Recommendation: Buy Share Price (as of 2/4/15): $36.53 Sector Head: James Carlstedt Michael Metz Thomas Chadwick Cal- Maine Foods, Inc. (CALM:NASDAQ)

Fundamentals Sector: Consumer Staples Current Price: $36.53 Market Cap: $1.72B Beta:.61 P/E: Dividend Yield: 1/3 Net Income Paid Quarterly Last Years Annual Yield:2.87% Revenue: $1.45B EBITDA:$183M

Egg Industry Products –Shell Eggs –Specialty Shell Eggs –Egg Products- Liquid, Frozen –Food Service –Export

Cal- Maine Foods, Inc. Largest producer/ marketer of shell eggs in USA 3 Business Segments –Specialty Eggs –Regular Shell Eggs –Liquid, Frozen, or Dried Produces domestically

Highest Total Layers- USA

CALM’s Top Locations/ Brands Southwestern Southeastern Mid- Western Mid- Atlantic Egg-Land’s Best®, Land O’ Lakes®, Farmhouse®, and 4-Grain®

Top 10 Customers

Vertically Integrated

CALM Egg Growth

Top-Line Growth

Customer’s Health Choices

Risk Factors: 1.Egg Price Volatility 2.Feed Price Volatility 3.Shift to other products 4.Seasonality 5.Government Regulation 6.Consumer Demand 7.Barriers of Entry

Egg Price Volatility

Feed Price Volatility

Risk of Consumer’s Shifting to Other Products

Seasonality

Government Regulation/ Barriers to Entry Prop 2 California Animal Rights Activists –Animal Concentration

Consumer Demand

CAPEX Strategy Growth and Acquisition of Fragmented Market Improved Facilities

Acquisitions Completed 18 acquisitions since 1989 Acquired remaining 50% of Delta Egg Farms for $17M- 2014

Latest Earnings Report 12/23/14 reported Q2 of 2015 Net Sales $378.6 million (6.9% yoy) 36.6 million Net Income $0.76 per share Fiscal 2014: Billion Dozen Shell Eggs Sold

Financial Highlights

Institutional/ Insider Holdings 12/23/14 reported Q2 of 2015 Net Sales $378.6 million (6.9% yoy) 36.6 million Net Income $0.76 per share Fiscal 2014: Eggs Sold *13G/A Filing on BlackRock Institutional purchased a 6.3% stake

Recent Decline Due to Misunderstanding China temporarily banned imports of US chicken, turkey, and eggs –Effective January 8, 2015 –Strain of (HPAI) in Pacific Northwest Occurs only in wild birds/ small domestic flocks Hundreds of miles away from US commercial prod. Exports to China account for 0.7% of total US shell egg production

Stock Performance

Comparable Competitors* *main peers are Rose Acre Farms, Moark LLC, Rembrandt Enterprises, Daybreak Foods CALMTSNSAFMHRL Mtk Cap1.72B14.81B1.86B13.58B P/E P/B P/S Beta EPS

Thesis Leading producer Highly fragmented industry Price shock from Chinese ban Prop 2 – increased capex –Higher barrier to entry Acquisitions – seeking & a target Strong management – ROE & ROA Great dividend

DCF Valuation

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