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Calavo Growers, Inc. Announces Fiscal 2011 Second Quarter Operating Results

Safe Harbor Statement

This news 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. Actual results and events may differ from those projected as a result of certain risks and uncertainties. These risks and uncertainties include but are not limited to: increased competition, conducting substantial amounts of business internationally, pricing pressures on agricultural products, adverse weather and growing conditions confronting avocado growers, new governmental regulations, as well as other risks and uncertainties detailed from time to time in the company’s Securities and Exchange Commission filings, including, without limitation, the company’s Annual Report on Form 10-K for the year ended October 31, 2010. These forward-looking statements are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

       
 

CALAVO GROWERS, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands)

 
April 30, October 31,

2011

2010

Assets
Current assets:
Cash and cash equivalents $ 1,370 $ 1,064

Accounts receivable, net of allowances of $1,590 (2011) and $1,372 (2010)

41,101 31,743
Inventories, net 21,820 14,831
Prepaid expenses and other current assets 5,429 8,424
Advances to suppliers 671 1,598
Income taxes receivable 1,904 1,816
Deferred income taxes   2,336   2,336
Total current assets 74,631 61,812
Property, plant, and equipment, net 42,341 41,059
Investment in Limoneira Company 38,046 34,986
Investment in unconsolidated entities 2,256 2,016
Goodwill 4,085 4,085
Other assets   4,702   6,240
$ 166,061 $ 150,198
Liabilities and shareholders’ equity
Current liabilities:
Payable to growers $ 14,068 $ 11,208
Trade accounts payable 2,291 2,839
Accrued expenses 12,781 15,353
Short-term borrowings 24,360 8,150
Dividend payable 8,092
Current portion of long-term obligations   1,371   1,369
Total current liabilities 54,871 47,011
Long-term liabilities:
Long-term obligations, less current portion 6,053 6,089
Deferred income taxes   9,381   8,266
Total long-term liabilities 15,434 14,355
Commitments and contingencies
Noncontrolling interest 524 575
Total Calavo Grower’s shareholder’s equity   95,232   88,257
$ 166,061 $ 150,198
 
 
     
 

CALAVO GROWERS, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per share amounts)

 

 

Three months ended

April 30,

Six months ended

April 30,

2011   2010 2011   2010
 
Net sales $ 118,720 $ 109,219 $ 210,039 $ 176,539
Cost of sales   109,300     96,133     191,950     154,578  
Gross margin 9,420 13,086 18,089 21,961
Selling, general and administrative   5,635     5,455     10,650     10,619  
Operating income 3,785 7,631 7,439 11,342
Interest expense (235 ) (234 ) (439 ) (463 )
Other income, net   458     467     684     732  
Income before provision for income taxes 4,008 7,864 7,684 11,611
Provision for income taxes   1,634     3,090     3,020     4,563  
Net income 2,374 4,774 4,664 7,048
Add: Net loss – noncontrolling interest   30     19     51     19  
Net income attributable to Calavo Growers, Inc. $ 2,404   $ 4,793   $ 4,715   $ 7,067  
 
Calavo Growers, Inc.’s net income per share:
Basic $ 0.16   $ 0.33   $ 0.32   $ 0.49  
Diluted $ 0.16   $ 0.33   $ 0.32   $ 0.49  

Calavo Growers, Inc.’s shares used in per share computation:

Basic   14,726     14,572     14,724     14,538  
Diluted   14,734     14,598     14,731     14,562  
 
 
           
 

CALAVO GROWERS, INC.

NET SALES AND GROSS MARGIN BY BUSINESS SEGMENT (UNAUDITED)

(All amounts in thousands)

 
 

Fresh

products

Calavo

Foods

Total

(All amounts are presented in thousands)
Six months ended April 30, 2011
Net sales $ 188,306 $ 21,733 $ 210,039
Cost of sales   174,559   17,391   191,950
Gross margin $ 13,747 $ 4,342 $ 18,089
 
Six months ended April 30, 2010
Net sales $ 153,584 $ 22,955 $ 176,539
Cost of sales   139,024   15,554   154,578
Gross margin $ 14,560 $ 7,401 $ 21,961
 

For six months ended April 30, 2011 and 2010, inter-segment sales and cost of sales for Fresh products totaling $8.6 million and $7.6 million were eliminated. For six months ended April 30, 2011 and 2010, inter-segment sales and cost of sales for Calavo Foods totaling $5.8 million and $4.4 million were eliminated.

           

Fresh

products

Calavo

Foods

Total

(All amounts are presented in thousands)
Three months ended April 30, 2011
Net sales $ 107,650 $ 11,070 $ 118,720
Cost of sales   100,021   9,279   109,300
Gross margin $ 7,629 $ 1,791 $ 9,420
 
Three months ended April 30, 2010
Net sales $ 97,247 $ 11,972 $ 109,219
Cost of sales   87,506   8,627   96,133
Gross margin $ 9,741 $ 3,345 $ 13,086
 

For three months ended April 30, 2011 and 2010, inter-segment sales and cost of sales for Fresh products totaling $4.3 million and $3.9 million were eliminated. For three months ended April 30, 2011 and 2010, inter-segment sales and cost of sales for Calavo Foods totaling $2.8 million and $2.2 million were eliminated.

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