Cal-Maine Foods Inc – ‘10-K’ for 5/30/98

As of:  Thursday, 8/27/98   ·   For:  5/30/98   ·   Accession #:  16160-98-3   ·   File #:  0-04892

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                         41±   183K 
 3: EX-10       Material Contract                                      1      7K 
 4: EX-23       Consent of Experts or Counsel                          1      5K 
 2: EX-27       Financial Data Schedule (Pre-XBRL)                     1      6K 

10-K   —   Annual Report
Document Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION  
Washington, DC  20549       

FORM 10-K       

X       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES         
EXCHANGE ACT OF 1934                

  FOR FISCAL YEAR ENDED MAY 30, 1998

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934      

Commission file number:  000-04892              

CAL-MAINE FOODS, INC.                         Delaware                          
(Exact name of registrant               (State or other Jursidiction of         
as specified in its charter)             Incorporation or Organization)         

3320 Woodrow Wilson Avenue, Jackson, Mississippi  39209     
(Address of principal executive offices)  (Zip Code)

(601) 948-6813        
(Registrant's telephone number, including area code)  

Securities registered pursuant to Section 12 (b) of the Act:    NONE            

Securities registered pursuant to Section 12 (g) of the Act:  Common Stock,     
$0.01 par value                                                               

Indicate by check mark whether the registrant (1) has filed all reports         
required to be filed by Section 13 or 15(d) of the Securities Exchange          
Act of 1934 during the preceding 12 months (or for such shorter period          
that the registrant was required to file such reports), and (2) has been        
subject to such filing requirements for the past 90 days.                       

Yes___X___      No________                                                      

Indicate by check mark if disclosure of delinquent filers pursuant to           
Item 405 of Regulation S-K is not contained herein, and will not be             
contained, to the best of registrant's knowledge, in definitive proxy           
or information statements incorporated by reference in Part III of this         
Form 10-K or any amendment to this Form 10-K. (X)                               

As of July 31,1998, 11,949,988 shares of the registrant's Common Stock,         
$0.01 par value, and 1,200,000 shares of the registrant's Class A Common        
Stock, $0.01 par value, were outstanding.  The aggregate market value of        
the common stock held by non-affiliates of the registrant on that date was      
$ 19,021,247, computed at the closing price on that date as reported by the     
National Association of Securities Dealers Automated Quotation System.          

DOCUMENTS INCORPORATED BY REFERENCE                                             
Pursuant to General Instruction G(3), the responses to Items, 10, 11, 12        
and 13 of Part III of this report are incorporated herein by reference to       
the information contained in the Company's Proxy Statement for its 1998         
Annual Meeting of Shareholders to be held on October 9, 1998, to be filed       
with the Securities and Exchange Commission on or about September 4, 1998.      

PART I                                                                          

ITEM 1.  BUSINESS                                                               
General                                                                         

Cal-Maine Foods, Inc. ("Cal-Maine" or  the "Company") was incorporated in       
Delaware in 1969.   The Company's primary business is the production,           
cleaning, grading, and packaging of fresh shell eggs for sale to shell egg      
retailers. Until May 1998,when the Company ceased all of its egg products       
operations, the Company was also engaged in the manufacturing and sale of       
egg products. The shell egg segment sales accounted for approximately 94%       
and egg products sales for approximately 4% of the Company's net sales in       
fiscal 1998, had slaes of approximately 424 million dozen shell eggs.  This     
volume represents approximately 10.5 percent of all shell eggs sold in the      
United States.  The Company markets the majority of its eggs in 26 states,      
primarily in the Southwestern, Southeastern, Midwestern and Mid-Atlantic        
regions of the United States.                                                   

The Company's principal executive offices are located at 3320 Woodrow Wilson    
Avenue, Jackson, Mississippi 39209, and its telephone number is 601-948-6813.   
Except as otherwise indicated by the context, references herein to the          
"Company" or "Cal-Maine" include all subsidiaries of the Company.               

Growth Strategy and Acquisitions                                                

The Company  pursues an aggressive growth strategy, including the acquisition   
of existing shell egg production and processing facilities, as well as the      
construction of new and more efficient facilities.  Since the beginning of      
fiscal 1989, the Company has consummated eight acquisitions, adding an          
aggregate of 15.9 million layers to its capacity, and built four new            
"in-line" shell egg production and processing facilities and one pullet         
growing facility, adding 4.0 million layers and 950,000 pullets to its          
capacity.   Each of the new shell egg production facilities generally           
provides for the processing of approximately 300 cases of shell eggs per        
hour. These increases in capacity have been accompanied by the retirement       
of older and less efficient facilities and a reduction in eggs produced by      
contract producers.  The new "in-line" facilities result in the gathering,      
cleaning, grading and packaging of shell eggs by less labor-intensive, more     
efficient, mechanical means.                                                    

As a result of the Company's growth strategy, the Company's total flock,        
including pullets, layers and breeders, has increased from approximately        
6.8 million at May 28, 1988 to an average of approximately 18.0 million for     
each of the past five fiscal years.  Also, the number of dozens of shell        
eggs sold has increased from approximately 117 million in the fiscal year       
ended May 28, 1988 to an average of approximately 403 million for the past      
five fiscal years.  Net sales amounted to $309.1 million in fiscal 1998,        
more than four times net sales of $69.9 million in fiscal 1988.                 

The Company's acquisitions and construction of larger facilities, described     
in the tables below, reflect the continuing concentration of shell egg          
production in the United States in a decreasing number of shell egg             
producers.  The Company believes that a continuation of that concentration      
trend may result in the reduced cyclicality of shell egg prices, but no         
assurance can be given in that regard.                                          

Acquisitions of Egg Production and Processing Facilities          

                                                                [Download Table]
                                                                             
                                              Layers                Purchase 
Fiscal Year (1)  Seller               Location      Acquired           Price 
---------------  ------            --------      --------           ---------
1989            Egg City, Inc.     Arkansas      1,300,000       $  6,716,000
1990            Sunny Fresh Foods,                                           
                Inc.               (2)           7,500,000         21,629,000
1991            Sunnyside Eggs,                                              
                Inc.               NC            1,800,000          6,000,000
1994            Wayne Detling                                                
                Farms              Ohio          1,500,000         12,194,000
1995            A & G Farms (3)    Kentucky      1,000,000          2,883,000
1997            Sunbest Farms      Arkansas        600,000          1,302,000
1997            Southern Empire                                              
                 Egg Farm, Inc.    Georgia       1,300,000         10,654,000
1998            J&S Farms/Savannah                                           
                Valley Egg         Georgia         900,000          3,745,000
                                                   --------------------------
             Total                              15,900,000       $ 65,123,000
                                                =============================

(1)  The Company's fiscal year ends on the Saturday closest to May 31.          

(2)  New Mexico, Kansas, Texas, Alabama, Oklahoma, Arkansas and North Carolina  

(3)  In connection with the purchase, the Company leased substantially all      
facilities and certain equipment of the business under an operating lease       
with monthly rentals of $79,000.                                                

Construction of Egg Production, Pullet Growing and Processing Facilities (1)    

                                                                [Download Table]

                                                                           
Fiscal Year                             Layer      Pullet       Approximate
Completed         Location              Capacity   Capacity        Cost    
-----------       --------              --------   --------     -----------
1990            Mississippi            1,000,000    200,000    $ 10,000,000
1992            Louisiana              1,000,000       -         10,000,000
1992            Mississippi               -         500,000       3,500,000
1994            Mississippi            1,000,000       -          9,200,000
1996            Texas                  1,000,000    250,000      14,000,000
                                       ------------------------------------
        Total                          4,000,000    950,000    $ 46,700,000


(1)     Does not include (i) current construction in Chase, Kansas, expected to 
be completed in fiscal 1999 at an estimated cost of approximately               
$21,500,000, adding approximately 1,000,000 layer and 250,000 pullet            
capacity, and a feed mill and grain storage; or (ii) construction in            
Waelder, Texas, commenced in fiscal 1998, and to be completed in fiscal         
2000 at an estimated cost of approximately $15,200,000, adding approximately    
1,000,000 layer and 250,000 pullet capacity.                                    

The Company proposes to continue a growth strategy calling for the              
acquisition of other companies engaged in the production and sale of shell      
eggs.  Federal anti-trust laws require regulatory approval of acquisitions      
that exceed certain threshold levels of significance.  Also, the Company is     
subject to federal and state laws generally prohibiting anti-competitive        
conduct.  Because the shell egg production and distribution industry is so      
fragmented, the Company believes that its sales of shell eggs during it         
only approximately 10.5% of domestic egg sales notwithstanding that it is       
the largest producer and distributor of shell eggs in the United States         
based on independently prepared industry statistics.  Accordingly, the          
Company believes that regulatory approval of any future acquisitions            
generally will not be required and, if required, that such approvals will       
be obtained.                                                                    

The construction of new, more efficient production and processing facilities    
is an integral part of the Company's growth strategy.  Any such construction    
can be expected to require compliance with environmental laws and regulations   
, including the receipt of permits, that could cause schedule delays,           
although the Company has not experienced any significant delays in the past.    

Shell Eggs                                                                      

Production.  The Company's operations are fully integrated. At its              
facilities, it hatches chicks, grows pullets, manufactures feed and             
produces and distributes shell eggs.  Company-owned facilities accounted        
for approximately 66% of its total fiscal 1998 egg production, with the         
balance attributable to contract producers used by the Company.                 

Under Cal-Maine's arrangements with its contract producers, the Company owns    
the entire flock, furnishes all feed and supplies, owns the shell eggs          
produced, and assumes all market risks.  The contract producers own their       
facilities and are paid a fee based on production with incentives for           
performance.                                                                    

The commercial production of shell eggs requires a source of baby chicks for    
laying flock replacement.  The Company produces approximately 98% of its        
chicks in its own hatcheries and obtains the balance from commercial sources.   
Feed for the laying flocks is produced by Company-owned and operated mills      
located in Alabama, Arkansas, Georgia, Louisiana, Mississippi, Missouri, New    
Mexico, North Carolina, Ohio, Oklahoma, South Carolina, and Texas.  All         
ingredients necessary for feed production are readily available in the open     
market and most are purchased centrally from Jackson, Mississippi.              
Approximately 95% of the feed for Company flocks is manufactured at feed        
mills owned and operated by the Company.  Poultry feed is formulated using      
a computer model to determine the least-cost ratio to meet the nutritional      
needs of the flocks.  Although most feed ingredients are purchased on an        
as-needed basis, from time-to-time, when deemed advantageous, the Company       
purchases ingredients in advance with a delayed delivery of several weeks.      

Feed cost represents the largest element of the Company's farm egg production   
cost, ranging from 56% to 64% of total cost in the last five years, or an       
average of approximately 61%.  Although feed ingredients are available from     
a number of sources, Cal-Maine has little, if any, control over the prices      
of the ingredients it purchases, which are affected by weather and by           
various supply and demand factors.  Increases in feed costs not accompanied     
by increases in the selling price of eggs can have a material adverse           
effect on the results of the Company's operations.  However, higher feed        
costs may encourage producers to reduce production, possibly resulting in       
higher egg prices.  Alternatively, low feed costs can encourage industry        
overproduction, possibley resulting in lower egg prices.  Historically,         
the Company has tneded to have higher profit margins when feed costs are        
higher.  However, this may not be the case in the future.                       

After the eggs are produced, they are cleaned, graded and packaged.             
Substantially all of the Company-owned farms have modern "in-line"              
facilities that mechanically gather, clean, grade and package the eggs          
produced.  The increased use of in-line facilities has generated significant    
cost savings as compared to the cost of eggs produced from non-in-line          
facilities.  In addition to greater efficiency, the in-line facilities          
produce a higher percentage of grade A eggs, which sell at higher prices.       
Eggs produced on farms are brought to the Company's processing plants where     
they are cleaned, graded and packaged.  A small percentage of eggs are sold     
unprocessed to other processors.                                                

The Company's egg production activities are subject to risks, inherent in       
the agriculture industry, such as weather conditions and disease factors.       
These risks are not within the Company's control and could have a material      
adverse effect on its operations.  Also, the marketability of  the Company's    
shell eggs is subject to risks such as possible changes in food consumption     
opinions and practices reflecting perceived health concerns.                    

The Company operates in cyclical industry with total demand that is             
generally level and  a product which is price-inelastic.  Thus, small           
increases in production or decreases in demand can have a large adverse         
effect on prices and vice-versa.  However, economic conditions in the egg       
industry are expected to exhibit less cyclicality in the future.  The           
industry is concentrating into fewer but stronger hands, which should help      
lessen the extreme cyclicality of the past.  New practices, such as more        
efficient molting programs should help contribute to profitability.             

Marketing.  Of the approximately 424 million dozen shell eggs sold by the       
Company in the fiscal year ended May 31, 1998, 328 million were produced by     
company flocks. Of the total shell egg production, 94% was cleaned, graded      
and packed in the Company's processing facilities and sold by the Company,      
4% was used by the Company in its manufacture of egg products, and 2% was       
sold direct from the Company's farms to other shell egg users.                  

Sales of shell eggs primarily are made to national and regional supermarket     
chains that buy direct from the Company.  During fiscal 1998, no customer       
accounted for more than 10% of net sales, and the top 10 customers accounted    
for slightly more than 50% of net sales in the aggregate.  The majority of      
eggs sold are merchandised on a daily or short-term basis.  Most sales to       
established accounts are on open account with terms ranging from seven to       
30 days.  Although the Company has established  long-term relationships         
with many of its customers, they are free to acquire shell eggs from other      
sources.                                                                        

The Company sells its shell eggs at prices generally related to                 
independently quoted wholesale market prices. Wholesale prices are              
subject to wide fluctuations.  The prices of its shell eggs reflect             
fluctuations in the quoted market, and the results of the Company's             
shell egg operations are materially affected by changes in market               
quotations.  Egg prices reflect a number of economic conditions, such           
as the supply of eggs and the level of demand, which, in turn, are              
influenced by a number of factors that the Company cannot control.  No          
representation can be made as to the future level of prices.                    

Shell eggs are perishable.  Consequently, the Company maintains very            
low shell egg inventories, usually consisting of approximately four days        
of production.  Retail sales of shell eggs are greatest during the fall         
and winter months and lowest during the summer months.  Prices for shell        
eggs fluctuate in response to seasonal demand factors and a natural             
increase in egg production during the spring and early summer.  The             
Company generally experiences lower sales and net income in its fourth          
and first fiscal quarters ending in May and August, respectively.               

The annual per capita consumption of shell eggs since 1990 has ranged from      
234 to 239, averaging 236.  While the Company believes that increased fast      
foot restaurant food consumption, reduced egg cholesterol levels and            
industry advertising campaigns may result in a continuance of, or               
possible increase in, current per capita egg consumption levels, no             
assurance can be giveN that per capita consumption will not decline in the      
future.                                                                         

The Company sells the majority of its shell eggs in approxikmately 26 states,   
ranging across the southwest, southeast, mid-west and mid-Atlantic regions of   
the United States.  CAl-Maine is a major factor in egg marketing in a majority  
of these states.  Many states in Cal-Maine's market area are egg deficit        
regions; that is, production of fresh shell eggs is less than total             
consumption.  Competition from other producers in specific market areas is      
generally based on price, service and quality of product.  Strong               
competitiors of Cal-Maine exist in each of the Company's markets.               

Egg Products. On March 30,1998, the Company announced the discontinuance of     
its production of egg products, which ceased in May, prior to the end of the    
1998 fiscal year. All product inventories were covered by sales agreements.     
The products produced included liquid egg whites, liquid egg yolks, liquid      
whole eggs, liquid  salt yolk, liquid sugar yolk, and similar products sold     
in frozen form, and various forms of dried whole eggs, egg whites and yolks.    
Sales were made primarily to national accounts, including baked goods,          
mayonnaise and confections. Egg products accounted for approximately 4%         
of the Company's net sales in fiscal year 1998. The Company  discontinued       
its egg products operations because its plant, built 29 years ago and           
located in Jackson, Mississippi required extensive remodeling and               
refurbishing to operate competitively and meet current regulatory               
requirements. Management determined that the necessary expenditures were        
not warranted, and the production plant is being offered for sale.              

Specialty Eggs.  The Company also produces speciality eggs such as Eggland's    
Best and Farmhouse eggs.  Eggland's Bst eggs are patented eggs that are         
believed by its developers, based on scientific sutdies, to cause no            
increase in serum cholesterol when eaten as part of a low fat diet.  Cal-       
Maine produces and processes Eggland's Best eggs, under license from            
Eggland's Best, Inc. (EB), at its existing facilities, under EB guidelines.     
The product is marketed to the Company's established base of customers          
at prices that reflect a premium over ordinary shell eggs.  Eggland's           
Best eggs accounted for approximately 3 percent ofo the Company's net           
sales in fiscal 1998.  Farmhouse brand eggs are produced at the Company         
facilities by hens that are not caged, and are provided with a diet of          
natural grains and drinking water that is free of hormones or other             
chemical additives.  Although Farmhouse eggs account for only a small           
part of net sales they are intended to meet the demands of consumers            
whoo are sensitive to environmental and animal welfare issues.                  

Livestock.  The Company's livestock operations currently consist of             
the oepration of a 1,440 head dairy facility, from which milk sales             
are made to a major milk processor. Milk and cattle sales were                  
approximately 2 percent of the Company's net sales in fiscal year 1998.         

Competition.  The production, processing and distribution of shell eggs         
is an intensely competitive busienss which, traditionally, has attracted        
large numbers of producers.  Shell egg competition is generally based on        
price, service and quality of production.  Although the Company is the          
largest combined producer, processor or distributor of shell eggs in the        
United States, it does not occupy a controlling market position in any          
area where its eggs are sold.                                                   

The shell egg production and processing industry has been characterized         
by a growing concentration of production.  In 1997, 59 producers with           
one million or more layers owned 75.1 percent of the 253.3 million total        
U.S. layers, compared with the 56 producers with one million or more            
layers owning 63.6% of the 231.9 million total U.S. layers in 1990, and         
61 producers with one million or more layers owning 56.2% of the 248.0          
million total U.S. layers in 1985.  The Company believes that a                 
continuation of that concentration trend may result in the                      
reduced cyclicality of shell egg prices, but no assurance can be given in       
that regard.                                                                    

Patents and Tradenames.  The Company does not own any patents or proprietary    
technologies, but does market products under tradenames including Rio Grande,   
Farmhouse and Sunups.  Cal-Maine produces and processes Eggland's Best eggs,    
under license from EB, as indicated above.                                      

Government Regulation.  The Company is subject to federal and state             
regulations relating to grading, quality control, labeling, sanitary            
control, and waste disposal.  As a fully-integrated egg producer, the           
Company's shell egg facilities are subject to USDA and FDA regulation.          
The Company's shell egg facilities are subject to periodic USDA inspections,    
and its egg products plant is subject to continuous on-site USDA inspection.    
Cal-Maine maintains its own inspection program to assure compliance with the    
Customer specifications.                                                        

Cal-Maine is subject to federal and state environmental laws and                
regulations and has all necessary permits.                                      

Employees.  As of May 30, 1998, the Company had a total of approximately        
1,575 employees of whom 1,400 worked in egg production, processing and          
marketing, 90 were engaged in feed mill operations, 50 in dairy activities,     
and 35 were administrative employees, including officers, at the Company's      
executive offices.  About 15% of the Company's personnel is part-time.          
None of the Company's employees are covered by a collective bargaining          
agreement.  The Company considers its relations with employees to be good.      

ITEM 2.  PROPERTIES                                                             

The Company owns or leases farms, processing plants, hatcheries, feed mills,    
warehouses, offices and other property located in Alabama, Arkansas, Georgia,   
Kansas, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, North         
Carolina, Ohio, Oklahoma, South Carolina, and Texas, as follows:  two           
breeding facilities, two hatcheries, 14 feed mills, 13 production               
facilities, 10 pullet growing facilities, 18 processing and packing             
facilities, two wholesale distribution facilities, and a dairy farm.            
Most of the Company's property is owned and encumbered.  See Notes 6, 7         
and 8 of the Notes to Consolidated Financial Statements of the Company.         

The Company operates 245 over-the-road tractors and 314 trailers, of            
which 160 and 194 are owned, respectively, and the balance are  leased.         

At May 30, 1998, the Company owned approximately 10,899 acres of land and       
owned facilities to:                                                            

                                                                [Download Table]

                                                            
Operation                 Capacity                          
Hatch                     13,000,000- pullet chicks per year
Grow (1)                  6,559,000- pullets per year       
House (2)                 11,200,000- hens                  
Produce                   542- tons of feed per hour        
Process (3)               5,500- cases of eggs per hour     


(1)  The Company uses contract growers for the production of an additional      
2.8 million pullets.                                                            

(2)  The Company controls approximately 17.1 million layers, of which 5.9       
million are cared for by contract producers.                                    

(3)  One case equals 30 dozen eggs.                                             

Over the past five fiscal years, Cal-Maine's capital expenditures have          
totaled approximately $102 million, including the acquisition of the            
operations of other businesses.  The Company's facilities currently are         
maintained in good operable condition and are insured to an extent the          
Company deems adequate.                                                         

ITEM 3.  LEGAL PROCEEDINGS                                                      

The Company is not a party to any material legal proceedings.   

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                    

    No matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter ended           
May 30, 1998.                                                                   

PART II.            

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED                      
SHAREHOLDER MATTERS                                                             

   The Company's Common Stock commenced trading on the NASDAQ National
Market on December 11, 1996 under the symbol CALM.  Prior thereto, there        
had been no public market for the Common Stock.  The following table sets       
forth the high and low daily sale prices for the third quarter beginning        
December 11, 1996 , the fourth quarter of fiscal year 1997, and the four        
quarters of fiscal 1998.                                                        

                                                                [Download Table]

                                                            
Year Ended             Fiscal Quarter     High          Low 
----------             --------------     ----          --- 
May 31, 1997          Third Quarter    $  9 3/8     $  6 5/8
                      Fourth Quarter      8 1/2        5    

May 30, 1998          First Quarter      7 5/8         6 1/4
                      Second Quarter     7             5 7/8
                      Third Quarter      7             5 1/2
                      Fourth Quarter     6 5/8         4 3/4


      As of May 30, 1998, there were approximately 198 record holders of the
Company's Common Stock and approximately 1,427 beneficial owners whose          
shares were held by nominees or broker dealers.                                 

On September 24, 1996, the shareholders approved an amendment to the            
Company's certificate of incorporation to authorize capital stock               
consisting of 30,000,000 shares of Common Stock and 1,200,000 shares            
of Class A Common Stock, each class having a par value of $0.01 per             
share, and to reclassify and change each previously outstanding share           
of Class A Common Stock, $1.00 par value per share, and each previously         
outstanding share of Class B Common Stock, $1.00 par value per share,           
into 1,200 shares each of Common Stock and Class A Stock, respectively,         
each class with a par value of $0.01 per share.  The Company's Amended          
and Restated Certificate of Incorporation, which reflects such authorized       
capital stock, was effective as of October 3, 1996.  Unless otherwise           
indicated, all references to historical earnings per share, and number          
and class of shares outstanding, are as adjusted for the aforesaid              
recapitalization, reclassification and stock split of the Company's             
capital stock.                                                                  

There is no public trading market for the Class A Common Stock, 
the majority outstanding shares of which are owned by Fred A. Adams, Jr.,       
Chairman of the Board of Directors and Chief Executive Officer of the           
Company.                                                                        

       In January 1998, the Company's Board of Directors approved a program to
initiate the payment of quarterly cash dividends to shareholders. The cash      
dividend is $.01 per share on Common Stock, representing an annual cash         
dividend of $.04 per share. The cash dividend is $.0095 per share on Class      
A Common Stock, representing an annual cash dividend of $.038 per share.        
Under the terms of the Company's agreements with its principal lenders,         
Cal-Maine is subject to various financial covenants limiting its ability        
is required to maintain minimum levels of working capital and net worth,        
to limit capital expenditures, leasing transactions and additional long-        
term borrowings, and to maintain various current and cash-flow coverage         
ratios, among other restrictions.  For the foreseeable future, the Company      
expects to retain  the majority of  earnings for use in its business.           

ITEM 6.  SELECTED FINANCIAL DATA                                                

The income statement data presented below for each of the fiscal years,         
which end on the Saturday closest to May 31, have been derived from the         
Company's financial statements, which have been audited by Ernst & Young        
LLP, independent auditors.  The selected financial data should be read in       
conjunction with "Management's Discussion and Analysis of Financial             
Condition and Results of Operations" and with the consolidated financial        
statements of the Company and notes thereto included elsewhere in this          
report.                                                                         

                                                        [Enlarge/Download Table]
                                       Fiscal Years Ended                                                                             

                                                                                                                                      
                          May 30,   May 31,    June 1,  June 3,   May 28                                                              
                          1998      1997       1996     1995      1994                                                                
                       (Amounts in thousands, except per share data)                                                                  
Statement of                                                                                                                          
Operations Data:                                                                                                                      
Net sales                                                 $ 309,071      $292,526       $282,844 $242,649       $254,713              
Cost of sales                                      264,636        236,273          230,850  223,965   225,227                         
                        -------------------------------------------------                                                             
Gross profit                                              44,435    56,253          51,994   18,684    29,486                         
Selling, general                                                                                                                      
and administrative                   34,089    28,930     29,653   27,934    26,094                                                   
                        -------------------------------------------------                                                             
Operating income (loss     10,346          27,323     22,341   (9,250)    3,392                                                       
Other income (expense):                                                                                                               
   Interest expense                          (4,583)      (4,277)    (5,487)  (5,052)   (4,318)                                       
   Equity in income                                                                                                                   
   of affiliate                          294       524        721      24              283                                            
   Other                                                              2,268           783       (190)     993     1,238               
                        -------------------------------------------------                                                             
                                                                     (2,021)   (2,970)    (4,956)  (4,035)   (2,797)                  
                        -------------------------------------------------                                                             
Income (loss) before                                                                                                                  
income taxes                          8,325        24,353     17,385     (13,285)     595                                             
Income tax expense                                                                                                                    
(benefit)                                       2,946       9,508            6,460    (4,600)     371                                 
                        -------------------------------------------------                                                             
Net income (loss)                               $    5,379      $  14,845       $  10,925       $ (8,685)       $  224                
                        =================================================                                                             
Net income (loss)                                                                                                                     
per common share (1):                                                                                                                 
   Basic                                                         $     0.41     $   1.21         $    0.94      $  (0.74)       $ 0.02
                       ==================================================                                                             
   Dilutive                                            $     0.40       $   1.18        $    0.94       $  (0.74)       $ 0.02        
                       ==================================================                                                             
Cash dividends                                                                                                                        
declared per share                 $     0.02   $    .00        $     .00       $    .00        $  .00                                
                       ==================================================                                                             
Weighted average                                                                                                                      
shares outstanding (1):                                                                                                               
   Basic                                                             13,191        12,285           11,584        11,700   11,760     
                       ==================================================                                                             
   Dilutive                                                13,428    12,560         11,584   11,700   11,760                          
                       ==================================================                                                             
Balance Sheet Data:                                                                                                                   
Working capital                                 $  56,591       $ 45,390        $  26,742       $ 10,092        $ 29,588              
Total assets                                      203,188   188,294       149,991        147,402         144,859                      
Total debt (including                                                                                                                 
current portion)                    75,498         64,436           63,426        64,211   62,968                                     
Total stockholders'                                                                                                                   
equity                                      79,547    74,642        47,900        37,472   46,489                                     


(1)  Reflects the 1,200-for-1 stock split October 3, 1996 as if the split had   
occurred in the earliest period presented.                                    

ITEM 7.  MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL                     
CONDITION AND RESULTS OF OPERATIONS                           

OVERVIEW                                                                        

      The Company is primarily engaged in the production, cleaning, grading,
packing and sale of fresh shell eggs.  The Company's fiscal year end is         
the Saturday closest to May 31.                                                 

The Company's operations are fully integrated.  At its  facilities it           
hatches chicks, grows pullets, manufactures feed, and produces, processes,      
and distributes shell eggs.  The Company currently is the largest producer      
and distributor of fresh shell eggs in the United States. The shell egg         
segment accounted for over 94% of the Company's net sales.  The Company         
primarily markets its shell eggs in the southwestern, southeastern, mid-        
western and mid-Atlantic regions of the United States.  Shell eggs are          
sold directly to national and regional supermarket chains.  Egg products        
accounted for approximately 4% of the Company's net sales in fiscal 1998.       
Egg products operations were discontinued in May 1998.                          

The Company currently uses contract producers for approximately 34% of          
its total egg production.  Contract producers operate under agreements          
with the Company for the use of their facilities in the production of           
shell eggs by layers owned by the Company, which owns the eggs produced.        
Also, shell eggs are purchased, as needed, for resale by the Company from       
outside producers.                                                              

The Company's operating income or loss is significantly affected by             
wholesale shell egg market prices, which can fluctuate widely and are           
outside of the Company's control.  Retail sales of shell eggs are greatest      
during the fall and winter months and lowest during the summer months.          
Prices for shell eggs fluctuate in response to seasonal factors and a           
natural increase in egg production during the spring and early summer.          

The Company's cost of production is materially affected by feed costs,          
which average about 61% of Cal-Maine's total farm egg production cost.          
Changes in feed costs result in changes in the Company's cost of goods          
sold.  The cost of feed ingredients is affected by a number of supply           
and demand factors such as crop production and weather, and other factors,      
such as the level of grain exports, over which the Company has little or        
no control.                                                                     

RESULTS OF OPERATIONS                                                           

        The following table sets forth, for the periods indicated, certain items
from the Company's Consolidated Statements of Income expressed as a             
percentage of net sales.                                                        

               Percentage of Net Sales
                  Fiscal Years Ended

                                                                [Download Table]

                                                                      

                              May 30, 1998  May 31, 1997  June 1, 1996

Net sales                       100.0%       100.0%       100.0%      
Cost of sales                    85.6         80.8         81.6       
                                -----        -------      ------      
Gross profit                     14.4         19.2         18.4       
                                -----        -------      ------      
Selling, general &                                                    
administrative expenses          11.0          9.9         10.5       
                                -----        ------       ------      
Operating income                  3.4          9.3          7.9       
Other income (expense)           (0.7)        (1.0)        (1.8)      
                                -----        ------       -------     
Income before taxes               2.7          8.3          6.1       
Income tax expense                1.0          3.2          2.2       
                                -----        ------       -------     
Net income                        1.7%         5.1%         3.9%      
                                 =====       ======        ====       


Fiscal Year Ended May 30, 1998 Compared to Fiscal Year Ended May 31, 1997       

Net Sales.  Net sales in the fiscal year ended May 30, 1998 were $309.1         
million, an increase of $16.6 million, or 5.7%, over net sales of $292.5        
million in the fiscal year ended May 31, 1997.  Although average shell egg      
market prices declined, the increase in sales was due to increased dozens       
sold and an increase in feed sales, which are part of the shell egg segment,    
to outside egg producers. Cal-Maine's net average selling price of shell        
eggs during fiscal 1998 was $.675 per dozen, as compared to $.722 per dozen     
for fiscal 1997, a decrease of 6.5 percent.  Due to increased egg supplies      
and lower egg experts, average shell egg market prices declined approximately   
9 percent.  During fiscal 1998, the number of dozens sold increased             
approximately 6 percent, primarily due to recetn acquisitions of production     
and processing facilities.  The Company produced 327.7 million dozens of eggs   
in fiscal 1998, compared to 309.8 million dozens in fiscal 1997.  The           
Company purchased 101.8 million dozens from outside sources during fiscal       
1998, compared to 73.4 million dozensn of eggs in fiscal 1997.  Approximately   
one-third of the increase in outside purchases resulted from a recent           
acquisition in Georgia.  This operation also contributed to the increase        
in outside feed sales.  Outside feed sales increased from $2.8 million          
during fiscal 1997 to $15.7 million in the current fiscal year.  In April       
1997, mid-fourth quarter of fiscal 1997, the Company purchased the egg          
production and processing facilities of Southern Empire Egg Farm, Inc.          
In November 1997, late second quarter of the current fiscal year, the           
Company purchased the inventories and shell egg production and processing       
equipmetnn of J&S Farms, Inc., and Savannah Valley Company Inc.  These          
acquisitions accounted for approximately 14 percent of net sales for            
fiscal 1998, and 10 percent of dozens of eggs sold.                             

Cost of Sales.  The cost of sales in fiscal 1998 was $264.6 million, an         
increase of $28.3 million, or 12%, above the fiscal 1997 cost of sales of       
$236.3 million.   Although feed ingredient cost decreased, costs associated     
with the increased amount of dozens and feed tonnage sold resulted in a         
higher cost of sales. Feed cost per dozen eggs produced during fiscal 1998      
was $.248, compared to $.284 per dozen in fiscal 1997, a decrease of 12.7%.     
As mentioned above in the sales discussion, the number of outside dozens of     
eggs purchased for fiscal 1998.  Though purchased at lower per dozen prices,    
due to lower shell egg market prices, the increased quantities purchased        
resulted in an increase in cost of sales. With  increasing units sold and       
decreasing sales price per unit, the gross profit decreased from 19.2% of       
net sales for fiscal 1997 to 14.4% for fiscal 1998.                             

Selling, General and Administrative Expenses.  Selling, general and             
administrative expenses in fiscal 1998 were $34.1 million, an  increase         
of $5.2 million, or 17.8%, as compared to the $28.9 million for fiscal          
1997. The increase is generally due to acquisitions and increased sales         
volume. Approximately one-half of the cost increase is due to delivery          
expenses for the increased dozens sold. On a delivery cost per  dozen           
comparison, overall operating costs have increased 6.5% for the current         
fiscal year. The balance of the cost increase is due to specialty egg           
brands promotions, bad debt allowances and an overall 4 percetn increase        
in general administrative expenses.  For the current fiscal year, the           
Company incurred approximately $1.7 million in franchise and advertising        
expenses in opening new markets for specialty brand eggs, primarily the         
Egg Land's BEst franchise in New York  City.  Sale of the specialty brands      
of eggs for the current fiscal year were almost 3.4 percent of net sales,       
as compared to less than 1 percent for last year.  As a percent of net          
sales, general and administrative expenses have increased from 9.9              
percent for fiscal 1997 to 11.0 percent for the current fiscal year.            

Operating Income.  As a result of the above, the Company's operating income     
was $10.3 million in fiscal 1998, a  decrease of $17.0 million, or 62.1%,       
as compared to an operating income of $27.3 million for fiscal 1997.  As a      
percent of net sales, operating income for fiscal 1998 was 3.4%, as compared    
to 9.3% for fiscal 1997.                                                        

Other Income (Expense).  Other expense for fiscal 1998 was $2.0 million, a      
decrease of $1.0 million, or 32.0%, as compared to other expense of $3.0        
million for fiscal 1997. The decrease in net expense is primarily due to        
an increase in interest income of $774,000, net insurance claim income of       
$662,000 and an increase in  interest expense of $306,000. As a percent         
of net sales, other expenses were 0.7% for fiscal 1998 compared to 1.0% for     
fiscal 1997.                                                                    

Income Taxes.  As a result of the above, the Company's pre-tax income was       
$8.3 million in fiscal 1998, compared to pre-tax income of $24.4 million        
for fiscal 1997.  For fiscal 1998, an income tax expense of $2.9 million        
was recorded with an effective rate of 35.4% as compared to an income tax       
expense of $9.5 million with an effective rate of 39.0% for fiscal 1997.        
The decrease in the effective rate is due primarily to an increase in tax       
exempt interest income as a percentage of income before income taxes.           

Net Income.  As a result of the above, net income for fiscal 1998 was $5.4      
million, or $0.41 per basic share, compared to net income of $14.8 million,     
or $1.21 per  basic share, for fiscal 1997.                                     

Fiscal Year Ended May 31, 1997 Compared to Fiscal Year Ended June 1, 1996       

Net Sales.  Net sales in the fiscal year ended May 31, 1997 were $292.5         
million, an increase of $9.7 million, or 3.4%, over net sales of $282.8         
million in the fiscal year ended June 1, 1996.  The increase was due to         
higher shell  egg market prices.  With improved average shell egg market        
prices, Cal-Maine's net average selling price during fiscal 1997 was $.722      
per dozen shell eggs, as compared to $.684 per dozen shell eggs for fiscal      
1996, an increase of 5.6%.  During fiscal 1997, the number of dozens sold       
decreased due to reduced customer demand.  The Company produced 309.8           
million dozens of eggs in fiscal 1997, compared with 308.8 million dozens       
in fiscal 1996.  The Company purchased approximately 73.4 million dozens        
of eggs from outside soruces during fiscal 1997, compared to 80.2 million       
dozens of eggs in fiscal 1996.  During fiscal 1997, the Company completed       
two acquisitions.  In the second quarter of fiscal 1997, the shell egg          
production facilities of Sunbest Farms were purchased.  Aproximately            
2 percent of fiscal 1997 dozens of eggs sold were attributed to this            
facility.  As a production facility only, the eggs produced were                
transferred to other company locations for processing and marketing. In         
April 1997, mid-fourth quarter, the shell egg production and processing         
facilities of Southern Empire Egg Farm, Inc. were acquired.  Due to the         
laste fiscal purchase date, these facilities accounted for approximately        
1 percent of the dozens of eggs sold and net sales for fiscal 1997.             

Cost of Sales.  The cost of sales in fiscal 1997 was $236.3 million,            
an increase of $5.4 million, or 2.3%, above the fiscal 1996 cost of             
sales of $230.9 million.  The increase was due to an increase in feed           
ingredient cost.  The increase in ingredient cost began in fiscal 1996          
and continued through the second quarter of fiscal 1997.  Feed cost per         
dozen eggs produced during fiscal 1997 was $.284, compared to $.266 per         
dozen in fiscal 1996, an increase of 6.8%.  As mentioned above in the           
sales discussion, the number of outside eggs purchased decreased for            
fiscal 1997.  The potential dollar decrase for fewer dozens purchased           
was offset by the higher per dozen price paid, due to the improved shell        
egg market prices.  With increases in sale exceeding increases in cost          
of sales, the gorss profit increased from 18.4 percent of net sales             
for fiscal 1996 to 19.2 percent for fiscal 1997.                                

Selling, General and Administrative Expenses.  Selling, general and             
administrative expenses in fiscal 1997 were $28.9 million, a decrease           
of $700,000, or 2.4%, as compared to the $29.6 million for fiscal 1996.         
For fiscal 1997, a decrease in health insurance expenses was the major          
reason for the lower dollar costs.  As a percent of net sales, selling,         
general and administrative expenses  decreased from 10.5% for fiscal            
1996 to 9.9% for  fiscal  1997.                                                 

Operating Income.  As a result of the above, the Company's operating            
income was $27.3 million in fiscal 1997, an increase of $5.0 million,           
or 22.3%, as compared to an operating income of $22.3 million for fiscal        
1996.  As a percent of net sales, operating income for fiscal 1997              
increased to 9.3%, as compared to 7.9% for fiscal 1996.                         

Other Income (Expense).  Other expense for fiscal 1997 was $3.0 million,        
a decrease of $2.0 million, or 40.0%, as compared to other expense of           
$5.0 million for fiscal 1996.  Interest expense for fiscal 1997 was             
$4.3 million, a decrease of $1.2 million, or 22.1%, as compared to an           
interest expense of $5.5 million for fiscal 1996.  Higher interest expense      
for fiscal 1996 was due to borrowings under lines of credit from banks that     
were repaid by fiscal 1996 year end. Interest income was $597,000 for fiscal    
1997, compared to $141,000 for fiscal 1996.  As a percent of net sales,         
other expenses were 1.0% for fiscal 1997, compared to 1.8% for fiscal 1996.     

Income Taxes.  As a result of the above, the Company's pre-tax income was       
$24.4 million in fiscal 1997, compared to pre-tax income of $17.4 million       
for fiscal 1996.  For fiscal 1997, an income tax expense of $9.5 million        
was recorded with an effective rate of 39.0% as compared to an income tax       
expense of $6.5 million with an effective rate of 37.2% for fiscal 1996.        
The increase in the effective rate is due primarily to the increase to the      
maximum statutory federal rate of 35% from 34% because the Company's            
taxable income exceeded the amount for which the maximum rate is required.      
The Company also increased the deferred tax liability for the increased         
federal statutory rate.                                                         

Net Income.  As a result of the above, net income for fiscal 1997 was $14.8     
million, or $1.21 per basic share, compared to net income of $10.9 million,     
or $.94 per basic share, for fiscal 1996.                                       

Capital Resources and Liquidity.  The Company's working capital at May 30,      
1998 was $56.6 million compared to $45.4 million at May 31, 1997.  The          
Company's current ratio was 2.39 at May 30, 1998 as compared with 2.26 at       
May 31, 1997.  The Company's need for working capital generally is highest      
in the last and  first quarters ending in May and August, respectively,         
when egg prices are normally at seasonal lows.  Seasonal borrowing needs        
frequently are higher during these periods than during other fiscal periods.    
The Company had an unused $35.0 million line of credit with three banks at      
May 30, 1998.  The Company's long-term debt at that date, including current     
maturities and capitalized lease obligations, amounted to $75.5 million, as     
compared to $64.4 million at May 31, 1997.                                      

In December 1997, the Company and three of its lenders agreed to revised        
terms, amounts and interest rates for long-term debt extended to the            
Company.  The revised arrangements provide for a total of $40.0 million         
of borrowings under notes, with maturities ranging from 10 to 15 years          
at a weighted average fixed interest rate of 7.10 percent.  Approximately       
$20 million of existing debt was refinanced and the Company was provided        
with an additional $20 million of working capital, of which $3.5 million        
had not been disbursed as of year end 1998.                                     

Substantially all trade receivables and inventories collateralize the           
Company's line of credit, and property, plant and equipment collateralize       
the Company's long-term debt.  The Company is required by certain               
provisions of these loan agreements to (1) maintain minimum levels of           
working capital and net worth; (2) limit dividends, capital expenditures,       
lease obligations and additional long-term borrowings; and (3) maintain         
various current and cash-flow coverage ratios, among other restrictions.        
The Company was in compliance with these provisions at May 30, 1998.            

For the fiscal year ended May 30, 1998, $24.9 million of net cash was           
provided by oeprating activities, of which $14.8 million was used for           
construction and pruchases of property, pland and equipment and $3.7            
million was used for the purchase of assets of a shell egg production           
and processing businesses.  The Company has expended $18.0 million in           
the construction of new shell egg production, processing and feed mill          
facilities in Chase, Kansas.  The Company is financing approximately            
$13.5 million of the estimated $21.5 million total project cost through         
industrial revenue bonds maturing in 2011.  Borrowings under the                
industrial revenue bond agreement totaled $10.0 million at May 30, 1998.        
In fiscal 1998, the Company expended $952,000 in construction of new            
shell egg production and processing facilities in Waelder, Texas.  The          
estimated cost of construction is approximately $15.2 million with              
financing plans of approximately $10.4 million in borrowings from an            
insurance company.  In fiscal 1998, $24.7 million was used to repay             
long-term debt.                                                                 

The net result of these activities was an increase in cash and cash             
equivalents of $17.4 million for fiscal 1998.                                   

The Company has $3.2 million  of deferred tax liability due to a                
subsidiary's change from a cash basis to an accrual basis taxpayer on           
May 29, 1988.  The Taxpayer Relief Act of 1997 provides that the taxes on       
the cash basis temporary differences as of that date are generally payable      
over the next 20 years beginning in fiscal 1999 or in the first fiscal year     
in which there is a change in ownership control.  Payment of the $3.2           
million deferred tax liability would reduce the Company's cash, but             
would not impact the Company's statement of operations or reduce                
stockholders' equity, as these taxes have been accrued and are reflected        
on the Company's balance sheet.  See Note 11 of Notes to Consolidated           
Financial Statements.                                                           

Year 2000 Issue.  The Company currently has a program underway to ensure        
that all significant computer systems are Year 2000 compliant.  All major       
systems are upgradeable with commercially available software packages.  The     
Company expects no material impact from the Year 2000 issue on its internal     
information systems or on its ability to continue normal business operations    
with suppliers or other third parties who fail to address the issue.  The       
Company will continue to monitor and evaluate the impact of the Year 2000       
on its operations.  Any costs associated with implementation of the             
Company's Year 2000 program would be within normal expenditures for             
hardware and software.                                                          

Forward Looking Statements.  The foregoing statements contain forward           
looking statements which involve risks and uncertainties and the                
Company's actual experience may differ materially from that discussed           
above.  Factors that may cause such a diference include, but are not            
limited to, those discussed in "Factors Affecting Future Performance",          
below, as well as future events that have the effect                            
of reducing the Company's available cash balances, such as unanticipated        
operating losses or capital expenditures related to possible future             
acquisitions.  Readers are cautioned not to place undue reliance on             
forward-looking statements, which reflect management's analysis only as         
the date hereof.  The Company assumes no obligation to update forward-          
looking statements.  See also the Company's reports to be filed from time       
to time with the Securities and Exchange Commission pursuant to the             
Securities Exchange Act of 1934.                                                

Factors Affecting Future Performance.  The Company's future operating           
results may be affected by various trends and factors which are beyond the      
Company's control.  These include adverse changes in shell egg prices and       
in the grain markets.  Accordingly, past trends should not be used to           
anticipate future results and trends.  Further, the Company's prior             
performance should not be presumed to be an accurate indication of future       
performance.                                                                    

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS           

Not applicable.                                                 

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                            

      The financial statements, schedules and supplementary data required by
this item are listed in Item 14(a) of this report and included at pages         
F-1 through F-15.                                                               

Quarterly Financial Data:                                                       
(unaudited, amounts in thousands, except per share data )                       

                                                        [Enlarge/Download Table]

                                                                            Fiscal Year 1998

                                                                                            
                       First       Second         Third          Fourth                     
                      Quarter      Quarter       Quarter         Quarter                    
                      ---------------------------------------------------                   
Net sales             $ 63,723    $ 79,435      $ 89,344        $ 76,569                    
Operating income                                                                            
(loss)                  (1,991)      7,314         5,419            (396)                   
Net income (loss)       (1,737)      4,244         3,703            (831)                   
Net income per share                                                                        
     Basic            $  (.13)    $    .32   $       .28      $     (.06)                   
     Dilutive         $  (.13)    $    .32   $       .28      $     (.06)                   

                                                                            Fiscal Year 1997

                      First         Second        Third           Fourth                    
                      Quarter       Quarter       Quarter         Quarter                   
                      ----------------------------------------------------                  
Net sales             $ 65,563    $ 78,629      $ 79,649         $ 68,685                   
Operating income         2,711      10,744        11,631            2,237                   
Net income               1,097       5,931         6,937              880                   
Net income per share                                                                        
     Basic            $    .10    $    .52      $    .54         $    .07                   
     Dilutive         $    .09    $    .50      $    .53         $    .07                   


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND        
FINANCIAL DISCLOSURE                                                            

None.                                                           

PART III                                                                        

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                    

     The information called for by this item with respect to directors and
executive officers is incorporated by reference to the Company's definitive     
proxy statement which is to be filed pursuant to Regulation 14A under the       
Securities Exchange Act of 1934 in connection with the Company's 1998           
Annual Meeting of Shareholders.                                                 

ITEM 11.  EXECUTIVE COMPENSATION                                                

       The information called for by this item is incorporated by reference to
the Company's definitive proxy statement which is to be filed pursuant to       
Regulation 14A under the Securities Exchange Act of 1934 in connection with     
the Company's 1998 Annual Meeting of Shareholders.                              

ITEM 12.        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT  

       The information called for by this item is incorporated by reference to
the Company's definitive proxy statement which is to be filed pursuant to       
Regulation 14A under the Securities Exchange Act of 1934 in connection with     
the Company's 1998 Annual Meeting of Shareholders.                              

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                        

       The information called for by this item is incorporated by reference to
the Company's definitive proxy statement which is to be filed pursuant to       
Regulation 14A under the Securities Exchange Act of 1934 in connection the      
Company's 1998 Annual Meeting of Shareholders.                                  

PART IV                                                                         

ITEM 14.       EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

(a)     Documents Filed as Part of this Report                                  

(1)     Financial Statements-filed at pages F-1 through F-15 of this Report.    

Report of  Independent Auditors                                                 
Consolidated Balance Sheets as of May 30, 1998 and May 31, 1997                 
Consolidated Statements of Income for the Years Ended May 30, 1998,             
May 31, 1997 and June 1, 1996                                                   
Consolidated Statements of Stockholders' Equity for the Years Ended             
May 30, 1998, May 31, 1997 and June 1, 1996                                     
Consolidated Statements of Cash Flows for the Years Ended May 30, 1998,         
May 31, 1997 and June 1, 1996                                                   
Notes to Consolidated Financial Statements                                      

(2)     Financial Statement Schedules - filed at page S-1 of this Report.       

Schedule II - Valuation and Qualifying Accounts                                 

Financial statement schedules not included have been omitted because they       
are either not applicable or the required information is shown in the           
consolidated financial statements or notes thereto.                             

(3)     Exhibits                                                                

The following exhibits are filed herewith or incorporated by reference:         

                                                                [Download Table]
                                                                              
Exhibit                                                                       
Number                          Exhibit                                       

3.1     Amended and Restated Certificate of Incorporation of the Registrant.* 

3.2     By-Laws of the Registrant, as amended.*                               

4.1     See Exhibits 3.1 and 3.2 as to be the rights of holders of the        
    Registrant's common stock.                                                

4.2     Form of Warrant Agreement (including form of Common Stock Purchase    
    Warrant).*                                                                

10.1    Amended and Restated Term Loan Agreement, dated as of May 29, 1990,   
    between Cal-Maine Foods, Inc. and Cooperative Centrale Raiffeisen -       
    Boerenleenbank B.A., "Rabobank Nederland," New York Branch, and Amended   
    and Restated Revolving Credit Agreement among Cal-Maine Foods, Inc., and  
    Barclays Banks PLD (New York) and Cooperatieve Centrale Raiffeisen-       
    Borenleenbank B.A., dated as of 29 May 1990, and amendments thereto       
    (without exhibits).*                                                      

10.1(a)Amendment to Term Loan Agreement (see Exhibit 10.1) dated as of        
   June 3, 1997 (without exhibits). **                                        

10.2    Note Purchase Agreement, dated as of November 10, 1993, between       
   John Hancock Mutual Life Insurance Company and Cal-Maine Foods, Inc.,      
   and amendments thereto (without exhibits).*                                

10.3    Loan Agreement, dated as of May 1, 1991, between Metropolitan Life    
   Insurance Corporation and Cal-Maine Foods, Inc., and amendments thereto    
   (without exhibits).*                                                       

10.4    Employee Stock Ownership Plan, as Amended and Restated.*              

10.5    1993 Stock Option Plan, as Amended.*                                  

10.6    Wage Continuation Plan, dated as of January1, 1986, among R.K. Looper,
   B.J. Raines and the Registrant.*                                           

10.6(a) Amendment dated  October 29, 1997 to Wage Continuation Plan, dated    
   as of January 1, 1986, between B.J. Raines and the Registrant. +           

10.7    Wage Continuation Plan, dated as of July 1, 1986, between Jack Self   
   and the Registrant, as amended on September 2, 1994.*                      

10.8    Wage Continuation Plan, dated as of April 15, 1988, between Joe Wyatt 
   and the Registrant.*                                                       

10.9    Redemption Agreement, dated March 7, 1994, between the Registrant and 
   Fred R. Adams, Jr.*                                                        

10.10     Note Purchase Agreement, dated December 18, 1997, among Cal-Maine   
   Foods, Inc., Cal-Maine Farms, Inc.,  Cal-Maine Egg Products, Inc., Cal-    
   Maine Partnership, LTD, CMF of Kansas LLC and First South Production       
   Credit       Association and Metropolitan Life Insurance Company (without  
   exhibits, except names of guarantors and forms of    notes) ***            

21      Subsidiaries of the Registrant.*                                      

23      Consent of Ernst & Young LLP.                                         

27      Financial Data Schedule.                                              


*  Incorporated by reference to the same exhibit number in Registrant's         
Form S-1 Registration Statement No. 333-14809.                            

** Incorporated by reference to the same exhibit number in Registrant's         
Form 10-K for fiscal year ended May 31,1997.                              

*** Incorporated by reference to the same exhibit number in  Registrant's       
Form  10-Q for  the quarter ended November 29, 1997.                      

(Management contract or compensatory plan.                                      

The Company agrees to file with the Securities and Exchange Commission,         
upon request, copies of any instrument defining the rights of the holders       
of its consolidated long-term debt.                                             

(b)     Reports on Form 8-K                                                     

No Current Report on Form 8-K was filed by the Company covering an event        
during the fourth quarter of fiscal 1998.  No amendments to previously          
filed Forms 8-K were filed during the fourth quarter of 1998.                   

(c)     Exhibits Required by Item 601 of Regulation S-K                         

The exhibits listed in Item 14(a)(3) of this report, and not incorporated       
by reference to a separate file, follow page S-1.                               

(d)     Financial Statement Schedules Required by Regulation S-X

The financial statement schedule required by Regulation S-X is filed at         
page S-1.                                                                       

SIGNATURES                                                                      

Pursuant to the requirements of Section 13 or 15(d) of the Securities           
Exchange Act of 1934, the registrant has duly caused this report to be          
signed on its behalf by the undersigned, thereunto duly authorized, in          
Jackson, Mississippi, on this 24th day of August, 1998.                         

                                                                [Download Table]
                                                                  
                                             CAL-MAINE FOODS, INC.
             /s/  Fred R. Adams, Jr.                              
                             Fred R. Adams, Jr.                   
             Chairman of the Board and                            
Chief Executive Officer                                           

    Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of         
the registrant and in the capacities and on the dates indicated:                

                                                        [Enlarge/Download Table]

                                                                                                   
Signature                                           Title                                      Date

/s/  Fred R. Adams, Jr.  Chairman of the Board          August 24, 1998                            
Fred R. Adams, Jr.                   Chief Executive Officer                                       
                                                            (Principal Executive Officer)          

/s/  Richard K. Looper   Vice Chairman of the Board                 August 24, 1998                
Richard K. Looper                     and Director                                                 

/s/  Adolphus B. Baker      President and Director                          August 24, 1998        
Adolphus B. Baker                                                                                  

/s/  Bobby J. Raines        Vice President, Chief Financial August 24, 1998                        
Bobby J. Raines                     Officer, Treasurer, Secretary                                  
                                                            and Director                           
                                                            (Principal Financial Officer)          

/s/  Charles F. Collins  Vice President, Controller                 August 24, 1998                
Charles F. Collins                  and Director                                                   
                                                            (Principal Accounting Officer)         

/s/  Jack B. Self           Vice President and Director             August 24, 1998                
Jack B. Self                                                                                       

/s/  Joe M. Wyatt        Vice President and Director                August 24, 1998                
Joe M. Wyatt                                                                                       

/s/  W. D. Cox              Director                                                August 24, 1998
W.  D. Cox                                                                                         

/s/  R. Faser Triplett      Director                                                August 24, 1998
R.  Faser Triplett                                                                                 

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS                                      

Report of  Independent Auditors................................... F-2          

Consolidated Balance Sheets as of  May 30, 1998 and                             
May 31, 1997 ..................................................... F-3          

Consolidated Statements of  Income for the years ended                          
May 30, 1998, May 31, 1997 and  June 1, 1996.....................  F-4          

Consolidated Statements of Stockholders' Equity for                             
the years ended May 30, 1998, May 31, 1997 and June 1, 1996......  F-5          

Consolidated Statements of Cash Flows for the years                             
ended May 30, 1998, May 31, 1997 and June 1, 1996...............   F-6          
Notes to Consolidated Financial Statements .....................   F-7          

F-1         

Report of Independent Auditors                                                  

The Board of Directors and Stockholders                                         
Cal-Maine Foods, Inc.                                                           

We have audited the accompanying consolidated balance sheets of Cal-Maine       
Foods, Inc. and subsidiaries as of May 30, 1998 and May 31, 1997, and the       
related consolidated statements of income, stockholders' equity and cash        
flows for each of the three years in the period ended May 30, 1998. Our         
audits also included the financial statement schedule listed in the index       
at Item 14(a). These financial statements and schedule are the                  
responsibility of the Company's management.  Our responsibility is to           
express an opinion on these financial statements and schedule based on          
our audits.                                                                     

We conducted our audits in accordance with generally accepted auditing          
standards.  Those standards require that we plan and perform the audit          
to obtain reasonable assurance about whether the financial statements           
are free of material misstatement.  An audit includes examining, on a           
test basis, evidence supporting the amounts and disclosures in the              
financial statements.  An audit also includes assessing the accounting          
principles used and significant estimates made by management, as well           
as evaluating the overall financial statement presentation.  We believe         
that our audits provide a reasonable basis for our opinion.                     

In our opinion, the consolidated financial statements referred to above         
present fairly, in all material respects, the consolidated financial            
position of Cal-Maine Foods, Inc. and subsidiaries at May 30, 1998 and          
May 31, 1997, and the consolidated results of their operations and their        
cash flows for each of the three years in the period ended May 30, 1998,        
in conformity with generally accepted accounting principles. Also, in our       
opinion, the related financial statement schedule, when considered in           
relation to the basic financial statments taken as a whole, presents            
fairly in all material respects the information set forth therein.              

          /s/   Ernst & Young  LLP

Jackson, Mississippi                                                            
July 10, 1998                                                                   

F-2       

Cal-Maine Foods, Inc. and Subsidiaries          
Consolidated Balance Sheets         
(in thousands, except share and per share amounts)      

                                                                [Download Table]

                                                                      
                                          May 30        May 31        
                                           1998          1997         

Assets                                                                
Current assets:                                                       
        Cash and cash equivalents             $  41,126      $  23,737
        Receivables:                                                  
        Trade receivables, less allowance                             
  for doubtful  accounts of $361 in                                   
  1998 and $62 in 1997 (Note 8)           13,223         12,779       
        Other                                       468            307
                                       --------------------------     
                                          13,691         13,086       
        Recoverable federal and state                                 
  income taxes                               218          1,137       
        Inventories (Notes 5 and 8)              41,437         42,594
        Prepaid expenses and other                                    
  current assets                             791            986       
                                       --------------------------     
Total current assets                      97,263         81,540       
Other assets:                                                         

        Notes receivable and investments          5,373          4,747
        Other                                     1,183            661
                                       --------------------------     
                                           6,556          5,408       
Property, plant and equipment,                                        
less accumulated        depreciation                                  
(Notes 6 and 8)                           98,856         94,454       
Leased property under capital                                         
 leases, less accumulated                                             
        amortization (Note 7)                       513            892
                                       --------------------------     
Total assets                            $203,188       $182,294       
                                       ==========================     

Liabilities and stockholders' equity                                  
Current liabilities:                                                  

        Trade accounts payable                 $ 17,705       $ 15,267
        Accrued wages and benefits                4,350          4,314
        Accrued expenses and other liabilities    3,701          2,114
        Current maturities of:                                        
        Long-term debt                            4,432          4,302
        Capitalized lease obligations               108            238
                                        -------------------------     
                                           4,540          4,540       
    Deferred income taxes (Note 11)       10,376          9,915       
                                        -------------------------     
Total current liabilities                 40,672         36,150       
Long-term debt, less current                                          
 maturities (Note 8)                      70,658         59,177       
Capitalized lease obligations,                                        
 less current maturities (Note 7)            300            719       
Deferred expenses (Note 9)                 1,716          1,655       
   Deferred income taxes (Note 11)        10,295          9,951       
                                        -------------------------     
Total liabilities                        123,641        107,652       
Commitments and contingencies                                         
(Notes 8 and 12)                                                      
Stockholders' equity (Note 2):                                        
Common stock, $.01 par value                                          
(Notes 9 and 10):                                                     
Authorized shares - 30,000,000                                        
Issued and outstanding                                                
shares - 17,565,200                          176            176       
 Class A common stock, $.01 par value :                               
   Authorized shares - 1,200,000                                      
   Issued and outstanding                                             
       shares -1,200,000                      12             12       
    Paid-in capital                       18,784         18,785       
    Retained earnings                     67,031         61,903       
        Common stock in treasury (5,608,212                           
  shares in 1998 and 5,583,200 shares                                 
  in 1997)                                (6,456)        (6,234)      
                                          -----------------------     
Total stockholders' equity                79,547         74,642       
                                          -----------------------     
Total liabilities and stockholders'                                   
equity                                  $203,188       $182,294       
                                        =========================     

See accompanying notes                                                          

F-3           

Cal-Maine Foods, Inc. and Subsidiaries        
Consolidated Statements of Income         
(in thousands, except per share amounts)          

                                                        [Enlarge/Download Table]
                                                                                                                 
                                                                                        Fiscal year ended        
                                                                          May 30          May 31           June 1
                                                            1998                    1997                    1996 
                                   -------------------------                                                     

Net Sales                                                       $ 309,071       $ 292,526       $ 282,844        
Cost of Sales                                                   264,636   236,273   230,850                      
Gross Profit                                                      44,435    56,253    51,994                     
Selling, general and              ---------------------------                                                    
administrative                                      34,089    28,930    29,653                                   
                                  ---------------------------                                                    
Operating income                                           10,346    27,323    22,341                            

Other income (expense):                                                                                          
   Interest expense (Note 8)                       (4,583)          (4,277)  (5,487)                             
   Interest income                                          1,371         597      141                           
   Equity in income of affiliates                                                                                
   (Note 4)                                     294             524      721                                     
   Other, net                                                   897             186     (331)                    
                                   --------------------------                                                    
                                                                            (2,021)         (2,970)  (4,956)     
Income before income taxes                           8,325           24,353   17,385                             
Income tax expense (Note 11)                        2,946       9,508    6,460                                   
                                   --------------------------                                                    
Net income                                              $   5,379       $  14,845       $ 10,925                 
                                   ==========================                                                    
Net income per share:                                                                                            
    Basic                                                         $     .41     $    1.21       $   .94          
                                   ==========================                                                    
    Dilutive                                            $     .40       $    1.18       $   .94                  
                                   ==========================                                                    
Weighted average shares                                                                                          
outstanding:                                                                                                     
   Basic                                                           13,191           12,285   11,584              
   Dilutive                                                13,428           12,560   11,584                      
                                  ===========================                                                    

See accompanying notes.                                                         

F-4         

Cal-Maine Foods, Inc. and Subsidiaries    
Consolidated Statements of Stockholders' Equity     
(in thousands, except per share amounts)          

                                                                [Download Table]
                                   Common Stock                               
Note                               ------------                               
                                                                              
                         Class Class Treas. Treas. Pd-in Ret.   Rec.          
              Shares Amt  A     A     Shrs   Amt    Cap  Ern.   Stkh    Total 
                 ------------------------------------------------------------ 
Balance at                                                                    
June 3, 1995 17,035 $170  -  $  -   5,380 $(5,367)$8,230$36,133$(1,694)$37,472
Redemption                                                                    
of fract-                                                                     
ional shares                                                                  
of common                                                                     
stock          -     -    -     -      -       -     (1)     -      -      (1)
Purchases of                                                                  
common stock                                                                  
for treasury   -     -    -     -     142    (496)     -     -      -    (496)
Net income                                                                    
for fiscal                                                                    
1996           -     -    -     -       -       -      - 10,925     -   10,925
            ------------------------------------------------------------------
Balance at                                                                    
June 1,                                                                       
1996       17,035   170   -     -   5,522   (5,863) 8,229 47,058 (1,694)47,900
Exchange                                                                      
of common                                                                     
stock for                                                                     
Class A                                                                       
common                                                                        
stock     (1,200)  (12) 1,200  12     -        -      -      -       -      - 
Issuance                                                                      
of common                                                                     
stock      1,730    18     -    -     -        -   10,562    -       -  10,580
Redemption                                                                    
of                                                                            
fractional                                                                    
shares of                                                                     
common                                                                        
stock         -      -     -    -     -        -      (6)    -       -     (6)
Purchase                                                                      
of common                                                                     
stock for                                                                     
treasury      -      -     -    -     61     (371)     -     -       -   (371)
Repayment                                                                     
of note                                                                       
receivable-                                                                   
stockholder   -      -     -    -      -       -       -     -    1,694  1,694
Net income                                                                    
for fiscal                                                                    
1997          -      -     -    -      -       -       -  14,845     -  14,845
             -----------------------------------------------------------------
Balance at                                                                    
May 31,                                                                       
1997       17,565  176  1,200  12   5,583 (6,234)  18,785 61,903     -  74,642
Redemption                                                                    
of                                                                            
fractional                                                                    
shares  of                                                                    
common stock  -     -      -    -      -      -      (1)      -      -     (1)
Purchase of                                                                   
common stock                                                                  
for treasury  -     -      -    -     50   (311)      -       -      -   (311)
Sale of                                                                       
common stock                                                                  
from treasury -     -      -    -    (25)    89       -       -      -      89
Cash                                                                          
dividends                                                                     
paid ($.02 per                                                                
common share) -     -      -    -      -     -        -     (251)    -   (251)
Net income                                                                    
for fiscal                                                                    
1998          -     -      -    -      -     -        -    5,379     -   5,379
            ------------------------------------------------------------------
Balance at                                                                    
May 30,                                                                       
1998      17,565  $176  1,200  $12  5,608$(6,456)$18,784 $67,031 $   - $79,547


See accompanying notes.                                                         

F-5             

Cal-Maine Foods, Inc. and Subsidiaries              
Consolidated Statements of Cash Flows             
(in thousands)                  

                                                                [Download Table]

                                                                              
                                               Fiscal year ended              
                                           May 30     May 31     June 1       
                                           1998       1997       1996         
                                            ----------------------------      
Cash flows from operating activities                                          
Net income                               $   5,379  $ 14,845  $ 10,925        
Adjustments to reconcile net income                                           
to net cash     provided by operating                                         
activities:                                                                   
        Depreciation and amortization              12,017    10,550    10,444 
        Provision for doubtful accounts               361        52        41 
        Provision for deferred income taxes           805     2,856     4,660 
        Equity in income of affiliates               (294)     (524)     (721)
        (Gain) loss on sales of property,                                     
 plant and equipment                           (27)       69       956        
        Increase in deferred compensation              50        60        60 
Change in operating assets and                                                
liabilities, net of effects                                                   
from purchases of shell egg production                                        
and processing  businesses in 1998                                            
and 1997:                                                                     
        (Increase) decrease in receivables                                    
and other assets                              (321)    1,702    (2,220)       
        (Increase) decrease in inventories          3,675     1,238    (2,599)
        Increase in accounts payable,                                         
accrued expenses        and deferred expenses       3,262     1,635     3,728 
                                            --------------------------        
Net cash provided by operating activities   24,907    32,483    25,274        

Cash flows from investing activities                                          
Purchases of property, plant and equipment (14,831)  (16,189)   (8,768)       
Purchases of shell egg production                                             
and processing businesses                   (3,745)   (6,956)       -         
Payments received on notes receivable                                         
and from investments                           297     1,634       513        
Increase in note receivable                                                   
and investments                               (725)      (15)      (13)       
Net proceeds from sales of property,                                          
plant and equipment                            898       914       687        
                                            ---------------------------       
Net cash used in investing activities      (18,106)  (20,612)   (7,581)       

Cash flows from financing activities                                          
Net proceeds from sale of common stock           -    10,580         -        
Net payments on line of credit                   -         -   (15,500)       
Long-term borrowings                        35,800     3,000     5,050        
Principal payments on long-term debt                                          
and capital leases                         (24,738)   (6,990)   (5,835)       
Payments received on note                                                     
receivable - stockholder                         -     1,694         -        
Purchases of common stock for treasury        (311)     (371)     (497)       
Sales of common stock from treasury             89         -         -        
Payments of dividends                         (251)        -         -        
Redemption of fractional shares of                                            
common stock                                    (1)       (6)       (2)       
                                           ----------------------------       
Net cash provided by (used in)                                                
financing activities                        10,588     7,907    16,784)       
                                           ----------------------------       
Increase in cash and cash equivalents       17,389    19,778       909        
Cash and cash equivalents at                                                  
beginning of year                           23,737     3,959     3,050        
                                           ----------------------------       
Cash and cash equivalents at end of year  $ 41,126  $ 23,737 $   3,959        
                                           ============================       
Non-cash investing and                                                        
financing activities:                                                         
  Note payable for purchase of shell egg                                      
      production and processing business  $      - $   5,000   $     -        
                                          =============================       
        Notes received from sales of properties  $      - $      88   $   664 
                                          =============================       


See accompanying notes.                                                         

F-6       

Cal-Maine Foods, Inc. and Subsidiaries            
Notes to Consolidated Financial Statements            
(dollars in thousands, except share and per share amounts)        
May 30, 1998              

1.  Significant Accounting Policies                                             

Principles of Consolidation                                                     

The consolidated financial statements include the accounts of Cal-Maine         
Foods, Inc. and its subsidiaries (the "Company") all of which are wholly-       
owned. All significant intercompany transactions and accounts have been         
eliminated in consolidation.                                                    

Business                                                                        

The Company is engaged in the production, processing and distribution of        
shell eggs and egg products and livestock operations.  The Company's            
operations are significantly affected by the market price fluctuation           
of its principal products sold, shell eggs, and the costs of its principal      
ingredients, corn and other grains.                                             

Primarily all of the Company's sales are to wholesale egg buyers in the         
southeastern, midwestern and mid-Atlantic regions of the United States.         
Credit is extended based upon an evaluation of each customer's financial        
condition and credit history and collateral is generally not required.          
Credit losses have consistently been within management's expectations.          
No single customer accounted for more than 10% of the Company's net sales       
in fiscal year accounted for 10.1% of the Company's net sales in fiscal 1997.   

Use of Estimates                                                                

The preparation of the consolidated financial statements in conformity with     
general accepted accounting principles requires management to make estimates    
and assumptions that affect the amount reported in the consolidated financial   
statements and accompanying notes.  Actual results could differ from  those     
estimates.                                                                      

Cash Equivalents                                                                

The Company considers all highly liquid investments with a maturity of three    
months or less when purchased to be cash equivalents.                           

Inventories                                                                     

Inventories of eggs, feed, supplies and livestock are valued principally at     
the lower of cost (first-in, first-out method) or market.                       

The cost associated with flocks, consisting principally of chick purchases,     
feed, labor, contractor payments and overhead costs, are accumulated during     
a growing period of approximately 18 weeks.  Flock costs are amortized over     
the productive lives of the flocks, generally one to two years.                 

F-7     

Property, Plant and Equipment                                                   

Property, plant and equipment is stated at cost.  Depreciation is provided      
by the straight-line method over the estimated useful lives, which is 15 to     
25 years for buildings and improvements and 3 to 8 years for machinery and      
equipment.                                                                      

Impairment of Long-Lived Assets                                                 

The Company continually reevaluates the carrying value of its long-lived        
assets for events or changes in circumstances which indicate that the           
carrying value may not be recoverable. As part of this reevaluation, the        
Company estimates the future cash flows expected to result from the use of      
the asset and its eventual disposal. If the sum of the expected future cash     
flows (undiscounted and without interest charges) is less than the carrying     
amount of the asset, an impairment loss is recognized through a charge to       
operations.                                                                     

Intangible Assets                                                               

Loan acquisition costs are amortized over the life of the loan.                 
Franchise fees are amortized over ten years.                                    

Revenue Recognition                                                             

Revenue is recognized when product is shipped to customers.                     

Income  Taxes                                                                   

Income taxes have been provided using the liability method. Deferred            
income taxes reflect the net tax effects of temporary differences between       
the carrying amounts of assets and liabilities for financial reporting          
purposes and the amounts used for income tax purposes.                          

Stock Based Compensation                                                        

The Company grants stock options for a fixed number of shares to employees      
with  an exercise price equal to or above the fair value of the shares at       
the date of the grant.  The Company accounts for stock option grants in         
accordance with APB Opinion No. 25, "Accounting for Stock Issued to             
Employees," and, accordingly, recognizes no compensation expense for the        
stock option grants.                                                            

Impact of Recently Issued Accounting Standards                                  

In fiscal 1998, the Company adopted the provisions of FASB Statement No.        
128, "Earnings per Share". Statement 128 replaced the calculation of            
primary and fully diluted earnings per share.  Unlike primary earnings          
per share, basic earnings per share excludes any dilutive effects of            
options, warrants, and convertible securities.  Diluted earnings per            
share is very similar to the previously reported earnings per share.            
All earnings per share amounts  for all periods have been presented,            
and where appropriate, restated to conform to the statement 128 requirements.   

Effective for fiscal 1999, FASB No. 130, "Reporting Comprehensive Income",      
requires that items required to be recognized as components of comprehensive    
income be reported in a financial statement displayed with the same             
prominence as other financial statements. Management does not expect FASB       
No. 130 to have a significant impact on the Company in fiscal 1999.             

Effective fiscal 1999, FASB No. 131, "Disclosures about Segments of an          
Enterprise and Related Information", requires that companies report             
financial and descriptive information about their reportable operating          
segments. Management does not expect FASB No. 131 to have a significant         
impact on the Company in fiscal 1999.                                           

F-8           

Fiscal Year                                                                     

The Company's fiscal year-end is on the Saturday nearest May 31 which was       
May 30, 1998 (52 weeks), May 31, 1997 (52 weeks) and June 1, 1996 (52 weeks),   
for the most recent three years.                                                

2.  Initial Public Offering                                                     

During December 1996 and January 1997, the Company sold 1,730,000 shares in     
the aggregate of its common stock at $7 per share in an underwritten initial    
public offering (the "Offering").  Net proceeds from the Offering were          
$10,580.                                                                        

3.  Acquisitions                                                                

In November 1997, the Company purchased, certain operating assets of a          
shell egg production and processing business for $3,745. In April 1997,         
the Company purchased, certain operating assets of a shell egg production       
and processing business for $5,654 in cash and  a $5,000 note payable to        
the former owners. In January 1997, the Company purchased, for $1,302,          
certain operating assets of a shell egg production business. These              
acquisitions were accounted for by the purchase method of accounting.           

The operating results of these assets acquired are included in the              
consolidated statements of operations of the Company for the periods            
subsequent to the acquisition dates.  Prior operations of these assets          
acquired are immaterial to the Company's consolidated net sales, net            
income and net income per common share for the fiscal years ended May 30,       
1998 and May 31, 1997.                                                          

4.  Investment in Affiliates                                                    

The Company owns 50% of BCM Egg Company ("BCM"), a partnership.  Equity in      
earnings of $180, $681, and $721 from BCM have been included in the             
consolidated statements of operations in fiscal 1998, 1997 and 1996,            
respectively.  The Company purchased $5,189, $9,831, and $9,929 of eggs         
from BCM during each of those fiscal years, which represented a significant     
percentage of BCM's sales.                                                      

The Company owns 32.5% of American Egg Products, Inc. ("AEP").  Equity in       
earnings of $113 for fiscal 1998 and losses of $157 for fiscal 1997 from        
AEP have been included in the Company's consolidated statement of operations.   
The Company did not record equity in income or losses from AEP in fiscal    
1996 because of immateriality.                                                  

5.  Inventories                                                                 

Inventories consisted of the following:                                         

                                                                [Download Table]

                                                     
                                May 30      May 31   
                                1998        1997     
                               ----------------------
Flocks                        $  26,866   $  26,674  
Eggs and egg products             2,683       4,030  
Feed and supplies                 8,736       8,377  
Livestock                         3,152       3,513  
                              ---------------------- 
                              $  41,437   $  42,594  
                              ====================== 


F-9                   

6.  Property, Plant and Equipment                                               

Property, plant and equipment consisted of the following:                       

                                                                [Download Table]

                                                      
                                May 30       May 31   
                                1998         1997     
                                ----------------------
Land and improvements         $  22,180    $  19,752  
Buildings and improvements       57,248       53,593  
Machinery and equipment          82,104       75,069  
Construction-in-progress          7,280       10,603  
                                ----------------------
                                168,812      159,017  
Less accumulated depreciation    69,956       64,563  
                                ----------------------
                              $  98,856    $  94,454  
                                ======================


Depreciation expense was $11,595, $10,172 and $10,056 in fiscal 1998, 1997      
and 1996, respectively.                                                         

7.  Leases                                                                      

Leased property under capital leases consisted of the following:                

                                                                [Download Table]

                                                       
                                 May 30          May 31
                                  1998            1997 
                                 ----------------------
Machinery and equipment          $2,100          $2,100
Less accumulated amortization     1,587           1,208
                                 ----------------------
                                $   513         $   892
                                 ======================

Amortization expense was $379, $378 and $388 in fiscal 1998, 1997 and 1996,     
respectively.                                                                   

Future minimum payments under capital leases and noncancelable operating        
leases that have initial or remaining noncancelable terms in excess of one      
year at May 30, 1998 are as follows:                                            

                                                                [Download Table]

                                                           
                                  Capital        Operating 
                                  Leases         Leases    
                                  -------------------------
1999                              $   129          $ 3,106 
2000                                  168            2,713 
2001                                  143            2,318 
2002                                  --             1,034 
2003                                  --               636 
Thereafter                            --               612 
                                  -------------------------
Total minimum lease payments         440          $10,419  
                                                   ========

Less amount representing                                   
interest (rates from                                       
        7.25% to 7.50%)                      32            
Present value of minimum            ----                   
lease payments                       408                   
Less amounts due within one year     108                   
                                    ----                   
Amounts due after one year       $   300                   
                                 ========                  


F-10          

Substantially all of the leases provide that the Company pay taxes,             
maintenance, insurance and certain other operating expenses applicable          
to the leased assets.  The Company has guaranteed under certain operating       
leases the residual value of transportation equipment at the expiration of      
the leases.  Rent expense was $3,979, $ 3,849, and $3,901 in fiscal 1998,       
1997, and 1996, respectively.  Included in rent expense are vehicle rents       
totaling $1,876, $1,837, and $1,718 in fiscal 1998, 1997 and 1996,              
respectively.                                                                   

8.  Credit Facilities and Long-Term Debt                                        

Long-term debt consisted of the following:                                      

                                                                [Download Table]

                                                                    
                                                  May 30     May 31 
                                                  1998       1997   
                                                  ------------------
Note payable at 6.62%; due in monthly                               
installments    of $130, plus interest,                             
maturing in 2000                                  $12,515    $14,075
Series A Senior Secured Notes at 6.87%;                             
due in annual   principal installments                              
of $1,917 beginning on  December 2002                               
through 2009 with interest due                                      
semi-annually                                      11,500         - 
Series B Senior Secured Notes at 7.18%;                             
due in annual   principal installments of                           
$2,143 beginning in     December 2003 through                       
2009 with interest due                             15,000         - 
semi-annually                                                       
Fixed rate industrial revenue bonds                10,000      1,000
Note payable at 7.64%; due in monthly                               
installments of $114, including interest,                           
maturing in 2003                                    9,909     10,503
Note payable at 7.75%; due in monthly                               
installments of $55, plus interest,                                 
maturing in 2003                                    7,335      7,995
Note payable at 8.25%; due in monthly                               
installments of $79, including interest,                            
maturing in 2004                                    4,353      4,911
Note payable, federal funds rate plus 1.50%;                        
due in monthly installments of $24, including                       
interest, maturing in 2004                          1,691      1,976
Note payable at 8.5%; due in weekly installments                    
of $2, plus interest, maturing in 2002                291        -  
Note payable at 8.69%; due in monthly installments                  
of $8, including interest, maturing in 2001           259        329
Note payable at 6.61%; due in monthly installments                  
of $7, including interest, maturing in 2000           192        266
Note payable at 4%; due in monthly installments of                  
$4, including interest, maturing in 1999               60        105
Adjustable rate industrial revenue bond             1,985      6,655
Note payable paid in 1998                               -      8,884
Note payable paid in 1998                               -      6,780
                                                   -----------------
                                                    75,090    63,479
Less current maturities                              4,432     4,302
                                                   -----------------
                                                   $70,658   $59,177
                                                   =================


The adjustable rate industrial revenue bond is due May 1, 2006 with interest    
due monthly at variable rates (5.6% at May 30, 1998 and 5.65% at May 30,        
1997).  The bond is redeemable at the option of the Company on a monthly        
basis subject to certain mandatory redemption requirements.  The bond is        
collateralized by a letter of credit of $2,026.                                 

F-11        

The Company has available to borrow $13,500 of fixed rate industrial revenue    
bonds for the construction of certain operating facilities, of which $10,000    
has been borrowed as of May 30, 1998.  The estimated total construction cost    
of the facilities is $21,500, of which $18,000 was expended as of May 30,       
1998.  Principal payments will be due monthly in an amount equal to the         
outstanding borrowings on September 30, 1998 divided by 150 beginning           
November 1, 1998. Interest is at a fixed rate of 7.21% on outstanding           
borrowings at May 30, 1998.  Interest on subsequent borrowings will be          
at a fixed rate of 1.25% above the then current yield on an average-life        
U.S. Treasury security.                                                         

The aggregate annual maturities of long-term debt at May 30, 1998               
are as follows:                                                                 

                                                                [Download Table]

                        
1999           $  4,432 
2000             14,315 
2001              3,590 
2002              3,555 
2003              5,582 
Thereafter       43,616 
              ----------
                $75,090 
             ===========


The Company has a $35,000 line of credit with three banks all of which was      
unused at May 30, 1998.  The line of credit is limited in availability based    
upon the levels of accounts receivable and inventories. Borrowings under the    
line of credit bear interest at ninety basis points above the federal funds     
rate or ninety basis points above LIBOR, at the Company's option.               
Facilities fees of 25 basis points per annum are payable quarterly on the       
unused portion of the line.                                                     

Substantially all trade receivables and inventories collateralize the line      
of credit and property, plant and equipment collateralize the long-term debt.   
The Company is required, by certain provisions of the loan agreements, to       
maintain minimum levels of working capital and net worth; to limit dividends,   
capital expenditures and additional long-term borrowings; and to maintain       
various current and debt-to-equity ratios.  Additionally, the chief             
executive officer of the Company, or his family, must maintain of the           
outstanding voting stock of the Company.  The Company was in compliance         
with these provisions as of May 30, 1998.                                       

Interest of $4,402, $4,614, and $5,910 was paid during fiscal 1998, 1997,       
and 1996, respectively. Interest of $615, $337, and $305 was capitalized        
for construction of certain facilities during fiscal 1998, 1997, and 1996,      
respectively.                                                                   

9.  Employee Benefit Plans                                                      

The Company maintains a medical plan that is qualified under Section 401(a)     
of the Internal Revenue Code and not subject to tax under present income tax    
laws.  Under its plan, the Company self-insures, in part, coverage for          
substantially all full-time employees with coverage by insurance carriers       
for certain stop-loss provisions for losses greater than $60 for each           
occurrence.  The Company's expenses, including accruals for incurred but        
not reported claims, were approximately $2,579, $2,110, and $3,130 in fiscal    
1998, 1997 and 1996, respectively.                                              

The Company has a 401(k) plan which covers substantially all employees.         
Participants in the Plan may contribute up to the maximum allowed by            
Internal Revenue Service regulations.                                           

The Company has an employee stock ownership plan (ESOP) that covers             
substantially all employees.  The Company has historically made                 
contributions to the ESOP of 3% of participants' compensation, plus an          
additional amount determined at the discretion of the Board of Directors.       
Contributions may be made in cash or the Company's common stock.  The           
contributions vest 20% annually beginning with the participant's third          
year of service.  The Company's contributions to the plan were $970,            
$1,416, and $992 in fiscal 1998, 1997 and 1996, respectively.                   

F-12                  

The Company has deferred compensation agreements with certain officers          
for payments to be made over specified periods beginning when the officers      
reach age 65 or over as specified in the agreements.  Amounts accrued for       
these agreements are based upon deferred compensation earned, discounted        
over the estimated remaining service life of each officer.  Deferred            
compensation expense totaled $50 in fiscal 1998 and $60 in fiscal 1997          
and 1996, respectively.                                                         

10.  Stock Option Plan                                                          

The Company has elected to follow APB No. 25 and related Interpretations in     
accounting for its employee stock options because, as discussed below, the      
alternative fair value accounting provided for under FASB Statement No. 123,    
Accounting for Stock-Based Compensation, requires use of option valuation       
models that were not developed for use in valuing employee stock options.       

The Company has reserved 800,000 shares under its 1993 Stock Option Plan.       
The options have ten-year terms and vest annually over five years beginning     
one year from the grant date.  At May 30, 1998 and May 31, 1997, 272,000        
shares, respectively, were available for grant under the 1993 plan.             

Pro forma information regarding net income and net income per share is          
required by FASB Statement No. 123, and has been determined as if the           
Company had accounted for its employee stock options under the fair value       
method of that Statement.  The fair value for these options was estimated       
at the date of grant using a Black-Scholes option pricing model with the        
following weighted-average assumptions for fiscal 1997:  risk-free interest     
rate of 6.5%; no dividend yield; volatility factor of the expected market       
price of the Company's common stock of .517, and a weighted-average expected    
life of the options of 5 years.                                                 

The weighted-average fair value of options granted during fiscal 1997 was       
$4.56.  No options were granted in fiscal 1998 or 1996.  The pro forma          
effect of the estimated fair value of the options granted in fiscal 1997        
was insignificant to the fiscal 1998 and 1997 consolidated net income and       
net income per share of the Company.                                            

A summary of the Company's stock option activity and related information        
is as follows:                                                                  

                                                                [Download Table]

                                                                    

                                      Shares        Weighted-Average
                                       -----         Exercise Price 
                                                   ---------------- 
Outstanding at June 1, 1996          504,000           $   3.42     
Granted                               24,000               4.33     
                                     -------                        
Outstanding at May 31, 1997          528,000               3.46     
Exercised                            (23,000)              3.42     
                                     -------                        
Outstanding at May 30, 1998          505,000               3.47     
                                     =======                        


The weighted average remaining contractual life of the options outstanding      
was 5.2 years and 6.2 years at May 30, 1998 and May 31, 1997, respectively.     
At May 30, 1998 and May 31, 1997, 385,000 and 302,400 options, respectively,    
were exercisable.                                                               

F-13                

11.  Income Taxes                                                               

Income tax expense consisted of the following:                                  

                                                                [Download Table]

                                                                        

                                         Fiscal year ended              
                                May 30       May 31          June 1     
                                1998         1997            1996       
                                -----------------------------------     
Current:                                                                
        Federal                       $1,967     $  6,502       $  1,700
        State                            174          150            100
                                -----------------------------------     
                                2,141        6,652          1,800       

Deferred:                                                               
        Federal                          696        2,390          4,020
        State                            109          466            640
                                -----------------------------------     
                                  805        2,856          4,660       
                                -----------------------------------     
                               $2,946     $  9,508       $  6,460       
                                ===================================     


Significant components of the Company's deferred tax liabilities were           
as follows:                                                                     

                                                                [Download Table]

                                                                       
                                           May 30        May 31        
                                            1998          1997         
                                           --------------------        

Current deferred tax liabilities:                                      
        Inventories                              $10,641       $10,175 
        Prepaid expenses                             123           175 
        Accrued expenses                            (257)         (415)
        Other                                       (131)          (20)
                                          ---------------------        
Total current deferred tax liabilities     10,376         9,915        

Long-term deferred tax liabilities:                                    
        Property, plant and equipment              7,168         6,741 
        Investments                                  252           335 
        Deferred compensation                       (310)         (310)
        Cash basis temporary differences           3,185         3,185 
                                          ---------------------        
Total long-term deferred tax liabilities   10,295         9,951        
                                          ---------------------        
Total deferred tax liabilities            $20,671       $19,866        
                                          =====================        


Effective May 29, 1988, the Company could no longer use cash basis              
accounting for its farming subsidiary because of tax law changes.  The          
Taxpayer Relief Act of 1997  provides that   taxes on the cash basis            
temporary differences as of that date are generally  payable over the           
next  20 years beginning in fiscal 1999 or in the first fiscal in which         
there is a change in ownership control.  The Company uses the farm-price        
method for valuing inventories for income tax purposes.                         

F-14              

The differences between income tax expense at the Company's effective           
income tax rate and income tax expense (benefit) at the statutory federal       
income tax rate (34% in 1998 and 1996 and 35% in 1997) were as follows:         

                                                                [Download Table]

                                                                    
                                         Fiscal year ended          
                                     May 30      May 31      June 1 
                                     1998        1997        1996   
                                     -------------------------------
Statutory federal income tax         $2,830      $8,524     $5,911  
State income taxes, net                 187         700        488  
Benefit of net operating loss                                       
  carryover for certain states           -         (300)        -   
Increase in federal income tax rate      -          495         -   
Other, net (benefit)                    (71)         89         61  
                                     -------------------------------
                                     $2,946      $9,508     $6,460  
                                     ===============================


Federal and state income taxes of $7,989,  $7,597, and $1,985 were paid in      
fiscal 1998, 1997 and 1996, respectively.  Federal and state income taxes       
of $1,090, $9, and $1,500 were refunded in fiscal 1998, 1997 and 1996,          
respectively.                                                                   

12.  Other Matters                                                              

The carrying amounts reported in the consolidated balance sheet for cash and    
cash equivalents, notes receivable and investments, long-term debt and          
capitalized leases approximate their carrying value.  The fair values for       
notes receivables, long-term debt and capitalized leases are estimated          
using discounted cash flow analysis, based on the Company's current             
incremental borrowing rates for similar types of borrowing arrangements.        

The Company is the defendant in certain legal actions.  It is the opinion       
of management, based on advice of legal counsel, that the outcome of these      
actions will not have a material adverse effect on the Company's                
consolidated financial position or operations.                                  

F-15              
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS             
Years ended May 30, 1998, May 31, 1997 and June 1, 1996               
(in thousands)                    

                                                                [Download Table]

                                                                           
                              Balance at  Charged to  Write-off  Balance at
                             Beginning of  Cost and    of           End of 
Description                    Period      Expense     Accounts    Period  
------------------------------------------------------------------------   
Year ended May 30, 1998:                                                   
Allowance for doubtful                                                     
accounts                        $ 62         $ 361        $ 62       $ 361 
                                ====         =====       ======      ===== 

Year ended May 31, 1997:                                                   
Allowance for doubtful accounts $ 31          $ 52        $ 21        $ 62 
                                ====         =====       ======      ======

Year ended June 1, 1996:                                                   
Allowance for doubtful accounts $ 34          $41         $ 44        $ 31 
                               =====         =====       ======      ======


S-1             

CAL-MAINE FOODS, INC.                 
Form 10-K for the fiscal year                   
ended May 30, 1998                      

EXHIBIT INDEX                 
The following  exhibits, not included by reference, are filed herewith:         

                                                                [Download Table]

                                                                           
Exhibit                                                                    
Number     Exhibit                                                         
-------    -------                                                         
10.6(a)    Amendment dated October 29, 1997 to Wage Continuation Plan dated
           as of January 1, 1986 between B. J. Raines and the Registrant   
23         Consent of Ernst & Young LLP                                    
27         Financial Data Schedule                                         

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-K’ Filing		Date		Other Filings
		5/1/06
		11/1/98
		10/9/98
		9/30/98
		9/4/98
Filed on:		8/27/98
		8/24/98
		7/10/98
		5/31/98
For Period End:		5/30/98		DEF 14A
		12/18/97
		11/29/97		10-Q
		10/29/97
		6/3/97
		5/31/97		10-K,  DEF 14A
		5/30/97
		12/11/96
		10/3/96
		9/24/96
		6/1/96
		9/2/94
		3/7/94
		11/10/93
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