CAL-MAINE FOODS INC
For the period ended Aug 30, 2025. Filed Oct 1, 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.
Aug 30, 2025 · Filed Oct 1, 2025
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Notes to Condensed Consolidated Financial Statements
Note 1 - Summary of Significant Accounting Policies
Basis of Presentation
The unaudited
condensed consolidated
financial statements
of Cal-Maine
and its subsidiaries
(“Cal-Maine Foods,”
the
“Company,”
“we,”
“us,”
“our”)
have
been
in
with
the
instructions
to
Form
10-Q
and
Article
of
Regulation S-X and in accordance
with generally accepted accounting principles
in the United States of America
(“GAAP”) for
interim financial
reporting and
should be
read in
conjunction with
our Annual
Report on
Form 10-K
for the
fiscal year
ended
May
31,
(the
“2025
Annual
Report”).
These
reflect
all
that
are,
in
the
opinion
of
necessary
to
a
fair
statement
of
the
results
for
the
interim
periods
presented
and,
in
the
opinion
of
consist
of
of a
normal recurring
nature. Operating
results for
the interim
periods are
not necessarily
indicative
of operating
results for the entire fiscal year.
Fiscal Year
fiscal year ends on
the Saturday closest to
May 31. Each of
the three-month periods
ended on August 30, 2025
and August 31, 2024 included
weeks.
Use of Estimates
The
preparation
of the
condensed
in
conformity
with GAAP
requires
management
to
make
and
assumptions
that
affect
the
amounts
in
the
condensed
and
accompanying notes. Actual results could differ from those estimates.
Dividends Payable
Dividends are accrued
at the end of each
quarter according to the Company’s
dividend policy adopted by
its Board of Directors
(“Board”).
pays a
to holders
of its
(and, prior
to its
conversion
to Common
Stock on
April
14,
Class
A
Common
Stock)
on
a
basis
for
each
quarter
for
which
the
Company
reports
net
income
to
Foods,
Inc.,
computed
in
with
GAAP
in
an
amount
equal
to
one-third
(1/3)
of
such
net
income.
Dividends are
paid
to stockholders
of record
as of
the 60th
day
the last
day
of
such quarter,
except for
the fourth
fiscal quarter.
For the
fourth quarter,
pays dividends
to stockholders
of record
on the
65th
day after
the quarter
end. Dividends
are payable
on the
15th day
following the
record date.
Following a
quarter for
which the
Company
does
not
report
net
income
to
Foods,
Inc.,
the
Company
will
not
pay
a
for
a
subsequent profitable
quarter until the
Company is
profitable on
a cumulative
basis computed
from the
date of the
most recent
quarter for which a dividend was paid. The dividend policy is subject to periodic
review by the Board.
Revenue Recognition
The Company recognizes revenue through the sale of its products
to customers through retail, foodservice and other distribution
channels.
The
majority
of
the
revenue
is
derived
from
agreements
or
contracts
with
based
upon
the
ordering
its
with
a
single
performance
obligation
of
delivering
the
product.
The
Company
believes
the
performance
obligation
is
met
upon
delivery
and
acceptance
of
the
product
by
its
customers,
which
occurs
upon
shipment
or delivery
to a
customer based
on
the terms
of the
sale. Costs
paid
to third
party brokers
to obtain
agreements are
expensed as the Company’s
agreements are generally less than one year.
Revenues are
recognized in
an amount
that reflects
the net
consideration we
expect to
receive in
exchange for
delivery of
the
products.
The
Company
periodically
offers
sales
incentives
or
other
programs
such
as
rebates,
discounts,
coupons,
volume-
based incentives,
guaranteed sales and
other programs.
records an estimated
allowance for costs
associated with
these programs, which
is recorded as a
reduction in revenue at
the time of sale
using historical trends
and projected redemption
rates
of
each
The
Company
regularly
reviews
these
and
any
difference
between
the
estimated
costs
and
actual realization of these programs would be recognized
in the subsequent period.
Index
Business Combinations
The Company applies the acquisition
method of accounting, which
requires that once control is obtained,
all the assets acquired
and liabilities assumed,
including amounts
attributable to noncontrolling
interests, are recorded
at their respective
fair values at
the
date
of acquisition.
The
excess
of
the
price
over
fair
values
of
identifiable
assets
and
is
as
goodwill.
We
use
various
models
and
methods
to
determine
the
fair
values
of
identifiable
assets
and
liabilities,
such
as
top-down
and
bottom-up
for
inventory,
cost
method
and
market
for
property,
and
relief-from-royalty
and
multi-period
excess earnings to value
intangibles. Significant estimates in
valuing certain intangible assets include,
but are not limited to,
the
amount and timing of future cash flows, growth rates, discount rates
and useful lives.
New Accounting Pronouncements and Policies
In December
2023, the
Financial Accounting
Standards Board
(“FASB”)
issued Accounting Standards
Update (“ASU”)
2023-
09,
Income Taxes
(Topic
- – Improvements to
Income Tax
Disclosures
. This ASU requires that an
entity, on an
annual basis,
disclose
income
tax
information,
related
to
the
rate
reconciliation
and
income
taxes
paid.
The
ASU
is
intended
to enhance
the transparency
and decision
usefulness of
income tax
disclosures. ASU
2023-09
is effective
for annual
periods
beginning
after
15,
The
Company
is
currently
evaluating
the
impact
of
ASU
2023-09
on
its
consolidated financial statement disclosures.
In
2024,
the
FASB
issued
ASU
2024-03,
Income
Statement
—
Reporting
Comprehensive
Income
—
Expense
Disaggregation Disclosures
(Subtopic 220-40)
. The objective of ASU
2024-03 is to improve disclosures
about a public entity’s
expenses, primarily
through additional
disaggregation of
income statement expenses.
Additionally,
in January
2025, the FASB
further
clarified
the
effective
date
of
ASU
2024-03
with
the issuance
of ASU
2025-01.
ASU
2024-03 is
effective
for
annual
periods beginning
after December
15, 2026, and
interim periods
within annual
reporting periods
beginning after
December 15,
- Early
adoption is permitted
and may
be applied
either on a
prospective or
retrospective basis. The
Company is
currently
evaluating the impact of ASU 2024-03 on its consolidated financial statement disclosures.
There are no
other new accounting
pronouncements
issued or effective
during the fiscal year
that had or
are expected to have
a
material impact on our consolidated financial statements.
Index
Note 2 - Acquisition
Acquisition of Echo Lake Foods, LLC
Effective
June 2, 2025
, the Company
acquired Echo
Lake Foods, LLC
and certain
related companies
(collectively “Echo
Lake
Foods”). Echo
in Burlington,
Wisconsin and
produces, packages,
markets and
distributes prepared
foods,
including waffles, pancakes, scrambled eggs, frozen
cooked omelets, egg patties, toast and diced eggs. The Company
accounted
for the acquisition as a business combination.
Pending
the
finalization
of
the
valuation,
the
table
summarizes
the
consideration
paid
for
Echo
Lake
Foods and the amounts of assets acquired and liabilities assumed recognized
at the acquisition date (in thousands):
Cash consideration paid
$
275,406
Recognized amounts of identifiable assets acquired and liabilities assumed
Cash
$
Investment securities available-for-sale
14,147
Accounts receivable
31,923
Inventories
21,601
Prepaid expenses and other current assets
3,131
Property, plant &
equipment
151,697
Intangible assets
36,800
259,414
Accounts payable and other current liabilities
(13,047)
Total identifiable
net assets
246,367
29,039
$
275,406
Cash and
accounts receivable
along with
liabilities assumed
were valued
at their
carrying value
which approximates
fair value due to the short maturity of these instruments.
Inventories consisted
primarily of
raw materials,
supplies and
finished goods.
Raw materials
and supplies
were valued
at their
carrying value as
management believes that
their carrying value
best approximates their
fair value. Finished
goods were valued
using both the bottom-up and top-down approach. The
bottom-up approach measures the value of inventory as the value created
by the
target company
(i.e., the
costs incurred,
profit realized,
and tangible
and intangible
assets utilized)
pre-acquisition date.
The top-down
approach measures
the value
of inventory
as the
incremental
inventory value
created by
the market
participant
buyer as part
of its selling
effort to an
end customer (i.e.,
the costs that
will be incurred,
the profit that
will be realized,
and the
tangible and intangible assets that will be utilized) post-acquisition date.
Property,
plant and
equipment were
valued
utilizing
the cost
and
market approach.
Machinery
and equipment
were
valued
utilizing
the
cost
which
is
based
on
replacement
or
reproduction
costs
of
the
assets
and
subtracting
any
depreciation resulting from
physical deterioration and/or
functional or economic
obsolescence. Land and
buildings were valued
utilizing the market approach by using a real estate valuation.
Intangible assets
consisted primarily
of customer
relationships and
a trade name.
Customer relationships
were valued using
the
multi-period excess earnings method and the trade name was valued
using the relief-from-royalty method.
represents
the
excess
of
the
price
of
the
over
the
date
fair
value
of
the
net
assets acquired.
in
connection
with
the Echo
Lake
Foods
acquisition is
to projected
synergies
from integrating
the operations
of Echo
operations of
the Company.
recognized
goodwill of $
29.0
million as a result of the acquisition, all of which is deductible for tax purposes.
Index
transaction costs
of
$
thousand and
$
6.6
million
in the
of
and fiscal
year
2025, respectively,
as a result of the Echo Lake Foods acquisition.
Note 3 - Investment
Securities Available-for-Sale
represents the
available-for-sale as
of August
and May
31, 2025
(in
thousands):
Amortized
Cost
Gains
Losses
Estimated
Fair Value
$
22,072
$
$
—
$
22,140
81,527
—
81,504
536,273
2,120
—
538,393
4,960
—
4,968
245,019
—
245,084
109,288
—
109,386
$
999,139
$
2,359
$
$
Amortized
Cost
Gains
Losses
Estimated
Fair Value
$
21,695
$
$
—
$
21,698
90,880
—
90,830
431,378
—
431,508
5,200
—
5,194
240,655
—
240,395
103,119
—
103,083
$
892,927
$
$
$
892,708
Actual maturities
may differ
from contractual
maturities as some
borrowers have
the right to
call or prepay
obligations with
or
without penalties. Contractual maturities of current investment securities
at August 30, 2025 are as follows (in thousands):
Estimated Fair Value
Within one year
$
472,795
1-5 years
528,680
Total
$
Note 4 - Fair Value
Measurements
is required
to categorize
both financial
and nonfinancial
assets and
liabilities based
on the
following fair
value
hierarchy. The
fair value
of an
asset is
the price
at which
the asset
could be
sold in
an orderly
transaction between
unrelated,
knowledgeable, and willing
parties able to engage in
the transaction. A liability’s
fair value is defined
as the amount that would
be
paid
to
transfer
the
liability
to
a
new
obligor
in
a
transaction
between
such
parties,
not
the
amount
that
would
be paid
to
settle the liability with the creditor.
Level 1
- 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 that are observable for the asset or liability
Inputs derived principally from or 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
Index
The disclosures of fair value of certain financial assets and liabilities that are recorded
at cost are as follows:
Cash and Cash Equivalents, Accounts Receivable, and Accounts Payable
The carrying amount approximates fair value due to the short maturity of these instruments.
Assets and Liabilities Measured at Fair
Value
on a Recurring Basis
In accordance with
the fair value hierarchy
described above, the
following table shows the
fair value of our
financial assets and
that
are
to
be
measured
at
fair
value
on
a
recurring
basis
as
of
August
30,
and
May
31,
(in
thousands):
Level 1
Level 2
Level 3
Balance
Assets
$
—
$
22,140
$
—
$
22,140
—
81,504
—
81,504
—
538,393
—
538,393
—
4,968
—
4,968
—
245,084
—
245,084
—
109,386
—
109,386
Total assets measured at fair
value
$
—
$
$
—
$
Liabilities
$
—
$
—
$
21,500
$
21,500
Total liabilities measured
at fair value
$
—
$
—
$
21,500
$
21,500
Level 1
Level 2
Level 3
Balance
Assets
$
—
$
21,698
$
—
$
21,698
—
90,830
—
90,830
—
431,508
—
431,508
—
5,194
—
5,194
—
240,395
—
240,395
—
103,083
—
103,083
Total assets measured at fair
value
$
—
$
892,708
$
—
$
892,708
Liabilities
$
—
$
—
$
21,500
$
21,500
Total liabilities measured
at fair value
$
—
$
—
$
21,500
$
21,500
Investment securities – available-for-sale are all classified as Level 2 and consist of
securities with maturities of three months or
longer
when
purchased.
We
classified
these
as
current
because
amounts
invested
are
readily
available
for
current
operations. Observable inputs for these securities are yields, credit risks, default
rates, and volatility.
classified as
Level 3
consists of
the potential
obligation to
pay an
earnout to
Fassio Egg
Farms, Inc.
(“Fassio”) contingent
on the
business meeting
certain return
on profitability
milestones over
a
three-year
period that
commenced on the
date of the acquisition
in the second
- The fair
value of the
contingent consideration is
estimated using a discounted
cash flow model. Key assumptions
and unobservable inputs that require
significant judgment used
in the
estimate include
weighted average
cost of
capital, egg
prices, projected
revenue and
expenses over
the period
for which
the
contingent
consideration
is
measured,
and
the
probability
assessments
with
respect
to
the
likelihood
of
achieving
the
forecasted
projections. There
were
no
adjustments to
the fair
value of
contingent consideration
recorded in
weeks
ended August 30, 2025.
Index
Note 5 - Inventories
Inventories consisted of the following as of August 30, 2025 and May 31,
2025 (in thousands):
Flocks, net of amortization
$
168,968
$
166,507
Feed and supplies
107,165
99,188
Raw materials and finished goods inventory
52,296
29,975
$
328,429
$
295,670
We
grow
and
maintain
flocks
of
layers
(mature
female
chickens),
pullets
(female
chickens,
under
weeks
of
age),
and
breeders (male
and female
chickens used
to produce
fertile eggs
to hatch
for egg
production flocks).
Our total
flock at
August
30, 2025 and May
31, 2025 consisted of
11.1
11.5
million pullets and breeders
and
48.5
48.3
million layers, respectively.
Note 6 - Equity
The following reflects equity activity for the thirteen weeks ended
August 30, 2025 and August 31, 2024 (in thousands):
Ended August 30, 2025
Cal-Maine Foods, Inc. Stockholders
Treasury
Paid In
Accum. Other
Retained
Noncontrolling
Amount
Amount
Capital
Comp. Gain (Loss)
Earnings
Interest
Total
Balance at May 31, 2025
$
$
(85,893)
$
80,845
$
(1,007)
$
2,565,928
$
5,391
$
2,566,015
Other comprehensive
income, net of tax
—
—
—
1,961
—
—
1,961
Stock compensation plan
transactions
—
1,289
—
—
—
1,291
Dividends ($
1.371
per share)
—
—
—
—
(66,457)
—
(66,457)
Net income (loss)
—
—
—
—
199,340
(233)
199,107
Balance at August 30, 2025
$
$
(85,891)
$
82,134
$
$
2,698,811
$
5,158
$
2,701,917
Ended August 31, 2024
Cal-Maine Foods, Inc. Stockholders
Class A
Treasury
Paid In
Accum. Other
Retained
Noncontrolling
Amount
Amount
Amount
Capital
Comp. Loss
Earnings
Interest
Total
Balance at June 1,
$
$
$
(31,597)
$
76,371
$
(1,773)
$
1,756,395
$
(3,104)
$
1,797,043
Other comprehensive
income, net of tax
—
—
—
—
1,299
—
—
1,299
Stock compensation
plan transactions
—
—
(35)
1,132
—
—
—
1,097
Dividends ($
1.019
per
share)
Common
—
—
—
—
—
(45,075)
—
(45,075)
Class A common
—
—
—
—
—
(4,891)
—
(4,891)
Net income (loss)
—
—
—
—
—
149,976
(386)
149,590
Balance at August 31,
$
$
$
(31,632)
$
77,503
$
(474)
$
1,856,405
$
(3,490)
$
1,899,063
Note 7 - Net Income per Common Share
Basic net
income per
share attributable
to Cal-Maine
on the
weighted average
shares of
(and when
they were
outstanding shares
of Class
A Common
Stock) outstanding.
All shares
of Class
A Common
Stock were
Index
converted into
on April
14, 2025.
Diluted net
income per
share attributable
to Cal-Maine
on weighted-average
shares of
outstanding during
the relevant
period adjusted
for the
dilutive effect
of share-
based awards.
The
table
a
reconciliation
of
the
numerators
and
denominators
used
to
determine
basic
and
diluted
net
income per common share attributable to Cal-Maine Foods, Inc.
(amounts in thousands, except per share data):
Ended
Numerator
$
199,107
$
149,590
(233)
(386)
$
199,340
$
149,976
Denominator
Weighted-average
common shares outstanding, basic
48,281
48,761
Effect of dilutive restricted shares
Weighted-average
common shares outstanding, diluted
48,424
48,932
Net income per common share attributable to Cal-Maine Foods, Inc.
Basic
$
4.13
$
3.08
Diluted
$
4.12
$
3.06
Note 8 - Stock Based Compensation
Total
stock-based compensation
expense was
$
1.3
$
1.1
weeks ended
August 30,
2025 and
August 31, 2024, respectively.
Unrecognized
compensation expense
as a
result of
non-vested shares
of equity-based
awards outstanding
under the
Amended
and
Restated 2012
Omnibus Long-Term
Incentive
Plan at
August
30,
of $
8.0
million will
be recorded
over a
weighted
average period of
2.0
years. Refer to Part
II Item 8,
Notes to Consolidated
Financial Statements and
Supplementary Data, Note
13 – Stock-Based Compensation in our 2025 Annual Report for further
information on our stock compensation plans.
The Company’s equity-based award
activity for the thirteen weeks ended August 30, 2025 was as follows:
Number of
Shares
Weighted
Average Grant
Date Fair Value
Outstanding, May 31, 2025
212,717
$
66.93
Granted
13,518
101.14
Vested
(529)
54.10
Forfeited
(793)
73.93
Outstanding, August 30, 2025
224,913
$
68.99
Index
Note 9 – Segment Reporting
The Company has
one
operating and
one
reportable segment, which is
the production, packaging, marketing
and distribution of
prepared foods and egg products. The Company is managed on a consolidated basis.
operating segment
is determined
on the
basis of
our organizational
structure and
information that
is regularly
reviewed by
our Chief
Operating Decision Maker
(“CODM”). The
CODM is Sherman
Miller, President
and Chief
Executive Officer.
The CODM reviews net income,
which is reported on the
Condensed Consolidated Statements of
Income, to
assess the
performance of,
and make
decisions on
how to
allocate resources
to, the
segment. The
CODM utilizes
expense information
regularly provided
in the CODM
package in
order to
assist with assessing
performance and
deciding how
to
allocate
resources,
which
align
with
the
expense
categories
as
on
the
face
of
the
Consolidated Statements
of Income.
The measure
of segment
assets is
reported on
the Condensed
Consolidated Balance
Sheet
as Total assets.
Revenue
derives
from
the
sales
of
shell
eggs,
foods,
and
egg
throughout
the
Unites
States.
The
shell
egg
product
include
and
shell
eggs.
shell
eggs
include
cage-free,
organic,
brown,
pasture-raised
and
eggs.
shell
eggs
sales
all
other
shell egg sales not sold as specialty shell eggs. The Company’s
prepared foods include offerings such as pre-cooked
egg patties,
folded
and
scrambled
egg
formats,
eggs,
pancakes,
waffles,
and
wraps.
Egg
include
liquid and frozen egg products.
Other sales represent feed sales, miscellaneous byproducts and resale products.
The following table provides revenue disaggregated by product category
(in thousands):
Ended
Conventional shell egg sales
$
505,941
$
484,736
Specialty shell egg sales
283,456
256,777
83,936
8,938
37,107
26,237
Other
12,162
9,183
$
922,602
$
785,871
The following table provides revenue disaggregated by sales channel
(in thousands):
Ended
Retail
$
739,787
$
669,709
Foodservice
152,085
109,845
Other
30,730
6,317
$
922,602
$
785,871
Retail customers include primarily national
and regional grocery store chains,
club stores, and companies servicing independent
supermarkets
in
the
U.S.
Foodservice
include
companies
that
sell
food
and
related
items
to
restaurants, convenience stores, healthcare and education facilities and hotels.
Note 10 - Commitments and Contingencies
LEGAL PROCEEDINGS
Civil Investigative Demand
In
March
2025,
the
Company
received
a
Civil
Investigative
Demand
(“CID”)
from
the
Department
of
Justice
(“DOJ”)
in
connection with
an antitrust investigation
to determine whether
there is, has
been or may
be a violation
of the antitrust
laws by
anticompetitive
conduct
by
and
among
egg
producers.
In August
2025,
the
Company
received
a
subpoena
from
the
State
of
New York
requesting information
and documents
related to its
investigation of
anticompetitive conduct
and high
egg prices
in
the
egg
The
Company
is
complying
with
the
CID
and
the
subpoena
and
cooperating
with
the
investigations.
Index
Management
cannot
predict
the
eventual
scope,
duration
or
outcome
of
these
investigations
and
is
unable
to
estimate
the
amount or range of potential losses, if any,
at this time.
State of Texas
v. Cal-Maine Foods, Inc. d/b/a Wharton;
and Wharton County Foods, LLC
On April
23, 2020,
and its subsidiary
Wharton County
Foods, LLC (“WCF”)
were named
as defendants in
State
of
Texas
v.
Foods,
Inc.
d/b/a
Wharton;
and
Wharton
County
Foods,
LLC,
Cause
No.
2020-25427,
in
the
Court of
Harris County,
Texas.
The State
of Texas
(the “State”)
asserted claims
based on
and WCF’s
alleged
violation
of
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
at
excessive
or
exorbitant
prices
during
the
COVID-19
state
of
emergency
and
made
misleading
about
shell
egg
prices.
The
State
sought
temporary
and
permanent
injunctions
against
the
Company
and
WCF
to
prevent
further
alleged
violations
of
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.
On
August
16,
2022,
the
appeals
court
reversed
and
remanded
the
case
back
to
the
trial
court
for
further
proceedings. On October 31, 2022,
the Company and WCF appealed
the First District Court’s
decision to the Supreme Court
of
Texas.
29, 2023,
the Supreme
Court of
Texas
denied the
Petition for
Review and
remanded to
the
trial
court
for
further
proceedings.
On
30,
2024,
the
State
filed
an
amended
petition,
to
address
a
procedural
deficiency
that
the
State
to
plead
it
was
seeking
relief
over
$
1.0
million
restitution,
civil
penalties,
attorney’s
fees
and
costs.
Pre-trial
proceedings
are
progressing
in
with
the
court’s
schedule. Management believes the risk of material loss related to this matter to
be remote.
Kraft Foods Global, Inc. et al. v.
United Egg Producers, Inc. et al.
25, 2008,
was named
as one
of several
defendants in
numerous antitrust
cases involving
the U.S.
shell
egg
The
Company
settled
all of
these
cases,
except
for
the
claims
of
certain
who
sought
substantial
damages
allegedly
arising from
the purchase
of egg
products (as
opposed
to shell
eggs). These
remaining
are Kraft
Food Global,
Inc., General
Mills, Inc.,
and Nestle
USA, Inc.
(the “Egg
Products Plaintiffs”)
and, until
a subsequent
settlement
was reached as described below,
The Kellogg Company.
13, 2019,
the case
Egg Products
Plaintiffs was
remanded from
a multi-district
litigation proceeding
in
the
United
States
Court
for
the
Eastern
of
Pennsylvania,
In
re
Processed
Egg
Antitrust
Litigation,
MDL No. 2002, to
the United States District Court
for the Northern District
of Illinois, Kraft Foods Global,
Inc. et al. v.
United
Egg
Producers,
Inc.
et
al., Case
No.
1:11-cv-8808,
for
trial. The
Egg
Plaintiffs
alleged
that
the
Company
and
other
defendants
violated
Section
of
the
Sherman
Act,
U.S.C.
§
1,
by
agreeing
to
limit
the
of
eggs
and
thereby
illegally
to
raise
the
prices
that
paid
for
processed
egg
products.
In
particular,
the
Egg
Plaintiffs
attacked
certain features of
the United Egg
Producers animal-welfare guidelines
and program used by
the Company and
many other egg
producers.
On October 24, 2019,
the Company entered into
a confidential settlement agreement
with The Kellogg Company
dismissing all
claims against the
Company for an
amount that did
not have a
material impact on
financial condition or
results
of operations.
On November
11,
2019, a
stipulation
for dismissal
was filed
court, and
on March
28, 2022,
the court
dismissed the Company with prejudice.
The trial of this case began
on October 17, 2023. On December
1, 2023, the jury returned a decision
awarding the Egg Products
Plaintiffs $
17.8
million in damages.
On November 6,
2024, the court
entered a final
judgement against the
Company and other
defendants,
jointly
and
severally,
totaling
$
43.6
million
after
trebling.
On
4,
2024,
the
Company
filed
a
renewed
motion for judgment as
a matter of law or
for a new trial, and a
motion to alter or amend
the judgment. On December 13,
2024,
the
court
granted
defendants’
20,
motion
to
stay
enforcement
of
the
judgment
and
entered
an
agreed
order
requiring the
defendants to
post security
during post-judgment
proceedings and
appeal, and
stayed proceedings
to enforce
the
judgment until the disposition
of the post-judgment motions
and ultimate appeals. On
December 17, 2024, the
Company posted
a
bond in
the approximate
amount of
$
23.9
a portion
of the
total bond
to preserve
the right
to
appeal the trial
court’s
decision. Another defendant
posted a bond
for the remaining
amount. The Company
intends to continue
to vigorously defend the claims asserted by the Egg Products Plaintiffs.
If the
jury’s
decision is
ultimately upheld,
would be
jointly and
severally liable
with other
defendants for
treble
damages,
or
$
43.6
subject
to
credit
for
certain
settlements
with
previous
settling
defendants,
plus
the
Egg
Product
Plaintiffs’
reasonable
attorneys’
fees.
During
our
second
fiscal
quarter
of
2024,
we
an
accrued
expense
of
$
19.6
million
in selling,
general and
expenses in
Consolidated Statements
of Income
and
classified
as
other
noncurrent
in
the
Balance
Sheets.
Although
less
than
the
bond
posted
by
the
the
accrual
represents
our
estimate
of
the
proportional
share
of
the
reasonably
Index
possible ultimate damages award,
excluding the Egg Product
Plaintiffs’ attorneys’ fees
that we believe would
be approximately
offset
by
the
credits
noted
above.
We
have
entered
into
a
judgment
allocation
and
joint
defense
agreement
with
the
other
defendants remaining in the
case. Our accrual may change
in the future to the extent
we are successful in further
proceedings in
the litigation.
State of Oklahoma Watershed Pollution
Litigation
On June
18, 2005,
the State
of Oklahoma
filed suit,
in the
United States
District Court
for the
Northern District
of Oklahoma,
against Cal-Maine
Foods,
Inc. and
Tyson
Foods,
Inc., Cobb-Vantress,
Inc., Cargill,
Inc., George’s,
Inc., Peterson
Farms, Inc.
and
Simmons
Foods,
Inc.,
and
certain
of
their
affiliates.
The
State
of
Oklahoma
claims
that
through
the
disposal
of
chicken
litter the
defendants polluted
the Illinois
River Watershed.
This watershed
provides water
to eastern
Oklahoma. The
complaint
sought
injunctive
relief
and
damages,
but
the
claim
for
damages
was dismissed
by
the
court.
Foods,
Inc.
discontinued
operations
in
the
watershed
in
or
around
Since
the
litigation
began,
Foods,
Inc.
purchased
%
of
the
membership
interests
of
Benton
County
Foods,
LLC,
which
is
an
ongoing
shell
egg
operation within
the Illinois
River Watershed.
Benton County
Foods, LLC
is not
a defendant
in the
litigation. We
also have
a
number of small contract producers that operate in the area.
The non-jury trial in the case began in September 2009
and concluded in February 2010. On January 18, 2023, the court entered
findings of
fact and
conclusions of
law in favor
of the
State of
Oklahoma, but
no penalties
were assessed.
The court
found the
defendants jointly
and severally
liable for
state law
nuisance, federal
common law
nuisance, and
state law
trespass. The
court
also found
the producers
vicariously liable
for the
actions of
their contract
producers. On
June 12,
2023, the
court ordered
the
parties to mediate
before retired Tenth
Circuit Chief Judge
Deanell Reece Tacha,
but the mediation
was unsuccessful. On
June
26, 2024,
the district
court denied
defendants’ motion
to dismiss
the case.
13, 2024,
a status
hearing
was held
and the court scheduled an evidentiary
hearing for December 3, 2024,
to determine whether any legal
remedy is available based
on the now
14-year-old record
and changed
circumstances of the
Illinois River watershed.
On June 17,
2025, the court
entered
an opinion
and order
that found
that the
State satisfied
its burden
to show
that conditions
in the
Illinois River
watershed have
not materially changed
since the original trial
and the case was
not moot. On
July 9, 2025, the
State of Oklahoma filed
its form
of proposed
final judgment
and brief
in support
thereof seeking
over $100
million in
total fines
from all
defendants, including
$
18.2
million
in
fines
from
the
plus
attorneys’
fees.
On
July
30,
2025,
the
Company
and
other
defendants filed
their form of proposed
final judgment and
brief in support
thereof seeking no
monetary fines or
penalties. The
court has not
ruled on these
submissions but is
expected to enter
a final judgment
imposing fines and
potentially non-monetary
remedies,
if
any,
in
the
future.
No
accrual
for
this
legal
proceeding
has
been
as
of
August
30,
Based
on
information available as
of September 30,
2025, management expects
that the ultimate
resolution of this
litigation will result
in
a loss to the Company, if any,
that is substantially less than the amount sought from the Company by the State of
Oklahoma.
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.
Index
ITEM
MANAGEMENT’S
DISCUSSION
AND
ANALYSIS
OF
FINANCIAL
CONDITION
AND
RESULTS
OF
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.