Calavo Growers, Inc. Announces Third Quarter and Nine-Month Period Ended July 31, 2025 Financial Results

Core Viewpoint - Calavo Growers, Inc. reported its financial results for the third fiscal quarter and nine-month period ended July 31, 2025, highlighting challenges in the Fresh segment due to a temporary FDA detention hold, while the Prepared segment showed significant growth [1][10]. Third Quarter Financial Overview - Total net sales were $178.8 million, a decrease of less than 1% from the prior year [6][11]. - Fresh segment sales were $155.9 million, a 5% decrease from the prior year, while Prepared segment sales were $22.9 million, a 40% increase [6][20]. - Gross profit was $18.2 million, a 9% decrease from the prior year quarter, impacted by approximately $4.2 million in costs related to the FDA detention hold [6][20]. - Net income from continuing operations was $4.7 million, or $0.26 per diluted share, compared to $5.4 million, or $0.30 per diluted share, in the prior year [6][15]. - Adjusted net income was $10.2 million, or $0.57 per diluted share, compared to $10.0 million, or $0.56 per diluted share, in the prior year [6][15]. - Adjusted EBITDA was $15.1 million, compared to $12.9 million in the prior year [6][15]. Nine-Month Period Financial Overview - Total net sales for the nine months ended July 31, 2025, were $523.8 million, a 7% increase from the prior year period [16][19]. - Fresh segment sales were $470.3 million, a 6% increase, while Prepared segment sales were $53.5 million, a 10% increase [16][21]. - Gross profit for the nine-month period was $52.0 million, a 1% increase from the prior year period [17][19]. - Net income from continuing operations was $16.1 million, or $0.89 per diluted share, compared to $9.3 million, or $0.52 per diluted share, in the prior year period [19][19]. - Adjusted net income increased to $23.8 million, or $1.33 per diluted share, compared to $19.2 million, or $1.08 per diluted share in the prior year period [19][19]. - Adjusted EBITDA was $35.7 million, compared to $29.9 million in the prior year period [19][19]. Segment Performance - Fresh segment results reflected an 8% decrease in cartons sold, driven by declines in both avocado and tomato carton sales [7][20]. - Prepared segment net sales increased primarily due to a 35% increase in sales volume [7][20]. - Fresh segment gross profit was $12.4 million, a 32% decrease from the prior year, while Prepared segment gross profit was $5.8 million, a 201% increase from the prior year [6][20]. Balance Sheet and Liquidity - As of July 31, 2025, the company had cash and cash equivalents of $63.8 million and $114.3 million in available liquidity [22][22]. - Total debt was $5.1 million, consisting of other long-term obligations and finance leases [22][22]. Management Commentary - Management noted that the third quarter results highlight both challenges and opportunities, particularly in the Fresh segment due to the FDA detention hold, while the Prepared segment showed strong growth [10][10]. - The FDA matter has been resolved, and management believes it was a non-recurring event [10][10]. - The company projects Prepared segment sales of approximately $115 million for fiscal 2026, indicating a positive outlook for growth [10][10].