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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Fiscal Year Ended
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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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 28, 2025, which was the date of the last business day of the registrant’s most recently completed second fiscal quarter,
was $
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As of July 22, 2026,
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DOCUMENTS INCORPORATED BY REFERENCE
The information called for by Part III of this Annual Report on Form 10-K is incorporated herein by reference from the registrant’s Definitive
Proxy Statement for its 2026 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 Annual Report on Form 10-K.
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TABLE OF CONTENTS
Item
Page
Number
1.
1A.
1B.
1C.
2.
3.
4.
5.
6.
7.
7A.
8.
9.
9A.
9B.
9C.
10.
11.
12.
13.
14.
15.
16.
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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 our business, including
potential future supply of and demand for our products, potential future corn and soybean price trends, potential future impact on
our business of highly pathogenic avian influenza (“HPAI”), estimated future production data, expected construction schedules,
projected construction costs, potential future impact on our business of inflation and changing interest rates, potential future
impact on our business of new legislation, rules or policies, potential outcomes of legal proceedings, including loss contingency
accruals and factors that may result in changes in the amounts recorded, other projected operating data, including anticipated
results of operations and financial condition, and potential future cash returns to stockholders including the timing and am
ount
of any repurchases under our share repurchase program. 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) changes in wholesale shell egg market prices, (iii) changes in the demand for shell eggs and our prepared foods
offerings, (iv) increases in feed costs for our shell egg operations as well as increases in input costs for prepared foods, (v) our
ability to predict and meet demand for cage -free and other specialty eggs, (vi) the risks and hazards inherent in shell egg, egg
products and prepared foods operations (including, as applicable, disease, pests, weather conditions, and potential for product
recall), including but not limited to the current outbreak of 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 and that impacted our flocks in the third and fourth quarters
of fiscal 2024 and again in March 2026, (vii) risks, changes, or obligations that could result from our recent or future acquisition
of new flocks or businesses, such as our acquisition of Echo Lake Foods completed June 2, 2025, and risks or changes that may
cause conditions to completing a pending acquisition not to be met, (viii) our ability to successfully integrate and manage recently
acquired businesses like Echo Lake Foods and realize the expected benefits of such acquisitions, including synergies, cost savings,
reduction in earnings volatility, margin expansion, financial returns, expanded customer relationships, or sales or growth
opportunities, (ix) our ability to produce, supply and distribute shell eggs and prepared foods efficiently and reliably, (x) our
ability to compete effectively with existing competitors and new market entrants, retain existing customers, acquire new
customers and grow our product mix including our prepared foods product offerings, (xi) the impacts of government, customer
and consumer reactions to high market prices for eggs, including, without limitation, potential new or expanded government
regulations, (xii) risks relating to potential changes in inflation, interest rates and trade and tariff policies, (xiii) the loss or
expiration of any registered trademarks or other intellectual property that we use in our business, (xiv) adverse results in pending
litigation and other legal matters, and (xv) global instability, including as a result of geopolitical conflicts and other uncertainties.
The actual timing, number and value of shares repurchased under our share repurchase program will be determined by
management in its discretion and will depend on a number of factors, including but not limited to, the market price of our Common
Stock and general market and economic conditions. The share repurchase program may be suspended, modified or discontinued
at any time without prior notice. 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 made only
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 update publicly these forward -looking statements, whether because of new information, future events,
or otherwise.
ITEM 1. BUSINESS
Overview
We are the largest egg company in the United States (“U.S.”) and a leading player in the egg-based food industry. We strive to
be the leading consumer -driven provider of nutritious, affordable, and sustainable eggs and egg-based foods that fit today's
lifestyles. Our vision is to ensure that healthy, affordable eggs and egg-based food choices are accessible to every household,
every day. We sell most of our products throughout
much
of the U.S. and aim to maintain efficient, state -of-the-art operations
located close to our customers. We were founded in 1957 and are headquartered in Ridgeland, Mississippi.
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The Company’s shell egg portfolio spans the full egg value ladder —from conventional to specialty, including cage-free,
nutritionally enhanced, organic, brown, pasture -raised, and free-range eggs—serving both retail and foodservice customers
nationwide. Cal -Maine Foods also participates in the growing prepared foods sector, with offerings such as pre-cooked egg
patties, omelets, folded and scrambled egg formats, hard -cooked eggs, pancakes, waffles, and specialty wraps. Our branded
portfolio includes Eggland’s Best®, Land O’Lakes®, Farmhouse Eggs®, 4Grain®, Sunups®, Van’s®, MeadowCreek Foods®,
and Crepini®.
When we use “we,” “us,” “our,” “Cal -Maine Foods,” or the “Company” in this report, we mean Cal -Maine Foods, Inc. and its
consolidated subsidiaries, unless otherwise indicated or the context otherwise requires.
The Company’s fiscal year -end is on the Saturday closest to May 31. Our fiscal year 2026 ended May 30, 2026, and the first three
fiscal quarters of fiscal 2026 ended August 30, 2025, November 29, 2025, and February 28, 2026. All references herein to a fiscal
year means our fiscal year and all references to a year mean a calendar year.
Operating and Reportable Segments
We previously managed our business as one operating and one reportable segment. Effective in the fourth quarter of fiscal 2026,
we revised our internal reporting to change the manner in which we manage our business, which reflects a focus on managing
operations based on our product categories rather than on a consolidated basis. As a result, we identified three reportable
segments: Conventional Shell Eggs, Specialty Shell Eggs, and Prepared Foods. Our remaining operations , which include co-pack
shell eggs, egg products, hard -cooked eggs and other business activities, are not reportable segments, as defined by the applicable
accounting standard .
Conventional Shell Eggs
The Conventional Shell Eggs segment consists primarily of the production, grading, packaging, marketing and
distribution of shell eggs sold as conventional shell eggs, which includes our brands
Sunups®
and
Sunny Meadow®.
Specialty Shell Eggs
The Specialty Shell Eggs segment consists primarily of the production, grading, packaging, marketing and distribution
of shell eggs sold as cage -free, nutritionally enhanced , organic, brown, pasture -raised and free-range eggs. This segment
includes our brands
Farmhouse Eggs
® and
4Grain®
as well as branded products from our cooperative membership in
Eggland’s Best, Inc. which includes
Egg-Land’s Best®
Land O’ Lakes®
branded eggs
.
Prepared Foods
The Prepared Foods segment consists primarily of the production, packaging, marketing and distribution of prepared
foods product offerings such as pre-cooked egg patties, omelets, folded and scrambled egg formats , pancakes, waffles
and specialty wraps. This segment includes our brands
Van ’s®
Crepini®.
All prior fiscal year periods have been recast to reflect the new reportable segments. For additional discussion regarding the
change to our new reportable segments, see
Statements.
Growth Strategy
Cal -Maine Foods’ long-term growth strategy is focused on building a diversified egg-based food platform that extends beyond
conventional shell eggs and enhances the Company’s earnings profile and resilience across market cycles. The Company intends
to leverage its market position, vertically integrated operations, strong balance sheet, and longstanding customer relationships to
pursue opportunities that drive sustainable growth, expand margins, and diversify its revenue streams.
The Company’s growth initiatives include increasing the proportion of specialty shell eggs in its sales mix, expanding its prepared
foods and egg products businesses, strengthening and extending its portfolio of branded offerings, and pursuing strategic
acquisitions and organic investments that complement its existing capabilities. Within its conventional shell egg business, the
Company employs a balanced pricing strategy that combines market -based and structured pricing arrangements intended to
participate in favorable pricing environments while enhancing earnings visibility and cash flow stability over time. The Company
also continues to invest in biosecurity, productivity initiatives, and vertical integration to reinforce cost leadership and supply
reliability and seeks to expand its geographic presence and customer penetration through disciplined capital allocation and
investments that enhance its production, distribution, and commercial capabilities.
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The Company currently has multiple expansion initiatives underway for its Prepared Foods segment. At Echo Lakes Foods
facilities, the Company has a network optimization and capacity expansion project underway, which is expected to add 17 million
pounds of annual scrambled egg production by mid-to-late-fiscal 2027, as well as a high-speed pancake line project, which is
expected to add an additional 12 million pounds of annual production through early-to-mid-fiscal 2027. In addition, the
Company’s joint venture, Crepini Foods, is investing in new equipment and line installations that is expected to add 18 million
pounds of additional production capacity gradually over the next 12 to 18 months with expected completion by early-to-mid fiscal
2028. In total, these planned investments are expected to grow Cal -Maine’s prepared foods production capacity by more than 30
percent from mid-2027 through 2028.
Management believes that the combination of conventional and specialty shell eggs, prepared foods, egg products, and branded
offerings creates a more balanced and diversified business model that is better positioned to serve evolving consumer preferences
and customer needs. Through these initiatives, the Company seeks to increase its normalized earnings power and create long-
term value for its customers and shareholders.
Acquisitions
Throughout our history, we have acquired other businesses in our industry. Since 1989, we have acquired and integrated 28
businesses. Within the last two fiscal years, we have made the following significant acquisitions.
Effective May 12, 2026, we acquired certain assets of the Van’s Foods (“Van ’s”) business of Sara Lee Frozen Bakery, LLC for
approximately $24.8 million. The assets acquired are expected to help support our strategy to diversify our business model, grow
in prepared foods business-to-retail, and deliver greater value across the supply chain.
Effective March 2, 2026, we acquired the shell egg, egg products, and prepared foods assets of Creighton Brothers LLC, including
Crystal Lake LLC (“Creighton”), for approximately $129.3 million. The acquired assets include commercial shell egg production
and grading with capacity of approximately 3.2 million layers, including 500 thousand cage-free layers, and 865 thousand pullets,
a feed mill, and 1,007 acres of land, as well as an egg products and hard -cooked egg processing facility located near Warsaw,
Indiana. The transaction expands the geographic scale of our shell egg platform while also adding nearby liquid egg capacity that
we believe will strengthen our integrated value chain.
Effective October 10, 2025, we acquired certain assets of Clean Egg, LLC (“Clean Egg”) based in Langwood, Texas, for
approximately $23.7 million. The assets acquired included 677 thousand brown cage-free and free-range layers and pullets , and
other inventory, machinery and equipment related to its contract production and egg processing business.
Effective June 2, 2025, we acquired Echo Lake Foods, LLC and certain related companies (collectively “Echo Lake Foods”) for
approximately $289.5 million. Echo Lake Foods is based in Burlington, Wisconsin and produces, packages, markets and
distributes prepared foods, including pre-cooked egg patties, omelets, folded and scrambled egg formats, pancakes and waffles.
The acquisition has expanded our prepared foods product line and customer base. Our previously announced projects to increase
efficiency and expand production capacity are ongoing and expected to continue throughout mid to late fiscal 2027.
During the third quarter of fiscal 2025, we acquired certain assets of Deal -Rite Foods, Inc. and certain of its affiliates (“Deal-
Rite”). The assets acquired included two feed mills, storage facilities, usable grain, vehicles, related equipment and a retail feed
sales business located in North Carolina. The acquired assets will produce and deliver feed to our nearby shell egg production
operations.
During the second quarter of fiscal 2025, we completed a strategic investment with Crepini LLC, establishing a new egg products
and prepared foods venture. Crepini LLC, founded in 2007, grew its brand throughout the U.S. and Mexico featuring egg wraps,
protein pancakes, crepes, and wrap-ups, which are sold online and in over 3,500 retail stores. The combined entity, located in
Hopewell Junction, New York, operates as Crepini Foods LLC (“Crepini”). We capitalized Crepini with approximately $6.75
million in cash to purchase additional equipment and other assets and fund working capital in exchange for a 51% interest in the
new venture. Crepini LLC contributed its existing assets and business in exchange for a 49% interest in the new venture.
During the second quarter of fiscal 2025, we acquired the remaining ownership interests in MeadowCreek Foods, LLC
(“MeadowCreek”) and it became a wholly-owned subsidiary of the Company. Our initial investment in MeadowCreek was in
fiscal 2022. MeadowCreek began operations during the fourth quarter of fiscal 2023 with a focus on being a leading provider of
hard -cooked eggs.
During the first quarter of fiscal 2025, we acquired substantially all the commercial shell egg production, processing and egg
products breaking assets of ISE America, Inc. and certain of its affiliates (“ISE”). The assets acquired included commercial shel
l
egg production and processing facilities with a capacity at the time of acquisition of approximately 4.7 million laying hens,
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including 1.0 million cage-free, 1.2 million pullets, feed mills, approximately 4,000 acres of land, inventories and an egg products
breaking facility. The acquired assets also include an extensive customer distribution network across the Northeast and Mid-
Atlantic states, and production operations in Maryland, New Jersey, Delaware and South Carolina. These production assets were
our first in Maryland, New Jersey and Delaware. This acquisition provided us with an opportunity to enhance our market reach
in the Northeast and Mid-Atlantic states.
For additional discussion of our acquisitions during the last two fiscal years, see
Consolidated Financial Statements.
Egg Industry Background
According to the U.S. Department of Agriculture (“USDA”) Agricultural Marketing Service, in 2025 approximately 69% of table
eggs produced in the U.S. were sold as shell eggs, with 55% of such shell eggs sold through food-
at
-home outlets such as grocery
and convenience stores, 12% sold to food -away -from home channels such as restaurants and 2% exported . The USDA estimate d
that in 2025 approximately 31% of eggs produced in the U.S. were sold as egg products (shell eggs broken and sold in liquid,
frozen, or dried form).
Given historical consumption trends, we believe that general demand for eggs in the U.S. increases basically in line with the
overall U.S. population growth; however, specific events can impact egg supply and consumption in a particular period, as
experienced with the 2015 highly pathogenic avian influenza (“HPAI”) outbreak, the COVID-19 pandemic (particularly during
2020), and the most recent HPAI outbreaks that started in early 2022. For fiscal 2026, shell egg household penetration was
approximately 97%. According to the USDA’s Economic Research Service, estimated annual per capita consumption in the U.S.
between 2021 and 2025 varied, ranging from 260 to 286 eggs which was directly impacted by available supply. The USDA
calculates per capita consum ption by dividing total shell egg disappearance in the U.S. by the U.S. population.
The most significant shift in demand over the past decade has been among specialty shell eggs, particularly cage-free eggs. For
additional information, see “Specialty Shell Eggs” below.
HPAI
Our industry has been greatly impacted by several outbreaks of HPAI in recent years. Following the HPAI outbreaks in 2015,
there were no reported significant outbreaks of HPAI in the commercial table egg layer flocks until February through December
2022. Thereafter, there were no HPAI cases affecting commercial layers until November 2023. Since 2023, outbreaks of HPAI
have continued to occur in U.S. poultry flocks. In 2024 and 2025, 40.2 million and 45.2 million commercial layer hens and pullets
were depopu lated due to HPAI, respectively. To date in 2026, through July 20, 2026, 19.2 million layer hens and pullets have
been depopulated due to HPAI.
On March 14, 2026, we experienced an HPAI outbreak within our pullet facility in Maryland, resulting in the depopulation of
approximately 352,000 pullets. Subsequent to fiscal 2026, operations have fully resumed.
HPAI is currently widespread in the wild bird population worldwide. Further, according to the U.S. Centers for Disease Contro
l
and Prevention (“CDC”), as of July 16, 2026, there have been outbreaks of HPAI in 1,166 herds of dairy cows in 20 states, and
71 human cases in the U.S., almost entirely among poultry and dairy workers, since the latest outbreak began. Two of the human
cases resulted in severe illness after the patient was exposed to sick and dead birds in backyard flocks. Both patients were reported
to have underlying health conditions and died in 2025. There have been no reported cases of person-to-person spread. According
to the CDC, the human health risk to the U.S. public from the HPAI virus is considered to be low. We remain dedicated to robust
biosecurity programs across our locations and have invested more than $92 million in biosecurity technology, equipment,
supplies, procedures, and training across our locations since the major HPAI outbreak in 2015. However, no farm is immune
from HPAI. The extent of possible future outbreaks among U.S. commercial egg layer flocks, with heightened risk during
migration seasons, cannot be predicted. According to the USDA, HPAI cannot be transmitted through safely handled and properly
cooked eggs. There is no known risk related to HPAI associated with eggs that are currently in the market and no eggs have been
recalled relating to HPAI. For additional information, refer to
.
Prices for Shell Eggs
Wholesale shell egg sales prices are a critical component of revenue for the Company. Wholesale shell egg prices are volatile,
cyclical, and impacted by a number of factors, including consumer demand, seasonal fluctuations, the number and productivity
of laying hens in the U.S. and outbreaks of agricultural diseases such as HPAI. We believe the majority of conventional shell
eggs sold in the U.S. in the retail and foodservice channels are sold at prices that take into account, in varying ways, independently
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quoted and certified wholesale market prices, such as those published by Urner Barry Publications, Inc. (“UB”) or the USDA for
shell eggs; however, grain-based or variations of cost plus arrangements are also commonly utilized.
Wholesale prices for cage-free eggs are also quoted by independent sources such as UB and the USDA. There is no independently
quoted wholesale market price for other specialty shell eggs such as nutritionally enhanced, organic, pasture -raise and free-range
eggs. Specialty shell eggs are typically sold at prices and terms negotiated directly with customers and in the case of cage -free
eggs, can be sold at prices that take into account one of the independently quoted markets. Historically, prices for specialty shell
eggs have generally been higher due to customer and consumer willingness to pay more for specialty eggs.
The weekly average price for the southeast region for large white conventional shell eggs as quoted by UB is shown below by
fiscal quarter for the past three fiscal years along with the average price for the past five fiscal years . The actual shell egg prices
that we realize on any given transaction may not necessarily equal quoted market prices because of the individualized terms that
we negotiate with individual customers , which take into account many factors. As further discussed in
, egg prices in fiscal 202 4 through fiscal 2026 were significantly
impacted by HPAI.
Our pricing for shell eggs is negotiated with our customers on individual terms. We sell our shell eggs at prices based on formulas
that take into account, in varying ways, one of the independently quoted regional wholesale market prices for shell eggs, our costs
of production, such as grain-based, or hybrid models which include elements of cost of production and wholesale market prices.
Almost all of our conventional shell eggs are priced and sold under market -based pricing frameworks or the hybrid models
described above, split almost evenly between such frameworks. The majority of our specialty shell eggs are priced and sold under
frameworks that are based on cost of production, although we do have some customers that prefer market -based pricing for cage-
free eggs. As a result, specialty shell egg prices typically do not fluctuate as much as conventional shell egg prices. We do not
sell eggs directly to consumers or set the prices at which eggs are sold to consumers.
Depending on market conditions, input costs and individualized contract terms, the price we receive per dozen eggs in any given
transaction may be more than or less than our production cost per dozen .
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Feed Costs for Shell Egg Production
Feed is a primary cost component in the production of shell eggs. We routinely fill our feed storage bins during harvest season
when prices for feed ingredients , primarily corn and to a lesser extent soybean meal, are generally lower. We currently have the
capacity to store 242 thousand tons of corn and soybean meal, and we replenish these stores as needed throughout the year. As
the quality and composition of feed is a critical factor in the nutritional value of shell eggs and health of our chickens, we formulate
and produce the vast majority of our own feed at our feed mills located near our production plants. Our annual feed requirements
for fiscal 2026 were 2.2 million tons of finished feed, of which we manufactured 2.1 million tons.
To ensure continued availability of feed ingredients , we may enter into contracts for future purchases of corn and soybean meal,
and as part of these contracts, we may lock-in the basis portion of our grain purchases several months in advance . Basis is the
difference between the local cash price for grain and the applicable futures price. The difference can be due to transportation
costs, storage costs, supply and demand, local conditions and other factors. A basis contract is a common transaction in the grain
market that allows us to lock-in a basis level for a specific delivery period and wait to set the futures price at a later date.
Furthermore, due to the more limited supply for organic ingredients, we may commit to purchase organic ingredients in advance
to help ensure supply. Ordinarily, we do not enter into long-term contracts beyond a year to purchase corn and soybean meal or
hedge against increases in the prices of corn and soybean meal.
Our primary feed ingredients, corn and soybean meal, are commodities that are subject to volatile price changes due to weather,
various supply and demand factors, transportation and storage costs, speculators, and agricultural, energy and trade policies in
the U.S. and internationally, and global instability that could disrupt the supply chain. We purchase the vast majority of our corn
and soybean meal from U.S sources but may be forced to purchase internationally when U.S. supplies are not readily available.
Feed grains are currently available from an adequate number of sources in the U.S. As a point of reference, a multi-year
comparison of the average of daily closing prices per Chicago Board of Trade for each quarter in our fiscal years 202 2-2026 is
shown below for corn and soybean meal:
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Shell Egg Production
Our percentage of dozens produced to sold was 92.1 % of our total shell eggs sold in fiscal 2026. We supplement our production
through purchases of eggs from other s when needed . The quantity of eggs purchased will vary based on many factors such as our
own production capabilities and current market conditions. In fiscal 2026, 90.0 % of our production came from Company -owned
facilities, and 10.0% came from contract producers. The majority of our contract production is with family -owned farms for
organic, pasture -raised and free-range eggs. Under a typical arrangement with a contract producer, we own the flock, furnish all
feed and critical supplies, own the shell eggs produced and assume market risks. The contract producers own and operate their
facilities and are paid a fee based on production with incentives for performance.
The commercial production of shell eggs requires a source of baby chicks for laying flock replacement. We supply the majority
of our chicks from our breeder farms and hatch them in our hatcheries in a computer -controlled environment and obtain the
balance from commercial sources. The chicks are grown in our own pullet farms and are placed into the laying flock once they
reach maturity.
After eggs are produced, they are cleaned, graded and packaged. Substantially all our farms have modern “in-line” facilities which
mechanically gather, clean, grade and package the eggs at the location where they are laid. The in-line facilities generate
significant efficiencies and cost savings compared to the cost of eggs produced from non-in-line facilities, which are facilities
that process their eggs that have been laid at one location and transported to a separate processing facility. The in-line facilities
also produce a higher percentage of USDA Grade A eggs, which generally sell at higher prices, compared to eggs that are either
not graded or lower grade . Eggs produced on farms owned by contract producers are brought to our processing plants to be graded
and packaged. We maintain a Safe Quality Food (“SQF”) Management Program which is overseen by our Food Safety
Department and senior management team. As of May 30, 2026, every Company -owned processing plant was SQF certified.
Because shell eggs are perishable, we do not maintain large egg inventories. Our egg inventory average d six days of sales during
fiscal 2026. We believe our constant focus on production efficiencies and automation throughout our vertically integrated
operations enable us to be a low-cost supplier in our markets.
We are proud to have created, implemented and maintained what we believe is a leading poultry Animal Welfare Program
(“AWP”). We have aligned our AWP with regulatory, veterinary and certain third-party certifying bodies’ guidance to govern
the welfare of animals in our direct care and our contract farmers’ care. We continually review our AWP to monitor and evolve
standards that guide how we hatch chicks, rear pullets and nurture breeder and layer hens. At each stage of our animals’ lives, we
are dedicated to providing welfare conditions aligned to our commitment to the principles of the internationally recognized
Five
Freedoms of Animal Welfare
.
We do not use artificial hormones in the production of our eggs. Hormone use in the poultry and egg production industry has
been effectively banned in the U.S. since the 1950s. We have an extensive written protocol that allows the use of medically
important antibiotics only when animal health is at risk, consistent with guidance from the U. S. Food and Drug Administration
(“FDA”) and the Guidance for Judicious Therapeutic Use of Antimicrobials in Poultry, developed by the American Association
of Avian Pathologists. When antibiotics are medically necessary, a licensed veterinary doctor will approve and administer
approved doses for a restricted period. We do not use antibiotics for growth promotion or performance enhancement.
Specialty Shell Eggs
We are one of the largest producers and marketers of specialty shell eggs in the U.S., which continues to be a significant segment
of the market. Specialty shell eggs are intended to meet the demands of consumers sensitive to environmental, health and/or
animal welfare issues and, as applicable, to comply with state requirements for cage -free eggs.
Ten states in the U.S. have passed legislation or regulations mandating minimum space or cage-free requirements for egg
production or mandated the sale of only cage-free eggs and egg products in their states, with implementation of these laws ranging
from January 2022 to January 2030, representing approximately 27% of the total U.S. population according to the 2020 U.S.
Census. California, Massachusetts, Colorado, Michigan, Oregon, Washington, and Nevada, which collectively represent
approximately 23% of the total U.S. population, have cage-free legislation in effect.
A significant number of our customers have announced goals to either exclusively offer cage-free eggs or significantly increase
the volume of cage -free egg sales in the future, subject in most cases to availability of supply, affordability and consumer demand,
among other contingencies. Our customers’ sales initiatives and product mix are constantly changing, making it difficult to
accurately predict customer requirements for cage-free eggs. We are focused on adjusting our cage -free production capacity with
the goal of meeting the future needs of our customers in light of changing state requirements and our customers’ goals. As always,
we strive to offer a product mix that aligns with current and anticipated customer purchase decisions. We are engaging with our
11
customers to help them meet their announced goals and needs. We have invested significant capital in recent years to acquire and
construct cage -free facilities, and we expect our focus for future expansion to continue to include cage -free facilities. Our volume
of cage-free egg sales has continued to increase and account for a larger share of our product mix. At the same time, we understand
the importance of our continued ability to produce more affordable conventio nal shell eggs to provide our customers with a
variety of egg choices and to address hunger in our communities.
Branded Eggs
We are a member of the Eggland’s Best, Inc. cooperative (“EB”) and produce, market, distribute and sell
Egg-Land’s Best®
Land O’ Lakes®
and offerings include nutritionally enhanced, cage-free, organic, pasture -raised and free-range eggs.
Land O’ Lakes®
eggs are produced by hens that are fed a whole-grain vegetarian diet and include brown, organic and cage-free eggs.
In 2025, EB was the third best -selling dairy brand in the U.S. By volume, the top two best-selling branded specialty shell egg
SKUs in 202 5 were EB branded eggs and six out of 10 best-selling SKUs were EB branded eggs. In 2025, our sales (including
sales from affiliates) represented approximately 56% of EB branded eggs and 43% of
Land O’ Lakes®
branded eggs nationwide.
Our
Farmhouse Eggs
® branded eggs are produced at our facilities by hens that are provided with a vegetarian diet. Our offerings
of
Farmhouse Eggs
® include cage-free, organic and pasture raised eggs. We market organic, vegetarian and omega -3 eggs under
our
4Grain®
Sunups®
Sunny Meadow®
brands are sold as
conventional shell eggs.
We also produce, market and distribute private label specialty and conventional shell eggs to several customers.
Prepared Foods
Our prepared foods offerin gs include pre-cooked egg patties, omelets, folded and scrambled egg formats , pancakes, waffles and
specialty wraps. This segment includes our brands
Van ’s®
Crepini®.
We produce the vast majority of our prepared foods products at our facilities. The majority of the raw materials used in the
production of our prepared foods products are commodities, agricultural -based products, including liquid egg products, as well
as packaging material. Liquid egg products are sourced from outside vendors as well as internally. The majority of our raw
materials are sourced from U.S. vendors and are generally available from numerous vendors. We monitor changes in price of raw
materials and supply chain costs and may be required to implement material price increases or decreases in response to any
significant changes in costs.
Marketing and Distribution
In fiscal 2026, we sold our products in 47 states as well as Puerto Rico through our extensive distribution network to a diverse
group of customers, including national and regional grocery store chains, club stores, companies servicing independent
supermarkets in the U.S., foodservice distributors and egg product consumers.
The majority of our shell egg and prepared foods sales are based on the daily or short-term needs of our customers. Most sales to
established accounts are on payment terms ranging from seven to 30 days. Although we have established long-term arrangements
with many of our customers, most of them are free to acquire products from other sources.
The products we sell are either delivered to our customers’ warehouse or retail stores, by our own fleet of, or contracted
refrigerated delivery trucks, or are picked up by our customers at our processing facilities.
We distribute and sell
Egg-Land’s Best®
Land O’ Lakes®
Eggs, LLC and Southwest Specialty Eggs, LLC, under exclusive license agreements in Alabama, Arizona, Florida, Georgia,
Louisiana, Mississippi and Texas, and in portions of Arkansas, California, Kansas, Nevada, North Carolina, Oklahoma and South
Carolina. We also have an exclusive license in New York City in addition to exclusivity in select New York metropolitan areas,
including areas within New Jersey and Pennsylvania. As discussed above under “Branded Eggs,” we also sell our own
Farmhouse
Eggs
®
4Grain
®,
Sunups®
Sunny Meadow®
and conventional shell eggs to several customers. Our prepared foods offerings include products sold under our brands
Van’s®
and
Crepini®
.
12
Customers
Our top three customers accounted for an aggregate
of
43.1%, 49.2% and 49.0% of our net sales dollars for fiscal 2026, 2025,
and 2024, respectively. Our largest customer, Walmart Inc. (including Sam's Club), accounted for 30.0%, 33.6% and 34.0% of
our consolidated net sales dollars for fiscal 2026, 2025 and 2024, respectively.
Competition
The production, processing, and distribution of shell eggs is an intensely competitive business, which has traditionally attracted
large numbers of producers in the U.S. Shell egg competition is generally based on price, service and product quality. The shell
egg production industry remains highly fragmented. According to
Egg Industry Magazine
, the ten largest producers owned
approximately 57% and 54% of industry table egg layer hens at calendar year -end 2025 and 2024, respectively .
The market for prepared foods is highly competitive , and includes national and regional food manufacturers, private label
producers, and foodservice suppliers. Competition is based on a variety of factors, including product quality, innovation, service,
price, manufacturing capabilities, supply reliability, and customer relationships. The Company believes its vertically integrated
supply chain, access to shell egg inputs, manufacturing capabilities, and broad customer relationships position it to compete
effectively in these markets.
Seasonality
Retail sales of shell eggs historically have been highest during the fall and winter months and lowest during the summer months.
Prices for shell eggs fluctuate in response to seasonal demand factors and a natural increase in egg production during the spring
and early summer. Historically, shell egg prices tend to increase with the start of the school year and tend to be highest prior to
holiday periods, particularly Thanksgiving, Christmas and Easter. As a result, we have historically experienced, and may
experience in the future, lower shell egg selling prices, sales volumes and shell egg sales (and have incurred, and may incur in
the future, net losses) in our first and fourth fiscal quarters ending in August/September and May/June, respectively. Because of
the seasonal and quarterly fluctuations, comparisons of our net sales and operating results between different quarters within
a
single fiscal year are not necessarily meaningful comparisons.
Certain of our prepared foods exhibit modest seasonality, with demand generally softening during the summer months,
particularly in school -related foodservice channels. Overall, demand remains relatively stable given the portfolio’s broad retail
and foodservice applications.
Trademarks and License Agreements
The table below shows the trademarks that we owned or licensed pursuant to license agreements at May 30, 2026, as allocated
within our reportable segments. We believe these trademarks and license agreements are important to our business.
Reportable Segment
Trademark
Conventional Shell Eggs
Sunups® and Sunny Meadow®
Specialty Shell Eggs
Farmhouse Eggs®, 4Grain®, Egg -Land's Best® and Land O'
Lakes®
Prepared Foods
Van's® and Crepini®
Government Regulation
Our facilities and operations are subject to regulation by various federal, state, and local agencies, including, but not limited to,
the FDA, USDA, Environmental Protection Agency (“EPA”), Occupational Safety and Health Administration (“OSHA”) and
corresponding state agencies. The applicable regulations relate to grading, quality control, labeling, sanitary control and reuse or
disposal of waste. Our shell egg facilities are subject to periodic USDA, FDA, EPA and OSHA inspections. Our shell egg
production and feed mill facilities as well as our prepared foods operations are subject to FDA, USDA, EPA and OSHA regulation
and inspections, as applicable. We maintain inspection programs and in certain cases utilize independent third-party certification
bodies to monitor compliance with regulations, our own standards and customer specifications. It is possible that we will be
required to incur significant costs for compliance with such statutes and regulations. In the future, additional rules could be
proposed that, if adopted, could increase our costs.
Further, the marketing, labeling and advertising of our products are subject to extensive regulation under federal, state and local
laws, including consumer protection laws. Changes in legal or regulatory requirements, including with respect to nutrition facts,
13
allergen disclosures, serving size standards, front -of-pack labeling, ingredient or packaging restrictions, or marketing practices,
or differing or evolving enforcement priorities, may increase our compliance costs or require changes to our products, packaging
or marketing practices.
A number of states have passed legislation or regulations mandating minimum space or cage-free requirements for egg production
or have mandated the sale of only cage-free eggs and egg products in their states. For further information refer to the heading
“Specialty Shell Eggs” within this section.
In addition, federal antitrust laws require regulatory approval of acquisitions that exceed certain threshold levels of significance
or that could otherwise harm competition, and we cannot guarantee that such approvals would be obtained. Further, current or
future federal antitrust regulations may adversely affect current operations or financial condition such as required divestitures or
spin-offs of certain business or assets and limitations on the types or amounts of products we could produce.
For more information regarding government regulations that may affect our business, refer to
.
Environmental Regulation
Our operations and facilities are subject to various federal, state, and local environmental, health and safety laws and regulations
governing, among other things, the generation, storage, handling, use, transportation, disposal, and remediation of hazardous
materials. Under these laws and regulations, we must obtain permits from governmental authorities, including, but not limited to,
wastewater discharge permits. We have made, and will continue to make, capital and other expenditures relating to compliance
with existing environmental, health and safety laws and regulations and permits. We are not currently aware of any material
capital expenditures necessary to comply with such laws and regulations; however, as environmental, health and safety laws and
regulations are becoming increasingly more stringent, including those relating to animal wastes and wastewater discharges, it is
possible that we will have to incur significant costs for compliance with such laws and regulations in the future.
Human Capital Resources
As of May 30, 2026, we had 4,909 employees, of whom 4,292 worked in operations and marketing, and 617, including our
executive officers, were administrative employees. Approximately 3.0% of our personnel are part -time. We also use temporary
employment agencies and independent contractors to supplement our workforce when needed; for fiscal 2026, we had 1,943
average monthly contingent workers. As of May 30, 2026, 40 employees were covered by a collective bargaining agreement. We
believe our employee relations are good.
Our ability to operate safely, efficiently and in compliance with applicable food, workplace safety and employment regulations
depends on attracting, retaining, training and developing employees across our operations, sales, marketing and administrative
functions. We focus our human capital efforts on workplace health and safety, employee relations, competitive compensation and
benefits, compliance training, operational training and leadership development.
Health and Safety
The health and safety of our employees is a priority. Our Safety and Health Program is designed to promote safe work practices,
reduce workplace accidents and illnesses, and support compliance with applicable Occupational Safety and Health Administration
requirements. The program applies across the Company and is supported by an enterprise safety committee and site-level safety
committees with employee representation.
We review our written safety policies at least annually and monitor safety performance on a monthly basis to identify trends and
opportunities for improvement. We also provide multi-lingual safety and compliance training on topics relevant to our operations,
including use of personal protective equipment, emergency response, equipment safety, chemical hazard communication, hearing
conservation, lockout/tagout procedures, forklift safety and other job -specific safety practices. Contractors and vendors working
at our facilities are expected to comply with applicable safety requirements.
14
Employee Culture and Conduct
We seek to maintain a workplace culture grounded in integrity, respect, productivity and ethical conduct. Our
Code of Ethics and
Business Conduct
,
Human Rights Statement
and to a workplace free from harassment, discrimination, unlawful conduct and retaliation.
We are an Equal Opportunity Employer and prohibit discrimination on any basis protected by applicable federal, state or local
law. We are committed to providing employees with opportunities consistent with our operational needs and their experience,
goals and contributions.
Compensation, Benefits, Training and Development
We seek to attract, retain and develop employees by offering competitive wages and benefits and by providing training relevant
to safety, regulatory compliance, job-specific skills and leadership development. We offer eligible full-time employees a range
of health, welfare and retirement benefits, including participation in our KSOP retirement plan, under which the Company
contributes shares of Company stock or a cash equivalent equal to 3% of eligible compensation for each pay period in which
hours are worked. We also support employee development through safety, compliance and task -specific training, as well as our
Management Intern, Management Trainee and informal mentoring programs.
Sustainability
We understand that responsible management of our flocks, among other things, is vital to the production of high-quality eggs and
egg products and to the success of the Company. We have engaged in agricultural production for more than 60 years. Our
agricultural practices continue to evolve as we continue to strive to meet the need for nutritious, affordable foods to feed a
growing population while still exercising responsible natural resource stewardship and conservation. We will publish our
sustainability impact report for our fiscal 2025 in the first quarter of fiscal 2027, which will be available on our website.
Information contained on our website is not a part of this report on Form 10 -K.
Our Corporate Information
We maintain a website at www.calmainefoods.com where general information about our business and corporate governance
matters is available. The information contained on our website is not a part of this report. Our Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and all amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available, free of charge, through our website as soon as
reasonably practicable after we file them with, or furnish them to, the SEC. In addition, the SEC maintains a website at
www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file
electronically with the SEC.
ITEM 1A. RISK FACTORS
Our business and results of operations are subject to numerous risks and uncertainties, many of which are beyond our control.
The following is a description of the known factors that have or may in the future materially affect our business, financial
condition or results of operations. They should be considered carefully, in addition to the information set forth elsewhere in this
Annual Report on Form 10-K, including under Part II. Item 7. Management’s Discussion and Analysis of Financial Condition
and Results of Operations, in making any investment decisions with respect to our securities. Additional risks or uncertainties
that are not currently known to us, or that we are aware of but currently deem to be immaterial or that could apply to any
company could also materially adversely affect our business, financial condition or results of operations.
See
“Forward -Looking
Statements” at the beginning of this report.
INDUSTRY RISK FACTORS
Market prices of wholesale shell eggs are volatile and decreases in these prices have had, and in the future may have, a
materially adverse impact on our revenues and profits.
Our operating results are significantly affected by wholesale shell egg market prices, which fluctuate widely and are outside our
control. Wholesale shell egg market prices directly affect the selling prices of our products sold under market -based pricing
formulas and may indirectly impact our products sold under cost -based and hybrid pricing formulas as customers may seek to
renegotiate the terms of their arrangements during periods of sustained low prices. Accordingly, our historical results are not
necessarily indicative of future performance.
15
Modest increases in industry supply or decreases in demand have resulted in, and may in the future have a material adverse effect
on shell egg prices. Low shell egg prices adversely affect our revenues and profits.
Market prices for wholesale shell eggs have been, and in the future may be, volatile and cyclical. Shell egg prices have risen in
the past during periods of high demand such as the initial outbreak of the COVID-19 pandemic and periods when high protein
diets are popular. Shell egg prices have also risen during periods of constrained supply, such as during outbreaks of highly
pathogenic avian influenza (“HPAI”). During times when prices are high, the egg industry has typically produced more eggs,
primarily by increasing the number of layers, which historically has ultimately resulted in an oversupply of eggs, leading to
periods of lower prices.
As discussed above in
, seasonal fluctuations impact shell egg prices. Therefore, comparisons
of our sales and operating results between different quarters within a single fiscal year are not necessarily meaningful
comparisons.
A decline in consumer demand for shell eggs or our prepared foods offerings have had, and in the future may have , a
material adverse impact our business.
We believe high-protein diet trends, industry advertising campaigns, the improved nutritional reputation of eggs and an increase
in at -home consumption of eggs during the COVID-19 pandemic, have all contributed at one time or another to increased shell
egg demand. However, it is possible that the demand for shell eggs will decline in the future. Adverse publicity relating to health
or safety concerns and changes in the perception of the nutritional value of shell eggs, changes in consumer views regarding
consumption of animal -based products, as well as movement away from high protein diets, have had and in the future may have
an adverse effect on demand for shell eggs, which has had and in the future could have a material adverse effect on our results of
operations and financial condition.
Certain of our prepared foods offerings are generally subject to changing consumer trends, demands and preferences as well as a
modest amount of seasonality. Trends within the prepared foods industry change often, and failure to identify and react to changes
in these trends could lead to, among other things, reduced demand and price reductions for our prepared foods brands and
products. We strive to respond to consumer preferences and social expectations, but we may not be successful in our efforts.
Further, we could be adversely affected if consumers lose confidence in the safety and quality of certain food products or
ingredients, or the food safety system generally. Prolonged negative perceptions concerning the health implications of certain
food products or ingredients or loss of confidence in the food safety system generally could influence consumer preferences and
acceptance of some of our products and marketing programs. Continued negative perceptions and failure to satisfy consumer
preferences could have a material adverse effect on our sales, financial condition and results of operations.
Feed costs are volatile and increases in these costs have had, and in the future may have , a material adverse impact our
results of operations.
Feed costs are the largest element of our shell egg production cost, typically exceeding 50% of our total farm production costs.
Although feed ingredients, primarily corn and soybean meal, are available from a number of sources, we do not have control ov er
the prices of the ingredients we purchase, which are affected by weather, various global and U.S. supply and demand factors,
transportation and storage costs, speculators, agricultural, energy and trade policies in the U.S. and internationally, and global
instability, including as a result of geopolitical conflicts. For example, while feed costs declined during fiscal 2026, we saw higher
prices for corn and soybean meal over the last four fiscal years as a result of weather -related shortfalls in production and yields,
ongoing supply chain disruptions, and geopolitical conflicts and their impact on the export markets. Our costs for corn and
soybean meal are also affected by local basis prices.
Increases in feed costs unaccompanied by increases in the selling price of eggs have had and in the future may have a materia
l
adverse effect on the results of our operations and cash flow. Decreases in feed costs can lead to increased egg production and
increases in the egg supply, possibly resulting in lower egg prices and lower revenue.
Increases in other input costs such as packaging materials, delivery expenses, construction materials and equipment,
including as a result of inflation and tariffs , have had and in the future may have, a material adverse impact on our
profitability .
In addition to feed ingredient costs, other significant input costs include costs of packaging materials and delivery expenses. Our
costs of packaging materials increased during the past three fiscal years due to inflation and higher labor costs, and these costs
may continue to increase. We have also experienced increases in delivery expenses due to increases in fuel and labor costs for
both our fleet and contract trucking, and these costs may continue to increase. Changes in U.S. trade and tariffs policies have
caused and may continue to cause higher costs for construction materials, equipment, packaging and other items. Increases in
these costs are largely outside of our control and could have a material adverse effect on our profitability and cash flow.
16
Agricultural risks, including outbreaks of avian diseases such as HPAI, have harmed and in the future could harm our
business.
Our shell egg production activities are subject to a variety of agricultural risks. Unusual or extreme weather conditions, disease
and pests have had and in the future may have a material adverse effect on the quality and quantity of shell eggs we produce and
distribute. HPAI is currently widespread in the wild bird population worldwide. Outbreaks of HPAI among poultry occur
periodically worldwide, including recently in the U.S., with an increased risk during migratory seasons for wild birds. HPAI
outbreaks in the U.S. have in the past caused significant depopulation of U.S. commercial table egg layer flocks, which contributed
to lower shell egg supplies and higher shell egg prices. For example, during the third and fourth quarters of fiscal 2024, we
experienced HPAI outbreaks within our facilities located in Kansas and Texas, and in March of 2026 we experienced a HPAI
outbreak within our pullet facility in Maryland, resulting in the depopulation of approximately 352,000 pullets. For additional
information, refer to
We maintain controls and procedures designed to reduce the risk of exposing our flocks and employees to harmful diseases;
however, despite these efforts, outbreaks of avian diseases have occurred and may occur, which has had and in the future may
have a material adverse impact on the health of our flocks and in the future could adversely impact the health of our employees.
Continued or intensified spread of HPAI could have a material adverse impact on our financial results by, among other things,
decreasing revenue, increasing costs, increasing government restrictions on the sale and distribution of our products , other new
regulatory requirements and requiring us to euthanize the affected layers. Negative publicity from HPAI outbreaks within our
industry can negatively impact customer perception. If a substantial portion of our layers or production facilities are affected by
any of these factors in any given quarter or year, our business, financial condition, and results of operations could be materially
and adversely affected.
Our shell eggs, prepared foods and egg products offerings are susceptible to contamination, and we may be required to,
or we may voluntarily, recall contaminated products.
We sell food products for human consumption, including shell eggs, prepared foods and egg products, which involves food safety
risks such as:
●
food contamination caused by disease-producing organisms or pathogens, such as Listeria monocytogenes, Salmonella
Enteritidis, and pathogenic E Coli., including contamination caused by introduction of pathogens as a result of improper
handling by customers or consumers (over which we have no control), or by operational errors by suppliers or co-
manufacturers or in our facilities;
●
mislabeling, including with respect to food allergens;
●
food spoilage;
●
nutritional and health -related concerns; and
●
product tampering.
Shipment of contaminated, mislabeled, spoiled or otherwise deficient products, even if inadvertent, could result in a violation of
law and lead to increased risk of exposure to product liability claims, product recall or withdrawal and scrutiny by federal, state
and local regulatory agencies. We have little, if any, control over proper handling once the product has been shipped or delivered.
In addition, products purchased from other producers could contain contaminants, or be spoiled, mislabeled or otherwise deficient
that might be inadvertently redistributed or sold by us. As such, we might decide or be required to recall or withdraw a product
if we, our customers or regulators believe it poses a potential health risk. This has occurred in the past and may occur in the future.
Any shipment of deficient product or any action taken in response, such as a product recall or withdraw, could result in a loss of
consumer confidence in our products, adversely affect our reputation with existing and potential customers and have a material
adverse effect on our business, results of operations and financial condition. We currently maintain insurance with respect to
certain of these risks, including product liability insurance, business interruption insurance, product recall insurance and general
liability insurance, but in many cases such insurance is expensive and difficult to obtain, and no assurance can be given that such
insurance will adequately cover our costs or can be maintained in the future on acceptable terms or in sufficient amounts to protect
us against losses due to any such events, or at all.
BUSINESS AND OPERATIONAL RISK FACTORS
Our acquisition growth strategy subjects us to various risks.
As discussed in
selective acquisitions of other businesses engaged in the production and sale of shell eggs and prepared foods, with a priority on
those that will facilitate our ability to expand our specialty shell egg and prepared foods production capabilities in key locations
and markets. We may over -estimate or under -estimate the demand for specialty shell eggs or our prepared foods offerings, which
17
could cause our acquisition strategy to be less-than -optimal for our future growth and profitability. The number of existing
businesses with specialty shell egg capacity that we may be able to purchase is limited. Conversely, when we acquire specialty
shell egg production capacity, which is more expensive to purchase and operate, and customer demands or legal requirements for
specialty shell eggs were to change, any resulting lack of demand for specialty shell eggs has and in the future may result in
higher costs and lower profitability.
Although we had already diversified our business with some prepared foods product offerings, our acquisition of Echo Lake
Foods in the first quarter of fiscal 2026 represented a significant expansion of our strategy to diversify our product mix to include
more prepared foods. Accordingly, we have experienced and in the future may experience unexpected challenges in integrating
and managing the prepared foods businesses and brands that we acquire from time to time. Integrating the prepared foods
businesses and brands that we acquire, may be more costly or time-consuming than we expect. Even if these businesses and
brands are successfully integrated, we may not realize the benefits we expect from the acquisitions, including the synergies, cost
savings, reduction in earnings volatility, strong management team, margin expansion, financial returns, new or expanded
customer and vendor relationships, or sales or growth opportunities. Our experience managing prepared foods businesses is much
more limited than our experience managing our shell egg and egg products businesses, and our strategy to diversify our product
mix to include more prepared foods may not produce the favorable financial and other results that we anticipate. For additional
information regarding our acquisitions and our strategy to diversify our product mix to include more prepared foods, see Part I.
Item 1. Business –
Acquisitions require capital resources and can divert management’s attention from our existing business. Acquisitions also entail
an inherent risk that we could become subject to contingent or other liabilities, including liabilities arising from events or conduct
prior to our acquisition of a business that were unknown to us at the time of acquisition. We could incur significantly greater
expenditures in integrating an acquired business than we anticipated at the time of its purchase.
We cannot assure you that we:
●
will identify suitable acquisition candidates;
●
can consummate acquisitions on acceptable terms;
●
can successfully integrate an acquired business into our operations; or
●
can successfully manage the operations of an acquired business.
No assurance can be given that businesses we acquire in the future will contribute positively to our results of operations or
financial condition. In addition, federal antitrust laws require regulatory approval of acquisitions that exceed certain threshold
levels of significance or that could otherwise negatively affect competition, and we cannot guarantee that such approvals would
be obtained. Further, current or future federal antitrust regulations may adversely affect current operations or financial condition
such as required divestitures or spin-offs of certain business or assets and limitations on the types or amounts of products we
could produce .
The consideration we pay in connection with any acquisition affects our financial results. If we pay cash, we could be required
to use a portion of our available cash or credit facility to consummate the acquisition. To the extent we issue shares of our
Common Stock, existing stockholders may be diluted. In addition, acquisitions may result in additional debt. Our ability to access
any additional capital that may be needed for an acquisition may be adversely impacted by higher interest rates and economic
uncertainty.
Disruptions to our production, supply chain or distribution operations, or to the operations of key customers or sales
channels, could have a material adverse effect our business and operations.
Our ability to produce, supply and distribute shell eggs and prepared foods efficiently and reliably is critical to our success. Our
operations depend on the continued availability and effective functioning of our production facilities, supply chain, logistics and
distribution networks, some of which are supported by third-party providers. A significant disruption to any of these capabilities,
whether due to operational failures, labor shortages, transportation disruptions, facility outages, facility upgrades or other events,
could impair our ability to meet customer requirements or operate in a profitable manner . For example, Echo Lake Foods has and
is expected to continue to experience a temporary reduction in production volumes and higher costs, which began late in the
second quarter of fiscal 2026 and are expected to be completed in fiscal 2027. We may not be able to successfully complete these
expansion projects timely or on budget, if at all.
In addition, we rely on our customers and established sales channels to sell our products to ultimate consumers. Disruptions
affecting a significant customer, distributor, foodservice provider, retailer or other sales channel, including operational disruptions
or changes in purchasing or distribution practices, could result in reduced sales volumes, delays in product movement, or changes
in the mix of products sold. Any such disruptions could have a material adverse effect on our results of operations and financial
condition.
18
Our largest customers have accounted for a significant portion of our net sales, and the loss of, reduced purchases by, or
pricing pressure from, one or more of such large customers could have a material adverse effect on our business.
Our top three customers accounted for an aggregate of 43.1%, 49.2% and 49.0% of our net sales for fiscal 2026, 2025 and 2024,
respectively. Our largest customer, Walmart Inc. (including Sam's Club), accounted for 30.0%, 33.6% and 34.0% of net sales
dollars for fiscal 2026, 2025 and 2024, respectively. Although we have established long-term relationships with most of our
customers who continue to purchase from us based on our ability to service their needs, they are generally free to acquire our
products from other sources. If, for any reason, one or more of our large customers were to purchase significantly less of our
products in the future, terminate their purchases from us or demand significantly lower pricing, and we were not able to sell our
products to new customers at comparable levels, it would have a material adverse effect on our business, financial condition, and
results of operations.
The sophistication and buying power of certain of our customers, including their ability to expand private-label offerings,
could adversely affect our pricing, margins and results of operations.
Certain of our customers, including large retailers, warehouse clubs, foodservice providers and distributors, are large and
sophisticated and have significant bargaining power. These customers may be more capable of resisting price increases and may
demand lower pricing, increased promotional activity, alternative pricing structures, or customized products and services. In
addition, some of these customers have the scale and resources to operate with reduced inventories, modify sourcing strategies,
or develop and market their own private -label or store-brand products that directly compete with our branded and specialty
offerings. Shelf space and product placement at retail customers are not guaranteed, and customers may choose to allocate shelf
space to competing products, including private-label or lower-priced alternatives.
These risks may be exacerbated during periods of economic weakness, inflation, or elevated food prices, when consumers may
trade down to lower-priced options , reduce purchases of specialty products, or shift purchases to private-label offerings. If we are
unable to effectively respond to these competitive pressures through pricing, cost control, operational efficiencies, or product
innovation, or if our customers materially change their purchasing practices or expand competing private -label offerings, our
sales volumes, profitability and results of operations could be materially adversely affected.
High market prices for eggs, primarily caused by HPAI-related reductions in supply, have led to pressure from customers
to change long-standing market-based pricing frameworks and/or otherwise reduce the price of our eggs and may do so
in the future. A material change in our sales arrangements with key customers could have a material adverse effect on
our revenues, gross profits and net income. Other reactions to high egg prices, including by state or federal government
agencies, may also adversely impact our business.
Market prices for wholesale shell eggs have been volatile and cyclical over time. Market prices for eggs tend to increase during
and following outbreaks of agricultural diseases in the egg industry that reduce the supply of eggs, which has occurred during
HPAI outbreaks, until the supply and demand balance is restored. Some of our sales arrangements with customers, particularly
for conventional shell eggs, are based on formulas that take into account, in varying ways, independently quoted regional
wholesale market prices for eggs. High market prices for eggs have led to pressure from customers to change longstanding market-
based pricing frameworks and/or otherwise reduce the price of our eggs and may do so in the future. To remain competitive and
retain our customers and gain new ones, we must consider our customer relationships and the reactions and potential reactions of
competitors. A material change in our sales arrangements with key customers could have a material adverse effect on our revenues
and gross profits.
Other reactions to high egg prices, including investigations or lawsuits by state or federal government agencies or private
plaintiffs, may also adversely impact our business. In March 2025, we received a civil investigative demand in connection with
a widely publicized investigation by the Antitrust Division of the Department of Justice (“DOJ”) into the causes behind
nationwide increases in egg prices. We settled the case in June 2026, but the settlement remains subject to court approval which
may or may not be obtained. Since November 2025, we have been named as a defendant, along with other egg producers and
industry associations, in various class actions that allege the defendants conspired to fix the prices of conventional shell eggs
nationwide, primarily through manipulation of industry price benchmarks, coordinated reporting, and supply restrictions,
particularly during the 2022 avian flu outbreak. In addition, persistent high egg prices may cause some consumers to purchase
fewer eggs. Persistent high-price cycles, investigations and lawsuits may also increase attention on the egg industry, and the
Company specifically, by state and federal government agencies or plaintiffs, which may lead to additional government
investigations , lawsuits or related activities, including but not limited to the adoption of new regulations. For further discussion,
see Part I. Item 3. Legal Proceedings below and Part II. Item 8. Notes to the Consolidated Financial Statements,
. The potential impacts of these reactions on our business are unclear, unpredictable and may divert our
resources and attention from our core business activities, which may have a material adverse effect on our business.
19
Our business is highly competitive.
The production and sale of fresh shell eggs, which accounted for 84.6% to 94.3% of our net sales in our last three fiscal years, is
intensely competitive. We compete with a large number of competitors that may prove to be more successful than we are in
producing, marketing and selling shell eggs. We cannot provide assurance that we will be able to compete successfully with any
or all of these companies. Increased competition could result in price reductions, greater cyclicality, reduced margins and loss of
market share, which would negatively affect our business, results of operations, and financial condition.
In addition, our growth strategy includes expansion of our product offerings including prepared foods. The prepared foods
business is intensely competitive and includes competition from other prepared food companies and other suppliers of prepared
and convenience foods, including restaurants, grocery stores and convenience stores, many of which have more experience or
scale operating prepared and convenience foods businesses. In response to these competitive pressures, we may have to reduce
the prices of our products, or increase or reallocate our spending on marketing, advertising and promotional activity. Competitive
pressures may also restrict our ability to increase prices, including in response to commodity and other input cost increases. Our
profits could decrease if either a reduction in prices or increase in costs without comparable increase in price is not offset with
increased sales volume. Alternatively, if we do not reduce our prices or increase our prices, as applicable, and our competitors
seek advantage through pricing or promotional changes, our revenues , profitability and market share could be adversely affected.
We are dependent on our management team, and the loss of any key member of this team may have a material adverse
effect on the implementation of our business plan in a timely manner.
Our success depends largely upon the continued service of our senior management team and the recruitment of additional team
members as we grow. The loss or interruption of service of one or more of our key executive officers could have a material
adverse effect on our ability to manage our operations effectively and/or pursue our growth strategy. We have not entered into
any employment or non -compete agreements with any of our executive officers. Competition could cause us to lose talented
employees, and unplanned turnover could deplete institutional knowledge. Increased competition for employees has, and may
continue to, result in increased costs.
Our business is dependent on our information technology systems and software, and failure to protect against or
effectively respond to cyber -attacks, security breaches, or other incidents involving those systems, could adversely affect
day-to-day operation s and decision making processes and have a material adverse effect on our performance and
reputation.
The efficient operation of our business depends on our information technology systems, which we rely on to effectively manage
our business data, communications, logistics, accounting, regulatory and other business processes. If we do not allocate and
effectively manage the resources necessary to build and sustain an appropriate technology environment, our business, reputation,
or financial results could be negatively impacted. In addition, our information technology systems may be vulnerable to damage
or interruption from circumstances beyond our control, including systems failures, natural disasters, terrorist attacks, viruses,
ransomware, security breaches or cyber incidents. Cyber -attacks are becoming more sophisticated and are increasing in the
number of attempts and frequency by groups and individuals with a wide range of motives. We have experienced and expect to
continue to experience attempted cyber -attacks of our information technology systems or networks.
We regularly engage with third-party service providers as part of our operations to provide a high level of service to our customers.
We have implemented certain practices and policies to minimize the potential risks associated with the exchange of information
with contracted vendors. Despite these practices and policies, we cannot guarantee that information technology systems of our
third-party service providers will prevent and detect all cybersecurity breaches and incidents. Although we require third-party
service providers to notify us upon a potential breach or incident, there is a potential risk that our business, reputation, or financial
results could be negatively impacted by cybersecurity incidents at their businesses.
Additionally, future or past business transactions (such as acquisitions or integrations) have exposed and in the future may expose
us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in
acquired or integrated systems and technologies. Furthermore, we may discover security issues that were not found during due
diligence of such acquired or integrated businesses, and it may be difficult to integrate businesses into our information technology
environment and security program.
Our information technology systems also subject us to numerous data privacy obligations. We may at times fail (or be perceived
to have failed) in our efforts to comply with our data privacy obligations. If we or the third parties on which we rely fail, or are
perceived to have failed, to address or comply with applicable data privacy obligations, we could face significant consequences,
including but not limited to government enforcement actions and litigation. A security breach of sensitive information could result
in damage to our reputation and our relations with our customers or employees. Any such damage or interruption could have a
material adverse effect on our business.
20
Technology and related business and regulatory requirements continue to change rapidly. Failure to update or replace legacy
systems to address these changes could result in increased costs, including remediation costs, system downtime, third party
litigation, regulatory actions or cyber security vulnerabilities which could have a material adverse effect on our business.
We are currently implementing a new enterprise resource planning (“ERP”) system, and difficulties with this transition
could have a material adverse effect on our business
.
We are in the process of replacing and modernizing our core financial and operational systems through a new ERP platform. This
implementation is a complex, multi-phase project that has and will require significant investment of time, capital, and internal
resources. There can be no assurance that the ERP system will be implemented on the expected timeline, within budget or with
the intended functionality.
Challenges associated with the ERP transition , including data conversion issues, system integration problems, process redesign,
user adoption difficulties, or disruptions to existing operations could impair our ability to process transactions , manage our supply
chain and human resources, produce accurate and timely financial reports, maintain effective internal controls over financial
reporting or otherwise disrupt our business operations . The implementation may also divert management ’s attention from normal
business operations.
If we are unable to successfully complete the ERP implementation, or if unexpected issues arise during the transition, our business,
financial condition, results of operations, and internal control environment could be materially adversely affected.
Labor shortages or increases in labor costs have had and in the future could have a material adverse impact on our
business and results of operations.
Our success is dependent upon recruiting, motivating, and retaining staff to operate our production facilities. Approximately
80.7% of our employees are paid at hourly rates, often in entry -level positions. While all our employees are paid at rates above
the federal minimum wage requirements, any significant increase in local, state or federal minimum wage requirements could
increase our labor costs. In addition, any regulatory changes requiring us to provide additional employee benefits or mandating
increases in other employee -related costs, such as unemployment insurance or workers compensation, would increase our costs.
A shortage in the labor pool, which may be caused by competition from other employers, the remote locations of many of our
production fac ilities, decreased labor participation rates or changes in government -provided support or immigration laws or
policies, particularly in times of lower unemployment, has had and in the future could have an adverse material effect on our
business and results of operations. A shortage of labor available to us could cause our production facilities to operate with reduced
staff, which could negatively impact our production capacity and efficiencies. In fiscal 2025 and 2026, labor wages continued to
rise due to inflation and low unemployment. Any significant labor shortages or increases in our labor costs has had, and in the
future could have, a material adverse effect on our results of operations.
We also rely on third-party suppliers for the provision of contingent workers, and our failure to effectively manage our use of
such contingent workers could increase our costs and adversely affect our results of operations. We may be subject to shortages,
oversupply, or fixed contractual terms relating to contingent workers. Our ability to manage the size and cost of our contingent
workforce may be subject to additional constraints imposed by local laws.
Global or regional health crises , including pandemics or epidemics , could have a material adverse impact on our business
and operations.
The effects of global or regional pandemics or epidemics have had and in the future may have a significant impact on our
operations. Although demand for our products could increase as a result of restrictions such as travel bans and restrictions,
quarantin es, shelter-in-place orders, and business and government shutdowns, which can prompt more consumers to eat at home,
these restrictions could also significantly increase our cost of doing business due to labor shortages, supply-chain disruptions,
increased costs and decreased availability of packaging supplies or feed, and increased medical and other costs. We experienced
these impacts as a result of the COVID-19 pandemic, primarily during our fiscal years 2020 and 2021. The impacts of health
crises are difficult to predict and depend on numerous factors including the severity, length and geographic scope of the outbreak,
resurgences of the disease and variants, availability and acceptance of vaccines, and governmental, business and individuals’
responses.
LEGAL AND REGULATORY RISK FACTORS
Pressure from animal rights groups regarding the treatment of animals may subject us to additional costs to conform our
practices to comply with developing standards or subject us to marketing costs to defend challenges to our current
practices and protect our image with our customers. In particular, changes in customer preferences and state legislation
21
have accelerated an increase in demand for cage-free eggs, which increases uncertainty in our business and increases our
costs.
We and many of our customers face pressure from animal rights groups, such as People for the Ethical Treatment of Animals and
the Humane Society of the U. S., to require companies that supply food products to operate their businesses in a manner that
treats animals in conformity with certain standards developed or approved by these groups. In general, we may incur additiona
l
costs if we conform our practices to address any of these standards or to defend our existing practices to protect our image with
our customers. The standards promoted by these groups change over time, but typically require minimum cage space for hens,
among other requirements, and some of these groups have led successful legislative efforts to ban any form of caged housing in
various states.
As discussed in
, ten states have passed minimum space and/or cage-free
requirements for hens, and other states are considering such requirements. In addition, a significant number of our customers
have announced goals to either exclusively offer cage-free eggs or significantly increase the volume of cage -free egg sales in the
future, subject in most cases to availability of supply, affordability and consumer demand, among other contingencies. While we
anticipate that our retail and foodservice customers will continue to transition to selling cage-free eggs given publicly stated goals,
there is no assurance that this transition will take place or take place according to the timeline of current cage-free goals. For
example, customers may accelerate their transition to stocki ng cage-free eggs, which may challenge our ability to meet the cage-
free volume needs of those customers and result in a loss of shell egg sales. Similarly, customers who commit to stock greater
proportional quantities of cage -free eggs are under no obligation to continue to do so, which may result in an oversupply of cage-
free eggs and result in lower specialty shell egg prices, which could reduce the return on our capital investment in cage-free
production. In addition, on July 9, 2025, the DOJ filed a lawsuit against the State of California alleging that California’s cage-
free laws “impose burdensome red tape on the production of eggs and poultry products nationally in violation of the Supremacy
Clause of the U.S. Constitution” and lead to higher egg prices for U.S. consumers. Although this lawsuit was dismissed in March
2026, potential similar future litigation could further complicate and the cage-free egg landscape and affect our ability to
successfully navigate these issues.
Changing our infrastructure and operating procedures to conform to consumer preferences, customer demands, laws and
challenges to these laws has resulted and will continue to result in additional costs, including capital and operating cost increases.
In response to our customers’ announced goals and increased legal requirements for cage-free eggs, we have increased capital
expenditures to increase our cage-free production capacity. We are also enhancing our focus on cage-free capacity when
considering acquisition opportunities. Our customers typically do not commit to long-term purchases of specific quantities or
type of eggs with us, and as a result, we cannot predict with any certainty which types of eggs they will require us to supply in
future periods. The production of cage -free eggs is more costly than the production of conventional shell eggs, and these higher
production costs contribute to the prices of cage-free eggs, which historically have typically been higher than conventional shell
egg prices. Many consumers prefer to buy less expensive conventional shell eggs. These consumer preferences, in addition to the
regulatory landscape, may in turn influence our customers’ future needs for cage-free and conventional shell eggs. Due to these
uncertai nties, we may over-estimate future demand for cage -free eggs, which could increase our costs unnecessarily, or we may
under-estimate future demand for cage -free eggs, which could harm us competitively. If our competitors obtain non -cancelable
long-term contracts to provide cage -free eggs to our existing or potential customers, then there may be decreased demand for our
cage-free eggs due to these lost potential sales. If we and our competitors increase cage-free egg production and there is no
commensurate increase in demand for cage-free eggs, this overproduction could lead to an oversupply of cage -free eggs, reducing
the sales price for specialty shell eggs and our return on capital investments in cage-free production.
Failure to comply with applicable governmental regulations, including environmental regulations, could harm our
operating results, financial condition, and reputation. Further, we may incur significant costs to comply with any current
or future regulations.
We are subject to federal, state and local regulations relating to grading, processing, packaging, quality control, distribution,
advertising, labeling, sanitary control, food safety, storage, waste disposal, and other areas of our business and may be subject to
additional regulations in the future. As a fully-integrated shell egg producer, our shell egg facilities are subject to regulation and
inspection by the USDA, OSHA, EPA and FDA, as well as state and local health and agricultural agencies, among others. Our
shell egg production and feed mill facilities as well as our prepared foods operations are subject to FDA, USDA, EPA and OSHA
regulation and inspections, as applicable. In addition, rules are often proposed that, if adopted as proposed, could increase our
costs.
Further, the marketing, labeling and advertising of our products are subject to extensive regulation under federal, state and local
laws, including consumer protection laws. We make statements in our marketing, labeling and advertising regarding, among other
things, product attributes, nutritional content, sourcing practices, animal welfare standards and sustainability characteristics.
These statements may be challenged as false, misleading or deceptive. Changes in legal or regulatory requirements, including
22
with respect to nutrition facts, allergen disclosures, serving size standards, front -of-pack labeling, ingredient or packaging
restrictions, or marketing practices, or differing or evolving enforcement priorities, may increase our compliance costs or require
changes to our products, packaging or marketing practices. Failure, or
a
perceived failure, to comply with applicable regulations
could subject us to civil penalties, injunctions, product relabeling, recalls or withdrawals, loss of necessary approvals or permits,
loss of customers or damage to our reputation, any of which could have a material adverse effect on our business, financial
condition and results of operations.
Our operations and facilities are subject to various federal, state and local environmental, health, and safety laws and regulations
governing, among other things, the generation, storage, handling, use, transportation, disposal, and remediation of hazardous
materials. Under these laws and regulations, we are required to obtain permits from governmental authorities, including, but not
limited to wastewater discharge permits and manure and litter land applications.
If we fail to comply with applicable laws or regulations, or fail to obtain necessary permits, we could be subject to significant
fines and penalties or other sanctions, our reputation could be harmed, and our operating results and financial condition could be
materially adversely affected. In addition, because these laws and regulations are becoming increasingly more stringent, it i
s
possible that we will be required to incur significant costs for compliance with existing and future laws and regulations.
Events beyond our control, such as extreme weather, natural disasters and changing climate conditions, and legal or
regulatory responses may have a material adverse impact on our business and results of operations.
Extreme weather events, such as derechos, wildfires, drought, tornadoes, hurricanes, other storms, excessive cold or heat, floods
or other natural disasters, as well as other events beyond our control, such as bioterrorism, water rights restrictions and other fire
events, some of which have in the past and in the future could have a material adverse effect on our operating results and financial
condition. Such events have, and in the future may, among other things, cause one or more of the following: impair the health or
growth of our flocks, decrease production or availability of feed ingredients, or interfere with our operations due to power outages,
fuel shortages, discharges from overtopped or breached wastewater treatment lagoons, damage to our production and processing
facilities, labor shortages or disruption of transportation channels.
Increased global temperatures and more frequent occurrences of extreme weather events may cause crop and livestock areas to
become unsuitable, including due to water scarcity or high or unpredictable temperatures, which may result in much greater stress
on food and water systems and more pronounced food insecurity globally. Lower global crop production, including corn and
soybean meal, which are the primary feed ingredients that support the health of our animals, may result in significantly higher
prices for these commodity inputs, impact our ability to source the commodities we use to feed our flocks, and negatively impact
our ability to maintain or grow our operations. Changing climate conditions may increasingly expose workers and animals to
high heat and humidity stressors that adversely impact poultry production and our costs. Increased greenhouse gas emissions may
also negatively impact air quality, soil quality and water quality, which may hamper our ability to support our operations,
particularly in higher water - and soil-stressed regions.
Increasing frequency of severe weather events may negatively impact our ability to raise poultry and produce eggs profitably or
to operate our transportation and logistics supply chains. These changes may cause us to change, significantly, our day -to-day
business operations and our strategy. Changing climate conditions and extreme weather events may also impact demand for our
products given evolution of consumer food preferences. Even if we take measures to position our business in anticipation of such
changes, compliance with current and future legal or regulatory requirements may require significant management time, oversight
and enterprise expense. We may also incur significant expense tied to regulatory fines if laws and regulations are interpreted and
applied in a manner that is inconsistent with our business practices. We can make no assurances that our efforts to prepare for
these adverse events will be in line with future market and regulatory expectations and our access to capital to support our business
may also be adversely impacted.
Current and future litigation and other legal matters could expose us to significant liabilities and have a material adverse
effect on our business reputation.
We and certain of our subsidiaries are involved in various legal proceedings and other legal matters. Litigation, government
investigations and other legal matters are inherently unpredictable and costly, and although we believe we have meaningful
defenses in these matters, we may incur liabilities due to adverse judgments or penalties or we may enter into settlements of
claims, which could have a material adverse effect on our results of operations, cash flow and financial condition. For a discussion
of our ongoing legal proceedings see Part I. Item 3. Legal Proceedings below and Part II. Item 8. Notes to the Consolidated
Financial Statements,
. Such lawsuits, investigations and other legal matters are
expensive to respond to and defend, divert management’s attention, and may result in significant adverse judgments, penalties or
settlements. In addition, legal proceedings may expose us to negative publicity, all of which could have a material adverse effect
on our business, financial condition, result of operations, reputation and customer preference for our products and brands.
23
FINANCIAL AND ECONOMIC RISK FACTORS
Economic conditions, including inflation and interest rates, could negatively impact our business.
Economic conditions, including inflation and interest rates, may adversely affect our business by:
●
Limiting our access to capital markets or increasing the cost of capital we may need to grow or operate our business;
●
Changing consumer spending and habits and demand for eggs, particularly higher-priced eggs, as well as prepared foods;
●
Restricting the supply of energy sources or increasing our cost to procure energy; or
●
Reducing the availability of feed ingredients, packaging material, and other raw materials, or increasing the cost of these
items.
Deterioration of economic conditions could also negatively impact:
●
The financial condition of our suppliers, which may make it more difficult for them to supply raw materials;
●
The financial condition of our customers, which may decrease demand for eggs and prepared foods or increase our bad
debt expense; or
●
The financial condition of our insurers, which could increase our cost to obtain insurance, and/or make it difficult for
our insurers to meet their obligations in the event we experience a loss due to an insured peril.
According to the U.S. Bureau of Labor Statistics, from June 2021 to June 2022, the Consumer Price Index for All Urban
Consumers (“CPI-U”) increased 9.1%, the largest 12-month increase since the period ending December 1981. The CPI-
U
increased 3.3%, 2.4% an d 4.2% annually from May 2023 to May 2026. Inflationary costs have increased our input costs, and if
we are unable to pass these costs through to the customer it could have a material adverse effect on our business.
We hold significant cash balances in deposit accounts with deposits in excess of the amounts insured by the Federal Deposit
Insurance Corporation (“FDIC”). In the event of a bank failure at an institution where we maintain deposits in excess of the FDIC-
insured amount, we may lose such excess deposits.
The loss of any registered trademark or other intellectual property could enable other companies to compete more
effectively with us.
We utilize intellectual property in our business, including trademarks, copyrights and trade secrets. For example, we own the
trademarks
Farmhouse Eggs
®,
4Grain
®,
Sunups
®,
Sunny Meadow®, Van ’s®,
and
Egg-
Land’s Best
® and
Land O’ Lakes
® under license agreements with EB. We have invested a significant amount of money in
establishing and promoting our trademarked brands. The loss or expiration of any intellectual property could require us to rebrand
or discontinue affected products, reduce sales volumes, or incur additional costs and may enable our competitors to compete more
effectively with us by allowing them to make and sell products substantially similar to those we offer. This could negatively
impact our ability to produce and sell those products, thereby having a material adverse effect on our business, financial condition
and results of operations .
Impairment in the carrying value of goodwill or other assets could negatively affect our results of operations or net worth.
Goodwill represents the excess of the cost of business acquisitions over the fair value of the identifiable net assets acquired.
Goodwill is reviewed at least annually for impairment by assessing qualitative factors to determine whether the existence of
events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than
its carrying amount. As of May 30, 2026, we had $97.1 of goodwill. While we believe the current carrying value of this goodwill
is not impaired, future goodwill impairment charges could have a material adverse effect on our results of operations in any
particular period and our net worth.
RISK FACTORS RELATING TO OUR COMMON STOCK
Provisions of our certificate of incorporation, bylaws, and Delaware law may make an acquisition of us or a change in our
management more difficult.
Certain provisions of our certificate of incorporation and bylaws could discourage, delay or prevent a merger, acquisition or other
change in control that stockholders may consider favorable, including transactions in which an investor might otherwise receive
a premium for its shares. These provisions also could limit the price that investors might be willing to pay in the future for shares
of our Common Stock, thereby depressing the market price of our Common Stock. Stockholders who wish to participate in these
transactions may not have the opportunity to do so. Furthermore, these provisions could prevent or frustrate attempts by our
stockholders to replace or remove our management. These provisions:
24
●
provide for the division of the Board into three classes as nearly equal in size as practicable with staggered three-year
terms and limit the removal of directors and the filling of vacancies;
●
authorize our Board to set the terms of and issue preferred stock, without stockholder approval, that could be issued to
persons friendly to management or could operate as a “poison pill” to dilute the stock ownership of a potential hostile
acquirer to prevent an acquisition that is not approved by our Board;
●
prohibit stockholder action by written consent;
●
prohibit stockholders from calling special meetings of stockholders;
●
establish advance notice requirements for stockholder nominations to our Board or for stockholder proposals that can be
acted on at stockholder meetings; and
●
require the approval of the holders of at least 66-2/3% of the voting power of all then outstanding shares of capital stock
of the Company entitled to vote generally in the election of directors, voting together as a single class, in order to amend
our certificate of incorporation and bylaws.
In addition, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which may, unless
certain criteria are met, prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from
merging or combining with us for a prescribed period of time.
The price of our Common Stock may be affected by the availability of shares for sale in the market, and investors may
experience significant dilution as a result of future issuances of our securities, which could have a material adverse effect
on the market price of our Common Stock.
The sale or availability for sale of substantial amounts of our Common Stock could adversely impact the price of our Common
Stock. Our Fourth Amended and Restated Certificate of Incorporation authorizes us to issue 120,000,000 shares of our Common
Stock and 10,000,000 shares of preferred stock. As of July 22, 2026, there were 46,917,080 shares of our Common Stock
outstanding and no shares of preferred stock outstanding. Accordingly, a substantial number of shares of our Common Stock
remain authorized for issuance and could become available for sale in the market. Our Fourth Amended and Restated Certificate
of Incorporation authorizes our Board to set the terms of and issue preferred stock, without stockholder approval, and such shares
if issued could dilute the voting and economic interests of holders of Common Stock. Also, we may be obligated to issue
additional shares of our Common Stock in connection with employee benefit plans (including equity incentive plans or under our
KSOP).
In the future, we may decide to raise capital through offerings of our Common Stock, preferred stock, additional securities
convertible into or exchangeable for our Common Stock or preferred stock, or rights to acquire those securities or our Common
Stock or preferred stock. We may also issue such securities as consideration in an acquisition. The issuance of such securities
could result in dilution of existing stockholders’ equity interests in us. Issuances of substantial amounts of our Common Stock or
preferred stock, or the perception that such issuances could occur, may adversely affect prevailing market prices for our Common
Stock.
The price of our Common Stock may fluctuate significantly.
The market price of our Common Stock has fluctuated significantly and may continue to do so for various reasons including, but
not limited to, the following, many of which are beyond our control:
●
our quarterly or annual earnings or those of other companies in our industry;
●
the public’s reaction to our press releases, our other public announcements and our filings with the SEC;
●
changes in recommendations by research analysts who track our Common Stock or the stock of other companies in our
industry, or a decision by such an analyst to reduce or cease coverage regarding our Common Stock;
●
changes in general conditions in the U.S. and global economy, financial markets or our industry, including those resulting
from changes in trade and tariff policies, changes in fuel prices or fuel shortages, geopolitical conflicts, incidents of
terrorism, pandemics or responses to such events;
●
changes in the competitive landscape for our business, including any changes resulting from industry consolidation
whether or not involving us;
●
our liquidity position;
●
future sales of our Common Stock;
●
any changes in our dividend policy or share repurchase program; and
●
other risks, including those described in this Risk Factors section.
The actual timing, number and value of shares repurchased under our share repurchase program will be determined by
management in its discretion and will depend on a number of factors, including but not limited to, the market price of our Common
25
Stock and general market and economic conditions. The share repurchase program may be suspended, modified or discontinued
at any time without prior notice.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Risk Management and Strategy
We understand the importance of cybersecurity and its role in the success of the Company. Our business operations depend on
the effective use of our information systems in order to properly serve our customers, manage our business and track and report
our financial results. Our information technology team considers risks from cybersecurity threats in the implementation and
execution of our business processes. We consider and assess the risks from cybersecurity threats as part of our overall risk
assessment
In order to identify, assess and manage material risks arising from cybersecurity threats, we maintain internal resources to monitor
and quickly respond to such threats. We perform vulnerability scans and penetration testing designed to test the effectiveness of
our security practices. We
-party service providers to assist in the evaluation of our internal controls over our
information systems through audit and consulting services to test the design and operational effectiveness of security controls.
We continually monitor our systems to detect and identify cybersecurity threats. Prior to contracting with third-party vendors, we
perform risk assessments of the vendors and require the vendors to manage cybersecurity risks to our business operations as well
as notify us of any potential or known cybersecurity risks. We also require our employees to complete training programs to
increase their awareness of and sensitivity to cybersecurity threats. These training programs include the identification of such
threats and the proper responses to a potential cybersecurity beach that aligns with our adopted processes.
The Company has developed a response process in the event of a cybersecurity incident. The process includes the cooperation of
the information technology team and our management team to properly detect and respond to these incidents. These responses
include determination of the potential impact and materiality of the incident, potential disclosure and litigation matters, and
mitigation of actual or potential damage to our systems or reputation arising from the incident. Mitigation measures are
implemented to respond to any potential cybersecurity breach in order to continue to effectively serve our customers and conduct
our operations with as little interruption as practicable. The information technology team reviews the response process
periodically to ensure that it is designed to be effective and to encompass current or new cybersecurity threats.
As of July 22, 2026, we are
t aware of any risks from cybersecurity threats, including as a result of prior cybersecurity incidents,
that have materially affected or that we believe are reasonably likely to materially affect the Company, including our business
strategy, results of operations or financial condition. See
cybersecurity threats.
Governance
The Board is responsible for the oversight of management’s process for identifying and mitigating risks related to cybersecurity
threats.
On a quarterly basis, the Director of Information Technology provides a report to the Audit Committee regarding ongoing
processes to improve and update our current cybersecurity protocols, new cybersecurity threats, results of internal assessments,
and any recent cybersecurity incidents.
The
or appropriate in order for the Board to effectively oversee the Company’s cybersecurity risk management and strategy.
The Director of Information Technology and the team he manages are responsible for the operation and maintenance of our
information systems, including the assessment, identification and management of risks from cybersecurity threats.
Together, the
Director of Information Technology and his team have over 150 years of experience in the information technology and security
environment. Our
, to whom the Director of Information Technology reports, has served as Chief Financial
Officer and a Board member since 2018 and has over 40 years of risk management experience.
26
ITEM 2. PROPERTIES
Our corporate headquarters is located in Ridgeland, Mississippi. We operate numerous production, manufacturing and processing
facilities, as well as maintain administrative offices through out 22 states. We believe that all of our facilities are well maintained
and suitable for current use. We continue to invest in our facilities with a focus on expanding capacity specifically within prepared
foods and specialty shell eggs as well as regular maintenance and cost-reduction projects.
The table below provides summary information about the primary operational facilities we use in our business by reportable
segment as of May 30, 2026 . Many of our facilities are utilized by both our Conventional Shell Egg and Specialty Shell Egg
segments and it is not practical to assign to just one segment. Therefore, we have identified below certain of our facilities as being
utilized by both our Conventional Shell Egg and Specialty Shell Egg segments .
Facility Type
Quantity
(a)
Primary Segment(s)
Capacity
(b)
Breeding Facilities
2
Conventional and Specialty Shell Egg
House up to 215,000 hens
Hatcheries
2
Conventional and Specialty Shell Egg
Hatch up to 712,600 chicks per week
Pullet Facilities
38
Conventional and Specialty Shell Egg
House up to 15.5 million pullets
Shell Egg Production
51
Conventional and Specialty Shell Egg
House up to 57.0 million layers
Shell Egg Processing and
Packaging
52
Conventional and Specialty Shell Egg
Processes approximately 702,600 dozen
shell eggs per hour
Feed Mills
29
Conventional and Specialty Shell Egg
Production capacity of 1,100 tons of feed
per hour
Food Manufacturing
5
Prepared Foods
Production capacity of 25,700 pounds per
hour
(a)
We own and operate all of these facilities. The table does not include idled facilities or contract production and
growers. Included in Food Manufacturing is our facility owned by our majority -owned joint venture Crepini Foods.
(b)
Capacity is not an indication of production rates. Utilization of capacity varies by facility based on the level of
demand for products produced at each facility.
As of May 30, 2026 , we owned approximately 34.2 thousand acres of land. There are no material mortgages or liens on our
properties.
ITEM 3. LEGAL PROCEEDINGS
Refer to the description of certain legal proceedings under Part II. Item 8. Notes to the Consolidated Financial Statements,
, which discussion is incorporated herein by reference.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Our Common Stock trades on the Nasdaq Global Select Market under the symbol “CALM”. At July 14, 2026, there were
approximately 243 record holders of our Common Stock and approximately 138,539 beneficial owners whose shares were held
by nominees or broker dealers.
Dividends
The Company has a variable dividend policy adopted by the Board. Pursuant to the policy, the Company pays a dividend to
stockholders of its Common Stock on a quarterly basis for each quarter for which the Company reports net income attributable
to Cal -Maine Foods, Inc. computed in accordance with generally accepted accounting principles (“GAAP”) in the U.S., in an
amount equal to one -third (1/3) of such quarterly net income. Dividends are paid to stockholders of record as of the 60th day
following the last day of such quarter, except for the fourth fiscal quarter. For the fourth quarter, the Company pay s dividends to
stockholders of record on the 65th day after the quarter end. Dividends are payable on the 15th day following the record date.
27
Following a quarter for which the Company does not report net income attributable to Cal-Maine Foods, Inc., the Company will
not pay a dividend for a subsequent profitable quarter until the Company is profitable on a cumulative basis computed from the
date of the last quarter for which a dividend was paid. In accordance with our variable dividend policy, we will not pay a cash
dividend to holders of our Common Stock with respect to our fourth quarter of fiscal 2026, and will not pay a dividend for a
subsequent profitable quarter until the Company is profitable on a cumulative basis computed from the date of the last quarter in
which a dividend was paid. At the end of the fourth quarter of fiscal 2026, the amount of cumulative losses to be recovered before
payment of any future dividends under our variable dividend policy was $35.9 million.
Under the Company's Credit Facility, dividends are restricted to the amount permitted under the Company’s current dividend
policy, and may not be paid if a default exists or will arise after giving effect to the dividend or if the sum of cash and cash
equivalents of the Company and its subsidiaries plus availability under the Credit Facility equals less than $50 million.
Stock Performance Graph
The Company utilized the (i) Russell 2000 Total Return, and (ii) S&P Composite 1500 Food Products Industry Index to
benchmark the Company’s total shareholder return. The Company is a member of each of these indexes and believes the other
companies included in these indexes provide products and services similar to the Company . The graph presents cumulative total
shareholder return and assumes $100 was invested on May 28, 2021 in the stock or index and dividends were reinvested.
May 28, 2021
May 27, 2022
June 2, 2023
May 31, 2024
May 30, 2025
May 29, 2026
Cal -Maine Foods, Inc.
$
100.00
$
138.27
$
150.19
$
201.88
$
337.66
$
276.80
Russell 2000 Total Return
100.00
84.13
82.89
95.13
96.26
137.73
S&P Composite 1500 Food
Products Industry Index
100.00
107.14
113.16
103.03
95.52
93.33
28
Issuer Purchases of Equity Securities
The following table is a summary of our fourth quarter 2026 shares repurchases:
Issuer Purchases of Equity Securities
Total Number of
Maximum Approximate
Shares Purchased
Dollar Value of
Total Number
Average
as Part of Publicly
Shares that May Yet
of Shares
Price Paid
Announced Plans
Be Purchased Under
Period
Purchased
(a)
per Share
or Programs
the Plans or Programs
(b)
3/1/26 to 3/28/26
—
$
—
—
$
—
3/29/26 to 4/25/26
239,936
76.15
239,770
332,583,260
4/26/26 to 5/30/26
156,313
75.85
156,313
320,726,332
396,249
$
76.03
396,083
$
320,726,332
(a) As permitted under our Amended and Restated 2012 Omnibus Long -Term Incentive Plan, 166 shares were withheld by us to satisfy tax withholding
obligations for an employee in connection with the vesting of restricted common stock.
(b) On February 25, 2025, the Company announced a $500 million share repurchase program. The share repurchase program authorizes the Company, in
management’s discretion, to repurchase shares of Common Stock from time to time for an aggregate purchase price up to $500 million (exclusive of any fees,
taxes, commissions or other expenses related to such repurchases), subject to market conditions and other factors. The share repurchase program does not obligate
the Company to repurchase any specific amount of shares, does not have an expiration date, and may be suspended, modified or discontinued at any time without
prior notice.
Recent Sales of Unregistered Securities
No sales of securities without registration under the Securities Act of 1933 occurred during our fiscal year ended May 30, 2026.
ITEM 6. RESERVED
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RISK FACTORS; FORWARD-LOOKING STATEMENTS
For information relating to important risks and uncertainties that could materially adversely affect our business, securities,
financial condition , operating results, or cash flow, reference is made to the disclosure set forth under
. In addition, because the following discussion includes numerous forward -looking statements relating to our business,
securities, financial condition, operating results and cash flow, reference is made to the disclosure set forth under
“
.”
COMPANY OVERVIEW
Cal -Maine Foods, Inc. (“Cal -Maine Foods,” the “Company,” “we,” “us,” “our”) is the largest egg company in the U.S. and a
leading player in the egg-based food industry, headquartered in Ridgeland, Mississippi. With a strong national footprint, Cal-
Maine Foods provides nutritious, affordable, and sustainable protein to millions of households every day. In fiscal 2026, we sold
approximately 1.2 billion dozen shell eggs. Our total flock as of May 30, 2026 of approximately 50.0 million layers and
14.5 million pullets and breeders is the largest in the U.S.
The Company’s shell egg portfolio spans the full egg value ladder —from conventional to specialty, including cage-free,
nutritionally enhanced, organic, brown, pasture -raised and free-range eggs—serving both retail and foodservice customers
nationwide. Cal -Maine Foods also participates in the growing prepared foods sector, with offerings such as pre-cooked egg
patties, omelets, folded and scrambled egg formats, hard -cooked eggs, pancakes, waffles, and specialty wraps. Our branded
portfolio includes Eggland’s Best®, Land O’Lakes®, Farmhouse Eggs®, 4Grain®, Sunups®, Van’s ®, MeadowCreek Foods®,
and Crepini®.
We sell our products to a diverse group of customers, including national and regional grocery store chains, club stores, companies
servicing independent supermarkets in the U.S., and foodservice distributors serving restaurants, convenience stores, healthcare
29
and education facilities, and hotels throughout the majority of the U.S. and aim to maintain efficient, state -of-the-art operations
located close to our customers.
Our strategy includes three primary priorities: expanding specialty shell eggs and prepared foods, pursuing disciplined growth
through acquisitions and leveraging our scale, vertical integration, operational excellence and financial strength. Throughout our
history, we have acquired other businesses in our industry. Since 1989, we have acquired and integrated 28 businesses, and within
the last 2 fiscal years, we have made various acquisitions aimed at furthering our growth strategy. For further discussion of our
acquisitions, refer to
Our fiscal year end is the Saturday closest to May 31. The fiscal years 2026, 2025 and 2024 each included 52 weeks. All references
herein to a fiscal year means our fiscal year and all references to a year mean a calendar year.
Our operating results are materially impacted by market prices for eggs and feed grains (corn and soybean meal), which are highly
volatile, independent of each other, and out of our control. Generally, higher market prices for eggs have a positive impact on our
financial results while higher market prices for feed grains have a negative impact on our financial results. Our pricing for shell
eggs is negotiated with our customers on individual terms. We sell our shell eggs at prices based on formulas that take into
account, in varying ways, one of the independently quoted regional wholesale market prices for shell eggs, our costs of production,
such as grain-based and variations of cost-plus arrangements, or hybrid models including cost of production and wholesale market
prices.
Almost all of our conventional shell eggs are priced and sold under market -based pricing frameworks or the hybrid models
described above, split almost evenly between such frameworks. The majority of our specialty shell eggs are priced and sold under
frameworks that are based on cost of production, although we do have some customers that prefer market -based pricing for cage-
free eggs. As a result, specialty shell egg prices typically do not fluctuate as much as conventional shell egg prices. We do not
sell eggs directly to consumers or set the prices at which eggs are sold to consumers.
Retail sales of shell eggs historically have been highest during the fall and winter months and lowest during the summer months.
Prices for shell eggs fluctuate in response to seasonal demand factors and a natural increase in egg production during the spring
and early summer. Historically, shell egg prices tend to increase with the start of the school year and tend to be highest prior to
holiday periods, particularly Thanksgiving, Christmas and Easter. As a result, we have historically experienced, and may
experience in the future, lower shell egg selling prices, sales volumes and shell egg sales (and have incurred, and may incur in
the future, net losses) in our first and fourth fiscal quarters ending in August/September and May/June, respectively. Becaus e of
the seasonal and quarterly fluctuations, comparisons of our sales and operating results between different quarters within a single
fiscal year are not necessarily meaningful comparisons.
Our industry has been greatly impacted by several outbreaks of HPAI in recent years. Following the HPAI outbreaks in 2015,
there were no reported significant outbreaks of HPAI in the commercial table egg layer flocks until February through December
2022. Thereafter, there were no HPAI cases affecting commercial layers until November 2023. Since 2023, outbreaks of HPAI
have continued to occur in U.S. poultry flocks. In 2024 and 2025, 40.2 million and 45.2 million commercial layer hens and pullets
were depopu lated due to HPAI, respectively. To date in 2026, through July 20, 2026, 19.2 million layer hens and pullets have
been depopulated due to HPAI.
An important competitive advantage for Cal -Maine Foods is our ability to meet our customers’ evolving needs with a favorable
mix of branded and private -label products of conventional and specialty shell eggs, including cage-free, nutritionally enhanced,
organic, brown, pasture -raised and free-range eggs, as well as prepared foods and egg products.
For further description of our business, refer to
The Company previously operated as one operating and one reportable segment. Effective in the fourth quarter of fiscal 2026,
the Company determined its operations are organized into three reportable operating segments: (1) Conventional Shell Eggs; (2)
Specialty Shell Eggs; and (3) Prepared Foods. As we have expanded our prepared foods product offerings throughout fiscal 2026,
these operating segments align with how the Company’s management reviews operating results and makes decisions about
resource allocation and strategic initiatives. All prior fiscal year periods have been recast to reflect the new reportable segments.
For further information on our reportable segments, see
Financial Statements.
EXECUTIVE OVERVIEW
For fiscal 2026, we recognized net sales of $2.9 billion and net income of $316.7 million. We recorded a gross profit of $672.0
million compared to $1.9 billion for fiscal 2025. The decrease was a result of a decrease in the net average selling price of shell
eggs, primarily conventional shell egg prices, partially offset by an expansion of our Prepared Foods segment.
30
Our average conventional shell egg price per dozen for fiscal 2026 declined 50.9% compared to fiscal 2025. Average specialty
shell egg price per dozen declined 9.5% compared to fiscal year 2025. Egg prices declined with the repopulation of the egg layer
flock during fiscal 2026. According to the USDA, the size of the layer hen flock was 312.0 million hens at July 1, 2026, compared
to the five-year average of 308.0 million hens . American Egg Board estimates the U.S. laying flock
as
of May 2026 at 340 –347
million hens, based on producer assessment data collected across the commercial egg industry, materially above USDA’s
published estimate and indicative of abundant egg supplies.
In fiscal 2026, prepared foods accounted for $244.8 million or 8.4% of our net sales. Prepared food sales for fiscal 2026 increased
$240.8 million, compared to fiscal 2025, primarily due to our acquisition of Echo Lake Foods in the first quarter of fiscal 2026.
Wholesale shell egg prices are volatile, cyclical, and impacted by a number of factors, including consumer demand, seasonal
fluctuations, the number and productivity of laying hens in the U.S., outbreaks of agricultural diseases such as HPAI, severe
weathe r patterns and retailers go-to-market strategies and how they manage their inventories. We believe the recent decline in
wholesale egg prices primarily reflects improved egg supply, following disruptions associated with HPAI in fiscal year 2025.
Compared to the prior fiscal year, panic -driven purchasing activity appears to have subsided, and improved pipeline availability
relative to the prior fiscal year appears to have reduced the need for accelerated purchasing or inventory builds by retailers and
foodservice operators. As a result, wholesale shell egg prices have declined, while retail shell egg prices have adjusted more
gradually.
RESULTS OF OPERATIONS
CONSOLIDATED RESULTS
Fiscal Year Ended
2026 Compared to
2025 Compared to
May 30, 2026
May 31, 2025
June 1, 2024
2025 % Change
2024 % Change
Net sales
$
2,911,632
$
4,261,885
$
2,326,443
(31.7)
%
83.2
%
Operating income
350,186
1,536,539
312,452
(77.2)
391.8
Total other income
60,818
66,603
47,519
(8.7)
40.2
Income tax expense
92,892
384,910
83,689
(75.9)
359.9
Less: Net income (loss) attributable
to noncontrolling interest
1,430
(1,816)
(1,606)
(178.7)
13.1
Net income attributable to
Cal -Maine Foods, Inc.
$
316,682
$
1,220,048
$
277,888
(74.0)
%
339.0
%
Net Sales
Net sales for fiscal year 2026 was $2.9 billion compared to $4.3 billion in fiscal 2025, a decrease of $1.3 billion or 31.7%. The
decrease was primarily due to the decrease in prices for conventional shell egg, as the layer population recovered in 2025 fro
m
the recent HPAI outbreaks , partially offset by sales growth due to acquisitions made during fiscal 2026, particularly Echo Lake
Foods. For further discussion, refer to “Segment Results” within this section.
Net sales for fiscal year 2025 were $4.3 billion compared to $2.3 billion in fiscal 2024, an increase of $1.9 billion or 83.2%. The
increase was primarily due to the increase in prices for conventional shell eggs due to a resurgence of HPAI outbreaks in 2024
and 2025, which decreased supply.
For more information regarding the HPAI outbreaks, refer to
.
Operating Income
For fiscal 2026, operating income was $350.2 million compared to $1.5 billion in fiscal 2025, a decrease of $1.2 billion, or 77.2%.
The decrease was primarily due to a decrease in prices for conventional shell egg, partially offset by a decrease in price and
volume of outside egg purchases. For further discussion, refer to “Segment Results” within this section.
31
Operating income was $1.5 billion in fiscal 2025 compared to $312.5 million in fiscal 2024, an increase of $1.2 billion, or 391.8%.
The increase was primarily due to higher net average selling prices, particularly for conventional shell eggs, and higher shell egg
volumes, as well as lower feed ingredient prices, partially offset by an increase in volume and price of outside egg purchase s.
For more information regarding shell egg and feed prices, refer to
Other Income (Expense)
Total other income (expense) consists of items not directly charged to, or related to, operations such as interest income and
expense, equity in income or loss of unconsolidated entities, and patronage dividends, among other items. Patronage dividends
are paid to us from our membership in the EB cooperative.
We recorded interest income of $46.7 million in fiscal 2026, compared to $48.7 million in fiscal 2025 , primarily due to slightly
lower cash and cash equivalents and investment securities available -for-sale balances as the Company used these investments for
acquisitions throughout fiscal 2026 . We recorded interest expense of $556 thousand and $612 thousand in fiscal 2026 and 2025,
respectively, primarily related to commitment fees under our Credit Facility described below.
We recorded interest income of $48.7 million in fiscal 2025, an increase of $16.4 million compared to fiscal 2024, primarily due
to significantly higher cash and cash equivalents and investment securities available -for-sale balances and yields. We recorded
interest expense of $612 thousand in fiscal 2025 primarily related to commitment fees under our Credit Facility.
Income Taxes
For fiscal 2026, our pre-tax income was $41 1.0 million, compared to $1.6 billion for fiscal 2025. We recognized a tax provision
of $92.9 million for fiscal 2026 compared to $384.9 million in fiscal 2025. For fiscal 2026, the primary difference between the
U.S. statutory rate of 21% and the effective rate of 22.6% was related to state income taxes. For fiscal 2025, the primary
differences between the U.S. statutory rate of 21% and the effective tax rate of 24.0% related to state income taxes, federal tax
credits, and certain non -taxable and non-deduc tible items. For fiscal 2024, income tax expense was $83.7 million with an effective
tax rate of 23.2%.
Items causing our effective tax rate to differ from the federal statutory income tax rate of 21% are state income taxes, certain
federal tax credits and certain items included in income or loss for financial reporting purposes that are not included in taxable
income or loss for income tax purposes, including tax exempt interest income, certain nondeductible expenses, and net income
or loss attributable to noncontrolling interest.
Net income (loss) attributable to noncontrolling interest
Net income attributable to noncontrolling interest was $1.4 million for fiscal 2026 compared to a net loss of $1.8 million and a
net loss $1.6 million for fiscal 2025 and fiscal 2024, respectively. The increase in net income attributable to noncontrolling interest
for fiscal 2026 as compared to fiscal 2025 was due to increase sales volume of our Crepini Foods of 406%.
Net Income Attributable to Cal -Maine Foods, Inc.
Net income attributable to Cal -Maine Foods, Inc. for fiscal 2026 was $316.7 million, or $6.65 per basic and $6.63 per diluted
share, compared to $1.2 billion, or $25.04 per basic and $24.95 per diluted share for fiscal 2025.
Net income attributable to Cal -Maine Foods, Inc. for fiscal 2024 was $277.9 million, or $5.70 per basic and $5.69 per diluted
share.
32
SEGMENT RESULTS
Conventional Shell Eggs
Fiscal Year Ended
2026 Compared to
2025 Compared to
May 30, 2026
May 31, 2025
June 1, 2024
2025 % Change
2024 % Change
Net sales
$
1,348,076
$
2,755,859
$
1,247,292
(51.1)
%
120.9
%
Cost of sales
1,059,179
1,393,212
970,031
(24.0)
%
43.6
Selling, general and administrative
72,256
72,644
63,560
(0.5)
%
14.3
Segment income
$
216,641
$
1,290,003
$
213,701
(83.2)
%
503.6
%
Fiscal 2026 compared to fiscal 2025
-
Net sales decreased $1.4 billion, or 51.1% compared to fiscal 2025, primarily due to a decrease of 50.9% in prices for
conventional shell eggs, resulting in a $1.4 billion decrease in net sales. Volumes for conventional shell eggs were
relatively flat compared to fiscal 2025.
-
Cost of sales decreased $334.0 million, or 24.0% compared to fiscal 2025, primarily due to a 23.8% decrease in the cost
per dozen sold as total volume sold was relatively flat. Cost per dozen sold decreased primarily due to a decrease in the
price and volume of outside egg purchases compared to the prior fiscal year.
Fiscal 2025 compared to fiscal 2024
-
Net sales increased $1.5 billion, or 120.9% in fiscal 2025 compared to fiscal 2024 primarily due to an increase of 99.7
%
in prices for conventional shell eggs, which resulted in a $1.4 billion increase in net sales, and a 10.6% increase in
volume of conventional dozens sold, which resulted in a $132 .5 million increase in net sales .
-
Cost of sales increased $423.2 million, or 43.6% in fiscal 2025 compared to fiscal 2024, primarily due a 29.8% increase
in the cost per dozen sold as well as an increase of 10.6% in sales volume. Cost per dozen sold increased primarily due
to the increase in the average price and volume of outside egg purchases, which was partially offset by a 5.6% decrease
in production cost primarily driven by lower feed ingredient prices as our production increased 9.1%.
-
Selling, general, and administrative expenses increased $9.1 million, or 14.3% in fiscal 2025 compared to fiscal 2024,
primarily due to increased delivery and employee related costs. The increase in delivery costs related to a 10.6% increase
in volume of conventional shell eggs sold due to our acquisition of ISE America, Inc. (“ISE”) and our facilities in Chase,
KS and Farwell, TX returning to full operations in fiscal 2025 following HPAI outbreaks in the third and fourth quarters
of fiscal 2024. Employee related costs increased due to an increase in bonuses compared to fiscal 2025. For more
information regarding our acquisitions, refer to
Statements. For more information regarding HPAI, refer to
.
Specialty Shell Eggs
Fiscal Year Ended
2026 Compared to
2025 Compared to
May 30, 2026
May 31, 2025
June 1, 2024
2025 % Change
2024 % Change
Net sales
$
1,070,458
$
1,154,951
$
873,619
(7.3)
%
32.2
%
Cost of sales
777,920
717,411
648,236
8.4
%
10.7
Selling, general and administrative
110,994
103,938
89,188
6.8
%
16.5
Segment income
$
181,544
$
333,602
$
136,195
(45.6)
%
144.9
%
Fiscal 2026 compared to fiscal 2025
-
Net sales decreased $84.5 million, or 7.3% compared to fiscal 2025, primarily due to a decrease of 9.5% in prices of
specialty shell eggs, resulting in a $112.6 million decrease in net sales, partially offset by a 2.4% increase in specialty
dozens sold, resulting in a $28. 1 million increase in net sales.
33
-
Cost of sales increased $60.5 million, or 8.4% compared to fiscal 2025, primarily due to a 5.9% increase in the cost per
dozen sold as well as an increase of 2.4% in sales volume. Cost per dozen sold increased as our specialty shell egg mix
shifted to higher cost specialty types.
-
Selling, general, and administrative expenses increased $7.1 million, or 6.8% compared to fiscal 2025, primarily due to
a $4.7 million increase in franchise fees. In fiscal 2025, the higher prices for conventional shell eggs compared to
specialty shell eggs diminished the need to promote specialty shell eggs, during which time, EB temporarily reduced the
related franchise fees for certain specialty shell egg brands to encourage continued production of these branded eggs.
Additionally, delivery charges increased $2.3 million as specialty dozens sold increased 2.4 % compared to fiscal 2025.
Fiscal 2025 compared to fiscal 2024
-
Net sales increased $281.3 million, or 32. 2% in fiscal 2025 compared to fiscal 2024 primarily due to an increase of
20.7% in volume of specialty shell eggs sold, which resulted in a $180.9 million increase in net sales, and a 9.5% increase
in prices of specialty shell eggs, which resulted in a $100.5 million increase in net sales.
-
Cost of sales increased $69.2 million, or 10.7% in fiscal 2025 compared to fiscal 2024, primarily due to a 20.7% increase
in sales volume, partially offset by an 8.3% decrease in the cost per dozen sold. Cost per dozen sold decreased primarily
due to a 8.3% decrease in our production costs primarily driven by lower feed ingredient prices in fiscal 2025 compared
to fiscal 2024.
-
Selling, general, and administrative expenses increased $14.8 million, or 16.5% in fiscal 2025 compared to fiscal 2024,
primarily due to an $11.1 million increase in delivery expense resulting from higher contract trucking expenses .
Prepared Foods
Fiscal Year Ended
2026 Compared to
2025 Compared to
May 30, 2026
May 31, 2025
June 1, 2024
2025 % Change
2024 % Change
Net sales
$
244,802
$
4,050
$
—
5,944.5
%
100.0
%
Cost of sales
185,370
4,511
—
4,009.3
100.0
Selling, general and administrative
25,550
1,658
—
1,441.0
100.0
Segment income
$
33,882
$
(2,119)
$
—
(1,699.0)
%
100.0
%
Fiscal 2026 compared to fiscal 2025
-
Net sales increased $240.8 million, compared to fiscal 2025, primarily due to the significant expansion of our prepared
foods segment following our acquisition of Echo Lake Foods. For more information regarding our acquisitions, refer to
-
Cost of sales increased $180.8 million compared to fiscal 2025, primarily due to increased production resulting from the
acquisition of Echo Lake Foods.
-
Selling, general, and administrative expenses increased $24.1 million, compared to fiscal 2025, primarily due to
increased employee costs and delivery charges resulting from the acquisition of Echo Lake Foods.
34
Fiscal 2025 compared to fiscal 2024
-
Net sales increased $4.1 million in fiscal 2025 compared to fiscal 2024 due to the acquisition of Crepini during fiscal
2025. For more information regarding our acquisitions, refer to
Consolidated Financial Statements.
-
Cost of sales increased $4.5 million in fiscal 2025 compared to fiscal 2024 due to the acquisition of Crepini.
-
Sales, general, and administrative expenses increased $1.7 million in fiscal 2025 compared to fiscal 2024 due to the
acquisition of Crepini.
Unallocated Income (Expenses)
Fiscal Year Ended
2026 Compared to
2025 Compared to
May 30, 2026
May 31, 2025
June 1, 2024
2025 % Change
2024 % Change
Other - segment income
$
19,044
$
42,091
$
33,566
(54.8)
%
25.4
%
Unallocated corporate SG&A (a)
(108,353)
(127,141)
(94,516)
(14.8)
34.5
Gain (loss) on involuntary
conversions
8,819
(156)
23,532
(5,753.2)
(100.7)
Gain (loss) on disposal of fixed
assets
(1,391)
259
(26)
(637.1)
(1,096.2)
(a)
Unallocated corporate SG&A primarily consists of unallocated corporate overhead costs, administrative expenses, and
amortization that are not directly related or allocated to the operating segments.
Fiscal 2026 compared to fiscal 2025
-
Other – segment income decreased $23.0 million, or 54.8 % compared to fiscal 2025, primarily due to
a
decrease in the
average selling price of our co-pack egg sales as well as liquid and frozen egg products.
-
Unallocated corporate SG&A decreased $18.8 million, or 14.8%, compared to fiscal 2025, primarily due to a decrease
in the accrual for employee bonuses compared to the prior fiscal year as well as a $15.0 million adjustment in fiscal
2025 to the fair value of contingent consideration associated with the Fassio Egg Farms, Inc. (“Fassio”) acquisition.
These were partially offset by additional amortization of intangibles that were acquired from our acquisitions during
fiscal 2026. For more information regarding our acquisitions, refer to
Consolidated Financial Statements.
-
In fiscal 2026, we recognized $8.8 million of gains from involuntary conversions, primarily driven by a $7.5 million
gain recorded in the first quarter related to business interruption insurance recoveries associated with a weather -related
event that occur red in fiscal 2021.
Fiscal 2025 compared to fiscal 2024
-
Other – segment income increased $8.5 million, or 25.4% in fiscal 2025 compared to fiscal 2024 primarily due to an
increase in volume of liquid egg products sold, primarily related to the acquisition of ISE, which included a breaking
facility.
-
Unallocated corporate SG&A increased $32.6 million or 34.5% compared to fiscal 2024, primarily due employee related
costs which increased due to an increase in employee bonuses and a $15.0 million adjustment in fiscal 2025 compared
to a $5.5 million adjustment to increase the fair value of contingent consideration associated with the Fassio acquisition
and increased professional fees mainly associated with $6.6 million transaction costs recorded in the fourth quarter of
fiscal 2025 for Echo Lake Foods acquisition. These were partially offset by a $19.6 million reduction in litigation loss
contingency accrual.
-
In fiscal 2025, loss on involuntary conversion was $156 thousand compared to
a
$23.5 million gain on involuntary
conversion in fiscal 2024. The de crease of $23.7 million was primarily due to recoveries in fiscal 2024 under indemnity
and insurance programs that exceeded the amortized book value of the covered assets and our direct costs, primarily
related to the HPAI outbreak at our Kansas and Texas facilities that occurred in fiscal 2024 .
35
LIQUIDITY AND CAPITAL RESOURCES
We aim to maintain a strong balance sheet and liquidity, particularly given the cyclical nature of our business. We believe a strong
balance sheet supports our growth opportunities and stockholder returns. Our priorities for the use of cash in recent periods have
included the payment of dividends pursuant to our variable dividend policy, inorganic growth through acquisition s of businesses,
organic growth including construction and conversion of cage-free facilities and investment in value -added products , and
maintenance capital expenditures.
Working Capital and Current Ratio
Our working capital at May 30, 2026 was $1.4 billion, compared to $1.7 billion at May 31, 2025. The calculation of working
capital is defined as current assets less current liabilities. Our current ratio was 7.7 at May 30, 2026 compared to 6.4 at May 31,
2025. The current ratio is calculated by dividing current assets by current liabilities. The increase in our current ratio is primarily
due to the decrease in total current liabilities, specifically dividends payable , which decreased by $114.1 million compared to
May 31, 2025 . Due to seasonal factors described in
, we generally expect our need for
working capital to be highest in the fourth and first fiscal quarters ending in May/ June and August/September, respectively.
Cash Flows from Operating Activities
Net cash provided by operating activities was $479.8 million for fiscal 2026, compared to $1.2 billion for fiscal 2025. The
decrease in cash flow from operating activities resulted primarily from lower net average egg sales prices per dozen, particularly
for conventional shell eggs, partially offset by the increase in volume and higher price of outside egg purchases in the prior fiscal
year .
Cash Flows Used in Investing Activities
For fiscal 2026, $503.8 million was used in investing activities, primarily due to the acquisition of assets of Echo Lake, Creighton,
and other businesses as well as sales and maturities of investment securities compared to $575.5 million used in investing
activities in fiscal 2025, primarily due to purchases of investment securities, purchases of property, plant and equipment and the
acquisition of assets of ISE . Purchases of investment securities were $648.9 million in fiscal 2026 compared to $1.2 billion in
fiscal 2025. Sales and maturities of investment securities were $745.2 million in fiscal 2026, compared to $907.6 million for
fiscal 2025. Cash paid for business acquisitions was $427.8 million in fiscal 2026, primarily related to the Echo Lake and
Creighton acquisition s, and $116.2 million in fiscal 2025, related to the ISE acquisition. Purchases of property, plant and
equipment were $151.2 million and $161.3 million in fiscal 2026 and 2025, respectively, primarily reflecting progress on our
construction projects.
Cash Flows Used in Financing Activities
We paid dividends totaling $231.6 million and $330.3 million in fiscal 2026 and 2025, respectively. We repurchased $131.1
million in shares of Common Stock in fiscal 2026, compared to $54.0 million in fiscal 2025, primarily under our share repurchase
program. See “Share Repurchase Program,” below.
Increase (decrease) in Cash and Cash Equivalents
As of May 30, 2026, cash and cash equivalents decreased $386.9 million since May 31, 2025, compared to
a
$262.5 million
increase during fiscal 2025. The decrease is primarily due to the acquisitions of Echo Lake Foods, Creighton Brothers, LLC,
Clean Egg, LLC, and Van’s Foods, totaling $452.6 million. Refer to Part II. Item 8. Notes to the Financial Statements,
Credit Facility
On November 15, 2021, we entered into an Amended and Restated Credit Agreement (as amended, the “Credit Agreement”),
expiring November 21, 2026. The Credit Agreement provides for a senior secured revolving credit facility (the “Credit Facility”),
up to $250 million. As of May 30, 2026, no amounts were borrowed under the Credit Facility. As of May 30, 2026, we had $5.9
million in outstanding standby letters of credit, which were issued under our Credit Facility for the benefit of certain insurance
companies. Refer to Part II. Item 8. Notes to the Financial Statements,
our long-term debt.
36
Share Repurchase Program
In February 2025, the Company’s Board of Directors (“Board”) approved a $500 million share repurchase program. The share
repurchase program authorizes the Company, in management’s discretion, to repurchase shares of our common stock from time
to time for an aggregate purchase price up to $500 million (exclusive of any fees, taxes, commissions or other expenses related
to such repurchases), subject to market conditions and other factors. The actual timing, number and value of shares repurchased
under the program will be determined by management in its discretion and will depend on a number of factors, including, but not
limited to, the market price of our common stock and general market and economic conditions. The Company repurchased
1,571,950 and 551,876 shares during fiscal 2026 and 2025, respectively, under the program. As of the end of fiscal 2026, we had
remaining authorization to purchase up to $320.7 million under the repurchase program.
The Company expects to strategically and opportunistically repurchase shares from time to time through solicited or unsolicited
transactions in the open market, in privately negotiated transactions or by other means in accordance with securities laws. The
Company expects that share repurchases under the program will be funded from existing cash balances and future free cash flow.
The share repurchase program does not obligate the Company to repurchase any specific amount of shares, does not have an
expirati on date, and may be suspended, modified or discontinued at any time without prior notice. See
Dividends
In accordance with our variable dividend policy, we will not pay a cash dividend to holders of our Common Stock with respect
to our fourth quarter of fiscal 2026. The Company will not pay a dividend for a subsequent profitable quarter until the Company
is profitable on a cumulative basis computed from the date of the last quarter in which a dividend was paid. At the end of the
fourth quarter of fiscal 2026, the amount of cumulative losses to be recovered before payment of a dividend was $35.9 million.
Material Cash Requirements
Material cash requirements for operating activities primarily consist of feed ingredients, processing, packaging and warehouse
costs, employee related costs, maintenance capital expenditures and other general operating expenses. Our material cash
requirements for growth capital expenditures consist primarily of our construction projects to increase our production capacity of
prepared foods and cage -free shell egg production. We believe our current cash balances, investments, projected cash flows from
operations, and available borrowings under our Credit Facility will be sufficient to fund our cash needs for at least the next 12
months and to fund our capital commitments currently in place thereafter. Future acquisitions of businesses may require additional
financing.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
For information on changes in accounting principles and new accounting principles, see “
New Accounting Pronouncements and
Policies
” in Part II. Item 8. Notes to Consolidated Financial Statements,
.
CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements in accordance with U.S. GAAP 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 materially from these estimates. Critical accounting estimates
are those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are
reasonably likely to have a material impact on the financial condition or results of operations. Our critical accounting estimates
are described below.
Business Combinations
The Company applies the acquisition method of accounting, which requires that once control is obtained, all the assets acquired
and liabilities assumed, including amounts attributable to noncontrolling interests, are recorded at their respective fair values at
the date of acquisition. The excess of the purchase price over fair values of identifiable assets and liabilities is recorded as
goodwill.
We use various models and methods to determine the fair values of identifiable assets and liabilities, such as top-down and
bottom-up approach for inventory, cost method and market approach for property, relief-from-royalty and multi-period excess
37
earnings to value intangibles. Significant estimates in valuing certain intangible assets include, but are not limited to, the amount
and timing of future cash flows, growth rates, discount rates and useful lives.
The fair values of identifiable assets and liabilities are generally determined internally and requires estimates and the use of
various valuation techniques. When a market value is not readily available, our internal valuation methodology considers the
remaining estimated life of the assets acquired and significant judgment is required as management determines the fair market
value for those assets.
Due to inherent industry uncertainties including volatile egg prices and feed costs, unanticipated market changes, events, or
circumstances may occur that could affect the estimates and assumptions used, which could result in subsequent impairments.
Inventories
Inventories of eggs, feed, supplies and flocks are valued principally at the lower of cost or net realizable value. If market prices
for eggs and feed grains move substantially lower, we 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 or hatching
costs, feed, labor, contractor payments and overhead costs, are accumulated during the hatching and growing periods of
approximately 22 weeks. Capitalized flock costs are then amortized over the flock’s productive life, generally one to two
years. Judgment exists in determining the flock’s productive life including factors such as laying rate and egg size, molt cycles,
and customer demand . Furthermore, other factors such as hen type or weather conditions could affect the productive life. These
factors could make our estimates of productive life differ materially from actual results. Flock mortality is charged to cost of sales
as incurred. High mortality from disease or extreme temperatures will result in abnormal write-downs to flock
inventories. Management continually monitors each flock and attempts to take appropriate actions to minimize the risk of
mortality loss.
Goodwill
As a result of acquiring businesses, the Company had $97.1 million of goodwill as of May 30, 2026, representing 3.1% of total
assets and 3.7% of stockholders’ equity. Goodwill is evaluated for impairment annually (or more frequently if impairment
indicators arise) by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary . After
assessing the totality of events or circumstances, if we determine it is more likely than not that the fair value of a reporting unit
is less than its carrying amount, then we perform additional quantitative tests to determine the magnitude of any impairment.
During our annual impairment test, which was the first day of the fourth quarter, we determined that goodwill passed the
qualitative assessment and therefore no quantitative analysis of goodwill impairment was necessary in fiscal 2026.
As part of the change to our reportable operating segments in fiscal 2026, the goodwill of the Company’s historical reporting
units were reallocated to the new reporting units on a relative fair value basis as of the date of the reorganization. The Company’s
determination of fair value involved the use of estimates and assumptions. Following the allocation of goodwill, the Company
performed a quantitative impairment test, for which the Company determined the estimated fair value of each reporting unit
exceeded its carrying value and therefore no impairment was identified. When the Company acquires a new location, a
determination is made on how to allocate goodwill among the reporting units. See
for updated disclosures regarding the allocation of goodwill.
Judgment exists in management’s evaluation of the qualitative factors which include macroeconomic conditions, the current egg
industry environment, cost inputs such as feed ingredients and overall financial performance. Furthermore, judgment exists in the
evaluation of the threshold of whether it is more likely than not that the fair value of a reporting unit is less than its carrying
amount. Uncertainty exists due to uncontrollable events that could occur that could negatively affect our operating conditions.
Revenue Recognition
Revenue recognition is completed upon satisfaction of the performance obligation which generally occurs upon shipment or
delivery to a customer based on terms of the sale.
Revenues are recognized in an amount that reflects the net consideration we expect to receive in exchange for delivery of the
products. The Company periodically offers sales incentives or other programs such as rebates, discounts, coupons, volume -based
incentives, guaranteed sales and other programs. The Company records an estimated allowance for costs associated with these
programs, which is recorded as a reduction in revenue at the time of sale using historical trends and projected redemption rates
of each program. The Company regularly reviews these estimates and any difference between the estimated costs and actual
realization of these programs would be recognized in the subsequent period.
38
As the estimates noted above are based on historical information, we do not believe that there will be a material change in the
estimates and assumptions used to recognize revenue. However, if actual results varied significantly from our estimates, it could
expose us to material gains or losses.
Loss Contingencies
The Company evaluates whether a loss contingency exists, and if the assessment of a contingency indicates it is probable that
a
material loss has been incurred and the amount of the loss can be reasonably estimated, the estimated loss would be accrued in
the Company’s financial statements. The Company expenses the costs of litigation as they are incurred.
The Company accrued $4.0 million in litigation loss contingency in fiscal 2026 and $19.6 million in fiscal 2024. There were no
loss contingency accruals for fiscal 2025. Our evaluation of whether loss contingencies exist primarily relates to litigation matters.
The outcome of litigation is uncertain due to, among other things, uncertainties regarding the facts that will be established during
the proceedings, uncertainties regarding how the law will be applied to the facts established, and uncertainties regarding the
calculation of any potential damages or the costs of any potential injunctive relief. If the facts discovered or the Company’s
assumptions change, future accruals for loss contingencies may be required. Results of operations may be materially affected by
losses or a loss contingency accrual resulting from adverse legal proceedings.
Income Taxes
We determine our effective tax rate by estimating our permanent differences resulting from differing treatment of items for tax
and accounting purposes. Judgment and uncertainty exist with management’s application of tax regulations and evaluation of the
more-likely-than -not recognition and measurement thresholds. We are periodically audited by taxing authorities. An adverse tax
settlement could have a negative impact on our effective tax rate and our results of operations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
COMMODITY PRICE RISK
Our primary exposure to market risk arises from changes in the prices of conventional shell eggs, which are subject to significant
price fluctuations that are largely beyond our control. We are focused on diversifying our egg-based platform that extends beyond
conventional shell eggs and enhances our earnings profile and resilience across market cycles.
Our exposure to market risk also includes changes in the prices of corn and soybean meal, which are commodities subject to
significant price fluctuations due to market conditions that are largely beyond our control. To ensure continued availability of
feed ingredients, we may enter into contracts for future purchases of corn and soybean meal, and as part of these contracts, we
may lock-in the basis portion of our grain purchases several months in advance and commit to purchase organic ingredients to
help assure supply. Ordinarily, we do not enter long-term contracts beyond a year to purchase corn and soybean meal or hedge
against increases in the price of corn and soybean meal. The following table outlines the impact of price changes for corn and
soybean meal on feed costs per dozen as feed ingredient pricing varies:
Change in price per bushel of corn
$
(0.84)
$
(0.56)
$
(0.28)
$
0.00
$
0.28
$
0.56
$
0.84
Change
per ton
soybean
meal
$
(76.50)
0.42
0.43
0.44
0.45
0.46
0.47
0.48
$
(51.00)
0.43
0.44
0.45
0.46
0.47
0.48
0.49
$
(25.50)
0.44
0.45
0.46
0.47
0.48
0.49
0.50
$
0.00
0.45
0.46
0.47
0.48
(a)
0.49
0.50
0.51
$
25.50
0.46
0.47
0.48
0.49
0.50
0.51
0.52
$
51.00
0.47
0.48
0.49
0.50
0.51
0.52
0.53
$
76.50
0.48
0.49
0.50
0.51
0.52
0.53
0.54
(a)
Based on 2026 actual costs, table flexes feed cost inputs to show $0.01 impacts to per dozen egg feed production costs.
39
INTEREST RATE RISK
We have
a $
250 million Credit Facility, borrowings under which would bear interest at variable rates. No amounts were
outstanding under the Credit Facility during fiscal 2026 or fiscal 2025. Under our current policies, we do not use interest rate
derivative instruments to manage our exposure to interest rate changes.
FIXED INCOME SECURITIES RISK
At May 30, 2026 , the effective maturity of our cash equivalents and investment securities available for sale was 11.3 months, and
the composite credit rating of the holdings are A+ / A1 / A+ (S&P / Moody’s / Fitch). Generally speaking, rising interest rates
decrease the value of fixed income securities portfolios. As of May 30, 2026, the estimated fair value of our fixed income
securities portfolio was approximately $816.8 million and reflected net unrealized losses of approximately $953 thousand. For
additional information see
Available -for-Sale” and
Statements.
CONCENTRATION OF CREDIT RISK
Our financial instruments exposed to concentrations of credit risk consist primarily of trade receivables. Concentrations of credit
risk with respect to receivables are limited due to our large number of customers and their dispersion across geographic areas,
except that at May 30, 2026 and May 31, 2025 , 26.2% and 28.1%, respectively, of our net accounts receivable balance was due
from Walmart Inc. (including Sam’s Club). No other single customer or customer group represented 10% or greater of net
accounts receivable at May 30, 2026 and May 31, 2025.
40
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
Board of Directors and Stockholders
Cal -Maine Foods, Inc. and Subsidiaries
Ridgeland, Mississippi
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Cal -Maine Foods, Inc. and Subsidiaries as of May 30, 2026
and May 31, 2025, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows
for each of the three years in the period ended May 30, 2026, and the related consolidated notes and schedule listed in the Index
at Items 15(a)(1) and 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated
financial statements present fairly, in all material respects, the financial position of Cal -Maine Foods, Inc. and Subsidiaries as of
May 30, 2026 and May 31, 2025, and the results of their operations and their cash flows for each of the three years in the period
ended May 30, 2026, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), the Cal -Maine Foods, Inc. and Subsidiaries’ internal control over financial reporting as of May 30, 2026, based on
the criteria established in
2013 Internal Control – Integrated Framework
of the Treadway Commission and our report dated July 22, 2026 expressed an unqualified opinion.
Basis for Opinion
These consolidated financial statements are the responsibility of the entities’ management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to Cal -Maine Foods, Inc. and Subsidiaries in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the consolidated financial statements. We believe our audits provide a reasonable
basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial
statements that were communicated or required to be communicated to the Audit Committee and that: (1) relate to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or
complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate
opinion on the critical audit matters or on the accounts or disclosures to which they relate.
Contingent Liabilities – Litigation and Claims – Refer to Note 16 in the Consolidated Financial Statements
Critical Audit Matter Description
Cal -Maine Foods, Inc. and Subsidiaries record liabilities for legal proceedings and claims in those instances where they can
reasonably estimate the amount of the loss and when the liability is probable. Where the reasonable estimate of the probable loss
is a range, Cal -Maine Foods, Inc. and Subsidiaries record the most likely estimate of the loss, or the low end of the range if there
is no one best estimate. Cal -Maine Foods, Inc. and Subsidiaries either disclose the amount of a possible loss or range of loss in
excess of established accruals if estimable, or states that such an estimate cannot be made. Cal -Maine Foods, Inc. and Subsidiaries
41
disclose significant legal proceedings and claims even where liability is not probable or the amount of the liability is not estimable,
or both, if Cal -Maine Foods, Inc. and Subsidiaries believe there is at least a reasonable possibility that a loss may be incurred.
We identified litigation and claims as a critical audit matter because of the challenges auditing management’s judgments applied
in determining the likelihood of loss related to the resolution of such claims. Specifically, auditing management’s determin
at
ion
of whether any contingent loss arising from the related litigation and claims is probable, reasonably possible, or remote, and the
related disclosures, is subjective and requires significant judgment due to the sensitivity of the issue.
How the Critical Audit Matter was addressed during the Audit
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of the controls relating to
the Cal -Maine Foods, Inc. and Subsidiaries’ evaluation of the liability related to legal proceedings and claims, including controls
over determining the likelihood of a loss and whether the amount of loss can be reasonably estimated, as well as financial
stat ement disclosures over the legal proceedings and claims. These procedures also included obtaining and evaluating the letters
of audit inquiry with external legal counsel, evaluating the reasonableness of Cal -Maine Foods, Inc. and Subsidiaries’ assessment
regarding whether an unfavorable outcome is reasonably possible or probable, and reasonably estimable, evaluating the
sufficiency of Cal -Maine Foods, Inc. and Subsidiaries’ disclosures related to legal proceedings and claims and evaluating the
completeness and accuracy of Cal -Maine Foods, Inc. and Subsidiaries’ legal contingencies.
Acquisition of Echo Lake Foods, LLC – Estimated for Valuation of Acquired Intangible Assets – Refer to Note 2 in the
Consolidated Financial Statements
Critical Audit Matter Description
Cal -Maine Foods, Inc. and Subsidiaries completed the acquisitions of Echo Lake Foods, LLC and certain related companies,
effective June 2, 2025 for a total net consideration of approximately $275 million. Cal -Maine Foods, Inc. and Subsidiaries
accounted for the acquisitions of Echo Lake Foods, LLC and certain related companies as a business combination, and
accordingly, allocated the purchase price to the assets acquired and liabilities assumed based on their respective estimated fair
values as of the date of the acquisition. Identifiable intangible assets acquired included customer relationships, trade names,
brand names, contracts and non-compete agreements. The excess of the purchase consideration over the fair value of identifiable
assets acquired and liabilities assumed was recorded as goodwill. The valuation of acquired intangible assets requires significant
management judgment due to the use of valuation models that incorporate unobservable inputs. In particular, the fair value
estimates are sensitive to assumptions such as projected revenue, growth rates, customer attrition, discount rates, and contributory
asset charges, which require significant estimation.
We identified the valuation of acquired intangible assets as a critical audit matter because of the significant auditor judgment
required to evaluate the reasonableness of management’s assumptions and the complexity involved in assessing the valuation
meth odologies utilized.
How the Critical Audit Matter was addressed during the Audit
Our audit procedures related to the valuation of acquired intangible assets included the following, among others:
●
Testing controls over Cal -Maine Foods, Inc. and Subsidiaries acquisition accounting process, including controls over
the development and review of key assumptions used in the valuation of intangible assets
●
Evaluating the valuation methodologies used by management and its third-party valuation specialists, including
assessing whether the methods were appropriate and consistent with applicable valuation guidance.
●
Assessing key assumptions used in the valuation models, including:
o
Projected revenue growth rates
o
Customer attrition rates
o
Discount rates
o
Contributory asset charges, by comparing them to historical performance, market data, and industry
benchmarks
●
Involving a fair value specialist to assist in evaluating the methodologies and significant assumptions used in the
valuation models.
●
Evaluating the mathematical accuracy of the valuation models and recalculating selected fair values.
●
Assessing the competence, capabilities, and objectivity of management’s third-party valuation specialists.
42
We have served as the Company’s auditor since 2007.
Little Rock, Arkansas
July 22, 2026
43
Cal-Maine Foods, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except for par value amounts)
May 30, 2026
May 31, 2025
Assets
Current assets:
Cash and cash equivalents
$
$
Investment securities available -for-sale
Receivables:
Trade receivables, net
Income tax receivable
Other
Total receivables, net
Inventories, net
Prepaid expenses and other current assets
Total current assets
Property, plant & equipment, net
Goodwill
Intangible assets, net
Other assets
Total assets
$
$
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable
$
$
Dividends payable
Accrued wages and benefits
Accrued expenses and other current liabilities
Total current liabilities
Other liabilities
Deferred income taxes
Total liabilities
Commitments and contingencies - see
Note 16
—
—
Stockholders’ equity:
Common stock ($
Common stock – authorized
Paid-in capital
Retained earnings
Accumulated other comprehensive loss, net of tax
(1,466 )
(1,007 )
Common stock in treasury, at cost –
(217,767 )
(85,893 )
Total Cal -Maine Foods, Inc. stockholders’ equity
Noncontrolling interest in consolidated equity
Total stockholders’ equity
Total liabilities and stockholders’ equity
$
$
See Notes to Consolidated Financial Statements.
44
Cal-Maine Foods, Inc. and Subsidiaries
Consolidated Statements of Income
(in thousands, except per share amounts)
Fiscal years ended
May 30, 2026
May 31, 2025
June 1, 2024
52 weeks
52 weeks
52 weeks
Net sales
$
$
$
Cost of sales
Gross profit
Selling, general and administrative
(Gain) loss on involuntary conversions
(8,819 )
(23,532 )
(Gain) loss on disposal of fixed assets
(259 )
Operating income
Other income (expense):
Interest income, net
Patronage dividends
Other, net
Total other income
Income before income taxes
Income tax expense
Net income
Less: Income (loss) attributable to noncontrolling interest
(1,816 )
(1,606 )
Net income attributable to Cal -Maine Foods, Inc.
$
$
$
Net income per share attributable to Cal -Maine Foods, Inc.:
Basic
$
$
$
Diluted
$
$
$
Weighted average shares outstanding:
Basic
Diluted
See Notes to Consolidated Financial Statements.
45
Cal-Maine Foods, Inc. and Subsidiaries
Consolidated Statements of
Comprehensive Income
(in thousands)
Fiscal years ended
May 30, 2026
May 31, 2025
June 1, 2024
Net income
$
$
$
Other comprehensive income (loss), before tax:
Unrealized holding gain (loss) available -for-sale securities, net of
reclassification adjustments
(693 )
Decrease in accumulated post-retirement benefits obligation, net of
reclassification adjustments
Other comprehensive income (loss), before tax
(623 )
Income tax expense (benefit) related to items of other comprehensive income
(loss)
(164 )
Other comprehensive income (loss), net of tax
(459 )
Comprehensive income
Less: comprehensive income (loss) attributable to the noncontrolling interest
(1,816 )
(1,606 )
Comprehensive income attributable to Cal -Maine Foods, Inc.
$
$
$
See Notes to Consolidated Financial Statements.
46
Cal-Maine Foods, Inc. and Subsidiaries
Consolidated Statements of Stockholders’ Equity
(in thousands)
Accum.
Other
Common Stock
Comp.
Shares
Amount
Class A
Shares
Class A
Amount
Treasury
Shares
Treasury
Amount
Paid In
Capital
Retained
Earnings
Income
(loss)
Noncontrolling
Interest
Total
Balance at June 3, 2023
$
$
$
(30,008 )
$
$
$
(2,886 )
$
(1,498 )
$
Stock compensation plan transactions
—
—
—
—
(55 )
(1,589 )
—
—
—
Dividends ($
Common
—
—
—
—
—
—
—
(83,565 )
—
—
(83,565 )
Class A common
—
—
—
—
—
—
—
(9,040 )
—
—
(9,040 )
Net income (loss)
—
—
—
—
—
—
—
—
(1,606 )
Other comprehensive income, net of tax
—
—
—
—
—
—
—
—
—
Balance at June 1, 2024
—
(31,597 )
(1,773 )
(3,104 )
Stock compensation plan transactions
—
—
—
—
(7 )
(3,900 )
—
—
—
Conversion of Class A Shares
(4,800 )
(48 )
—
—
—
—
—
—
—
Repurchase of Shares
—
—
—
—
(50,396 )
—
—
—
—
(50,396 )
Contributions to Crepini Foods LLC
—
—
—
—
—
—
—
—
—
Acquisition of noncontrolling interest in
MeadowCreek Foods LLC
—
—
—
—
—
—
—
(3,826 )
—
—
Dividends ($
Common
—
—
—
—
—
—
—
(378,062 )
—
—
(378,062 )
Class A common
—
—
—
—
—
—
—
(28,627 )
—
—
(28,627 )
Net income (loss)
—
—
—
—
—
—
—
—
(1,816 )
Other comprehensive income, net of tax
—
—
—
—
—
—
—
—
—
Balance at May 31, 2025
—
—
(85,893 )
(1,007 )
Stock compensation plan transactions
—
—
—
—
(59 )
(1,354 )
—
—
—
Repurchase of Shares
—
—
—
—
(130,520 )
—
—
—
—
(130,520 )
Dividends ($
Common
—
—
—
—
—
—
—
(117,502 )
—
—
(117,502 )
Contributions
—
—
—
—
—
—
—
—
—
Net income
—
—
—
—
—
—
—
—
Other comprehensive loss, net of tax
—
—
—
—
—
—
—
—
(459 )
—
(459 )
Balance at May 30, 2026
$
—
$
—
$
(217,767 )
$
$
$
(1,466 )
$
$
See Notes to Consolidated Financial Statements.
47
Cal-Maine Foods, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in thousands)
Fiscal year ended
May 30, 2026
May 31, 2025
June 1, 2024
Cash flows from operating activities:
Net income
$
$
$
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization
Deferred income taxes
(9,672 )
Stock compensation expense
Loss on change in fair value contingent consideration
Other operating activities, net
(4,425 )
(15,426 )
(6,908 )
Change in operating assets and liabilities, net of effects from acquisitions:
(Increase) decrease in trade receivables
(104,997 )
(27,570 )
(Increase) decrease in inventories
(34,978 )
(12,224 )
Increase (decrease) in accounts payable and current accrued expenses
(8,338 )
Net change in income taxes receivable and payable
(94,810 )
(45,946 )
Net changes in other operating assets and liabilities
(33,023 )
(5,334 )
(553 )
Net cash provided by operating activities
Cash flows from used in investing activities:
Purchases of investments
(648,915 )
(1,213,593 )
(573,565 )
Sales of investments
Acquisition of businesses, net of cash acquired
(427,794 )
(116,193 )
(53,746 )
Acquisition of Van's
(24,776 )
Investment in unconsolidated entities
(363 )
Distributions from unconsolidated entities
Purchases of property, plant and equipment
(151,220 )
(161,255 )
(147,116 )
Net proceeds from disposal of property, plant and equipment
Net cash used in investing activities
(503,884 )
(575,469 )
(412,586 )
Cash flows used in financing activities:
Principal payments on long-term debt
(2,481 )
Principal payments on finance lease
(214 )
Purchase of common stock by treasury
(131,124 )
(53,953 )
(1,688 )
Payments of dividends
(231,622 )
(330,290 )
(91,856 )
Net cash used in financing activities
(362,746 )
(386,724 )
(93,758 )
Increase (decrease) in cash, cash equivalents and restricted cash
(386,877 )
(54,946 )
Cash, cash equivalents and restricted cash at beginning of year
Cash, cash equivalents and restricted cash at end of year
$
$
$
See Notes to Consolidated Financial Statements.
48
Cal-Maine Foods, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 - Summary of Significant Accounting Policies
Nature of Operations
Cal -Maine Foods, Inc. (“we,” “us,” “our,” or the “Company”) is the largest egg company in the United States (“U.S.”) and a
leading player in the egg-based food industry. The Company’s shell egg portfolio spans the full egg value ladder —from
conventional to specialty, including cage-free, nutritionally enhanced, organic, brown, pasture -raised, and free-range eggs—
serving both retail and foodservice customers nationwide. Cal -Maine Foods also participates in the growing prepared foods sector,
with offerings such as pre-cooked egg patties, omelets, folded and scrambled egg formats, hard -cooked eggs, pancakes, waffles,
and specialty wraps. Our branded portfolio includes Eggland’s Best®, Land O’Lakes®, Farmhouse Eggs®, 4Grain®, Sunups®,
Van’s®, MeadowCreek Foods®, and Crepini®. We sell most of our products throughout much of the U.S. and aim to maintain
efficient, state -of-the-art operations located close to our customers. We were founded in 1957 and are headquartered in Ridgeland,
Mississippi.
Principles of Consolidation
The consolidated financial statements include the accounts of all wholly-owned subsidiaries and of majority -owned subsidiaries
over which we exercise control. All significant intercompany transactions and accounts have been eliminated in consolidation.
Fiscal Year
The Company’s fiscal year -end is on the Saturday closest to May 31. The fiscal years ending on May 30, 2026, May 31, 2025,
June 1, 2024 each included
Use of Estimates
The preparation of the consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”)
in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the
consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash
equivalents. We maintain bank accounts that are insured by the Federal Deposit Insurance Corporation up to $
. The
Company routinely maintains cash balances with certain financial institutions in excess of federally insured amounts. The
Company has not experienced any loss in such accounts. The Company manages this risk through maintaining cash deposits and
other highly liquid investments in high quality financial institutions.
Investment Securities Available-for-Sale
The Company has determined that its debt securities are available -for-sale investments and are classified as current because the
amounts invested are available for current operations. Available -for-sale securities are carried at fair value, based on quoted
market prices as of the balance sheet date, with unrealized gains and losses recorded in other comprehensive income. The
amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity and is recorded
in interest income. The Company regularly evaluates changes to the rating of its debt securities by credit agencies and economic
conditions to assess and record any expected credit losses through allowance for credit losses, limited to the amount that fair
value was less than the amortized cost basis. There was
The cost basis for realized gains and losses on available -for-sale securities is determined by the specific identification method.
Gains and losses are recognized in other income (expense) as “Other, net” in the Company’s Consolidated Statements of Income.
Interest and dividends on securities classified as available -for-sale are recorded in “Interest income , net” in the Company’s
Consolidated Statements of Income.
49
Trade Receivables
Trade receivables are stated at their carrying values, which include a reserve for credit losses. At May 30, 2026 and May 31,
2025, reserves for credit losses were $
based on an evaluation of each customer ’s financial condition and credit history. Collateral is generally not required. The
Company minimizes exposure to counter party credit risk through credit analysis and approvals, credit limits, and monitoring
procedures. In determining our reserve for credit losses, receivables are assigned an expected loss based on historical loss
information adjusted as needed for economic and other forward-looking factors. At May 30, 2026 and May 31, 2025,
customer accounted for approximately
% and
% of the Company’s trade accounts receivable, respectively.
Inventories
Inventories of flocks, feed, supplies, raw materials and finished goods are valued principally at the lower of cost or net realizable
value. The cost of inventories is determined by either the first-in, first-out method or the weighted-average method.
The cost associated with flocks, consisting principally of chicks, feed, labor, contractor payments and overhead costs, are
accumulated during a growing period of approximately
lives of the flocks, generally
one
. As the amortization period of the flocks is relatively short, disclosure of the gross
cost and accumulated amortization is omitted. Flock mortality is charged to cost of sales as incurred.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is provided by the straight-line method over the estimated useful
lives, which are
that significantly extend the useful life of the related assets are capitalized. Normal repairs and maintenance are expensed as
incurred. When property, plant, and equipment are retired, sold, or otherwise disposed of, the asset’s carrying amount and related
accumulated depreciation are removed from the accounts and any gain or loss is included in operations. When certain events or
changes in operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the
recoverability of the carrying amounts.
Investments in Unconsolidated Entities
The equity method of accounting is used when the Company can exert significant influence over an entity, but does not control
its financial and operating decisions. Under the equity method, original investments are recorded at cost and adjusted by the
Company’s share of undistributed earnings or losses of these entities. Equity investments without readily determinable fair values,
when the Company does not have the ability to exercise significant influence over the investee, are recorded at cost, less
impairment, plus or minus observable price changes.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired. Goodwill is
evaluated for impairment at least annually or more frequently if impairment indicators arise by first performing a qualitative
assessment to determine whether a quantitative goodwill test is necessary. After assessing the totality of events or circumstances,
if we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we perform
additional quantitative tests to determine the magnitude of any impairment.
Intangible Assets
Intangible assets are initially recorded at fair value in business acquisitions, which include franchise rights, customer relationships,
non-compete agreements, trademarks and right of use intangibles. They are amortized over their estimated useful lives of
years. The gross cost and accumulated amortization of intangible assets are removed when the recorded amounts are fully
amortized and the asset is no longer in use or the contract has expired. When certain events or changes in operating conditions
occur, asset lives may be adjusted and an impairment assessment may be performed on the recoverability of the carrying amounts.
Indefinite life assets are recorded at fair value in business acquisitions and represent brand names and water rights. They are not
amortized, but are reviewed for impairment at least annually or more frequently if impairment indicators arise.
50
Insurance Liabilities and Restricted Cash
The Company uses a combination of insurance and self-insurance programs, including a wholly-owned captive insurance
subsidiary (the “Captive”) to provide coverage for the potential liabilities for workers’ compensation, auto liability and general
liability risks. Liabilities associated with these risks that are retained by the Company are not discounted and are estimated, in
part, by considering historical claims experience, severity factors and other actuarial assumptions. These liabilities are recorded
within “Accrued expenses and other current liabilities” in the Company’s Consolidated Balance Sheets and were $
and $
The Captive maintains certain levels of cash and cash equivalents which are restricted in use to secure the insurer’s obligations
for workers’ compensation, auto liability and general liability programs. Restricted cash was $
May 30, 2026 and May 31, 2025, respectively, and is recorded within “Prepaid expenses and other current assets ” in the
Company’s Consolidated Balance Sheets.
The Company also maintains medical plans covering substantially all full-time employees. Under the plan, the Company self-
insures its portion of medical claims and uses stop-loss insurance to limit its portion of medical claims to $
Liabilities associated with these risks are estimated in part by considering historical claims experience, medical cost trends,
demographic factors, severity factors and other actuarial assumptions. The Company’s expenses including accruals for incurred
but not reported claims were approximately $
respectively. The liability recorded for incurred but not reported claims was $
and May 31, 2025, respectively and are classified within “Accrued expenses and other current liabilities” in the Company’s
Consolidated Balance Sheets.
Dividends Payable
Dividends are accrued at the end of each quarter according to the Company’s dividend policy adopted by its Board of Directors
(“Board”) . The Company pays a dividend to stockholders of its Common Stock on a quarterly basis for each quarter for which
the Company reports net income attributable to Cal-Maine Foods, Inc. , computed in accordance with GAAP, in an amount equal
to
one-third
day of such quarter, except for the fourth fiscal quarter. For the fourth quarter, the Company pays dividends to stockholders of
record on the 65th day after the quarter end. Dividends are payable on the 15th day following the record date. Following a quarter
for which the Company does not report net income attributable to Cal -Maine Foods, Inc., the Company will not pay a dividend
for a subsequent profitable quarter until the Company is profitable on a cumulative basis computed from the date of the most
recent quarter for which a dividend was paid. The dividend policy is subject to periodic review by the Board. In accordance with
our variable dividend policy, we will not pay a cash dividend to holders of our Common Stock with respect to our fourth quarter
of fiscal 2026.
Revenue Recognition
The Company recognizes revenue through sale of its products to customers through retail, foodservice and other distribution
channels. The majority of the Company’s revenue is derived from agreements or contracts with customers based upon the
customer ordering its products with a single performance obligation of delivering the product. The Company believes the
performance obligation is met upon delivery and acceptance of the product by our customers, which generally occurs upon
shipment or delivery to a customer based on terms of the sale. Costs paid to third party brokers to obtain agreements are expensed
as the Company’s agreements are generally less than one year.
Revenues are recognized in an amount that reflects the net consideration we expect to receive in exchange for delivery of the
products. The Company periodically offers sales incentives or other programs such as rebates, discounts, coupons, volume -based
incentives, guaranteed sales and other programs. The Company records an estimated allowance for costs associated with these
programs, which is recorded as a reduction in revenue at the time of sale using historical trends and projected redemption rates
of each program. The Company regularly reviews these estimates and any difference between the estimated costs and actual
realization of these programs would be recognized the subsequent period.
Shipping and Distribution
Costs to deliver product to customers are included in selling, general and administrative expenses in the accompanying
Consolidated Statements of Income and totaled $
2024, respectively.
51
Income Taxes
Income taxes are accounted for using the liability method. Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
income tax purposes. The Company’s policy with respect to evaluating uncertain tax positions is based upon whether management
believes it is more likely than not the uncertain tax positions will be sustained upon review by the taxing authorities. The tax
positions must meet the more-likely-than -not recognition threshold with consideration given to the amounts and probabilities of
the outcomes that could be realized upon settlement using the facts, circumstances and information at the reporting date. The
Company will reflect only the portion of the tax benefit that will be sustained upon resolution of the position and applicable
interest on the portion of the tax benefit not recognized. The Company initially and subsequently measures the largest amount of
tax benefit that is greater than 50% likely to be realized upon settlement with a taxing authority that has full knowledge of all
relevant information. The Company records interest and penalties on uncertain tax positions as a component of income tax
expense. Based upon management’s assessment, there are no uncertain tax positions expected to have a material impact on the
Company’s consolidated financial statements.
Business Combinations
The Company applies the acquisition method of accounting, which requires that once control is obtained, all the assets acquired
and liabilities assumed, including amounts attributable to noncontrolling interests, are recorded at their respective fair values at
the date of acquisition. The excess of the purchase price over fair values of identifiable assets and liabilities is recorded as
goodwill.
We use various models and methods to determine the fair values of identifiable assets and liabilities, such as top-down and
bottom-up approach for inventory, cost method and market approach for property, relief-from-royalty and multi-period excess
earnings to value intangibles. Significant estimates in valuing certain intangible assets include, but are not limited to, the amount
and timing of future cash flows, growth rates, discount rates and useful lives.
Gain (Loss) on Involuntary Conversions
The Company maintains insurance for both property damage and business interruption relating to catastrophic events, such as
fires, hurricanes, tornadoes and other acts of God, and is eligible to participate in U.S. Department of Agriculture (“USDA”)
indemnity and compensation programs for certain losses due to disease outbreaks such as highly pathogenic avian influenza
(“HPAI”). Specifically, the Animal Health Protection Act authorizes the USDA to provide indemnity payments to producers for
birds and eggs that must be destroyed during a disease response. Payments received under these programs are based on the fair
market value of the poultry and/or eggs at the time that HPAI virus is detected in the flock. Other covered costs include feed,
depopulation and disposal costs, and virus elimination costs. The USDA does not provide indemnity for income or production
losses suffered due to downtime or other business disruptions nor for indirect continuing expenses. Recoveries received for
property damage, business interruption and disease outbreaks in excess of or less than the net book value of damaged assets,
including poultry, clean-up and demolition costs, and other direct post-event costs are recorded within “Gain (loss) on involuntary
conversions” in the period received or committed when all contingencies associated with the recoveries are resolved.
Loss Contingencies
Certain conditions may exist as of the date the consolidated financial statements are issued that may result in a loss to the Company
but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal
counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss
contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such
proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well
as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability
can be estimated, the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment
indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated,
then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material,
would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which
case the nature of the guarantee would be disclosed.
The Company expenses the costs of litigation as they are incurred.
52
New Accounting Pronouncements and Policies
In December 2023, the FASB issued ASU 2023 -09,
. This
ASU requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate
reconciliation and income taxes paid. The ASU is intended to enhance the transparency and decision usefulness of income tax
disclosures. ASU 2023 -09 is effective for fiscal periods beginning after December 15, 2024. The Company has adopted ASU
2023-09 for the year ended May 30, 2026, on a prospective basis. See
In November 2024, the FASB issued ASU 2024 -03,
Income Statement
—
Reporting Comprehensive Income
—
Expense
Disaggregation Disclosures (Subtopic 220-40)
. The objective of ASU 2024 -03 is to improve disclosures about a public entity’s
expenses, primarily through additional disaggregation of income statement expenses. Additionally, in January 2025, the FASB
further clarified the effective date of ASU 2024 -03 with the issuance of ASU 2025 -01. ASU 2024 -03 is effective for annual
periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15,
2027. Early adoption is permitted and may be applied either on a prospective or retrospective basis. The Company is currently
evaluating the impact of ASU 2024-03 on its consolidated financial statement disclosures.
There are no other new accounting pronouncements issued or effective during the fiscal year that had or are expected to have
a
material impact on our consolidated financial statements.
Note 2 – Acquisition s
Acquisition of Creighton Brothers, LLC
Effective on
, the Company acquired the shell egg, egg products, and prepared foods assets of Creighton Brothers
LLC and including Crystal Lake LLC (“Creighton”). The acquired assets include commercial shell egg production and grading
with capacity of approximately
The following table summarizes the consideration paid for Creighton and the value of assets acquired and liabilities assumed
recognized at the acquisition date (in thousands):
Cash consideration paid
$
Recognized amounts of identifiable assets acquired and liabilities assumed
Inventories
$
Prepaid expenses and other current assets
Property, plant & equipment
Intangible assets, net
Accounts payable and other current liabilities
(553 )
Total identifiable net assets
Goodwill
$
Inventories consisted primarily of flock, feed ingredients, packaging, and egg inventory. Flock inventory was valued at carrying
value as management believes that its carrying value best approximates its fair value. Feed ingredients, packaging and egg
inventory were all valued based on market prices as of March 2, 2026.
53
Property, plant and equipment were valued utilizing the cost approach and market approach. Machinery and equipment were
valued utilizing the cost approach which is based on replacement or reproduction costs of the assets and subtracting any
depreciation resulting from physical deterioration and/or functional or economic obsolescence. Land and buildings were valued
utilizing the market approach by using a real estate valuation.
Goodwill recorded in connection with the Creighton acquisition is primarily attributable to improved efficiencies from integrating
the assets of Creighton with the operations of the Company. The Company recognized goodwill of $
the acquisition.
Acquisition of Clean Egg, LLC
Effective
, the Company acquired certain assets of Clean Egg, LLC (“Clean Egg”) based in Langwood, Texas,
for approximately $
and other inventory, machinery and equipment related to its contract production and egg processing business. The Company
recognized goodwill of $
combination.
Acquisition of Echo Lake Foods, LLC
Effective
, the Company acquired Echo Lake Foods, LLC and certain related companies (collectively “Echo Lake
Foods”). Echo Lake Foods is based in Burlington, Wisconsin and produces, packages, markets and distributes prepared foods,
including pre-cooked egg patties, omelets, folded and scrambled egg formats, pancakes and waffles. The Company accounted for
the acquisition as a business combination.
54
The Company finalized the business combination accounting during the second quarter of fiscal 2026, which resulted in
immaterial measurement period adjustments. The following table summarizes the consideration paid for Echo Lake Foods and
the value of assets acquired and liabilities assumed recognized at the acquisition date (in thousands):
Cash consideration paid
$
Recognized amounts of identifiable assets acquired and liabilities assumed
Cash
$
Investment securities available -for-sale
Accounts receivable
Inventories
Prepaid expenses and other current assets
Property, plant & equipment
Intangible assets
Accounts payable and other current liabilities
(14,114 )
Total identifiable net assets
Goodwill
$
Cash and accounts receivable acquired along with liabilities assumed were valued at their carrying value which approximates fair
value due to the short maturity of these instruments.
Inventories consisted primarily of raw materials, supplies and finished goods. Raw materials and supplies were valued at their
carrying value as management believes that their carrying value best approximates their fair value. Finished goods were valued
using both the bottom -up and top-down approach. The bottom -up approach measures the value of inventory as the value created
by the target company (i.e., the costs incurred, profit realized, and tangible and intangible assets utilized) pre-acquisition date.
The top-down approach measures the value of inventory as the incremental inventory value created by the market participant
buyer as part of its selling effort to an end customer (i.e., the costs that will be incurred, the profit that will be realized, and the
tangible and intangible assets that will be utilized) post-acquisition date.
Property, plant and equipment were valued utilizing the cost approach and market approach. Machinery and equipment were
valued utilizing the cost approach which is based on replacement or reproduction costs of the assets and subtracting any
depreciation resulting from physical deterioration and/or functional or economic obsolescence. Land and buildings were valued
utilizing the market approach by using a real estate valuation.
Intangible assets consisted primarily of customer relationships and a trade name. Customer relationships were valued using the
multi-period excess earnings method and the trade name was valued using the relief-from-royalty method.
Goodwill represents the excess of the purchase price of the acquired business over the acquisition date fair value of the net assets
acquired. Goodwill recorded in connection with the Echo Lake Foods acquisition is primarily attributable to projected synergies
from integrating the operations of Echo Lake Foods with the operations of the Company. The Company recognized goodwill of
$
The Company recorded transaction costs of $
of fiscal 2025, respectively, as a result of the Echo Lake Foods acquisition, within “Selling, general and administrative expenses”
in the Company’s Consolidated Statements of Income.
Acquisition of Deal-Rite Feeds, Inc. Assets
Effective
, the Company acquired certain assets of Deal-Rite Feeds, Inc. and certain of its affiliates (“Deal-Rite”)
for approximately $
55
equipment and a retail feed sales business located in North Carolina. The acquired assets will produce and deliver feed to our
nearby shell egg production facilities. The Company accounted for the acquisition as a business combination.
Property, plant and equipment were valued utilizing the cost approach which is based on replacement or reproduction costs of
the assets and subtracting any depreciation resulting from physical deterioration and/or functional or economic obsolescence.
Goodwill recorded in connection with the Deal-Rite acquisition is primarily attributable to improved efficiencies from integrating
the assets of Deal-Rite with the operations of the Company. The Company recognized goodwill of $
acquisition.
Acquisition of ISE America, Inc. Assets
Effective
, the Company acquired substantially all of the commercial shell egg production, processing and egg
products breaking facilities of ISE America, Inc. and certain of its affiliates (“ISE”). The assets acquired included commercial
shell egg production and processing facilities with a capacity at the time of acquisition of approximately
including
products breaking facility. The acquired assets also include an extensive customer distribution network across the Northeast and
Mid-Atlantic states, and production operations in Maryland, New Jersey, Delaware and South Carolina. The Company accounted
for the acquisition as a business combination.
The following table summarizes the consideration paid for the ISE assets and the amounts of assets acquired and liabilities
assumed recognized at the acquisition date (in thousands):
Cash consideration paid
$
Recognized amounts of identifiable assets acquired and liabilities assumed
Inventories
$
Property, plant and equipment
Intangible assets
Accounts payable and other current liabilities
(308 )
Total identifiable net assets
$
Inventories consisted primarily of flock, feed ingredients, packaging, and egg inventory. Flock inventory was valued at carrying
value as management believes that its carrying value best approximates its fair value. Feed ingredients, packaging and egg
inventory were all valued based on market prices as of June 28, 2024.
Property, plant and equipment were valued utilizing the cost approach which is based on replacement or reproduction costs of
the assets and subtracting any depreciation resulting from physical deterioration and/or functional or economic obsolescence.
Intangible assets consisted primarily of customer lists acquired. Customers lists were valued using the income method approac h.
Other Acquisitions and Investments
Effective
, the Company acquired certain assets of Van’s Foods business of Sara Lee Frozen Bakey, LLC (“Van’s”)
for approximately $
will support our prepared foods segment and deliver greater value across the supply chain. The Company accounted for the
acquisition as an asset acquisition.
Effective
, the Company completed a strategic investment with Crepini LLC, establishing a new egg products
and prepared foods venture. The new entity, located in Hopewell Junction, New York, operates as Crepini Foods LLC (“Crepini”).
The Company capitalized Crepini with approximately $
56
and fund working capital in exchange for a
% interest in the new venture. Crepini LLC contributed its existing assets and
business in exchange for a
% interest in the new venture.
Effective
, the Company acquired the remaining
% interest in our majority-owned subsidiary,
MeadowCreek Foods LLC.
Note 3 - Investment Securities Available-for-Sale
The following presents the Company’s investment securities available -for-sale as of May 30, 2026 and May 31, 2025 (in
thousands):
May 30, 2026
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Estimated Fair
Value
Municipal bonds
$
$
$
$
Commercial paper
Corporate bonds
Certificates of deposits
US government and agency obligations
Treasury bills
Total current investment securities
$
$
$
$
May 31, 2025
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Estimated Fair
Value
Municipal bonds
$
$
$
$
Commercial paper
Corporate bonds
Certificates of deposits
US government and agency obligations
Treasury bills
Total current investment securities
$
$
$
$
Actual maturities may differ from contractual maturities as some borrowers have the right to call or prepay obligations with or
without penalties. Contractual maturities of current investment securities at May 30, 2026 are as follows (in thousands):
Estimated Fair Value
Within one year
$
1-5 years
Total
$
Note 4 - Fair Value Measurements
The Company is required to categorize both financial and nonfinancial assets and liabilities based on the following fair value
hierarchy. The fair value of an asset is the price at which the asset could be sold in an orderly transaction between unrelated,
knowledgeable, and willing parties able to engage in the transaction. A liability’s fair value is defined as the amount that would
be paid to transfer the liability to a new obligor in a transaction between such parties, not the amount that would be paid to settle
the liability with the creditor.
●
Level 1
●
Level 2
directly or indirectly, including:
o
Quoted prices for similar assets or liabilities in active markets
o
Quoted prices for identical or similar assets in non-active markets
o
Inputs other than quoted prices that are observable for the asset or liability
o
Inputs derived principally from or corroborated by other observable market data
57
●
Level 3
significant to the fair value of the assets or liabilities
The disclosure of fair value of certain financial assets and liabilities that are recorded at cost are as follows:
Cash and Cash Equivalents, Accounts Receivable, and Accounts Payable
The carrying amount approximates fair value due to the short maturity of these instruments.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
In accordance with the fair value hierarchy described above, the following table shows the fair value of our financial assets and
liabilities that are required to be measured at fair value on a recurring basis as of May 30, 2026 and May 31, 2025 (in thousands
):
May 30, 2026
Level 1
Level 2
Level 3
Balance
Investment securities available -for-sale
Municipal bonds
$
$
$
$
Commercial paper
Corporate bonds
Certificates of deposits
US government and agency obligations
Treasury bills
Total investment securities available -for-sale
measured at fair value
$
$
$
$
Liabilities
Contingent consideration
Total liabilities measured at fair value
$
$
$
$
May 31, 2025
Level 1
Level 2
Level 3
Balance
Investment securities available -for-sale
Municipal bonds
$
$
$
$
Commercial paper
Corporate bonds
Certificates of deposits
US government and agency obligations
Treasury bills
Total investment securities available -for-sale
measured at fair value
$
$
$
$
Liabilities
Contingent consideration
Total liabilities measured at fair value
$
$
$
$
Investment securities – available -for-sale are all classified as Level 2 and consist of securities with maturities of three months or
longer when purchased. We classified these securities as current because amounts invested are readily available for current
operations. Observable inputs for these securities are yields, credit risks, default rates, and volatility.
Contingent consideration classified as Level 3 consists of the potential obligation to pay an earnout to Fassio Egg Farms, Inc.
(“Fassio”) contingent on the acquired business meeting certain return on profitability milestones over a three-year period that
commenced on the date of the acquisition in the second quarter of fiscal 2024. The fair value of the contingent consideration is
estimated using a discounted cash flow model. Key assumptions and unobservable inputs that require significant judgment used
in the estimate include weighted average cost of capital, egg prices, projected revenue and expenses over the period for which
the contingent consideration is measured, and the probability assessments with respect to the likelihood of achieving the
forecaste d projections.
58
The following table shows the beginning and ended balances in fair value for the contingent consideration:
Fassio Contingent Consideration
Balance, June 4, 2023
$
Acquisition of Fassio
Fair value adjustments
Balance, June 1, 2024
Fair value adjustments
Balance, May 31, 2025
Fair value adjustments
Balance, May 30, 2026
$
At May 30, 2026, the contingent consideration is recorded with accrued expenses and other current liabilities in the consolidated
balance sheets. Adjustments to the fair value of contingent consideration are recorded within the selling, general and
administrative expenses in the consolidated statements of income.
Note 5 - Inventories
Inventories consisted of the following (in thousands):
May 30, 2026
May 31, 2025
Flocks, net of amortization
$
$
Feed and supplies
Raw materials and finished goods inventory
$
$
We grow and maintain flocks of layers (mature female chickens), pullets (female chickens under 18 weeks of age), and breeders
(male and female chickens used to produce fertile eggs to hatch for egg production flocks). Our total flock at May 30, 2026 and
May 31, 2025, consisted of approximately
layers, respectively.
The Company expensed amortization and mortality associated with the flocks to cost of sales as follows (in thousands):
May 30, 2026
May 31, 2025
June 1, 2024
Amortization
$
$
$
Mortality
Total flock costs charged to cost of sales
$
$
$
Note 6 - Property, Plant and Equipment
Property, plant and equipment consisted of the following (in thousands):
May 30, 2026
May 31, 2025
Land and improvements
$
$
Buildings and improvements
Machinery and equipment
Construction -in-progress
Less: accumulated depreciation
$
$
Depreciation expense was $
and June 1, 2024, respectively.
59
Note 7 - Investment in Unconsolidated Entities
As of May 30, 2026 and May 31, 2025, the Company owned
% of Specialty Eggs, LLC (“Specialty Eggs”) and of Southwest
Specialty Eggs, LLC (“Southwest Specialty Eggs”), which are accounted for using the equity method of accounting. Specialty
Eggs owns the Egg-Land’s Best franchise for most of Georgia and South Carolina, as well as a portion of western North Carolina
and eastern Alabama. Southwest Specialty Eggs owns the Egg-Land’s Best franchise for Arizona, southern California and Clark
County, Nevada (including Las Vegas).
Equity method investments are included in “Other assets” in the accompanying Consolidated Balance Sheets and totaled
$
Equity in income (loss) of unconsolidated entities of a $
entities has been included in “Other, net” in the accompanying Consolidated Statements of Income for fiscal 2026, 2025, and
2024, respectively.
The following relates to the Company’s transactions with these unconsolidated affiliates (in thousands):
For the fiscal year ended
May 30, 2026
May 31, 2025
June 1, 2024
Sales to unconsolidated entities
$
$
$
Purchases from unconsolidated entities
Distributions from unconsolidated entities
May 30, 2026
May 31, 2025
Accounts receivable from unconsolidated entities
$
$
Accounts payable to unconsolidated entities
Note 8 - Goodwill and Other Intangible Assets
Goodwill
During the fourth quarter of fiscal 2026, the Company transitioned into its new reporting structure which resulted in changes to
the Company’s operating segments and reporting units. The goodwill of the Company’s historical reporting units were reallocat ed
to the new reporting units on a relative fair value basis as of the date of the reorganization. The Company assessed goodwill for
impairment immediately before and immediately after the reorganization and concluded that there was no goodwill impairment.
For more information regarding the changes to our reportable segments in the fourth quarter of fiscal 2026, refer to
The changes in the carrying amount of goodwill were (in thousands):
Consolidated
Business
Conventional
Shell Eggs
Specialty Shell
Eggs
Prepared Foods
Total
Balance June 1, 2024
$
$
—
$
—
$
—
$
Additions
—
—
Balance May 31, 2025
—
—
—
Additions
—
—
—
Balance March 2, 2026
—
—
—
Goodwill reallocation
(97,059 )
Balance May 30, 2026
$
$
$
$
$
60
Intangible Assets
The carrying amounts for indefinite-lived intangibles consisted of the following (in thousands):
May 30, 2026
May 31, 2025
Brand name
$
$
—
Water rights
Total
$
$
During fiscal 2026, the Company purchased the Van’s brand name as part of the asset acquisition. This intangible asset is
classified as an indefinite-lived brand name.
Intangible assets, net, subject to amortization, consisted of the following (in thousands):
Franchise rights
Customer relationships
Other intangibles
Total
Balance June 1, 2024
$
$
$
$
Additions
—
Amortization
(1,596 )
(353 )
(209 )
(2,158 )
Balance May 31, 2025
Additions
—
Amortization
(1,595 )
(3,555 )
(1,615 )
(6,765 )
Balance May 30, 2026
$
$
$
$
For intangible assets subject to amortization, the gross carrying amounts and accumulated amortization are as follows (in
thousands):
May 30, 2026
May 31, 2025
Gross carrying
Accumulated
Gross carrying
Accumulated
amount
amortization
amount
amortization
Amortizable intangible assets:
Franchise rights
$
$
(19,383 )
$
$
(19,093 )
Customer relationships
(4,300 )
(745 )
Other intangibles
(2,315 )
(700 )
Total
$
$
(25,998 )
$
$
(20,538 )
No significant residual value is estimated for these intangible assets. Aggregate amortization expense for fiscal years 2026, 2025,
and 2024 totaled $
and administrative expenses ” in the accompanying Consolidated Statements of Income.
The following table presents the total estimated amortization expense of intangible assets for the five succeeding years (in
thousands):
For fiscal year
Estimated amortization expense
2027
$
2028
2029
2030
2031
Thereafter
Total
$
61
Note 9 - Employee Benefit Plans
KSOP
The Company maintains a KSOP covering substantially all employees (the “Plan”). The Company contributes
% of eligible
compensation, plus discretionary amounts, with contributions vesting immediately. Cash contributions to the Plan were $
million, $
open market using Company contributions and dividends.
Deferred Compensation and Other Postretirement Plans
The Company maintains several deferred compensation and other postretirement plans for certain officers and a select group of
management and highly compensated employees of the Company. The liability recorded related to these agreements was $
million and $
current liabilities” and “Other liabilities” in the Company’s Consolidated Balance Sheets. The related expense for these plans
was $
Note 10 - Credit Facility
For fiscal years 2026, 2025 and 2024, interest expense was $
primarily related to commitment fees on the Credit Facility described below.
On November 15, 2021, we entered into an Amended and Restated Credit Agreement (as amended, the “Credit Agreement”) with
a
five-year
a
senior secured revolving credit facility (the
“Credit Facility” or “Revolver”) in an initial aggregate principal amount of up to $
sublimit for the issuance of standby letters of credit and a $
includes an accordion feature permitting, with the consent of BMO Harris Bank N.A. (the “Administrative Agent”), an increase
in the Credit Facility in the aggregate up to $
increasing one or more times the revolving commitments under the Revolver.
Facility as of May 30, 2026 or May 31, 2025 or during fiscal 2026 or fiscal 2025. The Company had $
standby letters of credit issued under the Credit Facility at May 30, 2026 .
On May 26, 2023, we entered into the First Amendment (the “First Amendment”) to the Credit Agreement, which replaced the
London Interbank Offered Rate interest rate benchmark with the secured overnight financing rate as administered by the Federa
l
Reserve Bank of New York or a successor administrator of the secured overnight financing rate (“SOFR”). The interest rate in
connection with loans made under the Credit Facility is based on, at the Company’s election, either the Adjusted Term SOFR
Rate plus the Applicable Margin or the Base Rate plus the Applicable Margin. The “Adjusted Term SOFR” means with respect
to any tenor, the per annum rate equal to the sum of (i) Term SOFR as defined in the Credit Agreement plus (ii)
% (10 basis
points); provided, if Adjusted Term SOFR determined as provided above shall ever be less than the Floor, then Adjusted Term
SOFR shall be deemed to be the Floor. The “Floor” means the rate per annum of interest equal to
%. The “Base Rate” means
a fluctuating rate per annum equal to the highest of (a) the federal funds rate plus
% per annum, (b) the prime rate of interest
established by the Administrative Agent, and (c) the Adjusted Term SOFR for a
one
-month tenor plus
%. The “Applicable
Margin” means
% to
% per annum for Base Rate Loans and
% to
% per annum for SOFR Loans, in each case
depending upon the Total Funded Debt to Capitalization Ratio for the Company at the quarterly pricing date. The Company will
pay a commitment fee on the unused portion of the Credit Facility payable quarterly from
% to
%, in each case depending
upon the Total Funded Debt to Capitalization Ratio for the Company at the quarterly pricing date.
On March 25, 2025, the Company entered into the Second Amendment (the “Second Amendment”) to the Credit Agreement.
Under the Credit Agreement, a Change of Control is an event of default. The Second Amendment amended the definition of
Change of Control to exclude from that definition the conversion (the “Class A Conversion”) of all outstanding shares of the
Company’s Class A Common Stock into Common Stock which occurred on April 14, 2025.
The Credit Facility is guaranteed by substantially all the current and future wholly-owned direct and indirect domestic subsidiaries
of the Company (the “Guarantors”), and is secured by a first-priority perfected security interest in substantially all of the
Company’s and the Guarantors’ accounts, payment intangibles, instruments (including promissory notes), chattel paper, inventory
(including farm products) and deposit accounts maintained with the Administrative Agent.
The Credit Agreement contains customary covenants, including restrictions on the incurrence of liens, incurrence of additiona
l
debt, sales of assets and other fundamental corporate changes and investments. The Credit Agreement requires maintenance of
62
two financial covenants: (i) a maximum Total Funded Debt to Capitalization Ratio tested quarterly of no greater than
%; and
(ii) a requirement to maintain Minimum Tangible Net Worth at all times of $
% of net income (if net income
is positive) less permitted restricted payments for each fiscal quarter after November 27, 2021. The Credit Agreement also
includes customary events of default and customary remedies upon the occurrence of an event of default, including acceleration
of the amounts due under the Credit Facility and foreclosure of the collateral securing the Credit Faci lity.
Further, under the terms of the Credit Agreement, payment of dividends under the Company ’s current dividend policy of one-
third of the Company ’s net income, computed in accordance with GAAP, and payment of other dividends or repurchases by the
Company of its capital stock is allowed, as long as after giving effect to such dividend payments or repurchases no default has
occurred and is continuing and the sum of cash and cash equivalents of the Company and its subsidiaries plus availability under
the Credit Facility equals at least $
At May 30, 2026, we were in compliance with the covenant requirements of the Credit Agreement.
Note
11
- Equity
On April 14, 2025, all
of the Class A Stock, the Company was no longer a controlled company under the rules of The Nasdaq Stock Market.
On February 25, 2025, the Board approved
a
$
the Company, in management’s discretion, to repurchase Common Stock from time to time for an aggregate purchase price up to
$
conditions and other factors. The actual timing, number and value of shares repurchased under the program will be determined
by management in its discretion and will depend on a number of factors, including, but not limited to, the market price of the
Common Stock and general market and economic conditions.
The Company repurchased
program. As of May 30, 2026, the Company had remaining authorization to purchase up to $
program.
Authorized preferred stock consists of
, of which
outstanding as of May 30, 2026 and May 31, 2025.
Note 12 - Net Income per Common Share
Basic net income per share attributable to Cal-Maine Foods, Inc. is based on the weighted average shares of Common Stock (and
when they were outstanding, shares of Class A Common Stock) outstanding. All shares of Class A Common Stock were converted
into Common Stock on April 14, 2025. Diluted net income per share attributable to Cal-Maine Foods, Inc. is based on weighted-
average Common Stock outstanding during the relevant period adjusted for the dilutive effect of share -based awards.
63
The following table provides a reconciliation of the numerators and denominators used to determine basic and diluted net income
per common share attributable to Cal-Maine Foods, Inc. (amounts in thousands, except per share data):
May 30, 2026
May 31, 2025
June 1, 2024
Numerator
Net income
$
$
$
Less: Net income (loss) attributable to noncontrolling interest
(1,816 )
(1,606 )
Net income attributable to Cal -Maine Foods, Inc.
$
$
$
Denominator
Weighted-average common shares outstanding, basic
Effect of dilutive securities of restricted shares
Weighted-average common shares outstanding, diluted
Net income per common share attributable to Cal -Maine Foods, Inc.
Basic
$
$
$
Diluted
$
$
$
Note 13 – Stock-Based Compensation
The Company’s stock-based compensation plan, the Amended and Restated Cal -Maine Foods, Inc. 2012 Omnibus Long -Term
Incentive Plan (the “LTIP Plan”), provides for the granting of equity -based awards such as restricted stock, performance stock
units and stock options . Awards may be granted under the LTIP Plan to any employee, any non -employee member of the Board,
and any consultant who is a natural person and provides services to us or one of our subsidiaries (except for incentive stock
options, which may be granted only to our employees). As of May 30, 2026, the total number of shares available for issuance
was
, and may be authorized but unissued shares or treasury shares. Common Stock issued from treasury shares under
the plan was
Restricted Stock
Restricted stock outstanding under the LTIP Plan vests
control, or retirement (subject to certain requirements). The restricted stock contains no other service or performance conditions.
Restricted stock is awarded in the name of the recipient and, except for the right of disposal, constitutes issued and outstanding
shares of the Company’s Common Stock for all corporate purposes during the period of restriction including the right to receive
dividends. Compensation expense is a fixed amount based on the grant date closing price and is amortized on a straight-line basis
over the vesting period. Forfeitures are recognized as they occur.
Total stock-based compensation expense related to the restricted stock was $
2026, 2025 and 2024, respectively.
Our unrecognized compensation expense as a result of non-vested shares was $
May 31, 2025 . The unrecognized compensation expense will be amortized to stock compensation expense over a period
of
years.
64
A summary of our activity and related information for our restricted stock is as follows:
Number of
Shares
Weighted Average Grant
Date Fair Value
Outstanding, June 1, 2024
$
Granted
Vested
(108,058 )
Forfeited
(4,879 )
Outstanding, May 31, 2025
$
Granted
Vested
(88,519 )
Forfeited
(5,063 )
Outstanding, May 30, 2026
$
Performance-Based Long-Term Incentive Awards
Effective June 1, 2025, the Company implemented a new performance -based long-term incentive award under our executive
compensation program, which provides for awards of performance share units (“PSUs”) to certain key executives. Pursuant to
these awards, certain officers have the opportunity to receive Common Shares after a three-year performance period contingent
on (a) the executive’s continued service through the performance period, except as otherwise provided in the award agreement,
and (b) the Company’s achievement of specific performance goals tied to the following two equally weighted measures: the
Company’s cumulative adjusted EBITDA and relative total stockholder return compared to a peer group. Depending on the level
of achievement of these two measures over the performance period, the PSUs will pay out between
% and
% of the target
award.
Total compensation expense as a result of the performance-based program was $
Our unrecognized compensation expense as a result of non-vested shares in the performance-based program was $
at May 30, 2026 . The unrecognized compensation expense will be amortized to stock compensation expense over a period
of
years.
A summary of our activity and related information for our performance-based awards is as follows:
Number of
Shares
Weighted Average Grant
Date Fair Value
Outstanding, May 31, 2025
$
Granted
Outstanding, May 30, 2026
$
65
Note 14 - Income Taxes
Income Tax Provision
The components of our income tax provision (benefit) were (in thousands):
Fiscal year ended
May 30, 2026
May 31, 2025
June 1, 2024
Current:
Federal
$
$
$
State
(4,220 )
Deferred:
Federal
(7,371 )
State
(1,133 )
(2,301 )
(9,672 )
Total income tax provision
$
$
$
Deferred Taxes
The tax effects of significant temporary differences creating deferred tax assets and liabilities were (in thousands):
May 30, 2026
May 31, 2025
Deferred tax assets:
Accrued expenses
$
$
State operating loss carryforwards
Other comprehensive income
Right of use - asset
Other
Total deferred tax assets
Deferred tax liabilities:
Property, plant and equipment
$
(180,377 )
$
(128,789 )
Inventories
(49,478 )
(35,041 )
Investment in affiliates
(1,618 )
(2,205 )
Right of use - liability
(3,358 )
(240 )
Other
(8,244 )
(6,245 )
Total deferred tax liabilities
(243,075 )
(172,520 )
Net deferred tax liabilities
$
(221,872 )
$
(154,651 )
The company had income tax net operating loss carryforwards related to its state operations of approximately $
May 30, 2026. The loss carryforwards are not subject to expiration.
On July 4, 2025, H.R. 1, informally known as the One Big Beautiful Bill Act ("The Tax Act"), was enacted. The Tax Act extends
and makes permanent several key provisions of the Tax Cuts and Jobs Act of 2017 previously set to expire as of December 31,
2025. The impacts of the Tax Act are reflected in our results for the year ended May 30, 2026, and had no material impact on our
income tax expense or effective tax rate.
Reconciliation of the U.S. Federal Statutory Rate to the Effective Rate
The Company has elected to prospectively adopt the guidance in ASU 2023 -09,
Income Taxes (Topic 740): Improvements to
Income Taxes Disclosures
. The following table is a reconciliation of the U.S. federal statutory tax rate to the total effective tax
rates for the year ended May 30, 2026 in accordance with the guidance in ASU 2023-09 (in thousands):
66
Fiscal year end May 30, 2026
Amount
Percent
U.S. federal statutory tax rate
$
%
State and local income taxes*
Tax credits
(251 )
(0.1 )
Nontaxable or nondeductible items
Provision for income taxes
$
%
*State taxes in Georgia, Florida, Mississippi, and Texas made up the majority (greater than 50%) of the tax effect in this category.
The following table is a reconciliation of the
U.S.
31, 2025 and June 1, 2024 in accordance with guidance prior to the adoption of ASU 2023-09 (in thousands):
Fiscal year end
May 31, 2025
June 1, 2024
Statutory federal income tax
$
$
State income taxes, net
Other, net
$
$
Income Tax Payments
The following table is a summary of income taxes paid (net of refunds) by jurisdiction pursuant to the disclosure requirements of
ASU 2023-09 for the year ended May 30, 2026 (in thousands):
Fiscal year end
May 30, 2026
Federal
$
State
Income tax payments
$
We paid income taxes, net of refunds, of $
2024, respectively.
As of May 30, 2026, we had
or 2025 related to uncertain tax positions.
We are subject to income tax in many jurisdictions within the U.S. We are currently not under audit by the Internal Revenue
Service or by any state and local tax authorities. Tax periods for all years beginning with fiscal year 2021 remain open to
examination by federal and state taxing jurisdictions to which we are subject.
Note 15 – Segment Reporting
The Company previously managed its business as
the Company revised its internal reporting to change the manner in which its business is managed, which reflects a focus on
managing operations based on the Company’s product categories rather than on a consolidated basis. As a result, the Company
identified three reportable segments: Conventional Shell Eggs, Specialty Shell Eggs, and Prepared Foods. The Company’s
remaining operations , which include co-pack shell eggs, egg products, hard -cooked eggs and other business activities, are not
reportable segments, as defined by the applicable accounting standard . All prior fiscal year periods have been recast to reflect the
new reportable segments .
Conventional Shell Eggs
The Conventional Shell Eggs segment consists primarily of the production, grading, packaging, marketing and
distribution of shell eggs sold as conventional shell eggs, which includes our brands
Sunups®
and
Sunny Meadow®.
67
Specialty Shell Eggs
The Specialty Shell Eggs segment consists primarily of the production, grading, packaging, marketing and distribution
of shell eggs sold as cage -free, nutritionally enhanced, organic, brown, pasture -raised and free-range eggs. This segment
includes our brands
Farmhouse Eggs
® and
4Grain®
as well as branded products from our membership of Eggland’s
Best, Inc. cooperative which includes
Egg-Land’s Best®
Land O’ Lakes®.
Prepared Foods
The Prepared Foods segment consists primarily of the production , packaging, marketing and distribution of prepared
foods offerings such as pre-cooked egg patties, omelets, folded and scrambled egg formats , pancakes, waffles, and
specialty wraps. This segment includes our brands
Van ’s®
Crepini®.
The Company’s operating segment s are determined on the basis of our organizational structure and information that is regularly
reviewed by our Chief Operating Decision Maker (“CODM”). The Company’s CODM is Sherman Miller, President and Chief
Executive Officer. Segment income is utilized during our forecasting process to assess profitability, strategic initiatives and
capital investments. The CODM primarily compares actual performance of segment sales and segment income to prior period
results and periodic forecasts to assist with assessing performance and deciding how to allocate resources.
The accounting policies of the segments are generally the same as those presented in
Segment SG&A represents direct costs associated with each segment for
mar
keting, delivery and employee costs. Other
– segment income represents the total segment income from other operating segments such as co-pack shell egg, egg products,
hard -cooked eggs and other business activities that do not individually meet the quantitative thresholds for separate disclosure.
Unallocated Corporate SG&A represents overhead such as corporate payroll related expenses, legal and professional fees,
amortization and other expenses that are not used to measure segment income and is managed at the corporate office.
Intersegment sales represent sales between segments as part of our vertical integration. Intersegment sales from the Conventional
and Specialty Shell Egg segments are primarily sales related to our non-reportable egg products or hard -cooked segments.
Conventional and Specialty Shell Egg intersegment sales are transferred at discounted fixed rates to account for undergrad es and
yield loss, market rates, or at production costs.
The Company does not report total assets by segment as operations are highly integrated, and assets are shared amongst segments.
The CODM does not assess performance or allocate resources based on segment assets.
Segment results, including the significant expense categories regularly provided to the CODM, are provided below (in thousand
s):
Fiscal year ended May 30, 2026
Conventional
Shell Eggs
Specialty Shell
Eggs
Prepared Foods
Total Reportable
Segments
Net sales - external customers
$
$
$
$
Intersegment sales
Total segment sales
Segment COGS
Segment SG&A
Segment income
$
$
$
$
Other - segment income
Unallocated corporate SG&A
(108,353 )
Gain on involuntary conversions
Loss on disposal of fixed assets
(1,391 )
Operating income
Other income, net
Income before income taxes
$
68
Fiscal year ended May 31, 2025
Conventional
Shell Eggs
Specialty Shell
Eggs
Prepared Foods
Total Reportable
Segments
Net sales - external customers
$
$
$
$
Intersegment sales
Total segment sales
Segment COGS
Segment SG&A
Segment income
$
$
$
(2,119 )
$
Other - segment income
Unallocated corporate SG&A
(127,141 )
Loss on involuntary conversions
(156 )
Gain on disposal of fixed assets
Operating income
Other income, net
Income before income taxes
$
Fiscal year ended June 1, 2024
Conventional
Shell Eggs
Specialty Shell
Eggs
Total Reportable
Segments
Net sales - external customers
$
$
$
Intersegment sales
Total segment sales
Segment COGS
Segment SG&A
Segment income
$
$
$
Other - segment income
Unallocated corporate SG&A
(94,516 )
Gain on involuntary conversions
Loss on disposal of fixed assets
(26 )
Operating income
Other income, net
Income before income taxes
$
The following table shows the reconciliation of net sales to consolidated results (in thousands):
Fiscal Year Ended
May 30, 2026
May 31, 2025
June 1, 2024
Total reportable segments
$
$
$
Other - segment sales
Total consolidated net sales
$
$
$
Other – segment sales represent sales from our non-reportable segments which includes co-pack shell egg sales, egg product
sales, hard -cooked eggs and other business activities.
69
Revenue primarily derives from sales throughout the U.S. The following table provides revenue disaggregated by segment and
by sales channel (in thousands):
Fiscal year May 30, 2026
Retail
Foodservice
Other
Total
Conventional Shell Egg
$
$
$
$
Specialty Shell Egg
Prepared Foods
Other - segment sales
$
$
$
$
Fiscal year May 31, 2025
Retail
Foodservice
Other
Total
Conventional Shell Egg
$
$
$
$
Specialty Shell Egg
Prepared Foods
Other - segment sales
$
$
$
$
Fiscal year June 1, 2024
Retail
Foodservice
Other
Total
Conventional Shell Egg
$
$
$
$
Specialty Shell Egg
Other - segment sales
$
$
$
$
Retail customers include primarily national and regional grocery store chains, club stores, and companies servicing independent
supermarkets in the U.S. Foodservice customers include primarily companies that sell food products and related items to
restaura nts, healthcare and education facilities and hotels.
Our largest customer, Walmart Inc. (including Sam’s Club) accounted for
%,
% and
% of net sales dollars for fiscal
2026, 2025, and 2024, respectively.
Note 16 - Commitments and Contingencies
In re Shell Eggs Litigation
Since November 2025, the Company has been named as a defendant in several lawsuits filed in federal courts alleging
substantially identical claims, including: (1) the following lawsuits in the Southern District of Indiana: (a) King Kullen Grocery
Co., Inc. v. Cal -Maine Foods, Inc., et al., Case No. 1:25 -cv-2274, (b) Nineteenseventynine LLC d/b/a The Breakfast Joynt v. Cal-
Maine Foods, Inc., et al., Case No. 1:25 -cv-2301, (c) Taylor Egg Products, Inc. v. Cal -Maine Foods, Inc., et al., Case No. 1:25-
cv-2554, (d) Hudson v. Cal -Maine Foods, Inc. et al., Case No. 1:25 -cv-02573, (e) Brandon Huyler v. Cal -Maine Foods, Inc., et
al., Case No. 1:26 -cv-00135, and (f) Gloria Emery, Carol Goldberg, and Casey Whalen v. Cal -Maine Foods, Inc., et al., Case No.
1:26-cv-00135; (2) the following lawsuits in the Northern District of Illinois: (a) Birchmans Parisian, LLC (d/b/a Lisciandro's
Restaurant) v. Cal -Maine Foods, Inc., et al., Case No. 1:25 -cv-14030, (b) Phil-N-Cindy's Lunch, Inc. v. Cal -Maine Foods, Inc.,
et al., Case No. 1:25 -cv-14082, (c) Yell -O-Glow Corporation v. Cal -Maine Foods, Inc., et al., Case No. 1:25 -cv-15084, and (d)
Tariq Habash, Delia Govea, Andrew Phillips, and Catalina Torres v. Urner Barry Publications, Inc., Cal -Maine Foods, Inc., et
al., Case No. 1:25 -cv-14112; (3) the following lawsuits in the Western District of Wisconsin: (a) Matthew Edlin v. Cal -Maine
Foods, Inc., et al., Case No. 3:25 -cv-946, and (b) India Price, Lakia Session, and Karen Solomon v. Cal -Maine Foods, Inc., et al.,
Case No. 3:25 -cv-1016; and (4)
a
lawsuit in the Western District of Missouri: Ryan v. Cal -Maine Foods, Inc., et al., Case No.
4:25-cv-00999. The lawsuits generally allege that the Company, along with other egg producers and industry associations,
conspired to artificially inflate the prices of conventional shell eggs nationwide, primarily through manipulation of industry price
benchmarks (such as the Urner Barry Egg Index and Eggs Clearinghouse, Inc. spot market), coordinated reporting and supply
restrictions, particularly during the calendar year 2022 highly pathogenic avian influenza (“HPAI”) outbreak. In each case, the
plaintiff seeks certification of a putative class of either direct or indirect purchasers, monetary damages, injunctive relief,
attorneys’ fees, and, in some cases, restitution under Section 1 of the Sherman Act, 15 U.S.C. § 1 (the “Sherman Act”) and various
state antitrust and consumer protection statutes.
70
On February 10, 2026, the Joint Panel on Multidistrict Litigation issued a Transfer Order, consolidating the above actions and
transferring them to the Western District of Wisconsin for pre-trial proceedings. An initial judicial management conference took
place on May 8, 2026, where the court entered an initial case management order, setting forth deadlines for the consolidated
complaints and initial briefing to be filed. No discovery has taken place in any of the actions. The Company disputes plaintiffs’
allegations in each of these actions and intends to vigorously defend itself in these actions.
Civil Investigative Demand
In March 2025, the Company received a Civil Investigative Demand (“CID”) from the U.S. Department of Justice (“DOJ”) in
connection with an antitrust investigation to determine whether there was a violation of the antitrust laws through alleged
anticompetitive conduct by and among egg producers. In August 2025, the Company received a subpoena from the State of New
York requesting information and documents related to its investigation of anticompetitive conduct and high egg prices in the egg
industry, and in March 2026, the Company received a similar subpoena from the State of Washington related to its investigation
of anticompetitive conduct and high egg prices in the egg industry. Additionally, various states’ attorneys general sought to join
the DOJ’s investigation or requested access to the confidential disclosures by the Company to the DOJ.
On or about June 25, 2026, the Company entered into an agreement with the DOJ and 17 states’ attorneys general to resolve the
investigation, subject to applicable court approvals and procedures. The Company denied all wrongdoing or violations of law and
no fines or penalties were assessed against the Company. In connection with the agreement, the Company agreed to implement
certain antitrust compliance and reporting measures, to donate
million to the settling states to resolve the matter.
The State of Washington did not join in this settlement and the Company continues to comply with the State of Washington’s
subpoena and cooperate with its investigations. Management cannot predict the eventual scope, duration or outcome of the State
of Washington’s investigation and is unable to estimate the amount or range of potential losses, if any, at this time.
Kraft Foods Global, Inc. et al. v. United Egg Producers, Inc. et al.
On September 25, 2008, the Company was named as one of several defendants in numerous antitrust cases involving the U.S.
shell egg industry. The Company settled all of these cases, except for the claims of certain plaintiffs who sought substantia
l
damages allegedly arising from the purchase of egg products (as opposed to shell eggs). These remaining plaintiffs are Kraft Food
Global, Inc., General Mills, Inc., and Nestle USA, Inc. (the “Egg Products Plaintiffs”) and, until a subsequent settlement was
reached as described below, The Kellogg Company.
On September 13, 2019, the case with the Egg Products Plaintiffs was remanded from a multi -district litigation proceeding in the
United States District Court for the Eastern District of Pennsylvania, In re Processed Egg Products Antitrust Litigation, MDL No.
2002, to the United States District Court for the Northern District of Illinois, Kraft Foods Global, Inc. et al. v. United Egg
Producers, Inc. et al., Case No. 1:11 -cv-8808, for trial. The Egg Products Plaintiffs alleged that the Company and other defendants
violated Section 1 of the Sherman Act, by agreeing to limit the production of eggs and thereby illegally to raise the prices that
plaintiffs paid for processed egg products. In particular, the Egg Products Plaintiffs attacked certain features of the United Egg
Producers animal -welfare guidelines and program used by the Company and many other egg producers.
On October 24, 2019, the Company entered into a confidential settlement agreement with The Kellogg Company dismissing all
claims against the Company for an amount that did not have a material impact on the Company’s financial condition or results
of operations. On November 11, 2019, a stipulation for dismissal was filed with the court, and on March 28, 2022, the court
dismissed the Company with prejudice.
The trial of this case began on October 17, 2023. On December 1, 2023, the jury returned a decision awarding the Egg Products
Plaintiffs $
defendants, jointly and severally, totaling $
for judgment as a matter of law or for a new trial, and a motion to alter or amend the judgment. On December 13, 2024, the court
granted defendants’ November 20, 2024 motion to stay enforcement of the judgment and entered an agreed order requiring the
defendants to post security during post-judgment proceedings and appeal, and stayed proceedings to enforce the judgment until
the disposition of the post-judgment motions and ultimate appeals. On December 17, 2024, the Company posted a bond in the
approximate amount of $
court’s decision. Another defendant posted a bond for the remaining amount. On November 19, 2025, the plaintiffs filed a motion
to lift stay of proceedings on attorney’s fees and costs, and on December 5, 2025, the defendants filed their response in opposition
to such motion. The court has not ruled on this motion. The Company intends to continue to vigorously defend the claims asserted
by the Egg Products Plaintiffs.
71
If the jury’s decision is ultimately upheld, the Company would be jointly and severally liable with other defendants for treble
damages, or $
Plaintiffs’ reasonable attorneys’ fees. During our second quarter of fiscal 2024, we recorded an accrued expense of $
in selling, general and administrative expenses in the Company’s Condensed Consolidated Statements of Income and classified
as other noncurrent liabilities in the Company’s Condensed Consolidated Balance Sheets. Although less than the bond posted by
the Company, the accrual represents our estimate of the Company’s proportional share of the reasonably possible ultimate
damages award, excluding the Egg Product Plaintiffs’ attorneys’ fees that we believe would be approximately offset by the credits
noted above. We have entered into a judgment allocation and joint defense agreement with the other defendants remaining in the
case. Our accrual may change in the future to the extent we are successful in further proceedings in the litigation.
State of Oklahoma Watershed Pollution Litigation
On June 18, 2005, the State of Oklahoma filed suit, in the United States District Court for the Northern District of Oklahoma,
against Cal -Maine Foods, Inc. and Tyson Foods, Inc., Cobb -Vantress, Inc., Cargill, Inc., George’s, Inc., Peterson Farms, Inc. and
Simmons Foods, Inc., and certain of their affiliates. The State of Oklahoma claims that through the disposal of chicken litter the
defendants polluted the Illinois River Watershed. This watershed provides water to eastern Oklahoma. The complaint sought
injunctive relief and monetary damages, but the claim for monetary damages was dismissed by the court. Cal -Maine Foods, Inc.
discontinued operations in the watershed in or around 2005. Since the litigation began, Cal-Maine Foods, Inc. purchased
%
of the membership interests of Benton County Foods, LLC, which is an ongoing commercial shell egg operation within the Illinois
River Watershed. Benton County Foods, LLC is not a defendant in the litigation. We also have a number of small contract
producers that operate in the area.
The non-jury trial in the case began in September 2009 and concluded in February 2010. On January 18, 2023, the court entered
findings of fact and conclusions of law in favor of the State of Oklahoma. The court found the defendants jointly and severally
liable for state law nuisance, federal common law nuisance, and state law trespass. The court also found the producers vicariously
liable for the actions of their contract producers. On June 12, 2023, the court ordered the parties to mediate, but the mediation
was unsuccessful. On June 26, 2024, the district court denied defendants’ motion to dismiss the case. On September 13, 2024,
a
status hearing was held and the court scheduled an evidentiary hearing for December 3, 2024, to determine whether any legal
remedy is available based on the now 15-year-old record and changed circumstances of the Illinois River watershed. On December
9, 2025, the court entered a final judgment imposing approximately $
certain non -monetary remedies, including injunctive relief. Pursuant to the final judgment, the Company is to pay approximately
$
be determined at a later date.
The injunctive relief provides for, among other things, a special master to oversee an investigation, develop a remediation plan
subject to court approval, and provide ongoing monitoring of remediation projects, the costs of which will be paid jointly and
severally by the defendants. The defendants are required to fund $
and ongoing funding requirements of $
continue for the
does not currently expect to have a material share of the funding. The injunctive relief also includes certain annual reporting
requirements and certain requirements on future operations within the Illinois River Watershed, including relating to removal of
litter, storage, transportation, disposal and future land applications.
On January 2, 2026, the Company filed its notice of appeal to the United States Court of Appeals for the Tenth Circuit. On January
16, 2026, the district court stayed the monetary portions of the judgement but declined to stay the injunctive portions. Effective
July 10, 2026, the Company and all other defendants entered into a settlement agreement with the State of Oklahoma that provides
for the payment of funds by the defendants into an environmental relief fund, certain restrictions on the application of chicken
litter in the IRW and certain reporting and reporting measures. The agreement remains subject to applicable court approvals and
procedures and is not expected to have a material impact on the Company’s financial condition or results of operations .
Other Matters
In addition to the above, the Company is involved in various other claims and litigation incidental to its business. Although the
outcome of these matters cannot be determined with certainty, management, upon the advice of counsel, is of the opinion that the
final outcome should not have a material effect on the Company’s consolidated results of operations or financial position.
Note 17 – Subsequent Events
Effective
, the Company acquired the Eggland’s Best® franchise territory in the Northeast for $
acquisition gives us the exclusive right to distribute and sell
Egg-Land’s Best®
Land O’ Lakes®
Massachusetts, New Hampshire, Rhode Island, and select key areas in Vermont, New York, and Connecticut.
72
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by
us in the reports we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded,
processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and
forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and
communicated to management, including our principal executive and principal financial officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required disclosure. Based on an evaluation of our disclosure controls
and procedures conducted by our Chief Executive Officer and Chief Financial Officer, together with other financial officers, such
officers concluded that our disclosure controls and procedures were effective as of May 30, 2026 at the reasonable assurance
level.
Internal Control Over Financial Reporting
(a) Management’s Report on Internal Control Over Financial Reporting
The following sets forth, in accordance with Section 404(a) of the Sarbanes -Oxley Act of 2002 and Item 308 of the Securities
and Exchange Commission’s Regulation S-K, the report of management on our internal control over financial reporting.
1.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
“Internal control over financial reporting” is a process designed by, or under the supervision of, our Chief Executive
Officer and Chief Financial Officer, together with other financial officers, and effected by the Board, management
and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting
principles and includes those policies and procedures that:
●
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions
and dispositions of our assets;
●
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that our receipts and
expenditures are being made only in accordance with authorizations of our management and directors; and
●
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of our assets that could have a material effect on the financial statements.
2. Our management, in accordance with Rule 13a-15(c) under the Exchange Act and with the participation of our
Chief Executive Officer and Chief Financial Officer, together with other financial officers, evaluated the
effectiveness of our internal control over financial reporting as of May 30, 2026 . The framework on which
management’s evaluation of our internal control over financial reporting is based is the “Internal Control –
Integrated Framework”
published in 2013 by the Committee of Sponsoring Organizations (“COSO”) of the
Treadway Commission.
3. Management has determined that our internal control over financial reporting as of May 30, 2026 is effective. It is
noted that internal control over financial reporting cannot provide absolute assurance of achieving financial
reporting objectives, but rather reasonable assurance of achieving such objectives.
4. The attestation report of FROST, PLLC on our internal control over financial reporting, which includes that firm’s
opinion on the effectiveness of our internal control over financial reporting, is set forth below.
(b) Attestation Report of the Registrant’s Public Accounting Firm
73
Report of Independent Registered Public Accounting Firm
on Internal Control Over Financial Reporting
Board of Directors and Stockholders
Cal -Maine Foods, Inc. and Subsidiaries
Ridgeland, Mississippi
Opinion on Internal Control Over Financial Reporting
We have audited Cal -Maine Foods, Inc. and Subsidiaries’ internal control over financial reporting as of May 30, 2026,
based on criteria established in
2013 Internal Control – Integrated Framework
Organizations of the Treadway Commission (“COSO”). In our opinion, Cal -Maine Foods, Inc. and Subsidiaries maintained, in
all material respects, effective internal control over financial reporting as of May 30, 2026, based on criteria established in
2013
Internal Control – Integrated Framework
As indicated in the accompanying Changes in Internal Control Over Financial Reporting, management’s assessment of
and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Echo Lake
Foods, LLC and certain related companies, which are included in the May 30, 2026 consolidated financial statements of Cal-
Maine Foods, Inc. and Subsidiaries and constituted 9.7% of total assets as of May 30, 2026, and 7.8% of net sales for the year
then ended. Our audit of internal control over financial reporting of Cal -Maine Foods, Inc. and Subsidiaries also did not include
an evaluation of the internal control over financial reporting of Echo Lakes Foods, LLC and certain related companies.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (“PCAOB”), the consolidated balance sheets and the related consolidated statements of income, comprehensive income,
stockholders’ equity, and cash flows of Cal -Maine Foods, Inc. and Subsidiaries and our report dated July 22, 2026 expressed an
unqualified opinion.
Basis for Opinion
Cal -Maine Foods, Inc. and Subsidiaries’ management is responsible for maintaining effective internal control over
financial reporting, and for their assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Management’s Report on Internal Control Over Financial Reporting in Item 9A. Our responsibility is to express
an opinion on the entities’ internal control over financial reporting based on our audit. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to Cal -Maine Foods, Inc. and Subsidiaries in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained
in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures
as we considered necessary in the circumstances. We believe our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
An entities’ internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America. An entities’ internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the entities; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of consolidated financial statements in accordance with accounting principles
generally accepted in the United States of America, and that receipts and expenditures of the entities are being made only in
accordance with authorizations of management and directors of the entities; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the entities’ assets that could have a material
effect on the consolidated financial statements.
74
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also
,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
July 22, 2026
(c) Changes in Internal Control Over Financial Reporting
In connection with its evaluation of the effectiveness, as of May 30, 2026, of our internal control over financial reporting,
management determined that there was no change in our internal control over financial reporting that occurred during the fourth
quarter ended May 30, 2026, that has materially affected, or is reasonably likely to materially affect, our internal control over
financial reporting.
As disclosed elsewhere in this Annual Report, we completed the acquisition of Echo Lake Foods during the first quarter of fiscal
2026. As permitted by SEC guidance, the scope of management’s review of its internal control over financial reporting excluded
Echo Lake Foods. Echo Lake Foods constituted 9.7% of total assets as of May 30, 2026, and 7.8% of total net sales for fiscal
year 2026. The Company is in process of integrating Echo Lake Foods into its internal control framework.
ITEM 9B. OTHER INFORMATION
During our fourth quarter of fiscal 2026, no director or officer of the Company
arrangement or
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Except as set forth below, the information concerning directors, executive officers and corporate governance required by Item 10
is incorporated by reference from our definitive proxy statement which is to be filed pursuant to Regulation 14A under the
Securities Exchange Act of 1934 in connection with our 2026 Annual Meeting of Stockholders.
We have adopted a Code of Ethics and Business Conduct that applies to our directors, officers and employees, including the chief
executive officer and principal financial and accounting officers of the Company. We will provide a copy of the code free of
charge to any person that requests a copy by writing to:
Cal -Maine Foods, Inc.
1052 Highland Colony Pkwy, Suite 200
Ridgeland, MS 39157
Attn.: Investor Relations
Requests can be made by phone at (601) 948 -6813.
A copy is also available at our website www.calmainefoods.com under the heading “Investor Relations – Governance.” We intend
to disclose any amendments to, or waivers from, the Code of Ethics and Business Conduct on our website promptly following
the date of any such amendment or waiver. Information contained on our website is not a part of this report.
ITEM 11. EXECUTIVE COMPENSATION
The information concerning executive compensation required by Item 11 is incorporated by reference from our definitive proxy
statement which is to be filed pursuant to Regulation 14A under the Securities Exchange Act of 1934 in connection with our 2026
Annual Meeting of Stockholders.
75
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
Except as set forth below, the information concerning security ownership of certain beneficial owners and management and
related stockholder matters required by Item 12 is incorporated by reference from our definitive proxy statement which is to be
filed pursuant to Regulation 14A under the Securities Exchange Act of 1934 in connection with our 2026 Annual Meeting of
Stockholders.
Securities Authorized for Issuance under Equity Compensation Plans
Equity Compensation Plan Information
(a)
(b)
(c)
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
Weighted average
exercise price of
outstanding options,
warrants and rights
Number of securities remaining
available for future issuance under
equity compensation plans (excluding
securities reflected in column (a))
Equity compensation plans
approved by stockholders
9,260
$
—
719,234
Equity compensation plans not
approved by stockholders
—
—
—
Total
9,260
$
—
719,234
(a) Consists of 9,260 PSUs at the target performance level outstanding under our Amended and Restated 2012 Omnibus
Long-Term Incentive Plan as of May 30, 2026. If maximum performance levels are achieved, the number of shares
issuable for the outstanding PSUs would be 13,890.
(b) There were no outstanding options, warrants or rights with an exercise price as of May 30, 2026.
(c) Reflects shares available for future issuance as of May 30, 2026 under our Amended and Restated 2012 Omnibus Long-
Term Incentive Plan.
For additional information, see
Statements.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information concerning certain relationships and related transactions, and director independence required by Item 13 is
incorporated by reference from our definitive proxy statement which is to be filed pursuant to Regulation 14A under the Securities
Exchange Act of 1934 in connection with our 2026 Annual Meeting of Stockholders.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information concerning principal account ant fees and services required by Item 14 is incorporated by reference from our
definitive proxy statement which is to be filed pursuant to Regulation 14A under the Securities Exchange Act of 1934 in
connection with our 2026 Annual Meeting of Stockholders.
PART IV.
ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
(a)(1) Financial Statements
76
The following consolidated financial statements and notes thereto of Cal -Maine Foods, Inc. and its subsidiaries are included in
Item 8 and are filed herewith:
)
(a)(2) Financial Statement Schedule
All schedules are omitted either because they are not applicable or required, or because the required information is included in
the financial statements or notes thereto.
(a)(3) Exhibits Required by Item 601 of Regulation S-K
See Part (b) of this Item 15.
(b) Exhibits Required by Item 601 of Regulation S-K
The following exhibits are filed herewith or incorporated by reference:
Exhibit
Number
Exhibit
2.1
3.1
3.2
4.1
10.1
10.2
10.3
10.4*
10.5*
10.6*
Cal -Maine Foods, Inc. KSOP Trust, as amended and restated, effective April 1, 2012 (incorporated by
10.7*
10.8*
10.9*
77
10.10*
10.11*
10.12*
10.13*
10.14*
19.1**
21**
23.1**
31.1**
31.2**
32***
97
101.SCH***+
Inline XBRL Taxonomy Extension Schema Document
101.CAL***+
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF***+
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB***+
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE***+
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* Management contract or compensatory plan or arrangement
** Filed herewith as an Exhibit
*** Furnished herewith as an Exhibit
+ Submitted electronically with this Annual Report on Form 10 -K
(c) Financial Statement Schedules Required by Regulation S-X
All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission
are not required under the related instructions or are inapplicable and therefore have been omitted.
ITEM 16. FORM 10 -K SUMMARY
None.
78
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, in Ridgeland, Mississippi.
CAL-MAINE FOODS, INC.
/s/ Sherman L. Miller
Sherman L. Miller
President and Chief Executive Officer
Date:
July 22, 2026
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates indicated:
Signature
Title
Date
/s/ Sherman L. Miller
President, Chief Executive Officer
Sherman L. Miller
and Director
July 22, 2026
(Principal Executive Officer)
/s/ Max P. Bowman
Vice President, Treasurer, Secretary,
Max P. Bowman
Chief Financial Officer and Director
July 22, 2026
(Principal Financial Officer)
/s/ Matthew S. Glover
Vice President, Accounting
July 22, 2026
Matthew S. Glover
(Principal Accounting Officer)
/s/ Adolphus B. Baker
Chairman of the Board and Directors
July 22, 2026
Adolphus B. Baker
/s/ Melanie Boulden
Director
July 22, 2026
Melanie Boulden
/s/ Haley R. Fisackerly
Director
July 22, 2026
Haley R. Fisackerly
/s/ Michael J. Highfield
Director
July 22, 2026
Michael J. Highfield
/s/ Letitia C. Hughes
Director
July 22, 2026
Letitia C. Hughes
/s/ Steve W. Sanders
Director
July 22, 2026
Steve W. Sanders
/s/ Dudley D. Wooley
Director
July 22, 2026
Dudley D. Wooley
/s/ Camille S. Young
Director
July 22, 2026
Camille S. Young
1
CAL-MAINE FOODS, INC.
INSIDER TRADING POLICY AND RELATED MATTERS
1.
General Applicability of Policy
This Policy applies to all transactions in the securities of Cal -Maine Foods, Inc. and its direct and indirect subsidiaries
(collectively, the “Company”), including all classes of stock, options for all classes of stock and any other securities the
Company may issue from time to time, such as preferred stock, restricted stock, restricted stock units, warrants and convertible
debentures, as well as to derivative securities relating to the Company’s stock, whether or not issued by the Company, such as
exchang e-traded options (“Company’s securities”). Except as otherwise stated below, the Policy applies to such securities
regardless of whether they are held in a brokerage account, a KSOP or similar account, through an employee stock purchase
plan or otherwise. Transactions subject to this Policy include purchases, sales and gifts. The Policy also applies to transactions
in the securities of other companies in certain circumstances as set forth below. The Policy applies to all officers of the
Company, all member s of the Company’s Board of Directors, and all employees of, and consultants and contractors to, the
Company. This group of people, and members of their immediate families, members of their households, and their controlled
entities, are referred to in this Policy as “Insiders.”
For purposes of this Policy, “immediate family” means any family members whose transactions in the Company’s securities are
directed by an Insider or subject to an Insider’s influence or control, and “controlled entities” means any entity when
transactions in the Company’s securities by the entity are directed by an Insider or subject to an Insider’s influence or control.
Insiders are responsible for transactions in the Company’s securities of immediate family, members of their households and of
their controlled entities and therefore should make them aware of the need to confer with the Insider before transacting in the
Company’s securities.
In addition to the requirements of this Policy for all Insiders, this Policy contains additional requirements for the named
individuals and individuals holding certain positions who are notified by the Company of such additional requirements as
described further below.
2.
Statement of Policy
2.1.
Transacting on Material Nonpublic Information.
purchase, sale or gift of the Company’s securities, including any offer to purchase or offer to sell, during any period
commencing with the date that he or she possesses or is aware of Material Nonpublic Information (defined below) concerning
the Company, and ending at the time the information has been publicly disclosed for one full Trading D
ay
, or at such time as
such nonpublic information is no longer material. As used herein, the term “Trading Day” shall mean a day on which national
stock exchanges and the Nasdaq Stock Market (“Nasdaq”) are open for trading. This restriction on transacting does not apply
to transactions made under a plan adopted pursuant to Securities and Exchange Commission (“SEC”) Rule 10b5 -1(c) (17
C.F.R. § 240.10b5 -1(c)) (“Rule 10b5-1(c)”) and approved in writing by the Company (an “approved Rule 10b5 -1 plan”).
2.2.
Tipping.
No Insider shall disclose (“tip”) Material Nonpublic Information to any other person (including
family members and other employees) nor shall such Insider make recommendations or express opinions on the basis of
Material Nonpublic Information as to transactions in the Company’s securities.
2.3.
Confidentiality of Nonpublic Information.
of the Company and the unauthorized disclosure of such information is forbidden. In the event any Insider receives any inquiry
from outside the Company, such as from a stock analyst, for information (particularly financial results and/or projections) that
may involve Material Nonpublic Information, the inquiry should be referred to the Company’s Disclosure Committee which is
responsible for coordinating and overseeing the release of such information to the public, shareholders, analysts and others in
compliance with applicable laws and regulations.
2.4.
Applicability of Policy to Material Nonpublic Information Regarding Other Companies.
This Policy
also applies to Material Nonpublic Information relating to other companies (a) with which the Company does business or (b)
that are involved in a potential transaction or business relationship with the Company, when that information is obtained in the
course of employment with, or the performance of services to or on behalf of, the Company. Civil and criminal penalties, and
termination of employment, may result from transacting on or “tipping” Material Nonpublic Information regarding such other
companies. All officers, directors, employees, consultants and contractors should treat Material Nonpublic Information about
such other companies with the same care required with respect to information related directly to the Company.
2
2.5.
Application to the Company
. It is the policy of the Company that the Company will not engage in
transactions in the Company’s securities in violation of applicable securities laws.
3.
Potential Criminal and Civil Liability and/or Disciplinary Action
3.1.
Liability for Insider Trading.
criminal and civil fines and penalties as well as imprisonment for engaging in transactions in the Company’s securities at a time
when they have knowledge of Material Nonpublic Information regarding the Company and for engaging in transactions in
another company’s securities when they have knowledge of Material Nonpublic Information regarding such other company
gained through their service to or on behalf of the Company.
3.2.
Liability for Tipping.
referred to as a “tippee”) to whom they have disclosed Material Nonpublic Information regarding the Company or regarding
another company gained through their service to or on behalf of the Company, or to whom they have made recommendations or
expressed opinions on the basis of such information as to transacting in the Company’s or such other company’s securities.
Criminal and civil fines and penalties and imprisonment have been imposed even when the disclosing person did not profit
from the transaction. The stock exchanges and securities regulatory authorities use sophisticated electronic surveillance
techniques to uncover insider trading.
3.3.
Possible Disciplinary Actions.
Employees of the Company who violate this Policy shall also be subject to
disciplinary action by the Company, which may include ineligibility for future participation in the Company’s equity incentive
plans or termination of employment.
4.
Transaction Guidelines and Requirements
4.1.
Black-Out Periods and Transaction Window.
(a)
Quarterly Black -Out Period. The period beginning at the close of market on the last Trading Day
preceding the last week of each fiscal quarter and ending at the time the financial results for that quarter have been publicly
disclosed for one full Trading Day is a particularly sensitive period of time for transactions in the Company’s stock from the
perspective of compliance with applicable securities laws. This sensitivity is due to the fact that there often exists Material
Nonpublic Information about the exp ected financial results for the quarter during that period. Accordingly, this period of time
is referred to as a “quarterly black -out” period. All Insiders who have been notified that they are subject to the quarterly black-
out period are prohibited from transacting during such period. These restrictions on transactions do not apply to transactions
made under an approved Rule 10b5 -1 plan.
(b)
Mandatory Transaction Window. To ensure compliance with this Policy and applicable federal and
state securities laws, the Company requires that all individuals who have been notified that they are subject to the quarterly
black -out periods refrain from conducting transactions involving the purchase, sale or gift of the Company’s securities other
than during the period (the “transaction window”) commencing at the time the financial results for the preceding fiscal quarter
or year have been publicly disclosed for one full Trading Day and continuing until the close of the market on the last Trading
Day preceding the last week of the then fiscal quarter. This restriction on transactions does not apply to transactions made
under an approved Rule 10b5 -1 plan.
(c)
Event-Specific Black-Out Period. From time to time, the Company may also prohibit directors,
officers and potentially a larger group of employees, consultants and contractors from transacting in securities of the Company
because of material developments known to the Company and not yet disclosed to the public. In such event, directors, officers
and such employees, consultants and contractors may not engage in any transaction involving the purchase, sale or gift of the
Company’s securities and should not disclose to others the fact of such event -specific black -out period. This restriction does
not apply to transactions made under an approved Rule 10b5 plan. The Company would re-open the transaction window at the
time the information has been publicly disclosed for one full Trading Day, or at such time as the information is no longer
material.
The prohibition against transacting during a quarterly or event -specific black -out period encompasses the fulfillment of “limit
orders” by any broker, and the brokers with whom any such limit order is placed must be so instructed at the time it is place d.
It should be noted that even during the transaction window, any person possessing Material Nonpublic Information concerning
the Company, whether or not subject to the quarterly black -out period and transaction window, should not engage in any
transactions in the Company’s securities until such information has been known publicly for one full Trading Day , whether or
not the Company has recommended a suspension of transactions to that person. This restriction does not apply to transactions
3
made under an approved Rule 10b5 -1 plan.
Transacting in the company’s securities during the transaction window should
not be considered a “safe harbor,” and all Insiders should use good judgment at all times.
4.2.
Pre-Clearance of Transactions.
The Company has determined that all executive officers and directors of
the Company and certain other key persons identified by the Company from time to time and who have been notified that they
have been so identified must refrain from transacting in the Company’s securities, even during the transaction window, without
first complying with the Company’s “pre-clearance” process. Each such person should contact the Company’s Chief Financial
Officer prior to commencing any transaction in the Company’s securities. The Chief Financial Officer will consult as necessary
with senior management and/or counsel to the Company before clearing any proposed transaction. Although an Insider wishing
to transact pursuant to an approved Rule 10b5 -1 plan need not seek preclearance from the Company’s Chief Financial Officer
before each transaction takes place, such an insider must obtain Comp any approval of the proposed Rule 10b5 -1 plan before it
is adopted .
4.3.
Individual Responsibility.
insider trading. An Insider may, from time to time, have to forego a proposed transaction in the Company’s securities even i
f
he or she planned to make the transaction before learning of the Material Nonpublic Information and even though the Insider
believes he or she may suffer an economic loss or forego anticipated profit by waiting.
5.
Definition of Material Nonpublic Information
Information is “material” if there is a substantial likelihood that a reasonable investor would consider the information important
in deciding whether to purchase, sell or hold a security, or if there is a substantial likelihood that the information would be
viewed by a reasonable investor as significantly altering the total mix of publicly available information about the Company.
Any information that could reasonably be expected to affect the market price of a security is likely to be considered material.
This determination is made based on the facts and circumstances of each particular situation and is often evaluated by
enforcement personnel with the benefit of hindsight.
There are various categories of information that are particularly sensitive and, as a general rule, should be considered material.
Examples of such information include:
●
Financial results
●
Known but unannounced future earnings or losses
●
News of a pending or proposed merger, or acquisition
●
News of the disposition or acquisition of significant assets or opening or closing of a significant business
operation
●
Significant developments related to intellectual property
●
Significant developments involving corporate relationships
●
Changes in dividend policy
●
Stock splits
●
New equity or debt offerings
●
Significant litigation exposure due to actual or threatened litigation
●
Significant cybersecurity incidents
Either positive or negative information may be material. The above list is not exclusive and many other types of information
may be considered material, depending on the circumstances. The probability of whether an event will or will not occur, along
with the magnitude of the potential event, affects the determination of whether it is materia l.
Nonpublic information is information that has not been previously disclosed to the general public and is otherwise not available
to the general public. For information to be considered public, it must be widely disseminated in a manner making it generally
4
available to investors, including through the issuance of a press release or a filing with the SEC. In addition, even after a public
announcement of material information, a reasonable period of time must elapse in order for the market to absorb and react to
the information. Generally, Insiders should not engage in any transactions in the Company’s securities until such information
has been known publicly for at least one full Trading Day.
Insiders with questions concerning whether particular information is Material Nonpublic Information may consult with their
supervisor or the Company’s general counsel.
6.
Exceptions to this Policy
For purposes of this Policy, the Company considers that the exercise of stock options or similar equity awards for cash under
any Company equity incentive plan, the use of shares delivered or withheld from the exercise to cover the cost of the option
exercise or to cover the satisfaction of tax withholding obligations, and the purchase of shares pursuant to any Company
employee stock purchase plan (but not the sale or gift of any shares issued upon such exercise or purchase, not a cashless
exercise (accomplished by a sale of a portion of the shares issued upon exercise of an option), and not any other market sale for
the purpose of generating cash to pay the exercise price or taxes) are exempt from this Policy.
The transaction restrictions under this Policy do not apply to the grant or award of options, restricted stock, restricted stock
units or stock application rights by the Company. The transaction restrictions under this Policy do not apply to the vesting,
cancellation or forfeiture of stock options, restricted stock, restricted stock units or stock appreciation rights in accordance with
the applicable plans and agreements. However, the transaction restrictions do apply to any subsequent transactions in such
securities and to any sale or gift of Company
securities received upon the settlement of any restricted stock unit or similar
award. The Company may withhold shares to cover taxes due upon vesting.
The Policy does not apply to the purchase of Company stock in the Company’s KSOP resulting from periodic contributions of
money to the plan pursuant to payroll deduction elections. The Policy does apply to certain elections that may be made under
the KSOP, including (a) an election to increase or decrease the percentage of periodic contributions to the KSOP based on the
payroll contribution election that will be allocated to Company stock; (b) an election to make an intra-plan transfer of an
existing account balance into or out of Company stock; (c) an election to borrow against a KSOP account if the loan will result
in liquidation of stock in the Company Stock Accounts; and (d) an election to prepay a KSOP loan if the prepayment will result
in the allocation of the loan proceeds to any Company Stock Accounts.
Any purchase of the Company’s securities from the Company or sales of the Company’s securities to the Company are not
subject to this Policy.
Transactions made pursuant to and in compliance with an approved Rule 10b5 -1 plan are not subject to the transaction
restrictions in this Policy.
7.
Special Situations
7.1.
Section 16 and Rule 144 Restrictions and Reporting for Directors and Certain Officers.
Section 16 of
the Securities Exchange Act of 1934, as amended (“Section 16”), and Rule 144 under the Securities Act of 1933, as amended
(“Rule 144”) impose additional transaction restrictions and reporting obligations on directors, certain officers and certain
principal stockholders. The Company will notify its directors and officers subject to these additional restrictions and reporting
requirements and provide additional information regarding compliance.
Some transactions that are not subject to restrictions under this Policy may nevertheless be subject to Section 16 and Rule 144,
so in addition to this Policy, directors and notified officers should consult the additional information provided by the Comp
an
y
before transacting in the Company’s securities.
7.2.
Short Sales.
While employees who are not executive officers and directors are not prohibited by law from
engaging in short sales of the Company’s securities, the Company believes it is inappropriate for employees to engage in such
transactions and therefore strongly discourages all employees from such activity.
7.3.
Hedging and Other Derivative Transactions
. Hedging or monetization transactions can be accomplished
through a number of possible mechanisms, including through the use of financial instruments such as prepaid variable forwards,
equity swaps, publicly traded options, collars and exchange funds. Such transactions may permit a director, officer or employee
to continue to own Company securities obtained through employee benefit plans or otherwise, but without the full risks and
rewards of ownership. When that occurs, the director, officer or employee may no longer have the same objectives as the
Company’s other stockholders. Therefore, Insiders are prohibited from engaging in any such transactions.
5
7.4.
Margin Accounts and Pledging Transactions
. Securities held in a margin account as collateral for a
margin loan may be sold by the broker without the customer’s consent if the customer fails to meet a margin call. Securities
pledged as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or
foreclosure sale may occur at a time when the pledgor is aware of Material Nonpublic Information or otherwise is not permitted
to transact in the Company’s securities, persons subject to this Policy are prohi bited from holding the Company’s securities in a
margin account or otherwise pledging the Company’s securities as collateral for a loan, except (1) for those Company securities
held in a margin account or otherwise pledged as collateral for a loan as of July 23, 2024 and (2) pledges of the Company’s
securities as collateral for a loan (not including margin debt) when the person demonstrates to the Company the financial
capacity to repay the loan without resorting to the pledged securities, with the prior approval of the Company.
8.
Adoption and Amendment
This Policy was adopted by the Board of Directors of Cal -Maine Foods, Inc. effective March 31, 2026 and supersedes previous
versions of the policy. This Policy may be amended from time to time in the discretion of the Company.
1
Exhibit 21
Subsidiaries of Cal-Maine Foods, Inc.
Name of Subsidiary
Place of Incorporation or
Organization
Percentage of Outstanding Stock or
Ownership Interest Held by
Registrant
American Egg Products, LLC
Georgia
100%
Texas Egg Products, LLC
Texas
100%
Benton County Foods, LLC
Arkansas
100%
MeadowCreek Foods, LLC
Mississippi
100%
Cal-Maine Real Estate LLC
Mississippi
100%
Eggcellent Insurance Company, LLC
Vermont
100%
Crepini Foods, LLC
Delaware
51%
Echo Lake Foods, LLC
Delaware
100%
ELT, LLC
Wisconsin
100%
Echo Lake Huntington 435, LLC
Wisconsin
100%
Blue Grass Real Estate Company, LLC
Wisconsin
100%
Echo Yorkville, LLC
Wisconsin
100%
Xenitel, LLC
Delaware
100%
Echo Lake Huntington, LLC
Delaware
100%
1
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333 -180470) of Cal-
Maine Foods, Inc. pertaining to the Cal-Maine Foods, Inc. KSOP and the Registration Statement (Form S-8 No. 333 -252069)
pertaining to the Amended and Restated Cal-Maine Foods, Inc. 2012 Omnibus Long-Term Incentive Plan, of our reports dated
July 22, 2026 , relating to the consolidated financial statements and financial statement schedules, and the effectiveness of Cal-
Maine Foods, Inc. and Subsidiaries’ internal control over financial reporting, which appear in the Annual Report to Stockholders,
which is incorporated by reference in this Annual Report on Form 10-K.
Little Rock, Arkansas
July 22, 2026
1
Exhibit 31.1
Certification
Pursuant to Rule 13a -14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934,
As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Sherman L. Miller, certify that:
1. I have reviewed this Annual Report on Form 10-K of Cal-Maine Foods, Inc.;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a -15(e) and 15d -15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, 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 report is
being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
/s/ Sherman L. Miller
Sherman L. Miller
President and Chief Executive Officer
Date:
July 22, 2026
1
Exhibit 31.2
Certification
Pursuant to Rule 13a -14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934,
As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Max P. Bowman, certify that
1.
I have reviewed this Annual Report on Form 10-K of Cal-Maine Foods, Inc.;
2.
Based on my knowledge, this 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 report;
3.
Based on my knowledge, the financial statements, and other financial information included in this 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 report;
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a -15(e) and 15d -15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, 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 report is
being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
/s/ Max P. Bowman
Max P. Bowman
Vice President and Chief Financial Officer
Date:
July 22, 2026
1
Exhibit 32
Certifications Pursuant to 18 U.S.C. §1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Solely for the purposes of complying with 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, we, the undersigned Chief Executive Officer and Chief Financial Officer of Cal-Maine Foods, Inc. (the “Company”),
hereby certify, based on our knowledge, that the Annual Report on Form 10-K of the Company for the fiscal year ended May 30,
2026 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and
that the information contained in the Report fairly presents, in all material respects, the financial condition and results of
operatio ns of the Company.
/s/ Sherman L. Miller
Sherman L. Miller
President and Chief Executive Officer
/s/ Max P. Bowman
Max P. Bowman
Vice President and Chief Financial Officer
Date:
July 22, 2026