CAL-MAINE FOODS INC
For the period ended Mar 1, 2025. Filed Apr 8, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 1, 2025 · Filed Apr 8, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Item 1A. Risk Factors
Except as set
forth below,
there have been
no material changes
in the risk
factors previously disclosed
in the Company’s
Annual Report.
Provisions of
our certificate
of incorporation,
bylaws, and
Delaware law
may make
an acquisition
of us
or a
change in
our management more difficult.
Certain
provisions of
our certificate
of
incorporation and
bylaws could
discourage, delay
or
prevent a
merger,
acquisition or
other change
in control
that stockholders may
consider favorable,
including transactions
in which
an investor
might otherwise
receive a premium for
its shares. These provisions
also could limit the
price that investors might
be willing to pay
in the future
for
shares
of
our
Common
Stock,
thereby
depressing
the
market
price
of
our
Common
Stock.
Stockholders
who
wish
to
participate in these transactions may not
have the opportunity to do
so. Furthermore, these provisions could prevent or
frustrate
attempts by our stockholders to replace or remove our management. These provisions:
provide for the
division of the
Board into three
classes as nearly
equal in size as
practicable with staggered three-year
terms and limit the removal of directors and the filling of vacancies;
authorize our Board to set the
terms of and issue preferred stock, without
stockholder approval, that could be issued to
persons friendly to management
or could operate as
a “poison pill” to
dilute the stock ownership
of a potential hostile
acquirer to prevent an acquisition that is not approved by our Board;
prohibit stockholder action by written consent;
establish advance notice
requirements for stockholder
nominations to our
Board or for
stockholder proposals that
can
be acted on at stockholder meetings; and
require the
approval of
the holders
of
at
least 66-2/3%
of
the voting
power of
all then
outstanding shares
of capital
stock of the Company entitled to vote generally in the election of directors, voting together as a single class, in order to
amend our certificate of incorporation and bylaws.
In addition,
we are
governed by
the provisions
of Section
203 of
the Delaware
General Corporation
Law,
which may,
unless
certain criteria
are met,
prohibit large
stockholders, in
particular those
owning 15%
or more
of our
outstanding voting
stock,
from merging or combining with us for a prescribed period of time.
The potential loss, or loss, of controlled company status could disrupt our business.
Our Company has been
controlled by members of
the family of our
founder, Fred
R. Adams, Jr.
since its founding and
since it
became
a
public
company.
As
previously
disclosed,
family
members
have
informed
the
Company
that
they
are
interested
in diversifying
their respective
portfolios,
including through
the
potential sale
of
all
or
a
portion
of
their
equity
interests
in
the
Company
(the
“Potential
Portfolio
Diversification”),
which
could
involve
the
of
all
of
the
Class
A
Common
Stock.
Such
a
would
result
in
the
family
no
longer
controlling
a
of
the
voting
power
of
our
equity
securities
and
in
our
Company
ceasing
to
be
a
“controlled
company”
under
Nasdaq
rules. Adolphus B. Baker,
Board Chair and a family
member, has indicated
that he is willing to
serve as executive Board Chair
at least
through
our 2027
annual meeting
of stockholders.
The effect
of the
loss of
controlled company
status on
the trading
price of our Common Stock and on our business is uncertain, including our ability to retain and hire key personnel and maintain
with
customers and
suppliers, and
on
our
results. In
addition, our
may
be
more
likely
to
be
disrupted by persons seeking
to influence or effect
a change of control,
change of management or
change in governance of
our
Company. Any such disruptions to our business could have a material adverse effect on our operations and financial results.
Index
Sales of substantial amounts of our Common Stock in
the public markets, or the perception that
such sales might occur,
could cause the trading price of our Common Stock to decline.
Sales of a substantial number of shares of
our Common Stock into the public markets in
connection with the Potential Portfolio
Diversification, or the perception that such sales might occur, could cause the trading price of our Common Stock to decline.
The recent
high market
prices for
eggs, primarily caused
by the
HPAI-related
reduction in
supply,
has led
to pressure
from
to
change
long-standing
market-based
pricing
frameworks
and/or
otherwise
reduce
the
price
of
our
eggs. A
change
in
our
sales
arrangements
with
key
could
have
a
adverse
effect
on
our
revenues,
gross
profits
and
net
income.
Other
to
high
egg
prices,
by
state
or
federal
agencies, may also adversely impact our business.
Market prices for wholesale shell eggs have been volatile
and cyclical over time. Market prices for eggs
tend to increase during
and following outbreaks
of agricultural diseases
in the
egg industry
that reduce the
supply of
eggs, which has
occurred during
the current
HPAI
outbreak, until
the supply
and demand
balance is
restored. Many
of our
sales arrangements
with customers,
particularly for conventional eggs, are based on formulas that take into account, in varying ways, independently quoted regional
wholesale market prices
for eggs. The
recent high market
prices for eggs
have led to
pressure from customers
to change
long-
standing market-based pricing frameworks and/or otherwise
reduce the price of our
eggs. To
remain competitive and retain our
and
gain
new
ones,
we
must
consider
our
and
the
and
of
competitors.
A
change
in
our
sales
arrangements
with
key
could
have
a
adverse
effect
on
our
revenues and gross profits.
Other
to
high
egg
prices
may
also
adversely
impact
our
business.
On
26,
2025,
the
U.S.
Secretary
of
Agriculture announced
a $1
billion-dollar comprehensive
strategy to
curb HPAI,
protect the
U.S. poultry
industry,
and lower
egg prices. The Secretary’s
five-pronged strategy includes an additional $500
million for biosecurity measures, $400 million
in
financial relief for affected
farmers, and $100 million
for vaccine research, actions
to reduce regulatory burdens,
and exploring
temporary
egg
import
options.
As
disclosed
elsewhere
herein,
in
March
2025,
we
received
a
civil
investigative
demand
in
connection with a widely publicized investigation
by the Antitrust Division of
the Department of Justice into
the causes behind
nationwide increases
in egg
prices. In
addition, persistent
high egg
prices during
the peak
of the
current HPAI
outbreak may
have caused
and may
in the
future cause
some consumers
to purchase
fewer eggs.
Such persistent
high-price cycles
may also
attention
on
the
egg
industry
by
state
and
federal
agencies,
which
may
lead
to
investigations or related
activities. The potential impacts
of these reactions
on our business
are unclear,
unpredictable and may
divert our resources and attention from our core business activities, and they may have an adverse effect that could be material.
For
information,
see,
in
this
report,
Part
I.
Item
Notes
to
the
Note 10 -
Commitments and Contingencies
and Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results
of
Operations –
HPAI.
See
also the
following risk
factors in
Item IA.
in our
2024 Annual
Report:
“Market prices
of
wholesale shell eggs are
volatile, and decreases in
these prices can adversely impact our revenues
and profits.”; “Agricultural
risks, including outbreaks of avian diseases such as HPAI,
have harmed and in the future could harm our business.”
Current and
future
litigation and
other legal
matters could
expose us
to significant
liabilities and
adversely affect
our
business reputation.
We
and
certain of
our
subsidiaries are
involved in
various legal
other
legal matters.
Litigation, government
investigations and
other legal
matters are
inherently unpredictable,
and although
we believe
we have
meaningful defenses
in
these matters,
we may
incur liabilities
due to
adverse judgments
or enter
into settlements
of claims
that could
have a
adverse effect
on our
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