UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (mark one) [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended August 31, 2002 OR [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ____________ to ____________ Commission file number: 000-04892 CAL-MAINE FOODS, INC. (Exact name of registrant as specified in its charter) Delaware 64-0500378 (State or other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 3320 Woodrow Wilson Avenue, Jackson, Mississippi 39209 (Address of principal executive offices) (Zip Code) (601) 948-6813 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No_____ Number of shares outstanding of each of the issuer's classes of common stock (exclusive of treasury shares), as of October 4, 2002. Common Stock, $0.01 par value 10,564,388 shares Class A Common Stock, $0.01 par value 1,200,000 shares CAL-MAINE FOODS, INC. AND SUBSIDIARIES INDEX Page Part I. Financial Information Number Item 1. Condensed Consolidated Financial Statements (Unaudited) Condensed Consolidated Balance Sheets - August 31, 2002 and June 1, 2002 3 Condensed Consolidated Statements of Operations - Three Months Ended August 31, 2002 and September 1, 2001 4 Condensed Consolidated Statements of Cash Flow - Three Months Ended August 31, 2002 and September 1, 2001 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Item 3. Quantitative and Qualitative Disclosures of Market Risk 11 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 12 Signatures 13 Certifications 14 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CAL-MAINE FOODS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) August 31, 2002 June 1, 2002 --------------- ------------ (unaudited) (note1) ASSETS Current assets: Cash and cash equivalents $ 3,306 $ 4,878 Trade and other receivables 17,516 17,380 Recoverable federal income taxes 7,209 6,031 Inventories 46,716 46,108 Prepaid expenses and other current assets 2,485 911 --------- --------- Total current assets 77,232 75,308 Notes receivable and investments 7,032 7,116 Goodwill 3,147 3,147 Other assets 1,851 1,865 Property, plant and equipment 261,580 258,696 Less accumulated depreciation (119,853) (116,478) --------- --------- 141,727 142,218 --------- --------- TOTAL ASSETS $ 230,989 $ 229,654 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Note payable to bank $ 14,500 $ 7,000 Accounts payable and accrued expenses 26,113 28,867 Current maturities of long-term debt 10,364 10,364 Deferred income taxes 11,767 11,767 --------- --------- Total current liabilities 62,744 57,998 Long-term debt, less current maturities 106,007 107,998 Other non-current liabilities 1,450 1,450 Deferred income taxes 8,186 7,748 --------- --------- Total liabilities 178,387 175,194 Stockholders' equity: Common stock $0.01 par value per share: Authorized shares - 30,000,000 Issued and outstanding shares - 17,565,200 at August 31, 2002 and June 1, 2002 176 176 Class A common stock $0.01 part value, authorized, issued and outstanding 1,200,000 shares 12 12 Paid-in capital 18,784 18,784 Retained earnings 46,729 48,587 Common stock in treasury-6,863,512 shares at August 31, 2002 and June 1, 2002 (13,099) (13,099) --------- --------- Total stockholders' equity 52,602 54,460 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 230,989 $ 229,654 ========= ========= See notes to condensed consolidated financial statements. 3 CAL-MAINE FOODS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited) 13 Weeks Ended August 31, 2002 September 1, 2001 --------------- ----------------- Net sales $ 82,218 $ 72,428 Cost of sales 72,147 69,731 -------- -------- Gross profit 10,071 2,697 Selling, delivery and administrative 10,557 10,014 -------- -------- Operating loss (486) (7,317) Other income (expense): Interest expense, net (2,219) (2,066) Other 53 (118) -------- -------- (2,166) (2,184) -------- -------- Loss before income taxes (2,652) (9,501) Income tax benefit (940) (3,401) -------- -------- Net loss $ (1,712) $ (6,100) ======== ======== Net loss per common share: Basic $ (.15) $ (.52) ======== ======== Diluted $ (.15) $ (.52) ======== ======== Dividends per common share $ .0125 $ .0125 ======== ======== Weighted average shares outstanding: Basic 11,764 11,772 ======== ======== Diluted 11,764 11,772 ======== ======== See notes to condensed consolidated financial statements. 4 CAL-MAINE FOODS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) 13 Weeks Ended August 31, 2002 September 1, 2001 ------------------ ----------------- Cash used in operations $ (3,314) $ (7,546) Investing activities: Purchases of property, plant and equipment (1,248) (2,717) Construction of production and processing facilities (2,554) (3,271) Payments received on notes receivable and from investments 31 19 Increase in notes receivable and investments (110) -- Net proceeds from disposal of property, plant and equipment 261 67 -------- -------- Net cash used in investing activities (3,620) (5,902) Financing activities: Net borrowings on note payable to bank 7,500 2,000 Long-term borrowings -- 7,200 Principal payments on long-term debt (1,991) (1,687) Purchases of common stock for treasury -- (540) Payments of dividends (147) (151) -------- -------- Net cash provided by financing activities 5,362 6,822 -------- -------- Net change in cash and cash equivalents (1,572) (6,626) Cash and cash equivalents at beginning of period 4,878 13,129 -------- -------- Cash and cash equivalents at end of period $ 3,306 $ 6,503 ======== ======== See notes to condensed consolidated financial statements. 5 CAL-MAINE FOODS, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (in thousands, except share amounts) August 31, 2002 (unaudited) 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principals for complete financial statements. In the opinion of management, all adjustments (consisting of normal occurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended August 31, 2002 are not necessarily indicative of the results that may be expected for the year ended May 31, 2003. The balance sheet at June 1, 2002 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Cal-Maine Foods, Inc. and Subsidiaries annual report on Form 10-K for the fiscal year ended June 1, 2002. 2. Inventories Inventories consisted of the following: August 31, 2002 June 1, 2002 ----------------- ------------------ Flocks $31,084 $ 30,836 Eggs 2,714 2,257 Feed and supplies 10,010 10,073 Livestock 2,908 2,942 ----------------- ------------------ $46,716 $ 46,108 ================= ================== 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Cal-Maine Foods, Inc. (the" Company") is primarily engaged in the production, grading, packing and sale of fresh shell eggs. The Company's fiscal year end is the Saturday closest to May 31. The Company's operations are fully integrated. At its facilities it hatches chicks, grows pullets, manufactures feed, and produces, processes, and distributes shell eggs. The Company currently is the largest producer and distributor of fresh shell eggs in the United States. Shell egg sales, including feed sales to outside egg producers, account for 98% of the Company's net sales. The Company primarily markets its shell eggs in the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States. Shell eggs are sold directly by the Company primarily to national and regional supermarket chains. The Company currently uses contract producers for approximately 15% of its total egg production. Contract producers operate under agreements with the Company for the use of their facilities in the production of shell eggs by layers owned by the Company, which owns the eggs produced. Also, shell eggs are purchased from outside producers for resale, as needed, by the Company. The Company's operating income or loss is significantly affected by wholesale shell egg market prices, which can fluctuate widely and are outside of the Company's control. Retail sales of shell eggs are greatest during the fall and winter months and lowest during the summer months. Prices for shell eggs fluctuate in response to seasonal factors and a natural increase in egg production during the spring and early summer. The Company's cost of production is materially affected by feed costs, which average about 56% of the Company's total farm egg production cost. Changes in feed costs result in changes in the Company's cost of goods sold. The cost of feed ingredients is affected by a number of supply and demand factors such as crop production and weather, and other factors, such as the level of grain exports, over which the Company has little or no control. According to U.S. Department of Agriculture reports during the past nine calendar months, the chick hatch has been lower than the same period last calendar year, resulting in lower projected hen numbers for the upcoming year. This could result in decreased egg production and upward pressure on egg prices. Egg demand is very good for domestic use, with export demand down slightly. Although industry projections concerning the fall 2002 grain crop are uncertain at this date, current grain commodities futures trading levels indicate that the cost of feed ingredients may be at higher price levels for the fiscal year ahead. RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, certain items from the Company's Condensed Consolidated Statements of Operations expressed as a percentage of net sales. Percentage of Net Sales 13 Weeks Ended August 31, 2002 September 1, 2001 ---------------- ------------------ Net sales 100.0 % 100.0 % Cost of sales 87.8 96.3 ---------------- ------------------ Gross profit 12.2 3.7 Selling, delivery & administrative 12.8 13.8 ---------------- ------------------ Operating loss (0.6) (10.1) Other expense (2.6) (3.0) ---------------- ------------------ Loss before taxes (3.2) (13.1) Income tax benefit (1.1) (4.7) ---------------- ------------------ Net loss (2.1) % (8.4) % ================ ================== 7 NET SALES Net sales for the first quarter of fiscal 2003 were $82.2 million, an increase of $9.8 million, or 13.5%, as compared to net sales of $72.4 million for the first quarter of fiscal 2002. Total eggs sold and egg selling prices increased in the current quarter as compared to a year ago. Dozens sold for the current quarter were 136.0 million dozen, an increase of 2.0 million dozen, or 1.5%, as compared to the first quarter of last year. The Company's net average selling price per dozen for the fiscal 2003 first quarter was $.573, compared to $.507 for the first quarter of last year, an increase of 13.0%. The Company's net average selling price is the blended price for all sizes and grades of shell eggs, including non-graded egg sales, breaking stock and undergrades. Domestic demand for eggs was good and a nearer to balance supply of eggs strengthened egg selling prices. Usually, the first quarter of the Company's fiscal year is a weak quarter as to egg price and volume of sales. COST OF SALES Total cost of sales for the first quarter ended August 31, 2002 was $72.1 million, an increase of $2.4 million, or 3.4%, as compared to the cost of sales of $69.7 million for last year's first quarter. The increase is due to an increase in dozens sold and an increase in cost of feed. Feed cost per dozen for the current first quarter was $.205, compared to $.194 per dozen for the comparable fiscal 2002 first quarter, an increase of 5.7%. Other operating costs remained in the same ranges for both the current and last year first fiscal quarters. The increase in egg selling prices offset the increase in cost of sales and resulted in a net increase in gross profit from 3.7% for the quarter ended September 1, 2001 to 12.2% of net sales for the current quarter ended August 31, 2002. SELLING, DELIVERY AND ADMINISTRATIVE EXPENSES Selling, delivery and administrative expense for the first quarter ended August 31,2002 was $10.6 million, an increase of $600,000, or 6.0%, as compared to the expense of $10.0 million for the comparable period last year. Most of the increase is due to general cost increases in selling and adminis- trative expenses. On a cost per dozen sold basis, selling, delivery and adminis- trative expense increased from $.075 per dozen for the first quarter of fiscal 2002 to $.078 per dozen for the current quarter, an increase of 4.0%. Due to an increase in net sales, selling, delivery and administrative expense decreased from 13.8% for fiscal 2002 to 12.8% of net sales for the current fiscal year. OPERATING LOSS As a result of the above, an operating loss of $486,000 was incurred for the first quarter ended August 31,2002, as compared to an operating loss of $7.3 million for last fiscal year's first quarter. As a percent of net sales, the current fiscal 2003 quarter had a 0.6% operating loss, compared to an operating loss of 10.1% for last year. OTHER EXPENSE Other expenses for both the first quarters ended August 31, 2002 and September 1, 2001 were $2.2 million. Other income increased $171,000 for the current fiscal quarter and net interest expense increased $153,000. As a percent of net sales, other expense decreased from 3.0% for last years first quarter to 2.6% for the current first quarter. INCOME TAXES As a result of the above, the Company had a pre-tax loss of $2.7 million for the quarter ended August 31, 2002, compared to pre-tax loss of $9.5 million for the quarter ended September 1, 2001. For the current first quarter, an income tax benefit of $940,000 was recorded with an effective tax rate of 35.4%, as compared to an income tax benefit of $3.4 million with an effective tax rate of 35.8% for last year's first quarter. NET LOSS As a result of the above, the net loss for the first quarter ended August 31, 2002 was $1.7 million, or $.15 per basic and diluted share, compared to net loss of $6.1 million, or $.52 per basic and diluted share for the quarter ended September 1, 2001. As a percent of net sales, net loss decreased from 8.4% for the quarter ended September 1, 2001 to 2.1% for the quarter ended August 31, 2002. 8 CAPITAL RESOURCES AND LIQUIDITY The Company's working capital at August 31, 2002 was $14.5 million compared to $17.3 million at June 1, 2002. The Company's current ratio was 1.23 at August 31, 2002 as compared with 1.30 at June 1, 2002. The Company's need for working capital generally is highest in the last and first fiscal quarters ending in May and August, respectively, when egg prices are normally at seasonal lows. Seasonal borrowing needs frequently are higher during these quarters than during other fiscal quarters. The Company has a $35.0 million line of credit with three banks of which $14.5 million was outstanding at August 31, 2002. The Company's long-term debt at August 31, 2002, including current maturities, amounted to $116.4 million, as compared to $118.4 million at June 1, 2002. For the thirteen weeks ended September 1, 2001, $3.3 million in net cash was used in operating activities. This compares to net cash used of $7.5 million for the comparable period last year. In the current fiscal quarter, $1.2 million was used for purchases of property, plant and equipment and $2.6 million used for construction projects. Approximately $147,000 used for payments of dividends on the common stock. Additional net borrowings of $7.5 million was received on the note payable to bank and $2.0 million was used for repayments on long-term debt. The net result of these current activities was a decrease in cash of $1.6 million since June 1, 2002. Substantially all trade receivables and inventories collateralize the Company's line of credit, and property, plant and equipment collateralize the Company's long-term debt. The Company is required by certain provisions of these loan agreements to (1) maintain minimum levels of working capital and net worth; (2) limit dividends, capital expenditures, lease obligations and additional long-term borrowings; and (3) maintain various current and cash-flow coverage ratios, among other restrictions. At June 1, 2002, the Company did not meet certain of these provisions on its long-term debt agreements and obtained waivers of these requirements through fiscal 2003. As of August 31, 2002, the Company was not in compliance with a certain financial covenant requirement of a $16.0 million long-term debt agreement. The Company obtained a waiver amendment of such requirement. The Company is in compliance with the provisions on all loan agreements as waived or amended. Under certain of the loan agreements, the lenders have the option to require the prepayment of any outstanding borrowings in the event of a change in the control of the Company. In fiscal 2001, the Company began construction of a new shell egg production and processing facility in Guthrie, Kentucky, with completion of the facility expected in fiscal 2004. The total cost of the facility is approximately $18.0 million, of which $12.0 million was incurred through August 31, 2002. The Company has commitments from an insurance company to receive $10.0 million in long-term borrowings and from a leasing company to receive $7.5 million applicable to the Guthrie facility. Including the construction project, the Company has projected capital expenditures of $14.0 million fiscal 2003, which will be funded by cash flows from operations and additional long-term borrowings. As part of the Smith Farms purchase in September 1999, the Company completed, during fiscal 2002, construction of egg production and processing facilities in Searcy, Arkansas and Flatonia, Texas. A leasing company funded $36.0 million for the projects. These facilities are leased with seven-year terms and accounted for as operating leases. Impact of Recently Issued Accounting Standards. In October 2001, the FASB issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS No. 144). SFAS No. 144 supersedes Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed of," (SFAS No. 121), however, it retains the fundamental provisions of SFAS No. 121 related to the recognition and measurement of the impairment of long-lived assets to be "held and used." In addition, SFAS No. 144 provides more guidance on estimating cash flows when performing a recoverability test, requires that a long-lived asset to be disposed other than by sale (e.g., abandoned) be classified as "held and used" until it is disposed of, and establishes more restrictive criteria to classify an asset as "held for sale." The Company adopted SFAS No. 144 effective June 2, 2002. The adoption did not have an effect on the Company's consolidated results of operations or financial position. Forward Looking Statements. The foregoing statements contain forward-looking statements, which involve risks and uncertainties, and the Company's actual experience may differ materially from that discussed above. Factors that may cause such a difference include, but are not limited to, those discussed in "Factors Affecting Future Performance" below, as well as future events that have the effect of reducing the Company's available cash balances, such as unanticipated operating losses or capital expenditures related to possible future acquisitions. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management's analysis only as the date hereof. The Company assumes no obligation to update forward-looking statements. See also the Company's reports to be filed from time to time with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. Factors Affecting Future Performance. The Company's future operating results may be affected by various trends and factors beyond the Company's control. These include adverse changes in shell egg prices and in the grain markets. Accordingly, past trends should not be used to anticipate future results and trends. Further, the Company's prior performance should not be presumed to be an accurate indication of future performance. 9 Critical Accounting Policies. The preparation of financial statements in accordance with accounting standards generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Management suggests that the Company's Summary of Significant Accounting Policies, as described in Note 1 of the Notes to Consolidated Financial Statements included in Cal-Maine Foods, Inc. and Subsidiaries annual report on Form10-K for the fiscal year ended June 1, 2002, be read in conjunction with this Management's Discussion and Analysis of Financial Condition and Results of Operations. The Company believes the critical accounting policies that most impact the Company's consolidated financial statements are described below. Allowance for Doubtful Accounts. In the normal course of business, the Company extends credit to its customers on a short-term basis. Although credit risks associated with our customers are considered minimal, the Company routinely reviews its accounts receivable balances and makes provisions for probable doubtful accounts. In circumstances where management is aware of a specific customer's inability to meet its financial obligations to the Company (e.g. bankruptcy filings), a specific reserve is recorded to reduce the receivable to the amount expected to be collected. For all other customers, the Company recognizes reserves for bad debts based on the length of time the receivables are past due, generally 100% for amounts more than 60 days past due. Inventories. Inventories of eggs, feed, supplies and livestock are valued principally at the lower of cost (first-in, first-out method) or market. If market prices for eggs and feed grains move substantially lower, the Company would record adjustments to write-down the carrying values of eggs and feed inventories to fair market value. The cost associated with flock inventories, consisting principally of chick purchases, feed, labor, contractor payments and overhead costs, are accumulated during the growing period of approximately 18 weeks. Capitalized flock costs are then amortized over the productive lives of the flocks, generally one to two years. Flock mortality is charged to cost of sales as incurred. High mortality from disease or extreme temperatures would result in abnormal adjustments to write-down flock inventories. Management continually monitors each flock and attempts to take appropriate actions to minimize the risk of mortality loss. Long-Lived Assets. Depreciable long-lived assets are primarily comprised of buildings and improvements and machinery and equipment. Depreciation is provided by the straight-line method over the estimated useful lives, which are 15 to 25 years for buildings and improvements and 3 to 12 years for machinery and equipment. An increase or decrease in the estimated useful lives would result in changes to depreciation expense. The Company continually reevaluates the carrying value of its long-lived assets, for events or changes in circumstances, which indicate that the carrying value may not be recoverable. As part of this reevaluation, the Company estimates the future cash flows expected to result from the use of the asset and its eventual disposal. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the asset, an impairment loss is recognized to reduce the carrying value of the long-lived asset to the estimated fair value of the asset. Investment in Affiliates. The Company has invested in other companies engaged in the production, processing and distribution of shell eggs and egg products. The Company's ownership percentages in these companies range from less than 20% to 50%. Therefore, these investments are recorded using the cost or the equity method, and accordingly, not consolidated in the Company's financial statements. Changes in the ownership percentages of these investments might alter the accounting methods currently used. The Company is a guarantor of approximately $9 million of long-term debt of one of the affiliates. Goodwill. Goodwill primarily relates to the fiscal 1999 acquisition of Hudson Brothers, Inc. Goodwill and indefinite lived intangible assets are no longer amortized but are reviewed annually, or more frequently if impairment indicators arise, for impairment. An impairment loss would be recorded if the recorded goodwill exceeds its implied fair value. The Company has only one operating segment, which is its sole reporting unit. Accordingly, goodwill is tested for impairment at the entity level. Significant adverse industry or economic changes, or other factors not anticipated could result in an impairment charge to reduce recorded goodwill. Income Taxes. The Company determines its effective tax rate by estimating its permanent differences resulting from differing treatment of items for tax and accounting purposes. The Company is periodically audited by taxing authorities. Any audit adjustments affecting permanent differences could have an impact on the Company's effective tax rate. Disclosure and Internal Controls. The Chief Executive Officer and Chief Financial Officer of the Company believe the Company's disclosure controls and procedures are effective. On October 3, 2002, the Chief Executive Officer and Chief Financial Officer met with the Audit Committee of the Company's Board of Directors and outside auditors to evaluate the Company's disclosure controls and 10 procedures, and internal control systems. Based upon these meetings, the Company's Chief Executive Officer and Chief Financial Officer found no significant changes in internal controls or in other factors that could significantly affect internal controls. ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK There have been no material changes in the market risk reported in the Company's fiscal 2002 annual report on Form 10-K. 11 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits 99.1 Written Statement of The Chief Executive Officer 99.2 Written Statement of The Chief Financial Officer b. Reports on Form 8-K No Current Report on Form 8-K was filed by the Company covering an event during the first quarter of fiscal 2002. 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CAL-MAINE FOODS, INC. (Registrant) Date: October 9, 2002 /s/ Bobby J. Raines ------------------------------------- Bobby J. Raines Vice President/Treasurer (Principal Financial Officer) Date: October 9, 2002 /s/ Charles F. Collins ------------------------------------- Charles F. Collins Vice President/Controller (Principal Accounting Officer) 13 CERTIFICATION I, Fred R. Adams, Jr., certify that: 1. I have reviewed this quarterly report on Form 10-Q of Cal-Maine Foods, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. /s/ Fred R. Adams, Jr. - ----------------------------------------------------- Fred R. Adams, Jr. Chairman of the Board and Chief Executive Officer Date : October 9, 2002 14 CERTIFICATION I, Bobby J. Raines, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Cal-Maine Foods, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. /s/ Bobby J. Raines - ----------------------------------------------------- Bobby J. Raines Vice President, Chief Financial Officer, Treasurer and Secretary Date: October 9, 2002 15