Investor Presentation Dolph Baker Chairman & CEO Max Bowman - - PowerPoint PPT Presentation

Dolph Baker Chairman & CEO Max Bowman Vice President & CFO

Investor Presentation

Fiscal Year 2020

2

FORWARD LOOKING STATEMENTS

This presentation includes forward-looking statements, which are all statements other than historical facts, can be identified by use of words such as “expect,” “will,” and “anticipate,” and include statements regarding expected

• perating

results, acquisition transactions and potential effects of industry events or trends on our

• business. Important factors that can cause our results to differ

materially from those anticipated in the forward-looking statements include egg prices and feed costs; changes in consumer demand or requirements

• f

major customers; unanticipated results

• f

acquisitions or joint ventures; ability to obtain eggs from outside producers; agricultural, regulatory and litigation risks; and other factors described in the cautionary language included in our filings with the Securities and Exchange Commission, including in the “Risk Factors” section of our annual report on Form 10-K and subsequent

• filings. We undertake no obligation to update any forward-looking

statements.

3

CAL-MAINE FOODS PROFILE

We are the largest producer and marketer

• f shell eggs in the United States
• Founded in 1957 in Jackson, Mississippi
• Acquired Ralston-Purina egg operations

in 1972

• Completed 22 acquisitions since 1989
• Fully integrated egg producer
• Since 1996, publicly traded on NASDAQ

under symbol "CALM"

• FY 2020 U.S. fresh shell egg market

share - 19 percent

4

KEY INVESTMENT POINTS

• Largest egg producer and marketer in the

United States

• Commitment to Sustainability
• Efficient, state-of-the-art operations
• Solid customer base of leading retail and food

service companies

• Strong consumer demand for eggs
• Leading producer and marketer of high-margin

specialty eggs

• Solid financial position
• Proven management team and systems

5

THE U.S. EGG INDUSTRY

Food Service Shell Eggs - 19.6 Million Cases 7.4% Exports - 7.4 Million Cases 2.8% Retail Shell Eggs - 157.6 Million Cases 59.5% Further Processing - 80.1 Million Cases 30.3% Case = 30 dozen eggs

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Period Ending (in millions) (in millions) Net Sales Eggs Sold 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 400 500 600 700 800 900 1,000 1,100 1,200

SALES HISTORY

7

CAL-MAINE LOCATIONS

Eggland's Best Franchise Territory

Including Investment in Unconsolidated Entities

8

FULLY-INTEGRATED OPERATIONS

9

EGG PRODUCTION FACILITIES

Contract production 9% Company-

• wned

91%

Lake City, Florida Total Flock As of May 30, 2020 Layers 40.1 million Pullets and Breeders 10.7 million

10

COMPANY-OWNED FACILITIES

• State-of-the-art
• Fully automated
• Temperature controlled
• Labor efficient
• Located near customers

11

CAL-MAINE CUSTOMERS

Fiscal Year 2020 Retail 92% Food Service 6% Egg Products 2%

12

ToP 10 CUSTOMERS - FISCAL 2020

Top 3 over 51% 1. Walmart Inc. (Including Sam's Club)

• f Fiscal 2020 Sales

2. H.E. Butt Co. 3. Publix Super Markets 4. Food Lion 5. Aldi 6. Eggs America (Sysco, US Foodservice, etc.) 7. Kroger Company 8. CCF Brands 9. Costco

• 10. Wakenfern Food Corporation

13

MONTHLY HEN INVENTORY

Million Hens First Day of Month 2014 2015 2016 2017 2018 2019 2020 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec 270,000 280,000 290,000 300,000 310,000 320,000 330,000 340,000 350,000

Source: USDA National Agricultural Statistics Service

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UB Southeast Region - Shell Eggs - White Large Price

FY 18 FY 19 FY 20 5 Yr Avg Q 1 Q 2 Q 3 Q 4 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50

ANNUAL EGG PRICES

Source: Urner Barry

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FEED INGREDIENT PRICES

Soybean Meal $/ton Corn $/bushel Corn Soybean Meal 1 / 1 / 2 1 5 5 / 1 / 2 1 5 9 / 1 / 2 1 5 1 / 1 / 2 1 6 5 / 1 / 2 1 6 9 / 1 / 2 1 6 1 / 1 / 2 1 7 5 / 1 / 2 1 7 9 / 1 / 2 1 7 1 / 1 / 2 1 8 5 / 1 / 2 1 8 9 / 1 / 2 1 8 1 / 1 / 2 1 9 5 / 1 / 2 1 9 9 / 1 / 2 1 9 1 / 1 / 2 2 5 / 1 / 2 2 $250 $300 $350 $400 $2.5 $3 $3.5 $4 $4.5 $5 $5.5 Source: Monthly Average of Daily Closing Prices per Chicago Board of Trade

Feed ingredient Approximate change in feed ingredient cost Approximate impact

• n feed costs per dozen

Approximate dollar impact on farm production cost for the 2020 fiscal year

Corn $0.28 change in the average market price per bushel $ 0.01 $ 9,278,000 Soybean Meal

$27.50 change in the average market price per ton

$ 0.01 $ 9,278,000

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FEED COSTS - CENTS PER DOZEN PRODUCED

48 43 44 41 42 43 41 40 43 39 40 38 38 39 39 42 41 42 42 42 41 42 41 41 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 30 35 40 45 50 55 60

Feed ingredient Approximate change in Approximate impact

• n feed costs per dozen

$ impact on production cost for the FY 2019 Corn $0.28 change per bushel $ 0.01 $ 9,278,000 Soybean Meal $27.50 change in per ton $ 0.01 $ 9,278,000

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GROWTH STRATEGY

▪ Pursue selected acquisitions of existing shell egg production and processing facilities in key locations and markets ▪ Enhance production capacity and efficiency ▪ Increase value-added specialty egg business including cage-free capacity

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PURSUE ACQUISITION OPPORTUNITIES

▪ Leverage solid track record with completion of 22 acquisitions since 1989 ▪ Extend ability to identify, execute and integrate additional operations ▪ Expand capabilities in existing markets and broaden geographic reach ▪ Enhance national presence and strengthen customer relationships

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ACQUISITION OPPORTUNITIES

Cal-Maine Foods 44.99 S&R Egg Farm 4.53 Demler Brothers 1.50 Rose Acre Farms 26.60 Sauder's Egg 4.50 Demler Enterprises 1.50 Versova Holdings 21.10 National Food Corp. 4.00 Dutt & Wagner 1.44 Hillandale Farms 20.00 Konos Inc. 3.40 Simpson's Eggs 1.35 Daybreak Foods 14.00 Pearl Valley Eggs 2.90 Dakota Layers LLP 1.30 Michael Foods 13.30 Esbenshade Farms 2.80 Sperry Farms 1.30 Rembrandt Enterprises 11.90 Forsman Farms 2.60 J.S. West & Company/JEM Eggs 1.28 MPS Egg Farms 10.90 Ritewood/Oakdell Egg Farms 2.60 3 Puglisi Brothers 1.27 Center Fresh Group 10.80 Creighton Brothers 2.40 Mercer Landmark 1.25 Prairie Star Farms 10.80 Sunrise Acres Egg Farm 2.31 Morning Fresh Farms 1.25 Herbruck's Poultry Ranch 8.60 Giroux's Poultry Farm 2.25 Fassio Egg Farms 1.20 Weaver Brothers 8.55 CHS 2.21 Hertzfeld Poultry Farms Inc. 1.05 Opal Foods 7.79 Central Valley Eggs 2.20 Feather Crest 0.98 Fremont Farms of Iowa 7.06 Kreher's Eggs 2.09 Chino Valley Ranchers/MCM Poultry 0.85 Kreider Farms 6.08 Minnich Poultry 2.00 Colorado Eggs 0.80 ISE America 5.80 Schipper Eggs LLC 1.85 Wilcox Farms 0.79 Hickman's Egg Ranch 5.60 Heritage PMS/LaValle Egg Farms 1.70 Hidden Villa Ranch 0.70 Sparboe Farms 5.58 Lathem Farms 1.67 Hillside Poultry Farms Inc. 0.70 Gemperle Farms 5.10 Country Charm Eggs 1.64 Weber Family Farms 0.52 Cooper Farms 5.00 Braswell Egg 1.60 Sunrise Farms LLC 0.50 Sunrise Farms Inc. 5.00 Egg Innovations 1.60 Demler Egg Ranch 0.35 Mid-States Specialty Eggs 4.94 Wenger Feeds/Duchland Farms 1.60 Vital Farms 0.30 Wabash Valley Produce 4.66 Berne Hi-Way Hatchery Inc. 1.50 Total 342.28

Layers in Production, December 31, 2019, in millions Source: Egg Industry Magazine - February 2020

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ACQUISITIONS

– Foodonics International, Inc. (dba Dixie Egg Company) - Acquired 2016 Includes capacity for 1.6 million laying hens and related feed production, milling and distribution facilities in Georgia and Florida as well as contract grower arrangements for an additional 1.5 million laying hens. – Happy Hen Egg Farms, Inc. - Acquired 2017 Includes capacity for 350,000 laying hens and distribution facilities near Harwood and Wharton,

• Texas. Site designed for capacity of up to 1.2 million

laying hens. – Featherland Egg Farms, Inc. - Acquired 2018 Includes capacity for 600,000 laying hens, a feed mill and related production and distribution facilities near Marion, Texas.

21

RED RIVER VALLEY EGG FARM, LLC

Cal-Maine Foods and Rose Acre Farms entered a production joint venture to build a cage-free shell egg production complex near Bogata, Red River County, Texas

▪ Provides for capacity of approximately 1.8 million laying hens, with permits for up to 2.9 million hens ▪ Production facilities fully online in 2017 ▪ Enhances ability to meet growing demand for cage- free and other specialty eggs

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MAHARD EGG FARM, INC.

▪ On November 20, 2019 Cal-Maine Foods acquired certain assets of Mahard Egg Farm, Inc. ▪ Includes capacity for 3.9 million hens, feed mill, and related production facilities in Chillicothe, Texas, and Nebo, Oklahoma, and a distribution warehouse located in Gordonville, Texas. ▪ Sites are permitted for capacity of up to 8.0 million laying hens.

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INCREASE VALUE-ADDED SPECIALTY EGG BUSINESS

▪ Offer nutritionally enhanced eggs, cage-free and organic eggs ▪ Meet consumer demand in rapidly growing segment ▪ Benefit from higher and less cyclical selling prices ▪ FY 2020, represented 23.9 percent of dozens sold and 46.8 percent of sales revenue

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Dozen Eggs Sold (in millions)

805 821 884 948 1,014 1,063 1,054 1,031 1,038 1,039 1,069 116 132 144 176 202 233 263 253 257 261 256 All Shell Eggs Specialty Eggs FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 200 400 600 800 1,000 1,200

SPECIALTY EGG SALES

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CAGE-FREE COMMITMENT AND LEGISLATION

– Over 200 Companies have cage- free egg commitments over the next six years State laws already passed – California

• Michigan

– Washington

• Rhode Island

– Colorado

• Oregon

– Massachusetts

Cage-free estimated monthly U.S Egg Production - (July 6, 2020)

Certified Organic Cage-Free Layers

• Est. Layer Flock Size:

15,812,500

• Est. Lay Rate:

78.50% Non-Organic Cage-Free Layers

• Est. Layer Flock Size:

62,590,000

• Est. Lay Rate:

78.50% All Cage-Free Layers

• Est. Layer Flock Size:

78,402,500

• Est. Lay Rate:

78.50%

Layer Flock Legislation Pending – Arizona

• Hawaii

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INVESTMENT IN CAGE-FREE

▪ New capacity and conversions for cage-free hens, additional pullets and processing plants and related equipment ▪ Preparing for California demand in 2020 and 2022 and nearest our customer base ▪ Invested over $371.7 million in facilities, equipment and related operations to expand our cage-free production starting with our first facility in 2008

Project(s) Type Projected Completion Projected Cost Spent as of May 30, 2020 Remaining Projected Cost Convertible/Cage-Free Layer Houses & Pullet Houses Fiscal 2021 38,032 28,412 9,620 Cage-Free Layer & Pullet Houses/Processing Facility Fiscal 2022 87,204 50,411 36,793 $ 125,236 $ 49,400 $ 75,836

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KEY STRENGTHS

Low Cost Producer

l Fully-integrated operations in 16 states l Focused on automation throughout the supply chain

Favorable Consumer Demand Trends

l Eggs taste great and provide an affordable and convenient source of protein

Attractive Growth Profile

l Solid track record of internal growth and acquisitions l Increasing sales of high-margin specialty eggs

Solid Customer Base l Leading names of retail and institutional food service

customers

Strong Balance Sheet

l Solid financial position supports future growth

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FINANCIAL HIGHLIGHTS - FISCAL YEAR 2020

2020 Sales - $1.4 billion 2020 EBITDA - $79 million down from $125 million in 2019 Cash & Investments - $232 million Working Capital - $429 million No Outstanding Debt

29

INCOME STATEMENT - Fourth Qtr 2020

(Unaudited; in thousands except per share amounts) For the 13 Weeks Ended May 30, 2020 June 1, 2019 Net sales $ 453,333 $ 280,573 Gross profit 121,510 12,755 Operating income 76,092 (30,420) Other income, net 1,459 2,477 Income before taxes 77,551 (27,943) Net income attributable to Cal-Maine Foods, Inc. $ 60,463 $ (9,761) Net income per share attibutable to Cal-Maine Foods, Inc.: Basic $ 1.25 $ (0.41) Diluted $ 1.24 $ (0.41) Weighted average shares outstanding: Basic 48,501 48,442 Diluted 48,608 48,442

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INCOME STATEMENT - 2020

Fiscal Years Ended May 30, 2020 June 1, 2019 Net sales $ 1,351,609 $ 1,361,188 Gross profit 179,588 222,859 Operating income 1,269 45,781 Other income, net 18,790 25,024 Income before taxes 20,059 70,805 Net income attributable to Cal-Maine Foods, Inc. $ 18,328 $ 55,062 Net income per share attibutable to Cal-Maine Foods, Inc.: Basic $ 0.38 $ 1.12 Diluted $ 0.38 $ 1.12 Weighted average shares outstanding: Basic 48,467 48,467 Diluted 48,584 48,589

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OPERATING HIGHLIGHTS - Fourth Qtr 2020

For the 13 Weeks Ended May 30, 2020 June 1, 2019 Dozens Sold (in thousands) Conventional 213,467 192,301 Specialty 68,955 62,473 Total 282,422 254,774 Dozens Produced 242,962 222,325 % Production 86.0 % 87.3 % % Specialty Sales (dozen) 24.4 % 24.5 % % Specialty Sales (dollars) 29.9 % 44.1 % Net Average Selling Price Shell Eggs (per dozen) Conventional $ 1.459 $ 0.785 Specialty $ 1.934 $ 1.919 All Shell Eggs $ 1.575 $ 1.063 Farm Production Cost (per dozen produced) Feed $ 0.405 $ 0.411 Other 0.328 0.328 Total $ 0.733 $ 0.739 Outside egg purchases (average cost per dozen) $ 1.65 $ 1.05

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OPERATING HIGHLIGHTS - 2020

Fiscal Years Ended May 30, 2020 June 1, 2019 Dozens Sold (in thousands) Conventional 813,255 778,052 Specialty 255,895 260,848 Total 1,069,150 1,038,900 Dozens Produced 927,799 876,705 % Production 86.8 % 84.4 % % Specialty Sales (dozen) 23.9 % 25.1 % % Specialty Sales (dollars) 36.8 % 38.2 % Net Average Selling Price Shell Eggs (per dozen) Conventional $ 1.021 $ 1.041 Specialty $ 1.897 $ 1.933 All Shell Eggs $ 1.231 $ 1.265 Farm Production Cost (per dozen produced) Feed $ 0.409 $ 0.415 Other 0.329 0.319 Total $ 0.738 $ 0.734 Outside egg purchases (average cost per dozen) $ 1.26 $ 1.26

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BALANCE SHEET HIGHLIGHTS

May 30, 2020 June 1, 2019 Cash and short-term investments $ 232,293 $ 319,428 Total assets $ 1,206,694 $ 1,156,278 Stockholders' equity $ 1,009,675 $ 989,806 Working capital $ 429,068 $ 492,846

• On July 10, 2018, we entered into a $100.0 million Senior Secured Revolving

Credit Facility, which provides additional financial flexibility to support our growth strategy

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Net Sales Operating Income

Annual Net Sales and Operating Income ($ in millions)

Net Sales Operating Income 2013 2014 2015 2016 2017 2018 2019 2020 500,000 1,000,000 1,500,000 2,000,000 2,500,000

• 600,000
• 300,000

300,000 600,000 900,000

Dozen Eggs Sold (in millions) 948 1,014 1,063 1,054 1,031 1,038 1,039 1,069

FINANCIAL SUMMARY

35

CASH USE PRIORITIES

• Variable Dividend

1/3 of Net Income Paid Quarterly (after recovery of losses)

• Selective Acquisition of Existing Capacity
• Capital expansion to meet customer cage-free

requirements

• At the end of fiscal 2020, the amount of cumulative

losses to be recovered before payment of a dividend was $1.4 million

36

CASH DIVIDENDS PAID*

Cents per share

*Cents per share, as adjusted for October 31, 2014, two-for-one stock split

9 24 15 3 11 24 5 2 16 18 26 7 10 21 3 18 30 22 19 25 35 32 98 75 44 35 9 15 27 1 Q 1 2 Q 1 3 Q 1 4 Q 1 1 Q 1 1 2 Q 1 1 3 Q 1 1 4 Q 1 1 1 Q 1 2 2 Q 1 2 3 Q 1 2 4 Q 1 2 1 Q 1 3 2 Q 1 3 3 Q 1 3 4 Q 1 3 1 Q 1 4 2 Q 1 4 3 Q 1 4 4 Q 1 4 1 Q 1 5 2 Q 1 5 3 Q 1 5 4 Q 1 5 1 Q 1 6 2 Q 1 6 3 Q 1 6 4 Q 1 6 1 Q 1 7 2 Q 1 7 3 Q 1 7 4 Q 1 7 1 Q 1 8 2 Q 1 8 3 Q 1 8 4 Q 1 8 1 Q 1 9 2 Q 1 9 3 Q 1 9 4 Q 1 9 1 Q 2 2 Q 2 3 Q 2 4 Q 2 20 40 60 80 100 120

37

STOCK OWNERSHIP AND FLOAT

Holdings as of May 30, 2020 Ownership Common Stock Class A Common Stock % of Votes Shares Owned by Adams/Baker Family (Excludes ESOP) 11,324,179 4,800,000 64.8 % Shares Owned by Other Insiders (Excludes ESOP) 174,615 — 0.2 % Shares Owned by ESOP 2,088,705 — 2.3 % Public Float 29,913,219 — 32.7 % Total Outstanding Shares 43,500,718 4,800,000 100.0 %

Cal-Maine Foods is a "controlled company" as defined in Rule 5615(c)(1) of NASDAQ's listing standards due to the Adams family's beneficial ownership of 65.6% of total voting power of all Common Stock and Class A Common Stock

38

Largest egg producer and marketer in the United States Commitment to Sustainability Efficient, state-of-the-art operations Solid customer base of leading retail and food service companies Strong consumer demand for eggs Growing market for high-margin specialty eggs Solid financial position Proven management team

KEY INVESTMENT POINTS