Part I [Business](index=4&type=section&id=Item%201.%20Business) Calavo Growers is a global avocado leader and fresh food provider, operating through its 'Grown' and 'Prepared' segments - On April 13, 2022, the company announced a business reorganization into two reporting segments: **Grown** (fresh avocados, tomatoes, papayas) and **Prepared** (fresh-cut produce, ready-to-eat meals, guacamole, salsa)[12](index=12&type=chunk) - The Grown segment sources avocados from California, Mexico, Peru, and Colombia, emphasizing **year-round supply**, value-added ripening, and packaging to serve large national accounts[15](index=15&type=chunk)[17](index=17&type=chunk) - The Prepared segment utilizes **ultra-high pressure technology** for its guacamole products to ensure food safety and extend shelf-life without preservatives and offers a wide range of refrigerated fresh packaged foods[26](index=26&type=chunk)[27](index=27&type=chunk) Employee Count as of October 31, 2022 | Location | Salaried | Hourly | Total | | :--- | :--- | :--- | :--- | | United States | 331 | 1,133 | 1,464 | | Mexico | 217 | 1,585 | 1,802 | | **TOTAL** | **548** | **2,718** | **3,266** | [Risk Factors](index=8&type=section&id=Item%201A.%20Risk%20Factors) The company faces operational, financial, and regulatory risks, including supply chain issues and significant tax disputes - The company faces risks from the COVID-19 pandemic, including manufacturing and supply chain disruptions, increased costs, and potential **impairment of goodwill and intangible assets**[45](index=45&type=chunk)[46](index=46&type=chunk)[51](index=51&type=chunk) - A significant portion of revenue is derived from a small number of customers, with Kroger, Trader Joe's, and Wal-mart accounting for approximately **15%**, **11%**, and **10%** of total net sales, respectively, in fiscal 2022[82](index=82&type=chunk) - The company is involved in a significant dispute with the Mexican Tax Administrative Service (SAT) regarding a 2013 tax assessment totaling approximately **$151.5 million USD** as of October 31, 2022[120](index=120&type=chunk) - As of October 31, 2022, the company has outstanding value-added tax (IVA) receivables from Mexican tax authorities totaling **$43.6 million**, with collection subject to significant delays and disputes[126](index=126&type=chunk) - The company has experienced **recent transitions in key executive leadership positions**, including the Chief Executive Officer and Chief Financial Officer, which presents integration and retention risks[92](index=92&type=chunk)[93](index=93&type=chunk) [Properties](index=21&type=section&id=Item%202.%20Properties) The company operates a network of owned and leased packinghouses and processing facilities across the US and Mexico - The company owns and leases multiple packinghouses and operating/distributing facilities throughout the United States, including locations in California, New Jersey, Texas, Florida, and Hawaii[154](index=154&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk) - In Mexico, Calavo owns key facilities including a guacamole processing plant and a fresh avocado packinghouse in Uruapan, Michoacán, as well as a fresh avocado packinghouse in Ciudad Guzman, Jalisco[158](index=158&type=chunk) [Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding legal proceedings is disclosed in Note 7 of the consolidated financial statements - For information on legal proceedings, the report refers to **Note 7** of the consolidated financial statements[159](index=159&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=25&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock (CVGW) underperformed key indices, and its dividend policy shifted from annual to quarterly - In November 2022, the company changed its dividend policy from an **annual payment to a quarterly payment**[166](index=166&type=chunk) Fiscal 2022 Quarterly Stock Price | Quarter | High | Low | | :--- | :--- | :--- | | First Quarter | $44.56 | $37.00 | | Second Quarter | $45.26 | $32.75 | | Third Quarter | $44.57 | $28.76 | | Fourth Quarter | $45.50 | $29.51 | 5-Year Cumulative Total Return Comparison | Index | 10/17 | 10/18 | 10/19 | 10/20 | 10/21 | 10/22 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Calavo Growers, Inc. | $100.00 | $133.32 | $120.44 | $94.44 | $57.47 | $50.85 | | NASDAQ Composite | $100.00 | $109.74 | $125.95 | $167.31 | $239.24 | $170.91 | | Peer Group | $100.00 | $99.81 | $105.14 | $155.34 | $138.82 | $113.39 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2022 saw increased sales and gross profit, but the company faced cost inflation and tax disputes - In October 2022, the company sold its entire investment in Limoneira common stock for gross proceeds of approximately **$18.5 million**, using the net proceeds to pay down debt[182](index=182&type=chunk) - The company continues to pursue its **'Project Uno' strategic initiatives**, which are focused on operating efficiencies and cost savings to expand profit margins[188](index=188&type=chunk)[190](index=190&type=chunk) - Regarding the 2013 Mexican tax assessment, the company maintains a provision of **$11 million** based on its cumulative probability analysis, despite believing the assessment is without merit[199](index=199&type=chunk)[215](index=215&type=chunk) - The company was **out of compliance with certain financial covenants** in its credit facility as of October 31, 2021, and January 31, 2022, leading to several amendments that modified covenant terms[309](index=309&type=chunk)[312](index=312&type=chunk)[414](index=414&type=chunk) Net Sales by Segment (in thousands) | Segment | 2022 | % Change | 2021 | % Change | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Grown | $700,270 | 19% | $588,527 | 1% | $585,052 | | Prepared | $492,868 | 5% | $469,800 | (1)% | $475,970 | | Less intercompany elimins. | ($2,065) | (17)% | ($2,497) | 51% | ($1,651) | | **Total net sales** | **$1,191,073** | **13%** | **$1,055,830** | **(0)%** | **$1,059,371** | Gross Profit by Segment (in thousands) | Segment | 2022 | % Change | 2021 | % Change | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Grown | $50,165 | 5% | $47,787 | 0% | $47,563 | | Prepared | $23,680 | 146% | $9,638 | (77)% | $42,335 | | **Total gross profit** | **$73,845** | **29%** | **$57,425** | **(36)%**| **$89,898** | [Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include interest rate changes and foreign currency fluctuations, particularly the USD/MXN rate - The company's Mexican-based operations expose it to foreign currency risk, with total foreign currency translation losses of **$1.0 million** in fiscal 2022, compared to a gain of **$0.9 million** in 2021[321](index=321&type=chunk) - The company **does not use derivative instruments**, hedging, or forward contracts to offset market volatility related to interest rates or foreign currency[320](index=320&type=chunk) [Financial Statements and Supplementary Data](index=53&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited financial statements, with critical audit matters related to Mexican tax issues - The independent auditor, Deloitte & Touche LLP, identified two **critical audit matters**: the recoverability of Mexican IVA taxes receivable and the accounting for uncertain tax positions related to the 2013 Mexican tax audit[546](index=546&type=chunk)[547](index=547&type=chunk)[549](index=549&type=chunk) - As of October 31, 2022, the company had a goodwill balance of **$28.7 million**, with $4.0 million attributed to the Grown segment and $24.7 million to the Prepared segment[468](index=468&type=chunk) Consolidated Statement of Operations Highlights (in thousands) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Net sales | $1,191,073 | $1,055,830 | $1,059,371 | | Gross profit | $73,845 | $57,425 | $89,898 | | Operating income (loss) | $5,987 | ($9,997) | $32,162 | | Net loss attributable to CVGW | ($6,249) | ($11,818) | ($13,625) | | Diluted EPS | ($0.35) | ($0.67) | ($0.78) | Consolidated Balance Sheet Highlights (in thousands) | Metric | Oct 31, 2022 | Oct 31, 2021 | | :--- | :--- | :--- | | Total current assets | $125,674 | $152,641 | | Total assets | $385,746 | $445,402 | | Total current liabilities | $101,953 | $114,624 | | Total liabilities | $162,375 | $218,519 | | Total shareholders' equity | $223,371 | $226,883 | Part III [Directors, Executive Officers, and Corporate Governance](index=105&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) Information on directors and governance is incorporated by reference from the Proxy Statement - Detailed information required for Part III (Items 10-14) is **incorporated by reference** from the company's definitive Proxy Statement[571](index=571&type=chunk) - Brian Kocher has served as CEO since February 2022, and Shawn Munsell has served as CFO since June 2022, indicating **recent changes in top leadership**[573](index=573&type=chunk)[574](index=574&type=chunk) [Executive Compensation](index=106&type=section&id=Item%2011.%20Executive%20Compensation) Details on executive and director compensation are incorporated by reference from the Proxy Statement - The information required by this item is **incorporated by reference** from the sections entitled 'Executive Compensation' and 'Directors’ Compensation' in the Proxy Statement[580](index=580&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=106&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership and equity plan information is incorporated by reference from the Proxy Statement - The information required by this item is **incorporated by reference** from the sections entitled 'Security Ownership of Certain Beneficial Owners and Management' and 'Equity Compensation Plan Information' in the Proxy Statement[580](index=580&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=106&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions is incorporated by reference from the Proxy Statement - The information required by this item is **incorporated by reference** from the section entitled 'Certain Relationships and Related Transactions' in the Proxy Statement[581](index=581&type=chunk) [Principal Accountant's Fees and Services](index=106&type=section&id=Item%2014.%20Principal%20Accountant's%20Fees%20and%20Services) Details on principal accountant fees and services are incorporated by reference from the Proxy Statement - Information required by this item is **incorporated by reference** to the section of the Proxy Statement entitled 'Principal Accountant Fees and Services'[582](index=582&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=107&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the report - This section provides a comprehensive index of all exhibits filed with the Form 10-K, including merger agreements, bylaws, credit agreements, and executive employment contracts[584](index=584&type=chunk)[588](index=588&type=chunk)

Calavo® THE FAMILY OF Presh CALAVO GROWERS, INC. Investor Presentation NASDAQ GS: CVGW / SEPTEMBER 1, 2022 Safe Harbor Statement This presentation contains statements relating to future events and results of Calavo (including certain projections and business trends) that are "frorward-looking stateme 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 guarantees. If any of the risks or unc ...

Financial Data and Key Metrics Changes - Gross profit more than doubled to $18.5 million compared to Q3 last year, with net income improving to $0.07 per share from a loss of $0.74 per share [6][29] - Adjusted EBITDA improved by more than $7 million year-over-year, but decreased by $4.6 million sequentially from Q2 [6][37] - Consolidated revenue for Q3 was $342 million, an increase of $10.6 million from the second quarter [27] Business Line Data and Key Metrics Changes - Grown segment revenue was $207.6 million, down about $3 million from the second quarter, with avocado volume down almost 20% due to supply constraints [27][10] - Prepared segment revenue was $134.9 million, up $14 million from the second quarter, benefiting from price and mix initiatives [28] - The former RFG portion of the Prepared segment achieved a gross margin of 7.7%, up from just over 2% in the prior quarter [30][21] Market Data and Key Metrics Changes - Mexican avocado import volume was down 34% versus the second quarter and 35% year-over-year [10] - Input costs in the Prepared segment were up 50% compared to last year, but began to decline over the course of the quarter [18][19] - Market prices for avocados decreased over $20 a carton from the beginning to the end of July [11] Company Strategy and Development Direction - The company has implemented a new segment reporting structure, combining Foods and RFG segments into a new Prepared segment [5] - The opening of the Jalisco facility for exports to the U.S. market is expected to enhance sourcing capabilities and provide flexibility [15][16] - The company aims for the Prepared segment to achieve gross margins of 10% to 12% by the end of fiscal 2023 [43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about recovering avocado market prices and expected margins to normalize in Q4 [14][41] - The company is focused on continuous improvement and managing commodity volatility effectively [45][52] - Management acknowledged the challenges faced in Q3 but highlighted the progress made in operational efficiency and debt reduction [49][51] Other Important Information - The company generated strong cash from operations of over $20 million and paid down $16 million in debt during the quarter [39][40] - Year-to-date gross profit through Q3 totaled $53.5 million, up from $48.3 million for the prior year [32] Q&A Session Summary Question: How should we be thinking about supply-demand setup as we pivot into the fall? - Management noted that supply and demand are rebalancing, with a larger summer harvest contributing to lower prices and reduced purchase costs [55] Question: Have you seen any changes in consumer buying behavior due to inflation pressures? - Management indicated it is difficult to assess real demand due to supply constraints, but noted some retailers reduced promotions when prices were high [60][61] Question: Where are you in building out the team and what new abilities does it give you? - Management expressed excitement about the newly filled leadership roles and the structured transition plan in place for new team members [65][67] Question: Can you talk about the sourcing for the processed avocado business and how it has changed? - Management highlighted a shift towards diversifying sourcing geographically and noted that raw product costs have significantly decreased [75][78] Question: What are your expectations for profitability levels in a more regular operating environment? - Management expects to see gross margins consistent with historical levels as inventory flows through at current prices [81] Question: Was there anything one-time in nature that led to the gross margin increase in the RFG business? - Management confirmed that the increase was primarily due to steady progress across the P&L, with no unusual or non-recurring items [87]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Calavo Growers, Inc.'s unaudited consolidated financial statements and explanatory notes, covering financial position, performance, and key events [Consolidated Condensed Balance Sheets](index=5&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) The balance sheets show a slight decrease in total assets and working capital from October 2021 to July 2022, with changes in liabilities Consolidated Condensed Balance Sheet Highlights (in thousands) | Metric | July 31, 2022 | October 31, 2021 | | :------------------------------------ | :------------ | :--------------- | | Total Assets | $430,525 | $445,402 | | Total Current Assets | $148,445 | $152,641 | | Total Current Liabilities | $118,454 | $114,624 | | Total Long-term Liabilities | $86,232 | $103,895 | | Cash and Cash Equivalents | $2,505 | $1,885 | | Payable to Growers | $35,748 | $23,033 | [Consolidated Condensed Statements of Operations](index=7&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) Statements of operations show significant net sales and gross profit increases, despite a nine-month net loss attributable to Calavo Growers, Inc Consolidated Condensed Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended July 31, 2022 | Three Months Ended July 31, 2021 | Nine Months Ended July 31, 2022 | Nine Months Ended July 31, 2021 | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net Sales | $341,991 | $285,008 | $947,501 | $782,407 | | Cost of Sales | $323,477 | $277,141 | $894,017 | $734,101 | | Gross Profit | $18,514 | $7,867 | $53,484 | $48,306 | | Operating Income (Loss) | $1,552 | $(5,808) | $2,973 | $6,752 | | Net Income (Loss) Attributable to Calavo Growers, Inc. | $1,300 | $(12,981) | $(2,933) | $1,137 | | Diluted EPS | $0.07 | $(0.74) | $(0.17) | $0.06 | [Consolidated Condensed Statements of Cash Flows](index=8&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) Operating cash flow significantly increased, while financing cash usage rose due to dividends and credit facility payments Consolidated Condensed Statements of Cash Flows Highlights (in thousands) | Metric | Nine Months Ended July 31, 2022 | Nine Months Ended July 31, 2021 | | :-------------------------------------- | :------------------------------ | :------------------------------ | | Net Cash Provided by Operating Activities | $42,184 | $12,396 | | Net Cash Used in Investing Activities | $(7,738) | $(8,465) | | Net Cash Used in Financing Activities | $(33,835) | $(6,648) | | Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | $611 | $(2,717) | | Cash, Cash Equivalents and Restricted Cash, End of Period | $3,466 | $1,338 | [Consolidated Condensed Statements of Shareholders' Equity](index=9&type=section&id=Consolidated%20Condensed%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity statements show changes from stock compensation and net income/loss, resulting in a total equity decrease Consolidated Condensed Statements of Shareholders' Equity Highlights (in thousands) | Metric | July 31, 2022 | October 31, 2021 | | :------------------------------------------------- | :------------ | :--------------- | | Total Shareholders' Equity | $225,839 | $226,883 | | Net Income (Loss) Attributable to Calavo Growers, Inc. (9M) | $(2,933) | $1,137 | | Stock Compensation Expense (9M) | $2,123 | $2,818 | [Notes to Consolidated Condensed Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Condensed%20Financial%20Statements) These notes provide essential context for the financial statements, detailing business operations, segment reporting, and significant events [1. Description of the business](index=10&type=section&id=1.%20Description%20of%20the%20business) Calavo Growers, Inc. is a global leader in the avocado industry, operating in Grown and Prepared fresh food segments - Calavo operates in two business segments: **Grown** (fresh avocados, tomatoes, papayas) and **Prepared** (fresh-cut fruits/vegetables, guacamole, salsa, etc.)[26](index=26&type=chunk)[29](index=29&type=chunk) [2. Information regarding our operations in different segments](index=10&type=section&id=2.%20Information%20regarding%20our%20operations%20in%20different%20segments) The company reorganized into Grown and Prepared segments in Q3 2022, reallocating goodwill and recasting sales data, with foreign currency impacts - Business reorganized into Grown and Prepared segments starting Q3 2022, with goodwill reallocated accordingly (**$24.7 million** to Prepared, **$4.0 million** to Grown)[29](index=29&type=chunk)[30](index=30&type=chunk) Net Sales by Segment (in thousands) | Segment | Three Months Ended July 31, 2022 | Three Months Ended July 31, 2021 | Nine Months Ended July 31, 2022 | Nine Months Ended July 31, 2021 | | :------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Grown | $207,119 | $160,908 | $579,612 | $436,810 | | Prepared | $134,872 | $124,100 | $367,889 | $345,597 | | Total Net Sales | $341,991 | $285,008 | $947,501 | $782,407 | Foreign Currency Remeasurement (in millions) | Period | 2022 (Loss) | 2021 (Gain) | | :----- | :---------- | :---------- | | Three Months | $(0.4) | $0.6 | | Nine Months | $(1.3) | $1.2 | [3. Inventories](index=15&type=section&id=3.%20Inventories) Total inventories decreased from October 2021 to July 2022, with a breakdown across fresh fruit, supplies, and prepared foods Inventories (in thousands) | Category | July 31, 2022 | October 31, 2021 | | :----------------------------- | :------------ | :--------------- | | Fresh fruit | $14,793 | $17,648 | | Packing supplies and ingredients | $14,621 | $13,088 | | Finished prepared foods | $6,659 | $10,021 | | **Total** | **$36,073** | **$40,757** | [4. Related party transactions](index=15&type=section&id=4.%20Related%20party%20transactions) The company engages in various related party transactions, including avocado procurement, Limoneira dealings, and advances with unconsolidated entities Avocados Procured from Board Members (in millions) | Period | 2022 | 2021 | | :----------- | :--- | :--- | | Three Months | $5.7 | $10.4 | | Nine Months | $7.3 | $15.4 | - Calavo owns approximately **9%** of Limoneira Company, receiving **$0.1 million** in dividend income for Q3 2022 and **$0.4 million** for 9M 2022, while paying **$0.1 million** in rent for Q3 2022 and **$0.3 million** for 9M 2022[43](index=43&type=chunk) - Investment in Agricola Don Memo (**50%** ownership) was **$3.5 million** as of July 31, 2022, with outstanding advances of **$6.4 million**[45](index=45&type=chunk) - Grower advances due from Belher totaled **$3.5 million** as of July 31, 2022; **$1.1 million** was withheld from payments to Belher in Q3/9M 2022 to offset bridge loan repayments[48](index=48&type=chunk) [5. Other assets and Intangibles](index=17&type=section&id=5.%20Other%20assets%20and%20Intangibles) Other assets are mainly Mexican IVA taxes receivable, while net intangible assets decreased with a projected amortization schedule Other Assets (in thousands) | Category | July 31, 2022 | October 31, 2021 | | :------------------------------------ | :------------ | :--------------- | | Mexican IVA taxes receivable | $41,265 | $37,493 | | Infrastructure advances to Agricola Belher | $1,641 | $1,641 | | Bridge loan to Agricola Belher | $1,700 | — | | Other | $815 | $1,366 | | **Total** | **$45,421** | **$40,500** | Intangibles, Net (in thousands) | Category | July 31, 2022 | October 31, 2021 | | :-------------------- | :------------ | :--------------- | | Customer list/relationships | $6,312 | $7,351 | | Trade names | $990 | $1,080 | | Trade secrets/recipes | $10 | $63 | | Brand name intangibles | $275 | $275 | | **Total Intangibles, net** | **$7,587** | **$8,769** | - Anticipated amortization expense: **$0.4 million** (remainder of FY2022), **$1.5 million** (FY2023), **$1.5 million** (FY2024), **$1.5 million** (FY2025), and **$2.4 million** thereafter[54](index=54&type=chunk) [6. Stock-Based Compensation](index=18&type=section&id=6.%20Stock-Based%20Compensation) The company granted various stock-based awards under its 2011 and 2020 Plans, resulting in recognized and unrecognized compensation expenses - The 2020 Equity Incentive Plan, approved in April 2021, allows for up to **1,500,000 shares** to be issued through December 2025[55](index=55&type=chunk) - Key restricted stock grants in FY2022 include **5,355 shares** to officers, **28,140 shares** to directors, and **28,993 shares** to the new CEO, Brian Kocher[56](index=56&type=chunk)[57](index=57&type=chunk)[59](index=59&type=chunk) Total Recognized Stock-Based Compensation Expense (Restricted Stock, in millions) | Period | 2022 | 2021 | | :----------- | :--- | :--- | | Three Months | $0.4 | $0.6 | | Nine Months | $1.8 | $2.8 | - Unrecognized stock-based compensation expense for restricted stock totaled **$1.7 million** as of July 31, 2022, to be amortized through fiscal year 2024[62](index=62&type=chunk) - **34,269 RSUs** and **34,269 PRSUs** were granted in April 2022, with **$2.2 million** of unrecognized compensation costs as of July 31, 2022, to be recognized over **2.3 years**[63](index=63&type=chunk) [7. Other events](index=22&type=section&id=7.%20Other%20events) This section details a dividend payment, ongoing litigation, and updates on significant Mexican tax audits, including legal challenges and provisions - A **$1.15 per share** dividend, totaling **$20.3 million**, was paid on December 3, 2021[70](index=70&type=chunk) - The 2011 Mexican Tax Assessment was settled for approximately **$2.4 million USD** in June 2021[73](index=73&type=chunk) - The 2013 Mexican Tax Assessment totals approximately **$127.6 million USD** (as of July 31, 2022), plus **$5.8 million USD** in employee profit-sharing liability[80](index=80&type=chunk) - The company is actively disputing the 2013 Assessment through administrative appeals, injunction suits, and an Annulment Suit, which has provisionally suspended collection proceedings[82](index=82&type=chunk)[84](index=84&type=chunk)[86](index=86&type=chunk)[90](index=90&type=chunk) - An Administrative Guaranty has been offered to secure the 2013 Assessment, aiming to remove existing liens and suspend the SAT collection process[91](index=91&type=chunk) - A provision of **$11 million USD** was recorded in Q3 2021 for the 2013 Assessment, and professional fees of **$0.3 million** (Q3 2022) and **$1.1 million** (9M 2022) have been incurred[95](index=95&type=chunk) [8. Fair value measurements](index=28&type=section&id=8.%20Fair%20value%20measurements) The company's investment in Limoneira Company common stock is measured at fair value, showing a Q3 2022 gain but a nine-month loss Investment in Limoneira Company (in thousands) | Date | Value | | :------------ | :------ | | July 31, 2022 | $21,251 | | October 31, 2021 | $27,055 | Unrealized Net Gain (Loss) on Limoneira Shares (in millions) | Period | 2022 | 2021 | | :----------- | :--- | :--- | | Three Months | $1.2 (gain) | $(0.3) (loss) | | Nine Months | $(5.8) (loss) | $6.8 (gain) | [9. Noncontrolling interest](index=28&type=section&id=9.%20Noncontrolling%20interest) Noncontrolling interest, mainly from Avocados de Jalisco, decreased from July 2021 to July 2022, reflecting a nine-month net loss Avocados de Jalisco Noncontrolling Interest (in thousands) | Period | July 31, 2022 | July 31, 2021 | | :------------------------------------------------- | :------------ | :------------ | | Noncontrolling Interest, Ending | $1,183 | $1,451 | | Net Income (Loss) Attributable to Noncontrolling Interest (9M) | $(185) (loss) | $(21) (loss) | [10. Earnings per share](index=28&type=section&id=10.%20Earnings%20per%20share) Diluted EPS showed a positive shift for Q3 2022 but remained a loss for the nine-month period, with anti-dilutive shares excluded Diluted EPS (Attributable to Calavo Growers, Inc.) | Period | 2022 | 2021 | | :----------- | :--- | :--- | | Three Months | $0.07 | $(0.74) | | Nine Months | $(0.17) | $0.06 | - Approximately **65,000** common stock equivalents (9M 2022) and **52,000** (Q3 2021) were excluded from diluted EPS computation due to their anti-dilutive effect during net loss periods[103](index=103&type=chunk) [11. Mexican IVA taxes receivable](index=29&type=section&id=11.%20Mexican%20IVA%20taxes%20receivable) Mexican IVA receivables increased to **$41.3 million**, with the company pursuing collection and a favorable court ruling supporting substantial recovery Mexican IVA Receivables (in millions) | Date | Amount | | :------------ | :----- | | July 31, 2022 | $41.3 | | October 31, 2021 | $37.5 | - A favorable Tax Court ruling in April 2022 recognized CDM's maquila operations, non-taxable avocado purchase deposits, and the recoverability of VAT, except for **$0.3 million USD** related to certain packing materials[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk)[111](index=111&type=chunk) - The company is appealing the unrecoverable VAT amount and believes it has strong legal grounds to prevail in collecting substantially all corresponding IVA amounts[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) [12. Credit Facility](index=31&type=section&id=12.%20Credit%20Facility) The credit facility was amended with increased interest rates, revised covenants, and a reduction to **$80 million**, with **$16.8 million** available as of July 31, 2022 - Fourth and Fifth Amendments (Dec 2021) increased interest rate by **0.5%** and amended financial covenants, including waiving FCCR for certain quarters and introducing a cumulative monthly minimum Consolidated EBITDA covenant[115](index=115&type=chunk) - Sixth Amendment (March 2022) waived prior non-compliance, set new minimum Consolidated EBITDA targets, and adjusted FCCR calculation[118](index=118&type=chunk) - Total facility reduced from **$100 million** to **$80 million**, with a borrowing base tied to accounts receivable, US inventory, and Limoneira shares[119](index=119&type=chunk)[236](index=236&type=chunk) - As of July 31, 2022, the company was in compliance with financial covenants and had **$16.8 million** available for borrowing[120](index=120&type=chunk)[237](index=237&type=chunk) Credit Facility Outstanding Borrowings (in millions) | Date | Amount | | :------------ | :----- | | July 31, 2022 | $25.6 | | October 31, 2021 | $37.7 | [13. COVID-19 Pandemic Impact](index=32&type=section&id=13.%20COVID-19%20Pandemic%20Impact) The COVID-19 pandemic continues to cause inflationary pressures, supply chain disruptions, and increased costs, particularly affecting foodservice and retail segments - Ongoing inflationary and cost pressures on raw materials, packaging, labor, and freight due to the pandemic[121](index=121&type=chunk) - Experiencing supply chain disruptions, including strained transportation capacity and labor availability issues[121](index=121&type=chunk) - Impacts are more pronounced in foodservice and certain retail segments (e.g., behind-the-glass deli, grab-and-go convenience items)[122](index=122&type=chunk) [14. Closure of Florida facility](index=32&type=section&id=14.%20Closure%20of%20Florida%20facility) The Florida facility ceased operations in November 2021 as part of Project Uno, incurring restructuring costs and asset write-downs, with sub-lease plans - Prepared segment's Green Cove Springs, Florida facility ceased operations on November 15, 2021, as part of Project Uno[124](index=124&type=chunk)[160](index=160&type=chunk) - Closure resulted in **140** employee reductions, **$8.7 million** impairment of leasehold improvements, **$0.1 million** equipment write-down, and **$0.6 million** inventory write-down in Q4 2021[125](index=125&type=chunk)[161](index=161&type=chunk) - Incurred **$1.0 million** of incremental restructuring and related costs during the nine months ended July 31, 2022, due to the transition to other facilities[129](index=129&type=chunk)[163](index=163&type=chunk) - The company intends to seek a sub-lease tenant for the vacated facility, which has right-of-use assets of **$4.1 million** and lease liabilities of **$5.3 million** as of July 31, 2022[128](index=128&type=chunk)[162](index=162&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, condition, and operations, covering recent developments, segment performance, and liquidity, including COVID-19 impacts [Recent Developments](index=35&type=section&id=Recent%20Developments) Recent developments include segment reorganization, COVID-19 impacts, a dividend payment, Project Uno, and updates on Mexican tax audits and IVA receivables [Change in Reporting Segments](index=35&type=section&id=Change%20in%20Reporting%20Segments) Calavo reorganized into Grown and Prepared reporting segments effective Q3 2022, aligning with CEO performance measurement and resource allocation - Business reorganized into Grown (fresh avocados, tomatoes, papayas) and Prepared (fresh-cut fruits/vegetables, ready-to-eat items, guacamole, salsa, avocado pulp) segments, effective Q3 2022[132](index=132&type=chunk) [COVID-19 Pandemic Impact](index=35&type=section&id=COVID-19%20Pandemic%20Impact) The COVID-19 pandemic continues to cause inflationary pressures, supply chain disruptions, and increased costs, particularly affecting foodservice and retail segments - Ongoing inflationary and cost pressures on raw materials, packaging, labor, and freight due to the pandemic[133](index=133&type=chunk) - Experiencing supply chain disruptions, including strained transportation capacity and labor availability issues[133](index=133&type=chunk) - Impacts are more pronounced in foodservice and certain retail segments (e.g., behind-the-glass deli, grab-and-go convenience items)[134](index=134&type=chunk) [COVID-19 Recovery Economic Impact](index=35&type=section&id=COVID-19%20Recovery%20Economic%20Impact) COVID-19 recovery drives increased labor, commodity, and logistical costs, leading to price increases for Prepared products to offset margin compression - Increasing labor costs, commodity costs, and logistical costs due to COVID-19 recovery and current economic climate[136](index=136&type=chunk) - Implementing price increases for Prepared products to offset rising costs, reverse margin compression, and invest in growth[138](index=138&type=chunk) [Dividend payment](index=37&type=section&id=Dividend%20payment) A **$1.15 per share** dividend, totaling **$20.3 million**, was paid on December 3, 2021 - A **$1.15 per share** dividend, totaling **$20.3 million**, was paid on December 3, 2021[139](index=139&type=chunk) [Litigation](index=37&type=section&id=Litigation) The company is involved in routine litigation, not expecting a material adverse impact on its financial statements - Company is involved in routine litigation arising in the ordinary course of business[140](index=140&type=chunk) - Management does not believe litigation will have a material adverse impact on financial statements[140](index=140&type=chunk) [Project Uno](index=37&type=section&id=Project%20Uno) Project Uno, launched in Q3 2021, is a strategic initiative for operational efficiencies and cost savings, aiming to expand profit margins and cash flow - Project Uno is a strategic initiative launched in Q3 2021 to identify operating efficiencies and cost savings[141](index=141&type=chunk) - Initiatives include closing the Florida Prepared plant, supply chain improvements, integrating commercial/logistics/IT/procurement/accounting functions, product rationalization, and outsourcing[141](index=141&type=chunk) - Goals are to expand profit margins, cash flow, and return on invested capital[141](index=141&type=chunk) [Mexico tax audits](index=37&type=section&id=Mexico%20tax%20audits) The company disputes a **$127.6 million** 2013 Mexican tax assessment, pursuing legal challenges and settlement discussions, with an **$11 million** provision - The 2013 Mexican Tax Assessment totals approximately **$127.6 million USD** (as of July 31, 2022), plus **$5.8 million USD** in employee profit-sharing liability[80](index=80&type=chunk)[152](index=152&type=chunk) - Company is pursuing legal challenges (injunction suits, Annulment Suit) and settlement discussions with the SAT, having offered an Administrative Guaranty to secure the assessment[143](index=143&type=chunk)[144](index=144&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk) - A provision of **$11 million USD** was recorded in Q3 2021 for the 2013 Assessment, and professional fees of **$0.3 million** (Q3 2022) and **$1.1 million** (9M 2022) have been incurred[152](index=152&type=chunk) [Mexican IVA taxes receivable](index=39&type=section&id=Mexican%20IVA%20taxes%20receivable) The company seeks to recover **$41.3 million** in Mexican IVA receivables, supported by a recent court ruling despite tax authority objections - Mexican IVA receivables totaled **$41.3 million** (July 31, 2022), with collection efforts facing delays and objections from tax authorities[105](index=105&type=chunk)[153](index=153&type=chunk) - A favorable Tax Court ruling in April 2022 recognized CDM's maquila operations and the recoverability of most VAT amounts, strengthening the company's position[154](index=154&type=chunk)[156](index=156&type=chunk) [Closure of Florida facility](index=41&type=section&id=Closure%20of%20Florida%20facility) The Florida facility ceased operations in November 2021 as part of Project Uno, incurring restructuring costs and asset write-downs, with sub-lease plans - Prepared segment's Green Cove Springs, Florida facility ceased operations on November 15, 2021, as part of Project Uno[160](index=160&type=chunk) - Closure resulted in **140** employee reductions, asset impairments (**$8.7 million** leasehold, **$0.1 million** equipment, **$0.6 million** inventory in Q4 2021), and **$1.0 million** incremental restructuring costs (9M 2022)[161](index=161&type=chunk)[163](index=163&type=chunk) [Critical Accounting Estimates](index=41&type=section&id=Critical%20Accounting%20Estimates) Financial statements rely on estimates, with no material changes in critical accounting estimates except for goodwill impairment due to segment realignment - No material changes in critical accounting estimates during the period, except for the goodwill impairment evaluation due to operating segment realignment[167](index=167&type=chunk) - Goodwill for the RFG reporting unit (**$24.7 million**) is now included in the Prepared reporting unit, while **$4.0 million** in Grown remained unchanged[168](index=168&type=chunk) [Non-GAAP Financial Measures](index=43&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures like Adjusted Net Income, EPS, and EBITDA, used by management for performance evaluation Adjusted Net Income (in thousands) | Period | 2022 | 2021 | | :----------- | :----- | :------- | | Three Months | $2,856 | $(3,044) | | Nine Months | $8,272 | $7,603 | Adjusted Diluted EPS | Period | 2022 | 2021 | | :----------- | :--- | :--- | | Three Months | $0.16 | $(0.17) | | Nine Months | $0.47 | $0.43 | Adjusted EBITDA (in thousands) | Period | 2022 | 2021 | | :----------- | :----- | :------- | | Three Months | $8,107 | $1,020 | | Nine Months | $25,520 | $25,444 | [Net Sales](index=49&type=section&id=Net%20Sales) Net sales significantly increased for both three and nine months ended July 31, 2022, driven by higher prices in Grown and Prepared segments Net Sales (in thousands) | Period | 2022 | 2021 | Change (%) | | :----------- | :------- | :------- | :--------- | | Three Months | $341,991 | $285,008 | 20% | | Nine Months | $947,501 | $782,407 | 21% | - Grown product sales increase primarily due to higher avocado prices, offset by lower volume. Prepared product sales increase due to higher prices for fresh-cut fruit & vegetables and prepared foods[186](index=186&type=chunk) [Results of Operations](index=49&type=section&id=Results%20of%20Operations) This section details Grown and Prepared segment performance, highlighting drivers of net sales increases and the impact of volume changes [Summary](index=49&type=section&id=Summary_Results_of_Operations) Net sales increased **20%** (three months) and **21%** (nine months) driven by higher avocado prices in Grown and increased prices in Prepared segments - Net sales increased by **$57.0 million** (**20%**) for the three months and **$165.1 million** (**21%**) for the nine months ended July 31, 2022[185](index=185&type=chunk) - Grown segment sales increase was primarily due to higher avocado prices, while Prepared segment sales increase was due to higher prices for fresh-cut fruit & vegetables and prepared foods[186](index=186&type=chunk) - The company has begun importing avocados from its Avocados de Jalisco subsidiary, expecting increased volume in Q4 2022[187](index=187&type=chunk) [Grown products](index=49&type=section&id=Grown%20products) Grown product net sales significantly increased due to higher avocado prices despite lower volume, with mixed tomato sales performance - Grown product net sales increased by **$46.0 million** (**28%**) for Q3 2022 and **$142.4 million** (**32%**) for 9M 2022[188](index=188&type=chunk)[193](index=193&type=chunk) - Avocado sales increased **33%** (Q3) and **35%** (9M) due to a **63%** (Q3) and **58%** (9M) increase in average sales price per carton, despite a **19%** (Q3) and **14%** (9M) decrease in volume[189](index=189&type=chunk)[190](index=190&type=chunk)[194](index=194&type=chunk) - Tomato sales decreased **21%** (Q3) due to a **24%** volume decrease, but increased **7%** (9M) due to a **9%** volume increase, partially offset by a **2%** price decrease[192](index=192&type=chunk)[195](index=195&type=chunk) [Prepared products](index=51&type=section&id=Prepared%20products) Prepared product net sales increased due to higher prices for fresh-cut and prepared foods, partially offset by lower prepared avocado product volume - Prepared product net sales increased by **$11.2 million** (**9%**) for Q3 2022 and **$22.1 million** (**6%**) for 9M 2022[196](index=196&type=chunk)[199](index=199&type=chunk) - Fresh-cut fruit & vegetables and prepared foods sales increased **13%** (Q3) and **8%** (9M), driven by price increases (**20%** in Q3, **14%** in 9M) and favorable product mix, despite volume decreases[197](index=197&type=chunk)[200](index=200&type=chunk) - Prepared avocado product sales decreased **9%** (Q3) and **3%** (9M) primarily due to lower total volume sold[198](index=198&type=chunk)[201](index=201&type=chunk) [Gross Profit](index=53&type=section&id=Gross%20Profit) Gross profit significantly increased for both three and nine months ended July 31, 2022, driven by improvements in Prepared and Grown segments [Summary](index=53&type=section&id=Summary_Gross_Profit) Gross profit increased **135%** (three months) and **11%** (nine months), primarily due to gains in the Prepared segment and Grown segment avocados Total Gross Profit (in thousands) | Period | 2022 | 2021 | Change (%) | | :----------- | :------- | :------- | :--------- | | Three Months | $18,514 | $7,867 | 135% | | Nine Months | $53,484 | $48,306 | 11% | - The increase was primarily attributable to gross profit increases in the Prepared segment and across both Prepared and Grown segments for the nine-month period[205](index=205&type=chunk) [Grown products](index=53&type=section&id=Grown%20products_Gross_Profit) Grown products gross profit decreased in Q3 due to lower tomato/papaya and currency impact, but increased over nine months due to avocados Grown Products Gross Profit (in thousands) | Period | 2022 | 2021 | Change (%) | | :----------- | :------- | :------- | :--------- | | Three Months | $11,771 | $12,202 | (4)% | | Nine Months | $41,594 | $40,355 | 3% | - Avocado gross profit percentage decreased to **5.9%** (Q3 2022) and **7.2%** (9M 2022) from **7.5%** (Q3 2021) and **9.2%** (9M 2021), as sales price increases outpaced gross profit per case[206](index=206&type=chunk)[208](index=208&type=chunk) - Gross profit was negatively affected by Mexican peso remeasurement losses of **$0.4 million** (Q3 2022) and **$1.3 million** (9M 2022)[207](index=207&type=chunk)[209](index=209&type=chunk) [Prepared products](index=55&type=section&id=Prepared%20products_Gross_Profit) Prepared products gross profit increased for fresh-cut and prepared foods due to higher prices and efficiency, but prepared avocado products incurred a significant gross loss Prepared Products Gross Profit (in thousands) | Period | 2022 | 2021 | Change (%) | | :----------- | :------- | :------- | :--------- | | Three Months | $6,743 | $(4,335) | 256% | | Nine Months | $11,890 | $7,951 | 50% | - Fresh-cut fruit & vegetables and prepared foods gross profit percentages improved to **7.7%** (Q3 2022) and **3.4%** (9M 2022) from losses in prior periods, driven by price increases, reduced distribution, and improved productivity[214](index=214&type=chunk) - Prepared avocado products experienced a gross loss percentage of **11.5%** (Q3 2022) and a reduced gross profit percentage of **3.3%** (9M 2022), primarily due to higher raw product fruit costs and increased manufacturing costs[215](index=215&type=chunk) [Selling, General and Administrative](index=55&type=section&id=Selling,%20General%20and%20Administrative) SG&A expenses increased **35%** (three months) and **20%** (nine months), driven by consulting, recruiting, re-categorized costs, and bonus accruals Selling, General and Administrative Expenses (in thousands) | Period | 2022 | 2021 | Change (%) | | :----------- | :------- | :------- | :--------- | | Three Months | $16,713 | $12,387 | 35% | | Nine Months | $48,566 | $40,374 | 20% | - Key drivers for the increase include consulting services and recruiting fees for restructuring (**$1.3 million** Q3, **$2.8 million** 9M), re-categorized costs (**$1.7 million** Q3), increased bonus accruals (**$0.8 million** Q3), and investment in key personnel (**$1.3 million** 9M)[217](index=217&type=chunk)[218](index=218&type=chunk) [Loss from unconsolidated entities](index=57&type=section&id=Loss%20from%20unconsolidated%20entities) Losses from unconsolidated entities, mainly Agricola Don Memo, decreased **43%** (three months) and **54%** (nine months) Loss from Unconsolidated Entities (in thousands) | Period | 2022 | 2021 | Change (%) | | :----------- | :----- | :------- | :--------- | | Three Months | $(269) | $(469) | (43)% | | Nine Months | $(812) | $(1,755) | (54)% | - Losses primarily stem from the company's investment in Agricola Don Memo[221](index=221&type=chunk) [Income Taxes Benefit (Provision)](index=57&type=section&id=Income%20Taxes%20Benefit%20(Provision)) The company recorded an income tax provision of **$(984) thousand** (three months) and a benefit of **$363 thousand** (nine months), impacted by discrete taxable items Income Tax Benefit (Provision) (in thousands) | Period | 2022 | 2021 | Change (%) | | :----------- | :------- | :--------- | :--------- | | Three Months | $(984) | $(12,358) | (92)% | | Nine Months | $363 | $(17,073) | (102)% | | Effective Tax Rate (Q3) | 42.8% | (2,218.7)% | | | Effective Tax Rate (9M) | 10.4% | 93.9% | | - Discrete taxable items of **$1.4 million** in Q3 2022, primarily related to rate differentials from prior year carryback losses and non-deductibility of certain Mexican tax expenses, impacted the tax provision[221](index=221&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) Operating cash flow significantly increased, while financing cash usage rose; the company maintains liquidity through cash, operations, and an **$80 million** credit facility - Cash provided by operating activities increased to **$42.2 million** for the nine months ended July 31, 2022, from **$12.4 million** in the prior year[222](index=222&type=chunk) - Cash used in financing activities was **$33.9 million** for the nine months ended July 31, 2022, primarily for a **$20.3 million** dividend payment and **$12.1 million** in net credit facility payments[226](index=226&type=chunk) Working Capital (in millions) | Date | Amount | | :------------ | :----- | | July 31, 2022 | $29.5 | | October 31, 2021 | $38.0 | - The company has an **$80 million** revolving credit facility, with **$25.6 million** outstanding and **$16.8 million** available for borrowing as of July 31, 2022[228](index=228&type=chunk)[237](index=237&type=chunk) - The company was in compliance with amended financial covenants as of July 31, 2022, and expects to remain compliant through September 2023[237](index=237&type=chunk) [Contractual Commitments](index=61&type=section&id=Contractual%20Commitments) No material changes to contractual commitments have occurred since the 2021 Annual Report on Form 10-K - No material changes to contractual commitments since the 2021 Annual Report on Form 10-K[238](index=238&type=chunk) [Impact of Recently Issued Accounting Pronouncements](index=61&type=section&id=Impact%20of%20Recently%20Issued%20Accounting%20Pronouncements) The adoption of ASU 2019-12, "Income Taxes," in Q1 2022 did not materially impact the company's financial statements - ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes," adopted in Q1 2022, had no impact on financial statements[28](index=28&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate and foreign currency exchange rate risks, primarily with the Mexican peso, and does not use derivative instruments - Primary market risks include interest rate risk (variable rate credit facilities) and foreign currency exchange rate risk (Mexican peso to U.S. dollar)[239](index=239&type=chunk)[241](index=241&type=chunk) - The company does not use derivative instruments for hedging or speculative purposes[240](index=240&type=chunk) Foreign Currency Remeasurement (in millions) | Period | 2022 (Loss) | 2021 (Gain) | | :----------- | :---------- | :---------- | | Three Months | $(0.4) | $0.4 | | Nine Months | $(1.3) | $1.2 | [Item 4. Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of July 31, 2022, despite recent management and internal control changes - Disclosure controls and procedures were deemed effective as of July 31, 2022, following an evaluation by management, including the CEO and CFO[247](index=247&type=chunk) - Changes in management structure, including the placement of a new Chief Financial Officer, resulted in shifts in internal control over financial reporting responsibilities[248](index=248&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, with further details available in Note 7 of the financial statements - The company is involved in litigation arising in the ordinary course of business[249](index=249&type=chunk) - Further information on legal proceedings is available in Note 7 of the financial statements[249](index=249&type=chunk) [Item 1A. Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors from the 2021 Annual Report on Form 10-K, though unknown risks may still adversely affect the business - No material changes to the risk factors presented in the Annual Report on Form 10-K for the fiscal year ended October 31, 2021[250](index=250&type=chunk) - Acknowledges that additional risks and uncertainties not currently known or deemed immaterial may adversely affect the business[250](index=250&type=chunk) [Item 5. Other Information](index=63&type=section&id=Item%205.%20Other%20Information) The company corrected an administrative error in its Amended and Restated Bylaws, filing the correct version as an exhibit to this Form 10-Q - An administrative error in the Amended and Restated Bylaws (effective September 25, 2014) was identified and corrected[251](index=251&type=chunk) - The correct version of the bylaws is included as Exhibit 3.1 to this Form 10-Q[251](index=251&type=chunk) [Item 6. Exhibits](index=64&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance, employment agreements, and financial data - Key exhibits include Amended and Restated Bylaws (3.1), Employment Agreements (10.2, 10.3), CEO/CFO Certifications (31.1, 31.2, 32.1), and Inline XBRL financial information (101, 104)[253](index=253&type=chunk)[254](index=254&type=chunk) [Signatures](index=65&type=section&id=Signatures) The Quarterly Report on Form 10-Q was signed on September 1, 2022, by Brian Kocher (CEO) and Shawn Munsell (CFO) - The report was signed by Brian Kocher (President and CEO) and Shawn Munsell (CFO) on September 1, 2022[261](index=261&type=chunk)

Calavo Growers, Inc. (NASDAQ:CVGW) Q2 2022 Earnings Conference Call June 2, 2022 5:00 PM ET Company Participants Julie Kegley - IR Brian Kocher - President and CEO Conference Call Participants Eric Larson - Seaport Research Mitch Pinheiro - Sturdivant and Company Ben Klieve - Lake Street Capital Markets Operator Good afternoon, and welcome to the Second Quarter 2022 Calavo Growers Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] I will now turn the ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | |-------------------------------------------------------------------------|--------------------------------------------------------------------------------------- ...

Calavo Growers, Inc. (NASDAQ:CVGW) Q1 2022 Earnings Conference Call March 14, 2022 5:00 PM ET Company Participants Larry Clark - IR Brian Kocher - President and CEO Mariela Matute - CFO Conference Call Participants Ben Bienvenu - Stephens Robert Dickerson - Jefferies Ben Klieve - Lake Street Capital Eric Larson - Seaport Research Partners Mitchell Pinheiro - Sturdivant and Company Operator Good afternoon and welcome to the First Quarter 2022 Calavo Growers Earnings Conference Call and Webcast. [Operator Ins ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | |-------------------------------------------------------------------------|------------------------------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - In Q4 2021, consolidated revenue increased by 17% year-over-year, primarily driven by a 26% increase in the Fresh segment, which saw a 37% rise in average selling price for avocados, despite a 7% decline in volume [23][24] - Gross profit margins declined year-over-year due to lower volume and higher costs, with RFG gross profit down nearly $8 million due to market-wide pressures [27][28] - The company ended the quarter with $141 million in cash and liquid investments, maintaining a strong financial position and low leverage [32] Business Segment Data and Key Metrics Changes - Fresh segment revenue increased by 26%, driven by higher average selling prices, while RFG revenue rose by 7% due to a favorable product mix and price increases [23][24] - The Food segment experienced a 6% increase in sales, mainly from higher volume from foodservice customers and price increases [24] - Project Uno is expected to yield an annualized EBITDA increase of $70 million, with a total one-time cost of approximately $30 million [15][30] Market Data and Key Metrics Changes - U.S. avocado demand continues to grow, with per capita consumption exceeding 9 pounds, double the rate from a decade ago [7][8] - The Hispanic population in the U.S., a key consumer group for avocados, is expected to double by 2050, further driving demand [9] Company Strategy and Development Direction - The company is focused on Project Uno, which aims to unify supply chains and drive synergies across divisions, with over 40 initiatives already in progress [15][65] - The opening of the Jalisco facility for avocado shipments to the U.S. is expected to provide flexibility in managing supply and demand, enhancing margin opportunities [11][43] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2021, including labor shortages and high freight costs, but noted improvements in market conditions as they entered Q1 2022 [5][6] - The long-term outlook remains favorable, although current market conditions make it difficult to predict when inflationary pressures will ease [35] Other Important Information - The company announced a $1.15 per share annual dividend, consistent with the previous year, continuing a tradition since going public in 2002 [6] - The board plans to reduce its size from 11 to 9 directors, aligning with the company's size [16] Q&A Session Summary Question: Can you provide insight on the progression through fiscal 2022 and major milestones for Project Uno? - Management expects proportional benefits from Project Uno each quarter, with investments needed initially to realize these benefits [38] Question: What is the size and expected capacity utilization of the Jalisco facility? - The Jalisco facility is about half the size of the Michoacan facility and is expected to start shipments in April, providing another avenue for supply [43] Question: How are pricing and volume dynamics affecting gross margins? - Higher prices are expected to improve margins, but the company is also focused on increasing volume to lower packing costs [50] Question: What is the outlook for the RFG segment's gross margins? - The closure of the Jacksonville facility is expected to yield annualized savings of $4 million to $6 million, positively impacting gross margins [53] Question: How is the company managing labor costs and pricing in the current environment? - Labor costs have stabilized, and retail partners have been amenable to price increases, allowing the company to manage costs effectively [72]

Callavo. CALAVO GROWERS, INC. INVESTOR PRESENTATION NASDAQ GS: CVGW DECEMBER 2021 SAFE HARBOR STATEMENT This presentation 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 o ...