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What changed in CALAVO GROWERS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CALAVO GROWERS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+284 added−293 removedSource: 10-K (2026-01-14) vs 10-K (2025-01-14)

Top changes in CALAVO GROWERS INC's 2025 10-K

284 paragraphs added · 293 removed · 201 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

41 edited+7 added−7 removed29 unchanged
Biggest changeAfter processing, our guacamole can be frozen for extended shelf life or shipped fresh to customers in the U.S. and internationally. ​ While most of our prepared avocado products are produced at our Uruapan, Mexico facility, we occasionally partner with high-quality co-packers—utilizing similar ultra-high-pressure technology—to meet demand for retail and foodservice products. ​ Our prepared products include guacamole sold through retail and foodservice channels, as well as avocado pulp sold to foodservice customers.
Biggest changeThis process effectively eliminates bacteria that could cause spoilage, food safety concerns, or oxidation issues, while preserving the product’s taste profile. After processing, our guacamole can be frozen for extended shelf life or shipped fresh to customers in the U.S. and internationally. ​ Our prepared avocado products are primarily produced at our facility in Uruapan, Mexico.
It also helps foster innovation, creativity, and a wider range of perspectives to help us achieve even greater success. ​ 8 We embrace diversity throughout our company as we have employees across multiple generations and many different backgrounds. ​ Engagement and Opportunities : Evolving our culture to increase employee engagement and productivity is a primary focus of our strategic plan as we believe an engaged workforce leads to a more innovative, productive and profitable company.
It also helps foster innovation, creativity, and a wider range of perspectives to help us achieve even greater success. ​ We embrace diversity throughout our Company as we have employees across multiple generations and many different backgrounds. ​ Engagement and Opportunities : Evolving our culture to increase employee engagement and productivity is a primary focus of our strategic plan as we believe an engaged workforce leads to a more innovative, productive and profitable company.
Additionally, we believe our diversified fresh product offerings, consistent product quality, and value-added programs give us a distinct advantage in serving retail and foodservice customers. ​ Our Grown business segment also markets and distributes other perishable food products, including tomatoes and papayas (“Other Fresh Products”).
Additionally, we believe our diversified fresh product offerings, consistent product quality, and value-added programs give us a distinct advantage in serving retail and foodservice customers. ​ Our Fresh business segment also markets and distributes other perishable food products, including tomatoes and papayas (“Other Fresh Products”).
Consumer preferences, particularly for natural, preservative-free products, drive differentiation in this market. Our use of ultra-high pressure processing technology to deliver high-quality, preservative-free guacamole with extended shelf life helps position us as a leader in this category.
Consumer preferences, particularly for natural, preservative-free products, drive differentiation in this market. Our use of ultra-high pressure processing technology to deliver high-quality, preservative-free guacamole with extended shelf life helps position us as a leader in this market.
Final settlements, based on fruit size and quality, are completed approximately 14 to 21 days after harvest. We also source fruit directly from third-party Mexican packers (copackers) to balance inventory or fulfill priority sizes and grades.
Final settlements, based on fruit size and quality, are completed approximately 14 to 21 days after harvest. We also source fruit directly from certified third-party Mexican packers (copackers) to balance inventory or fulfill priority sizes and grades.
California-grown Hass avocados are generally available from April through September, with peak production occurring from May through August. 4 ​ In fiscal 2022, the United States Department of Agriculture (USDA) approved the export of Jalisco avocados to the United States. As such, we source fruit from both the Michoacán and Jalisco regions in Mexico.
California-grown Hass avocados are generally available from April through September, with peak production occurring from May through August. ​ In fiscal 2022, the United States Department of Agriculture (“USDA”) approved the export of Jalisco avocados to the United States. As such, we source fruit from both the Michoacán and Jalisco regions in Mexico.
We believe offering a variety of fruits complements our core avocado business and enhances our overall product portfolio. ​ Prepared ​ Our Prepared segment focuses on our prepared avocado products (“guacamole”) division. We use ultra-high-pressure technology, a cold pasteurization process, on all guacamole products to safeguard food without requiring preservatives.
We believe offering a variety of fruits complements our core avocado business and enhances our overall product portfolio. 6 Table of Contents ​ Prepared ​ Our Prepared segment focuses on our prepared avocado products (“guacamole”) division. We use ultra-high-pressure technology, a cold pasteurization process, on all guacamole products to safeguard food without requiring preservatives.
To help manage this, our field personnel work closely with growers and farm managers to coordinate harvest plans. Feedback from our field managers is shared with our sales department to help develop sales strategies for our direct sales force. Industry associations in Mexico employ crop estimators to provide an annual crop estimate.
To help manage this, our field personnel work closely with primarily independent growers and farm managers to develop harvest plans. Feedback from our field managers is shared with our sales department to help develop sales strategies for our direct sales force. Industry associations in Mexico employ crop estimators to provide an annual crop estimate.
We solicit customer and supplier input, review process and product trends, and conduct sensory and shelf life testing in order to expand the category and drive new sales for our customers. Research and development costs are charged to expense when incurred.
We solicit customer and supplier input, review process and product trends, and conduct sensory and shelf-life testing in order to expand our product offerings and drive new sales for our customers. Research and development costs are charged to expense when incurred.
While this fruit usually is packed in Calavo branded cartons, all the fruit we source from third parties is packed at certified packinghouses to meet Calavo quality and food safety standards before being shipped to our facilities and customers. ​ Avocados sourced from Peru are primarily handled on a consignment basis.
While this fruit usually is packed in Calavo branded cartons, all the fruit we source from third parties is packed at certified packinghouses to meet Calavo quality and food safety standards before being shipped to our facilities and customers. 5 Table of Contents ​ Avocados sourced from Peru are primarily handled on a consignment basis.
Avocados from Colombia are primarily handled on an FOB Colombia basis, with price guidelines, strict quality specification and inspections upon arrival to the United States. ​ Aside from fruit costs, packing materials, and freight costs, which are generally passed on to our customers, a significant portion of our avocado handling costs are fixed.
Avocados from Colombia are primarily handled on a free on board Colombia basis, with price guidelines, strict quality specification and inspections upon arrival to the United States. ​ Aside from fruit costs, packing materials, and freight costs, which are generally passed on to our customers, a significant portion of our avocado handling costs are fixed.
The Prepared segment consists of guacamole sold at retail and foodservice as well as avocado pulp sold to foodservice. See Note 10 in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further information about our business segments.
The Fresh segment consists of fresh avocados, tomatoes and papayas. The Prepared segment consists of guacamole sold at retail and foodservice as well as avocado pulp sold to foodservice. See Note 10 in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further information about our business segments.
We are proud of the diversity throughout our organization and feel this contributes to a positive and respectful working environment.
We are proud of the diversity throughout our organization and believe this contributes to a positive and respectful working environment.
Our customer-focused approach, combined with our global sourcing capabilities and value-added services, position us to maintain and grow our market share in this competitive industry. ​ Patents and Trademarks ​ Our trademarks include the Calavo brand name and related logos.
Our customer-focused approach, combined with our global sourcing capabilities and value-added services, position us to maintain and grow our market share in this competitive industry. 7 Table of Contents ​ Patents and Trademarks ​ Our trademarks include the Calavo brand name and related logos.
We believe our facilities and practices are sufficient to maintain compliance with applicable governmental laws, regulations, permits and licenses. ​ Human Capital Resources ​ We believe in nurturing people, from consumers eating our products to our employees, suppliers, customers and the communities in which we live and work. ​ Employees : Our employees are our greatest asset and are directly responsible for our success in delivering fresh, quality products to consumers.
We believe our facilities and practices are sufficient to maintain compliance with applicable governmental laws, regulations, permits and licenses. ​ 8 Table of Contents Human Capital Resources ​ We believe in nourishing people, from consumers eating our products to our employees, suppliers, customers and the communities in which we live and work. ​ Employees : Our employees are our greatest asset and are directly responsible for our success in delivering fresh, quality products to consumers.
No less than three updates are executed throughout the crop year. ​ The process for purchasing avocados varies across sourcing regions. In California, growers receive daily field quotes, priced per pound, based on variety, size, and grade. These quotes are calculated by estimating expected sales prices, less anticipated costs and desired margins.
At least three updates to the annual crop estimate are executed throughout the crop year. ​ The process for purchasing avocados varies across sourcing regions. In California, growers receive daily field quotes, priced per pound, based on variety, size, and grade. These quotes are calculated by estimating expected sales prices, less anticipated costs and desired margins.
All of our US facilities are also in compliance with the FDA’s Food Safety Modernization Act.
All of our U.S. facilities are also in compliance with the FDA’s Food Safety Modernization Act.
Short-Term (STD) and Long-Term (LTD) disability plans paid for by Calavo. f. A company paid Employee Assistance Program, offering free and confidential counseling services. g. Vacation accrual of 2 – 4 weeks of accrual per year and paid sick leave. h. Paid Bereavement leave of 3 days. i. Paid Pregnancy leave. j.
Short-Term (STD) and Long-Term (LTD) disability plans paid for by Calavo. f. A Company paid Employee Assistance Program, offering free and confidential counseling services. g. Vacation accrual of two to four weeks per year depending on tenure and paid sick leave. h. Paid Bereavement leave of 3 days. i. Paid Pregnancy leave. j.
Cell phone and internet allowance where employees use their personal devices for work related purposes, based upon the position. ​ Safety: We are committed to building a culture of safety with the goal of zero incidents. Our approach prioritizes the health and well-being of our employees through proactive training programs, strict compliance with safety regulations, and continuous improvement initiatives.
Cell phone stipend where an employee uses their personal cell phone for work related purposes, based on the position. ​ Safety: We are committed to building a culture of safety with the goal of zero incidents. Our approach prioritizes the health and well-being of our employees through proactive training programs, strict compliance with safety regulations, and continuous improvement initiatives.
These laws and regulations govern the treatment, handling, storage and disposal of materials and waste and the remediation of contaminated properties. ​ We seek to comply at all times with all such laws and regulations and to obtain any necessary permits and licenses, and we are not aware of any instances of material non-compliance.
These laws and regulations govern the treatment, handling, storage and disposal of materials and waste and the remediation of contaminated properties. ​ We are committed to complying with all such laws and regulations and in obtaining any necessary permits and licenses, and we are not aware of any instances of material non-compliance.
As of October 31, 2024, we had 2,106 employees, of which 317 were in the US and 1,789 were in Mexico. While we have certain operations in Hawaii that are represented by a union, we do not have a significant number of US employees covered by a collective bargaining agreement.
As of October 31, 2025, we had 1,969 employees, of which 293 were in the U.S. and 1,676 were in Mexico. While we have certain operations in Hawaii that are represented by a union, we do not have a significant number of U.S. employees covered by a collective bargaining agreement.
We consider the relationship with our employees to be good and we have never experienced a significant work stoppage. ​ The following is a summary of the number of “salaried” and “hourly” employees as of October 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ Location Salaried Hourly Total United States 134 183 317 Mexico 388 1,401 1,789 TOTAL 522 1,584 2,106 ​ ​ We compensate all workers with wages, overtime premiums, and benefits that meet or exceed local legal standards, local industry standards, or collective agreements, whichever are highest.
We consider the relationship with our employees to be good and we have never experienced a significant work stoppage. ​ The following is a summary of the number of “salaried” and “hourly” employees as of October 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ Location ​ ​ ​ Salaried ​ ​ ​ Hourly ​ ​ ​ Total United States 125 168 293 Mexico 209 1,467 1,676 TOTAL 334 1,635 1,969 ​ ​ We compensate all workers with wages, overtime premiums, and benefits that meet or exceed local legal standards, local industry standards, or collective agreements, whichever are highest.
These products are marketed under Calavo-owned brands and through store-brand private label programs. ​ Both our Grown and Prepared segments foster strong customer relationships by delivering high-quality products, driving innovation, offering year-round availability, and maintaining national distribution. ​ Sales and Other Financial Information by Business Segment and Product Category ​ Sales and other financial information by business segment are provided in Note 10 to our consolidated financial statements that are included in this Annual Report. ​ 6 Competition ​ The perishable food industry, including the avocado, tomato, papaya, and prepared foods markets in which we operate, is highly competitive.
These co-packers operate under HACCP-based food safety systems and maintain GFSI-benchmarked certifications consistent with globally recognized food safety programs. ​ Both our Fresh and Prepared segments foster strong customer relationships by delivering high-quality products, driving innovation, offering year-round availability through diverse sourcing relationships, and maintaining national distribution. ​ Sales and Other Financial Information by Business Segment and Product Category ​ Sales and other financial information by business segment are provided in Note 10 to our consolidated financial statements that are included in this Annual Report. ​ Competition ​ The perishable food industry, including the avocado, tomato, papaya, and prepared foods markets in which we operate, is highly competitive.
Our executive officers are located at 1141-A Cummings Road, Santa Paula, CA 93060. The SEC also maintains an internet website that contains reports and other information regarding issuers that file electronically with the SEC located at http://www.sec.gov. ​ ​
Material contained on our website is not incorporated by reference in this report. Our executive officers are located at 1141-A Cummings Road, Santa Paula, CA 93060. The SEC also maintains an internet website that contains reports and other information regarding issuers that file electronically with the SEC located at http://www.sec.gov. ​ 10 Table of Contents
Our annual reports on Form 10-K and proxy statements are made available free of charge through the Investors section 9 of the Company’s website (http:// ir.calavo.com/financial-information/annual-reports-and-proxy-statements) as soon as practicable after such material is electronically filed with, or furnished to, the SEC. Material contained on our website is not incorporated by reference in this report.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, including the exhibits thereto, and any amendments to such reports, and our proxy statements are made available free of charge through the Investors section of the Company’s website (http:// ir.calavo.com/) as soon as practicable after such material is electronically filed with, or furnished to, the SEC.
Payments are generally calculated as a percentage of the net selling price, less charges for distribution and value-added service or alternatively at a flat, per carton rate.
Payments to the exporter are generally calculated as net selling price, less charges for commission (generally a fixed rate per carton), prepaid logistics and distribution, import fees, tariffs (if any) and value-added service or alternatively at a flat, per carton rate.
Research shows that consumers typically buy larger quantities when avocados are offered in bags rather than traditional bulk displays.
These include bagging avocados and strategically displaying them within produce sections. Research shows that consumers typically buy larger quantities when avocados are offered in bags rather than traditional bulk displays.
To support this commitment, we conduct monthly safety training for operational employees and enforce the use of personal protective equipment required for their roles. Additionally, all employees participate in annual compliance training to ensure adherence to regulatory standards. ​ We strive to make life better for everyone, in line with our vision of nourishing families with quality products.
Additionally, all employees participate in annual compliance training to ensure adherence to regulatory standards. ​ We strive to make life better for everyone, in line with our vision of nourishing families with quality products.
Our ongoing success in marketing avocados depends largely on maintaining a reliable, high-quality supply at reasonable prices while keeping handling costs low as fruit moves through our facilities and to our customers. ​ To help ensure the safety and quality of our avocados, we are subject to inspections by the USDA, the Mexican Secretary of Agriculture, Secretariat of Agriculture and Rural Development (SADER), and other regulatory authorities. ​ We have developed a range of value-added programs designed to provide products and services that address our customers' diverse needs.
Our ongoing success in marketing avocados depends largely on maintaining a reliable, high-quality supply at reasonable prices while keeping handling costs low as fruit moves through our facilities and to our customers. ​ To help ensure the safety and quality of our avocados, we are subject to inspections by the USDA, the U.S.
Total research and development costs for fiscal years 2024, 2023 and 2022 were approximately $0.1 million, $0.1 million and $0.1 million. ​ Compliance with Government Regulations ​ As a purchaser, manufacturer, distributor, marketer, and advertiser of food products, our operations are subject to extensive regulation by various federal government agencies, including the U.S.
Total research and development costs for fiscal years 2025, 2024 and 2023 were less than $0.1 million in each such year. ​ Compliance with Government Regulations ​ As a purchaser, manufacturer, distributor, marketer, and advertiser of food products, our operations are subject to extensive regulation by various federal government agencies, including the FDA, the USDA and the Federal Trade Commission, as well as state and local agencies, with respect to production processes, product attributes, packaging, labeling, storage and distribution.
In addition, our operations are subject to certain employment health and safety regulations, including those issued under the Occupational Safety and Health Act. Our packinghouse facilities and products are subject to periodic inspection by federal, state and local authorities, including the FDA and the California Department of Food and Agriculture, which oversees weights & measures compliance at our California facilities.
Our packinghouse facilities and products are subject to periodic inspection by federal, state and local authorities, including the FDA and the California Department of Food and Agriculture, which oversees weights and measures compliance at our California facilities. In fiscal 2025, we experienced increased FDA oversight of imported avocados, including enhanced testing and inspection protocols at the border.
In addition, our operations in Mexico are subject to US and Mexican regulations through the USDA-APHIS and the Mexican Secretary of Agriculture, Secretariat of Agriculture and Rural 7 Development (SADER) primarily pertaining to phytosanitary regulations, certification regulation for the importation of Hass avocados to the United States. ​ As a large importer of perishable products in the U.S., Calavo was an early adopter of the U.S.
In addition, our operations in Mexico are subject to U.S. and Mexican regulations through the Animal and Plant Health Inspection Service (“APHIS”) of the USDA and the SADER primarily pertaining to phytosanitary regulations and certification regulation for the importation of Hass avocados to the United States.
See Note 16 of the consolidated financial statements for further information. ​ Grown ​ Founded in 1924 to market California avocados, Calavo now sources avocados from various locations—including California, Mexico, Peru, and Colombia—and distributes them to a diverse group of retail grocers, foodservice operators, club stores, mass merchandisers, food distributors, and wholesalers.
Risk Factors of this Form 10-K. ​ Fresh ​ Founded in 1924 to market California avocados, Calavo sources avocados from primarily independent growers in locations including California, Mexico, Peru, and Colombia, and distributes them to a diverse group of retail grocers, club and mass-merchandise stores, foodservice operators, and wholesalers.
We believe ripened avocados help retailers satisfy consumer preferences and drive faster sales through their stores. 5 ​ ● Value-Added Packaging: We have introduced innovative packaging and display techniques to attract consumers, especially impulse buyers. These include bagging avocados and strategically displaying them within produce sections.
Our nationwide ripening infrastructure—featuring advanced technology and an experienced handling workforce—positions us to effectively meet those demands. We believe ripened avocados help retailers satisfy consumer preferences and drive faster sales through their stores. ​ ● Value-Added Packaging: We have introduced innovative packaging and display techniques to attract consumers, especially impulse buyers.
Supply fluctuations, driven by seasonality, weather conditions and pests, among other geopolitical factors, can impact pricing and availability, particularly given the year-round demand for avocados.
Supply fluctuations, driven by seasonality, weather conditions and pests, among other geopolitical factors, can impact pricing and availability, particularly given the year-round demand for avocados. We believe our diverse sourcing regions, including California, Mexico, Peru, and Colombia, as well as our long-standing grower relationships and state-of-the-art ripening and packing facilities, provide a competitive advantage.
We uphold fundamental human rights and adhere to established labor standards, not only for our own workforce, but also for those employed by our suppliers and the communities impacted by our operations. ​ Our goal is to maintain a workplace free of preventable hazards while complying with all applicable laws and regulations related to health and safety.
We uphold fundamental human rights and adhere to established labor standards, not only for our own workforce, but also for those employed by our suppliers and the communities impacted by our operations. ​ We also monitor compliance with evolving food safety and import regulations that apply to our operations, including requirements for domestic processing facilities and our role as an importer of record for produce sourced abroad.
Our expertise in marketing and distributing avocados, prepared avocado products, 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 worldwide. We procure avocados from California, Mexico and other growing regions around the world.
Drawing on decades of expertise with fresh and prepared produce, we deliver a broad portfolio of products to retail grocers, club and mass-merchandise stores, foodservice operators, and wholesalers worldwide. We procure avocados from California, Mexico and other key growing regions.
Item 1. Business ​ General development of the business ​ Calavo Growers, Inc. (referred to in this report as “Calavo”, the “Company”, “we’, “us” or “our”), is a global leader in the avocado industry and a provider of value-added fresh food.
Item 1. Business ​ General Development of the Business ​ Calavo Growers, Inc. (“Calavo,” the “Company,” “we,” “us,” or “our”), is a global leader in sourcing, packing and distribution of fresh avocados, tomatoes, and papayas and processing of guacamole and other avocado products.
Through our various operating facilities, we (i) sort, pack, and/or ripen avocados, tomatoes and/or Hawaiian grown papayas, and (ii) process and package guacamole. We distribute our products both domestically and internationally. ​ We report our operations in two different business segments: Grown and Prepared. The Grown segment consists of fresh avocados, tomatoes and papayas.
Across our operating facilities, we (i) sort, pack, ripen, and ship avocados, tomatoes, and Hawaiian-grown papayas, all of which we procure primarily from independent growers, and (ii) process and package fresh and frozen guacamole.
Food and Drug Administration (the “FDA”), the USDA and the Federal Trade Commission, as well as state and local agencies, with respect to production processes, product attributes, packaging, labeling, storage and distribution. Under various statutes and regulations, these agencies prescribe requirements and establish standards for the distribution, safety, purity and labeling of food products.
Under various statutes and regulations, these agencies prescribe requirements and establish standards for the distribution, safety, purity and labeling of food products. In addition, our operations are subject to certain employment health and safety regulations, including those issued under the Occupational Safety and Health Act.
We believe our diverse sourcing regions, including California, Mexico, Peru, and Colombia, as well as our long-standing grower relationships and state-of-the-art ripening and packing facilities, provide a competitive advantage. ​ In the prepared avocado products segment, we face competition from local and international food processors offering both branded and private-label guacamole and avocado products.
The perishable nature of our products, combined with evolving regulatory oversight, particularly at the border, can also affect competitive dynamics, shipment timing, and product availability. ​ In the prepared avocado products segment, we face competition from local and international food processors offering both branded and private-label guacamole and avocado products.
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Our principal executive offices are located at 1141-A Cummings Road, Santa Paula, California 93060; and our telephone number is (805) 525-1245. ​ Discontinued Operations ​ We completed the sale of our Fresh Cut business (formerly “RFG”) and related real estate on August 15, 2024 for $83.0 million.
Added
Our products are distributed both domestically and internationally. ​ In the first quarter of fiscal 2025, we renamed our “Grown” reportable segment to “Fresh” to better reflect our activities; the change did not affect the segment’s composition, financial results, or internal performance metrics. We report results under two segments: Fresh and Prepared.
Removed
Proceeds from the sale totaled $81.1 million, net of $1.9 million of transaction costs.
Added
Our principal executive offices are located at 1141-A Cummings Road, Santa Paula, California 93060; and our telephone number is (805) 525-1245. ​ Agreement and Plan of Merger with Mission Produce, Inc. ​ On January 14, 2026, we entered into the Merger Agreement, by and among, the Company, Mission, Cantaloupe Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of Mission (“Merger Sub I”), and Cantaloupe Merger Sub II, LLC, a Delaware limited liability company and a wholly owned subsidiary of Mission (“Merger Sub II”) pursuant to which, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, among other things, Merger Sub I will merge with and into the Company, with the Company surviving the merger as the surviving corporation (the “First Merger”) and immediately following the First Merger, the Company will merge with and into Merger Sub II, with Merger Sub II surviving the merger as the surviving corporation (the “Second Merger” and together with the First Merger, the “Mergers”). ​ Subject to the terms and conditions of the Merger Agreement, at the date and time the First Merger becomes effective (the “First Effective Time”), each share of our common stock issued and outstanding immediately prior to the First Effective Time will be converted into and thereafter represent the right to receive $27.00 per share in consideration, consisting of (i) 0.9790 shares of common stock of Mission (the “Mission Shares”), subject to the right to receive cash in lieu of fractional Mission Shares, if any, into which such shares of our common stock have been converted and (ii) $14.85 in cash without interest. ​ The closing of the Mergers is subject to among other things, approval by our shareholders and Mission’s shareholders, as well as other customary closing conditions, including (i)(a) the expiration or termination of any waiting period or attainment of any clearance applicable to the consummation of the Mergers under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any commitment to, or agreement with, any governmental authority to delay the consummation of, or not to consummate before a certain date, the Mergers and (b) applicable 4 Table of Contents under certain other antitrust and foreign investment laws shall have expired, been terminated or been obtained; (ii) the absence of any law or order prohibiting the consummation of the Mergers; (iii) the effectiveness of a Registration Statement on Form S-4 filed with the Securities and Exchange Commission (“SEC”) in connection with the transaction; and (iv) authorization for listing on Nasdaq of the shares of Mission’s common stock to be issued in connection with the First Merger.
Removed
The Fresh Cut business represents substantially all of the business of the Prepared segment other than the guacamole business, which was retained. ​ The financial results of the Fresh Cut business have been classified as discontinued operations in the statements of operations and its assets and liabilities have been classified as held for sale in the balance sheets included herein.
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There can be no assurances that the Mergers will be successfully consummated or that the shareholders will recognize the benefits of the Mergers in the event the Mergers are consummated. For additional information regarding the risks and uncertainties related to the Merger Agreement and the Mergers, see “Risk Factors – Risk Related to the Proposed Mergers” in Item 1A.
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Unless otherwise noted, amounts and disclosures in this section relate to our continuing operations (except for the Liquidity and Capital Resources section). ​ Prior to the decision to divest our Fresh Cut business, our Prepared reporting segment included the Fresh Cut business unit and our guacamole business.
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Food and Drug Administration (“FDA”), the Mexican Secretary of Agriculture, Secretariat of Agriculture and Rural Development (“SADER”), and other regulatory authorities. ​ We have developed a range of value-added programs designed to provide products and services that address our customers' diverse needs. Key programs include: ​ ● Value-Added Ripening: Retailers require avocados that meet strict quality and ripeness standards.
Removed
As a result of the divestiture, the Fresh Cut business unit is no longer included in our Prepared business segment. All segment information included herein reflect these changes.
Added
This facility operates under a Hazard Analysis and Critical Control Points (“HACCP”)–based food safety system and maintains certifications benchmarked by the Global Food Safety Initiative (“GFSI”), which employ similar ultra-high-pressure processing technology to meet retail and foodservice demand. ​ In addition, we utilize third-party co-packers to supplement production as needed.
Removed
Key programs include: ​ ● Value-Added Ripening: Retailers require avocados that meet strict quality and ripeness standards. Our nationwide ripening infrastructure—featuring advanced technology and an experienced handling workforce—positions us to effectively meet those demands.
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Imported produce is also subject to the Food Safety Modernization Act’s Foreign Supplier Verification Program (FSVP), which imposes requirements on U.S. importers to verify and document the safety of food produced abroad. ​ As a large importer of perishable products in the U.S., Calavo was an early adopter of the U.S.
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This process effectively eliminates bacteria that could cause spoilage, food safety concerns, or oxidation issues, while preserving the product’s taste profile.
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To support this commitment, we conduct monthly safety training for operational employees and enforce the use of personal 9 Table of Contents protective equipment required for their roles.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

61 edited+8 added−19 removed72 unchanged
Biggest changeAn adverse result of this appeal could have an adverse effect on our operations in Mexico, which rely to some extent on external picking and hauling services. ​ For additional information about our Mexican sourced fruit, see the “Business” section included in this Annual Report. ​ Our current international operations are subject to various inherent risks, including: ​ ● Local economic and political conditions, including disruptions in supply, labor, transportation (the transport of consumer goods), trading and capital markets; ● Restrictive U.S. and foreign governmental actions, such as restrictions on transfers of funds and trade protection measures, including import/export duties and quotas and customs duties and tariffs; and ● Changes in legal or regulatory requirements affecting foreign investment, loans, taxes (including value-added taxes), imports, and exports. ​ The Hamas-Israel and Russia-Ukraine conflicts, other areas of geopolitical tension around the world, or the worsening of those conflicts or tensions, and any related challenging macroeconomic conditions globally and in various countries in which we and our customers operate may materially adversely affect our customers, vendors, and partners, and the duration and extent to which these factors may impact our future business and operations, results of operations, financial condition and cash flows remain uncertain. ​ The Hamas-Israel and Russia-Ukraine conflicts, or other areas of geopolitical tension around the world, or any worsening or spread of those conflicts or geopolitical tensions, and any related challenging macroeconomic conditions globally, could decrease the spending of our existing and potential new customers, adversely affect demand for our products, cause one or more of our customers, vendors, and partners to file for bankruptcy protection or go out of business, impact expected spending and pricing levels from existing and potential new customers, and negatively impact collections of accounts receivable, all of which could adversely affect our business, results of operations and financial condition. ​ Any of the negative impacts of the Hamas-Israel and Russia-Ukraine conflicts, other areas of geopolitical tension around the world, or any worsening of those conflicts or geopolitical tensions, and any related challenging macroeconomic conditions, may have a material adverse effect on our business and operations, results of operations, financial condition and cash flows.
Biggest changeAn adverse result of this appeal could have an adverse effect on our operations in Mexico, which rely to some extent on external picking and hauling services. ​ For additional information about our Mexican sourced fruit, see the “Business” section included in this Annual Report. ​ Our current international operations are subject to various inherent risks, including: ​ ● Local economic and political conditions, including disruptions in supply, labor, transportation (the transport of consumer goods), trading and capital markets; 20 Table of Contents ● Restrictive U.S. and foreign governmental actions, such as restrictions on transfers of funds and trade protection measures, including import/export duties and quotas and customs duties and tariffs; and ● Changes in legal or regulatory requirements affecting foreign investment, loans, taxes (including value-added taxes), imports, and exports. ​ Geopolitical conflicts and related economic conditions could adversely affect our business. ​ Geopolitical tensions and conflicts, including the Hamas-Israel and Russia-Ukraine conflicts and any related macroeconomic conditions, may adversely impact our customers, vendors, and partners, reduce demand for our products, disrupt supply chains and financial markets, and negatively affect collections of accounts receivable.
To the extent that consumers stop purchasing products that we produce due to health, food safety or other reasons, and we are unable to modify our products or to develop products that satisfy new consumer preferences, there could be a decreased demand for our products. ​ Increases in commodity or raw product input costs, such as fuel, packaging, and paper, could adversely affect our operating results. ​ Many factors may affect the cost and supply of fresh produce, including external conditions, commodity market fluctuations, currency fluctuations, changes in governmental laws and regulations, the war in Ukraine or conflict elsewhere, agricultural programs, severe and prolonged weather conditions and natural disasters.
To the extent that consumers stop purchasing our products due to health, food safety or other reasons, and we are unable to modify our products or to develop products that satisfy new consumer preferences, there could be a decreased demand for our products. ​ Increases in commodity or raw product input costs, such as fuel, packaging, and paper, could adversely affect our operating results. ​ Many factors may affect the cost and supply of fresh produce, including external conditions, commodity market fluctuations, currency fluctuations, changes in governmental laws and regulations, the war in Ukraine or conflict elsewhere, agricultural programs, severe and prolonged weather conditions and natural disasters.
We cannot assure you that we will be able to hire or retain the personnel necessary to achieve our strategic vision, that personnel we do recruit will be successful or that the loss of any such personnel will not have a material impact on our financial condition and results of operations. ​ Replacing departing executives can involve organizational disruption and uncertainty.
We cannot assure you that we will be able to hire or retain the personnel necessary to achieve our strategic vision, that personnel we recruit will be successful, or that the loss of any such personnel will not have a material impact on our financial condition and results of operations. ​ Replacing departing executives can involve organizational disruption and uncertainty.
For additional details, see Note 14 in the consolidated financial statements. ​ 18 We believe our operations in Mexico are properly documented, and our internationally recognized tax advisors support our position that there are legal grounds to prevail in recovering the IVA amounts. Accordingly, we have recorded no provision related to these refunds.
For additional details, see Note 14 in the consolidated financial statements. ​ We believe our operations in Mexico are properly documented, and our internationally recognized tax advisors support our position that there are legal grounds to prevail in recovering the IVA amounts. Accordingly, we have recorded no provision related to these refunds.
These foreign currency fluctuations also affect the ultimate realization of foreign currency denominated assets and liabilities in U.S. dollar terms. While hedging instruments may help reduce the volatility associated with currency rate changes, hedging instruments may not be readily available, may be too expensive or may be ineffective for the respective reduction in volatility desired.
These foreign currency fluctuations also affect the ultimate realization of foreign currency denominated assets and liabilities in U.S. dollar terms. While hedging instruments may help reduce the volatility associated with currency rate changes, hedging instruments may not be readily available, may be too expensive or may be ineffective for the reduction in volatility desired.
Our effective tax rates could be affected by changes in the mix of 17 earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretation. ​ We are also subject to the examination of our tax returns and other tax matters by the U.S.
Our effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretation. ​ We are also subject to the examination of our tax returns and other tax matters by the U.S.
Management’s attention, or other resources, may be diverted if we fail to successfully complete or integrate business combinations or investment transactions. ​ 12 System security risks, data protection breaches, cyber-attacks and systems integration issues could disrupt our internal operations and services provided to customers, and any such disruption could damage our reputation and adversely affect our business, financial condition and results of operations. ​ Our information technology networks could be compromised by cyber-attacks resulting in misappropriation of our confidential information or that of third parties, system disruptions or system shutdowns.
Management’s attention, or other resources, may be diverted if we fail to successfully complete or integrate business combinations or investment transactions. ​ 12 Table of Contents System security risks, data protection breaches, cyber-attacks and systems integration issues could disrupt our internal operations and services provided to customers, and any such disruption could damage our reputation and adversely affect our business, financial condition and results of operations. ​ Our information technology networks could be compromised by cyber-attacks resulting in misappropriation of our confidential information or that of third parties, system disruptions or system shutdowns.
Item 1A. Risk Factors ​ You should carefully consider the following risks and other information in this Form 10-K. Any of the following risks could materially and adversely affect our results of operations or financial condition.
Item 1A. Risk Factors ​ You should carefully consider the following risks and other information in this Form 10-K. Any of the following risks could materially and adversely affect our business, results of operations or financial condition.
Management and key personnel changes may disrupt our operations, and we may have difficulty attracting and retaining qualified replacements. ​ We have experienced changes in management and other key personnel in critical functions across our organization, including our chief financial officer and other members of our accounting department.
Management and key personnel changes may disrupt our operations, and we may have difficulty attracting and retaining qualified replacements. ​ We have experienced changes in management and other key personnel in critical functions across our organization, including our chief executive officer, chief financial officer and other members of our accounting department.
Consumer demand for our products also may be impacted by any public commentary that consumers or certain regulatory bodies (including federal or state agencies involved in 16 monitoring food safety) may make regarding our products or similar products.
Consumer demand for our products also may be impacted by any public commentary that consumers or certain regulatory bodies (including federal or state agencies involved in monitoring food safety) may make regarding our products or similar products.
Additionally, any perceived failures to operate in accordance with domestic and international laws and regulations could cause consumers to no longer associate our company and our brands with high quality and safety products, may adversely affect the value of our brands and the demand for our products. ​ Unanticipated changes in U.S. or international tax provisions, the adoption of new tax legislation, or exposure to additional tax liabilities could affect our business, results of operations and financial position. ​ We are subject to taxes in the U.S. and Mexico.
Additionally, any perceived failures to operate in accordance with domestic and international laws and regulations could cause consumers to no longer associate our Company and our brands with high quality and safe products and may adversely affect the value of our brands and the demand for our products. ​ Unanticipated changes in U.S. or international tax provisions, the adoption of new tax legislation, or exposure to additional tax liabilities could affect our business, results of operations and financial position. ​ We are subject to taxes in the U.S. and Mexico.
These changing rules, public disclosure regulations and stakeholder expectations have resulted in, and are likely to continue to result in, increased management time and attention spent complying with or meeting such regulations and expectations.
Changing rules, public disclosure regulations and stakeholder expectations have resulted in, and are likely to continue to result in, increased management time and attention spent complying with or meeting such regulations and expectations.
Historically, CDM received IVA refunds from the Mexican tax authorities in a timely manner. However, since fiscal 2014 and continuing into fiscal 2024, the tax authorities have challenged refund requests and supporting documentation that were previously deemed acceptable. They have also questioned refunds related to IVA paid to certain suppliers alleged to have failed to meet their own tax obligations.
Historically, CDM received IVA refunds from the Mexican tax authorities in a timely manner. However, since fiscal 2014 and continuing into fiscal 2025, the tax authorities have challenged refund requests and supporting documentation that were previously deemed acceptable. They have also questioned refunds related to IVA paid to certain suppliers alleged to have failed to meet their own tax obligations.
Climate change regulation continues to evolve, and it is not possible to accurately estimate either a timetable for implementation or our future compliance costs relating to implementation. ​ Increased legislative, regulatory and public scrutiny on ESG issues including potential litigation involving our ESG practices or disclosures may adversely affect our business, and results of operations.
Climate change regulation continues to evolve, and it is not possible to accurately estimate either a timetable for implementation or our future compliance costs relating to implementation. ​ Increased legislative, regulatory and public scrutiny on ESG issues including potential litigation involving our ESG practices or disclosures may adversely affect our business, financial condition and results of operations.
Our Board of Directors may, in its sole discretion, decrease the level of dividends relative to those paid in the past, including entirely discontinuing the payment of dividends.
Our Board may, in its sole discretion, decrease the level of dividends relative to those paid in the past, including entirely discontinuing the payment of dividends.
In October 2022, the Tax Court ruled in favor of CDM, granting a definitive suspension of all collection actions, instructing the SAT to lift all liens on CDM's fixed assets and bank accounts, and acknowledging that the $3.1 billion pesos assessment exceeds CDM's economic capacity.
In October 2022, the Tax Court ruled in favor of CDM, granting a definitive suspension of all collection actions, instructing the SAT to lift all liens on CDM's fixed assets and bank accounts, and acknowledging that the $3.5 billion pesos assessment exceeds CDM's economic capacity.
Instability in financial markets may impact our ability, or increase the cost, to enter into new credit agreements in the 22 future.
Instability in financial markets may impact our ability, or increase the cost, to enter into new credit agreements in the future.
Based on legal counsel from our tax advisory firm, we and our tax advisory firm have concluded that the provision remains reasonable as of October 31, 2024. ​ Despite our belief that we will prevail, there is no assurance of a favorable outcome or acceptable settlement terms.
Based on legal counsel from our tax advisory firm, we and our tax advisory firm have concluded that the provision remains reasonable as of October 31, 2025. ​ Despite our belief that we will prevail, there is no assurance of a favorable outcome or acceptable settlement terms.
The loss of any independent certifications could adversely affect our market position as an organic and natural products company, which could harm our business. ​ Regulatory and Related Risks ​ Environmental and other regulation of our business, including potential climate change regulation, could adversely impact us by increasing our production cost or restricting our ability to import certain products into the United States. ​ Climate change could increase both the frequency and severity of natural disasters that may affect our business operations.
The loss of any independent certifications could adversely affect our market position as an organic and natural products company, which could harm our business. ​ 17 Table of Contents Regulatory and Related Risks ​ Environmental and other regulation of our business, including potential climate change regulation, could adversely impact us by increasing our production cost or restricting our ability to import certain products into the United States. ​ Climate change could increase both the frequency and severity of natural disasters that may affect our business operations.
These restrictions prohibit or limit our ability to: incur indebtedness; grant liens on assets; enter into certain investments; consummate fundamental change transactions; engage in mergers or acquisitions or dispose of assets; enter into certain transactions with affiliates; make changes to our fiscal year; enter into certain restrictive agreements; and make certain restricted payments (including for dividends).
These restrictions prohibit or limit our ability to: incur indebtedness; grant liens on assets; enter into certain investments; consummate fundamental change transactions; engage in mergers or acquisitions or dispose of assets; enter into certain transactions with affiliates; make changes to our fiscal year; enter into certain restrictive agreements; and make certain restricted payments 21 Table of Contents (including for dividends).
Further, new members of management may have different perspectives on programs and opportunities for our business, which may cause us to focus on new business opportunities or reduce or change emphasis on our existing business programs. ​ Our success is dependent upon our ability to attract and retain qualified management and key personnel in a highly competitive environment.
Further, new members of management may have different perspectives on programs and opportunities for our business, which may cause us to focus on new business opportunities or reduce or change emphasis on our existing business programs. 15 Table of Contents Our success is dependent upon our ability to attract and retain qualified management and key personnel in a highly competitive environment.
There can be no assurance that we will accurately predict the outcomes of any audits, and the amounts ultimately paid upon resolution of audits could be materially different from the amounts previously included in our income tax expense and therefore could have a material impact on our tax provision, net income and cash flows.
There can be no assurance that we will accurately predict the outcomes of any audits, and the amounts ultimately paid upon resolution of audits could be materially different from the amounts previously included in our provision for income taxes and therefore could have a material impact on our tax provision, net income and cash flows.
To compete globally, we must be able to source, sell, and distribute globally. The overall availability and quality of our avocado source from which we produce our guacamole products can have a meaningful impact on sales and profitability. ​ A recall of our products could have a material adverse effect on our business.
To compete globally, we must be able to source, sell, and distribute globally. The overall availability and quality of our avocado source from which we produce our guacamole products can have a meaningful impact on sales and profitability. ​ 16 Table of Contents A recall of our products could have a material adverse effect on our business.
Our results of operations may be adversely affected if we are unable to comply with existing and modified regulations and are unable to secure avocado import permits in the future. ​ The FDA establishes, and continues to modify, regulations governing the production of prepared avocado products, such as the new Food Safety Modernization Act, which implements mandatory preventive controls for food facilities and compliance with mandatory produce safety standards.
Our results of operations may be adversely affected if we are unable to comply with existing and modified regulations and are unable to secure avocado import permits in the future. ​ 19 Table of Contents The FDA establishes, and continues to modify, regulations governing the production of prepared avocado products, such as the Food Safety Modernization Act, which implements mandatory preventive controls for food facilities and requires compliance with mandatory produce safety standards.
Like many companies, we publish an annual sustainability report covering topics including energy and emissions, fair labor, and sustainable agriculture. While we believe the disclosures in our sustainability reports and elsewhere concerning ESG are accurate, we could still be subject to litigation involving ESG claims.
Like many companies, we periodically publish sustainability reports covering topics including energy and emissions, fair labor, and sustainable agriculture. While we believe the disclosures in our sustainability reports and elsewhere concerning ESG are accurate, we could still be subject to litigation involving ESG claims.
Our ownership in unconsolidated subsidiaries, our loans/notes or advances to unconsolidated subsidiaries and other future debt or equity investments that we may make in unconsolidated subsidiaries, present risks and challenges that could have a material adverse effect on our business, financial position and results of operations. ​ Income/(loss) from unconsolidated entities includes our allocation of earnings or losses from our investments in Don Memo.
Our ownership in unconsolidated subsidiaries, our loans/notes or advances to unconsolidated subsidiaries and other future debt or equity investments that we may make in unconsolidated subsidiaries, present risks and challenges that could have a material adverse effect on our business, financial position and results of operations. ​ Net income (loss) from unconsolidated entities includes our allocation of earnings or losses from our investments in Agricola Don Memo, S.A. de C.V.
Internal Revenue Service, the SAT and other tax authorities. We regularly assess the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of our provision for taxes.
Internal Revenue Service, the Mexican Tax Administration Service (‘SAT”) and other tax authorities. We regularly assess the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of our provision for taxes.
If we were to incur substantial liabilities or if our business operations were interrupted for a substantial period of time, we could incur costs and suffer losses. Additionally, in the future, insurance coverage may not be available to us at commercially acceptable premiums, or at all. ​
If we were to incur substantial liabilities or if our business operations were interrupted for a substantial period of time, we could incur costs and suffer losses. Additionally, in the future, insurance coverage may not be available to us at commercially acceptable premiums, or at all. ​ Item 1B. Unresolved Staff Comments ​ None. ​
If consumer preferences trend negatively with respect to any one or more of our products, our sales volumes may decline as a result. ​ We rely on independent certifications for a number of our products. ​ We rely on independent third-party certifications, such as certifications of our products as “organic,” “Non-GMO” or “kosher,” to differentiate our products from others.
If consumer preferences trend negatively with respect to any one or more of our products, our sales volumes may decline as a result, which in turn may negatively impact our results of operations and financial condition. ​ We rely on independent certifications for a number of our products. ​ We rely on independent third-party certifications, such as certifications of our products as “organic,” “Non-GMO” or “kosher,” to differentiate our products from others.
Court rulings later removed the liens and restored access to funds. Subsequent legal actions, including an Annulment Suit and Injunction Suit, challenged the SAT's findings and process.
(“CDM”). Court rulings later removed the liens and restored access to funds. Subsequent legal actions, including a Nullity Trial and an Injunction Suit, challenged the SAT's findings and process.
As a result, prospective purchasers may decide to purchase other securities rather than shares of our common stock, which would reduce the demand for, and potentially result in a decline in the market price of, shares of our common stock. ​ Due to the seasonality of the business, our revenue and operating results may vary from quarter to quarter. ​ Our earnings may be affected by seasonal factors, including: ​ ● the availability, quality and price of raw materials (including, but not limited to, fruit and vegetable inputs); ● the timing and effects of ripening and perishability; ● our ability to process perishable raw materials in a timely manner; ● fixed overhead costs during off-season months; and ● variations in consumer demand and holiday timing. ​ Our earnings are sensitive to fluctuations in market prices and demand for our products. ​ We buy and sell fresh produce that can be subject to price volatility caused by weather conditions such as rainfall, hailstorms, windstorms, floods, droughts, wildfires and freezes, as well as by impacts from diseases and pests. ​ Fresh produce is highly perishable and generally must be brought to market and sold soon after harvest.
Higher interest rates may also affect consumer purchasing behavior for our fresh and prepared products. ​ Due to the seasonality of the business, our revenue and operating results may vary from quarter to quarter. ​ Our earnings may be affected by seasonal factors, including: ​ ● the availability, quality and price of raw materials (including, but not limited to, fruit and vegetable inputs); ● the timing and effects of ripening and perishability; ● our ability to process perishable raw materials in a timely manner; ● fixed overhead costs during off-season months; and ● variations in consumer demand and holiday timing. ​ Our earnings are sensitive to fluctuations in market prices and demand for our products. ​ We buy and sell fresh produce that can be subject to price volatility caused by weather conditions such as rainfall, hailstorms, windstorms, floods, droughts, wildfires and freezes, as well as by impacts from diseases and pests. ​ Fresh produce is highly perishable and generally must be brought to market and sold soon after harvest.
Food safety warnings, advisories, notices and recalls such as those administered by the FDA, CDC, other federal/state government agencies and/or suppliers of various agricultural products could also reduce demand and/or prices for some of our products.
Food safety warnings, advisories, notices and recalls such as those administered by the FDA, the U.S. Centers for Disease Control and Prevention, other federal and state government agencies and/or suppliers of various agricultural products could also reduce demand and/or prices for some of our 11 Table of Contents products.
Additionally, the tax authorities have determined that we owe our employees profit-sharing liability, totaling approximately $118 million Mexican pesos (approx. $5.9 million USD at October 31, 2024). ​ We filed an Administrative Appeal in August 2018, which was denied in March 2021, and liens were placed on CDM’s fixed assets and bank accounts.
Additionally, the tax authorities have determined that we owe our employees profit-sharing liability, totaling approximately $118 million Mexican pesos (approx. $6.4 million USD at October 31, 2025). ​ We filed an Administrative Appeal in August 2018, which was denied in March 2021, and liens were placed on the fixed assets and bank accounts of our wholly-owned subsidiary, Calavo de Mexico S.A. de C.V.
Our common stock price, like that of other companies, can be volatile and can be affected by many factors, including: ​ ● Our operating and financial performance and prospects; ● Announcements and public SEC filings we make about our business, financial performance and prospects; ● Announcements our customers or competitors make regarding their business, financial performance and prospects; ● Short-interest in our common stock, which may be significant from time-to-time; ● The depth and liquidity of the market for our common stock; ● Investor perception of us and the industry and markets in which we operate; ● Our inclusion in, or removal from, any equity market indices; ● Changes in earnings estimates or buy/sell recommendations by analysts; ● Whether or not we meet earnings estimates of analysts who follow our Company; ● Competitors in common markets; and ● General financial, domestic, international, economic, industry and other market trends or conditions. ​ Our performance may be impacted by general economic conditions or an economic downturn. ​ An overall decline in economic activity could adversely impact our business and financial results.
Our common stock price, like that of other companies, can be volatile and can be affected by many factors, including: ​ ● Our operating and financial performance and prospects; ● Announcements and public SEC filings we make about our business, financial performance and prospects; ● Announcements our customers or competitors make regarding their business, financial performance and prospects; ● Short-interest in our common stock, which may be significant from time-to-time; ● The depth and liquidity of the market for our common stock; ● Investor perception of us and the industry and markets in which we operate; ● Our inclusion in, or removal from, any equity market indices; ● Changes in earnings estimates or buy/sell recommendations by analysts; ● Whether or not we meet earnings estimates of analysts who follow our Company; ● Competitors in common markets; and 22 Table of Contents ● General financial, domestic, international, economic, industry and other market trends or conditions. ​ Holders of our common stock may not receive the level of dividends that we have paid in the past or any dividends at all. ​ Dividend payments are not mandatory or guaranteed and holders of our common stock do not have any legal right to receive, or require us to pay, dividends.
In addition, upon the occurrence of an event of default under the Credit Agreement, the lenders could elect to declare all amounts outstanding under the Credit Agreement, together with accrued interest, to be immediately due and payable.
Certain events of default under the Credit Agreement would prohibit us from paying dividends on our common stock. In addition, upon the occurrence of an event of default under the Credit Agreement, the lenders could elect to declare all amounts outstanding under the Credit Agreement, together with accrued interest, to be immediately due and payable.
An adverse result could materially impact our financial condition and potentially trigger defaults under our credit facility. ​ Our dispute with the Mexican tax authorities related to taxes receivable may have a material adverse effect on our results of operations and financial position. ​ As of October 31, 2024, and October 31, 2023, CDM's IVA receivables, net of our estimated provision for uncollectable amounts, totaled $48.7 million (976.0 million Mexican pesos) and $49.9 million (913.6 million Mexican pesos).
An adverse result could materially impact our financial condition and potentially trigger defaults under our credit facility. ​ Our dispute with the Mexican tax authorities related to taxes receivable may have a material adverse effect on our results of operations and financial position. ​ As of October 31, 2025, and October 31, 2024, CDM's value-added tax receivables (“IVA,” which refers to the Impuesto al Valor Agregado, the value-added tax in Mexico), net of our estimated provision for uncollectable amounts, totaled $55.8 million (1.0 billion Mexican pesos) and $48.7 million (976.0 million Mexican pesos).
In the United States, there is a significant possibility that some form of regulation will be enacted at the federal level to address the effects of climate change.
Such regulations apply or could apply in countries where we have interests or could have interests in the future. In the United States, there is a significant possibility that some form of regulation will be enacted at the federal level to address the effects of climate change.
The following risk factors should be read in conjunction with Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and related notes in Part II, Item 8, “Financial Statements and Supplementary Data” of this Form 10-K. ​ Business and Operational Risks ​ We may face challenges related to the transition and carve-out of operations following the divestiture of our Fresh Cut business, which could adversely impact our business, financial performance, and/or shareholder value .
The following risk factors should be read in conjunction with Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and related notes in Part II, Item 8, “Financial Statements and Supplementary Data” of this Form 10-K. ​ Business and Operational Risks ​ We may face challenges related to the transition and carve-out of operations following the divestiture of our Fresh Cut Business (formerly referred to as Renaissance Food Group, or “RFG”), which consisted of our fresh-cut fruits, fresh-cut vegetables and other prepared produce offerings, and which was completed in August 2024.
We, however, remain subject to risks related to the production of fresh and prepared foods. ​ 15 Industry Risks ​ We are subject to increasing competition that may adversely affect our business, financial condition and results of operations. ​ The fresh produce and prepared food markets in which we operate are highly competitive.
We closely monitor and audit the quality of our co-packers; and our co-packers are required to maintain insurance. ​ Industry Risks ​ We are subject to increasing competition that may adversely affect our business, financial condition and results of operations. ​ The fresh produce and prepared food markets in which we operate are highly competitive.
Customers also may respond to any price increase that we may implement by reducing their purchases from us, resulting in reduced sales of our products. If sales of our products to one or more of our largest customers decrease, the impact may have a material adverse effect on our business, financial condition, and results of operations.
If sales of our products to one or more of our largest customers decrease, the impact may have a material adverse effect on our business, financial condition, and results of operations.
We believe these customers make purchase decisions based on a combination of price, product quality, consumer demand, customer service performance, desired inventory levels and other factors that may be important to them at the time the purchase decisions are made.
Our customers generally make purchase decisions based on a combination of price, product quality, consumer demand, customer service performance, desired inventory levels, and other factors that may be important at the time purchase decisions are made. Changes in our customers' strategies or purchasing patterns, including a reduction in the number of brands they carry, may adversely affect our sales.
Future dividends 13 with respect to shares of our capital stock, if any, depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions (including restrictions in our Credit Agreement), business opportunities, provisions of applicable law (including certain provisions of the California Corporations Code) and other factors that our Board of Directors may deem relevant. ​ We have in the past had and may in the future incur substantial indebtedness which could restrict our ability to pay dividends and would impact our financing options and liquidity position. ​ Our ability to pay dividends is subject to restrictions contained in our Credit Agreement.
Future dividends with respect to shares of our capital stock, if any, depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions (including restrictions in our Credit Agreement), business opportunities, provisions of applicable law (including certain provisions of the California Corporations Code) and other factors that our Board may deem relevant. ​ Our performance may be impacted by general economic conditions or an economic downturn. ​ An overall decline in economic activity could adversely impact our business and financial results.
Any disruptions in our infrastructure could have a material adverse effect on our business, results of operations, and financial condition. ​ Failure to optimize our supply chain or disruption of our supply chain could have an adverse effect on our business, financial condition and results of operations. ​ In coordination with our suppliers, our ability to make, move and sell products is critical to our success.
For example, fuel, transportation, and packaging costs are significant components of our operating costs, and we may not be able to pass on to our customers any increases in costs of fuel, transportation, or packaging. ​ Failure to optimize our supply chain or disruption of our production and distribution capabilities could have an adverse effect on our business, financial condition, and results of operations. ​ In coordination with our suppliers, our ability to make, move and sell products is critical to our success.
Our dispute with Mexican tax authorities related to the 2013 Tax Assessment may have a material adverse effect on our results of operations and financial position. ​ In July 2018, a local office of the SAT issued a final tax assessment (the “2013 Assessment”) totaling approximately $2.6 billion Mexican pesos (which includes annual adjustments for inflation, and equals approx. $128.9 million USD at October 31, 2024) related to a fiscal 2013 tax audit.
If our effective tax rates were to increase, or if the ultimate determination of our taxes owed is for an amount in excess of amounts previously accrued, our financial condition, operating results and cash flows could be adversely affected. ​ 18 Table of Contents Our dispute with Mexican tax authorities related to the 2013 Tax Assessment may have a material adverse effect on our results of operations and financial position. ​ In July 2018, a local office of the SAT issued a final tax assessment (the “2013 Assessment”) totaling approximately $2.6 billion Mexican pesos (which included adjustments for interest, penalties, and inflation, and equals $141.2 million USD at October 31, 2025) related to a fiscal 2013 tax audit.
If our ESG-related data, processes and reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to our goals within the scope of ESG on a timely basis, or at all, our reputation, business, results of operations and financial condition could be adversely impacted. ​ 14 Human Capital Risks ​ We have recently transitioned new personnel into executive leadership positions and our future success will depend in part on our ability to manage this transition successfully.
If our ESG-related data, processes and reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to our goals within the scope of ESG on a timely basis, or at all, our reputation, business, results of operations and financial condition could be adversely impacted. ​ Risk Related to the Proposed Mergers ​ There is no assurance when or if the Mergers will be completed.
This amount has been adjusted for inflation as of October 31, 2024 to the amount of $3 billion Mexican pesos (approx. $148.8 million USD).
This amount has been adjusted since the final tax assessment for interest, penalties, and inflation as of October 31, 2025 to the amount of $3.5 billion Mexican pesos ($187.0 million USD).
For example, developing and acting on initiatives within the scope of ESG, and collecting, measuring and reporting ESG-related information and metrics can be costly, difficult and time consuming and is subject to evolving reporting standards, including the SEC’s proposed climate-related reporting requirements, and similar proposals by other international regulatory bodies.
For example, developing and acting on initiatives within the scope of ESG, and collecting, measuring and reporting ESG-related information and metrics, including new climate-related disclosure requirements in California such as Senate Bills 253 and 261, and climate-related proposals or requirements by the SEC and other regulators, can be costly, difficult and time consuming.
Such disruptions could adversely impact our ability to fulfill orders and interrupt other processes. ​ The loss of one or more of our largest customers, or a reduction in the level of purchases made by these customers, could negatively impact our sales and profits. ​ Sales to Walmart, our largest customer, amounted to approximately 12% of our total net sales in 2024.
Such disruptions could adversely impact our ability to fulfill orders and interrupt other processes. ​ The loss of one or more of our largest customers, or a reduction in the level of purchases made by these customers, could negatively impact our sales and profits. ​ We expect that a significant portion of our revenues will continue to be derived from a relatively small number of customers, with our top ten customers accounting for approximately 51%, 50%, and 60% of consolidated net sales in fiscal years 2025, 2024, and 2023, including our largest customer representing approximately 14%, 12%, and 12% of net sales in those years.
Changes in our customers' strategies or purchasing patterns, including a reduction in the number of brands they carry, may adversely affect our sales. Additionally, our customers may face financial or other difficulties which may impact their operations and cause them to reduce their level of purchases from us, which could adversely affect our results of operations.
Additionally, our customers may face financial or other difficulties which may impact their operations and cause them to reduce their level of purchases from us, which could adversely affect our results of operations. Customers also may respond to any price increase that we may implement by reducing their purchases from us, resulting in reduced sales of our products.
Moreover, there has been a broad range of proposed and promulgated state, national and international regulation aimed at reducing the effects of climate change. Such regulations apply or could apply in countries where we have interests or could have interests in the future.
Moreover, there has been a broad range of proposed and promulgated state, national and international regulation aimed at reducing the effects of climate change, including new climate-related disclosure requirements in California such as Senate Bills 253 and 261, and climate-related proposals or requirements by the SEC.
Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, could adversely affect our business, financial condition and results of operations, and may require additional resources to restore our supply chain ​ Disruption of the supply or reliability of transportation services and/or significant increases in the cost of these services could have an adverse effect on our business, financial condition and results of operations. ​ We use multiple forms of transportation to bring our products to market, including truck, ocean, and air-cargo.
Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, could adversely affect our business, financial condition and results of operations, and may require additional resources to restore our supply chain. ​ The acquisition of other businesses could pose risks to our business, financial condition and results of operations. ​ We intend to review and evaluate acquisition prospects that would complement our business.
A breach of any of these covenants, or failure to meet or maintain ratios or tests could result in a default under the Credit Agreement. Certain events of default under the Credit Agreement would prohibit us from paying dividends on our common stock.
Our ability to comply with the ratios or tests may be affected by events beyond our control, including prevailing economic, financial and industry conditions. A breach of any of these covenants, or failure to meet or maintain ratios or tests could result in a default under the Credit Agreement.
The full extent to which these factors will negatively affect our business and operations, results of operations, financial condition and cash flows will depend on future developments that are highly uncertain and cannot be predicted, including the scope, severity and duration of the Hamas-Israel and Russia-Ukraine conflicts, other areas of geopolitical tension around the world and any economic downturns and the actions taken by governmental authorities and other third parties in response. ​ Currency exchange fluctuations may impact the results of our operations. ​ Currency exchange rate fluctuations, depending upon the nature of the changes, may make our domestic-sourced products more expensive compared to foreign-grown products or may increase our cost of obtaining foreign-sourced products.
Any of these impacts could adversely affect our business, results of operations, financial condition, and cash flows, and may also exacerbate other risks described in this Annual Report. ​ Currency exchange fluctuations may impact the results of our operations. ​ Currency exchange rate fluctuations, depending upon the nature of the changes, may make our domestic-sourced products more expensive compared to foreign-grown products or may increase our cost of obtaining foreign-sourced products.
The Credit Agreement also contains a springing fixed charge coverage ratio financial covenant that is tested if the amount of the Revolving Loans available to borrow under the Credit Facility is less than 10% of the total revolving credit facility. ​ The Credit Agreement also contains certain affirmative covenants and customary events of default provisions, including, subject to thresholds and grace periods, among others, payment default, covenant default, cross default to other material indebtedness, and judgment default. 21 Our ability to comply with the ratios or tests may be affected by events beyond our control, including prevailing economic, financial and industry conditions.
Each of these limitations are subject to various conditions. The Credit Agreement also contains a springing fixed charge coverage ratio financial covenant that is tested if the amount of the Revolving Loans available to borrow under the Credit Facility is less than 10% of the total revolving credit facility.
Deterioration of our relationships with our key growers could adversely affect our Grown business in the U.S., which could have an adverse effect on our business, financial condition and results of operations. ​ Holders of our common stock may not receive the level of dividends that we have paid in the past or any dividends at all. ​ Dividend payments are not mandatory or guaranteed and holders of our common stock do not have any legal right to receive, or require us to pay, dividends.
Deterioration of our relationships with our key growers could adversely affect our Fresh business in the U.S., which could have an adverse effect on our business, financial condition and results of operations. ​ 13 Table of Contents We have in the past had and may in the future incur substantial indebtedness which could restrict our ability to pay dividends, and would impact our financing options and liquidity position. ​ Our ability to pay dividends is subject to restrictions contained in our Credit Agreement.
Moreover, our ongoing internal investigation, and cooperating with and responding to the SEC and the DOJ in connection with potential investigations they may undertake, as well as responding to any future U.S. or foreign governmental investigations or whistleblower lawsuits, have resulted in, and may continue to result in, substantial expenses, and have diverted and may continue to divert management’s attention from other business concerns, and could have a material adverse effect on our business and financial condition and growth prospects. 19 ​ International Risks ​ We work with international third-party suppliers and partners, and our financial results could suffer due to unfavorable international events or regulations. ​ We conduct a substantial amount of business with growers and customers who are located outside the United States.
Any determination that our controls or compliance procedures are inadequate, or any actual or alleged violation of anti-corruption laws, could adversely affect our business, financial condition, and results of operations. ​ International Risks ​ We work with international third-party suppliers and partners, and our financial results could suffer due to unfavorable international events or regulations. ​ We conduct a substantial amount of business with growers and customers who are located outside the United States.
Our policies mandate compliance with these anti-bribery laws.
Our policies mandate compliance with these anti-bribery laws. We operate in Mexico, which presents heightened risks relating to governmental and commercial corruption.
Restrictions on or disruptions to transportation, border controls, and closures—as well as other impacts on supply chains and distribution channels—could increase costs for raw materials and commodities, limit our ability to meet customer demand, or otherwise materially and adversely affect our business, financial condition, operating results, or cash flows. ​ Increases in interest rates could increase the cost of servicing our indebtedness and have an adverse effect on our results of operations, cash flows and stock price.
If we do not successfully optimize our cost structure, redeploy capital from the divested business, or maintain operating efficiency in our remaining segments, our business, financial condition, and results of operations could be adversely affected. ​ Increases in interest rates could adversely affect our business, financial condition, and results of operations. ​ Increases in interest rates could increase the cost of servicing our indebtedness and have an adverse effect on our results of operations and cash flows.
Other internal or government investigations or legal or regulatory proceedings, including lawsuits brought by private litigants, may also follow as a consequence. Violations of these laws may result in criminal or civil sanctions, which could disrupt our business and result in a material adverse effect on our reputation, business, results of operations or financial condition.
Failure to comply with these laws could result in civil or criminal penalties, disgorgement, injunctions, loss of licenses or permits, interruptions of business, reputational harm, and other sanctions, which could disrupt our business and result in a material adverse effect on our reputation, business, results of operations or financial condition. ​ We have been, and may in the future be, subject to internal investigations or inquiries from regulators, including the SEC, the Department of Justice (“DOJ”) or other governmental authorities, and responding to such investigations could require significant management time and expense.
We bear 10 the risk that the rates we are charged under the Credit Agreement and by lessors will increase faster than the earnings and cash flow of our business, which could reduce profitability, adversely affect our ability to service our obligations, or cause us to breach covenants contained in the Credit Agreement or leases, which could materially adversely affect our business, financial condition and results of operations.
If interest rates increase faster than our earnings and cash flow, our profitability and ability to service obligations under the Credit Agreement (as defined herein) could be adversely affected.
We also have various leases, and may enter into future equipment leases, with costs that increase as interest rates increase.
Our Credit Agreement (as defined elsewhere herein), which consists of a revolving credit facility and a term loan which both bears interest at a variable rate, and we also have various leases and may enter into future financing arrangements under which costs increase if interest rates rise.
Removed
The successful transition and carve-out of operations after the Fresh Cut business divestiture involves operational, strategic, and financial risks.
Added
The divestiture resulted in the removal of the Fresh Cut Business from our operations, requiring increased focus on our remaining Fresh and Prepared segments; these challenges could adversely impact our business, results of operations, or financial condition. ​ The divestiture of our Fresh Cut Business reduced the scale of our operations and requires us to focus on our remaining Fresh and Prepared segments.
Removed
These include the reallocation of resources and focus on our remaining business segments, which could divert management’s attention and impact efficiency and profitability. ​ Additionally, the reduced scale of our operations may lead to revenue fluctuations and challenges in managing fixed costs, potentially affecting our financial performance. ​ We also face risks associated with the allocation and use of proceeds from the divestiture.
Added
As a result, the loss of, or a significant reduction in purchases by, any of these customers could materially adversely affect our business, financial condition, and results of operations.
Removed
Investment decisions related to these proceeds may not yield the anticipated returns and could negatively impact shareholder value if not effectively deployed. ​ Any failure to address these risks could materially and adversely affect our business, financial condition, and results of operations. ​ Manufacturing and Supply Chain Disruption ​ Outbreaks of contagious diseases, sporadic pest challenges, and other adverse public health and environmental developments in the countries and states where we operate have had, and may continue to have, a material adverse effect on our business, financial condition, and operations.
Added
Any delay in completing the Mergers may substantially reduce the potential benefits that the Company and Mission expect to obtain from the Mergers and failure to complete the Mergers could negatively impact our stock price and our future business and financial results. ​ Completion of the Mergers is subject to the satisfaction or waiver of a number of conditions, as set forth in the Merger Agreement, including the approval by our shareholders and Mission’s shareholders, authorization for listing on Nasdaq of the shares of Mission’s common stock to be issued in connection with the First Merger, and other customary closing conditions.
Removed
These challenges can create operational disruptions in the manufacturing of our products and in the supply chains that support our ability to deliver products to consumers.
Added
There can be no assurance that we and Mission will be able to satisfy the closing conditions or that closing conditions beyond their control will be satisfied or waived.
Removed
The potential effects include negative impacts on the availability of key personnel; disruptions to our facilities or the facilities of our business partners, customers, suppliers, third-party service providers, or other vendors; and interruptions to domestic and global supply chains, distribution channels, and financial markets.
Added
If the conditions are not satisfied or waived, the Mergers may not occur or may not be completed within the expected timeframe, and we and Mission each may materially and adversely lose some or all of the potential benefits that we and Mission expect to achieve as a result of the Mergers and could result in additional transaction costs or other effects associated with uncertainty about the Mergers.
Removed
In June 2023, Calavo and certain subsidiaries entered into a credit agreement (the “Credit Agreement”) by and among Calavo, certain subsidiaries of Calavo as guarantors, and Wells Fargo Bank, National Association, as agent and lender. This credit facility currently bears interest at a variable rate, which will generally change as interest rates change.
Added
In addition, we or Mission may elect to terminate the Merger Agreement in certain other circumstances. ​ 14 Table of Contents If the Mergers are not completed for any reason, our ongoing businesses may be materially and adversely affected and, without realizing any of the benefits of having completed the Mergers, we would be subject to a number of risks, including the following: ​ ● We may experience negative reactions from the financial markets, including negative impacts on the trading price of our common stock, which could affect our ability to secure sufficient financing in the future on attractive terms (or at all) as a standalone company, and from their respective customers, vendors, regulators and employees, and if we are unable to obtain additional capital, we may need to cease operations, dissolve or seek protection of bankruptcy courts; ● We may be required to pay Mission a termination fee of $12.87 million or $15.02 million, depending on whether the applicable fee is calculated at 3.0% or 3.5% of transaction enterprise value if we fail to consummate the Mergers under specified circumstances in which the Mergers are not consummated. ● We will be required to pay certain expenses incurred in connection with the Mergers, whether or not the Mergers are completed; ● The Merger Agreement places certain restrictions on the operation of our business prior to the closing of the Mergers, and such restrictions, the waiver of which is subject to the consent of Mission, may prevent us from taking certain other specified actions or otherwise pursuing business opportunities during the pendency of the Mergers that we would have made, taken or pursued if these restrictions were not in place; and ● Matters relating to the Mergers (including integration planning) will require substantial commitments of time and resources by our management and the expenditure of significant funds in the form of fees and expenses, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to us as an independent company. ​ In addition, we could be subject to litigation related to any failure to complete the Mergers or related to any proceeding to specifically enforce our or Mission’s obligations under the Merger Agreement. ​ If any of these risks materialize, they may materially and adversely affect our business, financial condition, financial results and stock prices. ​ Combining Calavo and Mission may be more difficult, costly or time-consuming than expected, and Calavo and Mission may fail to realize the anticipated benefits of the Mergers. ​ An inability to realize the full extent of the anticipated benefits of the mergers and the other transactions contemplated by the Merger Agreement, as well as any delays encountered in the integration process and expected synergies, could have an adverse effect upon the revenues, levels of expenses and operating results of the combined business following the completion of the Mergers, which may adversely affect the value of the Mission common stock received by our shareholders in connection with the consummation of the Mergers.
Removed
Increases in interest rates may also affect consumer purchasing behavior, including for our fresh and prepared food products. Additionally, the trading price of our common stock may be affected by the dividend yield on our common stock relative to market interest rates.
Added
It is possible that the integration process could result in loss of key employees, the disruption of each company's ongoing business or inconsistencies in standards, controls, procedures and policies that adversely affect the companies' ability to maintain relationships with customers, growers, suppliers and employees or to achieve the anticipated benefits and cost savings of the Mergers. ​ Human Capital Risks ​ We have recently transitioned new personnel into executive leadership positions and our future success will depend in part on our ability to manage this transition successfully.
Removed
When market interest rates rise, the yield on our common stock may become less attractive relative to other available securities.
Added
(“Revolving Loans” refers to borrowings outstanding under the Company’s revolving credit facility pursuant to the Credit Agreement, which permits the Company to borrow, repay, and reborrow amounts from time to time, subject to availability, borrowing limits, and other customary terms and conditions). ​ The Credit Agreement also contains certain affirmative covenants and customary events of default provisions, including, subject to thresholds and grace periods, among others, payment default, covenant default, cross default to other material indebtedness, and judgment default.
Removed
For example, fuel, transportation, and packaging costs are significant components of our operating costs, and we may not be able to pass on to our customers any increases in costs of fuel, transportation, or packaging. ​ 11 We depend on our infrastructure to have sufficient capacity to handle our annual production needs. ​ If we lose machinery or facilities due to natural disasters or mechanical failure, we may not be able to operate at a sufficient capacity to meet our production needs and we may incur significant costs or delays in any effort to restore lost capacity.
Removed
Our production capacity for guacamole products is consolidated in a single manufacturing plant in the state of Michoacán, Mexico. Any significant production disruptions at this manufacturing site could result in a limitation of the availability of some or all our guacamole products.
Removed
Disruption to the timely supply of these services or dramatic increases in the cost of these services for any reason including availability of fuel for such services, labor disputes, governmental regulation, or governmental restrictions limiting specific forms of transportation could have an adverse effect on our business, financial condition and results of operations. ​ The acquisition of other businesses could pose risks to our business, financial condition and results of operations. ​ We intend to review acquisition prospects that would complement our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeItem 1C. Cybersecurity ​ Risk Management and Strategy Our cybersecurity risk management program is integrated with our overall enterprise risk management program and shares common methodologies, reporting channels and governance processes that apply across functions to other legal, compliance, strategic, operational, and financial risk areas.
Biggest changeItem 1C. Cybersecurity ​ Risk Management and Strategy Cybersecurity risk is managed within our broader enterprise risk management program , which includes common methodologies for identifying and evaluating legal, compliance, operational, financial, and strategic risks.
As of the date of this report, we are not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition that are required to be reported in this Form 10-K.
As of the date of this report and based on information currently known to us, Calavo is not aware of any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition. Additional information regarding cybersecurity-related risks is included in Item 1A.
Removed
This integration ensures a holistic approach to risk management, enabling us to address cybersecurity risks in the context of broader organizational risks. ​ We build and evaluate our cybersecurity risk management program based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF).
Added
Cybersecurity risks are evaluated in this context to ensure that potential impacts on operations, supply chain continuity, food safety systems, and financial reporting are appropriately considered. We assess our cybersecurity program using the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”) 2.0 as a reference model.
Removed
The NIST CSF offers a thorough set of guidelines and best practices to help us establish a strong cybersecurity posture. Utilizing the NIST CSF enables us to systematically identify, assess, and manage cybersecurity risks pertinent to our business operations.
Added
In fiscal 2025, we engaged an independent third-party cybersecurity firm to conduct a comprehensive gap assessment against NIST CSF 2.0 baseline practices. ​ Our assessment of our cybersecurity program has identified specific improvement opportunities in incident response capabilities, business continuity and disaster recovery planning, infrastructure modernization, and security monitoring.
Removed
However, it's important to highlight that using the NIST CSF as a guide does not imply that our cybersecurity program meets any specific technical standards, specifications, or requirements. ​ Our cybersecurity risk management program is grounded in a zero-trust framework and employs a multi-layered approach to ensure comprehensive protection.
Added
We are actively implementing a multi-year cybersecurity enhancement program to address these findings and strengthen our cybersecurity posture across all NIST CSF core functions: Govern, Identify, Protect, Detect, Respond, and Recover. ​ 23 Table of Contents Our cybersecurity program incorporates a multi-layered approach that includes the following elements: ● Employee awareness and training : We conduct regular phishing simulations, periodic information security briefings at management meetings, and mandatory annual training for all employees, including training supported by our KnowBe4 platform, to promote awareness of common and emerging threats. ● Security tools and technical safeguards : We maintain technical safeguards that include multi-factor authentication, endpoint detection and response technology, email filtering, encryption, and continuous monitoring of network activity across our environments. ● Third party risk management : We evaluate cybersecurity risks related to service providers, suppliers, and vendors with access to systems or data through questionnaires, contract provisions, and periodic reviews.
Removed
This approach includes: ● Awareness and Training for Employees: We conduct regular phishing campaigns, informational sessions at management meetings, and annual mandatory training with simulations of common cybersecurity threats.
Added
Certain third parties, including customers, require Calavo to complete their own cybersecurity assessments, and we likewise assess applicable cybersecurity practices for third party providers that support our operations. ● Vulnerability management : We use internal and external resources to conduct periodic scanning and assessments of our environment. We also periodically engage independent cybersecurity firms to perform penetration testing.
Removed
These initiatives aim to enhance employee awareness and preparedness against potential cyber threats. ● Security Tools and Technologies: We utilize advanced security tools and technologies, along with control policies and active review procedures, to strengthen authentication and access protection.
Added
Our most recent third-party penetration test was completed in 2024. Testing frequency is expected to increase as part of our cybersecurity program enhancement plan. ● Managed detection and incidence response : We use managed detection and response services and advanced endpoint monitoring tools to identify potential cybersecurity events.
Removed
This includes implementing multi-factor authentication, encryption, and continuous monitoring of network activities. ● Third-Party Risk Management: We have established a rigorous third-party risk management process and monitoring procedures for service providers, suppliers, and vendors who have access to critical systems and information.
Added
We maintain an incident response plan that includes procedures for detection, escalation, containment, investigation, and remediation. The plan identifies a cross-functional Security Incident Response Team. Calavo is in the process of expanding documented procedures, playbooks, and testing activities, consistent with recommendations from our third-party assessors.
Removed
This ensures that our partners adhere to our cybersecurity standards and do not introduce vulnerabilities into our environment. ● Risk and Vulnerability Management: Our risk and vulnerability management program encompasses both proactive and predictive defenses. We regularly assess, remediate, and validate our security measures to address emerging threats and vulnerabilities.
Added
We periodically review risks identified through assessments, monitoring activities, reports from employees, and input from third party experts. In prioritizing cybersecurity risks, we consider likelihood and potential severity, including possible impacts on operations, food safety systems, financial reporting systems, customers, employees, and suppliers.
Removed
This includes conducting vulnerability scans, penetration testing, and threat intelligence analysis. 23 ● Managed Detection and Incident Response: We employ advanced endpoint protection and managed detection and response services to quickly identify and respond to potential security incidents. Our incident response team is equipped to handle various types of cyber threats and minimize their impact on our operations.
Added
We are implementing enhanced business continuity and disaster recovery capabilities, including multi-region architecture for critical cloud-hosted systems, to reduce recovery time objectives and improve organizational resilience to cyber incidents and other disruptions.
Removed
In evaluating the risks identified as a part of the annual assessment process, our information technology team considers the likelihood and severity of the respective risk and the potential impact of the risk, including any potential impact on our customers and our employees. These risks are then prioritized and monitored by the information technology team.
Added
Risk Factors of this Form 10-K. Governance ​ The Board oversees cybersecurity risk as part of its overall risk oversight responsibilities. The Audit Committee receives periodic updates from our Director of Information Technology regarding cybersecurity risks, threat activity, program maturity, significant projects, and the status of program enhancements.
Removed
We conduct periodic testing of software, hardware, defensive capabilities, and other information security systems to assess our cybersecurity readiness and maturity of the cybersecurity program. Tests are conducted by the information technology team and reputable third-party consultants and auditors. In developing and evaluating the testing procedures, we consider both our individual risks and industry standards.
Added
These updates occur at least quarterly, with additional updates provided as needed based on significant developments or incidents. Management is responsible for the implementation and operation of our cybersecurity program. Our Director of Information Technology has primary responsibility for day-to-day information security management and is supported by internal information technology personnel and external cybersecurity service providers.
Removed
The cybersecurity risk management program includes an incident response plan with a cross-functional team comprised of designated members of the information technology department, senior management, and other appropriate individuals. The team is responsible for assessing and managing the cybersecurity incident response process, as outlined within the incident response plan, and taking necessary corrective actions to mitigate and eliminate the issue.
Added
Our Director of Information Technology has more than 33 years of progressive experience in information technology, including over 24 years supporting technology and operational systems in the agricultural industry. He holds a Bachelor of Business Administration from De La Salle University in the Philippines and has maintained professional certifications as a Certified Novell Engineer and a Microsoft Certified Systems Engineer.
Removed
For further discussion of the risks associated with cybersecurity incidents and potential impact on us, see the cybersecurity risk factor within “Item 1A. Risk Factors” in this Form 10-K. Governance ​ The information technology department, led by our Director of Information Technology & Services (“IT Director”), is responsible for our cybersecurity program.
Added
The information technology organization includes personnel with experience in systems engineering, infrastructure management, network operations, and incident response.
Removed
The IT Director, along with a third party provider with significant cybersecurity experience, manages information security, infrastructure, and compliance. This collaboration ensures that our cybersecurity practices are aligned with industry standards and best practices. ​ The Board of Directors considers cybersecurity risk as part of its overall risk oversight function.
Added
Management provides regular updates to the Audit Committee regarding significant cybersecurity developments, including results of internal and third-party assessments, implementation progress on enhancement initiatives, and key performance metrics. 24 Table of Contents A cross-functional cybersecurity governance committee has been established to oversee the implementation of the cybersecurity enhancement program and provide executive-level coordination across business functions impacted by cybersecurity initiatives. ​ Management provides regular updates to the Audit Committee regarding significant cybersecurity developments, including results of internal and third-party assessments, implementation progress on enhancement initiatives, and key performance metrics. ​
Removed
The Audit Committee receives briefings from the IT Director regarding our cybersecurity risk management program at least annually. These briefings include updates on our cybersecurity risks and threats, the status of projects to strengthen the information security systems, assessments of the information security program, and the emerging cybersecurity threat landscape. ​

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSee the following table for a summary of our locations: 24 ​ United States Locations: ​ Packinghouses: ​ ​ ​ ​ ​ Leased or Owned: City State Description ​ Owned ​ Santa Paula ​ California ​ Primarily handles fresh avocados. The facility was purchased in 1955 and has been improved in capacity and efficiency since then.
Biggest changeThe following table summarizes our principal operating locations: ​ United States Locations: ​ Packinghouses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased or Owned: ​ ​ ​ City ​ ​ ​ State ​ ​ ​ Description ​ Owned ​ Santa Paula ​ California ​ Used by our Fresh segment. Primarily handles fresh avocados.
We believe that the annual capacity of this facility will be sufficient to handle its forecasted annual production needs. ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ Green Cove Springs ​ Florida ​ Primarily ripens, sorts, packs and ships fresh avocados and stores and ships prepared guacamole.
Primarily ripens, sorts, packs, and ships fresh avocados and stores and ships prepared guacamole. We believe that the annual capacity of this facility will be sufficient to handle its forecasted annual production needs. ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ Green Cove Springs ​ Florida ​ Used by both our Fresh and Prepared segments.
We believe that the annual capacity will be sufficient to handle its forecasted annual production needs. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 25 Mexico Locations: ​ Packinghouses and Processing Facility: ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased or Owned: ​ City ​ State ​ Description ​ Owned ​ Uruapan ​ Michoacan ​ Our guacamole processing facility produces our guacamole products.
We believe the annual capacity of this facility will be sufficient to handle its forecasted annual production needs. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mexico Locations: ​ Packinghouses and Processing Facility: ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased or Owned: ​ City ​ State ​ Description ​ Owned ​ Uruapan ​ Michoacan ​ Our guacamole processing facility produces our Prepared segment guacamole products.
We believe that the annual capacity of this facility will be sufficient to handle its forecasted annual production needs. ​ ​ ​ ​ ​ ​ ​ ​ ​ Owned ​ Uruapan ​ Michoacan ​ Primarily handles fresh avocados. The facility was built in 1985 and has been significantly and continually improved in capacity and efficiency since then.
We believe that the annual capacity of this facility will be sufficient to handle its forecasted annual production needs. ​ ​ ​ ​ ​ ​ ​ ​ ​ Owned ​ Uruapan ​ Michoacan ​ Used by our Fresh segment. Primarily handles fresh avocados. The facility, built in 1985, has been significantly improved in capacity and efficiency.
We believe that the annual capacity of this facility will be sufficient to process its forecasted annual production needs. ​ ​ ​
We believe that its annual capacity will be sufficient to process its forecasted annual production needs. ​ ​ ​
We believe that the annual capacity of this facility will be sufficient to process its forecasted annual production needs. ​ ​ ​ ​ ​ ​ ​ ​ ​ Owned ​ Ciudad Guzman ​ Jalisco ​ Opened in the third quarter of 2017, this facility primarily handles fresh avocados.
We believe that its annual capacity will be sufficient to process its forecasted annual production needs. ​ ​ ​ ​ ​ ​ ​ ​ ​ Owned ​ Ciudad Guzman ​ Jalisco ​ Used by our Fresh segment. Opened in 2017, this facility primarily handles fresh avocados.
We believe that the annual capacity of this facility will be sufficient to handle its forecasted annual production needs. ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ Hilo ​ Hawaii ​ Primarily sorts, packs, and ships papayas.
Primarily ripens, sorts, packs, and ships fresh avocados and stores and ships prepared guacamole. We believe that the annual capacity of this facility will be sufficient to handle its forecasted annual production needs. ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ Hilo ​ Hawaii ​ Used by our Fresh segment. Primarily sorts, packs, and ships papayas.
We sold this facility in 2019 and leased back a portion of it. ​ Operating and Distributing Facilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased or Owned: ​ City ​ State ​ Description ​ Owned ​ Santa Paula ​ California ​ Primarily ripens, sorts, packs and ships fresh avocados.
Calavo sold this facility in 2019 and leased back a portion of it. ​ 25 Table of Contents ​ Operating and Distributing Facilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased or Owned: ​ City ​ State ​ Description ​ Owned ​ Santa Paula ​ California ​ Used by our Fresh segment.
We believe that the annual capacity of this facility will be sufficient to pack and ripen, if necessary, its expected annual volume of avocados and other fresh products delivered to us. ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ Swedesboro ​ New Jersey ​ Primarily ripens, sorts, packs, and ships fresh avocados.
Primarily ripens, sorts, packs, and ships fresh avocados and other fresh products. We believe the annual capacity of this facility will be sufficient to support expected annual volumes. ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ Swedesboro ​ New Jersey ​ Used by both our Fresh and Prepared segments. Primarily ripens, sorts, packs, and ships fresh avocados.
We believe that the annual capacity of this facility will be sufficient to handle its forecasted annual production needs. ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ Garland ​ Texas ​ Primarily ripens, sorts, packs and ships fresh avocados. Additionally, it also serves to store and ship prepared guacamole products .
Also stores and ships certain other fresh products and prepared guacamole. We believe that the annual capacity of this facility will be sufficient to handle its forecasted annual production needs. ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ Garland ​ Texas ​ Used by both our Fresh and Prepared segments.
Item 2. Properties ​ Our corporate headquarters is located in Santa Paula, California, in a leased building. Our RFG Business leased a corporate office in Rancho Cordova, California, which the lease expired in November 2024. We also operate numerous facilities across the United States and maintain three facilities in Mexico.
Item 2. Properties ​ Our corporate headquarters is located in Santa Paula, California, in a leased building. We also operate facilities across the United States and maintain three owned facilities in Mexico that support our Fresh and / or Prepared segments.
We believe that the annual capacity of this facility will be sufficient to handle its forecasted annual production needs. ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ Temecula ​ California ​ Primarily ripens, sorts, packs and ships fresh avocados. We sort and pack certain other fresh products as well.
This facility was purchased in 1955 and has improved in capacity and efficiency over time. We believe that the annual capacity of this facility will be sufficient to handle its forecasted annual production needs. ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased ​ Temecula ​ California ​ Used by our Fresh segment.
Removed
We sort and pack certain other fresh products as well.
Added
Primarily ripens, sorts, packs, and ships fresh avocados, and also handles certain other fresh products.
Removed
Additionally, it also serves to store and ship certain other fresh products, as well as prepared foods and prepared guacamole products.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+5 added−1 removed0 unchanged
Biggest changeOn October 30, 2024, we paid a dividend of $0.20 per share, or an aggregate of $3.6 million, to shareholders of record on October 2, 2024. ​ 26 Shareholder Return Performance Graph ​ The following graph compares the performance of our common stock with the performance of the Nasdaq Market Index and a Peer Group of major diversified companies in our industry for approximately the 60-month period beginning October 31, 2019 and ending October 31, 2024.
Biggest changeOn October 29, 2025, we paid a dividend of $0.20 per share, or an aggregate of $3.6 million, to shareholders of record on September 30, 2025. On December 31, 2025, our Board declared a cash dividend of $0.20 per share, or an aggregate of $3.6 million.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ Our common stock trades on The Nasdaq Global Select Market under the symbol "CVGW". ​ Shareholders ​ As of December 31, 2024, there were 735 stockholders of record of our common stock. ​ Dividend Policy ​ Our dividend policy has historically provided for an annual dividend payment, as determined by the Board of Directors.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ Our common stock trades on The Nasdaq Global Select Market under the symbol "CVGW". ​ Shareholders ​ As of January 6, 2026, there were 710 shareholders of record of our common stock. ​ Dividend Policy ​ Our dividend policy has historically provided for an annual dividend payment, as determined by the Board.
In November 2022, we announced that we would begin declaring and paying dividends quarterly rather than annually, as had been our practice. ​ On January 31, 2024, we paid a dividend of $0.10 per share, or an aggregate of $1.8 million, to shareholders of record on January 26, 2024.
In November 2022, we announced that we would begin declaring and paying dividends on a quarterly basis rather than annually. ​ On January 31, 2025, we paid a dividend of $0.20 per share, or an aggregate of $3.6 million, to shareholders of record on January 10, 2025.
On April 29, 2024, we paid a dividend of $0.10 per share, or an aggregate of $1.8 million, to shareholders of record on April 1, 2024. On July 30, 2024, we paid a dividend of $0.10 per share, or an aggregate of $1.8 million, to shareholders of record on July 2, 2024.
On April 29, 2025, we paid a dividend of $0.20 per share, or an aggregate of $3.6 million, to shareholders of record on April 1, 2025. On July 28, 2025, we paid a dividend of $0.20 per share, or an aggregate of $3.6 million, to shareholders of record on June 30, 2025.
In making this comparison, we have assumed an investment of $100 in Calavo Growers, Inc. common stock, the Nasdaq Market Index, the Peer Group Index as of October 31, 2019. We have also assumed the reinvestment of all dividends.
The comparison assumes that $100 was invested in Calavo Growers, Inc. common stock, the Nasdaq Composite Index, and the Peer Group Indices on October 31, 2020, and that all dividends were reinvested.
Removed
Our Peer Group Index includes the companies of: Andersons, Inc., B&G Foods, Inc., Boston Beer Company, Inc., Fresh Del Monte Produce, Inc., Hain Celestial Group, Inc., J&J Snack Foods, Corp., John B Sanfilippo & Son, Inc., and Landec, Corp. ​ ​ 10/19 10/20 10/21 10/22 10/23 10/24 Calavo Growers, Inc. 100.00 78.41 47.72 42.22 31.52 33.69 NASDAQ Composite 100.00 132.84 189.96 135.70 160.11 227.14 Peer Group 100.00 152.09 129.09 95.65 90.11 87.27 ​ ​ ​
Added
This dividend will be paid on January 30, 2026, to shareholders of record on January 13, 2026. ​ ​ We currently expect that we will continue to pay comparable cash dividends in the future. ​ Repurchases of Equity Securities ​ In March 2025, our Board authorized a stock repurchase program of up to $25 million.
Added
No shares have been repurchased to date under this program. ​ Shareholder Return Performance Graph ​ The following graph compares the cumulative total return of our common stock with the cumulative total return of the Nasdaq Composite Index, our previously used peer group (the “Old Peer Group”) and our current peer group (the “New Peer Group” and, together with the Old Peer Group, the “Peer Group Indices”) for the five-year period from October 31, 2020 to October 31, 2025.
Added
The Peer Group Indices were selected based on companies that management believes are generally comparable to the Company in terms of business characteristics, operating model, end markets served, and market capitalization, and that operate primarily within the food and consumer packaged goods industries. ​ Beginning in fiscal 2025, the Company revised its peer group to better reflect its current business focus and industry comparability.
Added
As a result, the graph below presents both the Company’s Old Peer Group and its New Peer Group to facilitate period-to-period comparability. ​ 27 Table of Contents Our Old Peer Group includes the following companies: Andersons, Inc., B&G Foods, Inc., Boston Beer Company, Inc., Fresh Del Monte Produce, Inc., Hain Celestial Group, Inc., J&J Snack Foods, Corp., John B Sanfilippo & Son, Inc., and Lifecore Biomedical, Inc.
Added
(f/k/a Landec Corp.). ​ Our New Peer Group includes the following companies: John B Sanfilippo & Son, Inc., Mission Produce, Inc., Bridgford Foods Corporation, Utz Brands, Inc., The Vita Coco Company, Inc., MGP Ingredients, Inc., The Duckhorn Portfolio, Inc., Westrock Coffee Company, LLC, BRC, Inc., Tootsie Roll Industries, Inc., Vital Farms, Inc., SunOpta, Inc., and Limoneira Company. ​ ​ 10/20 10/21 10/22 10/23 10/24 10/25 Calavo Growers, Inc. 100.00 60.85 53.83 40.18 42.94 37.04 NASDAQ Composite 100.00 142.99 102.15 120.52 170.98 225.69 New Peer Group 100.00 104.48 113.90 91.42 100.16 89.97 Old Peer Group ​ 100.00 85.00 63.18 59.54 57.65 41.92 ​ ​ ​

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

73 edited+48 added−49 removed15 unchanged
Biggest changeWe are actively working to strengthen relationships with major foodservice companies, expand partnerships with retail and industrial clients, and develop strategic alliances to broaden our market reach and increase product visibility. ​ The following tables set forth sales by product category and sales allowances, by segment (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended October 31, 2024 ​ Year Ended October 31, 2023 ​ ​ ​ Grown ​ Prepared ​ Total ​ Grown ​ Prepared ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Avocados ​ ​ $ 534,413 ​ $ — ​ $ 534,413 ​ $ 466,385 ​ $ — ​ $ 466,385 ​ Tomatoes ​ ​ 54,660 ​ — ​ 54,660 ​ 54,669 ​ — ​ 54,669 ​ Papayas ​ ​ 11,573 ​ — ​ 11,573 ​ 10,432 ​ — ​ 10,432 ​ Other fresh income ​ ​ 8 ​ — ​ 8 ​ 100 ​ — ​ 100 ​ Guacamole ​ ​ ​ ​ ​ ​ 71,468 ​ ​ 71,468 ​ ​ — ​ ​ 73,068 ​ ​ 73,068 ​ Salsa ​ ​ — ​ — ​ — ​ — ​ 796 ​ 796 ​ Total gross sales ​ ​ 600,654 ​ 71,468 ​ 672,122 ​ 531,586 ​ 73,864 ​ 605,450 ​ Less sales allowances ​ ​ (3,030) ​ ​ (7,548) ​ (10,578) ​ (4,190) ​ ​ (7,158) ​ (11,348) ​ Net sales ​ ​ $ 597,624 ​ $ 63,920 ​ $ 661,544 ​ $ 527,396 ​ $ 66,706 ​ $ 594,102 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended October 31, 2023 ​ Year Ended October 31, 2022 ​ ​ ​ Grown ​ Prepared ​ Total ​ Grown ​ Prepared ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Avocados ​ ​ $ 466,385 ​ $ — ​ $ 466,385 ​ $ 645,944 ​ $ — ​ $ 645,944 Tomatoes ​ ​ 54,669 ​ — ​ 54,669 ​ 45,223 ​ — ​ 45,223 Papayas ​ ​ 10,432 ​ — ​ 10,432 ​ 11,422 ​ — ​ 11,422 Other fresh income ​ ​ 100 ​ — ​ 100 ​ 123 ​ — ​ 123 Guacamole ​ ​ ​ — ​ ​ 73,068 ​ ​ 73,068 ​ ​ — ​ ​ 77,143 ​ ​ 77,143 Salsa ​ ​ — ​ 796 ​ 796 ​ — ​ 1,860 ​ 1,860 Total gross sales ​ ​ 531,586 ​ 73,864 ​ 605,450 ​ 702,712 ​ 79,003 ​ 781,715 Less sales allowances ​ ​ (4,190) ​ (7,158) ​ (11,348) ​ (4,507) ​ ​ (7,517) ​ (12,024) Net sales ​ ​ $ 527,396 ​ $ 66,706 ​ $ 594,102 ​ $ 698,205 ​ $ 71,486 ​ $ 769,691 ​ ​ 35 The following table summarizes our net sales by business segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ Change ​ 2023 ​ Change ​ 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales: ​ ​ ​ ​ ​ Grown ​ ​ $ 597,624 ​ 13 % $ 527,396 ​ (24) % $ 698,205 ​ Prepared ​ ​ 63,920 ​ (4) % 66,706 ​ (7) % 71,486 ​ Total net sales ​ ​ $ 661,544 ​ 11 % $ 594,102 ​ (23) % $ 769,691 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As a percentage of sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grown ​ ​ 90.3 % ​ ​ 88.8 % ​ ​ 90.7 % Prepared ​ ​ 9.7 % ​ ​ 11.2 % ​ ​ 9.3 % ​ ​ ​ 100 % ​ ​ 100 % ​ ​ 100 % ​ Summary ​ Net sales for the year ended October 31, 2024, compared to the corresponding period in fiscal 2023, increased by $67.4 million, or approximately 11%.
Biggest changeWe are actively working to strengthen relationships with major foodservice companies, expand partnerships with retail and industrial clients, and develop strategic alliances to broaden our market reach and increase product visibility. ​ The following tables set forth sales by product category and sales allowances, by segment (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended October 31, 2025 ​ Year ended October 31, 2024 ​ ​ ​ Fresh ​ Prepared ​ Total ​ Fresh ​ Prepared ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Avocados ​ $ 530,707 ​ $ — ​ $ 530,707 ​ $ 534,413 ​ $ — ​ $ 534,413 ​ Tomatoes ​ 35,492 ​ — ​ 35,492 ​ 54,660 ​ — ​ 54,660 ​ Papayas ​ 12,470 ​ — ​ 12,470 ​ 11,573 ​ — ​ 11,573 ​ Other fresh income ​ 96 ​ — ​ 96 ​ 8 ​ — ​ 8 ​ Guacamole ​ — ​ 77,130 ​ 77,130 ​ — ​ 71,468 ​ 71,468 ​ Total gross sales ​ ​ 578,765 ​ ​ 77,130 ​ ​ 655,895 ​ ​ 600,654 ​ ​ 71,468 ​ ​ 672,122 ​ Less: sales allowances ​ (2,221) ​ (5,240) ​ (7,461) ​ (3,030) ​ (7,548) ​ (10,578) ​ Net sales ​ $ 576,544 ​ $ 71,890 ​ $ 648,434 ​ $ 597,624 ​ $ 63,920 ​ $ 661,544 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended October 31, 2024 ​ Year ended October 31, 2023 ​ ​ ​ Fresh ​ Prepared ​ Total ​ Fresh ​ Prepared ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Avocados ​ $ 534,413 ​ $ — ​ $ 534,413 ​ $ 466,385 ​ $ — ​ $ 466,385 ​ Tomatoes ​ 54,660 ​ — ​ 54,660 ​ 54,669 ​ — ​ 54,669 ​ Papayas ​ 11,573 ​ — ​ 11,573 ​ 10,432 ​ — ​ 10,432 ​ Other fresh income ​ 8 ​ — ​ 8 ​ 100 ​ — ​ 100 ​ 34 Table of Contents Guacamole ​ ​ — ​ ​ 71,468 ​ ​ 71,468 ​ ​ — ​ ​ 73,068 ​ ​ 73,068 ​ Salsa ​ — ​ — ​ — ​ — ​ 796 ​ 796 ​ Total gross sales ​ ​ 600,654 ​ ​ 71,468 ​ ​ 672,122 ​ ​ 531,586 ​ ​ 73,864 ​ ​ 605,450 ​ Less: sales allowances ​ ​ (3,030) ​ ​ (7,548) ​ ​ (10,578) ​ ​ (4,190) ​ ​ (7,158) ​ ​ (11,348) ​ Net sales ​ $ 597,624 ​ $ 63,920 ​ $ 661,544 ​ $ 527,396 ​ $ 66,706 ​ $ 594,102 ​ ​ The following table summarizes our net sales by business segment (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ Change ​ 2024 ​ Change ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fresh ​ $ 576,544 ​ (4) % $ 597,624 ​ 13 % $ 527,396 ​ Prepared ​ 71,890 ​ 12 % 63,920 ​ (4) % 66,706 ​ Total net sales ​ $ 648,434 ​ (2) % $ 661,544 ​ 11 % $ 594,102 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As a percentage of sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fresh ​ 89 % ​ ​ 90 % ​ ​ 89 % Prepared ​ 11 % ​ ​ 10 % ​ ​ 11 % ​ ​ 100 % ​ ​ 100 % ​ ​ 100 % ​ Summary ​ Net sales for the year ended October 31, 2025, decreased by $13.1 million, or approximately 2 percent, compared to fiscal 2024.
The average avocado sales price per carton increased 24% compared to the prior year period. The increase in the sales price per carton was mainly due higher market values for avocados.
The average avocado sales price per carton increased 24% compared to the prior year period. The increase in the sales price per carton was mainly due to higher market values for avocados.
The tomato is the fourth most popular fresh-market vegetable (though a fruit scientifically speaking, tomatoes are often considered a vegetable) behind potatoes, lettuce, and onions in the U.S. Over the past few decades, per capita consumption of 34 tomatoes has been on the rise due primarily to the enduring popularity of salads, salad bars, and submarine sandwiches.
The tomato is the fourth most popular fresh-market vegetable (though a fruit scientifically speaking, tomatoes are often considered a vegetable) behind potatoes, lettuce, and onions in the U.S. Over the past few decades, per capita consumption of tomatoes has been on the rise due primarily to the enduring popularity of salads, salad bars, and submarine sandwiches.
Fiscal 2023: ​ For the year ended October 31, 2024, compared to the prior year, our Grown products segment gross profit increased by $4.7 million, or 9%. Gross profit percentages for avocados remained strong at approximately 10% for both fiscal 2024 and 2023. However, tomato gross profits declined to $3.6 million from $4.5 million.
Fiscal 2023: ​ For the year ended October 31, 2024, compared to the prior year, our Grown (now Fresh) products segment gross profit increased by $4.7 million, or 9%. Gross profit percentages for avocados remained strong at approximately 10% for both fiscal 2024 and 2023. However, tomato gross profits declined to $3.6 million from $4.5 million.
Perhaps of greater importance has been the introduction of new and improved tomato varieties, the increased development of hot-house grown tomatoes (such as those grown by our ADM affiliate), heightened consumer interest in a wider range of tomatoes, a surge of new immigrants who eat vegetable-intensive diets and expanding national emphasis on health and nutrition. ​ Papayas have become more popular as consumption in the U.S. has more than doubled in the past decade.
Perhaps of greater importance has been the introduction of new and improved tomato varieties, the increased development of hot-house grown tomatoes (such as those grown by our Don Memo affiliate), heightened consumer interest in a wider range of tomatoes, a surge of new immigrants who eat vegetable-intensive diets and expanding national emphasis on health and nutrition. ​ Papayas have become more popular as consumption in the U.S. has more than doubled in the past decade.
Actual results may materially differ from these estimates under different assumptions or conditions as additional information becomes available in future periods. ​ Management has discussed the development and selection of critical accounting estimates with the Audit Committee of the Board of Directors and the Audit Committee has reviewed our disclosure relating to critical accounting estimates in this Annual Report. ​ We believe the following are the critical judgments and estimates used in the preparation of our consolidated financial statements. ​ 30 As discussed in Notes 7 and 14 in the consolidated financial statements, our accounting for Mexican tax matters, including the 2013 tax assessment and IVA receivables, involves significant judgment and estimation uncertainty.
Actual results may materially differ from these estimates under different assumptions or conditions as additional information becomes available in future periods. ​ Management has discussed the development and selection of critical accounting estimates with the Audit Committee of the Board of Directors, and the Audit Committee has reviewed our disclosure relating to critical accounting estimates in this Annual Report. ​ We believe the following are the critical judgments and estimates used in the preparation of our consolidated financial statements. ​ 2013 Tax Assessment and IVA Receivables ​ 31 Table of Contents As discussed in Notes 7 and 14 in the consolidated financial statements, our accounting for Mexican tax matters, including the 2013 tax assessment and IVA receivables, involves significant judgment and estimation uncertainty.
The increase in Grown product sales during the year ended October 31, 2024 was primarily related to higher sales prices for avocados, partially offset by a decrease in sales of tomatoes. ​ Sales of avocados increased $68.0 million, or 15%, for the year ended October 31, 2024, compared to the prior year period.
The increase in Fresh product sales during the year ended October 31, 2024 was primarily related to higher sales prices of avocados, partially offset by a decrease in sales of tomatoes. ​ Sales of avocados increased $68.0 million, or 15%, for the year ended October 31, 2024, compared to the prior year period.
We believe that the incremental funding for promotional and advertising programs in the U.S. will have a positive long-term impact on average selling prices and will benefit our avocado business. During fiscal 2024, 2023, and 2022, we remitted approximately $2.0 million, $0.5 million, and $1.5 million, to the California Avocado Commission on behalf of avocado growers.
We believe that the incremental funding for promotional and advertising programs in the U.S. will have a positive long-term impact on average selling prices and will benefit our avocado business. During fiscal 2025, 2024, and 2023, we remitted approximately $0.2 million, $2.0 million, and $0.5 million to the California Avocado Commission on behalf of avocado growers.
These discrete items were primarily related the lack of deductibility of certain Mexican tax expenses.
These discrete items were primarily related to the lack of deductibility of certain Mexican tax expenses.
Additionally, we remitted approximately $5.6 million, $8.0 million, and $8.1 million to the Hass Avocado Board in support of these activities. Similarly, in 2013, Avocados From Mexico (AFM) was formed as the marketing arm of the Mexican Hass Avocados Importers Association (MHAIA) and the Association of Growers and Packers of Avocados From Mexico (APEAM).
Additionally, we remitted approximately $4.9 million, $5.6 million, and $8.0 million to the Hass Avocado Board in support of these activities. Similarly, in 2013, Avocados From Mexico (AFM) was formed as the marketing arm of the Mexican Hass Avocados Importers Association (MHAIA) and the Association of Growers and Packers of Avocados From Mexico (APEAM).
Fiscal 2023: ​ Net sales for the Grown products business increased by approximately $70.2 million, or 13%, for the year ended October 31, 2024 compared to the prior year period.
Fiscal 2023: ​ Net sales for the Fresh products business increased by approximately $70.2 million, or 13%, for the year ended October 31, 2024 compared to the prior year period.
Additionally, we also believe that avocados and avocado based products will further penetrate other markets that we currently operate in as interest in avocados continues to expand. ​ In October 2002, the USDA established the Hass Avocado Board to promote the sale of Hass avocados in the U.S. market.
Additionally, we also believe that avocados and avocado based products will further penetrate other markets that we currently operate in as interest in avocados continues to expand. 33 Table of Contents ​ In October 2002, the USDA established the Hass Avocado Board to promote the sale of Hass avocados in the U.S. market.
This decrease in Prepared product sales during the year ended October 31, 2024 was primarily related to a change in sales mix. ​ Net sales for guacamole products decreased $2.0 million, or 3%, for the year ended October 31, 2024 compared to the corresponding period in fiscal 2024.
This decrease in Prepared product sales during the year ended October 31, 2024 was primarily related to a change in sales mix. ​ Net sales for guacamole products decreased $2.0 million, or 3%, for the year ended October 31, 2024, compared to fiscal 2023.
These discrete items were primarily related the lack of deductibility of certain Mexican tax expenses. In addition, we recognized $0.7 million of income tax provision benefit during fiscal 2024 related to the other permanent differences and release of valuation allowances. ​ For fiscal 2023 continuing operation, we incurred $0.2 million return to provision discrete taxable items.
These discrete items were primarily related to the lack of deductibility of certain Mexican tax expenses. In addition, we recognized $2.2 million of provision for income tax benefit during fiscal 2025 related to the other permanent differences and release of valuation allowances. ​ For fiscal 2024 continuing operation, we incurred $0.5 million return to provision discrete taxable items.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations ​ You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and notes thereto that appear elsewhere in this Annual Report. This discussion and analysis contain forward-looking statements that involve risks, uncertainties, and assumptions.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations ​ You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the accompanying notes included elsewhere in this Annual Report. This discussion and analysis contain forward-looking statements that involve risks, uncertainties, and assumptions.
Fiscal 2023: ​ Net sales for the Prepared products business decreased by approximately $2.7 million, or 4%, for the year ended October 31, 2024, compared to the corresponding period in fiscal 2023.
Fiscal 2023: ​ Net sales for the Prepared products business decreased by approximately $2.7 million, or 4%, for the year ended October 31, 2024, compared to fiscal 2023.
This estimate incorporates assumptions regarding non-deductible expenses, penalties, interest, inflationary adjustments, and other potential miscellaneous factors. Future changes in legal interpretations, court rulings, or settlement negotiations could have a material impact on this provision. ​ IVA Receivables Recoverability: ​ We have recognized IVA receivables totaling $48.7 million as of October 31, 2024.
This estimate incorporates assumptions regarding non-deductible expenses, penalties, interest, inflationary adjustments, and other potential miscellaneous factors. Future changes in legal interpretations, court rulings, or settlement negotiations could have a material impact on this provision. ​ IVA Receivables Recoverability: ​ We have recognized IVA receivables totaling $58.1 million as of October 31, 2025.
Fiscal 2023: ​ The gross profit percentage for guacamole products for the year ended October 31, 2024, was 19.6%, compared to 18.1% in the prior year. This increase in gross profit percentage for fiscal 2024 was primarily driven by lower raw fruit costs and lower production expenses. ​ Fiscal 2023 vs.
Fiscal 2023: ​ The gross profit percentage for guacamole products for the year ended October 31, 2024, was 20%, compared to 18% in the prior year. This increase in gross profit percentage for fiscal 2024 was primarily driven by lower raw fruit costs and lower production expenses.
Fiscal year 2024 cash flows provided by investing activities include the proceeds from the sale of the Fresh Cut business of $83.0 million partially offset by the purchases of property, plant and equipment of $2.9 million. ​ 41 Cash used in financing activities was $50.4 million and $58.6 million for fiscal years 2024 and 2022.
Fiscal year 2024 cash flows provided by investing activities include the proceeds from the sale of the Fresh Cut Business of $83.0 million, partially offset by the purchases of property, plant and equipment of $2.9 million. ​ Cash used in financing activities was $15.2 million and $50.4 million for fiscal years 2025 and 2024.
During fiscal 2024, 2023, and 2022, we remitted approximately $4.3 million, $5.5 million, and $4.2 million, to APEAM primarily for marketing activities related to Mexican avocados. ​ We also believe that our other Grown products, primarily tomatoes, are positioned for future growth.
During fiscal 2025, 2024, and 2023, we remitted approximately $3.8 million, $4.3 million, and $5.5 million to APEAM primarily for marketing activities related to Mexican avocados. ​ We also believe that our other Fresh products, primarily tomatoes, are positioned for future growth.
Sales and expenses are remeasured using a weighted-average exchange rate for the period. ​ Due to the change in the Mexican peso to the U.S. dollar exchange rates, foreign currency remeasurement losses, net of gains, for the year ended October 31, 2024 and 2022 were $5.8 million and $1.0 million respectively.
Sales and expenses are remeasured using a weighted-average exchange rate for the period. ​ Due to the change in the Mexican peso to the U.S. dollar exchange rates, foreign currency remeasurement gains, net of losses, for the year ended October 31, 2025 and 2023 were $1.8 million and $1.4 million.
As of October 31, 2024, approximately $51.8 million was available for borrowing, based on the borrowing base calculation discussed above. ​ The weighted-average interest rate under the Credit Facility was 7.2% for the fiscal year ended October 31, 2024.
As of October 31, 2025, approximately $36.0 million was available for borrowing, based on the borrowing base calculation discussed above. ​ The weighted-average interest rate under the Credit Facility was 8.0% for the fiscal year ended October 31, 2025.
Our expertise in marketing and distributing avocados, as well as developing and manufacturing prepared avocado products and other value-added fresh foods, enables us to deliver a diverse range of products to retail grocery stores, foodservice providers, club stores, mass merchandisers, food distributors, and wholesalers—primarily in the United States. ​ We source avocados from multiple regions, including California, Mexico, Peru, and Colombia.
Our expertise in sourcing, marketing and distributing avocados, together with our capabilities in developing and manufacturing prepared avocado products and other value-added fresh foods, allows us to deliver a broad range of products to retail grocery stores, foodservice operators, club stores, mass merchandisers, food distributors, and wholesalers, primarily in the United States. ​ We source avocados from multiple growing regions, including California, Mexico, Peru, and Colombia.
We will continue to pursue grower recruitment opportunities and expand relationships with retail and/or foodservice customers to fuel growth in each of our business segments. ​ On June 26, 2023, Calavo and certain subsidiaries entered into the “Credit Agreement” by and among Calavo, certain subsidiaries of Calavo as guarantors, and Wells Fargo Bank, National Association, as agent and lender (“Agent”).
We will continue to pursue grower recruitment opportunities and expand relationships with retail and/or foodservice customers to fuel growth in each of our business segments. ​ On June 26, 2023, we entered into a credit agreement (as amended, the “Credit Agreement”) with Wells Fargo Bank, National Association, as agent and lender (“Agent” or “Wells Fargo”).
Foreign currency remeasurements gains, net of losses, for the year ended October 31, 2023 were $1.4 million. 39 ​ Loss from Unconsolidated Entities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ Change ​ 2023 ​ Change ​ 2022 ​ ​ (Dollars in thousands) Loss from unconsolidated entities $ (478) (46) % $ (879) 56 % $ (564) ​ Loss from unconsolidated entities includes our allocation of earnings or losses from our investments in Don Memo.
Foreign currency remeasurements losses, net of gains, for the year ended October 31, 2024 were $5.8 million. ​ Loss from unconsolidated entities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ Change ​ 2024 ​ Change ​ 2023 ​ ​ ​ (Dollars in thousands) Loss from unconsolidated entities ​ ​ ​ ​ $ (214) ​ ​ ​ (55) % $ (478) ​ ​ ​ (46) % $ (879) ​ Loss from unconsolidated entities includes our allocation of earnings or losses from our investments in Don Memo.
For fiscal 2023, as compared to fiscal 2022, the increase in interest expense was due to higher interest rates, as well as a higher average debt balance. ​ Other Income, Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ Change ​ 2023 ​ Change ​ 2022 ​ ​ (Dollars in thousands) Other income, net $ 641 147 % $ 260 (68) % $ 803 Percentage of net sales ​ 0.1 % ​ ​ 0.0 % ​ ​ 0.1 % ​ Other income, net includes transactions that are outside of the normal course of operations.
The increase in interest expense in fiscal 2024 compared to fiscal 2023 was due to higher interest rates and a higher average debt balance. ​ Other income, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ Change ​ 2024 ​ Change ​ 2023 ​ ​ (Dollars in thousands) Other income, net ​ ​ ​ $ 1,003 ​ ​ ​ 56 % $ 641 ​ ​ ​ 147 % $ 260 ​ ​ ​ Percentage of net sales ​ 0 % ​ ​ 0 % ​ ​ 0 % ​ 39 Table of Contents Other income, net includes transactions that are outside of the normal course of operations.
See Note 10 in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further information about our business segments. ​ Our Grown products business grades, sizes, packs, cools, and, when requested, ripens avocados for delivery to our customers.
Further information about our business segments is included in Note 10 to our consolidated financial statements. ​ Our Fresh products business grades, sizes, packs, cools, and, when requested, ripens avocados for delivery to our customers.
The Credit Agreement provides for a revolving credit facility of up to $90.0 million (the “Revolving Loans”), along with a capex credit facility of up to $10.0 million (the “Term Loan”, and together with the Revolving Loans, the “Credit Facility”). ​ On August 15, 2024, in conjunction with its sale of the Fresh Cut business, Calavo and certain of its subsidiaries (collectively, the “Borrower”) entered into a First Amendment to Credit Agreement and Consent (as amended, the “Credit Agreement”) with Agent, whereby (i) the Credit Agreement was amended to (A) reduce the revolving commitments thereunder from $90.0 million to $75.0 million and (B) reduce the machinery and equipment subline of the loans from $6.8 million to $1.7 million, and to reduce the related monthly amortization on such subline from $80,952.38 to $24,335.37, and (ii) the Borrower obtained consent from Agent for entry into the Asset Purchase Agreement and Purchase and Sale Agreement. ​ Borrowings of the Revolving Loans under the Credit Agreement are asset based and subject to a borrowing base calculation that includes a certain percentage of eligible accounts receivable, inventory and equipment of Calavo, less any reserves implemented by Agent in its permitted discretion; provided that the equipment-based portion of such borrowing base calculation reduces monthly following the Closing Date. ​ Borrowings under the Credit Agreement bear interest at a rate per annum equal to an applicable margin, plus, at Calavo’s option, either a base rate or a secured overnight financing rate (“SOFR”) term rate (which includes a spread adjustment of 0.10% and is subject to a floor of 0.00%).
The Credit Agreement originally provided for a revolving credit facility of up to $90.0 million (the “Revolving Loans”), along with a capex credit facility of up to $10.0 million (the “Term Loan”). ​ On August 15, 2024, we entered into a First Amendment to Credit Agreement and Consent with Wells Fargo whereby (i) the original Credit Agreement was amended to reduce the revolving commitments thereunder from $90.0 million to $75.0 million, among other minor adjustments to align the borrowing base with our asset base excluding the Fresh Cut Business (which was sold on August 15, 2024); and (ii) we obtained consent from Agent for entry into the Asset Purchase Agreement and Purchase and Sale Agreement with respect to the sale of the Fresh Cut Business. ​ Borrowings of the Revolving Loans under the Credit Agreement are asset based and are subject to a borrowing base calculation that includes a certain percentage of eligible accounts receivable, inventory and equipment, less any reserves implemented by Agent in its permitted discretion, provided that the equipment-based portion of such borrowing base calculation reduces monthly according to scheduled amortization. ​ Borrowings under the Credit Agreement bear interest at a rate per annum equal to an applicable margin, plus, at our option, either a base rate or a secured overnight financing rate (“SOFR”) term rate (which includes a spread adjustment of 0.10% and is subject to a floor of 0.00%).
Cash used during fiscal year 2024 primarily relates to the net payments to our credit facility totaling $35.0 million, dividend payments of $9.0 million, payment of the Term Loan of $4.1 million, long-term obligation payments of $1.5 million, the payment of minimum withholding taxes on net share settlement of equity awards of $0.7 million and the payment of debt issuance costs of $0.2 million. ​ Our principal sources of liquidity are cash generated from operations and amounts available for borrowing under our Credit Facility.
Cash used during fiscal year 2025 primarily relates to dividend payments of $14.3 million, long-term obligation and finance lease payments of $0.9 million, and the payment of minimum withholding taxes on net share settlement of equity awards of less than $0.1 million. ​ Our principal sources of liquidity are our existing cash reserves, cash generated from operations, and amounts available for borrowing under our credit facility.
For fiscal 2024, as compared to fiscal 2023, the increase in other income, net was due to a $0.3 million recovery of non-CDM Mexican IVA tax. For fiscal 2023, as compared to fiscal 2022, the decrease in other income, net was due to $0.6 million received as dividend income from Limoneira in 2022.
For fiscal 2025, as compared to fiscal 2024, the increase in other income, net was due to a $0.7 million recovery of non-CDM Mexican IVA tax.
The volume of avocados sold for the year ended October 31, 2023 increased 3% compared to the prior year period. ​ Sales of tomatoes increased $7.7 million, or 16%, for the year ended October 31, 2023, when compared to the prior year period.
The volume of avocados sold for the year ended October 31, 2024 decreased by 8% compared to the prior year period. ​ Sales of tomatoes decreased by $0.1 million, or 0.3%, for the year ended October 31, 2024, when compared to the prior year period.
Our working capital at October 31, 2024 was $85.4 million, compared to $51.6 million at October 31, 2023. ​ We believe that cash flows from operations, borrowings available under our Credit Facility, and other sources will be sufficient to satisfy our future capital expenditures, working capital and other financing requirements for at least the next twelve months.
The increase in working capital primarily reflects higher cash balances. ​ We believe that cash flows from operations, borrowings available under our Credit Facility, and other sources will be sufficient to satisfy our future capital expenditures, working capital and other financing requirements for at least the next twelve months.
Fiscal year 2024 operating cash flows reflect our net loss of $1.0 million, net increase of noncash charges (depreciation and amortization, stock-based compensation expense, goodwill impairment, losses from unconsolidated entities, deferred taxes, loss on disposal of property, plant and equipment, reserve for Mexican IVA receivables, gain on the sale of the Temecula packinghouse, gain on sale of the Fresh Cut business, operating lease expense and amortization of debt issuance costs) of $15.7 million and a net increase from changes in the non-cash components of our working capital accounts of approximately $10.2 million. ​ The increase in operating cash flows was caused by working capital changes including an increase in payable to growers of $3.6 million, a decrease in other assets of $2.8 million, an increase in income tax payables of $2.9 million, a decrease in prepaid expenses and other current assets of $1.6 million, a decrease in advances to suppliers of $0.7 million, a decrease in income tax receivable of $0.2 million, and a net increase in accounts payable and accrued expenses of $7.0 million partially offset by an increase in accounts receivables of $6.5 million and an increase in inventories of $1.9 million. ​ The increase in accounts payable, accrued expenses and other liabilities is primarily related to the timing of payments.
Cash provided by operating activities for fiscal year 2025 reflects primarily our net income of $20.0 million, combined with non-cash activities (depreciation and amortization, non-cash operating lease expense, loss from unconsolidated entities, provision of tomato grower advances, stock-based compensation expense, amortization of debt issuance costs, amortization of the gain on the sale of the Temecula packinghouse, gain on the disposal of property, plant and equipment and deferred income taxes) of $10.2 million which were partially offset by a net effect of changes in operating assets and liabilities of $8.6 million. ​ Changes in operating assets and liabilities included a decrease in payable to growers of $3.0 million, an increase in other assets of $6.6 million, a decrease in income tax payables of $4.1 million, a decrease in prepaid expenses and other current assets of $1.7 million, a decrease in advances to suppliers of $0.2 million, and a net decrease in accounts payable and accrued expenses of $7.2 million, partially offset by a decrease in accounts receivables of $10.3 million and a decrease in inventories of $0.6 million. ​ The decrease in accounts payable, accrued expenses and other liabilities is primarily related to the timing of payments.
We continue to monitor developments, and any material changes will be reflected in future periods as they occur. ​ Goodwill ​ 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.
We continue to monitor developments, and any material changes will be reflected in future periods as they occur. ​ Goodwill ​ Goodwill is tested for impairment at the reporting unit level on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable.
Actual results may differ materially from those anticipated in these forward-looking statements because of various factors, including, but not limited to, those presented under "Business and Operational Risks", included in Item 1A and elsewhere in this Annual Report. ​ Overview ​ We are a leading marketer, processor, and distributor of avocados and other value-added fresh foods, serving customers worldwide.
Actual results may differ materially from those expressed or implied in these forward-looking statements for the reasons described under “Risk Factors” in Item 1A of this Annual Report and elsewhere in this Annual Report. ​ Overview ​ We are a leading marketer, processor, and distributor of avocados and other value-added fresh foods, serving customers worldwide.
The volume of avocados sold for the year ended October 31, 2024 decreased by 8% compared to the prior year period. ​ We expect our avocado sales volume to increase in fiscal 2025, driven by our focus on new customer recruitment, expanding existing customers’ sales, and intensifying global sourcing. ​ Sales of tomatoes decreased by $0.1 million, or 0.3%, for the year ended October 31, 2024, when compared to the prior year period.
Avocado volume decreased 8% for the year ended October 31, 2025, compared to the prior year period. ​ 35 Table of Contents We expect avocado sales volume to increase in fiscal 2026, driven by new customer recruitment, growth from existing customers, and expanded global sourcing. ​ Sales of tomatoes decreased by $18.6 million, or 35%, for the year ended October 31, 2025, when compared to the prior year period.
While the majority of our tomato sales are made on a consignment basis, we also purchase some tomatoes on the spot market to fulfill specific customer requests. The decrease in tomato gross profit was primarily attributable to higher sales of tomatoes sourced from the spot market, which were less profitable than our traditional consignment tomato sales.
While the majority of our tomato sales are made on a consignment basis, we also purchase some tomatoes on the spot market to fulfill specific customer requests.
Mexican Tax Issues ​ See footnotes 7 and 14 of the consolidated financial statements for information on Mexican tax matters and the Mexican IVA taxes receivable. ​ Critical Accounting Estimates ​ Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
Risk Factors of this Form 10-K. ​ Critical Accounting Estimates ​ Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
The increase in tomato sales was primarily due to an 8% increase in the sales price per carton, and an 8% increase in volume sold. ​ Prepared products ​ Fiscal 2024 vs.
The decrease in tomato sales was primarily due to a 17% decrease in volume sold, partially offset by a 19% increase in the sales price per carton. ​ Prepared Products ​ Fiscal 2025 vs.
The decrease in other assets as of October 31, 2024, when compared to the prior year period, is primarily due to repayments of infrastructure loans. The increase in payable to growers is mostly due to higher sales prices for avocados.
The increase in other assets as of October 31, 2025, when compared to the prior year period, is primarily due to the increase of IVA receivables. The decrease in payable to growers is mostly due to lower tomato volumes.
The increase in interest income in fiscal 2023 as compared to 2022 is primarily due to the increase in the amount owed from our tomato growers from loans and infrastructure advances. ​ Interest Expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ Change ​ 2023 ​ Change ​ 2022 ​ ​ (Dollars in thousands) Interest expense $ 2,893 22 % $ 2,371 45 % $ 1,631 Percentage of net sales ​ 0.4 % ​ ​ 0.4 % ​ ​ 0.2 % ​ Interest expense is primarily generated from our line of credit borrowings with Wells Fargo.
The increase in interest income in fiscal year 2024 as compared to 2023 was primarily due to interest earned on the net proceeds from the sale of the Fresh Cut Business. ​ Interest expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ Change ​ 2024 ​ Change ​ 2023 ​ ​ (Dollars in thousands) Interest expense ​ ​ ​ $ 827 ​ ​ ​ (71) % $ 2,893 ​ ​ ​ 22 % $ 2,371 ​ ​ ​ Percentage of net sales ​ 0 % ​ ​ 0 % ​ ​ 0 % ​ Interest expense is primarily generated from our line of credit borrowings with Wells Fargo.
The increase in gross profit percentage for the year ended October 31, 2023 in guacamole products was primarily due to lower raw product fruit costs and manufacturing improvements. ​ Selling, General and Administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ Change ​ 2023 ​ Change ​ 2022 ​ ​ (Dollars in thousands) Selling, general and administrative ​ $ 50,038 6 % $ 47,276 2 % $ 46,538 ​ Percentage of net sales ​ 7.6 % ​ ​ 8.0 % ​ ​ 6.0 % ​ Selling, general and administrative expenses of $50.0 million for the year ended October 31, 2024 include costs of marketing and advertising, sales expenses (including broker commissions) and other general and administrative costs.
Selling, general and administrative ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ Change ​ 2024 ​ Change ​ 2023 ​ ​ (Dollars in thousands) Selling, general and administrative ​ $ 42,089 ​ ​ ​ (16) % $ 50,038 ​ ​ ​ 6 % $ 47,276 ​ Percentage of net sales ​ 6 % ​ ​ 8 % ​ ​ 8 % ​ Selling, general and administrative expenses of $42.1 million for the year ended October 31, 2025 include costs of marketing and advertising, sales expenses (including broker commissions) and other general and administrative costs.
Across our various operating facilities, we (i) sort, pack, and ripen avocados, tomatoes, and Hawaiian-grown papayas, and (ii) process and package guacamole. We distribute our products both domestically and internationally. ​ We report our operations in two different business segments: Grown and Prepared. The Grown segment consists of fresh avocados, tomatoes and papayas.
Across our operating facilities, we (i) sort, pack, and ripen avocados, tomatoes, and Hawaiian-grown papayas, and (ii) process and package guacamole. Our products are distributed both domestically and internationally.
Our investments in packinghouse equipment, value-added ripening and packing capabilities, and skilled personnel position us to efficiently handle larger volumes and optimize cost structures. ​ In addition to avocados, we distribute other perishable foods, including tomatoes and Hawaiian-grown papayas, which we believe complement our avocado offerings.
Our investments in packinghouse equipment, ripening and packing capabilities, and skilled personnel are intended to help us efficiently handle varying crop sizes and maintain operating effectiveness. ​ In addition to avocados, we distribute tomatoes and Hawaiian grown papayas, which we believe complement our core avocado offerings.
We also periodically evaluate opportunities to distribute other crops that align with our business model and deliver reasonable returns. ​ Prepared products include guacamole sold at retail and foodservice as well as avocado pulp sold to foodservice . Prepared products are marketed under Calavo-owned brands, as well as store-brand and private label programs.
We periodically evaluate opportunities to distribute other perishable products that align with our capabilities and financial objectives. ​ Our Prepared segment produces guacamole sold under Calavo owned brands, store brands, and private label programs, and also sells avocado pulp to foodservice operators.
This decrease in Prepared product sales during the year ended October 31, 2023 was primarily related to lower sales volume of guacamole products. ​ Net sales for guacamole products decreased $6.9 million, or 10%, for the year ended October 31, 2023 compared to the corresponding period in fiscal 2022, primarily due to a decrease in total volume sold. ​ With the divestiture of our salsa business in April 2023, we had a decrease in sales of salsa products of $1.1 million, or 59%. ​ 37 Gross Profit ​ The following table summarizes our gross profit and gross profit percentages by business segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ Change ​ 2023 ​ Change ​ 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands) ​ Gross profit: ​ ​ ​ ​ ​ Grown ​ ​ $ 55,268 ​ 9 % $ 50,534 ​ 1 % $ 50,165 ​ Prepared ​ ​ 12,536 ​ 4 % 12,078 ​ 164 % ​ 4,577 ​ Total gross profit ​ ​ $ 67,804 ​ 8 % $ 62,612 ​ 14 % $ 54,742 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit percentages: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grown ​ ​ 9.2 % ​ ​ 9.6 % ​ ​ 7.2 % Prepared ​ ​ 19.6 % ​ ​ 18.1 % ​ ​ 6.4 % Consolidated ​ ​ 10.2 % ​ ​ 10.5 % ​ ​ 7.1 % ​ Summary ​ Our cost of goods sold consists predominantly of ingredient costs (primarily fruit and other whole foods), packing materials, freight and handling, labor and overhead (including depreciation) associated with preparing food products, and other direct expenses pertaining to products sold.
Frozen products typically have lower sales prices than their unfrozen counterparts. ​ 36 Table of Contents Gross Profit ​ The following table summarizes our gross profit and gross profit percentages by business segment (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ Change ​ 2024 ​ Change ​ 2023 Gross profit: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fresh ​ ​ $ 46,309 ​ (16) % $ 55,268 ​ 9 % $ 50,534 ​ Prepared ​ ​ 17,354 ​ 38 % 12,536 ​ 4 % ​ 12,078 ​ Total gross profit ​ ​ $ 63,663 ​ (6) % $ 67,804 ​ 8 % $ 62,612 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross profit percentages: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fresh ​ ​ 8 % ​ ​ 9 % ​ ​ 10 % Prepared ​ ​ 24 % ​ ​ 20 % ​ ​ 18 % Consolidated ​ ​ 10 % ​ ​ 10 % ​ ​ 11 % ​ Summary ​ Our cost of goods sold consists predominantly of ingredient costs (including fruit and other food products), packing materials, freight and handling, labor and overhead associated with packing, distributing, and/or preparing food products, as well as other direct expenses related to products sold. ​ Gross profit decreased by $4.1 million, or 6%, for the year ended October 31, 2025, compared to fiscal 2024.
In addition, we recognized $3.1 million of additional income tax provision expenses during fiscal 2023 related to the other permanent differences. ​ Net loss (income) attributable to noncontrolling interest ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 Change 2023 Change 2022 ​ ​ (Dollars in thousands) Net loss (income) attributable to noncontrolling interest ​ $ (52) ​ (86) % $ (377) ​ (207) % $ 353 Percentage of net sales ​ ​ (0.0) % ​ ​ ​ (0.0) % ​ ​ ​ 0.0 % ​ For fiscal years 2024, 2023 and 2022, the net loss (income) attributable to noncontrolling interest is due to income/losses from Avocados de Jalisco. ​ Liquidity and Capital Resources ​ Cash provided by operating activities was $24.4 million and $50.2 million for fiscal year 2024 and 2022.
In addition, we recognized $0.7 million of provision for income tax benefit during fiscal 2024 related to the other permanent differences and release of valuation allowances. ​ Net income attributable to noncontrolling interest ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ Change ​ ​ ​ 2024 ​ ​ ​ Change ​ ​ ​ 2023 ​ ​ (Dollars in thousands) Net income attributable to noncontrolling interest ​ $ (174) ​ 235 % $ (52) ​ (86) % $ (377) Percentage of net sales ​ ​ (0) % ​ ​ ​ (0) % ​ ​ ​ (0) % ​ For fiscal years 2025, 2024 and 2023, the net income attributable to noncontrolling interest is due to income from Avocados de Jalisco, a related party.
Restricted cash, cash and cash equivalents as of October 31, 2024 and 2023 totaled $57.0 million and $2.9 million, respectively.
Cash and cash equivalents as of October 31, 2025 and 2024 totaled $61.2 million and $57.0 million. Restricted cash, cash and cash equivalents as of October 31, 2023 totaled $2.9 million. Our working capital at October 31, 2025 was $89.0 million, compared to $85.4 million at October 31, 2024.
For fiscal 2024, as compared to fiscal 2023, the increase in interest expense was due to higher interest rates, as well as a higher average debt balance and amortization of debt issuance cost.
The decrease in interest expense in fiscal 2025 compared to fiscal 2024 was driven by a lower average debt balance and lower amortization of debt issuance costs.
The applicable margin is (i) for Revolving Loans, 0.50% for base rate borrowings and 1.50% for SOFR term rate borrowings, and (ii) for Term Loan, 1.00% for base rate borrowings and 2.00% for SOFR term rate borrowings. The Credit Facility matures on June 26, 2028. As of October 31, 2024, we were in compliance with the financial covenants.
The applicable margin is (i) for Revolving Loans, 0.50% for base rate borrowings and 1.50% for SOFR term rate borrowings, and (ii) for the Term Loan, 1.00% for base rate borrowings and 2.00% for SOFR term rate borrowings.
Partially offsetting these increases, is a reduction in our short-term incentive accrual of $2.3 million. ​ Foreign currency gain (loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ Change ​ 2023 ​ Change ​ 2022 ​ ​ (Dollars in thousands) Foreign currency gain (loss) $ (5,840) (524) % $ 1,378 (242) % $ (973) ​ Our operations in Mexico are subject to exchange rate fluctuations and foreign currency transaction costs.
Partially offsetting these increases, is a reduction in severance cost of $1.6 million and $3.0 million in stock-based compensation, from the prior year, related to the departure of our recently retired Chief Executive Officer and other executives. ​ Foreign currency gain (loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 38 Table of Contents ​ ​ ​ 2025 ​ Change ​ 2024 ​ Change ​ 2023 ​ ​ ​ (Dollars in thousands) Foreign currency gain (loss) ​ ​ ​ ​ $ 1,803 ​ ​ ​ (131) % $ (5,840) ​ ​ ​ (524) % $ 1,378 ​ Our operations in Mexico are subject to exchange rate fluctuations and foreign currency transaction costs.
For the years ended October 31, 2024, 2023 and 2022, we recognized losses of $0.5 million, $0.9 million and of $0.6 million, respectively, related to Don Memo. ​ Interest Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ Change ​ 2023 ​ Change ​ 2022 ​ ​ (Dollars in thousands) Interest income $ 1,020 69 % $ 605 21 % $ 500 Percentage of net sales ​ 0.2 % ​ ​ 0.1 % ​ ​ 0.1 % ​ The increase in interest income in fiscal 2024 as compared to 2023 is primarily due to interest earned on the net proceeds from the sale of the Fresh Cut business.
See Note 8, Related Party Transactions, for further discussion. ​ Interest income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ Change ​ 2024 ​ Change ​ 2023 ​ ​ (Dollars in thousands) Interest income ​ ​ ​ $ 3,240 ​ ​ ​ 218 % $ 1,020 ​ ​ ​ 69 % $ 605 ​ ​ ​ Percentage of net sales ​ 1 % ​ ​ 0 % ​ ​ 0 % ​ The increase in interest income in fiscal year 2025 as compared to 2024 was primarily due to interest earned on the net proceeds from the sale of the Fresh Cut Business.
Avocados are considered a staple item purchased by Hispanic consumers, as the per-capita avocado consumption in Mexico is significantly higher than that of the US. ​ We anticipate avocado products will further penetrate the United States marketplace, driven by year-round availability of imported fresh avocados, a growing Hispanic population, and the promotion of the health benefits of avocados.
Hispanic population will continue to positively influence domestic avocado demand and related prepared-product categories. ​ We anticipate avocado products will further penetrate the United States marketplace, driven by year-round availability of imported fresh avocados, a growing Hispanic population, and the promotion of the health benefits of avocados.
In fiscal 2024, we operated three packinghouses, and five regional distribution facilities all of which perform value-added operations that handle avocados for distribution to our customers. ​ We believe our continued success in marketing avocados depends on maintaining a reliable, high-quality supply at reasonable prices, while controlling handling costs as we ship fruit through our packinghouses and distribution centers.
In fiscal 2025, we operated three packinghouses, and five regional distribution facilities, all of which perform value-added operations that support our Fresh and Prepared operations. ​ We believe that our ability to maintain a reliable, high-quality supply of avocados at competitive cost is important to our Fresh segment.
At the end of fiscal 2022, we sold our investment in Limoneira and therefore received no dividends from Limoneira in fiscal 2024 and fiscal 2023. ​ Income Taxes Provision ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ Change ​ 2023 ​ Change ​ 2022 ​ ​ ​ (Dollars in thousands) Income tax expense ​ $ 2,325 (62) % $ 6,148 94 % $ 3,165 ​ Effective tax rate ​ ​ 25.3 % ​ ​ 55.0 % ​ ​ (85.9) % ​ 40 For fiscal 2024 continuing operation, we incurred $0.5 million return to provision discrete taxable items.
For fiscal 2024, as compared to fiscal 2023, the increase in other income, net was due to $0.3 million recovery of non-CDM Mexican IVA tax. ​ Provision for income taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ Change ​ 2024 ​ Change ​ 2023 ​ ​ (Dollars in thousands) Provision for income taxes ​ ​ ​ $ 4,646 ​ ​ ​ 100 % $ 2,325 ​ ​ ​ (62) % $ 6,148 ​ Effective tax rate ​ 19 % ​ ​ 25 % ​ ​ 55 % ​ For fiscal 2025 continuing operation, we incurred less than $0.1 million return to provision discrete taxable items.
Partially offsetting these increases is a reduction in severance cost of $1.6 million and $3.0 million in stock-based compensation, from the prior year, related to the departure of our former Chief Executive Officer and other executives. ​ Selling, general and administrative expenses of $47.2 million for the year ended October 31, 2023 include costs of marketing and advertising, sales expenses (including broker commissions) and other general and administrative costs.
The decrease was driven by an $8.0 million reduction in professional and consulting fees, primarily related to lower legal costs (including reduced FCPA investigation-related legal expenses), a $1.6 million reduction in compensation expenses reflecting lower headcount and severance costs, and a $1.0 million decrease in stock-based compensation, mainly related to our recently retired Chief Executive Officer’s compensation structure, partially offset by $2.3 million of write-offs related to bad debt associated with advances to suppliers. ​ Selling, general and administrative expenses of $50.0 million for the year ended October 31, 2024 include costs of marketing and advertising, sales expenses (including broker commissions) and other general and administrative costs.
The decrease in tomato sales was primarily due to a 17% decrease in volume sold offset by a 19% increase in the sales price per carton. ​ Fiscal 2023 vs. Fiscal 2022: ​ Net sales for the Grown products business decreased by approximately $170.8 million, or 24%, for the year ended October 31, 2023 compared to the prior year period.
Fiscal 2024: ​ Net sales for the Prepared products business increased by approximately $8.0 million, or 12%, for the year ended October 31, 2025, compared to fiscal 2024. This increase was driven primarily by a 11% increase in pounds sold, partially offset by a 1.5% increase in average selling price per pound.
We expect to source less volume from the spot market in fiscal 2025 relative to consignment sales. ​ Fiscal 2023 vs. Fiscal 2022: ​ During our year ended October 31, 2023, as compared to the prior year period, our Grown products segment gross profit increased $0.4 million or 1%.
Fiscal 2024: ​ During our year ended October 31, 2025, as compared to the prior year period, our Fresh products segment gross profit decreased by $9.0 million or 16%.
Our diverse sourcing network, including California, Mexico, Peru, and Colombia, enhances supply stability, which we believe supports long-term growth in the availability and demand for avocados in the United States and global markets. ​ Because fluctuations in avocado volumes impact per-pound handling costs, larger crops generally result in lower unit costs.
Our diversified sourcing network, including supply from California, Mexico, Peru, and Colombia, supports year-round availability and reduces reliance on any single region. Because fluctuations in avocado volumes can affect per pound handling costs, larger volumes generally result in lower unit costs.
We believe that the healthy eating trend that has been developing in the U.S. contributes to such growth, as avocados are cholesterol and sodium free, dense in fiber, vitamin B6, antioxidants, potassium, folate, and contain unsaturated fat, which helps lower cholesterol. ​ Additionally, we believe that demographic changes in the U.S. will impact the consumption of avocados and avocado-based products.
As avocados are cholesterol- and sodium-free and are dense in fiber, antioxidants, potassium, and unsaturated fats, we believe consumer preference for nutrient-dense foods will continue to benefit our Fresh and Prepared segments. ​ Additionally, we believe that demographic changes in the U.S. will continue to support growth in avocado and avocado-based product consumption. According to the U.S.
On October 30, 2024, we paid a dividend of $0.20 per share, or an aggregate of $3.6 million, to shareholders of record on October 2, 2024.
On December 31, 2025, our Board declared a cash dividend of $0.20 per share, or an aggregate of $3.6 million. This dividend will be paid on January 30, 2026, to shareholders of record on January 13, 2026. ​ Regulatory Matters ​ In July 2025, the U.S.
Partially offsetting this decrease, tomato sales increased due to an increase in sales prices per carton, and higher tomato sales volume. ​ Sales of avocados decreased $177.9 million, or 28%, for the year ended October 31, 2023, compared to the prior year period. The average avocado sales price per carton decreased 30% compared to the prior year period.
The decrease was driven primarily by lower tomato sales, partially offset by modest increases in average sales prices per carton of avocados. ​ Sales of avocados decreased $3.5 million, or less than one percent, for the year ended October 31, 2025, compared to the prior year period.
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 which include forecasted cash flow.
Impairment testing requires significant judgment, including the identification of reporting units, the assignment of assets and liabilities to those units, and the determination of their fair values.
We cannot assure you, however, that such increases in sales will occur. ​ Fiscal 2023 vs. Fiscal 2022: ​ Net sales for the Prepared products business decreased by approximately $4.8 million, or 7%, for the year ended October 31, 2023 compared to the corresponding period in fiscal 2022.
Fiscal 2024: ​ Net sales for the Fresh products business decreased by approximately $21.1 million, or 4%, for the year ended October 31, 2025 compared to the prior year.
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 which include forecasted cash flow.
Goodwill impairment testing involves significant judgment, including assumptions regarding the number of reporting units, the 32 Table of Contents allocation of assets and liabilities to reporting units, and the determination of fair value, which includes forecasted cash flows and discount rates.
Selling, general and administrative expenses increased by $0.7 million, or 2%, for the year ended October 31, 2023 compared to the prior year period. This increase was primarily due to $2.9 million paid in severance and other costs and $1.6 million in stock-based compensation related to executive departures.
Selling, general and administrative expenses decreased by $8.0 million, or 16%, for the year ended October 31, 2025 compared to the prior year period.
This increase was driven by an increase in the Grown segment, partly offset by a decline in the Prepared segment. ​ For the year ended October 31, 2024, the increase in Grown product sales was primarily due to an increase in price per unit of avocados partially offset by decreased sales volume in avocados and tomatoes.
This decrease was driven by lower sales in the Fresh segment, partly offset by higher sales in the Prepared segment. ​ Fresh segment net sales declined primarily because of lower sales volumes in avocados and tomatoes. Avocado volume was lower for most of fiscal 2025, although the average selling price per carton increased compared to the prior year.
The increase in our inventory as of October 31, 2024, when compared to the prior year period, is primarily due to higher inventory of Mexican avocados offset by a decrease in inventory of guacamole products The decrease in income taxes receivable and increase in income taxes payable are due to the gain on disposal of discontinued operations offset by cash payments made during the year. ​ Cash provided by investing activities was $80.1 million and $8.7 million for fiscal year 2024 and 2022.
The decrease in income taxes payable is due to a $2.5 million payment of estimated tax liabilities for fiscal year 2025 in the fourth quarter. ​ Cash used in investing activities was $2.2 million and $10.7 million for fiscal year 2025 and 2023. Cash provided by investing activities was $80.1 million for fiscal year 2024.
Under the Credit Facility, as of October 31, 2024, we had no amounts outstanding related to the Revolving Loans or Term Loan. During August 2024 we fully repaid the Term Loan with the proceeds from the sale of the Fresh Cut business.
Under the credit facility, we had no amounts outstanding related to the Revolving Loans and Term Loan as of October 31, 2025. 41 Table of Contents ​ In March 2025, our Board authorized a stock repurchase program of up to $25 million.
Accordingly, the Company recorded a goodwill impairment charge of $9.3 million during the quarter ended July 31, 2024 as a result of the ongoing negotiations and finalization of the sale price. ​ In fiscal 2024 and 2023, the Company performed a qualitative assessment for its Grown reporting unit by reviewing macroeconomic conditions, industry and market conditions, cost factors, overall performance compared with prior projections, and other relevant entity-specific events, and performed a quantitative assessment for its Prepared reporting unit.
Because these inputs involve significant estimation uncertainty and are sensitive to economic and industry conditions, goodwill impairment testing represents a critical accounting estimate. ​ Goodwill Impairment Testing ​ In fiscal 2025 and 2024, we performed a qualitative assessment for our Fresh reporting unit by evaluating macroeconomic conditions, industry and market conditions, cost factors, overall financial performance compared with prior projections, and other relevant entity-specific events.
The Prepared segment consists of guacamole sold at retail and foodservice companies as well as avocado pulp sold to foodservice companies.
The change did not affect the segment’s composition, financial results, or internal performance measures. We report on our operations in two business segments: Fresh and Prepared. The Fresh segment consists of fresh avocados, tomatoes, and papayas. The Prepared segment consists of guacamole sold at retail and foodservice, as well as avocado pulp sold to foodservice.
We continue to seek to expand our relationships with major foodservice companies and food retailers and develop alliances that will allow our products to reach more consumers. ​ The operating results of our business are, and will continue to be, influenced by quarterly and annual fluctuations, as well as market declines, due to various factors.
The segment maintains relationships with retailers and foodservice operators and seeks to expand distribution of our products across both channels. ​ Our operating results are influenced by quarterly and annual fluctuations driven by a variety of factors.
Cash used in operating activities for fiscal 2023 was $14.5 million.
See Note 8, Related Party Transactions, for further discussion. ​ Liquidity and Capital Resources ​ Cash provided by operating activities was $21.5 million and $24.4 million for fiscal years 2025 and 2024. Cash used in operating activities for fiscal 2023 was $14.5 million.
Removed
Our Prepared business maintains relationships with foodservice companies and food retailers.
Added
We do not own or operate farming operations, and we rely on independent growers and strategic sourcing relationships across these regions to support our supply needs. ​ During the first quarter of fiscal 2025, we changed the name of our ‘Grown’ reportable segment to ‘Fresh’ to more accurately represent the segment’s business activities.
Removed
These include, but are not limited to, pests and diseases, weather patterns, shifts in consumer demand, food safety advisories, timing, reduction, or cancellation of significant customer orders, gains or losses of key customers, market acceptance of our products, and our ability to develop, introduce, and market new products in a timely manner. 28 ​ Additional factors include the availability, quality, and cost of raw materials, new product launches by competitors, utilization rates at our production facilities, changes in product mix across our Grown and Prepared segments, and general economic conditions. ​ Despite these challenges, we believe our diversified sourcing capabilities, value-added production infrastructure, and strong customer relationships position us well to manage risks and achieve favorable operating results for the foreseeable future . ​ Recent Developments ​ Dividend payment ​ On January 31, 2024, we paid a dividend of $0.10 per share, or an aggregate of $1.8 million, to shareholders of record on January 26, 2024.
Added
These include the availability, quality, and cost of raw materials, weather patterns, pests and diseases, food safety advisories, shifts in consumer demand, changes in customer order patterns, competitive activity, utilization rates at our production facilities, the mix of products sold across our Fresh and Prepared segments, and general economic conditions.
Removed
On April 29, 2024, we paid a dividend of $0.10 per share, or an aggregate of $1.8 million, to shareholders of record on April 1, 2024. On July 30, 2024, we paid a dividend of $0.10 per share, or an aggregate of $1.8 million, to shareholders of record on July 2, 2024.
Added
These factors may cause our results to vary materially from period to period. 29 Table of Contents We believe that our diversified sourcing capabilities, value added infrastructure, and customer relationships provide a foundation that supports our ability to navigate these factors over time. ​ Recent Developments ​ Dividend payment ​ On October 29, 2025, we paid a dividend of $0.20 per share, or an aggregate of $3.6 million, to shareholders of record on September 30, 2025.
Removed
Sale of Fresh Cut and Discontinued Operations We completed the sale of our Fresh Cut business (“Fresh Cut”, formerly “RFG”) and related real estate on August 15, 2024 for $83 million, subject to various closing adjustments. The Fresh Cut business represented substantially all of the business of the Prepared segment other than the guacamole business, which was retained.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeSuch events may lead to reduced supplies of these materials, increased supply costs, or disruptions to our production schedules. The principal effect of inflation in both commodity and consumer prices on our operating results is to increase costs, both for products sold and selling, general and administrative expenses.
Biggest changeIn addition, changes in trade policies, tariffs, or suspension agreements, such as the 2025 termination of the Tomato Suspension Agreement and the resulting anti-dumping duties on most fresh tomatoes imported from Mexico, can reduce import demand and lead to significant pricing and volume volatility. ​ The principal effect of inflation in both commodity and consumer prices on our operating results is to increase costs, both for products sold and selling, general and administrative expenses.
A strengthening USD or a weaker MXN generally benefits cash flow by reducing the amount of USD we need to transfer to Mexico to fund daily operations. However, a strengthening USD or weaker MXN results in higher noncash foreign currency translation remeasurement expense.
A strengthening USD or a weaker MXN generally benefits cash flow by reducing the amount of USD we need to transfer to Mexico to fund daily operations. However, a strengthening USD or weaker MXN can result in higher noncash foreign currency translation remeasurement expense.
Total foreign currency remeasurements gains for fiscal 2023, net of losses, were $1.4 million. ​ Fluctuations in exchange rates between MXN and the USD can have complex and, at times, conflicting impacts on our financial results.
Total foreign currency remeasurement gains for fiscal 2025 and 2023, net of losses, were $1.8 million and $1.4 million. Total foreign currency remeasurements losses for fiscal 2024, net of gains, were $5.8 million. ​ Fluctuations in exchange rates between MXN and the USD can have complex and, at times, conflicting impacts on our financial results.
These impacts do not necessarily offset one another and introduce significant complexity to our financial results and their interpretation. ​ ​ 43
These impacts do not necessarily offset one another and introduce significant complexity to our financial results and their interpretation. ​ 43 Table of Contents
Although we may attempt to offset these cost increases by increasing selling prices for our products, consumers may not have the buying power to cover these increased costs and may reduce their volume of purchases of those products. In that event, selling price increases may not be sufficient to completely offset our cost increases.
Although we may attempt to offset these cost increases by increasing selling prices for our products, consumers may not have the buying power to cover these increased costs and may reduce their volume of purchases of those products.
Exchange Rate Risk ​ A substantial portion of our business operations are based in Mexico. Consequently, a considerable share of our costs and expenses are denominated in Mexican pesos. To meet foreign cash requirements, funds are transferred weekly from our corporate office to Mexico.
In that event, selling price increases may not be sufficient to completely offset our cost increases. ​ Exchange Rate Risk ​ A substantial portion of our business operations are based in Mexico. Consequently, a considerable share of our costs and expenses are denominated in Mexican pesos.
Currently, we do not utilize derivative instruments to hedge fluctuations in the Mexican peso (MXN) to U.S. dollar (USD) exchange rates. However, management periodically evaluates the feasibility of employing such instruments. Total foreign currency remeasurement losses for fiscal 2024 and 2022, net of gains, were $5.8 million and $1.0 million, respectively.
To meet foreign cash requirements, funds are transferred weekly from our corporate office to Mexico. Currently, we do not utilize derivative instruments to hedge fluctuations in the Mexican peso (“MXN”) to U.S. dollar (“USD”) exchange rates. However, management periodically evaluates the feasibility of employing such instruments.
Added
Such events may lead to reduced supplies of these materials, increased supply costs, or disruptions to our production schedules. Unexpected regulatory actions affecting imported fruit, including inspection detentions or holds related to phytosanitary or pesticide issues, can also increase costs, reduce usable supply, and negatively impact margins.

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