Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Oct. 31, 2020 | Nov. 30, 2020 | Apr. 30, 2020 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Oct. 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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 17,689,818 | ||
Entity Public Float | $ 0.9 | ||
Entity Central Index Key | 0001133470 | ||
Current Fiscal Year End Date | --10-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 31, 2020 | Oct. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 4,055 | $ 7,973 |
Accounts receivable, net of allowances of $3,498 (2020) $3,366 (2019) | 63,668 | 63,423 |
Inventories, net | 41,787 | 36,889 |
Prepaid expenses and other current assets | 10,733 | 9,027 |
Advances to suppliers | 5,061 | 7,338 |
Income taxes receivable | 10,591 | 2,865 |
Total current assets | 135,895 | 127,515 |
Property, plant, and equipment, net | 130,270 | 132,098 |
Operating lease right-of-use assets | 60,262 | |
Investment in Limoneira Company | 23,197 | 31,734 |
Investments in unconsolidated entities | 6,065 | 10,722 |
Deferred income taxes | 2,486 | 3,447 |
Goodwill | 28,568 | 18,262 |
Notes receivable from FreshRealm | 35,241 | |
Intangibles, net | 10,323 | 435 |
Other assets | 32,558 | 30,906 |
Total assets | 429,624 | 390,360 |
Current liabilities: | ||
Payable to growers | 11,346 | 13,463 |
Trade accounts payable | 9,384 | 17,421 |
Accrued expenses | 36,922 | 39,629 |
Short-term borrowings | 20,550 | |
Dividend payable | 20,343 | 19,354 |
Current portion of operating leases | 6,443 | |
Current portion of long-term obligations and finance leases | 1,343 | 762 |
Total current liabilities | 106,331 | 90,629 |
Long-term liabilities: | ||
Long-term operating leases, less current portion | 58,273 | |
Long-term obligations and finance leases, less current portion | 5,716 | 5,412 |
Deferred rent | 3,681 | |
Other long-term liabilities | 3,302 | 4,769 |
Total long-term liabilities | 67,291 | 13,862 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Common stock ($0.001 par value, 100,000 shares authorized; 17,661 (2020) and 17,595 (2019) shares issued and outstanding) | 18 | 18 |
Additional paid-in capital | 165,000 | 161,606 |
Noncontrolling interest | 1,472 | 1,688 |
Retained earnings | 89,512 | 122,557 |
Total shareholders' equity | 256,002 | 285,869 |
Total liabilities and shareholders' equity | $ 429,624 | $ 390,360 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) shares in Thousands, $ in Thousands | Oct. 31, 2020 | Oct. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowances of accounts receivable | $ 3,498 | $ 3,366 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 17,661 | 17,595 |
Common stock, shares outstanding | 17,661 | 17,595 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Income Statement [Abstract] | |||
Net sales | $ 1,059,371 | $ 1,195,777 | $ 1,088,758 |
Cost of sales | 969,473 | 1,067,695 | 975,142 |
Gross profit | 89,898 | 128,082 | 113,616 |
Selling, general and administrative | 57,952 | 59,113 | 57,081 |
Gain on sale of Temecula packinghouse | 216 | 2,077 | |
Operating income | 32,162 | 71,046 | 56,535 |
Interest income | 1,998 | 2,675 | 318 |
Interest expense | (877) | (948) | (831) |
Other income, net | 553 | 499 | 559 |
Loss on reserve for FreshRealm note receivable and impairment of investment | (37,322) | ||
Unrealized and realized net loss on Limoneira shares | (8,537) | (9,722) | |
Income (loss) before provision (benefit) for income taxes and loss from unconsolidated entities | (12,023) | 63,550 | 56,581 |
Income tax benefit (provision) | 4,292 | (12,882) | (12,719) |
Net loss from unconsolidated entities | (6,110) | (14,082) | (11,850) |
Net income (loss) | (13,841) | 36,586 | 32,012 |
Less: Net loss attributable to noncontrolling interest | 216 | 60 | 269 |
Net income (loss) attributable to Calavo Growers, Inc. | $ (13,625) | $ 36,646 | $ 32,281 |
Calavo Growers, Inc.'s net income (loss) per share: | |||
Basic | $ (0.78) | $ 2.09 | $ 1.85 |
Diluted | $ (0.78) | $ 2.08 | $ 1.84 |
Number of shares used in per share computation: | |||
Basic | 17,564 | 17,519 | 17,477 |
Diluted | 17,564 | 17,593 | 17,568 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (13,841) | $ 36,586 | $ 32,012 |
Other comprehensive income, before tax: | |||
Unrealized investment gains | 2,247 | ||
Income tax expense related to items of other comprehensive income | (540) | ||
Other comprehensive income, net of tax | 1,707 | ||
Comprehensive income (loss) | (13,841) | 36,586 | 33,719 |
Less: Net loss attributable to noncontrolling interest | 216 | 60 | 269 |
Comprehensive income (loss) - Calavo Growers, Inc. | $ (13,625) | $ 36,646 | $ 33,988 |
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 EarningsCumulative effect adjustment | Retained Earnings | Noncontrolling Interest [Member] | Cumulative effect adjustment | Total |
Beginning balance at Oct. 31, 2017 | $ 18 | $ 154,243 | $ 10,434 | $ 78,411 | $ 1,016 | $ 244,122 | ||
Beginning balance, shares at Oct. 31, 2017 | 17,533 | |||||||
Exercise of stock options and income tax benefit | 53 | 53 | ||||||
Exercise of stock options and income tax benefit, shares | 3 | |||||||
Stock compensation expense | 3,742 | 3,742 | ||||||
Restricted stock issued | 891 | 891 | ||||||
Restricted stock issued, shares | 31 | |||||||
Unrealized gain on Limoneira investment, net | 1,707 | 1,707 | ||||||
Dividend declared to shareholders | (17,568) | (17,568) | ||||||
Noncash transfer of noncontrolling interest | (1,001) | 1,001 | ||||||
Avocados de Jalisco noncontrolling interest contribution | (269) | (269) | ||||||
Net income (loss) attributable to Calavo Growers, Inc. | 32,281 | 32,281 | ||||||
Ending balance at Oct. 31, 2018 | $ 18 | 157,928 | 12,141 | 93,124 | 1,748 | 264,959 | ||
Ending balance, shares at Oct. 31, 2018 | 17,567 | |||||||
Exercise of stock options and income tax benefit | 85 | 85 | ||||||
Exercise of stock options and income tax benefit, shares | 4 | |||||||
Stock compensation expense | 3,593 | 3,593 | ||||||
Restricted stock issued, shares | 24 | |||||||
Unrealized gain on Limoneira investment, net | $ (12,141) | 12,141 | ||||||
Dividend declared to shareholders | (19,354) | (19,354) | ||||||
Avocados de Jalisco noncontrolling interest contribution | (60) | (60) | ||||||
Net income (loss) attributable to Calavo Growers, Inc. | 36,646 | 36,646 | ||||||
Ending balance at Oct. 31, 2019 | $ 18 | 161,606 | 122,557 | 1,688 | 285,869 | |||
Ending balance, shares at Oct. 31, 2019 | 17,595 | |||||||
Exercise of stock options and income tax benefit | 86 | 86 | ||||||
Exercise of stock options and income tax benefit, shares | 2 | |||||||
Stock compensation expense | 4,487 | 4,487 | ||||||
Restricted stock issued, shares | 64 | |||||||
Dividend declared to shareholders | (20,343) | (20,343) | ||||||
Payments of minimum withholding taxes on net share settlement of equity awards | (1,179) | (1,179) | ||||||
Avocados de Jalisco noncontrolling interest contribution | (216) | (216) | ||||||
Net income (loss) attributable to Calavo Growers, Inc. | (13,625) | (13,625) | ||||||
Ending balance at Oct. 31, 2020 | $ 18 | $ 165,000 | $ 923 | $ 89,512 | $ 1,472 | $ 923 | $ 256,002 | |
Ending balance, shares at Oct. 31, 2020 | 17,661 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (PARENTHETICAL) - $ / shares | Oct. 26, 2020 | Dec. 06, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 |
Statement of Stockholders' Equity [Abstract] | |||||
Dividend declared per share | $ 1.15 | $ 1.10 | $ 1.15 | $ 1.10 | $ 1 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Cash Flows from Operating Activities: | |||
Net income (loss) | $ (13,841) | $ 36,586 | $ 32,012 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 16,093 | 13,633 | 13,042 |
Non-cash operating lease expense | 176 | ||
Provision for losses on accounts receivable | 22 | 35 | (10) |
Net loss from unconsolidated entities | 6,110 | 14,082 | 11,850 |
Net loss from unconsolidated entities | 11,851 | ||
Unrealized and realized net loss on Limoneira shares | 8,537 | 9,722 | |
Loss on reserve for FreshRealm note receivable and impairment of investment | 37,322 | ||
Interest income on notes to FreshRealm | (1,732) | (2,435) | |
Stock-based compensation expense | 4,487 | 3,593 | 4,633 |
Gain on sale of Temecula packinghouse | (216) | (2,077) | |
Loss on disposal of property, plant, and equipment | 32 | 304 | 121 |
Deferred income taxes | (1,930) | 930 | 4,866 |
Effect on cash of changes in operating assets and liabilities: | |||
Accounts receivable, net | 1,859 | 2,685 | 3,617 |
Inventories, net | (4,206) | (1,845) | (4,186) |
Prepaid expenses and other current assets | (782) | (2,508) | (729) |
Advances to suppliers | 3,077 | (983) | (1,009) |
Income taxes receivable/payable | (8,115) | 656 | (2,144) |
Other assets | (1,871) | (4,991) | (3,118) |
Payable to growers | (2,117) | (538) | (2,524) |
Deferred rent | 1,004 | (54) | |
Trade accounts payable, accrued expenses and other long-term liabilities | (14,027) | 4,246 | (7,942) |
Net cash provided by operating activities | 28,878 | 72,099 | 48,426 |
Cash Flows from Investing Activities: | |||
Acquisitions of and deposits on property, plant, and equipment | (11,343) | (16,721) | (15,004) |
Acquisition of SFFI, net of cash acquired of $623 | (18,396) | ||
Investment in unconsolidated entities | (1,477) | (3,636) | |
Proceeds received for repayment of San Rafael note | 417 | 436 | |
Proceeds received from Limoneira stock sales | 1,154 | ||
Proceeds from sale of Temecula packinghouse | 7,100 | ||
Infrastructure advance to tomato growers | (715) | (3,000) | |
Notes receivables advanced to FreshRealm | (23,800) | (11,500) | |
Proceeds received for repayment of loan to FreshRealm | 2,500 | ||
Net cash used in investing activities | (31,931) | (31,850) | (30,204) |
Cash Flows from Financing Activities: | |||
Payment of dividend to shareholders | (19,354) | (17,568) | (16,657) |
Proceeds from revolving credit facility | 236,500 | 212,500 | 278,500 |
Payments on revolving credit facility | (215,950) | (227,500) | (283,500) |
Payments of minimum withholding taxes on net share settlement of equity awards | (1,179) | (1,008) | (1,587) |
Payments on long-term obligations and finance leases | (968) | (305) | (136) |
Proceeds from stock option exercises | 86 | 85 | 53 |
Net cash used in financing activities | (865) | (33,796) | (23,327) |
Net increase (decrease) in cash and cash equivalents | (3,918) | 6,453 | (5,105) |
Cash and cash equivalents, beginning of period | 7,973 | 1,520 | 6,625 |
Cash and cash equivalents, end of period | 4,055 | 7,973 | 1,520 |
Supplemental Information: | |||
Interest | 878 | 1,108 | 874 |
Income taxes | 5,470 | 10,224 | 9,262 |
Noncash Investing and Financing Activities: | |||
Right of use assets obtained in exchange for new financing lease obligations | 529 | ||
Notes receivable from FreshRealm converted to investment in FreshRealm | 2,761 | ||
Declared dividends payable | 20,343 | 19,354 | 17,568 |
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 | 2,059 | 946 |
Collection for Agricola Belher Infrastructure Advance | $ 800 | $ 800 | 200 |
Unrealized investment gain | $ 2,247 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands | 12 Months Ended |
Oct. 31, 2020USD ($) | |
Statement of Cash Flows [Abstract] | |
Cash acquired | $ 623 |
Description of the business
Description of the business | 12 Months Ended |
Oct. 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, Renaissance Food Group (RFG) and Calavo Foods. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Oct. 31, 2020 | |
Basis of Presentation and Significant Accounting Policies | |
Basis of Presentation and Significant Accounting Policies | 2. Basis of Presentation and Significant Accounting Policies The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the U.S. Our consolidated financial statements include the accounts of Calavo Growers, Inc. and our wholly owned subsidiaries, Calavo de Mexico S.A. de C.V. (Calavo de Mexico), Calavo Growers de Mexico, S. de R.L. de C.V. ( Calavo Growers de Mexico), Maui Fresh International, Inc. (Maui), Hawaiian Sweet, Inc. (HS), Hawaiian Pride, LLC (HP), Calavo Salsa Lisa, LLC (CSL), Avocados de Jalisco, S.A.P.I. de C.V. (Avocados de Jalisco), in which we have an 83 percent ownership interest, and RFG. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Among the significant estimates affecting the financial statements are those related to valuation allowances for valuation allowances for accounts and notes receivable, goodwill, grower advances, inventories, long-lived assets, valuation of and estimated useful lives of identifiable intangible assets, stock-based compensation, promotional allowances and income taxes. On an ongoing basis, management reviews its estimates based upon currently available information. Actual results could differ materially from those estimates. Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current year presentation. Specifically, intangible assets are now presented as a separate line item on the accompanying consolidated balance sheet, and were previously included within other assets. Cash and Cash Equivalents We consider all highly liquid financial instruments purchased with an original maturity date of three months or less to be cash equivalents. The carrying amounts of cash and cash equivalents approximate their fair values. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of non-trade receivables, infrastructure advances and prepaid expenses. Non-trade receivables were $5.7 million and $5.3 million at October 31, 2020 and 2019. Included in non-trade receivables are $1.5 million and $1.9 million related to the current portion of non-CDM Mexican IVA (i.e. value-added) taxes at October 31, 2020 and 2019 (See Note 15). Infrastructure advances are discussed below. Prepaid expenses totaling $4.2 million and $3.4 million at October 31, 2020 and 2019, are primarily for insurance, rent and other items. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is computed on a monthly weighted-average basis, which approximates the first-in, first-out method; market is based upon estimated replacement costs. Costs included in inventory primarily include the following: fruit, picking and hauling, overhead, labor, materials and freight. Property, Plant, and Equipment Property, plant, and equipment are stated at cost and depreciated over their estimated useful lives using the straight-line method. Leasehold improvements are stated at cost and amortized over the lesser of their estimated useful lives or the term of the lease, using the straight-line method. Useful lives are as follows: buildings and improvements - 7 to 50 years ; leasehold improvements - the lesser of the term of the lease or 7 years ; equipment - 7 to 25 years ; information systems hardware and software – 3 to 10 years . Significant repairs and maintenance that increase the value or extend the useful life of our fixed asset are capitalized. On-going maintenance and repairs are charged to expense. Goodwill and Acquired Intangible Assets Goodwill, defined as unidentified asset(s) acquired in conjunction with a business acquisition, is tested for impairment on an annual basis and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment. We can use a qualitative test, known as "Step 0," or a two-step quantitative method to determine whether impairment has occurred. In Step 0, we elect to perform an optional qualitative analysis and based on the results skip the two step analysis. In fiscal 2020, 2019 and 2018, we elected to implement Step 0 and were not required to conduct the remaining two step analysis. Goodwill impairment testing requires significant judgment and management estimates, including, but not limited to, the determination of (i) the number of reporting units, (ii) the goodwill and other assets and liabilities to be allocated to the reporting units and (iii) the fair values of the reporting units. The estimates and assumptions described above, along with other factors such as discount rates, will significantly affect the outcome of the impairment tests and the amounts of any resulting impairment losses. The results of our Step 0 assessments indicated that it was more likely than not that the fair value of our reporting unit exceeded its carrying value and therefore we concluded that there were no impairments for the years ended October 31, 2020, 2019 and 2018. Long-lived Assets Long-lived assets, including fixed assets and intangible assets (other than goodwill), are continually monitored and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. The determination of recoverability is based on an estimate of undiscounted cash flows expected to result from the use of an asset and its eventual disposition. The estimate of undiscounted cash flows is based upon, among other things, certain assumptions about future operating performance, growth rates and other factors. Estimates of undiscounted cash flows may differ from actual cash flows due to, among other things, technological changes, economic conditions, changes to the business model or changes in operating performance. If the sum of the undiscounted cash flows (excluding interest) is less than the carrying value, an impairment loss will be recognized, measured as the amount by which the carrying value exceeds the fair value of the asset. For fiscal years 2020 and 2019, we performed our annual assessment of long-lived assets and determined that no impairment existed as of October 31, 2020 and 2019. Investments We account for non-marketable investments using the equity method of accounting if the investment gives us the ability to exercise significant influence over, but not control, an investee. Significant influence generally exists when we have an ownership interest representing between 20% and 50% of the voting stock of the investee. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and our proportionate share of earnings or losses and distributions. In December 2014, Calavo formed a wholly owned subsidiary Calavo Growers De Mexico, S. de R.L. de C.V. (Calavo Sub). In July 2015, Calavo Sub entered into a Shareholder Agreement with Grupo Belo del Pacifico, S.A. de C.V., (Belo) a Mexican Company owned by Agricola Belher, and Agricola Don Memo, S.A. de C.V. (Don Memo). Don Memo, a Mexican corporation formed in July 2013, is engaged in the business of owning and improving land in Jalisco, Mexico for the growing of tomatoes and other produce and the sale and distribution of tomatoes and other produce. Belo and Calavo Sub have an equal one-half ownership interest in Don Memo. Pursuant to a management service agreement, Belo, through its officers and employees, shall have day-to-day power and authority to manage the operations. In fiscal 2018, we contributed $0.1 million as investments in Don Memo. This investment contribution represent Calavo Sub’s 50 % ownership in Don Memo, which is included in investment in unconsolidated entities on our balance sheet. We use the equity method to account for this investment. As of October 31, 2020 and 2019, we have an investment of $6.1 million and $4.9 million in Don Memo. 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. 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. We record the amount of our investment in FreshRealm in “Investment in unconsolidated entities” on our Consolidated Balance Sheets and recognize losses in FreshRealm in “Income/ (loss) from unconsolidated entities” in our Consolidated Statement of Operations. See Note 16 and Note 20 for additional information. As of October 31, 2020, our ownership percentage in FreshRealm was approximately 37%. Marketable Securities Our marketable securities consist of our investment in Limoneira Company (Limoneira) stock. We currently own less than of Limoneira’s outstanding common stock. These securities are considered available for sale securities based on management’s intent with respect to such securities and are carried at fair value as determined from quoted market prices. On November 1, 2018 we adopted ASU 2016-01, Financial Instruments, Recognition and Measurement of Financial Assets and Liabilities Advances to Suppliers We advance funds to third-party growers primarily in Mexico for various farming needs. Typically, we obtain collateral (i.e. fruit, fixed assets, etc.) that approximates the value at risk, prior to making such advances. We continuously evaluate the ability of these growers to repay advances in order to evaluate the possible need to record an allowance. No such allowance was required at October 31, 2020 and 2019. Pursuant to our distribution agreement, which was amended in fiscal 2011, with Agricola Belher (Belher) of Mexico, a producer of fresh vegetables, primarily tomatoes, for export to the U.S. market, Belher agreed, at their sole cost and expense, to harvest, pack, export, ship, and deliver tomatoes exclusively to our company, primarily our Arizona facility. In exchange, we agreed to sell and distribute such tomatoes, make advances to Belher for operating purposes, provide additional advances as shipments are made during the season (subject to limitations, as defined), and return the proceeds from such tomato sales to Belher, net of our commission and aforementioned advances. These advances will be collected through settlements by the end of each year. For fiscal 2020 and 2019, we agreed to advance Similar to Belher, we make advances to Don Memo for operating purposes, provide additional advances as shipments are made during the season, and return the proceeds from such tomato sales to Don Memo, net of our commission and aforementioned advances. As of October 31, 2020 and 2019, we have total advances of $2.4 million and $3.7 million to Don Memo, which is recorded in advances to suppliers, offset by tomato liabilities from the sales of tomatoes per the tomato marketing agreement. Infrastructure Advances Pursuant to our infrastructure agreements, we make advances to be used solely for the acquisition, construction, and installation of improvements to and on certain land owned/controlled by Belher and Don Memo, as well as packing line equipment. In October 2020, we entered into an infrastructure loan agreement with Don Memo for $2.4 million secured by Don Memo’s property and equipment. This infrastructure loan will incur interest at . In October 2020, we paid million will be paid in January 2021. As of October 31, 2020, we have advanced a total of In August 2018, we entered into an amended infrastructure loan agreement with Belher and advanced $3.0 million. This amount shall be paid back in annual installments of . Loans prior to this amended agreement incur interest at Libor plus As of October 31, 2020, we have loaned a total of million included in other long-term assets). As of October 31, 2019, we have loaned a total of million included in other long-term assets). Belher may prepay, without penalty, all or any portion of the loans at any time. In order to secure their obligations pursuant to both agreements discussed above, Belher granted us a first-priority security interest in certain assets, including cash, inventory and fixed assets, as defined. Accrued Expenses Included in accrued expenses are liabilities related to the receipt of goods and/or services for which an invoice has not yet been received. These totaled approximately $26.4 million and $18.7 million for the year ended October 31, 2020 and 2019. 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 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 consolidated balance sheets as part of accrued expenses. Principal vs. Agent Considerations We frequently enter 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 evaluate 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 such revenues are reported on a gross basis. Practical Expedients The Company elected the following practical expedients upon its adoption of Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers ● Shipping and handling costs - The company elected to account for shipping and handling activities that occur before the customer has obtained control of a good as fulfillment activities rather than as a promised service. ● Measurement of transaction price - The Company has elected to exclude from the measurement of transaction price all taxes assessed by a governmental authority that are both imposed on, and concurrent with, a specific revenue-producing transaction and collected by the Company from a customer for sales taxes. ● Contract costs - The Company has elected to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period is one year or less. The adoption of ASC 606 did not have an impact on our consolidated results of operations. Customers We sell to retail grocery, foodservice, club stores, mass merchandisers, food distributors and wholesale customers. Our top of our consolidated net sales in fiscal years 2020, 2019 and 2018. Sales to our largest customer, Kroger (including its affiliates), represented approximately 2018. Additionally, Wal-Mart (including its affiliates) represented approximately of net sales in fiscal years 2020, 2019 and 2018. Shipping and Handling We include shipping and handling fees billed to customers in net revenues. Amounts incurred by us for freight are included in cost of goods sold. Promotional Allowances We provide for promotional allowances at the time of sale, based on our historical experience. Our estimates are generally based on evaluating the historical relationship between promotional allowances and gross sales. The derived percentage is then applied to the current period’s sales revenues in order to arrive at the appropriate debit to sales allowances for the period. The offsetting credit is made to accrued expenses. When certain amounts of specific customer accounts are subsequently identified as promotional, they are written off against this allowance. Actual amounts may differ from these estimates and such differences are recognized as an adjustment to net sales in the period they are identified. Allowance for Accounts Receivable We provide an allowance of $3.5 million and $3.4 million for estimated uncollectible accounts receivable balances based on historical experience and the aging of the related accounts receivable as of October 31, 2020 and 2019. Loss on Reserve for FreshRealm Note Receivable and Impairment of Investment At the beginning of fiscal year 2020, we had a note receivable from FreshRealm totaling $35.2 million which have been fully reserved during fiscal 2020. See Note 16 and Note 20 for further information . During the third quarter of fiscal 2020, the results of operations of FreshRealm deteriorated significantly from our expectations three months prior, 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. Consignment Arrangements We frequently enter 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. Although we generally do not take legal title to these avocados and perishable products, we do assume responsibilities (principally assuming credit risk, inventory loss and delivery risk, and pricing risk) that are consistent with acting as a principal in the transaction. Accordingly, the accompanying financial statements include sales and cost of sales from the sale of avocados and perishable products procured under consignment arrangements. Amounts recorded for each of the fiscal years ended October 31, 2020, 2019 and 2018 in the financial statements pursuant to consignment arrangements are as follows (in thousands): 2020 2019 2018 Sales $ 64,922 $ 64,510 $ 43,490 Cost of Sales 57,554 57,061 38,186 Gross Profit $ 7,368 $ 7,449 $ 5,304 Advertising Expense Advertising costs are expensed when incurred and are generally included as a component of selling, general and administrative expense. Such costs were approximately $0.4 million, $0.3 million and $0.2 million for fiscal years 2020, 2019, and 2018. Research and Development million. Total research and development costs for fiscal years 2019 and 2018 were less than $0.1 million. Other Income Included in other income is dividend income totaling $0.6 million for fiscal year 2020. Dividend income totaled $0.6 million and $0.6 million for fiscal years 2019 and 2018. See Note 8 for related party disclosure related to other income. Income Taxes We account for deferred tax liabilities and assets for the future consequences of events that have been recognized in our consolidated financial statements or tax returns. Measurement of the deferred items is based on enacted tax laws. In the event the future consequences of differences between financial reporting bases and tax bases of our assets and liabilities result in a deferred tax asset, we perform an evaluation of the probability of being able to realize the future benefits indicated by such asset. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion or all of the deferred tax asset will not be realized. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As a multinational corporation, we are subject to taxation in many jurisdictions, and the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. If we ultimately determine that the payment of these liabilities will be unnecessary, the liability will be reversed and we will recognize a tax benefit during the period in which it is determined the liability no longer applies. Conversely, we record additional tax charges in a period in which it is determined that a recorded tax liability is less than the ultimate assessment is expected to be. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability for U.S. or foreign taxes may be materially different from management’s estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities. Basic and Diluted Net Income (loss) per Share Basic earnings per share is calculated using the weighted-average number of common shares outstanding during the period without consideration of the dilutive effect of stock options and contingent consideration. Diluted earnings per common share is calculated using the weighted-average number of common shares outstanding during the period after consideration of the dilutive effect of stock options and the effect of contingent consideration shares. Basic and diluted net income per share is calculated as follows (U.S. dollars in thousands, except per share data): Year ended October 31, 2020 2019 2018 Numerator: Net income (loss) attributable to Calavo Growers, Inc. $ (13,625) $ 36,646 $ 32,281 Denominator: Weighted average shares – Basic 17,564 17,519 17,477 Effect of dilutive securities – Restricted stock/options — 74 91 Weighted average shares – Diluted 17,564 17,593 17,568 Net income (loss) per share attributable to Calavo Growers, Inc: Basic $ (0.78) $ 2.09 $ 1.85 Diluted $ (0.78) $ 2.08 $ 1.84 Stock-Based Compensation We account for awards of equity instruments issued to employees under the fair value method of accounting and recognize such amounts in our statements of operations. 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. For the years ended October 31, 2020, 2019 and 2018, we recognized compensation expense of $4.5 million, $3.6 million, and $4.6 million related to stock-based compensation (See Note 12). The value of the stock-based compensation was determined from quoted market prices at the date of the grant. Foreign Currency Translation and Remeasurement Our foreign operations are subject to exchange rate fluctuations and foreign currency transaction costs. The functional currency of our foreign subsidiaries is the United States 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 are included in income. Gains and losses resulting from foreign currency transactions are also recognized currently in income. Total foreign currency translation losses for fiscal 2020, 2019 and 2018, net of gains, were $1.0 million, $0.3 million, and $0.8 million. Fair Value of Financial Instruments We believe that the carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and short-term borrowings approximates fair value based on either their short-term nature or on terms currently available to the Company in financial markets. Due to current market rates, we believe that our fixed-rate long-term obligations and finance leases have nearly the same fair value and carrying value of approximately $7.1 million and $6.2 million as of October 31, 2020 and 2019. Deferred Rent As part of certain lease agreements, we receive construction allowances from our landlords. The construction allowances are deferred and amortized on a straight-line basis over the life of the lease as a reduction to rent expense. At the beginning of fiscal 2020, we have adopted the new lease accounting standard and as a result deferred rent is no longer recorded. See Note 17 for further information. Derivative Financial Instruments We were not a party to any material derivative instruments during the fiscal year. It is currently our intent not to use derivative instruments for speculative or trading purposes. Additionally, we do not use any hedging or forward contracts to offset market volatility. 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 Comprehensive Income Comprehensive income is defined as all changes in a company's net assets, except changes resulting from transactions with shareholders. For the fiscal year ended October 31, 2018, other comprehensive income includes the unrealized gain on our Limoneira investment totaling $1.7 million, net of income taxes. Limoneira’s stock price at October 31, 2018 equaled $24.65 per share. On November 1, 2018 we adopted a new accounting standard, which requires equity investments (except those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income. With the adoption of this new standard, we reclassed unrealized gains of Noncontrolling Interest The following tables reconcile shareholders’ equity attributable to noncontrolling interest related to Avocados de Jalisco (in thousands). Year ended Year ended Avocados de Jalisco noncontrolling interest October 31, 2020 October 31, 2019 Noncontrolling interest, beginning $ 1,688 $ 1,748 Net loss attributable to noncontrolling interest of Avocados de Jalisco (216) (60) Noncontrolling interest, ending $ 1,472 $ 1,688 |
Inventories
Inventories | 12 Months Ended |
Oct. 31, 2020 | |
Inventories | |
Inventories | 3. Inventories Inventories consist of the following (in thousands): October 31, October 31, 2020 2019 Fresh fruit $ 14,677 $ 15,874 Packing supplies and ingredients 12,540 11,370 Finished prepared foods 14,570 9,645 $ 41,787 $ 36,889 We assess the recoverability of inventories through an ongoing review of inventory levels in relation to sales and forecasts and product marketing plans. When the inventory on hand, at the time of the review, exceeds the foreseeable demand, the value of inventory that is not expected to be sold is written down. The amount of the write-down is the excess of historical cost over estimated realizable value. Once established, these write-downs are considered permanent adjustments to the cost basis of the excess inventory. The assessment of the recoverability of inventories and the amounts of any write-downs are based on currently available information and assumptions about future demand and market conditions. Demand for processed avocado products may fluctuate significantly over time, and actual demand and market conditions may be more or less favorable than our projections. In the event that actual demand is lower than originally projected, additional inventory write-downs may be required. |
Property, Plant, and Equipment
Property, Plant, and Equipment | 12 Months Ended |
Oct. 31, 2020 | |
Property, Plant, and Equipment | |
Property, Plant, and Equipment | 4. Property, Plant, and Equipment Property, plant, and equipment consist of the following (in thousands): October 31, 2020 2019 Land $ 11,008 $ 11,008 Buildings and improvements 44,984 45,614 Leasehold improvements 33,047 26,267 Equipment 108,505 99,237 Information systems - hardware and software 11,385 10,822 Construction in progress 5,244 10,351 214,173 203,299 Less accumulated depreciation and amortization (83,903) (71,201) $ 130,270 $ 132,098 Depreciation expense was $13.9 million, $13.0 million and $11.9 million for fiscal years 2020, 2019, and 2018. Included in property, plant, and equipment is finance leases. Amortization of finance leases was $1.0 million for fiscal year 2020. In February 2016, the FASB issued ASU 2016-02, Leases , and has subsequently issued several supplemental and/or clarifying ASU's (collectively, "Topic 842"), which requires a dual approach for lease accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases result in the lessee recognizing a right of use asset and a corresponding lease liability. For finance leases, the lessee would recognize interest expense and amortization of the right-of-use asset, and for operating leases, the lessee would recognize lease expense on a straight-line basis. See Note 17. |
Other Assets and Intangibles
Other Assets and Intangibles | 12 Months Ended |
Oct. 31, 2020 | |
Other Assets and Intangibles | |
Other Assets and Intangibles | 5. Other Assets and Intangibles Other assets consist of the following (in thousands): October 31, October 31, 2020 2019 Mexican IVA (i.e. value-added) taxes receivable (see note 15) $ 30,126 $ 27,592 Infrastructure loan to Agricola Belher and Agricola Don Memo 1,215 1,800 Other 1,217 1,514 $ 32,558 $ 30,906 The intangible assets consist of the following (in thousands): October 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 $ (8,613) $ 8,727 $ 7,640 $ (7,640) $ — Trade names 11 years 4,060 (2,852) 1,208 2,760 (2,760) — Trade secrets/recipes 9 years 630 (517) 113 630 (470) 160 Brand name intangibles indefinite 275 — 275 275 — 275 Intangibles, net $ 22,305 $ (11,982) $ 10,323 $ 11,305 $ (10,870) $ 435 We recorded amortization expense of approximately $1.1 million, $0.7 million, and $1.1 million for fiscal years 2020, 2019, and 2018. We anticipate recording amortization expense of approximately $1.6 million for each of fiscal years 2021 through 2022 , $1.5 million for each fiscal years 2023 through 2024 and $4.1 million thereafter. |
Revolving Credit Facilities
Revolving Credit Facilities | 12 Months Ended |
Oct. 31, 2020 | |
Revolving Credit Facilities | |
Revolving Credit Facilities | 6. Revolving Credit Facilities We have a revolving credit facility with Bank of America, N.A. (Bank of America) as administrative agent and Merrill Lynch, Pierce, Fenner & Smith Inc. as joint lead arranger and sole bookrunner, and Farm Credit West (FCW), as joint lead arranger. The Credit Agreement provides for a 14, 2021 (the Credit Facility). For our line of credit the weighted-average interest rate was 1.9% and 3.8 % at October 31, 2020 and 2019. Under this credit facility, we had $20.6 million outstanding as of October 31, 2020 and there was zero outstanding as of October 31, 2019. We expect to refinance our line of credit in early fiscal 2021. We believe that cash flows from operations, the available Credit Facility, and other sources such as our investment in Limoneira, 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. Provided there exists no default, upon notice to Bank of America, the Company may from time to time, request an increase in the Credit Facility by an amount not exceeding Borrowings under the Credit Facility will be at the Company’s discretion either at a Eurodollar Rate (LIBOR) loan plus applicable margin or a base rate loan plus applicable margin. The applicable margin will be based on the Company’s Consolidated Leverage Ratio and can range from The 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 to 1.00. We were in compliance with all such covenants at October 31, 2020 and 2019. The Credit Facility also contains customary events of default. If any event of default occurs and is continuing, Bank of America may take the following actions: (a) declare the commitment of each lender to make loans and any obligation of the Issuer to make credit extensions to be terminated; (b) declare the unpaid principal amount of all outstanding loans, all interest, and all other amounts to be immediately due and payable; (c) require that Calavo cash collateralize the obligations; and (d) exercise on behalf of itself, the lenders and the Issuer all rights and remedies available to it. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Oct. 31, 2020 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 7. Commitments and Contingencies Commitments and guarantees We lease facilities and certain equipment under non-cancelable leases expiring at various dates through 2031. We are committed to make minimum cash payments under these agreements as of October 31, 2020. See Note 17 for the adoption of the new lease accounting standard. In April 2019, we sold our Temecula, California packinghouse for $7.1 million in cash and, concurrently, leased back a portion of the facility representing approximately one During our third quarter of fiscal year 2019, we entered into a 10-year building and equipment lease for fresh food facility in Conley, GA. This facility is primarily intended to process fresh-cut fruit & vegetables and prepared foods products for our RFG business segment. Annual rent for the building and equipment approximates $0.9 million and $0.6 million, respectively, over the life of the lease. The lease for the equipment is considered to be a capital lease, therefore, we calculated the present value of the minimum lease payments related to the equipment and capitalized $2.8 million as a capital lease in property, plant and equipment and recorded $2.8 million as a lease obligation. We indemnify our directors and have the power to indemnify each of our officers, employees and other agents, to the maximum extent permitted by applicable law . Litigation From time to time, we are also involved in 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. $103.5 million USD at October 31, 2020) related to Income Tax, Flat Rate Business Tax and Value Added Tax, corresponding to the fiscal 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 year 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 Note 15 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. During November 2020, we were in contact with the MFM and presented our arguments that we believe undermine the legality of the 2011 Assessment, asserting among others, the determination by the SAT’s central legal department described below, which recognizes the legal validity of our operation as a maquiladora. Based on the foregoing, the MFM has offered to take into account such argument in its resolution of the pending administrative appeal. 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. $122.4 million USD at October 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 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 Note 15 regarding IVA refunds) indicating that they believe that our legal interpretation is accurate on a matter that is central to the 2013 Assessment. We believe this recent ruling significantly undermines the 2013 Assessment we received in July 2018. In light of the foregoing, the Company is currently considering its options for resolution of the two tax assessments: - In the unlikely event of an unfavorable resolution of the administrative appeal, we could file a nullification suit with the Mexican Tax Court. In order to file such suit, we would be required to post collateral or a bond for the total amount of the tax assessment (including inflation adjustments, penalties and surcharges) while the suit is in process, which could last from two to three years. If the suit results in an unfavorable ruling, there is an option to appeal to the Collegiate Circuit Court while maintaining the collateral or bond in place. - In the event of filing a nullification suit, the collateral or bonding requirement may be avoided by filing a nullification suit on substantive matters (“Juicio de Fondo”). This type of suit permits only arguments on the legal merits of the taxpayer’s case, and limits arguments on procedural matters. The estimated time for resolution of this matter could be affected by the situation related to the COVID-19 pandemic. We continue to believe that the ultimate resolution of these matters is unlikely to have a material effect on our consolidated financial position. |
Related party transactions
Related party transactions | 12 Months Ended |
Oct. 31, 2020 | |
Related party transactions | |
Related party transactions | 8. 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. During the years ended October 31, 2020, 2019, and 2018, the aggregate amount of avocados procured from entities owned or controlled by members of our Board of Directors was $18.0 million, $11.9 million and $11.2 million. We did not have any amounts due to Board members as of October 31, 2020 and 2019. During fiscal years 2020, 2019, and 2018, we received $0.5 million, $0.5 million and $0.4 million as dividend income from Limoneira. In addition, we lease office space from Limoneira for our corporate office. Rent to Limoneira amounted to approximately $0.3 million for fiscal years 2020, 2019, and 2018. Harold Edwards, who is a member of our Board of Directors, is the Chief Executive Officer of Limoneira Company. We have less than 10% ownership interest in Limoneira. In December 2018, our former Chief Executive Officer retired from Limoneira’s Board of Directors. 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 years ended October 31, 2020, 2019, and 2018, Calavo Growers, Inc. paid fees totaling approximately $0.4 million, $0.4 million and $0.2 million to TroyGould PC. The director has advised us of his intention to retire from TroyGould PC in December 2020. In December 2014, Calavo formed a wholly owned subsidiary Calavo Growers De Mexico, S. de R.L. de C.V. (Calavo Sub). In July 2015, Calavo Sub entered into a Shareholder Agreement with Grupo Belo del Pacifico, S.A. de C.V., (Belo) a Mexican Company owned by Agricola Belher, and formed Agricola Don Memo, S.A. de C.V. Belo and Calavo Sub have an equal one-half ownership interest in Don Memo in exchange for $2 million each. Pursuant to a management service agreement, Belo, through its officers and employees, has day-to-day power and authority to manage the operations. Therefore, Don Memo is accounted for on the equity method as an unconsolidated entity. Belo is entitled to a management fee, as defined, which is payable annually in July of each year. Additionally, Calavo Sub is entitled to commission, for the sale of produce in the Mexican National Market, U.S., Canada, and any other overseas market. In January 2016, our unconsolidated subsidiary, Don Memo, entered into a loan agreement in the amount of $4.5 million with Bank of America, N.A. (BoA) proceeds of which were used by Don Memo to repay debt owed to Calavo. Also in January 2016, Calavo and BoA, entered into a Continuing and Unconditional Guaranty Agreement (the Guaranty). Under the terms of the Guaranty, Calavo unconditionally guarantees and promises to pay Bank of America any and all Indebtedness, as defined therein, of our unconsolidated subsidiary Don Memo to BoA. Belo has also entered into a similar guarantee with BoA. In December 2018, Don Memo received third party financing, repaid its loan to and therefore, Calavo is no longer a guarantor for Don Memo’s indebtedness. As of October 31, 2020, 2019 and 2018, we have an investment of $6.1 million, $4.9 million and $4.9 million, representing Calavo Sub’s 50% ownership in Don Memo, which is 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, other direct expenses, and aforementioned advances. In September 2018, we contributed $0.2 million, of which $0.1 million was a short-term loan, and $0.1 million was an additional investment. In October 2020, we entered into an infrastructure loan agreement with Don Memo for $2.4 million secured by Don Memo’s property and equipment. This infrastructure loan will incur interest at . In October 2020, we paid million will be paid in January 2021. As of October 31, 2020, we have loaned a total of million (included in other long-term assets). As of October 31, 2020, 2019 and 2018, we had outstanding advances of We had grower advances due from Belher of $4.5 million, $4.5 million and $4.0 million as of October 31, 2020, 2019 and 2018. In August 2018, we entered into an amended infrastructure agreement with Belher and advanced . In August 2020, we have amended this agreement to lower the interest rate to million as of October 31, 2020, 2019 and 2018. Of these infrastructure advances $0.9 million was recorded as receivable in prepaid and other current assets and $0.9 million is included in other assets. During the year ended October 31, 2020, 2019 and 2018, we purchased $26.9 million, $19.5 million, and $14.1 million of tomatoes from Belher pursuant to our consignment agreement. In August 2015, we entered into Shareholder’s Agreement with various partners which created Avocados de Jalisco, S.A.P.I. de C.V. Avocados de Jalisco is a Mexican corporation created to engage in procuring, packing and selling avocados. This entity is approximately 83 % owned by Calavo and is consolidated in our financial statements. Avocados de Jalisco built a packinghouse located in Jalisco, Mexico and such packinghouse began operations in June of 2017. As of October 31, 2020 and 2019, we have made an insignificant amount of preseason advances to various partners of Avocados de Jalisco. During the year ended October 31, 2020, 2019 and 2018, we purchased approximately $8.3 million, $2.5 million and $1.8 million of avocados from the partners of Avocados de Jalisco. In January 2018, we transferred $1.0 million of equity interest to the Avocados de Jalisco noncontrolling members. As of October 31, 2019, we have an equity investment of $5.8 million in 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. See Note 16 and Note 20 for additional information. As of October 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 had 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 for a total outstanding principal amount of $32.8 million, not including accrued interest. 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 in 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%. 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. As of October 31, 2019, we have $35.2 million in note receivables (including interest) from FreshRealm. During the third quarter of fiscal 2020, the results of operations of FreshRealm have deteriorated significantly from our expectations three months prior, 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 $0.3 million in trade accounts receivable as of October 31, 2020, which resulted in a loss of $37.3 million, which is included in the accompanying consolidated statement of operations under “Loss on reserve for FreshRealm note receivable and impairment of investment”. As of August 1, 2020, we have discontinued the accrual of interest income on the note receivables. In connection with the foregoing, we recorded a $9.5 million discreet income tax benefit for the third quarter of fiscal 2020. One officer and five members of our board of directors have investments in FreshRealm as of October 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 received $0.4 million, $0.2 million and $0.3 million in storage services revenue from FreshRealm for the year ended October 31, 2020, 2019 and 2018. For the year ended October 31, 2020, 2019 and 2018, RFG sold $0.3 million, $2.0 million and $9.9 million of products to FreshRealm. The previous owners of RFG, one of which is currently the Chief Executive Officer of Calavo, have a majority ownership of certain entities that provide various services to RFG, specifically LIG Partners, LLC and THNC, LLC. One of RFG’s California operating entities leases a building from LIG Partners, LLC (LIG) pursuant to an operating lease. This lease with LIG was renewed in April 2019, through May 2026. RFG’s Texas operating entity leases a building from THNC, LLC (THNC) pursuant to an operating lease. In the first quarter of fiscal 2020, these facilities have been sold to a third party and our lease has transferred to the new owners. See the following tables for the related party activity for fiscal years 2020 and 2019: Year ended October 31, (in thousands) 2020 2019 Rent paid to LIG $ — $ 579 Rent paid to THNC, LLC $ — $ 795 |
Income Taxes
Income Taxes | 12 Months Ended |
Oct. 31, 2020 | |
Income Taxes | |
Income Taxes | 9. Income Taxes On March 27, 2020, the President of the United States signed and enacted into law the Coronavirus Aid, Relief and Economic Security (CARES) Act. The CARES Act is a relief package intended to assist many aspects of the Country’s economy of which certain components of the Act impacted the Company's 2020 income tax provision. We recorded approximately $1.1 million of tax benefit as a result of the provision allowing taxpayers to carry back net operating losses to offset taxable income on previously filed tax returns. The Company determined that certain foreign earnings to be indefinitely reinvested outside the United States. Our intent is to permanently reinvest these funds outside of the United States and our current plans do not demonstrate a need to repatriate the cash to fund our U.S. operations. However, if these funds were repatriated, we would be required to accrue and pay applicable United States taxes (if any) and withholding taxes payable to foreign tax authorities. The income tax provision (benefit) consists of the following for the years ended October 31, (in thousands): 2020 2019 2018 Current: Federal $ (5,684) $ 9,146 $ 7,115 State (214) 2,516 1,582 Foreign 645 290 (844) Total current (5,253) 11,952 7,853 Deferred: Federal 575 516 3,328 State (505) 209 690 Foreign 260 205 848 Total deferred 330 930 4,866 Change in valuation allowance 631 — — Total income tax provision (benefit) $ (4,292) $ 12,882 $ 12,719 At October 31, 2020 and 2019, gross deferred tax assets totaled approximately $31.5 million and $18.5 million, while gross deferred tax liabilities totaled approximately $28.4 million and $15.0 million. Deferred income taxes reflect the net of temporary differences between the carrying amount of assets and liabilities for financial reporting and income tax purposes. Significant components of our deferred taxes assets (liabilities) as of October 31, are as follows (in thousands): 2020 2019 Property, plant, and equipment (11,552) (10,407) Intangible assets 6,861 11,805 Unrealized gain, Limoneira investment (116) (2,352) Investment in FreshRealm 1,096 (1,513) Stock-based compensation 812 857 State taxes (592) (437) Credits and incentives 1,345 1,109 Allowance for accounts receivable 1,165 834 Inventories 864 445 Accrued liabilities 2,119 3,423 Operating lease - Right of use assets (15,732) — Operating lease liabilities 16,895 — Net operating loss 369 — Valuation allowance (631) — Other (417) (317) Long-term deferred income taxes $ 2,486 $ 3,447 As of October 31, 2020, the Company has gross federal net operating losses of $8 million that are expected to be carried back to one of the five preceding tax years and do not expire, and gross state net operating loss carryforwards of approximately $7.2 million with carryforward periods primarily ranging from 20 years to indefinite. The Company records a valuation allowance against deferred tax assets when determined that all or a portion of the deferred tax assets are not more likely than not to be realized based on all available evidence. As of October 31, 2020, the Company recorded an approximate $0.6 million valuation allowance against the deferred tax assets for state tax credit carryforwards that are more likely than not to expire unutilized between 2022 and 2028. A reconciliation of the significant differences between the federal statutory income tax rate and the effective income tax rate on pretax income for the years ended October 31, is as follows: 2020 2019 2018 Federal statutory tax rate 21.0 % 21.0 % 23.3 % State taxes, net of federal effects 4.4 3.7 3.6 NOL carryback - CARES Act 6.2 — — Foreign income taxes greater than U.S. (2.3) 0.4 0.7 Revaluation of deferred taxes — — 4.5 Section 199 deduction — — (1.9) Provision to return (2.5) 0.7 (1.2) Transition Tax — — 0.6 State rate change (0.1) (0.2) 0.2 Valuation allowance (2.7) — — Other (0.3) 0.4 (1.4) 23.7 % 26.0 % 28.4 % For fiscal years 2020, 2019 and 2018, income (loss) before income taxes (benefit) related to domestic operations was approximately $(18.9) million, $47.9 million, and $45.8 million. For fiscal years 2020, 2019 and 2018, income (loss) before income taxes (benefit) related to foreign operations was approximately $0.8 million, $1.6 million and $(1.1 ) million. As of October 31, 2020 and 2019, we had liability of $0.1 million and $0.1 million for unrecognized tax benefits related to various foreign income tax matters. We are subject to U.S. federal income tax as well as income of multiple state tax and foreign tax jurisdictions. We are no longer subject to U.S. income tax examinations for the fiscal years prior to October 31, 2017, and are no longer subject to state income tax examinations for fiscal years prior to October 31, 2016. |
Segment Information
Segment Information | 12 Months Ended |
Oct. 31, 2020 | |
Segment Information | |
Segment Information | 10. Segment Information As discussed in Note 1, we report our operations in three different business segments: (1) Fresh products, (2) Calavo Foods, and (3) RFG. These three 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 all operations that involve the distribution of avocados and other fresh produce products. The Calavo Foods segment represents all 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. The following table sets forth sales by product category, by segment (in thousands) Fresh Calavo Interco. products Foods RFG Elimins. Total (All amounts are presented in thousands) Year ended October 31, 2020 Net sales $ 585,052 $ 75,220 $ 404,723 $ (5,624) $ 1,059,371 Cost of sales 537,489 54,277 383,331 (5,624) 969,473 Gross profit $ 47,563 $ 20,943 $ 21,392 $ — $ 89,898 Year ended October 31, 2019 Net sales $ 621,183 $ 94,734 $ 486,063 $ (6,203) $ 1,195,777 Cost of sales 534,600 73,735 465,563 (6,203) 1,067,695 Gross profit $ 86,583 $ 20,999 $ 20,500 $ — $ 128,082 Year ended October 31, 2018 Net sales $ 553,208 $ 91,646 $ 448,930 $ (5,026) $ 1,088,758 Cost of sales 498,962 64,221 416,985 (5,026) 975,142 Gross profit $ 54,246 $ 27,425 $ 31,945 $ — $ 113,616 For fiscal year 2020, 2019 and 2018, inter-segment sales and cost of sales of $1.7 million, $1.8 million and $1.6 million between Fresh products and RFG were eliminated. For fiscal year 2020, 2019 and 2018, inter-segment sales and cost of sales of $4.0 million, $4.0 million and $3.5 million between Calavo Foods and RFG were eliminated. The following table sets forth sales by product category, by segment (in thousands): Year Ended October 31, 2020 Year Ended October 31, 2019 Fresh Calavo Fresh Calavo products Foods RFG Total products Foods RFG Total Avocados $ 521,542 $ — $ — $ 521,542 $ 569,779 $ — $ — $ 569,779 Tomatoes 53,922 — — 53,922 40,879 — — 40,879 Papayas 10,529 — — 10,529 10,931 — — 10,931 Other fresh income 327 — — 327 1,353 — — 1,353 Prepared avocado products — 79,382 — 79,382 — 100,842 — 100,842 Salsa — 2,783 — 2,783 — 3,252 — 3,252 Fresh-cut fruit & veg. and prepared foods — — 406,572 406,572 — — 488,373 488,373 Total gross sales 586,320 82,165 406,572 1,075,057 622,942 104,094 488,373 1,215,409 Less sales incentives (1,268) (6,945) (1,849) (10,062) (1,759) (9,360) (2,310) (13,429) Less inter-company eliminations (1,651) (3,973) — (5,624) (2,246) (3,957) — (6,203) Net sales $ 583,401 $ 71,247 $ 404,723 $ 1,059,371 $ 618,937 $ 90,777 $ 486,063 $ 1,195,777 Year Ended October 31, 2019 Year Ended October 31, 2018 Fresh Calavo Fresh Calavo products Foods RFG Total products Foods RFG Total Avocados $ 569,779 $ — $ — $ 569,779 $ 511,730 $ — $ — $ 511,730 Tomatoes 40,879 — — 40,879 31,608 — — 31,608 Papayas 10,931 — — 10,931 11,699 — — 11,699 Other fresh income 1,353 — — 1,353 498 — — 498 Prepared avocado products — 100,842 — 100,842 — 99,635 — 99,635 Salsa — 3,252 — 3,252 — 3,423 — 3,423 Fresh-cut fruit & veg. and prepared foods — — 488,373 488,373 — — 451,203 451,203 Total gross sales 622,942 104,094 488,373 1,215,409 555,535 103,058 451,203 1,109,796 Less sales incentives (1,759) (9,360) (2,310) (13,429) (2,327) (11,412) (2,273) (16,012) Less inter-company eliminations (2,246) (3,957) — (6,203) (1,554) (3,472) — (5,026) Net sales $ 618,937 $ 90,777 $ 486,063 $ 1,195,777 $ 551,654 $ 88,174 $ 448,930 $ 1,088,758 Sales to customers outside the U.S. were approximately $29.7 million, $42.5 million and $41.8. million for fiscal years 2020, 2019, and 2018. RFG segment sales included sales to one customer who represented more than 10% of total consolidated revenues for fiscal 2020, 2019 and 2018. Additionally, the Fresh products segment had sales to Our goodwill balance of $28.4 million is attributed by segment to Fresh products for $3.9 million and RFG for $24.5 million as of October 31, 2020. Our goodwill balance of $18.3 million is attributed by segment to Fresh products for $3.9 million and RFG for $14.3 million as of October 31, 2019 and 2018. Long-lived assets attributed to geographic areas as of October 31, are as follows (in thousands): United States Mexico Consolidated 2020 $ 95,110 $ 35,160 $ 130,270 2019 $ 98,224 $ 33,874 $ 132,098 |
Long-Term Obligations
Long-Term Obligations | 12 Months Ended |
Oct. 31, 2020 | |
Long-Term Obligations | |
Long-Term Obligations | 11. Long-Term Obligations Long-term obligations at fiscal year ends consist of the following (in thousands): 2020 2019 Finance leases 7,059 6,174 Less current portion (1,343) (762) $ 5,716 $ 5,412 In April 2019, we sold our Temecula, California packinghouse for one million. Since our leaseback of the building is classified as a capital lease and covers substantially all of the leased property, the gain recognized currently is the amount of the gain in excess of the recorded amount of the leased asset. As a result, we recognized a gain of approximately During our third quarter of fiscal year 2019, we entered into a 10-year building and equipment lease for fresh food facility in Conley, GA. This facility is primarily intended to process fresh-cut fruit & vegetables and prepared foods products for our RFG business segment. Annual rent for the building and equipment approximates $0.9 million and $0.6 million, respectively, over the life of the lease. The lease for the equipment is considered to be a capital lease, therefore, we calculated the present value of the minimum lease payments related to the equipment and capitalized $2.8 million as a capital lease in property, plant and equipment and recorded $2.8 million as a lease obligation. See Note 17 for the adoption of the new lease accounting disclosure. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Oct. 31, 2020 | |
Stock-Based Compensation | |
Stock-Based Compensation | 12. Stock-Based Compensation The 2005 Stock Incentive Plan The 2005 Stock Incentive Plan, was a stock-based compensation plan, under which employees and directors could be granted options to purchase shares of our common stock. In June 2012, this plan was terminated without affecting the outstanding stock options related to this plan. Stock options were granted with exercise prices of not less than the fair market value at grant date, generally vested over one two after the grant date. We settle stock option exercises with newly issued shares of common stock. We measured compensation cost for all stock-based awards pursuant to this plan 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 measured the fair value of our stock based compensation awards on the date of grant. A summary of stock option activity 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 October 31, 2020 — $ — $ — Exercisable at October 31, 2020 — $ — $ — The total recognized and unrecognized stock-based compensation expense was insignificant for the year ended October 31, 2020 and 2019. The 2011 Management Incentive Plan 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 On August 10, 2020, as part of the employment agreement, Mark Lodge our newly appointed Chief Operating Officer was granted 4,568 restricted shares. The closing price of our stock on such date was $65.67 . 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 year ended October 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 $0.2 million for the year ended October 31, 2020. 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 year ended October 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 year ended October 31, 2020. In January of fiscal 2020 all 12 of our non-employee directors were granted 1,500 restricted shares each (total of 18,000 shares). In January of fiscal 2019 and 2018, all 12 of our non-employee directors were granted 1,750 restricted shares each (total of 21,000 shares). These shares have full voting rights and participate in dividends as if unrestricted. The closing price of our stock was $87.21, $71.56 and $85.90 for each respective year. After one year from the grant date, 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 were $1.6 million and $1.6 million for the year ended October 31, 2020 and 2019. On December 18, 2019, our executive officers were granted a total of 31,158 restricted shares. On December 14, 2018, our executive officers were granted a total of 14,522 restricted shares. On December 18, 2017, our executive officers were granted a total of 25,241 restricted shares. These shares have full voting rights and participate in dividends as if unrestricted. The closing price of our stock on such dates was $87.63, $85.67 and $75.45, respectively These shares vest in one-third increments, on an annual basis, beginning December 18, 2020, December 14, 2019 and December 18, 2018. These shares were granted pursuant to our 2011 Plan. The total recognized stock-based compensation expense for these grants were $1.4 million and $2.0 million for the year ended October 31, 2020 and 2019. 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 72 $ 81.19 Outstanding at October 31, 2020 76 $ 80.45 $ 5,107 The total recognized stock-based compensation expense for restricted stock was $4.5 million and $3.6 million for the years ended October 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 October 31, 2020 16 $ 44.21 $ 380 Exercisable at October 31, 2020 12 $ 45.59 $ 269 The weighted average remaining life of such outstanding options is 3.1 years. The weighted average remaining life of such exercisable options is 2.1 years. The fair value of vested shares as of October 31, 2020 and 2019, was $0.8 million and $0.7 million. |
Dividends
Dividends | 12 Months Ended |
Oct. 31, 2020 | |
Dividends | |
Dividends | 13. Dividends On October 26, 2020, the Company declared a $1.15 per share cash dividend to shareholders of record on November 13, 2020. On December 4, 2020, the Company paid this cash dividend which totaled $20.3 million. On December 6, 2019, the Company paid a $1.10 per share dividend in the aggregate amount of $19.4 million to shareholders of record on November 15, 2019. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Oct. 31, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | 14. 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 October 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 October 31, 2020: Investment in Limoneira Company (1) $ 23,197 - - $ 23,197 Total assets at fair value $ 23,197 - - $ 23,197 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 stock. We currently own less than 10 % of Limoneira’s outstanding common stock. These securities are measured at fair value by quoted market prices. Limoneira’s stock price at October 31, 2020 and October 31, 2019 equaled $13.83 per share and $18.92 per share (level 1). For the year ended October 31, 2019, we sold 51,271 shares of Limoneira stock and recorded a loss of $0.1 million in our consolidated statements of income. Our remaining shares of Limoneira stock, totaling 1,677,299, were revalued to $13.83 per share and $18.92 per share at October 31, 2020 and 2019 and, as a result, we recorded a loss of $8.5 million and $9.6 million for the year ended October 31, 2020 and 2019 in our consolidated statements of operations. For the year ended October 31, 2018, we recognized losses of Unrealized gains and losses are recognized through other comprehensive income. Unrealized investment holding gains arising during the year ended October 31, 2018, was $2.2 million. |
Mexican IVA taxes receivable
Mexican IVA taxes receivable | 12 Months Ended |
Oct. 31, 2020 | |
Mexican IVA taxes receivable | |
Mexican IVA taxes receivable | 15. 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 October 31, 2020, and October 31, 2019, CDM IVA receivables totaled $30.2 million (640.7 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, specifically during the years 2013 through 2016, amounting to $6.5 million (137.3 million Mexican pesos), which is included in the total IVA receivables amount mentioned above. 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 filed 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 have not refunded any of CDM’s refundable IVA balances since 2012, specifically denying our IVA refund requests filed 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 from our internationally recognized tax advisory firm, as of October 31, 2020, CDM has filed (or has plans to file) administrative appeals for the IVA related to all periods since 2013 through the present. A response to these administrative appeals is currently pending resolution. In light of the foregoing, the Company is currently considering its options for resolution of the VAT receivables. In the unlikely event of an unfavorable resolution of the administrative appeals, we plan to file nullification suits with the Mexican Tax Court. If the suits result in an unfavorable ruling, there is an option to appeal to the Collegiate Circuit Court. The estimated time for the resolution of these suits could be 2 – 3 years. This estimated time could be impacted by the situation of the COVID-19 pandemic. 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 | 12 Months Ended |
Oct. 31, 2020 | |
FreshRealm | |
FreshRealm | 16. FreshRealm Variable Interest Entity Based on the NMUPA and related Agreements, as described in Note 8, we reconsidered whether FreshRealm was a variable interest entity (VIE) as of October 31, 2020 and 2019. A VIE refers to a legal business structure in which an investor has a controlling interest in, 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 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 concluded that we were not the primary beneficiary of FreshRealm at October 31, 2020 and 2019, 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 20). Our investment in FreshRealm totaled $5.8 million at October 31, 2019. For the year ended October 31, 2020, 2019 and 2018, FreshRealm incurred losses totaling $24.1 million, $30.6 million and $29.4 million, of which we recorded $7.2 million, $14.1 million, and $12.0 million of non-cash losses during fiscal 2020, 2019 and 2018. 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 October 31, 2019 (after the change in tax status was effective) were recorded to reflect our proportionate share of FreshRealm losses. We recorded losses from December 16, 2018 through October 31, 2019 totaling $9.9 million. During our year ended October 31, 2020, we recorded losses of approximately $7.2 million, reflecting our proportionate share of FreshRealm losses. See Note 20 for more information on the reserve for collectability recorded on FreshRealm’s Note receivable and impairment charge recorded on the investment. As of October 31, 2020 and 2019, we have note receivables from FreshRealm totaling $34.5 million and $35.2 million. See Note 8 for further information. See Note 20 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. We believe that we are able to fulfill our responsibility to this arrangement without significant impact on our results of operations. Except for the performance guarantee noted above, our exposure to the obligations of FreshRealm is generally limited to our investment. See Note 8 and Note 20 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 Equity Method Investee 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 October 31, 2020, and as a result, the Company’s investment in FreshRealm was no longer considered a significant subsidiary. The following tables show summarized financial information for FreshRealm (in thousands) Balance Sheet: October 31, October 31, 2020 2019 Assets: Cash and cash equivalents $ 508 $ 961 Accounts receivable, net of allowances 716 1,493 Inventories, net 2,725 2,792 Prepaid expenses and other current assets 642 732 Property, plant, and equipment, net 3,368 6,076 Other assets 126 703 $ 8,085 $ 12,757 Liabilities and equity: Current liabilities $ 14,160 $ 6,533 Debt to Calavo 34,456 35,241 Long-term liabilities — — Equity (40,531) (29,017) $ 8,085 $ 12,757 Statement of Operations: Year ended October 31, 2020 2019 2018 Net sales $ 19,232 $ 24,112 $ 33,769 Gross loss (3,022) (5,783) (10,868) Selling, general and administrative (14,188) (20,196) (19,512) Other (6,850) (4,621) 1,023 Net loss $ (24,060) $ (30,600) $ (29,357) |
Leases
Leases | 12 Months Ended |
Oct. 31, 2020 | |
Leases | |
Leases | 17. Leases The impact of applying ASC 842 effective as of November 1, 2019, to the Company’s 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 October 31, 2020 (in thousands): October 31, 2020 Assets Non-current assets: Operating lease assets Operating lease right-of-use assets $ 60,262 Finance lease assets Property, plant and equipment, net 6,830 $ 67,092 Liabilities Current liabilities: Operating Current portion of operating leases $ 6,443 Finance Current portion of long-term debt and finance leases 1,343 Long-term obligations Operating Long-term operating leases, less current portion 58,273 Finance Long-term debt and finance leases, less current portion 5,716 $ 71,775 Weighted-average remaining lease term: Operating leases 10.0 years Finance leases 7.9 years Weighted-average discount rate: Operating leases 2.83 % Finance leases 3.28 % Lease Costs The following table presents certain information related to the lease costs for finance and operating leases for the year ended October 31, 2020 (in thousands): Year ended October 31, 2020 Amortization of financing lease assets $ 1,043 Operating lease cost 8,271 Short-term lease cost 996 Variable lease cost 2,865 Interest on financing lease liabilities 235 Total lease cost $ 13,410 Other Information The following table presents supplemental cash flow information related to the leases for the year ended October 31, 2020 (in thousands): Year ended Cash paid for amounts included in the measurement of lease liabilities October 31, 2020 Operating cash flows for operating leases $ 7,689 Financing cash flows for finance leases 1,115 Operating cash flows for finance leases 235 The total right-of-use assets obtained in exchange for new operating leases for the year ended October 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 October 31, 2020 (in thousands): Operating Finance Leases Leases 2021 $ 8,171 $ 1,551 2022 7,986 1,416 2023 7,922 1,301 2024 7,572 765 2025 6,748 371 Thereafter 36,478 2,788 Total lease payments 74,877 8,192 Less: imputed interest 10,161 1,133 Total lease liability $ 64,716 $ 7,059 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 year ended Octobr 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 | 12 Months Ended |
Oct. 31, 2020 | |
Acquisition of Simply Fresh Fruit | |
Acquisition of Simply Fresh Fruit | 18. 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 Current assets (including cash of $623) $ 3,954 Property, plant, and equipment 2,260 Operating lease right-of-use assets 110 Goodwill 10,306 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 assets acquired $ 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 year ended October 31, 2020. Adjustments after the initial close of the acquisition of SFFI are primarily related to the application of ASC 842 (See Note 17 for further detail on accounting for leases). Upon further review 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 $0.5 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. |
COVID-19 Pandemic Impact
COVID-19 Pandemic Impact | 12 Months Ended |
Oct. 31, 2020 | |
COVID-19 Pandemic Impact | |
COVID-19 Pandemic Impact | 19. 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 and our Mexico partners in consignment tomato 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 since April and minimal disruption to our overall business thus far, the continuing impact of the pandemic on our future consolidated results of operations, financial position and cash flows are uncertain. |
Reserve for FreshRealm Note Rec
Reserve for FreshRealm Note Receivable and Impairment of Investment | 12 Months Ended |
Oct. 31, 2020 | |
Reserve for FreshRealm Note Receivable and Impairment of Investment | |
Reserve for FreshRealm Note Receivable and Impairment of Investment | 20. 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 from three months prior, 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 $0.3 million in trade accounts receivable as of October 31, 2020, which resulted in a loss of $37.3 million, which is included in the accompanying consolidated statement of operations under “Loss on reserve for FreshRealm note receivable and impairment of investment”. As of August 1, 2020, we have discontinued the accrual of interest income on the note receivables. In connection with the foregoing, we recorded a $9.5 million discreet income tax benefit for the third quarter of fiscal 2020. |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Oct. 31, 2020 | |
Valuation and Qualifying Accounts | |
Schedule II Valuation and Qualifying Accounts | SCHEDULE II CALAVO GROWERS, INC. VALUATION AND QUALIFYING ACCOUNTS (in thousands) Fiscal year Balance at Balance at ended beginning end October 31: of year Additions(1) Deductions(2) of year Allowance for customer deductions 2018 1,038 9,079 8,267 1,850 2019 1,850 12,211 12,107 1,954 2020 1,954 8,490 8,552 1,892 Allowance for doubtful accounts 2018 1,452 — 75 1,377 2019 1,377 35 — 1,412 2020 1,412 194 — 1,606 (1) Charged to net sales (customer deductions) or costs and expenses (doubtful accounts). (2) Customer deductions taken or write off of accounts receivables. The above table does not include the reserve for notes receivable from FreshRealm of $34.2 million. See Note 20. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Oct. 31, 2020 | |
Basis of Presentation and Significant Accounting Policies | |
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, Renaissance Food Group (RFG) and Calavo Foods. |
Consolidated financial statements | Our consolidated financial statements include the accounts of Calavo Growers, Inc. and our wholly owned subsidiaries, Calavo de Mexico S.A. de C.V. (Calavo de Mexico), Calavo Growers de Mexico, S. de R.L. de C.V. ( Calavo Growers de Mexico), Maui Fresh International, Inc. (Maui), Hawaiian Sweet, Inc. (HS), Hawaiian Pride, LLC (HP), Calavo Salsa Lisa, LLC (CSL), Avocados de Jalisco, S.A.P.I. de C.V. (Avocados de Jalisco), in which we have an 83 percent ownership interest, and RFG. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Among the significant estimates affecting the financial statements are those related to valuation allowances for valuation allowances for accounts and notes receivable, goodwill, grower advances, inventories, long-lived assets, valuation of and estimated useful lives of identifiable intangible assets, stock-based compensation, promotional allowances and income taxes. On an ongoing basis, management reviews its estimates based upon currently available information. Actual results could differ materially from those estimates. |
Reclassification of Prior Year Presentation | Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current year presentation. Specifically, intangible assets are now presented as a separate line item on the accompanying consolidated balance sheet, and were previously included within other assets. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid financial instruments purchased with an original maturity date of three months or less to be cash equivalents. The carrying amounts of cash and cash equivalents approximate their fair values. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist primarily of non-trade receivables, infrastructure advances and prepaid expenses. Non-trade receivables were $5.7 million and $5.3 million at October 31, 2020 and 2019. Included in non-trade receivables are $1.5 million and $1.9 million related to the current portion of non-CDM Mexican IVA (i.e. value-added) taxes at October 31, 2020 and 2019 (See Note 15). Infrastructure advances are discussed below. Prepaid expenses totaling $4.2 million and $3.4 million at October 31, 2020 and 2019, are primarily for insurance, rent and other items. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is computed on a monthly weighted-average basis, which approximates the first-in, first-out method; market is based upon estimated replacement costs. Costs included in inventory primarily include the following: fruit, picking and hauling, overhead, labor, materials and freight. |
Property, Plant, and Equipment | Property, Plant, and Equipment Property, plant, and equipment are stated at cost and depreciated over their estimated useful lives using the straight-line method. Leasehold improvements are stated at cost and amortized over the lesser of their estimated useful lives or the term of the lease, using the straight-line method. Useful lives are as follows: buildings and improvements - 7 to 50 years ; leasehold improvements - the lesser of the term of the lease or 7 years ; equipment - 7 to 25 years ; information systems hardware and software – 3 to 10 years . Significant repairs and maintenance that increase the value or extend the useful life of our fixed asset are capitalized. On-going maintenance and repairs are charged to expense. |
Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets Goodwill, defined as unidentified asset(s) acquired in conjunction with a business acquisition, is tested for impairment on an annual basis and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Goodwill is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment. We can use a qualitative test, known as "Step 0," or a two-step quantitative method to determine whether impairment has occurred. In Step 0, we elect to perform an optional qualitative analysis and based on the results skip the two step analysis. In fiscal 2020, 2019 and 2018, we elected to implement Step 0 and were not required to conduct the remaining two step analysis. Goodwill impairment testing requires significant judgment and management estimates, including, but not limited to, the determination of (i) the number of reporting units, (ii) the goodwill and other assets and liabilities to be allocated to the reporting units and (iii) the fair values of the reporting units. The estimates and assumptions described above, along with other factors such as discount rates, will significantly affect the outcome of the impairment tests and the amounts of any resulting impairment losses. The results of our Step 0 assessments indicated that it was more likely than not that the fair value of our reporting unit exceeded its carrying value and therefore we concluded that there were no impairments for the years ended October 31, 2020, 2019 and 2018. |
Long-lived Assets | Long-lived Assets Long-lived assets, including fixed assets and intangible assets (other than goodwill), are continually monitored and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. The determination of recoverability is based on an estimate of undiscounted cash flows expected to result from the use of an asset and its eventual disposition. The estimate of undiscounted cash flows is based upon, among other things, certain assumptions about future operating performance, growth rates and other factors. Estimates of undiscounted cash flows may differ from actual cash flows due to, among other things, technological changes, economic conditions, changes to the business model or changes in operating performance. If the sum of the undiscounted cash flows (excluding interest) is less than the carrying value, an impairment loss will be recognized, measured as the amount by which the carrying value exceeds the fair value of the asset. For fiscal years 2020 and 2019, we performed our annual assessment of long-lived assets and determined that no impairment existed as of October 31, 2020 and 2019. |
Investments | Investments We account for non-marketable investments using the equity method of accounting if the investment gives us the ability to exercise significant influence over, but not control, an investee. Significant influence generally exists when we have an ownership interest representing between 20% and 50% of the voting stock of the investee. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and our proportionate share of earnings or losses and distributions. In December 2014, Calavo formed a wholly owned subsidiary Calavo Growers De Mexico, S. de R.L. de C.V. (Calavo Sub). In July 2015, Calavo Sub entered into a Shareholder Agreement with Grupo Belo del Pacifico, S.A. de C.V., (Belo) a Mexican Company owned by Agricola Belher, and Agricola Don Memo, S.A. de C.V. (Don Memo). Don Memo, a Mexican corporation formed in July 2013, is engaged in the business of owning and improving land in Jalisco, Mexico for the growing of tomatoes and other produce and the sale and distribution of tomatoes and other produce. Belo and Calavo Sub have an equal one-half ownership interest in Don Memo. Pursuant to a management service agreement, Belo, through its officers and employees, shall have day-to-day power and authority to manage the operations. In fiscal 2018, we contributed $0.1 million as investments in Don Memo. This investment contribution represent Calavo Sub’s 50 % ownership in Don Memo, which is included in investment in unconsolidated entities on our balance sheet. We use the equity method to account for this investment. As of October 31, 2020 and 2019, we have an investment of $6.1 million and $4.9 million in Don Memo. 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. 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. We record the amount of our investment in FreshRealm in “Investment in unconsolidated entities” on our Consolidated Balance Sheets and recognize losses in FreshRealm in “Income/ (loss) from unconsolidated entities” in our Consolidated Statement of Operations. See Note 16 and Note 20 for additional information. As of October 31, 2020, our ownership percentage in FreshRealm was approximately 37%. |
Marketable Securities | Marketable Securities Our marketable securities consist of our investment in Limoneira Company (Limoneira) stock. We currently own less than of Limoneira’s outstanding common stock. These securities are considered available for sale securities based on management’s intent with respect to such securities and are carried at fair value as determined from quoted market prices. On November 1, 2018 we adopted ASU 2016-01, Financial Instruments, Recognition and Measurement of Financial Assets and Liabilities |
Advances to Suppliers | Advances to Suppliers We advance funds to third-party growers primarily in Mexico for various farming needs. Typically, we obtain collateral (i.e. fruit, fixed assets, etc.) that approximates the value at risk, prior to making such advances. We continuously evaluate the ability of these growers to repay advances in order to evaluate the possible need to record an allowance. No such allowance was required at October 31, 2020 and 2019. Pursuant to our distribution agreement, which was amended in fiscal 2011, with Agricola Belher (Belher) of Mexico, a producer of fresh vegetables, primarily tomatoes, for export to the U.S. market, Belher agreed, at their sole cost and expense, to harvest, pack, export, ship, and deliver tomatoes exclusively to our company, primarily our Arizona facility. In exchange, we agreed to sell and distribute such tomatoes, make advances to Belher for operating purposes, provide additional advances as shipments are made during the season (subject to limitations, as defined), and return the proceeds from such tomato sales to Belher, net of our commission and aforementioned advances. These advances will be collected through settlements by the end of each year. For fiscal 2020 and 2019, we agreed to advance Similar to Belher, we make advances to Don Memo for operating purposes, provide additional advances as shipments are made during the season, and return the proceeds from such tomato sales to Don Memo, net of our commission and aforementioned advances. As of October 31, 2020 and 2019, we have total advances of $2.4 million and $3.7 million to Don Memo, which is recorded in advances to suppliers, offset by tomato liabilities from the sales of tomatoes per the tomato marketing agreement. |
Infrastructure Advances | Infrastructure Advances Pursuant to our infrastructure agreements, we make advances to be used solely for the acquisition, construction, and installation of improvements to and on certain land owned/controlled by Belher and Don Memo, as well as packing line equipment. In October 2020, we entered into an infrastructure loan agreement with Don Memo for $2.4 million secured by Don Memo’s property and equipment. This infrastructure loan will incur interest at . In October 2020, we paid million will be paid in January 2021. As of October 31, 2020, we have advanced a total of In August 2018, we entered into an amended infrastructure loan agreement with Belher and advanced $3.0 million. This amount shall be paid back in annual installments of . Loans prior to this amended agreement incur interest at Libor plus As of October 31, 2020, we have loaned a total of million included in other long-term assets). As of October 31, 2019, we have loaned a total of million included in other long-term assets). Belher may prepay, without penalty, all or any portion of the loans at any time. In order to secure their obligations pursuant to both agreements discussed above, Belher granted us a first-priority security interest in certain assets, including cash, inventory and fixed assets, as defined. |
Accrued Expenses | Accrued Expenses Included in accrued expenses are liabilities related to the receipt of goods and/or services for which an invoice has not yet been received. These totaled approximately $26.4 million and $18.7 million for the year ended October 31, 2020 and 2019. |
Revenue Recognition | 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 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 consolidated balance sheets as part of accrued expenses. Principal vs. Agent Considerations We frequently enter 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 evaluate 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 such revenues are reported on a gross basis. Practical Expedients The Company elected the following practical expedients upon its adoption of Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers ● Shipping and handling costs - The company elected to account for shipping and handling activities that occur before the customer has obtained control of a good as fulfillment activities rather than as a promised service. ● Measurement of transaction price - The Company has elected to exclude from the measurement of transaction price all taxes assessed by a governmental authority that are both imposed on, and concurrent with, a specific revenue-producing transaction and collected by the Company from a customer for sales taxes. ● Contract costs - The Company has elected to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period is one year or less. The adoption of ASC 606 did not have an impact on our consolidated results of operations. |
Customers | Customers We sell to retail grocery, foodservice, club stores, mass merchandisers, food distributors and wholesale customers. Our top of our consolidated net sales in fiscal years 2020, 2019 and 2018. Sales to our largest customer, Kroger (including its affiliates), represented approximately 2018. Additionally, Wal-Mart (including its affiliates) represented approximately of net sales in fiscal years 2020, 2019 and 2018. |
Shipping and Handling | Shipping and Handling We include shipping and handling fees billed to customers in net revenues. Amounts incurred by us for freight are included in cost of goods sold. |
Promotional Allowances | Promotional Allowances We provide for promotional allowances at the time of sale, based on our historical experience. Our estimates are generally based on evaluating the historical relationship between promotional allowances and gross sales. The derived percentage is then applied to the current period’s sales revenues in order to arrive at the appropriate debit to sales allowances for the period. The offsetting credit is made to accrued expenses. When certain amounts of specific customer accounts are subsequently identified as promotional, they are written off against this allowance. Actual amounts may differ from these estimates and such differences are recognized as an adjustment to net sales in the period they are identified. |
Allowance for Accounts Receivable | Allowance for Accounts Receivable We provide an allowance of $3.5 million and $3.4 million for estimated uncollectible accounts receivable balances based on historical experience and the aging of the related accounts receivable as of October 31, 2020 and 2019. |
Loss on Reserve for FreshRealm Note Receivable and Impairment of Investment | Loss on Reserve for FreshRealm Note Receivable and Impairment of Investment At the beginning of fiscal year 2020, we had a note receivable from FreshRealm totaling $35.2 million which have been fully reserved during fiscal 2020. See Note 16 and Note 20 for further information . During the third quarter of fiscal 2020, the results of operations of FreshRealm deteriorated significantly from our expectations three months prior, 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. |
Consignment Arrangements | Consignment Arrangements We frequently enter 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. Although we generally do not take legal title to these avocados and perishable products, we do assume responsibilities (principally assuming credit risk, inventory loss and delivery risk, and pricing risk) that are consistent with acting as a principal in the transaction. Accordingly, the accompanying financial statements include sales and cost of sales from the sale of avocados and perishable products procured under consignment arrangements. Amounts recorded for each of the fiscal years ended October 31, 2020, 2019 and 2018 in the financial statements pursuant to consignment arrangements are as follows (in thousands): 2020 2019 2018 Sales $ 64,922 $ 64,510 $ 43,490 Cost of Sales 57,554 57,061 38,186 Gross Profit $ 7,368 $ 7,449 $ 5,304 |
Advertising Expense | Advertising Expense Advertising costs are expensed when incurred and are generally included as a component of selling, general and administrative expense. Such costs were approximately $0.4 million, $0.3 million and $0.2 million for fiscal years 2020, 2019, and 2018. |
Research and Development | Research and Development million. Total research and development costs for fiscal years 2019 and 2018 were less than $0.1 million. |
Other Income | Other Income Included in other income is dividend income totaling $0.6 million for fiscal year 2020. Dividend income totaled $0.6 million and $0.6 million for fiscal years 2019 and 2018. See Note 8 for related party disclosure related to other income. |
Income Taxes | Income Taxes We account for deferred tax liabilities and assets for the future consequences of events that have been recognized in our consolidated financial statements or tax returns. Measurement of the deferred items is based on enacted tax laws. In the event the future consequences of differences between financial reporting bases and tax bases of our assets and liabilities result in a deferred tax asset, we perform an evaluation of the probability of being able to realize the future benefits indicated by such asset. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion or all of the deferred tax asset will not be realized. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. As a multinational corporation, we are subject to taxation in many jurisdictions, and the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. If we ultimately determine that the payment of these liabilities will be unnecessary, the liability will be reversed and we will recognize a tax benefit during the period in which it is determined the liability no longer applies. Conversely, we record additional tax charges in a period in which it is determined that a recorded tax liability is less than the ultimate assessment is expected to be. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability for U.S. or foreign taxes may be materially different from management’s estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities. |
Basic and Diluted Net Income per Share | Basic and Diluted Net Income (loss) per Share Basic earnings per share is calculated using the weighted-average number of common shares outstanding during the period without consideration of the dilutive effect of stock options and contingent consideration. Diluted earnings per common share is calculated using the weighted-average number of common shares outstanding during the period after consideration of the dilutive effect of stock options and the effect of contingent consideration shares. Basic and diluted net income per share is calculated as follows (U.S. dollars in thousands, except per share data): Year ended October 31, 2020 2019 2018 Numerator: Net income (loss) attributable to Calavo Growers, Inc. $ (13,625) $ 36,646 $ 32,281 Denominator: Weighted average shares – Basic 17,564 17,519 17,477 Effect of dilutive securities – Restricted stock/options — 74 91 Weighted average shares – Diluted 17,564 17,593 17,568 Net income (loss) per share attributable to Calavo Growers, Inc: Basic $ (0.78) $ 2.09 $ 1.85 Diluted $ (0.78) $ 2.08 $ 1.84 |
Stock-Based Compensation | Stock-Based Compensation We account for awards of equity instruments issued to employees under the fair value method of accounting and recognize such amounts in our statements of operations. 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. For the years ended October 31, 2020, 2019 and 2018, we recognized compensation expense of $4.5 million, $3.6 million, and $4.6 million related to stock-based compensation (See Note 12). The value of the stock-based compensation was determined from quoted market prices at the date of the grant. |
Foreign Currency Translation and Remeasurement | Foreign Currency Translation and Remeasurement Our foreign operations are subject to exchange rate fluctuations and foreign currency transaction costs. The functional currency of our foreign subsidiaries is the United States 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 are included in income. Gains and losses resulting from foreign currency transactions are also recognized currently in income. Total foreign currency translation losses for fiscal 2020, 2019 and 2018, net of gains, were $1.0 million, $0.3 million, and $0.8 million. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We believe that the carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and short-term borrowings approximates fair value based on either their short-term nature or on terms currently available to the Company in financial markets. Due to current market rates, we believe that our fixed-rate long-term obligations and finance leases have nearly the same fair value and carrying value of approximately $7.1 million and $6.2 million as of October 31, 2020 and 2019. |
Deferred Rent | Deferred Rent As part of certain lease agreements, we receive construction allowances from our landlords. The construction allowances are deferred and amortized on a straight-line basis over the life of the lease as a reduction to rent expense. At the beginning of fiscal 2020, we have adopted the new lease accounting standard and as a result deferred rent is no longer recorded. See Note 17 for further information. |
Derivative Financial Instruments | Derivative Financial Instruments We were not a party to any material derivative instruments during the fiscal year. It is currently our intent not to use derivative instruments for speculative or trading purposes. Additionally, we do not use any hedging or forward contracts to offset market volatility. |
Recently Adopted Accounting Pronouncements | 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 |
Comprehensive Income | Comprehensive Income Comprehensive income is defined as all changes in a company's net assets, except changes resulting from transactions with shareholders. For the fiscal year ended October 31, 2018, other comprehensive income includes the unrealized gain on our Limoneira investment totaling $1.7 million, net of income taxes. Limoneira’s stock price at October 31, 2018 equaled $24.65 per share. On November 1, 2018 we adopted a new accounting standard, which requires equity investments (except those accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in net income. With the adoption of this new standard, we reclassed unrealized gains of |
Noncontrolling Interest | Noncontrolling Interest The following tables reconcile shareholders’ equity attributable to noncontrolling interest related to Avocados de Jalisco (in thousands). Year ended Year ended Avocados de Jalisco noncontrolling interest October 31, 2020 October 31, 2019 Noncontrolling interest, beginning $ 1,688 $ 1,748 Net loss attributable to noncontrolling interest of Avocados de Jalisco (216) (60) Noncontrolling interest, ending $ 1,472 $ 1,688 |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended |
Oct. 31, 2020 | |
Basis of Presentation and Significant Accounting Policies | |
Financial Statements of Consignment Arrangements | 2020 2019 2018 Sales $ 64,922 $ 64,510 $ 43,490 Cost of Sales 57,554 57,061 38,186 Gross Profit $ 7,368 $ 7,449 $ 5,304 |
Schedule of basic and diluted net income per share | Basic and diluted net income per share is calculated as follows (U.S. dollars in thousands, except per share data): Year ended October 31, 2020 2019 2018 Numerator: Net income (loss) attributable to Calavo Growers, Inc. $ (13,625) $ 36,646 $ 32,281 Denominator: Weighted average shares – Basic 17,564 17,519 17,477 Effect of dilutive securities – Restricted stock/options — 74 91 Weighted average shares – Diluted 17,564 17,593 17,568 Net income (loss) per share attributable to Calavo Growers, Inc: Basic $ (0.78) $ 2.09 $ 1.85 Diluted $ (0.78) $ 2.08 $ 1.84 |
Reconciliation of shareholders' equity attributable to noncontrolling interest | The following tables reconcile shareholders’ equity attributable to noncontrolling interest related to Avocados de Jalisco (in thousands). Year ended Year ended Avocados de Jalisco noncontrolling interest October 31, 2020 October 31, 2019 Noncontrolling interest, beginning $ 1,688 $ 1,748 Net loss attributable to noncontrolling interest of Avocados de Jalisco (216) (60) Noncontrolling interest, ending $ 1,472 $ 1,688 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Oct. 31, 2020 | |
Inventories | |
Schedule of Inventories | Inventories consist of the following (in thousands): October 31, October 31, 2020 2019 Fresh fruit $ 14,677 $ 15,874 Packing supplies and ingredients 12,540 11,370 Finished prepared foods 14,570 9,645 $ 41,787 $ 36,889 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 12 Months Ended |
Oct. 31, 2020 | |
Property, Plant, and Equipment | |
Summary of Property, Plant, and Equipment | Property, plant, and equipment consist of the following (in thousands): October 31, 2020 2019 Land $ 11,008 $ 11,008 Buildings and improvements 44,984 45,614 Leasehold improvements 33,047 26,267 Equipment 108,505 99,237 Information systems - hardware and software 11,385 10,822 Construction in progress 5,244 10,351 214,173 203,299 Less accumulated depreciation and amortization (83,903) (71,201) $ 130,270 $ 132,098 |
Other Assets and Intangibles (T
Other Assets and Intangibles (Tables) | 12 Months Ended |
Oct. 31, 2020 | |
Other Assets and Intangibles | |
Schedule of Other Assets | Other assets consist of the following (in thousands): October 31, October 31, 2020 2019 Mexican IVA (i.e. value-added) taxes receivable (see note 15) $ 30,126 $ 27,592 Infrastructure loan to Agricola Belher and Agricola Don Memo 1,215 1,800 Other 1,217 1,514 $ 32,558 $ 30,906 |
Schedule of Intangible Assets | The intangible assets consist of the following (in thousands): October 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 $ (8,613) $ 8,727 $ 7,640 $ (7,640) $ — Trade names 11 years 4,060 (2,852) 1,208 2,760 (2,760) — Trade secrets/recipes 9 years 630 (517) 113 630 (470) 160 Brand name intangibles indefinite 275 — 275 275 — 275 Intangibles, net $ 22,305 $ (11,982) $ 10,323 $ 11,305 $ (10,870) $ 435 |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Oct. 31, 2020 | |
Related party transactions | |
Schedule of related party transactions | Year ended October 31, (in thousands) 2020 2019 Rent paid to LIG $ — $ 579 Rent paid to THNC, LLC $ — $ 795 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Oct. 31, 2020 | |
Income Taxes | |
Summary of Income Tax Provision | The income tax provision (benefit) consists of the following for the years ended October 31, (in thousands): 2020 2019 2018 Current: Federal $ (5,684) $ 9,146 $ 7,115 State (214) 2,516 1,582 Foreign 645 290 (844) Total current (5,253) 11,952 7,853 Deferred: Federal 575 516 3,328 State (505) 209 690 Foreign 260 205 848 Total deferred 330 930 4,866 Change in valuation allowance 631 — — Total income tax provision (benefit) $ (4,292) $ 12,882 $ 12,719 |
Significant Components of Deferred Taxes Assets (Liabilities) | Significant components of our deferred taxes assets (liabilities) as of October 31, are as follows (in thousands): 2020 2019 Property, plant, and equipment (11,552) (10,407) Intangible assets 6,861 11,805 Unrealized gain, Limoneira investment (116) (2,352) Investment in FreshRealm 1,096 (1,513) Stock-based compensation 812 857 State taxes (592) (437) Credits and incentives 1,345 1,109 Allowance for accounts receivable 1,165 834 Inventories 864 445 Accrued liabilities 2,119 3,423 Operating lease - Right of use assets (15,732) — Operating lease liabilities 16,895 — Net operating loss 369 — Valuation allowance (631) — Other (417) (317) Long-term deferred income taxes $ 2,486 $ 3,447 As of October 31, 2020, the Company has gross federal net operating losses of $8 million that are expected to be carried back to one of the five preceding tax years and do not expire, and gross state net operating loss carryforwards of approximately $7.2 million with carryforward periods primarily ranging from 20 years to indefinite. The Company records a valuation allowance against deferred tax assets when determined that all or a portion of the deferred tax assets are not more likely than not to be realized based on all available evidence. As of October 31, 2020, the Company recorded an approximate $0.6 million valuation allowance against the deferred tax assets for state tax credit carryforwards that are more likely than not to expire unutilized between 2022 and 2028. |
Reconciliation of Significant Differences Between Federal Statutory Income Tax Rate and Effective Income Tax Rate | As of October 31, 2020, the Company has gross federal net operating losses of $8 million that are expected to be carried back to one of the five preceding tax years and do not expire, and gross state net operating loss carryforwards of approximately $7.2 million with carryforward periods primarily ranging from 20 years to indefinite. The Company records a valuation allowance against deferred tax assets when determined that all or a portion of the deferred tax assets are not more likely than not to be realized based on all available evidence. As of October 31, 2020, the Company recorded an approximate $0.6 million valuation allowance against the deferred tax assets for state tax credit carryforwards that are more likely than not to expire unutilized between 2022 and 2028. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Oct. 31, 2020 | |
Segment Information | |
Schedule of segment gross margin | The following table sets forth sales by product category, by segment (in thousands) Fresh Calavo Interco. products Foods RFG Elimins. Total (All amounts are presented in thousands) Year ended October 31, 2020 Net sales $ 585,052 $ 75,220 $ 404,723 $ (5,624) $ 1,059,371 Cost of sales 537,489 54,277 383,331 (5,624) 969,473 Gross profit $ 47,563 $ 20,943 $ 21,392 $ — $ 89,898 Year ended October 31, 2019 Net sales $ 621,183 $ 94,734 $ 486,063 $ (6,203) $ 1,195,777 Cost of sales 534,600 73,735 465,563 (6,203) 1,067,695 Gross profit $ 86,583 $ 20,999 $ 20,500 $ — $ 128,082 Year ended October 31, 2018 Net sales $ 553,208 $ 91,646 $ 448,930 $ (5,026) $ 1,088,758 Cost of sales 498,962 64,221 416,985 (5,026) 975,142 Gross profit $ 54,246 $ 27,425 $ 31,945 $ — $ 113,616 |
Schedule of sales by product and segment | The following table sets forth sales by product category, by segment (in thousands): Year Ended October 31, 2020 Year Ended October 31, 2019 Fresh Calavo Fresh Calavo products Foods RFG Total products Foods RFG Total Avocados $ 521,542 $ — $ — $ 521,542 $ 569,779 $ — $ — $ 569,779 Tomatoes 53,922 — — 53,922 40,879 — — 40,879 Papayas 10,529 — — 10,529 10,931 — — 10,931 Other fresh income 327 — — 327 1,353 — — 1,353 Prepared avocado products — 79,382 — 79,382 — 100,842 — 100,842 Salsa — 2,783 — 2,783 — 3,252 — 3,252 Fresh-cut fruit & veg. and prepared foods — — 406,572 406,572 — — 488,373 488,373 Total gross sales 586,320 82,165 406,572 1,075,057 622,942 104,094 488,373 1,215,409 Less sales incentives (1,268) (6,945) (1,849) (10,062) (1,759) (9,360) (2,310) (13,429) Less inter-company eliminations (1,651) (3,973) — (5,624) (2,246) (3,957) — (6,203) Net sales $ 583,401 $ 71,247 $ 404,723 $ 1,059,371 $ 618,937 $ 90,777 $ 486,063 $ 1,195,777 Year Ended October 31, 2019 Year Ended October 31, 2018 Fresh Calavo Fresh Calavo products Foods RFG Total products Foods RFG Total Avocados $ 569,779 $ — $ — $ 569,779 $ 511,730 $ — $ — $ 511,730 Tomatoes 40,879 — — 40,879 31,608 — — 31,608 Papayas 10,931 — — 10,931 11,699 — — 11,699 Other fresh income 1,353 — — 1,353 498 — — 498 Prepared avocado products — 100,842 — 100,842 — 99,635 — 99,635 Salsa — 3,252 — 3,252 — 3,423 — 3,423 Fresh-cut fruit & veg. and prepared foods — — 488,373 488,373 — — 451,203 451,203 Total gross sales 622,942 104,094 488,373 1,215,409 555,535 103,058 451,203 1,109,796 Less sales incentives (1,759) (9,360) (2,310) (13,429) (2,327) (11,412) (2,273) (16,012) Less inter-company eliminations (2,246) (3,957) — (6,203) (1,554) (3,472) — (5,026) Net sales $ 618,937 $ 90,777 $ 486,063 $ 1,195,777 $ 551,654 $ 88,174 $ 448,930 $ 1,088,758 |
Schedule of long-lived assets by geographic areas | Long-lived assets attributed to geographic areas as of October 31, are as follows (in thousands): United States Mexico Consolidated 2020 $ 95,110 $ 35,160 $ 130,270 2019 $ 98,224 $ 33,874 $ 132,098 |
Long-Term Obligations (Tables)
Long-Term Obligations (Tables) | 12 Months Ended |
Oct. 31, 2020 | |
Long-Term Obligations | |
Schedule of long-term obligations | Long-term obligations at fiscal year ends consist of the following (in thousands): 2020 2019 Finance leases 7,059 6,174 Less current portion (1,343) (762) $ 5,716 $ 5,412 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Oct. 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 72 $ 81.19 Outstanding at October 31, 2020 76 $ 80.45 $ 5,107 |
2005 Stock Incentive Plan [Member] | |
Stock Option Activity, Related to Incentive Plan | A summary of stock option activity 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 October 31, 2020 — $ — $ — Exercisable at October 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 October 31, 2020 16 $ 44.21 $ 380 Exercisable at October 31, 2020 12 $ 45.59 $ 269 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Oct. 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 October 31, 2020: Investment in Limoneira Company (1) $ 23,197 - - $ 23,197 Total assets at fair value $ 23,197 - - $ 23,197 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 stock. We currently own less than 10 % of Limoneira’s outstanding common stock. These securities are measured at fair value by quoted market prices. Limoneira’s stock price at October 31, 2020 and October 31, 2019 equaled $13.83 per share and $18.92 per share (level 1). For the year ended October 31, 2019, we sold 51,271 shares of Limoneira stock and recorded a loss of $0.1 million in our consolidated statements of income. Our remaining shares of Limoneira stock, totaling 1,677,299, were revalued to $13.83 per share and $18.92 per share at October 31, 2020 and 2019 and, as a result, we recorded a loss of $8.5 million and $9.6 million for the year ended October 31, 2020 and 2019 in our consolidated statements of operations. For the year ended October 31, 2018, we recognized losses of Unrealized gains and losses are recognized through other comprehensive income. Unrealized investment holding gains arising during the year ended October 31, 2018, was $2.2 million. |
FreshRealm (Tables)
FreshRealm (Tables) | 12 Months Ended |
Oct. 31, 2020 | |
FreshRealm | |
Summarized financial information for FreshRealm | Balance Sheet: October 31, October 31, 2020 2019 Assets: Cash and cash equivalents $ 508 $ 961 Accounts receivable, net of allowances 716 1,493 Inventories, net 2,725 2,792 Prepaid expenses and other current assets 642 732 Property, plant, and equipment, net 3,368 6,076 Other assets 126 703 $ 8,085 $ 12,757 Liabilities and equity: Current liabilities $ 14,160 $ 6,533 Debt to Calavo 34,456 35,241 Long-term liabilities — — Equity (40,531) (29,017) $ 8,085 $ 12,757 Statement of Operations: Year ended October 31, 2020 2019 2018 Net sales $ 19,232 $ 24,112 $ 33,769 Gross loss (3,022) (5,783) (10,868) Selling, general and administrative (14,188) (20,196) (19,512) Other (6,850) (4,621) 1,023 Net loss $ (24,060) $ (30,600) $ (29,357) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Oct. 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 October 31, 2020 (in thousands): October 31, 2020 Assets Non-current assets: Operating lease assets Operating lease right-of-use assets $ 60,262 Finance lease assets Property, plant and equipment, net 6,830 $ 67,092 Liabilities Current liabilities: Operating Current portion of operating leases $ 6,443 Finance Current portion of long-term debt and finance leases 1,343 Long-term obligations Operating Long-term operating leases, less current portion 58,273 Finance Long-term debt and finance leases, less current portion 5,716 $ 71,775 Weighted-average remaining lease term: Operating leases 10.0 years Finance leases 7.9 years Weighted-average discount rate: Operating leases 2.83 % Finance leases 3.28 % Lease Costs The following table presents certain information related to the lease costs for finance and operating leases for the year ended October 31, 2020 (in thousands): Year ended October 31, 2020 Amortization of financing lease assets $ 1,043 Operating lease cost 8,271 Short-term lease cost 996 Variable lease cost 2,865 Interest on financing lease liabilities 235 Total lease cost $ 13,410 Other Information The following table presents supplemental cash flow information related to the leases for the year ended October 31, 2020 (in thousands): Year ended Cash paid for amounts included in the measurement of lease liabilities October 31, 2020 Operating cash flows for operating leases $ 7,689 Financing cash flows for finance leases 1,115 Operating cash flows for finance leases 235 |
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 October 31, 2020 (in thousands): Operating Finance Leases Leases 2021 $ 8,171 $ 1,551 2022 7,986 1,416 2023 7,922 1,301 2024 7,572 765 2025 6,748 371 Thereafter 36,478 2,788 Total lease payments 74,877 8,192 Less: imputed interest 10,161 1,133 Total lease liability $ 64,716 $ 7,059 |
Schedule of undiscounted cash flows of finance lease | Operating Finance Leases Leases 2021 $ 8,171 $ 1,551 2022 7,986 1,416 2023 7,922 1,301 2024 7,572 765 2025 6,748 371 Thereafter 36,478 2,788 Total lease payments 74,877 8,192 Less: imputed interest 10,161 1,133 Total lease liability $ 64,716 $ 7,059 |
Minimum Cash Payments Under Non-Cancelable Operating Leases | 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 |
Schedule of Capital Lease Payments | 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 |
Acquisition of Simply Fresh F_2
Acquisition of Simply Fresh Fruit (Tables) | 12 Months Ended |
Oct. 31, 2020 | |
Acquisition of Simply Fresh Fruit | |
Schedule of net assets acquired | Current assets (including cash of $623) $ 3,954 Property, plant, and equipment 2,260 Operating lease right-of-use assets 110 Goodwill 10,306 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 assets acquired $ 19,019 |
Description of the business (De
Description of the business (Details) | 12 Months Ended |
Oct. 31, 2020segment | |
Description of the business | |
Number of reportable segments | 3 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Presentation (Details) | Oct. 31, 2020 |
Avocados de Jalisco | Avocados de Jalisco | |
Significant Accounting Policies [Line Items] | |
Subsidiary ownership (as a percent) | 83.00% |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions | Oct. 31, 2020 | Oct. 31, 2019 |
Basis of Presentation and Significant Accounting Policies | ||
Non-trade receivables | $ 5.7 | $ 5.3 |
Mexican IVA | 1.5 | 1.9 |
Prepaid expenses | $ 4.2 | $ 3.4 |
Basis of Presentation and Sig_6
Basis of Presentation and Significant Accounting Policies - Property, Plant, and Equipment (Details) | 12 Months Ended |
Oct. 31, 2020 | |
Minimum | Buildings and improvements | |
Significant Accounting Policies [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
Minimum | Leasehold improvements [Member] | |
Significant Accounting Policies [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
Minimum | Equipment | |
Significant Accounting Policies [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
Minimum | Information systems - hardware and software [Member] | |
Significant Accounting Policies [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Maximum | Buildings and improvements | |
Significant Accounting Policies [Line Items] | |
Property, Plant and Equipment, Useful Life | 50 years |
Maximum | Equipment | |
Significant Accounting Policies [Line Items] | |
Property, Plant and Equipment, Useful Life | 25 years |
Maximum | Information systems - hardware and software [Member] | |
Significant Accounting Policies [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Basis of Presentation and Sig_7
Basis of Presentation and Significant Accounting Policies - Goodwill and Acquired Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Basis of Presentation and Significant Accounting Policies | |||
Goodwill impairment loss | $ 0 | $ 0 | $ 0 |
Impairment of long-lived assets | $ 0 | $ 0 |
Basis of Presentation and Sig_8
Basis of Presentation and Significant Accounting Policies - Investments (Details) $ in Thousands, $ in Millions | May 15, 2020USD ($) | Apr. 01, 2020USD ($) | Feb. 03, 2020 | Sep. 30, 2018USD ($) | Jul. 31, 2015USD ($) | Jul. 31, 2020USD ($) | Oct. 31, 2020MXN ($) | Oct. 31, 2018USD ($) | Oct. 31, 2020USD ($) | Oct. 31, 2019USD ($) |
Significant Accounting Policies [Line Items] | ||||||||||
Investments in unconsolidated entities | $ 6,065 | $ 10,722 | ||||||||
Don Memo | Belo | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Ownership interest | 50.00% | |||||||||
FreshRealm | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Payment to acquire unconsolidated entities | $ 500 | |||||||||
Impair investment in FreshRealm | $ 2,800 | $ 2.8 | ||||||||
Investments in unconsolidated entities | 5,800 | |||||||||
Subscription agreements issued to third-party investors | $ 4,000 | $ 4,000 | ||||||||
VIE ownership (as a percent) | 37.00% | 37.00% | 37.00% | |||||||
Don Memo | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Ownership interest | 50.00% | 50.00% | ||||||||
Payment to acquire unconsolidated entities | $ 100 | $ 2,000 | $ 100 | |||||||
Investments in unconsolidated entities | $ 4,900 | $ 6,100 | $ 4,900 |
Basis of Presentation and Sig_9
Basis of Presentation and Significant Accounting Policies - Marketable Securities (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Significant Accounting Policies [Line Items] | |||
Unrealized and realized net loss on Limoneira shares | $ (8,537) | $ (9,722) | |
Limoneira | |||
Significant Accounting Policies [Line Items] | |||
Limoneira's stock price | $ 13.83 | $ 18.92 | $ 24.65 |
Limoneira | |||
Significant Accounting Policies [Line Items] | |||
Number of securities sold | 51,271 | ||
Loss on sale of investments | $ 100 | ||
Investment shares held (in shares) | 1,677,299 | ||
Unrealized and realized net loss on Limoneira shares | $ (8,500) | $ (9,600) | |
Limoneira | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Non-equity method investment ownership (as a percent) | 10.00% |
Basis of Presentation and Si_10
Basis of Presentation and Significant Accounting Policies - Advances to Suppliers (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Significant Accounting Policies [Line Items] | |||
Allowance To Advance Given To Supplier | $ 0 | $ 0 | |
Increase (decrease) in advances to suppliers | (3,077) | 983 | $ 1,009 |
Advances to suppliers | 5,061 | 7,338 | |
Don Memo | |||
Significant Accounting Policies [Line Items] | |||
Advances to suppliers | 2,400 | 3,700 | 2,400 |
Agricola Belher | |||
Significant Accounting Policies [Line Items] | |||
Increase (decrease) in advances to suppliers | 4,500 | 4,500 | |
Advances to suppliers | $ 4,500 | $ 4,500 | $ 4,000 |
Basis of Presentation and Si_11
Basis of Presentation and Significant Accounting Policies - Infrastructure Advances (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Oct. 31, 2020 | Aug. 31, 2020 | Aug. 31, 2018 | Oct. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | |
Significant Accounting Policies [Line Items] | ||||||
Amount loaned | $ 23,800 | $ 11,500 | ||||
Infrastructure loan noncurrent | $ 1,215 | 1,800 | ||||
Agricola Belher | ||||||
Significant Accounting Policies [Line Items] | ||||||
Loan receivable fixed interest rate (as a percent) | 7.25% | |||||
Amount loaned | $ 3,000 | |||||
Infrastructure advance | 1,800 | 3,000 | 2,600 | $ 3,400 | ||
Annual repayment of advances | $ 900 | $ 600 | ||||
Repayment term | 2 years | |||||
Agricola Belher | Prepaid expenses and other current assets | ||||||
Significant Accounting Policies [Line Items] | ||||||
Infrastructure advance, current | 900 | 800 | ||||
Agricola Belher | Other long-term assets | ||||||
Significant Accounting Policies [Line Items] | ||||||
Infrastructure loan noncurrent | 900 | $ 1,800 | ||||
Agricola Belher | LIBOR | ||||||
Significant Accounting Policies [Line Items] | ||||||
Advances variable interest rate (as a percent) | 10.00% | 3.00% | ||||
Don Memo | ||||||
Significant Accounting Policies [Line Items] | ||||||
Payment amount | $ 2,400 | |||||
Loan receivable fixed interest rate (as a percent) | 7.25% | |||||
Amount loaned | $ 700 | |||||
Remaining amount | 1,700 | |||||
Infrastructure advance | 700 | |||||
Don Memo | Prepaid expenses and other current assets | ||||||
Significant Accounting Policies [Line Items] | ||||||
Infrastructure advance, current | 400 | |||||
Don Memo | Other long-term assets | ||||||
Significant Accounting Policies [Line Items] | ||||||
Infrastructure loan noncurrent | $ 300 |
Basis of Presentation and Si_12
Basis of Presentation and Significant Accounting Policies - Accrued Expenses (Details) - USD ($) $ in Millions | Oct. 31, 2020 | Oct. 31, 2019 |
Basis of Presentation and Significant Accounting Policies | ||
Accrued liabilities related to goods and services | $ 26.4 | $ 18.7 |
Basis of Presentation and Si_13
Basis of Presentation and Significant Accounting Policies - Revenue and Receivables (Details) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2020USD ($)customer | Oct. 31, 2019USD ($) | Oct. 31, 2018 | |
Significant Accounting Policies [Line Items] | |||
Revenue, Practical Expedient, Initial Application and Transition, Completed Contract, Use of Transaction Price at Contract Completion Date [true false] | true | ||
Revenue, Practical Expedient, Incremental Cost of Obtaining Contract [true false] | true | ||
Number of Customers Accounted for More Than 10% | customer | 0 | ||
Allowances of accounts receivable | $ 3,498 | $ 3,366 | |
Notes receivable from FreshRealm | 35,241 | ||
FreshRealm | |||
Significant Accounting Policies [Line Items] | |||
Notes receivable from FreshRealm | $ 34,500 | $ 35,200 | |
Customer concentration [Member] | Sales revenue [Member] | |||
Significant Accounting Policies [Line Items] | |||
Number of Customers | customer | 10 | ||
Concentration risk (as a percent) | 56.00% | 59.00% | 59.00% |
Kroger [Member] | Customer concentration [Member] | Sales revenue [Member] | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk (as a percent) | 18.00% | 21.00% | 20.00% |
Walmart [Member] | Customer concentration [Member] | Sales revenue [Member] | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk (as a percent) | 12.00% | 13.00% | 10.00% |
Basis of Presentation and Si_14
Basis of Presentation and Significant Accounting Policies - Consignments Arrangements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Sales | $ 1,059,371 | $ 1,195,777 | $ 1,088,758 |
Cost of sales | 969,473 | 1,067,695 | 975,142 |
Gross profit | 89,898 | 128,082 | 113,616 |
Consignment Arrangements [Member] | |||
Sales | 64,922 | 64,510 | 43,490 |
Cost of sales | 57,554 | 57,061 | 38,186 |
Gross profit | $ 7,368 | $ 7,449 | $ 5,304 |
Basis of Presentation and Si_15
Basis of Presentation and Significant Accounting Policies - Advertising Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Basis of Presentation and Significant Accounting Policies | |||
Advertising costs | $ 0.4 | $ 0.3 | $ 0.2 |
Basis of Presentation and Si_16
Basis of Presentation and Significant Accounting Policies - Research and Development and Other Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Significant Accounting Policies [Line Items] | |||
Research and development costs | $ 0.7 | ||
Investment Income, Dividend | $ 0.6 | $ 0.6 | $ 0.6 |
Maximum | |||
Significant Accounting Policies [Line Items] | |||
Research and development costs | $ 0.1 | $ 0.1 |
Basis of Presentation and Si_17
Basis of Presentation and Significant Accounting Policies - Income per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Basis of Presentation and Significant Accounting Policies | |||
Net income (loss) attributable to Calavo Growers, Inc. | $ (13,625) | $ 36,646 | $ 32,281 |
Weighted average shares - Basic | 17,564 | 17,519 | 17,477 |
Effect of dilutive securities - Restricted stock/options | 74 | 91 | |
Weighted average shares - Diluted | 17,564 | 17,593 | 17,568 |
Basic | $ (0.78) | $ 2.09 | $ 1.85 |
Diluted | $ (0.78) | $ 2.08 | $ 1.84 |
Basis of Presentation and Si_18
Basis of Presentation and Significant Accounting Policies - Stock-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Basis of Presentation and Significant Accounting Policies | |||
Stock-based compensation expense | $ 4,500 | $ 3,600 | $ 4,600 |
Basis of Presentation and Si_19
Basis of Presentation and Significant Accounting Policies - Foreign Currency Translation and Remeasurement (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Basis of Presentation and Significant Accounting Policies | |||
Foreign currency gains (losses) | $ 1 | $ 0.3 | $ 0.8 |
Fixed rate long term obligation fair value | $ 7.1 | $ 6.2 |
Basis of Presentation and Si_20
Basis of Presentation and Significant Accounting Policies - Comprehensive Income (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | Nov. 01, 2018 | |
Significant Accounting Policies [Line Items] | ||||
Unrealized Gain (Loss) on Investments | $ 2,247 | |||
Retained earnings | $ 89,512 | $ 122,557 | ||
Unrealized and realized net loss on Limoneira shares | $ (8,537) | $ (9,722) | ||
Limoneira | ||||
Significant Accounting Policies [Line Items] | ||||
Limoneira's stock price | $ 13.83 | $ 18.92 | $ 24.65 | |
Limoneira | ||||
Significant Accounting Policies [Line Items] | ||||
Unrealized Gain (Loss) on Investments | $ 1,700 | |||
Number of securities sold | 51,271 | |||
Loss on sale of investments | $ 100 | |||
Investment shares held (in shares) | 1,677,299 | |||
Unrealized and realized net loss on Limoneira shares | $ (8,500) | $ (9,600) | ||
Limoneira | Cumulative effect adjustment | ||||
Significant Accounting Policies [Line Items] | ||||
Retained earnings | $ 12,100 |
Basis of Presentation and Si_21
Basis of Presentation and Significant Accounting Policies - Noncontrolling Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Noncontrolling Interest [Line Items] | |||
Noncontrolling interest, beginning | $ 1,688 | ||
Less: Net loss attributable to noncontrolling interest | 216 | $ 60 | $ 269 |
Noncontrolling interest, ending | 1,472 | 1,688 | |
Avocados de Jalisco | |||
Noncontrolling Interest [Line Items] | |||
Noncontrolling interest, beginning | 1,688 | 1,748 | |
Less: Net loss attributable to noncontrolling interest | (216) | (60) | |
Noncontrolling interest, ending | $ 1,472 | $ 1,688 | $ 1,748 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Oct. 31, 2019 |
Inventories | ||
Fresh fruit | $ 14,677 | $ 15,874 |
Packing supplies and ingredients | 12,540 | 11,370 |
Finished prepared foods | 14,570 | 9,645 |
Total inventories | $ 41,787 | $ 36,889 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment - Summary (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Property, Plant and Equipment | |||
Property plant and equipment, Gross | $ 214,173 | $ 203,299 | |
Less accumulated depreciation and amortization | (83,903) | (71,201) | |
Total property, plant, and equipment, net | 130,270 | 132,098 | |
Depreciation expense | 13,900 | 13,000 | $ 11,900 |
Amortization of financing lease assets | 1,043 | ||
Land [Member] | |||
Property, Plant and Equipment | |||
Property plant and equipment, Gross | 11,008 | 11,008 | |
Buildings and improvements | |||
Property, Plant and Equipment | |||
Property plant and equipment, Gross | 44,984 | 45,614 | |
Leasehold improvements [Member] | |||
Property, Plant and Equipment | |||
Property plant and equipment, Gross | 33,047 | 26,267 | |
Equipment | |||
Property, Plant and Equipment | |||
Property plant and equipment, Gross | 108,505 | 99,237 | |
Information systems - hardware and software [Member] | |||
Property, Plant and Equipment | |||
Property plant and equipment, Gross | 11,385 | 10,822 | |
Construction in progress [Member] | |||
Property, Plant and Equipment | |||
Property plant and equipment, Gross | $ 5,244 | $ 10,351 |
Other Assets and Intangibles -
Other Assets and Intangibles - Other Assets (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Oct. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Mexican IVA (i.e. value-added) taxes receivable | $ 30,126 | $ 27,592 |
Infrastructure loan to Agricola Belher and Agricola Don Memo | 1,215 | 1,800 |
Other | 1,217 | 1,514 |
Other assets | $ 32,558 | $ 30,906 |
Other Assets and Intangibles _2
Other Assets and Intangibles - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 31, 2020 | Oct. 31, 2019 | |
Finite-Lived Intangible Assets | ||
Accum. Amortization | $ (11,982) | $ (10,870) |
Intangibles, net | 10,323 | 435 |
Finite and indefinite lived intangible assets gross | 22,305 | 11,305 |
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 | (8,613) | (7,640) |
Net Book Value | $ 8,727 | |
Trade names [Member] | ||
Finite-Lived Intangible Assets | ||
Weighted-Average Useful Life | 11 years | |
Gross Carrying Value | $ 4,060 | 2,760 |
Accum. Amortization | (2,852) | (2,760) |
Net Book Value | 1,208 | |
Trade secrets/recipes [Member] | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Value | 630 | 630 |
Accum. Amortization | (517) | (470) |
Net Book Value | $ 113 | $ 160 |
Other Assets and Intangibles _3
Other Assets and Intangibles - Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 1.1 | $ 0.7 | $ 1.1 |
Amortization expense for 2021 | 1.6 | ||
Amortization expense for 2022 | 1.6 | ||
Amortization expense for 2023 | 1.5 | ||
Amortization expense for 2024 | 1.5 | ||
Amortization expense thereafter | $ 4.1 |
Revolving Credit Facilities (De
Revolving Credit Facilities (Details) - Revolving Credit Facility - USD ($) $ in Millions | 1 Months Ended | ||
Jun. 30, 2016 | Oct. 31, 2020 | Oct. 31, 2019 | |
Debt Instrument [Line Items] | |||
Credit agreement term | 5 years | ||
Credit available under borrowing agreement | $ 80 | ||
Average interest rate | 1.90% | 3.80% | |
Line of credit facility outstanding | $ 20.6 | $ 0 | |
Line of credit facility, unused capacity, commitment fee percentage | 0.15% | ||
Additional borrowing capacity | $ 50 | ||
Minimum | |||
Debt Instrument [Line Items] | |||
Quarterly consolidated leverage ratio | 1.15% | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Quarterly consolidated leverage ratio | 2.50% | ||
LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Applicable margin (as a percent) | 1.00% | ||
LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Applicable margin (as a percent) | 1.50% | ||
Base Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Applicable margin (as a percent) | 0.00% | ||
Base Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Applicable margin (as a percent) | 0.50% |
Commitments and Contingencies -
Commitments and Contingencies - New Leases (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Apr. 30, 2019 |
Long-term Purchase Commitment [Line Items] | ||||
Finance lease asset | $ 6,830 | |||
Finance lease liability | 7,059 | $ 6,174 | ||
Finance lease liability, current | 1,343 | $ 762 | ||
Lease obligations relating to property, plant and equipment | $ 8,192 | |||
Temecula, California Packinghouse | ||||
Long-term Purchase Commitment [Line Items] | ||||
Portion retained by the entity (as a percent) | 33.00% | |||
Finance lease asset | $ 3,200 | |||
Finance lease liability | 3,200 | |||
Finance lease liability, current | 100 | |||
Temecula, California Packinghouse | Disposal, by Sale | ||||
Long-term Purchase Commitment [Line Items] | ||||
Consideration for sale | $ 7,100 | |||
Conley, GA | ||||
Long-term Purchase Commitment [Line Items] | ||||
Finance lease asset | $ 2,800 | |||
Finance lease liability | $ 2,800 | |||
Finance lease term | 10 years | |||
Conley, GA | Buildings and improvements | ||||
Long-term Purchase Commitment [Line Items] | ||||
Finance lease liability, current | $ 900 | |||
Conley, GA | Equipment | ||||
Long-term Purchase Commitment [Line Items] | ||||
Finance lease liability, current | $ 600 |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) $ in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2019MXN ($) | Jul. 31, 2018MXN ($) | Oct. 31, 2020USD ($) | |
Indemnification Agreement | |||
Commitments And Contingencies [Line Items] | |||
Accrued liabilities | $ 0 | ||
Mexican Tax Authority [Member] | Tax Assessment 2011 [Member] | |||
Commitments And Contingencies [Line Items] | |||
Tax assessment | $ 2,200 | 103.5 | |
Mexican Tax Authority [Member] | Tax Assessment 2013 [Member] | |||
Commitments And Contingencies [Line Items] | |||
Tax assessment | $ 2,600 | 122.4 | |
Employee's Profit Sharing Liability | $ 118 | $ 5.6 |
Related party transactions (Det
Related party transactions (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
Aug. 31, 2020 | Sep. 30, 2018 | Aug. 31, 2018 | Jan. 31, 2018 | Jul. 31, 2015 | Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Jan. 31, 2016 | |
Related Party Transaction [Line Items] | ||||||||||
Dividend income from Limoneira | $ 600 | $ 600 | $ 600 | |||||||
Investments in unconsolidated entities | 6,065 | 10,722 | ||||||||
Amount loaned | 23,800 | 11,500 | ||||||||
Infrastructure loan noncurrent | 1,215 | 1,800 | ||||||||
Advances to suppliers | 5,061 | 7,338 | ||||||||
Don Memo | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Debt amount | $ 4,500 | |||||||||
Limoneira | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Dividend income from Limoneira | 500 | 500 | 400 | |||||||
Rent paid | $ 300 | 300 | 300 | |||||||
Limoneira | Maximum | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Non-equity method investment ownership (as a percent) | 10.00% | |||||||||
Don Memo | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Purchases from related parties | $ 15,800 | 14,100 | 11,100 | |||||||
Due to Related Parties | 1,800 | 900 | 1,000 | |||||||
Investments in unconsolidated entities | $ 6,100 | 4,900 | 4,900 | |||||||
Ownership interest | 50.00% | 50.00% | ||||||||
Payment to acquire unconsolidated entities | $ 100 | $ 2,000 | 100 | |||||||
Payment amount | 200 | |||||||||
Amount loaned | $ 100 | |||||||||
Advances to suppliers | $ 2,400 | 3,700 | 2,400 | |||||||
Director | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Purchases from related parties | 18,000 | 11,900 | 11,200 | |||||||
TroyGould PC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Legal fees | 400 | 400 | 200 | |||||||
Agricola Belher | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Purchases from related parties | 26,900 | 19,500 | 14,100 | |||||||
Loan receivable fixed interest rate (as a percent) | 7.25% | |||||||||
Amount loaned | $ 3,000 | |||||||||
Infrastructure advance | 3,000 | 1,800 | 2,600 | 3,400 | ||||||
Advances to suppliers | 4,500 | 4,500 | 4,000 | |||||||
Annual repayment of advances | $ 900 | $ 600 | ||||||||
Repayment term | 2 years | |||||||||
Agricola Belher | LIBOR | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Advances variable interest rate (as a percent) | 10.00% | 3.00% | ||||||||
Agricola Belher | Prepaid expenses and other current assets | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Infrastructure advance, current | 900 | 800 | ||||||||
Agricola Belher | Other long-term assets | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Infrastructure loan noncurrent | 900 | 1,800 | ||||||||
Avocados de Jalisco | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Purchases from related parties | $ 8,300 | 2,500 | $ 1,800 | |||||||
Noncash transfer of noncontrolling interest | $ 1,000 | |||||||||
Avocados de Jalisco | Avocados de Jalisco | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Subsidiary ownership (as a percent) | 83.00% | |||||||||
LIG | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Rent paid | 579 | |||||||||
THNC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Rent paid | $ 795 |
Related party transactions - Fr
Related party transactions - FreshRealm (Details) $ in Thousands, $ in Millions | May 15, 2020USD ($) | Apr. 01, 2020USD ($)item | Feb. 03, 2020 | Jul. 31, 2018USD ($) | Oct. 31, 2020USD ($) | Apr. 30, 2020USD ($) | Oct. 31, 2019USD ($)director | Apr. 30, 2019USD ($)item | Jan. 31, 2018USD ($)director | Jul. 31, 2020USD ($) | Oct. 31, 2019USD ($) | Jul. 31, 2019USD ($) | Apr. 30, 2019USD ($) | Jan. 31, 2019USD ($) | Oct. 31, 2018USD ($) | Apr. 30, 2018USD ($)director | Oct. 31, 2020USD ($)directoritem | Oct. 31, 2020MXN ($)directoritem | Oct. 31, 2019USD ($) | Oct. 31, 2018USD ($) | Oct. 31, 2020MXN ($) | Mar. 31, 2020 | Nov. 25, 2019USD ($) |
Related party | |||||||||||||||||||||||
Investments in unconsolidated entities | $ 6,065 | $ 10,722 | $ 10,722 | $ 6,065 | $ 10,722 | ||||||||||||||||||
Amount loaned | 23,800 | $ 11,500 | |||||||||||||||||||||
Notes receivable from FreshRealm | 35,241 | 35,241 | 35,241 | ||||||||||||||||||||
Notes receivable from FreshRealm converted to investment in FreshRealm | 2,761 | ||||||||||||||||||||||
Accounts receivable | 63,668 | 63,423 | 63,423 | $ 63,668 | 63,423 | ||||||||||||||||||
Number of officers | item | 1 | 1 | |||||||||||||||||||||
Number of board of directors | director | 5 | 5 | |||||||||||||||||||||
Former Chairman and Chief Executive Officer | |||||||||||||||||||||||
Related party | |||||||||||||||||||||||
Payment to acquire unconsolidated entities | 500 | ||||||||||||||||||||||
FreshRealm | |||||||||||||||||||||||
Related party | |||||||||||||||||||||||
Investments in unconsolidated entities | 5,800 | 5,800 | 5,800 | ||||||||||||||||||||
Impair investment in FreshRealm | $ 2,800 | $ 2.8 | |||||||||||||||||||||
VIE ownership (as a percent) | 37.00% | 37.00% | 37.00% | 37.00% | |||||||||||||||||||
Amount loaned | 3,700 | $ 5,400 | $ 4,200 | ||||||||||||||||||||
Notes receivable from FreshRealm | 34,500 | 35,200 | 35,200 | $ 34,500 | 35,200 | ||||||||||||||||||
Note receivable, excluding accrued interest | 32,800 | 32,800 | |||||||||||||||||||||
Convertible note receivable | $ 2,700 | ||||||||||||||||||||||
Loan receivable fixed interest rate (as a percent) | 3.00% | 10.00% | 10.00% | ||||||||||||||||||||
Notes receivable from FreshRealm converted to investment in FreshRealm | $ 1,000 | ||||||||||||||||||||||
Subscription agreements issued by investment | $ 4,000 | 4,000 | |||||||||||||||||||||
Payment to acquire unconsolidated entities | $ 500 | ||||||||||||||||||||||
Number of extension option | item | 2 | ||||||||||||||||||||||
Extension period | 1 year | ||||||||||||||||||||||
Loan write-off | 34,200 | 34,200 | $ 34.2 | ||||||||||||||||||||
Interest receivable | 4,100 | $ 4.1 | |||||||||||||||||||||
Accounts receivable | 716 | 1,493 | 300 | $ 1,493 | 716 | 1,493 | $ 0.3 | ||||||||||||||||
Total impairment | 37,300 | 37.3 | |||||||||||||||||||||
Discreet tax benefit | $ (9,500) | $ (9.5) | |||||||||||||||||||||
Revenue from related parties | 400 | 200 | 300 | ||||||||||||||||||||
FreshRealm | Non Executive Directors | |||||||||||||||||||||||
Related party | |||||||||||||||||||||||
Payment to acquire unconsolidated entities | $ 100 | $ 200 | $ 400 | $ 1,800 | $ 1,200 | ||||||||||||||||||
Number of officers | item | 2 | ||||||||||||||||||||||
Number of board of directors | director | 1 | 1 | 2 | ||||||||||||||||||||
FreshRealm | RFG | |||||||||||||||||||||||
Related party | |||||||||||||||||||||||
Revenue from related parties | $ 300 | $ 2,000 | $ 9,900 | ||||||||||||||||||||
FreshRealm | NMUPA | |||||||||||||||||||||||
Related party | |||||||||||||||||||||||
Loan receivable commitment | $ 12,000 | ||||||||||||||||||||||
Amount loaned | $ 3,000 | $ 9,000 | |||||||||||||||||||||
FreshRealm | $7.5 million Note | |||||||||||||||||||||||
Related party | |||||||||||||||||||||||
Amount loaned | $ 7,500 | ||||||||||||||||||||||
Don Memo | |||||||||||||||||||||||
Related party | |||||||||||||||||||||||
Amount loaned | $ 700 | ||||||||||||||||||||||
Loan receivable fixed interest rate (as a percent) | 7.25% | 7.25% | 7.25% |
Income Taxes - Tax Provision (B
Income Taxes - Tax Provision (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | Mar. 27, 2020 | |
Income Taxes | ||||
CARES Act taxes receivable | $ 1,100 | |||
Current: | ||||
Federal | $ (5,684) | $ 9,146 | $ 7,115 | |
State | (214) | 2,516 | 1,582 | |
Foreign | 645 | 290 | (844) | |
Total current | (5,253) | 11,952 | 7,853 | |
Deferred: | ||||
Federal | 575 | 516 | 3,328 | |
State | (505) | 209 | 690 | |
Foreign | 260 | 205 | 848 | |
Total deferred | 330 | 930 | 4,866 | |
Change in valuation allowance | 631 | |||
Total income tax provision | $ (4,292) | $ 12,882 | $ 12,719 |
Income Taxes - Deferred Taxes A
Income Taxes - Deferred Taxes Assets (Liabilities) (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Oct. 31, 2019 |
Income Taxes | ||
Gross deferred tax assets | $ 31,500 | $ 18,500 |
Gross deferred tax liabilities | 28,400 | 15,000 |
Property, plant, and equipment | (11,552) | (10,407) |
Intangible assets | 6,861 | 11,805 |
Unrealized gain, Limoneira investment | (116) | (2,352) |
Investment in FreshRealm, deferred asset | 1,096 | |
Investment in FreshRealm, deferred liability | (1,513) | |
Stock-based compensation | 812 | 857 |
State taxes | (592) | (437) |
Credits and incentives | 1,345 | 1,109 |
Allowance for accounts receivable | 1,165 | 834 |
Inventories | 864 | 445 |
Accrued liabilities | 2,119 | 3,423 |
Operating lease - Right of use assets | (15,732) | |
Operating lease liabilities | 16,895 | |
Net operating loss | 369 | |
Valuation allowance | (631) | |
Other | (417) | (317) |
Long-term deferred income taxes | 2,486 | $ 3,447 |
net operating losses carryback | 8,000 | |
Operating loss carryforwards | $ 7,200 |
Income Taxes - Rate reconciliat
Income Taxes - Rate reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Oct. 31, 2020 | Oct. 31, 2019 | Dec. 31, 2018 | Oct. 31, 2018 | |
Income Taxes | ||||
Federal statutory tax rate | 21.00% | 21.00% | 23.30% | |
State taxes, net of federal effects | 4.40% | 3.70% | 3.60% | |
NOL carryback - CARES Act | 6.20% | |||
Foreign income taxes greater than U.S. | (2.30%) | 0.40% | 0.70% | |
Revaluation of deferred taxes | 4.50% | |||
Section 199 deduction | (1.90%) | |||
Provision to return | (2.50%) | 0.70% | (1.20%) | |
Transition Tax | 0.60% | |||
State rate change | (0.10%) | (0.20%) | 0.20% | |
Valuation allowance | (2.70%) | |||
Other | (0.30%) | 0.40% | (1.40%) | |
Effective Income Tax Rate, Total | 23.70% | 26.00% | 28.40% | |
Domestic operations income (loss) before taxes | $ (18.9) | $ 47.9 | $ 45.8 | |
Foreign operations income (loss) before taxes | $ 0.8 | 1.6 | $ (1.1) | |
Unrecognized tax benefits | $ 0.1 |
Segment Information - Gross Pro
Segment Information - Gross Profit (Detail) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2020USD ($)segment | Oct. 31, 2019USD ($) | Oct. 31, 2018USD ($) | |
Segment reporting information | |||
Number of reportable segments | segment | 3 | ||
Net sales | $ 1,059,371 | $ 1,195,777 | $ 1,088,758 |
Cost of sales | 969,473 | 1,067,695 | 975,142 |
Gross profit | 89,898 | 128,082 | 113,616 |
Elimination between Fresh products and RFG | |||
Segment reporting information | |||
Sales and Cost of Sales Eliminated | 1,700 | 1,800 | 1,600 |
Elimination between Calavo Foods and RFG | |||
Segment reporting information | |||
Sales and Cost of Sales Eliminated | 4,000 | 4,000 | 3,500 |
Operating segments | Fresh products | |||
Segment reporting information | |||
Net sales | 585,052 | 621,183 | 553,208 |
Cost of sales | 537,489 | 534,600 | 498,962 |
Gross profit | 47,563 | 86,583 | 54,246 |
Operating segments | Calavo Foods | |||
Segment reporting information | |||
Net sales | 75,220 | 94,734 | 91,646 |
Cost of sales | 54,277 | 73,735 | 64,221 |
Gross profit | 20,943 | 20,999 | 27,425 |
Operating segments | RFG | |||
Segment reporting information | |||
Net sales | 404,723 | 486,063 | 448,930 |
Cost of sales | 383,331 | 465,563 | 416,985 |
Gross profit | 21,392 | 20,500 | 31,945 |
Intercompany Eliminations | |||
Segment reporting information | |||
Net sales | (5,624) | (6,203) | (5,026) |
Cost of sales | $ (5,624) | $ (6,203) | $ (5,026) |
Segment Information - Sales by
Segment Information - Sales by Product (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Segment reporting information | |||
Total gross sales | $ 1,075,057 | $ 1,215,409 | $ 1,109,796 |
Less sales incentives | (10,062) | (13,429) | (16,012) |
Net sales | 1,059,371 | 1,195,777 | 1,088,758 |
Avocados [Member] | |||
Segment reporting information | |||
Total gross sales | 521,542 | 569,779 | 511,730 |
Tomatoes [Member] | |||
Segment reporting information | |||
Total gross sales | 53,922 | 40,879 | 31,608 |
Papayas [Member] | |||
Segment reporting information | |||
Total gross sales | 10,529 | 10,931 | 11,699 |
Other fresh products [Member] | |||
Segment reporting information | |||
Total gross sales | 327 | 1,353 | 498 |
Prepared avocado products [Member] | |||
Segment reporting information | |||
Total gross sales | 79,382 | 100,842 | 99,635 |
Salsa [Member] | |||
Segment reporting information | |||
Total gross sales | 2,783 | 3,252 | 3,423 |
Fresh-cut fruit & veg. and prepared foods [Member] | |||
Segment reporting information | |||
Total gross sales | 406,572 | 488,373 | 451,203 |
Fresh products | |||
Segment reporting information | |||
Total gross sales | 586,320 | 622,942 | 555,535 |
Less sales incentives | (1,268) | (1,759) | (2,327) |
Net sales | 583,401 | 618,937 | 551,654 |
Fresh products | Avocados [Member] | |||
Segment reporting information | |||
Total gross sales | 521,542 | 569,779 | 511,730 |
Fresh products | Tomatoes [Member] | |||
Segment reporting information | |||
Total gross sales | 53,922 | 40,879 | 31,608 |
Fresh products | Papayas [Member] | |||
Segment reporting information | |||
Total gross sales | 10,529 | 10,931 | 11,699 |
Fresh products | Other fresh products [Member] | |||
Segment reporting information | |||
Total gross sales | 327 | 1,353 | 498 |
Calavo Foods | |||
Segment reporting information | |||
Total gross sales | 82,165 | 104,094 | 103,058 |
Less sales incentives | (6,945) | (9,360) | (11,412) |
Net sales | 71,247 | 90,777 | 88,174 |
Calavo Foods | Prepared avocado products [Member] | |||
Segment reporting information | |||
Total gross sales | 79,382 | 100,842 | 99,635 |
Calavo Foods | Salsa [Member] | |||
Segment reporting information | |||
Total gross sales | 2,783 | 3,252 | 3,423 |
RFG | |||
Segment reporting information | |||
Total gross sales | 406,572 | 488,373 | 451,203 |
Less sales incentives | (1,849) | (2,310) | (2,273) |
Net sales | 404,723 | 486,063 | 448,930 |
RFG | Fresh-cut fruit & veg. and prepared foods [Member] | |||
Segment reporting information | |||
Total gross sales | 406,572 | 488,373 | 451,203 |
Intercompany Eliminations | |||
Segment reporting information | |||
Net sales | (5,624) | (6,203) | (5,026) |
Intercompany Eliminations | Fresh products | |||
Segment reporting information | |||
Net sales | (1,651) | (2,246) | (1,554) |
Intercompany Eliminations | Calavo Foods | |||
Segment reporting information | |||
Net sales | $ (3,973) | $ (3,957) | $ (3,472) |
Segment Information - Concentra
Segment Information - Concentrations (Details) $ in Thousands | 12 Months Ended | |||
Oct. 31, 2020USD ($)customer | Oct. 31, 2019USD ($)customer | Oct. 31, 2018USD ($)customer | Oct. 31, 2017customer | |
Segment reporting information | ||||
Goodwill | $ | $ 28,568 | $ 18,262 | $ 18,300 | |
Fresh products | ||||
Segment reporting information | ||||
Goodwill | $ | 3,900 | 3,900 | 3,900 | |
RFG | ||||
Segment reporting information | ||||
Goodwill | $ | $ 24,500 | $ 14,300 | $ 14,300 | |
Sales revenue [Member] | Customer concentration [Member] | ||||
Segment reporting information | ||||
Number of customers | customer | 10 | |||
Consolidated revenue (as a percent) | 56.00% | 59.00% | 59.00% | |
Sales revenue [Member] | Customer concentration [Member] | Fresh products | ||||
Segment reporting information | ||||
Number of customers | customer | 1 | 1 | 1 | |
Sales revenue [Member] | Customer concentration [Member] | RFG | ||||
Segment reporting information | ||||
Number of customers | customer | 1 | 1 | 1 | |
Minimum | Sales revenue [Member] | Customer concentration [Member] | Fresh products | ||||
Segment reporting information | ||||
Consolidated revenue (as a percent) | 10.00% | 10.00% | 10.00% | |
Minimum | Sales revenue [Member] | Customer concentration [Member] | RFG | ||||
Segment reporting information | ||||
Consolidated revenue (as a percent) | 10.00% | 10.00% | 10.00% |
Segment Information - Assets (D
Segment Information - Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Segment reporting information | |||
Net sales | $ 1,059,371 | $ 1,195,777 | $ 1,088,758 |
Long-lived assets | 130,270 | 132,098 | |
Outside United States [Member] | |||
Segment reporting information | |||
Net sales | 29,700 | 42,500 | $ 41,800 |
United States [Member] | |||
Segment reporting information | |||
Long-lived assets | 95,110 | 98,224 | |
Mexico [Member] | |||
Segment reporting information | |||
Long-lived assets | $ 35,160 | $ 33,874 |
Long-Term Obligations - Summary
Long-Term Obligations - Summary of Long-Term Obligations (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Oct. 31, 2019 |
Long-Term Obligations | ||
Capital leases | $ 7,059 | $ 6,174 |
Less current portion | (1,343) | (762) |
Capital leases, non-current | $ 5,716 | $ 5,412 |
Long-Term Obligations - Details
Long-Term Obligations - Details (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Apr. 30, 2019 | Apr. 30, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | |
Long-term Purchase Commitment [Line Items] | |||||
Recorded gain on sale of business | $ 216 | $ 2,077 | |||
Finance lease asset | 6,830 | ||||
Finance lease liability | 7,059 | 6,174 | |||
Finance lease liability, current | 1,343 | 762 | |||
Finance lease liability, non-current | $ 5,716 | $ 5,412 | |||
Temecula, California Packinghouse | |||||
Long-term Purchase Commitment [Line Items] | |||||
Portion retained by the entity (as a percent) | 33.00% | 33.00% | |||
Finance lease asset | $ 3,200 | $ 3,200 | |||
Finance lease liability | 3,200 | 3,200 | |||
Finance lease liability, current | 100 | 100 | |||
Finance lease liability, non-current | 3,100 | 3,100 | |||
Temecula, California Packinghouse | Disposal, by Sale | |||||
Long-term Purchase Commitment [Line Items] | |||||
Consideration for sale | 7,100 | 7,100 | |||
Total gain on sale of business | 6,400 | ||||
Recorded gain on sale of business | 1,900 | ||||
Deferred gain on sale of business | $ 4,500 | $ 4,500 | |||
Conley, GA | |||||
Long-term Purchase Commitment [Line Items] | |||||
Finance lease asset | $ 2,800 | ||||
Finance lease liability | $ 2,800 | ||||
Finance lease term | 10 years | ||||
Conley, GA | Buildings and improvements | |||||
Long-term Purchase Commitment [Line Items] | |||||
Finance lease liability, current | $ 900 | ||||
Conley, GA | Equipment | |||||
Long-term Purchase Commitment [Line Items] | |||||
Finance lease liability, current | $ 600 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Thousands | Aug. 10, 2020$ / sharesshares | Jun. 17, 2020$ / sharesshares | May 11, 2020$ / sharesshares | Apr. 22, 2020item$ / sharesshares | Dec. 18, 2019$ / sharesshares | Dec. 14, 2018$ / sharesshares | Dec. 18, 2017$ / sharesshares | Jan. 31, 2020director$ / sharesshares | Jan. 31, 2019director$ / sharesshares | Jan. 31, 2018director$ / sharesshares | Dec. 31, 2020USD ($)shares | Oct. 31, 2020USD ($)item$ / sharesshares | Oct. 31, 2019USD ($) | Oct. 31, 2018USD ($) | Apr. 30, 2011shares |
Share-based Compensation | |||||||||||||||
Number of officers | item | 1 | ||||||||||||||
Stock-based compensation expense | $ | $ 4,500 | $ 3,600 | $ 4,600 | ||||||||||||
Restricted Stock [Member] | |||||||||||||||
Share-based Compensation | |||||||||||||||
Stock-based compensation expense | $ | 4,500 | 3,600 | |||||||||||||
Restricted Stock [Member] | Chief Operating Officer [Member] | |||||||||||||||
Share-based Compensation | |||||||||||||||
Restricted shares granted | 4,568 | ||||||||||||||
Restricted stock closing price awarded (in dollars per share) | $ / shares | $ 65.67 | ||||||||||||||
Stock-based compensation expense | $ | $ 100 | ||||||||||||||
Annual incremental vesting percentage | 33.00% | ||||||||||||||
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 | ||||||||||||||
Stock-based compensation expense | $ | 100 | ||||||||||||||
Annual incremental vesting percentage | 33.00% | ||||||||||||||
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 | $ | 200 | ||||||||||||||
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 | $ | $ 1,100 | ||||||||||||||
Restricted Stock [Member] | Non-employee directors [Member] | |||||||||||||||
Share-based Compensation | |||||||||||||||
Restricted shares granted | 18,000 | 21,000 | 21,000 | ||||||||||||
Restricted stock closing price awarded (in dollars per share) | $ / shares | $ 87.21 | $ 71.56 | $ 85.90 | ||||||||||||
Vesting period | 1 year | 1 year | 1 year | ||||||||||||
Stock-based compensation expense | $ | 1,600 | 1,600 | |||||||||||||
Number of non-employee directors | director | 12 | 12 | 12 | ||||||||||||
Restricted shares granted per non-employee | 1,500 | 1,750 | 1,750 | ||||||||||||
Restricted Stock [Member] | Executive officers [Member] | |||||||||||||||
Share-based Compensation | |||||||||||||||
Restricted shares granted | 31,158 | 14,522 | 25,241 | ||||||||||||
Restricted stock closing price awarded (in dollars per share) | $ / shares | $ 87.63 | $ 85.67 | $ 75.45 | ||||||||||||
Stock-based compensation expense | $ | $ 1,400 | $ 2,000 | |||||||||||||
Annual incremental vesting percentage | 33.00% | 33.00% | 33.00% | ||||||||||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | Minimum | |||||||||||||||
Share-based Compensation | |||||||||||||||
Vesting period | 1 year | ||||||||||||||
Expiration period, after grant date | 2 years | ||||||||||||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | Maximum | |||||||||||||||
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 | ||||||||||||||
2011 Management Incentive Plan [Member] | Restricted Stock [Member] | |||||||||||||||
Share-based Compensation | |||||||||||||||
Restricted shares granted | 72 | ||||||||||||||
Restricted stock closing price awarded (in dollars per share) | $ / shares | $ 81.19 | ||||||||||||||
Forfeited, Number of Shares | 14 | ||||||||||||||
Vested, Number of Shares | 51 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity (Details) - 2011 Management Incentive Plan [Member] - Restricted Stock [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Oct. 31, 2020 | |
Share-based Compensation | ||
Outstanding, Number of Shares, Beginning Balance | 69 | |
Vested, Number of Shares | (51) | |
Forfeited, Number of Shares | (14) | |
Granted, Number of Shares | 72 | |
Outstanding, Number of Shares, Ending Balance | 76 | |
Outstanding, Weighted-Average Exercise Price, balance balance | $ 71.74 | |
Vested, Weighted-Average Grant Price | 70.48 | |
Forfeited, Weighted-Average Grant Price | $ 84.54 | |
Granted, Weighted-Average Grant Price | 81.19 | |
Outstanding, Weighted-Average Exercise Price, ending balance | $ 80.45 | |
Aggregate Intrinsic Value | $ 5,107 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Oct. 31, 2020 | Oct. 31, 2019 | |
2005 Stock Incentive Plan [Member] | ||
Share-based Compensation | ||
Outstanding, Number of Shares, Beginning Balance | 2 | |
Exercised, Number of Shares | (2) | |
Outstanding, Number of Shares, Ending Balance | 2 | |
Outstanding, Weighted-Average Exercise Price | $ 19.20 | |
Exercised, Weighted-Average Exercise Price | $ 19.20 | |
Outstanding, Weighted-Average Exercise Price, ending balance | $ 19.20 | |
Stock Options [Member] | 2011 Management Incentive Plan [Member] | ||
Share-based Compensation | ||
Outstanding, Number of Shares, Beginning Balance | 18 | |
Exercised, Number of Shares | (2) | |
Outstanding, Number of Shares, Ending Balance | 16 | 18 |
Exercisable, Number of Shares | 12 | |
Outstanding, Weighted-Average Exercise Price | $ 41.91 | |
Exercised, Weighted-Average Exercise Price | 23.48 | |
Outstanding, Weighted-Average Exercise Price, ending balance | 44.21 | $ 41.91 |
Exercisable, Weighted-Average Exercise Price | $ 45.59 | |
Outstanding, Aggregate Intrinsic Value | $ 380 | |
Exercisable, Aggregate Intrinsic Value | $ 269 | |
Outstanding stock options, weighted-average remaining contractual term | 3 years 1 month 6 days | |
Exercisable stock options, weighted-average remaining contractual term | 2 years 1 month 6 days | |
Estimated fair market value of options | $ 800 | $ 700 |
Dividends (Details)
Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 04, 2020 | Oct. 26, 2020 | Dec. 06, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 |
Dividends | ||||||
Dividend declared per share | $ 1.15 | $ 1.10 | $ 1.15 | $ 1.10 | $ 1 | |
Dividend amount paid to shareholders | $ 20,300 | $ 19,400 | $ 19,354 | $ 17,568 | $ 16,657 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Assets at Fair Value: | |||
Unrealized investment gain | $ 2,247 | ||
Limoneira | |||
Assets at Fair Value: | |||
Limoneira's stock price | $ 13.83 | $ 18.92 | $ 24.65 |
Limoneira | |||
Assets at Fair Value: | |||
Number of securities sold | 51,271 | ||
Loss on sale of investments | $ 100 | ||
Investment shares held (in shares) | 1,677,299 | ||
Unrealized gains (losses) recorded | $ (8,500) | (9,600) | $ 2,200 |
Unrealized investment gain | $ 1,700 | ||
Limoneira | Maximum | |||
Assets at Fair Value: | |||
Non-equity method investment ownership (as a percent) | 10.00% | ||
Fair Value, Measurements, Recurring | |||
Assets at Fair Value: | |||
Total assets at fair value | $ 23,197 | 31,734 | |
Fair Value, Measurements, Recurring | Limoneira | |||
Assets at Fair Value: | |||
Investment in Limoneira Company | 23,197 | 31,734 | |
Fair Value, Measurements, Recurring | Level 1 | |||
Assets at Fair Value: | |||
Total assets at fair value | 23,197 | 31,734 | |
Fair Value, Measurements, Recurring | Level 1 | Limoneira | |||
Assets at Fair Value: | |||
Investment in Limoneira Company | $ 23,197 | $ 31,734 |
Mexican IVA taxes receivable (D
Mexican IVA taxes receivable (Details) $ in Millions, $ in Millions | Oct. 31, 2020USD ($) | Oct. 31, 2020MXN ($) | Oct. 31, 2019USD ($) | Oct. 31, 2019MXN ($) | Oct. 31, 2016USD ($) | Oct. 31, 2016MXN ($) |
Mexican IVA taxes receivable | ||||||
IVA receivables balance | $ 30.2 | $ 640.7 | $ 27.6 | $ 529.6 | $ 6.5 | $ 137.3 |
FreshRealm (Details)
FreshRealm (Details) $ in Thousands, $ in Millions | Apr. 01, 2020 | Feb. 03, 2020 | Dec. 15, 2018USD ($) | Jul. 31, 2020USD ($) | Oct. 31, 2019USD ($) | Jul. 31, 2019USD ($) | Apr. 30, 2019USD ($) | Oct. 31, 2019USD ($) | Oct. 31, 2020USD ($) | Oct. 31, 2020MXN ($) | Oct. 31, 2019USD ($) | Oct. 31, 2018USD ($) |
Variable Interest Entity [Line Items] | ||||||||||||
Investments in unconsolidated entities | $ 10,722 | $ 10,722 | $ 6,065 | $ 10,722 | ||||||||
Net income (loss) | (13,841) | 36,586 | $ 32,012 | |||||||||
Income (loss) from unconsolidated entities | 7,200 | |||||||||||
Notes receivable from FreshRealm | 35,241 | 35,241 | 35,241 | |||||||||
Amount loaned | 23,800 | 11,500 | ||||||||||
FreshRealm | ||||||||||||
Variable Interest Entity [Line Items] | ||||||||||||
Investments in unconsolidated entities | 5,800 | 5,800 | 5,800 | |||||||||
Impair investment in FreshRealm | $ 2,800 | $ 2.8 | ||||||||||
Net income (loss) | (24,060) | (30,600) | (29,357) | |||||||||
Income (loss) from unconsolidated entities | $ (4,200) | (9,900) | $ (7,200) | (14,100) | $ (12,000) | |||||||
VIE ownership (as a percent) | 37.00% | 37.00% | 37.00% | 37.00% | ||||||||
Notes receivable from FreshRealm | 35,200 | $ 35,200 | $ 34,500 | $ 35,200 | ||||||||
Amount loaned | $ 3,700 | $ 5,400 | $ 4,200 |
FreshRealm - Balance Sheet (Det
FreshRealm - Balance Sheet (Details) $ in Thousands, $ in Millions | Oct. 31, 2020USD ($) | Oct. 31, 2020MXN ($) | Jul. 31, 2020USD ($) | Oct. 31, 2019USD ($) |
Assets | ||||
Cash and cash equivalents | $ 4,055 | $ 7,973 | ||
Accounts receivable | 63,668 | 63,423 | ||
Inventories, net | 41,787 | 36,889 | ||
Prepaid expenses and other current assets | 10,733 | 9,027 | ||
Property, plant, and equipment, net | 130,270 | 132,098 | ||
Other assets | 32,558 | 30,906 | ||
Total assets | 429,624 | 390,360 | ||
Liabilities and shareholders' equity | ||||
Current liabilities | 106,331 | 90,629 | ||
Long-term liabilities | 67,291 | 13,862 | ||
Total liabilities and shareholders' equity | 429,624 | 390,360 | ||
FreshRealm | ||||
Assets | ||||
Cash and cash equivalents | 508 | 961 | ||
Accounts receivable | 716 | $ 0.3 | $ 300 | 1,493 |
Inventories, net | 2,725 | 2,792 | ||
Prepaid expenses and other current assets | 642 | 732 | ||
Property, plant, and equipment, net | 3,368 | 6,076 | ||
Other assets | 126 | 703 | ||
Total assets | 8,085 | 12,757 | ||
Liabilities and shareholders' equity | ||||
Current liabilities | 14,160 | 6,533 | ||
Debt to Calavo | 34,456 | 35,241 | ||
Equity | (40,531) | (29,017) | ||
Total liabilities and shareholders' equity | $ 8,085 | $ 12,757 |
FreshRealm - Statement of Opera
FreshRealm - Statement of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Statement of Operations | |||
Net sales | $ 1,059,371 | $ 1,195,777 | $ 1,088,758 |
Gross loss | 89,898 | 128,082 | 113,616 |
Selling, general and administrative | (57,952) | (59,113) | (57,081) |
Other | 553 | 499 | 559 |
Net income (loss) | (13,841) | 36,586 | 32,012 |
FreshRealm | |||
Statement of Operations | |||
Net sales | 19,232 | 24,112 | 33,769 |
Gross loss | (3,022) | (5,783) | (10,868) |
Selling, general and administrative | (14,188) | (20,196) | (19,512) |
Other | (6,850) | (4,621) | 1,023 |
Net income (loss) | $ (24,060) | $ (30,600) | $ (29,357) |
Leases - Assets and Liabilities
Leases - Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Oct. 31, 2020 | Nov. 01, 2019 | Oct. 31, 2019 | Oct. 31, 2018 | Oct. 31, 2017 | |
Leases | |||||
Operating lease liability | $ 64,716 | ||||
Finance lease liability | 7,059 | $ 6,174 | |||
Other long-term liabilities | 3,302 | 4,769 | |||
Total shareholders' equity | $ 256,002 | 285,869 | $ 264,959 | $ 244,122 | |
Lease, Practical Expedients, Package [true false] | true | ||||
Lease-related assets and liabilities | |||||
Operating lease assets | $ 60,262 | ||||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Operating lease assets | ||||
Finance lease asset | $ 6,830 | ||||
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | ||||
Total | $ 67,092 | ||||
Operating Lease, Liability, Current | $ 6,443 | ||||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Operating Lease, Liability, Current | ||||
Finance Lease, Liability, Current | $ 1,343 | 762 | |||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Long-term Debt and Capital Lease Obligations, Current | ||||
Operating Lease, Liability, Noncurrent | $ 58,273 | ||||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Operating Lease, Liability, Noncurrent | ||||
Finance Lease, Liability, Noncurrent | $ 5,716 | $ 5,412 | |||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term Debt and Capital Lease Obligations | ||||
Total | $ 71,775 | ||||
Weighted-average remaining lease term: Operating leases | 10 years | ||||
Weighted-average remaining lease term: Finance leases | 7 years 10 months 24 days | ||||
Weighted-average discount rate: Operating leases | 2.83% | ||||
Weighted-average discount rate: Finance leases | 3.28% | ||||
Cumulative effect adjustment | |||||
Leases | |||||
Total shareholders' equity | $ 923 | ||||
ASU, Leases | Cumulative effect adjustment | |||||
Leases | |||||
Operating lease liability | $ 69,600 | ||||
Deferred rent and incentives | (3,700) | ||||
Other long-term liabilities | (1,200) | ||||
Total shareholders' equity | 900 | ||||
Lease-related assets and liabilities | |||||
Operating lease assets | $ 65,700 |
Leases - Costs and Other Inform
Leases - Costs and Other Information (Details) $ in Thousands | 12 Months Ended |
Oct. 31, 2020USD ($) | |
Lease costs | |
Amortization of financing lease assets | $ 1,043 |
Operating lease cost | 8,271 |
Short-term lease cost | 996 |
Variable lease cost | 2,865 |
Interest on financing lease liabilities | 235 |
Total lease cost | 13,410 |
Operating cash flows for operating leases | 7,689 |
Financing cash flows for finance leases | 1,115 |
Operating cash flows for finance leases | 235 |
Right of use assets obtained for operating lease | $ 1,100 |
Leases - Undiscounted Future Pa
Leases - Undiscounted Future Payments (Details) - USD ($) $ in Thousands | Oct. 31, 2020 | Oct. 31, 2019 |
Operating Leases | ||
2021 | $ 8,171 | |
2022 | 7,986 | |
2023 | 7,922 | |
2024 | 7,572 | |
2025 | 6,748 | |
Thereafter | 36,478 | |
Total lease payments | 74,877 | |
Less: imputed interest | 10,161 | |
Total lease liability | 64,716 | |
Finance Leases | ||
2021 | 1,551 | |
2022 | 1,416 | |
2023 | 1,301 | |
2024 | 765 | |
2025 | 371 | |
Thereafter | 2,788 | |
Total lease payments | 8,192 | |
Less: imputed interest | 1,133 | |
Finance lease liability | $ 7,059 | $ 6,174 |
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 | $ 10,700 |
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 | 12 Months Ended |
Feb. 29, 2020 | Oct. 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) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Feb. 29, 2020 | Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2018 | |
Schedule of net assets | ||||
Cash acquired | $ 623 | |||
Goodwill | 28,568 | $ 18,262 | $ 18,300 | |
Simply Fresh Fruit [Member] | ||||
Schedule of net assets | ||||
Current assets (including cash of $623) | $ 3,954 | |||
Cash acquired | 623 | |||
Property, plant, and equipment | 2,260 | |||
Operating lease right-of-use assets | 110 | |||
Goodwill | 10,306 | |||
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 assets acquired | 19,019 | |||
Transaction costs related to acquisition | 300 | |||
Simply Fresh Fruit [Member] | Adjustment | ||||
Schedule of net assets | ||||
Property, plant, and equipment | 800 | |||
Operating lease right-of-use assets | 100 | |||
Goodwill | 500 | |||
Lease obligation acquired | $ 900 | |||
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 |
Reserve for FreshRealm Note R_2
Reserve for FreshRealm Note Receivable and Impairment of Investment (Detail) $ in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |||
Jul. 31, 2020USD ($) | Oct. 31, 2020USD ($) | Oct. 31, 2020MXN ($) | Oct. 31, 2020MXN ($) | Oct. 31, 2019USD ($) | |
Equity investment | |||||
Accounts receivable | $ 63,668 | $ 63,423 | |||
FreshRealm | |||||
Equity investment | |||||
Impair investment in FreshRealm | $ 2,800 | $ 2.8 | |||
Loan write-off | 34,200 | 34,200 | 34.2 | ||
Interest receivable | 4,100 | $ 4.1 | |||
Accounts receivable | 300 | $ 716 | $ 0.3 | $ 1,493 | |
Total impairment | 37,300 | 37.3 | |||
Discreet tax benefit | $ (9,500) | $ (9.5) |
Schedule II Valuation and Qua_2
Schedule II Valuation and Qualifying Accounts (Details) $ in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |||
Jul. 31, 2020USD ($) | Oct. 31, 2020USD ($) | Oct. 31, 2020MXN ($) | Oct. 31, 2019USD ($) | Oct. 31, 2018USD ($) | |
FreshRealm | |||||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||||
Loan write-off | $ 34,200 | $ 34,200 | $ 34.2 | ||
Allowance for Customer Deductions [Member] | |||||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||||
Balance at beginning of year | 1,954 | $ 1,850 | $ 1,038 | ||
Additions | 8,490 | 12,211 | 9,079 | ||
Deductions | 8,552 | 12,107 | 8,267 | ||
Balance at end of year | 1,892 | 1,954 | 1,850 | ||
Allowance for Doubtful Accounts [Member] | |||||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||||
Balance at beginning of year | 1,412 | 1,377 | 1,452 | ||
Additions | 194 | 35 | |||
Deductions | 75 | ||||
Balance at end of year | $ 1,606 | $ 1,412 | $ 1,377 |