Calavo reports net loss, but revenue growth

Santa Paula-based Calavo Growers saw its revenue increase year over year in the fourth quarter of 2021, and despite a net loss for the quarter, the company exceeded analysts’ expectations.

Calavo, an avocado distributor, reported revenue of $ 273.4 million for the quarter ended Oct. 31, an increase of 17% from the same quarter a year ago.

However, the company suffered a net loss of $ 13 million, or 73 cents per share, in the fourth quarter of 2021, mainly due to a $ 9.7 million write-down of Calavo’s operations in Florida, the company said. company in a press release.

The adjusted net loss was only $ 1.8 million, or 8 cents per share as a result.

The company’s revenue and adjusted net loss exceeded Zacks Consensus Estimate’s projection of revenue of $ 253.6 million and a loss of 18 cents per share for the quarter.

Calavo shares were down 4.6% on the December 20 trading day, with a closing price of $ 39.73. There was no movement after hours.

“At the start of the fourth quarter, we saw a continuation of the difficult market conditions we experienced in the third quarter, including inflationary effects on labor, materials and freight,” said Steve Hollister, Interim CEO of Calavo Growers, in a press release.

“We also continued to face challenges with harvesting avocados, including high fruit costs and less desirable sizes.”

Hollister added, however, that market conditions and supply chain issues caused by the COVID-19 pandemic “improved” as the fourth quarter progressed, allowing the company “a steady monthly improvement. , and we ended the quarter with stronger financial results than at the start of the quarter. “

The revenue growth is mainly driven by a 26% increase in fresh segment sales, as the average selling price of avocados in this segment was 37% higher, partially offset by 7% lower volumes compared to the period from the previous year due to “sub-optimal sizes in August in California and Mexico.”

The Renaissance food group and Calavo food segments are also growing by 7% and 6% year over year, respectively.

For the year, Calavo generated $ 1.1 billion in revenue, almost the same amount he raised last year.

The company posted a net loss of $ 11.8 million, 67 cents per share, for the better year than the prior year when it had a net loss of $ 13.6 million, 78 cents per share.

Adjusted net income was $ 6.2 million, 35 cents per share, down from adjusted net income of $ 27.6 million or $ 1.57 per share in fiscal 2020 .

Calavo ended the year with $ 2.9 million of cash and cash equivalents with total cash of $ 141.2 million including unallocated cash, investments and borrowings available under a line credit.

She also ended the year with total debt of $ 44.8 million, $ 37.7 million in line of credit borrowings and $ 7.1 million in long-term bonds and finance leases.

Ann J. Cox