US: Calavo Growers face performance slump
California-based avocado company Calavo Growers recorded a net loss of US$517,000 for the fourth quarter of a disappointing financial year blamed on a smaller Californian harvest.
Calavo reported lower revenue and profit for both the fourth quarter and financial year and said it was constrained by a cyclically smaller California crop, which hampered performance in the company's core domestic business segment. The company also cited onerous costs related to implementing provisions required under Section 404 of the Sarbanes-Oxley Act (SOX) for the net losses.
Calavo posted a net loss of $517,000 on net sales of $62.2m, for the three months ending on 31 October 2005, compared with net income of $1.1m on net sales $65.4m in the corresponding period last year.
Full year net income totalled $3.3m for the 2005 financial year, compared with $6.2m in 2004. Net yearly revenues approximated $258.8m, which compares with sales of $274.2m one year earlier.
Calavo CEO Lee Cole said: "Calavo enjoyed outstanding growth in both its international and processed-products business segments, where fourth quarter revenues alone rose 83% and 25%, respectively, from the corresponding period last year. These gains, while enormously gratifying, were not sufficient to offset results in the company's California avocado division, which was adversely impacted by the cyclically smaller overall harvest, and accounts for the difference on our top line from last year."
Calavo's outlook anticipates an extremely large California crop during the 2006 financial year, 'robust' fresh avocado exports from Mexican packinghouses to the US and company growth in revenues and gross margins, fuelled by 'ultra-high-pressure sales' in the processed products market.
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