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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