Although low prices dragged avocado revenues down for Calavo in the second quarter, the company boasted a 23% increase in avocado volumes, and renovations at its Mexico packinghouse will give the company a capacity of 600 million pounds.
The Santa Paula, Calif.-based company reported big revenue and volume gains in their second quarter of fiscal year 2012, with a 40% increase in tomato and avocado volumes.
Lee Cole, chairman, president and chief executive officer said in a news release the third quarter of fiscal 2012 is expected to be characterized by peak California avocado supply, lower fruit costs from Mexico and completion of the renovations at the Uruapan, Michoacan, facility in July.
For the three months ending April 30, Calavo’s net income before a disputed Mexican tax payment rose 84% to $4.4 million, up from $2.4 million in the fiscal 2011 second quarter. After the $1.9 million Mexican tax was accounted for, the company said net income was $2.5 million, still up slightly from a year ago. The company indicated it will not appeal the tax, which dated back to an issue in 2004.
Operating results for the most-recent quarter include those of Renaissance Food Group LLC (RFG), which the company acquired in June of last year. Sales in the RFG business segment in the second quarter totaled $36.1 million, according to the release.
“Since becoming part of the Calavo family of fresh foods a year ago, RFG has shown strong sales growth, due to an outstanding lineup of value-added, high-quality products,” Cole said in the release. “We also value the significantly larger footprint RFG provides to Calavo in the grocery channel as a result of our combined portfolio of branded offerings.”
Revenues for Calavo increased to $139 million, up 18% from $118.7 million for the same quarter last year. Operating income rose 87% to $7.1 million, compared with $3.8 million a year ago.
Revenues in Calavo’s fresh business totaled $91.7 million, a decrease of 15% from sales of $107.7 million in the second quarter of 2011.
Despite the higher unit volume of tomatoes and avocados, ample supply and lower prices caused revenues to fall, the company said in the release.
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