Document and Entity Information
Document and Entity Information | 9 Months Ended |
Jul. 31, 2020shares | |
Document and Entity Information | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jul. 31, 2020 |
Document Transition Report | false |
Entity File Number | 000-33385 |
Entity Registrant Name | CALAVO GROWERS, INC |
Entity Incorporation, State or Country Code | CA |
Entity Tax Identification Number | 33-0945304 |
Entity Address, Address Line One | 1141-A Cummings Road |
Entity Address, City or Town | Santa Paula |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 93060 |
City Area Code | 805 |
Local Phone Number | 525-1245 |
Title of 12(b) Security | Common Stock |
Trading Symbol | CVGW |
Security Exchange Name | NASDAQ |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 17,656,816 |
Entity Central Index Key | 0001133470 |
Current Fiscal Year End Date | --10-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 31, 2020 | Oct. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 3,573 | $ 7,973 |
Accounts receivable, net of allowances of $3,706 (2020) $3,366 (2019) | 69,724 | 63,423 |
Inventories, net | 43,944 | 36,889 |
Prepaid expenses and other current assets | 10,365 | 9,027 |
Advances to suppliers | 3,265 | 7,338 |
Income taxes receivable | 7,543 | 2,865 |
Total current assets | 138,414 | 127,515 |
Property, plant, and equipment, net | 130,923 | 132,098 |
Operating lease right-of-use assets | 61,875 | |
Investment in Limoneira Company | 22,610 | 31,734 |
Investments in unconsolidated entities | 5,800 | 10,722 |
Deferred income taxes | 8,081 | 3,447 |
Goodwill | 28,469 | 18,262 |
Notes receivable from FreshRealm | 35,241 | |
Other assets | 41,093 | 31,341 |
Total assets | 437,265 | 390,360 |
Current liabilities: | ||
Payable to growers | 18,490 | 13,463 |
Trade accounts payable | 10,640 | 17,421 |
Accrued expenses | 37,010 | 39,629 |
Short-term borrowings | 24,600 | |
Dividend payable | 19,354 | |
Current portion of operating leases | 6,399 | |
Current portion of long-term obligations and finance leases | 1,275 | 762 |
Total current liabilities | 98,414 | 90,629 |
Long-term liabilities: | ||
Long-term operating leases, less current portion | 59,899 | |
Long-term obligations and finance leases, less current portion | 5,903 | 5,412 |
Deferred rent | 3,681 | |
Other long-term liabilities | 3,519 | 4,769 |
Total long-term liabilities | 69,321 | 13,862 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Common stock ($0.001 par value, 100,000 shares authorized; 17,657 (2020) and 17,595 (2019) shares issued and outstanding) | 18 | 18 |
Additional paid-in capital | 164,082 | 161,606 |
Noncontrolling interest | 1,560 | 1,688 |
Retained earnings | 103,870 | 122,557 |
Total shareholders' equity | 269,530 | 285,869 |
Total liabilities and shareholders' equity | $ 437,265 | $ 390,360 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) shares in Thousands, $ in Thousands | Jul. 31, 2020 | Oct. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowances of accounts receivable | $ 3,706 | $ 3,366 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 17,657 | 17,595 |
Common stock, shares outstanding | 17,657 | 17,595 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 270,425 | $ 359,332 | $ 824,941 | $ 903,601 |
Cost of sales | 239,590 | 323,557 | 756,223 | 800,152 |
Gross profit | 30,835 | 35,775 | 68,718 | 103,449 |
Selling, general and administrative | 13,424 | 14,295 | 44,226 | 44,228 |
Gain on sale of Temecula packinghouse | 54 | 75 | 162 | 2,002 |
Operating income | 17,465 | 21,555 | 24,654 | 61,223 |
Interest expense | (203) | (228) | (732) | (847) |
Other income, net | 628 | 936 | 2,250 | 2,332 |
Loss on reserve for FreshRealm note receivable and impairment of investment | (37,192) | (37,192) | ||
Unrealized and realized net gain (loss) on Limoneira shares | 218 | (5,116) | (9,125) | (8,262) |
Income (loss) before provision (benefit) for income taxes and loss from unconsolidated entities | (19,084) | 17,147 | (20,145) | 54,446 |
Income tax benefit (provision) | 4,682 | (3,987) | 6,540 | (11,093) |
Net loss from unconsolidated entities | (1,170) | (2,510) | (6,375) | (11,944) |
Net income (loss) | (15,572) | 10,650 | (19,980) | 31,409 |
Less: Net loss (income) attributable to noncontrolling interest | (64) | (47) | 128 | 26 |
Net income (loss) attributable to Calavo Growers, Inc. | $ (15,636) | $ 10,603 | $ (19,852) | $ 31,435 |
Calavo Growers, Inc.'s net income (loss) per share: | ||||
Basic | $ (0.89) | $ 0.61 | $ (1.13) | $ 1.79 |
Diluted | $ (0.89) | $ 0.60 | $ (1.13) | $ 1.79 |
Number of shares used in per share computation: | ||||
Basic | 17,586 | 17,525 | 17,558 | 17,517 |
Diluted | 17,586 | 17,605 | 17,558 | 17,589 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Cash Flows from Operating Activities: | ||
Net income (loss) | $ (19,980) | $ 31,409 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 11,850 | 10,173 |
Non-cash operating lease expense | 145 | |
Provision for losses on accounts receivable | 83 | |
Net loss from unconsolidated entities | 6,375 | 11,945 |
Unrealized and realized net loss on Limoneira shares | 9,125 | 8,262 |
Loss on reserve for FreshRealm note receivable and impairment of investment | 37,192 | |
Interest income on notes to FreshRealm | (1,732) | (1,643) |
Stock-based compensation expense | 3,569 | 2,710 |
Gain on sale of Temecula packinghouse | (162) | (2,002) |
Loss on disposal of property, plant, and equipment | 230 | |
Deferred income taxes on FreshRealm reserve | (7,525) | |
Effect on cash of changes in operating assets and liabilities: | ||
Accounts receivable, net | (4,045) | (21,917) |
Inventories, net | (6,363) | (11,296) |
Prepaid expenses and other current assets | (814) | (652) |
Advances to suppliers | 4,873 | 1,215 |
Income taxes receivable/payable | (4,678) | 3,160 |
Other assets | (9) | (3,754) |
Payable to growers | 5,027 | 20,596 |
Deferred rent | 954 | |
Trade accounts payable, accrued expenses and other long-term liabilities | (12,722) | 11,239 |
Net cash provided by (used in) operating activities | 20,356 | 60,482 |
Cash Flows from Investing Activities: | ||
Acquisitions of and deposits on property, plant, and equipment | (8,349) | (11,701) |
Acquisition of SFFI, net of cash acquired of $623 | (18,396) | |
Proceeds received for repayment of San Rafael note | 339 | |
Proceeds received from Limoneira stock sales | 1,154 | |
Proceeds from sale of Temecula packinghouse | 7,100 | |
Investment in FreshRealm | (1,477) | |
Notes receivables advanced to FreshRealm | (20,100) | |
Net cash used in investing activities | (28,222) | (23,208) |
Cash Flows from Financing Activities: | ||
Payment of dividend to shareholders | (19,354) | (17,568) |
Proceeds from revolving credit facility | 172,450 | 195,500 |
Payments on revolving credit facility | (147,850) | (210,500) |
Payments of minimum withholding taxes on net share settlement of equity awards | (1,179) | (1,008) |
Payments on long-term obligations and finance leases | (687) | (135) |
Proceeds from stock option exercises | 86 | 85 |
Net cash provided by (used in) financing activities | 3,466 | (33,626) |
Net increase (decrease) in cash and cash equivalents | (4,400) | 3,648 |
Cash and cash equivalents, beginning of period | 7,973 | 1,520 |
Cash and cash equivalents, end of period | 3,573 | 5,168 |
Noncash Investing and Financing Activities: | ||
Right of use assets obtained in exchange for new financing lease obligations | 593 | |
Notes receivable from FreshRealm converted to investment in FreshRealm | 2,761 | |
Acquisitions of property, plant, and equipment with capital lease | 2,827 | |
Capital lease related to Temecula packinghouse | 3,306 | |
Property, plant, and equipment included in trade accounts payable and accrued expenses | 568 | 2,484 |
Collection for Agricola Belher Infrastructure Advance | $ 800 | $ 800 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands | 9 Months Ended |
Jul. 31, 2020USD ($) | |
Statement of Cash Flows [Abstract] | |
Cash acquired | $ 623 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance at Oct. 31, 2018 | $ 18 | $ 157,928 | $ 12,141 | $ 93,124 | $ 1,748 | $ 264,959 |
Beginning balance, shares at Oct. 31, 2018 | 17,567 | |||||
Exercise of stock options and income tax benefit | 47 | 47 | ||||
Exercise of stock options and income tax benefit, shares | 2 | |||||
Stock compensation expense | 966 | 966 | ||||
Restricted stock issued, shares | 24 | |||||
Unrealized gains on Limoneira investment reclassed to retained earnings | (12,141) | 12,141 | ||||
Avocados de Jalisco noncontrolling interest contribution | (6) | (6) | ||||
Net income (loss) attributable to Calavo Growers, Inc. | 4,487 | 4,487 | ||||
Ending balance at Jan. 31, 2019 | $ 18 | 158,941 | 109,752 | 1,742 | 270,453 | |
Ending balance, shares at Jan. 31, 2019 | 17,593 | |||||
Beginning balance at Oct. 31, 2018 | $ 18 | 157,928 | $ 12,141 | 93,124 | 1,748 | 264,959 |
Beginning balance, shares at Oct. 31, 2018 | 17,567 | |||||
Net income (loss) attributable to Calavo Growers, Inc. | 31,435 | |||||
Ending balance at Jul. 31, 2019 | $ 18 | 160,722 | 136,700 | 1,722 | 299,162 | |
Ending balance, shares at Jul. 31, 2019 | 17,595 | |||||
Beginning balance at Jan. 31, 2019 | $ 18 | 158,941 | 109,752 | 1,742 | 270,453 | |
Beginning balance, shares at Jan. 31, 2019 | 17,593 | |||||
Exercise of stock options and income tax benefit | 37 | 37 | ||||
Exercise of stock options and income tax benefit, shares | 2 | |||||
Stock compensation expense | 860 | 860 | ||||
Avocados de Jalisco noncontrolling interest contribution | (67) | (67) | ||||
Net income (loss) attributable to Calavo Growers, Inc. | 16,345 | 16,345 | ||||
Ending balance at Apr. 30, 2019 | $ 18 | 159,838 | 126,097 | 1,675 | 287,628 | |
Ending balance, shares at Apr. 30, 2019 | 17,595 | |||||
Stock compensation expense | 884 | 884 | ||||
Avocados de Jalisco noncontrolling interest contribution | 47 | 47 | ||||
Net income (loss) attributable to Calavo Growers, Inc. | 10,603 | 10,603 | ||||
Ending balance at Jul. 31, 2019 | $ 18 | 160,722 | 136,700 | 1,722 | 299,162 | |
Ending balance, shares at Jul. 31, 2019 | 17,595 | |||||
Beginning balance at Oct. 31, 2019 | $ 18 | 161,606 | 122,557 | 1,688 | 285,869 | |
Beginning balance, shares at Oct. 31, 2019 | 17,595 | |||||
Cumulative effect adjustment on ASC 842 related to leases | 1,165 | 1,165 | ||||
Exercise of stock options and income tax benefit | 47 | 47 | ||||
Exercise of stock options and income tax benefit, shares | 2 | |||||
Stock compensation expense | 931 | 931 | ||||
Restricted stock issued, shares | 17 | |||||
Avocados de Jalisco noncontrolling interest contribution | (63) | (63) | ||||
Net income (loss) attributable to Calavo Growers, Inc. | (938) | (938) | ||||
Ending balance at Jan. 31, 2020 | $ 18 | 162,584 | 122,784 | 1,625 | 287,011 | |
Ending balance, shares at Jan. 31, 2020 | 17,614 | |||||
Beginning balance at Oct. 31, 2019 | $ 18 | 161,606 | 122,557 | 1,688 | 285,869 | |
Beginning balance, shares at Oct. 31, 2019 | 17,595 | |||||
Net income (loss) attributable to Calavo Growers, Inc. | (19,852) | |||||
Ending balance at Jul. 31, 2020 | $ 18 | 164,082 | 103,870 | 1,560 | 269,530 | |
Ending balance, shares at Jul. 31, 2020 | 17,657 | |||||
Beginning balance at Jan. 31, 2020 | $ 18 | 162,584 | 122,784 | 1,625 | 287,011 | |
Beginning balance, shares at Jan. 31, 2020 | 17,614 | |||||
Exercise of stock options and income tax benefit | 39 | 39 | ||||
Exercise of stock options and income tax benefit, shares | 2 | |||||
Stock compensation expense | 667 | 667 | ||||
Restricted stock issued | 1,119 | 1,119 | ||||
Restricted stock issued, shares | 23 | |||||
Payments of minimum withholding taxes on net share settlement of equity awards | (1,179) | (1,179) | ||||
Avocados de Jalisco noncontrolling interest contribution | (129) | (129) | ||||
Net income (loss) attributable to Calavo Growers, Inc. | (3,278) | (3,278) | ||||
Ending balance at Apr. 30, 2020 | $ 18 | 163,230 | 119,506 | 1,496 | 284,250 | |
Ending balance, shares at Apr. 30, 2020 | 17,639 | |||||
Stock compensation expense | 852 | 852 | ||||
Restricted stock issued, shares | 18 | |||||
Avocados de Jalisco noncontrolling interest contribution | 64 | 64 | ||||
Net income (loss) attributable to Calavo Growers, Inc. | (15,636) | (15,636) | ||||
Ending balance at Jul. 31, 2020 | $ 18 | $ 164,082 | $ 103,870 | $ 1,560 | $ 269,530 | |
Ending balance, shares at Jul. 31, 2020 | 17,657 |
Description of the business
Description of the business | 9 Months Ended |
Jul. 31, 2020 | |
Description of the business | |
Description of the business | 1. Description of the business Business Calavo Growers, Inc. (Calavo, the Company, we, us or our), is a global leader in the avocado industry and a provider of value-added fresh food. Our expertise in marketing and distributing avocados, prepared avocados, and other perishable foods allows us to deliver a wide array of fresh and prepared food products to retail grocery, foodservice, club stores, mass merchandisers, food distributors and wholesalers on a worldwide basis. We procure avocados from California, Mexico and other growing regions around the world. Through our various operating facilities, we (i) sort, pack, and/or ripen avocados, tomatoes and/or Hawaiian grown papayas, (ii) create, process and package a portfolio of healthy fresh foods including fresh-cut fruit and vegetables, and prepared foods and (iii) process and package guacamole and salsa. We distribute our products both domestically and internationally and report our operations in three different business segments: Fresh products, Calavo Foods and Renaissance Food Group (RFG). The accompanying unaudited consolidated condensed financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments, consisting of adjustments of a normal recurring nature necessary to present fairly the Company’s financial position, results of operations and cash flows. The results of operations for interim periods are not necessarily indicative of the results that may be expected for a full year. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended Recently Adopted Accounting Pronouncements In June 2018, the FASB issued an ASU , Improvements to Nonemployee Share-Based Payment Accounting In February 2018, the FASB issued an ASU, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income Recently Issued Accounting Standards In October 2018, the FASB issued ASU 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities In September 2018, the FASB issued Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. In January 2017, the FASB issued an ASU, Simplifying the Test for Goodwill Impairment, In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Measurement of Credit Losses on Financial Instruments, and subsequent amendments to the guidance |
Information regarding our opera
Information regarding our operations in different segments | 9 Months Ended |
Jul. 31, 2020 | |
Information regarding our operations in different segments | |
Information regarding our operations in different segments | 2. Information regarding our operations in different segments We report our operations in three different business segments: (1) Fresh products, (2) Calavo Foods, and (3) RFG. These business segments are presented based on how information is used by our Chief Executive Officer to measure performance and allocate resources. The Fresh products segment includes operations that involve the distribution of avocados and other fresh produce products. The Calavo Foods segment represents operations related to the purchase, manufacturing, and distribution of prepared avocado products, including guacamole, and salsa. The RFG segment represents operations related to the manufacturing and distribution of fresh-cut fruit, fresh-cut vegetables, and prepared foods. Selling, general and administrative expenses, as well as other non-operating income/expense items, are evaluated by our Chief Executive Officer in the aggregate. We do not allocate assets, or specifically identify them to, our operating segments. Data in the following tables is presented in thousands: Three months ended July 31, 2020 Three months ended July 31, 2019 Fresh Calavo Fresh Calavo products Foods RFG Total products Foods RFG Total Avocados $ 145,670 $ — $ — $ 145,670 $ 196,047 $ — $ — $ 196,047 Tomatoes 13,827 — — 13,827 8,708 — — 8,708 Papayas 2,695 — — 2,695 3,105 — — 3,105 Other fresh products 88 — — 88 424 — — 424 Prepared avocado products — 19,764 — 19,764 — 27,427 — 27,427 Salsa — 816 — 816 — 930 — 930 Fresh-cut fruit & veg. and prepared foods — — 91,200 91,200 — — 128,428 128,428 Total gross sales 162,280 20,580 91,200 274,060 208,284 28,357 128,428 365,069 Less sales incentives (141) (1,613) (277) (2,031) (554) (2,561) (917) (4,032) Less inter-company eliminations (399) (1,205) — (1,604) (741) (964) — (1,705) Net sales $ 161,740 $ 17,762 $ 90,923 $ 270,425 $ 206,989 $ 24,832 $ 127,511 $ 359,332 Nine months ended July 31, 2020 Nine months ended July 31, 2019 Fresh Calavo Fresh Calavo products Foods RFG Total products Foods RFG Total Avocados $ 413,335 $ — $ — $ 413,335 $ 435,125 $ — $ — $ 435,125 Tomatoes 46,151 — — 46,151 34,616 — — 34,616 Papayas 7,677 — — 7,677 7,853 — — 7,853 Other fresh products 328 — — 328 615 — — 615 Prepared avocado products — 60,683 — 60,683 — 75,310 — 75,310 Salsa — 2,143 — 2,143 — 2,452 — 2,452 Fresh-cut fruit & veg. and prepared foods — — 306,853 306,853 — — 362,607 362,607 Total gross sales 467,491 62,826 306,853 837,170 478,209 77,762 362,607 918,578 Less sales incentives (1,294) (5,522) (1,467) (8,283) (1,623) (6,851) (2,043) (10,517) Less inter-company eliminations (1,098) (2,848) — (3,946) (1,807) (2,653) — (4,460) Net sales $ 465,099 $ 54,456 $ 305,386 $ 824,941 $ 474,779 $ 68,258 $ 360,564 $ 903,601 Fresh Calavo Interco. products Foods RFG Elimins. Total (All amounts are presented in thousands) Three months ended July 31, 2020 Net sales $ 162,139 $ 18,967 $ 90,923 $ (1,604) $ 270,425 Cost of sales 144,405 13,921 82,868 (1,604) 239,590 Gross profit $ 17,734 $ 5,046 $ 8,055 $ — $ 30,835 Three months ended July 31, 2019 Net sales $ 207,730 $ 25,796 $ 127,511 $ (1,705) $ 359,332 Cost of sales 182,346 22,952 119,964 (1,705) 323,557 Gross profit $ 25,384 $ 2,844 $ 7,547 $ — $ 35,775 Nine months ended July 31, 2020 Net sales $ 466,197 $ 57,304 $ 305,386 $ (3,946) $ 824,941 Cost of sales 427,476 40,973 291,720 (3,946) 756,223 Gross profit $ 38,721 $ 16,331 $ 13,666 $ — $ 68,718 Nine months ended July 31, 2019 Net sales $ 476,586 $ 70,911 $ 360,564 $ (4,460) $ 903,601 Cost of sales 402,521 54,775 347,316 (4,460) 800,152 Gross profit $ 74,065 $ 16,136 $ 13,248 $ — $ 103,449 For the three months ended July 31, 2020 and 2019, intercompany sales and cost of sales of $0.4 million and $0.5 million between Fresh products and RFG were eliminated. For the nine months ended July 31, 2020 and 2019, intercompany sales and cost of sales of $1.1 million and $1.4 million between Fresh products and RFG were eliminated. For the three months ended July 31, 2020 and 2019, intercompany sales and cost of sales of $1.2 million and $1.0 million between Calavo Foods and RFG were eliminated. For the nine months ended July 31, 2020 and 2019, intercompany sales and cost of sales of $2.8 million and $2.7 million between Calavo Foods and RFG were eliminated. Sales to customers outside the U.S. were approximately $6.5 million, and $12.3 million for the three months ended July 31, 2020 and 2019. Sales to customers outside the U.S. were approximately $21.9 million, and $32.1 million for the nine months ended July 31, 2020 and 2019. Our foreign operations in Mexico are subject to exchange rate fluctuations and foreign currency transaction costs. The functional currency of our foreign subsidiaries in Mexico is the United States dollar (U.S. dollar). As a result, monetary assets and liabilities are translated into U.S. dollars at exchange rates as of the balance sheet date and non-monetary assets, liabilities and equity are translated at historical rates. Sales and expenses are translated using a weighted-average exchange rate for the period. Gains and losses resulting from those remeasurements and foreign currency transactions are recognized within cost of sales. Due to the extraordinary foreign exchange market volatility of the Mexican peso, we recognized significant foreign currency remeasurement losses in the current quarter. These losses were due primarily to certain significant long-term net peso receivables for which hedging is not economically feasible. The Mexican peso weakened significantly compared to the U.S. dollar from 18.91 (MX peso to U.S. dollar) at January 31, 2020 to 23.93 (MX peso to U.S. dollar) at April 30, 2020. The Mexican peso recovered somewhat to 22.20 (MX Peso to U.S. dollar) at July 31, 2020. Foreign currency remeasurement gains, net of losses, for the three months ended July 31, 2020 was $1.4 million. Foreign currency remeasurement losses, net of gains, for the three months ended July 31, 2019 was $0.1 million. For the nine months ended July 31, 2020 and 2019, foreign currency remeasurement losses, net of gains were $1.9 million and $0.1 million. Long-lived assets attributed to geographic areas as of July 31, 2020 and October 31, 2019, are as follows (in thousands): United States Mexico Consolidated July 31, 2020 $ 96,418 $ 34,505 $ 130,923 October 31, 2019 $ 98,224 $ 33,874 $ 132,098 |
Inventories
Inventories | 9 Months Ended |
Jul. 31, 2020 | |
Inventories | |
Inventories | 3. Inventories Inventories consist of the following (in thousands): July 31, October 31, 2020 2019 Fresh fruit $ 16,133 $ 15,874 Packing supplies and ingredients 12,118 11,370 Finished prepared foods 15,693 9,645 $ 43,944 $ 36,889 Inventories are stated at the lower of cost or net realizable value. We periodically review the value of items in inventory and record any necessary write downs of inventory based on our assessment of market conditions. Inventory includes reserves of $0.3 million in slow moving and obsolete packing supply inventory as of July 31, 2020 and October 31, 2019. No additional inventory reserve was considered necessary as of July 31, 2020 and October 31, 2019. |
Related party transactions
Related party transactions | 9 Months Ended |
Jul. 31, 2020 | |
Related party transactions | |
Related party transactions | 4. Related party transactions Certain members of our Board of Directors market California avocados through Calavo pursuant to marketing agreements substantially similar to the marketing agreements that we enter into with other growers. For the three months ended July 31, 2020 and 2019, the aggregate amount of avocados procured from entities owned or controlled by members of our Board of Directors was $9.1 million and $10.0 million. For the nine months ended July 31, 2020 and 2019, the aggregate amount of avocados procured from entities owned or controlled by members of our Board of Directors was $15.3 million and $11.7 million. Amounts payable to these Board members were $4.1 million as of July 31, 2020. We did not have any amounts payable to these Board members as of October 31, 2019. During the three months ended July 31, 2020 and 2019, we received $0.2 million and $0.1 million as dividend income from Limoneira Company (Limoneira). During the nine months ended July 31, 2020 and 2019, we received $0.4 million and $0.3 million as dividend income from Limoneira. In addition, we lease office space from Limoneira for our corporate office. We paid rent expense to Limoneira totaling $0.1 million for the three months ended July 31, 2020 and 2019. We paid rent expense to Limoneira totaling $0.3 million for the nine months ended July 31, 2020 and 2019. Harold Edwards, who is a member of our Board of Directors, is the Chief Executive Officer of Limoneira Company. As of July 31, 2020, we own less than 10% of Limoneira’s outstanding shares. We currently have a member of our Board of Directors who also serves as a partner in the law firm of TroyGould PC, which frequently represents Calavo as legal counsel. During the three months ended July 31, 2020 and 2019, Calavo Growers, Inc. paid fees totaling $0.1 million to TroyGould PC. During the nine months ended July 31, 2020 and 2019, Calavo Growers, Inc. paid fees totaling $0.3 million to TroyGould PC. As of July 31, 2020, and October 31, 2019, we had an investment of $5.8 million and $4.9 million, representing Calavo’s 50% ownership in Agricola Don Memo, S.A. de C.V. (“Don Memo”), which was included as an investment in unconsolidated entities on our balance sheet. We make advances to Don Memo for operating purposes, provide additional advances as shipments are made during the season, and return the proceeds from tomato sales under our marketing program to Don Memo, net of our commission and aforementioned advances. As of October 31, 2019, we had outstanding advances of $3.7 million to Don Memo. During the three months ended July 31, 2020 and 2019, we recorded $10.6 million and $4.8 million of cost of sales to Don Memo pursuant to our consignment agreement. During the nine months ended July 31, 2020 and 2019, we recorded $15.2 million and $10.7 million of cost of sales to Don Memo pursuant to our consignment agreement. We make advances to Agricola Belher (“Belher”) for operating purposes, provide additional advances as shipments are made during the season, and return the proceeds from tomato sales under our marketing program to Belher, net of our commission and aforementioned advances. We had grower advances due from Belher totaling $2.5 million and $4.5 million as of July 31, 2020 and October 31, 2019, which are netted against the grower payable. In addition, we had infrastructure advances due from Belher of $1.8 million and $2.6 million as of July 31, 2020 and October 31, 2019. $0.6 million and $0.8 million of these infrastructure advances were recorded as a receivable in prepaid and other current asset as of July 31, 2020 and October 31, 2019. The remaining $1.2 million and $1.8 million of these infrastructure advances were recorded in other assets. During the three months ended July 31, 2020 and 2019, we recorded $4.0 million and $1.9 million of cost of sales to Belher pursuant to our consignment agreement. During the nine months ended July 31, 2020 and 2019, we recorded $23.6 million and $19.6 million of cost of sales to Belher pursuant to our consignment agreement. In August 2015, we entered into a Shareholder’s Agreement with various Mexican partners and created Avocados de Jalisco, S.A.P.I. de C.V. (“Avocados de Jalisco”). Avocados de Jalisco is a Mexican corporation created to engage in procuring, packing and selling avocados. As of July 31, 2020, this entity was approximately 83 % owned by Calavo and was consolidated in our financial statements. Avocados de Jalisco built a packinghouse located in Jalisco, Mexico, which began operations in June of 2017. During the three months ended July 31, 2020 and 2019, we purchased approximately $3.5 million and $4.5 million of avocados from the partners of Avocados de Jalisco. During the nine months ended July 31, 2020 and 2019, we purchased approximately $5.4 million and $8.1 million of avocados from the partners of Avocados de Jalisco. As of October 31, 2019, we have an equity investment of $5.8 million in FreshRealm, LLC (“FreshRealm”). During the quarter ended July 31, 2020, we concluded that there was no longer any value associated with our FreshRealm investment and therefore recognized a $2.8 million impairment charge to fully impair the investment. We record the amount of our investment in FreshRealm in “Investment in unconsolidated entities” on our Consolidated Condensed Balance Sheets and recognize losses in FreshRealm in “Income/ (loss) from unconsolidated entities” in our Consolidated Condensed Statement of Operations. See Note 12 and Note 18 for additional information. As of July 31, 2020, our ownership percentage in FreshRealm was approximately 37 %. Effective July 31, 2018, we entered into a Note and Membership Unit Purchase Agreement (“NMUPA”) with FreshRealm, pursuant to which we agreed to provide additional financing to FreshRealm, subject to certain terms and conditions. Pursuant to the NMUPA, we entered into a $12 million Senior Promissory Note and corresponding Security Agreement with FreshRealm, effective August 10, 2018. We funded $9 million of this loan commitment during the fourth quarter of fiscal 2018 and funded the remaining loan commitment amount of $3 million during the first quarter of fiscal 2019. During the second quarter of fiscal 2019, we amended the note related to this loan, due October 31, 2019, and, among other things, included a provision whereby we have the option to extend repayment of this note to November 1, 2020. During our first quarter of fiscal 2019, we loaned FreshRealm $7.5 million in unsecured notes receivable. During our second quarter of fiscal 2019, we loaned an additional $4.2 million on an unsecured basis to FreshRealm under similar terms. During our third quarter of fiscal 2019, we loaned an additional $5.4 million on an unsecured basis to FreshRealm under similar terms. During our fourth quarter of fiscal 2019, we loaned an additional $3.7 million to FreshRealm. At such time, we entered into an agreement with FreshRealm wherein all of the outstanding loan amount owed by FreshRealm to us would be secured by substantially all of the assets of FreshRealm. As of November 25, 2019, we modified approximately $2.7 million of the outstanding secured loan to FreshRealm and applied it to unsecured debt as part of a convertible note round offered by FreshRealm to its existing equity holders. Such convertible note bears interest at the rate of 10 % up to the time of conversion. Such $2.7 million unsecured note, along with the related accrued interest amount, was converted into additional equity of FreshRealm as of February 3, 2020. As a result of the convertible note round offered by FreshRealm our ownership percentage in FreshRealm (upon conversion on February 3, 2020) decreased to approximately 37 %. On April 1, 2020, we entered into another Unit Purchase and Subscription Agreement with FreshRealm, where FreshRealm raised $4.0 million of additional equity from existing members. As part of that round, we invested $0.5 million in cash and additionally converted the $1.0 million short-term advanced in February 2020 into equity. Our ownership percentage in FreshRealm remained unchanged at 37%. As of July 31, 2020, and October 31, 2019, we have $34.2 million and $35.2 million in note receivables (including interest) from FreshRealm. During the quarter ended July 31, 2020, we fully reserved our note receivable balance of $34.2 million (which includes accrued interest of $4.1 million). See Note 18 for additional discussion of reserve for collectability of this note receivable. On April 1, 2020, in connection with the $4.0 million capital raise previously mentioned, we entered into the 10 th % effective April 1, 2020. This interest rate reduction was meant to serve as inducement for other investors to participate in FreshRealm’s on-going capital raise and was contingent on FreshRealm completing that equity round. They successfully raised the full $4 million equity round by the May 15, 2020 deadline. The entire principal balance of these notes shall be due and payable in full on April 1, 2022. If FreshRealm fails to make monthly interest payments beginning October 31, 2020, then the maturity date shall be reverted to November 1, 2020. Calavo has the option for up to two additional and separate one-year extensions of April 1, 2023 and April 1, 2024. At July 31, 2020 and October 31, 2019 we have a receivable of $4.1 million and $2.4 million related to accrued interest that we have recorded with note receivables from FreshRealm on the balance sheet. As described above, we have subsequently reserved our note receivable balance (including the interest accrued). One officer and five members of our board of directors have investments in FreshRealm as of July 31, 2020. In January 2018, one of our non-executive directors invested $1.8 million into FreshRealm. In the second quarter of fiscal 2018, two of our non-executive directors invested $1.2 million into FreshRealm. In October 2019, our former Chairman and Chief Executive Officer invested $0.5 million in FreshRealm. In October 2019, one of our non-executive directors invested $0.2 million into FreshRealm. In April 2020, our former Chairman and Chief Executive Officer invested $0.4 million in FreshRealm, and two other members of the board of directors invested an additional $0.1 million. In the first quarter of fiscal 2019, FreshRealm entered into a supply contract with a large multi-national, multi-channel retailer. Calavo co-signed an addendum to this agreement to provide assurance to the customer that Calavo will assume responsibility for performance, in the event that FreshRealm cannot perform, provided that the customer must work in good faith to make reasonable adjustments to logistical elements in the contract, if requested by Calavo. We believe that we are able to fulfill our responsibility to this arrangement without significant impact on our results of operations. We provide storage services to FreshRealm from select Value-Added Depots and RFG facilities. We have recorded $0.1 million and $0.2 million in storage services revenue from FreshRealm in the three months ended July 31, 2020 and 2019. We have recorded $0.4 million and $0.4 million in storage services revenue from FreshRealm in the nine months ended July 31, 2020 and 2019. For the three months ended July 31, 2020 and 2019, RFG has sold less than $0.1 sold $0.3 The previous owners of RFG, one of which is currently the CEO of Calavo, have a majority ownership of certain entities that historically provided various services to RFG, specifically LIG Partners, LLC and THNC, LLC who leased property to certain RFG operating entities. In the first quarter of fiscal 2020, these facilities were sold to an unaffiliated third party and our lease has transferred to those new owners. See the following tables for the related party activity for fiscal years 2020 and 2019: Three months ended July 31, (in thousands) 2020 2019 Rent paid to LIG $ — $ 177 Rent paid to THNC, LLC $ — $ 198 Nine months ended July 31, (in thousands) 2020 2019 Rent paid to LIG $ 80 $ 438 Rent paid to THNC, LLC $ 132 $ 595 |
Other assets
Other assets | 9 Months Ended |
Jul. 31, 2020 | |
Other Assets | |
Other Assets | 5. Other assets Other assets consist of the following (in thousands): July 31, October 31, 2020 2019 Mexican IVA (i.e. value-added) taxes receivable (see note 11) $ 27,665 $ 27,592 Infrastructure advance to Agricola Belher 1,200 1,800 Intangibles, net (see note 15) 10,700 435 Other 1,528 1,514 $ 41,093 $ 31,341 Intangible assets consist of the following (in thousands): July 31, 2020 October 31, 2019 Weighted- Gross Net Gross Net Average Carrying Accum. Book Carrying Accum. Book Useful Life Value Amortization Value Value Amortization Value Customer list/relationships 7 years $ 17,340 $ (8,276) $ 9,064 $ 7,640 $ (7,640) $ — Trade names 10 years 4,060 (2,823) 1,237 2,760 (2,760) — Trade secrets/recipes 9.3 years 630 (506) 124 630 (470) 160 Brand name intangibles indefinite 275 — 275 275 — 275 Intangibles, net $ 22,305 $ (11,605) $ 10,700 $ 11,305 $ (10,870) $ 435 We anticipate recording amortization expense of $0.4 million for the remainder of fiscal 2020, $1.6 million for fiscal year 2021, $1.6 million for fiscal year 2022, $1.5 million for fiscal year 2023, and $5.6 million thereafter. On February 14, 2020, we completed the acquisition of SFFI (SFFI Company, Inc doing business as Simply Fresh Fruit). As part of this acquisition, $9.7 million has been assigned to customer relationships with a life of 7 years and $1.3 million has been assigned to trade names with a life of 10 years . Amortization recorded in fiscal 2020 related to this acquisition was $0.7 million and is included in selling, general and administrative in the consolidated condensed statement of operations. See Note 11 for additional information related to Mexican IVA taxes receivable. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Jul. 31, 2020 | |
Stock-Based Compensation | |
Stock-Based Compensation | 6. Stock-Based Compensation In April 2011, our shareholders approved the Calavo Growers, Inc. 2011 Management Incentive Plan (the “2011 Plan”). All directors, officers, employees and consultants (including prospective directors, officers, employees and consultants) of Calavo and its subsidiaries are eligible to receive awards under the 2011 Plan. Up to 1,500,000 shares of common stock may be issued by Calavo under the 2011 Plan. On May 11, 2020, as part of the employment agreement, Kevin Manion our newly appointed Chief Financial officer was granted 5,418 restricted shares. The closing price of our stock on such date was $55.37 . These shares vest in one -third increments, on an annual basis. These shares were granted pursuant to our 2011 Plan. The total recognized stock-based compensation expense for these grants was less than $0.1 million for the three and nine months ended July 31, 2020. On June 17, 2020, as part of the employment agreement, James Gibson our newly appointed Chief Executive Officer was granted 13,053 restricted shares, based on the date of when he became Chief Executive Officer. The closing price of our stock on such date was $76.61 . These shares vest in one -third increments, on an annual basis. These shares were granted pursuant to our 2011 Plan. The total recognized stock-based compensation expense for these grants was $0.1 million for the three and nine months ended July 31, 2020. On April 22, 2020, three of our former officers were granted a total 18,324 unrestricted shares, as part of their past services. The closing price of our stock on such date was $61.09 . These shares were granted pursuant to our 2011 Plan. The total recognized stock-based compensation expense for these grants was $1.1 million for the nine months ended July 31, 2020. On January 2, 2020, all 12 of our non-employee directors were granted 1,500 restricted shares, as part of their annual compensation, each (total of 18,000 shares). These shares have full voting rights and participate in dividends as if unrestricted. The closing price of our stock on such date was $87.21 . On January 2, 2021, as long as the directors are still serving on the board, these shares lose their restriction and become non-forfeitable and transferable. These shares were granted pursuant to our 2011 Plan. The total recognized stock-based compensation expense for these grants was $0.4 million for the three months ended July 31, 2020. The total recognized stock-based compensation expense for these grants was $0.9 million for the nine months ended July 31, 2020. On December 18, 2019, our executive officers were granted a total of 31,158 restricted shares. These shares have full voting rights and participate in dividends as if unrestricted. The closing price of our stock on such date was $87.63 . These shares vest in one -third increments, on an annual basis, beginning December 18, 2020. These shares were granted pursuant to our 2011 Plan. The total recognized stock-based compensation expense for these grants was $0.2 million for the three months ended July 31, 2020. The total recognized stock-based compensation expense for these grants was $0.5 million for the nine months ended July 31, 2020. A summary of restricted stock activity, related to our 2011 Management Incentive Plan, is as follows (in thousands, except for per share amounts): Weighted-Average Aggregate Number of Shares Grant Price Intrinsic Value Outstanding at October 31, 2019 69 $ 71.74 Vested (51) $ 70.48 Forfeited (14) $ 84.54 Granted 67 $ 83.01 Outstanding at July 31, 2020 71 $ 82.19 $ 4,131 The total recognized stock-based compensation expense for restricted stock was $0.9 million for the three months ended July 31, 2020 and 2019. The total recognized stock-based compensation expense for restricted stock was $3.6 million and $2.7 million for the nine months ended July 31, 2020 and 2019. Total unrecognized stock-based compensation expense totaled $7.1 million as of July 31, 2020 and will be amortized through fiscal year 2023. Stock options are granted with exercise prices of not less than the fair market value at grant date, generally vest over one two after the grant date. We settle stock option exercises with newly issued shares of common stock. We measure compensation cost for all stock-based awards at fair value on the date of grant and recognize compensation expense in our consolidated statements of operations over the service period that the awards are expected to vest. We measure the fair value of our stock-based compensation awards on the date of grant. A summary of stock option activity, related to our 2005 Stock Incentive Plan, is as follows (in thousands, except for per share amounts): Weighted-Average Aggregate Number of Shares Exercise Price Intrinsic Value Outstanding at October 31, 2019 2 $ 19.20 Exercised (2) $ 19.20 Outstanding at July 31, 2020 — $ — $ — Exercisable at July 31, 2020 — $ — $ — The total recognized and unrecognized stock-based compensation expense was insignificant for the three and nine months ended July 31, 2020 and 2019. A summary of stock option activity, related to our 2011 Management Incentive Plan, is as follows (in thousands, except for per share amounts): Weighted-Average Aggregate Exercise Intrinsic Number of Shares Price Value Outstanding at October 31, 2019 18 $ 41.91 Exercised (2) $ 23.48 Outstanding at July 31, 2020 16 $ 44.21 $ 217 Exercisable at July 31, 2020 12 $ 45.59 $ 146 At July 31, 2020, outstanding and exercisable stock options had a weighted-average remaining contractual term of 3.4 years and 2.3 years. The total recognized and unrecognized stock-based compensation expense was insignificant for the three and nine months ended July 31, 2020 and 2019. |
Other events
Other events | 9 Months Ended |
Jul. 31, 2020 | |
Other events | |
Other events | 7. Other events Dividend payment On December 6, 2019, we paid a $1.10 per share dividend in the aggregate amount of $19.4 million to shareholders of record on November 15, 2019. Litigation From time to time, we are also involved in other litigation arising in the ordinary course of our business that we do not believe will have a material adverse impact on our financial statements. Mexico tax audits We conduct business both domestically and internationally and, as a result, one or more of our subsidiaries files income tax returns in U.S. federal, U.S. state and certain foreign jurisdictions. Accordingly, in the normal course of business, we are subject to examination by taxing authorities, primarily in Mexico and the United States. During our third quarter of fiscal 2016, our wholly owned subsidiary, Calavo de Mexico (CDM), received a written communication from the Ministry of Finance and Administration of the government of the State of Michoacan, Mexico (MFM) containing preliminary observations related to a fiscal 2011 tax audit of such subsidiary. MFM’s preliminary observations outline certain proposed adjustments primarily related to intercompany funding, deductions for services from certain vendors/suppliers and Value Added Tax (IVA). During the period from our fourth fiscal quarter of 2016 through our first fiscal quarter of 2019, we attempted to resolve our case with the MFM through working meetings attended by representatives of the MFM, CDM and PRODECON (Local Tax Ombudsman). However, we were unable to materially resolve our case with the MFM through the PRODECON process. As a result, in April 2019, the MFM issued a final tax assessment to CDM (the “2011 Assessment”) totaling approximately $2.2 billion Mexican pesos (approx. $98.9 million USD at July 31, 2020) related to Income Tax, Flat Rate Business Tax and Value Added Tax, corresponding to the fiscal year 2011 tax audit. We have consulted with an internationally recognized tax advisor and continue to believe this tax assessment is without merit. Therefore, we filed an administrative appeal challenging the MFM’s 2011 assessment on June 12, 2019. The filing of an administrative appeal in Mexico is a process in which the taxpayer appeals to a different office within the Mexican tax authorities, forcing the legal office within the MFM to rule on the matter. This process preserves the taxpayer’s right to litigate in tax court if the administrative appeal process ends without a favorable or just resolution. Furthermore, in August 2018, we received a favorable ruling from Mexico’s Federal Tax Administration Service, Servicio de Administracion Tributaria’s (the “SAT”) central legal department in Mexico City on another tax matter (see footnote 11 regarding IVA refunds) indicating that they believe that our legal interpretation is accurate on a matter that is also central to the 2011 Assessment. We believe this recent ruling undermines the Assessment we received in April 2019. We believe we have the legal arguments and documentation to sustain the positions challenged by the MFM. Additionally, we also received notice from the SAT, that CDM is currently under examination related to fiscal year 2013. In January 2017, we received preliminary observations from SAT outlining certain proposed adjustments primarily related to intercompany funding, deductions for services from certain vendors/suppliers, and VAT. We provided a written rebuttal to these preliminary observations during our second fiscal quarter of 2017. During the period from our third fiscal quarter of 2017 through our third fiscal quarter of 2018, we attempted to resolve our case with the SAT through working meetings attended by representatives of the SAT, CDM and the PRODECON. However, we were unable to materially resolve our case with the SAT through the PRODECON process. As a result, in July 2018, the SAT’s local office in Uruapan issued to CDM a final tax assessment (the “2013 Assessment”) totaling approximately $2.6 billion Mexican pesos (approx. $118.2 million USD at July 31, 2020) related to Income Tax, Flat Rate Business Tax, and Value Added Tax, related to this fiscal 2013 tax audit. Additionally, the tax authorities have determined that we owe an employee’s profit-sharing liability, totaling approximately $118 million Mexican pesos (approx. $5.4 million USD at July 31, 2020). We have consulted with both an internationally recognized tax advisor, as well as a global law firm with offices throughout Mexico, and we continue to believe that this tax assessment is without merit. In August 2018, we filed an administrative appeal on the 2013 Assessment. CDM has appealed our case to the SAT’s central legal department in Mexico City. Furthermore, and as noted in the preceding paragraphs, in August 2018, we received a favorable ruling from the SAT’s central legal department in Mexico City on another tax matter (see footnote 11 regarding IVA refunds) indicating that they believe that our legal interpretation is accurate on a matter that is also central to the 2013 Assessment. We believe this recent ruling significantly undermines the 2013 Assessment we received in July 2018. We believe we have the legal arguments and documentation to sustain the positions challenged by the SAT. We continue to believe that the ultimate resolution of these matters is unlikely to have a material effect on our consolidated financial position, results of operations and cash flows. |
Fair value measurements
Fair value measurements | 9 Months Ended |
Jul. 31, 2020 | |
Fair Value Measurements | |
Fair value measurements | 8. Fair value measurements A fair value measurement is determined based on the assumptions that a market participant would use in pricing an asset or liability. A three-tiered hierarchy draws distinctions between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3). The following table sets forth our financial assets and liabilities as of July 31, 2020 that are measured on a recurring basis during the period, segregated by level within the fair value hierarchy: Level 1 Level 2 Level 3 Total (All amounts are pres nted in thousands) Assets at Fair Value at July 31, 2020: Investment in Limoneira Company (1) $ 22,610 - - $ 22,610 Total assets at fair value $ 22,610 - - $ 22,610 Assets at Fair Value at October 31, 2019: Investment in Limoneira Company (1) $ 31,734 - - $ 31,734 Total assets at fair value $ 31,734 - - $ 31,734 (1) The investment in Limoneira Company consists of marketable securities in the Limoneira Company common stock. We currently own less than of Limoneira’s outstanding common stock. These securities are measured at fair value using quoted market prices. For the three months ended July 31, 2020 and 2019, we recognized gains of million on the consolidated condensed statement of income. For the nine months ended July 31, 2020 and 2019, we recognized losses of |
Noncontrolling interest
Noncontrolling interest | 9 Months Ended |
Jul. 31, 2020 | |
Noncontrolling interest | |
Noncontrolling interest | 9. Noncontrolling interest The following table reconciles shareholders’ equity attributable to noncontrolling interest related to Avocados de Jalisco (in thousands). Three months ended July 31, Avocados de Jalisco noncontrolling interest 2020 2019 Noncontrolling interest, beginning $ 1,496 $ 1,675 Net income attributable to noncontrolling interest of Avocados de Jalisco 64 47 Noncontrolling interest, ending $ 1,560 $ 1,722 Nine months ended July 31, Avocados de Jalisco noncontrolling interest 2020 2019 Noncontrolling interest, beginning $ 1,688 $ 1,748 Net loss attributable to noncontrolling interest of Avocados de Jalisco (128) (26) Noncontrolling interest, ending $ 1,560 $ 1,722 |
Earnings per share
Earnings per share | 9 Months Ended |
Jul. 31, 2020 | |
Earnings per share | |
Earnings per share | 10. Earnings per share Basic and diluted net income per share is calculated as follows (data in thousands, except per share data): Three months ended July 31, Nine months ended July 31, 2020 2019 2020 2019 Numerator: Net income (loss) attributable to Calavo Growers, Inc. $ (15,636) $ 10,603 $ (19,852) $ 31,435 Denominator: Weighted average shares – Basic 17,586 17,525 17,558 17,517 Effect of dilutive securities – Restricted stock/options — 80 — 72 Weighted average shares – Diluted 17,586 17,605 17,558 17,589 Net income (loss) per share attributable to Calavo Growers, Inc: Basic $ (0.89) $ 0.61 $ (1.13) $ 1.79 Diluted $ (0.89) $ 0.60 $ (1.13) $ 1.79 |
Mexican IVA taxes receivable
Mexican IVA taxes receivable | 9 Months Ended |
Jul. 31, 2020 | |
Mexican IVA taxes receivable | |
Mexican IVA taxes receivable | 11. Mexican IVA taxes receivable Included in other assets are tax receivables due from the Mexican government for value-added taxes (IVA) paid in advance. CDM is charged IVA by vendors on certain expenditures in Mexico, which, insofar as they relate to the exportation of goods, translate into IVA amounts receivable from the Mexican government. As of July 31, 2020, and October 31, 2019, CDM IVA receivables totaled $27.7 million (614.2 million Mexican pesos) and $27.6 million (529.6 million Mexican pesos). Historically, CDM received IVA refund payments from the Mexican tax authorities on a timely basis. Beginning in fiscal 2014 and continuing into fiscal 2020, however, the tax authorities began carrying out more detailed reviews of our refund requests and our supporting documentation. Additionally, they are also questioning the refunds requested attributable to IVA paid to certain suppliers that allegedly did not fulfill their own tax obligations. We believe these factors and others have contributed to delays in the processing of IVA claims by the Mexican tax authorities. Currently, we are in the process of collecting such balances through regular administrative processes, but certain amounts may ultimately need to be recovered via legal means and/or administrative appeals. During the first quarter of fiscal 2017, tax authorities informed us that their internal opinion, based on the information provided by the local SAT office, considers that CDM is not properly documented relative to its declared tax structure and therefore CDM cannot claim the refundable IVA balance. CDM has strong arguments and supporting documentation to sustain its declared tax structure for IVA and income tax purposes. CDM started an administrative appeal for the IVA related to the request of the months of July, August and September of 2015 (the “2015 Appeal”) in order to assert its argument that CDM is properly documented and to therefore change the SAT’s internal assessment. In August 2018, we received a favorable ruling from the SAT’s central legal department in Mexico City on the 2015 Appeal indicating that they believe CDM’s legal interpretation of its declared tax structure is indeed accurate. While favorable on this central matter of CDM’s declared tax structure, the ruling, however, still does not recognize the taxpayers right to a full refund for the IVA related to the months of July, August and September 2015. Therefore, in October 2018, CDM filed a substance-over-form annulment suit in the Federal Tax Court to recover its full refund for IVA over the subject period, which is currently pending resolution. In spite of the favorable ruling from the SAT’s central legal department in Mexico City, as discussed above, the local SAT office continues to believe that CDM is not properly documented relative to its declared tax structure. As a result, they believe CDM cannot claim certain refundable IVA balances, specifically regarding our IVA refunds related to January through December of 2013, 2014, and 2015, and January 2017. CDM has strong arguments and supporting documentation to sustain its declared tax structure for IVA and income tax purposes. With assistance of our internationally recognized tax advisory firm, as of July 31, 2020, CDM has filed (or has plans to file) administrative appeals for the IVA related to the preceding months. A response to these administrative appeals is currently pending resolution. We believe that our operations in Mexico are properly documented. Furthermore, our internationally recognized tax advisors believe that there are legal grounds to prevail in the Federal Tax Court and that therefore, the Mexican tax authorities will ultimately authorize the refund of the corresponding IVA amounts. |
FreshRealm
FreshRealm | 9 Months Ended |
Jul. 31, 2020 | |
FreshRealm | |
FreshRealm | 12. FreshRealm A VIE refers to a legal business structure in which an investor has a controlling interest, despite not having a majority of voting rights; or a structure involving equity investors that do not have sufficient resources to support the ongoing operating needs of the business. Due primarily to FreshRealm utilizing substantially more debt to finance its activities, in addition to its existing equity, we continue to believe that FreshRealm should be considered a VIE. In evaluating whether we are the primary beneficiary of FreshRealm, we considered several factors, including whether we (a) have the power to direct the activities that most significantly impact FreshRealm’s economic performance and (b) the obligation to absorb losses and the right to receive benefits that could potentially be significant to the VIE. We were not the primary beneficiary of FreshRealm at July 31, 2020 because the nature of our involvement with the activities of FreshRealm does not give us the power to direct the activities that most significantly impact its economic performance. We do not have a future obligation to fund losses or debts on behalf of FreshRealm. We may, however, voluntarily contribute funds. During the quarter ended July 31, 2020, we concluded that there was no longer any value associated with our FreshRealm investment and therefore recognized a $2.8 million impairment charge to fully impair the investment. (see Note 18). Our investment in FreshRealm totaled $5.8 million at October 31, 2019. For the three months ended July 31, 2020 and 2019, FreshRealm incurred losses totaling $4.9 million and $6.2 million. For the nine months ended July 31, 2020 and 2019, FreshRealm incurred losses totaling $19.3 million and $25.0 million. Effective December 16, 2018, FreshRealm completed a “check the box” tax election to change their entity classification for tax purposes to that of a corporation. To effect this change, FreshRealm, among other things, amended its operating agreement to eliminate the appropriate language related to the flow-through tax consequences of its prior tax status (Seventh Amended and Restated LLC Agreement) and checked the appropriate box on Form 8832 which it then filed with the Internal Revenue Service (IRS). As a result, losses incurred by FreshRealm from November 1, 2018 to December 15, 2018 were recorded in accordance with FASB Accounting Standards Codification (“ASC”) 810, ASC 323, and ASC 970, which mandate that the recognition of losses for an unconsolidated subsidiary be handled in a manner consistent with cash distributions upon liquidation of the entity when such distributions are different than the investors percentage ownership. As such, we recorded 100% of FreshRealm’s losses from November 1, 2018 through December 15, 2018 totaling $4.2 million. Losses incurred by FreshRealm from December 16, 2018 to January 31, 2019 (after the change in tax status was effective) were recorded to reflect our proportionate share of FreshRealm losses which totaled $2.7 million. As a result, we realized total losses of $6.9 million in our first fiscal quarter of 2019. During our first and second fiscal quarter of 2020, we recorded losses of approximately $3.5 million and $1.9 million, reflecting our proportionate share of FreshRealm losses. During our three and nine months ended July 31, 2020, we recorded losses of approximately $1.8 million and $7.2 million, reflecting our proportionate share of FreshRealm losses. As a result of FreshRealm’s recent change in tax status (described above), future operating results for FreshRealm will be allocated to its owners based on ownership percentage. As of July 31, 2020, and October 31, 2019, we have note receivables from FreshRealm totaling $34.2 million and $35.2 million. See Note 4 for further information. See Note 18 for further discussion of the reserve for collectability recorded on FreshRealm’s Note receivable. In the first quarter of fiscal 2019, FreshRealm entered into a supply contract with a large multinational, multi-channel retailer. Calavo co-signed an addendum to this agreement to provide assurance to the customer that Calavo will assume responsibility for performance, in the event that FreshRealm cannot perform, provided that the customer must work in good faith to make reasonable adjustments to logistical elements in the contract, if requested by Calavo. Except for the performance guarantee noted above (for which we don’t expect to have a significant impact on operations), our exposure to the obligations of FreshRealm is generally limited to our investment. See Note 4 and Note 18 for more information. Our maximum exposure to loss could increase in the future if FreshRealm receives additional financing (i.e. equity or debt) from Calavo. We are under no obligation to provide FreshRealm additional financing and we currently have no plans to provide any additional financing to FreshRealm. Unconsolidated Significant Subsidiary On May 20, 2020, the SEC issued a final rule regarding the financial statement requirements for acquisitions and dispositions of a business, which included, among other things, amending (1) certain criteria in the significance tests for equity method investees, such as introducing a revenue component when calculating the income test, (ii) related pro forma financial information requirements including its form and content, and (iii) related disclosure requirements, including the number of acquiree financial statement periods required to be presented in SEC filings. The final rule is effective for fiscal years beginning after December 31, 2020, with early application permitted. The Company determined to adopt this SEC final rule as of July 31, 2020, and as a result, the Company’s investment in FreshRealm was no longer considered a significant subsidiary. The following table shows summarized financial information for FreshRealm (in thousands) Income Statement: Three months ended July 31, Nine months ended July 31, 2020 2019 2020 2019 Net sales $ 2,383 $ 5,428 $ 16,092 $ 18,017 Gross loss (746) (617) (2,505) (4,988) Selling, general and administrative (3,412) (4,467) (11,626) (17,685) Other (749) (1,133) (5,201) (2,293) Net loss $ (4,907) $ (6,217) $ (19,332) $ (24,966) |
Revenue recognition
Revenue recognition | 9 Months Ended |
Jul. 31, 2020 | |
Revenue recognition | |
Revenue recognition | 13. Revenue recognition Effective at the beginning of our fiscal 2019, the Company adopted Accounting Standards Update (ASU) No. 2014-09, "Revenue from Contracts with Customers," and all the related amendments ASC 606 using the modified retrospective method of adoption. ASC 606 consists of a comprehensive revenue recognition standard, which requires the recognition of revenue when control of promised goods are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled. The Company recognizes revenue when obligations under the terms of a contract with its customer are satisfied; generally, this occurs with the transfer of control of its products. Revenue is measured as the amount of net consideration expected to be received in exchange for transferring products. Revenue from product sales is governed primarily by customer pricing and related purchase orders (“contracts”) which specify shipping terms and certain aspects of the transaction price including rebates, discounts and other sales incentives. Contracts are at standalone pricing. The performance obligation in these contracts is determined by each of the individual purchase orders and the respective stated quantities, with revenue being recognized at a point in time when obligations under the terms of the agreement are satisfied. This generally occurs with the transfer of control of our products to the customer and the product is delivered. The Company's customers have an implicit and explicit right to return non-conforming products. A provision for payment discounts and product return allowances, which is estimated, is recorded as a reduction of sales in the same period that the revenue is recognized. Sales Incentives and Other Promotional Programs The Company routinely offers sales incentives and discounts through various regional and national programs to our customers and consumers. These programs include product discounts or allowances, product rebates, product returns, one-time or ongoing trade-promotion programs with customers and consumer coupon programs that require the Company to estimate and accrue the expected costs of such programs. The costs associated with these activities are accounted for as reductions to the transaction price of the Company’s products and are, therefore, recorded as reductions to gross sales at the time of sale. The Company bases its estimates of incentive costs on historical trend experience with similar programs, actual incentive terms per customer contractual obligations and expected levels of performance of trade promotions, utilizing customer and sales organization inputs. The Company maintains liabilities at the end of each period for the estimated incentive costs incurred but unpaid for these programs. Differences between estimated and actual incentive costs are generally not material and are recognized in earnings in the period such differences are determined. Reserves for product returns, accrued rebates and promotional accruals are included in the condensed consolidated balance sheets as part of accrued expenses. Principal vs. Agent Considerations The Company frequently enters into consignment arrangements with avocado and tomato growers and packers located outside of the U.S. and growers of certain perishable products in the U.S. We evaluated whether its performance obligation is a promise to transfer services to the customer (as the principal) or to arrange for services to be provided by another party (as the agent) using a control model. This evaluation determined that the Company is in control of establishing the transaction price, managing all aspects of the shipments process and taking the risk of loss for delivery, collection, and returns. Based on the Company’s evaluation of the control model, it determined that all of the Company’s major businesses act as the principal rather than the agent within their revenue arrangements, and that such revenues should be reported on a gross basis. |
Leases
Leases | 9 Months Ended |
Jul. 31, 2020 | |
Leases | |
Leases | 14. Leases The impact of applying ASC 842 effective as of November 1, 2019, to the Company’s condensed consolidated statements of operations and cash flows was not significant. The major impacts to the balance sheet at the effective date were 1) the addition of ASC 842 made changes to sale-leaseback accounting to result in the recognition of the gain on the transaction at the time of the sale instead of recognizing over the leaseback period, when the transaction is deemed to be a sale instead of a financing arrangement. ASC 842 further changes the assessment of sale accounting from a transfer of risk and rewards assessment to a transfer of control assessment. We lease property and equipment under finance and operating leases. For leases with terms greater than 12 months, we record the related asset and obligation at the present value of lease payments over the term. Many of our leases include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when appropriate. Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. We estimated our incremental borrowing rate based upon a synthetic credit rating and yield curve analysis. As a result, the incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments. We lease certain property, plant and equipment, including office facilities, under operating leases. The lease term consists of the noncancellable period of the lease and the periods covered by options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company's lease agreements do not contain any residual value guarantees. Lease Position The following table presents the lease-related assets and liabilities recorded on the balance sheet as of July 31, 2020 (in thousands): July 31, 2020 Assets Non-current assets: Operating lease assets Operating lease right-of-use assets $ 61,875 Finance lease assets Property, plant and equipment, net 6,970 $ 68,845 Liabilities Current liabilities: Operating Current portion of operating leases $ 6,399 Finance Current portion of long-term debt and finance leases 1,275 Long-term obligations Operating Long-term operating leases, less current portion 59,899 Finance Long-term debt and finance leases, less current portion 5,903 $ 73,476 Weighted-average remaining lease term: Operating leases 10.2 years Finance leases 8.1 years Weighted-average discount rate: Operating leases 2.84 % Finance leases 3.33 % Lease Costs The following table presents certain information related to the lease costs for finance and operating leases for the three and nine months ended July 31, 2020 (in thousands): Three months ended Nine months ended July 31, 2020 July 31, 2020 Amortization of financing lease assets $ 272 $ 829 Operating lease cost 2,062 6,174 Short-term lease cost 975 2,637 Variable lease cost 742 2,008 Interest on financing lease liabilities 60 177 Total lease cost $ 4,111 $ 11,825 Other Information The following table presents supplemental cash flow information related to the leases for the three and nine months ended July 31, 2020 (in thousands): Three months ended Nine months ended Cash paid for amounts included in the measurement of lease liabilities July 31, 2020 July 31, 2020 Operating cash flows for operating leases $ 2,031 $ 5,661 Financing cash flows for finance leases 311 794 Operating cash flows for finance leases 60 177 The total right-of-use assets obtained in exchange for new operating leases for the nine months ended July 31, 2020 was $1.1 million. Undiscounted Cash Flows The following table reconciles the undiscounted cash flows for each of the first five years and total remaining years to the finance lease liabilities and operating lease liabilities recorded on the balance sheet as of July 31, 2020 (in thousands): Operating Finance Leases Leases Remainder of 2020 $ 2,032 $ 373 2021 8,192 1,478 2022 8,007 1,344 2023 7,913 1,234 2024 7,571 764 Thereafter 43,226 3,159 Total lease payments 76,941 8,352 Less: imputed interest 10,643 1,174 Total lease liability $ 66,298 $ 7,178 Prior to the adoption of ASC 842, as of October 31, 2019, we were committed to make minimum cash payments under these agreements, as follows (in thousands): 2020 $ 9,534 2021 9,007 2022 8,672 2023 8,603 2024 8,203 Thereafter 50,796 $ 94,815 million for the nine months ended July 31, 2019. Prior to the adoption of ASC 842, as of October 31, 2019, capital lease payments are scheduled as follows (in thousands): Total Year ending October 31: 2020 $ 907 2021 915 2022 908 2023 900 2024 548 Thereafter 3,162 Minimum lease payments 7,340 Less interest (1,166) Present value of future minimum lease payments $ 6,174 Present value of future minimum lease payments as of October 31, 2019 consist of $5.4 million included in long-term obligations and finance leases and $0.8 million included in current portion of long-term obligations and finance leases. |
Acquisition of Simply Fresh Fru
Acquisition of Simply Fresh Fruit | 9 Months Ended |
Jul. 31, 2020 | |
Acquisition of Simply Fresh Fruit | |
Acquisition of Simply Fresh Fruit | 15. Acquisition of Simply Fresh Fruit On January 21, 2020, we announced that our Renaissance Food Group (RFG) subsidiary had signed a definitive agreement to acquire SFFI Company, Inc. doing business as Simply Fresh Fruit (SFFI). of SFFI (net of cash acquired). Founded in 1999 and based in Vernon, Calif., privately held SFFI is a processor and supplier of a broad line of fresh-cut fruit, principally serving the foodservice and hospitality markets. Its focus in those industries is anticipated to be highly complementary to the retail-grocery expertise of Calavo’s RFG business segment and will be included in the RFG segment going forward. The acquisition was accounted for as a business combination using the acquisition method of accounting. The preliminary allocation of the purchase price is based on management’s analysis, including preliminary work performed by third party valuation specialists as of the acquisition date. We have determined the estimated fair values using The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands): Previously Reported Adjustments As Adjusted Current assets (including cash of $623) $ 4,101 $ — $ 4,101 Property, plant, and equipment 1,413 799 2,212 Operating lease right-of-use assets — 110 110 Goodwill 9,815 392 10,207 Intangible assets 11,000 — 11,000 Total assets acquired 26,329 1,301 27,630 Current liabilities (4,419) (736) (5,155) Non-current liabilities — (565) (565) Deferred taxes (2,891) — (2,891) Total liabilities acquired (7,310) (1,301) (8,611) Net assets acquired $ 19,019 $ — $ 19,019 Of the $11.0 million of intangible assets, $9.7 million was assigned to customer relationships with a life of 7 years , and $1.3 million to trade names with a life of 10 years . We incurred $0.3 million in transaction costs related to the acquisition, which is included in selling, general and administrative expenses in our consolidated statements of operations for the three months ended July 31, 2020. Adjustments after the initial close of the acquisition of SFFI is primarily related to the application of ASC 842 (See Note 14 for further detail on accounting for leases). Upon further insight of the leases held by SFFI, we recorded $0.8 million related to finance leases in property, plant and equipment, $0.1 million in operating lease right-of-use assets and the related lease liability of $0.9 million. In addition, we recorded $0.4 million of additional goodwill for payments made after the close date. The financial effect of this acquisition was not material to our statement of operations, and we have not presented pro forma results of operations for the acquisition because it is not significant to our consolidated statements of operations. |
Credit Facility
Credit Facility | 9 Months Ended |
Jul. 31, 2020 | |
Credit Facility | |
Credit Facility | Note 16. Credit Facility We have a revolving credit facility with Bank of America as administrative agent and Merrill Lynch, Pierce, Fenner & Smith Inc. as joint lead arranger and sole bookrunner, and Farm Credit West, as joint lead arranger. Under the terms of this agreement, we are advanced funds for both working capital and long-term productive asset purchases. Total credit available under this agreement is $80 million and will expire in June 2021. Upon notice to Bank of America, we may from time to time, request an increase in the Credit Facility by an amount not exceeding $50 million. For our current credit agreement, the weighted-average interest rate was 1.9% and 3.8% at July 31, 2020 and October 31, 2019. Under these credit facilities, we had $24.6 million outstanding as July 31, 2020. There was nothing outstanding as of October 31, 2019. We expect to refinance our line of credit before June of 2021. We believe that cash flows from operations, the available Credit Facility, and other sources will be sufficient to satisfy our future capital expenditures, grower recruitment efforts, working capital and other financing requirements for at least the next twelve months. This Credit Facility contains customary affirmative and negative covenants for agreements of this type, including the following financial covenants applicable to the Company and its subsidiaries on a consolidated basis: (a) a quarterly consolidated leverage ratio of not more than 2.50 to 1.00 and (b) a quarterly consolidated fixed charge coverage ratio of not less than 1.15 to 1.00. We are in compliance with all financial covenants. |
COVID-19 Pandemic Impact
COVID-19 Pandemic Impact | 9 Months Ended |
Jul. 31, 2020 | |
COVID-19 Pandemic Impact | |
COVID-19 Pandemic Impact | 17. COVID-19 Pandemic Impact On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The COVID-19 pandemic has created challenging and unprecedented conditions for our business, and we are committed to taking action in support of a Company-wide response to the crisis. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. We believe we are well positioned for the future as we continue to navigate the crisis and prepare for an eventual return to a more normal operating environment. We have successfully implemented contingency plans overseen by our management teams in the U.S. and in Mexico to monitor the evolving needs of our businesses in those countries, as well as those related to our Peru partner in consignment avocado sales. The COVID-19 pandemic began to have an adverse impact on our results of operations in the month of March, resulting in cancelled orders, altered customer buying patterns, delays in potential new business opportunities, losses on product unable to be sold, reductions in margins related to lower manufacturing throughput, and changes to integration plans for an acquired entity. The effects of the pandemic were more pronounced in the portions of our business servicing foodservice customers business and to a lesser extent certain segments of our retail business, including behind-the-glass deli and grab-and-go convenience items. While we have managed the pandemic well, with improving results in April and minimal disruption to our overall business thus far, the continuing impact of the pandemic on our future consolidated results, financial position and cash flows are uncertain. |
Reserve for FreshRealm Note Rec
Reserve for FreshRealm Note Receivable and Impairment of Investment | 9 Months Ended |
Jul. 31, 2020 | |
Reserve for FreshRealm Note Receivable and Impairment of Investment | |
Reserve for FreshRealm Note Receivable and Impairment of Investment | 18. Reserve for FreshRealm Note Receivable and Impairment of Investment During the third quarter of fiscal 2020, the results of operations of FreshRealm have deteriorated significantly from our expectations three months ago, with declining sales and continuing losses. FreshRealm will likely require additional capital in order to continue as a going concern. We do not plan to invest or loan any additional capital to FreshRealm. We have performed a valuation analysis of the financial condition and projected operations of FreshRealm under various methods, including liquidation, exit multiple, and perpetual growth approaches, appropriately weighted for the circumstances. In accordance with the foregoing, we have recorded an impairment of 100% of our equity investment of $2.8 million, and we have recorded a reserve for collectability of 100% of our note receivable balance of $34.2 million (which includes accrued interest of $4.1 million), and $0.2 million in trade accounts receivable as of July 31, 2020, which resulted in a loss of $37.2 million, which is included in the accompanying consolidated condensed statement of operations under “Loss on reserve for FreshRealm note receivable and impairment of investment”. In connection with the foregoing, we recorded a $9.3 million discreet income tax benefit for the third quarter of fiscal 2020. |
Description of the business (Po
Description of the business (Policies) | 9 Months Ended |
Jul. 31, 2020 | |
Description of the business | |
Business | Business Calavo Growers, Inc. (Calavo, the Company, we, us or our), is a global leader in the avocado industry and a provider of value-added fresh food. Our expertise in marketing and distributing avocados, prepared avocados, and other perishable foods allows us to deliver a wide array of fresh and prepared food products to retail grocery, foodservice, club stores, mass merchandisers, food distributors and wholesalers on a worldwide basis. We procure avocados from California, Mexico and other growing regions around the world. Through our various operating facilities, we (i) sort, pack, and/or ripen avocados, tomatoes and/or Hawaiian grown papayas, (ii) create, process and package a portfolio of healthy fresh foods including fresh-cut fruit and vegetables, and prepared foods and (iii) process and package guacamole and salsa. We distribute our products both domestically and internationally and report our operations in three different business segments: Fresh products, Calavo Foods and Renaissance Food Group (RFG). The accompanying unaudited consolidated condensed financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments, consisting of adjustments of a normal recurring nature necessary to present fairly the Company’s financial position, results of operations and cash flows. The results of operations for interim periods are not necessarily indicative of the results that may be expected for a full year. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2018, the FASB issued an ASU , Improvements to Nonemployee Share-Based Payment Accounting In February 2018, the FASB issued an ASU, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income Recently Issued Accounting Standards In October 2018, the FASB issued ASU 2018-17, Targeted Improvements to Related Party Guidance for Variable Interest Entities In September 2018, the FASB issued Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. In January 2017, the FASB issued an ASU, Simplifying the Test for Goodwill Impairment, In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Measurement of Credit Losses on Financial Instruments, and subsequent amendments to the guidance |
Information regarding our ope_2
Information regarding our operations in different segments (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Information regarding our operations in different segments | |
Schedule of sales by product and segment | Three months ended July 31, 2020 Three months ended July 31, 2019 Fresh Calavo Fresh Calavo products Foods RFG Total products Foods RFG Total Avocados $ 145,670 $ — $ — $ 145,670 $ 196,047 $ — $ — $ 196,047 Tomatoes 13,827 — — 13,827 8,708 — — 8,708 Papayas 2,695 — — 2,695 3,105 — — 3,105 Other fresh products 88 — — 88 424 — — 424 Prepared avocado products — 19,764 — 19,764 — 27,427 — 27,427 Salsa — 816 — 816 — 930 — 930 Fresh-cut fruit & veg. and prepared foods — — 91,200 91,200 — — 128,428 128,428 Total gross sales 162,280 20,580 91,200 274,060 208,284 28,357 128,428 365,069 Less sales incentives (141) (1,613) (277) (2,031) (554) (2,561) (917) (4,032) Less inter-company eliminations (399) (1,205) — (1,604) (741) (964) — (1,705) Net sales $ 161,740 $ 17,762 $ 90,923 $ 270,425 $ 206,989 $ 24,832 $ 127,511 $ 359,332 Nine months ended July 31, 2020 Nine months ended July 31, 2019 Fresh Calavo Fresh Calavo products Foods RFG Total products Foods RFG Total Avocados $ 413,335 $ — $ — $ 413,335 $ 435,125 $ — $ — $ 435,125 Tomatoes 46,151 — — 46,151 34,616 — — 34,616 Papayas 7,677 — — 7,677 7,853 — — 7,853 Other fresh products 328 — — 328 615 — — 615 Prepared avocado products — 60,683 — 60,683 — 75,310 — 75,310 Salsa — 2,143 — 2,143 — 2,452 — 2,452 Fresh-cut fruit & veg. and prepared foods — — 306,853 306,853 — — 362,607 362,607 Total gross sales 467,491 62,826 306,853 837,170 478,209 77,762 362,607 918,578 Less sales incentives (1,294) (5,522) (1,467) (8,283) (1,623) (6,851) (2,043) (10,517) Less inter-company eliminations (1,098) (2,848) — (3,946) (1,807) (2,653) — (4,460) Net sales $ 465,099 $ 54,456 $ 305,386 $ 824,941 $ 474,779 $ 68,258 $ 360,564 $ 903,601 |
Schedule of segment gross margin | Fresh Calavo Interco. products Foods RFG Elimins. Total (All amounts are presented in thousands) Three months ended July 31, 2020 Net sales $ 162,139 $ 18,967 $ 90,923 $ (1,604) $ 270,425 Cost of sales 144,405 13,921 82,868 (1,604) 239,590 Gross profit $ 17,734 $ 5,046 $ 8,055 $ — $ 30,835 Three months ended July 31, 2019 Net sales $ 207,730 $ 25,796 $ 127,511 $ (1,705) $ 359,332 Cost of sales 182,346 22,952 119,964 (1,705) 323,557 Gross profit $ 25,384 $ 2,844 $ 7,547 $ — $ 35,775 Nine months ended July 31, 2020 Net sales $ 466,197 $ 57,304 $ 305,386 $ (3,946) $ 824,941 Cost of sales 427,476 40,973 291,720 (3,946) 756,223 Gross profit $ 38,721 $ 16,331 $ 13,666 $ — $ 68,718 Nine months ended July 31, 2019 Net sales $ 476,586 $ 70,911 $ 360,564 $ (4,460) $ 903,601 Cost of sales 402,521 54,775 347,316 (4,460) 800,152 Gross profit $ 74,065 $ 16,136 $ 13,248 $ — $ 103,449 |
Schedule of long-lived assets by geographic areas | Long-lived assets attributed to geographic areas as of July 31, 2020 and October 31, 2019, are as follows (in thousands): United States Mexico Consolidated July 31, 2020 $ 96,418 $ 34,505 $ 130,923 October 31, 2019 $ 98,224 $ 33,874 $ 132,098 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Inventories | |
Schedule of Inventories | Inventories consist of the following (in thousands): July 31, October 31, 2020 2019 Fresh fruit $ 16,133 $ 15,874 Packing supplies and ingredients 12,118 11,370 Finished prepared foods 15,693 9,645 $ 43,944 $ 36,889 |
Related party transactions (Tab
Related party transactions (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Related party transactions | |
Schedule of related party transactions | Three months ended July 31, (in thousands) 2020 2019 Rent paid to LIG $ — $ 177 Rent paid to THNC, LLC $ — $ 198 Nine months ended July 31, (in thousands) 2020 2019 Rent paid to LIG $ 80 $ 438 Rent paid to THNC, LLC $ 132 $ 595 |
Other assets (Tables)
Other assets (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Other Assets | |
Schedule of Other Assets | Other assets consist of the following (in thousands): July 31, October 31, 2020 2019 Mexican IVA (i.e. value-added) taxes receivable (see note 11) $ 27,665 $ 27,592 Infrastructure advance to Agricola Belher 1,200 1,800 Intangibles, net (see note 15) 10,700 435 Other 1,528 1,514 $ 41,093 $ 31,341 |
Schedule of Intangible Assets | Intangible assets consist of the following (in thousands): July 31, 2020 October 31, 2019 Weighted- Gross Net Gross Net Average Carrying Accum. Book Carrying Accum. Book Useful Life Value Amortization Value Value Amortization Value Customer list/relationships 7 years $ 17,340 $ (8,276) $ 9,064 $ 7,640 $ (7,640) $ — Trade names 10 years 4,060 (2,823) 1,237 2,760 (2,760) — Trade secrets/recipes 9.3 years 630 (506) 124 630 (470) 160 Brand name intangibles indefinite 275 — 275 275 — 275 Intangibles, net $ 22,305 $ (11,605) $ 10,700 $ 11,305 $ (10,870) $ 435 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Restricted Stock Activity | A summary of restricted stock activity, related to our 2011 Management Incentive Plan, is as follows (in thousands, except for per share amounts): Weighted-Average Aggregate Number of Shares Grant Price Intrinsic Value Outstanding at October 31, 2019 69 $ 71.74 Vested (51) $ 70.48 Forfeited (14) $ 84.54 Granted 67 $ 83.01 Outstanding at July 31, 2020 71 $ 82.19 $ 4,131 |
2005 Stock Incentive Plan [Member] | |
Stock Option Activity, Related to Incentive Plan | A summary of stock option activity, related to our 2005 Stock Incentive Plan, is as follows (in thousands, except for per share amounts): Weighted-Average Aggregate Number of Shares Exercise Price Intrinsic Value Outstanding at October 31, 2019 2 $ 19.20 Exercised (2) $ 19.20 Outstanding at July 31, 2020 — $ — $ — Exercisable at July 31, 2020 — $ — $ — |
2011 Management Incentive Plan [Member] | |
Stock Option Activity, Related to Incentive Plan | A summary of stock option activity, related to our 2011 Management Incentive Plan, is as follows (in thousands, except for per share amounts): Weighted-Average Aggregate Exercise Intrinsic Number of Shares Price Value Outstanding at October 31, 2019 18 $ 41.91 Exercised (2) $ 23.48 Outstanding at July 31, 2020 16 $ 44.21 $ 217 Exercisable at July 31, 2020 12 $ 45.59 $ 146 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Fair Value Measurements | |
Financial Assets Measured on a Recurring Basis | Level 1 Level 2 Level 3 Total (All amounts are pres nted in thousands) Assets at Fair Value at July 31, 2020: Investment in Limoneira Company (1) $ 22,610 - - $ 22,610 Total assets at fair value $ 22,610 - - $ 22,610 Assets at Fair Value at October 31, 2019: Investment in Limoneira Company (1) $ 31,734 - - $ 31,734 Total assets at fair value $ 31,734 - - $ 31,734 (1) The investment in Limoneira Company consists of marketable securities in the Limoneira Company common stock. We currently own less than of Limoneira’s outstanding common stock. These securities are measured at fair value using quoted market prices. For the three months ended July 31, 2020 and 2019, we recognized gains of million on the consolidated condensed statement of income. For the nine months ended July 31, 2020 and 2019, we recognized losses of |
Noncontrolling interest (Tables
Noncontrolling interest (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Noncontrolling interest | |
Reconciliation of shareholders' equity attributable to noncontrolling interest | Three months ended July 31, Avocados de Jalisco noncontrolling interest 2020 2019 Noncontrolling interest, beginning $ 1,496 $ 1,675 Net income attributable to noncontrolling interest of Avocados de Jalisco 64 47 Noncontrolling interest, ending $ 1,560 $ 1,722 Nine months ended July 31, Avocados de Jalisco noncontrolling interest 2020 2019 Noncontrolling interest, beginning $ 1,688 $ 1,748 Net loss attributable to noncontrolling interest of Avocados de Jalisco (128) (26) Noncontrolling interest, ending $ 1,560 $ 1,722 |
Earnings per share (Tables)
Earnings per share (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Earnings per share | |
Schedule of basic and diluted net income per share | Three months ended July 31, Nine months ended July 31, 2020 2019 2020 2019 Numerator: Net income (loss) attributable to Calavo Growers, Inc. $ (15,636) $ 10,603 $ (19,852) $ 31,435 Denominator: Weighted average shares – Basic 17,586 17,525 17,558 17,517 Effect of dilutive securities – Restricted stock/options — 80 — 72 Weighted average shares – Diluted 17,586 17,605 17,558 17,589 Net income (loss) per share attributable to Calavo Growers, Inc: Basic $ (0.89) $ 0.61 $ (1.13) $ 1.79 Diluted $ (0.89) $ 0.60 $ (1.13) $ 1.79 |
FreshRealm (Tables)
FreshRealm (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
FreshRealm | |
Summarized financial information for FreshRealm | The following table shows summarized financial information for FreshRealm (in thousands) Income Statement: Three months ended July 31, Nine months ended July 31, 2020 2019 2020 2019 Net sales $ 2,383 $ 5,428 $ 16,092 $ 18,017 Gross loss (746) (617) (2,505) (4,988) Selling, general and administrative (3,412) (4,467) (11,626) (17,685) Other (749) (1,133) (5,201) (2,293) Net loss $ (4,907) $ (6,217) $ (19,332) $ (24,966) |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Leases | |
Schedule of lease-related assets and liabilities and cost | The following table presents the lease-related assets and liabilities recorded on the balance sheet as of July 31, 2020 (in thousands): July 31, 2020 Assets Non-current assets: Operating lease assets Operating lease right-of-use assets $ 61,875 Finance lease assets Property, plant and equipment, net 6,970 $ 68,845 Liabilities Current liabilities: Operating Current portion of operating leases $ 6,399 Finance Current portion of long-term debt and finance leases 1,275 Long-term obligations Operating Long-term operating leases, less current portion 59,899 Finance Long-term debt and finance leases, less current portion 5,903 $ 73,476 Weighted-average remaining lease term: Operating leases 10.2 years Finance leases 8.1 years Weighted-average discount rate: Operating leases 2.84 % Finance leases 3.33 % Lease Costs The following table presents certain information related to the lease costs for finance and operating leases for the three and nine months ended July 31, 2020 (in thousands): Three months ended Nine months ended July 31, 2020 July 31, 2020 Amortization of financing lease assets $ 272 $ 829 Operating lease cost 2,062 6,174 Short-term lease cost 975 2,637 Variable lease cost 742 2,008 Interest on financing lease liabilities 60 177 Total lease cost $ 4,111 $ 11,825 Other Information The following table presents supplemental cash flow information related to the leases for the three and nine months ended July 31, 2020 (in thousands): Three months ended Nine months ended Cash paid for amounts included in the measurement of lease liabilities July 31, 2020 July 31, 2020 Operating cash flows for operating leases $ 2,031 $ 5,661 Financing cash flows for finance leases 311 794 Operating cash flows for finance leases 60 177 |
Schedule of undiscounted cash flows of operating lease | The following table reconciles the undiscounted cash flows for each of the first five years and total remaining years to the finance lease liabilities and operating lease liabilities recorded on the balance sheet as of July 31, 2020 (in thousands): Operating Finance Leases Leases Remainder of 2020 $ 2,032 $ 373 2021 8,192 1,478 2022 8,007 1,344 2023 7,913 1,234 2024 7,571 764 Thereafter 43,226 3,159 Total lease payments 76,941 8,352 Less: imputed interest 10,643 1,174 Total lease liability $ 66,298 $ 7,178 |
Schedule of undiscounted cash flows of finance lease | Operating Finance Leases Leases Remainder of 2020 $ 2,032 $ 373 2021 8,192 1,478 2022 8,007 1,344 2023 7,913 1,234 2024 7,571 764 Thereafter 43,226 3,159 Total lease payments 76,941 8,352 Less: imputed interest 10,643 1,174 Total lease liability $ 66,298 $ 7,178 |
Minimum Cash Payments Under Non-Cancelable Operating Leases | 2020 $ 9,534 2021 9,007 2022 8,672 2023 8,603 2024 8,203 Thereafter 50,796 $ 94,815 |
Schedule of Capital Lease Payments | Total Year ending October 31: 2020 $ 907 2021 915 2022 908 2023 900 2024 548 Thereafter 3,162 Minimum lease payments 7,340 Less interest (1,166) Present value of future minimum lease payments $ 6,174 |
Acquisition of Simply Fresh F_2
Acquisition of Simply Fresh Fruit (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Acquisition of Simply Fresh Fruit | |
Schedule of net assets acquired | Previously Reported Adjustments As Adjusted Current assets (including cash of $623) $ 4,101 $ — $ 4,101 Property, plant, and equipment 1,413 799 2,212 Operating lease right-of-use assets — 110 110 Goodwill 9,815 392 10,207 Intangible assets 11,000 — 11,000 Total assets acquired 26,329 1,301 27,630 Current liabilities (4,419) (736) (5,155) Non-current liabilities — (565) (565) Deferred taxes (2,891) — (2,891) Total liabilities acquired (7,310) (1,301) (8,611) Net assets acquired $ 19,019 $ — $ 19,019 |
Description of the business (De
Description of the business (Details) | 9 Months Ended |
Jul. 31, 2020segment | |
Description of the business | |
Number of reportable segments | 3 |
Information regarding our ope_3
Information regarding our operations in different segments - Sales by Product (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Segment reporting information | ||||
Less sales incentives | $ (8,283) | $ (10,517) | ||
Net sales | $ 270,425 | $ 359,332 | 824,941 | 903,601 |
Fresh products | ||||
Segment reporting information | ||||
Less sales incentives | (1,294) | (1,623) | ||
Net sales | 161,740 | 206,989 | 465,099 | 474,779 |
Calavo Foods | ||||
Segment reporting information | ||||
Less sales incentives | (5,522) | (6,851) | ||
Net sales | 17,762 | 24,832 | 54,456 | 68,258 |
RFG | ||||
Segment reporting information | ||||
Less sales incentives | (1,467) | (2,043) | ||
Net sales | 90,923 | 127,511 | 305,386 | 360,564 |
Operating segments | ||||
Segment reporting information | ||||
Less sales incentives | (2,031) | (4,032) | ||
Net sales | 274,060 | 365,069 | 837,170 | 918,578 |
Operating segments | Avocados [Member] | ||||
Segment reporting information | ||||
Net sales | 145,670 | 196,047 | 413,335 | 435,125 |
Operating segments | Tomatoes [Member] | ||||
Segment reporting information | ||||
Net sales | 13,827 | 8,708 | 46,151 | 34,616 |
Operating segments | Papayas [Member] | ||||
Segment reporting information | ||||
Net sales | 2,695 | 3,105 | 7,677 | 7,853 |
Operating segments | Other fresh products [Member] | ||||
Segment reporting information | ||||
Net sales | 88 | 424 | 328 | 615 |
Operating segments | Prepared avocado products [Member] | ||||
Segment reporting information | ||||
Net sales | 19,764 | 27,427 | 60,683 | 75,310 |
Operating segments | Salsa [Member] | ||||
Segment reporting information | ||||
Net sales | 816 | 930 | 2,143 | 2,452 |
Operating segments | Fresh-cut fruit & veg. and prepared foods [Member] | ||||
Segment reporting information | ||||
Net sales | 91,200 | 128,428 | 306,853 | 362,607 |
Operating segments | Fresh products | ||||
Segment reporting information | ||||
Less sales incentives | (141) | (554) | ||
Net sales | 162,280 | 208,284 | 467,491 | 478,209 |
Operating segments | Fresh products | Avocados [Member] | ||||
Segment reporting information | ||||
Net sales | 145,670 | 196,047 | 413,335 | 435,125 |
Operating segments | Fresh products | Tomatoes [Member] | ||||
Segment reporting information | ||||
Net sales | 13,827 | 8,708 | 46,151 | 34,616 |
Operating segments | Fresh products | Papayas [Member] | ||||
Segment reporting information | ||||
Net sales | 2,695 | 3,105 | 7,677 | 7,853 |
Operating segments | Fresh products | Other fresh products [Member] | ||||
Segment reporting information | ||||
Net sales | 88 | 424 | 328 | 615 |
Operating segments | Calavo Foods | ||||
Segment reporting information | ||||
Less sales incentives | (1,613) | (2,561) | ||
Net sales | 20,580 | 28,357 | 62,826 | 77,762 |
Operating segments | Calavo Foods | Prepared avocado products [Member] | ||||
Segment reporting information | ||||
Net sales | 19,764 | 27,427 | 60,683 | 75,310 |
Operating segments | Calavo Foods | Salsa [Member] | ||||
Segment reporting information | ||||
Net sales | 816 | 930 | 2,143 | 2,452 |
Operating segments | RFG | ||||
Segment reporting information | ||||
Less sales incentives | (277) | (917) | ||
Net sales | 91,200 | 128,428 | 306,853 | 362,607 |
Operating segments | RFG | Fresh-cut fruit & veg. and prepared foods [Member] | ||||
Segment reporting information | ||||
Net sales | 91,200 | 128,428 | 306,853 | 362,607 |
Intercompany Eliminations | ||||
Segment reporting information | ||||
Net sales | (1,604) | (1,705) | (3,946) | (4,460) |
Intercompany Eliminations | Fresh products | ||||
Segment reporting information | ||||
Net sales | (399) | (741) | (1,098) | (1,807) |
Intercompany Eliminations | Calavo Foods | ||||
Segment reporting information | ||||
Net sales | $ (1,205) | $ (964) | $ (2,848) | $ (2,653) |
Information regarding our ope_4
Information regarding our operations in different segments - Gross Profit (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) | Jul. 31, 2020USD ($)segment | Jul. 31, 2019USD ($) | |
Segment reporting information | ||||
Number of reportable segments | segment | 3 | |||
Net sales less sales incentives | $ 270,425 | $ 359,332 | $ 824,941 | $ 903,601 |
Cost of sales | 239,590 | 323,557 | 756,223 | 800,152 |
Gross profit | 30,835 | 35,775 | 68,718 | 103,449 |
Elimination between Fresh products and RFG | ||||
Segment reporting information | ||||
Sales and Cost of Sales Eliminated | 400 | 500 | 1,100 | 1,400 |
Elimination between Calavo Foods and RFG | ||||
Segment reporting information | ||||
Sales and Cost of Sales Eliminated | 1,200 | 1,000 | 2,800 | 2,700 |
Operating segments | Fresh products | ||||
Segment reporting information | ||||
Net sales less sales incentives | 162,139 | 207,730 | 466,197 | 476,586 |
Cost of sales | 144,405 | 182,346 | 427,476 | 402,521 |
Gross profit | 17,734 | 25,384 | 38,721 | 74,065 |
Operating segments | Calavo Foods | ||||
Segment reporting information | ||||
Net sales less sales incentives | 18,967 | 25,796 | 57,304 | 70,911 |
Cost of sales | 13,921 | 22,952 | 40,973 | 54,775 |
Gross profit | 5,046 | 2,844 | 16,331 | 16,136 |
Operating segments | RFG | ||||
Segment reporting information | ||||
Net sales less sales incentives | 90,923 | 127,511 | 305,386 | 360,564 |
Cost of sales | 82,868 | 119,964 | 291,720 | 347,316 |
Gross profit | 8,055 | 7,547 | 13,666 | 13,248 |
Intercompany Eliminations | ||||
Segment reporting information | ||||
Net sales less sales incentives | (1,604) | (1,705) | (3,946) | (4,460) |
Cost of sales | $ (1,604) | $ (1,705) | $ (3,946) | $ (4,460) |
Information regarding our ope_5
Information regarding our operations in different segments - Assets (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Jul. 31, 2020USD ($)$ / $ | Jul. 31, 2019USD ($) | Jul. 31, 2020USD ($)$ / $ | Jul. 31, 2019USD ($) | Apr. 30, 2020$ / $ | Jan. 31, 2020$ / $ | Oct. 31, 2019USD ($) | |
Segment reporting information | |||||||
Net sales | $ 270,425 | $ 359,332 | $ 824,941 | $ 903,601 | |||
Long-lived assets | $ 130,923 | $ 130,923 | $ 132,098 | ||||
Foreign currency remeasurement exchange rate | $ / $ | 22.20 | 22.20 | 23.93 | 18.91 | |||
Foreign currency gains (losses) | $ 1,400 | (100) | $ (1,900) | (100) | |||
Outside United States [Member] | |||||||
Segment reporting information | |||||||
Net sales | 6,500 | $ 12,300 | 21,900 | $ 32,100 | |||
United States [Member] | |||||||
Segment reporting information | |||||||
Long-lived assets | 96,418 | 96,418 | 98,224 | ||||
Mexico [Member] | |||||||
Segment reporting information | |||||||
Long-lived assets | $ 34,505 | $ 34,505 | $ 33,874 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jul. 31, 2020 | Oct. 31, 2019 |
Inventories | ||
Fresh fruit | $ 16,133 | $ 15,874 |
Packing supplies and ingredients | 12,118 | 11,370 |
Finished prepared foods | 15,693 | 9,645 |
Total inventories | 43,944 | 36,889 |
Inventory valuation reserves | 300 | 300 |
Adjustment for inventory net realizable value | $ 0 | $ 0 |
Related party transactions (Det
Related party transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | Oct. 31, 2019 | |
Related Party Transaction [Line Items] | |||||
Payment to acquire unconsolidated entities | $ 1,477 | ||||
Investments in unconsolidated entities | $ 5,800 | 5,800 | $ 10,722 | ||
Additional loan | $ 20,100 | ||||
Advances to suppliers | 3,265 | 3,265 | 7,338 | ||
Infrastructure advance, noncurrent | 1,200 | 1,200 | 1,800 | ||
Limoneira | |||||
Related Party Transaction [Line Items] | |||||
Dividend income from Limoneira | 200 | $ 100 | 400 | 300 | |
Rent paid | $ 100 | 100 | $ 300 | 300 | |
Limoneira | Maximum [Member] | |||||
Related Party Transaction [Line Items] | |||||
Non-equity method investment ownership (as a percent) | 10.00% | 10.00% | |||
Agricola Don Memo | |||||
Related Party Transaction [Line Items] | |||||
Purchases from related parties | $ 10,600 | 4,800 | $ 15,200 | 10,700 | |
Ownership interest | 50.00% | 50.00% | |||
Investments in unconsolidated entities | $ 5,800 | $ 5,800 | 4,900 | ||
Advances to suppliers | 3,700 | ||||
Director | |||||
Related Party Transaction [Line Items] | |||||
Purchases from related parties | 9,100 | 10,000 | 15,300 | 11,700 | |
Accounts payable to related parties | 4,100 | 4,100 | |||
TroyGould PC | |||||
Related Party Transaction [Line Items] | |||||
Legal fees | 100 | 100 | 300 | 300 | |
Agricola Belher | |||||
Related Party Transaction [Line Items] | |||||
Purchases from related parties | 4,000 | 1,900 | 23,600 | 19,600 | |
Advances to suppliers | 2,500 | 2,500 | 4,500 | ||
Infrastructure advance | 1,800 | 1,800 | 2,600 | ||
Infrastructure advance, current | 600 | 600 | 800 | ||
Infrastructure advance, noncurrent | 1,200 | 1,200 | $ 1,800 | ||
Avocados de Jalisco | |||||
Related Party Transaction [Line Items] | |||||
Purchases from related parties | $ 3,500 | 4,500 | $ 5,400 | 8,100 | |
Avocados de Jalisco | Avocados de Jalisco | |||||
Related Party Transaction [Line Items] | |||||
Subsidiary ownership (as a percent) | 83.00% | 83.00% | |||
LIG | |||||
Related Party Transaction [Line Items] | |||||
Rent paid | 177 | $ 80 | 438 | ||
THNC | |||||
Related Party Transaction [Line Items] | |||||
Rent paid | $ 198 | $ 132 | $ 595 |
Related party transactions - Fr
Related party transactions - FreshRealm (Details) $ in Thousands, $ in Millions | Apr. 01, 2020USD ($)director | Feb. 03, 2020USD ($) | Jul. 31, 2018USD ($) | Apr. 30, 2020USD ($)director | Oct. 31, 2019USD ($)director | Jan. 31, 2018USD ($)director | Jul. 31, 2020USD ($) | Jul. 31, 2020MXN ($) | Oct. 31, 2019USD ($) | Jul. 31, 2019USD ($) | Apr. 30, 2019USD ($) | Jan. 31, 2019USD ($) | Oct. 31, 2018USD ($) | Apr. 30, 2018USD ($)director | Jul. 31, 2020USD ($)itemdirector | Jul. 31, 2019USD ($) | Jul. 31, 2020MXN ($) | Mar. 31, 2020 | Nov. 25, 2019USD ($) |
Related party | |||||||||||||||||||
Investments in unconsolidated entities | $ 10,722 | $ 5,800 | $ 10,722 | $ 5,800 | |||||||||||||||
Additional loan | $ 20,100 | ||||||||||||||||||
Notes receivable from FreshRealm | 35,241 | 35,241 | |||||||||||||||||
Notes receivable from FreshRealm converted to investment in FreshRealm | 2,761 | ||||||||||||||||||
Payment to acquire unconsolidated entities | 1,477 | ||||||||||||||||||
FreshRealm | |||||||||||||||||||
Related party | |||||||||||||||||||
Investments in unconsolidated entities | 5,800 | 0 | 5,800 | $ 0 | |||||||||||||||
Impair investment in FreshRealm | 2,800 | $ 2.8 | |||||||||||||||||
VIE ownership (as a percent) | 37.00% | 37.00% | 37.00% | ||||||||||||||||
Notes receivable from FreshRealm | 35,200 | 34,200 | 35,200 | $ 34,200 | |||||||||||||||
Convertible note receivable | $ 2,700 | ||||||||||||||||||
Loan receivable interest rate (as a percent) | 3.00% | 10.00% | 10.00% | ||||||||||||||||
Notes receivable from FreshRealm converted to investment in FreshRealm | $ 1,000 | $ 2,700 | |||||||||||||||||
Subscription agreements issued by investment | 4,000 | ||||||||||||||||||
Payment to acquire unconsolidated entities | $ 500 | ||||||||||||||||||
Number of extension option | director | 2 | ||||||||||||||||||
Extension period | 1 year | ||||||||||||||||||
Loan write-off | 34,200 | $ 34.2 | |||||||||||||||||
Interest receivable | 2,400 | 4,100 | 2,400 | $ 4,100 | $ 4.1 | ||||||||||||||
Number of officers | item | 1 | ||||||||||||||||||
Number of board of directors | director | 5 | ||||||||||||||||||
Revenue from related parties | 100 | $ 200 | $ 400 | 400 | |||||||||||||||
FreshRealm | Former Chairman and Chief Executive Officer | |||||||||||||||||||
Related party | |||||||||||||||||||
Payment to acquire unconsolidated entities | $ 400 | 500 | |||||||||||||||||
FreshRealm | Non Executive Directors | |||||||||||||||||||
Related party | |||||||||||||||||||
Payment to acquire unconsolidated entities | $ 100 | $ 200 | $ 1,800 | $ 1,200 | |||||||||||||||
Number of officers | director | 2 | ||||||||||||||||||
Number of board of directors | director | 1 | 1 | 2 | ||||||||||||||||
FreshRealm | RFG | |||||||||||||||||||
Related party | |||||||||||||||||||
Revenue from related parties | $ 100 | 100 | $ 300 | $ 2,000 | |||||||||||||||
FreshRealm | NMUPA | |||||||||||||||||||
Related party | |||||||||||||||||||
Loan receivable commitment | $ 12,000 | ||||||||||||||||||
Additional loan | $ 3,000 | $ 9,000 | |||||||||||||||||
FreshRealm | $7.5 million Note | |||||||||||||||||||
Related party | |||||||||||||||||||
Additional loan | $ 7,500 | ||||||||||||||||||
FreshRealm | Unsecured Notes Receivable | |||||||||||||||||||
Related party | |||||||||||||||||||
Additional loan | $ 3,700 | $ 5,400 | $ 4,200 |
Other Assets - Other Assets (De
Other Assets - Other Assets (Details) - USD ($) $ in Thousands | Jul. 31, 2020 | Oct. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Mexican IVA (i.e. value-added) taxes receivable | $ 27,665 | $ 27,592 |
Infrastructure advance to Agricola Belher | 1,200 | 1,800 |
Intangibles, net | 10,700 | 435 |
Other | 1,528 | 1,514 |
Other assets | $ 41,093 | $ 31,341 |
Other Assets - Intangible Asset
Other Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Feb. 14, 2020 | Jul. 31, 2020 | Oct. 31, 2019 |
Finite-Lived Intangible Assets | |||
Accum. Amortization | $ (11,605) | $ (10,870) | |
Finite and indefinite lived intangible assets gross | 22,305 | 11,305 | |
Intangibles, net | 10,700 | 435 | |
Simply Fresh Fruit [Member] | |||
Finite-Lived Intangible Assets | |||
Amortization expense | 700 | ||
Brand name intangibles [Member] | |||
Finite-Lived Intangible Assets | |||
Gross carrying value and net book value | $ 275 | 275 | |
Customer list/relationships [Member] | |||
Finite-Lived Intangible Assets | |||
Weighted-Average Useful Life | 7 years | ||
Gross Carrying Value | $ 17,340 | 7,640 | |
Accum. Amortization | (8,276) | (7,640) | |
Net Book Value | $ 9,064 | ||
Customer list/relationships [Member] | Simply Fresh Fruit [Member] | |||
Finite-Lived Intangible Assets | |||
Weighted-Average Useful Life | 7 years | ||
Gross Carrying Value | $ 9,700 | ||
Trade names [Member] | |||
Finite-Lived Intangible Assets | |||
Weighted-Average Useful Life | 10 years | ||
Gross Carrying Value | $ 4,060 | 2,760 | |
Accum. Amortization | (2,823) | (2,760) | |
Net Book Value | $ 1,237 | ||
Trade names [Member] | Simply Fresh Fruit [Member] | |||
Finite-Lived Intangible Assets | |||
Weighted-Average Useful Life | 10 years | ||
Gross Carrying Value | $ 1,300 | ||
Trade secrets/recipes [Member] | |||
Finite-Lived Intangible Assets | |||
Weighted-Average Useful Life | 9 years 3 months 18 days | ||
Gross Carrying Value | $ 630 | 630 | |
Accum. Amortization | (506) | (470) | |
Net Book Value | $ 124 | $ 160 |
Other Assets - Amortization (De
Other Assets - Amortization (Details) $ in Millions | Jul. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Amortization expense for remainder of fiscal 2020 | $ 0.4 |
Amortization expense for 2021 | 1.6 |
Amortization expense for 2022 | 1.6 |
Amortization expense for 2023 | 1.5 |
Amortization expense thereafter | $ 5.6 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | Jun. 17, 2020$ / sharesshares | May 11, 2020$ / sharesshares | Apr. 22, 2020item$ / sharesshares | Jan. 02, 2020director$ / sharesshares | Dec. 18, 2019$ / sharesshares | Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) | Jul. 31, 2020USD ($)$ / sharesshares | Jul. 31, 2019USD ($) | Apr. 30, 2011shares |
Restricted Stock [Member] | ||||||||||
Share-based Compensation | ||||||||||
Restricted shares granted | 67,000 | |||||||||
Restricted stock closing price awarded (in dollars per share) | $ / shares | $ 83.01 | |||||||||
Stock-based compensation expense | $ | $ 0.9 | $ 3.6 | $ 2.7 | |||||||
Unrecognized stock based compensation expenses | $ | $ 7.1 | $ 7.1 | ||||||||
Forfeited, Number of Shares | 14,000 | |||||||||
Vested, Number of Shares | 51,000 | |||||||||
Restricted Stock [Member] | Chief Financial Officer [Member] | ||||||||||
Share-based Compensation | ||||||||||
Restricted shares granted | 5,418 | |||||||||
Restricted stock closing price awarded (in dollars per share) | $ / shares | $ 55.37 | |||||||||
Annual incremental vesting percentage | 33.00% | |||||||||
Restricted Stock [Member] | Chief Financial Officer [Member] | Maximum [Member] | ||||||||||
Share-based Compensation | ||||||||||
Stock-based compensation expense | $ | 0.1 | $ 0.1 | ||||||||
Restricted Stock [Member] | Chief Executive Officer [Member] | ||||||||||
Share-based Compensation | ||||||||||
Restricted shares granted | 13,053 | |||||||||
Restricted stock closing price awarded (in dollars per share) | $ / shares | $ 76.61 | |||||||||
Stock-based compensation expense | $ | 0.1 | |||||||||
Annual incremental vesting percentage | 33.00% | |||||||||
Restricted Stock [Member] | Former Officers [Member] | ||||||||||
Share-based Compensation | ||||||||||
Number of officers | item | 3 | |||||||||
Restricted shares granted | 18,324 | |||||||||
Restricted stock closing price awarded (in dollars per share) | $ / shares | $ 61.09 | |||||||||
Stock-based compensation expense | $ | 1.1 | |||||||||
Restricted Stock [Member] | Non-employee directors [Member] | ||||||||||
Share-based Compensation | ||||||||||
Restricted shares granted | 18,000 | |||||||||
Restricted stock closing price awarded (in dollars per share) | $ / shares | $ 87.21 | |||||||||
Stock-based compensation expense | $ | 0.4 | 0.9 | ||||||||
Number of non-employee directors | director | 12 | |||||||||
Restricted shares granted per non-employee | 1,500 | |||||||||
Restricted Stock [Member] | Executive officers [Member] | ||||||||||
Share-based Compensation | ||||||||||
Restricted shares granted | 31,158 | |||||||||
Restricted stock closing price awarded (in dollars per share) | $ / shares | $ 87.63 | |||||||||
Stock-based compensation expense | $ | $ 0.2 | $ 0.5 | ||||||||
Annual incremental vesting percentage | 33.00% | |||||||||
Stock Options [Member] | Minimum [Member] | ||||||||||
Share-based Compensation | ||||||||||
Vesting period | 1 year | |||||||||
Expiration period, after grant date | 2 years | |||||||||
Stock Options [Member] | Maximum [Member] | ||||||||||
Share-based Compensation | ||||||||||
Vesting period | 5 years | |||||||||
Expiration period, after grant date | 5 years | |||||||||
2011 Management Incentive Plan [Member] | ||||||||||
Share-based Compensation | ||||||||||
Common stock shares authorized under plan | 1,500,000 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity (Details) - Restricted Stock [Member] $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Jul. 31, 2020USD ($)$ / sharesshares | |
Share-based Compensation | |
Outstanding, Number of Shares, Beginning Balance | shares | 69 |
Vested, Number of Shares | shares | (51) |
Forfeited, Number of Shares | shares | (14) |
Granted, Number of Shares | shares | 67 |
Outstanding, Number of Shares, Ending Balance | shares | 71 |
Outstanding, Weighted-Average Exercise Price, balance balance | $ / shares | $ 71.74 |
Vested, Weighted-Average Grant Price | $ / shares | 70.48 |
Forfeited, Weighted-Average Grant Price | $ / shares | 84.54 |
Granted, Weighted-Average Grant Price | $ / shares | 83.01 |
Outstanding, Weighted-Average Exercise Price, ending balance | $ / shares | $ 82.19 |
Aggregate Intrinsic Value | $ | $ 4,131 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - Stock Options [Member] $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Jul. 31, 2020USD ($)$ / sharesshares | |
2005 Stock Incentive Plan [Member] | |
Share-based Compensation | |
Outstanding, Number of Shares, Beginning Balance | shares | 2 |
Exercised, Number of Shares | shares | (2) |
Outstanding, Weighted-Average Exercise Price | $ / shares | $ 19.20 |
Exercised, Weighted-Average Exercise Price | $ / shares | $ 19.20 |
2011 Management Incentive Plan [Member] | |
Share-based Compensation | |
Outstanding, Number of Shares, Beginning Balance | shares | 18 |
Exercised, Number of Shares | shares | (2) |
Outstanding, Number of Shares, Ending Balance | shares | 16 |
Exercisable, Number of Shares | shares | 12 |
Outstanding, Weighted-Average Exercise Price | $ / shares | $ 41.91 |
Exercised, Weighted-Average Exercise Price | $ / shares | 23.48 |
Outstanding, Weighted-Average Exercise Price, ending balance | $ / shares | 44.21 |
Exercisable, Weighted-Average Exercise Price | $ / shares | $ 45.59 |
Outstanding, Aggregate Intrinsic Value | $ | $ 217 |
Exercisable, Aggregate Intrinsic Value | $ | $ 146 |
Outstanding stock options, weighted-average remaining contractual term | 3 years 4 months 24 days |
Exercisable stock options, weighted-average remaining contractual term | 2 years 3 months 18 days |
Other Events (Details)
Other Events (Details) $ / shares in Units, $ in Thousands, $ in Millions | Dec. 06, 2019USD ($)$ / shares | Apr. 30, 2019MXN ($) | Jul. 31, 2018MXN ($) | Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) |
Dividend declared per share | $ / shares | $ 1.10 | ||||
Dividend amount paid to shareholders | $ | $ 19,400 | $ 19,354 | $ 17,568 | ||
Mexican Tax Authority [Member] | |||||
Employee profit sharing liability | $ 118 | 5,400 | |||
Tax Year 2011 [Member] | Mexican Tax Authority [Member] | |||||
Final tax assessment related to Income Tax, Flat Rate Business Tax, and Value Added Tax | $ 2,200 | 98,900 | |||
Tax Year 2013 [Member] | Mexican Tax Authority [Member] | |||||
Final tax assessment related to Income Tax, Flat Rate Business Tax, and Value Added Tax | $ 2,600 | $ 118,200 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | Oct. 31, 2019 | |
Limoneira | |||||
Assets at Fair Value: | |||||
Realized gain (loss) | $ 200 | $ (5,100) | $ 9,100 | $ 8,200 | |
Limoneira | Maximum [Member] | |||||
Assets at Fair Value: | |||||
Non-equity method investment ownership (as a percent) | 10.00% | 10.00% | |||
Fair Value, Measurements, Recurring [Member] | |||||
Assets at Fair Value: | |||||
Total assets at fair value | $ 22,610 | $ 22,610 | $ 31,734 | ||
Fair Value, Measurements, Recurring [Member] | Limoneira | |||||
Assets at Fair Value: | |||||
Investment in Limoneira Company | 22,610 | 22,610 | 31,734 | ||
Fair Value, Measurements, Recurring [Member] | Level 1 | |||||
Assets at Fair Value: | |||||
Total assets at fair value | 22,610 | 22,610 | 31,734 | ||
Fair Value, Measurements, Recurring [Member] | Level 1 | Limoneira | |||||
Assets at Fair Value: | |||||
Investment in Limoneira Company | $ 22,610 | $ 22,610 | $ 31,734 |
Noncontrolling Interest (Detail
Noncontrolling Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Noncontrolling Interest [Line Items] | ||||
Noncontrolling interest, beginning | $ 1,688 | |||
Net income (loss) attributable to noncontrolling interest of Avocados de Jalisco | $ 64 | $ 47 | (128) | $ (26) |
Noncontrolling interest, ending | 1,560 | 1,560 | ||
Avocados de Jalisco | ||||
Noncontrolling Interest [Line Items] | ||||
Noncontrolling interest, beginning | 1,496 | 1,675 | 1,688 | 1,748 |
Net income (loss) attributable to noncontrolling interest of Avocados de Jalisco | 64 | 47 | (128) | (26) |
Noncontrolling interest, ending | $ 1,560 | $ 1,722 | $ 1,560 | $ 1,722 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Jul. 31, 2020 | Apr. 30, 2020 | Jan. 31, 2020 | Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Earnings per share | ||||||||
Net income (loss) attributable to Calavo Growers, Inc. | $ (15,636) | $ (3,278) | $ (938) | $ 10,603 | $ 16,345 | $ 4,487 | $ (19,852) | $ 31,435 |
Weighted average shares - Basic | 17,586 | 17,525 | 17,558 | 17,517 | ||||
Effect of dilutive securities - Restricted stock/options | 80 | 72 | ||||||
Weighted average shares - Diluted | 17,586 | 17,605 | 17,558 | 17,589 | ||||
Basic | $ (0.89) | $ 0.61 | $ (1.13) | $ 1.79 | ||||
Diluted | $ (0.89) | $ 0.60 | $ (1.13) | $ 1.79 |
Mexican IVA taxes receivable (D
Mexican IVA taxes receivable (Details) $ in Millions, $ in Millions | Jul. 31, 2020USD ($) | Jul. 31, 2020MXN ($) | Oct. 31, 2019USD ($) | Oct. 31, 2019MXN ($) |
Mexican IVA taxes receivable | ||||
IVA receivables balance | $ 27.7 | $ 614.2 | $ 27.6 | $ 529.6 |
FreshRealm (Details)
FreshRealm (Details) $ in Thousands, $ in Millions | Apr. 01, 2020 | Feb. 03, 2020 | Dec. 15, 2018USD ($) | Jan. 31, 2019USD ($) | Jul. 31, 2020USD ($) | Jul. 31, 2020MXN ($) | Apr. 30, 2020USD ($) | Jan. 31, 2020USD ($) | Jul. 31, 2019USD ($) | Jan. 31, 2019USD ($) | Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) | Oct. 31, 2019USD ($) |
Variable Interest Entity [Line Items] | |||||||||||||
Investments in unconsolidated entities | $ 5,800 | $ 5,800 | $ 10,722 | ||||||||||
Income (loss) from unconsolidated entities | $ (2,700) | (6,375) | $ (11,945) | ||||||||||
Notes receivable from FreshRealm | 35,241 | ||||||||||||
Additional loan | 20,100 | ||||||||||||
FreshRealm | |||||||||||||
Variable Interest Entity [Line Items] | |||||||||||||
Investments in unconsolidated entities | 0 | 0 | 5,800 | ||||||||||
Impair investment in FreshRealm | 2,800 | $ 2.8 | |||||||||||
Net loss | (4,907) | $ (6,217) | $ (19,332) | $ (24,966) | |||||||||
VIE ownership (as a percent) | 37.00% | 37.00% | 37.00% | ||||||||||
Income (loss) from unconsolidated entities | $ (4,200) | (1,800) | $ (1,900) | $ (3,500) | $ (6,900) | $ (7,200) | |||||||
Notes receivable from FreshRealm | $ 34,200 | $ 34,200 | $ 35,200 |
FreshRealm - Summarized financi
FreshRealm - Summarized financial information (Details) - FreshRealm - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Income Statement: | ||||
Net sales | $ 2,383 | $ 5,428 | $ 16,092 | $ 18,017 |
Gross loss | (746) | (617) | (2,505) | (4,988) |
Selling, general and administrative | (3,412) | (4,467) | (11,626) | (17,685) |
Other | (749) | (1,133) | (5,201) | (2,293) |
Net loss | $ (4,907) | $ (6,217) | $ (19,332) | $ (24,966) |
Leases - Assets and Liabilities
Leases - Assets and Liabilities (Details) - USD ($) $ in Thousands | Nov. 01, 2019 | Jan. 31, 2020 | Jul. 31, 2020 | Oct. 31, 2019 |
Leases | ||||
Operating lease liability | $ 66,298 | |||
Finance lease liability | 7,178 | |||
Other long-term liabilities | $ 3,519 | $ 4,769 | ||
Cumulative effect adjustment on ASC 842 related to leases | $ 1,165 | |||
Lease, Practical Expedients, Package [true false] | true | |||
Lease-related assets and liabilities | ||||
Operating lease assets | $ 61,875 | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Operating lease assets | |||
Finance lease asset | $ 6,970 | |||
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Net | |||
Total | $ 68,845 | |||
Operating Lease, Liability, Current | $ 6,399 | |||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Operating Lease, Liability, Current | |||
Finance Lease, Liability, Current | $ 1,275 | |||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Long-term Debt and Capital Lease Obligations, Current | |||
Operating Lease, Liability, Noncurrent | $ 59,899 | |||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Operating Lease, Liability, Noncurrent | |||
Finance Lease, Liability, Noncurrent | $ 5,903 | |||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term Debt and Capital Lease Obligations | |||
Total | $ 73,476 | |||
Weighted-average remaining lease term: Operating leases | 10 years 2 months 12 days | |||
Weighted-average remaining lease term: Finance leases | 8 years 1 month 6 days | |||
Weighted-average discount rate: Operating leases | 2.84% | |||
Weighted-average discount rate: Finance leases | 3.33% | |||
ASU, Leases | Adjustment | ||||
Leases | ||||
Operating lease liability | $ 69,600 | |||
Deferred rent and incentives | (3,700) | |||
Other long-term liabilities | (1,200) | |||
Cumulative effect adjustment on ASC 842 related to leases | 1,200 | |||
Lease-related assets and liabilities | ||||
Operating lease assets | $ 65,700 |
Leases - Costs and Other Inform
Leases - Costs and Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jul. 31, 2020 | Jul. 31, 2020 | |
Lease costs | ||
Amortization of financing lease assets | $ 272 | $ 829 |
Operating lease cost | 2,062 | 6,174 |
Short-term lease cost | 975 | 2,637 |
Interest on financing lease liabilities | 60 | 177 |
Variable lease cost | 742 | 2,008 |
Total lease cost | 4,111 | 11,825 |
Operating cash flows for operating leases | 2,031 | 5,661 |
Financing cash flows for finance leases | 311 | 794 |
Operating cash flows for finance leases | $ 60 | 177 |
Right of use assets obtained for operating lease | $ 1,100 |
Leases - Undiscounted Cash Flow
Leases - Undiscounted Cash Flows (Details) $ in Thousands | Jul. 31, 2020USD ($) |
Operating Leases | |
Remainder of 2020 | $ 2,032 |
2021 | 8,192 |
2022 | 8,007 |
2023 | 7,913 |
2024 | 7,571 |
Thereafter | 43,226 |
Total lease payments | 76,941 |
Less: imputed interest | 10,643 |
Total lease liability | 66,298 |
Finance Leases | |
Remainder of 2020 | 373 |
2021 | 1,478 |
2022 | 1,344 |
2023 | 1,234 |
2024 | 764 |
Thereafter | 3,159 |
Total lease payments | 8,352 |
Less: imputed interest | 1,174 |
Total lease liability | $ 7,178 |
Leases - Operating lease paymen
Leases - Operating lease payments pre-842 (Details) $ in Thousands | 12 Months Ended |
Oct. 31, 2019USD ($) | |
Leases | |
2020 | $ 9,534 |
2021 | 9,007 |
2022 | 8,672 |
2023 | 8,603 |
2024 | 8,203 |
Thereafter | 50,796 |
Total | 94,815 |
Rent paid, prior to ASU 842 | $ 7,800 |
Leases - Capital lease payments
Leases - Capital lease payments pre-842 (Details) $ in Thousands | Oct. 31, 2019USD ($) |
Leases | |
2020 | $ 907 |
2021 | 915 |
2022 | 908 |
2023 | 900 |
2024 | 548 |
Thereafter | 3,162 |
Minimum lease payments | 7,340 |
Less interest | (1,166) |
Present value of future minimum lease payments | 6,174 |
Capital lease, noncurrent | 5,400 |
Capital lease, current | $ 800 |
Acquisition of Simply Fresh F_3
Acquisition of Simply Fresh Fruit (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended |
Feb. 29, 2020 | Jul. 31, 2020 | |
Business acquisition | ||
Purchase price | $ 18,396 | |
Simply Fresh Fruit [Member] | ||
Business acquisition | ||
Purchase price | $ 18,400 | |
Business acquisition voting interest acquired (as a percent) | 100.00% |
Acquisition of Simply Fresh F_4
Acquisition of Simply Fresh Fruit - Net assets (Details) $ in Thousands, $ in Millions | Feb. 14, 2020USD ($) | Jul. 31, 2020USD ($) | Feb. 14, 2020MXN ($) | Oct. 31, 2019USD ($) |
Schedule of net assets | ||||
Cash acquired | $ 623 | |||
Goodwill | 28,469 | $ 18,262 | ||
Simply Fresh Fruit [Member] | ||||
Schedule of net assets | ||||
Current assets (including cash of $623) | $ 4,101 | |||
Cash acquired | 623 | |||
Property, plant, and equipment | 2,212 | |||
Operating lease right-of-use assets | 110 | |||
Goodwill | 10,207 | |||
Intangible assets | 11,000 | |||
Total assets acquired | 27,630 | |||
Current liabilities | (5,155) | |||
Non-current liabilities | (565) | |||
Deferred taxes | (2,891) | |||
Total liabilities acquired | (8,611) | |||
Net non-cash assets acquired | 19,019 | |||
Transaction costs related to acquisition | $ 300 | |||
Simply Fresh Fruit [Member] | Previously Reported | ||||
Schedule of net assets | ||||
Current assets (including cash of $623) | 4,101 | |||
Property, plant, and equipment | 1,413 | |||
Goodwill | 9,815 | |||
Intangible assets | 11,000 | |||
Total assets acquired | 26,329 | |||
Current liabilities | (4,419) | |||
Deferred taxes | (2,891) | |||
Total liabilities acquired | (7,310) | |||
Net non-cash assets acquired | 19,019 | |||
Simply Fresh Fruit [Member] | Adjustment | ||||
Schedule of net assets | ||||
Property, plant, and equipment | 799 | $ 0.8 | ||
Operating lease right-of-use assets | 110 | 0.1 | ||
Goodwill | 392 | 0.4 | ||
Total assets acquired | 1,301 | |||
Current liabilities | (736) | |||
Non-current liabilities | (565) | |||
Total liabilities acquired | (1,301) | |||
Lease obligation acquired | $ 0.9 | |||
Simply Fresh Fruit [Member] | Customer list/relationships [Member] | ||||
Schedule of net assets | ||||
Intangible assets | $ 9,700 | |||
Acquired intangible asset life | 7 years | |||
Simply Fresh Fruit [Member] | Trade names [Member] | ||||
Schedule of net assets | ||||
Intangible assets | $ 1,300 | |||
Acquired intangible asset life | 10 years |
Revolving Credit Facilities (De
Revolving Credit Facilities (Details) - Revolving Credit Facility - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2020 | Oct. 31, 2019 | |
Debt Instrument [Line Items] | ||
Credit available under borrowing agreement | $ 80 | |
Additional borrowing capacity | $ 50 | |
Average interest rate | 1.90% | 3.80% |
Line of credit facility outstanding | $ 24.6 | |
Quarterly consolidated leverage ratio | 2.50% | |
Fixed charge coverage ratio | 1.15 |
Reserve for FreshRealm Note R_2
Reserve for FreshRealm Note Receivable and Impairment of Investment (Detail) $ in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2020USD ($) | Jul. 31, 2020MXN ($) | Jul. 31, 2020USD ($) | Jul. 31, 2020MXN ($) | Oct. 31, 2019USD ($) | |
Equity investment | |||||
Loss on reserve for FreshRealm note receivable and impairment of investment | $ 37,192 | $ 37,192 | |||
Deferred income taxes on FreshRealm reserve | (7,525) | ||||
FreshRealm | |||||
Equity investment | |||||
Impair investment in FreshRealm | 2,800 | $ 2.8 | |||
Loan write-off | 34,200 | 34.2 | |||
Interest receivable | $ 4,100 | $ 4,100 | $ 4.1 | $ 2,400 | |
Accounts receivable related party | $ 0.2 | ||||
Loss on reserve for FreshRealm note receivable and impairment of investment | 37.2 | ||||
Deferred income taxes on FreshRealm reserve | $ 9.3 |