Calavo reports challenging Q3, announces changes to board of directors
Avocado company Calavo Growers has reported a challenging third financial quarter after heavy volumes from Peru and Mexico took their toll on prices in the U.S. market.
The company also announced a new addition to its board of directors and said that two current directors will step down at the start of next year.
In the three months ended July 31, Calavo reported a net loss of US$15.6m - primarily reflecting a $37.2 million non-cash loss on reserve for FreshRealm - compared to a net income of $10.6m in the same period last year.
Adjusted EBITDA fell by 13% to $23.1m, while gross profit fell by 14% to $30.8m, and total revenue fell by 25% to US$270m.
James E. Gibson, CEO of Calavo Growers, said the company continued with execute with resilience and resolve in the face of a prolonged pandemic, maintaining supply chain continuity across our 18 facilities in the U.S. and Mexico.
“Our third quarter results were impacted by a combination of lower avocado prices, reflecting increased supply from Mexico and Peru, and lower demand in our RFG and Foods segments resulting from the second wave of COVID-19," he said.
"While sales declined year-over-year, avocado volume increased 18%, signaling growth in consumer demand for avocados. Gross profit per carton for the third quarter was in-line with our historical averages."
He added that given the "evolving and dynamic environment that we are operating in today", the company remains "focused on aspects of the business that we can control".
Calavo also announced the appointment of Farha Aslam to its Board of Directors, effective January 3, 2021, and that long-standing directors Egidio “Gene” Carbone, Jr. and Dorcas Thille have decided they will not stand for re-election at Calavo’s 2021 annual meeting of shareholders.
Aslam will serve on the company’s Audit committee.
“We are very excited that Farha is joining our board of directors. Her extensive experience in the capital markets and the food industry is ideally aligned with our goals to accelerate future growth and profitability,” said J. Link Leavens, Chairman of Calavo’s Board of Directors. “Our board and management team look forward to her leadership and contributions.”
He added that Carbone and Thille have been "outstanding members of the board for many years, and I believe their contributions will benefit our company for years to come".
“They have played incredibly valuable roles, helping to guide Calavo through opportunities and challenges," he said.