilities	7,565			7,527
Deferred income taxes	105,881			110,282
Total liabilities	181,563			188,601

Commitments and Contingencies - see Note 4

Stockholders’ equity:
Common stock, $0.01 par value, 120,000 and 70,261 shares authorized and issued
at September 2, 2017 and June 3, 2017, respectively, and 43,773 and 43,777
shares outstanding at September 2, 2017 and June 3, 2017, respectively	703			703
Class A convertible common stock, $.01 par value, 4,800 shares authorized, issued
and outstanding at September 2, 2017 and June 3, 2017, respectively	48			48
Paid-in capital	50,792			49,932
Retained earnings	800,053			816,046
Accumulated other comprehensive loss, net of tax	(96		)	(128		)
Common stock in treasury at cost – 26,488 and 26,484 shares at September 3, 2017
and June 3, 2017, respectively	(23,936		)	(23,914		)
Total Cal-Maine Foods, Inc. stockholders’ equity	827,564			842,687
Noncontrolling interest in consolidated entities	1,901			1,806
Total stockholders’ equity	829,465			844,493
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,011,028		$	1,033,094

See Notes to Condensed Consolidated Financial Statements.

Index

CAL-MAINE FOODS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATEDSTATEMENTSOFOPERATIONS

(in thousands, except per share amounts)

(unaudited)

13 Weeks Ended

August 27, 2016

August 29, 2015
Net sales

$
239,845

$
609,895
Cost of sales

249,414

346,824
Gross profit (loss)

(9,569)

263,071
Selling, general, and administrative expense

40,256

42,963
Operating income (loss)

(49,825)

220,108
Other income (expense):

Interest income, net

1,091

27
Royalty income

406

606
Equity in income of affiliates

191

730
Other, net

(403)

(814)

1,285

549

Income (loss) before income taxes and noncontrolling interest

(48,540)

220,657
Income tax expense (benefit)

(17,560)

76,567
Net income (loss) before noncontrolling interest

(30,980)

144,090
Less: Net income (loss) attributable to noncontrolling interest

(44)

1,067
Net income (loss) attributable to Cal-Maine Foods, Inc.

$
(30,936)

$
143,023

Net income (loss) per common share attributable to Cal-Maine Foods, Inc.:

    Basic

$
(0.64)

$
2.97
    Diluted

$
(0.64)

$
2.95
Dividends per common share

$
-

$
0.983
Weighted average shares outstanding:

    Basic

48,249

48,163
    Diluted

48,249

48,498



	13 Weeks Ended
	September 2, 2017			August 27, 2016
Net sales	$	262,845		$	239,845
Cost of sales	245,509			249,414
Gross profit (loss)	17,336			(9,569		)
Selling, general, and administrative expense	41,710			40,256
Loss on disposal of fixed assets	4			525
Operating loss	(24,378		)	(50,350		)
Other income (expense):
Interest income, net	474			1,091
Royalty income	278			406
Equity in income (loss) of affiliates	(353		)	191
Other, net	(538		)	122
Total other income (loss)	(139		)	1,810

Loss before income taxes and noncontrolling interest	(24,517		)	(48,540		)
Income tax benefit	8,340			17,560
Net loss before noncontrolling interest	(16,177		)	(30,980		)
Less: Net loss attributable to noncontrolling interest	(184		)	(44		)
Net loss attributable to Cal-Maine Foods, Inc.	$	(15,993	)	$	(30,936	)

Net loss per common share attributable to Cal-Maine Foods, Inc.:
Basic	$	(0.33	)	$	(0.64	)
Diluted	$	(0.33	)	$	(0.64	)
Weighted average shares outstanding:
Basic	48,330			48,249
Diluted	48,330			48,249

See Notes to Condensed Consolidated Financial Statements.

Index

CAL-MAINE FOODS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OFCOMPREHENSIVEINCOME(LOSS)

(in thousands)

(unaudited)

13 Weeks Ended

August 27, 2016

August 29, 2015
Net income (loss), including noncontrolling interests

$
(30,980)

$
144,090

Other comprehensive income (loss), before tax:

Unrealized holding gain (loss) on available-for-sale securities, net of reclassification adjustments

502

(300)

Income tax benefit (expense) related to items of other comprehensive income

(191)

120

Other comprehensive income (loss), net of tax

311

(180)

Comprehensive income (loss)

(30,669)

143,910

Less: comprehensive income (loss) attributable to the noncontrolling interest

(44)

1,067

Comprehensive income (loss) attributable to Cal-Maine Foods, Inc.

$
(30,625)

$
142,843



	13 Weeks Ended
	September 2, 2017			August 27, 2016
Net loss, including noncontrolling interests	$	(16,177	)	$	(30,980	)

Other comprehensive income (loss), before tax:

Unrealized holding gain on available-for-sale securities, net of reclassification adjustments	51			502

Income tax expense related to items of other comprehensive income	(19		)	(191		)

Other comprehensive gain, net of tax	32			311

Comprehensive loss	(16,145		)	(30,669		)

Less: comprehensive loss attributable to the noncontrolling interest	(184		)	(44		)

Comprehensive loss attributable to Cal-Maine Foods, Inc.	$	(15,961	)	$	(30,625	)

See Notes to Condensed Consolidated Financial Statements.

Index

CAL-MAINE FOODS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATEDSTATEMENTSOF CASH FLOWS

(in thousands)

(unaudited)

13 Weeks Ended

August 27, 2016

August 29, 2015
Operating activities:

Net income (loss) including noncontrolling interest

$
(30,980)

$
144,090
Depreciation and amortization

11,159

11,061
Other adjustments, net

(25,626)

(1,036)
Net cash provided by (used in) operations

(45,447)

154,115

Investing activities:

Purchase of investments

(9,008)

(80,668)
Sales of investments

92,833

43,942
Investment in joint ventures

(5,500)

(18,000)
Purchases of property, plant and equipment

(23,895)

(15,266)
Payments received on notes receivable and from affiliates

1,250

107
Net proceeds from disposal of property, plant and equipment

10

171
Net cash provided by (used in) investing activities

55,690

(69,714)

Financing activities:

Purchase of common stock by treasury

(40)

-
Distributions to noncontrolling interests

(73)

(10)
Principal payments on long-term debt

(1,530)

(8,310)
Payments of dividends

-

(15,380)
Net cash used in financing activities

(1,643)

(23,700)
Net change in cash and cash equivalents

8,600

60,701

Cash and cash equivalents at beginning of period

29,046

8,667
Cash and cash equivalents at end of period

$
37,646

$
69,368



	13 Weeks Ended
	September 2, 2017			August 27, 2016
Operating activities:
Net loss including noncontrolling interest	$	(16,177	)	$	(30,980	)
Depreciation and amortization	13,137			11,159
Other adjustments, net	(18,447		)	(25,626		)
Net cash used in operations	(21,487		)	(45,447		)

Investing activities:
Purchase of investments	(2,653		)	(9,008		)
Sales of investments	34,104			92,833
Investment in joint ventures	(1,200		)	(5,500		)
Purchases of property, plant and equipment	(6,517		)	(23,895		)
Payments received on notes receivable and from affiliates	8			1,250
Net proceeds from disposal of property, plant and equipment	74			10
Net cash provided by investing activities	23,816			55,690

Financing activities:
Purchase of common stock by treasury	(21		)	(40		)
Contributions from (distributions to) noncontrolling interests	279			(73		)
Principal payments on long-term debt	(1,208		)	(1,530		)
Net cash used in financing activities	(950		)	(1,643		)
Net change in cash and cash equivalents	1,379			8,600

Cash and cash equivalents at beginning of period	17,564			29,046
Cash and cash equivalents at end of period	$	18,943		$	37,646

See Notes to Condensed Consolidated Financial Statements.

Index

CAL-MAINE FOODS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 2, 2017

~~August 27, 2016~~

(unaudited)

1. Presentation of Interim Information

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of the results for the interim periods presented have been included. The preparation of condensed consolidated financial statements requires us to make estimates and assumptions. These estimates and assumptions affected reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and assumptions. Operating results for the thirteen weeks ended ~~August 27, 2016~~September 2, 2017 are not necessarily indicative of the results that may be expected for the year ending June ~~3, 2017.~~

2, 2018.

The condensed consolidated balance sheet at ~~May 28, 2016 has been~~June 3, 2017 was derived from the audited consolidated financial statements at that date. It does not include all of the information and footnotes required by GAAP for complete financial statements.

��

For further information, refer to the consolidated financial statements and footnotes thereto included in Cal-Maine Foods, Inc.'s annual report on Form 10-K for the fiscal year ended ~~May 28, 2016.~~June 3, 2017. References to “we,” “us,” “our,” or the “Company” refer to Cal-Maine Foods, Inc.

2. Stock Based Compensation

Total stock based compensation expense for the thirteen weeks ended September 2, 2017 and August 27, 2016 was $859,000 and ~~August 29, 2015 was~~ $848,000, ~~and $700,000,~~ respectively.

Unrecognized compensation expense as a result of non-vested shares of the 2012 Omnibus Long-Term Incentive Plan at ~~August 27, 2016~~September 2, 2017 was ~~$4.8~~$4.9 million and will be recorded over a weighted average period of 1.9 years. Refer to Note 1110 of our ~~May 28, 2016~~June 3, 2017 audited financial statements for further information on our stock compensation plans.

At ~~August 27, 2016,~~September 2, 2017, there were ~~283,800~~243,150 restricted shares outstanding, with a weighted average grant date fair value of ~~$35.99~~$42.76 per share. ~~A summary of the~~The Company’s restricted share activity for the thirteen weeks ended ~~August 27, 2016~~September 2, 2017 follows:

Number of Shares

Weighted Average Grant Date Fair Value
Outstanding, May 28, 2016

288,900

$
35.97
Vested

(2,960)

29.41
Forfeited

(2,140)

41.64
Outstanding, August 27, 2016

283,800

$
35.99



	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding, June 3, 2017	247,735		$	42.76
Granted	—		—
Vested	(1,750	)	42.10
Forfeited	(2,835	)	42.94
Outstanding, September 2, 2017	243,150		$	42.76

~~Index~~

3. Inventories

Inventories consisted of the following (in thousands):

August 27, 2016

May 28, 2016
Flocks

$
98,355

$
94,312
Eggs

12,072

11,519
Feed and supplies

44,194

48,968

$
154,621

$
154,799

Index



	September 2, 2017		June 3, 2017
Flocks	$	97,108	$	98,059
Eggs and egg products	14,697		14,911
Feed and supplies	47,421		47,722
	$	159,226	$	160,692

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 September 2, 2017, consisted of approximately 9.1 million pullets and breeders and 36.7 million layers.

4. Contingencies

Financial Instruments

The Company maintained ~~cash collateralized~~ standby letters of credit (“LOC”) ~~for the benefit of certain insurance companies~~ totaling ~~$3.7~~$4.2 million at ~~August 27, 2016.~~September 2, 2017. The LOCs are collateralized with cash ~~collateralizing the LOCs~~which is included in the line item “Other assets” in the Condensed Consolidated Balance Sheets. ~~As a result, none~~The outstanding LOCs are for the benefit of ~~the LOCs~~certain insurance companies, and are not recorded as a liability on the consolidated balance sheets.

LegalContingencies

The Company is a defendant in certain legal actions, and intends to vigorously defend its position in these actions. If the Company’s assessmentof a contingency indicatesit is probable a material loss has been incurred and the amount of the liability can be reasonably estimated,the estimated liability isaccrued in the Company’s financial statements. If the assessment indicatesa potential material loss contingency is not probable, but is reasonably possible, or probable but cannot be reasonably estimated, then the nature of the contingent liability, together with an estimate of the possible loss or range of possible loss will be disclosed, or a statement will be made that such an estimate cannot be made.

These legal actions are discussed in detail at Part II, Item 1, of this report.

Index

5. Net ~~Income~~Loss per Common Share

Basic net ~~income~~loss per share was calculated by dividing net ~~income~~loss by the weighted-average number of common shares outstanding during the period. Diluted net ~~income~~loss per share was calculated by dividing net ~~income~~loss by the weighted-average number of common shares outstanding during the period plus the dilutive effects of options and restricted stock. Due to the net loss in the ~~first quarter of fiscal~~thirteen weeks ended September 2, 2017 and August 27, 2016, restricted shares in the amount of 112,353 and 140,551, respectively, were excluded from the calculation of diluted ~~earnings~~net loss per share because their inclusion would have been antidilutive. The computations of basic and diluted net ~~income~~loss per share attributable to the Company are as follows (in thousands, except per share data):

13 Weeks Ended

August 27, 2016

August 29, 2015
Net income (loss) attributable to

Cal-Maine Foods, Inc.

$
(30,936)

$
143,023

Basic weighted-average common shares

48,249

48,163
Effect of dilutive securities:

Restricted shares

-

335
Dilutive potential common shares

48,249

48,498

Net income (loss) per common share

attributable to Cal-Maine Foods, Inc.:

Basic

$
(0.64)

$
2.97
Diluted

$
(0.64)

$
2.95



	13 Weeks Ended
	September 2, 2017			August 27, 2016
Net loss attributable to Cal-Maine Foods, Inc.	$	(15,993	)	$	(30,936	)

Basic weighted-average common shares	48,330			48,249
Effect of dilutive securities:
Restricted shares	—			—
Dilutive potential common shares	48,330			48,249

Net loss per common share attributable to Cal-Maine Foods, Inc.:
Basic	$	(0.33	)	$	(0.64	)
Diluted	$	(0.33	)	$	(0.64	)

6. Accrued Dividends Payable and Dividends per Common Share

We make an accrual of dividends payable at the end of each quarter according to the Company’s dividend policy adopted by its Board of Directors. ~~According to the policy, the~~The Company pays a dividend to shareholders of its Common Stock and Class A 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 generally accepted accounting principles in an amount equal to one-third (1/3) of such quarterly income. Dividends are paid to shareholders 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 ~~will pay~~pays dividends to shareholders 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 last quarter for which a dividend was paid. Therefore, the Company did not pay a dividend with respect to the fourth quarter of fiscal 2016, or any quarter of fiscal 2017, and will not pay a dividend for the first quarter of fiscal 2018. At ~~August 27, 2016,~~September 2, 2017, cumulative losses that must be recovered prior to paying a dividend were ~~$31.3~~$90.6 million. When applicable, the amount of the accrual appears on the Condensed Consolidated Balance Sheets as “Accrued dividends payable.”

~~Index~~

~~On our condensed consolidated statement of income, we determine dividends per common share in accordance with the computation in the following table (in thousands, except per share data):~~

13 Weeks Ended

August 27, 2016

August 29, 2015

Net income (loss) attributable to Cal-Maine Foods, Inc. available for dividend
$
(30,936)

$
143,023

1/3 of net income attributable to Cal-Maine Foods, Inc.

-

47,674

Common stock outstanding (shares)

43,733

43,698

Class A common stock outstanding (shares)

4,800

4,800

Total common stock outstanding (shares)

48,533

48,498

Dividends per common share*
$
-

$
0.983

*Dividends per common share = 1/3 of Net income (loss) attributable to Cal-Maine Foods, Inc. available for dividend ÷ Total common stock outstanding (shares)

7. 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~~

~~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~~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

Index

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

The ~~disclosure~~disclosures of fair value of certain financial assets and liabilities that are recorded at cost are as follows:

Cash and cash equivalents: The carrying amount approximates fair value due to the short maturity of these instruments.

Long-term debt: The carrying value of the Company’s long-term debt is at its stated value. We have not elected to carry our long-term debt at fair value. Fair values for debt are based on quoted market prices or published forward interest rate curves, which are level 2 inputs. Estimated fair values are management’s estimate, which is a level 3 input; however, when there is no readily available market data, the estimated fair values may not represent the amounts that could be realized in a current transaction, and the fair values could change significantly. The fair value and carrying value of the Company’s borrowings under its long-term debt were as follows (in thousands):

August 27, 2016

May 28, 2016

Carrying Value

Fair Value

Carrying Value

Fair Value
5.4% – 6.4% Notes payable
$
24,040

$
24,192

$
25,570

$
25,824

$
24,040

$
24,192

$
25,570

$
25,824



	September 2, 2017				June 3, 2017
	Carrying Value		Fair Value		Carrying Value		Fair Value
5.4% – 6.2% Notes payable	$	8,125	$	8,161	$	9,250	$	9,295
Long-term leases	1,606		1,445		1,689		1,520
	$	9,731	$	9,606	$	10,939	$	10,815

~~Index~~

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 financial assets and liabilities measured at fair value on a recurring basis as of ~~August 27, 2016~~September 2, 2017 and ~~May 28, 2016~~June 3, 2017 (in thousands):

Total
August 27, 2016

Level 1

Level 2

Level 3

Balance
Assets

US government and agency obligations

$
-

$
18,596

$
-

$
18,596
Municipal bonds

-

68,049

-

68,049
Corporate bonds

-

168,421

-

168,421
Foreign government obligations

-

2,035

-

2,035
Asset backed securities

-

12,101

-

12,101
Mutual funds

2,011

-

-

2,011
Total assets measured at fair value

$
2,011

$
269,202

$
-

$
271,213
໿

Total
May 28, 2016

Level 1

Level 2

Level 3

Balance
Assets

US government and agency obligations

$
-

$
18,814

$
-

$
18,814
Municipal bonds

-

79,643

-

79,643
Corporate bonds

-

240,537

-

240,537
Foreign government obligations

-

2,046

-

2,046
Asset backed securities

-

15,893

-

15,893
Mutual funds

5,503

-

-

5,503
Total assets measured at fair value

$
5,503

$
356,933

$
-

$
362,436



						Total
September 2, 2017	Level 1		Level 2		Level 3	Balance
Assets
US government and agency obligations	—		$	20,872	—	$	20,872
Municipal bonds	—		29,100		—	29,100
Corporate bonds	—		53,976		—	53,976
Asset backed securities	—		3,080		—	3,080
Mutual funds	2,509		—		—	2,509
Total assets measured at fair value	$	2,509	$	107,028	—	$	109,537

໿



							Total
June 3, 2017	Level 1		Level 2		Level 3		Balance
Assets
US government and agency obligations	$	—	$	20,216	$	—	$	20,216
Municipal bonds	—		36,873		—		36,873
Corporate bonds	—		75,790		—		75,790
Asset backed securities	—		5,583		—		5,583
Mutual funds	2,459		—		—		2,459
Total assets measured at fair value	$	2,459	$	138,462	$	—	$	140,921

Investment securities – available-for-sale, classified as level 2, consist of U.S. government and agency obligations, taxable and tax exempt municipal bonds, zero coupon municipal bonds, foreign government obligations, asset backed securities and corporate bonds with maturities of three months or longer when purchased. We classify these securities as current, because amounts invested are available for current operations. Observable inputs for these securities are yields, credit risks, default rates, and volatility.

໿

8. InvestmentSecurities

The following represents the Company’s investment securities as of ~~August 27, 2016~~September 2, 2017 and ~~May 28, 2016~~June 3, 2017 (in thousands):

August 27, 2016
Amortized Cost

Unrealized Gains

Unrealized Losses

Estimated Fair Value
US government and agency obligations
$
18,583

$
13

$
-

$
18,596
Municipal bonds

67,806

243

-

68,049
Corporate bonds

168,145

276

-

168,421
Foreign government obligations

2,032

3

-

2,035
Asset backed securities

12,099

2

-

12,101
Total current investment securities
$
268,665

$
537

$
-

$
269,202

Mutual funds

1,458

553

-

2,011
Total noncurrent investment securities
$
1,458

$
553

$
-

$
2,011

Index

May 28, 2016
Amortized Cost

Unrealized Gains

Unrealized Losses

Estimated Fair Value
US government and agency obligations
$
18,809

$
5

$
-

$
18,814
Municipal bonds

79,481

162

-

79,643
Corporate bonds

240,593

-

56

240,537
Foreign government obligations

2,044

2

-

2,046
Asset backed securities

15,908

-

15

15,893
Mutual funds

3,565

1

-

3,566
Total current investment securities
$
360,400

$
170

$
71

$
360,499

Mutual funds

1,448

489

-

1,937
Total noncurrent investment securities
$
1,448

$
489

$
-

$
1,937



September 2, 2017	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
US government and agency obligations	$	20,906	$	—	$	34	$	20,872
Municipal bonds	29,069		31		—		29,100
Corporate bonds	53,948		28		—		53,976
Asset backed securities	3,081		—		1		3,080
Total current investment securities	$	107,004	$	59	$	35	$	107,028

Mutual funds	$	1,717	$	792	$	—	$	2,509
Total noncurrent investment securities	$	1,717	$	792	$	—	$	2,509



June 3, 2017	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
US government and agency obligations	$	20,259	$	—	$	43	$	20,216
Municipal bonds	36,839		34		—		36,873
Corporate bonds	75,769		21		—		75,790
Asset backed securities	5,583		—		—		5,583
Total current investment securities	$	138,450	$	55	$	43	$	138,462

Mutual funds	$	1,706	$	753	$	—	$	2,459
Total noncurrent investment securities	$	1,706	$	753	$	—	$	2,459

Proceeds from sales of available-for-sale securities were ~~$92.8~~$34.1 millionand ~~$43.9~~$92.8 million during the thirteen weeks ended September 2, 2017 and August 27, 2016, ~~and August 29, 2015,~~ respectively. Gross realized gains ~~on those sales~~ during the thirteen weeks ended ended September 2, 2017 and August 27, 2016 were $16,000 and ~~August 29, 2015 were $108,000 and $4,000,~~$231,000, respectively. Gross realized losses ~~on those sales~~ during the thirteen weeks ended September 2, 2017 and August 27, 2016 ~~and August 29, 2015~~ were zero and ~~$28,000,~~$6,000, respectively. For purposes of determining gross realized gains and losses, the cost of securities sold is based on the specific identification method.

Unrealized holding gains and (losses), net of ~~tax, on available-for-sale securities classified as current in the amount of $271,000~~taxes, for the thirteen weeks ended September 2, 2017 and August 27, 2016 ~~compared with unrealized holding losses, net of tax, of $125,000 for the same period of fiscal 2016. Unrealized holding gains, net of tax, on long-term available-for-sale securities of $40,000~~ were ~~recorded for the thirteen weeks ended August 27, 2016 compared with unrealized holding losses, net of tax, on long-term available-for-sale securities of $55,000 for the same period of fiscal 2016.~~

as follows (in thousands):



	13 Weeks Ended
	September 2, 2017		August 27, 2016
Current investments	$	8	$	271
Noncurrent investments	24		40
Total unrealized holding gains	$	32	$	311

Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Contractual maturities at ~~August 27, 2016,~~September 2, 2017, are as follows (in thousands):



		~~Estimated Fair Value~~
~~Within one year~~	$	~~133,357~~
~~1-5 years~~		~~135,845~~
~~Total~~	$	~~269,202~~



	Estimated Fair Value
Within one year	$	73,204
1-5 years	33,824
Total	$	107,028

໿

Index

9. Equity

The following reflects the equity activity, including our noncontrolling interest, for the thirteen weeks ended ~~August 27, 2016:~~

September 2, 2017 (in thousands):

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum. Other

Retained

Noncontrolling

Amount

Amount

Amount

Capital

Comp. Loss

Earnings

Interest

Total
Balance at May 28, 2016
$
703
$
48
$
(22,272)
$
46,404
$
(48)
$
890,440
$
2,086
$
917,361
Other comprehensive loss, net of tax

-

-

-

-

311

-

-

311
Forfeiture of restricted stock

-

-

(2)

2

-

-

-

-
Buyback of 920 shares to satisfy withholding obligation in connection with the vesting of restricted stock

-

-

(40)

-

-

-

(40)
Distribution to noncontrolling interest partners

-

-

-

-

-

-

(73)

(73)
Restricted stock compensation

-

-

-

848

-

-

-

848
Net income

-

-

-

-

-

(30,936)

(44)

(30,980)
Balance at August 27, 2016
$
703
$
48
$
(22,314)
$
47,254
$
263
$
859,504
$
1,969
$
887,427
໿

Cal-Maine Foods, Inc. Stockholders
Common Stock

Class A Treasury Paid In Accum. Other Retained Noncontrolling
Amount
Amount Amount Capital Comp. Income Earnings Interest Total
Balance at June 3, 2017 $ 703
$ 48
$ (23,914 ) $ 49,932
$ (128 ) $ 816,046
$ 1,806
$ 844,493
Other comprehensive income, net of tax —
—
—
—
32
—
—
32
Forfeiture of restricted stock —
—
(1 ) 1
—
—
—
—
Buyback of 519 shares to satisfy withholding obligation in connection with the vesting of restricted stock —
—
(21 ) —
—
—
—
(21 )
Contribution from noncontrolling interest partners —
—
—
—
—
—
279
279
Restricted stock compensation —
—
—
859
—
—
—
859
Net loss —
—
—
—
—
(15,993 ) (184 ) (16,177 )
Balance at September 2, 2017 $ 703
$ 48
$ (23,936 ) $ 50,792
$ (96 ) $ 800,053
$ 1,901
$ 829,465

~~Index~~

ITEM 2. MANAGEMENT’SDISCUSSIONAND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains numerous forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) relating to our shell egg business, including estimated production data, expected operating schedules, projected construction costs, and other operating data, including anticipated results of operations and financial condition. Such forward-looking statements are identified by the use of words such as “believes,” “intends,” “expects,” “hopes,” “may,” “should,” “plans,” “projected,” “contemplates,” “anticipates,” or similar words. Actual production, operating schedules, capital costs, results of operations, and other projections and estimates could differ materially from those projected in the forward-looking statements. The forward-looking statements are based on management’s current intent, belief, expectations, estimates, and projections regarding the Company and its industry. These statements are not guarantees of future performance and involve risks, uncertainties, assumptions, and other factors that are difficult to predict and may be beyond our control. The factors that could cause actual results to differ materially from those projected in the forward-looking statements include, among others, (i) the risk factors set forth in Item 1A of our Annual Report on Form 10-K for the fiscal year ended ~~May 28, 2016,~~June 3, 2017, as updated by our subsequent Quarterly Reports on Form 10-Q, (ii) the risks and hazards inherent in the shell egg business (including disease, pests, weather conditions, and potential for product recall), (iii) changes in the demand for and market prices of shell eggs and feed costs, (iv) our ability to predict and meet demand for cage-free and other specialty eggs, (v) risks, changes, or obligations that could result from our future acquisition of new flocks or businesses and risks or changes that may cause conditions to completing a pending acquisition not to be met, and (vi) adverse results in pending litigation matters. Readers are cautioned not to place undue reliance on forward-looking statements because, while we believe the assumptions on which the forward-looking statements are based are reasonable, there can be no assurance that these forward-looking statements will prove to be accurate. Further, forward-looking statements included herein are only made as of the respective dates thereof, or if no date is stated, as of the date hereof. Except as otherwise required by law, we disclaim any intent or obligation to update publicly these forward-looking statements, whether because of new information, future events, or otherwise.

OVERVIEW

Cal-Maine Foods, Inc. (“we,” “us,” “our,” or the “Company”) is primarily engaged in the production, grading, packaging, marketing, and distribution of fresh shell eggs. Our fiscal year end is the Saturday closest to May 31.

Index

Our operations are fully integrated. At our facilities we hatch chicks, grow and maintain flocks of pullets (young female chickens, under 18 weeks of age), layers (mature female chickens) and breeders (male and female birds used to produce fertile eggs to ~~be hatched~~hatch for egg production flocks), manufacture feed, and produce, process, and distribute shell eggs. We are the largest producer and marketer of shell eggs in the United States ~~(U.S.~~("U.S."). We market the majority of our shell eggs in the southwestern, southeastern, mid-western, and mid-Atlantic regions of the U.S. We market shell eggs through an extensive distribution network to a diverse group of customers, including national and regional grocery store chains, club stores, foodservice distributors, and egg product consumers.

The Company has one operating segment, which is the production, grading, packaging, marketing and distribution of shell eggs. The majority of our customers rely on us to provide most of their shell egg needs, including specialty and non-specialty eggs. Specialty eggs represent a broad range of products. We classify nutritionally enhanced, cage free, organic and brown eggs as specialty products for accounting and reporting purposes. We classify all other shell eggs as non-specialty products. While we report separate sales information for these types of eggs, ~~we note~~ there are a number of cost factors which are not specifically available for non-specialty or specialty eggs due to the nature of egg production. We manage our operations and allocate resources to these types of eggs on a consolidated basis based on the demands of our customers.

Our operating results are directly tied to egg prices, which are highly volatile and subject to wide fluctuations, and are outside of our control. For example, the annual average Urner-Barry Southeastern Regional Large Egg Market Price per dozen eggs, for our fiscal ~~2005-2016~~years 2005-2017 ranged from a low of $0.72 ~~during~~in fiscal year 2005 to a high of $2.97 ~~during~~in fiscal year 2016. The shell egg industry has traditionally been subject to periods of high profitability followed by periods of significant loss. In the past, during periods of high profitability, shell egg producers tended to increase the number of layers in production with a resulting increase in the supply of shell eggs, which generally caused a drop in shell egg prices until supply and

~~Index~~

demand returned to balance. As a result, our financial results from year to year may vary significantly. Shorter term, retail sales of shell eggs historically have been greatest during the fall and winter months and lowest during the summer months. Prices for shell eggs fluctuate in response to seasonal factors and a natural increase in shell egg production ~~during~~in the spring and early summer. Shell egg prices tend to increase with the start of the school year and are highest prior to holiday periods, particularly Thanksgiving, Christmas, and Easter. Consequently, we generally experience lower sales and net income in our first and fourth fiscal quarters ending in August and May, respectively. Because of the seasonal and quarterly fluctuations, comparisons of our sales and operating results between different quarters within a single fiscal year are not necessarily meaningful comparisons.

~~From April through June~~

In 2015, our industry experienced a significant avian influenza (“AI”) outbreak, primarily in the upper Midwestern U.S. There were no positive tests for AI at any of our locations. Based on several published industry estimates, we believe approximately 12% of the national flock of laying hens was affected. ~~The~~During April through June 2015, the affected laying hens were either destroyed by the disease or euthanized. ~~During April through June 2015,~~The USDA data showed the supply of laying hens decreased ~~substantially, and then~~substantially. Since that time, hen numbers began to recover ~~gradually. As~~and eventually exceed pre-AI levels by late 2016. In February 2017, the USDA issued revised data that showed the size of ~~August 1, 2016,~~ the ~~national~~ laying hen flock ~~according to the U.S. Department of Agriculture~~for calendar years 2015 and 2016 was ~~approximately 8.4%~~meaningfully higher in both years than ~~the AI reduced flock on August 1, 2015, but remained 3.3% below the number of layers on August 1, 2014.~~ previously reported.

Egg prices increased significantly during the summer and fall of 2015. The average Urner-Barry Thursday ~~prices~~price for the large market (i.e. ~~generic~~conventional shell eggs) in the southeastern region for the months of June through November 2015 was $2.32 per dozen, with a peak of $2.97 in August. Subsequent to November 2015, shell egg prices declined. The Urner Barry price index ("UB index") hit a decade-low level ~~during~~in both our fiscal 2016 fourth quarter and fiscal 2017 second quarter. During our fiscal 2018 first quarter, the UB index averaged $0.94 per dozen, a 25.3% increase over the prior year period average of $0.75 per dozen. In spite of this increase, the index remained below historical levels. Subsequent to the end of our fiscal 2018 first quarter it has continued to increase.

According to Nielsen data, retail customer demand for shell eggs has remained ~~at significantly lower~~strong. The USDA reports that egg export demand has improved since the beginning of fiscal 2017; however, it has not fully recovered to levels prior to the AI outbreak. Additionally, the industry experienced reduced demand for egg products, as many commercial customers reformulated their products to use fewer eggs when prices spiked and have been slow to resume previous egg usage. Together with the increased supply of hens, these factors created an oversupply of eggs, with pressure on

Index

market prices. Recently, increasing exports have returned to historical levels, although they remain below the peaks seen just prior to the AI outbreak, and USDA reports show the chick hatch has been trending down, suggesting there may be a moderation in the ~~first quarter~~size of ~~fiscal 2017 than~~ the ~~corresponding period of last year.~~laying hen flock over time. Accordingly, our net average selling ~~prices~~price for shell eggs for the first quarter of fiscal ~~2017~~2018 was ~~$0.952~~$1.017 compared with ~~$2.243~~$0.952 for the corresponding period of fiscal 2017. While overall market conditions are more favorable than a year ago, we do not expect any sustained improvement in ~~the fiscal 2016 first quarter. Retail demand has remained favorable; however, lower institutional demand for egg products and reduced egg exports~~pricing until we have ~~pushed inventory levels higher and created additional pricing pressure. Based on USDA reports, the laying flock is expected to increase through the end of calendar 2016, creating~~a more stable supply and ~~the potential for further price declines. Egg prices will likely remain volatile and future prices will depend on levels of supply and the recovery of institutional~~ demand ~~for eggs which was adversely impacted as a result of the 2015 shortages caused by AI.~~

balance.

We are one of the largest producers and marketers of value-added specialty shell eggs in the U.S. ~~For accounting and tax purposes, we classify nutritionally enhanced, cage-free, organic and brown eggs as specialty shell eggs.~~ They have been a significant and growing ~~segment~~portion of the market in recent years. During our fiscal 2016 ~~an increasing~~a number of large restaurant chains, food service companies and grocery chains, including our largest customers, announced goals to transition to a cage-free egg supply chain by specified future dates. We are working with our customers to achieve smooth progress in meeting their ~~goals, and our~~goals. Our focus for future expansion at our farms will be ~~with~~ environments that are cage-free or with equipment that can easily be converted to cage-free, based on a timeline ~~that meets~~to meet our customer’s needs.

For the thirteen weeks ended ~~August 27, 2016,~~September 2, 2017, we produced approximately ~~82%~~86% of the total number of shell eggs we ~~sold. This compares~~sold compared to ~~78%~~82% in the comparable prior year period. We produced 7.4% more dozens during the thirteen weeks ended September 2, 2017 than in the corresponding period of last year. For ~~both periods,~~the thirteen weeks ended September 2, 2017, approximately 4%9% of such production was provided by contract producers ~~utilizing~~who utilize their facilities in the production of shell eggs by layers owned by ~~us.~~us compared to 5% for the same period of last year. This increase represents contract production acquired with our fiscal 2017 acquisitions. We own the shell eggs produced under these arrangements.

Our cost of production is materially affected by feed costs. Feed costs averaged approximately ~~60%~~55% of our total farm egg production cost for the thirteen weeks ended ~~August 27, 2016.~~September 2, 2017, compared to 60% for the same period of fiscal 2017. Changes in market prices for corn and soybean meal, the primary ingredients in the feed we use, result in changes in our cost of goods sold. The cost of ~~our~~ feed ingredients, which are commodities, are subject to factors over which we have little or no control such as volatile price changes caused by weather, size of harvest, transportation and storage costs, demand, and the agricultural and energy policies of the U.S. and foreign governments. ~~Increased U.S. acreage and large per acre yields for both~~We anticipate significant corn and ~~soybeans~~soybean crops in 2017, which combined with the large 2016 crops should provide an adequate ~~domestic supplies for both~~supply of our primary feed ~~ingredients. Domestic corn supplies could be particularly robust, although domestic soybean stocks could be negatively impacted by increased exports due~~ingredients in fiscal 2018.

While the recent hurricanes that hit the United States following the end of our first fiscal quarter of 2018 caused disruptions to ~~reduced supplies from South America.~~

~~As previously disclosed on August 2, 2016, we are~~our operations in the process of acquiring substantially all of the assets of Foodonics International, Inc. and its related entities doing business as Dixie Egg Company. The assets to be acquired include commercial egg production and processing facilities with capacity for approximately 1.6 million laying hens and related feed production, milling and distribution facilities in Georgia, Alabama and Florida, as well as contract grower arrangements for an additional 1.5 million laying hens. In addition, the assets to be acquired include the Egg-Land’s Best, Inc. franchise

~~Index~~

~~with licensing rights for portions of certain markets in Alabama,~~Texas, Florida and Georgia, ~~as well as Puerto Rico, Bahamas and Cuba. We expect to close this transaction in the second quarter~~we did not sustain any material loss of ~~fiscal 2017.~~

egg production.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain items from our Condensed Consolidated Statements of ~~Income~~Operations expressed as a percentage of net sales.

13 Weeks Ended

August 27, 2016

August 29, 2015
Net sales

100.0
%

100.0
%
Cost of sales

104.0

56.9

Gross profit (loss)

(4.0)

43.1

Selling, general, and administrative expense

16.7

7.0

Operating income (loss)

(20.7)

36.1

Other income (expense):

Interest income, net

0.4

0.0

Royalty income

0.2

0.1

Equity in income of affiliates

0.1

0.1

Other

(0.2)

(0.1)

0.5

0.1

Income (loss) before income taxes and noncontrolling interest

(20.2)

36.2

Income tax expense (benefit)

(7.3)

12.6

Net income (loss) before noncontrolling interest

(12.9)

23.6

Less: Net income (loss) attributable to noncontrolling interest

0.0

0.1

Net income (loss) attributable to Cal-Maine Foods, Inc.

(12.9)
%

23.5
%



	13 Weeks Ended
	September 2, 2017		August 27, 2016
Net sales	100.0	%	100.0	%
Cost of sales	93.4	%	104.0	%
Gross profit (loss)	6.6	%	(4.0	)%
Selling, general, and administrative expense	15.9	%	16.8	%
Operating loss	(9.3	)%	(20.8	)%
Other income (expense), net	(0.1	)%	0.8	%
Loss before income taxes and noncontrolling interest	(9.4	)%	(20.0	)%
Income tax benefit	3.2	%	7.3	%
Net loss before noncontrolling interest	(12.6	)%	(27.3	)%
Less: Net loss attributable to noncontrolling interest	(0.1	)%	—	%
Net loss attributable to Cal-Maine Foods, Inc.	(12.5	)%	(27.3	)%

Index

NET SALES

~~Approximately 98% of our net sales for the first quarter of fiscal 2017 were shell eggs and approximately 2% were egg products.~~

Net sales for the thirteen weeks ended ~~August 27, 2016~~September 2, 2017 were ~~$239.8~~$262.8 million, ~~a decrease~~an increase of ~~$370.1~~$23.0 million, or ~~60.7%~~9.6%, compared to net sales of ~~$609.9~~$239.8 million for the thirteen weeks ended August ~~29, 2015,~~27, 2016. The increase was primarily due to ~~the decrease~~an increase in egg selling ~~prices. Total~~prices and dozens sold.

Shell egg sales made up approximately 98% of ~~shell eggs sold and egg selling prices decreased~~net sales for the ~~current thirteen-week period compared to the same period in fiscal 2016.~~thirteen weeks ended September 2, 2017. Dozens sold for the first quarter of fiscal year ~~2017~~2018 were 249.4 million, a 2.9% increase from 242.3 million ~~a decrease of 16.5 million, or 6.4%, compared to 258.8 million~~dozen for the first quarter of fiscal ~~2016 resulting in~~2017. The volume increase accounted for a ~~decrease~~$6.8 million increase in net ~~sales of $36.9 million.~~

~~Our net~~sales.

Net average selling price per dozen of shell eggs was $1.017 for the thirteen weeks ended September 2, 2017, compared to $0.952 for the thirteen weeks ended August 27, ~~2016 was $0.952, compared to $2.243~~2016. The 6.8% increase in average selling price accounted for ~~the thirteen weeks ended August 29 2015,~~ a ~~decrease of 57.6%, resulting in a corresponding decrease~~$15.7 million increase in net ~~shell egg sales of $312.9 million.~~sales. Net average selling price is the blended price for all sizes and grades of shell eggs, including non-graded shell egg sales, breaking stock, and undergrades.

Egg products and other revenues ~~resulted in a decrease in~~accounted for 2% of net sales ~~of $20.4~~for the thirteen weeks ended September 2, 2017. These revenues were $6.1 million for the thirteen weeks ended September 2, 2017, compared to $5.6 million for the thirteen weeks ended August 27, ~~2016 compared to the same period of last year.~~

2016.

~~Index~~

The table below represents an analysis of our non-specialty and specialty shell egg sales (in thousands, except percentage data). Following the table is a discussion of the information presented in the table.

13 Weeks Ended

August 27, 2016

August 29, 2015
Total net sales

$
239,845

$
609,895

Non-specialty shell egg sales

$
113,504 48.4%

$
422,921 72.6%
Specialty shell egg sales

109,312 46.7%

143,953 24.7%
Co-pack specialty shell egg sales

8,455 3.6%

13,999 2.4%
Other

2,997 1.3%

1,785 0.3%
Net shell egg sales

$
234,268 100.0%

$
582,658 100.0%

Net shell egg sales as a percent  of total net sales

98%

96%

Dozens sold:

Non-specialty shell egg

182,730 75.4%

195,352 75.5%
Specialty shell egg

55,399 22.9%

58,035 22.4%
Co-pack specialty shell egg

4,196 1.7%

5,387 2.1%
Total dozens sold

242,325 100.0%

258,774 100.0%

Net average selling price

$        0.952

$        2.243



	13 Weeks Ended
	September 2, 2017					August 27, 2016
Total net sales	$	262,845				$	239,845

Non-specialty shell egg	$	146,048		56.9	%	$	113,504		48.4	%
Specialty shell egg	101,697			39.6	%	109,312			46.7	%
Co-pack specialty shell egg	6,080			2.4	%	8,455			3.6	%
Other	2,884			1.1	%	2,997			1.3	%
Net shell egg sales	$	256,709		100.0	%	$	234,268		100.0	%

Net shell egg sales as a percent of total net sales	98		%			98		%

Dozens sold:
Non-specialty shell egg	192,168			77.0	%	182,730			75.4	%
Specialty shell egg	54,138			21.7	%	55,399			22.9	%
Co-pack specialty shell egg	3,158			1.3	%	4,196			1.7	%
Total dozens sold	249,464			100.0	%	242,325			100.0	%

Net average selling price per dozen:
Non-specialty shell eggs	$	0.760				$	0.621
Specialty shell eggs	$	1.878				$	1.973
All shell eggs	$	1.017				$	0.952

Non-specialty shell eggs include all shell egg sales not specifically identified as specialty or co-pack specialty shell egg sales. ~~The non-specialty shell egg~~This market is characterized generally by an inelasticity of demand. Small increases or decreases in production or demand can have a large positive or adverse effect on selling prices. For the thirteen weeks ended ~~August 27, 2016,~~September 2, 2017, non-specialty shell egg dozens sold ~~decreased~~increased approximately ~~6.5%~~5.2%, and the average selling price ~~decreased 70.7%~~increased 22.4% to ~~$0.638~~$0.760 from ~~$2.174~~$0.621 for the same period of ~~the prior year.~~

fiscal 2017.

Index

Specialty shell eggs, which include nutritionally enhanced, cage-free, organic, and brown eggs continue to make up a ~~larger~~large portion of our total shell egg revenue and dozens sold. Specialty egg retail prices are less cyclical than non-specialty shell egg prices and are generally higher due to consumer willingness to pay for the perceived benefits from these products. This was particularly evident in recent quarters prior to our first quarter of fiscal 2018 as non-specialty egg prices declined more than specialty egg prices. However, as non-specialty egg prices declined, we experienced some margin and volume pressures on specialty egg sales. For the thirteen weeks ended ~~August 27, 2016,~~September 2, 2017, specialty shell egg dozens sold decreased ~~approximately 4.5%~~2.3%, and the average selling price decreased ~~20.5%~~4.8% to ~~$1.973~~$1.878 from ~~$2.481~~$1.973 for the same period of ~~the prior year.~~

fiscal 2017.

Co-pack specialty shell eggs are sold primarily through co-pack arrangements, a common practice in the industry whereby production and processing of certain products is outsourced to another producer. Shell egg sales in this category represented ~~4.2 million~~1.3% and ~~5.4 million~~1.7% dozen for the quarters ended September 2, 2017 and August 27, 2016. Co-pack specialty shell eggs sold during the thirteen weeks endedSeptember 2, 2017 and August 27, 2016, were 3.2 million and ~~August 29, 2015, respectively, primarily reflecting the loss of a portion of a major customer’s co-pack business.~~

4.2 million, respectively.

The shell egg sales classified as “Other” represent sales of hard cooked eggs, hatching eggs, ~~and/or~~and other miscellaneous products, which are included with our shell egg operations.

Egg products are shell eggs that are broken and sold in liquid, frozen, or dried form. Our egg products are sold through our consolidated subsidiaries American Egg Products, LLC (“AEP”) and Texas Egg Products, LLC (“TEP”). For the ~~first quarter of fiscal~~ thirteen weeks ended September 2, 2017, egg product sales were ~~$5.6~~$6.1 million, ~~a decrease~~an increase of ~~$21.7 million,~~$559,000, or ~~79.5%~~10.0%, compared to ~~$27.2~~$5.6 million for the same period of ~~2016.~~2017. Pounds sold for the ~~first quarter of fiscal year~~thirteen weeks ended September 2, 2017 were ~~14.4~~15.5 million, ~~pounds,~~ an increase of

~~Index~~

~~253,000 pounds,~~ 1.1 million, or ~~1.8%~~7.9%, compared to ~~14.1~~14.4 million ~~pounds~~ for ~~the same quarter of fiscal 2016. Selling prices for liquid and frozen egg products were down 79.3% for the first quarter of 2017 compared with~~ the same period of ~~last year.~~

fiscal 2017.

COST OF SALES

Cost of sales consists of costs directly related to production, processing and packing of shell eggs, purchases of shell eggs from outside producers, processing and packing of liquid and frozen egg products, and other non-egg costs. Farm production costs are those costs incurred at the egg production facility, including feed, facility, hen amortization, and other related farm production costs.

Index

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

13 Weeks Ended

August 27, 2016

August 29, 2015

Percent Change
Cost of Sales:

Farm production

$
142,871

$
139,035

2.8
%
Processing and packaging

46,302

44,853

3.2
%
Outside egg purchases and other (including change in inventory)

55,593

145,074

(61.7)
%
Total shell eggs

244,766

328,962

(25.6)
%
Egg products

4,299

17,503

(75.4)
%
Other

349

359

(2.8)
%
Total

$
249,414

$
346,824

(28.1)
%

Farm production cost (per dozen produced)

Feed

$
0.431

$
0.419

2.9
%
Other

0.294

0.271

8.5
%
Total

$
0.725

$
0.690

5.1
%

Outside egg purchases (average cost per dozen)

$
1.03

$
2.27

(54.6)
%

Dozen produced

198,782

202,648

(1.9)
%
Dozen sold

242,325

258,774

(6.4)
%
໿

໿



	13 Weeks Ended
	September 2, 2017		August 27, 2016		Percent Change
Cost of Sales:
Farm production	144,289		142,871		1.0	%
Processing, packaging, and warehouse	51,111		46,302		10.4	%
Egg purchases and other (including change in inventory)	43,780		55,593		(21.2	)%
Total shell eggs	239,180		244,766		(2.3	)%
Egg products	6,044		4,299		40.6	%
Other	285		349		(18.3	)%
Total	$	245,509	$	249,414	(1.6	)%


Farm production cost (per dozen produced)
Feed	$	0.375	$	0.431	(13.0	)%
Other	$	0.306	$	0.294	4.1	%
Total	$	0.681	$	0.725	(6.1	)%

Outside egg purchases (average cost per dozen)	$	0.98	$	1.03	(4.9	)%

Dozen produced	213,570		198,782		7.4	%
Dozen sold	249,464		242,325		2.9	%

Cost of sales for the first quarter of fiscal ~~2017~~2018 was ~~$249.4~~$245.5 million, a decrease of ~~$97.4~~$3.9 million, or ~~28.1%~~1.6%, ~~compared to cost of sales of $346.8~~from $249.4 million for the same ~~quarter~~period of fiscal ~~2016.~~2017. The decrease was primarily driven by a decrease in the volume and cost of ~~outside~~ egg purchases during the ~~quarter, including eggs purchased~~period. Dozens produced increased 7.4% resulting in higher farm production, processing, and packaging costs. These increases were offset by ~~our egg products divisions.~~a lower feed cost per dozen produced. Feed cost per dozen for the ~~fiscal~~thirteen weeks ended September 2, 2017, ~~first quarter~~ was ~~$0.431,~~$0.375, compared to ~~$0.419~~$0.431 per dozen for the comparable period of fiscal ~~2016 quarter, an increase~~2017, a decrease of ~~2.9%~~13.0%, resulting in ~~an increase~~a decrease in cost of sales of ~~$2.5~~$12.0 million for the comparable period. Other farm production cost increased 4.1% to $0.306 for the thirteen weeks ended ~~August 27, 2016 compared with the same period of fiscal 2016. Other farm production cost increased 8.5% to $0.294 for the first quarter of~~September 2, 2017, compared ~~with $0.271~~to $0.294 for the same period of last year primarily due to increased layer hen amortization expense and facility costs related to capital improvement and conversion projects.

Gross ~~margin decreased from 43.1%~~profit increased to $17.3 million for the thirteen weeks ended September 2, 2017, compared to a loss of $9.6 million for the first quarter of fiscal ~~2016 to a loss of 4.0% for the thirteen weeks ended August 27, 2016~~2017 primarily due to the ~~decreased~~increased average customer selling ~~prices.~~

prices and sales volumes.

Index

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

Selling, general, and administrative expenses include costs of marketing, distribution, accounting, and corporate overhead. The following table presents an analysis of our selling, general, and administrative expenses (in thousands).

13 Weeks Ended

August 27, 2016

August 29, 2015

$ Change

% Change
Stock compensation expense

$
848

$
700

$
148

21.1%
Specialty egg expense

13,057

13,882

(825)

-5.9%
Payroll and overhead

8,438

9,585

(1,147)

-12.0%
Other expenses

5,353

6,602

(1,249)

-18.9%
Delivery expense

12,560

12,194

366

3.0%
Total

$
40,256

$
42,963

$
(2,707)

-6.3%



	13 Weeks Ended
	Actual		Less: Acquisitions^*		Net
	September 2, 2017		September 2, 2017		September 2, 2017		August 27, 2016		$ Change			% Change
Specialty egg expense	$	11,734	$	337	$	11,397	$	13,057	$	(1,660	)	(12.7	)%
Delivery expense	13,124		1,016		12,108		12,560		(452		)	(3.6	)%
Payroll and overhead	9,496		724		8,772		8,438		334			4.0	%
Stock compensation expense	859		—		859		848		11			1.3	%
Other expenses	6,497		1,273		5,224		5,353		(129		)	(2.4	)%
Total	$	41,710	$	3,350	$	38,360	$	40,256	$	(1,896	)	(4.7	)%

^*Represents amounts in the first quarter of fiscal 2018 related to our fiscal 2017 acquisitions, Foodonics International, Inc, and Happy Hen Egg Farms, Inc., which were completed after the first quarter of fiscal 2017.

໿

For the thirteen weeks ended ~~August 27, 2016,~~September 2, 2017, selling, general, and administrative ~~expense~~expenses was ~~$40.3~~$41.7 million, ~~a decrease~~an increase of ~~6.3%~~$1.4 million, or 3.5%, compared to ~~$43.0~~$40.3 million for the thirteen weeks endedAugust ~~29, 2015. Specialty~~27, 2016. The impact of the fiscal 2017 acquisitions, which were completed after the first quarter of fiscal 2017, was a $3.4 million increase to SG&A in the first quarter of 2018.

Excluding the impact of these acquisitions, specialty egg expense decreased ~~$825,000~~$1.7 million, or 12.7%, compared to the same period of last ~~year, a decrease of 5.9%.~~year. Specialty egg expense typically fluctuates with specialty egg dozens sold, which decreased ~~4.5%~~2.3% for the ~~current quarter~~thirteen weeks ended September 2, 2017 compared to the same period of last year. Advertising expense, which is a component of specialty egg expense, for the thirteen weeks ended September 2, 2017 decreased 19.5% from the same period of fiscal 2017. Payroll and overhead increased $334,000, or 4.0%, compared to the same period of fiscal 2017 primarily due to 2017 bonus accruals being adjusted to actual payments which were made in the first quarter of fiscal 2018. Delivery expense decreased ~~$1.1 million,~~$452,000 or ~~12.0%~~3.6%, compared to the same period of last year primarily due to ~~reduced bonus accruals~~a decrease in ~~the current period and expense related to the vesting of liability awards incurred in the first quarter of fiscal 2016. As a percentage of net sales, payroll and overhead was 3.5% for~~contract trucking cost.

LOSS ON DISPOSAL OF FIXED ASSETS

In the first quarter of fiscal 2017 ~~compared~~we recorded a $525,000 loss on disposal of fixed assets due to ~~1.6% for the same period~~a roof replacement at one of ~~last year.~~

our Texas locations.

OPERATING INCOME (LOSS)

As a result of the above, operating loss was ~~$49.8~~$24.4 million for the first quarter of fiscal ~~2017,~~2018, compared to ~~operating income of $220.1~~$50.4 million for the fiscal ~~2016~~2017 first quarter.

OTHER INCOME (EXPENSE)

Total other income (expense) consists of ~~income (expenses)~~items not directly charged to, or related to, operations such as interest income and expense, royalty income, equity in income or loss of affiliates, and patronage income, among other items. Other income for the thirteen weeks ended August 27, 2016 was $1.3 million, an increase of $736,000, compared to $549,000 for the thirteen weeks ended August 29, 2015. This increase is primarily due to an increase in net interest income partially offset by a decrease in equity income from affiliates for the first quarter of fiscal 2017 compared to the same period of last year. As a percent of net sales, other income was 0.5% for the thirteen weeks ended August 27, 2016 and 0.1% for the same period of fiscal 2016.

For the first quarter of fiscal ~~2017,~~2018, we recorded ~~$1.1 million~~$504,000 of interest income compared ~~with $583,000~~to $1.1 million for the same period of last year. ~~This increase~~The decrease resulted from ~~higher~~lower average invested ~~balances and higher rates of return on available for sale securities.~~balances. The ~~company~~Company recorded interest expense of ~~$387,000~~$146,000 and ~~$825,000,~~$387,000, of which ~~$379,000~~$116,000 and ~~$269,000~~$379,000 was capitalized, in the first quarters of fiscal 2018 and 2017, ~~and 2016,~~ respectively. ~~This reduction~~These changes resulted from the Company reducing outstanding debt and ~~increasing capitalized~~capitalizing less interest ~~related~~due to a reduction in major expansion and renovation projects.

Index

Equity in income (loss) of affiliates for the first quarter of fiscal ~~2017~~2018 was ~~$191,000~~a loss of $353,000 compared to ~~$730,000~~income of $191,000 for the same period of last year. The decrease of ~~$539,000~~$544,000 is primarily due to ~~decreased~~losses at our Red River joint venture.

Other, net for the thirteen weeks ended September 2, 2017, was a loss of $538,000 compared with income ~~from specialty egg sales~~of $122,000 for the same period of last year, a decrease of $660,000, primarily driven by a reduction in ~~our unconsolidated joint ventures.~~

miscellaneous income and an increase in uninsured losses in the current period.

INCOME TAXES

Pre-tax loss, less net loss attributable to noncontrolling interest, was ~~$48.5~~$24.3 million for the thirteen weeks ended ~~August 27, 2016,~~September 2, 2017, compared to pre-tax ~~income~~loss, less net loss attributable to noncontrolling interest, of ~~$219.6~~$48.5 million for last year’s comparable period. For the current thirteen-week period, an income tax benefit of ~~$17.6~~$8.3 million was recorded, with an effective tax rate of ~~36.2%~~34.3%, compared to an income tax ~~expense~~benefit of

~~Index~~

~~$76.6~~ $17.6 million, with an effective rate of ~~34.9%~~36.2%, for last year’s comparable period. ~~Included in~~The effective rate decrease for the thirteen weeks ended September 2, 2017 was primarily related to the projected carryback of net operating losses, as the carryback reduced prior ~~period~~year taxable income ~~tax expense is~~and the benefit of domestic manufacturers deductions, a portion of which was therefore reversed in the ~~domestic production activity deduction.~~

current period.

At September 2, 2017, the Company had recorded an income tax receivable of $56.0 million, an increase of $3.3 million, compared to $52.7 million at June 3, 2017. This increase is due to income tax benefit recorded on net losses for fiscal year 2018.

Our effective rate differs from the federal statutory income tax rate of 35% due to state income taxes and certain items included in income for financial reporting purposes that are not included in taxable income for income tax purposes, including tax exempt interest income, ~~domestic production activity deduction,~~ and net income or loss attributable to noncontrolling interest.

NET ~~INCOME (LOSS)~~LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST

For the thirteen weeks ended ~~August 27, 2016,~~September 2, 2017, net loss attributable to noncontrolling interest was ~~$44,000,~~$184,000 compared to ~~net income of $1.1 million~~$44,000 for the same period of ~~2016.~~

fiscal 2017. This is attributable to losses from the Company's consolidated joint ventures.

NET ~~INCOME (LOSS)~~LOSS ATTRIBUTABLE TO CAL-MAINE FOODS, INC.

Net loss for the thirteen weeks ended ~~August 27, 2016~~September 2, 2017 was $16.0 million, or $0.33 per basic and diluted share, compared $30.9 million, or $0.64 per basic and diluted share ~~compared to net income of $143.0 million, or $2.97 per basic and $2.95 per diluted share~~ for the same period last year.

CAPITAL RESOURCES AND LIQUIDITY

Our working capital at ~~August 27, 2016~~September 2, 2017 was ~~$498.8~~$357.5 million, compared to ~~$542.8~~$371.5 million at ~~May 28, 2016.~~June 3, 2017. The calculation of working capital is defined as current assets less current liabilities. Our current ratio was ~~7.70~~6.67 at ~~August 27, 2016,~~September 2, 2017, compared with ~~7.50~~6.74 at ~~May 28, 2016.~~June 3, 2017. The decrease was due primarily to net losses in recent periods, along with the use of cash for capital expenditures. We have ~~$3.7~~$4.2 million in outstanding standby letters of credit, which are collateralized by cash for the benefit of certain insurance companies. Our long-term debt at ~~August 27, 2016,~~September 2, 2017, including current maturities, amounted to ~~$24.0~~$9.7 million, compared to ~~$25.6~~$10.9 million at ~~May 28, 2016.~~June 3, 2017. Refer to Note 9 of our ~~May 28, 201~~6June 3, 2017 audited financial statements for further information on our long-term debt.

For the thirteen weeks ended ~~August 27, 2016, $45.5~~ September 2, 2017, $21.5 million in net cash was used ~~for~~in operating activities, a decrease of ~~$199.6~~$24.0 million, compared to net cash ~~provided by~~used in operations of ~~$154.1~~$45.4 million for the comparable period in fiscal ~~2016. Decreased~~2017. Improved gross profit margins primarily resulting from ~~lower~~higher sales volumes and egg selling prices contributed ~~greatly~~ to our ~~decrease~~increase in cash flow from operations.

Index

For the thirteen weeks ended ~~August 27, 2016,~~September 2, 2017, approximately ~~$92.8~~$34.1 million was provided from the sale of short-term investments and ~~$9.0~~we used $2.7 million ~~was used to purchase~~for purchases of short-term investments, compared to ~~$80.7~~$92.8 million in sales and ~~$43.9~~$9.0 million in purchases in the first quarter of fiscal ~~2016.~~2017. We invested ~~$5.5~~an additional $1.2 million in our ~~previously disclosed~~ Red River Valley Egg Farm, LLC joint venture (“Red ~~River”~~River JV”). compared to $5.5 million for the first quarter of fiscal 2017. Approximately ~~$23.9~~$6.5 million was used to purchase property, plant and equipment, including construction projects discussed in detail below, compared to ~~$15.3~~$23.9 million in the ~~first quarter~~thirteen weeks ended August 27, 2016. This decrease represents the completion of ~~fiscal 2016. We paid dividends of $15.4 million in~~several major expansion projects over the ~~first quarter of fiscal 2016 and none in the first quarter of fiscal 2017.~~past twelve months. As of ~~August 27, 2016,~~September 2, 2017, cash increased approximately ~~$8.6~~$1.4 million since ~~May 28, 2016~~June 3, 2017 compared to ~~$60.7~~an increase of $8.6 million during the ~~first quarter~~same period of fiscal ~~2016.~~

2017.

~~Index~~

To accommodate the previously discussed increase in customers committing to cage-free eggs over time, we expect that future expansions at our farms will be with environments that are cage-free or with equipment that can easily be converted to cage-free, based on a timeline that meets our customer’s needs. The following table represents material construction projects approved as of September ~~23, 2016:~~

28, 2017 (in thousands):

Project
Location
Projected Completion

Projected Cost

Spent as of
August 27, 2016

Remaining Projected Cost
Breeder Pullet Houses
Edwards, MS
August 2016
$
2,461
$
2,136
$
325
Warehouse
Luling, TX
August 2016

2,343

2,318

25
Cage-Free Layer & Pullet Houses
South Texas
October 2016

49,586

48,604

982
Cage-Free Layer Houses
South Texas
October 2016

4,033

2,088

1,945
Cooler & Dry Storage Expansion
Bethune, SC
October 2016

1,529

1,081

448
Organic Facility Expansion
Chase, KS
October 2016

18,550

18,261

289
Conventional/Cage-Free Layer Houses
Green Forest, AR
January 2017

8,146

4,916

3,230
Distribution Center Remodel
Louisburg, NC
February 2017

2,955

184

2,771
Conventional/Cage-Free Layer House with Pullets
South Texas
February 2017

11,353

7,139

4,214
Cage-Free Layer Houses
Lake City, FL
March 2017

8,144

3,020

5,124
Cage-Free Layer Houses
South Texas
March 2017

4,063

536

3,527
California Compliant/Cage Free Layer House Expansions
Delta, UT
April 2017

10,696

9,179

1,517
Conventional/Cage-Free Layer House with Pullets
Guthrie, KY
May 2017

13,252

3,838

9,414
Refurbish Layer Houses Cage Free
Shady Dale, GA
May 2017

4,864

846

4,018

$
141,975
$
104,146
$
37,829

໿



Project	Location	Projected Completion	Projected Cost		Incurred as of September 2, 2017		Remaining Projected Cost
Cage-Free Layer Houses	Lake City, FL	September 2017	$	8,669	$	8,614	$	55
Convertible/Cage-Free Layer House with Pullets	South Texas	September 2017	11,641		11,626		15
Convertible/Cage-Free Layer Houses	Green Forest, AR	October 2017	8,991		8,753		238
Cage-Free Layer Houses	South Texas	November 2017	4,063		3,904		159
Convertible/Cage-Free Layer Houses with Pullets	Guthrie, KY	January 2018	13,252		12,194		1,058
			$	46,616	$	45,091	$	1,525

In addition to these projects, the Company expects to continue to fund its 50% share of the ~~previously discussed~~ Red River ~~JV during fiscal 2017.~~JV. As of September ~~23, 2016,~~28, 2017, we have contributed ~~$39.5~~$55.6 million to the joint venture to fund our share of construction, startup costs, and weoperating losses. We estimate we will make additional contributions of approximately ~~$9.0~~$7 million to fund our share of the remaining construction ~~and startup~~ costs.

~~Certain property,~~

Property, plant, and equipment at certain of our locations is pledged as collateral on our notes payable and senior secured notes. Unless otherwise approved by our lenders, we are required by provisions of our loan agreements to (1) maintain minimum levels of working capital (current ratio of not less than 1.25 to 1) and net worth (minimum of $90.0 million tangible net worth, plus 45% of cumulative net income since the fiscal year ended May 28, 2005); (2) limit dividends paid in any given quarter to not exceed an amount equal to one third of the previous quarter’s consolidated net income (allowed if no events of default); (3) maintain minimum total funded debt to total capitalization (not to exceed 55%); and (4) maintain various cash-flow coverage ratios (1.25 to 1), among other restrictions. At ~~August 27, 2016,~~September 2, 2017, we were in compliance with the financial covenant requirements of all loan agreements. Under certain of the loan agreements, the lenders have the option to require the prepayment of any outstanding borrowings in the event we undergo a change in control, as defined in the applicable loan agreement. Our debt agreements require Fred R. Adams, Jr., our Founder and Chairman Emeritus, or his family, to maintain ownership of Company shares representing not less than 50% of the outstanding voting power of the Company.

We believe our current cash balances, investments, ~~borrowings,~~ and cash flows from operations will be sufficient to fund our current and projected capital needs for at least the next twelve months.

Index

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09). The standard provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer in an amount that reflects the consideration that is expected to be received for those goods or services. In August 2015, FASB issued ASU 2015-14 which deferred the effective date of ASU 2014-09 until annual reporting periods beginning after December 15, 2017. Early adoption is not permitted. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. ~~The~~To date the Company’s assessments efforts include evaluation of certain revenue contracts with customers and the method of retrospective application, either full or modified. We currently expect to utilize the full retrospective transition on date of adoption. Based on the findings to date, the Company does not expect ASU 2014-09 to have a material impact on the ~~consolidated~~results of operations or financial ~~statement presentation.~~position; however, the Company’s assessment is not complete. The Company plans to complete its review and method of adoption in fiscal 2018.

In February 2016, the FASB issued ASU 2016-02, Leases. The purpose of the standard is to improve transparency and comparability related to the accounting and reporting of leasing arrangements. The guidance will require balance sheet recognition for assets and liabilities associated with rights and obligations created by leases with terms greater than twelve months. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. ~~The~~Based on the findings to date, the Company ~~is currently evaluating the impact of~~does not expect ASU 2016-02 to have a material impact on ~~its~~the results of operations or financial ~~statements and presentation.~~position; however, the Company's assessment is not complete.

In ~~March 2016,~~January 2017, the FASB issued ASU ~~2016-09,~~2017-04, ~~Improvements to Employee Share-Based Compensation Accounting~~Simplifying the Test for Goodwill Impairment~~. ASU 2016-09 requires that excess tax benefits are recorded on~~, which removes step 2 from the ~~income statement as opposed to additional paid-in-capital,~~goodwill impairment test. As a result, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and ~~treated as~~should recognize an ~~operating activity on~~impairment charge for the ~~statement of cash flows. ASU 2016-09 also allows companies to make an accounting policy election to either estimate~~amount by which the ~~number of awards that are expected to vest or account for forfeitures when they occur. ASU 2016-09~~carrying amount exceeds the reporting units' fair value. The guidance is effective for annual ~~reporting periods~~or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, our fiscal 2021. Early adoption is permitted for annual or interim goodwill impairment tests performed on testing dates after January 1, 2017, ~~with early~~and the prospective transition method should be applied. We do not expect the adoption ~~permitted. The Company does notexpectASU 2016-09~~of this guidance to have a material impacton ~~the~~our consolidated financial ~~statement presentation.~~statements.

CRITICAL ACCOUNTING POLICIES

We suggest our Summary of Significant Accounting Policies, as described in Note 1 of the Notes to Consolidated Financial Statements included our Annual Report on Form 10-K for the fiscal year ended ~~May 28, 2016~~,June 3, 2017, be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations. There have been no changes to critical accounting policies identified in our Annual Report on Form 10-K for the year ended ~~May 28, 2016~~.

June 3, 2017.

ITEM 3. QUANTITATIVE ANDQUALITATIVEDISCLOSURES ABOUT MARKET RISK

There have been no material changes in the market risk reported in the Company's Annual Report on Form 10-K for the fiscal year ended ~~May 28, 2016~~.

June 3, 2017.

Index

ITEM 4. CONTROLSANDPROCEDURES

Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on an evaluation of our disclosure controls and procedures conducted by our Chief Executive Officer and Chief Financial Officer, together with other financial officers, such officers concluded that our disclosure controls and procedures were effective as of ~~August 27, 2016~~September 2, 2017 at the reasonable assurance level.

~~Index~~

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarter ended ~~August 27, 2016~~September 2, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II.OTHER INFORMATION

ITEM 1. LEGALPROCEEDINGS

Refer to the discussion of certain legal proceedings involving the Company and/or its subsidiaries in our Annual Report on Form 10-K for the year ended ~~May 28, 2016,~~June 3, 2017, under Part I, Item 3: Legal Proceedings, and Part II Item 8, Notes to Consolidated Financial Statements, Note ~~13:~~12: Contingencies, which discussions are incorporated herein by reference, as well as the following:

Litigation

Refer to the discussion of certain legal proceedings involving the Company and/or its subsidiaries in our Annual Report on Form 10-K for the year ended June 3, 2017, under Part I, Item 3: Legal Proceedings, and Part II Item 8, Notes to Consolidated Financial Statements, Note 12: Contingencies, which discussions are incorporated herein by reference, as well as the following:

Egg Antitrust Litigation

Since September 25, 2008, the Company has been named as one of several defendants in numerous antitrust cases involving the United States shell egg industry. In some of these cases, the named plaintiffs allege that they purchased eggs or egg products directly from a defendant and have sued on behalf of themselves and a putative class of others who claim to be similarly situated. In other cases, the named plaintiffs allege that they purchased shell eggs and egg products directly from one or more of the defendants but sue only for their own alleged damages and not on behalf of a putative class. In the remaining cases, the named plaintiffs are individuals or companies who allege that they purchased shell eggs indirectly from one or more of the defendants –- that is, they purchased from retailers that had previously purchased from defendants or other parties –- and have sued on behalf of themselves and a putative class of others who claim to be similarly situated.

The Judicial Panel on Multidistrict Litigation consolidated all of the putative class actions (as well as certain other cases in which the Company was not a named defendant) for pretrial proceedings in the United States District Court for the Eastern District of Pennsylvania. The Pennsylvania court ~~has~~ organized the putative class actions around two groups (direct purchasers and indirect purchasers) and ~~has~~ named interim lead counsel for the named plaintiffs in each group.

Index

The Direct Purchaser Putative Class Action. The direct purchaser putative class cases were consolidated into In re: Processed Egg Products Antitrust Litigation, No. 2:08-md-02002-GP, in the United States District Court for the Eastern District of Pennsylvania. As previously reported, in November 2014, the Court approved the Company’s settlement with the direct purchaser plaintiff class and entered final judgment dismissing with prejudice the class members’ claims against the Company.

The Indirect Purchaser Putative Class Action. The indirect purchaser putative class cases were consolidated into In re: Processed Egg Products Antitrust Litigation, No. 2:08-md-02002-GP, in the United States District Court for the Eastern District of Pennsylvania. On April 20-21, 2015, the Court held an evidentiary hearing on the indirect purchaser plaintiffs’ motion for class certification. On September 18, 2015, the Court denied the indirect purchaser plaintiffs’ motion for class certification of 21 separate classes seeking damages under the laws of 21 states, holding that the plaintiffs were not able to prove that their purported method for ascertaining class membership was reliable or administratively feasible, that common questions would predominate, or that their proposed class approach would be manageable in a single trial. In addition to barring any right to pursue a class monetary remedy under state law, the Court also denied indirect purchaser plaintiffs’ request for certification of an injunctive-relief class under federal law. However, the court allowed the indirect purchaser plaintiffs to renew their motion for class certification seeking a federal injunction. The plaintiffs filed their renewed motion to certify an injunctive-relief class on October 23, 2015. The Company joined the other defendants in opposing that motion on November 20. The plaintiffs filed their reply memorandum on December 11, ~~2015. The plaintiffs requested oral argument~~2015, and on ~~their~~March 7, 2017, the Court heard arguments on the renewed motion for injunctive class certification. On June 27, 2017, the Court denied plaintiffs’ renewed motion for injunctive class certification. The plaintiffs also filed a petition with the United States Court of Appeals for the Third Circuit, asking the court to hear an immediate appeal of the trial court’s denial of the motion to certify 21 state-law damages classes. On December 3, 2015, the Third Circuit entered an order staying its consideration of the plaintiffs’ request for an immediate appeal of the damages-class ruling pending the trial court’s resolution of the plaintiffs’ renewed motion to certify an injunctive-relief class.

~~Index~~

On July ~~2, 2015,~~11, 2017 the plaintiffs filed a petition with the Third Circuit asking the court to hear an immediate appeal of the June 27 order denying plaintiffs’ renewed motion for injunctive class certification. On July 21, 2017, the Company joined other defendants in a response filed ~~and joined several motions for summary judgment that sought~~with the Third Circuit opposing the plaintiffs' latest petition. The Third Circuit has not yet ruled on either dismissal of the entire case or, in the alternative, dismissal of portions of the case. On July 2, 2015, the indirect purchaser plaintiffs filed motions for summary judgment seeking dismissal of certain affirmative defenses based on statutory immunities from federal and state antitrust laws. The Court heard oral argument on the motions for summary judgment on February 22 and 23, 2016. On September 9, 2016, the Court granted in part the Company’s motion for summary judgment on liability, dismissing as a matter of law the plaintiffs’ allegations of a side agreement to cease construction of new facilities and ruling that the plaintiffs’ allegations against the United Egg Producers (UEP) animal-welfare guidelines must be evaluated at trial under the rule of reason. On September 13, 2016, the Court granted in part the plaintiffs’ motion for summary judgment as to the applicability of the Capper-Volstead defense, ruling that United States Egg Marketers (an industry cooperative of which the Company is a member) may invoke the defense at trial but that UEP (another industry cooperative of which the Company is a member) cannot. The Capper-Volstead defense is a defense pursuant to the Capper-Volstead Act (the Co-operative Marketing Associations Act), enacted by Congress in 1922, which gives certain associations of farmers certain exemptions from antitrust laws.

petition.

The Non-Class Cases. Six of the cases in which plaintiffs do not seek to certify a class have been consolidated with the putative class actions into In re: Processed Egg Products Antitrust Litigation, No. 2:08-md-02002-GP, in the United States District Court for the Eastern District of Pennsylvania. The court granted with prejudice the defendants’ renewed motion to dismiss the non-class plaintiffs’ claims for damages arising before September 24, 2004. On July 2, 2015, the Company filed and joined several motions for summary judgment that sought either dismissal of all of the claims in all of these cases or, in the alternative, dismissal of portions of these cases. On July 2, 2015, the non-class plaintiffs filed a motion for summary judgment seeking dismissal of certain affirmative defenses based on statutory immunities from federal antitrust law. The Court heard oral argument on the motions for summary judgment on February 22 and 23, 2016. On September 6, 2016, the Court granted the defendants’ motion for summary judgment against the plaintiffs’ claims arising from their purchases of egg products, dismissing those claims with prejudice. On September 9, 2016, the Court granted in part the Company’s motion for summary judgment on liability, dismissing as a matter of law the plaintiffs’ allegations of a side agreement to cease construction of new facilities and ruling that the plaintiffs’ allegations against ~~the UEP~~United Egg Producers’ (UEP) animal-welfare guidelines must be evaluated at trial under the rule of reason. On September 12, 2016, the Court granted in part the Company’s motion for summary judgment on damages, ruling that plaintiffs cannot recover damages onarising from purchases of eggs from non-defendants and cannot recover any relief onarising from eggs and egg products produced or sold in Arizona after October 1, 2009, the date that Arizona mandated that all eggs sold or produced in that state must be produced in compliance with the 2008 version of the UEP animal-welfare guidelines. On September 13, 2016, the Court granted in part the plaintiffs’ motion for summary judgment as to the applicability of the Capper-Volstead defense, ruling that United States Egg Marketers (an industry cooperative of which the Company is a member) may invoke the defense at trial but that UEP (another industry cooperative of which the Company is a member) cannot. The Capper-Volstead defense is a defense pursuant to the Capper-Volstead Act (the Co-operative Marketing Associations Act), enacted by Congress in 1922, which gives certain associations of farmers certain exemptions from antitrust laws. On October 4, 2016, certain direct action plaintiffs (Kraft Food Global, Inc., General Mills, Inc., Nestle USA, Inc., and The Kellogg Company) filed an appeal to the

Index

United States Court of Appeals for the Third Circuit from the District Court’s Order dated September 6, 2016, granting defendants’ motion for summary judgment and dismissing with prejudice all claims based on the purchase of egg products. These plaintiffs filed their opening brief on March 7, 2017. The defendants filed their response brief on April 20. These plaintiffs filed their reply brief on May 18. The court of appeals heard oral argument on July 11, 2017, but has not issued a ruling. On November 22, 2016, the non-class plaintiffs filed a motion asking the Court to hold a status conference and asking the court to set the non-class cases for trial in June of 2017. The parties in all of the remaining class and non-class cases submitted several different proposed trial schedules to the court, and a status conference was held on February 9, 2017. On August 11, 2017, the Company and certain other defendants filed a motion to exclude damage calculations by direct action plaintiffs’ expert, Dr. Baye. The direct action plaintiffs filed a motion to strike on August 25, 2017, and then filed a memorandum in support thereof on August 28, 2017. On September 8, the Company and the other moving defendants filed a response to the plaintiffs’ motion to strike. The court has scheduled a hearing on these latest motions for October 25, 2017.

Allegations in Each Case. In all of the cases described above, the plaintiffs allege that the Company and certain other large domestic egg producers conspired to reduce the domestic supply of eggs in a concerted effort to raise the price of eggs to artificially high levels. In each case, plaintiffs allege that all defendants agreed to reduce the domestic supply of eggs by: (a) agreeing to limit production; (b) manipulating egg exports; and (c) implementing industry-wide animal welfare guidelines that reduced the number of hens and eggs.

The named plaintiffs in the remaining indirect purchaser putative class action seek treble damages under the statutes and common-law of various states and injunctive relief under the Sherman Act on behalf of themselves and all other putative class members in the United States. Although plaintiffs allege a class period starting in October, 2006 and running “through the present,” the Court denied the plaintiffs’ motion to certify classes seeking damages under the laws of 21 states and denied ~~without prejudice~~ the plaintiffs’ ~~motion to certify an injunctive-relief class, although the plaintiffs have filed a~~ renewed motion to certify an injunctive-relief class, as discussed above.

Five of the original six non-class cases remain pending against the Company. The principal plaintiffs in these cases are: The Kroger Co.; Publix Super Markets, Inc.; SUPERVALU, Inc.; Safeway, Inc.; Albertsons LLC; H.E. Butt Grocery Co.; The Great Atlantic & Pacific Tea Company, Inc.; Walgreen Co.; Hy-Vee, Inc.; and ~~Kraft Food Global,~~Giant Eagle, Inc.~~, General Mills, Inc., Nestle USA, Inc., and The Kellogg Company.~~ In four of these remaining non-class cases, the plaintiffs seek treble damages and injunctive relief under the Sherman Act. In one of those four cases, the plaintiffs purchased only egg products, and as noted above, the Court dismissed with prejudice all claims arising from the purchase of egg products. On October 4, 2016, the four plaintiffs in that case (Kraft Food Global, Inc., General Mills, Inc., Nestle USA, Inc., and The ~~Company does not know whether those plaintiffs will appeal~~Kellogg Company) appealed that ~~ruling.~~decision to the United States Court of Appeals for the Third Circuit. In the fifth remaining non-class case, the plaintiff seeks treble damages and injunctive relief under the Sherman Act and the Ohio antitrust act (known as the Valentine Act).

~~Index~~

The Pennsylvania court has entered a series of orders related to case management, discovery, class certification, summary judgment, and scheduling. The Court has also denied all four motions that the plaintiffs filed to exclude testimony from certain expert witnesses retained by the defendants. The ~~Pennsylvania court has not~~court’s latest Case Management Order (No. 23) was filed on September 20, 2017, and indicated that the non-class plaintiffs’ cases would be set afor trial ~~date for any of the Company’s remaining consolidated cases (non-class and indirect purchaser cases).~~

later in calendar year 2018.

The Company intends to continue to defend the remaining cases as vigorously as possible based on defenses which the Company believes are meritorious and provable. While management believes that the likelihood of a material adverse outcome in the overall egg antitrust litigation has been significantly reduced as a result of the settlements and rulings described above, there is still a reasonable possibility of a material adverse outcome in the remaining egg antitrust litigation. At the present time, however, it is not possible to estimate the amount of monetary exposure, if any, to the Company because of these cases. Accordingly, adjustments, if any, which might result from the resolution of these remaining legal matters, have not been reflected in the financial statements.

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,

Index

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.

At this time, it is not possible for us to predict the ultimate outcome of the matters set forth above.

ITEM 1A. RISKFACTORS

There have been no material changes in the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended ~~May 28, 2016.~~

June 3, 2017.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table is a summary of our first quarter ~~2017~~2018 share repurchases:

Total Number of

Maximum Number

Shares Purchased

of Shares that

Total Number

Average

as Part of Publicly

May Yet Be

of Shares

Price Paid

Announced Plans

Purchased Under the
Period
Purchased (1)

per Share

Or Programs

Plans or Programs
05/29/16 to 06/25/16
-

$ -

-

-
06/26/16 to 07/23/16
646

44.59

-

-
07/24/16 to 08/27/16
274

43.39

-

-

920

$ 44.23

-

-



				Total Number of	Maximum Number
				Shares Purchased	of Shares that
	Total Number	Average		as Part of Publicly	May Yet Be
	of Shares	Price Paid		Announced Plans	Purchased Under the
Period	Purchased (1)	per Share		Or Programs	Plans or Programs
06/04/17 to 07/01/17	519	$	39.60	—	—
07/02/17 to 07/29/17	—	—		—	—
07/30/17 to 09/02/17	—	—		—	—
	519	$	39.60	—	—

(1) As permitted under our 2012 Omnibus Long-term Incentive Plan, these shares were withheld by us to satisfy tax withholding obligations for employees in connection with the vesting of common stock.

ITEM 6. EXHIBITS

Exhibits

~~(1)~~

~~As permitted under our 2012 Omnibus Long-term Incentive Plan, these shares were withheld by us to satisfy tax withholding obligations for employees in connection with the vesting of common stock~~

~~Index~~

~~ITEM 6. EXHIBITS~~

~~Exhibits~~


~~No.~~	~~Description~~
~~3.1~~ No.		Description
3.1		Composite Certificate of Incorporation of the Company ~~(incorporated~~(incorporated by reference to Exhibit 3.1 in the Registrant’s Form 10-Q for the quarter ended November 29, 2014, filed December 29, 2014).
3.2		Composite Bylaws of the Company ~~(incorporated~~(incorporated by reference to Exhibit 3.2 in the Registrant’s Form 10-Q for the quarter ended March 2, 2013, filed April 5, 2013).
31.1*		Rule 13a-14(a) Certification of the Chief Executive Officer
31.2*		Rule 13a-14(a) Certification of the Chief Financial Officer
32**		Section 1350 Certification of the Chief Executive Officer and the Chief Financial Officer
99.1		Press release dated ~~September 26, 2016~~October 2, 2017 announcing interim period financial information (incorporated by reference to Exhibit 99.1 in the Company’s Form 8-K, filed on ~~September 26, 2016)~~ October 2, 2017)
101.INS*+		XBRL Instance Document Exhibit
101.SCH*+		XBRL Taxonomy Extension Schema Document Exhibit
101.CAL*+		XBRL Taxonomy Extension Calculation Linkbase Document Exhibit
101.LAB*+		XBRL Taxonomy Extension Label Linkbase Document Exhibit
101.PRE*+		XBRL Taxonomy Extension Presentation Linkbase Document

*		Filed herewith as an Exhibit.
**		Furnished herewith as an Exhibit.
+		Submitted electronically with this Quarterly Report.

Index

~~SIGNATURES~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CAL-MAINE FOODS, INC.

(Registrant)


~~Date: September 26, 2016~~
Date:	October 2, 2017	/s/ Timothy A. Dawson
		Timothy A. Dawson
		Vice President, Chief Financial Officer (Principal Financial Officer)

໿


~~Date: September 26, 2016~~
Date:	October 2, 2017	/s/ Michael D. Castleberry
		Michael D. Castleberry
		Vice President, Controller (Principal Accounting Officer)

໿



	August 27, 2016		May 28, 2016
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	37,646	$	29,046
Investment securities available-for-sale		269,202		360,499
Trade and other receivables (less allowance for doubtful accounts of
$944 and $727 at August 27, 2016 and May 28, 2016, respectively)		74,099		67,448
Income tax receivable		34,855		11,830
Inventories		154,621		154,799
Prepaid expenses and other current assets		3,530		2,661
Total current assets		573,953		626,283

Property, plant and equipment, net		404,787		392,274
Goodwill		29,196		29,196
Other investments		58,483		53,975
Other intangible assets		4,642		4,958
Other assets		4,911		5,079
TOTAL ASSETS	$	1,075,972	$	1,111,765

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	59,223	$	67,131
Current maturities of long-term debt		15,915		16,320
Total current liabilities		75,138		83,451

Long-term debt, less current maturities		8,125		9,250
Other noncurrent liabilities		6,380		6,321
Deferred income taxes		98,902		95,382
Total liabilities		188,545		194,404

Commitments and Contingencies - see Note 4

Stockholders’ equity:
Common stock, $0.01 par value, 120,000 and 70,261 shares authorized and issued
at August 27, 2016 and May 28, 2016, respectively
43,733 and 43,737 shares outstanding at August 27, 2016 and May 28, 2016, respectively		703		703
Class A convertible common stock, $.01 par value, 4,800 shares authorized, issued
and outstanding at August 27, 2016 and May 28, 2016, respectively		48		48
Paid-in capital		47,254		46,404
Retained earnings		859,504		890,440
Accumulated other comprehensive income (loss), net of tax		263		(48)
Common stock in treasury at cost – 26,527 and 26,524 shares at August 27, 2016
and May 28, 2016, respectively		(22,314)		(22,272)
Total Cal-Maine Foods, Inc. stockholders’ equity		885,458		915,275
Noncontrolling interest in consolidated entities		1,969		2,086
Total stockholders’ equity		887,427		917,361
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,075,972	$	1,111,765



	13 Weeks Ended
	August 27, 2016		August 29, 2015
Net sales	$	239,845	$	609,895
Cost of sales		249,414		346,824
Gross profit (loss)		(9,569)		263,071
Selling, general, and administrative expense		40,256		42,963
Operating income (loss)		(49,825)		220,108
Other income (expense):
Interest income, net		1,091		27
Royalty income		406		606
Equity in income of affiliates		191		730
Other, net		(403)		(814)
		1,285		549

Income (loss) before income taxes and noncontrolling interest		(48,540)		220,657
Income tax expense (benefit)		(17,560)		76,567
Net income (loss) before noncontrolling interest		(30,980)		144,090
Less: Net income (loss) attributable to noncontrolling interest		(44)		1,067
Net income (loss) attributable to Cal-Maine Foods, Inc.	$	(30,936)	$	143,023

Net income (loss) per common share attributable to Cal-Maine Foods, Inc.:
Basic	$	(0.64)	$	2.97
Diluted	$	(0.64)	$	2.95
Dividends per common share	$	-	$	0.983
Weighted average shares outstanding:
Basic		48,249		48,163
Diluted		48,249		48,498


	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding, May 28, 2016		288,900	$	35.97
Vested		(2,960)		29.41
Forfeited		(2,140)		41.64
Outstanding, August 27, 2016		283,800	$	35.99



		Cal-Maine Foods, Inc. Stockholders
		Common Stock
				Class A		Treasury		Paid In		Accum. Other		Retained		Noncontrolling
		Amount		Amount		Amount		Capital		Comp. Loss		Earnings		Interest		Total
Balance at May 28, 2016	$	703	$	48	$	(22,272)	$	46,404	$	(48)	$	890,440	$	2,086	$	917,361
Other comprehensive loss, net of tax		-		-		-		-		311		-		-		311
Forfeiture of restricted stock		-		-		(2)		2		-		-		-		-
Buyback of 920 shares to satisfy withholding obligation in connection with the vesting of restricted stock		-		-		(40)		-		-		-				(40)
Distribution to noncontrolling interest partners		-		-		-		-		-		-		(73)		(73)
Restricted stock compensation		-		-		-		848		-		-		-		848
Net income		-		-		-		-		-		(30,936)		(44)		(30,980)
Balance at August 27, 2016	$	703	$	48	$	(22,314)	$	47,254	$	263	$	859,504	$	1,969	$	887,427