RIDGELAND, Miss. - Cal-Maine Foods , Inc. (NASDAQ: NASDAQ:CALM), the largest producer and distributor of fresh shell eggs in the U.S., announced today its strategic investment in Crepini LLC, marking the establishment of a new joint venture focused on egg products and prepared foods. The newly formed Crepini Foods LLC, based in Hopewell Junction, New York, will see Cal-Maine Foods infuse approximately $6.75 million in cash for a 51% stake, while Crepini LLC will integrate its existing assets and business for a 49% interest.
The partnership aims to leverage Crepini's brand, known for its egg wraps and protein pancakes, to expand Cal-Maine Foods' product portfolio and market reach. The investment is expected to enhance the company's offerings in the value-added products sector and meet growing consumer demand for affordable protein options.
Sherman Miller, President and CEO of Cal-Maine Foods, expressed optimism about the venture, citing the opportunity to extend the company's market presence and capitalize on Crepini's established brand. Paula Rimer Shkolnik, CEO of Crepini LLC, also conveyed enthusiasm for the expansion possibilities and alignment with Cal-Maine Foods' values.
This move aligns with Cal-Maine Foods' growth strategy to diversify its product mix and is poised to complement its existing egg product operations, including the Meadowcreek operation that supplies hard-cooked eggs.
The transaction is a strategic step for Cal-Maine Foods as it navigates the competitive egg market, which has faced challenges such as disease outbreaks and fluctuating demand and prices. The company's leadership believes the joint venture will create significant opportunities to expand its egg products business.
Cal-Maine Foods has a history of strategic investments and is known for its comprehensive range of egg products, including conventional, cage-free, and organic eggs. Crepini LLC, with its innovative egg wraps and related products, has established a presence in the U.S. and Mexico.
This news is based on a press release statement from Cal-Maine Foods, Inc. and does not include any forward-looking statements or predictions about future performance.
In other recent news, Cal-Maine Foods, the leading producer and distributor of fresh shell eggs in the United States, reported a slight decline in its fourth-quarter net sales for fiscal 2024, which ended on June 1. The company's quarterly net sales amounted to $640.8 million, falling short of analyst expectations of $644.73 million. The adjusted earnings per share (EPS) for the quarter were also below analyst projections, coming in at $2.32 instead of the anticipated $2.38.
Despite this, Cal-Maine Foods announced a net income of $113.2 million for the fourth quarter, showing a slight increase from the same period last year. For the entire fiscal year, the company's net sales totaled $2.3 billion, with a net income of $277.9 million. This represents a significant decrease from the previous fiscal year's $3.1 billion in net sales and $758.0 million net income.
In terms of recent developments, Cal-Maine Foods has made strategic acquisitions, including the assets of Fassio Egg Farms and facilities previously operated by Tyson Foods (NYSE:TSN). The company also remains focused on expanding its production capacity for specialty and cage-free eggs to meet consumer demand trends. Lastly, Cal-Maine Foods will pay a cash dividend of approximately $0.77 per share for the fourth quarter of fiscal 2024.
InvestingPro Insights
As Cal-Maine Foods, Inc. (NASDAQ: CALM) continues to expand its portfolio through strategic investments like the Crepini Foods LLC joint venture, it's worth noting that the company holds a strong financial position with more cash than debt on its balance sheet. This financial stability is a positive sign for investors looking at the company's ability to fund future growth and manage potential risks.
Another key highlight for investors is Cal-Maine Foods' track record of raising its dividend for three consecutive years, showcasing a commitment to returning value to shareholders. This is complemented by the company's attractive valuation, with a P/E ratio of 12.06, which is below the industry average, suggesting that the stock could be undervalued.
InvestingPro Data further indicates that Cal-Maine Foods has a market capitalization of $3.35 billion and a dividend yield of 4.46%, as of the last twelve months leading up to Q4 2024. The company's revenue for the same period stood at approximately $2.33 billion, although it experienced a decline in revenue growth by 26.06%. Despite this, Cal-Maine Foods has demonstrated a strong return on assets of 13.35%, emphasizing efficient use of its assets to generate earnings.
For those interested in additional insights, there are more InvestingPro Tips available for Cal-Maine Foods, which can be found at https://www.investing.com/pro/CALM. These tips could provide further guidance to investors considering this stock in their portfolio.
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