Cal-Maine Foods Inc – ‘10-K’ for 5/31/97

As of:  Tuesday, 8/26/97   ·   For:  5/31/97   ·   Accession #:  16160-97-2   ·   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                                         44±   193K 
 2: EX-10.1(A)  Material Contract                                     17±    68K 
 3: EX-11       Statement re: Computation of Earnings Per Share        1      6K 
 4: EX-23       Consent of Experts or Counsel                          1      5K 
 5: 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 31, 1997                              

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. 
(Exact name of registrant as specified in its charter)    

Delaware                                     64-0500378     
(State or other Jurisdiction of          (I.R.S. Employer Identification No.)   
Incorporation or Organization)                                                  

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

(601) 948-6813    
(Registrants 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 registrants 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 August 1, 1997, 11,988,000 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          
$ 22,523,538, 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 1997 Annual      
Meeting of Shareholders to be held on October 8, 1997, to be filed with         
the Securities and Exchange Commission on or about September 5, 1997.           

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.  The Company is also engaged in the manufacturing and sale of egg    
products.  Shell egg sales accounted for approximately 92% and egg products     
sales for approximately 6% of the Company's net sales in fiscal 1997.           
Currently, the Company is the largest producer and distributor of fresh shell   
eggs in the United States and during fiscal 1997, had sales of approximately 379
million dozen shell eggs.  This volume represents approximately 7.5% of all     
shell eggs sold in the United States.  The Company markets the majority of      
its eggs and egg products in 26 states, primarily in the Southwestern,          
Southeastern, Midwestern and Mid-Atlantic regions of the United States.         

During the past nine years, the Company has pursued             
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.  See "Growth Strategy and Acquisitions" below.                      

On December 11, 1996, the Company sold 1,400,000                
shares of its Common Stock, $0.01 par value ("Common                            
Stock"), at a price of $7.00 per share in an underwritten                       
public offering.  On December 30, 1996 and January 9,                           
1997, the Company sold 330,000 additional shares of Common                      
Stock, at $7.00 per share, upon the exercise, in full,                          
by the underwriter's of an overallotment option.  The net                       
proceeds of the offering to the Company, of $10.6 million,                      
have added to working capital and will be used for                              
acquisitions and general corporate purposes.                                    

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                                
--------------------------------                                

During the past nine years the Company has pursued              
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 seven acquisitions, adding an aggregate                         
of 15.0 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 17.7 million                        
for each of the past five fiscal years.  Also, there has                        
been a three-fold increase in the number of dozens of shell                     
eggs sold, from approximately 117 million in the fiscal year                    
ended May 28, 1988 to an average of approximately 394                           
million for the past five fiscal years.  Net sales amounted                     
to $292.5 million in fiscal 1997, approximately 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.                   AR        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             OH        1,500,000  12,194,000
1995            A & G Farms (3)                 KY        1,000,000   2,883,000
1997            Sunbest Farms                   AR          600,000   1,302,000
1997            Southern Empire Egg Farm, Inc.  GA        1,300,000  10,654,000
                                                         ----------  ----------
                   Total                                 15,000,000 $61,378,000

(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 $16,000,000, adding                             
approximately 1,000,000 layer and 250,000 pullet capacity,                      
and a feed mill and grain storage; or (ii) construction in Waelder,             
Texas, expected to commence in fiscal 1998, and to be                           
completed in fiscal 2000 at an estimated cost of approximately                  
$13,900,000, 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 and egg products.  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 its last fiscal year       
represented only approximately 7.5% 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.  It owns facilities to hatch chicks, grow                           
pullets, manufacture feed and produce, manufacture and distribute               
shell eggs and egg products.  Company-owned facilities                          
accounted for approximately 65% of its total fiscal 1997 egg                    
production, with the balance attributable to contract                           
producers used by the Company.                                                  

Under Cal-Maines 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 to be used 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 ration 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 60%.  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 various demand and supply                      
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, possibly resulting in lower egg prices.                         
Historically, the Company has tended 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 that are                              
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                   
efficiency, the in-line facilities produce a higher                             
percentage of grade A eggs, which sell at higher prices.  Eggs produced         
on farms owned by contractors are brought to the                                
Company's processing plants where they are cleaned, graded                      
and packaged.  Some eggs are sold unprocessed to                                
other processors.                                                               

The Company's egg production activities are subject             
to risks to which the agriculture industry, in general,                         
is exposed.  These include, among others, risks associated                      
with weather conditions and disease factors that could                          
have a material adverse effect on the Company's operations.                     
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                            
and egg products is subject to risks such as possible                           
changes in food consumption opinions and practices                              
reflecting perceived health concerns.                                           

The Company operates in an industry which is                    
cyclical, with total demand that is generally level and with                    
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 dampen the extreme cyclicality of the past.  New practices, such as        
more efficient molting programs, should help contribute                         
to profitability.                                                               

Marketing.  Of the approximately 379 million dozen              
shell eggs sold by the Company in the fiscal year ended                         
May 31, 1997, 93% were cleaned, graded and packed in the                        
Company's processing facilities and sold by the                                 
Company, 5% were used by the Company in its manufacture of                      
egg products, and 2% were 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 1997, Cal-Maines largest customer,                      
H.E. Butt Grocery Company, headquartered in San                                 
Antonio, Texas, accounted for 10.1% 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 a long-term relationship with many of its                           
customers, such customers 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.                        
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, which are subject                        
to wide fluctuations.                                                           

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.  Consequently, the Company                             
generally experiences lower sales and net income in its                         
first and fourth fiscal quarters ending in August and May,                      
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 food                             
restaurant 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             
approximately 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 competitors of Cal-Maine exist in each of the                            
Company's markets.                                                              

Egg Products.  Egg products produced by the Company             
include liquid egg whites, liquid egg yolks, liquid                             
whole eggs, salt yolk, sugar yolk, and similar products sold                    
in frozen form, and various forms of dried whole eggs,                          
egg whites and yolks.  The Company's production facility is                     
located in Jackson, Mississippi.  Sales are made                                
primarily to national accounts which consist principally of                     
manufacturers of baked goods, mayonnaise and                                    
confections.  The Company manufactures and distributes egg                      
products in liquid, frozen and dried forms and also                             
processes egg products according to customer specifications                     
for use in special baking and manufacturing applications.                       
Egg products are sold on a direct basis to major                                
institutional users or with the assistance of egg product                       
brokers.  Egg products accounted for approximately 6% of the Company's          
net sales in fiscal year 1997.                                                  

Of the 25 million dozen of shell eggs used in the               
Company's egg products operations in the fiscal year 1997,                      
approximately 70% were produced by the Company's flocks, and                    
the balance was purchased by the Company from                                   
outside sources.                                                                

Egg product sales are somewhat seasonal, with peak              
demands occurring prior to holiday seasons.  The                                
Company's plant is operated at its highest capacity during                      
periods when egg prices are at their lowest.  These                             
periods normally do not coincide with the high demand                           
periods for egg products.  As a result, the Company's egg                       
product inventories can be significant, requiring high                          
working capital.  The Company tends to build egg product                        
inventories during periods of shell egg surpluses and reduce                    
inventories when demand for shell eggs is stronger.                             
Egg product inventories vary between two and four months of                     
sales.                                                                          

Specialty Eggs. The Company also produces specialty             
eggs such as Egg*lands Best and Farmhouse eggs.                                 
Egg*lands Best eggs are patented eggs that are believed by                      
its developers, based on scientific studies, to cause                           
no increase in serum cholesterol when eaten as part of a low fat                
diet.  Cal-Maine produces and processes Egg*lands                               
Best eggs, under license from Egg*lands 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. Egg*lands Best eggs accounted for less than 1%                      
of the Company's net sales in fiscal 1997.                                      
Farmhouse brand eggs are produced at 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 meet                      
the demands of consumers who are sensitive to                                   
environmental and animal welfare issues.                                        

Livestock.  The Company's livestock operations                  
currently consist of the operation 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%                         
of the Company's net sales in fiscal year 1997.                                 

Competition.  The production, processing and                    
distribution of shell eggs is an intensely competitive                          
business 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 and                                    
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 Company competes with approximately 50                      
other manufacturers of egg products.  Egg Products                              
competition is not limited by geographic boundaries and is                      
predicated primarily on quality, price, product availability                    
and terms of sale.                                                              

The shell egg production and processing industry has            
been characterized by a growing concentration of                                
production. In 1996, 61 producers with one million or more                      
layers owned 75.2% 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 Egglands*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 Company's own standards and customer                                   
specifications.                                                                 

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

Employees.  As of May 31, 1997, the Company had a               
total of approximately 1,500 employees of whom 1,353                            
worked in egg production, processing and marketing, 66 were                     
engaged in feed mill operations, 45 in dairy activities,                        
and 36 were administrative employees, including officers, at                    
the Company's executive offices.  About 20% 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,                           
15 feed mills, 12 production facilities, 10 pullet growing                      
facilities, 20 processing and packing facilities, two                           
wholesale distribution facilities, one egg products plant 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 226 over-the-road tractors and             
259 trailers, of which 82 and 153 are owned,                                    
respectively, and the balance are leased.                                       

At May 31, 1997, the Company owned approximately                
11,438 acres of land and owned facilities to:                                   

                                                                [Download Table]
                                                                
Operation            Capacity                                   
---------            --------                                   
Hatch                13,000,000- pullet chicks per year         
Grow (1)              5,865,000- pullets per year               
House (2)            12,000,000- hens                           
Produce                     542- tons of feed per hour          
Process (3)               4,865- cases of eggs per hour         
Break (3)                   500- cases of eggs per hour         
Dry (4)                   8,000- lbs. per hour liquid whites    
                          5,500- lbs. per hour liquid whole eggs
                          5,500- lbs. per hour liquid yolk      

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

(1) The Company controls approximately 15.6 million layers,                     
of which 5.4 million are cared for by contract producers.                       

(1) One case equals 30 dozen eggs.                                              

(1) One case of large eggs yields approximately 40 lbs. of                      
liquid egg or approximately 10 lbs. of dried egg.                               

Over the past five fiscal years, Cal-Maine's capital            
expenditures have been approximately $92 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 31, 1997.                                   

PART II.

ITEM 5.  MARKET FOR REGISTRANTS 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 and                    
the fourth quarter of fiscal year 1997.                                         

                                                                [Download Table]
                                      
Fiscal Year 1997     High         Low 
----------------     ----         --- 
Third Quarter     $ 9 3/8      $ 6 5/8
 Fourth Quarter     8 1/2        5    

As of May 31, 1997, there were approximately 130                
record holders of the Company's Common Stock and                                
approximately 1,170 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                              
Common 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, all the outstanding shares of which are                           
owned by Fred A. Adams, Jr., Chairman of the Board or                           
Directors and Chief Executive Officer of the Company.                           

Although the Company has not paid any cash dividends            
on its Common Stock, the Board of Directors will                                
consider the possible declaration of cash dividends in the                      
future in the light of the Company's results of operations,                     
financial condition, capital requirements for possible                          
acquisitions and new construction, and other relevant                           
economic factors.  Under the terms of the Company's agreements with             
its principal lenders, Cal-Maine is subject to various                          
financial covenants limiting its ability to pay dividends.                      
The Company 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 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                               
Managements 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.                                      

           (Amounts in thousands, except per share data)
            Fiscal Years Ended
            ------------------

                                                                [Download Table]
                                                                                
                                May 31,   June 1,   June 3,   May 28,   May 29, 
                                 1997      1996      1995      1994      1993   
                               --------  --------  --------  --------  -------- 
Statement of Operations Data:                                                   
Net sales                      $292,526  $282,844  $242,649  $254,713  $235,908 
Cost of sales                   236,273   230,850   223,965   225,227   204,115 
                               --------  --------  --------  --------  -------- 
Gross profit                     56,253    51,994    18,684    29,486    31,793 
Selling, general and                                                            
   administrative                28,930    29,653    27,934    26,094    24,776 
                               --------  --------  --------  --------  -------- 
     Operating income (loss)     27,323    22,341    (9,250)    3,392     7,017 
Other income (expense):                                                         
     Interest expense            (4,277)   (5,487)   (5,052)   (4,318)   (3,034)
     Equity in income of affiliate  524       721        24       283       506 
     Other                          783      (190)      993     1,238       674 
                               --------  --------  --------  --------  -------- 
                                 (2,970)   (4,956)   (4,035)   (2,797)   (1,854)
                               --------  --------  --------  --------  -------- 
Income (loss) before                                                            
   income taxes                  24,353    17,385   (13,285)      595     5,163 
Income tax expense (benefit)      9,508     6,460    (4,600)      371     2,060 
                               --------  --------  --------  --------  -------- 
Net income (loss)              $ 14,845  $ 10,925  $ (8,685) $    224  $  3,103 
                               ========  ========  ========  ========  ======== 
Net income (loss) per                                                           
   common share (1)            $   1.21  $   0.94  $  (0.74) $   0.02  $   0.26 
                               ========  ========  ========  ========  ======== 
Weighted average shares                                                         
   outstanding (1)               12,285    11,584    11,700    11,760    11,821 

Balance Sheet Data:                                                             
Working capital                $ 45,390  $ 26,742  $ 10,092  $ 41,920  $ 24,991 
Total assets                    182,294   149,991   147,402   123,018   100,806 
Total debt (including                                                           
   current portion)              64,436    63,426    64,211    43,440    36,966 
Total stockholders equity        74,642    47,900    37,472    46,208    32,296 

(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' 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                         
and in the manufacture and sale of egg products.  The                           
Company's fiscal year end is the Saturday closest to May 31.                    

The Company's operations are fully integrated.  It              
owns facilities to hatch chicks, grow pullets, manufacture                      
feed, and produce, process, manufacture and distribute shell                    
eggs and egg products.  The Company currently is the                            
largest producer and distributor of fresh shell eggs in the                     
United States.  Shell eggs account for over 90% 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 by the Company primarily to national                          
and regional supermarket chains.  Egg products are sold both                    
on a direct basis and through egg product brokers                               
to institutional users, including manufacturers of baked                        
goods, mayonnaise and confections.                                              

The Company currently uses contract producers for               
approximately 35% 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 60% 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 Condensed                           
Consolidated Statements of Income expressed as a percentage                     
of net sales.                                                                   

             Percentage of Net Sales
              Fiscal Years Ended
              ------------------

                                                                [Download Table]
                                                                              
                                  May 31, 1997    June 1, 1996    June 3, 1995
                                  ------------    ------------    ------------
Net sales                            100.0%          100.0%          100.0%   
Cost of sales                         80.8            81.6            92.3    
                                     ------          ------          ------   
Gross profit                          19.2            18.4             7.7    
Selling, general & administrative                                             
   expenses                            9.9            10.5            11.5    
                                     ------          ------          ------   
Operating income (loss)                9.3             7.9            (3.8)   
Other income (expense)                (1.0)           (1.8)           (1.7)   
                                     ------          ------          ------   
Income (loss) before taxes             8.3             6.1            (5.5)   
Income tax expense (benefit)           3.2             2.2            (1.9)   
                                     ------          ------          ------   
Net income (loss)                      5.1%            3.9%           (3.6)%  
                                     ======          ======          ======   

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-Maines 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 sources 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.  Approximately                      
2% 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 late fiscal purchase date, these facilities accounted                    
for approximately 1% 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 decrease for fewer dozens purchased was                    
offset by the higher per dozen price paid, due to the                           
improved shell egg market prices.  With increases in sales                      
exceeding increases in cost of sales, the gross profit                          
increased from 18.4% of net sales for fiscal 1996 to 19.2%                      
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 the current                          
fiscal year, 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                      
have decreased from 10.5% for fiscal 1996 to 9.9% for the                       
current fiscal year.                                                            

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%,                      
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 share,                          
compared to net income of $10.9 million, or $.94 per share,                     
for fiscal 1996.                                                                

Fiscal Year Ended June 1, 1996 Compared to Fiscal Year Ended June 3, 1995       
-------------------------------------------------------------------------       

Net Sales.  Net sales in the fiscal year ended June             
1, 1996 were $282.8 million, an increase of $40.2 million,                      
or 16.6%, over net sales of $242.6 million in the fiscal                        
year ended June 3, 1995.  The increase was due to higher                        
shell egg prices.  Apart from the impact of acquisitions and new                
facilities construction, the sale price of shell eggs is the                    
most important factor in year-to-year changes in the                            
Company's net sales.  Cal-Maines net average selling price                      
during fiscal 1996 was $.684 per dozen shell eggs, as                           
compared to $.528 per dozen shell eggs for fiscal 1995.                         
During fiscal 1996, the Company experienced a decrease in the                   
number of eggs sold because of a slight reduction in flock                      
size and fewer purchases from outside sources.  The Company                     
produced 308.8 million dozens of eggs in fiscal 1996,                           
compared with 322.7 million dozens in fiscal 1995.  The                         
Company purchased approximately 80.2 million dozens of                          
eggs from outside sources during fiscal 1996, compared to                       
105.0 million in fiscal 1995.  Approximately 12.9% of net                       
sales in fiscal 1996 were attributable to shell egg                             
production and processing facilities acquired from Wayne                        
Detling Farm in 1994 and A & G Farms in 1995, and approximately 8.6%            
of fiscal 1996 net sales were attributable to new                               
facilities constructed by the Company in Edwards,                               
Mississippi in 1994 and Waelder, Texas in 1995.  Such                           
acquired facilities and constructed facilities accounted for 11.6%              
and 5.4%, respectively, of fiscal 1995 net sales.                               

Cost of Sales.  The total cost of sales in fiscal               
1996 was $230.9 million, an increase of $6.9 million, or                        
3.1%, above the 1995 fiscal cost of sales of $224.0 million.  The               
increase was primarily due to an increase in feed                               
ingredient cost from $.211 per dozen eggs in fiscal 1995 to                     
$.266 per dozen eggs in fiscal 1996.  The gross profit                          
margin increased to 18.4% in fiscal 1996 from 7.7% in fiscal                    
1995, as a result of the increase in shell egg prices,                          
which more than offset the decrease in the number of eggs                       
produced and the increase in feed cost.  Cost of sales,                         
as a percentage of net sales, sharply declined in the fiscal                    
year ended June 1, 1996, primarily as a result of increases                     
in shell egg prices.                                                            

Selling, General and Administrative Expenses.                   
Selling, general and administrative expenses in fiscal 1996                     
were $29.7 million, an increase of $1.8 million, or 6.2%, from                  
$27.9 million for fiscal 1995.  Selling, general and                            
administrative expenses, as a percent of net sales, were                        
10.5% in fiscal 1996, a decrease from 11.5% in fiscal 1995.                     

Operating Income.  As the result of the above, the              
Company's operating income was $22.3 million in fiscal                          
1996, compared to an operating loss of $9.3 million in                          
fiscal 1995.                                                                    

Other Income (Expense).  Other expense increased                
from $4.0 million in fiscal 1995 to $5.0 million in fiscal                      
1996.  An increase of approximately $1.0 million in the                         
Company's equity in the income of BCM Egg Company                               
(BCM), a partnership in which Cal-Maine is a 50% owner, was                     
more than offset by an increase in interest expense                             
of $400,000 and a $1.2 million reduction in other income.                       

Income Taxes.  As a result of above, the Company's              
pre-tax income was $17.4 million in fiscal 1996,                                
compared to a $13.3 million loss before income taxes in                         
fiscal 1995.  Income tax expense was $6.5 million in fiscal                     
1996 compared to an income tax benefit of $4.6 million in                       
fiscal 1995.  The effective income tax rate is 37.2% for                        
the year ended June 1, 1996, compared to 34.6% for the year                     
ended June 3, 1995.  This increase was principally a                            
result of the increased effective tax rate for state income                     
taxes.                                                                          

Net Income.  As a result of the above, the Company              
had net income of $10.9 million, or $.94 per share, in                          
fiscal 1996, compared to a net loss of $8.7 million, or $.74                    
per share, in fiscal 1995.                                                      

Capital Resources and Liquidity.  The Company's                 
working capital at May 31, 1997 was $45.4 million                               
compared to $26.7 million at June 1, 1996.  The Company's                       
current ratio was 2.26 at May 31, 1997 as compared                              
with 1.79 at June 1, 1996.  The Company's need for working                      
capital generally is highest in the first and last fiscal                       
quarters ending in August and May, 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                            
million line of credit with three banks at May 31, 1997.                        
The Company's long-term debt at that date, including                            
current maturities and capitalized lease obligations,                           
amounted to $64.4 million, as compared to $63.4 million at                      
June 1, 1996.                                                                   

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                          
31, 1997.                                                                       

On December 11, 1996, the Company sold 1,400,000                
shares of Common Stock at a price of $7.00 per share                            
in an underwritten public offering.  On December 30, 1996                       
and January 9, 1997, the Company sold, at $7.00 per                             
share, a total of 330,000 additional shares of Common Stock                     
in connection with the public offering upon exercise                            
of the underwriter over-allotment option. The $10.6 million                     
of net proceeds from the public offering provide the                            
Company additional funds for possible future acquisitions of                    
shell egg operations and related facilities, for working                        
capital requirements and for general corporate purposes.                        
The Chairman of the Board of Directors and Chief                                
Executive Officer of the Company also sold certain of his                       
shares of Common Stock in the public offering and used                          
$1.7 million of the proceeds received by him to pay, in                         
full, his non-interest bearing note held by the Company.                        

For the fiscal year ended May 31, 1997, $32.5                   
million of net cash was provided by operating activities, of                    
which  $16.2 million was used for construction and purchases                    
of property, plant and equipment and $7.0 million was                           
used for the purchase of shell egg production and processing                    
businesses.  The Company has expended $11.5 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                       
$16.0 million total project cost through industrial revenue                     
bonds maturing in 2011.  Borrowings under the industrial                        
revenue bond agreement totaled $1.0 million at May 31,                          
1997. Long-term debt of $5.0 million was assumed in                             
connection with the purchase of a shell egg production and                      
processing business in fiscal 1997.  In fiscal 1998, the                        
Company plans to commence construction of new shell egg                         
production and processing facilities in Waelder, Texas.  The                    
estimated cost of construction is approximately $13.9                           
million with financing plans of approximately $10.4 million                     
in borrowings from an insurance company.                                        

In fiscal 1997, $7.0 million was used to repay                  
long-term debt and $3.3 million was received on notes                           
receivable and from investments.                                                

The net result of these activities was an increase              
in cash and equivalents of $19.8 million for fiscal 1997.                       

The Company has $3.2 million  of deferred tax                   
liability due to a subsidiarys change from a cash basis to                      
an accrual basis taxpayer on May 29, 1988.  This liability                      
will become payable with respect to the first fiscal year in                    
which the Company fails to qualify as a family farming                          
corporation within the meaning of Section 447 of the                            
Internal Revenue Code (the Code).  The Company could lose                       
such tax status as a result of a change in the tax                              
laws, and will lose such tax status if its annual revenues                      
from farming are less than $111.5 million, or if the members                    
of a single family fail to own at least 50% of the voting                       
power of all voting stock and at least 50% of all other                         
classes of stock.  The Company had farming revenues of                          
$258.6 million for fiscal 1997.  The Company's farming                          
revenues and the ownership of its stock by Fred Adams, Jr.                      
and other members of his family presently qualify the                           
corporation as a family farming corporation.  If family                         
farming corporation status is lost, 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.                                                           

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                                 
difference include, but are not limited to, those discussed                     
in Factors Affecting Future Performance 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                     
managements 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)                                          

      Fiscal Year 1997

                                                                [Download Table]
                                                                           
                       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  $    .10       $    .52       $    .54       $    .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 1997 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 1997 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 1997 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 1997 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 Ernst & Young LLP, Independent Auditors       
       Consolidated Balance Sheets as of May 31, 1997 and June 1, 1996
 Consolidated Statements of Operations for the Years Ended
May 31, 1997, June 1, 1996 and June 3, 1995       
Consolidated Statements of Shareholders Equity for the  
     Years Ended May 31, 1997, June 1, 1996 and June 3, 1995
Consolidated Statements of Cash Flows for the Years     
Ended May 31, 1997, June 1, 1996 and June 3, 1995 
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:                                                        

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 Registrants 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 July 1, 1986,                       
among R.K. Looper, 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.*                          

11      Statement regarding computation of earnings per share.                  

21      Subsidiaries of the Registrant.*                                        

23      Consent of Ernst & Young LLP.                                           

27      Financial Data Schedule.                                                

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

+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 1997.  No amendments to previously filed Forms                    
8-K were filed during the fourth quarter of 1997.                               

(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 21st day of August, 1997.                      

                                                                [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:                                      

                                                                [Download Table]
                                                                             
Signature                  Title                              Date           
---------                  -----                              ----           
/s/  Fred R. Adams, Jr.    Chairman of the Board and          August 21, 1997
-----------------------    Chief Executive Officer                           
     Fred R. Adams, Jr.    (Principal Executive Officer)                     

/s/  Richard K. Looper     Vice Chairman of the Board         August 21, 1997
-----------------------    and Director                                      
     Richard K. Looper                                                       

/s/  Adolphus B. Baker     President and Director             August 21, 1997
-----------------------                                                      
     Adolphus B. Baker                                                       

/s/  Bobby J. Raines       Vice President, Chief Financial    August 21, 1997
-----------------------    Officer, Treasurer, Secretary                     
     Bobby J. Raines       and Director                                      
                           (Principal Financial Officer)                     

/s/  Charles F. Collins    Vice President, Controller         August 21, 1997
-----------------------    and Director                                      
     Charles F. Collins    (Principal Accounting Officer)                    

/s/  Jack B. Self          Vice President and Director        August 21, 1997
-----------------------                                                      
     Jack B. Self                                                            

/s/  Joe M. Wyatt          Vice President and Director        August 21, 1997
-----------------------                                                      
     Joe M. Wyatt                                                            

/s/  W. D. Cox             Director                           August 21, 1997
-----------------------                                                      
     W. D. Cox                                                               

/s/  R. Faser Triplett     Director                           August 21, 1997
-----------------------                                                      
     R. Faser Triplett                                                       

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS  

                                                                [Download Table]
                                                                             
                                                                         Page
                                                                         ----

Report of Ernst & Young LLP, Independent Auditors                         F-2

Consolidated Balance Sheets as of May 31, 1997 and June 1, 1996           F-3

Consolidated Statements of Operations for the years ended                    
   May 31, 1997, June 1, 1996 and June 3, 1995                            F-4

Consolidated Statements of Shareholders' Equity for the                      
years ended May 31, 1997, June 1, 1996 and June 3, 1995                   F-5

Consolidated Statements of Cash Flows for the years ended                    
May 31, 1997, June 1, 1996 and June 3, 1995                               F-6

Notes to Consolidated Financial Statements                                F-7

 F-1

Report of Ernst & Young LLP, 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                             
31, 1997 and June 1, 1996, and the related consolidated                         
statements of operations, stockholders' equity and cash                         
flows for each of the three years in the period ended May 31,                   
1997.  Our audit also includes 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 financial statements referred to above                      
present fairly, in all material respects, the consolidated                      
financial position of Cal-Maine Foods, Inc. and subsidiaries                    
at May 31, 1997 and June 1, 1996, and the consolidated                          
results of their operations and their cash flows for  each                      
of the three years in the period ended May 31, 1997, in                         
conformity with generally accepted accounting principles.                       
Also, in our opinion, the related financial statement                           
schedule, when considered in relation to the basic financial                    
statements taken as a whole, presents fairly in all                             
material respects the information set forth therein.                            

                   ERNST & YOUNG LLP

Jackson, Mississippi                                                            
July 10, 1997                                                                   

F-2   

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

                                                                [Download Table]
                                                                               
                                                     May 31, 1997  June 1, 1996
                                                     ------------  ------------
Assets                                                                         
Current assets:                                                                
  Cash and cash equivalents                           $  23,737     $   3,959  
  Receivables:                                                                 
    Trade receivables, less allowance for doubtful                             
      accounts of $62 in 1997 and $31 in 1996 (Note 8)   12,779        13,387  
    Other                                                   307           160  
                                                      ---------     ---------  
                                                         13,086        13,547  
  Recoverable federal and state income taxes              1,137           460  
  Inventories (Notes 5 and 8)                            42,594        40,969  
  Prepaid expenses and other current assets                 986         1,513  
                                                      ---------     ---------  
Total current assets                                     81,540        60,448  
Other assets:                                                                  
  Notes receivable and investments                        4,747         5,318  
  Other                                                     661           529  
                                                      ---------     ---------  
                                                          5,408         5,847  
Property, plant and equipment, less                                            
  accumulated depreciation (Notes 6 and 8)               94,454        82,426  
Leased property under capital leases, less                                     
  accumulated amortization (Note 7)                         892         1,270  
                                                      ---------     ---------  
Total assets                                          $ 182,294     $ 149,991  
                                                      =========     =========  
Liabilities and stockholders' equity                                           
Current liabilities:                                                           
  Trade accounts payable                              $  15,267     $  13,780  
  Accrued wages and benefits                              4,314         4,077  
  Accrued expenses and other liabilities                  2,114         2,237  
  Current maturities of:                                                       
    Long-term debt                                        4,302         3,807  
    Capitalized lease obligations                           238           450  
                                                      ---------     ---------  
                                                          4,540         4,257  
Deferred income taxes (Note 11)                           9,915         9,355  
                                                      ---------     ---------  
Total current liabilities                                36,150        33,706  

Long-term debt, less current maturities (Note 8)         59,177        58,214  
Capitalized lease obligations, less                                            
  current maturities (Note 7)                               719           955  
Deferred expenses (Note 9)                                1,655         1,561  
Deferred income taxes (Note 11)                           9,951         7,655  
                                                      ---------     ---------  
Total liabilities                                       107,652       102,091  

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 at May 31, 1997                               
    and 18,000,000 at June 1, 1996                                             
    Issued and outstanding shares-17,565,200 at                                
    May 31, 1997 and 17,035,200 at June 1, 1996             176           170  
  Class A common stock, $.01 par value                                         
    Authorized shares-1,200,000 at May 31, 1997                                
    and none at June 1, 1996                                                   
    Issued and outstanding shares-1,200,000 at                                 
    May 31, 1997 and none at June 1, 1996                    12             -  
  Paid-in capital                                        18,785         8,229  
  Retained earnings                                      61,903        47,058  
  Common stock in treasury (5,583,200 shares in                                
  1997 and 5,522,400 shares in 1996)                     (6,234)       (5,863) 
  Note receivable - stockholder                               -        (1,694) 
                                                      ---------     ---------  
Total stockholders' equity                               74,642        47,900  
                                                      ---------     ---------  
Total liabilities and stockholders' equity            $ 182,294     $ 149,991  
                                                      =========     =========  
See accompanying notes.                                                        

   F-3

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

                     Fiscal year ended
                     -----------------

                                                                [Download Table]
                                                                              
                                         May 31        June 1         June 3  
                                          1997          1996           1995   
                                         ------        ------         ------  
Net sales                               $292,526      $282,844       $242,649 
Cost of sales                            236,273       230,850        223,965 
                                        --------      --------       -------- 
Gross profit                              56,253        51,994         18,684 
Selling, general and administrative       28,930        29,653         27,934 
                                        --------      --------       -------- 
Operating income (loss)                   27,323        22,341         (9,250)
Other income (expense):                                                       
Interest expense (Note 8)                 (4,277)       (5,487)        (5,052)
Equity in income of affiliates (Note 4)      524           721             24 
Other                                        783          (190)           993 
                                        --------      --------       -------- 
                                          (2,970)       (4,956)        (4,035)
                                        --------      --------       -------- 
Income (loss) before income taxes         24,353        17,385        (13,285)
Income tax expense (benefit) (Note 11)     9,508         6,460         (4,600)
                                        --------      --------       -------- 
Net income (loss)                       $ 14,845      $ 10,925       $ (8,685)
                                        ========      ========       ======== 
Net income (loss) per common share      $   1.21      $    .94       $   (.74)
                                        ========      ========       ======== 

See accompanying notes.                                                         

F-4   

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

                                                                [Download Table]
                                                                                
                              Common Stock                       Note           
              ------------------------------------               Rec-           
                         Cls A Cls A Treas Treas   Pd-in  Ret    Stock-         
              Shrs  Amt  Shrs  Amt   Shrs  Amt     Cap    Erngs  holder  Total  
              ----- ---- ----- ----- ----- ------- ------ ------ ------- -------
Balance at                                                                      
May 28, 1994  17035 $170     - $   -  5290 $(5036) $ 8231 $44818 $(1694) $46489 
  Redemption                                                                    
   of fractional                                                                
   shares of                                                                    
   common stock   -    -     -     -     -      -     (1)      -      -      (1)
  Purchases of                                                                  
   common stock                                                                 
   for treasury   -    -     -     -    90   (331)     -       -      -    (331)
  Net loss for                                                                  
   fiscal 1995    -    -     -     -     -      -      -   (8685)     -   (8685)
              ----- ---- ----- ----- ----- ------- ------ ------ ------- ------ 
Balance at                                                                      
June 3, 1995  17035  170     -     -  5380  (5367)  8230   36133  (1694)  37472 
  Redemption                                                                    
   of fractional                                                                
   shares of                                                                    
   common stock   -    -     -     -     -      -     (1)      -      -      (1)
  Purchases of                                                                  
   common stock                                                                 
   for treasury   -    -     -     -   142   (496)     -       -      -    (496)
  Net income for                                                                
   fiscal 1996    -    -     -     -     -      -      -   10925      -   10925 
              ----- ---- ----- ----- ----- ------- ------ ------ ------- -------
Balance at                                                                      
June 1, 1996  17035  170     -     -  5522  (5863)   8229  47058  (1694)  47900 
  Exchange of                                                                   
   common stock                                                                 
   for Class                                                                    
   A common                                                                     
   stock      (1200) (12) 1200    12     -      -       -      -      -       - 
  Issuance of                                                                   
   common                                                                       
   stock       1730   18     -     -     -      -   10562      -      -   10580 
  Redemption                                                                    
   of fractional                                                                
   shares of                                                                    
   common stock   -    -     -     -     -      -      (6)     -      -      (6)
  Purchase of                                                                   
   common stock                                                                 
   for treasury   -    -     -     -    61   (371)      -      -      -    (371)
  Repayment of                                                                  
   note rec-                                                                    
   stockholder    -    -     -     -     -      -       -      -   1694    1694 
  Net income for                                                                
   fiscal 1997    -    -     -     -     -      -       -  14845      -   14845 
              ----- ---- ----- ----- ----- ------- ------ ------ ------- -------
Balance at                                                                      
May 31, 1997  17565 $176  1200 $  12  5583 $(6234) $18785 $61903 $    -  $74642 
              ===== ==== ===== ===== ===== ======= ====== ====== ======= =======

See accompanying notes.                                                         

F-5       

Cal-Maine Foods, Inc. and Subsidiaries    

Consolidated Statements of Cash Flows     
(in thousands)    

                                                                [Download Table]
                                                                               
                                                          Fiscal year ended    
                                                  -----------------------------
                                                  May 31     June 1     June 3 
                                                   1997       1996       1995  
                                                 --------   --------   --------
CASH FLOWS FROM OPERATING ACTIVITIES                                           
Net income (loss)                                $14,845    $10,925    $(8,685)
Adjustments to reconcile net income                                            
  (loss) to net cash provided by                                               
  (used in) operating activities:                                              
     Depreciation and amortization                10,550     10,444      9,894 
     Provision for doubtful accounts                  52         41          4 
     Provision for deferred income taxes           2,856      4,660     (3,210)
     Equity in income of affiliates                 (524)      (721)       (24)
     (Gain) loss on sales of property,                                         
       plant and equipment                            69        956       (873)
     Increase in deferred compensation                60         60         60 
Change in operating assets and liabilities,                                    
  net of effects from purchases of shell                                       
  egg production and processing businesses                                     
  in 1997 and 1995:                                                            
     (Increase) decrease in receivables and                                    
       other assets                                1,702     (2,220)     2,388 
     (Increase) decrease in inventories            1,238     (2,599)     2,205 
     Increase (decrease) in accounts payable,                                  
       accrued expenses and deferred expenses      1,635      3,728     (2,033)
                                                 --------   --------   --------
Net cash provided by (used in) operating                                       
  activities                                      32,483     25,274       (274)

CASH FLOWS FROM INVESTING ACTIVITIES                                           
Purchases of property, plant and equipment       (16,189)    (8,768)   (15,944)
Purchases of shell egg production and                                          
  processing businesses                           (6,956)         -     (2,883)
Payments received on notes receivable and                                      
  from investments                                 1,634        513        136 
Increase in note receivable and investments          (15)       (13)       (40)
Net proceeds from sales of property, plant                                     
  and equipment                                      914        687      1,292 
                                                 --------   --------   --------
Net cash used in investing activities            (20,612)    (7,581)   (17,439)

CASH FLOWS FROM FINANCING ACTIVITIES                                           
Net proceeds from sale of common stock            10,580          -          - 
Net borrowings (payments) under line of credit         -    (15,500)    15,500 
Long-term borrowings                               3,000      5,050      6,000 
Principal payments on long-term debt and                                       
  capital leases                                  (6,990)    (5,835)    (5,432)
Payments received on note receivable-stockholder   1,694          -          - 
Purchases of common stock for treasury              (371)      (497)      (332)
Redemption of fractional shares of common stock       (6)        (2)        (1)
                                                 --------   --------   --------
Net cash provided by (used in) financing                                       
  activities                                       7,907    (16,784)    15,735 
                                                 --------   --------   --------
Increase (decrease) in cash and cash equivalents  19,778        909     (1,978)
Cash and cash equivalents at beginning of year     3,959      3,050      5,028 
                                                 --------   --------   --------
Cash and cash equivalents at end of year         $23,737    $ 3,959    $ 3,050 
                                                 ========   ========   ========
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    $   330 
                                                 ========   ========   ========
Capital lease obligations for equipment          $     -    $     -    $   676 
                                                 ========   ========   ========

See accompanying notes.                                                         

     F-6

Cal-Maine Foods, Inc. and Subsidiaries    

Notes to Consolidated Financial Statements      
(in thousands, except  per share amounts)     
May 31, 1997  

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.  In fiscal years 1997 and 1996, corn prices were                        
historically high, which adversely affected cost of goods sold.  Management     
anticipates lower corn prices in fiscal year 1998 which will                    
have a positive effect on the fiscal 1998 cost of goods sold.                   

Primarily all of the Company's sales are to wholesale egg                       
and egg products buyers in the southwestern, southeastern,                      
midwestern and mid-Atlantic regions of the United States.  Revenue is           
recognized when shell eggs and products are shipped to                          
customers.  Credit is extended based upon an evaluation of each                 
customer's financial condition and credit history and                           
generally collateral is not required.  Credit losses have consistently been     
within management's expectations.  One customer accounted                       
for 10.1% of the Company's net sales in fiscal 1997.  No single                 
customer accounted for more than 10% of the Company's net                       
sales in fiscal years 1996 and 1995.                                            

Use of Estimates                                                                

The preparation of the consolidated financial statements in                     
conformity with generally 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.                                      

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.                      

F-7             

2.  Significant Accounting Policies (contd.)                                    

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.                                                            

Net Income Per Common Share                                                     

Net income per common share is based upon the weighted                          
average number of common shares outstanding of 12,285,000,                      
11,584,000, and 11,700,000 during fiscal 1997, 1996 and                         
1995, respectively.                                                             

Impact of Recently Issued Accounting Standards                                  

Effective June 2, 1996, the Company adopted FASB Statement                      
No. 121, Accounting for the Impairment of Long-Lived Assets                     
and for Long-Lived Assets to Be Disposed Of, which requires                     
impairment losses to be recorded on long-lived assets used                      
in operations when indicators of impairment are present and the                 
undiscounted cash flows estimated to be generated by those                      
assets are less than the assets carrying amount.  Statement No. 121             
also addresses the accounting for long-lived assets that are                    
expected to be disposed of.  The effect of this adoption was                    
not material to the Company's financial position or results                     
of its operations.                                                              

In February 1997, the FASB Statement No. 128, Earnings per                      
Share, was issued.  Effective in the third quarter of fiscal                    
1998, the Company will be required to change the method currently               
used to compute earnings per share and to restate all prior                     
periods.  Under the new requirements for calculating                            
earnings per share, the dilutive effect of stock options                        
will be excluded.  The impact of Statement 128 on the calculation of  earnings  
per share is not expected to be material.                                       

Fiscal Year                                                                     

The Company's fiscal year-end is on the Saturday nearest May                    
31 which was May 31, 1997 (52 weeks), June 1, 1996 (52                          
weeks), and June 3, 1995 (53 weeks) for the most recent fiscal                  
three years.                                                                    

2.  Initial Public Offering                                                     

During December 1996 and January 1997, the Company sold                         
1,730,000 shares in 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 April 1997, the Company purchased certain operating                          
assets of a shell egg production and processing business for                    
$10,654, which included a $5,000 note payable to the seller.  The               
transaction was accounted for as a purchase.                                    

In January 1997, the Company purchased, for $1,302, certain                     
operating assets of a shell egg production business and                         
accounted for the transaction as a purchase.                                    

In June 1994, the Company purchased, for $2,883, certain                        
inventories, land and equipment of a shell egg production                       
and processing                                                                  

F-8               

3.  Acquisitions (contd.)                                                       

business and accounted for the transaction as a purchase. 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 through May                      
1998.  The Company may renew the lease for three years with monthly             
rentals of $79 through May 2001.  The Company has the option                    
to purchase the facilities and equipment for approximately                      
$3,820 after fiscal 1999 or $1,750 after fiscal 2002.                           

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 net sales, net income (loss) and net income (loss) per common         
share for the fiscal years ended May 31, 1997, June 1, 1996                     
and June 3, 1995.                                                               

4.  Investment in Affiliates                                                    

The Company owns 50% of BCM Egg Company ("BCM"), a                              
partnership.  Equity in earnings of $681, $721, and $24,                        
from BCM have been included in the consolidated statements of                   
operations in fiscal 1997, 1996 and 1995, respectively.  The                    
Company purchased approximately $9,831, $9,929, and $7,492 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 losses of $157 from AEP have been                           
included in the consolidated statement of operations in fiscal 1997.            
The Company did not record equity in income or losses from                      
AEP in fiscal 1996 or 1995 because its ownership interest in AEP was            
less than 20%.                                                                  

5.  Inventories                                                                 

Inventories consisted of the following:                                         

                                                                [Download Table]
                                                   
                                 May 31     June 1 
                                  1997       1996  
                                 -------    -------
Flocks                           $26,674    $23,501
Eggs and egg products              4,030      3,127
Feed and supplies                  8,377     10,424
Livestock                          3,513      3,917
                                 -------    -------
                                 $42,594    $40,969
                                 =======    =======

6.  Property, Plant and Equipment                                               

Property, plant and equipment consisted of the following:                       

                                                                [Download Table]
                                                   
                                 May 31     June 1 
                                  1997       1996  
                                 -------    -------
Land and improvements           $ 19,752   $ 18,854
Buildings and improvements        53,593     48,830
Machinery and equipment           75,069     68,836
Construction-in-progress          10,603      3,617
                                 -------    -------
                                 159,017    140,137
Less accumulated depreciation                      
and amortization                  64,563     57,711
                                 -------    -------
                                $ 94,454   $ 82,426
                                ========   ========

F-9             

7.  Leases                                                                      

Leased property under capital leases consisted of the                           
following:                                                                      

                                                                [Download Table]
                                                       
                                    May 31       June 1
                                     1997         1996 
                                    ------       ------
Machinery and equipment            $ 2,100      $ 2,100
Less accumulated amortization        1,208          830
                                    ------       ------
                                   $   892      $ 1,270
                                    ======       ======

Future minimum payments under capital leases and                                
noncancelable operating leases that have initial or                             
remaining noncancelable terms in excess of one year at                          
May 31, 1997 are as follows:                                                    

                                                                [Download Table]
                                                                
                                       Capital         Operating
                                       Leases          Leases   
                                       -------         -------  
1998                                   $   303         $ 2,746  
1999                                       303           1,600  
2000                                       322           1,179  
2001                                       151             756  
2002                                         -             417  
Thereafter                                   -             144  
                                       -------         -------  
Total minimum lease payments             1,079          $6,842  
                                                       =======  
Less amount representing interest                               
  (rates from7.25% to 9.0%)                122                  
                                       -------                  
Present value of minimum lease payments    957                  
Less amounts due within one year           238                  
                                       -------                  
Amounts due after one year             $   719                  
                                       =======                  

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     
$ 3,849, $3,901, and $3,726 in fiscal 1997, 1996, and 1995,                     
respectively.  Included in rent expense are vehicle rents                       
totaling $1,837, $1,718, and $1,726 in fiscal 1997, 1996 and                    
1995, respectively.                                                             

F-10      

8.  Credit Facilities and Long-Term Debt                                        

Long-term debt consisted of the following:                                      

                                                                [Download Table]
                                                                            
                                                        May 31       June 1 
                                                         1997         1996  
Note payable at 6.62%; due in monthly installments                          
of $130, plus interest, maturing in 2000                $14,075      $15,890
Note payable at 7.64%; due in monthly installments                          
of $114, including interest, maturing in 2003            10,503       11,053
Note payable at federal funds rate plus 1.50%; due                          
in quarterly installments of $298, plus interest,                           
maturing  in 2000                                         8,884       10,079
Note payable at 9.625%; due in monthly installments                         
of $60, plus interest, maturing in 2001                   6,780        7,485
Note payable at 7.75%; due in monthly installments                          
of $55, plus interest, maturing in 2003                   7,995        8,655
Note payable at 8.25%; due in monthly installments                          
of $79, including interest, maturing in 2004              4,911            -
Note payable, federal funds rate plus 1.50%; due in                         
monthly installments of $24, plus interest,                                 
maturing in 2004                                          1,976            -
Note payable, federal funds rate plus 1.5%; due in                          
quarterly installments of $36, plus interest,                               
maturing in 2000                                              -          643
Note payable at 8.69%; due in monthly installments                          
of $8, including interest, maturing in 2001                 329          392
Note payable at 6.61%; due in monthly installments                          
of $7, including interest, maturing in 2000                 266          335
Note payable at 4%; due in monthly installments of                          
$4, including interest, maturing in 1999                    105          149
Adjustable rate industrial revenue bonds                  6,655        7,340
Fixed rate industrial revenue bonds                       1,000            -
                                                        -------      -------
                                                         63,479       62,021
Less current maturities                                   4,302        3,807
                                                        -------      -------
                                                        $59,177      $58,214
                                                        =======      =======

The adjustable rate industrial revenue bonds with principal                     
balances of $4,670 and $1,985 are due November 1, 2005 and                      
May 1, 2006, respectively, with interest due monthly at variable                
rates (5.65% at May 31, 1997 and 5.60% at June 1, 1996).                        
The bonds are redeemable at the option of the Company on a monthly              
basis subject to certain mandatory redemption requirements.                     
The bonds are collateralized by letters of credit of                            
approximately $7,000.                                                           

The Company has available to borrow $13,500 of fixed rate                       
industrial revenue bonds for the construction of certain                        
operating facilities, of which $1,000 has been borrowed as of May 31,           
1997.  The estimated total construction cost of the                             
facilities is $16,000, of which $11,500 was expended as of May 31, 1997.        
Principal payments consist of monthly principal payments                        
equal to the outstanding borrowings on September 30, 1998 divided               
by 150 beginning November 1, 1998.  Interest is payable                         
monthly at a fixed rate based upon the average-life US Treasury rate            
plus 2% (8.84% weighted average rate at May 31, 1997) at the                    
date the funds are advanced to the Company.                                     

  F-11

8.  Credit Facilities and Long-Term Debt (contd.)                               

The aggregate annual maturities of long-term debt at May 31,                    
1997 are as follows:                                                            

                                                                [Download Table]
                                                                                
1998                    $4,302                                                  
1999                     5,452                                                  
2000                    16,005                                                  
2001                    15,590                                                  
2002                     3,375                                                  
Thereafter              18,755                                                  
                       -------                                                  
                       $63,479                                                  
                       =======                                                  

The Company has a $35,000 line of credit with three banks                       
all of which was unused at May 31, 1997.  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 1.5% above the federal funds rate or LIBOR, at          
the Company's option.  Facilities fees of .25% 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 ownership of not less than 50% of the outstanding voting          
stock of the Company.  The Company was in compliance with                       
these provisions as of May 31, 1997.                                            

Interest of $4,614, $5,910, and $5,594 was paid during                          
fiscal 1997, 1996, and 1995, respectively. Interest of $337,                    
$305, and $438 was capitalized for construction of certain facilities           
during fiscal 1997, 1996, and 1995, 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 $2,110, $3,130, and                     
$2,100 in fiscal 1997, 1996 and 1995, 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 approximately $1,416,  $992, and $808 in fiscal 1997, 1996                 
and 1995, respectively.                                                         

The Company has deferred compensation agreements with                           
certain officers for payments to be made over specified                         
periods beginning when the officers reach age 65.  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 $60                     
in fiscal 1997, 1996 and 1995, respectively.                                    

                                F-12                                            

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 31, 1997 and June 1, 1996, 272,000 and 296,000 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                       
1996.  The pro forma effect of the estimated fair value of the options          
granted in fiscal 1997 was insignificant  to the fiscal 1997                    
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]
                                                                   
                                                     Weighted-     
                                                     Average       
                                     Shares          Exercise Price
                                    --------         --------------
Outstanding at June 3, 1995          552,000             $ 3.42    
   Forfeited                         (48,000)              3.42    
                                    --------                       
Outstanding at June 1, 1996          504,000               3.42    
   Granted                            24,000               4.33    
                                    --------                       
Outstanding at May 31, 1997          528,000               3.46    
                                    ========                       

At May 31, 1997, the weighted average remaining contractual                     
life of the options outstanding was 6.2 years and  302,400                      
options were exercisable.                                                       

11.  Income Taxes                                                               

Income tax expense (benefit) consisted of the following:                        

                                                                [Download Table]
                                                      
                            Fiscal year ended         
                  May 31        June 1         June 3 
                   1997          1996           1995  
                  ------        ------         ------ 
Current:                                              
  Federal         $6,502        $1,700        $(1,390)
  State              150           100              - 
                  ------        ------         ------ 
                   6,652         1,800         (1,390)

Deferred:                                             
  Federal          2,390         4,020         (2,810)
  State              466           640           (400)
                  ------        ------         ------ 
                   2,856         4,660         (3,210)
                  ------        ------         ------ 
                  $9,508        $6,460        $(4,600)

F-13      

11.  Income Taxes (continued)                                                   

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

                                                                [Download Table]
                                                                        
                                                   May 31       June 1  
                                                    1997         1996   
                                                  --------     -------- 
Current deferred tax liabilities:                                       
  Inventories                                     $ 10,175     $  9,330 
  Prepaid expenses                                     175          235 
  Accrued expenses                                    (415)        (200)
  Other                                                (20)         (10)
                                                  --------     -------- 
Total current deferred tax liabilities               9,915        9,355 

Long-term deferred tax liabilities:                                     
  Property, plant and equipment                      6,741        5,830 
  Investments                                          335          385 
  Deferred compensation                               (310)        (300)
  State net operating loss carryforwards                 -         (255)
  Alternative minimum tax credit carryforwards           -       (1,105)
  Cash basis temporary differences                   3,185        3,100 
                                                  --------     -------- 
Total long-term deferred tax liabilities             9,951        7,655 
                                                  --------     -------- 
Total deferred tax liabilities                     $19,866      $17,010 
                                                  ========     ======== 

Effective May 29, 1988, the Company could no longer use cash                    
basis accounting for its farming subsidiary because of tax                      
law changes.  The taxes on the cash basis temporary differences                 
as of that date will not be payable under current tax laws                      
provided there are no changes in ownership control and future annual            
revenues of the farming subsidiary exceed 1988 revenues.                        
Management does not anticipate the payment of such taxes                        
related to these cash basis timing differences during 1997.                     
The Company uses the farm-price method for valuing inventories                  
for income tax purposes.                                                        

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 (35% in fiscal 1997                    
and 34% in fiscal 1996 and 1995) were as follows:                               

                                                                [Download Table]
                                                                               
                                                     Fiscal year ended         
                                             May 31       June 1       June 3  
                                               1997         1996         1995  
                                            --------     --------     -------- 
Statutory federal income tax (benefit)       $8,524       $5,911       $(4,517)
State income taxes (benefit), net               700          488          (268)
Benefit of net operating loss carryover                                        
  for certain states                           (300)           -             - 
Increase in federal income tax rate             495            -             - 
Other, net                                       89           61           185 
                                            --------     --------     -------- 
                                             $9,508       $6,460       $(4,600)

Federal and state income taxes of $7,597, $1,985 and $294                       
were paid in fiscal 1997, 1996 and 1995, respectively.                          
Federal and state income taxes of $9, $1,500 and $3,267 were refunded in        
fiscal 1997, 1996 and 1995, respectively.                                       

F-14  

12.  Other Matters                                                              

The carrying amounts reported in the 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 advise of legal                          
counsel, that the outcome of these actions will not have a material             
adverse effect on the Company's financial position or                           
results of operations.                                                          

F-15    

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS    
Years ended May 31, 1997, June 1, 1996, and June 3, 1995    
(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 31, 1997:                                                       
Allowance for doubtful accounts        $  31       $  52     $  21      $  62  
                                       =====       =====     =====      =====  

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

Year ended June 3, 1995:                                                       
Allowance for doubtful accounts        $  49       $   4     $  19      $  34  
                                       =====       =====     =====      =====  


S-1   

CAL-MAINE FOODS, INC.   

Form 10-K for the fiscal year ended May 31, 1997  

EXHIBIT INDEX   

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

                                                                [Download Table]
                                                                             
Exhibit                                                                      
Number        Exhibit                                                        
-------       -------                                                        
10.1(A)       Amendment to Term Loan Agreement (see Exhibit 10.1) dated as of
                June 3, 1997 (without exhibits)                              
11            Statement regarding computation of earnings per share          
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
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Filed on:		8/26/97
		8/21/97
		8/1/97
		7/10/97
		6/3/97
For Period End:		5/31/97		DEF 14A
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