Calavo Growers Q4 Net Earnings Up 69%

Revenues totaled $141.6 million versus $147.3 million in the fiscal 2011 fourth quarter, owing primarily to the decline in fresh avocados prices which has resulted from the significantly larger current-year fruit supply.

08 Jan 2013 --- Calavo Growers Announces Fiscal 2012 Fourth Quarter and Full-Year Results Food Group, LLC (RFG) business segment are now reported separately from the legacy Calavo Foods business segment.

For the three months ended Oct. 31, 2012, net income advanced to a record $6.2 million, equal to $0.42 per diluted share, from $3.6 million, or $0.25 per diluted share in the fiscal 2011 fourth quarter. Revenues totaled $141.6 million versus $147.3 million in the fiscal 2011 fourth quarter, owing primarily to the decline in fresh avocados prices which has resulted from the significantly larger current-year fruit supply.

Gross margin in the final quarter advanced 35 percent to a record $17.9 million, equal to 12.6 percent of total revenues, from $13.2 million, or 9.0 percent of total revenues, in the corresponding quarter one year ago. Operating income increased to $7.6 million, a 19 percent jump from $6.4 million in the fourth quarter of fiscal 2011.

Fourth-quarter selling, general and administrative (SG&A) expenses totaled $10.3 million, equal to 7.2 percent of revenues, versus $6.8 million, or 4.6 percent of revenues, in the same quarter last year. The increased SG&A in the most-recent quarter is principally attributable to costs associated with Calavo’s management-incentive plan for surpassing earnings targets. SG&A as a percentage of gross margin increased to 57.4 percent in the most recent quarter from 51.6 percent in the year-earlier fourth quarter.

Chairman, President and CEO Lee E. Cole stated: “Calavo registered the single-highest net income for any period in its history during the final quarter, enabling us to post results for fiscal 2012 that are among its best ever, including revenues and gross margin which shattered previous record highs. We benefitted from strong showings in each of our three business segments and this operating momentum continues to validate the strategic blueprint we established for the company—all indicators are trending favorably.”

Cole continued: “A substantially larger avocado harvest in California resulted in Calavo packing nearly 900,000 more cartons of fruit in the final quarter than a year earlier and approximately 2.4 million more units for the whole of fiscal 2012, bringing to more than 12 million the total number packed. The significantly larger crop paced volume through our unit-driven packinghouses and benefited Fresh business segment.
 
Calavo Growers Announces Fiscal 2012 Fourth Quarter and Full-Year Results and overall gross margin. As anticipated, our legacy Calavo Foods business posted outstanding results for the quarter and full year, capitalizing on higher sales and favorable fruit costs owing to a larger supply in the marketplace which, in turn, fueled strong gross margins.  And RFG, which completed its initial full fiscal year as part of Calavo, performed to our expectations and provided excellent incremental contribution to the company’s top line.”

Cole added that the strength of Calavo’s operating results enabled it to return to shareholders more than $9.6 million subsequent to fiscal-year end in the form of the company’s annual cash dividend, which was increased by 18 percent from the prior year to $0.65 per share. As point of note, since 2002 Calavo’s annual cash dividend has risen consistently from $0.20 per share to its current payout level.
Net income for the fiscal year ended Oct. 31, 2012 climbed to $17.1 million, equal to $1.15 per diluted share, from $11.1 million, or $0.75 per diluted share, one year earlier. Fiscal 2012 results include the effect of a $1.8 million income tax expense recorded in the second quarter related to an unfavorable ruling in a disputed matter with Mexico’s tax authority’s examination of the 2004 tax year.

Net income for fiscal 2012 before the Mexican tax item was $18.9 million, equal to $1.27 per diluted share.

Revenues for the most-recent year rose five percent to $551.1 million, a new historic high, from $522.5 million in fiscal 2011.  Annual gross margin climbed 43 percent to a record $60.7 million from $42.3 million in fiscal 2011 and eclipsing the prior high of $51.5 million established two years earlier.  Operating income vaulted to $27.5 million in fiscal 2012, an increase of 50 percent from $18.3 million in the corresponding period one year ago.

In Calavo’s Fresh business segment, final-quarter revenues totaled $91.0 million, down from $102.3 million in last year’s fourth quarter. The year-to-year decline in segment revenues is indicative of the aforementioned, significantly larger supply of avocados in the marketplace, as compared to fiscal 2011, which resulted in substantially lower prices during the current year for the quarter. Total Fresh segment volume totaled 3.7 million units in the most-recent quarter, increasing 29 percent from 2.9.

Calavo Growers Announces Fiscal 2012 Fourth Quarter and Full-Year Results million units shipped in the fourth quarter of fiscal 2011. Fresh segment gross margin advanced to $11.4 million, or 12.5 percent of segment sales, from $7.7 million, approximating 7.5 percent of segment sales, in last year’s fourth quarter.

Revenues in the Calavo Foods business segment edged upward in the final quarter to $11.6 million from $11.2 million in the fiscal 2011 fourth quarter. The business unit—encompassing the company’s legacy products, including prepared avocados, salsa and tortilla chips—continued to benefit from the aforementioned larger supply of fruit in the marketplace and, to a less significant extent, improved pricing. These factors proved beneficial to Calavo Foods’ gross margins in the most recent quarter, which rose to $3.2 million, or 27.5 percent of that business unit’s sales, from
$2.7 million, or 23.9 percent of segment sales, one year ago.

RFG business segment revenues jumped 15 percent to $39.0 million from $33.9 million in the fourth quarter of fiscal 2011. RFG gross margin in the most-recent quarter totaled $3.3 million, or 8.4 percent of segment sales, versus $2.9 million, or 8.5 percent of segment sales, in the fiscal 2011 fourth quarter.