CAL-MAINE FOODS INCCALM
CAL-MAINE FOODS INC Debt Disclosure
Note 10 - Credit Facility
For fiscal years 2025, 2024 and 2023, interest expense was $
612
549
583
primarily related to commitment fees on the Credit Facility described below.
On November 15, 2021, we entered into an Amended and Restated Credit Agreement (as amended, the “Credit Agreement”) with
a five-year term. The Credit Agreement provides for a senior secured revolving credit facility (the “Credit Facility” or “Revolver”)
in an initial aggregate principal amount of up to $
250
15
letters of credit and a $
15
with the consent of BMO Harris Bank N.A. (the “Administrative Agent”), an increase in the Credit Facility in the aggregate up
to $
200
commitments under the Revolver.
No
during fiscal 2025 or fiscal 2024. The Company had $
4.7
Facility at May 31, 2025.
On May 26, 2023, we entered into the First Amendment (the “First Amendment”) to the Credit Agreement, which replaced the
London Interbank Offered Rate interest rate benchmark with the secured overnight financing rate as administered by the Federal
Reserve Bank of New York or a successor administrator of the secured overnight financing rate (“SOFR”). The interest rate in
connection with loans made under the Credit Facility is based on, at the Company’s election, either the Adjusted Term SOFR
Rate plus the Applicable Margin or the Base Rate plus the Applicable Margin. The “Adjusted Term SOFR” means with respect
to any tenor, the per annum rate equal to the sum of (i) Term SOFR as defined in the Credit Agreement plus (ii)
0.10
% (10 basis
points); provided, if Adjusted Term SOFR determined as provided above shall ever be less than the Floor, then Adjusted Term
SOFR shall be deemed to be the Floor. The “Floor” means the rate per annum of interest equal to
0.00
%. The “Base Rate” means
a fluctuating rate per annum equal to the highest of (a) the federal funds rate plus
0.50
% per annum, (b) the prime rate of interest
established by the Administrative Agent, and (c) the Adjusted Term SOFR for a
one
-month tenor plus
1.00
%. The “Applicable
Margin” means
0.00
% to
0.75
% per annum for Base Rate Loans and
1.00
% to
1.75
% per annum for SOFR Loans, in each case
depending upon the Total Funded Debt to Capitalization Ratio for the Company at the quarterly pricing date. The Company will
pay a commitment fee on the unused portion of the Credit Facility payable quarterly from
0.15
% to
0.25
%, in each case depending
upon the Total Funded Debt to Capitalization Ratio for the Company at the quarterly pricing date.
The Credit Facility is guaranteed by substantially all the current and future wholly-owned direct and indirect domestic subsidiaries
of the Company (the “Guarantors”), and is secured by a first-priority perfected security interest in substantially all of the
Company’s and the Guarantors’ accounts, payment intangibles, instruments (including promissory notes), chattel paper, inventory
(including farm products) and deposit accounts maintained with the Administrative Agent.
The Credit Agreement contains customary covenants, including restrictions on the incurrence of liens, incurrence of additional
debt, sales of assets and other fundamental corporate changes and investments. The Credit Agreement requires maintenance of
two financial covenants: (i) a maximum Total Funded Debt to Capitalization Ratio tested quarterly of no greater than
50
%; and
(ii) a requirement to maintain Minimum Tangible Net Worth at all times of $
700
50
% of net income (if net income
is positive) less permitted restricted payments for each fiscal quarter after November 27, 2021.
On March 25, 2025, the Company entered into the Second Amendment (the “Second Amendment”) to the Credit Agreement.
Under the Credit Agreement, a Change of Control is an event of default. The Second Amendment amended the definition of
Change of Control to exclude from that definition the conversion (the “Class A Conversion”) of all outstanding shares of the
Company’s Class A Common Stock into Common Stock which occurred on April 14, 2025.
The Second Amendment states that after the Class A Conversion, Change of Control will mean any of the following: (i) the
acquisition by any “person” or “group” (as such terms are used in sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended) at any time of beneficial ownership of 30.0% or more of the outstanding capital stock or other equity interests
of the Company on a fully-diluted basis, (ii) the failure of individuals who are members of the Board (or similar governing body)
of the Company on the effective date of the Second Amendment (together with any new or replacement directors whose initial
nomination for election was approved by a majority of the directors who were either directors on the effective date of the Second
Amendment or previously so approved) to constitute a majority of the Board (or similar governing body) of the Company, or (iii)
any “Change of Control” (or words of like import), as defined in any agreement or indenture relating to any issue of Material
Indebtedness of any Loan Party or any Subsidiary of a Loan Party (each as defined in the Credit Agreement), shall occur.
Further, under the terms of the Credit Agreement, payment of dividends under the Company’s current dividend policy of one-
third of the Company’s net income, computed in accordance with GAAP, and payment of other dividends or repurchases by the
Company of its capital stock is allowed, as long as after giving effect to such dividend payments or repurchases no default has
occurred and is continuing and the sum of cash and cash equivalents of the Company and its subsidiaries plus availability under
the Credit Facility equals at least $
50
The Credit Agreement also includes customary events of default and customary remedies upon the occurrence of an event of
default, including acceleration of the amounts due under the Credit Facility and foreclosure of the collateral securing the Credit
Facility.
At May 31, 2025, we were in compliance with the covenant requirements of the Credit Agreement.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jul 22, 2025 | Showing above |
| 2022 | Jul 19, 2022 | |
| 2021 | Jul 19, 2021 | |
| 2020 | Jul 20, 2020 | |
| 2019 | Jul 22, 2019 | |
| 2018 | Jul 23, 2018 | |
| 2017 | Jul 24, 2017 | |
| 2016 | Jul 18, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.