CAL-MAINE FOODS, INC.
May 2017
1
FORWARD-LOOKING STATEMENTS
This presentation includes forward-looking statements, which are all
statements other than historical facts, can be identified by use of words
such as “expect,” “will,” and “anticipate,” and include statements
regarding expected operating results, acquisition transactions and
potential effects of industry events or trends on our business. Important
factors that can cause our results to differ materially from those
anticipated in the forward-looking statements include egg prices and
feed costs; changes in consumer demand or requirements of major
customers; unanticipated results of acquisitions or joint ventures; ability
to obtain eggs from outside producers; agricultural, regulatory and
litigation risks; and other factors described in the cautionary language
included in our filings with the Securities and Exchange Commission,
including in the “Risk Factors” section of our annual report on Form 10K and subsequent filings. We undertake no obligation to update any
forward-looking statements.
2
CAL-MAINE FOODS PROFILE
We are the largest producer and marketer of
shell eggs in the United States
 Founded in 1957 in Jackson, Mississippi
 Acquired Ralston-Purina egg operations in 1972
 Completed 20 acquisitions since 1989
 Fully-integrated egg producer
 Since 1996, publicly traded on NASDAQ under symbol “CALM”
 FY 2016 U.S. fresh shell egg market share - 23 percent
 Achieved record sales of $1.9 billion in FY 2016
 YTD Sales FY 2017 $799.9 million, down 50.2% from prior year
3
KEY INVESTMENT POINTS
 Largest egg producer and marketer in the United States
 Efficient, state-of-the-art operations
 Solid customer base of leading retail and food service companies
 Strong consumer demand for eggs
 Leading producer and marketer of high-margin specialty eggs
 Solid financial position
 Proven management team
4
THE U.S. EGG INDUSTRY
In calendar year 2016, the United States produced
about 89 billion eggs.
Egg Products
(Liquid, Frozen)
31%
Exports
5
3%
66%
Shell Eggs to
Foodservice &
Consumers
SALES HISTORY
Cal-Maine Annual Net Sales ($ in millions)
Total Shell Eggs Sold (in millions of dozens)
Net Sales
Eggs Sold
$2,000.0
$1,908.7
$1,800.0
$1,440.9
$1,400.0
$915.9
$928.8
$910.1
1053.6
900.0
948.5
$942.0
884.3
800.0
$800.0
$598.1
777.9
$477.6
683.1
685.5
805.4
821.4
700.0
678.5
600.0
$200.0
$0.0
500.0
2006
6
1,000.0
1013.7
$1,113.1
$1,000.0
$400.0
1063.1
$1,288.1
$1,200.0
$600.0
1,100.0
$1,576.2
$1,600.0
1,200.0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
CAL-MAINE LOCATIONS
Cal-Maine Locations
7
FULLY-INTEGRATED OPERATIONS
Feed mills
Sales and
distribution
Breeder
flocks
Processing
and
packaging
Hatcheries
Egg
production
8
Pullet
growing
EGG PRODUCTION FACILITIES
Contract
production
7%
93%
Companyowned
9
COMPANY-OWNED FACILITIES
 State-of–the-art
 Fully-automated
 Temperature
controlled
 Labor efficient
 Located near our customers
10
CAL-MAINE CUSTOMERS
8% Food Service
Retail
88%
4% Egg Products
(and Miscellaneous)
11
TOP 10 CUSTOMERS
% Fiscal 2016 Sales
1. Walmart and Sam’s Club
2. H.E. Butt Co.
3. CCF Brands
4. Publix Super Markets
5. Food Lion
6. Eggs America (Sysco, US Foodservice, etc.)
7. Topco
8. McLane
9. Costco
10. Shoprite
Total Top 10 customers
12
28.9%
9.1%
8.3%
8.2%
70.6%
Avian Influenza
 Spring 2015 outbreak in the upper Midwestern
United States affected over 40 million laying
hens and pullets
 12% reduction in the national laying flock
 Recent outbreaks in Southeastern states have
not affected table egg production
13
MONTHLY HEN INVENTORY
Million Hens First Day of Month
325.0
2013
2014
315.0
2015
305.0
2016
2017
295.0
285.0
275.0
265.0
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
Source: USDA Chicken and Egg Report as Revised March 2017
14
ANNUAL EGG PRICES
Urner Barry Southeastern Regional Large Egg Market Price
(per dozen eggs)
$2.00
$1.79
$1.80
$1.53
$1.60
$1.43
$1.38
$1.40
$1.35
$1.22
$1.21
$1.12 $1.13
$1.20
$1.05
$0.93
$1.00
$0.80
$0.79
$0.78
$0.66
$0.78
$0.69
$0.86
$0.72 $0.75
$0.60
$0.40
$0.20
$0.00
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*
(Monthly average by fiscal year)
*Fiscal year 2017 reflects YTD through 2/25/17
15
VOLATILE FEED INGREDIENT PRICES
Corn Dollars per Bushel
Soy Bean Meal Dollars per Ton
900.00
9
800.00
8
700.00
7
600.00
6
500.00
5
400.00
4
300.00
3
200.00
2
100.00
1
0.00
0
(Monthly average)
16
Corn
$/bushel
Soy Meal
$/ton
FEED COSTS
60
57
Cents per Dozen Eggs Produced
55
55
54
53
51
50
48
47
46
45
45
40
39
39
37
38
36
35
35
35 35
33
30
30
25
20
17
29
49
49 48
46
45
43 44
42
40
48
33
42 43
41
43
41 41
39 40
GROWTH STRATEGY
 Pursue acquisitions of existing shell egg production
and processing facilities
 Enhance production capacity and efficiency
 Increase value-added specialty egg business
18
GROWTH STRATEGY
Pursue acquisition opportunities
 Leverage solid track record with completion of 20
acquisitions since 1989
 Extend ability to identify, execute and integrate additional
operations
 Expand capabilities in existing markets and broaden
geographic reach
 Enhance national presence and strengthen customer
relationships
19
ACQUISITION OPPORTUNITIES
Top U.S. Egg Producers
Layers in Production, December 31, 2016, in thousands
20
Source: Egg Industry Magazine – February 2017
FOODONICS INTERNATIONAL, INC.
 Cal-Maine Foods acquired substantially all of the assets of
Foodonics International, Inc. and its related entities doing
business as Dixie Egg Company.
 Includes capacity for 1.6 million laying hens and related feed
production, milling and distribution facilities in Georgia,
Alabama and Florida as well as contract grower
arrangements for an additional 1.5 million laying hens.
 Acquired Egg-Land’s Best franchise with licensing rights for
portions of certain markets in Alabama, Florida and Georgia
as well as Puerto Rico, Bahamas and Cuba.
21
HAPPY HEN EGG FARMS, INC.
 Cal-Maine Foods acquired substantially all of the assets of
Happy Hen Egg Farms, Inc.
 Includes capacity for 350,000 laying hens and distribution
facilities near Harwood and Wharton, Texas.
 Site is designed for capacity of up to 1.2 million laying hens.
22
GROWTH STRATEGY
Enhance production capacity and efficiency
•
•
•
23
Over $70 million of capital projects currently underway
Projects in Kentucky, Texas, Arkansas, Utah, Georgia and Florida
will increase Cage-Free and Organic capacity
Project in Utah will increase California compliant capacity up to
620,000 hens, with a net 345,000 additional hens
RED RIVER VALLEY EGG FARM, LLC
Cal-Maine Foods and Rose Acre Farms have entered a
production joint venture to build a shell egg production
complex near Bogata, Red River County, Texas
 Features Rose Acre Farms’ patent-pending cage-free aviary
designs and systems
 Provides for capacity of approximately 1.8 million laying hens, with
permits for up to 2.9 million hens
 Creates 80-100 new jobs in local community
 Fully online in 2017
 Enhances ability to meet growing demand for cage-free and other
specialty eggs
24
GROWTH STRATEGY
Increase value-added specialty egg business
 Offer nutritionally enhanced eggs,
cage-free and organic eggs
 Meet consumer demand in rapidly
growing segment
 Benefit from higher and less cyclical
selling prices
 Through Q3 FY 2017, represented
23.0 percent of dozens sold and
44.1 percent of sales revenue
25
SPECIALTY EGG SALES
Dozen Eggs Sold (in millions)
1200
1000
800
778
805
821
884
948
1,014
1,063
1,054
211
242
679
600
400
200
0
81
107
116
132
144
156
174
FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016
Total
26
Specialty
RETAIL EGG MARKET ANALYSIS*
Dollars
Dozens
-30.4%
+3.4%
Total Specialty Eggs
-5.6%
+2.5%
Cage Free Eggs
+6.9%
+19.6%
+11.1%
+13.1%
Total Fresh Eggs
Organic Eggs
52 weeks ending March 11, 2017, compared with same period for prior year.
Source:
27
KEY STRENGTHS
28
Low Cost
Producer
 Fully-integrated operations located in 16 states
Favorable Consumer
Demand Trends
 Eggs taste great and provide an affordable and
 Focused on automation throughout the supply chain
convenient source of protein
Attractive Growth
Profile
 Solid track record of internal growth and acquisitions
Solid Customer
Base
 Leading names of retail and institutional food service
Strong Balance
Sheet
 Solid financial position supports future growth
 Increasing sales of high-margin specialty eggs
customers
FINANCIAL HIGHLIGHTS- FY2016*
 Fiscal Year 2016 Annual Sales - $1.9 billion
 Fiscal Year 2016 EBITDA - $528 million
 Working Capital - $543 million
 Total Debt - $26 million
 Debt to EBITDA - .05:1
*Reported for fiscal year ended May 28, 2016
29
INCOME STATEMENT – YTD FY2017
(Unaudited; in thousands except per share amounts)
39 Weeks Ended
February 25,
February 27,
2017
2016
Net sales
$
Gross profit (loss)
Operating income (loss)
Other income
Income (loss) before income taxes
$ 1,605,630
33,544
607,394
(92,441)
472,038
11,298
14,143
(81,134)
484,256
Net income (loss)
$
(49,807)
$
316,417
Net income (loss) per common share:
Basic
Diluted
$
$
(1.03)
(1.03)
$
$
6.57
6.54
Weighted average shares outstanding:
Basic
Diluted
30
799,929
48,285
48,285
48,177
48,359
OPERATING HIGHLIGHTS – YTD FY2017
39 Weeks Ended
February 25,
2017
February 27,
2016
758,114
633,246
800,520
620,356
23.0%
44.1%
22.8%
27.0%
1.020
1.980
0.406
$ 1.919
$ 2.279
$ 0.420
Dozen Eggs Sold (000)
Dozen Eggs Produced (000)
% Specialty Egg Sales (Dozen)
% Specialty Sales (Dollars)
Net Average Selling Price (Dozen)
Net Avg Selling Price Specialty Egg (Doz)
Feed Cost (Dozen)
31
$
$
$
BALANCE SHEET HIGHLIGHTS
(Unaudited; in thousands)
February 25,
2017
Cash and short-term investments
$
189,575
$ 389,545
Total assets
$ 1,085,275
$1,111,765
Long-term debt, less current maturities
$
7,302
$
Shareholders' equity
$
868,362
$ 917,361
Working capital
$
392,224
$ 542,832
Debt to Capital
32
May 28,
2016
.03:1
9,250
.03:1
CASH USE PRIORITIES
 Variable Dividend
1/3 of Net Income Paid Quarterly
 Acquisition of Existing Capacity
33
CASH DIVIDENDS PAID*
*Cents per share, as adjusted for October 31, 2014, two-for-one stock split
98.3
75.1
44.1
19.1
24.0
21.6
14.7
7.9
8.6
7.1
0.0
34
26.0
23.5
16.318.2
10.6
3.4
5.1
21.2
10.0
6.6
2.2
35.0
31.7
25.2
21.7
19.1
29.6
0.0
18.1
3.4
0.0 0.0 0.0 0.0
STOCK OWNERSHIP & FLOAT
Holdings as of July 29, 2016
Ownership
Shares
Outstanding
% of
Total
Shares Owned by Adams Family
15,127,086
31.2%
1,910,735
3.9%
2,345,820
4.8%
Public Float
29,151,314
60.1%
Total Outstanding Shares
48,534,955
100.0%
(Excludes ESOP)
Shares Owned by Other Insiders
(Excludes ESOP)
Shares Owned by ESOP
35
KEY INVESTMENT POINTS
 Largest egg producer and marketer in the United States
 Efficient, state-of-the-art operations
 Solid customer base of leading retail and food service companies
 Strong consumer demand for eggs
 Growing market for high-margin specialty eggs
 Solid financial position
 Proven management team
36
FINANCIAL SUMMARY
Annual Net Sales and Operating Income
($ in millions)
Operating Income
Net Sales
$1,909
$2,000.0
$1,800.0
$1,600.0
$1,441
$1,113
$1,200.0
$800.0
$600.0
$477.6
$598.1
$223.6
$121.5 $102.6
$83.5
$470.3
$146.1
$88.7
(In millions)
37
$200.0
$0.0
FY 2013 Operating Income of $87.6 million excluding litigation settlement
683
$250.0
$50.0
$58.2
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Dozen
Eggs Sold
$300.0
$100.0
$4.5
$0.0
$350.0
$150.0
$59.6
$400.0
$200.0
$400.0
$235.3
$915.9 $928.8 $910.1 $942.0
$1,000.0
$450.0
$1,576
$1,288
$1,400.0
$500.0
685
679
778
805
821
884
948
1,014 1,063 1,054
INCOME STATEMENT – FY 2014-2016
FY2016
$1,908,650
FY2015
$1,576,128
FY2014
$1,440,907
Gross profit
648,074
395,721
302,764
Operating income
470,314
235,335
146,052
16,935
11,214
15,790
487,249
246,549
161,549
Net income
$ 316,041
$ 161,254
$ 109,207
Net income per common share (1) :
Basic
Diluted
$
$
(Unaudited; in thousands except per share amounts)
Net sales
Other income (expense)
Income before income taxes
Weighted average shares outstanding(12):
Basic
Diluted
(1) As adjusted for October 31, 2014, two-for-one stock split
38
6.56
6.53
48,195
48,365
$
$
3.35
3.33
48,136
48,437
$
$
2.27
2.26
48,095
48,297
OPERATING HIGHLIGHTS –
Dozen Eggs Sold (000)
Dozen Eggs Produced (000)
May 28,
2016
May 30,
2015
1,053,597
819,307
1,063,086
798,842
% Specialty Egg Sales (Dozen)
% Specialty Sales (Dollars)
Net Average Selling Price (Dozen)
Net Average Selling Price Specialty Egg (Dozen)
Feed Cost (Dozen)
39
FY2016
22.9%
29.1%
$
$
$
1.735
2.213
0.414
19.8%
27.2%
$
$
$
1.429
1.976
0.439