Cal-maine Foods, Inc. · NASDAQ:CALM
Cal-maine Foods — Stephens Annual Investment Conference 2021
30 slides from Cal-maine Foods's conference presentation, Dec 2, 2021
Slide 1: Stephens Annual Investment Conference, December 2, 2021
StephensAnnualInvestment ConferenceDecember2,2021DolphBaker,ChiefExecutive OfficerShermanMiller,PresidentandChiefOperationsOfficerMaxBowman,Chief FinancialOfficerPublicGrowth25YearsIPO1996ANDSERVICE
Slide 2: Forward-Looking and Cautionary Statements
Forward looking statements and use non GAAP financial measures Forward‐Looking and Cautionary Statements This presentation contains “forward‐looking statements” relating among other things, our shell egg business, including estimated future producti on data, expected construction schedules, projecte
Slide 3: Cal-Maine Foods' snapshot
Cal‐Maine Foods’ snapshot Egg market scale #1 shell egg producer and distributor in U.S. leading peers key metrics(1) ~19% retail egg market share(2) 23 integrations since 1989 ~11.9% share of U.S table egg layer flock(3) 3,286 colleagues(4) Financial highlights FY 2021 $1.3 bn sales 1.1 billion egg
Slide 4: Key management focus areas
Key management focus areas Focus on food choice offerings Augment value drivers 3 Position for future growth Cultivate portfolio of high quality, food choice offerings that meet heightened need for affordable and nutritious protein Drive shell egg mix shift premium categories, including organic, nut
Slide 5: Position food portfolio to meet nutrition imperatives
Position food portfolio to meet nutrition imperatives Focus food choice offerings Global trajectories to 2050 Larger population 9.3 billion people (1) Larger food need 60% more food required (1) Larger calorie gap 2006 2050 69% calorie gap (2) Rising public health needs Better health Eggs supply “ke
Slide 6: Drive favorable food portfolio mix while meeting customer needs
Drive favorable food portfolio mix while meeting customer needs Focus on food choice offerings Continue driving shell egg mix shift(1) FY shell egg volumes (million dozens sold) 1,039 24% 76% 2019 1,073 27% 73% 2021 Conventional Specialty Steady increase in specialty shell egg sales volume since FY
Slide 7: Maintain operating resilience in challenging market
Maintain operating resilience challenging market Focus on food choice offerings Monitor flock & egg supply(1) U.S. table egg average layer flock and table egg production (TTM billion dozens as CY November) 311.3 7.4 2014 298.6 7.1 2015 309.1 7.4 2016 320.8 7.8 2017 332.2 8.0 2018 337.0 8.2 2019 326.
Slide 8: Leverage production capabilities to capture efficiencies
Leverage production capabilities capture efficiencies Focus on food choice offerings Manage cost of sales(1) Cost sales millions & YoY % change $1,138 2.5% 21.9% 19.6^ 55.9% 2019 $1.172 2.2% 19.8% 20.0% 57.8% 2020 $1,118 2.4% 14.9% 21.0% 61.5% 2021 3.0% 1.4% Egg products and other Egg purchases and
Slide 9: Continued excellent service for blue chip customer base
Continued excellent service for blue chip customer base(1) Augment value drivers Serve diverse customer base Serve retail, wholesale and foodservice customers with focus on augmenting long standing relationships Top three customers represent 48.6% of revenue No customer represented more than 29.8% o
Slide 10: Focus on improving our financial results
Focus on improving our financial results Augment value drivers Drive net sales (1) Revenue levered shell egg net average selling price (NASP) $1,075 $1,007 2017 $1,503 $1,397 2018 $1,361 $1,265 2019 $1,352 $1,231 2020 $1,349 $1,217 2021 Strive drive top line improvements Revenue levered shell egg ne
Slide 11: Build on strong acquisition and integration track record
Build on strong acquisition and integration track record Augment value drivers Successfully leverage integration expertise Targets integrated 23 since 1989(1) Acquisition benefits Geography Cage free capability Million Processing Synergy highlights Customer proximity Specialty franchise access Integ
Slide 12: Poised for supply transitioning to shell egg demand
Poised supply transitioning shell egg demand(1) Augment value drivers Cage free demand drivers Husbandry focus appetite for diverse housing conditions Aviary Free range Pasture raised Consumer social responsibility focus human and animal health and well being Organic Nutritionally enhanced GMO free
Slide 13: Evolving our strong human capital focus
Evolving our strong human capital focus Position for future growth Drive strong safety outcomes(1) OSHA safety outcomes: poultry raising industry Total recordable injury rate (TRIR) 5.2 4.5 2019 4.9 3.5 2020 2.9 2021 CALM TRIR Poultry raising TRIR Strong and steadily improving safety outcomes versus
Slide 14: Scaling our commitment to sustainability
Scaling our commitment to sustainability Position for future growth Quality Food Choices Our efforts continue drive strong results ISS Quality Score: product safety, quality and brand(1) Zero product recalls or market bans in prior three fiscal years(2) 100% SQF(™) certified with very strong complia
Slide 15: Execute against capital allocation priorities
Execute against capital allocation priorities Position for future growth Manage cash priorities(1) Historical use of cash ($ millions $152 $86 $67 2017 $20 $20 2018 $128 $42 $18 $68 2019 $169 $45 $124 2020 $97 $2 $95 2021 $56 $45 $11 1Q 2022 Capex Acquisitions Dividends paid Maintain selective acqui
Slide 16: Key takeaways for CALM positioning
Key takeaways for CALM positioning Largest producer and distributor of fresh shell eggs and egg products the U.S. Proven and highly efficient operators with deep talent bench and industry expertise Nimble and poised meet evolving consumer food choice preferences Strong commitment sustainable operati
Slide 17: Appendix
Appendix 16
Slide 18: Proven and highly efficient operating expertise
We are proud our proven and highly efficient operating expertise(1) Fully integrated operations Production and processing capabilities ~6.8 million eggs per hour3 breeding 25 feed mills sales and distribution hatching 44 processing packaging pullet rearing production Production distribution Support
Slide 19: Key U.S. shell egg market drivers' visualizations
Key U.S. Shell egg market drivers’ visualizations Productive layer hen inventory (%) change(1) 8.0% 6.0% 4.0% 2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 0.9% 3.4% year range 2020 2021 year average Breaking egg activity (% charge)(3) September break up 6.5% YoY fo
Slide 20: Key U.S. shell egg market drivers' tables
Key U.S. shell egg market drivers’ tables Productive layer hen inventory(1) Table egg production(2) Breaking egg activity(3) Table egg type hatch(4) Productive layer hen inventory (ex molt) November 202 1) / USDA Chicken and Egg Report in millions 2016 2017 2018 2019 2020 2021 5 year average - year
Slide 21: Key U.S. shell egg market drivers' visualizations
Key U.S. shell egg market drivers’ visualizations Average layer hen inventory(1) October average layer hen inventory up ~60 bps YoY vs. 2020 lows: tracking with five year average 10.0% 5.0% 0.0% 5.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0.6% 3.7% 5 year range 2020 2021 5 year average Eggs
Slide 22: Key U.S. shell egg market drivers' tables
Key U.S. shell egg market drivers’ tables Average layer hen inventory(1) Average table egg laver hen inventory October 202 1) USDA NASS 2016 2017 2018 2019 2020 2021 year average vear max vear min YoY % 21 level vs year average Jan 302.5 321.7 329.0 340 337 5 327 2 340 321.7 3 1% 1.2% Feb 307 320.8
Slide 23: Key egg market indicators
Key egg market indicators Urner Barry Southeast Large px dozen(1) FY average daily price Avian influenza outbreak $1.55 2015 $1.76 2016 $0.85 2017 $1.49 2018 $1.23 2019 $1.22 2020 $1.16 2021 $1.28 YTD 2022 U.S. consumer egg expenditures(2) Consistently higher annual $ retail shell egg spend (35 54 c
Slide 24: Financial Highlights: Income Statement
Financial Highlights Income Statement Cal Maine Foods' select income statement highlights 13 Weeks Ended Fiscal Year Ended August 28, 2021 August 20, 2020 Mav 2Q, 2021 Mav 20.2020 Net sales $ 331,704 292,782 1,348,987 $ 1,351,609 Gross profit 6,645 16,765 160,661 179,588 Operating income (loss) (39,
Slide 25: Financial Highlights: Operating results
Financial Highlights Operating results Cal Maine Foods' select operating results 13 Weeks Ended Fiscal Ended August 28, 2021 August 20, 2020 Mav 2Q. 2021 Mav 30.2020 Dozen eggs sold (000) Conventional 184,487 195,238 785,446 813,255 Specialty 74,8q8 68,756 287.765 255.895 Total 259,385 263,994 1,073
Slide 26: EBITDA reconciliation
EBITDA reconciliation Non GAAP Measure – EBITDA EBITDA non GAAP measure and defined net income attributable Cal Maine Foods, Inc. plus interest, taxes, depreciation and amortization. The following table sets forth reconciliation EBITDA to net income attributable to Cal Maine Foods, Inc.: FYE FYE FYE
Slide 27: Citations Slide
Citations Slide Cal Maine Foods’ snapshot 1) Data of CALM fiscal year end 2021 unless otherwise noted. World Agricultural Supply and Demand Estimates (WASDE). U.S. market share data is as of calendar year end; CALM percent of shell egg market share based on fiscal year egg disappearance data, which
Slide 28: Citations Slide
Citations Slide Continued excellent service for blue chip customer base Data of fiscal year 2021 unless noted. For more information about our revenue concentration, please review our most recent Form 10 K. Includes investment unconsolidated entity. Eggs packed USDA grademarked consumer packages labe
Slide 29: Citations Slide
Citations Slide 14 Execute against capital allocation priorities 1) Company filings. Share repurchases of ~$1 million annually used for payment of taxes on incentive stock vested are omitted. Cash and cash equivalents and investments available for sale (AFS). 3) Pipeline data of 1Q FY 2022. Select t
Slide 30: Cal-Maine Foods
CalMaineFoods
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