Cal-Maine Foods 10Q 2025 Q2 Quarterly report

Index

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC

20549

FORM

10-Q

☑

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

For the quarterly period ended

November 30, 2024

☐

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:

001-38695

CAL-MAINE FOODS, INC.

(Exact name of registrant as specified in its charter)

Delaware

64-0500378

(State or other jurisdiction of incorporation or organization)

(I.R.S Employer Identification No.)

1052 Highland Colony Pkwy

Suite 200

Ridgeland

Mississippi

39157

(Address of principal executive offices)

(Zip Code)

(

601

)

948-6813

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value per share

CALM

The

NASDAQ

Global Select Market

Indicate

check

mark

whether

the

registrant: (1)

has

filed

all

reports

required

filed

Section

15(d)

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

☑

☐

Indicate by check mark

whether the registrant has

submitted electronically every Interactive Data

File required to be

submitted

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 such files).

Yes

☑

☐

Indicate by check

mark whether the

registrant is a

large accelerated filer,

an accelerated filer,

a non-accelerated filer,

a smaller

reporting

company,

emerging

growth

company.

See

the

definitions

“large

accelerated

filer,”

“accelerated

filer,”

“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer

☑

Accelerated filer

☐

Non – Accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

emerging

growth

company,

indicate

check

mark

the

registrant

has

elected

not

use

the

extended

transition

period

for

complying

with

any

new

revised

financial

accounting

standards

provided

pursuant

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

☐

☑

There were

44,235,087

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 January 7, 2025.

Index

INDEX

Page

Number

Part I.

Financial Information

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets -

November 30, 2024 and June 1, 2024

Condensed Consolidated Statements of Income -

Thirteen and Twenty-six Weeks Ended November 30, 2024 and December 2, 2023

Condensed Consolidated Statements of Comprehensive Income -

Thirteen and Twenty-six Weeks Ended November 30, 2024 and December 2, 2023

Condensed Consolidated Statements of Cash Flows -

Thirteen and Twenty-six Weeks Ended November 30, 2024 and December 2, 2023

Notes to Condensed Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Part II.

Other Information

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 6.

Exhibits

Signatures

Index

PART

FINANCIAL

INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except for par value amounts)

(Unaudited)

November 30, 2024

June 1, 2024

Assets

Current assets:

Cash and cash equivalents

140,296

237,878

Investment securities available-for-sale

656,887

574,499

Trade and other receivables, net

307,292

151,983

Income tax receivable

10,459

Inventories

299,365

261,782

Prepaid expenses and other current assets

10,296

5,238

Total current assets

1,424,595

1,241,839

Property, plant & equipment, net

975,603

857,234

Investments in unconsolidated entities

11,043

11,195

Goodwill

45,776

Intangible assets, net

16,210

15,996

Other long-term assets

16,872

12,721

Total Assets

2,490,099

2,184,761

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

116,835

75,862

Accrued wages and benefits

28,519

32,971

Accrued income taxes payable

20,787

43,348

Dividends payable

73,013

37,760

Accrued expenses and other liabilities

21,597

37,802

Total current liabilities

260,751

227,743

Other noncurrent liabilities

48,548

17,109

Deferred income taxes, net

129,317

142,866

Total liabilities

438,616

387,718

Commitments and contingencies - see Note 10

—

Stockholders’ equity:

Common stock ($

0.01

par value):

Common stock - authorized

120,000

shares, issued

70,261

703

Class A convertible common stock - authorized and issued

4,800

Paid-in capital

78,600

76,371

Retained earnings

1,998,585

1,756,395

Accumulated other comprehensive loss, net of tax

(908)

(1,773)

Common stock in treasury at cost –

26,026

shares at November 30, 2024 and

26,022

shares at June 1, 2024

(31,661)

(31,597)

Total Cal-Maine Foods, Inc. stockholders’ equity

2,045,367

1,800,147

Noncontrolling interest in consolidated entity

6,116

(3,104)

Total stockholders’ equity

2,051,483

1,797,043

Total Liabilities and Stockholders’ Equity

2,490,099

2,184,761

See Notes to Condensed Consolidated Financial Statements.

Index

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(In thousands, except per share amounts)

(Unaudited)

Thirteen Weeks Ended

Twenty-six Weeks

Ended

November 30, 2024

December 2, 2023

November 30, 2024

December 2, 2023

Net sales

954,671

523,234

1,740,542

982,578

Cost of sales

598,629

432,104

1,137,282

846,015

Gross profit

356,042

91,130

603,260

136,563

Selling, general and administrative

77,633

76,578

139,565

128,824

Loss on involuntary conversions

—

156

—

(Gain) loss on disposal of fixed assets

338

318

(1,479)

262

Operating income

278,061

14,234

465,018

7,477

Other income (expense):

Interest income, net

9,770

6,987

19,555

14,333

Other, net

1,130

897

2,341

1,041

Total other income, net

10,900

7,884

21,896

15,374

Income before income taxes

288,961

22,118

486,914

22,851

Income tax expense

70,602

5,540

118,965

5,862

Net income

218,359

16,578

367,949

16,989

Less: Loss attributable to noncontrolling

interest

(705)

(431)

(1,091)

(946)

Net income attributable to Cal-Maine Foods,

Inc.

219,064

17,009

369,040

17,935

Net income per common share:

Basic

4.49

0.35

7.57

0.37

Diluted

4.47

0.35

7.54

0.37

Weighted average shares outstanding:

Basic

48,765

48,690

48,762

48,691

Diluted

48,970

48,866

48,953

48,854

See Notes to Condensed Consolidated Financial Statements.

Index

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of

Comprehensive Income

(In thousands)

(Unaudited)

Thirteen Weeks Ended

Twenty-six Weeks

Ended

November 30, 2024

December 2, 2023

November 30, 2024

December 2, 2023

Net income

218,359

16,578

367,949

16,989

Other comprehensive income (loss), before

tax:

Unrealized holding gain (loss) on available-

for-sale securities, net of reclassification

adjustments

(573)

895

1,142

1,681

Income tax benefit (expense) related to

items of other comprehensive income

139

(218)

(277)

(409)

Other comprehensive income (loss), net of tax

(434)

677

865

1,272

Comprehensive income

217,925

17,255

368,814

18,261

Less: Comprehensive loss attributable to the

noncontrolling interest

(705)

(431)

(1,091)

(946)

Comprehensive income attributable to Cal-

Maine Foods, Inc.

218,630

17,686

369,905

19,207

See Notes to Condensed Consolidated Financial Statements.

Index

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Twenty-six Weeks

Ended

November 30, 2024

December 2, 2023

Cash flows from operating activities:

Net income

367,949

16,989

Depreciation and amortization

45,818

39,394

Deferred income taxes

(13,825)

5,862

Other adjustments, net

(159,791)

11,407

Net cash provided by operations

240,151

73,652

Cash flows from investing activities:

Purchases of investment securities

(501,567)

(43,569)

Sales and maturities of investment securities

426,500

196,104

Investment in unconsolidated entities

—

(363)

Distributions from unconsolidated entities

750

—

Acquisition of business

(111,521)

(53,746)

Purchases of property, plant and equipment

(65,588)

(65,774)

Net proceeds from disposal of property, plant and equipment

4,004

150

Net cash provided by (used in) investing activities

(247,422)

32,802

Cash flows from financing activities:

Payments of dividends

(87,774)

(37,276)

Purchase of common stock by treasury

(60)

(5)

Principal payments on long-term debt

(2,477)

—

Principal payments on finance lease

—

(214)

Net cash used in financing activities

(90,311)

(37,495)

Net change in cash and cash equivalents

(97,582)

68,959

Cash and cash equivalents at beginning of period

237,878

292,824

Cash and cash equivalents at end of period

140,296

361,783

See Notes to Condensed Consolidated Financial Statements.

Index

Cal-Maine Foods, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 - Summary of Significant Accounting Policies

Basis of Presentation

The

unaudited

condensed

consolidated

financial

statements

Cal-Maine

Foods,

Inc.

and

its

subsidiaries

(the

“Company,”

“we,” “us,” “our”) have

been prepared in accordance

with the instructions to

Form 10-Q and Article

10 of Regulation S-X

and

in accordance

with generally

accepted accounting

principles in

the United

States of

America (“GAAP”)

for interim

financial

reporting and should

be read in

conjunction with our

Annual Report on

Form 10-K for

the fiscal year

ended June 1,

2024 (the

“2024

Annual Report”).

These

statements

reflect

all

adjustments

that

are,

the

opinion

management,

necessary

fair

statement of the results for the interim periods presented and,

in the opinion of management, consist of adjustments of a

normal

recurring nature. Operating results

for the interim periods

are not necessarily indicative

of operating results for

the entire fiscal

year.

Fiscal Year

The Company’s

fiscal year

ends on

the Saturday

closest to

May 31.

Each of

the three-month

periods and

year-to-date periods

ended on November 30, 2024 and December 2, 2023 included

and

26 weeks

, respectively.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make

estimates and

assumptions that

affect the

amounts reported

in the

consolidated financial

statements and

accompanying notes.

Actual results

could differ from those estimates.

Investment Securities Available-for-Sale

The Company has

determined that its

debt securities

are available-for-sale

investments. We

classify these securities

as current

because the

amounts invested

are available

for current

operations. Available

-for-sale securities

are carried

at fair

value, based

on quoted market prices as of the balance sheet

date, with unrealized gains and losses recorded in other comprehensive income.

The

amortized cost

debt

securities is

adjusted

for

amortization of

premiums and

accretion of

discounts

maturity and

recorded in interest income. The Company regularly evaluates

changes to the rating of its debt

securities by credit agencies and

economic conditions to

assess and record

any expected credit

losses through allowance

for credit losses,

limited to the

amount

that fair value was less than the amortized cost basis.

The cost basis

for realized gains

and losses on

available-for-sale securities is

determined by the

specific identification method.

Gains

and

losses

are

recognized

other

income

(expenses)

Other,

net

the

Company’s

Condensed

Consolidated

Statements of Income. Interest and dividends on securities classified as available-for-sale are recorded in interest income.

Trade Receivables

Trade

receivables are

stated at

their carrying

values, which

include a

reserve for

credit losses.

As of

November 30,

2024 and

June 1,

2024, reserves

for credit

losses were

767

thousand and

490

thousand, respectively.

The Company

extends credit

customers based on an evaluation of each

customer’s financial condition and credit history.

Collateral is generally not required.

The

Company

minimizes

exposure

counter

party

credit

risk

through

credit

analysis

and

approvals,

credit

limits,

and

monitoring

procedures.

determining

our

reserve

for

credit

losses,

receivables

are

assigned

expected

loss

based

historical loss information adjusted as needed for economic and other forward-looking factors.

Dividends Payable

accrue dividends at the

end of each quarter

according to the Company’s

dividend policy adopted by its

Board of Directors.

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

GAAP

in an amount equal

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 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.

Index

Following a quarter for which the Company does not report net income attributable to Cal-Maine Foods, Inc., the Company will

not pay a dividend for a subsequent

profitable quarter until the Company is profitable on

a cumulative basis computed from the

date of the most recent quarter for which a dividend was paid. The dividend policy is subject to periodic review by the Board of

Directors.

Revenue Recognition

The Company

recognizes revenue

through sale

of its

products to

customers through

retail, foodservice

and other

distribution

channels.

The

majority

the

Company’s

revenue

derived

from

agreements

contracts

with

customers

based

upon

the

customer

ordering

its

products

with

single

performance

obligation

delivering

the

product.

The

Company

believes

the

performance

obligation

met

upon

delivery

and

acceptance

the

product

our

customers,

which

generally

occurs

upon

shipment

delivery

customer

based

terms

the

sale.

Costs

paid

third

party

brokers

obtain

agreements

are

expensed as the Company’s agreements are generally less than one year.

Revenues are

recognized in

an amount

that reflects

the net

consideration we

expect to

receive in

exchange for

delivery of

the

products.

The

Company

periodically

offers

sales

incentives

other

programs

such

rebates,

discounts,

coupons,

volume-

based incentives, guaranteed sales

and other programs.

The Company records an

estimated allowance for costs

associated with

these programs, which is recorded as

a reduction in revenue at the

time of sale using historical trends

and projected redemption

rates

each

program.

The

Company

regularly

reviews

these

estimates

and

any

difference

between

the

estimated

costs

and

actual realization of these programs would be recognized the subsequent period.

Business Combinations

The Company applies the acquisition method of accounting, which requires that once control is obtained, all

the assets acquired

and liabilities assumed, including amounts

attributable to noncontrolling interests, are

recorded at their respective fair

values at

the date of acquisition. We determine the fair values of identifiable assets and liabilities internally,

which requires estimates and

the

use

various

valuation

techniques.

When

market

value

not

readily

available,

our

internal

valuation

methodology

considers the remaining estimated life of the assets acquired and what management believes is the market value for those assets.

typically use the income method approach for intangible assets

acquired in a business combination. Significant estimates in

valuing

certain

intangible

assets

include,

but

are

not

limited

to,

the

amount

and

timing

future

cash

flows,

growth

rates,

discount rates and useful lives. The

excess of the purchase price over

fair values of identifiable assets and

liabilities is recorded

as goodwill.

Loss Contingencies

Certain

conditions

may

exist

the

date

the

consolidated

financial

statements

are

issued

that

may

result

loss

the

Company but which will

only be resolved when

one or more future

events occur or fail

to occur.

The Company’s

management

and

its

legal

counsel

assess

such

contingent

liabilities,

and

such

assessment

inherently

involves

exercise

judgment.

assessing loss

contingencies related

to legal

proceedings that

are pending

against the

Company or

unasserted claims

that may

result in such

proceedings, the Company’s

legal counsel evaluates

the perceived merits

of any

legal proceedings or

unasserted

claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment

of a contingency

indicates it is

probable that a

material loss has

been incurred and

the amount of

the liability

can

estimated,

the

estimated

liability

would

accrued

the

Company’s

consolidated

financial

statements.

the

assessment

indicates

potentially

material

loss

contingency

not

probable,

but

reasonably

possible,

probable

but

cannot

estimated,

then

the

nature

the

contingent

liability,

together

with

estimate

the

range

possible

loss

determinable and

material, would

be disclosed.

Loss contingencies

considered remote

are generally

not disclosed

unless they

involve guarantees, in which case the nature of the guarantee would be disclosed.

The Company expenses the costs of litigation as they are incurred.

New Accounting Pronouncements and Policies

No new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our

Consolidated Financial Statements.

Index

Note 2 - Acquisitions

Acquisition of ISE America, Inc. Assets

Effective

June 28, 2024

, the

Company acquired

substantially all

of the

commercial shell

egg production,

processing and

egg

products breaking facilities

of ISE America,

Inc. and certain

of its affiliates

(“ISE”). The assets

acquired included commercial

shell

egg

production

and

processing

facilities

with

capacity

the

time

acquisition

approximately

4.7

million

laying

hens, including

1.0

million cage-free, and

1.2

million pullets, feed mills,

approximately

4,000

acres of land, inventories

and an

egg products breaking facility. The acquired assets also include an extensive customer distribution network across the Northeast

and

Mid-Atlantic

states,

and

production

operations

Maryland,

New

Jersey,

Delaware

and

South

Carolina.

The

Company

accounted for the acquisition as a business combination.

Pending the

finalization of

the Company’s

valuation, the following

table summarizes

the consideration paid

for the

ISE assets

and the amounts of assets acquired and liabilities assumed recognized at the acquisition date (in thousands):

Cash consideration paid

111,521

Recognized amounts of identifiable assets acquired and liabilities assumed

Inventories

20,547

Property, plant and equipment

90,572

Intangible assets

710

Liabilities assumed

(308)

Total identifiable net assets

111,521

Inventories consisted primarily of flock, feed ingredients, packaging, and egg inventory. Flock inventory was valued at carrying

value

management

believes

that

its

carrying

value

best

approximates

its

fair

value.

Feed

ingredients,

packaging

and

egg

inventory were all valued based on market prices as of June 28, 2024.

Property,

plant and

equipment were valued

utilizing the

cost approach which

is based on

replacement or reproduction

costs of

the assets and subtracting any depreciation resulting from physical deterioration and/or functional or economic obsolescence.

Intangible

assets

consisted

primarily

customer

lists

acquired.

Customers

lists

were

valued

using

the

income

method

approach.

Other Acquisitions

Effective

November

30,

2024,

the

Company

acquired

the

remaining

9.23

interest

our

majority-owned

subsidiary,

MeadowCreek Foods LLC.

Note 3 - Investment

Securities

The following represents the Company’s investment securities as of November 30, 2024 and June 1, 2024 (in thousands):

November 30, 2024

Amortized

Cost

Unrealized

Gains

Unrealized

Losses

Estimated

Fair Value

Municipal bonds

13,727

—

13,705

Commercial paper

71,143

—

71,148

Corporate bonds

301,630

190

—

301,820

Certificates of deposits

5,606

—

5,607

US government and agency obligations

151,606

—

204

151,402

Asset backed securities

643

—

647

Treasury bills

112,569

—

112,558

Total current investment securities

656,924

200

237

656,887

Index

June 1, 2024

Amortized

Cost

Unrealized

Gains

Unrealized

Losses

Estimated

Fair Value

Municipal bonds

4,100

—

4,059

Commercial paper

137,856

—

121

137,735

Corporate bonds

233,289

—

697

232,592

Certificates of deposits

3,505

—

3,491

US government and agency obligations

154,520

—

251

154,269

Asset backed securities

3,154

—

3,124

Treasury bills

39,239

—

39,229

Total current investment securities

575,663

—

1,164

574,499

Available-for-sale

Proceeds from

sales and

maturities of

investment securities

available-for-sale

were $

426.5

million and

196.1

million during

the twenty-six

weeks ended November

30, 2024

and December

2, 2023,

respectively.

Gross realized

gains for

the twenty-six

weeks ended November 30, 2024 and December 2, 2023 were $

thousand and $

thousand, respectively. There were

gross

realized

losses

for

the

twenty-six

weeks

ended

November

30,

2024.

Gross

realized

losses

for

the

twenty-six

weeks

ended

December 2, 2023 were $

thousand. There was

allowance for credit losses at November 30, 2024 and June 1, 2024.

Actual maturities may differ

from contractual maturities as

some borrowers have

the right to call

or prepay obligations

with or

without penalties. Contractual maturities of current investments at November 30, 2024 are as follows (in thousands):

Estimated Fair Value

Within one year

401,873

1-5 years

255,014

Total

656,887

Note 4 - Fair Value Measurements

The Company

is required

to categorize

both financial

and nonfinancial

assets and

liabilities based

on the

following fair

value

hierarchy. The

fair value

of an

asset is

the price

at which

the asset

could be

sold in

an orderly

transaction between

unrelated,

knowledgeable, and willing parties able to engage in the

transaction. A liability’s fair value

is defined as the amount that would

be paid

to transfer

the liability

to a

new obligor

in a

transaction between

such parties,

not

the amount

that would

be paid

settle the liability with the creditor.

•

Level 1

- Quoted prices in active markets for identical assets or liabilities

•

Level 2

- Inputs

other than

quoted prices

included in

Level 1

that are

observable for

the asset

or liability,

either

directly or indirectly, including:

◦

Quoted prices for similar assets or liabilities in active markets

◦

Quoted prices for identical or similar assets in non-active markets

◦

Inputs other than quoted prices that are observable for the asset or liability

◦

Inputs derived principally from or corroborated by other observable market data

•

Level 3

- Unobservable inputs for the asset or liability that are supported by little or no market activity and that are

significant to the fair value of the assets or liabilities

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

Cash and cash equivalents, accounts receivable, and accounts payable:

The carrying amount approximates fair value due to the

short maturity of these instruments.

Index

Assets and Liabilities Measured at Fair Value

on a Recurring Basis

accordance with

the

fair value

hierarchy described

above, the

following

table shows

the

fair value

financial assets

and

liabilities measured at fair value on a recurring basis as of November 30, 2024 and June 1, 2024 (in thousands):

November 30, 2024

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

—

13,705

—

13,705

Commercial paper

—

71,148

—

71,148

Corporate bonds

—

301,820

—

301,820

Certificates of deposits

—

5,607

—

5,607

US government and agency obligations

—

151,402

—

151,402

Asset backed securities

—

647

—

647

Treasury bills

—

112,558

—

112,558

Total assets measured at fair value

—

656,887

—

656,887

Liabilities

Contingent consideration

—

13,000

Total liabilities measured at fair value

—

13,000

June 1, 2024

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

—

4,059

—

4,059

Commercial paper

—

137,735

—

137,735

Corporate bonds

—

232,592

—

232,592

Certificates of deposits

—

3,491

—

3,491

US government and agency obligations

—

154,269

—

154,269

Asset backed securities

—

3,124

—

3,124

Treasury bills

—

39,229

—

39,229

Total assets measured at fair value

—

574,499

—

574,499

Liabilities

Contingent consideration

—

6,500

Total liabilities measured at fair value

—

6,500

Investment securities

–

available-for-sale

classified as

Level 2

consist of

securities with

maturities of

three months

or longer

when purchased. We

classified these securities as current because amounts invested are readily available

for current operations.

Observable inputs for these securities are yields, credit risks, default rates, and volatility.

Contingent consideration

classified as

Level 3

consists of

the potential

obligation to

pay an

earnout to

Fassio Egg

Farms, Inc.

(“Fassio”)

contingent

the

acquired

business

meeting

certain

return

profitability

milestones

over

three-year

period,

commencing on the date of the acquisition in the second quarter of fiscal

2024. The fair value of the contingent consideration is

estimated

using

discounted

cash

flow

model.

Key

assumptions

and

unobservable

inputs

that

require

significant

judgement

used

the

estimate

include

weighted

average

cost

capital,

egg

prices,

projected

revenue

and

expenses

over

which

the

contingent considered

is measured,

and the

probability assessments

with respect

to the

likelihood of

achieving the

forecasted

projections.

The following table shows the beginning and ending balances in fair value of the contingent consideration:

Fassio Contingent Consideration

Balance, June 1, 2024

6,500

Fair value adjustments

6,500

Balance, November 30, 2024

13,000

Index

Adjustments to the fair value of contingent consideration are recorded within selling, general and administrative expenses in the

condensed consolidated statements of income.

Note 5 - Inventories

Inventories consisted of the following as of November 30, 2024 and June 1, 2024 (in thousands):

November 30, 2024

June 1, 2024

Flocks, net of amortization

166,634

149,985

Eggs and egg products

34,182

25,217

Feed and supplies

98,549

86,580

299,365

261,782

grow

and

maintain

flocks

layers

(mature

female

chickens),

pullets

(female

chickens,

under

weeks

age),

and

breeders

(male

and

female

chickens

used

produce

fertile

eggs

hatch

for

egg

production

flocks).

Our

total

flock

November 30,

2024 and

June 1,

2024 consisted

of approximately

12.0

million and

11.8

million pullets

and breeders

and

48.1

million and

39.9

million layers, respectively.

Note 6 - Equity

The following reflects equity activity for the thirteen weeks ended November 30, 2024 and December 2, 2023 (in thousands):

Thirteen Weeks Ended November 30, 2024

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum.

Other

Retained

Noncontrolling

Amount

Capital

Comp. Loss

Earnings

Interest

Total

Balance at August 31,

2024

703

(31,632)

77,503

(474)

1,856,405

(3,490)

1,899,063

Other comprehensive

income, net of tax

—

(434)

—

(434)

Stock compensation

plan transactions

—

(29)

1,097

—

1,068

Contributions to

Crepini Foods LLC

—

6,485

Aquisition of

noncontrolling

interest in

MeadowCreek Foods

LLC

—

(3,826)

3,826

—

Dividends ($

1.489

per share)

Common

—

(65,911)

—

(65,911)

Class A common

—

(7,147)

—

(7,147)

Net income (loss)

—

219,064

(705)

218,359

Balance at November

30, 2024

703

(31,661)

78,600

(908)

1,998,585

6,116

2,051,483

Index

Thirteen Weeks Ended December 2, 2023

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum.

Other

Retained

Noncontrolling

Amount

Capital

Comp. Loss

Earnings

Interest

Total

Balance at September

2, 2023

703

(30,014)

73,153

(2,291)

1,571,744

(2,013)

1,611,330

Other comprehensive

income, net of tax

—

677

—

677

Stock compensation

plan transactions

—

1,061

—

1,061

Dividends ($

0.116

per share)

Common

—

(5,125)

—

(5,125)

Class A common

—

(557)

—

(557)

Net income (loss)

—

17,009

(431)

16,578

Balance at December

2, 2023

703

(30,014)

74,214

(1,614)

1,583,071

(2,444)

1,623,964

Twenty-six Weeks

Ended November 30, 2024

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum.

Other

Retained

Noncontrolling

Amount

Capital

Comp. Loss

Earnings

Interest

Total

Balance at June 1,

2024

703

(31,597)

76,371

(1,773)

1,756,395

(3,104)

1,797,043

Other comprehensive

income, net of tax

—

865

—

865

Stock compensation

plan transactions

—

(64)

2,229

—

2,165

Contributions to

Crepini Foods LLC

—

6,485

Aquisition of

noncontrolling

interest in

MeadowCreek Foods

LLC

—

(3,826)

3,826

—

Dividends ($

2.509

per share)

Common

—

(110,986)

—

(110,986)

Class A common

—

(12,038)

—

(12,038)

Net income (loss)

—

369,040

(1,091)

367,949

Balance at November

30, 2024

703

(31,661)

78,600

(908)

1,998,585

6,116

2,051,483

Index

Twenty-six Weeks

Ended December 2, 2023

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum.

Other

Retained

Noncontrolling

Amount

Capital

Comp. Loss

Earnings

Interest

Total

Balance at June 3,

2023

703

(30,008)

72,112

(2,886)

1,571,112

(1,498)

1,609,583

Other comprehensive

loss, net of tax

—

1,272

—

1,272

Stock compensation

plan transactions

—

(6)

2,102

—

2,096

Dividends ($

0.122

per share)

Common

—

(5,390)

—

(5,390)

Class A common

—

(586)

—

(586)

Net income (loss)

—

17,935

(946)

16,989

Balance at December

2, 2023

703

(30,014)

74,214

(1,614)

1,583,071

(2,444)

1,623,964

Note 7 - Net Income per Common Share

Basic net income per

share is based on

the weighted average Common Stock

and Class A Common

Stock outstanding. Diluted

net

income

per

based

weighted-average

common

outstanding

during

the

relevant

period

adjusted

for

the

dilutive effect of share-based awards.

The

following

table

provides

reconciliation

the

numerators

and

denominators

used

determine

basic

and

diluted

net

income per common share (amounts in thousands, except per share data):

Thirteen Weeks Ended

Twenty-six Weeks

Ended

November 30, 2024

December 2, 2023

November 30, 2024

December 2, 2023

Numerator

Net income

218,359

16,578

367,949

16,989

Less: Loss attributable to

noncontrolling interest

(705)

(431)

(1,091)

(946)

Net income attributable to Cal-Maine

Foods, Inc.

219,064

17,009

369,040

17,935

Denominator

Weighted-average common shares

outstanding, basic

48,765

48,690

48,762

48,691

Effect of dilutive restricted shares

205

176

191

163

Weighted-average common shares

outstanding, diluted

48,970

48,866

48,953

48,854

Net income per common share

attributable to Cal-Maine Foods, Inc.

Basic

4.49

0.35

7.57

0.37

Diluted

4.47

0.35

7.54

0.37

Index

Note 8 - Revenue from Contracts with Customers

Net revenue is primarily generated through the sales of shell eggs and egg products. The Company’s shell egg product offerings

include specialty and conventional shell eggs.

Specialty shell eggs include cage-free, organic,

brown, free-range, pasture-raised

and nutritionally enhanced eggs. Conventional shell egg sales represent all other shell egg sales not

sold as specialty shell eggs.

The Company’s

egg products

offerings include

liquid and

frozen egg

products, as

well as

ready-to-eat products

such as

hard-

cooked

eggs,

egg

wraps,

protein

pancakes,

crepes

and

wrap-ups.

Liquid

and

frozen

egg

products

are

primarily

sold

the

institutional,

foodservice

and

food

manufacturing

sectors.

Ready-to-eat

products

are

sold

primarily

within

the

retail

and

foodservice channels.

The following table provides revenue disaggregated by product category (in thousands):

Thirteen Weeks Ended

Twenty-six Weeks

Ended

November 30, 2024

December 2, 2023

November 30, 2024

December 2, 2023

Conventional shell egg sales

616,891

280,599

1,101,627

505,879

Specialty shell egg sales

286,970

217,905

543,747

426,586

Egg products

40,651

20,012

75,826

42,235

Other

10,159

4,718

19,342

7,878

954,671

523,234

1,740,542

982,578

Note 9 - Stock Based Compensation

Total stock-based compensation expense was $

2.2

million and $

2.1

million for the twenty-six weeks ended November 30, 2024

and December 2, 2023, respectively.

Unrecognized compensation

expense as

a result

of non-vested

shares of

restricted stock

outstanding under

the Amended

and

Restated

2012

Omnibus

Long-Term

Incentive

Plan

November

30,

2024

5.1

million

will

recorded

over

weighted

average period of

1.7

years. Refer to Part II

Item 8, Notes to Consolidated

Financial Statements and Supplementary Data, Note

14 - Stock Compensation Plans in our 2024 Annual Report for further information on our stock compensation plans.

The Company’s restricted share activity for the twenty-six weeks ended November 30, 2024 follows:

Number of

Weighted

Average Grant

Date Fair Value

Outstanding, June 1, 2024

277,954

49.38

Vested

(3,016)

45.07

Forfeited

(2,892)

52.88

Outstanding, November 30, 2024

272,046

49.39

Note 10 - Commitments and Contingencies

LEGAL PROCEEDINGS

State of Texas v.

Cal-Maine Foods, Inc. d/b/a Wharton; and Wharton County Foods, LLC

On April 23,

2020, the Company

and its subsidiary

Wharton County Foods,

LLC (“WCF”) were

named as defendants

in State

Texas

Cal-Maine Foods,

Inc. d/b/a

Wharton; and

Wharton County

Foods, LLC,

Cause No.

2020-25427,

in the

District

Court of

Harris County,

Texas.

The State

of Texas

(the “State”)

asserted claims

based on

the Company’s

and WCF’s

alleged

violation

the

Texas

Deceptive

Trade

Practices—Consumer

Protection

Act,

Tex.

Bus.

Com.

Code

§§

17.41-17.63

(“DTPA”).

The

State

claimed

that

the

Company

and

WCF

offered

shell

eggs

excessive

exorbitant

prices

during

the

COVID-19

state

emergency

and

made

misleading

statements

about

shell

egg

prices.

The

State

sought

temporary

and

permanent

injunctions

against

the

Company

and

WCF

prevent

further

alleged

violations

the

DTPA,

along

with

over

100,000

in damages. On August 13, 2020, the court granted the defendants’ motion to dismiss the State’s original petition with

prejudice. On September 11,

2020, the State filed a

notice of appeal, which was

assigned to the Texas

Court of Appeals for the

First

District.

August

16,

2022,

the

appeals

court

reversed

and

remanded

the

case

back

the

trial

court

for

further

Index

proceedings. On October 31, 2022, the Company and WCF appealed the First District Court’s

decision to the Supreme Court of

Texas.

On September

29, 2023,

the Supreme

Court of

Texas

denied the

Company’s

Petition for

Review and

remanded to

the

trial court

for further

proceedings. The

district court

entered a

pre-trial order

scheduling pre-trial

proceedings and

tentatively

setting

trial

date

for

August

11,

2025.

November 30,

2024,

the

State

filed

amended petition,

primarily

address

procedural

deficiency

that

required

the

State

generally

plead

was

seeking

monetary

relief

over

1.0

million

including

restitution, civil

penalties, attorney’s

fees and

costs. Management

believes the

risk of

material loss

related to

this matter

to be

remote.

Kraft Foods Global, Inc. et al. v. United Egg Producers, Inc. et al.

As previously

reported, on

September 25,

2008, the

Company was

named as

one of

several defendants

in numerous

antitrust

cases involving

the United

States shell

egg industry.

The Company

settled all

of these

cases, except

for the

claims of

certain

plaintiffs who sought substantial damages allegedly arising from the purchase of egg products

(as opposed to shell eggs). These

remaining plaintiffs are

Kraft Food Global,

Inc., General Mills, Inc.,

and Nestle USA, Inc.

(the “Egg Products Plaintiffs”)

and,

until a subsequent settlement was reached as described below, The Kellogg Company.

On September

13, 2019,

the case

with the

Egg Products

Plaintiffs was

remanded from

a multi-district

litigation proceeding

the

United

States

District

Court

for

the

Eastern

District

Pennsylvania,

Processed

Egg

Products

Antitrust

Litigation,

MDL No. 2002, to the United States District Court for

the Northern District of Illinois, Kraft Foods Global, Inc. et

al. v. United

Egg Producers,

Inc. et

al., Case

No. 1:11

-cv-8808, for

trial. The

Egg Products

Plaintiffs

alleged that

the Company

and other

defendants

violated

Section

the

Sherman

Act,

15.

U.S.C.

agreeing

limit

the

production

eggs

and

thereby

illegally

raise

the

prices

that plaintiffs

paid

for processed

egg products.

particular,

the

Egg Products

Plaintiffs

attacked

certain features of the United

Egg Producers animal-welfare guidelines and program

used by the Company and many

other egg

producers.

On October 24, 2019, the Company entered into a

confidential settlement agreement with The Kellogg Company dismissing all

claims against the Company

for an amount that

did not have

a material impact on

the Company’s

financial condition or results

of operations.

On November

11,

2019, a

stipulation for

dismissal was

filed with

the court,

and on

March 28,

2022, the

court

dismissed the Company with prejudice.

The trial of this case began on October 17, 2023. On December 1, 2023, the jury returned a decision awarding the

Egg Products

Plaintiffs $

17.8

million in damages. On

November 6, 2024, the

court entered a final

judgement against the Company and

other

defendants,

jointly

and

severally,

totaling

43.6

million

after

trebling.

December

2024,

the

Company

filed

renewed

motion for judgment as a matter of law or for a new trial, and a motion to alter or amend the judgment.

On December 13, 2024,

the

court

granted

defendants’

November

20,

2024

motion

stay

enforcement

the

judgment

and

entered

agreed

order

requiring the

defendants to

post security

during post-judgment

proceedings and

appeal, and

stayed proceedings

to enforce

the

judgment until the disposition of the post-judgment motions and ultimate appeals. On

December 17, 2024, the Company posted

a bond

in the

approximate amount

of $

23.9

million, representing

a portion

of the

total bond

required to

preserve the

right to

appeal the trial court’s

decision. Another defendant posted a

bond for the remaining amount,

The Company intends to continue

to vigorously defend the claims asserted by the Egg Products Plaintiffs.

If the

jury’s

decision is

ultimately upheld,

the Company

would be

jointly and

severally liable

with other

defendants for

treble

damages,

43.6

million,

subject

credit

for

certain

settlements

with

settling

defendants,

plus

the

Egg

Product

Plaintiffs’

reasonable

attorneys’

fees.

During

our

second

fiscal

quarter

2024,

recorded

accrued

expense

19.6

million in

selling, general

and administrative

expenses in

the Company’s

Condensed Consolidated

Statements of

Income and

classified

other

noncurrent

liabilities

the

Company’s

Condensed

Consolidated

Balance

Sheets.

Although

less

than

the

bond

posted

the

Company,

the

accrual

represents

our

estimate

the

Company’s

proportional

the

reasonably

possible ultimate damages award, excluding the Egg Product Plaintiffs’

attorneys’ fees that we believe would be approximately

offset by the credits noted

above. We

have entered into a judgment allocation

and joint defense agreement with the

other major

producer

defendant

remaining

the

case

and

are

discussions

with

other

defendants

regarding

their

contributions.

Our

accrual may change

in the future

based on the

outcome of those

discussions and may

also be revised

in whole or

in part in

the

future to the extent we are successful in further proceedings in the litigation.

State of Oklahoma Watershed Pollution Litigation

On June

18, 2005, the

State of Oklahoma

filed suit, in

the United States

District Court for

the Northern District

of Oklahoma,

against Cal-Maine

Foods, Inc.

and Tyson

Foods, Inc.,

Cobb-Vantress,

Inc., Cargill,

Inc., George’s,

Inc., Peterson

Farms, Inc.

and

Simmons Foods,

Inc.,

and

certain

their affiliates.

The

State of

Oklahoma claims

that

through

the disposal

chicken

litter the defendants

polluted the Illinois

River Watershed.

This watershed provides

water to eastern

Oklahoma. The complaint

sought

injunctive relief

and

monetary damages,

but

the

claim for

monetary damages

was

dismissed by

the

court. Cal-Maine

Foods,

Inc.

discontinued

operations

the

watershed

around

2005.

Since

the

litigation

began,

Cal-Maine

Foods,

Inc.

Index

purchased

100

the

membership

interests

Benton

County

Foods,

LLC,

which

ongoing

commercial

shell

egg

operation within

the Illinois

River Watershed.

Benton County

Foods, LLC

is not

a defendant

in the

litigation. We

also have

number of small contract producers that operate in the area.

The non-jury trial in the case began in September 2009 and concluded in February 2010. On January 18, 2023, the court entered

findings of fact

and conclusions of

law in favor

of the State

of Oklahoma, but

no penalties were

assessed. The court

found the

defendants

liable

for

state

law

nuisance,

federal

common

law

nuisance,

and

state

law

trespass.

The

court

also

found

the

producers

vicariously

liable for

the

actions of

their

contract producers.

The

court directed

the

parties

confer

in attempt

reach

agreement

appropriate

remedies.

June

12,

2023,

the

court

ordered

the

parties

mediate

before

retired

Tenth

Circuit

Chief

Judge

Deanell

Reece

Tacha,

but

the

mediation

was

unsuccessful.

June

26,

2024,

the

district

court

denied

defendants’

motion

dismiss

the

case.

September

13,

2024,

status

hearing

was

held

and

the

court

scheduled

evidentiary hearing

for December

3, 2024,

to determine

whether any

legal remedy

is available

based on

the now

14 year

old

record

and

changed

circumstances

the

Illinois

River

watershed.

November

2024

the

court

denied

defendants’

September 20,

2024 motion

to certify

an interlocutory

appeal. The

evidentiary hearing

proceeded as

scheduled and

concluded

December

17,

2024.

The

court

directed

the

parties

present

their

proposed

findings

fact

and

conclusions

law

and

supporting briefs by

January 30, 2025.

While management believes there

is a reasonable

possibility of a material

loss from the

case, at the present

time, it is not

possible to estimate the

amount of monetary exposure,

if any,

to the Company due

to a range

factors,

including the

following,

among others:

uncertainties inherent

any

assessment of

potential costs

associated with

injunctive relief or other penalties

based on a decision

in a case tried over

14 years ago based on

environmental conditions that

existed

the

time,

the

lack

guidance

from

the

court

what

might

considered

appropriate

remedies,

the

ongoing

litigation

with

the

State

Oklahoma,

and

uncertainty

regarding

what

our

proportionate

any

remedy

would

be,

although we believe that our share compared to the other defendants is small.

Other Matters

In addition to the above,

the Company is involved in

various other claims and litigation

incidental to its business. Although

the

outcome of

these matters

cannot be determined

with certainty,

management, upon the

advice of counsel,

is of

the opinion that

the final outcome should not have a material effect on the Company’s consolidated results of operations or financial position.

Index

ITEM

MANAGEMENT’S

DISCUSSION

AND

ANALYSIS

FINANCIAL

CONDITION

AND

RESULTS

OPERATIONS

The following

should be

read in

conjunction with

Management’s

Discussion and

Analysis of

Financial Condition

and Results

of Operations included

in Part II

Item 7 of

the Company’s

Annual Report on

Form 10-K for

its fiscal year

ended June 1,

2024

(the “2024 Annual Report”), and the accompanying financial statements and notes included in Part II Item 8 of the 2024 Annual

Report and in

Part I Item 1

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

This

report contains

numerous forward-looking

statements within

the meaning

Section 27A

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

and egg products

business, including estimated future

production data, expected

construction schedules, projected

construction

costs, potential

future supply

of and

demand for

our products,

potential future

corn and

soybean price

trends, potential

future

impact on our business of the resurgence in United States (“U.S.”) commercial table egg layer flocks of highly pathogenic avian

influenza (“HPAI”),

potential future impact

on our business

of inflation and

changing interest rates,

potential future impact

our business of

new legislation, rules

or policies, potential

outcomes of legal

proceedings, including loss

contingency accruals

and factors that may result in

changes in the amounts recorded, and other

projected 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

outcomes

results

could

differ

materially

from

those

projected

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

Part I

Item

Risk

Factors

the

2024

Annual

Report,

the

risk

factors

(if

any)

set

forth

Part

Item

Risk

Factors

and

elsewhere in

this report

as well

as those

included in

other reports

we file

from time

to time

with the

Securities and

Exchange

Commission (the “SEC”) (including our

Quarterly Reports on Form

10-Q and Current Reports

on Form 8-K), (ii)

the risks and

hazards

inherent

the

shell

egg

business

(including

disease,

pests,

weather

conditions,

and

potential

for

product

recall),

including but not limited to the current outbreak of HPAI affecting poultry

in the U.S., Canada and other countries that was first

detected in commercial

flocks in the

U.S. in February

2022 and that

first impacted our

flocks in December

2023, (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 recent

or future

acquisition of

new flocks

businesses and risks or

changes that may cause

conditions to completing a pending

acquisition not to be

met, (vi) risks relating

changes

inflation

and

interest

rates,

(vii)

our

ability

retain

existing

customers,

acquire

new

customers

and

grow

our

product mix,

(viii) adverse

results in

pending litigation

matters, and

(ix) global

instability,

including as

a result

of the

war in

Ukraine, the conflicts in Israel and surrounding areas and attacks on shipping in the Red Sea. Readers are cautioned not to place

undue

reliance

forward-looking

statements

because,

while

believe

the

assumptions

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,

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.

GENERAL

Cal-Maine

Foods,

Inc.

(the

“Company,”

“we,”

“us,”

“our”)

primarily

engaged

the

production,

grading,

packaging,

marketing and

distribution of

fresh shell

eggs. Our

operations are

fully integrated

and we

have one

operating and

reportable

segment.

are

the

largest

producer

and

distributor

fresh

shell

eggs

the

U.S.

Our

total

flock

approximately

48.1

million

layers

and

12.0

million

pullets

and

breeders

the

largest

the

U.S.

sell

our

shell

eggs

and

egg

products

diverse group of customers,

including national and regional

grocery store chains, club

stores, companies servicing independent

supermarkets in

the U.S.,

foodservice distributors

and egg

product customers

throughout the

majority of

the U.S.

and aim

maintain efficient, state-of-the-art operations located close to our customers.

Our operating

results are

materially impacted

by market

prices for

eggs and

feed grains

(corn

and soybean

meal), which

are

highly

volatile,

independent

each

other,

and

out

our

control.

Generally,

higher

market

prices

for

eggs

have

positive

impact

our

financial

results

while

higher

market

prices

for

feed

grains

have

negative

impact

our

financial

results.

Although we

use a

variety of pricing

mechanisms in pricing

agreements with our

customers, we sell

most of

our conventional

shell eggs

based on

formulas that

consider,

in varying

ways, independently

quoted regional

wholesale market

prices for

shell

eggs

formulas

our

costs

production

which

include

the

cost

corn

and

soybean

meal.

not

sell

eggs

directly to consumers or set the prices at which eggs are sold to consumers.

Index

Retail

sales

shell

eggs

historically

have

been

highest

during

the

fall

and

winter

months

and

lowest

during

the

summer

months. Prices

for shell

eggs fluctuate

in response

to seasonal

demand factors

and a

natural increase

in egg

production during

the

spring

and

early

summer.

Historically,

shell

egg

prices

tend

increase

with

the

start

the

school

year

and

tend

highest

prior

holiday

periods,

particularly

Thanksgiving,

Christmas

and

Easter.

Consequently,

and

all

other

things

being

equal, we would expect to

experience lower selling prices, sales volumes

and net income (and may

incur net losses) in our

first

and

fourth

fiscal

quarters

ending

August/September

and

May/June,

respectively.

Because

the

seasonal

and

quarterly

fluctuations,

comparisons

our

sales

and

operating

results

between

different

quarters

within

single

fiscal

year

are

not

necessarily meaningful comparisons.

routinely

fill

our

storage

bins

during

harvest

season

when

prices

for

feed

ingredients

are

generally

lower.

ensure

continued availability

of feed

ingredients, we

may enter

into contracts

for future

purchases of

corn and

soybean meal,

and as

part

these

contracts,

may

lock-in

the

basis

portion

our

grain

purchases

several

months

advance.

Basis

the

difference between

the local

cash price

for grain

and the

applicable futures

price. A

basis contract

is a

common transaction

the grain

market that

allows us

to lock-in

a basis

level for

a specific

delivery period

and wait

to set

the futures

price at

a later

date. Furthermore,

due to

the more

limited supply

for organic

ingredients,

we may

commit to

purchase organic

ingredients in

advance to help ensure supply. Ordinarily,

we do not enter into long-term contracts beyond a year to purchase corn and soybean

meal

hedge

against

increases

the

prices

corn

and

soybean

meal.

Corn

and

soybean

meal

are

commodities

and

are

subject

volatile

price

changes

due

weather,

various

supply

and

demand

factors,

transportation

and

storage

costs,

speculators, agricultural,

energy and

trade policies

in the

U.S. and

internationally,

and global

instability that

could disrupt

the

supply chain.

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

our customers’ evolving needs with a favorable

mix of branded

and private-label products

of conventional and

specialty eggs, including

cage-free, organic,

brown, free-range,

pasture-raised and nutritionally-enhanced eggs as well as egg products.

CAGE-FREE EGGS

Ten

states have

passed

legislation or

regulations mandating

minimum space

cage-free requirements

for

egg production

mandated

the

sale

only

cage-free

eggs

and

egg

products

their

states,

with

implementation

these

laws

ranging

from

January 2022

to January

2030. These

states represent

approximately 27%

the U.S.

total population

according to

the 2020

U.S.

Census.

California,

Massachusetts,

Colorado,

Oregon,

Washington,

and

Nevada,

which

collectively

represent

approximately 20% of the total estimated U.S. population,

have cage-free legislation currently in effect.

A significant number of our customers have announced goals

to either exclusively offer cage-free eggs or

significantly increase

the

volume

cage-free

egg

sales

the

future,

subject

most

cases

availability

supply,

affordability

and

consumer

demand, among

other contingencies.

Our customers

typically do

not

commit to

long-term purchases

of specific

quantities or

types

eggs

with

us,

and

result,

difficult

accurately

predict

customer

requirements

for

cage-free

eggs.

are

focused

adjusting

our

cage-free production

capacity

with

goal

meeting

the

future

needs

our

customers

light

changing state requirements

and our customers’

goals. As always,

we strive to

offer a product

mix that aligns

with current and

anticipated

customer purchase

decisions.

are

engaging with

our

customers

help

them

meet

their

announced

goals

and

needs. We have

invested significant capital in recent years to acquire and construct cage-free facilities, and

we expect our focus

for future

expansion will

continue to

include cage-free

facilities. Our

volume of

cage-free egg

sales has

continued to

increase

and account

for a

larger share

of our

product mix.

Cage-free egg

revenue represented

approximately 23.4%

of our

total shell

egg revenue for the second quarter of fiscal year 2025. At the same time, we

understand the importance of our continued ability

provide

conventional

eggs

order

provide

our

customers

with

variety

egg

choices

and

address

hunger

our

communities.

For

additional

information,

see

the

2024

Annual

Report,

Part

Item

“Business

–

Specialty

Eggs,”

“Business

–

Growth

Strategy” and

“Business –

Government Regulation,”

and the

first risk

factor in

Part I

Item 1A,

“Risk Factors”

under the

sub-

heading “Legal and Regulatory Risk Factors.”

ACQUISITIONS

During the

first quarter

of fiscal

2025, we

acquired substantially

all the

commercial shell

egg production,

processing and

egg

products

breaking

assets

ISE

America,

Inc.

and

certain

its

affiliates

(“ISE”).

The

assets

acquired

included

commercial

shell

egg

production

and

processing

facilities

with

capacity

the

time

acquisition

approximately

4.7

million

laying

hens, including 1.0 million

cage-free, and 1.2 million

pullets, feed mills, approximately

4,000 acres of land,

inventories and an

egg products breaking facility. The acquired assets also include an extensive customer distribution network across the Northeast

and Mid-Atlantic

states, and

production operations

in Maryland,

New Jersey,

Delaware and

South Carolina.

These production

assets

are

our

first

Maryland,

New

Jersey

and

Delaware.

believe

this

acquisition

provides

with

opportunity

Index

significantly enhance our market reach

in the Northeast and Mid-Atlantic

states. See further discussion in

Note 2 – Acquisition

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

Effective on

September 9,

2024, we

completed a

strategic investment

with Crepini

LLC, establishing

a new

egg products

and

prepared foods venture.

Crepini LLC, founded

in 2007, grew

its brand throughout

the United States

and Mexico featuring

egg

wraps, protein pancakes, crepes, and

wrap-ups, which are sold

online and in over 3,500

retail stores. The new entity,

located in

Hopewell Junction,

New York,

operates as

Crepini Foods

LLC (“Crepini”).

capitalized Crepini

with approximately

$6.75

million in cash to purchase additional equipment and other assets and fund working capital in exchange for a 51% interest in the

new venture. Crepini LLC contributed its existing assets and business in exchange for a 49% interest in the new venture.

fiscal

2022,

announced

strategic

investment

new

entity,

MeadowCreek

Food,

LLC

(“MeadowCreek”),

which

became

majority-owned

subsidiary.

During

March

2023,

MeadowCreek

began

operations

with

focus

being

leading

provider of

hard-cooked eggs.

During second

quarter 2025,

we acquired

the remaining

ownership interests

in MeadowCreek

and it became a wholly-owned subsidiary.

second

quarter

2024,

acquired

the

assets

Fassio

Egg

Farms,

Inc.

(“Fassio”)

its

commercial

shell

egg

production and processing business. Fassio

owned and operated commercial shell

egg production and processing facilities

with

capacity

the

time

acquisition

approximately

1.2

million

laying

hens,

primarily

cage-free,

feed

mill,

pullets,

fertilizer production and composting operation and land located in Erda, Utah, outside Salt Lake City. This acquisition provided

us with

an opportunity

to expand

our market

presence in

Utah and

the western

U.S., particularly

for cage-free

eggs. In

fourth

quarter 2024, we acquired a broiler processing plant, hatchery and feed mill in Dexter, Missouri for use in shell egg production.

HPAI

Outbreaks of HPAI have continued to occur in U.S. poultry flocks. In In

calendar 2024, 38.4 million commercial layer hens and

1.8 million pullets were depopulated due to HPAI. Approximately 13.6 million commercial layer hens and 500,000 pullets were

depopulated in December 2024 alone.

Our facilities in Kansas and Texas which experienced HPAI

in fiscal 2024 are now fully operational.

remain dedicated

to robust

biosecurity programs

across our

locations; however,

no farm

is immune

from HPAI.

HPAI

currently widespread in the

wild bird population worldwide.

According to the U.S.

Centers for Disease Control

and Prevention

(“CDC”), as of January 6, 2025, there were outbreaks in 917

herds of dairy cows in 16 states, and in 2024

there were 66 human

cases

the

U.S.,

almost

entirely

among

poultry

and

dairy

workers.

However,

2024,

one

the

human

cases

resulted

severe illness

after the

patient was

exposed to

sick and

dead birds

in backyard

flocks.

The patient,

who was

reported to

have

underlying health

conditions, died

in January

2025. There

have been

no reported

cases of

person-to-person spread.

According

to the CDC, the human health risk to the

U.S. public from the HPAI

virus is considered to be low.

The extent of possible future

outbreaks

among

U.S.

commercial

egg

layer

flocks,

with

heightened

risk

during

migration

seasons,

cannot

predicted.

According to the USDA, HPAI

cannot be transmitted through safely handled and properly cooked eggs. There is no known risk

HPAI

associated

with

eggs

that

are

currently

the

market

and

eggs

have

been

recalled.

For

additional

information, see

the 2024

Annual Report,

Part II

Item 7

“Management’s

Discussion and

Analysis of

Financial Condition

and

Results of Operations – HPAI.”

EXECUTIVE OVERVIEW

For the

second quarter

and first

two quarters

of fiscal

2025, we

recorded a

gross profit

of $356.0

million and

$603.3 million,

respectively,

compared to $91.1

million and $136.6

million, respectively,

for the same

periods of fiscal

2024, primarily driven

by an

increase in

the net

average selling

price of

shell eggs,

primarily conventional

egg prices,

as well

as an

increase in

total

dozens

sold,

primarily

specialty

dozens

sold.

Our

results

were

also

positively

impacted

lower

feed

costs

and

our

recent

acquisitions discussed above, partially offset by an increase in the volume and price of outside egg purchases.

Our net

average selling price

per dozen for

the second quarter

of fiscal 2025

was $2.740 compared

to $1.730 in

the prior-year

period. Conventional egg

prices per dozen

were $2.943

compared to $1.458

for the prior-year

period, and specialty

egg prices

per

dozen

were

$2.387

compared

$2.277

for

the

prior-year

period.

Egg

prices

the

second

quarter

fiscal

2025

were

elevated compared to the prior-year

period primarily due to the resurgence

of HPAI

outbreaks, which decreased supply,

among

other

factors.

According

the USDA,

the

monthly average

size of

the

layer hen

flock

from

September through

November

(which most closely aligns with our second fiscal quarter) 2024 was approximately 310.7 million hens, which was a decrease of

9.7 million layers, or 3.0%, compared to the same period in the prior year. The daily average price for the Urner Barry southeast

large

index

for

the

second

quarter

fiscal

2025

increased

102.1%

from

the

comparable

period

the

prior

year.

For

information about historical shell egg prices, see Part I Item I of our 2024 Annual Report.

Index

Our

dozens

sold

for

the

second

quarter

fiscal

2025

increased

14.5%

compared

the

second

quarter

fiscal

2024.

addition

robust

demand,

had

increase

production

capacity

with

the

acquisitions

the

commercial

shell

egg

production and processing business of ISE during the first quarter of fiscal 2025.

Our farm production

costs per dozen

produced for the

second quarter of

fiscal 2025 decreased

8.5%, or $0.08

compared to the

prior year period, primarily due to lower feed costs. Feed costs

per dozen produced decreased 12.8%, or $0.07, compared to the

second quarter of

fiscal 2024, primarily

due to lower

feed ingredient prices.

For information about

historical corn and

soybean

meal prices,

see Part

I Item

I of

our 2024

Annual Report.

Our egg

purchases and

other cost

of sales

increased $126.4

million

quarter-over-quarter, primarily

due to higher

shell egg prices as

well as an

increase in dozens purchased

to supply eggs for

our

customers,

including

those

acquired

our

ISE

acquisition,

during

the

higher

seasonal

demand

cycle

while

the

nation

experienced lower supply due to HPAI.

RESULTS OF OPERATIONS

The following table sets

forth, for the periods

indicated, certain items from

our Condensed Consolidated Statements

of Income

expressed as a percentage of net sales.

Thirteen Weeks Ended

Twenty-six Weeks

Ended

November 30,

2024

December 2, 2023

November 30,

2024

December 2, 2023

Net sales

100.0

Cost of sales

62.7

82.6

65.3

86.1

Gross profit

37.3

17.4

34.7

13.9

Selling, general and administrative

8.1

14.5

8.0

13.1

(Gain) loss on disposal of fixed assets

—

0.1

(0.1)

—

Operating income

29.2

2.8

26.8

0.8

Total other income, net

1.1

1.5

1.3

1.6

Income before income taxes

30.3

4.3

28.1

2.4

Income tax expense

7.4

1.1

6.8

0.6

Net income

22.9

3.2

21.3

1.8

Less: Loss attributable to noncontrolling

interest

(0.1)

Net income attributable to Cal-Maine

Foods, Inc.

23.0

3.3

21.4

1.9

NET SALES

Total

net sales

for the

second quarter

of fiscal

2025 were

$954.7 million

compared to

$523.2 million

for the

same period

fiscal 2024.

Shell egg

sales represented

94.6% and

95.3% of

total net

sales for

the second

quarters of

fiscal 2025

and 2024,

respectively.

The Company’s

shell egg offerings,

for both branded and

private-label products, include specialty and

conventional shell eggs.

Specialty shell eggs include cage-free, organic, brown, free-range, pasture-raised and nutritionally enhanced eggs. Conventional

shell

eggs

sales

represent

all

other

shell

egg

sales

not

sold

specialty

shell

eggs.

The

Company’s

egg

products

offerings

include liquid and frozen egg products and ready-to-eat products such as hard-cooked eggs, egg wraps, protein pancakes, crepes

and wrap-ups. Other sales represent feed sales, miscellaneous byproducts and resale products.

Total

net

sales

for

the

twenty-six

weeks

ended

November

30,

2024

were

$1.7

billion,

compared

$982.6

million

for

the

comparable period of fiscal 2024.

Shell

egg

sales

represented

94.5%

and

94.9%

total

net

sales

for

the

twenty-six

weeks

ended

November

30,

2024

and

December 2, 2023, respectively.

Index

The table below presents net sales in key categories (in thousands, except percentage data):

Thirteen Weeks Ended

Twenty-six Weeks

Ended

November 30, 2024

December 2, 2023

% Change

November 30, 2024

December 2, 2023

% Change

Shell Egg

903,861

498,504

81.3

1,645,374

932,465

76.5

Egg products

40,651

20,012

103.1

75,826

42,235

79.5

Other

10,159

4,718

115.3

19,342

7,878

145.5

Total net sales

954,671

523,234

82.5

1,740,542

982,578

77.1

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

Thirteen Weeks Ended

Twenty-six Weeks

Ended

November 30, 2024

December 2, 2023

November 30, 2024

December 2, 2023

Shell egg sales

Conventional

616,891

68.3

280,599

56.3

1,101,627

67.0

505,879

54.3

Specialty

286,970

31.7

217,905

43.7

543,747

33.0

426,586

45.7

Total shell egg sales

903,861

100.0

498,504

100.0

1,645,374

100.0

932,465

100.0

Dozens sold

Conventional

209,597

63.5

192,462

66.8

409,586

64.0

373,992

66.6

Specialty

120,247

36.5

95,711

33.2

230,237

36.0

187,307

33.4

Total dozens sold

329,844

100.0

288,173

100.0

639,823

100.0

561,299

100.0

Net average selling price per dozen

Conventional

2.943

1.458

2.690

1.353

Specialty

2.387

2.277

2.362

2.277

All shell eggs

2.740

1.730

2.572

1.661

Shell egg sales

Second Quarter – Fiscal 2025 vs. Fiscal 2024

the

second

quarter

fiscal

2025,

conventional

egg

sales

increased

$336.3

million,

119.8%,

compared

the

second quarter of fiscal 2024, primarily due to a 101.9% increase in the prices for conventional eggs, which resulted in

a $311.3 million increase in net sales, and a 8.9% increase in the volume of conventional eggs sold, which resulted in a

$25.0

million

increase

net

sales.

Results

for

the

second

quarter

2025

were

positively

impacted

our

recent

acquisition of ISE.

Specialty

egg sales

increased

$69.1

million, or

31.7%,

in the

second quarter

fiscal 2025

compared

the

second

quarter

fiscal

2024,

primarily

due

25.6%

increase

the

volume

specialty

eggs

sold,

which

resulted

$55.9 million

increase in net

sales and

a 4.8%

increase in prices

for specialty

eggs, which

resulted in

a $13.2

million

increase in net sales.

Demand for

specialty eggs

increased in

the second

quarter of

fiscal 2025

as conventional

egg prices

rose. Specialty

dozens sold

represented 36.5% of

our shell

egg dozens

sold for

the second

quarter of

fiscal 2025

compared to 33.2%

for

the

prior-year

period.

Additionally,

demand

continues

impacted

cage-free

requirements

becoming

effective for Nevada, Oregon and Washington on January 1, 2024.

See “Executive Overview” above for additional discussion.

Twenty-six weeks – Fiscal 2025 vs. Fiscal 2024

For

the

twenty-six

weeks

ended

November

30,

2024,

conventional

egg

sales

increased

$595.8

million,

117.8%,

compared

the

same period

fiscal

2024, primarily

due

the

increase in

the

prices for

conventional shell

eggs.

Prices

for

conventional

eggs

increased

98.8%,

which

resulted

$547.6

million

increase

net

sales.

9.5%

increase in the volume of conventional eggs sold resulted in a $48.2 million increase in net sales.

Specialty egg sales increased $117.2

million, or 27.5%, for the twenty-six

weeks ended November 30, 2024 compared

the

same

period

fiscal

2024,

primarily

due

22.9%

increase

the

volume

specialty

eggs

sold,

which

Index

resulted in

a $

97.8 million

increase in

net sales

and a

3.7% increase

in prices

for specialty

eggs, which

resulted in

$19.6 million increase in net sales.

Egg products sales

Second Quarter – Fiscal 2025 vs. Fiscal 2024

Egg

products sales

increased $20.6

million, or

103.1%,

for the

second quarter

fiscal 2025

compared to

the

same

period of fiscal

2024, primarily due

to a 63.5%

increase in liquid

eggs pounds sold, which

had a $7.9

million positive

impact on net sales, and a

25.2% increase in the net average selling

price per pound of liquid eggs,

which resulted in a

$5.1

million

increase

net

sales.

Results

for

the

second

quarter

2025

were

positively

impacted

our

recent

acquisition of ISE, which included a breaking facility.

Sales from hard-cooked eggs increased

$6.4 million or 212.5% in

the second quarter of fiscal

2025 compared to fiscal

2024 as more processing capabilities are coming online from our investments in MeadowCreek and Crepini.

Twenty-six weeks – Fiscal 2025 vs. Fiscal 2024

Egg products

sales increased

$33.6 million,

or 79.5%,

primarily due

to a

39.9% increase

in liquid

eggs pounds

sold,

which had a $10.9 million positive impact on net sales, and a 25.0% increase in the net average selling price per pound

of liquid eggs, which resulted in a $9.5 million increase in net sales.

Sales from hard-cooked

eggs increased $12.1

million, or 194.6%,

in the first

two quarters of

fiscal 2025

compared to

the same period in fiscal 2024, primarily for the reasons described above.

Other

sales

increased

compared

the

prior

year

periods

primarily

due

higher

feed

sales

our

ISE

acquisition.

Index

COST OF SALES

Cost of

sales consists

of costs

directly related

to producing,

processing and

packing shell

eggs, purchases

of shell

eggs from

outside

sources,

processing

and

packing

egg

products

and

other

non-egg

costs. Farm

production

costs

are

those

costs

incurred

the

egg

production

facility,

including

feed,

facility

(including

labor),

hen

amortization

and

other

farm

production costs.

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

Thirteen Weeks Ended

Twenty-six Weeks

Ended

November 30,

2024

December 2,

2023

Change

November 30,

2024

December 2,

2023

Change

Cost of sales

Farm production

258,246

258,367

—

499,947

511,874

(2.3)

Processing, packaging,

and warehouse

98,823

84,767

16.6

190,534

166,673

14.3

Egg purchases and other

cost of sales

198,030

71,654

176.4

366,479

132,451

176.7

Egg products

43,530

17,316

151.4

80,322

35,017

129.4

Total cost of sales

598,629

432,104

38.5

1,137,282

846,015

34.4

Farm production costs (per

dozen produced)

Feed

0.483

0.554

(12.8)

0.488

0.575

(15.1)

Other

0.418

0.431

(3.0)

0.421

0.435

(3.2)

Total farm production cost

0.901

0.985

(8.5)

0.909

1.010

(10.0)

Outside egg purchases

(average cost per dozen)

3.22

2.03

58.6

3.03

1.84

64.7

Dozens produced

288,036

265,101

8.7

554,875

515,457

7.6

Percent produced to sold

87.3%

92.0%

(5.1)

86.7%

91.8%

(5.6)

Farm Production

Second Quarter – Fiscal 2025 vs. Fiscal 2024

Feed costs per dozen produced decreased 12.8% in the second quarter of fiscal 2025 compared to the second quarter of

fiscal 2024. This decrease

was primarily due to

lower prices for corn

and soybean meal, our

primary feed ingredients.

The decrease

in feed

cost per

dozen resulted

in a

decrease in

cost of

sales of

$20.5 million

for the

second quarter

fiscal 2025 compared to the prior period quarter.

For the second quarter of fiscal 2025, the average Chicago Board of Trade (“CBOT”) daily market price was $4.17 per

bushel

corn

and

$311

per

ton

soybean

meal,

representing

decreases

13.0%

and

25.3%,

respectively,

compared to the average CBOT daily market prices for the second quarter of fiscal 2024.

Other farm production

costs decreased primarily due

to lower flock

amortization. Feed costs reached

their peak in the

second quarter of

fiscal 2023 and

have since trended

downward. Lower costs

result in lower

capitalized values of

the

flocks during the grow out phase, which reduced amortization cost over time.

Twenty-six weeks – Fiscal 2025 vs. Fiscal 2024

Feed costs

per dozen

produced decreased

15.1% in

the twenty-six

weeks ended

November 30,

2024 compared

to the

same period of fiscal 2024,

primarily due to lower feed

ingredient prices. The decrease in

feed cost per dozen resulted

in a decrease in cost of sales of $48.3 million compared to the prior year period.

For the

year-to-date period,

the average

CBOT daily

market price

was $4.10

per bushel

of corn

and $326

per ton

soybean meal, representing decreases of

18.8% and 22.4%, respectively,

compared to the average CBOT

daily market

prices for the comparable period in the prior year.

Index

Other farm production costs decreased due to lower flock amortization, for the reasons described above.

Current

indications

for

corn

and

soybean

project

favorable

stocks-to-use

ratio

near

the

levels

prevailing

today

for

the

remainder of

fiscal 2025;

however,

as long

as outside

factors remain

uncertain (including

weather patterns

and global

supply

chain disruptions), volatility could remain.

Processing, packaging, and warehouse

Second Quarter – Fiscal 2025 vs. Fiscal 2024

Processing, packaging,

and warehouse

costs increased

16.6% compared

to the

second quarter

of fiscal

2024 due

to a

9.7% increase in the volume of processed dozens as well as an increase in costs of packaging materials.

Twenty-six weeks – Fiscal 2025 vs. Fiscal 2024

Processing,

packaging,

and

warehouse

costs

increased

14.3%

compared

the

first

two

quarters

fiscal

2025,

primarily

due

8.6%

increase

the

volume

processed

dozens

well

increase

costs

packaging

materials.

Egg purchases and other cost of sales

Second Quarter – Fiscal 2025 vs. Fiscal 2024

Costs in

this category

increased primarily due

to higher

shell egg

prices as

the average

cost per

dozen of

outside egg

purchases increased 58.6% compared to second quarter of fiscal 2024, as well as due to an increase of 80.3% in dozens

purchased.

Dozens

purchased

increased

due

purchasing

eggs

supply

our

customers

during

the

higher

seasonal demand cycle while the nation experienced lower supply due to HPAI.

Twenty-six weeks – Fiscal 2025 vs. Fiscal 2024

Costs in

this category

increased primarily due

to higher

shell egg

prices as

the average

cost per

dozen of

outside egg

purchases increased

64.7% compared

to fiscal

2024, as

well as

an increase

of 73.8%

in dozens

purchased, primarily

for the reasons described above.

GROSS PROFIT

Gross

profit,

percentage

net

sales,

was

31.5%

for

the

second

quarter

fiscal

2025

compared

9.9%

for

the

same

period of fiscal 2024.

Gross profit for the

twenty-six weeks ended November 30,

2024 was $603.3 million compared

to $136.6

million for

the same

period of

2024. The

increase was

primarily due

to higher

net average

selling price

as well

as lower

feed

ingredient prices,

partially offset by the increase in volume and price of outside egg purchases.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

Selling,

general,

and

administrative

(“SGA”)

expenses

include

costs

delivery,

marketing,

and

other

general

and

administrative expenses. Delivery expense

includes contract trucking expense

and all costs to

maintain and operate our

fleet of

trucks to

deliver products

to customers

including the

related payroll

expenses. Marketing

expense includes

franchise fees

that

are

submitted

Eggland’s

Best,

Inc.

(“EB”)

support

the

brand,

brokerage

and

commission

fees,

and

other

general

marketing expenses

such as

payroll expenses

for our

in-house sales

team. Other

general and

administrative expenses

include

corporate payroll

related expenses

and other

general corporate

overhead costs.

The following

table presents

an analysis

of our

SGA expenses (in thousands):

Thirteen Weeks Ended

November 30, 2024

December 2, 2023

$ Change

% Change

Delivery expense

23,666

17,706

5,960

33.7

Marketing expense

15,074

12,197

2,877

23.6

Litigation loss contingency accrual

19,648

(19,648)

(100.0)

Other general and administrative

expenses

38,893

27,027

11,866

43.9

Total

77,633

76,578

1,055

1.4

Second Quarter – Fiscal 2025 vs. Fiscal 2024

Index

Delivery expense

The

increased

delivery

expense

primarily

due

increase

dozens

sold

the

second

quarter

fiscal

2025

compared to the second quarter of fiscal 2024.

Marketing expense

The

increase in

marketing expense

primarily due

an increase

in franchise

fees

as specialty

egg sales

increased

compared to the second quarter of fiscal 2024.

Litigation loss contingency accrual

In the second quarter of fiscal 2024, we accrued a $19.6 million loss contingency relating to a jury decision returned in

pending

anti-trust

litigation.

See

further

discussion

Note 10 - Commitments and Contingencies

the

Notes

Condensed Consolidated Financial Statements included in this Quarterly Report.

Other general and administrative expense

The

increase

other

general

and

administrative

expense

primarily

due

both

increase

the

accrual

for

anticipated employee bonuses

and to the

increased adjustment to

the fair value

of contingent consideration

associated

with the

Fassio acquisition.

See further

discussion in

Note 4 – Fair Value Measurements

of the

Notes to

Condensed

Consolidated Financial Statements included in this Quarterly Report.

Twenty-six Weeks

Ended

November 30, 2024

December 2, 2023

$ Change

% Change

Delivery expense

44,730

35,397

9,333

26.4

Marketing expense

29,426

24,661

4,765

19.3

Litigation loss contingency accrual

—

19,673

(19,673)

(100.0)

Other general and administrative

expenses

65,409

49,093

16,316

33.2

Total

139,565

128,824

10,741

8.3

Twenty-six weeks – Fiscal 2025 vs. Fiscal 2024

Delivery expense

The increased delivery expense is primarily due to an increase in dozens sold compared to the prior year period.

Marketing expense

The

increase in

marketing expense

primarily due

an increase

in franchise

fees

as specialty

egg sales

increased

compared to the prior year period.

Other general and administrative expense

The increase in other

general and administrative expense

is primarily for the

reasons described above, as

well as costs

associated with the acquisition of ISE assets that occurred during the first quarter of fiscal 2025.

OPERATING

INCOME

For the second

quarter of fiscal 2025,

we recorded operating income

of $278.1 million compared

to operating income of

$14.2

million for the same period of fiscal 2024.

For the

twenty-six weeks

ended November

30, 2024,

we recorded

operating income

of $465.0

million compared

to operating

income of $7.5 million for the same period of fiscal 2024.

OTHER INCOME (EXPENSE)

Total

other

income

(expense)

consists

items

not

directly

charged

operations,

such

interest

income

and

expense, equity in income or loss of unconsolidated entities, and patronage income, among other items. Patronage dividends are

paid to us from our membership in the EB cooperative.

For the second

quarter of fiscal

2025, we earned

$9.9 million of

interest income compared

to $7.1 million

for the same

period

of fiscal

2024, primarily due

to higher

average cash and

cash equivalents and

investment securities available-for-sale

balances

Index

and

yields.

The

Company

recorded

interest

expense

$150

thousand

and

$134

thousand

for

the

second

quarters

ended

November 30, 2024 and December 2, 2023, respectively.

For the twenty-six weeks ended November 30,

2024, we earned $19.9 million of

interest income compared to $14.6 million for

the same

period of

fiscal 2024, primarily

due to

higher average

cash and cash

equivalents and

investment securities available-

for-sale balances

and yields.

The Company

recorded interest

expense of

$310 thousand

and $276

thousand for

the twenty-six

weeks ended November 30, 2024 and December 2, 2023, respectively.

INCOME TAXES

For the second quarter of fiscal

2025, our pre-tax income was $289.0

million, compared to $22.1 million for the

second quarter

of fiscal 2024.

Income tax expense

of $70.6 million

was recorded for

second quarter 2025

with an effective

tax rate of

24.4%.

For second quarter 2024, income tax expense was $5.5 million with an effective tax rate of 25.0%.

For

the

twenty-six weeks

ended November

30, 2024,

pre-tax

income was

$486.9

million,

compared to

$22.9

million for

the

same period of

fiscal 2024. Income

tax expense of

$119.0 million

was recorded for

the twenty-six weeks ended

November 30,

2024

with

an effective

tax

rate

24.4%.

For

the

same

period

fiscal 2024,

income

tax

expense was

$5.9

million

with

effective tax rate of 25.7%.

Items causing

our effective

tax rate

to differ

from the

federal statutory

income tax

rate of

21% are

state income

taxes, certain

federal tax credits

and certain items included

in income or

loss for financial reporting

purposes that are

not included in taxable

income or loss

for income tax

purposes, including tax exempt

interest income, certain nondeductible

expenses, and net

income

or loss attributable to noncontrolling interest.

NET INCOME ATTRIBUTABLE

TO CAL-MAINE FOODS, INC.

Net

income

attributable

Cal-Maine

Foods,

Inc.

for

the

second

quarter

ended

November

30,

2024

was

$219.1

million,

$4.49 per

basic and

$4.47 per

diluted common

share, compared

to net

income attributable

to Cal-Maine

Foods, Inc.

of $17.0

million, or $0.35 per basic and diluted common share, for the same period of fiscal 2024.

Net income

attributable to

Cal-Maine Foods,

Inc. for

the twenty-six weeks

ended November

30, 2024,

was $369.0

million, or

$7.57 per

basic and

$7.54 per

diluted common

share, compared

to net

income attributable

to Cal-Maine

Foods, Inc.

of $17.9

million or $0.37 per basic and diluted common share, for the same period of fiscal 2024.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital and Current Ratio

Our

working

capital

was

$1.2

billion

November

30,

2024

compared

$1.0

billion

June

2024.

The

calculation

working capital is

defined as current

assets less current

liabilities. Our current

ratio was 5.5

at November 30, 2024

and June 1,

2024. The current ratio is calculated by dividing current assets by current liabilities.

Cash Flows from Operating Activities

For the twenty-six weeks ended November 30, 2024, $240.2 million in

net cash was provided by operating activities, compared

$73.7

million

provided

operating

activities

for

the

comparable

period

fiscal

2024.

The

increase

cash

flow

from

operating

activities

resulted

primarily

from

higher

net

average

selling

prices

per

dozen,

increased

volume

sales

and

decrease

feed

ingredient

costs

compared

the

prior-year

period,

partially

offset

the

increase

volume

and

price

outside egg purchases.

Cash Flows from Investing Activities

For

the

twenty-six

weeks

ended

November

30,

2024,

$247.4

million

was

used

investing

activities,

primarily

due

the

acquisition

assets

ISE,

and

purchases

property,

plant

and

equipment.

This

compares

$32.8

million

provided

investing activities

in the

same period

of fiscal

2024, primarily

due to

sales and

maturities of

investment securities.

Sales and

maturities of

investment securities

were $426.5

million in

the twenty-six

weeks

ended November

30, 2024

and purchases

investment securities were

$501.6 million during

the period. Sales

and maturities of

investment securities were

$196.1 million

in the prior year period while purchases of investment securities were $43.6 million during the period. The increase

in sales and

maturities of

investment securities

is primarily

due to

the maturities

of short-term

investments during

the first

two quarters

Index

fiscal 2025. Purchases of

property, plant

and equipment were $65.6

million and $65.8 million

in the first

two quarters of

fiscal

2025 and 2024, respectively, primarily reflecting progress on our construction projects.

Cash Flows from Financing Activities

paid dividends of $87.8 million for

the twenty-six weeks ended November 30, 2024

compared to $37.3 million in the

same

prior-year period.

As of

November 30,

2024, cash

decreased $97.6

million since

June 1,

2024, compared

to an

increase of

$69.0 million

during

the same period of fiscal 2024. The decrease is primarily due to the acquisition of assets of ISE during fiscal 2025.

Credit Facility

November

15,

2021,

entered

into

credit

agreement

that

provides

for

senior

secured

revolving

credit

facility

(the

“Credit Facility”),

in an

initial aggregate

principal amount

of up

to $250

million with

a five-year

term. As

of November

30,

2024, no amounts were borrowed under the Credit Facility.

We have

$4.7 million in outstanding standby letters of credit issued

under our Credit Facility for the benefit of certain insurance companies. Refer to Part II Item 8, Notes to Consolidated Financial

Statements

and

Supplementary

Data,

Note

Credit

Facility

included

our

2024

Annual

Report

for

further

information

regarding our long-term debt.

Dividends

accordance

with

our

variable

dividend

policy,

will

pay

cash

dividend

totaling

approximately

$73.0

million,

approximately

$1.489

per

share,

holders

our

Common

Stock

and

Class

Common

Stock

with

respect

our

second

quarter of fiscal

2025. The amount

paid per share

will vary based

on the number

of outstanding shares

on the record

date. The

dividend is payable on February 13, 2025 to holders of record on January 29, 2025.

Material Cash Requirements

Material cash

requirements for operating

activities primarily consist

of feed

ingredients, processing, packaging

and warehouse

costs, employee related costs, and

other general operating expenses, which

we expect to be paid

from our cash from operations

and cash and investment

securities on hand for

at least the next

12 months. While volatile

egg prices and feed

ingredient costs,

among

other

things, make

long-term predictions

difficult,

have

substantial liquid

assets and

availability under

our

Credit

Facility to fund future operating requirements.

Our material cash

requirements for capital expenditures

consist primarily of our

construction projects to

increase our cage-free

production

capacity.

continue to

monitor the

increasing demand

for cage-free

eggs and

engage with

our

customers

efforts

to achieve

a smooth

transition toward

their announced

timelines for

cage-free egg

sales. The

following table

presents

material construction projects approved as of November 30, 2024 (in thousands):

Project(s) Type

Projected

Completion

Projected Cost

Spent as of

November 30, 2024

Remaining

Projected Cost

Cage-Free Layer & Pullet Houses

Fiscal 2025

83,167

79,340

3,827

Feed Mills

Fiscal 2026

16,593

6,376

10,217

Egg Products Expansion

Fiscal 2026

15,361

Cage-Free Layer & Pullet Houses

Fiscal 2026

195,996

126,117

69,879

311,117

211,833

99,284

The table reflects approximately $60 million in new capital projects added since the end of first quarter 2025. These projects

include the addition of five new cage-free layer houses and two pullet houses across our locations in Florida, Georgia, Utah and

Texas. We

expect the projects to be completed with additional production capacity for approximately 1.1 million cage-free

layer hens and 250 thousand pullets by late summer 2025. We are also investing $15 million to expand our egg products

processing facility in Blackshear, Georgia to add extended shelf-life liquid eggs products.

We expect the processing plant and hatchery that we acquired in fourth quarter 2024 and repurposed for use in shell egg

production to be online in our next fiscal quarter. We

have been working with local contract growers and have commitments

that would result in approximately 1.2 million additional free-range hens by fall 2025.

Index

We believe our current cash balances, investments, projected cash flows from operations, and available borrowings under our

Credit Facility will be sufficient to fund our capital expenditure cash needs for at least the next 12 months and to fund our

capital commitments currently in place thereafter.

IMPACT OF RECENTLY

ISSUED/ADOPTED ACCOUNTING STANDARDS

For

information

changes

accounting

principles

and

new

accounting

policies,

see

Note 1 - Summary of Significant

Accounting Policies

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

CRITICAL ACCOUNTING ESTIMATES

Critical accounting

estimates are

those estimates

made in

accordance with

U.S. generally

accepted accounting

principles that

involve

significant

level

estimation

uncertainty

and

have

had

are

reasonably

likely

have

material

impact

our

financial condition

or results

of operations.

There have

been no

changes to

our critical

accounting estimates

identified in

our

2024 Annual Report.

ITEM 3. QUANTITATIVE

AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our exposure to market risk during the twenty-six weeks ended November 30, 2024

from the information provided in Part II Item 7A, Quantitative and Qualitative Disclosures About Market Risk in our 2024

Annual Report.

ITEM 4.

CONTROLS

AND

PROCEDURES

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,

persons

performing

similar

functions,

appropriate

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 November 30, 2024 at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There was no change in our

internal control over financial reporting that occurred during

the quarter ended November 30, 2024

that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Index

PART

II. OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

Refer

the

discussion

certain

legal

proceedings

involving

the

Company

and/or

its

subsidiaries

(i)

our

2024

Annual

Report,

Part I

Item 3

Legal Proceedings,

and Part

Item 8,

Notes

to Consolidated

Financial

Statements and

Supplementary

Data,

Note

Commitments

and

Contingencies,

and

(ii)

this

Quarterly

Report

Note 10

- Commitments and

Contingencies

the

Notes

Condensed

Consolidated

Financial

Statements,

which

discussions

are

incorporated

herein

reference.

ITEM 1A.

RISK

FACTORS

There have been no material changes in the risk factors previously disclosed in the Company’s 2024 Annual Report.

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

The following table is a summary of our second quarter 2025 share repurchases:

Issuer Purchases of Equity Securities

Total Number of

Maximum Number

Shares Purchased

of Shares that

Total Number

Average

as Part of Publicly

May Yet

of Shares

Price Paid

Announced Plans

Purchased Under the

Period

Purchased (1)

per Share

Or Programs

Plans or Programs

09/01/24 to 09/28/24

—

09/29/24 to 10/26/24

285

94.16

—

10/27/24 to 11/30/24

—

285

94.16

—

(1)

As permitted under our Amended and Restated 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 restricted common stock.

ITEM 6. EXHIBITS

Exhibits

No.

Description

3.1

Composite Second Amended and Restated Certificate of Incorporation of the Registrant, as amended

through October 4, 2024 (incorporated by reference to Exhibit 3.1 in the Registrant’s Form 8-K, filed

October 4, 2024)

3.2

Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 in the

Registrant’s Form 10-K, filed July 23, 2024)

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

101.SCH*+

Inline XBRL Taxonomy Extension Schema Document

101.CAL*+

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*+

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*+

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*+

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Filed herewith as an Exhibit.

Furnished herewith as an Exhibit.

Submitted electronically with this Quarterly Report.

Index

SIGNATURES

Pursuant to the

requirements of the

Securities Exchange Act

of 1934, the

registrant has duly

caused this report

to be signed

its behalf by the undersigned, thereunto duly authorized.

CAL-MAINE FOODS, INC.

(Registrant)

Date:

January 7, 2025

/s/ Max P.

Bowman

Max P.

Bowman

Vice President, Chief Financial Officer

(Principal Financial Officer)

໿

Date:

January 7, 2025

/s/ Matthew S. Glover

Matthew S. Glover

Vice President – Accounting

(Principal Accounting Officer)

໿

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Litigous
Readability	6th grade V good

Cal-Maine Foods (CALM) 10-Q2025 Q2 Quarterly report

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