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 first quarter ended January 31, 2022.
First Quarter Financial
Overview
- Total revenue of $274.1 million, a 24% increase from the
year-ago quarter.
- Fresh segment revenue increased 41% year-over-year to $162.6
million, and Renaissance Food Group (RFG) and Foods segments
revenues increased 6% and 4% year-over-year, respectively.
- Gross profit of $13.2 million, or 4.8% of revenue, compared to
$17.8 million, or 8.1% of revenue, for the year-ago quarter.
- Net loss of $(4.0) million, or $(0.23) per diluted share,
compared to net income of $5.3 million, or $0.30 per diluted share,
for the same period last year.
- Adjusted net loss was $(0.4) million, or $(0.02) per diluted
share, compared to adjusted net income of $3.0 million, or $0.17
per diluted share last year.
- Adjusted EBITDA of $4.7 million, or $0.27 per diluted share
compared to $9.4 million, or $0.53 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.
First Quarter Highlights
- Showed sequential improvement in the first quarter of 2022 over
the fourth quarter of 2021:
- Gross profit improved by $4.1 million;
- Net loss improved by $9.0 million, or $0.50 per diluted
share;
- Adjusted EBITDA improved by $3.3 million.
- Maintained focus on Project Uno, a profit improvement project,
making progress on pricing initiatives, SKU rationalization,
unified procurement, consolidating freight and administrative
functions across all business units.
- Appointed Brian W. Kocher as Calavo’s President and Chief
Executive Officer.
- Named former interim CEO Steven Hollister as Chairman of the
Board of Directors.
Management Commentary “I want
to thank interim CEO Steve Hollister and the Calavo team for
getting the company back on course following the challenges created
by the COVID-19 pandemic,” said Brian W. Kocher, President and
Chief Executive Officer of Calavo Growers, Inc. “While we still
have considerable progress to make, we are showing sequential
improvement quarter to quarter in revenue, gross margin and EBITDA,
and these trends are continuing into the second quarter.
“As Calavo’s new President and CEO, I am
encouraged by how our team has embraced the profit improvement
steps that are underway with Project Uno. We are working with our
customers not only on pricing but also on ensuring they have the
right product mix, which is supporting our continued efforts in SKU
rationalization. Calavo also for the first time has taken a
consolidated view to its freight programs and is finding
substantial savings as we implement the new carrier agreements. We
have adopted e-procurement practices across all our facilities,
initiated labor productivity projects and have begun integrating
human resources, and back-office functions to improve efficiency.
These efforts bring dollars to the bottom line that we will see in
our results going forward.
“I’m a veteran of the produce industry, and I’ve
known for many years that Calavo is a great company and a great
business. We have healthy, sustainable, convenient products that
are popular with consumers and provide a great value. We have
steadily improved our performance from Q3 to Q4 to Q1, and we are
focused on continuing that improvement going forward. We have
strong customer relationships, and we want to supply them with
relevant products for their consumers so our businesses will grow
and thrive together. If our customers win, we win, and we will be
positioned for growth for decades into the future.”
First Quarter 2022 Consolidated
Financial Review Total revenue for the first quarter 2022
was $274.1 million, compared to $220.6 million for the first
quarter 2021, an increase of 24%. Fresh segment sales increased
41%, and the RFG and Foods business segments generated sales growth
of 6% and 4%, respectively. The average selling price of avocados
in the Company’s Fresh segment was higher by 64% while volumes were
12% lower than the prior-year period due to lower available
supplies.
Gross profit for the first quarter was $13.2
million, or 4.8% of revenue, compared to $17.8 million, or 8.1% of
revenue, for the same period last year. The decrease in gross
profit margin reflected inflationary pressures on labor, raw
materials and freight combined with supply constrained volume
declines and adverse foreign currency impacts in the Fresh
segment.
Selling, general and administrative (SG&A)
expenses for the first quarter totaled $15.3 million, or 5.6% of
revenue, compared to $14.2 million, or 6.4% of revenue, for the
same period last year. The year-over-year increase in SG&A
expenses primarily was related to increases in outside consulting
services related to restructuring efforts and investment in key
personnel to advance Project Uno.
Net loss for the first quarter was $(4.0)
million, or $(0.23) per share. This compares with net income of
$5.3 million, or $0.30 per diluted share, for the same period last
year.
Adjusted net loss was $(0.4) million, or $(0.02)
per share, for the first quarter, compared to adjusted net income
of $3.0 million, or $0.17 per diluted share, for the same period
last year.
Adjusted EBITDA was $4.7 million for the first
quarter of 2022, compared to $9.4 million for the same period last
year.
Balance Sheet and Liquidity The
Company ended the quarter with $70.8 million of total debt, which
included $64.0 million of borrowings under its line of credit and
$6.8 million of long-term obligations and finance leases. Cash and
cash equivalents (unrestricted) totaled $7.8 million as of January
31, 2022.
Subsequent to quarter-end, 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. Under the new terms of
the facility, total liquidity at quarter-end was approximately
$21.3 million on a pro forma basis, including unrestricted cash and
borrowings 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.
First Quarter Business Segment
Performance FreshFirst quarter 2022 sales in Calavo’s
Fresh business segment were $162.6 million, up from $115.5 million
for the same period last year. Avocado prices were 64% higher
year-over-year, partially offset by 12% lower volume due to lower
available market supply. Fresh segment gross profit for the first
quarter of 2022 was $11.7 million, or 7.2% of segment sales,
compared to $13.1 million, or 11.4% of segment sales, for the same
period last year. The decrease in gross profit was primarily driven
by a $1.6 million foreign exchange impact. Excluding foreign
exchange, gross profit improved.
Renaissance Food Group (RFG) RFG business
segment sales in the first quarter of 2022 were $95.8 million, up
6% from $90.3 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 a loss of
$652,000, down from a loss of $23,000 for the same period last
year. RFG results were negatively impacted by costs associated with
the consolidation of our Jacksonville, Florida facility into our
Georgia facility. Excluding those costs, RFG would have delivered
year-over-year gross profit growth. Gross margin also was adversely
affected by market-wide factors such as higher labor, material and
freight costs. We have begun implementing price increases, SKU
rationalization, labor productivity initiatives and freight
consolidation to offset these increased costs.
Foods Sales in the Foods segment totaled $17.1
million for the first quarter 2022, 4% higher than $16.5 million in
the same period last year due to improved foodservice demand.
Segment gross profit totaled $2.2 million, or 12.9% of sales, for
the first quarter, compared to $4.7 million, or 28.7% of sales, for
the same period last year. The decrease in gross profit for the
first quarter was mainly due to year-over-year increases in fruit
and labor costs. We have been implementing price increases, raw
product sourcing initiatives, labor productivity projects and
freight consolidation to offset these increased costs and should
see results from these efforts in coming quarters.
OutlookDemand for fresh,
healthy and convenient products remains strong even as
industry-wide inflationary pressures on raw materials, freight,
packaging and labor costs persist. We have and will continue to
implement pricing and operational initiatives to offset these
items, and we are seeing quarter to quarter sequential improvement
in profitability. We are optimistic that we will see ongoing profit
improvement from our efforts.
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. 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. Additionally, the Company’s
senior management is compensated in part on the basis of Adjusted
Net Income.
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: 13727810. A live
audio webcast of the call also will be available on the Investor
Relations section of Calavo’s website at http://ir.calavo.com and
will be archived for replay.
About Calavo Growers,
Inc.Calavo Growers, Inc. is a global avocado-industry
leader and provider of value-added fresh food serving retail
grocery, foodservice, club stores, mass merchandisers, food
distributors and wholesalers worldwide. The Company’s Fresh segment
procures and markets fresh avocados and select other fresh produce,
including tomatoes and papayas. The Renaissance Food Group (RFG)
segment creates, markets and distributes a portfolio of healthy,
fresh foods, including fresh-cut fruit, fresh-cut vegetables and
prepared foods. The Foods segment manufactures and distributes
guacamole and salsa. Founded in 1924, Calavo’s fresh food products
are sold under the respected Calavo brand name as well as Garden
Highway, Chef Essentials and a variety of private label and store
brands.
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 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
increase 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 and the ability of our 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; 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: |
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|
Financial Profiles, Inc. |
|
|
Larry Clark, Managing Director |
|
Julie Kegley, Senior Vice President |
310-622-8223 |
|
310-622-8246 |
calavo@finprofiles.com |
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CALAVO GROWERS,
INC.CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)(in thousands)
|
|
|
|
|
|
|
January 31, |
|
October 31, |
|
2022 |
|
2021 |
|
|
|
|
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
7,826 |
|
$ |
1,885 |
Restricted cash |
|
970 |
|
|
970 |
Accounts receivable, net of allowances of $5,012 (2022) and $4,816
(2021) |
|
89,467 |
|
|
78,866 |
Inventories |
|
52,402 |
|
|
40,757 |
Prepaid expenses and other current assets |
|
10,905 |
|
|
11,946 |
Advances to suppliers |
|
9,951 |
|
|
6,693 |
Income taxes receivable |
|
8,016 |
|
|
11,524 |
Total current assets |
|
179,537 |
|
|
152,641 |
Property, plant, and equipment, net |
|
116,034 |
|
|
118,280 |
Operating lease right-of-use assets |
|
58,568 |
|
|
59,842 |
Investment in Limoneira Company |
|
24,925 |
|
|
27,055 |
Investments in unconsolidated entities |
|
3,810 |
|
|
4,346 |
Deferred income taxes |
|
5,316 |
|
|
5,316 |
Goodwill |
|
28,653 |
|
|
28,653 |
Intangibles, net |
|
8,381 |
|
|
8,769 |
Other assets |
|
43,408 |
|
|
40,500 |
|
$ |
468,632 |
|
$ |
445,402 |
Liabilities and shareholders' equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Payable to growers |
$ |
37,798 |
|
$ |
23,033 |
Trade accounts payable |
|
11,848 |
|
|
9,794 |
Accrued expenses |
|
47,761 |
|
|
42,063 |
Dividend payable |
|
— |
|
|
20,330 |
Other current liabilities |
|
11,000 |
|
|
11,000 |
Current portion of operating leases |
|
6,876 |
|
|
6,817 |
Current portion of long-term obligations and finance leases |
|
1,593 |
|
|
1,587 |
Total current liabilities |
|
116,876 |
|
|
114,624 |
Long-term liabilities: |
|
|
|
|
|
Borrowings pursuant to credit facilities, long-term |
|
64,000 |
|
|
37,700 |
Long-term operating leases, less current portion |
|
56,277 |
|
|
57,561 |
Long-term obligations and finance leases, less current portion |
|
5,171 |
|
|
5,553 |
Other long-term liabilities |
|
3,026 |
|
|
3,081 |
Total long-term liabilities |
|
128,474 |
|
|
103,895 |
Commitments and contingencies |
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
Common stock ($0.001 par value, 100,000 shares authorized; 17,716
(2022) and 17,686 (2021) shares issued and outstanding) |
|
18 |
|
|
18 |
Additional paid-in capital |
|
168,692 |
|
|
168,133 |
Noncontrolling interest |
|
1,251 |
|
|
1,368 |
Retained earnings |
|
53,321 |
|
|
57,364 |
Total shareholders' equity |
|
223,282 |
|
|
226,883 |
|
$ |
468,632 |
|
$ |
445,402 |
|
|
CALAVO GROWERS,
INC.CONSOLIDATED CONDENSED STATEMENTS OF
OPERATIONS (UNAUDITED)(in thousands, except per
share amounts)
|
|
|
|
|
|
|
Three months ended |
|
January 31, |
|
2022 |
|
2021 |
|
|
|
|
|
Net sales |
$ |
274,092 |
|
|
$ |
220,578 |
|
Cost of sales |
|
260,864 |
|
|
|
202,739 |
|
Gross profit |
|
13,228 |
|
|
|
17,839 |
|
Selling, general and administrative |
|
15,337 |
|
|
|
14,174 |
|
Expenses related to Mexican tax matters |
|
367 |
|
|
|
— |
|
Impairment and charges related to RFG Florida facility closure |
|
565 |
|
|
|
— |
|
Gain on sale of Temecula packinghouse |
|
(54 |
) |
|
|
(54 |
) |
Operating income (loss) |
|
(2,987 |
) |
|
|
3,719 |
|
Interest expense |
|
(327 |
) |
|
|
(174 |
) |
Other income, net |
|
659 |
|
|
|
201 |
|
Unrealized net gain (loss) on Limoneira shares |
|
(2,130 |
) |
|
|
3,589 |
|
Income (loss) before income taxes and loss from unconsolidated
entities |
|
(4,785 |
) |
|
|
7,335 |
|
Income tax (provision) benefit |
|
1,160 |
|
|
|
(1,943 |
) |
Net loss from unconsolidated entities |
|
(535 |
) |
|
|
(155 |
) |
Net income (loss) |
|
(4,160 |
) |
|
|
5,237 |
|
Add: Net loss attributable to noncontrolling interest |
|
117 |
|
|
|
40 |
|
Net income (loss) attributable to Calavo Growers, Inc. |
$ |
(4,043 |
) |
|
$ |
5,277 |
|
|
|
|
|
|
|
Calavo Growers, Inc.’s net income (loss) per share: |
|
|
|
|
|
Basic |
$ |
(0.23 |
) |
|
$ |
0.30 |
|
Diluted |
$ |
(0.23 |
) |
|
$ |
0.30 |
|
|
|
|
|
|
|
Number of shares used in per share computation: |
|
|
|
|
|
Basic |
|
17,653 |
|
|
|
17,599 |
|
Diluted |
|
17,653 |
|
|
|
17,669 |
|
|
|
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
January 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
162,585 |
|
$ |
95,764 |
|
|
$ |
17,128 |
|
$ |
(1,385 |
) |
|
$ |
274,092 |
Cost of sales |
|
150,919 |
|
|
96,416 |
|
|
|
14,914 |
|
|
(1,385 |
) |
|
|
260,864 |
Gross profit (loss) |
$ |
11,666 |
|
$ |
(652 |
) |
|
$ |
2,214 |
|
$ |
— |
|
|
$ |
13,228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
January 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
115,459 |
|
$ |
90,306 |
|
|
$ |
16,458 |
|
$ |
(1,645 |
) |
|
$ |
220,578 |
Cost of sales |
|
102,314 |
|
|
90,329 |
|
|
|
11,741 |
|
|
(1,645 |
) |
|
|
202,739 |
Gross profit (loss) |
$ |
13,145 |
|
$ |
(23 |
) |
|
$ |
4,717 |
|
$ |
— |
|
|
$ |
17,839 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended January 31, 2022 and
2021, intercompany sales and cost of sales of $0.6 million and
$0.5 million between Fresh products and RFG were eliminated. For
the three months ended January 31, 2022 and 2021, intercompany
sales and cost of sales of $0.8 million and $1.1 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 January
31, |
|
2022 |
|
2021 |
Net income (loss) attributable to Calavo Growers, Inc. |
$ |
(4,043 |
) |
|
$ |
5,277 |
|
Non-GAAP adjustments: |
|
|
|
|
|
Non-cash losses recognized
from unconsolidated entities (a) |
|
535 |
|
|
|
155 |
|
Loss (Recovery) from
FreshRealm and other related expenses (b) |
|
— |
|
|
|
(39 |
) |
Acquisition costs (c) |
|
— |
|
|
|
262 |
|
Net (gain) loss on Limoneira
shares (d) |
|
2,130 |
|
|
|
(3,589 |
) |
RFG rent expense add back
(e) |
|
108 |
|
|
|
108 |
|
Restructure costs -
consulting, management recruiting and severance (f) |
|
1,118 |
|
|
|
— |
|
Mexican tax matters (g) |
|
367 |
|
|
|
— |
|
Impairment and charges related
to closure of RFG Florida facility (h) |
|
654 |
|
|
|
— |
|
Tax impact of adjustments
(i) |
|
(1,238 |
) |
|
|
840 |
|
Adjusted net income attributed
to Calavo Growers, Inc. |
$ |
(369 |
) |
|
$ |
3,014 |
|
|
|
|
|
|
|
Calavo Growers, Inc.’s net
income (loss) per share: |
|
|
|
|
|
Diluted EPS (GAAP) |
$ |
(0.23 |
) |
|
$ |
0.30 |
|
Adjusted Diluted EPS |
$ |
(0.02 |
) |
|
$ |
0.17 |
|
|
|
|
|
|
|
Number of shares used in per
share computation: |
|
|
|
|
|
Diluted |
|
17,653 |
|
|
|
17,669 |
|
(a) |
|
For the three months ended
January 31, 2022 and 2021, we realized losses from Agricola Don
Memo totaling $0.5 million and $0.2 million. |
|
|
|
(b) |
|
As part of the FreshRealm
Separation Agreement, we received $0.1 million of previously
reserved receivables for the three months ended January 31, 2021.
Partially offsetting this benefit, we had professional fees related
to the FreshRealm Separation Agreement. |
|
|
|
(c) |
|
In the first quarter of 2021,
we incurred professional service costs related to a considered but
non-consummated acquisition. |
|
|
|
(d) |
|
For the three months ended
January 31, 2022 and 2021, we recorded $2.1 million in unrealized
losses and $3.6 million in unrealized gains related to these
mark-to-market adjustments, respectively. |
|
|
|
(e) |
|
For the three months ended
January 31, 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. |
|
|
|
(f) |
|
For the three months ended
January 31, 2022, we recorded $1.1 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 its operations. |
|
|
|
(g) |
|
For the three months ended
January 31, 2022, we incurred $0.4 million of related professional
fees have also been recorded as Expenses related to the Mexican tax
matters. |
|
|
|
(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
$0.7 million of expenses in the first quarter of fiscal 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
January 31, |
|
2022 |
|
2021 |
Net income (loss) attributable to Calavo Growers, Inc. |
$ |
(4,043 |
) |
|
$ |
5,277 |
|
Interest Income |
|
(133 |
) |
|
|
(72 |
) |
Interest Expense |
|
327 |
|
|
|
174 |
|
Provision (benefit) for Income
Taxes |
|
(1,160 |
) |
|
|
1,943 |
|
Depreciation &
Amortization |
|
4,312 |
|
|
|
4,294 |
|
Stock-Based Compensation |
|
556 |
|
|
|
907 |
|
EBITDA |
$ |
(141 |
) |
|
$ |
12,523 |
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
Non-cash losses recognized
from unconsolidated entities (a) |
|
535 |
|
|
|
155 |
|
Net (gain) loss on Limoneira
shares (d) |
|
2,130 |
|
|
|
(3,589 |
) |
Loss (Recovery) from
FreshRealm and other related expenses (b) |
|
— |
|
|
|
(39 |
) |
RFG rent expense add back
(e) |
|
108 |
|
|
|
108 |
|
Acquisition costs (c) |
|
— |
|
|
|
262 |
|
Restructure costs - consulting
and management recruiting and severance (f) |
|
1,118 |
|
|
|
— |
|
Expenses related to Mexican
tax matters (g) |
|
367 |
|
|
|
— |
|
Impairment and charges related
to closure of RFG Florida facility (h) |
|
618 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
4,735 |
|
|
$ |
9,420 |
|
Adjusted EBITDA per dilutive
share |
$ |
0.27 |
|
|
$ |
0.53 |
|
|
|
CALAVO
GROWERS, INC.OTHER INFORMATION
(UNAUDITED)(in thousands, except per pound
amounts)
|
Three months ended |
|
January 31, |
|
2022 |
|
2021 |
|
|
|
|
Pounds of avocados sold |
86,127 |
|
97,388 |
Pounds of processed avocado products sold |
5,826 |
|
5,448 |
Average sales price per pound - avocados |
1.74 |
|
1.06 |
Gross profit per pound - avocados |
0.12 |
|
0.12 |
Average sales price per pound – processed avocado products |
2.87 |
|
2.89 |
Gross profit per pound – processed avocado products |
0.43 |
|
0.86 |
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