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Calavo Growers, Inc. Posts Sharply Higher Fiscal 2012 Second Quarter And Six-Month Results Before Giving Effect To Mexican Tax Item

Stocks in this article: CVGW

About Calavo

Calavo Growers, Inc. is a global avocado-industry leader. The company also procures and markets diversified fresh produce items, ranging from tomatoes to tropical produce. An expanding provider of value-added fresh food, the company’s Calavo Foods business segment manufactures and distributes guacamole, guacamole hummus, salsa and tortilla chips under the respected Calavo brand name. Calavo Foods’ wholly owned subsidiary, Renaissance Food Group, LLC, creates, markets and distributes a portfolio of healthy, high-quality lifestyle products for consumers through fast-growing brands that include Garden Highway and Chef Essentials. Founded in 1924, Calavo serves food distributors, produce wholesalers, supermarket retailers and restaurant chains worldwide.

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, 2011. 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,

2012

2011

Assets
Current assets:
Cash and cash equivalents $ 4,682 $ 2,774

Accounts receivable, net of allowances of $2,718 (2012) and $2,285 (2011)

51,512 36,101
Inventories, net 25,032 17,787
Prepaid expenses and other current assets 6,797 6,220
Advances to suppliers 1,342 3,349
Income taxes receivable 3,111
Deferred income taxes   2,136   2,136
Total current assets 91,501 71,478
Property, plant, and equipment, net 48,606 47,091
Investment in Limoneira Company 29,057 29,991
Investment in unconsolidated entities 2,498 2,292
Goodwill 18,349 18,349
Other assets   15,242   16,122
$ 205,253 $ 185,323
Liabilities and shareholders’ equity
Current liabilities:
Payable to growers $ 12,535 $ 5,082
Trade accounts payable 9,010 7,038
Accrued expenses 19,367 19,285
Income tax payable 471
Short-term borrowings 33,190 17,860
Dividend payable 8,123
Current portion of long-term obligations   5,473   5,448
Total current liabilities 80,046 62,836
Long-term liabilities:
Long-term obligations, less current portion 16,189 18,244
Deferred income taxes   7,638   8,002
Total long-term liabilities 23,827 26,246
Commitments and contingencies:
Noncontrolling interest 421 555
Total Calavo Grower’s shareholders’ equity   100,959   95,686
$ 205,253 $ 185,323
 
 
               

CALAVO GROWERS, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per share amounts)

 

 

Three months ended

April 30,

Six months ended

April 30,

2012       2011 2012       2011
 
Net sales $ 138,992 $ 118,720 $ 256,386 $ 210,039
Cost of sales   124,297     109,386     229,789     192,175  
Gross margin 14,695 9,334 26,597 17,864
Selling, general and administrative   7,618     5,549     15,112     10,425  
Operating income 7,077 3,785 11,485 7,439
Interest expense (311 ) (235 ) (609 ) (439 )
Other income, net   469     458     706     684  
Income before provision for income taxes 7,235 4,008 11,582 7,684
Provision for income taxes   4,700     1,634     6,395     3,020  
Net income 2,535 2,374 5,187 4,664
Add: Net loss – noncontrolling interest   13     30     40     51  
Net income attributable to Calavo Growers, Inc. $ 2,548   $ 2,404   $ 5,227   $ 4,715  
 
Calavo Growers, Inc.’s net income per share:
Basic $ 0.17   $ 0.16   $ 0.35   $ 0.32  
Diluted $ 0.17   $ 0.16   $ 0.35   $ 0.32  

Number of shares used in per share computation:

Basic   14,787     14,726     14,779     14,724  
Diluted   14,802     14,734     14,792     14,731  
 
 
                                 

CALAVO GROWERS, INC.

NET SALES AND GROSS MARGIN BY BUSINESS SEGMENT (UNAUDITED)

(in thousands)

 

Fresh

products

Calavo

Foods

RFG

Total

 

 

(All amounts are presented in thousands)

Three months ended April 30, 2012
Net sales $ 91,732 $ 11,202 $ 36,058 $ 138,992
Cost of sales   83,767   7,283   33,247   124,297
Gross margin $ 7,965 $ 3,919 $ 2,811 $ 14,695
 
Three months ended April 30, 2011
Net sales $ 107,650 $ 11,070 $ $ 118,720
Cost of sales   100,107   9,279     109,386
Gross margin $ 7,543 $ 1,791 $ $ 9,334
 

For the three months ended April 30, 2012 and 2011, inter-segment sales and cost of sales for Fresh products totaling $6.3 million and $4.3 million were eliminated. For the three months ended April 30, 2012 and 2011, inter-segment sales and cost of sales for Calavo Foods totaling $2.9 million and $2.8 million were eliminated.

                                 

Fresh

products

Calavo

Foods

RFG

Total

 

(All amounts are presented in thousands)

Six months ended April 30, 2012
Net sales $ 162,868 $ 22,481 $ 71,037 $ 256,386
Cost of sales   148,934   15,154   65,701   229,789
Gross margin $ 13,934 $ 7,327 $ 5,336 $ 26,597
 
Six months ended April 30, 2011
Net sales $ 188,306 $ 21,733 $ $ 210,039
Cost of sales   174,784   17,391     192,175
Gross margin $ 13,522 $ 4,342 $ $ 17,864
 

For the six months ended April 30, 2012 and 2011, inter-segment sales and cost of sales for Fresh products totaling $11.3 million and $8.6 million were eliminated. For the six months ended April 30, 2012 and 2011, inter-segment sales and cost of sales for Calavo Foods totaling $5.8 million were eliminated.

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