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Calavo Growers, Inc. Announces Third Quarter 2024 Financial Results, Dividend Increase

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Calavo Growers, Inc. (CVGW) reported its Q3 2024 financial results, showing a 11.7% increase in total net sales to $179.6 million. The Grown segment saw a 13.3% rise in net sales to $163.2 million, while the Prepared segment experienced a 2.4% decrease to $16.4 million. Despite this growth, total gross profit decreased by 8.7% to $20.1 million. The company reported net income of $5.4 million, or $0.30 per diluted share, compared to $8.7 million, or $0.48 per diluted share, in the prior year quarter. Adjusted net income was $10.2 million, or $0.57 per diluted share. Notably, Calavo increased its quarterly dividend by $0.10 to $0.20 per share.

Calavo Growers, Inc. (CVGW) ha riportato i risultati finanziari del terzo trimestre 2024, mostrando un aumento del 11.7% delle vendite nette totali a 179.6 milioni di dollari. Il segmento Grown ha registrato un aumento del 13.3% delle vendite nette a 163.2 milioni di dollari, mentre il segmento Prepared ha visto un calo del 2.4% a 16.4 milioni di dollari. Nonostante questa crescita, il profitto lordo totale è diminuito dell'8.7% a 20.1 milioni di dollari. L'azienda ha riportato un reddito netto di 5.4 milioni di dollari, ovvero 0.30 dollari per azione diluita, rispetto a 8.7 milioni di dollari, o 0.48 dollari per azione diluita, nell'anno precedente. Il reddito netto rettificato è stato di 10.2 milioni di dollari, ovvero 0.57 dollari per azione diluita. È degno di nota che Calavo ha aumentato il suo dividendo trimestrale di 0.10 dollari a 0.20 dollari per azione.

Calavo Growers, Inc. (CVGW) anunció sus resultados financieros del tercer trimestre de 2024, mostrando un aumento del 11.7% en las ventas netas totales a 179.6 millones de dólares. El segmento Grown vio un aumento del 13.3% en las ventas netas a 163.2 millones de dólares, mientras que el segmento Prepared experimentó una disminución del 2.4% a 16.4 millones de dólares. A pesar de este crecimiento, el beneficio bruto total disminuyó un 8.7% a 20.1 millones de dólares. La empresa reportó un ingreso neto de 5.4 millones de dólares, o 0.30 dólares por acción diluida, en comparación con 8.7 millones de dólares, o 0.48 dólares por acción diluida, en el trimestre del año anterior. El ingreso neto ajustado fue de 10.2 millones de dólares, o 0.57 dólares por acción diluida. Cabe destacar que Calavo aumentó su dividendo trimestral en 0.10 dólares a 0.20 dólares por acción.

Calavo Growers, Inc. (CVGW)는 2024년 3분기 재무 결과를 발표하며 총 순매출이 11.7% 증가한 1억 7,960만 달러를 기록했다고 전했습니다. 'Grown' 부문은 순매출이 13.3% 증가하여 1억 6,320만 달러를 기록했으며, 'Prepared' 부문은 2.4% 감소하여 1,640만 달러를 기록했습니다. 이러한 성장에도 불구하고 총 총 이익은 8.7% 감소하여 2,010만 달러로 나타났습니다. 회사는 5.4백만 달러의 순이익, 즉 희석 주식당 0.30달러를 보고했으며, 이는 전년도 동기 대비 8.7백만 달러, 즉 0.48달러의 감소입니다. 조정된 순이익은 1천만 2백만 달러, 즉 희석 주식당 0.57달러로 나타났습니다. 특히, Calavo는 분기 배당금을 0.10달러 인상하여 주식당 0.20달러로 조정했습니다.

Calavo Growers, Inc. (CVGW) a annoncé ses résultats financiers pour le troisième trimestre 2024, montrant une augmentation de 11,7% des ventes nettes totales à 179,6 millions de dollars. Le segment Grown a connu une augmentation de 13,3% des ventes nettes à 163,2 millions de dollars, tandis que le segment Prepared a enregistré une diminution de 2,4% à 16,4 millions de dollars. Malgré cette croissance, le bénéfice brut total a diminué de 8,7% pour atteindre 20,1 millions de dollars. L'entreprise a déclaré un bénéfice net de 5,4 millions de dollars, soit 0,30 dollars par action diluée, comparé à 8,7 millions de dollars, soit 0,48 dollars par action diluée, au cours du trimestre de l'année précédente. Le bénéfice net ajusté était de 10,2 millions de dollars, soit 0,57 dollars par action diluée. Il convient de noter que Calavo a augmenté son dividende trimestriel de 0,10 dollars à 0,20 dollars par action.

Calavo Growers, Inc. (CVGW) hat seine finanziellen Ergebnisse für das 3. Quartal 2024 veröffentlicht und zeigt einen Umsatzanstieg von 11.7% auf insgesamt 179.6 Millionen Dollar. Der Grown-Segment verzeichnete einen Anstieg der Nettoumsätze um 13.3% auf 163.2 Millionen Dollar, während der Prepared-Segment einen Rückgang um 2.4% auf 16.4 Millionen Dollar erfuhr. Trotz dieses Wachstums ging der Gesamterlös um 8.7% auf 20.1 Millionen Dollar zurück. Das Unternehmen berichtete von einem Nettogewinn von 5.4 Millionen Dollar, also 0.30 Dollar pro verwässerter Aktie, verglichen mit 8.7 Millionen Dollar oder 0.48 Dollar pro verwässerter Aktie im Vorjahresquartal. Der bereinigte Nettogewinn betrug 10.2 Millionen Dollar, oder 0.57 Dollar pro verwässerter Aktie. Bemerkenswert ist, dass Calavo seine Quartalsdividende um 0.10 Dollar auf 0.20 Dollar pro Aktie erhöht hat.

Positive
  • Total net sales increased 11.7% to $179.6 million
  • Grown segment net sales increased 13.3% to $163.2 million
  • Adjusted net income increased to $10.2 million, or $0.57 per diluted share
  • Quarterly dividend doubled to $0.20 per share
  • Reduced net debt position by $9.5 million during the third quarter
  • Strong avocado margins despite temporary supply disruptions from Mexico
  • Guacamole business volume increased 7%
Negative
  • Total gross profit decreased 8.7% to $20.1 million
  • Net income decreased to $5.4 million from $8.7 million in the prior year quarter
  • Prepared segment net sales decreased 2.4% to $16.4 million
  • $4.2 million foreign currency remeasurement loss compared to a $2.0 million gain in the prior year quarter
  • Higher fruit input costs impacted guacamole business margins

Insights

Calavo Growers' Q3 2024 results show mixed performance. The 11.7% increase in total net sales to $179.6 million is positive, driven by a 13.3% growth in the Grown segment. However, the 8.7% decrease in total gross profit to $20.1 million is concerning. The company's ability to maintain strong avocado margins despite supply disruptions from Mexico demonstrates operational resilience.

The increase in adjusted EBITDA to $13.5 million from $13.0 million year-over-year is a positive sign of operational efficiency. The doubling of the quarterly dividend to $0.20 per share signals management's confidence in future cash flows. The sale of the Fresh Cut business for $83.0 million and subsequent debt retirement strengthens the balance sheet, providing flexibility for future investments and shareholder returns.

The avocado market dynamics are important for Calavo's performance. The 25% increase in average selling price of avocados, coupled with improved margins, offset the 4.5% volume decline. This suggests strong demand and pricing power in the avocado market. However, the temporary supply disruptions from Mexico highlight the vulnerability of the supply chain.

The 7% volume increase in the guacamole business despite higher fruit input costs demonstrates market expansion opportunities. The planned launch of innovative guacamole products in Q4 could drive growth in fiscal 2025. The company's focus on its core avocado and guacamole businesses, post-divestiture of Fresh Cut, aligns with market trends favoring healthy, plant-based foods.

The $4.2 million foreign currency remeasurement loss compared to a $2.0 million gain last year highlights significant forex exposure. This volatility could impact future earnings if not properly hedged. The ongoing SEC and DOJ investigation into potential FCPA issues poses regulatory and reputational risks that investors should monitor closely.

The reduction in net debt by $9.5 million during Q3 and subsequent debt retirement using Fresh Cut sale proceeds significantly improves the company's financial position. This lowers interest expenses and financial risk. However, the $9.3 million goodwill impairment charge related to the Fresh Cut business sale indicates potential overvaluation of assets, which warrants scrutiny of future acquisition strategies and valuation practices.

SANTA PAULA, Calif., Sept. 09, 2024 (GLOBE NEWSWIRE) -- Calavo Growers, Inc. (Nasdaq-GS: CVGW), a global leader in the processing and distribution of avocados, tomatoes, papayas, and guacamole, today reported its financial results for the fiscal third quarter ended July 31, 2024.

Third Quarter Financial Overview
Introductory Note: In the first quarter of 2024, we concluded that the Fresh Cut (formerly RFG) business meets the requirements to be classified as held for sale and discontinued operations. As a result, the financial results of that business are reported as discontinued operations in this press release. The divestiture of the Fresh Cut business occurred on August 15, 2024. Prior to the decision to divest our Fresh Cut business, the Company’s Prepared reporting segment included the Fresh Cut business unit and our guacamole business. The Fresh Cut business unit is no longer included in our Prepared business segment in this press release. Retrospective reclassifications have been made to prior period financial statements and commentary in this press release to present the Fresh Cut business unit as a discontinued operation. Unless otherwise noted, amounts and commentary included in this press release relate to our continuing operations.

  • Total net sales increased 11.7% to $179.6 million from the prior year quarter
    • Grown segment net sales increased 13.3% to $163.2 million
    • Prepared segment net sales decreased 2.4% to $16.4 million
  • Total gross profit decreased 8.7% to $20.1 million from the prior year quarter
    • Grown segment gross profit decreased $1.2 million to $18.2 million
    • Prepared segment gross profit decreased $0.8 million to $1.9 million
  • Net income of $5.4 million, or $0.30 per diluted share, compared to net income of $8.7 million, or $0.48 per diluted share for the prior year quarter
  • Adjusted net income of $10.2 million, or $0.57 per diluted share, compared to adjusted net income of $7.7 million, or $0.43 per diluted share for the prior year quarter
  • Adjusted EBITDA of $13.5 million compared to $13.0 million for the prior year quarter

Adjusted net income (loss), adjusted net income (loss) per diluted share, and adjusted EBITDA are non-GAAP financial measures. See “Non-GAAP Financial Measures” below.

Third Quarter Highlights

  • Third consecutive quarter of year-over-year improvement in adjusted EBITDA
  • Grown gross profit performance is attributed to strong avocado margins despite temporary supply disruptions from Mexico
  • Results include $4.2 million of foreign currency remeasurement loss compared to a $2.0 million gain in the prior year quarter
  • Reduced net debt position by $9.5 million during the third quarter; subsequently retired remaining debt balance using Fresh Cut sale proceeds
  • The Board of Directors increased the cash dividend by $0.10 per share to $0.20 per share to be paid on October 30, 2024, to shareholders of record on October 2, 2024

Management Commentary
“Our third quarter results reflect continued momentum in our flagship avocado business,” said Lee Cole, President and Chief Executive Officer of Calavo Growers, Inc. “Despite temporary industry supply disruptions from Mexico during the quarter, we generated strong financial results due to our operational flexibility and our resilient team. Although our guacamole business experienced headwinds from higher fruit input costs compared to the third quarter last year, our volume increased 7% due to our focus on growing the business. I am also pleased to share that we will be launching some exciting, innovative guacamole products during the fourth quarter.”

“Our momentum has carried into the fourth quarter, and we look forward to delivering solid financial results for the fourth quarter and fiscal year. We intend to deploy the cash that we generated from the sale of our Fresh Cut business by investing in our core avocado and guacamole businesses and by returning cash to shareholders over time. Given the renewed focus on our core operations, improvements in our financial performance, and our confidence in our operational execution going forward, I am pleased to share that we have doubled the quarterly dividend to $0.20 per share.”

Third Quarter 2024 Consolidated Financial Review for Continuing Operations
Total net sales for the third quarter were $179.6 million, compared to $160.9 million for the same period last year, an increase of 11.7%. Grown segment sales increased 13.3%, and Prepared segment sales decreased 2.4%. The average selling price of avocados in the Grown segment increased by 25% compared to the prior year.

Gross profit for the third quarter was $20.1 million, or 11.2% of net sales, compared to $22.0 million and 13.7%, respectively, for the same period last year. Foreign currency remeasurement gain and loss impacts have been reclassified from cost of sales to a separate financial statement line item on the consolidated statements of operations and have been included as an adjustment to non-GAAP earnings measures for the current quarter and for prior period results. We have begun adjusting our non-GAAP earnings to exclude foreign currency remeasurement gains and losses given volatility in foreign currency. See non-GAAP financial measures below.

Selling, general and administrative (SG&A) expenses for the third quarter totaled $10.5 million, or 5.9% of net sales, compared to $13.0 million and 8.1% of net sales for the same period last year. The decrease versus the prior year was driven primarily by lower compensation expenses, including a variable compensation accrual in the prior year, while non-recurring professional fees associated with our internal investigation increased expenses by $1.4 million. SG&A expenses in the third quarter last year included $1.2 million related to severance and restructuring.

Net income for the third quarter was $5.4 million, or $0.30 per diluted share. This compares with net income of $8.7 million, or $0.48 per diluted share, for the same period last year. The change in net income compared to the prior year is primarily driven by the change in foreign currency remeasurement from gain to loss and the income tax benefit.

Adjusted net income was $10.2 million, or $0.57 per diluted share, compared to adjusted net income of $7.7 million, or $0.43 per diluted share last year.

Adjusted EBITDA was $13.5 million compared to $13.0 million for the same period last year.

On August 15, 2024, the Company closed the sale of its Fresh Cut business for $83.0 million, subject to various closing adjustments. Due to the sale, we evaluated whether it was more likely than not that the carrying value of the Fresh Cut business exceeded its fair value. We determined that it was more likely than not that the fair value was less than the carrying amount of net assets as of July 31, 2024. Based on the results of the impairment analysis, we recorded a goodwill impairment charge of $9.3 million during the quarter ended July 31, 2024, which is included in discontinued operations. In conjunction with the sale, we incurred transaction costs and settled certain retained liabilities, which were primarily labor related, namely for accumulated paid-time-off for transferring employees. The sale is also expected to generate a tax gain driven by book to tax timing differences. Inclusive of the projected impacts of transaction costs, certain retained liabilities, and taxes, we estimate after-tax net cash proceeds from the sale to approximate $75.0 million.

As previously disclosed, the company voluntarily disclosed to the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) an internal investigation into potential issues under the FCPA. The company currently is cooperating with, and responding to requests from, the SEC and the DOJ.

Balance Sheet and Liquidity
The Company ended the quarter with $39.0 million of net debt, which included $33.5 million of borrowings under its credit facility and $6.6 million of other long-term obligations and finance leases, less cash and cash equivalents of $1.1 million. The Company reduced its net debt by $9.5 million and had approximately $57.3 million of liquidity as of July 31, 2024. Subsequent to quarter end, we retired the remaining debt balance with proceeds from the sale of the Fresh Cut business.

Segment Performance
Grown
Grown segment gross profit was $18.2 million, a decrease of $1.2 million from the prior year quarter. Avocado prices increased by 25% compared to the third quarter last year while avocado margins improved, which helped to offset an avocado volume decline of 4.5%. The volume decline was partly attributed to the impact of supply disruptions from Mexico during the quarter, which have since been resolved. Our skilled team harnessed our operational flexibility to mitigate the impact of the disruptions for our customers and investors. Gross profit attributed to tomatoes declined versus the prior year on lower volume.

Prepared
Prepared segment gross profit was $1.9 million, a decrease of $0.8 million from the third quarter last year. Gross margin declined to 12% from 16%, primarily driven by higher fruit input costs compared to the third quarter last year. Our efforts earlier in the year to build inventory using lower cost fruit helped to mitigate the impact of higher fruit costs during the quarter. We expect margins in the guacamole business to improve in the fourth quarter as input costs recede. In addition, we plan to launch some innovative new guacamole products during the fiscal fourth quarter that we expect will support growth in fiscal 2025. Overall, we expect sequential improvement in our Prepared business in the fiscal fourth quarter as compared to the third quarter.

Non-GAAP Financial Measures
This press release includes non-GAAP measures EBITDA from continuing operations, adjusted EBITDA from continuing operations, adjusted net income (loss) from continuing operations and adjusted net income (loss) from continuing operations per diluted share, which are not prepared in accordance with U.S. generally accepted accounting principles, or “GAAP.” EBITDA from continuing operations is defined as net income (loss) from continuing operations attributable to Calavo Growers, Inc. excluding (1) interest income and expense, (2) income tax (benefit) provision, (3) depreciation and amortization and (4) stock-based compensation expense. Adjusted EBITDA is EBITDA with further adjustments for (1) non-cash net losses (income) recognized from unconsolidated entities, (2) goodwill impairment, (3) write-off of long-lived assets, (4) acquisition-related costs, (5) restructuring-related costs, including certain severance costs, (6) certain litigation and other related costs, (7) foreign currency gain (loss) and (8) one-time items. Adjusted EBITDA from continuing operations is a primary metric by which management evaluates the operating performance of the business, on which certain operating expenditures and internal budgets are based. Additionally, the Company’s senior management is compensated in part on the basis of Adjusted EBITDA. The adjustments to calculate EBITDA from continuing operations and adjusted EBITDA from continuing operations are items recognized and recorded under GAAP in particular periods but might be viewed as not necessarily coinciding with the underlying business operations for the periods in which they are so recognized and recorded.

Adjusted net income (loss) from continuing operations is defined as net income (loss) from continuing operations attributable to Calavo Growers, Inc. excluding (1) non-cash net losses recognized from unconsolidated entities, (2) goodwill impairment, (3) write-off of long-lived assets, (4) acquisition-related costs, (5) restructuring-related costs, including certain severance costs, (6) certain litigation and other related costs, (7) foreign currency loss (gain) and (8) one-time items. Adjusted net income (loss) from continuing operations and the related measure of adjusted net income (loss) from continuing operations per diluted share exclude certain items that are recognized and recorded under GAAP in particular periods but might be viewed as not necessarily coinciding with the underlying business operations for the periods in which they are so recognized and recorded. We believe adjusted net income (loss) from continuing operations affords investors a different view of the overall financial performance of the Company than adjusted EBITDA and the GAAP measure of net income (loss) attributable from continuing operations to Calavo Growers, Inc.

Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the financial tables below. Items are considered one-time in nature if they are non-recurring, infrequent or unusual and have not occurred in the past two years or are not expected to recur in the next two years, in accordance with SEC rules. Non-GAAP information should be considered as supplemental in nature and not as a substitute for, or superior to, any measure of performance prepared in accordance with GAAP. None of these metrics are presented as measures of liquidity. The way the Company measures EBITDA from continuing operations, adjusted EBITDA from continuing operations and adjusted net income (loss) from continuing operations may not be comparable to similarly titled measures presented by other companies and may not be identical to corresponding measures used in Company agreements.

About Calavo Growers, Inc.
Calavo Growers, Inc. (Nasdaq: CVGW) is a global leader in the processing and distribution of avocados, tomatoes, papayas and guacamole. Calavo products are sold under the trusted Calavo brand name, proprietary sub-brands, private label and store brands. Founded in 1924, Calavo has a rich culture of innovation, sustainable practices and market growth. The company serves retail grocery, foodservice, club stores, mass merchandisers, food distributors and wholesalers worldwide. Calavo is headquartered in Santa Paula, California, with facilities throughout the U.S. and Mexico. Learn more about The Family of Fresh™ at calavo.com.

Safe Harbor Statement
This press release contains statements relating to future events and results of Calavo (including financial projections and business trends) that are “forward-looking statements,” as defined in the Private Securities Litigation Reform Act of 1995, that involve risks, uncertainties, and assumptions. These statements are based on our current expectations and are not promises or guarantees. If any of the risks or uncertainties materialize or the assumptions prove incorrect, the results of Calavo may differ materially from those expressed or implied by such forward-looking statements and assumptions. The use of words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans” and “believes,” among others, generally identify forward-looking statements.

Risks and uncertainties that may cause our actual results to be materially different from any future results expressed or implied by the forward-looking statements include, but are not limited to, the following: the ability of our management team to work together successfully; the impact of operational and restructuring initiatives on our business, results of operations, and financial condition, including uncertainty as to whether the desired effects will be achieved; the impact of weather on market prices and operational costs; seasonality of our business; sensitivity of our business to changes in market prices of avocados and other agricultural products and other raw materials including fuel, packaging and paper; potential disruptions to our supply chain; risks associated with potential future acquisitions, including integration; potential exposure to data breaches and other cyber-attacks on our systems or those of our suppliers or customers; dependence on large customers; dependence on key personnel and access to labor necessary for us to render services; susceptibility to wage inflation; potential for labor disputes; reliance on co-packers for a portion of our production needs; competitive pressures, including from foreign growers; risks of recalls and food-related injuries to our customers; changing consumer preferences; the impact of environmental regulations, including those related to climate change; risks associated with the environment and climate change, especially as they may affect our sources of supply; our ability to develop and transition new products and services and enhance existing products and services to meet customer needs, including but not limited to the new guacamole products referenced in this press release; risks associated with doing business internationally (including possible restrictive U.S. and foreign governmental actions, such as restrictions on transfers of funds and trade protection measures such as import/export/customs duties, tariffs and/or quotas and currency fluctuations); risks associated with receivables from, loans to and/or equity investments in unconsolidated entities; volatility in the value of our common stock; the impact of macroeconomic trends and events; the effects of increased interest rates on our cost of borrowing and consumer purchasing behavior; the resolution of pending investigations, legal claims and tax disputes, including an assessment imposed by the Mexican Tax Administrative Service (the “SAT”) and our defenses against collection activities commenced by the SAT; the impact of other pending and potential internal and external investigations and legal claims; and our ability to realize the expected expense savings from the sale of the Fresh Cut business.

For a further discussion of these risks and uncertainties and other risks and uncertainties that we face, please see the risk factors described in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and any subsequent updates that may be contained in our Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. Forward-looking statements contained in this press release are made only as of the date of this press release, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Contact
Julie Kegley, Senior Vice President
Financial Profiles, Inc.
calavo@finprofiles.com
310-622-8246


CALAVO GROWERS, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)

 
  July 31,  October 31, 
  2024 2023
      
Assets                  
Current assets:      
Cash and cash equivalents $1,126 $2,091
Restricted cash    761
Accounts receivable, net of allowances of $3,253 (2024) and $3,364 (2023)  51,845  33,897
Inventories  31,822  31,571
Prepaid expenses and other current assets  8,855  11,739
Advances to suppliers  12,828  14,684
Current assets held for sale  128,213  37,533
Income taxes receivable  3,611  1,094
Total current assets  238,300  133,370
Property, plant, and equipment, net  55,894  60,924
Operating lease right-of-use assets  19,244  18,357
Investments in unconsolidated entities  2,528  2,902
Deferred income tax assets  3,010  3,010
Goodwill  10,211  10,211
Non-current assets held for sale    105,424
Intangibles, net  275  275
Other assets  52,964  52,381
  $382,426 $386,854
Liabilities and shareholders' equity      
Current liabilities:      
Payable to growers $26,377 $14,788
Trade accounts payable  9,819  5,097
Accrued expenses  16,962  15,809
Current liabilities held for sale  47,254  29,911
Other current liabilities  11,000  11,000
Current portion of term loan  814  647
Current portion of operating leases  3,480  3,663
Current portion of long-term obligations and finance leases  886  831
Total current liabilities  116,592  81,746
Long-term liabilities:      
Borrowings pursuant to line of credit, long-term  29,919  35,024
Long-term liabilities held for sale    29,295
Long-term portion of term loan  2,804  3,416
Long-term portion of operating leases  18,242  17,328
Long-term portion of obligations and finance leases  4,514  4,645
Deferred income tax liabilities  746  746
Other long-term liabilities  4,432  4,425
Total long-term liabilities  60,657  94,879
Commitments and contingencies      
Shareholders' equity:      
Total shareholders' equity  205,177  210,229
  $382,426 $386,854

 

CALAVO GROWERS, INC. 
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) 
(in thousands, except share and per share amounts)
     
  Three months ended  Nine months ended
  July 31,  July 31, 
  2024  2023  2024  2023 
           
Net sales    $179,596     $160,856     $491,585     $451,898 
Cost of sales  159,503   138,852   440,071   403,554 
Gross profit  20,093   22,004   51,514   48,344 
Selling, general and administrative  10,510   12,994   36,993   37,997 
Expenses (recovery) related to Mexican tax matters  225   (1,203)  810   1,231 
Operating income  9,358   10,213   13,711   9,116 
Foreign currency gain (loss)  (4,203)  2,019   (2,799)  4,435 
Interest expense  (833)  (766)  (2,619)  (1,387)
Other income, net  181   177   901   824 
Income before income taxes and loss from unconsolidated entities  4,503   11,643   9,194   12,988 
Income tax benefit (expense)  1,441   (2,408)  478   (2,851)
Net loss from unconsolidated entities  (579)  (498)  (374)  (398)
Net income from continuing operations  5,365   8,737   9,298   9,739 
Net loss from discontinued operations  (6,127)  (2,029)  (10,218)  (9,786)
Net income (loss)  (762)  6,708   (920)  (47)
Add: Net loss (income) attributable to noncontrolling interest  30   (82)  (17)  (390)
Net income (loss) attributable to Calavo Growers, Inc. $(732) $6,626  $(937) $(437)
             
Calavo Growers, Inc.’s net income (loss) per share:            
Basic            
Continuing Operations $0.30  $0.49  $0.52  $0.53 
Discontinued Operations $(0.34) $(0.11) $(0.57) $(0.55)
Net income (loss) attributable to Calavo Growers, Inc $(0.04) $0.37  $(0.05) $(0.02)
             
Diluted            
Continuing Operations $0.30  $0.48  $0.52  $0.52 
Discontinued Operations $(0.34) $(0.11) $(0.57) $(0.55)
Net income (loss) attributable to Calavo Growers, Inc $(0.04) $0.37  $(0.05) $(0.02)
             
Number of shares used in per share computation:            
Basic  17,801   17,756   17,800   17,746 
Diluted  17,842   17,856   17,848   17,835 

CALAVO GROWERS, INC. 
NET SALES AND GROSS PROFIT BY BUSINESS SEGMENT (UNAUDITED) 
(in thousands) 

Prior to the decision to divest our Fresh Cut business (formerly RFG), the Company’s Prepared reporting segment included the Fresh Cut business unit and our guacamole business. As a result, the Fresh Cut business unit is no longer included in our Prepared business segment and is not included in the tables below. All segment information included herein reflects these changes.

  Grown Prepared Total 
  (All amounts are presented in thousands) 
Three months ended July 31, 2024          
Net sales $163,218 $16,378 $179,596 
Cost of sales  145,043  14,460  159,503 
Gross profit $18,175 $1,918 $20,093 
           
Three months ended July 31, 2023          
Net sales $144,069 $16,787 $160,856 
Cost of sales  124,734  14,118  138,852 
Gross profit $19,335 $2,669 $22,004 
           


           
               
  Grown Prepared Total 
  (All amounts are presented in thousands) 
Nine months ended July 31, 2024          
Net sales $442,999 $48,586 $491,585 
Cost of sales  402,041  38,030  440,071 
Gross profit $40,958 $10,556 $51,514 
           
Nine months ended July 31, 2023          
Net sales $402,119 $49,779 $451,898 
Cost of sales  363,120  40,434  403,554 
Gross profit $38,999 $9,345 $48,344 
           

For the three months ended July 31, 2023, intercompany sales and cost of sales of $0.5 million between Grown products and Prepared products were eliminated. For the nine months ended July 31 2024 and 2023, intercompany sales and cost of sales of $0.6 million and $1.2 million between Grown products and Prepared products were eliminated, respectively.

CALAVO GROWERS, INC. 
RECONCILIATION OF ADJUSTED NET INCOME FROM CONTINUING OPERATIONS
AND EPS FROM CONTINUING OPERATIONS (UNAUDITED) 
(in thousands, except share and per share amounts) 

The following table presents adjusted net income (loss) from continuing operations and adjusted diluted EPS from continuing operations, each a non-GAAP measure, and reconciles them to net income (loss) from continuing operations., and Diluted EPS from continuing operations, which are the most directly comparable GAAP measures. See “Non-GAAP Financial Measures” earlier in this release. 

  Three months ended
July 31,
 Nine months ended
July 31,
     2024     2023     2024     2023 
Net income from continuing operations $5,365  $8,737  $9,298  $9,739 
Add: Net loss (income) attributable to noncontrolling interest  30   (82)  (17)  (390)
Net income from continuing operations attributable to Calavo Growers, Inc.  5,395   8,655   9,281   9,349 
Non-GAAP adjustments:                
Non-cash loss recognized from unconsolidated entities (a)  579   498   374   398 
Impairment, losses and charges related to property, plant and equipment (b)           235 
Restructure costs - consulting, management recruiting and severance (c)     1,426   1,037   5,186 
Expenses (recovery) related to Mexican tax matters (d)  225   (1,203)  810   1,231 
Legal settlement and related expenses (e)           700 
Professional fees related to internal investigation (f)  1,395      6,431    
Foreign currency loss (gain) (g)  4,203   (2,019)  2,799   (4,435)
Tax impact of adjustments (h)  (1,601)  325   (2,863)  (829)
Adjusted net income from continuing operations $10,197  $7,682  $17,869  $11,835 
             
Calavo Growers, Inc.’s continuing operations per share:                
Diluted EPS from continuing operations (GAAP) $0.30  $0.48  $0.52  $0.53 
Adjusted net income from continuing operations per diluted share $0.57  $0.43  $1.00  $0.66 
             
Number of shares used in per share computation:                
Diluted  17,842   17,856   17,848   17,835 

 

(a)For the three months ended July 31, 2024 and 2023, we realized losses of $0.6 million and losses of $0.5 million from Agricola Don Memo. For the nine months ended July 31, 2024 and 2023, we realized losses of $0.4 million and losses of $0.4 million from Agricola Don Memo.
  
(b)On April 1, 2023, we completed the divesture of our salsa business in our Prepared segment and incurred $0.2 million in losses related to the disposal of property, plant and equipment.
  
(c)For the nine months ended July 31, 2024, we incurred $0.9 million in severance and other costs and $0.1 million in stock-based compensation related to the departure of certain members of management.
  
 For the three and nine months ended July 31, 2023, we recorded $0.1 million and $0.8 million in severance costs as part of U.S. restructuring efforts, respectively. For the three and nine months ended July 31, 2023, we incurred $0.9 million in severance and other costs and $0.3 million in stock-based compensation related to the departure of certain members of management. In addition, for the nine months ended July 31, 2023, we incurred $1.2 million in severance and other costs and $1.2 million in stock-based compensation related to the departure of our former Chief Executive Officer. Additionally, for the nine months ended July 31, 2023, we incurred $0.6 million related to the divesture of Salsa Lisa.
  
(d)For the three and nine months ended July 31, 2024, we incurred $0.2 million and $0.8 million of professional fees related to the Mexican tax matters, respectively. For the three and nine months ended July 31, 2023, we recognized a reserve of $0.5 million and $1.6 million related to the Mexican tax matters, respectively.
  
 For the three and nine months ended July 31,2023, we recorded a recovery of $1.7 million related to the interest and inflationary adjustments related to an IVA repayment from Mexican Tax Authority. For the nine months ended July 31, 2023, we recognized a reserve of $1.4 million related to the collectability of IVA receivables.
  
(e)For the three and nine months ended July 31, 2023, we accrued $0.6 million in a legal settlement from a dispute from over five years ago connected to an old unused distribution agreement that was entered into over a decade ago. This legal settlement was considered out of the ordinary due to the length it took to settle and since we have not done business with this party for many years. There are no other similar matters outstanding. In addition, we incurred $0.1 million in associated legal fees.
  
(f)For the three and nine months ended July 31, 2024, we incurred $1.4 million and $6.4 million of professional fee expenses related to the internal investigation, respectively.
  
(g)Due to the change in the Mexican peso to the U.S. dollar exchange rates, foreign currency remeasurement losses, net of gains, for the three and nine months ended July 31, 2024 were $4.2 million and $2.8 million, respectively. Foreign currency remeasurement gains, net of losses, for the three and nine months ended July 31, 2023 were $2.0 million and $4.4 million, respectively. Foreign currency remeasurement gain and loss impacts have been included as an adjustment to non-GAAP earnings measures for the current quarter and for prior period results. We have begun adjusting our non-GAAP earnings to exclude foreign currency remeasurement gains and losses due to volatility in foreign currency.
  
(h)Tax impact of non-GAAP adjustments are based on effective year-to-date tax rates.



 CALAVO GROWERS, INC. 
RECONCILIATION OF EBITDA FROM CONTINUING OPERATIONS AND ADJUSTED EBITDA FROM CONTINUING OPERATIONS (UNAUDITED) 
(in thousands) 

The following table presents EBITDA from continuing operations and adjusted EBITDA from continuing operations, each a non-GAAP measure, and reconciles them to net income (loss) from continuing operations, which is the most directly comparable GAAP measure. See “Non-GAAP Financial Measures” earlier in this release. 

     Three months ended
July 31,
 Nine months ended
July 31,
     2024     2023     2024     2023 
Net income from continuing operations $5,365  $8,737  $9,298  $9,739 
Add: Net loss (income) attributable to noncontrolling interest  30   (82)  (17)  (390)
Net income from continuing operations attributable to Calavo Growers, Inc.  5,395   8,655   9,281   9,349 
Interest Income  (100)  (117)  (340)  (363)
Interest Expense  833   766   2,619   1,387 
Provision for Income Taxes  (1,441)  2,408   (478)  2,851 
Depreciation and Amortization  2,011   2,024   6,121   6,048 
Stock-Based Compensation  388   893   1,736   4,198 
EBITDA from continuing operations $7,086  $14,629  $18,939  $23,470 
             
Adjustments:                
Non-cash (income) loss recognized from unconsolidated entities (a)  579   498   374   (100)
Impairment, losses and charges related to property, plant and equipment (b)           235 
Restructure costs - consulting and management recruiting and severance (c)     1,096   967   3,626 
Expenses (recovery) related to Mexican tax matters (d)  225   (1,203)  810   1,231 
Legal settlement and related expenses (e)           700 
Professional fees related to internal investigation (f)  1,395      6,431    
Foreign currency loss (gain) (g)  4,203   (2,019)  2,799   (4,435)
Adjusted EBITDA from continuing operations $13,488  $13,001  $30,320  $24,727 

 

See prior page for footnote references


FAQ

What was Calavo Growers' (CVGW) total net sales for Q3 2024?

Calavo Growers' total net sales for Q3 2024 were $179.6 million, an increase of 11.7% from the prior year quarter.

How much did Calavo Growers (CVGW) increase its quarterly dividend in Q3 2024?

Calavo Growers increased its quarterly dividend by $0.10 to $0.20 per share, effectively doubling the dividend.

What was Calavo Growers' (CVGW) net income for Q3 2024?

Calavo Growers reported a net income of $5.4 million, or $0.30 per diluted share, for Q3 2024.

How did Calavo Growers' (CVGW) Grown segment perform in Q3 2024?

Calavo Growers' Grown segment net sales increased 13.3% to $163.2 million in Q3 2024.

What was the impact of foreign currency remeasurement on Calavo Growers (CVGW) in Q3 2024?

Calavo Growers experienced a $4.2 million foreign currency remeasurement loss in Q3 2024, compared to a $2.0 million gain in the prior year quarter.

Calavo Growers Inc

NASDAQ:CVGW

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477.76M
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73.13%
3.09%
Food Distribution
Consumer Defensive
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United States of America
SANTA PAULA