Calavo Growers (NASDAQ: CVGW) reported Q4 EPS of $0.34, $0.30 worse than the analyst estimate of $0.64. Revenue for the quarter came in at $234.4 million versus the consensus estimate of $256.07 million.

Fourth Quarter Highlights

• Total revenue of $234.4 million, a 20% decrease year over year, reflecting 3% growth in avocado volume offset by 22% lower avocado prices and lower revenue in the Renaissance Food Group (“RFG”) and Foods segments.
• Gross profit of $21.2 million, or 9.0% of revenue, compared to $24.6 million, or 8.4% of revenue, for the comparable period last year. The increase in gross profit margin percentage was attributable to improvements in the RFG and Foods segments.
• Net income of $6.2 million, or $0.35 per diluted share, compared to $5.2 million, or $0.30 per diluted share. Adjusted net income was $6.0 million, or $0.34 per diluted share.
• Adjusted EBITDA of $13.4 million, compared to $14.8 million for the same period last year. The year-over-year decline in adjusted EBITDA was primarily due to $2.5 million of non-recurring charges related to various legacy items mostly in the international operations of the Company’s Fresh segment.
• On December 4, 2020, Calavo paid an annual cash dividend on its common stock of $1.15 per share, a 4.5% increase over the prior year’s annual dividend.

Management Commentary “Avocado volumes increased due to rising popularity in the U.S. and abroad,” said James E. Gibson, CEO of Calavo Growers. “Our fourth quarter results reflect a continuation of trends from the third quarter. With strong crops out of both Mexico and California, supply in the fourth quarter was plentiful, lowering the average selling price by 22% versus the year-ago quarter, when supply was very constrained. Many foodservice outlets remained unavailable to absorb the crop size and quality dispersion, which has historically helped to maintain margins. As a result, revenue and gross margin declined year-over-year.

“Our RFG segment continued to be impacted by the closure of our co-packing partner in the Midwest in April 2020. When excluding the impact of this closure, sales in our RFG segment rose 3% year-over-year, overcoming the impact from the pandemic. Our RFG segment has also continued to see margin improvement as we achieve greater efficiencies in facilities we operate. Our Foods segment continued to be adversely affected by lower foodservice demand resulting from the pandemic, offset slightly by favorable input commodity prices.

“As many businesses experienced, fiscal 2020 presented unprecedented challenges and our team faced them with resilience and resolve. We continue to move forward implementing strategic initiatives designed to improve our long-term growth prospects. We are capitalizing on the immediate opportunities to increase operating leverage and tap into synergies across our entire organization. We are thankful to our many stakeholders, from our employees to the many communities we serve, and of course our shareholders. To that end we were pleased to raise our annual dividend for the ninth consecutive year,” said Gibson.

GUIDANCE:

Calavo Growers sees Q1 2021 revenue of $215-225 million, versus the consensus of $257.8 million.

For earnings history and earnings-related data on Calavo Growers (CVGW) click here.