Calavo Growers, Inc. (Nasdaq-GS:
CVGW), a global avocado-industry leader and provider of
value-added fresh food, today reported its financial results for
the fiscal second quarter ended April 30, 2022.
Second Quarter Financial Overview
- Delivered sequential improvement from the first quarter to the
second quarter 2022:
- Gross profit improved by $8.5 million;
- Net loss improved by $3.9 million, or $0.22 per diluted
share;
- Adjusted EBITDA improved by $7.9 million.
- Total revenue of $331.4 million, a 20% increase from the
year-ago quarter.
- Fresh segment revenue increased 30% year-over-year to $211.0
million, Renaissance Food Group (RFG) increased 6% year-over-year
and Foods segment revenues decreased 4% year-over-year.
- Gross profit of $21.7 million, or 6.6% of revenue, compared to
$22.6 million, or 8.2% of revenue, for the year-ago quarter.
- Net loss of $(0.2) million, or $(0.01) per diluted share,
compared to net income of $8.8 million, or $0.50 per diluted share,
for the same period last year.
- Adjusted net income of $5.8 million, or $0.33 per diluted
share, compared to $7.7 million, or $0.43 per diluted share for the
year-ago quarter.
- Adjusted EBITDA of $12.7 million, or $0.71 per diluted share
compared to $15.0 million, or $0.85 per diluted share for the same
period last year.
Adjusted net income (loss) and adjusted EBITDA are non-GAAP
financial measures. See “Non-GAAP Financial Measures” below.
Second Quarter Highlights
- Progressed with pricing initiatives, SKU rationalization,
unified procurement, labor efficiencies, freight consolidation and
administrative synergies across all business units as part of
Project Uno.
- Launched a brand refresh, updating the company’s logo, tagline,
brand personality and website to support Calavo’s One Company
vision.
- Announced plans to reorganize our business into two reporting
segments, Grown and Prepared, to better serve customers, deliver
cost savings and improve efficiencies.
- Grown segment will consist of fresh avocados, tomatoes and
papayas.
- Prepared segment will include all other products: fresh cut
fruit and vegetables, ready-to-eat sandwiches, wraps, salads and
snacks, guacamole, and salsa sold at retail and foodservice as well
as avocado pulp sold to foodservice.
- New segment reporting is expected to occur in the third
quarter’s earnings report.
Management Commentary “We are pleased with the
progress we’ve made, as we showed sequential improvement in gross
profit, EPS, and adjusted EBITDA during the second quarter,” said
Brian W. Kocher, President and Chief Executive Officer of Calavo
Growers, Inc. “I’m especially pleased with the improvements made in
our RFG segment where Project Uno initiatives have delivered
positive impacts in our pricing, raw materials management, labor
efficiency and transportation costs.
“Our mantra is ‘Be better today than yesterday; be better
tomorrow than today.’ We therefore intend to continue delivering
incremental progress. The Calavo team has fully embraced this
mindset, and the efforts are demonstrating results.
“We streamlined our organizational structure to bring clarity to
decision-making authorities and become even more efficient
initiating continuous improvement. We enhanced processes and
structure, and we are acquiring the talent to serve our customers
and ensure that Project Uno efforts are sustainable. I remain
confident in our ability to bring Calavo back to a position of
generating improved, sustainable financial results and long-term
shareholder value.”
Second Quarter 2022 Consolidated Financial
Review Total revenue for the second quarter 2022 was
$331.4 million, compared to $276.8 million for the second quarter
2021, an increase of 20%. Fresh segment sales increased 30%, RFG
sales grew 6%, and Foods sales decreased 4%. The average selling
price of avocados in the Company’s Fresh segment increased by 70%
while volumes were 13% lower than the prior-year period due to
lower available supplies.
Gross profit for the second quarter was $21.7 million, or 6.6%
of revenue, compared to $22.6 million, or 8.2% of revenue, for the
same period last year. Improvements in avocado margin in the
quarter were offset by higher fruit costs in our Foods
business.
Selling, general and administrative (SG&A) expenses for the
second quarter totaled $16.6 million, or 5.0% of revenue, compared
to $13.7 million, or 4.9% of revenue, for the same period last
year. SG&A expenses were largely in line with expectations,
with the year-over-year increase primarily driven by approximately
$2 million in expenses related to the business reorganization.
Net loss for the second quarter was $(0.2) million, or $(0.01)
per share. This compares with net income of $8.8 million, or $0.50
per diluted share, for the same period last year.
Adjusted net income was $5.8 million, or $0.33 per diluted
share, compared to adjusted net income of $7.7 million, or $0.43
per diluted share last year.
Adjusted EBITDA was $12.7 million, or $0.71 per diluted share,
compared to $15.0 million, or $0.85 per diluted share for the same
period last year.
Balance Sheet and Liquidity The Company ended
the quarter with $48.1 million of total debt, which included $41.9
million of borrowings under its line of credit and $6.2 million of
long-term obligations and finance leases. Cash and cash equivalents
(unrestricted) totaled $2.3 million as of April 30, 2022.
In the second quarter, the Company reached an agreement with its
lenders to amend the existing revolving credit facility, which
among other things reduces the total capacity of the facility to
$80.0 million and incorporates a borrowing base. Under the new
terms of the facility, total liquidity as of April 30, 2022 was
$15.9 million, including unrestricted cash, investments, and
availability under the facility, which we believe is sufficient for
our working capital needs and investment plans as we continue the
implementation of Project Uno and drive performance improvements
across the business.
Second Quarter Business Segment Performance
FreshSecond quarter 2022 sales in Calavo’s Fresh business segment
were $211.0 million, up from $161.7 million for the same period
last year. Avocado prices were 70% higher year-over-year and volume
13% lower, which is consistent with the reduction in imports from
Mexico for the entire US market. Fresh segment gross profit for the
second quarter of 2022 was $18.2 million, or 8.6% of segment sales,
compared to $15.0 million, or 9.3% of segment sales, for the same
period last year. The increase in gross profit primarily was driven
by the higher avocado pricing, partially offset by the lower
volume.
Renaissance Food Group (RFG) RFG business segment sales in the
second quarter of 2022 were $102.2 million, up 6% from $96.3
million in the same period last year reflecting price increases and
favorable product mix, partially offset by a slight volume decrease
year-over-year. Segment gross profit was $2.2 million, down
slightly from $2.3 million the same period last year. RFG has
benefited from increased pricing, improved transportation costs,
enhanced materials yield and labor management.
Foods Sales in the Foods segment totaled $19.8 million for the
second quarter 2022, 4% lower than $20.7 million in the same period
last year due to limited supply of fruit. Segment gross profit
totaled $1.3 million, or 6.8% of sales, for the second quarter,
compared to $5.3 million, or 25.6% of sales, for the same period
last year. The decrease in gross profit for the second quarter was
mainly due to year-over-year increases in fruit costs. We have been
implementing price increases, raw product sourcing initiatives,
labor productivity projects and freight consolidation to offset
these increased costs. We expect to see benefits from these efforts
continue in coming quarters.
OutlookCalavo is conducting a search for a new
chief financial officer and is working with an outside search firm
and within professional networks to identify candidates. Interviews
are underway, and we are moving with speed; however, finding the
right person is our primary goal.
We are enthusiastic about sequential results given our Project
Uno efforts, and we are optimistic that we will see ongoing profit
improvement from our efforts in the third and fourth quarters, with
the third quarter as our typically strongest quarter due to
seasonality.
Non-GAAP Financial MeasuresThis press release
includes non-GAAP measures such as EBITDA, adjusted EBITDA,
adjusted net income and adjusted diluted EPS, which are not
prepared in accordance with U.S. generally accepted accounting
principles, or “GAAP.”
EBITDA is defined as net income (loss) 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 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, and (7) one-time items.
Adjusted EBITDA 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 and adjusted EBITDA 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 is defined as net income (loss) 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, and (7) one-time
items. Adjusted net income and the related measure of adjusted
diluted EPS 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 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 to
Calavo Growers, Inc.
Reconciliations of non-GAAP financial measures to the most
directly comparable GAAP financial measures are provided in the
financial tables that accompany this release.
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. One-time items are identified in the
notes to the reconciliations in the financial tables that accompany
this release.
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, adjusted EBITDA, adjusted net income and adjusted
diluted EPS may not be comparable to similarly titled measures
presented by other companies and may not be identical to
corresponding measures used in Company agreements.
Conference Call and WebcastCalavo will host a
conference call, today at 5:00 pm ET/2:00 pm PT to discuss its
financial results. The conference call may be accessed by dialing
877-407-3982 (domestic) or 201-493-6780 (international) with
conference ID: 13730081. A live audio webcast of the call also will
be available on the Investor Relations section of Calavo’s website
at Events & Presentations | Calavo Growers, Inc. and will be
archived for replay.
About Calavo Growers, Inc.Calavo Growers, Inc.
(Nasdaq: CVGW) is a global leader in quality produce, including
avocados, tomatoes and papayas, and a pioneer of healthy fresh-cut
fruit, vegetables and prepared foods. 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 constant
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 processing plants
and packing 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 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. 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 impact of Project Uno initiatives on our business,
results of operations, and financial condition, including
uncertainty as to whether the desired effects will be achieved; the
impact of the COVID-19 pandemic on our business, results of
operations, and financial condition, including, but not limited to,
disruptions in the manufacturing of our products and the operations
of the related supply chains supporting our ability to deliver our
products to consumers, impacts on our employees and uncertainty
regarding our ability to implement health and safety measures for
our employees, uncertainties regarding consumer demand for our
products, impact on our food service customers, increased costs,
the impact of governmental trade restrictions imposed as a result
of COVID-19 and the possible adverse impact of COVID-19 on our
goodwill and other intangible assets; our ability to raise prices,
particularly in our RFG and Foods segments, to offset increases in
costs of goods sold, and the impact of such price increases on
future net sales; 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, including personnel that have not yet been hired, and
the ability of our future management team to work together
successfully; 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 COVID-19 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; and 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
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 |
Media
Contact |
Julie Kegley, Senior Vice
President |
Thomas Federl, VP Communications,
Marketing & ESG |
Financial Profiles, Inc. |
Calavo Growers, Inc. |
calavo@finprofiles.com |
Thomas.Federl@calavo.com |
310-622-8246 |
843-801-4174 |
CALAVO GROWERS,
INC.CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30, |
|
October 31, |
|
|
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,317 |
|
$ |
1,885 |
|
Restricted cash |
|
|
949 |
|
|
970 |
|
Accounts receivable, net of allowances of $4,569 (2022) and $4,816
(2021) |
|
|
103,153 |
|
|
78,866 |
|
Inventories |
|
|
53,617 |
|
|
40,757 |
|
Prepaid expenses and other current assets |
|
|
9,333 |
|
|
11,946 |
|
Advances to suppliers |
|
|
7,904 |
|
|
6,693 |
|
Income taxes receivable |
|
|
8,664 |
|
|
11,524 |
|
Total current assets |
|
|
185,937 |
|
|
152,641 |
|
Property, plant, and equipment, net |
|
|
114,778 |
|
|
118,280 |
|
Operating lease right-of-use assets |
|
|
57,042 |
|
|
59,842 |
|
Investment in Limoneira Company |
|
|
20,027 |
|
|
27,055 |
|
Investments in unconsolidated entities |
|
|
3,802 |
|
|
4,346 |
|
Deferred income taxes |
|
|
5,316 |
|
|
5,316 |
|
Goodwill |
|
|
28,653 |
|
|
28,653 |
|
Intangibles, net |
|
|
7,992 |
|
|
8,769 |
|
Other assets |
|
|
44,745 |
|
|
40,500 |
|
|
|
$ |
468,292 |
|
$ |
445,402 |
|
Liabilities and shareholders' equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Payable to growers |
|
$ |
52,105 |
|
$ |
23,033 |
|
Trade accounts payable |
|
|
18,639 |
|
|
9,794 |
|
Accrued expenses |
|
|
50,086 |
|
|
42,063 |
|
Dividend payable |
|
|
— |
|
|
20,330 |
|
Other current liabilities |
|
|
11,000 |
|
|
11,000 |
|
Current portion of operating leases |
|
|
6,879 |
|
|
6,817 |
|
Current portion of long-term obligations and finance leases |
|
|
1,539 |
|
|
1,587 |
|
Total current liabilities |
|
|
140,248 |
|
|
114,624 |
|
Long-term liabilities: |
|
|
|
|
|
|
|
Borrowings pursuant to credit facilities, long-term |
|
|
41,900 |
|
|
37,700 |
|
Long-term operating leases, less current portion |
|
|
54,760 |
|
|
57,561 |
|
Long-term obligations and finance leases, less current portion |
|
|
4,647 |
|
|
5,553 |
|
Other long-term liabilities |
|
|
2,970 |
|
|
3,081 |
|
Total long-term liabilities |
|
|
104,277 |
|
|
103,895 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
Common stock ($0.001 par value, 100,000 shares authorized; 17,742
and 17,686 shares issued and outstanding as of April 30, 2022 and
October 31, 2021, respectively) |
|
|
18 |
|
|
18 |
|
Additional paid-in capital |
|
|
169,453 |
|
|
168,133 |
|
Noncontrolling interest |
|
|
1,166 |
|
|
1,368 |
|
Retained earnings |
|
|
53,130 |
|
|
57,364 |
|
Total shareholders' equity |
|
|
223,767 |
|
|
226,883 |
|
|
|
$ |
468,292 |
|
$ |
445,402 |
|
CALAVO GROWERS,
INC.CONSOLIDATED CONDENSED STATEMENTS OF
OPERATIONS (UNAUDITED)(in thousands, except per
share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
|
April 30, |
|
April 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
331,418 |
|
|
$ |
276,821 |
|
|
$ |
605,510 |
|
|
$ |
497,399 |
|
|
Cost of sales |
|
|
309,677 |
|
|
|
254,221 |
|
|
|
570,541 |
|
|
|
456,960 |
|
|
Gross profit |
|
|
21,741 |
|
|
|
22,600 |
|
|
|
34,969 |
|
|
|
40,439 |
|
|
Selling, general and administrative |
|
|
16,605 |
|
|
|
13,683 |
|
|
|
31,853 |
|
|
|
27,857 |
|
|
Expenses related to Mexican tax matters |
|
|
478 |
|
|
|
— |
|
|
|
845 |
|
|
|
— |
|
|
Impairment and charges related to RFG Florida facility closure |
|
|
305 |
|
|
|
— |
|
|
|
959 |
|
|
|
— |
|
|
Gain on sale of Temecula packinghouse |
|
|
(54 |
) |
|
|
(54 |
) |
|
|
(108 |
) |
|
|
(108 |
) |
|
Operating income |
|
|
4,407 |
|
|
|
8,971 |
|
|
|
1,420 |
|
|
|
12,690 |
|
|
Interest expense |
|
|
(460 |
) |
|
|
(191 |
) |
|
|
(787 |
) |
|
|
(365 |
) |
|
Other income, net |
|
|
496 |
|
|
|
411 |
|
|
|
1,155 |
|
|
|
612 |
|
|
Unrealized net gain (loss) on Limoneira shares |
|
|
(4,898 |
) |
|
|
3,506 |
|
|
|
(7,028 |
) |
|
|
7,095 |
|
|
Income (loss) before income taxes and loss from unconsolidated
entities |
|
|
(455 |
) |
|
|
12,697 |
|
|
|
(5,240 |
) |
|
|
20,032 |
|
|
Income tax (provision) benefit |
|
|
187 |
|
|
|
(2,772 |
) |
|
|
1,347 |
|
|
|
(4,715 |
) |
|
Net loss from unconsolidated entities |
|
|
(8 |
) |
|
|
(1,131 |
) |
|
|
(543 |
) |
|
|
(1,286 |
) |
|
Net income (loss) |
|
|
(276 |
) |
|
|
8,794 |
|
|
|
(4,436 |
) |
|
|
14,031 |
|
|
Add: Net loss attributable to noncontrolling interest |
|
|
85 |
|
|
|
47 |
|
|
|
202 |
|
|
|
87 |
|
|
Net income (loss) attributable to Calavo Growers, Inc. |
|
$ |
(191 |
) |
|
$ |
8,841 |
|
|
$ |
(4,234 |
) |
|
$ |
14,118 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calavo Growers, Inc.’s net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.01 |
) |
|
$ |
0.50 |
|
|
$ |
(0.24 |
) |
|
$ |
0.80 |
|
|
Diluted |
|
$ |
(0.01 |
) |
|
$ |
0.50 |
|
|
$ |
(0.24 |
) |
|
$ |
0.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares used in per share computation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
17,664 |
|
|
|
17,619 |
|
|
|
17,659 |
|
|
|
17,609 |
|
|
Diluted |
|
|
17,664 |
|
|
|
17,679 |
|
|
|
17,659 |
|
|
|
17,668 |
|
|
CALAVO GROWERS, INC.NET
SALES AND GROSS PROFIT BY BUSINESS SEGMENT
(UNAUDITED)(in thousands)
|
|
Fresh |
|
|
|
Calavo |
|
Interco. |
|
|
|
|
|
|
products |
|
RFG |
|
Foods |
|
Elimins. |
|
Total |
|
|
|
(All amounts are presented in thousands) |
|
Three months ended
April 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
210,997 |
|
$ |
102,159 |
|
$ |
19,815 |
|
$ |
(1,553 |
) |
|
$ |
331,418 |
|
Cost of sales |
|
|
192,841 |
|
|
99,915 |
|
|
18,474 |
|
|
(1,553 |
) |
|
|
309,677 |
|
Gross profit |
|
$ |
18,156 |
|
$ |
2,244 |
|
$ |
1,341 |
|
$ |
— |
|
|
$ |
21,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
April 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
161,686 |
|
$ |
96,289 |
|
$ |
20,736 |
|
$ |
(1,890 |
) |
|
$ |
276,821 |
|
Cost of sales |
|
|
146,678 |
|
|
94,001 |
|
|
15,432 |
|
|
(1,890 |
) |
|
|
254,221 |
|
Gross profit |
|
$ |
15,008 |
|
$ |
2,288 |
|
$ |
5,304 |
|
$ |
— |
|
|
$ |
22,600 |
|
|
|
Fresh |
|
|
|
Calavo |
|
Interco. |
|
|
|
|
|
|
products |
|
RFG |
|
Foods |
|
Elimins. |
|
Total |
|
|
|
(All amounts are presented in thousands) |
|
Six months ended April
30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
373,582 |
|
$ |
197,923 |
|
$ |
36,943 |
|
$ |
(2,938 |
) |
|
$ |
605,510 |
|
Cost of sales |
|
|
343,760 |
|
|
196,331 |
|
|
33,388 |
|
|
(2,938 |
) |
|
|
570,541 |
|
Gross profit |
|
$ |
29,822 |
|
$ |
1,592 |
|
$ |
3,555 |
|
$ |
— |
|
|
$ |
34,969 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended April
30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
277,145 |
|
$ |
186,595 |
|
$ |
37,194 |
|
$ |
(3,535 |
) |
|
$ |
497,399 |
|
Cost of sales |
|
|
248,992 |
|
|
184,329 |
|
|
27,174 |
|
|
(3,535 |
) |
|
|
456,960 |
|
Gross profit |
|
$ |
28,153 |
|
$ |
2,266 |
|
$ |
10,020 |
|
$ |
— |
|
|
$ |
40,439 |
|
For the three months ended April 30, 2022 and 2021, intercompany
sales and cost of sales of $0.5 million and $0.7 million
between Fresh products and RFG were eliminated. For the three
months ended April 30, 2022 and 2021, intercompany sales and cost
of sales of $1.1 million and $1.2 million between Calavo Foods and
RFG were eliminated. For the six months ended April 30, 2022 and
2021, intercompany sales and cost of sales of $1.1 million and
$1.2 million between Fresh products and RFG were eliminated. For
the six months ended April 30, 2022 and 2021, intercompany sales
and cost of sales of $1.8 million and $2.3 million between Calavo
Foods and RFG were eliminated.
CALAVO GROWERS,
INC.RECONCILIATION OF ADJUSTED NET INCOME AND EPS
(UNAUDITED)(in thousands, except per share
amounts)
The following table presents adjusted net income and adjusted
diluted EPS, each a non-GAAP measure, and reconciles them to net
income (loss) attributable to Calavo Growers, Inc., and
Diluted EPS, which are the most directly comparable GAAP measures.
See “Non-GAAP Financial Measures” earlier in this release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended April 30, |
|
Six months ended April 30, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net income (loss) attributable to Calavo Growers, Inc. |
|
$ |
(191 |
) |
|
$ |
8,841 |
|
|
$ |
(4,234 |
) |
|
$ |
14,118 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash losses recognized
from unconsolidated entities (a) |
|
|
8 |
|
|
|
1,131 |
|
|
|
543 |
|
|
|
1,286 |
|
Loss from FreshRealm and other
related expenses (b) |
|
|
— |
|
|
|
50 |
|
|
|
— |
|
|
|
11 |
|
Acquisition costs (c) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
262 |
|
Net (gain) loss on Limoneira
shares (d) |
|
|
4,898 |
|
|
|
(3,506 |
) |
|
|
7,028 |
|
|
|
(7,095 |
) |
RFG rent expense add back
(e) |
|
|
108 |
|
|
|
108 |
|
|
|
216 |
|
|
|
216 |
|
Restructure costs -
consulting, management recruiting and severance (f) |
|
|
2,157 |
|
|
|
685 |
|
|
|
3,275 |
|
|
|
685 |
|
Mexican tax matters (g) |
|
|
478 |
|
|
|
— |
|
|
|
845 |
|
|
|
— |
|
Impairment and charges related
to closure of RFG Florida facility (h) |
|
|
305 |
|
|
|
— |
|
|
|
959 |
|
|
|
— |
|
Tax impact of adjustments
(i) |
|
|
(1,979 |
) |
|
|
367 |
|
|
|
(3,217 |
) |
|
|
1,166 |
|
Adjusted net income attributed
to Calavo Growers, Inc. |
|
$ |
5,784 |
|
|
$ |
7,676 |
|
|
$ |
5,415 |
|
|
$ |
10,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calavo Growers, Inc.’s net
income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS (GAAP) |
|
$ |
(0.01 |
) |
|
$ |
0.50 |
|
|
$ |
(0.24 |
) |
|
$ |
0.80 |
|
Adjusted Diluted EPS |
|
$ |
0.33 |
|
|
$ |
0.43 |
|
|
$ |
0.31 |
|
|
$ |
0.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares used in per
share computation: |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
17,756 |
|
|
|
17,679 |
|
|
|
17,718 |
|
|
|
17,668 |
|
(a) For the three months ended April 30, 2022
and 2021, we realized losses from Agricola Don Memo totaling less
than $0.1 million and $1.1 million. For the six months ended April
30, 2022 and 2021, we realized losses from Agricola Don Memo
totaling less than $0.5 million and $1.3 million.
(b) We had professional fees related to the
FreshRealm Separation Agreement for the three and six months ended
April 30, 2021. Partially offsetting this expense, as part of the
FreshRealm Separation Agreement, we received $0.1 million of
previously reserved receivables for the six months ended April 30,
2021. (c) For the six months ended April 30, 2021,
we incurred professional service costs related to a considered but
non-consummated acquisition. (d) For the three
months ended April 30, 2022 and 2021, we recorded $4.9 million in
unrealized losses and $3.5 million in unrealized gains related to
these mark-to-market adjustments, respectively. For the six
months ended April 30, 2022 and 2021, we recorded $7.0 million in
unrealized losses and $7.1 million in unrealized gains related to
these mark-to-market adjustments,
respectively. (e) For the three months ended
April 30, 2022 and 2021, we incurred $0.1 million related to rent
paid for RFG corporate office space that we have vacated and plan
to sublease. For the six months ended April 30, 2022 and 2021, we
incurred $0.2 million related to rent paid for RFG corporate office
space that we have vacated and plan to
sublease.(f) For the three and six months ended
April 30, 2022, we recorded $0.7 million and $1.8 million of
consulting expenses related to an enterprise-wide strategic
business operations study conducted by a third-party management
consulting organization for the purpose of restructuring to improve
the profitability of the organization and efficiency of our
operations. In addition, for the three and six months ended April
30, 2022, we recorded $1.3 million of severance accrual related to
the Project Uno restructuring. For the three months and six months
ended April 30, 2021, we recorded higher stock-based compensation
for the early vesting of restricted stock for the retirement of our
former Chief Executive Officer and Board member.
(g) For the three and six months ended April 30,
2022, we incurred $0.5 million and $0.8 million of related
professional fees related to the Mexican tax matters. For further
information see Note 7 to the consolidated condensed financial
statements included in our Quarterly Report filed with the
Securities and Exchange Commission for the period ending April 30,
2022.(h) On October 18, 2021, we announced the
closure of RFG’s food processing operations at our Green Cove
Springs (near Jacksonville), Florida facility, as part of our
Project Uno profit improvement program. As of November 15, the
Green Cove facility of RFG has ceased operations. We incurred $0.3
million and $1.0 million of expenses for the three and six months
ended April 30, 2022, related to the closure of this
facility.(i) Tax impact of non-GAAP adjustments
are based on effective year-to-date tax rates.
CALAVO GROWERS,
INC.RECONCILIATION OF EBITDA AND ADJUSTED EBITDA
(UNAUDITED)(in thousands, except per share
amounts)
The following table presents EBITDA and adjusted EBITDA, each a
non-GAAP measure, and reconciles them to net income (loss)
attributable to Calavo Growers, Inc., which is the most
directly comparable GAAP measure. See “Non-GAAP Financial Measures”
earlier in this release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended April 30, |
|
Six months ended April 30, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net income (loss) attributable to Calavo Growers, Inc. |
|
$ |
(191 |
) |
|
$ |
8,841 |
|
|
$ |
(4,234 |
) |
|
$ |
14,118 |
|
Interest Income |
|
|
(133 |
) |
|
|
(17 |
) |
|
|
(266 |
) |
|
|
(89 |
) |
Interest Expense |
|
|
460 |
|
|
|
191 |
|
|
|
787 |
|
|
|
365 |
|
Provision (Benefit) for Income
Taxes |
|
|
(187 |
) |
|
|
2,772 |
|
|
|
(1,347 |
) |
|
|
4,715 |
|
Depreciation &
Amortization |
|
|
4,093 |
|
|
|
4,077 |
|
|
|
8,405 |
|
|
|
8,371 |
|
Stock-Based Compensation
(d) |
|
|
812 |
|
|
|
1,357 |
|
|
|
1,368 |
|
|
|
2,264 |
|
EBITDA |
|
$ |
4,854 |
|
|
$ |
17,221 |
|
|
$ |
4,713 |
|
|
$ |
29,744 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash losses recognized
from unconsolidated entities (a) |
|
|
8 |
|
|
|
1,131 |
|
|
|
543 |
|
|
|
1,286 |
|
Net (gain) loss on Limoneira
shares (d) |
|
|
4,898 |
|
|
|
(3,506 |
) |
|
|
7,028 |
|
|
|
(7,095 |
) |
Loss (Recovery) from
FreshRealm and other related expenses (b) |
|
|
— |
|
|
|
50 |
|
|
|
— |
|
|
|
11 |
|
RFG rent expense add back
(e) |
|
|
108 |
|
|
|
108 |
|
|
|
216 |
|
|
|
216 |
|
Acquisition costs (c) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
262 |
|
Restructure costs - consulting
and management recruiting and severance (f) |
|
|
2,019 |
|
|
|
— |
|
|
|
3,137 |
|
|
|
— |
|
Expenses related to Mexican
tax matters (g) |
|
|
478 |
|
|
|
— |
|
|
|
845 |
|
|
|
— |
|
Impairment and charges related
to closure of RFG Florida facility (h) |
|
|
311 |
|
|
|
— |
|
|
|
929 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
12,676 |
|
|
$ |
15,004 |
|
|
$ |
17,411 |
|
|
$ |
24,424 |
|
Adjusted EBITDA per dilutive
share |
|
$ |
0.71 |
|
|
$ |
0.85 |
|
|
$ |
0.98 |
|
|
$ |
1.38 |
|
See prior page for footnote references
CALAVO
GROWERS, INC.OTHER INFORMATION
(UNAUDITED)(in thousands, except per pound
amounts)
|
|
Three months ended April
30, |
|
Six months ended April
30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Pounds of avocados sold |
|
|
|
88,223 |
|
|
|
101,274 |
|
|
|
174,351 |
|
|
|
198,661 |
Pounds of processed avocado
products sold |
|
|
|
6,147 |
|
|
|
6,742 |
|
|
|
11,973 |
|
|
|
12,190 |
Average sales price per pound
- avocados |
|
|
$ |
2.16 |
|
|
$ |
1.44 |
|
|
$ |
1.95 |
|
|
$ |
1.25 |
Gross profit per pound -
avocados |
|
|
$ |
0.18 |
|
|
$ |
0.13 |
|
|
$ |
0.15 |
|
|
$ |
0.13 |
Average sales price per pound
– processed avocado products |
|
|
$ |
3.16 |
|
|
$ |
2.95 |
|
|
$ |
3.02 |
|
|
$ |
2.92 |
Gross
profit per pound – processed avocado products |
|
|
$ |
0.25 |
|
|
$ |
0.79 |
|
|
$ |
0.33 |
|
|
$ |
0.82 |
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