CALAVO GROWERS, INC_January 31, 2025

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended January 31, 2025

☐

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

For the transition period from ______________________ to ______________________

Commission File Number: 000-33385

CALAVO GROWERS, INC.

(Exact name of registrant as specified in its charter)

California

33-0945304

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer Identification No.)


1141-A Cummings Road, Santa Paula, California		93060
(Address of principal executive offices)		(Zip Code)

(805) 525-1245

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	CVGW	Nasdaq Global Select Market

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☒	Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ☐ No ☒

Registrant's number of shares of common stock outstanding as of February 28, 2025 was 17,836,507.

Table of Contents

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2, contains statements relating to future events and results of Calavo Growers, Inc. and its consolidated subsidiaries (referred to in this report as “Calavo,” the “Company,” “we,” “us” or “our”), including certain 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 ever 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. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including, but not limited to, any projections of revenue, gross profit, expenses, income/(loss) from unconsolidated entities, earnings, earnings per share, tax provisions, cash flows and currency exchange rates; the impact of acquisitions or debt or equity investments or other financial items; any statements of the plans, strategies and objectives of management for future operations, including execution of restructuring and integration (including information technology systems integration) plans; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on Calavo and its financial performance, whether attributable to Calavo or any of its unconsolidated entities; any statements regarding pending investigations, legal claims or tax disputes; any statements of expectation or belief; any statements about future risks associated with doing business internationally (including possible restrictive U.S. and foreign governmental actions, such as restrictions on transfers of funds, restrictions as a result of trade protection measures such as import/export/customs duties, tariffs and/or quotas); any risks associated with receivables from and/or equity investments in unconsolidated entities; system security risk and cyber-attacks and any statements of assumptions underlying any of the foregoing, the impact of newly imposed U.S. tariffs on imports from Mexico, including the potential effects on supply chain costs, product pricing, and customer demand, risks related to increased working capital requirements and cash flow timing due to front-loaded tariff payments on imported goods, including potential impacts on liquidity management, ongoing efforts to recover additional VAT refunds from the Mexican Tax Administrative Service (SAT), including the risk that certain claims may not be approved, as well as potential changes in Mexico’s tax policies that could impact our financial position. 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; and potential long-term adverse effects from reducing capital expenditures; 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; risks associated with doing business internationally (including possible restrictive U.S. and foreign governmental actions, such as restrictions on transfers of funds and restrictions as a result of 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 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.

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 for the fiscal year ended October 31, 2024 filed with the Securities and Exchange Commission and any subsequent updates that may be contained in our Quarterly Reports on Form 10-Q (including this Quarterly Report on Form 10-Q) and other filings with the Securities and Exchange Commission. Forward-looking statements contained in this Quarterly Report on Form 10-Q are made only as of the date of this report. We undertake no obligation to update or revise these statements, except as required by applicable securities laws.

Table of Contents

CALAVO GROWERS, INC.

INDEX

		PAGE

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements:

	Condensed Consolidated Balance Sheets –January 31, 2025 and October 31, 2024 (Unaudited)	4

	Condensed Consolidated Statements of Operations –Three Months Ended January 31, 2025 and 2024 (Unaudited)	5

	Condensed Consolidated Statements of Cash Flows – January 31, 2025 and 2024 (Unaudited)	6

	Condensed Consolidated Statements of Shareholders’ Equity – Three Months Ended January 31, 2025 and 2024 (Unaudited)	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25

Item 4.	Controls and Procedures	25

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	26

Item 1A.	Risk Factors	26

Item 5.	Other Information	28

Item 6.	Exhibits	28

	Signatures	29

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CALAVO GROWERS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands)


	January 31,		October 31,
	2025		2024
Assets
Current assets:
Cash and cash equivalents	$	48,490	$	57,031
Accounts receivable, net of allowances of $3,324 (2025) and $3,624 (2024)		47,088		41,909
Inventories		39,873		34,157
Prepaid expenses and other current assets		11,514		9,976
Advances to suppliers		10,275		14,570
Income taxes receivable		936		936
Total current assets		158,176		158,579
Property, plant, and equipment, net		52,519		54,200
Operating lease right-of-use assets		17,471		18,316
Investments in unconsolidated entities		3,286		2,424
Deferred income tax assets		7,473		7,473
Goodwill		10,211		10,211
Other assets		49,791		49,916
	$	298,927	$	301,119
Liabilities and shareholders' equity
Current liabilities:
Payable to growers	$	15,397	$	18,377
Trade accounts payable		6,725		8,742
Accrued expenses		29,516		28,149
Income tax payable		4,115		2,767
Other current liabilities		11,000		11,000
Current portion of operating leases		3,180		3,296
Current portion of finance leases		861		874
Total current liabilities		70,794		73,205
Long-term liabilities:
Long-term portion of operating leases		16,683		17,476
Long-term portion of finance leases		4,069		4,274
Other long-term liabilities		4,512		4,388
Total long-term liabilities		25,264		26,138
Commitments and contingencies (Note 6)
Shareholders' equity:
Common stock ($0.001 par value, 100,000 shares authorized; 17,837 (2025) and 17,802 (2024) shares issued and outstanding)		18		18
Additional paid-in capital		178,198		177,973
Noncontrolling interest		1,464		1,444
Retained earnings		23,189		22,341
Total shareholders' equity		202,869		201,776
	$	298,927	$	301,119

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

CALAVO GROWERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share amounts)


	Three months ended
	January 31,
	2025		2024

Net sales	$	154,385	$	127,606
Cost of sales		138,657		116,846
Gross profit		15,728		10,760
Selling, general and administrative		10,287		13,463
Expenses related to Mexican tax matters		395		383
Operating income (loss)		5,046		(3,086)
Foreign currency (loss) gain		(962)		1,708
Interest income		845		—
Interest expense		(213)		(824)
Other income, net		112		200
Income (loss) before income taxes and net income from unconsolidated entities		4,828		(2,002)
Income tax expense		(1,255)		(573)
Net income from unconsolidated entities		862		1
Net income (loss) from continuing operations		4,435		(2,574)
Net loss from discontinued operations (Note 10)		—		(3,683)
Net income (loss)		4,435		(6,257)
Less: Net income attributable to noncontrolling interest		(20)		(10)
Net income (loss) attributable to Calavo Growers, Inc.	$	4,415	$	(6,267)

Calavo Growers, Inc.’s net income (loss) per share:
Basic
Continuing Operations	$	0.25	$	(0.15)
Discontinued Operations	$	—	$	(0.21)
Net income (loss) attributable to Calavo Growers, Inc	$	0.25	$	(0.35)

Diluted
Continuing Operations	$	0.25	$	(0.15)
Discontinued Operations	$	—	$	(0.21)
Net income (loss) attributable to Calavo Growers, Inc	$	0.25	$	(0.35)

Number of shares used in per share computation:
Basic

SEC Form 10-Q filed by Calavo Growers Inc.