We assumed several non-cancelable operating leases for trucks from a prior acquisition. The initial terms on these leases ranged from five to seven years. We do not intend to exercise renewal options beyond the initial term.

~~Processing machines~~

Change in Accounting Principle

Effective

May

31,

2020,

the

Company

adopted

ASU

2016-13,

Financial

Instruments

–

Credit

Losses

(Topic

326),

which

intended

improve

financial

reporting

requiring

timely

recording

credit

losses

loans

and

other

financial

instruments held by financial institutions and other ~~equipment~~organizations.

The guidance replaces the prior “incurred loss” approach with

~~We lease~~ an “expected

loss” model

and requires

measurement of

all expected

credit losses

for financial

assets held

at the

reporting date

based

historical

experience,

current

conditions,

and

reasonable

and

supportable

forecasts.

The

Company

adopted

the

guidance on

a ~~processing machine~~ modified

retrospective basis

through a ~~finance lease arrangement assumed in an acquisition.~~

cumulative effect

adjustment to

retained earnings

as of

the beginning

the period of

adoption. The ~~lease contains~~Company

evaluated its current

methodology of

estimating allowance for

doubtful accounts and

the

risk

profile

its

receivables

portfolio

and

developed

model

that

includes

the

qualitative

and

forecasting

aspects

the

“expected

loss”

model

under

the

amended

guidance.

The

Company

finalized

its

assessment

the

impact

the

amended

guidance and recorded a ~~purchase option~~$

422

thousand cumulative increase to retained earnings at the end of the term that we intend to exercise. The company leases various pieces of equipment such as forklifts, pallet jacks, and other items in support of operations. These leases are cancelable and non-cancelable with remaining terms ranging from one month to five years.May 31, 2020.

~~Recently Adopted Accounting Standards~~

In February 2016, the FASB issued ASU 2016-02, Leases. The purpose of the standard is to improve transparency and comparability related to the accounting and reporting of leasing arrangements. The new standard establishes a ROU model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations.

The effective date for the new standard, for the Company, was June 2, 2019 and the Company adopted the new standard on that date. The Company elected a modified retrospective transition approach, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either its effective date or the beginning of the earliest comparative period presented in the financial statements as its date of initial application. We used June 2, 2019 as the date of initial application. If an entity chooses the second option, the transition requirements for existing leases apply to leases entered into between the date of initial application and the effective date. The entity must recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. Because the Company chose the first option, the Company has not recast its comparative period financial statements. In connection with adopting the new standard, the Company reclassified its presentation of finance lease obligations and property in the financial statements for all periods presented.

The new standard provides a number of optional practical expedients in transition. The Company elected practical expedients which permit us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs.

The new standard provides practical expedients for an entity’s initial and ongoing accounting. We elected the short-term lease recognition exemption for all leases that qualify. For the leases that qualify, we do not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. We also elected the practical expedient to not separate lease and non-lease components for all of our leases.

~~Implementation of the new standard did not have a material effect on our financial statements. See~~ ~~Note~~ 6 ~~for additional information.~~

~~Reclassification~~

~~Certain reclassifications were made to the fiscal 2019 financial statements to conform to the fiscal 2020 financial statement presentation. These reclassifications had no effect on income.~~

~~Index~~

Note 2 - ~~Acquisition~~Investment

Effective on October 20, 2019, the Company acquired certain assets of Mahard Egg Farm (Mahard), relating to its commercial shell egg production, processing, distribution and sales for $45.5 million, including a potential post-closing payment of $1 million. The acquired assets include facilities with current capacity for approximately 3.9 million laying hens and permitted capacity for up to 8.0 million laying hens, a feed mill, pullet raising facilities and related production facilities located in Chillicothe, Texas, and Nebo, Oklahoma, and a distribution warehouse located in Gordonville, Texas. Mahard owned equity interests in the Company's majority owned subsidiary, Texas Egg Products, LLC (TEP). As a result of the acquisition, the Company now owns 93.2% of TEP. The acquired operations of Mahard are included in the accompanying financial statements as of October 20, 2019. Acquisition related costs incurred during the period were immaterial to the financial statements.Securities

~~Pending the finalization of the Company's valuation, the following table summarizes the preliminary aggregate purchase price allocation for Mahard (in thousands):~~


~~Inventory~~	$	~~5,276~~
~~Property, plant and equipment~~	~~38,433~~
~~Customer list and non-compete agreement~~	~~2,000~~
~~Liabilities assumed~~	~~(194)~~
~~Total purchase price~~	~~45,515~~
~~Deferred purchase price~~	~~(1,000)~~
~~Cash consideration paid at closing~~	$	~~44,515~~

~~Subsequent to February 29, 2020, the Company paid the $1 million deferred purchase price.~~

~~Note 3 - Inventories~~

~~Inventories consisted of the following (in thousands):~~

February 29, 2020 June 1, 2019
Flocks, net of amortization $ 111,275 $ 105,536
Eggs and egg products 18,117 14,318
Feed and supplies 62,029 52,383
$ 191,421 $ 172,237

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 February 29, 2020 consisted of approximately 9.9 million pullets and breeders and 40.1 million layers.

~~Index~~

~~Note 4 - InvestmentSecurities~~

The following represents the Company’s

investment securities as of February ~~29,~~27, 2021 and May 30, 2020 ~~and June 1, 2019~~ (in

thousands):

February 29, 2020 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value
Municipal bonds $ 18,862 $ 134 $ — $ 18,996
Corporate bonds 59,329 329 — 59,658
Certificates of deposits 1,003 — 2 1,001
Asset backed securities 1,196 12 — 1,208
Total current investment securities $ 80,390 $ 475 $ 2 $ 80,863
Mutual funds $ 1,994 $ 661 $ — $ 2,655
Total noncurrent investment securities $ 1,994 $ 661 $ — $ 2,655

June 1, 2019 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value
US government and agency obligations $ 30,896 $ 78 $ — $ 30,974
Municipal bonds 50,220 133 — 50,353
Commercial paper 9,953 — 8 9,945
Corporate bonds 147,068 94 — 147,162
Certificates of deposits 6,149 — 1 6,148
Asset backed securities 5,589 10 — 5,599
Total current investment securities $ 249,875 $ 315 $ 9 $ 250,181
Mutual funds $ 2,331 $ 1,026 $ — $ 3,357
Total noncurrent investment securities $ 2,331 $ 1,026 $ — $ 3,357

February 27, 2021

Amortized

Cost

Unrealized

Gains

Unrealized

Losses

Estimated

Fair Value

Municipal bonds

16,157

16,209

Commercial paper

6,345

Corporate bonds

92,256

1,062

93,318

Certificates of deposits

2,084

2,077

Asset backed securities

9,823

9,822

Total current

investment securities

126,665

1,114

127,771

Mutual funds

2,293

1,424

3,717

Total noncurrent

investment securities

2,293

1,424

3,717

43981

Amortized

Cost

Unrealized

Gains

Unrealized

Losses

Estimated

Fair Value

Municipal bonds

16,093

16,179

Commercial paper

6,965

6,982

Corporate bonds

125,594

1,274

126,868

Certificates of deposits

1,492

Asset backed securities

2,629

2,642

Total current

investment securities

152,773

1,390

154,163

Mutual funds

2,005

744

2,749

Total noncurrent

investment securities

2,005

744

2,749

Available-for-sale

Proceeds from sales

and maturities of investment

securities available-for-sale

were ~~$181.5~~ $

85.2

million and ~~$160.2~~ $

181.5

million during the

thirty-nine weeks

ended February 27,

2021 and

February 29,

2020,

respectively.

Gross realized

gains for

the thirty-nine

weeks

ended

February

27,

2021

and

February

29,

2020

were

116

thousand

and

246

thousand,

respectively.

There

were

thousand

and

thousand

gross

realized

losses

for

the

thirty-nine

weeks

ended February

27,

2021

and

February

29,

2020,

respectively.

There were

allowance for credit losses at February 27, 2021 and May 30, 2020.

Index

Actual maturities

may differ

from contractual

maturities as some

borrowers have

the right to

call or prepay

obligations with

without penalties.

Contractual maturities of current investments at February 27, 2021 are

as follows (in thousands):

Estimated Fair Value

Within one year

44,862

1-5 years

82,909

Total

127,771

Noncurrent

There were

sales of

noncurrent investment

securities during

the thirty-nine

weeks ended February ~~29, 2020~~

27, 2021.

Proceeds from

sales

and ~~March 2, 2019, respectively. Gross realized gains for~~

maturities

noncurrent

investment

securities

were

1.2

million

during

the

thirty-nine

weeks

ended February

29,

2020.

Gross

realized

gains

for

the

thirty-nine

weeks

ended February

29,

2020 ~~and March 2, 2019~~

were ~~$246,000 and $7,000, respectively. Gross~~

611

thousand.

There

were

realized

losses for the thirty-nine weeks ended February 27, 2021 and February

29, ~~2020 and March 2, 2019 were $7,000 and $35,000, respectively. For purposes of determining gross realized gains and losses, the cost of securities sold is based on the specific identification method.~~2020.

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 investments at February 29, 2020, are as follows (in thousands):


	~~Estimated Fair Value~~
~~Within one year~~	$	~~67,854~~
~~1-5 years~~	~~13,009~~
~~Total~~	$	~~80,863~~

~~Index~~

~~Noncurrent~~

The mutual funds are classified as “Other long-term assets” in the Company’s Condensed Consolidated Balance Sheets. Gains and losses are recognized in other income (expenses) as Other, net in the Company's Condensed Consolidated Statements of Operations.

Proceeds from sales and maturities of noncurrent investment securities were $1.2 million and $84,000 during the thirty-nine weeks ended February 29, 2020 and March 2, 2019, respectively. Gross realized gains for the thirty-nine weeks ended February 29, 2020 and March 2, 2019 were $611,000 and $48,000, respectively. There were 0 realized losses for the thirty-nine weeks ended February 29, 2020 and March 2, 2019. For purposes of determining gross realized gains and losses, the cost of securities sold is based on the specific identification method.

໿

Note 53 - 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

paid

transfer

the

liability

new

obligor

transaction

between

such

parties,

not

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

- Quoted prices in active markets for identical assets or liabilities

•

Level 2

- Inputs

other than

quoted

prices included

in Level

1 that

are observable

for the

asset or

liability,

either

directly or indirectly,

including:

◦

Quoted prices for similar assets or liabilities in active markets

◦

Quoted prices for identical or similar assets in non-active markets

◦

Inputs other than quoted prices ~~included in Level 1~~ that are observable for the asset or liability ~~either directly~~

◦

Inputs derived principally from or ~~indirectly~~corroborated by other observable

market data

•

Level 3

- Unobservable inputs for the asset or liability that are

supported by little or no market activity and that

are

significant to the fair value of the assets or liabilities

The disclosures of fair value of certain financial assets and liabilities that are recorded

at cost are as follows:

Cash and cash ~~equivalents:~~equivalents, accounts receivable,

and accounts payable:

The carrying amount approximates fair value due to the

short maturity of these instruments.

~~Long-term debt:~~

Lease obligations:

The carrying value of the Company’s ~~long-term debt~~ lease obligations

is at its ~~stated value. We have not elected to carry our long-term debt at~~present value which approximates fair value. Fair values for debt are based on quoted market prices or published forward interest rate curves, which are level 2 inputs. The fair value and carrying value of the Company’s borrowings under its long-term debt were as follows (in thousands):

February 29, 2020 June 1, 2019
Carrying Value Fair Value Carrying Value Fair Value
Liabilities
Note payable $ — $ — $ 1,500 $ 1,501
Finance lease obligations 908 823 1,054 940
Total liabilities measured at fair value $ 908 $ 823 $ 2,554 $ 2,441

~~Index~~

Assets and Liabilities Measured at Fair

Value

on a Recurring Basis

accordance

with

the

fair

value

hierarchy

described

above,

the

following

table

shows

the

fair

value

financial

assets and

liabilities measured at fair value on a recurring basis as of February ~~29, 2020~~27, 2021 and ~~June 1, 2019~~May 30,

2020 (in thousands):

໿

Total
February 29, 2020 Level 1 Level 2 Level 3 Balance
Assets
Municipal bonds $ — $ 18,996 $ — $ 18,996
Corporate bonds — 59,658 — 59,658
Certificates of deposits — 1,001 — 1,001
Asset backed securities — 1,208 — 1,208
Mutual funds 2,655 — — 2,655
Total assets measured at fair value $ 2,655 $ 80,863 $ — $ 83,518

໿

June 1, 2019 Level 1 Level 2 Level 3 Balance
Assets
US government and agency obligations $ — $ 30,974 $ — $ 30,974
Municipal bonds — 50,353 — 50,353
Commercial paper — 9,945 — 9,945
Corporate bonds — 147,162 — 147,162
Certificates of deposits — 6,148 — 6,148
Asset backed securities — 5,599 — 5,599
Mutual funds 3,357 — — 3,357
Total assets measured at fair value $ 3,357 $ 250,181 $ — $ 253,538

February 27, 2021

Level 1

~~Investment securities – available-for-sale have maturities~~Level 2

Level 3

Balance

Assets

Municipal bonds

16,209

Commercial paper

6,345

Corporate bonds

93,318

Certificates of deposits

2,077

Asset backed securities

9,822

Mutual funds

3,717

Total assets measured at fair

value

3,717

127,771

131,488

Index

43981

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

16,179

Commercial paper

6,982

Corporate bonds

126,868

Certificates of deposits

1,492

Asset backed securities

2,642

Mutual funds

2,749

Total assets measured at fair

value

2,749

154,163

156,912

Investment

securities

–

available-for-sale

classified

as Level

consist

securities

with maturities

three

months

or longer

when ~~purchased, and are classified as current, because they are available for current operations.~~purchased. Observable inputs for these securities are yields, credit risks, default

rates, and volatility.

໿

~~Index~~

Note 4 - Inventories

~~Note 6 - Leases~~

Expenses related to operating leases, amortization of finance lease ROU assets and finance lease interest are included in Cost of sales, Selling general and administrative expense, and Interest income, net in the Condensed Consolidated Statements of Operations. The Company’s lease cost consistsInventories consisted of the following as of February 27, 2021 and

May 30, 2020 (in thousands):

13 Weeks Ended February 29, 2020 39 Weeks Ended February 29, 2020
Operating Lease cost $ 237 $ 635
Finance Lease cost
Amortization of right-of-use asset $ 38 $ 115
Interest on lease obligations $ 10 $ 33
Short term lease cost $ 921 $ 2,649

~~Future minimum lease payments under non-cancelable leases are as follows (in thousands):~~

As of February 29, 2020
Operating Leases Finance Leases
Remainder fiscal 2020 $ 235 $ 60
2021 930 239
2022 806 239
2023 919 239
2024 130 219
Thereafter 31 —
Total 3,051 996
Less imputed interest (325) (88)
Total $ 2,726 $ 908

~~The weighted-average remaining lease term and discount rate for lease liabilities included in our Condensed Consolidated Balance Sheet are as follows:~~

As of February 29, 2020
Operating Leases Finance Leases
Weighted-average remaining lease term (years) 3.7 3.8
Weighted-average discount rate 5.9 % 4.9 %

February 27, 2021

43981

Flocks, net of amortization

115,904

110,198

Eggs and egg products

18,069

18,487

Feed and supplies

73,766

58,531

207,739

187,216

~~Index~~

grow

and

maintain

flocks

layers

(mature

female

chickens),

pullets

(female

chickens,

under

weeks

age),

and

breeders (male and female chickens used to produce fertile eggs

to hatch for egg production flocks).

Our total flock at February

27, 2021 consisted of approximately

9.6

million pullets and breeders and

41.3

million layers.

Note 75 - Accrued Dividends Payable and Dividends per Common

accrue dividends at

the end of

each quarter according

to the Company’s

dividend policy adopted

by its Board

of Directors.

The Company

pays a dividend

to shareholders

of its Common

Stock and

Class A 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

(1/3) of such

quarterly income. Dividends

are paid to

shareholders 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 pays

dividends

to shareholders 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

the

last

quarter

for

which

dividend

was

paid.

For

the

third

quarter

fiscal

2021,

will

pay

cash

dividend

approximately

0.034

per share

to holders

of our

Common Stock

and

Class A

Common

Stock.

The amount

of the ~~last quarter for which a dividend was paid. At~~

accrual is

recorded in Accounts payable and accrued expenses in the ~~end of the third quarter of fiscal 2020, the amount of cumulative losses to be recovered before payment of a dividend was $61.9 million.~~Company’s

Condensed Consolidated Balance Sheets.

Index

our

condensed

consolidated

statement

operations,

determine

dividends

per

common

accordance

with

the

computation in the following table (in thousands, except per share data):

13 Weeks Ended 39 Weeks Ended
February 29, 2020 March 2, 2019 February 29, 2020 March 2, 2019
Net income (loss) attributable to Cal-Maine Foods, Inc. available for dividend $ 13,749 $ 39,777 $ (42,072) $ 73,989
1/3 of net income attributable to Cal-Maine Foods, Inc. available for dividend $ — $ 13,245 $ — $ 24,626
Common stock outstanding (shares) 43,974 43,895
Class A common stock outstanding (shares) 4,800 4,800
Total common stock outstanding (shares) 48,774 48,695
Dividends per common share* $ — $ 0.272 $ — $ 0.506

*Dividends per common share = 1/3 of

Thirteen Weeks

Ended

Thirty-nine Weeks

Ended

February 27, 2021

February 29, 2020

February 27, 2021

February 29, 2020

Net income (loss) attributable to Cal-Maine

Foods, Inc.

13,548

13,749

6,304

(42,072)

Cumulative losses to be recovered prior to

payment of divided at beginning of period

(8,614)

(75,582)

(1,370)

(19,761)

Net income attributable to Cal-Maine Foods,

Inc. available for dividend

4,934

1/3 of net income attributable to Cal-Maine

Foods, Inc. available for dividend ~~÷ Total~~

1,645

Common stock outstanding (shares)

44,056

Class A common stock outstanding (shares).

4,800

Total common stock

outstanding (shares)

48,856

Dividends per common share*

0.034

13*

Dividends per common share

= 1/3 of Net

income (loss) attributable to

Cal-Maine Foods, Inc. available

for dividend ÷ Total

common stock

outstanding (shares).

~~Index~~

Note 86 - Equity

The following reflects the equity activity, ~~including our noncontrolling interest,~~

for the thirteen ~~weeks ended February 29, 2020~~ and ~~March 2, 2019 (in thousands):~~

Thirteen Weeks Ended February 29, 2020
Cal-Maine Foods, Inc. Stockholders
Common Stock
Class A Treasury Paid In Accum. Other Retained Noncontrolling
Amount Amount Amount Capital Comp. Loss Earnings Interest Total
Balance at November 30, 2019 $ 703 $ 48 $ (25,888) $ 58,652 $ (269) $ 900,485 $ 562 $ 934,293
Other comprehensive loss, net of tax — — — — (29) — — (29)
Restricted stock grant, net of forfeitures — — 103 (103) — — — —
Purchase company stock to satisfy withholding obligations from vesting of restricted stock — — (889) — — — — (889)
Restricted stock compensation — — — 886 — — — 886
Net income — — — — — 13,749 22 13,771
Balance at February 29, 2020 $ 703 $ 48 $ (26,674) $ 59,435 $ (298) $ 914,234 $ 584 $ 948,032

໿

Thirteen Weeks Ended March 2, 2019
Cal-Maine Foods, Inc. Stockholders
Common Stock
Class A Treasury Paid In Accum. Other Retained Noncontrolling
Amount Amount Amount Capital Comp. Income Earnings Interest Total
Balance at December 1, 2018 $ 703 $ 48 $ (24,974) $ 55,079 $ (882) $ 947,768 $ 2,886 $ 980,628
Other comprehensive income, net of tax — — — — 921 — — 921
Restricted stock grant, net of forfeitures — — 88 (88) — — — —
Purchase company stock to satisfy withholding obligations from vesting of restricted stock — — (979) — — — — (979)
Restricted stock compensation — — — 866 — — — 866
Dividends — — — — — (13,258) — (13,258)
Net income — — — — — 39,777 88 39,865
Balance at March 2, 2019 $ 703 $ 48 $ (25,865) $ 55,857 $ 39 $ 974,287 $ 2,974 $ 1,008,043

~~Index~~

~~The following reflects the equity activity, including our noncontrolling interest, for the~~ thirty-nine weeks ended February 27,

2021 and February 29, 2020 ~~and March 2, 2019 (in~~

(in thousands):

Thirty-nine Weeks Ended February 29, 2020
Cal-Maine Foods, Inc. Stockholders
Common Stock
Class A Treasury Paid In Accum. Other Retained Noncontrolling
Amount Amount Amount Capital Comp. Loss Earnings Interest Total
Balance at June 1, 2019 $ 703 $ 48 $ (25,866) $ 56,857 $ 355 $ 954,527 $ 3,182 $ 989,806
Other comprehensive loss, net of tax — — — — (653) — — (653)
Restricted stock grant, net of forfeitures — — 102 (102) — — — —
Purchase of company stock to satisfy withholding obligations from vesting of restricted stock — — (910) — — — — (910)
Distributions to noncontrolling interest partners — — — — — — (755) (755)
Reclass of equity portion of Texas Egg Products, LLC in connection with acquisition, see Note 2
— — — — — 1,779 (1,779) —
Restricted stock compensation — — — 2,680 — — — 2,680
Net loss — — — — — (42,072) (64) (42,136)
Balance at February 29, 2020 $ 703 $ 48 $ (26,674) $ 59,435 $ (298) $ 914,234 $ 584 $ 948,032

Thirty-nine Weeks Ended March 2, 2019
Cal-Maine Foods, Inc. Stockholders
Common Stock
Class A Treasury Paid In Accum. Other Retained Noncontrolling
Amount Amount Amount Capital Comp. Income Earnings Interest Total
Balance at June 2, 2018 $ 703 $ 48 $ (24,966) $ 53,323 $ (693) $ 924,918 $ 2,349 $ 955,682
Other comprehensive income, net of tax — — — — 732 — — 732
Restricted stock grant, net of forfeitures — — 86 (86) — — — —
Purchase company stock to satisfy withholding obligations from vesting of restricted stock — — (985) — — — — (985)
Restricted stock compensation — — — 2,620 — — — 2,620
Dividends — — — — — (24,620) — (24,620)
Net income — — — — — 73,989 625 74,614
Balance at March 2, 2019 $ 703 $ 48 $ (25,865) $ 55,857 $ 39 $ 974,287 $ 2,974 $ 1,008,043

Thirteen Weeks Ended February

27, 2021

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum. Other

Retained

Amount

Capital

Comp. Income

Earnings

Total

Balance at November 28, 2020

703

(26,723)

62,206

151

968,325

1,004,710

Other comprehensive loss, net of

tax

—

(286)

—

(286)

Purchase of company stock

—

(826)

—

(826)

Restricted stock compensation

—

964

—

964

Dividends

—

(1,661)

Net income

—

13,548

Balance at February 27, 2021

703

(27,549)

63,170

(135)

980,212

1,016,449

Index

Thirteen Weeks Ended February 29, 2020

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum. Other

Retained

Noncontrolling

Amount

Capital

Comp. Income

Earnings

Interest

Total

Balance at November 30,

2019

703

(25,888)

58,652

(269)

900,485

562

934,293

Other comprehensive

loss, net of tax

—

(29)

—

(29)

Restricted stock

forfeitures

—

103

(103)

—

Purchase of company

stock

—

(889)

—

(889)

Restricted stock

compensation

—

886

—

886

Net income

—

13,749

13,771

Balance at February 29,

2020

703

(26,674)

59,435

(298)

914,234

584

948,032

Thirty-nine Weeks Ended February

27, 2021

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum. Other

Retained

Amount

Capital

Comp. Income

Earnings

Total

Balance at May 30, 2020

703

(26,674)

60,372

975,147

1,009,675

Impact of ASC 326, see

Note 1

—

422

Balance at May 31, 2020

703

(26,674)

60,372

975,569

1,010,097

Other comprehensive loss, net of

tax

—

(214)

—

(214)

Restricted stock forfeitures

—

(4)

—

Purchase of company stock

—

(871)

—

(871)

Restricted stock compensation

—

2,789

—

2,789

Contributions

—

Dividends

—

(1,661)

Net income

—

6,304

Balance at February 27, 2021

703

(27,549)

63,170

(135)

980,212

1,016,449

Index

Thirty-nine Weeks Ended February 29, 2020

Cal-Maine Foods, Inc. Stockholders

Common Stock

Class A

Treasury

Paid In

Accum. Other

Retained

Noncontrolling

Amount

Capital

Comp. Income

Earnings

Interest

Total

Balance at June 01, 2019

703

(25,866)

56,857

355

954,527

3,182

989,806

Other comprehensive

loss, net of tax

—

(653)

—

(653)

Restricted stock

forfeitures

—

102

(102)

—

Purchase of company

stock

—

(910)

—

(910)

Distributions to

noncontrolling interest

partners

—

(755)

Reclass of equity portion

of Texas Egg Products,

LLC in connection with

acquisition

—

1,779

(1,779)

—

Restricted stock

compensation

—

2,680

—

2,680

Net loss

—

(42,072)

(64)

(42,136)

Balance at February 29,

2020

703

(26,674)

59,435

(298)

914,234

584

948,032

Note 7 - Net Income (Loss) per Common Share

Basic net

income (loss)

per share

attributable to

Cal-Maine Foods,

Inc. is

based on

the weighted

average Common

Stock and

Class A Common

Stock outstanding.

Diluted net income

per share attributable

to Cal-Maine Foods,

Inc. is based

on weighted-

average

common

outstanding

during

the

relevant

period

adjusted

for

the

dilutive

effect

share-based

awards.

Restricted

121

thousand

were

antidilutive

due

the

net

loss

for

the

thirty-nine

weeks

ended

February

29,

2020.

These shares were not included in the diluted net loss per share calculation.

Index

The

following

table

provides

reconciliation

the

numerators

and

denominators

used

determine

basic

and

diluted

net

income per common share attributable to Cal-Maine Foods, Inc.

(amounts in thousands, except per share data):

Thirteen Weeks

Ended

Thirty-nine Weeks

Ended

February 27, 2021

February 29, 2020

February 27, 2021

February 29, 2020

Numerator

Net income (loss)

13,548

13,771

6,304

(42,136)

Less: Income (loss) attributable to

noncontrolling interest

(64)

Net income (loss) attributable to Cal-

Maine Foods, Inc.

13,548

13,749

6,304

(42,072)

Denominator

Weighted-average

common shares

outstanding, basic

48,530

48,473

48,511

48,455

Effect of dilutive restricted shares

129

115

138

Weighted-average

common shares

outstanding, diluted

48,659

48,588

48,649

48,455

Net income (loss) per common share

attributable to Cal-Maine Foods, Inc.

Basic

0.28

0.13

(0.87)

Diluted

0.28

0.13

(0.87)

Note 98 - Revenue Recognition

Satisfaction of Performance Obligation

The vast

majority of

the Company’s

revenue is

derived from

contracts with

customers based

on the

customer placing

an order

for products.

Pricing for the most part

is determined when the

Company and the customer

agree upon the specific

order, which

establishes the contract for that order.

Revenues are

recognized in

an amount

that reflects

the net

consideration we

expect to

receive in

exchange for

the goods.

Our

shell eggs

are sold

at prices

related to ~~Urner Barry Spot Egg Market Quotations,~~

independently

quoted wholesale

market prices,

negotiated prices

or formulas

related to

our costs

of production.

The Company’s

sales predominantly

contain a

single performance

obligation.

recognize revenue

upon satisfaction

of the performance

obligation with

the customer,

which typically occurs

within days of

the Company

and the

customer agreeing upon the order.

Returns and Refunds

Some of our contracts

include a guaranteed sale

clause, pursuant to which

we credit the customer’s

account for product

that the

customer is unable to

sell before expiration.

The Company records an

estimate of returns and

refunds by using historical return

data and

comparing to

current period

sales and

accounts receivable.

The allowance

is recorded

as a

reduction in

sales with

corresponding reduction in trade accounts receivable.

Sales Incentives Provided to Customers

The

Company

periodically

provides

incentive

offers

its

customers

encourage

purchases.

Such

offers

include

current

discount offers

(e.g., percentage

discounts off

current purchases), inducement

offers (e.g.,

offers for

future discounts subject

a minimum

current purchase),

and other

similar offers.

Current discount

offers,

when accepted

by customers,

are treated

as a

reduction

the sales

price

of the

transaction,

while inducement

offers,

when

accepted

customers,

are

treated

as a

reduction to sales price based on estimated future redemption rates.

Index

Disaggregation of Revenue

The following table provides revenue disaggregated by product category ~~(in~~

(in thousands):

13 Weeks Ended 39 Weeks Ended
February 29, 2020 March 2, 2019 February 29, 2020 March 2, 2019
Non-specialty shell egg sales $ 210,329 $ 234,960 $ 518,898 $ 659,446
Specialty shell egg sales 117,672 131,120 332,092 364,222
Co-pack specialty shell egg sales 7,347 7,052 20,026 20,055
Egg products 9,212 9,520 24,210 32,656
Other 1,028 1,340 3,050 4,237
$ 345,588 $ 383,992 $ 898,276 $ 1,080,616

Thirteen Weeks

Ended

Thirty-nine Weeks

Ended

February 27, 2021

February 29, 2020

February 27, 2021

February 29, 2020

Conventional shell egg sales

203,189

210,329

560,297

518,898

Specialty shell egg sales

145,210

125,019

408,537

352,118

Egg products

9,098

9,212

25,736

24,210

Other

1,583

1,028

4,619

3,050

359,080

345,588

999,189

898,276

Contract Costs

The Company can

incur costs to obtain

or fulfill a contract

with a customer.

The amortization period

of these costs is

less than

one year; therefore, they are expensed as incurred.

Contract Balances

The Company

receives payment

from

customers based

on specified

terms that

are generally

less than

30 days

from

delivery.

There are

rarely contract

assets or

liabilities related

to performance

under the ~~contract.~~

contract and

they are generally

immaterial to

the

financial statements.

Note 9 - Leases

Expenses related

to operating

leases, amortization

of finance

leases, right-of-use

assets, and

finance lease

interest are

included

in Cost of sales, Selling general and administrative expense, and Interest

income, net in the Condensed Consolidated Statements

of Operations. The Company’s lease cost

consists of the following (in thousands):

13 Weeks Ended

February 27, 2021

39 Weeks Ended

February 27, 2021

Operating Lease cost

233

703

Finance Lease cost

Amortization of right-of-use asset

125

Interest on lease obligations

Short term lease cost

857

2,714

Index

Future minimum lease payments under non-cancelable leases are as follows (in

thousands):

As of February 27, 2021

Operating Leases

Finance Leases

Remainder fiscal 2021

224

2022

802

239

2023

539

239

2024

380

218

2025

130

2026

Thereafter

Total

2,106

764

Less imputed interest

(185)

(60)

Total

1,921

704

The

weighted-average

remaining

lease

term

and

discount

rate

for

lease

liabilities

included

our

Condensed

Consolidated

Balance Sheet are as follows:

As of February 27, 2021

Operating Leases

Finance Leases

Weighted-average

remaining lease term (years)

3.0

2.8

Weighted-average

discount rate

5.9

4.9

Note 10 - Stock Based Compensation

October

2020,

shareholders

approved

the

Amended

and

Restated

Cal-Maine

Foods,

Inc.

2012

Omnibus

Long-Term

Incentive

Plan

(the

“Plan”).

The

purpose

the

Plan

assist

and

our

subsidiaries

attracting

and

retaining

selected

individuals

who

are

expected

contribute

our

long-term

success.

The

maximum

number

common

stock

available

for

awards

under

the

Plan

2,000,000

which

1,128,488

remain

available

for

issuance,

and

may

authorized but

unissued shares

or treasury

shares. Awards

may be

granted under

the Plan

to any

employee, any

non-employee

member of the Company’s

Board of Directors, 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).

The only

outstanding awards

under the

Plan are

restricted stock

awards. The

restricted stock

vests one

to three

years from

the

grant

date, or

upon death

or disability,

change

in 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 over the vesting period.

Total ~~stock based~~

stock-based compensation

expense was

2.8

million and

2.7

million for

the thirty-nine

weeks ended

February 27,

2021

and February 29, 2020, respectively.

Unrecognized

compensation expense ~~was $2.7~~

as a

result of

non-vested

shares of

restricted stock

outstanding under

the 2012

Omnibus

Long-Term

Incentive Plan

at February

27, 2021

of $

7.5

million ~~and $2.6 million~~ will

be recorded

over a

weighted average

period of

2.3

years.

Refer

Note

our

audited

financial

statements

our

2020

Annual

Report

for

further

information

our

stock

compensation plans.

Index

The Company’s restricted share activity

for the thirty-nine weeks ended February ~~29,~~27, 2021 follows:

Number of

Weighted

Average Grant

Date Fair Value

Outstanding, May 30, 2020

273,046

41.36

Granted

110,560

37.71

Vested

(79,328)

43.96

Forfeited

(4,431)

40.12

Outstanding, February 27, 2021

299,847

39.35

Note 11 – Income Taxes

The differences

between income

tax expense

(benefit)

at the

Company’s

effective

income tax

rate and

income tax

expense at

the statutory federal income tax rate for the thirteen and thirty-nine

weeks ended as of February 27, 2021 were as follows:

Thirteen Weeks

Ended

Thirty-nine Weeks

Ended

February 27, 2021

Statutory federal income tax

2,907

543

Enacted net operating loss carryback provision

(6,422)

Domestic manufacturers deduction

1,408

Other, net

391

(1,716)

(4,080)

On March 2,

27, 2020,

the Coronavirus

Aid, Relief,

and Economic

Security

Act (the

“CARES Act”)

was enacted.

The CARES

Act

contains

several income

tax provisions,

as well

as other

measures,

that are

intended to

assist businesses

impacted

the

economic

effects

the

COVID-19

pandemic.

The

most

significant

provision

the

CARES

Act

that

materially

affects

our

accounting

for

income

taxes

includes

five-year

carryback

allowance

for

taxable

net

operating

losses generated

tax

years

2018 through 2020, our fiscal years 2019 ~~respectively.~~through 2021.

~~Unrecognized compensation expense as~~Our financial

statements for

the thirteen

weeks ended

February 27,

2021 were

affected by

the changes

enacted by

the CARES

Act.

As a result of ~~non-vested shares~~ the applicable accounting

guidance and the provisions enacted by the CARES Act, our

income tax provision

for the

third quarter

of fiscal

2021 reflects

the ~~2012 Omnibus Long-Term Incentive Plan at February 29, 2020~~ carryback

of ~~$7.2 million will be~~ taxable

net operating

losses generated

during periods

in which

the

statutory

federal

income

tax

rate

was

periods

which

the

statutory

federal

income

tax

rate

was

Due

the

difference

in statutory

rates, we

recorded ~~over~~ a ~~weighted average period of 2.3 years. Refer to Note 10 of our June 1, 2019 audited financial statements for further information on our stock compensation plans.~~

6.4

million discrete

income tax

benefit related

to the

carryback provisions

during

the thirteen

weeks ended

February 27,

2021. Because

the net

operating losses

were carried

back to

years in

which we

initially

reduced our taxable income using

the Domestic Production Activities Deduction,

we recorded a partially offsetting

1.4

~~Index~~

million

~~The Company’s restricted share activity for~~discrete income tax expense during the ~~thirty-nine~~thirteen weeks ended February ~~29, 2020 follows:~~27,

Number of Shares Weighted Average Grant Date Fair Value
Outstanding, June 1, 2019 248,412 $ 43.20
Granted 104,566 38.25
Vested (77,801) 43.00
Forfeited (2,131) 43.20
Outstanding, February 29, 2020 273,046 $ 41.36
2021 to account for the reduced taxable income.

~~Note 11 - Net Income (Loss) per Common Share~~

Basic net loss per share was calculated by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share was calculated by dividing net income by the weighted-average number of common shares outstanding during the period plus the dilutive effects of options and restricted stock. Due to the net loss in the thirty-nine weeks ended February 29, 2020, restricted shares were excluded from the calculation of diluted net loss per share because their inclusion would have been antidilutive. ~~The computations of basic and diluted net loss per share attributable to the Company are as follows (in thousands, except per share data):~~

13 Weeks Ended 39 Weeks Ended
February 29, 2020 March 2, 2019 February 29, 2020 March 2, 2019
Net income (loss) attributable to Cal-Maine Foods, Inc. $ 13,749 $ 39,777 $ (42,072) $ 73,989
Basic weighted-average common shares 48,473 48,417 48,455 48,416
Effect of dilutive securities:
Restricted shares 115 116 — 129
Dilutive potential common shares 48,588 48,533 48,455 48,545
Antidilutive securities excluded from computation of earnings per share — — 121 —
Net income (loss) per common share attributable to Cal-Maine Foods, Inc.:
Basic $ 0.28 $ 0.82 $ (0.87) $ 1.53
Diluted $ 0.28 $ 0.82 $ (0.87) $ 1.52

Note 12 - Commitments and Contingencies

Financial Instruments

The Company maintained

standby letters of credit ~~(LOC)~~

("LOC") totaling ~~$4.2~~ $

4.1

millionat February ~~29, 2020 that~~27,

2021 which were issued

under ~~our~~

the Company's Revolving Credit Facility.

The outstanding LOCs are for the benefit of certain insurance

companies, and are not

recorded as a liability on the consolidated balance sheets.

LEGAL PROCEEDINGS

State of Texas

v. Cal-Maine Foods, Inc. d/b/a Wharton;

and Wharton County Foods, LLC

On April

23, 2020,

the Company

and its subsidiary

Wharton County

Foods, LLC (“WCF”)

were named

as defendants in

State

Texas

Cal-Maine

Foods,

Inc.

d/b/a

Wharton;

and

Wharton

County

Foods,

LLC,

Cause

No.

2020-25427,

the

District

Court of

Harris County,

Texas.

The State

of Texas

(the “State”)

asserted claims

based on

the Company’s

and WCF’s

alleged

violation

the

Texas

Deceptive

Trade

Practices—Consumer

Protection

Act,

Tex.

Bus.

Com.

Code

§§

17.41-17.63

(“DTPA”).

The

State

claimed

that

the

Company

and

WCF

offered

shell

eggs

excessive

exorbitant

prices

during

the

COVID-19

state

emergency

and

made

misleading

statements

about

shell

egg

prices.

The

State

sought

temporary

and

Index

permanent

injunctions

against

the

Company

and

WCF

prevent

further

alleged

violations

the

DTPA,

along

with

over

100,000

in damages. On August 13, 2020, the court granted the defendants’ motion

to dismiss the State’s original petition with

prejudice. On September

11, 2020,

the State filed a

notice of appeal,

which was assigned to

the Texas

Court of Appeals

for the

First District. The

State filed its

opening brief

on December 7,

2020. The

Company and

WCF filed their

response on

February

8, 2021.

Management believes the risk of material loss related to this matter to be remote.

Bell et al. v. Cal-Maine Foods et al.

April

30, 2020,

the Company

was named

as one

of several

defendants

Bell et

al. v.

Cal-Maine

Foods et

al.,

Case No.

1:20-cv-461,

the

Western

District

Texas,

Austin

Division.

The

defendants

include

numerous

grocery

stores,

retailers,

producers, and farms. Plaintiffs assert that defendants

violated the DTPA

by allegedly demanding exorbitant or

excessive prices

for

eggs during

the

COVID-19

state of

emergency.

Plaintiffs

request

certification

of a

class of

all consumers

who purchased

eggs

Texas

sold,

distributed,

produced,

handled

any

the

defendants

during

the

COVID-19

state

emergency.

Plaintiffs seek to enjoin

the Company and other

defendants from selling eggs

at a price more than

10% greater than the price

eggs prior

to the

declaration

of the

state of

emergency

and damages

in the

amount

10,000

per violation,

or $

250,000

for

each violation impacting anyone over

65 years old. On December

1, 2020, the Company and certain

other defendants filed their

motion

dismiss

the

plaintiffs’

first

amended

class

action

complaint.

The

court

has

not

ruled

this

motion

dismiss.

Management believes the risk of material loss related to this matter to be remote.

Kraft Foods Global, Inc. et al. v.

United Egg ~~Antitrust Litigation~~Producers, Inc. et al.

As previously

reported, on

September 25,

2008, the

Company

was named

as one

of several

defendants

in numerous

antitrust

cases involving

the United

States shell

egg

industry.

The Company

settled all

of these

cases, except

for

the claims

of certain

plaintiffs who sought substantial

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

The Kellogg Company.

On September ~~25, 2008,~~

13, 2019,

the ~~Company was named as one of several defendants in numerous antitrust cases involving~~case

with the ~~United States shell egg industry. The cases were consolidated into In re: Processed~~

Egg Products

Plaintiffs was

remanded from

a multi-district

litigation proceeding

the

United

States

District

Court

for

the

Eastern

District

Pennsylvania,

Processed

Egg

Products

Antitrust

Litigation,

MDL No. ~~2:08-md-02002-GP, in~~ 2002, to

the United States District Court

for the ~~Eastern~~ Northern

District of Illinois, Kraft Foods

Global, Inc. et al. v.

United

Egg

Producers,

Inc.

al.,

Case

~~Index~~

No.

1:11-cv-8808,

for

trial.

The

Egg

Products

Plaintiffs

allege

that

the

Company

and

other

~~Pennsylvania (the “District Court”), in three groups~~ defendants

violated

Section

of ~~cases -~~

the

Sherman

Act,

15.

U.S.C.

agreeing

limit

the

production

eggs

and

thereby

illegally to raise the ~~“Direct Purchaser Putative Class Action”,~~ prices that plaintiffs

paid for processed egg products. In particular,

the ~~“Indirect Purchaser Putative Class Action”~~ Egg Products Plaintiffs are

attacking

certain features of

the United Egg

Producers animal-welfare guidelines

and ~~the “Non-Class Cases.” As previously reported,~~ program used by

the Company ~~settled all of~~ and

many other egg

producers. The

Egg Products

Plaintiffs seek

to enjoin

the ~~Direct Purchaser Putative Class Action cases~~ Company

and other

defendants from

engaging in

antitrust violations

and seek treble money damages. The parties filed a joint status

report on May 18, 2020, but no schedule has

yet been entered by

the ~~Indirect Purchaser Putative Class Action cases, and all Non-Class cases except for~~court. It appears that the ~~claims of certain plaintiffs who sought substantial damages allegedly arising from the purchase of egg products (as opposed to shell eggs).~~ case will not be tried until later in 2021 or 2022.

In addition, ~~as previously reported,~~

on October

24, 2019,

the Company

entered into

a confidential

settlement agreement

with The

Kellogg Company

dismissing

all

claims

against

the

Company

for

amount

that ~~does~~

did

not

have

material

impact

the

Company’s

financial

condition or results

of operations. On

November 11,

2019, a stipulation

for dismissal was filed

with the court,

but the court

has

not yet entered a judgment on the filing. The remaining plaintiffs are Kraft Food Global, Inc., General Mills, Inc., and Nestle USA, Inc. (“Egg Products Plaintiffs”). The Egg Products Plaintiffs seek treble damages and injunctive relief under the Sherman Act and are attacking certain features of the UEP animal-welfare guidelines and program used by the Company and many other egg producers. On July 2, 2019 the Egg Products Plaintiffs filed a motion to remand, and on September 13, 2019 the case was remanded 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, No. 1:11-cv-08808 (DP), where it was initially filed, for trial. The Illinois court has not issued a case management order or any other directive.

The Company intends to

continue to defend the remaining

case with the Egg Products Plaintiffs

as vigorously as possible based

defenses

which

the

Company

believes

are

meritorious

and

provable.

Adjustments,

any,

which

might

result

from

the

resolution of

this remaining

matter with

the Egg

Products Plaintiffs

have not

been reflected

in the

financial statements.

While

management

believes

that

there

still

reasonable

possibility

material

adverse

outcome

from

the

case

with

the

Egg

Products Plaintiffs,

at the

present time,

it is not

possible to

estimate the

amount of

monetary exposure,

if any,

to the

Company

due to a range of

factors, including the following,

among others: the matter is in

the early stages of

preparing for trial following

remand;

any

trial

will

before

different

judge

and

jury

different

court

than

prior

cases;

there

are

significant

factual issues

to be

resolved; and

there are

requests for

damages other

than compensatory

damages

(i.e., injunction

and treble

money damages).

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. and affiliates, Cobb-Vantress,

Inc., Cargill, Inc. and its

affiliate, George’s,

Inc. and

its affiliate,

Peterson Farms, Inc.

and Simmons Foods,

Inc. The

State of Oklahoma

claims that through

the disposal of

chicken

litter the

defendants have

polluted the

Illinois River

Watershed.

This watershed

provides

water to

eastern Oklahoma.

Index

The complaint

seeks injunctive

relief and

monetary damages,

but the

claim for

monetary damages

has been

dismissed by

the

court.

Cal-Maine

Foods,

Inc.

discontinued

operations

the

watershed.

Accordingly,

not

anticipate

that

Cal-Maine

Foods,

Inc.

will

materially

affected

the

request

for

injunctive

relief

unless

the

court

orders

substantial

affirmative

remediation. Since

the litigation

began, Cal-Maine

Foods, Inc.

purchased 100%

of the membership

interests of

Benton County

Foods, LLC,

which is

an ongoing

commercial shell

egg operation

within the ~~Company believes are meritorious and provable. While management believes that the likelihood of~~

Illinois River

Watershed.

Benton County

Foods,

LLC is not a ~~material adverse outcome~~defendant in the ~~overall egg antitrust litigation has been significantly reduced as a result of the settlements and rulings described above, there is still a reasonable possibility of a material adverse outcome~~litigation.

The trial in the ~~remaining egg antitrust litigation. At~~case

began in September 2009 and

concluded in February 2010. The

case was tried without a jury,

and the ~~present time, however, it is~~court

has not ~~possible~~ yet issued its ruling. Management believes the risk of material loss related

to ~~estimate the amount of monetary exposure, if any,~~this matter to ~~the Company because of this remaining case. Adjustments, if any, which might result from the resolution of these remaining legal matters, have not been reflected in the financial statements.~~be remote.

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 13 - Related Party Transaction

August

24,

2020,

Mrs.

Jean

Reed

Adams,

the

wife

the

Company’s

late

founder

Fred

Adams,

Jr.,

and

the

Fred

Adams,

Jr.

Daughters’

Trust,

dated

July

20,

2018

(the

“Daughters’

Trust”),

which

the

daughters

Mr.

Adams

are

beneficiaries

(together,

the

“Selling

Stockholders”),

completed

registered

secondary

public

offering

6,900,000

~~Index~~

~~ITEM 2. MANAGEMENT’SDISCUSSIONAND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Common Stock held by them, pursuant to a previously

disclosed Agreement Regarding Common Stock (the “Agreement”)

filed

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”) relatingas an exhibit to our ~~shell egg business, including estimated future production data, expected construction schedules, projected construction costs, potential future supply of~~2020 Annual Report. Mrs. Adams and ~~demand for our products, potential future corn and soybean price trends, potential future impact on our business of~~

the COVID-19 pandemic, potential future impact on our business of new legislation, rules or policies, potential outcomes of legal proceedings, and other projected operating data, including anticipated results of operations and financial condition. Such forward-looking statements are identified by the use of words such as “believes,” “intends,” “expects,” “hopes,” “may,” “should,” “plans,” “projected,” “contemplates,” “anticipates,” or similar words. Actual outcomes or results could differ materially from those projected in the forward-looking statements. The forward-looking statements are based on management’s current intent, belief, expectations, estimates, and projections regardingDaughters’ Trust advised the Company that

they were conducting

the

offering

order

pay

estate

taxes

the

settlement

Mr.

Adam’s

estate

and

obtain

liquidity.

The

public

offering

was

made

pursuant

the

Company’s

effective

shelf

registration

statement

Form

S-3

(File

No.

333-227742),

including the Prospectus

contained therein dated

October 9, 2018, and

a related Prospectus Supplement

dated August 19,

2020,

each of

which is on

file with the

Securities and

Exchange Commission.

The public offering

involved only

the sale of

shares of

Common

Stock

that

were

already

outstanding,

and

thus

the

Company

did

not

issue

any

new

raise

any

additional

capital

the

offering.

The

expenses

the

offering

(not

including

the

underwriting

discount

and

legal

fees

and

expenses

legal

counsel

for

the

Selling

Stockholders,

which

were

paid

the

Selling

Stockholders)

paid

the

Company

were

1,102,000

. Pursuant to the Agreement, the Selling Stockholders reimbursed the Company

551,000

Index

ITEM

MANAGEMENT’S

DISCUSSION

AND

ANALYSIS

FINANCIAL

CONDITION

AND

RESULTS

OPERATIONS

The following

should be

read in

conjunction

with Management’s

Discussion and

Analysis of

Financial Condition

and Results

of Operations

included in

Item 7

of the

Company’s

Annual Report

on Form

10-K for

its ~~industry. These~~fiscal

year ended

May 30,

2020 (the

“2020

Annual Report”),

and

the accompanying

financial statements ~~are not guarantees~~

and

notes included

in Part

II, Item

8 of ~~future performance~~

the 2020

Annual

Report 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~~

Part

I, Item 1A I

of ~~our Annual~~this Quarterly Report on Form ~~10-K for fiscal year 2019, as updated by~~ 10-Q (“Quarterly Report”).

This

report

contains

numerous

forward-looking

statements

within

the

meaning

Section

27A

the

Securities

Act

1933

(the “Securities

Act”) and

Section 21E

of the

Securities Exchange

Act of

1934 (the

“Exchange Act”)

relating to

our ~~subsequent Quarterly Reports~~ shell

egg

business,

including

estimated

future

production

data,

expected

construction

schedules,

projected

construction

costs,

potential

future

supply

of and

demand

for

our

products,

potential

future

corn

and

��

soybean price

trends,

potential

future

impact

on ~~Form 10-Q~~

our

business

the

COVID-19

pandemic,

potential

future

impact

our

business

new

legislation,

rules

policies,

potential

outcomes

legal

proceedings,

and ~~Current Reports on Form 8-K, (ii)~~

other

projected

operating

data,

including

anticipated

results

operations

and

financial

condition.

Such

forward-looking

statements

are

identified

the ~~risks and hazards inherent~~

use

words

such

“believes,”

“intends,”

“expects,”

“hopes,”

“may,”

“should,”

“plans,”

“projected,”

“contemplates,”

“anticipates,”

similar

words.

Actual

outcomes

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

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 Part

I, Item

1A of

the 2020

Annual

Report

(ii)

the

risks

and

hazards

inherent

the

shell egg

business ~~(including~~

(including

disease, pests,

weather

conditions,

and

potential for

product recall),

(iii) changes

in the

demand for

and market

prices of

shell eggs

and feed

costs, (iv)

our ability

predict

and

meet

demand

for

cage-free

and

other

specialty

eggs,

(v)

risks,

changes,

obligations

that

could

result

from

our

future

acquisition

new

flocks

businesses

and

risks

changes

that

may

cause

conditions

completing

pending

acquisition not to

be met, (vi) risks

relating to the

evolving COVID-19 pandemic,

and (vii) adverse

results in pending litigation

matters.

Readers

are

cautioned

not

place

undue

reliance

forward-looking

statements

because,

while

believe

the

assumptions on

which the

forward-looking statements ~~because, while we believe the assumptions on which the~~

are based

are reasonable,

there can

be no

assurance that

these forward-

looking

statements

will

prove

accurate.

Further,

forward-looking statements

included

herein

are ~~based are reasonable, there can be~~

only

made

the

respective

dates

thereof,

if no ~~assurance that~~

date

is stated,

as of

the date

hereof.

Except

as otherwise

required

law,

disclaim

any

intent or obligation

to update publicly

these forward-looking statements, will prove to be accurate. Further, forward-looking statements included herein are only made as of the respective dates thereof, or if no date is stated, as of the date hereof. Except as otherwise required by law, we disclaim any intent or obligation to update publicly these forward-looking statements,

whether because of

new information, future

events, or ~~otherwise.~~

~~OVERVIEW~~

Cal-Maine Foods, Inc. (the “Company,” “we,” “us,” “our”) is primarily engaged in the production, grading, packaging, marketing, and distribution of fresh shell eggs. Our fiscal year end is the Saturday closest to May 31.otherwise.

GENERAL

Cal-Maine

Foods,

Inc.

primarily

engaged

the

production,

grading,

packaging,

marketing

and

distribution

fresh

shell

eggs. Our operations are fully ~~integrated. At our facilities we hatch chicks, grow and maintain flocks of pullets (young female chickens,~~ integrated

under 18 weeks of age), layers (mature female chickens) and breeders (male and female birds used to produce fertile eggs to hatch for egg production flocks), manufacture feed, and produce, process, and distribute shell eggs. one operating segment.

We are

the largest producer and ~~marketer~~ distributor

of fresh shell

eggs in the United ~~States (“U.S.”). We market~~States.

Our total flock of approximately 41.3 layers and 9.6

pullets and breeders is the ~~majority~~ largest in the U.S. We

sell most

of our

shell eggs

to a

diverse

group of

customers, including

national and

regional grocery

store chains,

club stores,

companies

servicing

independent

supermarkets

the

U.S.,

food

service

distributors,

and

egg

product

consumers

states

across the southwestern, southeastern, mid-western and ~~mid-Atlantic~~mid

-Atlantic regions of the U.S. We market shell eggs through an extensive distribution network to a diverse group of customers, including national and regional grocery store chains, club stores, foodservice distributors, and egg product consumers.

The Company has one operating segment, which is the production, grading, packaging, marketing and distribution of shell eggs. The majority of our customers rely on us to provide most of their shell egg needs, including specialty and non-specialty eggs. Specialty eggs represent a broad range of products. We classify nutritionally enhanced, cage free, organic and brown eggs as specialty products for accounting and reporting purposes. We classify all other shell eggs as non-specialty products. While we report separate sales information for these types of eggs, there are a number of cost factors which are not specifically available for non-specialty or specialty eggs due to the nature of egg production. We manage our operations and allocate resources to these types of eggs on a consolidated basis based on the demands of our customers.United States.

Our

operating

results

are

materially

impacted

~~Index~~

market

prices for

eggs

and

feed

grains

(corn

and

soybean

meal),

which

are

~~Our operating~~ highly

volatile,

independent

each

other,

and

out

our

control.

Generally

speaking,

higher

market

prices

for

eggs

have

positive

impact

our

financial

results ~~are directly tied to egg~~

while

higher

market

prices ~~which are highly volatile and subject to wide fluctuations, and are outside~~

for

feed

grains

have

negative

impact

our

financial

results. Although we

use a variety of

pricing mechanisms in pricing

agreements with our customers,

we sell the majority

of our ~~control. For~~

conventional

shell

eggs

based

formulas

that

take

into

account,

varying

ways,

independently

quoted

regional

wholesale

market prices for

shell eggs or formulas

related to our

costs of production which

include the cost

of corn and soybean

meal. As

an example

of the ~~Urner-Barry~~volatility

in the market

prices of shell

eggs, the Urner

-Barry Southeastern

Regional Large

Egg Market Price

per dozen eggs (“

(“UB southeastern

large index”) in ~~the current~~

fiscal year 2020

ranged from a

low of ~~$0.64~~ $0.62

in July 2019

to a high

of $3.18 ~~as of~~

in March ~~27,~~ 2020. The shell egg industry has traditionally been subject to periods of high profitability followed by periods of significant loss. In the past, during periods of high profitability, shell egg producers tended to increase the number of layers in production with a resulting increase in the supply of shell eggs, which generally caused a drop in shell egg prices until supply

Generally,

we purchase

primary feed

ingredients,

mainly corn

and demand returned to balance. As a result, our financial results from year to year may vary significantly. Shorter term, retail sales of shell eggs historically have been greatest during the fall soybean

meal, at

current market

prices. Corn

and ~~winter months~~soybean

meal

are

commodities

and

are

subject

volatile

price

changes

due

weather,

various

supply

and

demand

factors,

transportation and ~~lowest during the summer months. Prices for shell eggs fluctuate in response to seasonal factors~~storage costs, speculators, and ~~a natural increase in shell egg production in the spring~~ agricultural, energy

and early summer. Historically, shell egg prices have increased with the start of the school year and are highest prior to holiday periods, particularly Thanksgiving, Christmas, and Easter. Consequently, we generally experience lower sales and net income in our first and fourth fiscal quarters. Because 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.

For the third quarter, the average UB southeastern large index price was down 13.8% compared with the prior-year period. At the same time our net average selling price for all shell eggs for the thirteen weeks ended February 29, 2020 was down 10.0% to $1.236 compared to $1.373 for the corresponding period of fiscal 2019. During the third quarter and year-to-date periods ended February 29, 2020, an oversupply of eggs negatively affected the price of non-specialty eggs and demand for specialty eggs was negatively impacted by the low non-specialty egg prices. However, hen numbers, as reported by the USDA Chickens and Eggs report on March 23, 2020, were 330.0 million, which is 11.8 million less hens than reported a year ago. The USDA also reported that hatch rates decreased 4.95 percent for the last three consecutive months through February 2020, including a 8.0 percent decrease in February, as compared to the same period in the prior year. Since the end of the third quarter, market prices have moved significantly higher to record levels, and we expect to see continued price volatility through the end of our fiscal year.

~~We are one of the largest producers and marketers of value-added specialty shell eggs~~trade policies in the U.S. and internationally.

Specialty shell

eggs have

been a

significant and

growing portion

of the

market. In

recent years,

a significant

number of

large

restaurant chains, food

service companies and

grocery chains, including

our largest customers,

announced goals to

transition to a

an exclusively

cage-free egg

supply chain

by specified

future dates. ~~We are working with our customers to achieve smooth progress in meeting their goals.~~

Additionally,

~~Additionally,~~ several states, have now passed or proposed minimum space and/or cage-free requirements. Specifically, California passed Proposition 12 in November 2018, which provides for minimum space requirements per hen beginning in 2020 and mandates all eggs or egg products sold in California must be cage-free by 2022. Subsequently, Washington and Oregon have passed laws requiring cage-free hen housing by 2024, and Massachusetts, Rhode Island and Michigan have similar laws defining space requirements or other restrictions on cages. These states represent approximately 21.1%

representing 23%

of the

U.S.

Index

total population according to the U.S. Census ~~Bureau. While our direct sales into these~~Bureau,

have passed legislation requiring that all eggs

sold in those states ~~have not been material, these laws will affect sourcing, production and pricing of~~ must be

cage-free

eggs ~~(conventional as well as specialty) not only within these~~by

specified

future dates,

and

other states ~~but also~~

are

considering

such legislation.

For additional

information, see

the

2020 Annual

Report, Part I,

Item 1, “Business

– Growth

Strategy” and

“– Government

Regulation,” and

the fifth risk

factor in ~~other areas of the country.~~

Part I, Item 1A, “Risk Factors.”

Our growth strategy is focused on remaining a low-cost provider of shell eggs located near our customers. In light of the increased demand for cage-free eggs, we intend to continue to closely evaluate the need to expand through

~~Index~~

~~selective acquisitions that will expand our~~

Retail

sales

shell ~~egg production capabilities~~

eggs

historically

have

been

highest

during

the

fall

and

winter

months

and

lowest

during

the

summer

months. Prices

for shell

eggs fluctuate

in ~~key locations and markets, as well as focused expansion and conversion of our existing farms, based on a timeline~~ response

to ~~meet our customers’ needs.~~seasonal

demand factors

On March 29, 2019, our Board of Directors approved a major expansion of the cage-free capacity at the Company’s Delta, Utah facility. This expansion includes new facilities for 2.0 million cage-free hens, pullets and a ~~processing plant,~~

natural increase

in egg

production during

the

spring

and

early

summer.

Historically,

shell

egg

prices

tend

increase

with

the

start

the

school

year

and

tend

highest

prior

holiday

periods,

particularly

Thanksgiving,

Christmas,

and

Easter.

Consequently,

and

all

other

things

being

equal, we would

expect to experience

lower selling prices, sales

volumes and net

income (and may incur

net losses) in our

first

and

fourth

fiscal

quarters

ending

August/September

and

May/June,

respectively.

Because

the

seasonal

and

quarterly

fluctuations,

comparisons

our

sales

and

operating

results

between

different

quarters

within

single

fiscal

year

are

not

necessarily meaningful comparisons.

COVID-19

Since early

2020,

the coronavirus

(“COVID-19”) outbreak,

characterized as ~~well as renovation of existing capacity for cage-free hens. Final completion of these additions~~

a pandemic

by the

World

Health Organization

March

11,

2020,

has

caused

significant

disruptions

international

and ~~renovations~~

U.S.

economies

and

markets.

understand

the

challenges

and

difficult

economic

environment

facing

the

families

the

communities

where

live

and

work,

and

are

committed to

helping where

we can.

One way

we have

done this

is ~~expected~~ by ~~early 2022 and will add~~ providing

food assistance

to those

in need.

Cal-Maine

Foods has donated

approximately ~~3.4~~1.5 million ~~cage-free hens.~~

~~We continue to invest in cage-free production with our approved expansion projects across our portfolio. See the table under “Capital Resources and Liquidity” later in this section for further information on projects in-progress.~~

~~For the thirteen weeks ended and February 29, 2020 and March 2, 2019, we produced approximately 88% and 82% of the total number of shell~~dozen eggs ~~we sold, respectively. Approximately 9% of such production was provided by contract producers who utilize their facilities~~ in the ~~production of shell eggs by layers owned by us compared to 10% in the same period in the prior year. We own the shell eggs produced under these arrangements.~~

first three

Our cost of production is materially affected by feed costs. Feed costs averaged 55.7% and 56.8% of our total farm egg production cost for the thirteen weeks ended February 29, 2020 and March 2, 2019, respectively. Changes in market prices for corn and soybean meal, the primary ingredients in the feed we use, result in changes in our cost of goods sold. The cost of feed ingredients, which are commodities, are subject to factors over which we have little or no control such as volatile price changes caused by weather, size of harvest, transportation, storage costs, demand, and the agricultural and energy policies of the U.S. and foreign governments. According to USDA reports, current supplies of corn and soybeans are favorable heading into the 2020 planting season, and we believe we will continue to have an adequate supply of both grains. However, current ongoing uncertainties and supply chain disruptions related to the COVID-19 outbreak and geopolitical issues surrounding trade agreements and international tariffs could create more price volatility in the future.

~~Looking ahead into the fourth quarter~~quarters of fiscal ~~2020 and fiscal 2021, we~~ 2021.

believe we are taking

all

reasonable

precautions

the

management

our

operations

response

the ~~outbreak of COVID-19. To date, Cal-Maine Foods facilities are operating normally, and we have not experienced any supply chain or delivery disruptions.~~

COVID-19

pandemic.

Our

top priority

the

health and

safety of

our employees,

who work

hard every

day to

produce eggs

for our

customers. As

part of

the nation’s

food

supply,

we work

in a critical

infrastructure industry,

and believe

we have

a special

responsibility to

maintain our

normal work

schedule. As

such, we

are in ~~daily communications~~

regular communication

with our

managers across

our operations

and continue

to closely

monitor

the situation

in our

facilities and

in the

communities

where we

live and

work.

We ~~are following published guidelines by the Centers for Disease Control (CDC) and other government health agencies in implementing~~

have implemented

procedures designed

protect

our

employees,

taking

into

account

guidelines

published

the

Centers

for

Disease

Control

and

other

government

health

agencies,

and

have

strict

sanitation

protocols

and

biosecurity

measures

place

throughout

our

operations

with

restricted

access

visitors.

All

non-essential

corporate

travel

has

been

suspended. ~~Fortunately, there~~

There

are

known

indications

that

COVID-19 affects hens or can be transferred through the food supply.

continue to

proactively monitor

and manage

operations during

the COVID-19 pandemic,

including additional

related costs

that we incurred or

may incur in the future.

In the thirty-nine weeks ended

February 27, 2021,

we spent $1.8

million (excluding

medical insurance

claims) related

to the

pandemic, of

which $397

thousand was

spent in

the third

quarter of

fiscal 2021.

The

majority

such

expenses

for

both

periods

were

additional

labor,

primarily

reflected

cost

sales.

Medical

insurance

claims

COVID-19

paid

during

the

thirty-nine

weeks

ended

February

27,

2021

were

additional

$1.1

million of which $322 thousand were incurred in the third fiscal quarter of

2021.

EXECUTIVE OVERVIEW

For the

third quarter

of fiscal

2021,

we recorded

a gross

profit of $47.5

million compared

to $49.8

million for

the same period

of fiscal

2020.

Demand for

shell eggs

remained favorable,

primarily at

the retail

level as consumers

continue to

prepare more

meals at

home during

the COVID-19

pandemic.

According to

data provided

by Informational

Resources,

Inc. (“IRI”)

dozens

sold in the Total US -

Multi Outlet channel for conventional eggs for the

calendar year-to-date through March 7, 2021 increased

2.7% and specialty

dozens increased 14.0%

compared to the

same period in

the calendar year.

Our total dozens

sold increased

3.1% to 279.7 million

dozen shell eggs for the

third quarter of fiscal 2021

compared to 271.3 million

dozen for the same period

of fiscal 2020.

This is due to an increase in specialty egg dozens sold of 16.2%.

The

daily

average

price

for

the

southeastern

large

index

for

third

quarter

fiscal

2021

increased

4.3%

from

the

same

period

in the

prior

year.

Our net

average

selling price

per dozen

for

the third

quarter

of fiscal

2021 was

$1.246

compared to

$1.236 in the prior

year period.

Although the hen numbers

reported by the United

States Department of Agriculture

(“USDA”)

as of March 1, 2020 were 327.4

million, which represents 3.1 million fewer

hens than reported a year ago.

The USDA reported

that the

hatch

from October

2020 through

February

2021 increased

2.6%

as compared

to the

prior comparable

period, which

may indicate an

increased supply of hens

in the future. As

we emerge from

the COVID-19 pandemic

with an anticipated return

in food

service demand,

these growing

supply indicators

could affect

the overall

balance of

supply and ~~we remain focused~~

demand for

shell eggs

and have an impact on ~~meeting~~ market prices.

Our farm

production costs

per dozen

produced for

the ~~current high demand for eggs.~~ third

quarter of

fiscal 2021

increased 7.0%

or $0.051

compared to

third

quarter of

fiscal 2020.

This increase

was primarily

due to higher

feed costs

in the

third quarter of

fiscal 2021

compared to

the

Index

same period

in the

prior fiscal

year due

to increased

prices for

corn and

soybeans caused

by increased

export demand,

global

weather

conditions

and

geopolitical

issues.

Other

farm

production

costs

for

the

third

quarter

fiscal

2021

decreased

3.1%

compared to the same period in the prior fiscal year due to reductions in

flock amortization and facility expenses.

RESULTS OF

OPERATIONS

The

following

table

sets

forth,

for

the

periods

indicated,

certain

items

from

our

Condensed

Consolidated

Statements

Operations expressed as a percentage of net sales.

13 Weeks Ended 39 Weeks Ended
February 29, 2020 March 2, 2019 February 29, 2020 March 2, 2019
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Cost of sales 85.6 % 78.5 % 93.5 % 80.6 %
Gross profit 14.4 % 21.5 % 6.5 % 19.4 %
Selling, general and administrative 12.8 % 11.7 % 14.7 % 12.4 %
(Gain) loss on disposal of fixed assets 0.1 % (0.2) % 0.1 % (0.1) %
Operating income (loss) 1.5 % 10.0 % (8.3) % 7.1 %
Total other income, net 3.7 % 4.0 % 1.9 % 2.1 %
Income (loss) before income taxes and noncontrolling interest 5.2 % 14.0 % (6.4) % 9.2 %
Income tax (benefit) expense 1.2 % 3.5 % (1.7) % 2.2 %
Net income (loss) before noncontrolling interest 4.0 % 10.5 % (4.7) % 7.0 %
Less: Income (loss) attributable to noncontrolling interest — % — % — % 0.1 %
Net income (loss) attributable to Cal-Maine Foods, Inc. 4.0 % 10.5 % (4.7) % 6.9 %
13 Weeks Ended

39 Weeks Ended

February 27, 2021

February 29, 2020

February 27, 2021

February 29, 2020

Net sales

100.0

Cost of sales

86.8

85.6

87.7

93.5

Gross profit

13.2

14.4

12.3

6.5

Selling, general and administrative

13.3

12.8

13.6

14.7

Loss on disposal of fixed assets

0.1

—

0.1

Operating income (loss)

(0.2)

1.5

(1.3)

(8.3)

Total other income, net

3.4

3.7

1.5

1.9

Income (loss) before income taxes

3.2

5.2

0.2

(6.4)

Income tax (benefit) expense

(0.5)

1.2

(0.4)

(1.7)

Net income (loss)

3.7

4.0

0.6

(4.7)

Less: Income (loss) attributable to

noncontrolling interest

—

(*)

—

(*)

Net income (loss) attributable to Cal-Maine

Foods, Inc.

3.7

4.0

0.6

(4.7)

(*)

Represents less than

0.1% of Net sales

NET SALES

Net sales

for the

third quarter

of fiscal

2021 were

$359.1 million, an

increase of

$13.5 million, or 3.9%,

compared to

net sales

of $345.6 million

for the ~~thirteen weeks~~ same

period of fiscal

2020.

The increase was

primarily due

to a 3.1%

increase in the

total volume of

dozen eggs sold

which accounted for a

$10.5 million increase in

net sales. Dozens sold

for the third quarter

ended February ~~29, 2020~~27,

2021 were ~~$345.6~~279.7 million ~~a decrease of $38.4 million, or 10.0%,~~ compared to ~~net sales of $384.0~~271.3 million for the ~~thirteen weeks~~ same period

of fiscal 2020.

Net

shell

egg

sales

$350.0 million

and

$336.4 million

made

approximately

97.5% and

97.3%

net

sales for

the

third

quarters

ended ~~March 2, 2019.~~February 27, 2021

and February 29, 2020,

respectively. The ~~decrease was primarily due to a 10.0% decrease in egg selling prices. The~~

net average selling price per

dozen of shell eggs ~~was $1.236~~ for

the ~~thirteen weeks~~third quarters ended

February 27, 2021 and

February 29, 2020 ~~compared to $1.373 for the thirteen weeks ended March 2, 2019.~~ was $1.246

and $1.236, respectively.

The ~~10.0% decrease~~increase in ~~average~~ selling

price per dozen accounted for a ~~$37.2~~$2.8 million ~~decrease~~increase in net sales.

~~Net shell egg sales~~Egg products

accounted for

2.5% and

2.7% of ~~$336.4 million and $374.5 million made up approximately 97.3% and 97.5% of~~

net sales

for the ~~thirteen weeks~~

third quarter

ended February

27, 2021

and February

29, 2020, and March 2, 2019, respectively. Dozens sold for the thirteen weeks ended February 29, 2020 were 271.3 million, a 0.2% decrease from 271.8 million dozen for the same period of fiscal 2019. The total volume decrease for the thirteen weeks ended February 29, 2020 accounted for a $653 thousand decrease in net sales.

respectively.

These

revenues

were

$9.1

million

~~Index~~

and

$9.2

~~During~~

million

for

the ~~second quarter~~

third

quarters

fiscal

2021

and

2020, we lost a portion of our of non-specialty eggs sales to a major customer in the Southeast region, representing 4.6 percent of total shell egg dozens and 6.1 percent of non-specialty egg dozens for fiscal 2019. For the third quarter of fiscal 2020, the volume decreased by 4.8 percent of total shell egg dozens and 6.4 percent of non-specialty shell egg dozens due to the loss of the business. However, we expect our new capacity additions and our previously disclosed plans to decommission some older, less efficient facilities will help optimize our operations, improve our sales mix, and better align our production and sales within the region.

respectively.

The recent acquisition of Mahard had a positive impact on our non-specialty shell egg volumes and continued growth of our customer base. For the third quarter of fiscal year 2020, the volume of total shell egg dozens increased by 4.5 percent and the volume of non-specialty shell egg dozens increased by 5.9 percent due to the acquisition. Furthermore, the acquisition has opened up opportunities for streamlining aspects of our operations which will reduce costs and create efficiencies as we integrate Mahard into our operations.

~~Egg products accounted for 2.7% and 2.5% of net sales for the thirteen weeks ended February 29, 2020 and March 2, 2019, respectively.These revenues were $9.2 million for the thirteen weeks ended February 29, 2020, compared to $9.5 million for the thirteen weeks ended March 2, 2019,~~decrease is primarily due to ~~lower~~decreased volume partially offset

by higher selling prices.

Net

sales

for

the

thirty-nine

weeks

ended

February

27,

2021

were

$999.2 million,

increase

$100.9 million,

or 11.2%,

compared to

net sales of

$898.3 million for

the same period

of fiscal 2020

The increase was

primarily due

to a 7.0%

increase

in egg selling

prices which

accounted for

a $63.8 million

increase in net

sales. The

net average

selling price per

dozen of shell

eggs for the thirty-nine weeks ended February 27, 2021 and February

29, 2020 ~~were $898.3 million, a decrease of $182.3 million, or 16.9%, compared to net sales of $1,080.6 million for the thirty-nine weeks ended March 2, 2019. The decrease~~ was ~~primarily due to a 16.8% decrease in egg selling prices. The net average selling price per dozen of shell eggs was~~$1.185 and $1.107, for the thirty-nine weeks ended February 29, 2020, compared to $1.331 for the thirty-nine weeks ended March 2, 2019. The 16.8% decrease in average selling price accounted for a $175.6 million decrease in net sales. respectively.

Net shell

egg sales

of ~~$874.1~~$973.5 million

and ~~$1,048.0~~ $874.1

million made

up approximately

97.4% and 97.3% ~~and 97.0%~~

of net

sales for

the thirty-

nine

weeks

ended

February

27,

2021

and

February

29,

2020,

respectively.

Dozens

sold

for

the

thirty-nine

weeks

ended

February ~~29, 2020 and March 2, 2019, respectively. Dozens sold for the thirty-nine weeks ended February 29, 2020~~27, 2021 were 817.4 million,

a 3.9% increase from 786.7 million ~~a 0.3% increase from 784.1 million dozen~~ for

the same period of fiscal 2020.

The total volume

increase accounted for a ~~$2.9~~$36.3 million increase in net sales.

Egg

products

accounted

for

2.6% and

2.7% ~~and 3.0%~~

of net

sales for

the ~~thirty-nine~~ thirty

-nine

weeks ended

February

27, 2021

and

February

29,

2020, ~~and March 2, 2019~~,

respectively.

These

revenues

were ~~$24.2~~

$25.7 million

for

the

thirty-nine

weeks

ended

February

27,

2021,

compared

$24.2 million for the ~~thirty-nine weeks ended February 29,~~same period in fiscal 2020, ~~compared to $32.7 million for the thirty-nine weeks ended March 2, 2019,~~

primarily due to ~~lower prices.~~higher selling prices slightly offset by decreased volume.

Index

The table below ~~represents~~presents an analysis of our ~~non-specialty~~conventional and specialty shell egg

sales (in thousands, except percentage data)~~. Following the table is a discussion of the information presented in the table.~~:

13 Weeks Ended 39 Weeks Ended
February 29, 2020 March 2, 2019 February 29, 2020 March 2, 2019
Total net sales $ 345,588 $ 383,992 $ 898,276 $ 1,080,616
Non-specialty 210,329 62.5 % 234,960 62.7 % 518,898 59.4 % 659,446 62.9 %
Specialty 117,672 35.0 % 131,120 35.0 % 332,092 38.0 % 364,222 34.8 %
Co-pack specialty 7,347 2.2 % 7,052 1.9 % 20,026 2.3 % 20,055 1.9 %
Egg sales, net 335,348 99.7 % 373,132 99.6 % 871,016 99.7 % 1,043,723 99.6 %
Other 1,028 0.3 % 1,340 0.4 % 3,050 0.3 % 4,237 0.4 %
Net shell egg sales $ 336,376 100.0 % $ 374,472 100.0 % $ 874,066 100.0 % $ 1,047,960 100.0 %
Net shell egg sales as a percent of total net sales 97.3 % 97.5 % 97.3 % 97.0 %
Dozens sold:
Non-specialty 205,307 75.7 % 201,179 74.0 % 599,788 76.2 % 585,741 74.7 %
Specialty 62,355 23.0 % 67,093 24.7 % 176,982 22.5 % 188,224 24.0 %
Co-pack specialty 3,615 1.3 % 3,533 1.3 % 9,957 1.3 % 10,163 1.3 %
Total dozens sold 271,277 100.0 % 271,805 100.0 % 786,727 100.0 % 784,128 100.0 %
Net average selling price per dozen:
Non-specialty $ 1.024 $ 1.168 $ 0.865 $ 1.126
Specialty $ 1.887 $ 1.954 $ 1.876 $ 1.935
All shell eggs $ 1.236 $ 1.373 $ 1.107 $ 1.331
13 Weeks Ended

39 Weeks Ended

~~Non-specialty shell eggs include all~~February 27, 2021

February 29, 2020

February 27, 2021

February 29, 2020

Total net sales

359,080

345,588

999,189

898,276

Conventional

203,189

58.0

210,329

62.5

560,297

57.5

518,898

59.4

Specialty

145,210

41.5

125,019

37.2

408,537

42.0

352,118

40.3

Egg sales, net

348,399

99.5

335,348

99.7

968,834

99.5

871,016

99.7

Other

1,583

0.5

1,028

0.3

4,619

0.5

3,050

0.3

Net shell egg sales ~~not specifically identified as specialty or co-pack specialty~~

349,982

100.0

336,376

100.0

973,453

100.0

874,066

100.0

Net shell egg ~~sales. This market is characterized by an inelasticity~~sales as a

percent of demand. Small increases or decreases in production or demand can have a large positive or adverse effect on selling prices. Comparing the thirteen weeks ended February 29, 2020 and March 2, 2019, non-specialty eggtotal net sales

97.5

97.3

97.4

97.3

Dozens sold:

Conventional

203,070

72.6

205,307

75.7

599,625

73.4

599,788

76.2

Specialty

76,645

27.4

65,970

24.3

217,735

26.6

186,939

23.8

Total dozens sold ~~increased 2.1% and the~~

279,715

100.0

271,277

100.0

817,360

100.0

786,727

100.0

Net average selling price per

dozen:

Conventional

1.001

1.024

0.934

0.865

Specialty

1.895

1.876

1.884

All shell eggs

1.246

1.236

1.185

1.107

Conventional

shell eggs

include all

shell egg

sales not

specifically identified

as specialty

shell egg

sales. Comparing

the third

quarters

ended February 27, 2021 and

February 29, 2020,

conventional egg dozens sold

decreased ~~12.3%~~ 1.1% and the

average selling

price

per

dozen

decreased

2.2%

$1.001

from

$1.024.

Comparing

the

thirty-nine

weeks

ended

February

27,

2021

and

February

29,

2020,

conventional

shell

egg

dozens

sold

remained

relatively

flat

while

the

average

selling

price

per

dozen

increased 8.0%

to ~~$1.024~~$0.934 from ~~$1.168. Comparing~~ $0.865.

Specialty

eggs,

which

include nutritionally

enhanced,

cage-free,

organic

and

brown

eggs, continued

make

a significant

portion of

our total

shell egg

revenue and

dozens sold. Specialty

egg retail

prices are

less cyclical

than conventional

shell egg

prices and are

generally higher due

to consumer willingness

to pay more

for specialty eggs.

For the third

quarter of fiscal

2021

and

2020,

specialty

shell

egg

dozens

sold

increased

16.2%,

and

the

average

selling

price

per

dozen

remained

the

same

$1.895.

For the

thirty-nine

weeks ended

February 27,

2021, specialty

shell egg

dozens sold

increased

16.5% and

the average

selling

price

decreased

0.4%

$1.876

from

$1.884

for

the

same

period

fiscal

2020.

the

third

quarter

fiscal

2021,

demand for specialty eggs

increased as consumers

opted for the specialty eggs

which is noted in the

Executive Overview above

along with increased

promotional spending. For

the thirty-nine weeks

ended February ~~29, 2020 and March 2, 2019, non-specialty shell egg dozens sold increased 2.4% and~~27, 2021,

demand for specialty

eggs was

positively impacted by the ~~average selling price decreased 23.2% to $0.865 from $1.126.~~

Specialty shell eggs, which include nutritionally enhanced, cage-free, organic, and brown eggs continue to make up a large portion of our total shell egg revenue and dozens sold. Specialty egg retail prices are less cyclical than non-specialty shellhigher conventional egg prices and are generally higher due to consumer willingness to pay for the perceived benefits from these products. For the thirteen weeks ended February 29, 2020 and March 2, 2019, specialty shell egg dozens sold decreased 7.1%, and the average selling price decreased 3.4% to $1.887 from $1.954. For the thirty-nine weeks ended February 29, 2020, specialty shell egg dozens sold decreased 6.0% and the average selling price decreased 3.0% to $1.876 from $1.935as compared

to the same period ~~of fiscal 2019. In both the third quarter and year-to-date fiscal 2020 periods, specialty egg volumes were affected by the significant price differential between non-specialty and specialty eggs.~~

~~Index~~

~~Co-pack specialty shell eggs are sold primarily through co-pack arrangements, a common practice~~ in the industry whereby production and processing of certain products is outsourced to another producer. Co-pack specialty shell eggs sold during the thirteen weeks ended February 29, 2020 and March 2, 2019 were 3.6 million and 3.5 million dozen, respectively, which represented 1.3% of total dozens sold for those periods. Co-pack specialty shell eggs sold during the thirty-nine weeks ended February 29, 2020 and March 2, 2019 were 10.0 million and 10.2 million dozen, respectively, which represented 1.3% of total dozens sold for those periods.prior year.

The shell

egg sales

classified as ~~“Other”~~

“Other” represent

sales of hard

cooked eggs,

hatching eggs,

and other

miscellaneous products ~~which are~~

included with our shell egg operations.

Egg

products

are shell

eggs

that are

broken

and

sold

in liquid,

frozen,

or dried

form.

Our egg

products

are sold

through our

wholly-owned ~~subsidiary~~subsidiaries American

Egg Products, LLC ~~(“AEP”)~~

and ~~our majority owned subsidiary~~ Texas

Egg Products, ~~LLC (“TEP”).~~LLC. Comparing

~~For~~ the third ~~quarter~~ quarters

of fiscal

2021 and

2020, ~~egg product sales were $9.2 million, a decrease of $308 thousand, or 3.2%, compared~~

pounds

sold decreased

11.3%; however,

the average

selling price

per pound

increased 11.2

to ~~$9.5 million for~~ $0.584

from

$0.525. Comparing

the ~~same period of fiscal 2019. Pounds sold for the thirteen~~ thirty-nine

weeks ended

February 27,

2021 and

February 29,

2020, ~~were 17.8 million, an increase of 3.2 million, or 21.5%, compared to~~ pounds

sold decreased

8.9% while

the ~~same period of fiscal 2019. The~~average selling price per pound ~~for the thirteen weeks ended February 29, 2020 was $0.517 compared~~increased 16.7% to ~~$0.650 for the same period of fiscal 2019, a decrease of $0.133 or 20.5%.~~$0.553

from $0.474.

For the thirty-nine weeks ended February 29, 2020, egg product sales were $24.2 million, a decrease of $8.4 million, or 25.9%, compared to $32.7 million for the same period of fiscal 2019. Pounds sold for the thirty-nine weeks ended February 29, 2020 were 51.1 million, an increase of 5.9 million, or 13.1%, compared to the same period of fiscal 2019. The selling price per pound for the thirty-nine weeks ended February 29, 2020 was $0.474 compared to $0.725 for the same period of fiscal 2019, a decrease of $0.251 or 34.6%.

~~Index~~

COST OF SALES

Cost of sales consists

of costs directly

related to production, processing

and packing of shell

eggs, purchases of

shell eggs from

outside producers,

processing and

packing of

liquid and

frozen egg

products, and

other non-egg

costs.

Farm production

costs

Index

are ~~those~~

costs incurred

the

egg

production

facility,

including

feed,

facility,

hen

amortization,

and

other

farm

production

costs.

The following table presents the key variables affecting cost of

sales (in thousands, except cost per dozen data).:

໿

໿13 Weeks Ended

໿39 Weeks Ended

໿February 27, 2021

13 Weeks Ended 39 Weeks Ended
February 29, 2020 March 2, 2019 Percent Change February 29, 2020 March 2, 2019 Percent Change
Cost of Sales:
Farm production $ 172,525 $ 162,595 6.1 % $ 499,840 $ 473,655 5.5 %
Processing, packaging, and warehouse 60,186 57,126 5.4 % 170,998 167,181 2.3 %
Egg purchases and other (including change in inventory) 56,179 74,295 (24.4) % 146,754 205,096 (28.4) %
Total shell eggs 288,890 294,016 (1.7) % 817,592 845,932 (3.4) %
Egg products 6,870 7,443 (7.7) % 19,687 23,881 (17.6) %
Other — 92 (100.0) % 2,919 698 318.0 %
Total $ 295,760 $ 301,551 (1.9) % $ 840,198 $ 870,511 (3.5) %
Farm production cost (per dozen produced)
Feed $ 0.406 $ 0.421 (3.6) % $ 0.411 $ 0.416 (1.2) %
Other $ 0.323 $ 0.320 0.9 % $ 0.328 $ 0.316 3.8 %
Total $ 0.729 $ 0.741 (1.6) % $ 0.739 $ 0.732 1.0 %
Outside egg purchases (average cost per dozen) $ 1.23 $ 1.30 (5.4) % $ 1.12 $ 1.31 (14.5) %
Dozen produced 239,072 222,213 7.6 % 684,837 654,380 4.7 %
Dozen sold 271,278 271,805 (0.2) % 786,728 784,128 0.3 %
February 29, 2020

% Change

February 27, 2021

February 29, 2020

% Change

Cost of Sales:

Farm production

190,883

172,525

10.6

531,877

499,840

6.4

Processing,

packaging, and

warehouse

63,640

60,186

5.7

187,014

170,998

9.4

Egg purchases and

other (including

change in inventory)

50,443

56,179

(10.2)

137,001

146,754

(6.6)

Total shell eggs

304,966

288,890

5.6

855,892

817,592

4.7

Egg products

6,597

6,870

(4.0)

20,565

19,687

4.5

Other

—

2,919

(100.0)

Total

311,563

295,760

5.3

876,457

840,198

4.3

Farm production costs

(per dozen produced)

Feed

0.467

0.406

15.0

0.422

0.411

2.7

Other

0.313

0.323

(3.1)

0.318

0.328

(3.0)

Total

0.780

0.729

7.0

0.740

0.739

0.1

Outside egg purchases

(average cost per

dozen)

1.26

1.17

7.7

1.23

1.12

9.8

Dozens produced

248,130

239,072

3.8

731,205

684,837

6.8

Dozens sold

279,715

271,277

3.1

817,360

786,727

3.9

Cost of sales for

the third quarter of

fiscal ~~2020~~2021 was $311.6

million, an increase of

$15.8 million, or 5.3%,

from $295.8 million ~~a decrease~~

for the

same period

of ~~$5.8 million, or 1.9%,~~ fiscal

2020. The

increase was

primarily driven

by the

increase in

farm production

costs and

processing

costs.

Farm production

costs were primarily

impacted by higher

feed costs

of $0.467

per dozen

produced compared

to $0.406

per dozen

produced for

the same

period in

the prior

year.

Other farm

production costs

per dozen

produced decreased

3.1% to

$0.313

for

the

quarter

ended

February

27,

2021,

compared

$0.323

for

the

same

period

last

year,

primarily

from ~~$301.6 million for~~

lower

facility costs

and amortization

expense.

The lower

feed costs in

prior periods

which are

capitalized in

our flocks

during pullet

production helped reduce amortization expense in the third

quarter of fiscal 2021 as compared to the same period in fiscal 2020.

Facility

costs

decreased

the

third

quarter

fiscal

2021

compared

the

same

period

fiscal

2020

due

improved

efficiencies

our

utilization

our

facilities

and

increased

volume

production.

Processing

costs

increased

due

3.2%

increase

the

volume

eggs

processed

compared

the

same

period

the

prior

year.

The

cost

packaging

materials

increased 2.0%

compared to

the prior

year period

as the

retail channel

demand increased

due to

the pandemic.

The pandemic

led to

an increase

in labor

costs. Dozens

produced increased

3.8% compared

to the

same period

of fiscal ~~2019. This decrease was~~

2020.

Egg purchase

expenses decreased 10.2%,

primarily ~~driven by~~due to the

decrease in the volume

of outside egg purchases, ~~as well as a slight decrease~~

partially offset by

an increase

in the cost of these purchases. Farm production costs for the thirteen weeks ended February 29, 2020 was $172.5 million, compared to $162.6 million for the comparable period of fiscal 2019, an increase of $9.9 million, which is primarily due to an increase in production volume and an accelerated amortization expense associated with selling flocks early due to market conditions. Dozens produced increased by 7.6% compared to the same period of fiscal 2019. Feed cost per dozen for the thirteen weeks ended February 29, 2020, was $0.406, compared to $0.421 per dozen for the comparable period of fiscal 2019, a decrease of 3.6%. Other farm production cost per dozen produced increased 0.9% to $0.323 for the thirteen weeks ended February 29, 2020, compared to $0.320 for the same period of last year.

~~Index~~

Cost of sales for the thirty-nine weeks ended February ~~29, 2020~~

27, 2021 was ~~$840.2~~$876.5 million, ~~a decrease~~an increase of ~~$30.3~~$36.3 million,

or ~~3.5%~~4.3%, from ~~$870.5~~

$840.2 million

for the

same period

of fiscal

2020.

The increase

was primarily

driven by

the increase

in farm

production costs

and processing costs.

Processing costs increased due

to a 5.5% increase in

the volume of eggs processed

compared to the same

period of the prior year.

The cost of packaging materials

increased 2.8%

compared to the prior year

period as the retail channel

demand

increased due

to the

pandemic.

The pandemic

led to

an increase

in labor

costs. Farm

production

costs for

the thirty-

nine weeks

ended February

27, 2021

increased $32.0

million, which

was primarily

due to an

increase in production

volume of

6.8%

compared to the

same period of

fiscal 2020.

Feed cost per

dozen for the

thirty-nine weeks ended

February 27, 2021

was

$0.422,

compared to

$0.411

per dozen

for the

comparable period

of fiscal

2020,

an increase

of 2.7%.

Other farm

production

costs per dozen produced

decreased 3.0% to $0.318

for the thirty-nine weeks

ended February 27, 2021

compared to $0.328 for

Index

the same period

of last year,

primarily from lower

amortization and facility

expense.

In the prior

fiscal ~~2019. This decrease was~~year we

incurred higher

amortization expense due

to selling flocks

early in fiscal

2020 in response

to market conditions.

Facility costs decreased

due to

improved

efficiencies

our

utilization

our

facilities

and

increased

volume

our

production.

Egg

purchase

expenses

decreased 6.6%, primarily ~~driven by~~

due to the decrease in ~~both~~ the

volume ~~and a 15% decrease in the cost~~ of outside egg ~~purchases. Farm production costs for the thirty-nine weeks ended February 29, 2020 was $499.8 million, compared to $473.7 million for the comparable period of fiscal 2019,~~

purchases, partially offset

by an increase in the

cost

of ~~$26.2 million, which is primarily due to increased production volume and an accelerated amortization expense associated with selling flocks early due to market conditions, and higher labor costs.~~ Dozens produced increased by 4.7% compared to the same period of fiscal 2019. Feed cost per dozen for the thirty-nine weeks ended February 29, 2020, was $0.411, compared to $0.416 per dozen for the comparable period of fiscal 2019, a decrease of 1.2%. Other farm production cost per dozen produced increased 3.8% to $0.328 for the thirty-nine weeks ended February 29, 2020, compared to $0.316 for the same period of last year.these purchases.

Included

cost

sales

for

the

thirty-nine

weeks

ended

February

29,

2020

a ~~non-cash~~

$2.9

million

impairment ~~loss on fixed assets of $2.9 million~~

charge

decommissioning ~~some of our~~

older,

less

efficient

production

facilities

we ~~continue~~

invest

new

facilities

to ~~invest in new facilities to~~

meet

the

increasing

demand

for

specialty eggs and reduce production costs.

Feed costs started trending higher

midway through the second quarter of

fiscal 2021.

For the third quarter, the

average Chicago

Board of Trade

(“CBOT”) daily market price was $4.97

per bushel for corn and $422.61

per ton for soybean meal,

representing

an increase

of 29.9%

and

42.4%, respectively,

compared

to the

daily average

CBOT prices

for

the same

period

last year.

feed

ingredient

prices

rose

through

the

second

and

third

quarters

fiscal

2021,

benefited

from

our

normal

operating

practices of filling our

storage bins at harvest

and locking in the basis

portion of our grain

purchases several months

in advance

help

ensure

availability

of feed

ingredients.

Most

this benefit

has

been

realized

our

second

and

third

fiscal

quarters,

however,

during our

fourth fiscal

quarter we

will be

exposed more

directly to

price movements

in the

feed ingredient

market.

expect to

see continued

price volatility

for the remainder

of fiscal

2021 as

increased export

demand for

both soybeans

and

corn

placing

pressure

domestic

supplies

and

carryout

inventories

are

projected

lower.

Additionally,

the

ongoing

uncertainties and

supply chain

disruptions related

to the

COVID-19 outbreak,

weather fluctuations

and geopolitical

issues will

continue to affect market prices for our primary feed ingredients.

GROSS PROFIT

Gross profit for the

third quarter of fiscal ~~2020~~ 2021

was ~~$49.8~~$47.5 million compared to ~~$82.4~~

$49.8 million for the

same period of fiscal ~~2019. For the thirty-nine weeks ended February 29, 2020, gross profit decreased to $58.1~~ 2020.

The decrease

of $2.3

million ~~from $210.1 million~~was

primarily

due to

increased farm

production cost

and processing

costs, partially

offset

by an

increase in dozens sold for specialty eggs.

For

the

thirty-nine

weeks

ended

February

27,

2021

gross

profit

was

$122.7

million

compared

$58.1

million

for

the

same

period of

fiscal ~~2019. This decrease for both periods,~~2020.

The increase

of $64.7

million was

primarily due

to the ~~significant drop~~

increase in ~~market~~

conventional

shell egg

selling prices ~~which we believe reflected the unfavorable supply~~

and ~~demand balance during the periods.~~an increase in dozens sold for specialty eggs.

SELLING, GENERAL, AND ADMINISTRATIVE

EXPENSES

Selling,

general,

and

administrative

(“SGA”)

expenses

include

costs

marketing,

distribution,

accounting,

and

corporate

overhead.

The following table presents an analysis of our ~~selling, general, and administrative~~SGA expenses (in thousands). :

13 Weeks Ended
February 29, 2020 March 2, 2019 $ Change % Change
Specialty egg expense $ 12,581 $ 14,218 $ (1,637) (11.5) %
Delivery expense 13,309 13,442 (133) (1.0) %
Payroll, taxes and benefits 10,639 10,674 (35) (0.3) %
Stock compensation expense 886 866 20 2.3 %
Other expenses 6,816 5,809 1,007 17.3 %
Total $ 44,231 $ 45,009 $ (778) (1.7) %
13 Weeks Ended

February 27, 2021

February 29, 2020

$ Change

% Change

Specialty egg expense

16,162

12,581

3,581

28.5

Delivery expense

13,359

13,309

0.4

Payroll, taxes and benefits

10,195

10,639

(444)

(4.2)

Stock compensation expense

964

886

8.8

Other expenses

6,976

6,816

160

2.3

Total

47,656

44,231

3,425

7.7

For the

third quarter

of fiscal

2021,

SGA expenses

increased 7.7%

to $47.7

million from

$44.2 million

for the

same period

fiscal 2020.

Specialty egg expense

increased $3.6 million,

or 28.5%, compared

to the same

period of the

prior year.

Specialty

egg expense,

which includes

franchise fees

and advertising expense,

typically fluctuates

��

with specialty

egg dozens

sold, which

increased 16.2% for the third quarter ended February 27, 2021.

Index

39 Weeks Ended

February 27, 2021

February 29, 2020

$ Change

% Change

Specialty egg expense

42,898

35,995

6,903

19.2

Delivery expense

38,905

39,341

(436)

(1.1)

Payroll, taxes and benefits

31,526

31,391

135

0.4

Stock compensation expense

2,789

2,680

109

4.1

Other expenses

19,376

23,027

(3,651)

(15.9)

Total

135,494

132,434

3,060

2.3

For the ~~thirteen~~thirty-nine weeks

ended February ~~29, 2020, selling, general, and administrative~~27, 2021,

SGA expense ~~was $44.2~~increased 2.3% to

$135.5 million ~~compared to $45.0~~ from $132.4

million for the ~~thirteen~~

same period

in fiscal

2020.

Specialty egg

expense increased

$6.9 million,

or 19.2%,

compared to

the same

period of

the prior

year.

Specialty

egg

expense

typically

fluctuates

with

specialty

egg

dozens

sold,

which

increased

16.5%

for

the

thirty-nine

weeks ended ~~March 2, 2019. Specialty egg expense~~

February 27,

2021. Other

expenses decreased ~~$1.6~~

$3.7

million or ~~11.5%,~~

15.9% compared

to the

same period ~~of the prior year. Specialty egg expense typically fluctuates with specialty egg dozens sold, which decreased 7.1% for the thirteen weeks ended February 29, 2020.~~

~~Other expenses increased $1.0 million or 17.3% compared to same period~~ in fiscal ~~2019.~~

2020.

This ~~increase~~decrease is primarily due to ~~increased property~~the legal settlement paid in the second

quarter of fiscal 2020 and ~~casualty insurance premiums.~~the first quarter of fiscal 2021

return

brokerage

commissions

property

and

casualty

insurance

placements

refunded

after

final

reconciliation

all

brokerage service agreements.

Included in Other expenses is

approximately $551 thousand relating

to the secondary public offering

completed in August 2020

by the wife of our late founder and a trust of which his

daughters are beneficiaries. For more information, see

Note 13

~~Index~~

– Related

Party Transaction of the Notes to Condensed

Consolidated Financial Statements included in this Quarterly Report.

39 Weeks Ended
February 29, 2020 March 2, 2019 $ Change % Change
Specialty egg expense $ 35,995 $ 40,973 $ (4,978) (12.1) %
Delivery expense 39,341 40,145 (804) (2.0) %
Payroll, taxes and benefits 31,391 31,695 (304) (1.0) %
Stock compensation expense 2,680 2,620 60 2.3 %
Other expenses 23,027 19,317 3,710 19.2 %
Total $ 132,434 $ 134,750 $ (2,316) (1.7) %

OPERATING

INCOME (LOSS)

For the ~~thirty-nine weeks ended February 29, 2020, selling, general, and administrative expense was $132.4 million~~

third quarter

of fiscal

2021,

we recorded

an operating

loss of

$493 thousand

compared to $134.8 million for the thirty-nine weeks ended March 2, 2019. Specialty egg expense decreased $5.0 million, or 12.1%, compared to the same period of the prior year. Specialty egg expense typically fluctuates with specialty egg dozens sold, which decreased 6.0% for the thirty-nine weeks ended February 29, 2020. Advertising expense, which is a component of specialty egg expense, also contributed to the decrease in specialty egg expense for the thirty-nine weeks ended February 29, 2020.

Other expenses increased $3.7 million or 19.2% compared to same period in fiscal 2019. This increase is primarily due to increased property and casualty insurance premiums and an increase in charitable donations.

~~OPERATING INCOME (LOSS)~~

~~For the thirteen weeks ended February 29, 2020, we recorded~~ an operating

income of ~~$5.2 million compared to operating income of $38.2~~

$5.2

million for the same period of fiscal ~~2019.~~2020.

For the

thirty-nine weeks

ended February ~~29, 2020,~~

27, 2021,

we recorded

an operating

loss of

$13.2 million

compared to

an operating

loss of $74.8 ~~million compared to an operating income of $76.2~~ million for the same period of fiscal ~~2019.~~2020.

OTHER INCOME (EXPENSE)

Total

other

income

(expense)

consists

items

not

directly

charged

to ~~or related to,~~

operations,

such

interest

income

and

expense, royalty income, equity in income or loss of unconsolidated entities,

and patronage income, among other items.

For

the

third

quarter

fiscal

2021,

earned

$661

thousand

interest

income

compared

$880

thousand

for

the

same

period of fiscal

2020.

For the ~~thirteen~~ thirty-nine

weeks ended February ~~29, 2020,~~

27, 2021,

we earned ~~$880 thousand~~ $2.4 million

of interest income

compared

to ~~$2.1~~$3.9 million for

the same period of fiscal ~~2019.~~

2020. The decrease for

both periods resulted from by

significantly lower ~~investment balances, partially offset by higher~~ interest rates.

The Company

recorded interest expense

of ~~$77~~ $70

thousand and ~~$115~~ $77

thousand for the ~~thirteen~~

third quarters

ended February

27, 2021 and

February

29, 2020

respectively.

For the

thirty-nine

weeks ended

February ~~29, 2020~~

27, 2021

and ~~March 2, 2019, respectively.~~February

29,

2020

For the thirty-nine weeks ended February 29, 2020, we earned $3.9 million of interest income compared to $5.8 million for the same period of fiscal 2019. The decrease resulted from significantly lower investment balances, partially offset by higher interest rates. The Company recorded

interest expense of

was $205 thousand and $258 thousand, ~~and $358 thousand for the thirty-nine weeks ended February 29, 2020 and March 2, 2019,~~ respectively.

Patronage

dividends, which

represent distributions

from our

membership

in Eggland’s

Best, Inc.

were ~~$10.1~~ $9.0

million and

$10.1

million

for

the

thirteen

and

thirty-nine

weeks

ended

February

27,

2021

and

February

29,

2020, ~~and $10.5 million for the same periods in the prior year.~~

respectively.

Patronage

dividends are paid once a year based on the profits of ~~Eggland's best~~Eggland’s

Best as well as ~~their~~its available cash.

For the

third quarter

of fiscal

2021, equity

~~Index~~

~~Equity in~~ income of

unconsolidated entities

was $1.9

million compared

to $1.4

million in

the

prior

year

period.

For

the

thirty-nine

weeks

ended

February

27,

2021,

equity

income

unconsolidated

entities

was

$1.9

million compared

to $537

thousand for

the ~~thirteen weeks~~prior

year period.

The increase

for both

periods is

primarily due

to the

increase in

egg selling prices positively impacting the profitability of our joint

ventures.

Other,

net for

the third

quarter ended

February ~~29, 2020~~27,

2021, was

income of ~~$1.4 million~~

$537 thousand

compared to

income of ~~$2.1 million~~

$79 thousand

for the same period of fiscal ~~2019.~~ 2020.

Other, net

for the

thirty-nine weeks

ended February

27, 2021,

was income of

$1.5 million

compared to

income of $1.9

million

for

the

same

period

fiscal

2020.

The

decrease

primarily

driven

lower

realized

and

unrealized

gains

investment

securities available-for-sale.

Index

INCOME TAXES

March

27,

2020,

the

Coronavirus

Aid,

Relief,

and

Economic

Security

Act

(the

“CARES

Act”)

was

enacted.

The

most

significant provision

of the

CARES Act that

materially affected

the Company’s

income taxes

included the

five-year carryback

allowance for taxable net operating losses generated in the tax years

2018 through 2020, our fiscal years 2019 through 2021.

The ~~decrease~~ Company

is electing

to utilize

that provision,

which will

provide additional

liquidity in

the form

of ~~$666,000 is primarily due~~an

income tax

refund

currently

estimated

approximately

$14.6

million.

anticipate

will

receive

the

refund

during

fiscal

year

2022.

Additionally, we recorded

an income tax benefit of approximately $5.0 million related to the ~~decrease in egg selling prices impacting~~carryback

provision.

For the ~~profitability~~third quarter of ~~our joint ventures.~~fiscal 2021, pre-tax

income was $11.8 million compared to

~~Equity in~~pre-tax income of ~~unconsolidated entities~~$18.0 million for the same

period of fiscal 2020.

We recorded

an income tax benefit of $1.7 million

for the third quarter of fiscal 2021, which

includes the

discrete tax

benefit

of $5.0

million described

above.

Excluding the

tax benefit,

income tax

expense

was $2.9

million for

the

third

quarter

fiscal

2021

with

adjusted

effective

tax

rate

24.6%.

Income

tax

expense

was

$4.3

million

for

the

comparable period of fiscal 2020, which reflects an effective

tax rate of 23.7%.

For the thirty-nine

weeks ended February ~~29, 2020~~

27, 2021, pre-tax

income was ~~a income~~ $2.2

million compared

to pre-tax loss

of ~~$537 thousand compared to income of $4.4~~$57.5 million

for the same period of fiscal ~~2019. The decrease of $3.9 million is primarily due to the decrease in egg selling prices impacting the profitability of our joint ventures..~~2020. We

~~Other, net for the thirteen weeks ended February 29, 2020, was income of $79 thousand compared to income $147 thousand for the same period of fiscal 2019.~~

Other, net for the thirty-nine weeks ended February 29, 2020, was income of $1.9 million compared to income $372 thousand for the same period of fiscal 2019, primarily driven by realized and unrealized gains in equity securities.

~~INCOME TAXES~~

For the thirteen weeks ended February 29, 2020, pre-tax income was $18.0 million compared to $53.5 million pre-tax income for the same period of fiscal 2019. For thirteen weeks ended February 29, 2020,recorded an income tax benefit of $4.1 million,

which includes the discrete tax benefit of

$5.0 million

described above.

Excluding the

tax benefit,

income tax

expense of ~~$4.3 million~~

$543 thousand

was recorded

with an

adjusted

effective tax

rate of ~~23.7%, compared to income~~24.3%.

Income tax ~~expense~~ benefit

of ~~$13.6~~ $15.4

million was

recorded for

the comparable period

of fiscal ~~2019,~~

2020, which

reflects an effective tax rate of ~~25.5%~~26.7%.

For the thirty-nine weeks ended February 29, 2020, pre-tax loss was $57.5 million compared to $98.7 million pre-tax income for the same period of fiscal 2019. For thirty-nine weeks ended February 29, 2020, income tax benefit of $15.4 million was recorded, with an effective tax rate of 26.7%, compared to income tax expense of $24.1 million for the comparable period of fiscal 2019, which reflects an effective tax rate of 24.4%.

At February ~~29, 2020,~~27,

2021, trade and other

receivables included income

taxes receivables of ~~$11.6~~

$23.6 million compared

to ~~$9.7~~$9.9 million

at ~~June 1, 2019.~~May 30, 2020.

Our effective tax

rate differs from

the federal statutory income

tax rate due to

state income taxes, ~~and~~ certain ~~items included in income for financial reporting purposes that are not included in taxable income for income~~

federal tax credits and

certain

items

included

income

for

financial

reporting

purposes

that

are

not

included

taxable

income

for

income

tax

purposes,

including

tax

exempt

interest

income,

certain

nondeductible

expenses

and

net

income

loss

attributable

noncontrolling interest.

~~NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST~~

~~For the thirteen weeks ended February 29, 2020, net income attributable to noncontrolling interest was $22 thousand compared to $88 thousand net income~~Results for the ~~same period of fiscal 2019.~~current

quarter were favorably

impacted by a $5.0 million

discrete tax benefit related

the

CARES

Act,

discussed

above

and

~~For the thirty-nine weeks ended February 29, 2020, net loss attributable to noncontrolling interest was $64 thousand compared to $625 thousand net income for the same period of fiscal 2019.~~Note

–

Income

Taxes

the

Notes

Condensed

Consolidated

Financial

Statements in this Quarterly Report.

NET INCOME (LOSS) ATTRIBUTABLE

TO CAL-MAINE FOODS, INC.

Net income for

the ~~thirteen weeks~~ third quarter

ended February ~~29, 2020~~27,

2021 was ~~$13.7~~ $13.5

million, or $0.28

per basic and

diluted share, compared

net income of ~~$39.8~~ $13.7

million or ~~$0.82~~$0.28 per basic and diluted share for the same period of ~~last~~ fiscal ~~year.~~2020.

Net ~~loss~~income for the thirty-nine

weeks ended February ~~29, 2020~~ 27, 2021

was $6.3 million, or $0.13 per basic

and diluted share, compared

to a net loss of $42.1 million or $0.87 per basic and diluted share ~~compared to net income of $74.0 million, or $1.53 per basic and $1.52 per diluted share~~ for the same period

of ~~last~~ fiscal ~~year.~~2020.

Index

CAPITAL RESOURCES

AND LIQUIDITY

Our working capital

at February ~~29, 2020~~27,

2021 was ~~$355.7~~$422.0 million,

compared to ~~$492.8~~ $429.1

million at ~~June 1, 2019.~~May 30,

2020. The calculation

working capital

is defined

as current

assets less

current liabilities.

Our current

ratio was ~~4.97~~

5.19 at

February ~~29, 2020,~~27,

2021, compared

with ~~7.58~~5.60 at ~~June 1, 2019.~~May 30, 2020.

~~During the second quarter of fiscal 2020,~~ We

had

long-term

debt

outstanding

February

27,

2021

May

30,

2020.

July

10,

2018,

we ~~retired all outstanding long-term debt. As such there is no long-term debt at February 29, 2020, compared to $1.5 million at June 1, 2019. On July 10, 2018, we~~

entered

into

a $100.0

million Senior Secured Revolving

Credit Facility ~~(“the Revolving~~(the “Revolving Credit

Facility”).

As of February ~~29, 2020,~~ 27, 2021,

no amounts were

borrowed under

the Revolving

Credit Facility.

have ~~$4.2~~ $4.1

million in outstanding

standby letters

of credit, ~~which were~~

issued under our

Revolving Credit

Facility for

the benefit

of certain

insurance companies.

Refer to

Note 8 10

of our ~~June 1, 2019~~

audited financial

statements

included in our 2020 Annual Report for further information regarding

our long-term debt.

For the thirty-nine weeks

ended February 27, 2021

$14.7 million in net cash

was provided by operating

activities, compared to

$36.4 million

used in

operating activities

for the

comparable period

in fiscal

2020. This

is primarily

due to

an increase

in egg

selling prices compared to the prior year period.

continue

invest

our

facilities

with

$73.8

million

used

purchase

property,

plant

and

equipment

for

the

thirty-nine

weeks

ended

February

27,

2021

compared

$94.6

million

the

same

period

fiscal

2020.

Sales

and

maturities

investment

securities,

net

purchases,

were

$25.8

million

for

the

thirty-nine

weeks

ended

February

27,

2021

compared

$169.4 million

for the comparable

period in fiscal

2020.

received $5.8 million

in distributions from

unconsolidated entities

during the first three quarters

of fiscal 2021 compared to

$6.1 million for the same peri

od fiscal of 2020.

During the thirty-nine

weeks ended February 29, 2020, ~~$36.5~~ we used $44.5

million in ~~net~~ cash ~~was used~~ in operating activities, compared to $94.6 million provided by operating activities for the comparable period in fiscal 2019. A decrease in egg selling prices which resulted in a net loss contributed toconnection with our ~~decrease in cash flow from operations. Other adjustments, net decreased primarily due to the large increase in trade receivable balances.~~

~~For the thirty-nine weeks ended February 29, 2020, $181.5 million was provided from the sale and maturity~~purchase of investment securities compared to $160.2 million for the thirty-nine weeks ended March 2, 2019. We used $12.1 million and $122.2 million to purchase investment securities for the thirty-nine weeks ended February 29, 2020 and March 2, 2019, respectively. The net decrease in investment securities funded negative cash flows from operations as well as ongoing construction projects and the acquisition of Mahard.

certain

We did not invest additional resources in our unconsolidated entities during the thirty-nine weeks ended February 29, 2020 compared to $4.3 million for the same period fiscal 2019. We continue to invest in our facilities as $94.6 million was used to purchase property, plant and equipment for the thirty-nine weeks ended February 29, 2020 compared to $36.8 million in the thirty-nine weeks ended March 2, 2019. We used $44.5 million for the previously disclosed acquisitionassets of Mahard Egg

Farm.

used $153

thousand for

principal payments

on finance

leases in

the ~~second quarter~~ first

three quarters

of fiscal 2020 and $17.9 million for the acquisition of Featherland Egg Farm, Inc. in the second quarter of fiscal 2019. We received $6.1 million in distributions from unconsolidated entities during the thirty-nine weeks ended February 29, 2020

2021 compared

to ~~$6.5 million for the same period fiscal 2019. We used $1.6~~

$1.6 million for principal payments on long-term debt and finance

leases ~~compared to $3.0 million~~ for the same period of fiscal ~~2019. We did not pay any dividends during thirty-nine weeks ended February 29, 2020 compared to $28.5 million for the same period of last fiscal year.~~2020.

As of

February ~~29, 2020,~~ 27,

2021,

cash decreased ~~$1.5~~

$25.2 million

since ~~June 1, 2019~~ May

30, 2020

compared to ~~an increase~~

a decrease

of ~~$48.9~~ $1.5

million during

the

same period of fiscal ~~2019.~~2020.

The Revolving Credit Facility is guaranteed by all the current and future wholly-owned direct and indirect domestic subsidiaries of the Company, and is secured by a first-priority perfected security interest in substantially all of the Company’s and the guarantors’ accounts receivable, payment intangibles, instruments (including promissory notes), chattel paper, inventory (including farm products) and deposit accounts maintained with the administrative agent. The credit agreement governing our Revolving Credit Facility contains customary covenants including restrictions on the incurrence of liens, incurrence of additional debt, sales of assets and other fundamental corporate changes and investments. The credit agreement requires maintenance of two financial covenants (i) a minimum working capital ratio of 2.0 to 1.0 and (ii) an annual limit on capital expenditures of $100.0 million. Additionally, the credit agreement requires that Fred R. Adams Jr., his spouse, natural children, sons-in-law or grandchildren, or any trust, guardianship, conservatorship or custodianship for the primary benefit of any of the foregoing, or any family limited partnership, similar limited liability company or other entity that 100% of the voting control of such entity is held by any of the foregoing, shall maintain at least 50% of the outstanding voting power of the Company. Failure to satisfy any of these covenants will constitute a default under the terms of the credit agreement. In addition, under the terms of the credit agreement, dividends are restricted to the Company’s current dividend policy of one-third of the Company’s net income computed in accordance with GAAP. The Company is allowed to repurchase up to $75.0

~~Index~~

~~million of its capital stock in any year provided there is no default under the credit agreement and the borrower has availability of at least $20.0 million under the Revolving Credit Facility.~~

continue to ~~monitor~~

take aggressive

steps to

position Cal-Maine

Foods to

meet the ~~increasing~~

expected future

demand for

cage-free ~~organic~~ eggs.

have

invested

approximately

$418

million

facilities,

equipment

and ~~other specialty eggs in order~~

operations

to ~~meet~~

expand

our ~~customer's needs. We have invested over $344 million in facilities, equipment and related operations to expand our~~

cage-free

production

starting with

our first

facility in

2008. The

following table ~~represents current~~

presents material

construction projects

approved as

of February ~~29, 2020~~

27,

2021 (in thousands):

Project(s) Type Projected Completion Projected Cost Spent as of February 29, 2020 Remaining Projected Cost
Cage-Free Pullet Houses Fiscal 2020 6,331 3,150 3,181
Convertible/Cage-Free Layer Houses & Pullet Houses Fiscal 2021 31,701 17,457 14,244
Cage-Free Layer & Pullet Houses/Processing Facility Fiscal 2022 87,204 28,793 58,411
$ 125,236 $ 49,400 $ 75,836
Project(s) Type

Projected

Completion

Projected Cost

Spent as of

February 27, 2021

Remaining

Projected Cost

Convertible/Cage-Free Layer Houses & Pullet

Houses

Fiscal 2021

46,950

10,337

36,613

Cage-Free Layer & Pullet Houses/Processing

Facility

Fiscal 2022

94,632

79,558

15,074

141,582

89,895

51,687

believe our current

cash balances, investments,

cash flows from operations,

and Revolving Credit Facility

will be sufficient

to fund our current and projected capital needs for at least the next twelve months.

~~IMPACT OF~~ RECENTLY ~~ISSUED~~

ISSUED/ADOPTED ACCOUNTING STANDARDS

~~In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses~~ For

information

on ~~Financial Instruments, which modifies the measurement of expected credit losses of certain financial instruments~~

changes

accounting

principles

and changes the loss impairment methodology. The guidance is effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2019, our fiscal 2021. Early adoption is permitted for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2018, our fiscal 2020. The application of the guidance requires various transition methods depending on the specific amendment. We do not expect the adoption of this guidance will have a material impact on our consolidated financial statements.

new

accounting

policies,

see

Note
1-SummaryofSignificant

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which removes Step 2 from the goodwill impairment test. As a result, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting units’ fair value. The guidance is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, our fiscal 2021. Early adoption is permitted for annual or interim goodwill impairment tests performed on testing dates after January 1, 2017, and the prospective transition method should be applied. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

~~In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40) Customer’s~~ Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This standard will be effective for interim and annual reporting periods beginning after December 15, 2019, our fiscal 2021. Early adoption is permitted. The application of the guidance requires various transition methods depending on the specific amendment and the prospective transition method should be applied. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20) Disclosure Framework – Changes to the Disclosure Requirements for Defined BenefitPolicies

~~Index~~

Plans, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement benefit plans. The guidance removes disclosures that are no longer considered cost beneficial and adds new, as well as clarifies certain other, disclosure requirements. This standard will be effective in fiscal years after December 15, 2020, our fiscal 2021, with the option to early adopt at any time prior to the effective date, and it will require adoption on a retrospective basis. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

~~CRITICAL ACCOUNTING POLICIES~~

We suggest our Summary of Significant Accounting Policies, as described in Note 1 of the Notes to Consolidated Financial Statements included our Annual Report on Form 10-K for the fiscal year ended June 1, 2019 (“2019 Annual Report”), and as described in Note 1 of the Notes to Condensed Consolidated Financial Statements included in this Quarterly ~~Report on Form 10-Q, be read~~

Report.

CRITICAL ACCOUNTING ESTIMATES

Critical accounting

estimates

are those

estimates

made

in ~~conjunction~~ accordance

with ~~Management’s Discussion~~ U.S.

generally

accepted

accounting

principles that

involve

significant

level

estimation

uncertainty

and ~~Analysis~~

have

had

are

reasonably

likely

have

material

impact

our

financial condition

or results

of ~~Financial Condition and Results of Operations included in such 2019 Annual Report and this Quarterly Report. Except for the adoption of ASU 2016-02, Leases, there~~operations.

There have

been no

changes to ~~our significant accounting policies described in our 2019 Annual report. In addition, there have been no changes to~~

our critical

accounting ~~policies~~ estimates

identified in

our ~~2019~~

2020 Annual Report.

Index

~~ITEM 3. QUANTITATIVE ANDQUALITATIVEDISCLOSURES ABOUT MARKET RISK~~

~~COMMODITY PRICE RISK~~

Our primary exposure to market risk arises from changes in the prices of eggs, corn and soybean meal, which are commodities subject to significant price fluctuations due to market conditions that are largely beyond our control. We are focused on growing our specialty shell egg business because the selling prices of specialty shell eggs are generally not as volatile as non-specialty shell egg prices. The following table outlines the impact of price changes for corn and soybean meal on feed cost per dozen:

Feed ingredient Approximate change in feed ingredient cost Approximate impact on feed costs per dozen Approximate dollar impact on farm production cost for the 2019 fiscal year
Corn $0.28 change in the average market price per bushel $ 0.01 $ 8,767,050
Soybean Meal $27 change in the average market price per ton $ 0.01 $ 8,767,050

~~We generally do not enter into long-term contracts to purchase corn and soybean meal or hedge against increases in the price of corn and soybean meal.~~

ITEM 4.

CONTROLS~~ANDPROCEDURES~~

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 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 ~~provide reasonable assurance~~ensure that

information required to be disclosed by us in the reports we file or submit under 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,

persons

performing

similar

functions,

appropriate

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 February ~~29, 2020~~27, 2021 at the reasonable

assurance level.

~~Index~~

Changes in Internal Control Over Financial Reporting

There was

no change

in our

internal control

over financial

reporting that

occurred during

the quarter

ended February ~~29, 2020~~

27, 2021

that has materially affected, or is reasonably likely to materially affect,

our internal control over financial reporting.

ITEM 1A.

RISK

FACTORS

Except

set

forth

below,

there

have

been

material

changes

the

risk

factors

previously

disclosed

the

2020

Annual

Report.

are controlled

by the

family of

our late

founder,

Fred R.

Adams, Jr.,

and Adolphus

B. Baker,

our Chief

Executive

Officer and Chairman of our Board of Directors controls

the vote of 100% of our outstanding Class A Common Stock.

Fred R. Adams,

Jr., our

Founder and Chairman Emeritus

died on March 29,

2020. Mr.

Adams’ son-in-law,

Adolphus B. Baker,

our

Chief

Executive

Officer

and

Chairman

our

board

directors,

Mr.

Baker’s

spouse

and

her

three

sisters

(who

are

Mr.

Adams’

four

daughters)

beneficially

own,

directly

indirectly

through

entities,

100%

our

outstanding

Class

Common Stock,

controlling approximately

52.2% of

our total

voting power.

Additionally,

such persons

and Jean

Reed Adams

(“Mrs.

Adams”),

the

wife

our

late

founder,

Fred

Adams,

Jr.,

also

have

additional

voting

power

due

beneficial

ownership

our

Common

Stock,

directly

indirectly

through

entities,

resulting

family

voting

control

approximately

57.7%

our

total

voting

power.

Mr.

Baker

controls

the

vote

100%

our

outstanding

Class

Common

Stock.

understand that the

Adams and Baker

families intend to

retain ownership of

a sufficient amount

of our Common

Stock and

our Class A

Common Stock

to assure continued

ownership of

more than 50%

of the voting

power of our

outstanding shares of

capital stock.

As a

result of

this ownership,

the Adams

and Baker

families have

the ability

to exert

substantial influence

over

matters requiring action by

our stockholders, including amendments

to our certificate of incorporation

and by-laws, the election

and

removal

directors,

and

any

merger,

consolidation,

sale

all

substantially

all

our

assets,

other

corporate

transactions. Delaware

law provides

that the

holders of

a majority

of the

voting power

of shares

entitled to

vote must

approve

certain fundamental

corporate transactions such

as a merger,

consolidation and

sale of all

or substantially

all of a

corporation’s

assets; accordingly,

such a transaction

involving us and

requiring stockholder approval

cannot be effected

without the approval

the

Adams

and

Baker

families.

Such

ownership

will

make

unsolicited

acquisition

our

Company

difficult

and

discourage

certain

types

transactions

involving

change

control

our

Company,

including

transactions

which

the

holders of our

Common Stock might

otherwise receive a

premium for their

shares over then

current market prices.

The Adams

and Baker families’ controlling ownership of our capital stock may

adversely affect the market price of our Common Stock.

The

price

our

Common

Stock

may

affected

the

availability

for

sale

the

market,

and

you

may

experience

significant

dilution

result

future

issuances

our

securities,

which

could

materially

and

adversely

affect the market price of our Common Stock.

The sale

or availability

for sale

of substantial

amounts of

our Common

Stock could

adversely impact

its price.

Our articles

incorporation

authorize

us to

issue 120,000,000

shares of

our Common

Stock.

As of

March

29,

2021,

there

were 44,056,163

shares of

our Common

Stock outstanding.

Accordingly,

a substantial

number of

shares of

our Common

Stock are

outstanding

and

are, or

could become,

available for

sale in

the market.

In addition,

we may

be obligated

to issue

additional shares

of our

Common Stock in connection with employee benefit plans (including

equity incentive plans).

Index

In the

future, we

may decide

to raise

capital through

offerings of

our Common

Stock, additional

securities convertible

into or

exchangeable for

Common Stock, or

rights to acquire

these securities or

our Common Stock.

The issuance of

additional shares

of our

Common Stock

or additional

securities convertible

into or

exchangeable for

our Common

Stock could

result in

dilution

of existing

stockholders’ equity

interests in

us. Issuances

of substantial

amounts of

our Common

Stock, or

the perception

that

such issuances

could occur,

may

adversely affect

prevailing

market prices

for our

Common Stock,

and we

cannot predict

the

effect this dilution may have on the price of our Common

Stock.

As described in

Note 13

– Related Party

Transaction of

the Notes to Condensed

Consolidated Financial

Statements included

this Quarterly

Report,

in August

2020

Mrs. Adams

and the

Daughters’

Trust

(of

which

the daughters

of our

late founder

are

beneficiaries)

sold

6.9

million

Common

Stock

secondary

public

offering

pursuant

previously

disclosed

Agreement

Regarding

Common

Stock

(the

“Agreement”)

filed

exhibit

our

2020

Annual

Report.

After

the

sale,

approximately

5.0 million

shares (the

“Subject Shares”)

remain registered

under a

shelf registration

statement and

prospectus

dated October 9, 2018 for

potential resale, which shares are subject

to the Agreement. The Agreement

generally provides that if

a holder of Subject

Shares intends to sell any

of the Subject Shares,

such party must give

the Company a right

of first refusal to

purchase all or any of such

shares. The price payable by the Company

to purchase shares pursuant to the exercise

of the right of

first refusal

will reflect

a 6% discount

to the

then-current market

price based

on the 20

business-day volume

weighted average

price. If

the Company

does not

exercise its

right of

first refusal

and purchase

the shares offered,

such party

will, subject

to the

approval of a special committee of independent directors of the Board

of Directors, be permitted to sell the shares not purchased

by the

Company pursuant

to a

Company registration

statement, Rule

144 under

the Securities

Act of

1933, or

another manner

sale

agreed

the

Company.

Although

pursuant

the

Agreement

the

Company

will

have

right

first

refusal

purchase all or any of

those shares, the Company may

elect not to exercise its rights

of first refusal, and if so

such shares would

be eligible for sale pursuant to the registration rights in the Agreement or pursuant

to Rule 144 under the Securities Act of 1933.

Sales, or the availability for

sale, of a large number

of shares of our Common

Stock could result in a decline

in the market price

of our Common Stock.

PART

II. OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

Refer

the

discussion

certain

legal

proceedings

involving

the

Company

and/or

its

subsidiaries

(i)

our

2020

Annual

Report, ~~on Form 10-K for the year ended June 1, 2019,~~

Part I

Item 3:

Legal Proceedings,

and

Part II

Item 8,

Notes to

Consolidated

Financial

Statements and

Supplementary

Data, Note ~~12:~~18: Commitments

and Contingencies, and

(ii) in this Quarterly

Report in

Note 12

: Co ~~mmitments~~Commitments and Contingencies

of the Notes to Condensed Consolidated Financial Statements, which discussions are incorporated

herein by reference.

~~ITEM 1A. RISKFACTORS~~

Our business and results of operations are subject to numerous risks and uncertainties, many of which are beyond our control. The following risk factors update and refine previously disclosed risk factors from our Annual Report on Form 10-K for the fiscal year ended June 1, 2019. Our risk factors may 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 Form 10-Q and the Annual Report on Form 10-K for the fiscal year ended June 1, 2019, including under “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, that we 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.

~~Events beyond our control such as pandemics (including the COVID-19 outbreak), extreme weather and natural disasters could negatively impact our business.~~

Since January 2020, the coronavirus (COVID-19) outbreak, characterized as a pandemic by the World Health Organization on March 11, 2020, has caused significant disruptions in international and U.S. economies and markets, intensifying in recent weeks. The potential impact of COVID-19 on our business in the future is uncertain. While we have seen near-term increases in demand for eggs and in egg prices related to consumer response to the pandemic, this may not continue. The pandemic, or similar disease outbreaks in the future, may depress demand for shell eggs due to quarantines or restrictions on public interactions that would limit the ability of consumers to purchase shell eggs. To date our facilities have been fully operational and we have not experienced any supply chain or delivery disruptions; however, this may not continue. If a significant percentage of our workforce, or the workforce of our suppliers or transportation providers, is unable to work because of illness or government restrictions related to the disease outbreak, our operations would be negatively impacted, potentially materially. Pandemics or disease outbreaks may also impact hens or the food supply, although to date, there is no known indication that COVID-19 affects hens or can be transferred through the food supply.

Fire, bioterrorism, pandemic, extreme weather or natural disasters, including droughts, floods, excessive cold or heat, hurricanes or other storms, could 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, among other things. Any of these factors could have a material adverse effect on our financial results.

~~Index~~

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 new legislation 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 United States, to require all companies that supply food products to operate their business in a manner that treats animals in conformity with certain standards developed or approved by these animal rights groups. The standards change over time, but typically require minimum cage space for hens, among other requirements, and some of these groups have had successful legislative efforts to ban any form of caged housing in various states. In addition, in recent years, many large restaurant chains, food service companies and grocery chains, including our largest customers, announced goals to transition to a cage-free egg supply chain by specified future dates.

Several states have passed minimum space and/or cage-free requirements for hens. For example, California passed Proposition 12 in November 2018, which provides for minimum space requirements per hen beginning in 2020 and mandates all eggs or egg products sold in California must be cage-free by 2022. Subsequently, Washington and Oregon have passed laws requiring cage-free hen housing by 2024. Massachusetts, Rhode Island and Michigan have passed laws establishing minimum space requirements for hens, which are being phased in over time. These laws affect sourcing, production and pricing of eggs (both conventional as well as specialty eggs) not only within these states but also in other areas of the country.

In response to the increase in demand for cage-free eggs, we increased capital expenditures to expand or convert our existing facilities based on a timeline designed to meet our customers’ current and anticipated needs. In addition, the ongoing production of cage-free eggs is more costly than the production of conventional eggs. Changing our infrastructure and operating procedures to conform to the new customer demands and new laws has resulted and will continue to result in additional costs, including capital and operating cost increases. We may not be able to pass on these costs to our customers. 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. Accordingly, 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. We are enhancing our focus on cage-free capacity when considering acquisition opportunities, as discussed in more detail below.

~~Our growth strategy subjects us to various risks.~~

We plan to continue to pursue a growth strategy that includes acquisitions of other companies engaged in the production and sale of shell eggs. We consider many factors when evaluating an acquisition opportunity, including proximity to our existing and potential customers, market share, and any costs we deem necessary to improve production at the acquired facilities and integrate them into our operations. We intend to continue to expand through selective acquisitions while monitoring the market demand for cage-free eggs and expending capital resources necessary to construct and convert farms to cage-free when necessary to meet our customers' needs and timeline.

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 may over-estimate or under-estimate the demand for cage-free eggs, which could cause our acquisition strategy to be less-than-optimal for our future growth and profitability.

~~We cannot assure you that we:~~

~~• will identify suitable acquisition candidates;~~

~~• can consummate acquisitions on acceptable terms;~~

~~Index~~

~~• 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 companies 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.

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 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 the incurrence of debt.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF

PROCEEDS

The following table is a summary of our third quarter ~~2020~~2021 share repurchases:

Total Number of Maximum Number
Shares Purchased of Shares that
Total Number Average as Part of Publicly May Yet Be
of Shares Price Paid Announced Plans Purchased Under the
Period Purchased (1) per Share Or Programs Plans or Programs
12/1/19 to 12/28/19 — $ — — —
12/29/19 to 01/25/20 22,639 39.26 — —
01/26/20 to 02/29/20 — — — —
22,639 $ 39.26 — —

Total

Number of

Maximum Number

Shares Purchased

of Shares that

Total

Number

Average

as Part of Publicly

May Yet

of Shares

Price Paid

Announced Plans

Purchased Under the

Period

Purchased (1)

per Share

Or Programs

Plans or Programs

11/29/20 to 12/26/20

—

12/27/20 to 01/23/21

—

01/24/21 to 02/27/21

22,628

36.47

—

22,628

36.47

—

(1)

As permitted under our Amended and Restated 2012 Omnibus ~~Long-term~~Long

term Incentive Plan,

these shares were withheld

by us to satisfy tax withholding obligations for employees in connection with

the vesting of restricted common stock.

Index

ITEM 6. EXHIBITS

Exhibits


~~No.~~		~~Description~~
~~3.1~~	No. Description 3.1 Second Amended and Restated Certificate of Incorporation of the Registrant	~~Second Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 in the Registrant’s Form 8-K, filed July 20, 2018)~~(incorporated by reference to Exhibit 3.1 in the Registrant’s Form8-K, filed July 20, 2018) 3.2 Composite Bylaws of the Company (incorporated by reference to Exhibit3.2 in the Registrant’s Form 10-Q for the quarter ended March 2, 2013, filed April 5, 2013) 31.1* Rule 13a-14(a) Certification of the Chief Executive Officer 31.2* Rule 13a-14(a) Certification of the Chief Financial Officer 32** Section 1350 Certification of the Chief Executive Officerand the Chief Financial Officer 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
~~3.2~~		~~Composite Bylaws of the Company (incorporated by reference to Exhibit 3.2 in the Registrant’s Form 10-Q for the quarter ended March 2, 2013, filed April 5, 2013)~~
31.1*		~~Rule 13a-14(a) Certification of the Chief Executive Officer~~
31.2*		~~Rule 13a-14(a) Certification of the Chief Financial Officer~~
32**		~~Section 1350 Certification of the Chief Executive Officer and the Chief Financial Officer~~
~~99.1~~		~~Press release dated~~ M ~~arch 30, 2020 announcing interim period financial information (incorporated by reference to Exhibit 99.1 in the Company’s Form 8-K, filed on~~ ~~March 30, 2020)~~
~~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)

*		~~Filed herewith as an Exhibit.~~
**		~~Furnished herewith as an Exhibit.~~
+		~~Submitted electronically with this Quarterly Report.~~

Filed herewith as an Exhibit.

Furnished herewith as an Exhibit.

Submitted electronically with this Quarterly Report.

~~Index~~

SIGNATURES

Pursuant to

the requirements

of the Securities

Exchange Act

of 1934,

the registrant has

duly caused

this report

to be signed

its behalf by the undersigned, thereunto duly authorized.

CAL-MAINE FOODS, INC.

(Registrant)


~~Date:~~	~~March 30, 2020~~	~~/s/ Max P. Bowman~~
		~~Max P. Bowman~~
		~~Vice President, Chief Financial~~ Date: March 29, 2021 /s/ Max P. Bowman Max P. Bowman Vice President, Chief Financial Officer (Principal Financial Officer)

໿


~~Date:~~	~~March 30, 2020~~	~~/s/ Michael D. Castleberry~~
		~~Michael D. Castleberry~~
		Date: March 29, 2021 /s/ Michael D. Castleberry Michael D. Castleberry Vice President, Controller (Principal Accounting Officer)

໿


Delaware						~~64-0500378~~
~~(State or other jurisdiction of incorporation or organization)~~						~~(I.R.S Employer Identification No.)~~


	February 29, 2020		June 1, 2019
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	67,753	$	69,247
Investment securities available-for-sale	80,863		250,181
Trade and other receivables (less allowance for doubtful accounts of
$825 and $206 at February 29, 2020 and June 1, 2019, respectively)	100,962		71,760
Inventories	191,421		172,237
Prepaid expenses and other current assets	4,371		4,328
Total current assets	445,370		567,753
Property, plant & equipment, net	542,996		455,347
Finance lease right-of-use asset, net	717		947
Operating lease right-of-use asset, net	2,726		—
Investments in unconsolidated entities	61,981		67,554
Goodwill	35,525		35,525
Intangible assets, net	23,576		23,762
Other long-term assets	4,138		5,390
TOTAL ASSETS	$	1,117,029	$	1,156,278
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	88,658	$	73,211
Current maturities of long-term debt	—		1,500
Current portion of finance lease obligation	203		196
Current portion of operating lease obligation	799		—
Total current liabilities	89,660		74,907
Long-term finance lease obligation	705		858
Long-term operating lease obligation	1,927		—
Other noncurrent liabilities	7,724		8,110
Deferred income taxes	68,981		82,597
Total liabilities	168,997		166,472
Commitments and contingencies - see Note 12
Stockholders’ equity:
Common stock, $0.01 par value, 120,000 authorized and 70,261 shares issued at
February 29, 2020 and June 1, 2019, respectively, and 43,974 and 43,895
shares outstanding at February 29, 2020 and June 1, 2019, respectively	703		703
Class A convertible common stock, $0.01 par value, 4,800 shares authorized,
issued and outstanding at February 29, 2020 and June 1, 2019	48		48
Paid-in capital	59,435		56,857
Retained earnings	914,234		954,527
Accumulated other comprehensive income (loss),net of tax	(298)		355
Common stock in treasury at cost – 26,287 and 26,366 shares at
February 29, 2020 and June 1, 2019	(26,674)		(25,866)
Total Cal-Maine Foods, Inc. stockholders’ equity	947,448		986,624
Noncontrolling interest in consolidated entities	584		3,182
Total stockholders’ equity	948,032		989,806
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,117,029	$	1,156,278


	13 Weeks Ended						39 Weeks Ended
	February 29, 2020		March 2, 2019		February 29, 2020		March 2, 2019
Net income (loss), including noncontrolling interests	$	13,771	$	39,865	$	(42,136)	$	74,614
Other comprehensive income (loss), before tax:
Unrealized holding gain (loss) on available-for-sale securities, net of reclassification adjustments	(38)		1,217		(863)		967
Income tax (benefit) expense related to items of other comprehensive income	9		(296)		210		(235)
Other comprehensive income (loss), net of tax	(29)		921		(653)		732
Comprehensive income (loss)	13,742		40,786		(42,789)		75,346
Less: comprehensive income (loss) attributable to the noncontrolling interest	22		88		(64)		625
Comprehensive income (loss) attributable to Cal-Maine Foods, Inc.	$	13,720	$	40,698	$	(42,725)	$	74,721


	39 Weeks Ended
	February 29, 2020		March 2, 2019
Operating activities:
Net income (loss) including noncontrolling interest	$	(42,136)	$	74,614
Depreciation and amortization	42,911		40,857
Impairment loss on property, plant & equipment	2,919		—
Other adjustments, net	(40,148)		(20,863)
Net cash provided by (used in) operations	(36,454)		94,608

Investing activities:
Purchases of investment securities	(12,100)		(122,191)
Sales and maturities of investment securities	181,533		160,190
Investment in unconsolidated entities	—		(4,272)
Distributions from unconsolidated entities	6,114		6,545
Acquisition of business	(44,515)		(17,889)
Purchases of property, plant and equipment	(94,600)		(36,841)
Net proceeds from disposal of property, plant and equipment	1,839		1,212
Net cash provided by (used in) investing activities	38,271		(13,246)

Financing activities:
Purchase of common stock by treasury	(910)		(985)
Distributions to noncontrolling interests	(755)		—
Principal payments on long-term debt	(1,500)		(2,969)
Principal payments on finance lease	(146)		—
Payment of dividends	—		(28,469)
Net cash used in financing activities	(3,311)		(32,423)

Net change in cash and cash equivalents	(1,494)		48,939

Cash and cash equivalents at beginning of period	69,247		48,431
Cash and cash equivalents at end of period	$	67,753	$	97,370

Supplemental Information:
Cash paid for operating leases	$	635	$	—
Interest paid	$	77	$	115


February 29, 2020	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value

Municipal bonds	$	18,862	$	134	$	—	$	18,996

Corporate bonds	59,329		329		—		59,658
Certificates of deposits	1,003		—		2		1,001
Asset backed securities	1,196		12		—		1,208
Total current investment securities	$	80,390	$	475	$	2	$	80,863

Mutual funds	$	1,994	$	661	$	—	$	2,655
Total noncurrent investment securities	$	1,994	$	661	$	—	$	2,655


	February 29, 2020						June 1, 2019
	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities
Note payable	$	—	$	—	$	1,500	$	1,501
Finance lease obligations	908		823		1,054		940
Total liabilities measured at fair value	$	908	$	823	$	2,554	$	2,441


	13 Weeks Ended February 29, 2020		39 Weeks Ended February 29, 2020
Operating Lease cost	$	237	$	635
Finance Lease cost
Amortization of right-of-use asset	$	38	$	115
Interest on lease obligations	$	10	$	33
Short term lease cost	$	921	$	2,649


	As of February 29, 2020
	Operating Leases		Finance Leases
Remainder fiscal 2020	$	235	$	60
2021	930		239
2022	806		239
2023	919		239
2024	130		219
Thereafter	31		—
Total	3,051		996
Less imputed interest	(325)		(88)
Total	$	2,726	$	908


	Thirteen Weeks Ended March 2, 2019
	Cal-Maine Foods, Inc. Stockholders
	Common Stock
			Class A		Treasury		Paid In		Accum. Other		Retained		Noncontrolling
	Amount		Amount		Amount		Capital		Comp. Income		Earnings		Interest		Total
Balance at December 1, 2018	$	703	$	48	$	(24,974)	$	55,079	$	(882)	$	947,768	$	2,886	$	980,628
Other comprehensive income, net of tax	—		—		—		—		921		—		—		921
Restricted stock grant, net of forfeitures	—		—		88		(88)		—		—		—		—
Purchase company stock to satisfy withholding obligations from vesting of restricted stock	—		—		(979)		—		—		—		—		(979)
Restricted stock compensation	—		—		—		866		—		—		—		866
Dividends	—		—		—		—		—		(13,258)		—		(13,258)
Net income	—		—		—		—		—		39,777		88		39,865
Balance at March 2, 2019	$	703	$	48	$	(25,865)	$	55,857	$	39	$	974,287	$	2,974	$	1,008,043


	Thirty-nine Weeks Ended March 2, 2019
	Cal-Maine Foods, Inc. Stockholders
	Common Stock
			Class A		Treasury		Paid In		Accum. Other		Retained		Noncontrolling
	Amount		Amount		Amount		Capital		Comp. Income		Earnings		Interest		Total
Balance at June 2, 2018	$	703	$	48	$	(24,966)	$	53,323	$	(693)	$	924,918	$	2,349	$	955,682
Other comprehensive income, net of tax	—		—		—		—		732		—		—		732
Restricted stock grant, net of forfeitures	—		—		86		(86)		—		—		—		—
Purchase company stock to satisfy withholding obligations from vesting of restricted stock	—		—		(985)		—		—		—		—		(985)
Restricted stock compensation	—		—		—		2,620		—		—		—		2,620
Dividends	—		—		—		—		—		(24,620)		—		(24,620)
Net income	—		—		—		—		—		73,989		625		74,614
Balance at March 2, 2019	$	703	$	48	$	(25,865)	$	55,857	$	39	$	974,287	$	2,974	$	1,008,043


	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding, June 1, 2019	248,412	$	43.20
Granted	104,566	38.25
Vested	(77,801)	43.00
Forfeited	(2,131)	43.20
Outstanding, February 29, 2020	273,046	$	41.36


Project(s) Type	Projected Completion	Projected Cost		Spent as of February 29, 2020		Remaining Projected Cost
Cage-Free Pullet Houses	Fiscal 2020	6,331		3,150		3,181
Convertible/Cage-Free Layer Houses & Pullet Houses	Fiscal 2021	31,701		17,457		14,244
Cage-Free Layer & Pullet Houses/Processing Facility	Fiscal 2022	87,204		28,793		58,411
		$	125,236	$	49,400	$	75,836


Feed ingredient	Approximate change in feed ingredient cost	Approximate impact on feed costs per dozen		Approximate dollar impact on farm production cost for the 2019 fiscal year
Corn	$0.28 change in the average market price per bushel	$	0.01	$	8,767,050
Soybean Meal	$27 change in the average market price per ton	$	0.01	$	8,767,050


				Total Number of	Maximum Number
				Shares Purchased	of Shares that
	Total Number	Average		as Part of Publicly	May Yet Be
	of Shares	Price Paid		Announced Plans	Purchased Under the
Period	Purchased (1)	per Share		Or Programs	Plans or Programs
12/1/19 to 12/28/19	—	$	—	—	—
12/29/19 to 01/25/20	22,639	39.26		—	—
01/26/20 to 02/29/20	—	—		—	—
	22,639	$	39.26	—	—