Cal-maine Foods, Inc. · NASDAQ:CALM
Cal-maine Foods — Q3 2024 Earnings Presentation
38 slides from Cal-maine Foods's earnings presentation, April 2024
Slide 1: 3Q 2024 Investor Presentation
3Q 2024 Investor Presentation April 2024 © Cal-Maine Foods. All rights reserved.
Slide 2: Company Overview
cM Com pany Overview Cal-Maine Foods
Slide 3: Forward-looking statements and use of non-GAAP financial measures
Forward-looking statements and use of non-GAAP financial measures Forward‐Looking and Cautionary 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 o
Slide 4: We are the #1 U.S. producer and distributor of fresh eggs
We are the #1 U.S. producer and distributor of fresh eggs, committed to offering our customers choice in a We are the #1 U.S. producer and distributor of fresh safe, cost-effective and sustainable manner eggs, committed to offering our customers choice in a safe, cost-effective and sustainable manne
Slide 5: Competitive advantages differentiate Cal-Maine
Competitive advantages differentiate Cal-Maine Proven Vertically Quality Disciplined Blue Chip Operator Integrated Product Choice Balance Sheet Customers Highly efficient Largest U.S. producer Wide range of quality Nimble, well- Long-standing operational & distributor of fresh choices in shell egg c
Slide 6: Tenured management team with deep industry experience
Tenured management team with deep industry experience Adolphus B. Baker Sherman Miller Max Bowman Todd Walters Rob Holladay Chairman of the Board of Directors President, Chief Executive Officer Vice President, Chief Financial Officer Vice President, Chief Operating Officer Vice President, General Co
Slide 7: Leading global egg producer and distributor
Leading global egg producer and distributor World’s Top 10 Egg Producers (1) Cal-Maine Food’s Operating Footprint (2,3) (layer hens, mm) Cal-Maine Foods Cal-Maine Foods, 44.3 Proteina Animal Proteina Animal, 36.0 Rose Acre Farms Rose Acre Farms, 27.6 CP Group CP Group, 22.0 Beijing DAT Co. Beijing D
Slide 8: Fully integrated operations allow for scaled production and distribution capacity
Fully integrated operations allow for scaled production and distribution capacity (1) 26 feed mills Scaled Production Meets Demand 75% CALM maintains leading production scale 3 breeding facilities supported by best-in-class operating expertise More layer hens than our Uniquely positioned with broad
Slide 9: Customer base and product choice reduce revenue concentration risk
Customer base and product choice reduce revenue concentration risk Diversified relationships across Flexible product choice enhances ability to align blue-chip customers (1) with changing customer needs (2,3) Broad egg offering capabilities help us continue to serve a diverse, high-quality Fiscal ye
Slide 10: Operational strategies further reduce customer concentration risk
Operational strategies further reduce customer concentration risk Diversified Products Flexible Capital Specialty product lines, such as Capital allocation strategy enables cage-free, foster revenue growth us to make strategic investments to across a broader customer base optimize product choice in
Slide 11: Strong commitment to sustainability principles
Strong commitment to sustainability principles (1) “ We work hard every day to earn the trust of our valued customers, the consumers who purchase our eggs and the people who live and work in the communities where we operate.” FY2022 Sustainability Report • • Published August 2023 Discloses select Sc
Slide 12: Long track record of delivering performance in a cyclical industry
Long track record of delivering performance in a cyclical industry (1) Net Income ($mm) $758 Industry Cyclicality • Cyclicality is an inherent aspect of our industry • Our team is well-equipped to navigate through $316 the experienced fluctuations to achieve $152 $161 $126 sustainable growth in the
Slide 13: Long Term Drivers of our Business
SECTION 2 Long Term Drivers of our Business 13
Slide 14: Eggs have enjoyed secular tailwinds in the U.S.
Eggs have enjoyed secular tailwinds in the U.S. A Universal Protein Consumption Growth Over Time (3) • 97% of U.S. households purchase eggs (1) • The last decade has seen supply and demand grow relatively • Designated as 'healthy food' under new consistently, tracking together proposed FDA definitio
Slide 15: Customer preferences are changing, and state mandates accelerate the shift
Customer preferences are changing, and state mandates accelerate the shift State commitments accelerate shift to cage-free eggs (1,2) CALM portfolio ideally positioned to meet demands 10 U.S. states have passed cage-free legislation or regulation for Nimble cage-free posture implementation by 2026 •
Slide 16: Meeting evolving retail market needs by driving favorable product choices
Meeting evolving retail market needs by driving favorable product choices Market and consumer demand is changing CALM is adjusting choices to meet that shift Conventional eggs maintain leading retail market share Fiscal year shell egg sales* (% dozens sold by volume) (1) (% dozens sold by volume) (2
Slide 17: Shell egg industry is fragmented providing consolidation opportunities
Shell egg industry is fragmented providing consolidation opportunities (1) Top-five producers: layer hen rankings Cal-Maine Foods Top-five producers own ~38% 13% of U.S. layer hen flock Rose Acre Farms In 2022, the top-five broiler producers held 8% ~64% of market share Daybreak Foods 6% Hillandale
Slide 18: Executing Consistent Long-Term Strategy
SECTION 3 Executing Consistent Long-Term Strategy 18
Slide 19: Our strategy has remained consistent for over 60 years
Our strategy has remained consistent for over 60 years Focus on operational Adapt to changing Allocate capital excellence consumer demand responsibly Lever Cal-Maine Management Expand and adjust product Deploy capital to organic Process to optimize choice to meet needs of growth, inorganic M&A, and
Slide 20: Operational excellence underpins the Cal-Maine Management System
Operational excellence underpins the Cal-Maine Management System People-first, strategy-focused and data- driven roadmap to success System of integrated best practices deployed across all facilities and operations 6. 1. Communication flows openly from top down and Information down up to achieve univ
Slide 21: Seasoned biosecurity team effectively managing though U.S. HPAI outbreaks
Seasoned biosecurity team effectively managing though U.S. HPAI outbreaks Highly pathogenic Avian Influenza (1) Managing through Avian Influenza Caused by an “influenza type A virus”, impacts • Long-tenured and seasoned CALM operations team chickens, turkeys, and other domesticated • Adopted and enh
Slide 22: Scaling production to manage costs and reduce purchase dependency
Scaling production to manage costs and reduce purchase dependency Embedded input cost & supply chain resilience Self-production offers more attractive expense profile (2) CALM Management System provides constant evaluation Optimized production promotes flexibility during times of tightened egg of co
Slide 23: Consistent approach to capital allocation, paired with strategic deployment to growth
Consistent approach to capital allocation, paired with strategic deployment to appropriate growth opportunities Growth Strategy Dividend Maintenance Organic Inorganic Value-Added Payments Capex Growth Growth Products Overarching goal to Reinvestment to Investment in our Growth through Supporting lon
Slide 24: Committed to sustainable returns through cycles
Committed to sustainable returns through cycles Dividend Payments Shareholder returns Managing industry cyclicality Committed to allocation of capital to our shareholders Variable dividend policy optimizes returns to through a variable quarterly dividend plan shareholders through cycles and preserve
Slide 25: Robust balance sheet supports growth opportunities and shareholder returns
Robust balance sheet supports growth opportunities and shareholder returns Maintenance Capex Manage cash priorities Prioritize liquidity • Variable dividend policy driven by commodity-based, cyclical business model • Maintain current assets, including cash and securities’ • Invest in maintenance cap
Slide 26: Increasing cage-free capacity through organic and inorganic investments
Increasing cage-free capacity through organic and inorganic investments Organic Growth Inorganic Growth Ongoing investment in cage-free growth Spent and Committed cage-free capex Layer House Conversions allocation as of end Third Fiscal Quarter • Multiple conversions of facilities to cage-free syste
Slide 27: Strategic approach to M&A
Strategic approach to M&A Cash Flow Expansion Accretive Opportunity Inorganic Growth Cage-free Geographic Capacity Incoming Prospects Synergy Steady flow of M&A opportunities due to generational turnover and required investment for cage-free egg Operations production Compatibility with existing faci
Slide 28: A history of growth through adaptation and successful integration of acquisitions
A history of growth through adaptation and successful integration of acquisitions Inorganic Growth Pilgrim’s Pride and Maxim Mahard Egg Farm, MeadowCreek; Acquired egg Built world’s largest egg Production Co., added Red River Valley added 3.9 mm layer focus on hard- operations Of farm in Edwards, MS
Slide 29: M&A case study - Mahard Egg Farm in 2019
M&A case study - Mahard Egg Farm in 2019 Inorganic Growth Acquisition of Mahard Egg Farm assets in 2019 expanded CALM customer base in Texas and Oklahoma, enhanced by minor investment in existing facilities 3.9mm 8.0mm layer hen capacity layer hens permitted • Due diligence process revealed facility
Slide 30: Scaling hard-cooked egg offerings, optimizing throughput and category reach
Scaling hard-cooked egg offerings, optimizing throughput and category reach Value-Added Products Our capabilities are scaling Innovative category captures value • Egg size increases to consumer-preferred MeadowCreek Facility large+ only after ~15 weeks of medium egg laying (16% of laying life) March
Slide 31: Key Takeaways
Key Takeaways Achieved record quarterly sales and specialty egg category sales in Fiscal 3Q 2024 301 mm dozens 60+ years Quality sold Q3 2024 operating food choices Largest producer and Proven, highly efficient Nimble and poised to meet distributor of fresh shell eggs operators with deep talent evol
Slide 32: Appendix
A p pe n d i xX Cal-Maine Foods
Slide 33: Select income statement highlights
Select income statement highlights Fiscal Year Ended Q1 2024 Q2 2024 Q3 2024 $s, except sales volume and percentage data 2019 2020 2021 2022 2023 9/2/23 12/2/23 4/2/23 Net sales 1,361,188 1,351,609 1,348,987 1,777,159 3,146,217 459,344 523,234 703,076 Gross profit 222,859 337,059 1,196,457 45,433 91
Slide 34: Select operating results
Select operating results Fiscal Year Ended Q1 2024 Q2 2024 Q3 2024 $s, except sales volume and percentage data 2019 2020 2021 2022 2023 9/2/23 12/2/23 4/2/23 Dozen eggs sold (000) Conventional 778,051 813,255 785,446 747,914 749,076 181,530 192,462 192,182 Specialty 260,848 255,895 287,765 335,875 3
Slide 35: EBITDA reconciliation
EBITDA reconciliation Non-GAAP Measure – EBITDA EBITDA is a non-GAAP measure and defined as net income attributable to Cal-Maine Foods, Inc. plus interest, taxes, depreciation and amortization. The following table sets forth a reconciliation of EBITDA to net income attributable to Cal-Maine Foods, I
Slide 36: Citations (1/2)
Citations (1/2) 4) The USDA calculates per capita consumption by dividing total shell egg disappearance in the U.S. by the U.S. population Slide 7 – Leading global egg producer and distributor 1) Data from WATT Poultry, “The world’s top 10 egg producers”, June 23, 2022 Slide 15 – Customer needs are
Slide 37: Citations (2/2)
Citations (2/2) Slide 24 – Committed to sustainable returns through cycle 1) Company filings 2) Dividends Payable: We 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 St
Slide 38: April 2024
April 2024 © Cal-Maine Foods. All rights reserved.