calm-20210529_10K
Table of Contents
1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC
20549
FORM
10-K
☑
ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Fiscal Year
Ended
May 28, 2022
☐
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
Securities registered pursuant to Section 12 (g) of the Act:
NONE
Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act.
Yes
☑
No
☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes
☐
No
☑
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
☑
No
☐
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
☑
No
☐
Indicate
by
check
mark
whether
the
registrant
is
a
large
accelerated
filer,
an
accelerated
filer,
a
non-accelerated
filer,
a
smaller
reporting
company,
or an emerging
growth company.
See the definitions
of “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
☐
If an
emerging
growth company,
indicate by
check mark
if the
registrant has
elected not
to use
the extended
transition period
for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act
☐
Indicate by
check mark
whether the registrant
has filed
a report on
and attestation
to its management's
assessment of
the effectiveness
of its
internal control over
financial reporting under
Section 404(b) of
the Sarbanes-Oxley Act
(15 U.S.C.
7262(b)) by the
registered public accounting
firm that prepared or issued its audit report.
☑
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes
☐
No
☑
The aggregate market value, as
reported by The NASDAQ Global Select
Market, of the registrant’s
Common Stock, $0.01 par value,
held by
non-affiliates
at November 26,
2021, which
was the
date of
the last
business day
of the
registrant’s
most recently
completed second
fiscal
quarter, was $
1,428,527,739
.
As of
July 19,
2022,
44,139,524
shares of
the registrant’s
Common Stock,
$0.01 par value,
and
4,800,000
shares of
the registrant’s
Class A
Common Stock, $0.01 par value, were outstanding.
DOCUMENTS INCORPORATED
BY REFERENCE
The information called
for by Part
III of this Form
10-K is incorporated
herein by reference
from the registrant’s
Definitive Proxy Statement
for its 2022
annual meeting of
stockholders which will be
filed pursuant to
Regulation 14A not later
than 120 days
after the end
of the fiscal
year covered by this report.
Table of Contents
2
TABLE OF CONTENTS
Item
Page
Number
Part I
FORWARD-LOOKING STATEMENTS
1.
Business
3
1A.
Risk Factors
12
1B.
Unresolved Staff Comments
19
2.
Properties
19
3.
Legal Proceedings
20
4.
Mine Safety Disclosures
20
Part II
5.
MarketforRegistrant’sCommonEquity,RelatedStockholderMattersandIssuerPurchases
of Equity Securities
20
6.
Reserved
22
7.
Management’s Discussion and Analysisof Financial Condition and Results of Operations
23
7A.
Quantitative and Qualitative Disclosures About Market Risk
34
8.
Financial Statements and Supplementary Data
35
9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
61
9A.
Controls and Procedures
61
9B.
Other Information
63
9C.
Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
63
Part III
10.
Directors, Executive Officers and Corporate Governance
63
11.
Executive Compensation
63
12.
SecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockholder
Matters
63
13.
Certain Relationships and Related Transactions,and Director Independence
63
14.
Principal Accounting Fees and Services
64
Part IV
15.
Exhibit and Financial Statement Schedules
64
16.
Form 10-K Summary
65
Signatures
66
Table of Contents
3
PART
I.
FORWARD
-LOOKING STATEMENTS
This report contains numerous forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 (the
“Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) relating
to, among other things,
our shell egg 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 COVID-19 pandemic,
potential future impact
on our business
of new legislation,
rules or policies,
potential
outcomes
of
legal
proceedings,
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
or results could
differ
materially from those
projected in the forward-looking
statements. The forward-looking
statements are based
on management’s
current intent, belief,
expectations, estimates, and
projections regarding the
Company and its industry.
These statements are
not
guarantees of future performance
and involve risks, uncertainties, assumptions,
and other factors that are
difficult to predict and
may be beyond
our control. The
factors that could
cause actual results
to differ
materially from
those projected
in the forward-
looking statements
include, among
others, (i)
the risk
factors set
forth in
Item 1A
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
in the shell
egg business (including disease, pests, weather conditions, and potential for product recall), including but not limited to the most
recent outbreak of highly pathogenic avian influenza (“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, (iii) changes in
the demand for and market
prices of shell eggs
and feed costs, (iv)
our ability to
predict and meet
demand for cage-free and
other specialty eggs, (v)
risks, changes, or obligations
that
could
result
from
our
future
acquisition
of
new
flocks
or
businesses
and
risks
or
changes
that
may
cause
conditions
to
completing
a
pending
acquisition
not
to
be
met,
(vi)
risks
relating
to
the
evolving
COVID-19
pandemic,
including
without
limitation increased costs
and rising inflation
and interest rates, which
generally have been
exacerbated by Russia’s
invasion of
Ukraine starting
in February
2022, (vii)
our ability
to retain
existing customers,
acquire new
customers and
grow our
product
mix, and (viii) adverse results
in pending litigation matters. Readers
are cautioned not to place
undue reliance on forward-looking
statements because,
while we believe
the assumptions on
which the forward-looking
statements are based
are reasonable, there
can be no
assurance that these
forward-looking statements will prove
to be accurate.
Further, forward-looking statements included
herein are only made as of the respective dates thereof, or if no
date is stated, as of the date hereof. Except as otherwise required
by
law,
we
disclaim
any
intent
or
obligation
to
publicly
update
these
forward-looking
statements,
whether
because
of
new
information, future events, or otherwise.
ITEM 1.
BUSINESS
Our Business
We are the largest
producer and distributor of shell eggs in the United States. Our mission is to be the most sustainable
producer
and reliable
supplier of
consistent, high
quality fresh
shell eggs
and egg
products
in the
country,
demonstrating
a "Culture
of
Sustainability" in everything we do, and
creating value for our shareholders,
customers, team members and communities. We sell
most of our shell
eggs in the southwestern,
southeastern, mid-western and
mid-Atlantic regions of the
U.S. and aim to maintain
efficient, state-of-the-art operations located close to our customers. We
were founded in 1957 by the late Fred R. Adams, Jr. and
are headquartered in Ridgeland, Mississippi.
The Company has one operating segment, which is the production, grading, packaging,
marketing and distribution of shell eggs.
Our
integrated
operations
consist
of
hatching
chicks,
growing
and
maintaining
flocks
of
pullets,
layers
and
breeders,
manufacturing feed, and
producing, processing, packaging, and
distributing shell eggs.
Layers are mature
female chickens, pullets
are female chickens usually less than 18 weeks of age, and breeders are male and female chickens used to produce fertile eggs to
be hatched for egg production flocks. Our total flock as of May 28, 2022 consisted of approximately 42.2 million layers and 11.5
million pullets and breeders.
Many of our customers rely
on us to provide most of
their shell egg needs, including
specialty and conventional eggs.
Specialty
eggs encompass a broad range of products. We classify nutritionally enhanced,
cage-free, organic,
free-range, pasture-raised and
brown eggs
as specialty
eggs for
accounting and
reporting purposes.
We
classify all
other shell
eggs as
conventional products.
While we report separate sales information
for these egg types, there
are many cost factors that are
not specifically available for
conventional or
specialty eggs
due to
the nature
of egg
production. We
manage our
operations and
allocate resources
to these
types of eggs on a consolidated basis based on the demands of our customers.
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4
Throughout the Company’s history,
we have acquired other companies in our industry. Since 1989 through our fiscal year ended
May 28, 2022, we have completed 23 acquisitions ranging
in size from 160 thousand layers to 7.5 million layers. Most recently,
effective on May 30, 2021, the Company acquired
the remaining 50% membership interest in Red River Valley
Egg Farm, LLC
(“Red River”),
which owns and
operates a specialty