Calavo Growers, Inc., has reported that fiscal 2019 first quarter adjusted net income rose 36 percent on a 17 percent increase in gross profit over the corresponding period last year. Operating income advanced 53 percent in the most-recent quarter, according to the company, a global avocado-industry leader and expanding provider of value-added fresh food.
First Quarter Highlights Include:
- Net Income Equaled $4.5 Million; Adjusted Net Income(1) Grew 36 Percent to $13.0 Million
- Diluted EPS Totaled 26 Cents; Adjusted Diluted EPS(1) Registered 74 Cents
- Operating Income Increased 53 Percent to $16.6 Million
- Gross Profit Climbed 17 Percent to $30.8 Million from $26.3 Million
- Revenues Rose to $258.0 Million from $247.9 Million
- Double-Digit Sales Growth in RFG and Calavo Foods Segments
Looking Forward for Fiscal Year 2019:
- CEO Cole Re-Affirms Forecast for Record Revenue (Driven By Growth in All Segments) and Double-Digit Increase in Adjusted Diluted EPS
For the three months ended Jan. 31, 2019, Calavo posted net income of $4.5 million, equal to $0.26 per diluted share. Excluding certain items impacting comparability, the company posted a 36 percent increase in adjusted net income(1) to $13.0 million, or $0.74 per adjusted diluted share, versus $9.5 million, equal to $0.54 per adjusted diluted share, in the year ago initial quarter.
First-quarter revenues climbed four percent to $258.0 million from $247.9 million in the corresponding quarter last year. Gross profit rose to $30.8 million, equal to 12.0 percent of revenues, from $26.3 million, or 10.6 percent of revenues, one year ago. Calavo’s operating income increased by $5.8 million to $16.6 million in the most-recent quarter from $10.8 million in the fiscal 2018 first period.
Chairman, President and Chief Executive Officer Lee E. Cole stated: “I am pleased to report that Calavo began fiscal 2019 with record-breaking results. Our first quarter adjusted net income and adjusted diluted earnings per share were approximately 36 percent higher than our previous first quarter record achieved last year. Further, we posted higher total revenues, gross profit and operating income.”
Cole continued: “In the Fresh segment, we overcame a period of limited industry supply in early November and yet still sold substantially more avocado units in the quarter when compared to last year. Additionally, we leveraged the company’s core strengths in fresh avocado sourcing, production and sales management to deliver sharply higher segment gross profit that contributed significantly to the aforementioned 17 percent increase in the company’s total gross profit.
“Our Renaissance Food Group (RFG) segment posted strong top-line growth of 12 percent despite continued industry challenges. In addition to the FDA’s romaine lettuce advisory in November, we also faced raw material challenges across a number of our key sourced ingredients during the quarter, both impacting costs and constraining sales. These unforeseen adverse conditions did not emerge until the last half of the first quarter. RFG’s ability to grow its sales by double digits while navigating these industry headwinds speaks to the underlying strength of the business we have built over the past several years.
“Sales in the Calavo Foods segment rose 16 percent on strong volume growth for our prepared guacamole products. As anticipated, segment gross profit increased sequentially from last year’s fourth quarter and trended in-line with historic norms. The first quarter’s performance punctuates Calavo Foods’ meaningful contribution to the company’s total revenue and profit growth.”
