Calavo swings to a loss in Q4 but reports revenue growth

Calavo swings to a loss in Q4 over rising costs and avocado crop challenges

Calavo swings to a loss in Q4 over rising costs and avocado crop challenges

Calavo Growers swung to a loss in the fourth financial quarter of 2021 due to myriad challenging market conditions and issues with the avocado crop.

The California-based company reported a net loss of of $13 million, compared to net income of $6.2 million for the same period last year.

However, total revenue saw a sharp increase of 17 percent, growing to $273.4 million. 

Fresh segment revenue increased 2 percent year-over-year to $149.8 million, and Renaissance Food Group (RFG) and Foods segments revenues increased 7% and 6% year-over-year, respectively.

Adjusted EBITDA came in at $1.4 million, compared to $13.4 million for the same period last year.

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

“We also continued to experience challenges with the avocado crop, including high fruit costs and less desirable sizes. As we moved through the quarter, market conditions improved, and we obtained price increases across customers and product lines.

"As a result, we experienced steady monthly improvement, and we finished the quarter delivering stronger financial results than at the beginning of the quarter."

He added that as part of Project Uno, the company made the "difficult decision" to discontinue food processing operations at its RFG facility in Green Cove Springs (near Jacksonville), Florida.

While Calavo is continuing its Fresh operations at the facility, the closure will consolidate production into our Georgia facility and improve capacity utilization, Hollister said.

The company also made progress toward unifying procurement, freight and back-office activities across our business segments. In addition, we completed the first round of SKU rationalization, eliminating approximately 5% of total SKUs.

"I am pleased with our progress to date and am optimistic that we will see improved profitability in 2022," Hollister said.

Calavo has also made progress in its search for a permanent CEO, and is final rounds of interviews with "several outstanding candidates".

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