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

Dolph Baker Chairman & CEO Max Bowman Vice President & CFO

Investor Presentation

3rd Quarter - 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 2019 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 $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 February 29, 2020 Layers 40.1 million Pullets and Breeders 9.9 million

10

COMPANY-OWNED FACILITIES

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

11

CAL-MAINE CUSTOMERS

Fiscal Year 2019 Retail 90% Food Service 7% Egg Products 3%

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ToP 10 CUSTOMERS - FISCAL 2019

Top 3 over 52% 1. Walmart and Sam's Club

• f Fiscal 2019 Sales

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

• 10. C&S Wholesale Grocers

Total Top 10 Customers 69.8%

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 Chicken and Egg Report March 23, 2020

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(Monthly average by fiscal year)

Urner Barry Southeastern Regional Large Egg Market Price

$0.72 $0.75 $0.93 $1.38 $1.21 $1.12 $1.13 $1.22 $1.35 $1.43 $1.53 $1.79 $0.85 $1.49 $1.23 $1.15 2 5 2 6 2 7 2 8 2 9 2 1 2 1 1 2 1 2 2 1 3 2 1 4 2 1 5 2 1 6 2 1 7 2 1 8 2 1 9 2 2 F Y T D $0.00 $0.50 $1.00 $1.50 $2.00

ANNUAL EGG PRICES

Source: Urner Barry

2020 Price updated through March 26, 2020

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FEED INGREDIENT PRICES

Soy Meal $/ton Corn $/bushel Corn Soy Bean Meal 1/3/2006 7/3/2006 1/2/2007 7/2/2007 1/2/2008 7/1/2008 1/1/2009 7/1/2009 1/1/2010 7/1/2010 1/1/2011 7/1/2011 1/1/2012 7/1/2012 1/1/2013 7/1/2013 1/1/2014 7/1/2014 1/1/2015 7/1/2015 1/1/2016 7/1/2016 1/1/2017 7/1/2017 1/1/2018 7/1/2018 1/1/2019 7/1/2019 1/1/2020 $0 $200 $400 $600 $800 $0 $2 $4 $6 $8 Source: Monthly Average of Daily Closing Prices per Chicago Board of Trade

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FEED COSTS - CENTS PER DOZEN PRODUCED

48 47 45 48 51 57 55 53 54 49 46 49 48 43 44 41 42 43 41 40 43 39 40 38 38 39 39 42 41 42 42 42 41 42 41 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 30 35 40 45 50 55 60 Feed ingredient Approximate change in Approximate impact on feed costs per dozen $ impact on production cost for the FY 2019 Corn $0.28 change per bushel $ 0.01 $ 8,767,050 Soybean Meal $27 change in per ton $ 0.01 $ 8,767,050

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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

18

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.

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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.

23

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 ▪ Through Q3 FY 2020, represented 23.8 percent of dozens sold and 40.3 percent

• f 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 1,039 116 132 144 156 174 211 242 236 244 248 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 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 or likely will be by next summer – California

• Michigan

– Washington

• Arizona

– Colorado

• Oregon

– Hawaii

• Maine

Cage-free estimated monthly U.S Egg Production - (March 2, 2020)

Certified Organic Cage-Free Layers

• Est. Layer Flock Size:

15,651,500

• Est. Lay Rate:

76.00% Non-Organic Cage-Free Layers

• Est. Layer Flock Size:

53,966,000

• Est. Lay Rate:

76.00% All Cage-Free Layers

• Est. Layer Flock Size:

69,617,500

• Est. Lay Rate:

76.00%

Layer Flock

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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 $344 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 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

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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 2019

2019 Sales - $1.4 billion 2019 EBITDA - $118 million down from $168 million in 2018 Working Capital - $493 million Total Debt - $2.3 million Debt to EBITDA - 0.02:1

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INCOME STATEMENT - YEAR TO DATE

(Unaudited; in thousands except per share amounts)

39 Weeks Ended February 29, 2020 March 2, 2019 Net sales $ 898,276 $ 1,080,616 Gross profit 58,078 210,105 Operating income (loss) (74,823) 76,202 Other income, net 17,331 22,546 Income (loss) before taxes (57,492) 98,748 Net income (loss) $ (42,072) $ 73,989 Net income (loss) per common share: Basic $ (0.87) $ 1.53 Diluted $ (0.87) $ 1.52 Weighted average shares outstanding: Basic 48,455 48,416 Diluted 48,455 48,545

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OPERATING HIGHLIGHTS - YEAR TO DATE

39 Weeks Ended February 29, 2020 March 2, 2019 Dozen Eggs Sold (000) 786,727 784,128 Dozen Eggs Produced (000) 684,837 654,380 % Specialty Sales (dozen)* 22.5% 24.0% % Specialty Sales (dollars)* 38.0% 34.8% Net Average Selling Price (dozen) $ 1.107 $ 1.331 Net Average Selling Price Specialty Eggs (dozen)* $ 1.876 $ 1.935 Feed Cost (dozen) $ 0.411 $ 0.416

* Excluding co-pack specialty

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BALANCE SHEET HIGHLIGHTS

February 29, 2020 June 1, 2019 Cash and short-term investments $ 148,616 $ 319,428 Total assets $ 1,117,029 $ 1,156,278 Shareholders' equity $ 948,032 $ 989,806 Working capital $ 355,710 $ 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 2012 2013 2014 2015 2016 2017 2018 2019 500 1,000 1,500 2,000 2,500

• 600
• 300

300 600 900

Dozen Eggs Sold (in millions) 884 948 1,014 1,063 1,054 1,031 1,038 1,039

FINANCIAL SUMMARY

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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 the third quarter of fiscal 2020, the

amount of cumulative losses to be recovered before payment of a dividend was $61.9 million

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CASH DIVIDENDS PAID*

Cents per share

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

8 19 22 7 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 9 2 Q 9 3 Q 9 4 Q 9 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 20 40 60 80 100 120

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STOCK OWNERSHIP AND FLOAT

Holdings as of August 31, 2019 Ownership Shares Outstanding % of Total Shares Owned by Adams/Baker Family (Excludes ESOP) 16,182,512 33.2 % Shares Owned by Other Insiders (Excludes ESOP) 191,774 0.4 % Shares Owned by ESOP 2,148,416 4.4 % Public Float 30,170,638 62.0 % Total Outstanding Shares 48,693,340 100.0 %

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 65.5% of total voting power of all Common Stock and Class A Common Stock

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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